Take the wealth from the billionaires

Labour’s current policy, as outlined by the National Policy Forum, is hobbled by refusing to tax the rich, beyond closing a few loopholes. A small wealth tax, or even making the tax rate on “unearned” income equal to that on “earned” income, could raise more than enough to fix up the NHS. The Labour leaders’ commitments to retain Tory tax policies, with only marginal tweaks, to stick to arbitrary Tory targets for cutting government debt, and to keep military spending high, mean continued ruination.

Inequality of wealth has risen recently in many countries, more than inequality of income. Income flowing from wealth looms larger and larger.

Wealthy people get income from the shares and bonds they own because capitalist companies make profits, distributed through dividends, share buybacks, or just increased share prices. All that comes from the surplus value which accrues to capital because labour-power is sold as a fixed quantity — at a price around a “living wage” which enables the working class to be able to work again the next month or the next week — but it is “consumed” by the capitalist who buys it as a quantity to be varied by workplace pressure.

By pushing workers to work harder and faster, by closing up the “gaps” in the working day, and sometimes just by imposing long work-weeks, the capitalist stretches the new value generated by labour (i.e. by capital “consuming” labour-power).

In today’s capitalist society, sizeable income is also extracted from workers through financial channels, by extracting interest on mortgages and other debt from workers.

The incomes of the wealthy are not “wages of management”. Capitalists pay managers above the rate for ordinary workers because they want to buy loyalty, but generally people who actually manage production are modestly paid. The big pay-outs go to top bosses who know little about production. CEO “wages” at a level of millions or tens of millions a year are not really wages, but pay-outs from surplus value.

The incomes of the wealthy are not compensation for “risk”. The capitalist system does not reward “risk” in general. Insecure and dangerous jobs are not better paid than more secure jobs. Anyway, a rich person with a diversified “portfolio” of shares, bonds, property, etc. runs lower risks than a worker.

Nor does capitalism reward “abstinence” or “time preference” in general. The capitalist class is not rewarded for “abstaining” from doing what it couldn’t do even if it wanted — instantly eating up all its wealth. Anyway, the worker who waits to the end of the month for their pay “abstains” more.

The wealth of the wealthy is not a contribution to the common productive power made by rich people out of public-spiritedness from stocks built up through their own efforts. It is the accumulated result of decades or centuries of workers being paid less for our labour-power than the new value added by our labour.

Socialists want the large concentrations of wealth to be taken into public ownership and under democratic control. We favour compensation (state savings bonds or the like) for the middle-class people and better-off workers who own a few shares, and having small businesses continue with strict rules to protect their workers and encouragement for them to become cooperatives.

Public ownership and control of major productive wealth can end the spiral which generates wealth, luxury, and power at one pole, and poverty, overwork, insecurity, and ruined public services on the other.