Osborne’s shameful sweetheart deal with Google

January 26, 2016 at 4:36 pm (capitalism, corruption, internet, Jim D, London, profiteers, tax, Tory scum)

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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Ellen Meiksins Wood: Marxist who put class at the centre of her analysis

January 15, 2016 at 4:49 pm (Andrew Coates, capitalism, capitalist crisis, class, democracy, economics, intellectuals, Marxism)

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.

Reports 

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

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Paul Mason: ‘This Is A Coup’

December 20, 2015 at 8:22 pm (capitalism, democracy, economics, Europe, Greece, posted by JD)

From Social Europe:

Dear readers,

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):

  Episode 1
Video
  Episode 2
Video
  Episode 3
Video
  #ThisIsACoup – Episode 4 – SURRENDER OR DIE
Video
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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An initial attempt at a socialist and humanitarian response to the Paris massacres

November 15, 2015 at 6:29 pm (capitalism, democracy, Europe, fascism, France, Human rights, humanism, internationalism, iraq, islamism, Jim D, Marxism, Middle East, modernism, Racism, reactionay "anti-imperialism", solidarity, terror, turkey, war, workers)

What follows is a statement drawn up by myself. It is based in part upon the AWL’s statement in the immediate aftermath of 9/11. I have not discussed it or “cleared” it with anyone. Critical comments are welcome -JD:

To massacre ordinary workers enjoying a drink, a meal, a concert or a sporting event after work, is a crime against humanity, full stop.

What cause could the Islamist killers have been serving when they massacred 130 or more people in Paris? Not “anti-imperialism” in any rational sense — whatever some people on sections of the left have argued in the past — but only rage against the modem, secular world and the (limited but real) freedom and equality it represents. Only on the basis of an utterly dehumanised, backward looking world-view could they have planned and carried out such a massacre. Such people are enemies for the working class and the labour movement at least as much as the capitalist ruling class – In fact, more so.

Modern capitalism includes profiteering, exploitation, and imperialism, but it also includes the elements of civilisation, sexual and racial equality, technology and culture that make it possible for us to build socialism out of it.

Lenin, the great Marxist advocate of revolutionary struggle against imperialism, long ago drew a dividing line between that socialist struggle and reactionary movements such as (in his day) “pan-Islamism” [in our day, Islamism]: “Imperialism is as much our mortal enemy as is capitalism. That is so. No Marxist will forget, however, that capitalism is progressive compared with feudalism, and that imperialism is progressive compared with pre-monopoly capitalism. Hence, it is not every struggle against imperialism that we should support. We will not support a struggle of the reactionary classes against imperialism.”

We, the socialists, cannot bring back the dead, heal the wounded, or even (unless we’re present) comfort the bereaved. What we can do is analyse the conditions that gave rise to the atrocity; see how they can be changed; and keep clear critical understanding of the way that governments will respond. This must not be mistaken for any kind of attempt to excuse or minimise this barbarity or to use simplistic “blowback” arguments to suggest that it is simply a reaction to the crimes of “the west” or “imperialism.”

Immediately, the Paris massacre is not only a human disaster for the victims, their friends and families, but also a political disaster for all Muslims, refugees and ethnic minorities in Europe. The backlash against this Islamic-fundamentalist atrocity will inevitably provoke anti-refugee feeling and legislation, attacks on civil liberties and hostility towards all people perceived as “Muslims” in Europe: that, quite likely, was at least one of the intentions of the killers. The neo-fascists of Marine LePen’s Front National seem likely to make electoral gains as a result of this outrage.

The present chaos in the Middle East has given rise to the Islamic fascists of ISIS, and their inhuman, nihilist-cum-religious fundamentalist ideology.

Throughout the Middle East, the rational use of the region’s huge oil wealth, to enable a good life for all rather than to bloat some and taunt others, is the socialist precondition for undercutting the Islamic reactionaries.

In Afghanistan, an economically-underdeveloped, mostly rural society was thrust into turmoil in the late 1970s. The PDP, a military-based party linked to the USSR, tried to modernise, with measures such as land reform and some equality for women, but from above, bureaucratically. Islamists became the ideologues of a landlord-led mass revolt.

In December 1979, seeing the PDP regime about to collapse, the USSR invaded. It spent eight years trying to subdue the peoples of Afghanistan with napalm and helicopter gunships. It was the USSR’s Vietnam.

The USSR’s war had the same sort of regressive effect on society in Afghanistan as the USA’s attempt to bomb Cambodia “back into the Stone Age”, as part of its war against the Vietnamese Stalinists, had on that country. In Cambodia the result was the mass-murdering Khmer Rouge, which tried to empty the cities and abolish money; in Afghanistan, it has been the Islamic-fundamentalist regime of the Taliban. In Iraq the West’s bungled attempts to clear out first Saddam’s fascistic regime and then various Islamist reactionaries, and introduce bourgeois democracy from above, have been instrumental in creating ISIS.

Western governments will now make a show of retaliation and retribution. They will not and cannot mend the conditions that gave rise to this atrocity, conditions which they themselves (together with their Arab ruling class allies) helped to shape. Ordinary working people who live in war-torn states and regions will, as ever, be the victims.

Civil rights will come under attack and the efforts of the European Union to establish a relatively humane response to the refugee crisis will be set back and, quite possibly, destroyed.

These blows at civil rights will do far more to hamper the labour movement, the only force which can remake the world so as to end such atrocities, than to stop the killers.

Public opinion will lurch towards xenophobia. Basic democratic truths must be recalled: not all Middle Eastern people are Muslims, most Muslims are not Islamic fundamentalists, most of those who are Islamic-fundamentalist in their religious views do not support Islamic fundamentalist militarism. To seek collective punishment against Muslims or Arabs, or anyone else, is wrong and inhuman.

The first, and still the most-suffering, victims of Islamic fundamentalist militarism are the people, mostly Muslim, of the countries and regions where the lslamists are powerful.

The only way to defeat the Islamists is by the action of the working class and the labour movement in such countries, aided by our solidarity.

Refugees seeking asylum in Europe do not in any way share blame for this massacre. In fact, many of them are refugees because they are fleeing Islamic-fundamentalist governments and forces like ISIS. To increase the squeeze on already-wretched refugees would be macabre and perverse “revenge”.

We must remake the world. We must remake it on the basis of the solidarity, democracy and spirit of equality which are as much part of human nature as the rage, hatred and despair which must have motivated the Paris mass-murderers.

We must create social structures which nurture solidarity, democracy and equality, in place of those which drive towards exploitation, cut-throat competition and acquisitiveness and a spirit of everything-for-profit.

The organised working class, the labour movement, embodies the core and the active force of the drive for solidarity, democracy and spirit of equality within present-day society. It embodies it more or less consistently, to a greater or lesser extent, depending on how far we have been able to mobilise ourselves, assert ourselves, broaden our ranks, and emancipate ourselves from the capitalist society around us.

Our job, as socialists, is to maximise the self-mobilisation, self-assertion, broadening and self-emancipation of the organised working class.

We must support the heroic Kurdish forces who are fighting and defeating ISIS on the ground in Syria and Iraq, opposed by the Turkish government. We must demand that our government – and all western governments – support the Kurds with weapons and, if requested, military backup: but we will oppose all moves by the governments of the big powers to make spectacular retaliation or to restrict civil rights or target minorities or refugees.

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Cripps: egalitarian hero or reformist sell-out?

November 9, 2015 at 2:33 pm (capitalism, economics, From the archives, Guardian, history, labour party, posted by JD, reformism, SWP)

Stafford Cripps 1947.jpg

Paul Mason, in today’s Graun:

“(Cripps’s 1948 economic programme) is a programme to make Corbynomics look positively Thatcherite by comparison. A rough modern equivalent would involve today’s government spending £61bn on food subsidies alone. Yet Cripps and his generation were cutting with the grain of history.”

But Tony Cliff wrote:


From Socialist Worker Review, No. 88, June 1986.
Transcribed by Christian Høgsbjerg.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.


In the 1930s Stafford Cripps became the most prominent spokesman for the far left of the Labour Party. His rhetoric was well to the left of Tony Benn’s in the 1980s. Yet in the 1945–51 Labour government he became ‘Mr Austerity’, congratulated by the Tories for his budgets. Tony Cliff looks at the career of Stafford Cripps.

HALF a century ago the left of the Labour Party was organised in the Socialist League. Its main leader was Stafford Cripps. His story is quite revealing of the weaknesses of the Labour left, not only in the 1930s, but also today.

Cripps was born into a very rich family and was educated at Winchester then at Oxford. His father was a Tory MP for some two decades, and then received a peerage to become Baron Parmoor. Stafford was not indifferent to his father’s political activities. One biographer writes: ‘Stafford took up the furtherance of his father’s cause as the Conservative candidate with all the ardour of a young man of drive and initiative.’

In 1913 he was called to the Bar, and a short time later was appointed Justice of the Peace. In 1927 he became King’s Counsel.

‘In the years from 1919 to 1926 Stafford Cripps had one other interest outside the law and the village of his adoption. He had become engaged in the affairs of the Church, and particularly in the affairs of the World Council of Churches.’

In 1924 when Ramsay MacDonald formed his first Labour government he hunted for talent outside the Labour Party, and got four Tories and Liberals to join his government: Lord Parmoor, Lord Haldane, Lord Chelmsford and H.P. Macmillan (later to become Lord Macmillan). ‘Macmillan, with the consent of the Conservative Party leaders, accepted the office from MacDonald on a non-political basis as a matter of public duty.’ In the 1929–31 Labour government Lord Parmoor served once again – as President of the Council and Labour’s leader in the House of Lords. (Stafford’s uncle, Sidney Webb, who became Lord Passfield, served as Secretary of State for the Colonies.)

As the 1929 general election approached Herbert Morrison tried to attract Stafford Cripps to the Labour Party. Morrison wrote to Stafford Cripps:

‘I am personally very anxious to have you in the Party. Please let me know if and when you would like to join the ranks of the Party and I shall be very happy to make the necessary arrangements.’

In May 1929 Cripps became a member of the Labour Party. Early in 1930 he became candidate for the West Woolwich division, and for the rest of that year he gave much time to that constituency. In October 1930 the Solicitor-General, Sir James Melville, resigned in ill health, and Ramsay MacDonald offered the position to Stafford Cripps. He at once accepted, though without a seat in Parliament. On the death of the Labour MP for East Bristol, Cripps was adopted as the Labour candidate and in January 1931 was duly elected.

In government Cripps did not evince any leftist tendencies. Quite the contrary. When he spoke on the 1927 Trades Disputes Act, imposed by the Tories after the defeat of the general strike, Cripps called not for its repeal, but only its amendment. Read the rest of this entry »

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Nationalism cannot save remnants of Scottish steel industry

October 28, 2015 at 3:44 pm (capitalism, internationalism, posted by JD, scotland, solidarity, unions, workers)

General view of the Tata steel factory in Cambuslang. Pic: DR

By Ann Field (at Workers Liberty)

Two hundred and seventy jobs are directly at risk after Tata Steel announced plans to “mothball” its Dalzell and Clydebridge plants, the final remnants of the Scottish steel industry after the Tories’ de-industrialisation of the 1980s.

Hundreds more jobs in local communities which depend on the plants and their workforces are also at risk.

The Scottish Labour Party has responded with a range of slightly confusing demands on the SNP government in Holyrood:

– Use public procurement powers to ensure that Scottish infrastructure projects place orders with the two plants.

– Support short-time working (but Tata, not the Scottish government, is the employer).

– Temporarily bring the plants into public ownership (but why only “temporarily”?).

– Cut Tata’s energy costs by putting pressure on Scottish Power and SSE (but why can’t we all have cheaper electricity?);

– Consult with “workers and the industry” to develop a government-led steel strategy (but why allow Tata to be involved if the industry is to be taken into public ownership?);

– Provide support for those who will soon be out of a job (which suggests a certain lack of confidence in the other demands).

Scottish Labour also demands action because of the “iconic” status of the Scottish steel industry. This is not a persuasive argument. Razor-gangs in Glasgow on a Saturday night also once enjoyed an “iconic” status. But this hardly justified their preservation.

However confused and inconsistent such demands might be, they reflect a genuine commitment to try to protect jobs in the residual Scottish steel industry. Local CLPs have also been campaigning on the streets to save steelworkers’ jobs.

SNP First Minister Nicola Sturgeon visited the two plants last week. A government-led taskforce has been set up to try to find an alternative buyer for the plants. According to Sturgeon, “nothing is off the table”, including public ownership.

The SNP, Scotland’s patriotic party, can hardly point to its record of supporting Scottish steel jobs. In 2012 it awarded all steel contracts for the new Forth crossing to China, Poland and Spain. Not a single one went to Dalzell or Clydebridge.

While any steps to save jobs are to be welcomed, more is needed than either Scottish Labour or the SNP are currently proposing.

And far more is certainly needed than anything the notoriously right-wing leadership of the Community trade union – the biggest union in the steel industry – has to offer by way of a ‘campaign’.

The job losses in the west of Scotland are part of a bigger wave of job losses in the British steel industry, hitting Tata workers in Scunthorpe, SSI workers in Redcar, and workers employed by Caparo Industries.

Jobs have also been lost or are now at risk in the steel industry throughout Europe and elsewhere – including China. These losses are a product of the unregulated and globalised nature of steel production and supply.

China and other major steel-producing countries (such as South Korea, India and Russia) have massively increased steel output in recent years, while global demand has been stagnant or declining.

The result is a typical capitalist crisis of overproduction. But, in the context of a globalised economy, it is a crisis on an international scale: in line with the logic of capitalism, excess steel output is sold cut-price (‘dumped’) in the international marketplace.

One ‘answer’ to globalisation – whether it be in the steel industry or any other industry – is nationalism: Put the blame on a particular country (in this case: China), demand controls on imports from that country, and retreat behind tariff barriers, national borders and trade wars.

This is the often unspoken ‘logic’ at the heart of the SNP’s demand for independence.

But why, in an independent Scotland, would the steel industry, with a current workforce of less than 300, be better able to compete against the more than 800 million tons of steel produced each year by China, and the 100,000 workforce of the biggest Chinese steel company alone?

The socialist answer to the anarchy of capitalist production – which produces too little of what people need, and too much of what can find a buyer in the marketplace – is not economic autarky, when states and nations try to wall themselves off from the world market and strive for economic self-sufficiency.

Our answer is the socialisation of the means of production: democratic planning; production to meet need not profit; work-sharing with no loss of pay; and environment-friendly production processes.

This campaign to saves jobs in the steel industry throughout the UK should be a part of an international campaign which brings together steelworkers and their unions to fight for such demands, backed up by industrial action.

The labour movement unites workers across national borders. Nationalism divides workers according to their national identities. In the fight to save steelworkers’ jobs – whatever their country, and whatever their national identity – the labour movement internationally must take the lead.

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Corbynomics: Putting the Political back into Political Economy

October 7, 2015 at 2:24 pm (capitalism, democracy, economics, labour party, posted by JD, reformism, workers)

Embedded image permalink

By Ewan Gibbs and Nathaniel Blondel (at Left Futures)

The reaction to John McDonnell’s announcement that he would aim for a balanced current account, whilst maintaining borrowing for capital investment, revealed a recurrent fault line within left-wing economic thought. At its most banal McDonnell was accused of signing up to George Osborne’s ‘austerity charter’, whilst more sophisticated critics argued such policies would weaken demand and harm economic growth. This article will not address the technicalities of figures and whether Labour should borrow limited amounts rather than aim for a balance (see a critical account here). Instead we will focus on the key political division the fallout from this announcement has revealed, and what it says about the character of ‘Corbynomics’, and the barriers it faces.

During the last thirty years of political setbacks, socialist economic policies have taken a particular battering. This has been very apparent in the predominant responses to the onset of austerity since 2008. Rather than proposals for a fundamental restructuring of the economy, the main left response has been both defensive, and grounded in an argument for why “ideological” cuts are unnecessary and harmful. Invoking mainstream Keyensian economists such as Joseph Stiglitz and Paul Krugman, the argument has gone that government could stimulate an economic recovery through borrowing at cheap rates. Insofar as it went this was welcome, but it was a more or less passive argument that could unite trade unionists, and political forces of the ‘centre-left’ from Labour, to the SNP and Plaid Cymru. At best, the Keynesian approach amounts to a tepid intervention and stimulation of demand. Read the rest of this entry »

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The Volkswagan emissions scandal

September 24, 2015 at 7:43 pm (capitalism, corruption, crime, engineering, environment, posted by JD, United States)

From The World Socialist website:

 

The scandal at Volkswagen (VW) over the manipulation of emissions readings from its autos in the US has plunged the firm into a major crisis. The company, which along with Toyota is the world’s largest auto producer, faces the threat of up to $18 billion in fines, along with massive costs related to the recall of almost half a million vehicles and huge compensation claims. The US Justice Department has launched a criminal investigation and a congressional committee has announced plans for a hearing on the scandal.

VW has already acknowledged that accusations by the US Environmental Protection Agency (EPA) are valid. It has admitted that it deliberately deceived American customers and government authorities.

“Let’s be clear: our company was dishonest,” said VW’s American head Michael Horn at the unveiling of the new Passat model in New York. “We totally screwed up.”

In a calculated manner, VW broke the law in order to manipulate emissions readings. In diesel models sold in the US, the company installed specially developed software to enable the vehicles to determine when they were being tested and automatically switch to a mode that reduced the emission of pollutants. After the test, the cars automatically switched back to the normal mode, increasing their release of poisonous oxides between 10- and 40-fold.

VW used the low emissions test rates as a selling point for the US market, where diesel cars comprise just one percent of total sales, a far lower percentage than in Europe. Many US buyers decided to purchase a diesel car from VW or Audi because, in contrast to hybrid vehicles from Asian producers, which have low emission rates but are cumbersome, the German models were considered both environmentally friendly and sporty.

The ultimate scale of the scandal is not yet known. The suspicion is that VW manipulated emissions figures not only in the US, but also in other markets. Germany, Switzerland, France and South Korea have all announced investigations into diesel vehicle manipulation. Read the rest of this entry »

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70 years on: Cannon on Hiroshima and Nagasaki

August 6, 2015 at 8:41 am (capitalism, hell, history, imperialism, James P. Cannon, posted by JD, science, trotskyism, war)

The first nuclear bomb killed 100,000 people and razed two-thirds of the city of Hiroshima

The leading American Trotskyist, James P Cannon spoke at a memorial meeting in New York for Leon Trotsky on 22 August 1945. The atomic bombing of Hiroshima and Nagasaki had just taken place (August 6 and 9), and Cannon used the occasion to express his outrage at the atrocity:

What a commentary on the real nature of capitalism in its decadent phase is this, that the scientific conquest of the marvellous secret of atomic energy, which might rationally be used to lighten the burdens of all mankind, is employed first for the wholesale destruction of half a million people.

Hiroshima, the first target, had a population of 340,000 people. Nagasaki, the second target, had a population of 253,000 people. A total in the two cities of approximately 600,000 people, in cities of flimsy construction where, as reporters explain, the houses were built roof against roof. How many were killed? How many Japanese people were destroyed to celebrate the discovery of the secret of atomic energy? From all the reports we have received so far, they were nearly all killed or injured. Nearly all.

In the [New York] Times today there is a report from the Tokyo radio about Nagasaki which states that “the centre of the once thriving city has been turned into a vast devastation, with nothing left except rubble as far as the eye could see”. Photographs showing the bomb damage appeared on the front page of the Japanese newspaper Mainichi. The report says: “One of these pictures revealed a tragic scene 10 miles away from the centre of the atomic air attack”, where farm houses were either crushed down or the roofs torn asunder.

The broadcast quoted a photographer of the Yamaha Photographic Institute, who had rushed to the city immediately after the bomb hit, as having said: “Nagasaki is now a dead city, all the areas being literally razed to the ground. Only a few buildings are left, standing conspicuously from the ashes.” The photographer said that “the toll of the population was great and even the few survivors have not escaped some kind of injury.”

In two calculated blows, with two atomic bombs, American imperialism killed or injured half a million human beings. The young and the old, the child in the cradle and the aged and infirm, the newly married, the well and the sick, men, women, and children — they all had to die in two blows because of a quarrel between the imperialists of Wall Street and a similar gang in Japan.

This is how American imperialism is bringing civilisation to the Orient. What an unspeakable atrocity! What a shame has come to America, the America that once placed in New York harbour a Statue of Liberty enlightening the world. Now the world recoils in horror from her name.

One preacher quoted in the press, reminding himself of something he had once read in the Bible about the meek and gentle Jesus, said it would be useless to send missionaries to the Far East anymore. That raises a very interesting question which I am sure they will discuss among themselves. One can imagine an interesting discussion taking place in the inner circles of the House of Rockefeller and the House of Morgan, who are at one and the same time-quite by accident of course-pillars of finance and pillars of the church and supporters of missionary enterprises of various kinds.

“What shall we do with the heathens in the Orient? Shall we send missionaries to lead them to the Christian heaven or shall we send atomic bombs to blow them to hell?” There is a subject for debate, a debate on a macabre theme. But in any case, you can be sure that where American imperialism is involved, hell will get by far the greater number of the customers.

What a harvest of death capitalism has brought to the world! If the skulls of all of the victims could be brought together and piled into one pyramid, what a high mountain that would make. What a monument to the achievements of capitalism that would be, and how fitting a symbol of what capitalist imperialism really is. I believe it would lack only one thing to make it perfect. That would be a big electric sign on the pyramid of skulls, proclaiming the ironical promise of the Four Freedoms. The dead at least are free from want and free from fear…

Long ago the revolutionary Marxists said that the alternative facing humanity was either socialism or a new barbarism, that capitalism threatens to go down in ruins and drag civilisation with it. But in the light of what has been developed in this war and is projected for the future, I think we can say now that the alternative can be made even more precise: the alternative facing mankind is socialism or annihilation! It is a problem of whether capitalism is allowed to remain or whether the human race is to continue to survive on this planet.

We believe that the people of the world will waken to this frightful alternative and act in time to save themselves…

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Paul Mason: “The end of capitalism has begun”

July 20, 2015 at 6:53 pm (capitalism, capitalist crisis, economics, fantasy, Guardian, intellectuals, Jim D, reformism)

This has been causing some excitement in liberal-left circles, as it apparently means would-be lefties can just wait for “post-capitalism” to happen, while working in retail management or small business:

The red flags and marching songs of Syriza during the Greek crisis, plus the expectation that the banks would be nationalised, revived briefly a 20th-century dream: the forced destruction of the market from above. For much of the 20th century this was how the left conceived the first stage of an economy beyond capitalism. The force would be applied by the working class, either at the ballot box or on the barricades. The lever would be the state. The opportunity would come through frequent episodes of economic collapse.

Instead over the past 25 years it has been the left’s project that has collapsed. The market destroyed the plan; individualism replaced collectivism and solidarity; the hugely expanded workforce of the world looks like a “proletariat”, but no longer thinks or behaves as it once did.

If you lived through all this, and disliked capitalism, it was traumatic. But in the process technology has created a new route out, which the remnants of the old left – and all other forces influenced by it – have either to embrace or die. Capitalism, it turns out, will not be abolished by forced-march techniques. It will be abolished by creating something more dynamic that exists, at first, almost unseen within the old system, but which will break through, reshaping the economy around new values and behaviours. I call this postcapitalism.

As with the end of feudalism 500 years ago, capitalism’s replacement by postcapitalism will be accelerated by external shocks and shaped by the emergence of a new kind of human being. And it has started.

Postcapitalism is possible because of three major changes information technology has brought about in the past 25 years. First, it has reduced the need for work, blurred the edges between work and free time and loosened the relationship between work and wages. The coming wave of automation, currently stalled because our social infrastructure cannot bear the consequences, will hugely diminish the amount of work needed – not just to subsist but to provide a decent life for all.

Second, information is corroding the market’s ability to form prices correctly. That is because markets are based on scarcity while information is abundant. The system’s defence mechanism is to form monopolies – the giant tech companies – on a scale not seen in the past 200 years, yet they cannot last. By building business models and share valuations based on the capture and privatisation of all socially produced information, such firms are constructing a fragile corporate edifice at odds with the most basic need of humanity, which is to use ideas freely.

Third, we’re seeing the spontaneous rise of collaborative production: goods, services and organisations are appearing that no longer respond to the dictates of the market and the managerial hierarchy. The biggest information product in the world – Wikipedia – is made by volunteers for free, abolishing the encyclopedia business and depriving the advertising industry of an estimated $3bn a year in revenue.

Almost unnoticed, in the niches and hollows of the market system, whole swaths of economic life are beginning to move to a different rhythm. Parallel currencies, time banks, cooperatives and self-managed spaces have proliferated, barely noticed by the economics profession, and often as a direct result of the shattering of the old structures in the post-2008 crisis.

…read the whole article here

A comrade comments:
“It’s complete nonsense; not only utopian in the worst sense of the word but also depressingly gradualist and reformist (its central claim is that ‘post-capitalism’ will just sort of emerge as the result of a proliferation of… well, I don’t know what exactly: file sharing?).

“The ‘would-be lefties’ drawing the conclusion that they can ‘wait for post-capitalism to happen’ – i.e., without having to think, or organise, or act, or struggle in any meaningful way at all – seems to me an entirely faithful reading of the article.

“It’s like the worst bits of Owen and Proudhon repackaged for the digital age and dressed up as some amazingly innovative, novel theory. But at least those people (even Proudhon, who was basically a reactionary) had a bit of fighting spirit about them, wanted to build a movement (of sorts), and wanted people to fight the system (in however distorted or misguided a way). What does Mason want us to do? Surf the web?

“It’s actually quite sad from a guy who probably ought to know better, and who only a few years ago was writing books about how the key aspect of contemporary capitalism was the globalisation of the working class. He seems now to have decided that this isn’t really that important after all.”

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