Inequality in the UK

A few weeks ago I posted an article on inequality in the UK, using a surreal article in the right-wing Daily Mail. It essentially protrayed those on £50,000 a year as "middle class" or "middle income". In fact, they were talking about people in the top 10%! Since then, I've come across a useful TUC source addressing this

There is a new report by the TUC on this issue (available here). As you would expect, Thatcherism basically hollowed out the "middle class" and while proclaiming its support for them, basically enriched the wealthy few at their expense. We went from being one of most most equal societies to being one of the most unequal. Unsurprisingly, this was at the expense of the very people who voted for the Tories...

One of their bloggers comments on this, saying "that knowledge of the full extent of inequality is very limited and that there is a widespread misunderstanding of the extent of pay and income relativities". Understatement! Interestingly, and I think it explains a lot about social stability in the face of such gringing inequality, "those on the lowest levels of pay tend to overstate their position, thinking they are slightly closer to the middle than they really are. In contrast, those on the highest levels of pay tend to understate their actual position – they think that they are relatively poorer than they really are" (hence Tory MP Alan Duncan describing his £64k salary as "rations", although which places him in the top 10% even excluding his other sources of income...)

Oh, and you should give their MiddleBritainometer a go!

To summarise, Thatcher's neo-liberalism shafted the "middle-class" wage-slaves who supported it. Rather than wealth trickling down, it flooded-up. Surprise! As was the case with Reaganomics as well:

9-9-09poverty-f3

Which is pretty staggering... and as I've suggested before, Paul Krugman's new book is good on the details and some of the reasons. Key amongst these is the smashing of the unions and the transformation of the job market to something closer to the neo-classical idea (needless to say, no suggestion was made to break-up the big companies to make that side of the economy more in-line with the neo-classical idea of a multitude of small companies).

This is unsurprising, as stressed in An Anarchist FAQ how much people get is not determined by such neo-classical myths as marginal productivity but rather class struggle and so factors (like unemployment, union militancy, and so forth) which impact on it. As recognised in practice, if denied most of the time in rehetoric and in theory, by the capitalist class (NAIRU, anyone?). Although it was admitted when the inventor of the NAIRU was awarded the so-called Nobel Prize in economics a few years back (really, it should have gone to Karl Marx as he was one of the first to keep such ideas as unemployment keeping the proles in their place at the heart of economic analysis).

Discussing the source of profit, interest and rent (namely in the exploitation of labour), it was suggested that the reason why bosses pay themselves so much is simply because they can. They are in an authority position in a hierarchical structure and, unsurprisingly enough, consider their "contribution" to be the most important and so, obviously, requiring most reward. The collapse of MG Rover shows this at work:

"A report by government-appointed inspectors will today disclose that the quartet – former MG Rover chairman John Towers, ex-vice-chairman Nick Stephenson, Peter Beale and John Edwards – each earned £9m from the ailing business during their time in control. The company's chief executive, Kevin Howe, was paid a further £5.7m.

"The men have always denied any wrongdoing and today's report will not accuse them of breaking the law."

Nope, not breaking the law. Just being bosses and monopolising the productive output of others... the only difference is that they made a mess of it.

I'll end this blog with an old post, which was written for Freedom, which suggested the workers seize the workplace and turn it into a co-operative. Which is a theme I returned to again and again, of late...

Finally, a few more comments on health care reform (as blogged about previously). Obviously, in my last contribution I failed to mention getting rid of patents and copyrights. I also should have stressed the formation of mutual aid health care in addition to pressurising the politicians. But what got me thinking about it was this surreal interview on Faux News. Be warned, though, Sean Hannity may cause you vomit or slap your head, repeatedly:

Sean Hannity really is mental... I was amazed to discover that, apparently, 70% of the British population want to dismantle the NHS... News to me. I would say that 70% want it improved, but only about 0.7% (if that) want it replaced by an American-style system. He really is pulling those figures from his big smelly arse... Oh, and we are all flocking to America to get the best health care in the world (someone should tell the Who Health Organisation, which ranked France as number 1 and America number 37!). Assuming, of course, they could afford the price of the ticket. Oh, and the costs of treatment, of course...

What is insane is the notion that people in the UK are flocking to America for private health care. Sure, most people seeking health care can simply afford to hop on a plane and pay for health care in America. Assuming that they could afford this, why don't they opt for private health care treatment in the UK? It does exist, after all. But I guess if they are not flocking over then they don't REALLY need or want the operation, as shown by their revealed preferences in the market place...

In other words, the only people who count are those who can afford the cost. I remember reading Ayn Rand's serious suggestion on how to cut Medicare waiting lists, namely abolish it for, after all, there were no waiting lists back in those days (yes, dear, the poor did not bother waiting for treatment they could never afford...). Do the rest even exist for these people (unless invoked to damn "the left" or "liberals" for being "elitists" while they pursue policies which enrich the real elite...).

Although, if we took Hannity's insanity seriously it does contradict the usual claims of the American right on Europe -- after all, it does appear that we in the socialist hell-hole of Europe are doing pretty well. Apparently we are able to not only spend thousands on private medical care but also can fly to America to get it! Makes you wonder why the NHS is so popular in Britain...

In addition: I forgot to note that Hannity says that the NHS refusing to provide a certain cancer drug was a "death sentance" for women with breast cancer. What he failed to note was that this decision meant that the drug was not available free in the NHS. It was not banned, so those who could afford it could buy it privately. In other words, those who wanted to buy the drug were in the same position as women in America! If this is a "death sentance" when applied to one drug, then what does it mean when applied to a whole (privatised) health service?

In addition: I also forget to mention I saw one American point to the problems with dentistry in the UK as an example of the evils of "socialised" medicine. Any one who knew anything about the NHS would know that dentistry is the most "reformed" (i.e., privatised) part of it. People have been reduced to pulling their own teeth out because they cannot find an HNS dentist and so, thanks to privatisation, cannot afford to visit a dentist!

In addition: Clearly logic and facts are irrelevant for the right... Which helps explain the lying and scare tactics.

Has anyone sued Fox News over its obvious lying advertising? It is not a news channel...

Until I blog again... Be seeing you!

A modest proposal...

MG Rover's management have brought Britain's remaining large-scale car manufacturer to the brink of collapse. Five years ago, the "Phoenix Four," four Midlands businessmen, bought Rover from BMW for a token £10 five years ago. BMW gave them £427 million soft loan while they themselves invested a mere £60,000 each. Phoenix inherited a stock of unsold cars worth £350 million

Over those five years, they have been busy. For one, they paid themselves £30 million while their firm lost hundreds of millions of pounds. They also set up a pension fund to benefit themselves and their families. This is worth £16.5 million while the workers' pension fund is £67 million in deficit. Separately the four men took control of MG Rover's lucrative car financing operation, which currently has £10.3 million of retained profits on its books. The bosses sold assets worth roughly £1 billion in cash and re-usable assets all told, which were all apparently consumed by Rover's loss-making manufacturing operations. They also transferred valuable assets from Rover to the parent Phoenix. Meanwhile six thousand workers have their jobs and pensions on the line after talks with the Shanghai Automotive Industry Corporation collapsed. Even the Financial Times felt urged to denounce this as "capitalism at its ugliest."

Five years ago, the Blair apparatchiks praised the Phoenix Four to the skies. In May 2000, then trade secretary Stephen Byers praised Mr Towers's "personal strengths." The current Trade and Industry Secretary, Patricia Hewitt, is repeating this nonsense, stating that "company directors who take big risks and achieve big successes deserve big rewards." This is the neo-Thatcherism of Blairism at its stupidest.

Meanwhile Brown and Blair pledged to do everything possible to save the company. Given their track record on this, we can expect them to pick another bunch of crooks. While they always talk of "making hard decisions" and not being bound by ideology, they seem to have no problem picking private sector solutions to all and every problem they face. We can expect the same here -- with the customary opening of the public purse marked corporate welfare. No matter what, we can trust the government to ensure that the standard capitalist way of organising production is protected.

Perhaps we can make a suggestion. How about letting the workers at the company take it over as a co-operative? They could then directly and democratically elect their managers and hold them to account for their actions. This would, at least, get rid of one set of parasites and show a positive example of libertarian socialist ways of organising. Who knows, the creativity such methods would encourage may even see the workers deciding to stop producing planet killers (cars) and turn their talents to producing more socially and environmentally useful products!

We are sure that the government and private sector would dismiss this outright. Unsurprisingly, as it would create the threat of a good example. That is why a factory occupation would be an essential first step. If the workers, their families and those in the local community interested in the struggle should form an assembly, seize the workplace and simply declare it under workers' self-management. That should focus the attention of the politicians no end and place them under real pressure to give in to the workers' demands.

This is, of course, a short term solution and in no way suggests that capitalism can be reformed away. Nor is it to ignore the problems which will face any island of co-operation within the sea of capitalism. However, looking at the situation realistically, it is clear that a revolution is not on the cards for the time being. That suggests we need to look at ways of applying our ideas in a positive manner so that we can help bring it nearer. That is why we support self-managed struggle and organisation. So why not suggest a practical solution which, if successful, it could show that workers do not need bosses and give a positive example to a labour movement caught between the evils of privatisation and nationalisation? It is not prefect, but it is far more libertarian than the alternatives of closure, a government bailout to a new set of capitalists or nationalisation.

Ultimately, if our "solution" is any issue or problem is always "world-wide social revolution" then we deserve to be ignored.

  


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