What Next for South Africa? (1990)

From the April 1990 issue of the Socialist Standard

We may never know what discussions took place between President de Klerk and Nelson Mandela before the famous prisoner’s release, but it is evident they did a deal. It is possible they agreed on a detailed programme of reform. Economic forces have been pressing in on the deadlocked conflict for decades but movement has been slow. It has been thirty years since Harold Macmillan spoke of “a wind of change blowing through Africa”, but in South Africa this has been a gentle breeze which disturbed little, leaving the white monopoly of power intact. Delayed change results in greater pressure and now it seems the deadlock is about to be broken. What will this mean for our fellow workers in South Africa, both black and white?

An ideal model of capitalism would rest on a simple division between capitalists and workers with the latter voting in governments to administer their own exploitation in a “liberal democracy”. Capital would be free to invest most profitably and train workers to achieve maximum output without skin colour or ethnic background being an issue. This would tend to secure the most efficient use of labour resources, with political stability and without excessive expenditure on forces of repression.

Tortured history
In practice capitalism rarely confirms to this model. In South Africa the legal classifications of “European”, “Bantu”, “Coloureds” and “Asians” complicate the economic and political structure in ways which inhibit efficiency. They result from the tortured history through which these groups took root in the country.

Even within these groups there was never a common identity. For over two centuries the Europeans were bitterly divided between British and Dutch. Cape Town was established as a supply station by the Dutch East India Company. During the Napoleonic Wars the British pre-empted a French take-over by seizing it themselves after which it was kept as a British colony. In the 1830s a large number of the Dutch trekked north to found the Transvaal and Orange Free State but again they came into conflict with the British when gold, diamonds, coal and other materials were discovered in the Boer republics. To gain control of these materials colonial adventurers like Cecil Rhodes conspired with the British government to instigate the Boer War. Following the defeat of the Boers, and the sufferings of their families in concentration camps in which thousands died from disease and starvation, British imperialism gained control over the entire land area of what is now South Africa.

But it was not only the people of European origin who were in conflict. Tribal differences also divided the African peoples who in the seventeenth century had migrated south from East Africa. These divisions are still a potent force, further complicating the politics of South Africa. The Zulus are mainly concentrated in Natal under Chief Buthelezi and it is interesting that he controls his power base, Inkatha, as its unelected leader. Despite their demand for it, there is no “one person, one vote” amongst the Zulus. Nelson Mandela is a Chieftain of the Xhosa people and is acclaimed as being more representative of black South Africans through the African National Congress.

During the past seven years more than 2,500 people have died in violence between different black groups and Mandela has appealed passionately for an end to the fratricidal strife. “Throw your arms into the sea”, he recently implored a vast crowd of Zulus. The response of Inkatha was positive but also tempered with a warning:

  Only the enemies of peace and black unity would wish otherwise. However, we shall not succeed to achieve this by protracted attempts to demonise, vilify and marginalise Dr. Buthelezi. To do this is tantamount to planting the seeds of future civil war in our country.

This threat of possible civil war, presumably in circumstances in which the Afrikaner Nationalist government may have collapsed, is indeed ominous.

Those called the “Cape Coloureds” were originally descended from the offspring of early Dutch male settlers and their female servants brought to the Cape Province from the Dutch East Indies. The temptations of sexual relations between the “races” were more than the Calvinist citizens could resist and, in any case, pre-dated the ideology of “apartness”.

The indigenous inhabitants of South Africa were the defenceless Hottentots who suffered genocide at the hands of every invader, Dutch, British and Bantu. These three groups, very different in their origins and outlook, were pitched into the same land area and now form the main elements in today’s political strife.

Capitalists’ political frustration
One of the ironies of this history is that Rhodes instigated war with the Boer Republics under the slogan of “democratic rights for all white citizens” with the object of gaining control of diamonds, precious metals and vital raw materials. In this he succeeded but as the mining industry developed under mainly British investment together with manufacturing, the white working class of the urban areas eventually formed a political alliance with the rural Afrikaners to elect an Afrikaner Nationalist government in 1948 which has held power ever since. The various National Party governments under Malan, Strijdom, Verwoerd, Vorster and Botha (the names alone speak of the return of the Afrikaners to power) have never been the “natural” or direct representatives of capitalist class interests. The more liberal-minded United Party disappeared and its current replacement, the Democratic Party, has little chance of gaining majority white support.

Capitalist interests would have best been served by a reform programme aimed at integrating the black population within a non-racial system of exploitation. This could have been introduced through a gradually-widening franchise based, for example, on property or education qualifications, arriving eventually at “one person, one vote”. This was not to be. It is to the eternal discredit of white workers in South Africa that in the majority they have pursued what they saw as their interests through racist trade unions and by voting for the National Party.

But if all this has been frustrating for capitalist class interests neither has it advanced the hopes of the Afrikaner nationalists. Their ideal of apartheid, or separate development, was always an illusion. Whether we see it as, at best, a nostalgic yearning for an independent “volk” or, at worst, a cynical euphemism for racial oppression does not matter. Either way, apartheid was against the tide of history.

When the more fanatical Conservative Party accuses de Klerk of “betrayal” and “sell-out” the greater truth is that the National Party has been overwhelmed by the economic forces of capitalism. The seeds of this were planted when the Afrikaners won political control. As a government they had no choice but to depend on taxes from mining, industry and manufacture to run their state machine. From this moment on, they were tied to capitalism. It costs a lot of money to pay for the repression of 20 million black people and, inevitably, the bills increase. Where once the Afrikaners eschewed the idolatry of gold, diamonds and profit, their heirs speak the universal language of trade and commerce. De Klerk is a capitalist politician.

In his recent important speech to the South African Parliament on 2 February he said:

  A new South Africa is possible only if it is bolstered by a sound and growing economy, with particular emphasis on the creation of employment.

At times he sounded like a Thatcherite:

  By means of restricting capital expenditure in state institutions, privatisation, deregulation and curtailing government expenditure, substantial progress has been made already towards reducing the role of the authorities in the economy.

At other times he also sounds like Gorbachev:

  The government’s policy is to reduce the role of the public sector in the economy and to give the private sector maximum opportunity for optimal performance. In this process, preference has to be given to allowing the market forces and a sound competitive structure to bring about the necessary adjustments.

We might ask how it comes about that politicians as different in their backgrounds as de Klerk, Thatcher and Gorbachev are committed to the same policies. They each share a common role as functionaries of capital; the economies of South Africa, Britain and Russia are locked into the same system – world capitalism. As a result their respective governments are compelled to react to the same economic pressures to achieve efficiency and profitability and to pursue strategies which best protect their long-term interests. These are the same forces which are driving politicians in South Africa, despite their own very different origins into a common outlook.

An added reason why de Klerk can sometimes sound like Gorbachev is that both face problems of restructuring, or perestroika. According to the Independent (27 February):

 British businessmen and bankers are unlikely to return to South Africa in droves as a result of the lifting of the ban on new business investment . . . They left because of rising commercial and political risks, poor investment returns, difficulties in repatriating profits and higher returns available in other countries.

In his speech to the South African Parliament de Klerk complained of “a serious weakening in the productivity of capital and stagnation in the economy’s ability to generate income and employment opportunities”.

It is evident that de Klerk, through his negotiations with Mandela and the ANC, hopes that he will be the man to restructure the South African economy on the basis of political stability achieved through extended democratic rights, but it is likely that the National Party has left it too late. Surely the party and the man for the task is the ANC under Nelson Mandela? Is it not more likely that it will be they who emerge as the new functionaries of capital best suited to achieving a more efficient exploitation of workers in South Africa without distinction of “race”, as capital demands?

Not afraid of black government
Certainly a number of leading capitalists assume that the future lies with a black government. For some years, Gavin Relly, the chairman of Anglo-American, South Africa’s largest business corporation which controls gold, platinum and coal production, has been in close contact with the ANC. In 1985, together with the chairman of the South African Foundation, which represents general business interests, he met with Oliver Tambo and a negotiating team from the ANC. He said then:

  What we are concerned with is not so much whether the following generation will be governed by black or white people, but that it will be a viable country and that it will not be destroyed by violence and strife.

He added that he and the ANC “shared a common interest in maintaining the profitability of the South African State”.

Since Mandela’s release there has been some concern in capitalist circles over the ANC’s apparent commitment to nationalisation, including the mines. However, on 26 February Gavin Relly, continuing his personal contacts with the ANC, met Mandela and afterwards urged investors to calm their fears. He said it was premature now to get agitated about the ANC’s economic programmes:

  The community and international community should not get into a flurry over nationalisation. These are issues for sensible men to discuss. Issues of nationalisation will have to be subjected to the tests of debate and the tests of what is practical to make the modern economy work.

In his own comments on the meeting, Mandela said nationalisation remained, in certain areas, a basic policy of the ANC, but the economy at large would still be based on private enterprise. “The entire economy will remain intact” (Independent, 27 February). Again, we shall never know the details of their discussions but it is clear that Gavin Relly, a leading representative of capitalist interests, emerged a happy man from his meeting with Mandela.

Where does all this leave our fellow workers in South Africa? Our interests are directly linked with theirs and if democratic freedoms are now to be extended to that country it is in all our interests. Perhaps now the Directorate of Publications in Cape Town will release our pamphlets and the copies of the Socialist Standard which have been kept under lock and key in the cell where banned literature is stored.

In the short-term it appears that workers in South Africa may well continue to support those reformist organisations which they see as representing their interests in a “racially” divided society. However, it is also likely that the increasing pressure of the economic forces of capitalism and the reforms which are in prospect will simplify the issue into a straightforward confrontation between capitalist and working class interests. This will leave the fundamental problems of the workers still to be solved. Even now the vital work must be to ensure that a growing world socialist movement is extended to South Africa.

Pieter Lawrence

Russia and Private Property (1990)

From the April 1990 issue of the Socialist Standard

The decision by the Central Committee of the CPSU at its February meeting to abandon its guaranteed, constitutional monopoly on power really could prove to be as momentous as the media claimed at the time. However this will not be for the reasons they gave – that it will open up a new era of freedom, prosperity and progress for Russia – but because it could lead to a change in the way that the means of production are monopolised by the minority owning class there.

Except for some of those that can be operated by individuals or by a family unit, all means of production in Russia are vested in the state which also has a monopoly in the hiring of wage-labour. This has meant that the group that has controlled the state has also controlled the means of production, has in effect owned them. However, the members of this group have not done so as individuals possessing legal property deeds in their own names, but collectively as a group. It is this group – as a group – that has been the collective owner of the means of production and the collective employer of the working class in Russia, in short the collective capitalist there.

So who are they? Who are those who make up this group that monopolises the means of production in Russia in this way? As Russia has been a one-party dictatorship since Lenin introduced this in 1921, they have been the leading members of the ruling party plus those appointed by them to key posts carrying with them a life-style based on privileged access to the best consumer goods, housing, health care, education for their children, holidays and officially known as the nomenklatura. Not possessing legal property titles in their own names, they have not been able to bequeath their privileged position to their children. So the group that has constituted the collective capitalist class in Russia has been recruited by other means than inheritance, in fact by rising up the bureaucratic hierarchy of the single party.

It is this party that has been the mechanism by which the collective capitalist class in Russia has monopolised the state and so the means of production and by which they have renewed themselves and recruited new members. This is why the political and ideological representatives of this class have proclaimed the “leading role of the party” to be a pillar of the Russian system. It is also why the decision by the Party’s Central Committee at its February meeting to abandon it could prove to be of immense importance.

Gorbachev wants a mandate
Of course abandoning a constitutional right to be the only governing party, indeed the only party allowed to exist – the notorious Article Six of the 1977 Russian constitution – is not the same thing as actually abandoning power. The leaders of the “Communist” Party still want, like Mrs Thatcher, to go on ruling for ever but from now on they hope to do so with a democratic mandate from the electorate.

There is a short-term reason for this: they feel they need popular endorsement to be able to push through the tough anti-working class measures perestroika involves. For although glasnost (openness) has progressed quite far, perestroika has not. Enterprises have been given legal independence from the government ministries that used to control them, but price reform – the key measure of perestroika and what it is all about, designed to bring prices into line with what the law of value demands – has not yet been implemented.

Price reform will involve ending government subsidies on basic consumer goods such as food, housing and transport and allowing their prices, along with those of industrial goods, to be fixed by the free play of market forces. Although the object is to get the stagnant Russian economy moving again, it is bound to mean for at least the short-term falling living standards and rising unemployment. Learning the lesson of the events in Poland, Gorbachev is clearly not prepared to launch into this attack on the working class without a mandate to do so. His conservative opponents in the Party hierarchy might not like his political reforms, but they don’t want him to go since they know that they would have even less chance of controlling the potentially explosive situation in Russia.

It is the longer-term implications of the decision to abandon the Leninist principle of one-party dictatorship that could prove to be the most significant though, as this could herald a change in the way the means of production are monopolised in Russia with the ruling class there changing itself from a class of collective owners into a class of individual owners as in the West.

Such a change has always been a possibility but until now only a rather remote one. It is a measure of the historic importance of events in Eastern Europe – which will surely have led to the liquidation of the nomenklatura system there by the end of the year – that they have forced what once seemed to be the immovable Russian Party-elite to reconsider its position.

The transformation of the Russian ruling class from a collectively-owning state bureaucracy into a class of private capitalists with private property rights vested in them as individuals certainly won’t take the form of the present members of the nomenklatura abdicating and handing over their power and privileges to the small group of privately-owning capitalists who have always led a precarious existence on the margins of the Russian state-capitalist economy. Nor would it need to take the crude form of them simply dividing up the presently state-owned industries amongst themselves. It would be more likely to take the form of the Russian government gradually introducing more and more opportunities for private capitalist investment – which only those who have already accumulated wealth would be able to take advantage of. Most of these will inevitably be individual members of the nomenklatura as the group which for years has enjoyed bloated salaries, cash prizes and opportunities to speculate on the black market.

Although there have been periodic drives against corruption, the wealth accumulated by the members of the nomenklatura has largely survived intact. Up to now, however, they have not been allowed to use their accumulated wealth as capital – as wealth invested in production with a view to profit – but have been obliged to hold it as non-productive assets such as works of art, vintage cars and cash held in low-interest bank accounts. That Gorbachev wants to remove this restriction and channel such funds towards investment in production can be seen from the reference in the new Party Platform to “the distribution of state loan bonds on advantageous terms” and to “the selling of stocks and other securities”.

Ligachev’s Fears
High-denomination state bonds were issued for the individually wealthy to purchase right up until the 1940s (when their holders were virtually expropriated when Stalin reformed the currency in 1947), but this time rich Russians are to be allowed to purchase not just government bonds but also to invest directly in particular enterprises by purchasing bonds issued by them too. It is not difficult to see how this could evolve into a system of shareholding. In addition, private enterprise in the form of “co-operatives” is to be encouraged. Such co-operatives are supposed to be collectives of self-employed workers but once again, over time, pressure to allow them to employ wage-labour and for some of their members to become sleeping partners, or non-working investors, can be expected to grow.

This whole issue of “private property” is still a subject of controversy within the Russian Party. It ought to be understood, however, that the issue at stake is not whether individuals should be allowed to own non-productive assets, sometimes considerable amounts, as private property which they can bequeath and inherit. This has long existed and all sides agree it should continue. Nor – yet – is the issue about whether individuals should be allowed to employ other individuals. It is about whether “co-operatives” of the self-employed should be allowed to own means of production and compete with state enterprises for sales and profits.

On the one side, there are the supporters of Igor Ligachev who was reported as saying at the February Central Committee meeting that “he opposed the introduction of private property with his whole soul”, adding: “I am also against turning our party into an amorphous organisation, a political club” (Independent 7 February 1990). On the other side, are those who agree with Boris Yeltsin when he says: “I am for private property, including the means of production. The limits are that it should not be sold, and not inherited” (Vancouver Sun, 21 December 1989).

The new Party Platform shows that it is the partisans of “private property” who are winning. Ligachev is nevertheless probably right when he sees “co-operative private property” as the thin end of a wedge that will open the way, despite what Yeltsin says, both to private property rights in means of production being sold and inherited and to the private employment of wage-labour. This latter is still regarded in Russia as a case of “the exploitation of man by man” – as indeed it is, though Ligachev is being inconsistent when he denounces the employment of hired labour by private individuals while accepting it by the state. Clearly, what he favours is the nomenklatura continuing to monopolise the means of production collectively as a group dictatorially controlling the state where the means of production are state-owned.

Gorbachev, on the other hand, realises that it is now no longer possible for the nomenklatura to role in the old way and that some sort of flexibility is called for, if only to be able to push through perestroika without provoking a workers’ revolt. He probably isn’t consciously working towards ushering in a Russia where the nomenklatura has disappeared as such and has succeeding in converting itself into a class of Western-type privately-owning capitalists, but it is in this direction that his reforms can now be seen to be leading.

Adam Buick

Socialism on Tape (1990)

From the April 1990 issue of the Socialist Standard

The Socialist Party Tapes Library has again been fully updated. and the list below replaces all previous lists Each cassette can be purchased for £3. including postage and packing. There is a discount on larger purchases: any six tapes can be bought for the price of five. Allow up to four weeks for delivery. Socialist Party branches and groups may wish to purchase a range of tapes for re-sale at meetings. Further tapes will be added to this list in due course.

1. Is Britain Worth Dying for? DEBATE between the Socialist Party and Lady Olga Maitland (Women and Families for Defence) (1984).

2. After the Miners' Strike—Which Way Forward for Socialists? DEBATE between the Socialist Party and Socialist Workers Party (Colin Tipton) (1985).

4. Did Lenin Distort Marx? DEBATE between the Socialist Party and Monty Johnstone (Communist Party. Marxism Today) (1982).

5. Terrorism versus Socialist Action. Richard Montague. World Socialist Party (Ireland) (1985).

6. What is the Next Step for Socialists? DEBATE between the Socialist Party and Revolutionary Communist Party (Sean Mullen) (1987).

7. Why You Should Be A Socialist. E. Hardy. Dick Donnelly (1988). 

8. Fear of Freedom: The Development of the Personality in Capitalist Society. Steve Coleman (1983).

10. DEBATE between the Socialist Party and Militant Tendency (Bill Sheppard ) (1982).

13. Should You Join The Socialist Party? DEBATE between the Socialist Party and Andrew Broadhurst (Greater London Conservative Association) (1988).

14. The Crisis in Capitalism—What is the Next Step? DEBATE between the Socialist Party (Clifford Slapper) and Bill Etherington (General Secretary, NUM Durham Mechanics) (1987).

15. Is there a Free Press in Britain? DEBATE between the Socialist Party and Lady Olga Maitland (Daily Express) (1987).

17. Is Equality Just A Socialist Myth? DEBATE between the Socialist Party and Professor Antony Flew (1981).

18. Conservation versus Democratic Revolution. DEBATE between the Socialist Party (Pieter Lawrence) and the Ecology Party (Tony Jones) (1983).

19. Can We Change the World Through Music? Forum with Clifford Slapper (Socialist Party) and Annajoy David (Political Co-ordinator. Red Wedge) (1988).

21. Conservatism versus Socialism. DEBATE between the Socialist Party (Dick Donnelly. Clifford Slapper) and Monday Club (Harry Phibbs. A. V. R. Smith) (1984).

22. Should We Return To Victorian Values? DEBATE between the Socialist Party and G. Webster Gardiner (Conservative Families Campaign) (1986).

23. Two LBC Radio Debates on one tape: Can The Profit System Benefit Most People? between Pieter Lawrence (Socialist Party) and Ian Picton (Conservative councillor) (1982) and Is Britain Worth Defending? between Dick Donnelly (Socialist Party) and Paul Backhouse (Peace Through NATO) (1985).

24. LBC Radio Debate: The Royal Wedding was a Complete Waste of Time and Money, between Clifford Slapper (Socialist Party) and Simon Kinnersley (Woman's Own) (1986) and LBC Radio "Futures" phone-in on What Would A Socialist Society Be Like? Speaker Steve Coleman (1986).

27. Religion and Historical Materialism. Forum with Dick Donnelly (Socialist Party) and David McLellan (1984).

30. The Social Origins of Music. Kerima Mohideen (1987).

Education Series: The Thatcher Government, 1979-85 (1985):

32. From Churchill To Thatcher: Your Elders and Betters? Ralph Critchfield.

33. The Economics of the Thatcher Government. Clifford Slapper.

34. A Guided Tour of the Conservative Mind. Steve Coleman.

Education Series: Socialist Thinkers — People Who History Made.

Speaker Steve Coleman (1982).

39 Plekhanov And Historical Materialism. (Part 1) (Part 2)

40. Dietzgen And Dialectical Thought. (Part 1) (Part 2)

41. Kautsky's Critique Of Religion. (Part 1) (Part 2)

42. Bronterre O’Brien And Working Class Radicalism. (Part 1) 

43. Belfort Bax And The "Ethics" Of Socialism.

44. William Morris' Vision Of Socialism.

45. Martov And The Anti-Bolshevik Approach To Revolution. 

Why hasn't a Socialist Revolution happened yet?

46. Reformism: What it has achieved and where it has failed. Howard Moss (1986).

47 Are Workers Capable of Co-operating. Pieter Lawrence (1986).

48. What is Capitalist Ideology? Steve Coleman and Brian Montague (1986).

Socialist Women (1988)

49. Women Under Capitalism. Kerima Mohideen.

50. Men in a Sexist Society. Steve Coleman.

51. What Socialists Can Learn from Feminist Ideas. Janie Percy- Smith.

52. Women For Change: Why You Should Join the Socialist Party.

Left-Wing Capitalism versus Revolutionary Socialism (1984)

53. Trotskyism. Wally Preston.

54. Anarchism. Brian Rubin.

55. Labourism versus Socialism. Howard Moss.

56. The Politics of Rosa Luxemburg. Victor Vanni (1983).

57. Useful Work Versus Useless Toil. Victor Vanni (1983).

58. Schools—Who Needs Them? Clifford Slapper (1987).

59. The Myths of Racism Exposed. Gary Jay (1989).

61. Ten Years of Thatcher—Should the Workers be Grateful? DEBATE between Conservative Party (Leslie Winter) and Socialist Party (Steve Coleman) (1988).

62. Controlled Market Economy versus the Abolition of the Wages System. DEBATE between Paul Hirst (Sociology Lecturer) and Socialist Party (E. Hardy) (1983).

63. Should Workers Vote Labour? DEBATE between Labour Party (Kelvin Hopkins) and Socialist Party (E. Hardy) (1988).
64. Marx's Conception of Socialism. E. Hardy (1983)

Party News (1990)

Party News from the April 1990 issue of the Socialist Standard

Eccles branch are putting up a candidate in the Winton ward, Eccles, for the elections to Salford Borough Council on 3 May.

Those in the ward who want to indicate a preference for socialism can do so by voting for the socialist candidate Jimmy Rushton.

Further details, offers of help, donations to: Andy Pitts, Election Agent, Erne Court, 146, Slade Lane, Levenshulme, Manchester M19 2AQ. (Tel: (061) 225 ****).

#    #    #    #

West London branch are putting up three candidates in the Southfield ward for the elections to Ealing Borough Council on 3 May.

The socialist candidates will be Adam Buick, Ralph Critchfield and Kevin Cronin.

Further details, offers of help, donations to: Adam Buick, Election Agent, 40 Granville Gardens, London W5 3PA. (Tel: (01) 992 ****).

#    #    #    #

Socialist Teachers Group

A meeting will be held at the Socialist Party Head Office, 52 Clapham High St, London SW4 7UN (nearest tube: Clapham North) at 2pm on Sunday 20 May to discuss setting up such a group. Further information: Kerima Mohideen, c/o Head Office.

Inflation: the Endless Farce (1990)

From the April 1990 issue of the Socialist Standard

Every Prime Minister since the War has pledged himself or herself to tackle inflation as a top priority but rising prices have been with us continuously for half a century. Every year since 1938 prices have gone up and are still going up. The price level on average is about 24 times what it was before the war.

It was not always so. From 1850 to 1914 prices were stable; there were moderate fluctuations but the price level in 1914 was almost exactly the same as it had been 64 years earlier. And in 1919 the government decided to bring prices down and there was a fall of over 30 per cent between 1920 and 1925.

One of the rules of the game is that the party in opposition blames the government; that is, until it becomes the government itself, when it blames someone else, the greedy workers or the greedy shopkeepers and manufacturers; or the lenders of money not being greedy enough (according to the Chancellor of the Exchequer it is low interest rates that cause inflation).

There is a short answer to these glib excuses. Between 1850 and 1914 average wage rates went up by nearly 90 per cent, more than keeping up with the steadily rising productivity in industry – but no inflation.

If shop-keepers and manufacturers have the power, as well as the will to push up prices, why no inflation before 1914? And how come they allowed prices to fall heavily between 1920 and 1925?

As for interest rates, compared with the present 15 per cent bank minimum lending rate, the rates before 1914 were mostly between 3 per cent and 5 per cent – but no inflation.

Control of currency issue the key

It was not an accident that governments before 1914 and in the year 1919 knew how to stabilise prices, how to raise them and how to lower them. They, or their advisers, knew that the key to the situation is the amount of currency (notes and coins) in circulation. If this is kept in line with the needs of the growth of production, population, etc. prices will be stabilised. If currency is arbitrarily increased prices will go up. If arbitrarily reduced, prices will go down.

Before 1914 stability was maintained through the gold standard which closely controlled the issue of currency by the Bank of England. In 1920-25, on government instructions, the currency in circulation was cut. (The Bank burned £66 millions worth of notes).

Since 1938 there has been no control. Additional notes and coin have been issued in a continuous stream. The amount of currency in circulation with the public in 1938 was £442 million. It is now more than thirty times as much, at £14,388 million, and is still steadily increasing. The bath has been slopping over for fifty years and one dotty thing the Labour and Tory plumbers have been agreed about is that they need not turn off the tap. So why couldn’t they ask their professional advisers what to do? They did, but those advisers had all picked up the same dotty notion from the same original source. As early as 1923, in his Monetary Reform, the economist J. M. Keynes had argued that it is not necessary to have direct control of the amount of notes and coin.

Degeneration of Monetary theory

How monetary theory degenerated was told by Edwin Cannan, at that time Emeritus Professor of Political Economy at the University of London, in his Modern Currency and the Regulation of its Value [1931). Referring to what he called “the bank-deposit theory of prices”, he wrote (p.88):

  Within, I think, the last forty years a practice has grown up among the people who talk and write on such subjects, of regarding the amount which bankers are bound to pay to their customers on demand or at short notice as a mass of ‘bank-money’ or of ‘credit’ which must be added to the total of the currency (of notes and coin ) whenever variations in the quantity of money are being thought of as influencing prices. This is one of the most obstructive of all modern monetary delusions.

Cannan went on to show that this alleged mass of “bank-money” does not exist:

  with the exception of a small amount of currency which they keep ready to meet any likely demands on the part of their customers, the banks have . . . paid away money as they receive it, buying land and buildings for the conduct of their business with some of it, and investing or lending all the rest.

Cannan’s warning was not listened to. In the same year, 1931, the bank-deposit theory of prices received official endorsement from the MacMillan Committee (Report of the Committee of Finance and Industry, p.34). In its report the Committee rejected the idea that deposits in banks are cash deposited by customers, and argued that:

  the bulk of the deposits arise out of the action of the banks themselves, for by granting loans, allowing money to be drawn on overdraft … a bank creates a credit in its books which is the equivalent of a deposit.

Keynes was a member of the Committee and was credited with having drafted that section of the Report.

The Committee “proved” that, on a deposit of only £1,000 cash, a bank could lend £9,000. Their method of proof was a masterpiece of rigged argument. They assumed that only one bank existed. This, they argued, really made no material difference. But also, and without saying that they were doing so, they assumed a prolonged series of lending operations which would take several months and in all that time no-one ever withdrew cash from the bank. Cash was assumed to go into the bank but no depositor or borrower took any cash out. It was a kind of bank that never existed in the real world.

If the doctrine had been based on reality its significance in relation to prices would be obvious. If an individual with £1,000 spent it or lent it the measure of its influence on prices would be just £1,000. If lent to a bank which re-lent it, its influence on prices would be multiplied by nine. What is more the MacMillan Committee’s arithmetic was related to the 10 per cent cash reserve banks ordinarily maintained at that time. As the bank cash reserve is now only about 1 per cent of total deposits the multiplier now would be not nine, but ninety-nine.

In recent years there has been a seeming conflict of views on inflation between the followers of Keynes and their rivals, the so-called monetarists. It is a phoney war. The high-priest of Monetarism, Professor Milton Friedman, suffers from the same delusion about the mystical powers of the banks as did Keynes, as will be seen in Free to Choose (by Milton and Rose Friedman, p.298).

Unlike the politicians and many economists, the professional bankers ridiculed the Keynes-MacMillan Committee monetary doctrine. They knew that banks do not have this fanciful power to “create deposits”. One banker, Walter Leaf, Chairman of the Westminster Bank, had this to say:

 The banks can lend no more than they can borrow – in fact not nearly so much. If anyone in the deposit banking system can be called a ‘creator of credit’ it is the depositor; for the banks are strictly limited in their operations by the amount which the depositor thinks fit to leave with them. (Banking, Home University Library, p.102).

Walter Leaf’s Westminster Bank is now the National Westminster. In the Financial Times (9 April 1984) it published as an advertisement a survey of its operations during 1983. Under the heading “Financial Highlights 1983” the following item appeared:

Money Lodged £55,200 Million
Money Lent £45,200 Million

No nonsense about receiving £55,000 million from depositors and lending 9 or 99 times as much.

Confusion about money supply

Government monetary policies have gone through several phases. From 1945 to the 1970s the Labour and Tory Parties both believed, with Keynes, that the cure for unemployment is for the government to run a budget surplus. (The present Tory government policy of using a big budget surplus to pay off the national debt is what the former Labour Prime Minister Lord Wilson specified in 1957 as the cure for inflation).

In 1977 the Callaghan Labour government, faced with prices and unemployment both rising fast, and the obvious impossibility of running a budget deficit and a budget surplus at the same time, threw overboard the Keynesian doctrine and adopted as their price policy studying the movements of what they call “money supply”.

The favourite for several years was the index called M3 which is made up predominantly of bank deposits though it also included the relatively minor element of the currency. The latest M3 figures are:

Bank Deposits £225,260 millions
Currency              14,384 millions
Total                 £239,644 millions

Eventually the Thatcher government lost confidence in the usefulness of M3 and the Treasury has just decided to stop publication. The Thatcher government’s interest was then transferred to M0, which, unlike M3, is predominantly made up of the currency. But the government and its advisers have quite failed to see the point of the achievement of stable prices by the gold standard, and the reduction of prices in 1920-1925. It is not a question of just “watching” M0 but of actually restricting the issue of notes and coin, something the government is not doing and has not indicated the intention of doing. The amount of currency in circulation is still going up.

The politician who has for years taken an active interest in inflation is Enoch Powell. His line has been to criticise governments for their refusal to recognise that they and they alone are responsible for inflation. He argues that the prime cause of inflation is that government expenditure is too high:

  Nobody knows so well as the Bank of England … that the expenditure of Government itself is the prime factor in causing mounting inflation” (from a speech on 11 November 1966).

He resigned from the Tory government in 1958 over that issue, though he served as a Minister again from 1960 to 1963. And during all the period 1955-1963 the government was pumping out more and more currency, pushing up prices. So Powell was just as much responsible for inflation as any other Minister. He has never understood the real cause of inflation. He shares the same delusion about banks’ supposed power to create deposits as Keynes and Professor Milton Friedman. He claims to see a difference between the government borrowing from “the public” and borrowing from the banks. In an article in Intercity (July/August 1989) he wrote:

  Only the banking system can provide purchasing power to one section of the public without the equivalent purchasing power having been transferred to it by another section.

This is nonsense. The banks can’t create purchasing power. As Walter Leaf rightly pointed out, the only way the banks can be enabled to lend is to persuade “the public” to lend to the banks, in the form of deposits.

Why inflation started

The question arises why do governments go in for inflation. In this country the three big inflations have started in wars, the Napoleonic wars and the two world wars.

It is a mistake to think that the British government’s interest in inflation is to provide revenue by printing notes, though this could happen as it has in some other countries. What happened in the three wars was that the government had to call in all the gold in circulation and in bank vaults to pay for desperately needed imports of food and war materials, which made continuation of a gold-backed currency impossible. The amounts of revenue the government actually gets from increasing the note issue is too trivial to count in relation to government expenditure. In the current year the £800 million from additional notes in circulation is less than one half of one per cent of Government expenditure of £181,000 millions.

Another issue of interest is who gains by inflation and who loses. Long experience supports the view that borrowers, including the industrial capitalists, gain under inflation by repaying loans in depreciating currency, and lenders do well from deflation. Bankers being both borrowers and lenders, generally prefer stable prices. Some property-owners to whom inflation has been disastrous are those who bought and held certain government and local government stocks the market price for which is now only £30 for each £100 nominal.

It is an error to suppose that inflation is bad for the workers. It is no harder (and no easier) for organised workers to raise their standard of living when prices are rising than when they are falling or stable: it all depends on the varying conditions in the labour market. In the great majority of years in the half-century of inflation wage rates have risen more than prices. And it happened when prices were falling sharply between 1920 and 1925 that wages fell more than prices. The workers were worse off.

One last word about the supposed evils or benefits that will flow from ending inflation. It will not have the effect either of causing unemployment and trade depression or of preventing them. Capitalism goes its own way irrespective of governments’ monetary policies.

Edgar Hardcastle

These Foolish Things: Who will be next? (1996)

The Scavenger column from the March 1996 issue of the Socialist Standard

Who will be next?

The government’s controversial decision to deport Saudi Arabian dissident Dr Mohammed al-Masari has paid its first dividend. As a direct consequence of the deportation, British Aerospace has won a £160 million aviation contract. 

Financial Mail on Sunday, January 14.

Brain power

Several recent studies have found a link between education and dementia. One published in the British Medical Journal last April reported a fourfold risk of Alzheimer’s disease amongst people with the lowest education status. Another study by Bonaiutu and colleagues found that Alzheimer's disease occurred in 7.2 percent of illiterate people, in 2.8 percent of those whose education had ceased at fifth grade and in 0.5 percent of those whose education had studied in the fifth grade or over.

Not every study has found a link between education and dementia however, and the link between low social status and dementia may arise from poorer physical health and a higher rate of vascular dementia (failing mental powers due to hardening of the arteries, including those which supply the brain with oxygen). 

Alzheimer’s Disease Society Newsletter, December 1995/January 1996.

The Land of Rising Debt

Japan’s budget deficit is now worse than that of the USA. Masayoshi Takemura, the Minister for Finance, proposes to increase government borrowings to Y21,000 billion (nearly £135 billion) in his April budget.

This will raise Japan’s total debt to 96 percent of its gross domestic product.

The old, old story

Exhausted pilots who made basic errors caused the air crash near Coventry just over a year ago, which killed five people including two Britons, a report disclosed yesterday.

The 21-year-old Air Algerie Boeing 737, which had carried veal calves to Holland and France, crashed in fog as it approached the city’s airport—its fifth flight during a 10-hour shift. 

Guardian, 11 January.

That’s the point of it

MONEY—you can’t have enough of it. Do you agree or disagree? I agree. If you’ve known the taste of hard-up days, you'll never forget it was money that gave you the mouthwash. The more I work, the more money I can earn, the more secure I feel. 

Jim Dale, Financial Mail on Sunday, 14 January.

Failing health

A recent survey produced by the Labour Party has analysed the changes in the structure of the National Health Service in the five years between 1989 and 1994. It says there has been a loss of 50,000 nurses and midwives (a cut of 13 percent) but an increase of 18,340 managers (400 percent). In addition, there has been a cut of 31 percent (19,020) in the number of nurses going through training.

Each of the five years saw a reduction of 10,000 nurses and an increase of 3,670 senior managers. The pattern differed strongly across the country: in North West Thames management numbers increased by 1,100 percent; in South Western by 180 percent. Nurses and midwives were reduced by 22 percent in Mersey and North West Thames; in South Western by 5 percent.

The Scavenger

Mustn't Grumble (1996)

The A Word in Your Ear column from the March 1996 issue of the Socialist Standard

“Watcha Ted. Howya doin’?" 

“Not so bad. Can’t complain.”

To which the present writer’s response is “Why not?” if you can’t complain, what the hell are you supposed to do in the face of the insecurities, indignities and discomforts of life as a wage slave? We are taught to applaud the stoical resilience of retired workers who are old, sick, impoverished and treated like dirt, but refuse to mope around feeling sorry for themselves. “Old Charlie had a lousy life, but one thing you can say about him, he always had a smile on his face.” What was Charlie, some kind of a desensitised imbecile who was scared of expressing the misery of the social reality which was crushing him? Why put up in silence with a bad lot? “How’s life with you?”, they ask, waiting for an inaudible half-grin, half-sigh—the greeting of the complacently hopeless slave. “How am I? I’ll tell you how I am . . .  and I’ll tell you how you are while I’m at it.”

Such thinking was prompted by a recent viewing of one of those old black-and-white films about British POWs in the Second World War who, stuck for years in camps and bullied by Nazi thugs, always kept their peckers up and whistled “There’ll Always Be An England” every time their rations were cut. This drab display of abject tolerance for oppression, combined with deference for the officers (whose main role was to send the men to dig holes which invariably led nowhere) and endless tommy grit, sums up a particular strain of working-class acquiescence which is nauseating to view and worse still to live amongst.

In The Captive Heart Gordon Jackson is blinded in the course of doing his bit for King and Country. Asked how he was by an officer he responds with the slave’s motto, “Mustn’t grumble.” Has John Major considered adopting this as his slogan for the next election? “Stuck in a slum with no job . . . insufficient text books to go round the class you’re teaching . . . waiting in casualty for three hours for admission to a hospital ward which they can’t afford to keep open . . . unemployed and been left by your wife and kids . . . well, what we say is MUSTN’T GRUMBLE!”

Give me Basil Fawlty as against George Dixon any day. True enough, Fawlty was trapped in a world of endlessly repeated frustrations and impotent bitterness but, for all his cheerless disdain for his small-business, culturally pointless life as a hotel landlord, at least he knew there was a problem. Old George Dixon whistled while he worked, worked till he dropped and never broke the master’s rules. He was poor but he was happy—it was the happiness of the willing slave: a role model for the millions who viewed his ungrumbling antics.

There is much to be said for happiness (not least that it feels a lot better than sadness), but perhaps the price of becoming free to control our lives is to recognise just how unfree to be happy the vast majority of us actually are—and always will be under this lousy profit system. We are surrounded by endless commodities, the range of which grows by the day, offering us freedom from stress, anxiety and sorrow. The phone-in shrinks offer callers and listeners huge promises of release from misery. Everyone is urged to “talk about it” whether it’s the news that your daughter has been forced to go on the game or you’ve just lost your executive job or you woke up this morning realising that life in the rat race is for rats and not humans. Talk long enough, they imply, and you will learn to smile in the face of adversity. Mustn’t grumble, after all.

Simply grumbling is a waste of time. It’s like endlessly scratching an itch without searching for its cause. But it is one step up from refusing to grumble—fearing to scratch the itch in case it offends anyone. The next step is to grumble with a view to end grumbling, and the one after that is to grumble collectively (rhythmic grumbling; could this not become a future Olympic sport?).

All is far from lost. Last week a Gas Board worker came to fit a radiator. The following exchange took place:

 "Morning. Come to fit the radiator? " “You seen the bloody snow out there? You can bet Cedric sodding Brown doesn’t have to get up at the crack of dawn to drive across town in the snow fitting radiators. All that bastard knows how to do is make fat profits and sack people.”
"You’re right there. That's what this system's all about. ”“System? I call it a bloody racket, not a system.”
"Yet people put up with it.”“They shouldn’t. They should complain.”
"We should complain. And we need to blow what it is we’re up against.’’
“Well, there’s more of us than them. We should overthrow it, never mind complaining.”

Now, there’s an encouraging thought. Mustn’t grumble—unless, of course you’re a thieving parasite who thinks you’ll forever own the earth. In which case large amounts of grumbling followed by much trembling would seem to be your historic fate.

Steve Coleman

Letters: Religion, Atheism and Materialism (1996)

Letters to the Editors from the March 1996 issue of the Socialist Standard

Religion, Atheism and Materialism

Dear Editors,

The review of Bill Mcllroy's pamphlet, Foundations of Modern Humanism (January) is a history of the movement to break free from the shackles of superstition. It is, therefore, of necessity a history of assorted radicals. Liberals and Tories who, often at great personal cost, opposed religion and the barbaric blasphemy laws of their day.

The history of eighteenth and nineteenth century humanism, like the history of the Tolpuddle martyrs, does not deal with socialism because it took place before there was an organised socialist movement.

Unless people can cast off the superstitious beliefs inculcated by priests, shamans and witch doctors then it is impossible to build a more rational society. The Freethinker and Bill Mcllroy's pamphlet, like the Socialist Standard, are first class at depicting the tyranny of religion. And whilst it is true to say that the Socialist Standard provides a socialist analysis of the case against religion which is missing from Foundations of Modern Humanism, surely that is beyond the scope of the period with which the pamphlet deals.

Carl Pinel, 

Stockport

Reply:
Actually, you are wrong. The early rationalist and socialist movements did exist at the same time and the key figure in 19th century rationalism, Charles Bradlaugh, was a notorious opponent of Socialism. For him, there was nothing wrong with capitalism as an economic system. All he wanted was capitalism without religion. So our reviewer was right to point out that Socialists are opposed to such "bourgeois free thinkers" who attack religion and nothing else.

Then of course there is Karl Marx. He had become an atheist in the 1840s (having been brought up as a Protestant Christian) before he became a Socialist. His criticism of religion, however, was different from that of the bourgeois free thinkers of his day since he made the point that the criticism of religion led to a criticism of the social conditions that gave rise to religion. Or rather should lead to such a criticism, and it was precisely because pure-and-simple atheists did not make this step that he criticised them too.

The social conditions which gave rise to religion were not, in Marx's view, feudalism (that only gave rise to a particular type of religious belief) but any society in which the great bulk of the population were denied control of the products of their labour and in which these products therefore confronted them as an outside, alien force controlling their lives. Religion—and its core belief that only some outside super-being, not humans themselves, by their own collective efforts, can bring about a better world—reflects this lack of power and lack of control over their own lives which most people experience. But most people experience this under capitalism too, which is based, precisely, on their exclusion from the ownership and control of society's productive resources and on the subordination of production to blind and uncontrollable market forces.

So, a consistent criticism of religion leads to a criticism of capitalism. In fact Marx’s analysis leads to the conclusion that religion won’t die out on a mass scale till capitalism is replaced by Socialism as a society where people do control the products of their labour and so their destinies generally.

As long as capitalism continues—or at least until there is a mass, conscious and self-confident movement for Socialism— religion, as the anti-human doctrine that we humans can’t control our lives but need the help of some outside super-being, will continue to survive in one form or another. The form changes—traditional religious beliefs are being replaced by New Age mumbo-jumbo—but as long as humans don’t in fact control their lives then religious beliefs will survive.

In not working for Socialism. but just attacking religion, bourgeois free-thinkers and pure-and-simple atheists are in fact hindering the achievement of their own proclaimed goal of a world without religion.

Editors

Based on common sense

Dear Editors,

I am very interested in your statement, in reply to a letter in the January Standard, that “such people [those who believe in an after-life] are ineligible to join the Socialist Party (but they can be sympathisers)”.

Neither the Party’s adverts in the Guardian nor its published aims state that atheism is a condition of membership—in fact, they don't mention religion at all. At the end of the Declaration of Principles it says: "Anyone agreeing with the above principles and wishing to join should apply to nearest branch or Head Office.” If anyone who is a theist, or is at least open to the possibility of the existence of God and an after-life, agrees with the principles, why should he or she not be allowed to become a member of the Party?

I have recently read your excellent pamphlet From Capitalism To Socialism. Apart from the statement on page 12: "Wars are not fought over pious ideals like justice, nationhood, democracy or religion”, there is no mention of religion. Neither is there any mention of Karl Marx. It is based on common sense and nothing that a religious believer or someone who had never even heard of Marx could not agree with.

Have you thought through the implications of your permission for people with religious beliefs to be “sympathisers"? You are, in effect, saying to such people "although we think you are mis-guided fools and although we sneer at you every month, we will gladly take your money, whether it be in payment for our journal or in donations for the support of candidates in the General Election".

Bryan Fair, 

London NW7

Reply:
The reason why the Socialist Party doesn't admit religious people to membership is that we regard their views, on what is after all a key issue (the nature of human existence), as wrong. In the same way, people who want to support the Labour Party or who think that Russia was socialist are not admitted to membership.

Actually, although this is, probably inevitably, how others would classify us, we do not call ourselves “atheists”. The word “Atheism” suggests a concern with opposing religious ideas in particular whereas we are concerned with promoting socialists ideas. (In fact pointing out the mistaken ideas of religious people only forms a small part of our activity, as you have noticed.) We prefer to describe ourselves as “materialists”, i.e. as people who hold that all we humans know, and can know, is derived from the experiences of our senses of the material world that surrounds us and of which we are a part.

The existence of a super-being called god or of an afterlife for humans is theoretically possible, as part of this material world. These can’t be ruled our a priori. However, neither of these hypotheses has been confirmed in accordance with methods and tests of science—the phenomena brought forward to confirm them can be much more plausibly explained in other ways. A rational, logical person ought therefore to dismiss them as disproved hypotheses.

Religious people do not do this. They are therefore thinking illogically. This wouldn’t be so bad (Socialist Party members don’t think logically all the time) if it didn’t concern a key aspect of the Socialist case: human nature.

The materialist approach, which Socialists take, sees humans as the product of biological and social evolution (not the creation of some super-being), that individual humans have brains and minds which cease to exist when they die (and not souls or a spirit that pre-dates birth and survives death), and that the only way humans can improve their lives is by their own collective efforts (not by relying on some outside intervention from some super-being or beings). This life is the only one we arc going to get and we should therefore try to make it the best possible both for individual humans and for the whole human species. Given the present stage of human social evolution, this can only be done within the framework of a society based on the common ownership and democratic control of the Earth’s resources.

This is the, if you like, "philosophical’’ basis of the case for socialism. It follows from a scientific approach to human existence and problems. Religious people don't, and can’t share, this view. They can only see this life as some sort of preparation for a better life after death. Since not all of them are committed to the pessimistic and anti-human doctrine of the depraved nature of humans (though they have to be if they arc orthodox followers of the world’s two main religions, Christianity and Mohammedanism), some unorthodox religious people can find a religious justification for wanting Socialism. We know from experience that such people exist (perhaps you are one). What they then do is up to them. Some subscribe to the Socialist Standard or support our work in other ways. They don’t need our permission to do this. It’s their choice made, presumably, in the knowledge of our views on religion.

Editors

Could Jesus be a member?

Dear Editors,

I read with interest the letter from Max Hess of Folkestone, and your reply, both in the January issue. I am not religious, indeed I am anti-religion when I consider the many problems and bloodshed that religion has caused throughout the ages, but when it comes to being a believer in an afterlife and also a believer in Socialism, I find I have some sympathy for what Max Hess has to say.

I was pleased to read in your reply that you accept that there can be believers in an afterlife who also want socialism. This is the first time I have known you to make this assertion. But I find it difficult to understand how anyone sincerely believing in the necessity to abolish capitalism, and at the same time having an afterlife conviction, can automatically be ineligible for membership of the Party, even though I appreciate your concern about anyone holding membership who could undermine the Party’s claim to rational, logical argument.

Whether God is, or is not, a socialist is not worthy of argument, but it is interesting to note that much of what Jesus taught and did could qualify him for membership.

George Pearson, 

London SW20

Reply:

You say that it is not worth arguing whether or not so-called "God” is a socialist (we agree, but only get into such futile arguments because some people claim that he, she or it is), but you then go on to suggest that another mythological figure could qualify as one!

But there is no historical evidence that there was such a person as Jesus. The New Testament was written years after the time he was supposed to have lived, while references to him in ancient non-Christian writings have long been exposed as forgeries by mediaeval monks.

What undoubtedly did exist was a break-away Jewish sect known as "Christians" because they believe in the imminent second coming of a mythical demi-god they called "Christ” who would save them. They were millenarians who believed, rather like today’s Jehovah's Witnesses, that the end of the world was nigh and so attached no importance to human efforts to try to establish a better world down here. In other words, the exact opposite of the socialist approach.

To tell the truth, we can't think of a single thing their mythological founder is supposed to have taught and done that would qualify him as a socialist.

Editors

A brilliant careerist (1996)

Degsy.

TV Review from the March 1996 issue of the Socialist Standard

Outside the circles of orthodox Trotskyism and left-wing romanticism, Derek Hatton [has] been the subject of few hagiographies, especially in recent years. BBC2’s My Brilliant Career (Thursday, 8 February, 8pm) seems to have set out to redress the balance. If so, it achieved its aim with flying colours.

It portrayed Hatton as a Jack-the-lad character always with the interests of the working class at heart, now with his own successful PR firm and flash car since the Labour Party were foolish enough to dispense with his considerable talents a few years back. Perhaps understandably, to his father he could do no wrong— Hatton "could turn his hand to anything” and had never forgotten his roots. A local Church of England vicar—a friend of Hatton’s in his youth—compared him to Jesus, feted one day, crucified the next, but a real saviour nonetheless.

If Hatton’s PR firm had made this film, they couldn’t have done a better job. The nature of Militant (really the Revolutionary Socialist League) as a bunch of scheming elitists bent on power for themselves and their cronies was not touched upon. In fact, it wasn’t entirely clear whether Hatton had been a Trotskyist at all. or merely an errant Christian. Nor was the intimidation, the thuggery and abuse of other Labour Party members and trade unionists mentioned, all of which had been condoned by Hatton.

While Hatton's three-year term as a fire-fighter was referred to, his period as a youth leader in Toxteth didn’t rate a mention. Was this anything to do with the fact that during his time in charge £17,000 went walkabout and Hatton was eventually forced to leave after an internal inquiry found him guilty of incompetence? And why was his time as community development officer in Kirkby overlooked? Surely not because his undemocratic ways and treatment of the local community was such that they held a meeting to protest about his activities and actually banned him from two community centres?

Taxi!
Understandably, the programme centred on Hatton’s role as Deputy Leader of Liverpool City Council in the mid-1980s, together with his various confrontations with the Tory government and the then Environment Secretary, Patrick Jenkin. What perhaps should have been made clearer was the way in which Militant, like other Trotskyist groups, attempts to mislead the working class into believing they can achieve the unachievable as a matter of course. This is, after all, their supreme tactic—one of discrediting existing leaderships which cannot deliver, thereby prompting further turns to the left. It is only in the light of this mistaken tactic that the real failure of the Trotskyists on Liverpool City Council can be understood.

After once initially winning more money from the government—to their own surprise— Hatton and his crew upped their demands for the following financial year in the correct belief that the government would tell them where to get off. As part of their tactic they sent redundancy notices out in taxis to 30,000 Liverpool Council workers, famously referred to by Neil Kinnock in his 1985 Labour Conference speech as "grotesque chaos", and which provoked fury in the city itself. Their miscalculation was that in threatening to sack their entire workforce the Militant leadership of the council only succeeded in alienating large sections of the left-wing that might have otherwise have rushed to their support. Far from setting an example of what other Labour councils should do to put pressure on the Tories and drive them out, it simply acted as an example of what local councils should not do if they wish to stay in power. Moreover, it was no coincidence that the years following Hatton’s ridiculous posturings in Liverpool saw an even further crackdown on the powers of local government in Britain.

If the makers of My Brilliant Career wished to make a valid point about Derek Hatton it would surely have been that his "success", such as it is, has been almost solely confined to his PR business, an occupation where he can arguably do less damage than he did as a councillor. As Liverpool's Deputy Leader he left behind debts, chaos and acrimony.

And to those who say Hatton still has the interests of the working class at heart, take note of this. Hatton claimed on Granada's Up Front programme a couple of years ago that his lasting legacy was that he had persuaded Barratt's and Wimpey's to build five thousand new council houses in Liverpool during his period of office (before the debts got too great and he was chucked out). “No. Derek," replied John Hamilton, nominal council Leader to Hatton’s Deputy in a rare moment of insightfulness, "Barratt's and Wimpey’s didn’t build those houses—the workers of Liverpool did.” So much for not forgetting your roots.

Dave Perrin

A valueless contribution (1996)

Book Review from the March 1996 issue of the Socialist Standard

The Feminist Challenge to 
the Canadian Left 1900-18 by Janice Newton
 (McGill-Queen’s University
Press.)

The Canadian Left from 1900-1918 consisted essentially of the Socialist Party of Canada and the Social Democratic Party. The SPC was the Canadian equivalent of the SDF in Britain at the same time, but there was an important difference. Whereas the SDF had a reformist majority and an “impossiblist" minority (some of whom broke away in 1904 to form the SPGB), the SPC had an impossiblist majority and a reformist minority. The Canadian Social Democratic Party was formed when this reformist minority broke away in 1911.

"Impossiblism" was a term of abuse invented by the reformists in the SDF to describe their opponents. Basically, it was the view that a socialist party should only seek support on the basis of Socialism and the abolition of the wages system and so should not have any programme of immediate demands. It also involved the view that socialism could only come about when a majority of workers wanted and understood it The task of a socialist party was seen as being educational—with a view to get workers to become socialist then eventually, when there was a socialist majority winning control of political power — as opposed to advocating reforms to be achieved within capitalism.

However, this refusal to advocate reforms did not mean that impossiblists thought a socialist party should oppose them. On the contrary, it was recognised that any Socialist elected to a parliament or a local council should vote for any measure considered to be in the interest of the working class.

The SPC, for instance, in its platform (which it published in every issue of its paper the Western Clarion and in its pamphlets) declared:

  "The Socialist Party, when in office, shall always and everywhere until the present system is abolished, make the answer to this question its guiding rule of conduct: will this legislation advance the interest of the working doss and aid the workers in their class struggle against capitalism? If it will, the Socialist Party is for it; if it will not, the Socialist Party is absolutely opposed to it. In accordance where this principle the Socialist Party pledges itself to conduct all the public affairs placed in its hands in such a manner as to promote the interests of the working class alone.”

The SPGB adopted a similar position, but in Canada this was not just an academic matter since the SPC did succeed in getting a few of its members elected to local and provincial councils.

Despite reproducing the SPC’s platform in full on page 23 of her book, Newton persists in equating not advocating some reform measure with being opposed to it. For instance, she claims that the SPC was opposed to giving the vote to women and attributes this to the party supposedly being a men’s organisation. But even the quotes she gives from the Western Clarion show that the SPC was not opposed to this measure, but merely that it did not seek support on the basis of favouring it.

She herself mentions that an SPC member of the British Columbia Legislative Assembly brought into a bill to give votes to women. She also mentions a debate between the SPC and the Political Equality League on the subject of "Will Woman Suffrage Solve the Economic Problem?” in which the Suffragette speaker complained that her SPC opponent (also a woman, incidentally) wasn't really opposed to giving votes to women. Of course she wasn’t as the SPC wasn’t. What the SPC was opposed to was the argument that the granting of votes to women would somehow solve the economic problems faced by working class women; in a socialist society women would of course have an equal say with men in the way things were run. As the Western Clarion (as quoted by Newton) put it “every Socialist as a matter of course stands for the enfranchisement of women and equal rights for the sexes in every department of life".

What Newton, as a reformist herself, fails to understand is the logic of the impossiblist position adopted by the SPC. This involved not advocating any reforms to be achieved within capitalism on the grounds that Socialism was the only solution and that absolute priority should be given to trying to achieve it. So the fact that the SPC did not advocate woman’s suffrage is not to be attributed it being against women any more than the fact that it didn’t advocate old-age pensions is to be attributed to it being against retired people. It sprang from a more general position.

To tell the truth, not only does Newton not understand the impossiblist position (she expresses a preference for the confused reformism, where Christianity and temperance reform were mixed up with some socialist ideas, of the Social Democratic Party) but she is profoundly prejudiced against the SPC. She paints a picture of it as a male organisation composed of lumberjacks and miners who smoked, drank, swore, told dirty jokes, used prostitutes and whose conception of Socialism was one where men would continue to go out to work but where women would be confined to working at home, cooking their meals, washing their clothes, darning their socks and serving as objects of their sexual desires.

Needless to say, this is pure prejudice. No doubt the fact that some SPC members smoked and drank at party meetings would have put off women (in those days). It is true also that the rhetoric sometimes used—calling on working men to show their "manhood” and stand up to the bosses who were exploiting them—wrongly suggested that the class struggle was exclusively a male affair. There will also have been individual SPC members who were prejudiced against women. But to claim that the SPC’s conception of socialism was a male-dominated one is an absurd fabrication. We have already quoted (re-quoted from Newton herself, in fact) the statement from the Western Clarion to the effect that “every Socialist, as a matter of course, stands for the enfranchisement of women and equal rights for the sexes in every department of life".

So what evidence does Newton produce to back up her case? Her first line of argument is the same mistaken one as over votes for women. The SPC didn’t advocate it, therefore it was against it. Thus Moses Baritz is quoted as arguing against the view that birth control would allay poverty; Newton twists this into saying that he and the SPC were against birth control. Similarly, just because the SPC did not seek support on the basis of sex reform (abolition of marriage, etc.), she claims this meant it was against this even though the passages she quotes from the Western Clarion make it clear that SPC members had "individual opinions" as to what will happen to relationships between the sexes in a socialist society.

But the biggest distortion comes over the concept of the "family wage", i.e. a wage paid to a man providing him with enough to maintain a wife and family at home. Newton quotes Kautsky and the Western Clarion to the effect that one of the consequences of the entry of women and children on to the labour market is to exert a downward pressure on men’s wages, since, whereas previously employers were obliged by market forces to include in men’s wages an element to cover the cost of maintaining a family, with women and children earning something too this was no longer necessary. Kautsky and the Western Clarion stated this as a matter of fact (a fact, we would have thought, that can’t be contested). But Newton interprets this as a complaint and as a call to keep women out of the labour market so as to maintain male wages.

Some male trade unionists did take up this position, but not the SPC as can be shown, yet again, by quotes from their literature which Newton herself gives. The SPC stood not for a family wage, nor equal wages, nor any kind of wages but for the abolition of the whole wages system. As the Western Clarion put in 1910 (quoted by Newton on p. 68) "for the she worker there is only one issue, the destruction of the wages system". She also records (p. 97) that an SPC candidate in Ontario was called to order by the SPC’s executive committee for including a proposal for equal pay in his election manifesto and "was told he should stand only for the abolition of the wages system".

So how can she claim that the SPC’s vision of the "socialist future" was one where "the working man earned sufficient wages to support a wife and family" (p. 101) and which “would reverse the effects of capitalism on family life, return women to the home and re-establish the male wage earner’s position as head of the household” (p. 155)?

Such patent distortions— there are many others too regarding the SPC—make the book valueless as a contribution to feminist let alone working class history.

Adam Buick