This piece also appears in Solidarity:
Donald Trump has won the US Presidential election.
He won by tapping into the reality of and the fear of poverty and failure among millions of working-class Americans.
He won by exploiting the deep racial divisions that have blighted the US for centuries. He attacked all Hispanic workers when calling Mexicans criminals and rapists. By scapegoating Muslims.
He won because millions of Americans wanted to revolt against the political establishment. But this man is not the “blue collar billionaire” that his supporters dubbed him. Just a billionaire and also part of, the nastiest part, of the establishment!
Donald Trump is an idiot blowhard but the political functionaries around him are not. This election was probably won by the Trump camp calculating the “demographics” of the USA. By exploiting the different insecurities that many people feel. By understanding and approving of social fragmentation in the USA and working it to Trump’s advantage.
But in short, Trump made his appeal to a white working class which has been excluded by the powerfully destructive forces of US capitalism over the last 30 years as it moved its business to anywhere in the world where labour is cheaper.
Even when Trump made his appeal to African-Americans, in order to soften his image, he could not resist treating those communities as people whose real political views and interests were worthless to him. “What have you got to lose”, he said, “Your life couldn’t get any worse”. Unsurprisingly, the polls said 90% of those African-Americans who were voting, would not vote for Trump.
As shocked as we are by this result the truth is that Trump always stood a good chance of winning after the exit of Bernie Sanders from the election. With his calls for free college tuition, the removal of student debt, a national health service, Sanders represented a radical break from the status quo, but one which, with sufficient organisation on the ground, the whole of working-class American could have united behind.
By nominating a a presidential candidate who was always going to continue the Clinton-Bush-Obama programme of complacency, corruption and corporate-interest politics, the Democrats ensured discontent among millions of people would rise.
It was simply Hillary Clinton’s turn to pursue austerity and warmongering. Donald Trump was there to exploit and hypocritically ridicule this “establishment”.
What happens now? He may not be able to put through a programme of economic nationalism. He may not be able to expel thousands of Hispanic workers. But he will be able to load the Supreme Court front bench with conservatives. Already vulnerable abortion rights and the right of LGBT people to marry are under threat. Trade unions too will be under attack.
Trump’s election will give the green light to the neighbourhood vigilantes who fear young black men so much they are prepared to put a bullet in their back. The reactionaries who stand outside abortion clinics. The virulently anti-immigration Tea Party people. The organised fascists. And some of these people — the alternative right, the libertarians — are already part of Trump’s camp.
Not everyone who voted for Trump approve of his violent sexism. But many did. There were people who overlooked the serious charges of sexual assault; that is they do not think this behaviour is wrong. Not everyone who voted for Trump is racist. But many are. US racial divisions run deep.
One of the saddest things about this election is how long-time union members, who in different circumstances would regard themselves as anti-racist voted for Trump.
In places like West Virginia where there virtually no stable jobs Trump won big majorities. Maybe people just hear what they want to hear when Trump uses opportunistic lies like “I am going to make America great again”. But the coal mines will not reopen. The miners will not go back to work. This is a man who made his fame on the basis of ruthlessly telling people “You’re fired”. If big business is now in fracking, and not coal, that is where state support under Trump will go.
Capitalist rule as is in fact epitomised by the US two-party system, may have lost it’s legitimacy but without a socialist alternative to replace it, things can get much worse.
What can the socialist left do now? Passively regarding Trump voters as ignorant rednecks who could never be pulled away from his politics is wrong. Yes, many millions are poorly educated. But in this vastly wealthy society that is a shocking crime. As are these facts — that 21% of American children live in poverty, that 10% of workers are in low waged jobs, that 30% do not have health insurance and 40% do not have a pension.
Wherever the left is — in the US or in Europe — we all have to argue for class politics, the politics of justice and solidarity and at the same time making the strongest challenge we can against racism and xenophobia.
We do have a chance to do these things. Remember Bernie Sanders drew larger crowds than Trump for his attacks on Wall Street and the power and privilege of the “millionaires and billionaires.”
Here in Europe our struggle is against Boris Johnson, Marine Le Pen and Beppe Grillo. But it also against those in the labour movement who think anti-immigration sentiments and mild token opposition to the rule of capitalism is enough. And we also warn against a left which makes semi-populist stances against “the capitalist EU”, against globalisation, but never sets out a positive socialist programme: for equality, for working-class unity across borders, for the appropriation for the banks, for secure jobs and homes for all.
Events are showing us that campaigning for a social-democratic left “getting into power” is not enough. Getting working-class representation is about building a mass political labour movement organised around socialist politics. The necessity is not new but it has just got many times more urgent.
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Despite all the “gig economy” hype, Kim Moody argues, most workers are experiencing the rise of the crappy-job economy. But just-in-time production has created huge concentrations of workers—and vast potential for organizing. Photo: Nick Saltmarsh (CC BY 2.0)
From the US rank-and-file trade union magazine and website Labor Notes
Where’s our economy headed? Soon every factory worker will have to start driving for Uber, and the trucks will drive themselves—at least so the business press tells us.
But Kim Moody, co-founder of this magazine and the author of many books on U.S. labor, paints a different picture. Chris Brooks asked him to cut through the hype and describe what’s coming for working people and the opportunities for unions.
This is Part 1 of our interview with Kim Moody. Watch for Part 2, coming next week. —Eds.
Labor Notes: We read a lot about the “gig economy,” where workers cycle through multiple jobs using app-based companies like Uber, TaskRabbit [for everyday tasks such as cleaning or moving], and Mechanical Turk [for online tasks such as labeling images]. Is this really the future of work?
Kim Moody: One thing to notice is that, aside from outfits like Uber, most of these are not employers. They’re digital platforms where you can find a job.
The apps are not determining the hours and pay, or even the technology used on the jobs. It’s still employers that are calling the shots. So if jobs are getting worse, it’s not because people can find them digitally as opposed to reading them in the newspaper.
Also, discussions of the gig economy often assume that suddenly there are all these people who are multiple job-holders. But the fact is that the proportion of the workforce who have more than one job hasn’t changed much in 40 years.
The vast majority of them are people with regular full-time jobs who are also moonlighting, which is a very old thing. There are a lot of multiple job-holders, but there have always been a lot of them.
There’s also been talk of the “1099 economy.” Are we really moving towards a future where 40 percent of workers will be freelancing?
The idea that freelancers can become 40 percent of the workforce is science fiction.
There are two kinds of self-employed. The greatest number are the “unincorporated self-employed,” or independent contractors. Their numbers have been dropping for years.
The other group, the incorporated ones, are people who run a small business. They have grown somewhat, but they are still just 4 percent of the workforce.
You argue that the “gig economy” and “precarious work” concepts miss the mark because they don’t get at the most concerning change: the rise of the crappy-job economy. Can you talk about what’s changed for workers and why?
The first change is work intensification. Work has gotten dramatically harder in the last 30 years or so, and continues to.
That’s happened through lean production, which reduces the amount of labor to produce the same or greater amount of product or service and is tied to just-in-time production. Lean production began in the automobile industry in the 1980s, but now it is everywhere. It’s in hospitals, it’s in schools.
Another aspect is electronic and biometric monitoring, measuring, and surveillance, which allow employers to see how to get more work literally out of each minute. Another aspect is that the amount of break time has fallen dramatically since the ’80s.
Whether you are working full-time or part-time, in a precarious job or not, chances are you are going to experience some of this.
The other side is income. Wages have been falling since the early 1970s. More and more people are actually working for less, in real terms, than they used to. This also impacts everybody, although part-time and precarious workers are likely to get paid even less than full-time people.
And if you look at the Bureau of Labor Statistics projections for the fastest-growing jobs, millions of new jobs over the next decade or so, 70 percent are projected to be low-skill, low-pay jobs.
In other words, we are not heading for some big high-tech economy. Instead we are heading for a low-paid workforce with crappy jobs. The end of good jobs is nigh.
While app-based “just-in-time” gigs have gotten lots of media attention, far less attention has been paid to “just-in-time” production. Can you talk about why massive logistics hubs have emerged, and what they mean for union organizing?
In order for globalization to be efficient, low pay isn’t necessarily enough, because you have to move products from one location to another. That required a change in the way products are moved—the “logistics revolution.”
The time it takes to deliver a product to the point of sale is an important factor in competition. Like production, transportation now operates on a just-in-time basis. Products move faster.
The speed of trucks, planes, and trains did not change. What did was the way things are processed. Goods don’t stay in warehouses very long. Products arrive on rail and are cross-docked and moved out by truck in a matter of hours. This process has really only taken shape in the 21st century.
In order to make it work, the industry has created logistics clusters. These are huge concentrations of warehouses
where rail, truck, air, and water transportation meet and can be coordinated, usually electronically.
You might think, “Well, this is all very high-tech.” But it turns out that it still requires thousands and thousands of workers. In the U.S. there are 60 of these clusters, but three stand out: the Port of New York and New Jersey, the Los Angeles and Long Beach port area, and Chicago. Each of these employs, in a small geographic area, at least 100,000 people.
Now, the whole idea of outsourcing back in the 1980s was to break up the concentrations of workers in places like Detroit, Pittsburgh, or Gary. But what these companies have done now, inadvertently, is to recruit incredibly massive concentrations of manual laborers.
It has evolved in a way that might shoot these companies in the foot—because here you have the potential to organize vast numbers of poorly paid workers into unions. And there are attempts to do just that.
The other thing is that these clusters are tied together by just-in-time systems—which means you have hundreds, maybe thousands, of points in the transportation system that are highly vulnerable. If you stop work in one place, you are going to close down huge areas.
Media commentators and even presidential candidates blame the loss of millions of U.S. manufacturing jobs on trade and outsourcing. You’re skeptical. How do you explain it?
Outsourcing, if it is in the U.S.—which most of it has been—can break up the union, it can be very inconvenient to the people who lose their jobs, but it doesn’t necessarily eliminate jobs in the U.S. The jobs are just moved to a different, lower-paid group of workers.
Offshoring is another thing, but it’s not as widespread as people think. While moving production abroad has definitely impacted certain industries like steel, textile, and clothing, it cannot account for the loss of jobs we have seen. I estimate that between a million and 2 million jobs have been lost since the mid-’80s to imports and offshoring.
Manufacturing output, from the 1960s to just before the Great Recession in 2007, actually grew by 131 percent; the manufacturing sector more than doubled its output. If everything was going abroad, you couldn’t possibly have that kind of growth.
How can this be? I believe the answer lies in lean production and new technology, as we talked about earlier. Productivity literally doubled, and manufacturing jobs dropped by 50 percent or more. It’s the productivity increase that explains the loss of jobs.
It is very difficult for politicians to deal with this question, because it means attacking employers. It means saying, “You are taking too much out of your workforce.” And of course since most economists, politicians, and experts think that productivity growth is a wonderful thing, it’s beyond criticism.
There’s a lot of hand-wringing about the future of automation. Former Service Employees President Andy Stern has been making the media rounds claiming that driverless trucks are going to replace millions of drivers.
You can sell a lot of books with this pop futurology. It reminds me of the great automation scare of the 1950s. It was popular then to make predictions that there wouldn’t be any factory workers left.
And automation has reduced the number of factory workers, but there are still 8 or 9 million of them lingering around—despite all this technology, which is much greater than anything they predicted in the ’50s.
I have a shelf of books predicting “the end of work.” And yet we have millions more workers than we used to—the problem being that they are worse off than they used to be, not that they don’t exist.
There’s more! We also asked Kim Moody about workforce demographics and outsourcing to the South. Stay tuned for Part 2.
Read more: Everyone in this auto parts plant was a temp—until they all joined the union and threatened to strike.
Read more: The Cargo Chain is a beautiful poster/pamphlet that maps out how ship hands, longshoremen, truck drivers, railroad operators, and warehouse workers move goods across North America.
Based on a pamphlet from the Alliance for Workers Liberty:
There is a buzz about “Corbynomics”. That’s positive. For the first time in ages the neo-liberal economic orthodoxies insisted on by the Blairite Labour Party are up for debate and discussion.
What Corbynomics means, though, isn’t clear yet. It remains to be defined, not just in detail but even in broad outline. The left should plunge into the debate – and be bold.
There is a problem about the lack of left-wing Labour economic policy for Jeremy Corbyn and Shadow Chancellor John McDonnell to draw on. On ssues like the NHS, say, or renationalising the railways and Royal Mail, there is policy and they should do more to promote it – a lot more. On wider economic policy,there is more of a vacuum on the left, and a need for socialist ideas to fill it. But some of what Corbyn has said points in the wrong direction.
So, for instance, in the steel crisis, Corbyn and McDonnell said that if no capitalist buyer for Tata’s plants was found, they would support nationalising them – but only in order to find a buyer, and then sell them off again! Why didn’t they take the opportunity to argue to nationalise steel permanently, safeguard jobs, workers’ terms and conditions and communities, and run things differently to produce what we need for social purposes, like building housing, public service and public transport infrastructure?
In his speech on 11 March, John McDonnell talked about “fiscal responsibility” – presumably in order to buy space to attack George Osborne’s 16 March Budget cuts. But anxious promises that a future Labour government will balance current spending with current revenues – which Osborne had not done after six years as chancellor! – only feed the superstition that the economic problems since 2008 are due to the Blair and Brown governments overspending” on public services. They aren’t. The reason for the crash and the slump was giddy profiteering and speculating by the banks, not public spending.
Now, there is no special merit in a government increasing its debt burden. However, a rigid rule of balancing current spending with current revenues is foolish. As Simon Wren-Lewis, professor of economics at Oxford University and an adviser to McDonnell, has pointed out, “the rule is likely to make the deficit much less of a shock absorber, and so lead to unnecessary volatility in taxes or spending”. Also, since raising taxes is politically difficult, often slower in effect, and involves running uphill in times of economic crises which reduce the tax base, the rule has a built-in bias towards panic “volatility” (cuts) in spending. McDonnell has long campaigned against cuts. It looks as if he was pushed into these statements by the conservative elements in the Labour leadership office – part of a more general problem.
Who are the “wealth creators”?
Probably also a reflection of that section of the Labour leadership office were McDonnell’s off-key statements about “the wealth creators”.
“The Labour party are the representatives of the wealth creators — the designers, the producers, the entrepreneurs, the workers on the shop floor.” He claimed that his policy “has been welcomed this morning by [people] right across the business sector, business leaders, entrepreneurs as well as trade unions. The wealth creators have welcomed it”.
According to Mike Savage, a researcher at the LSE, inherited loot is 70% of all household wealth in Britain today, and is rising towards 80% by 2050. One of the most booming industries in slump-ridden Britain is the rise of “family offices”, where financiers work fulltime on managing and conserving the wealth of rich families. “Wealth creator” is conservatives’ pet term for capitalists. In fact capitalists’ riches come from the exploitation of the real wealth creators, the wage working class – or from active exploitation done not by the capitalists, but by their parents and grandparents.
McDonnell added “the workers on the shop floor” atthe end of his list of “wealth creators”, and put“designers” (i.e. some particularly skilled workers) at the start of the list. But the idea that a good economic policy can be pursued in alliance with the whole “business sector” is false. It can only prepare the way for a collapse when the CBI and other bosses’ groups denounce left-wing policies from Corbyn and McDonnell, which they will.
Is a National Investment Bank a left-wing policy?
Similarly, the leadership has focused on the call for a “National Investment Bank”, a publicly-owned bank able to borrow more cheaply than commercial banks because of its government backing, and lending for infrastructure and industrial projects.
The model must be the KfW, the German state’s federal investment bank, set up under the Marshall Plan in the 1940s and still going strong. It’s a safe, conservative model, maybe useful as a capitalist technique, but in no way anti-capitalist or socialist. The current chair of the KFW Supervisory Board is German finance minister Wolfgang Schäuble, Europe’s sternest austerity-hawk and central to the crushing of the anti-austerity rebellion in Greece.
There is nothing really socialist or even left-wing about the proposals for a Schäuble-bank in Britain. In fact it seems more like a way of avoiding a clear left policy about what to do about the banks.
Expropriate the banks!
Replacing capitalism with socialism requires public ownership, democratic and workers’ control and planning of the giant corporations and enterprises central to the economy. That is hardly even conceivable without an insurgent workers’ movement challenging the capitalist class on every level – which is what we must work for, rather than damping it down with appeals to “wealth creators”.
To even move in this direction requires transitional demands to campaign for. An obvious one to make central is public ownership and democratic control of the banks and high finance – a sector central to the economy’s functioning and to the economic chaos which has engulfed us over the last decade.
Banking should become a unified, democratically run public service providing banking, pensions and mortgages for everyone who needs them, and funds and resources for investment in public services and all areas of social need – instead of acting as an engine for devastating them while promoting inequality.
Public ownership of the banks has been official TUC policy since it was proposed by the Fire Brigades Union in 2012, but left dormant. We should fight to activate it, and make it active Labour policy too.
All this poses the question of what kind of Labour government we want. In place of an alternative capitalist administration, the left should set ourselves and shape our campaigning around the goal of a workers’ government, accountable to and drawing strength from the mass organisations of the labour movement, and willing and able to force through measures like expropriating the steel industry and the banks – and much more.
Motion for expropriation of the banks and a workers’ government, passed at Labour Representation Committee conference, 20 February 2016, here
By Phil Burton-Cartledge at All That Is Solid (first published 26 April 2016, and now even more relevant):
On global capitalism in Lenin’s day, the Bolshevik leader had this to say: “Imperialism is an immense accumulation of money capital in a few countries … hence the extraordinary growth of a class, or rather, of a stratum of rentiers, i.e., people who live by “clipping coupons”, who take no part in any enterprise whatever, whose profession is idleness …” If only the money men of 21st century Britain remained excrescences on the economy, of directing their stooges to invest capital and growing fat off the labour and talent of others. At the risk of being wistful, this ideal-typical view of your average capitalist is long buried and have gone beyond mere uselessness. Drunk on their parasitism, they are oblivious to how their appetites are not just imperiling the health of the enterprises they gorge upon, but threaten to kill them outright.
The latest example is the collapse of British Home Stores (BHS), a venerable department store that has graced the high street for 88 years. Not that I ever went there, which I suppose is a microcosm of the predicament it finds itself in. Lately, not enough of anyone have come through its doors to buy outfits and lampshades. Yet the Darwinist cut and thrust of the retail market can only shoulder so much of the blame. The reason why BHS is looking down a barrel, and its 11,000-strong workforce face uncertain futures is in large measure down to its erstwhile proprietor, the fly-by-knight Sir Philip Green. Acquiring the struggling BHS for £200m in 2000, Green and his family shook the firm down for a billion quid. All the profits, all the wage squeezes, every saving that could be wrung from the business passed through head office en route to Tina Green’s capacious purse in Monaco. And when there was nothing left, Green offloaded BHS on his tax-dodging wife’s behalf for a quid. The new owners, a ragtag-and-bobtail outfit going by the name of Retail Acquisitions, failed to raise the cash BHS needed to start turning itself around.
It goes without saying that Green’s behaviour was grubby and disgusting, and he could face action from the pensions’ watchdog amid suggestions that the firm dodged its obligations (this would be on top of the pensions holidays many large firms took in the late 90s/early 00s, all with a nod from Gordon Brown). Seemingly aware he could be on the hook for something, Green has offered to stump up £80m toward the BHS pension fund’s half-a-billion deficit. I hope the sop is rejected and he gets rinsed.
As you can see, Green went well beyond the “coupon clipping”. His ownership and running of the brand suggests little if any interest in preserving the business for the long-term, of increasing products, introducing new lines, investing in new technology, and battling it out for market share. You know, the things Max Weber told us capitalists are supposed to do. If BHS was in difficulty 16 years ago, self-evidently a business that has a billion pounds sloshing around is a business that was not a basket case. Instead of treating BHS like a bile bear with the tap left on full for the Green durée, the monies could have been used to add value by expanding its range, aggressively marketing itself, and venturing properly into online retail. Instead, Sir Phil was to his host a tax-dodging, celeb-stalking, yacht-bothering tapeworm.
Ah, but he’s a one-off, a bad apple, yes? In the interests of fairness, BHS’s problems can’t all be laid at his door. The so-called death of the high street is the result of policies pursued over the last six years. The cost of living crisis (remember that?) was always more than a soundbite for millions of people. As meagre wage rises/freezes have bitten, people don’t have as much cash to splash, hence middlebrow stores like BHS were always going to face what the experts call a “challenging retail environment”. The second is the brash new competitor, Amazon, have got away with ripping off the Treasury. Without as much of a tax liability, they have built an infrastructure on the back of exhausting, low-paid work, which has given them an unfair competitive advantage. Having got caught dithering over steel, the Tories are not about to invite more scrutiny of their complicity in this situation. Which probably helps explain why Anna Soubry’s been very quick to discuss the issue in the House and dampen speculation about redundancies.
There’s a wider point. Green is the “cultural dominant” of what a capitalist looks like in 21st century Britain, the sort valorised, flattered, and admired by the City and its helpers. The pursuit of profit, of realising returns on investment, comes not from building things but of tearing them down. As David Harvey points out, global capital from the 1980s on snapped up sold off state infrastructure and coined it from the introduction of markets into public services. New markets were conquered, but these were provided by governments as they let capital swoop in and profit from institutions under their stewardship. Capitalism ate the infrastructure that sustained it. As Britain is the epicentre of global finance, we find here these necrotising social relationships have achieved their fullest expression: an economy whose GDP is dependent not on production, but the selling of houses between buy-to-let landlords, a state bent on selling off what’s left of the public domain to politically suitable bidders (one doesn’t have to be the highest, as the Garden Bridge fiasco demonstrates), and a financial industry that sucks in Britain’s best brains to design fiendishly complex but socially useless “products”, “packages”, “vehicles”, and “instruments”. Funny how the intangible has annexed the language of the concrete. In sum, the owners of capital have become dysfunctional and decadent from the standpoint of British capitalism itself.
Green is not a one-off. He’s archetypal.
A squirming Cameron finally admits to having profited from his late father’s offshore investment fund
By Martin Thomas (edited by JD: the full article appears in the current issue of Solidarity)
Each week the capitalist economic system pumps new wealth, created by the labour of workers across the whole economy, into the pockets of owners and shareholders and their associates, advisers, bankers, lawyers, and so on.
No-one denies that. Those who defend capitalism as the best system available reply only that it is a manageable problem.
The greed for riches (so they say) motivates the capitalist class to innovate and improve efficiency. And the rich pay taxes. And they put their wealth into new investments which create new jobs. The Panama Papers show that in fact the rich hide their money in offshore tax havens and often pay little tax. They invest productively only when they feel fairly sure of large private gains, and much of their loot is spent on luxury and on swindling.
The papers, revealed on 3 April, are a stash of documents from just one law firm, Mossack Fonseca, based in Panama, which specialises in helping the rich by setting up for them obscure companies in which to hide their wealth, based in low-tax areas.
Many of these companies are in the British Virgin Islands, a tiny group of Caribbean islands which is a British Overseas Territory, but outside British tax laws. The islands are home to just 28,000 inhabitants, but to 950,000 companies.
As lawyer Geoffrey Robertson says: “Britain is at the heart… of international tax avoidance by allowing these little remnants of empire to have tax secrecy laws and enable offshore trusts and offshore companies to operate without transparency”.
Not all “shadow banking” (banking-type operations by non-banks) is offshored, but a lot is.
Still booming in fact, according to a recent Financial Times report, doubled in numbers in London since the 2008 crash, are family offices, firms of lawyers and financiers employed by wealthy families to manage their loot and save it from taxes.
The working class, which produces that wealth, should keep it in common ownership and under democratic control.
As the socialist Jean Jaures said in the French parliament when a great financial scandal of the 19th century, also called Panama, broke: “It isn’t enough to brand and denounce the scandals… It would be a sad contradiction not to take up the struggle against that power that holds the railroads, the banks, and all the large enterprises…It’s the beginning of the trial of the dying social order, and we are here to substitute for it a more just social order”.
The 19th century scandal has another lesson. To go beyond indignation to propose socialist solutions, taking the loot back into common ownership may also be necessary to stop the scandal being exploited by right-wing demagogues who are in fact the looters’ friends.
Frederick Engels wrote about the 19th century Panama: “This business brings the moment considerably nearer when our people will become the only possible leaders of the state in France. Only, things ought not to move too quickly; our people in France are not ripe for power by a long way…In the meantime, that ass Boulanger [a proto-fascist anti-semitic demagogue who had come close to seizing power in 1889] had not shot himself [which he did, literally, in 1891, first having fled to exile], he would now be master of the situation… If only some general or other does not swing himself to the top during the interval of clarification and start war, that is the one danger”.
Above: from the Guardian’s front page today
The ‘Panama Papers’ is without doubt the biggest and most important story (so far) of the century, and Shiraz will be keeping a sharp eye, in particular, on how Putin’s fans and apologists on the supposed “left” deal with it. The Mossack Fonseca documents were initially passed to the German newspaper Süddeutsche Zeitung, which then shared them with the International Consortium of Investigative Journalists. The fact is that the Guardian is just one among 109 media organisations in 76 countries that have helped break the story – which makes this message from Deputy Editor Paul Johnson a bit of a damn cheek. I don’t think I’ll be sending them any money just yet:
The “Panama Papers” is the biggest leak in history: 11.5m documents – which would take one person 27 years to read – describing in the finest detail, for the first time, how rivers of money are moved around the world, hidden from sight by secret offshore banking operations.
The scale of the story is staggering: inside those papers 113,000 shell companies were discovered – helping hundreds of national leaders, politicians, celebrities and business people hide their money.
If the scale of the leak was enormous, the journalistic effort to bring it to full exposure was just as big: 370 journalists from 70 different countries worked in an unprecedented scale of co-operation. At the Guardian, we had five journalists dedicated to the investigation for six months, in conditions of tight secrecy, working through the dozens of stories and an exhaustive legal process.
Readers can support such journalism by making a financial contribution to the Guardian. Make a contribution here.
Today’s investigation has created a much-needed worldwide debate about tax and fairness. There are another four days of stories to come. We think they are of vital public importance. We hope you agree.
Thank you for your support and for reading the Guardian.
Deputy Editor, Guardian News and Media
This article is slightly adapted from the editorial that appeared in the 10 February edition of Solidarity:
On 9 February, in Berlin, former Greek finance minister Yanis Varoufakis launched a new “Democracy in Europe Movement”. It seems not so much a movement as a personal vehicle. But the spirit of its manifesto — demanding, by 2025, a EU constituent assembly that will create a democratic federal Europe — is right. It aims beyond the petty “what’s best for our little corner” or “what’s safest” calculations which dominate the official debate, and dares to restate the old ideals which motivated calls for a United States of Europe as early as the mid-19th century. “A Europe of reason, liberty, tolerance, and imagination, made possible by comprehensive transparency, real solidarity, and authentic democracy”.
The first radical journal which Karl Marx wrote for was called the German-French Yearbooks. He looked to a day when “the day of the German resurrection will be heralded by the crowing of the Gallic cock”. His Communist Manifesto was written for an international organisation, mostly of migrant workers, active in France, in Belgium, in Germany, in England. Marx was educated in German philosophy, learned socialism from French workers, formed the outlines of his distinctive theory in Brussels, and gave most of his life to studying Scottish and English political economy.
The creation, from a continent wrecked for centuries by incessant national and dynastic wars, of a Europe of mutual enrichment, and melded traditions, inspired many other democrats. In all fields, a Europe of cosmopolitan culture, free movement, diminished borders, is an advance not just “for Britain”, or for this or that grouping, but for the whole continent.
To take an offbeat example: as recently as the 1930s, André Weil became an epoch-making figure just because he broke the chauvinist barriers which had stopped French mathematicians learning from German mathematics. There was an equivalent in England in the 1820s: a students’ revolt at Cambridge University was needed to break down the narrowmindedness which had paralysed English mathematics for a hundred years after the death of Isaac Newton, banning the use of “German” notation.
The arrogance, and shameless capitalist dogmatism of the EU leaders, their drive to make the rules of the single market and the eurozone axioms to be enforced by unelected officials whatever the cost to human lives, is drowning those ideals in a quicksand of bureaucratism. And in so doing, it is nourishing narrow-minded reflex responses, nationalism, xenophobia, migrant-hating. Varoufakis is right: “The European Union will be democratised. Or it will disintegrate!” He is also right in his warnings: “If we return to the cocoon of the nation-state, we are going to have a fault line somewhere along the River Rhine and the Alps. Everything to the east of the Rhine and north of the Alps would become depressed economies and the rest of the Europe would be in the territory of stagflation economics, of high unemployment and high prices. “This Europe could even produce a major war or, if not an actual war, so much hardship that nations would turn against each other… We would have condemned the whole world to at least one lost generation. “Out of such an event, I counsel my friends that the Left never benefits. It will always be the ultra-nationalists, the racists, the bigots and Nazis that benefit”.
The mess of the major campaigns aimed at Britain’s EU in-or-out referendum, to be held on 23 June, confirms his judgement. Three campaigns are squabbling over who gets the official Electoral Commission franchise as “the” exit campaign. Vote Leave is run by Dominic Cummings, previously the Tory party’s “director of strategy”, then an adviser to Michael Gove as education minister, notorious for his arrogant abuse even of other Tories and other officials. It is figureheaded by former Tory chancellor Nigel Lawson, who is now mostly active as a climate change-denying crank.
Shamefully, the leading Labour MPs who support exit, Kate Hoey and Kelvin Hopkins, first linked their Labour Leave campaign to Vote Leave. Now Hoey and Hopkins, but not John Mills, the millionaire who’s been financing Labour Leave, have jumped ship to Grassroots Out (GO). Not an improvement, because GO is financed by UKIP millionaire Arron Banks, was founded by two right-wing Tory MPs, and advertises UKIP leader Nigel Farage as a key supporter. Bizarrely, at its recent public meeting in London, GO introduced George Galloway (who some people still consider to be a left-winger) as its surprise “big name” speaker, alongside Farage. GO may merge with the third campaign, Leave.EU, also funded by Banks, also backed by UKIP. If there is a shade of difference between Leave.EU and Vote Leave, it is that Leave.EU is more straight-for-the-nerve anti-migrant and Vote Leave is more for a free-market Britain, free of annoying “over-regulation” (read: worker protections) from the EU.
Although some genuine left-wingers back exit — Kelvin Hopkins is a soft Stalinist who writes for the Morning Star — they have no distinct voice, and figure in this squabble only as backers of this or that Tory/ UKIP faction. That is logical. Re-raising borders between Britain and the EU countries may contribute to the racists’, xenophobes’, and ultra-capitalists’ aims of excluding migrants and destroying worker protections. It cannot possibly contribute to left-wing aims.
On the “in” side, Britain Stronger in Europe has no rival for the official Electoral Commission franchise. It argues that remaining in the EU is good for “stability”, for “security”, for “business”. The message is as uninspiring as a wet sock to the millions whose lives have been made unstable and insecure, and who have been exploited or sacked by “business”, through the global capitalist crash of 2008 and the EU leaders’ management of its sequels in Europe. Labour, anxious not to repeat the fiasco of its merging with the Tories in the Better Together campaign in Scotland, has an independent “in” campaign, Labour In For Britain. But notice that — “for Britain”, not for workers. The campaign is led by Labour right-winger Alan Johnson. Its profile is feeble, and mostly an echo of the arguments of Britain Stronger in Europe, with a quiet footnote about workers’ rights.
Socialists need a campaign which opposes exit from the EU, not in the name of endorsing the existing EU, but in the name of taking it as the start-point for battle to bring down barriers, level up conditions, extend democracy, and weld workers’ solidarity across the continent. In order to do that, Solidarity has initiated the Workers’ Europe campaign, and works with the Another Europe Is Possible campaign.
George Osborne’s claim that Google’s £130 million over ten years tax settlement with HMRC is a “major success” now looks like a pretty sick joke.
Tax campaigners like Richard Murphy of Tax Research UK have exposed the deal as involving a tiny proportion of Google’s $5.6 billion (£5.6 billion) annual UK revenues. Google spends about $12 million a year on chicken for its staff canteens.
Shadow chancellor John McDonnell has aptly described the settlement as a “sweetheart deal” , making the point that tax experts (including Murphy, Prof Prem Sikka and Labour tax barrister Jolyn Maugham) all think that the likely tax rate paid by Google on its likely UK profits may, even after this settlement, not exceed 5%. Google has paid an effective tax rate of around 3% over the past decade, despite a UK corporation tax rate of more than 20%.
Today’s Times reports that French officials have pursued Google far more aggressively, and are in the process of negotiating a settlement worth three times the amount agreed with Britain, despite Google doing more business and employing thousands more staff (2,500) in the UK. Referring to the company’s practice of registering all European sales in Dublin (to benefit from a lower tax rate), a French official (quoted in The Times) said, “We have a hard time believing that 150 well-paid salespeople with advanced degrees employed by one particular company in France are nothing more than busboys for Ireland.”
Anyone who heard the wretched performance of Jim Harra (HMRC’s ‘Director General Business Tax’) attempting to defend the deal on Radio4’s World At One today, will be aware that when all else fails, HMRC falls back on the plea of ” taxpayer confidentiality” to avoid discussion of the principles it has applied when reaching its deal with Google. Nils Pratley, in today’s Guardian, gives the “taxpayer confidentiality” argument short shrift:
“Google and Osborne were happy to publish selected highlights of HMRC’s settlement – the former to appear a good corporate citizen, the latter to try to appear a muscular chancellor. If limited disclosure is OK, both parties should be able to agree full disclosure for the sake of wider understanding.”
But perhaps the most astonishing and outrageous aspect of this whole sordid business is the claim (in todays Times) that:
“HMRC officials never challenged the company’s central and most controversial claim — that it has no ‘permanent establishment’ in Britain — even after they were given whistleblower evidence challenging its account
“The claim is critical to a complex structure used by Google to avoid hundreds of millions of pounds in UK corporation tax. By arguing that it has no fixed place of business in Britain, the company is able to book all its sales to UK customers through an Irish subsidiary, from where profits are again diverted to the tax haven of Bermuda.”
Never mind “whistleblower evidence”: you’d have thought this building, the Google offices in central London, might just have given the game away:
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Re-blogged from Tendance Coatesy:
Ellen Meiksins Wood, the wife of former NDP leader Ed Broadbent, has died of cancer at the couple’s Ottawa home at the age of 73.
She was a noted intellectual figure on the international left, whose studies of class, politics and political ideas influenced several generations of thinkers and activists.
Wood’s writings were thought-provoking and luminous.
She first came to a wide left audience with The Retreat from Class: A New ‘True’ Socialism (1986). This was a collection of her intervention in debates, conducted through the pages of New Left Review, and the Socialist Register, that took place in the wake of Eric Hobsbawm’s famous polemic, The Forward March of Labour halted? (Marxism Today 1978 – expanded in book form with replies from supporters and critics in 1981).
Many left intellectuals not only backed Hobsbawm’s view that the material importance of class institutions in shaping politics was declining with the drop in numbers in the industrial working class, but extended this to question the relationship between class and politics itself.
Post-Marxists began to argue that a plurality of ‘democratic struggles’ and social movements would replace the central place of the labour movement in politics. Some contrasted ‘civil society’ a more complex and open site of democratic assembly to the alleged ‘monolithic’ vision of politics embodied in the traditional labour movement. In a diffuse way this was associated with the once fashionable idea that “a “post-modern” society dissolved reality in ‘simulacra’. Others claimed it meant the end of “grand narratives” – or more bluntly, that the ideas of socialism and the Left was splintering so quickly that only a fragmented series of ‘critical’ responses were possible against neo-liberal regimes of ‘governance’.
Wood argued for the importance of class in shaping not just political interests but the potential constituency of radical socialist politics. Fights over power were at the centre of Marxism and these were part and parcel with disputes over exploitation and the appropriation of the social surplus. The ‘new social movements’, the women’s movement, the rising ecological movement, campaigns for racial and sexual equality, were interlaced with class conflicts. Democracy could not be abstracted from these relations. To appeal, as writers such as Ernesto Laclau and Chantal Mouffe did, to the formation of a new hegemonic strategy based on relations of “equivalence” between various democratic demands ignored the basic facts about class and power. Like her comrade Ralph Miliband Wood saw socialism as an effort to bring together people around the central issues of exploitation and oppression in democratic organisations that could shape politics. This had historically been the result of conscious action, and this kind of collective work was needed more than even against a very real and growing grand narrative – the reality of neo-liberal economics and government assaults on working people, and the unemployed – in building a new regime of capitalist accumulation.
In academic as well as left-wing activist circles Wood became known for her “political Marxist” approach to history. This focused on the issue of the transition from feudalism to capitalism and social property relations. The Pristine Culture of Capitalism 1992 was a summary of this approach. It was also directed against the views of Perry Anderson (Editor of New Left Review) and Tom Nairn (today best known for his Scottish nationalism). In the early days of the Second New Left they had asserted that the so-called ‘archaic’ British state was a reflection of a an equally ‘pre-modern’ capitalism. They also claimed that the ‘supine’ bourgeoisie – who abdicated political rule to the ‘aristocracy’ (which they claimed continued to dominate UK politics in the early modern period) – had been mimicked by a “supine” working class. In later writings Anderson talked of the need for a new wave of democratic modernisation to bring the country into line with the ‘second’ bourgeois revolution of modernity.
Wood, by contrast, pointed out, had a developed capitalism, indeed it was the most ‘modern’ form of capitalism. Its state form was related to its early advance, and its allegedly old-fashioned trappings – from the Monarchy downwards – had not thwarted capitalist expansion but arisen in relation to needs of its own bourgeoisie. The labour movement had developed in struggle with these forces, not in deference to them.
On all the essential points present-day Britian was no more, no less, ‘modern’ than anywhere else in Europe or in any contemporary capitalist state. Indeed it was for long a template for bourgeois democracy. In particular Wood attacked the claims of Tom Nairn that in some fashion Ukania (his ‘funny’ word for the United Kingdom, modelled on the novelist (1880 – 1942) Robert Musil’s term for the Austro-Hungrian empire, Kakania – shit land) owed its economic difficulties to its constitution. Economic problems arose at root from the general contradictions of capitalist accumulation, in a specific form. The problems of British democracy were due to its capitalist character – it is hardly alone in having a Monarchy to begin with – not to the issues Nairn-Anderson dreamt up about its sonderweg.
More widely Wood is known as an advocate of a version of the ‘Brenner thesis’ (after Robert Brenner’s article, Agrarian Class Structure and Economic Development in Pre-Industrial Europe”1978). The creation of market relations in British agriculture were considered to be the foundation of modern capitalism. The essential condition was separation from non-market access to the means of subsistence, the means of self-reproduction. Wood argued that it was the capitalist transformation of agriculture, followed by the rise of merchant class expanding these forms through international trade, created the ground of Western capitalism. It was also responsible for the distinctive state forms that emerged in Britain.
In the Agrarian Origins of Capitalism (1998) Wood summarised her views,
The distinctive political centralization of the English state had material foundations and corollaries. First, already in the 16th century, England had an impressive network of roads and water transport that unified the nation to a degree unusual for the period. London, becoming disproportionately large in relation to other English towns and to the total population of England (and eventually the largest city in Europe), was also becoming the hub of a developing national market.
The material foundation on which this emerging national economy rested was English agriculture, which was unique in several ways. The English ruling class was distinctive in two major and related respects: on the one hand, as part of an increasingly centralized state, in alliance with a centralizing monarchy, they did not possess to the same degree as their Continental counterparts the more or less autonomous “extra-economic” powers on which other ruling classes could rely to extract surplus labor from direct producers. On the other hand, land in England had for a long time been unusually concentrated, with big landlords holding an unusually large proportion of land. This concentrated landownership meant that English landlords were able to use their property in new and distinctive ways. What they lacked in “extra-economic” powers of surplus extraction they more than made up for by their increasing “economic” powers.
Wood’s political stand was firmly within the Marxist ambit. In 1999 she stated (The Politics of Capitalism) ,
…all oppositional struggles—both day-to-day struggles to improve the conditions of life and work, and struggles for real social change—should be informed by one basic perception: that class struggle can’t, either by its presence or by its absence, eliminate the contradictions in the capitalist system, even though it can ultimately eliminate the system itself. This means struggling for every possible gain within capitalism, without falling into the hopeless trap of believing that the left can do a better job of managing capitalism. Managing capitalism is not the job of socialists, but, more particularly, it’s not a job that can be done at all.
The broader focus on the links between capitalism and state forms continued in her study Empire of Capital (2003). This analysed how the “empire of capital” (rather than the vague ‘globalisation’ or the rhizome of Hardt and Negri’s ‘Empire’) shapes the modern world through “accumulation, commodification, profit maximization, and competition.”
Wood’s later works, Citizens to Lords: A Social History of Western Political Thought from Antiquity to the Middle Ages (2008) and Liberty & Property: A Social History of Western Political Thought from Renaissance to Enlightenment were ambitious attempts to narrate and analyse Western political thought in the light of class categories.
Wood had a profound influence on countless people.
She was a democratic Marxist, a feminist, a perceptive writer and a force for good.
Homage to her memory.
Remembering Ellen Meiksins Wood
From Social Europe:
We would like to draw your attention to a new documentary #ThisIsACoup on the Greek Crisis by leading UK journalist Paul Mason. It is split into 4 episodes and free to watch (see videos below):
There will be limited posting between now and the new year so the whole Social Europe team would like to take this opportunity to wish you, your family and your friends a happy Holiday Season and a great start to 2016.
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