‘Money is Irrelevant' (1996)

From the June 1996 issue of the Socialist Standard

That’s the verdict of Sir James Goldsmith, the financier turned politician. A new convert to the Socialist Party, perhaps? Unfortunately, no. When Sir James says that money is irrelevant, he means he has so much of the stuff that he couldn’t spend it all if he tried, he is worth £1,200 million. However, this hasn’t stopped him from making the effort, and he recently pledged £20 million to the campaign for a referendum on the European Union and its single currency, thereby donating irrelevant money to an irrelevant cause.

Sir James’s offensive comment was quoted in the Sunday Times's eighth annual tribute to Britain’s super rich, published in April. This year’s wallow in the cream of the capitalist class appraised the fortunes of five hundred fat cats, worth collectively a staggering £70 billion. This figure is a massive 28 percent higher than that of last year, the highest total since the survey began in 1989:

“Britain’s rich became more than £15.5 billion richer in 1995 in what proved to be a vintage year for personal wealth creation. "

Recalling your miserly two or three percent pay rise (assuming you got a rise at all), you may be forgiven for wondering how you managed to miss out on this bonanza. For most of us, of course, it was more likely to have been a “vintage year” for debt, job insecurity, negative equity and the inexorable struggle to make ends meet. You may be wondering just how the fortunate few came by their even greater wealth. Was it hard work? Thrift? Fiddling their expenses? On the contrary; they didn’t actually do anything:

“A rare combination of record stock market performance, a sharp increase in land prices, a steady rise in art values and a thriving market in the sale of companies has created a sudden improvement in the lot of the rich. ”

If only you’d sensed that thriving market in the sale of companies, you could have got yourself down to the local car boot sale and unloaded a few of those old companies you’ve had cluttering up the garage for years.

Richer and richer

Yes, it’s a funny old world isn’t it?

There you are, packing in the overtime to cam a few extra quid, while Hans Rausing has seen his wealth rise by a stratospheric £880 million—and that’s following his retirement! In fact the average increase in assets amongst this tiny group was £30 million. There were so many millionaires with bigger fortunes queuing to get onto the Sunday Times list that the threshold for entry had to be raised from £25 million in 1995 to £35 million this year. And if these estimates seem astounding, bear in mind that they do not include cash in private accounts!

So what are your chances of joining this well-heeled band? Even less than your chances of winning the lottery:

". ..  no lottery winner has yet made it to the 500 despite . . . rollover jackpots. Until a . . . winner emerges to claim £40m, the most that a winner can hope for is to scrape into the top 1,000 where the bottom line in our database is £10m. Not a bad sum but not serious money."

No, not serious money. If you want to play with the big boys (and they are mostly boys—only 8 percent are women), you won’t be taken seriously without at least thirty five million to your name.

The big boys are people like David Sainsbury, of the supermarket giant, who is worth £1.26 billion. His “salary” rose from £311,000 to £389,000 last year, a cool 25 percent increase. Not that impressive, some might say, for the boss of Britain’s leading grocer. However, this didn’t include his whopping £37.5 million share of the company’s dividends. Interestingly, Sainsbury is quoted as saying: “If I vote at the next general election, it will be for Tony Blair.” Confirmation, if any were needed, of whose interests “New” Labour represents.

Other top dogs include Viscount Rothermere the newspaper publisher, whose family’s wealth tops £1 billion, and there are “unconfirmed reports that his personal wealth in cash alone matches that sum”. Then there is the Duke of Westminster, worth £1,650 million, who “tries to stay in touch with the harsher side of life”. Apparently, he recently took his two children to a drug rehabilitation project “to show them what it was like”. It’s a bit like us going to visit a stately home to see how the other half lives, but instead of pleasure by proxy, the Duke likes a little pain by proxy, just in ease he’s deprived of the pleasure of knowing just how stinking rich and privileged he is.

Different world

Not all aristocrats have fared as well as the Duke, however. The aristocracy of course is no longer in the position of ascendancy that it once was, and incomes for many have reduced dramatically in recent times. If you’ve fallen on hard times lately, you may be eager to hear how these pillars of the community have coped; they do, after all, have much more substantial commitments. Well, the answer can be very simple:

“Though landowning aristocrats no longer dominate the 500 list, they will not disappear completely for several generations. As Simon Howard has shown with his stewardship of Castle Howard in North Yorkshire, it simply takes the auction of one £5 million painting to provide enough liquidity for some years . . ."

So there you have it. You know' those ugly old Van Goghs and Picassos which are making your drawing room look untidy? Get them along to the boot sale with your old companies and you’re quids in.

One of the interesting things about the Sunday Times’s survey is its raison d'etre. It’s difficult to ascertain whether it’s aimed at envious poorer readers, who may drool over the enormous fortunes enjoyed by others, or if it’s aimed at the people who actually feature in it, so that they might also envy those with bigger wads, while at the same time feeling superior to those with less. For many it’s a double-edged sword: if they’re not included they complain, yet when they are included they still complain that they’re either under- or overvalued, depending presumably on whether they are tax exiles or not.

Clearly, the people in this survey inhabit a different world, a world that the rest of us can barely imagine. Many inherited their wealth, while the majority are “self-made” men. Defenders of capitalism try to persuade us that entrepreneurs have acquired their money through some sort of super-human effort, and that they deserve more than the rest of us. But there are only twenty-four hours in a day; only so much work that any one person can do; and whose contribution is more valuable? The entrepreneur who chooses to work ten or twelve hours a day, or the farmer, or miner, of fitter, or firefighter? No matter how hard a worker toils, they will never be rich—but somebody else will. Yes, the fortunes of the wealthy are indeed the results of hard work: yours and mine.

The Sunday Times has at least cleared up a little problem for the government: the whereabouts of the mythical “feel-good factor”, for which the Tories have been patiently waiting to persuade a jaded electorate to vote for them. The feel-good factor is alive and well and living with Britain’s rich, while the feel-conned factor, as ever, stubbornly resides with the working class.

Nick Brunskill

Facing the facts (1996)

From the June 1996 issue of the Socialist Standard

• Inequality - The rich are getting richer. The top 1% of adults — 440,000 people — own more than twice as much as the bottom 50%. We produce, they take
• Insecurity - Only 4 in 10 workers have jobs that are relatively secure. By the year 2000, full-time employment will be a minority form of work. No profit, no work.
• Poverty - In Britain 36% of children live below the poverty line and about 10 million people are dependent on Income Support. There is worse to come. Social Security spending is to be reduced by £5 billion by the year 2000.
• Stress - Office staff in Britain are working longer hours. About 500,000 workers suffer physically as a result of their working environment; stress is identified as a problem in 9 out of 10 workplaces.
• Pressure - 1 in 4 of the population will suffer some type of mental health problem in a year. Poverty and loneliness are increasingly important causes.
• Homelessness - In 1995 about 360,000 people were classified as homeless and repossessions increased to 49,410. 389,780 home owners were in mortgage arrears and 75,258 possession orders were made against home owners. Meanwhile at least 300,000 building workers are currently unemployed.
• Poverty - More than 1 billion people in developing countries live in absolute poverty, and about 13 million children die each year from easily preventable illnesses.
• Hunger - 550 million people suffer hunger and every 3 seconds a child dies of hunger even though the world produces enough grain to provide everyone with a minimum diet Meanwhile crops which can’t be sold at a profit are destroyed and farmers are paid not to grow food.
• War - 25 wars rage over the globe, world capitalism spends $1,000,000,000,000, on armed forces each year with 500,000 scientists in military research. A huge waste of human and natural resources.
• Environment - Globally, forests are being destroyed at the rate of 11 million hectares per year while 6 million hectares of land are lost to deserts and a further 21 million are ruined so badly that they can no longer grow food. 

The Coming Election (1996)

From the June 1996 issue of the Socialist Standard

When the election comes you will be promised the earth. The Tory Party will claim that the "feel good factor” is just around the comer. They are hoping that you forget the last 17 years of broken promises and shattered dreams. The Labour Party are out-Torying the Tories in a bid for your support. Don’t be deceived. They favour the same market system as the Tories, Liberal Democrats, Nationalists and all the other candidates will promise a variety of reforms. Despite their differences they all have this in common—they want to run the buying and selling system. Only the Socialist Party candidates will be standing for a complete transformation of society from capitalism to World Socialism.

Behind all the fine words of the politicians about democracy and freedom is the reality of a system based on production for profit. The rule of capitalism is no profit— no production. That is why we have thousands homeless, and thousands living in substandard housing while building workers are unemployed. That is why we have people living on inadequate diets while farmers are paid not to produce food. That is why we have well over 2 million workers unemployed in this country—banned from producing the goods we all need to live. That is why world-wide the day-to-day experience of millions is one of unemployment, hunger, war, pollution and crime. That is why we must get rid of capitalism and bring about World Socialism.

John Major said he was going to create the classless society and Tony Blair promises a stake-holder society. This is nonsense. The reality is that the overwhelming majority of the population own little or nothing but their ability to work. In order to live we must work. We are the working class. Whether we work as railwaymen or doctors, labourers or university professors, we must work for wages or salaries. A small minority own enough of capital to be able to live without working. They live off the unpaid labour of the majority. This is the capitalist class. This class difference is based on ownership or non-ownership of the factories, the workshops, and all the commercial and transport undertakings. Between these classes, there is a conflict that shows itself in strikes, lock-outs, speed-ups and productivity drives. While the buying and selling system lasts this class division will always form its basis.

The major illusion in politics today is that by voting for one of the reformist parties the present system can be made to run in the interests of the majority. This is a fallacy. In this country over the last 100 years we have had Liberal, Conservative, Labour and Coalition governments. None of them has altered the class basis of society. In other countries they have had Republican, Democrat, Communist and Nationalist governments. Again the profit system has remained intact. Any reforms that have been brought about, such as the National Health Service, have left a two-tier provision—and recent experience has shown even these reforms can be taken away. Capitalism can only work in the interest of the owning class. For the working class a century of reform has proved virtually useless in dealing with social problems.

Socialism would be a world-wide system. It will mean that the earth— everything in it and on it—will be owned in common by the whole population. It is a new system of society where everyone capable of it would work according to their ability and take according to their needs. It is a society based on co-operation, where wealth would be produced solely to satisfy human needs without recourse to the market system with its profits, prices and wages. Inside a socialist system the problems of world hunger, war, poverty and environmental damage would be capable of solution because their cause—world capitalism—would have been abolished. Socialism will be a real democracy, where men and women can decide what will be produced and how society would be organised without the necessity of shareholders, directors or politicians.

No one can give you socialism. We in the Socialist Party do not claim that we can give you it It can only be brought about by a majority understanding it and organising for it. Only you, the working class, can make socialism possible. The choice is yours—another 4 or 5 years of the same or the start to building a better new society?

Richard Donnelly

Greasy Pole: Something in common (1996)

The Greasy Pole column from the June 1996 issue of the Socialist Standard

Here is a question. Can anyone think of anything in common between Asil Nadir and about half the voting population of Britain? For those of you who have forgotten. Nadir— a particularly apposite name considering what happened to him—was once a man who convinced a lot of people that capitalism does not have to work in the way in which it naturally, inexorably does work. He was what is known as a tycoon, who devoted a lot of this time to developing a business conglomerate called Polly Peck. This was such a profitable company that it was often mentioned as evidence that there is really no need for the economic cycle of boom and slump. There is no need for any business ever to be anything but profitable, no need for it ever to make a loss or go out of existence. All that is necessary to have at the head someone like Asil Nadir, who will ensure that the enterprise will be endlessly profitable. The City loved it. They loved Asil Nadir. They rushed to invest in his business empire.

For his part Asil Nadir loved the City and he must have pleased many of his admirers there, when he gave £400,000 to the Conservative Party, presumably in the hope that the money would help the Tories to foster this mutually attractive and remunerative relationship. However this cosy set-up began to look less comfortable when Asil Nadir’s methods came under the detailed scrutiny of the Serious Fraud Office. Not to put too fine a point on it, the glamorous tycoon was suspected of running a highly unstable operation, which was not improved by his alleged tendency to help himself from the till. The investors in Polly Peck were rudely awakened from their dream of an eternally prosperous capitalism by the reality of losing hundreds of millions of pounds in the company’s collapse.

Jumping bail

Facing trial on 13 charges of fraud and false accounting, Asil Nadir decided that he could no longer rely on a little help from his friends, whether in the City or the Tory Party. Discretion, he decided, was the better part of valour and he jumped bail, fleeing to Northern Cyprus to make sympathetic noises at the news that his former aide in Polly Peck, Elizabeth Forsyth, had collected a five-year prison sentence for helping to launder some of the money Nadir was said to have stolen.

Let us leave, for the moment, the disgraced and hunted tycoon in his Mediterranean hideaway and consider the other part of our question—the half of the voting population in Britain. We refer to the millions of people who support the Labour Party whose vote at elections, give or take a bit, usually amounts to about half of those cast. Now these people are not business tycoons, they are not popular in the City and they don't have readily available hideaways in the sun. If they appear in court it is not for helping themselves to large sums of somebody else's money but normally for shoplifting or burglary or stealing a mobile phone from a parked car.

These people can’t give hundreds of thousands of pounds away because after they’ve paid the rent or the mortgage and the cost of gas and water and electricity and they've bought some clothes and food there is very little left. They pass their lives in poverty, on the knife-edge of destitution so that if something disastrous happens, like losing their job or getting chronically sick, they slip down into a kind of sub-existence where malnutrition and fear are such everyday features of their lives that they become almost inured to them.

Coping with poverty

But this is achieved at considerable cost. The Observer, in a recent article about food and poverty, quoted parents who are struggling to survive, and to protect their children, on Income Support: ”. . . I don’t eat . . . I've walked about with holes in my shoes, no winter coat and haven’t eaten for three days to look after them . . . I won’t let my kids go without." A recent government survey found that among the unemployed 20 percent of men and 38 percent of women had suffered a neurotic disorder. And for those who are in work stress is still a potent factor, not least because of their fear of losing their job.

So let us return, now that we know who we’re talking about, to our original question about what is common to Asil Nadir and the Labour voters of Britain. Well Nadir has recently informed the world that while he does not regret giving all that money to the Tories ("I never regret anything that I have done in my life") he is no longer among their supporters. "No government is in power for ever," he says. "Thank God there is a certain amount of democratic election and we know the elections are approaching. I hope the British public will give their view of what they think of the British Government.” In fact, if the Labour Party win the next election. Nadir says, he will return to Britain (although it is not clear whether this is intended to attract support for Labour or drive it away).

The point about this is that both Asil Nadir the opulent wheeler-and-dealer and the stressed and exploited Labour voters are agreed that a different government here will bring some significant changes to capitalism in Britain.

Labour wheezes

Now this is very unkind to Tony Blair and all his spin doctors and hangers-on who are labouring night and day to convince us that a Labour government will be so similar to the Conservatives that we may hardly notice there has been an election. Gordon Brown will sit in the Treasury searching for new ways to disappoint his supporter's expectations by slashing government spending. His latest wheeze—to abolish Child Benefit for those aged between 16 and 19—has provoked even Peter Lilley to a kind of protest, describing Brown’s proposal as “. . . deeply unpopular in the country . . . a pernicious tax on learning". Jack Straw will occupy the Home Office and try to outdo Michael Howard’s reputation for bashing criminals, perhaps creating a new offence of washing someone's windscreen at traffic lights when they haven’t asked you to. Tony Blair will be in Number Ten thinking up new phrases like stakeholding society to convince us that it isn’t happening and if we are sure that it is then it’s not what we think it is.

So that’s what they have in common— misconceptions about what Labour will rule capitalism means. Of course there are differences between Asil Nadir and Labour voters. He has reason to think he may benefit from a Labour government. They may also think like that but have no reason to.

Ivan

World View: Is Marxism Eurocentric? (1996)

From the June 1996 issue of the Socialist Standard

Racism remains one of the main features of Western capitalist society. It is institutionalised in the systematic discrimination which black people experience in jobs, housing and the education system, and the harassment they suffer at the hands of police and immigration authorities.

A striking development in European politics since the East European events of 1989 has been the resurgence of racism, expressing itself in the rise of the fascist and racist parties which have been able to make significant electoral gains, especially in France, Italy and Germany. This development has not surprised us.

Black Nationalists argue that “black liberation can be achieved only by black people organising themselves separately from white anti-racists and Socialists". Socialists, by contrast, regard racism as a product of capitalism which serves to reproduce this social system by dividing the working class. It can be abolished, therefore, only through a socialist revolution achieved by a united working class in which blacks and whites join together against their common enemy.

A major difference between socialists and black separatists is that black nationalist intellectuals tend to see Marxism as a Eurocentric political tradition, as a body of thought so deeply rooted in European culture that it is simply incapable of identifying with the plight—and expressing the aspirations of—the oppressed black masses, both in the Third World and in the advanced capitalist countries.

Black Separatists wrong

The resulting conflict between Marxism and Black Nationalism is systematically explored by Cedric Robinson, an American scholar associated with the Institute of Race Relations in London, in his book Black Marxism. Robinson’s basic thesis is that Marxism is, in the very way in which its concepts are ordered, a Eurocentric ideology.

Marxism, Robinson claims, isn’t only European in its origins, but in its “analytical presumptions, its historical perspectives, its points of view”. It consequently has failed to confront a recurring idea in western civilisation, namely racism, and in particular, the way in which racialism inevitably permeates the social structure emergent from capitalism. Socialists reject these arguments and are well aware of the links between racism—all over the world—and capitalism.

It is often claimed that racism is as old as human nature, the implication being that we can’t get rid of it. On the contrary, racism as we know it today first developed in the 17th and 18th centuries in order to justify the systematic use of African slave labour in the great plantations of the new world which were central to the original emergence of capitalism as a world system. Racism, that is, was formed as part of the process through which capitalism became the dominant social and economic system.

Thus racism today arises from the divisions that are fostered among different groups of workers whose competition on the job market is intensified by the fact they often come from different parts of the world and are drawn together within the borders of the same state by capitalism's insatiable appetite for cheaper labour power.

Racism serves to set workers against each other, and to prevent them from effectively fighting against the bosses who exploit them all, irrespective of their colour or national origin. It operates against the interest of all workers, white and black alike. A divided working class harms even those workers who are not the direct victims of racism. White workers should identify their interest with those of black people who suffer racial oppression and black separatists are wrong when they dismiss all the white working class as an irredeemable racist rabble. Racism has grown up with capitalism and helps to sustain it; its abolition therefore depends on socialist revolution and the abolition of capitalism and that will break up the material structures with which it is bound up.

Fighting Racism

Fighting racism depends on understanding its causes. This is essential if the hold of racism on white workers is to be broken. Racism appeals to white workers because it offers an imaginary solution to the real problems—poverty, unemployment, exploitation and so on.

Socialists are anti-racists not only because we despise racism for the obscenity that it is, but because a  class movement which does not confront racism will not be able to change capitalism to socialism. Breaking down the social barriers which this process helps erect between different groups of workers is a necessary condition of any successful socialist revolution.

The charge that Marxism is “Eurocentric" made by Black Nationalists such as Cedric Robinson is mistaken. Marxism indeed emerged in Western Europe in response to the appearance of industrial capitalism, the capitalist mode of production in its developed form. At the centre of Marx's theory was his analysis of this unprecedented phenomenon. In the Communist Manifesto and the Grundrisse in particular he stressed capitalism's universalising role, the way in which it dragged humankind willy-nilly into the first genuinely global social system in history. But he also recognised how private property society engenders competition and exploitation at the same time. Marx was equally clear-sighted about the terrible suffering this entailed, especially for the peoples of what is called now the Third World—"the extirpation, enslavement and entombment in mines of the indigenous population of [America] . . . the beginning of the conquest and plunder of India, and the conversion of Africa into a preserve for the commercial hunting of black skins are all things which characterise the dawn of the era of capitalist production” (Capital, Vol. I).

Marx crucially maintained that only a society of common ownership could provide the framework for the eradication of racial prejudice in its entirety. Capitalism and racism go hand-in-hand—only socialism can abolish both.

Michael Ghebre

World View: Voluntary Simplicity (1996)

From the June 1996 issue of the Socialist Standard

A large number of Americans are turning away from commuting back and forth from "stressful” and “unfulfilling" jobs and rejecting the world of consumerism in favour of environmentally friendly lifestyles. They are adopting a new set of values: "The Three S's"—sustainability, spirituality and satisfaction, while searching for “meaning" and "aesthetic expression." This is the picture presented by Duane Elgin of the "voluntary simplicity" movement in the US at a recent debate of the Oxford Centre for Ethics and the Environment. The question for debate was “Does voluntary simplicity provide a realistic path toward ecological sustainability?" Elgin’s answer to this question was “yes".

Like many in the environmental movement, Elgin talks about changing society solely in terms of the consumer’s values changing. Dr Juliet Schor, author of The Overworked American who debated Elgin argued for changing the economic structure of society. Schor who has helped set up the New Party in America, advocates a collective "downshifting” by western industrial nations. "Downshifting" is defined as making a "lifestyle decision" which reduces the amount of paid employment you do and/or reduces the money you earn in the hope of "regaining control" over your life. In a survey, 28 percent of Americans of working age said that, in the last five years, they had decided to “downshift" in this sense. Indeed. This trend among workers has been reported to have worried the stock markets, being a far broader phenomenon than that of mothers giving up work to look after children. The trend, says Schor, can be seen among both sexes, whether or not people have children and across all age groups up to those in their 50s and all income spectra.

The stereotyped view of America as a country having swallowed materialist/consumerist values whole is thus misleading, even among relatively wealthy US workers (and Schor’s statistics do not tell us how many non-downshifters remain unhappy with their “lifestyles"). Ninety-five percent of all downshifters, she explains, say they are now happier than they were before.

New Party, Old System

The ideas of Schor’s New Party are reminiscent of those of the Green Party in Britain. Schor advocates that Britain should opt for slower, “sustainable" growth (about one percent per year) and, in exchange, spend more on health and education. This assumption that capitalist economies can simply pick and choose their growth rate is naive. The economies of Britain, France and Germany, for example, are currently trying to cut back on welfare expenditure at the same time as they try desperately to boost their growth rates up and out of this current uncertain period.

Another fundamental problem with the "voluntary simplicity"/downshifting response to society’s current problems (of which the ecological crisis is just one) is obviously that most of the world’s people do not have the choice of such a "lifestyle change” open to them. Duane Elgin tells u how he was able to move to a more "modest" house in order to fund his book Voluntary Simplicity. Clearly, not everyone has a house which they can sell, or a job from which they could "downshift". Most parts of the world do not even have a welfare state that they can "downshift" into. The only kind of simplicity available to the majority of the world’s population is of an entirely involuntary nature. It involves no choice about how fulfilling one’s work will be or whether the capitalist one works for will use their resources "ethically". (It is debatable whether the capitalists have much choice about this themselves if they are to get a good return from their investments.)

The debate was billed as a confrontation of the question of how we create an ecologically sustainable society. It seems that, in answer to this, the ever-growing environmental literature, research and discussion such as that of Elgin and Schor will talk about everything other than the world’s population gaining common ownership and control over the world's resources as a necessary first step. 

Dan Greenwood

Growing pains of capitalism (1996)

From the June 1996 issue of the Socialist Standard

How far the present Tory — or a future Labour — government is
 willing, or able, to spend money is a question which is at the heart
of every other issue — from education to the NHS. No government,
regardless of which economic guru it paid lip service to, has ever
 intervened to make the capitalist economy run smoothly. As even a
cursory look at its own history reveals, the idea that the Labour 
Party will succeed where every other party in the history of
 capitalism has failed is an insult to the intelligence of the working 
class on whose votes the fate of the Labour Party's
 bid for power depends.

Once upon a time governments believed that they could intervene in the economy to ensure its smooth operation without economic crises, slumps and unemployment. The seminal 1944 White Paper on Employment, issued under the National government of Churchill and Attlee, affirmed that governments should intervene to maintain adequate levels of employment and growth in the post-war period. It was inspired by the doctrines of John Maynard Keynes, the economist who claimed that capitalism could operate without the existence of slumps given correct government intervention and appropriate state expenditure. The Keynesian doctrine led the labour Party to famously state that “if bad trade and general unemployment threatens, this means that total purchasing power has fallen too low. Therefore we should at once increase expenditure, both on consumption and on development, i.e. on both consumer goods and capital goods. We should give people more money and not less, to spend” (Full Employment and Financial Policy). The view that full employment and economic growth were the overriding considerations of government was repeated in the Radcliffe Report of 1959 and publicly by ministers. Today, in the wake of the return of seemingly permanent mass unemployment and severe economic crises, no major political party in Britain (or elsewhere for that matter) still holds to what was termed the‘‘past-war consensus” on government spending, growth and employment.

It was Jim Callaghan, when Prime Minister in the late 1970s, who told the Labour Party conference that the option of governments spending their way out of an economic crisis ‘‘no longer existed” after years of Keynesian intervention failed to stop the reappearance of slump. This was a view enthusiastically endorsed by Mrs Thatcher and her successor, whose aim has been to reduce government expenditure as a way of assisting the economy, instead of selectively increasing it as a stimulus to trade. The current government aim is to reduce government spending to under 40 percent of GNP, a target which they do not look like achieving in the near future or anything like it. In actual fact, despite protestation to the contrary over the last twenty years or so, government spending has been rising as rapidly as ever.

That this is so is not because of any systematic attempt to boost spending to avert unemployment and economic disaster on Keynesian lines, but is precisely because these factors (unemployment, etc.) have been in operation due to the normal workings of the capitalist economy, and the governments of the world have all but given up trying to do anything about them. No government or major party pledges itself to a swift return to what used to be called "full employment" and none is likely to because they realise, implicitly if not explicitly, that the capitalist trade cycle is beyond their control. Furthermore, government expenditure has been rising fast without any conscious reformist action by governments to avert the problems. All governments now do is attempt to clean up the mess left by innumerable market failures and this alone costs them an increasing amount.

Spend, spend, spend

Economics correspondent David Smith has claimed that “public spending, once lifted, is virtually impossible to lower” (Sunday Times, 24 March) and this seems to be confirmed by recent history of the ongoing costs of the inefficient capitalist system and the failures of the market economy keep building up. During the last Labour government, for instance, real government spending rose by 9.4 percent, which was matched by a 9.4 percent rise during the first Thatcher parliament, excluding proceeds from privatisations which are a one-off bonus. Thatcher’s second term, aided by signs of economic recovery, saw the increase in expenditure slow to 7 percent. Between the 1987 General Election and 1992 the increase slowed further to 5.9 percent, but since then with the return of slump government spending has risen by a colossal 11.3 percent in real terms, the biggest rise since the onset of economic crisis under Ted Heath in the early 1970s. The 1992 Conservative Election Manifesto claimed “Our policy is . . . to reduce the share of national income taken by the public sector”, but this has not happened.

This increase in state expenditure in recent decades has caused a massive burden to be placed on the surplus value extracted by the capitalists from the workers, which ,as we have explained on many previous occasions, is in the last analysis the sole source of state finance, whether through taxation or borrowing. As everyone should by now know, the tax burden has continued to rise under the Conservative and government indebtedness is heavy, the Public Sector Borrowing Requirement being £32 billion at present even though the slump “officially” ended three years ago (this in turn is one of the factors behind the still historically high real rates of interest being charged in the financial system).

The only conceivable way this huge burden of government expenditure is going to be cut back, easing the pressure on surplus value, is for there to be an unusually strong period of economic growth. This what all the parties — especially Labour — are banking on after the next general election. But is it a realistic prospect?

Road to nowhere

It seems that even many of the capitalists and their representatives doubt this. A recent report from the Directorate-General of Economic and Social Affairs of the European Commission is a good example. It suggests that even on an optimistic basis, a growth rate of 3.3 percent annually across the European Union is needed if there is to be “a serious contribution” to reducing unemployment and reliance on state benefits, the biggest factor in state expenditure rises. But over the past five years the growth rate has been only 1.6 percent. The average annual growth rate since 1973 has actually been little more than 2 percent, rising in booms and falling in slumps, with a general downward trend since the previous period.

The plans of the European Union for “an optimal growth path” were last met at times during the period 1950-73 after which there was a break in growth and labour productivity, rises in real interest rates and soaring unemployment as the crisis began to bite. And yet the report accounts for this by suggesting that “in secular terms the 1950-60 period was an exceptionally favourable period of reconstruction and catching up in Europe and was thus not likely to last forever . . . " That the EU growth and employment plans were last met during, and in the aftermath of, an “exceptional period” characterised by post-war reconstruction really says all there needs to be said on the matter.

The European Union still intends, however, to implement measures at the bloc level to attract employment and stimulate growth. These include reforms in the hours of working (notoriously difficult to implement and likely to be successfully resisted for their own good reasons by the capitalist class), minor changes in tax laws relating to the labour supply, and what the Commission calls “the widening of wage-cost distribution”, encouraging workers to take lower-paid jobs, if necessary subsidising them do so. This latter proposal would, as the report admits, “have a high budget cost” and could not be guaranteed to solve the problem. Interestingly, the report also adds that any measures taken should also act “to safeguard the existing human capital of the unemployed in order to prevent social exclusion and to maintain social cohesion”.

Afraid of the consequences should they not, it is quite clear that the EU, its member states and capitalist political parties are incapable of restoring the levels of growth characterised by the post-war reconstruction. The situation in Britain is typical. Labour and the Conservatives are vacuous political entities now even by reformist standards. In the face of mass unemployment, burgeoning debt, rising taxation, expenditure and burdens on profit, they have nowhere to run. They have no solutions other than to pray that the miracle of economic growth may somehow descend from the heavens to save them. All the indications, even from their own economists, is that it is a pious hope indeed barring capitalism’s own particular solution, the barbarism of world war and “reconstruction”.

Dave Perrin

50 Years Ago: Lord Keynes: Economist of Capitalism in Decline (1996)

The 50 Years Ago column from the June 1996 issue of the Socialist Standard

In the sickness of its declining years capitalism is being nursed by the Labour Party. Lord Keynes, who died on April 21st, was the doctor who prescribed the treatment. His theories, on which rest the belief in the possibility of “full employment" under capitalism, have come to be widely accepted not because of intrinsic merit or originality, but because capitalists and Labour politicians alike have dire need of a panacea that will, they hope, make capitalism work or at least persuade the workers that it will. Faced with mounting unemployment and the political discontent that it causes, many Tory and Liberal politicians had lost confidence in their ability to save capitalism. Lord Keynes promised them another lease of life. The Labour Party new to power, never had much confidence in its own ability, and the "economic blizzard” of 1931 that wrecked the Labour Government destroyed even what it had; so Lord Keynes was their hope, too.

He believed that investment and price trends could be made subject to governmental control and thereby booms and slumps could be ironed out and approximately full employment secured . . . Socialists have no hesitation in saying that if the Labour Government attempts anything of the kind—it may, of course, get cold feet and scurry to the safety of “orthodox" financial policies, as did Snowden and MacDonald—it will not succeed in avoiding unemployment and crises.

(From the editorial in Socialist
 Standard, June 1946)

Not any answers (1996)

The A Word in Your Ear column from the June 1996 issue of the Socialist Standard

Knob-twiddling, the perennial pastime of the compulsive radio listener, has been greatly stimulated by the growth of deregulated airwaves, allowing for new stations of aural passion to be visited by the rover in search of a casual broadcasting relationship. Like trainspotters, the lowest of the lonely in the world of atomised leisure pursuits, the wireless addict delights in finding new programme timetables to collect and tune in to. While the rest of humanity lives its life (or pretends to), the radio junkie listens in to the one-way conversations of radio which serve as cultural life-support machines to the alienated, uncertain aural consumers who want reality sorted out for them on the hour every hour.

I grew up in a world which had just stopped listening to wireless, but in which some of us still listened to radio: the poor cousin of the telly. We laughed at The Clitheroe Kid, worried along with Mrs Dale, squirmed at the pompous smugness of Any Questions (still there; still smug) and went to sleep with the pips from The Shipping Forecast. As infancy' turned to adulthood the Home Service became Radio Four (arguably one of the greatest quality services still relatively undamaged in Britain), the Light Programme became Radio Two (the home of the terminally middle-aged) and the pirates, having been destroyed by the authoritarianism of the then Postmaster General, Tony Benn, gave way to the vacuous ramblings of Tory Tony Blackburn and Radio One.

Deregulation of the airwaves has been a gradual business (and business it is), starting in the early Seventies and culminating in the effective auction of the airwaves which has flogged off licences to whoever thinks they can make a fast buck out of grabbing listeners’ attention. Most people who still listen to radio are fairly fixed in their dial location (with occasional moves within one format, such from Radio One to Virgin or from Radio Three to Classic FM), but for some (the hard-core addicts) the urge has been to roam into hitherto unknown territories.

All of which is to explain how and why it was that a terrible thing happened to me on the way to the phone-in. There I was twiddling merrily in search of the latest from Harry of Hatfield or some other undiscovered philosopher (for, had he been alive today, Socrates would surely have been a regular caller to any phone-in going) and suddenly this lunatic is screaming at me in a fashion reminiscent of an out-of-work evangelist. Now, many a time I have sat transfixed and mortified before my TV set when travelling in the USA, where Coming To Jesus is a big industry. Listening to this previously undiscovered radio station was no different, just more amateurish and more embarrassing for being on the same dial as Radio Four.

Premier Radio is London’s Christian station and, at least at the time of writing, its awfulness has become compulsive. Its presenters, who mainly recite passages from the bible and play songs about clapping your hands for god, do their best to appeal both to the blue-rinsed ladies of Surrey who believe that wireless went downhill the day they allowed an unmarried mother on the The Archers and the fully-certifiable God Squad whose permanent stupor of gullible belief is know by them as being saved. So, the station balances precariously between phone-ins peppered with dull hymns on which old ladies call into to pray that Jesus will come to shoplifters and bad sorts and occasional touches of raving barminess.

An example of the latter was a twenty-minute talk by a born-again vicar whose justification for the laying on of hands so that “Jesus will come all over the sick and cure them” was in no need of Freud to decipher it.

Quite why Premier Radio should exist when socialists are not even allowed to buy advertising space on the airwaves is one question; another is why anyone can still be satisfied by this unadulterated crap. And then yesterday evening, in self-torturing pursuit of the clues, a mock-sincere voice came on and explained how this station was different, for it was there to appeal to those with nobody in the world to care about them: the lonely, the poor, the distressed and lost. God, they were informed, cares about them—as he will carefully explain once they snuff it. And then, instead of turning to Luke or John, as the presenter urged us to, I took another look at that brilliantly descriptive passage by Marx: “the heart of a heartless world . . . the sigh of the oppressed”. Be it from pulpit or high-tech studio, where there is religion there is misery and where religion meets misery its job is to tell the miserable to wait for hope in the next life. The experiment is over; I have heard the voice of salvation and twiddled the knob on my radio until it went away. Of pseudo-saviours the world has had more than its share; and at least everyone knows that The Archers made it up.

Steve Coleman

These Foolish Things: The system dictates (1996)

The Scavenger column from the June 1996 issue of the Socialist Standard

The system dictates

[PilkingtonJ is one of the few UK companies to have accepted that works councils, the elected consultative bodies beloved of the European Union, aree a good way to build consensus on key strategic issues. When it comes to sacking people, however, Pilkington found that the rules governing the release of price-sensitive information to the stock exchange, meant that the first that Pilkington’s workforce knew of this particular strategic decision [to axe 1,900 jobs] was on the radio rather than through any consultative mechanism. Guardian, 28 March.

Are jobs bad for prosperity?

Another healthy rise in American jobs yesterday sent the Treasury bond market into a bout of heavy selling again and appeared to rule out any further cuts in the US interest rates in the short term. The economy created 140,000 jobs in the non-farm sector in March, many more than Wall Street economists had been expecting, this followed a rise of 624,000 jobs in February', revised from last month’s initial estimate of 705,000, which had sent the Dow Jones industrial average into a 171-point plunge and wiped three full points off bond prices. Times, 6 April.

Smoking, poverty and profits

BAT unveiled record pre-tax profits of $2.4 billion for 1994, fuelled by the sales of 670 billion cigarettes worldwide . . . Among the countries where BAT cigarette sales have started to increase are: Poland, Romania, Russia, Uzbekistan, Hungary and Vietnam. Guardian, 7 March.

Capitalism’s iron fist

The International Monetary Fund, the Treasurers of world capitalism, has prescribed even more grinding poverty for the world’s working class. Its recently published World Economic Outlook stated that there would need to be further cuts in spending on health and pension benefits by the governments of industrialised nations in order to reduce the high interest rates which damage the profitability of capital. Tax increases, the report said, would not solve the problem because that would hit capitalists.

Telling figures

Car-makers spent a record £515 million on advertising last year. With 1,945,366 sold in Britain, that made the average spend per new car £265 . . . More than half [the cars] went to fleets, say industry sources, so the cost for every private sale was an incredible £1,800-plus. Financial Mail on Sunday. 14 April.

Both couples remain friends

Carlo Giambrone was “gobsmacked” [at being on the same divorce list as the Yorks). The unemployed mechanic arrived at court No. 1 in Somerset House yesterday in a bomber jacket and jeans to tell the judge he could not afford to pay the costs awarded him after his divorce . . . “I have my kids every' weekend. I shall carry on giving my wife what support I can, though at the moment I’m only getting £74 benefit every two weeks . . ." Few observers believe that the £2 million settlement, £500,000 of which has been set aside for the Duchess, will be sufficient to keep her in the lavish lifestyle she has become accustomed to. Guardian, 18 April.

The Scavenger