pleased.
in the price of money be a long term one.
An historical example helo to carily marters in the early nineteenth century, when the capitalist system was estab ruling class was divided over the burning policy issue of the day: THE ROC OF LEOCLA The landowners and farmers, and the Tory Party which repre ICECHS. protection restrictions on the import of corn) so that the price al corn would not be dover down by the foreign Imported corn. Protec BONDUE THEE LOAD TECH profits and rents remained high - the higher the price of corn, the higher their incomes, CHEAPCORN On the other band industrial corn, and so were in favour of allowing IS LILL Why did they want cheap corn! THE SCRUTINEERS from the International Monetary Fund returned to Britain on Monday. In the year since they were last here, Denis Healey has taken over Sir Keith Joseph's policies wholesale. They can feel well pleased.
As a reward one of the policies which the IMF will permit Healey to carry out is the expansion of credit as part of the so-called "reflation". This means that the fall - interest rates Many on the left have argued that high interest rates have been one of the causes of British capitalism's problems. So will things be any better now? CPS, a group of socialist economists, explains.
may to their workers to keep the shops. could be the latter Line Jory tany sput competition of of corn, but about the "price' equally of interest importation will probably Because they had to pay wages them cheaper the price of bread in the the lower these wages This conflict between agricultural and industrial interests was not finally resolved in favour of until 1846 when the Corn Laws were repealed and Today we find a similar divi. sion of opinion among the ruling a much less nutritious, though for investment. What we important, commodity: PIRATES are talking abour here is the rate For interest is the money paid by one sectiop of the capitalist this issue, class, the industrial capitalists, to another, the loan capitalists, for the use of money. Ct ourse of exploitation. there are many ditferent interest ales, paid for borrowing mone exploitation. simplity matters we can thatk of them as labowing ast one, En Marginal Lending Rate SETS THETONE MIR is the rate at which the Hank of England is prepareu tu lend money for short periods. It is fixed as 0.5 per cent above the TRIKE GOE TICO BAL which the Government pays on the money it borrows for short pends (urcasury Bills in orde to finanbe that part of its expenditure which is not covered by high of 15 per cent in October 1976, MLR has Talien to 5 pe pent today. And MLR sets the tone for the movement of all interest rates in the economy. tage of industrial capitalists that Interest rates are low, lor ther as possible, On the other hand interest, and middle-men, such as hankers and financiers, who systern too, want interest rates to be as high as possible But while these two sections of the fuling class may dotter Dye it is important rememher thar they don't dille They bath live off ibe surplus value produced are bot interested in preserving a system which perpetuaics this For if there mere no profits prodeced hy workers for indus sothing with which to pay interest charges, and Joan capicaliscs simply a question of the division spoils between twe DUBCACS AT OILS Now this is not to say that the working class does nor benefir at interest rates. First, many work ers pay interest charges directly. Irouel hite marchase aeree. ments or mortgages on their honses. Secoodly, tales do bake avestineat MOTE profitable, and while much of this does not Sead te increased Thiedly, more profitable conditions may Lead to higher wage SMALL PICKINGS So just as tbeir ancestors could benefit from cheap corn in so far as they could prevent wages heing pushed down proportion ately, today's working class may be able in the short run to win some small pickings of the gains ol industrial capitalists from Tower interest rates. Generally it direct exploiters, industrial capi talists, chan it is from the mone moirecty parane groups land owners or Joan capitalists, Nevertheless in the long run the interests of the working clam CORV STRICT CAC 1A0T of che system as a whole. In a society in which exploitation THEOL STONE wage system abolished, about the rate of inrerest will be relegated to the pages of history books.