Wednesday, June 22, 2022

Our future is your future


The Socialist Party has long argued that an appreciation of history is a key to understanding the present and making the future. Marx pointed out that when studying history you should not analyse social and political movements by what they said they were doing but by the material results of what they did. The materialist conception of history is the essential tool for explaining social development, on the basis of society’s economic foundations.

Under capitalism you do not have free access to bread, or to motor cars, or to anything else simply by taking them without price and without having to get somebody’s permission. Free access would be the condition under socialism; it is not the condition under capitalism. We are always being told of the wonderful technical developments of the age we live in. The politicians who oppose socialism give the theme a propaganda twist by arguing that it is capitalism that gives us these things and we would be foolish to give up the social system that does so much for us. The worker of a century ago, they say, did not have the benefit of all the marvels that the worker today is free to enjoy. But this is the heart of the matter: is the worker free to enjoy them?


Under capitalism, you can only have what you can afford to pay for. The other is that the savage class struggles and international conflicts that capitalism incites prevent most of these freedoms from being used for the good of mankind. With socialism, the use of all these technical developments would be freely available to all. This is how capitalism works in all fields. Under capitalism the working class have invented, discovered, and produced, all the technical marvels, but capitalism fetters and distorts them all for the profit-making and military needs of the capitalist groups of the world.

We don’t deny that workers pay, in the sense of themselves handing over the money, some taxes. Our argument is that the burden of taxation does not fall in the end on the working class but on the propertied class and profits.

This is based on the assumption that in the medium-term workers sell their ability to work at its cost of production (or what Marx called its value), i.e. at the cost of what they must buy to keep their skills up to scratch and also to raise a family to take their place on the labour market when they retire. It follows from this that any permanent increase in the workers’ cost of living, whether from taxes or from higher prices will be passed on to employers as higher money wages and salaries (On the other hand, any permanent decrease in their cost of living, as from rent control or from subsidies to food or transport, will end up being a subsidy to employers in the form of lower than otherwise money wages.)

Having said this, most taxes in Britain are not even paid by workers but are collected and paid by businesses. Obviously, this is the case with corporation tax. It is also the case with income tax on wages and salaries, which is deducted by employers from nominal wages under the PAYE system and never even get into the hands of bank accounts of employees (income tax, in fact, is mainly a means of ensuring that workers without families don’t get that part of wages meant for raising a family)

Perhaps less obviously, this also applies to VAT. It too falls on and is collected by businesses. As its name implies it is a tax on “value added” which, in capitalist economics, translates into a business’s wages bill plus its profits. As we have just seen, wages in the medium term represent the cost of production of labour power, so though the amount of VAT payable is calculated on the amount of “value added” in fact just like corporation tax it only comes out of profits. Firms can’t automatically increase their prices by the amount of the tax; they reduce their profits by it.

Excise duties on beer, spirits and tobacco are also paid out of their profits by the firms involved. Only in this case prices are raised. The government in effect creates an artificial monopoly position allowing monopoly prices to be charged – and then taxes away the monopoly profits for its own benefit. lnsofar as these goods, selling at their monopoly prices, enter into the general cost of living of the working class they are reflected in higher wage levels.


The taxes workers actually pay out of their own pockets are such things as car licences, TV licences and, if they are owner-occupiers, council tax – but, once again, in so far as these enter into the general cost of living they are reflected in wage levels.


We want socialism because it will improve our lives. We are not idealist do-gooders but have made the hard-nosed assessment that only through co-operation with other fellow humans can a better world be built.

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