The Moral Statistics of Thomas Picketty

 

Picketty’s ideas in their C19th form were demolished by Karl Marx himself. But Picketty couldn’t be bothered reading Marx so he wouldn’t know this. Had he bothered he would have discovered that capitalist inequality is inherent in the fact that the class that owns the means of production forces the other class that is dispossessed of those means of production to produce surplus-value as the basis of profits. The distribution of income that results is a mere symptom of these unequal relations of production. 

We will leave Picketty’s data and the conclusions he draws from this date to the criticism of the bourgeois mice (an in- joke reference to the Young Marx – Picketty could start with Early Writings which are much less ‘boring’ than Capital). Anyone can prove that capitalism creates income inequality. The point is whether inequality is good or bad. The only thing that separates Picketty from Ann Rand is not statistics but morality.

Picketty thinks it is bad because the widening income gap is accompanied by increasing profitability. Those bosses are truly bloody minded bastards. Marx had anticipated this mistake because it was common in his day. Marx refers to a fixation on the symptoms rather than causes of inequality as “The Trinity Formula” as in the father, son and Holy Ghost.

This semi-religious fetishism of appearances has its materialist roots in the alienation of human labour as the value of the commodity which is explained in the first part of Capital Vol 1. This is the best rendition of the adage that we know the price of everything but the value of nothing.

Ironically, it was the French translation of Capital that Marx thought the best since he had the chance to edit it and since it was serialised and thus accessible to the ordinary worker (and even the odd bourgeois intellectual). Even so Marx had misgivings that the French reader would be impatient to pass quickly from the difficult analysis to “immediate questions that aroused their passions”.

Picketty has the disadvantage of writing a 600 page book that instead of illuminating the causes of inequality, buries the truth under a false theory. He whips up a moral outrage because the bosses profits rise at the expense of falling wages. 

Marxist economist Michael Roberts shows that Picketty measures profits to include ‘wealth’ as in property and housing values. Such ‘wealth’ is not counted in profits as by and large it does not directly contribute to production. Land is a source of rent (or interest on housing assets) which is deducted from wages or profits. But even using Picketty’s measure of wealth to include land, Roberts argues that this has been declining as land becomes less valuable in relation to financial assets, also increasingly unrelated to the production of profits. Perhaps Picketty should have read Marx on ‘fictitious capital’.

So Picketty’s moral statistics leads to rising profits and a falling share of wages where the political solution that presents itself is a moral condemnation of capitalism, combined with a practical push for the poor to rise up and demand their ‘fair share’ of income, even though their production of profits was never fair.

In Aotearoa/New Zealand a strong advocate for a redistribution of wealth is Gareth Morgan, a maverick entrepreneur capitalist. His method is a Universal Basic Income (UBI) paid for by what is effectively a new 25% flat tax on wealth including assets and income.  See his book TheBig Kahuna. 

However writing an academic text of 600 pages over a number of years means Picketty doesn't have the excuse of passion which leads him to condemn Capitalism or French impatience like the German moral socialists that Marx excoriated in the Critique of the Gotha Program for forgetting that capitalism leads to falling profits and that any equalising of income requires a socialist revolution. His language is bourgeois morality and statistics.

So like all those who think that climate catastrophe can be managed by the ‘adaptation’ of capitalism, Picketty may “throw statistics" at capitalism but doesn’t entertain the idea of overthrowing it.

Zimbabwe: Boycott the Referendum, Break with the Popular Front!

 
Zimbabwe is going through a process of drafting and voting on a new constitution. It is a total fraud put forward by the ruling ZANU-PF and its Movement for Democratic Change (MDC) minority partner in the power sharing government. Nothing will change, the ruling class will continue to profit from doing deals with imperialism to plunder Zimbabwe’s resources, and the masses will continue to starve or leave in search of work. The left has been dragged behind this constitutional process as fig leaf covering this naked exploitation. The reformist left, the unions and NGOs have been ‘consulted’ and made minor amendments in the hope that it will fool the workers and oppressed. But this has not fooled the masses.

The global crisis of capitalism means that capitalism can only survive by making the workers pay for the crisis. The masses are ready to rise up as they are doing in other parts of Africa, Asia and the Middle East. But these struggles are being betrayed by national regimes acting as the agents of imperialism. What is missing is a genuine revolutionary Marxist party to act as the guide to mass action. We report here on the struggle of the Revolutionary Workers Group to build a united front to boycott the Referendum on the Draft Constitution to smash the popular front regime, and to form that Revolutionary Marxist Party to lead the socialist revolution. 
 


National Liberation Fails 

As in other parts of Africa, the national liberation struggle in Zimbabwe was strongly influenced by Stalinism and the belief that national independence would have to go through, first, a national democratic stage in preparation for a second, socialist stage. In most cases the liberation struggle achieved political independence but failed to break from imperialist economic dependence. Liberation fighters who were too threatening to imperialism like Lumumba and Cabral were assassinated by order of the imperialists, and all the liberation movements turned into black bourgeoisies who became the agents of imperialist plunder. If they fell out with imperialism as did Mugabe with Britain, it was over the sharing of the spoils.

In Zimbabwe’s case, the imperialists imposed sanctions to force the regime into submission. Mugabe’s resistance threw the country into stagnation and his regime could only survive by posing as anti-imperialists and repressing any opposition. This ruse is wearing thin as imperialists line up in joint ventures with US and EU imperialists and increasingly with China, to plunder Zimbabwe’s mineral wealth, throwing the masses into further poverty and misery.

To shore up his declining popularity Mugabe proposed that the new Constitution would create the basis for a fully democratic and independent Zimbabwe. But this ruse has not won over the people. This is evident in the discontent in the ranks of the International Socialist Organization-Zimbabwe (ISOZ,) the main historic left reformist party. After years of working in the MDC and now the Constitution consultation process the ISOZ is again exposed as acting as a left cover for the popular front regime. It is claiming that it is possible to influence the regime from within the government of the bourgeoisie whose interests lay with imperialism not the people. This prevents the working masses from acting independently of their class exploiter.

The reformist ISOZ inside the Constitution process

Now that the final draft Constitution has been revealed and a national vote is scheduled for March 16, the ISOZ suddenly finds itself embarrassed that there is nothing in it in the interests of workers. They said to workers that participating in the process of drafting the Constitution was important for workers. It sowed illusions that the Constitution could be in the interests of workers because only now does it say that this is not so.

“It is clear that the Constitution Parlimentary Committee (COPAC) constitution is there to look after the interests of politicians, the rich, employers, capitalists and imperialists, i.e. the 1% of plutocrats or elites, but doing so in a deceptive manner that deludes working people that their interests too are covered. Vanorava mbwa vakaviga mupinyu!”

Now it realises that workers will now see it as betraying them to the regime. It complains that there are at least 15 things wrong with the final draft so that workers must vote ‘No’ to reject the Draft Constitution. It summarises these:

“Thus the COPAC draft leaves substantially intact the iron fist of the executive imperial presidency to be used by the ruling classes to smash revolts from below as the crisis of capitalism locally and internationally worsens. To please the Western capitalist masters, the COPAC draft has scandalously omitted the peoples’ rights of economic empowerment, indigenisation and nationalisation of strategic resources, under workers’ and communities’ democratic control.

Further, it provides for compensation to white farmers and foreigners whose farms were expropriated, but without a cent for the ex-farm-workers who lost their jobs or land for urban housing. The draft will allow the ZANU-PF chiefs and generals to sell for a huge profit the multiple farms they have looted. To ensure this, the draft provides that the land chapter can only be amended after a 2/3 parliamentary majority and a constitutional referendum.

Workers are denied the right to a living wage, a real right to strike; civil servants denied full collective bargaining rights and their full citizenship rights. Women are denied rights to abortion, social grants, or 50-50 parity in jobs. Students are denied the right to education. There are no economic or empowerment rights for youths, women, the unemployed, farmers and informal sector. There is no right to recall corrupt or ineffective MPs or councillors, while it creates, per capita, the biggest parliament in Africa.”

But this list is just to cover for ISOZ rotten participation in the ‘consultation’ process. The ISOZ even says that even if these matters were corrected, the capitalist regime would then ignore the Constitution. It should have been honest and said as soon as the new Constitution was mooted, that it was a ruse to create a sham bourgeois democracy when there is no possibility workers gaining anything from parliament; especially as the global capitalist crisis was imposing new austerity attacks on all African workers and farmers imposed by former ‘Marxist’ (read Stalinist/Maoist) regimes like the ANC and ZANU PF.

Sectarian ‘Socialist Platform’ abandons workers


As the crisis gets worse in Zimbabwe and the whole of Africa the attacks by imperialism and its client regimes intensify. It is clear that for workers to resist they must defeat both imperialism and the local agents such as the Government of National unity (GNU.) But most workers remain tied to popular fronts like the ANC in South Africa (SA) and the GNU in Zimbabwe. Revolutionaries must organise the most militant workers in united fronts to fight austerity and demand a living wage and decent work, health, housing and education. To do this we need to build independently of the state and the popular front that ties workers hands to the national bourgeoisie and imperialism. Before the working class and poor farmers can organise as a force to defeat the regime they have to win their independence by breaking from the popular front. The workers are tied to the popular fronts by reformists and centrists. In SA the DLF type centrists (Democratic Left Front) move left to provide a cover for reformism. In Zimbabwe the centrists spout revolutionary phrases but at the same time fail to put forward a program to organise workers’ power.

The Workers International League (WIL) Zimbabwe section of the Leninist-Trostksyist International Faction (FLTI), which resulted from a split from ISOZ in 2009 confuses the United Front of action on immediate demands with ‘revolutionary’ sounding demands that fall far short of revolution. For example, the WIL and RWG began discussion on a united front called ‘Socialist Platform’ to organise workers to boycott the Constitution. The WIL drafted a proposal for a ‘Socialist Platform’ that also called on Zimbabwe workers to ‘smash imperialism’. The RWG objected to raising this demand in a UF and pointed out that immediate united front demands should NOT be confused with socialist demands that must be prepared for by a number of transitional demands. The WIL refused to drop its call on a united front to boycott the referendum to also ‘smash imperialism’. This form of ‘political bloc’ is centrist because it confuses the United Front with demands for socialist revolution, and holds back the organisation of workers independence. How is this?

First, it cannot build a genuine united front to advance workers struggle by exposing the agents of the bosses who are tying workers to the popular front. It says to workers that they must ‘smash imperialism’ in order to boycott the Constitution. Putting a barrier in front of reformist workers will prevent the united front from becoming a mass movement. At the same time it gives the bureaucrats and centrists who refuse to break from the popular front and alibi to attack the united front and avoid being exposed as class traitors.

Second, the ‘Socialist Platform’ does not spell out how to get to socialism. In fact is misleads workers by saying that in Marikana the miners won the ‘class war’. No they didn’t, they won 12,500 rand a month but remain trapped in the African National Congress (ANC) popular front which continues to shoot miners on behalf of imperialism. This is not ‘socialism’ but ‘economism’: fighting for wage rises is not yet fighting to overthrow the wage system. Perhaps the WIL is cynically angling to recruit disaffected ISOZ members onto its ‘Socialist Platform’ by claiming that ‘socialism’ can spring from the spontaneous struggle of workers without a revolutionary program or revolutionary party. These are matters for revolutionaries to debate in front of the working class as part of the struggle. But they are no substitute for the united front. By confusing the united front with a ‘socialist’ bloc the WIL holds back the masses at the same time as evading putting in front of the masses the vital questions of the general strike, the arming of workers, the insurrection, and the overthrow of the capitalist state and its replacement with a Workers and Poor Farmers Government.

A mass united front to mobilise workers to boycott the Constitution must be built in the next month and cannot spend its time arguing about which group is more socialist than the other. The ‘Socialist Platform’ on the basis of the WIL draft would have been the worst kind of centrism because while claiming to be for ‘socialism’ it fails to focus its energy on building a necessary first step on the road to socialism; the organisation of independent working class struggle committees capable of forming a national congress to boycott the Constitution and to prepare for a general strike. 

Boycott the Referendum

We need to be clear on why workers and poor farmers should boycott the vote. A ‘no’ vote as proposed by the reformist ISOZ and other organisations (National Congressional Assembly (NCA), Zimbabwe Congress of Trade Unions (ZCTU), Zimbabwe National Students Union (ZINASU) and the Progressive Teachers Union (PTUZ) sends a message that the proposed draft is not in the interests of the workers. It doesn’t say that the whole Constitution process is designed to con workers into a popular front. The only reason that the ISOZ say’s vote ‘no’ is that it is embarrassed that it can no longer pretend that workers won anything in the process. It is exposed as a treacherous reformist agent of the popular front. Voting ‘no’ is no more than covering for this treachery. What will follow is that the ISOZ will keep alive illusion that a ‘no’ vote for the Draft will see the whole process repeated and next time workers participation will win some acceptable gains. This means that the ISOZ has no confidence in the revolutionary working class to fight against and defeat the draft constitution. It even admits in point 15 that: “Like the Lancaster [House Constitution] one, this COPAC constitution will become permanent and enslave us and future generations”!

We reject reformism outright. The draft constitution like all of its predecessors is a charade to provide a fig leaf for a semi-colonial dictatorship in the interests of imperialism, both Western and now today, Chinese. At the outset of this exercise we said that workers must give no support to the process and organised independently. Now that there is a Constitutional crisis, with the reformists exposed, and the centrists running about like headless chickens trying to cackle like the DLF in South Africa, or trying to head off and independent workers movement into sectarian blind alleys like the WIL (FLTI), we say there is only one revolutionary course of action and that is the boycott built around mass mobilizations of the workers, their organizations and the oppressed.

A boycott means several things. First, there is nothing to be learned from voting for a bourgeois Constitution imposed on the people by a bourgeois regime. Workers who have illusions in parliament will be repulsed by the reactionary constitution. All those workers who are repelled to the left and by the treachery of the left reformists like ISOZ will look for leadership for the way forward. The vote ‘no’ tells them, try again, but meanwhile do not break with the popular front!

Second, there are phony boycotts. Those centrists who try to intercept the left moving workers call for a boycott, but for them this means a very different thing from revolutionaries. For some opportunists who hope to create a DLF like in SA, it means breaking from the draft proposals and building an independent socialist front that remains open to future participation in new proposals. They do not see in the current conjuncture any revolutionary situation emerging in SA or Zimbabwe so wait on events to guide workers spontaneous struggles. The WIL sectarian centrists call for a boycott not only of the Constitution but of capitalism and imperialism at the same time. They see the current world situation as revolutionary or pre-revolutionary, and think that the democratic revolutions that are reviving in MENA and Africa can leap over bourgeois democracy into a spontaneous proletarian revolution without the leadership of a Marxist Revolutionary Party.

The revolutionary position is to build the boycott of the referendum as an immediate political demand to break from the popular front that will free the workers and open the road to independent workers struggles where they can fight for and win demands for jobs, wage, working and social conditions through political strikes against the regime. 

In the process the vanguard will be won to a Marxist Revolutionary Party and program. As it becomes more independent, confident, armed, it will be capable of over-throwing the regime and replacing it with a workers and poor farmers’ government. So the struggle builds from united fronts for immediate demands to the seizure of power and a workers government and socialist plan following the transitional method of Lenin and Trotsky. 

Transitional Program

We can summarise the method and program of Lenin and Trotsky. The first duty of the revolutionaries is to explain the truth to the masses. Capitalism in the epoch of imperialism is undergoing a potentially terminal crisis. It is facing a showdown between revolution and counter-revolution. 

Imperialism can only survive by destroying the lives and living conditions of the working masses. For workers to live capitalism must die! There can be no future for the masses without overthrowing the bosses’ regimes and with it the capitalist state. For this the masses need an independent party and program to guide it along the revolutionary road and across the bridge from reform to revolution. All those forces who act as barriers on that road must be exposed and destroyed. This means breaking with the union bureaucrats that are the agents of the capitalist state to suppress class struggle in the unions. It means breaking with the centrist and Menshevik/Stalinist left that tells workers that the road is long and steep and that with the help of the centrists, they will reach their final goal in the end.

The revolutionary program is the Transitional Program that begins with immediate demands:

• For jobs for all, a living wage, free health, education and welfare; 
• To national democratic demands such as land nationalisation, a state bank, a unicameral parliament based on universal suffrage! 
• to achieve this, Socialist demands for workers councils, workers militias, strikes and occupations to create dual power to overthrow the capitalist regime!

This will put in power a Workers and Poor Farmers’ Government able to:

• Expropriate the imperialists’ property and that of the national capitalists; 
• To socialise the minerals, land, banks, energy and communications without compensation and under workers’ and poor farmers’ control!

Such a government would:

• Impose a socialist plan integrated with those of all the other countries in Africa that make a socialist revolution to form a Union of Socialist Republics of Africa!

Statement of the Liasion Committee of Communists composed of the Communist Workers Group NZ/Ao, Communist Workers Group (USA) and the Revolutionary Workers Group Zimbabwe February 23, 2013

Moralilty and Statistics: The Spirit Level Debate

From Left to Right:  Adam Smith, Karl Marx, Fred Hayek, Lord Keynes

The bland morality and statistics approach of The Spirit Level approach to inequality is already at least a half-century behind events. The 1960s in NZ marked the end of the post-war boom and the return of ‘social classes’ once thought to have been banished by the first Labour Government. A number of analyses of the causes of inequality began to be published from that time and continue to this day. Most operated at the same level of analysis as The Spirit Level i.e. measuring the distribution of income and of wealth and tracing its social effects.

By the 1970s Marxist critiques of this sort of distributional analysis were appearing. For example critiques of the Alternative Economic Strategies published regularly by the FOL and CTU slammed the reformist illusions in regulating and pacifying capitalism. The basic cause of inequality was argued to be the capitalist system itself and its developmental processes. Aotearoa was no less driven by capitalist laws of motion as any other country. The idea that NZ was more equal than others was a myth based on a few aberrant upturns, in particular the Postwar Boom. 

Equally, the possibility of making capitalism equal was also a myth. So the solution to capitalist inequality was the overthrow of capitalism itself. The Keynesian centre fell into disfavour and the battle was now between the far left Marx and far right Hayek. Fast forward 40 years and Hayek has been pushed aside by the right who have appropriated Keynes to bail out the banks. But in the process the market has exposed its hand: it was always handy to have a state to manipulate the market. Now Marx’s books are a booming commodity.

But capitalism will not fall down by itself. As we see countries will be bailed out so long as they have governments that will mortgage future generations of workers to pay back the debt plus compounding interest. And so long as workers let them get away with murder.

The real problem is that capitalism is no longer a progressive force for change but a destructive force. It was progressive so long as it destroyed feudalism and other pre-capitalist modes of production and gave us the industrial revolution. But since start of the 20th century, capitalism has become a top heavy, destructive juggernaut that grinds the masses under it wheels. It survives only by wars and counter-revolutions that smash the masses rebelling against its rule. Its productive capacity is on a long decline punctuated by depressions and wars that only kick start upturns by the sheer destruction of physical and social capital.

The current so-called ‘great recession’ is a deep cyclic recession among a series of such cycles since the end of the post-war boom, itself no more than a long-upturn brought about by the destruction of physical and social capital by the Great Depression and WW2. If there is another cyclic upturn following this recession it will be weak and rapidly swing downwards again. The reason for this is not overpopulation, underconsumption, or the bubble banking system, which are no more than surface symptoms of capitalism in terminal decline.

The underlying cause of capitalist crisis is that it can no longer as a global system extract sufficient surplus from human labour power to produce profits on the total capital accumulated. Since profit is the driving force of capitalist production the motivation to invest stops. Keynes’ ‘solution’ to prime the pump by paying workers to consume to leads to stagflation that only delays the decision as to when bosses stop investing. That is why the only real productive growth is now in East Asia and the other BRICS [Brazil, Russia, India, China, South Africa] where the conditions of early capitalism, low wages, and technical innovation allows labour to be exploited profitably for the moment. And yet even this productive burst will lead to stagflation which will produce a real test of state capitalist systems to survive.

In the rest of the world where capitalism has been long established, despite falling wages and new technology, productivity is lagging. Hence, surplus capital that is not shipped off to China etc. must be diverted into speculation in existing commodities. This is a giant Ponzi scheme to try to delay the inevitable devaluation of money that is not invested productively. No new value is added to these commodities, and their rising prices represent ‘fictitious’ value or capital. Hence when these fictional bubbles burst, the accumulated surplus money is devalued massively. It is a consequence not cause of the current crisis.

The only thing keeping capitalism alive at the moment is the capacity of the ruling capitalist classes to use THEIR state to siphon the wages and taxes of workers to pay for the bad debts run up by speculation. Bailing out private capital debt, turning it into sovereign debt, shifts the burden of repaying the debt onto the working class its total effects now referred to as ‘austerity’. But this trick of making the working class pay for the huge costs of capital’s survival is reaching its limit.

The contradiction of workers both producing the wealth, and then propping up a system that destroys it, has dawned when ‘austerity’ drives the masses of workers into poverty and misery. The ability of capitalism to mask this ‘destruction’ of society and nature as ‘natural’ and ‘necessary’ no longer works. Capitalism is losing its clothes. The unions and social democratic parties that have long kept the lid on workers struggles are as bankrupt as capitalism. Spanish and Greek workers have lost their faith in this political class. The corrupt power of the system of bosses, bankers, media barons and the armies of bureaucrats who keep the lid on popular discontent is being blown apart.

But as the melodrama of media magnate Murdoch in the dock shows, the bosses still have a lot of power to spray bullshit over the most damaging revelations. They pretend not to be naked and a lot of people refuse to open their eyes. Capitalism will stagger from one crisis to the next so long as we let it. Capitalism won’t die until we bury it alive and drive a stake through its heart.

We will see bigger rebellions, general strikes, and working class struggles against fascist movements to keep capitalism alive in the next years. For workers to win they have to pull off the scales that capitalism places over their eyes and open their eyes to the nature of the enemy so as to be able to defeat it. This includes rejecting the superficial analysis that ‘The Spirit Level’ represents. This applies even more to the superficial analysis of its rightwing opponents.

That is why the Marxist critique of Capital is as essential today is it was when it was first written some 150 years ago. We have to replace The Spirit Level with a Chain Saw.