Bosses, Businesses, Billionaires and Banks

The attempt by the Tories, their billionaire friends, and the media to paint Labour as “anti-business” has rapidly blown up in their face. If anyone had forgotten that it was these same billionaires, and their representatives in the banks that not only caused the worst financial crisis in history in 2008, that threatened to cause a severe economic crisis; if anyone had forgotten that it was those same billionaires that have been seen to have been doing all in their power to avoid and evade paying tax, and yet have got their Tory friends to impose swingeing tax increases, and benefit and service cuts on the rest of the population, to pay for the crisis they caused, then the recent revelations that HSBC has not only provided those billionaires with advice as to how to avoid tax, but also facilitated them in evading tax (which is a crime) should have acted to remind them. That comes on top of the criminal activities of the banks themselves in actions such as the rigging of the LIBOR rate. But, its also no surprise that although the HMRC knew about this activity by HSBC back in 2010, the Tories have done nothing to prosecute anyone. No surprise, because this is the same Tory government that has brought in tax cuts for the super rich, and which has provided Hedge Funds with a £150 million tax saving on their Stamp Duty, whilst those same Hedge Funds have provided the Tories with £50 million in donations!

What the Tories mean when they say that Labour is “anti-business” is that they are mildly “anti” those fat cats that sit atop these businesses and rake off millions of pounds a year in salaries, and other forms of remuneration, but whose contribution to those businesses is, in reality negligible. The same few bureaucrats circulate around the world's top businesses, in the same way that football managers circulate around the world's top football clubs. Whenever a business does badly, its rarely attributed to the performance of the Chief Executive, whilst every success we are told is a result of their unique talents, rather than the talents of the thousands of workers and actual managers in the business, that operate it on a daily basis. These top Directors of the company, are in reality not there to represent the interests of the business itself, but of the money-lending capitalists who own the shares and bonds issued by the company. In other words they represent the interests of fictitious capital against the interests of real productive-capital.

As Marx put it in Capital III, Chapter 27,

“Transformation of the actually functioning capitalist into a mere manager, administrator of other people's capital, and of the owner of capital into a mere owner, a mere money-capitalist. Even if the dividends which they receive include the interest and the profit of enterprise, i.e., the total profit (for the salary of the manager is, or should be, simply the wage of a specific type of skilled labour, whose price is regulated in the labour-market like that of any other labour), this total profit is henceforth received only in the form of interest, i.e., as mere compensation for owning capital that now is entirely divorced from the function in the actual process of reproduction, just as this function in the person of the manager is divorced from ownership of capital...

It reproduces a new financial aristocracy, a new variety of parasites in the shape of promoters, speculators and simply nominal directors; a whole system of swindling and cheating by means of corporation promotion, stock issuance, and stock speculation. It is private production without the control of private property.”

Increasingly, Marx says, these functioning capitalists, the day to day managers of the business are in nature more and more like workers than capitalists. This is particularly the case as the extension of Public Education by capital to provide wider layers of the population with the kinds of administrative, technical and managerial skills required to perform this function increases the supply of such workers and pushes down their wages.  In fact, those "functioning-capitalists" the day to day managers, are just as likely to themselves be members of trades unions like MSF, and to be members of the Labour Party, or other social-democratic parties, if not more so, given their higher level of education, than any other worker.

It is this division of material interest between fictitious capital, speculative, money-lending capital on the one hand, and big industrial capital on the other, which is a fundamental factor in the ideological divide between conservatism and social-democracy, together with the fact that conservatism is also based upon those reactionary sections of small capital, whose very existence is itself threatened by big industrial capital.

“Aside from the stock-company business, which represents the abolition of capitalist private industry on the basis of the capitalist system itself and destroys private industry as it expands and invades new spheres of production, credit offers to the individual capitalist; or to one who is regarded a capitalist, absolute control within certain limits over the capital and property of others, and thereby over the labour of others. The control over social capital, not the individual capital of his own, gives him control of social labour. The capital itself, which a man really owns or is supposed to own in the opinion of the public, becomes purely a basis for the superstructure of credit... Success and failure both lead here to a centralisation of capital, and thus to expropriation on the most enormous scale. Expropriation extends here from the direct producers to the smaller and the medium-sized capitalists themselves. It is the point of departure for the capitalist mode of production; its accomplishment is the goal of this production. In the last instance, it aims at the expropriation of the means of production from all individuals.”

(Capital III, Chapter 27)

Its no wonder then that when the Tories speak about the interests of “business”, they do not really mean the interest of actual businesses, certainly not big industrial businesses, but mean the interests of these billionaires, and representatives of fictitious capital. Its notable that the examples of this “anti-business” attitude that have been cited come down to policies such as the introduction of the Mansion Tax, or clamp downs on the kind of tax avoidance and tax evasion that the revelations about HSBC have brought to light. In other words, not measures against the interests of business, but measures aimed at making these billionaires pay their fair share of tax. The real “anti-business” attitude is that of the Tories, such as their opposition to the EU, which is a requirement for the accumulation of capital on a rational basis, and their policies of austerity, which are an attempt to protect the value of fictitious capital, at the expense of destroying vast swathes of real productive-capital, a policy whose most clear manifestation has been the devastation caused in Greece, Ireland, Portugal, Spain and Italy.

The Tories have claimed that such policies as the Mansion Tax or other such policies against these fat cats is anti-business, because it would stop such people coming to Britain, and investing their money in creating businesses here.  But, this is is complete nonsense for various reasons.  Firstly, it demonstrates why the Tories are so anti-Europe, because a real European state, and single market would have common rules that would prevent such cherry picking by the leaches.  More importantly, it is nonsense because, as Marx describes above, these directors do not invest their own money in these businesses.  They are only bureaucrats appointed by the shareholders to oversee their interests. Often the actual money-capital that is invested in these businesses, that was used to buy the initial productive-capital itself came from the accumulation of money-capital within the economy.

In fact, around £800 billion of the money-capital invested in Britain comes not from these capitalists, but from workers themselves.  It is the money they have accumulated in their pension schemes, but over which they are allowed no democratic control.  That control is exercised by the banks and financial institutions that rake off billions of pounds in commissions and back handers, for doing so. It is a control that is often used against the interests of the workers whose funds it actually is.  But, more significantly, the vast majority of the actual productive-capital employed by businesses does not come from these fat cat tax dodgers, it comes directly out of the profits made by the company itself, a profit which itself has been created by the workers in the business.   

The Tories when they speak about business simply equate it with the interests of these billionaires, and their representatives who sit on the Boards of Directors of companies, looking after their interests. They do not mean the thousands of workers who actually comprise any business, or even the practical managers of those businesses, who are the ones who day to day make the decisions that formerly would have been taken by the private capitalist. And they cannot do so, because it is the unity of interests between all of the workers in the business, and those workers that comprise the “functioning capitalists”, the practical managers, that creates the material basis for the ideology of social democracy, an ideology, which, whilst not socialist, stands in opposition to that of conservatism.

In the 19th century, the Tories represented the interests of all those unproductive classes that leached off the productive classes, as Adam Smith called them (the workers and capitalists).  They represented the interests of the landlords, the clergy, and the money lenders.  It was the Liberals that represented the interests of industrial capital, pulling the industrial workers along in their toe. Nothing fundamental has changed other than today, it is the Labour Party that represents that social-democratic ideology.  Far from being “anti-business”, it is social-democratic parties like the Labour Party, or the US Democrats, that are the true “pro-business” parties, from the perspective of advocating ideas that facilitate the accumulation of industrial capital.