Redistribution of Wealth (1960)

From the November 1960 issue of the Socialist Standard

Since the war ended the myth has arisen, carefully fostered and well-nourished by every hack of Fleet Street and apologist of capitalism, that the rich are no longer as rich as they once were, that heavy taxes are mulcting the poor blighters white and that there is in fact taking place a general redistribution of wealth resulting in greater economic equality. Never an opportunity has been lost to bring to our notice that this film star or that author or the other well-to-do man were being bled to death by taxes and what was left would in any case be drained away by death duties.

So persistently have these notions been nurtured that many workers have actually come to believe them, presumably on the Mein Kampf principle that if you tell a lie often enough it will eventually be accepted as the truth. To those who do so, and still more to those who believe vaguely that some sort of more equitable distribution of wealth is taking place, we draw attention to some remarks and observations recently made in a British Association lecture by J. R. S. Revell, Dept of Applied Economics, Cambridge University. Dealing with the extent to which wealth had become more equally distributed during the first 50 years, he said:

. . . that the figures conventionally quoted greatly overestimated the extent of the redistribution.

Those figures showed that the wealthiest 1 per cent. of the adult population of England and Wales owned nearly 70 per cent. of the total personal wealth in 1911, and that by 1954 the wealthiest 1 per cent. owned around 43 per cent. The figures were based on estimates of personal capital, which used statistics of estates paying death duties as a random sample of the wealth of the living population. They were deficient in several respects and the deficiencies had tended to increase in recent years. That meant that their use would overstate the redistribution of wealth.

Apparently one of the important of these statistical deficiencies, of ”growing importance," as Mr. Revell tells us:

. . . consisted of creating settled property in a particular form known as a discretionary trust. Under that form of properly the trustees had the discretion to pay income to any of a specified class of persons and to distribute the capital when they thought fit. When the person who had been receiving the income died, the trustees merely nominated another person from the specified class, and there was no passing of capital which could attract death duties.

Certainly these capitalists are not going to allow themselves to be impoverished without a fight!

The effect of this and other tax-evading subterfuges is:

. . . that a large slice of the capital from which individual persons—particularly wealthy persons—drew income did not figure at all in an estimate of personal capital derived from death duty figures. It was almost impossible to obtain any statistical evidence on the amount of property which thus avoided death duties. “but it is likely to be large enough to upset any estimates of personal capital."

Earlier in his lecture Mr. Rcvcll pointed out that, conversely, small incomes were grossly overvalued:

. . . because insurance policies represented such a large proportion of the value of small estates; they were valued for death duty purposes at the sum paid out on death, whereas the greatest value which could be put on them in the hands of a live person would be the surrender value. Thus poorer persons, in short, are worth more dead than alive.

Mr. Revell concludes:

Small estates were thus overvalued and large estates were undervalued in the death duty statistics. Since life assurance and tax avoidance had both grown greatly in recent years, the conventional figures for the distribution of personal capital gave an impression that the redistribution of wealth had gone much farther than it really had. There was no means with present statistical knowledge of estimating what the correct figures should be.

Whatever the truth of Mr. Revell’s last remark, there is one incontrovertible fact arising from all this. It is that in 1954 1 per cent. only of the population owned more, probably much more, than 43 per cent. of the total personal wealth in England and Wales.

Ponder a while on this simple fact and it will give quite a close idea of the nature of wealth distribution in our present-day capitalist society.

Max Judd

Passing Comments: Why we don’t get the coal (1951)

The Passing Comments Column from the March 1951 issue of the Socialist Standard

Why we don’t get the coal

The prospect of a coal crisis has produced the usual crop of enquiries about the coal industry. What exactly is wrong with it?

As might be expected, the Sunday Express has the answer. It has gone to the expense of sending a journalist, a Mr. Gwyn Lewis, on a three-week tour of the coalfields. Mr. Lewis has now produced his report: it appeared in the Sunday Express on February 4th.

The article covers nearly thirty-two inches of column-space; and more than three-quarters of it (over twenty-four inches) is taken up with complaints about the idleness of some of the miners. :If every man on the payroll did an honest day’s work the present hardships would have been greatly mitigated.” The article avoids statistics which would give the exact position over all the coalfields: instead, there are vague allegations, interspersed with figures applying only to single pits on single days, which are of no use at all to anyone who wants a true picture of the situation, but which are none the less valuable for propaganda purposes. This is the kind of thing: “In Midlands colliery towns I saw miners’ welfare institutes filled with men playing cards when they should have been working.” There are no details given with the aid of which one could check up on the accuracy of the observation. Which Midlands colliery towns? Which miners’ institutes, and how many of them? What exact number of men is the vague verb “filled” intended to convey? How did the reporter know they “should have been working?” After all, there are some men in a miner’s institute at every hour of the day: in the morning, the afternoon shift men, and in the afternoon and evening, the day and night shift men. Perhaps Mr. Lewis is skilled in telepathy; at any rate, his information did not come from the men themselves, for in his next sentence his complains that “when I tried to get their point of view I could only get ’whose deal?’ and a request not to interfere with the card-playing.”

* * *

Contrast

What a contrast this makes with the recent incident at a club which caters for another class of the population. On the one hand we have a group of miners, spending their leisure hours in their own institute, accosted by a Tory journalist who wants to know why they are not working harder: and all they do is to request him politely not to interfere with the game. And on the other hand a group of “gentlemen” in a London club last month were so incensed with the mere inoffensive presence of a man whose political views they consider too Leftish, that one of them, who learnt his manners at Eton and Oxford, made an unprovoked physical assault on him as he left.

* * *

Duties as Citizens

But to get back to these idle miners. A printed sheet was distributed to every one of them containing a New Year’s message from Mr. Attlee, appealing to him to work harder; but Coal Board officials say it has had no result. A Coal Board assistant director tells this woeful tale: “We tried giving the men lectures on their duties as citizens. Most of them listen, but some call out 'Tell us when you are finished.’ ” The lecturers’ task would probably be easier if the duties were the same for all the citizens. As it is, the miners can be forgiven for taking up a cynical attitude when they read an article by a man who hints that colliers are lazy because they are paid too much, but who doesn’t mention the £14,000,000 a year paid to the ex-coal-owners; and who says it is becoming a “common practice” for miners to take Monday off, and sometimes Friday as well, but who has no harsh remarks for the shareholders who take all seven days off and still draw an income.

* * *

No wage-earners need apply

Do you want to be a Conservative M.P.? You stand a poor chance if you come from the lower income groups.

“Comment,” which describes itself as a right-wing magazine run by undergraduates, has published in its January, 1951, number some statistics about the social background of the Conservative members of the House of Commons. Of the 298 M.P.s, the schools of 52 are unknown: but of those whose schools can be discovered, 214, or 87 per cent, went to public schools (including 79, or 32 per cent., to Eton). Again, of the 298 M.P.s, 62 per cent, went to Oxford, Cambridge, or “one of the military colleges—nearly always Sandhurst.”

The occupations of Tory M.P.s are also listed, though no attempt is made to divide them into two or three big groups; “Comment” says it would be difficult to know in which group to place a man “who is perhaps a landowner, director of a big industrial company, and was for ten years in the regular army." Readers of the Socialist Standard might enlighten the editors of “Comment” as to which social group an M.P. with these particular qualifications would belong. But the statistics given are quite interesting enough in themselves. 36 are farmers or landowners; 37 are in business; 16 are in industry; 17 are publishers. These groups provide 106 M.P.s, or 36 per cent, of the total number. Then there are 31 (or 10 per cent) from the Services, and 124 (42 per cent.) are professional„ men. Of those M.P.s who are not listed in any of the above categories, 6 are women, and 59 are put down as “unknowns’’—this figure, which" is 19 per cent., includes all the full-time politicians. Furthermore, “Comment” calculates that there are anything from 500 to 1,000 directorships spread among the 298 members.

* * *

Good opportunities for smart aristocrat

Even after five years of Labour Government with its “inevitable fall in the number of knighthoods and baronetcies conferred on Conservative members,” there are well over 100 M.P.s, more than a third of the total number, who “either hold titles themselves or are intimately related to title-holders.”

And how do these sirs and honourables get into Parliament? Elsewhere “Comment” quotes from a forthcoming book by Mr. Herbert Nicholas on the General Election; and it appears, even allowing for the fact that the Tory definition of “working-class” is more restricted than the Socialist definition, that 54 per cent. of those who voted Conservative last year are working-class electors (compared with 89 per cent. of the Labour voters). So both big parties get most of their support from wage-earners.

* * *

Incomes

Last October the Commissioners of Inland Revenue published their report for the year ended March, 1949; and according to this, in a country which some simple Labourites continue to refer to as “Socialist Britain,” there were eighty-six people left with an annual income exceeding £6,000 a year after payment of income-tax and surtax. There were more than five thousand people having incomes of between £80 and £120 a week, and nearly 80,000 with between £40 and £80 a week after payment of taxes. On the other hand, there are eight and a half million given as having incomes between £3 and £5 a week, and 1,113,000 with between £2 14s. and £3 after tax. Those with less than £135 a year are not mulcted of income-tax by a generous government, so they are not dealt with in the report.

* * *

How to suffer in style

These figures go some way towards explaining the news which appears every so often in the Tory papers about the activities of the rich, and form a strange commentary on the statement of the Continental Daily Mail (26-7-50) that “the wealthiest classes have been almost destroyed by the tax-collector.” If we believed the Continental Daily Mail we would find it difficult to understand how the Eton entry-list is filled up till 1963, when its costs £308 a year to send a boy there, “plus a small amount for extras ” (Daily Mail, 12-12-50); and why Harrod’s think it worth while to insert an eight-inch two-column advertisement in the Observer (11-2-51) devoted to the charms of a fur coat which costs £357—more than most workers get in a year; and how Sir Bernard and Lady Docker can afford to give an “epic” cocktail party at the Royal Thames Yacht Club, which was just large enough, so we are informed, to take the hundreds of guests, while motorists queued for a mile outside to get to the party (Sunday Express, 17-12-50). For good measure we are told, in the same paper eight weeks earlier, that Sir Bernard is having a car made specially for his wife, complete with cocktail cabinet, radio set, silver- equipped vanity case, bookshelf, and fluorescent lighting. Gallant Sir Bernard. And wealthy Sir Bernard. The car is costing £5,622.

* * *

Dodgers and super-dodgers

But the official figures apparently do not tell the whole story. The report issued by the income tax authorities cannot be wholly accurate if some people do not reveal their real incomes to the tax inspectors; and it seems that evasion is being practised on a large scale. One inspector of taxes says: “There are roughly 20,000 dodgers, but half the £40,000,000 withheld from the State each year can be accounted for by approximately 2,000 super-dodgers.” (Sunday Express, 31-12-50). This would make the super-dodgers withhold an average of £10,000 a year each. And what is the total income of a man who should pay tax at the rate of £200 a week”

Yet the Tories still tell us that the wealthiest have been almost destroyed.

* * *

Undesirable familiarity

It is comforting to think that Mr. Millard Caldwell, the head of US Civil Defence, has confidence in us. Mr. Caldwell said in London: “ You will find that your people will take atomic bombs just like they took others.” (Reynolds News, 11-2-51).

An official of the Ministry of Supply agreed with him. He said: “ It would be just the same as in the last war. The more familiar we get with atomic bombs, the easier they will be to deal with.” But just how familiar do we have to get with atomic bombs? J. Bronowski, writing in the Observer (4-2-51) says that whereas the type of atomic bomb used in the last war caused a circle of destruction only two miles across, a hydrogen bomb weighing a ton would “cause irreparable damage over a circle on the ground which measures twenty miles across.” That is to say, it could destroy London from Barnet to Croydon, and from Hounslow to Woolwich; and burns and fires from it would reach through a circle of thirty miles in diameter. Such a bomb dropped on London “would kill far more than 1,000,000 people.”

Has the Ministry of Supply worked out how many bombs of this size will have to be dropped before we consider ourselves familiar with them?

Alwyn Edgar

Material World: Poverty and taxing the rich (2024)

The Material World column from the December 2024 issue of the Socialist Standard

Oxfam regularly publishes reports about global poverty. Its most recent one points to how ‘the richest 1% have more wealth than the bottom 95% of the world’s population put together’. It accuses the ‘ultra wealthy and powerful corporations of tax dodging and exercising monopoly control of important products such as Covid vaccines to increase profitability’. As a result, it goes on, the pandemic has resulted in the emergence of at least 40 new vaccine billionaires. The charity complains that its efforts to reduce world poverty are being undermined by large corporations and the ultra-rich who, with their control over the global economy, are responsible for exacerbating problems like extreme inequality and climate change. In an interview with the Voice of America (VOA) radio network, Nabil Ahmed, director of economic and racial justice at Oxfam America, states: ‘The wealth of the world’s five richest men has doubled since the start of this decade. And nearly five billion people have got poorer’.

So what does this report, as well as others produced by Oxfam, advocate to tackle the problems it carefully documents and makes public? As often before, Oxfam puts emphasis on what it calls ‘fair taxes’. To be precise, it calls for ‘fairer taxation of large corporations and the ultra-wealthy’. In his VOA interview, Nabil Ahmed is quoted as saying: ‘We live in a world in which mega-corporations are paying next to or little to no tax’. They are, he says, ‘shaping the rules in their favour … at the expense of ordinary people’ and ‘fuelling inequality within and between countries’. He argues that governments should ‘claw back’ revenues from the rich ‘to be able to invest in their people, to be able to meet their rights’.

Superficially such an approach may seem sensible and desirable, and the Oxfam report praises a campaign proposed by Brazil’s government in favour of a 2 percent minimum tax on the world’s richest billionaires. This, it claims would raise up to $250 billion from around 3,000 individuals and would pay for food, healthcare, education and tackling climate change. However, this fails to consider several crucial factors. First of all, any ‘extra’ taxation money raised by governments from their capitalist class is just as likely to be used to pay off state debt as to help workers or to ease climate change. Then, more importantly, it will always be impossible for governments collectively to agree to universal tax levies, largely because they will all be looking to carry out their duty of encouraging ‘growth’ in their own country at the expense of other states and of supporting their own capitalist class at the expense of others. Nor is the capitalist system as a whole controlled by individual governments or by governments collectively, and disagreements easily break out between them as they seek to defend their own ‘patch’ in the world of competition and profit – something we see happening in many places right now.

It is no surprise, therefore, that, while the Brazil proposal apparently has the support of some countries, for example South Africa, France and Spain, it is opposed by others, including the United States, whose treasury secretary Janet Yellen stated at a G20 meeting last July: ‘Tax policy is very difficult to coordinate globally and we don’t see a need or really think it’s desirable to try to negotiate a global agreement on that’. So a solution along the lines suggested by Oxfam to tax the mega-rich and cancel debt burdens seems in fact little more than a well-meaning pipe dream.

And we can also see that, since the 1980s, when Oxfam changed its approach from being a mere money-collector to putting a lot more effort and resources into trying to offer explanations (if not always well founded) as to the causes of world hunger and deprivation, not a great deal has changed. Oxfam continues to devote considerable time and effort into proposing what it sees as explanations for the ills afflicting society, but, unfortunately, it still can’t come up with viable remedies. This is not for want of trying but because it fails to pinpoint the fundamental cause of those ills, which is that, in the system we live under, profit will in the end always trump need. And governments, no matter what their intentions, can never remedy that, since they are the system’s servants not its masters.

What is needed is a switch in perception, a new consciousness, not by the super-rich or governments but by the majority of those who have to sell our energies for a wage or salary – ie, most of us. This is a switch that will enable humanity as a whole to see the necessity of organising things differently, of using the resources of the whole planet sanely and rationally and in the interests of all its inhabitants – on the basis, that is, of a classless, worldwide society without frontiers which produces goods and services cooperatively and solely for human need not profit.

Howard Moss

These Foolish Things: It takes your breath away (1995)

The Scavenger column from the June 1995 issue of the Socialist Standard

It takes your breath away

Orimulsion is a cheaper fuel for electricity power stations. It is based upon bitumen and is imported from Venezuela. Since it has been used at Merton power station, near Ramsgate, asthma attacks in the area have quadrupled. Because it is cheap there are plans to introduce it at a number of other power stations.

So what's new?

They throw the most lavish parties. Last year they air-freighted more than £13 billion in cash into the country to satisfy the popular demand for foreign currency. Their offices are already extravagant temples to Mammon. But now Russia's bankers want more.

With the Kremlin’s help they arc amassing enormous political power. In short. Russia's new plutocracy can boast of wealth and influence to rival the Medicis or the Rothschilds. Sunday Telegraph 16 April.

Current account

In the first five years of private operation, the regional electricity companies accumulated £1 billion surplus funds, instead of reducing charges to customers. Professor Stephen Littlechild, the highly-paid regulator appointed to prevent such excesses, either knew nothing about this or chose not to take any action. Whichever was the ease, he was useless.

The Thatcher nightmare

House prices have fallen by 25 percent in real terms since 1990 and experts believe that they have much further to fall. Over a million people in Britain arc caught in the negative equity trap, where they currently owe an average of £7.000 more in mortgage repayments than their home is worth on the market. Apart from the debt burden, this makes it extremely difficult for them to move house. During Margaret Thatcher’s rule, with her campaign for a “home-owning democracy” and income tax relief on mortgage interest payments, house prices doubled in seven years. Now the market is swinging back again.

True Brits

National Grid, the electricity transmission company being privatised, has avoided paying almost £2m in tax by setting up a financial arm in Dublin.

The company ladled £160m of its cash flow into the tax avoidance scheme before the government stepped in to make the arrangement less attractive.

A National Grid spokesman yesterday confirmed the existence of the "special purpose” firm and defended it as: “a tax-efficient way of managing the company’s money which is our duty on behalf of the shareholders. It is part of our treasury function, and normal practice for UK companies that have big cash flows” Independent on Sunday, 2 April.

The Scavenger

Material Interests (2022)

Book Review from the December 2022 issue of the Socialist Standard

Kleptopia: How Dirty Money Is Conquering the World. By Tom Burgis. William Collins £9.99.

Tom Burgis is an investigative journalist at the Financial Times. Here he provides a detailed account, backed up by meticulous referencing (often via interviews), of how some extremely rich and powerful people obtain their wealth and then move it around to ensure secrecy and keep it away from the prying eyes of tax collectors and supposed regulatory agencies.

Much of the action is connected to Kazakhstan, a former republic of the USSR, which became a base of private capitalism, run by oligarchs. Until recently, the president was the authoritarian Nursultan Nazarbayev, formerly boss of the ‘Communist’ Party. The country has lots of natural resources (oil, uranium, copper, chromium, etc), and much of this is owned by just three capitalists, referred to here as ‘the Trio’. They set up the Eurasian Natural Resources Corporation (ENRC), with a listing on the London Stock Exchange and an office in London, though that was later transferred to Luxembourg when regulators started to take too close a look. ENRC is officially a public company, but in practice is controlled by the Trio, who use it to move to the West the profit they make from exploiting Kazakh workers.

Their interests extend to Africa too. In Zimbabwe the resources are platinum, gold and diamonds, while Congo has vast reserves of copper. In 2009, ENRC bought a Zimbabwean mining company for nearly $1bn. Africa is attractive to investors in mining and raw materials: in other parts of the world, ownership of land and its resources are pretty much tied up, but in Africa they are often available to anyone with the right contacts and appropriate amounts of money. Even Robert Mugabe’s departure from power in 2017 had little impact on the tycoons.

Burgis also goes into detail about the armies of lawyers, private detectives and PR people who defend the ultra-rich and their reputations. He himself received a letter from a law firm accusing him of corruption and asking him to hand over details of the ‘third parties’ who had allegedly paid him to make his accusations. Various other people get a mention too: Tony Blair was a consultant to Nazarbayev for a while, Nazarbayev’s son-in-law bought a mansion from Prince Andrew, Donald Trump’s property empire was a convenient way of recycling money. More generally, real estate is an effective way of laundering wealth because of the secrecy involved.

Burgis has no illusions about what is going on: ‘Around the world, corruption has become the primary mechanism by which power functions’ and the kleptocrats aim ‘to seize power through fear and the force of money, and then to privatise that power.’ Maybe this kind of thing has become, as the book says at its close, ‘normal business’, but capitalism of all forms is based on power and the influence of wealth.

Paul Bennett

Finance and Industry: Trade Unions fears about funds (1963)

The Finance and Industry column from the August 1963 issue of the Socialist Standard

Trade Unions fears about funds

We hear stories from time to time about the huge funds alleged to be held by the trade unions. There are jibes about the millions of pounds held in. capitalist stocks and shares, or reassurances about how nice it is to see workers' organisations with a stake in the country's wealth.

In fact, its all a lot of irrelevant bunkum. Take the National Union of Railwaymen as an example.

At their recent annual conference the railwaymen heard some hard words from their auditor. He told them that although their total funds increased by £250,000 to £6½ million, this did not mean a thing. All this money, he said, could be wiped out “literally overnight." Most of it was locked up in investments anyway and even if these could be realised at their full value, which, of course, would be highly unlikely, it would only be enough to provide each member with less than £10.

Strike pay works out at £1 per day, hardly enough to keep a worker and his family in luxury. Ten days on strike and they would blue the lot. No wonder there were no die-hard resolutions about fighting Beeching to the last penny of N.U.R. funds!

Thus is demolished yet another of the myths about workers’ affluence. Given favourable economic circumstances under capitalism, the trade unions may be able to bargain rather more effectively. But immediately the economic climate changes for the worse, the shakiness of their bargaining position is ruthlessly exposed.

If the N.U.R. do ever decide to make a do-or-die stand against Beeching, they will need to rely upon more than their £6½ million reserves. They will find their “stake in capitalism” small and transient indeed.

Agricultural exodus

In this country agriculture has become so mechanised that now only 5 per cent. of the British population depend on the land for their living. In Germany the proportion is 15 per cent., in France, 25 per cent., and in Italy it is as high as 44 per cent.

Even in Britain agricultural workers continue to drift into the towns. Year by year the number of machines increases at the expense of men, and more and more small farmers are forced off their holdings. But in other countries, the flow is even faster, the State actively encouraging this movement by paying small farmers to leave their land or by paying grants towards the amalgamation of smallholdings into bigger farms. But it is the basic economic forces within capitalism itself, in all countries, that provide the main impetus; the peasants are forced inexorably off the land and into the towns and factories.

France is a perfect example. A few years ago it was calculated that about 100,000 people were destined to leave the land every year. Many observers thought this an exaggeration. But now the recent census has shown that this figure, far from being an exaggeration, was in fact a hopeless understatement- no less than a quarter of a million of the rural population are apparently pouring into the towns every year.

At the same time, French agriculture, like the British, is becoming more and more industrialised. Within a few years the number of tractors in the country will be the highest in the world, after the United States and Russia. Inevitably, output continues to rise, to the point where surpluses have already become a grave problem. Equally inevitably, it seems, the problem will get worse, in spite of all the French government can do to find outlets for the increased output.

There have already been many violent peasant demonstrations; this year, it looks as though there will be even more. In Brittany, there have been protests at the entry of North African potatoes whilst the home farmer has been struggling to dispose of his own production (ironically, the British farmers have been making the same bitter complaints about Breton potatoes undercutting their produce).

In the South of France, there are similar troubles over fruit and tomatoes; the production of peaches, apricots, and tomatoes promises to be higher than ever. At the same time, British farmers are already disquieted about how the French are going to dispose of their forthcoming cereals crop. They feat dumping on a large scale.

All this explains why the French government seem to be taking an easier line over Britain and the Common Market. French agriculture wants freer access to the German market and Germany refuses to budge until France takes an easier line over Britain's eventual entry into the Common Market.

We are going to hear a lot about agriculture in the months to come.

Taxation without tears

We have often commented in these columns about the folly of making wealth comparisons under present day capitalism, without taking taxation into account. Thus, although one-tenth of the population of the country still owns about nine-tenths of its wealth, the gulf seems not half so glaring if one compares incomes, and even less glaring when one compares incomes after tax.

But what is always forgotten when this argument is used to bolster up the idea of the affluent society, and of how much better off the workers are relatively in comparison with the capitalists, is the way in which our capitalists make use of the tax system to add all sorts of hidden emoluments and “perks” to their incomes. Expense accounts on the firm are only the most publicised means they have of achieving this; there are many others, all quite legal and often more rewarding.

The Sunday Times recently ran an article which showed wonderfully well what scope there is, and all above board, for this type of operation.

At the moment, there is a nice market for selling “executive aircraft” to the bigger firms. One such plane is the Hawker Siddeley H.S.125, selling at £200,000, which is hardly a bagatelle even for our bigger capitalists. But so generous are the Inland Revenue with their allowances that, over five years flying, the firm buying one of these aircraft needs actually to pay out only £35,000 for it.

Ostensibly, of course, these planes are for transporting our businessmen quickly from place to place so that they can transact their big deals and be back at their big desks the next morning. But if they alternate their business trips with the odd flip to Paris or the South of France, in company with their wives, friends, and families, who is to know? Plus the usual hotels, good food, the best wines, and any other expenses on the firm, it all works out very nicely and makes a useful tax-free addition to the annual income.

Its an affluent society alright—for those for whom it has always been affluent, the capitalist class.

Stan Hampson

The Haves and the Have-Yachts (2007)

From the July 2007 issue of the Socialist Standard

The rich are not all equally wealthy. According to an article in Times at the end of last year (4 December), a rift is opening up among wealthy Britons between the merely rich, and the super-rich. The reporter went to a West London nursery school – £1800 a term, or £5400 a year – and found the conversation mainly about the forthcoming City bonuses. “According to the centre for Economics and Business Research, a staggering £8.8 billion will be paid out in this next round, with more than 4200 individuals receiving more than £1 million each. Much of that money (around £5 billion) will find its way into property, half of it in London; and of the overall bonus, between 60 and 70 percent will go to non-UK residents – i.e., foreign nationals working in London, many of whom will not be liable for UK tax.” Many of these latter are now the super-rich, whose expenditure is soaring above that of the rich: as Rachel Johnston put it in her book Notting Hell, it is now “the Haves versus the Have Yachts”.

One of the main reasons for the rise of the super-rich is the policy of the Labour government: Tony Blair and Gordon Brown and their friends do love the wealthy. “Britain has one of the most business-friendly tax environments on the planet, exemplified by the non-domicile (or ‘non-dom’) tax laws. In simple terms, these allow wealthy foreign nationals to hold their main liquid assets in tax-free offshore environments while operating freely within the UK – largely untroubled by the Exchequer (the same is not true of British nationals).” The result is that “London’s status as the place to make and take money has only been reinforced in recent years”.

With such competition, the merely rich feel jealous about the super-rich. One City fund manager (Eton and Oxford) said “Not only do they look down on us, they have made our lives more uncomfortable from a financial point of view too, by pushing up the price of traditional wealth assets – school fees, house prices, staff.” An investment banker said, “the super-rich are fine. They either don’t need to pay tax at all or find ways of avoiding it. I don’t have enough cash to employ a clever accountant.”

The Have Yachts – people “with more than £15 million to invest” – operate on a higher level. “These are people who think nothing of spending several million on a party, or having their children picked up from school by helicopter and transported to a waiting private jet for a weekend in Gstaad. They have so much money that they pay experts to help them spend it.” For example, “at Quintessentially, the global concierge service, their ‘elite’ membership is by invitation only and costs a basic £24,000 a year. For that, members have access to finders and fixers in every major city across the world, 24 hours a day.” Among the requests they have dealt with are “finding a premiership footballer to play with a member’s son; sourcing twelve albino peacocks for a party with just three hours’ notice; completely redesigning a London hotel room; and organizing a trip to Hudson Bay, Canada, during the one month each year when the world’s largest concentration of polar bears gathers on the ice”. One service in much demand is finding appropriate houses, usually in London, or by the sea in the west country.

A director of a Central London estate agency said “super-rich foreigners” were their best customers. “Between 70 and 80 percent of our top deals are with foreign nationals.” The steady injection of largely tax-free money by the super-rich into the London housing market (prices in the “most exclusive districts” went up by 31 percent in the year to February 2007) keeps all prices rising, because the cost of cheaper houses follows the market upwards; so ultimately all the young people trying to get their own property, or giving up in despair, are feeling the knock-on effects of the Blair/Brown romance with the rich. If the specially favourable terms for foreign magnates are thought to be under threat, prices decline. “House prices in Central London took a considerable dip in 2004 when ‘non-dom’ was last under serious review; but a sustained campaign from the City and the Exchequer persuaded” the Chancellor to relent, and the super-rich breathed a sigh of relief.

Tax Haven

The International Monetary Fund has decided that Britain is now an offshore tax haven, listing it “alongside the likes of Bermuda and the Cayman Islands – unregulated jurisdictions associated with illicit funds” (Observer, 22 April). The “non-dom” people save vast amounts by largely avoiding British income tax. “The accountancy firm Grant Thornton worked out that the UK’s fifty-four billionaires paid income tax totalling just £14.7 million on their £126 billion combined fortunes” (Observer 4 March). That makes a rate of about one-hundredth part the percentage that the merely rich, who can’t wangle this particular tax-exemption, have to pay on their incomes. Among the “non-dom” Londoners are Lakshmi Mittal, Roman Abramovich, and the Hinduja brothers. The Observer (22 April) has several times asked Sir Ronald Cohen, who was born in Egypt and is now Gordon Brown’s “senior City advisor” (Brown has appointed him to several “taskforces”) whether he is lucky enough to have this “non-dom” tax status; Sir Ronald has refused to answer. If he has this status, he has something to thank the Labour Party for, and he – like Lakshmi Mittal, who tops the Sunday Times Rich List this year (20 April) – is among those who have generously donated funds to the Labour Party.

If you think that the law says that foreigners cannot contribute to British party funds, you would be mistaken: the Inland Revenue (whose regulations are laid down by Gordon Brown) says that people living in Britain under the “non-dom” rules can still be counted as residents, who can thus legally give money to – for example – the Labour Party (Observer 18 February). So that’s all right then. The authorities are less than forthcoming when questioned about this “non-dom” dodge. When asked about a month ago, Gordon Brown’s front man Ed Balls said, “Estimates of the tax foregone in the UK . . . by those not domiciled in the UK are not routinely made” (Private Eye 8 June). But when Private Eye asked about it, “HM Customs and Excise confirmed the information does exist”. However, they refused to divulge it because if they did “it would lead to less robust policy development” (whatever that means). It seems that the ” ‘non-dom’ tax exemption saves the mega-rich billions. The last figure released showed that in 2003 ‘non-doms’ were saving around £1 billion a year; and use of the ruse has multiplied since then. The benefits to Britain of hosting more billionaires and bankers are uncertain.” But Brown, “who has received campaign donations from prominent non-doms, wants to keep them happy without revealing the size of their subsidy. So much for his promise of ‘open and accountable’ government.” It’s all a long way from what Keir Hardie thought he was going to do when he helped to found the party which – he claimed – was going to establish socialism.

Like nearly all the big issues of the day which are endlessly canvassed in the papers and on radio and TV, this unpleasantness arises out of a disagreement within the owning class. Should all the members of that class pay their due taxes, to help support the state which runs capitalism for them? Or should some be allowed to get away with much less taxation than the others have to stump up? For Socialists, there is only one issue: getting rid of capitalism and all the struggles and the dubious hanky-panky it inevitably engenders, both between classes and within classes. If the non-dom ruse was stopped tomorrow, the owning class would still be obscenely richer than the rest of us.

Alwyn Edgar

Cooking the Books: Something (a lot) for Nothing (2022)

The Cooking the Books column from the May 2022 issue of the Socialist Standard

Rishi Sunak, the Chancellor of the Exchequer, cannot be pleased. It seems that his political rivals have been using his wife – the daughter of one of India’s richest capitalists and a capitalist in her own right – to sabotage his political career. It is true that there is something incongruous about a rich politician presiding over the pain, in terms of higher gas, petrol and diesel prices, that the government has decided is worth workers paying as a result of their sanctions against Russia.

The media and the Labour Party made great play of the fact that Sunak’s wife was a ‘non-dom’, someone whose tax domicile is another country and so who can pay taxes there rather than here, in her case India where they are lower. But which state – India or the UK – she pays taxes to is irrelevant from the point of view of those who work for wages. What is relevant is how she gets her income in the first place.

According to the BBC, ‘She owns £700m in shares of the Indian IT giant Infosys, founded by her father, from which she received £11.6m in dividend income last year’ (bbc.co.uk/news/uk-politics-61045825).

£11.6 million a year is £233,077 a week, without having to do anything, not even these days to clip coupons. Who said the idle rich no longer exist? But where does it come from?

The immediate source is the dividends on the £700 million’s worth of shares in the capitalist enterprise founded by her father. But where did the wealth of that company come from? According to the company’s website:

‘From a capital of US$250, we have grown to become a US$106.44 billion company’ (infosys.com/about/history.html) .

Maybe, but how did that happen? It will be a typical story.

Infosys was started in 1981 by a group of software engineers. In 1992 it became a public limited company. The following year it was ‘floated’, selling shares in it to outside capitalists and financial institutions. These will have invested their money with a view to obtaining a share of future profits while the company used the money to expand its activities.

For the first few years the original founders would have worked hard to build up the business, though $250 would not have taken them very far; they would have had to borrow more from somewhere, even if from their friends and relatives but more likely a bank. When they had acquired enough they could begin to take on employees. These too would work hard but, unlike the founders, would not have benefitted fully from their work; a part of the value they added would have gone to the company as profits, most of which would have been re-invested to expand the business.

As the business expanded the original capital made up a smaller and smaller part of the total capital which would have been built up out of the profits produced by the workers and by invested outside capital (built up too out of the profits of other workers).

So, the Chancellor’s wife’s wealth comes from the exploitation of workers. The dividends that enable her to live an idle life of luxury come from the same source. They are a pure property income, what the tax authorities in Britain used to call ‘unearned income’ – before they realised that ‘unearned’ could mean ‘not earned’ and so be interpreted as ‘ill-gotten’. It’s an income that she – and others like her – get just because they have titles of ownership of means of production and to a share of the profits their operation by wage-workers brings.

That’s the scandal, not that she played the system to pay less tax.

Flags of Convenience and the Boycott (1959)

From the January 1959 issue of the Socialist Standard

The International Transport Workers’ Federation four-day boycott of “Panlibhonco” shipping began on 1st December. The West German Unions, although they originally voted for the ban, did not in fact support it, following upon a Court award of £30,000,000 damages in a strike case just settled. The Italian Unions refused to take part, and the boycott was ineffective in France where the great majority of the dockers belong to a Communist-dominated union not affiliated to the I.T.F. In Holland, where two-thirds of the dockers are non-union members, the situation was confused. An Amsterdam Court granted port employers an injunction to restrain the unions from joining the boycott. In Rotterdam, however, the Court refused to grant an injunction and the boycott was observed. Japanese supported the boycott in principle, but did not take active measures.

But union members in Britain, the East and Gulf Coasts of U.S., Australia, Belgium and Scandinavia, and in several other countries throughout the world, and the International Petroleum Workers’ Federation, supported the boycott, and by the last day 192 ships were idle. 

What is it all about ?

Many people have become bemused and bewildered and consequently not particularly bothered, because, in spite of the volume of discussion on flags of convenience in the newspapers until the recent boycott, the concern has been regaining the advantages or otherwise from the ship owners' point of view. The recent action by the unions has come as a surprise element of the situation.

Panamanian registration of ships was first invoked in the days of American prohibition to enable liquor to be sold to passengers aboard liners. It was not long before other advantages became known in other countries. Registration was a simple and inexpensive procedure for foreigners; there was no taxation of profits, and owners were not subject to a variety of rules and regulations such as those which had accumulated in maritime countries over the centuries. Some of these were advances won at the cost of great sacrifices by the seamen in the class-struggle with the owners for better conditions and pay. Post-war currency restrictions in the non-Panlibhonco countries have been an additional factor. Above all, American shipowners, by registering ships in Panama, were able to avoid the obligation to ship American crews at (by European standards) much higher wages.

The man who bought the Bank at Monte Carlo

Some of the “Flag of Convenience” owners are public characters and are frequently in the news. Mr. Onassis, owner or controller of a fleet worth an estimated US$300 million, is one of them. According to Time (19th January, 1953) Onassis lunched with Prince Rainier several times and bought him a 137 ft. diesel yacht. The directors of the Casino were kept out of the Palace gates by royal carabinierii and they resigned to make room for Onassis’ representatives. The Casino had been losing money and the Prince was looking for new capital amounting to US$1,000,000. Onassis planned to register ships in Monaco after moving his offices into the Casino building.

Pictures from Ships

His brother-in-law, Mr. Niarchos, also a millionaire shipowner, is another character sometimes in the news. A fairly recent Tate Gallery exhibition of Mr. Niarchos’ pictures gave pleasure to a vast public. He has bought originals of Renoir girls. Degas dancers, Gauguin Tahitans and Van Gogh landscapes at prices which run into tens of thousands. Toulouse-Lautrec’s Aristide Bruant cost him £22,000; Renoir’s Mosque at Algiers, £24,000; Van Gogh’s small Thistles £16,000.

But manoeuvring with “Flags of Convenience” is not Mr. Niarchos’ only occupation—buying pictures such as these is another, for those with American incomes can spend 30 per cent. of their income, tax free, on works of art. provided they are destined for a museum. And during his lifetime he can enjoy them in his own home. Obviously it is more attractive to spend £50,000 on a picture like Renoir’s Girl in a Plumed Hat than to hand the money over to the Inland Revenue. The museum get the pictures when he dies, but he could not take them with him, anyway.

Patriotism—for workers only

For the workers, patriotism is held up as one of the greatest of the virtues, and countless war memorials throughout the world pay tribute to the effectiveness of this teaching. Surely it must be for the workers that the poem, “ My country, ’tis of thee . . . Land where my fathers died . . .” is applicable, for millions of workers have been maimed or killed following the dictates of their ruling-classes. This recalls the story of the monkey who used the cat’s paw to pull his chestnuts out of the fire. But in the case of the Panlibhonco shipowners it seems to be a case of rather “Don’t do as I do, but do as 1 tell you”, for these characters seem intent on finding out ways of not paying taxes to not merely their native country, but to any government at all. How misled are such workers who risk life and limb fighting to protect, or extend the property of their employers, when they themselves own nothing worth fighting for.

The I.T.F. and the Boycott

A statement from the International Transport Workers’ Federation says that the boycott has two main objectives: —

“ Firstly, to draw the attention of governments to the problem and to protest against their inactivity on it. 

“ Secondly, to secure properly-regulated wages and working conditions on all ships flying flags of convenience. We would agree that conditions on board many such ships not under trade union agreements are no worse than on most European-operated ships, and in some cases are even better. But this this largely due to the campaign which the l.T.F. has carried on during the past ten years. There is. in any case, no guarantee that these standards will be maintained, because the crews have no trade union protection at present. Nor do they enjoy the security of employment or the benefits of social legislation which are generally to be found in the traditional maritime countries. What we are trying to do is in fact a straightforward trade union job, the kind of job which unions in all civilized countries have accepted as part of their normal function.”

The Statement later on says:—

" A further very vital aspect of this situation is the question of national defence in time of international emergency. How, for example, can any country claim to exercise effective control over ships which fly the flag of another nation? This is, in fact, a complete negation of the concept of national maritime sovereignty. In any case, as past emergencies have shown only too clearly, the real factor in exercising control over vessels is not their ownership or country of registration, but their crew. Here we would stress that Panlibhonco ships have become a haven for politically undesirable seafarers and others; consequently there can be no guarantee as to how such crews would act in an emergency situation. 

“ The l.T.F. has never adopted such a narrow-minded attitude and has no intention of doing so now. Our campaign is not based solely on the interests of the seafarers, but on those of the community at large—which arc equally threatened.”

Apparently these workers are more patriotic than the shipowners themselves.

Greek shipowners have accused British, Scandinavian and Dutch shipping interests of having inspired the boycott and the Greek Shipowners’ Union, acting on behalf of their co-operation committee of London threatened to lay up ships throwing their crews out of work. About 10 million tons of Greek shipping sails under the flags of Liberia, Panama and Honduras. Almost all the crews on them are Greek.

The owners’ declaration said: —

“ ' It would be obvious to all by now that this boycott . . . is simply one more manifestation of the hostility of certain shipping interests towards their competitors.' Greek shipowners, the declaration went on, already had to face the bitter campaign by owners in the so-called traditional maritime nations, who were frustrated over bureaucratic restrictions and heavy operating costs in their own countries. The l.T.W.F. was inspired by British interests trying to blackmail flags of convenience to give advantage to British and Norwegian shipping which was not threatened by eventual repetition of the boycott.” (Times, 2nd December, 1958.)

The Daily Mail (5th December, 1958) published a feature article written by Mr. Niarchos, who on behalf of the Niarchos Group refuted in detail the charges of the I.T.F. After dealing with working conditions aboard his ships he said this:—

” If international federations of unions are to become concerned in matters of international business and relations between nations, they are assuming a new empire-building role far removed from their original mission of furthering the true interests of their dues-paying members . . . and the handling of genuine union problems will be completely obscured.”

Trade Union action

Trade union action to maintain or improve workers’ living standards commends itself to any Socialist, and particularly when it is international action, for this implies a greater degree of working-class solidarity, and it is this factor which is so encouraging about the boycott. The Capitalist press expressed satisfaction that the boycott was only partial, but it must also be remembered that much of the support which the various workers gave was not to advance their own sectional interests, but that of the seamen generally. The Financial Times in its editorial (2nd December, 1958) said of the boycott:— «

“ It is also international and this use of the international strike weapon could be a precedent for much more undesirable exertions of trade union power.”

We couldn’t agree more, but, of course, although a boycott may or may not serve one section of the Capitalist class, working-class solidarity is liable to be undesirable for the Capitalist class generally.

Frank Offord

These Foolish Things: Taking off (1995)

The Scavenger column from the May 1995 issue of the Socialist Standard

  The basic contradictions in capitalism cause widespread death, destruction, pollution, poverty and waste. But this is to take the world view. Most of us experience day-to-day capitalism as a series of small stupidities, irritations and frustrations. Here are a few. If you encounter any worth a wry smile, please send them to The Scavenger who will publish the best.

Taking off

"Selling the nation’s family silver” goes on with all haste to keep the present government’s budgets within tolerable balance. To add to nearly £800 million raised through the sale of Ministry of Defence properties in the last ten years, a further £300 million is expected from the twenty airbases due to be put on the market before the end of the century. However, flying of a sort may still continue at Bentwaters in Suffolk. The Maharishi Foundation is said to have bought the 1,000-acre site for a university of Natural Law.

Nearer the bone

There must have been a few smirks of satisfaction among British capitalists at the tail end of March. Dewhursts the butchers went bust. Surely a cause for sadness? Vesteys, the family which became super-rich through providing meat from the ranch to the customer, clocked up debts of over £400 million. Their family fortune shrank from about £1.5 billion to a mere £600 million. But Sam and Edmund Vestey were not only keen businessmen—they were also keen tax-dodgers. They did not pay their share for being (fairly new) members of the ruling class of Britain. Back in the 80s they managed to pay just £10 tax on a year’s income of £2.5 million. Now Union International, the family firm, will have to let the Receivers sell the 300 shops trading under the names of Dewhurst, Matthews, Baxter and Cobb in order to pay the debts.

Grinding the poor

At this time next year Unemployment benefit will be replaced by the Jobseeker’s Allowance. This will require a person applying for state benefit to state the lowest wage they would accept in taking a job.

Blanket solution

Meanwhile, staff in Job centres are facing the threat of increasing violence from clients—a 400 percent rise in the last five years. This has followed the instructions to staff to conduct far more rigorous checks. After a particular attack on staff by a man with a knife in Handsworth, Birmingham, the staff have been issued with blankets They are not sure what they are meant to do with them.

A suggestion

At Lucas, John Pocock was an enthusiastic contributor to the firm’s suggestion box. One of his ideas saved Lucas £36,000 a year. Another will probably save over a quarter of a million in five years. He has been paid £3,750 for this—and given the sack because he is fifty. It is all part of the new Lucas boss’s regime. Who says, "For the company to achieve its goals in 1995 and beyond, it will require an enhanced contribution from you all.”

On the other hand

At Christmas, six men got together for a meal at a hotel. There is no record of the amount they spent on food—perhaps because the amount they spent on drink dwarfed it. They bought 12 bottles of Chateau Petrus claret at the Dorchester at £960 a bottle. Apparently they were unable to finish the last half-bottle and graciously left it for the waiter. What is the connection between this and the previous items?

The Scavenger

Notes by the Way: The Last Stage in the Old Austria (1938)

The Notes by the Way Column from the May 1938 issue of the Socialist Standard

The Last Stage in the Old Austria

The last-minute resistance before the sudden collapse of Schuschnigg in face of the advance of Hitler into Austria gave a dramatic touch to that event, but also requires explanation. An article in the Nation (New York, April 2nd, 1938) provides the necessary details. It will be recalled that Schuschnigg met Hitler at Berchtesgaden and it was at once taken for granted that Austrian independence was already lost. Then, after a few days, Schuschnigg made a bold move to retrieve the situation. A plebiscite was to be taken on the maintenance of independence, and all anti-Nazi elements were called upon to rally round the Austrian Government on a policy of friendship towards Germany but no absorption. Why did the change take place? The answer is that, although Schuschnigg could get no foreign support against Hitler, an influential body of Austrian industrialists and landowners tried to organise resistance because they feared for their own position if Austria became a German province. Not sentiment but profit was their motive. The body in question included the Austrian Association of Industry and Trade, They submitted a memorandum to the Government and two of their members were promptly called into the Ministry which was to stake its existence on the fight for independence. The Nation gives lengthy extracts from the memorandum, some of which are reproduced below: —

  . . . we must defend the independence of Austria. The loss of our independence under present conditions in Germany would be disastrous for us. It would mean the extinction of large sections of Austrian industry, commerce, and the tourist trade. We have been able to reduce the restrictions dealing with foreign currency on account of the increase of exports and of income from abroad, especially from tourists. Our industries are largely dependent on exports. The German currency restrictions would endanger our exports. At the same time we could not expect to be privileged in the matter of distribution of raw materials, which are scarce in Germany. Most of our industries do not belong to those armament industries which are privileged.

The memorandum goes on to point out the interesting situation of the Austrian iron and steel industry and their opposition to absorption. The Austrian iron mines have a relatively low cost of production, iron and steel mills are near the mines, and many industrial plants have been built up on account of the cheap supply of iron and steel. All of this advantage would be lost if Austria came under the control of German iron and steel interests.

  We were opposed to attempts of the Stahlverein to close iron and steel mills which the Stahlverein controls in our country. We were and still are opposed to being subjected to the control of the German cartels and syndicates in the matter of iron and steel prices. Our machine industries will not be able to compete with German industries if we have to buy iron .and steel from the Ruhr mills. . . . Anyway we shall experience an immediate rise of iron and steel prices in the event of the Anschluss. We shall have to pay the German internal price, which always is considerably higher than the world market price or the price we have been paying. 

Austrian agriculture, like industry, would be sacrificed. Instead of buying cheap fodder abroad the Austrian farmers would have to buy dear fodder from Prussia and Pomerania.

The memorandum develops many other points, all directed to the one argument, that most Austrian industrialists and landowners were better off in an independent Austria: —

  We shall not be able to exert as strong pressure in the Prussian State Bureaucracy as can the large trusts of western and central Germany.

The Nation adds that several other industrial and handicraft organisations also sent resolutions and letters which urged Schuschnigg to refuse Hitler's pressure—"They furnish the key to Schuschnigg's surprisingly stubborn resistance—and to the necessity of Hitler's using military power to effect the Anschluss."

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The First Stage in the New Austria

In the long period after the Great War during which the Social Democrats were active and influential, Austrian industrial capitalists more or less adjusted themselves to the position of offering social reforms (largely at the expense of Austrian landowners and agricultural interests) in return for comparative industrial peace and order achieved with the help of the Social Democratic Party and trade unions.

With the world depression and consequent decline of markets the old situation no longer appealed to the weakened capitalists or to the strengthened landowners and farmers. The Social Democrats and the unions were crushed. Violent repression took the place of social reform. Dollfuss, and after him Schuschnigg, repudiated democracy and stood for the form of dictatorship known as the Corporate State.

Now a further stage begins with the entry of Hitler into Austria. German capitalist and landed interests required the crushing of their Austrian rivals and the Government they controlled. So Hitler and his lieutenants deliberately set out to placate the Austrian Social Democrats and Communists and former trade unions. Schuschnigg penalised the workers who fought for democracy in 1934, Hitler promises them reinstatement in their former jobs. Dollfuss used artillery against the blocks of low-rented flats put up by the Social- Democratic City Council of Vienna. Now the Nazis promise to go back to the programme of the Social Democrats.

General Goering, according to The Times correspondent in Vienna (The Times, April 2nd, 1938), has promised work to the Austrian unemployed, and Dr. Neubacher, the Nazi Burgomaster of Vienna, has lifted whole chunks from the former Social-Democratic programme. The Times Vienna correspondent reports him as follows:—

  Dr. Neubacher delivered a speech at the Vienna gasworks recently in which he promised big housing schemes on the lines of those which made Vienna famous under the Social-Democrats, extensive slum demolition, an extension of the municipal services, and the beginning of work on the promised Port of Vienna as soon as possible. He reinstated 80 workmen who had been dismissed because they fought with the Socialist Schutzbund against the Dollfuss Government in 1934, and declared that he did this not as an act of grace, but as a restitution of rights. 

The moral is obvious. Those who administer capitalism, whether by democratic or dictatorial methods, cannot ignore the views of the mass of the workers, but must seek their support or, at least, their tolerance of what is done. But will the workers be deceived for ever? Has Hitler discovered some new and infallible method of blinding the workers to their own class interests ? Plainly no, for, as is shown above, all that Hitler can do in Austria is to go back to the method employed during the period of influence of the Social Democratic party. The fact that he can think of no other and better method than promising the stock social reforms is proof positive that, sooner or later, the workers who have for the time being been deceived by Hitler, will see through him when they find that the promised social reforms leave capitalism unchanged.

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The Troubles of the Labour London County Council

The Labour Party majority, who control the London County Council, are in a sea of troubles. Trade Unions with members employed by the L.C.C. and the London Borough Councils complain that the joint meeting of the above bodies—dominated by Labour Councillors—curtly rejected their demand for increases of pay to compensate for the increase of prices. The Councillors, of course, are thinking of the rates. More expenditure means higher rates, and higher rates mean fewer votes for Labour candidates at the next elections.

We see masked nurses addressing meetings of nurses employed at L.C.C. hospitals, called to protest against their conditions of service. Mr. G. Vincent Evans, General Secretary of the National Union of County Officers, spoke at one such meeting, and is reported in the Daily Telegraph and Morning Post (April 6th, 1938):—

  . . . when the Nurses Charter was introduced . . . it was felt that the L.C.C. would set an example to the rest of the country.
  Instead, when the testing time came, the L.C.C. showed that such a spirit of leadership was sadly lacking. The result was the use of this inaction as a vicious and indefensible argument for defeating the Limitation of Hours Bill in the House of Commons.
  “It was left to the Middlesex County Council/' he went on, “to become the pioneers of this progressive movement of reform when it introduced the 48-hour working week. The lead was followed by many of the voluntary hospitals and other provincial county boroughs.
  "Surely the great trade unionist movement in London, and throughout the country, must feel that progress has been stultified."

Again the Rates!

Then we find tenants who are to be given the blessings of an L.C.C. housing scheme signing petitions of protest. The Daily Telegraph (March 28th) reports as follows:— . .

  Residents of Bethnal Green are protesting against a proposal by the L.C.C. to demolish their homes and to rehouse them in five-storey flats instead of in two-storey cottages, which they prefer.
  In a petition delivered recently to the King in Council, through the Home Secretary, on behalf of 4,000 persons, it was stated that the cost of the suggested five-storey blocks.would be greater than for two-storey cottages.
  “The argument that more people can be housed on a site by building blocks instead of houses has been blown sky high,” said Mr. William Catmur, on behalf of the petitioners. “The people are in revolt against flat-blocks and want houses with small gardens. Such houses can certainly be provided at no greater cost."
  The petition claims that the local authorities refuse to repair houses which could be repaired, and insist on ejecting the tenants, that they are destroying the businesses as well as the homes of many small shopkeepers, and that they are “behaving with the most outrageous disregard of the law."

In this case again, in spite of the argument used by the petitioners, it is probable that the five-storey flats are cheaper. Otherwise we must assume that the Labour Party, who are responsible for the scheme, have some abstract preference for flats, whether the workers like them or not. In any event, we can be quite certain that if the flats were like those privately-built ones available to people who can afford to pay, and if they were available at rents no higher than those paid now by the Bethnal Green tenants, the latter would raise no objection.

But the L.C.C., in spite of its Labour majority, cannot tackle the real problem—poverty caused by capitalism. All it can do is to nibble at the effects of poverty, hoping to convince the electors that this is better than leaving the L.C.C. to the Municipal Reformers. Labour leaders never learn the lesson that capitalism administered by Labour Councils is so little different that, after a few years, the electors turn again in desperation to the openly capitalist parties. So it will continue to be until the workers decide to have Socialism.

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Major Fey—A Liberal and a Communist Viewpoint

Major Fey, who committed suicide (or was perhaps murdered) when the Nazis entered Vienna, was one of those guilty of the brutal onslaught on the Viennese workers in February, 1934.

The News Chronicle correspondent in Vienna, Mr. John Segrue, was responsible for the following account, published in the News Chronicle on February 17th, 1934:—

  Vice-Chancellor Fey . . . organised the plan that goaded the workers into resistance. Last Sunday, in a speech at Stebersdors, near Vienna, he told the Heimwehr that Dr. Dollfuss was “one of them" and added that he intended to begin work in earnest against his enemies on the following day.

His “earnest work” was to mean artillery fire against workers' homes; and when the fighting was over Fey promised “scores of hangings all over Austria." It was indeed the British Government which actually intervened to stay the slaughter.

Now Fey is dead, victim of his own ambitions and perfidy (he was believed to have played false both to Dollfuss and to the Nazis).

A correspondent draws our attention to the way this event was reported in the Liberal Manchester Guardian and in the Communist Daily Worker (both dated March 17th, 1938).

In the Guardian Fey was given the headline, “Minister who Destroyed the Socialists.”

In the Daily Worker the headline ran: “Austrian Patriot Leader’s Suicide.”

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A Noble Lord on Tax-dodging

The Times recently published an article on tax-dodging, and showed how wealthy people employ the best legal brains to evade income tax and surtax. Other newspapers estimated the loss to the Treasury through this at £50 millions a year.

The Times then published a number of letters on the rights and wrongs of tax-dodging, one of the most enlightening being a letter from that representative of a very noble house, Lord Hugh Cecil. He argued that the tax-dodger is entitled to get away with anything, provided he keeps within the law. If the tax-dodger “acts openly and above board, and clearly conforms to the law, I can see no reason why he should not do anything the law allows in order to lighten the load of taxes.”

This is an ingenuous way of phrasing the claim that wealthy men are entitled to get round the plain intention of Parliament, provided that their lawyers can find the usual loophole. Such is patriotism.

The Times (April 1st, 1938) disclosed that “cases are on record in which members of the House of Commons, who have voted to impose taxes on others, have themselves resorted to evasive operations in order to avoid the very taxes to which they have consented. "

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Bernard Shaw Trips up

Bernard Shaw entertained the readers of the Daily Express (March 26th, 1938) by giving answers to eight questions on world affairs. He ridiculed national frontiers, attacked Hitler for Jew-baiting, denounced Nazi Nordic nonsense as being only an imitation of the “enormous arrogance” of the Jews in claiming to belong to God’s chosen race, expressed appreciation of Hitler’s book, "My Struggle” (“though it is a great pity that he did not read my works instead of Houston Chamberlain’s”), denied that there is any natural reason for the existence of a German Empire—or a British Empire—and thought that war between Britain and France and Germany will only break out "if Hitler loses his head, and is confronted by enemies who have not any heads to lose.”

Altogether a typical contribution. But on one point Shaw fell into a trap, as a reader of the Daily Express promptly pointed out. The question was about returning Germany’s colonies. In the course of his reply, he said: “My slogan is, ‘Africa for the Africans’.”

But it is only two years ago that Shaw was campaigning under the banner "Abyssinia for the Italians.”

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Winston Churchill has Second Thoughts on Spain

At the beginning of the Spanish War Churchill was all for Franco. He has gradually veered round until now, in the Evening Standard (April 5th, 1938), he writes gloomily of the dangers of a Franco victory for British Imperial interests, and regrets that opinion in England and France is so divided as to prevent any action being taken.

  A thoroughly Nazified Spain, retaining its German nucleus, may well be a cause of profound anxiety both to France and Britain. At any rate, it appears to be a matter upon which they should exert themselves, if indeed the faculty of action still resides among them.

It need hardly be said that Churchill’s motives never include any consideration for the exploited. He backed Franco from motives of ruling class sympathy with a dictator and now turns against him when British ruling class interests appear to be at stake.

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What British Seamen Owe to the Empire

If there were anything in the argument of the Imperialists about the advantages of belonging to a seafaring Empire, possessed of enormous naval power, surely the conditions of British seamen would demonstrate the truth or otherwise of their belief. The Times recently published some articles which showed a decidedly unattractive picture of those conditions, and on March 29th a letter was published from Lieutenant-Commander H. G. Boys-Smith, which contained the following: —

  May one who boards over a thousand ships every year (chiefly British and North European) express gratitude for the outspoken articles by your Labour Correspondent of “Ships and Men ” ?
  My opportunities for observation enable me to say, without fear of contradiction, that the accommodation provided for British crews is so much inferior to what is usually found in Scandinavian, Danish, Dutch, and German ships that it constitutes not only a grave wrong to our seamen but an equally grave reflection on British ship-owning interests.

He went on to confirm a statement made by another correspondent that shipowners’ representatives give "hints” that forecastle conditions must not be spoken of.

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Who is Father Christmas?

The Daily Herald (April 9th, 1938) reports that a certain wool merchant who recently died leaving £1,176,813, was known locally as' the Father Christmas of the textile industry, because he made generous gifts to his employees at Christmas time. It will never have occurred to this gentleman that he was only able to become a millionaire because his employees were making "generous gifts” of unpaid labour to him, not only at Christmas, but throughout the year.

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Capitalism's Welfare Work

A Mr. A. Hudson-Davies, who was formerly engaged in industrial welfare work, spoke at the Conference of Management Associations at Oxford on April 1st, 1938, about the employer’s view of welfare work. He confirmed what Socialists have always argued. The following report is taken from the Manchester Guardian (April 2nd, 1938): —

  Mr. A. Hudson-Davies said that under the present dispensation their main job as managers was undoubtedly to find profits for the shareholders, adding: “All this business about welfare activities and improving working conditions is really a matter of making profits in an enlightened way, and there is no point in making a song and dance about it because it costs only a fraction of the outgoings of the company.”

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Facts and Fiction About the Empire

The Sunday Chronicle (April 3rd, 1938) had articles by two well-known people, both of whom touched on the question of the standard of living of British workers. They flatly contradicted each other.

Sir Philip Gibbs, in “The Story of the British Empire,” said: —

  Youth in Britain to-day . . . well clothed, well fed, well housed . . . owes everything to the Pioneers of Empire.

Mr, Duncan Sandys, M.P., in “Politics from the Inside,” wrote about the Children’s Minimum Council, the aim of which is to ensure “that no child shall, by reason of the poverty of its parents, be deprived of at least the minimum of food and other requirements necessary for full health.” They gave a luncheon, the menu being based on the British Medical Association’s minimum diet necessary for health, costing, at present prices, 6s. 6d. a week per person. Mr. Sandys says: —

  . . . it is unhappily the fact that even this frugal fare is beyond the reach of every unemployed man without separate means who has a wife and children to support. What is more, very many of the lower paid wage earners are just as badly off . . . there are actually over four million people in this country who cannot afford to spend more than 4s. a week on food.

It would seem that Sir Philip Gibbs' pioneers of Empire might have been better employed putting things right at home than in extending capitalism’s evils to the unfortunate inhabitants of other countries.

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Who Makes Politics Disorderly ?

After Mr. Shinwell had slapped the face of Commander Bower in the House of Commons the latter (who, unfortunately, suffered some injury through the blow) issued a message to a Conservative Parliamentary candidate, saying that Mr. Shinwell’s action is an indication of the kind of disorder we may expect when Socialists get power. As Mr. Shinwell’s Party is the Labour Party, not the Socialist Party, and as it is committed to reforming capitalism, not abolishing it, the reference to Socialism by Commander Bower should be taken as an indication of the profound ignorance of Conservative M.P.s. But regarding the conduct of M.P.s, there are a few other things to be said.

In the first place, the Conservatives themselves have a black record. The Conservative Evening Standard (April 6th, 1938) says this: —

  Commander Bower’s taunt and Mr. Shinwell’s reply, with physical violence, were equally unjustifiable.
   It is . . . an unpleasant feature of the present huge Government majority that there are a number of Conservative members who are utterly unmannerly in their treatment of the Opposition, and who are ready to hurl any taunt, however offensive, across the floor of the House.

The News Chronicle (April 5th, 1938) recalls that. “for systematic brawling” it is necessary to go back to the early ’eighties (the Liberals, Tories and the Irish then had the House to themselves), when hardly a night in the whole session was free from "scenes,” and that the late Lord Cushenden “once threw a book at Winston Churchill and hit him in the eye.” In April, 1924, Mr. Amery hit Mr. Buchanan, and more recently Mr. Beckett (now a Fascist) ran off with the Mace.

When we turn from the Members of Parliament, who, presumably, ought to be able to set a good example to their constituents, and examine the conduct of the constituents themselves, we of the S.P.G.B. can say that behaviour of audiences at meetings is good.

But, then, the S.P.G.B. makes a point of allowing questions and opposition at propaganda meetings and the audiences appreciate the fact that no attempt is being made to fetter the expression of opinion.
It is interesting to notice the tribute paid by the Commissioner of Police for London to the workers who march in demonstrations. (See Report for 1936, Stationery Office, Is., p. 25.) He comments on the increased number of meetings in 1936 arising out of events in Abyssinia and Spain and out of the March of Unemployed, and says :

  But these meetings were in every case orderly, and the conduct of the unemployed marchers beyond reproach.

Shinwell and Bower should not be above learning from their constituents how to behave.

Edgar Hardcastle