The Campaign for Inflation. A Workers’ Delusion

It would be hard to find a period comparable with the past year for the rapidity with which the capitalist politicians and economists have changed their minds about the way to escape from the dilemmas of capitalism. The National Government was formed to save the gold standard—and promptly abandoned it. What was to have been a catastrophe was then welcomed by the Liberal, Labour and Tory press and politicians as the one thing needed to put us on the road to prosperity.

The depreciation of sterling having failed to make the situation any better tariffs were hurriedly rushed through, but already the Protectionists, from the Chancellor of the Exchequer downwards, are warning their followers that Protection is not enough. The Daily Mail, which faithfully promised that protection would revive industry and reduce unemployment, is now reduced to the feeble argument: that the increase of 85,000 in the number of unemployed during April does not mean that Protection has failed, because “without our new tariff our position would have been much worse” (Daily Mail, May 10th, 1932). Tariffs were introduced to get Great Britain out of the trade depression, but the Mail now finds that “nothing we can do will remedy this until a general revival in trade takes place.” It is the old story of the quack doctor who sells “hope” and coloured water. The “cure for bad trade” will only cure if the disease cures itself.

The General Election in October last was fought largely round the fears of inflation. The National Government leaders waived worthless German 100,000 mark notes before the eyes of their listeners and told horrifying stories of the hardships inflation and rising prices would bring in their train. Now six months later inflation is all the fashion among the newspapers and Members of Parliament representing the interests of those industrial capitalists who would stand to gain by inflation. They hope to get higher prices for their goods and to pay off their debts to the banks, debenture holders, etc., in depreciated currency, as was done in Germany, Austria, France and elsewhere during the inflation periods. The Sunday Express, one of Lord Beaverbrook’s papers, says :—

“How rapidlv the situation has developed ! How swiftly minds have moved !
Inflation is now no longer left to Lord Beaverbrook. Or in the House to Mr. Boothby. The movement is growing and spreading.
MOST PUBLIC MEN ARE NOW IN FAVOUR OF INFLATION. PRACTICALLY EVERY MEMBER OF PARLIAMENT SPEAKING IN THE DEBATES IS AN INFLATIONIST.
Some of them are no longer even shy on the word. The movement is extended to many of the newspapers. It is even being adopted by the Times. (Sunday Express, May 15th, 1932.)

It is hardly necessary, to say that prominent members of the I.L.P. and Labour Party arc rushing in to join the inflation circus. Miss Ellen Wilkinson, former Labour M.P., who has just been readopted as Labour Party candidate, contributed to the Daily Express (on April 18th) an article in which she joined with Lord Beaverbrook in backing inflation.

Letters written to the Labour papers by workers who have been led away by this sort of propaganda show a pathetic trustfulness in capitalist benevolence, and a great lack of knowledge of the workings of capitalism. One letter, written to the Daily Herald (May 11th) is a good sample. The writer remarks on the existence of overproduced goods which the workers are too poor to buy, and says :—

“The printing presses of the world should turn out more notes, which should be given round equally to all adults.“

What is here overlooked is that as all the goods are privately owned, the higher prices obtained for them will not go “equally to all adults,” but entirely to the capitalist owners. Does anyone imagine that the capitalists who own the means of production and the products are advocating inflation with the object of giving more wealth to the workers and retaining less of it for themselves?

When prices rise sharply the workers may anticipate that if they use their organised bargaining power to its full extent they will be able to secure some increase in money wages. But the experience of England before and during the war, and of Germany, France and other countries during the post-war inflation, has shown unmistakably that the increases in wages lag far behind the rising prices and leave the workers who are in employment worse off for the time being than when prices are stable or are falling, just as the capitalists seek to force wages down during a period of falling prices so they will strenuously resist demands for wage-increases when prices are rising. Being the owners of the means of production and distribution the capitalists, although at loggerheads with each other over inflation and deflation, will retain the whip hand over the workers. Not inflation or deflation, but the abolition of private ownership is the way out for the workers.