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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EDUCATION NOT FOR SALE?

Much publicity has been given recently to reported Lib Dem disquiet over what Education Secretary Michael Gove has been up to at the Education Department. After four years silent complicity, this is a little rich.

In another development, the TUC has just published an 85 page report entitled Education Not for Sale. It’s presumably unrelated to the Lib Dems concern as they are generally as uninterested in what the TUC has to say as the Tories and Labour. The TUC report concludes that the continuing marketization of education through Gove’s academy and free school programme is moving England’s schools system from democratic, local authority control to a more fragmented, less democratic structure. The TUC report is also concerned that the power to take major decisions over the direction of both individual schools and of the education system as a whole now rests with a few individuals: the Secretary of State and those who own academy chains. As the report observes, free schools were supposed to be locally developed by parents, teachers and community groups, but are now more likely to be handed to academy chains.

The TUC report is notable for the cautious and tentative nature of its conclusions. Yet the Anti-Academy Alliance, the NUT and the Communist Party have all campaigned vigorously against academies since they were introduced by New Labour under cover of the Education, Education, Education mantra.

Democratic control and accountability of state education depended crucially on Local Education Authorities (LEAs). These bodies of experts and administrators provided training, expertise, advice and funding to state schools and were accountable to the electorate through council elections. Their undermining began under New Labour. The Tories under Gove’s direction, and with the supine Lib Dems carried along in their wake, have simply finished off the job.

Comments by Labour candidates in the forthcoming local government elections confirm the impression that they have no appreciation or understanding of the problem their party has helped cause and of what must be done to remedy the situation. The Communist Party solution is to kick the profiteers out of education and return it all to democratic control. We also need to start trusting teachers and stop telling them in minute detail what to teach and how. We should pay them properly, give them job security through a local authority contract and we should tax private education institutions, the so called public schools, until they go out of business. A Land Value Tax and a Wealth Tax on individuals would be most effective in this respect. Finally, we need to provide the incentive to school students of guaranteed financial support when they progress to colleges of further education and universities, not saddle them with student loans. Further and higher education must not become once more the preserve of the rich. We don’t expect anything from the Lib Dems, but, if the TUC won’t speak up for working people in this way, the Communist Party will.

Martin Graham