Voice From the Back: The Priorities of Capitalism (2012)

The Voice From the Back Column from the December 2012 issue of the Socialist Standard

The Priorities of Capitalism

All over the world capitalist governments facing an economic recession are eager to reduce expenditures. They are examining ways to cut pensions and welfare payments, but there is one area of government expenditure that shows no signs of cut-backs. ‘The USS Gerald R. Ford is the most expensive weapon ever created and will run to about $11.5 billion, with three ships costing about $40.2 billion. Even given these generous estimates, the Navy figures that the USS Gerald R. Ford could cost as much as $1.1 billion more than planned, making it far and away the service’s most expensive warship’ (Business Insider, 25 October). To protect sources of raw materials, markets and spheres of economic and political influence, the owning class must have up-to-date weapons of destruction.

A Cut-Rate Health Service

In times of economic downturn the government searches eagerly for ways to cut expenditure and one of the easier targets is the National Health Service. ‘The Royal College of Nursing (RCN) said that despite the Coalition’s promise to protect frontline staff from cuts the NHS workforce has fallen by almost 21,000 since the Coalition Government came to power. This includes a loss of more than 6,000 qualified nursing posts – from a total of 312,000 nursing posts in the NHS … Patient safety will be seriously undermined by falling numbers of nurses, with the RCN’s chief executive warning that standards of care ‘are going to get a lot worse’ (Independent, 13 November). Spend more on bigger and better bombs, but spend less on health services: that is how capitalism operates.

The Class Divide

The daily press in Britain is fond of creating the myth that workers are gradually improving their economic position in society, but occasionally a journalist will report on what is really happening. Here is an example from the writer Philip Collins giving the facts about Britain. ‘On current trends, an ordinary family will have 15 percent less cash coming in by 2020 than 2008. This has happened all over the world. Blue-collar workers in America have hardly had a pay rise in 40 years. Their counterparts in Germany and Canada have been stuck for a decade. In the UK the household fuel has risen 110 percent, council tax by 67 percent and food is 37 percent more expensive than in 2000’ (Times, 1 November). Needless to say, during this period the owning class have improved their economic standing.

The Widening Gap

Chrystia Freeland has spent 20 years of her life working for the Financial Times and Reuters and she has recently turned her long experience of the owning class into a book about them, entitled Plutocrats: The Rise of the New Global Super-Rich. It was recently reviewed by the press. ‘In the 1970s, the top 1 percent of earners in America captured about 10 percent of national income. Today their share has more than doubled to 22 percent … Bill Gates and Warren Buffett have the combined wealth (about $100 billion) of the bottom 40 percent of the US population – about 120m people’ (Sunday Times, 28 October).

Behind The Statistics

The recent economic downturn throughout Europe has led to the publication of staggering statistics about poverty. ‘Every fifth resident lives in poverty in Spain, new figures showed. The national statistics institute INE said 21.1 percent of the 47-million population lives below the poverty line, meaning they live on less than €7,355 ($9,610) annually … The number of minors aged under 16 living in poverty has increased to 21 percent from 19.4 percent in 2011’ (Turkish Weekly, 22 October). Behind the grim figures lies the day-to-day misery that capitalism forces on members of the working class. ‘A woman aged 53 jumped to her death from the balcony of her fourth-floor flat in Bilbao as bailiffs arrived to evict her for failing to pay her mortgage. There are 500 evictions a day in Spain’ (Times, 10 November).

Voice From the Back: The Need For Socialism (2013)

The Voice From the Back column from the December 2013 issue of the Socialist Standard

The Need For Socialism

For the best part of [20] years Chrystia Freeland worked at the Financial Times and Reuters, so when she writes a book entitled Plutocrats: The Rise of the New Global Super-Rich she has a fair idea of the subject. According to a book review by John Arlidge she has some revealing facts about the rich. ‘These people have become richer. Not just a bit richer. But profanely richer. The top 10% of Americans, for instance, receive half the nation’s income. Freeland shows that inequality in Europe is rising sharply too, and points out how the rules of the economic game have been rigged to favour the rich’ (Sunday Times, 27 October). The reviewer points out the book is stronger on the whos, hows and whys of the rise of the new global super-rich than it is on whether we should (or can) do anything about this inequality. From a socialist perspective we can, we should and we will do something. We will abolish it.

A Heartless Society

With gas and electricity prices rising a survey for Age UK found that 28 percent of pensioners said their main concern for the coming cold months was ensuring they could heat their homes. ‘The charity said the figures suggested the problems could affect as many as three million older people across the UK. Age UK also raised the alarm over the health dangers to the elderly people, warning that cold weather and poorly heated homes increased the risk not only of influenza but also of heart attack and stroke. There are about 24,000 excess deaths in a typical British winter, many of them preventable’ (Independent, 28 October). Britain is one of the most developed countries in the world yet it condemns millions of old workers to this health hazard.

A Pathetic Existence

The number of people who are paid less than a ‘living wage’ has leapt by more than 400,000 in a year to over 5.2 million, amid mounting evidence that the so-called economic recovery is failing to help millions of working families. ‘A report for the international tax and auditing firm KPMG also shows that nearly three-quarters of 18-to-21-year-olds now earn below this level – a voluntary rate of pay regarded as the minimum to meet the cost of living in the UK. … According to the report, women are disproportionately stuck on pay below the living wage rate, currently £8.55 in London and £7.45 elsewhere. Some 27% of women are not paid the living wage, compared with 16% of men. Part-time workers are also far more likely to receive low pay than full-time workers, with 43% paid below living-wage rates compared with 12% of full-timers’ (Observer, 3 November). This so-called ‘living wage’ condemns millions to a pathetic existence inside capitalist society.

Queuing For Handouts

Academics were commissioned by the Department of Environment, Food and Rural Affairs (DEFRA) to carry out an evaluation of the evidence on the use of food banks and soup kitchens in England. ‘The study, by a team based at Warwick University, was completed in March. It is understood to show a surge in food bank use with twice as many people turning to them for free food in 2012 as in 2011. The report is expected to blame the soaring cost of food; prices have risen by an average of 30% in the past five years, while average incomes have remained frozen’ (Sunday Times, 3 November). Users of these facilities are typically given three day’s worth of nutritionally balanced, non-perishable food. They must be referred by doctors, social workers or some other officials. This is the plight of a growing number of workers. Cap in hand, begging for food in a so-called advanced economy. Capitalism stinks.

Poisoned By Profit

One of the most rapid examples of the industrialised advance of modern capitalism is China. However, the Chinese workers must pay a terrible price for this advancing industrialisation. ‘The number of lung cancer cases in the Chinese capital Beijing has soared over the last decade. According to figures published by the state-run Xinhua news agency, they have increased by more than 50%. Beijing health officials say smoking is still the number one cause of lung cancer, but they admit air pollution is also a factor. The World Health Organization (WHO) recently estimated that polluted air kills millions of people every year’ (BBC News, 9 November). In their smog-polluted cities the advance of lung cancer is the inevitable outcome of the mad drive for more and more profits.

The Top of the One Percent (2014)

Book Review from the March 2014 issue of the Socialist Standard

Plutocrats: the Rise of the New Global Super-Rich by Chrystia Freeland  (Penguin £9.99.)

Chrystia Freeland has no objection to the current social system and those who benefit from it: ‘we need capitalists, because we need capitalism’, she writes. And she is now a Liberal MP in Canada. But her book does have some interesting things to say about the very wealthiest people in society and the increase in inequality. 

It is quite common nowadays to refer to the 1 percent who form the top of the class pyramid. But even within this 1 percent there is a distinction between a plutocratic super-elite (which is overwhelmingly male) and those who are ‘merely wealthy’. In 2005, for instance, Bill Gates and Warren Buffett had a combined wealth of $90bn, not far short of that of the 120 million people who formed the bottom 40 percent of the US population. In 2008, the top 2 percent of the 1 percent in Britain, which must be only about ten thousand people, received almost one-seventh of the income of the 1 percent. The super-elite set up ‘philanthropic’ foundations, such as the Gates Foundation, as status symbols.

Also, the higher echelons of the elite mostly operate at a truly global level, with English as their lingua franca. Its members may have been born in one country and educated in another (quite likely at a university such as Harvard or Oxford). They may own a multi-national company with its headquarters in a third country and have homes on two or three continents. So possibly the biggest capitalists are becoming less tied to particular countries and identify less with a national capitalist class. But many of them make sure to attend top British social events, such as Ascot and Wimbledon.

More controversially, Freeland claims that many plutocrats are the ‘working rich’. They are chief executive officers or top bankers or lawyers, rather than just people who own masses of shares. Though few come from truly impoverished backgrounds, their enormous wealth is not inherited, so they are supposedly ‘self-made men’. They mostly work in newish industries such as computing or other kinds of technology, or else in finance. Perhaps it is more accurate to say that these ‘alpha geeks’ often had some idea for a website or a piece of software, but they were just lucky in getting into a position where they could exploit others, and that is what really made them so fantastically wealthy.

So Freeland’s book does have some interesting things to say on ways in which capitalism is changing, and on how it is not.

Paul Bennett