Marchmont Street Community Centre, Marchmont Street, London

Date: 26 July1986

Speaker: Comrade E. Hardy

Chairman: Comrade Cyril May
Lecture Number One: Prices, Wages and Unemployment.
Introduction: Similarity of Capitalist Countries

Comrades and friends.

You know the subject we will be discussing today; Prices, Wages and Unemployment.

I want to draw your attention to something you know quite well.

If you listen to politicians and people in the media talking about foreign countries you will notice that they are very fond of emphasising differences between one country and another. So much so, that when they describe the way we live here in Britain to the way people live in some other countries, we might suppose that both populations lived in entirely different worlds.

I’m going to take the opposite line. I’m going to draw attention to similarities between the some hundred and sixty odd countries in the world.

Firstly, if you go to any one of these countries you will find there is one thing they all have in common and that is that everything there for people to exist and reproduce their lives has a price.

Secondly, whatever people need to exist has to be paid for. That of course means, that for every country in the world there is a monetary system, because the price people pay for anything they need to live on is in terms of money.

Thirdly you will notice that while there are various alternative ways of getting a living that is, getting hold of money, the great bulk of the population in this country forms a working class. Workers do not own the means of production; factories, offices, transport systems and so on. And to obtain money to buy what they and their families need requires these workers to get a wage or salary. And to get a wage or salary requires being employed and to be employed requires an employer. You will find the same thing in all the other countries of the world. You will also notice that the more money a person has, the more he can buy. In other words in every country in the world you will find rich and poor; some people will have a lot of money, and some people will have very little.

And fourthly you will notice this; if a person is a member of the working class, that is to say, if he or she depends for getting their living on having a wage or salary, that is, as an employee, they may run into the opposite side of the situation; they may lose their job, they may become unemployed.

In every country in the world what the workers produce, the food, clothing, shelter, motor cars and all the rest of it, does not belong to them, but belongs to their employer, whether that employer is an individual or a company, or a government department in a so-called State Industry. The social wealth workers produce belongs to their employer.

So we have got four very important aspects about people’s lives, which are, more or less identical in every part of the world that you may choose to go to.

Now this system with its prices, money, wages and employment has a name. It is called Capitalism. And it is called Capitalism because the employers, the capitalists, invest their money, their capital, in setting up factories and mines, offices, plant, transport and communication systems for the purpose of making a profit. And this feature of production exists all over the world.
Rising Prices

Now, before I go on to deal with what determines prices, the price of each commodity, I want to get rid of an idea which is very popular among a lot of people today.

For most of the lives of people now living in this country today, prices have been going up for fifty years or more. A lot of people believe, as do a lot of economists, that it is natural and inevitable for prices to go up. It isn’t natural or inevitable and it isn’t true.

If you look at the last two hundred years in this country, you’ll find that the total period when prices were either stable that is, neither, going up nor down, or when they were falling; greatly out-number the years in which prices were rising.

The figures work out something like this; that, prices have been rising in the last two hundred years for about eighty years, and for the remaining one hundred and twenty years in the last two hundred, they have either been stable or they have been falling. So I repeat it is not natural and inevitable for prices to rise.

I shall come back to this later, but, I shall just remind you here, that whether the general price level is rising or falling or stable, depends on the Government and nobody else. Rising prices are not due to wages, or profit or anything like this. Price rises is an act of the Government. I will explain why this happens later on, but I’ll just repeat this, if the Government wants a stable price level, they can have it, if they want a rise in price levels they can have it, if they want a falling price level they can have it. Inflation, deflation or a stable currency is a matter for governments to which workers have no interest. The interest of workers economically within capitalism is the wages and salaries they receive. Politically, for the working class, the issue resolves around the abolition of the wages system.
Labour Theory of Value and Prices

I now come to the question of the determination of price. What is it that determines the price of the commodities, the price that you have to pay in all the hundred and sixty countries in the world, if you want to get hold of something?

I suppose everybody must have wondered at some time or other, why for example, a pound of diamonds or gold, costs ever so much more, hundreds of times more than a pound of bread, or coal, and why a pint of whiskey costs so much more than a pint of water.

Now some economists have tried to explain it on the grounds of usefulness, Now, I defy anyone to prove to me that diamonds and gold and whiskey are more useful than bread, or even coal, I just don’t believe it and I don’t think anybody who gives it a moments thought believes it to be true either.

Karl Marx provided the explanation as to why different articles, commodities as he would call them, have high prices and some low prices, and so on. His explanation was in what he called his LABOUR THEORY OF VALUE.

The Labour Theory of Value is quite a simple thing. It is based on common-sense. And that is this; if one article takes say twenty hours of labour to produce, and another one takes forty hours, then the one taking forty hours will have twice as much value, will be twice as valuable, in Marx’s terms, as the one which was produced in only half the number of hours.

And in the early days of capitalism, before there was any development of machinery it was roughly true, that all commodities did sell at their value, that’s to say their price and their value were roughly the same. So that, if one article cost twenty hours socially necessary labour to produce, and another one only cost ten hours, then first one would have a price twice as much as the price of the second one.

In the modern world things have become different, but it is very important that you should get this basic idea in your mind, that price is related to the number of socially necessary hours required to produce the different commodities.

The number of socially necessary hours required to produce, for example, diamonds is very high, whilst the number of hours to produce a pound of bread is very much less, which would explain roughly the difference in their price. But in the modern world with the development of machinery, the thing has become more complicated, as Marx explained.

While time won’t permit me to go into all the details of the explanation, it is sufficient to say, that in the modern world some commodities always sell above their value, and some commodities always sell below their value. If you want a little bit of background to this matter, the industries in which there are a large number of workers employed, and very little machinery, sell below their value, and the industries in which there is a lot of machinery, and relatively few workers, go above their value.

And, as I say, it would take too long to go into the details. However, you can look it up in Marx’s CAPITAL (see volume III ch. IX Formation of a General Rate of Profit(Average Rate of Profit) and transformation of the values of commodities into Prices of Production pp154 – 172 Lawrence & Wishart 1971)) and you can find the explanation of this. Having said this, value and therefore price is related to the number of hours of socially necessary labour required to produce a commodity.

However, you have got to think carefully about what Marx meant, when he related value to the socially necessary number of hours which went into the production of a commodity.

If we say, at a given stage of the development of industry and machinery and efficiency, the general average throughout any particular industry, say, bicycles, showed that a bicycle could be produced in say, five hundred hours on average, and its price related to the five hundred hours, you might get a very inefficient firm which took a thousand hours, well it would not do them any good.

The extra five hundred hours they put in are wasted because obviously if some people are selling bicycles related to five hundred hours labour and the very inefficient firm comes along and says look it takes a thousand hours and we want to sell them at double the price then they won’t be able to sell their bicycles and will be out of business the next week. So it’s the socially necessary number of hours that count.

Also, and this is very important, if you try to follow what the journalists write, and people among the media tell you about increased productivity you will find that most of them know nothing at all about it and have got the picture all wrong. What is relevant here is this; Marx insisted that the amount of socially necessary labour required to produce anything, is all the labour required to produce it, right from the beginning of the process to the end.

Some people have erroneously written that the number of socially necessary hours labour required to produce a loaf of bread is the number of hours spent by the men in the bake-house. Well it just is not true. Most of the labour required to produce a loaf of bread starts with sowing the grain and getting in the crop, milling it and transporting it and putting up the buildings and the labour spent on the machinery in the bake-house long before the bake-house workers get to baking it. In short, most of the labour required to produce a loaf of bread has taken place before the bakers, the men in the bake- house get hold of it.

This is something you have to bear in mind in looking at Marx’s Labour Theory of Value.

Another point that is particularly important, is that, taking factory industry as typical, the general tendency is as the years go by, the number of hours of socially necessary labour required to produce a given commodity declines. In other words the industry with more machinery becomes more efficient. If say ten years ago it took a hundred hours labour to produce something, it might in the last ten years have fallen, perhaps from a hundred to ninety.

That is true of the factory industries, but it is not true of what are called the extractive industries, of which coal is a typical example.

A hundred years ago, people who wanted to start coal mining in this country, just needed a few picks and shovels, and some pit props, a few things like that, and the coal was right near the surface, and they could keep mining the coal relatively easily. Now of course you have got mines going down a mile to three miles under ground and requiring an enormous amount of labour, that was not necessary a hundred years ago. I have no doubt whatever that it takes at least as much labour to produce a ton of coal now as it did a hundred years ago.

As a production manager of the Coal Board once said, in the coal industry you have got to run faster and faster to keep where you are. The coal industry is not getting ahead and is fighting against adverse conditions. And that is true of extractive industry generally.

There are a few other things to remember. While Marx’s Labour Theory of Value is a good guide to prices generally there are some things that don’t come into the picture at all.

The price that some millionaire collector will pay for a Rembrandt picture has nothing to do with capitalist factory production. Capitalist production is concerned with the things that can be produced and reproduced, not what some collector will be willing to pay, because it happens to be the only unique painting in the world and he wants to get hold of it.

Also, monopoly comes into the picture. If some interested producers within an industry can grab all the supplies of some article they can put up the price almost without limit. However, they don’t stay up.

You will have noticed from the example of that, the OPEC oil producing countries got together a few years ago and said look we can squeeze the rest of the world, we can withhold oil and they did it, and they trebled and multiplied oil prices by four. Well the effect of the monopoly is of course, is that all sorts of other people will immediately move into the field and now you have got the reverse, you have now got the price of oil falling to ridiculous low limits. So remember that these and a number of other things fall outside the field of the Labour Theory of Value in relation to prices.
The Labour Theory of Value and Wages

The next stage is that Marx applied his Labour Theory of Value to wages. Anti-Marxist economists say, and most workers believe, that if you work a forty hour, five day week, and get a, say two hundred pound wage for it, that what the employer is paying you for, is, for your forty hours work.

Marx showed that this just simply is not true.

Here is an example which explains the point I am making about the application of the Labour Theory of Value to wages. By moving out of the field of wages, and into the field of slavery, imagine the slave owner who owns some slaves and sets them to work, producing food Suppose the slave owner found that at the end of the harvest that the amount of food the slaves produced was only just sufficient to feed them, and there was nothing left over, for the slave owner. He would say that this is no good.

The slave owner would either try to increase their output, or he’d try to get them to eat less. But there are limits to the amount he can get them to eat less, because, if he wants slaves to work they have still got to be healthy, and more or less well fed. You can bring this parallel example into the field of wages.

If as the economists say an employer pays you a fair wage for your forty hours work and most workers believe it, most workers say, well if our union negotiated it, then that’s a fair wage, that’s ok. Well, if that were true where does the employer get his profit from? If he’s paying a fair wage for the forty hours work, there isn’t any surplus, and, as Marx showed, this doesn’t make sense. What Marx showed, was that, what the worker sells, was not his forty hours of work, but what Marx called his Labour Power, his mental and physical energy to work.

What the workers do when they’re negotiating over wages with their employer is to sell to the employer their mental and physical energy, their Labour Power, for the whole of the week, the whole five days of the week.

The workers then gets to work, and like the slaves, who have to be able to produce more than they can consume themselves, the working class produce more in a week than they consume as wages. You can put it roughly like this; you can say that perhaps four days out of the five, the workers are producing the equivalent of their own wages. But they’ve sold their Labour Power to the employer for five days, not four, so the employer has the use of their energies for the fifth day as well.

This is what Marx called Unpaid Labour. The employer gets this labour for nothing. It is the source of the employer’s unearned income of rent, interest and profit, and there is no other way, of accounting for the profit that the capitalist gets, by going into business, and which, is the purpose of it.

A writer in the FINANCIAL TIMES a month or so ago, wrote an article attacking profit sharing, and in it he made a statement that what he called “the labour commodity” is just like any other commodity because there’s no difference between labour or say a bale of cotton, or a bus or something like that. So I wrote to him and I said, if this is true where do the employers get their profit from and why don’t they stop employing workers and simply go on buying cotton?

And I got a rather astonishing reply from the man. He wrote back and said: “yes, I’m writing with my tongue in my cheek.” In other words, he knew more of what he was writing, than he was going to tell his readers of the FINANCIAL TIMES.
Determination of Wages

We now come to the question as to what is it that actually determines the amount of money wages that workers get. Why do some workers get £200 a week, others £150 or £140 a week? Even the same workers at different times may get different money wages?

It is important to bear in mind the background of this. Whatever wage the employer pays, he wants the unpaid labour of the worker to be as large as possible, and the money wage to be as low as possible. The workers on the same reason are pressing in the opposite direction; the workers are trying to push wages up the employer trying to put them down.

From now on the discussion will be in terms of real wages. Suppose prices went up by 10% and wages went up by 10%; the real wage, what the wages would buy, are exactly the same as it was before. So to make sense of this, in times of changing price levels, the only thing to do, is to talk in terms of real wages.

What determines the amount of real wages, that is, what the workers can buy with their wages?

There are a lot of really impossible theories about this. There is one impossible theory, that money wages simply follow prices, so if prices go up, wages go up, prices go down, and wages go down. Well if this were true, you would be faced with the situation that what the workers can buy now never changes; its exactly the same as it was ten, twenty or fifty or a hundred years ago, which if one looks up the facts one would find this is just absurd.

There is even a sillier theory that real wages go on falling. In other words as time goes by the workers get worse and worse off. You have only got to put this in reverse, read what was the condition of the workers in this country say during the “hungry forties” of the Nineteenth century and suppose they started to get less and less real wages so the position of the working class would become worse and worse for each subsequent generation. Well the working class would now be dead but they are not. It is just wishful thinking by people who do not look into things correctly but it has nothing to do with Marx.

That real wages continually fall is simply not true. I know a good answer to this fallacious argument. Information has been collected about the movement of real wages between 1850 and 1914. Now you see according to the first theory the real wages in 1914 would be exactly the same as in 1850, and according to the even more impossible theory, real wages in 1914 would be much lower than in 1850. Actually real wages, the average real wages of all the workers in this country, rose in those fifty four years by 90%. These figures are based on known information that’s easily verifiable. Various people have gone into this question and all have come to much the same conclusion.

There is another superficial theory that looks as if it must be true. There is a theory that falling prices must be good for the workers. If prices fall, what the workers wages will buy must go up.

There has been only one considerable period in this century that is between 1920 to 1933, when prices were falling. If this theory were true, the workers must have gained quite a lot when prices fell by nearly a half, between 1920 and 1933. Actually, when you look at this, it is one of the worst periods in this century for workers’ real wages. The theory stated here like the others is quite untrue.

A particular form of that theory, that falling prices must be good for the workers, is the idea that rent control must be good for the workers. The workers say, well if the government passes a law to prevent the landlord putting up my rent, then that must be good for me.

Again there is plenty of information on this subject.

During and after the First World War most of the countries in Europe introduced rent control. The International Labour Office set up a committee to enquire what the effect of it would be. They found, that in Germany and Austria and other countries rents were exceedingly low and, in fact, a lot of workers weren’t paying any rent at all. They said well how much are the workers getting out of this, and they published the facts and they said the working class gained nothing whatever.

The people who gained were the employers because, under the conditions of that time, they were able to keep wages down. The workers gained nothing, and the people who lost out were the landlords, as was of course, the intention of this policy.

Much the same thing can be shown in this country but remember you have to look at what actually does determine the level of real wages, to get the thing in proper perspective.

Now Marx gave the answer to this. He summarized it briefly in the pamphlet, VALUE PRICE AND PROFIT, where he said, that you have got the workers all the time pressing for wages to go up and employers pressing for wages to go down,

Marx said the matter resolves itself into a question of the respective powers of the combatants. And he recognised that the situation changed; that at one time the workers may have a bit of an advantage and at another time the employers may have but it depends on the he called the respective powers of the combatants.

Now here is a very interesting theme, Marx got the theories perfectly right and that is still true, so, when Marx looked into what he thought might be the prospects for wages he got it all wrong.

It doesn’t mean that he had forgotten his own summery of the situation. But he looked at the condition of the workers in 1848 and even as late as 1855 and he noticed in particular that there were practically no effective trade unions. Where there were trade unions and a trade depression came on the normal thing was for the union just to pack up and disappear. In a depression they had no effect at all. Looking at this situation, Marx came to the conclusion that on the whole, he thought that real wages were going to fall, the tendency was downward. Well he was quite wrong.

But, you see it was a very reasonable thing to say in the circumstances. He could not for-see the way unions developed, and became more effective. Trade Unions grew in size and became more effective, and the growth of the trade unions was to make a difference by the end of the century. Interestingly, his colleague Frederick Engels, shared Marx view at that time; it was Engel’s, as well as Marx, thought that the tendency was for wages to fall.

Looking back over the half-century, Engels writing in 1892 noted what was happening to trade unions. He watched the unions grow, and he watched wages rising. Engels referred, to what he called the remarkable improvement, in the condition of workers in the big trade unions. He could see it happening and it was true. And you remember I gave you that figure that the average real wages of workers between 1850 and 1914 rose by 90%.

Engels was in fact saying, well, our judgment in the middle of the century was wrong, we thought that wages were going down and they have in fact gone up, largely due to the growth and increased effectiveness of the trade unions. Of course there are some other factors entering in too.

But now let us look at what determines wages in the modern world. The two main factors are first, whether capitalism is in a stage of expansion, and boom, or whether it is a stage of falling trade and depression and secondly the effectiveness of trade union organisation and their intelligent use of it.

These are the two factors that determine the rise or fall of real wages. If those two factors are both relatively favourable to the workers, then wages will go up, if they are unfavourable, then they won’t go up, they will go down. And remember this, that the big rise of real wages in the last half of the nineteenth century, much of it was concentrated round the 1850’s and 1860’s, when using the well known phrase, Britain was the workshop of the world. In other words, British capitalism was booming, expanding more-or-less all the time.

And see how this works in practice. Suppose trade is booming the employers are making a lot of profits. The trade unions come along and make a wage claim and threaten the employer. Look, if you don’t give us it, we’ll come out on strike. The employer does not want a strike at that moment; he doesn’t want his flow of profits interfered with, so they make a concession.

Now when you look at the reverse position, when there is a depression on, the employee’s then go along to the employer and say if you don’t give us more wages we will shut your factory and he says don’t bother I’m shutting it anyway. And that’s the answer to it. So what behoves, trade unions, is to behave with intelligence so not to suppose that to stay out on strike for a year they can starve the employer into submission or some nonsense like that, but to note that if they can’t win quickly, they are not going to win at all, wait for the conditions to change.

Having stated the principle that the two factors which governs the amount of real wages, remember this, those two factors can operate, whether prices are stable, whether they are rising or whether they are falling, in other words you can have real wages rising, when prices are rising, or falling when prices are rising or any of the other situations. But keep your eyes on the two factors, capitalism’s state of trade, whether its expanding or in depression and the state of trade union organization.

Just to complete this section of the lecture, I would say this, prices have been rising for the past fifty years in this country and in most of the last fifty years wages, money wages, have risen more than prices, so, that the average real wages of the workers now, is considerably, and very considerably more than it was in 1938.
Boom and Slump

When I talk about, boom and slump, it isn’t only the question of a general world-wide boom and depression. This was the case in 1979. Then you got more or less a world-wide falling back of trade and production which went on for three or four years in some countries. The situation has more or less recovered. However in Britain, although production has gone up again, it has had no effect on the unemployment rate. The important thing to remember is that you have to separate a world-wide depression from the tradition of a particular country.

Now it just happens that British capitalism which used to rule the roost has been going down, all this century. You must have seen articles and statements by politicians about the decline of British manufacturers and about they must have lost about a million workers and this sort of thing, Well, in 1900 British exports of manufacturers was 33% of the total world export of manufacturers and even as late a 1931 British exports of manufacturers was the largest in the world.

Well, considering the figure of 33% in 1900, it has been falling all the time, and is now down to about 7%. So in addition to what might be the result of a world-wide depression on British unemployment, you’ve got other unemployment arising out of the fact that British capitalism has been losing its relative position on the world market.

There is another factor to remember. The Government Statistical Offices used to publish figures every year. These figures included the total profits in the manufacturing industry, and the total wages bill in the manufacturing industry. This gave an excellent basis for comparing profits with wages. In 1950 manufacturing profits were 50% of the total wages bill. This figure has been falling. By 1970 it was down to 29%. In other words the British manufacturers were losing ground, they were unable to compete with foreigners and this loss of profit was the consequence.

We now come to unemployment. You have a world depression from which all countries to some extent suffer unemployment. And you have the economic decline of British capitalism in some major industries which also effects unemployment. However what is the general cause of unemployment in the capitalist world at any time?

And here again we are indebted to Marx.

Marx pointed out that the capitalists of the world are competing with each other, like, capitalists in the clothing industry are all competing for whatever the market there is, anywhere in the world. As Marx pointed out, the share of the market goes to the one who can produce most cheaply, and the one who can produce most cheaply, is the one generally speaking who has the most modernized and mechanised production. In other words they introduce labour saving machinery to increase their efficiency.

However, you will notice that when they talk of introducing labour saving machinery what they mean is that in the year before they introduced the machinery they were employing 1000 workers but after introducing the machinery they were now employing only 900 workers. 100 workers had been made unemployed

Now this is going on all the time in capitalism quite apart from the rise and fall of unemployment associated with boom and depression. So capitalism is as it were always squeezing some workers out of jobs into unemployment.

If you were to ask the average politician, according to which party he belong to, or, ask the average economist, or a political commentator, they will, say to you: “ah, it depends on the sort of government you’ve got”. If you get an uncaring woman like Mrs Thatcher, you’re going to have half-a-million unemployed but if you get somebody else like a Labour Prime Minister a different type, with a soft heart, then unemployment will simply disappear.

If this were true, it means that unemployment depends on the government of the day. If unemployment goes up, the government must have done caused it to rise. Well, let me tell you, a certain party was in power, four times, between 1929, and 1959, over fifty years, and every one of the four times in which they were in power, unemployment went up, the first time it went up enormously, and the last time, it went up from six hundred thousand to one million, three hundred thousand. And that was the Labour Government. Well if the Labour Government had a solution for unemployment where was this policy, all these times?

No government wants unemployment to rise, neither Labour nor Tory. They and the capitalists would love to see all the two and a half million unemployed workers producing lovely profits for them. They cannot do it. Capitalism just doesn’t let them. Governments do not control unemployment.

Unemployment takes its own course. No matter what governments do, whatever policy, they may chose to introduce, unemployment will go on rising and falling, it always has, and it will continue to do so; so long as capitalism lasts.

But now you see, all governments are in a dilemma. They will all like to see unemployment fall If British industry, loses its leading position and becomes, relatively more and more inefficient, you get more and more unemployment because the capitalists cannot secure the markets. So you get unemployment that way if the government does nothing.

Suppose the government comes in and brings tax concessions and so on, to encourage firms to introduce more machinery and modernise firms. The effect of introducing labour saving machinery will have the consequence of putting workers out of work. So, whatever the government does and whatever industry does, there is going to be unemployed workers. They have got no choice about it. It’s a dilemma they face and they simply have no way out of it.

Of course, when parties are in opposition they promise anything and everything. They promise they’ll solve unemployment when they get back into power. But it is entirely bogus. Politicians and their economists cannot prevent unemployment.
Capitalist efficiency and competition

Some years ago Mr Macgregor, perhaps then the most hated man in Britain, said he was going to get rid of forty thousand miners by closing down uneconomic pits. And then there was the recent case of Labour MPs who couldn’t contain themselves when they learnt that British Rail was going to get rid of eight thousand railway men.

Now take your mind back a few years to1965, when the Labour Party introduced what they called their National Plan.

The National plan was about five hundred pages long and was adopted by the Labour Government as their official policy. It was produced by Harold Wilson, the Prime Minister, to revitalise British Industry, reverse the decline of manufacture, get everything efficient and recapture the markets and all the rest of it. Well, one of the first things you’ve got to notice is that Mrs Thatcher understands very little about capitalism while Mr Kinnock and his Labour Party understand even less.

In 1965 the Labour Government assumed that there would never be any problem of unemployment. And in the National Plan they said that with no unemployment there would, in fact, be a shortage of eight hundred thousand workers.

Labour believed the problem they faced was to find eight hundred thousand more workers. They concluded that four hundred thousand or so will come out of the increase in population with four hundred thousand school leavers coming into the market between 1965 and 1970. The shortfall would be met by increasing output per head, that is, by getting nine workers to do the work done by ten before. They believed that that would cover the shortfall of two hundred thousand workers by the 1970’s. They also planned to increase total production by 25%, put up wages by 20%, build five hundred thousand houses a year, and keep prices stable.

Well, everything went wrong with Labour’ National Plan. Total production didn’t go up by 25%, it went up by about 10% output. Wages did go up quite well; they went up about two thirds of the planned level. Prices didn’t keep stable, they went up by 31% and at the end of the road it wasn’t that they were short of two hundred thousand workers and would have to look for them somewhere, but unemployment had gone up by two hundred thousand. In short, the whole plan became unstuck, but what was very interesting about the National Plan was the case of coal.

In Labour’s plan they proposed to get rid of two hundred and forty thousand agricultural workers, they were going to re-organize agriculture, they were going to put more machinery on farms, increase output and so on. They were also going to get rid of ninety-nine thousand railway men and they were going to get rid of a hundred and seventy nine thousand miners not the mere forty thousand that Mr Macgregor wanted. And the reason was profit as it was with Mr Macgregor. When Macgregor came along in 1984, he said, look, we’ve got to close down unprofitable pits and this is exactly the same thinking contained in the National Plan the Labour Government enacted in 1965.

The Minister who was in charge of the National Plan was George Brown, later to become Lord George Brown. What was interesting was that when George Brown outlined this National Plan to the Labour Party conference in 1965, he told them what was going to happen. He said look, we’re going to release a hundred and seventy thousand miners, a hundred and forty thousand agricultural workers, and ninety-nine thousand railwaymen but by the way there is a shortage of labour in the economy which will be absorbed by the unemployed workers. He was not booed off stage. In fact he got a standing ovation for it.

In other words, the Labour delegates believed like he did, that there was a shortage of labour, and that they hadn’t any unemployment. They were wrong. The Labour Government made all these workers redundant but there was not spare capacity in the labour market to absorb them. They joined what Marx called the Industrial reserve army of the unemployed.

Some complained about the unfairness of the honours list. George Brown became Lord George Brown for the amount of miners made redundant in the National Plan while Mr Macgregor only got a knighthood for what he did in the service of British capitalism.
The Pearson Group.

I now want to leave capitalism in general and come to a particular company, The Pearson Group. I would describe it as a sort of mini capitalism or if you like a photo kit of British capitalism.

The Pearson Group is a rather unusual company. It’s large but not very large, but it’s unusual in that unlike most companies who work in a particular industry, wholly or mainly in this country, the Pearson Group works on the continent, Australia, North America and Asia. And they operate in engineering, oil and gas. They publish Penguin books and newspapers and journals including the FINANCIAL TIMES and the ECONOMIST. They are involved in banking, fine pottery; in television and films. They own Madam Tousauds and Chessington Zoo. They are in farming and land development. And lastly they are in wine production with their own vine-yards in France.

Why are they a kind of photo kit of British Capitalism? The reason is quite simple.

The Pearson Group falls into line with the general problems faced by British capitalism. Take the example of pay. They employ 30,000 workers and their pay averages £10,000 a year, roughly a £192 pounds a week. And the real pay of these Pearson’s workers has gone up quite steadily in the last five years something I will return to this later.

Earlier in the depression Pearson’s suffered a big set- back, their turnover declined their profits declined, although they have since recovered quite a lot.

Now you will have read the statements in the press this week about how the number of shareholders is increasing, how a lot of people with money have been persuaded to buy shares in British Telecom and elsewhere and that the number of small shareholders is going up.

Quite true. But when you look at Pearson’s you’ll see what this really amounts to.

Pearsons has outstanding a hundred and ninety six million shares owned by thirteen thousand eight hundred shareholders. Most of the shareholders are individuals, but among what they call the shareholders, there are Banks, insurance companies and pension funds.

However the bulk of the individual shareholders own less than two thousand five hundred shares. They are small shareholders and they represent about eighty or ninety per cent of all the shareholders but they only own 6% of the total number of shares.

In other words, their influence on the company is none whatever. When you go to the top end there are thirty eight big share holders who between them own 53% of the hundred and ninety six million shares. In other words, they are the thirty eight who have complete control of the company; they’ve got eleven directors four or five whom are quite low down the scale, ten thousand a year like the average pay of their workers. But at the top end, you’ve got one who gets a hundred and twenty five thousand a year and another one who gets a hundred and seventy thousand a year.

Now look at how much unpaid labour Pearson gets out of the whole of their undertaking. If you relate their £72 million profit after they’ve paid tax, to the wages of the thirty thousand workers they employ, the picture you get is, that their thirty thousand staff are working four days a week to produce the equivalent of their wages, and their fifth day, is devoted to providing profit for Pearson and the rest of the companies, It is of course what Pearson is in business for; exploiting the working class in order to make a profit.

Pearson is fairly typical of what has happened to British capitalism over the years. However there is another reason. Marx laid down a fundamental law of Capitalism in Britain or capitalism anywhere; it is this that capitalism cannot stand still.

The company that stands still disappears; a company in order to survive has got to expand. Well, if you look at this you’ll see that Pearsons are aware of this. Pearsons are aware of this for all of their companies. They know they’ve got to expand to survive.

Now out of their total profits in the last five years, they’ve only paid out a quarter of their dividends and they’ve retained three quarters of the profits in the company, this again is more or less typical of British Capitalism.

This, then, is the answer to Marx’s law.

Either you expand or you disappear, because the cost of machinery and all the rest of the equipment of capitalism carries on growing year by year, it gets more and more and you either expand with it or you just don’t succeed in paying your way. So in spite of this, in spite of Pearson ploughing back into the company the greater part of all their profit, they’ve been losing ground. And financial groups have been noticing this.

You have probably read about Pearsons in the newspapers. Companies have been maneuvering in the background to try to take-over Pearson’s business These companies are saying that Pearson’s hasn’t been doing badly but if we get hold of them we could do a lot better, and they’re willing therefore to pay quite a high price for Pearson’s shares in order to get hold of the company.

Pearson’s, of course, are fighting back by reducing costs and this means an attempt to reduce the number of workers they need to employ. They are behaving no differently than any other business in capitalism.

Now I said that Pearsons employ thirty thousand workers and it is true last year trade was beginning to pick up again. Pearson took on 2286 additional workers in the whole Pearson group. But, in the previous five years they had got rid of 5400 largely because of the depression. When a depression begins companies try to tighten up their organization. In the case of Pearsons it was to get rid of 5400 workers. Now business in the Pearsons group is picking up so they are going to employ 2286 workers but not at the numbers of a few years ago. And another development is taking place,

The FINANACIAL TIMES employs fifteen hundred workers. Pearsons have looked around and seen Mr Mathews and Mr Murdoch and all the rest of them using the modern printing techniques and getting rid of workers. The FINANCIAL TIMES is going to do the same. They are planning to get rid of 400 workers, at a cost of £22 million in redundancy pay which they reckon the workers will accept. And that these cuts will allow them to expand and be profitable again.

In short, this picture of Pearson’s is, as I have said, a miniature of British Capitalism. Everything about the problems faced by the Pearson Group is what’s going on, in British capitalism or Capitalism all over the world.
The Government and the Price Level.

I said earlier, that I would deal with the power of government to raise or lower the price level.

Again Marx dealt with this topic as an application of his Labour Theory of Value.

Marx presented this picture.

He said, suppose that all of your currency is gold. In this example, you have nothing but gold coins circulating with some minor copper coins related to it. But at a given level of population and production a certain amount of gold will be needed to provide that currency, to keep things going. Suppose, say, a hundred million ounces of gold are required.

Now Marx said suppose you got rid of your gold currency or gold bank currency and replaced it with paper money. He was not just talking with his head in the air. In the nineteenth century and continuously from 1850 to 1914, British currency was on the gold standard, gold coins did circulate, and by law, the people who held paper money, which were Bank of England notes, could go to the Bank of England anytime and demand that they be given the equivalent of gold for their notes. Roughly it was at a ratio of a quarter of an ounce of gold for every pound, or vice-versa they could take gold there and get notes for it, which meant that the price level was tied to gold.

Now Marx said if you take gold away and replace it with paper money which is based on nothing like the present paper currency then, nothing happens immediately. But if you double the amount of paper then you’ll double the price level and conversely if you half the amount of paper money you’ll half the price level. Again Marx is not just talking with his head in the air. In the nineteenth century, when the gold standard operated, in other words, when prices were tied to gold, the price level in 1914 was almost exactly the same as it had been in1850. That is not to say that it goes down a little in times of depression and up in periods of boom, but from beginning to end of this period it was more-or-less on a straight line.

Actually it had gone up according to one calculation by 2% in sixty-four years, in other words prices were stable. Post-1936, every month the government has pushed out more paper into circulation. There is no restriction at all. There hasn’t been for fifty years on the ability of the Bank of England to put more and more paper money into circulation and they’ve gone on doing it.

The amount of currency now in circulation has risen from five hundred million to getting on for twelve million seven hundred thousand. The price level now is twenty-one times what it was in 1938.

So, first, you have an example of prices being kept stable by government. Secondly, you have prices rising due to governments authorizing more paper currency being printed that is needed by trade.

But you have a third situation; governments deliberately withdrawing currency from circulation to bring the general price level down.

Here are two examples. Prices fell after the Napoleonic Wars through a deliberate policy of restricting currency in circulation. This was known to and written about by the economist David Ricardo.

And it happened this century between 1920 and 1933. The Lloyd George government decided to bring down prices, they set up a committee of enquiry that recommended the Bank of England, reduce the note issue. And as notes came in to the Bank of England through taxation the Bank of England burnt them. They burnt millions of notes, and cut down the note issue enormously. As a result prices came down about 35% in two or three years.

So as I said, Governments can take either of those two courses; either increase general prices or reduce them..

I would however remind you, that it doesn’t make any difference to the position of the working class. The price level isn’t a working class issue.

The situation would be capitalism whether the price level was rising, falling or stable.

And there is another warning, if you follow the statement in financial columns and by the Chancellor of the Exchequer, you will have heard in recent years a constantly referring to the money supply and how they were controlling it.

My warning to you is that it has nothing whatever to do with the currency. When they talk about money supply they do not mean notes and coin. It has nothing to do with the theory of Marx. The Banking theory on which they work is an entirely different one. It is a theory invented by the economist J M Keynes and adopted by the monetarists like Milton Freedman, who put forward the fantastic notion of what determines the price level, is the banks. If the banks have lent a lot of money, prices go up, if they don’t prices will go down. You don’t want to take any notice of it. This theory can quite easily be shown to be complete nonsense.

But there is an important aspect that applies to everything else. You will find economists, writing about it is good for the population of Britain to have inflation or deflation, or the gold standard. They are completely off the mark. The question at issue has nothing to do with what is good for the population of Britain and has got nothing to do with what is good for the working class in Britain. But it also has got nothing to do with what is good for the capitalist class in Britain. This question is one of a division of interests among the capitalist class.

J M Keynes recognised this when he was writing about the past, but couldn’t do it when writing out the present. There are some industrial capitalists who are heavy borrowers from the banks. Now if an industrial company can borrow a million pounds from a bank and repay in five years time and you have inflation, at the end of five years what, a pound, will buy has fallen a lot. In fact the industrial capitalist reckons I’m in clover here I borrow a million pounds at a certain price level, I repay it when prices have gone up I’m repaying in depreciating currency I’ve done very well for myself. Some other industrial capitalist those engaged very much in foreign trade will not take that view. They will say this is true but we need a stable foreign exchange rate, and that means stable prices.

Now between 1920 and 1932 when prices were coming down the people who romped home were the lenders, they had lent money and were getting it back, and every year, as they got it back, it would buy more and more, because prices were falling.

Now the third group, are some industrial capitalists and the bankers. The bankers are both borrowers and lenders so they don’t win nor lose either way, so the bankers prefer the gold standard which keeps prices stable.

Now it’s very important to mention this particularly because this division of interests among the capitalist class is totally disregarded. But it applies to everything, all these aspects of capitalism, you see different interests involved.

You get some people say, look we want lower interest rates, borrowers want lower interest rates, lenders don’t, every time the building societies say look, we’re reducing our mortgage rates by a half-a-per-cent; a cheer goes up from the people who want mortgages but what about the people who’ve got money on deposit in the building societies? They say but what about us, our interest has gone down, and it applies to everything all the way through the interest field.

It applied of course to rent control. Rent control was introduced in this country by a Tory minister in a coalition government and as I say he wasn’t doing it to help the workers they were faced with a wages strike and they said look perhaps we can persuade the workers not to strike by imposing a rent control at the expense of the landlords of course.

Free trade and protection, again. The country in the world which is the most efficient producer wants free trade.

When British capitalism was the workshop of the world the capitalists wanted free trade. Marx wrote about it at the time, when he said this, the free traders of this generation will be the protectionists in the next generation.

When foreign countries were retaliating and undercutting British capitalism the British manufacturers and the Tory Party said what they want is protection and they do not want free trade anymore. The same thing applies with interest rates and foreign exchange rates. Everywhere, you must look for the sectional interests of the capitalist class that are involved, if you want to see what’s going on.

You may notice this; in the foreign exchange rate, all the way through in the last few years, Mrs Thatcher has been saying that we don’t want the pound to fall too much, of course, the British export capitalists do want the pound to fall too much, and there is a letter in the FINANCIAL TIMES today, where the Chamber of Commerce were accused, I’ve forgotten which way round it goes, they were accused of wanting the pound to fall, no sorry they wanted the pound to rise and said you represent the import capitalists, don’t you, you want the pound to rise and they came back and said no we don’t we represent them all, well they can’t represent them all, they can’t have interests rates go up or have them go down as well.
The Limits of Government

Now, just a brief note on what governments can do and can’t do.

Political parties believe governments can do anything. Well they cannot control unemployment although they can control the price level, whether it is rising, falling or stable. Governments cannot control interest rates and they have only very indirect control over the foreign exchange rate. And even their attempts to control wages become unstuck.

In the last few years Mrs Thatcher and the Chancellor, Nigel Lawson have been complaining that wages are going up to much. They don’t want wages to go up but contrary to their complaints, wages have now been rising for the past two or three years.

Real wages, average real wages, are now higher than they were in 1979, and this isn’t what the government wanted. Conversely, no government wants companies to go bankrupt, or profits to fall. In 1979 profits fell drastically. This isn’t what Mrs Thatcher wanted, of course, or the employers or even the Labour party. In short, remember that Capitalism goes on as a system of productive anarchy, and almost everything that it does, the government has no control over it.

The only solution to the anarchy and social pain of commodity production and exchange for profit, of course, from the Socialist point of view is to get rid of capitalism. And that, precisely, is what the Socialist Party of Great Britain came into existence for.

Capitalism has certain necessary consequences; it’s bound to have unemployment, it’s bound to produce wars, bad housing, poverty, class conflict, strikes, and all the rest of it, and there is no alternative to this. If you have capitalism, these are the social conflicts and problems you have.

All of the political parties, except The Socialist Party of Great Britain, devote all of their efforts in trying to solve Capitalism’s problems. Well they can’t solve capitalism’s problems while they’ve got capitalism. And incidentally if political parties did solve capitalism’s problems they would all of them be out of business.

Capitalist political parties are all in business by saying to a non socialist working class; look, this other lot hasn’t solved these social problems; we are going to solve them. And if the other lot had solved the housing problem and the unemployment problem and all the rest of it, then the opposition parties of capitalism wouldn’t have anything to put before the electors.

I mean this is a bit of self evidence. But anyway Socialists say that their efforts are wasted in trying to run capitalism in the interest of all society and the only real solution is for the working class to consciously and politically abolish capitalism and establish Socialism.

Socialism would fundamentally differ from capitalism and I will come right back to the subject of the lecture. In Socialism there will be no price system, wages system, no unemployment, for there won’t be any employed, no property income, no rent, interest or profit, no class division, no exploitation of one class by another.

The idea of Socialism is that people will cooperate together to produce what society needs. And the other side of the coin is that all of the members of society will have free access to everything that is produced. There will be no prices, and they will not have to give a price for goods and services produced.

Of course Socialist society will have its problems but they won’t be the kind of problems which capitalism can’t help producing. Initially, Socialism will have the problem of increasing the quantities of socially useful products and services to meet the needs of society. It just won’t come out of a hat; it will have to be planned for, and worked for.

The last point is how Socialism can be achieved. It requires two things. First that the working class shall be won over to the socialist idea of a society based upon common ownership and democratic control of the means of production and distribution by all of society and to consciously recognise that nothing can be done with capitalism to run it in their interests. And secondly they must organise politically for the purpose of democratically gaining control of the powers of government including the armed forces without which they will not be able to do anything.

It is for this purpose that The Socialist Party of Great Britain was formed and it is for this purpose that The Socialist Party of Great Britain deserves the support of the working class.

Marxian Economics (1986) Lecture 2

I don’t think you need any explanation of the title, PROFITS, RICHES AND POVERTY, in which profits and riches are related to poverty.

You would have read recently in the Press that profits have been going up sharply in this country in recent years. You will interpret this to mean that the rich are getting richer. It is the sort of natural reaction to news about profits going up.

But before I get down to dealing with profits, riches and poverty in detail, I want to take a look back into the past century, just for a moment, to put today’s lecture into some sort of perspective.

Under slavery the slave-owners owned the slaves, and they put them to work, and the slaves produced products, worked on farms and constructed buildings. After having allocated to the slaves what were necessary for their own upkeep the balance belonged to the slave-owner, and it was consumed by him, his family, and retainers. I have no doubt that the slaves had a quite clear idea of what was going on, that in fact, to use Marx’s terms, they were being exploited.

Later on, you had Feudalism. You had what was known in this country, as the manorial system, where the outward appearance was somewhat different. Here, the serfs were not slaves they had a certain status; they had some land allocated to them by the lord of the manor. The serfs would work on their own land, for say three days a week, and work on the land of the lord of the manor for the other three days a week, for the benefit of the lord of the manor. I have no doubt that the serfs had a pretty clear idea of what was going on, that the lord of the manor and his dependants and so on, were living off the labour of the serfs.

Now under capitalism it has changed again. Under capitalism, a lot of economists say and a lot of workers believe them, that the working class is not being exploited at all. They are not slaves, and they are not serfs, and they appear to enter into a voluntary agreement with their employers, about the wages they would get for the work they put in, say a 40 hours week. A lot of economists and a lot of workers believe that what the working class sells to the employers is their forty hours labour, during a five day week, at its fair market value. This begs the question: where do the employers profits come from?

No economist has been able to adequately explain where profits come from, except for Karl Marx, who gave the real explanation. And Marx’s explanation was simply that the worker does not sell to the employer his five day, forty hours of labour. Instead, what he does sell to the employer is his mental and physical energies; his labour power.

The employer buys the worker’s mental and physical energies for a week. But it is one of the characteristics of capitalism that the worker can produce, in say 3 or 4 days of the week, the equivalent of his wages, and for the other, the rest of the week, he is giving what Marx called, unpaid labour to the employers. And it is out of this unpaid labour that the unearned income of profit, rent and interest are all derived.

So, in fact, the working class is exploited, just as the slaves and the serfs were exploited, although it takes on a somewhat different form. Now, what is an interesting question is this; you have had capitalism in this country, say, for a couple of hundred years, how much unpaid labour the workers have been giving to the employers in the past, and how much they are giving to the employers at present?

Well, on the basis of 1985 the total wages received by the 21 million workers who were in employment last year, and the total profits received by the employers direct, or through, the profits on the Nationalised Industries, it worked out at something like this; that the workers on average, were working 3 3/4 days to replace their wages, and giving 1 1/4 days unpaid labour to the employer, out of which comes the employers profits, giving a five day week.

Now, some of you, if you have read Marx, in CAPITAL about this, or read various other of his works, may wonder why, the amount of unpaid labour given by workers now to the employers is not larger than it is.

You may be surprised to learn that it works out at about 1 1/4 days, out of the five days. You will think, it ought to be much more than that. Marx certainly thought so, when he gave examples, probably given to him by his friend Engels, who worked in the textile industry. Marx gave examples which made it seem that they split it 50-50, that the worker was working half the time for himself, and half the time for his employer, so that the division of the five day week on that basis, would have been 2 1/2 work, the worker working for his wages, and 2 1/2 working, giving unpaid labour to the employer.

If, any of you remember, what Marx’s colleague, Fredrick Engels wrote in an appendix to a pamphlet called WAGE, LABOUR AND CAPITAL, Engels expressed the firm opinion that with every development of industry and invention, the amount of unpaid labour given by the worker, to the employer, would get larger and larger. Well it hasn’t got larger and larger. Marx and Engels in their forecast about the modern world have got it wrong. Now, there must be some reason why they got it wrong. In other words they understood the principle of the thing, why did their actual forecast not turn out as they expected?

There is a two fold explanation. In the first place when Marx gave examples of the exploitation of the workers he said he dealt with workers in what he called the sphere of production, that is, the workers who are actually producing social wealth. However there are other workers who are not in the sphere of production. These workers are in the sphere of what Marx called circulation, like bank clerks, insurance clerks and commercial clerks.

These workers are not producing social wealth at all. They are just, as it were, shuffling the wealth round, into the hands of the capitalists, who themselves are not in the production sphere but who still expect to make a profit out of exploiting wage labour who are producing social wealth.

Now, since Marx’s day there has been a very large increase in the number of workers in the circulating sphere, that is, of bank clerks, insurance clerks and so on. It’s been going on in recent years in spite of heavy unemployment. The number of jobs in that part of Capitalism has been increasing, so that is one explanation. These workers who are not themselves producing social wealth have still to be paid wages. And they get their wages, of course and where they get their wages is out of the profits of the capitalists in the sphere of production.

That doesn’t matter at the moment. However, there has been another change since Marx’s day. And that is the enormous increase of another group of workers who are not producing wealth; that is the bureaucracy. The purely bureaucratic workers in the civil service and local government have increased enormously and it has increased enormously in industry itself.

If you were to look back at the growth of the civil service and the growth of the local government you have a great increase over the century in non- productive workers. Of course Local Government employ building workers, transport workers and so on but the purely administrative producing part of the local government and civil service have gone up enormously.

The same thing has happened in manufacturing industry. I have got some figures here; from the government statistical office published between 1948 and 1977. Every year they publish the number of workers employed in the whole of manufacturing industry, and the amount of profit made every year in manufacturing industry, and they’ve divided the workers in manufacturing, into what they call wage earners, and a separate category for salary earners.

In the 19 years between 1948 and 1977 the number of wage earners decreased by over 500,000 and the number of salary earners in manufacturing industry went up by 870000. Now they didn’t publish details of what these additional 870000 salary earners were doing, but you can be quite certain, that most of them were carrying on purely financial work, or dealing with Pay as You Earn (P.A.Y.E), or dealing with pension funds, or filling in forms for government departments. In short, here you’ve got a development which will explain, why the amount of unpaid labour given by the whole working class has not increased in the way that Marx and Engels expected it to. And as I say on the basis of last years figures, it works out that the workers, the whole 21 million of them, spend 3 3/4 days reproducing the equivalent of their wages and salaries, and giving 1 1/4 days unpaid labour to the employer; the capitalist class.

But if you look at the same question, on the basis of the official figures of the division of the national income, they put it into three categories. First of all they have a figure which they call income from employment, that’s like wages and salaries of all the workers, but they also include employers contribution to workers pension funds, and their share of the national income last year was 63%. They have another category for profit including the profit of the nationalized industry and that worked out at 20%. There was a third group called the self-employed, they are one man businesses, farmers, doctors, lawyers and other people working on their own, numbering 2,600,000 and they receive 17% of the National Income. So you’ve got this division, wages 63%, profits 20%, self-employed 17%.

So it’s also interesting to see how large a change over the period for which there is information available. You have not got figures say, for the middle of the 19th century when British Capitalism was in its heyday, but I’m absolutely certain that in the middle of the 19th century the amount of profit, in relation to wages, was ever so much more than it is now, so that, the workers then, were in fact, giving a much larger amount of unpaid labour to their employers much on the lines of what Marx and Engels thought it would be.

There are very good reasons why that have changed, figures are available, for the years 1938 up to date, and they show this sort of picture. In 1938 the proportion of the National Income that went to wages and salaries was 61%, you see that compares with the figure I’ve given for last year when it was 64%.

But in the intervening years it rose, on some occasions, to as much as 73%, so it naturally varies from year to year. And so you have got this general tendency from 1938 to now, when it went up to 63% and in the last five or six years its been falling again from 69% to the figure last year of 64%.

Profits in the last three or four years have been rising very, very fast and I have no doubt that the figures for this year will show that the proportion going to profits will be up a bit and the proportion going to wages will be down a bit. Similar figures are available from the US from1929 right up to1982, and they show that in 1929 the American workers wages were 50%, of the total, on the whole its been gradually rising since 1929 and in 1982 it was 62% which is very close to the percentage which it represents in this country.

Today, however, I would expect the proportion in the US to turn against the workers and in favour of profit for the years since 1982 for two reasons. First in the depression a lot of the US workers have had to accept reduction of wages something that hasn’t happened in this country. And, second also US profits, also, have been rising quite sharply.

Now, that is one way of looking at the division between wages and profits, in other words looking at it, how people get their living. The workers get their living by having a job; the capitalists get their living by owning property, and receiving unearned income in the form of profits, rent and interest. And then of course, you’ve got the third group, the self-employed, who so to speak are working on the fringes and working on their own.

But there is another way of looking at the division of the National Income and that is, instead of looking at the way people get their living put workers and capitalists all together, and see what proportion of the National Income goes to the very rich, what proportion goes to the middling rich, and what proportion goes to the poor.

That has been done by various authorities from time to time and again I would say that in the middle of the 19th century the proportion going to the rich and the very rich was much larger than it has been more recently. In 1855, Karl Marx published a couple of estimates that had been made by economists in his time, they set out to discover exactly how much of the National Income went to the richest 20% of the population, and how much went to the poorest 80% of the population.

Well the two different estimates, they differed a bit, if you take the mean between the two, you will get this picture, that in the 1860s the top, the richest 20% of the population received 70% of the National Income, but the poorest 80% only got 30%.

In 1904 Chiozza Money (RICHES AND POVERTY published in 1905) made new calculations and he found that the proportion going to the richest 20% it had been 30% of the National Income but fallen. In 1865 the richest 20% had been given 70% of the National Income and in 1904 that had fallen to 53%, and in 1974 a Royal Commission set up by the Labour Government, made a new enquiry, and found that the richest 20% of the population, their share of the National Income had fallen to 43%. So looking at this from the other end, the poorest 80% of the population only got 30% in the 1860s they got 47% in 1904 and in 1974 they were getting 57%

The Royal Commission also noted this tendency in the division of the National Income towards less extreme inequality. I would again, think, that in the last two or three years, the years since 1980 that the proportion will again have been moving rather in favour of the rich, for one reason that I have given, that the profits have been rising very, very fast, and also because, in this recent depression, with a lot of unemployment, workers will have been spending what savings they had got and this will so to speak reduce the proportion of the National Income that they are in fact getting.

If you ask what is the reason why this division of the National Income has changed in favour of the workers against the capitalists there is not the slightest doubt it has been due to the growth of the trade unions. As the trade unions got larger membership, particularly in the last quarter of the 19th century, and as they became much more efficient organizations, they were able to swing the balance quite a lot against the employers, and it showed itself in the quite big rise in real wages in the last half of the 19th century.

Frederick Engels commented on it in 1892 in looking back over the fifty years, he said there had been a quite remarkable improvement in the condition of the workers in the big trade unions. Incidentally something that in the middle of the 19th century neither he nor Marx expected to occur. They had not seen what difference trade unions would make.

But it would be a mistake to think that the only contrast as it were between rich and poor is between profits and wages. I would suggest, there are far more workers now working in trade unions, who, although they may look occasionally at the enormous incomes of the property millionaires, are much more concerned at how much wage or salaries some other workers are getting. Its commonplace now for trade unions, to present their wage claims, in the form of, “we ought to get more, because somebody else is getting more”. The teachers, the agricultural workers, the railway men, the civil servants, post office workers and so on are all going in for this sort of thing.

There is a curious piece of nonsense in the minds of a lot of economists, and of nearly all the workers. And that is the belief in a fair and proper wage that every worker ought to be getting. If you ask any worker, they will say, “I’m not getting a fair and proper wage, there is a proper wage and I’m not getting it, and I deserve to get it”.

I’m quite sure that if one of the opinion polls organizations were to conduct a really massive opinion poll in this country and ask workers, do you think you are properly paid, 90% would say no, and they would say, do you think you ought to get more, 90% would say yes. And if they said, “what’s your reason for thinking you ought to get more?” 90% would say “there is a proper wage that we ought to get, and we’re not getting it. And I have said this is a piece of nonsense, and I will deal with the question of “a fair day’s work for a fair day’s wage” later.

But there is plenty of scope for workers to look at some other workers and say “I ought to get some more because he’s getting more”.

You can start with one quite firm figure; the 21 million workers who were in jobs last year. They all earned an average wage of a £155 a week. Now, averages are very useful things, but they frequently conceal much more than they reveal.

The £155 pounds a week conceals an enormous amount of information. I am not suggesting its wrong, but I’m just saying this is the nature of averages.

To start with the 21 million workers were getting an average wage of a £155 a week, but if you break it down into industrial groups you immediately find these revealing facts. If you look, for example, at male manual workers, their average wage varied from £130 in the Leather Footwear Group, up to £214 in paper, printing and publication. It is quite a big gap. You see between the two wages of £130 and £214 a difference of £84. But if you look at the women manual workers, their average was much lower than the men’s; £105 and £127 respectively for women non-manual workers in footwear and paper, printing and publication. So you see how this range is already wide. But then if you look inside each group of workers you will find in every group, whatever the average wage maybe some workers getting relatively high pay and some getting low pay.

Let us begin with the paper, printing and publishing group. Their average was £214, but they included those printers, the people who have now lost their jobs to Mr Murdoch, who were working in Fleet Street. These workers came out and made the statement themselves that they were getting £455 a week. Most of them have now unfortunately lost their jobs.

But you see that the average for the whole group is £214 with some workers getting over £400 a week. Take the transport industry. The average pay for transport drivers last year was £173 a week. And an agreement has just been reached between the tanker drivers, employed by Mobil Oil, and the Transport and General Workers Union to get a guaranteed wage of £18,000 a year, which is £345 a week.

Incidentally, when they were asked what they thought about the award, was it rather high, they said no, they thought it was quite a reasonable amount, enough for people to live on, but, of course, other people live on £105 and less. However to get this £345 a week they have got to work ten hours overtime and they have also to give up their free Saturday’s and do shift work and various things like this.

The Department of Employment, asked about it, said, that there are 2 million workers getting more than £345 a week. Now, if you start looking at the bottom of the scale, the low paid unit every month or so, publishes results of enquiries they’ve made about the number of workers getting paid at the legal minimum. Of course a lot of workers aren’t getting it. The low paid unit recently found that some domestic workers in the clothing trade working for less than £50 a week, which, of course, is far, much below the minimum wage.

So what in fact you’ve got, is although the average for the 21 million workers last year getting on average £155 a week conceals a range from under £50 a week, to over £500 pounds a week,. So this explains, why, of course, so many workers are looking at some other worker, and saying, “You know, look he gets more, we ought to get it”.

I said that this idea of “fair wages” is a piece of nonsense and I’ll add to it. If there were such a thing as a proper wage, a fair wage, the capitalist class wouldn’t be interested in it. All there are concerned with is to pay a wage as low as they can get away with, while of course, the worker looks at it the other way around, the worker is trying to get as much as he can. And that’s all there is to it.

What the worker is entitled to is, what he gets, and what he gets, is, what he’s entitled to. Capitalism has no morality or ethics about that sort of thing. But there have been some woolly minded people including Proudhon, Lenin, Bernard Shaw, Lady Wootton, and others who have supported the idea that everybody should have the same wage.

Attlee, before he became Prime Minister in the 1945 Labour Government, gave a thorough undertaking, that, when the Labour Party came to power they would abolish riches and poverty altogether. He used the phrase “there will be no more rich living in mansions, no more poor living in cottages”, everybody would be on the same level In short, he also, was really saying like Lenin and Bernard Shaw that everybody ought to have the same wage. Karl Marx really killed the idea a hundred years ago; capitalism can’t be run that way.

About Bernard Shaw I rather suspect that when Bernard Shaw said, everybody ought to have the same wage; he didn’t really mean that it was to include Bernard Shaw. Some years ago the National Union of Glass got out a recruiting pamphlet and they asked Bernard Shaw if he would write an introduction to it and it was a very good introduction, Bernard Shaw gave the NUG a very good reason why they should get together in a union to put up their wages but with characteristic Bernard Shaw flourished, in the last sentence he said, “I don’t belong to a trade union, I have no intention of belonging to a trade union, but then I’m a genius, but of course, you are not”

But Shaw was a very wealthy man and in the two years before he died he was repeatedly writing letters to THE TIMES complaining bitterly, how he was being robbed and impoverished by high taxation, so I don’t think Shaw ever really intended that equal pay for everyone, meant him.

Marx, of course, called the idea of “a fair wage” a reactionary doctrine. He said it is customary for the trade unions, then, as it is now, to have on their banners, “A Fair day’s pay for a fair days work“. Karl Marx said, there isn’t such a thing as a “fair day’s pay”. Instead he urged the working class to abolish the wages system (WAGES, PRICE AND PROFIT)

Now having dealt with the ownership, the way the national average income is divided I now come to the question of the ownership wealth. The Royal Commission on Wealth and Income, in their report, dealing with the year 1974, found that the top 1% of the adult population owns 25% of accumulated wealth, the top 5% own 50% of accumulated wealth, and the bottom 80% owned only 14.5%.

And if you want to have those percentages translated into some sort of figure, 1% of the adult population would be about 350,000 people, about the size of the city of Coventry, or to come to London, its about the population of the London borough of Wandsworth.

So the picture it gave, was, the number of people who live in Coventry or Wandsworth, the 350000, own, a quarter of the accumulated wealth of this country. Accumulated wealth by the way was at that time £216,000 million. Prices have gone up since then. Probably it is now about three or four times as much.

So when they said, 350,000 adults own 25% of accumulated wealth, The Royal Commissioners were saying, that in 1974 these 350000 people, own, on average, £154000 of accumulated wealth.

The Royal Commission also found, that there had been considerable movement towards less inequality. That is to say, the top 1%, 5%, and 20% of the population had tended to see their share decline somewhat and, instead, the share of the poorest 80% had inclined to go up some what.

In the depression of the last two years; there has been an increase in the amount of wealth. Little was owned by the poorest 80% of the population. What the Royal Commission and other economists have done in relation to accumulated wealth is to try to find out what is the current value or price, of land and houses, as shares in companies, as cash, bank deposits, jewelry, works of art, motor cars, yachts, furniture and all the rest of it and add them all together and then find out from Inland Revenue figures, and from amounts left in peoples wills, and things like this, housing, holidays, is divided throughout the entire population

You may remember what Marx said about the economists He paid tribute to the genuine students like Adam Smith and Ricardo because they were followed by what he called the vulgar economists who weren’t genuine students at all but were merely apologists for Capitalism. Well these people are still with us and they popped up again in this question of the ownership of wealth.

What these economists have suggested to the Royal Commission is that the poor have wealth which they don’t realize. They say that if, for example if an old age pensioner was getting £3,000 a year it really represents a large capital sum say £30, 000 of wealth and should be treated accordingly. Now what they are saying is if a man who owns £30,000 is getting an income of £3000 on it, and an old age pensioner is getting £3,000 then the old age pensioner really owns thirty thousand pounds in accumulated wealth. Of course this is a piece of complete nonsense.

Just one thing; if you own £30,000 pounds you can dispose of it and when you die the £30,000 pounds is still there and you can leave it to your heirs. When an old age pensioner dies they have nothing whatever to leave. They haven’t got £30,000. It is a piece of crooked work by these corrupted economists, doing what Marx said they were doing, setting up false statistics as apologists for the Capitalist system.

I now want to look at why the poor, are poor, and the newness of supposed cures for poverty being offered, from time to time, both under capitalism and even before capitalism, but also, I want here, to take a glance back at more distant history. In all class-divided societies there have always been rich and poor and there have always been political and religious leaders and laterally paid economists, willing to explain, why the poor was poor and the reasons generally for this. And also giving advice to the rich as to how they should behave to the poor.

I’ve no doubt all of you bible students will be familiar with the Book of Deuteronomy. I will give you a quote from Deuteronomy (15; 11) “The poor shall never cease out of the land…” In other words you’ll always have the poor with you.

And from the gospel of John, Chapter 12:8 I quote, “To the poor always yea have with you.” Now, both the Old Testament and the New Testament also urge the rich that they ought to be kind, and charitable towards the poor. Deuteronomy had this, “Therefore I command thee, saying, Thou shall open thine hand wide unto… to thy poor.” That kind of preaching, of course still goes on. And the rich are still urged by the government and the church leaders and everybody else, to open their hand wide to the poor, at least, not to wide, but to open it anyway.

But also, you can find in the bible many sorts of explanations as to why the poor are poor. Go back to Luke’s gospel, Chapter 15:13. You all remember the parable of the prodigal son who left home and who was given a lot of money by his father who was very, very rich. He fell into destitution because he “Wasted all his substance with riotous living”.

Now, in the 19th century, there was endless literature from people like Samuel Smiles and others, warning the working class, against riotous living, urging them to work hard, with keenness and thrift, and if they did they would become rich, like the people who were written up in Samuel Smiles books.

And of course the religious and political leaders claim that the poor were poor because they were lazy. If they gave up gin swigging and gambling, and saved their money they also could prosper. In the modern version of course, their take drugs and spend all their time and money at the betting shop, and waste their money on liquor and cigarettes and things like that.

About the workers not being thrifty, it was an economist W. Ashley who was economic adviser to the Tory Party who gave the very good answer to it. He said that it was a subject for mirth, to compare the rich whose incomes were so large that they can’t help saving, with the poor, who a lot of them hadn’t got enough to live on let alone to save any money. And he said you know that it was disgraceful for economists to drum up this sort of argument for which there was no basis whatever.

And then you had Lloyd George, who speaking in 1911 said this:

“Today you have greater poverty in the aggregate in the land than you have ever had, you have a questionable heap by the strong, and you have a more sever economic bondage than you probably ever had”.

And he went on to say:

“For grinding labour today does not always guarantee customs or security”.

This is an understatement, but he was emphasizing the point against the Samuel Smiles and religious leaders who said that to the workers, that if you work hard everything will be alright. Well, Lloyd George was saying this isn’t true you can work as hard as you like and you may find yourself in 1911 one of the million unemployed or one of the other millions of paupers and destitute. And workers were also not prepared to admit that it was their fault by living in workhouses or having to go to the parish for assistance. The truth is of course that under capitalism, the poor are poor because they are exploited and under capitalism poverty is not going to be abolished, it can’t be.

I said that the rich are still prepared to be charitable, in relief of the poor, but to paraphrase Tolstoy: the rich will do everything for the poor accept get of their backs (see WRITINGS ON CIVIL DISOBEDIENCE AND NON VIOLENCE). And this sums the thing up, completely. But of course social reformers have offered the working class the cure for poverty in thrift and hard work. They tell the workers work hard and save; be thrifty and so on. They set a moral tone by telling workers don’t go into gambling or riotous living.

And you also had the social reformers like Lloyd George introducing Old Age Pensions and insurance for the unemployed as an attempt to prevent poverty. Lloyd George’s social reforms were going to abolish at least some of the poverty that then existed, and this came to perfection in the Beverage report on the Welfare State and Health Service introduced by the Labour Government in 1946.

We also had Attlee, as I said, before he became Prime Minister, promising to abolish riches and poverty all together and have everything on an equal level. Later on, you had the Labour Party when it came into office, saying that when they Nationalized all the industries, the coal the mines, the railways, the Bank of England, and so on would would abolish poverty because they said the Nationalized Industries will pay higher wages than private firms do so all the workers will be better off. Of course it was the Labour Government which introduced the wage freeze in 1949 to prevent the workers from getting higher wages that they had been promised.

Another thing social reformers claimed to help cure poverty was the construction of Council houses. They were going to build cheap, satisfactory low-rented houses, so that would relieve the workers of some of their expenditure and make them better off. In fact, there are tens of thousands of people in council houses who are so completely destitute that they can’t pay rent at all, and the council knows it, and they can’t even make a serious attempt to collect it from them.

And then, of course, all the three main political parties discovered the cure for poverty, in the old Keynesian rubbish. The economist J. M. Keynes was going to guarantee that there would never be any more depressions and that unemployment would disappear. Now thirty or forty years later, there are 2,500,000 million unemployed workers many whom have been out of work for years. The latest theme for curing poverty is one by the Tory Government, what Mrs. Thatcher calls “People’s Capitalism”, that is, in urging workers to put their savings into company’s shares instead of putting them into savings banks, or Post Office banks.

A Labour MP, a Mr Meacher, the Shadow Secretary for Social Affairs made a speech in which he accused the Government of trying to suppress the fact that, the poor numbered 10. 5 million.

Well, Lloyd George never said that they numbered ten and a half million in 1911, and the Labour Party didn’t say they numbered ten and a half million in 1946, but Mr Meacher went on to say: “Poverty in Britain is now at its worst since the war, and comparable with that of the 1930’s. To which the writer in The Times, made this very pertinent comment:

“These ten million, if ten million there be, exists after forty years of the Welfare Stat. Now, if Mr Meachers’ party really introduced the so-called Welfare State and says this abolished poverty, how comes the Home Shadow Secretary forty years afterwards, says poverty is worse than ever after the Labour Government had abolished it.”

Another, scheme for helping the poor to prosper, is now being considered, by the Government what they call profit related wages, there have always been some firms, which have offered profit sharing schemes to their workers. This new one differs from the old one in various respects, because, if the new scheme is put into operation, it’s only at the stage of being considered at present, the government will pay a hundred and fifty million to the workers, who in joining in the new scheme, by reducing the amount of P.A.Y.E. that they pay.

But take the old profit sharing schemes first. An employer will come to the workers and say look I’m prepared to give you a share in profits, and he will have to offer it in the following form; “whatever your wages are at present, I’m going to give you a share in profits which will be on top of your wages”.

Employers do not give away part of their profits for any purpose. What they are hoping to get out of it, and they’ve made no secret of it, is by giving the workers a share in profits they would increase what the employers call the workers’ loyalty to the company. In other words, the workers will think more about the company’s affairs, and its prosperity, than about his wages, that is, the workers will work harder and be less inclined to strike, in which case, of course, the companies profits will increase, and if they did increase, it would have been a good business for the company.

If of course it didn’t work and if the workers weren’t satisfied with it, and were not in the employers words more loyal to the company, and didn’t work harder, and still went on strike, the employers would drop the scheme, as a lot of them did, because, they found it wasn’t worth while.

Now in the new scheme, what will happen is this, the government will invite companies to go to their workers and say, look instead of your having a wage in future you will have either 5% of profits as a percentage of your wage, it will not be a normal wage, it will depend on the amount of profit, the company makes.

So, for example, suppose the workers were getting two hundred pounds a week, the employers would say, you keep a hundred and ninety pounds, and the rest of it will, at present ten pounds, will depend on profits, so it may go up, say to twenty pounds or it might disappear. They will tell workers that in future your wages will not be fixed, without any relation to how the companies doing. The scheme called flexible wages they say will mean that when the firms doing well, wages will go up, when the firms doing badly wages will go down. Well workers don’t behave like this. Normally workers and their unions have no interest in how badly the firms are doing. They say you don’t cut our wages; they do their best to prevent wages being reduced.

The Government’s Green Paper, on this new scheme, says that it will lead to an improvement, in efficiency, and productivity, leading to enhance competitiveness, and better business performance. The hope is that the workers will work harder, their productivity will rise, and the company will be able to reduce its prices, will get a larger share of the market, and make larger profits.

The advantage to the workers, the government says, is that the government will relieve the workers of a quarter of the income tax that they would have to pay on their share of the profits. In a given year, say, workers got six hundred pounds under the profit related part of their wages, whatever the P.A.Y.E might be on that six hundred, it means the workers only have to pay on three-quarters of it, and the government would pay the other quarter.

But, like the old scheme and the new one, they will mean that the workers will work harder, the workers output will be greater and their productivity would be greater. Say that, the number of workers required, to produce a certain given quantity of products will be reduced, if the workers work 10% harder, then instead of a hundred workers, the firm would be able to carry on with ninety.

Now, the government put this new scheme forward, on the basis, they say, that it will eat into unemployment, it would increase the number of jobs. Well, you look at this; should you have a firm that has a profit sharing scheme, invested to get the workers to work harder, and it does expand, it will be expanding at the expense of the less competitive firms. So one firm employs more workers while other firms employ fewer, it doesn’t make any difference, whatever, to the amount of unemployment.

My own guess is, if this scheme actually comes into operation, and a lot of workers will have to agree with the set-up of such schemes, as long as profits go on rising, the workers won’t mind very much. But as soon as profits start falling, I’ve not the slightest doubt; the workers will carry-on in their traditional way. They will say scrap the scheme we’re not going to accept lower wages, in fact, we’re in it for what we’ve got.

Just a word on what Thatcher calls “the share-owning democracy”. This business of buying shares in British Telecom and other companies, what little the workers can afford to spend on such shares is very, very small. In other words, it will never give workers control of companies, their small share holdings won’t count against the huge share holdings of the wealthy people who control the companies.

And I would simply add, shares not only go up, but they can come down As you have seen share prices have come down in the last fortnight, and I think its quite sufficient to say, that speculating on the stock exchange, is a good business for people who have inside knowledge and plenty of money to spare, but its not a game for small share-holders, that won’t lead them anywhere, and they won’t get anything out of it.

Having said that riches and poverty have existed as long as class society, you’re entitled to ask, why does The Socialist Party of Great Britain say, that poverty will be abolished with the establishment of socialist society.

Well to start with, in Socialist society, there will be no wages, no profits, no rent, no interest, in short, there will be no money income. There will be no people having unearned incomes from rent, interest and profit, because they will not own property. There will be no buying and selling, therefore no money system, and no price system. As nobody will have any money income, it will not be possible for anybody to be richer or poorer than anybody else. And remember the basis of socialist society will be that people will have free access.

You are entitled to say how can you have free access? Where will the goods and services come from, into existence, so that the population can have free access to them, the food, clothing, shelter and all the rest of their requirements? Well, the whole of the population will get them by taking them out of the communal store.

And how will they get there? They will get there because members of society will cooperate together to produce them. And as I say, emphasis will be on the basis of free access. People will take what they need and they will not have either pay for them, or give anything else in return for them.

However, this is not an easy task. Far from it. To set up conditions of free access will be the greatest problem for socialist society will have to face.

Karl Marx wrote long ago, that the first task of a socialist society, will be to increase production, as much, and as quickly as possible, and it is still true as Marx, as it was when Marx said it.

When, the preliminary necessary work has been done, and when a socialist working class takes over, the machinery of government and the armed forces and starts setting about establishing socialist society, their first task will be, to increase enormously, and as fast as they can, the useful goods and services that society will need.

Now some people have fallen into the elementary error that under capitalism, enough is already produced, for socialist society to operate.

It’s a dangerous illusion, based upon a complete misconception of capitalism. These people look around them, and they see, from time to time, that different capitalist industries produce more, produce an un-saleable surplus. They produce too many ships, and can’t sell them; they produce too much coal and can’t sell them.

When the miners strike started a year ago, the Coal Board said there is fifty million tons of coal lying around the country, which normally would take the coal industry ten years to get rid of it.

You’re all familiar with the talk about mountains of grain and various other commodities like wine and butter that have been produced both in the US, and in the European Economic Community. This is something that happens in different parts of industry, but, as far as the capitalists are concerned it never happens intentionally.

Capitalists never allow the workers to produce in their industry more than they think they can sell at a profit, and if they do produce more than they can sell at a profit it’s a miscalculation, as far as the capitalist class is concerned.

Fredrick Engels, Marx’s colleague put it very well, he said: “too little is produced, that is the cause of the whole thing… But why is too little produced? Not because of the limits of production…. The limits of production are determined, not by the number of empty bellies, but by the number of persons able to buy and to pay” (Letter to F.A. Lange, SELECTED CORRESPONDENCE OF MARX AND ENGELS, page 199).

That is what the capitalists are allowing production to go on for; they are allowing the workers to produce in every industry, the amount the employers think they can sell at a profit, that is, to the people who can purchase and are able and willing to pay.

But Marx added to this. Capitalism never has produced, enough, to meet decently and humanly, the needs of the mass of the population. It is still just as true as when Marx said it. I have said that capitalist industry never intentionally produces more than it can sell at a profit, if inadvertently it does; it finds it does, it immediately cuts down production, and it doesn’t go on producing things that it can’t hope to sell.

But there is, one exception. Capitalists cannot see in advance what will be the outcome of their agricultural activities, they never know whether, for natural reasons, that next years crop will be a total failure, or will be a bumper crop. If they get bumper crops, two or three years running they will in any event run into this difficulty where they’ve got an un-saleable surplus, and, in time, of course, these un-saleable surpluses get looked after because the farmers go bankrupt, but it may take quite a time for the farmers to go bankrupt.

But there is a general exception to all of this, and that is, that government, for political, or military reasons, or for both, literally, pay, different industries to produce more than they can sell at a profit.

In 1915 for example, under the Corn Production Act, the Government said to the farmers, in this country, you can produce absolutely as much as you like, we will guarantee your profits of everything that you can produce, we will subsidize your production, and they attached one condition to it, they said to the farmers, you will also have to pay a minimum wage to agricultural workers because we want to attract workers out of other industries into agriculture, because the country is desperately short of food.

Let’s carry on to 1921 when the war was over. The Government abolished the Corn Production Act, took away the subsidies from the farmers, and for several years they let agriculture, so to speak, stews in its own juice. But governments do this sort of thing. In the US, and Europe, this country and others; for example; governments stockpiles warehouses with strategic materials. There in access of what the capitalists could sell at a profit, but this meets the political and military needs of capitalism.

The first task of socialist society will be, as Marx said, to produce more as rapidly as possible. Socialism will not be fully functioning until it is able to offer free access, that is, until socialist society is able to offer to all persons all they reasonably need to live worthwhile lives.

In other words, everywhere in the world where people live, there shall be available, all the requirements of civilized living, in sufficient quantities, enough good food, clothing and shelter, water and sewage systems, means of transport and communications, hospitals, education services, libraries, newspapers, books, entertainment facilities and so on. Marx had this in mind when he said that socialist society will meet peoples’ needs decently and humanely.

To suggest that this level of production already exist all over the capitalist world is pure fantasy, divorced from all reality. It is a very dangerous policy. The level of production to meet the needs of people does not exist in the industrialized countries, let alone in the rest of the world. So Socialism’s first task, when the socialists have got power, will be to increase the production of useful goods and services as quickly, and in as large a quantity as possible.