Cooking the Books: Capital Needs Labour

The Tories, Labour and UKIP all say that immigration is a ‘problem’. As this is repeated by the media most people seem to think so too. But it is not immigration that is the problem. It’s xenophobia that sees it as one. Even from a capitalist perspective – let alone the socialist one which sees all workers as part of a worldwide class with a common interest – immigration is a good thing. This is well explained in the chapter on the subject in It’s the Economy, Stupid: Economics for Voters by Vicky Pryce, Andy Ross and Peter Unwin.

If workers are migrating to a country that means there are job opportunities there. In other words, that the capitalist economy is expanding there. As the authors point out:

‘ … if an area of the economy is expanding it will tend to have increased job vacancies and higher wages. Most fluctuations in migration levels are economic, and so such an area will tend to attract more immigrants and more incumbent labour’.

If they were logical – or rather, if they weren’t vote-catching politicians – Cameron and Osborne ought to be celebrating the figures showing increased immigration as a sign that the British economy is recovering from the slump. But they don’t, at least not in public.

Most migrants find jobs in the private sector, where employers only take on workers if there’s something in it for them – profit. The authors express this in this way (they are orthodox economists):

‘… immigrants are only employed in the private sector if they produce more than they are paid, so this ‘surplus’ productivity flows back into the rest of the economy’.

In other words, immigrant workers like local workers produce more than their keep, even if this surplus is pocketed in the first instance by their employers who hand over a part to the state as taxes before being able to re-invest any in expanding production with a view to profit.

One person who has openly recognised the link between immigration and an expanding economy is Tony Blair, but he’s no longer a serving politician who needs to think of votes. In the run-up to May’s election he undermined Miliband’s bid to garner anti-immigrant votes by saying, in the words of a headline in the Times (16 March), ‘I was right to let in eastern Europeans’:

‘The former prime minister rejected those, like Ed Miliband, who claim that the party was wrong to open the doors to workers from new EU members in 2004 rather than adopting temporary controls. He argued that, at the time of the decision, the UK economy was “booming” and needed “skilled workers from abroad”’.

Under capitalism labour, or more accurately labour-power (ability to work), is a commodity. Since new wealth, including more profits, can only be created by the application of this commodity a ready supply is essential to capitalism and its imperative to accumulate more and more capital. Before Britain joined the EU in 1974, while Germany, France and the Benelux countries got their extra labour from Italy and France’s colonies in North Africa, Britain got its from Ireland, the West Indies, India, Pakistan and other parts of its old Empire. After 1974 Britain’s source of extra labour shifted to Europe and, from 2004 when they joined the EU, to the countries of eastern Europe.

Even if British capitalism withdraws from the EU it will still need an outside source of extra labour. In any event, we will risk a prediction: Cameron won’t be able to cut back the movement of the commodity labour-power to Britain to the levels he has pledged, at least not unless he is prepared to hold back the accumulation of capital in Britain.