Horner's Corner

One of the great fallacies of American thinking is that human worth is constituted by a particular set of aptitudes which lead to economic advancement. This is not true at all. Two thirds of the people who can make money are mediocre; and at least one half of them are morally at a low level. As a whole, they are vastly inferior to other types who are not animated by the economic motives; I mean the artists, and teachers, and professional people who do work which they love for its own sake and earn about enough to get along on. … The mischief of elevating the type that has aptitude for economic advancement is that it denies the superior forms of aptitude which exist in quite humble people.
                                                                                                                                                 Alfred North Whitehead

See also: The Injustices of Merit

On the oft forgotten duality of surplus value
Moishe Postone has written about value in a capitalistic society that is completely dominated by its very own structures of the capitalistic culture. For Postone, surplus is not just about the labourers overproducing for owners to reinvest, surplus is the actual measurement of wealth.– Tricia Wang

I get the impression that some people are having problems with what Zizek says about ‘immaterial labour’, rent etc in his recent article The Revolt of the Salaried Bourgeoisie. It’s been claimed to be incoherent, or heterodox or whatever. I don’t think that it is incoherent. As for unorthodox, I don’t think so either, but who cares? The Marxist approach is that capitalism constantly metamorphoses its means of expropriation, exploitation and domination. Accordingly, critical thought, rather than stopping in its tracks with a frozen set of a-historical categories, must do the work of thinking critically about the present historical context/conjuncture, not just that of the Nineteenth century. We should care  about getting it right, not about being being orthodox. Anyway, as an aid to this debate -which in part boils down to the role of labour as creator of value, I suggest that the place to look for the origins of Zizek’s view is Moishe Postone. His book Time, Labour and Social Domination seems to me to be to be an example of genuine critical social and historical thinking, whatever one’s views as to his arguments (and they certainly require our attention, rather than any kind of unthinking affirmation or rejection). One of the key concerns of Postone’s critics seems to be the apparent demotion of class struggle in his work; but whether the analysis that he subjects ‘productivism’ to (and related belief that a solution is to be found in unleashing the productive force of an unalienated workers in a post capitalist scenario) really comes to this, I doubt.

Here’s bit of Postone, and some links to follow up, for those that want them.
Fast Tube by Casper

Click here for a very critical review of Postone’s book, here for something more balanced (arguably!).

Fast Tube by Casper

How did Bill Gates become the richest man in America? His wealth has nothing to do with the production costs of what Microsoft is selling: i.e. it is not the result of his producing good software at lower prices than his competitors, or of ‘exploiting’ his workers more successfully (Microsoft pays its intellectual workers a relatively high salary). If that had been the case, Microsoft would have gone bankrupt long ago: people would have chosen free systems like Linux which are as good as or better than Microsoft products. Millions of people are still buying Microsoft software because Microsoft has imposed itself as an almost universal standard, practically monopolising the field, as one embodiment of what Marx called the ‘general intellect’, meaning collective knowledge in all its forms, from science to practical knowhow. Gates effectively privatised part of the general intellect and became rich by appropriating the rent that followed from that.

The possibility of the privatisation of the general intellect was something Marx never envisaged in his writings about capitalism (largely because he overlooked its social dimension). Yet this is at the core of today’s struggles over intellectual property: as the role of the general intellect – based on collective knowledge and social co-operation – has increased in post-industrial capitalism, so wealth accumulates out of all proportion to the labour expended in its production. The result is not, as Marx seems to have expected, the self-dissolution of capitalism, but the gradual transformation of the profit generated by the exploitation of labour into rent appropriated through the privatisation of knowledge.

The same goes for natural resources, the exploitation of which is one of the world’s main sources of rent. What follows is a permanent struggle over who gets the rent: citizens of the Third World or Western corporations. It’s ironic that in explaining the difference between labour (which in its use produces surplus value) and other commodities (which consume all their value in their use), Marx gives oil as an example of an ‘ordinary’ commodity. Any attempt now to link the rise and fall in the price of oil to the rise or fall in production costs or the price of exploited labour would be meaningless: production costs are negligible as a proportion of the price we pay for oil, a price which is really the rent the resource’s owners can command thanks to its limited supply.

A consequence of the rise in productivity brought about by the exponentially growing impact of collective knowledge is a change in the role of unemployment. It is the very success of capitalism (greater efficiencies, raised productivity etc) which produces unemployment, rendering more and more workers useless: what should be a blessing – less hard labour needed – becomes a curse. Or, to put it differently, the chance of being exploited in a long-term job is now experienced as a privilege. The world market, as Fredric Jameson has put it, is now ‘a space in which everyone has once been a productive labourer, and in which labour has everywhere begun to price itself out of the system’. In the ongoing process of capitalist globalisation, the category of the unemployed is no longer confined to Marx’s ‘reserve army of labour’; it also includes, as Jameson describes, ‘those massive populations around the world who have, as it were, “dropped out of history”, who have been deliberately excluded from the modernising projects of First World capitalism and written off as hopeless or terminal cases’: so-called failed states (DR Congo, Somalia), victims of famine or ecological disaster, trapped by pseudo-archaic ‘ethnic hatreds’, objects of philanthropy and NGOs or targets of the ‘war on terror’. The category of the unemployed has thus expanded to encompass vast ranges of people, from the temporarily unemployed, through to the no longer employable and permanently unemployed, to the inhabitants of ghettos and slums (all those often dismissed by Marx himself as ‘lumpen-proletarians’), and finally to the whole populations or states excluded from the global capitalist process, like the blank spaces on ancient maps.

Some say that this new form of capitalism provides new possibilities for emancipation. This at any rate is the thesis of Hardt and Negri’s Multitude, which tries to radicalise Marx, who held that if we just cut the head off capitalism we’d get socialism. Marx, as they see it, was historically constrained by the notion of centralised, automated and hierarchically organised mechanical industrial labour, with the result that he understood ‘general intellect’ as something rather like a central planning agency; it is only today, with the rise of ‘immaterial labour’, that a revolutionary reversal has become ‘objectively possible’. This immaterial labour extends between two poles: from intellectual labour (production of ideas, texts, programs etc) to affective labour (carried out by doctors, babysitters and flight attendants). Today, immaterial labour is ‘hegemonic’ in the sense in which Marx proclaimed that, in 19th-century capitalism, large industrial production was hegemonic: it imposes itself not through force of numbers but by playing the key, emblematic structural role. What emerges is a vast new domain called the ‘common’: shared knowledge and new forms of communication and co-operation. The products of immaterial production aren’t objects but new social or interpersonal relations; immaterial production is bio-political, the production of social life.

Hardt and Negri are here describing the process that the ideologists of today’s ‘postmodern’ capitalism celebrate as the passage from material to symbolic production, from centralist-hierarchical logic to the logic of self-organisation and multi-centred co-operation. The difference is that Hardt and Negri are effectively faithful to Marx: they are trying to prove that Marx was right, that the rise of the general intellect is in the long term incompatible with capitalism. The ideologists of postmodern capitalism are making exactly the opposite claim: Marxist theory (and practice), they argue, remains within the constraints of the hierarchical logic of centralised state control and so can’t cope with the social effects of the information revolution. There are good empirical reasons for this claim: what effectively ruined the Communist regimes was their inability to accommodate to the new social logic sustained by the information revolution: they tried to steer the revolution making it into yet another large-scale centralised state-planning project. The paradox is that what Hardt and Negri celebrate as the unique chance to overcome capitalism is celebrated by the ideologists of the information revolution as the rise of a new, ‘frictionless’ capitalism.

Hardt and Negri’s analysis has some weak points, which explain how capitalism has been able to survive what should have been (in classic Marxist terms) a new organisation of production that rendered it obsolete. They underestimate the extent to which today’s capitalism has successfully (in the short term at least) privatised the general intellect itself, as well as the extent to which, more than the bourgeoisie, workers themselves are becoming superfluous (with greater and greater numbers of them becoming not just temporarily unemployed but structurally unemployable).

If the old capitalism ideally involved an entrepreneur who invested (his own or borrowed) money into production that he organised and ran and then reaped the profit, a new ideal type is emerging today: no longer the entrepreneur who owns his company, but the expert manager (or a managerial board presided over by a CEO) who runs a company owned by banks (also run by managers who don’t own the bank) or dispersed investors. In this new ideal type of capitalism, the old bourgeoisie, rendered non-functional, is refunctionalised as salaried management: the new bourgeoisie gets wages, and even if they own part of their company, they earn stocks as part of their remuneration for their work (‘bonuses’ for their ‘success’).

This new bourgeoisie still appropriates surplus value, but in the (mystified) form of what has been called ‘surplus wage’: they are paid rather more than the proletarian ‘minimum wage’ (an often mythic point of reference whose only real example in today’s global economy is the wage of a sweatshop worker in China or Indonesia), and it is this distinction from common proletarians which determines their status. The bourgeoisie in the classic sense thus tends to disappear: capitalists reappear as a subset of salaried workers, as managers who are qualified to earn more by virtue of their competence (which is why pseudo-scientific ‘evaluation’ is crucial: it legitimises disparities in earnings). Far from being limited to managers, the category of workers earning a surplus wage extends to all sorts of experts, administrators, public servants, doctors, lawyers, journalists, intellectuals and artists. The surplus they get takes two forms: more money (for managers etc), but also less work and more free time (for – some – intellectuals, but also for state administrators etc).

The evaluative procedure that qualifies some workers to receive a surplus wage is an arbitrary mechanism of power and ideology, with no serious link to actual competence; the surplus wage exists not for economic but for political reasons: to maintain a ‘middle class’ for the purpose of social stability. The arbitrariness of social hierarchy is not a mistake, but the whole point, with the arbitrariness of evaluation playing an analogous role to the arbitrariness of market success. Violence threatens to explode not when there is too much contingency in the social space, but when one tries to eliminate contingency. In La Marque du sacré, Jean-Pierre Dupuy conceives hierarchy as one of the four procedures (‘dispositifs symboliques’) whose function is to make the relationship of superiority non-humiliating: hierarchy itself (an externally imposed order that allows me to experience my lower social status as independent of my inherent value); demystification (the ideological procedure that demonstrates that society is not a meritocracy but the product of objective social struggles, enabling me to avoid the painful conclusion that someone else’s superiority is the result of his merits and achievements); contingency (a similar mechanism, by which we come to understand that our position on the social scale depends on a natural and social lottery; the lucky ones are those born with the right genes in rich families); and complexity (uncontrollable forces have unpredictable consequences; for instance, the invisible hand of the market may lead to my failure and my neighbour’s success, even if I work much harder and am much more intelligent). Contrary to appearances, these mechanisms don’t contest or threaten hierarchy, but make it palatable, since ‘what triggers the turmoil of envy is the idea that the other deserves his good luck and not the opposite idea – which is the only one that can be openly expressed.’ Dupuy draws from this premise the conclusion that it is a great mistake to think that a reasonably just society which also perceives itself as just will thereby be free of all resentment: on the contrary, it is precisely in such a society that those who occupy inferior positions will find an outlet for their hurt pride in violent outbursts of resentment.

Connected to this is the impasse faced by today’s China: the ideal goal of Deng’s reforms was to introduce capitalism without a bourgeoisie (since they would be the new ruling class); now, however, China’s leaders are making the painful discovery that capitalism without a stable hierarchy (brought about by the existence of a bourgeoisie) generates permanent instability. So what path will China take? The former Communists, meanwhile, are emerging as the most efficient managers of capitalism because their historical enmity towards the bourgeoisie as a class perfectly fits the tendency of today’s capitalism to become a managerial capitalism without a bourgeoisie – in both cases, as Stalin put it long ago, ‘cadres decide everything.’ (An interesting difference between today’s China and Russia: in Russia, university teachers are ridiculously underpaid – they are de facto already part of the proletariat – while in China they are comfortably provided with a surplus wage as a means to guarantee their docility.)

The notion of surplus wage also throws new light on the ongoing ‘anti-capitalist’ protests. In times of crisis, the obvious candidates for ‘belt-tightening’ are the lower levels of the salaried bourgeoisie: political protest is their only recourse, if they are to avoid joining the proletariat. Although their protests are nominally directed at the brutal logic of the market, they are in effect protesting against the gradual erosion of their (politically) privileged economic place. Ayn Rand has a fantasy in Atlas Shrugged of striking ‘creative’ capitalists, a fantasy that finds its perverted realisation in today’s strikes, which are mostly strikes on the part of a ‘salaried bourgeoisie’ driven by fear of losing their privilege (their surplus over the minimum wage). These are not proletarian protests, but protests against the threat of being reduced to proletarians. Who dares strike today, when having a permanent job has itself become a privilege? Not low-paid workers in (what remains of) the textile industry etc, but those privileged workers with guaranteed jobs (teachers, public transport workers, police). This also accounts for the wave of student protests: their main motivation is arguably the fear that higher education will no longer guarantee them a surplus wage in later life.

At the same time it is clear that the huge revival of protests over the past year, from the Arab Spring to Western Europe, from Occupy Wall Street to China, from Spain to Greece, should not be dismissed as merely a revolt of the salaried bourgeoisie. Each case has to be taken on its own merits. The student protests against university reform in the UK were clearly different from August’s riots, which were a consumerist carnival of destruction, a true outburst of the excluded. One can argue that the uprisings in Egypt began in part as a revolt of the salaried bourgeoisie (educated young people protesting about their lack of prospects), but this was only one aspect of a larger protest against an oppressive regime. On the other hand, the protest hardly mobilised poor workers and peasants and the electoral victory of the Islamists is an indication of the narrow social base of the original secular protest. Greece is a special case: in the last decades, a new salaried bourgeoisie (especially in the over-extended state administration) was created thanks to EU financial help and loans, and the protests were motivated in large part by the threat of losing this privilege.

Meanwhile, the proletarianisation of the lower salaried bourgeoisie is accompanied at the opposite extreme by the irrationally high remuneration of top managers and bankers. This remuneration is economically irrational since, as investigations have demonstrated in the US, it tends to be inversely proportional to a company’s success. Rather than submit these trends to moralising criticism, we should read them as signs that the capitalist system itself is no longer able to find any level of self-regulated stability – it threatens, in other words, to run out of control.

See also: Postone, Marx and Capitalism.

From the LRB:

Slavoj Žižek · The Revolt of the Salaried Bourgeoisie · LRB 11 January 2012.

Fast Tube by Casper

Can we call the alternative communism? or is that now a terminally discredited word? One view here and another  here.

Fast Tube by Casper

The City, London . . . Britain’s finance sector contributes less to the country than manufacturing. Photograph: Andy Rain/EPA

The national interest. It’s a phrase we’ve heard a lot recently. David Cameron promised to defend it before flying off last week to Brussels. Eurosceptic backbenchers urged him to fight for it. And when the summit turned into a trial separation, and the prime minister walked out at 4am, the rightwing newspapers took up the refrain: he was fighting for Britain. In the eye-burningly early hours of Friday morning, exhausted and at a loss to explain a row he plainly hadn’t expected, Cameron tried again: “I had to pursue very doggedly what was in the British national interest.”

As political justifications go, the national interest is an oddly ceremonial one. Like the dusty liqueur uncapped for a family gathering, MPs bring it out only for the big occasions. And when they do, what they mean is: forget all the usual fluff about ethics and ideas; this is important.

You heard the phrase last May, as the Lib Dems explained why they were forming a coalition with the Tories. More seriously, Blair used it as Britain invaded Iraq.

But here Cameron wasn’t talking about foreign policy; nor about who governs the country. The national interest he saw as threatened by Europe is concentrated in a few expensive parts of London, in an industry that would surely come bottom in any occupational popularity contest (yes, lower even than journalists): investment banking.

In its haste to depict events as Little Britain v Big Europe, the Tory press hasn’t dwelt on the inconvenient details of last week’s fight. But it was only after the prime minister failed to secure protection for the City from new financial regulation mooted by the EU that he told Nicolas Sarkozy to get on his vélo.

On one issue in particular, Cameron had a good case: Britain wants banks to put more money aside for a rainy day than the EU is considering. Elsewhere, he just looked unreasonable – what exactly is wrong with having international banking supervision? One reason for the euro crisis was that its members have 17 national bank watchdogs and barely anyone looking across borders.

Step back from what even EU officials were calling “arcane” details, though, and the big principle is this: the prime minister effectively stuck relations with the rest of Europe in the deep freeze in order to protect one sector of the economy.

In my recollection, no British minister in recent times has termed one industry as being of “national interest”. “Vital” or “key”? Why, such words are the very currency of the MP’s address to a trade association. But on the big phrase, I asked the Guardian’s librarians to check the archives from 1997 onwards. They came back empty-handed.

Cameron is merely expressing more openly something Labour frontbenchers also believe: that the City is pretty much the last engine functioning in Britain’s misfiring economy. Indeed, one of the Labour lines of attack against Cameron this weekend has been that he has left the City more open to regulation.

A few weeks ago, the shadow chancellor Ed Balls warned against any further taxes on financial trading within Europe. However, he said, he would urge a “Robin Hood tax with the widest international agreement”. In other words, Balls will give his fullest support to something that has no chance of happening.

This is the same kind of political subservience towards the City, observed by the Financial Services Authority (FSA) in its report into the collapse of RBS. According to the watchdog, a major reason why Fred Goodwin wasn’t checked as he drove RBS off a cliff was because of “a sustained political emphasis on the need for the FSA to be ‘light touch’ in its approach and mindful of London’s competitive position”. Had regulators been harder on the bankers, “it is almost certain that their proposals would have been met by extensive complaints that the FSA was pursuing a heavy-handed, gold-plating approach which would harm London’s competitiveness”.

As all British taxpayers know by now, securing the “competitiveness” of RBS has wound up costing us around £45bn.

So what is it that justifies the kid-glove treatment of the finance sector? Switch on the news and you normally hear some minister or lobbyist (come on down, Angela Knight of the British Bankers’ Association) talking about the vital contribution banking makes to employment. Our tax revenue. Or the role banks ideally play in directing money to needy businesses.

These claims are repeated so often that they rarely get even the briefest patdown from interviewers, let alone backbench MPs or economists. Yet they are largely bogus, as explained in a new book called After the Great Complacence, produced by academics at Manchester University’s Centre for Research on Socio-Cultural Change (Cresc). Indeed, on nearly any important measure, finance actually contributes less to Britain than manufacturing.

Take jobs. The finance sector employs 1m people in Britain. Chuck in the lawyers, the PRs and the smaller fry that swim in its wake and you are up to a grand total of 1.5m. And most of these people are not the investment bankers for whom Cameron went to war in Brussels. At the big British banks such as RBS and HBOS, 80% of the staff work in the retail business. Even if Sarkozy were to shroud Canary Wharf in a giant tricolore, those staff would still be needed to staff the branches and man the call centres. Even in its current state of emaciation, manufacturing employs 2m people.

What about taxes? Lobbyists like to point out that banks are usually the biggest payers of corporation tax, but usually omit to mention that corporation tax isn’t that big a money-spinner. For their part, even leftwingers will usually assume that the bankers effectively paid for the tax credits, hospitals and schools we enjoyed under Labour.

It’s not true. The Cresc team totted up the taxes paid by the finance sector between 2002 and 2008, the six years in which the City was having an almighty boom: at £193bn, it’s still only getting on for half the £378bn paid by manufacturing. It would be more accurate to say that the widget-makers of the Midlands paid for Tony Blair’s welfarism. But that would be a much less picturesque description.

Even in the best of times, the finance sector hasn’t paid anything like as much to the state as the state has had to pay for them since the great crash. According to the IMF, British taxpayers have shelled out £289bn in “direct upfront financing” to prop up the banks since 2008. Add in the various government loans and underwriting, and taxpayers are on the hook for £1.19tn. Seen that way the City looks less like a goose that lays golden eggs, and more like an unruly pigeon that leaves one hell of a mess for others to clear up.

Ah, but what about lending? After all, this is why we have banks in the first place: to channel money to productive industries. The Cresc team looked at Bank of England figures on bank and building society loans and found that at the height of the bubble in 2007, around 40% or more of all bank and building society lending was on residential or commercial property. Another 25% of all bank lending went to financial intermediaries. In other words, about two-thirds of all bank lending in 2007 went to pumping up the bubble.

This doesn’t look like a hard-working part of an economy humming along: it’s nothing less than epic capitalist onanism.

If the statistics don’t support the arguments for the City’s pre-eminence, the public don’t either. In 1983, 90% of the public agreed that banks in Britain were well run, according to the British Social Attitudes survey. By 2009, that had plunged to 19%.

In other words, both the evidence and the voters are against investment bankers. So why do the politicians cling on to them?

Part of the answer is financial. Bankers used the boom to buy themselves influence – so that, according to the Bureau of Investigative Journalism, the City now provides half of all Tory party funds. That is up from just 25% only five years ago.

Another part must be cultural. Running this government are two sons of bankers. Cameron’s father was a stockbroker, Clegg’s is still chairman of United Trust Bank (and famously helped his son get some work experience). For its part, Labour spent so long outsourcing all economic thinking to Gordon Brown and Ed Balls that it has long lost the ability to argue against the orthodoxy of giving the City what it wants.

In a poorer country, the cosiness of relations between bankers and politicians would be scrutinised by an official from the World Bank and disdainfully pronounced as pure cronyism. In Britain, we need to come up with a new word for this type of dysfunctional capitalism – where banks neither lend nor pay their way in taxes, yet retain a stranglehold on policy-making. We could try bankocracy: ruled by the banks, for the banks.

What are the results of bankocracy? It means that the main figures arguing for a Robin Hood tax are the Archbishop of Canterbury Rowan Williams and Bill Nighy. It means that opposition to the rule of banks isn’t found in Westminster, but in tents outside St Paul’s or among a few grizzled academics and NGO-hands – with no political vehicle to carry them. Meanwhile, the politicians declare that the national interest of Britain can be defined by what suits one square mile of it.

From:

Britain is ruled by the banks, for the banks | Aditya Chakrabortty | Comment is free | The Guardian.

What on earth is wrong with the people who run our TV and radio news programmes? Ideology, I suppose, is what’s ‘wrong’.

Still, it can be quite infuriating to listen to the same discredited perspective being peddled day after day on the networks. We should certainly challenge it: if we do not we cede the space to the right and the centre right without a fight. Hegemony needs to be met by contestation, even if that’s only at the level of writing or calling these programmes. It’s not enough, of course, but better than passively letting them repeat the old tired rigmarole.

Take the discussion on this morning’s  BBC Radio 4 ‘Today’ programme about the role of  banks etc, with  Geoff Mulgan, Richard Lambert and Gillian Tett, ‘chaired’ by John Humphreys.

I was pleased that a discussion of this kind was initiated but disappointed that again we heard the same voices. This is nothing against the contributors per se, and I was impressed in particular by  Gillian Tett’s remarks. But really, can’t they do better than this? The  Today programme seems to think the most radical outlooks on the  current financial crisis are those of (say) Martin Wolf and Will  Hutton, plus Gillian Tett or Blairites like Mulgan. So that’s the FT, the Economist and the right of the Labour Party sorted (and Lambert is ex head of the CBI). Not exactly a broad swathe of opinion, is it? Unsurprisingly, the most radical of the bunch was Gillian Tett, who at least seems capable of critical thought. Hardly radical, though.

In this they fail as a news gatherer, and they tend to reinforce a  supposed consensus that is actually not shared by many of us. And that is  why phenomena such as the Occupy movement are so hard for them to  evaluate. Why not interview David Harvey or Wolfgang Streek, for  instance? both are noted academics who have recently written on the current  events and who don’t share the perspective we keep hearing on ‘Today’.  Vox pop outside St Paul’s won’t do: they need to include a broader  tranche of informed opinion in their daily diet of comment and analysis. This has to include radical voices – and ‘radical’ here ought not to mean just  ‘mildly Keynesian’.

If they did that, maybe John Humphrey’s opening remarks today about  trade unions ‘ruling the roost’ until they were ‘dealt with’ would  have been challenged by someone. If they don’t, they will be seen as  increasingly irrelevant to the concerns of large swathes of the  population. No wonder the blog and the tweet are replacing the old channels of news and information.

This ought to matter to them, so we need to say it to them, as part of the struggle to get different views heard. I don’t write this because I naively suppose that this issue of who gets airtime hasn’t come to the attention of the production team at Today, but rather that we must not let this kind of thing go by without any response. ‘Today’ still has a big audience, and that matters.

So I urge you: write or phone them. Don’t let them claim no one objected.

Government ministers are lying -yes lying if/when they claim that public sector pensions aren’t affordable as undisputed figures indicate the opposite (they are shrinking as % of GDP).

They also lie if they claim these figures are projections based on their newest proposals – they aren’t; they are based on the deal made 5 years ago.

They also lie if they claim lowest earners would be better off under their proposals: easily refuted by going on their  website and using THEIR calculator.

They want us to work longer, pay more in, take a pay freeze,  lose 700,000 jobs.

The extra 3% they want from public sector workers  is effectively a pay cut; the money will not be ring fenced to go into pensions, but rather straight to the Treasury.

And the idea that we should accept this because private sector pensions are often even worse is beyond contempt.

Meanwhile the government opposes a Tobin (‘Robin Hood’) tax on financial transactions and won’t go after tax avoidance and evasion in any serious way. How serious can they be when they are laying off thousands of tax inspectors?

And a serious bank levy on the people who caused this in the first place? as far off as ever.

Finally: don’t kid yourself that after economic recovery, if it ever comes, they will repair the hole they want to blow in the public sector. This is permanent damage they want to do, for transparently ideological reasons. It’s called ‘neoliberalism’.

We have to fight them.

 

Average bonuses for directors of FTSE 350 companies have risen by 187% since 2002, without a corresponding rise in share prices, new research suggests.

The High Pay Commission said on Monday that average annual bonuses were worth 48% of salary in 2002, but are now 90%.

Commission chairman Deborah Hargreaves said it was a “myth” that big bonuses meant companies performed better.

Read more at:

BBC News – Bosses’ bonuses up by 187% since 2002, report suggests.

Pay for the directors of the UK’s top businesses rose 50% over the past year, a pay research company has said.

Incomes Data Services (IDS) said this took the average pay for a director of a FTSE 100 company to just short of £2.7m.

The rise, covering salary, benefits and bonuses, was higher than that recorded for the main person running the company, the chief executive.

Their pay rose by 43% over the year, according to the study.

A statement from IDS said that that figure suggested that “executive largesse is evenly spread across the board”.

Base salaries rose by just 3.2%, although that was above the median rise recorded by IDS this week for average pay settlements of 2.6% for private sector workers.

The latest consumer price inflation figures showed inflation at 5.2%.

Directors’ bonus payments, on average, rose by 23% from £737,000 in 2010 to £906,000 this year.

The Unite union has called executive pay “obscene” and has called for shareholders to be given more power to hold directors accountable.

The union’s general secretary, Len McCluskey said: “The Government should strongly consider giving shareholders greater legal powers to question and curb these excessive remuneration packages.

“Institutional shareholders need to exercise much greater scrutiny and control of directors’ pay and bonuses.

“It’s obscene and it shows that the City has learnt nothing during the financial troubles of the last four years.”

‘Complex’ packages

“I think it is very hard to justify these sorts of pay increases,” Deborah Hargreaves, chair of the High Pay Commission, told BBC Radio 4′s Today programme.

“When you think the average pay is going up 1% or 2%, it’s not even meeting price rises. These pay packages have become so complex that executives don’t even understand it themselves.

“We have got a closed shop here and someone needs to break it open.”

Brendan Barber, the TUC’s general secretary, said: “Top directors have used tough business conditions to impose real wage cuts, which have hit people’s living standards and the wider economy, but have shown no such restraint with their own pay.

“Reform should start with employee representation on remuneration committees, which would give directors a much-needed sense of reality.”

Steve Tatton, who edited the IDS report, said: “Britain’s economy may be struggling to return to pre-recession levels of output, but the same cannot be said of FTSE 100 directors’ remuneration.”

Mr Tatton said that while closer scrutiny of pay awards was expected in future, “remuneration committees will have to make sure that they are able to provide full and thorough justifications for the bonuses awarded.”

From:

BBC News – Directors’ pay rose 50% in past year, says IDS report.

Much has already been said about the riots already, so I’ll keep this brief. What concerns me is the poor quality of much of the comment by the Mediocracy (very much including the BBC), and the politicians who trotted  into the studios in the aftermath of the ‘disturbances’.  The thing that struck me most about the coverage and the commentary was the sheer crudity of the ‘analysis’. Essentially, what seemed to go wrong was the failure of commentators to hold more than one thought in their heads at a time, and then  link those thoughts. It’s not that this is particularly hard to do; rather, that they  can’t or won’t do it. Is this a matter of ability or ideology? You decide.

(1) Reasons and Causes.

Why riot? why loot? A lot of the immediate comment, during and immediately after the riots described the rioters as ‘mindless’. This puzzles me. If a person smashes a window and steals a plasma screen TV he has a reason. He isn’t mindless (or feral: another way of making him appear subhuman). You might not like his reason, and you may think him a nasty piece of work, but there you are. He wants the TV. At this point you may make your moral judgments. If, however, you stop at that point you’ve not done a good job of grasping what is going on.

If you look at the areas in which the riots predominated, they were  mainly in areas of high unemployment. If you look at the profiles of those arrested, you find a very high number of unemployed, indeed of NEETS (not in  employment,  education or training). Rather few members of the Oxford Bullingdon club seem to have been involved in these outbursts of violence, at least this time. So clearly something is going on here that involves more than what is ‘in the head’ of the window smasher. But just because he can’t necessarily say what that something  is doesn’t mean it isn’t relevant.

Finding a correlation between deprivation and behaviour isn’t the same as establishing cause, but it doesn’t take a PhD in Sociology to see that in the mix, somewhere, is a problem emanating from the kind of society we have. And in case we’ve forgotten, this society is one with the lowest social mobility since 1961 and levels of inequality that are not only worse than most of our comparable neighbours but getting worse. So we have the reason the rioter might give and the possible causes of the phenomenon. One doesn’t cancel out the other; both need to be kept in mind.

(2) Ethics, Politics and the Economy.

When you praise and blame you assume agency (you think the person could have done otherwise). So you blame the thief for smashing the window and stealing the TV. Quite right. But this won’t do if you want to have an approximately adult conversation about why and how the riots erupted in August 2011 here, and not in say, Berlin or Prague. If you do think about it, you are going to have to consider  the politics of the situation, and that will lead you, I submit, to confronting the neoliberal policies that both main parties have been consciously pursuing for the last 30 years or more: debt fuelled consumerism, the denigration of public service, the marketisation of huge swathes of social life and yes, no getting away from it, the massive increase in inequality. These neoliberal  policies have been embraced with a special enthusiasm by the current lot in power, and it is an irony that has been commented on before that just as neoliberal economics start to send the world economy over the edge of doom, so the neoliberal scythe gets sliced  into whats left of our social services, and all in the name of deficit reduction. Of course, you may not want to think about it, but if not, I suggest you avoid talking about Mindless Youth on TV or in the newspapers as people like our Home Secretary Theresa May did.

What are those social services for? Primarily, they direct resources from the community towards those things individuals cannot be expected to provide for themselves (healthcare, education, pensions etc). The theory was supposed to be that the better off in the community ought to pay proportionately more than the less well off towards these services via something called progressive taxation. Some things are more important than individual enrichment. This includes the recognition that we live together in one society, and then acting on that insight through the elementary social solidarity represented by redistribution from the haves to the have-nots. Now this principle has been challenged, and even breached. The result is greater social inequality, and the result of that is social problems in almost all areas of of life (as Wilkinson and Pickett documented in their book The Spirit Level. There’s plenty of evidence in that book that inequality makes life worse for everyone, and if you care about evidence, you’ll find it laid out there). So we get, for example, the obscene outcome in which a hedge-fund manger ends up paying proportionately  less tax than his office cleaner.

Hegel noted that in a community in which the market ruled, one would get winners and losers, and that some of those losers would feel themselves to be excluded from society. They might come to constitute  a rabble, as he put it (there is no mention of ‘feral’  that I can find in the Philosophy of Right).  Now it is surely not beyond the wit of even our politicians to connect  social and economic policies and the actions some people end up performing. You don’t have to be Hegel to be able to do this, although it seems that you do have to be more intelligent than Theresa May, MP.

So while an explanation couched in terms of the  reasons for an action aren’t identical to  one that considers the causes of actions it ought to be possible to grasp that there are connections between them. Indeed, they might be be describing the same phenomenon from different ends, as it were. Create an alienated, commodity driven environment in which people are goaded to buy more stuff and simultaneously denied the means to acquire it legally and you might end up with the guy who smashes a window and takes the TV because he can.

Ten economic facts that every person opposed to Osbornomics should know

2. Britain, however, has outgrown every economy in the G7 between 1990 and 2010

3. The result of this is that Debt Interest as a portion of GDP is actually lower today than it was in 1997.

4. In fact, Government spending on servicing the debt is 30% lower today than it was under Major.

5. Tory debt interest would be £41.3bn today thus Labour have added £8.7bn to Major’s debt interest.

6. By bailing out the banks and investing in a Fiscal Stimulus Package, Darling got the economy growing again

7. Following the recovery from 2009 tax revenue is to soar by an expected £93billion in 2011

8. The deficit has shrunk year on year since its projected peak of £175billion in 2009. 

9. From a forecast [2009-10] peak of £175bn the deficit is set to finish this financial year at £121bn [2011-2]

10. Osborne will succeed in cutting the deficit not through cuts but only by taxation, since cuts destroy growth

Labour need to make the above points loud and often if they are to change the narrative established by George Osborne and the right wing press since 2009.

You don’t have to be a Labour Party member or supporter, or even a Keynesian to see that the case against the Tory/Liberal line on the economy has to be made much more clearly and effectively that it is now. And that is not enough: the case for a worked out alternative strategy has to be articulated, one that doesn’t sound like a slightly milder version of ‘Osbornomics’. What we have at the moment resembles the scenario described by Naomi Klein in her book and film ‘The Shock Doctrine’: the manipulation of a crisis as a way of launching a far reaching neoliberal onslaught on ordinary people like us, and on the public services we rely on. At the moment they are getting away with it. This must change.

I got this from:

The Green Benches: Ten economic facts that every person opposed to Osbornomics should know.

Many thanks to Green Benches.

You would have had to have had your head buried in the sand to have missed the buzz that has been growing concerning The People’s Supermarket recently. This supermarket takes aim at the ruthlessness and soullessness of the big supermarkets in attempting to create a local supermarket that sources its produce ethically.

Chris Horner, a colleague and friend of mine, is responsible for bringing The People’s Supermarket to my attention. He is a member and thus a worker at the supermarket in Lamb’s Conduit Street, Holborn, London. He agreed to take part in a Friday Five Questions interview for Ayohcee about his involvement in the project.

It must be stressed that his views are his own and don’t necessarily reflect the views of The People’s Supermarket.

Ayohcee: The People’s Supermarket (TPS) has risen to prominence over the last month or so, thanks in part to the Channel 4 documentary about it. What’s all the fuss about?

1. We live in a global context, and the questions of sourcing and paying for our produce fairly must be addressed –TPS tries to work with suppliers here and abroad in a way which keeps them fairly and sustainably in a partnership with the retailer/consumer.
2. Food waste is appalling. TPS acts to avoid that; part of what it does here educates and shows others what can be done. It’s an ethical, political and environmental scandal to chuck the amount of perfectly good food away that the typical retailer and consumer does every day.
3. Being active in making things better is good. Co-ops are good! Taking responsibility for ones own locality and the way one’s quality of life develops is a positive thing. TPS tends to have a subtle ‘educative’ effect on all those who work there – we decide together what we’ll do and then we do it – ourselves. That changes people.

From: (via) ayohcee: Friday Five Questions: Chris Horner, member of The People’s Supermarket.

An employee of the New Fabris factory, in Chatellerault, central France, walks next to a fire in front of the plant, in 2009, after 366 laid-off workers occupied the factory and threatened to blow it up unless they receive a bigger pay-off. 'We want a bonus' is written on the wall in the background. Photograph: Alain Jocard/AFP/Getty Images

The end of 2010 brought renewed Washington rhetoric, media hype and academic me-too declarations about the US economy “recovering”. We’ve heard them before since the crisis hit in 2007. They always proved wrong.

But recovery noises are useful for some. Republicans claim that government should do less since recovery is underway (of course, for them, government action is always counterproductive). Likewise, Republicans and many centrist Democrats claim that income redistribution policies are no longer needed because recovery means growth, which means everyone gets a bigger piece of an expanding economic pie. Recovery hype also helps the Obama administration to claim that its policies succeeded.

Yet, this is more fantasy than reality. After all, the nearly 20% of the US labour force that became unemployed or underemployed in 2009 remains so as we enter 2011. No recovery there. Worse still, a quarter of those who found work since the crisis began only got temp jobs without benefits. Second, foreclosure actions by banks – including those who got most of the government’s bailouts – continue to eject millions from their homes. No recovery there, either (except for the bigger banks).

Third, consider why the Federal Reserve decided last month to create another $600bn of new money, and why Congress and the president agreed in December on an additional fiscal stimulus (extending Bush’s tax cuts, reducing social security withholding for 2011, etc). They took those steps because all the previous bailouts, monetary easing, tax cuts and government fiscal stimulus expenditures had failed to end this crisis. Those immune to hype recognise that more of the same policies that failed before might do so again.

More importantly, the recovery noise distracts from a more basic failure of our economic system: its fundamental instability. Recurring “downturns” – which neither private nor government actions have ever managed to prevent – impose massive costs on society. They plunge millions of effective, productive workers into unemployment and resulting personal, family and community disasters. Governments tap the collective purses of their nations chiefly to rescue just those private capitalists who were major contributors to the crisis and whose wealth insulates them from the crisis’ worst effects.

Then, governments turn on their people to impose austerities (cutbacks in social programmes, social security, etc) needed to restore government budgets busted by that rescue’s huge costs. Like someone convicted of murdering his parents who demands leniency as an orphan, corporate America demands conservative government and austerity on the grounds of excessive budget deficits. Mainstream media and politicians take those corporate demands seriously, reminding us who controls whom.

The last half-century suggests a very different analysis of the crisis and a correspondingly different response for 2011. Since the early 1970s, workers’ wage increases came to an end, their benefits and job security shrank and government supports for average people came under conservative attack. These increasing burdens were justified as absolutely necessary to enable more investment and, therefore, greater economic growth. A bigger economic pie would then provide more for everyone including workers.

In fact, growth in the US and Europe steadily slowed over those years (see graph below by University of Rome Professor Pasquale Tridico):


Average growth of GDP per capita in US and Europe, 1961-2009. Source: Eurostat

While workers’ conditions deteriorated, capitalist surpluses and profits soared and stock markets boomed. Income and wealth were redistributed from poor and middle to the rich. But the promised results never materialised: neither more investment, nor greater economic growth. As the graph shows, growth actually slowed and then the whole system imploded into a catastrophic crisis.

Today’s recovery noises accompany government actions that will repeat in 2011 more of the bailouts, monetary easing and fiscal stimuli that have proved insufficient since 2007. None of those actions dare to question, let alone address, how capitalism redistributed income and wealth in the decades leading to the crisis or how that redistribution contributed to the crisis.

The recovery being planned and hyped aims at a return to the US economy before it crashed. However, that capitalism was like a train hurtling toward the stone wall of crisis. To return to a pre-crisis capitalism risks resuming our places on a similar train heading for a similar crash.

Republican and Democratic politicians alike dare not link this crisis to an economic system that has never stopped producing those “downturns” that regularly cost so many millions of jobs, wasted resources, lost outputs and injured lives. For them, the economic system is beyond questioning. They bow before the unspoken taboo: never criticise the system upon which your careers depend.

Thus, this crisis and its burdens will continue until capitalists see sufficiently attractive opportunities for profit to resume investing and hiring people in the US as well as elsewhere. The freedoms of US capitalists to gain immense government supports as needed, and yet to invest only when, where and how they can maximise their private profits are paramount: the first obligations of government. The freedoms from want and insecurity for the US people remain a distant second priority – until mass political action changes that.

In good times, as in bad, capitalism is a system that places a small minority of people with one set of goals (profits, disproportionally high incomes, dominant political power, etc) in the positions to receive and distribute enormous wealth. Those people include the boards of directors that gather the net revenues of business into their hands and decide, together with the major shareholders in those businesses, how to distribute that wealth. Not surprisingly, they use it to achieve their goals and to make sure government secures their positions.

No Keynesian monetary or fiscal policies address, let alone change, how that system works and who uses its wealth to what ends. No reforms or regulations passed or even proposed under Obama would do that either. To avoid the instability of capitalism and its huge social costs requires changing the system. That remains the basic issue for a new year and a new generation. Will they break today’s version of a dangerous old taboo: never question the existing system?

• For more information about Richard Wolff’s work, visit his website

via: 2011: calling time on capitalism | Richard Wolff