ALB
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Report from London:
“We got about 1500 distributed by 4 or 5 of us at Trafalgar Square. The turnout on the march did seem much, mostly activists and lots of trots.”
More were handed out by a member who went to the start of the march at the Bank of Englabd.
Press reports here.
Report from Manchester Branch:
There were probably five or six hundred (or maybe even rather more) people at the COP26 demo in Manchester yesterday. Four members attended and we gave out all the COP-related leaflets we had and also plenty of other leaflets too. Fortunately the rain held off until we’d stopped leafleting and gone for a coffee.
I doubt it was colour prejudice that was behind not reporting what she said. It is more likely because she wasn’t saying anything particularly arresting — just about bringing more pressure on “our leaders” to do something.
It was the same at the march in Oxford yesterday that three of us leafletted. The placards, banners and leaflets called on “world leaders” or the government to “act now” and “do more”. They just disagreed on how to get governments to do this. Some favoured mass street demonstrations, others civil disobedience, others (the Trots) mass working class mobilisation. There was even one calling for a general strike. But all, as I said, directed to governments. The main slogan chanted during the march was “what do we want?”response: “climate justice now”. But that’s so vague that there won’t be anybody that doesn’t want it.
It doesn’t seem to have occurred to them that governments are constrained in what they can do by the economic system they are governing within. That governments are not doing what is needed not because they don’t care or are traitors but because they can’t.
The good news is that of the two leaflets we were handing out, one headed “Climate on Collision Course” and the other “End Capitalism”, is was the second that the more favourably received.
That’s the way to go — reinforce the view of many of them that capitalism is to blame. Then we can try to get them to consider the alternative to capitalism instead of some vague “climate justice”.
Interesting but a reason why we argue not for the abolition of money as such but for the abolition of a system of society that makes money necessary. Not so much for “A World without Money” as for “A World that doesn’t need Money”.
PGB, you write:
“But hang on – what about the bulk of the tax I regularly pay to the state? That hasn’t changed. Like, where I live, average FT weekly earnings are around $1,700 and the average tax (at 24%) on that would be around $400. A tax increase from 24% to say 25.5% would raise my weekly tax burden by around $33. Now, as explained, the typical SP response to this tax increase would be to say that ultimately or in the long run, the burden of that $33 would fall upon the capitalist. Accepting the major assumptions behind this reasoning, I agree. But what about other $400? This hasn’t been passed on to anyone, so the burden of the workers tax doesn’t fall upon the capitalist.”I don’t see the problem with the established $400. Even if it wasn’t literally paid by the employer as under PAYE schemes but had to be paid by the worker out of the money wages they received from their employer, it would be a money payment like council tax or car tax that entered into the necessary monetary cost of reproducing and maintaining labour power.
In other words, it would already have been taken into account by the labour market and reflected in the level of wages.
I was going to make the same point about income tax deducted at source as in the Pay As You Earn scheme in Britain (I assume there’s a similar scheme in whichever dollar-land PGB is in). Workers can’t even be said to pay that, let alone it being a burden on them. It doesn’t come out of their pocket. They don’t even see the money. It is paid by the employer direct to the tax people. What workers have to maintain and reproduce their labour power is their take-home pay.
This is even recognised by the government statistical offices that calculate cost of living indexes. The only taxes taken into account for these are those which workers do pay out of their own pocket such as, in this country, council tax and car licence. (Indirect taxes are taken into account insofar as they increase the price of what workers have to buy). This makes sense as these payments do enter into calculating the money cost of living (to which money wages are tied).
I must confess I have doubts about saying, as in that old SDF pamphlet that wages tend to “subsistence” level (even if subsistence includes a historical element as Marx pointed out). That sounds too similar to Malthus and the Iron Law of Wages.
I think a more accurate formulation of the law of wages is: that wages tend to reflect the money cost of reproducing and maintaining labour power of a particular type. This covers skilled workers as well as those doing jobs that don’t require any particular specialist training.
Just to close the file on this question of whether our position on taxes and wages is or is not in accordance with “Marxian” economics, a couple of quotes.
1. From Bax and Quelch A New Catechism of Socialism. First published 1903. 6th edition 1909
“But do not the working class pay the rates and taxes?
No. Rates and taxes are paid out of the surplus-value taken from the workers by their exploiters. As already explained, the return to the workers — their wages — is determined by their cost of subsistence, regulated by competition in the labour market; consequently they have nothing wherewith to pay taxes, and whether these be high or low, or whoever has to pay them directly, the position of the worker remains the same. He gets, on the average, his subsistence, that is all.”2. From the entry on “Taxation” in the glossary of words on the Marxist Internet Archive:
“Workers naturally resent income tax and indirect taxes that add to their cost of living, and any increase in these will obviously impact on their living standard at the time the increase is introduced. In the longer term however, the level of taxation does not affect the level of wages; rather, the level of taxes determines the division of the surplus between capitalist, landlord, banker and state – all of whom are supported by the working class.”
1. Thanks, PGB, for conceding that Marx’s statement in that 1853 article was “anomalous” compared with his other writings on wages. I still don’t know why he wrote it. It seems to have been in answer to a claim by Gladstone in his budget speech that his changes to Income Tax would not “touch upon the ranks of labour”. Marx political comment is even stranger as in the previous sentence he (or the People’s Paper) said that “our” preference would be for a graduated income tax. But why call for any Income Tax if you think that employers are going to pass this on to workers as reduced wages? The whole argument is a mess, not to say a patent absurdity.
2. You say that Marx didn’t have a “law of wages” and that Dobb, Meek, Sweezey etc never used the term. Maybe they didn’t (I don’t know) but people in the Marxist tradition would have been reluctant to use it in the light of Marx’s demolition of the “Iron Law of Wages” in 1875 in The Critique of the Gotha Programme. But there was one who wasn’t — Engels. In 1881 he wrote a series of articles for the trade-union paper, the Labour Standard. In both the article on “The Wages System” and the one on “Trade Unions” he uses the term “law of wages” 3 times in each of them. In a later article (on “The Wages Theory of the Anti Corn Law League”) he succinctly defines this law as that “the rate of wages is determined by the price of those commodities which enter into the habitual and necessary consumption of the labourer. In other words, all other things remaining unchanged, wages rise and fall with the price of the necessaries of life.”
But makes it clear that it is not an “iron” law:
“The law of wages, then, is not one which draws a hard and fast line. It is not inexorable with certain limits. There is at every time (great depression excepted) for every trade a certain latitude within which the rate of wages may be modified by the results of the struggle between the two contending parties.”
3. You claim that in saying that the “burden” of taxes on wages is passed on to the employer we are using the word “burden” in an unusual sense. Not so. Here, for instance, is how Wikipedia defines it:
“In economics, tax incidence or tax burden is the effect of a particular tax on the distribution of economic welfare. Economists distinguish between the entities who ultimately bear the tax burden and those on whom tax is initially imposed.”
Sometimes our case on taxes in put as “the workers don’t pay taxes” but this is not the case. They do pay some taxes directly out of their own pocket (eg car tax, council tax). Our case is that, insofar as paying such taxes enters into the general average money cost of living as a worker, it raises the money wage employers pay. That is why we are careful to say instead that “taxation is not a burden on the working class”. It is also correct to say that the “burden” of taxes on workers is passed on to employers since, after the adjustment, the workers’ standard of living is restored to what it was before. It is not affected. Employers, on the other hand, end up paying higher wages; which reduces the profits they retain.
The Classical Political Economist (and capitalist and MP), David Ricardo put the position clearly in 1817 in opening pararaph to chapter 16 of his Principles of Political Economy and Taxation,:
“Taxes on wages will raise wages, and therefore will diminish the rate of the profits of stock. We have already seen that a tax on necessaries will raise their prices, and will be followed by a rise of wages. The only difference between a tax on necessaries, and a tax on wages is, that the former will necessarily be accompanied by a rise in the price of necessaries, but the latter will not; towards a tax on wages, consequently, neither the stock-holder, the landlord, nor any other class but the employers of labour will contribute. A tax on wages is wholly a tax on profits, a tax on necessaries is partly a tax on profits, and partly a tax on rich consumers. The ultimate effects which will result from such taxes then, are precisely the same as those which result from a direct tax on profits.”
I have finally tracked the article down and my guess was completely wrong. It was not written for the New York Daily Tribune but for the People’s Paper and was published there on 23 April 1853. So it was not written for money at all. It was an expression of his political views or at least those of the remnant of the Chartists. It doesn’t make his claim any more correct though.
If a tax is imposed on capitalist employers they cannot simply pass this on either as a reduction in wages or as a rise in the price of what they are selling. They might be able to but only if market conditions allowed this; which is not always the case.
I didn’t mean that capitalists didn’t pay any direct taxes, only that they didn’t pay income tax. I meant to say that most capitalists didn’t as income tax was intermittent in most countries up to the 1850s.
Ok, my guess as to why Marx wrote that is unfair. He must have believed it but that doesn’t detract from the fact that he was wrong.
We have debated the CWO on a couple of occasions and, Alan, I am afraid your interpretation of what they mean is mistaken. Listen to them explaining what they mean:
Can a Majority of Workers Develop Socialist Conciousness Under Capitalism?
Ironically both Alan and PGB are quoting from the same 1847 Marx article.
I am not sure how PGB missed the key passage which states the situation from the point of view of what is now called Marxian Economics (and of Classical Political Economy).
Writing in 1847 Marx would have had in mind indirect taxes on the goods workers bought not a direct tax on their wages. No workers paid that then. In fact
capitalists didn’t either.That taxation is not a burden on the working class is a consequence of the “Law of Wages” which states that the price of labour power tends to reflect the money cost of creating and maintaining it. Insofar as paying taxes is part of this cost then this will be reflected in the price of labour power, by increasing it. Another corollary of this Law is the opposite — that anything paid to the wage worker or provided for them free will have the effect of decreasing the price of labour power as it reduces the money cost of reproducing it.
So while taxes that workers pay are passed on to the employer as higher money wages (so that in effect they are a burden on employers), monetary and non-monetary benefits paid to workers benefit employers (as this reduces the money wages they need to pay).
Some provisos:
1. We are talking about the working class as a class and so the average cost of reproducing and maintaining labour power and not about individual workers.
2. The Law of Wages is not an “iron law” but can be influenced by the struggles of workers. They can bring about a wage rise quicker than market forces otherwise would and they can delay a fall and maybe prevent it falling as far as it otherwise would. Changes in the cost of reproducing labour power brought about by changes in taxes, up or down, are not automatically immediately reflected in changing money wages.
3. The wealth which goes to the government as taxes comes ultimately from the unpaid labour of the working class, even if only indirectly via the employing class.
As to the claim in the 1853 article Marx wrote for the American newspaper that “under our present social system of employer and employed, the middle class man generally indemnifies himself for additional taxation in diminished wages or increased prices,” it is wrong.
According to his own economic writings, employers cannot arbitrarily reduce wages below the cost of reproducing labour power (at least not for long without negative consequences such as reduced productivity). Nor can they arbitrarily raise their prices; they can only pass on a tax on what they sell if that’s what the market can bear (and if it can’t and they raise the price they will lose trade). In both cases, they have bear the burden of taxes.
I am guessing that Marx wrote that article for the money and was writing what he thought the editor would like his readers to read. But, anyway, that passage is wrong.
The article’s conclusion should help decide the matter, Alan:
“The working class needs to be conscious of its history and to have a programme for the creation of the new society. To achieve this a revolutionary political organisation, rooted in the working class, which can operate as a guide to a new society is required. While we cannot control the material conditions which precipitate future struggles, we can direct our efforts to forming a class political organisation. This is the key issue today. It is also the only hope for a successful fight against the climate crisis.”
It’s the same as what the Trots all say is the answer to everything: “Build the Vanguard Party”.
And how can you “fight against the climate crisis” under capitalism ? Nothing lastingly effective can be done to tackle the problem until we have a society based on the common ownership of productive resources. Getting there is the priority—and we don’t need a vanguard party to “guide” us there.
While Monbiot is doing a good job confirming “capitalism” as a dirty word, he still has to take the last step from “tax the rich” to “abolish the division of society into rich and poor by making the means for producing useful goods and services the common property of all the people under their democratic control.”
What’s the point of allowing the rich to exist and get rich by exploiting the rest of us and then taxing away the proceeds to provide better amenities? Why not cut out passing via them and directly use commonly-owned resources to provide the better public amenities?
I too thought that that was a strange way of putting it. We don’t want to “dampen down” young people thinking that a better world is possible, only to point out that this is not possible without getting rid of capitalism. And we need to encourage them to blame “capitalism” by name, so as to open a conversation on what capitalism is and what its abolition would have to involve.
