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The age of recession sharpens class war

Written By: - Date published: 12:00 pm, August 13th, 2010 - 21 comments
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So, it looks like we’re heading back into recession. US growth forecasts for the next quarter have been slashed to barely the rate of population growth. Australian unemployment has risen (although not anywhere near as much as ours). New Zealand manufacturing dived back into contraction in July.

The situation is likely to worsen because a return to robust growth is dependent on over indebted consumers magically starting to take on more debt and upping their consumption. Eventually even our Treasury will catch on and downgrade its growth forecasts.

We’re going to have to get used to the idea that we can’t depend on perpetual economic growth to deliver rising living standards to all, masking the truely horrendous inequality of the distribution of wealth.

Fortunately, we can easliy afford to make the majority of people much better off even without the economy growing. The New Zealand economy produces about $180 billion worth of wealth a year, that’s over $100,000 per household. And the coutnry has hundreds of billions of worth of capital. But nearly all that annual production, and even more of the capital, is controlled by a tiny elite. We can enrich nearly everyone without a growing economy just by making the distribution of wealth more equal (more on how to do that in later posts, although its all been discussed before here and elsewhere).

But exactly the opposite is happening. While ordinary families are cutting back on the basics, luxury goods consumed by the elite are flying out the door from top end cars to grouse shooting estates to superyachts. The rich are still getting richer.

With a shrinking economic pie, the larger slices for the elite are coming at the cost of the rest of us though lower wages and job losses.

The rich get tax cuts paid for by cuts to the social wage, the public services we all consume that effectively form a large part of our income. Paul Reynolds gets a $250,000 tax cut on his $7 million pay packet; you and I get health cuts, education cuts, benefit cuts, pay cuts, overtime cuts, and job cuts.

This is simply class war; a battle over shares of a diminishing prize. And we’re letting the rich win.

How can this be redressed? How can we improve the living standards of nearly everyone while the total wealth pool isn’t growing? It isn’t so hard. We just have to start winning the class war.

21 comments on “The age of recession sharpens class war”

  1. That’s cause theyve convinced most workers its not about class but about individual ‘aspiration’.
    You wont class class solidarity until workers realise that its the bosses that are the enemy and not their beneficiary neighbours and begin to organise fighting, democractic unions. When workers have some class muscle the repressive response of the bosses will further prove that we have to get rid of capitalism. So lets hear some practical plans.

    • RedLogix 1.1

      You wont class class solidarity until workers realise that its the bosses that are the enemy

      In everyday terms it’s not the bosses who are the enemy dave; the vast majority of whom are ordinary people who work in the business they own more or less alongside the people they employ. Outside of the relatively minor gives and takes of wage rounds and pay negotiations, the interests of business owners and business employees are not very far apart; both are motivated to engage in something creative and worthwhile, that adds value and earns income in an honest fashion.

      The real enemy are the bankers/financiers/market speculators…the parasite class who make money by manipulating money. In normal times these people should be constrained to a strictly limited role in the economy, acting as credit transfer bookkeepers and stewards of capital. Our collective blindness and failure to contain the cancerous growth of this class of people is the root of the disease.

      Marx himself understood that these ‘cavaliers of credit’ were the threat, even if his followers did not.

      • Armchair Critic 1.1.1

        Our collective blindness and failure to contain the cancerous growth of this class of people is the root of the disease.
        It’s worse than that, RL – last time we got the chance we voted one of them in to lead the country.

      • joe bloggs 1.1.2

        Blaming the so-called parasite class is a smoke-screen – what you’re really bemoaning is the difference between altruism (communism) and egoism (capitalism).

        Egoism may allow people to starve, sure. But it also allows people to improve themselves and their situation. It also allows people to build a better future for their children, and to contribute surplus resources to causes that they believe in.

        May not be perfect but it’s a system thats survived for millenia – unlike communism.

        What’s that old Russian saw? Communism is the longest path from capitalism to capitalism…

        • Draco T Bastard 1.1.2.1

          Egoism may allow people to starve, sure. But it also allows people to improve themselves and their situation.

          Yes it does and no it doesn’t. There was pretty much no such thing as social mobility when the economy was growing and now that we’re pretty much at the limits to growth then social mobility isn’t in the equation at all.

          To make it so that everyone has a good life we need communism.

        • Craig Glen Eden 1.1.2.2

          You got it in one Redlogic, Joe Bloggs is still fighting in Vietnam I see. Joe Vietnam’s finished the communists arn’t your enemy and capitalism is not your friend. Hello!

        • Vicky32 1.1.2.3

          Ma dai! You talk Joe, as if capitalism is the natural state of humanity, it’s not, it’s a blight, an excrescence, a parasitic growth on society. It’s a sick sick world where egoism has triumphed over altruism! One result is the deaths of thousands of Pakistani children from cholera and starvation as a result of flooding, while the USA wastes more than enough money to save them, on blowing people up in order to spread what they call democracy (capitalism). Sick, sick stupid human race. 🙁
          Deb

      • KJT 1.1.3

        Ordinary bosses are not the enemy. There interests are the same as their workers even if they do not realise it. Employees on good wages buy local businesses products. Dropping wages causes a downwards spiral for both employees and SME’s.
        I have been both.
        It was the lack of money that NZ’rs have to buy what I was doing, artificially high exchange rates preventing overseas sales and the difficulty of getting finance after my house equity was gone that led me to give up. I had very good employees that kept us going for a longer time than we may have otherwise.
        Big business and finance houses which have structured the economy so they take an unjustified part of the pie are the problem.
        Shareholders who are allowed to have all of the right, but none of the responsibilities of business owners.
        Banks who clip the ticket at every point and who sponsor political parties to remove restraint on their power to make money.

      • dave brown 1.1.4

        I use bosses to mean those who employ workers to extract surplus value off them. That is Marx’s usage whatever you may think he said redlogix.
        Yes lots of small employers are not consciously exploiting workers. But this doesnt change the reality that they are. Quite often small employers are subcontractors to MNCs, and of course we know that many workers are now ‘contractors’ legally. Self-employed people are not exploiting workers, but their ideology is often antiworker. The history of the majority of farmers in NZ shows that.
        I agree with you that big employers are the worst and this includes the banks which owns large chunks of the MNCs.
        Banks and finance companies do deserve the label ‘parasites’ but only because pushing money around is not productive. Yet pension funds like the Cullen Fund play the same role using the savings of workers. Its harder to put the label ‘parasite’ on them.
        Its the system that dictates ones class, and class interests.
        The way out of here practically is to get rid of this privatising government and nationalise the strategic assets of the economy without compensating the ‘parasites’. Under democratic workers control or teh self-employed such as farmers these would outperform any market led outfit such as we have seen in rail, energy, etc.
        Most workers in this country would back such a policy as opposed to privatisation of everything. Who in the Labour Party will stand up for a policy of nationalising strategic resources under democratic workers control?

      • Ryan 1.1.5

        Well done on that comment, signed the remove G.S.T from food and tax speculation petition yet? The “free” market, futures, shares, derivatives, all tax free. And all controlled like TAB bets by wealth management funds. This whole world stinks of the secret racist societies that wage war on skin colour and class by having billions and trillions of our dollars to themselves. It’s sick. No wonder we have jihad upon us. The youth of today resign themselves to the fact were f****d and we have no future. Some race the human has come to be. The means of winning the class war for the people and not the elite has to be on an international level. And as for Labour and SOE’s? Who’s going to stand up for a constitution?

    • Tiger Mountain 1.2

      Right on Dave. People prefer to remain in denial or are oblivious to the fact that the captialist system has passed it’s useby date. Meanwhile kids and the vulnerable suffer on as revealed by UN statistics. We can all restate the fallout from capitalist ownership and control of the world’s resources and productive forces.

      It’s ultimately about ownership and control, not just distribution. The social democrats that post here will be concerned about us harder lefties utterances-“utopian socialism, didn’t work in Russia’ etc. I have empathy for those that run the raffles and work hard for a fairer society via Labour and the electoral cycle. It is exactly that though, a reformist cycle. Nonetheless, a short term programme to help re elect Labour could include-no PPPs, nationalise everything that looks like a public utility including power generation, pay equity for women now, a universal basic income (to help bury the ‘bash a bennie’ syndrome), extensive public works, healthy foods in schools and so on.

      Ulitmately the politics that dare not speak it’s name -socialism-will be revisited either by popular informed mass action, or maybe as a consequence of some ugly futurist style conflict when finance capital finally collapses and the planet just cannot take anymore.

  2. prism 2

    Too true. Trouble is people enjoy looking down on others. Makes them feel superior. Handy to have someone to despise, sole mothers and fathers, unemployed, people with mortagee sales.

    (How uninterested people are in the difficulties that others face was shown by the moans of some house buyers who purchased in a mortgagee sale and found it stripped of chattels. They complained in a radio program and the interviewer agreed it was disgraceful. Nobody mentioned the bereft previous owners trying either to recover something from their loss, or the possibility of everything being on hire purchase and repossessed, still leaving most of the contract still to be paid.)

    The wealthy or comfortably-off younger age group, and the favourites of NZ welfare society like the comfortably-off retired, don’t care if life is short, brutish and mean for others as long as they aren’t bothered by the demands of those who don’t have an equally fortunate outcome.

  3. ZB 3

    Practical plans.

    i.) Start your own community insurance scheme, where you pay your car insurance, house insurance
    into a community pot, then expand to your mortgages. You see the rich make a lot of money on
    churning money over and if you just take back your cash form them they’re portfolios just drop.
    ii.) Start your own bulk buy, everyone needs potatos, milk, so start a non-profit, buy good in bulk
    from the local trade store and pass on the savings to your members.
    iii.) Is it too hard to ask you to fence your land and grow your own beans!
    iv.) barter, if you don’t know how to plub but do know how to fix a roof then use
    the new connection from i), ii) to barter your home to a higher standard, maybe even
    put a solar heating panel on the roof, or whatever.

    You do not need to wait for the rich to wise up, you just need to wise up.

    Then start a co-op building society.

  4. loota 4

    Uh Marty I think you used GDP as the wealth the NZ economy produces every year, and shared out between households that would be $100K plus per household.

    Only problem is a lot of that wealth is generated by foreign owned companies and gets exported by the billion. The issue of not having economic sovereignty.

    I suspect if you use our GNP figures, we will look like a much poorer country. (Because we are).

  5. coolas 5

    “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.’

    Warren Buffett speaks out: http://www.nytimes.com/2006/11/26/business/yourmoney/26every.html

  6. Jenny 6

    I think you have called it right here Marty.

    Following last week’s shock news of 6.8% unemployment rate, the economic outlook does not look good.

    From stuff.co.nz, yesterday, just the headlines alone, tell their own story.

    “NZ dollar falters on global fears

    “Global stocks sink on economic fears

    “Asian shares fall on global concerns

    “NZ sharemarket dives as fear grips global markets”

    Shock rise in Australia’s jobless rate”

    ‘”Beware! the end is nigh!

    • Jenny 6.1

      From Grant Morgan’s essay “Beware! the end is nigh!” on how economic and other collapses sharpen class war. Quoting, New Zealand global trends researcher John Robinson, on his predicted rise in authoritarian government, to prioritise “property” ie. ‘capital over people’.

      Perfect storm spells P-E-R-I-L

      The first letters of Profitability, Ecology, Resources, Imperialism and Legitimacy spell P-E-R-I-L236.

      That’s an apt acronym for the five system-level crises merging into a perfect storm that will collapse capitalism, placing humanity in grave peril.

      If catastrophe devastates an unprepared public, then we could all be pushed into the bleak society theorised by John Robinson, a global trends researcher in New Zealand.

      In about two decades, Robinson predicts, a “perfect storm’ will trigger “world-wide breakdown’. A global population “collapse’ will make “survival’ the first aim. Probably a “strong leader will seize power and the masses will breathe a sigh of relief’. Some sort of “fascism’ will prioritise “property’, ready to “drive down peoples and continue environmental destruction’.237

  7. Deborah Kean 7

    ZB, sadly, your ‘practical plans’ assume that you are addressing healthy and comfortably off tradesmen! ”
    iii.) Is it too hard to ask you to fence your land and grow your own beans!”
    It is if you are (as I am) a 155 cm tall woman on her own, and further, a renter not a home owner!
    “iv.) barter, if you don’t know how to plumb but do know how to fix a roof then use
    the new connection from i), ii) to barter your home to a higher standard, maybe even
    put a solar heating panel on the roof, or whatever.”
    Fix a roof? It is to laugh….
    (Fixed your spelling for you, as well..)
    Deb

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