Cooking the Books: No Marx without Adam Smith? (2026)

The Cooking the Books Column from the February 2026 issue of the Socialist Standard

Next month is the 250th anniversary of the publication of Adam Smith’s The Wealth of Nations. In the run-up to this, the Economist (18 December) carried an article by its ‘senior economics writer’, Callum Williams, in which he suggested that Smith had been ‘misinterpreted and his influence overstated’.

His case was that Smith wasn’t the originator of the ideas he expressed, that he copied from others and was a bad writer, and that he also made mistakes:

‘In the “Wealth of Nations”, he argued for the “labour theory of value” (the idea that the amount of work that goes into a product determines its price, rather than how useful that product is). This theory distracted economists for decades and laid the groundwork for Marxism. Exploitation, in Marx’s view, arose from the difference between how much workers had laboured to create a good and what they were paid for producing it. Without Smith, there could have been no Marx’.

The last sentence is ridiculous. There were others before Smith who put forward the view that the exchange-value of a product of labour depended on the amount of labour required to produce it. In a footnote early on in the opening chapter of Capital, Marx’s quotes Benjamin Franklin as having pointed out in 1729 that:

‘Trade in general being nothing else but the exchange of labour for labour, the value of all things is … justly measured by labour’.

Prior to Capital, in A Contribution to the Critique of Political Economy (1859), Marx credited Franklin as the person ‘who for the first time deliberately and clearly … reduces exchange-value to labour-time.’

In a podcast on the same subject on 1 January, Williams attempted to refute the labour theory of value by saying that, on the contrary, ‘what determines the price of a good is … how much demand there is for that good and how much of that good is supplied by the market’. This differs from what he had written in his article that a product’s price is determined by ‘how useful that product is’. That argument is easy to refute —there are a lot of things that are more useful than gold or diamonds yet gold and diamonds have a higher price; which, clearly, must have something to do with the fact that it is more difficult (takes more work and time) to produce gold and diamonds than it does to produce the other, more useful products.

Supply and demand determine the short-term market price but, in the longer term, supply will only continue if the suppliers — profit-seeking capitalist firms — cover their costs and make a profit. In bringing about the longer-term price the play of market forces will take into account the labour-time required to produce the product from start to finish.

Not that Marx did argue that under capitalism products exchanged at their labour-time value. He was well aware that the pursuit of profits resulted in this happening only accidentally but that the prices at which products sold could only be explained on the basis of a labour theory of value.

The reason why economists came to reject any labour theory of value (Smith’s as well as Marx’s) was that it led to the conclusion Marx reached who, said Williams, based ‘his entire theory of exploitation on the labour theory of value’. It was, he said, ‘precisely because Smith was so influential, his wrong-headedness about the labour theory of value was a big problem.’

This problem was solved, says Williams, when economic theory ‘gets wrestled back through the correct understanding of value by the marginalists at the end of the 19th century’. How convenient for the exploiters of labour, but it turned academic economics from a science into apologetics for capitalism.

Effect of the Russian Government's currency changes (1948)

From the January 1948 issue of the Socialist Standard

The Economist (20/12/47) in an article on the Russian Government’s financial changes summarises the effect as follows :

“The main effect of the reform is a redistribution of purchasing power, primarily between towns and countryside, in favour of the town. In the towns, the highest stratum of the privileged bureaucracy and intelligentsia has been shorn of some of its power to snatch scarce goods and amenities of life from the mass of the employees and workers. It would, however, be an exaggeration to say that Soviet policy has now gone hack to the uravnilovka, the egalitarian principles of the early years of the Soviet regime. What is being redressed is a social balance that has been gravely upset by the war. The reform eliminates the gross inequalities that have spontaneously grown up until recently, and that, moreover, the rulers could not but tolerate or even encourage. Having now done away with these anomalies, the Government continues to base the plans for the economic development of the country on the accepted system of incentive wages and salaries.

“This conclusion emerges clearly from a brief analysis of the new wages and prices policy embodied in the reform. ‘While the currency reform is being effected,’ says the decree signed by Stalin and Zhdanov, ‘the wages of workers and employees, as well as the incomes of peasants from deliveries to the State, and other earned incomes of all sections of the population, will not be affected by the reform. They will be paid in the new currency at the previous rates.’ The purchasing power of workers and employees will thus be relatively strengthened by comparison with the purchasing power of the peasantry. But the differential scale of wages and salaries remain in force. The reform of wages adopted early this year (see the Economist, of March 22nd and 29th, 1947) provided for a drastic extension of incentive wages ; it raised the minimum rates of output per worker by 20 to 25 per cent., and it replaced time rates by piece rates in those branches of industry and in agriculture where time rates had still been prevalent. The Stakhanovite has forfeited cash and savings which would have given him an enormous start over his less fortunate or less industrious fellow-workers in the competition for scarce goods ; but he is still able to recoup himself and to maintain a relatively high standard of living if he goes on beating records in output. The present reform is likely to make the system of incentive wages more, and not less effective than it has been hitherto.”

Notes by the Way: A Spot of Bother for the Dean of Canterbury (1949)

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

A Spot of Bother for the Dean of Canterbury

In that wrongly named book “The Socialist Sixth of the World” the Dean of Canterbury endeavoured to show that all is for the best in state capitalist Russia. On page 212 of the 1944 issue (Gollancz edition) the Dean had something to say about the leaping production of “Socialist” tobacco and cigarettes.

“Tobacco is in demand in Russia as in other lands. The supply was short so long as tobacco was imported. Today the Soviet Union produces its own tobacco, the collective farms of Abkazia grow leaf equal to the finest Turkish brands, and Soviet cigars, an innovation, rapidly find favour. Variety of brands is large and increases. Professor Hanson remarked, as we stood in a tobacco shop in the Crimea, whereas two years previously he had counted a dozen varieties, today he observed a dozen times as many in that one shop alone. In 1937 the Soviet factories turned out 89,000 million cigarettes. The Soviet Union stands second in the world amongst tobacco-producing lands.”

Now read this from the News-Chronicle (24/6/49):

“The capitalist habit of smoking must be shunned by young Russians, says Dr. A. Kuznetsov in a Soviet youth magazine.

“Russian youths, he complains, tend to ‘use nicotine’ more, though they have the brightest of futures—unlike the children of capitalist countries ‘who are led to smoke by hunger, need and despair.’

” ‘In capitalist countries where the entire pattern of life drives a man to narcotics the urge for smoking can be understood,’ says Dr. Kuznetsov. But Russians do not need it. Youth must be instructed in the harmfulness of tobacco.”

Of course we do not know what is the explanation of the Doctor’s attack on smoking by Russians. Maybe the Russian Government merely wants to cut down smoking at home in order to export the tobacco; or perhaps Kuznetsov is only giving his own view and may shortly “confess” that he is a fascist-capitalist propagandist. Until the matter is straightened out the Dean will be wondering whether he ought to go on singing the praises of Russian tobacco or whether he should just cut the passage out of his next edition.

* * *

How much Unemployment is necessary to Capitalism?

An argument is going on about the amount of unemployment necessary to compel the workers to work harder. The Labour Government’s view was and presumably still is that the present condition with relatively little unemployment gives maximum production. Nevertheless all the Ministers keep on making speeches about the necessity of getting more production.

The Economist representing the tough capitalist viewpoint has long argued that unless there is a considerable amount of unemployment the workers won’t put their backs into it. In the issue for 4th June, 1949, the Economist repeated this: “As the Economist has said more than once in the past, full employment will not work without a million unemployed.”

The Economist returned to the subject in the issue of 9th July, 1949. The Economist urged the Labour Government to recognise and act on the overriding necessity of cheaper production, and said that if the Labour Government was alive to the urgency of the problem “it would insist on payment by results in every industry where a scheme could possibly be introduced. And if there were no other way of persuading the unions and their members to give value for money, it would welcome the therapeutic effect of a moderate degree of unemployment.”

The same article disclosed another interesting aspect of the capitalist attitude to the Labour Government— they think the Labour Party can put the screw on with less trouble than could a Conservative government:

“One must hope that the Labour Party will screw up its courage to undertake something of this order—for if anybody else has to do it, there is risk of serious civil commotion.”

* * *

The Capitalist Cycle : War—Trade War—War.

“Washington, Thursday.—Mr. Willard Thorp, Assistant Secretary of State, said today: ‘ Rivalries and conflicts are again beginning to appear in the world trade picture.

” ‘Some nations and interests are seeking to take over particular markets and exclude competitors.

” ‘The post-war honeymoon in international economic relations is drawing to a close.

” ‘The U.S. has made efforts to put Germany and Japan on their feet again. But those efforts conflict with the hopes of people who wish to prevent the return of those countries into the foreign trade field.’:—Express News Service.” (Daily Express, 26/6/49.)

* * *

The Workers and Nationalisation.

When the advocates of Railway Nationalisation first started their organised propaganda the chief emphasis was laid on the argument that Nationalisation would eliminate waste and overlapping, lead to economies and reduced staffs and thus provide efficient and cheaper transport. As this was not much of an inducement to railway workers propaganda turned more towards the alleged benefits nationalisation would bring to the workers.

Now that the railways are nationalised and are running at a loss the demand has gone forth for economies so that the losses can be wiped out and a profit realised. One of the Labour M.P’s, who supports railway nationalisation, Mr. Ernest Davies (Enfield), wrote to the Times (8/7/49) agreeing with another correspondent who had said that “the most hopeful source of substantial and lasting economies in the working of British Railways lies in a reduction of the total wage and salaries bill,” and that if the average wage rate is to be maintained, man-power must be reduced.

Where Mr. Davies differs from the other correspondent. Dr. Gilbert Walker, is that he does not think it possible to cut labour costs now, it must wait until the Transport Commission has complete control of the whole of the rail and road transport system of the country.

We can leave those two disputants to argue about the best way of running capitalism but the railwaymen may well ask what they have got or will get out of nationalisation.

As a footnote we may add the following:

“Tokio, Tuesday.—The Japanese State Railways today began distributing dismissal notices to another 63,000 railway workers.” (Daily Mail,13/7/49.)

* * *

Cripps on the Standard of Living.

“The Chancellor declared that for the greatest proportion of the population we had today a better standard of living than ever before. It was fantastic to say that they were worse off.” (Daily Herald, 19/5/49, report of Cripps’ speech in House of Commons.)

* * *

Drastic Strike Powers used by Australian Labour Government.

The Australian Labour Party, administering capitalism in Australia, has got into the same kind of mess as its companion party in Britain. The coal miners having made claims for shorter hours and higher pay to the Arbitration Tribunal decided to go on strike without waiting for the award. This the Government holds to be illegal and amidst a familiar denunciation of Communist agitators it took legal proceedings to freeze the funds of the Miners’ Federation.

The following is from the Times (15/7/49):

“From our correspondent, Sydney, July 14th.— Four hundred police, including more than 200 from Sydney, are tonight spread out over the coalfields as a protective force for tomorrow, when an attempt is likely to be made to move large stocks of coal standing in trucks on the coalfields to help maintain Sydney’s lean electricity and gas ration.

“There are now six union leaders in prison, including William Parkinson, acting general president of the Miners’ Federation, and Morris Michael Fitzgibbon, secretary-treasurer of the southern miners’ district, who were both sentenced today by-Judge Foster to 12 months’ imprisonment with light labour for contempt of court by failing to produce £A4,200 withdrawn from the bank and intended to aid the strikers. Parkinson had been acting president for only a day having been chosen when the president, Idris Williams, was sent to prison.”

One Feature of the Australian Strike Deserves Notice. 

Here the Government and the Press denounce strikes because they are “unofficial.” The Australian strike is officially conducted by the Union—but it is condemned just the same.

* * *

Food Production—What Could be Done.

The following news item from Rome is taken from a Report submitted to member governments by the United Nations Food and Agriculture Organisation:

“World food production could be almost doubled in ‘a relatively short time’ by the use of modern technology.

“This estimate is made in a report of the United Nations Food and Agriculture Organisation issued here today.

“Unexplored stretches of sea await the application of modern fishery methods to unlock new food resources, it said.

“World livestock could be stepped up by at least 25 per cent, in ten years through the general application of modern breeding methods.” (News Chronicle, 13/7/49.)

Edgar Hardcastle 

Some Thoughts on Empire (1937)

From the July 1937 issue of the Socialist Standard

That sober journal, the Economist is alarmed about the future of the British Empire. Germany will seize Czechoslovakia, make herself mistress of Eastern Europe, then seize the British Colonies, and bust up the Empire. It can only be stopped by taking a firm stand immediately.

. . . the fate of the British Empire depends on the European balance of power. It is in Czechoslovakia that the destinies of the Empire are going to be decided. The Government should promptly declare that the new British armaments, as well as all our other resources, will be used to resist aggression in any part of Europe.—(Economist, March 6th, 1937.)

So the survivors of the last war, together with their sons, having once saved the slums of Britain and the Imperial connection on the fields of Flanders, are to do it again in the mountains of Bohemia. But why? Will the Balance of Power fill an empty belly or stop a hole in the roof of a working-class house? By no means! Even the Economist will agree there. But that, they will say, is only a means to an end. The Empire itself is at stake! But before we decide to meet again in Prague, let us examine this Empire business a little more closely.

What is the Use of the Empire?

When the patriots are pressed for a plain statement about the use of the Empire to the mass of its population they become very vague and unsatisfactory. Some say that it provides work and wages. The standing army of unemployed is a sufficient answer to that. As the Empire has grown larger, decade by decade, there has never been a time—except during the Empire’s wars—when there were no unemployed. The last expansion of the Empire, in 1914-1918, left the permanent unemployed more numerous than ever before.

“The Empire provides food for Britain’s workers.” The undernourished millions know this not to be true. And the Scandinavian countries, without any Empire, can show rather less unemployment and a better fed, clothed and housed population than can Imperial Britain.

“The Empire provides security and keeps the peace of the world.” The last Great War and the pervading fear of the next great war answer that stupidity.

“The Empire provides a lucrative field for investment." Now we are getting somewhere, for this is true. But who owns those invested thousands of millions ? The workers ? Not at all; their masters own them. And under that smooth-sounding word “investment” are the harsh facts of a century-old pouring-out of the capitalist-owned products of British industry for use in Empire and foreign countries. Only in the muddled heads of the professional economists does that process benefit the British workers. Nor, indeed, does it help the workers in the countries to which this wealth goes, for it remains the property of the capitalist class, wherever it may be.

What, then, is the use of the Empire? As far as the workers are concerned it isn’t worth a war. Nor is the threatened absorption of Czecho-Slovakia into Germany. Life for the workers there will not be materially different.

Perhaps the best answer to the imperialists was recently found in the patter of two knockabout comedians of capitalism, the City Editor of the Daily Express and the High Commissioner for Australia, Mr. S. M. Bruce.

The former said (quite truly as far as it goes) that British trade policy had made enemies abroad, and we needed bigger armaments to deal with the situation thus created; while the latter said that if we had not got our great imperial and foreign export trade we would not have been able to afford the £1,500-million for the bigger armaments! (Times, February 25th, 1937.) So the armaments are good because they safeguard the trade, which is good because it pays for the armaments, which are good . . . and so on.

Another Proposition

The Economist can only see two choices before us: Readiness for war to “save” Czecho-Slovakia —how the population must hope to be saved from their saviours—or the end of the Empire. Let us offer a third. The British ruling class do not care two hoots about the Empire any more than they care about Britain. What they are concerned about is their property and their profits, something as sweet as life itself—anyway, as sweet as the lives of the millions of workers they will sacrifice to safeguard their property. But should the ruling class feel that patriotic notions have become a hindrance to their interests, then we shall see them in their true colours. Then, like the Spanish grandees, they will flood their country with foreign mercenaries, pack their armies with criminals released from jail, fling black against white, Mohammedans against Christians, Protestant against Catholic. They will order the slaughter of their own fellow-countrymen without limit, like the French ruling class in 1871.

The same ruling class which will lavish lives and money like water in order to protect its trade and investments, the source of its privilege, will, if faced by a powerful demand by the working class for restitution, rush into the arms of its erstwhile enemies, the foreign ruling class groups, seeking their help to hold down the insurgent workers. The international war will be called off. The international brigands will fix up a new and “permanent” division of the loot—permanent, that is to say, for a few years, like all capitalist peace treaties. The capitalists of all nations will have won another battle in the greater war, the war of the idlers against the wealth-producers.

How can the world be made safe against war? Only by making it safe against capitalism. And until the coming of that event shall open up a new era for the human race it is the duty and the interest of the working class in all countries to have nothing to do with Imperialisms and Jingoisms. The task before us is to add to the size and strength of the forces of Socialism, and use them to exert ever-greater pressure on the capitalist class at home.

Edgar Hardcastle

Holding the baby (1953)

From the June 1953 issue of the Socialist Standard

The capitalist class own the means and instruments for producing society’s needs. The working class must sell their ability to work to the capitalist class for wages which are often not sufficient to keep them according to the conventional standard of living. Many working-class women—unmarried mothers, widowed and deserted mothers, mothers whose husbands are disabled or whose husbands haven’t a large enough wage to support the family, are forced to take a job to augment their income and send their children to day nurseries.

Remarking on such cases, the “Economist” (April 4th, 1953), wrote :—

"The cost per head of keeping a child in a day nursery varies from thirty-five shillings a week to five pounds, according to staffing ratios and amenities. The average wage of adult working women is just under four pounds ten shillings a week. As a matter of plain arithmetic, this means that full cost of the productive services of a working woman who sends her children to a day nursery may easily be both her actual wage, paid by the employer, and an equal amount paid through the local authority that looks after her children. Where several children must be cared for, the full cost may be several times the value of the product—a wildly uneconomical transaction. Where nursery costs are highest it would pay, hands down, to give the mother of two or more children, her full market wage, plus a substantial bonus, simply to mind her babies at home. That normally gratuitous job turns out, when actually priced on the market, to be more valuable than most other occupations open to those doing it."

"This hard headed arithmetical conclusion does not translate easily into practical policy. Not even the wildest speculations of welfare Utopians have included a universal payment to mothers of the market value of their work as child-minders. There might be a case for making such payments, as an alternative to the provision of day nurseries, only to those women who would suffer special hardships if they could not go out to work—to widowed or deserted or unmarried mothers, or to wives of disabled husbands. But an economic payment to such people would make them better off than many normal wives dependent on a breadwinner’s earnings.

"The problem must in fact continue to be fudged rather than solved."

No doubt this appears a very ridiculous situation to the “Economist,” the capitalist class and those who think like them—in terms of exchange value and profit and loss. But the capitalist class are not likely to endorse the obvious solution. Free the working class from the need to sell their labour power to live—a job that can only be done by the workers themselves—by making the means and instrument of production the common property of all.

J.T.

100 Years of Reforms (1945)

From the July 1945 issue of the Socialist Standard

We are indebted to “The Economist” December 30th, 1944, for the opportunity we are taking of quoting, somewhat more fully than is customary with quotations. The article which appeared in the above issue was called “Condition of the People.” We feel the editor of this shilling weekly (beyond the reading range of the average worker), will not begrudge us the liberty we are taking of so freely quoting from its columns. Our plea, in justification, being to draw attention to their review, their comments.

Now for the quotations with our few brief comments by the way.

“A hundred years ago a young and ardent revolutionary, Friedrich Engels, wrote a book on ‘The Condition of the Working Class in England in 1844.’ In the closing days of this year, it seems appropriate to attempt a review, however sketchy, of working class conditions in 1944…..

Indeed, to draw any detailed comparison between conditions in 1844 and 1944 would be a waste of time, since there can be no comparison between two incomparables. When Engels wrote his book the total population of the British Isles was less than 20 millions. People lived and worked under primitive barbarous conditions, herded together like cattle in their tenements, they were illiterate, half starved, filthy and diseased. The only relaxations were liquor, horse play and sex. Typhus and the yellow fever spread through the infested dwellings, but the toll of life was no matter because workers were plentiful and cheap.

“. . . . The infantile mortality rate was as high as 155 per thousand . . the average expectation of life in the labouring class in Liverpool was only 15 years. Not for nothing were the 1840’s known as the hungry forties. . . . There are still dark satanic mills in Lancashire and the West Riding. London still has its East End, Glasgow its Gorbals, and Manchester its Ancoats.”

Just one comment may be made here : —

Despite the amenities of life which the more fortunate workers of our day were able, before the war, to experience compared with a hundred years ago, the war years, notwithstanding their fuller employment and purchasing potentialities, find the workers, nevertheless thwarted in a variety of ways, from enjoying a higher standard of living. A few obvious factors may be mentioned; the rationing and coupon system (restricting purchases to bare necessities), black marketing racketeers, which the Government are incapable of controlling, theirs being an unconventional way of buying and selling, with the profit motive the one and only objective —i.e., Capitalism. The “black market” therefore, rules on the luxury or “extra comforts” line.

On top of all this is the aggravated misery of average home life occasioned by the bomb, black out, plus overcrowding which housing shortage causes.

Astutely, the ruling class have also fostered, on a gigantic scale, “national savings,” thereby encouraging the workers to “deny for the sweet by and by.”

The “Economist” continues : —

“But whatever the improvement in health and nutrition, the problem of the rich and the poor, the inequalities of wealth have not been eliminated. Disraeli’s ‘Two Nations,’ still exist. The most recent estimate of the distribution of property, that of Mr. H. Campion, shows that in 1936, out of a total of 16-17 thousand millions of private property …. approximately 85 per cent. was held by 1.8 million persons, or 7 per cent. of the total adult population. Moreover, three quarters of the adult population possessed less than £100 worth of property and 1.5 per cent. of the adult population had property of £10,000 and over. These estimates show that whatever levelling up at the bottom may have taken place and however the relative share of the middle classes in property may have increased, the property structure of Society has not altered fundamentally. (italics ours).

“Mr. R. Titmuss in his “Birth, Poverty and Wealth,” showed that before the War, the infant mortality rate among middle and professional classes was 33 per 1,000 live births, compared with 77 among unskilled labourers.. The class divisions are even sharper in Education. The calculation that only 2 per cent. of the population go to public schools, yet 57 per cent. of the members of Parliament come from the public schools is a striking illustration of the existence of privilege.”

The “Economist” quoting from “Birth, Poverty and Wealth” ibid :—”unsatisfactory sites of homes and villages, insufficient supplies of water, unsatisfactory provision for drainage, grossly inadequate provision for the removal of refuse, widespread absence of decent sanitary conveniences, the persistence of the unspeakably filthy privy midden in many of the mining areas, gross overcrowding and huddling the sexes together in the congested industrial towns and villages, occupation of one roomed houses by large families, groups of lightless and unventilated houses in the older burghs clotted masses of slums in the great cities.”

As the “Economist” says, “the above is not a passage from Engels, it is an extract from the report of a ‘Royal Commission on Housing in Scotland in 1917’ quoted in the 1944 report of the Scottish. Housing advisory Council, with the comment that: ‘these evils have been only slightly mitigated by housebuilding between the two wars.’

“. . . . 40,500 houses in Scotland still have no independent water closets and no sanitary conveniences of any kind. Conditions in Scottish mining areas, according to the recent report on the Scottish coalfields ‘can only be described as deplorable.’ The facts disclosed by the evacuation survey ‘Our Towns’ in 1943 can only be understood against the demoralising background of slum conditions. Public opinion was understandably appalled at the descriptions, unemotionally related by trained social workers, of the dirty and verminous children ridden with scabies and other skin diseases, with disgusting sleeping and feeding habits, of the negligence and fecklessness of their parents. It showed how ignorance and folly were exploited by all kinds of money lenders, clothing clubs, insurance touts, quack doctors and vendors of patent medicines …. they belong to the ‘submerged tenth’ the ranks of the unemployables and the ‘irreducible minimum.’”

The “Economist” concludes on a note of appeal to authority, the Government, to be progressive in a policy of social reform. The “Economist” puts it like this, to quote again from their article : —

“‘Progress’ said Herbert Spencer, ‘is not an accident? It is, or should be, conscious policy, and that policy should be directed towards raising the level of the lowest paid. . . . The year 1945 which should bring the end of the War, will provide an unparalleled opportunity for progress towards these aims . . . reforms in education, health, housing and social insurance . . . family allowances. . . . Whatsoever Government is returned to power it will be committed to this programme of social reform.”

Concluding and summing up the “Economist” says :—

“But to say that there has been progress since 1844 is not enough, the question is whether the advances in social conditions have been commensurate with technical and scientific progress of the nations productive capacity, and the answer, on all the evidence can only be in the negative.” (italics ours).

The above quotations should be a reminder to the working class in their political struggle for emancipation from Capitalist exploitation. A hundred years of reforms, in which Conservative, Liberal and Labour have played their part in advocating, not forgetting the “revolutionary” reforms of the Communist Party.

The Socialist Party again reminds the working class that so long as the means of life remain the private property of the capitalist ruling class, they must remain enslaved to that class. It is the function of the defenders of private property to advocate and institute reforms, thereby prolonging the privilege of the capitalist and their apologetic professional political decoys. Likewise, it is equally necessary for the working class party, the Socialist Party, to be uncompromisingly hostile to, and independent of all other political parties. Because we are convinced of this truth, we are confident, that the workers will join with us in the task we have in hand. That task is the establishment of Socialism—the common ownership of the means of production and distribution—a revolutionary objective, to avert which capitalism will offer every reform under the sun. For such reasons the Socialist Party need not waste time in their advocacy.

Billy Iles

The Welfare State (1950)

From the June 1950 issue of the Socialist Standard

All the major political parties applaud the Welfare State. They vied with each other, during the election campaign, to claim credit for bringing it into existence. The Conservatives made the most of the fact that the government which set up the commission to inquire into the problem of reorganising the social services was a coalition Government predominantly Tory. The Liberals claimed their share of the glory because Sir William Beveridge, who gave his name to the report, was chairman of the Commission, and a Liberal. To the Labour Government was left the triumph of passing the legislation.

The truth about it all was that the so-called “Welfare State” arose not through the good will of any political party but because of the need to adapt the social services to the changing condition of capitalism. The need to allay any possible working class discontent after the war. Of course, it was a benefit to the health of the working class. That was another reason. To take advantage of post-war conditions and capture as many foreign markets as possible it was necessary to increase production. To do this a healthy efficient working class was needed.

But the capitalist class give with one hand and take back with the other.

The New Statesman and Nation, criticizing the Daily Mail's handling of the figures which led to the headline “Father Pays £34 9s. a year to Put Family of Four on the Panel,” makes some calculations of its own and comments:—

“This would make ‘fathers' payment for health services (Daily Mail calculation) around £23. or almost equal to the estimated benefit (Marshal Aid calculation) which a family receives under the scheme.”—(April 1st. 1950).

From these figures, as far as the health services are concerned, the working class are just getting what they pay for. The Economist in an article deals with the total social expenditure, and it quotes from the report of the E.C.A. Mission to the United Kingdom, “Facts about the British Economy.” Publishing a.table giving the Mission’s estimates The Economist writes: —

“The left-hand side of the table puts the total social expenditure for an average family—on the assumption that the population can be divided into families of four persons—at 57 shillings a week, including expenditure from the local rates and from the national insurance funds. The right-hand side of the table gives estimates of taxes paid by lower income families in 1948, taken as those with an income of under £500 in 1947. The total taxes estimated to be paid by such families who make up about 80 per cent. of the population, were larger than the whole of current social expenditure.” (The Economist, 1/4/50).

The socialist view is that the Welfare State won't abolish the poverty problem which confronts the working class out is just the best method the capitalist class have devised to distribute wages from the point of view of efficiency. When the Beveridge Report, the blue print of the Welfare State, was published, the Communist Party, the Labour Party, the Liberal Party and some sections of the Tories were in favour of it. The Socialist Party of Great Britain thought fit to publish a pamphlet putting forward the socialist view. It had the title “Beveridge Re-organises Poverty.” How right it was! The Economist thinks that way too. It later continues: —

“Since it is the lower income groups which benefit mainly from social expenditure the report says ‘the social expenditures are chiefly financed by transfers of income within the lower income group, in accordance with variations in the patterns of consumption, family size, etc., rather than by transfers between different income levels.’ ” (The Economist, I /4/50).

J. T.

50 Years Ago: The Reason for the Show Trials in Russia (1987)

The 50 Years Ago column from the June 1987 issue of the Socialist Standard

The Moscow correspondent of the Economist (February 27th, 1937) provides the answer to the question why did the Russian Government need the recent trials? It had to explain the breakdown of the grandiose five-year plans. This breakdown made it necessary to fend scapegoats, since no dictatorship ever dare let the population know that the dictator and his advisers may themselves have pushed their plans to a point where they became top-heavy and unworkable. Only, now that scapegoats have been found, is the population being told how badly some of the plans have worked:

Now that veteran Bolsheviks have confessed to deliberate sabotage in several major industries, the Government permits its people to learn of distressing conditions hitherto kept From them. Sabotage explains everything; revelation of gross inefficiency need not cast discredit upon central planning, which without some such explanation, might come into disrepute.

Official newspapers now reveal that conditions are most unsatisfactory on the railways. and in the non ferrous metal and chemical industries. Plants were designed hastily without an adequate knowledge of raw material resources. Capital was invested in the "least advantageous fields and those which presented the greatest difficulties for exploitation." For example, where lead and zinc ores were found together, only one or the other was utilised, Plans for new factories were altered locally, which resulted, according to one official newspaper, "in complete irresponsibility and confusion."

[From an article, The Reason for the Russian Trial, in the Socialist Standard June 1937.]

Cooking the Books: Capitalism: whose bonanza? (2024)

The Cooking the Books column from the January 2024 issue of the Socialist Standard

‘Few ideas are more unshakable than the notion that the rich keep getting richer while ordinary folks fall ever further behind. The belief that capitalism is rigged to benefit the wealthy and punish the workers has shaped how millions view the world, whom they vote for and whom they shake their fists at.’ 

So began the editorial in the Economist, 30 November.

The editorial went on to argue against this view by saying that the facts showed that income inequality, in the sense of the ‘wage gap’ between the lowest paid and the highest paid workers has not increased and that it is likely to decrease in coming years, describing this as a ‘blue-collar bonanza’. But this is a sleight of hand as it leaves out the incomes of the few who enjoy a privileged, non-work income from owning means of production.

Of course the owners keep getting richer. That is what the capitalist system is all about. It’s about money being invested in production with a view to making a profit. Competitive pressures ensure that most profit is re-invested in further production for profit. So capital accumulates and those who possess what it is invested in come to own more; they get richer. So, yes, capitalism is rigged — structurally determined — to benefit the wealthy as a class, however the proceeds might be divided amongst them.

Does capitalism ‘punish the workers’? Yes, though that’s a novel way of putting it. The source of profit is what wage-workers produce over and above what it costs them to produce and maintain their working skills. A part of what they produce is kept by their employer and subsequently divided into various privileged non-work incomes. In other words, they are economically exploited. Which could be described as a punishment. In any event, it’s a built-in part of the capitalist economic system.

But does the gap between the lower and higher paid workers have to increase? There is nothing built into capitalism that means it should. Wage differentials exist because the different kinds of working skills that workers sell command a different price, due both to their different costs of production and maintenance and to the varying demand for them. Sometimes the gap increases. Sometimes it decreases. Sometimes it stays the same. It depends on the job structure and labour market conditions in any period.

The editorial itself gives a good example of how changing labour market conditions can affect wage differentials:

‘At the end of the 20th century the information revolution vastly increased the demand for college graduates with brains and computing skills. From Wall Street to Walmart these stars were put to work transforming how firms did business, making use of new tools including email and spreadsheets. By the mid-2010s, however, the revolution had matured and the college wage premium began to shrink. In 2015 the average rich-world worker with a bachelor’s degree or more was paid two-thirds more than the average high-school leaver; four years later, the gap had narrowed to a half.’

At the same time there is a labour shortage for certain manual jobs. But will this really amount to a bonanza for blue-collar workers or just the prospect of a modest increase in wages due to their being in a better bargaining position? And what about the other section of the wage-working class that is losing out? It could just amount to no more than a redistribution within the broad working class. In any event, it doesn’t put an end to workers’ economic exploitation for profit. Meanwhile capitalism remains a bonanza for those who own the means of living.

Is Increased Production the Solution? (1944)

From the November 1944 issue of the Socialist Standard

Under the heading “Britain is Old-fashioned in Industry,” the Evening Standard (October 11th, 1944) reports speeches made at a Conference of the National Council of Women of Great Britain.

“Miss Barbara Ward, assistant editor of The Economist, said Britain must produce more goods and means of production must be more efficient.

Increase in a nation’s wealth depends on the amount of machine power behind each pair of hands.

We have fallen behind in industrial development, she declared. ‘We are old-fashioned.’

Thorough inquiry should be made into each industry—for instance, the steel industry—to discover why our costs were higher than those of other nations.

We should use our utmost enterprise and labour to increase our standards of living, she said.”

Miss Ward has failed to draw the logical conclusion in regard to what would happen if her suggestion were followed. If all nations become more efficient, and competition will force them to do so. then we shall be where we were—before the war.

“Increase in a nation’s wealth depends on the amount of machine power behind each pair of hands.”

Is not this also the cause of a nation’s poverty ? The amount of machine power behind each pair of hands in the United States before the war was greater than in any other country, and so was the amount of relative unemployment and poverty.

The assistant editor of The Economist is apparently unaware of the fact that the aim and object of capitalist production is not the production of wealth, but the production of profit.

Profit is something for nothing.

It is impossible to make something out of nothing, but the capitalist class give nothing and obtain abundant wealth for themselves as a result of playing a flim-flam game.

Labour applied to the natural resources of the earth produces all exchange values. The capitalist class do not labour, therefore they do not produce any wealth. They live by ownership. They own what is essential to the existence of the rest of us.

They allow us to produce exchange values for them in the shape of commodities under certain conditions. Before we are allowed to work we must agree to sell our wealth-producing material, our mental and physical energy, to them at its cost of production—that means, roughly, what we can live and work upon.

When we are working our energy is the property of those who have bought it, and what our energy produces the capitalist claims as his. Wages consist of the food, clothing and shelter the money will buy. The food, clothing and shelter the worker obtains as wages are all produced by those who labour, not by the capitalist class.

Consider the mighty effort of the working class during the war, and what they have lived upon, while doing it.

“Never in the history of human endeavour” has so much been produced on so little.

The working class have brought into being all the airplanes, guns, ships, etc., that were necessary to the carrying on of the war. What is to be their reward? The brutal truth is that capitalism cannot give them anything to compensate them for their efforts. The capitalist class will, however, continue to obtain their surplus values, rent, interest and profit.

The workers, however, expect to be placed in a better position after the war than they ever were before. The interesting point is how are Ihe ruling class going to devise ways and means of continuing the exploiting process. As a result of their experiences on the batlefleld in various parts of the world, many of the wage slaves are beginning to realise that there is something fundamentally wrong in capitalist society.

They will not be easily handled in the piping times of peace and will be harder to deceive.

Bevin says, “There will be unemployment but victory is worth it” (see Star, October 11th). The victory is the victory of the capitalist class, although the fighting, etc., has been done by the working class. If there is nothing for the workers after the war, what have the workers won? The capitalist class still remain in secure possession of the means of life; the land, railways, mines and tools of industry still remain in their possession.

The workers are where they were. Unemployment can be depended upon to keep wages down to that low level that is strictly in accord with capitalist interests, and then the same old grind.

Those who have acquired wealth during the war out of Army contracts, black markets, etc., will return when peace is proclaimed and disport themselves in the charmed circles of society. Many of the workers, however, who have endured the agonies of the struggle and lost their loved ones in the process, will line up at the Labour Exchange or apply for the sweet charity of the Public Assistance Committee. The means test will continue to be applied—to the working class. Homes are to be built—by whom? The landlord class are anticipating pickings when they receive compensation for the property that has been bombed. The financier will come into his own when deflation occurs—some time after the cessation of hostilities. The capitalist will have the wage slaves controlled for him by the Government, assisted by the labour leader. All sections of the ruling class will be compensated—at the expense of the wage slaves.

Everything in the garden will be lovely, as usual, for those who neither toil nor spin.

How long, fellow workers, how long? Can you not see that until the means of life are made common property there is no security for you ? Can you not see that you are doomed to the eternal treadmill of wage slavery and misery so long as the capitalist system shall last? We must do away with production for profit.

We must no longer allow the exploiter to continue to live by obtaining something for nothing. Production for use must be made to take the place of production for sale.

We are the vast majority.

      Let us stand together,

           All we have to do is to will it.

      And the world is ours.

Let us get hold of the State, the public power of coercion, and use it to make the ruling class let go their hold on our bread and life. Those only are Socialists who stand for Socialism; those who stand for less are the allies of our enemies.

The Socialist Party of Great Britain stands exclusively for Socialism; no other party in this country has the courage to do so—at election times.

We propose to run candidates for Parliament on the issue. Socialism or Capitalism—which?

We want you to help us. If you are with us, let us know of your existence. The fight is on.

The useful portion of human society have one common enemy—the exploiting system under which we live. Miss Barbara Ward suggests that by increasing the productive power of the slave-exploiting mechanism the slave would benefit. She fails to perceive that the worker is not paid for what he produces, but for what it costs to produce him. Her remarks enable us to realise, how weak the defenders of capital have become. Against the united advance of those who live by selling their labour power, the capitalist class are absolutely helpless. The interests of the workers are identical on the class field. The class issue is ownership.

The enemies of our class will discuss anything but the real issue. It is never raised in Parliament. It will never be prominent in the capitalist press. The very thought of a revolutionary Socialist Party fills the exploiter with fear and foreboding.

Although we hold the largest meeting in Hyde Park, we are rarely mentioned in the public press.

Has word gone round that attention must not be drawn to our existence? Capitalist politicians read the Socialist Standard and listen to our speakers, but all are faithful members of the conspiracy of silence.

The Labour Party is now always referred to as The Socialist Party, although not one of its members stands for Socialism or has been elected on the Socialist ticket.

Why the silence and deception?

The reason is that the ruling class know what we are out for, and they do not want the bulk of the workers to become interested in the issue.

Working class emancipation is, however, on the order of the day.

Line up and do your bit—

The freedom of humanity is at stake.

When the wage slaves free themselves from capitalist bondage, they free mankind for ever from economic servitude and the fear of war.

Society can then assume a higher form. There can be no such thing as freedom for the individual so long as some people own that upon which all people depend.

Socialism will give man the opportunity to express the noblest and best that is in him.

In capitalist society the bias is on the wrong side. The worst man has the best chance.

To change capitalist society into a newer and better social order is the job of the common people; it is a working class proposition.

Moving circumstance is slowly but surely removing the web of lies which the henchmen of our masters have been spinning for generations. Take your place, comrade. You should know by now what you are called upon to do. Demand Socialism now. Support only those who do the same.

Charles Lestor

Pathfinders: Socialism – read instructions carefully (2022)

The Pathfinders Column from the October 2022 issue of the Socialist Standard

If you like podcasts you could do a lot worse than The Secret History of the Future, an engaging co-production between Slate magazine and The Economist (bit.ly/3xfrXKL) , which looks at new horizon tech and explores how its historical antecedents often go back a surprisingly long way. Did you know, for example, that the first ‘AI’ chess machine appeared in the 1790s and that, like most of today’s AI, it was a hoax; that the first hackers to exploit a wireless communications system were arrested in the Napoleonic period; or that the first ‘online’ wedding took place in Boston in the 1840s?

What’s curious about new technology is how badly people sometimes react to it. You may recall, a few years ago, that Google launched Google Glass, the smart specs that were supposedly going to take the world by storm and instead incited an overwhelmingly hostile reaction from the public, who suspected wearers of creepily recording them. This reaction seems slightly less strange, say the podcast presenters, when one considers the public outrage that was caused by 17th century attempts to reduce injuries from sharp knives by introducing the fork (irascible aristos had a tendency to stab each other during spats over dinner).

Sometimes, as with the earliest electric car (1890) and the first hydrogen fuel cell (1842), the technology arrived long in advance of the social infrastructure capable of supporting it. Some, like Babbage’s 1837 Analytical Engine, the first general-purpose computer, simply couldn’t be built with the tools of the period. In other cases, such as the 1920s Flettner rotor, a clever low-energy wind propulsion system for shipping, the tech didn’t catch on because conventional fuels (in this case, fossil) were considered easier and cheaper (Flettner rotors are now being trialled on some Maersk container ships).

Sometimes a perfectly good technology could become the victim of its own hype. The podcast has yet to cover the story of how bacteriophage therapy, once the specialist preserve of one Georgian clinic, became so overblown in the free-market West as a miracle cure for everything from baldness to impotence that it was discredited as snake-oil quackery and forgotten for almost a century. It is only now being rehabilitated as a possible approach to addressing the global antibiotic crisis caused by capitalist big pharma finding it more profitable to research cures into, er, baldness and impotence.

Bearing all this in mind, it’s easy to see that innovations can fail for all sorts of reasons, and not because they’re intrinsically bad.

This is rather how we think of socialism. What started as a brilliant, innovative and far-reaching idea when first proposed was then misapplied and distorted in practice with such disastrous consequences that the theory was utterly discredited, and its name almost spat as a term of abuse.

But not forever. Eventually, perhaps inevitably, people decide to revisit the original proposition. It might happen out of sheer academic curiosity. It might happen because things change and the ‘conventional fuels’ turn out not to be cheaper and easier after all. It might be because people realise that old ideas can still be good, or that society just wasn’t ready for them the last time round, or that what was delivered in the packaging wasn’t what was described in the advertising blurb.

So they investigate what socialism originally meant, which is what we still mean by it. And at this point they start to see some glaring discrepancies between the idea, properly described, and the popular interpretations and applications that were later implemented.

They discover that, contrary to popular wisdom, socialism did not mean big states nationalising corporations and controlling everything, and perhaps turning everyone into brainwashed uniformed zombies. It meant a ‘free association of producers’, in Marx’s phrase, cooperating democratically without bosses to live full and rich lives, with no need for coercive states, markets, corporations or indeed nations. They learn that, contrary to common left-wing parlance, socialism and communism meant the same thing and that the one was in no sense a ‘transitional period’ towards the other, with an elite crew of Party bureaucrats helpfully in charge and giving the orders. They learn that, far from socialism being an economy of high taxes and state welfare for the poor, it is in fact a society with no taxes (or states), no rich, no poor, no ‘economy’ as such and no money. They learn that, instead of the Trotskyist formula ‘those who don’t work, don’t eat’, socialism is based on the principle ‘from each according to ability, to each according to need’, the two being decoupled not linked, and self-defined, not imposed by diktat. And of course they learn that the state capitalist regimes of the USSR, China, Venezuela, Cuba, North Korea, Cambodia, etc, were one-party dictatorships which had nothing to do with socialism, for all that they hoisted banners of Marx and Engels to give themselves a bit of spurious legitimacy.

A slew of popular polls in the last few years have shown a reversal in political trends, with young people increasingly seeing ‘socialism’ as a positive term and ‘capitalism’ as negative. This is encouraging and needs to happen, given how obvious it is that capitalism is wrecking the planet for the sake of profit and perpetual market growth. But it’s no good if people still think socialism means some insipid state-interventionist placebo touted by centre-left careerists in sharp suits, or else sloganeering Stalinist wannabes exhorting you, comrade worker, to throw yourself against the guns to win them the dictatorship of the proletariat.

New technology is often preceded by failed misdirected attempts. It succeeds when people finally understand what it is, why they need it, and how to apply it. Socialism is like this, the smart app that will be the world’s biggest upgrade since the plough, and which one day people won’t believe they ever did without. But before that, get yourself a user manual.

Paddy Shannon

Of Mice and Men (1950)

From the April 1950 issue of the Socialist Standard

According to The Economist (25/2/50), Mr. Herbert Morrison regrets that the activities that take place in the Stock Exchange are influenced by politics.

The society we live in is called capitalism. It received that name because “capital,” strictly speaking, money invested to gain more money, is the driving force in the production of society’s needs. This money is spent on means and instruments of production, fields, factories, raw materials, machinery and the buying of labour power, and under present conditions most of the money is invested in huge companies and state concerns which produce the bulk of the goods and services society requires. The title to ownership in those organisations is stocks and bonds, and the main market where they are bought and sold is the Stock Exchange. In the commodity market when prices rise this shows which goods are in demand and the production of these goods increases until supply overcomes demand and prices fall. So in general the price of shares on the Stock Exchange rise and fall under the influence of the same kind of factors. The Stock Exchange is a necessary adjunct of capitalist society. Mr. Morrison realises this: he “presumes the Stock Exchange has useful functions to discharge,” and says, “We ought to recognise that in our money and industrial system such an institution may well be necessary,” but Mr. Morrison “would urge them not to allow the political straws to affect investments.”

To this criticism, Mr. John Braithwaite, the Stock Exchange chairman, very effectively replied: —

  “It is quite true that prices are influenced by the ebb and flow of opinion as to the result of the election as they are by every form of news and opinion on domestic or foreign affairs that has any bearing on the investment market. . . .

  

“What Mr. Morrison seems not to understand is that movements of prices are not made by the whims or wishes of members of the Stock Exchange. They are the result of the actions of countless individuals and institutions all over the country and by no means all of one political persuasion who are moved by countless different reasons to send instructions to the Stock Exchange to buy or sell securities. . . . These are the tides of business influenced by economic and political conditions the world over. . . . The Stock Exchange can no more control or influence those tides than King Canute could order the tides of the sea.”—(The Economist, 25/2/50.)

What chance has Mr. Morrison and the other Canutes of the Labour Government planning a system like that? Even a Cabinet with the alleged talents of the Piddingtons wouldn’t have a chance.

Mr. John Strachey, Secretary of State for War in the present Labour Government, a few years before the war made the following statements in “The Nature of the Capitalist Crises”; they bear repeating: —

  “The whole of the present official leadership of the British workers looks forward, like G. D. H. Cole, to the possibility of an organised or planned high wage paying and centrally controlled capitalism. . . .

   "Unfortuntely, however, as we have seen, whatever else may happen upon this uncertain planet, the establishment of a planned, stable, high wage paying capitalism is impossible” (page 354).

Planning is only possible when goods are produced for use and not for profit, and at the present stage of social development with the gigantic social productive forces production for use implies common ownership of those productive forces—in a word, Socialism.

J. T.

Is Another Slump on the Way? (1937)

Editorial from the April 1937 issue of the Socialist Standard

Professor D. H. MacGregor, in his “Enterprise, Progress and Profit,” has proved that there is a “trade cycle,” a regular succession of booms and slumps. The Economist (March 6th, 1937) is highly gratified that this question has been settled, but is reluctant to admit that the next slump cannot be very long delayed. According to MacGregor’s reckoning, the period between slumps in this country before the war averaged 8¼ years, though running sometimes to as much as 10, and sometimes to as little as 5, years.

What the Economist does not relate is that Fourier, Marx and Engels, Hyndman and others, had grasped the essentials of the trade cycle long before MacGregor was born.

Frederick Engels wrote the following in his “Socialism, Utopian and Scientific,” in 1877: — 

  We have now, since the year 1825, gone through this five times, and at the present moment (1877) we are going through it for the sixth time. And the character of these crises is so clearly defined that Fourier hit all of them off when he described the first as “ crise pléthorique,” a crisis from plethora.

Again, in an article in the London Commonweal, March 1st, 1885, Engels said: —

  Forty years ago England stood face to face with a crisis, solvable to all appearances by force only. The immense and rapid development of manufactures had outstripped the extension of foreign markets, and the increase of demand. Every ten years the march of industry was violently interrupted by a general commercial crash, followed, after a long period of chronic depression, by a few short years of prosperity, and always ending in feverish over-production and consequent renewed collapse.

It is, after all, rather funny that the people who all agree in regarding Marx out of date should be so far behind him in understanding their own capitalist system of society.

The Last Crisis

All the bankers, politicians and business men who have been pondering over the threatened next crisis are confident that it can and will be prevented. ”Something will be done,” they say. Unfortunately, they cannot make up their minds what that something is. The Economist's most helpful thought is that “since the War in fact suspended the working of the cycle, human action can plainly suspend it—if that action is sufficiently violent and sustained.” (Economist, March 6th, 1937). But even that blighted rose has a thorn, for the writer goes on to say that “suspension is not abolition.”

While we cannot place any hopes in the ability of these gentlemen to prevent the next crisis, because that can only be done by abolishing capitalism, we are entitled to ask whether they are even competent to recognise the nature of crises. Did they, for example, recognise the inevitable approach of the last one, or understand it when it happened ? The answer is an emphatic No!

Mr. Alexander, City Editor of the Evening Standard, who informs us (Evening Standard, January 22nd, 1937) that “we shall never have a slump like that again,” is one of the many experts (another was Mr. Francis Williams, formerly City Editor, now Editor of the Daily Herald), who believed that gold would lose its value entirely as a result of the so-called abandonment of the gold standard!

The Bank Chairmen, in their speeches at the annual meetings this year all advised a return to Free Trade as a means of avoiding the next slump, as if crises did not occur just as unfailingly under Free Trade as under Protection. What were these gentlemen saying before the last crisis, which was coming to a head in 1929? In their speeches in January, 1929, they were blandly ignorant of the precipice before them. The Economist at the time (February 2nd, 1929) could record that "the first thing to strike the reader of this year’s speeches is an air of quiet confidence in the country’s industrial future.”

More than that, Mr. McKenna, Chairman of the Midland Bank, could find that “considerable progress has been made towards a more ordered and prosperous world.” The Economist added, "while recovery was certain, it would be a slow process.”

In other words, in 1929, when they were at the top of a boom, following expansion after the former crisis of 1921-22, these experts did not know it, they thought they were in a depression! The financial mountaineers who were perched on the edge of a precipice thought they were climbing out of a valley!

In January, 1930, when the crisis had already shown its symptoms for all to observe, Mr. Goodenough, of Barclays Bank, cast his eyes over the previous year and could see “some improvement” in trade, and the depressed trades showing “substantially better figures." (Economist, January 25th, 1930.)

In January, 1931, just before the full force of the crisis had struck this country, the Bank Chairmen were arguing learnedly with each other as to whether high wages, maldistribution of gold, or other causes were mainly responsible. They were, says the Economist, “by no means wholly in agreement." (Economist, January 24th, 1931.)

These are the gentlemen who are going to ward off the next crisis!

What Hopes for the Next Crisis?

The bankers advice to trust to Free Trade and discouragement of speculation as means of preventing a crisis are merely fatuous. But most of their critics are in no better case. The Editor of the Daily Herald has for years banked on freedom from the gold standard as the surest means. But he based that view on the myth of a shortage of gold. We need only recall that gold production has been mounting all over the world to record heights in defiance of the learned report of the League of Nations “ experts," who predicted a steady decline.

Another Labour Party remedy is “high wages," but it is only a few years since these same people were assuring us that “high wages" in the U.S.A. had already done the trick, and brought permanent prosperity. Henry Ford, we were told, had proved Marx wrong! Mrs. Mary Agnes Hamilton, one of the influential members of the Labour Party and I.L.P., friend of MacDonald, wrote in the Daily Herald (January 20th, 1926) about this permanent prosperity. She had visited the U.S.A., and found

  prosperity so widespread and, since the temporary setback of 1921-22, so continuous, that unemployment, except in localised and special groups . . . has vanished.

But it all came to nothing. Mr. Ford hadn’t proved Marx wrong. The “temporary setback" of 1921-22 was duly followed by the year-long “temporary setback" of 1929-1933.

Now the Daily Herald (February 5th, 1937) has found new gods, in Mr. Keynes and President Roosevelt, and applauds their proposals.

  Our Government should be at work on the idea (of economic planning). It should appoint a central planning committee at once and tell it to prepare a plan of special anti-slump public works now.

Another piece of sticking-plaster for an earthquake.

There is a further useless idea Mr. Keynes and the Labour Party have in common, the transfer of wealth from capitalists to workers by means of taxation. It is based on a fallacious theory, but we need not worry about theory, since the facts are known over a long period of years. Those facts are that income tax, death duties, excess profits taxes, etc., have completely failed to stop the accumulation of still greater fortunes in the hands of the rich, and have left the poor as they were. That is capitalism.

In short, all who cherish the hope of keeping capitalism and avoiding crises are in for yet another disappointment.

Is the gap between rich and poor narrowing? (1946)

From the April 1946 issue of the Socialist Standard

  “But what is necessary is a very great reduction in our present economic equalities.
  “This implies that, while the average level of wellbeing must be greatly raised, the rich shall become poorer and the poor richer.
  “The span of individual incomes in this country runs from well over £50,000 a year to much less than £1 a week, a ratio of much more than one thousand to one. This is grotesquely wide.”

(“Practical Socialism for Britain,” Hugh Dalton, pp. 319.)

Is the gap between rich and poor narrowing?

This is the monotonous theme of both Conservative and Labour propaganda—and Liberals as well. In fact, all reformists—busy reforming capitalism—keep telling the workers how much good their reforms have done.

The Conservatives have published “How Conservatives Have Helped the British People,” listing 94 pages of Acts passed by the Conservatives, showing “that the bulk of the social and industrial legislation for the benefit of the people since the beginning of the nineteenth century has been passed by Conservatives.”

Pamphlets like “Labour on the March,” by the late Geo. Ridley, start by describing the appalling conditions of the last century and proceed to enumerate the Bills introduced by the Labour Party as the reason for the “great” improvements.

  “What I have so far written has been an attempt to show that the great social changes in the last forty or fifty years have been due to the growing powers of Labour in every sphere of its activity . . .
  “Up to 1906 the Statute Book, was almost barren of social legislation . . .
  “Then there came a most perceptible change. Labour was on the march. . . .
  “Great changes have resulted—in all directions. The young, the aged, the unemployed have all greatly benefited by these changes. . . .
  “These changes, however, have done no more than relieve the worst evils of our social and economic system.”
(“Labour on the March,” by G. Ridley, M.P., Published by Labour Party. Pages 10 and 11.) 

Quite apart from every working-man’s own personal knowledge an array of facts refute the claim that the social position of the working class is being “improved.”

  “The total value of property in Great Britain has been estimated by Mr. H. Campion to be about 13,090 millions in 1911-13, 24,570 millions in 1926-28, and 25,560 millions in 1932-34. About 90 per cent. of it was privately owned.”
("Facts for Socialists,” Fabian Society, p. 18.) 

“Eighty per cent. of the private property of the country is owned by 7 per cent. of the population.” Sir William Beveridge. 

Further, the Economist of December 30th, 1944 (requoted in The Socialist Standard of July, 1945), showed Mr. Campion’s estimates proved that
  “The problem of the rich and the poor, the inequalities of wealth have not been eliminated. . . .

  “These estimates show that whatever levelling up at the bottom may have taken place and however the relative share of the middle class may have increased, the property structure of society has not altered fundamentally.”

The Economist also very soundly pointed out the futility of comparing incomparables, which is what reformist propaganda does.

  “Indeed, to draw any detailed comparison between conditions in 1844 and 1944 would be a 'waste of time’ . . . People lived and worked under primitive and barbarous conditions, herded together like cattle in their tenements; they were illiterate, half-starved, filthy and diseased. The only relaxations were liquor, horse-play and sex. Typhus and the yellow fever spread through the infested dwellings, but the toll of life was no matter because workers were plentiful and cheap,”
(Economist, 30th December, 1944.) 

The abolition of these conditions is, even in the absence of an organised political Labour Party, the normal process of developing capitalism. It has nothing whatever to do with Socialism—and does not lead to it.

Many competent employers have introduced Welfare Schemes, free Medical and Dental Treatment, thrift Schemes and educational courses, entirely on their own initiative.

Modern employers do not want drunken lecherous hooligans, they are inefficient and unprofitable.

“Social legislation” is really for the maintenance of the supply of efficient, healthy value-producers.

Every “improvement” in the position of the wage-earner, as wage-earner, merely makes him a better producer of surplus value—and therefore more profitable.

This is all that the Labour Government’s elaborate nationalisation schemes will do, resulting eventually in greater unemployment and “miserable poverty” than ever.

Some indication of the vast “improvement” in the position of the workers as a result of both Tory and Labour social legislation is provided by the “evidence” advanced by these parties in their propaganda.

Thus the Tories, in “Forty Years of Progress,” declare that:

  “As long ago as 1934 over 4,000 cinemas, each the product of the century, were providing seats for nearly four million people at round about the rate of one seat per night among every 12 persons. And the money freely circulating in dog racing, horse racing and the football pools, patronised in the main by those who rank as the poorest among us, indicates clearly the large amount of free money available in the country.” (pp. 8.)

While the Labour Party in Hampstead listed as one of its main election slogans in the recent Municipal Elections—the “Provision of a local Employment Exchange to avoid travelling and inconvenience for workers.” (As though one can be a worker without “inconvenience.” 1).

From all of which it appears that the worker intent on “improvements” without abolishing capitalism can vote Tory for “More and better dog tracks,” or Labour for “Bigger and Better Labour Exchanges.” Even a modern electronic microscope fails to reveal any real difference basically between Labour and Tory programmes.

Mr. David Stelling, in “Why I am a Conservative,” published officially by Conservative Headquarters (1945), says:

  “The Conservative approaches new problems—and today they are all new—with an open mind . . .
  “If nationalisation of a public service—or national control of an industry—appears to be the best course, he is prepared to adopt it.” (pp. 14.)

As time proceeds the normal course of the “Ins” and the “Outs” will operate, with Tories becoming more “concerned ”than ever about improvements for the workers to get votes, and Labour Ministers “rising to their ministerial responsibilities” to prove that it can’t be done—until they’re “out.”

No wonder Mrs. E. M. Braddock, now Labour M.P. for Exchange, Liverpool, declared at the 1944 Conference of the Labour Party that

  “I have been trying during the whole of this Conference to discover some difference between our policy and the policy of the Conservative Party. Every White Paper issued up to date has had the complete agreement of both sides and I cannot for the life of me understand how we are going to fight a General Election when we are in practically complete agreement with the Conservative Party.” (Conference Report, pp. 167.)

Socialism is not “making the rich poorer and the poor richer.” It is not reducing the gap between riches and poverty. It is the abolition of riches and therefore poverty. Unless this principle is first understood there can be no Socialism.

Horatio.

Cooking the Books: Back to the 1930s? (2012)

The Cooking the Books Column from the March 2012 issue of the Socialist Standard

During the spat last December between Britain and France about which government most deserved to lose its triple-A credit rating (It was the French rating that was eventually lost.) Christine Lagarde, the head of the IMF, urged Europe’s leaders to solve the Eurozone crisis, commenting: “If that doesn’t happen the risk is that of retraction, rising protectionism, isolation. This is exactly what happened in the Thirties and what followed was not something we are all looking forward to (Times, 16 December).

Writing later in the Times (27 December) Stephan King, the HSBC’s group chief economist made a similar point: “The global economy has plenty of faults but increased isolationism will only make things worse. We don’t want to sleepwalk back to the 1930s.”

So, what did happen in the 1930s? Here are some quotes from “Background of the War 1939-1945”, a chapter taken from our 1950 pamphlet, The Socialist Party and War.

  The Times (22 January 1936) reported on a speech to the Japanese parliament by the Foreign Minister Hirota: “After referring to restrictive measures of various kinds on world trade, Mr. Hirota continued :– ‘To a modern nation, particularly such as our own, with a vast population but meagre natural resources, the assurance of a source of raw materials and of a market for finished products is a condition of prime necessity to its economic existence.’”
   The Economist (5 November 1938), in an article entitled “Germany’s Trade Offensive”, wrote: “The probability must, therefore, be faced that Germany’s efforts to expand her trade will affect British trade more in the future than in the past … Britain’s need of imports is greater than that of any other first-class Power, and our earnings are already barely enough to pay for our imports. Any substantial encroachment on our markets would directly limit our access to the raw materials and foodstuffs we need.”
   The Economist was objecting to Germany’s policy of export subsidies, dumping, currency controls and bulk buying and commended the British government’s retaliation of buying up the whole Rumanian wheat crop. To which a German economic periodical Wirtschaftsring replied by accusing Britain of “attempting to throttle Germany’s trade with Eastern Europe and of encircling her in economic fields” (Daily Telegraph, 13 September 1938).
    In a speech in Warsaw on 21 March 1939 Robert Hudson, Britain’s Secretary of Overseas Trade, declared:
    “We are not going to give up any markets to anyone … Great Britain is strong enough to fight for markets abroad. Britain is definitely going to take a greater interest in Eastern Europe” (News Chronicle March 1939).

When in September of that year Germany invaded Poland, so expanding its control in Eastern Europe, Britain together with France declared war on Germany and the second world war in a generation was on.

We don’t suppose that another world war starting in Europe is what Lagarde had in mind; more probably she was thinking of a break-up of the EU and a return to national protectionist measures. We are now four years into a depression which some are speculating could last for another ten. If that happens we could well see movements supporting nationalist, isolationist and protectionist measures move out from the margins and into the mainstream, as in the 1930s. Hopefully – and alternatively – it would lead to a growth of a movement for a world community without frontiers based on the world’s resources being the common heritage of all.