Monday, 19 July 2010

Liberal-Tories Continue To Undermine Economy

There was an item on BBC's “Politics Show” yesterday, about the fact that Britain is facing increasing competition from Canada in the rapidly growing Computer Games Industry. In the past I have pointed out that if British workers are to maintain their living standards, then in a world dominated by global production and a global labour market, they will only do so if production is rapidly shifted to areas which require very skilled labour. It simply is not possible to compete any longer with masses of cheap labour, using the latest equipment in China, India and other rapidly developing economies.

The British Computer Games industry employs 30,000 people. That is the kind of industry size that some of Britain's old industries used to employ. Most of these 30,000 are highly skilled, highly paid people. It is precisely the kind of industry that needs to be developed if British workers are to have any chance of competing in a global market place at anything like their current standard of living. It already earns £1 billion a year, and is set to grow further as an increasing amount of consumer spending moves away from staple items, and towards leisure and entertainment. Labour had promised a tax break for the industry. The Tories who babble on about how their cuts in public Spending will enable the private sector to grow and provide jobs, have axed it, in the budget.

See:Douglas Fraser's Ledger In fact, the two centres of the industry in Britain are Dundee and Salford, both areas which are desperately in need of jobs and regeneration.

Yet, again, we see that the Liberal-Tories seem to be driven by a mind-numbing economic illiteracy. In the 1980's Thatcher oversaw the destruction of much of manufacturing industry, and introduced the complete deregulation of the Financial Services Industry, which along with the policy of opening the monetary spigots from the late 80's led to the Credit Crunch. Now, they are sending the economy into a potentially serious and lengthy recession, whilst undermining the very industries that could provide jobs, and growth in the longer term!

But, as I've suggested in the past, the labour movement is not a passive bystander in these events.Thinking Outside The Box, Porn Free. Yes, the Tories cuts and privatisation programmes have to be opposed, by industrial action, in the short term, but a better response, is actually that put forward by Marx and Engels, which is that workers themselves should set up, or take over these new dynamic industries, and run them as Co-operatives, linked into a wider Co-operative federation, building up workers economic and social power as against that of Capital. The Co-op Bank has £75 billion of assets, the Workers Pension Funds have £800 billion of assets. We need to begin to positively use these resources to build up worker-owned industries, especially in these new, high value, industries, which rely more on Labour than fixed Capital, and which can pay high wages, whilst making large surpluses.

I've recently been reading again through some of the documents and speeches made by Marx for the first International, and what comes through strongly is his desire to build a separate, independent, powerful, working-class economy in competition with the existing Capitalist Society. His demands for “Workers Self Government”, emphasised by his insistence on keeping taxes, to the bourgeois State, as low as possible, his comments about keeping the State out of Education, out of interfering with the workers Friendly Societies, through which the workers insured themselves against sickness and unemployment, his demands in relation to educating workers kids alongside their participation in employment, from the age of 9, were all centred around the idea of raising the physical, mental and moral level of workers above that of the bourgeoisie. Except, for the fact that the Left has collapsed into the kind of bourgeois statism that Marx abhorred, has entrapped workers in a reliance on the bourgeois state, in a way that mirrors their entrapment by Capital, and so has set back that process of building an independent working-class movement by more than a century, and has led the working-class into a moral decay, and false-conscioussnes, workers today should be able to achieve those goals, set out by Marx, more easily than when he proposed them, because of their higher level of affluence today. In some ways, workers in the US have advantages over those in Britain in this regard.

In his Instructions to Delegates to the First International in 1866, Marx wrote about Income Taxes.

“(a) No modification of the form of taxation can produce any important change in the relations of labour and capital.

(b) Nevertheless, having to choose between two systems of taxation, we recommend the total abolition of indirect taxes, and the general substitution of direct taxes. [In Marx's rough manuscript, French and German texts are: "because direct taxes are cheaper to collect and do not interfere with production".]...

Because indirect taxes conceal from an individual what he is paying to the state, whereas a direct tax is undisguised, unsophisticated, and not to be misunderstood by the meanest capacity. Direct taxation prompts therefore every individual to control the governing powers while indirect taxation destroys all tendency to self-government.”

In the US, there is no VAT like that in Europe, and most taxes are collected on the basis set out here, by Direct Taxes. It has had the effect that Marx hoped for here in making workers very resistant to the Capitalist State raising taxes to increase its activity. It has meant that workers in the US have a more independent stance in relation to the State, and are far more self-reliant. When sections of US Capital recently looked to avoid the massive costs for Health Insurance, it faced compared with the costs faced by its European competitors, who benefit from that cost being socialised – i.e. moved on to the backs of workers and the middle class through the tax system – many US workers, who benefit from very good Health Care, provided through their company Health Insurance Schemes, rightly opposed Obama's plans to shift that cost on to them through some form of State run Health Care system, financed out of their taxes.

As Marx, put it, opposing the Lassallean suggestions that there was something progressive in high direct taxes levied by the Capitalist State,

“Taxes are the economic basis of the government machinery and of nothing else. In the state of the future, existing in Switzerland, this demand has been pretty well fulfilled. Income tax presupposes various sources of income of the various social classes, and hence capitalist society. It is, therefore, nothing remarkable that the Liverpool financial reformers — bourgeois headed by Gladstone's brother — are putting forward the same demand as the program.”

Its time the Left stopped basing itself on the bourgeois statist policies of Fabianism, and Neo-Liberalism, and got back to the politics of Marx.

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