Andrew Northall (Letters, Solidarity 438) asks important questions about taxing the ultra-rich and the merely well-off. No socialist strategy, I believe, can escape the risk of a “counter-revolutionary reaction” from the rich.
That is not just because of our challenge to their income. It is because of our challenge to their wealth and their power. No socialism is possible without taking the top 1% down a peg, and they will resist that ferociously. At certain times they will shrug and pay more tax.
Labour’s plans are modest. In 1944-5 (under a Tory-led government), Britain had a top income-tax rate of 98%, which meant that almost no one was paid a rate in the top tax brackets. The top rate remained around 90% or higher for a long time. It was 96.25% in the late 1960s. Only, the ultra-rich still held power: ownership, control, and a thousand ways to enjoy luxuries and yet escape tax.
If we look beyond the Labour manifesto, socialism means challenging that power of the ultra-rich. There is no way to do that without also organising the working-class numbers and determination to quell (as Engels put it) a slaveholders’ rebellion. And yet socialism is not, as some put it during the Occupy movement, a matter of “99%” against the top 1% alone.
Marx wrote of “the constantly growing number of the middle classes, those who stand between the worker on the one hand and the capitalist and landlord on the other”. He didn’t mean school teachers or social workers, but the army of associates of, managers for, and assistants to the capitalist class who pocket five-figure salaries but do not own any significant portion of productive wealth. “The middle classes... are a burden weighing heavily on the working base and increase the social security and power of the upper ten thousand”.
More income, in total, goes to that relatively large number of managers, officials, lawyers, top bank workers, head teachers, etc. than to the few at the very top. Kropotkin tells of the banker Amschel Rothschild, in the 1848 revolution, announcing that his fortune amounted to five shillings each if divided between all. He would give anyone who asked their five shillings. “Three or four passers-by asked for their five shillings, which he disbursed with a sardonic smile”. The rest were bemused. The banker kept his fortune.
Moreover, if a political overturn were to evict the top 1%, but leave the remainder of the top 10% or so with their current advantages, then before long the social hierarchy would be restored, only with a new 1% at the top. The well-off-but-not-plutocrats enjoy privilege as well as comforts. Redistributing from them to the majority means taking away their autocratic powers as managers or officials, the private schools and hospitals to which they pay fees, the super-luxury hotels and shops and transport where they spend, their retinues of domestic servants; and dividing up some of their palaces to create new homes. Officials and managers in a socialist society need to be on workers’ wages.
In the Bolshevik years after the Russian revolution of 1917 (before the Stalinist counter-revolution), the “party maximum” rule prevented any party member, however high her or his official post, getting more than a skilled worker. We need to level down ultra-”wages”, not out of “envy”, but to overturn hierarchy. It does not mean pauperising the well-off. We can realistically hope to win the support or acquiescence to socialism of a large number of them. But some will resist as ruthlessly as the plutocrats.
As Marx pointed out, the Church of England, though not a capitalist firm, “will more readily pardon an attack on 38 of its 39 articles than on one-thirty-ninth of its income”. The Church’s “director of investments” pockets over £400,000 a year.