SOCIALISM AND CAPITALISM

Press, Volume LXX, Issue 21087, 12 February 1934, Page 15

SOCIALISM AND CAPITALISM

IMPROVEMENT OF PRESENT SYSTEM ADDRESS BY MR W. MACHIN That an improved state of affairs would never come from a development of the principles of socialism but from a modified form of the present capitalistic system was the subject discussed by Mr W. Machin in an address to the Christchurch branch of the Socialist party on Saturday night. Mr T. West was in the chair, and there was an attendance of about 100.

Mr Machin said that when he had finished his audience would probably tell him that he knew nothing of socialism, but during his life he had enjoyed an association with many socialists. When he knew he had to go into the lion's den that night, ho had asked the chairman if he would give him some book which he regarded as a text book of the Socialist party, and he had handed him a book Which he had read with considerable interest. It was Frederick Engel's Landmarks of Scientific Socialism, and any definitions of socialism which he would use would be taken exclusively from that book so that if they said he was wrong in his definitions they would be quarrelling with their own bible—or the bible which the chairman had put before him. Mr Machin said he would deal as far as time permitted with such matters as the exploitation of the worker, his enlargement of Carl Marx's theory of surplus values, his suggestion of the abolition of classes, the suggestion of equality and uniformity for everybody, and the suggestion of the seizure of capital. Exploitation of the Worker Running right through that book and other socialist doctrinaire books was the suggestion that the worker was exploited, and always had been, that he worked for a bare subsistence while the capitalist took the surplus of what he produced, that the capitalist was becoming richer all. the time, and that the worker was becoming poorer. Engels said: "It was shown that the appropriation of unpaid labour is the basis of the capitalistic mode of production and the robbery of the worker is carried out by its means; that the capitalist, although he buys the labour-force of the worker at the full value which it possesses in the market as a commodity, yet derives more from it than he has paid for it, and that in the last instance this surplus creates the total amount of value from which the capital steadily increasing in the hands of the capitalistic class is amassed. The phenomenon not only of capitalistic production but of the creation of capital has thus been explained." They could not secure a clearer example of what was meant by the robbery and exploitation of the worker than that, said Mr Machin. The people were to have a higher standard by the whole of the surplus of production of the labourer being divided among the labourers themselves. Mr Machin said he would like to remind them that there were more pedple in the world to-day enjoying a higher standard of living through the present system than there ever had been before in the history of the world. He suggested that most of the workers were small capitalists, and said that post office and trustee savings banks had 1,000,000 depositors. There were only 1,500,000 people in the Dominion, and yet their deposits amounted to more than £52,000,000. That, he claimed, was not a bad figure for a democratic country. He said he could enlarge on that by telling them of the joint stock companies and tha government stocks held presumably by the small capitalists who would not regard it as beneath them to call themselves members of the working class. Mr Maehin claimed that it was the worker himself who provided a large share of the capital of the world which was presumably exploiting the worker, and if they cared to compare New Zealand with some of the Utopias that were pictured 200 or 300 years ago they would find that none of them suggested a standard of living such as that enjoyed by the average New Zealander at the present time.

In rebuttal of the suggestion that the worker was invariably exploited, Mr Ma chin said he would remind his listeners that in all combinations where capital and labour came together wages were paid first, and it was frequently found that where the capital was entirely lost and the business landed into bankruptcy, the worker had received a very disproportionate share of the returns from the business in his wages which had priority over everything else. Mr Machin said that if they tock thcindex figures for the 25 years before 1914 to the present date they would i'md that the shibboleth raised by Engels and Marx had lost its force. Theory of Surplus Value Mr Machin then proceeded to deal with the statement that the worker produced all that they called wealth. Engels said:— "The entire development of human society from the position of savagery began from the day when the labour of a family resulted in the production of more than was necessary for its support, from the day when a part of the labour was no longer expended on mere means of living but was transformed into means of production. A surplus of labour product over and above the cost of the maintenance of labour, and the creation and increase of a social production and reserve fund out of this surplus was and is the foundation of all social, political, and intellectual development. In history up to the present time this fund has been the property of a certain superior class which has, with its possession, also the political mastery and the spiritual supremacy. The approaching social revolution will make this social production and reserve fund that is the entire mass of raw material, instruments of production, and means of life for the first time really social property, in that it will put an end to its monopolisation by the superior class and make it the common possession of the entire society.

"It is one of two things. Suppose value shows itself in the cost of maintenance of the necessary labour, that is in present society in wages. If such is the case every worker gets the value of his product in wages, and the robbery of the working class by the capitalistic class is an impossibility. Let it be granted that the cost of maintaining a worker in a given society is three marks. Then the daily product of the worker is, according to the popular economist, of the value of three marks. Now let us consider that the capitalist who employs this worker takes a profit on this product and sells it for four marks. Other capitalists do the same thing. But thereupon the worker can no longer maintain himself with three marks a day, it will cost him four marks. Other conditions remaining the same, wages expressed in terms of the means of life must remain the same, and wages expressed in gold will rise therefore from three to four marks daily. What the capitalists gain in the form of profit on the working class they have to return in the form of wages. So we are just where we were at the beginning. If wages signify value, no plunder of the working class by the capitalist is possible. But the creation of a surplus is impossible if, ac-

cording to our hypothesis the workers consume as much as they produce. And since the capitalists produce no value it is impossible to see how they can live. And if such a surplus of production over consumption does exist, if such a production and reserve fund exists in the hands of the capitalists, there is no other explanation possible than that the working class uses only enough values for its own maintenance and turns over the rest of the goods which it produces to the capitalist. "On the other hand, if this production and reserve fund actually exists in the hands of the capitalist class, if it has really come into existence through the piling up of profits (we will leave rent out of the question for the present), it necessarily comes from the accumulated profits of the capitalist class taken from the working class over and above the sums paid by the capitalist class to the working class in the form of wages. Value therefore does not depend upon wages, but upon the amount of labour. The working class renders to the capitalist class a greater amount of value than it receives in wages, and thus the profit of capital as of all other forms of the appropriation of unpaid for products of labour is to be explained on the simple ground of the surplus value discovered by Marx." Mr Machin said that according to that the worker produced all the wealth. The capitalist might buy a site, build a factory, fit it up with machinery, buy raw material, secure his workers, and pay some was'es. He had not yo; drawn anything because he had sold nothing; but immediately he sold something from that factory, irrespective of the capital which had gone into it, the total value of th~ product belonged to wages. Was there to be nothing for the thrift, for the enterprise, skill, management, organisation, and for the risk that was entailed in putting all the capital into a business form which both the worker and the capitalist were supposed to draw their returns? How, he asked, was interest to be paid, and how was depreciation to be "provided for? Demand for Equality Referring to the socialist demand for equality, and for the abolition of classes, Mr Machin asked if nothing was to be given as a reward to the man who spent his leisure hours studying and preparing to make himself better equipped for his work. Mr Machin thought that the class distinctions were gradually being whittled down, and he thought that what the socialist really meant was a whittling down of the disparities that had existed. Then, again, referring to equal pay, did it not matter whether a man v/orked harder and was of more value to the community? Should he not receive anything more for it?

Dealing with the seizure of capital, Mr Machin asked where they would secure the money to pay their interest. If they were going to buy out all the factories, they would have to pay interest on the money. He suggested that the socialists had not realised the impracticability of the suggestion. Defence of Capitalism In defence of the capitalistic system. Mr Machin pointed to the improved standard of living of the workers during the last 100 years when more progress had been made than during the previous history of the world. He asked his hearers to consider the social services, the amenities, and the national insurance which was inaugurated about 1909. He admitted that the great number of unemployed was something of which they should be ashamed, but their present industrial system was very young—it was only about 100 years old, and it had many imperfections—but he was sure it would be altered. A better state of affairs would never come about in the way Carl Marx wished. It would come about through the development of the present system, shorn of its weaknesses and injustices.

Mr Machin suggested that it would probably bn found that the system of the future which would evolve and which would give a better standard for everybody would probably be not an admixture of the principle of doctrinaire socialism and capitalism but the development of capitalism from which had been taken away the crudities which it had not had time to lose during 'the last 100 years. At the conclusion of Mr Machin's address, a number of those present expressed their side of the question, and after Mr Machin had replied, he was accorded a cordial vote of thanks for his address.