Monday, April 12, 2021

Biodiversity loss and the capitalist economy (2021)

From the April 2021 issue of the Socialist Standard
The Dasgupta review: 600 pages on how capitalism destroys nature, with no mention of capitalism.

In February a 600-page review commissioned by the Treasury titled ‘The Economics of Biodiversity’ was published. The author — Sir Partha Dasgupta, Professor Emeritus of Economics at the University of Cambridge — set out to analyse the effect of the economy on nature, describing how, at current rates of consumption, the loss of biodiversity will soon be too expensive and may likely be catastrophic, and suggested that the way-out of the crisis is to give up GDP as the measure of economic progress.

Global warming enjoys a lot more attention than biodiversity loss but, as beneficial as slashing greenhouse gas emissions is, underestimating the likely impact of biodiversity loss could prove to be a deadly mistake. As the Dasgupta Review points out, many ecosystems, including tropical forests, wetlands and coral reefs, have already been degraded beyond repair, which, according to Dasgupta, ‘could have catastrophic consequences for our economies and wellbeing’.

Humanity’s impact
Humanity’s impact on the natural world is severe: animal populations have dropped by around 70 percent since 1970, and only 4 percent of the world’s mammals are wild; in effect, we are living during the sixth mass extinction of life on the planet. And it is not only about living beings: according to the Review, only in the last two decades, the stock of ‘natural capital’ per person fell by 40 percent. What Dasgupta means by ‘natural capital’ is not only the share of animals and plants per global citizen, but also their share of breathable air, drinkable water and soil in which to grow food; so the rapid reduction of these most basic prerequisites for life is truly alarming. Fringe high-tech solutions or short-term financial fixes that do not tackle this problem head-on would just squander the valuable resources we urgently need for our very survival.

The Review states:
  ‘Our economies and well-being depend on our most precious asset: Nature. Our demands far exceed Nature’s capacity to supply us with the goods and services we rely on, so that to keep the present rate of consumption, we would need 2 to 4 Earths by 2050 (depending on the speed of population growth). Once an extinction tipping point is reached, it is exceedingly expensive or impossible to reverse the damage, which fundamentally puts under question the prosperity of future generations.’
So far so good, and these are all valid and important points. But what does the Review say about what lies at the heart of the problem, and how to solve it? According to Dasgupta, 
the problem is two-fold: the first part is the market failure, as most natural assets are undervalued or even free, and so we do not invest in them; in addition, it is an institutional failure because governments subsidise the destruction of Nature (for example by supporting fossil fuel companies) at the rate of US$4 to 6 trillion per year, while giving only US$68 billion (or about 1 percent of the ‘destruction fund’) for its protection.
This formulation of the main problems, however, raises several questions. It assumes that the market is somehow unable to cope with this particular problem, so it needs to be regulated by governments, and that the governments in turn are not doing their jobs well — which is why we have this crisis on our hands. Calling this a market failure means assuming that the market normally takes into account real costs of materials and services. Yet in our globalised economy, where one person’s wages are hundreds of times higher than another’s; where you can get millions for making your computer perform incredibly complex calculations (like bitcoin mining) that help nothing or nobody at all and require enormous amounts of electrical power; where it is cheaper to ship ‘sustainable’ clothes from around the world, only to trash them into ‘recycling’ containers that will be shipped all the way back to never get recycled; where the price of oil went negative last year — in this economy, undervalued assets are not an error or an exception. In fact it is rather a common occurrence that we must acknowledge if we want to understand the forces influencing the current crisis.

Of course, government subsidies to fossil fuels facilitate exploitation of Nature, but Dasgupta fails to see that what drives this exploitation — the motivational principle at the very foundation of the economic system is making a profit. It is simply profitable to exploit Nature, and this is why it is being exploited. Yet somehow professors of economics and company CEOs go out of their way to make up excuses, thinking up complex theories and explanations — all this only to avoid facing up to the truth. As long as we have a monetary, for-profit economic system that makes growth and accumulation of capital the biggest impetus for productive activities, we will continue to be plagued by wastefulness, perverse luxury, inequality, dehumanisation, and yes, rapacious exploitation and loss of the very natural environment that gives us life and nurtures us.

Set up to fail
What should we do then in order to solve this “market and institutional failure”, according to the Review?

Dasgupta notes that ‘the very first step is to understand that our economies are embedded within Nature, not external to it.’ The almost exponential economic growth in the last 100 years, with all the resources it has been devouring, does not seem very likely to be sustainable for much longer, as we would run out of forests to burn and fish to catch. Dasgupta is aware that capitalist theory has been debating a way out of this conundrum by devising various schemes to reroute almost all economic growth from resource-intensive activities such as heavy industry into the virtual and services areas (like software development, entertainment, etc), so that it would get decoupled from resource use, and we would be able to happily continue to invest in the market and make more and more money, ad infinitum.

He takes a bold step in his Review when he explains, with some calculations and copious literature citations, that this is not likely to be possible. Simply put, increased profits inevitably lead to increased spending, and that almost always involves the use of raw materials. Even virtual activities are not ‘free’. For instance, data processing centres require increasingly large amounts of energy (for perspective, Bitcoin has a carbon footprint comparable to that of Argentina), and over 60 percent of the world energy still comes from burning fossil fuels. 

Dasgupta emphasises that the current path presents extreme risks, and that truly sustainable development would need a ‘different path, where our engagements with Nature are not only sustainable, but also enhance our collective wealth and well-being, and that of our descendants’. He offers three broad recommendations of solutions, not one of which, however, directly addresses the clear logic of capitalist, for-profit destruction of Nature.

Ineffective recommendations
The first recommendation is to reduce demands on Nature by increasing efficiency and utilising so-called ‘quantity restrictions’ rather than pricing mechanisms. In other words, Dasgupta advises against relying on the market, even with the usual interventions of price controls, as it is unlikely to work. What will work now, according to him, is to ban certain practices, for example to fence off more and more natural habitats and prohibit any kind of commercial activity there. While it is encouraging that the Review acknowledges that markets are not the key to solving this problem, government regulation — even though there are several examples of successful species recovery or habitat restoration — will not be able to reverse the effects of the overall economic system that is fundamentally based on the principle of resource consumption and growth. Such restriction measures are akin to attempts to stop the flow of a river with an obstacle — the water (or money) will inexorably find its way around, as we have seen happen time and time again.

The second recommendation is to ‘change our measures of economic success’ from GDP, which does not take into account things you don’t directly use for profit-making, like rare animal species or human happiness, to something Dasgupta calls ‘inclusive wealth’. This new measure of economic success would include natural assets, so if you gain a monetary profit while decreasing the pool of available natural resources, your overall measure of wealth would not grow. This new concept, however, is proposed as a means to improve national accounting systems. What happens when you eat into another country’s natural wealth? It is common practice nowadays that developed countries import raw materials for their technologically sophisticated exports from poorer countries that have little else to offer the globalised market (and trade agreements and IMF loans make sure it stays that way). To really work, this system would have to have all countries in the world agree to it, and so far even a seemingly straightforward worldwide tax agreement that would help alleviate the burden of tax evasion seems beyond reach. Maybe the reason it has been so elusive thus far is this very disconnect between the powers-that-be, on the one hand, demanding a fair distribution of wealth and, on the other hand, actively promoting and rewarding the accumulation of capital.

In his third recommendation, Dasgupta proposes the creation of supranational institutional arrangements to charge for the use of Nature and to then use this money to support these arrangements. He calls on businesses and financial institutions to integrate Nature-related considerations into their strategies. Finally, he suggests that the ultimate responsibility for sustainability lies with us as individuals.

All in all, there are definitely many valuable points in the Review, especially considering that they come from an established economist. At the same time, the proposed conclusions and recommendations show that, functioning for so long within the system, Dasgupta is unable to see beyond its borders, to think outside the box, and so is oblivious to the underlying imperative of capitalist logic that demands profits above all else, and at the expense of everything else, and which is leading us all on the march to devour the planet itself. That would explain why in the 600 pages of the Review the word capitalism is only mentioned once, and even that referred to a description of some academic economics theory that had nothing to do with our current biodiversity crisis or its underlying processes.

In his article ‘The Non-Monetary Economy’ Edgar S. Cahn estimated that, if valued in monetary terms, non-monetary components of the economy, such as household labour and civic activity, would be equivalent to almost 50 percent of GDP (Link). This shows that, as social and intelligent animals, we are happy to work for what we believe is necessary and will help our loved ones and our communities, even when we are not getting paid.

If we are serious about surviving and leaving our planet to our descendants in a liveable state, without a huge environmental debt impossible to settle, what we really need is not just to abandon GDP as the measure of economic success, but to urgently abandon altogether the monetary, for-profit economy itself and to embrace the socialist system of resource administration as the truly humane, sustainable and fair system of social and economic organisation that respects nature and the scientific principles of its management.
Roy Auss

Reformist essays (2021)

Book Review from the April 2021 issue of the Socialist Standard 

An Inheritance for Our Times. Principles and Politics of Democratic Socialism. Edited by Gregory Smulewicz-Zucker and Michael J. Thompson. OR Books, 2020. 412pp.

This book announces itself as ‘a reader that includes essays in the form of both personal accounts and intellectual arguments from activists and theorists advocating a democratic socialist outlook’. The essays, 30 in number, are written mainly by American academics, but the language used by most is not overly academic making it a fairly readable collection and with a political range far wider than just the USA.

The editors’ introduction sets the scene trenchantly: ‘The mass-consumption society erected over the course of the twentieth century for the purpose of generating never-ending surplus for the few and political quiescence for the many has metastasised into a global form of life’. The society they are talking about here of course is capitalism and most of the contributions that follow are directed at proposing ways in which capitalism can be improved on or replaced by something better, usually referred to as socialism.

The trouble is, as we all know, there are many ‘versions’ of socialism and most of the contributors, however well intentioned, propose ‘socialisms’ that most Socialist Standard readers would not recognise as the society of common ownership and democratic organisation that the Socialist Party has put forward over the 117 years of its existence. What the essays mainly argue for is a variety of more or less radical re-shapings of capitalism but not its abolition with the establishment of a moneyless, marketless system of production and distribution based on ‘from each according to ability to each according to need’. So though framed in terms of, for example, the replacement of ‘production for profit with production for social need’, when looked at closely what is usually envisioned is a ‘fairer’, more ‘equal’ form of the money system.

So while in his essay ‘Essential Socialism’, Fernando Gasparin argues correctly that struggles over reforms are, in Rosa Luxemburg’s words, ‘a labour of Sisyphus’ and that ‘each reform successfully rolled up the hill can roll back down again’, this does not prevent him arguing that ‘socialism needs a constitutional provision providing for public democratic control of banks and financial institutions’. Nor is it uncommon in the collection to find references to socialism coexisting with the market, as in the chapter by David Schweickart entitled ‘Marxist Market Socialism’. In another chapter, ‘Socialism and the Democratisation of Finance’ by Fred Block, there is reference to ‘a democratised financial system’ as part of the ‘regulatory apparatus of socialism’. Most of the contributors find it difficult to envision the stateless society that socialism must be. For Lester Spence, for example, in his essay entitled ‘The Democratic Socialist Imaginary’, ‘democratic socialism’ is defined as ‘a state form that combines public ownership of the means of production with a form of government based on popular elections and popular means of creating government policy and state institutions’. Elsewhere the currently popular concept of a guaranteed basic income figures strongly, as do other ‘socialist’ ideas such as ‘worker cooperatives’ and the ‘model’ of Scandinavian social democracy.

On the positive side, there seems at least to be general agreement among contributors that what happened in Russia in 1917 and developed from that was a bogus, or at least distorted, version of socialism (‘state domination, a hierarchically organised command economy, ruthless industrialization, antidemocratic political institutions’, as one writer puts it) and that those groups on the Left who still see some virtue in Lenin’s Bolshevik takeover and put the failure of the Soviet system down to Stalin prevailing over Trotsky are also barking up the wrong tree. And in a number of these essays, the modern-day supporters of Lenin and Trotsky who still insist on the need for a vanguard party to lead workers to overthrow capitalism are given short shrift. In his chapter, ‘What is Socialism?’, Stephen Bronner explains how Leninist ‘democratic centralism’ can only lead to authoritarian rule by a minority. Smulewicz-Jucker (‘Democratic Socialism contra Populism’) sees Leninism as calling for ‘an elite party leadership to determine the working class’s true interests’.

A number of writers too remind us that Marx, regardless of how his writing has been used and abused over the last 150 years, did not see socialism (or communism, and we are reminded that the words were used interchangeably by Marx) as state ownership but as common ownership, entailing the abolition of the wages system and free access to all goods and services. Rohini Hensman, in her ‘Marx and Engels on Socialism’, correctly points out that in Marx’s concept of socialism ‘all class divisions will have been abolished… Products will not be sold as commodities, and there will be no money. Labour time will be minimised and free time will be maximised. Since capitalism is global, it follows that socialism would be global too’, and ‘Marx and Engels repeatedly make it clear that there will be no state in a socialist society’.

Support for this vision seems to be present in some of the essays in this collection. For example, Barbara Epstein, in ‘What Socialism Means’, states: ‘Socialism refers to the goal of an economically egalitarian society based on cooperation rather than on competition and the exploitation by some of the labour of others.’ Peter Hudis (’Democratic Socialism and the Transition to Genuine Democracy’) reminds us of Rosa Luxemburg’s dictum that ‘there is no socialism without democracy and no democracy without socialism’ and makes it clear that socialism needs ‘a global transformation’. Yet that writer, like others who seem to express support for this view of socialism, tend in the end to fall back on ‘in the meantime’ or (as one writer puts it) ‘incremental progress’ reformist prescriptions of one kind or another. This ‘in the meantime’ mentality (which is in fact a prescription for never getting to socialism) is well encapsulated by Hudis himself when he states: ‘Democratic socialism requires involving masses of people in a political project that fights for and secures needed reforms while focusing on the long-term need to transcend capitalism.’

In the midst of all this, however, the book does contain some strikingly pithy insights into the pathology of capitalism and also into the essential features of socialism. Examples are: Lester Spence’s description of schools as ‘spaces designed to inculcate market behaviour in parents, students, staff and administration’; Wilson Sherwin’s (‘Less Work For All! Reclaiming a Forgotten Socialist Aspiration’) characterisation of an increasingly brutal workplace as ‘hustle culture’; Steve Fraser’s standout piece in the collection (‘Capitalism, Socialism and Democracy’) where he states: ‘No matter what its form, capitalist democracy commodifies its world and first of all its human inhabitants. They live as vessels of labour power and as empty receptacles of the goods and services and delusions of consumer culture’; and finally Smulewicz-Zucker quoting Kautsky’s description of socialism as ‘the abolition of every kind of exploitation and oppression, be it directed against a class, a party, a sex, or a race’.
Howard Moss

Material World: The ‘Polar Silk Road’ (2021)

The Material World Column from the April 2021 issue of the Socialist Standard 

Greenland is a self-governing territory of Denmark, and has a Gross Domestic Product of around $3 billion – similar to the Faroe Islands, another semi-autonomous Danish possession. That GDP is about to change if the multinational mining corporations have their way.

Various mining companies are vying for mining rights. Greenland’s royalties expect to be around 1.5 billion Danish crowns ($245 million) each year from a Chinese-linked corporation – equivalent to roughly 15 percent of Greenland’s public spending, and such revenues could give it leverage over politics in Greenland. Already disputes on policies towards mining have caused ructions within Greenland’s government.

Greenland possesses vast resources of metals known as ‘rare earths,’ the world’s biggest undeveloped deposits, according to the US Geological Survey (USGS). They are crucial in modern technology manufacturing and the renewable energy industry. The prices of many rare earth elements have jumped in anticipation of rising demand for electric vehicles. China accounts for about 90 percent of global supply and back in 2010 China threatened to cut off its sale of rare earth metals to Japan so there exist concerns about the need to reduce reliance upon China. Other states require a counterbalance to any market control that could be exerted by a single large producer and Greenland’s huge deposits could secure a solution for many years to come. Always with an eye for valuable real estate, Trump in 2019 offered to buy the island (in 1946 Harry S. Truman offered Denmark $100 million for it.) A year after Trump’s failed bid, the United States announced a $12.1 million economic aid package for Greenland to increase its influence.

Apart from its potential assets another reason for American renewed interest is that China is expanding its interests in Greenland. China views Greenland as a part of what they call the ‘Polar Silk Road’ and one of the interested mining companies happens to be partly-Chinese owned. China may be a thousand miles away but as the second largest economy in the world, it has no intention of being left out in the cold. Klaus Dodds, professor of geopolitics at Royal Holloway, University of London, explained ‘The Chinese have made no secret that they have their eyes on the Arctic’s fish and minerals.’

In 2016, Denmark reversed plans to sell a former naval command centre after a Hong Kong-based company, General Nice Group, emerged as a bidder. Later in 2018, the then US Defense Secretary James Mattis successfully pressured Denmark not to allow China to finance three commercial airports on Greenland, over fears they could give Beijing a military foothold.

‘China can access Arctic resources through foreign investment,’ Michael Byers, an Arctic expert at the University of British Columbia said. ‘And foreign investment is a lot cheaper than trying to conquer something.’

Whereas environmentalists fear large-scale mining could harm the remote island’s pristine eco-system, many of the 56,000 Greenlanders, while worried about pollution, see mining as the key to developing their economy which will end the economic dependence upon Denmark and set Greenland on the road to full sovereignty. Long before the UK’s Brexit, Greenland held a referendum and subsequently withdrew from the EU in 1985.

‘An independent Greenland could, for example, offer basing rights to either Russia or China or both,’ said Fen Hampson, head of the international security programme at the Canadian Centre for International Governance Innovation think tank, noting the desire by some to fully secede from Denmark. ‘I am not saying this would happen, but it is a scenario that would have major geo-strategic implications, especially if the Northwest Passage becomes a transit route for shipping, which is what is happening in the Russian Arctic.’

The melting ice means long-distance sea passages, such as the Northern Sea Route (NSR) from eastern Siberia to the North Atlantic, are increasingly navigable. Sailing a container ship from China to northern Europe via the NSR can substantially shorten the journey time via the Indian Ocean and Suez canal.

All this competition over territory, trade routes, resources and mining rights are disputes about the division of spoils between our masters. It is they and not us who exercise power. Our Greenland fellow-workers will eventually come to comprehend that their ‘independence’ will be in name only and should not be fooled by extravagant promises and lucrative pledges.

Election Communications (2021)

Party News from the April 2021 issue of the Socialist Standard
  In the elections on 6 May the Socialist Party is contesting the Cardiff Central seat in the Welsh Assembly and two wards in Folkestone in the Kent County Council elections. Some 43,000 election manifestos will be distributed in Cardiff by Royal Mail while in Kent about 26,500 electors will be offered the choice of voting Socialist.

Welsh Parliament Cardiff Central 6 May 2021

‘Great Resets’

The pandemic has led to much thrilling talk about Great Resets and rethinking the future. Wales’s 6th election since devolution is taking place on 6 May. Do you think that’s going to cause a Great Reset or even much change at all?

You know very well it won’t.

And why not?

Because most of the candidates don’t want change. Instead they will be wittering on about how they propose to fix the faulty system we live under – capitalism – so it’s maybe a tiny bit better for you and yours. But every politician says this. In every party. In every election. And they never really fix anything.

The reason they can’t fix capitalism’s problems is because capitalism IS the problem.

If you want to vote for these hopeless ‘fixers’ on 6 May, go right ahead. If you expect change, don’t hold your breath.

But one of the candidates isn’t saying any of this. Brian Johnson of the Socialist Party of Great Britain says you can’t fix capitalism, because it only works for the tiny minority who possess most of the wealth. And if you can’t fix it, you certainly shouldn’t vote for it.

Especially as there’s an alternative.

Capitalism has revolutionised our science and technology so that we can now produce a global sufficiency of the basics of life. That means we could abolish buying and selling, take the world back from the rich, and run it collectively as a communally owned resource.

It’s not ‘human nature’ that’s causing poverty, inequality, wars and global warming. It’s the fact that we have a 21st-century planet being trashed by an obsolete 19th-century economic system that gives all the power to the tiny minority.

Universal free access would be simpler, cheaper, faster, smarter, a genuine Great Reset.

Vote for Brian Johnson if you like the idea of real change.

Alternatively, there’s always your trusty ‘fixers’.

Further information and offers of help: Phone: 02920-615826.

Folkestone Council Elections 6 May 2021

We can do better than this!

The residents of Folkestone know all too well the powerlessness of life under capitalism. The system that demands that nothing is made, built or planted unless someone, somewhere can profit from it.

The construction of monstrous blocks of ‘high end’ apartments along Marine Parade – with the harbour next – have nothing to do with solving Folkestone’s housing crisis, and everything to do with raking in huge profits for developers. Developers are not paid to care about the homeless, those living in sub-standard accommodation or the young struggling to afford rocketing private rents at a time of rising unemployment and economic crisis.

But it’s easy to blame developers. They are as much at the mercy of the profit system as the rest of us – although their wealth cushions them from its worst effects. Doubtless they would much rather build beautiful homes that fit the scale of Folkestone and meet the needs of local people. But that’s not why houses are built under capitalism.

Now imagine a society where all of us, not just in Folkestone but across the world, actually own the resources of the world. Where we decide together what we build based on people’s needs, not just the demands of the profit system. Then what could Marine Parade, the harbour and Princes Parade look like?

In this election only the Socialist Party stands for the total abolition of the profit system and its replacement by a global society based on the common ownership and democratic control of all the resources of our amazing planet.

It’s time to consign capitalism to the dustbin of history.

Further information and offers of help: Email: Mobile: 07971 71556

Giants Unslain (2021)

From the April 2021 issue of the Socialist Standard

In 1942 Sir William Beveridge published a report under the unexciting title Social Insurance and Allied Services. It has become famous as the founding document of the post-war welfare state, and has supposedly led to major improvements in the lives of most British citizens. In fact, it achieved very much less than this, as the report itself just referred to ‘a redistribution of income within the wage-earning classes’, and stated that its proposals for social insurance should merely ‘aim at guaranteeing the minimum income needed for subsistence’. The following year the Socialist Party published a pamphlet Beveridge Re-Organises Poverty, which concluded that the proposals would ‘level the workers’ position as a whole’ and so would indeed be ‘a redistribution of poverty’.

Beveridge identified ‘five giant evils’, which were capitalised as Want (i.e. poverty), Disease, Ignorance, Squalor and Idleness. How has the battle against these fared in the nearly eighty years since the report was produced? On its 75th anniversary, Stephen Armstrong wrote in The Guardian (10 October 2017) that, after the period of relative prosperity that lasted till the late 1970s, the giants were now ‘creeping back into the mainstream of our daily life’. Not very much has changed in the short period since then. Let’s look at each giant in turn, combining general points and statistics with specific examples.

At the end of last year it was reported that more than a million of the UK’s poorest people are regularly struggling to pay for food. Independent food banks reported a doubling of the number of emergency food parcels handed out in 2020 compared to the year before. The Trussell Trust stated that ‘half of all households visiting food banks struggled to afford essential goods such as food and clothes because they were repaying Universal Credit debts’ (Guardian 1 December). This is a welfare system which is supposed to keep people above the level of going without, ensuring that they do not have to choose between eating and heating. But it clearly fails to provide even ‘the minimum income needed for subsistence’, in Beveridge’s words.

Covid has increased the numbers in poverty, but it is not the underlying cause. According to one analysis, an extra 700,000 people had been thrust into poverty by the pandemic. In all, over 15 million people (nearly a quarter of the population) were living in poverty, and for the great majority of those the disruption caused by Covid was not responsible.

Turning to disease, the Joseph Rowntree Foundation has stated that, among the poorest and second poorest fifth of the population, more than one in four children between ten and fifteen experienced moderate or severe mental health difficulties. The poorest fifth have at birth a healthy life expectancy around fifteen years less than the least deprived fifth. More generally, life expectancy is increasing in Western Europe, but in the UK the rise slowed dramatically between 2011 and 2015; austerity and reduced spending on health services are at least partly to blame for this, according to a 2017 article in the British Medical Journal. The same article noted that there were major disparities between health care in the north and south of England, with economic disadvantages being responsible for the north being left behind.

A 2019 report from the World Health Organization noted that five-year cancer survival rates are worse in the United Kingdom compared to other high-income countries in the EU. Over a million people experienced ‘catastrophic spending on health services’, primarily on over-the-counter medicines.

Last year the Royal College of Paediatrics and Child Health published a report State of Child Health 2020. This noted that there had been improvements in some areas, such as better health checks for those with diabetes, and improved oral health, but in other areas there were problems. The rate of infant mortality increased slightly in England in 2017, while over a third of children aged 10 or 11 in England were obese or overweight. And again it was the poorest areas that had the most problems. Further, it was recently reported that black women in the UK are four times more likely than white women to die in pregnancy or childbirth, with those in deprived areas more likely to die.

Ignorance was described by Beveridge as something that ‘no democracy can afford among its citizens’; after all, capitalism needs a reasonably educated workforce. In the 1930s the vast majority of children left school at age fourteen with no formal qualifications, and the proportion of the population attending university was well below that in other countries, such as Germany and the US.

Things have changed since then, of course, but many problems remain. The National Literacy Trust states that one adult in six is functionally illiterate, with ‘very poor literacy skills’, and so has difficulty reading on unfamiliar topics. In England in 2019, one in thirteen of those aged 16–64 had no qualifications. Many students from poorer backgrounds struggle with parts of the education system, especially the transition to university.

By squalor was meant primarily housing conditions. Shelter reported in 2019 that 280,000 people were recorded as being homeless in England, i.e. one in every two hundred people (and one in 52 in London). And 220,000 had been threatened with homelessness that year. It is generally accepted that these figures are an underestimate, as so much homelessness is undocumented. People are forced to sofa-surf or live in dire hostels or B&Bs. Living on the street has an appalling effect on a person’s mental and physical health, reducing their life expectancy by many years.

It is not just being without a home that causes problems. A recent article in The Guardian (12 January) dealt with a block of flats in Islington where residents went without water for four and a half days after the mains pipe exploded and the PFI consortium that managed it simply failed to carry out the necessary repairs. More widely, an estimated 8.4 million people in England are living in a home that is unaffordable, insecure or unsuitable, according to the National Housing Federation.

But squalor (or unsafe living conditions) need not just be a matter of housing, and the growth of large cities is another factor. It was recently ruled by a coroner that the death of a nine-year-old girl in London in 2013 was partly caused by air pollution, specifically nitrogen dioxide and particulate matter pollution in excess of WHO guidelines, mainly the result of traffic emissions.

Idleness, Beveridge said, ‘destroys wealth and corrupts men’. The depression that began in 1929 had led to mass unemployment, with one-fifth of the workforce being unemployed in 1930. Reducing this was widely seen as essential for the health of the economy.

Unemployment figures go up and down over time. In the three months to October 2020, the UK unemployment rate was 4.9 percent, 1.2 percentage points higher than a year earlier. The rise is partly due to coronavirus, of course, and there were a quarter of a million fewer vacancies than a year before. The annual decrease in employment was the largest annual reduction since 2010. In all, 8.6 million people were economically inactive, and a record number had been made redundant. Moreover, many jobs nowadays are zero-hours. So idleness has certainly not been overcome.

The point here is not to over-emphasise the dire conditions so many face now, or to understate the appalling situation in the 1930s. Rather, it is to show how little has been achieved in nearly eight decades despite the best efforts of reformers, and to point out how many problems remain. The giants of the 30s and 40s still haunt present-day society, and it will take a revolutionary change to do away with them completely.
Paul Bennett

Cooking the Books: Tories increase tax on profits (2021)

The Cooking the Books column from the April 2020 issue of the Socialist Standard

One of the surprising measures announced by Rishi Sunak in his budget on 3 March was the increase of corporation tax from its current level of 19 percent to 25 percent in 2023. Corporation tax is a direct tax on profits, so not something to be expected from the traditional party of Big Business.

Rumours that this might be on the cards completely wrong-footed the Labour Party. Keir Starmer had asked Johnston at PMQs on 24 February whether he would not ‘agree with me today that now is not the time for tax increases for families and businesses’. This led to an article in The Times the following day headed ‘Tory rebels and Labour ready to block corporation tax increase’. To be fair, this brought protests from some Labour MPs who remembered that in its manifesto for the 2019 general election the Labour Party had proposed to increase corporation tax to 26 percent.

Starmer backed down but the fact that he was prepared to present Labour as a defender of Big Business and its profits showed the extent to which the Labour Party is committed to maintaining capitalism more or less as it is (as well as assuring the capitalist class that their interests will be in a safe pair of hands if he becomes Prime Minister). Given this, Starmer’s position was not without logic: if you support capitalism, driven as it is by the pursuit of profits, and wish to take on the responsibility of administering it, you have to accept that profits have to be allowed.

Sunak’s defence to business for raising the tax on their profits from 2023 was that in the intervening two years they could get a generous tax break on new investment in equipment and machinery. According to another cabinet minister, Oliver Dowden, businesses ‘are sitting on very large amounts of cash’ (Times, 11 March); in other words, on profits that have not been re-invested. The aim of the so-called ‘super-deduction’ is to get business to invest these, a recognition that what in the end drives growth is business investment rather than consumer spending. With the lifting of the anti-covid restrictions, consumer spending will grow next year but, as Philip Aldrick, the economics editor of The Times, pointed out very pertinently:
  ‘The rescue should ensure that the consumer, who accounts for two thirds of national output, is able to start up the economic engine. The more difficult bit is keeping it going. That requires business investment. There, the chancellor unveiled a big new policy – a temporary two-year capital ‘super-deduction’. For every pound spent on machinery or equipment, a company will be able to get 25p back in lower corporation taxes. Unlike any previous recession, businesses, in aggregate, have built up a £100 billion cash buffer. The government wants them to spend it’ (Times, 4 March).
No doubt they will spend some of it, but this ‘big new policy’ is yet another measure to try to get a horse to drink. Just as horses won’t drink unless they are thirsty so businesses won’t invest unless there’s a prospect of profit. The super-deduction might not work, any more than low interest rates or quantitative easing have. Business will invest but will it be more than they would have done anyway? That depends on the prospect of profit which no government can control.