Editorial: Slimmer shop assistants (1949)

Editorial from the September 1949 issue of the Socialist Standard

Before the war, when the Labour Party was in opposition, socialists were saying that a Labour Government would have to behave very much like any other government trying to make Capitalism work. Members of the Labour Party did not believe this, and said so. They told us that the idea was absurd and a wicked slander on the Labour Party. They simply could not imagine that a government of their own admired leaders would one day declare itself against wage increases, knowingly create unemployment, introduce peace-time conscription and use troops in strikes. But now all these things have happened.

On July 28th of this year, Mr. Harold Wilson, President of the Board of Trade, announced that the prices that shops are permitted to charge for utility clothes, boots, sheets, curtains, etc., would be reduced by 5 per cent. It doubtless pleased the majority of workers and displeased the shopkeepers, but in the uproar that it caused among the latter, one of its consequences received little attention. Mr. Wilson explained that it was expected to lead to “smaller staffs,” and added: —

“If the effect of this measure is some slight reduction of staff in distribution, I think it will be useful. (“Hansard,” 28/7/49, Col. 2694.)

The same day, in an interview with the Press, he used a different phrase which the Daily Herald (29/7/49) reported as: —

“This reduction in prices may lead to some slimming of staffs.”

We may guess why he did not want to call it creating unemployment, but elderly shop assistants pushed out of work may not see the point of Mr. Wilson’s remark that the loss of their jobs is useful.

We are not accusing Mr. Wilson of wanting to create unemployment for its own sake, and no doubt he dismisses any twinge of conscience with the thought that these unemployed can get some sort of work in some other trade. What we are doing, however, is to remind Labour Party supporters that this is one of the things that goes with the attempt to run capitalism and they are just as much responsible as Mr. Wilson. At the same time that the President of the Board of Trade is cutting prices and “slimming” the shop assistants his colleague, the Minister of Labour, has refused to ratify Wages Council decisions in favour of increased wages for shop assistants.

Increases of about 5 per cent, had been recommended by Wages Councils for the distributive trades and sent to the Minister for ratification. Instead, according to reports in the Press (Daily Mail, 8th and 23rd July and Daily Worker, 23rd July) he has sent them back and asked that the proposed increases be modified before he will again consider them.

Twice-told tales (1949)

From the September 1949 issue of the Socialist Standard

Once again the worker has “responded magnificently” to Government appeals for greater production. Since the start of the drive in 1945, production has increased so much that a few weeks ago Sir Stafford Cripps was pleased to tell us we are now creating more wealth than at any time in our history.

As always, under Capitalism, however, there is a “but” attached to the “good news.” It is this: In order to reach the “era of prosperity,” we must now produce at lower cost and compete successfully in a buyer’s market. We must “go easy” on wage claims, work harder and leave everything else to the wisdom of our “leaders.”

That story has an old familiar ring. After the 1914-18 war, the Labour, Conservative, and Liberal Parties were spinning the same yarn—you needn’t “ask your Dad,” the information is in any history book.

The situation in 1945 differed slightly, of course, as at that time the Communist Party was also contributing to the clarion call for “More production, “ Export or Die,” etc., etc. Indeed, it continued to do so until the line-up of British with American Capitalism, instead of Russian Capitalism, necessitated one of those lightning reversals in policy that have made the Communist Party an example to every political turncoat.

Although the antics of political opportunists may change, the economics of Capitalism remain the same. Like “Old Father Thames,” Capitalism “keeps rolling along” from boom to slump and back again, with a few world wars thrown in for good measure.

Just as the sequel to the production drive after the first World War was mass unemployment, the dole queue, the means test and malnutrition, so, in a short while, when world markets are again filled, those conditions of squalor and misery will once more greet the working class.

In America, already there are over four millions unemployed, with an estimated eight millions within twelve months (see Sunday Express, 26/6/49). That situation symbolises the “Era of prosperity’ and the “Century of the common man” Capitalism has to offer. “Planned” or otherwise Capitalism cannot operate in the interests of us—the working class.

The solution to our problems lies in the abolition of class society, and the establishment of a form of social organisation in which things are produced solely in order to satisfy human needs—not to be exchanged or offered for sale.

In short what we need is Socialism. A system of society in which poverty and insecurity will be remembered only as a feature of Capitalism. Socialism cannot be produced, by the wizardry of politicians, out of a hat (even an Anthony Eden). Knowledge forms the basis of revolutionary action! We must understand what we want, and organise politically as a class in order to bring Socialism about. The promises of would-be “leaders” notwithstanding, that is the only solution to working-class problems.

J. McGregor 

Your wages are a problem (1962)

From the August 1962 issue of the Socialist Standard

Do wage increase put up prices?

One of capitalism’s toughest problems is the size of the wage which is paid to the working people who keep the system operating.

Basically, it is a problem of almost mathematical simplicity. The working class produce values which are higher than their wages. They produce a surplus value which goes to their employers. If the workers can force their wages up, there is less of the surplus left for their employers. On the other hand, if the employers can force wages down, more of the surplus will go to them. This must hold good, however the productivity of the worker may be altered by changes in natural conditions or in the intensity of his labour.

It is inevitable that capitalism’s governments should concern themselves in this dispute which, by the way, is known as a “class struggle” by Socialists, who have an uncomfortable habit of calling a capitalist spade a spade. Governments do their governing in the interests of the employing, owning class of capitalism. It is, therefore, equally inevitable that when they concern themselves with the class struggle over wages, governments should take the side of the capitalist class.

Thirty or forty years ago there was no great need for the government’s intervention to be especially vigorous. With capitalism in the doldrums, with never less than one million unemployed in this country, the working class were badly placed to push home any demand for better wages. If they did push any such demands the government had only to stand aside and watch the workers starve themselves onto their knees in a strike or a lock-out.

Since the war, conditions have been rather different. Wage rises must now be restrained by government action and appeals, rather than by the old method of both sides beating their heads together. Sometimes, indeed, conditions have defeated even the appeals and the government itself has surrendered, offering wage increases rather than face a strike. This has happened more than once over the railwaymen, much to the annoyance of newspapers like The Economist, which irritably demands at such times to know whether the government is serious in its desire to stop wages going up.

An essential part of the official campaign on wages has been the thinking up of responsible-sounding excuses for refusing the workers’ demands. These excuses must be epitomised in a snappy name for the refusals. This time last year it was the pay pause which, it seems clear, was designed to hold wages in check for a few months. There are signs that the pause was at least as successful as the government could have hoped. Apart from the rises which were denied to government employees, the engineers themselves forebore to press a wage claim last autumn. The engineering employers have now conceded a three per cent. rise, but in the opinion of at least one newspaper, this would have come earlier but for the pay pause.

Now the “guiding light” on wage increases has replaced the pause, although it is being somewhat buffeted by the arbitration tribunals.

It is safe to forecast that, for those who are willing to do a little research and remembering, the events of capitalism will expose the government’s excuses for what they are. Just after the war, for example, the Attlee government launched a great campaign on wages. There was a propaganda drive to convince everybody that rises were inadmissible because, among other things, Britain’s international balance of payments was in jeopardy. Ministers lost no chance of parading statistics which showed how the British capitalist class were spending more on their imports than they were receiving from their exports. We heard many homely analogies about the difficulties of families which spent more than their income and we were invited to regard ourselves as members of a big, British, capitalist family.

A lot has happened since then. The international trading situation of Britain has varied considerably over the years. Once before—during 1959—the British capitalist class actually had a favourable balance of payments. Now it has happened again. The Treasury has announced that the first quarter of this year yielded a payments surplus in Britain’s international trade of £21 millions. The terms of trade—the ratio of import to export prices—are set fair for British capitalism and have been so for some time. The Chancellor of the Exchequer has suggested that over the year the surplus in payments might come to something like £150 millions.

At the same time another of the difficulties which faced the Labour government has gone, to be replaced by its opposite. There is no longer a desperate need to rush into a gaping wide world market, a market waiting to be filled with any substandard commodities which could be produced fast enough to pump into it. Coal, for example, was one of the big needs of the post war years. But so much has the demand for coal decreased that the National Coal Board has closed many of its pits and intends to close still more.

The dilemma

NCB chairman Lord Robens, speaking at the last annual conference of the National Union of Mineworkers, put his finger on British capitalism’s present dilemma:

“This is not an era of coal at any price—that ended in 1957; we are in the era of hard selling based on price, quality and service, and in this situation the fundamental need is to be able to produce the right produce at the right price.”

Conditions, then, have decidedly changed since the 1945 Labour government and in doing so have wiped out the excuses which were used to justify the wage freeze and the other restrictions of Crippsian austerity. The government itself has changed. But government policy on wage increases remains unaltered. All that has happened is that the old excuses have been replaced by the new. The catch-phrases of the late forties have given way to those of the early sixties. A pay pause may sound different from a wage freeze, but in fact it means almost exactly the same.

In one respect the government has not been caught napping by the changes of the past seventeen years. They have not run out of excuses. Now, we are told that wage rises are inflationary. The argument which goes with this assertion has almost become part of the mystique of modern capitalism.

When wages rise, runs the argument, the costs of production go up and the employers automatically increase their prices to recoup this. Higher prices mean that any unit of currency is able to buy less than before, which means that more currency units are needed to circulate the same amount of commodities. Thus wages are supposed to be going up closely followed by prices which, as they rise, nullify the wage increases and cut the purchasing power of the pound. This, say the pundits, is inflation.

This argument ignores several basic facts of capitalist life. Wages are the price of the commodity labour power and generally will fluctuate in accordance with the state of the labour market. But a market for one commodity can be buoyant at the same time as for another it is depressed. Although the coal mines are having difficulty in selling their product it is still possible for miners to get rises because at the moment most of them could get another job without great difficulty. The prices of many of the commodities which will for ever be associated with the so-called Affluent Society—television sets, refrigerators, washing machines—have tumbled over the past few years. But, as we have seen, the wages of the electricians and the engineers who make these goods have increased.

Karl Marx made the point over a century ago and it is still valid today. Highly paid workers can produce cheap commodities, and vice versa. A wage rise need not, therefore, be followed by a price rise.

The Guardian recently challenged the starting point of the inflation theory. In an editorial published on June 25, they said: This is the same mode of thinking as the one that regards success in enforcing a pay pause as the overriding test of present British economic policy. But in fact labour costs in the United States have risen sharply in periods of falling production and have actually declined in periods of recovery in spite of bigger increases in wages. . . . There is much evidence that the same is true of Britain.

Where, now are the protestations of The Guardian—and of other papers—that wage increases must put up labour costs? Are they buried, along with the other stale excuses? If so, we may be sure that they will return, even if in reincarnation.

Yes, wages are a problem and like most problems they are fertile in paradoxes. Perhaps the biggest paradox of all is that the problem will not be solved by putting wages up, or down, but by getting rid of them altogether.

Ivan

TUC: Wages and planning (1963)

From the October 1963 issue of the Socialist Standard

When the delegates at the TUC last month discussed wages and planning they managed to get into quite a deal of confusion.

They voted by a huge majority for a General Council report Economic Development & Planning though it contains references to wage restraint, but also voted (by a small majority) against “any form of wage restraint,” after the mover Mr. Ted Hill had indicated that it did not really mean what it said but only meant under a Tory government.

The confusion of some of the speeches is in fact even greater than the Press reports indicate. There was Mr. Hill who declared that his organisation, having had experience, ”cannot trust any Tory government with our wage packets”. Linked up with his declaration about not accepting any form of wage restraint, it presents the picture of Mr. Hill believing in two absurdities: firstly the absurdity of some non-Tory government which has as its aim supporting the workers against the employers on any wage claim they choose to make, and secondly, the equally absurd belief that provided a union rejects wage restraint it can get what it wants without restraint.

The truth is that all governments everywhere resist general upward ‘pressures for higher real wage levels, and when Mr. Hill makes an exception of a Labour Government he has it quite wrong. It just happens that in the post-war years under Labour Government, wage rates were falling behind the cost of living but since then they have moved ahead, a change in which increased willingness to strike has obviously played some part.

Mr. Richard Crossman, Labour M.P, frankly admitted, after the Labour Government had gone from office, that British workers could probably have got more if they had been as ready to strike as workers in America, and when Mr. Hill talks about no wage restraint what he really means is that trade unions must not give up the strike weapon. To that extent he is of course on sound ground, and it explains his reluctance and that of many other TUC delegates to accept the belief that planning by the National Economic Development Council can be a substitute for the strike weapon. But to put this in terms of being for or against “restraint” is quite beside the point, for if the Council’s plans in fact worked as they hope wage levels would be far less “restrained” than they have ever been.

The Council’s plan for expansion envisaged a rise of real wages of somewhere in the region of 3½ per cent a year. The Prime Minister speaking at Cardiff on April 5th put it in definite terms: “If we combine growth policy with incomes policy, the nation as a whole can have a 3½ per cent. growth in real income per head”.

No union, not Mr. Hill’s or any other, has been able to get a 3½ per cent, rise of real wages. (3½ per cent. a year above whatever is needed to cover increased prices), either under Tory or Labour Government: not 3½ per cent or anything like it. In the period since January 1956 average wage rates have gone up by 33 per cent but the retail price index has risen by 25 per cent, so that the rise in real terms has been about 6 per cent in seven and a half years, less than 1 per cent a year.

What then is really at issue for the workers is not whether the National Economic Development Council, or the Prime Minister, or the leader of the Labour Party holds out prospects of an annual 3½ per cent. rise of real wages they are all prepared to promise this—but whether they or anyone else are in a position to plan such a development into certain existence, and whether working class interest is served in that direction at all.

For, taking the last point first, there should be no doubt or ambiguity about what the TUC is accepting, whether with planning or without. They are accepting the world of capitalism and looking at the problem of the ability of British capitalism to survive and expand in a capitalist world.

The TUC report recognises for example the “frightening prospects of potential overproduction” in world markets, and of “competitive expenditure on armaments in the industrial countries where a quarter of the human race lives, and increasing misery for the other three quarter’s of the world’s population”. The Socialist’s reaction to this is to urge the replacement of world capitalism by world Socialism, ending both capitalism and class society; the TUC’s reaction is to consider how to regulate the trade and aid relationships between the countries of the capitalist world and at the same time secure a working arrangement for planning between the classes at home.

This latter idea is not new: always there have been people urging co-operation for increased production between employers and employed. But always the harsh realities of capitalism keep breaking in: markets getting overstocked and the employers who wanted more production now wanting to stop production; and passivity on the part of the workers being taken advantage of to increase exploitation and profits. No one—and this includes governments as well as employers can regulate world markets so that the normal expansions and contractions of capitalist industry and trade do not take place.

One last point that should be considered is the hope held out of a possible 4 per cent annual increase of production. By past standards this is a big increase, but in relation to the potentialities of Socialism it is insignificant.

Capitalism, irrespective of the political hue of the government, cannot seriously tackle the job of increasing the production of useful things sufficiently to meet all human needs. It cannot escape the consequences of its own class and competitive nature, shewing themselves in armaments, wars, class conflict, strikes and so on.

Yet workers who have tried to weigh up the arguments at the TUC about wages and planning should consider the Socialist proposition. What really stands in the way of a classless, warless world in which production is directly and solely for the use of all, except the reluctance of most workers to think it out? Certainly no-one who looks back over a century and a half of looking for wages policies can argue that Socialism is unnecessary because things are in a very good shape as they are. All the evidence points the other way.

Edgar Hardcastle

The T.U.C. 1950 (1950)

From the October 1950 issue of the Socialist Standard

 

The 82nd Trade Union Congress met this year in September at Brighton; 917 delegates from 186 Trade Unions represented just over 7,883,000 in combined membership, i.e. 53,000 less than in 1949.

For some years past, especially since the election of the Labour Party to run British Capitalism, the main debates at Congress have been centred on Government Policy with the 33 elected members of the General Council of the T.U.C. and the majority of the Union delegates defending and excusing the Government. In order to add weight to the defence, prominent Labour Party members are invited to address the delegates and, as in 1949, the Prime Minister, Mr. Attlee, again called upon the delegates to support the Labour government. The cultivation of the T.U.C. by the Labour Party is, of course, no mere polite gesture for, of the over 5,700,000 members of the Labour Party more than 4,900,000 are provided by trade union affiliation.

The Chairman, Mr. Deakin, Sir William Lawther and Mr. Attlee all went out of their way to warn delegates that, owing to the attitude of Russia, progress and recovery were in danger. Mr. Attlee warned of the new sacrifices the Labour Party expected from the unions consequent on large-scale re-armament programmes, called for a continued support for “wage restraint” and finally urged trade unionists to encourage the young to join the Regular and Auxiliary Armed Forces. Adding the fatuous suggestion that such regulars should be allowed to retain their Trade Union membership.

The following day the statement by the General Council supporting the Government’s policy on Korea was endorsed.

Having supported the Labour Government’s intentions regarding War, the delegates then proceeded to two items more directly concerned with Trade Union activity, i.e. “Wage Restraint” and the implementation by the Government of its policy of “Equal Pay for Equal Work,” rejecting the former and supporting the latter and thus overturning their previous policies on these matters.

Equilibrium was somewhat restored by the defeat of a resolution urging the Government to discontinue the “Conditions of Employment Arbitration Order No. 1305.” This order not only makes almost all strikes illegal, but prevents the payment from Union Funds of “strike-pay” to strikers and also leaves strikers open to claims for damages by the employers. (Eleven miners at St. Helens, Lancs., were recently arrested for failing to pay £10 each for damages awarded to the National Coal Board because the men took part in an "unofficial” strike. They were only released after the money for the fines had been found by their Branch of the National Union of Mineworkers. Manchester Guardian, 18-9-50).

Useless Nationalisation

Congress dealt with the question of Nationalisation. The General Council presented its Report on “The Public Control of Industry” which admitted that Nationalisation of coal and transport had, as yet, increased the cost of coal, but pleaded that it was early days yet to see the full effect. It ended by stating that public ownership need not "always take the form of the nationalisation of whole industries and there is important scope for selective or competitive public enterprise and for the encouragement of Co-operation.” In other words, the administration of capitalism is showing these reformers that, despite their early claims that Nationalisation would resolve all of our difficulties, it simply does not work. Mr. Lincoln Evans (General Secretary of the Iron and Steel Trades Confederation) who presented this report on behalf of the General Council, confessed "that experience of public ownership in the first five years had revealed problems that were not anticipated ” and that "anyone naive enough to believe that change of ownership in itself was an answer was finding out that that was not so.” (Daily Telegraph 6-9-50). Of course, it is Mr. Evans himself who is appearing to be naive in believing that nationalisation is the ending of capitalist ownership. Evidently he was warning the supporters of Nationalisation that the problem was more prickly than he and his friends anticipated. We can assure Mr. Evans that no socialist would be naive enough to swallow the Nationalisation myth.

Lord Citrine, addressed the Congress in his personal capacity. (He was the Secretary of the T.U.C. before the present secretary. Sir Vincent Tewson). He gave his opinions based on his personal experiences as a member of the National Coal Board and as the present Chairman of the British Electricity Authority. He too was very cautious about Nationalisation and referred to the " ‘gigantic' problems facing the Nationalised Industries, the time that would be needed to overcome them, and the importance of full co-operation on both sides to ensure success." In referring to the change over to government direction of the Coal and Electricity Industries, "he several times returned to the theme of the responsibility of trade unionists for the form of nationalisation legislation and therefore their responsibility for taking a full share in making it work.” (Manchester Guardian, 8-9-50).

When it is all boiled down these people are only trying to show that the present needs of capitalism are tending towards more central government direction and. as this occurs, they require the working-class through the unions to assist in the successful running of industry, i.e. to send up production figures; further, that such adjustments in the administration are of advantage to members of the working-class.

Our suggestion is that those who are interested m the views of Mr. Evans and Lord Citrine should take a close look at the activities of those Trade Unions whose members already work in Nationalised Industries, i.e. the Civil Service, which has seven Unions affiliated to the T.U.C. Their history is one of a continued struggle for improved wages and conditions carried on with every Government in power since the existence of those unions. Joint consultative machinery is of very long standing, yet these Unions are constantly in opposition to Government representatives over questions of pay and conditions. If we are to believe what the advocates of Nationalisation say, such activities should have never arisen, and the Trade Unions in the Civil Service would merely be assistants in the task of increasing output and improving efficiency.

On the last day of Congress, Mr. Jack Tanner (President of the Amalgamated Engineering Union) introduced the General Council’s Report on "Productivity” and “laid the responsibility for increased efficiency on every member of the trade union movement.” (Manchester Guardian, 9-9-50). Mr. Tanner has been harping on this theme for several years on behalf of the General Council. The assertions connected with it are that foreign trade will consequently improve and that goods will be obtainable at a cheaper price and thus benefit the working class. Mr. Tanner seems to have forgotten the lessons of the last twenty- five years.

In April, 1948, The T.U.C. issued a leaflet entitled, "Ten Questions about that Extra Ten Per Cent.” and urged the workers to fall into line with the appeal of Mr. Attlee that, “An all-out effort will increase our total production by the ten per cent, we need to turn the tide.” In November, 1948, a Special Conference of Trade Union Executives was called in London to discuss the General Council’s Report on "Productivity.” The Report, which was accepted, called for increased production, closer consultation between the unions and the employers, the re-examining of "restrictive practices” and support for Training within Industry. At the end of 1948 still another leaflet was issued by the Government’s Central Office of Information entitled, "Productivity Pays . . . And How ” it was circulated among the Trade Union members. It purported to show how productivity could be increased during 1949 and was signed by the President of the F.B.I., Will Lawther (now Sir William Lawther), the then President of the T.U.C. and by the President of the British Employer’s Confederation. These gentlemen said, "We warmly endorse this move to make widely known the efforts now being made in industry to improve Productivity, and the profound importance to management, workers and the whole community of a steady and rapid increase in our rate of output.” (Perhaps it was sheer shyness on the part of the shareholders that reference to them was omitted from this endorsement?).

It is possible now to see what has been the result of the campaign for increased production. In 1948 Mr. Attlee wanted just an extra 10 per cent. Since then according to official figures industrial production has increased by 18 per cent. (“Monthly Digest of Statistics,” August 1950). Is Mr. Attlee satisfied and can the workers now begin to take their reward in higher wages or lower prices? By no means! In line with the normal progress of capitalism still more increases of production are demanded, partly to reduce export prices to undersell rivals abroad but particularly to provide for larger armed forces and war preparations.

Wage increases since 1948 have been insufficient even to keep pace with the rise of the cost of living, the official wage index having risen by only 5 points while the cost of living index has risen by 7 points, from 106 to 113. Wage restraint is still the order of the day.

In the meantime profits have kept up quite comfortably during the past two years and the future looks more rosy still. “It would seem from the latest quarterly figures that industrial profits are again rising ” (“Economist ” 5 August 1950).

The results of the T.U.C. show clearly that the working class is still wedded to the idea that they have a stake in capitalism. They have still to learn that the quicker they cease to bother their heads about the way to run capitalism the more quickly will they begin to appreciate the advantages of Socialism; of a system where there will be no classes; without struggles of trade rivalry and without the threat of war; a society in which men and women will be free and in peace, to use their abilities for the benefit of a classless community.

PEDCA.

The Crisis: Wilson's lame explanation (1975)

From the October 1975 issue of the Socialist Standard

On August 20th Harold Wilson made his long-awaited broadcast to the nation informing us of what his government proposed to do about the economic difficulties in which “our country” finds itself. It was an emotional appeal for us all to accept sacrifices, accompanied by the threat of what would happen if we did not. To be more specific, wage workers were told that they could no longer “get for themselves such a pay increase as to enable them to escape the rigours of inflation” and that “the limit on pay settlements is £6 a week”.

The whole harangue was preceded by what purported to be an explanation of the causes of our economic difficulties — an explanation which appeared to exonerate the government from all blame. No doubt, at the speed of the spoken word, the reasons given sounded plausible enough to most of those who listened.

Let us however examine more closely these “causes” which Wilson claimed to be known to us all. He gave three. First:

The whole industrial world faces the most virulent trade and employment depression since the thirties.

This is like saying that you are going to be out of work because there are not enough jobs to go round — and explains exactly nothing. It has, however, the built-in suggestion that trade depressions and unemployment are like cosmic disturbances, for which politicians cannot be held responsible. In fact later in his speech Wilson likened the situation to “the fact that the world has been knocked off its axis by a universal recession”. The second reason given was:

Industry’s failure over the past 20 years to invest in industry, new plant, machinery, factory buildings, industrial modernisation . . .

Presumably Wilson was referring to British industry : yet in West Germany where, due to war-time destruction of factories and plant, large investment and modernization were essential, there is more unemployment than in Britain. As a reason for our present difficulties this second cause seems suspect, to say the least — apart from the fact that every worker knows that more efficient production is aimed at reducing the labour force. And so we come to the third reason:

. . . the effect of inflation on industry’s ability to provide jobs for those established in industry, jobs for school-leavers . . . this year it has been almost entirely internal prices and costs, including pay, which have aggravated inflation . . .

Here the workers are intended to feel partly to blame for having “aggravated” inflation. But you cannot aggravate something which is not already there. So what causes inflation? We are not told.

So much for explanations which explain nothing. It is distressing that, as far as we can tell, such arguments can be accepted by the majority of the electorate. It is, however, understandable. Politicians have never informed the public of the true nature of the economic system which they try to administer. We do not learn about it at school or from the “mass media”. But at least we can take a hard look at what politicians such as Wilson tell us and see the worthlessness of their so-called explanations. It is then up to the workers to find their own explanations from an understanding of the nature of the capitalist economic system of production.

Let us then go back to Wilson’s three "causes”. Why in fact is there a trade depression in the “whole industrial world”? What is immediately apparent is that these countries have produced more commodities than they can sell at a profit. This is what “trade depression” means. But why should this be so? Capitalists, whether they control private companies or nationalized industries, employ the physical and mental abilities of wage-workers to produce commodities (or processed materials). The primary aim is to sell such commodities at a profit. This profit represents the difference between the value of the work provided by wage-workers and the wages they are paid. Employers know this only too well. The effort to restrain wage increases, the introduction of better machinery, the stream-lining of production methods, are all intended to reduce the “wage bill” and increase the margin of profit.

It follows therefore that the working class as a whole are not paid enough to buy back the goods they have produced. The “export drives” typical of all industrialized countries are evidence of this need to sell abroad the surplus which workers in the country of origin cannot afford to purchase. Likewise, in spite of what Wilson says, the bulk of profits are reinvested in industry — to produce more and more commodities in the hope that by price undercutting such goods can be sold abroad. But, like taking in each other’s washing, it is a futile endeavour when all countries are trying to do the same thing. The surplus car production at the present time is perhaps the most evident example of this. America, Europe and Japan are all fighting to sell their cars to each other — to the extent of “dumping” cars abroad at less than their internal prices.

It is true that, in part, export of commodities is required to provide the money to purchase food and raw materials not sufficiently available in the exporting country. But, globally, there is an excess of commodities, including food, over and above the purchasing power of the working class. This is what shows a world-wide trade depression to have other causes than interference from outer space. It is due to, in Marx’s phrase, “disproportion of production” which is inherent in capitalism.

That is not the end of the story. The “crisis of over-production” leads to a slowing down, or even halting, of production. Capitalists will not for long continue production of what they cannot sell, even at a reduced margin of profit. Reduction of production means unemployment. The ability of workers to buy back what they have produced is further curtailed. Production is reduced still further and unemployment increases.

This is the explanation of the nature of “the virulent trade and employment depression” which Wilson might have given. But then, having promised to administer capitalism better than Heath, he can hardly be expected to tell the electorate that trade depressions are endemic in the capitalist system. The electorate might want to change the system for one which produces commodities for distribution rather than sale at a profit.

What is really behind Mr. Wilson’s second “reason” for our economic difficulties: British industrial inefficiency? The explanation is to be found in what has been written above. British capitalism can only survive if it can export wealth. To do this, foreign competitors must be under-cut, or better value for money offered. By the more efficient processes outlined by Wilson in his speech industrial wage bills can be reduced, goods can be exported at lower prices while still maintaining the previous margin of profit. Some countries can, however, compete more successfully because labour is cheaper, and this is why “wage restraint” is so important to the employer. This leads on to the third of Wilson’s “reasons” in his reference to pay aggravating inflation. Industry’s concern about pay increases is not that they aggravate inflation but because they make it more difficult to sell products at a competitive price while still maintaining the customary margin of profit.

But this still does not explain the inflation which is “aggravated” and which largely caused, in the first place, the demands for higher wages. This kind of inflation — the devaluation of the pound — has been caused by the excessive printing of paper money by the Bank of England on the authority of successive governments since the war. No mention of this was made in Mr. Wilson’s speech. But he is not the only one to keep quiet about the effects of government monetary policy, both here and abroad, on the rate of inflation. In November 1974 Enoch Powell was complaining that:

. . . little attention had been given (in the press) to the epoch-making conclusions of the European Economic Community Countries’ finance ministers on measures to tackle inflation. To restore the general stability in the value of money they agreed that they should follow the principle ‘that increases in the supply of money should be cut back to the same level as the real growth in gross national product’, plus whatever might be accepted for the time being as the permissible rate of inflation, namely 4 per cent next year.

(The Times, 4th November 1974)

Our economic difficulties are not, as Wilson implies, a “bolt from the blue” but a direct result of the operation of a capitalist economy. When the electorate understands this it may seriously examine the case for establishing an alternative economic system based on production for use rather than production for sale, that is, Socialism as we mean it and not as Labour politicians use the word to conceal state capitalism.

John Moore

Editorial: Two budgets (1952)

Editorial from the April 1952 issue of the Socialist Standard

Budgets are the concern of the capitalists, not of the working class, though it suits the Labour Party, like the other reformist parties, to pretend otherwise. The workers are not poor because of the Budget, but because the capitalist class own society’s means of production and distribution. It was admitted by the Economist (25th December, 1943) that:—

"1,800,000 persons, who are 7 per cent. of the adult persons in the country, own 85 per cent. of the private property and draw 28 per cent. of the individual incomes of the country."

The Economist said that their readers would be surprised to team this. Why they should be surprised was not explained; this inequality has been a feature of social life in Britain and the rest of the world throughout the capitalist era, and is equally true now despite all the talk of redistribution.

The capitalist State has to meet the cost of its civil service, armed forces and re-armament programmes and all the rest of the organisation necessary to the capitalist system. It does this through taxation the burden of which falls on the shoulders of those who alone can bear it, the propertied class. The wealth the workers produce belongs to the capitalist class and what the workers receive as wages and salaries is far below the value of what they, the workers, produce. That is how the workers are legally robbed and why they are poor. Rises or falls of prices, rises or falls of taxation and changes from one form to another, do not affect the fundamental position of the working class—at most they have temporary effects. White capitalism continues, the only sound policy for the working class is to struggle at all times to the fullest extent that conditions permit, to raise their wages and resist downward pressure.

During and since the war, under the abnormal conditions then existing, and with unemployment at a very low level, successive governments used the system of food subsidies in order to discourage the trade unions from pressing for higher wages. It was linked with high taxation on drink and tobacco, and, from 1946, the grant of children’s allowances to level the condition of the workers. The whole scheme was a device to lessen the movement for a general rise of wages and to divide the married workers against the unmarried. With it went the incessant demand of the Labour Government that the workers should refrain from "unreasonable” wage claims. Now that the fierce struggle against foreign competitors is hotting up again in the markets of the world, the policy is being modified because it has served its purpose. It was merely a wartime interlude in the running of capitalism, which is now getting back to normal pre-war conditions.

Against this background it will be seen how nonsensical is the Labour Party case against the Butler budget. They call is a “rich man’s budget,” as if any budget could be anything else. Mr. Douglas Jay, Labour M.P., speaking in the House of Commons on 17th March, accused Mr. Butler of "robbing the poor to pay the rich”—as if the details of any particular budget were of any importance by comparison with the ceaseless exploitation of the working class \\hich went on unchanged during six years of Labour government.

They charge the Tories with raising the cost of living, forgetting that while they were in power it went up about 40 per cent. They say that he is against wage increases, as of course he is, but forgetting the years in which they also preached "wage-restraint.” They denounce him for reducing food subsidies, but forget that it was Sir Stafford Cripps who decided not to permit any increase in the subsidies even though that meant a rise of the cost of living; a flat departure from the statement of his predecessor, Mr. Dalton, who in 1945 said:—

“I have decided to hold the present cost of living steady until further notice, even if this means an increase in the necessary Exchequer subsidies." (Hansard, 23rd October, 1945. Col. 1877.)

It was on that occasion that Mr. Dalton admitted the purpose of the subsidies as being "to restrain any disproportionate increase in wage rates,” and paid tribute to the "steadiness and good sense which the trade unions and their leaders have shown during the war in this regard.”

In April, 1951, when Mr. Gaitskell, as Chancellor of the Exchequer, repeated the decision not to increase the food subsidies, he admitted that this decision would mean a further rise of food prices and indeed the official food index figure rose from 131 in April, 1951, to 143 in October.

Other Labour Party critics charge the Tories with tenderness towards high profits, and one misguided Labour journal Forward, in its issue for 23rd February, 1952, chides the Tories on the ground that company profits repented during January, 1952, were up by £10,000,000. What it overlooked was that the company reports issued in January, 1952, related to profits made under the Labour Government in 1951!

Now that the Labour Party is in Opposition it will wage the sham fight about the details of running the capitalist system, but there was every justification for the jibe of the Liberal leader, Mr. Clement Davies, that if Mr. Gaitskell had been in Mr. Butler's place his Budget would have been "much of a muchness.” All budgets, no matter who introduces them, are designed to promote capitalism, not to undermine or abolish it.

Mr. Butler’s budget of 11th March had been preceded on 6th March by the budget report of the Russian Finance Minister, Mr. Zverev. They differed by five days, and little more.

The Russian Budget

The Russian Finance Minister’s budget report was reproduced in full in Soviet News (12th March, 1952) published by the Russian Embassy in London. It makes interesting reading particularly as evidence of the similarity of capitalism's problems and their treatment in the two countries.

They both have their re-armament problems; naturally both offered as instruments of “ defence,” not of "aggression.”

In 1952 the Russian Government plans to spend "for the defence of the country” 113,800 million roubles (£10,346,000,000 at the Russian official rate of exchange of 11 roubles to the £).

The amount of money to be raised from State loans in 1952 is set at £3,864 millions, and the estimated expenditure on the lottery prizes and interest to bondholders (“to pay out winnings to the population and interest on loans”) is estimated at £800 million. This latter figure relates, of course, to the interest, etc., on the total amount of loans outstanding, not merely to the additional loans to be raised during the year; at the average rate of 4 per cent. it implies that the total amount of bonds outstanding in 1952 will be about £20,000 million.

Turnover Tax (similar to the British purchase tax) brought into Budget revenues in 1951 the amount of £22,500 millions, an increase of 4.9 per cent. over 1950. It is to be increased this year by another 4.9 per cent. 

Mr Butler stepped up the taxes on profits by means of the Excess Profits Levy. His opposite number in Russia, Mr. Zverev, is going to do the same.

“Total profits in the branches of the national economy will amount to 88,100 million roubles in the current year as against 74,700 million roubles in 1951. The rise in profits makes it possible to leave a substantial part of them at the disposal of enterprises and Ministries for expanding production. At the same time, the profits tax paid into the State Budget will be increased and the share of this tax in the State Budget revenue will rise from 10.2 per cent. in 1951 to 12.2 per cent. in 1952.”

“The profits tax paid by State enterprises will be increased by 14,000 million roubles, or 29.2 per cent. more than last year. . ."

Conservative and Labour Party speakers are always urging the workers to produce more and lower the cost of production. Mr. Zverev’s report contained numerous remarks of the same kind. He reported that in 1951 “the labour productivity of workers in industry rose, by 10 per cent. compared with 1950.” But he was not satisfied with this and asked for more. His report also contained many complaints about industries which had failed to keep down their wages bill and operate sufficiently profitably:—

"It should be said that certain Ministries, enterprises and economic organisations are for from making full use of available potentialities for the further reduction of production costs, cutting trade outlays and making the work of economic organisations more profitable.”

“One of the main requisites for the further reduction of production costs is also the improvement of the organisation of labour at enterprises and the frugal expenditure of wage funds. Not all enterprises, however, live up to those requirements.”

For example, he complained that the Ministry of Paper and Woodworking Industry “permitted the mills to cover the over-expenditure of the wage fund,” and the Leningrad engineering plant of the Central Textile Machinery Administration of the Ministry of Machine and Instrument-making Industry “did not fulfil its production plans last year and overspent 13,500,000 roubles on wages.”

Time and time again he came back to this theme of not spending too much on wages, improving the control of “labour per unit of output,” and watching over “the expenditure of wage funds” and of “the timely and complete receipt of payments into the Budget.” Numerous branches of industry were named as being among those which illegally “overdraw the wage funds.” Others were charged with allowing expensive machinery “to stand idle a great deal,” thus adding to production costs, and many State farms were criticised because they “do not yet have a sufficiently high productivity of labour.”

We are told by Communists that in Russia the trade unions have control over the fixing of wages. What they do have (a very different matter) is the right to discuss the way the “wages fund” is allocated to different grades of workers; but of course the real control resides with those who fix the total amount of the wage fund for each enterprise, that is the Government and its agencies. How true this is can be seen from the Finance Minister’s report. Not once does he even mention as a possibility that the workers or the unions might have pressed for a bigger expenditure on wages. In each of the dozen cases that he refers to he tells the managements firmly that once the Government has fixed the wage fund they have got to stick to it and devote their energies to cutting down production costs and increasing the workers’ output.

British capitalism’s financial wizards and productivity experts would feel very much at home if transplanted to Mr. Zverev’s department.

It is only necessary to add that the Budget Report was unanimously approved. The session ended as follows, according to the Soviet News account:—

“Stormy, prolonged applause. All rise. A prolonged ovation in honour of Comrade J. V. Stalin resounds in the Kremlin Palace.”

It seems to have been like the Tory cheers for Mr. Butler.

The Socialist comment on British and Russian budgets is simplicity itself. The aim of the working class should be to end private and State capitalism and bring the means of production and distribution into ownership by the whole community as the basis of Socialism. While the workers continue to neglect this real issue and devote their attention instead to capitalism’s budgets and taxation they will remain a poverty-stricken exploited class and the exploiters will continue to be safe in the enjoyment of the privileged position that capitalism bestows on them.

News in Review: Algeria (1962)

The News in Review column from the January 1962 issue of the Socialist Standard

Algeria

In Algeria and in France the blood still flows.

The shootings, the bombings, the threats—even the publicity-worthy attempt, by the OAS to extort money from Brigitte Bardot—are typical of a bitter struggle between nationalists and colonialists.

Recent events have been bad enough. But according to some correspondents they are only the lull before another terrible storm breaks over Algeria.

What has happened to de Gaulle, the strong man who was going to clear up this mess? Whatever local influence the French President has had on the struggle—and there is no denying that he has had some—he is pretty well powerless to resolve the basic dispute.

The Moslems are still adamantly for an Algerian Algeria. The settlers stand firm for French control of the country.

Post-war history has been notable for its bloody nationalist struggles as the colonial powers have been pushed out of country after country, not always going without a fight.

This is what can be expected when capitalism throws up its disputes over property and the right to exploit a country’s workers.

That is basically what the trouble in Algeria is about. Within capitalism such struggles must go on.

Weak politicians can certainly do nothing about this. Strong politicians may make a show of doing something but end up no better than the rest.

Pay Pause

There was, of course, much moaning in the House when they got the news that the pay pause had been defied by the award to the electricity workers.

No moaning in the power stations, though. The workers were bound to resist the pause, because it is a threat to their living standards. That is what drove the teachers to demonstrate and what may cause the civil servants to start working to rule.

For the workers, then, it is simply a matter of fighting for their interests.

And for the employers?

For some of them the pay pause was a welcome thing. But for others it was not so simple.

Some weeks before the electricity award many private employers in the road haulage industry had chosen to ignore the Minister of Labour’s ruling that a pay increase and a cut in hours could not operate until the first of this month. The employees of these firms got their rise and reduction in hours in the middle of last November.

Why did the road haulage firms give in? Simply, they reckoned up the cost of surrender. Then they balanced it against the cost of the strikes and other protests which would follow a postponement of the rise. They found that capitulation was the cheaper course. So they paid up.

Which goes to show how capitalism’s divided interests extend to the employers themselves and often defeat the capitalists’ own ends.

Scooter Slump

One by one, the never-had-it-so-good industries are feeling the unaccustomed draught of recession.

Cars, television sets and refrigerators have already had their slumps. Now a side-show industry in the post war consumer goods boom has taken a fall.

Scooters and mopeds took their share of the boom, winning a lot of young people away from the bicycles they used to pedal around. Like the rest, they had their glorious summer in 1958 when the H.P. controls were off and everything sold like hot cakes.

This was the time when Raleigh Industries, already famous for their pedal cycles came in to try to take their share of the scooter and moped market.

Since then times have become hard. Lambretta recently had to cut their prices drastically in answer to their competitors’ reductions. Now Raleigh, who have already suffered in the slump in bicycle’ sales have announced that in March they will close their factory at Smethwick which turns out their scooters and mopeds. Fifteen hundred people will probably lose their jobs.

Perhaps this only amounts to a recession from which the stricken industries will soon recover. But there are enough of them in trouble now to cause fear that it is more serious than that.

Capitalism is still a system of ups and downs. Its spells of relative prosperity cannot have any permanent value. Workers should not wait until they are on the dole queue before they learn the truth of this.

Lib-Lab?

It is early days yet for the Labour Party seriously to consider an alliance with the Liberals. Mr. Gaitskell still has enough hope of becoming Prime Minister in his own right to explain his description of Mr. Woodrow Wyatt’s suggestion of a Lib.-Lab. link-up as “silly.”

It is safe to assume, though, that the suggestion finds rather more favour among the Labour Party members who arc getting sick of being on the losing side. If the Tories give them one or two more drubbings at the polls, anything could happen.

Nothing new in this, of course. The Labour governments of 1924 and 1929 blamed their alliance with the Liberals for their failure to run capitalism. They swore that they would never again allow their hands to be so tied.

But having the 1945 government to themselves made no difference—the Labour Party failed again. The best that some of them can now suggest is to revive the idea of a Liberal alliance— which they themselves told us was discredited by the events of 1924 and 1929.

There is nothing surprising in this. The Labour Party do not exist to propound political principles. Like any other capitalist party, they are out first of all for power.

This goes for the Liberals as well. They have made it plain that they would only consider an alliance which was worth their while in terms of Members of Parliament.

All good, clean, cynical fun this. May we be excused if we do not see anything to laugh at?

News in Review: Hurrah for the NCB (1962)

The News in Review column from the March 1962 issue of the Socialist Standard

Hurrah for the NCB

Who was it who once prayed to be protected from his friends?

When he was plain Mr. Oliver Lyttelton, Lord Chandos was a prominent member of the Conservative opposition which duelled with the Attlee government over its nationalisation bills. They fought in the House of Commons all day and. sometimes, all night as well. So effective was their propaganda that to many voters nationalisation became a very-dirty word.

But what is Lord Chandos saying about nationalisation now that he is a big industrial boss, chief of the mighty Associated Electrical Industries combine and of the Institute of Directors?

“Nationalisation of a fairly substantial sector of industry has come to stay. Whatever I may have thought in the first place about the wisdom of this policy, it is quite clear that every loyal citizen must try to make our nationalised industries work efficiently … As an industrialist I want cheap fuel and reliable supplies and I believe that with a little more working together that is what you [Lord Robens, chairman of the National Coal Board] will secure for us.”

Lord Robens need not feel embarrassed at this new friendship. Nationalisation was designed to give just what Lord Chandos wants — cheap and reliable supplies of vital commodities.

The only pity now is that Lord Chandos did not tell us this some years ago, when he was spreading the fairy tale that nationalisation had something to do with Socialism.

New Hospitals

One of the things which have missed out on the post war boom is the hospital. Over a fifth of those taken over by the National Health Service in 1948 were built before the American Civil War. Nearly half of them were built before the beginning of this century.

What has been done to put this to rights? Since the last war only one large general hospital has gone up—in Northern Ireland.

To the reformers who have been worried about this, the recent government White Paper must have come as a ray of hope. For plans are being laid to spend nearly £800 million during the next ten years to give us, in the words of the White Paper.” . . . the physical equipment and the pattern and the setting which will everywhere place the most modern treatment at the service of patients.”

This sounds fine. Who can disapprove of bigger and better hospitals? But we have heard this sort of promise before.

We heard it about the roads and the railways and about the Health Service itself. For Capitalism is full of problems which are left to fester until a government decides to tackle them with heavy expenditure.

Many of these grandiose plans have been axed out of recognition in successive economic crises, when, the government has been looking for ways of reducing its expenditure.

There will be more economic crises. Which means that there will be more cuts in expenditure. Which means that Health Minister Powell’s beautiful hospitals may never see the light of day.

Expensive Royalty

Many tongues were clucked at the news that the Royal Family is to have some more money spent on them.

It must cost around £400 a year in fees alone to send the Prince of Wales to Gordonstoun School. The fees, says the school, vary with the parents’ financial circumstances; which does not mean, of course, that the school is full of clever, deserving boys whose parents pay no fees because they cannot afford them.

It will cost about £85,000 to renovate the wing of Kensington Palace where Princess Margaret and her husband are living—£15,000 more than the original estimate.

Some critics say that Prince Charles should be sent to a comprehensive school, like a sizeable part of his subjects. Others think that the Princess should be content to live in a council semi-detached, which to them seems roomy enough for a couple with only one child.

These views are way off the mark. The Royal Family stand for the possessions, rights and privileges of the British ruling class. It is, therefore, only appropriate that they themselves should live in lavish privilege.

And nobody has yet explained how sending a prince to a council school, or sticking a princess in a small house, would help the working class parents who struggle to keep their children at school past the age of fifteen and who have to renovate their house during their summer holiday.

These problems are typical of what faces workers all over the world, under monarchies and in republics.

While the tongue-cluckers do their measly, pointless sums, Capitalism grinds merrily on, providing a fat living for a few of its people and condemning the rest to dull poverty.

Tory Unrest

The Government took on a slight list last month, under the blast of criticism from many quarters.

The strikes of railwaymen and engineers encouraged The Guardian to sigh that, although they reproved the strikers, industrial unrest was the inevitable result of the Government’s policy on wages. Other critics thought that the trouble was caused because the Government had not explained the pay pause properly to the workers.

Some standard bearers for free enterprise were disappointed at the Government’s refusal to interfere with the free enterprise take-over bid from ICI for Courtaulds. Labour had a go on Lord Home’s criticism of UNO. To cap it all Tory M.P. Sir Harry Legge-Bourke suggested that fellow Old Etonian Macmillan is getting past it and should hand over to a younger man.

It would be interesting to hear how a government could explain a wage freeze so that the frozen workers accepted it. Workers sell their energies to their employers, which means that they are bound to resist any effort to keep down the price of those energies, whatever tricky name it goes under.

Such problems are typical of the confusion of Capitalism and are bound to cause unrest as the Government—any government—grapples with them. Critics and rebels may flex their muscles impressively, but when it is their turn to do the grappling they never shape any better than the men they have criticised.

The fact is that the individuals who say they are in charge of the affairs of British Capitalism really have little control over events. And that goes for their critics as well.

So it does not really matter whether or not Macmillan manages to ride this latest storm. We shall still all be in the same boat together.

All mad together (1962)

From the March 1962 issue of the Socialist Standard

On the television screens they are smooth and assured. They smile with confident, frank eyes; if occasionally they show emotion they never lose their dignity. For these men are the politicians, who like to think that they are in control. Or they are the planners, who dream that organisation will solve everything.

The impression they like to make is that, although it is always so much better to have them in charge, Capitalism is anyway a sane and ordered set-up in which everything works pretty well. There may be one or two little problems here and there, but generally, they think, everything works out for the best. The men at the top know what they are doing, the world turns nicely on its axis and all the madmen are in the lunatic asylums. What could be better?

What, indeed? For sure, the workers go along with this. They, too, think that Capitalism is the best social organisation we have or are likely to deserve. Whatever worries or criticisms they may have about income tax or rising rents or redundancies, the workers think the world is organised as well as it can be—and whenever they get the chance they vote that way.

Now just how much sanity is there in the world? How much, for example, for the old people who long ago perhaps were themselves bemused by the puffs in favour of Capitalism? We all know that growing old can be one of the fiercest problems of our lives, meaning that we lose our jobs and sometimes our homes and our friends. For the morbidly inclined the prospect of poverty in old age can loom over his youth like a bank of storm clouds on a summer’s day. So the old ones have been a matter for the attention of many governments, for a long time. Hardly an election passes without the contesting parties all struggling to get their protective legislative arms around the pensioners. The Tories pull out figures to show that they have done better than the Labour Party on pensions. Labour cries that the Tories don’t really care for the old dears of the working class and anyway arc a lot of skinflints. Wistfully the Liberals and others wait with their promises to do better than both Labour and Tory put together.

Anybody could be excused for assuming that the pensioners had gained some material benefit from this anxiety to do so well by them. What are the facts? Early this year Codicote Press published a book on the subject—The Economic Circumstances of Old People, by Dorothy Cole and John Utting. Did the authors find the subjects of their inquiry living in prosperous ease? They did not. Were they doing alright then, contented, getting by? Wrong again. They estimated, in fact, that nearly two and a half million old people are living close to the state which the national assistance standards regard as poverty.

These standards are based on cold figures of cost of living indexes and so on, but we can guess what living on the poverty line means for a pensioner. It means a cold room in the winter. It means dining off dry bread and an Oxo cube in hot water. It means broken shoes and tattered clothes. These people live like this only because they are too old to tap out the profits for an employer. Their destitution defies the tinkering of the planners and the politicians. In terms of sanity and human welfare it is a scandal.

Young workers also get a taste of what Capitalist sanity and order means. At the end of this month the Government are expected to announce that the pay pause is at an end and that it will be succeeded by some other attempt at holding down wages, under a different snappy name. Ever since the end of the last war, when it became apparent that workers were strongly placed to press for higher pay, governments have been scheming and appealing to keep wages in check. Sometimes they have done this openly, as in Cripps’ freeze and Selwyn Lloyd’s pause. Sometimes they have done it in a roundabout way—by the 1949 devaluation of the pound, for example. So far they have not openly defied the big trade unions and forced a show down battle with them; perhaps that is in the future. But whatever method they have used, the theme has been constant—wages must be pegged down.

Yet who can be blamed for wanting more pay? Perhaps some workers believed the wartime propaganda which was intended to convince them that victory over Germany and Japan would bring, among other things, prosperity for them. Perhaps some of them think that as the post war productivity drive has succeeded to the point of destroying many of the world’s sellers’ markets, they can now start cashing in on the promises made to them when the Government only wanted them to work harder.

To workers, prosperity usually means sky high wages. But no sooner do they try to get them than the government intervenes, shaking its head and telling them that their wages are too high, that they are too prosperous. This must surprise shop assistants and farm workers and railwaymen and many others who earn hardly enough to keep themselves ticking over. It might interest and amuse other workers. For there is very little that is sane and organised about government wages policy. It is like a great game of snakes and ladders in which, for the wage-earners, there are too many snakes for comfort.

Then there is the curious case of British Railways. One of the theories behind nationalisation was that organisations like the railways could be run in the interests of the Capitalist class as a whole only it they were State controlled. Lord Chandos, as we point out elsewhere in this issue, has given the industrialists’ views on nationalisation. They want cheap and plentiful supplies and services, even if a nationalised concern must be run at a loss to supply them. But there has recently been considerable restlessness at the big deficits which the railways in this country have run up. Now there is a demand, pioneered by papers like The Economist, that British Railways ceases to operate as a service to Capitalism generally, cuts almost everything, but its profitable services and then picks the bones out of the rest. (Nobody has yet suggested that the Government suspend the interest commitments of British Transport Commission, which last year turned a working loss of £55 million into a deficit of £100 million).

Let us make it clear that, although its unprofitable railways may be a sore point to the Capitalists, no worker need worry whether his employer is doing well or not. But it is pertinent to consider the dilemma of Capitalism’s experts and planners. What sort of nationalised railways do they want? Do they even know what they want? And if they do know, can they get it?

This sort of disorder is not confined to Capitalism in England. Across the Atlantic, President Kennedy has let himself be seen sipping a glass of milk and has declared that in future no meal at the White House will be without it. Milk, he said, is delicious, nutritious and not at all radioactive. The reason for this publicity campaign is plain to see. Both the Eisenhower and Kennedy administrations have subsidised milk production and have supported the prices of milk products like butter and cheese. This has encouraged the American farmer to produce vast quantities of milk at the same time as consumption has fallen drastically. This has created a—dread word—surplus of milk which the President is doing his best to reduce by persuading people to drink as much of it as possible.

This all sounds fairly reasonable until we remember that milk is a food that can keep children alive and well—and that while the United States government is trying to pour the stall down unwilling American throats there are 650 million hungry children in the world who could put it to better use. Of course, Washington has its own reasons for not sending the milk where it is needed; they talk about budgets and farm prices and taxpayers. What it amounts to is that, even in cases of human survival, Capitalism often cannot deliver the goods where they are needed. Which does not make Capitalism seem a very sensible way of running things.

In fact, wherever we turn there is evidence which makes Capitalism seem the silliest of systems. That is why its politicians—the men who must run, defend and justify Capitalism—sometimes say the silliest things. Yet Capitalism has an inner sanity. Man started the thing off in his attempts to deal with the problems which were worrying him about a couple of hundred years ago. But we should not let it rest there. We still have problems to worry us. And we still have a way of solving them.

Ivan

The Taming of the T.U.C.(1948)

From the October 1948 issue of the Socialist Standard

What has happened to the trade unions, to their national platform the T.U.C., and to their political shadow the Labour Party? Where now is the trade union army that fought the general strike in 1926? In what dump have they parked their rusty weapon, the strike? Where are the Reds of yesteryear, and who are these men and women with their generous sprinkling of O.B.E.s, Knighthoods and Peerages who at Margate earned from the discerning observer of the Manchester Guardian (10/9/48) the tribute that “once again the T.U.C. has shown the moderate good sense that often seems to surprise its own leaders as much as the critics”?

How are we to account for the incontestable and remarkable fact that the workers—to whom the T.U.C. is supposed to give guidance and inspiration—got from it little but gloom, austerity, wage-freezing, and appeals to work harder; while the capitalist press and financial circles are congratulating themselves that it was a very successful congress from their point of view!

Easy answers are provided from different quarters but they are not the right answers as we shall see on examination.

New Tunes for Old

At one time it was taken for granted that Congress was a place where the Unions recorded their dissatisfaction with the effects of capitalism, made their protests about the home and foreign policies of the Government, discussed wage demands and strikes to enforce them, tried to smooth out inter-union disputes, passed well-intentioned, pious, resolutions in favour of peace and internationalism, and paid lip-service to what they assumed to be the Socialist objective of the Labour Party. Much of it was muddled and trivial but at least there was the sense of working class solidarity and of a forward-looking movement. But now the members are perplexed to find that all the old demands, good, bad and indifferent alike, are being dropped, modified or even reversed; and that all of this is being done out of deference to the Labour Government of which they expected so much and that they worked so long to raise to power. Now, strikes are looked on with disfavour and “unofficial” strikers condemned with a harshness that used to be directed only against the employers’ Wage claims have given place to a modified “wage-freezing.” The use of the Emergency Powers Act and of troops in strikes is no longer condemned since it is a Labour Government that is responsible. Non-contributory social insurance schemes were once demanded, now the workers are told that it is better for them to contribute. For years it was a cardinal principle of trade union and Labour Party programmes that there should be no taxation on the food arid other articles the workers buy, but only direct taxation like income tax arid surtax and death duties; now the opposite principle is preached and practised. Conscription, in peace time was always condemned, now it is accepted without protest. The list of abandoned claims could be greatly extended but it will suffice to look more closely at one of them.

Re-enter the Profit Motive

At one time it was argued that higher wages could come out of profit, and the leaders urged the rank and file to work for the abolition of the profit motive and look instead towards the principle of service to the whole community. This year the whole theory was thrown overboard. Sir Stafford Cripps, erstwhile denouncer of profit, addressed the delegates on the need for greater production and for the voluntary abstention from claims for higher wages. He backed up his case with the seemingly unanswerable argument that “even if corporation profits were reduced by a quarter – a very drastic cut – it would mean an average addition to wages and salaries of not more than 4d. in the pound.” (Manchester Guardian, 8/9/48.) Sir George Chester, speaking for the T.U.C. General Council in opposition to a resolution demanding statutory control of profits and dividends, dotted the i’s and crossed the t’s of Cripps’ statement by informing the perplexed delegates that you can’t do without profit —” Profit in the form of marginal surpluses was essential to the conduct of industry whether it be nationalised or in private hands, it is inescapable until we can alter the whole structure of industry and replace profit by some other incentive.” (Daily Herald, 10/9/48.) No wonder that the Financial Times, organ of the investors, drew substantial comfort from the ‘week’s proceedings. “Margate,” wrote the Financial Times Labour Correspondent (11/9/48) “has cleared the air. In future it is going to he much more difficult for attacks on profits or the profit motive – either particular or general – to be sustained. The hitherto despised ‘capitalist’ incentive has at last been officially recognised as – at least for the time being – socially necessary.”

Explanations that do not Explain

One plausible but fallacious explanation of the change in the trade unions is the Communist one, that the leaders have been corrupted or have sold out to American capitalism and that what is wanted is new leaders, Communist ones. Neither at present nor in the past have Communist leaders produced any better results than the others. Where they differ is only in the fact that their guiding principle is unscrupulous or misguided subservience to the policies of the Russian State Capitalist regime. True the Communists have sometimes been associated with sound action by the trade union rank and file, but only by accident and because at the moment it happened to serve some aim of Russian foreign policy, never by consistent loyalty to the interests of the working class.

A somewhat similar explanation is that the trade union and labour leaders have been sobered and undermined by office and responsibility and have, in consequence, imbibed new ideas in place of the old. Some who say this think the change is good because the new ideas are better, others think them worse; but the explanation is only a half-truth. Men who have both the will and the power to put their beliefs into practice do not become “sobered ” and “undermined” by the responsibilities of office. Capitalist office does not soften the capitalist convictions of a Winston Churchill. With the Labour leaders the position is different. They are the victims of their own wrong theories and self-deception. They thought that, without any mandate to abolish capitalism, they could tame the capitalist tiger ; instead of which they are finding, as Socialists always said they would, that it is the tiger that determines the route, the pace and the policy.

The official version offered by the Labour Party and expressed by their Secretary, Mr. Morgan Phillips, in a Labour Press Service article, “Three Years that Changed Britain,” is that July 1945, when the Labour Party took office, marked the beginning of “a peaceful revolution “which made the people of Britain” for the first time in history . . . masters in their own land.” July 6th, 1945, was, he claims, the “great day” that the Socialist pioneers worked and waited for. If what he claims were true it would indeed be understandable that the tactics suitable in a struggle by the working class against the capitalist class would now become pointless and obsolete; obviously there could no longer be strikes of the workers against the capitalists if capitalism were abolished and the classes themselves had vanished. But, of course, it is only a shadow of the truth, as was shown at the T.U.C. by the speeches of Cripps and Chester referred to earlier in this article, and by other events happening before our eyes.

Is it a new Social Order?

The Capitalist Ministers who say that the old order has already passed away tell us that the reason we are prevented from reaping immediately the fruits of the “Socialist” triumph, is that Tory rule and the late war have left their aftermath of disorder and destruction that has yet to be cleared away. This is so reasonable an explanation that its inadequacy is not at first sight obvious, but the truth is that the minds and hands of the Labour Ministers are every day becoming less full with the heritage of the past war and more full with the problems and preparations for the new grouping of capitalism and the new wars that face us. The plans for Western Union and Marshall Aid are plans for a capitalist world in which capitalist Europe will try to save itself by union from being crushed between the American and Russian contestants for world dominance. It is not for the past war but for the coming war that, under Labour Government, the armed forces are greater than they were in 1938 and that for the first time in history we have peacetime conscription. During the week the T.U.C. met, the Government were considering extending compulsory military service from 12 to 18 months, and decided to delay demobilisation. The same week that saw War Minister Shinwell, author of When the Men Come Home, address Congress on the coming General Election, saw him also at Southampton seeing the Guards off to the fighting in Malaya; the troopships are once again outward bound. When Sir Stafford Cripps told Congress that production must be increased by greater output from each worker because it is not possible to increase the number of workers in production, it is capitalism, not Socialism, that demands that the hundreds of thousands of workers under arms and on munitions work shall be maintained and indeed increased. The Labour Government promised that it would bring about friendlier foreign relationships, particularly with Russia, and thus safeguard peace. The fact that the international situation goes from bad to worse is not because the Labour Government are incompetent or evilly disposed but because capitalism is in control.

Those who have eyes to see will realise that it is not the Labour Government and the T.U.C. that have changed capitalism, but capitalism under Labour rule that bids fair to change the trade union movement from an organ of working class struggle into little better than an instrument to aid the Government in the smooth running of capitalism and the campaign to get the workers to work harder and forego wage claims.

Facts for Trade Unionists

The great need in the trade union movement is for straight thinking and plain speaking. Sir Stafford Cripps and Sir George Chester are right when they say that you cannot have capitalism without profit; it is their conclusion that is wrong. Having told the workers that you cannot have the one without the other they say in effect that it is necessary now to put up with both. That is the fundamental error of the Labour Party’s theories, obvious to Socialists from the start but only now being shown up in practice in a way that all can see. The Socialist Party has always held that the working class cannot achieve power for Socialism, and cannot have Socialism in operation, until a majority have gained the understanding and will for Socialism. Without clearly seeing what they were doing the Labour Party worked on the quite different doctrine that a Labour Government lacking a mandate to establish Socialism could take capitalism in hand and administer it in accordance with Socialist principles. It cannot be done, and if seriously attempted, only chaos would be the result. As well put a pacifist in charge of the conduct of a war, or a conscientious teetotaller to build up a profitable brewery. Either the Labour Ministers had to keep their muddled good intentions and produce chaos, or they had to discard them and try to make a success of capitalism on the only principles possible, capitalist principles.

Trade unionists who are Labour Party supporters now find themselves face to face with a difficult decision. If they remain loyal to the Labour Government that is carrying on capitalism they weaken their struggle against capitalist exploitation on the industrial field and undermine their own unity, if they continue the struggle for which trade unions were formed they come into conflict with the Labour Government. It is a cruel dilemma but it has to be faced. The long years of muddled thinking have to be paid for and there is no easy way out. Backing the Government in running capitalism means stultifying the trade union movement and spreading apathy and despair; with the certainty that at the end of the road, even if the present production crisis is eased for a time, there will be new crises and new and larger wars. The alternative is the seemingly slow but in fact the only way, the way indicated by the Socialist Party at its formation, that of working for the abolition of capitalism and the establishment of Socialism. There are no short cuts and there is no other way.

Edgar Hardcastle