1960s >> 1961 >> no-683-july-1961

Finance and Industry: Capitalism’s Sensitive Spot


Capitalism’s Sensitive Spot
It has long been noticed by observers of capitalism that among the crimes it punishes most savagely is anything which affects the sanctity of the currency, In Britain the maximum penalty for counterfeiting gold and silver coins (which includes the current cupro-silver substitutes) is penal servitude for life. Nothing more clearly highlights the essentially capitalist nature of the Russian social system than the news that the extension of the death penalty in that country includes the offences of uttering or passing forged currency or securities, and there are sentences up to five years and confiscation of property for speculators.

According to David Floyd (Daily Telegraph, 2.6.61) a big case is now before the courts of speculators who are alleged to have made 20 million roubles in a year (2½ million at the official Russian exchange rate) by illegal dealings in foreign currencies and gold.

European
 Common Market
In an interesting article on why British capitalism ought to join up with the Continental group (Germany, France, Italy, Belgium and Luxembourg and Holland) to form a solid unit with 250 million population, the City Editor of the Sunday Times recently argued that in no other way can capital be found large enough to meet the needs of the coming world grouping There will, he says, be four dominant World Powers, Russia, America, Europe and eventually China; and unless Britain joins in, British capitalism even with government aid will not be able to provide the vast capital needed for large-scale industry, automation, and military developments including rockets. He expresses the opinion that Russia has been spending on rockets as much as the total British cost of arms and armies.

In the 19th century and up to 1939, British capitalism could keep abreast of the development of costly techniques, but can now no longer do so.

The Employers’
Attitude
Because under near “full employment”, it has not been quite so easy for employers to discipline the workers as it was before the last war, it is often claimed that worker-employer relationships have undergone a fundamental change. Mr, Appleby, Chairman and Managing Director of the Black and Decker power tools firm, in an interview published in the Evening Standard (29.5.61) expressed a point of view that reads just like any past declaration that the capitalist is in business to make profits, and does so by a mixture of stick and carrot: “Bob Appleby runs the Black & Decker concern here on one main principle which he explains quite bluntly, ’ We are in business to make profits’, he says. The more pressures and incentives we can exert on people, the better we shall succeed.’ ”

Everyone in the factory, from managers downwards, is paid on a basis that includes a considerable element for increasing output.

It seems to have been very good for the firm as its profits have gone up in ten years from £260,000 to £575,000.

The Cost
 of Advertising
Though advertising costs are sometimes very high for particular articles, especially when a new product is being launched or there is fierce competition for the market, the total cost of all advertising is not as large as might he expected.

According to an estimate of the expenditure on all forms of advertising made by Dr. Mark Abrahams and published in the Observer (19.3.61) the total in 1960 was £455 million. It has however been rising fast and is expected to touch £500 million this year.

Edgar Hardcastle