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Scotland: Can capitalism put all of us first?

By Philip Stott, Socialist Party Scotland

One year ago, the Jimmy Reid Foundation began work on the Common Weal project. Against the backdrop of the run-up to the independence referendum, it set itself the task of “imagining a new Scotland”. While welcoming a discussion about how to achieve a better, fairer and more equal country, Socialist Party Scotland gave an initial response to the limitations of the Common Weal’s approach in September 2013.

With the publication of their new book, Common Weal, in June 2014, which is a distillation of 50 papers covering a range of topics, we are now able to get an even clearer picture of the main ideas informing the Common Weal. In this critique of the book we aim to explain the need for consistent and far-reaching socialist policies to end the scourge of low pay, widening inequality and savage austerity for the majority that the Common Weal itself rightly identifies as a scandal needing urgent attention. (more on the Common Weal can be found at www.allofusfirst.org)

The ideas contained in the Common Weal are a certain point of reference among some activists in the Yes movement. Ironically, many on the socialist left echo the ideas contained in the Common Weal; pointing to what could be achieved under independence and a reformed, more progressive capitalism. But for hundreds of thousands of working class people attracted to voting Yes in the referendum it’s an end to cuts and falling living standards that is driving that support for independence. We will argue in this contribution that only socialist policies and a decisive break from the brutality of capitalism can deliver that change.

Transition to a fairer capitalism

The major weakness in the approach of the Common Weal is that they believe a transition to a fairer, more progressive capitalism is possible. The introduction to the book makes a bold claim: “This is arguably the single biggest reimagining of a nation state in modern history.” Unfortunately, there is little in terms of new ideas in the book. As the editor, Robin McAlpine, points out in the prologue, “It [Common Weal] started with simple aims – let’s think about what we want to achieve, let’s look around the world to see who has achieved it……and apply them to 21st Century Scotland.” By taking this approach, which they describe as “practical idealism”, looking only at existing capitalist models as a solution to a system that is in a deep and prolonged economic crisis, it inevitably fails to achieve the task it set itself.

We are in complete agreement with the Common Weal that decisive action is needed to end “inequality, poverty, declining infrastructure, powerless communities, closed politics, profiteering, low pay, overwork, anxiety, stress and unhappiness.” Indeed the book provides quite a powerful indictment of the brutality and waste endemic in capitalism today. The flawed approach of the book, however, is that the authors refuse to go beyond the limits of the very economic and social system that is responsible for these crimes against humanity. Instead they propose to carry through policies that would “humanise” capitalism.

In essence the Common Weal hopes for a return to the era of the post-war economic “consensus” which was underpinned by the long capitalist upswing between 1955 and the mid 1970’s. As we explained in our initial response to the Common Weal last year:

‘During that time, at least in the advanced capitalist countries, the working class won important concessions on welfare, public services, full employment and, relatively speaking, improvements in wages and incomes. The Nordic countries, Norway, Sweden, Denmark and to an extent Finland were the pinnacle of this Keynesian model, delivering relatively high levels of taxation on profits and wages, high government spending and quality public services.

The economic crisis in the mid 70’s brought this period to a crashing end. A crisis of profitability and the emergence of hyper-inflation meant that the capitalist class could no longer afford full employment and decent public services.

The bourgeois abandoned Keynesianism and embraced a new orthodoxy – monetarism – whose disciples included Thatcher in the UK and Reagan in the US. Mass privatisation, casualisation of work, attacks on wages and welfare provision followed as the share of income going to the working class was undermined.

There was a massive explosion in financialisation – as the capitalists increasingly sought more “profitable” investment in the “casino economy”. Globalisation – in essence the mass exploitation of cheap labour in the neo-colonial world, China and Eastern Europe was used to boost profits. Economic growth was sustained increasingly through unsustainable levels of credit, ensuring a crash at a certain point.

The great recession, the worst since the 1930’s, and the partial financial collapse of the world’s financial system in 2007/2008 was prepared by the previous policies pursued by world capitalism. Today, savage austerity is the dominant policy of governments across the world.” From the article Can the Common Weal deliver, or do we need clear socialist policies? September 2013

As Marxists have consistently pointed out, under capitalism, reforms won by the working class are temporary. The inability of the system to sustain the “consensus” has resulted in reforms turning into counter reforms as big business and capitalist governments seek to claw back what they were forced to concede to the working and middle class in the past. This is true even of the Nordic states, which the Common Weal draws many of its policies from.

The social gains made in the Nordic states have been eroded, in the case of Sweden severely so. In fact Sweden seems now to be the “poster child” of the neo-liberals who have recently been lauding Scandanavia’s turn to privatisation and austerity. There is no possibility of a return to the “golden era” of a growing capitalist system that could tolerate, for a time, improving conditions and rights for working class and middle class people.

Shared interests ?

The Common Weal does put forward reforms which socialists and trade unionists are involved in fighting for day-in and day-out and which form part of our programme. The demands for a living wage, a shorter working week, an end to privatisation, increased rights for workers in the workplace, tax increases on the rich and public ownership are welcome.

However, the Common Weal believes that an agreement can be brokered between the capitalists and big business on the one hand, and the majority of the working class on the other, to allow a more equitable and fairer capitalism to emerge.

In one telling passage in the book the comment is made “Success will come when we can ‘coincide’ the interests of different groups, seeking ways of doing things that help not one against the other but both at the same time.” Even more explicitly the Common Weal describes: “an effective system of industrial democracy begins from an awareness from both parties (employers and employees) that in fact their interests are broadly shared.” In neighbouring countries, claim the Common Weal, workers are “fundamental partners in the success of business.”

The argument that there are “shared interests” of workers and big business is naïve in the extreme. It flies in the face of the experience of hundreds of thousands of working class people in Scotland who are facing cuts and brutal austerity, at the same time as the capitalists and the billonaire class get even richer at our expense. The SNP’s White Paper also indicates that cuts would continue in an independent capitalist Scotland. This “shared interests” fallacy is also a danger for the workers movement containing, as it does, a justification for the ideas of social partnership which would tie the trade unions to accepting attacks on wages and working conditions for the “common good”.

The authors of the Common Weal seems not to understand that the logic of capitalism is the maximisation of profit – which itself is extracted from the labour of the working class. Against the backdrop of low growth and a huge debt burden – a result of bailing out the banks – the capitalists are seeking a way out through savage austerity against the working class majority. Profits are up since the crisis in 2008 – but not as a result of major new investment into the economy and the productive forces (science, technique and the productivity of labour). Instead, the so-called recovery is at the expense of falling wages and incomes going to the working class. In Marxist terms the bosses are increasing the relative and absolute rate of exploitation by cutting wages and, in some cases, increasing the number of hours worked.

In contrast, the Common Weal asserts that the laws of capitalism can be overcome through a consensus approach that seeks to reconcile the competing class interests of workers and the employers. One idea is the involving of workers in the running of business through employee representation on boards (always a minority of course – the Common Weal proposes the Danish and German models of one third worker participation on boards of management.) This would, they say, allow ideas about innovation and improvements about how the business could be run to come directly from the shop floor. Socialists would couterpose to this the demand for the nationalisation of the major companies to be put under the democratic control and management of the working class through elected committees.

The mission of the Common Weal seems to be to save capitalism from itself. Instead of low pay, the race to the bottom and the “Me-First” economics of profit maximisation at all costs, the Common Weal calls for All-Of-Us-First economics where the profits of big business are shared out more evenly. Workers should be able to negotiate a fairer share “so that more of that growth goes to wages and less to profits.” “It’s about helping workers to help enterprises be better”

Fight for reforms

Socialist Party Scotland fights tirelessly against cuts and austerity and for reforms that will benefit the working class. Whether it’s helping to build mass campaigns to defeat the poll tax, the bedroom tax or advocating that the trade unions organise a 24-hour general strike to defeat austerity, we will support all measures that strengthen the position of the working class. At the same time we consistently explain that under capitalism all steps forward for working class people are temporary. If forced to give concessions to a mass movement with one hand, the logic of capitalism is to seek to take it away with the other. This is not an argument for not fighting for improvements in working conditions, wages etc. What it does do is underline the need to link the fight for reforms in favour of the majority with the need to break decisively with capitalism and to fight for socialist planned economy.

In fact Marxists are the best and most consistent fighters for reforms in favour of the working class. But we understand that any reforms won from the capitalists are a by-product of mass struggle and revolutionary movements. In Seattle our co-thinkers – Socialist Alternative – and the working class of the city have won an important victory recently when the city council voted through a proposal to increase the minimum wage to $15 an hour. This will initially benefit 1000,000 workers in Seattle. But it was the election of Socialist Alternative’s Kshama Sawant, who was the first socialist to be elected in over 100 years in Seattle, and crucially the huge mobilisation of working class communities, including strike action by fast food workers, that have forced the political establishment to move.

The victory has had an electrifying impact across the US and has given confidence to millions of workers. At the same time the Democrats and big business have attempted to water down the minimum wage legislation with exemptions and opt outs. At all times Socialist Alternative have explained the need to build a mass working class movement across the US to turn the tide against big business. As well as building a new political party that will fight corporate interests while advocating socialist policies that would break decisively from capitalism.

Nordic reality

The Nordic countries are the ideal model for the Common Weal; “Denmark, Sweden, Finland and Norway all exist in a Me-First world but have managed to put all of their people first in a way we can barely imagine.” As we have already commented the Nordic model, which was predicated on a “consensus” between the working class and the capitalists at a time of an historic economic upswing, is being undermined by social cuts, privatisation and austerity. While it’s true that the social gains made by the working class in the Nordics have not been completely removed, the direction of travel is clear.

The Common Weal is guilty of painting a vastly overly rosy picture of reality. The economic crisis in 2008/09 hit Denmark severely. It’s property bubble burst, banks went under and billions were cut from public budgets. The Social Democratic-led government introduced an unprecedented austerity package in 2012/13 that included the slashing of unemployment entitlement for workers from 4 years to 2. The result was that 3,000 unemployed workers every month lost their unemployment benefit. This was implemented alongside tax cuts for the richest. The government in 2013 locked-out 70,000 teachers in a dispute over a collective bargaining agreement which had run out and the employers wanted to impose more teaching hours which the union refused to sign. The response of the Social Democratic government was emergency legislation that imposed the changes and gave more powers to individual head teachers to undermine the organised power of the teaching unions.

The right-wing led Swedish government has been lauded by international journals of big business like the Economist for its cuts and privatisation programme. Sweden’s 136 billionaires (more than in the UK) have almost half of the country’s entire GDP. A record amount of company profits in Sweden has been handed out to shareholders this year. The anger at these neo-liberal policies, which are boosting the profits of big business at a time of social cuts, has led to increased support for the racist Swedish Democrats who are currently the third largest party in the opinion polls. There has also been a big increase in neo-Nazi attacks in Sweden and huge anti-racist demonstrations in cities across Sweden in response. But it’s clear that the failures of Swedish capitalism to sustain the “Nordic model” are a decisive issue for workers and socialists to come to terms with.

There is not a word of these developments in the Common Weal. This approach, that workers and bosses should sit down and agree to share out the profits of business more equally for the common good of society, permeates the whole book.

Can capitalism be made fairer?

It is correct, as the Common Weal proposes, to argue for tax increases for the rich. The Common Weal proposes to raise £1 billion by increasing the top rates of tax, although they don’t propose any increases in corporation tax – despite the huge profits that are being made. Even this mild redistributive policy – and the other measures to increase wages for workers and to lower inequality – will be ferociously resisted by big business and the main capitalist political parties. The elite are past masters at evading and avoiding tax and hiding their wealth in off-shore accounts and the like. This poses the need to take over the banks and the finance houses into public ownership and democratic control.

Anyone arguing for such encroachment into the wealth taken by the bosses will face howls of outrage from the billionaire class, threats to disinvest, to move abroad and even to sabotage the economy. This threat of a “strike of capital” was precisely the one face by the Wilson Labour government in the 1970’s in the UK who had proposed to increase tax the rich. In response the bosses revolted. With the option of facing them down, or retreating, the Labour leaders capitulated. Similarly, the oil companies in the North Sea routinely threaten to stop investing if the tax regime changes.

The Common Weal believes that it would be possible to convince capitalists, big and medium sized, that it’s in their interests to agree to give up a share of their profits and individual wealth to increase the incomes of the working class. Their argument goes that higher wages for workers will boost the economy; investment in high quality jobs will stimulate growth; and a fairer tax regime will lower inequality. But that’s the equivalent of trying to treat the symptom but not the disease. Moreover the patient won’t even take the medicine – no matter how nicely you ask.

There is a section of the capitalist class who do support a turn away from the current austerity-laden version of capitalism and would support increased wages and a job creation programme to try and stimulate growth in the economy. This Keynesian wing is currently in a minority – although this could change if faced with a revolt by the working class against the effects of the crisis. Even then, it would mean increased government spending – increased debt – and the bosses giving up a portion of their profits. For a temporary period they could live with that in an attempt to save their system. In the medium term such temporary concessions would be undermined by the inevitable drive to unload the economic crisis onto the backs of the working class.

The whole historical experience of the workers’ movement is that the bosses will fight tooth and nail to resist any encroachment into their profits. Only when faced with a mass revolt that threatens their interests, and even their very existence, will they be prepared to make such concessions. All the more so when capitalism internationally is locked into a depressionary phase and unable to find a route to sustained economic growth. Today, it’s counter-reforms rather than reforms that benefit ordinary working class people that are the main direction of travel for big business.

This poses the need for the working class to go further and to fight instead for the productive forces – the factories, machines, offices and resources – controlled by the capitalist elite into democratic public ownership. By owning and controlling the main economic levers – the major corporations that dominate the economy – it would immediately be possible to implement the policies outlined in the Common Weal and much more besides. The 30-hour working week, full employment, a living wage and a mass programme of public housing – all outlined in the Common Weal – would indeed be achievable. As would the idea of a citizens income – a living income for all – and the rest of the Common Weal’s programme.

Limited public ownership

Instead of this far-reaching but necessary policy, the Common Weal only argues for extremely limited forms of public ownership. The public ownership of the electricity grid, Scotrail and an element of transport are about as far as the Common Weal is prepared to go. They even propose to allow companies like Scottish Power and the rest of the “big six” to maintain the grid and to sell us energy, of course at a profit, with a shareholder dividend included. This approach would leave the overwhelming majority of the economy in Scotland in private, capitalist hands, including oil and the major food multi-nationals.

The Common Weal does not even go as far as the programme implemented by the Labour Government in 1945 that nationalised, on a capitalist basis, around 20% of the economy. Instead there is a significant emphasis in the Common Weal on creating smaller, alternative models of ownership including cooperatives and mutuals where employees own the business. In practice these “islands of socialism” would be forced to operate within a hostile capitalist environment. Many of them would be reliant on big business for contracts who would seek to extract a maximum profit by driving down costs. Others would need to rely on the public sector contracts at a time of unprecedented spending cuts.

Major multi-national corporations dominate the Scottish economy. A recent report pointed out that 90% of oil and gas sector is controlled by multi-nationals from outside Scotland. Key sectors such as oil, energy, transport, manufacturing and finance should be publicly owned and controlled and managed by the working class – with compensation paid only on the basis of proven need.

This would need to be combined with full government control of incoming and outgoing foreign trade, enabling a democratically elected government – and the working class, not the market – to control imports and exports including capital. This would provide the possibility of developing a democratic, socialist plan of production that could very quickly transform the lives of millions.

Instead of such a plan the Common Weal believes it’s possible to cajole and encourage business through more regulation and tax regimes that would encourage it to move in a more progressive direction. For example encouraging the production of better quality food.

There is an old saying that Marxists often use; you can’t control what you don’t own. If the majority of the economy were left in the hands of capitalist interests then planning production to protect the environment, to create full employment and a living income for all would be impossible. Especially within the limits of crisis-ridden capitalism where the profit extracted from the labour of the working class is the over-riding priority.

Socialism and democracy

Socialism would also be far more democratic than capitalism. Under capitalism most of the important decisions are not taken in Westminster, Holyrood or local council chambers, they are taken in the boardrooms of the big corporations. By contrast, a socialist government would bring major industry into democratic public ownership. It would be necessary to draw up a plan, involving the whole of society, on what industry needed to produce.

At every level, in communities and workplaces, committees would be set up and would elect representatives to regional and national government – again on the basis of recall at anytime if they disagreed with their decisions. Everybody would be able to participate in real decision-making about how best to run society. And organisations in a socialist society would be completely different to the toothless bodies that working-class people are currently allowed to take part in – the committees would actually have the power to say how the economy and society is organised.

In addition, for a planned economy to work, it would be vital that the working class had the time to take part in the running of society. Therefore, measures such as a shorter working week and decent, affordable childcare would be a prerequisite for society to develop towards socialism.

In contrast, the Common Weal puts forward cosmetic changes that would not deliver real democracy for the majority. Ideas such as “participatory budgets” where local communities vote on where and what to spend money on – in practice just now that would mean where to make the cuts – is raised as a way forward. As is the idea of “mini-publics”, made up of a ‘cross section of society” that would advise governments and councils on public policy but which would not be binding. None of these proposals wold fundamentally impinge or alter the power of big capital and capitalist governments.

A big step forward for democracy today, and one that the Common Weal ignores, would be the building of a new party to represent the interests of the working class majority. Only in the “epilogue’ is the issue of the lack of political representations touched on. “We need political parties with a real vision for transformation…It is for you to chose and shape those political parties.” But none of the existing parties represent ordinary people. They all support a continuation of capitalism and therefore, in practice, austerity for the majority. A new mass working class party, with the trade unions playing a decisive role in it’s creation, armed with socialist policies would represent a massive step forward in representative democracy.

Policies such as living wage, a shorter working week, an end to privatisation, that the rich should pay their share of tax, a major programme of public investment in housing and public services raised in the Common Weal are welcome. To deliver these policies and more besides needs a mass movement against austerity and the building of an independent socialist Scotland as a step to the socialist transformation of society internationally. Only then would the task of liberating humanity from degradation and the horrors of capitalism truly begin.
A socialist programme for Scotland

Socialist Party Scotland is supporting a Yes vote in 2014 and that the powers of independence be used to:

  • Nationalise, under democratic workers’ control and management, the oil and gas industry, the renewable energy sector and the major sectors of the Scottish economy. This would release billions to invest in a massive programme of job creation and to rebuild our public services.
  • Bring the banks and finance sector into public ownership under democratic working class control
  • Renationalise gas, electricity, transport and the privatised sectors of the economy.
  • Tax the rich and big business. Increase the minimum wage and end the attacks on welfare
  • For a living wage and an end to zero-hour contracts
  • No to Nato. Trident and all weapons of mass destruction out of Scotland. Invest in socially useful jobs.
  • Abolish all anti-trade union laws
  • Trade unions should break from Labour and build a new mass working class party
  • Reverse the cuts. For a Scottish government representing working people, the unemployed and the poor that defends jobs, wages, public services and pensions and refuses to make cuts to pay for the crisis
  • For a socialist plan of production in an independent socialist Scotland as part of a voluntary confederation with England, Wales and Ireland as a step to a socialist Europe

 

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