More and more leaks and side-channels from the pump of plutocracy are becoming visible. Tories are falling out among themselves. Dominic Cummings has denounced Boris Johnson’s behaviour as “mad and totally unethical”. 50% of those polled say there is a “culture of sleaze” in the government.
Socialists work to switch off the pump as well as fixing the leaks.
The core process of capitalist plutocracy is the transaction in which, though economic compulsion, we sell our labour-power to a capitalist, endowed with riches and control of the means of production. They pay out as meagre a “living wage” as they can get away with (or, sometimes, not even that). In return they gain control over all our collective creativity and ability to produce, and of all the embedded skills and technologies generated by previous labour.
They “consume” the “commodity” they’ve bought, labour-power. They put us to work, commanding, bullying, speeding up, cutting corners, to extract the maximum of labour which adds new value. The value added exceeds the price originally paid for labour-power: in today’s capitalist economy, typically, perhaps, it is three times as much.
The battle for wealth
The excess value pumped out is the font from which profits, rents, interest, dividends, and high pay-outs for managers and “consultants”, are drawn. In modern capitalism we also claw some of that value back, via state spending on public services. Within those, however, the same norms apply: squeezing down the wages for the workers producing the services, squeezing up the pressure on them at work, and extracting the maximum for top managers.
As Karl Marx put it: “The workers cannot become rich in this exchange, since, in exchange for their labour capacity as a fixed, available magnitude, they surrender its creative power, like Esau his birthright for a mess of pottage. Rather, they necessarily impoverish themselves, because the creative power of their labour establishes itself as the power of capital, as an alien power confronting them”.
As that capitalist core process pumps out plutocratic wealth, there is a continuous competitive battle between managers, investors, hangers-on, and others to see who can grab most from the flow. In modern capitalism, and probably even more in neoliberal capitalism with all its contracting-out, and thus its extra multitude of government contracts to draw juice from, a big part of the battle is for favours and contracts from government. The battle becomes an industry in itself.
In the USA, the industry of lobbying the federal government employs about 100,000 people and runs on a scale of about $9 billion a year. Each of the 500-odd members of Congress has an average of 200 lobby-industry people on their case, and an average of $18 million a year spent on lobbying them.
In Britain, a book published in 2014 estimated the industry of lobbying central government at £2 billion a year, which is an average of £3 million a year per individual MP.
Rules and regulations
The rich have some collective interest in establishing rules for that lobbying, and making it more predictable and orderly. The capitalists who didn’t have personal connections with MPs or ministers to get them in the “VIP lane” for PPE contracts; the ventilator-manufacturers who did not, like James Dyson, have Boris Johnson’s personal phone number through which to seek tax breaks; the contractors who hoped to get some of the Test and Trace billions, but whose bosses didn’t have the links with top Tories through shared time at university or other connections... all those want some rules.
For the working class, too, more openness and regulation is preferable. Better a process that ensures that a firm with a government contract at least does the job halfway properly, at something like the going rate, than one under which they do a scrappy job with ill-paid workers while pocketing huge payouts. Our central battle is to switch off the pump of plutocracy, and reorganise economic efforts with democracy and equality, rather than to help the regulators at the wealth-spouting end of the pump.
Probably the biggest effort ever in a capitalist country to regulate the leaks and diversions of wealth-spouting was that of the “Progressive Era” in the USA, between the late 19th century and World War 1. It generated two sizeable but ephemeral new parties, the “Progressive Parties” of 1912 and 1924, as splits from the Republicans. “Progressives” in those days were mostly concentrated in the Republicans, and much of their drive was against Democrat party-machines controlling city governments.
It pushed through many reforms, some useful, some ambiguous, some ineffectual, some counterproductive.
The USA today shows the limits of that sort of capitalist clean-up drive. After the crash of 2008, the outgoing chief economist of the International Monetary Fund (IMF) commented that connections like the “flow of individuals between Wall Street and Washington”, the “revolving door” between government positions, lobbying jobs, and high-finance posts, meant that “the finance industry has effectively captured [the USA’s] government”.
Wealth-siphoning is rife under capitalism even in completely legal forms. The pandemic and lockdowns have messed up the measures on which many top bosses had hoped to ensure ever-expanding bonuses. Many of them have simply moved the goalposts and got their “remuneration committees” to redefine the criteria so they still get bonuses. Some fund managers are cross. So far they have won a 40% shareholder vote against Foxton estate agents’ payment of a bonus to its chief executive for “doing well” in a year when the firm got almost £7 million in government bail-out just to keep going. Their alternative is to have the money paid out in dividends instead, or reinvested for future profits.
Switching off the pump
Socialist measures can get to the root of it.
• Bring operations in-house, where core workers and unions can see how they are done and on what conditions, rather than contracting them out.
• Follow that through to bring all major industry under public ownership and workers’ and democratic control.
• Replace high-paid bosses and officials by elected managers, operating on workers’ wages and with accountability to the workforce and the public.
• Opening the books: freedom of information in big firms and in government.
• Workers’ inquiries, drawing on expert scrutiny at industry and firm level, putting it together with investigation and discussion by workers at workshop and office level, making the information into the guiding light of an organised labour movement pushing for workers’ control at all levels.
Switch off the pump of plutocracy! Replace it by democracy which guides economic life by social priorities, and not by the rule of profit!