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Inequality and British Capitalism

As we saw the other day, inequality has become so pathological that capitalism could seize up. When lucrative markets are locked down, when governments bow and scrape to big business, when social mobility is choked off, and the unobtainable opulence of the vanishingly few is crassly paraded in front of the many, capitalism is going out of its way to court an existential crisis. Though, of course, there is no one as such to blame for this state of affairs. And that’s the most terrifying thing about the system. Capitalism is blind. Market-driven production for profit means our economics are only interested in basic human needs if there’s money to be made. It’s how hunger in the advanced nations can co-exist with Google Glass. It’s how worsening climate change runs alongside the “greenest government ever” making it even easier to allow fracking. Forget the invisible hand – we need to talk about the invisible wrecking-ball. This is why the likes of Nick Hanauer has to pen memos to his fellow plutocrats about inequality, because left to its own devices capitalism will drive itself off a cliff.

What does inequality mean to British politics? Everything. There are many kinds of inequality out there, but in Britain, the world’s first capitalist nation, its politics has long reflected the class relations capitalism produces and depends on. The Conservative Party was – and still is – a coalition of land, business and finance. And Labour, basically, a coalition of everyone else. The former represents money made from the labour of others, the latter the labourers who make money for others. So when it comes to the question of inequality, where do the parties sit? How do they address the problem?

Well, the Conservatives do not. We are told the Tories have a long-term economic plan. Dave and co are eager to utter those words at every available opportunity. But do they, really? More on that another time. For now, whether in possession of an economic plan or not, they certainly do not have a programme for addressing inequality. In fact, is it even recognised as a problem? Clearly not. For them, inequality is good. Rip out the social security safety net and you have a mass of people who, of necessity, will queue up for the latest zero hours, minimum-wage offering down the dole office. And this is a good thing. If you’re ever fortunate enough to receive a ministerial letter from the DWP, they wax lyrical about the mental a physical health benefits of being in work. Low paid work encourages employees to graft harder, to work their way up the greasy pole. It demands discipline and self-responsibility. Best of all, low wages are attractive to overseas investors. Where else in Western Europe can you find a benign corporate tax regime, excellent transport links to the continent, and an educated work force on the cheap?

Previously, I’ve mentioned, from the standpoint of British capitalism, how dysfunctional the Tories are. They are, but that’s because they pursue the short-termist logic of individual capitals. Every business strives to produce commodities at minimum cost, thereby reducing the risk each commodity represents when it goes on sale and maximising the potential realisation of surplus value (see point nine, here). Examples of how businesses go about this is the introduction of labour-saving technology, IT systems, greater surveillance and supervision of the workplace, forcing through temporary and zero hour working. We could be here all day listing the means by which individual capitals wring every bit of surplus value possible out of their employees. And, of course, they have an interest in keeping the work force as individuated and atomised as possible. Disorganised workers do not challenge management decisions. Disorganised workers accept whatever pay and conditions are thrust upon them. So trade unions, wherever possible, are a no-no. The Tories are basically governing Britain as if it was Amazon or McDonald’s. Grind the workers down, pretend there are no long-term structural problems, and celebrate inequality not just as a virtue, but a selling point.

Labour is different. Forget the far left fairytales you might have been patronised with, Labour has always been a party of capitalism. Let me repeat that. Labour has always been a party of capitalism. Yet, because it is a labour party, it has a varied and patchy batting record for the interests of working people. Working people here is everyone who, of necessity, works for a wage or salary in all the possible jobs you can think of. And interests are their particular and general interests as they exist within the system. Also, as a party of labour, it is suffused with the potential to become something more than just a better manager of British capitalism. But more about that another time too. As big business abandoned Labour prior to the 2010 general election, it has become more dependent on affiliated unions and cash raised by party members. The party’s circumstances may be reduced, but it is much clearer about the problems British capitalism faces. Look at the emerging party programme. Decentralisation of government, 50p tax, jobs guarantee, attacking land banks, no EU referendum, reversal of NHS marketisation, higher minimum and living wages, ambitious house building programmes – even the maligned training or no benefits for the young unemployed – they slot together as scaffolding around a creaking, tottering capitalism stubbornly stuck in relative decline. Ed Miliband talks an awful lot about inequality, and has even mentioned the S word. This, of course, is not socialism. It’s a vision of a managed capitalism different to the 1945-79 Keynesian consensus, but not entirely dissimilar. It’s a vision in which inequality is eroded, in which the power of the state breaks capital’s collective investment strike, and gives stability and security to millions of people without it.

It is the party not based on capital that can see the general interests of British capital most clearly. Trotsky’s theory of permanent revolution is seldom spoken of these days, let alone used intelligently to shine a light on capitalism’s guts, but an occasionally useful tool it remains. For those not au fait, it’s basically the thesis that nascent capital in colonial or semi-colonial countries were not capable of leading anti-imperialist revolts and developing a national capitalism because their immediate interests were too bound up with those of the occupier’s capital. Only proletarian-led forces, which are free of those interests, have the capacity to take power and get development moving. Whether that has been confirmed or refuted by subsequent history need not detain us here. Yet, surprisingly, it has some purchase on the position of social democratic and labour parties in the advanced countries. After the war, as British capital lay exhausted and its bourgeoisie rudderless, in six short years Labour restructured the system. It could not be any other way. The Tories through a million and one ties of friendship and kinship were bound to the old, inefficient and exploitative way of doing things. From an existential stand point, they were incapable acting as Labour did. And so it is the case today. We scorn at the prospect of Dave ever standing up to the hedge funds, the fossil fuel lobby, private health, because they’re his mates, his bedfellows, the bedrock of the Tory Party. The Tories cannot enforce the sort of reforms endorsed by Labour because acting in the interests of capital-in-general means going against the interests of the capitals-in-particular they are heavily dependent on. Labour’s different social base allows it, compels it to act differently.

With the fall of the Berlin Wall, we’ve had to endure 25 years of triumphalism, of dog-eat-dog capitalism being the only game in town, of scorn poured on claims of socialism’s superiority to capitalism. Yet the historical egg could be on our ideologists’ faces. Marx is very clear that socialism is a real movement, a real tendency in really-existing capitalist societies. Trade unions and labour parties are vehicles and incubators of that movement and, in Britain, is the only political force capable of saving British capitalism from itself. What a lovely irony.

This article first appeared at All that is Solid

One Comment

  1. Bernie Evans says:

    With increased concern over a likely crisis in NHS funding, it becomes more important than ever for the tax gap to be closed, and a “reappraisal of priorities” to take place.Will Hutton`s article in last week`s Observer on the lack of ethics in the corporate and public sectors showed how “the absence of purpose, of a moral language within government, media or business” have infiltrated society.
    America faced similar problems in the 1930s after the previous profit-at-any-price, “fast buck”, decade, and perhaps Miliband, as clearly the other main party leaders are not concerned, could learn from this Roosevelt too. Fearful of wild Republican and media accusations about “revolution” and “communism”, FDR`s solution was the Blue Eagle, awarded to all companies working towards an economic recovery for the country, rather than just their shareholders; these awards could be use to attract custom, and were also a means, of course, by which consumers could judge where to spend their money. In this country similar accolades,rather than the costly bribe of 12 months tax breaks, could be given to companies which pay a living wage, at least, to all their employees. All businesses which pay the correct amount of corporation tax would be eligible to receive one, too. Perhaps there could also be one for introducing apprenticeship schemes, another for allowing trade unions, for not paying obscene salaries and bonuses at the top, and a Fair Rent award to non-exploitative landlords? Allied to these could be a re-vamped Honours system, which did not recognise greed and tax avoidance.
    Such a proposal would be a step in the direction towards not only “responsible capitalism”, but a time when funding our most essential public services would not be at the whim of politicians and ideologues!

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