Scottish National Investment Bank: A Marxist View

The SNP Spring Conference endorsed a motion calling on the Scottish Government to establish a Scottish National Investment Bank (SNIB). The idea of National Investment Banking has recently found favour among the left of British politics, with left wing Independence campaign Common Weal publishing a blueprint and Jeremy Corbyn proposing a British bank with regional branches as a key economic policy.

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Poverty Amid Plenty

by Tam Burke, September 2017

Child Poverty Action Group (CPAG),www.cpag.org.uk/scotland/, referred to the Scottish Government’s Report on Welfare Reform showing that 1 in 4 poor households lack enough warm clothes, are unable to afford school trips or have friends over for tea, and despite doing well at school grow up to be adults earning low pay. CPAG also show that in Britain, for 2014-15 (latest available figures) 28% of children are in poverty, almost 4 million in total. 67% of those kids have a parent in work! London has the highest amount of poor children.

 

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Expropriate Landlords!

Shaun Morris

Nobody deserves to be homeless. A friend of mine is now facing homelessness just weeks before his final exams of university. I’m thankful not to be in his shoes, but it has made me think about how much power landlords have over their tenants’ lives.
My friend’s housing woes don’t begin with this eviction. He was kicked out of his previous home by an enterprising young landlord who wanted to convert his run-down suburban house into something he could flog on the market. Despite agreeing with the tenants to renew the lease, he changed his mind a few weeks later and told them to skedaddle.
This left my friend and his flatmates looking for a new place to live with only two months until the start of term. He feared he would have to move back to his family home and somehow commute over two hours to get to university. This was no real option, so he was forced to move into a place with a dodgy landlord.
The accommodation itself was an old townhouse that had been converted into a money maker. It was a single corridor with several rented rooms and a shared kitchen and bathroom. For this, the rent was not cheap but it wasn’t even near the university campus, a 45 minute cycle away. This is what students have to settle with when made desperate by the greed of landlords.
After nearly a year, the people living there were hit with a sudden demand to move out. As it turns out, the person they thought was their landlord was in actual fact a tenant. He was sub-letting the whole place to students without the knowledge of *his* landlord. He had even hung fake family photographs on the wall to support his story that it was a family home he had inherited! Once the real landlord had found out, he immediately demanded the place be emptied. With no lease and no rights, my friend and his flatmates are forced to squat there, fearing harassment or forcible eviction by the property owner.
For the second year in a row they find themselves desperately searching for a place to live, with final year exams looming. They’ve demanded that their rent be paid back to them, but there’s no way they can force the person who ripped them off to do this. All they can think to do is trash the place in revenge. My friend studies in Dublin, but his ordeal could have just as easily happened in Glasgow, Edinburgh or London (and I would bet it regularly does).
Rent is perhaps the clearest form of exploitation in capitalism. While people can incorrectly claim that profit is earned by the enterprise of the capitalist or interest (usury) is the cost of the risk a capitalist takes when lending money, landlords blatantly exploit the human need for shelter through their ownership of private property. What possible justification is there for this? Most landlords that students will have to deal with won’t even maintain their properties in a decent state, so what are we paying them for?
Young people have the poorest prospects for housing security than they have ever had. Home ownership is out of reach for a whole generation, throwing millions into the reserve army of renters that landlords can draw on to force rents up and conditions down when their tenants demand too much. With increasing casualization, exploitation and insecurity at work for young people, we are the worst hit victims of this crisis-ridden capitalist system.
Changing our fortunes requires a radical change in direction for our economy and society, demanding a break with capitalism and the exploitation it feeds off. We can abolish the current state of affairs if we struggle for the overthrow of the ruling class whose State defends the “rights” of private property over the needs of people. Our alternative is based on a democratic and socialist plan of production, where society’s resources are directed by need rather than profit, rent and usury.
That alternative begins with building a revolutionary labour movement that puts young people front and centre. It will be a movement armed with the broadest organisation of the working class and a revolutionary socialist programme. As Marxists we are at the forefront of preparing for this struggle.
Expropriate the landlords and capitalists! Homes and jobs for all!
Abolish rent, usury, profit and all exploitation! For world socialist revolution!Being a student in a time of capitalist crisis isn’t easy, and as many will know trying to make your loan stretch to the end of the month is a struggle. The days of generous grants seem a world away and it’s an endless juggle between money for food, rent, the electricity meter and having enough to buy a few pints at the end of the week. Of course, this isn’t just the reality for students but thousands of people across Scotland and Europe who have seen their standard of living plummet since the capitalist crisis of 2008 and the brutal austerity policies that have come as a result of it.
I was budgeting the other day when I realised just how much of my money goes on rent. For me two thirds of all the money I have coming in goes straight to my landlord and I am only left with one third for everything else. It struck me just how unfair this system is, where the law requires me to give the majority of the money I have to someone simply because they have a piece of paper saying they own the land and all that is built on it.
I do not live in a beautiful flat where the landlord works hard day-in, day-out to somehow earn these huge sums of money. In fact we had to argue with him for weeks just to get a fire alarm installed. There is damp and mould all over the place and the house was easily broken into because the building is so badly maintained. However the landlord continues to receive all this money for literally doing nothing. I’m not alone and I would argue that it’s a struggle for the vast majority of people in rented accommodation to get their landlord to do basic tasks and repairs.
Rent controls are obviously a start, however I believe we should go right to root of the problem; why should people be forced to pay rent at all? It isn’t right that landlords receive money from us just because they supposedly own the land or building. Why shouldn’t they work like everyone else? Under socialism we could have a system where these parasites are abolished and where society would collectively own the housing stock. No longer would we have to live with damp and unsafe houses, as these problems could be easily fixed if the money was in our own hands. Instead of profit being valued above all else, the aim of housing would be to create pleasant spaces for people to live, and everyone’s standard of living could be greatly improved.

Marx vs Keynes

The Keynesian Economic doctrine is one of the most dominant doctrines taught in schools and universities around the world as an example of how capitalism can work in a positive way. Many cite Keynesianism as the solution to the inherent ills of capitalism. The reformist parties such as The Labour Party cite it as a credible of way of making capitalism work by supposedly making capitalism state regulated to serve the interests of all. As Marxists we know this to be wrong, but why and how?

Government intervention under Capitalism

The Marxist criticism of Keynes and his economic doctrine does not follow the same critique as others. We do not believe that the problem with Keynesianism is that there is too much government intervention but we believe that government intervention under capitalism does little good and ends up undermining itself. This is due to the fact that capitalism is governed by uncontrollable factors which no government intervention, short of ending capitalism, can stop.

Empowering the workers

​The fact is, any progressive reform under capitalism cannot be permanent and the ruling classes certainly will not let anything that damages their grasp on power survive. Many like Michał Kalecki argue that Keynesian full employment or high employment means a more solidified and more powerful working class, which would consequently lead to a weakened position for business. As we know from experience under Thatcher, this would not stand particularly whilst capitalism is in a deep crisis like now – when profits are down and debt is high, the capitalists will organise to demand the poor pay the bill. This is exactly what Thatcher represented and is what governments all over the world are doing now.

Keynes and Class

​Many Marxists argue Keynes is a prisoner of his neoclassical upbringing, this makes him unable to view capitalism in its entirety. Keynes overlooks the class role of the capitalist state and treats the capitalist state as a magical and neutral power to fix the capitalist system, or as it is sometimes referred to, a ‘Deus ex Machina.’ His students, such as Maurice Dobbs, a leading Communist Party member, highlighted his inability to accept the class struggle and class as an inherent feature of capitalism. Keynes often dismissed Dobbs’ considerations about class as “sentimental” considerations which did not concern him and according to Dobbs did not seem important to him. However as Marxists the class struggle is essential to our understanding of economic theory- and even our whole world view.

The fantasy of full employment

​Sustainable full employment is one of the many appealing fictions of Keynesianism. Keynes and his followers say that in a society without deficient demand, we can achieve full employment. However this full employment is reliant on a consistently stable economy, which as we know is very unlikely. To their credit the Keynesians have one example of full employment under capitalism, in Australia. The government’s policy of full employment lasts from 1941-1975. But then it ends. Why does it end?

One explanation from a Marxist perspective is the 70’s recession (1973-5), which reasserted the Marxist truth that capitalism goes through up’s and down’s – or booms and busts. However Keynesian economists are not big fans of the slumps as they tear apart the fantasy that anything progressive is sustainable in capitalism. Marx explained that capitalism creates and requires a ‘Reserve Army of Labour’. Unemployment is a structural part of capitalism, not a flaw we can iron out. This reserve army is required for times when there is overproduction. Capitalism is inherently unplanned and competitive, and so is chaotic.

​Periodically, the capitalists create overproduction, that is they discover they have collectively over-invested and must therefore massively cut back. This occurs partly due to the short-sighted nature of this anarchic market, and partly due to the necessary exploitation of workers, whose low wages will be insufficient to buy all that can be produced. Crises are therefore unavoidable and mass unemployment must be periodic.


Suppressing real change

​Keynes’ goal was not to make capitalism work but for ulterior motives. Many so called progressives forget that Keynes’ goal was not to help the workers but to maintain capitalism and suppress real transformation. His economic doctrine was about the ruling class attempting to manage its own crisis ridden system to save it from the early 20th century’s revolutions. Keynes was quite open about this. For example in a letter to Franklin Roosevelt in December 1933 he warned that “If you fail, rational change will be gravely prejudiced throughout the world, leaving orthodoxy and revolution to fight it out.” Keynes believed that by conceding minimal demands the ruling class can keep control, smoothing over their system’s sharp edges. Keynes was clearly an apologist for capitalism who ultimately would be prepared to throw the masses under the bus to allow power to remain in the hands of the few rather than transfer power to the many.

What do we want?

​We as socialists fight for real, meaningful and lasting change. Capitalism can no more be made to work for all, and to overcome boom -slump, than a tiger can be taught to be vegetarian. Surely the history of the past century of boom-slump, and the failure of Keynesian policies wherever practiced, proves this. Our demands are simple and modest. We demand a break with capitalism and fighting for a new and fairer society – a socialist society – one in which factories, companies and services are put under the control of workers so resources can be used in a way that benefits the millions not the millionaires. We are not fighting for Keynes’ fantasy, we are fighting for a Scottish workers’ Republic as part of a revolutionary socialist international, and ultimately the prospect of a new and entirely better world