What is a School of Government for?

The new Lavatnik School of Government at Oxford University now offers an intensive one-year masters degree in public policy (MPP) intended to equip students for a career in public service. While there is clearly a need for professional civil servants and public administrators, there must be a doubt about whether what they need can be taught in twelve months, especially when such careers increasingly involve, at the top of the heap, rotating doors between government service and the private sector. Integrity and commitment to the public good are, in any event, not susceptible to being taught in universities and are not demonstrated by the acquisition of a very expensive masters degree for which the student received no grant from the state or local authority for fees or subsistence. But is that what the Lavatnik School of Government is for?

The School is named after Leonard Lavatnik, Britain’s richest man. His wealth is thought to be some £17 billion, from which his ‘modest’ donation of £75 million to the School was sufficient to give him naming rights. As with many of the mega rich, the origin of his wealth is obscure, but, as he was born in the former USSR in 1957 and emigrated with his family to the USA in 1978, it’s a safe bet that he benefitted from the collapse of the USSR and the plundering of workers’ assets that then ensued. This does not represent much of a role model for future public servants in the UK, but Oxford Colleges, like Tory politicians, are, notorious for not looking too hard at the source of their funding. The question remains, however, what is the purpose of the Lavatnik School of Government if not to “equip students for a career in public service”?

An important role for a prestigious School of Government will doubtless be to add to the stock of establishment ‘experts’ who can be wheeled in to justify the status quo. It has, however, another even more grubby purpose.

Professor Jonathan Wolff of this same Blavatnik School of Public Policy, writing in the Guardian today, clearly sees post graduate degrees as a product to be sold internationally. Rejoicing in the fact that in 2014-15 71% of full time masters level students and more than half of PhD students at UK universities come from overseas, he cautions against any possibility that the number of overseas students in UK universities could be capped. Such a cap would simply benefit “our competitors”, by which he means foreign universities. No social function is apparently attached to post-graduate degrees, including the MPP. They simply represent a business opportunity for universities, nothing more.

The Marxist view of the education system is that it’s there to reproduce and legitimate class structure and to meet the needs of employers for staff with the necessary skills, attitudes and conditioning. Post-graduate education is part of this system. Treating universities as businesses competing to flog prestigious degrees to those who can afford to buy them is perfectly consistent with this model.

it’s time to change the system. Education would be a good place to start, and university education should be high on our agenda.

Political Discussion on 15 September

At the branch Meeting on 15 September the political discussion centred on the leadership contest in the Labour Party.

It was agreed that, although Communist Party members were simply observers in the struggle going on inside the Labour Party, and we had no interest in entryism, we were well placed to speak out on what was going on. While the reports to the meeting were essentially second-hand, they drew on excellent contacts across the labour movement and, in many cases, the experience of family and friends who were Labour Party members and members of Momentum.

It was reported that Momentum were advising its members to keep a low profile in the internet and not to refer in public or on the internet to ‘plotters’, ‘coups’, ‘traitors’ or ‘Blairites’ when discussing the election. Fear of being expelled, or at the very least being disenfranchised in the current election, appeared to be widespread amongst Labour Party members. Fortunately, the CP, at this meeting and in the pages of the Morning Star, was not susceptible to such intimidation..

It was reliably reported that Labour Party members were still receiving telephone calls asking whether they had voted yet and, if so, which way. When challenged about the purpose and legitimacy of enquiring about votes already cast in a secret ballot, the callers had, it was reported, hurriedly rung off. The evidence points to these calls coming from the Smith campaign, but how they got hold of names and telephone numbers of Labour Party members was unclear. Breaches of the Data Protection Act could not be discounted.

The attention of the meeting was drawn to the extensive anecdotal reports that Corbyn supporters were being expelled for trivial reasons and to the exclusion of some 130,000 new members because they had joined in the last six months. Doubts were expressed over whether the elements in the Labour Party opposing Corbyn would succeed in expelling enough members to swing the election in favour of Owen Smith. Whether this was so won’t be clear until the Labour Party Leadership Conference on 24 September.

It was noted that, in seeking comments on political developments, the BBC had reverted to those who had participated in the staged and phased mass resignations from the Shadow Cabinet. The self-imposed silence from Hilary Benn and his fellow conspirators had ended. Little surprise was expressed over this development, but it was pointed out that, when the BBC draft Royal Charter was enacted, the likelihood of the BBC  reporting  without bias on political developments would be further reduced.

The most disturbing aspect of the Labour leadership election for many at the meeting was the failure of the challenger, Owen Smith, to confirm that he would respect the result of the election. He had previously stated his refusal to serve in a future shadow cabinet under Corbyn and, in the televised debate with his ‘unelectable’ opponent, he had left the stage after being thoroughly trounced, mumbling about offering Corbyn the non-existent role of ‘president’ of the party. As the Co-op Party had refused to go along with the plotters’ proposal to use it as a vehicle to legitimise a Parliamentary Labour Party in revolt against its elected leader, the meeting was concerned that the Blairite wing of the Labour Party would simply trigger successive leadership elections until they finally win one.

Concluding the meeting, it was proposed that, in response to ideas discussed at the Party Cadre School on 10 September, the Croydon Branch should in future hold public meetings to debate and discuss political developments and analyse them in the light of Marxist theory. It was suggested that this might be done by re-activating and re-branding the classes previously held by the Communist University in South London, but possibly introduced this time by named speakers. This proposal will be investigated by the Branch Committee. Views of members were invited.

 

TUC Congress 2016

Largely ignored by the capitalist press and the BBC, who have again declined to reinstate their live coverage of the event, the annual TUC Congress is taking place this week in Brighton. Despite these efforts to discourage public attention, Congress is particularly significant this year as the government struggles to implement the EU referendum decision and while the Parliamentary Labour Party struggles to sustain its self-appointed role as Tory Lite, contrary to the wishes of its elected (soon to be re-elected?) leader. Fortunately, the CP has no such internal conflicts and, as ever, will be in attendance at Congress, distributing each day Unity, our well received briefing for Congress delegates.

One of the most significant issues facing Congress is reflected in Motion 17 and its amendments, grouped together under the heading Protecting worker and trade union rights in the EU Brexit as Composite 7  The composite resolution calls on unions to ‘oppose any assault on the rights of workers arising from the decision to leave the EU. Our rights as workers continue to be among the most restricted in Europe and any further restrictions through Brexit negotiations would be totally unacceptable. The resolution calls for the trade unions to be recognised as key stakeholders in the Brexit negotiations and for

  • a campaign to ensure that the UK government does not repeal any current rights guaranteed by the EU;
  • the rights of existing EU workers to remain in the UK to be protected; and.
  • the IER Manifesto for Labour Law to be promoted.

The CP welcomes these proposals which we anticipate will be adopted by Congress and thus become official TUC policy. In this event, at the local level we will be asking Croydon TUC to acquire, study and seek to implement the IER Manifesto locally. I will report back on the outcome of this initiative..

A Voluntary Tax

In the CP’s 2014 review of taxation, From Each According To Their Means , little emphasis was placed on hypothecation – the principle under which money raised from a particular tax is used for a pre-specified purpose. This makes sense. The primary purpose of taxation is to finance the totality of government expenditure and, subject to borrowing to invest for the future and the cyclical nature of economic activity under capitalism, budgets do need to balance. When, however, there is an opportunity to raise revenue which can be matched with a clear social need for government expenditure, it makes sense, if only for  presentational purposes, to link the two.

Inheritance Tax is currently a “voluntary” tax, not only for the very wealthy but also for large sections of the upper middle class who also see it as their right to pay as little of it as possible. Estates worth less than £325,000 are exempt and the rate of and 40% thereafter is easily avoidable by employing any half-competent solicitor. The Duke of Westminster’s estate, for example, is said to be worth some £13 billion, but no Inheritance Tax will be paid following his death last month as his property is held in trusts. In consequence, Inheritance Tax yielded a paltry £4.6 billion last year. Yet according to even ONS statistics , wealth in private hands is now worth £11.1 trillion, with more than half owned by the wealthiest 10%. If we assume an average lifespan of 60 years between inheritance and death, this indicates an average effective rate of Inheritance Tax of only 2.5%. In reality this average effective rate is much lower due to the wealthy concealing their wealth and the average interval between inheritance and death being much less than 60 years.

Consider now the government’s current level of support for those in residential care homes. According to Laing & Buisson Care of Older People UK Market Report 2014/15. care home charges last year were on average £29,250 per annum, rising to over £39,300 if nursing care was required.  Charges in the London area are significantly higher. Support from local authorities is available (although increasingly difficult to access due to the austerity squeeze from central government), but the care home resident has, in effect to surrender any capital in excess of £14,250 but less than £23,250 at a rate of £250 for every £1 per week of support and 100% of any capital in excess of £23,250. For a small estate of, say £50,000, this is equivalent to paying Inheritance Tax at 72%.

What is to be done? According to the Dilnot Commission in 2011, there should be a cap of £35,000 on the amount an individual would have to pay for their own care costs during their lifetime. Above that level, the state would pay a standard rate for care, regardless of the individual’s wealth. People would still be liable for costs of accommodation and food in a care home, but this would be capped at £10,000 a year. In addition, the commission called for a big increase in the threshold of savings and assets above which the state offers no help with care costs. The limit should rise from £23,250 to £100,000.

These were modest proposals and failed to go to the heart of the problem. The government nevertheless chose to ignore them. Instead it included a vague manifesto commitment to introduce new rules designed to prevent older people from having to sell their homes when they go into care. This has been deferred until 2020. A lifetime cap on care costs in England of £72,000 was also proposed but deferred after council leaders asked for the allocated funding to be used instead to paper over the on-going crisis in day-to-day social care services.

According to another report from Laing and Buisson, residents (and local authorities) currently pay £14.3 billion per annum in care home fees. This figure is likely to increase due to:

  • pressure on fees from cash-strapped local authorities driving many smaller homes out of business, enabling the rest to put up their fees; and
  •   pressure on care homes to improve the pay of their often badly paid and exploited staff. Even the Tories’ so called living wage will have an effect here.

If, however, we disregard the profits earned by care homes – in a sane world they would be run by local authorities, not profiteers – and estimate that the economic cost of the services currently provided is, say, three times that currently paid, this could be paid for by a tenfold increase in the yield from Inheritance tax. Given the current very low effective rate of 2.5%, this could be achieved by abolishing the trust loophole and ensuring other similar scams are not allowed to flourish. With an average rate of tax of 25%, we could have care homes for all with most people still being better off . With a graduated rate of tax, 90% of people could be better off. For example, on the figures above, a rate of 50% on the top 10% of wealth owners and a zero rate for the rest of us could provide care homes for all.

I don’t claim that the above calculations are anything other than rough estimates. The overall position they reveal is, however, undeniable. There is a solution to the problem of paying for care homes: it’s an Inheritance Tax that is no longer voluntary..

 

GDP

Gross Domestic Product (GDP) is a statistic to which much importance is attached by the high priests of capitalism, our celebrated economic ‘experts’ and central bankers with their panels of expert advisers. Estimates of the growth or decline in GDP in the previous quarter are eagerly awaited, and forecasts for the coming year and beyond are given much credence and lead to sighs of relief when, as with the recent forecast for UK GDP from Moody, they predict growth of 1.2% for 2017, only slightly lower than the 1.5% forecast for 2016. The collective group-think is that, while the UK economy is slowing down, the EU Referendum result will not, as previously feared, trigger a recession. This confidence is buttressed by forecasts of GDP growth in the rest of the world, the recent fall in the value of the pound and the Bank of England’s further resort to ‘quantitative easing’ – the strategy whereby the government, in effect, prints money and lends it to the commercial banks without any strings attached.

Capitalist economies are, of course, always driven by such vague sentiments, reinforced by the wisdom of ‘experts’ who actually have little understanding of how their economies really work or when the next crisis will hit. Moody’s forecast assumes that another financial crash of the kind experienced in 2007 and 2008 won’t occur. Considerations such as the instability of the Euro, the house price bubble and bankers’ continued addiction to casino and arbitrage activity instead of investment in productive enterprises are simply ignored. Also disregarded, perhaps because it is simply too painful for the ‘experts’ to contemplate, is the much greater difficulty governments and central banks will encounter if a crisis in the banking and finance sector occurs sooner rather than later. Next time it won’t be so easy to lay the burden on ordinary workers and their families. That trick can only be played when memories have faded.

The tendency for capital to over-accumulate and resort to speculative activity as the rate of profit declines makes another economic crisis inescapable. It may not arise in 2017, but it’s coming.

Finally, a brief note on GDP. GDP is arrived at by summing the value added from separate commodity generating activities across the economy, thereby avoiding double counting the production of commodities used in subsequent production. It thus represents the income available to a nation to pay wages, capital costs, taxes and (most important to capitalists) profits. It is a useful measure of the scale of an economy, but it has several shortcomings. In particular:

  1. it fails to measure inputs and outputs at their true economic cost. In particular, no allowance is made for the damage to the environment caused, for example, by CO2 emissions;
  2. there is no allowance for depreciation of plant and machinery. If this were done GDP would be a good first order estimate of surplus value – a key measure in Marxist economics which bourgeois economists prefer to ignore – assuming that is they understand what it is;
  3. GDP, even after deduction of depreciation, requires a deflator before it can be used as an efficiency measure. The available deflators such as hours worked have limitations; and
  4. the statistic tells us nothing about how GDP is shared between capitalists and workers.

 

For those interested in these more technical matters, I will post a short piece shortly on the  Communist University in South London website.

 

Keeping focussed on Global Warming

Averaged as a whole, the global temperature across land surfaces for June 2016 was 1.24°C (2.23°F) above the 20th century average—tying with 2015 as the highest June temperature in the 1880–2016 record See source. In June the CO2 level reached an all-time high of 404.48 ppm. That compares with 381.82 in July 2006 and peaks of only 300 ppm in the last 400,000 years. See source.

The government’s response was to scrap the Department of Climate Change. Climate change is now the “responsibility” of the Department for Business, Energy and Industrial Strategy and will have no one in Cabinet to make the case for action to oppose it. If problems went away by ignoring them, this would be a masterstroke. Unfortunately, they don’t and it isn’t.

There is also a danger that, in the heat of battle over getting Jeremy Corbyn re-elected as Labour Party Leader, the Left, and even the Communist Party, could also lose sight of this issue. This must not be allowed to happen. Global warming may, according to Marxist theory, act as a fetter on the growth of productive forces and thereby lead to the replacement of capitalism with a higher form of social organisation, i.e. socialism, but this is not the only possible outcome. Global destruction – a Sixth Great Extinction – is another. Indeed, according to Barnosky and others Nature 2011, it has already begun, but it will only become irreversible if we allow the capitalists to ignore it.

The 54th Communist Party Congress will be held on the weekend of 19-20 November. We are currently in a pre-Congress discussion phase when members and supporters debate anything and everything on the Members and Supporters site. It’s important that we take this opportunity to keep Global Warming at the forefront of concerns.

 

 

The Long Term View

In the final paragraph of his book, Stepping Stones, the making of our Home World, Steve Drury concludes that:

a mere 10 thousand years of human history has created economic chains that stifle such potential and increasingly endanger its survival. It seems to me that if history is to continue being recorded and sifted through, the next stepping stone is consciously to break those chains.

As communists we heartily endorse this conclusion, but we may not all be fully aware of how we got here. Marxists tend to study history and pre-history back to the end of the last Ice Age, but Steve Dury takes us from when our planet was formed some four and a half billion years ago and, drawing on the latest scientific evidence, explains everything with stunning clarity and insight. You can still find copies of the original hardback first edition  (Oxford University Press, 1999, ISBN 0 19 850271 0) if you hunt round for them but he has now generously published a revised, second edition as an e-book  here . Both this and the revised second e-edition cannot be recommended highly enough. Day to day political and economic analysis and knockabout is all very well, but, in addition, we all need to be aware of the long term view..

Bring it on

Having jumped the gun last week and been recalled to the starting line, Angela Eagle finally left the starting blocks today in her bid today to oust Jeremy Corbyn as Labour Leader. If the intention of those behind the unrest in the Parliamentary Labour Party really is to replace Jeremy with someone more “electable”, they could hardly have found anyone less suitable. Their real motive is, of course, money. The plotters fear that Corbyn won’t deliver the needs of Big Business, on whom the careerists in the Labour Party depend and whose interests they represent. If Corbyn cannot be kept off the ballot paper (an issue that may be resolved by the NEC tomorrow) and the ballot cannot be rigged, their Plan B will be to form an SDP Mark 2 comprising Labour MPs, managed by the existing Labour office staff and funded by Big Business. This new party will, however, require a more “electable” leader than the hapless Angela.  Whatever the outcome, her leading role is likely to be very temporary.

The outcome of the EU referendum came as a surprise to many commentators and has been blamed by the plotters on Jeremy Corbyn’s failure to join Project Fear, the Tory led attempt to frighten electors into voting to stay in the EU. The conspicuous absence of a similar strategy to block Theresa May from becoming Tory Leader and, by default, Prime Minister, on similar grounds is significant. The difference between Mrs May and Jeremy Corbyn is that the former will act in the best interests of Big Business and the latter cannot be relied on to do so.

What the referendum vote to leave the EU actually reflected was the growing gulf between the middle classes and the working class. This gulf has been growing apace under ‘austerity’, the policy pursued by the Tories and, until Corbyn was elected leader, by Labour. Under austerity social spending benefitting the working class and the taxes paid by Big Business are both cut. That this is the explanation for the significant working class vote for exit has escaped much of the liberal intelligentsia. Their spokespersons – the likes of Will Self and the hacks at the Guardian – have not blamed Corbyn  – instead they  have turned on the working class itself, attributing their support for Exit on endemic racism.

What the liberal intelligentsia overlook is that it is easy to be liberal about the free movement of labour when you gain from the arrangement. For the middle classes it provides lots of well paid jobs for UK graduates and professionals across the EU. Together with a rather woolly feel-good attitude about European togetherness, the EU also provides them with cheap building labour, cheap, unchavvy nannies and cheap fruit picked in the UK by sweated labour. If, on the other hand, you are not a member of the middle class and are denied access to further education, or can acquire it only at the cost of incurring crippling debt, the glittering job opportunities in Europe are irrelevant. The attractions of cheap, unskilled labour are also diminished when it’s you who have to compete for the zero hours jobs on offer. If you are in a trade union, the EU’s failure to recognise and respect collective bargaining and its opposition to trade union solidarity is also a major concern. To be told by those who are unaffected by these issues that you are racist is insulting. There is nothing inherently anti-racist or honourable in supporting the free movement of labour when you happen, personally, to gain from it at the expense of your fellow citizens; and there is nothing inherently racist or dishonourable in opposing the free movement of labour when it damages the collective interests of your class. The liberal intelligentsia need to wake up to these facts and, like the Communist Party, show the working class some respect.

The liberal intelligentsia could also usefully follow the Communist Party in rallying to the defence of Corbyn. This does not mean that the CP is going to indulge in mass entryism which, according to the Guardian today, Labour HQ claim to fear. This is simply scare tactics on their part. Had Labour HQ ever read the Communist Manifesto, they would know that communists “disdain to conceal their aims and views”. What was true in 1848 is true today: communists don’t do entryism. We will, however, openly and defiantly campaign, shoulder to shoulder with our brothers and sisters in the trade union movement, including those represented by Croydon TUC, with ordinary Labour Party members and in the pages of our newspaper, the Morning Star, to see Jeremy Corbyn re-elected. Bring it on.

 

MOTHER SUPERIOR JUMPED THE GUN*

It was nauseating to see the serried ranks of well fed, self-satisfied Labour MPs failing to rise to defend their own Leader when Cameron used Prime Minister’s Question Time this week to engage in what amounted to bullying Jeremy Corbyn. In attacking him in the most personal and unpleasant manner, Cameron, himself on the way out, quoted Oliver Cromwell’s address to Parliament in 1653: “In the name of God, Go!” As Robert Wilkinson pointed out in his letter published in the Morning Star today (Labour Coup), neither Cameron nor the silent Labour MPs sitting behind Corbyn appeared to be aware that Cromwell’s instruction wasn’t addressed to a leader facing problems with his own side, it was addressed to The Rump – the mass of corrupt MPs in 1653 who represented no one but themselves. Check it out here. Labour MPs, who are now, with only a handful of honourable exceptions the modern day equivalent of the Rump, should be ashamed of their cowardice and ignorance. If they survive long enough to stand again as Labour Party candidates or, more likely, as candidates of a new party (the Social Democrats Mark 2?), their treachery will not be quickly forgiven or forgotten by the electorate. If they should prevail , the Labour Party will experience the same fate as their fellow Blairites in the Scottish Parliament : total oblivion.

The Labour Party can, nevertheless, still be saved provided Jeremy Corbyn doesn’t crack under the immense strain imposed on him by his ‘colleagues’, and provided the unions don’t weaken in their support for him. With the support of Labour Party members and supporters, and the moral and campaigning support that the Morning Star and the Communist Party can provide, he can win again. In this he should be assisted by the publication of the Chilcot Report next week. Although it’s bound to be something of an establishment whitewash, it will be difficult for Chilcot completely to cover up Blair’s mendacity and evidence of criminality and conceal the spinelessness of his cabinet and ministers, from whom the most likely leadership contenders, including Angela Eagle, are drawn. Could this be why, when she jumped the gun on Thursday, Angela Eagle had to be recalled? I wonder who whispered in her ear “Angela, Darling, I think you may have overlooked something”.

* The Beatles, from Happiness is a Warm Gun, The White Album

The Morning After

The vote to leave the EU, declared in the early hours of Friday morning, was a result of the fissures in British society. Of itself, it will do nothing to mend them, but it will provide an opportunity to do so – if we seize it.

What are these fissures? First, parliament does not reflect the class structure of the people it claims to represent. Thanks to First Past the Post, tolerance of lobbying by Big Business and private ownership and control of the mass media, Big Business is far better represented in parliament than you or I. Our MPs didn’t vote 52:48 for exit: the vast majority of them wished to stay in the EU. This bias was buttressed by the fact that, as individuals, they are, excluding a significant sprinkling of millionaires, largely drawn from the professional middle class. MPs like the veteran Labour MP Dennis Skinner, who worked as a miner and trade union rep, are a fast dwindling minority. Having first hand experience as a worker and trade unionist, Dennis opposes the free movement of labour and capital within the EU because it damages the former and benefits the latter. As reflected in his autobiography Still Sailing Close to the Wind, there is not a hint of xenophobia in his attitude: it is based on the need for all workers, irrespective of colour and creed, to stand together and not to under-cut each other’s wages. Most MPs who supported Leave are Tories who either reflect the interests of smaller capitalists and landowners or who, like Boris Johnson, are driven by naked personal ambition.

The second fissure in British society is the wealth divide – a divide that is increasing due to the policy of Austerity. Under this policy, which George Osborne grotesquely threatened to intensify if voters dared to vote leave: public services, including health, education and social support are cut back; nothing is done to address the need to house ordinary working people; and income and wealth distribution is further skewed in favour of the wealthy. In the absence of a Labour Party able to explain the situation to them, many working class voters concluded that the EU was the cause of their problems. In that the EU was not doing anything to help address their problems, they were not wrong. The real issue, nevertheless, passed most of them by. If we are to build a better tomorrow, we need democratically controlled public ownership and a strong, democratic presence in the workplace . When the time comes to secure this, the EU would have stood in the way. The EU, under its various treaties, is committed to the free movement of labour. This means workers moving into areas where workers have secured for themselves better terms and conditions and driving them down to the ‘market ‘ rate. As Karl Marx demonstrated, this market rate tends to a minimal one – in the long run a subsistence rate. Opposing the treatment of labour as a commodity is the real case for voting to leave – and the Labour Party failed to make it.

A third fissure in UK society did not, however, contribute to the leave vote but cannot be ignored. The leave vote in the UK and the stay vote in Scotland have brought the break up of the UK closer. The Scots have every right to independence if that is their settled wish, but communists recognise that this could undermine working class solidarity in what is now the UK. The blame for the growth in the SNP and the eclipse of the Labour Party in Scotland can be laid at the door of the Blairites. Whether it is too late to re-assert Scottish Labour’s socialist commitment remains to be seen.

Nothing will, however, be gained if we sit back and await the coronation of Boris Johnson at the Tory Party Conference in the autumn. While a better world will require fundamental changes to our democracy and a communist/socialist government which prioritises the interests of ordinary working people, the immediate aim for Labour MPs and the TUC should be to press for an end to anti-trade union legislation and a strengthening of trade union rights under the legislation that will be needed following withdrawal from the EU. For the rest of us, including Croydon CP, we could do a lot worse than campaign in opposition to the view that it is for the Tory Party Conference to select the next Prime Minister and that it is no time for Labour MPs to try to unseat Jeremy Corbyn.