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Bertrand Russell Peace Foundation
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Catalogue
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Editorial
Browned
Off
Although
it had been gradually dawning over recent years, there has now been a sudden
flash of general realisation that Mrs. Thatcher has gone on and on and on. Now
it is crystal clear. Many people thought a long time ago that Tony Blair was a
continuator of all the essential principles of Thatcherism, only more ruthless
and, if possible, less sentimental. But this realisation has become
inescapable, because it is now clear as crystal that Gordon Brown is cast in
exactly the same mould.
Over
recent years, his jockeying for position has from time to time meant that he
has developed an appearance of difference from Blatcherism. True, he has made
different speeches at Labour Conferences, and remained sensitive to various
elements in old Labour rhetoric. But watching him appearing at the Trade Union
Congress in 2007, and following his resolute despatch of low-paid public
sector workers with a below inflation imposed settlement in their pay, we
cannot fail to be aware of his benign approach to the bonuses of major company
directors. Equality of outcome is nowhere to be seen.
Half
the population in Britain today, taken together, earns only one-third of the
combined income of three per cent of our fattest cats.
Manifestly
the age of Thatcher will one day come to an end, and that may be soon. It
cannot be sustained, and it is only tolerated because the entire political
class has been corrupted in its presence. The result of this corruption
manifests itself in various disintegrations. In England, the disintegration
most visibly affects the social fabric, as parts of the underclass arm
themselves for ferocious shootouts with rival contenders, and children knife
one another at school. Gang warfare breaks out in our cities, as drug lords
assert their sway over entire territories. Social disintegration makes
increasing areas of our cities uninhabitable for the respectable poor, whose
wages are frozen while their problems intensify.
Things
are apparently different in Scotland, where an authentic Social Democrat has
come to head the Government, as the Scottish Nationalists have provided an
area of genuine, if restricted, choice for a people much put upon by the
indignities of Blatcherism. The justified hatred of Thatcher in Scottish
coalfields will yet cause trouble for her most recent host in Downing Street,
whose constituency suffered grievously from her depredations.
Before
the downfall of Tony Blair, Richard Brooks, the Fabian Research Director,
asked if it were time for a further revision of the Labour Party’s
Constitution, rectifying the new Clause IV. This consists of such anodyne
verbiage that it is unlikely that any politician would want to alter it,
running the risk of accidentally making an actual commitment to do something
or go somewhere.
The
revised Clause IV is such babble that it will be impossible to refine it
without running the risk of meaning something. The reason for Blair’s
constitutional reform was claimed to be that the original Clause, as drafted
by Sydney Webb, promised one or another form of public ownership of the means
of production, distribution and exchange. It has been universally
forgotten that this undertaking, which was by some people thought a little
rash, had already been extensively revised by the incorporation of an addendum
drafted under the influence of Hugh Gaitskell, which merely insisted on the
maintenance of a mixed economy. It does not cross Mr. Brooks’ mind to ask
where the mixed economy went. But since the annulment of the Labour Party’s
commitment to socialism, it has become clear why the mixed economy perished at
the same time as public ownership of production, distribution and exchange.
The new firm was just as committed against the revisionist aim as it was
against the original Ark of the Covenant. Neither Tony Blair nor Gordon Brown
wanted any truck with a mixed economy, because it was their avowed intention
to privatise all of it. The New Labour project was about eliminating public
ownership in any form, and establishing the complete, final and total
domination of the market place.
That
is why Richard Brooks finds ‘equality is a difficult issue, both in theory
and practice’. In a market society, inequality is an absolute precondition
of economic activity. Competition rules, and where competition is the main
motor of activity, some win, and this needs others to lose. As the losers
become more and more numerous, the winners become more and more rich. As
democracy wanes, the military needs to wax.
‘Why’
asks Richard Brooks, ‘should a child born into poverty have worse health,
poorer education prospects, a higher risk of being a victim of crime and a
shorter life expectancy than one born to middle class parents? It might be
argued that the right objective is not equality but minimum standards for all
– and never mind what happens to those who are more fortunate.’
Alas,
this is not obvious to the majority of Party members, continues the Fabian
researcher. We need to come to a better understanding of this issue, or risk
the return ‘to a situation where the members no longer believe in the stated
objectives of the Party’.
It
might be thought that if the members no longer believed in babble, that this
could represent a useful step forward. But this is not the present day Fabian
belief. Modern political Parties are prototype advertising agencies, selling
access to the sources of power. The only problem with babble as a stock in
trade, they believe, is that people might cease to believe it, so that the
creative task that must be faced is the constant renewal of its credibility.
Perhaps
this might not need so much renewal if it stayed closer to political
realities, but this could mean diluting the babble quotient and opening a
dangerous window on truth. Original Fabians knew that the approach to equality
was difficult, and Bernard Shaw once even claimed that he favoured precise
mathematical equality and could see no justification for anything else. More
pragmatic Fabians believed in the inevitability of gradualness, and preached
an approach to equality which could, perhaps slowly, render us all more equal
than we used to be.
The
Russian Revolution learned from this principle and insisted that Communist
Party members apply a rule in which the wealthiest drew no more than four
times the remuneration of the poorest. This differential could be (and was)
varied by allowing greater differentials: but it could also, in principle, be
varied by narrowing the gap. But there is no way in the world that old Fabians
could have bought into current Labour doctrine on the income distribution
appropriate to modern economies.
Of
course, a crucial argument for public ownership was that it was believed to
facilitate the narrowing of differentials, on the grounds that democratic
ownership would tend to restrict the rewards of leaders to levels more
acceptable to the led. The good manager might be worth a premium to the
collective: but that premium would not exceed the rational expectations of
those over whom his or her managerial talents were to be exercised. To give
the boss twice your wages would seem to many cooperative workers to be more
tan generous, and the Russian rule that they be given wider differential of up
to four times would seem excessive. But Gordon Brown’s rule that the wheels
of industry will stop if the fat cats are not given a hundred times the
rewards of normal people, could not be defended anywhere.
At
the beginning of October 2007, The Independent reported:
‘The
bonanza in boardroom pay has become even more spectacular, according to the
latest figures from the accountancy firm KPMG. The typical chief executive of
a FTSE 100 company has seen their total remuneration rise by 12 per cent in
the past year, to reach over £2.6m. That’s four times the rate of increase
in average earnings, leaving the business élite on pay over 100 times what
most of their employees earn.’
(1).
That
is why the babble industry has done so very well, because few have the ability
to provide a coherent justification for inequality on the modern scale, and
without sufficient babble to anaesthetize the sound of injustice you will one
day need a very large army. Alas, at present, that is all away, playing the
Great Game in the wastes of Helmand, or learning the arts of self-defence in
Basra’s airport.
Behind
the babble, somebody does the actual counting. Alan Greenspan recently told
the Financial Times (17 September 2007) that there was one very odd
feature in the ‘global market nirvana’ which characterises today’s
economy, to wit:
‘Profits
are much higher than they should be in a world of ever intensifying global
competition.’
Greenspan
says:
‘We
know in an accounting sense what is causing it. The share of worker
compensation in national income in the US and some other developed countries
is unusually low by historical standards. But we don’t know in an economic
sense what the processes are.’ In the long run, he says, ‘real
compensation tends to parallel real productivity, and we have seen that for
generations, but not now. It has veered off course for reasons I am not clear
about.’
The
Financial Times reports that Mr. Greenspan expects some normalisation
of profit and wage shares, but he remains puzzled about why the proportions
have shifted.
‘He
worries that if wages for the average US worker do not start to rise more
quickly political support for free markets may be undermined.’
So
it may, indeed, be time to revisit Clause IV.
A
loud knock on the door was heard during the Northern Rock crisis, when the
much-celebrated independence of the Bank of England seemed to have been
overruled by Government intervention in order to guarantee personal savings in
that beleaguered bank. Commentators were quick to point out that this amounted
to a decision to nationalise the Bank. Up to a point, Lord Copper. But it does
without doubt amount to a dilution of the pure essence of Thatcherite
doctrine. And if the crisis which has already visited the United States,
Germany, Spain and
No
doubt these matters might have impinged on the discussions between the Prime
Minister and Mr. Greenspan during his visit to Downing Street (2).
Attempts to explain the remarkable story of the General Election that never
was have tended to hinge on allegations of electoral opportunism. Mr. Brown,
it had been said, was enjoying a surge of support, a ‘bounce’ which put
him strongly in the lead in the polls. All this had been a very abrupt
development, but it was to be quickly matched by an equally abrupt
transformation, in which Mr. Cameron was to appear the runaway success story,
while the Prime Minister’s poll scorings fell further and further away. On
the surface, this seems to offer a reasonable if unflattering explanation for
what happened. But the futurology of polls is a less than reliable indicator
of likely outcomes. And what was Mr. Greenspan telling his friend
during that visit?
The
Financial Times (26 September 2007) was quite lonely in insisting that:
‘As
Gordon Brown attempts to read the election runes, statistics charting the
outlook for the UK economy will consume the Prime Minister almost as much as
polling data from key marginal seats.’
There
are already many economic numbers freely available, to sustain arguments for
and against an early election. But the Financial Times is right when it
says that:
‘The
big “what if?” that may keep the Prime Minister awake at night, however,
is whether Northern Rock was an exception or a sign of a generalised malaise
in the management of the British economy.’
Gabriel
Kolko already posted a warning in his article for The Spokesman. But is it likely that Alan Greenspan was not alive to all
these issues? And is it not possible that what tilted Gordon Brown towards an
early election was precisely the anticipation of severely turbulent economic
weather to come?
The
resurgence of Conservative support made any such calculation problematic. If
Labour could prepare for bad times to come with a runaway election victory,
even one secured only in the nick of time, opportunity would certainly knock.
But if Labour were to reap a setback, even a hung Parliament, this would not
help in the least in the negotiation of hard economic times to come.
We
are not privy to the thoughts of Mr. Greenspan, and we don’t know about the
apparently feverish changes of mind in Downing Street during those troubled
days. But it does seem, on balance, that economic uncertainty, and political
turbulence, are on their way back among us.
How
long will it be before the ethos of public intervention, or indeed of public
enterprise, also begins to reappear among us?
Ken
Coates
Notes
(1)
Sean O’Grady elaborates further:
1
‘In
the case of those chief executives still in post, their income went up by 16
per cent, accelerating last year’s 9 per cent rise. The chief executive of
one of the smaller FTSE 250 companies would expect to see a total package of
just over £1m, up from £878,000 in 2006. Britain’s top corporate earner is
probably still Bob Diamond of Barclays Capital, who took home £22.9m last
year, including a performance-related bonus of £10.4m. Others in that bracket
include Bart Becht, chief executive of Reckitt Benckiser, the man behind Mr
Sheen, on £22m; Giles Thorley, head of Punch Taverns, making ends meet on £11m;
and Lord Browne, late of BP, similarly well-looked after. Mr Thorley’s
package is equivalent to 1,147 of his staff’s pay. Taken together, the
directors of FTSE 100 companies collectively earned £515m last year –
exceeding the GDP of the likes of Eritrea and the Seychelles. Looking around
the boardroom, we find the average FTSE 100 finance director can expect to see
around £1.4m land in his bank account, with other executive directors on
around £1.2m. For the FTSE 250, the equivalent figures are £623,000 and £544,000.’
(Back to text)
(2)
This visit, which took place on Monday 17 September 2007, was part of a
concerted series of meetings with the American financial establishment. Visits
were received from the Chairman of the US Federal Reserve, Ben Bernanke, on
Friday 21 September, and Henry Paulson, the US Treasury Secretary, who met
with Chancellor Darling and the French Finance Minister, also on 17 September.
It seems that the British were being persuaded to intervene more directly in
the crisis of Northern Rock. (Back to text)
**************************************
Nothing,
therefore, is really in question, or ever has been, but the differences
between class incomes. Already there is economic equality between captains,
and economy equality between cabin boys. What is at issue still is whether
there shall be economic equality between captains and cabin boys. What would
Jesus have said? Presumably he would have said that if your only object is to
produce a captain and a cabin boy for the purpose of transferring you from
Liverpool to New York, or to manoeuvre a fleet and carry powder from the
magazine to the gun, then you need give no more than a shilling to the cabin
boy for every pound you give to the more expensively trained captain. But if
in addition to this you desire to allow the two human souls which are
inseparable from the captain and the cabin boy and which alone differentiate
them from the donkey-engine, to develop all their possibilities, then you may
find the cabin boy’s work does not do so much for the soul as the
captain’s work. Consequently you will have to give him at least as much as
the captain unless you definitely wish him to be a lower creature, in which
case the sooner you are hanged as an abortionist the better.
George
Bernard Shaw
Preface
to Androcles
and the Lion
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