What recession means for us

What recession means for us

An analysis of the likely impact of the coming recession on workers' lives and a rallying call for collective action to mitigate that impact.

The recession is here. We're told to tighten our belts and brace ourselves for redundancies, wage and service cuts. Politicians and business leaders are united in saying we should pay for a crisis not of our making [see box for a brief history of the crisis]. A recession is simply when the economy shrinks for 6 months in a row. What this means for individual firms is a squeeze on profits, and we can be certain that unless we do anything about it, that’s going to mean a squeeze on us, as our employers try to protect those profits.

Even public sector workers will feel the squeeze as the government tries to recover the billions already spent on bailing out the banking system, and to make ‘efficiency savings’ in the face of falling tax revenues. But wait, isn’t Gordon Brown going to make the rich pay with higher taxes? You’d certainly think so from the press. The Times, on its front page no less, even pictured Brown waving the red flag of communism. Alas, reality is rather different.

The Financial Times reassured its affluent readership with a more honest take on matters. Of £104bn worth of clawbacks the government is expected to make, just £2bn is expected to come from taxing the rich. That’s less than 2 percent of the total, and even that doesn’t take into account that the rich will try and pass on their burden by increasing their incomes at the expense of our wages. It’s also quietly forgotten that the top rate of income tax is still nearly 20 percent lower than under Margaret Thatcher’s pro-rich government.

A further £18bn is planned to come from regressive taxes. These are taxes that affect you more the less you earn. No trouble for the rich here. The rest is scheduled to come from public service cuts and wildly optimistic forecasts for a rapid economic recovery – when the recession has only just officially started! [Jan 09] So behind the headlines the plan is clear; they want to make us pay for their crisis. So how is the recession going to affect us?

Redundancies
One way in which the cost of the crisis is passed onto us is through redundancies. Unemployment is predicted to increase to as much as 3m in the next couple of years. This means over a million people will lose their jobs. Already the news is full of layoffs, and it’s set to get worse. Obviously redundancy hits those laid off in the pocket. This is especially the case if they’re agency staff or haven’t been in the job long, which means they don’t get much, if any, redundancy pay. But redundancies also hit those ‘lucky’ enough to keep their jobs as they have to work harder to make up.

Unemployment
Not content with mass layoffs, just when the economy is proving incapable of keeping people in work, the government is planning to cut benefits bills by punishing unemployed people for not finding jobs! A recent report recommended that unemployed workers should be made to either look for work or do community service “from 9 to 5” in order to earn their £60 dole money. That works out at £1.50 an hour! A whole host of other attacks are planned, such as forcing single parents with children over the age of one and many people currently signed off sick to look for work or have their benefits stopped. Of course, the whole point of a recession is there’s not many jobs to look for.

Wage cuts
Those of us who keep our jobs can’t expect to escape the punishment. Wages will be attacked directly; workers at JCB factories recently voted to take a £50 a week pay cut to avoid redundancies. The company then made some more redundancies anyway. This kind of ‘between rock and a hard place’ offer is likely to become more common with workers nervous about losing their jobs; althought the JCB example makes it clear that bosses can't be trusted. But wages can be cut in less visible ways too. If workers can be made to work harder and faster, or longer days or through their breaks, we end up doing more work for the same pay. This will often be making up for the work of colleagues made redundant, saving the boss cash. Whenever your boss asks you to “give 110 percent for the team,” this is what they have in mind. Of course we pay the price in stress and burnout, but at least we’ve got a job, right?

Public service cuts
A further £35bn of the government clawbacks are scheduled to come from public sector spending cuts. This will mean cuts to public services and further attacks on public sector workers pay and conditions. Front-line services are expected to be hit, so alongside the attacks on unemployment benefit, the health service is expected to be hit particularly hard alongside cutbacks to schools, social housing, energy efficiency programmes, GP surgeries and flood defences. Of course if you can afford private healthcare and to move out of flood-risk areas, this probably won’t bother you. For the rest of us it’s bad news.

Repossessions and evictions
Another way the recession will hit us is through a rise in home repossessions and evictions as people fall behind on mortgage repayments and rent. Repossessions are already at record levels, and set to rise further. The government is encouraging banks, including those it now owns, to go easy on repossessions, effectively tolerating squatting. No doubt they’re conscious that chucking families out on the street is not likely to be popular. But they’re in a bind. If they don’t repossess people, why should anyone pay their mortgages at all? If the government steps in to nationalise the homes of mortgage defaulters as has been suggested, this just raises the amount they have to claw back through the other means discussed above. The absurdity is we could see people being chucked out on the street while houses stand empty and can’t be sold.

So is it all doom and gloom?
It doesn’t have to be! If we’re honest, we’re not in a very strong position and we’re likely to take the brunt of this crisis unless we set about changing that. There are various things we can do, ranging from simple things you’re probably doing already to daring acts of collective action to win the things we need. So…

Talk to your workmates - on your breaks or in the pub after work. We’re all in the same boat, just realising this is a step towards doing something about it. When you realise your problems aren’t personal but social, all sorts of possibilities for mutual aid open up. Beware bosses claiming they’re in the same boat too; who do you think they’d throw overboard first?

Network with other workers - in your area or sector. Do you have friends or friends-of-friends working locally in the same sector as you? Consider going for a coffee or a pint to swap experiences and find out if there’s anything you can learn from each other, or ways to help each other out (like handing out leaflets at each others workplaces so the boss can’t victimise you).

Consider collective action. Collective action covers a whole range of things, but the principle is that while on our own we are weak, when we act together we can achieve more than the sum of our parts. Examples include going in a group to the manager's office to support colleagues being made redundant or pressured into working longer or harder. There’s safety in numbers. Or deciding with your workmates to ‘work-to-contract’ - taking your breaks and leaving on time in response to pressure to do more work. It’s easier to say no to the boss when you know your workmates are doing the same.

More dramatically, things like occupations can win major concessions. When workers were laid off at a factory in Northern Ireland recently they occupied the plant for 48 hours demanding improved redundancy terms. They won. By acting together they turned the tables on the bosses, who expected them to go home alone and ‘think things over.’ Instead they showed the inevitable wasn’t so inevitable. It isn’t always easy to take collective action, but it starts from realising what we have in common with other workers, and what we don’t have in common with the politicians and bosses trying to shift the costs of the crisis onto us. We can’t fight back on our own, but together we have a chance.

Written for the Tea Break bulletin in December 2008.

Comments

Ne00
Jan 3 2009 16:21

Embezzlement of public funds!
I believe the only reason why the economy is in a mess (recession), is because the Government are excessively embezzling public funds, tax payers money.
With the amount of money that the tax payer surrenders to the Government each year, how can their still be homelessness.

Joseph Kay
Jan 3 2009 16:38

i think the causes of the current recession are much more structural than that, and the sheer scale of the amounts being wiped off the stock market goes beyond anything that could be attributed to (hypothetical) government corruption. the above article is accompanied by this one, which gives some background to the causes of this crisis.

Ne00
Jan 5 2009 17:38

My point is this as we the working class are over taxed we can not afford to contribute to economic growth, for example Government deliberately pay far too much for medicines via the National Health, which is profitable for Government as they can raise Taxes and so have a greater working capital, creating fat cats which is tantamount to embezzlement of public funds, they do this in all fields for example the Government pays billions of pounds in grants to housing associations such as Chiltern Charitable Housing Association who have a commercial arm that in itself is embezzlement of public funds, but most depressingly they (CHCHA ), charge and receive extortionate rents from local Governmant and actually create homelessness as the more homeless there are the greater their Government funding.

Joseph Kay
Jan 5 2009 23:18
Ne00 wrote:
My point is this as we the working class are over taxed we can not afford to contribute to economic growth

i don't think our poverty stems from taxes. the article i linked above deals precisely with the contradiction in a low wage 'flexible' economy (good for profits, bad for growth).

Ne00 wrote:
for example Government deliberately pay far too much for medicines via the National Health, which is profitable for Government as they can raise Taxes

i don't think this makes any sense. the government deliberately paying inflated prices for things wouldn't be profitable for the government.

Ne00 wrote:
for example the Government pays billions of pounds in grants to housing associations such as Chiltern Charitable Housing Association who have a commercial arm that in itself is embezzlement of public funds

the state does spend a lot of money on a lot of things - PFI is another massive subsidy to the private sector, and one which keeps debts off-balance sheet for the state. but such spending is a subsidy from capitalism in general to specific private capitalists; these private firms make a profit and pay their workers like all others, distributing purchasing power. so state tax and spend is not responsible for recession (in fact state intervention has undoubtedly smootheed the business cycle relative to a more volatile free-market approach).

john
Jan 6 2009 00:07

this teabreak is excellent - but is there a pdf version that we can print out so that it can be distributed non-electronically?

Joseph Kay
Jan 6 2009 00:15

glad you like it. we're discussing what to do with it at the moment - there's no pdf at present, but feel free to adapt it if there's somewhere you want to distribute it offline.

Tea Break's strength has been its dispute-focus rather than being another general lefty analysis. the latest stuff we've written is more about how the crisis in general will effect workers in general, so we're discussing the best format for a print version for things like distribution at railway stations or possibly employers making redundancies etc. we can be a bit slow sometimes, but the wheels are in motion!

Ne00
Jan 6 2009 21:38

It does make sense when you realise the government are paying highly inflated prices to themselves creating FAT CATS with the double whammy of being able to raise taxes so therefore more scope for greater embezzlement, for example you will see that all heads of housing associations and NHS departments etc. have deep roots in Government ex councillors and M.P's that sort of thing, please do not be so quick to try and discredit an others view try opening your mind I have taken the time to write I must have a point evn if you can not see it.

Joseph Kay
Jan 6 2009 23:48
ne00 wrote:
It does make sense when you realise the government are paying highly inflated prices to themselves creating FAT CATS with the double whammy of being able to raise taxes so therefore more scope for greater embezzlement

now there are government cronies getting rich off PFI schemes and the like, for sure. what this has to do with causing recession rather than being an expression of nepotism kinda inevitable in a capitalist economy i'm not really sure.

ne00 wrote:
for example you will see that all heads of housing associations and NHS departments etc. have deep roots in Government ex councillors and M.P's that sort of thing

yeah there's all sorts of cronyism and the like, but like i say i don't see what this has to do with causing recession. the business cycle is not caused by the moral failings of business people.

ne00 wrote:
please do not be so quick to try and discredit an others view try opening your mind I have taken the time to write I must have a point evn if you can not see it.

i'm not trying to 'discredit' you, i'm just politely engaging with you without agreeing with your argument that nepotism causes recession.

Steven.
Jan 7 2009 00:09

Joseph is right, yes there is this nepotism of some sort in every country across the world. However, this doesn't cause recessions.

Apart from anything else, this sort of nepotism is pretty much constant whereas recessions are only temporary and cyclical, so that should demonstrate that one does not cause the other.

Ne00
Jan 10 2009 17:42

I believe it causes a recession when those with more than they can spend keep receiving more than they can spend quicker than they could ever possibly hope to spend it and are hoarding and keeping it to themselves, in the "family" so to speak and then "they" further exasperate matters by creating high taxations to sate their greed.
The rich are getting richer and the poor are getting poorer, that I believe is recession it certainly isn't progressive would you agree.
For I concur nepotism is usual and usually constant which is why we have wars and Governments are constantly being overthrown.

Joseph Kay
Jan 10 2009 18:08
Ne00 wrote:
The rich are getting richer and the poor are getting poorer

this is true, but i think it's more to do with what capitalism actually is - in essence money making money. if you have enough to invest, you do so, workers are paid to produce stuff, but their wages are less than it's worth so you make a profit, and your money returns to you with a bit extra on top. then you re-invest, and get richer...

Ne00 wrote:
I believe it causes a recession when those with more than they can spend keep receiving more than they can spend quicker than they could ever possibly hope to spend it and are hoarding and keeping it to themselves

the rich who have more money than they can spend put it in banks or other savings/investment institutions, who invest it somewhere that money will make more money (property speculation, or industrial production, or the stock market, wherever), so unless they literally hoard cash under the mattress (and less than 3% of the money supply is physical notes and coins rather than electronic deposits in bank accounts), the rich having more than they can spend doesn't cause economic slowdown, it just means more is spent on capital investment than consumer goods, which creates more goods requiring consumption in the future, but doesn't directly cause recession.

Ne00
Jan 11 2009 17:36

Exactly the rich are hoarding property goods and anything they can get their hands on but not investing in people (wages) so that these goods properties can be shared.

radicalgraffiti
Jan 11 2009 18:09

Ne00 you seem to be missing the point, the problem isn't that the rich are doing it wrong, the problem is that a minority own everything and the majority of us own nothing. we aren't trying to get them to run the world better, we want to do it for our self.

jef costello
Jan 11 2009 18:22

I've been told bursaries for trainee teachers are going to drop by about 40% next year. I'm not sure if this is true, I can't find any documentation for it online. They might do it via the back door and just remove priority status from the subjects which currrently have higher bursaries.

Joseph Kay
Jan 11 2009 19:21
Ne00 wrote:
Exactly the rich are hoarding property goods and anything they can get their hands on but not investing in people (wages) so that these goods properties can be shared.

but where do these "property goods and anything they can get their hands on" come from? they are produced by firms, who pay a portion of that income as wages, a portion to other firms for raw materials etc, and keep a portion of profit. i.e. 'hoarding property goods' distributes purchasing power like any other spending does, and so isn't a cause of recession.

si
Jan 11 2009 20:19
Quote:
I've been told bursaries for trainee teachers are going to drop by about 40% next year. I'm not sure if this is true, I can't find any documentation for it online. They might do it via the back door and just remove priority status from the subjects which currrently have higher bursaries.

ffs

Ne00
Jan 12 2009 13:40

Hi Radicalgraffiti I thank you for your input but I do not agree that I am missing the point and I totally agree that we must help ourselves and collectively is the way forward, the problem that we the poor working class have is that the rich have become too rich and powerful changing the rules (Laws) as it pleases them we are no longer batting on an level pitch, we are being over taxed and getting poor value for money, the situation that we are in now is similar to why the magna carta were drawn up.
Hi Joseph K the shelves are full but no one is buying.
Companies have invested to heavily in products and pensions instead of people we need money to spend now !

Joseph Kay
Jan 12 2009 13:59
Ne00 wrote:
i totally agree that we must help ourselves and collectively is the way forward, the problem that we the poor working class have is that the rich have become too rich and powerful changing the rules (Laws) as it pleases them we are no longer batting on an level pitch, we are being over taxed and getting poor value for money, the situation that we are in now is similar to why the magna carta were drawn up.

the situation's completely different to in the time of the magna carta, as the economy and social relations have changed massively in 800 years (nobody's a self-sufficient peasant farmer taxed by lords any more, we're all wage slaves). this 'level pitch' is a myth, how can wage slaves and capitalists - or for that matter lords and serfs - 'battle on a level pitch'? they're defined by inequality.

Ne00 wrote:
Joseph K the shelves are full but no one is buying.

indeed, this is a symptom of recession (although of course people are buying, only a few percent less than a year ago which is enough to constitute a crisis given the irrationality of capitalism).

Ne00 wrote:
Companies have invested to heavily in products and pensions instead of people we need money to spend now !

again, these aren't causes of a recession, in either factual or logical terms. we do need more money (well, ideally a society without it), but that means collective action to gain a larger share of the social wealth which we create. but that would hit profits, not helping the economy either, i.e. the crisis isn't caused by 'companies investing in products and pensions,' unless i'm mistaken and you can explain a plausible mechanism for how this could be the case?

you seem pre-occupied with taxation as causing this crisis, as if lower taxes (and consequently lower state spending) would have averted it. taxes are only the most visible way in which the wealth we create is separated from us. we go to work, produce products worth a certain amount and get paid some fraction of this in wages. this 'surplus value' is the basis of the bosses profits. then the state takes its cut, but we see this on our payslips as tax/NI, but this doesn't mean the tax is any more a cause of our poverty than the exploitation inherent to wage labour, it's only more visible. in any case, if we were paid more, this would hit the economy too, since profits would be lower. i.e. while low wages boost profits, high wages boost economic growth, but neither can adequately account for a crisis where both profits and growth are threatened.

Ne00
Jan 13 2009 19:21

Today there is more money in the world than ever before so please explain to me why their is a recession
Yes there is too much state spending because the state poorly spends deliberately being wasteful (but obviously lining their own pockets along the way) Paying too much for housing and too much for medicines (investing in their own companies and so forcing taxation council tax up) then there are things like fines etc which they receive for motoring offences for example, and again deliberately poorly invest etc etc. put simply the Government are embezzling Public funds!

Joseph Kay
Jan 13 2009 19:34
Ne00 wrote:
Today there is more money in the world than ever before so please explain to me why their is a recession

i linked to an article trying to give some background in my first reply, it's also linked in the article we're commenting on. here it is again.

Ne00 wrote:
Yes there is too much state spending because the state poorly spends deliberately being wasteful (but obviously lining their own pockets along the way) Paying too much for housing and too much for medicines (investing in their own companies and so forcing taxation council tax up) then there are things like fines etc which they receive for motoring offences for example, and again deliberately poorly invest etc etc. put simply the Government are embezzling Public funds!

you see, this isn't an argument it's just a restatement of your original assertion. yes, some state spending is wasteful, so is some private sector spending. but even wasteful public spending doesn't cause recession, in fact it was one of the main ways the Great Depression was ended. ever hear of Keynes and WWII, waste par execllence?

also, can you name these companies? because while some MPs do have shares in various companies, you're just making vague assertions. again, the claim revenues from motoring fines are "deliberately poorly invested" is unsubstantiated...

S. Welker
Jan 16 2009 00:32

The above is comment is quite right, in that taxes and government spending are not inherent to creating a recession - they only create budget deficits. Recessions are born out of the natural boom and bust business cycles. It's Newton's Third Law in action (although applied to economics instead of physics) in that what goes up must naturally come down.
That being said, regressive taxes are one of the scourges of the western world. Granted, those people that earn more money than the most of us probably (benefit of the doubt) earned it, but someone who makes 500 million a year should probably pay more in taxes than someone who only makes 10,000.

Joseph Kay
Jan 16 2009 11:21
S.Welker wrote:
It's Newton's Third Law in action (although applied to economics instead of physics) in that what goes up must naturally come down.

although i agree boom-bust is an unavoidable fact of capitalism, i don't think it's a natural law since it doesn't apply to all modes of production - its rooted in the need of the economy to constantly expand, and to do so profitably, but there are unavoidble contradictions; that lower wages boost profits whilst hitting consumer spending, disproportions between growth in different sectors overproducing for their markets etc. so a social law rather than a natural one, reflecting a given set of social institutions (market exchange, wage labour, private property...)

S.Welker wrote:
Granted, those people that earn more money than the most of us probably (benefit of the doubt) earned it

nah bollocks to benefit of the doubt! wink how does one person create say, £500m worth of wealth in a year? they don't, they hire workers who do, collectively, and reap the reward of owning their time and the things they make during it.

Ne00
Jan 18 2009 16:51

Hi Joseph K in reply to your response to me 13 January, I believe a good argument will come back to the point my point. I think put simply inflation happens when everyone has a lot of money and relatively few goods for sale too much spending, whilst recession put simply is when there is too little money and too many goods not enough spending as we know that there is a lot of money, their must be too little spending (hoarding), by the haves the only question is how did the few haves get so much put simply the same way they have always done from biblical times, render unto Caesar and all that, by embezzling public funds (taxes) certainly not from honest toil.

Well respected journalist, Investigative reporter and magazine editor Yasmin Allen when writing on matters concerning the Hostel Leabridge House E10 7EB, a housing association Chiltern Hundreds Charitable Housing Association, Waltham Forest Direct a local Housing Allowance Office and their roles in conspiracy and embezzlement of public funds, Yasmin Allen who is frustrated by her inabilities to prevent evictions and also by the tenants so far thwarted attempts to resolve her perceived injustices and bring matters fully to the Crowns attention.
Yasmin Allen responded with an impassioned plea and wrote….

“It is a shame to know that things could have been changed for the better, but now the hostel is just another statistic along with many other hostels which are milking the system”

Yasmin Allen who wrote an article about the embezzlement of public funds can be contacted leytonlife@googlemail.com

Joseph Kay
Jan 23 2009 08:01
Ne00 wrote:
I think put simply inflation happens when everyone has a lot of money and relatively few goods for sale too much spending

that's quite a crude 'quantitiy theory' of money - factors like velocity of circulation (how quickly money changes hands) and mutual settlement (if i owe you £100, but you owe me £90, we only need £10 cash to trade £190 of commodities) also play an important role.

Ne00 wrote:
whilst recession put simply is when there is too little money and too many goods not enough spending

well recession is simply put two consecutive quarters of negative growth. the causes are complex and arguable, but a simple lack of money is an unsatisfactory explanation in both logical and empirical terms.

Ne00 wrote:
as we know that there is a lot of money, their must be too little spending (hoarding), by the haves

hoarding would have to be literally notes and coins under the mattress, not saving in banks (where it would not be outside circulation, unless banks are unwilling to lend. they are actually, but not because of hoarding but over worries of their capitalisation levels after the bursting of the property bubble left them holding blended mortgage-backed securites* of indeterminate value). in any case, less than 3% of the UK money supply exists as notes and coins (as opposed to bank deposits), so even if every note and coin was hoarded under a rich guy's bed, it's hard to see why all other things held equal the other 97% wouldn't just circulate faster to compensate, and this wouldn't be a cause of recession. in any case, hoarding is an empirical question, do you have any evidence?

Ne00 wrote:
the only question is how did the few haves get so much put simply the same way they have always done from biblical times, render unto Caesar and all that, by embezzling public funds (taxes) certainly not from honest toil.

well quite a lot has changed since biblical times actually. massively in fact. wealth is now primarily aquired through the exploitation of labour (hiring workers for X wages to produce goods worth X + S, S being the 'surplus value' accumulated by the capitalist). taxes are just the government's cut of this surplus, they're more visible because they appear on our payslips while surplus value is hidden by the fact we appear to receive 'a fair days wage for a fair days work.'

in any case you're ignoring the earlier point made by Steven. (with which you "concurred") and are just repeating your initial assertion that embezzlement causes recession:

Steven. wrote:
nepotism is pretty much constant whereas recessions are only temporary and cyclical, so that should demonstrate that one does not cause the other.

it's very hard to have a constructive discussion if you simply keep repeating the same assertion over and over even when it's shown to be false.

* please ask if you want me to explain any of this jargon, a lot of it's fairly new to me too

Ne00
Jan 27 2009 19:43

Are you trying to give me a basic maths lesson you insult me, you really need to expand your mind get out more have you read todays newspaper something about lords changing laws for money Bribery ...may I remind you and I quote

Ne00 wrote:

i totally agree that we must help ourselves and collectively is the way forward, the problem that we the poor working class have is that the rich have become too rich and powerful changing the rules (Laws) as it pleases them we are no longer batting on an level pitch, we are being over taxed and getting poor value for money, the situation that we are in now is similar to why the magna carta were drawn up.

Joseph Kay
Jan 27 2009 20:41
Ne00 wrote:
Are you trying to give me a basic maths lesson you insult me, you really need to expand your mind

i've been going out of my way to not insult you and to explain myself clearly, unfortunately i'm left with the sensation of arguing with an algorithm stuck on loop.

if it's patronising "basic maths" that capitalist wealth comes from exploiting labour, why do you continue to insist it comes from taxes and embezzlement of the revenues therefrom ("the same way they have always done from biblical times" no less)? we are not poor because we are taxed, but because we posses no capital, capital that entitles its owners to the surplus created by labour, leaving labour with only enough to reproduce itself ready to return to work while the capitalists accumulate ever-more.

if you cut say income taxes, all other things held equal this would simply boost profits, since take home wages equilibriate back to their level (probably by rising more slowly than they otherwise would, cancelling the short-term benefit to workers), whereas capitalists would still continue to charge as much as the market can bear for their goods and pocket the diffference as extra profit (which is the surplus value previously appropriated by the state via tax). this is why it's always right-wing, business-backed groups like the 'Taxpayers Alliance' demanding lower taxes, whereas there has only ever been working class opposition to specific regressive taxes (like the Poll Tax) designed to shift the tax burden onto workers.

Ne00
Jan 30 2009 19:12

You need anger management classes, the poor are over taxed and the embezzling distorts figures to seemingly justify the heavy taxation so they may continue!

A builder can build a thousand houses yet can't afford to own one because of taxes, not just those on his wages but those on the property etc, etc, yet he probably owns a third of a "star wars missle" and helped pay for a war that most did not want, at a hugely ridiculous cost, I mean who makes up these prices, that we have no choice in paying!

Yes these matters (Over taxation) have been from biblical times Jesus mentions it allegedly the Magna Carta were brought about because of it and Robin Hood became a legend righting it.

radicalgraffiti
Jan 30 2009 19:54

Taxes are clearly not the biggest reason why people who cant afford houses can't afford them. The biggest reason is that the price of the houses is much greater then the cost to build them, not because of taxes but because the companies/people who sell them are trying to make as much profit as they can.

Joseph Kay
Jan 31 2009 10:30
Ne00 wrote:
A builder can build a thousand houses yet can't afford to own one because of taxes, not just those on his wages but those on the property etc, etc, yet he probably owns a third of a "star wars missle" and helped pay for a war that most did not want, at a hugely ridiculous cost, I mean who makes up these prices, that we have no choice in paying!

ok, i'll try another angle. i agree that workers create all that value (of houses, missiles or whatever), and can only buy a fraction of it back. i also agree that taxes form a part of that 'surplus value' over and above what they can buy back. agreed so far?

where we differ, is that i don't think taxes are the main, let alone the only way in which workers are robbed of the value they create. you talk about it this robbery being done "the same way they have always done from biblical times" - but things have changed markedly since then.

a medieval peasant was primarily robbed by taxes; the landlord's men would turn up and simply take a tenth (or however much) of their produce, and there would be naked theft.

however today, workers are robbed in a more subtle way too. we sell our ability to work for a 'fair price', but the things we produce at work (be they houses or pens or services or whatever) are worth more than our wages to make them (and all the raw materials etc). but this robbery isn't so visible because unlike the medieval peasant we never own the things we make at work and consequently never have them nakedly stolen from us.

of course taxes remain the most visible form of this 'surplus value' that is stolen from us, but i think it is a mistake to see taxes as exclusively responsible for our relative poverty, because the whole way society is set up is to accumulate wealth produced by workers for a class of parasites, and that would happen even if taxes were cut massively (which like i say, is always a call that comes from the private sector parasites, since it means more of the surplus accrues to them instead of the state, but not to us).

Ne00
Jan 31 2009 11:25

Joseph K I thank you for your reply, yes I totally agree the system is far more sophisticated and subtle now, no longer does the sheriff of Nottingham come armed and rob us naked at the point of a blade but it is the same principle of heavy taxation whether it is council tax, V.A.T. or land registry fees insurance, pensions, NI contributions licencing permits or whatever they charge for, then they give us poor returns and I do understand fully your arguement about taxing and you are right.
We need Government or we would still be living in caves and Government need wealth to survive either by charity or unfortunately by enforced taxation, because even the poor can be greedy, the problem as I see it is that our taxes are not properly used because the private sector parasites are running the state too, including the media and we the poor are divided blaming each other single mothers the unemployed immigrants whatever our personal bug bear may be they pander to it dividing us even further when in fact the state is pulling the wool over our eyes and robbing us blind, pretending they are helping minorities when the only minority they are helping are the filthy rich!