Thursday, August 10, 2006

Foreign Takeovers: a non-issue

From the August 2006 issue of the Socialist Standard

A recent poll shows public opinion in Britain is becoming increasingly perturbed by the changing ownership of the companies that make up the British economy, but does it matter to workers who owns the company that exploits them?

The poll, conducted by Harris Interactive at the beginning of June, found that the acquisition of British companies by those based in other countries is causing major concern, with "more than two thirds of people saying it is now 'too easy' for overseas predators to acquire businesses here," (Financial Times, 19 June 2006) and urging government intervention.

The poll comes after 18 months of intense acquisition and take-over activity on the London Stock Exchange that reaped acash bonanza for the shareholders of a number of well-known companies and shows no sign of abating. The feverish activity has been fuelled, in large part, by foreign-based companies buying UK companies in deals that in the first 10 months of 2005 were worth 70 billion pounds - twice the value of such deals for the whole of 2004. In one week alone in November 2005, four potential deals involving P & O, Pilkington, O2 and Mowlem were reputedly worth £24 billion.

More recent events have aggravated the unease. The announcement that Peugeot was to close its Ryton car factory, destroying 2,300 jobs, was accompanied by persistent rumours that Gazprom, the Russian oil and gas company, is about to take over Centrica in a period of rising gas and electricity prices. The timing of the Harris poll also coincided with the finalisation of the Spanish company Ferrovial's bid for the British Airports Authority, which owns Heathrow, Gatwick and Stanstead airports, among others.

The reason behind all this is not difficult to discover. As noted in the [London] Observer on 6 November last year, "The reason for the activity is simple: five years of belt tightening following the technology boom has left UK plc in robust health. Returns on equity are higher than they have been for years and cash generation has been strong, leaving balance sheets healthy." Since profits in these companies have remained 'healthy' it is evident that it is the working class who have experienced the 'belt tightening' - foregoing improvements in living standards, motivated, one suspects, by the fear of losing their jobs. Growth in company profits in the last few years is not the outcome of a general increase in sales but a consequence of cost savings. All too often these savings are secured by holding down wages, intensifying working conditions and, where necessary, terminating jobs - the destruction of the livelihood of men and women with all the misery and dislocation this entails.

Behind the concern expressed in the survey is the misguided belief among working people that they have a stake in making sure that companies retain their British ownership. Many appear to hold the view that foreign companies cannot be trusted to maintain existing employment levels and have the unsubstantiated conviction that workers will enjoy greater job security when the ownership of their workplace resides with people born in the same country.

It is taken it for granted that those who own the factories, raw materials and land, and those who sell their labour power forwages and salaries within the same country, automatically share a 'common interest,' when the opposite is actually the case. Capitalism has divided the world into two irreconcilable but interdependent groups - the working class and the capitalist class. Despite the fact that the interests of these two classes are antagonistic, the relationship is also strangely symbiotic. The working class own no means of producing wealth and are dependent, through wages and salaries, on those who do, while the owners of the means of production are dependent on a subordinate working class to sustain their position of power and privilege.

The working class exchange labour power for money which allows them to gain limited access to the necessities of life. In this exchange the worker produces value greater than that of their own labour power. This value belongs to the capitalist. Calls for the 'right' to work, sometimes heard in times of economic depression, are therefore no more than a demand for the'right' to be exploited by anyone willing to offer employment. Arguments about 'fair wages' are simply abstractions that acknowledge the power of the capitalist class to dictate the condition of life over the subordinate working class. Society as presently organised cannot be operated in any other way and workers who never look beyond this truism fail to comprehend thatan alternative society that does not work against their interests can be established - but that society is not capitalism.

Production in capitalist society is geared strictly to the generation of profit - extracted from the working class when goods are produced and released when they are sold on the market to those who have the money to buy. Individual companies are dependent on generating and attracting capital to reinvest in order to continue operating.

Capital always chases profit, moving from less successful companies to those where profit expectation is higher, without regard to the effect on employment or human welfare. Capital does not discriminate between the relative merits of the products and makes no distinction between the production of bombs and the production of bandages as long as the risk is as low and the activity as profitable as possible.

Wage labour and capital are in constant conflict. The capitalist class is continuously seeking to reduce the workers' share of the social product to expand the accumulation of capital and has become an uncontrollable independent power without regard for human need, seeking out opportunities to grow anywhere and everywhere across the world. Globalisation is merely the newest name for a process that has been ongoing since capitalism was first established.

Capitalism is an intensely predatory economic system. In the competitive struggle for survival many companies may be driven from business by competitors, while others, attracted by rising profits or a desire to suppress competition will be taken over or merged with rivals. Employment is dependent upon generating profit, which means that the real function of the world's working class is not to make products or provide services but to generate and thenincrease these profits. Working people in every country are trapped in an economic system where they must sell - and there by relinquish control over - their physical or mental energies simply to earn money to buy the things that enable them to resume the same routine, week on week to the end of their working lives. This vicious circle will continue until capital is abolished and capitalism brought to an end.

The conclusion reached in the Harris poll is indicative of worker confusion - a misguided belief that it is somehow less painful to be exploited by the portion of the owning class based within these boundaries than by that based elsewhere. The cause of poverty and insecurity is not the threat of 'foreign' companies but the economic system that sustains the international class monopoly over wealth creation and draws strength by exploiting working people in every country. As long as capitalism is allowed to continue it makes little actual difference to the working class who owns their place of employment - they will remain expendable wage or salary earners.

For as long as workers are deceived into viewing the world from a 'national' perspective, they will fail to understand their condition in capitalism. The working class is deluded by nationalism. Such beliefs actively encourage people to co-operate with their 'national' exploiters operating within boundaries determined purely by historical accident. Nationalism conceals the real nature of capitalism, turns worker against worker and serves to impede working class solidarity. The world's working class have no reason to be antagonistic to other workers but must unite against their common class enemy: the world's capitalist class.
Steve Trott