‘The money is there to make a better society and economy — it’s just in the wrong hands. We need to raise taxes on the wealthiest in society, and on those corporations who make record profits while our members struggle to put food on the table. That wealth should then be invested back into our communities — in housing, in health, in education, and in an industrial strategy that creates secure, unionised jobs. And investment must go hand in hand with a just transition that puts public need before corporate greed.’ So wrote Sarah Woolley, the general secretary of the bakers’ union, in the Morning Star (27 September).
By money she presumably means the monetary value that is attached to wealth produced in a capitalist society. Money, in this sense, comes into being when the wealth workers produce is sold. This is initially divided into wages and ‘surplus value’ as the part of what workers produce over and above their wages which is appropriated by the business corporation that employs them. The surplus value then comes to be divided into profits, ground-rent and interest. These are taxed by the government to get money to spend. What is left is accumulated by capitalists as more capital, with some spent to fund a privileged lifestyle.
So, at the end of a year a given amount of wealth, as measured in terms of its monetary value, is produced. There are also wealthy individuals and corporations who own previously produced wealth.
Woolley seems to accept this set-up and wants the government to change how what is produced under it is distributed. Some of the wealth appropriated by capitalists in the course of a year is to be taxed as well as some of the wealth accumulated by them in previous years. This ‘money’ is to be spent on better health, housing and education for the wage workers and their dependants and re-invested in providing secure and better paid jobs. She doesn’t put a figure on this but presumably the amount the government would spend would be much more than it now does.
She doesn’t seem to have taken into account what would happen if this was attempted. Remember we are talking about this happening in a capitalist economy where decisions about wealth production are in the hands of profit-seeking corporations.
So what would happen? First, the profits that corporations get to keep will be smaller. Since profit-making is what motivates them that incentive will be reduced. Less profit will mean less investment, resulting in less wealth — less money in her sense — being available to tax in the following year. Less investment would also mean fewer jobs, and so less paid out in wages. In short, there would be an economic downturn.
The fact is that a government cannot simply take money from the capitalist class and spend it to improve things for the working class. It cannot put ‘public need’ before ‘corporate greed’.
Woolley could come back and say that in that case the government would have to use some of ‘the money’ taken from the wealthy and their ‘greedy’ corporations and itself invest it. That would create other problems as the state investment would also have to yield profits to be sustainable. Maybe she does envisage a state-run capitalist economy as the way out, but it’s more likely to be a typical example of the confused rhetoric employed by left-wing trade union leaders — and by the left-wing politicians behind the new Corbyn party — which reflects a lack of understanding of how capitalism works.
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