1990s >> 1991 >> no-1045-september-1991

Book Review: Crazy World of Economics

 Action for prosperity : a new direction for industrial solidarity By Robert Corfe (Collindist Press. 1990.)

The author of this booklet is a management consultant employed by engineering firms in the Eastern Counties. A year ago, after less than a month’s service, he was fired along with most of the labour force, from a small company which had been taken over. A privileged few of the staff had been kept on and transferred to another factory. These and other experiences have led him to draw a number of conclusions about the world we live in. particularly the world of economics, and to write a series of booklets, of which this is one.

He says that nowadays firms tend to be financed by “rentiers” or owned by multinationals. whose thinking is short-term and who are sufficiently remote to have no other thought than for the bottom line of the balance sheet. The consequence of all this, he argues, is the de-industrialisation of Britain (and the US). Businesses funded by rentiers tend to be bankrupted by the moneylenders at the least sign of trouble, and those taken over by multinationals are closed down in rationalisation programmes. The only sectors to expand are those peculiar to money-juggling such as banking. insurance and other such “services”.

We cannot quarrel with much of this; the problem is what to do about it. His short-term prescription is for the workers and management to occupy the factory. His long-term solution is a new ethos based on proper long-term funding of wealth-producing industry, and protection against imports.

The occupation of factories, sit-ins. work-ins, and similar stratagems are tactics which have been used in many places and for a long time. I am not sure of their efficacy, but the privilege of judging does not belong to us, since we do not have to bear the responsibility that goes with the action. Workers in dispute are better off without armchair generals to advise them.They will know better than anybody the risk of encounters with bailiffs and their rottweilers, of truncheon-wielding policemen, of, in the last analysis, the armed forces, all of which have been used by governments against workers in occupation of factories.

What Corfe does not attempt to deal with is the cause or causes underlying these closures. We must, according to him, look forward to an infinite future of work-ins, lockouts, and similar industrial scenarios.

His alternative long-term solution is for finance to be made available to productive industry at much cheaper rates, as is the case in Germany and Japan where there is a much more rational attitude to wealth creation and a realisation that what are referred to as “service industries”, the objects of Corfe’s ire don’t create wealth at all.

But let us assume that all his pleas were satisfied, that special interest rates were agreed for manufacturing. what would that do to prevent the system continuing to oscillate between slump and growth, as it has done for the last two centuries? We have experienced the whole spectrum of market economy operation, from command systems like those of Eastern European state capitalism, through various flavours of intervention, Keynesian and Fabian, for example, to the voodoo Free-Market Economics of Ronald Reagan and Margaret Thatcher. The first lot finally collapsed last year, the Keynesian dream ended in the sleepwalk of the Carter and Callaghan administrations, and the last lot are just slipping down the toilet. Corfe would appear to favour the Keynesian interventionist option. But has he forgotten the 1970s?

The alternatives within this system are always a slump or growth. Too little or too much. A slump that threatens the majority of people with debt, in some cases denying them the bare necessities of life; and as an alternative the growth which is destroying the planet.

Now we have got a crazy idea. This is to let Mr Corfe and his fellow workers have all the food, clothing, housing, transport and entertainment, and the factory have all the plant and raw materials they need at a cost of nothing, nil. nix, no money. They can do the same for others. In this way we can get down to satisfying our needs directly without the need for finance or financiers. Too simple? But the truth is always simple. Understanding it is the hard bit. Entitia non sunt multiplicanda praeter necessitatem, superbly translated by Ray Kroc, founder of the MacDonalds junk food empire, as: “Keep it simple, stupid!”

Ken Smith