Monday 5 October 2015

George Osborne's Stalinist Move

Is the loss of Lord Adonis from the Labour side of the Lords really a coup for George Osborne? Not really. A tsunami failed to erupt from the impact point in the cross benches, sweeping away the shiny new works of our equally shiny new leadership. The political damage is limited because he's not terribly well-known even among Labour members, let alone the electorate. And because, as a peer, he is fundamentally unaccountable. Besides, Adonis has form for trading in party memberships; and he's more a technocrat than a politician. This is a man who likes to do things, so had Osborne made the offer to head up his new infrastructure super-quango, I would have been very surprised had Adonis refused.

What is interesting, however, is the shift Osborne has made. Remember, the Tories didn't win the election from the centre. It was won from the right. Scaremongering about the SNP and nuclear disarmament, and foreign workers and social security recipients won them their undeserved majority. Matters weren't helped by the incoherence of Labour's alternative, but we'll leave that alone for now. However, the Tories were elected on the basis of an unworkable programme. In the panic less than a month from polling day, they trailed £28bn of unfunded spending pledges, as well as pledging to leave working tax credits well alone. Simultaneously, theirs was a policy platform counter-productive to the interests of British business as a whole, and therefore inimical to their own long-term interests as a party. Instead, we had a peculiar determination of economics by politics as the machinery of state pursued policies inimical to British capitalism - such as visa restrictions on foreign students studying in the UK, the EU referendum pledge, and, of course, continued austerity - so long as the immediate electoral interests of the Tory party were served. Osborne's speech, however, is a marked turn away from this. There's still the benefit bashing and privatisation mania you would expect, but under it all something else is stirring.

Historians of Soviet Russia know that in Stalin's rise to power, he offed Trotsky and the Left Opposition by playing to the centre and the right, criticising the Trotskyists' plans to reign in the market, the rich peasants, and bureaucrats grown fat off the back of both, and their plans to rapidly industrialise the USSR. When that was done and dusted, Stalin changed tack and attacked the marketeers, the kulaks, and those - like Bukharin - who favoured some private enterprise in the economy. And to boot the industrial plan was nicked as well, thought without the Trotskyists' insistence on worker management. Osborne is no Stalin. He lacks his cunning, for starters. However, the Tories have performed a similar move. Peddle nonsense and fear that Ed Miliband's concerns about inequality and advocacy of a proper industrial plan were 1930s retro communism replete with tractor production figures and an Outer Hebridean gulag before the election. And afterwards, start appropriating the plan as well as the rhetoric. Hence we have Michael "The Red" Gove attacking the undeserving rich. "Brother" Robert Halfon seeking to organise the workers, and now the comrade chancellor announcing the use of pension funds in infrastructure projects (on top of the Adonis vehicle) and a pledge to make the 'Northern Powerhouse' something more than meaningless waffle. It's all power to the councils too, as local authorities can look forward to more autonomy - albeit at the price of further huge cuts to the local government grant as the majority of councils are forced to get by more and more on the thin gruel of business rates and council tax.

Nevertheless, it was a good speech. Not in terms of its political content. Osborne's switch still means working people and those getting by with the support of public services are in for another kicking. There was plenty of praise for the worker of Tory myth, but nothing for workers losing their jobs in Redcar - you know, real, breathing workers doing tough industrial jobs. Yet, as a piece of positioning, it is a grab for the centre - a consummation of a 'win from the right but govern from the centre' strategy to prepare Osborne's graduation to Number 10. Looked at askance, as most people tend to do, this is superficially a programme for folk who are doing okay. It was about reassuring those frightened into voting Tory that all is safe and well. Them at the margins are the ones who we're going to sort out, not you, not the decent people who do the decent thing. Who on the face of it can disagree with the infrastructure announcement? More local autonomy? More money for people in work? The fly in Osborne's economic ointment has 'tax credits' written all over it. People might agree that social security shouldn't subsidise low pay - another half-inched Milibandism - but most would be queasy seeing millions of low paid workers lose out with scant compensation from the increased minimum wage and higher tax threshold. When even The Sun are having a go, events might throw Osborne's careful political balance out of kilter. The second bit is direction of travel. We know where the Tories are going - they want to build things (the phrase, "we are the builders" appeared no less than several thousand times and, again, borrowing from Stalin, Labour are "the wreckers") and turn Britain into a Germany/Scandinavia with high wages, but without the high taxes. Overall, what Osborne has outlined today is a plan that is nowhere near as counterproductive as their previous orientation.

Interestingly, Osborne's speech is similar to his opposite number's, last week. Both outlined plans for Britain. Both emphasised fiscal responsibility. And, fundamentally, both were aimed for wider audiences. Osborne's to assure that the Tories are no longer nasty. McDonnell's to assure that full communism is not among his plans. The problem is that the chancellor's speech shows he's quite clear that the unwarranted reputation the Tories have for economic competence is something he intends to keep hold of. Taking that back and convincing those who find Osborne's comments plausible and believable is going to be a tough task.


Boffy said...

"Instead, we had a peculiar determination of economics by politics as the machinery of state pursued policies inimical to British capitalism - such as visa restrictions on foreign students studying in the UK, the EU referendum pledge, and, of course, continued austerity - so long as the immediate electoral interests of the Tory party were served."

Its important, however, to distinguish between governmental/political power and state power, however, and the limits and relations between the two.

Political/governmental power, in Tsarist Russia, at the end of the 19th century, as Lenin describes, in his debates with the Narodniks, was feudal, i.e. in the hands of the Tsar and aristocracy. But, the state power was capitalist. Lenin describes the way it was forced to act in the interests of capital.

Marx makes the same point, about the nature of the French state, whether political/governmental power was in the hands of the Monarchy, the financial and landed aristocracy, or Bonaparte.

Similarly, political/governmental power in Chile was in the hands of the working-class, who had elected the Popular Unity government of Allende, and that political power was able to act in various ways to advance the interests of workers against the interests of capital, despite the fact that the state power itself remained in the hands of capital, and continued to try to act in the interests of capital, to frustrate measures by the governmental power/ political regime that contradicted it.

Eventually, that conflict between the two took on an open characteristic, with the state power demonstrating its ultimate supremacy, by simply sweeping the governmental power away, and establishing a political regime that met its needs.

The Tories/Blair-rights policies are contradictory to the interests of capital, real capital, the socialised productive-capital which produces the surplus value upon which all else is dependent. But, their policies are not contradictory to the interests of some capitalists, i.e. those very powerful capitalists who own loanable money-capital (which takes the form of shares and bonds - fictitious capital) and whose interests are served by the blowing up of asset prices in property, stock and bond markets, which inflates their fictitious wealth.

It is of course, ultimately detrimental to them too, because the corrollary of the lack of investment in real productive-capital is slower growth, and a slower growth of the surplus value, from which the dividends and other forms of interest and rent are derived, which also means that as the bubbles are inflated, the yields on those assets also go to zero, and ultimately the bubbles themselves burst.

What we have at the moment is a global battle taking place between the interests of socialised productive-capital, and the interests of the leeches, the owners of fictitious capital, who want to see their revenues continue to rise, and their fictitious capital value rise too, whilst depriving productive-capital of the resources required to produce the surplus value upon which that depends.

It is the process that Andy Haldane at the BoE has described as "capital eating itself". In the end, it is the real productive-capital that must win that battle in the material economic world. The capitalist state must ultimately come down on the side of that productive-capital and against the interests of fictitious capital, represented by the Tories.

Obama's attack on the politics of austerity last week, was part of that struggle.

BCFG said...

Financialisation is something that 'productive' capital has engaged in itself (lapavitsas documents this). So this battle that Boffy describes is a battle 'productive' capital is having with itself, as well as 'non productive' organisations.

I don't think the left should talk much about productive and unproductive capital, or at least don't let that frame the debate. If you are going to talk about productive and unproductive then the working class must have its own definition that challenges capitalism. For example, do the plethora of useless productive commodities that fill our shelves really count as productive use of labour from the working class standpoint? Are they simply productive because they make dosh for the capitalist.

We should also get all modern and ask modern questions, for example, why do we need to expand Heathrow? What are the main drivers for increased air travel? What are the alternatives? Should we start rationing air travel? Where is the huge economic cost of air travel reflected in the price?

The other thing is this, attacking working rights is a project that unites all the ruling class. The 'productive' and 'unproductive' classes may be in a battle but on dis-empowering workers they have much common ground and common interest.