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

ART AS PORTABLE WEALTH

There is still a week left until the exhibition Picasso 1932 at Tate Modern ends on 9 September. It is highly recommended. Picasso was, after all, “one of ours” – a member of the Communist Party whose art is still loved and appreciated today by ordinary working people despite the not entirely unsuccessful attempt to de-politicise modern art with the cold war promotion of abstract expressionism.

Going round the exhibition, it is, however, noticeable how many of the exhibits are on loan from private collections. Artists, even successful ones who go on to join the Communist Party, have, of course, to earn a living and, under capitalism, that means selling their work in the first instance to dealers and wealthy patrons. It is perhaps therefore not surprising that so many end up on the walls, yacht bulkheads and bank vaults of the super-rich. According to Wealth X, the world’s 2,170 billionaires own collections worth $31 million, representing 0.5 per cent of their net wealth; and the world’s top ten billionaires hold a huge 18 per cent of their wealth in this way. Comrade Picasso’s contribution to this haul is likely to be significant.

The attractions of “art” to the super-rich (and to criminals) are obvious. Art, provided it is not replicable, can be used as portable wealth; is delightfully offshore and thus under the radar of tax authorities and the police; easily convertible into cash via the auction houses of the world; capable of significant tax free capital accumulation provided the pitfalls of changing public taste are anticipated; and a perfect security for loans for more productive capital investment. Add to this the political capital to be gained from occasional loans to public galleries and the creation private foundations and art really is the perfect investment for the super-rich.

What is to be done? It’s our tastes and our enthusiasms as ordinary people, i.e. as workers, that give works of art their exchange value. Without this their price would be minimal – no more than the value of the labour time it took to make them. There’s no easy solution – perhaps none at all in the context of our existing social system – but some alleviation of the problem would be achieved by

  • an international register of private wealth, open to inspection and maintained by the UN
  • the introduction in the UK of a wealth tax and the restoration of a compulsory inheritance tax – the current one is minimal and voluntary;
  • more education to train artists in our schools and colleges; and
  • more financial support for our art galleries.

Are these modest proposals too much to ask?