Just a few more contradictions

Socialists are always pointing to the stupidities and contradictions of capitalism, and capitalism certainly provides us with plenty to point to. Take, as a recent example, the agreement signed last month between Britain and Argentina, over which there has been so much fuss and bother. Under the terms of this agreement, which is scheduled to last for five years, both countries have undertaken to exchange goods to the value of £160 million. In line with her usual policy in these days of dollar shortage, Britain has stood out against using dollars for any part of her purchases and at the same time has insisted that the exchange shall be at parity, i.e. that Britain will sell to the value of £80 million in return for Argentine goods to the same amount. In order to get the meat she particularly requires, Britain has also promised Argentina priority treatment in supplies of oil, coal, machinery, chemicals, and other manufactured products, and will export them in sufficient quantities to satisfy most of Argentina’s needs.

So far, so good. On the face of it a useful trade agreement for the British capitalist class, and a triumph for their negotiators, acting, by the way, under the instructions of a Labour government.

But evidently everything has not turned out quite so rosily as expected, for now the United States has come along and objected in quite strong terms that the agreement is actually a very bad one, is going to have the effect of cutting out the United States from the Argentine market, and for quite a long time to come. American exporters, it seems, are most annoyed at all these developments and want their government to do something about them.

Now for the other side of the story. It is common knowledge that the United States has been pouring millions of Marshall Aid dollars into Western Europe as part of her foreign policy. Of these dollars Britain, as the most important Marshall Aid country, has received the largest share. The prime purpose of this aid has been to help the Western European countries to get back on to their feet economically, to assist them to increase production, and to step up their exports. Thus encouraged, the British capitalist class, aided by the Labour government, have energetically set to work (with the co-operation of the British workers), and made great strides in their trade, receiving numerous pats on the back from Hoffman, the Marshall Aid Administrator, for doing so. It seems, however, that Mr. Hoffman has been a little too generous with the back-slappings, for the British capitalist class are apparently carrying out the export policy too well. Having encouraged British capitalists to increase their exports, the Americans are now complaining that they are being cut out of the export market, and with the help of their own money!

There is another twist in the story. Even if Britain did not supply her with the goods she requires, Argentina would not be able to buy from the United States, because she has not got the dollars to pay for them. As it is, she owes America millions and millions of dollars for goods she bought years ago, and the Americans have been trying to get paid ever since. In spite of this, however, the American capitalist class are still prepared to have a row with Britain over the right to send even more goods to Argentina, still presumably without Argentina having the slightest chance of being able to pay for them!

Finally, we cannot resist making a side-reference to oil, one of the commodities involved in the agreement, and the one that is evidently causing the Americans the biggest headache. Only a few months ago, the Americans were still obsessed with the worry they get from time to time that their internal oil supplies were running low, and that they would need to draw to an increasing extent upon supplies from abroad. Thus one of the top priorities in the Marshall Aid programme was for the Western European nations to increase their refining capacity and sell oil to the United States for dollars, so killing two birds with one stone. Again British capitalists set to work with a will, to such an extent that “American companies have already lost part of their Swedish market to British competitors.” (Daily Telegraph, 11/6/49), and look like losing the Argentine market as well. No wonder they are getting upset! What has happened, of course, is that American home demand has been falling off, prices have been dropping, and American companies that thought they would be hard put to supply their home market are now finding it to be in danger of saturation, and that they had better look after their overseas markets while the going is good.

So here are three more problems for would-be solvers of capitalism’s problems to get their teeth into. Solutions should not be sent to us. Send them to the American State Department or Sir Stafford Cripps’ or even to President Peron. They will be very glad to receive tHem, we are sure.

S.H.