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Exploiting the unemployed to line the pockets of big business

The following is take from the socialist issue 704

The introduction of the government's flagship welfare service the Work Programme has been criticised recently in a National Audit Office (NAO) report.

The programme was rushed through in just 12 months starting in June 2011. Disgracefully the government paid £63 million in compensation to private companies to end New Labour's Flexible New Deal contracts early. Ten of these same companies also got the lucrative new contracts with the Work Programme. Providing support to those on benefit is big business and there are many multinationals trying to get their hands on the £5 billion budget.

The government propaganda concentrates on scapegoating individuals for not getting a job. Yet unemployment is at 2.65 million and the government's slashing of jobs and services in the public sector only makes it harder to find work.

The scramble for profits skews the way the private companies provide services. The NAO report acknowledges that providers cherry-pick the easier-to-place people into work and "park" individuals who face more barriers getting back into work.

This was highlighted by PCS-commissioned research in 2006 on third sector involvement in welfare provision. This government puts the emphasis and payment on results. It is not concerned with how providers achieve the targets, as long as they get people off benefit. Also, using the current economic crisis as an excuse, it is likely that the private sector providers will demand a relaxation of the targets they signed up to.

It is often difficult for the public to raise concerns with the quality of these companies' services. Many of them also have a bad track record in the treatment of their own employees, (see article below).

The NAO report recommends that the Department for Work and Pensions (DWP) monitors the contracts more robustly. And it highlights some of the problems caused by privatisation. PCS members working in the DWP have a proven track record in providing the best support to help claimants back into work. So the work should be brought back in-house by staffing up jobcentres to provide good quality, individualised support for those on benefit, rather than pouring public money into the coffers of big business.

PCS will continue to campaign for our alternative to the government's attacks on the welfare state, as well as opposing all cuts.

Get rid of Cameron, Murdoch and all they represent

The following is the editorial of the socialist issue 680

When long-rotten fruit finally falls, all manner of grossness oozes from it and all varieties of parasites can come crawling out. And so it is with the all-embracing bushfire of the News International (NI) crisis.

In two weeks a paper, the News of the World (NoW), has closed, unfortunately with hundreds of job losses. Senior Met police officers have resigned and the extent of entanglement between Rupert Murdoch's empire and the police is being exposed. John Stephenson, who resigned as Met chief, told the House of Commons that ten of the Met's 45 press officers previously worked for NI.

No doubt many who have protested against climate change, against student fees and on other issues, will want their questions about police 'hacking' or infiltration of their organisations answered.

Murdoch, his cronies and Cameron should tell us whether they have ever penetrated or conducted underground work in organisations such as the Socialist Party or its predecessor Militant.

Rebekah Brooks, NI chief executive, friend to at least the last three prime ministers and Murdoch's golden girl, has not only resigned her position but been arrested. She has, alongside Rupert Murdoch and his son James, faced the parliamentary select committee. There, Murdoch senior used his son, as singer George Michael tweeted, "as a human shield".

Andy Coulson, formerly Cameron's pal and Downing Street director of communications, has also been arrested. His other previous incarnations include a stint as News of the World (NoW) editor and witness in the case against wrongfully imprisoned Scottish socialist Tommy Sheridan.

There has also been the death, as yet unexplained, of one of the first whistleblowers, Sean Hoare.
What now for Tory prime minister David Cameron? How can he pretend that he wasn't influenced by Murdoch's empire? He conducted 26 meetings with NI executives in 15 months plus apparently a number of 'undocumented' exchanges and, as Murdoch senior indicated, 'backdoor' visitors to Downing Street. How many times did he meet victims or working class opponents of his government's cuts?

'Beyond responsibility'

 

Opposition leader Ed Miliband recognised that the exposure of the hacking of the phone of murdered school student Milly Dowler changed things. In his 19 July speech, he correctly linked all the "powerful people who answered to nobody", out-of-control bankers, tax-avoiding corporations, dishonest MPs who had indulged in a "culture of entitlement" and News International "which thought it was beyond responsibility".

Miliband pointed out that while "Sir Paul Stephenson [Met Commissioner] has taken responsibility and resigned over the employment of Mr Coulson's deputy... the Prime Minister hasn't even apologised for hiring Mr Coulson." Deputy Labour leader Harriet Harman insisted that they wanted to ask Cameron questions. However, Miliband should demand Cameron's resignation, and that of his government as well.

All those who have been victims of Cameron's cuts - ie every one of us who works in or uses public services -every one who is not as rich as the millionaire Cabinet- will want Cameron and Co sent packing.

Cameron, having absented himself to fly around Africa with a load of bankers, is returning for one extra day of parliament before the summer recess. However, one day is insufficient. Cameron must not be 'saved by the bell'. Any opposition worth the name would call for a vote of 'no confidence' and push Cameron out. This government's downfall would strike a huge political blow against the ruling class and their cuts programme.

But Ed Miliband himself has also been quaffing from the crystal cup at Murdoch's recent summer party. New Labour in government never took the opportunity to clip Murdoch's wings. Tony Blair and Gordon Brown failed spectacularly to reverse Thatcher's anti-trade union laws or to undo vast Tory privatisations. In fact they added to those policies. Likewise there was no attempt to undo the moves towards monopoly control and political influence enjoyed by Murdoch and his ilk.

Miliband denounced the strikes against attacks on public sector pensions on 30 June, the most important day of struggle in recent working class history. Nonetheless Miliband could be brought to power, not through his own actions but through the unwinding of the crisis. From this coalition's inception, the Socialist has warned it would be torn asunder.

But an attack on Murdoch will not be enough to win an election. A Guardian/ICM poll found that while Miliband's personal approval had risen three points to 31%, Labour had dropped three points to 36%, 1% behind the Tories.

Labour's no solution

 

For working class and middle class people a change to Miliband's Labour would offer no solution. The trade union leaders should act. Clearly the establishment is bankrupt. Many MPs are now falling over themselves to celebrate the 'principle of free press' - but where were they until now?

The solicitor for one hacking victim told the BBC's Panorama programme that MPs hadn't stopped the scandal - but merely reacted to a scandal that had finally caught up with them.

On 30 June members of the ATL teaching union were on strike for the first time. General secretary Mary Bousted was given a standing ovation at the strike rally. She said: "I am glad that the ATL is not affiliated to any political party; Ed Miliband is a disgrace." She asked: "What has he and his shadow cabinet, which is laughingly called an opposition ever done? Sisters, and brothers, we're doing it for ourselves."

This latest crisis underlines the need for a workers' party more than ever. Steps must be urgently taken to build a party, based on a socialist programme, that cannot be bought, that doesn't seek the approval of anti-working class billionaires; but instead seeks to provide a vehicle to fight to defend all our rights, jobs and public services.

The Murdoch affair must not be allowed to fade over the summer break. Arising from this crisis, as well as questions about who we can trust to run the country, are questions about who should own and make decisions about the press.

The Socialist calls for the nationalisation of the press and all media facilities under democratic working class control and management. This has to be linked to a programme to abolish the roots of this crisis, the profit-motivated capitalist system and to fight for a socialist alternative.

The socialist alternative to media corruption

RCT Socialist Update no. 23

As we are in the midst of the scandal surrounding Murdoch's media empire and the lengths of corruption they will go to which have implicated both the police and politicians several questions are raised. Is this isolated to News International? Has this happened simply because the controlled so many media outlets? or rather is this systematic of a media which is owned and controlled by the rich and pumps out their ideology.

This week we wil be discussing this very issue at our branch meeting, come along to discuss this question and what a socialist alternative for the media is, in the meantime you can read this article taken from the socialist http://www.socialistparty.org.uk/articles/12389/11-07-2011/take-over-murdochs-press 

Come along to the meeting
Wednesday, 7.30pm
Otley Arms, Treforest

Capitalism uncovered

The following is taken from the July 2011 edition of Socialism Today

Ha-Joon Chang exposes today’s rapacious capitalism, dominated by finance and driven by short-term profit maximisation. He provides a devastating critique of the ideology of ‘free-market’ economics. But while pointing to fundamental contradictions of the system, Chang draws back from a real alternative. LYNN WALSH reviews 23 Things They Don’t Tell You About Capitalism.

23 Things They Don’t Tell You About Capitalism

By Ha-Joon Chang

Published by Allen Lane, 2010, £20

SINCE 1980, ULTRA-free market (or neoliberal) policies have been implemented in Britain, the US and other major capitalist economies basing themselves on the Anglo-American model. More recently, other countries, such as Germany, Sweden, etc, have turned down the same path. The basic ingredients of neoliberal policies are clear: the deregulation of markets, especially the finance sector. Cutting back the state, through privatisation of state enterprises and the public sector. Massive tax concessions to big business and the super-rich. An assault on organised labour and trade union rights. The justification for these measures is that they lead to a more efficient use of resources, with higher growth rates and, ultimately, greater prosperity for all. The reality, as Chang shows, is completely different.

The main success of neoliberalism has been increasing profits and the income and wealth of the super-rich capitalists: "between 1979 and 2006… the top 1% of earners in the US more than doubled their share of national income, from 10% to 22.9%. The top 0.1% did even better, increasing their share by more than three times, from 3.5% in 1979 to 11.6% in 2006". However, this did not lead to higher growth. "Economic growth has actually slowed down since the start of the neoliberal pro-rich reform in the 1980s. According to World Bank data, the world economy used to grow in per capita terms at over 3% during the 1960s and 1970s, while since the 1980s it has been growing at a rate of 1.4% per year (1980-2009)". 

Moreover, capital investment in new productive capacity, the key to the development of new technology and future productivity increases, has actually declined. "Despite rising inequality since the 1980s, investment as a ratio of national output has fallen in all G7 economies… and in most developing countries". In the case of the US, "investment as a share of national output has actually fallen, rather than risen, from 20.5% in the 1980s to 18.7% since then (1990-2009)". Moreover, "the growth rate of per capita income in the US fell from around 2.6% per year in the 1960s and 1970s to 1.6% during 1990-2009, the heyday of shareholder capitalism". In Britain, "per capita income growth rates fell from 2.4% in the 1960s-70s, when the country was allegedly suffering from the ‘British disease’, to 1.7% during 1990-2009".

Chang, however, does not adequately explain the decline of capital investment. He tends to attribute it to neoliberal policies, but does not recognise a deep-rooted crisis of over-accumulation of capital, whereby additional investment in new means of production no longer produces the level of profit required by investors, who therefore turn to the finance sector in search of increased ‘value’. 

Finance capital dominates

 

CAPITALIST GOVERNMENTS accepted the doctrine of ‘shareholder value’, that is, maximising the short-term return to shareholders (which included the top executives, who are partly paid in share options). Shareholder value was particularly promoted by the finance sector, which was less and less concerned with the long-term prospects of manufacturing corporations. High profits were achieved through savage cost cutting, especially of jobs and wages. While enormously boosting the incomes of the shareholders, including the top executives, it led to the stagnation of working-class and middle-class incomes.

"Managers", says Chang, "saw their compensation rising through the roof. Between the 1980s and the recent period, the compensation (salaries, benefits and stock options) of chief executive officers rose from 30 to 40 times that of average worker compensation, which was largely stagnant, to 300 or 400 times".

At the same time, "jobs were ruthlessly cut, many workers were fired and rehired as non-unionised labour with lower wages and fewer benefits, and wage increases were suppressed… The average hourly wage for the US worker in 2007 dollars (that is, adjusted for inflation) rose from $18.90 in 1973 to $21.34 in 2006, that is a 13% increase in 33 years, which is around 0.4% growth per year". This amounts to stagnation.

Clearly, the stagnation of workers’ incomes undermined the demand for goods and services – except in so far as falling incomes were compensated for by ever growing levels of debt, which reached unsustainable levels.
Chang shows the growing domination of finance capital over the capitalist economy as a whole. "The ratio of the stock of financial assets to world output rose from 1:2 to 4:4 between 1980 and 2007. The relative size of the financial sector was even greater in many rich countries… The ratio of financial assets to GDP in the UK reached 700% in 2007". Free-market policies were outstandingly successful in boosting the profits of the financial sector. But this did not improve overall growth, or productivity, let alone the living standards of the majority. Low inflation benefitted the moneylenders but (as Chang shows) actually held back growth of manufacturing. Despite the growth of ‘financial innovations’, especially derivatives of one kind and another (which were supposed to minimise or even eliminate risk), there was increased instability, with a series of major financial crises going back to the 1997 Asian debt crisis and culminating in the 2007-09 crisis.

Chang demonstrates the failure of so-called free-market capitalism, even according to its own claims. Each chapter begins with ‘What they tell you’, a brief synopsis of neoliberal doctrine, which is then answered with ‘What they don’t tell you’, analysing the reality of today’s global capitalism. His arguments are succinct, backed up with well-chosen figures, and he raises fundamental issues about the contradictions of capitalism and about economic planning. Chang, a native of South Korea who is now professor of economics at Cambridge, challenges the prevailing economic orthodoxy. Unfortunately, however, he does not step beyond the limits of capitalism.

An ideological offensive

 

CHANG RECOGNISES THE important role played by free-market ideology. National governments of the advanced capitalist countries have used their economic and political power to carry through neoliberal policies. International agencies, like the IMF, World Bank, the World Trade Organisation (backed by the weight of global financial markets), have used their power to impose the ‘Washington consensus’ (the neoliberal policy package) on the semi-developed and poor countries. But Chang rightly points to the part played by "ideological influence… exercise[d] through intellectual dominance". With the undermining of the post-war upswing after the late 1960s, Keynesian economics, which had provided the theoretical rationale for post-war capitalism (state intervention, high social expenditure, and attempted management of national economies), was rapidly discredited among capitalist leaders and hired policy-makers. 

Keynesianism was replaced by ‘monetarism’, advocated by Milton Friedman and the ‘Chicago school’ of economists, and subsequently by a much broader neoliberal agenda. As Chang says, the ‘managerial classes’ (more accurately, the capitalist business elite and their political allies) "have used their economic and political influence to spread the free-market ideology that says that whatever exists must be there because it is the most efficient". This stance, a carte blanche for speculators, was exemplified by Alan Greenspan, head of the US Federal Reserve, who supplied the super-credit that fuelled a series of asset bubbles. After the financial meltdown in 2008 he belatedly confessed that he had been mistaken in believing that markets are always self-correcting.

‘Ideology’ can be used as a neutral description of a body of ideas or an intellectual trend. But in this context, ideology refers to ideas (in this case neoliberalism) that are presented as an accurate, even scientific representation of socio-economic reality, but are a completely one-sided, distorted representation of reality. Moreover, these pseudo-objective ideas conceal the interests of particular social groups, in this case the big capitalists of the advanced capitalist countries, especially the finance capitalists. It seems as clear as daylight that the extension of market relations benefits those who play the markets, the big financial institutions and wealthy speculators. To counter this politically inconvenient ‘impression’, armies of economists are drafted in to show that the market is the best way – in fact, the only way – of organising the economy. The basic tenet of mainstream economics is that ‘there is no alternative’ (Tina).

Chang makes this point very forcefully: "The free-market policy package, often known as the neoliberal policy package, emphasises lower inflation, greater capital mobility and greater job insecurity (euphemistically called greater labour market flexibility), essentially because it is mainly geared towards the interests of the holders of financial assets".

Chang explains why these policies favour finance capitalists: "Inflation control is emphasised because many financial assets have nominally fixed rates of return, so inflation reduces their real returns. Greater capital mobility is promoted because the main source of the ability for the holders of financial assets to reap higher returns than the holders of other (physical and human) assets is their ability to move around their assets more quickly. Greater labour market flexibility is demanded because, from the point of view of financial investors, making hiring and firing of the workers easier allows companies to be restructured more quickly, which means that they can be sold and bought more readily with better short-term balance sheets, bringing higher financial returns".

Neoliberal economics reflect these economic relations, which developed apace after the Thatcher-Reagan ‘revolution’ (in reality, counter-revolution) of the early 1980s. Before that time, the monetarist ideas of academics like Friedman were viewed as merely the cranky notions of a minority of right-wing economists. But with the return of major capitalist economies to more brutal market policies (with the rolling back of state social spending), monetarism and allied doctrines began to flourish. By providing theoretical justification, ultra-free-market economics played a part in reinforcing market policies, and providing legitimacy. 

This is not to say that neoliberal ideology played a merely passive role, providing intellectual support only after the new relations had developed. Neoliberal ideology was used as a political weapon by the ruling class, especially the Anglo-American ruling class and especially after the collapse of the Stalinist regimes, to extend and deepen market relations on a global scale. In the absence of any ideological alternative from the leaders of the traditional workers’ parties, neoliberal ideas swayed big sections of public opinion and helped create electoral support for out-and-out pro-market policies.

 

The role of neoliberal economists

 

CHANG LEVELS A series of searing criticism against free-market economists – who now dominate the profession – which add up to a devastating indictment. "During the last three decades", he writes, "the increasing influence of free-market economists has resulted in poorer economic performance all over the world". He notes that during their periods of ‘miracle’ growth, economies like Japan, South Korea, Taiwan and, more recently, China, were run mainly by lawyers and engineers, not economists. Where free-market economists intervened in semi-developed economies, like Chile, where the monetarist ‘Chicago boys’ advised the Pinochet dictatorship, accelerated economic growth was based on the savage driving down of workers’ living standards and the systematic suppression of democratic rights. "There are reasons to think", Chang says, "that economists may be positively harmful for the economy" and "for most people".

Chang refers to the incident when the queen visited the London School of Economics in June 2009. It was as if the fable of the emperor’s new clothes was reversed. Referring to the great crash, a naïve monarch asked the assembled economists: ‘How come nobody could foresee it?’ (If the queen had been reading Socialism Today over recent years, she would not have been surprised by the crisis, which we clearly predicted.) On behalf of their embarrassed colleagues, two professors, Tim Besley and Peter Hennessy, tried to provide an answer (Letter, 22 July 2010). Individually, they claimed, economists were all doing a good job. But there was a "failure of the collective imagination of many bright people… to understand the risks to the system as a whole".

Chang contemptuously dismisses any suggestion that economists are merely ‘innocent technicians’ who were all doing a good job until they were hit by an unpredictable crisis. Over three decades, "economists played an important role in creating the conditions of the 2008 crisis… by providing theoretical justifications for financial deregulation and the unrestrained pursuit of short-term profits". They advanced theories which justified policies that led to slower growth, greater inequality, job insecurity, etc, and the intensified exploitation of underdeveloped countries. 

However, Chang’s explanation of the role of free-market economists is weak, to say the least. "It may be", he says, "that the economics taught in university classrooms is too detached from reality to be of practical use". He believes, "we need different kinds of economics from free-market economists". 

In effect, Chang is arguing that the ‘wrong’ kind of economists should be replaced by the ‘right’ kind. Good economists would promote long-term investment and technological innovation. They would base themselves on a "nuanced view of capitalism, not the simplistic free-market view". A nuanced view would embrace a complex mixture of "markets (public and private), bureaucracies and networks".

Chang suggests that good economists would draw their ideas from an eclectic mix of economists: Karl Marx, Friedrich List (a conservative nationalist), John Maynard Keynes, Joseph Schumpeter (who advanced a theory of long waves punctuated by episodes of ‘creative destruction’), Hyman Minsky (who developed a Keynesian theory of financial crisis), and other Keynesians.

Chang’s criticism of free-market economists is correct, as far as it goes. But he fails to understand why they came to dominate. It was not because bad economists ousted good ones. The rise of neoliberal economics reflected deep-seated changes in the advanced capitalist countries, with the emergence of new economic forces – which found enthusiastic allies among the economists. After all, huge armies of economists are employed (on huge salaries and bonuses) by the big financial institutions, mainly to assess the short-term profitability of investments, while academic economists provide the theoretical rationale for the ultra-free market drive for profits. Economists like Chang, who tenaciously challenges the neoliberal orthodoxy, are a rare breed in academic circles.

The case for planning

 

REFERRING TO KARL MARX, Chang points to the fundamental contradiction of capitalism: the production process is socialised while ownership of the means of production is private. He very clearly shows that production under advanced capitalism depends on a high level of social organisation and cooperation. But his main purpose in taking up this argument is to use it against the false idea of neoliberal economics, according to which success under capitalism depends on visionary entrepreneurs competing as individuals in a free market that is merely an arena for competition. Chang recognises that Marx argued that private ownership rules out planning and gives rise to a mismatch between supply and demand, resulting in periodic crises. However, he rejects Marx’s solution, central planning, which he dismisses as a failure. 

"With economic development… the division of labour between firms develops further and as a result the firms become increasingly more dependent on each other – or the social nature of the production process is intensified". Chang points out that giant firms can undertake massive investments and pursue their profit-making activities on a global scale only because they are supported by a range of public institutions, such as a legal system, education and training for workers, public subsidies for research and development, and so on.

However, private ownership of competing firms makes it "impossible to coordinate the actions of those independent firms". Chang correctly refers to the impossibility of coordinated production as a source of periodic economic crisis. He does not, however, refer to the exploitation at the heart of the capitalist system: the expropriation by the capitalists of surplus value (in the form of profit) which represents the wealth produced by workers’ labour power over and above what they are paid in wages. Nevertheless, Chang appears to sympathise with Marx’s argument that "with the development of capitalism… this systemic contradiction would become larger and consequently economic crises would become more and more violent, finally bringing the whole system down".

Chang goes on to summarise Marx’s case for central planning. "All means of production are owned by the whole of society and as a result the activities of interdependent production units can be coordinated ex ante [in advance] through a unified plan. As any potential coordination failure is resolved before it happens, the economy does not have to go through those periodic crises in order to balance supply and demand. Under central planning, the economy will produce only exactly what is needed. No resource will lie idle at any time, since there will be no economic crisis. Therefore, the central planning system, it was argued, will manage the economy much more efficiently than the market system".

But that, says Chang, was theory: "unfortunately, central planning did not work very well in practice". Chang bases his rejection of central planning as an alternative to capitalism on the failure of planning in the Soviet Union and Eastern Europe. Clearly, the writing off of economic planning is one of the main effects of the collapse of the so-called ‘communist’ or, in reality, Stalinist regimes, in Eastern Europe after 1989/90. Like most critics, including those on the left, Chang makes no distinction at all between the kind of planning envisioned by Marx and the reality of planning under a Stalinist dictatorship. The failure of Stalinist planning was rooted in the conditions under which it arose, and does not prove that planning will never work.

Why Stalinist planning failed

 

CHANG’S EXPLANATION FOR the failure of Soviet planning is inadequate, lacking historical perspective. He makes no reference to the fact that at the beginning of the 20th century Russia was an economically and culturally backward country, where the working class was a small minority of the population, though politically powerful. The leaders of the Russian revolution, Vladimir Lenin and Leon Trotsky, did not believe that they could build socialism in Russia in isolation, apart from the development of socialist revolution in the more advanced capitalist countries. For various reasons, the revolution was isolated, and backwardness gave rise to the development of a bureaucratic layer which began to dominate society. Stalin, the political representative of the bureaucracy, carried out a political counter-revolution, wiping out the elements of workers’ democracy established in 1917, and installing a totalitarian regime.

In the early period, as Chang notes, the bureaucracy was able to develop basic industries on the basis of a central plan. However, as the economy developed there was more and more distortion, waste and mismanagement. Chang attributes this to the increasing ‘complexity’ of the economy. This is valid as far as it goes, but misses the fundamental point: that under the Stalinist regime there was no democracy, the working class was politically disenfranchised and allowed to play no role in the management of the economy. There was no feedback from below to check and refine the plan. Local managers were bureaucrats, agents of the central bureaucracy.

Through planning, the Soviet Union was able to lay the foundations of a modern industrial economy, though at enormous cost to the working class. Moreover, planning enabled the Soviet Union to defeat the barbaric onslaught of Nazi Germany during the second world war, and subsequently to provide significant social gains for the population in terms of employment, housing, healthcare and education. However, the quality of consumer goods, in particular, was very poor. In the 1970s, when microelectronic technology began to develop internationally, it became increasingly apparent that the bureaucracy was incapable of systematically applying new technology to the development of production and planning. The incompetence and corruption of the bureaucracy, with increasing dislocation of central planning, led to the implosion of the Stalinist economies in the early 1990s.

Undoubtedly, this had a massive ideological impact. The capitalist class launched an unparalleled ideological offensive to prove that ‘communism’, ‘socialism’, and central planning would not work, were inherently impossible. However, the failure of planning under specific historical conditions does not prove that planning will never work. The failure of Stalinism, moreover, certainly does not prove that capitalism is a viable system with no possible alternative.

Socialist economic planning today, in economically developed countries, would be very different from Stalinist planning in the Soviet Union (which was replicated in Eastern Europe, China, Cuba, etc). First, there is the economic, technical and cultural basis for a much more developed form of economy, which did not exist in the Soviet Union after 1917. At the same time, a dominant working class, mobilised to carry through a socialist transformation, would ensure that both the new socialist state and the economy were subject to democratic control.

Democratically elected planning bodies would draw up an economic plan, which would be continually checked and modified by local bodies. The plan would be based on the nationalisation of the ‘commanding heights’ of the economy, the major manufacturing industries, banks, and infrastructure. Not every small business would be nationalised, but would operate within the framework of a plan. There would also be planning bodies to oversee the development and production of consumer goods, to ensure their high quality and that they met the real needs of the population. This is not a utopian project. As Chang himself shows, all the elements of planning already exist within capitalism. However, they are currently trapped within the limits of the drive for profit, the anarchy of the market, and rival nation states.

Elements of planning within capitalism

 

WHILE DISMISSING CENTRAL planning, Chang, like Marx, nevertheless points to the elements of planning within capitalism. Marx did not dream up central planning out of the blue, but based his ideas on real tendencies within capitalism: the increasing tendency of the state to intervene to regulate the economy and take over major industries, such as utilities; and the elements of planning within capitalist firms, in contrast to the anarchic competition between firms competing in the market. Chang gives more up-to-date examples, but again only as a counter to neoliberalism, not as an alternative to capitalism.

Chang refers to the fact that in times of war, both during the first and second world wars, the state in the major capitalist economies in effect introduced big elements of central planning for the duration of the conflicts, in order to ensure the supply of munitions and industrial materials. Of course, ownership was left in the hands of the capitalists, who later took back control of industries (apart from those that virtually collapsed, like coal, iron and steel, etc). Moreover, Chang refers to the interventionist role played by the state in countries like Japan, South Korea, Taiwan, etc, that experienced rapid economic growth during the post-war economic upswing.

Most importantly, however, Chang points to the planning that takes place within capitalist corporations. "Modern capitalist economies are made up of large, hierarchical corporations that plan their activities in great detail, even across national borders". Many also suffer from the same kind of bureaucratic distortions that existed in the former Stalinist states.

Chang follows Marx’s line of argument: "When [Marx] talked about planning, there was in fact no real life government that was practising planning. At the time, only firms planned. What Marx predicted was that the ‘rational’ planning approach of the capitalist firms would eventually prove superior to the wasteful anarchy of the market and thus eventually be extended to the whole economy. To be sure, he criticised planning within the firm as despotism by capitalists…".

Chang points out that the "area of the capitalist economy that is covered by planning has in fact grown". For instance, it is estimated that "between one third and one half of international trade consists of transfers among different units within transnational corporations".

"Between the planning that is going on within corporations and various types of planning by government, modern capitalist economies are planned to a very high degree". This is true. However, big corporations still compete with one another in pursuit of profit, and there is particularly intense competition on international financial markets. It is still the case, despite the planning within big corporations that, ultimately, the irrational element of competition through the market still predominates over the elements of rational planning within corporations and through state intervention. That is why capitalism has again plunged into a global crisis, the worst since the 1930s.

Chang recognises the elements of planning within capitalism, but he mistakenly believes that there can be a major shift towards planning in the system as a whole, without fundamental change. Chang draws on Marxist ideas to criticise contemporary, ultra-free-market capitalism. But on every major issue, he stops short, draws back, and reverts to the idea that somehow an ideal capitalism can emerge. He favours a "modern economy in which government policy, corporate planning and market relationships are all vital and interact in a complex way".

 

A ‘better’ capitalism?

 

CHANG REJECTS THE free-market model of capitalism, which led to the catastrophe of the 2008 financial crisis and plunged the world economy into depression. "The last three decades have shown that, contrary to the claims of its proponents, [free-market capitalism] slows down the economy, increases inequality and insecurity, and leads to more frequent (and sometimes massive) financial crashes". Therefore, he concludes: "The daunting task ahead of us is to completely rebuild the world economy". Moreover, "nothing short of a total re-envisaging of the way we organise our economy and society will do". This sounds revolutionary! However, Chang makes it clear: "My criticism is of free-market capitalism, and not all kinds of capitalism". 

"There is no one ideal model". So Chang sets about creating – or at least imagining – a new model of capitalism. Like an enthusiastic shopper going round a supermarket, he picks different components off the shelves of the global superstore.

In his model he would include elements of the Nordic economies, with highly developed welfare systems (at least, until recently). Figures presented in his book show that for a long period they had higher growth rates than the US and most economies based on free-market policies. Chang also selects some components from the Southeast and East Asian model, having noted with approval the role that the state played in laying the foundations of modern industrial economies in Japan, South Korea, Taiwan and other economies in the region. There is room in his model for some of the ‘indicative planning’ used by countries like France, where the government has used subsidies and tax incentives to stimulate (and protect) key industrial sectors. There is also a role for the market in Chang’s scheme, but it would be much more regulated than now.

Based on this model, there would be – in his scheme of things – a return to Keynesian-type economic policies. Social spending would be protected, while home manufacturing would be encouraged. There would be a return to the (attempted) macroeconomic management of national economies (which implies some kind of protection from short-term capital flows across borders). Governments would invest heavily in research and development, and encourage long-term investment in new technology. Poor and semi-developed countries would be allowed to protect their home industries until they could stand on their own feet (as the advanced capitalist countries did in the past). Enlightened self-interest, based on recognition of longer-term objectives and social needs, would replace the ruthless pursuit of short-term profit maximisation. The market would play a role, but it would be controlled, just one component of the economy.

In other words, Chang is advocating a ‘better capitalism’. This has recently become a familiar theme among left reformists internationally, and they will no doubt draw on Chang’s arguments. But how could this new model capitalism come about? Chang’s approach is completely a-historical, utopian. The components he selects for his model were the products of particular historical conditions in particular countries, and developed on the basis of real economic forces and world relations as they existed at the time. 

In the case of Sweden, for instance, social-democratic governments came to power in the pre-second world war period, because of the strength of the workers’ movement. With relatively favourable conditions for Swedish capitalism during the second world war and the post-war upswing, Sweden developed a highly advanced welfare state. In contrast, Japanese capitalism, as well as South Korean, Taiwanese, etc, developed in the post-war period under the umbrella of US imperialism, which provided economic support for those countries as a strategic buffer against China, that was transformed by the revolution of 1949. 

For historical reasons, the state had always played a major role in the Japanese economy. However, Chang notes that there has been a very limited development of social provision in Japan. The manufacturing base in South Korea, as Chang notes, was developed under the vicious dictatorship of Park Chung-hee, again with almost no social provision for the working class or poor farmers. Recently, however, both Japan and South Korea have entered a period of weak growth or stagnation. South Korea, in particular, has turned towards the implementation of free-market policies. Moreover, under both social-democratic and right-wing governments, Sweden has begun to unwind the welfare state, turning sharply towards the marketisation of the economy and society.

Britain, the US and other advanced capitalist countries turned to neoliberalism after 1980. This was not merely a policy change, but reflected an underlying change in economic relations. During the late 1960s there was a breakdown of the post-war economic relations which supported the long upswing in western capitalism. After the period of ‘stagflation’ (feeble growth combined with high inflation), capitalist governments, beginning with Thatcher and Reagan, concluded that they had to adopt a new approach. A key feature of the crisis was the decline in profitability, and there was a turn by the capitalists towards the finance sector as a source of profits. 

The ‘big bang’ deregulation of financial markets, first in Britain and the US but then in other major economies, opened the door to ultra-free-market financial speculation. This led to the dominance of finance capital described by Chang. This dominance was not just the result of false ideology, or policy mistakes. It reflected a deep-rooted crisis of over-accumulation within capitalism. This meant that new investment in the development of the means of production no longer produced the levels of profit required by the capitalist class. The turn towards the finance sector, which accelerated in the mid-1990s, reflected this underlying crisis.

The necessity of a socialist alternative

 

FREE-MARKET, NEOLIBERAL capitalism is not just a mistake, or a harmful fashion that will pass given time. It reflects the fundamental character of capitalism in this period. Chang says he accepts the profit motive and the market. But he mistakenly believes that they can be controlled and directed according to some political scheme. For instance, Chang believes there should be a return to long-term investment, based on the development of new technology. But the capitalists largely abandoned that approach, which prevailed in the early period of the post-war upswing, because they were no longer reaping the profit returns that they required. 

The market is not just a machine, a neutral mechanism, that can be harnessed by enlightened governments to produce greater prosperity for everyone. The market is an arena for competitive struggle between the big corporations and financial institutions, whose drive to intensify the exploitation of the working class and increase their profitability inevitably leads to growing social polarisation between rich and poor in society, and increased inequality internationally. 

It is not possible to ‘completely rebuild’ the world economy on the basis of a rational appeal to the enlightened self-interest of capitalists. Fundamental change will come about only through the mobilisation of powerful social forces, primarily the working class. Change, moreover, would have to be on the basis of a change of ownership of the commanding heights of the economy, the big corporations and financial institutions. This would precisely require the economic planning envisaged by Marx, both on a national and international basis.

Chang hesitates to take this step. He believes that the predatory neoliberal capitalism of today can be changed into a benign, people-friendly capitalism run by enlightened leaders. But his project is doomed to failure. Capitalism faces a period of depression, with the possibility at any time of further, even deeper crises. The consequences internationally for the working class, the exploited rural labourers, and the dispossessed will be catastrophic. The effective defence of workers’ living standards and democratic rights will only be possible through a struggle against capitalism and for an alternative socialist society. Mass prosperity, greater equality, social welfare, enlightened mass education, technological advance – all the things which Chang clearly values – will become possible only on the basis of socialist economic planning, which for Chang is unfortunately a step too far.

The socialist alternative to media corruption

RCT Socialist Update no. 23

As we are in the midst of the scandal surrounding Murdoch's media empire and the lengths of corruption they will go to which have implicated both the police and politicians several questions are raised. Is this isolated to News International? Has this happened simply because the controlled so many media outlets? or rather is this systematic of a media which is owned and controlled by the rich and pumps out their ideology.

This week we wil be discussing this very issue at our branch meeting, come along to discuss this question and what a socialist alternative for the media is, in the meantime you can read this article taken from the socialist http://www.socialistparty.org.uk/articles/12389/11-07-2011/take-over-murdochs-press 

Come along to the meeting
Wednesday, 7.30pm
Otley Arms, Treforest

Jobs not Cuts

Merthyr Tydfil in south Wales has the fourth highest level of youth unemployment in Britain with more than a third of 16-24 year olds unable to find work.

Last year Tory minister Iain Duncan Smith (IDS) asked why don't jobseekers in Merthyr Tydfil "just get on a bus" to Cardiff? He blames the unemployed for being out of work.

But for every vacancy advertised in Cardiff, there are nine job seekers living in the city, let alone those outside in places like Merthyr who are looking to commute. In Merthyr itself there are 84 job seekers for every job advertised!

But Iain won't let the facts get in the way of his ideological campaign to make ordinary working class people and the most vulnerable in society pay for the economic crisis.

Bus or no bus, this government's policies mean there are no jobs! They're cutting 750,000 jobs from the public sector and, while claiming the private sector will come to our rescue, they're doing nothing as the high street collapses around us.

And the schemes they claim are designed to help unemployed young people are a joke. I volunteered to do a placement with a private insurance company because I was told that I had an "excellent chance of employment" within the company.

I worked there full-time. After six weeks I became ill resulting in two days off work over the following two weeks. It wasn't until I had worked for the company for 12 weeks that my manager took me aside and confessed that I was never going to find a job there after I had taken those two days off sick.

She then started questioning my commitment to finding work, completely ignoring the fact that I had been working for her for 12 weeks for free. The truth was clear, I was never going to find a job in that company.

The team I was in was a training team so not directly profitable and they just needed a way to increase productivity without breaking the budget.

As you can imagine it was a huge blow to my confidence considering how hard I worked when I was there. Unfortunately many unemployed young people like me are being exploited in this way.

Youth Fight for Jobs Wales protested when IDS came to Cardiff with chants of "Duncan-Smith, do us a favour - give us jobs, not slave labour!" and attempted to challenge him about his "get on a bus" idea. We also joined trade unionists at a recent anti-cuts march and rally in Cardiff.

From 4 to 6 August, we will show IDS that the unemployed aren't lazy and go one better than getting on a bus from Merthyr to Cardiff - we're marching the whole distance. And then in October we'll be joining the Jarrow march for jobs from Jarrow in South Tyneside all the way to London, which will go past IDS's constituency office in Chingford.

Both marches will be demanding investment in a programme of socially useful job creation. A report published recently by researchers at Sheffield Hallam University concluded that only a publicly run jobs creation scheme like this can restore economic prosperity to Wales.

So far the campaign has received a great response from young people and trade union members in south Wales. In the lead-up to the demonstration we will be organising a number of fundraising events including gigs and stalls which will also raise awareness and bring in more marchers.
If you can join either demonstration or help us raise money to cover the costs, get in touch:

www.jarrowmarch11.com
youthfightforjobs@gmail.com

by Katie Simpson, South Wales Youth Fight for Jobs

New issue of 'The Graig factor' out now

Issue number two of the monthly newsletter of Graig Socialist Party is out now, click on the image below to view in full screen.

Capitalism uncovered

The following is taken from the July 2011 edition of Socialism Today

Ha-Joon Chang exposes today’s rapacious capitalism, dominated by finance and driven by short-term profit maximisation. He provides a devastating critique of the ideology of ‘free-market’ economics. But while pointing to fundamental contradictions of the system, Chang draws back from a real alternative. LYNN WALSH reviews 23 Things They Don’t Tell You About Capitalism.

23 Things They Don’t Tell You About Capitalism

By Ha-Joon Chang

Published by Allen Lane, 2010, £20

SINCE 1980, ULTRA-free market (or neoliberal) policies have been implemented in Britain, the US and other major capitalist economies basing themselves on the Anglo-American model. More recently, other countries, such as Germany, Sweden, etc, have turned down the same path. The basic ingredients of neoliberal policies are clear: the deregulation of markets, especially the finance sector. Cutting back the state, through privatisation of state enterprises and the public sector. Massive tax concessions to big business and the super-rich. An assault on organised labour and trade union rights. The justification for these measures is that they lead to a more efficient use of resources, with higher growth rates and, ultimately, greater prosperity for all. The reality, as Chang shows, is completely different.

The main success of neoliberalism has been increasing profits and the income and wealth of the super-rich capitalists: "between 1979 and 2006… the top 1% of earners in the US more than doubled their share of national income, from 10% to 22.9%. The top 0.1% did even better, increasing their share by more than three times, from 3.5% in 1979 to 11.6% in 2006". However, this did not lead to higher growth. "Economic growth has actually slowed down since the start of the neoliberal pro-rich reform in the 1980s. According to World Bank data, the world economy used to grow in per capita terms at over 3% during the 1960s and 1970s, while since the 1980s it has been growing at a rate of 1.4% per year (1980-2009)". 

Moreover, capital investment in new productive capacity, the key to the development of new technology and future productivity increases, has actually declined. "Despite rising inequality since the 1980s, investment as a ratio of national output has fallen in all G7 economies… and in most developing countries". In the case of the US, "investment as a share of national output has actually fallen, rather than risen, from 20.5% in the 1980s to 18.7% since then (1990-2009)". Moreover, "the growth rate of per capita income in the US fell from around 2.6% per year in the 1960s and 1970s to 1.6% during 1990-2009, the heyday of shareholder capitalism". In Britain, "per capita income growth rates fell from 2.4% in the 1960s-70s, when the country was allegedly suffering from the ‘British disease’, to 1.7% during 1990-2009".

Chang, however, does not adequately explain the decline of capital investment. He tends to attribute it to neoliberal policies, but does not recognise a deep-rooted crisis of over-accumulation of capital, whereby additional investment in new means of production no longer produces the level of profit required by investors, who therefore turn to the finance sector in search of increased ‘value’. 

Finance capital dominates

 

CAPITALIST GOVERNMENTS accepted the doctrine of ‘shareholder value’, that is, maximising the short-term return to shareholders (which included the top executives, who are partly paid in share options). Shareholder value was particularly promoted by the finance sector, which was less and less concerned with the long-term prospects of manufacturing corporations. High profits were achieved through savage cost cutting, especially of jobs and wages. While enormously boosting the incomes of the shareholders, including the top executives, it led to the stagnation of working-class and middle-class incomes.

"Managers", says Chang, "saw their compensation rising through the roof. Between the 1980s and the recent period, the compensation (salaries, benefits and stock options) of chief executive officers rose from 30 to 40 times that of average worker compensation, which was largely stagnant, to 300 or 400 times".

At the same time, "jobs were ruthlessly cut, many workers were fired and rehired as non-unionised labour with lower wages and fewer benefits, and wage increases were suppressed… The average hourly wage for the US worker in 2007 dollars (that is, adjusted for inflation) rose from $18.90 in 1973 to $21.34 in 2006, that is a 13% increase in 33 years, which is around 0.4% growth per year". This amounts to stagnation.

Clearly, the stagnation of workers’ incomes undermined the demand for goods and services – except in so far as falling incomes were compensated for by ever growing levels of debt, which reached unsustainable levels.
Chang shows the growing domination of finance capital over the capitalist economy as a whole. "The ratio of the stock of financial assets to world output rose from 1:2 to 4:4 between 1980 and 2007. The relative size of the financial sector was even greater in many rich countries… The ratio of financial assets to GDP in the UK reached 700% in 2007". Free-market policies were outstandingly successful in boosting the profits of the financial sector. But this did not improve overall growth, or productivity, let alone the living standards of the majority. Low inflation benefitted the moneylenders but (as Chang shows) actually held back growth of manufacturing. Despite the growth of ‘financial innovations’, especially derivatives of one kind and another (which were supposed to minimise or even eliminate risk), there was increased instability, with a series of major financial crises going back to the 1997 Asian debt crisis and culminating in the 2007-09 crisis.

Chang demonstrates the failure of so-called free-market capitalism, even according to its own claims. Each chapter begins with ‘What they tell you’, a brief synopsis of neoliberal doctrine, which is then answered with ‘What they don’t tell you’, analysing the reality of today’s global capitalism. His arguments are succinct, backed up with well-chosen figures, and he raises fundamental issues about the contradictions of capitalism and about economic planning. Chang, a native of South Korea who is now professor of economics at Cambridge, challenges the prevailing economic orthodoxy. Unfortunately, however, he does not step beyond the limits of capitalism.

An ideological offensive

 

CHANG RECOGNISES THE important role played by free-market ideology. National governments of the advanced capitalist countries have used their economic and political power to carry through neoliberal policies. International agencies, like the IMF, World Bank, the World Trade Organisation (backed by the weight of global financial markets), have used their power to impose the ‘Washington consensus’ (the neoliberal policy package) on the semi-developed and poor countries. But Chang rightly points to the part played by "ideological influence… exercise[d] through intellectual dominance". With the undermining of the post-war upswing after the late 1960s, Keynesian economics, which had provided the theoretical rationale for post-war capitalism (state intervention, high social expenditure, and attempted management of national economies), was rapidly discredited among capitalist leaders and hired policy-makers. 

Keynesianism was replaced by ‘monetarism’, advocated by Milton Friedman and the ‘Chicago school’ of economists, and subsequently by a much broader neoliberal agenda. As Chang says, the ‘managerial classes’ (more accurately, the capitalist business elite and their political allies) "have used their economic and political influence to spread the free-market ideology that says that whatever exists must be there because it is the most efficient". This stance, a carte blanche for speculators, was exemplified by Alan Greenspan, head of the US Federal Reserve, who supplied the super-credit that fuelled a series of asset bubbles. After the financial meltdown in 2008 he belatedly confessed that he had been mistaken in believing that markets are always self-correcting.

‘Ideology’ can be used as a neutral description of a body of ideas or an intellectual trend. But in this context, ideology refers to ideas (in this case neoliberalism) that are presented as an accurate, even scientific representation of socio-economic reality, but are a completely one-sided, distorted representation of reality. Moreover, these pseudo-objective ideas conceal the interests of particular social groups, in this case the big capitalists of the advanced capitalist countries, especially the finance capitalists. It seems as clear as daylight that the extension of market relations benefits those who play the markets, the big financial institutions and wealthy speculators. To counter this politically inconvenient ‘impression’, armies of economists are drafted in to show that the market is the best way – in fact, the only way – of organising the economy. The basic tenet of mainstream economics is that ‘there is no alternative’ (Tina).

Chang makes this point very forcefully: "The free-market policy package, often known as the neoliberal policy package, emphasises lower inflation, greater capital mobility and greater job insecurity (euphemistically called greater labour market flexibility), essentially because it is mainly geared towards the interests of the holders of financial assets".

Chang explains why these policies favour finance capitalists: "Inflation control is emphasised because many financial assets have nominally fixed rates of return, so inflation reduces their real returns. Greater capital mobility is promoted because the main source of the ability for the holders of financial assets to reap higher returns than the holders of other (physical and human) assets is their ability to move around their assets more quickly. Greater labour market flexibility is demanded because, from the point of view of financial investors, making hiring and firing of the workers easier allows companies to be restructured more quickly, which means that they can be sold and bought more readily with better short-term balance sheets, bringing higher financial returns".

Neoliberal economics reflect these economic relations, which developed apace after the Thatcher-Reagan ‘revolution’ (in reality, counter-revolution) of the early 1980s. Before that time, the monetarist ideas of academics like Friedman were viewed as merely the cranky notions of a minority of right-wing economists. But with the return of major capitalist economies to more brutal market policies (with the rolling back of state social spending), monetarism and allied doctrines began to flourish. By providing theoretical justification, ultra-free-market economics played a part in reinforcing market policies, and providing legitimacy. 

This is not to say that neoliberal ideology played a merely passive role, providing intellectual support only after the new relations had developed. Neoliberal ideology was used as a political weapon by the ruling class, especially the Anglo-American ruling class and especially after the collapse of the Stalinist regimes, to extend and deepen market relations on a global scale. In the absence of any ideological alternative from the leaders of the traditional workers’ parties, neoliberal ideas swayed big sections of public opinion and helped create electoral support for out-and-out pro-market policies.

 

The role of neoliberal economists

 

CHANG LEVELS A series of searing criticism against free-market economists – who now dominate the profession – which add up to a devastating indictment. "During the last three decades", he writes, "the increasing influence of free-market economists has resulted in poorer economic performance all over the world". He notes that during their periods of ‘miracle’ growth, economies like Japan, South Korea, Taiwan and, more recently, China, were run mainly by lawyers and engineers, not economists. Where free-market economists intervened in semi-developed economies, like Chile, where the monetarist ‘Chicago boys’ advised the Pinochet dictatorship, accelerated economic growth was based on the savage driving down of workers’ living standards and the systematic suppression of democratic rights. "There are reasons to think", Chang says, "that economists may be positively harmful for the economy" and "for most people".

Chang refers to the incident when the queen visited the London School of Economics in June 2009. It was as if the fable of the emperor’s new clothes was reversed. Referring to the great crash, a naïve monarch asked the assembled economists: ‘How come nobody could foresee it?’ (If the queen had been reading Socialism Today over recent years, she would not have been surprised by the crisis, which we clearly predicted.) On behalf of their embarrassed colleagues, two professors, Tim Besley and Peter Hennessy, tried to provide an answer (Letter, 22 July 2010). Individually, they claimed, economists were all doing a good job. But there was a "failure of the collective imagination of many bright people… to understand the risks to the system as a whole".

Chang contemptuously dismisses any suggestion that economists are merely ‘innocent technicians’ who were all doing a good job until they were hit by an unpredictable crisis. Over three decades, "economists played an important role in creating the conditions of the 2008 crisis… by providing theoretical justifications for financial deregulation and the unrestrained pursuit of short-term profits". They advanced theories which justified policies that led to slower growth, greater inequality, job insecurity, etc, and the intensified exploitation of underdeveloped countries. 

However, Chang’s explanation of the role of free-market economists is weak, to say the least. "It may be", he says, "that the economics taught in university classrooms is too detached from reality to be of practical use". He believes, "we need different kinds of economics from free-market economists". 

In effect, Chang is arguing that the ‘wrong’ kind of economists should be replaced by the ‘right’ kind. Good economists would promote long-term investment and technological innovation. They would base themselves on a "nuanced view of capitalism, not the simplistic free-market view". A nuanced view would embrace a complex mixture of "markets (public and private), bureaucracies and networks".

Chang suggests that good economists would draw their ideas from an eclectic mix of economists: Karl Marx, Friedrich List (a conservative nationalist), John Maynard Keynes, Joseph Schumpeter (who advanced a theory of long waves punctuated by episodes of ‘creative destruction’), Hyman Minsky (who developed a Keynesian theory of financial crisis), and other Keynesians.

Chang’s criticism of free-market economists is correct, as far as it goes. But he fails to understand why they came to dominate. It was not because bad economists ousted good ones. The rise of neoliberal economics reflected deep-seated changes in the advanced capitalist countries, with the emergence of new economic forces – which found enthusiastic allies among the economists. After all, huge armies of economists are employed (on huge salaries and bonuses) by the big financial institutions, mainly to assess the short-term profitability of investments, while academic economists provide the theoretical rationale for the ultra-free market drive for profits. Economists like Chang, who tenaciously challenges the neoliberal orthodoxy, are a rare breed in academic circles.

The case for planning

 

REFERRING TO KARL MARX, Chang points to the fundamental contradiction of capitalism: the production process is socialised while ownership of the means of production is private. He very clearly shows that production under advanced capitalism depends on a high level of social organisation and cooperation. But his main purpose in taking up this argument is to use it against the false idea of neoliberal economics, according to which success under capitalism depends on visionary entrepreneurs competing as individuals in a free market that is merely an arena for competition. Chang recognises that Marx argued that private ownership rules out planning and gives rise to a mismatch between supply and demand, resulting in periodic crises. However, he rejects Marx’s solution, central planning, which he dismisses as a failure. 

"With economic development… the division of labour between firms develops further and as a result the firms become increasingly more dependent on each other – or the social nature of the production process is intensified". Chang points out that giant firms can undertake massive investments and pursue their profit-making activities on a global scale only because they are supported by a range of public institutions, such as a legal system, education and training for workers, public subsidies for research and development, and so on.

However, private ownership of competing firms makes it "impossible to coordinate the actions of those independent firms". Chang correctly refers to the impossibility of coordinated production as a source of periodic economic crisis. He does not, however, refer to the exploitation at the heart of the capitalist system: the expropriation by the capitalists of surplus value (in the form of profit) which represents the wealth produced by workers’ labour power over and above what they are paid in wages. Nevertheless, Chang appears to sympathise with Marx’s argument that "with the development of capitalism… this systemic contradiction would become larger and consequently economic crises would become more and more violent, finally bringing the whole system down".

Chang goes on to summarise Marx’s case for central planning. "All means of production are owned by the whole of society and as a result the activities of interdependent production units can be coordinated ex ante [in advance] through a unified plan. As any potential coordination failure is resolved before it happens, the economy does not have to go through those periodic crises in order to balance supply and demand. Under central planning, the economy will produce only exactly what is needed. No resource will lie idle at any time, since there will be no economic crisis. Therefore, the central planning system, it was argued, will manage the economy much more efficiently than the market system".

But that, says Chang, was theory: "unfortunately, central planning did not work very well in practice". Chang bases his rejection of central planning as an alternative to capitalism on the failure of planning in the Soviet Union and Eastern Europe. Clearly, the writing off of economic planning is one of the main effects of the collapse of the so-called ‘communist’ or, in reality, Stalinist regimes, in Eastern Europe after 1989/90. Like most critics, including those on the left, Chang makes no distinction at all between the kind of planning envisioned by Marx and the reality of planning under a Stalinist dictatorship. The failure of Stalinist planning was rooted in the conditions under which it arose, and does not prove that planning will never work.

Why Stalinist planning failed

 

CHANG’S EXPLANATION FOR the failure of Soviet planning is inadequate, lacking historical perspective. He makes no reference to the fact that at the beginning of the 20th century Russia was an economically and culturally backward country, where the working class was a small minority of the population, though politically powerful. The leaders of the Russian revolution, Vladimir Lenin and Leon Trotsky, did not believe that they could build socialism in Russia in isolation, apart from the development of socialist revolution in the more advanced capitalist countries. For various reasons, the revolution was isolated, and backwardness gave rise to the development of a bureaucratic layer which began to dominate society. Stalin, the political representative of the bureaucracy, carried out a political counter-revolution, wiping out the elements of workers’ democracy established in 1917, and installing a totalitarian regime.

In the early period, as Chang notes, the bureaucracy was able to develop basic industries on the basis of a central plan. However, as the economy developed there was more and more distortion, waste and mismanagement. Chang attributes this to the increasing ‘complexity’ of the economy. This is valid as far as it goes, but misses the fundamental point: that under the Stalinist regime there was no democracy, the working class was politically disenfranchised and allowed to play no role in the management of the economy. There was no feedback from below to check and refine the plan. Local managers were bureaucrats, agents of the central bureaucracy.

Through planning, the Soviet Union was able to lay the foundations of a modern industrial economy, though at enormous cost to the working class. Moreover, planning enabled the Soviet Union to defeat the barbaric onslaught of Nazi Germany during the second world war, and subsequently to provide significant social gains for the population in terms of employment, housing, healthcare and education. However, the quality of consumer goods, in particular, was very poor. In the 1970s, when microelectronic technology began to develop internationally, it became increasingly apparent that the bureaucracy was incapable of systematically applying new technology to the development of production and planning. The incompetence and corruption of the bureaucracy, with increasing dislocation of central planning, led to the implosion of the Stalinist economies in the early 1990s.

Undoubtedly, this had a massive ideological impact. The capitalist class launched an unparalleled ideological offensive to prove that ‘communism’, ‘socialism’, and central planning would not work, were inherently impossible. However, the failure of planning under specific historical conditions does not prove that planning will never work. The failure of Stalinism, moreover, certainly does not prove that capitalism is a viable system with no possible alternative.

Socialist economic planning today, in economically developed countries, would be very different from Stalinist planning in the Soviet Union (which was replicated in Eastern Europe, China, Cuba, etc). First, there is the economic, technical and cultural basis for a much more developed form of economy, which did not exist in the Soviet Union after 1917. At the same time, a dominant working class, mobilised to carry through a socialist transformation, would ensure that both the new socialist state and the economy were subject to democratic control.

Democratically elected planning bodies would draw up an economic plan, which would be continually checked and modified by local bodies. The plan would be based on the nationalisation of the ‘commanding heights’ of the economy, the major manufacturing industries, banks, and infrastructure. Not every small business would be nationalised, but would operate within the framework of a plan. There would also be planning bodies to oversee the development and production of consumer goods, to ensure their high quality and that they met the real needs of the population. This is not a utopian project. As Chang himself shows, all the elements of planning already exist within capitalism. However, they are currently trapped within the limits of the drive for profit, the anarchy of the market, and rival nation states.

Elements of planning within capitalism

 

WHILE DISMISSING CENTRAL planning, Chang, like Marx, nevertheless points to the elements of planning within capitalism. Marx did not dream up central planning out of the blue, but based his ideas on real tendencies within capitalism: the increasing tendency of the state to intervene to regulate the economy and take over major industries, such as utilities; and the elements of planning within capitalist firms, in contrast to the anarchic competition between firms competing in the market. Chang gives more up-to-date examples, but again only as a counter to neoliberalism, not as an alternative to capitalism.

Chang refers to the fact that in times of war, both during the first and second world wars, the state in the major capitalist economies in effect introduced big elements of central planning for the duration of the conflicts, in order to ensure the supply of munitions and industrial materials. Of course, ownership was left in the hands of the capitalists, who later took back control of industries (apart from those that virtually collapsed, like coal, iron and steel, etc). Moreover, Chang refers to the interventionist role played by the state in countries like Japan, South Korea, Taiwan, etc, that experienced rapid economic growth during the post-war economic upswing.

Most importantly, however, Chang points to the planning that takes place within capitalist corporations. "Modern capitalist economies are made up of large, hierarchical corporations that plan their activities in great detail, even across national borders". Many also suffer from the same kind of bureaucratic distortions that existed in the former Stalinist states.

Chang follows Marx’s line of argument: "When [Marx] talked about planning, there was in fact no real life government that was practising planning. At the time, only firms planned. What Marx predicted was that the ‘rational’ planning approach of the capitalist firms would eventually prove superior to the wasteful anarchy of the market and thus eventually be extended to the whole economy. To be sure, he criticised planning within the firm as despotism by capitalists…".

Chang points out that the "area of the capitalist economy that is covered by planning has in fact grown". For instance, it is estimated that "between one third and one half of international trade consists of transfers among different units within transnational corporations".

"Between the planning that is going on within corporations and various types of planning by government, modern capitalist economies are planned to a very high degree". This is true. However, big corporations still compete with one another in pursuit of profit, and there is particularly intense competition on international financial markets. It is still the case, despite the planning within big corporations that, ultimately, the irrational element of competition through the market still predominates over the elements of rational planning within corporations and through state intervention. That is why capitalism has again plunged into a global crisis, the worst since the 1930s.

Chang recognises the elements of planning within capitalism, but he mistakenly believes that there can be a major shift towards planning in the system as a whole, without fundamental change. Chang draws on Marxist ideas to criticise contemporary, ultra-free-market capitalism. But on every major issue, he stops short, draws back, and reverts to the idea that somehow an ideal capitalism can emerge. He favours a "modern economy in which government policy, corporate planning and market relationships are all vital and interact in a complex way".

 

A ‘better’ capitalism?

 

CHANG REJECTS THE free-market model of capitalism, which led to the catastrophe of the 2008 financial crisis and plunged the world economy into depression. "The last three decades have shown that, contrary to the claims of its proponents, [free-market capitalism] slows down the economy, increases inequality and insecurity, and leads to more frequent (and sometimes massive) financial crashes". Therefore, he concludes: "The daunting task ahead of us is to completely rebuild the world economy". Moreover, "nothing short of a total re-envisaging of the way we organise our economy and society will do". This sounds revolutionary! However, Chang makes it clear: "My criticism is of free-market capitalism, and not all kinds of capitalism". 

"There is no one ideal model". So Chang sets about creating – or at least imagining – a new model of capitalism. Like an enthusiastic shopper going round a supermarket, he picks different components off the shelves of the global superstore.

In his model he would include elements of the Nordic economies, with highly developed welfare systems (at least, until recently). Figures presented in his book show that for a long period they had higher growth rates than the US and most economies based on free-market policies. Chang also selects some components from the Southeast and East Asian model, having noted with approval the role that the state played in laying the foundations of modern industrial economies in Japan, South Korea, Taiwan and other economies in the region. There is room in his model for some of the ‘indicative planning’ used by countries like France, where the government has used subsidies and tax incentives to stimulate (and protect) key industrial sectors. There is also a role for the market in Chang’s scheme, but it would be much more regulated than now.

Based on this model, there would be – in his scheme of things – a return to Keynesian-type economic policies. Social spending would be protected, while home manufacturing would be encouraged. There would be a return to the (attempted) macroeconomic management of national economies (which implies some kind of protection from short-term capital flows across borders). Governments would invest heavily in research and development, and encourage long-term investment in new technology. Poor and semi-developed countries would be allowed to protect their home industries until they could stand on their own feet (as the advanced capitalist countries did in the past). Enlightened self-interest, based on recognition of longer-term objectives and social needs, would replace the ruthless pursuit of short-term profit maximisation. The market would play a role, but it would be controlled, just one component of the economy.

In other words, Chang is advocating a ‘better capitalism’. This has recently become a familiar theme among left reformists internationally, and they will no doubt draw on Chang’s arguments. But how could this new model capitalism come about? Chang’s approach is completely a-historical, utopian. The components he selects for his model were the products of particular historical conditions in particular countries, and developed on the basis of real economic forces and world relations as they existed at the time. 

In the case of Sweden, for instance, social-democratic governments came to power in the pre-second world war period, because of the strength of the workers’ movement. With relatively favourable conditions for Swedish capitalism during the second world war and the post-war upswing, Sweden developed a highly advanced welfare state. In contrast, Japanese capitalism, as well as South Korean, Taiwanese, etc, developed in the post-war period under the umbrella of US imperialism, which provided economic support for those countries as a strategic buffer against China, that was transformed by the revolution of 1949. 

For historical reasons, the state had always played a major role in the Japanese economy. However, Chang notes that there has been a very limited development of social provision in Japan. The manufacturing base in South Korea, as Chang notes, was developed under the vicious dictatorship of Park Chung-hee, again with almost no social provision for the working class or poor farmers. Recently, however, both Japan and South Korea have entered a period of weak growth or stagnation. South Korea, in particular, has turned towards the implementation of free-market policies. Moreover, under both social-democratic and right-wing governments, Sweden has begun to unwind the welfare state, turning sharply towards the marketisation of the economy and society.

Britain, the US and other advanced capitalist countries turned to neoliberalism after 1980. This was not merely a policy change, but reflected an underlying change in economic relations. During the late 1960s there was a breakdown of the post-war economic relations which supported the long upswing in western capitalism. After the period of ‘stagflation’ (feeble growth combined with high inflation), capitalist governments, beginning with Thatcher and Reagan, concluded that they had to adopt a new approach. A key feature of the crisis was the decline in profitability, and there was a turn by the capitalists towards the finance sector as a source of profits. 

The ‘big bang’ deregulation of financial markets, first in Britain and the US but then in other major economies, opened the door to ultra-free-market financial speculation. This led to the dominance of finance capital described by Chang. This dominance was not just the result of false ideology, or policy mistakes. It reflected a deep-rooted crisis of over-accumulation within capitalism. This meant that new investment in the development of the means of production no longer produced the levels of profit required by the capitalist class. The turn towards the finance sector, which accelerated in the mid-1990s, reflected this underlying crisis.

The necessity of a socialist alternative

 

FREE-MARKET, NEOLIBERAL capitalism is not just a mistake, or a harmful fashion that will pass given time. It reflects the fundamental character of capitalism in this period. Chang says he accepts the profit motive and the market. But he mistakenly believes that they can be controlled and directed according to some political scheme. For instance, Chang believes there should be a return to long-term investment, based on the development of new technology. But the capitalists largely abandoned that approach, which prevailed in the early period of the post-war upswing, because they were no longer reaping the profit returns that they required. 

The market is not just a machine, a neutral mechanism, that can be harnessed by enlightened governments to produce greater prosperity for everyone. The market is an arena for competitive struggle between the big corporations and financial institutions, whose drive to intensify the exploitation of the working class and increase their profitability inevitably leads to growing social polarisation between rich and poor in society, and increased inequality internationally. 

It is not possible to ‘completely rebuild’ the world economy on the basis of a rational appeal to the enlightened self-interest of capitalists. Fundamental change will come about only through the mobilisation of powerful social forces, primarily the working class. Change, moreover, would have to be on the basis of a change of ownership of the commanding heights of the economy, the big corporations and financial institutions. This would precisely require the economic planning envisaged by Marx, both on a national and international basis.

Chang hesitates to take this step. He believes that the predatory neoliberal capitalism of today can be changed into a benign, people-friendly capitalism run by enlightened leaders. But his project is doomed to failure. Capitalism faces a period of depression, with the possibility at any time of further, even deeper crises. The consequences internationally for the working class, the exploited rural labourers, and the dispossessed will be catastrophic. The effective defence of workers’ living standards and democratic rights will only be possible through a struggle against capitalism and for an alternative socialist society. Mass prosperity, greater equality, social welfare, enlightened mass education, technological advance – all the things which Chang clearly values – will become possible only on the basis of socialist economic planning, which for Chang is unfortunately a step too far.

The socialist alternative to media corruption

RCT Socialist Update no. 23

As we are in the midst of the scandal surrounding Murdoch's media empire and the lengths of corruption they will go to which have implicated both the police and politicians several questions are raised. Is this isolated to News International? Has this happened simply because the controlled so many media outlets? or rather is this systematic of a media which is owned and controlled by the rich and pumps out their ideology.

This week we wil be discussing this very issue at our branch meeting, come along to discuss this question and what a socialist alternative for the media is, in the meantime you can read this article taken from the socialist http://www.socialistparty.org.uk/articles/12389/11-07-2011/take-over-murdochs-press 

Come along to the meeting
Wednesday, 7.30pm
Otley Arms, Treforest

Take over Murdoch's press!

The following is the editorial of the socialist issue 679

'Murdochgate', the News of the World (NoW) scandal, is Britain's Watergate. In politics, as in nature, the 'butterfly effect' operates.

A seemingly small event - the famous metaphor of the flutter of a butterfly's wings - can begin a chain of events resulting in massive unforeseen consequences.

In the case of the 1970s Watergate break-in, it led to the discrediting and downfall of Richard Nixon, the president of the most powerful nation on earth, the US.

David Cameron and his corrupt, rotten government deserve the same fate today.

Watergate exposed the rottenness at the heart of the US administration and threatened the social system it was based upon, capitalism. The US ruling class took fright, in particular, at the seemingly out-of-control, semi-dictatorial regime of Nixon and his acolytes, which continued and expanded the adventure of the Vietnam War that was not over by the time of his eviction from the White House.

But Watergate also lifted the lid to expose the web of lies and conspiracies involving capitalist politicians, criminals and the state. Only by the diligence of a few committed reporters and the fact that Nixon had taped all his crimes and misdemeanours did the truth eventually come out.

Similar revelations are now taking place here. Cameron, the Murdoch empire and the police have been involved in a corrupt attempt to subvert the democratic rights of the British people.
Lowlife hacking

It was the exposure of the disgusting hacking of murdered schoolgirl Milly Dowler's mobile phone by the lowlife employed by Murdoch's News International (NI) which represented the tipping point.

The mass outrage that this provoked - similar to, but on a much larger scale than the reaction in Liverpool to the Sun newspaper's attack on Liverpool football fans following the 1989 Hillsborough disaster - shattered the plans of Murdoch and others like Cameron and the Coalition government to ride out the storm provoked by the hacking scandal.

Only days before, it was clear that the so-called Culture Secretary, Jeremy Hunt, was preparing to agree to Murdoch's bid for majority ownership of satellite TV station BSkyB which would allow him to control 40% of Britain's media outlets.

It is very doubtful - if not ruled out - that even Cameron could proceed to ratify this deal in the face of mass outrage at the Murdoch empire and its acolytes.

A mass campaign to oppose the deal, largely organised through new media such as social networking, has mobilised 170,000 objections to the takeover of BSkyB!

Further revelations about the hacking of the families of war dead and the relations of the 7/7 London bomb victims in 2005 only reinforced the mood.

In the wake of the latest revelations, politicians, capitalist reporters and commentators, and the police who hid the evidence of criminal activity by Murdoch employees - including those at the top of NI, chief executive Rebekah Brooks and Murdoch's son James, were all hypocritically and nauseatingly scrambling over one another to distance themselves from their former patron.

Alastair Campbell, public relations front man for former Labour prime minister Tony Blair, rubbished weapons expert David Kelly and journalist Andrew Gilligan for telling the truth about the Iraq war 'dodgy dossier' and Saddam Hussain's alleged weapons of mass destruction.

Now, with a straight face, he writes in the Financial Times [11 July]:

"At the reception [for Rebekah Brooks' wedding] I had a brief conversation with Mr Cameron. I said I hoped he would not win the upcoming election, but that if he did, and if he wanted to act to improve political debate and standards in the press, I would support him... 'It's got worse, hasn't it?' he said.

"I replied that he would be a much stronger prime minister were he to take office not feeling he owed anything to the big media groups.

"At that point Mr Murdoch joined us, and we changed the subject. Perhaps we should not have done so.

"That we did, however, illustrated something of the dishonesty at the heart of what are essentially political and commercial relationships."

Cameron has even had the brass neck to argue 'we were all in it together' in kowtowing to Murdoch.

Well we aren't!
Socialists vilified

(Click to enlarge)

All those who fought back against capitalism were vilified mercilessly by the Murdoch and right wing gutter media in general. Tony Benn, when he stood for the deputy leadership of the Labour Party in 1981, was compared to Hitler, as was miners' leader Arthur Scargill before, during and after the 1980s miners' strike.

The heroic Liverpool Militants in the 1980s, along with those who scored a victory over Thatcher in the epic battle against the hated poll tax, were singled out for special treatment.
Tommy Sheridan speaking at a Campaign for a New Workers Party meeting in Liverpool, photo Harry Smith

Tommy Sheridan, photo Harry Smith

Scottish anti-poll tax leader and socialist Tommy Sheridan is in jail today, convicted of perjury because of a personal vendetta by Murdoch, who reportedly vowed to ‘get this little communist’.

The latest revelations have subsequently demonstrated that the successful prosecution of Tommy was only made possible by the lies and cover-up given to the court by Murdoch’s ‘witnesses’.

These included the Scottish editor of the NoW and Cameron’s communications director, Andy Coulson, who claimed they knew nothing of phone-hacking or payments to police officers. They clearly misled the jury and were also guilty of denying the existence of emails and other evidence which would have helped Tommy in court.

Cameron, Osborne and the rest of the gang that dominate this illegitimate Coalition government cannot be allowed to just distance themselves from Murdoch now.

Cameron and his wife wined and dined, and 'hacked', in the horse-riding sense, with Rebekah Brooks and James Murdoch. They were as thick as thieves in what was dubbed the 'Chipping Norton' set.

Cameron unbelievably still describes Coulson as a 'friend': 'Tell me who your friends are and I will tell you who you are.'

More importantly, this affair has exposed the virtual stranglehold which Murdoch has exerted over British government policy and all important aspects of life in the last decades.

One Murdoch editor told John Major - the previous Tory prime minister - that he would pour 'a big bucket of shit' over his head if he did not comply with Murdoch's orders.

Andrew Rawnsley, of the Observer commented that "the foul stuff was duly tipped over him".

Blair famously flew to Australia to get on his knees to Murdoch in order to gain his support before the 1997 election.

Once elected, Murdoch was often referred to as the '24th member of the Cabinet'!

Murdoch visited Blair three times personally in order to pressurise him on behalf of George Bush to support the Iraq invasion. Not that Blair needed all that much persuasion.

But it is a fact that the mass of the British people demonstrated unequivocal opposition to this; but that was seen as incidental. The diktats of American imperialism, through the medium of Murdoch, were pre-eminent.

Moreover, we learn now that as Blair was preparing to leave Downing Street in 2007, Murdoch was already lurking in a Bentley ready and eager to see the new man Gordon Brown to press on him his orders!
Labour shame

It is to the eternal shame of 'Labour' leaders that it has been media 'personalities' like Hugh Grant and comedians like Steve Coogan who have been left to tell some of the truth about NoW and Murdoch.

Coogan stated on Newsnight [8 July]: "People keep saying it is a very bad day for the press. It is a wonderful day for the press: a small victory for decency and humanity... People talk as if they [NoW] have fallen below their usual high standards.

"They were already in the gutter, it is just that they have sunk lower than anyone thought they could."

Even now, with his back to the wall, Murdoch, through his acolytes, has warned new Labour leader Ed Miliband that News Corporation 'will turn on him and his staff' for having the temerity to demand the resignation of Rebekah Wade at the same time as he expressed opposition to the BSkyB deal going ahead.

However Miliband demanded this only after the scandal of the Milly Dowler hacking was revealed.

Moreover, his strategy director, Tom Baldwin, was urging Labour MPs only a few weeks ago not to raise the issue of Murdoch's takeover of BSkyB!

Miliband sipped champagne while attending Murdoch's summer party just weeks previous to this! He now claims this was merely a 'social occasion'! Nothing could be further from the truth.

All the evidence shows that Murdoch invitees are there to be politically 'nobbled', to ensure that political leaders of all the main parties toe Murdoch's line.

If they don't, they can expect the kind of treatment meted out to the 'uncompliant'.

Murdoch even tried to use Tony Blair to lean on Gordon Brown when he was prime minister to silence Labour MP Tom Watson, who has courageously been to the forefront together with Guardian journalists like Nick Davies in exposing this scandal.
Warped democracy

All of this indicates the warped character of British 'democracy'. The Observer, in its 10 July 2011 editorial, admits as much: "Over 40 years, Murdoch convinced the establishment that he can make or break political reputations and grant or take away electoral success.

"In doing so, he has come close to gelding parliament, damaging the rights of citizens and undermining democracy."

Everyone can have their say and vote as they like so long as the big capitalists and the hired liars in the press and the media can decide what happens.

It is not just Murdoch who exercises semi-dictatorial rule in seeking to shape public opinion in Britain.

Equally undemocratic are those press moguls like Paul Dacre of the Mail group whose journalists often dip their pens in mad-dog saliva against individuals and the labour movement.

The concentration of media ownership has now produced a situation whereby ten corporations own 75% of the media. This has resulted in huge job losses among journalists.

200 journalists and other staff have lost their jobs with the closure of the News of the World. We can honestly say that we do not regret the demise of this muckraking paper.

But no one can support, in a period of mass unemployment, people being thrown out of their jobs and in such an arbitrary fashion.

And how many tears were shed by the capitalists for the thousands of workers who lost their jobs when Murdoch moved his newspapers lock, stock and barrel to Wapping in 1986?

However, the current undemocratic situation of the press and the media in Britain will not be cured by a few cosmetic measures such as 'the strengthening of the press complaints committee'.

This will be no more effective in checking anti-working class gutter journalism than police violence will be checked by the police investigating themselves.

Nor is it sufficient merely to call, as some on the left incredibly have done, for the 'break-up of the Murdoch Empire'. We don't want mini-Murdochs to replace the slain monster.

All those responsible for violating the confidentiality and rights of individuals should be brought to book, charged and if found guilty should receive the appropriate punishment.

But even if this was to happen it would not alter one jot the grip exercised by undemocratic forces - beholden to capitalism - over the media.
Socialist media

New alternative socialist media must be built by the trade unions and working people. But this must be accompanied by raising now the need, in the first instance, for the democratic nationalisation of the printing presses, television and radio under democratic popular management and control - beginning with the state confiscation of the resources of News Corporation, which has demonstrated that it is a danger to democracy itself.

We, the working class and the labour movement, do not want to take over the Sun, the Daily Mail or even the 'august' Guardian.

We opposed the state monopoly of news and information that existed in Stalinist states. The real alternative is democratic working class and popular control of the press and media in general.

This will not result in a monopoly for the government or one party but allow access to the media in proportion to political support. Capitalism and Stalinism defend undemocratic control of the media by a minority.

Socialists stand for taking the 'production of information' out of the hands of a minority and into the hands of the majority, which would allow full freedom of discussion and decision-making.

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