With inflation soaring, apologists for capitalism are demanding that workers exercise “wage moderation” to control prices. Workers, however, are not the cause of rising costs, but the victims of this crisis. To fight against inflation, we need expropriation!
Less than twelve months ago, in his speech Speech at Conservative Party Conference Last September, Boris Johnson pledged to create a “high wage” economy.
Now, however, as inflation continues to rise and unions begin to move, ‘wage moderation’ has become the Tory leader’s latest mantra.
Bank of England Governor Andrew Bailey also caused outrage by calling on workers to show “restraint” in the face of demands for higher wages. Of course, Bailey himself showed little restraint, earning a healthy £575,000 last year.
These big business representatives arrogantly claim that wage increases will fuel inflation. But none of them mentions what are the real causes of the price increase.
Instead, we are simply told that the workers are to blame – and therefore it is the workers who must bear these ever-increasing costs.
Shocks and shortages
A number of factors combined to generate the current four decades of high inflation.
First, a deluge of credit and cheap money flooded the system, thanks to the efforts of the ruling class to prop up capitalism during the coronavirus crisis.
This has combined with a series of supply shocks, with the war in Ukraine hitting a global economy already reeling from the COVID chaos. This has led to severe shortages of many vital products, such as gas, oil, wheat and fertilizers.
Transport and fuel, in turn, have become significantly more expensive. And that has fueled higher prices in other sectors of the economy. A turn towards protectionism, meanwhile, has increased the costs of production and distribution.
Pay and Enjoy
With most markets dominated by a handful of monopolies, profiteering firms attempted to offload increased costs onto consumers.
It is the conclusion of a recent report published by Unite the Union. Rather than witnessing a “wage and price spiral”, as Johnson, Bailey and other capitalist commentators warn us, Unit research notes that the British economy is suffering from a profit– price spiral.
The report reveals, for example, that the superprofits of the bosses are responsible for nearly 60% of inflation in the last six months. While actual sales were down last year, profits continued to rise. Profit margins for the UK’s largest listed companies were 73% higher in 2021 than pre-pandemic levels.
At the same time, while essential workers have seen their wages stagnate or fall in real terms, the average annual compensation for executives has risen to £2.59million. And while workers have faced layoffs or blunt “lay off and rehire” tactics, big business bosses have opportunistically engaged in savage price hikes, stoking the fires of inflation.
And yet, where are the calls from the apologists of capitalism for these big corporate cats to show restraint when it comes to their pay and benefits?
Value, price and profit
Listening to the representatives of capital, one would be led to believe that workers should be grateful that benevolent bosses provide them with jobs and wages.
However, every strike – including the recent inspiring action by the railroad workers – demonstrates quite the opposite: without the work of the workers, the profits of the bosses evaporate.
As RMT General Secretary Mick Lynch rightly asserted, it is the working people who are responsible for creating all the wealth in society.
“You have the power. A wheel doesn’t turn. A light doesn’t turn on without us.”
Speaking to the @RMTunion rally at King’s Cross, Mick Lynch calls on UK workers to unite and demand better conditions for all pic.twitter.com/pS2kqm7Q0B
— PoliticsJOE (@PoliticsJOE_UK) June 25, 2022
Marx explained this in his economic writings, such as his pamphlet on Value, price and profit.
During a working day, Marx pointed out, workers work to produce commodities: goods and services sold in the market. During a certain part of this time, the workers produce the value of their “labour power”, paid for in the form of wages. During the rest of this working time, they create surplus value, from which all the profits of the capitalists derive.
This search for greater profits is what motivates capitalists: to cut costs by attacking wages and conditions; or investing in technology, in order to increase productivity and reduce the number of workers employed.
In the final analysis, Marx shows that there is a zero-sum game between capitalists and workers. Workers create all new value in the economy through their work. And this is then divided between the capitalists and the workers in the form of profits and wages. What one class gains, the other class loses.
That’s why the bosses are fighting so hard to keep wages low – and why they’re now shouting at workers to show ‘wage moderation’.
Abolish the boss system!
This latest Unite report confirms what Marx explained more than 150 years ago: workers are not responsible for inflation, but are its victims.
The real culprit is capitalism: an anarchic system – based on competition and production for profit – which is unable to guarantee a decent life and livelihood for the vast majority of humanity.
We have the resources and the money in society to provide food, shelter, health care and education for all. But it is in the hands of capitalist parasites.
It is time we expropriated this wealth, taking ownership of the banks and monopolies out of private hands and placing them under the control of the workers, as part of a socialist economic plan.
This would end the profits of the capitalists and provide everyone with basic necessities like energy and housing.
This is why Marx called on the trade unions “to inscribe on their banners the revolutionary slogan: ‘Abolition of wage labor!‘” – that is, not just attacking the symptoms of the problem by demanding higher wages, but fighting for a planned socialist economy which can eliminate all want, scarcity and poverty once and for all.