Notes by the Way: Labour Party Chairman on Tory Nationalisation (1949)

The Notes by the Way Column from the October 1949 issue of the Socialist Standard

Labour Party Chairman on Tory Nationalisation

Mr. Maurice Webb, M.P., Chairman of the Labour Party, is on his way from Canada to U.S.A. to answer “gross misrepresentations” about the Labour Government. Before he left he gave an interview to reporters: 

“ Much of the misinformation being spread in the United States is done by British people and they ought to be ashamed of themselves. They blame all Britain’s troubles on Socialism, forgetting that only about 20 per cent, of the economy has been nationalised and the rest is private enterprise. And about 12 per cent. of the 20 per cent. was initiated by the previous Government.” (Manchester Guardian, September 10th, 1949.)

While he is clearing up misrepresentations he might start with himself and stop calling Nationalisation “Socialism.”

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Can Yon live on 92s. 6d. a Week?

The Conciliation Board has rejected the railwaymen’s claim for a 10s. increase, also rejected the contention that 92s. 6d. a week is too little to live on.

“The Board cannot accept the contention that earnings, as apart from rates, should be excluded when assessing the adequacy of basic rates, nor is it satisfied that the minimum rate of 92s. 6d. is below the figure necessary to maintain the minimum standard of human needs.” (Times, September 9th, 1949.) 

It has been estimated by the Oxford University Institute of Statistics (“Bulletin,” July-August, 1949) that working-class cost of living has increased by 79 per cent. since before the war. If we make allowance for this increase of prices a present wage of 92s. 6d. is equal to a pre-war wage of about 51s. 8d. Actually the minimum wage fixed for porters in October, 1939, was 47s., 48s., or 50s., according to area, but the Railway Union complained that it was much too low, and no Trade Union official or Labour Leader would have defended 51s. 8d. a week.

Yet after nationalisation and four years of Labour Government a present minimum wage, which will buy no more than 51s. 8d. bought before the war, is defended as adequate by the Conciliation Board!

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Is There a Shortage of Money?

The following needs no comment: —

“Application lists for the £6,500,000 offer of shares in W. H. Smith & Son (Holdings), the newsagents and booksellers, were open for only five minutes in the City yesterday morning. Even before the lists opened at 10 a.m. the brokers handling the issue had received applications from the public covering the amount offered by a large margin.

“By yesterday evening, although the count had not been completed, the public’s response was estimated at over £20 million.” (Daily Telegraph. September 2nd, 1949.)

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Mr. Morrison’s Duty to his Country

At a press conference in Strasbourg on August 26th Mr. Herbert Morrison uttered a few words “before leaving for a three-week holiday in the South of France.” This is what he said:—

“ It is my duty to my country to get a holiday. It is merely an elementary duty of public service.” (Manchester Guardian, August 27th, 1949.)

The comment of the Guardian's Diplomatic Correspondent is, “ No one doubted it, but why so pompous about it?”

If a miner thought that it was his duty or pleasure and if he had the money to go to the South of France for three weeks, he would be charged with inexcusable absenteeism.

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Production and Consumption, by Sir Stafford Cripps

In a speech at Washington, Sir Stafford Cripps gave the following information about production and consumption in Great Britain:—

“Industrial production in Britain is to-day at an all-time high, about 25 per cent. above the immediate pre-war level. Industrial productivity is rising steadily. In the first half of 1949 output per man was 4 to 5 per cent. higher than a year earlier and well above the pre-war figure. The average working week to-day is just over 45 hours. The volume of exports in the first half of this year was 51 per cent. greater than in 1938, the volume of imports 15 per cent. less. . . . In spite of the great increase in production, personal consumption has risen by only 4 per cent. over the past three years. The reason is that the extra output has been used partly to boost exports, partly to support the largest capital investment programme in our history which is currently absorbing more than one-fifth of the whole national output.” (Manchester Guardian, September 10th, 1949.)

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“ Nobody Knew the Difference ”

Some American politicians affect to believe that Britain has been revolutionised by the Labour Government’s nationalisation schemes, though they are not all so ill-informed. Mr. Hoffman, Marshall Plan Administrator, speaking at a Press Conference in Washington on August 29th was asked about this, and replied:—

“The coal mines in Britain were no better and no worse for having been nationalised. The same was true of the railways, and though the Bank of England was also nationalised, nobody knew the difference. (Times, August 30th, 1949.)

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The German Elections

The general election in Western Germany, held in the middle of August, made the Social Democrats the second largest party in the new Parliament with 131 seats out of 402. Their total vote, 6,932,000, represented 33 per cent. of the votes as against 35 per cent. given to the Christian Democratic Union and 13 per cent given to the next largest party, the Free Democratic Union. The new Government is a coalition dominated by the Christian Democratic Union.

The results are an answer to those who thought that with the disappearance of the Hitler Dictatorship the electorate would give their votes to the Social Democrats, a party much like the British Labour Party.

The German Social Democrats, in spite of their reformist and strongly nationalist programme and policy designed to capture all sections of the population (except those who stand for Socialism), are thus shown to have made little headway. Their voting strength compares unfavourably with what it was 30 and more years ago. As long ago as 1912 they received 35 per cent. of the votes (“Labour Year Book,” 1916, P. 411). Then at the elections in January, 1919, after the setting up of the Republic, the Social Democrats were by far the largest party with nearly 40 per cent. of the votes (45 per cent. if the "Independent Socialists” are added), and remained the largest party until 1932. Their vote had, however, been falling and at the 1930 election was down to 25 per cent. of the total.

The Communists, who in 1930 obtained 13 per cent. of the votes, fared badly in the elections in August last, receiving 1,360,000 votes, about 4 per cent of the total.

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The Faith of a “Christian Communist"

In accordance with the policy of getting the support of anyone no matter what his understanding of Socialism may be, the Communist Party accepts into its ranks people whose religious beliefs are quite incompatible with Marxism and with the views expressed by Lenin.

The following are extracts from an article,44 Why I Became a Communist,” by the Reverend W. E. Allen, published in the Daily Worker (August 31st, 1949): —

“ In the three years I have been a member of the Communist Party I have found in the fellowship of the local branch a comradeship, a sense of service to the people, and an intellectual honesty which I feel are truly Christian.”

"What Jesus expressed in religious symbols, Marx saw in scientific terms. Communism has much to give Christianity, and Christianity much to give Communism.”

It is odd that the Rev. W. E. Allen should find "intellectual honesty” in the Communist Party. In three years of membership and in his reading of Marx, which, he says, benefited his understanding, he must surely by now have discovered that the Communists are professed accepters of the materialist conception of history and he can hardly have escaped coming across their former use of the phrase from Marx: "Religion is the opium of the people.”

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Communists Who Live in Glasshouses

The Daily Worker (August 19th, 1949) finds it very diverting that an American critic of the Labour Government should accuse them of aiming to "equalise incomes so that everybody will be approximately on the same financial level.”

The Worker says: —

“This is not only ‘news’ for Americans. Workers in Britain’s nationalised industries contemplating the salaries of the heads of the nationalised boards will find it strange, exciting and untrue.”

Bu who are the Communists to throw stones at the Labour Government? True the latter have forgotten their old advocacy of equality of incomes, but what about the Russian workers who can contrast the high salaries and incomes from investment in State bonds in Russia, with Lenin's declaration that as soon as they got power the Communists in Russia would likewise bring all incomes to approximately the level of pay of the workers?

Very appropriately at this moment comes the statement of one of the admirers of Russia, Professor Bernal. He visited Russia again last month, 15 years after ah earlier trip, and on his return he commented: "How they have changed! The standard of living of the better-paid workers is higher than here. The shops are filled and there are no queues.” (Daily Express, November 10th, 1949.)

We are asked to admire “Socialist” Russia because the "higher paid workers,” not the workers as a whole, are better off than are workers in capitalist Britain!

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A Labour Prophet has a Fall

At the Labour Party Conference in May, 1940, when the Labour Party decided to enter the Churchill Government, Mr. Arthur Greenwood, M.P., made a prophecy about the outcome of the war:—

"We shall have a trembling capitalist system which can never recover again. We shall have broken the back of the vested interests, and we can build a socialist commonwealth which will be a powerful factor in the world.” (Daily Herald, May 14th, 1940.)

On the 10th anniversary of the outbreak of war Mr. Greenwood gave a message to the Daily Mail (September 3rd, 1949) which included the following: — 

“This peace has not yet been won, and Britain’s effort to-day must be directed towards the fullest use of all human and material resources, so as to play our part in the reshaping of the whole world.”

British Capitalism is indeed in a bad way, but what the Labour Government is now doing is to direct all their efforts to trying to put it on its feet again while urging the workers to refrain from making demands that would stand in the way of British capitalist recovery. The Labour Party’s latest pronouncement of policy is appropriately called "Labour Believes in Britain,” not “ Labour Believes in Socialism.”

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Why no Celebration?

By a curious oversight the Daily Worker on August 23rd, 1949, forgot to celebrate a great occasion in Communist Party history; yet when the event occurred ten years ago they claimed that it was a "Victory for Peace and Socialism.” (Daily Worker, August 23rd, 1939.) The event in question was the Pact of Friendship between Stalin and Hitler. Can it be that they now wish to forget that "Socialist” victory?

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Education and the Standard Oil Co. of America

"The Lamp,” a periodical published by the Standard Oil Co. (New Jersey), U.S.A., reproduced in its issue for November, 1947, an address by Frank W. Abrams, Chairman of the Board of Directors, on "The Stake of Business in American Education.” Some of the points made by him are interesting as indicating how big business regards education. His first main point is that the better educated the population are the more they earn and therefore the more money they have to spend on such things as books, newspapers, houses, and, of course, motor cars. His next point was that education increases the workers’ output—"business depends upon education not only to provide more profitable markets but to provide more productive manpower.”

"As every foreman knows, a worker who has had some practice in learning at school usually turns out to be better at learning in a factory. He catches on more quickly not only to the how of his job, but the why of it. His training takes less time. He has a quicker and better grasp of problems and ideas. He is more apt to think about what he is doing and to come up with useful suggestions concerning it. If he has gone through college, he has had an opportunity to acquire the broader perspective and the capacity to think in terms of ideas and trends, which are indispensable in the higher management levels.”

"If business and industry could not draw upon a large reservoir of educated man-power, they would be handicapped in every phase of their operations. American education does a job for business and industry. If our hope of an advancing American economy involves reducing costs, increasing individual productivity, and devising better ways of doing things, we must consider that we have a major interest in helping American education and educators in their work.”

On the financial side he mentions that "many corporations underwrite the expense of research projects in college and university laboratories which they feel will be valuable to their operations. Others grant scholarships.”

He thinks, however, that more should be done in the direction of providing money for endowed educational institutions.

Mr. Abrams also thinks that education makes for political security for the existing social system.

"The experts in this field are convinced that education produces not only a difference in the volume of opinion, but also a difference in the kind of opinion. People with information are inclined to have moderate opinions, whereas those without information are apt to be extremists.”

Of course it all depends on the kind of information. What Mr. Abrams is saying to his fellow big business men is that if they put up the money they can influence the kind of information supplied by the educational institutions and thus help to make America safe for Capitalism.

Edgar Hardcastle

Editorial: The War of the Petrol Pump (1953)

Editorial from the April 1953 issue of the Socialist Standard

While governments and the big oil combines jostle for control of the oil resources of the world a second front has been opened up on the British home market With the ending of war-time controls the companies were allowed on 1st February of this year to resume the pre-war practice of selling their own branded high grade motor spirit alongside the continued sale of the lower-grade and cheaper “pool ” petrol.

They had been preparing for this revival of competition for many months, partly by extensive advertising and partly by getting garage owners to enter agreements binding them to sell only certain brands.

Before the war the petrol companies spent about £600,000 a year on newspaper advertising. In 1951 the amount was £641,500 but in 1952 it rose to nearly £1,000,000 (Manchester Guardian 31 January, 1953).

On the control of garages the Financial Editor of the Manchester Guardian writes:—

“For at least two years the petrol companies have been making their preparations. More and more garages have made exclusive arrangements with one or other of the main petrol companies. Garages have been rebuilt and repainted, in return for which they have agreed to sell one company’s petrol only. Nearly three-quarters of the country’s pumps are now said to be tied in this way.”

The motoring correspondent of the Daily Telegraph (11/3/53) puts the proportion of “tied” garages as high as 90 per cent.

In some cases the “tied” garage undertakes to sell only one company's petrol, but as Shell and Anglo- Iranian have a joint selling arrangement (Shell-Mex and B.P.) their agreements tie the garage to supplies from Shell or Anglo-Iranian refineries (Economist, January, 1953).

One by-product of the struggle is that in order to protect their “tied” garages, some of the companies are reported to be refusing supplies of petrol to independent garages in the same district.

In addition to advertising, the companies are also wooing trade with “ gifts." Miss Burton, M.P., informed the Minister of Fuel and Power on 9 February that Shell are giving away a brush and duster “with a retail value of at least 5/-”; countered by the Regent Company's presentation of jigsaw puzzles and propelling pencils.

The war also extends to lubricating oils and the Vigzol Company which specialises in supplying farms complained that “some national oil companies . . . are offering ludicrous enticements to break up strong links we have developed with dealers for 30 years." The head of the firm states that the petrol companies are giving agricultural engineers commissions of up to £5 a barrel on lubricating oil to get business (Daily Express, 22/11/52).

A writer in the Sunday Dispatch (18/1/53) says that altogether the battle for the petrol market has cost the companies several million pounds already.

Although the companies are competing for the general market they are still (or were until last year) submitting identical tenders for sales to the government.

The four largest competitors (in addition to some smaller ones) are Shell, Anglo-Iranian, Esso and Regent. Anglo-Iranian has government nominees on its board and the government owns a large shareholding. Shell is linked with Royal Dutch and they, like Anglo-Iranian, control oil concerns in many parts of the world. Among the Royal Dutch-Shell subsidiaries is a large concern operating in the U.S.A.

Esso is a subsidiary of the American Standard Oil but sells motor spirit refined in this country. Regent sells imported petrol from refineries abroad operated by Trinidad leaseholds. The National Benzole Co.'s products are a mixture of petrol with benzole, the latter derived from coal.

The general background of the petrol war is of course the enormous development since the end of the war of the oilfields, refineries and oil tanker fleets, so that although world consumption has increased fast there have been several scares in the past seven years that production would overstep demand. It has been noted with concern that America, which produces and consumes much more than the rest of the world together, increased its consumption in 1952 by only 3%, compared with 10% the year before, and in the meantime more and more refining capacity is coming into production.

In Britain oil refining capacity in 1945 was only 2,500,000 tons of crude oil a year. It is now over 20 million tons and when work is completed on refineries now building it will be over 30 million tons. (“The World Oil Industry." Financial Times Supplement, 2 February, 1953).

What this development will involve can be seen from the fact that in 1945 three-quarters of Britain's refined oil was imported. Now it is an export, and the Minister of Fuel states that in 1953 it is expected to exceed in value the export of coal. When the full refinery programme is completed there will be an urgent need to find world markets for the great quantity being produced.

The particular background of the "branded petrol" war is the "catalytic cracking" plants which produce the high-grade motor spirit. The six plants built or building will have cost £20,000,000 by the time they are all in operation. But here, according to the Financial Times (31 January, 1953) the real problem arises. By mid-1953 their output capacity will be about 54 million tons, but even the present output of 3½ million tons “should be ample” for the existing demand for high- grade petrols.

"Thus, assuming that the refineries settle down to a rate of operation of about 75 per cent. to 80 per cent. of capacity, the potential volume of supplies of British refined premier grades is more than adequate."

The problem then is for the companies to expand the sales of the high-grades by persuading the commercial users of motor transport that they, as well as the private motorist, should use the higher-priced, “premier” grades.

"Indeed it seems that unless the demand for premier grades expands considerably compared with pre-war the oil industry will find it hard to justify the whole of its investment of £20 million in the post-war catalytic crackers."

The Financial Times concludes that the companies will “only obtain the full return on the large amount of capital invested in the catalytic crackers” if they succeed in getting the commercial motor users to change over to the costlier petrols.

What adds fierceness to the conflict is that American controlled Esso, with its giant refinery at Fawley (the largest in Britain), is challenging the other large companies. Before the war Esso had only a small share of the British market and is fighting to enlarge it in order to find a market for the output of Fawley. The Cleveland Petroleum Co. also sells petrol bought from Fawley.

The outcome of the battle cannot yet be known. When it is there will be rich prizes for the victors and falling profits for the losers—and nothing for the working class either way.

The Rockefellers (1960)

From the July 1960 issue of the Socialist Standard

On the 11th of May there died in Tucson, Arizona, John D. Rockefeller, Jnr., son of that notable father, John D. Snr, a man well-known in the early American capitalist era as one of the Robber Barons, with a finger in many pies—coal, iron ore, but chiefly remembered for his control of Standard Oil (New Jersey). In fact, according to Victor Perle in his book American Imperialism, in 1949 Standard Oil handled one-fifth of the oil produced in the western hemisphere, and its marketing areas covered countries in which some 72 per cent. of the world’s population resided. The control of oil throughout the western world is in the hands of seven oil trusts, of which Rockefellers control three.

But the Rockefellers, according to the obituaries of “Junior,” were noted for their “beneficence." It is reputed that between them they gave away some £350 million, and were still able to leave, as reports have shown, £200 millions (senior) and £150 millions (junior). These are staggering sums of money. And “Junior’s” will make no mention of any settlement for his six children and their various offspring, so it must be presumed that they have been well provided for. Some readers may say, but at least they gave some away, for the Daily Telegraph, May 12th, reports that “He devoted himself to furthering the schemes for human betterment initiated by his father after establishing his fortune." What from our point of view is important, however, is to whom it was given and why. Part of the answer to the first point is contained in the Telegraph of the 12th. “Educational Organisations benefited the most.” It seems highly probable that Marxian economics and the Labour Theory of Value plays no significant part in these “Educational Organisations,” for remember, education as taught today is primarily to fit workers into the productive and administrative organisation of capitalism and not to teach them Socialism.

Next comes “Religion,” another barrier to working class emancipation. Then “Public Parks, Roads, and the restoration and historic structures and antiquities.” No doubt the workers of the slum dwellings of all the major cities in the U.S.A. will appreciate that they can walk in the parks and pray in a well-restored church. Lastly, “Great sums to youth.” How this was distributed was not mentioned, but it is unlikely that these funds were used to propagate Socialist ideas. They were obviously spent to eulogise and bolster the capitalist system.

So, as commendable as some people may think was his “beneficence,” it is interesting to note that the people from whom this wealth was expropriated, his own workers, received little or nothing of what was rightfully theirs. Why he gave away these vast sums of money is a matter of some conjecture. One reason surely was to avoid taxation, but possibly also to buy immortality.

Socialists hope that in the not too distant future, people will see these so-called philanthropists in their true light—of leeches who grow fat on the mental and physical energies of the working class. Although “Junior” is dead, the Rockefeller Empire will continue, for neither father, son nor children ever took part in the production of things for use. At least it will continue to flourish until workers decide to own and distribute the fruits of their labour themselves.

Johnny Edmonds

Editorial: The Soviet Government and the Combines. (1927)

Editorial from the August 1927 issue of the Socialist Standard

The Daily Mail has for months been conducting a campaign against the sale in this country of Russian petrol on the ground that the oil wells were stolen without compensation from the former British owners. Various oil companies have taken up the cry and we are asked to believe that British capitalists are prepared to forego profits in order to keep their consciences clear. Thus Lord Bearstead, Chairman of the Shell Transport Co. (Sunday Worker, June 26th) and the Chairman of the Blue Bird Oil Importers (Observer, July 3rd, 1927) have given an assurance that their companies will have nothing to do with “stolen goods.” The Chairman of the Blue Bird Oil Importers, Mr. Francis Lorang, told his shareholders : —”I should also like to emphasise strongly that your company is not importing or marketing Russian or the so-called Soviet oils, and has no intention of departing from this policy.” It is therefore amusing to notice that the Shell Company have since 1921 retailed 500,000 tons of Russian oil in this country Sunday Worker, June 26th) and that the Blue Bird Motor Company, of which Mr. Francis Lorang is also Secretary and Director, imported 3,794,000 gallons in nine months of 1925 (Petroleum Times, October 24th, 1925). Apparently their consciences have only recently been stirred to life, or else Mr. Lorang has two consciences, one for each of the Blue Bird Companies; and even if the companies mentioned are not at the moment handling Russian oils, it is evident that some other companies must be doing so, since the import of oils and oil products from Russia for the period October, 1926, to June 1st, 1927, was 245,928 tons, an increase of 184,561 tons over the imports during the corresponding period in the preceding years (Daily Mail, July 2nd).

The probable real reason for the change of attitude simply is that the Russian organisation in this country, Russian Oil Products, has itself been retailing oil as well as selling it wholesale, and at prices below those of the other companies. Their hostility, in fact, is dictated not by “honesty,” but by commercial rivalry and the desire to compel a competing company outside the ring to toe the line.

It is more than probable that the British wholesale oil firms and the Daily Mail would drop their campaign if the Russians would agree, as they have elsewhere, not to undersell in the British market. They are reported (Daily Telegraph, July 5th) to have made such an arrangement with Standard Oil, and at the World Wheat Pool, which held its conference in Kansas City on May 5th, 1927, representatives of the Russian wheat growers “pledged themselves to the aim of international co-operation in the production and marketing of wheat,” and Saul G. Bron, head of the Russian delegation, gave an assurance that it was not the intention of the Russians to “injure prices.” “Russia will sell at the world price and take her chances with the others” (Corn Trade News, May 19th, quoting from New York Times). That assurance having been given, no one at Kansas City was spurred on to object to having relations with Russian growers on the ground that the peasants stole the land from the landowners : and the profit-seeking Americans in the Standard Oil group have been able to swallow their distaste for “stolen” oil.

Jottings. (1922)

The Jottings Column from the November 1922 issue of the Socialist Standard

We hear doleful tales of the ruin coming when workers protest against wage cuts. The “poverty” of our masters in these times of trouble is gloomily dilated upon. “Somebody,” however, is not doing badly, as witness the following quotation from the Daily News (18/10/22) :—

“300 PER CENT. DIVIDEND.

PLAN FOR FIVE-FOLD INCREASE IN

VACUUM OIL STOCK.

New York, Tuesday.

  The directors of the Vacuum Oil Company, one of the Standard Oil group, have voted to increase the company’s stock from 15,000,000 dollars to 75,000,000 dollars.

The shareholders will be asked at a meeting on December 2nd to approve the plan.

The proposal is the result of the declaration of a dividend of 300 per cent.“—Reuter.

300 per cent. ! That means to say that the shareholders have received their money back three times over, and still have the original amount invested in the company. Oil is booming!

In their issue for May 31st, 1921, the Daily News published an article entitled “World Rivalry for Oil,” by their New York correspondent. Some of the figures in that article are somewhat startling. For example, he states :—

  “In 1914-15 the profits of the Mexican Eagle Oil Company were 5,900,000 dollars. In 1919-20 they had risen to 59,000,000 dollars, an increase of 1,000 per cent. In 1914 the Burmah Oil Com­pany had a profit of £971.278. Five years later that profit was £2,849,000.

In eight years the Standard Oil Company of New Jersey increased its earnings from 35 millions dollars to 101 millions, and in 1918 paid 44 mil­lions in income tax.“

Such are the people who complain that “industry” will not bear the burden of present wages!

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While the unemployed are demanding work, the scientists, at the behest of the capitalists, are pursuing exhaustive enquiries and experiments to reduce work as much as possible. To put the point an­ other way, the application of science to industry is being speeded up with a view to increasing the amount of wealth a worker can produce without using up more energy. We have frequently given evidence in these columns of the increasing use of machinery; the providing of better surroundings—such as those existing at Port Sunlight and similar places; the increase in volume and simplification of effort by means of mass production; the reduction in the number of operations an individual worker performs; the introduction in certain factories of frequent rest periods; and the introduction of music into others ; and hosts of other things. 

The latest idea, however, is set forth in the Daily News (18/10/22) in an article dealing with the experiments being carried on by the Department of Applied Physiology at the Medical Research Institute, Hampstead. From this article we learn that :—

  “Part of the work of this Research Institute consists of measuring the amount of effort which a man expends under certain conditions of labour.“

The article then goes on to describe an experiment that took place. A man got on to a stationary bicycle wearing a mask with two valves. He cycled for five minutes, and the result of his effort is estimated accurately by delicately balanced instruments attached to the bicycle, and also certain apparatus attached to the mask.

The article then goes on as follows :—

   “By these measurements we can find out,” said Professor Hill, “how much fuel has been burnt by the human furnace, and how much energy has been expended during those five minutes’ work.”

   The Department has converted a disused corridor into a wind tunnel. A bracing wind is generated by a huge fan at one end of the tunnel, and in this breezy atmosphere the spell of work on the bicycle-ergometer is repeated.

  It is found that in these conditions the work is performed with far greater ease and freedom from fatigue than in the air of an ordinary room.“

With the use of a little imagination, we can picture the wage worker of the future turning up at the factory gate to be “weighed in,” his energy measured, put into room with a whirlwind, and tearing through the work like a tornado ! Not much chance of “dodging the foreman“ then ! His capacity and his performance will be measured with delicate instruments !

The point in the business is that, whereas the capitalists of all countries try to con­vince us that unemployment is due to fall­ing markets, they are all employing the methods that must of necessity increase the relative volume of the wealth produced, and at the same time choke the markets. Thus the forces of capitalism inevitably tend to increase unemployment.

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Lloyd George defined his political outlook in a speech he made at the opening of the new offices of the Port of London Autho­rity on Tower Hill. The treasure is worth preserving. He said :—

  “I am very pleased to see something which represents the spirit of compromise characteristic of our people—something which represents no principle of any sort or kind, but is an outrage on every principle you can lay down. And yet it works. “—Daily News, 18/10/22.

Such is the outlook of the man who has proved himself to be, in many ways, an admirable tool to carry out the wishes of the master class. Ambitious, unscrupulous and deceitful, he has a glib tongue that could sway crowds, and flattery and cajolery that could turn the heads of “Labour leaders” and hoodwink workers’ deputations. He steered the helm of State successfully for a time on behalf of those whose interests he served. Why did his “lack of principle ” work ? Because at the back of compromise, and apparent lack of principle there was, after all, a principle that governed his actions. That principle was the advancement of the interests of the capitalist class.

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The Communist for 21st October, 1922, contains the election policy of the Communist Party for the Local Government Elections. An examination of this document reveals the value of this wild and woolly gang of compromisers.

The final solution of the workers’ troubles, they contend, can only be arrived at by “the workers taking over control of the affairs of the community through their own machinery of government — the Soviets”. But in the meantime (blessed word !) there are many points on which there is agreement and on which all could combine; and it considers it “its duty to the working class … to join in with the rest in making the. attempt to see what can be done with the existing forms of local government.” This is very interesting—and so like the conciliatory spirit pervading the recent religious conferences on unity !

Now let us examine some of the matters upon which there can be general agreement.

These are some items from the pro­gramme :—

  “2.—The absorption of the excess workers in each locality, as far as possible, by the extension of useful public enterprise.“

What is “useful public enterprise?” Obviously doing work that, in general, would otherwise be done by private enter­prise. In other words, throwing out of work the workers in one direction to employ less of them in another—because, as a rule, the work of a public body takes the place of the work of several private bodies, eliminating overlapping and waste. Over­ lapping and waste usually mean more work for workers. What a truly brilliant method of absorbing excess workers ? In any case why “useful public enterprise?” What does it matter to the starving unemployed whether the work is useful or useless, so long as it enables them to get bread? Digging holes and filling them up again will cost the capitalist some of his wealth, but will not hurt the workers. The Communist Party is evidently concerned about assisting the capitalist to “save the rates.” This is borne out by the following : —

  “20.—Pooling of rates in all populous centres to avoid distinction between rich and poor areas. “

The Communist Party is concerned about the rates—a matter which we have frequently demonstrated affects the capitalist class alone.

Item 3 demands nationalisation of land—that old bogey and well-worn labour shibboleth. It is an excellent means of increasing unemployment and assisting the capitalists. The Communists are really very much concerned about the interests of the capitalists.

There are many other fat-headed items in the programme, but I had better finish up, or the Editorial Committee will be hitting me over the head for using up too many of the valuable columns in this paper.

Punchinello.

Editorial: Behind the Fall of the Coalition. (1922)

Editorial from the November 1922 issue of the Socialist Standard

The bulk of the world’s-oil supply comes from America. According to the Daily News (May 31st, 1921), “82 percent, of oil comes either from the United States or from American mines in Mexico.” The same paper states that within 13 years the wells of the United States, unless conserved, will give out. The Standard Oil Co. practically controls the American supply and, consequently, they have been looking abroad lately for fresh fields. In this they have come into conflict with the Dutch and British group of oil companies. The capital of the respective oil companies is tremendous, and they use their resources to shape the policies of the different world powers.

The fight for oilfields and control of oil distribution has played a large part in recent foreign policy. Behind the Russian negotiations and the Mesopotamian squabble lurked the power of oil.

On Thursday, October 26th, 1922, the Financial Times reports an interview with Mr. J. Koster, the managing director of several oil enterprises. Mr. Koster, after giving detailed evidence to prove that America would be facing a shortage of oil in the near future, wound up as follows :—

  “My study of the world’s oil position teaches me these significant facts. The conclusion I have arrived at is that in the United States within the next two years there will be a crude oil shortage, and the prices of crude oil and oil-products, and the value of yet unmined petroleum, must necessarily feel the effects of such unavoidable shortage, and the one result can only be higher prices and a large premium for oil reserves.

   So the British and Dutch oil enterprises that have succeeded in securing control of a large part of the world’s petroleum reserves can face the future with every confidence. In order to account for this, one has but to consider the effect which a stopping of all export from the United States, combined with a decreasing export from Mexico, would have on the markets outside of America. Besides the profits already obtained under the present circumstances by undertakings working in countries like the Argentine Republic, Venezuela, Persia, the Far East and Roumania, the future of such undertakings, thanks to the state of affairs in the United States, seems to offer almost unlimited possibilities.”

The prize is large, the future bright— what seeds for future turmoils ! The Anglo-Persian (in which the British Government has a large interest) and Shell Groups have angled themselves into a good position in the East to threaten the position of the Standard Oil Co., and the fight between these groups to corner the world’s supply is now going ahead fast and furious.

Another factor at the root of the late Government’s fall has been suggested by two recent happenings.

Mr. Leslie Urquhart, the Chairman of the Russo-Asiatic Corporation, negotiated an agreement with a representative of the Russian Government under which his corporation gained certain concessions in Russia. Arising out of the British Government’s muddling of the recent near Eastern problems, the Russian Government refused to endorse the Urquhart concession. In his speech to the shareholders of the Russo-Asiatic Corporation on October 23rd, 1922 (see Evening Standard for that date), Urquhart blames the British Government’s policy for his failure, and urges that Russia should be treated as any other world power. He also deprecates the suggestion that his corporation would endeavour in any way to influence Government policy. The next day Mr. McKenna, the Chairman of the London Joint City & Midland Bank, and formerly a Liberal Chancellor of the Exchequer, threw overboard his former associates, and appeared on a Tory platform, advising his audience of business men to support Bonar Law, the new Tory Prime Minister. On the surface, this might appear as an ordinary case of a political turncoat. It is a curious fact, however, that the London Joint City & Midland Bank owns thousands of shares in the Russo-Asiatic Corporation. Would it be too bold to suggest, in spite of Mr. Urquhart, that the above corporation have succeeded in influencing Government policy?

Oil: the greasy politics (1983)

From the June 1983 issue of the Socialist Standard

Oil has been used for a very long time. More than 5000 years ago, Sumerians, Assyrians and Babylonians took advantage of large seepages at Hit on the Euphrates. In the early centuries AD Arabs and Persians developed an interest in crude petroleum and its distillation into illuminants and it may be that this technique was carried to Western Europe from the 12th century onwards through the Arab influence in Spain. In North America the Indians used oil as a medicine and the early explorers found seepages in what are now the states of New York and Pennsylvania. Up to the start of the 19th century illumination in the United States and other industrially advanced countries was little better than that of the ancient Greeks and Romans. The increasing development of capitalist industry brought new needs for additional sources of oil. By the middle of the century kerosene or coal oil. derived by distillation of coal, was in common use and the need for yet cheaper and more convenient sources of lubricants and light grew more pressing. In 1859 in western Pennsylvania the first well specifically for oil was drilled. Before 1900 oil field discoveries in the United States covered 14 states and there were finds also in Europe and the Middle and Far East.

At the outset of the 20th century the use of refined petroleum and lubricants ceased to be of primary importance and the industry became a major supplier of energy. In 1980 oil and natural gas together supplied two-thirds of the world demand, with the use of approximately 80 million barrels a day. This does not mean that oil is a satisfactory fuel from an ecological viewpoint: it is a heavy pollutant and when it is burned many valuable chemicals are wasted. Such bad effects have to be really serious to figure in capitalist calculations, when cheapness, availability to the consumer and profitability to the producing interests are always the main considerations.

Reliable estimates about oil reserves and new resources are difficult to obtain because the relevant information is in the hands of the oil companies themselves. Where these firms are government owned, as is the general rule in so-called communist countries, such estimates can be state secrets. OAPEC have stated [1] that about half the known reserves in the Arab states have now been extracted. However, excluding unavailable figures for China, it was estimated in 1974 [2] that about 850,000 million barrels of oil remain to be found, 40 per cent behind the Iron Curtain. In the Soviet Union, Middle East, Canadian Arctic Islands as well as the unknown Chinese contribution these discoveries can be expected mainly on land; elsewhere the great majority will be offshore. There is still a lot of oil over which to fight.

It is because oil is such a vital source of energy that it poses considerable problems for capitalist administrators. The interests of those who profit from its production are clearly to obtain as high a price as possible, just as those who are users of petroleum products strive to keep their costs as low as they can. In such circumstances the state usually has to intervene to regulate the conflict in the interests of the ruling class as a whole, as happens with other important industries. In general, capitalist governments have found oil interests very hard to handle. The industry is vastly profitable, it very soon took on a multinational character, and its products can now be carried quite easily all over the globe. To try and straightjacket the industry might lead to an interruption of supplies which, even temporarily, could have serious repercussions. Also in many states, particularly in the Middle East, it is the producers who are the dominant, indeed virtually the only, capitalist interest.

This apparent lack of interest has led observers such as Anthony Sampson to state [3] that capitalist governments have evaded the problem of the control of the oil companies. It is true, and not particularly surprising, that at certain times oil lobbies have by corrupt means gained undue influence over capitalist governments. Such was the case in the United States in the 1920s when the Teapot Dome Scandal rocked Washington and probably contributed to President Harding's death in office. However, capitalist politicians all over the world are nowadays at their wits end to find a way to regulate the situation. To take a cricketing analogy, Sampson's insinuation is rather like accusing bowlers of not trying to get Geoffrey Boycott out because statistics show that he is rarely dismissed. Sampson deserves credit for the diligence of his research, but unfortunately suffers from the reformist delusion that capitalism can be made to work in the interests of the whole population. He does however state that “any agreement over oil implies a first step towards some form of world government". We shall return to this later.

The first big manifestation of oil politics occurred in the United States in the closing years of the last century. Many of its features are still to be seen today world wide. John D. Rockefeller, using mainly borrowed money, established himself in the refinery business and by 1870 had brought Standard Oil into being. He then combined with some of his competitors to fund a Central Association with himself as president. Such a combination of capitalist concerns to pursue a joint interest is known as a cartel. This provoked the producing interests to try to form a cartel of their own. Rockefeller's cartel was boycotted, and an agreement was reached to stop new drilling and sell as a fixed price. However the temptation to undercut each other proved too much, the bottom fell out of the market and Rockefeller had won. He was contemptuous of the efforts of the producers, explaining [4]: "The dear people, if they had produced less oil, they would have got their full price”. This success led to a number of refiners selling out to Rockefeller, giving his trust a monopoly. His success and that of other trust barons, however, alarmed other capitalist interests and eventually led Theodore Roosevelt's administration to use anti-trust legislation against him. Standard took the fight to the Supreme Court who ruled in May 1911 that it must divest itself of all its subsidiaries.

This exposed the difficulties cartels have in sticking together in face of competition between individual members. If these capitalist interests cannot maintain such limited agreements, how can we expect joint action on a global scale to take steps towards world government? Yet Sampson sees this as a necessary condition to control the oil industry. The Rockefeller example shows the cartels and trusts in turn provoking counter attacks by the state in the interests of the majority of the ruling class, although this took longer to come about than would probably be the case today. The crushing defeat suffered by the producers at Rockefeller's hands is less typical.

The United States were fortunate at that time in having their own native oil supply. Underwater exploration had yet to materialise. Britain and other West European countries had no supply of oil and, as World War I approached, were only too well aware of their vulnerability. Where, for example, was the Royal Navy to obtain oil? Attention was directed towards the underdeveloped parts of the world where the vital fluid was to be found. Burmah Oil, formed to exploit discoveries in Burma, produced an offshoot, Anglo-Persian, based on newly acquired concessions in Iran (then called Persia). Only three months before war broke out the British government, prompted by Winston Churchill, acquired a 51 per cent stake in this company, later renamed British Petroleum (BP). Eventually the American firms, unable to meet increasing demand from home supplies, were also forced to look overseas. Saudi Arabia was to become an American sphere of influence with an organisation called Aramco, jointly owned by four oil companies, to run the concessions. These new relationships, so similar to those between imperialist nations and their colonies, contained the seeds of future trouble. As native ruling classes developed in these territories, leading eventually to the formation of their own governments, so complaints began about the profits which the oil companies were making at "their expense”. These nationalists looked for ways to obtain a larger slice of the cake. Attempts by Mexico in 1938 and by Iran under Dr. Mossadeq in 1951 to nationalise “their” oil industries were eventually defeated because competing customers were able to combine and enforce boycotts. However, nationalist feeling in the oil producing countries continued to gather momentum and the stage was set for the formation in 1960 of the Organisation of Petroleum Exporting Countries (OPEC)

OPEC would probably have formed itself in any case, but the act was triggered by price cutting by Exxon (ESSO), one of the giant companies popularly known as the “seven sisters". They reduced their posted price by 10 cents a barrel in August 1960. The other six “sisters", although none too happy, eventually felt compelled to follow suit. There was an oil glut at the time and, as happens periodically, Russia was threatening to flood the market at discount prices. This cut helped to unite the producing nations. One month later, on September 9, representatives of five of them, who were at that time collectively responsible for 80 per cent of the world’s oil exports, met in Baghdad and OPEC was formed. Eventually membership grew' to 13 — Algeria, Ecuador. Gabon, Indonesia. Iran, Iraq. Kuwait. Libya. Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela. From the start OPEC made it clear that they were, in the words of one delegate, "a cartel to confront a cartel”. [3] Their main object was to raise their revenues. The reaction of the oil companies was to encourage production outside OPEC, a situation which accelerated the coming of North Sea Oil.

OPEC's fortunes have fluctuated with the current state of the oil market, contrary to ideas that the industry is a "special case" somehow exempt from the normal operation of the forces of supply and demand. The oil glut persisted during the 1960s and OPEC was relatively ineffective. After an attempt by the Arab nations to impose an embargo following the Arab-Israel six-day war in 1967 had failed because the non-Arabs did not give their support, the Organisation of Arabian Petroleum Exporting Countries (OAPEC) was formed by the Arab states who nevertheless remained within OPEC. By the 1970s however things had changed. Demand for oil was running considerably ahead of previous forecasts, and the glut was subsiding. The Libyan crisis of 1970 was the first sign of this. Following the deposition of King Idris, Colonel Gadaffi's regime threatened 21 companies which held Libyan concessions that unless they raised the price paid to Libya he would sell oil to Moscow. There were now so many competitors in the field that the oilmen could no longer enforce the type of boycott which had toppled Mossadeq in 1951, and eventually they had to agree to a price increase of 76 cents a barrel.

In this situation many OPEC members negotiated “participation" agreements allowing them part ownership of the companies' concessions. By September 1973 the price of oil on the spot market rose above the posted price for the first time since the formation of OPEC. The following month the Yom Kippur war broke out between Israel and the Arab nations. In Kuwait later that month OPEC decided to raise prices by 70 per cent and simultaneously OAPEC announced an oil embargo involving a 5 per cent cut in production each month until Israel withdrew from the territories it had occupied in June 1967. By the time the dust had settled the price had quadrupled in just over two months. The general political uncertainty in the Middle East helped to keep prices up and during 1979-1980 the Khomeini take-over in Iran and the Iran-Iraq war caused some panic among the oil companies; prices nearly trebled during this period. In an attempt to form an effective counter cartel to confront OPEC, members of 21 oil importing nations agreed to form the International Energy Agency (IEA).

The current slump has meant that such price rises could not he maintained. Demand for oil inevitably fell off. Sales of smaller cars picked up appreciably in the United States. The development of sources outside OPEC meant that the latter’s share of the market was declining. OPEC’s combined oil revenues [5], which were $275 billion in 1980, had declined to an estimated $205 billion in 1982. In April 1980 Japanese oil industry executives refused to pay the National Iranian Oil Company $35 a barrel. Iran was now only exporting 1.5 million barrels a day as opposed to 4 million under the Shah. Differences which had always existed within OPEC came to the fore. The main one was between those nations led by Iran, which have large populations and need money quickly, and smaller nations who can take a more relaxed, long term view. The latter are led by Saudi Arabia, with estimated reserves twice those of Iran. The Saudi oil minister and spokesman — Sheik Yamani, suave and Harvard educated — became a world figure in the 1970s and for many typifies OPEC.

The Saudi group need to retain trade into the next century. They were moderates on price in 1979-80 for fear that by going too high they might stimulate alternative energy projects which could drastically reduce their business. Now, while sharing the OPEC desire to avoid a price slump, they are restless about the restrictions on production required to underpin the price. In contrast the Iran-led group have claimed that the high price is good medicine for the importers because it forces them to practice conservation and look for other sources of energy [6]. Equally hypocritical is the claim by OAPEC [7] to be acting in the interests of non-oil Third World countries. The lie to this is given by figures showing [5] that OPEC’s current account surplus rose to around $110 billion in 1980. A fraction of this surplus was invested in less developed countries, but a large slice was added to bank deposits. The Saudi led group at OAPEC has always found difficulty in finding profitable investment channels for its massive oil income. Despite the trappings of wealth Saudi Arabia remains a backward area which still punishes petty "theft" by cutting off a hand, in a ceremony largely unchanged since the days of Mahomet.

The term “price war" has been used almost exclusively for periods of price cutting such as the present. The current round started in February, when posted prices in the United States were marked down by about $2.50 a barrel, and non-OPEC Russia and Egypt reduced export prices. The British National Oil Corporation, a government owned body set up to deal with British North Sea Oil. then cut its price by $3 to $30.50 a barrel. An OPEC meeting in January having failed to agree. Nigeria unilaterally reduced its price by $5.50 to $30 a barrel. This was the background to the London meeting of OPEC in March which eventually produced a fragile looking deal under which prices were cut by $5 a barrel and a production ceiling of 17.5 million barrels a day was set. The immediate outlook for OPEC is far from rosy. Its fortunes will clearly continue to follow market fluctuations and serious splits, perhaps withdrawals, are likely.

Many workers foolishly believed that the discoveries in the North Sea heralded a cheap oil bonanza for everyone in Britain. In fact there was no chance of the working class gaining any benefit. Even if prices did go down sharply, this would have effectively reduced the price of labour power and thus led to a corresponding reduction in wages. Only the owning capitalist class can benefit from North Sea Oil, and their reaction has been mixed. British industry’s need for cheap energy remains but the ruling class are now also in the oil exporting business. Rising oil prices were held responsible for an upward surge by sterling on the exchange markets, hitting other British exporters. This prompted the famous comment by British Leyland's Michael Edwardes that if North Sea oil caused such problems it might be better to "leave the bloody stuff where it is". On the other hand there are obvious benefits for the capitalist class in being self supporting in oil, even if only temporarily. At the moment 26 fields are operational in the North Sea [8]. Another 30 are discovered but future developments are uncertain owing to high operational costs and low recoverable resources. The general fall in oil prices is a further disincentive. It is expected that North Sea oil production will tailback after 1986.

Gross exchequer revenue from North Sea oil is about $7 billion. 6.4 per cent of total central government taxes. Capital intensive projects such as oil exploration and the development of alternative energy sources are based on certain assumptions about future prices and a slump can destroy their commercial viability. However, BNOC is under some pressure from customers who have not yet finally accepted their new price, hoping for further reduction. There are renewed reports [9-10] of Russian oil being dumped on the market. It looks as though the downward pressure will continue for a while yet, with an uncertain outlook for British North Sea oil.

E. C. Edge

REFERENCES
[1] Organisation of Arab Petroleum Exporting Countries (OAPEC) Bulletin, Vol. 8, No. 7. July 1982.
[2] Encyclopedia Britannica, 1974 Edition.
[3] Anthony Sampson: The Seven Sisters, Hodder and Stoughton 1974.
[4] Ida M Tarbell The History of the Standard Oil Company. New York, 1904. Vol.1.
[5] Unsigned article "The Implications of Cheaper Oil". Petroleum Economist, March 1983.
[6] Remarks by the Shah of Iran in 1973, quoted in Ref. 3. p259.
[7] Editorial in Ref. 1 entitled "Aid to the Developing World in Surplus Oil Market".
[8] Article by Alexander G. Kemp and David Rose (University of Aberdeen) in Petroleum Economist, March 1983.
[9] Rod Chapman (Energy correspondent), The Guardian. 9 March 1983.
[10] Roland Gribben (Business correspondent), The Daily Telegraph. 23 March 1983.

Is Lack of Wealth the Trouble? (1923)

From the February 1923 issue of the Socialist Standard

In this land to-day the vast mass of the population suffer from poverty and the evils that flow from poverty. Overwork, underfeeding, in some cases, endless toil in unhealthy surroundings, in others, the hopeless search for toil. This is the position facing the average worker to-day. Why is the mass of the population doomed to follow this miserable and toilsome path?

Is it because there is a lack of wealth? A few hundred years ago the needs of the population were met by a very primitive method of production. Hand labour with poor tools that could only be operated by one person was the rule. In cottages and villages fabric was spun and woven for clothing; the artisans in small rooms hammered out and shaped the metal for the simple tools, ornaments, and such-like; the cottager tilled his little strip of land to provide food for many; the sailing vessel went on lengthy and perilous voyages to distant lands; the townsman plied his little trade in silks and perfumes from the East. Everything was simple and on a small scale, and yet at that time there wasn’t a landless man in the kingdom. And they didn’t work particularly hard in those days either —over a third of the year was occupied in holidays and feastings.

How different are things to-day! The application to industry of the discoveries of myriads of fertile minds has completely changed the face of affairs. No longer is the hand tool the means of producing wealth; no longer does the sailing vessel lord it over the ocean. If one wishes to see the relics of the older method of wealth production one must visit the museums, where they are kept as objects of curiosity and amusement, and material for the writers, of history. These things have past away, and with them has passed the comparative comfort that existed alongside the spinning' wheel.

The discoveries of new lands and new sea routes; the development of manufacture; the application of steam to industry; the ocean-going liner; and the telegraph—have made possible the prodigious production of wealth as we see around us to-day. How can it be said that there is insufficient wealth when on every side there is evidence of abundance. Machinery has made possible a production of wealth per man many times that which an individual could produce a few hundred years ago. That there is an abundance of wealth can be easily verified. The reports in the papers of the rich man’s feasts; the dinners with choice and rare dishes; the balls attended by people in wonderful and costly dresses; the monkey’s parade at Ascot, and similar places; the stationary and floating palaces; the company reports in the daily papers all bear witness to an abundance of wealth. Whenever companies increase their capitals by fresh issues of shares, these shares are not only fully subscribed in a few days, but they are vastly over-subscribed. There is literally money to burn among a certain section of the community. A glance at the position of the oil companies will show that their expansion has been enormous in the last few years. Their capitals have leaped up from a few thousands to thousands of millions. Standard Oil paid a dividend of over three hundred per cent. recently, in spite of watered capital. The cry of shortage of wealth is obviously nothing more than a figment of the imagination, or a false scent to lead astray the unwary.

How is it that with simple tools and little organisation they could provide for the whole of the population in days gone by, whereas to-day, with complex tools and a mighty organisation, poverty is the lot of the mass of the population?

Investigators, who have lived among savage and barbarian tribes, have stated that starvation was unknown in such little communities, except in the cases of famine or some similar exceptional cause. Yet today, though the shops are overloaded with the things they need and the rich man’s table is groaning under the weight of good things, thousands of men, able and anxious to work, are tramping the streets, starving, in search of the wherewithal to live. Poverty exists to-day in the midst of an abundance unparalled in history. Why?

The food and other necessaries of life, of which we see such a lavish display in the shops, are not there to be distributed to those who require them: They are exhibited for sale to those who can buy them. All goods displayed in the shops to-day are produced for sale in order that profit shall be made, and unless they who need have the wherewithal to buy they may go hungry, though the goods are going rotten for want of a consumer. This is due to the fact that the wealth produced to-day is privately owned.

The Struggle for Markets. (1924)

From the March 1924 issue of the Socialist Standard

In January, 1924, the Manchester Guardian quoted an Exchange Washington message as saying, “Following a Conference with oil owners, President Coolidge has ordered two battleships to proceed to Mexico.”

It has been stated that the United States of America came into the great war to fight for, besides other things, the rights of small nations. The knowledge obtained in the great war about such rights, as can be seen from the above telegram, has now been put to practical use by President Coolidge. That the U.S.A. President has consulted American owners of oil wells in Mexico, instead of representatives of the Mexican people, is probably not an oversight on the President’s part, A person so high up as the U.S.A. President, cannot be expected to consult a low down greaser as to what is good for him. Other messages from the same source as the above telegram, state:

“A squadron of the U.S.A. Navy has been sent to scare the rebels from blockading the oil port of Tampico,” and again, “ It is understood that American troops are destined for the Gulf and oilfields, where extensive foreign interests were recently invaded by Huertaists.”

That these foreign interests happen to coincide with the interests of the American Standard Oil Co. is probably a happy accident. One more phase in the struggle between the Standard Oil Co. of America and the. Royal Dutch Shell is being fought out in this struggle for the exploitation rights of the Mexican oil wells.

Further Exchange Washington messages state: “That the U.S.A. have allowed armaments to be sold to Gen. Obregon’s troops, and have placed an embargo on the supply of munitions to the enemy,” who is in this case Gen. de la Huerta. “Gen. Obregon’s troops have been allowed to march on American soil in order to outmanoeuvre the enemy.” The violation of American soil by foreign troops does not seem to Have scared America’s patriots. Patriotism and the large dividends which the American Standard Oil Co. have given to its investors, evidently in this case, go hand in hand. This, however, is in the U.S.A., where, as every Englishman knows, graft, big business and Government go together. In England there has been a change of Government. The late Tory Government persistently refused to recognise Soviet Russia. The first plank in the new Labour Government’s programme, and which they have already carried out, was the recognition of Soviet Russia. That Russia has possession of oilfields, which, if concessions could be obtained for their exploitation, would be the means of obtaining a monopoly in the future, as well as huge profits which follow; that Russia is a possible huge market for British textile goods; that Russia has an abundance of raw materials which could be manufactured in Great Britain is only incidental to the fact that though leading members of the present Government have denounced Soviet rule in the past, they have now condescended to shake hands with murder, as the Daily Mail once had it.

The Manchester Guardian, the organ of the British textile industrialists, has for months past advocated the full recognition of Russia. It advised the Liberal and Labour Parties to come together for this end. This has come about. Leslie Urquhart, Chairman of the Russian Asiatic Corporation, has, as was pointed out in the Leader, of our November issue, largely blamed the late Tory Government for his failure to obtain favourable concessions from Russia, for his Company. England has beaten other countries in the diplomatic recognition of Russia, in its haste to obtain first chance in the Russian market.

The prospect of a large market for British goods and the possibility of concessions to exploit the Russian workers and mineral wealth of Russia has been too much for the cupidity of the Capitalist class.

Can it be that big business does influence Government policy in England?

The scramble for markets is becoming ever keener. For the markets that now exist are becoming less able to swallow the gigantic output of modern industrial production. More, and more, countries are becoming competitors for the markets that at present exist. In the East, India and China are gradually becoming sufficiently industrialised to produce enough goods for their own needs. Japan, having a superabundance of goods, which it desires to get rid of has long since begun a policy of annexing suitable territories in which it can dump its goods. In the Chinese market Japan has come up against other countries on the same game, namely America and England. A consortium of powers had to be formed in order to prevent war, and if possible, to divide the spoils equally.

Force will soon be the only method by which these countries can dominate markets.

To use force means war; on the other hand, unless markets are found under the present system, it means greater unemployment and poverty for you English fellow worker. Out of the two evils which are you to choose? Choose neither of them, fellow worker; instead, study the principles of the Socialist Party on the back page. If you understand and approve of them join the Party and help us to eliminate war, unemployment and other evils which are the result of the Capitalist system in which we live.   

H. A.

Two Stories of Synthetic Rubber (1942)

From the April 1942 issue of the Socialist Standard

Two newspaper reports on synthetic rubber together provide an illuminating commentary on the capitalist outlook and on the way in which war speeds up the development of new industries and thus destroys the value of investments in the old ones.

The first is from the Times Washington Correspondent (Times, March 28th, 1942):—

  The revelation of the nature and effect of a cartel agreement between the Standard Oil Company of New Jersey and the I. G. Farbenindustrie, of Germany, has aroused bitter feeling in and out of Congress. Broadly, it has been shown by Mr. Thurman Arnold, Assistant Attorney-General, in evidence before a Congressional committee, that an American process for the manufacture of synthetic rubber, which was withheld from American manufacturers, has been made freely available to the Germans, and that in 1939 the Standard Oil Company’s subsidiary in the Reich was helping to design plants for the manufacture of aviation spirit according to an American formula.
  The Standard Oil Company had secured from the Farbenindustrie its process for the making of Buna rubber, but, Mr. Arnold said, had delayed its use in the United States because the Hitler Government objected. Then the Standard Oil Company had developed its own butyl process for the production of synthetic rubber. Before America entered the war the company had informed Germany, alone among foreign nations, of this process, and had refused the licensed use of it to independent producers in the United States.
  Mr. Arnold continued his testimony to-day, in the course of which he said that the Farbenindustrie was found to have more than 100 cartel agreements in the United States, for "one cartel agreement leads to another.” 

It may be added that the Company denies that its cartel agreement "weakened the war effort," but does not dispute the facts.

The second is from the Manchester Guardian (March 24th, 1942), and deals with the Government schemes to speed up and cheapen the production of synthetic rubber in order to meet the situation caused by the Japanese conquest of the rubber producing territories in the Pacific. It is estimated by the Oil and Gas Journal of U.S.A. that the synthetic rubber known as “Buna” can be produced from raw materials taken from the petroleum industry cheap enough to be sold at not more than 10 or 15 cents per pound (5d. to 7½d.). The Guardian questions this, and shows that the cost of production will actually be much less, with consequent drastic effects on the marketing of plantation rubber:—

  That forecast applies, of course, to a scale of output that may not be reached for two or three years. But it disregards the fact that capital expenditure, which will account for almost the whole of the production cost, will be cheapened by Government assistance, either through tax reliefs or by low-interest loans. Further, while the war lasts certain raw materials necessary for both synthetic rubber and aviation spirit will be somewhat short, but as soon as the war ends abundant supplies will be at hand. All this means, first, that the plantation interests must abandon all hope of seeing "shilling rubber” return, and, secondly, that they will have to concentrate, when the time comes, on finding means of competing with the new rival.

What is true of rubber will be equally true of many other raw materials and finished products which will be faced with the competition of substitute products and goods produced in countries whose industries have been developed under the pressure of war.

Edgar Hardcastle