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Ernest Bevin and G.D.H.Cole



For what does the policy of the present Government amount to? It came into office with the declared intention of maintaining the gold standard at the old parity. It knew that this policy involved not only drastic retrenchments on the social services and a total stoppage of all large schemes of national economic development, but also the cutting down of insurance benefits to the unemployed, and the handing over of a million or more of them to the mercies of the poor law authorities, and also a great capitalist offensive to bring down wages in every trade, until British costs had been reduced to the level dictated by the starvation wages of foreign workers. This was the policy to which the members of the present Government stood committed when they assumed office; and the object of it all was to preserve the gold standard intact. Yet they have persisted in carrying it out, although the conditions have been entirely changed by the suspension of the gold standard.

To what do they stand committed now? They are still busy cutting down the salaries of teachers and civil servants, combing out the unemployed, and cancelling plans for housing, road-making, and every other form of national development. But the gold standard, which these violent measures were designed to defend, has gone already; and with it has disappeared any case there ever was for the policy which they are still attempting blindly to follow. The unemployed are still to be condemned to a winter of cold and hunger; the teachers, the police, the soldiers and sailors, are still to have their wages reduced; progress in housing, in education, in the health services, and in every form of social and economic development is still to be put back. And all—for what?

In order to balance the Budget, and to restore confidence in Great Britain’s financial position, we are being told. But have the countries whose confidence we are courting balanced their own Budgets? America has a far bigger budget deficit than we are faced with. The way to get both balanced Budgets and world confidence is by stimulating trade, and not by a panic cancellation of productive expenditure that is certain to make unemployment and depression worse. And the world is most unlikely to have confidence in us if we run round and round like terrified sheep, bleating at bogies of our own imagining. Moreover, we could have balanced our Budget without these false "economies." We could have suspended the Sinking Fund, paid for the maintenance of the unemployed by an emergency levy on all classes of incomes, and readjusted taxation so as to put a larger burden on the rentiers, who have profited by the fall in prices.

There is no case, in a world teeming with productive power, for cutting down the standard of life. There is, on the contrary, a strong case for advancing it as fast as our power to produce increases. But the gods of capitalism are scarcity of goods and cheapness of labour. They want wage-reductions, not in order to preserve the gold standard, but because they believe in cheap labour as the means to higher profits. They want to take away the incomes of the unemployed, because they believe that is the surest way of forcing wages down. Never has there been a clearer class issue that there is to-day in Great Britain, never a clearer call to the workers to rally to the defence of their standard of life.

But, if they are to defend that standard with success, it is not enough to take up a merely negative attitude—to object to, and fight against, the cuts which the "National" Government has already imposed, and intends still further to impose if it remains in office. For a falling standard of life is inevitable unless drastic measures are taken here and now both for the complete reorganization of the financial system and for a rapid advance towards Socialism over the whole field of economic policy. This booklet has been confined to the question of financial policy, both because that is the immediate matter raised by the political crisis, and because the reorganization of the banks is a necessary condition of any effective measures for putting industry on its feet.


But banking reform is not enough. It is only an indispensable first step towards the reorganization of industry on Socialist lines. We are by no means to be numbered among those who believe that a few adjustments of the financial machine, or even the most far-reaching changes in financial policy, will rid us of all our troubles; for the causes of the present world depression lie deep down in the capitalist system itself—in its determination to create artificial scarcity in place of the plenty that ought to exist. We need, as the alternative to the present Government, with its demand for a free hand to do it knows not what, nor with what object, a Government of determined Socialists who, having made the cleaning up of the financial mess their first task, will then advance promptly to constructive Socialist measures in the industrial field.

The only possible source of such a Government is the working-class movement. Labour has decisively rejected the policy of wage-cutting, unemployed-baiting, and putting back economic and social progress that is advocated by the self-styled "National" Government and the financial interests behind it. But it cannot successfully defeat that policy unless it is prepared to advance at once to the determined enforcement of a constructive Socialist policy of its own. The first step towards that policy is the thorough reorganization of the financial system on a basis of full public control. The next is the re-building of the essential industries as great public corporations working directly for the service of the people.

But our advance towards these objects must be international as well as national; for the cause of the workers is one everywhere, and no country can hope to prosper in a world diseased. The causes of the present world depression lie deep down in the capitalist system, of which the banks and the financial agencies of the world are the central machine. An indispensable step towards world Socialism is the social control of world finance.

It may indeed be too late, even now, for the measures outlined in this booklet to save the world from an economic collapse beside which the troubles we have been through will seem as nothing. For everywhere the very survival of the structure of world credit is precarious. Not only in Germany, but even in the United States, for all their wealth, the banking system is in imminent danger of insolvency and ruin. No one knows what the next few months, or even weeks or days, will bring forth. But the measures outlined in this booklet are at least a workmanlike attempt to promote an orderly transition from capitalism to Socialism instead of a plunge into chaos. The programme we have set forth is a minimum programme; and every day that action upon it is delayed creates a need for yet more drastic measures. For it is certain that any policy will be built upon sand unless it begins a thorough-going reorganization of world finance, based on a far-reaching socialization of the banking system.