Tuesday, 11 October 2011

Time for a tax on unemployment

According to Karl Marx, capitalism requires a reserve army of surplus labour to squeeze working conditions and maximise profit: 
Big industry constantly requires a reserve army of unemployed workers for times of overproduction. The main purpose of the bourgeois in relation to the worker is, of course, to have the commodity labour as cheaply as possible, which is only possible when the supply of this commodity is as large as possible in relation to the demand for it, i.e., when the overpopulation is the greatest.
This inevitably means a rise in unemployment and, with unemployment rising by 80,000 in the second quarter of this year, we can see how the conditions of working people are being attacked whilst financial institutions remain protected. As public sector pay is frozen, jobs are cut and trade union rights are eroded, the government’s package of quantitive easing will go straight to the banks. It’s effectively a second bail-out which banks will use to service debt rather than inject money into the economy to stimulate growth.

What we really need is full employment and a population with disposable income to spend and kick-start the economy – but the dialectic interests of the capitalist class and working people makes this impossible.

I was surprised, therefore, to read a letter today in the Morning Star by Bill Banning which offered a relatively simple solution to this diametrically opposed impasse:
Let's have a tax on unemployment, a tax to create jobs ... The unemployment or austerity tax would be linked directly to the rise and fall of the labour market and would be applied to company profits, including banks, financial institutions, multinationals, millionaires and oligarchs.

It would be based upon the cost of unemployment to the economy so that it would increase as unemployment goes up and reduce as it comes down.

This would mean that those doing well despite the recession would share the pain and at the same time provide a positive incentive for job creation.

Surely if, as we are constantly being told, we are all in this together, there could not be a fairer, more equitable system than one in which those that are suffering most from the austerity measures demanded by the need to reduce our national debt can clearly see that their sacrifice is acknowledged, and that those able to reduce their hardship by virtue of their good fortune are doing so.
Bravo Bill! A simple but effective idea to link corporation tax to unemployment. If Ed Miliband is serious about favouring ‘producers’ over ‘predators’ then this would be a good first step to re-engineer capitalism in favour of the people currently paying for the costly mistakes of financial institutions. 

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