Zackonomics — how green can you be? (2026)

From the March 2026 issue of the Socialist Standard

In their party political broadcast on 22 January, the Greens’ new eco-populist leader Zack Polanski ran through the various problems people face and pointed out that a lot of the wealth they create ends up in the pockets of the super-rich. But went on: ‘This isn’t just an economic failure. It’s a failure of leadership. The people we elected choose to serve the wealthy. And, yes, that is obscene. Good leaders put people before profit’.

Self-styled good leaders

So what does Polanski, as a ‘good leader’, propose that a Green Party government would do? Its manifesto for the 2024 general election promised ‘the public ownership of public services’ and talked about ‘taxing wealth fairly and borrowing to invest’, in particular ‘a Wealth Tax of 1% annually on assets above £10 million and of 2% on assets above £1bn’. This is the sort of thing the Labour Party used to advocate and will be one reason why the Greens have had some success in winning over people disillusioned with the Labour Party after Starmer (with a little help from Peter Mandelson) axed its leftwing.

In this sense, the Green Party is reviving the illusion that the Labour Party once entertained that capitalism could gradually be changed, through ‘public’ ownership, tax changes and social reforms, into a less unequal society. The only difference is that the Greens think that ‘good leaders’ should put the environment as well as people before profit (and sometimes before people). All the arguments that socialists have made against Labour Party reformism apply equally against the Greens. Capitalism is an economic system driven by firms, whether private or state (or cooperatives), seeking to make a profit and to accumulate this as more capital to be reinvested for more profit. Putting profit-making first is imposed on those making economic decisions, including governments, as an external coercive force that they ignore at their peril.

Polanski and the Greens, if ever they got to form the government and tried to put people before profit, would be ‘bad leaders’ as far as capitalism was concerned. They would put a spanner in the way capitalism works and provoke an economic downturn, forcing them into a U-turn, as has happened many times to Labour and similar governments in other parts of the world — punished for refusing to put profits before people.

What this means is that, contrary to what Polanski claims, a ‘good leader’, for capitalism, is someone who does put profits before people, someone who applies rather than challenges the economic laws of capitalism. Those individuals who workers elect to govern have no alternative. The nature of capitalism, as a profit-making system that can only work for the profit-takers, obliges them to do this on pain of provoking an economic slow-down.

Replacing them with self-styled ‘good leaders’, like he imagines himself to be, won’t change things despite good intentions. They, too, would end up having to serve the wealthy as that’s the only way that the system can work. What is needed is not a change of leaders, but a change of system. But that’s not what the Greens want.

Cranky economics

The Green Party accepts capitalism. It doesn’t challenge the ownership of the means of life by a minority nor that goods and services are produced primarily for sale on a market with a view to profit. At most, it seems to want to go back to an earlier stage of capitalism in which production was in the hands of small and medium-sized enterprises.

To tell the truth, the Green Party is all over the place when it comes to economics which, anyway, is not the primary interest of most of its members. That — and it’s a perfectly legitimate concern — is to protect and save the environment, which they imagine can be done by pursuing policies and passing laws without changing the basics of the present, capitalist economic system.

The Greens’ relative lack of interest in economics has left them open to all sorts of cranky theories. For instance, their manifesto for the 2015 general election declared that ‘the power to create money must be taken out of the hands of private banks’ and that ‘commercial banks should be no more than the custodians of publicly created money in current accounts’. This reflected a resolution on ‘monetary and financial reform’ carried at their 2013 Conference:

‘97% of the money circulating in the economy takes the form of credit that is created electronically by private banks through the accounting processes they follow when they make loans … The 1844 Bank Charter Act will be updated to prohibit banks from creating national currency in the form of electronic credit. To finance their lending, investment or proprietary trading activities, banks will have to borrow or raise the necessary national currency from savers and investors’.

This would considerably limit what banks would be able to lend, even to individuals let alone to business. But loans to profit-seeking firms are essential to the workings of capitalism as it means that capitalist entrepreneurs do not have to have accumulated all their own money before they can start a business. The role of banks is to make available money for investment that would otherwise lie idle or be scattered in small amounts.

To make up for the fall in bank lending that their scheme would bring about, the 2013 resolution proposed that ‘all national currency (both in cash and electronic form) will be created, free of any associated debt, by a National Monetary Authority (NMA) that is accountable to Parliament’ and that ‘any new money created by the NMA will be credited to the account of the Government as additional revenue, to be spent into circulation in the economy in accordance with the budget approved by Parliament’.

Imagining that banks create money out of thin air and wanting to devise a debt-free money is classic currency crankism. Banks don’t create new money when they make a loan; they lend out money that they have (from deposits and loans) or can quickly acquire (from the money market or the Bank of England) and the interest they receive comes from the future profits of loans to business and from the future wages of those to individuals. The 2013 Green Party resolution and 2015 Green Party general election manifesto were proposing an imagined solution to a false problem, a solution which if applied would lead to financial chaos and roaring inflation.

These days the Green Party does not push this policy much. It wasn’t in their 2019 or 2024 general election manifestos. However, it remains part of their official policy and is included in their Policies for a Sustainable Society. Polanski, who knows a thing or two about selling false remedies and so about what sells and what doesn’t, doesn’t mention the banking reform part and talks only about some National Monetary Authority providing the government with whatever money it needs to pay for a Green Deal and social services.

Magic Money Theory

This has led some, such as Jonathan Prynn, business editor of The Standard (formerly Evening Standard), to accuse Polanski of embracing another mistaken monetary theory  — self-styled ‘Modern Monetary Theory’, or MMT (which also, appropriately enough, stands for Magic Money Tree). This teaches that the government doesn’t need to borrow money but can simply create the money it needs and spend it; this will stimulate the economy and the government will eventually recover the money as increased tax receipts.

It is not clear that Polanski has embraced MMT. He may just be using the naive (and therefore good populist) argument that if the resources are there to save the environment or eliminate poverty (as they are) and the government has the power to create as much money as it wants (as it does), why does the government not simply create the money to use the resources? If it did this, it wouldn’t need to worry about borrowing money and so wouldn’t be in thrall to international speculators. Which is essentially what Polanski and the Greens are saying.

The trouble is that this ignores the way the capitalist economic system works. Wealth is produced in the profit-seeking sector of the economy in response to the prospects of making a profit. Governments as such produce no wealth; to get the money to buy what they need to carry out their activities they have to resort either to taxation of the profit-producing sector or borrow from those who have acquired money from that sector. When the government creates money it is not creating any new wealth, only claims on existing wealth. It can create as much of these claims as it likes but, if it creates more than the economy needs for its buying and selling and other monetary transactions, then the result will be a fall in the purchasing power of the claims and so a rise in the general prices level, or inflation.

If a Green government were to simply create and spend the money to protect the environment or to eliminate poverty or to improve living conditions generally, the most likely result is that there would be a one-time spurt in economic activity but in time there would be an inflation which could get of hand. Apologists for capitalism, such as Prynn, happen to be right when they point this out.

The conclusion to be drawn is not to accept that profits have to come before people, but that it is futile, and even counter-productive, to try to prevent this under capitalism. What is needed is to get rid of the profit system altogether and to use resources to simply and directly produce what people need. But this is only possible on the basis of the common ownership of the world’s productive resources. It would then no longer be a question of what should come first — profits or people? — because profits wouldn’t enter into it at all.

Adam Buick

World Socialist Radio - No Such Thing (2025)

Adapted from the November 2025 issue of the Socialist Standard

‘No Such Thing as Free Buses’ and ‘Woolly Thinking’, by The Socialist Party of Great Britain

Proposals for “free buses” under capitalism—like the plan by New York politician Zohran Mamdani—paint a misleading picture: there’s no such thing as “free” in a system based on profit. While fare-free public transport would indeed make travel easier and lower emissions, the column warns that funding it via higher local taxes essentially subsidises employers by reducing the cost of living, which in turn can suppress wages. The only way to make transport—and all essential services—truly free and accessible for everyone, according to the authors, is to abolish the wage system entirely and bring the means of production into common, democratic ownership, enabling a socialist society where goods and services are provided solely to meet people’s needs.

In Woolly Thinking the author critiques trade union leader Sarah Woolley’s call to raise taxes on the rich and corporations in order to fund public services like housing, health, education, and a “just transition.” While she argues that the money already exists in society, the article contends that under capitalism, that wealth comes from surplus value created by workers — which capitalists then reinvest or hoard. Taxing profits would reduce incentives for reinvestment, likely leading to less job creation, lower wages, and a shrinking tax base. The piece warns that these reformist proposals misunderstand how capitalism fundamentally operates.

Articles taken from the November 2025 edition of The Socialist Standard.

World Socialist Radio is the official podcast of The Socialist Party of Great Britain. We have one single aim: the establishment of a society in which all productive resources – land, water, factories, transport, etc. – are taken into common ownership, and in which the sole motive for production is the fulfilment of human needs and wants.

World Socialist Radio is the official podcast of The Socialist Party of Great Britain. We have one single aim: the establishment of a society in which all productive resources – land, water, factories, transport, etc. – are taken into common ownership, and in which the sole motive for production is the fulfilment of human needs and wants.

RSS Feed for No Such Thing as Free Buses’ and ‘Woolly Thinking’.

To read more news, views, and analysis please visit: worldsocialism.org/spgb

Cooking the Books: Woolly thinking (2025)

The Cooking the Books column from the November 2025 issue of the Socialist Standard

‘The money is there to make a better society and economy — it’s just in the wrong hands. We need to raise taxes on the wealthiest in society, and on those corporations who make record profits while our members struggle to put food on the table. That wealth should then be invested back into our communities — in housing, in health, in education, and in an industrial strategy that creates secure, unionised jobs. And investment must go hand in hand with a just transition that puts public need before corporate greed.’ So wrote Sarah Woolley, the general secretary of the bakers’ union, in the Morning Star (27 September).

By money she presumably means the monetary value that is attached to wealth produced in a capitalist society. Money, in this sense, comes into being when the wealth workers produce is sold. This is initially divided into wages and ‘surplus value’ as the part of what workers produce over and above their wages which is appropriated by the business corporation that employs them. The surplus value then comes to be divided into profits, ground-rent and interest. These are taxed by the government to get money to spend. What is left is accumulated by capitalists as more capital, with some spent to fund a privileged lifestyle.

So, at the end of a year a given amount of wealth, as measured in terms of its monetary value, is produced. There are also wealthy individuals and corporations who own previously produced wealth.

Woolley seems to accept this set-up and wants the government to change how what is produced under it is distributed. Some of the wealth appropriated by capitalists in the course of a year is to be taxed as well as some of the wealth accumulated by them in previous years. This ‘money’ is to be spent on better health, housing and education for the wage workers and their dependants and re-invested in providing secure and better paid jobs. She doesn’t put a figure on this but presumably the amount the government would spend would be much more than it now does.

She doesn’t seem to have taken into account what would happen if this was attempted. Remember we are talking about this happening in a capitalist economy where decisions about wealth production are in the hands of profit-seeking corporations.

So what would happen? First, the profits that corporations get to keep will be smaller. Since profit-making is what motivates them that incentive will be reduced. Less profit will mean less investment, resulting in less wealth — less money in her sense — being available to tax in the following year. Less investment would also mean fewer jobs, and so less paid out in wages. In short, there would be an economic downturn.

The fact is that a government cannot simply take money from the capitalist class and spend it to improve things for the working class. It cannot put ‘public need’ before ‘corporate greed’.

Woolley could come back and say that in that case the government would have to use some of ‘the money’ taken from the wealthy and their ‘greedy’ corporations and itself invest it. That would create other problems as the state investment would also have to yield profits to be sustainable. Maybe she does envisage a state-run capitalist economy as the way out, but it’s more likely to be a typical example of the confused rhetoric employed by left-wing trade union leaders — and by the left-wing politicians behind the new Corbyn party — which reflects a lack of understanding of how capitalism works.

Cooking the Books: Corbyn’s crumbs of comfort (2025)

The Cooking the Books column from the September 2025 issue of the Socialist Standard

‘We will only fix the crises in our society with a mass redistribution of wealth and power. That means taxing the very richest in our society’, tweeted Corbyn on 24 July announcing the launch of a new political party.

That sounds radical but a ‘mass’ redistribution of wealth is not the same as a ‘massive’ redistribution, only a redistribution to some mass of people. Interpreted literally, it would mean that some of the wealth of the very richest is to be taken from them through taxation and distributed amongst a large number of individuals. Let us say from the top 1 percent to those in the bottom 50 percent.

According to the Office for National Statistics, ‘In the April 2020 to March 2022 period, the wealthiest 1% of households held 10% of all household wealth in Great Britain, which was the same as the proportion held by the least wealthy 50% of households combined’.

The wealth tax proposed by former Labour leader Neil (now Lord) Kinnock and others of 2 percent of wealth holdings of over £10 million has been estimated to raise £24 billion a year. The total number of households in the UK is about 28 million, so 50 percent is 14 million. £24 billion divided by 14 million is about £1,714 (£33 a week) per household. No doubt a welcome amount for the families concerned but hardly enough to bring about any permanent improvement in their condition. Even if it is used to improve services rather than as a cash payment, £24 billion divided amongst 14 million is not going to be able to provide much of an improvement.

But perhaps the ‘mass’ that is to benefit from this redistribution is not to be as large as that. In an article in the Guardian (30 July) introducing the new party, Corbyn wrote that one of its policies would be to make ‘the wealthiest in society pay a bit more in tax to ensure that everyone should live in dignity’. About 20 percent of the population are considered to live in poverty. If the £24 billion were to be divided only amongst the bottom 20 percent, some 5.6 million, the amount per household would be £4,286, or an extra £82.42 a week. This would certainly help but whether it would be enough to allow them to live in dignity is another matter.

The original tweet went on to say the ‘mass redistribution of wealth and power’ intended to ‘fix the crises in our society’ would mean ‘bring[ing] energy, water, rail and mail into public ownership’. But what about the rest of production? Seemingly that is to rest in private capitalist hands, so the ‘our society’ the new party is talking about is present-day capitalist society of minority class ownership and production for profit.

Creating an egalitarian society through a redistribution of wealth within capitalism is a pipe-dream as it goes against the logic of the system. Capitalism is based on a minority owning the means of wealth production and on these being used to generate profits that are accumulated as more wealth for the owners. Inequality of wealth ownership and the tendency for the wealthy to get wealthier are built into the system.

Attempting to counter this will mean that the new party will end up being a mere party of protest, spending its time criticising the government for not doing what it ‘demands’ and ‘resisting’ when the workings of the capitalist economy force the government to make things worse.

Cooking the Books: Axe the rich (2025)

The Cooking the Books column from the August 2025 issue of the Socialist Standard

One of the measures being urged on the government to solve its ‘fiscal problem’ is ‘tax the rich’ by means of a levy on the personal wealth of some capitalists.

‘Advocates of a UK wealth tax, including Lord Kinnock, have proposed an annual 2% tax on wealth above £10m. Wealth tax campaign group Tax Justice UK has calculated this would affect about 20,000 people — fewer than 0.04% of the population — and raise £24bn a year’ (Sky News).

According to the latest figures (for the period 2020 to 2022) from the Office for National Statistics, ‘The wealthiest 1% of households had wealth of at least £3,121,500’.

So, the proposal would only affect some of the super-rich, not even all of the ‘top 1 percent’, let alone the whole of the capitalist class.

The ‘fiscal problem’ facing the British capitalist state, which Labour currently has responsibility for running, is how to pay for its essential spending on such things as the military, education and health for the working class, ‘benefits’ for those not in work, as well as its own administration. This can only be covered by money raised from taxes or through borrowing. The government doesn’t want to borrow more since this risks raising the rate of interest it has to pay lenders; which in turn increases the amount of tax it would need to raise, since taxation is the only source it has of money to pay the interest on its debts (the so-called ‘National Debt’).

The irony is that all taxes already fall in the end on property and property income, irrespective of who pays them in the first instance. Obviously corporation tax, income tax on dividends, capital gains tax, inheritance tax, and employers’ national insurance do so directly. But other taxes do so indirectly.

To be able to work efficiently workers require a given standard of living and an adequate money income to pay for this. By and large, though not automatically, what workers are paid goes up in line with the cost of living. If this rises, so sooner or later will wages. Taxes such as VAT on what workers need to buy to maintain their working skills are in effect passed on to employers. Similarly with a direct tax on wages; this too gets passed on. In fact, with PAYE, workers never even see the tax part of their nominal wages; what counts in terms of maintaining a standard of living appropriate to their working skills is their take-home pay and what it will buy.

Arguments about taxation are essentially arguments about how much in taxes particular sections of the property-owning class should pay. Taxes on wages and on what workers consume fall on employers. A wealth tax would be a tax on what capitalists consume in extravagant living and would enable part of the burden of taxation to be shifted from employers on to the super-rich. It wouldn’t make any difference to workers.

A wealth tax also implies the continued existence of the super-rich. One of their arguments against it is precisely that one effect of such a tax would be to drive some of them out of the jurisdiction of the British capitalist state.

Socialists don’t want to maintain the rich so that the state can milk them. Nor do we want to redistribute their wealth amongst the rest of the population so as to try to achieve a more equal society contrary to capitalism’s nature. We want the means for producing wealth to be commonly owned by society as a whole so that they can be used, under democratic control, to directly provide what people need. We don’t want to tax the rich. We want to abolish the division of society into the rich and the rest.

So They Say: Menu: Air Pie — (1974)

The So They Say Column from the September 1974 issue of the Socialist Standard

Menu: Air Pie —

Popular romantic writers have a stock of words and phrases for instant effect on their suggestible readers: tender, moonlight, yearning, heavenly vision, and so on. Similarly, Labour politicians rely on a small vocabulary designed to make their followers salivate like Pavlov’s dogs — “fair shares”, "equal opportunity”, “make the rich pay”, etc.

On 8th August Denis Healey, Chancellor of the Exchequer, announced the Labour Government’s plans for wealth and gift taxes. The proposed starting level for the wealth tax is £100,000. To the press, Healey “admitted . . . that the main reason for the taxes was to create a greater atmosphere of social justice in Britain” (Guardian). On television, asked specifically what benefit the working class would get, he said poorer-paid workers would feel better if they knew money was being taken from the rich.

Pavlov’s dogs, dribbling in response to stimuli, failed to notice that the bell ringing was not preliminary to but instead of dinner.

— and an Empty Cup

The real response should have come from the rich, if Healey was attacking them so violently. Hear how they complained:

No one in the City jumped from 20th storey windows, fled the country or even squealed very loudly yesterday on publication of the Government’s Green Paper thinking on a wealth tax. It has singularly little effect on share dealings on the Stock Exchange . . . About the harshest comments on the paper were that it was 'a time-consuming irrelevance’, by the Association of Chambers of Commerce.

But not only do they not mind. The view expressed to The Guardian's business editor was that

the City would not mind a wealth tax if it enabled the Labour or any other Government ‘to institute a meaningful wages policy’.

It is accepted both in the City and by many business men that the wealth tax proposal could be a psychological advantage to the Government in persuading trade unions to accept a nil growth, or even a cut, in living standards over the next year or so.

What Can't Happen Here ?

The history of the “Watergate scandal” and its consequences leading to Nixon’s downfall from the US presidency was a showpiece of hypocrisy — Nixon’s, his accusers’, and the righteous commentators’. Could such a thing happen in Britain? The New Law Journal on 2nd August had some interesting comments.

Watergate ought to provide the necessary impetus to the Government to get on with the task of rewriting

the Official Secrets legislation as recommended by the Franks Commission without further prevarication.

While retaining the strictest security over those matters which are matters of national security, there is an urgent need to remove ‘confidential’ and ‘secret’ classifications from all material which allows officialdom to maintain a cosy secrecy over matters which may merely embarrass, or be inconvenient to, slipshod or inefficient officials.

Which is saying, delicately, that the difference between America and Britain is not over what is likely to happen but over what is likely to be found out. Incidentally, there is a curious word misuse in the extract quoted. “Prevaricate” means go astray, transgress, be equivocal, deceive. The word for putting things off, which is what they mean, is “procrastinate”. A Freudian error?

Pass, Friend

Nixon’s successor, President Ford, is reported to be looked-on favourably by the Chinese government. They are pleased that he insists on military spending as a top priority, because of “their desire to see the strategic balance between the super Powers maintained in America’s favour to inhibit Soviet expansionism” (Guardian, 10th August).

The Chinese view is the one all capitalist statesmen must take — looking for advantage for their own trade and strategy, and never mind from whom. The report says:

Peking . . . will probably only devote a few delayed lines to Nixon’s departure. But the late President was, in any case, much less the architect of the new China policy than was Dr. Kissinger, and the latter’s presence on Mr. Ford’s Administration will certainly be welcome in Peking.

Blowing the Gaff

Fascists in Italy have been in the news with acts of terrorism. One would assume the Communists to be up in arms to extinguish fascism; and one would be wrong.

A State subsidy for all Italian political parties began operating in July; the Communists’ share is £7 millions. A veteran leader described the subsidizing of the fascist Movimento Sociale Italiano as “horrendous and ignoble, so bestial as to fill one with horror”. He was attacked by the party newspaper and his fellow leaders. Only the fascist movement was “horrendous” — but not the subsidy. The Guardian, 13th July, said :

Signor. Pajetta, and the Communists in general, also are opposed to Senator Terracini’s proposal that Parliament should vote for the disbanding of the MSI. The Communist line is that it can be defeated through the ballot box. Privately, they may also realize that a Fascist enemy is politically good to have around.

Plenty Amidst Poverty

There is a physical training game called "O’Grady’', in which the trainees have to do the opposite of what they hear. It must be like that in Communist countries, where equality and the expropriation of the expropriators are articles of faith — while inequality grows and the expropriators’ cigars get bigger.

The Observer had an item on 14th July headed HUNGARY'S PROPERTY BOOM. It was about the rise in house prices in Hungary following legislation to regularize the private ownership of property:

There has recently been a widespread move to acquire houses in the country, not only by the Communist élite, but also on a wide scale by the new managerial class.

Everything above the upper limit is classified as ‘luxury’. But such properties will not be confiscated, as they were when the Communists first took over.

Instead, the owners of ‘luxury’ residences will have to pay a special tax. This is levied on houses and apartments worth more than £20,000 at between ½ per cent and 1 per cent, depending on the number of rooms, and on holiday villas of the same value at between 1 per cent and 1½ per cent.

Getting Dark, Down Under

Our July issue had an article on conditions in Australia, where workers from Britain often go in the mistaken hope of shedding their problems. The unemployment figures released there on 12th August show 93,585 out of work, i.e. 1.90 per cent. of the estimated labour force. Vacancies fell by 21.3 per cent., from July, against the normal trend at this time of the year. The Parliamentary Opposition has predicted 100,000 unemployed by December, with inflation at 20 per cent.

The Guardian correspondent in Canberra wrote on 12th August that

the estimate could prove conservative. The Cabinet seems to have swung solidly against the Treasury argument for further deflationary action in the September 17 budget, for fear of union reaction against unemployment and the need to get voluntary wage and price restraints working.

United Fans Queue Here

The football season has begun; and its weekly accompaniment of numerous arrests and convictions as rabbles of "supporters” smash up everything and everybody they meet in the towns they are visiting.

When the epidemic was starting in 1969 the Notting Hill Anarchist Group issued a leaflet which really should not be left unnoticed. Extracts (our italics) as follows:

Football crowds have always been rough and managed to enjoy themselves. It’s part of the game. Things only turn really unpleasant when a large number of blue uniforms appear on the scene.

After alleging that the directors of football clubs pay the police to arrest “standing” spectators so that expensive seats can be put in the space they now occupy, the leaflet ends:

It’s good to know this anyway, and to get things straight in your own mind about what’s happening, but it’s not worth fighting it on your own . . But if you do get arrested, or anybody you know does, try and send somebody along to see us and we’ll see what we can do to help. The people who are giving out these leaflets will be standing in the same places after the game is over.

This inane truckling to (and half-incitement of) hooligans is supposed to represent a serious outlook on society. Pathetic, isn’t it?

Robert Barltrop

Finance and Industry: A tax on wealth (1963)

The Finance and Industry Column from the April 1963 issue of the Socialist Standard

POLITICS

A tax on wealth

Time was when the Labour Party paid lip-service at least to the idea of dispossessing the capitalist class of its wealth. Only a few years ago they were pushing the panacea of nationalisation, that travesty of Socialism, though they were prepared even to dilute this by liberal helpings of compensation.

Now, nationalisation, even of this milk-and-water variety, has become a dirty word. The latest idea is a wealth tax—nothing too sweeping, you understand, an annual levy on say all wealth over £20,000 to bring in perhaps £200 million in extra taxation.

Mr. Callaghan, Labour’s shadow Chancellor of the Exchequer, was deputed to fly the kite. But he was careful not to go too far nor to frighten anybody. ". . . only one person in every 100 would be affected,” he said, pointing out that such taxes on wealth already operated in many countries, including Sweden, West Germany, Belgium, Norway, Holland, India, and Denmark—nothing at all ‘‘revolutionary ” about the idea in fact.

Of course, the idea is not revolutionary. But since when has anybody thought that anything emanating from the Labour Party has the remotest connection with revolution? And, even on the Labour Party's own shallow terms, what feeling can anyone now have, other than contempt, for its latest line?

INCOMES

Who earns what?

If only for the record, the latest income figures from the Inland Revenue deserve mention.

Last year, they report, the number of people earning more than £100,000 a year jumped from 63 to 81. There were similar increases in all the top income brackets. Here is the full table (number the previous year in brackets):

Contrast this with the bottom end of the scale where 1.3 million earned about £500 a year; 2.6 million, £600; and 2.2 million, £700. In addition, another 2.1 million earned hardly enough to pay income tax at all.

There are still people who believe in the myth that incomes are being equalised. These figures should shake them, for they show not the slightest evidence of a trend towards equality.

Of course, some will agree that the details relate to figures before tax and that it is only after this has been deducted that the comparison should be made. Agreed, the gap becomes narrower when this is done. But our “equalitarians” must really be simple people if they think this shows the true picture. Even as regards income, there are still many ways —and not illegal ones, either—of evading the tax net. “Expenses on the firm ” is only the most well-known device for doing this, there are others.

But let us come down to fundamentals. Income is any case dependent on wealth—it is ownership of wealth that really matters and all the wishful thinking in the world cannot wish away the fundamental fact that the pattern of wealth ownership has remained virtually unchanged. Roughly 10 per cent. of the population still owns roughly 90 per cent. of the country’s wealth.

And that is the fact that matters.

BUSINESS

Mergers and takeovers

There have been fairly frequent comments in these columns recently about the growing trend towards concentration in industry. Hardly a day goes by without an announcement somewhere of a merger or takeover. Sometimes the takeovers involve really big business, as with the abortive attempt by I.C.I. on Courtaulds; more often it is the big concerns swallowing up the medium and small fry, or the medium ones taking over their lesser brethren. Mergers tend to take place between equals, to avoid competition between themselves or to make themselves strong enough to resist bigger rivals.

All this is well-known. But just how far has the development gone? Exactly how much concentration is there in modern British industry?

The Conservative Bow Group has recently mads an effort to answer these questions in a pamphlet called Monopolies and Mergers. Taking the three biggest firms in each industry, they have calculated what proportion they account for of the total output. Some of the results can only be taken as broad guides, but here are their findings:

There are really no surprises in the list —artificial fibres, oil refining, tobacco, sugar, dyestuffs, margarine and soap, are all well-known as being mainly in the hands of a few prominent firms.

We should add that the figures relate to 1958 and some of the percentages may actually have risen since then as the result of further takeovers or mergers.

INDUSTRY

Stranger still

In last month’s Standard we mentioned that the French subsidiary of the U.S. Remington office machinery firm had recently been closed down and production transferred to the factory in Holland. This was followed, a few days later, by the closing of the typewriter side of the company in Glasgow and its transfer, again, to Holland. Altogether, a nice example of the international workings of present-day capitalism.

We also discussed in the same issue the surprise and secret takeover by U.S. Chrysler of the French car firm, Simca; adding that 25 per cent. of the shares in the Simca concern were actually owned by one of its competitors, Italian Fiat.

The latest development in the story is the news that the former Remington factory in France may soon be taken over by, guess who? Yes, you’re right. Fiat.

What Fiat intend to do with it if they buy it has not yet been disclosed. But whether it has to do with cars, or typewriters, or something quite different, we can be sure of one thing—there is the prospect of profit in it somewhere.

All we need to really complete the story, of course, would be able to say next month that the former Remington factory in Glasgow had also been taken over in its turn—by Simca.

Who knows? Capitalism is fast becoming nonsensical enough for anything.

Stan Hampson

The Impotence of Reform (1975)

Book Review from the January 1975 issue of the Socialist Standard

Modern Social Reforms, Arthur B. Shostak. Collier-Macmillan Publishing Co. £2.95.

This book has the presumptous sub-title “Solving Today’s Social Problems”. The fact that today’s social problems are not amenable to being solved by reforms, somehow seems to have escaped the notice of Shostak, and the numerous tinkerers to whom he refers.

Shostak poses the question as being one of finding appropriate reforms within the framework of obstacles presented by human nature. Thus it is not class interest, property relationship and the profit motive of capitalism that render reforms futile. It is merely that we need a clearer grasp of what human nature really is, in order to formulate reforms that fill the bill.

As Socialists we argue that a clear understanding of capitalism is indispensable to comprehending what is commonly called “human nature”.
Shostak is like the man who craves recognition as an ace motor mechanic, but after closely examining the old banger parked in the road, fails to discover it is out of gas. While projecting ideas as possible reforms into the 1980’s and on to the turn of the century, Shostak notes that “the taxpayers’ appetite for further costly programmes is small”. It simply is not possible to legislate at will some abstract set of concepts (however seemingly laudable) and thereby get rid of poverty, bad housing, unemployment and war. Capitalism defeats all such policies.

Reforms have to be paid for. The capitalist class and governments, which are the political power centres of that class, are dominated by the economic dictates of capitalism. Profit is the main spring of the system. Taxes are a levy on the surplus-value (produced by the working class, but owned by the capitalists). Reforms are a particular kind of investment by the capitalist class as a whole. They need a schooling system, they need fairly healthy workers, they need a network of motorways, and a modern military complex with which to warn off rivals in the struggles for world markets and resources. There must also be enough surplus-value left for capital-renewal, so that fresh exploitation of wage-labour can bring forth future surpluses. The profit motive ultimately decides the priorities.

When a boom peters out and capitalism slides into recession the capitalists become reluctant to re-invest as profit margins begin to narrow. Pressure on governments to reduce taxation builds up, and governments start to look for things to cut back on. Government revenues do not come out of some bottomless purse. They come from the surplus wealth produced by wage-labour, and are therefore subject to the economic laws of capitalism, the machinations of vested interest, and the fluctuations of world markets.

Arthur Shostak is an American author, and despite the familiar ring of it all, he is aiming his “Modern
Social Reforms” at America’s “Social Problems”. He must currently be reading reports in the American newspapers similar to that in The Guardian, (25th October 1974) which tell of a sharp recession in America with unemployment expected to rise to seven and a half per cent., and car sales slumping by twenty one per cent., compared to the same period a year ago. He must be aware that “The anti-inflationary package now on the table represents little more than a timid compromise between various warring factions advising the President,” and that President Ford is intent upon a reduced and balanced federal budget, while maintaining war expenditures, and also as The Guardian report states:

  He has been told by several of his economic advisors that he cannot have both, and at the same time provide relief for the unemployed and lower income groups.

In his eager quest for answers Shostak looks at reform patterns in Japan, Israel, Canada, Scandinavia and Britain. None of the reforms enacted in any of these countries has solved any of the major social problems engendered by capitalism. There is no reason to suspect that their importation into the United States will improve their effectiveness.

Shostak sets down four main schools of thought on social reforms. The conservative, liberal, radical and visionary. A series of tables is produced to show the positions taken by each of these on various social problems. While in his thinking, the conservatives and liberals tied to the present system, the radicals are presented as revolutionaries, who regard themselves as temporary. When however they come to spell out their demands, they get no further than the usual leftist claptrap.

  A 90% tax on inheritance and estates and tax reforms to help the working man. Free medical care for everyone. Public ownership of utilities. Strict controls on the profits of banks . . .

So for example if Paul Getty dies (despite all the benefits available to him under free medical care) and leaves £300,000,000 his heirs would have to struggle along on the mere £30 millions left after taxes.

The visionaries are billed as way-out re-thinkers whose ranks subdivide to include believers in astrology, witchcraft, Scientology, and Buddhism. When pressed for a programme, Shostak cites Theodore Roszak, who offers among other irrelevancies:

  Labour-gift and bearer exchange systems in the local economy “and” . . . neighbourhood courts in a participative legal system.

Suddenly, as though from nowhere, and out of harmony with the confusion surrounding it, comes a shaft of light. During a discussion about work, Shostak relates that he put forward

  the less popular view that the root of the inadequacies lies in the ownership of the means of production.
  And the relatively fresher view that faults the quality of the jobs themselves and would thoroughly overhaul the very meaning of the work itself in preference to mere tinkering with the mechanics of work distribution.

No reform programme can meet what is implied in that paragraph. It implies that the means of production and distribution need to be owned in common, so that work can be guided by the principle “from each according to his ability, to each according to his need”. And man can direct his efforts to the common welfare of all, instead of the accumulation of profits by a few.

Finally, may we be pardoned an act of cruelty against Mr. Shostak, in order to be kind to him? He uses quotations to open his chapters. The one from a certain Todd Gitlin is particularly telling.

 Ideology shakes when it no longer convincingly interprets reality whereupon it must change to account for the new reality, or die.

The ideology of reformism is indissolubly bound to capitalism They cannot change. They will die together and make way for the reality of Socialism.

Harry Baldwin

Editorial: Taxing Capital Gains (1962)

Editorial from the May 1962 issue of the Socialist Standard

Lots of speeches have been made and articles written about the "unfairness" of stock exchange and property speculators having been able to buy shares or land or buildings, hold them for a while, and sell at a profit without paying tax on it. The people who see this as “unfair” do not think it “unfair” that the wealth the workers produce should belong to someone else.

Now the short-term speculators will have to pay tax, and we are being assured that this is a small step towards making the rich less rich and the poor less poor. Of course, it will have no such effect. America, which has for years had taxation of capital gains, has seen no lessening of the concentration of wealth. On the contrary, the inequality is as great as, or even greater than, it has ever been, and in nine years the owners of five million dollars or more have multiplied from 2,113 to about 10,000.

Wealth-ownership in Britain sheds even more light on the success of the propertied class in holding on to their own, for here, in the past 100 years, there have been many promises and campaigns to reduce inequality with no result whatever.

One of the advocates of a wealth tax, Mr. Samuel Brittan, writing in the Observer (April 8th, 1962). rejected in advance the idea of a mere capital gains tax. as one that “deserves to be laughed out of court," and stated his case for something much more drastic. He based it on what he described as the “fantastically unequal distribution of wealth” in this country, and urged that there should be a regular annual tax on accumulated wealth itself, not just on the increase of it. He pointed out how easy it would be to collect such a tax because it need be levied only on the 800,000 people who own £20.000 or more and possess between them nearly half of the total personal wealth. (He also thought that the total of personal wealth and the inequality of ownership are probably even greater than the official figures show).

Each time someone like Mr. Brittan comes along to advocate a new scheme for reducing inequality he has to explain why earlier schemes failed. Mr. Brittan recalls the death duties, which in their day were supposed to do the trick, and tells us. what is indeed common knowledge, that death duties “have become a farce." He quotes one example, the Ellerman fortune, but does not tell its interesting history.

In 1933 death duties reduced the fortune from £40 million to £18 million. By 1937 it had increased to the original £40 million and it is now reported to be about £100 million!

Other nostrums for dealing with inequality have included taxation of land values (in the Liberal Programme in 1892), supertax and surtax and taxation of company profits. There was, too, the movement for a “capital levy” after the first world war, favoured by Liberals. Tories, and the Labour Party, but dropped on grounds of administrative difficulties and probable disturbing financial effects.

If it had been imposed it would merely have been a transfer of wealth among wealthy persons, not a reduction of the wealth and income of the propertied class. And nationalisation in some muddled way was supposed by the Labour Party to have the effect of lessening inequality.

After all those years and all these “cures” capitalism exhibits just the same “two nations" that the Tory Disraeli described over a century ago.

One man who saw capitalism as it really is was the banker R. H. Brand (later Lord Brand) who in 1923, in a booklet "Why I am not a Socialist" wrote: “There has always been and there will always be inequality of wealth . . .  nothing like equality can be attained without the abolition of the whole present system of wealth, ownership and production.”

As a wealthy man who prospered under capitalism his attitude was understandable. By the same token the working class should give up following futile schemes for achieving the impossible dream of an equalitarian capitalism. Their interest lies in establishing Socialism,

The Capital Levy again (1969)

From the October 1969 issue of the Socialist Standard

The Labour Party National Executive, with an eye to the next General Election, is issuing a series of discussion documents to form the basis of policy to be recommended to the Party’s Annual Conference this month. The first of these, Labour’s Economic Strategy, covers a wide field, much of it already familiar in Labour Party propaganda, including government direction of investment in industry; limitations of dividends and top salaries; regulation of conditions of employment.

It proposes a “Workers Charter” giving the individual worker a legal right to training and retraining and assistance in moving jobs, transferability of pension rights on change of jobs and a new redundancy payments scheme. Special arrangements are proposed to raise productivity and wages in industries with particularly low wage levels.

Although the Report says that the Labour Party's attitude to “public ownership” has not changed and that “more and more of Britain's industries must move inevitably into public hands” the specific proposals relate only to the aviation industry, drug manufacture, North Sea Gas and a State Building Corporation and most this is for government shareholding, or the setting up of a government body competing with private companies, not the creation of new government monopolies. The Times (21 August 1969) reads into it “further evidence of a swing away from Nationalisation policies in favour of greater intervention by the State in the control and shareholding of British industries”.

The item in the Report which drew most attention in the Press is however a proposal for an annual Wealth Tax, a tax levied not on income but on accumulated wealth. Fortunes of less than £50,000 would be exempt and the scheme would start with an additional annual tax of £500 on £50,000 rising to £20,000 on a fortune of £400,000. The rate above £400,000 would be 5 per cent. It would raise an additional £250 million a year.

This is not the first time the Labour Party has advocated a tax on wealth. Under the name Capital Levy the Labour Party's election address in 1918 proposed a levy starting on ownership of £1,000 and with steeply graduated rates “so as to take only a small contribution from the little people and a very much larger percentage from the millionaires.” They later raised the proposed exemption limit to £5,000 but the whole scheme came to nothing as the Labour Party lost the election and it was not seriously revived when the first Labour government took office in 1923.

The outstanding difference between the 1918 proposal and the present one is that in 1918 it was intended to use the money raised by the levy to pay off the National Debt,, thus reducing the government’s annual payments of interest to investors holding Government securities. This time the wealth tax is to provide additional government revenue without reducing taxation.

Quite unintentionally, but with devastating effect, this new Labour Party proposal vindicates the Socialist Party of Great Britain's argument that trying to reform capitalism by gradual inroads into the wealth of the propertied class (not that Labour are trying to do this anyway) is utterly futile. In the 1918 Labour Party election address it was stated that “one tenth of the population owns nine-tenth’s of the riches of the United Kingdom”, and at that and every subsequent election the Labour Party has declared its intention to get rid of this inequality. Now, half a century later, it is frankly admitted that all of the measures supposed to bring about equality—death duties, steeply rising income tax and sur-tax, social services and nationalisation among them — have left: a condition of “extreme concentration of wealth”.

On the official figures quoted in the new Labour Party report, the degree of concentration appears to have changed to that now the top ten per cent own only 74 per cent of wealth, but the Report itself challenges the accuracy of the figures. Being based on death duties these figures “under-estimate the degree of concentration” because they ignore wealth which evades death duties by gifts made during the individual's life time, or by the setting up of trusts and family settlements and the like.

The Labour Party suggests new measure to stop the leaks and evasions but it is well-nigh certain that new devices for tax avoidance will be discovered and the inequality will go on. An example of what does happen as capital accumulates and income from rent and profit increases is the Ellerman family fortune. In the nineteen thirties it was cut from £40 million to £18 million by death duties but within four years it was back to £40 million. (Evening Standard 8 & 9 September 1937), and an article in the Sunday Telegraph (17 August 1969) estimated that it is now £150 million.

Many workers will no doubt be persuaded that new measures to tax the rich will weaken capitalism and benefit wage earners.

The Labour Party Report provides an answer to this too, for in the desire to prove the practicability of a tax on wealth, it states that a wealth tax of this kind is already operating in a large number of countries, including the whole of Scandinavia as well as Luxembourg, Holland, Germany and Switzerland and capitalism is not “weak” in any of these countries.

Proposals of this kind have nothing to do with Socialism, nor do they help to raise working class living standards. As in the countries named, the introduction of a wealth tax in Britain would be just one of a number of alternative methods of meeting government expenditure in the interests of capitalism.

The broad aim of the Labour Party is admitted to be that of raising productivity and efficiency, increasing capital investment and in general to maintain the competitive position of British industry. If they had the opposite intention, that of improving the financial position of the workers at the expense of the property owners, they could quite simply take off wage restraint and encourage wage claims.

Socialism is not a better way of running capitalism but a world wide system of society in which the private ownership of the means of production and distribution would be replaced by social ownership. Not some promised encroachment on private ownership but its abolition.

Edgar Hardcastle

Not Piffle but Propaganda for Capitalism (1974)

Book Review from the October 1974 issue of the Socialist Standard

“Why We Need a Wealth Tax”, J. S. Fleming and I. M. D. Little; Methuen & Co. 34 pages, 45p.

The authors are described as two leading Oxford economists. Another economist, Mr. Patrick Hutber, in his Sunday Telegraph column (1st Sept. 1974) was moved to near-frenzy when he read it: “Little piffle”, “contemptible”, two dons "giving a passable imitation of the gaga”, and more to the same effect, By contrast the Sunday Times of the same date, while pointing to technical weaknesses, was more sympathetic and regarded it as “an important pamphlet, which could well have a big influence on public policy.”

The central idea is to make a tax on wealth a permanent major basis for raising government revenue, so arranged as to wipe out the very rich. The pamphlet was written before publication of the Labour Government’s “Wealth Tax” and “Gift Tax” proposals. In an interview Professor Little stated that there is nothing in the Government’s proposals that would make them want to alter their much more comprehensive scheme (Financial Times, 2nd. Sept. 1974).

The issue between the authors and Mr. Huther is a simple one. They argue that “in a progressive mixed society” (their nonsensical name for capitalism) “some clever, lucky, efficient individuals have to be allowed to become rather rich. But they do not have to be extremely rich — say, with over £250,000.” Mr. Hutber won’t have this at all: he thinks that millionaires are good for us: “It is better to have 300 new millionaires, and old age pensioners receiving £20 a week, than strict equality and a basic pension of £10.”

While Fleming and Little would not make “the accumulation of wealth more difficult” below the £250,000 level, they would start their tax with 1½% or 2% on £21,000 (at 1974 prices) rising at higher levels to 20%. Their case for having the possibility of accumulating wealth is the old argument of all the capitalist economists, that it provides “incentive” and thus increases the production of wealth “for the community”. (Those who are interested in political curiosities may like to compare the Fleming- Little scheme with that advocated by the Communist Party of Great Britain in its 1970 Election Manifesto: “The introduction of a wealth tax. By taxing all fortunes over £20.000 at an average rate of 3% . . .”)

Much heat will be generated about schemes to plunder the rich or very rich, whether from Fleming- Little, the Labour Party, the Communist Party, or any other would-be reformers of capitalism, but from the working-class and Socialist point of view it is a lot of sound and fury signifying nothing. Socialism is not a scheme to redistribute wealth and poverty under capitalism, but to get rid of capitalism. The working class are exploited by the capitalist class, no less by the “small but progressive businessman” whom the authors want to help than by the tycoons who stand to lose. 

Workers should avoid falling into the trap of supposing that because particular politicians come under fierce attack from some capitalists, what they advocate must be in the interests of the working class. Some of the greatest friends of capitalism and enemies of the working class, for example Lloyd George, Roosevelt, Ramsay MacDonald, have come under the fiercest denunciation from capitalist backwoodsmen who had not the wit to see what was really happening.

This is where Fleming and Little come in. They are not seeking to undermine capitalism but to prop it up. They see the resentment aroused by super-fortunes as a danger to capitalism. They want to dope the workers into accepting capitalism. They hold that “anything tending to lead to greater industrial concentration is undesirable and inimical to capitalism in the long run”. In the interests of capitalism as a whole they want to sacrifice the millionaires.

Of course, with the normal blindness of their kind, they never even consider the possibility that capitalism should be replaced by Socialism.

Edgar Hardcastle

Socialism is the Only Alternative (2013)

From the June 2013 issue of the Socialist Standard

On 22 June a People’s Assembly Against Austerity is being held in central London, with the support of various leftwing groups, trade unions, and Labour and Green Party politicians. Its aim is to ‘mobilise’ people to oppose the present government’s austerity policies. But to what end? To get the government to change them? To elect a government that would reverse them? Or to get rid of the system which, when in an economic downturn, requires the government to impose austerity?

Given that we are living in a period of capitalist crisis, what are the chances of any government being able to abandon austerity? Some of those present seem to think that this is feasible. The Communist Party of Britain, for instance, are proposing a ‘people’s budget’ to ‘stimulate economic growth and reduce growing social inequality,’ involving such measures as ‘invest in health, education, housing, public transport and the environment,’ ‘launch a massive public sector house-building programme,’  ‘nationalise the banks and direct funds into manufacturing, small businesses, cooperatives and housing,’ as well as renationalising the railways and utilities and increasing pensions and state benefits.

This assumes that capitalism can be reformed into a system responding to people’s needs instead of a system geared to accumulating capital out of profits. That they are thinking in terms of capitalism, even in its private form, can be seen from the answer they give to the question they themselves pose of ‘where would the money come from?’

‘Introduce a 2 per cent Wealth Tax on the super-rich’; ‘Reverse the recent cuts in corporation tax for the biggest companies’; ‘Impose a financial transaction tax on the City bankers and speculators.’ So, the super-rich, profit-seeking big companies and City financiers are to continue to exist but be taxed more.

This is pie-in-the-sky reformism. It’s not going to happen and wouldn’t work anyway. Any government which tried it would, by putting profits and profit-making under pressure, provoke an even bigger economic crisis. If you accept to work within capitalism (as does the ‘People’s Budget’ and similar proposals to ‘Tax the Rich’ and ‘Make the Bosses Pay’) then you have to accept that profits have to be made and capital accumulated (with its by-product, the rich getting richer). You can’t make the capitalist leopard change its spots and it is futile – in fact counter-productive – to try.

The main problem with such proposals is not that they are not going to work, but that they spread the view that they could work and so reinforce reformist illusions about capitalism being able to be reformed to function other than as a profit-driven system where profits have to be put before people. What this does is delay people coming to understand that capitalism can’t be reformed in these sorts of ways and that the only way forward is socialism. It helps prolong capitalism.

As socialism will be based on the common ownership and democratic control of productive resources there will be no obstacles, as there are under capitalism, preventing production being oriented towards satisfying people’s needs, as for housing, healthcare, education , transport and other services.

It is all very well being ‘against austerity’ but the cruel fact is that, when capitalism is going through one of its recurring crises, there is no alternative within the system to austerity. It is not the government that is to blame but the capitalist system. In imposing austerity all that governments are doing is what is required by the way capitalism works.

Of course austerity should be resisted to the extent that it can be – that’s what trade unions and such organisations are for – but without illusions. The most that can be achieved is a few mitigations here and there or a different distribution of the cuts, but they cannot be avoided.

This is not defeatism. It is realism. The only alternative to the present austerity is neither a change of economic policy nor a change of government. It is a change of system, from minority ownership and production for profit to common ownership and production directly to meet people’s needs, in a word, to socialism.

Socialism is, quite literally, the only realistic alternative to the present austerity. That’s what those who call themselves socialists should be advocating. Enough of ‘People’s Budgets,’ ‘Tax the Rich,’ ‘Make the Bosses Pay’ and other such reformist nostrums. Let’s campaign for socialism.

Adam Buick