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From Socialist Review, March 1954, pp. 7–8.
Transcribed by Richard Kuper.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
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This is the second of a series of articles devoted to the elucidation of Our Programme featured on the back page of the Socialist Review. |
The history of the National Debt is the history of wars and slumps, the history of Capitalism. The history of British capitalism being the longest of them all, the British National Debt is the largest per capita of population in the world. It is very nearly twice the annual national income.
Investing in the national debt is a very profitable business for capitalists. There is no risk involved; all that one need do is buy National Savings Certificates or similar bonds and wait for the 3% per annum to turn up. This is the safest type of investment possible; as long as capitalism exists, so does the national debt.
Usually, however, the main investors in the national debt are not private capitalists or firms but those financial institutions whose purpose is to ensure the smooth running of the capitalist machine – the insurance companies and especially the banks. They prefer large holdings of state Bonds even though the rate of return on them is comparatively low compared with the rates current in industry because they are easily negotiable and can serve as liquid funds in case there is a “run on the banks,” a fear of a slump.
The Government pays interest to the holders of the national debt – an average of 3% p.a. The interest payments – “service of the national debt” – is paid for out of taxation to the tune of more than £600 m. a year, or over £130 m. more than National Insurance Benefits (1952 figures). In other words, this enormous sum of money is transferred from the general public into the hands of a few financial capitalist institutions and private capitalists. This transfer payment is so large in fact that it does much to offset the progressive tax-structure in Britain, whereby the higher the income of the taxpayer the greater the proportion of income spent in taxation. Thus it belies, to a large extent, the famed democratization of the economic life in Britain. Only by suspending interest on the national debt, by suspending the current sacrifices we make daily to the destructive orgies Capitalism indulged in in the past – wars and slumps – can we channel society’s resources into beneficial channels such as education, social services and the like.
It is true that a number of “small men” have sometimes invested a lifetime’s savings in the national debt, forced into doing so by the very inadequacy of the social services to ensure them security after a lifetime of hard work, an inadequacy which itself arises from the presence of the national debt. To these few we promise a restitution of their savings. The basis for restitution and its administration must be in the hands of elected workers’ committees – only workers can be entrusted with the control of the machinery of capitalist society, even if only to put an end to it.
The history of the National Debt is the History of Capitalism; by demanding the abolition of the one we demand the abolition of the other.
Last updated on 24 July 2015