“Our economic crisis is part of the same pattern of rampant profit extraction replicated across the globe… capital is seeking to drive up profits at the expense of the vast global majority”
By Sam Browse
Oxfam has just published its latest report, Survival of the richest: How we must tax the super rich now to fight inequality. The headline figures in the report are shocking.
Since 2020, Oxfam argue, almost two-thirds of all new wealth has gone to the richest 1% – nearly twice as much money as the bottom 99% of the world’s population. While inflation outpaces the wages of at least 1.7 billion workers, billionaire fortunes increase by $2.7bn a day. And while over 800 million people went to bed hungry, food and energy companies more than doubled their profits last year, paying out $257bn to wealthy shareholders.
But in addition to highlighting gross and growing global inequality and some policy prescriptions for dealing with it, the report also demonstrates that the cost of living crisis in the UK is part of a global crisis which is driven by the accumulation of colossal private profits.
Several of these global dimensions are frequently invoked by the Tories, with soaring food and energy costs attributed to factors such as the war in Ukraine, rising levels of post-covid demand, or covid generated (others say Brexit generated) bottlenecks in global supply chains. What they do not identify as an international driver are the large corporations accumulating the titanic profits that Oxfam enumerate.
Trade union leaders have rightly described hoarding by businesses while their own members are told to accept pay cuts and attacks on their conditions at work. Mick Lynch, for example, has been a key exponent of the idea that it’s increased profits, not wages, that are generating a price spiral – with rail companies pocketing hundreds of millions for their shareholders while the workers are offered real-terms pay cuts and threatened with redundancies and worsening conditions. Unite has similarly produced a report that locates the blame for rocketing prices with profit-seeking.
As at home, so it is on the world stage. The Oxfam report says, ‘a growing body of evidence points to corporate profits and margins as a significant driver of inflation. Not only are companies passing increased input costs on to consumers, but they are also capitalizing on the crisis, using it as a smokescreen to charge even higher prices. In the US, the UK and Australia, studies have found that 54%, 59% and 60% of inflation, respectively, has been driven by increased profits. In Spain, the CCOO (one of the country’s largest trade unions) found that corporate profits were responsible for 83.4% of price increases during the first quarter of 2022.’
Rather than viewing eye-watering inflation and real terms pay cuts as an inexorable outcome of an abstract “global economic crisis” as the Tories would have us see it, it’s better understood as an instantiation of the same pattern of rampant profit extraction replicated across the globe – everywhere crisis, because everywhere capital is seeking to drive up profits at the expense of the vast global majority.
From this, we should derive conclusions for our own activity in the UK, the first and most obvious of which is that we must demand taxes on wealth – as Oxfam, and several other organisations and MPs have argued. But it’s not enough only to redistribute wealth. To permanently end this kind of hoarding requires a fundamental change in the distribution of power in our economy. The Starmer leadership needs to offer more than only a backdated windfall tax and cash to “crowd in” green private investment. We also need democratic forms of public ownership and serious state-directed investment in a 21st century industrial strategy, rebalancing power in our economy away from parasitic rentier and casino capitalism towards the real producers of value – working people. If the Blair/Brown governments, the 2008 crash, and 15 years of subsequent stagnation should teach us anything, it’s that redistributing wealth while embedding the neoliberal fundamentals is to build castles on sand that collapse in the face of crisis.
The second is that while the Tories are wrong to speak as if global crises are like freak weather events that should simply be endured, it is true that economies are interconnected and integrated. For instance, the UK is a net importer of food and gas, the prices of which are set on global markets – that is, by the price gouging whims of international capitalists, not our own domestic boss class. While fully decoupling from the international division of labour is utopian, we should absolutely aim to insulate workers in the UK from soaring prices in the long term through developing our own capacity to generate things like green energy and cultivate sustainable food (which would also contribute to addressing the increasingly urgent climate emergency).
But it also – thirdly – means concluding that a struggle between workers and bosses somewhere else in the world affects our own economic situation here in the UK. Their success in driving back the tide of profit accumulation is our success, too. Solidarity with workers’ struggles across the globe should be a priority.
And fourth, with that – critically – should come political support for those governments and social movements who represent the interests of working and oppressed people in both their own domestic contexts and in the international institutions of power. The ruling class organises globally, shaping these institutions and intervening into them; we must, too. From this perspective, the critical issue defining our foreign policy orientation should not be “the West versus the rest” or any other formula from the Cold War revivalists, but where foreign actors and institutions stand on this worldwide profiteering – and what they are doing about it. Indeed, part of the reason capital does not dominate in the same way in every corner of the globe is because there is, in some places, this resistance at the level of the state and regional inter-state cooperation. Offering our solidarity to progressive governments – in Latin America, for example – who are fighting against the neoliberalism that has allowed this rampant profit extraction, and defending them against destabilisation and imperialist interference, should therefore also be a priority.
Fifth – and finally – far from the left needing to forsake internationalism to concentrate on so-called “bread and butter issues” like pay and conditions, all of the above underlines the importance of advancing an alternative foreign policy in addition to conducting an all out industrial struggle. Any politics which is committed to progressive economic change at home, but which cleaves to the international economic architecture and political institutions that have incubated the global profiteering crisis, will find itself – perhaps fatally – encumbered in taking that change forward. Grafting the bosses’ foreign policy onto a workers’ economic policy is a nonsensical and self defeating contradiction.
This latest report from Oxfam highlights the global scale of the crisis and that – critically – it is not a crisis for everyone; those across the world who live from their wealth are doing very well. Our economic policy should turn the tide, standing up for those who sell their labour to live, alongside a foreign policy that links all forces around the world standing with people and planet over the accumulation of vast profits.
- Sam Browse is an organiser for Arise Festival and a regular contributor to Labour Outlook. You can follow him on twitter here.
- Read the Oxfam report: Survival of the richest: How we must tax the super rich now to fight inequality in full here.
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