Posts Tagged ‘Bonds’

Adolf Hitler on Industry and Nationalisation

December 21, 2018

I’ve put up several articles making the point that the Nazis weren’t socialists, and that the promoted monopoly capitalism. However, Hitler did not want civil servants or Nazi apparatchiks to have interests in business because of the dangers of corruption. His example was the Danube Shipping Company, a private German firm which massively profited by having sitting members of the Weimar government on its board, who then awarded the company very large subsidies.

Some of Hitler’s views on the question of private industry versus nationalization can be found in his after dinner conversations, recorded by Martin Bormann, Hitler’s Table Talk (Oxford: OUP 1988). Hitler said

I absolutely insist on protecting private property.
It is natural and salutary that the individual should be inspired by the wish to devote a part of the income from his work to building up and expanding a family estate. Suppose the estate consists of a factory. I regard it as axiomatic, in the ordinary way, that this factory will be better run by one of the members of the family than it would be by a State functionary-providing, of course, that the family remains healthy. In this sense, we must encourage private initiative.

On the other hand, I’m distinctly opposed to property in the form of anonymous participation in societies of shareholders. This sort of shareholder produces no other effort but that of investing his money, and thus he becomes the chief beneficiary of other people’s effort: the workers’ zest for their job, the ideas of an engineer of genius, the skill of an experienced administrator. It’s enough for this capitalist to entrust his money to a few well-run firms, and he’s betting on a certainty. The dividends he draws are so high that they can compensate for any loss that one of these firms might perhaps cause him. I have therefore always been opposed to incomes that are purely speculative and entail no effort on the part of those who live on them.

Such gains belong by right to the nation, which alone can draw a legitimate profit from them. In this way, at least, those who create these profits – the engineers and the workers – are entitled to be the beneficiaries. In my view, joint-stock companies should pass in their entirety under the control of the State. There’s nothing to prevent the latter from replacing these shares that bring in a variable interest by debentures which it guarantees and which produce a fixed interest, in a manner useful to private people who wish to invest their savings. I see no better method of suppressing the immoral form of income, based only on speculation, of which England to-day provides the most perfect example. (pp. 362-3).

He also believed that the power industry should be nationalized in some way.

It’s obvious that the power monopoly must be vested in the State. That does not exclude the participation of private capital. The State would offer all its securities for investment by the public, which would thus be interested in the exploitation of the monopoly, or, rather, in the favourable progress of State business. The fact is that, when State affairs are not prospering, the holders of certificates can put a cross through their unearned incomes-for the various affairs in which the State is interested cannot be dissociated. The advantage of our formula would be to enable everyone to feel closely linked with State affairs. To-day, unfortunately, most people are not clear-sighted enough to realise the closeness of this link.

What is true of the power industry is equally true of all the essential primary materials – that is to say, it applies also to petroleum, coal, steel and water-power. Capitalist interests will have to be excluded from this sort of business. We do not, of course, contemplate preventing a private person from using the energy of the tiny stream that powers his small works.

In fact, Hitler was resolutely against profit-sharing and anything remotely like worker’s control in industry. He despised socialism, which he reviled as ‘Marxism’ and the trade unions. They were banned, and their members sent to the concentration camps. In their place was the Labour Front and its councils of trustees in factories, which were there to mediate between the workers and management, and to enforce the authority of the latter.

But Hitler is absolutely right about the problems of joint-stock firms. The Korean economist, Ha-Joon Chang, in his book 23 Things They Don’t Tell You About Capitalism, states that one of the problems with shareholder capitalism is that if the firm appears to be in trouble, the shareholders withdraw their money to invest in a better prospect somewhere else. This exacerbates the firm’s troubles. Those enterprises, which are either wholly or partly nationalized, or which have a degree of worker’s control, tend to be much more resilient as the state and the workforce have a greater interest in maintaining it as a ongoing concern.

As for the nationalization of the power and related industries, that was so obviously needed in Britain that when the Labour party nationalized the electricity and coal industries in late forties there was little opposition from the Tories and the Liberals.

Now Hitler’s own ideas on nationalization are very peculiar. He seems to wish to retain some aspects of capitalism after nationalization by allowing people to buy bonds in them. Or something like that. But when Margaret Thatcher was busy privatizing the utilities and everything else she was able to get her grubby mitts on, one of the leaders of the Labour party at the time also suggested that the party should instead look at schemes of issuing bonds in nationalized industries. This would also combine the perceived advantages of privatization with those of nationalization.

This scheme was suggested at the time when Maggie’s privatization programme was popular, or pretended to be. Her aim was to spread corporate ownership far beyond its traditional narrow base in the middle class, hence her reforms of the stockbroking industry. Britain was to become a capitalist nation of small investors.

This dream came to an end over a decade ago. By the early years of this century the Financial Times reported that the ordinary people at whom Thatcher had aimed her share-ownership scheme, had sold theirs and that all, or almost all of them, were once more back in the hands of major investors. In other words, the traditional, property-owning middle class.

Hitler was a monstrous tyrant, whose party plunged Europe into a war which killed forty millions, and who murdered 6 million Jews and 5 1/2 million non-Jews in the hell of the concentration camps. And it shows how far wrong Thatcherite orthodox economic theory is when even he talks sense about some subjects.

Privatisation has failed. It has failed to provide the investment needed to maintain and expand the utilities and other industries, and instead any profit these firms make now go out of the country to their foreign owners. It’s about time this was ended, and the firms renationalized, with their workers given seats on the board and a role in management.

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The Real News on Labour’s Plan For Nationalisation and Workplace Democracy

October 16, 2018

In this 15 minute video from the Baltimore-based The Real News network, host Aaron Mate talks to Leon Panitch, professor of political science at York University about the proposals announced at the Labour party’s conference last month that Labour intended to renationalize some of the privatized utilities, introduce profit-sharing schemes and workplace democracy in firms with over 250 members, in which 1/3 of the board would be elected by the workers.

The video includes a clip of John McDonnell announcing these policies, declaring that they are the greatest extension of economic democratic rights that this country has ever seen. He states that it starts in the workplace, and that it is undeniable that the balance of power is tipped against the worker. The result is long hours, low productivity, low pay and the insecurity of zero hours contracts. He goes on to say that Labour will redress this balance. They will honour the promise of the late Labour leader, John Smith, that workers will have full union rights from day one whether in full time, part time or temporary work. They will lift people out of poverty by setting a real living wage of ten pounds an hour.

McDonnell also says that they believe that workers, who create the wealth of a company, should share in its ownership and the returns that it makes. Employee ownership increases productivity and improves long-term decision making. Legislation will be passed, therefore, for large firms to transfer shares into an inclusive ownership fund. The shares will be held and managed collectively by the workers. The shareholders will give the workers the same rights as other shareholders to have a say over the direction of their company. And dividend payments will be made directly to the workers from the fund.

Commenting on these proposals, Panitch says that in some ways they’re not surprising. McDonnell stated that Labour would inherit a mess. But his remarks were different in that usually governments use the fact that they will inherit a mess not to go through with radical policies. Panitch then talks about Labour’s commitment to bring the public utilities – rail, water, electricity, the post office – public ownership, pointing out that these used to be publicly owned before Thatcher privatized them. McDonnell particularly focused on water, before going beyond it, citing the 1918 Labour party constitution’s Clause IV, which Blair had removed. This is the clause committing the Labour party to the common ownership of the means of production, distribution and exchange, under the best form of popular administration. And unlike previous nationalized industries, these will be as democratically-run as possible. Councils would be set up in the water sector made up of representatives of the local community and workers’ representatives to be a supervisory council over the managers in the nationalized water industry.

They then go to a clip of McDonnell talking about the nationalization of the utilities. McDonnell states that the renationalization of the utilities will be another extension of economic democracy. He states that this has proved its popularity in opinion poll after opinion poll. And it’s not surprising. Water privatization is a scandal. Water bills have risen by 40 per cent in real terms since privatization. 18 billion pounds has been paid out in dividends. Water companies receive more in tax credits than they pay in tax. And each day enough water to meet the needs of 20 million people is lost due to leaks. ‘With figures like that’, he concludes, ‘we cannot afford not to take it back into popular ownership’.

Mate and Panitch then move on to discussing the obstacles Labour could face in putting these policies into practice, most particularly from the City of London, which Panitch describes as ‘the Wall Street of Britain’, but goes on to say that in some ways its even more central to financialized global capitalism. However, Panitch says that ‘one gets the sense’ that the British and foreign bourgeoisie have resigned themselves to these industries being brought back into public ownership. And in so far as bonds will be issued to compensate for their nationalization, McDonnell has got the commitment from them to float and sell them. He therefore believes that there won’t be much opposition on this front, even from capital. He believes that there will be more resistance to Labour trying to get finance to move from investing in property to productive industry.

He then moves on to talk about Labour’s plans for ten per cent of the stock of firms employing 250 or more people to go into a common fund, the dividends from which would passed on to the workers up to 500 pounds a year. Anything above that would be paid to the treasury as a social fund for meeting the needs of British people and communities more generally. Panitch states that this has already produced a lot of squawking from the Confederation of British Industry. Going to giving workers a third of the seats on the boards, Panitch states that it has already been said that it will lead to a flight of capital out of Britain. He discusses how this proposal can be radical but also may not be. It could lead to the workers’ representatives on these boards making alliances with the managers which are narrow and particular to that firm. The workers get caught up in the competitiveness of that firm, it stock prices and so on. He makes the point that it’s hardly the same thing as the common ownership of the means of production to have workers’ sitting on the boards of private companies, or even from workers’ funds to be owning shares and getting dividends from them. Nevertheless, it is a step in the right direction of socializing the economy more generally, and giving workers the capacity and encouraging them to decide what can be produced, where it’s produced, and what can be invested. And if it really scares British and foreign capital, this raises the question of whether they will have to introduce capital controls. Ultimately, would they have to bring the capital sector into the public sphere as a public utility, as finance is literally the water that forms the basis of the economy?

Mate then asks him about Labour’s refusal to hold a second referendum on Brexit, which angered some activists at the conference. Labour said that any second referendum could only be about the terms of the exit. Panitch states that people wanting Britain to remain in a capitalist Europe try to spin this as the main priority of the party’s members, even Momentum. He states that this is not the case at all, and that if you asked most delegates at the conference, most Labour members and members of Momentum, which they would prefer, a socialist Britain or a capitalist Europe, they would prefer a socialist Britain. The people leading the Remain campaign on the other hand aren’t remotely interested in a socialist Britain, and think it’s romantic nonsense at best. He states that the Corbyn leadership has said that they want a general election as they could secure an arrangement with Europe that would be progressive without necessarily being in Europe. They would accept the single market and a progressive stand on immigration rather than a reactionary one. They did not wish to endorse a referendum, which the Tories would have the power to frame the question. And this is particularly because of the xenophobic and racist atmosphere one which the initial Brexit vote was based. Panitch states that he is a great critic of the European Union, but he would have voted to remain because the debate was being led by the xenophobic right. He ends by saying that capital is afraid of the Trumps of this world, and it is because of the mess the right has made of things here in Britain with the Brexit campaign that capital might give a little bit more space for a period at least to a Corbyn government.

This latter section on Brexit is now largely obsolete because Labour has said it will support a second referendum. However, it does a good job of explaining why many Labour supporters did vote for Brexit. The editor of Lobster, Robin Ramsay, is also extremely critical of the European Union because of the way neoliberalism and a concern for capital and privatization is so much a part of its constitution.

Otherwise, these are very, very strong policies, and if they are implemented, will be a very positive step to raising people out of poverty and improving the economy. Regarding the possibility that the representatives of the workers on the company boards would ally themselves with capital against the workers, who put them there, has long been recognized by scholars discussing the issue of workers’ control of industry. It was to stop this happening that the government of the former Yugoslavia insisted that regular elections should be held with limited periods of service so that the worker-directors would rotate. Ha-Joon Chan in his books criticizing neoliberal economics also makes the points that in countries like France and Germany, where the state owns a larger proportion of firms and workers are involved in their companies through workers’ control, there is far more long-term planning and concern for the companies success. The state and the workers have a continuing, abiding interest in these firms success, which is not the case with ordinary investors, who will remove their money if they think they can get a better return elsewhere.

My concern is that these policies will be undermined by a concentrated, protracted economic warfare carried out against the Labour party and the success of these policies by capital, the CBI and the Tories, just as the Tories tried to encourage their friends in industry to do in speeches from Tweezer’s chancellors. These policies are desperately needed, but the Tory party and the CBI are eager to keep British workers, the unemployed and disabled in poverty and misery, in order to maintain their control over them and maximise profits.

Chris Hedges on the Pathology of the Super Rich

January 20, 2016

I’ve written a number of pieces about the psychology of the rich, and how they seem driven by a deep psychological desire to degrade, humiliate and harm those less fortunate than themselves. In this video below, the American Socialist journalist Chris Hedges and the programme’s host, Paul Jay, discuss that same issue, which they term the pathology of the super rich. The video comes from the TV series Reality Asserts Itself, which seems to be partly funded through donations from the public, for which Jay appeals at the end.

The programme begins by looking back to a previous programme, in which Hedges and Jay discussed the weakness of the modern Socialist and labour movement in America. They stated that part of this was its failure to articulate a viable Socialist vision of an alternative to the corporate system. They go on to suggest that one of the gravest weaknesses in this lack of vision was the inability to grasp the pathology of the rich. They talk about how American society magnifies and practically deifies the rich, and state that we need to recover the language of class warfare. We need to reject the lie, repeated by Obama, that if we work hard enough and study hard enough we can be one of them. The issue isn’t intelligence. The present economic mess was created by some of the most intelligent, best educated people in the country. It’s greed.

Hedges states that his hatred of authority and the elite comes from his own experience of winning a scholarship to an elite school. He’s middle class, but part of his family were lower working class. One of his grandfathers even at times lived in a trailer. The rich have the best education, but its aim is teaching them how to rule. He states that if you’re poor, you only get one chance to make it. The rich are presented with multiply chances. He cites George Bush, and his history of failure, and how, after he managed to get an academic career despite poor grades, he finally got a job at 40: running the country. There is a small, tight elite circle which protects itself and promotes mediocrity. We are now utterly powerless before them, because the oligarchic elite own the broadcasters and the press.

In their world, everyone is there to serve them. When Hedges was at school, he saw how his friends, themselves only 11-12 years old, spoke to adults, ordering around their servants and parents’ employees. He talks about the fabled quip of Hemingway to Fitzgerald. Fitzgerald had said ‘The rich aren’t like us.’ To which Hemingway replied, ‘No, they’re richer’. But this was an instance where Hemingway was wrong, and Fitzgerald right. And Fitzgerald saw it, as he himself had made his way up from the mid-West and saw how decadent and corrupt the elite were. Hedges states that when you have their vast amounts of money, you see people as disposable, even friends and family, and now the citizens, who are required to fight in wars. They live in a bubble where only working class people they see are those, who work for them. They don’t even fly on commercial jets. They’re thus extremely out of touch, and retreat even further from everyone else into enclaves like Versailles under Louis XIV and the Forbidden City under the Chinese emperors. They will continue to extract more and more from society, because they have no idea of the harm they’re causing.

Hedges talks about the Occupy Movement, and the impoverishment caused by student debts that now can never be repaid, which students facing higher interest rates than if they’d gone to a bank. Half of America is officially on or below the poverty line. Yet the government is helping Goldman Sacks by buying junk bonds, which are so worthless they’ll eventually wreck the economy. The government’s response, on behalf of the rich, is to cut unemployment benefits and food stamps and close the Headstart programme. Some of the children of the super rich are waking up to the reality, and joining the Occupy movement, but it’s a tiny minority.

The two also discuss Gore Vidal’s comments about the amorality of the super rich. They state that he should know, both from his own life and the world he moved in. Hedges states that when he was at the boarding school, most of the fathers actually had very little contact with their sons. But they would turn up in their cars, sometimes with their mistresses, and their staff photographers to show them playing happily with their sons. He states that there’s a type of racism there, in that while they were happy to create this illusion for their own family, they treated the working class very differently. They believed that they should have to send their sons to fight foreign wars. Jay makes a comparison with the British enslavement of the Irish, and states that this shows you don’t have to be Black to be enslaved.

Apart from hating the working class, the rich also have a great disdain for the middle class, which Hedges himself found quite shocking, himself coming from a middle class background. The rich on their part have a very sophisticated PR machine, and polish their image with very well-publicised acts of philanthropy, while the reality behind the scenes is very different. Hedges talks about Karl Marx’s statement that the dominant ideology is really the idealisation of existing class and economic relationships. The free market ideology now dominant across America is just a very thin rationale for the elite’s greed. This is now taught right across the country, but is just used to justify the hoarding of immense wealth by the elite. The lie of globalisation – that it will give further prosperity to the middle class, give proper, just remuneration to the working class and lift the people’s of the Developing World out of poverty is a lie that has already been exposed multiple times. This ideology and the intellectual class serve the system. Those economists, who don’t teach the lie, don’t get jobs.

He talks about how the corporate system is ‘socialism for the ruling class’. The corporations loot the treasury, but demand to be bailed out by the taxpayer. There is a complete disconnection between language and reality, as America has been robbed of the very language and discourse to attack this process, even though the corporations are predators on the taxpayer’s money. The bonds now being bought up by the US government include mortgages for foreclosed properties. On paper these are worth perhaps as much as $600,000, but they would need a lot of work to realise that amount due to damage to their electrical systems and flooding.

Hedges and Jay also talk about how, although America now thinks of itself as a centre-right country politically, this wasn’t always the case. Before the Second World War there was a proper liberal, working class movement and debate in the country about what kind of society it would be. This was destroyed through McCarthyism and the House Committee into Un-American Activities. And it was very successful, as Hedges himself has documented in The Death of the Liberal Class. Hedges talks about how he states in one of his books that Karl Marx was right, and that the class struggle does define most of human history. And yet one cannot discuss this on any other American channel. If you did so, you’d be accused of being un-American. Hedges states that the class struggle is at the heart of American corporatism, and that if he were head of a Wall Street company, he would only employ Marxian economists as they understand that capitalism is all about exploitation.

Hedges then states that America is the most ‘illusioned’ society on the planet. The system is such that it whitewashes and humanises even idiots like Donald Trump to disguise what they’re doing to us. The corporations spend an immense amount – billions upon billions – on PR. From their publicity, you’d think BP were Greenpeace, despite the devastation they’ve cause in the Gulf of Mexico, including the poisoning of the fish and seafood, which is then sold to American consumers. No broadcaster, however, is going to make a documentary on this because the corporate elite own the broadcasters.

The only choice in Hedges’ view is go back to Aristotle, and revolt, as the mechanisms for incremental change are no longer functioning. FDR’s New Deal for a time acted as a safety valve, but his has been destroyed. Change for the working and middle classes can’t be done through the existing political parties or the courts. What is needed is to create new parties and mass movements. The elite can’t even stop the dangerous speculation that threatens their own prosperity. He states that the people, who run Wall Street know that another, worse collapse is coming, and are just intent on stealing as much as they can before they run out the door. The head of the private healthcare company, Universal Healthcare, last year (2013) made over $100 million. All the elite are interested in is amassing their tiny empires.

Hedges states that this is symptomatic of a dying civilisation. He quotes Marx on the psychology of the super rich. When asked what it was, Marx said, ‘Apres moi, le deluge’ – ‘After me, the floods’. They know society is going to be toast, and are just concerned to loot as much as they can before it goes under. Then they think they can retreat to their gated communities, and survive. Well, they might live a little longer than everyone else, but even that’s debatable to the damage to the Earth’s ecosystem and massive climate change. The ecological harm may already be too much to avert the extinction of the human race.

Hedges views are a little too extreme for me. I don’t think the opportunities for resistance within the system are already too far gone. Bernie Sanders in the US and Jeremy Corbyn over here offer some hope of effecting radical change within the system. But apart from that, I agree with just about everything he said. The rich are rapacious and completely uncontrolled, as you can see from the behaviour of Cameron, Osborne, IDS and the rest of the Tories.

But listen to Hedges yourself, in the video below.