National Character? The Shame that is Kensington and Chelsea

Some interesting statistics and comment by Ash at https://architectsforsocialhousing.wordpress.com/2018/05/14/londons-local-elections-2018-the-consequences-of-voting/:-

“Out of an electorate of 95,378 people, 37,835 voted, 39.7 per cent of the total. Across the 18 wards, a total of 100,429 votes were cast, and 52,211 of these were for Conservative candidates, 51.98 per cent of the total. That was down from the 57.8 per cent of votes the Conservatives had in the 2014 elections; but out of the 50 councillors elected, 36 are Conservative, 13 are Labour and 1 is Liberal Democrat. That’s an increase of a single Labour councillor since the 2014 elections at the expense of a single Conservative councillor. Significantly, 18,578 more votes were cast than in 2014, but the Conservative vote actually increased by 4,220, which means more people came out this time to make sure they got back into office against the threat that Labour would take the borough. By my reckoning, the 71 people (at least) that died in the Grenfell Tower fire have cost Kensington and Chelsea Conservatives 5.82 per cent of the vote, or 0.08 per cent for every identified corpse, the loss of whose life has equated to the loss of 0.014 per cent of a Conservative council seat.

 As ASH wrote back in July last year when we published our report on the Grenfell Tower fire, how we react to this man-made disaster could turn out to be worse than the chain of decisions and shirked responsibilities that caused it, and this vote by the people of Kensington and Chelsea is a stain on what’s left of our national character.”

As communists we struggle with the concept of “national character”, stained or otherwise. For us this disaster and its consequences can only be understood in class terms. As the Communist Manifesto puts it, the history of all hitherto existing society is the history of class struggle. There are no fixes, social democrat or other. The sooner we change the entire system the better.

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CROYDON MAY DAY MARCH

As the coverage in the Morning Star on 2 May demonstrated, May Day is an important day for workers across the world but governments in the UK including, regrettably, Labour governments, have sought to de-politicise it by offering a Bank Holiday on the first Monday in May. Saturday, 5 May is therefore the first opportunity for many of us to celebrate May Day as it should be celebrated – an expression of our solidarity with all working people. The Croydon Communist Party will therefore be joining trade unionists and other progressive forces on the Croydon May Day March and Rally on Saturday, 5 May and encourages others to join us.

Marchers will assemble outside Marks & Spencer, North End Croydon at 12 Noon. We march off at 12.30 with flags and banners waving, led by the Schiehallian Pipe Band, and make our way up North End to the High Street and Coombe Road to rally at Ruskin House, 23 Coombe Road, CR0 1BD which also happens to be the HQ for the Communist Party and the office of Croydon CP. Speakers from 1.30 pm will include Ted Knight, Chair of the Croydon Assembly, Kevin O Brien Unison/Merton & Sutton TUC, Ellen Lebethe, Vice President NPC and Patsy Cummings (Croydon Labour Party).

 

ANOTHER BOURNE CONSPIRACY?

City AM is a free newspaper, available outside many railway stations in the Greater London area, targeted at City workers. It’s always worth a quick read to see what is currently agitating finance capital. On Tuesday, 3 April, the lead article was written by Ryan Bourne who occupies the Chair in Public Understanding of Economics at the Cato Institute.

The Cato Institute is an immensely rich, right wing think tank based in Washington DC. It has been deeply compromised by its involvement in the denial of global warming. Professor Bourne wisely chose to refrain from improving our understanding of that particular problem; instead, he sought to improve our understanding of growing inequality. This, according to the Professor, is a myth: inequality is at its lowest level since 1987 and is currently declining. Really?

To support his case, Professor Bourne refers to an IFS study which he fails to cite. My guess is that he is referring to Fifty Years of Income Inequality . This concludes that inequality peaked in the mid-1980s (i.e. High Thatcherdom) and has not recovered significantly since. The study recognises that interpreting how income inequality has changed in the last 20 years depends on which years you include and exactly what measure of income you use. It appears to assess the situation as flat.

It’s undeniable that the IFS study does not provide much evidence of recent growth in inequality as measured by such statistics as the Gini Income Coefficient. Why is this when most of us can observe it with our own eyes? All it takes is a walk along Croydon High Street any afternoon. The reason is that such coefficients do not relect that

• the social wage has been shredded by the austerity cuts since 2007 to health, education, social services and child support and the people at the bottom are being asked to bear too high a burden. We have replaced social security with food banks.
• social mobility has been undermined by cuts to education and student support and attacks on trade unions. Become poor, stay poor.
• the elite are sufficiently small in number and sufficiently adept for their income and wealth not to show up in Gini Coefficients

Interestingly, Professor Bourne concludes his article by saying that history shows that inequality only ever improves under communism, violent revolution, war or bubonic plague.

As bubonic plague, war and even violent revolution are best avoided (we much prefer peaceful revolution), it appears, against all the odds, that the Professor must agree with us on the need for communism! Either that or he’s actually dismayed at the prospect of the declining inequality he claims to detect. He cannot have it both ways. That’s impossible, even for a professor of public understanding of economics.

You Cannot Be Serious!

In December 2015 the government signed up to the UN Convention on Climate Change (COP 21), requiring net zero CO2 emissions by 2050 – a cut of 90 percent in the then prevailing level. If there is a new runway at Heathrow, aviation is projected to account for 50% of our carbon emissions by 2050. Does this make sense?

Global climate change is a class issue[i]. A world that ignores COP21 will be very different to the present one. The choices for the working class will not simply be between continued exploitation and social revolution. The risk of total subjugation and extinction could not then be ignored.

Aviation’s contribution to CO2 emission is also a class issue. As we pointed out on 29 October 2016, frequent flyers are predominately drawn from the wealthiest 10% of the population. 15% of the British population who fly three or more times a year account for 70% of all flights. More than half the UK population takes no flights at all.

The response of the Parliamentary Select Committee on Transport to Heathrow expansion which reported today is to call for tougher rules on night flights and a plea to keep costs to flyers down. They are silent on CO2 emission.

Have you noticed how the BBC invariably concludes reports of bad news for the government with an anodyne government rebuttal? Perhaps they will employ this one by a Department for Transport spokeswoman in response to the Select Committee’s report:

“Expansion [at Heathrow] will only proceed if it meets strict environmental obligations and offers a world-class package of compensation and mitigations for local communities.”

A more appropriate response to the Select Committee would be that of John McEnroe to a poor line decision:

“You cannot be serious”.

Footnote

[i] If you are interested in participating in research by the Communist University in South London into this, go to https://communistuniversity.wordpress.com/

Looking to the future

The Labour Chair of the Parliamentary Environmental Audit Committee, Mary Creagh MP, has written to the top 25 pension funds to enquire about what they are doing to “safeguard people’s pensions from the financial risk of climate change”. Ms Creagh was reported in City AM on 5 March as saying that “a young person today may be 45 years away from retirement. Over that time scale climate change risks will inevitably grow”.

The lack of understanding implied by this statement is breath-taking. Setting aside the problem that personal pensions[i] , the kind subject to auto- enrolment that pension funds provide – represent poor value for money because of the level of management fees and other expenses and place all the risk on the employee, the issue here is a failure to understand the kind of risk that climate change brings.

Modern Portfolio Theory (MPT) holds that there are two kinds of risk: systemic and unsystemic. As we all live on the one planet, the risk associated with climate change is systemic. It is born by everyone and is independent of any investment decision the individual may make. With systemic risk there are no hedges available, no clever portfolio strategies by which it can be reduced. Ms Creagh might just as well have written to the Met Office to ask about what steps they were taking to stop climate change.

The primary interest of pension funds is to flog their product. They need to attract and retain customers – and the government’s requirement for auto-enrolment ensures a steady stream of these. They market their product by stressing their skill at achieving a good investment return and, to a lesser extent, the level of their fees. MPT holds that the future return on investments is largely independent of investment skill and, perhaps somewhat optimistically, the return will follow the long run average – no more than around 5% per annum real rate of return[ii]. Funds that imply a higher return are either in the snake oil business or taking on more risk that the punter realises. Rock bottom management fees of 0.5% per annum still represent 10% of this anticipated future return. Many management fees and other hidden costs are significantly higher than 0.5% per annum.

The horizons of pension funds are also determined by MPT. At the heart of MPT is the concept of discounting the future. This too is done at the 5% per annum real rate of return. Thus a certain loss in 45 years of £1 is treated as equivalent a certain loss of only some 10 pence today. Even if the pension funds had any way of influencing global warming in 45 years time, this interest would only represent one tenth of their concern about a similar risk today.

We need a solution to global warming, but it isn’t going to come from pension funds – or, regrettably it seems, from Ms Creagh. The only way out of the crisis we face is through genuine democratic control – the kind that promotes the interests of all workers, living and unborn. It’s called Communism.

[i] The alternative is a defined benefit scheme provided by an employer, but they are fast disappearing and, in the case of university and college lecturers, under current attack.

[ii] The only exception is when insider information is exploited. This is only possible for crooks and the super-rich.

Tesco and Equal Pay for Equal Work

Do markets have memory? No, according to a basic tenet of market fundamentalism, the philosophy of the rich and powerful which is endorsed by their high priests, the professors of neoclassical economics. Markets, they contend, are forward looking and respond only to changes in prospects, not past events. This is why they are beyond challenge. They reflect the future and condition what is possible in the present. Furthermore, in the case of financial markets, they respond instantaneously – the so called ‘efficient market hypothesis’. Thus news that Tesco was being pursued through the conciliation service ACAS by the law firm Leigh Day over an equal pay claim that could cost Tesco £4 billion may have dented Tesco’s share price to the extent that investors thought it likely to succeed, but there was no question of customers having to pay for the £4 billion settlement, should it succeed, with higher prices. Future prices would be affected, according to this theory, only to the extent that the average cost of employing staff in future increases.

For communists, two issues arise here.

• While we agree that markets don’t have memory, the economy we actually experience is one of State Monopoly Capitalism in which institutional pressures are brought to bear to protect capital, including that invested in Tesco. To understand this economy, we need to begin our analysis not, where the neoclassical economists begin, with market prices, efficient or otherwise, and work backwards but with production, labour and the creation of value by workers and work forward, identifying with whom this created value ends up. It doesn’t end up with workers, whether shop floor or warehouse, male or female. After workers receive enough to survive and replicate (assuming their offspring are still needed), it ends up with those who own the capital – the 1% and the 0.1%.
• While communists fully support equal pay for equal work claims such as that against Tesco, we recognise that capitalism is incapable of achieving this except in the very limited case of a single workplace – and even then it is hard enough to achieve and sustain. Equal pay for equal work across an entire economy is the defining condition of socialism, which Marx defined as from each according to their means to each according to their work. That is not something that social democracy can, or even wishes, to deliver as, it would rent asunder our existing institutions (on which they, themselves, depend) and replace them with the more democratic framework needed for building communism with its ultimate aim of from each according to their means to each according to their need.

 

Carillion and Marxist Economics

The collapse of Carillion is one of the largest insolvencies experienced in the UK and the biggest ever in the UK construction industry. It puts at risk the jobs of 19,000 employees and an unknown number of employees of its 30,000 subcontractors. In a classic example of the wisdom of hindsight, it will be investigated by the Financial Conduct Authority, who will ask how it happened, the Financial Reporting Council, who will enquire why the auditors, KPMG, failed to warn it would happen, and the Pension Regulator who will investigate how a pension deficit of at least £587m arose before it happened. What these watchdogs should be investigating, of course, is themselves –or rather, they should be investigated by someone else. Quis custodiet ipsos custodes – who guards the guards? Parliament needs to face up to its responsibilities and the Parliamentary briefing paper here is a first step – but don’t hold your breath.

Labour’s call for a curtailment of subcontracting of public services and an end to PFI and privatisations is a welcome response to the collapse. It deserves support, but only addresses one aspect of the problem. The real cause of the collapse is capitalism itself, and events like this will continue to affect the lives of millions until the system is changed.

According to neo-classical economics – the only form of economics taught in our schools and universities  – the potential for businesses to fail is essential to ensure that they ‘innovate’. Furthermore, any government action to ameliorate the consequences of corporate failure will result in “moral hazard” – their jargon for the idea that, if businesses knew that governments would bail them out, they would take even bigger risks. The impact on workers is not considered relevant. We can all find other jobs following the collapse.

If economic theories were rejected, or at least modified, when they failed to explain the economy, neo-classical economics would not have survived the 2007 banking crisis. Where was the talk of stifling innovation and “moral hazard” then when the banks were bailed out? Neo-classical economics survived because capitalism survived, confirming that its real purpose is not to guide policy or explain the economy, it is to provide the intellectual basis and justification for capitalism. It remains intact today and still hugely influential amongst social democrats, greens and members of ‘the Labour Party.

Unlike neo-classical economics, Marxist economics has been, and continues to be, subject to rigorous testing and evaluation and this is how it is taught by, amongst others, the Communist University in South London (CUiSL). Teaching by “experts” is foregone and learning by debate and discussion is employed. Students are not seen as mere empty pots to be filled. Instead we learn from each other, always applying the principle “Question Everything”.

CUiSL holds its classes on the third Thursday of every month at 7.30 pm at Ruskin House, 23 Coombe Road, Croydon CR0 1BD. The next class is on 15 February when we will be discussing Marx and Darwin and how their theories continue to interact. There are no fees and no indoctrination. You enrol simply by turning up. If neo-classical economics were taught in this way, we might have avoided the Carillion debacle.

UNDERSTANDING THE WORLD – AND THEN CHANGING IT

The BBC is required under its new Charter to provide “impartial news and information to help people understand and engage with the world around them”. Its failure to do so renders BBC news coverage increasingly irrelevant. It’s now not only Question Time that leads so many of us immediately to reach for the off button. Much BBC news coverage is more likely to increase blood pressure than increase understanding and engagement.

The requirement to provide “impartial news and information to help people understand and engage with the world around them” has, however, prompted the BBC to propose in its Religion and Ethics Review published this week that its coverage of religious issues should be increased and “greater religious understanding” incorporated into its news reporting. Investigative reporting of the corrosive influence of religiously segregated schools in Northern Ireland and, increasingly, the UK mainland would assist this understanding, but that’s not quite what the authors of the Review had in mind.

One problem for the Review was that it couldn’t avoid recognising that an increasing number of people in the UK do not affiliate to any traditional religion. It was in response to this awkward fact that it concluded that the extended coverage it recommends would also have to “reflect beliefs which aren’t founded on religion”. What “beliefs unfounded on religion” the review had in mind was not explained, so one has to speculate. Belief in creationism, that blood transfusion is impermissible  and (I suspect) that the world is flat are all endorsed by followers of some traditional religion. The Review will have to look to belief in flying saucers for truly independent beliefs – or have I missed its endorsement somewhere?  The Review did, however, identify the  target audience for unaffiliated believers: those not engaged with traditional religion who are “spiritual and interested in the big issues affecting them”.

As communists we are most certainly interested in the “big issues”, and not only those that affect us personally. Furthermore, communist philosophy, i.e. Marxism, provides, in our view, the best understanding there has ever been of the world around us. So can we expect to benefit from this envisaged extended coverage by the BBC? Of course not! We will be excluded, ostensibly because we are not “spiritual”. This is correct in the sense that we don’t rely on spirits to understand the world. However, the real reason we will be excluded is because, as Marx wrote, we not only seek to understand the world, we seek to change it. That is the reason the BBC will exclude us; but while it remains the mouthpiece of the ruling class, we would not have it any other way.

The BBC can do what it wants, but if you want to learn about Marxism and how it can help us to understand and change the world, you can join the Communist University of South London (CUiSL) which runs classes at 7.30 pm on the third Thursday of each month at Ruskin House, 23 Coombe Road, Croydon CR2 0BN. In the Spring Term we will be studying eco-socialism. For more details e-mail cuisl@communist-party.org.uk.

 

The Beginning of the End of Capitalism

The Guardian reported yesterday that Four Seasons Health Care, a private care home provider that looks after 17,000 residents, could go into administration after talks aimed at staving off its collapse were derailed by haggling between private investors. The Guardian article goes on to point out that Labour has criticized the role of high finance in social care.

Is this a sufficient response from Labour? At the root of the problem is a long held reluctance by social democrats to tax wealth and to recognise the contradiction between the need for ‘homes’ for all and the use of housing as private investment. The former requires declining house prices and the latter requires ever increasing ones.

The Labour Party 2017 Manifesto, For the Many, not the Few calls for a comprehensive National Care Service but avoids the question of the provision of care homes and how to pay for them. Under current arrangements we all play the Alzheimer’s lottery game under which some home owners get to pass on their investment to their children while others find they must liquidate their investment to pay for a place in a care home. However, with escalating house prices, essential if housing is to act as an investment, even the children of those who win the Alzheimer lottery may not be able to buy their own homes due to the escalating house prices essential for housing investment.

The other big omission in the Labour Party Manifesto is the taxation of wealth. Despite some recent expressions of interest by Jeremy Corbyn and John McDonnel, it does not feature in For the Many, not the Few. Yet it was included in the Labour Party Manifestos of 1974, 1979 and 1983 before being dropped. Why was this?

For Labour, a wealth tax has always been seen as something to “make the distribution of the tax burden accord more closely with taxable capacities” [i], not a means of redistributing wealth. The essential distinction is whether the tax can be paid for out of income or out of capital. References to ‘taxable capacities’ imply the former. The latter implies the start of what Marx called “expropriating the expropriators”[ii], i.e. the beginning of the end of capitalism.

As Howard Glennerster’s paper Why_was_a_wealth_tax_for_the_UK_abandoned? demonstrates, there will be resistance to even modest proposals for a wealth tax paid out of income. Proposals for a tax paid out of capital are likely to provoke a hysterical response from those required to pay it. No social democratic party, even a Left Labour led by a principled politician freed from the shackles of an entrenched Parliamentary Labour Party, is going to risk provoking such opposition.

The Communist Party has no such inhibitions. Our aim is not to manage capitalism more humanely, it is to replace it. Thus in our pamphlet From Each according to their Means[iii] we proposed an initial annual wealth tax of 2% per annum, with higher rates for the mega rich. Even without these higher rates, a wealth tax would raise £90 billion per annum, sufficient to break the link between housing as investment and housing as a need and also finance a truly comprehensive National Care Service. Most significantly, however, a 2% + wealth tax would signal the first step in the abolition of capitalism. Let’s start promoting it now.

References

[i] Labour’s Green Paper following the 1974 election.

[ii] Karl Marx, Capital, Chapter 32

[iii] From Each according to Their Means, Communist Party, 2014. £2.50 from CP shop

Why Should We Celebrate the Russian Revolution?

_{One question communists can expect to receive is Why should we celebrate the Russian Revolution? It’s a difficult one to answer with soundbites, especially when the questioner isn’t really interested in your answer. There is a wonderful example of this here when the BBC interviewed Rob Griffiths, our General Secretary, during his recent trip to celebrate October 1917 in St Petersburg with CPs across the world. First the loaded question; then the broken link before Rob can answer fully; and then the smear implying that either Rob himself or possibly Putin pulled the connection. Deliberate sabotage or incompetence by the BBC would seem more probable explanations.}

_{In fact any assessment of the Russian Revolution or, more meaningfully, the failed attempt by the USSR to build socialism, is highly complex and the subject of continuing serious study and debate. It has, for example, been a recurring item on the agenda of our own Communist University in South London (CUiSL). Here, however, are ten more or less random reasons why it should be celebrated:}

1. The contribution of the USSR to the defeat of Hitler – without it the Nazis would have won the Second World War and you and I would now be enslaved – or dead. Does anyone think Tsarist Russia could have defeated the Wehrmacht?
2. The mere existence of the USSR strengthened the confidence of workers in the West and required capitalists from 1945 to offer concessions to workers to dampen demand for a revolution here. This explains why, as the economic performance of the USSR imploded in the 1980s, capitalists in the West no longer saw any need to offer concessions to their workers, resulting in increasing inequality and exploitation thereafter.
3. With its planned economy, the USSR saved its own population from the ravages of the Great Depression of the 1930s. In the West, only the advent of WW2 achieved this.
4. The USSR should be recognised for organising through the Comintern opposition to the rise of Hitler and then for seeking collective security agreements which could have to isolated the Nazis. Only when these were rebuffed and it became clear from the Munich Agreement that the USSR stood alone and that the capitalist nations would be happy to see Hitler attack the USSR did the USSR seek its ill-fated, non-aggression pact with Hitler.
5. The USSR was the only country to provide support for the Spanish government against the Franco putsch and, though the Comintern, organise the International Brigade. The capitalist nations turned their back on Spain and provided implicit support for Franco with the non-intervention pact.
6. The cultural and artistic achievements of the USSR – dance, music, painting etc
7. The scientific achievements of the USSR – achievements which matched those of the much wealthier West.
8. The tangible support the USSR gave to the socialist revolutions in other countries, especially China and Cuba, both of which continue and provide hope for us all.
9. The tangible support the USSR gave to communist parties in the West and in the developing world.
10. The USSR’s contribution to the dismantling of colonialism and the ending of apartheid in South Africa. While the Cuban contribution was more tangible, that would not have been possible without the USSR’s support for Cuba.

_{Can anyone propose two more to make it a dozen? But for a more balanced assessment of the USSR, its successes and failures, and to learn the lessons for the future, we need not only study the former USSR. We can learn from China and Cuba where the building of socialism continues; and we need proper discussion and debate, not soundbites, sneering BBC commentators and mysteriously pulled plugs.}