Exposing and Ending the Wage System!
Review of ‘Exposing Right Wing Lies’.
The Question and Answer booklet by Mike Treen of the Unite union is an antidote to the dominant capitalist statistics or “right wing lies”, which the National – Act parties use to justify attacking the working class.
Below we will deal with a few examples of his arguments. Treen’s booklet keeps the debate within the bounds of capitalism. He deals in half-truths to answer the two important questions on the cover – “Who is to blame for the economic crisis and what are the solutions?” and so offers no solution but that of reforming capitalism. We need to go further and apply the Marxist analysis to expose the capitalist economic forces behind the crisis, and the working class answer to capitalist crisis.
This pamphlet is aimed at union members who may be confused by the NACTs attack on workers and sticks to the Trade Union level of consciousness which sees capitalism as a class divided society because the bosses do not pay the full value of wages. Marx, however rejected the wages system itself as a class division based on capitalist ownership and exploitation of wage labour. Treen’s booklet unfortunately adds to the confusion. It does not challenge the wage system.
This is par for the course for Treen who is National Director of the Unite union, and was for years a member of the former Socialist Action League (now Communist League) and is a longstanding member of the Cuban Solidarity Committee. More recently Treen has visited Venezuela and Bolivia representing Unite union and is publicly supportive of the Bolivarian Revolution led by President Hugo Chavez. This pamphlet therefore reflects Treen’s political positions and is consistent with the Council of Trade Unions Alternative Economic Strategy.
Treen reponds to the 'rightwing lies' with his 'reformist halftruths' and we reply with Marxist truths. We have stated all positions in our own language.
First, the rightwing lies saying increasing minimum wages will increase prices.
Treen's half truth says wages have been lagging behind prices and inflation. In spite of increasing efficiency and productivity by 80%.
Marxists explain this by the fact that the lag in wages reflects the growing rate of exploitation of workers with increased productivity. Wages decline relative to profits. Prices are broadly based on the labour time that went into the goods – the minimum socially necessary labour. Workers therefore have in interest in replacing capitalism with socialism.
So the Right lies that increasing minimum wages will increase inflation.
Treen's half truth responds that the workers share of the total NZ Gross Domestic Profit (GDP) has dropped by 10% (while capitalists share has increased). Marxists say that inflation is driven by forces in the capitalist market. Inflation is used to devalue wages. The real value of wages is forced up only by the organised strength of workers through strikes and occupations.
The Right also lies that increasing minimum wages will increase unemployment.
Treen's half truth says that minimum wage increases have gone hand in hand with increased employment.
Marxists say that unemployment is endemic to capitalism because the capitalist class keeps a permanent “reserve army” of the unemployed to force workers to compete for jobs driving down their wages. Youth are forced into the reserve army by casualisation, restoring youth rates etc. The solution is to fight for jobs for all by sharing the work on a living wage.
The Right says that Rogernomics part I (under Labour) worked (privatising, rail, road maintenance printing, power, telecoms, commercialising TV, Coal, etc).
Treen says that Rogernomics failed (1980s and 1990s) the rich got richer and the poor got poorer. There was no increase in economic growth or general incomes (except for the rich) with Rogernomics. Labour effectively outlawed political strikes. They sold capitalists whole sections of the economy to run – for profit (not for social good).
Marxists say that the “free-market” ideas of Roger Douglas were designed to open up NZ to the global market allowing international capital to buy up cheap public and private assets and restore its falling profits. State assets such a transport, electricity, telecoms etc; were subsidies to capitalism while NZ was a protected economy. Deregulation meant they were restructured and sold off to reduce the drain of taxes on capitalist profits. Workers have a class interest in expropriating all state and private assets under a Workers Government.
The Right says that Rogernomics part II (under National) cut welfare; reduced spending on education, housing, health, and reigned in union power to balance the budget.
Treen points out that take home wages fell by 25% in real terms (1982 to 2008). The National government’s Employment Contracts Act (ECA) in 1991 attacked union organisation and cut benefits (social wages).
Marxists explain that all these measures were attempts to restore capitalist profits, with the costs passed on to the working class. Organised workers are a threat to capitalists, because if workers strike we can stop profits flowing to the capitalist class. Strong unions are schools for revolution and threaten the class rule of capitalists.
The Right says that the ECA would make a “free” labour market.
Treen says that the ECA was an attack on organised workers (unions). Membership has dropped from 720 thousand to 350 thousand. (CTU) Union leaders failed to fight the when workers were calling for a General Strike.
Marxists say that unions are allowed to exist by capitalism only to the extent they can control the working class. If union leaders do not fight effectively for workers then they need to be replaced. However unions without a Marxist analysis of capitalism will not end this rotten capitalist system.
The Right says that workers are rewarded for hard work.
Treen says not true. Because of the loss in real wages – working families have increased their hours of work and level of debt has taken cut real wages back 20 years.
Marxists say "hard work" is an excuse made by the capitalist class to increase the rate of exploitation making workers produce more profits for capitalism at reduced labour costs (wages).We demand jobs for all by sharing work on a living wage!
The Right blames unemployed as “bludgers”. John Key says, “slackers”.
Treen says that National cut all benefits: unemployment, DPB, invalid, sickness. And National Super was cut by pushing the age of eligibility back from 60 to 65yrs.
Marxists point out that this is an inevitable feature of capitalism which creates a reserve army of unemployed made up disproportionately of women, youth, ethnic minorities and migrant workers. Benefits have to be lower than the minimum wage to force people to compete for jobs. It is in the interest of all workers to unite to fight and overthrow capitalism.
The Right says that GST is a fair tax.
Treen says not fair. The richest paid as little as 6% of their income in GST, while the poorest paid between 9-14% of their income as GST (getting into debt to survive at rates above the 12.5% GST).
Marxists say there can be no ‘fair tax’ (as there is no ‘fair wage’) since all taxes come out of the value produced by productive workers. The demand to tax the rich, or employers cannot prevent exploitation at the point of production. We have to end the exploitative 'wage system'.
The Right says lower taxes on the rich will “boost investment and economic growth”.
Treen says there is no evidence for the impact of tax cuts on growth. In fact growth and productivity have sometimes been highest when top tax rate was highest.
Marxists say that all taxes originate from surplus value and bosses will try to stop paying taxes which are a drain on their 'profits'. A workers revolution is needed to create a planned (socialist) economy where production can be used and developed to meet the needs of all. (Not this chaotic capitalist investment for profits system).
The Right says that social inequality reflects ability.
Treen say rubbish, inequality is caused by inequal incomes. Inequality causes rising rates of suicide, crime and drug abuse. Richard Wilkinson and Kate Pickett in their book The spirit level – Why more Equal societies nearly always do better show income inequality is not a good thing.
Marxists say that inequality under capitalism results from capitalists owning the means of production and workers having to work to produce profits in order to survive. Inequality therefore cannot be overcome by redistributing income from capitalists to workers and workers have to unite to overthrow capitalism and create a classless society.
The Right attacks Labours 1999 – 2008 record as failing to complete the Rogernomics agenda.
Treen rejects that and says that Labour never challenged the fundamental policies introduced by Rogernomics under Labour and National. Labour only minimally tinkered with the economy.
Marxists explain that the Labour Party is a mixture of capitalists and workers representatives who only want to reform capitalism – a bourgeois-workers party. They do not organise to overthrow this rotten system so have to be replaced by a real labour party.
The right says that it is necessary to cut health, welfare and education spending to reduce the drain of high taxes on profit.
Treen says that the welfare state was a reform necessary to bring more social equality. The cuts to welfare to pay for tax cuts are unfair and unions need to fight to defend and extend the welfare state.
Marxists say that the Welfare state was a reform of capitalism designed to save the rotten capitalist system. The Welfare state is a wage paid socially to the working class as a whole (through the labour of health and education workers etc) to supplement the wage paid directly by the employers. We defend the social wage in the knowledge that it is no more than the redistribution of the value produced by workers via taxes in the form of a social wage.
The Rights says that the economy is undergoing a “fragile recovery”.
Treen says that the economy is grim and that the long term solution is a democratic plan, with “community control and workers in management” developing the CTU's Alternative Economic Strategy (AES).
Marxists say that crises are inevitable in the anarchic capitalist world economy. Only workers organised and able to make a revolution can take control of banks and the whole economy, and plan it for the social good. Let's take a closer look at this AES.
Alternative Economic Strategy
The Council of Trade Unions (CTU) Alternative Economic Strategy is based on the delusion of “an economy that works for everyone", as if such a thing could exist under the capitalist system. The current focus of the CTU is on increasing productivity (which for Marxists is the rate of exploitation) so that workers can bargain to retain some greater share of the increased value they produce.
This aligns the union leaderships with the capitalist class as collaborating in the rise of productivity of the working class to restore (falling) profits. Marx very clearly described how the profits for capitalism will fall, and continue to fall. Moreover, the higher the level of productivity, the greater would be the tendency for the rate of profit to fall because machines do not produce value. The bosses try to recoup their falling profits by cutting real wages and conditions and attacking the social wage funded by taxes.
The latest capitalist crisis was the direct result of such a tendency for falling profits. When ordinary capitalist production was not returning a ‘good’ profit margin, finance capitalism poured capital into dodgy and convoluted home loans. The value of these was artificially raised by speculation (and lies) way above the real labour value in construction. As wages were cut and jobs lost the banks found that workers couldn’t pay their inflated mortgages. The real price of housing was way below this ‘fictitious’ value and the result was the sub-prime crash.
There is a little reporting about the cost to the section of the working class who had taken home loans and have now lost their home to mortgage sales and are left with a debt burden which will continue to suck a cut from their wages into the profits of finance capitalists. The efforts of the capitalists to restore profits are mostly attacks on the working class, and so it is in workers interests to fightback.
The NACTs have continually used the latest capitalist crisis as an excuse to launch a capitalist range of attacks on the working class. National’s new employment law is permission for bosses to ‘Fire at will’ in their attack on the working class. It is worse than the Employment Contracts Act of 1991 because the weakness of the unions today makes it extremely difficult for workers to avoid signing onto a 90 Day ‘trial period’.
The NACTs would like to dispense with the unions to discipline workers from fighting back. But the two headed attacks on wages and the social wage (Health, Education, Housing and Welfare) means that workers will resist. That is why the CTU has responded to the Labour ‘reforms’ with a call to go to the ‘streets’. It has to demonstrate its utility to the NACT bosses that it can control the workers fightback and steer it into support for the Labour Party. Treen is a national leader of the Unite Union which has successfully recruited unorganised youth.
While Unite is leading the fightback against the 90 Days Fire at Will, picketing workplaces that are sacking young workers under this law, unlesss this is seen as a first step towards challenging the bosses’ class rule over all of society, it becomes no more than pressure on governments to reform workplace relations, and holds back the new wave of militancy within the dead end of parliament.
The only real power workers have is our ability to stop the flow of profits for the capitalist class by taking strike action. We don’t mean token strikes with media stunts and ineffective pickets. We mean a strike (reinforced by picketing) that really does stop production and/or distribution of commodities and stops capitalists’ profits.
It is the potential of unionised working to organise effective strikes and pickets which scares the capitalist class. All the past gains of working people have been fought for and won only with the backing of strike action (real or threatened). As Trotsky said in the classic work on Trade Unions in the Epoch of Imperialist Decay to break with the state, take control of the unions into the hands of the rank and file and turn the unions into organs of workers power to fight for a Workers Government and socialist society!
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Smash NACTs Austerity Attack!
How to defeat NACTs austerity attack
The NACT governments new package of labour reforms is designed to improve 'productivity' and 'create jobs' says John Key. This is the neo-liberal language for increased exploitation of workers under worse conditions to restore profits. Under the new law workers will have fewer rights than they had under the ECA in the 1990s. This is why the CTU has been forced to call for street protests. However, like the social democrats in Greece and Spain, where the EU is imposing tough austerity measures, the CTU will use street protests to try to pressure the Labour Party to the left and defeat the NACTs at the next election. But Labour will not challenge capitalism and imperialism. Its purpose has always been to reconcile workers to capitalism. We say that the working class must organise independently of the Labour Party and fight for a revolutionary party and program to socialise the economy and plan production for need and not profit.
In recent weeks China and the US have taken more hostile stands militarily. This is expressed in China's opposition to the current joint US-South Korea military exercises in the Yellow Sea. The US has also intervened in the dispute between China and Vietnam over Islands in the South China Sea. This military standoff represents a deeper falling out politically as China has refused to concede to the full sanctions on Iran demanded by the US, and now stands to gain as the EU cuts off all investment. War preparations against Iran continue meanwhile. China has also taken a clear stand for an independent Afghanistan against a permanent US base in the heart of central Asia. China is likely to back Pakistan in any fallout with the US over support for the Taliban. China also stands to gain from Pakistan's influence over the Pashtun which leads to a moderate Pashtun state or Pashtun control of Afghanistan.
Behind the political fall-out is the growing economic rivalry between the US the hegemonic imperialist power on the wane, and a rapidly growing China which is now the US main rival in Asia, Africa and Latin America. This rivalry has intensified with the onset of a global recession in 2007 which saw the US, EU and Japanese economies go into recession, while China continued to grow rapidly. The global capitalist crisis continues to deepen and threatens to slide into a double-dip recession or depression. It will widen the gap between the US and China and push the US into a more aggressive projection of its military power in Asia where it is determined to create a permanent base in Afghanistan, in Africa where Africom now mobilises US and African forces in many countries, and in Latin America were the US stage the coup in Honduras, has 7 new bases in Colombia, and renewed its occupation of Haiti. In all of these new expanding US military fronts, the US is using its military superiority with the main objective of pushing back China's expanding economic power.
The inter-imperialist rivalry between the two imperialist poles, the US bloc and the China bloc, explains the current military escalation in East Asia. China's economy continues to grow at almost 10%. US investments in China continue to grow. US firms rely on the China market to avoid bankruptcy. General Motors is contracting in the US but expanding in China. Apple is now taking advantage of the growing Chinese middle class. China is now outstripping Japan as the No 2 world economy. At this rate it could catch up with the US within two decades or less. Thus the US is trapped in its relations with China. Without its investments in China the US would be in a deep depression. So the US strategy with China is to increase its economic share of China's labor power, resources and market. Yet China is now powering away from the US accumulating more capital from its FDI proportionately than the US. China against its image of projecting 'soft power' is making tough deals in the semi-colonial countries and raking in superprofits.
Thus the mixed motives of the US towards China's dynamic economy means that the US wants to similtaneously dominate China's economy short of any all-out direct military confrontation. Its current tactics are to push China back, but not so far as to force a serious breakdown in relations. Instead the US uses the big stick to make Japan backdown on evicting the US base from Okinawa, and to allow more US bases in Japan. Then there is the re-awakening of the Korean war which has been halted only by an armistice since 1953, the Cheonan incident and the South Seas conflict with Vietnam. All of this is the result of a policy in which the US attempts to both profit from and yet contain China. The further away from China the more the US is prepared to stoke up its client regimes to confront China. As we discuss below this opens up the immediate prospect of proxy wars on every contient. What is the likely outcome of this bipolar scenario?
The release of the Afghanistan 'war logs' that blew the secrecy surrounding the inhuman war in Afghanistan have been traced by the Pentagon to Bradley Manning - bradass87 - (photo above) an intelligence officer based in Iraq. The logs that expose the ongoing conduct of a brutal, murderous war against the people of Afghanistan are likely to fuel a new wave of anti-war opinion against the war.
While Wikileaks role in facilitating the publication of the logs is to be welcomed, the real hero of this scandal is bradass87 who was arrested in May and has spend two months in jail in Kuwait. We say the workers of the world must demand the immediate release of Brad Manning as a war hero!
US: The Deepwater Horizon Oil Spill proves Capitalism unfit to Rule!
During the OPEC oil embargo of 1973-74, war criminal Henry Kissinger is reputed to have quipped, "Oil is too important to be left to the control of the Arabs". We have a different perspective: Oil is too dangerous to be left to the control of the capitalists!
As we go to press in late June 2010, the oil spill (read: gush) into the Gulf of Mexico from British Petroleum‘s exploded oil rig Deepwater Horizon has already become the worst oil spill disaster in world history, far exceeding the 1989 Exxon Valdez spill in Alaska, and even the 1979 Ixtoc disaster off the coast of Mexico – and there is no end in sight.
Since April 20, when the actions of BP and its contractors set off the initial explosion that sank the oil rig – the deepest offshore oil drilling operation in the U.S., if not in the world – tens if not hundreds of thousands of barrels of oil have gushed out each day into the Gulf of Mexico, and onto the coastlines of Louisiana, Alabama, and Mississippi. In Florida, the oil has reached the pristine white beaches, many of the tourists are gone, and many thousands have lost their jobs. The same coastal areas of the Gulf that were pounded by Hurricane Katrina in 2005, and left to rot by the Bush administration, have been hit hardest by the oil spill, and have been left to rot by Obama, the Democratic 'environmental' President.
Aoteaoroa/NZ: Education 'reforms' Pave way for Privatisation
The NACT Government has introduced a large number of education cuts, alongside moves towards privatisation, National Standards, and targeted cash injections to support its assessment focused agenda. To justify this, it has created a “crisis” which does not exist. The NZEI teachers’ union is strongly opposed to National Standards and has conducted protests and campaigns but stopped short of striking or an outright refusal, instead calling for a trial. The education cuts are part of an assault on the welfare state including health, benefits and social services, designed to make the working class pay for the international capitalist crisis, and to make private providers rich at our expense. Assessments of students and teachers paves the way for rewarding the well performing schools and teachers at the expense of the failing schools opening the way for the privatisation of education. These attacks on public provision of universal, compulsory education funded by taxation has to be resisted by mobilising teachers unions alongside parents and students.
Class Struggle 90 July-August 2010 pdf
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