Monday 1 October 2018

Labour Conference – Confusion and Bureaucratic Fudge

Labour's 2018 Conference saw confusion and bureaucratic fudge reign supreme. The bureaucratic fudge surrounding Brexit was excellently described in the post from Irish Marxism that I reblogged here, last week. But, that was only one bureaucratic fudge, as was touched on in that post. The other fudge was over party democracy, and the two things have a common root. Such bureaucratic fudges always lead to confusion, but there was a more general confusion at the heart of Labour's economic and industrial strategy. It too has a similar root that flows from the statist, bureaucratic and top down approach that lies at the heart of Labourist ideology. 

Labour conference, as Irish Marxism pointed out, was reminiscent of those conferences of old where the trades union bureaucrats came to the rescue of the party leadership, in order to defeat the party rank and file. The clearest example of that was in relation to the question of party democracy. It was the trades union leaders who provided the backing for the NEC's proposals coming out of the democracy review, which prevented motions from CLP's on the election of Leader, and mandatory reselection of MP's even getting discussed. In the speeches from trades union delegates, justifying their position, we were treated to totally fabricated concerns about the trades unions being excluded from the democratic process, if the CLP proposals were adopted. 

Nothing could have been further from the truth. Trades unions would have continued to have a say in being able to nominate candidates for Leader, as well as trades union members, as affiliates, continuing to have a vote in leadership elections. The same is true in relation to nominating candidates for parliamentary shortlists, and voting in parliamentary selection meetings. What was really going on was that the trades union leaders wanted to keep a close grip on being able to put pressure on the PLP, and thereby to exercise control over if an existing leader is challenged, and who gets on to the ballot where such a challenge is undertaken. The top union bureaucrats are currently happy to support Corbyn, though many of them prior to 2015, would have been happier to have chosen a more centre-left candidate, had it not been clear that many of their members, and the party grass roots were swinging massively behind Corbyn, but what they do not want to see is a situation where, for example, Chris Williamson's democracy roadshow continues to mobilise ever larger numbers of the rank and file behind candidates that will push the party's policies further forward, and further to the left. Still less would many of those bureaucrats like to see the continued democratisation and mobilisation of the party rank and file, spill over into a democratisation and mobilisation of the rank and file of the unions themselves, a development that is long, long overdue. 

So long as the nomination for Leader continues to require 10% of the PLP, the union bureaucrats know that they can prevent anyone too radical, too representative of the party rank and file getting on to the ballot. The same is true of mandatory reselection. The arrangements arrived at enable full time union regional organisers to meet with local MP's, and nudge them in the direction they desire, with the threat that unless they keep within certain bounds, they can use their influence to provide the support for trigger ballots, and of course, the converse is true, making trigger ballots a significant barrier for the party rank and file to overcome, even in getting a reselection process underway. 

The reason the union bureaucrats want to retain that influence is shown clearly in relation to the Brexit fudge. In fact, the large majority of union members, like the majority of party members oppose Brexit, but a cabal of Stalinist/Bennite union bureaucrats still in thrall to the reactionary nationalist ideology of Socialism In One Country, see Tory Brexit as a back door means to achieve their ambitions of 40 years ago, of leaving the EU, and then pushing through a series of left nationalist measures, centred around state capitalist policies of nationalisation and so on. They cannot openly come out and argue such a line, because they know they would get annihilated by the party membership in the ensuing political struggle. So, instead, they have pushed through a traditional bureaucratic top down fudge to prevent even a political debate over the issue. 

It is, of course, quite right that socialists should not simply give a free pass to the EU. As I said before and during the referendum campaign, what was required was a Socialist Campaign for Europe. That would be a campaign that challenged the elements of the EU that undermine the ability of workers to challenge the free market and so on. But, in order to undertake such a campaign, and a struggle to change the EU, it is necessary to be inside it, to be working with the workers of other EU countries, and building an EU wide labour movement that would undertake such a political struggle. It is not an excuse to be outside the EU, confined in the equally capitalistic and free market British state! 

And, the lunacy of the idea of Socialism In One Country, which, on the basis of Labour's policies, amounts, in any case, only to progressive social democracy in one country, or the application of what are essentially only left nationalist policies of the kind that have failed repeatedly elsewhere, and usually failed catastrophically, is that even more in today's global economy, any attempt to carry through such policies, in what is actually a relatively small, and relatively declining UK economy, would simply result in a flight of capital, and an even more rapid decline in the economy, that would make any of the proposals almost immediately impossible to achieve. 

Although, party members have begun to develop innovative new ideas around the idea of building cooperatives, of developing mutualisation and so on, as progressive democratic alternatives to the old failed statist structures of the past, and although the party leadership have given a nod in the direction of such ideas, they continue to be dominated by those old bureaucratic, top down concepts based around nationalisation of the past. It's like Groundhog Day, as they seem to forget that it was the failure of those bureaucratic, state capitalist structures of the past that not only led to the monstrosities of Stalinism, but which opened the door to Thatcher and other conservatives, in the 1980's, to put forward their own reactionary alternatives to them. 

The confusion over the renationalisation of the utility companies, train companies etc., and the proposals for putting workers on boards, and for having 10% of shares transferred to workers and a social fund, are illustrative of this confusion, and have opened the door for the Tories to level obvious criticisms at Labour's proposals. 

The Tories and Tory media respond to Labour's proposals with the obvious and easy response - “How many billions of pounds is this going to cost?” In fact, as I pointed out a while ago, its actually not difficult to answer that question, but Labour spokespeople, every time its asked fail to answer it clearly, partly, I suspect, because they do not themselves understand the answer they are giving to it, which simply increases the impression that Labour's policy is confused, ill-thought-out, and not properly costed. 

The standard response from Labour spokespeople is that it will not cost anything, because whilst the shares will be bought, they will obtain an asset of equal value. On being pressed further they explain that they will buy the shares by issuing government bonds, and typically, because government bonds pay out less in interest than is paid in dividends on the shares being bought, it will actually bring revenue into the government, rather than be a cost. All of this is true, but not easy for the average passenger on the Clapham omnibus to understand. In fact, there are two obvious, and much easier solutions that are easy to present and easy for anyone to understand. 

Firstly, rather than arguing that the government would buy the shares in these companies, and pay for them by borrowing via the issue of government bonds, it would be easier to argue that the existing shares would simply be converted directly into 30 year commercial bonds, paying a fixed coupon. Currently, UK 30 Year Bonds pay around 1.90%. The dividend yield on Severn Trent shares, by contrast is over 4%. So, by this means, no additional debt is issued, whilst the government would reduce the amount paid out to shareholders by the equivalent of more than 2% per share. That would be profit available for reinvestment in the industry, or available as savings that in 30 year's time would more than cover the redemption of the bonds. 

The Tory argument that the renationalisation would cost billions is thereby demolished in an instant. But, as I've set out elsewhere, not even this is necessary. Instead of all the complicated palaver over issuing bonds and so on, as well as all of the half-hearted and complicated proposals for transferring 10% of shares to a social fund, and putting workers on boards, there is a much simpler solution. A Labour government simply needs to change Company Law on Corporate Governance so as to reduce the rights of shareholders to those of every other lender of money-capital to the company. Bondholders do not get a vote at company meetings, they do not get to appoint Directors to Boards, and nor do banks that lend money to companies. As John Kay and Aubrey Silbertson set out more than twenty years ago, there is no reason why shareholders should have those rights either. 

So, if corporate governance laws are changed so that shareholders do not get a right to vote on company policy or to appoint Directors to Boards, instead of company boards comprising only a token 30% of workers, who would thereby be a prisoner of the shareholder representatives on the board, merely giving cover to them, they would be comprised of 100% representatives of the workers and managers within the company. Even now, in Germany 50% of Boards are elected by workers, and that was the proposal of the EU's Draft 5th Company law Directive, as well as of the Bullock Report, commissioned by Harold Wilson. 

But, having only a portion of the Board elected by workers is a confusing fudge. It lends weight to the idea that shareholders have some right to have a vote over control of capital that does not belong to them, and to the idea that allowing workers on to Boards is in some sense a concession to them, whereas, in fact, it is an inevitable consequence of that capital becoming socialised capital. The workers and managers have a right to vote and to elect the company Boards precisely because the firm's capital is socialised, and does not belong to the shareholders, and the only rational means of exercising control over it is via industrial democracy, by the associated producers within the company. 

If Labour made this argument, the Tories objections are immediately undermined, because it is based firmly on the fundamental principles of bourgeois property law itself. There is no justification whatsoever for shareholders to have a vote or appoint directors to exercise control over capital which does not belong to them, any more than just because a bank gives you a mortgage it has a right to tell you what colour to paint your house, what furniture to put in it, or who you can have round for tea. Shareholders gave up possession of the money-capital they lend, as soon as they lend it, and they are paid interest for having done so, in the form of dividends. That is all they are entitled to, and workers and managers in controlling companies would, as a result of competition, continue to pay them a market determined rate of interest on the money they lend. But that is all. 

By the half-hearted argument for buying out shareholders, for putting a minority of workers on boards, and so on, Labour's policy simply sows confusion, and thereby allows the Tories to attack it. The same thing is true with Labour proposals for handing over 10% of shares to workers, into a social fund, with workers limited to receiving a maximum annual dividend of £500, the rest going into Treasury coffers. That has enabled the Tories to describe this proposal as both a sequestration of assets by government diktat, and also a backdoor tax. 

But, the ideology that lies behind these fudges is the same bureaucratic, statist ideology referred to at the start. The need to see things in terms of nationalisation, with the state buying out shares rather than simply enabling workers to take control over existing socialised capital, is a reflection of a statist view of socialism, whereby it is the capitalist state that plays the determining role, not the working class. The same is true in relation to putting workers on boards rather than boards themselves being directly composed of managers and workers elected from within the company. There is then no need for workers to be assigned shares as a source of income. They could themselves individually or collectively buy shares, if they desired, in order to provide them with additional income, thereby removing the Tories arguments about property being sequestered. 

Ultimately, the basis of these bureaucratic fudges, and the confusion that arises from them, stem from the belief in a top down view of socialism, whereby it is the state that acts as the means of control. The consequences of such a view have been seen with devastating consequences in the past. It is something we should do everything to avoid in our current approach. 

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