The story behind Powell Duffryn (1965)

From the October 1965 issue of the Socialist Standard

In Regent Street, in the posh shopping area of London, is a shop called POWELL DUFFRYN. Now that nationalisation is once again a political issue it is not out of place to tell the story behind this name.

It begins in South Wales, where Powell Duffryn used to be one of the hated coal combines owning pits in the Red Rhondda valleys. Between the wars these coal combines, by their persistent attempts to worsen wages and working conditions and by their union-busting, aroused deep resentment among miners, many of whom devoted their time to campaigning for the nationalisation of the mines. And on January 1st, 1947 their aim was achieved. The mines were handed over to the National Coal Board; the NCB flag was raised amidst cheering and the singing of traditional Labour songs. Powell Duffryn was dead. Or was it?

As a side-line to mining, Powell Duffryn was also engaged in the making of heating equipment, boilers and radiators. This side of the business was not nationalised. In the years that followed, while the NCB languished, Powell Duffryn used its compensation and flourished. Today it has its shop in Regent Street; it co-operates closely with the nationalised fuel industries—the Gas Board and the NCB. Not long ago the papers carried a joint Powell Duffryn-NCB advert. All of this is a mockery of the devoted, if misguided, struggles of the miners to nationalise such outfits, and yet another monument to the futility of reformism.

It is worth spending some time looking into the concept of nationalisation a little more closely. In its modern sense, the term first appeared in 1869 when the telegraph system was nationalised, though for some time before the concept had gone under a different name. Some people had called for the nationalisation of land, and a clause in the 1844 Railway Act had allowed for the nationalisation of the railway system if necessary. The word itself—nationalisation—gives a clue as to its significance. The dominant theories, popular and philosophical, of capitalism hold that the interests of all those who make up the entity variously called the “nation” or the “public”, on the popular level, and “society” or “the community”, in the textbooks of political philosophy, are one and the same.

This is a fraud. Present-day society is composed of two mutually antagonistic classes, between which there is a conflict over the distribution of the product of labour. The interests of these two classes are completely opposed; they have no interests in common. Once this is realised, it can be understood that “nation” and “public” are often little more than polite words for the owning class.

When the apologists of capitalism wish to refer to the situation which exists after the State has taken over a section of industry in the interests of the capitalist class as a whole, they sometimes call it “common ownership”. This is how the phrase is used in the famous Clause IV of the Labour Party constitution in its reference to the “common ownership . . . of the means of exchange” (i.e. financial institutions). To talk of the common ownership of financial institutions is a contradiction in terms, the purest nonsense. But to those who use “common ownership” in its capitalist sense it makes sense. As has been well said, the Labour Party stands for “socialism for the capitalist class”!

The capitalist class has been prepared to consider nationalisation as a solution when their interests as a whole have differed from those of a section. This was the position with land in the nineteenth century. The landowners, by virtue of their monopoly position, were able to extract a portion of the proceeds of working class exploitation from the capitalist class. A similar fear that the railway companies might exploit their monopoly position was responsible for the clause in the 1844 Act. In both cases nationalisation, or the assumption of ownership by the State on behalf of the rest of the ruling class, was considered. This had one drawback; it meant that the State had to assume the management of the estates or railways it might acquire.

Most capitalists were not prepared to put such power into the hands of their State officials. The institution of the public corporation was a solution to this problem. It removed the fear of the State becoming more and more powerful and eventually taking over other sections of industry as well. This fear was not groundless; there are historical examples of this happening, in Russia for instance. Here the capitalist class as well as the working class, such as they were, were subjected to a dictatorship of the State. The system remained capitalism however and it eventually evolved into a form of State capitalism.

Where such disputes break out between the capitalist class and usurping politicians or State officials, the workers are invited to take sides. But their interests are no more involved here than they were in the old landowner-capitalist struggle. Despite this, “Leftwingers” delight in backing the new usurpers against the capitalists; only to find that the usurpers end by establishing themselves as a new ruling class. So nationalisation without compensation is no more worthy of working class support that the more moderate means of nationalisation that have been applied in Britain.

With the public corporation the capitalist class felt less fear about nationalisation, so that in 1944 Herbert Morrison could declare that the Conservatives had introduced more “Socialism” than the Labour Party. The nationalisations of the post-war Labour Government however identified the Labour Party as the party of nationalisation.

Soon after 1945, a large section of the capitalist class were becoming dissatisfied with the efforts of the Labour Party on their behalf. They were becoming annoyed at having to pay taxes to prop up inefficient State-run industries. Not that they were completely opposed to all measures of State control; they just came round to the view that nationalisation was not a suitable means of such control. This is the crux of the argument about steel nationalisation.

The Iron and Steel industry has been subject to a substantial amount of State control since the 1930’s. In 1951 it was nationalised but in the succeeding years the Conservative governments sold most of it back to the former owners. Ironically they could find no-one to buy Richard Thomas and Baldwin’s which is still nationalised today. The plans recently announced by the Labour government provided for the sole shareholder of some 90 per cent of the industry to be a National Steel Corporation which can thus control the industry as it wants. The Conservatives and Liberals favour what they call a more competitive solution.

The compensation measures—since in Britain nationalisation amounts to a business deal in which the State buys out the old owners—have been described in avowedly capitalist papers as reasonable, fair and far better than expected. One referred to “jubilation in the City”. It seems that some £660 million will have to be paid out. In present at stock-market conditions much of the government stock which will be given as compensation could well be sold and the capital re-invested in more profitable fields.

This brings us back to Powell Duffryn. The same story will no doubt be repeated for the steel industry as for the coal industry and the others. We conclude by quoting from a recent survey of the State in industry in Britain:

“Nationalisation deprived many companies of their assets but left them with huge sums in cash and stock for re-investment after compensating the former shareholders, The colliery companies alone received nearly £300 million from this source. Some companies became investment trusts; others took over and developed existing businesses or established new enterprises in fields where they could use their technical and managerial skill. Typical examples are Cable and Wireless (Holdings) Ltd.—now quite unconnected with the nationalised concern, Cable and Wireless Ltd.—which has invested its free money to build an interest in about 850 different companies; and Thomas Tilling (Holdings) which continues to manage the interests of the old Tilling Group that were not acquired by the British Transport Commission, and has used its compensation to acquire holdings in some twenty-five companies in industries ranging from light engineering to glass and plastics and from insurance to book publishing” (Government and Industry in Britain, 1962, J. W. Grove, p. 250).

Adam Buick

Material World: China and capitalist property rights (2026)

The Material World column from the September 2026 issue of the Socialist Standard

On 16 July British industrial capital’s representative body, the CBI, gave its somewhat begrudging support to what it had called, on 16 May, ‘an expensive option of last resort’, namely the nationalisation of British Steel. Despite their reservations about potential compensation costs and a (probably) valid fear of a negative impact on future investment, for the moment we can assume that industrial capital is okay with bearing the tax burden of a reported daily subsidy of £1.3m. In the ‘national interest’ of course (tinyurl.com/yc58wxjs).

Nationalisation might be welcome news for British Steel’s 2,700 workers, but it is less than welcome in China, if we are to judge by the 17 July report on the Global Times website, one of the Chinese state’s English mouthpieces.

According to the site, the Chinese Ministry of Commerce (MOFCOM) is dead against this nationalisation. MOFCOM points out that British Steel is (was) a subsidiary of China’s Jingye Group, and says the British government has undermined Jingye’s ‘legitimate rights and interests’ and is severely damaging Chinese companies’ confidence in investing in the UK’. Somewhat in agreement with the CBI then. MOFCOM is also ‘pledging to take strong measures to safeguard [these] lawful interests’, although they don’t go into details about what these measures might be.

It is clear from the article that the Chinese state supports Jingye’s demand for compensation for its ‘substantial financial investments in continuous operations [and] equipment upgrades’ since 2020. There is also a clear statement that the state will defend the interests of any Chinese company whose UK investments are threatened in future. Again, a position with which the CBI doubtless concurs, and the type of position it would expect the British government to adopt should any of its members be threatened by some uppity foreign politicians.

Let’s pause a minute though. Isn’t the country concerned always referred to as ‘Communist China’ by the capitalist media? Run by the Chinese Communist Party? Filthy Marxists, every last one of them then.

Filthy Marxists pledged to defend the ‘legitimate interests’ of private property – after all, Jingye Group is a privately owned company with 40,000 employees. As it is privately owned, there is no share price but it claims an internationally recognised ‘brand value’ of almost £14 billion, putting it in the top 4 of Chinese steel producers (tinyurl.com/nhe4sv5r).

So ‘Sinified Marxism’, a Marxism tailored to the Chinese context, is defending private property now. Understandable, given that 60 percent of Chinese GDP is created in the private sector. This is why the Private Sector Promotion Law came into effect in May 2025, ‘promoting the private sector […], strengthening legal protections and injecting fresh momentum into a key driver of the world’s second-largest economy’. It ‘aims to optimize the development environment for the sector, ensure fair market competition, and promote the growth of both the private economy and private entrepreneurs’ (Global Times).

We can assume that the CBI would be less begrudging in its support for such a law but it does somewhat contradict the Chinese constitution which tells us that: ‘The socialist transformation of private ownership of the means of production has been completed’. Perhaps steel works aren’t part of the means of production – could this be a case of ‘socialism with Chinese characteristics’?

Leaving that aside for now, what we can’t quite understand, with all that capital washing about, is how that same constitution can state that ‘the system of exploitation of man by man [has been] abolished’. Nor how, beginning slowly around the time the constitution was published (1982), billions of dollars of private capital have flowed into China in the form of foreign direct investment (FDI), peaking in 2021, when $344 billion was invested. Could it be that the foreign capitalists and their fund managers all failed to carry out due diligence, that none of them had studied the economic situation, that they had no idea that there is no exploitation in China, hence there is no possibility of their capital being able to return a profit, the sole aim of capital?

Answer? No, capital is only attracted to China to buy labour power in the expectation that it will generate surplus value – in other words, it goes only with the idea of exploiting the working class – the constitution is just so much tosh.

Let’s take another example, again from the Global Times (3 March 2026). It discusses the state’s plan to increase ‘support for financial development by optimizing preferential tax regimes for funds and single-family offices, attracting global capital convergence. Hong Kong is projected to become the world’s largest cross-border wealth management center in the coming years’. A single-family office, by the way, isn’t for the average family, it’s just for the ones that have so much money that they can afford to employ their own staff to manage their investments.

In other words, the Chinese state is trying to make it cheaper and more profitable for capitalists to gamble in HK’s stock exchange casinos.

What the ruling clique in China has learned is that they have to do exactly the same as any other government – whether of the left or of the right. That is, create conditions in which capitalists are confident that they will be able to scoop up surplus value to their heart’s content.

Quite how long private capital will put up with the Chinese Communist Party supping at its table remains to be seen.

Budgie.

The Common Market Special Survey: 2. The Industrial Power (1962)

From the January 1962 issue of the Socialist Standard

An investment of £2,000 million was the figure recently suggested as necessary for the setting up of an international scientific research centre in Berlin. In the same newspaper the British Electricity Council announced its intention to spend £947 million on generating stations in the next four years. The British Motor Corporation spent £10 million in launching one model—the Austin 7/Miniminor.

In themselves, these three examples have no direct connection with the emergence of the “Common Market.” They are, however, pointers to the scale of modern capitalism. Huge investment and massive production plants are the order of the day. A small sheet steel mill would be economically and technically ridiculous in 1962. Modern plastics, too, such as polythene or nylon, must be produced in vast automatic plants. It is the same story with petrol refining, aircraft production, coal mining, chemicals, shipbuilding, rocket research, and so on; and this matter of size is the real force that has brought the European Economic Community into existence.

E.E.C. is a perfect demonstration of Marx’s statement that capitalism is neither a stable nor a permanent social system. It is driven to expand under the compulsion of inexorable economic laws, gearing up science and engineering to the ever-increasing demands of capital, and forcing human and social relationships into new and arbitrary patterns.

In Europe, particularly, the pressure on national boundaries and sovereignties has been intensifying since the first World War, when Europe started to fall behind America in the race for industrial production and exports. The retention of national units seriously weakened the European capitalists in their struggle for a share of the world’s trade; and since the second World War, which can be seen from one point of view as a German attempt to unite Europe under its rule, it has become obvious that, individually, the European nations are puny and backward by comparison with the American and Russian federations.

E.E.C. is, in fact, very far from being a “good idea ” formulated by European politicians; it is a belated and reluctant acknowledgment of the expanding scale of investment, production and trade.

Steel

Significantly, the first step in the industrial unification of Europe was the setting up of the European Coal and Steel Community in 1952. Coal is still by far the most important industrial fuel, and steel the overwhelmingly dominant metal. Furthermore, the holdings in both industries were already concentrated in a few large blocks, making negotiations relatively simple.

The occupying Allies had limited German steel output to 11m. tons a year. When the restriction was lifted, W. German production rose rapidly to reach 34m. tons in 1960, bringing the total for the Community to 73m. tons. Their exports are co-ordinated in a cartel known as the Brussels Entente handling two-thirds of the world’s steel exports— formidable competition for the British Steel Federation!

Nevertheless, in these boom years for steel, British exports have doubled in the past ten years, and the industry has gone ahead with large development plans at Corby and Margam and Llanwern. A large fraction of this increased capacity is for sheet steel in anticipation of a continued increase in demand from the motor industry. These “strip” mills are barely an economic proposition at under a capacity of a million tons a year. Building a new one is therefore a big step, but unless it strides at this rate the British industry must fall out of the race. The real testing time will come when the boom is over. Then the weight of the Brussels Entente will be decisive.

Unless the British Iron and Steel Federation can break into the European group it can be out-produced and out-priced. Even if it does, the proposed merger between Phoenix and Thyssen in Germany would dominate the group. Indeed, the British steel industry might even be prepared to submit to re-nationalisation in order to wield sufficient power.

Coal

It is a starker version of the same picture with regard to the older and less efficient coal industry. Already a number of Belgian coal mines have been closed down as being uneconomic in competition with German coal. In this country the average rate of profit from coal mining was so low that there was never any real alternative to nationalisation. The National Coal Board, like the true capitalist concern that it is, is to close 15 Scottish pits, involving 5,000 men, next year as part of the attempt to wipe out its £21 million deficit for 1960. It has closed a large number of pits which are unprofitable by modern standards, and the total deficit for Scottish mines is now estimated to have reached £100 million. Contrary to popular belief, the Coal Board does not exist to produce coal, but to produce profits; and so it must cut its losses.

It must do more than this: until now it has been protected from serious foreign competition (even the Steel Company of Wales was prevented from importing cheap American coal); it must reverse the steady shrinkage of exports if it is to survive. They dropped from £61 million in 1950 to £28 million in 1960, largely through uncompetitive prices. By cutting the labour force (by 20,000 in 1961) and by a costly programme of capital investment (£97 million in 1961-2) productivity has been raised from 3-2 tons per manshift in 1950 to over 4-1 tons last year. The National Coal Board claims that it is introducing automatic machinery faster than is being done anywhere else in the world, and that real automation, in the form of robot coal-cutting machinery which seeks out the coal for itself, will be operating in a British mine before the end of 1962. In a Commons debate on the coal industry on October 24th, 1961, the Minister of Power, Mr. Wood, said that: “It was too early for him to forecast the precise effect of membership of the Iron and Steel Community, but it was felt that it would benefit both the NCB and the consumer. This would automatically confer benefit to those working in the industry.” (The Guardian, 25/10/61.)

The attitude of British coal miners towards this statement is not easily available; but, since their numbers have dropped from over 1,000,000 in the 1920’s to 560,000 in 1961, it is doubtful whether they feel so optimistic about Britain’s entry into the “Common Market,” because, whatever else it involves, it certainly means more ruthless exploitation of every man.

Gas

On November 7th, 1961, the Financial Times published a four-page supplement on the Gas Industry, showing that like the National Coal Board its production and sales had risen while its labour force had been cut by 20,000 in ten years. The Chairman of the Gas Council, Sir Henry Jones, wrote of “gas established again as a growth industry” in spite of the fact that the number of gasworks has been cut from 1,050 in 1949 to 378. During this period gas production has remained fairly constant at about 2,200 million therms per annum, which means that the whole industry has been made considerably more profitable under nationalisation.

The fact is that many new possibilities have opened up for the gas industry in recent years. It has maintained its strong links with the coal industry, especially with the introduction of the Lurgi process of complete gasification of coal without leaving coke. In addition, however, it is becoming more and more tightly wedded to the oil companies. Apart from the gasification of heavy fuel oil, such as is being carried out by the South Eastern Gas Board at the Isle of Grain works, American oil companies are offering shipments of cheap liquified petroleum gas and of naptha. The British Gas industry, however, has at present concentrated on its decision to import shipments of natural methane from the Sahara. This touches the question of E.E.C. very closely because the French are reported to be undertaking the construction of a pipeline from Algeria across the Mediterranean to provide gas for a grid-system throughout the E.E.C.

For the British industry one of the main advantages of being linked to such a system would be the ironing out of fluctuations in demand during the day and, to some extent, during the year. France and Germany already have large underground storage facilities for manufactured gas so that summer production may be saved for heavy winter consumption. In one way or another it looks as though the capital invested in the British gas industry could show considerably greater profit and expansion by being linked with Europe.

Electricity

The British Electricity Authority is the most profitable of all the nationalised industries, having made a gross profit of £18 million in 1960-61; but there is further profit to be made by linking itself with the continent to meet future increased demand.

Apart from its own considerable expansion and storage schemes, the Annual Report of the Electricity Council mentioned the fact that “. . . the cross-channel link with Electricité de France would be coming into commission soon. Because of the difference in the incidence of peak demand in the two countries, 160MW of load could be transferred in either direction with savings to both parties.” This is an arrangement which has been carried through independently of negotiations among politicians about E.E.C. and demonstrates that, however British hearts may feel about loss of national sovereignty and all that, the industrial ties with Europe are strengthening every day.

Ample proof of this last point is given in a report from Turin by Gordon Wilkins in The Observer, November 5th, 1961:

“More British cars may have Italian built bodies as a result of discussions held here this week. One leading British body designer told me it may even prove economical to import Italian-made bodyshells into England, especially if Britain joins the Common Market . . . Pininfarina are making the convertible bodies for the new French Peugeot 404. Bertone are sending coupe bodies to Germany for N.S.U. and B.M.W. Vignale, who have been building a Triumph TR3 body for the Italian market, are planning a TR4 coupe for export. The agreement between Rootes and Carrozzeria Touring for assembly of their cars in Italy may be the forerunner of others. . . . Ghia are doing bodies for the Austin-Healey Sprite, and the latest registration figures show how much the British Motor Corporation have gained by having the A40 built under licence by Innocenti.”

In the same way, Alfa Romeo build the Renault Dauphine under licence, while “Italy’s enormous Fiat interests have car-assembly plants in Belgium and Germany, and expansion plans amounting to hundreds of millions of pounds will put them in all six nations” (Readers’ Digest, July, 1961).

In the metal-using industries motor car manufacture today makes by far the greatest use of mass production and costly automation. It is true that a few small specialist firms still persist among the giants; but million-pound firms like Standard have been shown to be too small to remain independent in the mass market amongst the large federations. Their average rate of profit is too low. Only ruthless standardisation and wider and wider markets can make profitable the immense outlay of constant capital. Now, in Europe national tariffs are preventing the giants from coming properly to grips with one another, as they must, for the dividing up of the market; and so they add their weight to the breaking down of these barriers.

A Crisis

Commentators on the emergence of E.E.C. have said repeatedly that industrial companies will have to “think big” to meet the new situation. Like most of the talk in the press and broadcasting, this masks the real picture. They imply that E.E.C. offers new opportunities for expansion. The truth is much more sombre. Certainly, the Common Market began while Europe was still booming; but if there had been unlimited markets for all there would have been no need for a Common Market.

The truth is that the average rate of profit has been steadily falling, owing to the enormous rate of capital accumulation (these huge investments in production plants that have been mentioned); and the European Common Market is not a fraternal gathering but a battle ground. The survivors in this new phase of European capitalism, therefore, will be the ones who are already big.

In the fields dealt with, however—coal, steel, gas, electricity and motor cars— the majority of small competitors have already been ousted in each European country: they are not available to be sacrificed when the competition becomes merciless. As early as October, 1961, the Daily Express, which has always put out propaganda for Empire and against Britain’s overtures to E.E.C., began to make great play of the fact that the current boom in Europe was falling off, insisting that therefore Britain should not join.

But these are precisely the conditions under which Britain will be forced to join, in order to give its giant capitalist undertakings chance to survive by overpowering weaker giants in Europe. Of course, there is no certainty that British capital will come out of it less bruised than its competitors, and this is the reason for all the uncertainty and haggling. The greatest giants of all, the major oil companies and the largest of the steel and chemical firms, can only gain in the long run. But, of course, they are already international organisations. The emergence of the European Economic Community is the political admission of the economic fact that a sufficiently great change in quantity has become a change in quality.

The icy winds of competition occasionally referred to are spoken of lustily as though they are to be a tonic for our health. Members of the working class hearing such windy talk on television ”reports” may even be persuaded that it will be a ”good thing” if some of the industrial “inefficiency” is to be “weeded out.” They can only be thus tempted into forgetting their own position as workers as long as they persist in believing that all this production is carried on in capitalism for the purpose of supplying people’s needs.

The Socialist knows that it is not so. He also knows that whichever capitalists turn out to be the winners in the growing struggle, workers can only expect to suffer in the upheaval and to be more thoroughly exploited in the future, whether they call themselves Britons or “Europeans.”

S. Stafford

Finance and Industry: For the record (1963)

The Finance and Industry Column from the December 1963 issue of the Socialist Standard

For the record

Britain's industrial revolution was powered by coal and forged in iron. It was the Darby's of Coalbrookdale, a family of ironmasters, who pioneered the technique of first coking the coal which in turn enabled the use of English ores; in less than half a century, coal and iron between them had transformed the face of England. Since then coal has lost ground to oil, but iron and steel continue to dominate the economy of world capitalism.

It was iron that provided a material strong enough to stand up to steam and so paved the way for Watt’s engines. Industry was able to get away from the rivers and streams and its dependence on waterwheels. Hundreds of miles of canals were built in no time to cope with the increased demands of the blast furnaces for coal. Roads were built to carry away the manufactures.

In the I850's, iron gave way to steel with the developments introduced by Bessemer and Siemens of using “blowers” to raise the furnace temperature and get rid of the impurities in the iron. Since then there have been further improvements, using electric furnaces for special steels and, very recently, the use of oxygen instead of air for the blast. At the same time, as the industry has grown bigger and bigger, more use has been made of the integrated plant principle whereby all the processes of steelmaking are concentrated on the same site- hence the growth of the huge complexes which are the dominant feature today.

These installations need vast capital resources. United States Steel, the biggest producer in the world, has a share capital of over £1,000 million and its nearest rival. Bethlehem Steel, more than £500 million. The world is now scoured for iron-ore; mountains of it are literally taken away and transported thousands of miles to the furnaces. Marvels of engineering construction are built to load and unload it and bulk carriers of up to 100,000 tons ply a ferry service across the oceans. More and more, the furnaces are migrating to the coast to eliminate transport costs—the result is the huge new plants at Newport and Dunkirk, and the proposed giant complex at Rotterdam.

In the Darby’s time, a firm was big if it produced a thousand tons of iron a year; nowadays it is in economic danger if it produces less than a million, or even two million, tons. Steel is still one of the pillars of capitalism’s economy—it is still the barometer that can forecast whether the economy is set fair, or there are storms ahead, or just a period of doldrums.

As usual under capitalism, the tendency is towards bigger and bigger units. There are still absorptions and amalgamations going on, and more and more does an annual output of 2 million tons seem the minimum unit for present day efficiency and competitiveness. In the following table, showing the “top twenty” producers in the world excluding Russia and China, the minimum is actually about 2$ million tons a year.

The most striking impression from the figures is, of course, the overwhelming preponderance of the American firms, particularly U.S. steel, which on its own has a greater output of steel than the whole of the U.K. It is also interesting to note the apparently greater fragmentation of the British industry. United Steel is the only British firm to appear, in the table and there is only one other, the Steel Company of Wales, in the next ten, whereas there are three further German companies, three French, and one Japanese.

We hope to take a further look into the international steel industry in a later issue.

Rivalry v. Safety

We do not need to labour the point about the intense competition existing at present in the aviation industry. What with the excitement over Australia’s decision to buy American TFX's instead of British TSR-2's, the race between the Anglo/French Concord and the U.S. Mach 2 airliner; and the current struggle of B.A.C. to get their V.C.-10 into the air commercially before the Douglas D.C.-9; the aeroplane manufacturers must really be having a worrying time of it.

It was thus a major setback for B.A.C. when their prototype V.C.-I0 crashed recently, apparently as a result of trouble with the tail assembly.

As is well known, the V.C.-10 carries on a technique, engines set well back in the rear, that was developed originally by the French company, Sud-Aviation, with their Caravelle. And it is with Sud- Aviation that B.A.C. are developing the new supersonic Concord.

It has also been known for some time that the V.C.-10 has been running into snags with this particular tail assembly—only a few months ago B.A.C. announced publicly that they had had to modify it. Strong rumour also has it that the Caravelle went through similar troubles in its early development stages. What more natural, then, that B.A.C. should ask Sud-Aviation—after all, their collaborators in the Concord—for details of their earlier experiences of putting engines under the tail?

And what sort of an answer do you think they got? A very dusty one, according to an Insight report in the Sunday Times of October 27 -“Sud-Aviation would disclose nothing.”

A few months later, the V.C.-10 crashed, killing all its crew. There may conceivably be other crashes before the makers discover what is happening to the tail assembly.

In the meantime, the Caravelle flies on, with hardly a competitor. And the longer the V.C.-10 takes to get commercially off the ground the longer will Sud-Aviation enjoy this happy state of affairs. Co-operation may be all very well but under capitalism one must be very careful not to carry it too far.

Stan Hampson

50 Years Ago: When the Workers Ran the Factories (2001)

The 50 Years Ago column from the November 2001 issue of the Socialist Standard

Recently the Trade Unions International of Metal and Engineering Workers (which is part of the World Federation of Trade Unions) issued a pamphlet describing how the Italian steel workers refused to allow the owners to close steel factories during 1949 and 1950, and instead continued at their work without wages and without professional management, electing temporary managers from their own ranks. While the workers ran the factories themselves, they built ships, aeroplanes, furnaces; they improved efficiently; and by introducing new processes, they economised considerably on production costs–for example, at the Ilva-Bolzaneto works at Genoa, they reduced the price of a kilogram of metal from 44 to 28 lire, and in order to economise on oil, they invented a process which saved 500 kilograms of oil in every eight hours of work.

It Can be Done

This episode in Italy has a number of useful lessons for all socialists. First, that workers can run the factories by themselves; and that they can not only maintain but improve efficiency. Second, that this kind of movement, which consists of industrial action alone cannot permanently put the workers in control of the factories. As the pamphlet itself says, “there was no point in cherishing the illusion of stable and lasting working-class management in a capitalist regime.” Like all such experiments, this one would have ended immediately had the Government decided to employ resolutely the coercive forces at its disposal. Italy thus reinforces the lesson of Russia after 1917, where the system of worker-elected managements, which operated for a short time after the Revolution, was soon abolished by the Bolsheviks in favour of State-appointed managements when the former system was seen to be incompatible with State-capitalism.

[From “Passing Comment”, Socialist Standard, November 1951]

Running Commentary: Man of Steel (1979)

The Running Commentary column from the November 1979 issue of the Socialist Standard

Man of Steel

Is your boss a bastard? Does he refuse to accept anything but the highest standards and does he berate you when you produce, as you often do, less than the best be it engineering, sales or documentation?

If he is, then do not be too hard on him; he may only be doing as he is told. Perhaps he was present at the September meeting of the Steel Industry Management Association when Sir Charles Villiers, chairman of the British Steel Corporation, advised all managers to be “bastards” to any of their workers who turned out sub-standard work.

It may be that Villiers is a sensitive man. BSC is not famous for being a vastly profitable concern and he, as its £30,000 a year head, is often under fire from the press. A little aggressiveness towards his employees, he may have calculated, could do his reputation no harm.

Or perhaps he meant it. Villiers is not just a representative of the capitalist class—he is a member of it. Educated at Eton and Oxford, a member of the exclusive Beefsteak Club (where none of his steel workers would be allowed past the doorman), living in Eaton Square (where none of his steel workers could afford much more than the space for a garden shed) and, before taking over at BSC. chairman of merchant bankers Guinness and Mahon.

Yet his speech was a curious thing. Firstly, what if all workers took him at his word and refused to turn out anything less than the best? What then would happen to capitalist industry, which turns, out mountains of trash when it is trash which pays?

Secondly, what was a member of the capitalist class doing, being so frank about class relationships under capitalism? The idea that we all live in a happy, united society of common interests is hardly best served by such a hard headed attitude.

He who lifts a comer of the truth about these matters will not be popular with the other members of the ruling class. Will Villiers soon be crying all the way to the Eaton Square dole office?

Pym's number one 

Another member of the ruling class to be offering some urging to workers recently—although with a rather different attitude—was Sir Francis Pym and all his friends will hope to see this ambitious politician's keenness rewarded.

Pym also went to Eton, then on to Magdalen College, Cambridge. He belongs to Bucks, the Cavalry and the Guards which are not brands of cigarettes but expensive West End clubs. He has a stately home in Bedfordshire. Clearly, he knows on which side of the bread is the capitalists' caviar.

So it is natural that Pym should be anxious to see the working class, who don’t go to posh schools or join exclusive clubs and who live in council fiats or mortgaged semis, readily accept the cuts in their living standards which the Tory government is so busily planning.

But of course Pym is a gentleman so he does not use coarse language. Instead, he hopes to inspire us all; speaking at the recent Manchester Central by-election, he said he thought we are “. . . fighting another Battle of Britain, only this time it is to the Many that we need to turn."

Politicians often use the trick of persuading workers to accept their lot by referring to former military events which are described —at least in British history books — as triumphs. Harold Macmillan was fond of ruminating tearfully on the agonies of the 1914/18 trenches. Harold Wilson, at a time when he seemed to be convinced that he was Winston Churchill, once urged us all to have a little of the Dunkirk spirit.

Both were playing the same game. Both were making pretty speeches about poverty, which is not pretty and which no worker should willingly accept.

It is likely that Pym was not aware of one very important implication of his speech, when he talked about the Many. It is, in fact, the Many who really matter. He did not appeal to the the capitalist minority to fight another Battle—to look up their shares in the Financial Times more assiduously, to buy extra large estates in the country, to lounge with greater intensity in the tropical sun. He addressed his plea to the majority, to the people who count because they produce everything and who run capitalism from one end to the other. He was talking to the working class.

And the workers, who are on the receiving end of government policy should beware. They should look with complete scepticism on all politicians' blandishments and know that—like Passchendaele, like Dunkirk—there is something nasty in store for them.

China syndrome

It must be very difficult being a supporter of the idea that socialism exists in China, when you get so little help from that country to back you up.

One after another, news from Peking indicates that, far from being a place where the means of production are owned in common, where there are no classes, no money and where there is free access to wealth (not that such a state of affairs is possible in any one part of the world), China is steadily seeking a prominent place among the powers of world capitalism.

Recently, for example, the Chinese government has signed some big trade agreements with the Western capitalist states; symbolic of this has been the normalising of its relations with the United States.

Now comes the news that China is trying to join the International Monetary Fund and in line with this is making what are meant to be reassuring noises to any capitalist thinking of investing in that country.

Chinese Vice Premier Gu Mu said in Peking recently that China is preparing new foreign investment regulations which would make it more attractive to investors. He added that overseas investors need not fear another “cultural revolution”—in other words that there will be political safeguards for such investments.

If China gets into the IMF it will be able to borrow from the World Bank, something it may see as essential if it is to expand its export trade into new areas. This comes as an emphasis to the fact that China is a rising threat to the more established capitalist powers—and may one day assert this threat, like Germany and Japan, by emphatic military means.

It also comes as an embarrassment to those who cling to the unsupportable idea that there is something different in China, something worth working class support, even sacrifice. The facts say otherwise; capitalism exists in China and increasingly makes no bones about it.

The Schuman Plan and the International Control of Basic Industries (1950)

From the July 1950 issue of the Socialist Standard

The French government has announced that six European countries would go ahead with negotiations on the Schuman plan to pool coal and steel resources—without Britain.

The British Government wanted a preliminary conference of Ministers on procedure. France turned this down.

The daily press in the last few months have given the Schuman plan a great deal of publicity. The British government has been reluctant to commit itself, and by requesting that discussions be held in order to clarify the practical application of the French proposals, hoped to avoid friction with the French government without having to either commit itself or give a complete rejection of the plan.

The chief point of the Schuman plan is the scheme to pool the coal and steel resources of western Europe.

The British Labour Party in April, 1950, published a pamphlet on behalf of the so-called International Socialist Conference which met at Witten, Ruhr, Germany, in March, 1950. The pamphlet, an individual work by W. Fienburgh, is entitled “International Control of Basic Industries.”

On page 2 he states under the heading “ The present position in the basic industries” the following:—

“Europe is nearing the end of a period during which, as far as the basic raw materials are concerned, demand has outstripped supply." On the same page he states “ . . . there is ample evidence that the main producing nations are expanding towards export targets which, in sum, exceed the import programmes of the importing nations of Western Europe and may exceed also the effective demand anticipated from the rest of the world. This raises the possibility of a restriction of expansion and production accompanied by a price war in European and world markets.”

He goes on “. . . To avoid these consequences it is essential, before the event is upon us, to make some approach to inter-European organisation in the basic industries.”

After stating that today, supply and demand in coal and steel at least are almost in balance, and talking about the possibility of a restriction of expansion and production he states on page 3, under the heading “The Aims of International Control,”—“International control should be designed to ensure that the basic industries were expanding fast enough and efficiently enough to meet the maximum demand for the product in the whole area, plus whatever export volume is needed to meet the over-all Western European balance of payments problem. Assessment of demand should be based upon the maintenance of full employment.”

If the supply has caught up or nearly caught up with the demand on the market, why all the plans for International control to ensure that the basic industries were expanding fast enough? One of the ideas as explained later in the pamphlet is “To gain the advantages of Rationalisation,” that is the most economical use of resources leading to greater over-all efficiency and lower costs.

This is the real reason of the plan. Talk of ensuring that the basic industries are expanding fast enough is put in to make the scheme attractive to workers seeking employment or who are fearing losing their jobs. For on page 4 he writes: —

“International control should ensure that basic industries do not expand production faster than the ability of the rest of the industry to consume the product.”

Like most members of the Labour Party he believes that by state control the government can run the economic life of the country according to plan.

Despite their failures they still draft new plans as fast as the old ones prove their bankruptcy. W. Fienburgh puts the cart before the horse when he states “The full employment economy is expansionist. The unemployment economy is restrictive.”

In actual fact the expansionist economy tends to lead to full employment, but when after a war the shortages are made up by the expansionist economy, capitalism reverts to the restrictive economy which leads to large scale unemployment.

The conclusions given by W. Fienburgh at the end of the first half of the pamphlet are interesting. Firstly he states:—

“It should be firmly noted that we cannot hope, through international control of basic industries, to impose socialism on countries which have not accepted it at the moment.” The fact that Socialism cannot be imposed on countries which have not accepted it is correct. However when a member of the Labour Party speaks of socialism he means state capitalism. Secondly he states ”. . . that each country should run its economy with the objective of maintaining full employment . . .”

It should be apparent that the economy of the country is not run with the objective of maintaining full employment, but is run with the idea of making a profit for the members of the capitalist class.

The competitive nature of the capitalist system, the economic rivalry between the national states for raw materials and markets for the commodities they produce, foredoom all the plans for international control of the basic industries to failure.

To sum up the scheme by an understatement, we quote the final sentence on page 8 of the pamphlet. “On balance the prospects of immediate internationalisation seem dim.”

D.L.

Finance and Industry: U.S. bogy (1964)

The Finance and Industry Column from the July 1964 issue of the Socialist Standard

INVESTMENT

U.S. bogy

The recent Chrysler/Rootes deal, discussed elsewhere in these pages, has again revived the usual talk of American financial encroachment—not least among our Labour politicians. They raised a similar sort of fuss, it will be remembered, when American Ford increased its stake in U.K. Ford from 55 to 100 per cent, a few years ago.

Similar heartburnings were caused in France last year when Chrysler took over control of Simca, and the French government actually stepped in to put to stop to the deal when they heard that U.S. General Electric was after a stake in Machines Bull, the big electronics firm. But the significant thing to note about the last affair is that the French government eventually relaxed their opposition and allowed a modified arrangement to go through.

For the facts are simple enough. American capitalism is in search of outlets for its capita], and in many cases European firms have not sufficient resources of their own to finance their expansion. Yet expand they must if they are not to be left behind in the race for sales and profit. Bootes with Chrysler’s resources behind them are a far different proposition than they were on their own—for years, in fact, the speculation has been whether they could really survive for long against the bigger units of BMC, Vauxhall, and Ford. Similarly, Machines Bull plus General Electric is in a vastly stronger position to face up to IBM and Elliott than it was on its own. To see the facts as they really are, it is only necessary to observe that IBM’s turnover is twenty times that of Machines Bull; that National Dairy Products, an American milk firm, has a bigger turnover than I.C.I.; that United States Steel produces more steel than the whole of West Germany; that the turnover of General Motors is greater than the whole of the “gross national product” of Holland, and its profits bigger than the national product of Eire.

One way or another, American capital will keep coming into Britain and Europe. Capitalism hates a vacuum. As usual, it is bigness that counts, and bigness that will win the day. And, just as important for European capitalism, if one country refuses it—it will go elsewhere. Modernisation of the Moselle 

STEEL

The Moselle canal

The recent opening of the Moselle canal is a wonderful example of the hard economic facts behind politics.

Just as German capitalism always had envious eyes for the iron ore of French Lorraine, so did French industrialists seize every opportunity to lay their hands on the iron and coal of the Saar. In 1920, the Versailles treaty gave France control of the Saarland for 15 years—as well as handing back Lorraine. In 1945, again, the Saar was incorporated in the French zone of occupation; later, in 1947 it was set up as an independent state though linked economically to France. In 1950, France granted it complete self- government—but in return for its coal output (15 million tons) for fifty years.

Came the Common Market. In 1956, French capitalism was forced to play yet another hand. In return for the handing back of the Saar to Germany, the latter was to participate in the canalisation of the Moselle. By this hard bargain—for both sides—barges of 1,500 tons are now able to travel 170 miles from Thionville to the Rhine, and French steel will be selling more cheaply in South Germany than even Ruhr or Saar steel. The greatest opposition to the canalisation of the Moselle came from the Ruhr steelmakers—it is easy to see why.

So determined was France to get the project through, and so reluctant the Germans, that even with the Saar thrown in the French government had to pay £48 million towards the project, compared with Germany’s £22 million. But already they are planning to extend the canal southwards to Metz and Nancy. Eventually, the plan is to link the Rhine with the Rhone and form one great waterway between the Mediterranean and the North Sea. With huge barges plying along this thousand mile canal, transport costs will be cheapened for French industry in particular. Already German, Dutch and Belgian shippers are competing with their French counterparts for traffic, and the German and French railways threatening to cut their tariffs.

Under capitalism the big get bigger, and the small are forced more and more to the wall. At first sight, there seems little connection between Chrysler moving into Rootes and 5,000 ton barge convoys moving along the Moselle. But the connection’s there alright. Just call it size—plus the prospect of profit.

Stan Hampson

So They Say: They Pretend Malnutrition, too (1974)

The So They Say Column from the March 1974 issue of the Socialist Standard

They Pretend Malnutrition, too

A new addition to saloon-bar political mythology has arrived. It joins the Man Who Gets Twice as Much on Social Security as he does Working, the Black Man Who Buys Kit-E-Kat for his Sandwiches (yes, my grocer told me), the Eight Workmen Who Came and Lolled About Smoking When All I Wanted was a Screw Tightened on my Cooker, and so on.

This happy arrival is the Family Only Pretending to be Homeless. Its career was launched in the London Evening News on 18th January:

A housing chief has announced a clampdown on the “phoney homeless”. Some families are suspected of faking evictions to gain council homes. Only couples with children, facing complete family breakdown, are now likely to get official help in Hertfordshire.

Presumably you must spend a minimum of three nights on the pavement and get down to six stones per adult member of family; otherwise you’re only pretending. A family with a room to itself that wants a whole council house are sheer Epicureans, and we don’t stand for them in Hertfordshire. Take it from me, councillor, my nephew’s milkman knows this lot

No, it's Different Now

One trouble with the working class is its memory. How can you expect to get on and please the government if you forget the right things, like standing up for the Queen, and remember the wrong ones, like unemployment and politicians’ promises?

Thus, the masses have watching TV films about the war in which the Germans are shown as the hateful enemy. In the last week of January Die Welt published an article by its London correspondent Christian Ferber protesting about this. Sure enough, he was supported. A Reverend, among others, wrote to The Guardian suggesting “restoring the balance” with some programmes about good Germans in the war, specially POWS who “were permitted to visit churches and other organizations”,

People must really arrange their memories better. Saying they had to hate the Germans for six years is no excuse. If villains are shown today they should be Russians. But in the war weren’t they glorious allies or something? There you go again.

Please Spare a Copper . . .

Readers of the financial pages cannot fail to notice that profits and dividends show little sign of wilting because of the crisis. Some companies are doing well out of it. A typical example was shown in The Guardian's business section on 6th February. Under the heading blessing in disguise the buoyant position of Central Wagon, the steel stockholding and hydraulic equipment group, was described:

The company’s sales in January this year are 50 per cent up on the monthly average for the previous year . . . When the 1973 results are announced, the profit is more likely to be around the £900,000 mark—well beyond the company forecast of about £670,000 . . . Central Wagon is confident that it will produce still higher profit in 1974 —even after allowing for the miners’ strike.

But when times are bad, are they not bad for the owning class too? Were there not tales in the nineteen-thirties’ depression of ruined rich men queueing to throw themselves from high buildings? Untrue. Britain in the Nineteen Thirties by N. Branson and M. Heinemann (1972) says:

True, profits fell in the slump years (by 30 per cent at the lowest point, in 1932), but since a higher proportion of profits was paid out in dividends, shareholders’ incomes fell much less than this, while income from rent and fixed interest stocks remained more stable in spite of the fall in prices.

. . . Figures in the British Association’s Britain in Recovery, based on Colin Clark’s estimates, suggest a fall of 9-11 per cent in consumption expenditure of those with incomes over £250, from 1929 to 1933—which was almost certainly less than the fall in prices.

. . . for the Clerical Hat

Reach for your handkerchiefs. The Guardian of 8th February told the harrowing story of Britain’s underpaid vicars.

The [Church] commissioners, in a report to the General Synod, the parliament of the Church of England, say the average pay of the 9,000 vicars last November was about £35 a week. In addition, they are provided with a house free of rent and rates, but many have to meet the expenses of doing their job, which can be as high as £4 to £5 a week.

How sad for the clergy to have to put up with the austerity they urge on others. The world is too materialistic.

Voice From The Back: The benefits of globalisation (2001)

The Voice From The Back Column from the December 2001 issue of the Socialist Standard

The benefits of globalisation

“America’s steel industry is in a mess; only a week ago, a veteran foundry, Bethlehem Steel followed two dozen of its brethren into Chapter 11 bankruptcy . . . The company blamed its plight on a tide of cheap imports and this week Pittsburgh-based US Steel announced third-quarter losses of $23 million. …. President Bush in June announced he would take action under section 201 of the Trade Act of 1974, an obscure law that permits global safeguards to industry. Unlike anti-dumping measures which require proof of unfairness, section 201 permits the erection of tariff barriers to provide temporary relief from import competition.” (Times, 24 October)

So, behind all it’s bombast about free trade and the benefits of competition, the US government reveals yet again a truism about capitalism. Capitalists are in favour of free trade when they are winning but against it when their competitors are winning.

It’s a dog’s life

Something of the madness of capitalism in general and post-disaster New York in particular can be gauged from Chris Ayres’s Wall Street Diary in the Times (25 October).

“A bomb-sniffing dog can take as much as $2,500 (£1,760) back to his kennel for a 16 hour shift. With the dogs working seven days a week, this adds up to an impressive $912,500 per year.”

A great deal more money than the wages of the heroic New York firemen who perished in that recent disaster, or indeed, for that matter, any of our readers.

It ain’t half hot, mum

In this column in May we reported that British police forces were interested in the development of an American crowd control vehicle that zapped demonstrators with microwaves. The good news for control freaks everywhere is that the Air Force Research Laboratory (AFRL) in New Mexico have recently completed tests.

“The Air Force now wants to use this Active Denial Technology (ADT), which it says is non-lethal, for peacekeeping or riot control at “relatively low range” – possibly from low-flying aircraft. … AFRL says that the 3 millimetre wavelength radiation penetrates only 0.3 millimetres into the skin, rapidly heating the surface above the 45 degrees C pain threshold. At 50 degrees C, they say the pain reflex makes people pull away automatically in less than a second – it’s said to feel like fleetingly touching a hot light bulb. Someone would have to stay in the beam for 250 seconds before it burnt the skin, the lab says, giving ‘ample margin between intolerable pain and causing a burn'” (New Scientist, 29 October).

Wow, is this tempting, or what, for repressive regimes everywhere? Burn, baby, burn.

Gerry in Wonderland

“When I use a word,” Humpty Dumpty said in rather a scornful tone, “it means just what I choose it to mean – neither more nor less.” A similar disdain for language would seem to be shared by Lewis Carroll’s character in Alice in Wonderland and Gerry Adams.

“Mr Adams said, ‘The IRA is not a terrorist organisation. The name terrorist is bandied about willy-nilly. Clearly what happened in the USA recently was a terrorist act where civilians were deliberately targeted. In any war terrible things were done. In my view the IRA has never deliberately targeted civilians'”.

Pressed on whether the IRA had never placed bombs in shopping districts he said, “Well, it depends, it depends, you see.” He then added: “It’s quite academic.” The Herald (6 November)

Not really all that academic though if your kid has been blown up by some mad zealot, is it, Gerry?

A strange democracy

In an apparently surprising turnaround Michael Bloomberg was elected Mayor of New York last month. Surprising in that he was standing as a Republican in a city where five out of six voters are registered Democrats. Surprising also in that until about a year ago he was a Democrat. He has had no previous political experience Blatantly he only became a Republican to stand for mayor and used the campaign slogan “A leader not a politician.”

His 51 percent share of the vote becomes less surprising however, when you realise that Mr Bloomberg is a billiomaire and spent a staggering $60 million on his campaign. In other words he bought the office of Mayor of New York. A strange “democracy” indeed.

Praising Karl Marx

Socialists are used to the works of Karl Marx being dismissed or ignored by capitalism’s academics, so it is a pleasant change to read on page 166 of Steve Jones’s Almost Like A Whale a brief compliment to Marx:

“Karl Marx got it (as usual) more or less right: ‘what distinguishes the worst architect from the best of bees is this, that the architect raises his structure in imagination before he erects it in reality’. His statement brings out the pragmatic nature of evolution, in a hive or anywhere else. Bee society has no plans.”

From rats to riches

A short news item from  Rio de Janeiro speaks volumes about the ingenuity of the working class and the madness of capitalism. “Rats in the Brazilian city outnumber human beings ten to one and people are being offered about £1.30 for every 2lb of dead rat found. Officials are using poison and will collect carcasses – despite fears that poor people will begin rearing the rodents.” (Times, 10 November).

Sting in the Tail: Virgin Gives Up Sex (1990)

The Sting in the Tail column from the August 1990 issue of the Socialist Standard

Virgin Gives Up Sex

Saw on Teletext that the Communist Party (CPGB) is to consider winding-up and will discuss a paper which argues that "Marxism is no longer a credible philosophy".

This is rich because these "communists" never accepted Marxism anyway, embracing instead the anti-Marxist theories of Lenin.

For the CPGB to now consider ditching something it rejected nearly 70 years ago is entirely consistent with its history of theoretical ignorance and confusion.

Nature or Nurture

At a recent Socialist Party outdoor meeting in Glasgow a young man in the audience insisted that it is human nature for people to be competitive.

If this is true then why all those takeover bids aimed at getting rid of competition? For example, in Edinburgh the chairman of Hearts FC tried to remove rivals Hibernian in this way.

The USA has its anti-trust laws and Britain has has Mergers and Monopolies Commission. Don't they know about human nature?

And if people were naturally competitive then organisations like the National Front would be unable to play on fears that immigrants are competing for "British jobs".

People are certainly competitive sometimes but that is entirely due to social conditioning and not so-called "human nature".

Impossible Dream

British Steel's plan to close Ravenscraig strip-mill in Scotland has produced the inevitable demand from the steel workers that their jobs be saved.

But since they accept that the means of life be privately instead of socially owned then what do they expect? A capitalism in which nobody loses his or her job and where the owners allow their enterprises to be run for the benefit of the workers?

Workers all over the world share the illusion that security can go hand in hand with private (or state) ownership. Until they get rid of that notion then capitalism remains secure.

God and Mammon (1)

Dr. Johnson may have been correct when he said in 1775 "Patriotism is the last refuge of a scoundrel", but to judge by the events of 1990 it would seem that Religion is a fairly popular refuge for scoundrels too.

Imelda Marcos, widow of the late unlamented dictator of the Philippines, President Marcos, was recently acquitted by a jury in New York on fraud charges.

Mr. Francisco Tatad, who was a spokesman for her husband says she is, "a woman transformed by suffering, in quality and substance. God in his infinite mercy has blessed her."

(The Economist 7 July)

Considering she was charged with stealing $200M from the Philippines and using the money to buy jewellery, paintings and Manhattan skyscrapers, God has certainly blessed her.

God and Mammon (2)

In the same issue of The Economist we find more evidence of the religious refuge for scoundrels in the story about the disaster in Saudi Arabia, where more than 1,400 people died during the Haj, the annual pilgrimage to Mecca.

Answering critics about his organisation of the Haj, which resulted in these people being crushed in a tunnel (according to some eye-witnesses caused by a panic setting in after the failure of the air-conditioning), King Fahd of Saudi Arabia was extremely philosophical about the disaster.

"It was God's will, which is above everything. It was fate. Had they not died there, they would have died elsewhere, and at the same predestined moment."

Blessing the dictator's widow who has just ripped-off $200M and condemning 1,400 devout believers to death in an underground tunnel truly the ways of the Lord are mysterious.

"Fair" Competition

One of the myths about privatisation is that it leads to more competition. One of the examples of this is British Airways.

The reality is somewhat different from the myth. For a start BA took over their chief domestic rival British Caledonian and now they are complaining about the government decision to allow American Airlines landing rights at Manchester with an onward connection to Frankfurt.

BA could, of course, be accused of trying to prevent more competition but chief executive Sir Colin Marshall insists that all they want is fair play. Otherwise there is a danger that the huge American carriers with their big protected domestic market behind them could, in time, swamp the smaller European airlines.

(Glasgow Herald 11 July) 

The appeal for fair play in the market place is a pathetic falsehood when you realise that BA have already entered into agreements (currently being investigated by the European Commission) to protect themselves from competition in Europe.

BA is also put out by the official response to its proposed tie up with Sabena and KLM to form hub-and-spoke operations based on Brussels which it says would be to the advantage of consumers in the UK regions. The hub-and-spoke idea came from the USA where short-haul routes feed into a central hub which handle the onward long-distance flights.

The BA claim that such an arrangement would be of benefit to UK consumers would appear to be very altruistic until you realise what the hub-and-spoke arrangement has led to in the US.

The BA plan would mean more continental destinations being available for regional airports, but the American experience does suggest it could reduce competition. De-regularisation in the US has not, in fact, stimulated as much competition as its proponents thought because individual airlines have come to dominate traffic at their hub.

The Life of Brian

The Scorpion's Nest

1st August

To Brian Walden, 

TV Presenter, 

ex Labour MP 

now rabid Tory

Dear Mr. Walden,

We read in The Sun (3 July) your confession that you "never believed in Socialism". That was very honest of you but we wonder if you were ever as honest with the Labour Party dupes who chose you as their candidate.

Anyway, we were hardly surprised by your admission, or your claim that most Labour MPs you had known didn't believe in socialism either. The truth is that none of you know anything about socialism and think it merely means Labour administration of capitalism.

There is a long line of self-seeking, job hunters, from Ramsay MacDonald down to the Gang of Four, who used the Labour Party for their own sordid ends and ditched it when it no longer had anything to offer them.

Your place of honour among them is assured.

Why be Efficient ? (1975)

From the July 1975 issue of the Socialist Standard

We have all heard Trades Union leaders on television blaming British management for inefficiency — claiming that this is the root cause of “our economic difficulties”. To most people the word “inefficient” means something bad and “efficient” means something good, so they are prepared to believe this claim. It also seems to be in line with their personal experience.

If you intend to erect a fence around your garden because you cannot afford to pay someone to do it, you will soon discover (if you did not know it already) that the most efficient way is first to cut all the timbers to their correct sizes, then to drill all the holes in the timbers, then to dig all the holes in the ground and then to mix all the required amount of concrete — and so on. This, in miniature, is mass production, as compared with performing each process over and over again as you proceed around the garden. Why is this called “being efficient”? Because it saves you labour time — your labour time — and after a hard week’s work this is of benefit to you and your family.

It is perhaps natural to transfer this idea to the larger world of industrial production and to conclude that greater efficiency in the factory will also be of benefit to you and your family. As things are at present, nothing could be further from the truth. Let us quote from a report in The Times of May 6th.

The British Steel Corporation’s plan is to increase output at its low-cost general steel plant at Scunthorpe and strip mill plants at Port Talbot and Llanwern, with the general steel plants in Scotland being supplied with their ingots from Ravenscraig. The effect of this will be to trim between 7,500 and 10,000 jobs in the general steels division and 9,000 to 10,000 jobs in the strip mill division (Our italics).

The above-mentioned plants are obviously more “efficient”, have more streamlined production processes and more up-to-date machinery (like using a power drill to make the holes in your timbers for the fence). But is all this efficiency of benefit to the workers who will become unemployed — or their families?

Who then does benefit by greater efficiency in industry? Someone does or it would not be considered worth striving for. To answer this question we have to understand in broad terms the economics of capitalist production.

The owners of factories, whether they be private companies or state enterprises, purchase raw materials or partly processed materials, together with plant and machinery. They then employ the abilities of

(from opposite) a labour force to produce finished materials or goods. These are then sold on the national or international market and there is a margin of profit for the shareholders or the investors in Government stock. This profit is not plucked out of the air. It represents the difference between the wages and salaries paid to the workers in the factory and the value of the work they have actually performed. Where else could the profit come from? Why do employers of labour try to minimize wages? Why do they use mass production methods? Why do they introduce better machinery? The answer is obvious: minimum wages, less labour time or fewer workers means a smaller wage bill. A smaller wage bill means a larger difference between costs of production and sale price — equals more profit.

All this is called “efficiency”. But it is primarily for the benefit of the shareholders, not the workers in the factory. For them it may, as now, be very much to their disadvantage.

The above quotation from The Times is part of an account of a meeting between a TUC committee and Mr. Wedgwood Benn, the Secretary of State for Industry. The account is concluded as follows:

Mr. Benn, the members of the (TUC) committee said, had been sympathetic and they had told him that in their committee’s view the corporation’s proposals at this stage were completely unacceptable.

So, closing down inefficient plants is now completely unacceptable to Trades Union leaders.

But there is still one more question to be answered. Why were these inefficient plants not closed down or improved long ago? Simply because the demand for steel was such that, overall, a very handsome margin of profit was attainable in the past at the market prices the industry could then command. Now there is worldwide overproduction and fierce competition between producers. The only way to compete is to be more “efficient”, that is, to cut labour costs. It is difficult to see what the TUC committee can do about that.

But there is something the workers can do about it. They can consider a system of production and distribution in which steel (and all the other things they require) is produced to the extent that they need it — and not to the extent that it can be sold at a profit on a competitive market. Such a system is what we mean by Socialism, not Mr. Benn’s nationalized British Steel Corporation or Mr. Heath’s Imperial Chemical Industry.

Let Mr. Benn and Mr. Heath answer one question: why should workers be unemployed when they need the wealth that industry (and agriculture) can produce?

Under Socialism as we mean it, and as the word originally meant, workers would be working for themselves — like the chap fixing a fence around his garden. Then it would be worthwhile being efficient.

John Moore

A British Trust Gets Bigger. (1905)

From the February 1905 issue of the Socialist Standard

The Distillers’ Company, Edinburgh, have intimated that they have concluded an agreement with United Distillers (Limited) of Belfast, whereby one-half of their shares will pass to the Distillers’ Company and make a further issue of capital to meet the purchase price. The United Distillers (Limited) belongs to three of the largest grain distillers in Ireland, and the purchase has been made by the Scottish company to complete their control of the production of raw grain whisky. The Distillers’ Company practically control the world’s markets now for this class of whisky, which is chiefly used by blenders. The existing capital of the Distillers’ Company is £1,920,000, and the new capital will make it £2,100,000.

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The baking of bread by electricity should find considerable favour, not only on account of its economy and cleanliness, but because it would afford a rational means of utilising the electric power of a town at a time when it would not be required for lighting purposes—between midnight and midday. Should the process become general, it would be possible to abolish night-work for bakers.—”Commercial Intelligence.”

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Inverary Castle, and the extensive shootings attached, have been sublet by Mr. A. F. B. Cresswell, with the consent of the Duke of Argyll, to Mr. E. D. Jordan, of Boston, an American millionaire, who comes into occupation this summer. Thus the aristocrat succumbs to the power of the almighty dollar, and the plutocrat reigns in his stead.

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Last Monday it was announced from Middlesborough that there will be a reduction of 3d. per ton on the puddling, and 2½ per cent. on other wages in the North of England iron and steel trades during the months of February and March.