Posts Tagged ‘small Businesses’

Open Britain on How Rishi Sunak Is Out of Touch as a Hedge Fund Millionaire

April 19, 2023

Here’s another report on the massive failings and sheer contempt for democracy and proper political conduct by the Tories. It focuses particularly on Rishi Sunak, a multi-millionaire from the hedge funds, who’s married to a tech millionaire. He therefore has absolutely no clue about how his policies are harming ordinary, working Brits.

‘Dear David,

Rishi Sunak has now been PM for nearly six months. Hardly the fresh start we were promised, his premiership has been stained by the same non-stop cycle of scandals, investigations, and inquiries that embarrassed the country under Truss and Johnson. 

The Raab inquiry; Scott Benton’s cash-for-favours scandal; Sunak paying Johnson’s legal fees; Richard Sharp and the BBC; Matt Hancock’s leaked texts; Keeping the illegal Rwanda flights plans alive. Sunak is not just trapped by the ineptitude and corruption of his predecessors – he’s completely embroiled in their insular and out of touch world. 

This week, a new scandal dropped that once again calls into question Sunak’s now infamous promises for “integrity, accountability and professionalism at every level”.

The PM failed to declare shares held by his wife, Akshata Murty, in a childcare agency that will receive a big boost from the government. Sunak and his wife stand to benefit from Jeremy Hunt’s budget, which offers payments to childminders of £1200 when they sign-on to childcare agencies like Murty’s Koru Kids (mentioned by name on the UK government website). 

Following on from outrage about Mrs Murty’s non-dom tax status, her financial connections to Shell and Goldman Sachs, and Sunak family ties to tax havens in the Cayman and British Virgin islands – this simply reinforces Sunak’s image as a PM completely detached from the reality most people live in. Sunak is the first PM ever to come from the world of hedge-funds and venture capital – and (probably) the first to be married to the heiress of a global tech-giant. 

Sunak never fails to display how out of touch he is. Whether he’s talking about his lack of “working class friends” or admitting that he’s taken money from deprived parts of the UK, he comes across as someone that lives in an entirely different reality. 

This week, we saw it again with his “Maths to 18” plans. Downing Street reportedly had to ditch their social media campaign after the only spokesperson they could find for it later claimed Sunak’s maths education plan was “short-sighted, out of touch and grossly unfair on students.”

Westminster in 2023 is like a remote islet, growing more and more distant from our real lives and instead cuddling up to oligarchs, aristocrats, and billionaires. It’s a systemic problem that can only be resolved with serious reform. Merely voting in another party without a mandate to fix it is not enough. 

It’s why I’m committed to ending FPTP, enforcing a strong and binding ministerial code, seeing off Tufton Street think-tanks, fixing campaign finance law, and bringing back our human rights in full force – and Open Britain is too. It’s the only way to bring this Westminster club back down to Earth. 

All the best,

Matt Gallagher
Open Britain’ 

Robin Ramsay of the conspiracy/ parapolitics magazine Lobster has repeatedly stated that the concentration on the financial sector by Thatcher and successive governments, including Tony Blair, has seriously harmed British manufacturing. And it’s not just the working class that are being harmed by the Conservatives. I came across a video today about how Britain’s small businessmen and women were also being harmed by the Tories’ promotion of big business above everything else. I’m not surprised. Margaret Thatcher always made much of her background as the daughter of a shopkeeper, while Ted Heath had the nickname ‘the grocer’. But for a long time now small businesses have been suffering from Thatcherite policies. Blair favoured the big supermarkets over small community shops, and that has also damaged communities. Small, local shops employ more people, and so when the big supermarkets moved into an area, when these shops closed down due to the competition, unemployment in the area also rose. Big businesses are also slow to pay their suppliers, and as these may be small businesses, they’re particularly in danger of going bust. There were demands on John Major’s government, I recall, to pass legislation requiring the big companies to pay their small suppliers promptly, but this disappeared. The statement that voting in another party without a mandate for reform won’t solve the problem is quite right. Starmer seems to me to be all too ready just to carry on Blair and the Tories’ policy of benefiting the financial sector at the expense of everyone else, just as Blair did.

For ordinary working and lower middle class Brits to benefit instead, this policy has to be attacked and discarded.

My Video Supporting 38 Degrees’ Call for Videos about Bus Franchising

March 7, 2023

A few days ago I got another email from the internet democracy organisation 38 Degrees calling on their members and supporters to make and post to them their videos telling how terrible the bus services are in the area. 38 Degrees are pushing for the introduction of franchising to stop the endless cuts to bus services. I posted the video below to them, which I’ve also uploaded on my YouTube channel.

In the video I explain how the cuts to the bus services in my part of Bristol has meant that local people are no longer able to travel to the centre of town, nor to the city’s hospitals. We also cannot easily travel to the neighbouring towns of Keynsham and Bath, where many people from Bristol go to work. The changes have also had an impact on local businesses. Since the services were changed a few years ago, the buses have gone past local shops and shopping centres but do not stop at them. This has very obviously hit them, especially at a time when many small businesses have been struggling due to the lockdown and the increase in people shopping on line.

Not everybody has a car, and taxis are expensive. This is why we really need a bus franchising system and proper funding to support it.

The Ideas of 19th Century French Socialist Louis Blanc

January 17, 2023

Plamenatz’s book, Man & Society: From Montesquieu to the Early Socialists, also contains a paragraph on the ideas of Louis Blanc. Blanc was a French socialist best known for creating the National Workshops established by the French government during the 1848 revolution. These were intended to be cooperatives set up by the government to provide work for the employed. They would use part of their profits in buying up other workshops and so expanding this socialised sector of the economy. In practice the scheme was handed over to civil servants, who were resolutely opposed to them. The result was that the work offered by them was mostly in menial tasks like digging ditches. They were not very popular and rapidly closed down. However, there was more to Blanc’s socialism than the Workshops, and his views are very similar to those of 20th century social democrats. By which I mean real social democrats, who believe in a mixed economy, rather than the Labour right which has fallen over itself embracing neoliberalism.

Plamenatz writes of Blanc

‘Louis Blanc wanted the state to control all the banks, the factories, the railways, the insurance companies and the larger commercial enterprises; and he also wanted manhood suffrage. Small businesses should remain in private hands. Like many social democrats in the west today, he called for an economy divided into a ‘private’ and ‘public sector’, over which the State should exercise a general control. But he never really went into the question of how the State should manage the economy and the public sector, and how this management could be reconciled with effective democracy. He also neglected the question put by Saint-Simon: ‘What is the structure of authority appropriate to a large-scale economy, centrally controlled?’ (pp.286-7).

I like the idea of the National Workshops and really wish they’d been a success, though it was inevitable that the conservative ministers and civil servants put in charge of them should be determined to run them down. I also prefer his version of socialism that leaves room for a private sector. Some things, I believe, are better off in the hands of private industry and I think there should be a sphere outside the control of the state in which a person’s business is his or her own, in contrast to the mass, totalitarian societies of communism.

To Win in the Countryside, Labour Can Start by Defending the Small Farmers

September 8, 2020

Mike put up a piece yesterday reporting the prediction that if Boris and the Tories get the no deal Brexit their paymasters, the hedge funds, want, 1/3 of Britain’s farmers will go bust in the next five years. These are going to be the small farmers, who were suckered into believing that leaving the EU would make things better for them. They were wrong, and Mike asks how much sympathy we should have for them, considering they voted for Brexit. Actually, it’s not difficult to understand how. We were taught about the EEC as it was then in geography at my old school, including the Common Agricultural Policy. I can’t remember the details, but this was geared to granting subsidies and rewarding the much-less efficient farming systems of France and Germany, and penalised our agricultural sector, which is much more mechanised and employs far fewer people. The system of subsidies, if I remember correctly, also tranferred money and funding from the advanced agriculture of northern Europe to the less developed farms of the grain belt around the Mediterranean. Given that the Common Agriculture Policy actually put our farmers at a relative disadvantage, it isn’t hard to see why our farmers, like the fishermen, wanted to leave.

However, the big farmers were advised not to vote for Brexit, didn’t, and probably won’t suffer quite as much as their smaller cousins. However, I do think this crisis offers Labour an opportunity to show Britain’s rural communities that it hasn’t forgotten them. There have already been discussions about how Labour could win in the countryside, including a Fabian pamphlet about the issue. Well, I think Labour can start by following the example of the Swedish Social Democrats in the 1920s and 1930s. I can’t remember where I read it, but I read somewhere that the Social Democrats’ 50 year stay in power began in the 1920s when it backed the small, peasant farmers against the threat of bankruptcies and land seizures. I think the party and its members not only opposed these in parliament and local councils, but actually physically turned out to stop the bailiffs seizing individual farms and evicting the peasant farmer.

There’s a crisis going on in the countryside. If you watch the Beeb’s Countryfile, you’ll have seen reports about British farmers rural communities being under threat. Apart from the continuing problems of British agriculture, many rural communities are also suffering from cuts to local services and a lack of housing that local people can afford, rather than rich outsiders. Also, if you read George Monbiot’s Captive State, you’ll also know how the corporativism of New Labour and now the Tories actually harms farmers and local small businesses. Corporativism gives government subsidies and positions to big business in return for their donations. New Labour especially favoured the big supermarket chains, like Sainsbury’s, and gave it’s chief, David Sainsbury, a position on one of regulatory bodies, because Sainsbury at the time backed the party and donated to it. However, the supermarkets offer their cheap food at the expense of the producers, who are bound into manipulative and highly exploitative contracts. One of the supermarkets boasted a few years ago about the money it was giving to charity. In fact, none of that money came from the supermarket itself – it was all taken from its producers. At the same time, supermarkets undercut small businesses, like the local butcher, greengrocer and so on. But this also creates unemployment, because small businesses like theirs employ more people. If Labour wants to improve conditions in the countryside for small businesses like Arkwright’s in the classic Beeb comedy series, Open All Hours, it has to attack corporativism and the big supermarket chains. But I can’t see that happening under a Blairite like Starmer.

I expect that most of Britain’s farmers are probably Conservatives. But this doesn’t alter the fact that, whatever they believe, the Tories have abandoned them and their policies are actively harming small farmers and businesses and rural communities. The Labour party can start winning back the countryside by actively and obviously defending those hit by Tory policies.

And that means protesting against the closures of small farms when the Tories’ no deal Brexit hits them.

From 1996: Downsizing Guru Realises It Doesn’t Work

July 23, 2020

Remember the downsizing craze of the 1980s and 1990s, when Thatcherite economists all demanded that big firms should slim down through mass lay-offs and sackings? Firms were overstaffed, and it was all flab that needed to be cut out to make them ‘lean and mean’ in the marketplace.

Looking back through my scrapbooks of newspaper clippings, I found this article by the Daily Mail’s industrial correspondent, David Norris, ‘Guru of the job cutters admits downsizing has its down side’ in that paper’s edition for Monday, May 13, 1996. The article runs

‘An international economic guru who advocated massive job-shedding to make big business lean and fit has admitted he got it all wrong.

American Stephen S. Roach coined the word ‘downsizing’ in the early Eighties to sum up his philosophy that ruthless workforce pruning was needed to boost profits and productivity.

It was seized on around the world – not least in Britain, where hundreds of thousands of full-time jobs have disappeared over the last ten years.

His astonishing turnaround is certain to provoke more outrage against ‘fat-cat’ bosses, who have often used huge payroll savings to justify big salary rises for themselves.

‘Downsizing’ became a boardroom buzzword, with directors proudly telling shareholders that they were able to  pay higher dividends through redundancy-related cost-savings. The slick  term was more acceptable than talking of throwing people out of work.

Middle England has been worst hit, with thousands of white-collar jobs axed. High street banks have between them got rid of 90,000 staff since 1989. Downsizing has created a climate of insecurity which many blame for the still sluggish economic recovery. And the Government has lost millions of pounds in tax from workers axed from previously labour-intensive industries.

It emerged yesterday that Mr Roach, chief economist at the investment bank Morgan Stanley on Wall Street, announced his conversion in a memo to his firm’s clients.

He confessed he had now concluded that relentless cost-cutting was bad for business. ‘If you compete by building, you have a future. If you compete by cutting, you don’t’,’ the contrite guru said.

‘For years I have extolled the virtues of America’s productivity-led recovery. While I think it’s safe to say that such a scenario has become the new mantra for U.S. businesses in the 1990s, I must confess that I’m now having second thoughts.”

And he warned of a worker backlash ‘not on the shopfloor, but in the polling booths’.

That forecast was echoed by TUC boss John Monks yesterday.

He said: ‘Downsizing has done more than any other single business strategy to create the deep insecurity felt in Britain.

‘I hope this will herald a re-think in Britain’s boardrooms. Long-term success comes from steady investment and skilled, motivated staff.”

Around 38 per cent of Britain’s workforce – nearly ten million people – are now not in full-time permanent jobs. They are either in part-time or temporary work, or self-employed.

The main full-time job creation thrust has come from small firms, employing 20 staff or fewer. They have taken on 2.5 million extra workers in ten years.

Big retail chains have also taken on more workers. Tesco recently announced it was recruiting 4,500 to pack bags and generally assist shoppers. Last month it revealed record profits.

Late payment is still a problem for 45 percent of small and medium businesses.

The average time taken to be paid has risen from 52.8 days in 1994 to 53.2 this year, according to a survey by the Confederation of British Industry and accountancy firm Coopers & Lybrand.’

Ha-Joon Chang describes in his book, 23 Things They Don’t Tell You About Capitalism, how downsizing has literally driven firms bankrupt. They cut back their staff and plant so much in order to boost management pay and shareholder dividends beyond the point where they were economically viable. He argues that the most durable firms tend to be those where the state also has a stake in the firm, and so in maintaining it, or where the workers are also strongly involved in its management. Chang’s not anti-capitalist, but he states that shareholders are fickle – the moment they think a firm is no longer as profitable as another company, or is in trouble, they’ll sell their shares and go elsewhere.

Despite this attack on downsizing’s credibility and the loss of government revenue it has created, job insecurity has increased massively to the point where it is normal. Blair and Gordon Brown are as responsible for this as the Tories, as they accepted the neoliberal, Thatcherite dogma that the labour market had to be fluid and flexible. Which means that firms should find it easy to lay off staff and their should always be a supply of cheap workers waiting to be taken on.

Thatcherism has been a disaster. This clipping from a quarter of a century ago shows one of its central doctrines was recognised as such by the man who invented it even them. But it’s kept the rich richer, and the poor poorer, and so despite articles like this, it’s still being pushed.

And the result is a Britain of despair and poverty where working families, never mind the unemployed and disabled, are dying of starvation or forced to use food banks.

 

Rioting and Looting Hurts Black People and their Businesses

June 9, 2020

It shouldn’t need to be said that rioting and looting hurts people, regardless of their colour. But the point that it also harms Blacks as well as Whites seems to have been lost on some people over the other side of the Pond. So far in Britain the Black Lives Matter protests seem to have been largely peaceful with the exception of those at the weekend at Downing Street, where there seem to have been attacks on the police. I say ‘seem’, because although the footage of the attacks look convincing, like many other people I remember the way the Beeb reversed the footage of the attack on the miners by the police at Orgreave colliery during the miner’s strike in order to make it look like the miners were attacking them. The reality was that it was the other way round. I hope this hasn’t happened this time, but the Beeb is so riddled with Tory bias and the blatant falsification of the news that you can’t be sure.

In America it’s been rather different. Some of the protests over there have descended into riots and people’s businesses have been trashed and looted. And they have included those belonging to Black people. ‘Young Rippa’ is a Black American Conservative, who has a channel on YouTube. The other day he put up a long video of about 20 minutes fiercely attacking the looting and rioting. His piece included a short video posted by a middle-aged Black lady. She was part-owner of a small business, working alongside seven other people. As he points out, that’s not unusual for small businesses. It had been broken into and trashed. She was there standing in some of the broken glass and other wreckage with what looked like her employees and co-workers. She angrily asked the viewer the rhetorical question ‘Do you think that’s got anything to do with Black Lives Matter?’ It’s a good question. It doesn’t seem to have absolutely anything to do with saving Black lives, or protesting poverty and despair to me. It looks far more like opportunistic criminals helping themselves at the expense of the law-abiding.

But weirdly some people have got it into their head that looters are some kind of anti-racist heroes. ‘Mr H Reviews’ is another YouTube channel, which reviews SF, Fantasy and Horror films and television shows. Again, it seems to come from a broadly conservative perspective, but that doesn’t disqualify it from being worth watching. Nearly a week ago, on June 3rd, ‘Mr H’ put up a piece about the X-Men actor Evan Peters being accused of racism and forced to make an apology after he had a tweeted his approval of a piece of footage of the LA police arresting a suspected looter. This was another case of the ‘cancel culture’ in which extreme left-wing activists to try to stop their opponents being heard. I am very much aware that same cancel culture exists on the right, and that Conservative activists and media monitoring groups are also doing their level best to make sure that only Conservative voices are heard. But on this occasion, assuming that the situation was as Mr H describes, he’s right to attack it.

Rioters and looters don’t help Black people, and it is not racist to condemn them.

I was talking to a Black friend a few years ago, whose business was also trashed during riots. He had had a small business near the centre of Bristol. But it had been hit and looted during the 2012 riots. As a result, he packed up and moved out. Now those riots weren’t about race, but the effect was the same: a Black entrepreneur trying to better himself had his livelihood trashed and destroyed. I don’t know if he employed anyone, but small businesses obviously help the economy and wider community. When they make a profit, it allows them to employ other people and purchase others’ goods and services. Moreover, the small grocers, butchers, fishmongers, greengrocers and so on are actually better for the community than the big supermarkets. They’re less efficient, but employ more people. Which means that those people have work, money, and so are able to buy others’ goods and services. And so everyone in the community benefits from small, local businesses.

The Black Lives Matter protests are all about improving Black people’s lives. It’s not just about police violence, but also about the racism that are holding Black people back and achieving equality.

But they can’t do this if criminals smash and destroy their businesses and livelihoods.

Let’s support peaceful protest, and condemn any violence and looting, regardless of the colour of those doing it.

Here are the two videos I mentioned. I haven’t watched Young Rippa’s all the way through as it’s long and a bit repetitive, and so can’t comment on all of it. I don’t share his political Conservatism, but absolutely support his condemnation of those just trying to stop ordinary Black people making a decent living for themselves and their families.

 

Shaw’s Classic Defence of Socialism for Women Part Four

May 16, 2020

George Bernard Shaw, The Intelligent Woman’s Guide to Socialism, Capitalism, Sovietism and Fascism, foreword by Polly Toynbee (London: Alma Classics 2012).

Conclusion

While this a great book I immensely enjoyed, it also very much the product of its time. Shaw is unrealistic and more than a little sectarian himself in his advocacy of the equalization of incomes. He regards it as the real, fundamental goal of socialism and that unless they too believe in it, others advocating nationalisation aren’t real socialists. But the Soviets and various other socialist groups have tried the equalisation of incomes, and it didn’t work. But nevertheless, even if wages shouldn’t be exactly the same, the differences in wealth should very definitely be far less than they are now.

Similarly, I don’t entirely agree with his views on the unions. Now other socialists also struggled with the problems they posed for working class power. Trade unions by themselves aren’t socialist organisations. Their role is to fight for better wages and conditions for the workers, not to replace capitalism, and Lenin himself pondered how workers could go from ‘trade union consciousness’ to socialism. In the 1980s it was found that trade unionists often voted Tory, because of the improved quality of life they enjoyed. But the unions are nevertheless vital working class organisations and are rightly at the heart of the Labour party, and have provided countless working class leaders and politicians.

Shaw was right about the coal mines, and his description of the results of the great differences in viability between them and the comparative poverty or wealth of the mining companies was one of the reasons they were nationalised by Labour under Clement Attlee.  He’s also right about nationalising the banks. They don’t provide proper loans for the small businessman, and their financial shenanigans have resulted, as Shaw noted in his own day, in colossal crashes like that of 2008. He is also right about the rich sending their money abroad rather than contributing to the British economy. In his time it was due to imperialism, and there is still a hangover from this in that the London financial sector is still geared to overseas rather than domestic investment. It’s why Neil Kinnock advocated the establishment of a British investment bank in 1987. Now, in the early 21st century, they’re also saving their money in offshore tax havens, and British manufacturers have been undercut and ruined through free trade carried out in the name of globalisation.

His arguments about not nationalising industries before everything has been properly prepared, and the failures of general strikes and revolutions are good and commonsense. So is his recommendation that capitalism can drive innovation. On the other hand, it frequently doesn’t and expects the state to bail it out or support it before it does. I also agreed with Shaw when he said that companies asking for government subsidies shouldn’t get them unless the gave the government a part share in them. That would solve a lot of problems, especially with the outsourcing companies. They should be either nationalised or abolished.

I can’t recommend the book without qualifications because of his anti-religious views. Shaw also shows himself something of a crank when it comes to vaccination. As well as being a vegetarian and anti-vivisectionist, which aren’t now anywhere near as remarkable as they once were, he’s against vaccination. There are parts of the book which are just anti-vaxxer rants, where he attacks the medical profession as some kind of pseudo-scientific priesthood with sneers at the religion of Jenner. He clearly believes that vaccination is the cause of disease, instead of its prevention. I don’t know if some of the primitive vaccinations used in his time caused disease and death, but it is clear that their absence now certainly can. Children and adults should be vaccinated because the dangers of disease are far, far worse.

Shaw also has an unsentimental view of the poor. He doesn’t idealise them, as poor, ill-used people can be terrible themselves, which is why poverty itself needs to be eradicated. In his peroration he says he looks forward to the poor being exterminated along with the rich, although he has a little more sympathy for them. He then denies he is a misanthrope, and goes on to explain how he likes people, and really wants to see people growing up in a new, better, classless socialist future.

While I have strong reservations about the book, it is still well-worth reading, not least because of Shaw’s witty turns of phrase and ability to lampoon of capitalism’s flagrant absurdities. While I strongly reject his anti-religious views, his socialist ideas, with a few qualifications, still hold force. I wish there were more classic books on socialism like this in print, and widely available so that everyone can read them.

Because today’s capitalism is very much like the predatory capitalism of Shaw’s age, and becoming more so all the time.

 

 

 

Shaw’s Classic Defence of Socialism for Women Part Two

May 16, 2020

George Bernard Shaw, The Intelligent Woman’s Guide to Socialism, Capitalism, Sovietism and Fascism, foreword by Polly Toynbee (London: Alma Classics 2012).

Trade Unions

He discusses the unions, which he describes as ‘proletarian capitalists’. They are there to protect the workers, who have to sell their labour just as the businessman has to sell the product they create. Unions are there to ensure the workers are able to charge the highest price they can for their labour. He also discusses strikes and lockouts, including the violence of some industrial disputes. Scabs need police protection against being beaten, and angry workers will tamper with the equipment so that anyone using it will be injured. They will also place fulminate of mercury in chimneys to cause an explosion if someone starts up the furnaces.

Party Politics and Socialism

Shaw describes the class conflict between the Tories, representing the aristocracy, and the Liberals, who represented the industrial middle classes. These competed for working class votes by extending the franchise and passing legislation like the Factory Acts to improve working conditions. However, each was as bad the other. The aristocracy kept their workers in poverty in the countryside, while the middle classes exploited them in the factories. The laws they passed for the working poor were partly designed to attack their opponents of the opposite class.

He goes on to give a brief history of British socialism, beginning with Marx, William Morris’ Socialist League, and Hyndeman’s Social Democratic Federation. These were small, middle class groups, disconnected from the British working class through their opposition to trade unions and the cooperatives. It was only when British socialism combined with them under Keir Hardie and the Independent Labour Party that socialism became a real force in working class politics. The Fabian Society has been an important part of this, and has made socialism respectable so that the genteel middle classes may join it as Conservatives join their Constitutional Club.

Shaw believed that socialism would advance, simply because of the numerical supremacy of the working classes, and that soon parliament would be full of Labour MPs. However, he also recognised that many members of the proletariat were anti-Socialist. This is because they depended for their livelihood on the businesses serving the idle rich. He called this section of the working class the ‘parasitic proletariat’. The working class is also distracted away from socialism through lotteries and so on.

Democratic, Parliamentary Socialism and Nationalisation

Shaw argues strongly that socialism could only be established through democratic, parliamentary action. General strikes wouldn’t work, as the employers would simply starve the workers out. The strikes intended to stop the outbreak of the First World War had failed the moment the first bomb dropped killing babies. Violent revolutions were purely destructive. Apart from the human lives lost, they destroyed the country’s vital industrial and economic structure. Socialism needed to build on this, not destroy it. Similarly, confiscating the capitalists’ wealth, either directly through nationalisation without compensation, or by taxing capital, was also counterproductive. The capitalists would simply sell their shares or unwillingly surrender them. The result would be bankruptcy and mass unemployment. This would result in further working class unrest, which would end in a counterrevolution.

The only way socialism could proceed would be by long preparation. You should only nationalise an industry once there was a suitable government department to run it. Compensation should be given to the former proprietors. This did not mean robbing the workers to pay their former exploiters, as the money would come from taxing the upper classes so that the class as a whole would be slightly worse off than before, even though the former owners were slightly better off.  You can see here and in Shaw’s warning of the ineffectiveness of general strikes the bitterness that still lingered amongst the working class after the failure of the General Strike of the 1920s.

Nationalisation could also only be done through parliament. There were, however, problems with parliamentary party politics. If the socialist party grew too big, it would split into competing factions divided on other issues, whose squabbles would defeat the overall purpose. Party politics were also a hindrance, in that it meant that one party would always oppose the policies of the other, even though they secretly supported them, because that was how the system worked. We’ve seen it in our day when the Tories before the 2010 election made a great show of opposing Blair’s hospital closures, but when in power did exactly the same and worse. Shaw recommends instead that the political process should follow that of the municipalities, where party divisions were still high, but where the process of legislation was done through committees and so on parties were better able to cooperate.

Limited Role for Capitalism

Shaw also argued against total nationalisation. He begins the book by stating that socialists don’t want to nationalise personal wealth. They weren’t going to seize women’s jewels, nor prevent a woman making extra cash for herself by singing in public or raising prize chrysanthemums, although it might in time be considered bad form to do so. Only big, routine businesses would be nationalised. Small businesses would be encouraged, as would innovatory private companies, though once they became routine they too would eventually be taken over by the state.

It’s a great argument for a pluralistic mixed economy, of the type that produced solid economic growth and working class prosperity after World War II, right up to 1979 and Thatcher’s victory.

 

 

 

 

 

 

 

 

 

 

 

 

 

Shaw’s Classic Defence of Socialism for Women Part One

May 16, 2020

George Bernard Shaw, The Intelligent Woman’s Guide to Socialism, Capitalism, Sovietism and Fascism, foreword by Polly Toynbee (London: Alma Classics 2012).

Introduction

This is a great book. It’s the kind of book on socialism I was very much looking for in the 1980s when the papers were all praising Margaret Thatcher and alleged superiority of capitalism to the heavens. What I wanted then was a classic defence of socialism, which clearly showed the destructive nature and defects of capitalism, and how these would be removed for the better under a proper socialist government with a clear idea of what needed to be done and how it could be achieved.

This is a rather long review, so I’ve split up into four parts.

The book was written between 1924 and 1928, when it was first published. George Bernard Shaw is one of the great figures in British socialism. An Irishman, he was one of the founders of the Fabian Society along with Sidney and Beatrice Webb, and editor of its anthology of socialist writings, Fabian Essays. He’s best known for his play Pygamalion, about a linguist, Henry Higgins, who takes Eliza, a rough working class girl, and tries to mould her so she can pass as a lady of the genteel classes. It was filmed as the musical My Fair Lady, starring Rex Harrison.

Shaw wrote it between 1924 and 1928, when it was published, at the request of his sister-in-law, Lady Cholmondley. She had asked him to write a letter explaining socialism for women. Shaw looked into it, and discovered that amongst the masses of literature about socialism, there weren’t any books that realised that there were such creatures. And, he adds in his ‘Instead of a Bibliography’, very few that recognised the existence of men either. The book’s addressed to a female audience. The reader is a ‘she’ and the examples given are taken from women’s lives, jobs and experience. Shaw recognises that most women are occupied as wives and mothers, or shop girls and workers in the great weaving mills, the common female roles at the time. But he also recognises and fully supports the fact that more professions were being opened up to women in science, law, medicine and so on. If done badly, this approach by a male writer can seem patronising, but Shaw, as a great writer, manages to avoid it. And even though it’s aimed at women, I greatly enjoyed it, and would recommend it to other blokes.

Capital, Equality of Incomes and Imperialism

Shaw tries to present complex ideas about capitalism by simplifying them down to the level of ordinary people’s housekeeping or domestic economy. He defines capital as left over money. It’s the money you have left after spending your income on rent, food and so on. This is the money that the idle rich, the landlords, invest in industry. And money’s only real value is for the food and clothing that it will purchase. You cannot eat money, and the food it will buy must be eaten or else it will be spoilt. Which means that money must be invested and used, rather than stored up.

At the heart of Shaw’s view of socialism is the equalization of incomes. He believed that everyone should earn exactly the same amount. Capitalism had created vast inequalities of wealth. On the one hand there was a small minority of the idle rich, who had to invent pastimes and diversions in order to use up their wealth. On the other was the vast mass of the poor, living at or near starvation level. He begins by asking the reader how they would divide up the nation’s wealth, challenging the reader to think for herself rather than let him do her thinking for her. He then proceeds to argue that it is impossible to decide that one person should be paid more or less than another because of their personal morality or ability. He sharply criticises the quasi-feudal economy of his day, when 90 per cent of the country worked to support the gentry, who only comprised ten per cent of the country’s population. They do nothing for it, don’t benefit from it, as they can’t personally eat or drink more than anyone else. And instead of investing it, they simply take it out of the country to invest it or spend it abroad. He also attacks British imperialism for this same thing. It hasn’t benefited the peoples we have conquered nor British tradespeople, businessmen and workers. It has led to the exploitation of Blacks abroad, who can paid far less than their British counterparts. Thus Britain is flooded with cheap imports, and British companies are going bust and their workers laid off.

The Progress of Capitalism and Decline of the Businessman Owner

Shaw then describes how the middle class have their origins as the younger sons of the aristocracy, with a few acute remarks on the absurd gradations of class which meant that a wholesaler was socially superior to a retailer. His father was a businessman, who had been a member of the gentry. As such he looked down on the elite Dublin shopkeepers, even though they were richer and entertained the local Irish aristocracy, which he very definitely couldn’t. But business was changing. The age of the small businessman in personal possession of his business, was giving way to joint-stock companies owned by their shareholders and managed by professional, salaried staff. Under pressure from the unions, they were combining to  form monopolistic trusts. This made them ready for nationalisation.

Nationalisation and the Coal Industry

He presents the coal industry as particularly needing nationalisation. At the time he wrote, there were a number of different mining companies. Some worked poor mines and were close to bankruptcy, others very rich. However, miners wages were set at the level the poor mines could afford, which was near starvation. Coal prices were set for the rich mines, and so prices were high. The miners were thus being starved and the consumer overcharged. The mines should thus be nationalised so that the workers were paid a fair wage, and the consumer a fair price. Shaw advocated nationalisation so that costs and prices could be brought down and goods sold at cost price.

Banks and the Stock Market

He also discusses and explains finance capitalism, stocks and shares, debentures, futures and the stock market. He warns the reader against get-rich-quick scams, like the bucket shops which will charge his prices for very risky shares. If people want to invest, they should do so with the government or municipality. Their shares won’t provide a great yield, but they will be safe. He recommends that banks should be nationalised because of the problems the small businessman had acquiring capital. The big businesses rely on financiers, who certainly won’t lend the small businessman wanting a modest loan anything. Neither will the banks. He pointed to Birmingham as an example for the future, as it had established a municipal bank to serve the customers the big banks wouldn’t.