Bankers Should Take Option Two

While it comes from an unexpected quarter, we appreciate the sentiment — for sepukku, press 2:

AIG has drawn intense fire from the public, politicians and President Barack Obama for accepting up to $180 billion in government aid and then handing out the [$165 million] bonuses.

The rhetoric in Congress took on a macabre tone on Monday when Chuck Grassley, the top Republican on the Senate Finance Committee, he would feel better if AIG’s top managers were to “take that deep bow and say ‘I’m sorry’ and then either do one of two things: resign or go commit suicide.”

This Was Britain

It is 25 years since strike action at the Cortonwood and Bullcliffe Wood collieries led to the year long national strike action by the National Union of Mineworkers, which became known as ‘The Miners’ Strike’.

Spitting Image puppet, Roy Hattersley popped up on the BBC last night, accusing NUM leader Arthur Scargill of being a ‘romantic’ and ‘taking things too personally’, because the miners stood up and fought to protect their jobs and their livelihoods when the Tories moved to throw them on the slag heap. To men like Hattersley, class struggle must have seemed like a distant dream of youth, when they were engaged in the cold, hard business of selling out the miners, steelworkers and others, as the Labour Party leadership and their allies in the TUC bureaucracy were doing. In fact Hattersley’s only qualm over the pit closures appears to be the way they were carried out. Undoubtedly things would have been more pleasant for him and his friends in the shadow cabinet and the TUC leadership, if the miners had gone meekly to the dole queue. Hattersley believes the miners should have accepted the inevitable, and bowed to — what he is evidently convinced — was the irresistable force of the Tories’ anti-working class agenda, as they were, in his opinion, doomed to fail.

Thatcher’s campaign didn’t arrive out of the blue. The Tories had been planning their war on the most class conscious, tenacious and militant section of organised labour since the mid 70s, as outlined in the 1974 Ridley Plan, leaked to The Economist and published in 1978. The plan proposed that unions should be picked off one by one — steel, civil service, railways — to ensure a weakening of organised labour, before attacking the more ‘vulnerable’ (to industrial action) industries such as coal mining, energy production or the docks. The plan’s ‘confidential annex’ recommended that:

  • the Government should if possible choose the field of battle;
  • industries were grouped by the likelihood of winning a strike; the coal industry was in the ‘middle’ of three groups of industries mentioned;
  • coal stocks should be built up at power stations;
  • plans should be made to import coal from non-union foreign ports;
  • non-union lorry drivers to be recruited by haulage companies;
  • dual coal-oil firing generators to be installed, at great extra cost;
  • “cut off the money supply to the strikers and make the union finance them”;
  • train and equip a large, mobile squad of police, ready to employ riot tactics in order to uphold the law against violent picketing.

Thatcher’s election in 1979 coincided with recession — a sharp rise in interest rates, mass unemployment, and a drop in manufacturing output with the concomitant shift to financial services which has brought so much misery in the current crisis of capitalism. The Tories, in the grip of a Victorian moralist ideology, blamed the victims of recession and set out to punish the working class, slashing public spending and services. Organised labour was standing in the way of Tory policy. The Tories had backed away from pit closures in 1981, but in 1984, with coal stockpiled and power stations converted to burn oil, the National Coal Board announced pit closures.

How did the Labour Party leadership, including deputy leader Roy Hattersley, respond to the threatened loss of livelihood of tens of thousands of their constituents and people whose class interests they were supposed to represent? How did they respond to the police and army imposing virtual martial law on pit towns? How did they respond to the erosion of their traditional power base? Depite widespread public support for the miners and support from the Labour Party rank and file, the leadership did nothing. Instead, Kinnock and Hattersley opted to appear ‘reasonable and moderate’ — to roll over. Instead of supporting the workers, Kinnock and Hattersley aided the Tories by attacking Labour Councils and the left of their own party.

The miners strike was doomed by the failure of Labour Party leaders, and a class-collaborationist and increasingly weak TUC bureaucracy, to give full and unqualified support to the strikers. Instead they stood by while the Tories fomented division among the workers. It’s almost as if Kinnock and the others wanted them to lose.

For Hattersley to go on the BBC and pontificate as if his wasn’t one of the hands on the haft of the dagger is a disgrace.


1978 Economist on the Ridley Plan

Published in The Economist May 27, 1978

(1) The Conservatives intend to demand that each nationalised industry achieve a set rate of return on (variously defined) “capital employed”. This rate of return, once laid down, would be “totally inflexible”. If managers did not achieve it they would be replaced. They would, however be supported in whatever action they had to take to achieve it even if this “might mean that men would be laid off, or uneconomic plants would be closed down, or whole businesses sold off or liquidated”. The report sees no other way to restore financial responsibility. “Nevertheless”, it adds, “there is no point in undertaking it if we are not prepared to go through with it.”

(2) After issuing this call to battle, the document then prepares the way for what could be constant, surrenders at Appomattox. Uneconomic activities would be costed and separately paid for by subsidy on the vote of the minister who felt they had to continue.

(3) Investment control by government would continue through five-year rolling corporate plans with a government commitment to a decreasing proportion of the investment, as follows: year one, 100%; year two, 90%; year three, 75%; and year four, 50%. The industries should be required to borrow from the exchequer at market rates of interest. Investment control should be used to restrict industries to their mainline activity. The report believes the corporations should not compete with private industry, but also that it is not worth fighting a major political battle to oblige them to divest themselves of current “extra-mural activities” (eg, electricity and gas showrooms).

(4) No direct government control of prices or wages in nationalised industries. The only control would be by insisting on the rate of return on capital being met, even if this involved the industry concerned raising prices, or selling off surplus land or assets or closing uneconomic activities. The concept of wage comparability is rejected: the criteria for wage payments should the manpower situation in the industry and the vulnerability of the nation to a strike.

(5) In choosing which strikes to fight, the team has classified industries into three categories of vulnerability with: (a) sewerage, water, electricity, gas and the health service in the most vulnerable group; (b) railways, docks, coal and dust men in an intermediate group; and (c) other public transport, education, ports and telephones, air transport and steel in the least vulnerable group. It rejects the proposal to make strikes illegal in industries where they are not illegal, and also any idea of having a strikebreaking corps of volunteers to run mines, trains or power stations. Where industries “have the nation by the jugular vein the only feasible option is to pay up”.

(6) Managers should be much better paid than at present, and ministers should no longer usurp the day-to-day responsibility of management by replying to parliamentary questions on such matters.

(7) The present boards of nationalised industries would be made supervisory boards with most members part-time. The full-time management should be devolved into smaller subsidiary companies into which the industries should be split. The holding boards would have power to hire and fire management and to fix pay. There could be worker directors on nationalized industry boards, provided these were an insignificant minority. Pay of successful top managers would be supplemented by public honours.

(8) The only legislation that the Ridley report proposes (and itself refers to as “a nasty little bill”) would be an end to statutory monopolies in the public sector. This bill would: (a) transfer licensing of private mines from the National Coal Board to the minister and restrict conditions of licence to safety considerations only. Coal royalties would be transferred from the NCB to the state; (b) give private generators of electricity the right to sell to the grid; (c) split letter-post from telecommunications and end the telephone monopoly at the subscribers “front door”; (d) remove ministers power to stop private-sector investment in steel plant.

(9) The group considered the scope for denationalisation. It believed that it would be easier, and more permanent, to fragment the industries rather than try to sell off whole corporations. It concluded that there was least opportunity for this in the “true utilities” (gas, electricity, railways, water, ports and telephones). The greatest opportunities are in coal, shipbuilding, docks, airports, motor car manufacturing, buses and freight. Specific proposals: (a) form worker co-operatives at coal pits wherever possible; (b) separate ports, and either sell them off or make them into worker co-ops; (c) make each airport independent and either sell it or hand it over to local authorities; (d) the assets of the British National Oil Corporation should be sold, preferably to the public at a 50% discount on value with a maximum holding prescribed for any individual.

So, far this report has not been to the shadow cabinet. But it has been discussed by the powerful economic reconstruction group under Sir Geoffrey. Howe and is now before a group under Sir Keith Joseph, the Tory industry spokesman and general policy overlord. Its general thinking seems to be accepted, but its detailed proposals are likely to be modified. They will be reflected in the Tory manifesto only in the most general terms.

In an annex to this report, Mr Ridley and some of his co-authors have been pondering how to counter any “political threat” from those they regard as “the enemies of the next Tory government”. They believe that in the first or second year after the Tories’ election, there might be a major challenge from a trade union either over a wage claim or over redundancies. They fear it may occur in a “vulnerable industry” such as coal, electricity or the docks and have the support of “the full, force of communist disrupters”. Behind the scenes, they would like a five-part strategy for countering this threat:

> Return on capital figures should be rigged so that an above-average wage claim can be paid to the “vulnerable” industries.

> The eventual battle should be on ground chosen by the Tories, in a field they think could be won (railways, British Leyland, the civil service or steel).

> Every precaution should be taken against a challenge in electricity or gas. Anyway, redundancies in those industries are unlikely to be required. The group believes that the most likely battleground will be the coal industry. They would like a Thatcher government to: (a) build up maximum coal stocks, particularly at the power stations; (b) make contingency plans for the import of coal; (c) encourage the recruitment of non-union lorry drivers by haulage companies to help move coal where necessary; (d) introduce dual coal/oil firing in all power stations as quickly as possible.

> The group believes that the greatest deterrent to any strike would be “to cut off the money supply to the strikers, and make the union finance them”. But strikers in nationalized industries should not be treated differently from strikers in other industries.

> There should be a large, mobile squad of police equipped and prepared to uphold the law against violent picketing. “Good non-union drivers” should be recruited to cross picket lines with police protection.

Freedom = Money

The late and unlamented Milton Friedman, high priest of neo-liberalism, famously regarded Hong Kong as a model state, the exemplar of the ‘productivity of freedom’. Friedman’s ‘freedom’ is nothing more than the freedom of the capitalist class to exploit working people. Beneath Friedman’s glitzy chrome and glass shopping malls and towers of money, lies a nightmare of degradation and poverty, unsanitary slums, sweatshops, shoebox flats and much, much worse, where people have little more than a ricebowl and a beach towel for a blanket. The wealthy have their own vocabulary of exclusion: ‘coolie’ and ‘country bumpkin’ for manual and rural labourers; ‘Punnies’, ‘Punjabis’ or ‘chao‘ (stink) while waving a hand in front of the nose, for the descendants of Indian indentured labourers; and an array of epithets and insults impugning the Pinay domestic servants every tai-tai worthy of her status employs as a mark of her status. Before Freidman’s ‘economic miracle’, Hong Kong was a precursor to the Medellin Cartel, a narcostate which formed the distribution point for the export of Indian-produced British opium to China, in support of which illegal trade the British Empire fought two wars, bringing misery and degradation to millions of Chinese.

The IUF reports on the ‘productivity of freedom’ and Nestlé union-busting in Hong Kong in 2009:

Just two weeks after the IUF-affiliated Hong Kong Nestlé Workers Union called off industrial action as a sign of good will and to pave the way for negotiations on granting permanent employment to temporary workers and establishing formal union recognition, the company launched an aggressive assault on the union by suspending the union president, Chan Pong Yin, indefinitely. In doing so the message from management is clear: Nestlé wants to return to the 17-hour workdays, wage increases of one percent in 12 years, and a system of insecurity maintained by having a third of the workforce on revolving casual contracts.

[...] The extreme hypocrisy of Nestlé management was soon revealed when it followed up on the promise to grant permanent employment to casual workers (many of whom had worked there for 10 years) by firing them one by one before their contracts expired.

On the Mainland, the Chinese government is reportedly preparing the military to suppress riots by unemployed migrant workers, who are denied city passes and are ineligible for benefits.

To be a peasant is a blood-related social destiny and there is nothing the individual can do to change it.