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

The T.U.C., What it is and What it Should be (1956)

From the October 1956 issue of the Socialist Standard

It is not difficult for anyone who reflects dispassionately on the world situation to see broadly what the human race needs to solve its problems; an end to war and war preparations, an increase of the production of useful articles and services, and means to secure that these things are made available to all. Put in so general a form, these aims would be endorsed with more or less sincerity by members of all political parties all over the world; but there the cleavage begins. Non-Socialists, if they believe the ends practicable at all, think they can be won by modifications of the existing social order and by building up United Nations. Socialists hold that class and international conflict can only be ended by replacing Capitalism by Socialism and that until this is done neither the problem of achieving a large-scale increase of production of useful articles, nor the problem of distribution to all, can be solved; while Capitalism endures there will always be wars, and the workers will go on producing wealth not for themselves but for the Capitalist owners of the means of production and distribution, with accompanying waste of labour and materials on armaments and other Capitalist anti-social activities and with inevitable poverty for the many and riches for the few.

Where does the T.U.C. stand in this? It represents a large proportion of organised workers in Britain, is committed in theory to internationalism through its affiliation to the International Confederation of Free Trade Unions and vaguely approves of a new social order declared to be the aim of the Labour Party here and of similar parties in other lands.

How does it shape up to its responsibilities? Regrettably it does so very ill, as the recent Brighton conference shows; this despite the much overrated shift of attitude from half acceptance of some degree of “wage restraint” to a more or less definite repudiation. On every issue it dealt with effects not causes and this was as true of the “militants” as of those they condemned.

Certainly the organised workers should use what strength they have to press for higher wages but how far does this carry them? They have been doing this ever since there were trade unions and in so doing they tacitly accept Capitalism and the wages system. The limit of trade union pressure on the industrial field is set by the state of trade. When trade declines or when the sales of Capitalist industries in one country are hit by competition from other countries, the ability of the trade unions to do more than fight rearguard actions disappears. How can motor workers fight for higher wages against employers who have less need for labour?

No delegate even thinks it worth mentioning that, as Marx pointed out, the only way out of this is that trade unions should recognise the need to aim at the abolition of the wages system. This means aiming for Socialism but among all those who pay lip-service to Socialism no-one ever reminds T.U.C. conferences of it.

Conference gave its approval to “automation” while seeking safeguards for displaced workers and consultation between employers and trade unions, but nobody thought fit to raise the one vital issue that the new automation plants, like the old ones, are the private property of the Capitalist class, used for their profit not for the good of the community as a whole. The extent of the demand that the delegates considered they were entitled to make was. in the words of the Communist, Mr. Haxell, of the E.T.U., being ready to fight “and win some of the increase of productivity for the workers."—(Manchester Guardian, Sept. 5.)

Some delegates urged support for automation on the ground that if British industry did not adopt it, while industries in foreign countries did, British products would be priced out of world markets. Here was a chance, which the Conference did not take, of recalling that the international trade union movement ought to have as one of its functions united action to prevent employers playing off the workers in one country against those in others, to the detriment of the whole working class.

The resolution demanding the 40 hour week was an exhibition of unreality. True the trade unions ought to struggle for shorter hours but they have most of them long ceased to do so in any real sense. Before the war 47 hours were the typical working week in British industry. Now it is nominally 44 hours; but in fact, through widespread overtime working, average actual hours are longer than before the war. The only people who have actually reduced hours are the employers in those industries where falling sales have resulted in a compulsory shorter week with shorter pay.

The resolution against “wage restraint” showed muddled thinking and demagogic speeches at their worst. Socialists would have stated the Socialist case for the ending of Capitalism and with it the ending of the wages system. What conference did was to tie up wage restraint with an attack on the Tory Government because it had not played its part in controlling Capitalism—as if the workers were any better off when the Labour Government was in power trying vainly to improve Capitalism by “controlling it.” Mr. Campbell, of the N.U.R., in what goes for a “fighting speech,” slated the Tory Government for saying that “balance of payments” difficulties made wage restraint necessary and he received the applause of delegates by declaring that Tory policy had meant “to many working class households,” “difficulties with their balance of payments ."—(Daily Telegraph, September 6.). This is the veriest claptrap, for working class households have been faced with difficulties of making ends meet ever since there was a working class and just as much under Labour Government as now. Indeed the evidence shows that under the Labour Government the position happened to be rather worse. Official figures show that between 1947 and 1951 wage rates rose 22 per cent, while the cost of living outstripped wage rates with a rise of 29 per cent. Since the Tories came in, helped by more resolute trade union pressure, that position has been reversed and now wage rates at 64 per cent, above 1947 are ahead of the cost of living at 56 per cent. This was recently pointed out by a Labour M.P. Mr. Crossman. Writing in the Daily Mirror (November 15, 1955), he admitted that but for the workers' acceptance of the Labour Government’s “wage restraint” wages under the Labour Government could have been higher than they were. The workers failed, he wrote, to extort “the highest possible price for labour in a free market.”

And in spite of his bold words on rejecting wage restraint Mr. Campbell went on to say that if the present government were to restore the controls used by the Labour Government “ trade unionists might not be compelled .to press for wage increases to meet the price increases forced upon us.” He is prepared, in other words, to go back to the defeatest trade union policy operated under the Labour Government.

Br. Cousins, who carried conference with him on the resolution, demanded that the Tory Government should go in for disarmament and thus save £750 million as an alternative to wage restraint.—(Manchester Guardian, September 6.). He also spoke for a Labour Government. It brought applause from delegates who seemingly forgot that it was the Labour Government who launched the £1,500 million a year rearmament programme and inaugurated the “wage restraint” policy.

But having thus attacked armament costs and having also resolved to press for a reduction in the length of military service below the two years fixed by the Labour Government Conference went on to pass a resolution on the Suez dispute which, while anti-war in tone nevertheless committed Congress to support the use of force if it was approved by the United Nations. But war is no less war because carried out under United Nation auspices as the delegates should well know from the Korean conflict into which the Labour Government entered in 1950. Supporters of this resolution mistakenly argue that workers' jobs are involved and therefore trade unions must act including giving support to war, if United Nations gives approval. Which brings us back to the total failure of the T.U.C. to envisage the urgent necessity of getting rid of the social system that causes wars.

After being in existence for three-quarters of a century the T.U.C. is still going nowhere and offering no guidance to the workers about their vital interest.

Edgar Hardcastle

Who are the "Crackpots?" (1952)

From the October 1952 issue of the Socialist Standard

In its editorial, The People (7/9/52) greatly deplores the half million trade unionists who opposed the resolution on wage restraint at the Margate Conference of the T.U.C.

Referring to these workers as “crackpots,” “firebrands,” “flat earthers,” etc., who are “living in the age of the Tolpuddle Martyrs,” “Man o’ the People” tells us that “the workers do not want more money. They want more goods. More pieces of paper in their wage packets on Fridays cannot buy them more goods because they are not available.”

Here The People did not finish the sentence, which it should have concluded with—. . . . to the workers. But being supporters of the capitalist system The People could not be expected to see what must be obvious to every worker who takes his leisurely stroll in Kensington High Street or Oxford Street, etc.

Not available? The shops are crammed with every conceivable kind of food, clothing, furniture, etc.

“If we want more goods we’ve got to make them, or, if the goods we want come from abroad, we’ve got to sell more goods to the foreigner to buy them,” continues The People.

But that is exactly what the workers are doing, constantly making goods, but, with a difference, which seems to have escaped “Man o’ the People,” the workers are producing these goods for the capitalists, for sale and profit on the market.

The capitalist class, having property rights in all the wealth produced by the workers, and having to return only a part thereof for their upkeep, not only wants these things, but can pay for them, and has them.

The workers, on the other hand, lacking what the economists call “effective demand” cannot pay for these goods, and, therefore, do not get them.

They get slums, poor food, shoddy clothing, simply because they cannot buy back what they have produced.

The People, in common with other apologists of the capitalist class is constantly urging us to produce more and more and telling us that one day—it does not say when—we will all be better off.

A recent example of the work-harder campaign is the increasing unemployment amongst the textile workers in Lancashire.

“Under-production” or “over-production,” there has always been a shortage of the necessities of life for the majority of people, and whether the worker “thinks every employer is a wicked Capitalist engaged in a horrible conspiracy to down the working man” (in the words of The People) or whether he thinks they are all kind-hearted gentlemen, this is a fact which stares him in the face every time he looks in a shop window and wonders, “Can I afford it? ”

Whilst the majority of workers do not understand or desire Socialism, they will go on supporting Capitalism, and in doing so will continue to face the conflicts of that system of society. The struggle has not lessened with the “passing of the age of the Tolpuddle Martyrs,” rather has it increased.

The People ends with the hope that “the unions themselves will now set about clearing out these wreckers of the new social order that men died and slaved to build for us.”

We must confess as workers that we are unaware of any new social order having come into existence. Not having any reason to “study the stars” under The People's astrologer “Lyndoe,” it may have escaped our notice.

No, we still have Capitalism with us though we can grant this to The People, that “men did die and slave to build it,” thousands of them! Not only men. but women and children also, slaved 10, 12, 14, 16 hours per day and died of disease and poverty, often at an early age, and though in our present era the slavery may be masked a little, by a “five-day week,” “music while you work,” “National Health Schemes” and all the other “benefits” modern Capitalism has bestowed upon us, the slavery is still there.

Our forbears who struggled with eternal hope would indeed turn in their graves could they see how their successors have deserted the class struggle for the wining and dining, and kowtowing of our present “leaders.”

As trade unionists, we do not (as The People suggests) believe that “ their outlook and their reason are about as out-of-date as the flat earthers.” We regard the struggle for higher wages as a continuous necessity whilst Capitalism lasts, and incidentally, point out that the choice of “flat earthers” is an unwise one. as it was shown then that the ruling class was opposed to the ideas of the “crackpots” of that day.

When the new “social order,” Socialism, is established, access to the goods produced will not be determined by how much we will have in our wage packets, because there will be no wage packets.

The terrific waste of man-power at present directed to the needs of Capitalism, would be ended to ensure an abundance of all the things we need plus the so-called luxuries that people may desire.

A hundred and one different occupations necessary under Capitalism would not be required if goods were produced for use instead of profit.

When such a sane system of society is established only a few “crackpots” would wish to retain the present organised chaos known as Capitalism. They indeed would be the flat earthers!

G. H.

The Trade Unions (1966)

From the October 1966 issue of the Socialist Standard

When the Webbs’ wrote their History of Trade Unionism in 1894 they defined a Trade Union as “. . . a continuous association of wage-earners for the purpose of maintaining and improving their conditions of employment”.

A modern historian could be excused for amending that definition to read, “A continuous association of wage-earners for the purpose of seeking plausible arguments why they should refrain from making wage demands”.

We have been browsing through Trade Union Congress reports of the past 20 years to try to find a year when there was no debate on wage restraint. We had no success.

During the years immediately following the last World War we find the TUC urging support for the Attlee government’s policy of a 10 per cent increase in productivity with austerity in wage demands. A few years later, with the 10 per cent allegedly achieved, there come demands for greater increases in productivity coupled with wage restraint to reduce export prices and undersell competitors in foreign markets.

At the 1951 TUC the Chancellor of the Exchequer, Hugh Gaitskell, told the delegates that, although world prices were stable, they must avoid making substantial wage demands during 1952.

Yearly, after that, the same tune is played with a slight change in the lyrics. For “wage restraint” we read “pay pause”, “deferment of wage claims” or “restricting wage demands”. These are argued as necessary because of the dollar gap, the adverse trade balance, the Suez Crisis or whatever threat was prominent during a particular year.

When the Labour Party is out of office the tune at the TUC is in a different key. The bulldozing bass of Arthur Deakin, the Transport and General Workers’ Union’s arch priest of wage restraint, gives place to the applauded baritone of Mr. Campbell of the National Union of Railwaymen and Frank Cousins of the Transport Workers. In 1956 these two took the limelight by opposing wage restraint under a Tory government and advocating a return to policies of the previous Labour government.

So, year after year, we find one government or another demanding that wages be held in check in the interest of national economy and the trade unions agreeing with the need for the economy but differing with the measures to be taken.

No previous government has gone to the limits of the present Labour government in attempting to force a wage freeze on the workers. Pleas for restraint are now giving place to legal measures to pare wages down. During recent weeks many Unions have announced their intention to support the government’s policy and the 1966 TUC has endorsed that policy, “reluctantly”.

The opposition, with a few exceptions, did not condemn the sacrifice of workers’ wages at the altar of capitalist crisis. The objection was to the government’s proposal to legislate to enforce a wage standstill because the law could be used by a future Tory government. How quaint! Prison punishment must be more pleasant under a Labour regime. Perhaps the cells will be padded.

The need to stabilise the £ was accepted. A lovely phrase that, “stabilising the £”. We wonder how many workers know what it means. Mr. Carron does. He knows it means that there is a need to show foreign financiers that the interest on their loans to this country is safe, that the wage slaves are frugal, docile and hard working and if they should get a bit rebellious, Mr. Wilson’s government is going to govern.

Trade Unions do not oppose capitalism and at their TUC forum they have never done more than debate the weight and size of the shackles that bind the working class. To them there is no alternative to capitalism with its production for profit and competition for world markets. They see no class struggle, only a struggle between nations. They create a picture of a good old trade ship “Great Britain” worked by an amicable crew of workers and employers with the Labour Party at the helm, steering towards the horizon of prosperity. There may be injustices in the share-out of the ship’s rations but, when the waters are troubled or the winds adverse, the whole ship’s complement must pull together to keep it on its course. It’s a pretty picture, a lovely illusion, a mirage.

This is not a new trade union outlook. They have, at times, been rebellious but, fundamentally, their thinking has not changed since their birth. In its early days delegates submitted and read papers to the Trade Union Congress. A few illustrations taken at random will demonstrate the continuity of ideas and policies.

The secretary of the Bookbinder’s Society in 1860 wrote:

. . . that the true state of employer and employed is amity, and that they are the truest friends.

A paper to the 1887 TUC:

It is the boast of most Trade Union secretaries that they have prevented more strikes than they have originated.

J. Kane, secretary of the Amalgamated Ironworkers in 1869:

I am determined to give no encouragement to men who refuse to obey and to abide by the written laws of our association . . . encourage me to labour on in the cause of justice and truth.

Through the years TUC debates have centred around class collaboration, suppression of strikes and the disciplining of unruly members.

There is a story of an old trade union leader who used to poke his head round the employer’s office door and ask, “Owt?” When he received the reply, “Nowt”, he would turn to his members and say, “Out”.

The story is, of course, an exaggeration but it is indicative of an attitude in days before trade unions gained their much sought after recognition. Recognition once achieved the old style leader was doomed, ridiculed and elbowed out by men more skilled in the rhetoric of negotiation.

The new men sat round the negotiating table with the employers and argued, often skilfully, not on the basis of class interest but of “justice” and “fair play”. They made agreements on behalf of their members and, when signed, the agreements were deemed to be binding on the employers and the trade union members alike. If conditions changed and agreements became unsatisfactory causing workers to rebel, the union officials had the job of bringing the rebels to heel.

When labour power was plentiful and when all industry was in the hands of private enterprise the employers could restrain wage demands without recourse to government help. But with the state extending its control over industry and labour power finding a sellers’ market, governments find themselves forced to take a more interfering hand.

Within capitalism much of the argument advanced by trade unionists is sound. Some years ago a newspaper columnist illustrated this with a tale of a benevolent employer who paid his workers a high wage for short hours. When he went out into the market to sell his goods he found himself outpriced by his competitors. He returned to his workers and told them that either he must reduce production costs, including their wages, or he would go out of business. To keep their jobs they accepted lower wages and longer hours.

What this story omits to tell is that in every country of the world the same state exists. Workers everywhere are urged or forced to moderate their wage demands in the interest of their own nation’s economy and to keep their jobs.

That is why Socialists say that there is no solution to the workers’ problems within capitalism. While there is capital and labour they will be perpetually antagonistic. While wealth is produced for a competitive market the capitalists will strive to keep the workers’ portion at a minimum. While profit is the stimulant to production the workers will be a subject class. While there is a wages system wages will be under continuous pressure. While workers continue to elect governments to run capitalism they will be urged, cajoled, commanded and compelled to moderate their wage demands.

While trade union policy is hidebound by capitalist notions the unions will 'be feeble instruments—“for the purpose of maintaining and improving their conditions of employment”.

W. Waters

Fallacy of a National Incomes Policy (1965)

From the August 1965 issue of the Socialist Standard

The Prime Minister, Mr. Harold Wilson, has confessed that though he dipped into the writings of Karl Marx, he never got anywhere with it. If he had persevered he would have discovered that Marx knew about the problem which Mr. Wilson and his ministers are trying to solve with their Incomes Policy. Not that Mr. Wilson is an innovator in this endeavour, except that some of the descriptive names are different: “wage freeze”, “wage restraint”, “pay pause”, etc., have given place to “planned expansion” and the laying down of “criteria” for price reductions and avoidance of increases, and for keeping wage rises (with certain exceptions) within the rate of annual expansion of production—at present about 3½ per cent.

But before the present hopeful contestant, Mr. George Brown, entered the ring, there were others—Mr. Selwyn Lloyd in 1962, Mr. Thorneycroft in 1957, Mr. MacMillan in 1955. These were all Conservative Chancellors of the Exchequer. Earlier still there was the late Sir Stafford Cripps under the Labour government after the war, and both parties, and the Liberals, were sponsors in the War-time National government of the 1944 White Paper on Employment policy, which stated the problem and specified what they hoped were the lines on which it would be solved.

These separate income policies are divided by several years. Governments do not have to worry about a policy for prices and wages when unemployment is considerable.

What then is the problem? In the past 20 years it has come to be known as “Stop-go”. Each of the half-dozen Tory Prime Ministers has been chided by the Labour Party with so mismanaging affairs that periods of expansion and low unemployment have regularly been followed by a crisis, by falling or stagnant production, and a rise of unemployment. Each of the governments announced its intention of making expansion continuous and each time the Labour Party said that the government did not know its job and was doing the wrong thing. We are hearing this type of propaganda again now, from the Tories, who failed to control the situation when they were in office.

Marx described the situation briefly and pointedly just 100 years ago in a paper presented to an international Congress in September, 1865: —

“Capitalistic production moves through certain periodical cycles. It moves through a state of quiescence, growing animation, prosperity, overtrade, crisis and stagnation (Value Price and Profit Chapter XII).”

There were various reactions to Marx’s statement; that it wasn’t true; that it had happened but would not be allowed to happen again; that it was due to the greed and stupidity of the employers—and all these could be cured. The Labour Party, which first inclined to the view that the periodic crises were the fault of the employers has, since it became the government, veered to its present attitude—that a strong lead from the government to both employers and workers will put things right and keep them there. They are claiming to be able to do now what they and the Tories alike have failed to do and which nobody succeeded in doing in the past. Looking only at the period since the Second World War, annual average unemployment has been as high as 612,000 (1963) and as low as 287,000 (1956), with the monthly figures ranging from under 250,000 to over 900,000. Production has followed a similar course, with bursts of rapid growth followed by decline and periods of stagnation.

The question to be answered is “Why does this happen?” Why does expansion always get checked? Why do booms lead to crises? Basically it is because we live under capitalism. in which the great majority of people can get their living only by selling their mental and physical energies to an employer for wages or salaries. Under this system the propertied class—who live by profit, rent and interest—and the working class, are dependent on the market, on the ability of the owner of the products of industry to sell them at a profit. The mechanism through which all this goes on is that of money and prices.

Capitalism produces nothing directly and freely for the use of those who need it. If you are homeless or near starvation you will not get a house or food; you have to have money to pay for them. The manufacturer who cannot sell what his workers have produced, either because his competitors have produced more cheaply and have captured the market or because the product is no longer wanted (for example, coal being replaced by electricity or oil, or man-made fibres replacing cotton, silk or wool), or because his would-be customers have no money, has to sell at a loss and may end in bankruptcy and his workers join the unemployed.

But, say the “planners”, why cannot each line of production be accurately planned ahead so that nothing is produced in excess of the demand for it and nothing is produced for which there will turn out to be little or no demand? This is a deceptive hope. In a boom, when there are prospects of a big unfilled demand, capitalists (including the State industries)—not just in one country but internationally—hasten to expand and modernise their factories to capture as much of the market as they can. They simply have to do this; if they stand still they fall out of the competitive race. In some fields natural conditions defeat the planners anyway. Who can plan good harvests? or foresee and prevent the sudden discovery of vast and easily accessible supplies of oil or natural gas in the Sahara or the North Sea?

In a boom manufacturers are all competing to buy raw-materials, machinery, factory buildings—and to hire workers; collectively, they are trying to buy more materials and hire more workers than there are available. In these conditions, sellers—including the workers who are sellers of their labour-power—can put up prices, and do so: which brings us right back to Mr. George Brown and his predecessors, their policies for incomes and prices—and their problems. (Incidentally this is a universal capitalist problem not one in Britain alone. One same issue of the Times, April 28th, reported emergency measures including the attempted freezing of prices in Yugoslavia, and the American steel workers and employers arguing about a wage claim in the light of the Federal Government’s “Anti-inflationary guiding figure of 3.2 per cent”).

What then are the choices before Mr. Brown and other planners? If they let things take their course the boom runs into difficulties; in some fields through scarcities of materials (for example, the recent shortage of bricks) which hold up production, and in others, sooner or later, of overstocking of the market for certain products.

How logical it must look to Mr. Brown to try to prevent the collapse of the boom, by using persuasion and threats to damp down the rise of prices and wages. But is this a practicable policy? In conditions which enable sellers to push up prices and in which workers are favourably placed to push up wages, can government policy prevail? Past experience, the Stafford Cripps era, shows that it may have some effect for a time. But Wilson and Brown have to remember something else. Capitalism is a class society and the working class do not accept that any particular level of wages or profits is a proper and satisfactory one. Without clearly understanding that they are the producers of all the wealth which the capitalists own, they nevertheless always feel that they have a good case for getting a larger share of it. So before long their resentment turns against the government which is trying to induce them to go slow on wage claims: the national incomes policy of the Labour or Tory government finally breaks on the class nature of capitalism.

All of this Marx understood very well a century ago. It may be said that much of what he saw about the ups and downs of production in the market is now common knowledge among economists, but his insight was greater than theirs. Many of them, including those who toy with the idea of permanent and even expansion, think that expansion, because it is desirable is therefore “normal”, and that the interruption of expansion is a fault or failure, due to avoidable mismanagement or to the greed of some group or other. Marx, in his objective analysis of capitalism, viewed it differently. He saw that the expansion, the crisis and the stagnation are all “normal”, they are the way capitalism operates because of its own nature. Prices and wages rise in a boom because that is how capitalism with its prices system functions.

Marx did not share one error which is common to all his critics. They think that the problem is one of modern production; he saw that it is a problem of capitalist production—a very different proposition. Did he, because he understood it, have a solution to offer? A solution within capitalism? No! A solution without capitalism? Yes!

If Mr. Brown’s policy is bound to run up against the laws and the class nature of capitalism, Marx also saw that the opposite to Mr. Brown’s policy offers no way of avoiding a crisis. He dealt specifically with the notion that higher wages would solve the problem of unsaleable goods by enabling the workers to buy more. Apart from other inevitable disharmonies of capitalist production and selling as between the production of the means of production and the production of consumer goods he knew that a general rise of wages at the expense of profits would, while increasing the demand for working class necessities, at the same time reduce the demand for capitalist luxuries, and necessitate a curtailment of their production. He wrote: —

“It is purely a tautology to say that crises are caused by the scarcity of solvent consumers, or of a paying consumption. The capitalist system does not know any other modes of consumption but a paying one, except that of the pauper or the “thief”. If any commodities are unsaleable, it means that no solvent purchasers have been found for them, in other words, consumers (whether commodities are bought in the last instance for production or individual consumption). But if one were to clothe this tautology with a semblance of a profounder justification by saying that the working class receive too small a portion of their own productivity and the evil would be remedied by giving them a larger share of it, or raising their wages, we should reply that crises are precisely always preceded by a period in which wages rise generally and the working class actually get a larger share of the product intended for consumption. From the point of view of the advocates of “simple”(!) common sense, such a period should rather remove a crisis. It seems, then, that capitalist production comprises certain conditions which are independent of good or bad will and permit the working class to enjoy that relative prosperity only momentarily, and that always as a harbinger of a coming crisis.” (Capital Vol. II. P.475).

Fundamentally crises can happen only because of capitalism, under which the workers’ continued employment depends on each part of the productive apparatus (production of means of production, production of necessaries and production of luxuries) keeping in line with every other part. As Marx wrote elsewhere:

“The last cause of all real crises always remains the poverty and restricted consumption of the masses as compared with the tendency of capitalist production to develop the productive forces in such a way, that only the absolute power of consumption of the entire society would be their limit.” (Capital Vol. III. Page 568).

Marx’s critics do not believe this. They believe that by some means or other they can keep each industry in line with the others, and with the demand of the market at home and abroad, without overproduction in one part of underproduction in another, without the production of unsaleable goods, and without disturbance from rises of prices and wages and fluctuation of employment.

They have been trying, without success, for a century or more. Why do they not turn their attention to the way out, that of having Socialism instead of capitalism?

Edgar Hardcastle

George Brown in Cloud Cuckoo Land (1965)

From the May 1965 issue of the Socialist Standard

Mr. George Brown, Minister of Economic Affairs, is convinced that there are such things as “fair" and prices, and has got the employers’ and employees’ organisations to agree to attempt to regulate prices and incomes. He knows “his people” so well to be sure that when the instructions get to the individual worker and capitalist they will make them work.

Briefly, the Prices and Incomes Policy is to regulate the growth of all incomes at the rate of three and a half per cent per year, whilst keeping prices stable. George Brown hopes that public opinion will influence capitalists to keep prices down when they could put them up, and that it will restrain workers’ wage demands.

This policy will fail for exactly the same reason as “free” enterprise regulated by the price system. Brown seems to forget that capitalism is a competitive class society and that the economic forces acting upon capitalists and workers are stronger than all the moral suasions and judgements. In fact already there are many claims by sections of the working class aiming to get on to a “platform of equality” with other workers, e.g. doctors, teachers, farmers, before the growth rate commences. Further, there are many workers, some recognised by George Brown as being lowly paid, who will have to press for increases considerably greater than three and a half per cent.

The big laugh is that if by some fluke George Brown were to succeed and peg wage growth rates at three and a half per cent, we may all be like Alice—running faster and faster to stay in the same place. There is not much point in having three and a half per cent increase in wages if you have to pay three and a half per cent more for the things that you require to get the health and strength to increase your productivity by at least three and a half per cent.

But then who are we to laugh at George? We can’t solve his problem either. In fact, within capitalism the problem is not soluble. If we widen our terms of reference however, the whole aspect takes a rosy, instead of blue, hue. The world has enough resources to satisfy the needs of man—we have the population capable of exploiting those resources, of producing the goods where man needs them—only capitalism, with its production for profit, stands in the way.

Rachman, Bloom, Ferranti are a natural part of capitalism. George Brown cannot change a society in which the hall mark, and professed route to efficiency, is competition, into one wherein co-operation prevails, without changing the economic basis of society; and we can rest assured that he cannot do that.

Ken Knight

". . . And too dear" (1948)

From the December 1948 issue of the Socialist Standard

It is some months now since the present Government started its "More production” poster propaganda campaign. The first, and perhaps the most notorious, of this series of posters, was the one headed. "Work or Want.” Many workers dubbed this the "Work and Want” poster. There followed the "Ten-per-cent” poster, being an appeal by Mr. Attlee for a 10 per cent, all round increase in production. Since then there have been a number of similar large bills, pictorial and otherwise, decorating the hoardings.

The recent one carrying the doggerel:

"Some make big stuff, Some make small,

    More from each means more for all.” 

gave rise to wisecracks and humorous comment from some workers. Popular was the parody,

"Some make big stuff, some make small,

   But the boss sits around and makes sweet nothing at all.”

The latest edition in this poster campaign is far from funny. It sounds a note of warning. This poster boldly announces that it is issued by "His Majesty’s Government.” In view of the speeches and writings of some of the members of that Government in their less palmy days, one can only conclude that, either they are indulging in downright lying propaganda and know it, or else they are so stupid and ignorant of the manner in which Capitalism operates, that one can only marvel that they should have achieved their present position. 

The poster reads:

"Jobs. The danger to full employment is not producing too much, but producing too little —and too dear.”

The fact that it has been found necessary to make such a statement as this is an indication that the real cause of unemployment is fairly widely appreciated by the working class. It is fast becoming apparent to the workers that, when goods have been produced in such great quantities that the markets of the world cannot absorb them, then production will cease, or, at least, slow down. In either case it spells loss of employment to many.

The warning of the approach of that day is contained in the final phrase on this poster. “ —and too dear.” No longer is there a “sellers’ market.” The post-war day is almost past when the demand for goods is so great that extravagant prices can be asked—and obtained—for them. Governments in all parts of the world are urging their respective workers to hustle, to produce more, to work harder, to work longer, to abolish restrictive practices, etc. All are striving to make the most of that wonderful market, that dwindling market which provides such remarkable profits. And with the wealth of goods that the workers are producing, the market is becoming saturated. It is less easy to sell now. Competition is becoming more keen. That means that prices will be cut in an endeavour to undersell competitors. Lower prices mean lower profits, unless the cost of production can be lowered also. Lowering the cost of production means that, either fewer workers are to be employed to produce a given amount; the same number of workers must produce more at the same cost; or the same number of workers must produce the given amount at a lower cost. And that word "cost” means “wages” to the workers. It is, of course, the second alternative that is being urged at the moment, with just a suspicion of a hint at the third.

We note that the employers in the Ladies’ Hairdressing Trade are saying that the present price cutting war in that trade will mean that they may he unable to meet their employees’ wage demands. This line of argument will not be confined to one trade alone.

Those words "—and too dear” are indeed a warning, maybe even a threat.

W. Waters.