Replace the rule of profit with economic democracy

Submitted by Matthew on 14 September, 2011 - 12:08

At the TUC Congress on 12-14 September, unions backed a demonstration at the Tory party conference in Manchester on 2 October and announced plans for a huge strike by many public-sector unions against pension cuts in November.

TUC general secretary Brendan Barber said that “out-of-control traders and speculators razed our economy to the ground... The less you had to do with causing the crash, the bigger the price you are having to pay”.

In view of “the collapse of the economic model that politicians and policymakers have backed since the 1980s...”, “the task is to build a new economy that delivers for all... an economic alternative”.

What does the TUC propose as a “new economy” and an “economic alternative”?

The slogans for the 2 October demonstration are “a Robin Hood tax on the banks” and “closing tax loopholes”.

That’s a move towards the essential and simple demand to tax the rich — people like the richest thousand in Britain, who according to the Sunday Times have total wealth of £400 billion.

The cuts of the Coalition government, drastic in their effects, are small by comparison: £18 billion from benefits and £16 billion from education and other local services, over five years.

The Robin Hood tax and closing tax loopholes would solve the problems?

No. The Robin Hood (or Tobin) tax is a small levy on financial-market transactions. It stops well short of what we need: a clear assertion that the wealth of the upper classes comes from them annexing the products of the labour of the majority, and that the working-class majority can and should re-annex that wealth for social purposes.

We need a big tax on wealth, or property, or high incomes?

And not just that. There were high rates of tax (up to 98%) on high incomes in Britain from World War Two until Thatcher took office in 1979.

And yet exploitation in the workplace remained. Inequality in society remained. The rule of profit remained.

Economic life was still organised to yield the biggest possible profits and revenues, as fast as possible, to the wealthy minority who owned and ran big business.

That organisation of economic life still generated spirals of speculation and swindling, and subsequent economic crashes, as in 1974-5.

So, “replace the rule of profit by economic democracy”? What does “economic democracy” mean?

• Social ownership and democratic control of the big enterprises. In the first place of the big banks and financial institutions which, through their control of credit, control the basic directions of economic life.

• Investment decisions made for social provision, not for the quickest and biggest profit of the exploiting few.

• The main directions of economic life being decided by democratic planning, not by competitive battles for profit among the wealthy few, in which each seeks only maximum competitive advantage, and the social result is a mere statistical outcome.

• Everyone having the right to a decent, useful job with reasonable hours, pay, and conditions, because in a socially-planned economy it can never make sense to leave people’s useful talents and energies idle, or to use them in trades which serve only the competition of one capitalist against another.

• Democratic control in the workplace: election and accountability of managers.

• Equality: once fully developed, economic democracy means “from each according to her or his ability, to each according to her or his need”. Immediately, income inequalities could be reduced to a narrow range, with everyone getting enough for a comfortable life, and no-one getting more than a skilled worker.

When the Government nationalised banks in 2007-8, it bailed them out but left the same sort of people in charge, running the banks on the same principles. It was “socialism for the rich”, or “socialisation of losses and privatisation of gains”. Economic democracy is socialism for the working-class majority. It is much ampler than pallid vote-every-five-years parliamentary “political” democracy.

What are the economic prospects?

The Institute of Fiscal Studies, a conservative think-tank, has recently estimated that the Coalition government’s cuts will generate an average 10% cut in income for the majority.

Within months or a few years — no-one knows when — the eurozone trouble could escalate into a full-scale crash, which might lead to large parts of the global financial system seizing up as they did in 2008.

Even if nothing that spectacular happens, working-class people are generally still in the 2008 crisis, suffering job losses and cuts in services and in real pay.

The rich have seen some upturn since 2009. The less well-off haven’t. In capitalist slumps and depressions, usually inequality narrows a bit because the rich fall further than the poor, but this time inequality is increasing fast.

Even the upturn for the rich is stalling. Production figures are sagging in many countries.

Even in China, where after 2008 the largest fixed-capital investment boom in world history, organised by the government, offset the crisis, production is slowing, and yet the government is still looking for means to hose down the rapid price inflation which has come as a legacy of the investment drive.

If the unions are going to push for an “economic alternative”, won’t they have to assert themselves politically, and demand Labour commit itself to “alternative” policies?

Yes. The unions should work out serious policies for economic democracy, and use their clout in the Labour Party to commit Labour to those policies.

The aim should be a workers’ government — a government based on the labour movement and accountable to it, and serving the interests of the working-class majority as the Coalition government serves those of the rich.

By organising for a workers’ government, we can reorganise and revitalise the rank and file of the labour movement, and transform the movement into one capable of achieving that aim.

Ah. Push Ed Miliband to the left?

More than that!

Ed Miliband made a wretched speech at the TUC. He said: “I believe it was a mistake for strikes to happen [on 30 June]. I continue to believe that”.

He called for “co-operation, not conflict, in the workplace”. When challenged from the floor of the TUC congress, he said he “could not” promise to reverse the change in pensions being uprated by CPI rather than RPI because he “didn’t know where the money would come from”.

He said: “we have to challenge many of the assumptions on which economic policy has been based for a generation”. Like Barber, he called for a “new economy”. Yet he proposed ideas which are waterlogged with exactly the priority-of-profit “assumptions on which economic policy has been based for a generation”.

He said: “Government has to work in partnership with business” and “make sure good regulation lets companies win new markets”. “A new economy will mean... rejecting the view that employee representation must mean confrontation not cooperation”.

How should we organise now for the strike in November?

• Call on the unions which haven’t yet balloted to start balloting now, and all the unions to name an exact date.

• Organise cross-union committees in every city. Plan for meetings of strikers on the strike day, with room for motions, amendments, and debate, not just rallies. In every union, organise democratic control of the campaign by the rank and file.

• Start discussion now on plans for action after the November strike. One day will not be enough. On the strike day, workers should not be told just to go home and wait for word from the leaders. We will win only by the Government being convinced that the labour movement has a well-understood plan for action which we will continue longer than the Government is able to stay stubborn.

• Organise strike-fund levies. Discuss organising for rolling and selective strikes (funded by the levies) as well as the one-day strikes.

• Make the pensions dispute into a general campaign for “Fair Pensions For All”. On 12 September the Government announced that it will probably raise the state pension age to 67 ten years earlier than previously planned, in 2026 rather than 2036. Develop and generalise the fight on the NHS, on benefit cuts, on local services, etc., and link it with the pensions battle.

• Break off scheme-by-scheme negotiations. Talks should be with the Government about the whole framework, not attempts to wheedle a slightly-less-bad deal for one group or another within an unchanged framework.

Won’t the Government try to bring in new laws against strikes, to add to the strangling legislation which Thatcher put on the books and Blair and Brown kept in force?

At the TUC Paul Kenny of the GMB called for “the biggest campaign of civil disobedience” that the Government “can ever imagine” against threatened new anti-strike laws. “If going to prison is the price to pay for standing up to bad laws, then so be it”.

Len McCluskey of Unite called on trade unionists not to “meekly accept the law as it stands” and to “plan for anti-union law avoidance”. “Class law should not paralyse our movement”. He said we should not let “the feral ruling class get away scot free with their crimes”.

He demanded that “the next Labour government... recognise the value to our society of free trade unionism and legislate accordingly”.

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