CARNAGE AT THE BBC

We have come to expect in recent years little from the BBC Reith Lectures but the current series of three by Mark Carney, former Governor of the Bank of England, beginning today will not be without interest. Link here

Carney provided today a clear explanation of how neo-classical economics disregarded most of Adam Smith’s teaching and turned the rest on its head, substituting subjective value for the labour value employed by classical economists.  The dire consequences for us all were well described – a society that knows the price of everything, the value of nothing and considers itself powerless to address the distribution of wealth. There were references to Bentham and John Stuart Mill, but no mention of Marx’s Labour Theory of Value with which he overcame the problems inherent in classical value theory. Where Carney really began to flounder was when he touched on solutions. Calling for a limit to the expansion of markets into every corner of society and for corporate leaders to be induced in some unexplained way to act more ‘responsibly’ simply won’t cut it. It will be interesting to see whether he bottles out of calling for a comprehensive carbon tax in the final lecture. It can be argued that a carbon tax such as advocated by James Hansen is the only means by which capitalism can now survive.

The BBC could be relied on to pick only the most anodyne of questions following the lecture and it didn’t disappoint.  Questions were taken from, amongst others, John Osborne, the former Chancellor of the Exchequer and Ed Balls, the former Economic Secretary.  This speaks for itself.  

The depth of Carney’s economic thinking was, nevertheless, profound compared with what passes for much economic discussion in our mass media today. The remaining lectures will be worth hearing; but in my experience you will, nevertheless, find much more profound and insightful analysis and discussion at Communist Party meetings, in the pages of the Morning Star and provided by the Marx Memorial Library.

Climate Change and Aviation

Climate Change, its consequences and who will bear the cost of ameliorating them,  is for communists a class issue. Some further evidence of this has been provided by recent disclosures about the airline industry.

According to a (typically muddled) speech by Transport Minister Grant Schapps on 19 October, it appears that, by one definition at least, the airline industry is receiving 11% of the entire government Covid support. Meanwhile, Heathrow Airport, owned by a consortium including Spanish group Ferrovial and the Qatar sovereign wealth fund, is appealing against the  High Court ruling that the third runway plan is illegal. The Court  found that ministers had failed to take into account its impact on the climate change!  Following the decision to appeal, a spokesperson for Heathrow commented that “once the benefits of air travel and connectivity have been restored … an expanded Heathrow will be required.”

With the government committed to bailing out the airline industry, who actually will benefit from this restoration of “air transport and connectivity”?  Research  by Gössling and Humpe published this month in the journal Global Environmental Change (link below),finds that 1% of frequent flyers cause half of aviation emissions. While this 1% is not quite the same as the 1% who own  half the world’s wealth, it is not unreasonable to conclude that the beneficiaries of “air transport connectivity” are the latter.

What about the impact on climate change of emissions from aviation? In the same paper   Gössling and Humpe point out that these emissions grew by a factor of 6 to 8 times between 1960 and 2018 and industry estimates prior to Covid indicated a further tripling between 2020 and 2050. Government meanwhile appears content with such projections. It ignores emissions from  aviation,(just as it ignores emissions from imported goods). This could render commitments to achieving zero net emissions by 2050 meaningless.

If aviation  emissions are a class issue, what is the solution? In a capitalist society taxing leisure flying might be attempted – but the 1% are unlikely to be deterred by even a 100% sales tax. A planned approach would be possible in a socialist society, with the ‘need to fly’ the criterion, not the ability to pay. How might we apply such a criterion to business and government flights?  Covid has demonstrated that much business flying is totally unnecessary. Business has no need to transport its top executives across the world in first class luxury by plane and still less by private jet. Remote conferencing provides a perfectly adequate alternative and will, in future, become even better  with the development of  hologram projection. Meanwhile, let’s not forget second class rail travel for our over-privileged business executives.

We face a climate emergency. It’s about time we started treating it as such.

Reference

https://www.sciencedirect.com/science/article/pii/S0959378020307779

KLEPTOCRACY

The dictionary definition of “kleptocracy” is a society whose leaders make themselves rich and powerful by stealing from the rest of us. The classic example is post-Soviet Russia where, according to a sophisticated estimate by Novokomet, Piketty and Zucman (2017), around one billion dollars belonging to soviet citizens was looted and secreted away following the collapse of the USSR.

Our leaders in the UK might not be the same class as Russian oligarchs, but they are catching on fast. The suspension of competitive tendering during the Covid-19 pandemic is providing a wonderful opportunity for ministers to fill the coffers of their friends and allies with public money and see a portion of it flow back into the Tory Party as political donations.  

The National Audit Office (NAO) is committed to investigating how the government has ”managed the risks”  associated with this relaxation, but they will only look at a sample of contacts awarded and, judging by past experience, won’t  investigate the complex relationships, extant and putative,  between ministers and the private sector and the resulting flow of political donations they generate.

Two prime candidates for the NAO’s ‘sampling’ should be definitely be

• Ayanda Capital’s £252 million contract to supply an undisclosed number of face masks to the Department of Health and Social Care.  The owners have links with the international trade secretary, Liz Truss. Many of the masks did not meet the requisite standards and could not be used in the NHS.
• Serco’s contract worth £410 million for the so-called and totally ineffective “NHS” test and trace system. Serco were fined £19.2 million last year by the Serious Fraud Office for misconduct over electronic tagging.

These are, however, simply the two most obvious and blatant examples. What is needed is a complete investigation of all such awards and an in-depth examination of all large political donations and the award of sinecures and over-remunerated ‘consultancies’ to ex-ministers and senior civil servants.  

Reference

Filip Novokmet, Thomas Piketty, Gabriel Zucman, From Soviets to Oligarchs: Inequality and Property in Russia, 1905-2016, NBER Working Paper No. 23712, https://www.nber.org/papers/w23712

Peter Latham and Ted Knight: showing the way

In the wake of the resignation of Croydon Council’s CEO and now its leader Tony Newman, Croydon Council’s auditors, Grant Thornton, have issued a report about Croydon’s weak ‘financial resilience’. You can read the full report by following the link here.

The Council set its 2021/21 budget prior to the Covid-19 pandemic being declared. The auditors complain that there was insufficient challenge from councillors on the financial risks of the budget for 2020-21. From their lofty position and advantage of hindsight, they chide the council that budget setting and monitoring was simply “not good enough”. The pressure points, aside from lacking a crystal ball over Covid-19, arose in their view from over-spending on children and adult social care and the failure to deliver “real savings” in this area.  The auditors were miffed that their warnings in the two preceding years were ignored. It is the nature of the auditing profession, however, to seek to cover themselves by issuing such warnings while continuing to collect their not unsubstantial fees. As a profession their ability to predict real financial collapses is practically non-existent  and for which the collapse of Carillion in 2018 is merely the latest example.

The real problem with local government, including that in Croydon, is not over-spending on social services, it is the absence of tax raising powers and democratic control. As Peter Latham described so vividly in Who Stole the Town Hall, (Policy Press 2017), local government has been reduced to being a mere supplier of subcontracted services under control of a central government intent on lining the pockets of big business who, in return, finance their political party.

Earlier this year we mourned the death of Ted Knight. Ted was Leader of Lambeth Council when Thatcher imposed a cap on the local rate that councils could levy. Ted led a national campaign against the policy and in 1985 refused to set a capped rate because it would have resulted in large-scale cuts. As a result councillors were personally surcharged £125,000, removed from office and banned from standing again. Ted would have been bankrupted had not the surcharge been paid off by the local labour movement. Ted remained politically active for the next 35 years and ended his life as a leading light on Croydon TUC where I was privileged to work with him.

If we are to attain the kind of democratic local government that Peter Latham had in mind, we need more councillors and council leaders of Ted Knight’s calibre  – ones who are prepared to face down the government and set the budgets they know, as our democratically elected representatives, are needed  

WHY WE MUST EXPROPRIATE THE EXPROPRIATORS

While workers brace themselves for a tsunami of job losses, which the Chancellor’s Winter Economy Plan will do little to alleviate, it is notable that, according to Swiss Bank UBS, the world’s 2,189 billionaires have increased their wealth since the beginning of the pandemic by 27.5%  (Guardian, 7 October). This builds on a longer term trend in which the super wealthy have accumulated wealth at a dizzying rate. The same source reported in 2017 that billionaires’ average fortunes had grown by 70% in the preceding three years.

Conventional economics – the neoclassical variety they teach in our universities  and which failed to predict the Great Recession –  has no explanation for this growing concentration of wealth. Thomas Piketty came up with a partial explanation in his 2014 book Capital in the Twenty First Century: he attributed it to the private rate of return on capital consistently exceeding the rate of growth in income and output. He called this the “central contradiction of capitalism” but he didn’t explain how or why this differential persists. To explain it we have to turn to Marx and, in particular, his Labour Theory of Value. According to this, the central contradiction of capitalism isn’t a differential return, it’s the conflict between labour (workers) and capital (those who own the means of production). While this conflict remains unresolved, the latter can extract surplus value from the former provided they can sustain the current social order through their penetration and control of government.

Can conventional politics and conventional political parties such as the Labour Party address this contradiction and resolve it? No. Big business and wealthy individuals have too much influence.

Can we not let the super-rich become even richer provided living standards for workers gradually improve as they have over the last 200 years? No. Global warming has added a degree of urgency that has previously not existed, even at the height of the cold war and under the threat of nuclear annihilation. The super-rich, however, have insufficient incentive to address the urgent need to transition to a zero carbon economy. The world’s 2,189 billionaires own more wealth than the 4.6 billion people who make up 60% of the world’s population (see link below). They can protect themselves from global warming; and they have no wish to see fossil fuels remain in the ground as much of their wealth is invested, directly and indirectly, in them. Yet keeping fossil fuels in the ground, thereby rendering them valueless, is the only known means of halting the rise in atmospheric CO2 .

A condition of addressing global warming is, therefore, in Marx’s words, to expropriate the expropriators. Only then will we be able to start to address global warming.

Reference

https://www.oxfam.org/en/press-releases/worlds-billionaires-have-more-wealth-46-billion-people

Pedagogy

What is the government’s  concept of education, its pedagogy? It is revealed not by its pronouncements and slogans (remember Education, Education, Education ?) but by its actions. There has been much continuity in these since the New Labour government of 1997 to 2010. Principal components have been

• Toleration of large class sizes in schools. This contrasts with practice in the private sector and is consistent with a model in which the teacher  teaches the class from the front of the classroom.
• A lack of trust in teachers – they are told what to teach (national curriculum)and how to teach it (e.g. the mistaken stress on phonics to teach reading ). They are disciplined (by OFSTED), poorly paid and their trade unions are despised and ignored.
• Tacit support for private education with soft inspection, tax breaks and privileged access to top universities.
• State education stopping at 18. Our universities have effectively been privatised and transformed into businesses that sell degrees in an international market. Responsibility for national education has been abandoned and replaced with the profit motive.
• Education has become entangled with finance, with students being required to borrow to fund their further education and these loans, initially from the government, being sold as financial investments for private investors.
• The increased cost of post graduate education which has put it out of the reach of many who would benefit from it.   
• The near total collapse of non-university tertiary education – under-funded further education colleges, the disappearance of art schools and the ending of low cost, self-study avenues including professional education in areas such as accountancy.

Most significant of all, however, has been the state’s abandonment of any attempt at lifelong learning. Everyone’s prospects for post-18 education turn on success or failure at GCSEs. Would the furore over the GCSE grading debacle in the summer has been quite so intense if so much were not riding on the results? When schools were shut to contain Covid-19, would the panic about kids’ ‘lost education’ have made sense if education were seen as a lifelong  process, not a scramble to acquire certificates by age 18?

There is an alternative approach to education. It rejects the concept of the student as an empty pot that has to be filled with knowledge by an expert. It is the approach developed by the SACP Communist University and adopted by the Communist University in South London (CUiSL). It sees education as a lifelong process in which we learn from each other. In the specifics of CUiSL it has involved:

• Open access. Non-members of the Communist Party to be made welcome
• Adult students with varying levels of understanding of Marxism are encouraged to attend classes on a monthly basis.
• No fees. This was made possible by the sponsorship afforded by the Croydon Branch of the CP.
• Everyone is equal and treated with respect. No experts, no professors, no guest speakers.
• We are encouraged to think of ourselves collectively as a “university” in which we are  ‘students’. We are filling the gap vacated by the state.
• Rotating chairs  with everyone taking a turn.
• Topic for study chosen in advance by the class – often but not always a classic Marxist text or Marxist economics – the kind of economics they don’t teach in our universities. Topics can be basic or advanced.
• The class agrees on someone to introduce the topic which is usually dealt with in a single class. Everyone is expected to do this at some point – but no pressurising them.
• The Introducer is encouraged to prepare and circulate a short note in advance.
• Discussion is full and free, reflecting the CUiSL slogan ‘Question Everything’
• An absolutely unextendible finish time is set for every class. This requires firm chairing to ensure that everyone has an opportunity to speak and no one abuses this opportunity.

CUiSL is currently stood down following completion of its study of Global Warming last year. We hope, however, to resume classes in Croydon after the Covid-19 pandemic subsides.

SOCIALISM OR EXTINCTION

The leader in the Morning Star today criticising Extinction Rebellion’s objection to the YCL slogan Socialism or Extinction is a timely reminder that there is a significant element in the X-R movement that is deluded enough to think that capitalism can address global warming. It’s OK, apparently, to rally behind a slogan saying System Change, Not Climate Change, provided it remains unclear which at system is being referred to.    

The only solutions available under capitalism to address global warming are boosting energy efficiency and promoting alternative sources of energy. Implementing unstable technological fixes such as continuous release of aerosols into the upper atmosphere and ocean seeding are literally last gasp measures to ward off immediate catastrophe. As the discussion paper by the Communist University in South London (CUiSL, link below), concluded last year, the only way to address global warming is to keep fossil fuels in the ground. Capitalism is incapable of doing this while fossil fuels remain the cheapest form of energy and huge profits are to be made from their extraction. It doesn’t matter how many windmills we build or how well we insulate our homes, if fossil fuels continue to be extracted, the level of CO2 in the atmosphere will continue to increase and the global temperature will inexorably increase until a tipping point is reached.

Extinction Rebellion have their argument back to front. They fear that by associating themselves with communism  they will frighten people away from their well-meaning efforts to opposing global warming. However, if they conceal from their supporters that capitalism is the block to addressing global warming, their efforts to oppose it will come to nought.

As CUiSL argued, the capitalist elite have a route out of global warming. They don’t need a global population of 7.8 billion people to survive. They can retreat to a secure secure environment, say on top of a mountain, and let most of the rest of humanity die. For the rest of us the only route that avoids extinction is socialism – it’s as simple and stark as that.

https://communistuniversity.wordpress.com/2019/01/28/global-warming-a-discussion-paper/

A HEALTHY WELL-ORDERED SOCIETY?

In a healthy, well-ordered society, in order to achieve safety, efficiency, fairness  and innovation, activities would be under the control of those workers who possess the relevant direct experience and knowledge to run them. Thus, for example

• Running trains would be determined by train crew, station staff and maintenance engineers.
• The fire service would be run by fire fighters
• Schools would be under the control of teachers.
• Universities would be under the control of those who research and teach in them.
• Hospitals would be run by doctors and nurses with suitable input from those who provide the essential support services – cleaning, food etc.

They would need, of course, a few advisers to assist them, but this would be on the basis of ‘on tap but not on top’; and some exceptions would be necessary. The armed forces, police and security services would still need close, democratic monitoring as their activities are too intrusive to be left to generals, police commissioners and shadowy chief spooks.

As we were reminded again this week, our society is neither healthy nor well-ordered.

• RMT and TSSA opposition to removing  guards from trains and reducing platform staff is  ignored. Whether this had an effect on the Aberdeen train crash this week remains to be seen.
• Three years after Grenfell, the FBU’s concern about inflammable cladding continue to be ignored.
• Schools are set to re-open in the autumn while concerns expressed by the NEU are swept aside  and NEU itself is attacked in the yellow press by stooge Tory MPs. Meanwhile, teacher assessments in lieu of exam results are amended by a  government that consistently behaves as if it knows more about teaching than do teachers.
• Universities are displaying more concern about the loss of income from fees from foreign students than the quality of the education they will be proving in the autumn to students from the UK.

Furthermore, as we emerge from the Covid-19 pandemic and respond to the ensuing recession, ‘business as usual’ is no longer an option. We face a global climate crisis that, unaddressed, could dwarf the effect of the pandemic. We cannot expect the rich and powerful, or the governments that promote and protect their interests, to come up with solutions. They are too well insulated, financially and physically, from the consequences. Workers lack this insulation. Without their input, the current mess we are in will be nothing compared with what is to come.

COVID 19: WHAT HAPPENS NEXT?

History teaches us that pandemics do end; but in their wake huge social change can follow.

The Antonine Plague in the second century, thought now to be smallpox , caused the expansion of the Roman Empire to falter; and the Justinian Plague in the sixth century halted the attempt, successful up to that point, to re-establish that empire in the west. The Black Death in the fourteenth century accelerated the dissolution of feudalism and the transition to a wage economy. Recurrences of plague in the seventeenth century heralded the dawn of merchant capitalism and colonial exploitation and then the eventual emergence of the real thing as the Industrial Revolution took off. The assessment by bourgeois economists is that the Influenza Pandemic of 1918 had few social or economic consequences, at least in the developed economies of the day – see link below for a typical  assessment – but in its wake the world did, nevertheless, experience the start of the first attempt anywhere to build a socialist economy. Coincidence?

Whether the Covid-19 pandemic will have comparable social consequences remains to be seen. Our rulers are prone to reassure us that, like World War 1, it will be ‘over by Christmas’ – or at least under control thanks to our supposedly “world class test and trace system”. As this system is run Serco and based on call centres, its only conceivable ‘world class’ aspect is its ability to extract revenue from government. But even if the pandemic were to be brought under control by 2021, a prolonged recession appears inevitable and the tools this government is prepared to employ to end it are inadequate:  printing money and using it prop up the corporate sector in the hope that they will make the capital investment needed to resuscitate the economy.  There is no historical evidence that such a policy will work. What is actually needed is public ownership and massive government investment; but to embark down that road is to risk opening the door to socialism. Lose control of the government after making this investment, however temporary, and it might no longer be possible to shut and bolt the door again. The danger is that our government or its successor will prefer anything to that including war and fascism. Unfortunately, unlike printing money and propping up the corporate sector, these are well tried strategies that have been demonstrated to work  – for capital but not, of course, for workers.

https://www.stlouisfed.org/~/media/files/pdfs/community-development/research-reports/pandemic_flu_report.pdf

AGITATE, EDUCATE, ORGANISE

The principal question raised by the Foreign Secretary’s claim that the Russian government is behind attempts to hack Corona virus vaccine research is not how much worse Russian gangster capitalism is compared with our home grown variety but why this research is being conducted in secret in the first place.

Our planet faces two existential crises

• the de-stabilisation of the climate through fossil fuel consumption.
• the current global pandemic that, unchecked, could kill hundreds of millions worldwide.

The only known solution to the climate crisis is to keep fossil fuels in the ground. Subsidising windmills and home insulation only reduces fossil fuel extraction at the margin.

The best solution to the global pandemic is co-operatively to develop a vaccine, sharing the knowledge as we go along.

Capitalism is incapable of doing either. Its continence depends on profit maximisation. Contrary to the belief of social democrats, the grip of oligarchs on our ‘democratic’ governments is just too strong for capitalism and social responsibility to co-exist.

The production of a Covid-19 vaccine is, in Marxist terms, a productive force.  Its development is inhibited by the legal framework of commercial secrecy which is an essential part of profit maximisation under capitalism. Similarly, green technology is a productive force whose development is inhibited by the continued extraction and burning of fossil fuels which provide energy that is more profitable than the green alternatives  – but only because under capitalism the price necessarily excludes the social cost of global warming.

Marx wrote in the Preface to his Contribution to the Critique of Political Economy:

At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or – this merely expresses the same thing in legal terms – with the property relations within the framework of which they have operated hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an era of social revolution. The changes in the economic foundation lead sooner or later to the transformation of the whole immense superstructure.

Marx’s analysis above appears to fit the current situation perfectly. Does it follow that we are now entering an era of social revolution that will end capitalism and transform society?

Yes, but only if, as communists, we agitate, educate and organise.