Picketty, Rifkin and Sassen

In 2010 Professor Greg Philo, Research Director and one of the leading lights of the Glasgow Media Group asked why – amidst all the discussion of the deficit – there has been so little discussion in the media of how much wealth we had in Britain.  The truth, of course, was that we were the sixth richest nation on earth in 2010 with total personal wealth of £9,000bn. As Philo pointed out, this sum was comparable at the time with the national debt.

Naturally, wealth is overwhelmingly concentrated at the top. The richest 10% of Britons own £4,000bn, an average of £4m for each of the richest households.  The poorest half own less than 10% of Britain’s wealth between them.

Most of the wealth owned by the richest 10% is held in property and pensions that would be relatively easily taxable.  So Philo proposed a one-off tax on the very wealthy to wipe out the national debt at the time.  A simple 20% would have done the trick.  It would have raised £800bn and since much of the deficit was made up of interest on the national debt it would have dealt with that too.

Picketty's masterpiece 'Capital in the 21st Century' (published in English - March 2014) makes the same proposal - on a global scale - coupled with other drastic reforms. But his argument is based on a profound study of the fundamental characteristics of capitalist development over the last two and half centuries. The heart of Picketty's work is a vast and meticulous empirical, data driven study of wealth in capitalist countries. His conclusion is that 21st century capitalism's patterns of accumulation of wealth have fallen back into much earlier conditions where wealth accumulation has become greater than the total sum of societies' productive value. This is an inherently unstable and potentially explosive condition.

He points out (the evidence is unassailable) that the 20th century showed the reverse of this earlier trend which he accounts for by the World Wars etc. Wealth was much more evenly distributed as a result in the 20th century than it was in the 19th or the 21st.

Picketty rejects Marx's claims in the Communist Manifesto that capitalism's internal contradictions will bring its downfall. And he associates the narrowing of wealth differentials in the 20th century with the rise of Social Democracy. I think that both these ideas are wrong. I think it can be shown that Marx's views on the overthrow of capitalism went through an evolution from the Communist Manifesto onwards; that wealth differentials in the 21st Century have much more to do with the revolutions in Russia and China and the wars designed to defeat them then Picketty suggests; that Marx's concept of the changing ratios within the organic composition of Capital itself form a structural part of Picketty's observations. (More on this later.) Nevertheless, his insight and the spotlight now focussed onto the evolution of wealth in capitalist society has literally overturned the debate in world economics.

Rifkin, who the BBC calls an 'Advisor to the EU and other Heads of States' and who is President of the Foundation on Economic Trends' has also written an interesting book. The Zero Cost Society; The Internet of Things; The Collaborative Commons and the eclipse of capitalism' is a new utopian sketch of post capitalist non profit orientated economics, based on recent technological advance. Rifkin thinks that the 25% of Germans who now produce their own electricity are the harbingers of a future where more and more people and more and more types of production and general economic activity, will fall out of the market. Rifkin seems to imagine that this process is automatic, that the 'classless' neutrality of technology will push open all of the closed doors. He clearly has great faith in the urban middle classes!

But despite Rifkin's inability to grasp the social facts of life, his suggestions and examples of collective use-based productive and economic activity by the 'commons' - based on the imaginative use of collectively available technology, offers more than a hint on how to overcome some of the negative experiences of 'revolutionary' central planning and of state nationalisations that weigh so heavily on the 150 year history of the anti-capitalist struggle. We can see in this work the beginnings of the conditions where the withering state is left simply to manage the 'adminstration of things.'

Saskia Sassen is a professor of sociology at Columbia. What she has noticed in 'Expulsions, Brutality and Complexity in the Global Economy' is not so much the voluntary and beneficent detachment of people from the market, but rather how the new post welfare state, post Roosevelt conditions of the 21st century savagely cuts whole sections of society and the world loose from the capitalist mainstream, 'basket cases' as that charming patrician Douglas Herd once opined. Sassen's thesis of course connects back to Picketty's argument. What used to be called 'third world' conditions are now visible in the metropolitan centres of the most advanced countries (as wealth has also created its own enclaves amid impoverishment in less developed countries.) And what Sassen underlines is that the new demarcations are savagely policed. The people who are the victims of this process are of course the exact opposite of Rifkin's 'collaborative commons.' They are often literally fighting for their lives, often persecuted by religious and criminal warlords for their pains. Socialism or barbarism asked Rosa Luxembourg? It turns out that, among other things, Picketty's 1% will be remembered for pushing large parts of the world's population into concentration camp conditions.

Balls to Osborne (and vise versa.)

The Tories believe that they have shot Labour's fox because growth has restarted in the UK's economy. Osborne's austerity has delivered the goods. All Labour can say is that most of us have not seen any benefits yet. That's absolutely correct, and we won't see any benefit from austerity ever, just losses - but it does not stop many believing that the Tories got the economy right and Labour got it wrong.

Of course there is a lot of smoke and mirrors associated with the new growth in the UK. It's led by a property boom engineered for the purpose; the economy is still smaller than in 2007; Britain's debt is still the largest proportionately of all the advanced countries after 4 years of austerity etc., etc. Nevertheless, Labour's claim, that their policy of austerity lite would have achieved more growth and  sooner, sounds, well, like balls!

Why can't Balls fight Osborne on the economic programme of the Coalition as a whole? Why is he restricted to criticising poor wages and unfairness  - as though the problem is that we have had the wrong sort of austerity?

Balls (and Brown before him) were/are classic Keynesian's. But both men joined all the mainstream parties consensus on the need for an austerity policy as well. (For example Labour now insists it is tied to the Coalition cuts for the first two years of their next government and will place its own legal restraints on spending!) Nevertheless Brown and Balls thought that in practise they could amend the impact of cuts through vast cash flows to the banks and, via them, to the stock exchanges which would produce growth and extra taxes (quantitative easing). This was Labour's grand Keynesian idea. Labour's project of spending your way out of the crisis of 2008 would not be wasted unproductively on wages, on government works or on benefits (as Roosevelt had done in 1930s America.) No. Instead cash would be funnelled to big Capital in order to create private investment and enterprise. Government schemes would be 'outsourced' to stimulate the private sector. Banks would get wads of cash to use as loans (from which Banks would profit.) The government's access to wealth through printing money would be directed to those private enterprises, they argued, that could produce growth in the system.

But this is exactly what the Coalition government and the Bank of England have done. They have adopted Brown and Ball's policy wholesale. £350 Billion has been handed over so far. The result is that British business has never been so rich. Big British companies hold £75 Billion as reserves - not including the banks. The stock exchanges across the world have ballooned in value since 2008 - mainly due to the US version of the same policy. None of it produced much growth in the West. Big Capital is on a virtual investment strike in the UK for example. But QE did shore up the system in its crisis. Osborne has used Labour's main weapon of choice and, just as Labour also proposed, is using austerity to pay for it.

It was the austerity drive that all the main parties publicly stated they agreed with from the start. The Labour Keynesians and the Tory Chicago school lined up together on the need for austerity in principle. Austerity was, everybody said, one necessary means to pay our way out of the crisis and reinforce the system while growth might hopefully produce more tax in the future.

But what is austerity? It is seen and discussed as though it was simply some cuts to our 'welfare state' - albeit major surgery. That is the surface of the matter. Underneath the immediate blood letting, austerity amounts to a virtually unprecedented shift of wealth from the huge majority of those who have, or who have had, to work in order to live, to those who do not. This wealth has been shifted from a variety of sources, including what economists call the social wage; health, welfare, education etc. (The poor have little cash assets.) It has also been taken from wages and via non progressive taxation. The shift in wealth has been and continues to be spectacular. This is the essence of austerity.

Where are we today with this policy?

At the moment the national debt has declined from a £1 trillion to about £800 billion in the UK since 2008. Austerity has achieved this great success! And the remaining £800 Billion debt is why austerity has still got a long way to go. The paltry growth now heralded will make little impact on tax receipts and therefore on the debt. The debts of course are owned by finance organisations and by other nations. Behind these institutions stand the wealthiest 1% of the planet's population. They will have their 'loans' re payed (plus interest of course.) And austerity is the means by which we will pay them. The shift in wealth and assets away from the majority in this country to the super-rich is about a quarter of the way through. And that's the point that Balls won't/can't address.

According to a 2014 Oxfam report, the world's 85 richest people own as much as the bottom half of the population. According to a new survey by the Hurun Global Rich List, 56 £billionaires now live in Britain. Approximately half of the country's richest residents are of foreign origin, drawn here by 'the authorities' relaxed attitude to their tax and business affairs.' Among the new wealthy are Farhad Moshiri, an Iranian-British businessman who owns 15% of Arsenal Football Club, and Indonesian petrochemicals and textiles millionaire Sri Prakash Lohia, who spent an estimated £50 million restoring his London home. They appear alongside such established UK billionaires as Sir Philip Green, the retail tycoon, and property magnate the Duke of Westminster. The rich, as in many other fields, seem to have their own immigration policy.

And what could Mr Balls do to counter the Coalition and rally a population tired of politics and politicians and desperate for new answers? Centre his policy around a progressive wealth tax, designed to begin to roll back the enormous shift of wealth away from the majority to the super rich, and develop a plan for the re-foundation of banks and the finance industry on the basis of their legal requirement to serve the interests of the whole people.

What will he do? What's your guess?

Scottish Independence - a view from England.

It tells you something about the nature of mainstream politics in England that the last few days of domestic political news and comment have been dominated by the launch of UKIP's euro-election campaign. In England UKIP threaten the Tories from the right. But UKIP is a joke in Scotland. In fact the Scots have already dealt with the Tories for this generation. The Tories have been rolled back to fringe party status in Scotland - but from the left. Next September the Scots will take another step. They will decide whether or not to divide the British State. They are rather more interested in that. And so we all should be.

Naturally, debate about Scottish independence has favoured those considerations best designed to put both sides in the most practical and positive light possible. Although the debate in Scotland over independence is at a much higher level than those that surface in politics in England (witness the grotesque debates between Farage and Clegg over the EU compared with the recent Mitchell Library debate in Glasgow over independence - see UTube) the 'day to day' tends to triumph over the theoretical and bread and butter over grand ideas. All this is very much in the tradition of British, not to say Scottish political philosophy.

Another approach is rooted in a different tradition which argues that practical reality; the capacity to intervene in and to change the 'real', can only be accurately developed by coming to grips with the most profound abstractions. From this perspective summing up the political totality within which the question of Scottish independence lies, is an essential step towards the most effective 'concrete analysis of the concrete situation.'

Scotland is not a colonised nation. Self determination for oppressed nations, at its most general, implies the tasks of creation of independent political institutions, the removal of the grip of the Empire which dominates and in that violent breach with the Imperialist centres and system, the inevitable challenge to the capitalist system itself. This might be a long or a short road. History has decided that we cannot even predetermine the order of the emergence of these tasks, only that they all lie at some stage and in particular combinations in the path of every determined struggle for national self determination. Scotland on the other hand shares the legacy of Empire with the rest of Britain. All might agree that it is woefully politically unrepresented in Britain's political structures. But so is Northern England, and indeed the  whole of the working class of Britain. And even the most traditional supporters of Scottish independence do not promote reactionary claims to common cultures and languages. What then is the nature of Scotland's claim to independence, and what are the tasks that flow out from this claim?

Scotland is not an oppressed nation in the traditional, early 20th century sense. But it is a self realised, and a self-defined national community, partly in opposition to Westminster's political dominance. Most significantly, it has the ability to express itself as a distinct political entity in a context where a monopoly of political power in Britain over two long periods and now including the worst crisis in the system since the 1930s, has been completely at odds with its own outlook.12 years of Thatcher, the Iraq and Afghan wars the economic crisis and then the Coalition, have delivered a grand consensus across the entire mainstream of British politics. There are many in Britain, perhaps a majority, who are exclude, betrayed, despoiled and stunned to silence by this monument to privilege and tradition. But it is the Scots who have created a clear exit sign from this baroque decay of politics in Britain. The fight is on to use it.

A definitive break from Westminster has to imply the break up of the British state. If you need to decide your own tax policy, your own foreign policy, your own welfare policy then you need your own state apparatus to implement those policies. Breaking the British state will be the most radical act in Britain since the creation of the Welfare State.

Where does this lead? If a new political formation, at both the level of the government and at the level of the state is required to break the Westminster consensus on austerity, war and welfare then we have a political revolution, peacefully implemented and installed but nevertheless a significant and serious overturning of the dominant sectors of the British ruling class in favour of a more radical faction whose intention is to make alliances and common cause with what it sees as the more progressive elements in European capital. Political revolution is relatively common currency in many European countries, eg., France with the fall of De Gaul, Spain and Portugal with the collapse of dictatorship and colonial empire, and it rolls on today through the ruling elite's faction wars across parts of eastern Europe. Some of these political revolutions witnessed mass mobilisations and popular uprisings. But whatever form these developments took dramatic changes in economics and in politics ensued. These moments became beginnings not ends.

The Scottish exit sign from Westminster dominance is not an exit sign from the social system that created and which still needs Westminster. The City of London needs Westminster. The City is 20% of the British economy. Westminster owns 83% of the Royal Bank of Scotland. Major political leaders in England have made clear their intention to seek vengeance against Scottish voters if they dare to vote for independence. The question becomes what will be needed to carry through an independent policy on war, on welfare, on tax? Scottish people fighting for independence will not be able to simply vote away the weight of the City on their part of Britain's economy, or the weight of NATO on foreign policy, or the weight of the Capital strike on welfare. They will need to fashion a new contract with Capital, new types of banks, new international alliances.

People in England and Wales will not sit around. They will take sides in this new struggle. They will look to see where they might find their own exit signs.

Len McCluskey's 'warning' to Labour

On April 1 UNITE”S leader Len McLuskey made a speech to the Westminster Press Gallery. He offered some witty sound bites to the reporters  - attacking the ‘car boot sale’ that Britain had turned into because of the Coalition Government (and previous governments). He bemoaned the mistake of the TU movement not adopting the Bullock report’s ideas on industrial democracy in the late 1970s. (Trade unionists on company boards and reps in local managements.)


Most papers picked up McLuskey’s call for a radical manifesto from Labour going into the next General Election. He argued that without it, voters might stay with ‘the devil they know’ rather than opt for Labour's austerity light option. The Morning Star reminded its leaders of McLuskey’s warning that, in the event of a Labour defeat, unions would have to look again at their affiliation to Labour and consider a new party to represent the working class.

Is this a new radical turn by Britain’s most powerful trade unionist?

McLuskey told the lunch meeting that work was underway in the Labour leader's office to give the coming manifesto more ‘coherence and fizz.’  He was clearly referring to Jon Cruddas’s policy proposals – due out this summer. He was identifying the union with Cruddas’s policy push. McLuskey related his campaign inside Labour to the Worcester woman and Mondeo man who are targeted by pollsters, but asked, who was interested in ‘Wakefield woman or man on a bus?’ McCluskey also accepted that Alex Salmond's SNP and Nigel Farage's Ukip were both doing well at winning working-class and even potential leftwing votes in the absence of something better.

McLuskey’s comments sum up the main political pressures and counter pressures that are alive today in the active mainstream labour movement. They are pressures for a more radical manifesto by Labour to separate it from the austerity mongers; and the identification of that type of manifesto with the Cruddas project. All this is and was standard left trade union politics for more than half a century. The only new element is the growing fear that sections of the traditional working class vote are already lost for good to the Labour Party.

This then is McLuskey’s political battleground. Defeat in his chosen political battleground would obviously lead to some re-groupments by the union but it is doubtful that it would lead to new parties. It would not be absurd to believe that any re-groupments emerging out of defeat would be more and not less defensive even than the trade union left's current position. Defeats rarely nurture bold new initiatives. McLuskey warns of the prospect of a new workers party. The warning is the only positive part of the message. He is using its threat as greater leverage for what he thinks he might get from Mr Miliband today.

Breaking out of the present thoroughly routine and unhopeful political framework of the mainstream left requires a new political fact. If hundreds of thousands come out on the streets against austerity, if industrial action continues to roll, if austerity is partly defeated in many towns and cities as in Lewisham and Derby, then the picture will shift. Does Nigel Farage support mass action against austerity? That is the concrete question that hundreds of thousands might begin to ask. A new social base for radical politics could emerge. That would change the traditional arguments in the labour movement, both inside and outside the Labour Party and much wider in society.  

Nick & Nigel

Nigel Farage out opinion-polled the Deputy PM after both of their public debates about the EU.  Not a surprise. The BBC's political editor, ex Young-Tory Nick Robinson, thought it might be connected with the public's rather less enthusiastic view of Clegg since the halcyon days before the last election when he was the new boy on the bloc and had not stained his copybook. Admittedly there was something desperate about Clegg's appeals to 'today's Britain' that he, apparently, so loved. A country saddled amongst a long list of horrors, with the highest tuition fees in the western world. The one thing he promised that would not happen.

In fact Clegg was thoroughly defeated because he based his argument for his version of the future of Britain on the defense of a thoroughly disliked and defeated government.

The quality of mainstream political debate in Britain has clearly declined. Farage's main propositions were often incoherent, sometimes contradictory, always exaggerated but nobody believed Clegg at all. Farage confused the EU with the west's real war machine, NATO. He was 'appalled' by Britain being potentially dragged into wars by the EU. He mentioned bombing Libya and the saber rattling over Syria and the honey trap offered to the Ukraine. All of these (failed) initiatives were either led or underpinned by NATO. The US and EU's combined armed wing is NATO. Farage wants to identify 'good' western wars as NATO's wars - which he wants to be in and 'bad' western wars with the EU - which he doesn't. Similarly, he constantly berated British 'big business' in the same sentences as his attacks on the unpatriotic rich for selling out Britain's democracy and self-determination. Yet he rushed to the defense of the City of London as 'Britain's biggest employer' and which was 'threatened' by the Coalition's execrable sell out of the City’s rights when they supported (they did not) the EU’s wishes to limit the power of finance (not implemented).  The City of London nearly destroyed the British economy in 2008 (and large parts of the European economy too.) The City is a poisonous anathema to any sort of democratic control that the British people might really require to determine anything important about the future of their country.

In the event Farage's muddle of political and economic sloganeering did not matter. He was more popular than Clegg because Clegg was an exposed liar and fraud. And Farage sounded radical. He was with ‘the people’ against the Westminster class of politicians. He was with ‘the white British working class’ against the metropolitan elite with their immigrant nannies and gardeners. He denounced over-crowded schools, over-stretched health care and over loaded housing stock all tottering apparently under the weight of EU immigrants. What was left for Clegg in all this? He could only tell us that health ‘had been protected’, that schools ‘had been expanded’, that housing was ‘becoming more available under the Coalition government.’  Nobody believed that.

The hot heart of Farage’s saloon bar nonsense remains, of course, roaring racism. Immigrants are the reason why living standards have fallen, why hospitals and schools are stretched and why young people have no jobs.  His economics are a crude extension of Thatcher and Osborne’s attack on heath and welfare. And Clegg had no answer to that. Clegg is part of the Westminster consensus supporting austerity as the ‘solution’ to the problems that Farage wants to blame on immigrants.

Despite the limited appeal of the TV debates there are political signs of the times in all this. It’s true that Farage is an ego in a pint glass (and Clegg is a dead man walking) but if we consider one of the debates leading up to the formation of Ken Loach’s Left Unity last November – should Left Unity, some supporters asked, become the left’s version of UKIP – it is clear that Farage is presently occupying that space. His ‘radicalism’ is out of the textbook of early fascism.  His appeal (in terms of voters) is to the white working class, indeed all those that have abstained in the last elections and now UKIP potentially puts as much pressure on Labour as it puts on the Tories. Putting pressure from a saloon bar version of the left onto the Labour Party is now a seriously contested ground – albeit to paraphrase, that Farage’s radicalism is ‘the radicalism of fools.’

Second, Farage’s rush to adopt the colours of the City of London may be more strategic than it first appears. A bloc of huge capitalist interests, should the EU seek to make some inroads into the arrogant power of finance capital, encouraging the growth of UKIP as leverage against the EU and anybody sympathetic to corralling the bankers in Britain, is perfectly possible. This would be a friend indeed for dear Nigel and catapult him into the centre of politics.

Nick & Nigel

Nigel Farage out opinion-polled the Deputy PM after both of their public debates about the EU.  Not a surprise. The BBC's political editor, ex Young-Tory Nick Robinson, thought it might be connected with the public's rather less enthusiastic view of Clegg since the halcyon days before the last election when he was the new boy on the bloc and had not stained his copybook. Admittedly there was something desperate about Clegg's appeals to 'today's Britain' that he, apparently, so loved. A country saddled amongst a long list of horrors, with the highest tuition fees in the western world. The one thing he promised that would not happen. 

In fact Clegg was thoroughly defeated because he based his argument for his version of the future of Britain on the defense of a thoroughly disliked and defeated government. 

The quality of mainstream political debate in Britain has clearly declined. Farage's main propositions were often incoherent, sometimes contradictory, always exaggerated but nobody believed Clegg at all. Farage confused the EU with the west's real war machine, NATO. He was 'appalled' by Britain being potentially dragged into wars by the EU. He mentioned bombing Libya and the saber rattling over Syria and the honey trap offered to the Ukraine. All of these (failed) initiatives were either led or underpinned by NATO. The US and EU's combined armed wing is NATO. Farage wants to identify 'good' western wars as NATO's wars - which he wants to be in and 'bad' western wars with the EU - which he doesn't. Similarly, he constantly berated British 'big business' in the same sentences as his attacks on the unpatriotic rich for selling out Britain's democracy and self-determination. Yet he rushed to the defense of the City of London as 'Britain's biggest employer' and which was 'threatened' by the Coalition's execrable sell out of the City’s rights when they supported (they did not) the EU’s wishes to limit the power of finance (not implemented).  The City of London nearly destroyed the British economy in 2008 (and large parts of the European economy too.) The City is a poisonous anathema to any sort of democratic control that the British people might really require to determine anything important about the future of their country. 

In the event Farage's muddle of political and economic sloganeering did not matter. He was more popular than Clegg because Clegg was an exposed liar and fraud. And Farage sounded radical. He was with ‘the people’ against the Westminster class of politicians. He was with ‘the white British working class’ against the metropolitan elite with their immigrant nannies and gardeners. He denounced over-crowded schools, over-stretched health care and over loaded housing stock all tottering apparently under the weight of EU immigrants. What was left for Clegg in all this? He could only tell us that health ‘had been protected’, that schools ‘had been expanded’, that housing was ‘becoming more available under the Coalition government.’  Nobody believed that. 

The hot heart of Farage’s saloon bar nonsense remains, of course, roaring racism. Immigrants are the reason why living standards have fallen, why hospitals and schools are stretched and why young people have no jobs.  His economics are a crude extension of Thatcher and Osborne’s attack on heath and welfare. And Clegg had no answer to that. Clegg is part of the Westminster consensus supporting austerity as the ‘solution’ to the problems that Farage wants to blame on immigrants. 

Despite the limited appeal of the TV debates there are political signs of the times in all this. It’s true that Farage is an ego in a pint glass (and Clegg is a dead man walking) but if we consider one of the debates leading up to the formation of Ken Loach’s Left Unity last November – should Left Unity, some supporters asked, become the left’s version of UKIP – it is clear that Farage is presently occupying that space. His ‘radicalism’ is out of the textbook of early fascism.  His appeal (in terms of voters) is to the white working class, indeed all those that have abstained in the last elections and now UKIP potentially puts as much pressure on Labour as it puts on the Tories. Putting pressure from a saloon bar version of the left onto the Labour Party is now a seriously contested ground – albeit to paraphrase, that Farage’s radicalism is ‘the radicalism of fools.’

Second, Farage’s rush to adopt the colours of the City of London may be more strategic than it first appears. A bloc of huge capitalist interests, should the EU seek to make some inroads into the arrogant power of finance capital, encouraging the growth of UKIP as leverage against the EU and anybody sympathetic to corralling the bankers in Britain, is perfectly possible. This would be a friend indeed for dear Nigel and could catapult him into the centre of politics.