Book Reviews: ‘Militant Liverpool’ & ‘Plutocrats – the Rise of the New Global Super-Rich’

Municipal reformism

Militant Liverpool: A City on the Edge by Diane Frost and Peter North, Liverpool University Press, 2013, 218 pages, £13.22

Frost and North look in detail at the Militant Labour Liverpool City Council of the 1980s but also set it in the context of the 1970-80s world capitalist crises. The authors rightly point out that Liverpool’s ‘urban problems derive from broader structural factors’ such as the shift in world trade, and were all part of the ‘long term decline of its industrial and commercial bases.’

For the Trotskyist Militant Tendency ‘capitalism had failed the population of Liverpool’ but what had failed was Keynesian capitalism in Britain which was unable to prevent mass unemployment and ‘stagflation’ (stagnation and inflation of over 25 percent). Labour Cabinet Minister Tony Crosland said in 1974 that ‘the party is over’ while Labour Prime Minister James Callaghan said in 1976: ‘we used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists.’

The stage was set for the return of economic liberalism and free market capitalism with the election of a Conservative government in 1979.

The authors see the 1983 Liverpool Labour/Militant council as a ‘socialist labour council with a radical socialist programme’ which is absurd as the Council were operating municipal capitalism. The Liverpool Trots believed large amounts of money would be needed from government to fix the city’s problems, they fixated on the Tories having ‘stolen Liverpool’s money’ and ‘the council resolved on confrontation to provide the resources it argued the city needed.’ A lot of the book deals with local government finance and there is even a need for a definition of ‘capitalisation’ as ‘moving spending from day to day spending – revenue – which needs to be raised from the rates to long term spending on infrastructure that did not count against day to day spending – capital.’ There is the grim irony of reading about the Trots in Liverpool securing £30 million from a consortium led by nationalised French bank Banc Paribas, negotiating a £30 million facility from London stockbrokers and getting a £60 million loan from Swiss banks described by the Guardian as ‘the gnomes of Zurich have rallied to the Trotskyists on Merseyside.’

The Militant Trots in Liverpool wanted to turn the Labour Party into an explicitly Leninist party. It used it as a recruitment vehicle, while their ‘democratic centralist tendencies left little room for dissent or reflection, even when mistakes were made’ and they described in exaggerated fashion how Liverpool 1984 was ‘Petrograd-on-Mersey’ or the Paris Commune. Eventually the trade unions realised they were being used by the Trots as a stage army, foot soldiers and cannon fodder, and were especially shocked by ‘the grotesque chaos of a Labour council hiring taxis to scuttle around the city handing out redundancy notices to its own workers’ (Kinnock).

Former Liverpool City Councillor Paul Lafferty’s inquest on Militant in Liverpool said ‘all the lighting on pavements point out onto the road and we thought why don’t we turn them around and point them on the people? And I think that says everything about us really.’ It does.

SPC

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The Top of the One Percent

Chrystia Freeland: Plutocrats: the Rise of the New Global Super-Rich. Penguin £9.99.

Chrystia Freeland has no objection to the current social system and those who benefit from it: ‘we need capitalists, because we need capitalism’, she writes. And she is now a Liberal MP in Canada. But her book does have some interesting things to say about the very wealthiest people in society and the increase in inequality. 

It is quite common nowadays to refer to the 1 percent who form the top of the class pyramid. But even within this 1 percent there is a distinction between a plutocratic super-elite (which is overwhelmingly male) and those who are ‘merely wealthy’. In 2005, for instance, Bill Gates and Warren Buffett had a combined wealth of $90bn, not far short of that of the 120 million people who formed the bottom 40 percent of the US population. In 2008, the top 2 percent of the 1 percent in Britain, which must be only about ten thousand people, received almost one-seventh of the income of the 1 percent. The super-elite set up ‘philanthropic’ foundations, such as the Gates Foundation, as status symbols.

Also, the higher echelons of the elite mostly operate at a truly global level, with English as their lingua franca. Its members may have been born in one country and educated in another (quite likely at a university such as Harvard or Oxford). They may own a multi-national company with its headquarters in a third country and have homes on two or three continents. So possibly the biggest capitalists are becoming less tied to particular countries and identify less with a national capitalist class. But many of them make sure to attend top British social events, such as Ascot and Wimbledon.

More controversially, Freeland claims that many plutocrats are the ‘working rich’. They are chief executive officers or top bankers or lawyers, rather than just people who own masses of shares. Though few come from truly impoverished backgrounds, their enormous wealth is not inherited, so they are supposedly ‘self-made men’. They mostly work in newish industries such as computing or other kinds of technology, or else in finance. Perhaps it is more accurate to say that these ‘alpha geeks’ often had some idea for a website or a piece of software, but they were just lucky in getting into a position where they could exploit others, and that is what really made them so fantastically wealthy.

So Freeland’s book does have some interesting things to say on ways in which capitalism is changing, and on how it is not.

PB