Source: Militant, no. 73 (March 1971)
Transcription: Francesco 2009
Proofread: Fred 2009
Markup: Niklas 2009
According to official figures the cost of living has increased by nearly 9 percent in the last 12 months. The government’s general index of average retail prices rose by two points in January to reach the record figure of 147. This is before the increase caused by decimalisation and the rounding up of prices. [Note: decimalisation involved abandoning the old division of the pound into 20 shillings and 12 pence to each shilling and the adoption of the present system of 100 pence to the pound]. Dearer tomatoes, meat, beer, petrol and public transport were among the goods which rose in price. Now food manufacturing prices are increasing by 10 percent over a year ago. Average charges for rents, services and retail goods have all been going up.
This is the situation after the Tories sneaked into power with Heath’s claim that he would bring down prices!
At the same time production increased in 1970 by less than 1 percent! Thus the Tories bid fair to rival their transatlantic capitalist competitors, who have succeeded in simultaneously increasing inflation, and increasing unemployment, and a fall in production in America.
Unemployment has now reached over 721,000 and some capitalist economists are talking about the possibility of reaching 1 million before the end of the year. Thus unemployment will be reaching the figures totted up by British capitalism before the war. Mr. Davies, former chairman of the CBI and the watchdog of the industrialists in the Cabinet, is still mouthing phrases warning that the government will not help “lame ducks”. “The country must not subsidise ‘lame duck’ companies in either the private or public sectors.” Thus Rolls Royce was allowed to go broke in the interests of the giant monopolies which dominate the economy.
Making the position of Tory capitalism crudely clear, he declared in the same speech on Teesside on February 19th that “his Labour predecessors believed that producing investment was an end in itself. The fact that it might be unprofitable or uneconomically located seemed to them of substantially less importance than the fact that it should exist.” Translated into simple English, in Marxist terms, the capitalists do not produce clothes, food, or housing, because people need them, but only if they can make a profit, an ample profit at that.
Meanwhile the fall in the rate of investment is assuming catastrophic proportions. According to the Economist of February 21st the fall in machine tool orders in the last 12 months has reached the figure of 58 percent. A fall in the already low level of investment of more than half.
It seems a daft policy with growing unemployment and production falling to restrict the amount the workers can buy. But there is method in the madness of capitalism. Davies went on to declare that the containment of wage inflation was the first priority in economic policy.
“It is for this reason that we will use all our influence against the runaway level of pay claims, be they put forward by electrical workers, postmen or within the field of private industry itself.”
“Make no mistake, this is the Achilles’ heel of the economy today, and until it is remedied no amount of exhortation or inducement is going to unleash the full and necessary vigour of industrial investment upon which our whole future prosperity depends.”
The reason for this apparently crazy policy, which the Labour and trade union leaders with the so-called Communist Party hollowly echoing them, have criticised, is rooted in the nature of the capitalist system. Capitalists will only increase investment if the result at least is an increased amount of profit and there is not too steep a decrease in the rate of profit, i.e. the rate in relation to the amount invested. In 1970 there was a fall in both the rate of profit and also of the amount amassed. Profits of the biggest companies fell from £4,500 million to £4,000 million, in 1970 in comparison with 1969.
Profit is only the unpaid labour of the working class, hence the capitalists can only increase the profitability of industry by keeping down the wages of the workers or increasing exploitation by increasing productivity, or the amount of surplus extracted from each worker, or if possible a combination of both. Hence the cold and brutal cruelty of the employers and the government in relation to the modest claims of the workers for wage increases. It arises from the frightful realities of their system.
At the same time the real motivation of the government in introducing the Industrial Relations Act ties in with their wages policy. They wish to turn the unions into tame tools of the government, and to hamstring the workers and especially the shop stewards, and weaken their resistance to the impositions of the employers.
Under these conditions only the organised resistance of the trade unions can preserve standards of living and at least get a modest increase in standards. Trade unionists and Labour Party workers must fight to maintain standards. Brother Jack Jones of the T&GWU declared at a lecture at Warwick University on February 18th that to guarantee present incomes and to increase these by 5 percent a family which had £20 clear income would need at least an increase of £5 a week this year.
Yet large sections of the workers earn far below this amount. At the same time increases in workers’ wages are rapidly cancelled out by rising inflation. Taking account of this, comrade Jack Jones declared, “That is why we in the unions are increasingly looking for the inclusion within agreements of a cost of living clause that will protect our members.”
This is the answer to the problem of the ever rising increases in the cost of living. But it must be spelled out clearly [by] the unions, especially the T&GWU which claims to stand on the left. But to be fully effective the TUC, must launch a campaign on the question demanding a sliding scale of wages to be linked to the cost of living, with a guaranteed minimum for all. The index not to be the phony one of the government but to be worked out by experts appointed by the TUC.
The T&GWU has effectively scotched the hypocritical campaign of the capitalist press attempting to use the plight of the pensioners to play them and sections of the “public” against the unions, by demanding a pension of £16/10/- [£16.50]. This too should be linked to the cost of living like the wages of the working class.
The government and the capitalists and their hireling press will claim, as they are already claiming for the modest wage demands, that the “country” cannot afford it. What they mean is that the capitalist system and its insane economics cannot afford it. So much the worse for capitalism!
The Labour Party, the TUC and the co-ops must begin a joint campaign against the Industrial Relations Bill, unemployment, the cost of living, and the cost of capitalism. They must be linked together in a campaign for a Labour government pledged to carry out socialist policies.
Britain has the wealth, her workers have the skill, there is science and technique in abundance. The banks and insurance companies together with 350 monopolies control 90 percent of the economy of the country.
It is time to use the resources created by the labour of the working class in the interests of the working class and the people as a whole instead of for the benefit of a tiny handful of exploiters. Nationalise the banks, the insurance companies and the 350 monopolies with minimum compensation on the basis of need. Re-nationalise the profitable sections of nationalised industry which the Tories hand over to private capital, without compensation. Establish workers’ control of industry and the management of industry by the trade unions. A plan of production could be prepared drawing in all sections of the population, especially the working class, engineers, scientists and technicians, but including the co-ops, housewives, and small farmers, shopkeepers and businessmen.
Those of little faith in the working class have had their answer in the response to the calls for strike action and the mighty demonstration of 150,000 in London. The labour and trade union movement are all-powerful if they give the working class a perspective and clear objectives.
The ruling class have launched their ferocious attacks on the standards of the workers and their shield the union movement. We must not only beat back this attack, but make it impossible for future attacks latent in a class society. End the cause of the disease. Labour to power on a socialist programme!