Our Revolutionary Aims

The Economy

How Economies work

Karl Marx described mankind as having a “species essence. The capacity of language to communicate, share knowledge and co-operate to change our environment.

Our species essence is therefore different from lower mammals. From tribal times, we have had to deal with sex and cultural differences, differential treatment for those who were visibly different. In tribal times men and women had very different roles but there was a value associated with each role and women were highly regarded as homemakers. This is a period prior to wealth introducing power into relationships between men and women, a situation which is captured most clearly in the patriarchy of the three main Judaeo religions namely Judaism, Christianity and Islam.

Environment therefore shaped the way “species essence” was reflected in tribal reality. As Karl Marx said ‘man’s consciousness doesn’t shape his material environment his material environment shapes his consciousness’(9) As there was no storage of food, in tribal society life was uncertain, and this would be reflected in the ‘consciousness of the people’, who would expect punishments to be harsh with unforgiving Gods ‘in control’ of human destiny. Brutality reflects hard material circumstances. Act with brutality without the material circumstances that ‘justify it’ and it becomes merely a perversion, an irrelevant cultural fetish or an abuse of power.

Once storage of food happened and surpluses could be traded in pre-Biblical times, authoritarian system emerged. At this point man was set against man and man against woman. Stored value became wealth that could be taken by force. This point in history redefined people’s lives in ways that went beyond just their sex. They owned, created and consumed value in ways which could define who they were. This reality went on right the way through history up to and including the birth of capitalism with capitalists, under the cloak of employment contracts, misappropriating the profit created by workers. It was going on when the final collapse of capitalism occurred in the west sometime around the mid-1980s. Karl Marx said the history of humanity is the history of class struggle. The struggle between those who create the wealth (workers) and those who control it; the elite!

Having maintained steadily growth throughout the post second world war period by the 1980’s western capitalism was in crisis. It was unwieldy and unprofitable in its bourgeois socialist form, over managed by a well-paid self-interested political class rather than controlled by either capitalists or its workers.

In the UK, unprofitable state industries were damaging the economy. Trades Unions believed they were acting in the best interests of their workers by demanding more pay but by misunderstanding the nature of profitability and the responsibility of the state to act in the interests of the tax paying public, they ended up, along with the Conservative government, of destroying industries.

Putting those industries in the hands of the workers would have been an alternative strategy but one not available in a bourgeois state run by a political elite and with workers who had accepted contract, choice and consent but who also accepted uncritically the bourgeois values of unfairness and elitism. Put simply they promoted a them and us attitude towards their employers, taxpayers and the state.

In the 1980’s on each side of the Atlantic charismatic leaders emerged; Margaret Thatcher in the UK and Ronald Regan in the US. Both held the view that the state must be brought to heel. In Britain it meant closing nationalised industries that were not profitable and privatising those that were profitable. Moreover, the solution to the western world’s economic crisis was solved by the capitalist system getting China to manufacture the goods and out strip demand with a planet destroying but inflation preventing over supply. Even now no one really grasps the implications of this as we have come to accept it as our economic ‘reality’.

The 1980’s therefore is the point when western businesses unable to excessively exploit western workers to make massive profits due to decades of state intervention and worker protection, went east and shamefully embroiled the western worker in the exploitation of workers elsewhere in the world. Were, it not for the fact western workers do not understand their role in exploiting workers in places like China or Vietnam they could be accused of consciously accepting worker exploitation under the cloak of contract, choice and consent, a process well understood by the Victorian bourgeoisie. However western workers role in exploiting workers of poorer nations is done unconsciously. The global bourgeoisie and western politicians know what is going on and maybe feel powerless to change it. What they have done is trap western workers into consuming goods made cheaply elsewhere in the world. As consumers we have little choice but to accept being global capitalisms fellow travellers. At least for the time being.

As a result of what happened during the 1980’s and 1990’s Britain and the US watched the right kind of things happen (economic growth/low inflation) but seem not to have understood the harm it was doing to the planet. The economies of the west began to flourish. In the UK, the heirs to Thatcher (Major and Blair) spawned the heirs to Blair (Cameron and Osborne). Each man believing in turn that this story of wealth, and jobs in retail or services, was an economic success. All this of course led eventually to the famous banking crisis and the taxpayer bailouts arranged by our political elite.

The legacy of western capitalism ‘going global’ partly explains why the first and second generation of ex industrial workers voted Brexit in the UK and for Trump in the US. It is because the economic changes overseen by our political elites has created an army of under employed or unemployed people who want to have good jobs and create social and economic value by doing something useful but find they cannot. Their jobs have gone to China. These people who are shown such utter disrespect by the political class are basically out of work because they are victims of the European, US and global labour and employment markets. Their redundant knowledge, uneconomic skills and employment costs cannot find a market within the western economy and they are too poor and immobile to move to where their skills might find a market.

British, US and European governments however liked the success of the 1980’s model even after the banking crisis hit, as economic success generated tax revenue which could be spent on welfare, pensions and state employment and thus unemployment was low.

The political establishment now fighting to preserve the European Union established their current political ‘groupthink’ during this period, relying on plentiful cheap imports keeping prices low so debt could be pumped into the economy without a shortage of goods driving up inflation. It also helps if wages are pushed to the minimum wage by high levels of inward migration. This essentially Blairite group think has become the political centre ground so hated and distrusted by ordinary working people. It is a bourgeois socialist centre ground occupied by the majority of MP’s from all three main parties.

Having looked at how in the twenty first century we create economic value by exploiting the planet and poorer workers with government debt, we need to explore social value (10). The term used in the United Kingdom, for much of what is understood as social value, is welfare but this includes health and education. Welfare is essentially the government delivering social value. In our simple tribal society, the social value was traditionally woman’s work which may explain why in a patriarchal society it has typically and undeservedly had low value relative to wealth creation. However, this socially important work must be done.

Our state has increasingly taken on the role of providing social value because of changes in the norms of society, norms once expected by capitalism and imposed by Christian belief such as the sanctity of marriage. But with debt used to pay for planet busting consumption as well as debt used to provide welfare, we need to get people involved in a debate about exactly what good is coming out of this frankly unsustainable model. People must continue to enjoy the rights associated with capitalism but as a western world we need to address the inherent inequality, unfairness and elitism which as a legacy of the feudal system was willingly embraced by capitalism and continues to undermine the poor whilst now taking its toll on the health of the planet too.

We must recognise the effects of debt and get debt under control. As far as practical we must reduce the expense of government in social and economic activities, freeing people to support their own communities. We must adopt for government a simple regulatory function based on contract, choice and consent intervening in markets at local and national level assuring the quality of provision which if unregulated could undermine the consumer or the worker.

Summary

Debt has been increasing since the western economy became unprofitable and production was sent abroad. This arrangement has been successful for workers and governments because it has made retailers and brand owners rich and has provided tax revenue and jobs in retail and welfare. However, we need to curtail our dependence on debt and start to once again create value both economic and social.