Home > General Politics, Labour Party News > Happy Christmas? Zavvi, the IMF and terroristic capitalism

Happy Christmas? Zavvi, the IMF and terroristic capitalism

Another major high street retailer has bitten the dust: Zavvi has gone into administration barely a year after a management team bought it from Richard Branson. Teas and coffees company Whittard has been sold to a private equity firm. All down the line, the reorganisation of capital proceeds apace, with little thought for the human cost of the procedure.

Subprime in ClevelandDavid Harvey in his recent lecture “A Financial Katrina” discusses this human cost. In fact he presents the clearest and most cogent Marxist analysis I’ve heard yet. Repossessions and job losses represent a war on the working class. An excess of liquidity drove investment in areas such as the subprime market but the people who will suffer most from the inevitable crash of that market (which is cyclical) are the working classes.

This is why the ideologues of free market capitalism have been arguing, a la Melanie Phillips, that the problem is with the working class people who chose to opt for home ownership on terms they couldn’t sustain. So not the fault of those pushing home ownership as the centrepiece of a consumerist ideology? Or those whose ethical guidelines are restricted to “Make a profit. That’s all.”

Black areas in ClevelandHarvey goes on to illustrate how it is the black neighbourhoods of the United States who are bearing the brunt of the punishment (though even by Harvey’s own data, white working class areas are still suffering, so we shouldn’t overemphasize the racial aspect).

A recent pronouncement by the IMF Chief Economist, Olivier Blanchard, seems to bear out some of Harvey’s contentions. Britain’s VAT cut is no good, he says; Britain needs to increase spending, but also Britain’s borrowing is going to cause problems. It seems that between the lines, the IMF wants Britain to hike taxes on the workers rather than create new business taxes or reduce regressive taxes.

Indeed this notion is reinforced by Blanchard’s support (surprise surprise) for Sarkozy’s plan to loan money to people to buy cars. If there is one symbol of unnecessary consumption, it is the car, yet the IMF Chief Economist wants people to be spending their money on such things. We might as well cut out the middle man and give the auto-giants their direct subsidy. At least it would mean less pollution and less personal debt.

In the United States, that is precisely what is happening, the Republicans are using the opportunity to squeeze out every last concession from the autoworkers’ unions, who have effectively rolled over. This is the bluntest end of the weapons arrayed against the working class; the direct assault on wages and terms and conditions, in order to allow a higher profit and to allow such newly accumulated capital to be refocused elsewhere.

It is clear that an opportunity is being lost. Surely now is the time to be investing in new patters of consumption? Such as the creation of vast networks of public transportation, which dovetails cutting carbon emissions and government stimulus packages. It’s not like the auto-companies wouldn’t have a part of the affair – especially if we nationalise them and retool them specifically for that purpose.

We should be under no illusions that the gloves have come off our capitalist overlords – indeed it is reflected in the increasingly sharp rhetoric from people like George Osborne. “Labour is bankrupting Britain again,” he says, and it is the ‘again’ part which has the sting in the tail. As Osborne surely sees, Labour expenditure now has nothing of the Left overtones of Labour expenditure in the 1940’s, 1960’s or 1970’s.

Yet Osborne is quite content to scaremonger that Labour’s class warrior spirit has returned. As Labour activists, we know better, more is the pity. Our response must be just as unyielding as the Republican Senators pushing to destroy the UAW, or Osborne trying to frighten the middle-classes with the spectre of a resurgent socialism. We must demand much, much more than we are getting from Labour.

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  1. December 25, 2008 at 8:28 am

    Just saw this quote. Worthwhile reading as the clerics pontificate on “moral markets” and other absurdities:

    “Keep in mind the fact that the Son of Man, the Christ who lived and was executed by the government of His day, was a great leader, and leader of the common people. It was his great message of Love and Brotherhood which brought him to his death. He knew the poor of the earth were oppressed by the rich and wealthy, and in scathing terms denounced the money changers and all those who defiled the Temple and brought suffering to starving humanity.” – George Lansbury, 1926

    Hope you have a joyful Christmas, all the best for 2009

  2. December 25, 2008 at 10:45 am

    “the direct assault on wages and terms and conditions, in order to allow a higher profit”

    In the context of US automakers, that’s a smaller loss, not a higher profit – they’re businesses that consume, rather than produce, capital.

  3. December 25, 2008 at 10:54 am

    More ordered thoughts:

    1) Zavvi and the US carmakers are in trouble mostly because they produce and sell things that people don’t actually want. How do you resolve the problem of an enterprise (whatever its ownership structure) that’s doing nothing useful /without/ closing bits of it and destroying some jobs?

    2) in the case of both enterprises, capital has lost out far more than labour. The UAW workers – rightly – will have their pensions protected and will be paid redundancy if the companies fold. Zavvi’s workers are students and schoolkids. Meanwhile, Zavvi’s shareholders and bankers have lost everything, whilst the automakers’ shareholders have lost almost everything. Hell, across this whole recession capital has made enormous losses, whereas the losses to workers have been minimal so far. How does that square with your narrative?

    (note that Harvey’s piece is *about* capital, not labour – the people who lost out are the ones who tried to make leveraged, speculative plays on the property market, in the expectation that they’d get rich at the expense of others…)

  4. December 25, 2008 at 11:22 am

    Sorry to pick up a debate from another post but:

    “Labour expenditure now has nothing of the Left overtones of Labour expenditure in the 1940’s, 1960’s or 1970’s.”

    Which is why if New Labour’s majority is weakened after the general election, it will be an objective advance for our class, as a reduced majority will not be viewed as a rejection of socialist policies, but despair at their absence.

    Subjectively (in parliamentary terms) the Labour left could be weakened. Which is why it will be important for the Labour left to establish good relations with the Scottish and Welsh nationalists, the Greens, Respect and those Liberals who are progressive on issues like workers’ rights (some have signed John’s EDM on the Trade Union Freedom bill). This doesn’t mean electoral pacts, but a recognition that socialist parliamentarians must work with other progressives both to resist anti-worker policies and push for pro-worker reforms.

  5. December 27, 2008 at 3:59 pm

    Well, one of you at a time – we’ll start with John.

    At these companies, shareholders have been earning their dividends, bosses have been earning their bonuses. Capital has been doing just fine – and if the companies are now loss-making, it should be up to Capital to plug the hole, rather than demand that workers cover the cost.

    In America, the cost of a fully-trained UAW worker costs about $70 per hour, including pension, benefits etc. It doesn’t matter whether General Motors and their allies are attacking the pension aspect of that, the benefits aspect or the take-home wages aspect. It’s still an attack.

    At any rate, the details are still unclear but I’ve seen everything from tuition assistance, legal aid, special absence days, healthcare and, yes pensions, mooted as potential areas for cuts. Why shouldn’t we oppose all of it? If we don’t oppose it in America, it’ll arrive here soon enough – as the Canadian Auto Workers union is finding out.

    On the subject of what Capital has lost, I didn’t say that Capital has lost nothing – I simply don’t care. Indeed the whole reason why these attacks are under way is because of what Capital has lost (and caused). That squares just fine with my narrative.

    As for your remark about how Zavvi staff are students and schoolkids, my retort is “And?” Do you think perhaps that students and schoolkids get jobs because they are fun? I didn’t; I got a job in a retailer because I needed the money – indeed it provided a sizeable chunk of how I got through university.

    You can keep your snide remarks to yourself in that regard. Zavvi shareholders and bankers have not ‘lost everything'; not one of them will have to search desperately for new jobs, as many Woolworths and Zavvi staff (and probably Whittards as well) will. None of them will be unable to keep up with the rent, or will have to drop out of university.

  6. December 27, 2008 at 4:02 pm

    Charlie, the Left elements of the PLP do collaborate with the progressive elements of other parties. So what? Co-operation at a parliamentary level occurs issue by issue.

    Other than that, we shouldn’t be in bed with nationalists any more than we should be in bed with Conservatives. The SNP are just as much the class enemy as the Tories, and we need to strip them off their progressive elements and re-orient them away from this nationalistic nonsense.

  7. December 30, 2008 at 2:35 am

    You say we shouldn’t be in bed with the nationalists, but give me Adam Price over David Cameron! Yeah, I was thinking more of Plaid, who are nominally socialist and didn’t bring down Labour in 79. The situation in Wales is not the same as in Scotland, don’t forget. In Wales Labour shares power with Plaid Cymru; there’s no reason why Plaid couldn’t join an anti-Tory coalition at Westminster…

    I think we need a more nuanced understanding of the national question. A move to a federal system is more likely to gather support than total independence in the current climate – such a move would be totally opposed by the Tories.

    My point was that we need to ensure that the nationalists are not going to be tempted to back a Tory govt after the general election in the hopes it will encourage support for independence.

  8. December 30, 2008 at 10:30 am

    A more nuanced understanding? As far as you seem to be concerned, progressive nationalism is a good thing, period. I’d hardly call that nuanced.

    Plaid Cymru and the SNP are in a different position because their respective nations are in a different position. Both exist in such numbers because Labour has been failing in its basic socialist heartlands – but neither of these groups are ready to pick up where Labour left off. Plaid Cymru won’t staff the Merthyr or the Rhondda with unreconstructed socialists any more than Labour.

    This federal system you speak of strikes me as a complete waste of time – it would, at any rate, be wholly dominated by English MPs, so I can’t see any reason for it. Westminster works fine, within the context of what it is supposed to do. People need to stop blaming the structure of government and get a better understanding of the nature of the State.

  9. December 31, 2008 at 8:04 am

    I was discussing electoral politics, what strategies might best counter a Tory win at the next election.

    I don’t think that “progressive nationalism is a good thing, period”: it is a good thing that nationalism in Scotland and Wales isn’t racist, and it is a good thing that Labour is not up against the Tories as the main opposition, which probably makes it easier for socialists in Scotland and Wales to operate within the Labour party – certainly it makes the electoral discourse about progressive issues as Labour battles with the SNP/Plaid over schools and hospitals, against privatisation and so on.

    A federal system won’t change the class nature of the capitalist state, but it will bring the nationalists on board a progressive coalition against the Tories.

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