The Fascist Argument Against Free Market Capitalism

I notice that as the failure of contemporary free market capitalism becomes every more obvious, its right-wing supporters are out on the net telling everyone how wonderful capitalism is. Capitalism, according to them, has lifted more people out of poverty than any socialist state has ever done. You find this repeated by the Lotus Eaters, and I recent found yet another video on YouTube put up by a right-winger.

Now there is something to this. Marx in the Communist Manifesto was impressed by the global achievements of capitalism, and industrialisation and trade has produced development and prosperity in Britain, the West and elsewhere, and lifted people out of the poverty of agricultural subsistence economies. But this hasn’t been done by capitalism alone. Trade unions have also been part of the development of mass prosperity in the industrialised nations through demands for increased wages, better working conditions and so on, a fact ignored by the right. And working people in the west enjoyed their greatest period of prosperity when capitalism was regulated as part of the post-War consensus. In Britain this took the form of a mixed economy in which the utilities were owned and operated by the state. The privatisation of these utilities, the devastation of the welfare state and the deregulation of the economy has led to a massive transfer of wealth upwards, so that the poor have become colossally poorer and the wealth of the rich even more bloated and obscene. Properly regulated, capitalism does raise people out of poverty. But free market capitalism, of the kind frantically promoted by right-wingers like the Lotus Eaters, has done the reverse.

But let’s grant them that the 19th century was an age of industrial and agricultural expansion in which people enriched themselves. Mussolini expressed this view in his speech about the corporative state he was introducing into Italy. The fascist corporations were industrial organisations, one for each industry, which included representatives of the trade unions and the owners’ organisations. The Italian parliament was dissolved and reorganised into a Chamber of Fasces and Corporations, in which these organisations were supposed to debate economic policy. In fact, it just served as a rubber stamp for the Duce’s decisions. It was, however, important for propaganda purposes, to show that Mussolini’s regime had transcended capitalism and socialism.

The Fascists weren’t enemies of capitalism, far from it. Mussolini’s constitution made private industry the basis of the state and economic life, which is why I’m using it his critique of free market capitalism against the free marketeers. Mussolini had been a radical socialist, but when the Fascists seized power he declared them to be true followers of Manchester School capitalism. In other words, free trade. This was accompanied by a programme of privatisation. In Germany Hitler gave a speech to the German equivalent of the Confederation of British Industry, saying that capitalism could only be preserved through a dictatorship. He stated that he would not nationalise any company, unless it was failing. During the Nazi dictatorship industry was organised into a series of interlocking associations subject to state control. But they were not nationalised, and the leadership of the organisations was always given to private industrialists, not the managers of state industries.

Back to Italy, Mussolini described how this initial period had begun to decay. The old family run firms declined, to be replaced by joint stock companies. At the same time, firms organised themselves into cartels. In America, these cartels demanded intervention from the government. Mussolini announced that, if left unchecked, this would lead to the emergence of a state capitalism that was every bit as pernicious as state socialism. His solution was that capitalism needed to be more ‘social’. It would be subordinated to the state through the corporations, where workers and management would cooperate to make Italy a great power once more.

Something similar has happened over the past four decades. Under this new corporativism, representatives of private industry have entered government as advisors and officials, often in the departments charged with regulating their industries. At the same time, industry has received massive subsidies and tax breaks so that much of the tax burden has moved lower down on working people. Mussolini was correct about private industry demanding state intervention, however much this is denied and state planning attacked by free market theorists. And the result is corporativism, which the free marketeers denounce as not being true capitalism. But it’s been pointed out that the type of capitalism they believe in has never existed.

Free market capitalism is a failure. The solution is not a murderous dictatorship, but the old, regulated, mixed economy of the social democratic consensus. An economy that includes private industry, but which recognises that it alone does not create wealth, and which demands the inclusion of working people and their organisations in industrial negotiations and policies in order to create prosperity for working people.

Another Belfield Video of Flailing Boris at the CBI

I’ve already posted up one video from mad right-wing radio host Alex Belfield showing Boris Johnson making a fool of himself in a speech to the CBI. Instead of giving his speech as planned, Johnson went on about Peppa Pig while riffling through his notes. A similar video from the Scum apparently had the obnoxious clown making car noises as well. Well, he used to be a motoring journalist. I was once told by friends of mine in Bridgwater that there was a poor chap down there, who was convinced he was a car. This poor, deluded soul apparently used to pull up all by himself, sans motor vehicle, as a car at petrol stations. Perhaps the pressure has got to Johnson, and we can similarly expect him to go on his merry way making ‘brm brim’ noises while handling an imaginary steering wheel.

There was speculation that Johnson had only pretended to lose his place and his sanity as a diversion from his wretched Health and Social Care bill, which is the next step in the privatisation of the NHS. If that’s the case, then it really hasn’t gone as planned. Yes, the media weren’t talking about how the NHS is to be broken up into 42 different organisations, with the heads of private healthcare firms sitting on the boards. But it did generate much speculation about the state of Johnson’s health and his competence to run the country. Now, according to Mike today, a number of Tory MPs have sent in letters stating that they have no confidence in the buffoon. Mike states that it only needs 15 per cent of Tory MPs to make similar complaints, and the issue has to go before parliament. Bozo could be on his way out.

Unfortunately this won’t mean the end of vile Tory rule, as his replacement will almost certainly be another ghastly neoliberal determined to destroy the NHS and welfare state, and reduce working Brits even further into poverty while muttering mantras about how great Brexit is. But in the meantime we can enjoy the spectacle of a really flailing, desperate Bozo.

Belfield is as Tory as Johnson, but as an opponent of the lockdown bitterly hates Johnson for imposing it. Which is actually just about the only good thing his government has done, and even that was too late. Never mind – it’s great watching the hate Belfield has him. The video’s titled ‘No, I’ll Never Forgive You Boris 🤬 Script Fail Or Schtick? Are You OK Prime Minister?’ No, I don’t intend to forgive him either, nor any of the other Tories. To quote Torquemada, the grandmaster of Termight from 2000 AD’s ‘Nemesis the Warlock’ strip, ‘Never forgive, never forget, never for fun’. Yeah, I realise that the slogan’s also a satire on the National Front, who fully deserve it and worse. But it should also apply to the Tories for their tyrannous misrule.

Bozo Waffles About Peppa Pig While Looking For His Speech to the CBI

More evidence that sections of the Tory party are turning against our noxious, buffoonish excuse of a PM. I caught on the internet news feed today a headline quote Dominic Cummings as saying that Starmer’s a dud, and Boris won’t be around much longer. The Scum has put up a video of Johnson making car noises, raving about Peppa Pig and looking for his speech. And mad right-wing internet radio host Alex Belfield has put up this video of the overprivileged, overpaid and overpromoted mendacious clown waffling on about Peppa Pig while riffling through the papers for his speech. His title is ‘Speech: Boris Loves Peppa Pig Best Idea in Decades (Cuckoo/Lost Marbles)’.

Boris got where he is partly through a carefully crafted image as a lovable clown. It didn’t matter what stunt he pulled, how stupid he looked, he seemed to take it all with good humour at his own expense. And all the time the loyal Tory press were trying to present him as the greatest Tory politician since Edmund Burke, Robert Peel, Churchill and Thatcher. Now it seems their patience is really wearing thin, and like the rest of us they’re sick of his idleness and gross ineptitude. Unfortunately, they don’t seem to be sick of his viciousness towards the poor, the sick, the unemployed and disabled, his determination to sell off the NHS and his continued support for the decaying wreck of Thatcherite zombie economics. Attitudes which Johnson and the Tories also share with Rachel Reeves and Keir Starmer.

There’s only one solution: end Thatcherism. Get the Tories out of government, and Starmer out of the Labour Party.

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

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.

Corbyn Will Re-Introduce Collective Bargaining and End Zero-Hours Contracts

This looks like a piece of very good news. According to Mike, Jeremy Corbyn plans to repeal the laws passed by Blair’s government in 1999 limiting workers’ rights to have a recognised trade union, and end zero-hours contracts.

Corbyn wrote a piece in the Observer stating that he felt the changes were necessary due to the scandals over Sports Direct, Philip Green and BHS, and the Byron Hamburger chain to help immigration officials arrest 35 illegal immigrants, who were working for them.

At the moment, current legislation stipulates that a union wishing to be recognised at a workplace must show that 10 per cent of employees are members, and 50% want them to lead in pay bargaining. If that isn’t the case, then a secret ballot must be held, at which at least 40% of those able to vote do so, and the majority vote in favour of union recognition.

Corbyn, however, wants to introduce a French-style system, in which firms with over 250 members would have to recognise a specific trade union, and bargain with them over pay. He states

“Even Theresa May understands she has to pay lip service to change in the workplace and the boardroom …,” writes Corbyn.

“But the best way to guarantee fair pay is through strengthening unions’ ability to bargain collectively – giving employees the right to organise through a union and negotiate their pay, terms and conditions at work,” he writes.

“That’s why it should be mandatory for all large employers, with over 250 staff, to bargain collectively with recognised trade unions.”

Corbyn also states that he wants all workers to be given specified hours, that are written into their contracts. If an employer wants them to work beyond these hours, they are to specify the length of time and give them a reason. They will also have to give workers additional compensation, similar to an on-call payment, for being willing to work beyond their usual contracted hours, whether the workers in fact do so or not.

Mike is unsure about the wisdom of the reforms on union recognition, and would like comments on this matter from experts on trade union matters and employment law. However, he welcomes the proposal to end zero-hours contracts.

See http://voxpoliticalonline.com/2016/07/31/corbyn-pledges-to-scrap-blair-union-laws-in-favour-of-collective-bargaining-and-an-end-to-zero-hours-contracts/

The decision to end zero-hours contracts is an excellent policy. Guy Standing devotes several pages in his book, A Precariat Charter, to attacking them. They are widely recognised as a highly exploitative and pernicious system of employment for those trapped in them.

Stewart Lansley and Joanna Mack make clear that the assault on collective bargaining and the trade unions was a deliberate policy of Maggie Thatcher, and has resulted in the contraction of wages, high unemployment, and the impoverishment of the working class in their book, Breadline Britain: The Rise of Mass Poverty(London: OneWorld 2015). They write

Deteriorating opportunities are also the direct product of an about-turn in the country’s political economy. At the end of the 1970s, fighting the rising rate of inflation became the number-one economic goal, displacing the former priority given to maintaining full employment. The instruments used – tight monetary and fiscal policies and a strong pound – accelerated long-term de-industrialisation, while triggering mass unemployment. The critical decision in the 1980s to adopt a more aggressive, market-oriented model of capitalism led to the sweeping away of regulations, the favouring of finance over manufacturing, the outsourcing of public sector jobs, relentless pressure on companies to cut labour costs and, critically, an assault on labour’s bargaining power.

Cabinet papers for 1983 reveal that Mrs Thatcher admonished Norman Tebbit for being too timid on trade union reform, telling him we ‘should neglect no opportunity to erode union membership’. In Britain the proportion of the workforce covered by collective bargaining has fallen from around eighty percent in 1979 to below twenty-five percent today (fifteen percent in the case of private sector workers). This is one of the lowest levels of coverage among rich nations, adding to the heavily skewed and economically unhealthy concentration of corporate power. The UK stands at twenty-first place out of twenty-seven countries in the European Union in terms of workplace representation, though parts of the European continent are also seeing more recent falls in the level of coverage, though from a much higher base.

Britain’s much vaunted ‘flexible labour market’, engineered during the 1980s to give business greater freedom to hire and fire, was necessary, it was claimed, to enable domestic firms to compete in an increasingly globalised economy. Such freedom for employers has continued to be championed by subsequent governments. Yet, just as over-restrictive labour laws can be bad news for dynamism, so can under-restrictive laws.

Britain’s low-wage, high-unemployment economy is as much the product of these internal, political forces as of external, economic ones. Indeed, it was later admitted by one of Mrs Thatcher’s top economic advisers that one of the government’s central aims was the taming of labour. ‘The nightmare I sometimes have about this whole experience runs as follows … there may have been people making the actual policy decisions … who never believed for a moment that this was the correct way to bring down inflation. They did, however, see that it would be a very, very good way to raise unemployment.’ This was how Sir Alan Budd, chief economic adviser at the Treasury in the 1980s, summed up – in 1992 – the multilayered assault on inflation and the unions. He continued: ‘And raising unemployment was an extremely desirable way of reducing the strength of the working classes…what was engineered there, in Marxist terms, was a crisis of capitalism which created a reserve army of labour and has allowed the capitalists to make high profits ever since.’ (pp.101-3, emphasis mine).

They further write on page 242

Perhaps the most effective, and radical, measure for boosting the total wage pool at the bottom would be a rebalancing of bargaining power in favour of the workforce. Another would be a more concerted attempt to reduce the significant pay gap between men and women by raising women’s wages. Both measures would raise the share of national income going in pay and would be critical elements of an effective strategy for cutting poverty levels among the workforce.

Far from being a strength, the sustained decline in workforce bargaining power in the UK is an economic and democratic weakness. Because of the ‘wage premium’ associated with collective bargaining, this erosion of labour’s bargaining power has played a big role in wage contraction. Evidence across sixteen rich countries has shown that the higher the level of trade union membership, the lower the degree of inequality. Further, it is likely that the erosion may have encouraged British employers to move down a low-pay and productivity road. By being able to minimise pay and rely on casualised labour, British employers – unlike say their German counterparts – have had few incentives to improve skills and introduce more productive processes.

Phased in over time, such a policy mix – a boost to the minimum wage, a reduction
in the numbers on less than the living wage, wider collective bargaining coverage and lower unemployment – would put the thirty-year long trend of a shrinking wage share into reverse, and make an important contribution to reducing poverty among the low-paid, while taking some of the strain off the benefit system.

Corbyn’s decision to expand and strengthen collective bargaining therefore appears from this to be an excellent measure. It will also doubtless be attacked by the Confederation of British Industry and the right-wing press and Blairites with just about every ounce of abuse they can muster. We’ll hear once more about how this will threaten British businesses with bankruptcy, and how this will lead us all back to the strike-torn 1970s, the Winter of Discontent, and all the old Thatcherite rubbish. The reality is that Britain was no more strike-prone in the 1970s than many other countries, and much less so than America. And the Winter of Discontent was, in the views of at least one historian I’ve read, the response to the system of wage restraint buckling under the weight of political pressure it was not designed to deal with, and which the unions should not have been expected to shoulder.

Of course, the real reason for the rage at the reinstatement of collective bargaining and the ending of zero-hour contracts will be that it attacks the nearly forty years of exploitative Tory employment policies that Maggie introduced. These employment practices have caused real misery, just as Thatcher and the economists she followed, von Hayek and Milton Friedman, intended them to. They should end now.