09 September 2016

Capital as a Social Power

"Capital is a collective product, and only by the united action of many members, nay, in the last resort, only by the united action of all members of society, can it be set in motion". The Communist Manifesto. 1848.
This comes from the justification for the abolition of private property in the Manifesto. I found I was shocked by the bald statement: "the theory of the Communists may be summed up in the single sentence: Abolition of private property".

What Marx & Engels are getting at, it seems, is that without the concerted effort of workers, capital would never increase. One person working alone can seldom produce much in the way of surplus and so their capital grows slowly if at all. Capitalists exploit the labour of many workers to make their own capital grow, while the capital of the workers themselves does not grow. In many cases it shrinks. This is especially so in the developed world post-2008 financial crisis. We've seen wages falling, conditions of employment being undermined, at the same time as corporate profits rise, shareholder dividends rise, and CEO salaries rise. And yet those same people whose capital continues to grow while the capital of the workers shrink, refuse to pay their taxes. And workers are further enticed into debt slavery to the banks  - UK household debt is 150% of income and rising.

Personally I don't think the abolition of private property is a viable solution. Where it has been tried it is simply replaced by other forms of tyranny and exploitation that are at least as bad as, and have frequently been worse than, capitalism.

One potential model is the John Lewis Group one of giving employees shares in the company. This allows workers a greater share in the profits, when there are profits. Of course this assumes that profits are declared rather than hidden. It would not work in the multinationals who routinely hide profits in order to avoid paying taxes (e.g. Apple. Amazon, Starbucks, Google, etc.)

At the very least we need to acknowledge that if someone has got rich, it is by taking more than their fair share of the profits or by inheriting land (and all that land implies in the production of wealth). No one person working alone can become a billionaire. For every billionaire there are thousands of hard-working people, who just get by. The products of their labour are taken and mostly  redistributed to the rich, who then hoard it or indulge in conspicuous consumption. This is exploitation. In a better world everyone would benefit from their labour. If employers paid their employees the full value of their labour, there would be no billionaires.

No one who works full-time should struggle to pay their rent, food, and utility bills. At present many such people in the UK require "in work benefits" to get by. And this is insane, because it means that tax payers are subsidising supposedly free-market capitalists to keep prices above what is affordable. Landlords, who are largely the same as property developers, can partly do this by deliberately ensuring that the demand for housing outstrips the supply and claiming that high rents are simply a matter "supply and demand" as though it is nothing to do with them, but is just the market operating freely. Meanwhile the world's kleptocrats and drug-lords are laundering money by buying up property in Mayfair and Parklane and forcing property prices to rise at ten times the inflation rate, while wages continue to fall. And the Southern Rail company provides an appalling service, but still receives £25 million in government subsidies and declares a profit of £100 million which goes to private sector shareholders who probably don't pay tax in the UK! Why are we subsidising foreign shareholders with UK taxes while getting lousy service? Why are we not investing in the local economy?

Capitalists say that they deserve the lion's share of the profit that labour generates because they are risking their capital. There is something to this. Risking one's capital ought to bring rewards, if only because investment creates jobs for workers. The relationship is in fact symbiotic. The capitalist who takes all the profits and leaves nothing for workers destroys their own capital because the workers are soon unable to work. The only way for capital to produce profit, is through the application of labour by many workers. Or as the Manifesto says, through the whole community acting together in a concerted way. If there is profit then, necessarily,  the community should benefit.

Unfortunately it has been the policy of the merchantilist thinkers, who have shaped the industrialised world's economic policies for six centuries, to try to ensure that wages did not rise above subsistence level. This was supposed to ensure that workers did not succumb to the laziness and moral turpitude that was assumed to be their natural condition. That it happened to make capitalists phenomenally wealthy was just taken as further proof of their moral superiority. That workers are poor is not seen as a result of centuries of deliberately pursued policies, but instead of the moral inferiority of the workers. The double standard is hardly even remarked on in the mainstream. Instead of arguing over whether workers deserve to be adequately compensated by employers, the debate is over whether poorly paid workers deserve government handouts.

The whole system is fucked up.

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