Monday, September 7, 2015

Crack down on the fraudsters! (2001)

The Greasy Pole Column from the February 2001 issue of the Socialist Standard
The queen's speech is when she dresses up in large, heavy and expensive clothes and rides in her carriage to the Houses of Parliament—but only to the House of Lords because, as a result of something which happened a few hundred years ago, she is not allowed into the Commons, who have to be brought to the Lords to listen to the queen by Black Rod, who is called that because he carries one. The MPs go to the Lords with each minister walking beside their opposition shadow, often sharing a private joke but presumably not about the queen because they have all sworn loyalty to her.
When they get to the Lords they hear the queen telling them about the work which is planned for them in the next session, which is a bit boring for the ministers because they know it already. The speech is punctuated with the phrase "My government will . . ." as if the queen is telling the government what to do when really it is the other way around. Some people sneer at all this as a mess of outdated flummery. Others regard it as essential to our way of life and think that without it civilisation as we know it would crumble into the dust.
In December, for example, the queen told us that her government is going to crack down on Benefit fraudsters—people who claim state benefit when they are not legally entitled to. The government certainly thinks this is important because they say it costs between £2 billion and £4 billion a year and some ministers have been known to hint that bloated claimants roll up in posh cars to sign on at the dole office, or skim up a ladder to clean windows when they are claiming disability benefit for a bad back.
Some months before the queen had told us about the crack-down it had been publicised in the DSS Xpress, a magazine which announces itself as "For all staff throughout the DSS" so does not have any Page Three girls or racing tips or agony aunts. But what it does have is no more relevant. The front page of Issue No. 2 (June 2000) is dominated by a piece "Tackling the fraudsters". Based on an interview with Charlotte Abrahams, one of a team running a campaign to expose and prosecute people who make illegal claims for state benefit, the article crackles with teeth-grating quotes like "What fraudsters are doing is unfair" and "We need DSS staff to 'buy in' to the idea and give us their support”—which make Page Three and tipsters and agony aunts seem rather less objectionable. Charlotte tells us that benefit fraudsters ". . . are taking public money—our money—that is meant for the vulnerable". She highlighted a recent TV campaign which depicted the Social Security "cheats" as greedy cynics who are willing to stoop to scrounging drinks off their mates. Anyone who felt their gorge rise when they watched these ads could have gone out to get away from them, except that if they did that they might have come across the same message, plastered across the backs of buses.

But the DSS Xpress is not content stop at hunting down illegal benefit claimants. On the back page there is a piece about another anti-fraud campaign—this one against Social Security staff. The hunter-in-chief is one Tony Edge, who has worked for the DSS for over 30 years and is now a man with "a special interest in fraud and compliance issues". He is not one to mince his words: "This is an important matter with potentially serious consequences in terms of the loss of public funds and the public's confidence in us". (After 30 years, it seems to have escaped him that there are very few organisations "the public" have as little confidence in as the DSS). The burden of Tony's campaign is to encourage staff members to spy on each other and to report anyone they suspect of defrauding their employer in any way. This can't be healthy for what is called staff relations but in case anyone fails to understand what is expected of them there are three touching stories about how this has worked in individual cases, one of fiddling expense claims, another of claiming benefit while working, and another of using unauthorised software in the DSS computers. So far, no stories of anyone smuggling the odd paper clip home but presumably Tony is working on it.
We might have expected that the Labour government, ever alert to any opportunity to exploit popular neuroses, would come up with a policy to bash the Social Security fraudsters. The policy announced in the queen's speech had already been flagged up at Labour's conference in September, when we were told about plans to take new powers to trawl through bank accounts and insurance policies, to check telephones and electricity and water meters of people suspected of making false claims. Tony Edge must have been quite excited at the prospect. The government can claim to have a mandate of sorts for this, for their election manifesto used militant words like "crack down . . . clampdown . . . maintain action against benefit fraud of all kinds". Which was not new or different because the Tories were making the same threats: "Social Security fraud," they screamed in their manifesto, "must be stamped out". They had already started on this: it was Peter Lilley who began hunting down the fraudsters when he was in charge of Social Security; in 1994 he set up a Benefit Review, partly to measure the scale of false claims. It should not surprise anyone that New Labour are enthusiastically carrying on where the man they once hated, as the most implacable representative of Thatcherite policies, left off.

In places where the real world of poverty and survival operates, the estimate that fraudulent claims run into billions of pounds every year does not go unchallenged. The Royal National Institute for the Blind has examined how the Benefit Review decided that the claims for Disability Living Allowance were potentially losing £499 million a year through projected fraud. They concluded that the Review arrived at this figure by adding the amounts involved in "suspected fraud" (which were not in any way proven) to those in "confirmed fraud". When we take into account the fact that of 1,200 interviews carried out by the Review the number of cases of "confirmed fraud" was only 18 we see the matter in a rather different light. In fact, if each of those 18 people had been receiving benefit at the highest level the loss would have amounted to £77,000. Set against this, the Review projected underpayment of benefit, due to under-reporting or to mistakes by Benefits Agency staff, of a little over £230 million. To put a human face on their findings, the RNIB listed cases in which blind, sometimes elderly, people had had their claims, which were quite within the rules, refused and who won their case only after a long and stressful appeal. Of course it would once have been quite proper for these people to be scourged by Peter Lilley—and now by his successors in the Labour government—as scroungers and fraudsters.
The assault on so-called fraudsters is popular with politicians because it has a number of elements crying out to be exploited by anyone with ambitions to climb the greasy pole. The victims of the assault are often among the more deprived and vulnerable people. It is easy to depict them as calculating, cynical scroungers when they are often simply desperate about how to survive, and not doing this as efficiently as they might. In many cases when they have made false claims they have overlooked the fact that they could have applied legitimately for some other benefit, except that nobody at the DSS went out of their way to tell them and the forms were too long and complicated. They are typical of the human casualties of this social system in which workers are judged by the degree of their availability for profitable exploitation. In terms of their access to the wealth which their class produces they are in the lower reaches, where poverty means sickness and premature death. In June 2000 researchers at Glasgow University found that women from poorer backgrounds are three times more likely to contract cervical cancer. In September the Joseph Rowntree Trust stated that two million children in Britain are in conditions where they lack at least two "basic" amenities, things like a damp-free home, an annual holiday or usable furniture. Yet these people are among the class who produce all the wealth of capitalism. The fact that they allow themselves to be deprived of proper access to what results from their labour is a fraud on a scale which historically dwarfs the most lurid of what happens down at the Social.

Then we must ask what are we to think about the assurances from political leaders, that the problems of society can be ameliorated, or even eliminated, by a few simple measures. Blair's Labour Party is particularly eager to try this deception. That is why they make so many speeches denouncing some uncomfortable aspect of working class life, as a prelude to churning out yet another new law to reassure us that nothing more is needed to settle the problem. In this way we get a law against the so-called yob culture, which is defined, not as the boorishness of MPs in what they call their debates but as disruptive behaviour in city centres by alienated youngsters. Or a law which slaps a curfew on teenagers, on the grounds that if a young person is on the streets after a time approved by Jack Straw they are bound to be planning to burgle an old person's home. And a law clamping down on Social Security fraud. Get rid of problems like these, we are informed, and we shall benefit enormously from the existence of a working class which does not rebel against the repression of its social position. All of that argument is fraudulent.
And finally, Blair's Labour Party won millions of votes by persuading people that they are a proper alternative to the Tories and that under their government capitalism in Britain would be run in a different, more humane and progressive way. There is a mounting pile of evidence to expose how untrue this is, including the government's assault on people who practice a kind fraud which is unacceptable to capitalism. Which makes the Labour Party among the worst of fraudsters, whose exposure should be a priority.

Postcapitalism? (2015)

Book Review from the September 2015 issue of the Socialist Standard

'Postcapitalism. A Guide to Our Future', by Paul Mason. Allen Lane.

In his new book Channel 4 journalist and one-time Trotskyist Paul Mason begins by explaining the periodic growth and contraction of the capitalist economy by Kondratieff wave theory.

Kondratieff waves are named after the Soviet-era Russian economist (shot under Stalin) who imagined a 50-year periodicity in capitalist economic activity, and who then concluded that each economic cycle reflected the advent, adoption, flourishing and demise of its age’s defining technology.

Kondratieff’s waves operate on a timescale midway between the epochal transformations of social systems, based on a change of class ownership and control of the social means of production, and the Marxian economics of nature-imposed social reproduction under the capitalist social system, based upon its characteristic mode of class ownership and control of the social means of production.

Scientifically, one would seek to explain Kondratieff’s apparent wave phenomena in Marxian terms, i.e. in terms of the social system’s essence – capital-- but such attempts have so far failed to convince and this intriguing problem for Marxian theory remains unresolved.

However, for the purposes of Paul Mason’s argument, capitalist society has now started to ride the information technology Kondratieff wave. For him, information technology is the surfboard that took us out to the wave and, once we master it, it will be the surfboard that rescues us from the capitalist depths and carries us to the post-capitalist shore. Our ride will take one Kondratieff period of 50 years.

So what characterises the Kondratieff IT wave which Mason says we are now on?

The IT wave has already established its essential characteristics through the emergence of free Open Source software, free creative commons internet resources, free Wikipedia collaboration, etc. The IT wave’s free goods are premised on the assumption that IT development and IT maintenance require a vanishing amount of human labour, and that consequently IT software products and IT firmware-based technology possess a vanishing marginal cost (i.e. can be replicated for everybody for free). And IT technology will invade everything we produce.

His argument is that this characteristic invariant of the IT wave -- free technology and its technology-based products -- is totally subversive of capitalism, since the indispensable compulsion for a capitalist ruling class to withhold ownership and control of the means of production from the working class, thereby forcing the working class to work on its terms, will no longer serve its capitalist purpose once everything is free. The means of production might just as well be owned by everyone or by no-one.

That, in a nutshell, is his argument. IT will issue us into an Age of Abundance -- the necessary precondition for postcapitalism to succeed. Postcapitalism will be characterised by renewable energy, neutral carbon, zero socially necessary labour time, and zero marginal cost.

So far, so good, up to a point. Some interesting socialist (in our sense) arguments, entertainingly and intelligently told, including a good description of the labour theory of value, a good discussion of the economic calculation pseudo-problem, etc.

But Mason’s argument is tainted by his apology for gradualism and his reformist transitional plan.

If this seems an unnecessarily harsh judgment, judge for yourself from the legislation, and the prevailing capitalist social relations under which it is to be promulgated, that he wants ‘a government that embraced postcapitalism’ to pass while on its IT Kondratieff wave.

Here is his list of some of his transitional reforms outlined in his final chapter as ‘Project Zero’: Suppress market forces for energy. Suppress or ‘socialise’ all monopolies. Pay everyone a basic income. Regulate the rate of profit. Enforce profits to be ploughed back into ‘social justice.’ Make WiFi free to break up the telecom monopolies. Cheapen the cost of basic necessities. Produce more stuff for free. Sell water, energy, housing, transport, healthcare, telecommunications and education at cost price. Shrink (national and personal) debt. Reduce the time for holding patent and intellectual property rights, e.g. 25 years. Increase the use of creative commons copyright. Incentivise investment in renewables. Support local power grids. Elect bank bosses democratically, and scrutinise their financial behaviour. Track down and suppress all off-shore trading. Make it unethical for a chartered accountant to propose a tax avoidance scheme. Issue fiat money to kill neoliberalism. Increase the velocity of circulation of money to ‘tame’ speculation. Set a high inflation rate to stimulate sustainable growth, etc. etc.

His laudable aim is to promote the transition to a non-market economy of abundance where goods and services are free, but his long transition period turns out to be a fantasy hybrid world, an illusory economy in which markets, profits and banks exist alongside a growing non-market, non-profit, non-money-based sector.

The Marxian answer to his gradualist project and its reform agenda is that, while capitalist social relationships exist, his reforms have no chance of succeeding. And once a socialist majority consciously abolishes capitalist social relations of ownership and control of the social means production, his reform agenda becomes redundant, unnecessary and meaningless.