1980s >> 1985 >> no-971-july-1985

Getting it made

Thump. The morning post drops on the doormat. Over breakfast I begin my inspection. A glossy mail order catalogue. Another invitation to play bingo in “your super Sun“. A second reminder about the electricity bill. And then — a brochure glowingly advertising a book that could revolutionise my whole way of life. Intrigued. I read on, a spoonful of cornflakes posed in mid-air.

The book is called The Science of Getting Rich, modestly described as the “single best source book ever written on the subject”, but curiously “not available in bookstores”. It is intended for those “whose most pressing need is for money — who wish to get rich first and philosophise afterwards” — presumably the sort of person not prone to frequenting bookstores.

How to get rich, the brochure tells me. is the “noblest and most necessary of all studies”:

 Whatever may be said in praise of poverty, the fact remains that it is not possible to live a really complete or successful life unless one is rich. We develop in mind, soul and body by making use of things and society is so organised that we must have money in order to possess things.

At last, good news for those of us accustomed to fretting over electricity bills — we need not philosophically resign ourselves to poverty much longer:

  There is a Science of Getting Rich and it is an exact science like algebra or arithmetic. There are certain laws which govern the process of acquiring riches. Once these laws are learned and obeyed by anyone, he will get rich with mathematical certainty.
Many people will scoff at the idea that there is an exact Science at Getting Rich. Holding the impression that the supply of wealth is limited. they will insist that social and governmental institutions must be changed before considerable numbers of people can acquire wealth. This is not true. Existing governments keep the masses in poverty only because the average person does not act in a Certain Way.

In 1980. according to the Inland Revenue. the richest one per cent of the population owned 23 per cent of the total marketable wealth in Britain, which amounted to £566,000 million. The poorest 50 per cent, on the other hand, owned less than six per cent of this wealth. Translating these figures into pounds and pence, the average person among the richest one per cent of the population held £315,000 in private wealth while the average for the poorest half of the population works out at roughly £1,600 each. In fact, this probably understates the degree of wealth concentration because of the greater ease with which the wealthy can withhold information about their assets for taxation purposes.

Is there any indication that this marked inequality is becoming less so in the long run? In his famous work, Equality, first published in 1931, the historian R.H. Tawney wrote trenchantly of the tremendous inequalities that existed then in Britain. But by the time the fourth edition of his book appeared in 1952, Tawney had come to the view that under the post-war Labour government there had been a discernible move “towards the conversion of a class-ridden society into a community in fact as well as name”. The subsequent three decades were cruelly to expose this for the wishful thinking it was.

While the share of the marketable wealth held by the richest one per cent has indeed plunged dramatically from 60 per cent in 1923 to 47 per cent in 1950 to its present level of 23 per cent, this has not been reflected in any significant increase in the proportion of wealth held by the great majority. Instead, as A. B. Atkinson has pointed out in his Unequal Shares, “what distribution there has been is not between the rich and the poor but between the rich and the rich”, with the lesser rich gaining in relative terms. The bottom 80 per cent of the population still own less of the total wealth than the richest one per cent.

As for Denis Healey’s boast that he would “squeeze the rich until the pips squeaked”, that richest one per cent actually increased its share of the wealth in the first few years of the last Labour government. In contrast, the share of the wealth held by the poorest 50 per cent marginally declined between 1974 and 1980 (Guardian, 18 March 1984). Apparently, “it happens quite regularly that the rich get richer under Labour governments and poorer under Tory governments because of the strong influence of house and share prices” (Guardian, 18 October 1983). Clearly, in the politics of the market-place, egalitarian sentiments count for little.

But what about the claim made in the brochure? Is it realistic still to hope, in the face of this chronic inequality, that “considerable numbers of people can acquire wealth”? Before examining why this is simply not possible, we need to dispose of one or two false arguments.

The first is that however unequal our society is today we are all of us, better off than our grandparents were. We eat better, live longer, travel far more widely and even the poorest have access to the sort of technology undreamed of by our forebears. Broadly speaking this is quite true, although there is a danger here in confining our observations along too parochial lines. Taking a wider perspective this argument is by no means as clear cut and convincing as it may seem. Certainly in some parts of the world, especially in sub-Saharan Africa, it is highly questionable whether in absolute terms the majority are better off than they were, say, two or three decades ago. Per capita food production in sub-Saharan Africa has fallen continuously and, irrespective of drought, by no less than 20 per cent in as many years as subsistence farmers have found themselves increasingly squeezed by commercial pressures.

But in any case the argument itself is not relevant to the central issue at stake. This is how Marx saw it:

  A house may be large or small; as long as the surrounding houses are equally small it satisfies all demands for a dwelling. But let a palace arise beside the little house, and it shrinks from a little house to a hut. The little house shows now that its owner has only very slight or no demands to make; and however high it may shoot up in the course of civilisation, if the neighbouring palace grows an equal or even greater extent, the occupant of the relatively small house will feel more and more uncomfortable. dissatisfied and cramped within its four walls.
A noticeable increase in wages presupposes a rapid growth of productive capital. The rapid growth of productive capital brings about an equally rapid growth of wealth, luxury, social wants, social enjoyments. Thus, although the enjoyments of the worker have risen the social satisfaction that they give has fallen in comparison with the increased enjoyments of the capitalist, which are inaccessible to the worker, in comparison with the state of development of society in general. Our desires and pleasures spring from society; we measure them by society and not by the objects which serve for their satisfaction. Because they are of a social nature, they are of a relative nature. (Wage Labour and Capital)

A second is the myth of the “self-made man”. The presumption is that if one person has been able to rise from rags to riches, then so too can others. All they lack is the necessary drive and initiative. It must be said firstly that the so-called self made man is something of a rarity, an exception to the rule that wealth, by and large, gravitates to those who already have it;

  Research by historians does show that the rich are not, on the whole, self-made men like, say, the publishers. Robert Maxwell, or the computer tycoon. Sir Clive Sinclair.
This has been demonstrated by Professor C D Harbury. who compared the wills of men leaving large sums in selected years from the 1950s to the 1970s with those of their fathers, traced through probate and birth registration records at Somerset House. Harbury found that 60 per cent of men leaving £100,000 or more since the 1950s had rich fathers. And some three quarters of these had fathers whose fortunes were ten times the amount that would have included them amongst the richest 10 per cent of the population.

(New Society, 6 October 1983)

The millionaire Malcolm Forbes, when asked how he came to be so rich replied that it was all due to “sheer industry and ability — you spell those words i-n-h-e-r-i-t-a-n-c-e”. The case of one Gerald Grosvenor illustrates this particularly well. Otherwise known as the sixth Duke of Westminster. Grosvenor is reputedly the richest man in Britain with a personal fortune estimated as “somewhere between £1,000 and £2,000 million” (Sunday Mirror, 9 January 1983). This stupendous wealth derives chiefly from extensive landholdings both in this country and abroad. Contrary to what the more politically crass defenders of the status quo would suggest, it is not “superior intellect” or some other such personal attribute that has enabled the duke to amass this wealth. If anything, by the standards which these defenders would judge “intellect”, Grosvenor rates as a nondescript — he has two O levels to his name. Where he differs from his intellectual peers is in having had the right ancestors:

  Unwitting founder of the fortune was Mary Davies, who in 1677 married Sir Thomas Grosvenor and brought with her as dowry some damp and sub standard farmland. It is unlikely that the recipients thought much of this until the expansion of London made that land valuable. Mary Davies’ marsh land is now 300 acres of swishest London covering Mayfair and Belgravia.

(New Internationalist, July 1984)

But whether the fortunes of the rich are inherited, or acquired within their lifetime, is really beside the point. What matters is the source of that wealth. To understand why the rich are rich is to understand why the poor are poor. The plain fact of the matter, as the American social scientist Michael Parenti points out. is that “Hard work seldom makes anyone rich . . .  the secret to wealth is to have others work hard for you”. He might have added that the secret to getting others to work hard for you is to ensure that they have no alternative. In short, to ensure that they remain in a state of relative poverty.

In the more forthright language of marxism. present-day society is fundamentally split into classes. The division between rich and poor does not simply reflect a disparity in the amount of wealth at a person’s disposal. In a more important sense it reflects a difference in their economic relationship to the means of wealth production. The rich are rich because they possess capital — that is, wealth that is used to produce more wealth. The small minority of the population who provide the bulk of the capital invested in industry (the richest 3.2 per cent of the population in Britain account for 84 per cent of all listed shares) — in other words, effectively own and control the means of wealth production — are called the capitalist class. If rich individuals did not utilise some of their wealth as capital they would sooner or later sink into a state of poverty depending on the size of their fortune and the rate at which it was consumed.

The poor, on the other hand, possess little or no capital to speak of. As a result they are effectively divorced from ownership and control of the means of wealth production and are compelled to sell their working abilities to the capitalist class in return for a wage or salary — the cost of maintaining themselves in reasonable working order. This great majority of the population — called the working class — produces all the wealth in society. The value of this wealth, however, far exceeds the value of the wages and salaries the working class receives — the difference between these two values being known as surplus value.

Here in fact is the source of the wealth of the capitalists. Some of this wealth is consumed in a conspicuously affluent lifestyle; some of it is reinvested as capital, perpetuating the economic stranglehold of the capitalist class over the lives of the great majority. At any point in time it is in the interests of the capitalists that the amount of profit accruing to them should be as large as possible, while competition between capitalists makes doubly certain that they pursue their interests by bankrupting those who do not. The drive to maximise profits is expressed as a constant tendency to depress wages and salaries, for the relationship between them, as Marx pointed out, is antagonistic:

 What, then, is the general law which determines the rise and fall of wages and profit in their reciprocal relation? They stand in inverse ratio to each other. Capital’s share, profit, rises in the same proportion as labour’s share, wages, falls, and vice versa. Profit rises to the extent that wages fall: it falls to the extent that wages rise.
(Wage Labour and Capital)

At the very heart of capitalism is a self-regulating process that works to ensure that the way is firmly blocked for “considerable numbers of people” becoming rich in a relative sense. This is why Thatcher was, for once, quite correct to assert in a famous speech she made in 1975 that “the pursuit of equality is a mirage” In her opinion, “what is more desirable and practicable than the pursuit of equality is the pursuit of equality of opportunity”. Just how the pursuit of equality of opportunity is at all “practicable” in an unequal society in which the opportunities expand in proportion to the wealth at one’s disposal, she did not explain. But if the pursuit of equality is a mirage in capitalism it is because it simply focusses on the pattern of wealth distribution. It overlooks the underlying economic relationships that inevitably generate that pattern.

Some have argued that the answer lies in the nationalisation of industry because “public ownership” must pave the way for greater equality. Practical experience tells a very different story. The following excerpt from a statement (reproduced in the Observer, 16 August 1981) by Mykola Pohyba, who was imprisoned for campaigning for workers’ rights in a country in which industry is largely in the hands of the state, needs no elaboration:

  As a worker relegated to the lowest rung of the Soviet social ladder, I personally have experienced economic, socio-political and national oppression. Understandably, I could not help but give thought to and consider the real reasons for this oppression With time I realised that my fellow workers were also victims of exploitation and that this exploitation was greater the lower one found oneself on the social ladder.
I came to the conclusion that ultimately it is the state which is the exploiter along with the State-party bourgeoisie which is in its service and which is the one wielding the real power in the country. The socialism and internationalism of which one so often speaks in the Soviet Union is nothing more than a smokescreen for a means of production and distribution of material goods which is not in the least socialist.
In short, I have come to the conclusion that our country is actually a State capitalist society with a totalitarian form of government.
In informal conversations with fellow workers, I expressed some of my views regarding Soviet reality. I saw nothing wrong in doing so. Specifically, I noted that the real causes for our impoverished condition are to be found not in mistakes committed by the administrative apparatus but in the very system of production which, in actual fact, is capitalist.

There are those who say that socialism is about the “politics of envy”. The views of an Australian multi-millionaire, Lang Hancock, say all that needs to be said about that:

  Riches to more riches is the story: wealthy pastoralist finds mountains of ore. Hancock may not be free with his money but he showers the nation with advice and his own brand of “philosophy”. He was the original owner of Whitenoom asbestos mine which has been linked to more than 200 asbestos disease cases, including 45 deaths: “Some people have to suffer so that the majority can benefit from asbestos”. He declines to contribute to a trust set up to help victims: “I believe I have saved millions of lives by producing asbestos”.
He is aware, however, of the problems facing “half-caste” aborigines and suggests a solution: “. . . dope the water up so they were sterile and breed themselves out” thus “curing people who are in a miserable situation to stop them bringing more unfortunate people into their misery”.
He is for . . . a White Australia policy and for the Ludwigs and Henry Fords: they create jobs for millions “but from the point of view of contributing something to the general welfare of the human race, well the average run-of- the-mill bloke would not make much difference if he were on the earth or not, would he?
(New Internationalist, July 1984) 

Socialism is about the politics of indignation. Were it not, it would be hardly worth the name. The disgusting conceit of a parasite like Hancock who owes all his wealth to the very class of people he contemptuously maligns, is not important in itself. Its significance lies in the fact that it consciously reflects the very nature of a social system that adds insult to injury as it legally robs the useful majority of the fruits of its labour. To describe socialism as the politics of envy is cynically to obscure this reality. It is to overlook what socialism is actually about

Socialism is not about the ceaseless pursuit of more commodities on a treadmill of keeping-up-with-Joneses. It is not about levelling down the rich so that the living standards of the poor might rise. It is about a fundamental change in social relationships that will make the very concept of the “standard of living” superfluous. It is about a new type of society in which the “politics of envy” will be a meaningless term from a bygone age; an age which judged a person’s worth by the amount of wealth they could command yet hypocritically condemned as “envious” those who wished for a world that would conform to their material self interest.

Robin Cox