Social Justice and Capital in 21st Century Scotland

Posted by on May 13, 2014 in Commentary | No Comments

The Scots are different from the English. An independent Scotland will be a very different country from the UK.

In September of this year the people of Scotland will vote in a referendum on independence. Proponents believe that an independent Scotland could build a more egalitarian society and halt the escalating inequality that is currently gnawing at the fabric of the UK. Underpinning this belief is the contention that the Scots attitude towards social justice is more akin to that found in Scandinavia than in the rest of the UK. Opponents counter that there is no difference between the Scots and the English, that we are united by common British values. However a glance at the colour of the voting maps after a UK general election reveals a profound difference in voting preference between England and Scotland, with the blue colours of the Conservative party largely confined to England and particularly to the south.

Social justice is on the run

Social justice is the extent to which a society allows its members to fulfil their potential; a meritocratic society is a socially just society. Unfortunately the world is rapidly becoming less meritocratic. In his book ‘Capital in the 21st Century’  the French economist Thomas Picketty presents a historical analysis that confirms a trend of rising inequality and identifies its primary cause: a divergence between the growth rate of capital and the growth rates of the real economy and of wages. Such conditions prevailed for much of the history of capitalism. Return on capital outstripped earned income, reducing meritocracy to a myth. The rich became inexorably richer and it was impossible for anyone who relied on earned income to close or even maintain the gap. However, inequality, by this measure, actually decreased from the early 20th century until the rise of neoliberalism under Thatcher, Reagan and – it always pleases me to hear him mentioned in the same breath – Pinochet. From the point of view of those who favour an egalitarian society, things were moving in the right direction.

Sadly, inequality has been rising steadily since around 1980 and will soon be comparable to the levels experienced at the turn of the 20th century, a time of barefoot urchins and squalid, overcrowded slums. Unless arrested by war or other crisis, this trend of rising inequality might very well lead to social unrest. Picketty proposes policy solutions in the shape of taxing wealth rather than income. Naturally this type of talk incenses his neoliberal critics, who, unable to pick fault with the facts upon which his analysis is based, have resorted to accusing him of being a Marxist. This is an accusation he anticipates, and convincingly refutes, in the introduction to his book.

Class struggle shapes the world around us

Marx was wrong about a lot of things, but many of his insights into the nature of capitalism remain useful today. In particular, he framed the concept of class struggle between labour and capital. In Britain we are obsessed with class. The traditional classes of upper, middle and working are no longer enough to satisfy this mania; a recent study claimed that one could be assigned to one of seven new classifications on the basis of a handful of questions. Critics were quick to question the merit of a classification system in which a preference for hip hop music can alter one’s position. Much sociology is worthwhile, but I regard nonsense such as this seven-class study to be positively harmful, for it obscures the reality that there are only two meaningful classes: one belongs either to the capitalist class, whose income comes primarily from return on capital, or to the labouring class, whose income comes primarily from waged labour. One could argue that those of us who have money invested in pension schemes have one foot in both camps. But if that money comes from waged labour, this straddling of classes is an illusion. Pensions form part of the system of smoke and mirrors used by the establishment to hoodwink large sections of the populace into believing that their interests are aligned with those of the capitalist class, even as their livelihoods depend upon paid employment in today’s insecure labour markets.

That labour markets have become increasingly insecure is no accident: simple arithmetic dictates that in a capitalist economy the proceeds of industry must be divided between the capitalists, who provide the finance, and the workers, who provide the labour. It is thus in the interest of the capitalist class minimise the cost of labour in order to maximise the return on their capital. The best way to limit the cost of labour is to ensure that there is always an element of unemployment. Under conditions of full, or nearly full, employment, the law of supply and demand permits the labouring class to demand more of a share of the fruits of its labour. The greater the share that goes to labour the less is left for the capitalist. Thus there is a perpetual struggle between labour and capital. In the 1970s the balance of power shifted towards labour, resulting in strikes and loss of productivity. As a consequence neoliberalism emerged and has been the winner in class struggle ever since, with deliberate wage repression and deepening inequality.

Why has democracy failed to stem this tide of inequality?

Winston Churchill famously stated “Democracy is the worst form of government, except for all those other forms that have been tried from time to time.” One might expect social justice to flow naturally from democracy, after all everyone has a vote, so a democratically elected government should, in principle, represent the will of the people and prevent the majority from being oppressed by any minority, however powerful.

So on the face of it it is puzzling that our democracy consistently provides us with plutocratic governments that favour the interests of capital over those of people. This should not be the case, for the members of the labouring class greatly outnumber those of the capitalist class. The explanation is that our cherished democracy is not actually all that democratic. The adversarial first-past-the-post Westminster system means that most people’s votes have no impact and a majority of the popular vote is not required to form a government. In short, we have a system that is designed to give a minority power over the majority, which sounds like the opposite of the democratic ideal.

If our version of democracy has failed to adequately represent the interests of the people of the UK, its failure to represent those of the people of Scotland has been even more spectacular. For the majority of my life Scotland has been ruled by governments for which few have voted and which have imposed policies that are out of step with the majority view. First we had Thatcher, one of the architects of the inequality-producing economic system under which we live today. Now we have Cameron, presiding over an unelected government that is continuing and extending the work she started, systematically dismantling the apparatus of state. The actions of these governments have been so destructive it is easy to fall into the trap of attributing them to malice. However when viewed in the context of the capitalist side of class struggle their logic becomes apparent. The activity of the state does not provide an opportunity for return on capital. By shifting activity from the public into the private sector, opportunities for the growth of private capital are created.

Can things really be different in an independent Scotland?

While it is true that the our voting system acts to amplify differences in voting preference between Scotland and England, it is tempting to speculate that the increased level of support enjoyed by the Conservative party stems from a greater accumulation of private capital in the south. Another part of the explanation may be that right wing attitudes are not restricted to the capitalist elite. Those on the right are a broad group, ranging from traditional conservatives, who want to cling on to the values of the past, to plutocratic neoliberal reformers. What unites them is not economic policy, but an agreement that the state has no role to play in the provision of social justice. One may agree that social justice is desirable, but feel that it is best delivered through non state based institutions such as charities and churches. This may partly explain why so many politicians of all parties have allowed themselves to be photographed smilingly opening food banks. The belief that unrestrained capitalism can deliver social justice through philanthropy and the utterly discredited trickle down effect is a false one, but it may help explain why right wing governments enjoy a greater level of support in England than would be predicted if capital distribution were the sole determinant of voting preference.

The origins of Scotland’s longstanding socialist tradition also provides a tempting target for speculation. Perhaps it is an echo of the egalitarian culture of the highland clans. Perhaps it is simply down to there being less private capital in Scotland due to the outrageous concentration of land and assets in few hands.  The situation is compounded by the fact that these hands are often either not Scottish, or Scottish but hiding behind offshore registered trusts.

Whatever the true explanation, the difference is real. There is an increased receptiveness to notions of social justice in Scotland. And this difference is combined with a voting system that is already closer to proportional representation – and hence more democratic – than the alternative vote that failed to capture the imagination of the electorate south of the border. These two factors give me hope for the future. For I believe that we may witnessing the start of a shift in the zeitgeist. A sound argument against the excesses of unrestrained capitalism, such as that voiced by Picketty, may re-invigorate the democratic process, where it is allowed to do so. My belief is that an independent Scotland could be a beacon of democracy and social justice as the world moves towards a new, more meritocratic way of doing things. And nowhere is change more needed than in Scotland. We are in urgent need of land reform of a type that will never emanate from Westminster. If there was a tax cost associated with land ownership, the elite would be less keen to sit on vast swathes of our countryside, manufacturing a land shortage in our relatively empty country. This is to the detriment of all: particularly if they run their estates as loss making enterprises in order to hide from the tax man profits made elsewhere.

Properly functioning democracy should be capable of acting to provide social justice. My contention is that Scottish independence is the only viable route to properly functioning democracy. And if by writing this I can convince one other person to vote Yes in September it will have been time well spent.

If you enjoyed this you should have a read of this piece from last year that touches on similar issues.

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