Capitalism’s grim calculation

200404 The Economist Cover
200404 The Economist Cover

When the Covid-19 lockdown was announced, was I the only person to think how crazy is capitalism?

So everything shuts down – or nearly everything. Essential work continues – food production, transportation, etc. In a planned economy there would not even be a hiccough. There are 30 million people who work in the UK. If 25 million have to stay at home to prevent the spread of Covid-19, that is not a problem. Sure, the economy will be producing less goods and services than previously, but there will still be food to eat.

Only an economic system that not subject to conscious control would it be a problem to make the rational decision to stop 25 million people working for a few months.

But in an economy that depends on profit, credit and unrelenting growth to even stand still, it creates huge problems.

You get a glimpse of how the capitalist class are weighing up their Covid-19 options by reading their publications. The Economist is one publication which has been weighing up the grim options open to them.

This week’s edition has a long article discussing the approach needed for capitalism to survive the Covid-19 crisis. It opens with several paragraphs about politically uncontroversial issues – triage and the difficult medical decisions required of doctors with limited resources. Choosing the best containment/suppression strategy in different countries and different cultures. But after the preamble the article drops the deadly question: ‘as the disruptive effects of social-distancing measures and lockdowns mount there will be hard choices to make, and they will need to be justified economically as well as in terms of public health’.

In the words of the Economist: ‘Attempts to argue that the costs of such action could be far greater than the cost of letting the disease run its course have, on the other hand, failed to gain much traction.’ At the beginning of a pandemic this is is not a bad thing, The Economist tells us. The economic disruption caused by lockdowns, social distancing and business closures would likely had happened anyway if no action had been taken and the disease had been left to run its course.

But as the loss of profits continues beyond a month or so the ruling class has to make a ‘grim calculus’ they tell us. Loss of business versus loss of life.

Grim indeed. And there is little doubt which fork of the road they will take when they feel they can manage the political fallout.

Is nationalising broadband a ‘crazed communist scheme’?

The Labour Party’s announcement that they will provide free fibre broadband to every home in the country by 2030 has hit the headlines today.

It is an eye-catching claim. And Boris Johnson has boosted its socialist credentials by describing it as a ‘communist’ policy. Yet other capitalist commentators are not so sure. Is nationalisation a socialist step?

Trains, water, electricity and the post are all services which Labour has already announced its intention to nationalise, or ‘bring back into public ownership’. Adding broadband provision to this list would increase the extent of state control of the British economy. But in the words of Ben Chu, economics correspondent at the BBC, ‘There is nothing inherently economically backward looking about putting certain industries in state hands, especially so-called natural monopoly utilities’.

Ben Chu lists other European countries who have nationally owned and run utilities, such as the Norwegian postal service, the Swiss and Italian railways, the French electricity system and german savings banks. Many of these industries are highly successful, and they contradict the British caricature of nationalised industries as dour, inefficient and wasteful. Quite the opposite in many cases.

From the point of view of bourgeois economists, the issue is less about who owns such assets. The main issue is whether they would be more efficiently run in private or public hands. Infrastructure services are needed by industry, and if they are run efficiently and more cheaply, that assists the private sector industries that rely on them.

The issue for socialists is who controls the economy. Nationalising service industries does not transfer control to the working class. Manufacturing, banking, retailing, insurance and other sectors remain in private hands and remain subject to the laws of motion of capital.

It is those laws of motion that threaten to interrupt Labour’s tinkering with the economy. In the background to this election there are the gathering clouds of the coming financial and economic crisis. This is building up because the ruling class have failed to deal with the underlying contradictions which led to the 2008 crisis. Years of trying to push back the living standards and working conditions of the working class were initiated. The purpose was primarily to increase the profitability of capitalist enterprises. In order to service the huge debt burden capitalism has created for itself it needs to become more profitable. And the most immediate way to increase profitability is to reduce the cost of labour power.

The push back by the ruling class since 2008 has been considerable. But it has only been marginally effective. And before the ruling class can achieve their objective, the working class reached breaking point. They will take so much, and no more. One way that resistance was expressed in the UK was by rejecting the neo-liberal consensus when asked to vote on continued membership of the EU.

As the economic situation deteriorates, the Labour Party hopes to come to the rescue of capitalism. Their programme of limited intervention to modernise the capitalist infrastructure is intended to save capitalism, not to replace it.

The whole thing will blow up in their faces. And that economic explosion may be quite soon. They will be seen as unprepared for the worst, unprepared to take the drastic steps needed to replace a failing capitalist system with a planned economy.

What we need to get us through the coming eruptions is a Workers’ Party, committed 100 per cent to defending the interests of the working class, no matter what economic chaos erupts. It is not the role of the working class to keep capitalism going. It is its historic role to act as the midwife of a new form of economic organisation based on common ownership and democratic control of the productive system. That is what communism really means, not this half-hearted attempt by social democracy to rescue a decaying system.

Categories UK

Do we need billionaires?

Screen Shot 2019 11 08 At 19.38.40
Jeremy Corbyn

When Jeremy Corbyn said a fair society would not contain billionaires, it did not seem controversial to me.

The existence of an individual with access to one thousand million pounds (or dollars) can only seem acceptable to people who think gross inequality is a good idea. The usual culprits have sprung to the defence of the super-rich.

Yet most of those supporters of egregious wealth have expressed their concern, over the last few years, about the increasing polarisation of wealth in society. Watching social wealth become increasingly polarised is, they have been telling us, unjust and likely to result in ‘social disorder’. Yet they are disingenuously comfortable with the existence of extreme wealth.

When Jeremy Corbyn announced a Labour government would go after billionaires who enriched themselves by taking advantage of a ‘rigged system’ they were quick to criticise him. But from my point of view his personalised attack on individual billionaires is only intended to win votes in the general election. Labour needs to make left-sounding noises to try and bolster its support among working class voters who no longer see the Labour Party as the party that represents their class.

To illustrate his point he named several individuals whose wealth he thought would be easy to criticise. Jim Ratcliffe was one of them.

Ratcliffe is the chief executive of Ineos, a petrochemical company he founded. He still owns 60 per cent of the shares. The company owns several petrol refineries and is responsible for about one third of the industrial greenhouse gases produced in Scotland. Obviously an easy target – a bogey man. An evil man who poisons the planet.

Mike Ashley was also one of the named billionaires. Poor Mike only has a couple of billion, so he is not a very big billionaire. But he still gets into the list because of the bad publicity he has garnered over the last few years as the boss of Sports Direct. His company has been at the forefront of promoting the use of zero hours contracts, and has been fined for paying staff an effective wage which was lower than the legal national minimum. Jeff Bezos, a far wealthier billionaire than ‘poor’ Mike Ashley, does not make it on to Corbyn’s list of excessively rich people. Bezos’s staff at Amazon warehouses are arguably just as badly exploited as Ashley’s Sports Direct employees. But you only need one bogey man to illustrate your point. Exploitative employer chosen – and Corbyn has ticked that box.

Then there is the Duke of Westminster. Don’t get me started. The Westminster family paid zero inheritance tax when his father died. Hugh Grosvenor became the biggest landlord in the UK (with the possible exception of the Queen). He now owns billions of pounds worth of property in Mayfair and Belgravia and lives off the proceeds of his ancestors’ accumulation of property.

And finally Jeremy’s list included Rupert Murdoch, the billionaire who uses his wealth to exercise political influence, and reserves his greatest venom for political views which he considers threaten his vested interests.

But for all the harumph and bluster, picking out individual hate figures is an exercise in concealing the Labour Party’s determination not to significantly interfere with the ability of exploiters to exploit. They want to address the most egregious examples of exploitation, and at the same time defend a system based entirely on exploitation.

The Labour Party once claimed to want to renationalise the railways (and other privatised utilities). Now they say they want to ‘bring them back into public ownership’ by waiting until their franchises expire. And any re-nationalisation of the other utilities includes generous compensation for the current owners. Their reward for milking the captive consumers they have been ripping off for years is – to get their money back. So their capital remains intact and can be moved to another sector. They can continue reaping the rewards of owning vast fortunes and not having to sell their labour for a living.

The right-wing of the Labour Party want to declare themselves the ‘party of Remain’. For the working class the Labour Party is the ‘party of Maintain’. They want to maintain capitalism, maintain exploitation, and maintain capitalist profits, by tweaking its worst excesses in order to save it.

Categories UK

Fear of election

The parliamentary opposition are running scared. 

It is not Boris Johnson they fear, it is the anger of the working class.

Nobody is taken in by the parliamentary shenanigans. We can all see the opposition are afraid of calling a general election. They produce one excuse after another. 

The Labour Party blame the Illiberal Undemocrats; we will only call a vote of confidence when we are confident we can win it, they say, and with Jo Swinson so adamantly opposed to supporting a caretaker Corbyn PM, the Labour MP’s absolve themselves of responsibility.

The ‘Bollocks to Brexit’ Party, for their part, refuse to back Jeremy Corbyn as a caretaker PM because, they say, he ‘cannot command a majority in the House’. Well, of course he cannot when rabid anti-socialists like Swinson will not give their support. Jo Swinson pledged she would do everything in her power to stop Brexit. But in the words of the Meatloaf song, ‘she won’t do THAT!’

So with the second and third biggest English parties in the House of Commons at loggerheads it falls to the SNP to ‘hold their noses’ and agree to support a Corbyn caretaker government. This puts pressure on Swinson and her socio-phobia (fear of left wing politics) on the spot.

Those of us looking at this from the outside can see these manoeuvrings for what they are – pure farce. If you want a general election the solution is simple. Agree to support a temporary Corbyn government for a very minimal time, days not weeks, and in pursuit of a very minimal objective – to dissolve parliament and call a general election. If Corbyn agrees that he will limit his role to that single task there is no reason for the yellow party to say no. 

But the opposition parties will do that. And we all know why. Because they are afraid of a general election.

The Illiberals have 18 MP’s, but only 12 of them were elected as Liberals. Swinson’s bragadocio at her conference, her arrogance in even considering she could sweep the board and form a majority government, would be exposed for the ravings of a deluded megalomaniac.

The Labour Party would struggle to keep traditional working-class Labour-voting seats when millions of Leave voters refuse to turn out for the now obviously Remain party.

Only the SNP stand to gain. Hence their readiness to hold their noses and support Corbyn.

The cowardice of the opposition is not just about fear of electoral losses. They fear the wrath of a working class who voted to Leave and have listened to 3 years of nonsense about why Leave is not possible.

It is possible. And the electorate are not as gullible as the politicians would like to think. They believe that, if they hold the media spotlight, rant about ‘Crash Outs’, ‘cliff edges’ and ‘catastrophes’, then the public will be convinced. They believe that holding the media spotlight is the same thing as convincing intelligent electors of their arguments.

They are deluded. 

Categories UK

A bigot accuses us of xenophobia

 

Mathew d’Ancona is a columnist in the London Evening Standard and the Guardian. He is also a bigot.

181203 Matthew DAncona 300x255

In the Evening Standard today he characterises the people on the other side of the referendum vote as xenophobes. It must be very comforting to this moral guardian of the nation to blame the ‘breakdown in the consensus’ on bigotry. But d’Ancona is guilty of lazy thinking – as a result of which he jumps to conclusions about his opponents. Is that not the definition of bigotry?

He harks back to those halcyon days before the referendum when all was sweetness and light in his ivory tower. The ignorant masses used to mill about outside his privileged environment and were content with their lot. “For decades there was something close to a political consensus that the most important metric [sic] was economic prosperity. A wealthy nation was essential both to the aspirations of individual households and the funding of public services.”

And yet he fails to even consider the possibility that it might be a lack of prosperity that drives the rejection of the status quo. Perhaps it was that frustration which expressed itself in the vote to Leave the EU.

Out here, outside his ivory tower, where ordinary people live, it is obvious that the economic prosperity he values is disappearing. For 10 years workers have seen huge sums spent on banking and finance, even huger sums spent on quantitive easing, while the services they rely on are underfunded. Education. Tax credits. Care for the elderly. Care for the vulnerable.

Mr d’Ancona tells us immigration is a net benefit to the economy. If he is right (and on this point I believe he is) then we should be asking why the economy is not improving as a result of the additional wealth created by our new compatriots. It is time to put your brain into gear and work out why people are anxious. Or you could just be lazy and put it all down to xenophobia.

You might also explain the Trump phenomenon as xenophobia.

But then you have to ask yourself whether it is just a coincidence that xenophobia is on the rise in the UK, in the USA, and, we might add, in Italy, France, Hungary, Poland. All just coincidence?

Workers across the USA and Europe see their economic conditions worsening. They are not convinced by the statistics. In the UK we are told that wages are rising faster than inflation. And we ask, ‘Whose wages are rising? Because it bloody well isn’t mine’. We are told that unemployment is at an all-time low. And we ask, what kind of jobs are being created? Anybody who is made redundant today knows they have little chance of getting a comparable position in the immediate future. They risk finding themselves in low-pay or casual labour. Yes there are jobs. But what kind of jobs?

We all know that the Tories decided to steal billions from the welfare budget when they started to introduce Universal Credit. Even Tories knew it, and Ian Duncan-Smith quit the government in protest.

And despite all this evidence of a worsening economic situation driving the rejection of the status quo, Mr d’Ancona needs to convince himself that his gut instinct, to despise the lower orders, is right.

He needs evidence to back up his prejudices. Liberals need evidence to justify their prejudices. And they find their justifications easily because they are too lazy to think things through. Here is his evidence.

‘In June 2017, a report collated from the British Social Attitudes survey showed that the most significant factor in the leave vote was anxiety about the number of people coming to the UK. A comprehensive study published by Nuffield College in April drew similar conclusions about the salience of immigration in attitudes to Brexit.’

‘Anxiety about the number of people coming to the UK’ is, for him, the same thing as xenophobia. Forget about the commonly repeated statements by people who expressed this anxiety. How many times have we heard Leave voters explain they are worried that the infrastructure cannot cope. Perhaps what underlies this anxiety is a realisation that the economy is getting worse.

D’Ancona’s mindset is so complacently ensconced in his liberal bourgeois environment he cannot even imagine a world different from the comfortable world that surrounds him. He asserts, without any effort to adduce ‘evidence’:

“We live in a world defined by the economic, social and cultural interdependence of nation states. And those who promise that leaving the EU will deliver “control” are really promising something quite specific: a social and cultural reboot. As well as being morally contemptible, of course, this is also a complete impossibility.”

A social and cultural reboot is not an impossibility, Mr d’Ancona. It is just unimaginable to people like you.

There are millions of people outside your circle for whom a reboot is exactly what they feel is needed. And for many of them the referendum was a chance to say so. We told you what we think. Ignore it at your peril.

Categories UK

A ‘proud Fenian’ has his say

James McClean plays for Stoke City, and has chosen not to wear a poppy.

In a home game against Middlesborough on Saturday he was the subject of verbal abuse from visiting fans, and some home fans, for his choice. McClean’s response was to use a quotation from Bobby Sands:

“They have nothing in their whole imperial arsenal that can break the spirit of one Irishman who doesn’t want to be broken.”

Bobby Sands MP was a member of the Provisional IRA who was elected to parliament while in prison by the voters of Fermanagh and South Tyrone, as a gesture of their support for his opposition to British imperialism. He died on hunger strike in the Maze prison.

McClean grew upon the Creggan estate. Six of the people ruthlessly massacred by the SAS on Bloody Sunday were from his estate. For those of you too young to remember, on Bloody Sunday (30 January 1972) British troops from the Parachute regiment demonstrated their loyalty to British imperialism and their military courage by shooting 28 unarmed civilians, half of whom died from their wounds. Some of the civilians were shot in the back. Some were shot when they went to the aid of others who had been shot.

For the general public McClean had a simple message: “I know many people won’t agree with my decision or even attempt to gain an understanding of why I don’t wear a poppy. I accept that but I would ask people to be respectful of the choice I have made, just as I am respectful of people who do choose to wear a poppy.”

For the ‘uneducated cavemen’ his message was more direct: “To the uneducated cavemen in the left-hand corner of the Booten End stand that want to sing their anti-Irish song each game and call me a Fenian this and that… I am a PROUD FENIAN and no c@#t will ever change that, so sing away.”

Categories UK

Project Fear is back

John Major On Andrew Marr Show 300x243

 

Once again the ruling class are out in force trying to undo the Leave vote. 17.4 million workers and middle class voters declared their wish to leave the capitalist club that is the EU. And ever since that decision was reached there has been a concerted campaign to overthrow their vote.
Voters were too stupid to understand the issues. Only Remain voters were intelligent enough to grasp the issues.
Voters were too gullible and swallowed all the lies and propaganda peddled by the Leave campaign. Only Remain voters were wise enough to believe only the lies peddled by the Remain campaign.
Voters were too dumb to comprehend the dire consequences of even VOTING to leave the EU, never mind the results of actually leaving. Only Remain voters had the courage to swallow the politically motivated cataclysmic predictions of made by the IMF, Treasury, Bank of England and that famously impartial George Osborne.
As the negotiations work towards a final position Old Tories like John Major are now dragged out of the dustbin of history onto the Andrew Marr Show to tell us about the ‘catastrophe’ that awaits us. Meanwhile Amazon lectures the government Brexit minister  on the risk of ‘civil unrest’ if a deal with the EU is not reached.
And Michel Barnier is smiling like a Cheshire cat. No need for him to play the bad guy. He already has Dominic Grieve making the EU’s case for them. This so-called nationalist, whose patriotism nobody has called into question, sides with the big business interests who benefit from the single market and the customs union. In an interview yesterday he warned Brexit would be “absolutely catastrophic”.

“We will be in a state of emergency – basic services we take for granted might not be available,” he said.

Barnier stands quietly by with his smug smile. While he watches the UK government trying to negotiate without being able to walk away from the table, he knows he only has to stand still and do nothing. Concede nothing. Agree to nothing. And watch while the UK talks itself into a deal so similar to membership of the EU that working class voters will have trouble telling the difference.

The real danger, so feared by the ruling class, is that failure to deliver what the working class voted for in the EU referendum could lead to even greater disillusion with the two-party political system they have relied on to control and subvert the wishes of the vast majority of the population.

And when the working class moves away from the Labour Party and it’s pro-capitalist economic framework, the possibility of civil unrest really starts to keep the ruling class awake at night.

Categories UK

An economist explains

You could read a whole article by a highly-regarded economist and come away convinced he is a simpleton. Stephen King of HSBC is no exception.

He wrote a comment piece in the Evening Standard asking whether the Bank of England understood what was going on. Fair question. We know they don’t. But then Stephen, HSBC’s’ senior economic advisor’ and author of ‘Grave New World’ proceeds to demonstrate his own powers of explanation. And it is not impressive.

The questions he was trying to answer were:

1. if employment is so strong, why is growth so weak, and

2. if unemployment is so low, why are wages so depressed?

And his answer is Brexit.

He points out that growth in the UK was consistently higher than in the EU until the European referendum. But 15 months after the vote UK growth has slowed and EU growth has accelerated. This correlation he assumes can be taken as a causal explanation. No evidence needed – just point to a coincidence of two events, and explain one by the other. A fatuous assumption for someone claiming to be a serious economist. You could just as well conclude that the consistent growth in UK GDP was the reason for the Leave vote. After all, the Leave vote came after the growth, so the former must have caused the latter.

When he addresses the two questions he put to himself (strong employment yet low wages, and low unemployment yet depressed wages) his explanation is even more fatuous. ‘This year the eurozone has lost its mojo,’ he tells us. Hold on a second. Is this the same eurozone area he just told us was growing so vigorously that the UK could not keep up? And yet within the space of a paragraph it has lost its mojo. [Mojo, here, is used in its precise economic sense of … oh dear, it doesn’t have an economic sense!)

As he jumps around from one superficial observation to another he lands on another explanation straight out of the Children’s Guide to Economics. ‘…it may be that unemployment is so low precisely because wages keep falling.’

Brilliant. This ‘senior economic advisor’ to HSBC should submit this theory to a peer-reviewed journal. It meets the criteria expected in journals of bourgeois economics. If you cannot explain A by B, switch the sentence around and make B the cause of A.

To bourgeois economists the law of supply and demand is the explainer of most economic phenomena. They do not look past the surface appearances of reality to try and understand WHY supply increases/decreases or why demand increases/decreases. If they did, they might find something resembling a causal relationship. At least they would be trying to find a reasonable explanation. But economics remains at the level of a child staring at a rainbow and seeing that is somehow associated with rain and sun occurring together. No need to delve into the realms of light refraction. That would be scientific. And if there is one thing that bourgeois economists run from, it is any attempt at non-superficial explanation.

So here we have a ‘senior economic advisor’ informing us that, if full employment does not cause wage growth, then low wages cause full employment.

Brilliant!

Tories discriminate against mental health patients. Official.

Esther McVey Supporting Mental Health Patients 300x200The Tories discriminate against mental health patients. It’s official.

The Tory government wanted to save money on benefits. The Tories have a record of attacking the poor Cameron and Osborne claimed they were making difficult decision when they launched their anti-working class offensive, codename Operation Austerity.

In March 2017 the Theresa May government decided to accelerate those attacks by depriving people with serious mental health issues of the right to claim additional benefits for travel. The PIP scheme, which is supposed to assess the genuine needs of people with health issues, contains provisions for additional payment to people who have difficulty travelling, for example with using public transport. People who have mobility issues are assessed and given a score. Claimants who have more than 8 points get a mobility allowance of £22 per week. Claimants with a score of 12 points get an enhanced rate of £58 per week.

So the post-Cameron Tory government, the new caring Theresa May government, the one who makes speeches about caring and supporting the genuinely needy, thought up a great wheeze to save themselves billions of pounds. In early 2017 they introduced regulations that meant people with mobility problems as a result of psychological distress could not get more than 10 points on their assessment. So, no matter how severe the mental health issues affecting their ability to get around, they could not get the higher rate as a direct result of their psychological state.

Why introduce such a specific regulation, unless it was to discriminate against people with mental health problems? No reason. Or at least, that was the finding of the High Court. In December 2017 the court ruled that the regulations were ‘blatantly discriminatory’.

Blatantly discriminatory.

It is estimated that about 164,000 people are affected by these regulations. The government itself estimates that their the ruling against their discriminatory regulations will cost them £3.7bn between now and 2022. Not that cost was an issue for the anti-working class government. They reason they give for their attempt to discriminate against people with psychological medical issues? In the words of Esther McVey, Work and Pensions Secretary, “Our intention has always been to … provide the best support to claimants with mental health conditions.”

By discriminating against them? Saving billions was just a lucky bonus.

Categories UK

The uncaring side of Theresa May

Theresa May 276x300The British Prime Minister cares about the excesses of capitalism. We know, because she told us so. Just not enough to do something about it.

Her most recent foray into the world of faux caring is an article she wrote in today’s Observer. Boardroom excesses can no longer be tolerated, she tells us. So what is she going to do about them? Nothing.

Well thanks for squat, Mrs May.

Perhaps the rhetoric reminds you of the day she stood on the steps of Downing Street  just after she came to office. She told us she would ‘make Britain a country that works not for a privileged few, but for every one of us’. And then did nothing about it. She reached out to the ‘only just managing’ with a sympathetic hand, only for them to realise it was an empty gesture: the hand patted them on the head condescendingly and gave them nothing..

The working class is not taken in with saccharine words. They have heard it all before. If the recent changes in the political environment tell us anything, it is that workers are more cynical about traditional politicians than ever before.

And trite words get an appropriate response from workers who are tired of being treated like fools.

Categories UK