Cooking the Books: Sinned against not sinners (2008)

The Cooking the Books column from the August 2008 issue of the Socialist Standard

“PAY RISES DON’T CAUSE INFLATION – AN INCONVENIENT TRUTH FOR DARLING” was the headline in the Daily Telegraph of a recent article by the unspeakable Simon Heffer (25 June) . He was criticising the increasingly strident calls by the Chancellor of the Exchequer for pay restraint so as not to fuel inflation. Heffer’s argument was that as rising prices have been caused by the government allowing too much money to get into circulation they can’t be stopped by holding back wages.

We have to admit that he is basically right. Insofar as rising prices in Britain are not due to other factors such as rising world oil and food prices (since rising prices and inflation are not the same), if the government overissues the currency, i.e. puts more into circulation than enough to make payments, pay taxes, settle debts, etc, then all prices will tend to rise. As wages are a price – the price of a person’s ability to work, or what Marx called their labour power – they too will rise. So to blame inflation on wage increases is wrong.

So, sometimes a nasty person can be right. Heffer reminds us that another obnoxious character, Enoch Powell, was saying this about inflation in the 1960s. He quotes something Powell said about the wage restraint policy of the Wilson Labour government. Powell was even clearer in a speech he made on 20 November 1970 about the similar policy of the Heath Tory government:

“Wage claims, wage awards, strikes, do not cause rising prices, inflation, for one simple but sufficient reason – they cannot. There never was a strike yet which caused inflation, and there never will be. The most powerful unions, or groups of unions, which was ever invented is powerless to cause prices generally to rise … in the matter of inflation, the unions and their members are sinned against, not sinning. In the matter of inflation, the unions and their members are as innocent as lambs, pure white as the driven snow”.

We couldn’t agree more and said so at the time. There is, however, a point of difference. Heffer (and Powell himself sometimes) suggests that it is government spending as such that causes inflation (Heffer is a mad marketeer who wants to reduce government spending and interference so as to let the market rip). But this is not necessarily the case. If it is financed by overissuing the currency, government spending will have this effect, but inflation is not due to the particular way the excess money is spent (in this case by the government to finance its spending) but to the fact that it has been issued in excess.

Darling may be cleverer than Heffer gives him credit for. The job of all governments is to preside over the operation of the profit system and to try to ensure that profits are protected and maximised. So they are always against pay increases, irrespective of whether or not prices are increasing. Darling may just be using the current spurt in prices as a pretext to reiterate what is a permanent policy of all governments.

Editorial: Divide and Rule (2021)

Editorial from the September 2021 issue of the Socialist Standard

No one can deny that many young workers are having a tougher time of it. Many see their future prospects fading and find themselves in low-paid positions or on zero-hours contracts. With the relentless rise in property prices, even relatively well-paid young workers are priced out of the property market and have to make do with paying extortionate rents. Those who have been through the higher education system are facing crippling debts. In the current pandemic, many have lost their jobs in the hospitality sector.

It is no wonder that young workers feel that the economic system is rigged against them. This has given some capitalist media commentators the opportunity to pit the younger generation against the older one. While ‘Generation Rent’ struggles to pay their rents, the baby boomers, who own property, bask in their rising values. The older generations benefited from free further education which was taken away by a Labour government run by baby boomers in the 1990s. The Conservative/ LibDem Coalition government of 2010-2015 tripled student tuition fees while also introducing a triple lock on old age pensions, where the state pension would rise each year either by the inflation rate, average wage growth, or 2.5 percent, whichever was the highest. To top it all, in 2016, the vote to leave the European Union, supported disproportionately by older voters, deprived younger workers of access to job opportunities in the EU job market and the Erasmus Programme, an EU student exchange programme.

Simon Heffer in the Sunday Telegraph (‘Natural Justice demands an end to the triple lock’, 1 August) states that due to the pandemic, earnings could rise by 8 percent next year and that this would create an increase of £3 billion in the annual tax bill to pay for the rise in the state pension necessitated by the triple lock, He then argues that it would be young people, with their own financial struggles, who would have to shoulder this burden. So, for the sake of fairness, the triple lock should be scrapped. In fact, the tax burden falls not on the working class, (whether old or young), but on the capitalist class. The suspicion here is that this is where Heffer’s concern really lies. Polly Toynbee in the Guardian (‘The pension triple-lock is an insult to the UK’s young people’, 1 July) makes similar arguments for abolishing the triple lock on pensions, but, unlike Heffer, acknowledges there are poor pensioners, who, she believes, should receive higher pension credits.

These divide and rule tactics draw attention away from the real cause of young peoples’ woes, which is not the selfishness of older people hogging society’s wealth, but from their position as workers in the capitalist system itself. The children and grandchildren of capitalists, such as Jeff Bezos or Warren Buffet, do not face the same problems as mentioned above. Capitalism is based on the exploitation of the working class who produce the wealth of the privileged minority owning class, which leaves them in relative or absolute poverty. It also generates economic crises, such as the 2008-2009 downturn, which disproportionately affects younger workers, especially those who have just left school or university. Workers of all ages have an interest in abolishing capitalism and establishing socialism.

Why the Daily Mail Hates Karl Marx (1998)

From the July 1998 issue of the Socialist Standard

Only the most isolated and politically ignorant could have failed to notice the campaign launched recently to defame Karl Marx and discredit the Marxist viewpoint on the one hundred and fiftieth anniversary of the Communist Manifesto.

Hardly a newspaper or magazine failed to join in the collective rubbishing of Marx, the Marxian world view and the possibility of a socialist alternative to the market economy. Radio and TV were at it too. Newsnight was among several programmes contributing fairly lengthy pieces while Talk Radio primed Peter Hitchens—red-baiter supreme at the Daily Express—to denigrate Marx in an hour-long programme one afternoon, though his particular excesses were reined-in by an invited interviewee from the Socialist Standard and many of the subsequent callers.

Simple Simon

Possibly the worst episode in this whole sorry campaign was the publication by the Daily Mail on 7 May of an article by one of its regular buffoons, columnist Simon Heffer. Entitled "Obscenity of Celebrating This Man`s Anniversary", this was an article which did not bother with the usual niceties of argumentation and logical analysis or concern itself with such trivialities as facts and figures. It was, instead, one of the most puerile attempts to discredit the working class movement, its history and political development, that there has been in Britain for a long time. In it Heffer accused Marx of being responsible for mass murder, famine, persecution and dictatorship—and that's just for starters. Never one to understate his case, Heffer claimed that Marx was a man "who has caused more misery, bloodshed, death and ruination on our planet than anyone else in history" likening him to Hitler, but worse.

To take the most serious accusation—that of mass murder—Heffer makes this charge in the almost certain knowledge that Marx never personally killed anyone, did not personally advocate killing anyone and never occupied any position whereby he was able (or willing) to order systematic murder, like say Hitler or Stalin. Moreover, this crude accusation comes from a journalist who takes his coin from a newspaper which openly supported Hitler and his cosh-wielding friends in the British Union of Fascists during the 1930s. Unsurprisingly, given this level of argumentation, he goes on to call the defenders of Marxism "hypocrites".

In his article Heffer labels Marx "an atrocious man". Accusing him of almost everything short of eating babies, he contends that Marx "plunged his family into poverty and near-starvation while devoting himself to his writings". Though the truth—unsurprisingly—is rather more complicated than this, how this accusation can be squared with Heffer's adulation for people like Keith Joseph and Enoch Powell, who were not exactly renowned for their warmth, generosity and personal devotion to others, is difficult to see. But, to take Heifer's sneering tone, he is a Christian and of course Jesus never let his personal convictions or over-weaning sense of his own self-importance impinge on the material well-being of those closest to him . . .

Economical with the truth

Heffer's foolhardiness in this article knows no bounds. Even journalists with the tightest of deadlines to meet know that one of the golden rules is always to check statements and sources before going to print. Not so Heffer. For how else can one account for the following statement:

" . . . his conviction that there was only so much wealth, and that the rich could only enrich themselves at the expense of the poor—was understandable in Marx. He was, after all, one who entirely misunderstood economics. He would not believe that the size of the cake, as well as the size of the slices cut from it, could continue to grow. As a result of this he advocated the persecution of those who controlled the means of production: the capitalists."

There is, to use the old aphorism, so much wrong with this statement it is difficult to know where to start with it. Fundamentally, it is not Marx who "entirely misunderstood economics", it is Heffer. Marx never said anything so daft as the size of the capitalist cake could not grow, and none of the many standard modern economics textbooks that otherwise give little credence to Marx would be as slipshod to say that he did. On the contrary, Marx spent much of his time examining the dynamics of how capitalism grows in practice over the long-term through the accumulation of ever vaster amounts of capital.

Effectively, Heffer has it the wrong way around—it is not a fixed amount of wealth production in capitalism which forces the rich to exploit the poor if they are to get richer still, it is the rich's exploitation of the poor which provides the very basis for the expansion of capital and therefore of the size of the cake itself. If the rich (the capitalists to be precise) didn't exploit the poor (the workers), or simply weren't able to for some reason, then there really would be no growth of the system, no accumulation of capital. One of Marx's crucial discoveries in the field of political economy was that the working class of wage and salary earners gets paid less than the value of the goods it creates, the difference being a surplus value which accrues to the owning class in the form of ground rent, interest and profit. If capitalists are to successfully compete against their rivals in the market a large proportion of this surplus value generally needs to be re-invested in new and more efficient techniques of production, thereby leading to a long-term expansion in the overall productive capability of society. If there is no exploitation of the working class to produce surplus value, there can be no new investment in production and further expansion of the system. There can be no capitalist growth without working class exploitation.

Heffer is also incorrect when he then goes on to infer that in the market economy opposed by Marx "all prosperity trickles down to improve everybody's lot". Again this is such a ludicrous statement that few defenders of capitalism would now dare utter it. They are no doubt aware—unlike Heffer—that while the world capitalist system continues to sporadically grow and while the top one percent of the world's population continues to grow ever richer, the poorest on this planet are poorer than ever (indeed, about half of the countries in the world have seen their GNPs fall this decade whether they be free-market based nations or rigidly state-controlled ones). While Heffer poses as the considerate humanitarian he might care to fly to the Sudan to tell the starving millions the good news that Dixons now have a 21 percent share of their market, with profits up again, and that it will all be trickling their way shortly.

An aunt called Sally

It is evident that Heffer wrote this piece on Marx having read little or nothing by him, though in this he is not alone among those pundits who have an opinion on everything but knowledge of very little. If he did get to grips with reading Marx (or even motivate himself enough to read one of the half-decent books about Marx and his views) he might then be in a position to realise that, far from being an economic ignoramus, Marx correctly outlined:

• the boom-slump cycle endemic to capitalism and how no government intervention—however benign—would be able to prevent it;
• how the market economy would eventually spread its tentacles into every aspect of human life, conquering the entire planet in the process;
• how an excess issue by governments of paper currency beyond that required by additional value production is the real cause of inflation;
• class division and the modern development of a world economy where the division between the richest and the poorest is the widest in human history;
• the growth of a colossal credit-based financial apparatus that, as time goes on, becomes increasingly isolated from the realities of the wealth production process on which it depends.

Heffer was ignorant to this and much else besides (although the term 'ignorance' here may be taken to imply a certain innocence, which in this context would be mistaken). His only motive was to ridicule Marx and rubbish the method of understanding the world he bequeathed to the working class as irrelevant at best and downright dangerous at worst. Hence, like most of the knee-jerk attacks on Marx which have populated the media, Heffer's piece could not resist associating Marx and Marxism with virtually every hideous dictatorship created this century. Without any justification whatsoever, Heffer claimed that Marx wanted to eliminate liberty and is content just like all the other shoddy scholars throughout history, to damn a theory on the basis of the deeds of those who later claimed to uphold it without asking himself whether they actually did uphold it or not. Heffer would never dream of doing this with Christianity (or Conservatism for that matter) but Marxism is apparently fair game and therefore gets damned by association with every tin-pot dictator this side of the Khmer Rouge.

Workers' gain

Throughout the bitter and difficult struggle of the working class against capitalism, the workers have made a number of serious and identifiable gains. Some of these have been economic, others more political in nature, including those relating to the organisation and outlook of the working class. The method of understanding society and social change left by Marx and Engels is one of the most important of these. Without the theoretical tools left by Marxism the working class is bereft of a comprehensive understanding of the market system, class division and why capitalism must be overthrown in a democratic socialist revolution. It is precisely for this reason that it is so feared by the ruling class and their representatives and why, periodically, so much effort is expended on denigrating it. The recent campaigns surrounding the 150th anniversary of theCommunist Manifesto have been but a part of this entire process.

If anyone doubts the prescience of the Marxian analysis and views this defence of it as mere hyperbole, consider the following passages from the Manifesto about the development of world capitalism and the ruling capitalist class:

"The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilisation . . . It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst, i.e. to become bourgeois themselves. In one word, it creates a world after its own image."

And yet:

"Modern bourgeois society with its relations of production, of exchange, and of property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells."

In a world of uncontrollable global economic crises, permanent warfare, rampaging environmental destruction, unprecedented income inequality, social dislocation and delinquency, who can in all seriousness say that Marx was fundamentally wrong? And if his identification of the problems of the modern world and their trajectory is so accurate—especially for 150 years ago—his proposed solution for them must surely command attention too. That, of course, is a different story, though one elaborated in the pages of this journal often enough and yet still some way up the steep learning curve now confronting the likes of Simon Heffer and those others still to come to terms with the fact that ignorance and abuse are never a defence for long against accurate and coherent analysis. That this is unlikely to stop the Daily Mail and its ilk is more of a reflection of their own self-serving, anti-working class viewpoint than of the alleged "evil" of a long-dead German philosopher with a funny beard and a penchant for libraries.

Dave Perrin