Fight for Security in Retirement!
Private enterprise is incompatible with the functioning of the basic sectors
of the modern socialized economy
The crisis of pensions within the imperialist system of states stems from a fundamental contradiction: private ownership and control of the socialized forces of industrial mass production. The fractured and ever-changing character of private ownership of the socialized economy and its aim of maximum money profit for a privileged few lead to unsolvable serious consequences for all aspects of the economy including the pension regime. The social responsibilities of guaranteeing a retirement at society’s standard of living clash headlong with the fractured and unstable private ownership and control of the basic sectors. Social responsibility for pensions falls on the private enterprises in control at the present moment, but they are in no position to fulfill those duties nor are they motivated to do so.
Private enterprises cannot keep up with the speed of development in the productive forces. The scientific developments may seem enticing for private enterprise but they have serious consequences for the rate of profit. Maximum money profit is, after all, the aim of private enterprise but developments in the productive forces resulting in increased productivity put downward pressure on the rate of profit. Fewer workers produce the same amount of social product but the overall investment rises considerably.
Rate of profit is calculated as a ratio between the new value workers produce and either the total amount invested or the total amount of transferred-value from material and machinery consumed in the production process. Calculated either way, the rate of profit continually comes under pressure from developments in the productive forces as evidenced in both the goods and services industries.
The British, U.S. and Canadian steel sectors have undergone tremendous changes in the productive forces. What was produced two decades ago can now be produced with a fraction of the workforce. Because the sector is controlled privately and entrapped within the imperialist system of states, the downward pressure on the rate of profit has resulted in one crisis after another. Bankruptcies, destruction of productive forces, restructuring of ownership and the claims of steelworkers, state-organized pay-the-rich schemes, and now tariff and trade wars are chaotic and destabilizing to say the least. The list is long indeed of ownership changes, movement of production from one country to another, harsh demands for anti-worker concessions from active and retired steelworkers, state-organized pay-the-rich schemes, monopoly manipulation of market prices and destruction of perfectly good productive forces.
The crisis is such that in Britain the destruction of the steel productive forces has been so massive the country as a whole only produces a fraction of what it once did. But the production tonnage reveals only one aspect of the problem; the other emerges from the fact that the reduced total annual amount of 7.5 million metric tonnes today compared with 15.2 million tons in 2000 can be produced with far fewer active steelworkers than were necessary to produce a similar amount 18 years ago.
The phenomenon of fewer workers to produce the same quantity also reduces the total new value workers produce. Machines and material do not produce new value themselves; they facilitate workers producing new value but machines can only transfer the congealed value that previous workers have produced while making those machines and material in the first place. The new value in those machines and material has already been claimed and expropriated and cannot give rise to any additional new value in themselves.
The imperialist system of private ownership and control of the socialized economy does not cherish the additional social product; it craves the money profit from exchanging the social product on the market. But the price of production for the social product falls in inverse relation to the growth in productivity therefore the ratio of new value to the transferred-value from machinery and material falls in tandem driving down the rate of profit.
The crisis resulting from private ownership of the socialized productive forces of industrial mass production is such that Tata Steel, with 8,000 active steelworkers in Britain, holds most of the social responsibility for 124,000 retirees within the British Steel Pension Scheme (BSPS) with additional steelworkers retiring every week.[1] The same is true at Stelco Steel in Hamilton, Ontario where a little more than 500 active steelworkers are left at Hamilton Works yet the number of retirees in the Local’s pension plan is around 10,000.
New owners of Stelco, who are only the latest in a growing list, blew up the pension plan within the bankruptcy process of the Companies’ Creditors Arrangement Act (CCAA), which had already excluded new hires from joining. In Britain, Tata Steel, the latest in a long list of private owners, has managed to blow up the BSPS outside bankruptcy protection using a combination of state-organized pressure and threats of liquidation.
Pension security requires stability of ownership and control in the socialized economy. This cannot come from private enterprise; it can only come from a form of state control and common ownership that has a modern aim in conformity with the integrated socialized nature of the modern productive forces of industrial mass production. A modern aim cherishes the social product for its use-value in meeting and guaranteeing the well-being of the people and general interests of society, and to humanize the social and natural environment. The modern aim and outlook of the new working class does not view the social product workers produce as something that must be negated in exchange-value so that money profit can be expropriated for the benefit of a small privileged class of owners of social wealth.
Without renewal of the political process so that the actual producers gain control over the productive forces, social product and state, the battle for pension security will continue to be fraught with upheaval and danger. The working class must do everything its unity and collective power can achieve to defend its pension rights within the current situation, and fight equally hard for democratic renewal of the political process so that it can guarantee the rights of all and resolve the pressing contradiction between the socialized forces of industrial mass production and their antagonistic ownership and control by individuals from a small privileged elite.
Note
1. Tata Steel’s global workforce produced 27.5 million metric tonnes of various qualities of steel in 2017. Tata Steel is just one monopoly within the much larger cartel called the Tata Group, a global conglomerate that expropriates the value of production from 700,000 workers worldwide.
Select country annual totals in million metric tonnes of steel for 2017:
– United Kingdom 7.5;
– Canada 13.7;
– United States 81.6;
– south Korea 71.1;
– Russia 71.3;
– India 101.4;
– Japan 104.7;
– China 831.7;
– total for world 1691.2.
The UK steel industry in 1990 employed around 50,000 steelworkers. Only a few thousand more than the 8,000 steelworkers at Tata Steel remain today. The country annual total for UK steel production in 1967 was 24.3 million tonnes, which fell to 15.2 million tons by 2000. The fall in production and employment reflects not only productivity but also the reorganization of the imperialist economy according to the private interests of the global cartels, and not just in steel production but more broadly throughout the manufacturing and other sectors.
Steelworkers’ Pensions Under Attack in Britain
Demonstration in Port Talbot against attacks on steelworkers’ pensions.
India-based Tata Steel Limited with over 80,000 workers producing steel throughout the world announced last year a restructuring of workers’ defined benefit pensions in Britain. The attack on pension rights affects 124,000 members of the British Steel Pension Scheme (BSPS). Tata Steel presently has 8,000 active workers at mills in England and Wales. The company is a member of the cartel Tata Group, which expropriates the value of production from 700,000 workers worldwide.
The pension concessions demanded of British steelworkers and retirees affect their actual and potential pension benefits from a restructuring of the BSPS pension plan and its $26 billion accumulated fund. Tata Steel and state officials threatened pensioners that without concessions to reduce pension benefits and company contributions into the fund from the new value active workers produce, the ruling imperialist elite in control of the steel sector would close the Tata-owned mills. The aim in reducing pension benefits and company pension plan contributions is to ensure the oligarchs who own and control the mills increase their expropriation of the value steelworkers produce.
Tata Steel and the state Pensions Regulator together have actively engaged in extorting what belongs to workers by right. They both declared that without anti-worker concessions and a state-organized pay-the-rich infusion of public funds into the private cartel to increase and guarantee the money profit of the owners of equity and debt, the steel sector of the economy could not and would not function. The blackmail they employed is familiar to many Canadian steelworkers. Even the words and threats are similar. They all boil down to the anti-social refrain, “We, the imperialists in control, with the full support and blessings of the state authorities who represent our private interests, refuse to run the economy and steel mills unless our aim for maximum money profit is realized. This demands that you workers must reduce your claims on the value you workers produce both in current wages and pension benefits and the state must provide us public funds. Otherwise we will declare bankruptcy, slam the door on your claims on our private assets, which belong mostly to moneylenders, and either shut the mills endangering your present livelihoods or sell the enterprise for a song to a fellow (insider) investor who will not be encumbered by social responsibilities for existing pensions, other post-employment benefits or environmental remediation.”
Workers’ Weekly, the online newspaper of the Revolutionary Communist Party of Britain (Marxist-Leninist), writes that Tata Steel and the state regulator presented the 124,000 members of the British Steel Pension Scheme with a stark choice either to transfer to an inferior replacement scheme concocted by Tata Steel or to a Pension Protection Fund (PPF). The paper says, “Both schemes will return less on average to workers than the old scheme, but the default option in the case of making no choice — and many retired workers were not in any position to make such a choice due to ill health — was the PPF, generally the less beneficial alternative.” The pensioners faced a narrow window from October to December 2017 to accept one or another scheme to reduce their pension benefits.
The situation of forcing pensioners to choose between two unpalatable options soon degenerated into the predictable “flock of financial advice ‘vultures'” who, as Workers’ Weekly describes, “descended on the affected workers seeking easy pickings, in a fraud of massive proportions. The pressing deadline created the perfect conditions for these so-called advisers to take advantage. They presented scheme members with a third option of transferring out completely via what is called a DB transfer, an option the (UK Parliament’s) Works and Pensions Select Committee, in its report into the closure of the pension scheme, said is ‘not usually in someone’s interests’.”
Reports say several billion dollars were taken from pensioners in scams and fees. Two thousand six hundred retirees under pressure from the vultures transferred their pensions to the third option. Upon review, pensioners lost enormous amounts of their benefits, a situation so damaging that police are now involved in investigating how such an egregious theft could take place.
Work and Pensions Select Committee chair Frank Field, a UK government opposition member, remonstrated after the fact: “Pension holders were fleeced by financial vultures…. Once again we find the pensions regulator fiddling while Rome burns, when it should have seen this rip-off coming…. All the responsible authorities must act, now, to stop more people being cheated.”
Workers’ Weekly writes, “This whole affair paints a particularly damning picture of the politicization of private interests through this arbitrary decision carried out as one by a big international monopoly, the government and state authorities, a decision that violates the rights of people to a decent livelihood in retirement. It brings into relief the need for workers to organize in defence of their interests and for their own decision-making power over the direction of the economy, so that vital production is not subject to the vagaries of the market, and their claims on the social product in the form of wages, pensions and social programs are guaranteed, depriving monopolies of the power to deprive the workers of these claims.”
(With files from “Workers’ Pensions at Tata Steel Stolen by the Rich,” Workers’ Weekly, March 17, 2018)
With thanks to, “Workers’ Forum”, Canada, http://cpcml.ca/WF2018/WO0510.HTM#3
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