Editorial: The Gold Standard and the Workers. (1931)

Editorial from the October 1931 issue of the Socialist Standard

In the formation of the National Government its partisans gave such a gloomy picture of the financial condition of the country that foreign holders of English securities got the wind up and increased their selling. As so much English money is tied up in foreign investments not easily realisable (particularly in Germany), the drawing of gold from the Bank of England to meet the situation increased. This gave the industrialists their opportunity, and on Monday, September 21st, vivid placards announced that the free export of gold had been suspended. This represents a victory of the industrialist section of the capitalists over the banking section, and it is curious to notice that preparations for abandoning the gold standard had already been prepared several days before.

The comments of the Daily Herald for September 21st are fitting expressions for the mouthpiece of the industrialists. In the Editorial they make the following statement :

“Not only during the War, but for seven years after the War, we were off the gold standard, and the pound was at a discount against the dollar.

There were no disastrous consequences. We were, indeed, far more prosperous then than now. And it was in very large measure the forcing of the pound back to parity that crippled our export trade and created the heavy problem of unemployment.”

Thus does the Daily Herald help to hoodwink the workers by blaming economic troubles upon gold. The “prosperity” of the early post-war period is apparent from the following unemployment figures, 1921 to 1925 :—

The City Editor of the Daily Herald, under the heading, “More Reforms,” makes remarks that show how their real concern is for the investors :—

“Now let us turn for a moment from contemplation of the Stock Exchange as a factor in an absorbing international situation, to consider how this re-opening on Saturday will affect the ordinary British investor.

It gives him an advantage in that he can buy and sell shares on six days of the week instead of five.  (….)

It is but one reform out of many which must be accomplished before the Stock Exchange can really claim to provide an adequate service for the ordinary investor, or can take the place it should in national life as a great institution, assisting sound industrial enterprises to obtain capital and to develop along lines which will improve our trade and set to work the millions of unemployed who can find no demand for their services.”

The above “Reform” is surely a treasure, and the workers who have received wage cuts and those who will be thrown out by the economy programme agreed to by the Labour Cabinet, backed by the Herald, will know what to do with their surplus cash !

As we are preparing this issue for the press, we see that Mr. Henderson offered no opposition to the passage of the Gold Standard Bill and that there is a prospect of the Labour Party joining the National Government—possibly their hearts are aching for the lost prestige and positions,

However, to return to the Gold Standard. According to the Daily Express on Monday, September 21st,

“Nothing more heartening has happened for years.  (…) 

The fact remains that at last we are rid of the gold standard—rid of it for good and all.  (…)  

It is the end of the gold standard and the beginning of real recovery.”

The Evening Standard for the same day echoes these sentiments :—

“We are now free of the yoke of France and America. We are not tied to an illusory symbol of wealth ; we stand firmly in the fundamental strength of our position as a great trading and manufacturing nation. And we look confidently to the future.

For what does this mean ? It means a decline in imports and a corresponding boom in the great exporting trades, such as cotton and iron and steel.”

When the workers commence to pay higher prices for food with lower wages, they will not share this view. For, like other attempted solutions for economic troubles, it is a move in favour of a section of the capitalists, leaving the workers where they were before—in a condition that is steadily worsening. Taking the situation at its best, according to the advocates of abandoning the Gold Standard, the increase in exports will be offset by an increase in the prices of imports and home products, thus leaving matters where they were, but re-shuffling the positions of commercial concerns.

It will be remembered by those who read it, that the Macmillan Report on Finance and Industry recommended raising prices approximately to the 1928 level as an alternative to the lowering of wages. Mr. Bevin, a member of the Committee, agreed with this policy.

The illusion that lack of gold has anything to do with the main problems is easily dispelled. America has nearly a thousand million pounds in gold in its reserves and is the great creditor nation, Yet America has been, and still is, suffering severly from economic crises, and has an unemployed army in the neighbourhood of ten millions. France has a gold reserve of nearly five hundred millions, a regular revenue, in gold or gold marks of 50 millions from Germany, and a flourishing export trade. Yet France is already in the midst of a crisis and has an unemployed army well over a million, and the numbers are rapidly growing.

These facts prove that a gold reserve is no guarantee of internal harmony or increasing employment for workers ; and that, with or without a gold reserve, on or off the Gold Standard, the workers are, in the long run, no better off.

A Socialist Searchlight. (1931)

From the October 1931 issue of the Socialist Standard

Mr. Maxton gives a date.

Mr. Maxton, M.P., under the false impression that it is a Marxian theory, has for years been prophesying the sudden and irretrievable collapse of capitalism. He has now given it a date. In a speech at Cowcaddens, reported in the Daily Record (August 22nd) and reprinted in Forward (September 12th), he said :—

“I am perfectly satisfied that the great capitalist system that has endured for 150 years in its modern form, declared Mr. James Maxton, M.P., in the Cowcaddens Ward, Glasgow, last night, is now at the stage of final collapse, and not all the devices of the statesmen, not all the three party conferences, not all the collaboration between the leaders, can prevent the system from coming down with one unholy crash. 

They may postpone the collapse for a month, two months, three months, six months,” he cried, forefinger pointing at his audience, and body crouched, “but collapse is sure and certain.”

Six months from August 22nd brings us to February, 1932. When that comes round, we will ask Mr. Maxton for his explanation.

* * *

Another exponent of the collapse theory, Mr. Walton Newbold, has suffered a strange transformation. In 1921, as a Communist, he. prophesied imminent collapse, and was doing his utmost, so he said, to hasten it. It did not come off, and Mr. Newbold, now in the Labour Party, is on this occasion rallying round MacDonald and Thomas to prop capitalism up again !

* * *

Letters to Mr. Hicks.

Mr. George Hicks, M.P., was asked for his comment on the letter of personal explanation which Mr. MacDonald sent to each of the Labour Party M.P.’s. Mr. Hicks sneeringly replied that it was just the sort of letter he would expect from a man like Mr. MacDonald.

Mr. Hicks was not always so minded about letters from that quarter. As recently as April of this year (see The Times, April 11th), when Mr. Hicks was Labour Party candidate at East Woolwich, he published a broadsheet called the George Hicks Herald, containing the letter sent by MacDonald, assuring the electors that Mr. Hicks is the sort of man MacDonald regarded as suitable to represent the workers of Woolwich.

* * *

The Communist-I.L.P. Alliance. 

The crisis has had the effect of throwing together the two reformist bodies, the I.L.P. and the Communist Party. On Sunday, September 6th, Communist and I.L.P. speakers addressed a joint demonstration in Hyde Park, speaking from the same platform. The Secretary of the Balham and Tooting I.L.P., in a letter to the New Leader (September 11th), described it as “a glorious sight to see a demonstration in Hyde Park in which both Parties were united.” This was just a week after the majority of the I.L.P. Labour M.P.’s had voted for the election of Mr. Henderson as leader of the Labour Party in place of Mr. MacDonald. Only five votes were cast against his election (Daily Express, August 29th). One of those who voted for Mr. Henderson was Mr. J. Beckett. M.P., and it was Mr. Beckett who was the star turn at the Hyde Park demonstration, although Mr. Beckett complained that Communists in his audience hurled abuse at the I.L.P. speakers. Mr. Beckett was so anxious not to have it thought that he voted against Henderson, that he had the Daily Express (August 31st) publish a correction of their statement including him among the five.

P. S.

The Socialist Forum: Should Socialists compromise? (1931)

Letter to the Editors from the October 1931 issue of the Socialist Standard

In the September issue we dealt with the question, put by a prospective Labour Party candidate for a seat on the Grimsby Town Council, as to what a Socialist should do in that position. In brief, the question was, Should a Socialist member of a minority group be uncompromising or should he compromise with the majority? In our reply we pointed out that the vital point is the character of the electorate. This determines the manner in which the successful candidate gets on to the Council, and it determines the part he can play when elected. If the electorate is composed of non-Socialists, then the successful candidate has to satisfy their desires by undertaking to carry out a non-Socialist policy. We do not believe that persons so elected can do anything to further Socialism. We added that we have no doubt that the great majority of the electors in Grimsby are non-Socialists.

A reader (J. R. Foskett, Muswell Hill) objects to our reply on the ground that it avoids answering the question by assuming that the candidate in Grimsby must be elected by non-Socialist votes. Mr. Foskett points out the possibility that one Ward may have a Socialist majority even although Grimsby as a whole is non-Socialist.

What Mr. Foskett completely ignores is the further statement contained in our reply to Mr. Matt Quinn, of Grimsby. We asked Mr. Quinn for a copy of the election address with which he proposed to seek the votes of the electors. The contents of that address would demonstrate without any possibility of doubt whether Mr. Quinn thinks that the electors are Socialist or not. Mr. Quinn declined to provide that information. This, in conjunction with the fact that Mr. Quinn, while professing to be a Socialist, is nevertheless a member of the Labour Party, gives us reasonable ground for assuming that the electors there are not Socialist, that Mr. Quinn knows they are not Socialist, and that Mr. Quinn is prepared to seek election on a non-Socialist programme. It is interesting to notice that while Mr. Foskett and other readers have intervened to suggest that perhaps the electors there are Socialist, Mr. Quinn himself did not say so in his original letter and has not come forward to correct us. If they were Socialist, it is obvious that they would never elect a member of the Labour Party to represent them.

Mr. Foskett and another reader ("No Compromise," Leicester) then go on to put a further question as to what a Socialist would do if elected as one of a minority group, put there by Socialist votes on a Socialist programme.

This raises an entirely different issue. The non-Socialist elected by non-Socialists is offering to work for certain reforms of capitalism, on behalf of electors who do not want capitalism abolished. As capitalism rests upon the exploitation of the workers, no reforms of capitalism can ever solve the workers' problems. They will constantly press their representatives to work and vote for old and new reforms, but not for Socialism until they become Socialists.

The electorate of Socialists, on the contrary, will not be under the illusion that their problems can be solved within the framework of capitalism. They will be aware moreover that Socialism pre-supposes a Socialist majority here and in other countries and also pre-supposes the conquest of the central machinery of Government, including the armed forces. They will appreciate the importance of controlling the machinery of local government, in addition to controlling the Central Government from which local powers are derived, but they will not imagine that problems whose scope is international can be solved locally. They will not permit their Socialist Councillors to compromise, i.e., make concessions to non-Socialist groups or parties. The object of the Socialist Party is to get Socialism. How, then, could it make concessions to those whose primary object is to oppose Socialism and 'maintain Capitalism?

To Socialists, the need of controlling the local councils in order to supplement the control of the central machinery of government would be a predominating issue, locally as well as nationally. The using of minority representation or the control of some local councils, to the limited extent possible, as a means of defending the workers’ position under Capitalism, is the main question to non-Socialists; to Socialists it would be a minor one.

Socialist councillors would be required by their electors to determine their policy in accordance with the chief issue, thus ruling out compromise on grounds of expediency as well as on grounds of principle.

Editorial Committee.

Mr. Bromley Day by Day. (1931)

From the October 1931 issue of the Socialist Standard

Mr. ]. Bromley, M.P., General Secretary of the Associated Society of Locomotive Engineers and Firemen, was a member of the Civil Service Royal Commission. He signed its report, published in July, recommending rates of pay which, for the lower grades, represented a reduction of about 9 per cent. on the rates ruling when the Commission began its investigation. Mr. Bromley also concurred rejecting the Post Office workers’ demand for their hours to be reduced from 48 to 40.

Early in September, Mr. Bromley was among his fellow Trade Union officials at the Trades Union Congress. On September 6th he addressed a demonstration and “ridiculed talk of equality of sacrifice as an excuse for wage cuts” (Daily Herald, September 7th.)

Two days later he seconded a resolution on the floor of the Congress demanding a maximum working week of 40 hours. (Daily Herald, September 9th.)

* * *

Do not, however, make the mistake of thinking that Mr. Bromley is not a real fighting man. A week later he made the alarming discovery that the child elected as this year’s “Railway Queen” for a carnival was the daughter of a non-Trade Unionist. Here was a really vital question, and Mr. Bromley did not fail us. Unable (or unwilling?) to stand up against his fellow-members on the Civil Service Royal Commission, Mr. Bromley, M.P., “supported by Mr. C. T. Cramp, secretary of the N.U.R., and Mr. A. J. Walkden, M.P., secretary of the Railway Clerks’ Association,” declared that he “cannot be associated with a non-unionist who, after deserting his fellows in the railway service, tries to take advantage of their work in this connection just as he has in the conditions of service which he enjoys” (The Times, September 19th). So Mr. Bromley showed Miss Patricia Eileen Annie Clark, aged 13, what Trade Union officials are made of.

What would the workers (and the employers) do without the Labour leaders ?

We need your help. (1931)

Party News from the October 1931 issue of the Socialist Standard

SPGB Meetings (1931)

Party News from the October 1931 issue of the Socialist Standard

Socialist Sonnet No. 117: Cutting Earth (2023)

From the Socialism or Your Money Back blog

Take a spade and cut a sod one spit square,

Lift that clod of earth, then identify

Precisely where the roots of the nation lie,

Has a border line been drawn clearly there,

Showing where one soil ends and the rest starts?

Judge just how heavy it is and appraise

Yourself as to how many lives it weighs,

Estimate the number of broken hearts

Required to thoroughly saturate it

With the blood of martyrs, or supposed foe,

Or simple patriots who think they know

Their national story. When they relate it

Though, they find the fiction reveals that earth’s

Everyone’s, everywhere, of equal worth.

 

D. A.

Editorial: Did you waste your vote? (1983)

Editorial from the October 1983 issue of the Socialist Standard

The stunned aftermath of the Tory election victory was a time for the defeated parties to be composing their excuses. The Labour Party are not yet sure who, or what, they should blame for their collapse but the Liberal/SDP Alliance are quite clear on the matter. They were, they protest, robbed; the electoral system in this country is such that it allowed a party to win power on a minority of votes while a smaller party has only a handful of seats in Parliament to show for the millions of people who supported it. This anomaly, says the Alliance, calls into question the very nature of parliamentary democracy in Britain — it is. they hope to persuade us, time for a change.

In fact this is a long-established argument, which we have been hearing from the Liberal Party ever since they were swept from the position of being the alternative government. It has now been taken up by the SDP. although none of the prominent ex-Labour ministers in the SDP complained about the electoral system when it was working to their advantage. It does not need a mathematical genius to work out, or to understand, the statistics of it. Over the country millions of votes go to unsuccessful candidates, so that when the votes cast for each party are divided by the number of their MPs it emerges that vastly fewer votes are needed overall to elect a Tory or a Labour MP than for one from the Alliance. Put another way, this means that millions of votes are virtually unrepresented in Parliament, which causes much anguish among the self-styled democrats of the Alliance.

This was the argument used by the Liberal Party to support their persistent campaign for proportional representation which, by one method or another, was supposed to produce a Parliament more in line with the votes as they are cast in the election. The Labour and Tory parties always evaded the issue of democracy and attacked the Liberal proposals on the grounds that proportional representation made for a fragmented, and therefore unstable. government. There is no evidence (except to the contrary) that working class interests are bound up with the stability or otherwise of the government, which has the role of protecting the interests of the exploiting class in society. It is important to observe that both sides in this debate are motivated, not by any objective concern for democratic representation but by a concern for their own political advantage. For example the extent of the Liberal concern for democracy can be gauged by the fact that they grant dictatorial powers to their leader on the composition of their election manifesto.

None of this should obscure the fact that democracy is important to the working class. It enables them to organise more freely in trade unions and thereby better protect themselves in the struggles of the industrial field. It makes the existence of a socialist party easier, which means that the case for a new society can be stated more effectively. And there is also the fact that life for workers under capitalism is less stressful in the absence of the type of repression associated with a dictatorship such as Nazi Germany. What is unimportant is which party holds power in a capitalist society; apart from a reshuffling of their programmes and their personalities, they are at core identical. None of them can lay claim to be able to solve the problems typical of this social system, including that of political repression. Votes for all of them — Labour, Conservative, Alliance and the rest — are votes for impotence and those millions of workers who opted for them at the election were wasting their votes.

Democracy matters to the working class because it is not impotent; it is strength. It is more than a five-yearly chance to choose between the competing political clones of capitalism; democracy is a matter of knowledge, consciousness and participation. It is, in other words, an essential part of the case for a socialist society and it is as a means to establish and organise that society that democracy achieves the true measure of its importance.

Socialism will come into existence when the world’s working class, in a conscious political act, have overthrown the class ownership of the means of wealth production and distribution and replaced it with communal ownership. It will be a classless, moneyless society in which human beings will co-operate to produce wealth which will be freely available to all to satisfy their needs. It will be a system which makes all information openly available to enable a full participation in decision-taking. Just as the socialist movement today is made up of conscious socialists, so will socialism be populated by people who are aware of the basic nature of their society and of how it must be operated to the common benefit.

Socialists have good cause to be aware of the defects of the present system of parliamentary elections. We also know that to attempt to change it, while leaving capitalism to continue, will have little effect — certainly not enough to justify a diversion of working class efforts from the struggle for socialism. The capitalist parties are concerned with the issue through an expedient preoccupation with their own fortunes; the paramount issue is not whether there should be fewer Tory MPs. or more Alliance MPs, to run capitalism perhaps slightly differently, but whether the world will continue to suffer a social system which cannot answer to its people’s needs or whether we shall have socialism.

Whatever its faults, the limited democracy in force in places like Britain at present allows a socialist movement to exist and to propagate its ideas. What hampers our progress is a persisting lack of working class consciousness and understanding. When that is remedied — and socialists everywhere work to that end — we shall have the new society of co-operation, abundance and security — the society of true democracy.

Running Commentary: End of a hero (1983)

The Running Commentary column from the October 1983 issue of the Socialist Standard

End of a hero

Nobody could look less like it, but Menachem Begin is an adored national hero and Israel was swept with consternation and grief when he announced that, worn out in the service of its ruling class, he would throw in the job of prime minister.

The reaction showed that Jews are as susceptible to deception as workers elsewhere, in this case about the indispensable mystique of a political leader. For the emotions expressed at Begin’s retirement could not have been related to any of his achievements.

He leaves a deep mess of problems to his successor, as Israel is sunk in economic stagnation — like many other countries in the current slump — and bogged down in a long and expensive war.

Begin’s departure is a useful time to remember the kind of state Israel was supposed to become, when people like him were fighting a guerrilla war with the professed object of establishing it. It was claimed that, above all, Jewish people would have learned a unique lesson from their desperately sad history; the new state would be a haven of peace, equality and compassion.

It is not accidental that it has turned out to be very different from those noble, misconceived ideals. Israel is now the Middle East’s greatest military power (its arms industry is its biggest employer). It suppresses Arabs, hounds and terrifies Palestinians and, as in Beirut just over a year ago, it does not shrink from condoning genocide and massacre.

Far from opening the way to peace and compassion, Begin's time in office has prepared for the succession of Yitzhak Shamir, ex-member of the militant, murdering Stern gang and a hard-liner on matters political and military. If Shamir in time becomes a national hero like Begin it will mean that he too has kept to those noble ideals, that he has talked of humanity and peace while serving his ruling class through all necessary excesses of cruelty and destruction.

Fact

Some of the runners in the Labour Party leadership contest advocated a national minimum wage, with Roy Hattersley leading the way with assurances that it would bring . . a more equal society . . . narrow the gap between rich and poor . . and Michael Meacher claiming that it was “a price which can be paid”.

Fact. A national minimum wage of a sort has been in existence in this country ever since Tory loony Keith Joseph was in charge of the Department of Health and Social Security, at least that's what they called it. Joseph brought in Family Income Supplement, a state benefit designed to ensure that nobody in work — earning a wage — would fall below a certain defined level. It didn’t work.

Fact. The Labour candidates are discovering that poverty still exists in this country after most of them have been members of past Labour governments which got in power partly on an assurance that they had a simple solution to the problem. That didn't work either.

Eyeless in power

From Thatcher’s first complaints of grit in the eyes to the private surgery, there intervened only one week. Although the condition remained unnoticed by Thatcher's doctor until a few days before the operation, it had been spotted by the Socialist Party of Great Britain many years previously.

Socialists detected the presence of the Prime Minister’s infamous blind eye from the very start of her political career. It is a malady she shares with every MP who has ever taken a seat in Parliament; it is an affliction with both advantages and disadvantages.

While she and her fellow members maintain the capitalist system, it is a useful thing to be able to turn a blind eye to the human suffering this causes. Indeed, if it were not for this fortunate ailment how would our elected representatives subjugate any pangs of doubt they might feel?

How would they sleep if the glare of their own ambitions did not blind them to the degradation, pain and anxiety that capitalism pours on the exploited working class? If the visions of suffering that are better not seen could not be ignored by such a selective method of sight, would they not be campaigning for the end of such an inhumane system rather than paying homage to it?

When the working class cease to elect members with such imperfect sight and turn instead to men and women who have seen and analysed that which our contemporary MPs defensively refuse to acknowledge. then something will be done about its removal. The causes of working class suffering are known to all who have eyes to see.

NL

In the swamp

Colourful phrases do not spring easily to the lips of Len Murray so perhaps he did not describe the 1983 TUC's tendency to move away from the traditional connection with the Labour Party as “the last twitch of the dinosaurs”.

In any case there is no cause for excitement. for the TUC may at most abandon one outdated idea for another. To develop ties with the SDP/Liberal Alliance and to begin a dialogue with the dreaded Norman Tebbit instead of with the Labour Party hardly comes into the description of fresh, relevant and optimistic ideas.

Then there is the matter of the unions’ motivation. If they do break with Labour it will be because that party’s chances of power are so dismal that there is little to be gained from affiliation with them. Better to look for a likelier prospect, even to negotiate with the Tories if they are the people in power.

It would have been more encouraging if the delegates had discussed severing from the Labour Party through a recognition of the reasons for its futility. They might also have acknowledged the Labour Party’s miserable history of trying to force down workers’ living standards and of fighting against the unions. The fact that this was all done in the interests of the British ruling class provides a conclusive reason for the unions to break with Labour — indeed to oppose it with all their power.

A debate at the TUC which ranged around that sort of awareness would have been a sign of real evolution in the unions, perhaps the first stirrings of class-consciousness which would expose and discard all connections with all the parties of capitalism.

For the present that must be a dream; but the workers can make it come true. Meanwhile the present is less happy, as the unions remain in the primeaval intellectual swamps, a long way behind reality and a proper grasp of what must be done to solve society's problems.

Labour in pain (1983)

From the October 1983 issue of the Socialist Standard

Judging from his article in Tribune (19 August 1983) Conrad Jameson of the Kensington and Chelsea Labour Party is a very frustrated man. The article cries out with utter despair against a party which has betrayed thousands who placed their faith in it.

Conrad Jameson is staggered by the cynical policy somersaults which the Labour Party has performed since its overwhelming defeat in the election:

It’s hardly seven weeks since the election. Yet Neil Kinnock has already put us back into the Common Market, E. P. Thompson has already confessed that Denis Healey was right after all — stop Trident and Cruise for now but bargain about Polaris later on. Even the sweet-natured Michael Foot has already discovered that it is only the discount that makes the Tory policy of council house sales so wicked as the principle has always been good.

These are changes, mind, coming from Labour's Centre Left — and before the October Conference. When the strains of The Red Flag have died away will we not get still more? And if that is the case why should I bother my head about turning Right or Left?

The choice in the Labour leadership battle, according to Jameson, is between Hypocrisy and Opportunism:

There are two ways of moving Labour back to the middle. One is to move Rightwards but say you haven’t. For this tactic we need a first-class hypocrite, a leader who can march backwards even while claiming to make a forward change — and for that, no doubt about it, Kinnock fits the bill . . . Another way of moving Right is simply to move Right — and shut up and be quick about it. For this tactic we need a first-class opportunist . . . For that kind of swordsmanship we need Roy Hattersley.

It can be far from satisfying to be stuck in a political party which changes its policies because the voters don't like them and which picks its leaders on the basis of their hypocritical and opportunist credentials. But that is the party which Conrad Jameson says he belongs to, and who are we to disagree with him? Of course, he is not alone. Apart from the thousands who have abandoned the Labour Party in recent weeks, months and years, there are many who, like Conrad Jameson, carry on giving loyalty to the party which is as unprincipled when it loses as when it wins. One can sympathise with their attachment to the Labour Party: it is never easy to break away from one's traditional affiliations and make a new start. Hard though it may be, there are urgent reasons why Conrad Jameson and others who feel and think like him should start questioning the basic position of the Labour Party.

Facing facts, it has to be conceded by Jameson and others that the problems of the Labour Party are not simply problems of leadership. Even if Kinnock was anything but a hypocrite and Hattersley was transparently honest Labour would still be a party which aims to work within the capitalist system. It is Labour's refusal to examine the system rather than its symptoms which makes it a party of reformism, destined as long as it survives to play the futile game of trying to run the system of exploitation in the interest of the wage slaves who are exploited.

Consider the so-called Left wing policies which Labour is now in the process of throwing overboard in a desperate attempt to keep the sinking ship afloat. Membership of the Common Market; the Left want out, the Right wants to stay in. But what interest is it of the working class whether the British capitalists — our exploiters — join the European Big Business Club or stay out of it? The pretence that workers would be much better off one way or the other is one which sustains the myth that, given a few modifications, capitalism can be turned into the kind of society where all the manifestations of poverty can be eradicated. Yet any serious analysis of capitalism would show that poverty is not a consequence of one trading alliance rather than another, but is an inevitable effect of a system based on class division.

Under the capitalist system one class owns and controls the means of wealth production. but does not produce any wealth; the wealth producers are alienated from social power. The law of the market which is the fundamental principle of capitalism, is that needs can only be satisfied if it is profitable to the capitalists. The Labour Party advocates import controls, but these are economic policies belonging to a nationalistic outlook based on a confused analysis about “what's best for Britain” rather than what socialists should be advocating: what's best for the working class. The argument over nuclear missiles is, again, seen by the Labour Party in completely reformist terms. Instead of beginning by asking why wars take place in the modern world and concluding that war is unavoidable when there is constant competition over markets, raw materials and trade routes, the Labour Party has become involved in the business of advising the British capitalists — and those of the other NATO countries — as to the most humane way to fight a future war — using conventional rather than nuclear weapons

The capitalists are not interested in fighting humanely, but in killing cheaply and with the most efficient weaponry of destruction. If E.P. Thompson now agrees with Healey’s sordid compromise that is no doubt because he has realised that if Labour is ever to provide a credible government of capitalism it will have to defend and expand British capital without any moral scruples about nuclear weapons.

To the sincere Labour Party member, who joined up in order to make society more humane, affluent and secure, the “realities” which their leaders are forced to accept must be very hard to swallow. It is easier to shout names at Kinnock and Hattersley than to accept that the “realities” which these politicians are adapting to are inevitable if Labour is to bow to the needs of capitalism. This leaves Conrad Jameson and other frustrated Labourites with a choice: either they also adapt to the needs of the profit system and drop the stuff about nuclear disarmament and standing on the side of the poor — or they stop playing the capitalist game and move beyond the barriers of the Broad Church. Of course, you can try to have it both ways and accept the role of political martyrdom, as some Leftists like to do. by staying in the Labour Party and spending a lifetime crying out against the betrayals, urging Labour governments to pretend that they are running socialism when they are running capitalism, and waiting to be dealt with in one of the periodic party purges. The self-deceit of the Militant Tendency is a one way deception: they believe that they are playing a crucial role in radicalising the Labour Party, but the Labour leaders know that they are about as dangerous as a crowd of feminists infiltrating the Girl Guides.

Suppose that you choose to leave. The mass exodus of recent years shows that you will not be the first to have thought of the idea. Where to next? Obviously, nobody leaving the Labour Party because it is a pro-capitalist party is going to be attracted to the Tories or the Alliance. At one time the Communist Party seemed to be an alternative. If there is one useful lesson which workers in Britain do seem to have learned over the last few years it is that Russian state capitalism offers no preferable alternative to private capitalism. The Communist Party of 1983 is a shadow of its old self; a blundering, old hanger-on to the coat-tails of the Labour Party. What about the other Leftist groups? Essentially, they are simply advocating old Labour policies, usually formulated in the language of Lenin. The idea that nationalisation is a socialist measure is another that workers are increasingly less taken in by and Militant's demand for the nationalisation of the top two hundred companies is hardly likely to inspire more than a yawn from any worker who understands how the capitalist system operates.

Most ex-Labourites retire into a kind of cynical apathy. Ask them which party they support and they tell you how they used to support Labour — and would probably vote for them rather than the Tories — but basically the parties are all the same. It is surprising how many workers told us that when we were campaigning for the Socialist Party of Great Britain in the recent general election. Conrad Jameson could be in grave danger of falling into the pit of apathy. Given the state of his party, and the inevitable compromises which he will have to witness from his new leader, we can hardly blame him — and many like him — for looking towards the exit door of the Broad Church.

There is always, of course, the Socialist Party of Great Britain. We appreciate that Conrad Jameson may never have heard of us and we are doing all that is within our power to ensure that our existence is more widely known. If he has heard of us he may, like many other people, have all sorts of strange misunderstandings about what we stand for. We stand for one aim and one only: socialism. Of course, socialism means many things to many people, so let us define it clearly: “The establishment of a system of society based upon the common ownership and democratic control of the means and instruments for producing and distributing wealth by and in the interest of the whole community". That object is printed on every piece of literature produced by the Socialist Party. No leader or caucus could divert us from our socialist aim because the Socialist Party has no leaders and allows no followers: admission to membership is on the basis that you know what you want and you know how to get it. The Socialist Party has a clear analysis of capitalism based largely, but not dogmatically, on the theories of Marx. It is our contention that socialism can only be established when a majority of workers, not just in Britain but throughout the world, understand and want a society of production for use and free access to wealth.

Talk to many people on the Left and in the Labour Party and they will admit to having a certain respect for the Socialist Party. Of course, they realise that a party without leaders is never going to get any followers and that a party which is not in the business of trying to make capitalism work will never make capitalism work. They stay where they are — some for power, others in hope, and others out of mental indolence. We urge members of the Labour Party like Conrad Jameson — men and women who are struggling to find a way out of the mess of reformist politics — to think hard about the case of the SPGB. Of course, there may be many disagreements to be discussed and it may be that ex-Labourites will find the unbending principles of the Socialist Party just as unacceptable as the lack of principles of the Labour Party. Unlike other political parties, membership of the SPGB involves more than filling in a form and paying a few quid. A party of principles can only retain its unity by only allowing in those who are fully with us. To the disillusioned, of whatever party they may be, the socialist message is clear: Take the trouble to consider the Socialist Party and its clear case for socialism; if you reject it, tell us why and perhaps we will be persuaded to reject it; if you agree, then the next move must be yours.

Steve Coleman

Kinnock in Wonderland (1983)

From the October 1983 issue of the Socialist Standard

Neil Kinnock, the bookmakers’ favourite to become the next Leader of the Labour Party, has a very simple explanation for the current economic depression in Britain. In a speech read to the Cardiff Fabian Society on 1 July he attributed it to a "deliberate Government policy", to a decision by the previous Tory government to pursue “policies of slump":

The Tories are caught in a trap of their own making. They set a target for reducing public spending and tax. Then they cut public spending. The economy shrinks. That reduces tax revenue and the Government has to increase borrowing. So they cut public spending some more and push up taxes. The economy slides, more people lose their jobs, and the crumble becomes a collapse, as the economy gets smaller and weaker.

The trap is their obsession about public spending. Our plans are based on using public spending for what it is good at — for investing in our industry, our people and our public services, for providing useful work for people and stable markets for the equipment they use. That is all commonsense.

We know how to achieve economic growth — how to put the country back to work. The Tories don’t.

So, for Kinnock, the present slump has been caused by the Tories’ policy of cutting government spending rather than being part of the depression phase of the economic cycle through which the world capitalist economy is currently passing. In fact, on this matter the Conservative Party can legitimately plead not guilty. The present slump is not their fault; it has not resulted from the policies they have chosen to pursue. The present slump in Britain is part of a world wide capitalist depression and the Tory governments in office since 1979 have merely passively adapted their policy to the world economic situation as any government, including Labour, would have had to do (and did do when they were in office during an earlier stage of the world depression).

If Kinnock’s explanation was the right one then, logically, the slump could be ended by a change of policy, either by a new government or even by the present Tory government. And this of course is the conclusion Kinnock wants to reach. As he put it in his election address to the voters in his constituency of Islwyn in South Wales:

We will expand the economy, by providing a measured increase in spending. Spending money creates jobs. If we increase pensions and child benefits, it means more spending power for the elderly and for parents, more bought in local shops, more orders for goods and more jobs in factories. More spending means that the economy will begin to expand; and growth will provide new wealth for higher wages and better living standards, the right climate for industry to invest and more resources for the public services.

At first sight this may seem plausible — "commonsense”, as Kinnock puts it. Since one of the features of a slump is a shrinking of the market, a lack of demand for goods, why not simply give people more money to spend? But it is not as simple as that. Slumps are provoked by the rate of profit having fallen too low to make it attractive enough for capitalists to continue investing as much in production as they had previously. The resulting cut back in production is at the same time a cutback in incomes derived from production (profits, wages, taxes). The shrinking of the market in a slump is thus a consequence of the slump, not its cause. Similarly, the “way out” can only come from a revival of profitability, not from an increase in purchasing power artificially pumped into the economy. And a revival of profitability is a slow process which will indeed come sooner or later, but which governments can do little to hasten beyond continuing to give priority to profits and profit-making.

In these circumstances what would be the effect of an increase in government spending such as advocated by Kinnock? That would depend on how it was financed. There are three ways in which a government obtains the money it spends: taxation (and in the end all taxes fall on property and property incomes, since taxes on wages and on articles consumed by wage-earners are ultimately passed on to the employer); borrowing (overwhelmingly also from property-owners since only they have the sums of money the government is likely to be interested in); and the printing press.

If the government’s increase in spending is financed by increased taxation this would inevitably come out of profits. Suppose the government used this extra money to “increase pensions and child benefits” — as Kinnock suggested in his election(eering) address. This would certainly mean “more spending power for the elderly and parents” but it would also mean less spending power for shareholders and capitalists. The extra spending by pensioners and parents would be offset by the decrease in spending by capitalists, either on their own consumption or in reinvesting in production. There would therefore be no overall increase in spending of the sort Kinnock wants to rely on to get the economy expanding again. The government would have simply robbed Peter to pay Paul, the overall level of demand in the economy remaining the same.

But suppose that the government used the extra money raised by taxation “for investing in our industry", as Kinnock suggested to the Cardiff Fabians. Once again the overall level of demand would remain the same, with the government simply investing, spending on productive activity, what private capitalist industry had previously been doing. It is indeed possible that the capitalists had been hoarding or lending to the financial market rather than themselves re-investing their profits in production, but this would have been due to the absence of profitable sales outlets. The fact that their profits were taxed away and re-invested by the government would not alter this situation for the government would find it just as difficult as the private capitalists would have done to sell the extra goods it had invested in. To the extent that it did succeed in selling them this could only be at the expense of sales by private capitalist industry. So once again the economy would not expand. The most that would happen would be a change in the pattern of what was produced.

The situation would be just the same if the government decided to finance this increased investment by borrowing, inevitably from private capitalists. For these latter would only be prepared to lend their capital rather than investing it themselves in production because they would have judged that no profits, or insufficient profits compared to the rate of interest on loan capital, were to be made from producing goods. As to the final theoretical option, even Kinnock has not suggested borrowing money at interest from private capitalists to increase pensions and child benefits!

In the end, then, if government spending is to have any chance of having the effect that Kinnock wants it to have, if it is to be a real injection of extra purchasing power into the economy rather than a mere redistribution of already existing purchasing power, it will have to be financed by using the printing press. This is what Kinnock is in effect advocating. But the result would not be to expand the economy, which will only begin to expand of its own accord when profit prospects improve; it would rather be to expand the rate at which prices are rising. For printing money in excess of what the economy needs at any particular time for its various transactions can only result in the depreciation of the currency, reflecting itself as a rise in the general price level.

Internally this does not matter too much since people can get used to the changing value of the paper tokens they use in their economic transactions, but it can have serious effects on the competitive position in the world market of the country which practises it. A higher rate of inflation than the world average, or than those of a country’s main commercial rivals, will mean that the prices of its exports will rise faster than those of its rivals and so become uncompetitive. This will reflect itself in falling sales and so in falling profits and then in falling output and rising unemployment.

In his speech to the Cardiff Fabians Kinnock cited the last Labour period of office from 1974-79 as an example of what a government “committed to planned growth" could do. Certainly the world depression had only just begun then and had still not reached its lowest point at the time the Callaghan government was voted out of office in 1979. It is however strange that Kinnock should refer back to this period since Callaghan is on record as having, on the basis of an actual experience of running capitalism, expressed the exact opposite view to that which Kinnock and the Labour Party, now in opposition, advance:

We used to think that you could just spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you, in all candour, that that option no longer exists and that in so far as it ever did exist, it only worked on each occasion since the war by injecting bigger doses of inflation into the economy, followed by higher levels of unemployment (The Times, 29 September 1976).

No wonder the Labour Party has lost all credibility. Out of office "More spending means the economy will begin to expand”; in office they suddenly discover that “that option no longer exists”. As a matter of fact it never did exist. The idea that a government can spend its way out of a depression is based on a complete misunderstanding of how capitalism works. But then the Labour Party never did understand capitalism. Kinnock doesn’t either, which must make him a typical Leader for the Labour Party.

Adam Buick

Hairtrigger society (1983)

From the October 1983 issue of the Socialist Standard

The shattered South Korean jet had hardly touched the bottom of the Sea of Japan before Ronald Reagan was at a microphone. his relentlessly supportive wife at his side, spouting the pious indignation which he typically offers as a public display of anger at his counterparts in villainy in the Kremlin:

This murder of innocent civilians is a serious international issue between the Soviet Union and civilised people everywhere who cherish individual rights and human life.

On successive days there was more of these unctuous outrages, which must have been puzzling for all those people in the central American states who have reason to think that Reagan is anything but one who cherishes their individual rights and lives. Except that there was no clapper board, it might have been a re-run of a poorer B movie from the president’s unforgettable past.

In Moscow too the cameras and the microphones were busy: "a rude and deliberate provocation” said the Novosti news agency; “. . . a worldwide, rabid anti- Soviet campaign" was how Tass described the American protests. Russian propaganda of course laid the blame onto American policies; the jet was an “intruder" flying into the “Soviet Union’s airspace" (a matter which we shall have more to say about) and the reaction was prudently defensive. According to British newspapers, this was supported by Russian workers, who reacted in a way typical of workers everywhere who are receptive of the nationalist propaganda of their masters:

What would be your reaction if somebody were to break into your house? (Woman in Moscow, Observer, 4 September 1983.)

I consider the reaction of the authorities quite sound. It’s impossible to violate the borders of states and that is why the border guards conducted themselves correctly. (Engineer. Moscow, Sunday Times. 4 September 1983.)

So it is really alright, then. Neither side is to blame because both acted reasonably and with a proper concern for human lives and safety — except that as a result a lot of people got killed, some of them perhaps not too interested in the conflict between the Russian and American power blocs nor in the niceties of scoring a propaganda advantage from human suffering. There is in fact a great deal more to it — more than the loss of the plane and the deaths, more than the official evasions and protests.

First, there is the issue of Russian — or American, or any other — airspace. It is generally assumed (ask those people in the Moscow' street, or in London or New York) that each state has some sort of ownership in the airspace above it and that other states can use it only by permission. But the borders of this airspace are arbitrary and imaginary, perhaps even more so than are those on land which are drawn by conferring politicians at what are known as peace conferences. Some years ago, when the first observation satellites began to orbit, the delicate question was asked, about how far upwards a state’s airspace extended. Was it limited to the earth’s atmosphere or did it go beyond — into interplanetary space, or inter-galactic, or out into the unknown blackness?

These were not idle questions for the "ownership" of airspace is really a matter of denying it to, and defending it against, other states, sometimes for commercial reasons but also for military purposes. The possible conflict over the division of outer space, in the times of spy satellites and orbiting nuclear weapons, is frighteningly active and relevant. The Russian government is quite sure that “their” airspace sits solid and inviolable above the concentrations of naval and military bases and the missile complexes around the Sea of Okhotsk which the South Korean jet flew over. This is one of the most heavily armed, one of the most sensitive, places in the world — and therefore one of the most dangerous. Apart from the airfields and the submarine bases the area includes inter-continental missile sites, aimed at America. According to the Guardian (6 September 1983), about 30 per cent of Russia’s entire strategic missile force is in that Far East region.

Neither Reagan nor the Russians paid any heed to the fact that the whole tragic incident came about because it concerned a segment of the world — there are many others, owned by various states — which is loaded with this equipment for instant, devastating warfare. Perhaps the airliner flew over the place by mistake; perhaps the Russians shot it down by mistake, but the reasons and the motivation behind it all were deliberate and conscious and completely sensible to anyone who accepts the priorities and the moralities of capitalism. This society is split into rival power blocs which are armed to the teeth — or should it be to the brains — with complex and horrifying weapons. Once armies were marched, or shunted about in trains, for days to do battle. Capitalism does it better now; modern war can be practically instantaneous and concluded, leaving the world in devastation, within days. The essence of this style of war is that fingers must be quick to the button and there is little time to recover from mistakes. This is the society which, claim Reagan and the Russian leaders, stands for human rights and safety.

It is likely that the reason for the airliner straying from its prescribed route — and for the American and Japanese tracking stations allowing it to do so — will not be publicly known, at least for some time. One theory is based on a report that South Korean aircraft on that route often took the short cut across the Russian bases to save fuel, rather than use the longer, safer, dog-leg route to the south. This theory has a familiar sound; it would not be the first time human lives have been put at risk, and lost, in the drive to produce cheaper goods and services. If the theory fits the facts, then the bodies in the sea can rest easy for they died in capitalism’s most cherished cause — making the highest profit in the shortest time with the least concern for human interests.

That is the authentic background to this sordid, brutal affair. Capitalism is a collection of massively armed camps because it has to be a society of conflict; it cannot work co-operatively because to do so would contradict its basic feature of producing wealth for profit. Under capitalism production — whether it is of material things like aeroplanes or services like a seat on a flight from Alaska to Seoul — is not carried on to satisfy human needs. It is carried on so that the class who own the airlines and the aircraft and the means of production and distribution at large may fulfil their role of the appropriation of profit. Wheat is grown, cars roll off the assembly line, aircraft fly, the working class are exploited, so that the owning class can realise a profit and accumulate further capital. This provides that class with an urgent interest in a number of things. First, the market where the commodities are sold — in the case of some areas of air travel, a highly competitive market. Second, sources of raw material like metal ore, rubber and oil. Third, the trade routes which connect these to each other and with the points of production.

Internationally the capitalist class dispute over these things and to protect their interests they have built up. through their state machines and with the support of the workers they exploit, a series of armed forces with a destructive power which, in the recent times of piston-engined aircraft and explosive missiles aimed by the human eye, would have seemed fantastic. The places where these weapons are held have to be extremely sensitive; foreign powers cannot be allowed to send their equipment and their military personnel into them without control. So they are defended by sophisticated and horrifyingly final destructive systems, one of which met the South Korean jet. The Russian government. like any other capitalist state, are unlikely to take chances with the safety of their bases; for their ruling class a lot more is at stake than a few hundred lives.

There is, then, nothing unique or even unusual about the shooting down of the airliner. Capitalism is a society of conflict and tension. The dead passengers in the jet were a sacrifice to capitalism’s inability to exist in peace. The remedies offered by both sides — a ban on the operations of Aeroflot, a cooling off in provocation from America — did not even pretend to approach the reality of the matter. All over the world, human beings are at work scanning screens, priming weapons, fingering buttons, checking, servicing, training — for the time when it will all be let loose so that one section of the master class can triumph over another. This is a hairtrigger society which can turn a mistake into a catastrophe.

Ivan

50 Years Ago: Are We Progressing? (1983)

The 50 Years Ago column from the October 1983 issue of the Socialist Standard

The two theories found most frequently among those who will not listen to the Socialist case are not confined to any one political party, but are common among Liberals and Tories, Labourites and Communists. The first is the theory that conscious organised action to achieve Socialism is not necessary because, in spite of appearances, “things are getting constantly better and better.”

The second is the theory that conscious organised action need not be taken, because everything will go on getting worse and worse until there is a really terrifying crash “which will simply force people to do something”.

Yet both theories are unsound — neither the gradual accumulation of social reforms, nor the periodical outbursts of violence solves the problems which face us. To see that this is so it is only necessary to glance over the events of the past 30 years. In spite of wars and upheavals, Labour governments and dictatorships, capitalism persists without any essential change for better or worse. It makes a little adjustment here and another there, it replaces one set of rulers by another set, it calls things by different names, but the same essential capitalism is here with us yet.

(From an editorial: “Are we Progressing? Hopes and hears for Socialism”, Socialist Standard, October 1933)

Economical death (1983)

From the October 1983 issue of the Socialist Standard

From The Guardian, 28 July, 1983:

“The most economical method of disposing of the dead in nuclear war, would be by mass burial", Mr. Alan Bullett, Kent’s deputy surveyor, told the Cremation Society conference at Harrogate yesterday. We should be planning them now. A mass grave of “manageable proportions" would be up to 50 metres long, 4 metres wide, and 2.5 metres deep, to accommodate five layers of 200 bodies — 1000 bodies in all . . . Mr. Bullett drew' some guidance from Ministry of Agriculture advice on the burning of animal carcasses after an outbreak of foot and mouth disease . . . Crematoriums could be used as radiation sickness took its toll. A member of the audience said that bodies needed a hard base for loading into a crematorium. If coffins were not available, a sheet of corrugated iron would do . . . Deaths occurring up to 3.3 miles from the burst would leave 200,000 bodies for disposal, with more to come from radiation sickness. The Government has given local authorities the task of disposal.

What went wrong? (1983)

From the October 1983 issue of the Socialist Standard

When the Labour Party won the 1945 general election they declared their confidence in their ability to solve the problems of British capitalism, the main plank in their programme being the nationalisation of coal, steel, the railways, the Bank of England and other industries. They promised full employment, stable prices, expanding production and a rising standard of living but soon came into difficulties and adopted the first of the post-war incomes policies. Prices rose sharply, the export of British manufactures lost ground and in 1949 they sought another remedy in devaluing the pound from $4.00 to $2.80. It did not save them and in 1951 the Tories came to power and remained in office until 1964, declared by the Labour Party to be Thirteen Wasted Years.

At the 1963 Labour Party conference, Harold Wilson announced a new cure-all — the technological revolution — spelled out in the Party's 1964 election programme, Let's Go With Labour For The New Britain:

The world wants it and would welcome it. The British people want it, deserve it, and urgently need it.

A new Britain — mobilising the resources of technology under a national plan; harnessing our national wealth in brains, our genius for scientific invention and medical discovery; reversing the decline of thirteen years; affording a new opportunity to equal, and if possible, surpass, the roaring progress of other western powers, while Tory Britain has moved sideways, backwards but seldom forwards.

The country needs fresh and virile leadership. Labour is ready. Poised to bring its plans into instant operation. Impatient to apply the New Thinking that will end the chaos and sterility.

After much consultation with industry and the unions, and collection of information, this heady stuff was embodied in a government publication, the National Plan, running to nearly 500 pages, all of it summarised in a Labour Party pamphlet Target 1970. The trade union leader Prank Cousins was appointed Minister of Technology. According to Target 1970 there was to be a 25 per cent growth in the national income, wages were to rise by 20 per cent, houses would be built at the rate of 500,000 a year, the output of manufactured goods was to go up by about 25 per cent and 800,000 new jobs were to be created. Steel output was to go up from 25,820,000 tons in 1964 to 30,750,000 tons in 1970 (National Plan p. 142).

In 1965, after a year in office, George Brown spoke optimistically at the Party Conference about the National Plan for which he had been responsible:

Even though we are not yet on sound ground, it has been an incredible change in the situation. The prospects now compared with what they were last October, the situation now compared with what it was last October. are almost unbelievably different. (Conference Report, p. 222.)

His excuse for difficulties that had arisen or might arise was that though the Labour government knew the previous Tory government had left a mess behind them, it was much more than they had thought. The Tories had not only left a mess but had concealed from their successors how great it was: “We did not know the full capacity of our predecessors for deception." In 1968, after four years in office, the Labour Party published A Dictionary of Achievement, prefaced with the claim: “Since Labour came to power in 1964, the whole country has been experiencing a quiet revolution. In almost every aspect of government, a ferment of new ideas has been at work". It gave details about aspects of the Plan that had been put into operation but almost nothing about the results.

As it turned out, when 1970 arrived (and the Labour government lost the election) most of the planned targets had not been reached, growth in national production was only 17 per cent against the planned 25 per cent. Wages had indeed gone up but prices had risen not by 35 per cent. The rise in real wages was under 10 per cent. (There was of course nothing in the Plan about putting up prices.) Instead of the 500,000 new houses a year the average number completed in the period 1965-1970 was under 400,000 a year. In 1970 it was 364,000, actually below the number in 1964. The growth in national production under the Plan was less than in preceding years under the Tories and it has continued to grow more slowly under later Labour and Tory governments.

Exports of manufactured goods continued to lose ground in world markets and to remedy it there was another devaluation of the pound from $2.80 to $2.40. (Nothing about this, either, in the Plan). When Labour lost office in June 1970 unemployment was nearly 200,000 higher than when they took power in October 1964.

So why did it all go wrong? Basically it is because the Labour planners do not understand how capitalism operates. They fail to realise that the quantity of goods that a company or industry can go on producing is not determined simply by its productive capacity but by the quantity that can be sold at a profit — that is by market conditions generally. And market conditions cannot be controlled, or even forecast, with any certainty. The quantity that can be sold at a profit not only depends on the completely uncontrolled and unpredictable state of world markets but also the sales of one industry are dependent on what is happening in other industries. It only needs a few industries — steel, motor cars, shipbuilding, textiles — to overproduce for their particular markets and consequently to cut back their investment and output, for other industries to be adversely affected.

In drafting the Plan the Labour government approached companies and organisations asking them to estimate future demand and their capacity to increase production up to the expected level. But how could they know? There are dozens of governmental and private organisations engaged in forecasting. Did any of them in say 1979 forecast that by 1983 there would be over three million unemployed? Or did any of them foresee that in the early 1970s the oil exporting countries would band together to use their monopoly to double and treble oil prices? In anticipation of a growing demand for steel Labour (and Tory) governments doubled the output of the British Steel Corporation, only to find that the world market for steel had slumped and they had to cut production down again.

Because the Labour Government’s National Plan was “national”, it had to be constructed by combining the separate plans of each industry and company and trying to adjust these to the comprehensive whole. This assumes that the companies themselves know what is going to happen. What success did the steel, motor car and shipbuilding industries have at peering into the future? None at all. The fallacies of planning were exposed by Frank S. McFadzean, a managing director of the Royal Dutch Shell group. The group was asked among other things to tell the Labour government in 1964 what would be its future investment in oil tankers, how much it would be and where it would be. It was impossible to answer the question:

Its investment decisions are influenced by the investment decisions of others — British, Norwegian. Swedish, Dutch and Chinese shipowners for example. If these latter decide to charter at low rates Shell may build no tankers at all. (Article on a volume of McFadzean’s lectures. Financial Times 6 April 1969.)

McFadzean was in an exceptionally good poisition to expose the futility of the National Plan because Shell has for years spent millions of pounds on its own attempts to foretell the future of the market for oil and other products of the group. This was his verdict:

Except in the very short period ahead, we are not really very impressed by the detailed results shown by our plans. It will be the sheerest fluke if ever we achieve them. Looking back to 1962 and what we then prognosticated . . .  we were wrong on many counts.

We were wrong on volumes, we were wrong on prices, we were particularly wide of the mark on our estimates of the demand for and price of naptha, we were wrong on our cost projections, we were wrong on the level of investment which we would need to make. We did not fully foresee the increase in the size of tankers, we did not foresee the extent of Libya’s crude oil production; we did not foresee the dominant role that natural gas would play in Holland. . . we did not foresee the closure of the Suez Canal.

If Shell with all their experience could not plan ahead with confidence for one industry what hope was there or is there that a government could do it for a combination of all the industries?

Capitalism is inherently unstable and its periodic descent into depressions is inevitable, as shown by the experience of a couple of centuries. From 1945 to the mid-1970s the Labour and Tory leaders all believed that they had found a way to maintain boom conditions and full employment indefinitely by the use of the fallacious doctrines of J. M. Keynes. With the leadership of Thatcher most of the Tories have now abandoned Keynes and adopted the equally spurious doctrine of monetarism and the “free market”, which are just as incapable as the Keynesian doctrines of maintaining boom conditions and full employment.

Capitalism goes its own way, in accordance with its structure and its own economic laws, with its inevitable cycle of expansion and contraction. Capitalists expand investment and production when it is profitable to do so. and contract both when it is not profitable. Neither National Plans nor free market forces alter the essential conditions under which capitalism operates.

Edgar Hardcastle