Crisis? What Crisis? part 4 – a progressive unity against Brexit

brexit market imageIn response to Brexit a call has gone up for a progressive alliance of the Labour Party, Greens, Liberals, SNP and Plaid Cymru.  However, not only is such a call fixated on parliamentary numbers, which after all isn’t an inconsequential consideration, but more importantly it is politically illiterate and dangerous.

The Liberal Democrats are fresh from giving a leg up to the Tories through the ConDem coalition and partook in the harshest imposition of austerity that almost everyone seems to believe contributed much to the Brexit vote among workers.

The Greens are in open competition with Labour and cause many people no end of confusion about their apparently more radical policies on certain issues.  This confusion arises in those who have no understanding of politics as fundamentally constructed by class and by some on the radical left who have no organic relationship to the working class but substitute a series of single issue campaigns for this in order to give them a milieu in which to operate.  So long have they been doing this that some then come to judge the Greens on their purported position on these single issues they spend their political lives pursuing.

Marxists may call the Green movement petty bourgeois, which may seem insulting or simply untrue of the class background of many Green members and supporters but there is no reason for believing that they are any different than, for example, the Irish Greens.  When the Irish Green Party voted at their conference to enter Government with the main capitalist party Fianna Fail they cried, and then they cried again when they got hammered at the following election.  In between they bailed out the bankers when the banking system went bust, shifted the banks debts on to the Irish people for a couple of generations and inflicted damaging austerity on the Irish people to pay for it.  When it comes to more than single issues – when it comes to the state and the whole of society – the class nature of a party’s politics matters.

The SNP and Plaid Cymru are nationalists, and lest we forget it, it is nationalism which was and is the overarching ideology of Brexit.  Of course Scottish and Welsh nationalists will claim that their nationalism is not like that of the Tories or UKIP but then everyone thinks their nationalism is different from everyone else’s.  In the last analysis the only justification for opposing Brexit is that of workers unity across nations, of which the EU is the capitalist version but which forms the existing framework within which such unity is best advanced.  Nationalism inevitably puts forward the view that there is a national interest that comes first.  Such a view is compatible with membership of the EU but not with the interests and policies socialists seek to pursue.

The strength of nationalism in Scotland weakens the Labour Party and has strengthened the Tories who face a reduced threat from Labour without its phalanx of Scottish MPs.  This is as much a result of the rottenness of Labour as it is of nationalist strength but much of the Scottish left has run away from the task of fighting the former in order to facilitate building the latter.  Now that the Labour Party cannot be slagged off as ‘red Tories’ the role of nationalism is clearer and the role of left nationalism in preventing workers’ unity more evident and also more reprehensible.

This Left, which includes its English based supporters, has not stopped to ponder why a so-called move to the left in Scotland has led to an SNP administration supported by Rupert Murdoch while Jeremy Corbyn receives ridicule and scorn from Murdoch’s newspapers.  Yet, having just read the free book from Verso press, some of the New Left Review cheerleaders of this nationalist left are calling for Corbyn to follow the Scottish example!  In this they compare the SNP’s opposition to Trident favourably with the split in the Labour Party (mostly in parliament) but ignore the fact that the SNP want to shift Trident doon the road and Corbyn wants to scrap it.

The current case for unity amongst all British workers against Brexit and the xenophobia it entails could not be stronger and any left case for nationalist division could hardly be weaker.  From being in some sort of progressive vanguard even some nationalist supporters now seem to be saying the opposite – that Scottish independence is justified by it lagging behind English radicalisation (see Cat Boyd in the latest issue of ‘Red Pepper’).  It would appear, sitting from Ireland, that some would rather be failed Scottish radicals than part of a more successful British movement.  But this again is perfectly in tune with the left nationalist view that workers in Scotland and those in England & Wales have separate interests that cannot be reconciled, except perhaps with a good border between them.

A second approach to the Brexit vote is, in effect, to say – who cares about the answer, what’s more important is the pain.  So the alienation of marginalised and excluded working class communities typically placed in North-East England has to be understood and not condemned and we must seek to relate to these workers.  In anything I’ve read it’s never very clear what it is that is different in what socialists should be saying to these voters to what it should be saying to the millions of workers who voted Remain.  The latter have been pilloried as belonging to some sort of cosmopolitan elite cosseted in decent jobs who can’t be identified as an object of a sympathy that verges on pity.  In fact the only part of the labour movement calling for a different approach to these workers is the Labour Party right wing who hypocritically castigated Corbyn for not giving 10 out of 10 to the EU but now want increased immigration controls that panders to the worst prejudices of Brexit voters.

Supporters of this approach, who call on socialists not to condemn workers who voted for Brexit, take their own moralistic view, seeing them as somehow more authentic than others.  It is on occasions like this that the Marxist approach of not moralising about politics at all means you don’t fall into either condemning or feeling sorry for them.  It should of course be easier to do this when it is appreciated that these workers are not solely to blame for voting Brexit and their role has generally been exaggerated.

Using the definition of class that categories us into A,B C1, C2, D and E one blogger has calculated that the majority of Leave voters were A, B C1 and while C2, D and E were more likely than others to vote Leave they were also more likely not to vote at all.  This writer also argues that if C2, D and E working class EU citizens had been allowed to vote the result could easily have been different.

This blog here makes the same case – that “while C2, D and E voters (or the poorest classification of respondents) voted in greater numbers in favour of Leave than their ABC1 counterparts – 64% to 47% – so-called ‘middle and upper class’ (or ABC1) voters provided 10,349,804 (59.4%) of the final 17,427,384 votes for Leave.”  In other words “a huge amount of C2DE voters very likely did not even show up at the poll, whether from disbelief or indifference—upwards of 48%, according to the projections. And when weighted for equalised proportional turnout (72%) for all social ‘grades’, the numbers seem to “confirm these two realities at once—with 46.35% of ABC1 and 53.7% C2DE voting for Leave, we see both the greater number of ‘working class’ votes for Leave and their incredible proximity to votes from higher echelons .  . . That is to say, while there has been much hemming and hawing about the retrogression of ‘working class values’, all things considered, the result actually owed itself to a cross-class alliance for the ages.”

And this is true whether one accepts, or more accurately, does not accept the objectivity and truthfulness of this way of categorising the population.  Of course the argument that the Remain vote was also “a cross-class alliance” can be made.  But the starting point for determining one’s position on the referendum is, what is the nature of the issue and how can working class interests best be defended?  Taking an independent view of the question doesn’t mean ignoring what other forces are doing but it does mean identifying the working class’s independent interests.

There is also the rather more obvious fact that the cross-class alliance of the Leave campaign was led by UKIP and the most right wing elements of the Tory party who were behind a xenophobic, racist and anti-immigrant campaign.  On the other hand Jeremy Corbyn explicitly refused to become part of an inclusive campaign for Remain consisting of Tories and Liberal Democrats.  For his trouble he was variously ignored or pilloried by the media and slaughtered by the majority of Labour MPs when defeat gave them an opportunity to use this as an excuse for their coup against him.

The essential point that has been made however is firstly that many workers did vote for Brexit, from reactionary motives, and this is a problem.  If like me you come from the North of Ireland you will have absolutely no difficulty in accepting and recognising that many workers are reactionary. The problem in Britain isn’t new there either.  Secondly, the question is, with what social force do you address this?  And the answer is by building upon those opposed to xenophobia and racism who have rejected appeals to nationalism.  In other words the working class component of the Remain voters.

Unfortunately some on the left have decided that Brexit is not so much a problem as an opportunity and believe that what matters is not the reactionary politics that motivated workers to vote on xenophobic lines but that these workers are alienated and oppressed.  In other words, the problem is more important than the solution and the question is more important than the answer.  Their saving grace, if this is actually the case, is that this doesn’t seem to mean very much in terms of their political approach – they continue to peddle the same politics as before.

In the next post I will identify some mistaken views that seek to relate to those workers who voted Brexit – as if they should be the starting point of an alternative.

Back to part 3

Crisis? What Crisis? part 3 – down, down, deeper and down

Sterling as a picture of the future

Sterling as a picture of the future

Tory lies over Brexit and the sunlit vistas of UK sovereignty that lie ahead are nothing new.  Uncriticised by the Tory press and a BBC that is both scared of them and shares their broad establishment understanding of society, they have been able to present themselves as the only trusted stewards of a successful economy, with only its fruits perhaps needing some fairer distribution, now that they are the workers’ friend.

But the Tories have lied to themselves and everyone else that the British economy is in rude health, especially when compared to the sclerosis of the rest of Europe.  They quote statistics showing that real Gross Domestic Product has grown faster in Britain than in the bigger EU economies such as Germany, France and Italy.  What they don’t say is that GDP per person was no higher in 2014 than 2007 and that the British are no richer compared to the EU 15 average now than they were 15 years ago.  In fact Britain lags behind Spain and France on this measure.

In order for Britain to grow it has needed to increase its population and workforce, including through immigration, and make the working class work longer hours while reducing their wages, which declined by 10% between 2008 and 2014.  Productivity relative to the EU average has fallen to 90% so that output per hour is 25% below French or German levels.  In only one other region apart from London is GDP per head in excess of the EU average.  This means only 27% of Britons are wealthier than the EU average; but we are expected to believe that the EU is holding Britain back.

The Tories (and Blair before them) have relied on a high debt, low wage and low skilled economy that compensated for poor productivity by increased exploitation, symbolised by zero hours contracts on the one hand and long working hours on the other.  Such a model has no need for a comprehensive education system that can provide a highly educated and skilled workforce for employment across a wide number of economic sectors.

Increased exploitation of labour substitutes for increased capitalist investment in technology, which is mirrored in less state investment in infrastructure.   One example of the result of this is the threat of the lights going out because of a shrinking margin of spare power generation capacity.  This in turn leads to huge subsidies to foreign states to supply nuclear power that may keep the lights on – in the shape of Hinkley Point C and the French and Chinese state companies involved in its development. The lack of infrastructure puts a further drag on the development of productivity and the growth of living standards.

Brexit is being sold as the opportunity to improve this far from outstanding economy but leaving the EU will discourage the foreign investment that helps bail out Britain’s chronic deficit in trade.  Exit from the EU will diminish the financial sector and its acquisition of profits from around the world as bankers already threaten to pull out.  Trade will face new barriers and even old Tories like Michael Heseltine have laughed that there are new markets that no one has so far spotted to replace those that will be lost in Europe.

Devaluation of sterling will hit peoples’ living standards, reducing the domestic market just as foreign markets become harder to enter, while lower economic activity will reduce the capacity of the state to spend on infrastructure. A poorer Britain with reduced foreign earnings will have pressure placed on its interest rates, which will rise to cover the cost of financing a state whose currency is falling.

This risk was made clear by a market analyst quoted in the ‘Financial Times’ as saying that sterling is behaving more like an emerging markets currency and that there is no idea what its true level is. If a foreigner lent £100 to Britain, costing them say $120 in their own currency, it will mean that when she’s paid back the pounds she receives could be worth only $100.  So how much more interest on the loan would she require to protect herself against this risk?  And what sort of investment could warrant borrowing at this rate of interest?

Britain has created an economic model based on sweating its workforce.  Karl Marx noted the limits to exploitation by lengthening the working day 150 years ago, limits again being exposed today by Britain’s declining productivity.  And anyone believing that the Tories will move to create a high wage economy that involves upgrading the skills and talents of the workforce will have to explain the latest genius idea of promoting grammar schools, which relies on improving the education of a few by shiting on the rest.

An economic logic will apply to Brexit regardless of whether the Tory party realises it or not just as we have already seen its political logic unfold despite what some might have believed it was all about.  In last Monday’s ‘Financial Times’ some ‘liberal’ Brexit supports complained that they wanted an ‘open’ Brexit and not the nasty Tory variety.  But this is just as innocent of reality as the supporters of a ‘left’ exit – Lexit – thinking that a decisive move to national capitalism could be anything other than reactionary.

The economic logic of Brexit suggests increased unequal competition with other much larger state formations, such as the EU and the US, not to mention China, a la Hinkley Point C.  One weapon of the smaller and weaker is a race to the bottom with reduced corporate taxation as one example, already signalled by the late chancellor George Osborne, but this is not a credible strategy away from the current model.

There are therefore no grounds for believing that an interventionist state acting on behalf of workers will arise from any change in approach by the Tories.  However it is not excluded that the inevitable crisis that Brexit will induce could give rise to a change in direction to a more interventionist approach in order, as we have said in the previous post, to allow “a Tory government (to) save capitalism from itself.”

Unfortunately the Tories have tied themselves to those sections of the electorate least supportive of this approach; those who support lower taxes and a less interventionist state, unless its intervention is into other peoples’ countries.  The best hope of such an outcome is the influence of those sections of British big business that are tied to the Tories who do provide a constituency for such an approach.

However the weakness of a stand-alone Britain doesn’t help such change.  So for example, it is reported that the Tories may be thinking of devising restrictions on foreign investment, which had more potential within the EU than outside, but this idea will conflict with Britain’s more isolated situation and greater need for outside funding.  Their idea of increased state intervention will also be restricted by budgetary pressures arising from the weakened tax base of an ‘independent’ Britain.

As Boffy’s comment to my last post made clear, state intervention in the economy is not by definition left wing, despite much of the left’s identification of Keynesianism with socialism.  There are all manner of right wing Keynesian interventions so a Tory lurch to increased state intervention in the economy is perfectly compatible with increased authoritarian intervention by the same state with both masquerading as the workers’ friend; or more pointedly as the British workers’ friend.

The Tories newly found working class agenda, such as it is, cannot accommodate any sort of workers’ identification with their brothers and sisters beyond their own nation.   Xenophobia thus unavoidably defines the anti-working class core of the new Tory ‘left’ agenda.  This rabid xenophobia is perfectly compatible with false concerns for British workers but utterly incompatible with workers’ real interests, British or otherwise.  The Tories can feign sympathy with all sorts of working class concerns but not with its interest in solidarity across nations.  This appears most immediately in the shape of immigrant workers and, as a member of the EU, in the shape of all those workers who have moved from the EU who have now almost become hostage to the wilder delusions of the Tory right.

The centrality of workers unity was recognised by Marx long ago when he noted the two principles separating the socialists of his day from others:

“The Communists are distinguished from the other working-class parties by this only: 1. In the national struggles of the proletarians of the different countries, they point out and bring to the front the common interests of the entire proletariat, independently of all nationality. 2. In the various stages of development which the struggle of the working class against the bourgeoisie has to pass through, they always and everywhere represent the interests of the movement as a whole.”

No matter how any right wing force attempts to portray itself as the workers’ friend this is always the one area in which they can make no pretence and, in this failure, expose their true character – that they cannot accept never mind promote the identity of the interests of the workers of their own country with the interests of the workers of others.

The nationalists in Scotland in the shape of the SNP have at least temporarily succeeded in fooling many that the interests of Scottish workers are somehow radically different from those in England and Wales, although the rise of Corbynism has demonstrated that in the rest of Britain there might be more of a fight against nationalist division.  It is noteworthy that this blog draws to our attention the SNP’s approach to immigration set out in its White Paper for independence, which was a points based system, rather like that of those British nationalists like Boris Johnson.  But then nationalism is nationalism, innit?

Back to part 2

Forward to part 4

Crisis? What Crisis? part 2 – the Tories become the workers’ friend

theresaSome people might object to the view expressed in the previous post that the Tories are intent on even more drastic austerity – after all hasn’t the new Chancellor scrapped the target for achieving a budget surplus by 2020?  And as one Tory official is reported to have said – “perhaps only a Tory government can save capitalism from itself.”

And hasn’t Theresa May gone even further than this?  Hasn’t she said she will make capitalism fairer for workers, crack down on corporate greed, promote state intervention, provide for more workers’ rights and put “the power of government squarely at the service of ordinary working-class people.”  Hasn’t she criticised uncaring bosses, tax-avoiding multinationals and directors who took out “massive dividends while knowing the company pension is about to go bust”?

Yes of course, she has gone further, but none of these steps are necessary for a Tory government “to save capitalism from itself” and the chances of a Tory government putting “the power of government squarely at the service of ordinary working-class people” is zero.  So what is going on?  Is it just a case of ideology being employed, not to unconsciously blind the beholder, but consciously to blind those naive enough to believe Tory lies?

Before I answer this it is useful to make two observations. First, the language of the Tories shows how bankrupt the anti-Corbyn forces in the Labour Party are – afraid to mention class while the Tories outflank them from the left.  Just how much of a future would the Labour Party have if it stood permanently exposed on the left by a Thatcher Mark II?  What future would it have to endlessly repeat an approach symbolised by allowing cuts to disability benefits to go through only for the Tories to then scrap them?  Would the Labour right have wanted to abstain on scrapping them as well?

The second point is that this Tory rhetoric is described, by the same political commentators who got Brexit wrong, as the Tories moving against the Labour Party by ‘moving to the centre ground’.  This is almost as funny as their voting for Cameron while opposing Brexit.  Since when did promoting workers’ rights and cracking down on corporate greed, even if only verbally, been the centre ground – surely this is moving to the left?

And to answer the question – of course it’s moving to the left, and its only became the centre ground since Jeremy Corbyn arrived from Mars to become leader of that part of the British people regarded as swivel-eyed-mad-lefties by the media.  But of course it is also claimed he leads an ineffective opposition – despite him causing the ‘centre ground’ to shift leftwards.

It’s difficult to know whether this ridiculous view of the Tories’ approach is unconscious ideological self-deception – that the political battle is always fought on the centre ground –  without pausing to think just where this ground might be; but I tend to think that it’s more likely to be cover for the fact that the political commentators who write such rubbish know that it’s all Tory rhetoric without any chance of being implemented.  If the Tories have moderated austerity it is only because they fear they have to because, as we have seen, a Tory government is necessary “to save capitalism from itself”, or rather a new Tory government is necessary to save the country from the last Tory government.  But then, even the last Tory government carefully implemented austerity and extolled its virtues only to ensure it could continue as a political weapon and as an economic policy option that fitted an ideological agenda.  They were well aware, or at least some of them were, of the limits of a policy that involved bleeding the patient to death.

The case for this new Tory tilt to the left being a conscious attempt to blind those naive enough to believe Tory lies is supported for two reasons.  First, a ‘sovereign’ UK outside the EU will slip down the global power rankings like a stone.  It will be too big to ignore but too small to decisively shift its environment to its benefit.  The EU cannot afford to indulge its delusions of greatness because it’s big enough to matter but not big enough to influence the EU to submit to its claims or demands.  Some Tories might believe it can trade with the rest of the world while turning its back on those next door – that it already has almost half its trade with – but it requires outside investment to pay its way and this can only come through modelling itself as an attractive centre for foreign investment.

To do this will not entail the reassertion of British sovereignty but will expose its weakness and expose its lack of sovereignty.  The inability of relatively small and even medium sized states to interact in the world mainly to their benefit is precisely why larger economic blocs like the EU were formed.  The world will not change its rules because the British don’t like them.  The British state will therefore become weaker with less capacity to intervene and the economy it has to intervene into will be even more in need of assistance.

to be continued

Back to part 1

Forward to part 3

Crisis? What Crisis? part 1 – blinded by ideology

cameronOne of the very few things that has made me smile in the whole Brexit debacle has been the leader writers and columnists of the financial press, including the ‘Financial Times’ and ‘The Economist’.  Brexit is almost universally regarded by these people as a disaster and some have blamed David Cameron for being a reckless gambler and bringing them to their current predicament.

Yet it is these same commentators, who represent some of the most class conscious spokespeople for capitalism, who supported the Tories in the last election and who, when they did so, supported the only people who could make this whole disaster for them possible.  It is normal for these self-regarding experts, who prize their analytical capacity and steely objectivity, to damn the Left in any of its forms for being ideologically driven but in this case it is abundantly clear that they have been blinded by the own ideology.  If Cameron gambled, they gambled on the gambler – one derivative they shouldn’t have bought.

These commentators and the markets they service are now being dragged kicking and screaming to a ‘hard’ Brexit while their Tory favourites declare, in complete stupidity, that there is no such thing as a ‘hard’ or ‘soft’ Brexit.  Not only are the Tories not pushing for as open a trade relationship as possible and selling the importance of this to their electorate, while making vaguer and vaguer promises on limiting immigration; they are doing the opposite – signalling the primary importance of halting free movement of people and acceptance of worse trade terms from the EU as a result.  The drastic restrictions on immigration floated by some Tories are also not in the interests of big capitalists, who want as wide a labour market as possible from which to hire and fire.

One of Cameron’s allies in Cabinet is supposed to have said of the referendum that “it will be all about jobs and the economy and it won’t even be close.”  Now it’s all about immigration.  Except of course that beneath the political fog lies a reality that will bite regardless – and it will still include jobs and the economy.

Not that this reality is understood by everyone on the left.  In a monumental tribute to how ideology can also blind some ‘Marxists’ to reality we can turn to the most recent considerations on Brexit from the Socialist Workers Party.

This organisation supported Brexit and thought that, if it was all for the best possible reasons, changing one letter and calling it Lexit would make a difference.

It defends, if that is actually the right word, its support for Brexit by saying this was for two reasons – “first, and as a matter of principle, we oppose the EU as an engine for imposing neoliberalism. . .” – although it doesn’t then go on to explain just how this ‘principle’ did any good.  Or how one of the most neoliberal states in the EU – Great Britain – was an alternative.

The second reason is that “Brexit would cause a major crisis for British and, to a lesser degree, world capitalism.  This latter judgement has been vindicated.”  So it would appear that the SWP is happy it called Brexit right.

Regular readers of the blog will note that this view of crisis is one that I have criticised over a number of posts, starting with this one.  It is based on a view that since capitalism will be weakened and exposed by crises, and crises provides the opportunity to overthrow capitalism, we should be all in favour of such crises because we can demonstrate that we are right to condemn capitalism and right that it must be overthrown.  Such a view starts from what is bad for the system, not what is good for the working class; from what you are against and not from what you are for; does not understand that we have had plenty of capitalist crises and will have plenty more and none of them have so far brought about socialist revolution; that for crises to be the catalyst for socialism there must be some prior conditions in existence, including the level of the working class’s social power and class consciousness.  Failing all this, the desire for capitalist crisis is just light-minded political vandalism, a million miles from working class people who do not want to be the victims of such crises.

But the SWP can’t even get this story right.  They claim that Brexit will cause a major crisis for the British and also, to a lesser extent, for world capitalism but believe that this may or may not have an impact on economic growth; in other words on the accumulation of capital and everything that goes with it – profits, wages, jobs and standard of living etc.  So we are expected to believe that Brexit will cause a major crisis but it may not have any economic impacts!

It’s as if they don’t want to admit to the consequences of their actions, in so far as they bear a tiny responsibility for Brexit, but don’t want to appear as delusional as the Tory xenophobes who claim there will be no bad economic results.  For the SWP, their light-mindedness sticks out a mile when they simply state that “the truth is that one can argue the toss about this.”  Well maybe they should have argued the toss before Brexit and told their supports just what the economic consequences of Brexit might be.

Denying reality now involves ignoring falls in the value of sterling, which increases the cost of living for workers.  The external current account deficit is running at 6 per cent, the largest since the second world war, illustrating the impact of higher import costs on workers and also the funding needs to cover it that might drive up interest rates.  On top of this we can consider the effects on jobs of disruption to trade and investment arising from reduced access to exports, dearer imported inputs and reduced foreign investment.

Once again it’s important to state that there is no point ignoring the realities of capitalism and the harmful effects on workers of its difficulties if you don’t have an alternative to defend workers’ interests when these difficulties occur.  Socialists do not declare ‘bring it on’ to capitalist crises, not least because capitalism has never lost the knack of ‘bringing it on’ all by itself.

If the working class had strong, militant union organisation ready to challenge companies making pay cuts or ready to sponsor the take-over of companies declaring redundancies then it would be in a better position to defend itself.  If the working class had developed its own cooperative, worker-owned sector and was in a position to extend its scale when capitalism suffered a setback then a major crisis might herald radical change.  But it isn’t and it faces economic dislocation with a capitalist state headed by a governing party hell-bent on increasing neoliberal policies.

to be continued

The politics of conspiracy – the case of Denis Donaldson

donaldsonI remember a number of years ago I was handing out leaflets at a Sinn Fein meeting in Conway Mill on the Falls Road in Belfast.  It was about the relatively new peace process and it would be fair to say that the leaflet was not celebratory of the new initiative.  I was outside the room, although inside the Mill complex, but since the Provos came to regard the whole of West Belfast as theirs it came as no great surprise that one of their number decided I was trespassing on their territory.  As the years have gone by, and if rumours are to be believed, this is less and less their territory and more and more their property.

I was collared (not very roughly) by a then prominent Sinn Fein councillor and pulled (not very strongly) over to another prominent Sinn Fein member, Denis Donaldson.  The councillor wanted to know from Donaldson was it not alright that I should be handing out leaflets critical of Sinn Fein but should be told to get lost.  Denis Donaldson was no more interested in me giving out leaflets than the man on the moon and couldn’t even give a full shrug of the shoulders in apparent indifference; he couldn’t either be bothered to grunt any disapproval or otherwise.

The councillor was a bit exposed so he mouthed some vague displeasure to no particular point and I meandered back to outside the door to give out the rest of the leaflets.  As a comrade of mine put it, the Provos were more tolerant of other opinions when they were less ‘political’, when they confined themselves overwhelmingly to shooting and bombing, than they were to become during the peace process.

The point of this reminiscence is that Denis Donaldson was obviously the go-to guy at the meeting who determined what (or who) was allowed, in other words from ‘the army’.  Denis Donaldson was later revealed as a long term agent of MI5 and is now dead.  He was shot after being exposed as a spy in a remote and ramshackle cottage in Donegal. The rather pathetic circumstances of his death were fitting to someone who, unlike other agents, appeared too demoralised even to run in an attempt to save himself.

Now he has become a headline again because an ex-British soldier has alleged he was shot by the Provisional IRA and not by a ‘dissident’ IRA, which had claimed responsibility.  The headlines have been made because the ex-soldier has now written a book about his activities in the north of Ireland and accuses Sinn Fein leader Gerry Adams of having sanctioned the killing.  Adams, through his lawyer, has denied it.

One of Donaldson’s notable activities was his involvement along with two other men in an alleged Sinn Fein spy ring at Stormont.  He was subsequently charged only for prosecutors to drop the charges “in the public interest.”  In such cases “the public interest” is anything but the public interest and is invariably in the state’s interest.

In the south of Ireland an inquest into his death has been delayed 20 times at the request of the Garda Síochána due to concern that a detailed journal found in Donaldson’s cottage contains information about the organisation of the republican movement and about his activity as informer and the activity of the state forces.  It’s doubtful either Sinn Fein or the British State want the contents revealed.

So we have an ex-soldier selling a book making one claim and Adams making the opposite claim.  The ex-soldier also claims that he was previously going to seek to join the IRA before then joining the British Army.  He regards himself as a republican and supports Sinn Fein today, indeed he claims he did so even when serving for the British Army in Ireland!  One can hardly think of anything more bizarre! Indeed it’s hard to think of anything less credible, except for Gerry Adams’ claim that he was never in the IRA.  So on purely a priori grounds of credibility the ex-Brit appears to come out on top.  Does it matter?

In so far as it impinges on Adams it simply reminds one of his lack of principle, unwilling and incapable of defending what was the primary dogma of republicanism – driving the British out of Ireland by armed force. After this was surrendered nothing remained sacred.  Following this betrayal there has no repentance of Gerry who has denied his movement more than three times.  Any further promises – to oppose austerity etc – are open to charges of relying on the same level of credulity necessary to accept his claims to non-membership of the IRA.

In so far as the headlines recall the murky intrigue of the ‘dirty war’ it reminds everyone who lived through it of just how dirty it was.  It was well enough known that loyalist murder survived upon the tolerance and sponsorship of the British state.  What has become clearer since the ‘end’ of the various armed ‘campaigns’ is the degree of this sponsorship.  But even more revelatory has been evidence of British penetration of the republican movement and the betrayal of genuine republican activists by agents of the British State inside the movement.

What all this history has demonstrated is that the conspiracy of the state cannot be overcome by any revolutionary conspiracy.  Irish republicanism is pathologically disposed to such conspiracy and has failed again and again.

As I near the end of reading a recent biography called ‘Karl Marx – a Nineteenth Century Life’, one consistent feature of Marx’s political activity recorded in the book was his opposition to conspiracy as the means of working class organisation.  The political activity that won Marx to socialism and which he in turn fought for again and again was the open organisation of the mass of workers, in struggle for their own objectives based on their own class interests.  It was Marx’s view that these interests are ultimately revolutionary and either the workers became conscious of them, became revolutionary, or they “were nothing.”  Freedom cannot be made behind the backs of workers.  A class cannot come to control society without being aware of its control.

A movement that perennially fails to recognise such basic truths signifies one of two things.  It is incapable of learning or its goals are essentially not about the freedom of the working class.  In both cases conspiracy becomes a favoured means of organisation since, like Gresham’s law, bad organisation drives out good.

Add to this a militaristic outlook and all the horrors of the dirty war are almost inevitable.  It is however not inevitable that sincere working class people end up in such demoralised circumstances that death is almost invited.

Ireland – the Apple Republic part 2

apple-taxWhen a left wing TD called the decision of the Irish Government to appeal the decision that gives it €13+ billion “economic treason” against the Irish public he contributed nothing to clarifying for Irish workers the role of the state, which is precisely to defend big business against that part of the Irish public made up of workers, their families and small businesses, who mostly have little choice but to pay the state’s taxes.

Much better would be a socialist campaign to rally trade union branches, community groups, tenant associations, consumer groups and campaigns etc. to put together their own proposals as to how exactly the €13 billion should be spent.  The purpose would be to demonstrate that the needs of workers should come before those of multinationals and before the reputation and interests of the state and its ‘national interest’.  A campaign that sought to unite with the workers of other countries swindled out of tax receipts by Apple would go a long way to demonstrating that this is not about a race to the bottom that pits workers of one nationality against all others.

This would also allow working people to show, not least to themselves, that they can plan effectively how to spend the money, not just for their own benefit but in the interest of all working people. Its purpose would be to begin to instil a view within them that they should take control of society themselves rather than relying on the state to do the big things for them.

On this count the view expressed by another left wing TD was much closer to the mark.  Speaking in the Dáil Paul Murphy said: “Governments in capitalist societies are but committees of the rich to manage the affairs of the capitalist class. It is as simple as that …. All of the establishment parties represent the rich and the 1 per cent. We need to be rid of this committee of the rich, and we do not need it replaced with a reconfigured committee of the rich.”

The creation of a desire for, and mechanisms to achieve, an alternative to a “reconfigured committee of the rich” is precisely the objective of this proposal for working class activity.  Only by workers increasingly taking control over their lives now can we conceive an alternative that is real, compared to reliance on a state that always has your best interests as far away from its mind as possible.  The motto of socialists in this regard should be the famous quip of the British actor David Niven who, when speaking of Errol Flynn, once said “you always knew precisely where you stood with him because he always let you down.”[i]

A wider claim in relation to the Apple judgement and reaction to it is that such sharp practices are part and parcel of a policy of neoliberalism which is past its use by date.  The exhaustion of this policy has been expressed in the crisis of financialisation in 2008 and the failure of Eurozone austerity policies and similar policies in Britain, where their effects have not been quite so damning only to the extent that the Tories have failed to follow through fully on their austerity rhetoric.  In this view we will see a return to a class compromise that was supposedly the cornerstone of Keynesian policies practiced among the most developed countries after the Second World War.  Among these will be fair taxation of capital and the rich.

Against this it might be pointed out that the Apple ruling did not uphold any principle that taxes should be levied where real economic activity takes place and that in fact it was justified through an objection to state intervention, on the grounds of unfair state aid.

In 1997, even during the neoliberal era, EU Finance Ministers set up a Code of Conduct Group on business taxation that was charged with examining unfair tax practices and in succeeding years it abolished nearly 100 tax incentives across the EU.  Today it is the OECD which is supposed to be spearheading cooperation between governments on tax avoidance and evasion but this body has been a consistent supporter of neoliberalism.

In so far as there has been a trend in corporate taxation it has been a lowering of rates:

“Corporate tax is falling, both as a share of GDP and in the global tax take. . .  Within the last 20 years, corporate tax rates have fallen from around 45% to less than 30% on average in OECD countries. And lately, with increased mobility of multinational corporations, tax competition has intensified. Thus from 2000 to 2005, 24 out of the 30 OECD countries lowered their corporate tax rates while no member economy raised its rates.”

Closing or restricting some ‘loopholes’ is perfectly consistent with lowering rates because the loopholes become less and less relevant.  Reliance on the state to produce ‘fair’ taxation is like relying on Errol Flynn.  The Apple case, precisely because of its scale, is instructive in this and other respects.

The Left has pointed out the sheer scale of the windfall that the Irish Government is potentially spurning, pointing out its hypocrisy in demanding that the Irish people must do what the EU wants when it comes to austerity, bailing out the banks, ensuring no bond-holder is left behind and their demand that water charges simply must be paid.  When it comes to standing up for the Irish people no demand from the EU is too big but when it comes to standing up for the wealthiest multinationals no claim is too disreputable, no sacrifice too large and no neck so shiny and hard.

Commentators have pointed out that €13 billion would make up the budget for the health service for a year or it could take a significant chunk off the national debt of €200 billion.  It could pay the equivalent of a few years of the unpopular Universal Social Charge or it could mean a cash donation to everyone in the state of around €2,800 each, so that a household of four would get over €11,000.  A tidy sum for everyone in the State, or a significant boost to public services.

What it isn’t, despite its unprecedented size, is fundamental or transformative.  While it is a godsend of an example of taxing the rich, which much of the Left repeatedly presents as the answer to austerity and an exemplar of socialism, the Apple example shows that it is not.  Or not if one thinks of socialism as a fundamental change to society and a transformative change in working people’s lives.

What it is, is confirmation of the point made by Karl Marx many years ago, about the limits of distributing existing income or wealth, as opposed to changing the fundamentals of the ownership of productive resources that creates and recreates, again and again, this income and wealth.

“Any distribution whatever of the means of consumption is only a consequence of the distribution of the conditions of production themselves. The latter distribution, however, is a feature of the mode of production itself.

The capitalist mode of production, for example, rests on the fact that the material conditions of production are in the hands of nonworkers in the form of property in capital and land, while the masses are only owners of the personal condition of production, of labor power. If the elements of production are so distributed, then the present-day distribution of the means of consumption results automatically. If the material conditions of production are the co-operative property of the workers themselves, then there likewise results a distribution of the means of consumption different from the present one.

Vulgar socialism (and from it in turn a section of the democrats) has taken over from the bourgeois economists the consideration and treatment of distribution as independent of the mode of production and hence the presentation of socialism as turning principally on distribution. After the real relation has long been made clear, why retrogress again?”

This is the argument that goes to the root of the nonsense peddled by Michael Noonan that taxing Apple would mean “eating the seed potatoes” or Micheál Martin that “This model supports hundreds of thousands of jobs and pays for teachers, nurses and pensions in every part of our country.  What’s more, it has done so for decades.`’

Such is the significance of any battle over Apple’s taxes.  Reliance on multinational capital and all the crap that goes with it or a cooperative economy owned and controlled by workers not just in Ireland but everywhere.

[i] Of course the parallel isn’t exact – Niven and Flynn were “pals” while the working class and the capitalist state are enemies.  It is appropriate however that the above remark was made of an immature personal relationship that has no correspondence to the political stance workers must take against the state; even if failure to take such a stance reflects an undeveloped and therefore immature failure by some Irish socialists.

Back to part 1

Ireland – the Apple Republic part 1

apple_tax_european_union_sept022016The decision of the European Commission to require the Irish State to collect €13 billion in unpaid taxes, plus a potential €6 billion in interest, from US technology company Apple made headlines across the world.  Special tax arrangements, which appear not to have applied the State’s already low 12.5% corporate tax rate, led to an effective tax rate on Apple of 0.05% in 2011 and 0.005% in 2014.  Two tax rulings in 1991 and 2007 allowed an Irish company to book Apple sales across Europe, the Middle East, Africa and India in Ireland and attribute profit on these sales to a “head office” which was stateless, had no offices, had no employees and existed only on paper.

The Irish State has decided to appeal the ruling, as has Apple itself.  Apparently preventing the State from abjectly prostrating itself in front of Apple is an assault by the European Commission on the sovereignty of a small nation.  It supposedly calls into question Irish tax policy while the Government frantically claims that the ruling affects the arrangements of no other multinational.

The appeal is to protect Ireland’s reputation although being dragged kicking and screaming to apply your own laws without discrimination, while defending cheating other countries of tax revenue, is apparently good for it.  The appeal is to prove that the Irish State is not a tax haven although a tax rate of 0.005% would appear to be a decent definition of one and defending it would appear to be open acknowledgement of it.  The Irish Government seeks to defend its prerogative to set an (in)famous corporate tax rate of 12.5% but does so by defending a 0.005% rate.

€13 billion is a big number and is the biggest judgement in the history of EU competition law – the cumulative total of all EU cases involving repayment of illegal state subsidies over the past 15 years is less than €11 billion – and it has been imposed on Apple, the world’s biggest company by market capitalisation.

One explanation given for all this is that the Irish state is dominated by imperialism and plays its natural role as an obsequious supplicant to multinational capital.  This is ok as far as it goes but it doesn’t go far enough, either in explaining or in providing the grounds for an alternative.  If we start with the latter – an anti-imperialist struggle in Ireland to make the natural resources of Ireland the property of the Irish people isn’t a solution.

For a start, the main natural resource of Ireland is its people.  In fact the growth of technology, and companies like Apple, demonstrates that it is the knowledge and skills of workers which is the key to the most dynamic sectors of the economy.  So it is harnessing the power of workers that is the key to economic development in Ireland as elsewhere, not minerals under the earth or the factory building which house the most modern production.  The machines that power this production are obsolete within years; simple ownership of them does not guarantee the future unless workers not only own them but have the knowledge and capacity to continue to revolutionise their development.

Secondly an utterly subordinate role for Irish capitalism does not explain how it allowed itself to become the vehicle for depriving other European countries of tax revenue, which the EU ruling now gives the latter an avenue to pursue.  The ruling signals that although other EU states may not have liked the Irish State’s low corporate taxation regime, it was not such a problem if it remained relatively marginal.  After all, they’re all engaged in tax competition in one form or another as one facet of inter-state and inter-company rivalry.

The problem for the Irish is that they prostrate themselves disproportionately to the US, who don’t so much mind the role of Ireland as a tax haven since it is US tax rules which permit Ireland’s role of in tax avoidance and also still allows the US to take a cut if and when the profits are eventually repatriated, perhaps as a result of some tax amnesty.

The Irish State has thus put itself in the middle of a bigger competition between EU and US capital and however much it might be “closer to Boston than Berlin” and wallow in its generations of emigrant’s ties to the old sod, the Irish State is part of the EU.  Its facilitation of US companies through an effective tax haven can only be permitted so much success before the bureaucracy of the EU proto-state decided that it had gone too far.  The Irish are therefore not just functioning as a subordinate client to imperialism but play a particular role in inter-imperialist rivalry.

And it would be wrong to characterise this role as something anomalous to the normal functioning of capitalism.  Apple had over $215 billion in cash and assets sitting outside the US as of June this year, sitting there avoiding US taxation.  It has been estimated that this is only part of $1.4 trillion sitting offshore of the US, all avoiding tax and perhaps waiting for an amnesty and a nice big deal.

It has been estimated that about half of all lending and deposits originate in Offshore Financial Centres(OFCs), about half of which are also tax havens.  The Irish State comes in 9th on the list in terms of size of tax haven, behind the Cayman Islands, which is the largest, and Switzerland and the Netherlands, which are 7th and 8th respectively.  These OFCs account for receipt of about 30% of the world’s foreign direct investment and themselves originate a similar amount.

While the tax rulings in 1991 and 2007 were based on Apple’s proposals to the Irish State, there is nothing anomalous about this either.  The British ‘Guardian’ newspaper reported last Thursday that  “the government has effectively privatised tax policymaking and enforcement . . . a working group consisting entirely of representatives from GlaxoSmithKline, Rolls-Royce, Eisai pharmaceuticals, Syngenta, Shell, Dyson, Arm, KPMG, Vectura and AND Technology Research drafted what eventually became known as the Patent Box legislation. They secured a special tax concession worth over £1bn a year for large corporations.”

The EC ruling on Apple has been described as “a watershed” and liberal Irish commentators have argued that it’s a wake-up call – that the Irish State’s success, based on attracting multinationals through tax breaks, is not a strategy that will stand the test of time.  The Irish State and its apologists claim that their tax policy is actually an industrial policy, which should be regarded as a purely national issue, but if this were so then we would expect the Cayman Islands, the Bahamas and Jersey to be thriving centres of industrial production.  Their brass plate companies and those in Ireland shown how ridiculous this rebranding exercise really is.

Some states benefit from tax competition and some suffer losses.  The EU bureaucracy attempts to set rules that do not allow discrimination against European companies as if the European Union was one capitalist state, which it isn’t (yet).  The state aid case against the Irish State is not therefore a bolt from the blue.  Since 2000 there have been 400 state aid cases and 225 cases involving tax advantages across the EU.  The Irish State, as a fully paid up member of the EU, has approved European Commission investigation of the tax arrangements of fellow EU states.

In October last year the EC concluded that Luxembourg and the Netherlands had granted tax advantages to Fiat and Starbucks respectively and in January concluded the same in relation to Belgium’s treatment of at least 35 multinationals, mainly from the EU, amounting to €700 million that should be collected.  The EC is currently investigating Luxembourg and its relations with Amazon and McDonald’s.

Capitalist states therefore both cheat and enforce laws against cheating.  They both protect big business and tax it in order to pay for itself.  Mostly however they tax small businesses and workers to provide the services and infrastructure that allow society to operate and function, one that functions and operates according to the laws of capitalist accumulation.

Forward to part 2