1920s >> 1927 >> no-279-november-1927

Who are the capitalists?

“Every Man a Capitalist” is the title of an article written by Sir Sydney Low, and published in the “Sunday Pictorial” (2.10.27). The sub-title is “‘How Wealth is Spreading Amongst the Workers.”

Sir Sydney accuses Socialists of being “dealers in popular unrest,” and states that for years past we have been saying that “the rich are growing richer and the poor becoming poorer.” Also, we have said this so often and so persistently that many earnest persons who are not Socialists are inclined to believe there must be some truth in the indictment. In fact, there is none. So says Sir Sydney.

Of course, we are very pleased to hear that we are making an impression upon “many earnest persons who are not Socialists.”

To show that the rich are getting poorer, Low tells us “they are not spending extravagantly, their lives are simpler and less luxurious than they used to be.” These unfortunate people are parting with “their large, expensive houses, and offering their estates for sale. Many of them protest that they are living upon their capital in order to pay their way.”

This is all very sad, but it is not proof that the rich are getting poorer. They may not be spending extravagantly because they desire to invest more; they may be living less luxurious and more simple lives in the interests of their health. But the really important point, which Sir Sydney overlooks, is that large estates cannot be sold unless there exist purchasers. Unless, therefore, he believes that the large estates are being bought up by unemployed miners and others who have been compelled to relinquish their former occupation, there must still be rich people willing to be extravagant and able to afford it.

Another factor ignored by Sir Sydney Low is that many of these estates have been broken up merely because of the tempting opportunity of netting big gains, owing to the demand for building sites.

Then to show how every worker tends to become a capitalist, Sir Sydney refers to the increase in the number of privately-owned motor cars. He says : “By the end of this year there will be 700,000 self-propelled private vehicles in England. And who owns them ? For the most part people of moderate and even small means.”

Our opponent, evidently thinking this fad not sufficient to convince the sceptical, put forth further evidence to show that some day every worker will be a capitalist. This time it is houses. He tells us that “since 1923 600,000 new houses have been bought by middle class and working class tenants.” These houses have been built with State, or municipal, aid. And then “hundreds of thousands of others already in existence or erected by private builders have been sold to occupiers of the same kind.”

“House owning,” he goes on, “is not the only method whereby the man of limited income is turning himself into a capitalist. He tends more and more to become an investor.” As evidence, Sir Sydney informs us, “National Savings Certificates are now issued to the value of over £642,000,000. It may safely be asserted that almost the whole of that £642,000,000 represents capital belonging to the small investor.” But does it in fact?

In 1922, that is, before the workers’ savings had been drained by five years of trade depression, unemployment, short time and lowered wages, the Montague Committee were only able to express the opinion that “at least half” of the total sold up to the 31st March, 1922, represented the subscriptions of small investors (see Colwyn Committee Report, page 21).

Mr. W. T. Layton, the Liberal economist and statistican, estimates that small investors hold £455 million out of a total £6,592 million, which makes up the Internal National Debt, the magnificent proportion of 7 per cent. (“Economic Journal,” June, 1927, p. 204.)

However, enough ! Is it the private ownership of a motor car, whether a Ford or a Rolls-Royce, that makes a person a capitalist? No. Is a man a capitalist because he owns the house in which he lives? No. Is it the possession of a few Savings Certificates that makes a man a capitalist? No.

What, then, is a capitalist? A capitalist is one who owns enough property in the means of living such as land, factories, railways, steamships, raw materials, etc., to be able to live without needing to work. The income derived from this private ownership frees the capitalist from the necessity of working for his livelihood.

It may be asked, what, then, is a worker?

A worker is one who, not owning any or sufficient property, is forced to sell his labour-power to the capitalist class, in order that he may live.

Sir Sydney speaks of the “lower middle class and the “higher working class.” This is “confusion worse confounded” as there are only two classes in modern capitalism, those who live by working and those who live by owning. And, as shown above, it is the manner in which a person obtains his or her livelihood that places him or her in one of these two classes.

As to wealth spreading out amongst the workers, heaps of evidence could be put forth to show the contrary to be true. First of all the workers are painfully aware of the constant dwindling in their wages, and ever-present unemployment.

In the report of the Ministry of Health, 1926-27, it is stated : “Poor Law Relief has risen nearly 350 per cent. since 1914, but outdoor relief has risen by over 1,000 per cent. The number of persons receiving out-relief were, in 1914, 387,796; 1927, 1,722,084 ” (“Daily News,” 16.9.27).

Then Mr. Harold Cox. who is a defender of capitalism, writing in the “Sunday Times,” 31.7.27., says: “In round figures pauperism in 1914 represented 21 per 1,000 of the population, and in 1927, as stated above, just under 40 per 1.000. It is, therefore, not far from the truth to state that the proportion of paupers to self-dependanf citizens has doubled since 1914.”

The above facts show the falsity of Sir Sydney Low’s argument. As capitalism develops, the major portion of the wealth produced ccncentrates still further into fewer and fewer hands. It is, therefore^ obvious that the poverty of the mass must increase relatively to the wealth of the propertied class.

And as bad as the lot of the workers may be at the moment, it will tend to become worse with the further development of capitalism.

The only solution to the poverty problem of the working class is not for individual workers to buy a motor car, a house, or a few Savings Certificates, but to organise in the Socialist Party in order to do away with capitalism, the cause of their poverty, and to bring into existence Socialism, the social system which will free them from poverty.


(Socialist Standard, November 1927)

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