The Rich Get Richer, the Poor Get Poorer

The independent think tank, the Resolution Foundation, has just published a new report, Who Gains from Growth?, which reveals the alarming extent to which living standards for low and middle-income households will tumble by 2020 – even if the economy improves – while the rich get steadily richer. The report makes the case well for tackling the growing polarisation between the richer and poorer halves of the country through better vocational training, subsidised childcare and a living wage. These are all worthwhile objectives.

But as long as capital is free to relocate jobs to countries where wages are lower, the spoils of growth go largely to top earners and the Government favour finance over manufacturing, then these remedies can only have a limited effect.

As Marx pointed out, the production of surplus value underpins capital accumulation, and the immiseration of the working class necessarily follows. With the end of the post-war boom – when wages rose steadily, but which can now be seen as the temporary blip it was always going to be – this process can be witnessed in the steady reduction in the share of GDP going to wages over the last 30 years in the US and Britain as a rising proportion goes to profits. The adoption by Labour  of policy to introduce a more progressive tax system, develop a proper industrial strategy and, who knows, even re-introduce capital controls, would be a significant step in the right direction. Of course, this would require radical decisions, but perhaps we can see the People’s Charter become a rallying call across the movement!

Chris Guiton

A Progresssive Alternative to the EU

The debate on the left about the merits of continued membership of the European Union is often clouded by considerable naivety about the scope to reform the EU from within and shift it in a more progressive direction. The chimera of a ‘Social Europe’, promoted in the 1980s by Jacques Delors, then President of the EU Commission, did much to foster this confusion. But we should be under no illusions about the possibility of changing the EU into an organisation defined by social justice and fairness. The EU is using the financial crisis to intervene ever more decisively in the economies of member states, in favour of monopoly capital and the wealthy and to the detriment of ordinary people.

The recent speech by European Commission president Jose Manuel Barroso, in which he outlined his vision for a federal Europe, with full fiscal and political union to be delivered via a new EU Treaty, is simply the latest step in the forced march towards a near-total loss of national sovereignty over internal economic affairs.

I wonder if part of the problem when discussing these issues in progressive circles rests with the confusion in some people’s minds between a legitimate sense of internationalism and interest in European culture on the one hand and a failure to recognise the capitalist underpinning of the EU on the other; allied with a degree of nervousness about being associated with the reactionary, knee-jerk xenophobia and chauvinism of UKIP and others on the right.

But there are sound, progressive reasons for wanting to leave the EU and reshape our economy on the lines of the People’s Charter. Samir Amin has just written a thoughtful article in Monthy Review, which is a useful contribution to the debate, available at:

And, of course, if you haven’t read it already, do get hold of a copy (now updated) of John Foster’s pamphlet, ‘The European Union: for the Monopolies, against the People’, available from Party HQ, for an excellent discussion of the history of the EU and the implications of continued membership.

Chris Guiton