Sunday, November 19, 2023

Poverty — fiddling the books (1986)

From the August 1986 issue of the Socialist Standard

Creative accountancy is something which, it is claimed (by accountants, of course) can rescue companies from bankruptcy. It has nothing to do with production (so no need to worry about strikes, shortage of components and the like) and nothing to do with sales (so no need to worry about Japanese competition). It is an imaginative, elegant restructuring of the books so that what were once shown as losses can now be shown as profits. This can sometimes be done through hiding real costs in the accounts, for example:
. . . the (first) nuclear programme was politically determined and exempted from CEGB rate of return tests. Without that exemption no nuclear power stations would have been ordered between 1958 and 1964. (Atomic Crossroads. John Valentine).
Another example came during the coal strike of 1984/5. when it was argued that a change in the accounting method would move many of the pits which the NCB wanted to close out of the red. The mind of the ordinary person in the street may well boggle at such esoteric, unproductive wizardry; it might also grasp how this exposes the central motivation for production under capitalism, how the very concept of profit is so obsessional that it has to be seen to be assuaged regardless of what actually goes on in the real, physical world where coal is physically dug out of the ground by real, living human beings.

We can see a similar unreality when we compare how election promises and party propaganda compare to what actually goes on in the world. This social system is characterised by some horrifying problems, many of them so outrageous that it is difficult to appreciate their full enormity How, for example, do we confront the fact that each year millions of people endure slow, tortured. degrading death through starvation while in EEC countries there is such a "surplus" of grain on the market that the British government are considering paying farmers up to £80 an acre to let their land lie fallow? How do we cope with the fact that the way capitalism uses nuclear power — Chernobyl was the most recent case in such a way that it threatens to blanket vast areas of the world under lethal radiation? How do we keep in proportion the fact that the nuclear powers have amassed enough destructive force to wipe us all out many times over and to leave the world in a condition which no sane person is likely to want to be alive in?

Such things can be accepted — they are accepted by tens of millions of workers — with a little help from the political equivalent of creative accountancy, in which reality becomes lost behind expediency. In some cases, the aim is to convince us that certain problems don’t exist. Unemployment, for example, is due to workers being unwilling to look for work. British nuclear power stations could not possibly blow up like Chernobyl, which everyone knows was made of substandard cardboard and elastic bands. The best medical care is freely available to even the poorest people in this country, which makes us all overflowing with health and vital energy. Of course there are a few matters which still trouble us but they will be dealt with — they are, in Thatcher's recent words, dragons yet to be slain. This style of argument looks good on the political balance sheets in election programmes, newspaper articles, speeches to the party faithful.

This technique has been applied with special vigour and skill to the issue of poverty. First, there is the attempt to convince us that poverty has been wiped out; it was a problem. it is conceded, in the days when the hunger marchers came down from the idle pits and shipyards and when miners were photographed scratching desolately on slag heaps. But things are different now. with millions of cars choking the roads, millions of homes wallowing in the luxury of TV sets, washing machines, microwave ovens . . . Children are better fed, better clothed, than ever. Pensioners, who were once in so desperate a plight that they formed their own pressure group, can now survive comfortably on their benefits, topped up with lunch clubs, charity outings and so on.

However, in the face of these complacent assurances, the poverty lobby persists in churning out facts about the suffering of people who exist on the barest minimum people who are malnourished, who dress in jumble sale cast-offs, who are under the extremities of stress. When the evidence to show that this is happening is too compelling to be denied, another technique is applied, which allows an admission that the problem exists but asserts that it can easily be solved with some adjustments in state benefits or by fiddling with tax thresholds and rates. This is what the Labour Party meant, when they claimed in their 1974 election manifesto that they would ". . .  eliminate poverty wherever it exists in Britain . . . achieve far greater equality of income, wealth and living standards..."

That was a very ambitious promise and since then both Labour and Tory governments have had their chance to bring it to reality. And what have they been able to do? In Britain today something like nine million people — about one sixth of the population live at or below the official poverty line, that is to say at or below the level of Supplementary Benefit. (It is not possible to be any more exact about the numbers because the last official count to be made public was taken in 1981, since when there has been a convenient official silence in the matter; however we do know that since 1981 more than a million people have been added to those on Supplementary Benefit). To put this into proportion, it should be stated what this poverty level is. A single person gets Supplementary Benefit of £29.50 a week; a couple £47.85; a family with two children £68.05, with housing costs paid separately. Not surprisingly. there is some feeling that a more realistic measure of poverty would be rather higher, say 40 per cent above Supplementary Benefit. This would increase the numbers in official poverty to about 15 million, or one in four of the population.

Apart from the official line, there are many ideas about what constitutes poverty. Keith Joseph thought that it is not being able to afford to eat (perhaps this has something to do with the fact that Joseph once preferred to dine on a slice of wrapped British Rail fruit cake - the kind of eccentricity that only the rich can safely indulge). In fact, malnutrition is by no means unknown to people on Supplementary Benefit. Mrs L has five children between 11 years and nine months; her husband is disabled and unemployed and can't lose the drink habit he developed when he was a building worker. Their home reeks of material decay and of despair. Mrs L subsists on a diet of tea and apathy. Then there is Mr J who was a factory manager, many years ago, until the strain of his job pushed him into a mental breakdown and wrecked his marriage. He lives alone now with his anxieties and his bitter memories of the days when he could at least afford to pay the bills. He is, quite simply, starving to death. People like this are beset with advice, from Norman Tebbit's caustic goadings to social workers' desperate attempts to get Mr L to give up his drinking, Mr J to balance his meagre benefits against the costs of living. Against the inexorable effects of poverty, they are fighting a losing battle. In 1984 nearly a million council tenants were behind with their rent, to the tune of about £240 million; 1.5 million electricity users and over one million gas users are currently in serious difficulty over paying their fuel bills; nearly 11,000 people had homes which were described as "theirs" repossessed through mortgage arrears in 1985 — a fourfold increase since 1979. These symptoms are such as can be costed, recorded, put into statistical tables. Less calculable are the other, equally devastating effects of deep poverty — the inability to afford adequate clothes, or decent furniture, or a warm home in winter, or a holiday, or an outing . . .

In one degree or another these deficiencies, or the fear of them, exert a constant pressure on the entire working class — on everyone who depends on employment to live. There is however another group of people who can fall sick, or drink more than is good for them, without descending into unmanageable destitution. The present John Paul Getty suffers from a persistent disorder in his blood circulation; for the past 18 months he has been staying at the London Clinic, where it costs at least £200 a day to be a patient. This is no problem to Getty for his weekly income is in excess of £1 million. The Duke of Westminster recently suffered a reduction in his income, not because he was ill and off work but as a result of the 1967 Leasehold Reform Act which, the Duke complains. has cost his estate about £2½ million in income. There is no need to feel sorry for the Duke, or to offer him considerate advice for he is the richest man in England but we might speculate on the scale of ownership of the means of life which is required to produce an income of £2½ million and reflect that that is only a part of which the Duke owns and a fraction of his income.

Poverty is persistent because it springsfrom the existence of two classes in society — one which includes Getty and the Duke, who own the means of wealth production and distribution, and the other which includes Mrs L and Mr J who don’t own them. This second class needs to be in employment in order to live. When they are in work (although they often tell themselves that they are not impoverished) they receive wages which in general, overall terms amount to about enough to reproduce their working abilities. If for any reason they can't command a wage — if they are out of work or disabled or mentally ill or a single parent — they quickly slide down to the lower reaches of poverty where their very health is at immediate risk. Poverty can't be abolished unless something is done about the way society is organised at its basis. Reforms which promise an end to poverty at the most change its shape, or rearrange its emphasis, or shift its burden from one group of workers to another.

This is what has happened in recent years. The whole system of what is mis-called social security was based on the assumption that unemployment would never again amount to much and that workers who were in work would earn enough to fulfil the modest expectations about their standard of living without any state benefits. One consequence of this was that pensioners were relegated to the lower levels of poverty; in the early 1970s they made up a little over 50 per cent of Britain's worst-off people. There was much doleful debate, during the 1950s and 1960s, about the increase in the numbers of pensioners and about whether "the country" could "afford" to pay out more and more in benefits to them. And then the recession came to change the picture. In 1981 unemployment was said to be responsible for nearly three million people being at or below the official poverty line and was exerting a downward pressure on the wages of those in work. Nearly one million employed workers in Britain earn less than what the European Social Charter specifies as the "decency" wage and over a third of all adults off dally classified as being in poverty are families where the "head" is in full-time employment. Pensioners have now be superseded, as the worst sufferers from poverty, by couples, with or without children, who are in work.

Reformists and pressure groups, in which capitalism abounds, tell us that there is great merit in this shifting of the burden of poverty from one group of workers to another while the capitalist class enjoy their privileged riches. Some years ago, for example, there was a heated debate about whether allowance should be paid by voucher to the mother or to the father by means of an "income tax allowance". It was, as we say, a heated debate — so hot that it shrivelled the important issue of why workers should bother about so trivial an adjustment in their poverty. But the reformers had their way. As long as the working class allow this to continue their poverty, which cruelly represses them, degrades them and often kills them, will continue and the issue of creatively  ending it will not be confronted.

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