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

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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.

 

A Thought for Halloween

Writing this week in City AM, Diego Zuluaga, Head of Financial Services and Tech Policy at the Institute of Economic Affairs, seeks to defend capitalism. His article on 24 October Big Businesses Denigrating Capitalism Don’t Understand It is interesting not for its call on big business leaders not to rock the boat, nor for its arguments in defence of capitalism – even the author must surely recognise, deep down, they are disingenuous – but because it was felt necessary to publish such a defence at all.

For Marxists, a study of history and an analysis of capitalism and its instabilities leads us to conclude that capitalism is merely the penultimate stage in our evolving, class-based society, not the final equilibrium or ‘end of history’ envisaged by Francis Fukuyama. Marxists are sometimes accused of irrational belief, but belief has nothing to do with it. Our approach is a rational and scientific one. It is the defenders of capitalism who exhibit irrational belief. Their confidence that de-regulating markets will lead to the welfare of all is, at best, based on an elegant model built on unrealistic assumptions[1]. In practice, it is based neither on economic theory nor on Zuluaga’s flimsy arguments but on the self-interest of the ruling class and those in their pay. Our theories, on the other hand, have concrete evidence to support them: the 2007 financial crash; historic levels of inequality; Grenfel Tower; global warming; the housing crisis; growing hospital waiting times; bloated expenditure on ‘defence’; and …. Readers of this blog are invited to complete the list.

It may be too soon to claim again, as did Marx and Engels in the Communist Manifesto, that ‘a spectre is haunting Europe, the spectre of communism’, but we can take comfort from the thought that something is spooking our ruling class.

[1] The Arrow-Debreu Model, a mathematical expression of Adam Smith’s ‘hidden hand’. Amongst its many unrealistic assumptions is perfect and complete markets.

Our “Free” Press

It would be a mistake to believe that the power of the capitalist press has been irrevocably damaged by its failure to deliver the Tory vote at the last general election. Social media may have enabled the Left to function without national newspaper support on that occasion but it must not be forgotten that the Tories still gathered 42.4 % of the popular vote against 40.0% for Labour. In the event of a Labour victory next time, unless something is done popular discontent will soon be whipped up against it. If anyone doubts this, look what is happening in Venezuela.

As Rob Griffiths, our General Secretary, reminded readers of the Morning Star this weekend, there is an old aphorism that the Express is read by those who think the country should be run like it used to be run, the Telegraph by those who think the country still is run like it used to be run, the Mail by the wives of those who run the country, the Guardian by those who think they should run the country, the Times by those who do run the country and the Financial Times by those who own it. While this is merely an amusing adage, it retains a germ of truth. But as Bill Barnett pointed out in a letter published in the same edition of the Morning Star, in times of falling readership, the “power of the press” is now largely dependent on the status it is afforded by national broadcasters, especially the BBC. ‘What the papers say’ is still treated as something of consequence to be faithfully reported. The continuing decline in readership is ignored. Every attempt to get the BBC to extend coverage to the Morning Star, despite well supported Early Day Motions in Parliament, is ignored.

A lot of nonsense is talked about the value of a “free” press. If a Corbyn led government is not to be undermined from the start, it should be a matter of priority for it to improve press regulation, require balanced reporting, establish an equal prominence right of reply, dispossess expatriate owners and, if any newspapers are to remain in private ownership, to properly tax the benefit of such ownership. As was pointed out in the Communist Party pamphlet From Each According To Their Means[1], newspapers are not owned for any (modest) profits they may generate, they are owned for the political power they confer on the owner. This pamphlet called for a public debate on newspaper ownership and how it should be taxed. One possibility would a substantial per copy levy on the number of copies distributed (rather than actually sold) in the UK with an exemption for reader owned co-operatives. An extra levy could be charged on any free bottles of water accompanying the purchase!

Footnote

[1] £2.50 including postage Follow link

It’s impossible to say whether the extreme destructiveness of Hurricane Irma was due to global warming, but its intensity demonstrates the forces we can expect to be unleashed now average global temperature is above that 125,000 years ago during the last interglacial. During this interglacial, when homo sapiens was confined to Africa, the Greenland and West Antarctic ice caps melted. The current interglacial which we are now living through began only 11 thousand years ago. The Greenland and West Antarctic ice caps have yet to melt, but, accelerated by human CO2 emission, this is now happening. When the Greenland and West Antarctic ice caps melted 125,000 years ago, sea levels rose some 4 to 6 meters above the current level. If they melt again, as is expected, sea levels will again rise by a similar amount.

No one knows for sure how quickly the ice sheets will melt or where the process will stop. A completely ice free world would result in a drowned world with sea levels some 70 metres above current levels. Unless a tipping point is reached first, this is currently thought unlikely in this century, but the direction of travel given our dependency on fossil fuels and the profits that can be derived from their extraction is clear enough.

Can humanity cope with increases in sea levels of 4 to 6 meters or more? Go to http://flood.firetree.net, feed in your own predictions and fears and judge for yourself the effect on shorelines and how you and yours will be directly affected. But the amount of currently dry land that will be below sea level is only part of the problem. As Hurricane Irma and recent floods in Texas, the Caribbean and India demonstrate, water moves and it is surges, precipitous rainfall and wind that cause the real damage rather than the slow encroachment of the sea. Living a few hundred feet above sea level will not secure your future or that of your children – unless, that is, you are part of the capitalist elite.

One reason for the lack of enthusiasm in tackling CO2 emissions – look for example at how the issue was ignored in reaching the decision on Heathrow expansion – is that capitalists, those who own the means of production and thus don’t have to sell their labour to live, are pretty confident that they will survive the coming global climatic catastrophe. They are strengthened in this view by robotisation, the accelerating substitution of labour by machines, giving them an implicit belief that they can become self-sufficient provided they are supported by a servant class. The 1% need, say, 2% to serve them, leaving the 97% superfluous to their needs.

Scared? You should be. Global warming is probably unstoppable even if the political will existed to try. But that doesn’t mean that it cannot be slowed or that our world will shortly (i.e. by the end of the century) become uninhabitable. The choice is between: letting the 3% survive and the rest of us perish; and starting out on the road to building a communist society which meets the needs of everyone. Given where we are starting from, that means building the Communist Party – now, in Croydon and everywhere.

Open Universities?

The CUiSL class on 20 July on What comes after capitalism? was well attended and got the new term off to a lively start. The next class will be on 21 September, 7 pm at Ruskin House. The topic will then be Universal Basic Income – do we want it?

CUiSL is an open, free university which treats its students as a resource, not empty vessels to be filled by experts. It is therefore very different from what we have come to expect from commoditised university education. These differences have been highlighted by two items covered in news reports over the summer. The first is the report that I have personally had confirmed by the supposedly Open University: that it is refusing to accept students from Cuba on the grounds that the OU, a British institution funded by British taxpayers, lacks a license from the US Treasury Department’s Office for Foreign Assets Control to do so. Such supine acceptance of US extraterritorial jurisdiction is breath-taking and says much about the independence of thought we can now expect from that once noble institution. The second event is the ongoing debate on student fees and who should pay them. Writing in City AM today (23 August), Paul Omerod, Visiting Professor at the UCL Centre for Decision-Making Uncertainty, acknowledges that universities have no incentive to reduce their fees as to do so would signal that their degrees were less valuable than others. His half-baked solution is to offer discounts to students with higher grades. How this fits with the ethos that universities are businesses left free to charge “what the market will bear” defies logic. A better solution would be, as we have argued below, for universities to reassume their responsibilities for providing the nation with further education and research and for the state to pay fees and subsistance grants financed by progressive taxation, including that on graduate incomes. One useful saving that could, however, be made would be for future free university education to be confined to those educated in state schools. For as long as we tolerate private education, why should those wealthy enough to pay for private education (i.e. ‘public’ schools) for their kids be allowed once more to access state funded further education for free?

Student fees: putting the genie back in the bottle

The admission by Lord Adonis, the Blairite minister responsible for introducing them, that mushrooming tuition fees and student loans to pay for them were a terrible mistake is a long overdue admission. The Labour Manifesto contained a commitment to abolish student fees from this autumn. There was, however, no commitment to write off existing loans, although Jeremy Corbyn has publicly acknowledged here the problem and said he would deal with it if elected.

Putting the genie back in the bottle will not be easy. As restrictions on fees were progressively relaxed, the universities came to see themselves more and more as businesses competing with foreign universities, not public services. As businesses they felt entitled to pay their top executive whatever ‘the market’ would allow. Vice Chancellors now trouser £275,000 per annum on average and in some cases over £400,000. There will be tremendous resistance to returning universities to institutions whose purpose is to educate and support research, not businesses that sell degrees internationally and earn money from royalties.

Universities are not alone in being captured by ruling class interests and ignoring their social purpose. It will take more than the single term of a progressive, social democratic government to rid all our public services – education, health, social and infrastructural – of the corrupting influence of capital. Capitalism itself needs to be dismantled, but this cannot be achieved without a clear understanding of capitalism’s current trajectory, how we can influence it and (arguably) a clearer idea about what is to replace it.  What Comes After Capitalism will be the first subject we tackle in the new series of classes at the Communist University in South London (CUiSL) on 20 July. See link  for details.

TWO REVIEWS YOU MUST READ

In the Morning Star today is a glowing review by Andy Hedgecock of Dr Peter Latham’s new book Who Stole the Town Hall?  Peter is a member of this branch and an expert on local government. The review concludes that

Neoliberalism is unsustainable and this book uses compelling and accessible evidence that a  different form of politics is both possible and essential.

This is spot on. Copies of Peter’s book will be on sale at the Communist University in South London class at Ruskin House on 20 July but don’t wait until then: buy your copy now.

The other review you must read is Andrew O’Hagan’s review in the London Review of Books (1 June) of Adrian Addison’s book Mail Men: The Unauthorised Story of the ‘Daily Mail’. It’s not so much a book review, more a full on, in-your-face demolition of the Daily Mail and its editor Paul Dacre. Yet again the London Review of Books has shown itself to be unafraid of rocking the establishment and untainted by the timidity that grips the Guardian and the BBC.

Saturday 24 June: discussion analysis and some modest celebration

As we pointed out on 22 May, we are living, in an age of political upsets. So it has proved. Well done everyone who campaigned here in Croydon Central and across the country for Jeremy Corbyn’s Labour Party, and shame on those in the Parliamentary Labour Party who campaigned over the previous eighteen months to undermine him. Without this disruption, Labour might well have won this election. But don’t let us deceive ourselves: as we pointed out in that same blog, we have been participating in a flawed process. The weight of the capitalist press, apart from the late conversion of the Guardian, was so biased that, if our elections were properly regulated, the cost of printing these disgraceful rags would have been charged as an election expense. The BBC’s coverage of Corbyn’s Labour was pitiful and continues to be biased in favor of the Right – just consider the coverage currently being lavished on Nigel Farage, the ex-leader of an ex-party. The Electoral Commission has shown itself incapable of controlling election expenses; Big Business continues to buy influence, even inside the Parliamentary Labour Party; and neo-classical economics retains its grip on economic theory and will continue to be palmed off in the mass media and on the BBC as independent and objective analysis.

Local government remains enfeebled. The NHS is still being dismantled. Education still faces cuts. We are saddled with a Tory-Orange coalition for which no one voted. If the LibDems couldn’t check the Tories in coalition, how much restraint can we expect the Orangemen to provide? So the battle now turns on building an alternative to the feeble ‘democracy’ provided by parliamentary and local government elections. The Croydon Assembly and Festival for unity, diversity and democracy at Ruskin House on Saturday 24 June is another step on in this direction. Communists, our friends and supporters and everyone who wants a real democracy are encouraged to register for the Assembly here and turn up on the day for discussion, analysis and some modest celebration.

Hypothetical Questions

At last, and after much hostile criticism, the Guardian has begrudgingly endorsed Jeremy Corbyn and called for a Labour vote on Thursday, concluding the editorial on Saturday with

 
…Mr Corbyn has shown that the party might be the start of something big rather  than the last gasp of something small. On 8 June Labour deserves our vote.

 

Well done, Guardian! It must have hurt to print this after so much carping ; but perhaps it has dawned on them at last that, as good as their arts and sports coverage is, much of their readership has been despairing at their politics and won’t put up with much more of the same.

The transformation is not, of course, total. In the same edition, in the Review Section, one Stephen Poole criticises Jeremy Corbyn’s reluctance to answer hypothetical questions. The example given was Paxman’s question on whether he, Corbyn,  would order a drone strike on a suspected terrorist. This, of course, was a simple ‘got you both ways’ ploy by Paxman: no possible answer can satisfy the questioner.

The trick in asking a hypothetical question is to imply one set of assumptions and then re-define them in the light of the response. It is the oldest trick in the book and Paxman should be ashamed for indulging his masters by resorting to it. To ask a hypothetical question fairly, the assumptions have to be both stated and comprehensive. Here’s an example of how one question put several times to Jeremy Corbyn should be linked with the assumptions surrounding it.

Question: Would you authorise nuclear retaliation – i.e. push the nuclear ‘red button’?

Assumptions: You are Prime Minister and have survived an attack on Britain with nuclear weapons. Tens of millions of people have been killed. The country is in flames and most of the surviving population are dying of injuries and radiation poisoning. Your military advisors tell you it’s obvious who launched the attack, but, as the first casualty of war is the truth, you cannot be completely sure of this. Similarly, you do not know the purpose of the attack. It could be accidental. You do know, however, that if you retaliate against the nations identified by your military advisers, millions of innocent people will be killed and the resulting nuclear winter will probably render all human life extinct in a matter of years.

Answer : Yes – this indicates you are either a psychopath or lying.

Answer: No – this indicates that you are sane.

But as you won’t have the assumptions stated before the question is asked, the best course of action is to refuse to answer hypothetical questions. Well done, Jeremy Corbyn!

Meanwhile, the best (albeit utterly chilling) advice on what to do following a nuclear attack is contained in the Introduction to Martin Amis’s 1987 book Einstein’s Monsters. There’s a copy to be found here but readers of this blog are recommended to buy a copy of the book which is still available in paperback (Penguin, ISBN 0-14- 010315-5).