Two political myths

A general election is a time of heightened political interest but also one in which people’s basic political assumptions come to the fore. From following the election campaign, reading the election literature and from talking to people, it is clear that two assumptions dominate current political thinking, not just among the parties but among the public generally.

The first is that the people who inhabit the British Isles form a community with a basic common interest and that the election was about choosing the men and women to administer its affairs. That, in other words, governments represent the interests of all the people and that this is their role.

The second assumption is that the government is responsible for what happens in the country. That, for instance, if unemployment grows, if factories close, or if there is bad housing, then this is the fault of the government. It is believed that something could be done about such things if the government so chose, or if it pursued a different policy. This of course is the stuff of conventional politics. In the election the Labour Party suggested that mass unemployment was the fault of Mrs Thatcher, that she had deliberately created it because she is a heartless woman, but that if the Labour Party was in office things would be different as they would use the powers of government to get the economy expanding again. When Labour was in power, on the other hand, the Tories blamed unemployment which has been continually rising for over 20 years irrespective of the party in office on the bungling policies pursued by the government. And so on and so on.

It is questionable to what extent ordinary people really are taken in by these sham battles between professional politicians but it is certainly true that it is a widely held view that the government is to a large extent responsible for the way in which the economy operates.

Socialists share neither of these assumptions. We deny that governments do, or can, govern in the interests of the whole people. And we deny that governments can control the economy at all, let alone make it work in the interests of everyone. The people of Britain do not form a community with a common interest. We live in a class-divided society in which there is no common interest, but only conflicting class interests. Present-day society is divided into two main, but quite unequal, classes; those who own and control the means of wealth production (the farms, the mines, the factories, the ships, the warehouses, the offices) and the rest of us who depend for our living on working for a wage or salary. Those who own and control the means of production are only a tiny minority of the population. well under 5 per cent. Apart from about 5 per cent of self-employed — small shopkeepers, professional people and the like — the rest, over 90 per cent, are wage and salary earners.

Some people would not deny that society is divided into owners and non-owners, employers and wage and salary earners, but they would reject the view that there is a necessary conflict of interest between these two classes. For them, Capital and Labour have a common interest in cooperating to produce the wealth society needs to survive. But it can easily be shown that, to use their terms. Capital and Labour do not and cannot have a common interest.

What is Capital? Basically, a sum of money invested in production with a view to profit. The economic textbooks tell us that profit is the return or “remuneration” on capital. We could quarrel with this terminology but will let this pass as there is a basic agreement that what Capital seeks out of production is Profit. What Labour seeks, on the other hand, is a wage or a salary which is the price of the mental and physical energies that have been sold to the employer.

Since what is produced is divided into Profits and Wages and Salaries, there is clearly a built-in cause of conflict here: the share of Profits can only be increased at the expense of Wages and Salaries, and vice versa. Capital and Labour are in fact in continual conflict over the division of the wealth that has been produced. This is everyday experience and explains why there are trade unions and strikes.

But there is another factor which, for us. makes this conflict irreconcilable. As wealth can only be produced by work, by humans applying their menial and physical energies to nature-given materials, any non-work income such as profits can only come out of the product of somebody’s labour. Profits in fact arise out of the unpaid labour of the wage and salary earning class. Under capitalism, in other words, the wage and salary earning majority are exploited economically; they are employed solely in order to extract profits from their labour.

It is clear that under these circumstances the interests of the profit-taking class and the majority wage-earning class are completely antagonistic. The one class lives by exploiting the other. This is why to talk of there being a community with a common interest is just nonsense. There is no such community and no such common interest, and there never will be until the means of production have ceased to be monopolised by a section only of society.

This is the basic conflict of interest in society: the interest of the owning minority to preserve the existing set-up from which they benefit versus the interest of the wage and salary earning majority to take over and run the means of wealth-production for the common good. This is why in the end the real issue in the class struggle is: Capitalism or Socialism? Minority ownership or common ownership?

But if there is no common interest in present-day society for the government to represent, in whose interests do they operate? The answer is again supplied by everyday experience. The government, no matter what political party it is formed by, represents the interests of the capitalist employing class. Present-day society is capitalist. A majority of people accept and even want this, even though it involves their economic exploitation. The role of government under capitalism is, first of all, to preserve and to protect society’s basis — the monopoly by a minority over the means of production. In Britain this is done perfectly legally by upholding and enforcing existing private property rights.

The other role of the government in present-day society is to manage the common affairs, not of the imaginary community of the whole population, but of the capitalist class as a whole, of the tiny minority who own and control the means of production.

This has been borne out by the experience of governments of all political colours, Labour as well as Conservative. That the Thatcher Conservative government governs in the interest of the capitalist minority needs no demonstration. It openly defends the profit system. It openly attacks the wage and salary earning class and their rather feeble defensive organisations that are the trade unions. Its declared aim is to reduce the consumption of wage and salary earners as a way of trying to restore profitability.

This is quite normal. It has nothing to do with Thatcher, Tebbit and the others being heartless. It is the government fulfilling its role under capitalism. Labour governments have acted in exactly the same way. For the benefit of those with short memories, we would restate that the Wilson Labour governments between 1964 and 1970 and 1974 and 1976, and the Callaghan Labour government between 1976 and 1979 also attacked wage and salary earners through wage freezes, smashing strikes, and by cutting back on the so-called social services. Their declared aim, too, was to increase profits by reducing consumption.

So much. then, for the first myth that governments represent the interests of the whole population and act in the common interest. They don’t, and they can’t. As long as capitalism lasts they will act in the interests of those who benefit from the profit-making system which is capitalism; in other words, those who live off profits arising from their ownership and control of the means of wealth production.

In any event — and this brings us to the second current political myth — governments do not control the economy. They are not responsible for the way it operates and can’t do anything about it even if they wanted to, or rather even though they do want to. What governments control is not the economy, but political power, the machinery of government. They control the forces of repression which are the army and police. This of course gives them considerable power in certain fields, but it doesn’t give them the power to control the economy. The capitalist economy is something that functions in accordance with its own economic laws, which governments are powerless to change and which they must in the end accept and even apply.

The first feature of the economy is that it is a system of production for sale on a market with a view to profit. Making profits is the be-all and end-all of production. The basic rule is “no profit, no production” and this is a rule that governments must respect. Governments, all governments, must allow and encourage profits to be made and must refrain from actions that undermine or threaten them, at the risk of provoking stagnation in the economic sector concerned. This is a considerable restriction on what they can do to improve the lot of the majority class of wage and salary earners.

The second feature of the capitalist economy is that it is a world economy. There is no such thing as the “British economy”, the “German economy”, the “American economy”, despite what the papers say. What exists is a single, integrated economy which operates throughout the world, including (in the form of State capitalism) in countries like Russia and China. This means that even if a government were to control all industry within its frontiers (as is nearly the case in some of the state capitalist countries) it would still not control the functioning of the economy, and so would still have to conform to the dictates of the world market. In fact one definition of capitalism might be “the world market economy”. For the world economy is a market economy in the classic sense of the term: unplanned, anarchical, competitive.

Being anarchical the world capitalist economy moves in fits and starts, periods of growth being followed by periods of stagnation, which prepare the ground for the next period of growth, which inevitably ends in another period of stagnation, and so on. This cycle of booms and slumps repeats itself over and over again and there is nothing governments can do about it.

But at whatever stage of its cycle, the world economy is a competitive system in which States and enterprises are competing against each other to sell their goods profitably. Since they have to accept the prices fixed by the world market, the only way the competing capitalist States and enterprises can increase their profits is by reducing their costs of production. This can be done in a number of ways but the only effective one in the end is to introduce new, more up-to-date and efficient machinery and techniques of production.

This is yet another reason why governments must give priority to profits by keeping costs down, rather than to improving wages and social benefits, which increases costs. All governments. Labour as well as Conservative, do this, employing the same familiar language of “competitiveness”, “productivity”, “technological revolution”, “sacrifice today for a better tomorrow”, and so on. This means that no government can for long pursue a policy of increasing real wages or social benefits. In periods of stagnation and slump, when competitive pressures are greatest, governments are even obliged to follow’ the market’s downward pressure on wages and other costs and cut back their spending on social benefits. This is not a matter of choice. It is something governments are obliged to do, whether they want to or not, whether they are apparently pro-wage-earner (like Labour) or openly anti-wage-earner (like the Tories).

In other words, far from governments controlling capitalism, it is the other way round: governments have to frame their policies to fit in with the logic of capitalism. It is the capitalist economy which determines the policies governments must pursue.

Socialists are prepared to accept the full implications of this position: that if governments don’t control the economy then they can’t be blamed for rising unemployment, closing factories, falling wages and the like. Harold Wilson was right to declare that he had been “driven off course”. Thatcher and Tebbit are right when they blame the current high level of unemployment on the world recession — though it is not quite so clear that they realise the full implications of their position here. For in blaming unemployment on the world recession they are in effect blaming it on capitalism!

We also draw the further conclusion that, as it is the working of the capitalist economy that is responsible for the level of unemployment, no change of government or government policy is going to make any appreciable difference. Unemployment will begin to come down, if ever it does, only when world capitalism begins to move out of the stagnation phase of its cycle. As there is nothing governments can do to hasten this, their only possible course is to quite literally sit back and wait for the recovery of the world capitalist economy to materialise. The current Conservative government seems to have understood this and so makes no attempt to reduce unemployment.

That this is all any government can do is perhaps hard to swallow by those who want to do something about unemployment but it is the stark truth. Tory governments have no qualms about accepting it because they openly accept the logic of capitalism and willingly apply it. But this creates problems for parties like Labour which do contain some sincere but confused elements. But sincerity does not come into it. Any government of capitalism — and all governments are governments of capitalism — has to run the system in the only way possible: as a profit-making system in the interest of those who live off profits, against the interest of the wage and salary earning majority.

No government, however sincere or resolute or determined, can make capitalism work in the interest of the majority. Capitalism just cannot be reformed to work in such a way. The conclusion we draw from this is that capitalism should be abolished and be replaced by a new and different system, one based on common ownership and production for use on a world scale. For some reason the Labour Party refuses to believe the evidence of numerous Labour and similar governments throughout the world and thinks up all sorts of excuses for their failure — betrayal, not determined enough, not left-wing enough — rather than face the fact that they failed because they just couldn’t succeed.


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