Labour's right-wing Shadow Chancellor, Rachel Reeves, is to put forward reactionary proposals to subsidise small inefficient businesses by taxing larger, more efficient businesses. She is set to announce that Labour will scrap business rates, and instead introduce a new tax aimed at taxing more heavily, the large technology companies and online businesses. It is a thoroughly reactionary proposal to try to protect the businesses of the past by holding back the development of the businesses of the future. Its as though, a century ago, a party were to come along, noticing that companies involved in producing horse drawn buggies were struggling, and to propose to help them out by introducing a tax on the new fangled motor vehicle producers!
The proposal to scrap business rates, in itself, is supportable, because business rates are an inefficient tax, as were household rates, but the better solution, as with a replacement for Council Tax, which replaced the Poll Tax, which replaced household rates, is to introduce a local income tax. Given the extent to which all taxation now passes through highly computerised systems - made possible by the developments of those high tech, online technology companies that Labour now wants to punish by higher taxes - the introduction of an effective local income tax is bot fairly easy to achieve, and to operate. It only requires a local code for each taxpayer, be it an individual or a business, so that the appropriate local tax is collected as part of the general income tax, and is then disbursed to the local authority by HMRC. Something similar already operates in relation to Parish and Town Council precepts, collected by local Councils, and then disbursed by them.
But, the proposal instead to subsidise those smaller businesses, and businesses using the old business model of the twentieth century based upon bricks and mortar operations as against the 21st century, more efficient model of online business, is thoroughly reactionary and protectionist. Its like the reactionary petty-bourgeois politics of people like Sismondi that similarly tried to hold back the march of development in order to try to protect the antiquated methods of the past, or its equivalent, the politics of the Russian Narodniks, criticised in the 1890's by Lenin.
A similar thing can be seen in relation to Labour's proposals to remove the charitable tax status of private schools, supposedly to divert the money to improving state schools. Again, no socialist is going to argue against removing any state provided privileges for the private schools of the elite, but the idea that this is going to make any significant difference to the inequality of wealth and power is risible. Firstly, there is no hypothecation of taxes, so the claim that the additional tax collected from private schools will go to state schools is empty. The tax will simply go into the state's coffers, and from there its anybody's guess where it will actually end up. It could go to finance Labour's commitment to renew Trident, for example, or it could go to provide additional Housing Benefit, which goes straight into the pockets of landlords, as Labour's commitment to the same old policies that led to asset price bubbles, would cause property prices and rents to rise further.
Rather than headline grabbing statements about taxing private schools, an actual commitment on raising the level of state schools up to the level of private schools would be more impressive. For example, what about setting a maximum class size of around 12, the same as in private schools as a start. What about a commitment to raise the capitation allowance to the same level as that for the average private school. You don't need to tax private schools - and indeed the additional tax would not come close to covering the cost - to do that! But, of course, Labour will not do that, and in the past, whenever the opportunity has arisen to reduce class sizes, as a result of falling rolls, instead Labour governments and councils have favoured closing schools, and merging them, so as instead to reduce spending levels. After all, the levels of education seen as required for the ruling class, in order to continue to rule, are seen by the reactionaries of the Tory Party, and the conservatives of the Labour Party alike, to be much higher than those required for the working-class, in order for it to continue to work efficiently, and produce profits for that ruling class.
And, the reality is that, after any such tax change, the ruling class will continue to send its kids to those top private schools. The additional tax for them will not even be the equivalent of what they spend on a good bottle of wine. If you are Lakshmi Mittal with assets of $10 billion, even obtaining just 1% a year return on that, gives you an income of $100 million a year. Would paying an extra £100,000 a year in school fees be any deterrent to sending your kids to the best school, with the almost guaranteed access from there to the top universities? Of course not. In fact, the only people who would really be affected, and deterred, would be not the ruling class, not the really rich, but sections of the aspirational middle class. Its typical of the tax policies of labour and other social-democratic parties over the last century, which systematically failed to undermine the wealth and power of the ruling class, whilst alienating those sections of the middle-class that a progressive social-democratic party should have been winning over.
Once again, Labour has reverted to the old conservative social-democratic agenda that not only failed, but which led to the problems we see today, caused by under-investment, huge asset price inflation, and massive wealth inequality resulting from it. Its policies amount to nothing more than ineffective minor tinkering with distribution, and, as with the proposals for taxing technology and online companies more heavily, is actually reactionary, and acts to hold back the kind of capital accumulation required. It is a reactionary policy based upon undermining real capital accumulation in favour of supporting petty-bourgeois small capital, and supporting the owners of fictitious capital. It is a policy that starts from an acceptance of the existence of capitalism as an eternal and natural phenomenon, and simply seeks to make marginal economic improvements for workers within it, whilst staying well clear of anything that would actually increase the political power of workers within that system to control their lives.
All of the chicken-shit reforms that Labour will put forward at its conference - setting aside the right-wing proposals pushed through to enhance the power of the elite within the PLP, and diminish the power of members - amount to nothing, and could be replaced with one single commitment. That would be to change company law so as to remove the current right of shareholders to control property they do not own. Companies, as socialised capital, are the collective property of the associated producers within them, and as such collective owners, even bourgeois property law insists that it is they, not shareholders that should exercise control over that property.
Bringing about that simple act of bourgeois democracy would change the distribution of wealth and power far more than a century of Labourite economic reforms in the realm of distribution. Workers and managers exercising their rightful democratic control over their collective property would have no reason to make short-term decisions on matters that affect their lives for years to come; they would have no reason to hold back real capital investment in their companies, so as to simply buy back shares for not other reason than inflating the share price; they would have no reason to divert profits into excess dividends, and other capital payments to shareholders, way above what a market rate of interest requires. In short they would act in the interest of the company, not the private interest of shareholders.
Such a reform of the introduction of basic industrial democracy, of control over collectively owned property is not even a socialist demand. The idea that the owners of property have control over it, the right to use and dispose of it, is basic bourgeois property law. And, companies/corporations just as much as cooperatives, are socialised forms of capital, they are capital that is the collective property of the company itself, which can be nothing other than the associated producers within the company. You do not have to be a socialist or communist to argue for such a basic reform, only a consistent bourgeois democrat.
The right to control the property you own, including the democratic, collective control over collectively property, is a basic bourgeois right. It is the kind of right that even a decent, progressive social-democrat would argue for. That right has been implemented, in part, for more than a century, in Germany, which introduced its co-determination laws from the time of the Frankfurt Parliament, and today give workers the right to elect 50% of company supervisors boards. In the 1970's, even the Wilson government, in Britain, appointed the Bullock Committee to investigate such industrial democracy, which made proposals similar to the system of co-determination in Germany. And, the EU put forward its Draft Fifth Company Law Directive. Both these latter proposals never were implemented because of the rise of reactionary, and conservative elements and parties based upon them.
And, of course, the reality is that, even in Germany, where such laws do operate, the workers effectively remain in a minority, because casting votes go to the Chairs of Committees, information is provided to Committees by the top executives acting in the interests of shareholders and so on. Moreover, giving a vote to shareholders, as non-owners of the collective property, let alone half the vote, is democratically indefensible. But, co-determination, at least, highlights the principle, and it is only a matter of taking that principle to its logical conclusion that is then required.
But, labour is not prepared to even hint at any such basic reform. Not even Corbyn's Labour put it forward. That is he extent to which they have gone backwards, even from the social-democracy of Wilson's Labour of more than half a century ago!
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