Brexit would mean free rein for capital

June 12, 2016 at 8:11 pm (economics, Europe, posted by JD, rights, Tory scum, UKIP, workers)

 Above: Thatcherite Patrick Minford

By Martin Thomas (also at the Workers Liberty website)

88% of six hundred economists surveyed for The Observer newspaper (29 May) reckon that Brexit would reduce economic growth in Britain.

Economists often get things wrong, and the gist of the economists’ opinion is that Brexit would disrupt the regular flows of the global capitalist economy, thus pushing down trade and investment into Britain.

Most enlightening is what the pro-Brexit minority of economists say. The “Economists for Brexit” group led by veteran Thatcherite Patrick Minford has produced a report.

As ardent free-market ideologues, they argue that a capitalist Britain outside the EU will do well because it will have fewer constraints on the rapacity of the free market.

They object to the EU because “the EU has pressed for social legislation (such as the 2003 Working Time Directive and the 2004 Gender Equality Directive) that adds to companies’ costs”.

Their list would probably also include the Agency Workers’ Directive, TUPE, and redundancy-payment laws.

They also object because “European governments have been more emphatic than the global average about the dangers of global warming” and so the EU has pushed Britain to “adopt the renewables agenda with greater zeal… Coal-fired power stations have been closed down, offshore wind farms built and so on…”

The Brexit campaigners disagree among themselves on what trade deals Britain should do on quitting the EU. The economists go for a radical option: “What other trade agreements do we need? My advice would be: none”. Not the Norwegian model, not the Swiss model, not the Canadian model, not even the Albanian model favoured by Michael Gove.

The pro-Brexit economists argue that Britain should scrap all barriers to imports, and seek nothing more than World Trade Organisation rules for its exports. In their calculations the benefit of cheaper imports outweighs the consequent job losses.

On immigration, the economists differ from the Ukip-minded majority of Brexit campaigners in that they want more non-EU immigration and less immigration from the EU.

There, spelled out clearly, is the second core Brexit argument after the basic Ukip “hate-migrants” case. It is an argument for Britain as an offshore, low-regulation, low-social-overheads, environmentally-reckless site for global capital.

Whether their scheme would “work” in its own terms is doubtful. That it represents the way Brexit points, socially and economically, is not.

The way to fight the neoliberal policies of the EU leadership is by starting from the limited integration across borders created by the EU, and working for cross-border solidarity around demands for social levelling-up, democracy, and more open borders.

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Brexit: a realistic scenario

June 11, 2016 at 11:15 am (economics, Europe, fascism, Guardian, posted by JD, Tory scum, UKIP)

Letter published in The Guardian 10/06/16:

 Boris Johnson speaks at a rally with Priti Patel and Michael Gove in Preston town centre on 1 June

Polly Toynbee is right (There is still time for hope – Brexiters can be persuaded, 7 June). Brexiters can be persuaded if they realise what British politics could be like after a vote to leave. Here’s a realistic scenario.

On 24 June Brexit begins. Cameron resigns. Boris Johnson becomes prime minister, Michael Gove becomes chancellor. With Ukip’s role over, Nigel Farage and company join the Tory party. Scotland leaves Britain. The rump gets a new name (as it can’t be called the UK) – KEWNI – and a new flag

Anti-democratic developments begun under the pre-Brexit government are extended. The Tories form KEWNI’s governments for decades to come. The post-EU economic shock is compounded by the structural problems derived from KEWNI’s dysfunctional capitalism (low productivity, weak innovation etc) and its semi-feudal state. Excluded from the European single market, KEWNI is forced closer to the US and China. Having no choice, it accepts a version of the TTIP with the US. Having shunned the EU’s collective sovereignty, it has no power to insist on safeguards. US companies begin to take over the NHS; Chinese companies, manufacturing and real estate.

Accelerated economic decline inevitably follows. The Johnson/Gove response is even more austerity. The xenophobia currently directed at EU migrants becomes directed inward – against people of colour. Inequality and poverty escalate and dispossessed KEWNIs mobilise in struggle. The government response is repression, both covert and overt. Gradually, KEWNI becomes dominated by an ultra-rightwing nationalism: a version of fascism with “gentlemanly” English characteristics.

Is this what Brexiters seek for our country?
Jeffrey Henderson
Professor of international development, University of Bristol

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Steel crisis: state aid, including nationalisation, is *not* prevented by the EU!

March 31, 2016 at 4:31 pm (economics, Europe, Jim D, reformism, solidarity, Tory scum, unions, workers)

As the UK’s steel industry faces extinction, the Tories prevaricate over what – if any- state aid they are willing to offer in order to save the Tata operations at Port Talbot, Rotherham, Corby and Shotton (North Wales). At least 40,000 jobs are at stake.

Business minister Anna Soubry initially stated that the  government was willing to consider “everything possible” – including nationalisation – in order to save the Port Talbot plant. But now her boss, business secretary Sajid Javid has ruled out nationalisation, arguing “if you look around Europe and elsewhere, I think nationalisation is rarely the answer.” According to the Daily Telegraph, Tata Steel have suggested that EU rules restricting state aid were to blame for its decision to sell the UK steel business – a claim that has been seized upon by campaigners for Brexit, including the supposedly “left wing” Morning Star, always willing to let the Tories off the hook by claiming (entirely falsely) that the British government “is banned by EU competition laws” from intervening to save the industry.

While it’s true that EU rules place some restrictions on using state aid to prop up industries, European governments with the political will have either turned a blind eye to the regulations or found ways round them. For instance, while the EU blocks support for “manufacturers in difficulties”, it allows national governments to nurture the “long term competitiveness and efficiency” of industry, and also to provide state funding to lessen the “social impact” of closures.

Even outright nationalisation is not barred by the EU: Article 345 of the Treaty on the Functioning of the European Union, states: ‘The Treaties shall in no way prejudice the rules in Member States governing the system of property ownership.’http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:12008E345

All across the EU states have majority shares or own and run their own transport and energy sectors. This is confirmed in this 2013 Estep report, commissioned by the EU: http://www.esparama.lt/es_parama_pletra/failai/ESFproduktai/2_UM_valstybes-valdomos-imones_2013-03.pdf

In particular the report states: ‘SOEs are entitled for public services provision, which can be broadly observed in utility sectors such as transport, telecommunications or energy.’

While nationalisation may be restricted it is not banned or illegal. This is a widely-believed myth, promoted, in particular, by the anti-EU “left”.

In Italy the government took control of the Ilva steelworks last year to save 16,000 jobs. Then the firm was handed £74 million for “environmental improvements” – ie direct state aid.

Germany also provides aid to its regional governments on the understanding that steel produced in the country is used on any German building or engineering projects. Germany also operates the part-publicly-funded Gesellschaft, a research organisation that provides applied science for companies that would otherwise find the cost prohibitive.

In 2012 French president Hollande threatened to nationalise Arcelor Mittal steel’s operations in the Lorraine plateau in order to save the blast furnaces of Florange and their 2,500 jobs. He didn’t seem to be particularly concerned about any EU state-aid rules. Ironically, Hollande’s threat was denounced by Boris Johnson – now a leading light of the Brexit campaign.

In a written answer to Labour Euro-MP Jude Kirton-Darling at the time of the Redcar steelworks closure last year, the European Commission confirmed that the UK Government could have given state aid to support the steelworks. Here are some of the ways that other EU governments have intervened to support their domestic steel industries, and other energy intensive industries. There are also examples of regional governments taking initiatives in Germany and Spain.

(Temporary) Renationalisation

In early 2015, the Italian Government temporarily renationalised the Ilva Steel works in Taranto, Southern Italy. The Italian government cited the unabated toxic emissions and very poor environmental standards, which had led to unusually high rates of cancer in the area around the plant. It is estimated that it will cost €1.8bn to make Ilva compliant with the Industrial Emissions Directive’s standards. This decision is currently subject to a complaint from EUROFER (European steel industry association) under state aid rules.

Investment in strategic R&D facilities

The French government are providing state-aid to the ArcelorMittal plant at Florange, in France to support their ongoing R&D work, this follows on from a long running industrial dispute over the closing of two blast furnaces. This public support comes to a total of €20-50 million over 4 years, with a further 33 million been raised in public-private investment.

Support for energy efficiency/environmental technologies

In 2010, the European Commission accepted German state aid of €19.1 million for an energy-saving steel production project run by Salzgitter Flachstahl GmbH, a subsidiary of the Salzgitter AG group. The aid will allow Salzgitter to produce steel through an innovative production process, Direct Strip Casting (DSC), which consumes less energy than alternative processes. The aid is in line with EU guidelines on State aid for environmental objectives (see IP/08/80) because on balance, the positive effects for the environment largely outweigh potential distortions of competition.

Loan guarantees

In 2010, before the May elections (which saw a change in Government), the UK Labour government was willing to provide Sheffield steel producer Forgemasters with an £80m loan to develop new technologies as part of a supply chain for nuclear reactors. While ultimately the new government withdrew this offer, the reasoning for a change of heart was ideological and not related to European State-Aid rules.

Taking a public stake in a steel company

Following the sale of 20.5% of shares in ‘NLMK Belgium Sogepa Holdings SA’ for 91.1 million euros ($123 million), the Belgian public authorities have a shareholding in a new company producing steel which owns steel plants in Belgium, France and Italy. NBH employs about 1,000 people in Belgium, while the European division employs 2,530 people in total. The engagement of the Belgian public authorities has helped strengthen the commitment of the Russian group, and transformed the company carrying the steel business in public private joint venture with the financial support of the Walloon region.

Compensation for energy costs

A range of German Government industry policy interventions provide German industry as a whole, including its energy intensive industries, with a range of long established reliefs from energy and climate change-related duties, levies and taxes:

Over the period 2010-2012 Germany’s support for its EIIs were worth 26bn euros, or some 8bn euros (£6.4bn) a year (table 2).
Support covers thousands of firms. Unlike the UK package, support is not confined to specific sectors.
At company level, in Germany compensation is available for 90% (or in the case of larger and energy intense consumers, 100%) of electricity taxes.

In Sweden, the PFE programme aims to encourage, through incentives (reductions in the amount of energy taxes), energy-intensive industries to improve their energy efficiency. This is a long-term agreement involving the Swedish government, the energy-intensive industries and trade unions. The duration of this program is 5 years. 117 industrial companies are involved in this project (i.e. 250 plants). The Swedish Energy Agency monitors and controls the programme. The Programme Board, established in 2005, brings together representatives from government, business, trade unions and employers as well as research centers. Both with an advisory and regulatory purpose, the Board meets four times a year. After only two years of existence, more than 900 measures were implemented or underway. These measures cost the companies € 110 million but benefited from a rapid return on investment (two years on average). They have saved about 1 TWh per year of electricity, i.e. from 500 kT to 1 million tons of CO2, and a total of € 55 million. In 2010, it doubled its objectives.

Using the powers of the official receiver to support employment & attracting buyers for troubled plants

In November 2014, the Italian government agreed to sell Italy’s second-largest steelmaker Lucchini’s Piombino complex to family-owned Algerian conglomerate Cevital. Lucchini was previously owned by Russia’s Severstal but was declared insolvent in 2012 and placed into special administration. The company received two offers for its core assets in Piombino, one from Cevital and the other from India’s JSW Steel. The government administrator said the Cevital offer was more attractive as it foresaw full employment at Piombino. The Piombino complex employs about 2,000 people and can produce up to 2.5 million tonnes of steel a year.

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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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SNP’s model of independence “is broken beyond repair”

November 18, 2015 at 1:36 am (economics, populism, posted by JD, scotland, SNP, truth)

writes  a former adviser to Alex Salmond, Alex Bell:

images-6

The SNP’s model of independence is broken beyond repair. The party should either build a new one or stop offering it as an alternative to Tory cuts …

 

There is a strange moment in the TV coverage of the 2015 UK general election. Nicola Sturgeon is in a debate and a  member of the audience admits to liking the new SNP leader but not supporting independence. She asks if she should join the party. Sturgeon listens and answers in what seems like perfect modern politicalese – you are welcome, she says. The audience in the studio and at home are comforted by the generosity, the non-tribalism of Nicola. It seems like a perfect example of our political leaders mending fences after a divisive campaign.

Consider what actually happened in that exchange. The leader of a party whose first tenet is independence is asking a person who openly admits she doesn’t want independence not just to vote for her, but to join the party. She is saying, implying at least, that the SNP is for people who are for Scotland – and that alone. There is no prescription to sign up for independence – just sign up for the SNP and its success. (Watch from 0930 onwards)

This shift in the party’s purpose from independence to being ‘Scotland’s party’ is often read as a simple tactic. The leadership are disguising their main aim, sovereignty, until a referendum victory looks likely. In fact something else is at work. The SNP is shifting its emphasis because the leadership can find no way of achieving the core aim safely.

Cut Nicola and no doubt she still bleeds independence, but what she means by that is far less clear than before the referendum. The doubt arises because the campaign towards the 2014 vote, and the economic information since, has kicked the old model to death. The idea that you could have a Scotland with high public spending, low taxes, a stable economy and reasonable government debt was wishful a year ago – now it is deluded.

***************

A lesson of the referendum is that many arguments around independence are simply redundant. We can all agree you can have a nation of any size, governed in any way, seeking to do whatever it wants within the tolerance of the international community. Tranches of what occupied both sides up to September 2014 are simply distractions.

The only thing that matters in Scotland’s argument is this – what will be the likely economic health in the short to medium term, and what will that mean for government spending and borrowing? Dull, but it determines everything else.

2014 was an economic sweetspot for two reasons. It was a good year for oil, and it came after thirty good years. Thus the Scottish economy looked healthy and was able to boast that it had chipped in more to the UK treasury than it had got back over recent times.

That is not the same as being able to say the Scottish economy could afford British levels of spending, which was a significant plank of the Yes promise. That debatable point could be obscured by lots of noise, and the SNP is accomplished at shouting.

But Nicola Sturgeon knows the SNP is good at misdirection. The party’s success has been built on hard work and spin. Behind the scenes she isn’t gullible. It may work in public to rubbish claims by the Institute of Fiscal Studies that there is a gap between what Scots pay into government and what they get out in services, but only fools believe their own propaganda. The fact is a gap exists – Scotland does not earn enough to pay for its current level of spending.

Once you accept that, you acknowledge that the SNP’s model is broken. That model, as expressed in the White Paper and numerous speeches, is that it was possible to move from the UK to an independent Scotland and keep services at the same level, without either borrowing a lot more or raising taxes. It isn’t.

As sure as death and taxes, there will be an economic jolt in the road to independence. Scotland will have to pay to either increase borrowing, raise taxes or cut services to bridge the gap between revenue and spending. And that’s not the only bump.

The second shock to the system will be the cost of borrowing. A new state will inevitably attract higher borrowing costs. Thus the price of the debt we inherit from the UK will go up on independence day. There’s more.

The appeal of the SNP is that it resists austerity. It promised to reduce budgets by (fractionally) less during the 2015 election. In other words, it would borrow more. So on top of the higher cost of borrowing, you would have more borrowing to pay for. It doesn’t end there.

SNP fine print makes it crystal clear that it will not reverse the dastardly Tory cuts on independence. It will not reverse the privatisations or the anti-union legislation of Thatcher and nor will it repair the cuts of Cameron and Osborne. However, it does give the impression that, come sovereignty, it will restore things to what they were. Its central message in Westminster is that the state need not be dismantled. It is therefore reasonable to expect, voters certainly will, that spending goes up on independence. Which will add even further to borrowing.

However, Scotland may not be allowed to borrow that much. A currency Union, either Sterling or the Euro, would come with limits. A brand new currency may not be trusted by lenders. So taxes would have to go up to meet the spending gap and the extra money it takes to ‘repair’ the state.

But there is of course one more bump to overcome – the cost of transferring to an independent state in the first place. Recall all the problems associated with merging eight police forces into one and multiply this by a hundred. What price the transfer to sovereignty? £1 billion, maybe £2 billion.

Thus an economy which couldn’t afford existing spending will be hit by several significant new demands on the Treasury. Without a thorough, independent understanding of those additional charges, you can make no promises on what independence will be like. It is reasonable to assume that all these obstacles can be overcome, but it is stupid to deny they exist. Read the rest of this entry »

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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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Osborne discovers the North … 150 years late

November 2, 2015 at 8:57 pm (economics, engineering, Marxism, populism, posted by JD, Tory scum)

By John Cunningham (also published by Workers Liberty and Solidarity newspaper):

The sham of Osborne’s ‘Northern Powerhouse’

It is alarming and deeply disturbing to see that some people, many of whom should know better, have swallowed George “high-vis” Osborne’s fantasy-speak about building a “Northern Powerhouse”.

This is more amazing when you consider that ever since the Industrial Revolution there has always been a “Northern Powerhouse”, and it was the Conservative Party and Thatcher that destroyed it.

Without the coal, iron and steel, shipbuilding, engineering and textiles of northern cities like Manchester, Leeds, Bradford, Sheffield and Newcastle (to which Scotland and South Wales must also be added), Britain would have remained, as in early Tudor times and before, a rather unimportant European offshore island. Take away the north, and the industrial revolution would have happened somewhere else, with British capitalism ending up a mere shell, reduced to making cuckoo clocks or stuck in an agrarian-based economy.

Instead Britain for a time was the most powerful nation on earth, with a huge empire backed up by the largest navy the world had yet seen. It was no idle boast that Britain was the workshop of the world. Manchester, for a time, became its second wealthiest city. Britain produced over half the world’s cotton, coal and iron and totally dominated manufacturing. Most of this came from the north.

According to an 1835 survey Britain had 1113 cotton mills. Of those 943 were in Manchester and the surrounding region. If today it has become a cliché to say that you can’t buy anything that isn’t made in China, think what the situation must have been like in 1870 when Britain produced 46% of the world’s manufactured goods. In 2007 Chinese products accounted for 17% of the world’s exports. When Karl Marx and Friedrich Engels penned the Communist Manifesto they wrote eloquently and with admiration for the dynamic thrust of capitalism and the way it had transformed the world (as right wing historians are always telling us, as if they are the only ones to have ever read the Manifesto!).

Yet, it is the north of England, probably more than any other part of the world, that inspired and informed the famous lines “All that is solid melts in the air, all that is holy is profaned”. While Marx wrote Das Kapital in the scholarly seclusion of the British Library Reading Room in London, its analysis, observations and rich detail are rooted in the Manchester of Friedrich Engels.

Clearly Osborne has latched on to the north at least 150 years too late. In a sense Osborne is talking about a phenomenon that has been around for a long time — regional disparities in development.

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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)

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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 Corbyn Manifesto: a “move back towards social democracy”

September 14, 2015 at 9:12 pm (economics, labour party, posted by JD, reformism)

By Peter Rowlands at Left Futures (as usual when we re-post articles, it should go without saying that we don’t necessarily agree with all of it – especially, in this case, the author’s reference to supposed “NATO provocation in Eastern Europe”). The piece was written before the leadership result was known:

The Corbyn Manifesto

Corbyn on redJeremy Corbyn (JC) has said that if elected he would want to see the Labour Party democratically develop policies rather than impose his own, and that perhaps means that the policies he has proposed during the leadership campaign are less significant than should be assumed. Nevertheless, because what he has said has helped to inspire huge attendances at meetings and make him the front runner in the leadership contest it is obviously worthwhile to examine the policies he has proposed and what overall they represent.

It has to be said that these policies are not a blueprint for socialism. In fact they remain firmly within a social democratic framework, and reflect what was the norm in the period from 1945 to the early 80s. Indeed, a recent article on Left Futures has suggested that the policies of the SDP that broke away from Labour to the right in 1981 were to the left of what Corbyn is offering today. Why then is Corbynism being seen as something almost revolutionary, both by its right wing opponents and its numerous fervent supporters.

The answer surely is the extent to which the norm has moved rightwards, so that what was commonplace fifty years ago appears extreme today. Thatcherism begat Blairism, which saw no place for even the mildest form of social democracy, which Blair makes clear in his first criticism of Corbyn, where he says that even if Corbyn was to win it would be wrong to do so with his policies.

But in fact the move back towards social democracy began in a limited way under Ed Miliband and is contained in various parts of the recent manifesto, which included the following commitments which are also promoted by JC: a National Investment Bank, ending the Bedroom Tax, banning zero hours contracts, measures to reduce land hoarding, rent controls, carbon emission targets, democratic reform of the Lords, reducing the voting age to 16. Most of these didn’t surface in the election campaign and many JC supporters would probably be surprised that they were in Labour’s manifesto. Measures not mentioned by JC but in Labour’s manifesto include protecting agency workers, neighbourhood policing and, strangely, greater tenant security based on three year leases.

So let’s look at the JC proposals. Firstly , and most importantly, the economy. Here huge savings on business subsidies, higher taxes for big business and the better off and much more work in tackling tax evasion and avoidance are matched by a significant stimulus in the shape of ‘People’s Quantitative Easing’, channelled through a National Investment Bank, for housing, infrastructure and digital technology, and helped by a £10 living wage stimulus. However, there is, surprisingly, no mention of breaking up or exerting greater control over the big banks which even found its way into an earlier version of Labour’s manifesto.

Growth thus engendered would reduce the deficit while enabling cuts to be halted. However, huge savings would happen through not proceeding with HS2 and a renewal of Trident.

This programme has been recognised by many economists as realistic and moderate, and in line with the standard Keynesian approach of all governments up to the 1980s. Criticisms from Cooper and others about the dangers of inflation and overheating are, given the relatively depressed state of the economy, absurd, while QE has been widely used as a tool in the UK and elsewhere.

On energy nuclear would be phased out, with the use of ‘clean coal’. JC wants to nationalise the energy and water companies, at least through a ‘controlling interest’.

The nuclear ( energy ) debate has not yet really taken off here, but clearly the renationalisation of the energy companies ( unlike rail) would be very costly and is at best a long term project.

On housing JC wants 240,000 a year, half to be council housing for which councils will be given greater powers to borrow and suspend the right to buy, which will be extended to private tenants. The general aim is to increase supply and bring down prices. Much of the proposed QE would clearly be used here, unlike Labour’s manifesto proposals where financing was ambiguous, although tenant security was a stronger feature which JC doesn’t mention.

Free higher education is the major education policy, along with free childcare, the return of schools to local control, the ending of charitable status for private schools, more adult learning and apprenticeships, but surprisingly no mention of the ending of selection at 11+. The tuition fees abolition is hugely costly and might have been better dealt with through a graduate tax.

The railways would be nationalised! At last. A hugely popular policy which the Blairites will continue to resist because of what it symbolises.

Health will be integrated with social care, freed from the hugely wasteful PFI and from privatisation.

Europe is a key issue where JC has appeared ambiguous, although he has rightly called for policy to be to remain in the EU, based on defending workers rights and opposition to TTIP.

Defence is one of the most controversial areas, with the call not to renew Trident. Most of what has been written concerns how skills developed within the defence industries can be utilised elsewhere, but the argument against Trident is too implicitly pacifist and needs developing.

Likewise, the policy of leaving NATO was I think misconceived, although this has now been withdrawn. What is surely needed is to ask what NATO is for and what sort of military alliance is needed. However, JC has I think done well in opening up a debate about NATO provocation in Eastern Europe and foreign policy generally.

There is no mention of PR, and although this is not at the moment politically significant it does in my view need considering.

Overall JC’s policies are within a social democratic tradition and build on the limited start made in Labour’s manifesto, although without opposing austerity this inevitably did not attract the support that it might have done.

Let us hope that the huge support for and interest shown in JC’s proposals engenders a continuing and wider debate that lays the basis for a successful challenge to the Tories in 2020 or possibly before.

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