Class War Vol 1 No 4 Spring 2013

   Class War Vol.1 No. 4 by JohnnBrown

NACTs Zero Sum Budget

Auckland Mayday March against welfare cuts May 1, 2012

NACTs 2012 budget keeps the country heading down the Rip, Shit and Bust road to destruction. The capitalists who rule Aotearoa want to rip out all our resources, shit on the lives of working people, and drive the country bust. Who has the best program to counter the NACTs bosses’ zero sum crisis budge? Labour and Green reformists, Mana radicals or Marxist revolutionaries? Let’s see the bosses’ budget for what it really is, an exercise in spin to cover up making workers pay for the capitalist crisis. Labour and the Greens have got no answers except Keynesian pipedreams and austerity ‘lite’. Mana is staking out a left Social Democratic position with income transfers to the poor. But the cause of the crisis is capitalist exploitation and there can be no effective rolling back of capitalist austerity except as a by-product of the building of a mass workers movement for socialist revolution.

NACT’s zero-sum budget

NACTs spin budget is zero-sum. It presents its austerity measures as ‘fiscal responsibility’ in balancing the budget by 2014 in the middle of a global crisis. Having run up a deficit of NZ$11 billion by bailing out the private sector it has transferred the cost of paying this deficit onto the taxpayer. In reality it is the working class that pays all taxes because the working class produces the wealth. So the real purpose of the zero-sum budget is to cut wages to boost profits. It boosts profits by forcing austerity on workers. Austerity is the bosses’ solution to their crisis as it cuts wages and social spending as a drain on bosses’ profits. It tries to make workers pay for the crisis by cutting capital’s costs at all costs. It restores profits by cutting taxes to rich, while increasing taxes to low paid workers like paper boys and girls; cutting social spending such as education from ECE to tertiary, ACC, welfare benefits, health and housing. This budget adds a new list of cuts in the NACTs austerity regime. A new round of austerity will hit when assets are privatised and power charges, education fees, health, ACC etc rise, and attacks on union rights and beneficiaries weakens unions and drives down wages.

Labour’s ‘Budget’

Of course capitalists argue that they are entitled to their profits, and to influence policy to restore them. They justify this as necessary for growth in the economy and the creation of rising incomes and living standards. Labour (social democratic) reformists agree with the capitalists that profits are earned rather than expropriated by capitalists. Capitalism is not inherently exploitative but there are some bad bosses (today the villains are usually Bankers) who ruthlessly exploit workers. They think that the cause of the crisis in not any inherent flaw in the economic system, but the wrong policies that create inequality and falling incomes for the poor. Labour accuses the NACTs as deliberately pushing austerity policies to enrich the already rich and worsening the gap between rich and poor.

The typical response of Social Democracy around the world is to replace austerity with ‘growth’. Keynesian solutions to the crisis are pushed. Keynes was a bourgeois economist who recognised that when profits fall the capitalists stop investing causing a slump. Keynes’ solution was to take over from the capitalists and use the state to borrow and spend on creating jobs and boosting incomes so that rising demand would trigger capitalists reinvesting in production. Roosevelt’s administration in the US and Labour Governments in NZ both applied Keynesian economics overcoming the worst effects of the Great Depression of the 1930s. In NZ the reformist left is pushing these solutions. Problem is inequality which can be fixed by state intervention.

The budget then, rather than cutting back on expenditure, should borrow to boost working class incomes to stimulate demand and hence capital investment in supply to meet the rising demand. This should be part of a wider policy of state regulation, ownership and economic planning to eliminate the profiteering of the capitalists. . See the big debates over austerity vs. growth on Michael Roberts Blog.

Green's ‘Budget’

The Green leader Russel Norman says that the Greens would “share austerity more fairly”.
They would tax the rich and capital gains, and redirect expenditure away from unproductive motorways, subsides to polluters etc and into a R&D and education for a smart green economy. This is a form of Green Keynesianism spending to boost clean, green, consumption.

The Greens are also against selling state assets having shown that they contribute more in ongoing dividends than in a one off sale. But like the Labour Party they will not commit to buying these assets back. While some think that the Greens are now the real opposition without Labour swinging right under David Shearer, and would keep a future Labour government honest, there are those who think that the Greens could work with Labour under David Cunliffe’s leadership because he stands for ‘Real Labour’.

But however they may rant on that we need throw out the NACTs and replace it with a smart, green Keynesian politics, the reality is that capitalist crisis cannot be solved by ‘growth’. Crisis requires austerity which means depression. This means destroying the value of surplus capital and of workers’ wages until the capitalists are assured that the capital invested in production can once more return good profits.

Mana’s ‘class war’ Budget

Mana is the only radical party in Aotearoa because it is driven by Tinorangatiratanga, or Maori self-determination, and by the socialist left. Radicals know that the state cannot oversee a fair distribution of income, since it is controlled by the capitalist elite that exploits labour by underpaying the true value of the wage. This is usually referred to as unequal exchange as labour is not paid its equal value in the market.

Thus the parliamentary budget is only fiddling with wealth already stolen from the producers. So further fiscal fiddling by the left cannot equalise the burden of austerity. The solution is for the majority working class to realise its potential power and get the true market value of labour. Some radicals want to take over the existing capitalist state to enforce this balance of power by similar means as the reformists. Others think the working class can take power in society and render the state superfluous. On balance Mana is a left reformist party willing to work inside parliament. Matt McCarten’s column in the NZ Herald, “Derisory Budget wages war on the poor”, sums up the Mana left Social Democratic politics.

Mana wants to get elected to represent Maori, and all other workers, and as its leader Hone Harawira said in his budget speech, “Tax the rich and free the poor”!

Workers’ revolutionary ‘Budget’

Marxists take a very different approach to the budget.  The capitalist economy is based on the production of value by the working class and the extraction of surplus value by the capitalist class. The state serves the capitalist class by defending the right of capitalists to the exploitation of labour as private property. That is, the state oversees the exploitation of the working class on behalf of capitalists’ profits. The income and expenditure of the state is therefore the consequence of the production of value and its distribution via incomes and via state incomes policy among the different ‘revenue’ classes to reproduce those classes.

The Marxist explanation of capitalist crisis is that is it caused by falling profits due to the inability of the capitalists to extract enough surplus value. This is the Tendency for the Rate of Profit to Fall. Bosses whose profits are falling stop investment, growth stagnates, and to restore the rate of profit the mass of capital has to be devalued as well as the value of wages until such time as the amount of surplus extracted represents a profit over total capital invested. The devaluation of the wages to restore profits is the essence of ‘austerity’.

The state plays a key role in creating the conditions for the return to profitability. It introduce social and economic policies to increase the rate of exploitation (increasing the share of profits) by making workers work harder for less pay. Here we see a whole box of NACT austerity policies to attack living standards, workers rights, union rights, and attacks on beneficiaries and the sick and injured to drive them to work – workfare – and so on to make workers produce more value and cut the share of value going to wages.

But that increased share of value does not go towards restoring profits if it is taxed to pay for state expenditure that does not produce bigger profits i.e. is a net drain on profits. So to restore profits the NACTs on behalf of the capitalist class want cut back on state spending by massive cuts in jobs and the social wage (the part of the wage made up state transfers – benefits, pensions, Kiwisaver, health, education WFF etc)

The budget ‘deficit’ therefore is an excess of state spending over state income that is a net drain on profits. The ‘balancing’ of the budget means reducing the state functions to only those that cannot be done more cheaply by the market. So we see the wholesale privatisation of state production, distribution and exchange (energy, airlines, banks etc) and services (health, housing, education, prisons etc). The capitalists kill two birds with one stone. First, state spending reduces the net drain on profits, and second, privatised state activities become directly profitable as the accumulation of capital (stocks, shares, interest etc).

Our conclusion is that ‘austerity’ is not merely a policy option like ‘growth’. The NACTs austerity policies are necessary for the capitalists’ survival, and they will not give up power or wealth without a fight. Thus liberal reforms are useless. Power has to be taken. It cannot be taken by peaceful means on the streets or other institutions. Radical reforms will come up against insuperable state power unless they take the form of a working class insurrection. Power has to be seized and the capitalist state power replaced by workers state power. For working class and the planet to survive the capitalist system must die. 


From Class Struggle No 100 May-June 2012

Welfare Nazis a big hit in Aotearoa

Revival of old hit by the #Welfare #Nazis coming to Aotearoa soon. Sponsored by NACTs, Maxim Institute and UK Centre for Social Justice. Lineup: Ian Duncan-Smith, Paula Rebstock, Paula Bennett, Janet Grossman. First came to prominence as the Chicago Boys in the '70s, with smash hit 'Pinochet', then the Reaganites Contra band in the '80s with No1 hit #WisconsinWay. Went on in the '90s to record "Welfare to Work" a cover of the 1930s Depression hit by Fred Hayek. Revived for current world tour by global crisis, rising austerity, impending bankruptcy to raise the stocks of the declining old bands, and try to counter the popular appeal of the new genre of #indignatos sweeping the world #worldrevolution.#fb

Ian Duncan-Smith, founder of the British think tank Centre for Social Justice, visited Aotearoa recently as guest of the Maxim Institute. As the Con-Dem Minister of Work and Pensions he is now responsible for implementing the policies generated by his think tank. Basically these policies are summed up as 'work-fare'. The NACT regime is basing much of its approach to welfare on the same politics of welfare-to-work. This originated in the US in particular the ‘Wisconsin Way’, and was picked up by a 1997 “Beyond Dependency” Conference in NZ. These ideas are derived ultimately from the revival of ‘liberal’ political economy of the Austrian school, in particular Von Mises and Hayek.

Today, the NACTs are drawing inspiration from British neo-liberal theory on welfare being implemented by the Con-Dem regime. They have head-hunted one of the UK senior officials, Janet Grossman, responsible for implementing a shift from Jobcentres to Callcentres, cutting jobs, saving money by putting services online and creating financial disincentives to getting benefits. Here's a quote from a British parliamentary committee before which Ms Grossman appeared:

"...let us congratulate Ms Grossman, shall we - if we read her CV we see that: "Under Janet's leadership, the Pension Service operations have improved efficiency and customer service, reducing staff numbers by 26% whilst improving service levels in the last 18 months". She has done a fantastic job and I pay tribute to her. When we need to summon you back in a couple of years' time, which I will obviously do, will you be able to tell us that Ms Grossman has been promoted and received a pay rise but those responsible for a lagging performance elsewhere have been sacked and moved on?"

The transcript is hilarious, especially the cross questioning by one Austin Mitchell, Labour MP for Grimsby (of Quarter-acre-Pavlova Paradise fame) who asks are the customers told midway thru their phone call how much it is costing them?

That was 2006, so it’s likely she has probably turned 100s of jobcentres into callcentres to get people to chase jobs over the phone or online (with services contracted to the private sector where Ms Grossman has much experience).

Sounds like she's been head hunted to do the same job here getting people off welfare and  into...workfare!

Which Paula Bennett is already doing eh? When 2/3rds of 'youth not working' are not registered as unemployed. There aint no jobs! The pay off here will be outsourcing IT solutions, forcing customers to pay for long phone calls assuming you have a landline, and why would you with a cellphone anyway. Its keep your cellphone lose your benefit. Then there's the compulsory detox or else. Then employing Union-organised security guards to harass them off the streets. Crazy capitalism where efficiency is chopping people off the books while outsourcing the methods so that only social services that can make a profit survive.

France: Out the class collaborationist union leaders in France!

We reproduce the action program of the FLTI on the recent French strikes.  The major defect that the WIVL indentifies is that the fake left calls for 'indefinite general strikes' without saying what would end that fight, namely the overthrow of the bourgeois regime and its replacement by a Workers' Government. This action program fails to remedy that defence as it jumps from the preparation for a general strike to its effect missing out on two key aspects. It needs to be finished off with the call "For a General Strike to overthrow the Bourgeois regime" and "For a Workers Government to bring workers to power to plan the socialist economy" that would replace the bourgeois regime.

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General strike committees in every workplace- occupy, resist! 
Down with the imperialist regime and the Sarkozy government!

The trade union leaders have deliberately delayed in calling all the masses out to fight the attacks on workers pensions. They shield the imperialist regime at every step. Now they organize symbolic actions on the 28th October and 6th November while the know the lower house is voting on it on the 27th Oct. They should have organized the millions to come out and face the parliament on the very day they dared vote on it and if these bandit representatives went ahead, the workers should have stormed parliament and dispersed it. Just like in Greece, the treacherous leaders refuse to call for the masses to overthrow the regime. Just
like in Greece, the leaders they want to tire the masses out with endless street demonstrations.

Lutte Ouvriere, the NPA, the FT-CI and others are appearing at the barricades of the oil workers and other strikers making militant calls for ‘indefinite’ general strikes. Strikers need to ask them: ‘You, who want to claim leadership of the struggle, you who have links right up into the union leadership and have international networks, what are you doing to mobilize the rest of the working class to come out on strike, what are you doing about the very leadership who does not want to call any broader action, that leaves us isolated? What are you doing about calling and organising the workers in the surrounding countries to blockade the oil and gas supplies that undermine our strike? You make no call for the toppling of the imperialist Sarkozy regime, so what is your call for an indefinite general strike for? So you can sound militant and make us believe you are our allies? So who has sent you? Your pay masters from  the French banks, so you can betray our struggle from within? Prove yourself, fight for the programme below or step aside’:

• Down with the imperialist regime of the Fifth French Republic and the  government of Sarkozy!

• For factory committees in every workplace to prepare for occupation of all factories, mines, capitalist farms, mines, banks, etc.

• Out with the union bureaucracy from the unions and the workers movement 

• For general strike committees of delegates of workers, students, unemployed,immigrant workers, rank and file soldiers.

• For workers self-defence committees

• Blockade all scab oil, gas and other supplies from entering France

• For an organizing committee to refound the Fourth International 

•  All power to the broadened inter-union, general strike committees in France!

Issued by the WIVL for the FLTI.

Smash NACTs Austerity Attack

                                                        John Key and Wen Jiabao

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.

What drives the NACTS?

The NACTs have shifted up a gear to declare an open class war on workers in this country with a series of attacks on work rights (90 days fire at will for all new jobs) beneficiaries (toughening work tests for sickness benefits, DPBs) ACC (denial of sexual abuse counselling) savings (reducing employers Kiwisaver contributions), cuts to health, education, privatisation of social services, tax increases (GST) and so on ad nauseum. The whole point is to force down wages and to cut the social wage to shift more value produced by workers to the bosses and increase their profits.

The rise in violent crime is a direct result of the crisis and the call to arm the police is to up the level of state force to clamp down on workers and suppress refusal of workers to pay for the crisis. It is not a policy option for the NACTS, rural rednecks or bloody minded fascists as some think.

And it certainly can't be fixed by a Labour Government that Sue Bradford is calling for. It is a specific response by the NZ ruling class to the immediate crisis of profitability in the export oriented sectors. Resistance to the NACTs which merely aims to get Labour into government in 2011 will fail miserably as we explain below.

Chinese semi-colony?

The NACTs represent international capital in NZ facing a serious global crisis of falling profits that is heading for another great depression like the 1930s. NZ is a weak, low-wage semi-colonial producer of bulk commodity exports. Its a price taker and not a price maker in the world market which means that the NZ capitalist class has to drive down the costs of production to get any share of the profits from agriculture, mining, tourism and education etc., that have historically flowed to  British, US, and Australian imperialism. Today that value is increasingly flowing to Chinese imperialism. The national share of profits, wages, taxes and social services in Aotearoa depends on the profits retained from the value of export earnings of these commodities, and today it is the relationship with China that is critical to this distribution of the national income. 

To keep the whole economy buoyant the prices for commodity exports (agriculture, tourism, tertiary education etc) have to be held up by increasing demand in these imperialist and other economies. They want cheap milkpowder, cheap ironsands, cheap honeymoons and cheap degrees. This means competing with other semi-colonial exporters by driving down the prices of production including labour costs (fire at will, performance pay for teachers in schools and unis, workfare) environmental costs (gutting the RMA, cutting ETS obligations) and energy costs (privatise water, privatise national parks, foreshore and seabed, make workers subsidise corporations (eg RioTinto-formerly Comalco, electricity, and billions in ETS subsidies).

The main demand for such commodities at the moment is being driven by China which is rapidly overtaking the other imperialist powers as NZ's main trading partner. This explains the NACT's subservience to Chinese imperialism and NZ's weakening ties with its traditional trading partners - apart from Australia which is a weak imperialist power dependent on China for its growth and NZ's main trading partner.

The opposition to selling land to Chinese corporations and the growing Chinese migrant population reflects this increasing influence. China is the only large dynamic capitalist economy whose rapid growth is so far preventing the global economy going into a complete slump. That is why in the last analysis the NACTs policies are those of a NZ semi-colonial ruling class forced to serve the interests of Chinese imperialism.

Strategy for fight back

Understanding the class enemy then, is the key to fighting back. The NACTs represent a subservient, largely parasitic, NZ ruling class that is becoming the lackey of Chinese imperialism. They have no room to manoever but have to cut production costs to meet the demands of Chinese imperialism. Key signals this when he agreed to joint ventures with Chinese corporations in third countries. He is acting for NZ bosses seeking a stake in the profits from China's ability to super-exploit third world countries. Such pressure to outsource NZ production will grow if costs at home are not cut drastically.

This is the new template that shapes NZ politics. We can call it the Chinese century. Its excludes the possibility of reforms since these raise capital's costs and harm NZ's competitiveness. Whatever the antics of the NZ ruling class they are driven by this necessity. And NZ workers do not have the clout of Chinese workers who are winning higher wages from a very low base. The only alternative for NZ workers is to fight for a socialist Aotearoa.

Socialism needs a revolution

The make this absolutely clear, by socialism we mean the overthrow of capitalism and its replacement by a socialist, planned economy democratically administered by the working class. We do not mean some fake socialism  which can be won by a 'progressive' bloc between workers and national capitalists benefitting from the relationship with China.  Much of the left models its brand of socialism on market socialist reforms. Parliamentary socialism is the  Standardista brand. The there is the Chinese brand which advocates a form of market socialist state that acts to 'develop' rather than 'colonise' the semi-colonial world. This is the Chavista or Bolivarian brand espoused by the Australian Green Left and local mimics.

We have discussed the danger for workers of these left reformist positions at length elsewhere. We argued that China is no different from the US or EU imperialists in Asia, Africa or Latin America, where it extracts super profits like all imperialist powers, even if its methods differ. We conclude that there is no possibility of the NZ working class being able to follow some imaginary Fabian, Chavist or Chinese road to market socialism.

Therefore, the fight for a socialist Aotearoa is not just against the NACTs, but also against the Labour Party backed by the CTU union bureaucracy which thinks that it can reform capitalism in the new Chinese Century because NZ's relationship with China is 'progessive'.

Aotearoa socialist republic

In its essence the fight for socialism is the not to kowtow to China but to join forces with Chinese workers to fight to expropriate imperialism and the NZ ruling class who are the junior partners of imperialism.

By socialism we mean collective ownership and also collective consumption of value as the product of labour. Nationalisation can become collective property only if workers take control and prevent the privatisation of value as profits (eg stop private mining of national parks). This means defending state owned assets not only from privatisation but also from private appropriation of value by putting them under workers control. This means nationalising under workers control all land and landbased resources, the key sectors of industry, and the banks,  as steps towards socialism.

How do we get there?

 The Maori struggle to regain customary ownership of the Foreshore and Seabed is one avenue. It would tie up land and sea-based resources as common property that opens the way to end private profits. However, in itself it does not stop profiteering by corrupt bosses or by capitalist partners (such as Maori held fishing quota in JVs with Japanese corporations).

But we have no confidence in the Maori Party brand of iwi communalism. It would see customary land benefitting iwi capitalists rather than Maori workers. It would copy the Chinese 'Communist Party' capitalists. Land in China is state owned, but the capitalists  are able to make profits from the labour value extracted from workers on that land. To stop this Maori customary land would have to be democratically administered by the majority of Maori workers to ensure that the rent (value) produced was also collectively used to meet the needs of the masses and not the private greed of any class of shareholders. Maori workers have a common interest in this with Chinese workers to socialise nationalised property!

Land Nationalisation

This is the model for the agricultural sector. Here the demand for land nationalisation should not be based on opposition to foreign ownership (the CAFCA and Green Party and some Maori nationalists line) but collective working class ownership which requires class alliances with foreign workers. Agricultural workers would call for a class alliance with working farmers in NZ and poor peasants in China. And since nationalisation in itself does not prevent profiteering, the workers in this sector need to demand land nationalisation under workers and small farmers control.  This would remove the costs of servicing mortages as one major flow of rent from the land to a parasitic class or rentiers. Similarly the attempts by Fonterra to create shares that can be traded on the stock exchange is designed to allow international finance capital to profit from the labour of working dairy farmers.

It is interesting that the NACTs are opening up to Chinese imperialist investment in Agriculture while Alan Hubbard who offers interest-free loans to young farmers is seen as a threat to the profits of the corporates. Hubbard proves that farmers can benefit from their own labour without being mortaged to the big banks. Socialism however, cannot be built on Christian philanthropy. In exchange for land nationalisation farmers would have interest free state loans and access to state R and D to develop their land and retain the product of their labour.

Action Program

In this situation where NZ's economic role is that of a semi-colony to Chinese imperialism facing a global crisis, no trust can be put in the National or Labour parties that both subordinate workers to the capitalist class and to imperialism. In every sector where the new employment reforms are designed to drive down wages and conditions, such as in agriculture, mining, tourism, education, etc., to allow Chinese and other imperialists to reap super-profits from Aotearoa, workers have to fight for what they need now and not what the local or Chinese capitalists say they can 'afford' to pay.

Jobs for all on a living wage! Reduce hours and share the work. Benefits tied to the living wage!

For unions on every jobsite under the control of the membership with recallable delegates!

For rank and file control of the unions. For union independence from the state. Break with the union bureaucracy!

No sackings under the 90 days act! All for one and one for all!

Equal rights for all workers by age, gender, ethnicity, nationality, sexuality!

For workers committees and assemblies in every city.

For a national Congress of workers assemblies.

For a general strike to smash the NACTs austerity program!

No to privatisations! For nationalisation of the land and key sectors of the economy under workers control with no compensation!

For a socialist Aotearoa/New Zealand!