Four immediate steps against the crisis

In an extract from Workers Power’s forthcoming programme, Beyond The Crisis – Beyond Capitalism, Richard Brenner sets out our key measures against the capitalist crisis through putting the working class in control of society
To take society out of crisis, the workers’ movement needs to break with the profit system and advance a programme for socialism. To popularise it, socialists should focus attention on four key measures to end austerity and unemployment.
• Nationalise the banks – merge them into a state bank.
• Fund services by taxing corporations and the rich.
• Cancel state debt – renounce the government debt to banks.
• 30-hour week – jobs for all by sharing the work with no loss of pay
Nationalise the banks
In the 2007-08 crisis, the state took on the liabilities of HBoS, RBS, Northern Rock and Bradford & Bingley, while hiving off their assets to the rich. This socialisation of the banking debt is the real policy of the capitalists in a banking crisis. They perfectly happy to see the state intervene to rescue their profits, and force everyone else to pay the price.
Our answer should be the exact opposite: socialisation of banking wealth. State ownership should be used not to rescue profits but to confiscate them; not to impose cuts in jobs and services but to increase them; not to slash people’s living standards to raise them.
The Bob Diamonds, Stephen Hesters and Fred Goodwins made millions in salaries, share options, pensions and bonuses. This is not because of weak regulation, but the basis of the banking system under capitalism, in which banks compete for revenues ultimately drawn from corporate profits (investment banks) and people’s wages (high street banks).
The union leaders and the Labour left call for tougher regulation, and for state encouragement of lending to cash-strapped businesses. But these demands contradict each other. Banks are insolvent because they made loans that went bad because firms’ profits and workers’ wages were stagnating. So:
• All banks and financial institutions should be nationalised without compensation.
• They should be merged into a single state bank, run not for profit and under democratic control.
• Investment priorities should be decided by public voting and discussion on the socially useful services and projects we want.
• Their managements should be elected, subject to recall and paid the average wage of a skilled worker.
The uncertainty and insecurity facing homeowners and small businesses could be ended with an interest moratorium on current loans, and cheap new loans from the state bank.
The economic data held by the banks would be opened up for public examination. Through televised and digital voting, the working class majority can then control the decisions of the state bank and direct resources where they are needed.
Tax the rich to fund services
Labour Shadow Chancellor Ed Balls, echoing Tory Chancellor George Osborne, tells us that there have to be cuts because the deficit means the state “can’t afford” to pay for the health, education and benefits we had in the past. He promises much the same cuts, only slower.
But the deficit exists in the first place because of massive bank bailouts, plus falling tax revenues brought on by recession and rising unemployment.
The rich demand lower taxes, to encourage investment and “create jobs”, even though tax cuts compel them to do neither. And the Tories oblige, slashing corporation tax and preparing to lower the 50 per cent income tax rate for those on more than £150,000 a year.
Rather than demand taxing the rich, the TUC and the union leaders focus on illegal tax evasion, and on the legal tax avoidance schemes organised by accountants and lawyers in the pay of corporations and the rich. These structure companies, funds and deals to minimise their clients’ legal obligations to pay tax.
It is right to demand the closing of every loophole. But new loopholes will spring up as soon as each old one closes. We can oppose offshore tax havens, but in a global capitalist economy the rich can still move their money around to take advantage of different tax laws.
So we should go beyond TUC calls to limit tax evasion and demand:
• A very high tax on corporate profits, inheritance and high incomes
• Capital controls to restrict export of funds
Companies unable or unwilling to pay should be nationalised without compensation, and individuals caught evading tax should lose all their property. Present day tax rules are extremely complicated and hit the poor far more than the rich. Income tax should be reduced to zero for all low paid workers. Local taxes should be steeply progressive and related to income and wealth.
Cancel state debt
Faced with falling tax revenues and mushrooming unemployment, the British government, like every other state, turns to the banks once again. It borrows huge sums on the international bond markets, which it has to pay off – with interest – to powerful bond holders: banks, pension funds and billionaire private investors.
These then exert huge pressure on governments to secure their ability to repay, by cutting welfare, privatising services, and slashing pensions and pay. Private credit rating agencies assess the credit-worthiness of whole nations, influencing the interest rates that governments have to pay, and with them the pace of austerity and cuts.
Whenever workers oppose the cuts, or call for the rich to pay more tax, austerity politicians immediately insist that this would “spook the bond markets” and threaten Britain’s credit rating. The Labour and union leaders have no answer to this.
In this way a system of private financing for state debt drives a global transfer of wealth from the poorest to the richest in every downturn. This is true not only in very poor countries in Africa and Asia, or in weak intermediate countries like Greece and Ireland, but in the most advanced capitalist countries, including Britain and the US.
• To prevent jobs, pensions, healthcare, education and benefits from being sacrificed for the profits of billionaires, the national debt should be cancelled, and not a penny more paid to the bondholders.
Repudiation of the state debt would of course spark a furious reaction from the bondholders and international financiers, preventing the British government from day-to-day borrowing on the bond markets. But so would any serious attempt to transfer wealth and power from the rich to the poor.
The answer is to boost revenues by taking control of the wealth of the rich, and by putting millions of jobless people back to work.
Debt repudiation would encourage other countries to renounce their crippling debts and trade with one another, despite any bankers’ boycott of them. The people of Greece, Spain, Italy and beyond would see an alternative to austerity open before their eyes.
Some protection would be needed to prevent debt cancellation affecting workers’ pensions. Pension funds that invest in government bonds would be nationalised and pensioners would be indemnified. And Third World countries that owned British government debt would be compensated by aid payments and by the cancellation of their debts to British banks and institutions.
For a 30-hour week
As profits fall, the capitalists try to control their costs. This means cutting pay, closing plants and offices and throwing workers onto the scrapheap.
Unemployment soars in every downturn, but the current crisis sees a sharp rise in joblessness with no prospect of quick relief, as banks withdraw investment and employers prepare to cut back across the board on the eve of a triple-dip recession. Those new jobs that are announced are mainly part-time, precarious or even “zero-hours”, with no guaranteed work and therefore no guaranteed pay.
The Tories have their eyes fixed on employment law, and are aiming to “liberalise” it – by which they mean stripping away even the limited protections of the unfair dismissal and redundancy rules and letting bosses sack at will, with no compensation.
Meanwhile those out of work struggle to get their dole, with new restrictions and checks, compulsory work-for-dole schemes and sick changes demanding that disabled claimants work. Benefits have been slashed along with the free services that the poorest access the most.
But unemployment could be ended at a stroke. We could share all the available socially necessary work among all the adults able to do it.
• Reduce the working week to a maximum of 30 hours
• For a sliding scale of wages and hours, sharing the work with no loss of pay
• Work or full pay: benefits at the level of the average wage in the industry you worked in or the minimum wage, which should be set at £10 an hour for all, young and old.
• Nationalise firms refusing to pay the minimum wage or respect the maximum hours.
• All part-time, casual and zero-hours jobs to be made permanent and protected; abolish the qualifying period for employment protection.
• For a massive programme of state spending on sustainable public works.
• Retirement at 60 on a full final salary pension guaranteed by the state.
A 30-hour week could be a six-hour day across five days, or a shorter week. It could be introduced flexibly to benefit workers with families, with disabilities or with other responsibilities.
And in a socialist society, the productivity of labour would be measured not by private profit but by the shortness of the working week. The fewer hours a worker works in a day, the more they get done in each hour, and the more time they have for other things: family, sport, culture, art and public affairs, including engagement in politics and the running of society.
The shorter the working week, the higher the level of civilisation and the closer the working class is to complete freedom.
The fact that under capitalism rising productivity reduces the number of people in work rather than the length of the working day is the clearest possible sign that it is a system in decline, blocking humanity from realising its potential.