It is rather amusing for Socialists to listen to the various apologists of capitalism try to justify their support for welfare cuts on the grounds that it is either “immoral” for the state to impose high taxes (the source of state expenditure), or that it is in the interests of the “nation” that welfare payments are kept to a minimum
That the double-speak beloved by newspapers and economists is a key clement in the ideological battle waged by the ruling class against the workers should be evident enough to anyone with a notion at all of class and class struggle. It is hoped by the bosses that the drip-drip-drip of this Chinese water torture will unbalance even the most rational of minds. Sometimes the newspapers and economists join together in a combined offensive on a particular topic of concern to their paymasters—the capitalist class. Recently the object of their ire has been welfare expenditure.
Robert Skidelsky, biographer of Keynes, and ennobled for his services to bourgeois economics, wrote on this theme in the Sunday Times on 11 February. His key argument was summed up in the headline of the piece — “Cuts To Benefit the Nation”. Coming in the wake of Peter Lilley’s announcement of planned changes and cutbacks for the social security budget, Skidelsky aimed to demonstrate why welfare cutbacks and other reductions in state expenditure would benefit “the nation”. By this he did not, of course, mean everyone. In fact, he probably meant only a small number of people at all would directly benefit, though he did not specifically say this. But who could the beneficiaries be?
Nation or Class?
The “nation”—primarily the productive resources of a state like Britain— is not owned in common or on anything like an equitable basis. Britain, like every other country, is a state divided on class lines between those who own and control the means of living and those who do not. For instance, recent statistics from Social Trends, an official government publication, show that one out of every 20 adults has a stake in the means of living equal to the other 19 put together. The top five percent of the population own 53 percent of all financial assets. It is the capitalist class—those who do not need to work for a living—who by-and-large own “the nation”, setting their wage slaves to work to put more wealth in the form of profits back in to the capitalists’ hands.
Although lackeys like Skidelsky present it as such, cutbacks in welfare expenditure and the like are not designed to benefit wage and salary earners. Workers receive an amount sufficient to keep them and their families in a fit condition, with skilled or highly educated workers usually receiving more than the unskilled. Their wages, properly speaking, are a real amount intended for this purpose not a hypothetical sum, and so the burden of taxation (which finances welfare payments) ultimately falls on the capitalist class. Workers may pay some taxes, but the burden specifically falls on the surplus value accruing to the capitalists and not on the wages and salaries of the workers, hence the interest of the capitalists and their representatives in keeping taxation as low as possible. High taxation eats into profits and reduces the amount available for accumulation as new capital.
The state currently takes about 42.5 percent of Gross National Product in Britain, about a third of which is taken up by social security expenditure, currently a colossal £92 billion. This means a large amount of tax taken out of profits, and the proportion has been moving up in most advanced countries for decades, with the state stepping in to cushion the fall from market failures and being further burdened by demographic change.
State expenditure acting as a drag on profits and capital accumulation is the real bottom line for the capitalists, but Skidelsky has a more lofty way to justify the competitive money-grubbing of the capitalists:
". . . the main argument for slimming down the state is moral: it is wrong that governments should take 40 percent and more of our earnings and decide to spend it as they see fit".
Skidelsky goes on to declare himself in favour of cutbacks in state health and education services, on the ground that this can only benefit “our earnings”, but it is a strange kind of morality which has to go to these lengths to defend the wealth of the privileged and justify taking a few more crumbs back oft' the poor. But then when has the morality of capitalism ever been concerned with anything more than the sanctity of profit?
Britain already has some of the lowest benefit levels in the western world so savings made from the unemployed or single mothers will be minimal, though this in itself will not stop the government from trying to stop people claiming benefit or cutting back on payments, as recently with Unemployment Benefit. This is part of the reason why an even greater line of attack has been waged on pensions, with employees being encouraged to take out private schemes to supplement the state pension. Since the 1980 decision to link state pensions with prices rather than earnings the basic state pension has fallen from 22 percent of average male earnings to 15 percent and no government of capitalism in Britain is likely to be able to offer pensioners anything better. The number of those living beyond 75 is expected to double from 4 to 8 million over the next fifty years and this demographic change alone will put further pressure on government expenditure, particularly the social security budget.
Hard Labour
The apologists for capitalism—whether Lord Skidelsky or, for that matter, Tony Blair—see little wrong with attacking the poor when capitalist profit dictates it, and no one should be fooled that attacks on welfare are merely the preserve of the right-wing of capitalism’s political apparatus. The pressures on them from the competitive market economy are the same. The last Labour government from 1974-9 had an equally bad record with inflation eating away at benefits and savings, together with real cuts in wages and salaries. As with the Conservatives, unemployment also rose and along with it job insecurity.
Given his infatuation with private pension schemes and the welfare arrangements beloved in the Far East, Blair and his cohorts offer nothing really new from what the Tories offer now. All that has changed in the world of welfare reform has been some of the language used justify further attacks on a beleaguered working class— the “drip, drip, drip”, this time with an allegedly moral dimension. Skidelsky has in fact put the argument of those who wish to attack benefit levels most succinctly— how despicable of the poor to drain the capitalists of profit! What he—and they— conveniently overlook, though, is that the workers made the profits for the owning class in the first place.
Lord Skidelsky is actually chairman of the Social Market Foundation. A more bizarre title for an organisation could not be found, for given the class nature of capitalism and the attacks it unleashes on the poor, what could be more anti-social than the market? But then such is the double-speak of our times.
Dave Perrin
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