During the 1950's and 1960's there was a great vogue for the theories of "enbourgeoisement". We were informed that under the influence of ever increasing prosperity the working class as a class with a distinct consciousness was disappearing. This theory always was rubbish as it totally ignored any other variable than that of pay in determining the consciousness of a worker. However it is worth looking at the underlying assumption that what has occured inside the working class is a massive increase in affluence. The picture that emerges is by no means the never ending vista of prosperity which was offered to us as a perspective by the ideologists of bourgeois sociology.
Frequently accompanying the theories of the disappearance of the working class, and in fact a necessary correlate of it, was the idea that economic growth in itself would cure the problems of poverty. The argument went that the working class should cease worrying about the division of the economic cake and only be concerned with the actual size of the cake. If only it did this the problem of poverty and low pay could quickly be resolved. After all if the economy could grow at 4% a year then in 5 years we would, by the miracle of compound interest, all be 25% better off. After 25 years of unprecedented growth for capitalism we are perhaps now in a position to evaluate these claims and unfortunatly we find that the laws of capitalism are rather stronger than the laws of compound interest.
While in the period of the post war boom the real income of much of the working class went up, nevertheless two things must be noted. Firstly the increases in real terms have not been due, largly to increases in basic pay but has been largely due to increases in payments for such things as overtime, a greater number of women working etc., and secondly for a significant section of the working class this has not been a period of increasing prosperity but of increasing poverty.
The Role of Labour
Amongst certain layers of the left there is a belief that it is better to have the Labour party in power because in some way it attacks the working class "less". The usual evidence adduced for this is the 1945-51 Labour government so before looking briefly at the record of labour in its last period in office it is worth looking at what were the essential features of the "Welfare State" as established by Labour and why it was introduced.
If we look at the record of the 1945-51 Labour government we can see that in purely monetary terms it did little to improve the provision of welfare: It increased the percentage of national income spent on welfare from 94% prewar to only 11-12% (1) . It was the full employment due to the boom and not the Labour governments welfare policies which really affected the living standards of the majority of the working class after 1945. In fact, far from Britain having the finest Welfare State in the world thanks to the efforts of the Labour party, the British working class in fact has perhaps the least good welfare facilities of any comparable industrial state. However even at the level of what facilities do exist it would be entirely wrong to believe that these were largely the work of the Labour government. On the contrary many of the most important measures—free secondary education for all children, introduction of family allowances, abolition of the household means test—were introduced by the war time government before Labour ever came to power.
The reason why in all advanced capitalist countries the post war period saw an increase in social expenditure, and this happened quite regardless of whether the governments in power were made up of "working class parties" as in Britain or of openly capitalist parties as in most of Europe, was partly due to fear of a wave of working class militancy and partly due to a desire to have a labour force able to cope with the new demands of capitalism. This former point was clearly pointed out in an utterance by Quinten Hogg when he said that, "If you do not give the people reform, they are going to give you revolution Let anyone consider the possibility of a series dangerous industrial strikes, following the present hostilities" (2). At another level the increase in spending on health is necessary to ensure a fit work force (a factor not necessary in the 1930's when there was a surplus of labour and the sick were simply kicked onto the dole) and the increase in expenditure on education was seen as necessary to provide a more skilled workforce to deal with the techniques demanded by modern capitalism.
If, however, capitalism saw it as in its short term interests to increase social expenditure, that of course did not mean that the capitalist class considered it was going to have to pay for it. On the contrary it knows that under capitalism to finance welfare states from the employers would cut into the all important profits and therefore into the incentive to invest. Instead of this the trick is to get the less badly off sections of the working class to finance the worst off. The secret of this is to make the source of finance universal flat rate contributions. These ensure firstly that a worker contributes far more as a percentage of his income than does the well off, and secondly that because the working class constitutes the overwhelming majority of the population, it will contribute the overwhelming majority of the finance. In addition a good second trick is to charge for the services received, as this ensures that the working class pays most for these, again because it is the majority of the population, and also because it has the lowest wages, the effects of the charges fall hardest on the working class. This latter trick was found exceptionally useful by Labour in 1949 when it was used to help finance rearmament. The result of all these strategems was that even after Labour had been in power the cost of unemployment, sickness, maternity, and pension benefits, that is to say those benefits which most affect the working class, were completely paid for by contributions, of which the vast majority were paid by the working class. Just to ensure that benefits can be easily reduced without too much of a fuss being created, a good thing to do is to make the benefits at a flat rate so that they are easily cut into by inflation. (A new twist, more recenity developed, is to make the benefits income related so that the best off get the most and the worst off the least).
If in fact the boom and capitalist governments have done nothing to alter these basic features of capitalism, neither have they done much to take the rough of the edges of capitalism for those who are forced under in the rat race, and what little has been given is now rapidly being taken back.
Most important of all however, in "Welfare" expenditure is very largely not even seen as a sop to the working class but as one way of regulating the economy. Increases in, for example, allowances are seen as ways of regulating the level of demand in the economy. The fact that regulation of demand has to fall to the state, i.e. the representative of the bourgeois class as a whole, is determined by one of the central contradictions of capitalism, namely the need to generate a demand for goods while at the same time each capitalist endeavours to pay as little to "his" workers as possible. Marx outlined this contradiction when he noted that ". . . although every capitalist demands that his workers should save, he means only his own workers, because they related to him as workers; end by no means does this apply to the remainder of the workers, because they related to him as consumers." It is of course incorrect to see the problem of underconsumption as the primary characteristic of capitalism, on the contrary it is merely one of the manifestations of a system whose fundamental feature is generalised commodity production. This is a fundamental point which divides Marxism from all utopian theories, (and incidentally from all State Capitalist theories which for their own reasons are forced to see underconsumption as the fundamental feature of capitalism). Lenin characterises the situation when he says that utopian theory, "explains crises by underconsumption, the latter(Marxist theory) by the anarchy of production. Thus while both theories explain crises by a contradiction in the economic system itself, they differ entirely on the nature of the contradiction. But the question is: does the second theory deny the fact of a contradiction between production and consumption? Of course not. It fully recognises this fact, but puts it in its proper, subordinate, place as a fact that only relates to one department of the whole of capitalist production. It teaches us that this fact cannot explain crises, which are called forth by another and more profound contradiction that is fundamental in the present economic system, namely, the contradiction between the social character of production and the private character of appropriation." (3) As long as this anarchy of production exists, attempts to regulate the consumption of the economy by the state are utopian, and the intervention of the state can in no way go against the laws of capitalist production. The intervention of the state in a capitalist system can therefore not solve one of the key problems of capitalism—that of social expenditure. Lenin again put this very succinctly, in his "Imperialism", when he wrote in relation to the tendency for a surplus of capital to arise in the imperialist states, ". . . .if it (capitalism) could raise the living standards of the masses. . . .there could be no question of a surplus of capital. This "argument" is very often advanced by the petty-bourgeois critics of capitalism. But if capitalism did these things it would no longer be capitalism."
It was over this basically pro-capitalist structure erected by Labour that the Tories ruled so easily for the period 1951-64. As this system in no way was a burden to, or threatened the capitalist class, the Tories saw absolutely no need to dismantle Labour's measures. On the contrary they would certainly have introduced them all themselves if they had been in power after 1945, and in that way Britain would have had its pro-capitalist welfare state introduced, as virtually everywhere else did, by an openly capitalist government. This might have saved us a whole lot of mystification and would certainly have made the working class no worse off. During the "Thirteen years" of Tory rule all that occured was that the more anti-working class parts of Labour's welfare edifice were accentuated and the Tories more consciously saw "welfare" as a way of regulating the economy. Thus for example prescription charges were doubled in April 1961 as part of a policy which in the years 1951-61 saw the health charge rise by 260% as against a 74% increase in wages. The various changes made in April 1961 for example were "justified" by supposedly being used to finance a £5 million hospital building programme, but in fact raised for the exchequer over £65 million.
As British Imperialism declined during the 1950's so of course it became less willing even to let the working class finance any welfare benefits by redistributing wealth inside the working class. On the contrary the capitalist class was forced to seek a much more fundamental redistribution of wealth—a redistribution of wealth away from the working class and to the bourgeoisie. In the 1950's the need to do this was considered slightly less urgent than the undersiability of an open political clash with the working class so instead of an open attack on social expenditure, the British "welfare state" was simply allowed not to keep up with that of other capitalist countries. The result was that by 1960 welfare payments in Britain stood at 6.4% compared to 10.4% in West Germany, 8.3% for France and 7.9% for Italy, and what benefits there were were financed less by the least nominal charges on capital than in any other country, with British employers "contributing" twenty one percent of social security revenue, compared with 41% in Germany, 69% in France, and 72% in Italy.
By the middle 1960's however it was obvious that the decline of British capitalism was proceeding at an accelerated rate. In this situation the order of priorities for the ruling class changed. First priority now became the redistribution of income away from the working class and the only question that remained to be settled was how to do while meeting as little resistance as possible. In its hour of need the more enlightened members of the bourgeoisie looked, as always, to the Labour party. Just as in 1931 it had been used to introduce, in Lord Samuels words, "measures most unpalatable to the working class" and just as in 1945 Labour had been useful to "defuse" the working class movement, so it was calculated that a Labour victory in 1964 would lead to an attack on the working class, and particularly on the trade unions, which, because it was carried out by a "working class" party, would meet with little resistance. It was for this reason that you had journals such as the "Economist" and more class conscious representatives of the bourgeoisie, such as Sir Frank Kearton, then head of Couriaulds, and Sir Donald Stokes, head of the Leyland motor company, openly saying that they wanted Labour to win.
This strategy was, within limits, extremely successful. In fact quite definitly by the mid point of Labour's period in office we can say that welfare was now ceasing to have any real effect in maintaining, let alone increasing the, standard of life of the working class. It was only the wage increases that were made by the well organised sections of the working class that maintained an increase in the real standard of living. (See Red Mole Feb 21/2/71 for details)
Changes in Real Income
Certainly in money terms the increases appear enormous, in the period 1938-68 the average wage in money terms went up by 545% . According to the official government estimated the cost of living has increased 270% over the same period. This however understates the position very considerably. If you take purchase cost of the same number of goods at the beginning and end of the period the actual increase has been 371%. In otherwords there has been a real increase in average wages over this period. (It should be noted that the element of redistribution involved is virtually nil. Atkinson calculates that allowing for a 73% increase in GDP over this period a family with one child would need an income increase of 538% in order to stay in the same place once the increase in productivity is taken into account.
But looking at averages is far too crude, to really understand what has been happening, it is necessary to break the figures down further.
Firstly the fact that capitalism has been in a state of boom does not mean that it has been giving money away. All that it means is that if you have a strong bargaining position you can wrest concessions from the employers. If on the other hand you have not then the inflation will actually make your standard of living lower. For example teachers basic wages have gone up only 339% in the period 1938-69. In other words if they were on basic they would actually get paid less. This can be compared to say the Coventry toolroom average which indicates an increase of 480%. (4): Similarly a bus drivers basic has gone up 368% and a postmans 387%. It is obvious that with this type of increase on the basic many sections of workers have only been able to keep up or increase their standard of living by working long hours overtime, seeking intensive work bonus systems etc. In fact in 1969 it was found that the average overtime pay for a male manual worker each week was £5.20 and this represented 33.2% of his total pay. (5) It is not surprising given this situation that the number of hours overtime worked is very great. In 1968 for example it was an average of 8.5 hours a week in manufacturing industry (6).
The other method by which family income has been increased is by a far larger number of women working; between 1951 and 1961 the proportion of women in employment increased from 27% to 37%. These women of course have been subjected to a tremendous rate of exploitation and in fact their situation has, if anything, got worse. In manufacturing for example female average weekly earnings expressed as a percentage of mens earnings fell from 53% in 1950 to 48% in 1960 to 47% in October 1965 (7) Over 80% of women get less than 41%p an hour which would be equivalent to the TUC's suggested minimum wage of £16.50.
A dependence of families on overtime working and the income of working wives (two thirds of working women are married) means that family income is very greatly affected by cyclical fluctuations are endemic in some industries, for example motors, and can therefore affect many groups of workers. The effect from unemployment is even greater than the official unemployment figures show. It is common that many married women for example do not register as unemployed and therefore are not counted in the statistics. As these women are however necessary to keep up family income the effect will be very marked. This probably to some extent explains why for example between June 1966 and March 1968 unemployment went up by 284,000 but employment fell by 740,000. (8)
What is worth noting especially is that as the government increases its attacks on the working class, the proportion of the working class actually improving its living standards as a result of the 'boom' progressively decreases. Thus for example in the period April 1970-April 1971 probably half the working population suffered a fall in real income. On average a fall in real income of 3% occurred for the working class. (9)
What can therefore be seen that although the successive Tory and Labour governments have not gained a decisive victory in any field they have succeeded in waging a war of attrition so that now they are actually quite materially cutting into the position established by the working class since the war. In particular the inability of capitalism to even maintain its level of welfare services coupled with a decreasing ability of the working class to keep up its income through wage struggles has led to really marked increase in poverty in the present period. This situation can, for a variety of reasons, only get worse. Firstly it is obvious that we have come to the end of the period of relativily full employment. We are moving to a situation whereby there is a permanent pool of unemployment. Apart from the direct consequences of this it will also significantly affect family income by restricting the opportunities for women to work. The extent to which this has already struck home is disguised by the present unemployment figures because it is known that many women do not register as unemployed. Secondly the attack on the unions will make it consistently harder to win wage increases. This will affect the main way by which the working class has driven up its living standards. Most important of all of course is the general decline of British Imperialism which forces any capitalist government, no matter which party, to continually attack the living standard of the working class by all conceivable means. These processes are already leading to really significant increases in poverty.
POVERTY
Poverty cannot of course be defined in absolute terms. In the words used in the Social Science Research Council's report, "Research on Poverty", "People are 'poor' because they are deprived of the opportunities, comforts, and self-respect regarded as normal in the community to which they belong. It is therefore the continually moving average standards of that community that are the starting points for an assessment of its poverty, and the poor are those who fall sufficiently below these average standards."
The boom has of course done nothing to change the fundamental inequality of wealth in capitalist Britain. It is the case that 5% of the population have 92% of the disposable wealth.(10) Those who do not have personal wealth are still totally dependent on the selling of their labour power for survival. On Jan. 1966 the 87.9% of the population who own less than £3,000 were calculated to have an average holding of only £107.(11) The distribution of the wealth that really matters, the ownership of property and industry, is even more uneven. On income from property, the richest 10% of the population in 1959 were calculated to receive 99% of all such income.(12) In 1966 only 4% of the population owned any shares at all, and 1% of the population were calculated in 1961 to own 81% of all shares. (13)
At the bottom end of the scale it is also remarkable how the position has not really changed with time. If we look at the median earnings level for all workers in full time manual work, and then compare how the bottom 10% have done, the picture emerges as follows:-
% of median earnings level earned by bottom tenth in
1886 — 68.6%
1906 — 66.5%
1938 — 67.7%
1970 — 67.3%(14)
It is very hard to make exact estimates of the situation as regards poverty but a reasonable estimate seems to be that between 1953 and 1966 the number of people living below the state accepted poverty line more than doubled (15) (This incidentally is excellent evidence against the once fashionable view that economic growth in itself would solve the problems of the worse off). Between 1953 and 1960 it has been estimated that the number of people living at or below the state defined poverty line increased from 4 million to 7% million, and estimates for the number now in this category range up to 10 million.(16)
This point about considering not only those below the poverty line but also those at it, is a very important one. A survey of the Ministry of Social Security carried out in 1966 found that apart from the families actually living in poverty, there were more than twice as many who have an income only up to £2 above the official poverty line. Any slight increase in unemployment of women and recently we have seen a massive increase, and rise in national insurance contributions etc., will bring them down into the poverty range. (17)
One of the factors affecting these workers most, is of course inflation. This means that in the recent period these workers will undoubtedly have suffered very real cuts in their real standard of living. For example between April 1970 and April 1971 consumer prices rose by 9.4%. (18) The rates of increase amongst the poorest workers have nothing like kept up with this, capitalism does not give away wage increases and the poorest workers are mainly in industries with little or no union protection. For example workers in laundering, narrow fabric, the fur trade, retail newsagency, baking, bespoke tailoring, licensed establishments, unlicensed places of refreshment and industrial staff canteens, received in 1970 an average annual gross increase in wages of 4% during a period when prices rose some 8%. (19) The policy keeping down wages by tackling public sector workers, who are usually poorly paid, will only make this situation worse. If we look only at male manual workers we find that there are 900,000 who in 1970 earned less than £15 a week. In non-manufacturing industries, i.e. services in particular, there is an enormous concentration of such workers, with 13.4% of the labour force getting less than £15 a week, compared to 9.4% for all industries and 4.6% for manufacturing. (20)
To see just how badly off these poorly paid workers are becoming, and to see how their position is deteriorating and lack of trade union organisation is crippling them, it is worth looking at the example of the wage council industries. In 5 years to September 1970 prices rose by 24.7%. In 25 out of 53 industries covered by wages councils lowest minimum rates of pay for men went up by less than 24.7%. (21) It is sometimes claimed that few workers are actually on the minimum, but even the bourgeoisie explodes that argument. The Incomes DATA report just quoted points out that ". . . .the DEP's Wages Inspectorate finds people paid below their statutory minimum. More significantly, if there are only a few workers on the minimum, there should be little difficulty in appreciable raising rates of pay that in almost every case are now below the level of Supplementary Benefit. Until this is done, it is fair to assume that there are a proportion of workers actually on the statutory minimum." (22) Furthermore this differential is increasing. For example, in a survey of 126 industrial groups over the period of the beginning of 1970 it was found that the average rate of pay increase was 8% per annum while for the bottom 10 groups the average was only 4%. (23) Furthermore even where pay is higher this is only maintained by high overtime. Out of the 126 groups, each employing over 10,000 workers, 117 had basic rates of pay lower than the TUC target minimum wage of £16.10.0.(24)
In all there are at least 75 categories of occupation where at least 25% of the workforce gets less than 8 shilling an hour. The consequence of this type of situation is that it is now calculated that between one child in six and one child in seven lives in poverty. (25).
There is not space to go into their special forms of oppression here (26) but just at the level of pay, it is a staggering fact that 80% of all women manual workers get less than 8 shilling an hour (equivalent to £16 for a 40 hour week) (27) As for equal pay, that is nowhere in sight with rates of pay relative to men ranging down to 57% in the case of those employed in cinemas. (28) All attempts at gaining equal pay are being systematically sabotaged by industry reserving certain jobs for women and by downgrading jobs done by women. If anything the situation may be getting worse. In October 1960, average earnings for women in full time manual employment were 49% of the equivalent male earnings; in 1968 they were 48%, in October 1969 they were 47%. (29)
At the present time none of the organisations of the labour movement are in any way prepared to tackle the question of poverty or equal pay. All the suggestions for things such as an incomes policy in return for a guaranteed minimum wage in fact will only make worse the situation of those driven into poverty by capitalism. Even if Socialist ever needed any justification for the fight to keep independent and strong the organisations of the working class they can find it in the decline of welfare as a decisive factor in maintaining the living standards of the working class. The fight to maintain the power of the working class in economic struggle has not become the decisive fight for the defense of the living standards of the entire working class.
(1) Kincaid —International Socialism no.35.
(2) House of Commons 17.2.43 quoted International Socialism no.7.
(3) Lenin—A Characterisation of Economic Romanticism, section 7.
(4) N. Atkinson—Whatever happened to our Wages?
(5) Income DATA Services Annual Review 1969 p.21.
(6) Trade Union Register 1969 p.337.
(7) Lerner—in Prest ed. "The British Economy".
(8) T.U. Register 1969 p.33. A similar pattern can be seen in reverse in the years 1963-64 when employment rose by 1.4% and unemployment dropped by only 0.9%.
(9) The Guardian 22.5.71.
(10) Blackburn—in The Incompatables ed. Blackburn and Cockburn.
(11) The Economist— 15.1.66.
(12) Blackburn op.cit.
(13) op.cit.
(14) Productivity prices and Incomes Policy after 1969 para 61. cited in Red Mole 15.5.71.
(15) Tribune —12.3.71.
(16) Ibid.
(17) The Times 10.3.71.
(18) The Guardian 22.5.71.
(19) 'Tribune' 12.3.71.
(20) The Times 19.1.71.
(21) Incomes DATA Sept 1970 p.25.
(22) Ibid.
(23) Incomes DATA Sept Aug. 1970.
(24) ibid.
(25) Child Poverty Action Group 25.1.71.
(26) Coulson —International vol 1. no.4.
(27) D.E.P. Gazette Dec 1970 p.1114.
(28) "Sunday Times" —28.2.71.
(29) Morning Star 18.12.70 cited in Coulson op. cit.