Category: Socialism First

A Class Approach to the Independence Debate

by Vince Mills

Socialism First, like the Red Paper Collective has adopted a class approach to the independence debate arguing that ultimately what we should be asking is what is the best way to bring about an irreversible shift of wealth and power in favour of working people.

Although many on the Left agree with that there is disagreement with those advocating a Yes position because our position seeks to outline an analysis based on what we argue will be the actual dominant forces that shape a new Scotland that a Yes vote would give, as opposed to the arguments of those who believe that voting yes will by itself release revolutionary new forces. Instead we pose the necessity of a British wide strategy for challenging the power of neo-liberalism.

The independence that is on offer is that driven by the SNP, a party which has the highest share of the popular vote in the European and Scottish Parliament elections and the greatest number of councillors. It is by any measure the dominant political force in Scotland and is not about to disappear any time soon.

There are two major concerns for the Left in the independence debate. The first is the necessity to defend public services and second is the second is the longer term strategy necessary for winning socialist advance.

Let us look more closely at the economic case for independence. In his recent book: Seventeen contradictions and the end of Capitalism David Harvey writes: “The world is broadly polarised between a continuation (as in Europe and the United States) if not a deepening of neo-liberal, supply side monetarist remedies that emphasise austerity as the proper medicine to cure our ills; and the revival of some version, usually watered down, of a Keynesian demand side and debt-financed expansion ( as in China) that ignores Keynes’s emphasis upon the redistribution of income to the lower classes as one of its key components. No matter which policy is being followed, the result is to favour the billionaire’s club that now constitutes an increasingly powerful plutocracy both within countries and (like Rupert Murdoch) upon the world stage.”

Both of these strategies are being offered by key supporters of the independence project. On the one hand there is the commitment to lower corporate taxation and straight forward rejection of any strengthening of workers’ rights as advocated by the SNP leadership and on the other hand there is Commonweal strategy as outlined by the Jimmy Reid foundation that seeks to build on the limited welfarism of the Scottish Parliament posing at its core the need for partnership between Capital and Labour. It hardly needs stating that since neither advocates a fundamental challenge to the basis of class society nor a significant transfer of ownership in terms of wealth, they do not constitute the basis for a secure public services in Scotland.

And yet those arguing for independence, left and right believe that they can end austerity, although they may disagree about how they would do that.

The SNP argues that they can challenge austerity by growing the Scottish economy through a combination of sustaining the existing economic staples like oil and gas and food and drink and by borrowing money.
This growth depends on increasing the working age population through higher levels of immigration leading to better productivity leading to 2.5% growth per annum. The Finance Secretary, John Swinney also recently set out proposals to borrow heavily in the first three financial years after the planned formal split.

This, like all capitalist strategies is excessively rosy about the capacity of the market economy to deliver economic stability. For example, in relation to oil and gas as you know this has been the subject of raging arguments but no-one is saying that oil and gas reserves are not declining; the argument has been about the rate of decline and what we might expect as likely tax take from an industry that is notoriously fickle in rates of return.

In relation to borrowing, Swinney’s plans would see Scotland’s deficit rise to around 7 per cent, based on Holyrood estimates. This ignores three things. Firstly the cost of borrowing given Scotland’s standing as a new country without a track record is likely to be enormously expensive. Secondly , if there were a currency pact with the UK, any plans for such borrowing would have to be agreed with the Rest of the UK, hardly likely in the current climate and finally the EU, which the SNP is determined to join has instructed member states not to allow their deficits to exceed 3 per cent, never mind 7%. It is difficult to see Swinney’s promise as something other than a gamble for the swing in the electorate that they believe is necessary to win the referendum rather than a serious economic strategy.

In this situation without any recourse to the current Barnett formula, which allows the transfer of funds from the UK to its constituent parts, there is a strong likelihood that we would face cuts in public expenditure in Scotland because demographic change and the level of inequality mean need will grow, but the SNP want reduced levels of corporate taxation and the status quo in relation to personal taxation.

But there is another and just as important argument from a left perspective related to the issue of the economy. The level of productivity and the benefits that come from that depends on who owns the economy and what influence we, trade unionists and socialists can bring to bear on that ownership.
Scotland’ economy heavily externalised. The following statistics are based on data published by the Guardian. Nearly all Scotland’s North Sea oil and gas production is licensed to foreign firms. There is only one significant Scottish firm, First Oil. It produces just 6,000 of the total 1m barrels of crude produced every day.

• 90 banks and finance companies operate in Scotland with no Scottish registered office, including global firms such as Barclays, HSBC and Morgan Stanley. Their earnings flow directly to London or overseas.
• More than 70% of Scotland’s total economic output – excluding banking and finance and the public sector – is controlled by non-Scottish-owned firms.
• Of the large firms in Scotland, those employing 250 or more people, 83% are owned by non-Scottish companies.
• Well over 80% of Scotland’s whisky industry – the UK’s largest food and drink export – is owned outside Scotland. Nearly 40% of total output is in the hands of one London-based company, Diageo.
• More than 80% of Scottish farmed salmon, Scotland’s most valuable food export, is foreign-owned. About two-thirds of it is controlled from Norway.

What independence would mean is that Scotland would be subject to power of corporate capital vested largely in the City of London without any say in how that power is exercised because we would not have a vote for the UK politicians who have political jurisdiction over those institutions.

We did not create our history. Our forebears did and because of that the Scottish economy, and the Scottish people and the Scottish Labour movement are deeply integrated into the British economy. We need a strategy built on that reality, on existing working class institutions, primarily the trade unions, but growing beyond that into a British wide People’s Movement like the People’s Assembly, that is ultimately capable of winning the case for social ownership of the banks and financial institutions, the energy companies and the communication and transport infrastructures. That kind of advance will give us the basis for ending inequality and bringing about an irreversible change in the balance of wealth and power in favour of working people.

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Socialism First!

Welcome to Socialism First!

We'll keep the red flag flying here.

We’ll keep the red flag flying here.

This is the first blog post for a loose grouping of Labour party members, socialists, and other left-wingers.  We are entering the debate on the 2014 Scottish referendum with a fair degree of reservation.  We are not against independence in principle, but feel that the arguments being put forward for it are misguided at best and dangerous at worst.  As socialists, we reject both the reactionary stance of the Better Together campaign but also, and just as importantly, we reject the supposed “radicalism” of the Radical Independence Campaign (RIC) in the Scottish independence debate.

We are No voters, but do so out of socialist principles, rather than Better Together’s scare-mongering threats of Scottish society imploding under the burden of independence. We also believe that a Yes vote, as championed by RIC, is nothing more than a will-o’-the-wisp: a seemingly alluring proposition that will ultimately lead us further away from where we, as the working class, want to be.

We will deal briefly with the two stances and in subsequent posts we will flesh these out further (along with other various other matters) and propose some genuine alternatives.

Better Together

This will be relatively brief, because the faults with the campaign are only too plain to see.  Labour sharing the platform with Tories.  A campaign based on attempting to threaten the electorate rather than inform it.  A warm embrace to flag-waving, militarism and patriotic tub-thumping.  Renewing Trident and continuing the austerity experiment…  

You don’t need to read between the lines to grasp that this is not, in any way, shape or form a “progressive” campaign, or one that inspires or provides vision.  It doesn’t offer any alternatives for society that will advance the interest of working people   It is nothing more than a vote for Things as They Are. With such stark structural inequalities in the United Kingdom this is clearly unacceptable for a socialist. And, as socialists, it is unacceptable to us.

Surely breaking up the oppressive state that creates, regulates and enforces this unjust system is the answer?  Why on earth would anyone vote the same way as a consortium of the obstinate, bitter, old-guard?

Radical Independence Campaign

A recurring refrain from the radical Yes activists is that a vote for No is a vote for the British Establishment. The reason so many high-profile right-wingers are coming out in droves, and in such an aggressive manner, is a sign of their fear; a fear that the breaking up of Britain is a breaking up of their interests.  That in itself provides grounds for a Yes vote.

 If nothing else, this should set alarm bells ringing about the intellectual rigour of the RIC arguments.  If my enemy doesn’t like it, then I do: the enemy’s enemy is my friend.  Except, of course, that at various times in modern history the British Establishment has stridently and wholeheartedly opposed fascism and militant Islamism.  If the British Establishment opposes these things then should we side with these corrupt and false ideologies?

Obviously, those examples are considerably more repressive than petite bourgeois nationalism, but be under no illusions, independence is not a step towards socialism, nor is it an “opportunity” for socialism to emerge.  What independence does present is an opportunity for the people resident in Scotland to (theoretically) increase their political control.  Pass laws for a welfare state from cradle to grave; legislation to ensure workers rights; make nuclear disarmament central to a new constitution.  What’s wrong with that?

Well, nothing, of course.  We want all that too. But much like human rights, you can have a list of aspirations and demands as long as your arm; pass as many laws as you want; draft a constitution as profound as it is insightful, but if you don’t have the means to enforce your rights and the funds to do so, then they remain nothing more than that: aspirations and demands.  The RIC campaign has only developed – in the most rudimentary form – the argument that Scottish independence will extend beyond increasing political control to increasing economic control.  

For example, there is no outline for how we would found a nationalised Scottish Central Bank or establish a separate currency.  There are no suggestions for how we would protect a fledgling economy from currency speculators.  The SNP and Yes campaign seem to have meekly accepted that we retain the Sterling.  As such we would have no control over our monetary policy (the amount of money in our economy) and would only have fiscal (tax-raising) powers.  No monetary control would leave us at the whim and mercy of the home of bourgeois finance capitalism: the City of London.  

Do RIC accept that Scotland will be a client state of rUK if we retain the Sterling, and if so, would they abandon their demands for independence if a nationalised economy were not a founding principle of an independent Scotland?  This lack of detail or explanation on the fundamentals of the economy is deeply troubling.  The vast majority of the literature and rhetoric from the far-Left on independence is based on “anti-imperialism”. This, we suspect, is simply a convenient sleight-of-hand.  RIC and others on the far Left, whether knowingly or not, are using these arguments to misdirect attention away from their lack of detailed economic argument (which would be necessary for creating “opportunities” for  socialism, never mind actual, full-blown socialism…) towards the broader and vaguer aim of “breaking up the British state”. 

Where Next?

While breaking up the Establishment or posturing as anti-imperialists may sound attractive, it is based on false or inadequate theory and reasoning.  We have adopted a No position, and while it is the same voting intention as the Better Together campaign, it is for radically differing reasons.  

The class struggle for the democratic control of the means of production is difficult enough without having signed away many of the financial mechanisms necessary for control of the economy.  There is, in short, no prospect for socialism from either Better Together (due to its regressive politics) or the Radical Independence Campaign (due to its utopian politics).  In subsequent posts we will expand on these ideas and lay out some genuine alternatives; of why we must relegate nationalism until we achieve Socialism First.