Stand by steel – make the rich pay
A statement from Left Unity in Wales on the steel crisis.
The crisis in steel is not being produced by any one country but is another outcome of the failure of capitalism to pull out of the financial crisis of 2007-08, as is the wider collapse in the price of commodities. Workers in no country should pay the cost of this crisis and should insist on state support.
Left Unity Wales has been taken to task for making reference to the anti dumping financial support that is available from the EU.
But our position is clear. The banks were bailed out and some nationalised as they were ‘too big to fail’. What is left of the steel industry in Wales, UK and EU needs to be supported as it is too important for the jobs, the communities and supporting a functioning economy. EU funding provides immediate support on those grounds, However, like what should have happened to the banks, steel needs to be nationalised, placed under collective control and subsidised at the same time, with a planned economic strategy drawn up for a long term future.
As can be seen from this article in the Guardian today, the steel industry in China is facing collapse from the same crisis. The article also details how Chinese workers are also taking direct industrial action to fightback. If there was a move to occupy the steel works in Port Talbot, supported by us all in Wales, the UK and the EU, it would be the best message of international solidarity. Workers in all countries are victims of the same crisis. http://www.theguardian.com/world/2016/jan/22/chinese-steel-production-abandoned-mills-broken-lives
At a wider and deeper level, it is increasingly becoming clear that capitalism is rotten to the core and unable to cope with the crisis situation. There are deep economic structural and process problems that have caused this situation and we are being forced to pay the cost to sustain the wealth and incomes of the 62 billionaires that own 50% of the global wealth.
Ha-Joon Chang also writing to today’s Guardian recognises the problem and appeals for investment in the real economy and a reduction in inequality – all of course without mentioning the word socialism. No wonder he sees the implementation problems! http://www.theguardian.com/commentisfree/2016/jan/21/dont-blame-china-global-west-economic-recovery-asset-bubbles
However, Michael Roberts is a more helpful guide to what is going on and is prepared to argue for radical steps toward socialism. His recent second article on the crises of capitalism, links a long run tendency of the rate of profit to fall, to damaging and wasteful booms and slumps that characterise our economic system https://thenextrecession.wordpress.com/2015/12/29/the-marxist-theory-of-economic-crises-in-capitalism-part-two/
If you look at his diagram from the article you can see where we are in the process. Look at the green and blues boxes at the bottom – sounds familiar?
https://thenextrecession.files.wordpress.com/2015/12/profit-cycle.png
Radical change is not going to happen unless we fight for it.
First, by making the demand that workers and communities should not be forced to pay for the crisis and throwing back the problem to those who created or won’t challenge those who have. Second, mobilising direct and political action in support of the demands. Third, building the arguments for socialism on the grounds of democratic control, social justice and just plain making things work for people’s needs and not profit. This is what this response is making a contribution toward. However, it will only happen if the fourth element comes into play: a party committed to argue for the need to have power to make the radical changes. Currently that means supporting Corbyn but at the same time sustaining organisational independence from the Labour Party to ensure the argument for changes that are really needed is made.
The labour movement must unite and act now to save the steel industry.
4 comments
4 responses to “Stand by steel – make the rich pay”
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An excellent manifesto until we reach the final two sentences of the penultimate paragraph, “However, it will only happen if the fourth element comes into play: a party committed to argue for the need to have power to make the radical changes. Currently that means supporting Corbyn but at the same time sustaining organisational independence from the Labour Party to ensure the argument for changes that are really needed is made”.
This just comes across as buck-passing. The tasks that have been correctly outlined above appear to be too immense for Left Unity to contemplate playing a leading role in promoting, hence we are to pass the baton to the sow’s ear that we hope might become a silk purse. But, fear not – although we will voluntarily shelve ourselves, we will be there to take over should the fantastical transformation under Commandante Corbyn not come to fruition.
I am also concerned at the reference to the need for a party to come to power. We have just seen in Greece that that event in itself is not enough to secure transformatory change. I think that reference displays some muddle in the minds of our comrades in Wales on the crucial question of the relationship between party and class.
Surely, it is the working class that needs to come to power, not a party. Surely, that happy event needs to be aided by the development by the most politically class conscious people within the working class into an independent party of the class which democratically develops a programme for socialist transformation by the self-acting action of the class.
I would hesitate in giving a person directions when all I had at my disposal was a three sided compass giving me only 270 degrees rather than 360 degrees. The rate of profit is indeterminable without the inclusion of variable capital (the capital advanced for the employment of workers) alongside constant capital. Annual compensation for workers is not variable capital. To deflate annual compensation into variable capital you need turnover times. If the annual turnover of capital is 4 then variable capital will be one quarter the size annual compensation. But without variable capital it is impossible to obtain an accurate rate of profit. Hence pointing in the direction of Michael Roberts is wrong. His tendency for the rate of profit to fall is overstated because it really is the rate of return rather than the rate of profit. For more on this visit my site theplanningmotive.com. Brian Green.
The problem with nationalising ‘lame ducks’ like the steel industry is that it provides the worst possible example of social ownership to workers and the wider public. It is ALWAYS the prelude to ‘rationalisation’ and job losses, and the subsidies ultimately have to come from ordinary taxpayers who come to resent the ‘waste’.
The root of the difficulty is that this is now an integrated global industry, and even if you nationalise the factories, you can’t assert control over the raw materials or the customers. Nationalisation between 1967 and 1988 saw a massive contraction in workers and output. I suspect some of the steelworks will be taken over as going concerns, though things look more doubtful for the blast furnaces. It seems to make things more difficult, but for industries like steel the answer has to be international.
I think the point for socialists is to try and move away from the idea that any work is good work, irrespective of what is being produced and how it is used. Ultimately you get to Keynes’ ridiculous idea of providing subsidised work by digging holes and filling them in. This country is fantastically rich by historic and current global standards. There is no reason why the subsidies that would have gone to inefficient (public or private) industries should not go directly to the workers or to provide for acceptable retraining, but ultimately our answer to this type of situation ought to be to argue for fair distribution of the social product through a generous universal basic income and for a reduction in working hours. Social ownership across the whole economy is naturally desirable, but we should be conscious that it won’t always lead to the production of what is wanted and/or needed by society!
I think you generally make good points, but I also think there is a need for some steel processing on these islands, if only to deal with the mass of steel recycling that currently inevitably occurs. This has fewer environmental costs than processing further away. However, the call for nationalisation and workers’ control should I think also be accompanied by a plan to produce socially useful goods, as you imply. We have already heard complaints that the steel for Hinckley point 2 is coming from abroad. The answer can’t be that it should come from here! I presume similar arguments will arise if they ever start building Trident.