Jack Fitzgerald
Source: Socialist Standard, April 1919.
Transcription: Socialist Party of Great Britain.
HTML Markup: Adam Buick
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While at the moment of writing final decisions have not been reached in the disputes in the Mining, Railway, and Transport industry, important facts have been revealed from which the working class can draw lessons.
The capitalist Press and the trade union leaders concerned have agreed that a strike of the workers engaged in these industries would be "a disaster," "an extremely serious matter," etc. These "labour leaders" have openly done all they could to prevent the men striking, not on the ground that the masters could win if they decided to fight in earnest, but on the shadowy pretext of "injury to the community" or "danger to the industry." When the master class took millions of wage-workers from production and sent them to slaughter their fellow-workers, these leaders were silent as to the "injury to the community" inflicted.
To help the leaders swindle the rank and file a Commission of Inquiry into the coal industry was formed. As so often happens in these inquiries, no awkward facts about the coal owners leaked out. When introducing the Bill to set up this Commission Mr. Lloyd George made the entirely unsupported assertion that if the miner's demands were granted the price of coal would rise by 8s. to 10s. per ton. Now this is one of the hoary, but very useful, lies that the master class and its agents—the journalists, economists, labour leaders and politicians—employ to mislead the workers. In this case Lloyd George at once started to contradict himself, as he drew a dark picture of the power of American competition in "our" European market.
But the American miner receives higher wages, reckoned in money terms, than the English miner. Yet American coal, according to Lloyd George, is cheaper!
Lloyd George's ignorance of the most elementary facts of economics will doubtless shield him from the necessity of attempting to explain the dilemma he has landed himself in.
One superficial answer, "Then why do the masters always resist a rise of wages if they are automatically made good by a rise in prices?" completely confounds the journalist and politician of the master class. For a full working out of the whole question the reader is referred to Marx's splendid pamphlet, Value, Price and Profit. Here we will only take one or two points from that work.
How are prices determined in any ordinary market? Immediately by the relations of Supply and Demand, ultimately by the cost of Production. Now a moment's thought will show that a rise in miner's wages will make no difference in the demand for coal. But without an increase in demand there will be a great difficulty in raising prices. Thus it is evident the coal owners, in the first place, must pay the increased wages from their profits.
"But," it may be asked, "does not a rise in wages mean an increase in the cost of production ?" Not necessarily. Cost of production is based upon the time taken, on the average, to produce a given quantity of any commodity. When the masters find themselves unable to raise prices after a rise in wages, they try to reduce the time taken to produce the particular commodity by (1) speeding up the workers, (2) cutting out little laxities, as lunch time, etc. If unable to apply these methods they try to improve their organisation, speed up transport, introduce new machinery, and so on. Sometimes these methods are so successful that the commodities are produced at a lower cost than before the rise in wages. In fact, generally speaking, the higher waged worker is the cheaper producer, as is shown by America in so many instances.
In general the masters charge the highest prices the market will bear, no matter how low the wages they pay, and pay the lowest wages the workers will accept, no matter how high prices may be.
One of the first facts brought out at the Coal Commission was that the profits of the coal owners had risen three-fold despite the increase in wages. Taking the figures, profits had risen (after paying £9,000,000 a year in royalties) from £13,000,000 (1s. 1d. per ton) in 1913, to £39,000,000 (3s. 6½ d. per ton) in 1918. The fact that the Government took part of this increased profit in the shape of taxes does not affect the point. What the capitalists do with their profits makes no difference to the workers who have been robbed to produce them.
The Powell Duffryn Steam Coal Co., with a capital of £657,202, had disclosed profits (after deducting depreciation, income tax, excess profits duty and coal mines excess payments) of about £5,261,000 in fifteen years ending 1918. The Ocean Coal & Wilson's Ltd., capital £3,390,000, paid in eight years over £3,500 000 in cash dividends and distributed £1,000,000 in bonus shares after making the deductions given above.
Manvers (Yorks.) paid 195 per cent, in ten years ending 1918, on the actual capital and paid off £285,500 worth of debentures. The Sheepbridge Coal and Iron Co., in ten years to 1918, paid 144 per cent, upon their capital. In 1918 a 33½ per cent, scrip bonus was paid. The Fife Coal Co. paid over 300 per cent on actual capital in ten years to 1918. In 1909 one bonus ordinary and one bonus 5 per cent, preference share were given for every four shares held. In 1918 there was a reserve of £500,000 and a carry forward of £126,456. This company owns a large percentage of the miners' houses in Fife, of which 80 per cent, have only two rooms.
All the above statements were given in the Daily Telegraph of March 18th, 1919.
The Consett Iron and Steel Co. paid 242½ per cent, in the six years 1913-1918, and in 1914 distributed £250,000 in bonus shares. The Navigation O Co. has paid its capital back four times over.
These figures do not disclose the whole case. In nearly every published balance sheet the miners' wages and the directors' fees are lumped together in one item. More or less ornamental figure-heads, often carrying a title, draw large sums yearly for doing nothing more intellectual than attending a meeting now and again and voting as the chairman directs.
More important still is the fact that under the item "Depreciation" the capital used up each year is repaid. This means that if 10 per cent. is set aside each year for depreciation, at the end of ten years the whole of the original capital has been replaced in addition to the dividends that have been paid year by year.
These few facts show how absurd was the laboured attempt on the part of the masters to claim that to grant the miners' demands would "ruin the trade," if not the country.
It was when the Reports of the Commission were given to the Government that the great lesson for the workers emerged. In announcing that the Government had accepted and would act upon the Report of the Chairman's section of the Commission and referring to the possibility of a strike, Mr. Bonar Law said
If such a strike comes the Government—and no Government could do otherwise—will use all the resources of the State without the smallest hesitation.
If such a strike came the mine-owners, if they decided to fight it out, could win by simply pitting their immense resources of wealth, an indication of which is given by the figures above, against the few pounds the miners could gather together. On the economic field the masters are in a far stronger position than the workers and can beat them any time they decide to fight to a finish. Yet in this, as in so many other cases, they threaten to use the overwhelming power of the State for their purpose because it is so much more speedy and decisive.
But how comes it that they can use the State for this purpose? Because on 14th December, 1918, the miners, in conjunction with the large majority of the other workers, placed the State in the hands of the masters when they voted the latter into possession of political power.
While the workers accept the poisonous nonsense that "capital should have a fair profit," while they swallow the lies and humbug of the labour leaders like Thomas, Brace, Williams, and so on, that the interests of the master class are the interests of the "community," or ''society," they will be easily led to vote their masters into possession of the power to rule society.
When the working class rids itself of this stupidity, and realises its weakness in the economic field against the power of the employers, then it will turn to the facts of its situation for a solution and find that the way to salvation lies through organisation for control of the political power. Not until that is assured can the workers own the means of life and operate them for their own benefit. When that lesson is learnt the day of Socialism will be dawning.