Friday, March 23, 2007

Marx and PMQs

The latest exchange between Menzies - pronounced "Ming"- Campbell and Tony Blair at Prime Minister's Questions in the House of Commons was of some interest. First, here is the official Hansard , 21 March 2007 (Column 806), record:

Sir Menzies Campbell (North-East Fife) (LD):.... Is the Prime Minister disappointed that after 10 years in government the gap in wealth between the rich and the poor in this country is greater than it was under Margaret Thatcher?

The Prime Minister: That is simply not correct. [ Interruption. ] No, it is not. It is absolutely correct that wealthy people have got wealthier, but it is also correct that the poorest have got wealthier, too. Let me tell the right hon. and learned Gentleman how they have got wealthier. [Hon. Members: “The gap!”] I am sorry, he is absolutely wrong. Those at the bottom end have actually done extremely well over the last 10 years. Let me tell him why— [ Interruption. ] Tories shake their heads, but people have done well because of the minimum wage, which the Tories opposed. They have done well because of the tax credits, which the Tories opposed. They have done well because of extra child benefit, which the Tories opposed. I do not know whether the Lib Dems ever had policy positions on any of those things. Let us be absolutely clear. The average family, particularly with children, has done better under this Government. We have not penalised high earners, but we have helped the lowest earners a great deal.

Sir Menzies Campbell: Will the Prime Minister engage with the argument? How can he possibly be satisfied when the poorest in this country pay a higher proportion of their income in taxation than the richest? How can that possibly be fair?

The Prime Minister: That is simply not correct. [ Interruption. ] No, it is not correct. As a result— [ Interruption. ] Sorry, but as a result of the measures that we have taken, families who are on the lowest incomes do not pay tax until far higher up the income scale than they used to. If we look at how the lowest earners are treated in this country, it is infinitely better than 10 years ago. It now compares very well with other European countries. So as well as the Chancellor having delivered the highest employment rate, the lowest unemployment for 30 years, low interest rates, and the strongest economic growth, he has done a lot for income inequality too.

This is typical, capitalist politician cant. Menzies Campbell is right, although not for the reasons he imagines: the capitalists have grown richer. There is much in the above exchange deserving of socialist comment; don't be shy, post a comment to this blog entry!

I want to draw out one aspect, and that is Tony's comment that the wealthier have grown wealthier and so have the poorest! That is a gem for an end of year "They said it in 2007" review.

The average wage in the UK rose, as shown in this statistic. Compare that with a sample of the rich.

Silly people imagine Marx thought the working class would become paupers and, since they haven't, Marx was wrong. Certainly, the standard of living has grown since the so-called "Robber Baron" Capitalism of the 19th Century; that doesn't disprove Marx's writing on the immiseration of the working class since he was writing about the accumulation of capital and thus the relative position of the working and capitalist classes in the course of capitalism's development. (Marx is easy to understand when you realise he wrote about social relationships.)

Marx made an analogy with buildings: somebody may have a small house compared to his neighbour; then the person gets a bigger house but should the neighbour's domicile become a palace, the person's larger house shrinks to the size of a hut, in a relative sense.


Update Socialist Courier for 27 March looks at child poverty


agitator said...

So it is a case of giving with one hand and taking with the other?

I remember my first job after leaving school, a couple of years before minimum wage, was to work in a Coca-Cola factory for £3 an hour (It was all that could afford see, what with them being such a small company! ;-))

I think it's safe to say that they wouldn't have raised that wage to minimum level without it being enforced. So surely the very poorest workers are a bit better off, even if it's only a *very* small short term gain.

gray said...

Hi agitator

one of the things to realise first is that the minimum wage is not a new idea. It is only Britain that has been slow in passing it (1999). Otherwise minimum wages have been around for a century or so.

Secondly, all things being equal if employers are required to pay a minimum wage instead of say that £3, then that would be an improvement in the conditions faced by workers at the bottom rung of the labour market.

The problem here is are we talking about "all things being equal". I am not sure they are, however I must admit I am not fully into the economics of the minimum wage.

It would seem to me that the minimum wage has a number of goals associated with it: giving workers purchasing power (almost Keynesian in this respect); providing an incentive to get people off social security and into a job, and perhaps thereby lessening the strains on welfare (which is funded ultimately by taxation of profits).