Dealing With Energy Prices

As I wrote, last week, the current high energy prices could be ended overnight. An element of them is due to the general inflation that has arisen from vast amounts of money tokens thrown into circulation during the idiotic lock downs, and the answer to that is to stop printing additional money tokens, but a large part is due to the actions of NATO imperialism in attempting to block and boycott exports of Russian oil and gas. However, we have no immediate means of changing that, so we have to consider other immediate solutions. Those solutions, to be effective, can only be collective class based solutions.

So, campaigns like “Enough Is Enough”, which are basically petty-bourgeois, individualist and liberal consumerist solutions, can never provide such a solution. Whilst, of course, there are going to be individual households who actually cannot pay their energy bills, as there always are, and always have been, and that number will undoubtedly increase, what this campaign seeks to do is to put the onus on those individual households to respond in an atomised manner, to their position by refusing to pay. Well, if you can't pay, being told to refuse to pay isn't really helpful is it? What the campaign really is aimed at is a campaign of civil resistance, of actually not just those who can't pay, but of others along with them, who can pay, but who are then encouraged to refuse to pay. This kind of consumer boycott, is pure liberal individualism. Its not even like a rent strike, where all tenants in a building or community can join together to provide solidarity to each other.

The real immediate solution for households suffering poverty – and as I've written before there is no such thing as fuel poverty, or food poverty and so on, there is just poverty full stop – is to increase their income. That might be from increasing wages, or by increasing pensions and benefits for those not in work. Those solutions are ones that can be achieved by collective action. Workers by joining trades unions, and taking action can demand and win higher wages, and that is particularly the case when, as now, there are labour shortages throughout much of the economy. Workers as a whole, via the TUC, can take action, and demand a much higher Minimum Wage, on behalf of all of their comrades who are in jobs where organisation is difficult to achieve, and where the workers have less leverage, and, similarly, they can take action to demand a large rise in pensions and benefits for those that have retired, or who are unemployed.  Similarly, they can take action with workers across Europe to demand that NATO scrap its sanctions against Russian energy exports, and that the EU agrees to pay for gas in Roubles, and that Germany open up Nordstream 2, which would end the crisis overnight.

Given the current high level of inflation, such general class action could also demand that all of these wages, pensions and benefits be indexed each month to a workers' cost of living index, calculated by trades unionists and socialist economists. Of course, alongside that general class action to protect workers from high energy prices, and inflation, we should also continue to point out the actual causes of that inflation, rooted in the astronomical amounts of money tokens that central banks have printed over the last 40 years, whose primary goal was to inflate asset prices, so as to protect the paper wealth of the ruling class, as well as in the actions of NATO imperialism in blocking huge amounts of cheap energy entering the European market. Simply reversing the German decision not to open the Nordstream 2 pipeline would reduce gas prices overnight, and provide Europe with huge amounts of cheap energy, for example.

The petty-bourgeois nature of “Enough Is Enough”, is also manifest in this statement by one of its backers – Anti-Capitalist Resistance. Susan Paskoff, reviewing Labour's strategy writes,

“Not allowing the energy price cap to rise is a good thing”.

But, as I set out recently, that is not true. It would mean that even more of the energy distributors would go bust, as they could not recoup their own massively increased costs of buying energy from producers. That would throw UK energy supply into chaos, doing no good to anyone - not to consumers who would lose supply, not to energy supply workers who would be thrown out of a job!

And, Paskoff admits that the only way this would work would be if the state itself stepped in to provide massive subsidies to those energy supply companies, to cover their additional costs. Labour only has plans to provide such funding until next April. The real answer, to that, is not such massive subsidies, which would cause government borrowing to rocket, but is the kind of rise in wages, pensions and benefits described earlier. 

At the very least, individual groups of workers, as they already are doing, can organise and take action to demand rises in their own wages, and that requires no reliance on the government pursuing the kinds of polices to restrain prices, and so on that the consumerists are calling for. Successful action for much higher wages – which, with Citigroup now forecasting RPI inflation of 21%, now means wage rises of around 25% - would itself spread over into other groups of workers, giving them confidence to take action, as is already happening. And, even smaller firms would not be able to resist raising wages in such a climate, because, otherwise, they would simply lose workers to other much higher paying employers.

In such conditions of generalised strike action, including in that action demands for higher pensions and benefits, for a much higher Minimum Wage, becomes simply a logical extension of that class wide action, in away that consumerist campaigns for boycotts, payments strikes and so on never can. The very name of Anti-Capitalist Resistance, of course, gives the clue to its petty-bourgeois nature, whose policies are based on that kind of reactionary, Sismondist approach of antagonism to large-scale capital, and attempts to constrain it within limits of things such as price controls etc.

After all, what would “Enough Is Enough” say in response to households not being able to pay for their weekly food bill? Don't pay at the check-out? At least, in the 19th century, the Chartists, here, in North Staffordshire, responded to such situations by marching en masse, in collective class action, down to the canal wharves, and liberating supplies from the canal boats transporting goods to wholesalers. But, the real power of workers resides in the workplace itself, at the point of production. It is there that we can act collectively, not only to demand the higher wages required to cover higher prices, but from where, when undertaken on a class wide basis, can force capital as a whole to act, via its state, to provide the required class wide increases in benefits etc.

But, more important than that, even these actions can only be effective at certain times, like those now, where labour is relatively scarce. At other times, workers do not have the leverage to win higher wages etc., no matter how militant their action. Its hard to demand higher wages, when the employer is laying you off, and a dozen unemployed workers are waiting to take your job. So, all of these immediate actions are only themselves partial solutions within capitalism. The real solution, as Marx sets out in Value, Price and Profit, is to replace capitalism, and the wages system along with it. But, it is, again, in the workplace where that lesson is learned, and where the potential to implement it arises.

It is, after all, workers who already run capitalism. We do not need capitalists, just as when capitalist farmers arose, there was no need for landlords any longer. Its not just workers who run capitalism by producing all of the goods and services, it is workers, as managers, administrators, accountants, and so on, who organise and supervise all of that production, and the operation of financial systems too. It is workers, today, who do all of the jobs in that regard that the private capitalist used to do in the 18th and 19th century. What is more, the vast majority of industrial capital in the economy is socialised capital, not private capital. In other words, it is capital that is owned by the firm itself as a legal entity. The firm simply borrows money to operate, whether it borrows that money by issuing shares, or bonds, or borrowing from a bank, or by borrowing from its own workers, as happens with a workers cooperative. In all events, the company is its associated producers – the workers and managers – and it is they that collectively own it.  It is absurd that they do not control it, and yet shareholders who do not own it, do not play any active part in production do control it!

Explaining this reality to workers, is the first step in getting them to also demand control of their own collective property, rather than that control being in the hands, improperly, of people that do not own it – shareholders. A situation like that we have now, of millions of workers taking action to protect their living standards, is precisely the time, where, in the workplace, this lesson can be learned, so that the longer-term interests of workers can be advanced, by not just seeking higher wages, but also demanding industrial democracy, and control over their collective property.

These are the real solutions that should be advanced, but, in the meantime, there are also real human beings involved, and some of them cannot wait over this Winter.  It is always necessary to deal with the world as it is, rather than how we would like it to be.  I would love for us to have already created Socialism so that these problems did not exist, and where the power to deal with any problems resided directly in our own hands, but that is not the case, and is a longer-term goal.  More immediate solutions are also collective, class based solutions, and in the rash of strikes, they are emerging, but are not yet achieved.  Most immediately, then, individuals need to be able to survive.  So, let me give some practical advice, on survival tips, learned over several decades, from growing up in an old, damp, cold terraced house with only a single coal fire, to living in a cold damp flat, with only electric fires for heating, to some later experiences that only some might be able to utilise.

Individual choices are always limited, and the poorer you are, the more they are limited.  That means that for the very wort off, they really are going to be dependent on class based solutions providing them with relief.  But, there are always are choices, no matter how unpalatable, such as eating or heating, and in that choice, eating is always a priority, because its possible to live without heating, but not without eating.

When I was a kid, my parents house, as stated, was cold and damp. Ice would form on the inside of windows overnight in Winter. It was heated by a single coal fire in the living room, supplemented by inefficient electric fires, when required.  Obviously, we huddled in the living room around the coal fire, and used lots of blankets and Eider Downs (in the days before duvets) on the bed, along with hot water bottles. If you use a hot water bottle, make sure you wrap it in something so as not to get burned. That kind of limited, but immediate, heat can be useful to keep you warm, rather than needing to warm an entire room. Later we were able to buy electric blankets, which were a more effective means of achieving that objective.

Similarly, we bathed in an old zinc bath in front of the fire, once a week on a Sunday night.  The bath was filled with buckets of hot water heated in an old boiler used also for washing clothes in the dolly tub.  the bath was topped up with kettles of hot water, and all four of us in the family shared the same bath water.  In the 1970's drought, people were also encouraged to share baths to save water.  In fact, during lockdowns, my shower wasn't working properly, and isolating I decided not to have a plumber come and fix it, so for the last two years, instead of showering or bathing, I have managed perfectly well with having an all over wash with water from the basin, using a face cloth, which saves both in water usage, and in the cost of heating a much smaller volume of water required.

Similarly, the first year my wife and I lived in our flat, it was so cold and damp that she ended up getting pneumonia and a collapsed lung. We only had electric fires. But, we found that, again, a sensible solution was to move into just one room, rather than needing to heat a bedroom. That way, it could be heated, and the heat retained in it. In both cases, using home made draught excluders from stuffed tights and so on, curtains hung over doorways etc., made a big difference in keeping out cold draughts. Also, if you need quick heat to warm up, a fan heater seems to do the job, whereas, an oil filled radiator, can retain heat more effectively. That is useful if you do need to use another room like a bathroom for short period, to shower.  Use of high tog duvets to wrap in whilst sitting, also prevents heat loss, and a hat, even in doors stops a lot of heat loss through your head.

Various people have talked about using public buildings for the retired and unemployed, during the day time, as they are heated, and avoid needing to heat your own home. I'm not convinced. Firstly, when you come back home, you then have to heat it from stone cold, and you have yourself got cold from being out in it. Then, for the elderly, there is the risk of accidents in bad weather. If you can get together with others to share accommodation, and so heating costs, that is preferable, as well as encouraging solidarity and companionship.

But, lots of people are not in such absolutely dire straits as that.  I see lots of people walking around engrossed in their latest iPhone, and so on.  I was amazed when someone told me that they had paid £800 for one, and yet such things appear ubiquitous.  I don't even have a mobile phone of any kind.  If its a choice not of eating or heating but smart phone or heating, I know which I would choose, which makes some of the talk about the additional costs somewhat hypocritical.  Again, when I hear lots of people talking about going out to eat or to the pub, an average amount spent, per person, per night seems to be around £50.  Even just once a  week that is £2,500 a year, which would cover most of the increase in energy costs.

Now, I am not at all saying that people should not be able to have smart phones, or be able to go out.  Obviously they should, and preferably much, much more, and under Socialism that would be the case, but dealing with current reality, and not some future condition, its necessary to deal with real choices, here and now.  The working-class is not homogeneous, and the position of working-class households in terms of incomes and savings differs considerably, even if negligibly compared to the position of the bourgeoisie.  We have to try to address the different conditions of all workers.

When we were working, and our kids were young teens, we found that they had gone a bit beyond more toys and stuff. We started, saving up holidays to add to the annual Xmas break, so as to have enough for at least a two-week and sometimes longer holiday in The Canaries. At that time, before the Internet, we used Ceefax, to find very cheap last minute deals. In Xmas 1999, we managed to book a 2 week holiday for the four of us, with two studio apartments, for just £600, and we have the video of the Millennium fireworks display from the top of a hill in Gran Canaria to prove it.

That might not seem like a solution for all, and it clearly isn't.  It might even seem frivolous compared to starting this post talking about an inability to pay for heating and other basic items, but I have included it for a specific reason.  Given the extent to which energy prices are rising, when you consider your saving on energy, saving on what you would have spent on Xmas, and what you might have spent for a holiday at another time of year, the figures begin to stack up, and getting some sunshine in the dark days of Winter provides huge health benefits.  Again, obviously, there are lots of people who cannot afford holidays at any time of year, just as some can't afford smart phones, or going to the pub, so this does not apply to them, but the reason I have included it, is there is a tendency on the Left, especially amongst catastrophists, to talk as though the entire working-class is comprised of paupers, and semi-paupers, which it isn't.

I used to speak to lots of old retired miners, when I used to go to the council gym and sauna, who went away to Benidorm for several weeks, on pensioners breaks over the Winter. Some for as long as 3 months.  These were not affluent people at all, most of them living on the old Miners Estate.  Its reported that energy bills could go to over £6,000 a year, and most of that is going to be for energy used over the Winter months, mainly January and February. If you are going to be spending even £3,000 on energy to stay in cold, dreary conditions in Britain, why not, instead, put that £3,000 towards a long stay holiday in the Canaries, or the Costa Blanca? You can book 28 nights in Costa Blanca, in January, half-board, now, for as little as £600 per person, in Portugal for less than that. There are reports that, already, an increasing number of pensioners are choosing this option, to escape the misery of Brexit Britain over the Winter, even if some of them might have voted to impose that misery in the first place!

Clearly, those in the direst of straits are not going to be able to do that, which is why I began by talking about the general class actions required, to raise wages, pensions and benefits.  In that respect, it would be useful if Starmer and his reactionary Blue Labour, would actually get out on picket lines and support striking workers rather than sacking Labour MP's for having done so.  But, even with this energy crisis, its only a minority in such severe dire straits, and as socialists we should speak to all workers, rather than only talking as if the condition of the most deprived is typical to all, otherwise we alienate the majority of workers.

In Marx's day there was a growing absolute number of paupers, whose ranks grew whenever unemployment struck, but they were not typical of the working-class itself, indeed, they formed a relatively shrinking proportion of it, and Marx and Engels never based their opinions or their politics on them.  They sympathised with their plight, but, in fact, they saw them as forming the ranks of those that often made up the dangerous class, used against the organised workers.  Marx and Engels, always framed their politics and vision, not on them, but on the more advanced sections of workers, the more educated, skilled and organised.  Indeed, as Engels describes in his History of the Communist League, its members were not only these better educated, skilled workers, but were themselves largely petty-bourgeois, self employed artisans.  It was this latter fact of their relationship to the means of production, rather than them being more affluent, better educated workers that was their limitation, Engels explains.

"On the one hand, the exploiters of these artisans was a small master; on the other hand, they all hoped ultimately to become small masters themselves. In addition, a mass of inherited guild notions still clung to the German artisan at that time. The greatest honour is due to them, in that they, who were themselves not yet full proletarians but only an appendage of the petty bourgeoisie, an appendage which was passing into the modern proletariat and which did not yet stand in direct opposition to the bourgeoisie, that is, to big capital — in that these artisans were capable of instinctively anticipating their future development and of constituting themselves, even if not yet with full consciousness, the party of the proletariat. But it was also inevitable that their old handicraft prejudices should be a stumbling block to them at every moment, whenever it was a question of criticizing existing society in detail, that is, of investigating economic facts."

(History of The Communist League)

Finally, there is the question of what to do about tariffs. Personally, the rise in prices has not affected me, yet. For the last two years, I had a fixed price tariff that was well below where the price cap came out at, and it only ran out a couple of months ago, so, with my heating now off until the Winter, my energy usage is minimal. But, I've decided not to go for another fixed price tariff. For one thing, those offered were way above the current variable rate. As I might well take advantage of the ending of lockdowns, and having been fully vaccinated, to go away for several weeks to the sun, I should escape the heavy energy usage period.

Moreover, I expect that the EU will end up having to drop its current energy boycott against Russia, so that cheap gas will start to flow again, and prices will crash. For one thing, I expect that Russia is now going to entrench its positions in Donbas, and Southern Ukraine, leading to some form of agreement being reached to end the fighting. With any such pretext, Europe will be keen to get that gas flowing, to open Nordstream 2, and so on, in which case, gas prices could fall by around 80-90%, at which point, you certainly would not want to be tied into a fixed rate tariff determined by today's prices.