I really shouldn’t be surprised at this whatsoever. It was inevitable, and everyone saw it coming the moment Starmer entered the ring in the Labour leadership contest. But I hoped against hope that he would still have some sense of honour and remain faithful to his election pledges. But he hasn’t. He’s finally taken his mask off and revealed his true, Blairite neoliberal face. And in the words of Benjamin J. Grimm, your blue-eyed, ever-lovin’ Thing, ‘What a revoltin’ development’ it is.
On Monday Mike put up a piece reporting that Starmer had given an interview to the Financial Times in which he blamed his predecessor, Jeremy Corbyn, for last year’s election defeat. He claims that Corbyn’s leadership was the chief topic of debate. That’s probably true, but only up to a point. The long, venomous campaign against Corbyn certainly did whip up a vicious hatred against the former Labour leader amongst a large part of the electorate. Some of the people I talked to in my local Labour party, who’d been out campaigning, said that they were shocked by the vicious, bitter hatred the public had for him. One woman said that it was as if they expected him to come up the garden path and shoot their dog.
But Starmer was also one of the reasons for Labour’s defeat. It was due to Starmer’s influence that Labour muddled its policy on Brexit by promising a second referendum. Johnson’s message of getting Brexit done was much simpler, and more popular. It’s almost certainly why Labour lost its historic strongholds in the north and midlands. These were areas which voted heavily for Brexit. But obviously, as the new leader of the Labour party, Starmer doesn’t want to mention that.
Then he goes on to blame the defeat on Labour’s policies. He claims Labour had overloaded its manifesto with promises to nationalise several utilities, issue £300 billion of shares to workers and promising another £83 billion in tax and spending. However, these policies, contrary to what the habitual liars and hack propagandists of the Tories and Lib Dems claim, had been properly costed.
Now I don’t doubt that the manifesto was overloaded by too many promises. When analysing what went wrong in the local constituency meeting, some felt that it was because the manifesto was too long, contained too many such promises and felt that they were being made up on a daily basis as the election progressed. But the central promise of renationalising the electricity grid, water and the railways were genuinely popular, and had been in the previous election in 2017. And Starmer promised to honour the policy commitments made in last year’s manifesto.
And now he’s shown in this interview that he has no intention of doing so.
He’s also demonstrated this by appointing as his shadow Chief Secretary to the Treasury Bridget Phillipson, another Blairite, who attacked Labour’s 2017 manifesto for offering too much to voters. Mike also reports that a leaked letter from Phillipson to other members of the shadow cabinet shows her telling them that from now on any policies that involve spending must have the approval of both Starmer and the shadow Treasury team before they’re even put in the planning stage.
Mike comments
Clearly, Starmer wants an “out-Tory the Tories” spending policy of the kind that led to then-Shadow Work and Pensions Secretary Rachel Reeves promising to be “tougher than the Tories” on benefits, in just one particularly out-of-touch policy from the Miliband era.
Absolutely. He wants to show Tory and Lib Dem voters that Labour stands for responsible fiscal policy, just like it did under Blair, who was also responsible for massive privatisation and a further catastrophic dismantlement of the welfare state.
Blair also made a conscious decision to abandon traditional Labour policies and its working class base in order to appeal to Tory voters in swing marginals. And the first thing he did was to recruit former Tory cabinet ministers, such as Chris Patten, to his own to form a Government Of All the Talents (GOATS). Starmer’s trying to make the same appeal. And it’s shown glaringly in the choice of newspaper to which he gave the interview. The Financial Times is the paper of the financial sector. Way back in the 1990s it was politically Liberal, although that didn’t stop one of its writers supporting workfare. According to Private Eye, the newspaper was losing readers, so its board and director, Marjorie Scardino, decreed that it should return to being a Tory paper. It has, though that hasn’t helped it – it’s still losing readers, and has lost even more than when it was Liberal. Starmer’s trying to repeat the Labour Party’s ‘prawn cocktail’ offensive, begun under Neil Kinnock, in which it successfully tried to win over the banking sector.
The rest of Mike’s article is a dissection of Starmer’s promises to stop landlords evicting their tenants because of the Coronavirus crisis. These look good, but will actually make housing scarcer and actually increase the problems renters have finding rent. Critics of Starmer’s policy see him as protecting landlords, rather than tenants.
Starmer’s policy does seem to be succeeding in winning Tory and Lib Dem voters.
According to a survey from Tory pollster YouGov, Starmer has an approval rating of +23, higher than Johnson. People were also positive about his leadership of the Labour party. 40 per cent think he’s done ‘very well’ or ‘well’ compared to the 17 per cent, who think he’s done fairly or very badly.
When it comes to Tories, 34 per cent think he’s doing well compared to 25 per cent, while regarding the Lib Dems, 63 per cent think he’s doing well compared to 53 per cent of Labour people.
Mike states that this is humiliating for Starmer, as it comes from people, who have a vested interested in a duff Labour leader.
And Starmer has been duff. He’s scored a couple of very good points against Johnson at Prime Minister’s Questions, but he’s largely been conspicuous by his absence. This has got to the point where the Tory papers have been sneering at him for it, saying that Piers Morgan has been a more effective opposition. It’s a point that has also been made by Tony Greenstein. See: https://azvsas.blogspot.com/2020/05/if-labour-wants-to-win-next-election.html
Even if these stats show that Tory and Lib Dem voters are genuinely impressed with Starmer, that does not mean that he has popular mandate. Tory Tony Blair won over Conservative voters, but that was at the expense of traditional Labour voters and members. They left the party in droves. It was Corbyn’s achievement that he managed to win those members back, and turned the party into Britain’s largest.
But Starmer and the Blairites despise the traditional Labour base. As shown by the coups and plots during Corbyn’s leadership, they’d be quite happy with a far smaller party without traditional, socialist members. And Starmer was part of that. He was one of those who took part in the coups.
Starmer is once again following Blair’s course in wanting to appeal to Tories and Lib Dems instead of working class voters, trade unionists and socialists. He wishes to return to orthodox fiscal policies, which will mean more privatisation, including that of the NHS, and completing their destruction of the welfare state.
He wants it to become Tory Party no. 2, just as Blair did. And for working class people, that means more poverty, disease, starvation and death.
The cover story on Saturday’s I for 20th July 2019 was a report that Britain’s landed gentry had doubled their wealth in a decade. Beneath the headline declaring that very fact were the lines
Dramatic surge in fortunes of British nobility since the 2008 financial crash, I learns
600 aristcratic families now as wealthy as they were at the height of the British Empire.
The story on page 12 of the paper by Cahal Milmo was based on the research of two academics, Dr Matthew Bond and Dr Julien Morton, lecturers, sociology lecturers at the London South Bank University, who had examined probates, or settled wills, of 1,706 members of the aristocracy going back to 1858. However, the article made the point that these wills only represented part of the aristocracy’s immense wealth, and their real fortunes is likely to be much higher because their lands, property, art collections and business investments are very frequently held in separate trusts which cannot be examined.
The article stated that
A hereditary title is now worth an average of more than £16m – nearly twice the value it stood at proior to the 2008 financial crisis, I can reveal. their fortunes contrast starkly with the decade experienced by the vast majority of Britons, whose inflation-adjusted wages remain stuck at 2005 levels.l Since the Thatcher era, the value of a hereditary title has also increased four-fold.
The academics’ research also
shows that the minimum value of one of these (aristocratic) titles now stands on average at £16.1m. The same figure, adjusted to reflect current purchasing power, stood at £4.2m between 1978 and 1987.
The four-fold increase suggests the aristocracy has prospered spectacularly under the era of financial deregulation and economic liberalisation ushered in by Margaret Thatcher when she came to power in 1979.
The I also stated
The figures represent a sharp recovery in the fortunes of the nobility, which went into a decline during the Second World War and the post-war consensus, which brought in more progressive taxation and the welfare state. From a pre-war high of £23m, average fortunes fell to £4.9m by the 1980s.
The data suggests that Britain’s wealthiest aristocrats have more than weathered the economic problems caused by the 2008 financial crisis, apparently using existing assets to take advantage of low interest rates to buy up stocks and shares and other investments which have rocketed in value. In the decade to 2007, the average wealth of the nobility stood at £8.9m – suggesting it has nearly doubled in the decade since. (pp. 12-13).
The article also looked at the educational background of the ten richest toffs. And what a surprise! They nearly all went to Eton and Harrow, before going on to Oxbridge.
Of the ten largest probates between 2008 and 2018, seven of the deceased attended Eton or Harrow, with the remaining three also attending major public schools. Six of the 10 went to either Oxford or Cambridge universities. (p. 13).
The newspaper also asked the Labour MP, Chris Bryant for his views about this. Bryant was the author of A Critical History of the British Aristocracy, published two years ago in 2017. He responded
“For more than a century the landed aristocracy have been moaning about their terrible impoverishment. Ostentatiously sitting in dilapidated drawing rooms with buckets and pails catching drips from the beautiful but bowed stucco ceiling, they have extended the begging bowl.
“Yet the last century has seen many do remarkably well. The end result is that eh great old landed, crested and hallmarked families of the UK are still in possession of most of the land and a large part of the wealth of the nation.” (p. 13).
The I was at pains to state that the study itself takes no view on the social role of the aristocracy, whose fans argue that it plays a valuable role supporting rural communities through fishing and farming. It quoted Morton as saying
“It may well be that having a rich and vital aristocracy is good for the country. We are interested in understanding this group as objectively as possible.”
Well, that might be the case, but they’ve also been severely bad for the rest of us. The I doesn’t mention it, but one of the ways the aristocracy has almost certainly increased their wealth is through the massive tax cuts the Tories have given high earners. They’ve been enriched through the Thatcherite doctrine that taxes and government spending have to be cut, the welfare state destroyed and everything, including the NHS privatised, in order to benefit the upper classes. Their wealth will then magically trickle down to the rest of us, as they open new businesses, pay higher wages and so forth. Except they don’t. They simply take the money and put it in their bank accounts, where it stays. And far from opening new businesses, business proprietors simply carry on as before, laying off staff in order to enrich themselves and their shareholders. The Young Turks and a number of other left-wing American internet news shows, like the Jimmy Dore Show, have put up videos about various companies that have made thousands unemployed after they were given tax cuts by Trump.
As for the British aristocracy, way back in 1988 Private Eye published a very critical review, ‘Nob Value’, of Hugh Montgomery-Massingberd’s The Field Book of Country Houses and their Owners: Family Seats of the British Isles, as well as the-then emerging ‘heritage’ sector. Massingberd, who wrote a ‘heritage’ column in the Torygraph, was a massive fan of the aristocracy to which he belonged, and, of course, Maggie Thatcher. In this book he loudly praised her policies, and looked forward to a ‘social restoration’ that would see the blue-bloods return to power. The Eye wrote
The ‘heritage’ mania has softened us up for a return to inherited wealth. Hugh Montgomery-Massingberd may be a richly Wodehousian figure, but his book, lauding the privately owned, is symptomatic. It is the correlative to Peregrine Worsthorne’s recent articles about the desirability of large inheritances and the return of a rentier class: the desirability in short of ‘a social restoration’. Come the day, of course, Massivesnob knows where he will be – in his seat again. But the fans of his snufflings seem curiously unaware of where that leaves them: which is sat upon.
In Francis Wheen, ed., Lord Gnome’s Literary Companion (London: Verso 1994), 320-2 (322).
Quite. It’s as true now as it was then, after Downton Abbey on the Beeb and now with the Tory party dominated by two toffs, Boris Johnson and Jacob Rees-Mogg, coming after another Eton educated aristo, David Cameron, all of whom very much represent the interests of their class against the poor.
The only chance for the rest of us to shake them off, and go back to having a society where ordinary people have a decent standard of living, can enjoy good wages, proper welfare support and a truly national, and nationalised health service, is by voting for Corbyn.
Yesterday, Mike reported on his blog that the outsourcing giant, Capita, was now in trouble. Its share price has apparently halved, knocking £1.1 billion of its stock market value. It has axed its scheme to issue £500 million in dividends to its shareholders. Instead, it intends to raise £700 million, partly by selling off parts of the company, which it needs to balance the books. There are also fears that it will make part of its 67,000 strong workforce redundant as well as concerns for the firm’s pension fund.
Mike in his article notes that the company was responsible for assessing the infamous fitness for work tests, for which the government has imposed hidden targets. One of these is that 80 per cent of reconsidered cases should be turned down. Mike therefore comments that if the crisis means that some of these assessors get a taste of what they inflicted on benefit claimants, this would be a case of poetic justice. He also wonders what the firm was doing when it devised the scheme to issue those massive dividends to its shareholders. Did they believe that the government’s magic money tree would continue to allow them to give heaps of money to their rich shareholders? He also asks other searching questions, such as whether it was deliberately underbidding to get government contracts, and then using the money to help finance those projects it had already won.
Mike concludes
So: First Carillion collapsed. Now both Interserve (remember them?) and Capita are in trouble.
Who’s next? And what will happen to public services while the Tories dither over this crisis?
Capita, or as Private Eye dubbed it, ‘Crapita’, has a long history of incompetence behind it. Way back in the 1990s it seemed that hardly a fortnight went by without Capita turning up in the pages of the satirical magazine. And the story was nearly always the same. The outsourcing company won a government or local authority contract to set up an IT system or run IT services. The project would then go over time and over budget, and would be massively flawed. And then a few weeks or months later, the company would be given a contract somewhere, and do exactly the same thing there.
You’re left wondering how Crapita kept winning those contracts, when it was so manifestly unfit to carry them out. Who did it have on its board? Or was there a deliberate policy by Major’s government to support outsourcing, no matter how inefficient and incompetent they were, because it was private enterprise and so preferred and supported for purely ideological reasons?
In any case, what seems to have placed the company in a very precarious financial situation is the usual tactics of big companies in this stage of capitalism: award massive dividends to the shareholders. This usually goes along with starving the rest of the company of investment, which seems to have been done to. And granting massive, and massively unsustainable pay awards to senior management. There’s no mention of that in Mike’s article, but I don’t doubt that this was done too. I’ve got the impression that it’s just about standard practice across a huge swathe of industry.
This is a financial strategy that has driven far more than one company to the wall. I also wonder if the executives weren’t also trying deliberately to create a debt, so that they could dodge corporation tax for five years. This is one of the tricks Stewart Lansley and Joanna Mack describe in their book on contemporary British poverty, Breadline Britain.
Over the years the outsourcing policy has been in operation, there’s been one crisis after another. The outsourcing companies have repeatedly shown themselves to be incompetent, not just in the case of capita, but also notoriously with G4S and the scandals over the violence and brutality it meted out towards asylum seekers in the detention centres it ran. And, of course, when a whole load of prisoners escaped on their way to court. Or jail.
Private industry has repeatedly shown that it is incompetent to do the work of the state sector. These firms have the disadvantage of having to make a profit for their shareholders, as well as the demands of their management for multi-million pound pay packets. The only way they can afford this is by cutting wages to their workers, and spending as little as possible on the service they are meant to be providing. The result of this has been a series of financial collapses. Carillion was the first. Now Capita and Interserve, another outsourcing company, is in similar trouble.
The only sensible recourse should be to cancel these companies’ contracts, and take everything back in-house. But this won’t be done. I think there’s a problem in that the state sector has been so decimated by the past four decades of Thatcherism, that it no longer has the capacity to run these services itself. There’s also the additional problem that too many politicians and media magnates have connections to these companies, or to firms in a similar position hoping for government contracts. Acknowledging that outsourcing was a failure would damage the interests of these politicos and press barons. There’s also the challenge of actually facing up to the fact that a central plank of Thatcherite dogma – that private enterprise is always more efficient than the state – is absolutely, undeniably wrong. Anybody who makes this point is denounced as a Communist in screaming headlines. You only have to look at the way the Tory press has vilified Jeremy Corbyn for daring to want to renationalise the NHS, the electricity net and the railways. His policies are very far from the total nationalisation demanded by Communists and Trotskyites, but you wouldn’t know it from the frothing abuse hurled in his direction by the Tories and Blairites.
There’s also another problem with calling an end to the outsourcing scam. PFI contracts and outsourcing allow some of the costs to be written off the official government accounts sheet. They’re still there, and we have to keep paying them, but they’re not included in the official figures. It’s why Mussolini used a similar scam when he was Duce of Fascist Italy. Any government that restores these projects to the way they were handled before risks putting millions back the official figures. And if that’s the Labour party, you can imagine the Tories making their usual hackneyed and untrue comments about ‘high-spending Labour’, and then re-iterating the spurious arguments for austerity.
I’ve no doubt that the government will do what it can to shore up the current mess the outsourcing companies are in. But the collapse of Carillion and now the severe financial troubles faced by Capita and Interserve show that outsourcing does not work. And given these companies’ highly checkered history, they should never have been given governments to begin with.
And it bears out exactly the description the author of Zombie Economics used for them in the very title of his book. Outsourcing, and the rest of the Thatcherite economic strategy of privatisation, wage restraint, low taxation and declining welfare are ‘zombie economics’ as they don’t work, but haven’t yet been put it into the grave.
It’s high time they were, and Thatcherite free trade capitalism was abandoned as the failure it so glaringly is.
(George Allen & Unwin Ltd. for the Co-operative Union Ltd 1944).
Many of us of a certain age still remember the Co-op before it became a regular supermarket chain. It was a store in which regular shoppers – the co-op’s members, were also it’s owners, and entitled to receive a share of the profits. This meant that you were paid a dividend. This was later issued in the form of ‘Green Shield’ stamps, which could be used to buy further goods in the stores. The co-operative movement was founded way back in the 1840s by the Rochdale Pioneers, former members of Robert Owen’s socialist movement. After this had collapsed, the Pioneers then went on to apply his socialist principles to running retail stores. The movement rapidly caught on and expanded, not least because, unlike ordinary shops, the co-ops sold pure food without the poisonous substances added elsewhere. For example, many bakers added arsenic to their bread to make it whiter, and more attractive to the purchaser. The co-ops didn’t, and so their food and goods was healthier, and thus more popular. Unlike their competitors, you could be fairly sure that what you bought from the co-op wouldn’t kill you in the name of making it appear more tasty. By 1942 there were 1,058 co-operative retail societies, with a total membership of 8,925,000 – just shy of 9 million people.
I found this book on the history of the movement in one of the charity bookshops in Bristol. It’s by the great socialist and writer, G.D.H. Cole, who was one of the leading members of Guild Socialism, a British form of syndicalism, which recommended the abolition of the state and its replacement with a system of guilds – trade unions, which would include all the workers in an industry, and which would run industry and the economy. Instead of parliament, there would be something like the TUC, which would also have administrative organs to protect the consumer.
The book’s chapters include:
I: “The Hungry ‘Forties'”,
II: Co-operation before the Pioneers
II. Rochdale.
IV. The Rochdale Pioneers Begin.
V. The Rochdale Pioneers to 1874.
VI Christian Socialists, Redemptionists, and Trade Unions
VII. Co-operation and the Law.
VIII. The Origins of the Co-Operative Wholesale Society
IX. Co-operative Growth in the ‘Sixties and ‘Seventies.
X. The Second Revolution.
XI. The ‘Eighties and ‘Nineties.
XII. The Women’s Guild.
XIII. Co-operators and Education.
XIV. Co-operation in Agriculture – Ireland: The Beginning of International Co-operation.
XV. Co-operation before and during the First World War.
XVI. From War to War.
XVII. Guild Socialism and the Building Guilds
XVIII. Co-operative Development between the Wars.
XIX. Co-operators in Politics.
XX. Co-operative Employment.
XXI. International Co-operation.
XXII Co-operation Today and Tomorrow
I. the Growth of Co-operation.
ii. The Development of Co-operative Trade.
iii. Large and Small Societies.
iv. Democratic Control.
v. Regional Strength and Weakness.
vi. Co-operative Education.
vii. The producers’ Societies.
viii. The Wholesales and Production.
ix. The Next Steps.
Appendix: Who Were the Pioneers?
Cole notes that some forms of what became known as co-operation existed in various trades and businesses before the Rochdale Pioneers. Some of the capital used to set up businesses in the early 19th century, came from the workers. They tended to invest in other businesses’ than their employers, so that if their wages were cut during a recession or dip in trade, the dividends they would receive from their shares would not also suffer. Although not remarked on in the book, you could say that this shows how the working class has been disinherited. In many cases, they contributed their savings and money to the development of capitalism, but despite the existence in some firms of profit-sharing schemes, they have been and are being excluded from the profits of the modern, industrial economy.
From industry, co-operation also entered politics, with the establishment of a Co-operative Party, which is now part of the Labour party. The movement spread across Europe, to Germany and as far as Russia. Lenin was greatly impressed by the value of the co-operatives as a form of socialism. According to Aganbegyan, Gorbachev’s chief economist for perestroika, before 1950 47 per cent of all industries, including farms in the USSR were co-ops. Industrial democracy and co-operatives were a central plank of Gorbachev’s perestroika. Unfortunately, Gorby’s attempts to revive Communism failed, and Yeltsin turned them into bog-standard capitalist companies through the voucher system. Other thinkers and politicians in other countries saw co-operation as the solution to their countries’ social and economic problems. One of these was the Bulgarian Stambolisky, the leader of a peasant’s party before the First World War. He wished to organise the peasant farms into a system of co-operation, which would modernise the country by allowing them to acquire electricity and improve production and conditions. More recently, the Mondragon co-operatives, set up in Spain by a Roman Catholic priest in the 1950s, has become an industrial giant, involved in just about all areas of the Spanish economy.
Cole’s book understandably concentrates on the history of the co-operative movement from its emergence to the middle of the Second World War, and is an immensely detailed and thorough work of scholarship. Although not as prominent as they once were, co-operative businesses still exist in Britain. They were supported in the 1970s and ’80s by politicos like the great Tony Benn and Ken Livingstone, and may once again become a major force in British society and the economy.
Another audience member asks why it is that so many Palestinians survived in Israel, when the Israeli government was trying to cleans them. Finkelstein replies that in some areas, like Hebron, the Arab population survived because the Israelis needed them as workers. Galilee was mostly Christian, and the Arabs survived there because the Israelis were scared of offending the Vatican. And incidentally, their survival is further evidence that the cleansing of the Palestinians was not accidental, but was planned, as it wouldn’t have occurred otherwise. And some Palestinians survived by accident and sheer good fortune, like the Jews who survived the Holocaust.
Finkelstein also tackles the Holocaust industry, in response to another question from the audience. He is particularly incensed by this, as the descendant of Holocaust survivors himself. His father survived Auschwitz, while his mother survived that horrors of a succession of concentration and force labour camps. He makes the point that what made the systematic Nazi murder of European Jewry most shocking is its sheer efficiency. Of all the millions of Jews in eastern Europe, on 100,000 still survived by the end of the War. They did so only through sheer luck. And now, when the industry started in the 1990s, there must be even less, as many have died from old age. So the figures the Holocaust Industry advances for those, who have survived and need to be compensated are grossly inflated. He describes this distortion as a form of Holocaust denial. If so many people survived the Holocaust, then it means that the Nazis weren’t as good at killing people as was previously believed. He quotes his mother as asking, ‘Who did Adolf kill, if all these people have survived?’ The figures for the numbers of survivors are wrong, as abused by the Holocaust industry.
He is also less than impressed by the claims for vast wealth that the industry makes regarding European Jews murdered by the Nazis. He points out that European Jews were largely poor, living in shtetls – Jewish settlements. He says it’s why Tevia in Fiddler on the Roof sings, ‘If I were a rich man’. Because obviously, he isn’t. Finkelstein also makes the point that there were even fewer rich Jews around because of the Depression, which brought the Nazis to power. In depressions, rich people lose their money. He also makes the point that those Jews, who did have money, got out. The Rothschilds, for example, had branches of their family and money in a number of countries. As the Nazis invaded one country, they moved their money to another, and their relatives followed their familial obligations and bought their brothers and sisters out.
But now, according to the Holocaust industry, not only did many more Jews survive, but they all had Swiss bank accounts and private art collections. He makes the point that Swiss bank accounts are incredibly difficult to come by. He states that his brother’s a millionaire, and he doesn’t have a Swiss bank account. And neither do the people in his audience. And the figures for the numbers of surviving Jews, who had Swiss bank accounts, that the Holocaust industry have presented have been shown to be notoriously inflated.
On the subject of what can be done to support the Palestinians, he makes the point that no matter how deeply you believe in the Bible, it should still shock you that people are losing their homes. Israel is the only country that uses house demolition as a judicial punishment. He gives the example of one of his Palestinian friends, who was denied permission to build his house where he wanted to, and so has built it further away. But nevertheless, his house is illegal and it can be demolished at any time. Finkelstein points out that the Palestinians are poor. They don’t have stocks and bonds, and so everything they have is invested in their houses. He states that it is no good trying to win the settlers over, as ‘they’re like something from a science fiction story.’ He compares trying to do something about them with the question Trotsky was once asked about what to do about Fascists. ‘Acquaint them with the pavement’, was the dissident Marxist’s reply.
Finkelstein goes on to state that winning people over to supporting the Palestinians should be a simple case of vanquishing an enemy. He goes on to quote another writer that everyone should have a place at the table of victory.
There is no doubt that Finkelstein has very controversial views, especially on the Holocaust industry. He describes that as double shakedown. Nations are being blackmailed by the industry for money that they don’t actually owe, while the real survivors of the death camps don’t see a nickel or penny. This isn’t just his own opinion. He quotes another Jewish author, who states that its first time Jews have scammed people like this.
Despite the controversial nature of his views, it’s very clear that he has a very strong case against Israel’s treatment of the Palestinians, and that his revulsion is also shared by very many Jewish Americans, who are likely to be the majority as time goes on. The generous and vociferous support AIPAC gives to Israel belies the fact that for many American Jews, the oppression of the Palestinians is very much a case of ‘Not in my name’.
As for the two Palestinians, who spoke up, I understand that they’re also factually correct. In the 19th century many liberal Jewish historians wrote books pointing out that Jews were treated better under Islam than they were in Christendom. As for Arabs and Jews living peacefully in Palestine, this also is true. In the 1960s the Israeli government expelled tens of thousands of indigenous Jewish Palestinians as they were culturally indistinguishable from Arabs. Moreover, Albert Hourani, in his book The Modern Middle East, in the chapter on Israel points out that during Muslim rule, Christian churches were regarded as mawsin by Muslims – ‘sacred’, ‘inviolable’. If you read the ethnographic literature on the modern Middle East, you do find accounts of friendship between Muslims and Jews, relationships which were disrupted through the great power occupations by France and Britain in the 1920s. Israel’s continuing maltreatment of the Palestinians is one legacy of this.
The great boast of Margaret Thatcher and the Conservatives is that private enterprise, unfetter by state control, somehow magically reduces bureaucracy. Apart from ignoring the fact that firms also necessarily have their own bureaucracies, the economic and social importance of many of the industries taken into state control means that even after these industries were privatised, there still had to be a state bureaucracy to make sure these industries continued to act in a fair and responsible manner. So there are a plethora of regulatory bodies supervising telecommunications, electricity, water and the environment. And one effect of privatisation was to make these regulatory authorities and the state supervisory bureaucracy bigger than they were under state ownership. Private Eye in the 1990s during John Major’s administration ran story after story noting the massive increase in such bureaucracy in the electricity, water and environment agencies. The Eye also noted how Thatcher’s successors attempted to cut down this bureaucracy by increasingly depriving them of their statutory powers and limiting their remit. Bureaucracy was reduced not be being more efficient, but by being deliberately cut down to prevent it interfering. And thus was public protection against the predation and mismanagement by the newly privatised companies removed.
Shirley Williams, the former Labour MP, who became one of the founders of the SDP also noted the growth of bureaucracy under the Conservatives before Thatcher in her book, Politics Is For People. She wrote
Another paradox can be seen in Britain, and no doubt in many other countries as well: the growth of administration. In 1970, the then Conservative government brought in the American industrial consultant, McKinsey & Co., to advise them on the reorganisation of the National Health Service. the reorganisation, in which professional interests were extensively consulted, led to a substantial increase in the number of administrative and clerical posts, and a higher proportion of administrators and clerical employees to doctors and nurses, the front line of the service. Local government reorganisation, under the same Conservative government, had similar consequences: more highly paid administrative posts, no evidence of improvement in local government services. Big government has its own impetus which is hard to stop, whatever the philosophy of the executive in charge. But opposition to it rubs off most on political parties identified with a substantial role for it. (Pp. 29-30).
Labour has suffered because, as the party most identified with big government and state expenditure, it has also been criticised by its Right-wing opponents as the party of waste. Yet the Tories have vastly inflated the bureaucracy involved in the remaining areas left under state control. Private Eye noted that the creation of the internal market in the NHS, and the PFI financing of hospitals, vastly increased bureaucracy in the Health Service. Successive governments have carried on the marketization of the NHS, with a further increase in bureaucracy. Within the BBC, the Eye also noted that John Birt’s administrative reorganisation of that once-great and respected institution resulted in the expansion of the upper management grades on vastly bloated salaries coupled with a damaging reduction in the production staff, who actually made the programmes people watch.
Britain’s public services and industries have been made increasingly inefficient through the creation of a corrupt and parasitic class of managers, who seem to serve only to perpetuate themselves at the expense of their own companies and their workers. Indeed, Ha-Joon Chang in his book, 23 Things They Don’t Tell You About Capitalism in one of the very first chapters describes the cases of several companies that actually went to the wall because their managers cut investment and wages, and sold of the companies’ assets, in order to increase their share price and their own salaries.
The Conservatives are the party of parasitic, useless bureaucracy. And the management consultants they have called in to advise them on how to reform British state administration have done nothing but wreck it. Arthur Anderson, later Anderson Consulting, destroyed the Benefits Agency and the Inland Revenue in the 1980s and 1990s. Their successors in PriceWaterhouseCoopers and the rest of the accountancy firms sending their senior staff to help both Tories and Labour draft their policies on tax and so on are part of the same poisonous trend. The Tories should be thrown out of government, and the management consultants and accountancy firms firmly excluded from the business of government.
Mike over at Vox Political has posted a piece about the remarks by Andy Haldane, the Chief Economist at the Bank of England, that Britain’s economy is being damaged by exorbitantly high executive pay. An article in the Independent notes that the average pay of FTSE 100 bosses is now 150 times that of the average UK worker. The Indie then went on to say
This large and growing remuneration gap, Mr Haldane said, “drive[s] a wedge between management and employees…that in turn erodes social capital. A company, like a country, whose physical and social capital is being eroded is one whose wealth-creation capacity is being impaired.”
Social capital refers to trust and relationships in a society and Mr Haldane argued this matters “every bit as much to wealth and well-being” as financial capital such as stocks and shares and other such assets.
It also reported that there have been a number of shareholder rebellions against the high pay awarded to chief executives.
Mike comments
Trust between bosses and employees is at an all-time low – not helped by Conservative Government policies that trample on workers and try to reduce their rights and remuneration. Look at the junior doctors’ strike for an example.
Mr Haldane is saying the direct result of this is harm to the economy, and we can see that this is true.
Why would any worker want to provide a high-quality product for an employer who is ripping them off?
And if they lose their job, why would the next worker want to provide a high-quality product for an employer who is paying them less than the last worker (because they can)?
The Korean-born economist, Ha-Joon Chang tackles this problem in his book 23 Things They Don’t Tell You About Capitalism in the chapter ‘Thing 14 US Managers Are Over-Priced’. Chang concentrates on American managers because they are paid a whopping 300-400 times that of the average American blue-collar Jose or Josie. They are paid way more than the managers of comparable companies elsewhere in the world, including Japan. The chapter is an attack on the Neo-Liberal attitude that if the managers are paid so much more than their counterparts elsewhere in the world, and their workforce, it must be because their performance is somehow worth it in the market economy. Chang shows that this is not the case. He argues that US managers now are not more efficient and effective than they were a generation ago, when they were only paid 30 to 40 times more than their workers. And they certainly aren’t worth that money compared to their European and Japanese competitors, who are actually beating them.
Finally, he discusses the damage such executive pay actually does to the wider economy. He argues that the managerial class now has so much power through their contacts in government and their grossly inflated pay that even when they fail, they are not punished, but instead rewarded. They most they receive are extremely generous severance packages. And the people who have to suffer, ultimately, to pay for their bloated salaries are the workers and the taxpayers, who have had to bail out the banks. He writes
Despite this, little is done to check excessive and biased (in that failures are hardly punished) executive pay packages because the managerial classes in the US and Britain have become so powerful, not least because of the fat paycheques they have been getting over the last few decades. They have come to control the boardrooms, through interlocking directorship and manipulation of information that they provide to independent directors, and as a result few boards of directors question the level and the structure of executive pay set by the CEO. High and rising dividend payments also keep the shareholders happy. By flexing their economic muscle, the managerial classes have gained enormous influence over the political sphere, including the supposedly centre-left parties such as Britain’s New Labour and America’s Democratic Party. Especially in the US, many private sector CEOs end up running government departments. Most importantly, they have used their economic and political influence to spread the free-market ideology that says that whatever exists must be there because it the most efficient.
The power of this managerial class has been most vividly demonstrated by the aftermath of the 2008 financial crisis. When the American and the British governments injected astronomical sums of taxpayers’ money into troubled financial institutions in the autumn of 2008, few of the managers who were responsible for their institutions failure were punished. Yes, a small number of CEOs have lost their jobs, but few of those who have remained in their jobs have taken a serious pay cut and there has been an enormous, and effective, resistance to the attempt by the US Congress to put a cap on pay of the managers of financial firms receiving taxpayers’ money. The British government refused to do anything about the £15-20 million pensions payout (which gives him around £700,000 yearly income) to the disgraced former boss of the R.B.S. (Royal Bank of Scotland), Sir Fred Goodwin, although the intense negative publicity forced him subsequently to return £4 million. The fact that the British and the American taxpayers, who have become the shareholders of the bailed-out financial institutions, cannot even punish their now-employees for poor performance and force them to accept a more efficient compensation scheme shows the extent of power that the managerial class now possesses in these countries.
Markets weed out inefficient practices, but only when no one has sufficient power to manipulate them. Moreover, even if they are eventually weeded out, one-sided managerial compensation packages impose huge costs on the rest of the economy while they last. The workers have to be constantly squeezed through downward pressure on wages, casualization of employment and permanent downsizing, so that the managers can generate enough extra profits to distribute to the shareholders and keep them from raising issues with high executive pay (for more on this, see Thing 2). Having to maximise dividends to keep the shareholders quiet, investment is minimized, weakening the company’s long-term productive capabilities. When combined with excessive managerial pay, this puts the American and British firms at a disadvantage in international competition, eventually costing the workers their jobs. Finally, when things go wrong on a large scale, as in the 2008 financial crisis, taxpayers are forced to bail out the failed companies, while the managers who created the failure get off almost scot-free.
When the managerial classes in the US and, to a lesser extent Britain, possess such economic, political and ideological power that they can manipulate the market and pass on the negative consequences of their actions to other people, it is an illusion to think that executive pay is something whose optimal levels and structures are going to be, and should be, determined by the market. (pp. 155-6).
Yesterday, Mike did a piece on an article in The Canary about George Osborne’s response to the news that Paul Mason would be contributing to Jeremy Corbyn’s New Economics Series. Needless to say, coming from an old Etonian, whose only qualification for the job seems to be that his father is the Baronet of Ballymoney, this was another ad hominem insult. Mason, he claims, got the job because Mao was dead and Mickey Mouse was unavailable. Of this cheap gibe, Mason said:
“As for the Mao/Mickey Mouse jibe, I was tailed for hours in 2008 in Beijing by the secret police of Mr Osborne’s favourite Marxist government, after interviewing the victims of Mao’s Great Leap Forward. I am happy to state that Mao was a despot whose policies killed millions; I look forward to hearing Mr Osborne say that on his next trip to China.”
The parallels between Mao and this government are certainly there. During Mao’s Great Leap Forward, 60 million Chinese died in artificial famines. This government has similarly pushed up the death toll from poverty in this country, though on a rather smaller scale. Thank heaven. 590 people in the past few years have died of starvation, neglect or sheer despair thanks to aIDS’ benefit sanctions. Nearly a quarter of a million more have been plunged into mental illness. And the level of poverty is growing all the time. There are reports that by the 2020s, a quarter or more of UK citizens will be in poverty. And this is an artificial famine to keep people poor and desperate so they will accept just about every indignity their employer throws at them in order to make a quick buck for himself.
The parallel between Osborne, Cameron, aIDS and the others and Mao and the Gang of Four even extends to their hypocritical false egalitarianism. Before Mao came to power, it was claimed that everyone in his base in the Chinese north was equal, and had equal access to food, accommodation and so on. There were reports, however, of massive inequality, and the Gang of Four later on were extremely corrupt. Osborne, Cameron and Co make great play about how ‘we’re all in it together’, a claim that is manifestly untrue. They’re all immensely rich, and the rich are getting much richer, thank you very much, due to the austerity they’ve inflicted.
But if they think Corbyn’s favourite economist would be Chairman Mao, then I wonder if theirs would be Hjalmar Schacht. Schacht was the Nazi economist who put the Germany economy to rights after the massive inflation of the Weimar Period and the Wall Street Crash. He did this through the creation of the Mefo bill. These were a type of share or bond, which formed an investment in a variety of industries, rather than just a single company. It was through these that Schacht stimulated the Germany economy and aided the Nazi rearmament programme. After the War he turned up in the 1970s advising Nasser’s government in Egypt.
Actually, I don’t think Schacht is the Tory’s favourite economist. It’s not that they’re not a highly authoritarian clique with a hatred of organised labour, a desire to reduce the trade unions through ‘Francoist’ legislation, and rule through a system of secret courts and state surveillance. I think it’s simply because, unlike them, Schacht actually did something positive to revive the Germany economy and promote the expansion of the military machine. Cameron, Osborne and co are doing all they can to reduce our domestic industries. With the exception of the arms trade, of course. They’re like Schacht in that. Whatever happens, the merchants and manufacturers of death must be supported. the economy depends on it.
So we’re back once again to the Nazi adage: ‘Guns will make us powerful. Butter will make us fat’. It should be the motto of the Tory party.
Last Thursday, Mike ran an article from that day’s Guardian, which reported that one of the Corbynistas in the Labour party, John McDonnell, had recommended that Labour should give employees the right to request their bosses to give them shares in their company. He also stated that employees should also have the right to buy out companies that are being dissolved, sold or floated on the stockmarket first before they are offered elsewhere.
This was after Corbyn had stated that companies should be prevented from paying their workers poverty wages while their bosses awarded themselves vast pay rises by limiting the amount management could pay themselves beyond those of their employees.
Mike stated of the proposal to extend workers’ ownership and co-operative control
These are plans that would succeed. Employment would stop being a trap, forcing people to slave for the enrichment of others while being forced to claim state benefits themselves; the government would pay out fewer in-work benefits as wages rise, meaning taxes could be diverted to other causes or cut altogether; and there would be much less of the old “us v them” enmity supported by our “divide and conquer” Conservatives.
Mike’s quite right. Germany and Austria have had workers in the boardroom and forms of workers’ control since the 1920s. They’ve been immensely successful, and have no doubt contributed to those countries’ stable, prosperous economies and the ‘social peace’ that has existed there. I’ve no doubt that when Corbyn and McDonnell made these speeches, there were splutterings of ‘Communism!’ and ‘Cultural Marxism!’ by right-wing blowhards, who know little of either. In point of fact, the German and Austrian Communist parties cordially hated workers being given power while the economy remained capitalist. This betrayed the working class, they claimed, by giving them a stake in the capitalist economy, thus preventing their radicalisation. It was part of the process by which Social Democratic leaders hoodwinked and betrayed the workers into supporting capitalism, rather than rising up and overthrowing it. Proper Communists, at least at that time, were much more in favour of letting capitalism become as predatory, rapacious and exploitative as possible in the hope that this would radicalise more members of the working class, who would then revolt and overthrow the capitalist system.
Furthermore, Maggie Thatcher attempted to make capitalism popular by spreading share ownership. She did so by making a percentage of the shares in the firms she privatised available to small investors, including their workers. Ten or twenty years after she did so, these shares had, of course, nearly all been gobbled up by the big capitalists. Nevertheless, this raises the questions: if it’s fine for Maggie Thatcher to offer shares in private industry to the workers, who were employed in them, then why, under the same logic, is it wrong for Corbyn and Labour to do so? After all, if the objective is to make employees work harder and be more loyal because they actually have a stake in those companies, then this should be a worthy goal no matter which government is in power. Correct?
As for workers having first refusal to buy out firms when they’re being sold off, this has been done in Argentina. There workers were given the option to buy and turn into co-operatives companies that were going to be shut down. I’ve put up here documentaries on them, one of which included Naomi Wolf as one of the talking heads. Although the vast majority have since been returned to capitalist ownership, it did save many firms. The proposal is essentially a sound one. If it’s turned down or sneered at, then this shows that the Tories and the capitalist class have absolutely no interest in creating a prosperous economy or jobs, but simply lining their own pockets at the expense of their employees.
And laws preventing company bosses from paying themselves excessively high wages beyond the rest of their employees have been in place in Japan since forever and a day. They were introduced by the ruling Liberal Democratic Party as part of their programme to create a harmonious, middle class society governed by the social consensus and which avoided creating social stress through excessively polarised incomes. Nobody was to be too rich, or too poor.
Japan is a very authoritarian society, with a lot wrong with it. It is extremely sexist and women are very definitely seen as belonging in the home. There is little welfare provision, which has become a major issue as increasing numbers of Japanese have been thrown out of work by the long-running economic crisis. There is also an element of racism in Japanese political culture. Only full-blooded Japanese have full civil rights. This means that the descendants of Korean immigrants or prisoners of war, that have been there for three generations, are effectively excluded from mainstream Japanese society. But their concern to ensure social harmony through limiting excessive management pay and fostering solidarity between management and workers is a good one, and doubtless has also contributed to Japan becoming one of the world’s strongest economies, apart from their reputation for quality products and hard work.
Corbyn and McDonnell have thus recommended policies that should lead to the revival of British industry, and which also have their echoes schemes put into practice by the political Right. There is thus little good reason to reject them.
Following on from Mike Sivier’s post on the Lib Dem’s promotion of employee ownership, there have been plans to increase worker’s participation in management for a long time. Apart from the 19th century co-operative movement, there was the League for Democratic Control at about the time of the First World War. The Labour Party formulated a number of suggestions for putting it into practice in the 1980s, which, if they had been passed, would have been the most radical in Europe. Industrial democracy has also been the subject of a number of books, one of which is Tom Schuller’s Democracy at Work (Oxford: OUP 1985). This begins with this quotation from the Liberal Industrial Inquiry of 1928.:
‘While as a citizen he (the thinking workman) has an equal share in determining the most momentous issues, about which he may know very little, his opinion is seldom asked or considered, and he has practically no voice in determining the conditions of his daily life, except in so far as trade-union action has secured it. Indeed, where management is inefficient and autocratic he is frequently compelled to watch waste and mistakes of which he is perfectly well aware without any right of intervention whatever. And this, despite the fact that when these errors issue in diminished business for the firm concerned, he, and not the management, will be the first to suffer by short-time working or complete loss of employment’.
In the introduction, Schuller also states that
‘this book’s premise is that we should be actively exploring ways of achieving a more equitable distribution of power at the workplace, but it does not engage directly with the broader currents of political discourse. It contains no concise summaries of relevant theoretical approaches and few descriptive accounts of participation initiatives or systems. Its aim is modest; to provide a relatively straightforward way of looking both at the general theme of worker participation and at specific issues which have contemporary significance, emphasizing meanwhile that the contours of the debate are undergoing constant change’. (3).
Other sections in the Introduction discuss Participation: the Moving Target; the extension of collective bargaining, examining areas, organisational levels, and timing; Beyond, besides, and between bargaining: dimensions of participation; ‘Industrial’ and ‘Economic’ Democracy; and has a conclusion. It then goes on to the following chapters:
1. The Changing Profile of Work, with sections on workforce profile; the union movement; and organizational structure.
2. Conflicts and Powers, which has sections on power. This section in turn analyses the various types of power, financial, legislative, formal position, expertise, market position, technology, state policy and ideology.
Chapter 3 is entitled, Stages, Cycles, and Rhythms, and has sections on evolution by stages, cycles in democratization, rhythms in the promotion and suppression of industrial democracy, economic activity and employment, the role of government, organized labour, and social trends.
Chapter 4 is on Self-Ownership and Self-Control: Financial Participation and Economic Democracy, comprising sections on ownership and control and individual financial participation: profit-sharing. This section in turn has brief discussions on profit-based financial participation, executive share options or incentives and savings-related schemes. The next section in this chapter is on internal democratisation in the form of worker’s co-operatives. This discusses issues of autonomy, internal democracy, and models of democratic experience. After this there are sections on collective financial participation in wage-earner funds and a conclusion.
Chapter 5 is on Occupational welfare and capital control: participation in the management of pension schemes. This has sections on the growth of participation, incorporation and excorporation, and employee trustees and the control of capital. This last section also briefly discusses the roles of active shareholders, investment policy in individual funds and collective action.
Chapter 6 is on changes to the work environment, relating to issues of health and safety. This has sections on conceptual trends in health and safety, the effect of participation in joint health and safety committees, and consultation and participations, which Schuller describes as a process of ‘fuzzy oscillation’.
Chapter 7 is on Political and Industrial Democracy. The has sections on the way the Whitley Councils in the Civil Service transformed the workers in this sector from civil servants to public employees; the management of public servants; senior officials and formal occupational participation; and professional determinism, which examines how far the nature of the Civil Service as a profession meant that it already had an in-built measure of employee control.
Chapter 8 is on Worker Directors, referring to the Bullock Report of the 1970s and the issue of workers’ representatives in the boardroom. This has sections on the origin of the move towards board-level representation, board functions, and the process of representation at board level.
Chapter 9 is on the division of labour and the role of skill in determining this. This also has sections on intrinsic skills in technology and the labour process, instrumental skills and segmentation, occupationalism and the sexual division of labour; and participative skills, and the process of learning how to represent.
The last chapter is on collective interests and the dimensions of solidarity.
The book thus provides an overview of some the issues involved in industrial democracy and worker participation and representation. One reason, perhaps, for the lack of concrete examples of legislation for worker’s control is that the author considers that the boundaries and issues involved are always changing. Schuller suggests that some of these issues may only be solved by the workers themselves through their own practical experience. The book concludes that ‘perhaps the strongest rationale for worker participation is that it provides opportunities for people to learn from each other by formulating issues, and maybe even solving them, through some form of collective enterprise.
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