Inequality in Britain

this is the third video in my series based on the book towards a new socialism socialism aims to overcome capitalism's gross inequalities of income rights and opportunities it makes its primary appeal to those who suffer from the inequalities of capitalism those who benefit or believe they benefit from inequality and privilege tend to oppose socialism the wealthy are easily convinced that attempts to achieve social equality are futile where they are not misguided to this end it is argued that inequality is both functional and inevitable unequal incomes are necessary they claim in order to provide the incentives to make people to work hard and efficiently whatever their initial intentions even socialist countries will find they have to introduce inequality to make the economy work well that's what the wealthy say but there are double standards here the advocates of social inequality think that the wealthy respond to quite different incentives from the poor the rich are to be persuaded to work by the stimulus of still greater wealth hence the paramount importance of reducing taxes on high incomes when dealing with the poor in contrast it is held that there is nothing like the prospect of still greater poverty as a work incentive now we strongly disagree with all this in our book we argue that although a modicum of economic inequality may be inevitable this amount is tiny compared to what exists today it is possible to run a society that is efficient humane and basically equal it's easy to think of several causes of inequality under capitalism exploitation of people who work the inheritance of wealth by a minority unemployment infirmity in old age the economic subordination of women differences in skills and ability now all of these are real but by far the most important of these most important in terms of the order of magnitude of the effects it produces is the exploitation of those who work now it may not immediately be apparent to people just how extreme the inequality that this produces is but i'm going to illustrate it with british economic statistics now what is exploitation in an exploitative relationship the person who's being exploited doesn't get back out of it what he or she puts in the idea tends to be rather vague and imprecise in the case of input in the case of personal relationships but in the cash relationship between worker and employer it takes on a precise meaning a worker's exploited if the wages she gets are worth less than the product of the work than that she does worth less than the value of the product she that she produces now let's consider a case where there's no exploitation where we're on this flat plane at the front suppose a worker is employed for eight hours a day if she's not exploited then the wages she gets for that work should allow her to buy goods and services that took eight hours of work to produce so if she goes to the shop at the end of the day she can fetch from the shop or from our other purchases goods which took eight hours to produce now although goods don't come with their labor content stamped on them like the calorific content of cereal packets it is in principle possible to calculate their labor content and we explain how that can be done in our book so you could see in a socialist economy packets of cereal with in addition to the calorie content their labor content so 550 grams of cereal here actually took 5 minutes and 32 seconds to make it's clear that in the case i just gave where someone works 8 hours a day and gets back 8 hours of products there'd be no exploitation a week's work as a cook or a bus driver would be exchanged for the same amount of work by those who supply the employee with her wants and necessities farmers clothes workers bakers actors etc now that would be nice but in practice it doesn't happen in a capital society although the labor contract between employer and employees formerly a voluntary agreement its terms are effectively dictated by the employer someone who's been unemployed for a while or who fears unemployment will be glad of any job and won't be too particular about the conditions in those rare circumstances very rare circumstances where there is a severe shortage of labor and wages rise to non-expositive levels then the employers have the option of leaving their capital in the bank to earn interest and they would rather do this than higher labor at wage levels which would threaten profits now what is the scale of exploitation which takes place in the capitalist society i'm taking britain as an example it may be a bit more extreme than some other european countries but it's a fairly typical example now this is the table we have in the book that calculates the rate of exploitation in britain and basically all you have to do is go through sector by sector and see how much was paid in wages and how much did that sector pay out as property income and for the british economy we found that 57 percent came as wages 43 went as property income now there are other adjustments which have to be made uh which aren't shown in this table which have been complicated which raise that considerably by a few percent raise it a few percent um basically you have to take into account the banking isn't really the same as other sectors and has to be treated separately so on average if you go to work or you went to work in 1982 you would work 34 or minutes for yourself and 26 minutes for your employee employer it would be somewhat more than that now it's probably less than 30 minutes you get yourself now the point is that exploitation is the main cause of inequality you might think oh well it's only 40 maybe fifty percent of your wages that are going but they're associated with gross inequalities of income and wealth that's because of what happens with the proceeds of exploitation they're either distributed as dividends or interest payments or they're used to finance capital accumulation on the part of the company that employs you in either case the beneficiaries of this are the owners of the shares and bonds and other financial assets of the company if profits are diverted to dividends the shareholders benefit directly if they're directed to capital accumulation the shareholders benefit indirectly through capital appreciation and the point is that shares are very very unevenly distributed among the population in 1975 the royal commission on the distribution of income and wealth reported that the bottom eighty percent of the population own less than four percent of shares even in a highly developed country with a highly developed stock market the majority working people own no shares at all and those workers who do own them often will have only a few hundred pounds worth so the income from shares makes up an insignificant part of their total earnings this rise this gives rise to inherited and stable structure of class positions a class structure in britain that hasn't really shifted in centuries the uneven distribution of income is self-perpetuating a very small proportion of the population has the majority of shares the royal commission found that some 330 000 people own 55 percent of all shares and 58 of all land now 330 000 people sands a lot but it's half of what half of a percent of the population or one in 200 of the population owned more than half the wealth so the top 0.5 percent had more shares than all of the remaining 99.5 percent think of the implications of this if half the population are of working age and if all worked in the private sector then each person in the top half percent would have roughly 55 people working for them producing profit for them each one of them would have 55 of us working third and allowing for even the 1982 share of um wages that go to the employee it means that in those days in 1982 each of them had would have had the sum equal to monthly wages of about 45 people now that's pretty massive and this emphasizes the importance of privatization to this to the the class at the top of society if the top tier each to have their 55 direct and indirect servants the need to be 100 employees of the private sector for each member of that class in the post 1945 period there was a sharp rise in the public sector and a stagnation of private sector employment this is the public sector and this is the the private sector stagnated there's 1945 stagnated again the the public sector shot up in the post-war period shot up during the war due to wartime employment and then rose and continued to rise so in 1975 they only had the equivalent of 30 servants each buddhist and this really was found to be quite intolerable and they needed someone like thatcher to come in and remedy the situation and thatcher's neoliberalism reversed the trend as you can see private sector employment shot up public sector employment went down went up a bit under the the brown lair government and then went down again now they've managed to ensure that each member of that class have 45 people working for them well they aim to get their their the whole 100 in due course because they can afford to save a much larger fraction of their income than the average employee but obviously they can save a huge portion this class will continue from one generation to the next to hold the greater part of the nation's financial capital and to rule over us you

Channel: Paul Cockshott

Views: 1,448

Rating: 5 out of 5

Keywords:

Id: d-A9oWECsJI

Length: 14min 57sec (897 seconds)

Published: Thu Oct 15 2020