1920s >> 1928 >> no-290-october-1928

Questions on Socialism

Sir,—(1) In your object the word “exchange” does not appear. May I ask: ”How and by what means shall we secure from other countries the commodities which we require and which are not grown here?”

(2) “The working class does not pay rates or taxes which are levied upon property—the workers are property-less, therefore they do not pay.” So said one of your propagandists in Hyde Park. Arising out of this, may I put another : “Do not the workers pay indirectly through higher rents, transport, food, clothing, etc? ”

I somehow feel that all these levies on property are passed on to the worker. I feel that my class pays all of it.

Can you please spare a few lines in one of your issues to put myself and others wise on this?

I am, yours, etc.,
“INTERESTED.”

OUR REPLY.

(1) “Interested” will readily see the solution of the problem he raises when we remind him that Socialism can only come into being by replacing capitalism internationally. When he asks “By what means shall we secure from other countries,” etc., he is thinking of England as a national political unit, but with Socialism the need for these national units claiming sovereign power over all internal affairs will have passed, just as city states and other kinds of full local autonomy were rendered obsolete by the formation of the modern nations.

Socialist society, through its central organisation, will arrange for the production of goods where natural and man-made conditions are favourable, and will secure their distribution to the localities where and in the quantity required.

“Exchange” does not refer to the transport of goods from place to place, but to their transfer from one private owner to another. At present it is not “England” which exchanges goods with, say, “America,” but one private owner in England (quite possibly an American citizen) with another private owner in America (possibly an Englishman).

The abolition of private ownership renders this process of exchange unnecessary, but leaves the process of distribution (or transport) as before. Already you can see illustrations of the distribution of commodities from country to country without any act of exchange. When Mr. Henry Ford sends motors or parts from Detroit to his works at Manchester, no act of exchange takes place. This is because the goods remain in the possession of the original owner. When society itself is the only owner, goods will move within the boundaries of that society without any act of exchange.

(2) Are rates and taxes a burden on the workers ?

The Socialist says that all the wealth of capitalist society is produced by the working class, but is the property of the capitalist class, who own the machinery of production (the factories, railways, etc.). The amount received back by the workers in the form of wages and salaries is only a part of the whole. The question we have then to consider is this : Do the expenses of administering capitalism (i.e., the rates and taxes) come ultimately out of the workers’ share, out of wages, or do they come out of the capitalists’ share, rent, interest and profit? The question is not answered by saying that the price of certain articles bought by the workers is higher than it would be if no tax were levied on them. What we have to discover is whether the workers would be better off if taxes were reduced or abolished.

The Socialist says No !

The workers on the average receive a wage sufficient to produce and reproduce that degree of energy and skill required by the employing class. If the cost of providing the necessary food, clothing, education, amusements, medical attention, etc., rises, then the employers must, in the long run, pay higher wages or see their employees deteriorate in efficiency (i.e., in profit-producing capacity).

When prices fall, wages follow.

The figures prepared by the Ministry of Labour for the Balfour Committee support our contention.

These figures, taking March in each year, give a rough approximation of the movement of prices and wages between 1920 and 1927. Both columns represent the percentage increase over the 1914 level :—

  Wages Prices
1920 130-135 130
1921 160-170 141
1922 100-105 86
1923 70 76
1924 70 78
1925 75 79
1926 75 72
1927 75 71

As will be seen from this, during the first year wages and prices were both about 130 per cent. above the 1914 level. In 1921 and 1922 wages were ahead; in 1923, 1924 and 1925 prices were ahead; and in the last two years wages were slightly above the price level again. On the whole, wages followed prices fairly closely. The purchasing power of the workers remained almost constant.

A reduction in the cost of living caused by the reduction or abolition of taxes merely enables the employers to purchase labour-power more cheaply. The position of the workers remains unchanged.

When “Interested” says that he feels that the working class “pays all of it,” he is somewhat off the track. The workers produce all of it, but all of it when produced belongs to the capitalist class. The amount paid to the workers as wages and salaries is roughly sufficient to reproduce their skill and energy. The capitalists are compelled to pay away this amount, and are equally compelled to pay away the amount required for administering Capitalism. Any reduction in the cost of maintaining the workers (e.g., by the introduction of prohibition) or in the cost of political administration, leading to a reduction in rates and taxes, is so much clear gain to them, but not to the workers.

If “Interested” is still not clear, we shall be pleased to answer further questions.

H.

(Socialist Standard, October 1928)

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