State Banking in Australia (1934)

From the July 1934 issue of the Socialist Standard

Another Quack Remedy 

In the Glasgow Forward (October 21st, 1933), Tom Johnston takes G. D. H. Cole to task for omitting to mention the results of State banking in Australia in his recently published work, “What Everybody wants to know about Money."

As Mr. Johnston seems highly incensed at this omission one would expect that he would have supplied the deficiency and would have tried to show what good things State banking has achieved for the workers of Australia. But Tom deserves the carrot for modesty, for he does not even attempt it. For the benefit of those workers who are always being lulled to political sleep by references to Australia's magnificent “socialistic" examples, let us speak for ourselves. First let us give a few facts.

The biggest State-controlled Bank in Australia is the Commonwealth Bank. It was established in 1911 and has been a profitable concern for the Government ever since. Up to the 20th anniversary the aggregate profits were: —

General Bank  . . .        . . . £6,943,942 11 9

Savings Bank  . . .        . . .   2,781,995 19 9

Rural Bank  . . .        . . .      328,078 11 2

    Total                              £10,054,017    2    8

These figures are exclusive of the note issue branch. These profits have been distributed as follows: — 

To Capital Account       . . .  £4,000,000 0 0

Reserve Fund . . .   . . .            1,406,580 13 3

Rural Bank Reserve . . . 164,039 5 7

Savings Bank Reserve . . . 658,382 3 10

National Debt Sinking Fund 2,660,975 14 5

      Total                                 £10,054,017       2    8

These figures are from the Commomuealth Year Book and Labor Daily Year Book. They show that nearly one-third of the profits went into the National Debt Sinking Fund.

A common claim made on behalf of the Bank is that the profits go to lighten the “people’s burden" by helping wipe off the National Debt. But that is the crux of the whole matter, how does wiping off the National Debt help the workers. Reducing the National Debt reduces the amount of interest payable to bondholders, and thus enables the Government to reduce taxation. Reduced taxation, however, does not help the workers, but only the propertied class. What the workers get is their wages. If, owing to reduced taxation, the workers' cost of living is reduced, their pay is reduced likewise. It is on that rock that all the reformist schemes for bettering the workers’ condition under Capitalism are wrecked. As a prominent advocate of debt reduction by means of a capital levy (Mr. Pethick Lawrence) once admitted, it was merely a redistribution of wealth among the wealthy only.

If therefore State banking is a success it is as an adjunct of Capitalism. According to Senator Barnes, Labour Party, “The Commonwealth Bank has made a profit of 31 million pounds since its establishment." (Melbourne Herald, February 5th, 1934.) In the book of the Commonwealth Bank (an official publication by C. C. Fawkner) we are told that “The bank's policy was not to enter into aggressive competition with the existing financial institutions, and this was shown by determining the rates of interest on fixed deposits at ½  per cent. below those quoted by the leading trading banks." (p. 42.) And so that our masters could facilitate their business, “the rate fixed (for overdrafts) by the Commonwealth Bank had a marked effect in keeping down interest rates, to the benefit of the commercial mid business community throughout Australia." (p. 42.)

Some of the chief functions performed by the Commonwealth Bank have been Raising War Loans, Financing Naval Projects, Building Railways, Financing War Expenditure, Financing Pools for wheat, wool, etc.

Bank Loans to House Purchasers

One of the main functions of the State Savings Bank (Victoria) was the financing of home-building under what is known as the Credit Foncier system. Under the_Act of 1920, authority is given to the Commissioners to purchase and build houses for persons who have an income of not more than £400 per annum, and who do not own a house. The limit is, if the house be of wood, £1,000, and of brick, stone, or concrete, £ 1,300.

The interest charged was 6¼ per cent., and the terms of payment allowed for the paying off of the house in 26 years. The funds for this branch of the Bank's operations were raised by the issue of Credit Foncier Debentures, which were guaranteed by the Government of Victoria.

The net profit for the year 1928-29 was £34,032, and for 1929-30, £24,591. These profits are allocated for the purpose of meeting any losses that may occur. Savings Bank debentures pay 5¼ per cent. (1940) and 4½ per cent. (1936). The interest on these debentures comes out of the 6¼ per cent. paid by the workers who are purchasing their homes, and should this source fail, the Government foots the bill.

“Of the 46,100 loans in the Credit Foncier Department 58 securities were in the possession of the Bank at June 30th, 1930, on which the indebtedness was £34,183. To September 11th, 1930, 22 of these had been sold, reducing the number to 36 and the amount to £19,847. During the year, 86 properties were sold for £65,876, and resulted in a small loss (£1,412), but an amount of £1,162 which had been written off in former years, was recovered.” (Victorian Year Book, 1929-30.)

As the depression became worse, the number of houses reverting to the banks owing to the inability of the purchasers to keep up their payment increased rapidly. In 1930-31 the number in possession of the Bank at June, 1931, was 315, about seven out of every 1,000.

So great did the number of reversions to the Bank become that the figures were conveniently concealed from the public by not being published in the annual reports; Some idea of the huge increase can be gained when it is learned that a separate department was set up in the Bank to cope with it. Besides, owing to the inability of the Bank to dispose of many of the re-possessed houses, it was deemed wiser to leave the tenants in charge rather than risk the deterioration which accompanies an untenanted dwelling. Inquiries at the Bank reveal a reticent attitude with regard to particulars pertaining to this side of its activities.

In South Australia a similar position obtained.

Just prior to the depression the Board of Management of the State Bank of South Australia reported "that for the year ended June 30th, 1928, 106 houses reverted to the Bank through tenants being unable to continue payments or through their vacating premises because of inability to pay. The properties are now being sold by the Bank. The number of reverted properties for the previous year was 78.” The position in South Australia is said to be even worse than Victoria! !

In New South Wales, owing to political tactics by both State Labour Government and Federal Nationalist Government, the State Savings Bank had to close its doors altogether, and the business was taken over by the Commonwealth Bank. Pending an agreement being arrived at as to the terms of taking over, many depositors were forced on to the dole.

The foregoing facts could have been easily obtained by Mr. Johnston had he any desire to show some of the “results of the State Banks in Australia.” Mr. Johnston has a lot to learn about State Banking in so far as it affects the working class.

Let us ask Mr. Johnston a few questions. .

In what way do the floating of war loans, the financing of wheat pools, the building of State Railways, and the granting of big overdrafts at low rates of interest, improve the position of the working class ?

How much better off are those workers who began to purchase homes under the Credit Foncier System only to lose them (as they would have, had they bought them off private institutions), when the depression deprived them of their jobs?

Is not the. abolition of the Capitalist system and all its appendages more in keeping with working-class interests, and would not the Johnstons, the Coles, and others of their ilk, be better occupied in helping to establish Socialism? We know that the whole Capitalist system, including the banking system, has got to go before the workers come into their own. And with all due modesty we say to Mr. Johnston, "It's never too late to learn.”

W. J. Clarke

(Socialist Party of Australia.)

Another solution that won’t solve. (1907)

Pamphlet Review from the November 1907 issue of the Socialist Standard

“The Railway Difficulty and How to Solve It” is a penny pamphlet by Thomas Johnston and Hugh Adam. The writers advocate Nationalisation as immediately practicable. But they assert that it would mean a saving of at least 20 per cent. in working expenses. In other words, the Nationalisation of Railways would intensify the unemployed problem, as Mr. Bell, M.P., pointed out at the Annual General Meeting of the A.S.R.S. The authors claim to be “unhesitatingly and uncompromisingly Socialist,” and in their conclusion admit that Nationalisation of Railways would not be of any avail, but we must have Socialism. Why, then, waste the time and fritter away the energies of the working class in going for something that will not affect their position as the subject class in the community ?

The Socialist Searchlight. (1928)

From the September 1928 issue of the Socialist Standard

VARIOUS POLICIES EXAMINED.

THE “SOCIALISM OF THE LABOUR PARTY. 

What the Labour Party calls Socialisation can easily be gathered from the famous speech on “Gradualism” made by the “brains” of the Labour Party—Mr. Sidney Webb—who plainly showed that his conception of Socialism was the ordinary legislation of Liberals and Tories. He said:

“The process of Socialisation has been going on for a whole generation in National and Local Government without our realising it.”

If the I.L.P. thinks that Mr. Webb is not advanced enough what about their own Tom Johnson, M.P., who as Editor of “Forward,” continually describes Glasgow “City Owned” Tramcars as Socialism? This same I.L.P. leading Member of Parliament, in his debate with Mr. J. M. Keynes, said :

“That he regarded many of the proposals in the Liberal Yellow Book as proposals for which Socialists could vote with both hands (“Forward,” 11/8/28).

HOW COMMUNISTS FIGHT ELECTIONS. 

Mr. Aitken Ferguson, adopted as Communist Party Candidate for North Aberdeen, shows that he is a Communist in name only. The National Left Wing Committee asked him if he accepted their programme and he replied (Sunday Worker, August 12) :

“The whole programme is unreservedly accepted. I am enclosing a copy of my election address, and you will notice that it differs in no essential points from the programme of your national committee.”

This programme includes Nationalisation of Banks, Mines and Basic Industries, 44-hour week and £4 minimum wage Law, Nationalisation of Land (with due regard for Co-ops, and small holders !), Capital Levy, Unemployment Relief on a National Scale, Pensions at 55, Abolition of House of Lords.

This policy is not Communism nor is it one which alters the slave position of the workers under Capitalism. The programme can be carried out and still leave the Capitalists richer than ever, because nothing in such a series of reforms stops the normal development of industry benefiting the Capitalist at the expense of the worker. The last item—abolition of House of Lords—shows how “vote catching” has reduced for election purposes the Communist demand of “smashing the State” to the gentle liberal political reform of “No Second Chamber.”

RATIONALISATION AND ITS RESULTS. 

“Apparently the increased seriousness of accidents during the last few years has been the direct result of the increased intensity of industrial activity during that period. There are, however, forces inherent in mechanisation itself and in the consequent speeding up of industry which have a direct tendency to increase the seriousness of accidents.”

(From “A Study of Safety and Production,” by The American Engineering Council.)

THE ECONOMIC MARCH. 

“The fact that during the past 20 years the number of factories has increased by 40 per cent., while workshops have fallen by 26 per cent., is regarded as an indication that “the small employer tends to drop out of existence, and that mass production in highly organised establishments is steadily replacing the village and rural workshop.” 

The “Daily News,” July 31st, quoting report of Chief Inspector of Factories, 1928.

THE COMMUNIST “UPSURGE.” 

Since the theses of the Third (Moscow) International advocating violence and armed insurrection (1921) were suppressed by the authorities, many workers think that policy has been abandoned by the Communists.

We print below two quotations from the new draft programme of the 3rd International now being discussed by the Congress in Moscow, where a large number of paid officials of Communist Parties are meeting.

These quotations prove that phrases and slogans borrowed from Russian experiences are still being advocated for countries with a much different situation than Russia. The net result of such a programme is simply to get the minorities who act on these lines smashed by the powers of the governments. Steady organisation and education in Socialist ideas are neglected entirely by such schemes of sensational uprising.

THE THIRD INTERNATIONAL PROGRAMME. 

“When the revolutionary tide is flowing, when the dominant classes are disorganised, the masses are in a state of revolutionary ferment, the intermediary strata are inclining towards the proletariat and the masses are prepared for action and for sacrifice; the task of the party of the proletariat is to lead the masses into the direct attack upon the bourgeois state. This is to be achieved by propaganda in favour of all transitional slogans (Soviet’s, workers’ control of industry, the slogan of peasant committees for the seizure of the landlords’ land, etc.), and the organisation of mass actions, to which all other branches of party work, agitation and propaganda, including parliamentary work, must be subordinated. This includes strikes, strikes combined with demonstrations, the combination of armed demonstrations and strikes, and finally the general strike conjointly with the armed uprising against the political power of the bourgeoisie. The struggle must be subjected to the rules of military art; it must be conducted according to a plan of war and in the form of a military offensive. It calls for the devoted loyalty and heroism of the proletariat. Such actions must be preceded by the organisation of the broad masses in military units which by their very form attract and set into action the maximum number of toilers (councils of workers’ and peasants’ deputies, soldiers’ councils, etc.), and by intensified work in the army and navy. 

(Daily Worker, New York, July 16th, 1928).

THE MOSCOW POLICY FOR ENGLAND ! 

“Countries of highly developed capitalism (United States, Great Britain, Germany, etc.) with powerful productive forces, a high degree of centralisation of production, relatively small significance of small production and with a long-established bourgeois, democratic political system. In these countries, the fundamental political demand of the programme is direct transition to the dictatorship of the proletariat. In the sphere of economics the most characteristic are : The expropriation of the whole of large-scale production ; the organisation of a large number of State Soviet farms, only a small share of the land to be transferred to the peasantry ; unorganised market relationships to be permitted only on a small scale. Socialist development generally and the collectivisation of peasant farming in particular to proceed at a rapid rate.” 

(Daily Worker, New York, July 13th, 1928).

STREET FIGHTS ARE COMMUNIST POLICY. 

Bucharin was the official Bolshevik speaker in favour of the new Draft Programme on July 19th at the Moscow Congress (1928). His remarks, which we quote below, ask the workers to resort to anarchist street fightings and state smashing and such hopeless and out-of-date methods of struggle. Modern conditions make all such policies obsolete in view of the development of the mighty political machine and its forces, as Engels well showed in reviewing the class struggles in France from 1848 to 1850.

Here is the quotation from Bucharin as printed in the official “International Press Correspondence ” (July 30th, 1928).

“Mass actions must be regarded as one of the best means in our struggle. Our tactics must be to mobilise the masses, to become masters of the streets, to attack again and again the law and order of the bourgeoise State and to smash it, to capture the street by revolutionary means, in the strict sense of the word, and then to go further. Only on the basis of a whole series of such events and on the basis of the development of these events—mass actions, etc.—only through such a process can we prepare ourselves for fiercer and more stubborn mass struggles on a larger scale.”

BACKWARD RUSSIA. 

If they could show that any of the above methods had led to Socialism in Russia they might have a plausible argument. But as we have shown in these columns the Russian Bolshevik Policy is neither applicable here with a different stage of working class development, nor is it able to give Russia Socialism.

How backward Russia is we can regretfully read in this quotation from the Bolshevik Workers’ Life of July 20th, 1928 :

“Russia is a country of small peasant farms, like those parts of Ireland, where landlords do not flourish. In general, the methods of tilling used by the peasants are very primitive, and little attempt is made to sort out good seeds or to study the characteristics of the soil.

But scattered throughout the Soviet Union now there are a number of Soviet farms, larger in size than the peasant holdings, and very much more efficient.

In the R.S.F.S.R. there are over 3,000 such farms, and in the Ukraine there were 633 last year.

Large though these numbers seem, Soviet farms are only “a drop in the ocean” in the vast expanse of Russia. Their production is a very small proportion of Russia’s total output. For instance, they have about 200,000 head of livestock on these farms (cattle, horses, sheep, pigs, etc.), but the total number of such animals in Russia is nearly 20,000,000 !”

Socialism and Empire. (1925)

From the October 1925 issue of the Socialist Standard

Patriotism and the problems of Empire have always proved stumbling blocks to the workers and to their immature organisations, and nothing has more clearly shown the danger of half-knowledge than the ease with which the ruling class have been able to muddle their minds and inflame their passions by raising such issues. The world war and late developments of capitalist imperialism have given the question prominence by making more numerous and more bitter the struggles for independence of colonies and subject races, and in the verbal dispute between Communists, the I.L.P., the Labour Party and others the air is thick with charge and counter-charge of treachery to the Empire and treachery to the working-class. The dispute, however, leads to no simple conclusion because, as so often happens, the disputants have neglected first to decide whether they can agree on a few elementary Socialist principles. Before we examine the various proposals we must have a clear idea of the economic position and class interests of the workers, because it is from this foundation that they ought always to approach the issues presented to them.

The Position of the Workers. 

Wealth (excluding the air and other things abundantly supplied by nature) is produced by work. The work is performed by the great propertyless mass, the working class, but the means of wealth production, the machines, the land and so on, are owned by a class of non-workers, the capitalists. From this arises a great cleavage of interests, for it makes the workers dependent upon the owning-class since they cannot live except by entering the service of the owners. Out of the total wealth produced by their labour the workers receive but a part as wages, the remainder being retained by those who employ them. The one class lives by selling its services and the other by owning property. The everyday struggle over the division of the product sets these classes in perpetual antagonism, but the Socialist urges the workers to aim consciously not merely at increasing their share but at destroying the system of society which compels them to maintain a propertied class at their expense.

For the Socialist all forms of “living by owning,” rent, interest and profit are in effect nothing more than forms of exploitation, or robbery, of the wealth producers.

If this is correct, then it follows naturally that it is to the interest of the workers all over the world to act jointly in resisting any attempt to heighten the degree of that exploitation, and in overthrowing the system which is based upon exploitation. The enemy of the working class is the capitalist class.

But certain complications exist which prevent many workers from seeing where their interests lie. Lack of knowledge and race prejudices prevent those in one country from realising how essentially similar is their condition to that of workers in foreign countries. There are too real differences between the present circumstances of the workers in the more advanced and the more backward countries. Standards of living, of education, of political and personal freedom, and of political knowledge vary from, say, England or America to the hardly developed Asiatic dependencies of Great Britain; this in spite of the quite marked tendency towards a general equalising of conditions as industrial developments become more uniform all over the world under the pressure of competition.

Again, this very competition leads many workers astray. Exceptional prosperity in the British coal industry at a given time is gained at the expense of some foreign competitors. Viewing the matter from an individual and local standpoint, the miners are only too liable to agree with their employers who argue that the interests of British workers and owners are as one against those of their German or American rivals. Extending our view from one section of a capitalist industry to the whole of the industries of a country or group of countries, national rivalry often presents itself in such a form—war, for instance—as to induce great numbers of workers to join their own section of the ruling class against other sections which are likewise supported by their workers.

The Position of the Capitalist.

Capitalist countries—all of them—must organise their forces and direct their policy to ends which are vital to capitalist society, they must seek markets for surplus products, endeavour to monopolise sources of supply of raw materials where these are geographically limited, and protect ocean and overland communications to these areas. Britain holds tenaciously to her practical monopoly of tropical rubber producing areas, sits tight in Egypt in order to guard the routes to India, and keeps firm hold on the latter because it is a market of first importance and an area for the profitable investment of surplus profit gained by the exploitation of workers at home. The necessities of such imperialist policy bring our ruling class into inevitable conflict with other imperialist powers who also seek markets and monopolies, and into conflict with the colonial and native capitalists who resent having to share with foreign investors the profits of the exploitation of their own working class ; hence the war of 1914, and the independence movements in Ireland, India, Egypt, Canada and elsewhere.

Now let us examine the various parties in this country which claim to represent the working class.

The Labour Party.

The Labour Party openly and unashamedly supported the war in 1914 and associates now with its German patriot prototypes, the Social Democrats. It interests itself in the political and economic difficulties of the British capitalists, offers remedies to solve their industrial problems, assists in maintaining armed forces to defend capitalist property, loyally supports the Empire and opposes the grant of unconditional independence to any part of it. It is unnecessary to labour this point or answer the assertion that the Labour Party has changed for the better since the war because Mr. H. N. Brailsford, Editor of the New Leader, has recently written of the position now occupied by his party.

“We must face our own record as frankly. (I speak, of course, only for myself.) From the date of Mr. MacDonald’s first letter to the Indians on the eve of taking office, down to the recent debates on China, India, and our rubber monopoly, he and his closest associate, Mr. Thomas, have been leading the Party, openly and plainly, towards a reconciliation with Imperialism. His Indian record in office was worse than negative. Not only did he do nothing to advance Home Rule or to help the sweated Indian worker : he sanctioned the shameful Coercion Act in Bengal. His most recent speech gave reasons for doing nothing in India of which an old-fashioned Liberal would have been ashamed. There were other symptoms—the attitude to Mexico, the curt refusal of the Cypriote petition for union with Greece. But the gravest matter was his plain rejection of the League of Nations as the arbiter in our dispute with Egypt over the Canal and the Soudan. . . . We stand, as the French Party stands, a buttress of capitalist Imperialism.” (New Leader, August 21st, 1925.)

Leaving aside the influence of Liberal tradition and the habitual unthinking acceptance of capitalist ways of regarding politics, the ultimate explanation of this Labour Party attitude is that they have no basic quarrel with the capitalists or capitalism. They regard “profiteering” (or excessive profits) as “unjust,” but they do not hold all profit-making to be robbery of the workers. When they speak of “exploitation” what they mean is the payment of exceptionally low wages, they do not recognise that there can be no wage-earning, no wages system without exploitation. Thus Mr. Thomas, in “When Labour Rules,” Mr. MacDonald in “Socialism— Critical and Constructive,” Mr. Sydney Webb in “A Constitution for a Socialist Commonwealth,” all justify private property and the payment of profits, or interest to property owners. As Mr. Clynes says, “It is no part of Labour’s policy to establish revolutionary Socialism or to confiscate private property” (Glasgow Evening News, Oct. 4, 1923). Thus again in 1914 the workers of this country were urged by the Labour Party to fight lest they should, through a German victory, become slaves; and when the French occupied the Ruhr the same Party protested on the ground that it would make the German workers slaves. We, on the contrary, recognise that all the workers in a capitalist world are already wage-slaves to the propertied class, and that no fortune of war, whether victory or defeat, can alter the essentials of that situation. As we propose to deprive the capitalists of their property and do not admit that they have any rights whatever, it matters nothing to us that capitalist groups strive to plunder each other. The Labour Party recognise those property rights and therefore quite consistently seek to defend those whom they consider to be the rightful owners. It is consistent with their views of property but it is decidedly not consistent with working class interests and with Socialism.

“The Communist Party." 

This attitude does not meet with the approval of the Communists who oppose to the patriotism of the Labour Party an inverted patriotism of their own. They can see clearly enough that the interests of British workers clash with those of British capitalists but they cannot rest content with urging the workers everywhere to concentrate on resisting exploitation and on fighting their exploiters. They accept the false reasoning used by Mr. Francis Meynell when he edited the Communist. He urged support of the Indian native capitalists in their struggle against the British Government, on the ground that all enemies of the latter are the friends of the Communist Party. They proclaim the necessity and practicability of disrupting the British Empire, and ally themselves accordingly with every independence movement. What they forget or intentionally gloss over, is that national independence for Irish, Indians or Egyptians is no more a concern of the workers in those countries and should no more be fought for by them than national defence should concern workers here. To exchange Irish exploiters for English ones does not better the condition of Irish workers in the slightest degree; in actual fact, by stressing racial differences it adds to the obstacles preventing international co-operation in the trade union and political world. The enemies of the British ruling class are not necessarily friends of the British workers. We want to increase, not to obscure, the antagonism between one class and the other, and this cannot be done by urging Indian wage-slaves to waste precious years chasing the will o’ the wisp of nationality. Their masters alone will gain from such a course.

The Communist mind is also perverted by the determination not to read the signs of the times in Russia. British governmental hostility to the Russian Government leads the Communists to completely uncritical praise of the latter’s actions, oblivious of the extent to which those actions are driven by pressure of circumstance against working class interests. The Communists know quite well that there is no solution for the unemployment problem to be found in developing foreign trade, yet they have for years lent themselves to the anti-working class propaganda which promises untold benefits for British workers if only full trading relations with Russia are opened up. At present much of the hostility to the Bolshevik Government arises from the wish of foreign capitalists to have free access to this relatively undeveloped field for investment and exploitation. But whether that field is developed with or without the direct control of foreign capital, the entry of this new competitor into the world’s markets can only result in a worsening of the industrial conditions of workers generally, and an aggravation of the clashing of interests between capitalist groups. The Communists, too, like the Labour Party, refuse to recognise that exploitation is the necessary accompaniment of wage-labour. When the Labour Government proposed a £40,000,000 loan to Russia, the Communists were overjoyed, and Russian trade papers in their anxiety to attract foreign capital are full of reports of high profits earned by foreign traders and concessionaires. They decline to face the plain fact that interest on loans and profits on investments can come only from the exploitation of the Russian workers.

T. Johnston, I.L.P. member of Parliament and Editor of the Forward, takes the Communists to task for what he calls their “Whiggery in a Red Cravat.” He rightly condemns the obscured vision which can draw distinctions between sections of the capitalist class and see a friend of the workers in every exploiter who happens to have a quarrel with the British Empire. But Johnston himself is open to equal condemnation. He also is prepared to support schemes for the improvement of Empire trade, schemes, that is, to assist Empire capital in driving competitors from the world’s markets. Neither he nor anyone else has ever yet explained how this will benefit the world’s workers. The poverty in work, and greater poverty out of work, of the wage-earner is not dependent on the temporary ups and downs in particular industries or of all industries together. However, the total product of industry may vary with foreign trade fluctuations, there always has been, and is now, an enormous residue over and above wages, doles and relief, which is retained and consumed by the propertied class. What idiocy it is to tell the workers they must revive trade in order to get work and increase their wages, while an idle class is living on the product of the workers’ labour. When the workers wish they have the power on their hands to cut into that existing surplus whether trade is good or bad, or getting better or worse. While there is a single able-bodied property-owner living without working, only ignorance or treachery could ask the workers to devote thought to the increase of production, or to the quickening of foreign trade.

Johnston, again, owes his confusion to his inability to grasp what is meant by exploitation. Thus in Forward (Sept. 19) he writes in favour of the Labour movement here giving more attention to and entering into more cordial relations with Queensland which has a Labour Government. On the strength of this latter feature, Johnston, while repeating parrot-like the necessity of fighting exploitation, dubs Queensland a proletarian State. Actually, Queensland Government publications and the speeches of Labour Ministers and Members of Parliament demonstrate the incontrovertible fact that capitalist profits and the degree of exploitation of the workers in Queensland are greater, and the proportion of total production received by them as wages is less, than in any other Australian State now, and than was the case in Queensland when the Labour Government first took office ! (See Socialist Standard, Dec., 1923, and Feb., 1924.)

The Socialist Position.

The only safe rule of conduct for the workers is to stand firmly on the basis of their class economic interests. From this standpoint there can be no circumstances requiring them to participate in capitalist wars or trade rivalries. Even the supposed hardships resulting from military defeat do not outweigh the arguments in favour of the Socialist course of action outlined above. We have always urged that Reparations like rates and taxes are and must be a burden only on the propertied class. We are therefore not surprised to learn from the Ministry of Labour Gazette (June, 1925, Page 217) that an enquiry by the International Labour Office shows that real wages in Germany are approximately what they were in 1914 as are also wages in London. In victory and defeat the workers are still wage slaves, their poverty and insecurity are their only lifelong possession. They should not fight for “country and empire,” because they have nothing to fight for. They should refuse to help solve the economic problems of capitalist industry, or the political problems of capitalist empires and concentrate all their energies on the fight for Socialism.

Edgar Hardcastle

Queensland's Labour Government. (1924)

From the February 1924 issue of the Socialist Standard

In the December issue an attempt was made to disprove some of the many untrue assertions about Labour rule in Queensland which have appeared in Forward and the Daily Herald. Tom Johnston has not replied to the charge of deliberate misrepresentation, and to support the charge against him further evidence is now to hand.

Among other things, I stated that the exploitation of the workers is keener and the rate of profit greater in Queensland than elsewhere in Australia. If anyone wants to see the full substantiation of this, it is contained in the reports of the debates in the Queensland Legislative Assembly (Parliamentary Debates, No. 25, Legislative Assembly, Oct. 4 and 5, 1923, page 1481 and following pages). The reason for the publication of the statements, some of which I am going to quote, is that the Queensland Government is faced with the problem of raising new loans to meet repayments of old loans falling due now. Twenty-four million pounds is required at once, and Premier Theodore is in London to negotiate these loans, as cheaply as possible. Failing London, he will be forced to go to New York, but in either financial centre it will be necessary to prove to the investors that Queensland is really a safe and profitable field for investment. Thus we have Mr. Fihelly, Agent-General in London, writing to The Times (Aug. 29, 1923) as follows :—

  “I would again ask critics of Queensland to await the Premier’s arrival, and in the meantime I can assure readers that no sensible investor seriously regards Queensland securities otherwise than of the soundest description.”

It must be comforting to the workers in Queensland to know that the absentee investors who exact tribute from their labour can rest secure that those securities are of the soundest description. The additional material provided in the Legislative Assembly must be still more comforting.

A Mr. Weir, Labour Member for Maryborough, answers home critics at length, and so ably does he do so that it is a matter for regret that the whole speech cannot be reproduced here owing to its length :—

  “The production of the workman in this State is head and shoulders above that of any other State . . . This year I have again gone to some considerable trouble to frame a set of figures which will prove that this State, far from being ruined by the workers, owes more to the workers for its prosperity than to anyone else, and that this State is taking more out of the workers in the matter of industry than any other State. I have graded these figures and have segregated the items, to make my case clear, into raw materials, fuel and light, wages, and then surplus. The surplus is what 1 shall call ‘swag.’ . . . Some belongs to us, the workers, and some to them, but they take too much.”

Mr. Weir then gives figures of wealth production per head of workers engaged, one set taken from the Official Commonwealth Year Book for 1922 (p. 403), and the second set taken from Government publications for the current year (1923). In the first set Queensland, with £921 per head, comes third, after Victoria (£953) and New South Wales (£951). By 1923 Queensland, then the only Labour State, had come top with £954, leaving New South Wales a bad second with only ££892. Deducting the value of raw material and fuel and light, M. Weir gives the percentages going as wages and profits :—

He does not give the percentages wages in Tasmania or South Australia, but states that both are higher than Queensland’s. He protests on behalf of the Queensland workers against this difference. “We claim that they are entitled at least to the same percentage of wages based on the total output as is received in the other States.”

He then gives statistics of actual average wages. “In a table on page 397 of the Official Year Book the Commonwealth average for wages is £169 per head. ‘The amounts paid in the various States are :—

Mr, Weir then gives later information from “Bulletin No. 92 :—

It will thus be seen that in the first year Queensland’s average wage was £8 below the average for Australia as a whole, and £21 below the highest. In the second year it is still £15 below the highest.

Mr. Weir also deals with one or two industries to give further illustration.

In the sawmills of Queensland the total output is £2,971,079, while wages amount to approximately £750,000. Raw materials, fuel, light, etc., account for £1,635,221, leaving a balance of “swag” of £584,858. Mr. Weir, after allowing apparently for depreciation, puts profit at £500,000 and wages at £750,000. In other words, out of the total wealth produced by the labour of the sawmill workers no less than 40 per cent., or, two-fifths, is appropriated by nonproducers at home or abroad.

While for Queensland as a whole, out of every 36s. worth of wealth produced by the workers about £1 goes as profits to members of the property-owning class.

  “On the total cost of production, the men doing the hard work in this State get the least in the Commonwealth.”

In effect we have these Labour “caretakers” of capitalism in Queensland inviting the investment of foreign capital with the plea “that our slaves are the most profitable, the most heavily exploited, and the most docile in Australia.” Well may the Workers’ Weekly of Sydney complain that “the Queensland workers are being sold on the auction block” (Nov. 16, 1923), and well may the workers demand an explanation from their “revolutionary” leaders who ask them to continue returning to power Theodore and his gang who are responsible for this flagrant betrayal of the working-class interests.

Let me repeat that there is no hope for the workers save in Socialism.

Edgar Hardcastle

Labour Governments. The Australian Fiasco. (1923)

From the December 1923 issue of the Socialist Standard

One of the greatest pieces of sustained and successful bluff imposed on the modern working class is the bluff about that colossal fraud, Labour Government in Australia. In the early days of the war we read pamphlets sold by the I.L.P. describing the New Jerusalem under such lying titles as “Socialism at Work in Queensland.” Unfortunately, the credulous—who are legion—believed this fiction; not only those who in a vague way desired Socialism, but also those who opposed it. The harm done to the cause of Socialism was enormous. It provided, first of all, yet another bogey to be used by the anti-Socialists in their frantic anxiety to attack anything on earth except Socialism. It also closed to Socialist propaganda the ears of all those who were persuaded that here at last was to be found a satisfactory and working substitute for Socialism. Their ultimate, but inevitable, disillusionment will make our task harder than ever.

Before we can preach Socialism we have to destroy belief in such spurious imitations. Let me therefore emphasise the fact that in no part of Australia has the capitalist system been destroyed or even checked ; nor has any attempt been made to destroy it by any Labour Government at any time. Capitalism was, and is, the economic system; the capitalists were, and are, the dominant class ; and the workers were, and are, exploited. The only noteworthy change during Labour’s term of office has been a heightening of the degree of exploitation.

Before the Labour Party came into existence in Australia the capitalist system was in full working order. That is to say the land, the factories, mines, steamships, railways, and all the means of production and distribution were privately owned, and the class who owned them was able to live on the revenue which came to that class as rent, interest, or profits. The work was done and profits produced by a propertyless class compelled to sell its mental and physical energies for wages or salaries. The workers were politically free to come and go as they pleased, but because the land in which they lived belonged not to society but to a section only, they might work only by permission, and on the one condition of allowing the capitalist class to live without the obligation of useful service merely by virtue of having and holding.

Capitalism was working very well, which means that the constant overcrowding of the labour market was putting into the hands of the employers a weapon, which they naturally used, to beat down the workers’ standard of living. As invariably happens, the workers in their discontent organised into Trade Unions in order that in the daily struggle over the amount of their wages they might lessen somewhat the disadvantage under which they suffered through having no accumulated property.

In 1890 and the following years these industrial organisations were put to the test, and failed to do what had been hoped of them. In great and bitter strikes Maritime workers, Miners, and Sheep-shearers were in turn heavily defeated. The cause of the defeats appeared to be the support given to the employers by the Governments of the various States. Police, armed strikebreakers, legal intimidation, in fact all the usual methods were freely employed to crush the revolt. It was at once seen that only by first capturing the State machine could the workers hope to achieve anything material, and Labour Parties were at once formed for this purpose.

Having the backing of the organised workers, and attaching to themselves the support of different groups of discontented small capitalists and farmers, the Labour Party met with rapid success in the years preceding the war, and by 1914 there were Labour Governments in five out of six States, and also a Labour Federal Government.

Now it had been supposed by the Trade Unionists who formed the Labour parties that political control was to be used to further their interests. They, or many of them, made an initial mistake in thinking that State enterprise was Socialism, and that its extension (while leaving capitalism intact) could better their position. They made a second mistake in supposing that their leaders had any intention whatever of defying the capitalists, or that they could have done so if they had wished.

State railways already existed before 1914, and their existence in no way constituted a denial of private property rights. All such State concerns are based, like company-owned ones, on the exploitation of the workers. Profit is made and is either paid away as interest on loans and bonds, or else it goes into State revenue as taxation relief. The capitalist class draw all the benefit either way. If every branch of industry and commerce, wholesale and retail, was turned over to this form of State capitalism, the worker’s lot would be worse not better, and his struggle to live intensified not eased. The real problem of abolishing the wages system, giving the wealth producers direct access to the means of production, and eliminating’ profit-making, would still have to be faced. The capitalist class would still have to be fought and defeated.

But the Australian workers trusted their leaders, and these leaders did not attempt to face up to this problem. Instead they did what we have always said they would have to do in such circumstances :—

  “The Labour Party in Queensland found itself called on to administer a capitalistic state of society, and without any direct mandate or authority to overturn the existing order or to undertake a drastic reconstruction.”—(Labour Premier Theodore, The Labour Magazine, Sept. 1923.)

And what Theodore says of Queensland applies equally to other Australian Labour Governments.

So these Labour men “administered capitalism” ; they used the armed forces to protect capitalist private property against the misguided workers who had put them in office; they put penalties on strikes; they provided blacklegs to smash them; they armed police to protect their blacklegs and browbeat strikers ; they jailed men for their organising activities, and when all these methods failed they sent troops to crush them as if they had been at open war. They organised to carry on the capitalist war in Europe, and to further the foreign interests of the Australian capitalist class; they introduced repressive legislation at home to prevent the propagation of anti-war and Socialist views, and four Governments out of five supported conscription. In short, they “administered capitalism.”

For this they won, but did not keep, the good opinion of the ruling class. Our Labour Leaders (some of whom, like Henderson, have nothing to learn about the use of armed force against workers who dare to struggle for better conditions) are now asking you to vote for them, and are instancing the alleged beneficial results of Labour Government in Australia. If you are alive to your own interests you will have none of it.

Let me quote for your guidance some statements of what Labour Government really meant:—

  “The last days of the Dooley Government in New South Wales were marked by free use of the police to crush unemployed demonstrators, and by a campaign led by the Treasurer to reduce the minimum wage of State employees “—(Quoted by the Labour Monthly, Oct., 1923, from “How Labour Governs,” by V. G. Childe, who was private secretary to John Storey, Labour Premier of New South Wales.)

 

 “Labour Governments have not only neglected to carry their platform into effect, in several cases they have initiated movements directly hostile to the workers. … In 1913 Labour Premier McGowen called for ‘volunteers’ to man the retorts during a gas strike. It was a Labour Federal Government which passed the merciless War Precautions Act which was used only against militant workers.”—(“How Labour Governs”)

The International Communist (Sydney) (March 11th, 1922) sums the matter up as follows :—

  “Why are the police armed with army service rifles under Labour Governments despite protests m the organised workers? To protect the workers? When the Townsville workers were fired upon by the Labour Government’s police, in rushed 100 special armed police to reinforce the local police, and said ‘Law and Order must be maintained,’ and the train men who refused to take the police were sacked. When the Brisbane workers in March, 1919, decided to celebrate the Russian Revolution, Theodore and his Cabinet gave orders to the police to stop the Red Flag bring carried, although the Sinn Fein flag had been carried without any trouble. The Labour Government imprisoned 14 men for taking part in the Red Flag procession, and a number of others were deported.”

The Socialist (Melbourne) was a consistent supporter of the Labour Party, and was owned by an affiliated body. In its issue of November 4th, 1921, it reported, under the heading “Queensland Government joins the conspiracy to reduce wages,” the attempt of that Labour Government to force an all-round attack on wages. The attempt led immediately to a 20 per cent. reduction for 17,000 miners, and the expectations of the Government’s capitalist masters were soon fulfilled by a general reduction.

In a strike of waterside workers at Mourilyan Harbour and Innisfail, Queensland Labour Party officials lent their aid to employers :—

  “The shipowners not being able to succeed by themselves had called upon various craft union officials and Labour Politicians to assist them in their attempt to utterly crush this militant section.”—(Communist, Sydney, March 2nd, 1923.)

These are a few illustrations of the methods Labour Governments will use when capitalist interests are in danger. As for their so-called Socialism, it is, as we have said, just the same profit-making system as existed before the advent of these Labour Governments. The workers are paid on a cost-of-living basis, and the surplus goes as, interest, or as tax relief, into the pockets of the class who own the country :—

  The Federal Government “entered the clothing trade and sold clothing … 20 per cent. cheaper than capitalist clothiers. Even then they made profits, after allowing for payment of interest and sinking fund.”—(“Labour in Power,” by Leach Williams.)

The lower price of clothing was no benefit at all to the workers, because the State Arbitration Boards based their awards on cost-of-living figures into which the cost of clothes had already entered.

  In the enterprises of the Queensland Government the “actual profits earned were £140,686 on the State Butcheries, £6,830 on the State Hotels, £52,361 on railway refreshment rooms—a total of £199,877. There was a loss on the State Fishery and Cannery, but when this is deducted there remains a net profit on these State concerns of £131,262.”— (Labour Magazine, Sept., 1923.)

And this is the system which has moved Tom Johnston, Editor of Forward, and other Scotch left-wing I.L.P.ers to delirious enthusiasm. In defending it they are, of course, doing the greatest possible disservice to Socialism. Johnston believes that workers under Labour Governments are better off than others, but he cannot prove (although he seems to believe) that there is or has been Socialism in Queensland or under any other Labour Government

 Labour Premier Theodore states specifically that “capitalism has not been abolished.”—(Labour Magazine, Sept. 1923.)

Also not only has Johnston to prove that the workers there are better off than, say, those in Victoria; he has also to show that any difference that may temporarily exist (it could not be permanent) is due to the existence of a Labour Government. He has not done so yet.

Sir John Simon made a statement that in Queensland there was in 1921 more unemployment than in any other State.. Johnston’s “triumphant” reply (Daily Herald, July 28th, 1923) consists of evidence to show that in fact Tasmania had a percentage of unemployment among Trade Unionists of 16.7, N.S. Wales 11.9, and Queensland 11.3, as against as low a figure as 5.9 for Victoria, the only State which never had a Labour Government.

What a glorious argument for Johnston’s brand of “Socialism” ! And, moreover, he carefully omitted to point out that four other States whose figures he quoted had also enjoyed Labour Governments, which therefore shared responsibility for the unemployment that existed.

His final shattering argument was that “the experience of the people of Queensland (after testing a Labour-Socialist Government for eight years) has been such that they voted last May for a further three years of it.” But he did not say that its majority, although higher than in 1920, was lower than it had been in either 1915 or 1918 ! And it is surely an indication of the workers’ dissatisfaction with Labour rule that after some years of it they threw the Labour Party out of four States, as well as out of the Federal Government.

Mr. E. J. Holloway, President of the E.C. of the Australian Labour Party, admitted in Conference 1921, that :—

  “The members of the Federal Executive know that the men are not satisfied with the programme and objective of the Australian Labour Movement.”—Communist, Sydney, Dec. 1st, 1922.)

Would they be dissatisfied if the Labour Party had been as successful as Johnston pretends ? Below is more evidence of discontent.

  “Although a young country, Australia presented a picture of economic unloveliness that was staggering to the moral conception. The mass of the workers could not under present conditions look for a reasonable standard of living, or hope to be assured of employment.”—The Chairman, Conference of Victorian Section of A.L.P., Melbourne Age, 19th Sept., 1921.)

The following is a resolution passed by the N.S. Wales Trade Union Congress in condemnation of a Labour Government : —

  “That while recognising the futility of solving unemployment under capitalism, this conference registers its protest against the State Government’s action in deliberately allowing workers in this country to starve, and calls upon the Labour Government to grant full sustenance to all the unemployed.”—( Daily Mail, 6th Oct., 1921.)

Why, the very evidence given by the defenders of this damnable system of State slavery is enough to condemn it, and one cannot but be amazed at the mentality of those who so cheerfully smash their own case. Is it the audacity of ignorance, or merely contempt for the understanding of the workers? A Herald correspondent (26/7/1923) actually backs up his case for Queensland by showing that : —

  “Far from Labour rule driving capital out of the country fresh capital has been introduced to the extent of over 55 millions.”

What a case for a Labour Government ! Does capital flow into Queensland because there is a more equal distribution of wealth? Do capitalists habitually offer themselves up for willing sacrifice?

No, capital flows into Queensland because exploitation is keener, and the rate of profit higher. With the assistance of the Labour Government wages have been forced down, and Federal arbitration courts have ruled that the pre-war standard of living can no longer be the basis.

Writing of these arbitration acts, the Socialist (Melbourne) (4/11/1921) has this:

  “Such acts have greatly increased the efficient of the capitalist system in Queensland. . . . The cost of production … in almost every industry in Australia was never less than it is at the present time, and the amount of surplus wealth over the cost of production which is being appropriated by the capitalist class was never greater.”

Will Tom Johnston defend this, too?

While he is lying about “Socialism” in Queensland, Theodore admits that his party never proposed to work for Socialism at all. He replied to a Mr. Scullin, who wanted to amend the Party programme, and who had said that “Nationalisation was but State capitalism,” that he (Mr. Scullin) was using the “term socialisation with a meaning quite different to anything which the Labour Party always stood for.” (Townsville Daily Bulletin, 12/10/1921.)

When the Labour Leaders talk about Socialism they do so with their tongues in their cheeks.

It is for these reasons among others that we urge you not to support the Labour Party. We contend that Socialism is the only object worthy of working-class support. The return of a Labour Government will not further that object.

If you ask what is to happen to workers in the meantime, our reply is simple. You are poor and your position is hopeless because you are wage-slaves So long as you remain wage-slaves you will have to suffer from the evils that go with wage-slavery, and it does not matter whether that be under a Conservative, Liberal or a Labour Government. If you think that it is better to be a wage-slave under a Labour Government, I ask you to consider Australia. We however urge you to recognise that it is the capitalist system which is at fault, and it does not matter to you what is the label of the political party which administers that system. Until you have overthrown capitalism you are going continue to suffer as you suffer now. You will not find a solution in binding yourselves hand and foot to the State machine of a Labour Government.

As for the notion that your efforts can be well spent asking for instalments of Socialism, that is based on utter illusion. This country is rotten with social reforms, and they are being added to every year ; and yet not only have these brought no progress towards Socialism, but the real foundation of capitalism is stronger than ever it was. The real basis is the private ownership of the means of life, and both here and in Queensland the rich are richer, and poor are poorer than ever before. After a century of “instalments” of Socialism there is more unemployment, more insecurity, and hopeless subjection than ever; and there are signs on every hand that your position will get worse not better.

The sooner you turn aside from the long-exploded quack remedies offered to you and set yourselves to the task of propagating Socialism and organising the workers for its accomplishment, the sooner your problems will be solved, and the less will be the cost to you in poverty and suffering.

Edgar Hardcastle

Nationalisation—The Labour Party's Millstone (1955)

Editorial from the July 1955 issue of the Socialist Standard

In the minds of supporters and opponents alike the the Labour Party has always been associated with Nationalisation and up to 1945, it was a popular item in that party's, programme. It had the attractions of novelty and to “progressives,” including some in the Liberal and Tory parties, it promised to be a happy blend of warm idealism with practical realism. For the candidate at elections it was the way to win friends and influence voters. Now, saddening experience has taken off the bloom. Fewer than half the electors can be induced to vote for the party that sponsored it and those who really love it are fewer still. This does not worry the S.P.G.B., for we never had any illusion about it and never supported it; but for the Labour Party it is a disaster. In the fifty years since our formation in 1904, while we were warning the workers not to waste their time on nationalisation, because at most it could solve only Capitalist problems, the Labour Party were polarising it, campaigning for it, and resting their hopes for continued electoral victory on nationalisation proving a success.

We, too, were partly wrong. We were right in saying that nationalisation would solve no working class problem but we are now faced with the situation that British Capitalists decided, at least for the present, that nationalisation is of little use to them either.

It is not difficult to explain this. In the long boom years since the war it has been easy to sell and easy to make profits, and it is only the Capitalist whose wealth is invested in declining or depressed industries who looks hopefully on being bought out by the Government. Another reason, one that influences manufacturers and traders as a whole, is that the nationalised industries, notably coal and transport, have not given the anticipated low charges high efficiency and freedom from strikes. They may be wrong about this. It may be that the same industries left in private hands would have served the great body of Capitalists even worse; but be that as it may many of them have reached the conclusion that the experiment has failed them.

The attitude of the Labour Party leaders in this, to them, alarming situation has been confused and disingenuous. Some have thought it best to stick to the old propaganda because that is what their supporters are used to, while others have thought it expedient to try to find new ways of winning votes. So in the recent election the Conservatives found themselves fighting a divided and dispirited Labour army—those at the back pushed for more nationalisation while those at the front tried to keep their one-time favourite child, out of sight.

Indeed, some of them are now pretending that the Labour Party never really did attach more than minor importance to nationalisation, though the evidence of their former declarations proves this to be an absurd distortion of the facts.

In 1929, for example, the late Arthur Henderson, who was a Minister in the two Labour Governments of 1923-4 and 1929-31, and became Leader of the Party in 1931, made a forthright declaration that nationalisation was the fundamental issue dividing the Labour Party from its opponents. This was in the Foreword to a pamphlet, “The Success of Nationalisation,” written by Thomas Johnston, another prominent member of the Labour Party. This is what Mr. Henderson had to say:—

  "This pamphlet deals with a fundamental issue of modem politics. Nationalisation is a much abused word, and its meaning is often misunderstood and misrepresented. But as a matter of principle and policy it represents the dividing line between the Labour Party and the orthodox parties whose historical supremacy it has so successfully challenged.”

and again, after identifying nationalisation with Socialism, Mr. Henderson wrote:—

  “More clearly than ever as the political parties develop their respective economic policies, it can be seen that Nationalisation is the dividing issue between them.” (Italics his.)

The claims the Labour Party made for nationalisation in those days were varied: some to appeal to the Capitalist, some to appeal to the workers.

In “The Modern Case for Socialism,” published in 1928, Mr. A. W. Humphrey, a member of the Labour Party, quoted with approval the argument used by Chiozza Money (a Liberal who later supported the Labour Party) that nationalisation of the railways would provide cheap transport for manufacturers. Money had quoted the charges made by the privately run British railways by contrast with those on the German State railways: “The charge for carrying hardware from Birmingham to Newcastle (207 miles) was 15/- per ton, but from Dortmund to Rotterdam (153 miles) was 10/- per ton” (p. 195).

A second line of sales-talk for nationalisation was that it would improve the relations between employers and employed; which has an odd flavour now when strikes in the nationalised coal mines and on the railways are the order of the day.

Mr. Ramsay MacDonald, twice Prime Minister in Labour Governments, developed this theme in his “Socialism: Critical and Constructive” (first published in 1921, re-issued in 1924 and 1929). He not only promised that this better relationship would develop but quoted an example that had, he said, come to his notice in some country (unnamed) where an industry had been nationalised.

  “They would never dream of going back to the old bad relationship. The managers themselves were happier in their work and found far more heartiness in it. The men had abandoned of their own free will the most provocative restrictions which they had enforced—or tried to enforce— as a protection against Capitalism, and which undoubtedly hampered production." (1929 edition, p. 169.)

That was the hope. We have recently seen the reality in the railway strike. Mr. Baty, general secretary of the strikers’ union the Associated Society of Locomotive Engineers and Firemen, made the following statement to the Sunday Express (5 June, 1955):—

  “I agree one was entitled to expect an improvement in labour relations under the new set-up. But, in fact, they have deteriorated very considerably."

One of the arguments of MacDonald and other Labour leaders was that under nationalisation the old concern of the Railway Directors with the financial aspect would disappear. Mr. Baty, on the contrary, says of the nationalised railways:—‘The men at the top . . . are always looking round to see how they can avoid this or that item of spending.”

One ironical incident of the railway strike was the resolution passed by 1,000 strikers at Willesden demanding the dismissal of the members of the British Transport Commission (Daily Worker, 13/6/55). This Commission includes former officials of the locomen’s union and the N.U.R.!

Still another illusion of the Labour Party was that nationalisation would reap big profits and enable these to be used, at least in part, for the benefit of the workers. The late Philip Snowden, another leader of the Labour Party, put this in his "If Labour Rules” (1923, page 27)

  “Nationalisation would place at the disposal of the State the means of raising the standard of life of large numbers of workers.”

This may be judged by the recent complaint of the railway unions that their members wages have fallen behind the levels of private industries..

It was the belief of the Labour Party before it came to power that as industries were nationalised the benefits falling to grateful workers and grateful users would generate enthusiasm for more nationalisation and win ever increasing support for the Party responsible.

They can no longer believe in this and the election delivered a blow to their hopes in the Cleveland division where live many workers employed by Imperial Chemical Industries. During the campaign the threat was made that a future Labour Government would nationalise that firm, or part of it; which I.C.I. countered with a scheme of profit-sharing. A correspondent of the Manchester Guardian (18/5/55) reported that the Conservatives made this a prominent issue and that “trade unionists within the industry have reported that the men are threatening not to vote at all in the election.”

After the election the Economist (4/6/55) commented:—

   “A final striking result was the cut in Mr. Palmer's majority in the unchanged Labour seat of Cleveland, from 5,481 to 181; the workers in this constituency are largely employed by Imperial Chemical Industries, which Labour has promised to nationalise.”

The election has been followed by the Conservative Prime Minister’s announcement that his Government intends to encourage companies to introduce schemes of profit-sharing and co-partnership. The Tories now think that they can win votes by promising such schemes in place of nationalisation.

It only needs to add that the Socialist Party will criticise profit-sharing as it has always criticised nationalisation, and for the same reason; that Socialism is what the workers interest requires not the perpetuation of Capitalism whether as private Capitalism or as State Capitalism.

Notes by the Way: Workers, Beware! All Your Property is at Stake! (1936)

The Notes by the Way Column from the June 1936 issue of the Socialist Standard

Workers, Beware! All Your Property is at Stake!

Nobody can complain any longer that they do not know what they stand to lose if they don’t go to war. Mr. Churchill has told us, in the Evening Standard (May 1st). The article is about German preparations for war, and how this affects us.       

One looks at the people going about their daily round, crowding the streets on their business, earning their livelihood, filling the football grounds and cinemas. One reads their newspapers, always full of entertaining headlines, whether the happenings are great or small. Do they realise the way events are trending? And how external forces may affect all their work and pleasure, all their happiness, all their freedom, all their property and all whom they love ?

You see now how it is. If you, the workers are not ready to defeat Germany in war, then all your property is at stake!

You, the 17½ million adults who don’t own even £100, must be ready to fight for Mr. Churchill and his class, so that their property is safe.

Mr. Churchill boasts that he never ran away from criticism. Very well, let him tell us why the propertyless majority of the population should sacrifice their lives to protect a country owned by somebody else.

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Prominent Labour Leader Admits that Our Policy is Right

The case put forward by those who believe in trying to improve and reform capitalism step by step is that the accumulation of reforms would gradually diminish the gulf between rich and poor until one fine day Socialism would be here. Socialists have always pointed out in reply that this argument overlooks the subordinate and almost defenceless position of the workers against the attacks of employers, and the enormous stream of wealth flowing into the possession of the capitalists year by year. All the money spent by the Government on old-age pensions, unemployment pay, etc., is less than the amount the workers have lost in wages through unemployment and the wage reductions which have taken place over a period of 15 years. Instead of the gulf being removed it has, at best, remained as it was before. In short, all the efforts of the reformers have been wasted so far as helping forward Socialism is concerned. They have barely kept pace with the growth of new problems and the worsening of old ones.

A man who has worked for reforms for over a quarter of a century is Mr. Thomas Johnston, M.P., who held office in the Labour Government, 1929-1931. Reviewing a book on the inequality of wealth, he makes what is to him an amazing discovery, although it is only what the S.P.G.B. has been telling him all these years. Here are Mr. Johnston’s words, taken from Forward (May 9th, 1936): —

  So that despite all the social reforms—all the era of pensions and health insurance, the poor as a class are no less poor than they were a quarter of a century ago.

Having admitted that his party, the Labour Party, has been building on sand all these years, Mr. Johnston should have gone on to explain what fundamental change of aims he proposes. We await his answer. The next move is with him.

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Practice and Precept

The Daily Worker (April 29th), in a review of a new edition of “The Poverty of Philosophy,” by Karl Marx (Martin Lawrence, 5s.), reminds us that, in spite of its age, it is a very useful work. Many of the ideas it attacks are as widespread and as dangerous as ever they were; for example, the two opposite notions that the workers should support free trade because it means cheap food, or protection because it means more work. Once it is realised that under capitalism the workers’ wages rise and fall in fairly close relationship with the value of the workers’ labour-power, or, in other words, with the cost of living the demand for free trade is seen to be nothing more than a demand for bigger profits for the manufacturers. They pay lower wages because the workers’ cost of living is less. Marx showed historically how this resulted from the abolition of the Com Laws, and the Daily Worker reviewer agrees with Marx: —

  To-day both Free Trade and Protection are being boosted as panaceas for poverty; these keenly pointed criticisms expose both as different methods of capitalist exploitation. No worker who wants to get his bearings in the Free Trade controversy can do better than master what Marx and Engels had to say about it.

There is, however, one odd thing about this. The Daily Worker is the mouthpiece of the Communist Party. At the General Elections in 1929, 1931 and 1935 the Communists were demanding Free Trade and the abolition of tariffs! A typical instance is their 1931 Election demand, “No taxes or tariffs which raise the price of food and clothing to the workers.”

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“He (President Roosevelt) is fighting to save the capitalist system, and not to destroy it”.— Sir Arthur Willert, Press Officer and Head of the News Department of the Foreign Office, in an article on American politics. (Times, April 29th, 1936.)

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How Wars Arise—A Capitalist Confesses

Mr. S. W. Alexander, City Editor of the Sunday Express, is an enthusiast for capitalism, yet in a moment of candour he admits that capitalism and pressure for war are inseparable. This is what he says: —

  The British Government is asking for assurances: from Chancellor Hitler. He will doubtless give them, for I doubt not that he is a man of peace.
   But these questions are not decided by men. Economic forces are the big pressure which changes men's minds overnight.
   Hamburg people live on trade, and Germany cannot pay for her imports. unless she is permitted to. export
  And people who cannot trade will arm, and, despite peaceful protestations, they will one day use arms to get freedom to work and live.
  So, unless some big international political change takes place, Britain too will be forced—failing revival in voluntary service—to have conscription to get the men to use the immense quantity of arms that are now being manufactured, in such haste, for our own protection.—(Sunday Express, 10th May.)

Here is a highly paid and influential man, one of those on whom our rulers and masters rely for guidance and information, who complacently accepts preparations for world war as if that is the only thing humanity can do. He would say, no doubt, that there is an alternative, the adoption by Governments of policies which would remove tariffs, quotas, and restriction schemes, which interfere with trade. But he has no great hope that they will, so let us, he says, prepare for war. If he would ask himself what are the forces which induce Governments to enter into trade conflicts with each other he would realise that asking them to behave otherwise than they do is to cry for the moon. Capitalism produces poverty and trade depression and Governments cannot alter the facts by trying to be wise. Only by getting rid of buying and selling and profit-seeking will the destructive forces disappear.

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Russian Oil for Italian Bombers?

As the Communists are so full of advice to the British capitalists as to what they ought to have done to prevent the Italian invasion of Abyssinia, what have the Communists to say about the Russian oil supplied to Italy throughout the war? One answer they have given is that it was supplied under contract, and that as the League did not impose oil sanctions, the contract remained. Why, then, was not the contract terminated? And in any event do the Communists admit that Russia is bound by commercial profit-seeking considerations, like other Powers?

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Two Vote-Catching Parties Quarrel

Mr. McGovern, M.P. (I.L.P.) has hard things to say about the Communist M.P., Mr. W. Gallacher (New Leader, February 14th). He says that in Gallacher’s Election address there was no mention that he was a Communist candidate, and no mention of the word Socialism. “It was the poorest document I have ever seen and could have been issued by any Liberal.”

Mr; Gallacher must have learned this vote-catching trick from Miss Jennie Lee (now Mrs. Aneurin Bevan), or some other of Mr. McGovern’s I.L.P. colleagues.

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What Socialist Propagandists have to put up with

Thanks to the Labour Party and Liberals, Socialists have to spend much of their time combating wrong ideas about Socialism. Here is one, from the Liberal News Chronicle (April 1st, 1936): 

  Central Electricity Board . . . is the body that runs the Grid. Buys electricity from the generators, sends it over its wires and sells it to the distributing companies. One of the outstanding and most successful examples of Socialism. Set up by a Conservative Government in 1927. (Italics ours.)—(News Chronicle, 1st April.)

The Central Electricity Board, like every other capitalist enterprise, pays tribute to the capitalists out of the exploitation of the workers. The annual payment to investors is about £2,107,000, equal to the average wage of 17,000 workers. All that the investors have contributed to the construction and operation of the grid system is to grant permission for their property (accumulated from the exploitation of the workers in the past) to be used. Even the ancient plea of "risk" has no bearing on this, since the investment is guaranteed by the Government, both as to capital and interest. 

Edgar Hardcastle

Confessions of a Labour Leader (1944)

From the September 1944 issue of the Socialist Standard

Mr. Tom Johnston, Labour M.P., says we are better fed during the war than ever before: —

  Nutritionally, we had never been better fed in our history than we were now, Mr. Tom Johnston, Secretary for Scotland, said at Dundee yesterday.
  Despite shortages, other difficulties and the rationing system, everyone for the first time was able to get three meals a day.
  It was tragic that it took the war to ensure that the most necessitous—children and infants—got priorities, fruit juices, and so on. (News Chronicle, August 19th, 1944.)

Mr. Johnston was a supporter of the Labour Government in 1924 and again in 1929-31, and held office under the latter as Parliamentary Under-Secretary for Scotland and Lord Privy Seal. Will he explain why the Labour Governments did not tackle this elementary problem of nutrition?

Editorial: Politics and Party Funds (1935)

From the April 1935 issue of the Socialist Standard

The possession of huge funds will not alone create a movement nor will lack of funds destroy one, but money can go a long way towards achieving speedy success where conditions are otherwise ripe. Nothing shows so clearly as the inflow of funds the gulf between the Socialist movement and its many rivals, from Labour to Conservative. The S.P.G.B. is always hampered by lack of resources, and even its present limited expenditure is only met with difficulty from the small donations of workers who cannot afford more. Not so with the other parties. There is going on at the moment a revolt led by Churchill against Baldwin’s leadership of the Conservative Party. At once it is announced in the News Chronicle that “associates of a well-known millionaire are willing to spend £200,000 in forcing both the resignation of the Prime Minister and the withdrawal of the India Bill.” (News Chronicle, March 4th.) Parallel with this is the Government’s semi-official propaganda organisation managed by the Postmaster-General, Sir Kingsley Wood. When this was first announced some months ago it was widely reported that wealthy business men had supplied the necessary campaign funds.

Mr. Randolph Churchill, a member of his father’s rebel Conservative group, stated on February 24th that “he was already assured of powerful financial backing.” (Evening Standard, March 4th.) Rumour has it that Lady Houston is one of the backers, and Lord Rothermere another.

Everyone knows that Sir Oswald Mosley’s political adventures have not been financed on the subscriptions of his misguided or place-hunting followers. When he formed the New Party tens of thousands of pounds must have been spent on propaganda by poster display and on financing his short-lived journal. Mr. Tom Johnston, Lord Privy Seal in the Labour Government, said that from £30,000 to £40,000 had been spent on the poster display alone. Mosley did not offer to disclose the source of his funds, and of course neither he nor his Fascist organisation will do so now, but he promptly hit back at Mr. Johnston by pointing out that the Labour Party was in the habit of sending out a special appeal to rich men for donations to its secret fund. (Manchester Guardian, April 28th, 1931.)

The way in which wealthy men subscribed to the Liberal and Tory funds is, of course, notorious, and Hitler and the other new political Messiahs who promised a clean sweep of old-gang methods have not shown any intention of getting rid of the method of collecting big funds from, big business.