Posts Tagged ‘OECD’

Corbyn: The Strange Rebirth of Radical Politics

April 5, 2017

by Richard Seymour (London: Verso 2016).

I bought this last Friday, as I wanted something that would help me refute the continuing lies about the Labour leader: that he is a Trotskyite, his supporters have infiltrated the party, and that he is too left-wing to lead the Labour party to victory in 2020. The book does indeed provide plenty of information to refute these accusations, though I’m not convinced of its over all thesis. The book’s blurb states that Corbyn’s election as leader is just the latest phase in the party’s degeneration. Flicking through the book, it appears that his main point is that the Labour party has never really been a Socialist party, and that apart from the great victories of Clement Atlee’s administration, it’s record has been largely one of failure as it compromised its radical programme and adopted conventional, right-wing policies once in office. At one point Seymour describes the idea of Labour as a Socialist party as a ‘myth’.

I was taught by historians, who did believe, as Seymour does, that the British Labour party was influenced far more by 19th century Nonconformist Liberalism than by continental Socialism. And certainly when Labour took power in the 1930s, it did disappoint many of its voters by following the-then economic orthodoxy. There is a difference between Labourism and Socialism. However, the party included amongst its constituent groups both trade unions and Socialists, and stated so. However, I haven’t read the sections of the book where Seymour lays out the arguments for his view that the Labour party is degenerating – along with, he says, western democracy. But he does have some very interesting things to say about Corbyn’s supposedly ‘Trotskyite’ views, and the whole nonsense about Far Left infiltration of the party.

Corbyn’s parents were middle class radicals, who met when they were campaigning for the Republicans in the Spanish Civil War. Growing up in rural Shropshire, he worked on farms. He was radicalised while working as a volunteer for Voluntary Service Overseas in Jamaica, where he became aware and appalled by ‘imperialist attitudes, social division, and economic exploitation.’ He was a trade union organisers for the National Union of Tailors and Garment Workers, and then the National Union of Public Employees. He’s teetotal, and did not take part in the ‘hedonistic pleasures of the counterculture’. He is a member of the Bennite wing of the Labour party, the Socialist Campaign Group, which Seymour states has consistently opposed the government regardless of whichever party is in office.

His former partner Jane Chapman states that he is ‘very principled, very honest … a genuinely nice guy.’ Since 1983 he has been the MP for Islington North. Seymour notes that even his most ‘sceptical’ biographer, the Torygraph’s Rosa Prince, acknowledges that he ‘is known as a “good constituency MP”‘. He takes great pains to help his constituents, and is ‘universally considered to do an exemplary job’.

Apart from being anti-austerity, he has also actively campaigned against attempts to limit immigration, and rejects the New Labour tactic of trying to take on board some of UKIP’s militant nationalism. His first move as the new Labour leader was to attend a pro-refugee rally in London.

His other policies are left-wing, but not extreme Left by a very long way. Seymour writes

The agenda on which Corbyn was elected is not, however, the stuff of which revolutions are made. he has pledged to end austerity, and in its stead implement a People’s Quantitative Easing programme, with money invested in infrastructural development, job-creation and high-technology industries. Canadian Prime Minister Justin Trudeau won office on an agenda like this. Even the OECD is anti-austerity these days. He promises to address the housing crisis through extensive home-building, to fully nationalise the railways, and to bring all academies back under local democratic control. These objectives are to be funded, not so much by squeezing the rich like a sponge to water the gardens of the poor, as by closing tax loopholes, stimulating growth, and spending less on controversial programmes like Trident.

This is in most ways a classic social-democratic remedy, which could easily have come with some Wilsonian vocables about ‘the white heat of technological revolution’. The problem for the establishment is not necessarily Corbyn’s agenda. It may be too radical for today’s Labour party, today’s media and today’s parliamentary spectrum, but business could live with it, and the consensus would shift if Corbyn gained popular support. (pp. 8-9)

So where did this bilge that he was a Trot come from? Some of it came from the fact that his rallies were partly organised an attended by ‘accredited helpers’, people who were not Labour members, but who gave their time and effort alongside those who were. The only evidence that there was a ‘far left plot’ was the call by a tiny Marxist grouplet, the Communist Party of Great Britain. This has only 24 members, at the most, and whose weekly news-sheet is regarded as the Heat magazine of the Far Left. (P. 30).

So where do the new members comes? Many of them are simply Labour members, who drifted away or became inactive thanks to the managerial, autocratic attitude of the New Labour leadership. They were tired of being ignored, and regarded only as useful for leafletting and so on. And what really annoyed many grassroots members was the scripts the leadership insisted that canvassers should follow when talking to people on doorsteps. A significant number are also young people, who have joined the Labour party because for the first in a very long time there is actually a leader, who means what he says and talks straight in language ordinary people can understand, rather than the waffle and management-speak that constitutes the rhetoric of his right-wing opponents.

Much of the hostility against him in the press and the New Labour coterie comes from his support from two of the largest trade unions, Unite and Unison, which has had the Sunday Times and other rags screaming hysterically about the threat of renewed union militancy.

But what really terrifies the Right – including the Blairites – and the media-industrial complex, is his style of campaigning. Blair and the other parties adopted a style of government based on industrial management, using focus groups, and with news and the party’s statements all carefully marketised and timed according to the news cycles. Corbyn doesn’t do this. He actually turns up at rallies and events up and down the country, and speaks to the people. Corbyn himself said that he went to 100 meetings during his leadership campaign, and by the end of that year would have gone to 400-500. (P. 7). Seymour states that on one Saturday in August, Corbyn spoke to 1,800 people in Manchester, 1,000 people in Derby, 1,700 in Sheffield’s Crucible and a further 800 outside. By the end of the month 13,000 people had signed to volunteer for his campaign. 100,000 people signed up as registered supporters, and 183,658 as active members of the Labour party.

Like his American counterpart, Bernie Sanders, Corbyn is also massively popular on social media. Marsha-Jane Thompson states that within four weeks of setting up his Facebook page, they went to 2.5 million people. The page reached 11 million people every day. As a result of this, when they announced a meeting in Colchester on Facebook, all the thousand tickets were gone within 45 minutes. Seymour also notes the deference given to the traditional media has broken. over half of Corbyn’s supporters received most their information about his leadership campaign from social media. And the attacks on him in the mainstream press and news have compounded a sense among his supporters that not only is Corbyn genuine, but the traditional media is untrustworthy. (p.23).

This is important. It isn’t just that Corbyn and his supporters represent a challenge to the neoliberal consensus that private industry is automatically good, and those on welfare have to be ground into the dirt, starved and humiliated in order to please bilious Thatcherites and their vile rags like the Scum, Mail, Express, Torygraph and Times. It’s because he’s actually going back to doing the traditional hard work of political oratory and speaking to crowds. Not just relying on his spin doctors to produce nicely crafted, bland statements which the party masses are expected to follow uncritically.

And the newspapers, TV and radio companies don’t like him, because his success challenges their status as the approved architects of consensus politics. When 57 per cent of his supporters get their information about him from social media, it means that the grip of the Beeb, ITV, Channel 4 and Murdoch to tell people what to believe, what to think and what counts as real news is loosening drastically. And if no one takes them seriously, then their ability to act as the spokesman for business and politics is severely damaged, as is the ability of the commercial companies to take money from advertising. What company is going to want to spend money on ads following ITV and Channel 4 news, if nobody’s watching. And the businesses spending so much on advertising to take over the functions of the welfare state, like private hospitals and health insurance, are going to demand lower rates for their custom if fewer people are watching them and the mood is turning away from the Thatcherite and Blairite programme of NHS privatisation.

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Financial Speculators, Not Cost, Are the Real Oil Prices Are Rising

February 10, 2017

This week it was reported that British Gas were considering raising their prices by 9 per cent. This is frightening, as it means that the other companies may also raise their prices as well. Many people are increasingly finding themselves faced with a choice due to austerity, benefit cuts and stagnating wages. They can eat, and freeze, or stay warm and starve.

I don’t know what the reason given for raising the price of gas is. I suspect, however, from the behaviour of the oil industry, that any justification presented is spurious. William Blum in the chapter on capitalism in his book America’s Deadliest Export: Democracy, shows that the rise in oil prices aren’t due to rising costs. The cost of getting the stuff out of the ground has remained the same, despite all the guff about having reached peak oil. The real cause of the rise in fuel prices, including gas, is financial speculation, and quotes a US Senate report, The Role of Market Speculation in Rising Oil and Gas Prices. This states

The traditional forces of supply and demand cannot fully account for these increases [in crude oil, gasoline, etc.]. While global demand for oil has been increasing… global oil supplies have increased by an even greater amount. As a result, global inventories have increased as well. Today, US oil inventories are at an 8-year high, and OECD [mainly European] oil inventories are at a 20 year high. Accordingly, factors other than basic supply and demand must be examined…

Over the past few years, large financial institutions, hedge funds, pension funds, and other investment funds have been pouring billions of dollars into the energy commodities markets … to try to take advantage of price changes or to hedge against them. Because much of this additional investment has come from financial institutions and investment funds that do not use the commodity as part of their business, it is defined as ‘speculation’ by the Commodity Futures Trading Commission (CTFC). According to the CTFC, a speculator ‘does not produce or use the commodity, but risks his or her own capital trading futures in that commodity in hopes of making a profit on price changes.’ The large purchases of crude oil futures contracts by speculators have, in effect, created an additional demand for oil to be delivered in the future in the same manner that additional demand for the immediate delivery of a physical barrel of oil drives up the price on the spot market… Although it is difficult to quantify the effect of speculation on prices, there is substantial evidence that the large amount of speculation in the current market has significantly increased prices. (p. 248).

Blum goes on to make the point that the American financial regulators have been unable to combat these rises, because their ability to do so has been taken away from them by Congress. (pp. 249-50). As a result, although it still costs ExxonMobil $20 to get a barrel of oil out of the ground, the oil itself can trade at $40, $80 or $130 a barrel. (p. 251).

So if you’re worried about paying the gas or heating oil bill, the reason it’s gone up is due the financial sector. The very people that donate to political parties, especially the Tories and employ MPs when they leave.

Vox Political: Real Wages Fall by Ten Per Cent Under Tories

July 30, 2016

Mike also published a piece last week on a report published on Wednesday by the TUC, which found that while wages had grown in real terms across the EU between 2007 and 2015, they had fallen in Britain by 10.4%. The average rise in wages across the EU was 6.7 per cent. In Poland, wages had risen by 23 per cent. In Germany wages rose by nearly 14 per cent, and in France by 10.5 per cent. The only countries across the OECD which suffered a fall in wages were Portugal, Britain and Greece.

Mike’s article has two illustrations – one is a graph showing the rise in real wages in various countries, while another is a meme showing the massive pay rises enjoyed by other, very privileged groups, in Britain. Like Bankers, whose pay has risen by 35%, directors of FTSE 100 companies, 14%, and MPs, whose pay has gone up by 11%.

Mike makes the point that New Labour must share some of the blame for this, as not only was Peter Mandelson and his chums very relaxed about people making money, they were also extremely relaxed about wages stagnating. He makes the point that the crash his the poorest the hardest, and the austerity launched by the Tories has been punishing and impoverishing the poor to bail out the bankers and the rich. He also makes the point that Owen Smith’s solutions are just cosmetic, and won’t do anything without concrete proposals for the redistribution of the extra money gained through the ‘wealth tax’ he proposes.

See the article: http://voxpoliticalonline.com/2016/07/27/real-wages-in-the-uk-have-fallen-by-more-than-10-per-cent-under-tories/

Mike’s right about New Labour being very relaxed about wages stagnating. In fact, wage restraint has been a major part of the neoliberal consensus ever since Maggie Thatcher took power in 1979. Keynsianism tolerated high inflation – and in the 1970s at times the inflation rate in Britain was truly eye-watering – as it was coupled to an expanding economy. Both Labour and the Tories attempted to keep pay rises within certain boundaries nevertheless. Thatcher’s Monetarism was much harder towards inflation. It saw this it as the major obstacle to economic growth, and so demanded that it be ruthlessly cut, even if this meant shedding jobs on a truly massive scale, accompanied by a fall in real wages, and the dismantlement of various welfare programmes. It also meant abandoning the Keynsian commitment, pursued over 40 years, to full employment.

Robin Ramsay in a piece on his ‘News from the Bridge’ column in Lobster, made the point that when he was studying economics at Uni in the 1970s, Monetarism as an economic theory was so poorly regarded by his lecturers that they left it to the undergrads to work out what was wrong with it. Which shows you it was known even then to be totally rubbish and useless. He argues that it was adopted by the Tory party because it gave them a rationale for doing what they wanted to do on other grounds – destroy organised labour, dismantle the welfare state, including the Health Service, and grind the working class into poverty.

Now a number of economists are pointing out that, despite the emphasis by the Tories on wage restraint and very low inflation rates, the economy is not growing. I think Han Joon Chang is one of these in his 23 Things They Don’t Tell You About Capitalism.

The comparison with Greece is particularly chilling. Greece has been ruthlessly punished by the Troika with very harsh austerity policies, partly because the Greeks dared to defy the Eurozone authorities and elected Syriza, a radical anti-austerity party. Counterpunch has attacked the economic despoliation of the country by mainly German banks as a form of economic warfare. Greece was one of the countries that suffered from the effective collapse of the Eurozone. The result has been grinding mass poverty for its people. One recent programme on the country’s plight showed children picking rubbish off dumps to sale, just as they do in Developing Nations. The presenter looked on, aghast, and made the point that he had never seen this before in what was supposed to be a developed, European country.

Is this what New Labour and the Tories have in store for us? One of the books I found in one of the secondhand bookshops in Cheltenham yesterday was about how Britain would have a ‘third world’ economy by 2014. Clearly the book was written a little while ago, and the timing’s out, but nevertheless, the appearance of third world conditions in Britain is a real possibility. There are already 3.7 million people living in ‘food poverty’, and hundreds of thousands facing off poverty only because of food banks. I also remember how this was predicted on a BBC Horizon programme, entitled, ‘Icon Earth’, twenty years ago. The programme was about how the image of the Earth in space, taken from the Moon by the Apollo astronauts, had affected global religious, political and economic perspectives. That image had stimulated people around the world to realise that everyone on Earth shared a common home. One result of this, so the programme claimed, was globalisation. It discussed the growing campaigns against migration from the developing world with an Indian anti-racism activist. She predicted that as globalisation progressed, pockets of the third world would appear in the first.

She’s right. This has happened with Greece, and it is occurring in Britain, thanks to the Tories and New Labour. But unlike Greece, we cannot blame the EU. We never joined the Eurozone, and the deterioration in wages and conditions will occur because of Brexit. The cause of this stagnation ultimately is three and half decades and more of Thatcherism.

Shirley Williams on Economic Disruption by Trade Unions and Big Business

May 21, 2016

Shirley Williams, the former Labour MP, who then went off to form the SDP in the 1980s, also discusses the alleged damage for which the trade unions were allegedly responsible to the economy, in her 1981 book, Politics Is For People (Harmondsworth: Penguin). She concedes that some industrial problems were due to inflationary wage demands by the unions, but also believed that big business was also guilty of the same policies themselves. She also argued that the unions’ pay policy also had a beneficial effect, and that where strikes broke out, it was because the workers were poorly treated, and not given sufficient information on their predicament by the management. She wrote:

Trade unions are held responsible for many of Britain’s economic weaknesses, but criticism of unions is by no means restricted to Britain.

The power of unions and their irresponsibility, so one would have to conclude from the pronouncements of neoclassical economics, business representatives and conservative parties, is the one single factor (apart, perhaps, from the greed of the OPEC countries) which explains most of what is presently wrong with western economies. By raising the price of unskilled labour beyond its market value, union wages are said to be the major cause of unemployment, and by exploiting the scarcity value of skilled labour, they are said to be directly responsible for wage-push inflation.

Thus writes Fritz Scharpf, Direct of the Wissenschaftszentrum, Berlin, in a paper entitled Capitalism of Yesteryear – and of Tomorrow?

Apart from their effect on wages, trade unions are alleged to disrupt production schedules and delivery dates by strikes, both official and unofficial. The growth and prosperity of industry are damaged by restrictive practices such as overmanning, fragmentation of jobs by craft unions, limits on the output of individual workers or of equipment, and burdensome conditions before agreement can be reached on installing new machinery or introducing new processes. ‘Productivity is now importantly hampered by overmanning and restrictive practices which, if they could be reduced or removed, would allow rapid increases in productivity,’ concludes the OECD’s 1980 Economic Survey of the United Kingdom.

But restrictive practices are by no means limited to the labour market, as the last chapter demonstrates. Much more than the United States, Western Europe has relied on cartels, pricing agreements, market-sharing arrangements and monopolies to limit and restrict competition. what has been true of labour has also been true of business. The strength of organised labour grew relative to that of business in the decades of full employment after the war, so that some trade unions were able to insist upon conditions for recruitment and particular qualifications for skill. In Britain, the folk memory of mass unemployment between the wars has been very slow to fade, perhaps because of the persistence of the class system, perhaps because of relatively low geographic mobility. Restrictive practices have often been adopted as a means of protecting jobs, which in the short run they may do. In some firms the workload during normal working hours has been limited so that workpeople have been able to work long hours of overtime as well. Overtime has become endemic in some industries and is quite often guaranteed.

Wages and Inflation

But trade union’s resistance to wage cuts during recessions, far from damaging industrial economies, has been an important stabilising factor. Wages and salaries constitute a very large part, usually about three fifths, of the national income. They are therefore the main element in domestic demand. Wage cuts, complemented by cuts in unemployment pay (the ‘dole’), helped to precipate the slump of the 1920s and 1930s. To quote Fritz Scharpf again:

Perhaps the most important [of the stabilizing factors] is the ‘downward stickiness’ of wage which are determined by collective bargaining. They have stabilised the income, and thus the demand, of the great majority of wage earners even in recession periods, and they have so far helped to avoid the vicious cycle of downward spiralling demand that caused the great depression. (Pp. 128-9).

Discussing the differences between trade union structure and membership in Britain and Germany, Williams states

The job of German trade unions is also eased by the amount of information on the state of the economy and of each individual company available to their members through the system of works councils. German workers know the effect that inflationary settlements will have on employment prospects and on prices because the facts are available to them. They also know when they are getting paid too little. This basis of consultation underpins West Germany’s bargaining system. In Britain, a heavy price is paid in suspicion and antagonism because so little information is revealed and so few companies consult their workers. (p. 131).

In other words, if you involve the workers in the management of their industries and economies, they will defend their own interests, of course, but in an informed and responsible manner. This is pretty much the exact opposite of what the Neoliberals, the CBI and the Tories have been claiming.

The argument that wages should not be cut, nor should unemployment benefit, because these actually stimulate the economy, whereas the money raised through the tax cuts given to the super-rich does nothing but lie in their bank accounts, has been time and again by economists and bloggers like the Angry Yorkshireman and Mike at Vox Political. Ha-Joon Chang makes the point that the tax cuts don’t work in his book, 23 Things They Don’t Tell You About Capitalism, in an entire chapter devoted to destroying the trickled-down argument. But such policies are popular, because they satisfy the greed and venomous contempt and fear the middle classes have for the poor.

Vox Political: Miliband Challenges Businesses on Tax Havens

February 7, 2015

Mike over at Vox Political also has this story on Ed Miliband stating that a future Labour government will demand greater transparency and social responsibility from tax havens and the governments that operate them. Under the proposed new laws, these havens will be required to provide publicly accessible registers of who owns the companies registered in them. The article’s called Labour’s ultimatum to tax havens and it begins

Ed Miliband has warned the tax havens costing British families and businesses billions of pounds that they will have just six months to put their house in order and open their books – or face being placed on an international blacklist.

He has highlighted figures showing that, despite David Cameron boasting more than 18 months ago that he had forced tax havens to open up, not one of the tax havens linked to Britain as Overseas Territories or Crown Dependencies has yet delivered on Cameron’s promise that they would publish a register showing who owns the companies registered there – and some have explicitly refused to do so.

The lack of leadership shown by the UK government has frustrated and slowed the pace of reform on tax avoidance across the world.

In a letter to heads of government, Mr Miliband served notice on them that that under the next Labour government they will have six months to publish publicly-accessible central registers of beneficial ownership.

If they fail to meet this deadline, the next Labour government will withdraw the protection they get from international scrutiny and ask the Organisation for Economic Co-operation and Development to place them on its tax haven blacklist.

Miliband makes the point that his insistence that big business pays its fair share of tax is not an attack on business. It is pro-business, as the money so raised will be spent on the infrastructure Britain needs, including those businesses that do pay their whack. He contrasts this with the government’s programme of further cuts. Miliband says

“Today, we have a government planning real cuts in spending on schools but one that only postures—and does not act over the scandal of tax avoidance.

“Let me say to the Prime Minister: It is not pro-business to defend tax avoidance.

“Britain is losing billions of pounds in lost revenue that could be invested in our future. It is costing everyone who pays their fair share of taxes, including millions of British businesses.

“Businesses and working people who pay their taxes, do the right thing and play by the rules are affronted by tax avoidance – and they are fed up with a government that has failed to act.”

He said: “The current Conservative leadership have become the political wing of offshore hedge funds.

Much of the system of tax avoidance was put in place by Blair and Brown. It’s good that Miliband has re-thought this policy, and is now trying to end at least some of its excesses. It contrasts strongly with that of the Tories, who believe, like that the ancient aristocracy, that as aristos they shouldn’t have to pay tax.