The Tyranny of Usury. (1909)

Book Review from the August 1909 issue of the Socialist Standard

The Tyranny of Usury; A Plea for the Nationalisation of Exchanges,  by John McLachlan. Manchester, Leventhulme. 1d.

Superstition dies hard. Driven from the human mind on the religious side it endeavours to find entry on another, and no subject has brought forward so many cranks, faddists and maniacs as the subject of the above pamphlet if we except religion.

The author, who, by his praise of Keir Hardie, is probably a member of the I.L.P., first defines usury as the total surplus taken by the capitalist class, and then narrows it down to the ordinary definition of interest, or the amount charged for the use of money or forms of credit. By a shuffling of these two definitions, when it suits him, he is able to skim over awkward points and give his case some small appearance of being worth consideration.

An attempt is first made to explain how it is that poverty exists. “Socialists usually lay stress upon Private Monopoly of Production and Distribution as the cause. But while this later assumption (?) is undoubtedly ultimately a true one, it is daily being borne in upon us that PRIVATE MONOPOLY OF EXCHANGE is proximately the cause of Unemployment (and, of course, of Poverty) through the operation of those commercial crises which have exercised until now the wit of capitalist apologists to explain”.

What causes the crisis? The author gives the following description of a crisis while deferring the explanation of how it arises.

“On a given day let us assume, trade and commerce are exceedingly brisk . . . All is well – apparently. Suddenly the unthinking merchant discovers a difficulty in obtaining credit. Bankers call in their loans, refuse renewals, and decline to discount even the best paper except at high rates, credit being generally refused”. The ordinary features of a crisis are then detailed. The “catastrophic” and “dogmatic” economists who used to say that the cause was overproduction are summarily dismissed as “antiquated”. This sort of thing may have been the cause early in the nineteenth century, but is utterly fallacious to-day.

A so-called review of the crises of the nineteenth century is then given in an attempt to show that they were due to financial causes, and the following “general rules” are deduced.

“(1) Unemployment and trade depression always succeed a Credit stringency.

“(2) Financial Crises and Unemployment are quite possible as cause and effect without the additional factor of over-production which was formerly a feature of these crises.

“(3) An increase in the currency always lessens the immediate strain upon the national credit”.

All this leaves one quite in the dark as to why “the unthinking merchant discovers a difficulty in obtaining credit” and what it is that causes a “credit stringency”. But the next chapter, headed “The Fallacy of the Gold Standard”, attempts to explain the position gold occupies in the settlement of debts, and says, “It is legally enacted, we repeat, that debts must be paid in Gold on demand”. A comparison is given between the liabilities of the banks and the gold in circulation, and the question is asked, “Why is our gold currency not larger? Ah! there’s the rub! If our currency were enlarged to the extent of giving representation to everything considered as negotiable the People would be freed from the obligation of paying for the money they use.”

Lucien Saniel, in his introduction to the American edition of Marx’s Value, Price and Profit has pointed out the dangerous misleading given to the working class by the “revolutionary sounding but intensely bourgeois sophism of the Anarchist Proudhon”, and this warning applies with full force here. Further on we shall show the similarity of McLachlan’s and Proudhon’s positions. Note the portion of the above quotation from pamphlet italicised by the author. Who are the people who find a difficulty in “paying for the money they use”? Not the working class in any sense of the word. Not the large capitalists, for they control the powers of government and have a currency suitable to their interests. There is left the small capitalist and shopkeeping section, who, fond of calling themselves the “middle” class, find themselves unable to hold their own positions against the giant production and “chain store” system of distribution that is crushing them out in all directions. Hence this howl for an extension of “credits” and the introduction of “cheap” money for the purpose of paying their debts.

It is one of the stock lies of the money cranks to say that all exchange is a question of creditor and debtor and that all debts must be paid in gold. An exchange means to pass over one thing for another. Whether the things exchanged are directly use-values or not does not affect the point. If the commodity gold is given for the commodity food then an exchange has taken place, but there is no creditor or debtor. A debt only exists when a promise to pay in the future has been made. In the absence of any specific statement to the contrary, and only in this case, the creditor can demand payment in gold or legal tender.

Moreover, the removal of this obligation would not alter the facts of the case one atom. If the currency gave representation to all things considered negotiable, where is the debtor to obtain this currency when his debts fall due? From the State bank, it may be answered. How will the bank advance the money? Upon the negotiability – that is, the saleability – of the debtor’s things. But that is exactly what applies to-day, and it is only when his goods are unsaleable that he fails to pay his debts. In other words, it is because of the industrial crisis or depression that we have “Credit stringency” in various directions. A striking illustration of this “stringency” fallacy was shown a little time ago when the L.C.C. floated the last loan. The money market was “tight” and business bad, yet the amount required was subscribed nearly forty times over. In other words this was a proof that bad trade caused the “stringency”, and not the absence of currency, of which there were large amounts seeking sound investment. It is a well known fact that when trade is bad, or a crisis is upon us, there is more currency circulating than when trade is good. According to Mr. McLachlan’s third general rule, this should lessen the strain. Therefore, the crisis should bring its own cure! Such is one of the absurdities these cranks land themselves into.

In the section dealing with the Clearing House the author objects to the “commission” levied upon the paper transactions there recorded, and then says that this “the toll paid by commercial men for the management of their accounts”. Why he objects to this he does not say.

In the last section on “The Nationalisation of Exchange”, the author reaches his grand panacea – and shows incidentally how superficial and shallow his knowledge is, and how easily he has been gulled by another money crank – Mr. Kitson. After stating that “to confer upon any single article the sole privilege of determining the values of all other commodities whatsoever is iniquitous”, without giving any evidence that this is done, he gives us the following gems.

“What is value? Simply an exchange relation between commodities.” Then he says “cost of production must be reckoned with in all transactions”. Here is a flat contradiction, for what has cost of production to do with the exchange relation? If it is answered that this decides the quantities in the exchange relation, he at once denies this, for in the next sentence he says “Value is determined by Supply and Demand and its relations are always changing in deference to changes in the supply and demand for commodities”. To explain this he follows the old dodge of the capitalist apologists who, as Marx has so caustically put it, always have to wander outside Capitalism in their endeavour to talk round awkward points. Mr. McLachlan therefore leaves modern society and goes to an island.

“If on an island, there existed at a given time, 6 pigs, 4 sacks of flour, 12 sacks of potatoes, and two cows, it would follow that for the time being one cow would exchange for three pigs; for two sacks of flour; or for six sacks of potatoes. And if £1,000,000 in gold were imported, 1 cow would inevitably exchange for £500,000, while potatoes would cost £166,666 13s. 4d per sack”. And if I import 10 bricks each brick will be worth £100,000! Political economy up to date. “When any increase or decrease takes place in the quantities on the market of any commodities the ratio of values (and, of course, the price) undergoes a corresponding change”.

In the above statements the immense superiority of the method of demonstration used is at once apparent. Dull, awkward things like facts, evidence, history, experience, are beneath our author’s notice, and from the higher standpoint of his “inner consciousness” he evolves the proof in the words “it would follow”. The only authority he can evoke is the “inimitable” Mr. Kitson, who says in his book A Scientific Solution of the Money Question, that the only relation between commodities is number and “this is the only expression of value possible”.

And yet a 3rd standard school boy can put a question that knocks the bottom out of the whole case. Why does a given number of one article exchange for a given number of another article? Mr. Kitson cannot tell us. His disciple says it is a question of division of the quantities existing into each other. Then how can he explain that the Statistical Abstract gives Raw Wool at 11.88d. per lb while Woollen Yarn is given at 20.54d., or nearly double the price? Divide wool into wool and the result is – wool. Yet the difference in price is 8.34d.!

Finally we have an outline of the scheme for salvation laid down.

“A municipal bank would operate in this fashion. Let us take the case of a farmer short of ready money, but with 400 acres under wheat crops, estimated to produce from four to six quarters of grain per acre. His labourers want their wages. Ordinarily a credit stringency would cripple the farmer, whose workmen would also suffer as a result, but at our Municipal Bank he could monetize his credit based on 1,600 quarters of wheat. He draws notes on the Branch Bank at Puddleton and pays his workmen therewith, the notes circulating as legal tender, and being received by tradesmen in Puddleton and elsewhere on the strength of the stamp of the Puddleton Branch Bank. Farmer Brown doesn’t pay 3½ per cent for the accommodation, either; any charge upon his loan is calculated upon the cost of maintaining the Bank, which preferably should be a charge upon the local rates. Farmer Brown simply exchanges his unknown credit for that of the Bank, which forthwith debits him with the amount of the loan, payable in a given period of time by tendering a number of notes equal in total value to the amount of his loan. And this procedure could be followed in the case of all reputable citizens, commercial and industrial houses, shopkeepers, etc.” In fact by everybody except the working class, whose “unknown credit” would fail to pass the bank test.

Passing by the numerous assumptions with which the above quotation bristles, the general position is that laid down by John Gray, afterwards plagiarised by Proudhon and crushingly dealt with by Marx in Poverty of Philosophy and The Critique of Political Economy. How a tradesman would be better off in having to accept a note instead of gold for his goods it would be difficult to explain; while the experience of the French Assignats shows the folly of trying to pay debts with paper.

The quotation assumes sound security in one part and denies it in another. If the Bank issues notes upon security of an exchangeable value, then, as shown by the L.C.C. loan, there is plenty of money awaiting that use now. If the farmer’s credit is “stringent” , that means his security is of doubtful exchange value. Then where is the soundness of the Bank?

The only point that might be said is the one that Farmer Brown would not pay 3½ per cent for the loan. Ignoring at this stage the question of what it would actually cost to run the Bank, we can now see the economic interest standing behind this scheme. It is to relieve the farmers, commercial men, shopkeepers etc from the burden of paying interest on their borrowed capitals. It is the attempt of the smaller section – financially speaking – of the capitalist class to increase their share of the surplus-value by cutting out one of those with whom they at present have to share that surplus, namely – the interest lord. So blatantly ignorant is the author of even the smallest conception of the working class position that he has the brass to say that “It is safe to say that the [French] Revolution of 1848 failed mainly because the insurgents neglected to capture the means of Exchange. The breakdown of the Commune was due, too, largely to the financial operations directed against it”. Shades of Thiers and Gallifet! What friends you have in the Anarchists and the I.L.P.!

Jack Fitzgerald

Letter: Meeting each others needs (1995)

Letter to the Editors from the February 1995 issue of the Socialist Standard

Meeting each others needs

Dear Editors,

As I run a LETSystem in Canterbury I was amused to read Adam Buick’s article "LETS Abolish Money" in your December issue.

Despite Mr Buick’s evident dismissal of the very concept of LETSystem I was amused rather than perturbed, because even with the research that he had evidently undertaken it is clear that Mr Buick simply fails to understand either their ethos or their future potential. This is not at all unusual. LETSystems are so simple that a great many people have difficulty in understanding them.

Mr Buick dismisses LETSystems for being small, or rather for the twin reasons that they are small and that the range of goods and services that they offer is limited. That they are is undoubtedly true, but there is a very good reason for this. LETSystems are a new phenomenon. most individual ones are very young, even the oldest in Britain is no more than four or five years old. I don’t suppose that even Mr Buick was a towering and influential socialist intellectual at the age of five.

Having grown to a membership of 200 in less than twelve months the Canterbury LETSystem is beginning to attract the interest of "high street" businesses whose own involvement is likely to increase the system’s appeal, even to ordinary people (i.e. other than middle-class hobbyists and New Age dreamers).

As the system grows in size it will become more rather than  less able to pay people to run it and still be far more efficient than the conventional, money economy which requires approximately 10 percent of its workforce to be employed in "financial services".

There may well be an optimum size for any given LETSystem, the bigger they are the more services they are likely to offer and the stronger and more credible they are likely to be perceived, the smaller they are the more intimate they are and the quicker will a person's spending come back to them as earnings. But we do not need to arbitrarily impose limitations upon a system, its natural dynamics will enable each system to find its own optimum size, which may number in the hundreds, the thousands or even the millions.

Beyond these matters, which essentially pertain to the practical aspects of establishing and running a system. Mr Buick's most striking failure is his inability to understand the long-term potential that LETSystems have for converting the present-day market-dominated society into an egalitarian one where everyone’s needs can be met, their dignity maintained and where the environment can be protected. Trading with a LETSystem is not barter, Indeed, use of cash is actually closer to barter than is use of a LETSystem. The Pound Sterling is derived from an entity of intrinsic value — a pound of Sterling silver. So when you use cash you are exchanging one item of intrinsic value (or rather a paper representation of it) for another, which is precisely what bartering involves. By contrast, the credits that one earns or spends in a LETSystem are purely abstract measurements. That they are given a nominal value, usually in relation to the Pound Sterling, is solely to enable everyone to share a common valuation.

This purely abstract nature of their units of currency underlies one of the great advantages of LETSystems. Whereas if you are exchanging cash for goods or goods for cash you have to have one or the other with LETSystems you don’t. You can spend LETS units before you earn them, even before you are able to earn them. Given the strongly inculcated resistance that most people have towards going "into the red" new members of the Canterbury LETSystem are positively encouraged to spend, spend, spend!, for by doing so they are putting credits into other people's accounts which will further encourage them to spend and so increase everyone's opportunities to earn.

Within a LETSystem the sum total of everyone’s accounts at any one moment will always be 0. So for some people to be in credit it is necessary for others to be "in commitment", this differs from debt within the conventional economy because it is not seen as being irresponsible, it is necessary if trading is to take place.

It is this feature of LETSystems that will enable the market economy to continue to meet people's needs (or rather be the means by which people will continue to meet each other's needs) whilst causing it to cease to be a means by which some people can attain power over others.

Mr Buick’s statement that "A hoard of cash is no more useful than a large LETS credit balance" is an extraordinary one to come from anyone other than a contrite capitalist apologist, if some people have a large hoard of conventional money (in whatever form), given that there is a finite amount of it, other people must have little or none, and given that one must have it even to meet one's basic material needs, clearly those who have the stuff in large quantities have enormous power over those who haven’t. By contrast, given that LETS credits are purely abstract measurements with no limit and given that one can spend freely even with a “negative" balance no one with a large LETS credit has any power over someone else who might, at a given moment, be in commitment.

If, as Mr Buick proposes, the elimination of want is to be achieved by the elimination of the market system whereby people exchange goods and services to meet their needs, how will these needs be met? By a central economic authority with complete power over everyone's lives? Mr Adam Buick?

We can retain the benefits of a market economy whilst removing its current absolute dominance and less benign aspects, we can enable individuals and their local communities to secure greater power and responsibility for their own lives, we can remove the inefficiencies and environmental destructiveness of an excessively competitive society and so achieve the type of society that is the dream of many, whether socialists or not. by the very simple idea that is the LETSystem.

After a myriad of Utopian dreams have come to nought down the centuries we now have the means of creating a just and egalitarian society.

Anne Belsey, 

Faversham, Kent

Reply:

Your letter illustrates perfectly the point we were trying to make: the exaggerated claims of the benefits and possibilities of LETS made by some of its enthusiasts. You see LETS as a means towards creating "an egalitarian society where everyone’s needs can be met. their dignity maintained and where the environment can be protected". We are all for creating such a society, but say that LETS schemes will only ever play a marginal economic role.

For LETS to replace "the present-day market-dominated society” they would have to spread out of their present field of personal services, repairs, home cooking and gardening into, and the list is not exhaustive, farming, the generation of electricity. the provision of water, gas. sewage and telephone services. the manufacture of the cookers, fridges, heaters, cars, bikes. TVs. radios, computers (that LETS members merely repair not produce), not to mention the manufacture of the machines and equipment to make these consumer goods and the maintenance of a transport system to move them. They've got to take on and beat economically the public utility companies, the supermarkets, the multinationals and Big Business generally. We are sorry to have to break the bad news to you, but LETS schemes are not going to do this. They are never going to spread outside their present restricted field and even there they are never going to predominate.

This is because LETS are essentially an arrangement for conducting multi-sided barter amongst self-employed individuals. This means they are going to be restricted to the sort of things an individual can do. It also means that they have little interest for those in full-time employment with an adequate wage or salary. (For such people it is always going to be more convenient to pay someone to repair their TV out of the money they have earned than to commit themselves to a couple of hours extra work to exchange for this.) In addition, as the article stated, above a certain size LETS schemes become more cumbersome than resorting to ordinary money. This is not a defence of conventional money, merely recognition of a fact of life within "the present- day market-dominated economy”.

Our answer to the market economy is not to reform it as you want but to abolish the market. No, this does not mean some central economic authority deciding what people need. We envisage a self-regulating system of production for use. in accordance with the principle “from each according to their abilities, to each according to their needs", with individuals deciding what their needs are. On the basis of the common ownership and democratic control of all land and industry, individuals would set the productive system in operation by what they actually took from the common stores to satisfy their needs under conditions of free access; this would then be transmitted to the stores' suppliers and from them to their suppliers and so on down the line and throughout the whole network of productive units.

Finally, don't get us wrong. We are not saying people shouldn’t join LETS schemes, nor that they are a complete waste of time within the present economic system. What we are saying is that they are merely one mechanism for surviving within the present system, on a par with housing associations, coops, building societies. Christmas Clubs, etc. People can join them if they want, but they should be under no illusion that they contain the germ for the transformation of society.

For this to happen, the large-scale socially-operated industry where the bulk of the wealth of society is produced today must first be taken into common ownership and democratic control. And this requires society-wide political action, not what our next correspondent calls "practical small-scale change” which leaves the commanding heights the economy in capitalist hands. - Editors.

A Middle-Class Utopia. (1907)

Book Review from the July 1907 issue of the Socialist Standard

Modern Thraldom.—A New Social Gospel, by Dr. W. Hampson, M.A. London: Wells Gardner, Barton & Co. Paper covers, 162 pp., 1s. 6d. Net.

The early portion of this book describes the servitude into which “borrowed” tools, houses, and land are supposed to have thrown the “labouring classes,” the “clean clothes classes,” and also the tradesmen, small manufacturers, and farmers. The evidence in the book, however, really shows that the poverty of the workers and the crushing of the small capitalists are due to the concentration of wealth and industry into fewer hands turning increasing numbers into propertyless hirelings of the possessing few. But to put it thus involves Socialism as the solution, so our author prefers to attribute the situation not to the inevitable march of industrial development, but simply to credit in some form or other. 

The most interesting part of the book is that dealing with agriculture, where many reasons are given for the decrease in number and increase in size of farms, but where the most important reasons such as the development of agricultural machinery which cannot profitably be employed on small farms, the general economies of operations on a large scale, and the development of the machinery of transport which brings other climes into more acute competition, are missed. This, however, is of a piece with the fact that Dr. Hampson nowhere realises the force of the economic trend.

From his point of view of the small property-holder, the author is much troubled by the question of the rates, but his own evidence shows it to be a question that does not concern the workers or even the tenant farmer. He says, p. 46: —

“At the time of the great depression in land values and profits from land, it became impossible for farmers to continue paying their former rents, and a percentage was remitted in most cases, so as to bring the amount payable each half-yearly rent day just within the limits of the possible. If a season were exceptionally bad, so as to involve the farmers in inevitable loss, a larger percentage of rent would be remitted. If times improved in some way, the remission would be less. Thus when the Agricultural Rating Act was passed, to relieve the farmers of a portion of their rates, a smaller percentage of rent was remitted the next half year.”

The middle class of course has its schisms and the author tilts against modern radicalism and against that municipal enterprise which is such a blessing to many middle-class investors, and also against the officialism that provides easy positions for their sons ; but Dr. Hampson’s attitude is nevertheless essentially that of the class between the devil and the deep blue sea. He protests against rings and combines, but is specially vehement against working-class trade organisations, and states that trade union action, by restricting free competition in labour “means a reduction of wages and in the standard of living,” while on p. 28 it is further urged that:—

“All combining, negotiating, organised advising and warning, striking, picketing, and other proceedings intended to restrict the freedom of the labour market, ought to be regarded and treated as criminal, so as to restore complete freedom to the man who wants to sell labour and to the man who wants to buy it.”

There is also on p. 12 a curious defence of the exploitation of labourers—exploitation by the middle class of course. It is stated that the shareholders having the necessary plant and materials or equivalent wealth—

“Lent them to the officials and working men and women of the factory, on condition that the latter, having borrowed them and worked with them, should pay to the lenders a part of the profits earned by their labour, namely, all that was over after they had been paid a subsistence wage depending, among other conditions, on the recognised minimum standard of living in the district at the time. Now this was a perfectly open bargain, well understood by all the parties to it, and the shareholders, who in fact lent the factory and appliances, have a right to claim that they shall not have hard words thrown at them, as capitalists, because they are taking a part of the profit earned by other men’s labour.”

In the description of the Utopia that is expected to follow the adoption of the author’s suggestions there is nothing but glorified middle-class conditions, with the middle class predominant in wealth and power. It is prohibited to live in hired rooms and houses, and all credit is forbidden except the capital of limited liability companies, of which all shareholders are required to be also occupied in connection with their company, while no shareholder may own more than five times the smallest allotment of shares. A kind of Single Tax is instituted (in spite of the author’s ideal of free internal trade) in the nature of a poundage on every cash transaction. This tax (which the author says is not a tax, and which is to be levied without officials) is to enable the one man government to supply such of the citizens as have deposited £250 in the State Bank, with a further £250 on their marriage for the purpose of buying house, furniture and allotment. There are to be no boards, committees, councils or parliament. National government is to be run by an elected president and local administration by a manager ; while no one can vote unless he owns, among other things, a bicycle !

There is still to be wage-slavery in the new Utopia, but the workmen are supposed to be able to get higher wages through the absence of trade organisations, and through being forbidden to hire rooms, so having to buy a room or rooms outright. The labourer is to give six hours industrial labour per day and put in the rest of his time on the land. The thrashing, winnowing and grinding of corn is to be done at home in small hand machines because :

“However little it may cost to grind in a steam driven mill, it costs less to do it at home in the time that used to be spent in the evening at a public house. It costs nothing at all, but actually saves the money that was once spent in drinking to while away the time.”

How typically middle class ! 

Even the great domestic servant question is almost solved in this Utopia. The author says :

“And are mistresses no longer the slaves of their servants ?

In this respect also there is great improvement. We have now no large class of excessively rich, keeping large houses full of ‘pampered menials,’ and so setting before other servants a false standard of lavishness, luxury, ease, pilfering, and ‘perks.’ On the other hand the middle-class ladies, having given up imitating the luxury of the rich, have themselves become as good practical housekeepers as their husbands are practical business men and cultivators. They can, if need he, manage their houses in many cases without outside help, and so, when they have that help they know how to keep, without petty domineering, the position of mistress in their own homes.”

The Doctor’s Utopia illustrates both how completely class interests as they are recognised mould a man’s views, and how narrow is the mental vision of the middle class.

For the realisation of this Utopia an association called the Land and Labour League is to be formed and to be endowed by a few charitably disposed millionaires for the purchase of property, the tenure of which is to be sold to League members who in turn are not allowed to give any of their property as security for a loan. Leaguers will pay “no rates or taxes,” these will be paid by the League out of proceeds of a receipt stamp tax to be levied on all members.

The League, says the author, is to be a co-worker with the garden city schemes at Bourneville, Port Sunlight, York, Letchworth and other places, so it is very small beer after all.

The League will, when funds allow, put £250 to the selected member’s on his marriage for the purchase of house and grounds that are to remain technically the property of the League—a sort of glorified building society in fact that is supposed to grow snowball like, until it absorbs the whole of Society.

But what of the, working man ? How is he to save the necessary £250 in order to participate in this paradise ? The author has told us that to-day “The lowest salary which will supply the bare living must be accepted by each applicant lest another cut in and take the place,” also that “conditions make it practically impossible for an average man to rise out of the labouring ranks in which he was born.”

The odds therefore appear to be rather long against the workers being able to save the requisite £250 each, indeed, they do not stand even an outside chance. But the author of the “New Social Gospel” has a most simple plan. It is to tax immigrants heavily and put an almost prohibitive tax on imports. Then, says the doctor:

“When all the production for the English market is secured for the English producer, there will be for a time an era of prosperity seldom equalled before. Demand will overtake supply for a time. The price of labour will rise higher than ever before; the unemployed and, under such tempting conditions, many even of those who are now unemployable, will be earning money ; and the workers being rich, the prices of common articles will rise also, though not in the same proportion as wages.”

Truly a simple plan—for simpletons. The workman knows that labour-power is the last to participate in a rise in prices, so that the problematic rise in wages will not be proportionate to the rise in general prices. The worker will also see that if prices rise, then the price of house and land rises also, thus the amount to be saved rises proportionately, leaving the possibility to the workman of saving at least as remote as before.

Further, restricted immigration is no new thing, and where instituted has made no appreciable difference to the workers. It is not the alien, but capitalist development that creates the unemployed, and the same process is going on in every country ; new inventions and processes, greater concentration and more efficient organisation decrease daily the proportion of wage workers required by the masters to produce for the market. Large numbers of workers are thus thrown on the streets while the owners of the instruments and materials of labour reap the whole of the benefit.

And with regard to a prohibitive import tax, owing to the very nature of international exchange, the import trade of the country cannot be destroyed without causing havoc in the export trade and the consequent ruin (under capitalist conditions) of those producing for export. We have also object lessons the whole world over of the futility of fiscal juggling as far as the workers are concerned. Capitalist conditions breed working-class poverty everywhere, and must do so long as the workers are the hirelings of the possessing few. But even supposing that by some miracle all wage slaves managed to save £250 and so live rent free ; is it not a fact that capitalism (whether under small or large manufacturers) turns the very thrift and temperance of the workers into weapons of offence against them ? and does not Dr. Hampson himself prove this ? Speaking of allotments he says :

“Suppose the profits from a plot of land to be equal to two shillings a week. Then a man and his family can live in the same moderate degree of comfort as before on a wage of fourteen shillings instead of sixteen if need be.

It is the professed object of the promoters of improvement on these lines that the improvement shall become general. Suppose them to succeed to the full extent of their hopes. Suppose that practically all the labourers increase their wages by such means to the equivalent of eighteen shillings, so that they could, in case of necessity, continue their present style of living on an actual money wage of fourteen shillings. The farmers would not be long in making the discovery that their labourers were able to live on two shillings a week less. And the next week they would require their men to prove their ability.”

Such, indeed, is the mainspring of the welcome that has greeted the present Liberal Small Holdings Bill. And its undeniable truth destroys at one blow Dr. Hampson’s Utopia as far as the workers are concerned. Whatever cheapens the cost of living of the workman, as soon as it becomes general, reduces his wage, competition compelling him to sell himself for a mere subsistence. Yet Dr. Hampson dares to say that if the worker did not have to pay rent he would be enabled to exact a higher wage ! The small capitalist is essentially reactionary, and his only possible ideal is one that runs counter to every economic tendency. And our author, voicing the interests and ideals of this class, has reckoned without his host, the financial magnate, who now rules the capitalist roost, and without, also, the army of the workers, who can only go forward, to industrial democracy,—not backward, to the infancy of capitalist society. Unlike the middle class intellectuals, the scientific Socialist, has outgrown the Utopian stage. Our author, however, evidently imagines that men figure the society they want and then make it to order ; so he thinks that if the public find his Utopia good they will set themselves to make one like it. The scientific Socialist does not erect a fanciful Utopia, but analyses actual Society, its economics and its history, and tracing its laws of development sees whither the basic factor, the development of wealth production, tends, and derives therefrom, not a detailed picture of the future, but the broad direction of economic evolution and the essential principles of the society foreshadowed by the present. And by the study of men’s actions, motives and history, he is enabled to discover the essential principles of the action that must be taken to render the transition speedy and beneficial.

Dr. Hampson has not done this, therefore his reforms are upon all counts a snare and delusion to the middle class in their struggle against the inevitable, while to the working class they offer at best nothing but a shuffling of masters by no means to the better.

F. C. Watts

Letter: Missing something here (1995)

Letter to the Editors from the June 1995 issue of the Socialist Standard

Dear Editors,

Re the editorial in the April issue. I assume that the vague reference to "the Green movement" gaining power refers to the Green Party.

What is your evidence for alleging that the Green Party is pro-capitalist? Which part of the Green Party manifesto opposes, or is incompatible with, “the common ownership and democratic control of the means for producing and creating wealth"? I may be missing something here. 

K. A. Gilchrist, 

Canterbury

Reply:

The Green Party’s general objective of a “sustainable society" is not at all incompatible with the common ownership and democratic control of productive resources. In fact it could only be achieved on this basis. The Green Party, however, does not stand for common ownership and democratic control, but for the retention of private ownership, profit-making and the market on a small-scale—in other words, for small-scale capitalism, involving small firms producing for local markets, instead of the Big Business capitalism geared to the world market that we have today.

Among the passages you have missed in the Green Party’s Manifesto for a Sustainable Society is the following on “Monetary Policy": 

"In a Green society the informal sector will eventually gain in significance so that formal transactions and money generally will have a lesser role than at present. There is however no reason why a financial system cannot be made to work in the interests of the community . . . The place of the commercial banks in financing enterprise will gradually be taken by mediating, non-profit local community banks providing low-cost finance, both at district and regional levels" (EC 640 and EC 642. 1993 edition).

Have a look too at the sections on taxation and Basic Income which also assume the continued existence of the market and monetary economy. Such an economy, even if reduced to a local scale, is incompatible with common ownership and democratic control. This is because if productive resourcesarc owned in common so is the social product and the problem then becomes not how to sell it but how to share it amongst the community on a non-monetary basis.

The market, banks, money, taxes, etc. disappear as meaningless. Instead, the principle “from each according to their abilities, to each according to their needs" applies where each person contributes what they can to production and then has free access according to their self-determined needs to what they require to lead an enjoyable life.

Editors.

The Extinction of Petty Enterprise. By Karl Kautsky (1906)

From the June 1906 issue of the Socialist Standard

Continued from May issue

Translated from the German by H. J. Neumann and revised by the Author.

Since the beginning of the capitalist mode of production and until twenty years ago, the decline of the independent petty peasant enterprise has been most marked. The peasant was being reduced to the condition of a wage slave either through his holding becoming absorbed by a large farm or, where such did not exist in his immediate vicinity, through his holding being cut into pieces and sold to his neighbours. This development still continues to a large extent, although it has ceased in some localities owing principally to the aforesaid foreign competition, but partly also in consequence of the migration of agricultural labourers to the towns—a point we cannot deal with here. Statistics, for instance, show us the following results: —

FRANCE	1882-1892
SIZE OF FARM	Increase (+) or Decrease (-)
Under 1 hectare	+ 243,420 hectares
Over 2 and under 5 Hectares	– 108,434 hectares
Over 5 and under 10 Hectares	– 13,140 hectares
Over 10 and under 40 hectares	– 532,243 hectares
Over 40 hectares	+ 197,288
GERMANY	1882-1895
Under 2 hectares	+ 17,494 hectares
Over 2 and under 5 hectares	– 95,781 hectares
Over 5 and under 20 hectares	+ 563,477 hectares
Over 20 and under 100 hectares	– 38,333 hectares
Over 100 hectares	+ 45,533 hectares

(1 Hectare = 2.47 English acres.)

Everywhere, however, we find a decline in that agricultural enterprise which, having a separate existence, is independent of capital. The leasing system and mortgaging increase. In the German Empire, the mortgages on landed property increased in the ten years from 1886 to 1895 by about 23,000,000,000 Marks, and the number of farms held on lease rose from 2,322,899 in 1882 to 2,007,210 in 1895, viz., an increase of 281,311.

Finally, we find a decrease in the entire agricultural population. In the German Empire the number of persons employed in agriculture was 18,704,038 in 1882, while in 1895 the number was 17,815,187, or nearly a million less.

Much more telling, however, than in agriculture is the decline of petty enterprise in industry. Here it is absolute.

INDUSTRIAL ESTABLISHMENTS IN THE GERMAN EMPIRE

		1882	1895
Size according to No. of workers employed	Number of establishments	Number of establishments	Increase or Decrease
Small (1 to 5 workers each)	2,175,857	1,989,572	– 8.6 %
Medium (6 to 50 workers each)	85,001	139 459	+ 64.1 %
Large (over 50 workers each)	9,481	17,941	+ 89.3 %

Between 1882 and 1895 the population increased by 14.5%. The number of workers employed in small industrial establishments was in 1882 still over one half (59%) of the entire number of industrial workers (4,335,822 out of 7,340,789) but in 1895′ the number fell to 46.5% (4,770,669) out of 10,269,269). During the same period, however, the number of workers employed in large industrial establishments was doubled (from 1,613,247 to 3,044,267).

As German capitalism is still young, these are most surprising figures, for the decline of petty industry is generally a tedious process. An example will make this clear. Already in the forties of the eighteenth century, machine weaving, particularly the English weaving trade, produced such keen competition that the misery of the hand weavers became proverbial, and the starvation existing among them produced rebellion. Nevertheless, according to statistics, out of the 491,796 weavers in the German Empire in 1882, 285,444 were still employed in small weaving concerns (employing from 1 to 5 persons), that is to say, more than half. But nobody then maintained that there were good prospects in store for hand weaving, and that its decline was not inevitable in the course of evolution. In England the last hand weaver has been starved long ago. In Germany, too, they are fast disappearing: there the number of persons employed in small weaving concerns decreased from 285,444 in 1882 to 156,242 in 1895. If there are still some hand weavers in existence, that does not prove that petty industry is capable of competing successfully, but merely that the hand weaver is capable of enduring starvation.

The complete disappearance of petty industry is not the first but the last act of the tragedy entitled “The Extinction of Petty Enterprise.” The first effect of the competition with capitalist production is that the handicraftsman—and what may be said of him is with some modifications also applicable to the peasant—gradually sacrifices all that his own or his forefathers’ industry succeeded in accumulating. The petty industrialist grows poor ; in order to stave off his increasing poverty he resolves to be more industrious; the working hours are extended until late at night; wife and children are compelled to assist in the work; in place of expensive adult assistants cheaper apprentices are engaged, and their number disproportionately increased; and while the working hours are extended and the toil is proceeding with ever more feverish speed without rest or interval, food becomes more precarious, and the expenditure for housing and clothing is more and more cut down.

There is no more miserable, wretched existence than that of the petty industrialist or the small farmer who is struggling hard against overwhelming capital.

The assertion that the wage workers are to-day better off than the small farmer and the small manufacturer or trader, is fully justified. This statement, however, was intended to show the workers that they have no, reason to be discontented. But the arrow does not strike Society, at which it -was directed, but private property. If indeed the propertyless are better off than the property-owning small manufacturers, of what value can their property be still to the latter? It ceases to be of advantage to them, it commences to be detrimental to them. If, for instance, the home weaver persists in carrying on his unprofitable concern, although he would be able to earn more in the factory, he does so only because he still possesses something, a cottage, a piece of land for growing vegetables, which he would have to surrender were he to give up his business. To the petty industrialist his possession of the means of production has ceased to be a safeguard against misery and has become a chain binding him hopelessly to utter wretchedness. In his case private property has brought about an effect which is not usually looked for. What a hundred years ago was still a blessing to the handicraftsman and peasant, has turned out a curse to him.

But it may be argued that with this increased misery the small peasant and handicraftsman are purchasing a higher independence and liberty than are enjoyed by the propertyless wage workers. Even such argument is erroneous. Where petty industry comes into contact with capital, it becomes only too rapidly quite dependent upon it. The handicraftsman becomes a home-industrialist and is thus enslaved by the capitalist; his home is turned into a branch of the factory; or he becomes an agent of the capitalist, a salesman of manufactured goods, besides bearing the cost of wear and tear; in both cases he is entirely dependent upon the capitalist. And the peasant who is unable to keep up the competition as small farmer or succumbs to the pressure of usury or taxes, also takes to home industry in the service of the capitalist, or to wage work in the employ of the large fanner. He may become a journeyman, or go to a factory or mine, and leave the work of his little holding to be attended to by his wife and young children. Where then is his independence and freedom? His property alone distinguishes him from the proletarian, or wage slave, but it is that very property which prevents him from taking advantage of the best opportunities to obtain work; it ties him to a certain 6pot and makes him more dependent than the propertyless wage worker. The private ownership of the means of production increases not only the material misery but also the dependence of the small man. In this respect private property has also produced a contrary effect—it has changed from a bulwark of freedom to the means of enslavement.

But, it will be urged, private property ensures to the handicraftsman and peasant at any rate the ownership of the product of their labour. Now, this is poor consolation, seeing that the value of these products has declined to such an extent that it does not suffice for the sustenance of the producer and his family. But even this poor consolation is a delusion. In the first instance, it does not apply to the large army of persons who are compelled to take to homework or wage slavery in order to support themselves. Neither does it apply to the majority of the small handicraftsmen and peasants whom overwhelming capital has not yet brought into its direct service, so that until now they have apparently been fortunate enough to preserve their entire independence. It does not apply to all those who are in debt—the usurer holding a mortgage on a peasant farm has a claim, superior to that of the peasant himself, to the product of the peasant’s labour. First of all the usurer has to be paid, and only what remains belongs to the peasant; whether this balance sufficed to maintain the peasant and his family is no concern of the usurer’s. The peasant and the handicraftsman both work as labour for the capitalist as the wage worker does. The difference which private property causes in this respect between propertyless and property-owning workers, is only that the wages of the former is generally regulated according to customary requirements, while as far as the property owning workers are concerned, no such limit exists. In the case of the latter it may happen that after paying the usurer’s interest nothing remains of the product of their labour—that they work for nothing, owing to private property.

If in remote places there are still peasants and handicraftsmen to be found who are not in debt, even they are compelled to pay their tribute to capital by means of the National Debt.

By interest on mortgages and goods on credit, peasants and handicraftsmen pay interest on capital they themselves have employed. By taxes raised for paying interest on the National Debt, they pay interest on capital which the State has borrowed in order to enrich at their expense their very competitors and exploiters—contractors, builders, large manufacturers, great landowners, and others. Militarism and the-National Debt, these are the two means by which the State of to-day succeeds in forcing even the remotest village into the domain of capitalist exploitation, thereby hastening the abolition of peasantry and handicraft. What is the final result of this painful struggle against the overwhelming competition of industry on a large scale? What reward is there for the handicraftsman or peasant for his “thrift” and his “industry,” that is to say for the enslavement of himself, his wife and children, for their physical and mental ruin? The reward for that is bankruptcy, entire disinheritance (expropriation is the artistic term for-it), divorce from the means of production, descent into the proletariat.

That is the inevitable final result of the economic development in Society to-day, a result as inevitable as death itself, and just as death comes as a relief to the person suffering from a painful disease, so under present conditions is bankruptcy hailed with equal satisfaction by the small man as a relief from property which has become a heavy-burden to him. The continued existence of petty industry leads indeed to such demoralisation and misery that we must ask ourselves the question whether we would be justified in delaying its extinction, if that were at all possible. Would it be more desirable that handicraftsmen and peasants should all sink to the position of the hand weavers of the Ore Mountains or that they should become wage workers in great industrial concerns?

This alone is to be considered when efforts are made to maintain petty enterprise, for it is impossible in this age of steam and electricity to place handicraft and small farming in a flourishing condition so that they may bring to the petty proprietor a share in modern culture. The self-supporting small concern, independent of capital, having perfect. control of its means of production and of its products—this system of property holding and wealth producing, upon which in the middle ages and even so late as the seventeenth century all economic existence was based, disappears inevitably before expanding capitalism, which seizes one trade after another. What still survives in the shape of petty industry and at times even newly developed, is nothing but a hidden form of wage slavery, and by no means one of its highest forms. It becomes the last refuge of those unfortunate propertyless persons who cannot find employment in large industrial concerns, and who are too proud to beg, too honest to steal.

(Concluded)

The economic is impersonal (2023)

From the October 2023 issue of the Socialist Standard 

The Light is a monthly free newspaper aimed at winning people over to a particular point of view. It’s been going since 2020 and champions various conspiracy theories, in particular that the Covid pandemic and the climate crisis are hoaxes designed to get people to accept restrictions on their freedom imposed by a secretive, self-serving elite. It is also a place where various other eccentric theories, as against conventional medicine, 5G, ‘transgenderism’, MMR and other jabs, are aired as well as for ‘natural’ cures and currency reform. It doesn’t seem to be antisemitic, as has been alleged. According to Wikipedia it has 100,000 copies printed each month, and so will have some influence.

The front page article in March this year sets out its basic position. Headlined ‘Agenda of lies to control us. World is awash with disinformation’, it begins:

‘People often ascribe failures and disasters to incompetence, greed or corruption. And while these play a part, there is a plan in place to continue to degrade everybody’s standard of living to the point where we will be grateful for handouts — a universal basic income’.

The next page explains who it thinks is behind this plan:

‘It should now be clear that a cabal of corporations, bankers and non-governmental organisations, aided by progressive political leaders (the Davos set) is really running the world. They care not for the ordinary people, but for their own elevation to an elite-run technocracy. The contrived climate crisis is the means by which citizens are held in a tightening ratchet of supposedly ecological policies’.

Its language can be quite radical. Its aim, the editorial in June declared, is ‘to help raise awareness of the evil agenda to control the entire population, and all the world’s resources, by a tiny few.’ And from the same issue:

‘Wage/Debt Slavery. While we all need money if we want a roof over our heads and food in our bellies, spending our entire lives working for a government bureaucracy or corporate kleptocracy is as soul-destroying as it is a waste of a life. No-one was born to just drudge by and pay the bills. That’s why they give you cheap entertainment and let you get drunk and high — so you don’t explode with boredom and meaninglessness and start raging against the machine’.

And ‘The Owners do not have enough real power to control the 99% through overt force, which is why they must trick us with deception’ (March).

There is some truth in what they say. There is a privileged elite in whose interest governments act and the economy functions. And our standard of living has been under attack and has in fact been reduced over recent years. So their message could appeal to those who resent both of these. Those behind The Light are latching on to this discontent and resentment, offering an explanation and, less frequently, what they see as the way out.

But there is much more that is wrong in what they say. Indeed, the charge of ‘disinformation’ could be levelled at them. The threat from global over-warming may be exaggerated by some but it does exist. The Covid pandemic could not just have been left to run its course (it would have been irresponsible for any central administration, even a capitalist one, to let that happen). Their basic mistake is assuming that everything that happens in society and the economy has to be ‘planned’ by some group.

Unplanned

The capitalist economy is by its nature unplanned; its working gives rise to impersonal market forces that governments cannot control and which, on the contrary, exert pressure on them to give priority, over meeting people’s needs, to profit-making and capital accumulation by the minority class who own the means of production. Because governments do not have a free hand but have to act in line with the economic laws of capitalism, the impression can arise that the world is controlled by some ‘cabal’ that plans what happens and instructs governments what to do. But once it is understood that the economic laws of capitalism act as if they were a force of nature then the need to have recourse to a cabal with a plan disappears. There is no cabal. There is no plan. There is just the operation of capitalism’s impersonal economic laws.

Until the Covid pandemic and the lockdowns that were imposed those with such views were confined to theorising about the coming of a ‘new world order’ that was going to suppress the individual’s freedom to act as they chose. The lockdowns, and the demonstrations against them involving many thousands of people, gave them a chance to acquire an activist base. This still exists. The Light is distributed free by volunteers. Street stalls are held. Protests are organised to resist what they see as the cabal’s plan. Like the anarchists and Trotskyists their emphasis is on ‘resistance’; they even use the same slogans such as ‘the power of the people is stronger than the people in power’.

However, unless they are simply what someone once called ‘mindless militants’ who just ‘resist’ without having any idea of an alternative (which of course is entirely possible), presumably they want the ‘plan’ to be defeated and the ‘elite-run technocracy’ to be overthrown. So, what do they envisage should take its place, where we will all be ‘free’, our standard of living won’t be degraded and we won’t be a drudge ‘working for a government bureaucracy or corporate kleptocracy’? What will be its basis?

Individualists

Here they fall back on the philosophical views of intellectuals who are in the American tradition of individualism, ‘libertarians’ as they are called over there. There is also an overlap with individualist anarchism. The April issue had an article advocating the ideas of Henry Thoreau, including not taking part in elections (contradicted by an appeal a couple of pages later for candidates to stand as independents in local elections). In the same issue there was an interview with a freelance illustrator, Lee Simpson, who echoed the anarchist Proudhon:

‘My suggestion is an old idea called mutualism, where people freely organise into worker co-operatives, using a money backed by labour (the only thing we have a monopoly on) and take part in a legitimate free market’.

But mutualist anarchists are not the only ones who laud the ‘free market’. So do out-and-out defenders of capitalism in the tradition of a reactionary like Hayek and his polemic The Road to Serfdom. An article in May against paper money was subtitled ‘Free exchange of goods and services is bedrock of freedom’ and ends

‘ … those who value liberty know that personal ownership and the unfettered exchange of goods, services and ideas remains the bedrock of those free nations that refuse to be enslaved.’

Like, presumably, the United States.

An article in the previous issue on ‘How to build a resilient economy’ answered ‘Keep using cash and resist digital currencies’, arguing that:

‘Cash provides the opportunity to build a robust, resilient, and inclusive economy. An economy in which high streets prosper and in which towns aren’t some identikit version of each other. An economy in which goods and services are mostly produced locally. And most critically: an economy which doesn’t collapse every time there is a minor contraction in the money supply. The use and re-use of cash is the key to realising this sound economic foundation’.

The article went on to give as one of the advantages of cash that ‘it tends to be spent locally’ and that ‘it is more frequently spent in small independent businesses than large multinational chains’.

Exactly the same argument that Greens use to advocate local currencies. In fact, the author evidently shares the Green Party’s ideal of going back to a smaller-scale capitalist economy with no Big Business and no Big Banks.

Against ‘communism’

There is a tension, even a contradiction, between the different supporters of the free market, between those who appear near to the anarchists and Greens and those who think that the US is a ‘free nation’. The former won’t normally be attracted either to views expressed by other contributors against ‘transgenderism’ and refugees. All that unites them is a belief that a ‘free market’ will make things better and opposition to state capitalism that they misidentify as ‘communism’ and ‘authoritarian socialism’.

But, properly understood, communism (or socialism, the same thing) is not state capitalism. It is the negation of capitalism in all forms, and means the end of the whole market economy, whether ‘free’ or regulated by the state. A return to the smaller-scale capitalism of yesteryear, even if it were possible, would not solve the problems faced by ‘wage slaves’; the whole process which has led to the corporate capitalism we know today would start all over again and we would eventually end up where we are now.

The only way to stop people being subjected to economic forces that dominate them is to end capitalism with its class ownership of resources and its production for sale with a view to profit. To replace it with a society based on the common ownership and democratic control of productive resources, so allowing them to be used to directly turn out what people require to satisfy their needs. That, not an idealised free market, would put an end to the impersonal market forces that The Light mistakenly takes for the machinations of some imaginary cabal.

Adam Buick

The Uxbridge by-election: The Green Party (2023)

From the SPGB Discussion Forum

More leaflets were distributed on Friday. And more discarded leaflets from other parties collected. This time the manifesto of the Green Party candidate (who, appropriately enough, is actually called Green). She confirms that the Green Party wants to return to the small-scale capitalism (from which present-day corporate capitalism evolved):

“Vote Green Party for a Well Being Economy.

Public Money to be spent on Public Good not profits for the few.

The economy is not working for most people (. . .)

Society needs to transition to a sustainable economy urgently.

Introduce universal basic income to reduce dependency on economic growth. Revive and support the local economy, home based enterprises, local food production and reskilling.”

She is right that the economy is not working for most people, but that’s the nature of the capitalist economy. It cannot be made to work for most people, not even by the reforms proposed by the Green Party. It is a profit-making economy that can work only in the interest of the profit-takers.

Just how universal basic income will “reduce dependency on economic growth” is not explained. You would have thought, rather, that it would be the other way round — that economic growth would be needed to sustain UBI. But we shouldn’t expect clear thinking on economic matters from the Green Party which believes that banks can and do create money from thin air.

Gilded Capitalism. (1921)

Book Review from the August 1921 issue of the Socialist Standard

"Guild Socialism Re-Stated."by G. D. H. Cole. 6s. Nett.

Among those whose wont it is "to meddle and muddle and fuddle" in vain efforts to "evolve" wage-slavery into something more palatable to the working class, Mr. Cole is indeed the king. After colossal endeavours to construct a scheme in which society would "afford the greatest possible opportunity for individual and collective self-expression for all its members," our author produces, complete with all its trappings of class division and contradictions, its hideous countenance of war which is hell and "peace" which is worse— capitalism.

Somehow or other our author noticed the "aspirations" of the workers. These "aspirations" he and his select circle of guildsmen have discussed until there is placed before us the plan whereby the social organism, impelled by the logic of his arguments, will flow into the mould that Mr. Cole has been able to "devise and create."

The latter objects to the class character of capitalism. He eliminates it. This or that economic prop offends his eye. Out it comes. It is painted—and replaced. The result is— Guild Socialism.

Without any consideration whatever of productive forces, economic structure or development, Mr. Cole calmly constructs his social edifice. This he whittles away until it will fit nicely and squarely on the economic structure of capitalism, in a manner favourable to "small scale producers." Then he impudently takes the existing trade union movement, and alters its shape and policy until it will furnish him with the means of "transition."

The author bases his case on what he himself terms an assumption : that society is to be regarded as a complex of associations held together by the wills of their members, whose well-being is its purpose. Doubtless this assumption gained weight with the author after thoroughly surveying capitalism to-day. For us it is enough to know that society's members are held together and their relations decided by the manner of gaining a livelihood.

On this "assumption" he builds his system. With him there is no question of "Historical foundation, economic structure, Socialist result." Mr. Cole starts from the top. His system when completely established, will be built "on the basis of large scale production and the world market." "Industrial organisation" will "develope the tradition of free communal service," then will come, "from producer and consumer alike, a wide-spread demand for goods of finer quality," which will bring about "a return over a considerable sphere, to small-scale production."

Our M.A. is certainly amusing.

The system of society we live in is a veritable hotch-potch of antagonisms and contradictions. It is class-divided. Those who make life possible exist, half fed, half clothed, half sheltered. The drones live luxuriously, debauched and useless. The poverty of the workers, the wealth of their masters, the class cleavage, the contradictions of capitalism, all have grown with the development of the productive forces. The capitalist class cannot control these forces, which tirelessly strive to break through their capitalist "shell." But working-class agency is needed. Mr. Cole sees the danger.

Back to "small scale production" !

The words "evolutionary" and "revolutionary" we told are capable of bearing a variety of interpretations. Revolution implies force, though not, in our author's opinion, necessarily on a large scale. By "evolutionary" some mean "political," but "there is also a wider sense in which 'evolutionary' tactics can denote a method applicable not merely to politics, but to every sphere of social action, economic and civic as well as political." The policy, then, should be the maximum use of the "evolutionary weapons" plus the minimum of "revolutionary action." The more evolution the less revolution.

Doubtless the reader will be pleased to hear of these new "interpretations." We, however, are quite content with the meanings implied when the words are used in other branches of science. The word evolution expresses the fact that "Nature, and all things in nature" (contrary to old beliefs) change. Evolution does not imply any particular manner or method, of change. What is more, scientists who fully admit the process of change are to this day, in various branches of science, seeking the How and the Why.

Further, evolution does not imply that an organism must necessarily change every moment of its existence. "If there is no perceptible change in environment an organism may remain practically the same for ages" (Dennis Bird). It should also be remembered that it is folly to apply the laws governing evolution in one phase of nature to any and everything.

By revolution is meant a complete change. "The man who says that the secret of progress is 'evolution, not revolution,' may be talking very good social philosophy—I have nothing to do with that—but he is not talking science as he thinks. In every modern geological work you read of periodical 'revolutions' in the story of the earth" (Joseph McCabe). "The records of those old revolutions of the earth's surface are contained in the stones beneath our feet" (Prof. Geikie).

Human society has evolved. Its evolution is distinctly marked by each of those totally different systems that we know as Primitive Communism, Chattel Slavery, Feudalism, and Capitalism.

Each system of society functions from a certain basis—the productive forces at a particular stage of their development. Each system flourishes while there is scope for these forces to evolve. When, however, the productive forces are fettered, the conflict between the classes that are the human expression of economic development, reaches its culminating point. The class next in the order of social evolution overthrows the existing system. The new one is born. But as Boudin (who has been speaking of philosophy and science) says: "There is a continuity of human society itself notwithstanding the changes in the form of its organisation . . just as there is continuity in the economic structure of human society notwithstanding the different 'economies' which were prevalent at different stages of its development."

So to Mr. Cole's twaddle of "evolutionary weapons" plus "revolutionary action," "working-class economic power," "productive control of industry," and so on, we will say that working class activity on the eve of revolution will be determined, as now, by the conditions of capitalism.

The book is all confusion and camouflage. The charms of its author's Utopia inspire contempt. Financial problems, provision of capital, regulation of incomes and prices, coercive functions, railway season ticket holders' associations, telephone users' associations, leaders, discipline, and authority— each and all to satisfy the "aspirations" of the workers !

"Have I not assumed the case against equality of income?" Yes—and yet emphatically no (p. 72). Does Guild Socialism claim to be international ? "It is hard to answer ' yes' or 'no' to that question" (p. 208).

Our author may increase his output; he may persistently continue to white-wash the class war. He may blare "Return to small-scale production," or Primitive Communism, or any other old thing. The workers will organise politically; the workers will abolish capitalism; the productive forces will be unfettered. The private ownership of the means of life, with its corollary, production for profit, will give way to common ownership and production for use.

A. H.

Economic Tendencies. (1927)

From the July 1927 issue of the Socialist Standard

 . . . and still the Socialist utters his mumbo jumbo about the imminent coming of the Socialist state; as a fact the whole tendency of our times is in the direction of the multiplicity of small capitalists, every one of whom is a bulwark against Socialism. This increasing growth in the wealth of the wage-earning classes which gathers impetus before our eyes is the whole justification of the principles of Capitalism. (Business Organisation, April.)

If Capitalism is justified on the basis of the above piffle, then its defenders must indeed be running short of subtle and plausible excuses for the existence of working-class poverty: Socialists are not concerned with the “coming” of any state, but with its “going.” With the establishment of classless society (Socialism), institutions such as the State, Government, etc., could serve no purpose : Without a subject class to govern and repress, the object of their existence to-day, their function would be ended. Regarding the growth of “small” Capitalists, one would have thought that in face of the growth of combines, trusts and amalgamations within the last generation, the fact of the concentration of Capital would have a commonplace admission. If the tendency is toward an increase of Capitalists, why is it that every trade paper devotes columns to the reports of bankruptcies in their particular trade? If the smaller fry are unable to stand the competitive pace of to-day, the process is obviously a “coming down,” and not a “going up” one. These business wiseacres have so much justification for capitalist principles that in the same issue of their journal they furnish us with the evidence that gives the lie direct to their previous statement.

Proof:—

  "Personal ownership has given way to the Limited Liability Company, and to-day this is rapidly becoming the large combine or group of companies. . . . the employer is now identified with an association, and these associations are also combined into large federations"—Ibid. 

Imagine the chance that the budding capitalist would have arriving on the scene to compete with the combine or the group of companies. Yet this is the sort of argument that justifies this “rosy” outlook. The present state of affairs is becoming fatal to the small investor. With the stagnation due to want of markets, his investment brings small return in a safe concern, whilst it is well-known what easy prey such investors make for the bogus or apparently promising financial adventure. Karl Marx demonstrated in a way what to-day reads like prophecy —how the battle of competition between the Capitalists is fought out on the basis of cheapening commodities. This is done by increasing the productivity of labour through up-to-date machinery, large scale production and so on. In competition, therefore, the largest capitals beat the smaller. Our opponents, in their weak attempt to meet the Socialist case, pay tribute to the analysis Marx made, and by which he showed the broadening and the deepening of the gulf between the Capitalists and the Workers. It is this gulf that intensifies the antagonism between the two classes as non-producers and owners, and producers but non-owners of wealth respectively.

The Green Party’s Market Economy (1988)

From the April 1988 issue of the Socialist Standard

The Green Party sees the solution to the environmental crisis as lying, correctly, in the achievement of “a system of human activity which is in harmony with the Earth’s life-sustaining systems” (1987 General Election Manifesto), only they imagine that this can be done while retaining production for the market.

The Green Party’s basic policy statement Manifesto for a Sustainable Society looks forward to a society “in which small, relatively self-sufficient, self-governing communities can coexist harmoniously within the framework of a greater nation and the world as a whole”. Each of these self-governing communities would be encouraged to be as self-sufficient as possible in primary products — those taken directly from nature such as food and minerals. But “goods and resources which cannot be obtained or manufactured locally would necessitate trade with other communities” and communities “would need to trade primaries by selling manufactures (e.g. calculators for wheat)”. There would be trade within communities too:

  The self-employed will come into their own. Cobblers, comer shopkeepers, smallholders, small farmers, craftsmen and repairers of all kinds, and anyone to whom independence and the satisfaction of a job well done is more important than high financial return will find that the Green Party National Income Scheme allows them to cut their charges to customers, leading to an increase in demand for their services.

This is not socialism (not that the Green Party claims to stand for this) but the sort of simple market economy without capitalist profit that was advocated by some critics of capitalism in the 19th century. It was unrealistic then and it is still unrealistic today. The problem is not the decentralised structure based on self-administering local communities — this is one among many possible forms that democratic decision-making could take in socialism — nor even that districts and regions should produce more of their basic foodstuffs but that these communities are seen as exchanging goods with each other, whether this be for money or by barter.

Such a system would not work in the way the Green Party expects because whenever wealth is produced for sale on a market it acquires a commercial exchange-value in addition to its use-value, or capacity to satisfy some human need, and this unleashes economic forces which come to dominate production and orient it away from production for need. The goods, whether primaries or manufactures, that the self-governing communities would be producing for exchange with other communities would be commodities, or goods having an exchange-value, and so would be subject to the same laws of commodity production as apply in any market economy.

The rate of exchange between wheat and calculators — to stick to the example in the Green Party’s pamphlet — would tend to reflect the comparative amounts of labour required on average to produce them from start to finish, an average that would be established by the market, i.e. by the competition (for this is what searching around and bargaining for the best deal would amount to) between communities to buy and sell wheat, calculators and other products to each other. In this competition it would be those communities able to offer their goods at the lowest prices that would tend to do best.

The self-governing communities would therefore have an interest in keeping the labour content of their products to a minimum and, as in a normal capitalist economy, the way to do this would be to employ new, more productive machines. But these cost money, which could be obtained by maximising sales. So the Green Party’s communities would come under exactly the same pressure as are today’s private and state capitalist enterprises to seek to maximise sales and accumulate the money obtained as capital invested in new means of production.

The Green Parry evidently hope that this pressure could be resisted by limiting exchange either to barter or to the exchange of goods simply with a view to obtaining money to buy needed use-values that communities could not produce themselves. The experience of cooperative-type enterprises operating within a market context, such as the kibbutzim in Israel and the cooperative societies in Britain, has shown however that sooner or later, under the pressure of economic circumstances, such enterprises are forced to act in the same way as any more typically capitalist enterprise.

Production for the market, even if at the beginning the purpose was merely to obtain money to buy useful things, inevitably develops into capitalism where production comes to be carried on to obtain money, not to buy goods for use, but to be invested in production with a view to making more money. Wherever there is production for the market on any scale, the economic laws of capitalism inevitably come into operation and impose profit as the aim of production.

A sustainable productive system as one that respects the laws of ecology can only be instituted if production for the market is completely abolished through the establishment of the common ownership and democratic control of the means of production and replaced by production solely for use. The relations between productive units — and between local communities — then cease to be commercial ones and become simple relations between suppliers and users of useful products without the intervention of money, buying and selling, trade or barter.

Adam Buick