Tomorrow's evening meeting will be:
Thursday, December 07, 2023
Wednesday, December 06, 2023
From the May 1989 Socialist Standard.
worse than ordinary capitalism. What Thatcher has done is to have presided over the operation of capitalism during the worst part of the slump phase of its economic cycle. During such a period redundancies and unemployment reach a maximum and governments are forced to slash social benefits as a way of lowering the tax burden on the reduced profits of capitalist enterprises.
When Thatcher endlessly repeated “There Is No Alternative” she was in fact displaying a clearer understanding of how capitalism works than did the Labour and other opposition politicians. There really was no alternative (apart from socialism, of course). Any government of capitalism during the worst part of a slump would have had to behave in essentially the same way. In short, it was capitalism not Thatcher that has been responsible.
What has distinguished Thatcher has been style rather than content. Whereas other politicians, even Tory ones, would have apologised for having to take the measures capitalism was imposing on them, not Mrs Thatcher. She applied them enthusiastically, seeing them as steps in the cultural revolution from “dependency culture” to “enterprise culture” she believes it her mission to carry out. She has openly proclaimed her aim to be the complete eradication of “State Socialism”, by which she means the theory and practice of the Labour Party — nationalisation, government intervention, redistribution of wealth from rich to poor by means of improved State benefits, subsidised housing, transport and other services — what should more properly be called state capitalism. What she wants is “to roll back the frontiers of the State” and allow the freest possible operation of the forces of the market. In this respect she is more of a Free Trade Liberal than a Tory.
The Labour Party in power has indeed been a failure — the Labour governments of the sixties and seventies not only failed to improve working class living standards as promised, but worsened them for many workers while at the same time mismanaging the finances of the capitalist State by massively inflating the currency — but this has not been the failure of Socialism. It has been the failure of reformism and state capitalism to which we in the Socialist Party have always been opposed.
Unfortunately, this has been seen as the failure of Socialism and has allowed the intellectual defenders of capitalism to seize the initiative. The Free Marketeers re-emerged from the dustbins of history to preach laissez-faire, the survival of the fittest (the profitable) and death to lame ducks and other weaklings and to proclaim that capitalism, profits, inequality, the market were no longer dirty words. Indeed their views can almost be said to have become the official State ideology under Thatcher. Faced with this intellectual offensive, the leaders of the Labour Party have conceded defeat and now promise to run the market economy better than the Tories. Few believe them and most of their activists remain nostalgic for state capitalism, but in any event capitalism whether private or state can only run in one way: as a profit-making system in the interest of a profit-taking class.
So workers should not be taken in by the so-called Thatcherite Revolution which is essentially only window-dressing, one of a number of possible ideological justifications for what any government of capitalism would have been forced to do under the same circumstances. Indeed, the Labour governments in Australia and New Zealand have pursued the same policies, not excluding the denationalisation measures particularly associated with Thatcher.
It is for this reason that we say that Thatcherism is a myth and refuse to fall for calls for the return of a Labour government or some anti-Thatcher coalition. Capitalism without Thatcher would remain capitalism, and it is capitalism and not Mrs Thatcher that is the cause of the problems facing wage and salary workers.'
One day Starmer praises Thatcher “plan for entrepreneurialism”. The next he says that “anyone who expects an incoming Labour government to quickly turn on the spending taps is going to be disappointed”.
Since “entreoreneurialism” (an economic system “characterized by the taking of financial risks in the hope of profit”) is a fancy word for capitalism, it is clear that Starmer, who thinks that capitalism is the only game in town but also understands that it has to be played according to its rules of profits first, openly stands for capitalism and is prepared to run it on its terms by giving priority to business investment for profit over meeting people’s needs. He doesn’t even attempt to deny it.
We don’t need to wait to see that a Labour government will be no different from a Tory one. They are openly telling us that it won’t be — not that it could be anyway, as all government, whatever their political colour, are forced to give priority to profits over people’s needs. The problem is not the Labour or the Tories. It’s capitalism.
Tuesday, December 05, 2023
COP Out (28)
There is far too much carbon in the sky
Where, self-important leaders, with a dearth
Of ideas, jet from all around the earth
To vent hot air, enjoy banquets and try
Looking as if they’re serious about
Rapidly melting glaciers and ice caps,
Forest fires, flooding, droughts destroying crops,
Drilling for oil, letting more carbon out.
They’ll propose taking radical measures,
Whatever’s required to reverse the trend,
Just as long, they’ll say, at conference’s end
They don’t impinge on capital’s treasures.
But then, of course, there’s the question of war,
Missiles and shells make carbon levels soar.
The Competitions and Markets Authority has found that within the groceries sector of capitalist sector of British capitalism, ‘Some branded suppliers have pushed up prices by more than their costs increased.’
‘ Across the food and groceries sector, the CMA found that high inflation has been driven largely by rising input costs, particularly for energy and key agricultural inputs like fertiliser. But the evidence collected by the CMA indicates that, over the last 2 years, around three-quarters of branded suppliers in products such as infant formula, baked beans, mayonnaise, and pet food have increased their unit profitability and, in doing so, have contributed to higher food price inflation.’
Surprise, surprise as Cilla used to say.
However, own label products often provide cheaper alternatives with suppliers of these products earning lower profit margins and competing to win and retain contracts from retailers. In all but one of the relevant product categories the CMA looked at, as food prices have risen, many consumers have switched away from brands towards own label alternatives, or reduced their consumption, leading to a decline in brands’ market shares and profits. This switching is positive for competition and allows those able to switch, to lessen the impact of high food price inflation. ‘
Howzabout a system of society where where free goods and services are produced for use not profit and the only competition would between producers trying their hardest to improve the quality of their goods and services for all of society.
From the Resolution Foundation comes a report on stagflation Britain.
This they say has resulted in:
Real wages grew by 33 per cent a decade from 1970 to 2007, but have flatlined since, costing the average worker £10,700 per year in lost wage growth.
Income inequality in the UK is higher than any other large European country.
Low growth and high inequality means typical households in Britain are 9 per cent poorer than their French counterparts, while our low-income families are 27 per cent poorer.
9 million young workers have never worked in an economy with sustained average wage rises, and millennials are half as likely to own a home, and twice as likely to rent privately, as their parents’ generation.
Half of shift workers in Britain receive less than a week’s notice of their working hours or schedules.
UK companies have invested 20 per cent less than those in the US, France and Germany since 2005, placing Britain in the bottom 10 per cent of OECD countries, and costing the economy 4 per cent of GDP.
Having averaged 33 per cent of GDP in the first two decades of this century, the tax take is now on course to rise over 4 percentage points by 2027-28: equivalent to £4,200 per household.
The Resolution Foundation offers this Fabian solution:
Britain must build on its strengths as the second biggest services exporter in the world, behind only the US, while protecting the place of its high value manufacturing in European supply chains.
Our cities should be centres for Britain’s thriving high-value service industries. But instead, all England’s biggest cities outside London have productivity levels below the national average.
Public investment in the average OECD country is nearly 50 per cent higher than in the UK. Tackling this legacy, alongside the net zero transition, requires public investment to rise to 3 per cent of GDP.
British managers too rarely invest for the long-term. Pressure for change should come from more engaged owners – a smaller number of far larger pensions funds – and from workers on boards.
Hospitality represents a higher share of consumption in the UK than anywhere else in Europe, because it is relatively cheap. Better pay for low earners in hospitality, paid for by higher prices that most affect better off households, will create a more equal UK.
Benefit levels have not kept pace with prices: cuts since 2010 have reduced the incomes of the poor by almost £3,000 a year. Shared prosperity means benefits rising with wages.
A rising tax burden should not just fall on earnings, but should be shouldered by other sources of income and wealth. Wealth has risen from three to over seven times national income since the 1980s.
Higher growth and higher taxes are needed to raise investment, rescue public services, and repair public finances. Higher investment should be funded by higher savings at home, not borrowing from abroad.
There’s no reason to doubt that the people at Resolution Foundation are well-meaning intelligent folk. However, how have they not realised that sticking plaster solutions on the open wounds of capitalism are not the answer to the ills of the British, and global, working class? It’s simple. It’s Socialism.
Monday, December 04, 2023
When the Labour Party was formed in 1900, it was composed of the ILP, the SDF, and the trade unions. It was the beginning of a real mass workers’ party. Within twelve months, however, the SDF had resigned after failing to get a resolution passed committing the party to common ownership of the means of production and class war. The Labour Party soon fell under the influence of reformism. Communist Party of Britain. The SDF evolved in the years that followed and – in 1911 – became the British Socialist Party (BSP). In 1916, the party had ousted the pro-war faction around Hyndman, who then resigned. By this time, the BSP had affiliated to the Labour Party. In 1917, radicalised by the imperialist war, the BSP were deeply supportive of the Bolshevik Revolution. Many of their members took part in the ‘Hands Off Russia’ Committee.
Sunday, December 03, 2023
With over 13 main games in the franchise, some Assassin’s Creed titles tend to be more underrated than others. That is definitely the case for Assassin’s Creed Syndicate which is currently free to download, no strings attached.
Free access to this game merits a mention here as the original publicity is of interest to socialists.
Surpringly, members of our class wanting to know more about socialism, and wondering who they're gonna call - Jeremy Corbyn? Nicolás Maduro? Bernie Sanders? No, they can’t see beyond capitalism - will learn more from the console/computer game Assassin’s Creed, where Marx’s call for workers of the world to unite is repeated along with the following biography: ‘Karl Heinrich Marx (1818 – 1883) was a German philosopher, economist, journalist and sociologist considered the founder of the ideology of Marxism … Throughout his life, Marx published several books, the most famous of which are arguably The Communist Manifesto and Das Kapital. His work in economics laid the basis for much of the current understanding of labour and its relation to capital, as well as subsequent economic thought. Although many revolutionaries, such as Vladimir Lenin, Mao Zedong and Fidel Castro would later cite Marx as an influence, their fidelity to Marx’s ideas is highly contested.’
Saturday, December 02, 2023
The 'rights' they invoke are really modern-day mental chains. The 'right to work' is a demand to be employed and employment is servile, exploitative and a denial of workers’ needs according to ability.
Marx saw sex work as ’only a specific expression of the general prostitution of the labourer’ (Economic and Philosophic Manuscripts, 1844). Engels showed that the suppression of women had its origin in the rise of private property. Rosa Luxemburg and Sylvia Pankhurst shared the socialist vision of Engels and Marx: ‘The mass of the proletariat must do more than stake out clearly the aims and direction of the revolution. It must also personally, by its own activity, bring socialism step by step into life’ (Rosa Luxemburg, What Does the Spartacus League Want? 1918). ‘Our aim is Communism. Communism is not an affair of party. It is a theory of life and social organisation. It is a life in which property is held in common; in which the community produces, by conscious aim, sufficient to supply the needs of all its members; in which there is no trading, money, wages, or any direct reward for services rendered’ (Sylvia Pankhurst, What is behind the label? A plea for clearness, 1923).
Prostitution along with human trafficking, female genital mutilation, misogyny, virginity tests, being taught that menstruation is unclean, circumcision for non-medical reasons, caste/class, homophobia, marriage to children, as well as blasphemy as a crime, non-evidence based medicine & cock and dog fighting - all of them should be thrown in the dustbin of history!
Friday, December 01, 2023
'Perestroika and glasnost had started to unknit Soviet certainties, leaving a society in flux. New enthusiasms included hard rock, horse racing and ballroom dancing, Lacoste sweaters and Pepsi. The influx of visitors for the 1980 Moscow Olympics and a market in ‘much-thumbed western magazines’ had excited new desires, but the average monthly salary of 200 roubles (less than £200) meant most of this remained out of reach for almost all.'
Lenin hastened the development of capitalism in Russia. With regard to Gorbachev and life in state capitalist Russia post 1917, this candid comment from journalist Vitali Vitaliev is worth repeating:"The main mistake of Western analysts trying to assess Gorbachev's career is the attempt to treat him as a kind of God-sent Messiah who emerged to save Russia from 'socialism'. Nothing can be further from reality. Throughout his political career Gorbachev was part and parcel of the apparat. He came not to dismantle 'socialism' but to preserve it. I am putting 'socialism' into inverted commas because there has never been anything of the kind in Russia. No other country is so far from the ideas of equality and fraternity as the Soviet Union. If there was a socialism, or even a Communism at all, it was only for the ruling elite who lived and are still living in a separate world. It is a world of privileges, starting from birth (special maternity homes) going on all through their lives (special shops, hospitals, hairdressers' salons, canteens, toilets and what not) and not ending even with the end of their physical existence (special cemeteries). Yes, yes, special cemeteries for the rulers of 'the first working-class State in the world', where workers are not supposed to be buried' (Observer, 11 March 1990).
Margaret Thatcher in a meeting with Gorbachev reportedly argued at one stage about the merits of capitalism versus 'communism' and she told him '''We are all capitalists. The only difference is that for you it's the state that invests, while for us it’s private individuals.'' Gorbachev was apparently flummoxed' (Mission to Moscow, Sunday Times 5 April 1987). She was correct. Capitalist hallmarks, such as class society, commodity production, profit motive, exploitation of wage labour, markets, etc., exist in Russia, both pre- and post-Gorbachev, as they do worldwide. The very idea of socialism in one country is akin to being a little bit pregnant!
Thursday, November 30, 2023
Tomorrow' evening's meeting will be:
Wednesday, November 29, 2023
Breaking News! The vast, vast majority
Of eight billion human beings haven’t killed
Anyone today, nor were so ill-willed
As to indulge in an atrocity.
Reports are coming in that people aren’t
Generally being greedy, indeed they live,
As far as possible, cooperatively,
Even while constantly being told they can’t.
Investigations, it appears, have exposed
Allegations that vile dictatorships
Are, or were, socialist, come from the lips
Of capital’s mouthpieces; debate closed.
Facts and details, how and which ones to choose?
That choice is what makes or can break the news.
Tuesday, November 28, 2023
There are many examples across the world, including the United Kingdom, of the truth of the maxim, 'To learn who rules over you, simply find out who you are not allowed to criticise.’ The latest example comes from South Korea.
They have utilised their National Security Act, against a 68 year old citizen and jailed him for fourteen months. He apparently has previously fallen foul of this Act three times previously.
His heinous crime? Writing a poem, Means of Unification, which praised North Korea. Under the Act this is verboten.
The BBC reports that he said that ‘if the two Korea's were united under Pyongyang's socialist system, people would get free housing, healthcare and education. Everyone would have a job and fewer people would live in debt and commit suicide.
Note: the original source for this story quoted the Korea Herald but this writer has been unable to find this item on the Herald’s website.
Horatio Nelson hoisted this signal on his flagship, HMS Victory on October 21, 1805 before the battle of Trafalgar began: ‘England expects every man to do his duty.’
It’s not known if the chief secretary to the Treasury, Laura Trott, sees herself cast in the same mould as Nelson. Visual images of her do not demonstrate any shortage of limbs. Unlike Dud she would certainly satisfy Pete’s criteria for the playing of Tarzan.
Ms Trott, whatever affiliations she may or not believe she possesses along with Nelson is now, however, invoking the famous exhortation although the British seamen wounded were not expected consequently to work from home.
Ms Trott said: ‘Of course there should be support for people to help them into work but ultimately there is a duty on citizens if they are able to go out to work they should. Those who can work and contribute should contribute.’
She’s also quoted as saying, ‘ we’re going to put the right mechanisms around you to help you with that. But ultimately, you have to engage with that, and that is an obligation on you as a citizen to do this. And if you don’t do this, we will look at sanctions.’
It’s not reported yet whether she has used Horatio to “shame” disabled people; look what he could do and he only had one arm and one eye! Don’t hold your breath. It will come.
The message, or should that be threat, is underlined on the official GOV.UK website: ‘Stricter benefit sanctions will also be enforced by the Department for Work and Pensions for people who are able to work but refuse to engage with their Jobcentre or take on work offered to them. Benefit claimants who continue to refuse to engage with the Jobcentre will face having their claim closed. The latest published data shows that there were 300,000 people who had been unemployed for over a year in the three months to July.’
There is of courses no reason at all why people who are are termed ‘disabled’, a very wide ranging term, should not participate in society in whichever way they see fit. Coercion, from whichever direction it comes does not go well with anyone whatever their ‘status’.
Unfortunately, the vast majority have a perception ‘disability’. They cannot see the way to abolish the social system which disables us all in one way or another. Abolish capitalism. Everyone is capable of playing their part in the achieving socialism .
Life on the Dole Socialist Standard March 1992
The first time that I walked into an Unemployment Benefit Office to sign on the dole, I pulled up my collar and glanced around surreptitiously in case anyone I knew should see me going in there. Socialist or no, forty-odd years of capitalist brainwashing can't fail to have some effect.
Despite having sold my labour power to the same employer for thirteen years, when "rationalisation" (what used to be called asset-stripping) strikes, the result is redundancy. It’s cold comfort to know that thousands of other wage slaves are suddenly finding themselves in the same position, through no fault of their own but due to the continuing tendency to recession, depression. over-production, crisis which is inherent in capitalism. Nevertheless, the result of the conditioning and propaganda is what its meant to be—guilt, shame and the feeling that losing your job is your fault. A local newspaper reports that there are 35 people chasing every job vacancy in the West Midlands. Another report tells of a man who is so desperate for work that he is offering to pay a thousand pounds to anyone who will employ him.
The real scroungers
With no previous experience of labour exchanges, and having perceptions of such places defined by Bread or Charlie Drake’s The Worker, it's little wonder that the "no longer gainfully employed” should approach the Unemployment Benefit Office with trepidation. For, in a society where an individual’s worth is measured not by personal qualities, but by their occupation, to lose your job is to lose your status in society and your personal identity. Try renting a television, or applying for credit to buy a car. When replying to the question what is your occupation with the answer “unemployed", the smile on the face of the salesperson will freeze, and you can bet your last ten pence that your application will be refused.
Perhaps they would be more impressed to be told that you are now an industrial reserve army member. More likely, the mistaken working class perception will flit through their mind—dole scrounger. For you have now attained that enviable state which those who still spend their days fighting through ever-worsening traffic chaos, and increasingly, their weekends, in order to spend their days doing boring, alienating jobs yearn for. You can please yourself as to what you do and when you do it. Unfortunately, for those working class members of the "leisured class" there is one small problem. We all still live in a capitalist society where every necessary means of life, from food to shelter to clothing to transport, is only available if you have the money to pay for it.
To belong to the real "leisured class” means being a member of that minority class who own most of the land, factories, shops, banks, transport, etc—those who real scroungers in society because their wealth is produced for them by the majority who have no other means of living but to depend upon having a job, pension or unemployment benefit.
Added to the obvious problems encountered by workers who find themselves in the position of unpaid wage slave, as opposed to paid slave, is the straitjacket imposed by the Unemployment Benefit Office. If you didn’t know it before, you very quickly discover that your sole purpose on this planet it to provide surplus value, i.e. profits and wealth for the minority ruling class.
If the fact of living in a society where commodities are produced for profit, not need, isn’t sufficient incentive for you to try your hardest to get a job—after all, if you can’t pay for it, you can’t have it— the UBO, run by other wage slaves, will insist that you are "available for and actively seeking work” before it will even entertain your claim. Even when your claim has been initially accepted, there is likely to be a delay before you begin receiving the pittance known as dole money whilst forms are shuttled back and forth between UBOs and your previous exploiter to ensure that you are not trying to defraud the state. Nobody, it’s said, starves any more. If your previous employer decides that you were a troublemaker, they have the power to bring you damned close to it if they provide the UBO with negative answers to its questions.
On every visit to the UBO to sign on, you are required to prove that you have been "actively seeking work”. After a “permitted period” the 1989 Social Security Act restricts your right to refuse jobs because of the low pay offered. Why does the working class, employed, unemployed, pensioners, housewives and children. continue to put up with the economic exploitation and political control exercised by a minority class?
Understanding the social alternative—a wageless, moneyless, classless, leaderless, stateless society where goods are produced for need, not profit—is as simple as ABC’ compared to the minefield of bureaucracy to be traversed when trying to obtain paltry dole money. Despite the promises of Jam Today, forever being made by those lapdogs of the capitalist class, the politicians, most of us are still struggling to obtain bread and dripping.
The time to make capitalism redundant is long past. It’s the working class which runs capitalism from top to bottom for the benefit of the minority. Think what we could do with the opportunities presented to us by a new society— socialism.
Saturday, November 25, 2023
Friday, November 24, 2023
A meeting on this theme will take place later today at 19.30 (GMT).
Thursday, November 23, 2023
Is it time to revive the 1910 music hall song, ‘Don’t go down the mine Dad!’?
A miner is saved from a pit tragedy by by taking notice of his child’s dream that there will be a disaster there that day.
The song should now be renamed, ‘Don’t go down the mine Mom!’
Reuters reports that due to the shortage of manpower because of the still ongoing conflict between Ukraine and Russia women are now having their labour power exploited as underground coal mining in a bid to keep the capitalists profit high.
The mine’s owners, ,DTEK, the mine's owner and Ukraine's largest private energy company, says nearly 3,000 of its 20,000 mineworkers are fighting. This mine is somewhere in Eastern Ukraine, but the owners don’t want its name or location divulged, security don’t ya know,
Altogether it is reported that four hundred plus women work underground at this company’s mines. They join there male counterparts in the capitalist process of exploitation.
The mine in question lost a thousand working class men who went of to fight in the capitalist war. One hundred women went to go and work at that location. Because there were no other jobs says a Ukrainian women now engaged there.
History abounds with examples of women doing men’s jobs particularly during various conflicts and wars, including making the armaments to maim and kill sons, husbands and brother’s of other women who belong to the working class. Women in Ukraine have also donned uniforms.
Women’s efforts to oppose capitalism should not be overlooked. They are an essential part of the endeavour to replace capitalism with the only sane alternative, socialism, where killing and injuring humankind will be consigned to the dustbin of history it deserves. Let it not be forgotten that women and children have, and are, victims of capitalist hostilities too.
Capitalism isn’t now, or ever has been, fussed who fights on its behalf or who it exploits.
In a speech in 1868 Karl Marx said, ‘It was not until 1833 that the hours of labour for children were limited to twelve. In consequence of overwork there was no time left whatever for mental culture. They also became physically deteriorated; contagious fevers broke out amongst them, and this induced a portion of the upper class to take the matter up. The first Sir Robert Peel was one of the foremost in calling attention to the crying evil, and Robert Owen was the first mill-owner who limited the hours of labour in his factory. The ten hours’ bill was the first law which limited the hours of labour to ten and a half per day for women and children, but it applied only to certain factories.’
The Socialist Party’s Declaration of Principles includes the following:
‘That as in the order of social evolution the working class is the last class to achieve its freedom, the emancipation of the working class will involve the emancipation of all mankind, without distinction of race or sex.’
THE SOCIALIST PARTY: AGAINST ALL CAPITALIST WARS!
Wednesday, November 22, 2023
“O frabjous day! Callooh! Callay!”
The Guardian reports that the ‘National Living Wage’ will increase by a pound an hour: ‘Nearly 3 million low-paid workers will receive a pay increase of almost 10% next spring after the chancellor announced an increase in the national living wage to £11.44 an hour. Jeremy Hunt said the earnings of full-time workers would rise by £1,800 a year as a result of a move that the Low Pay Commission (LPC) said met the 2019 Conservative pledge to end poverty pay in the UK. The increase from £10.42 to £11.44 comes against a backdrop of a cost of living crisis in which inflation peaked at 11.1% – the highest in 40 years. Eligibility for the national living wage (NLW) will also be extended by reducing the age threshold from 23 to 21.’
From the October 1995 issue of the Socialist Standard
The Labour Party's support for the concept of a minimum wage is not based on its concern for low-paid workers, in fact, Labour's real aim is to cut the expenditure, in the form of benefits, of the capitalist state it hopes to inherit.
The Labour Party went into the 1992 general election committed to introducing a legally enforced national minimum wage which, they said, would eventually amount to two-thirds of the level below which half all wage and salary earners fall (or the “median wage”, as the statisticians call it):
“Labour will introduce a national legal minimum hourly wage, starting at a level of 50 per cent of the mid-point of men's earnings (the median) . . . Four million people will benefit form this minimum wage. Over time, Labour will increase the minimum wage as a proportion of earnings to a point where no-one is paid less than two-thirds of the median male hourly rate ” (Looking to the Future, 1990, p. 37).
In today’s money this would give an hourly rate of about £5.50, or a minimum wage for a 39-hour week of £214.50, or over £ 11,000 a year. Of course there was never any chance that this was going to happen. You can’t legislate into being wage increases of this order, amounting in some cases to over 50 percent. Capitalism just does not work that way. Its economic mechanism responds not to government decrees but the realities of profit-making in competitive markets. The government could indeed pass a law aimed at ordering employers to pay a minimum wage at this level but, as this would cut into profits, the result in an economy based on the economic law of “no profit, no production” would be an economic downturn and a growth in unemployment.
The Labour leaders—who are nothing these days if not economic “realists”— were well aware of this. Which was why they proposed to reach the goal of two-thirds of the median only gradually, starting by introducing a law to fix the minimum wage at half it. This is the £4.15 or so to which Bill Morris and the T & G and other unions are still committed. But even this is pie-in-the-sky which will never come about, and wouldn’t have come about even if Neil Kinnock had entered Number Ten in May 1992. The economic mechanism of capitalism just won't wear it.
Since Kinnock went, Labour, first under Smith and then under Blair, has backtracked even further. It is still committed to the concept of a national minimum wage but not to any specific amount. This, they now say, is to be fixed by a commission made up of employers, unions and others and, we predict, would amount to about the same as the old Wages Councils, abolished by the Tories in 1993, used to come up with: about £3 or so an hour (in today’s money).
In other words, the most Labour would do would be to restore the pre-1993 situation, extending it to all industries and services so as to be able to call it a “national” minimum. This latter will only be window-dressing since most industries pay their workers above this hourly rate, otherwise they would have been covered by a Wages Council.
But why does Labour—now under arch-realist Blair—want to keep to the idea of a minimum wage, especially as it is going to earn them a lot of stick from the Tories? Since they now take the support of active trade unionists for granted, it can’t be a sop for their benefit. The reason lies elsewhere: it is part of their plan to reduce spending on welfare benefits as their contribution to trying to solve the fiscal crisis of the capitalist state.
A bit of theory
The basis of capitalism is the wages system, under which the work of production is done by people selling their particular ability to work to an employer in return for a wage or salary. Wages for particular types of skill are fixed by market forces at the amount of money workers require to buy the things needed to maintain their particular skill, plus an element to cover the cost of raising a family to replenish the labour force when they retire.
In the long run workers must get paid this amount, otherwise they won’t be able to maintain their skill, and their employer will begin to suffer in terms of absenteeism, increasing labour turnover, shoddy work and lower productivity.
So, in a sense, market forces—aided by pressure from unions—already tend to ensure that wages don’t fall below a minimum level: that below which the workers wouldn’t have enough money to maintain their skill adequately. However, there have always been some kinds of work—those requiring little training or experience and performed for a mass of small employers—where, because supply permanently exceeds demand, and because trade union organisation is difficult, market forces bring about a wage that is below this level.
What this means is that, in the terminology of Marxian economics, these workers get paid less than the value of their labour-power. They don’t get paid a “fair” wage even by capitalism’s standard of fairness, i.e. the full value of what they are selling.
This creates problems both for their immediate employers and for the employing class as a whole which has to foot the bill for the increasing ill-health and destitution that result from paying workers over a long period less than the value of their labour-power.
The problem for their immediate employers is that, even if they wanted to be a “good” employer and pay their workers the value of their labour-power as a means of getting their money’s worth in terms of work done and profits made, they can’t because of competition from other employers. None of them dares make the first move for fear of losing business, indeed of going out of business.
The solution that has been adopted in Britain has been two-fold. First, to introduce minimum wages in the trades concerned and, second, to introduce Family Allowances.
It was the Liberal government in 1909 that took the initiative and set up trade boards, later called Wages Councils, in the “sweated trades”, such as the retail trade, hotels and catering, and the rag trade, where workers tended to be persistently paid a wage below subsistence level. Under this system the employers, the unions and government officials met to fix a minimum hourly rate for the particular trade. It was an offence for an employer to pay below this rate. There was no national minimum wage, only different minimum wages for the different trades.
Family Allowances (now called Child Benefit) were introduced by the wartime coalition government in 1945. But, as the pamphlets Beveridge Reorganises Poverty and Family Allowances: A Socialist Analysis which we in the Socialist Party brought out at the time explained, this was not at all what it appeared to be: a money payment by the capitalist state which would leave all those with two or more dependent children better off by that amount.
Under capitalism and its wages system any regular payment received by workers in employment is going to have an effect on wage levels. This is because, as explained, wages tend to be fixed at a level which provides workers with enough money to buy what they need to maintain their particular skill in working order and also to bring up a family to take their place in the labour force when they are too old to work. If the state makes a contribution towards these costs, this means the workers’ immediate employer doesn’t have to.
The effect of any generalised state payment to workers in employment will be to depress, not necessarily the standard of living, but the wages paid by employers. This was why, in fact, Family Allowances were for a long time opposed by the trade unions. As we pointed out at the time:
"The real issue is not that certain unscrupulous employers may seek to save out of wages amounts paid in Family Allowances, but that once it is established that the children (or some of the children) of the workers have been ‘provided for' by other means, the tendency will be for wage levels to sink to new standards which will not include the cost of maintaining such children ” (Family Allowances, pp. 11-12).
In 1971 the then Tory government of Edward Heath breached a hitherto sacrosanct principle of the welfare state that no means-tested benefits should be paid to any worker in employment. They introduced a new benefit called Family Income Supplement (now called Family Credit), in effect a means-tested Family Allowance, payable to workers in employment whose income was below the poverty line, i.e. more or less what they would have got had they been on what is now called Income Support.
The logic behind this was to provide an incentive for people to take a job, however miserably paid. The result has been unsatisfactory from the point-of-view of the capitalist class as a whole. The cost of all state benefits payable to workers in employment (housing benefit, council tax benefit as well as Family Credit) has spiralled to over £2 billion a year.
Some employers—those in the modern sweated trades—have benefited. Knowing that the state will bring workers with children up to the poverty line they have been enabled to pay these workers below-the-poverty-lines wages. As Labour's deputy leader John Prescott has put it:
“Family Credit is now part of wage negotiations, with employers offering £1 an hour and saying: ‘I know you can‘t live on that, but if you nip down to Social Security, they’ll make up the difference (Observer, 28 August 1994).
Family Credit and other in-work benefits have, in other words, acted as a subsidy to these employers. This has caused resentment amongst other sections of the employing class who have to pay this subsidy out of taxes that, in the end, fall on their profits. This is where the Labour Party has come in with a proposal to help.
Labour to the Rescue
In their July 1995 campaign pack Low Pay. A Tory Failure, the Labour Party repeats again and again that their minimum wage is designed to reduce state benefits paid to workers in employment:
“A minimum wage will not only act as a floor for pay. It will also ensure that in-work benefits do not act as a subsidy for low-paying and poor employers. ”
"Taxpayers would benefit because a floor under wages would reduce the need for tax handouts to low paying employers. Today employers have an incentive to lower wages at the taxpayers' expense."
"Every taxpayer is now paying £100 a year for in-work benefits for people in low-paid work. People who have no protection against exploitative pay rates are forced into dependency on the benefits system whether they like it or not. And employers have no incentives to raise wages because they know the benefits system will subsidise the poor wages that they pay by what is, in effect, a tax handout to employers. ”
What Labour is proposing (and are rumoured to want to do over maternity pay) is what the Tories did over Sickness Benefit: to cut back on state payments by shifting a part of the cost on to employers in the form of statutory sick pay. Labour’s aim is to shift some of the burden of maintaining workers on low pay at the subsistence level on to the employers who have been benefiting from the present system.
But what about the workers? The low-paid workers existing on the poverty line. It’s not going to make much difference to them since the argument is about who is going to pay their subsistence income and in what proportions not about its level.
As far as the low paid are concerned what will happen is that what the right hand gives away in the form of a slightly higher minimum wage for some the left hand will take away in the form of reduced Family Credit. People on Family Credit get their benefit reduced by 70p for each £1 by which their income increases. So if their hourly wage was increased from, say, £2.50 to £3 they would only be 15p an hour better off not 50p. And if the increase lifted their income above the qualifying level for Family Credit they would find themselves worse off through losing the accompanying entitlement to housing benefit and free prescriptions and dental treatment.
Labour’s national minimum wage is not a genuine reform in the sense of a measure to bring about some improvement in working class conditions. It’s an economy measure designed to save the capitalist state money. They don’t fool us. Let’s hope that they don’t succeed in deceiving too many of the low paid either.