The digital economy, surplus value and monopoly

The digital economy, surplus value and monopoly

More thoughts from a seminar. It was organised by one of the North London CLPs and was advertised as a look at the Digital Economy. So what did I learn and what did I think?

On asking how transformational is the Digital Economy, I am reminded that CV 19 has shown who are essential workers and raises the question as to why they are so poorly paid and that the Digital Economy is not yet ubiquitous. Distribution is not yet virtual and will never be, although with AI driven trucks and airborne drones, a lot of jobs can still be eliminated but I am reminded of Carlota Perez’s comments that the railways created demand for more horse drawn freight miles. The other work apart from the obvious health service workers that cannot be virtualised is cleaning and security.

One thing that was not said is that the platform companies and their software benefit from massive economies of scale, and the critical scaling factor is the number of market participants i.e. the consumers and suppliers; for Air BnB, room providers and renters, for Uber, drivers and riders. While some market place creators have applied massive imagination and science to the problems of IT scalability to support their global marketplaces, the IT plant is not at the heart of the value of these market places although we need to recognize that we’ll have to pay for cycles and the power they consume.

Copyright and closed source makes the software monopolistic which is then applied to the relationship with Labour, and in the case of both Air BnB & Uber non software capital is outsourced to the supplier! The value of the company is based on this market activity, not the value of capital employed and not the so-called cost of the software; the software expropriates the surplus value from the suppliers and the size of these markets acts as a further barrier to entry for competitors.

Copyright since it inhibits copying of the software, also underwrites the share value. This is important as we consider if these monopolies should be placed under common ownership. We need to recognize that copyright enables rental income on an infinitely available resource i.e. the software.

These problems are not new, it’s about how combine labour and the world’s natural resources to produce new stuff, the market is meant to optimise this and the platform companies break these economic rules, but fortunately we know how to regulate monopolies.

There is a need for some new thinking about the value of software and how markets might ensure optimal resource allocation but today the basic facts are that software copyrights enable the expropriation of surplus value and establish a rental income yielding super-profits, super-profits funded by the consumers.

The relationship between these marketplace platform companies[1] and their suppliers is exploitative, copyright laws add to the barriers to entry. Their practices are contrary to decent behaviour and the monopolistic nature of the enterprise, together with the subversion of the capital markets undermines their economic justification.

That’s the problem for socialists

[1] Banks are platform companies. …

Fatal Weaknesses

Fatal Weaknesses

This is part II of my commentary on the Labour Leak, it looks at the missteps and failures to control the bureaucracy from 2015 to 2019 and looks at the structural faults, the need for a robust segregation of duties, how Labour has changed its rules to make expulsion of alleged antisemites or troublemaker’s easier and how McNicol’s eventual departure allowed both damage to be continued and a cover-up to become deeply embedded within the Party.

A better segregation of duties

I have written a lot during Labour’s democracy review on the issue of segregation of duties. The General Secretary is too powerful; it’s a feature of the role’s design and this is worse at the Regional Director level where they inherit powers from both the GS and the NEC which is designed as the means of accountability and control for the General Secretary. We have been shown that a General Secretary that has the confidence of the NEC, or at least enough of it to block any sanctions can do what they like, which includes breaking the rules and maybe the law.

The Govt. Department responsible for supervising & enforcing the country’s anti-corruption laws is the Ministry of Justice, they have issued guidance which states that,

‘Improper performance’ is … performance which amounts to a breach of an expectation that a person will act in good faith, impartially, or in accordance with a position of trust.”

MoJ Guidance on the bribery act

Improper performance is the result of any action designed to having the effect of gaining advantage through an improper performance and is a crime.

The key question is how do we stop this happening again?

If we look at the literature and commentary on corruption, it is clear that anti-corruption programs have to come from the top and the critical controls are the performance management system, strong and clear financial controls, a robust whistleblowing system , the need for decisions to be taken by more than one person and an effective Risk & Audit Committee. While some may argue that McNicol has proved the need for change, we need to understand the role of those who ensured that the controls that do exist didn’t work.

The problem is the powers of the GS, and the concurrent GMB affair shows that election without controls is not the answer to the problem.

What happened here, it would seem, is that the General Secretary took a number of decisions on a highly factional basis, encouraged staff to do the same or ignored staff who behaved in this way and this has been covered up  by his sponsors/supporters on the NEC; attempts to clean the stable have failed because there isn’t the will and because those on the losing side at a national level were just waiting to inherit the same powers.

We need to consider why the NEC permitted this to happen because McNicol was gone within two months of the special bye-election for NEC places that led to the election of Momentum Chair, Jon Lansman together with Yasmine Dar and Rachel Garnham. We must assume that before that, the votes weren’t there to hold McNicol and GLU to account.

Matters other than antisemitism

The leaked report was only looking at the conduct of GLU with respect to antisemitism, it fails to document the 1,000’s of bullying complaints, and the misuse of the disciplinary system for political control, not just at national level but in many CLPs,  Labour Council Groups, together with Labour Campaign Forums especially during the selections for the all member 2018 council elections.

We need answers as to whether the decisions taken in the run up to the 2016 leadership challenge which were supported by the NEC were taken in good faith and in accordance with the principles of good governance. In legal terms, were all relevant criteria considered and all irrelevant criteria ignored. The national regulatory regimes which govern these issues are the Nolan principles i.e. the report of the committee into standards in public life & the Bribery Act.

We also need to understand if ‘improper performance’ occurred during the selections for MPs for the 2017 election;  the PLP lost 14 members in the two years of the parliament for various reasons, from perjury through sexual harassment to a lack of commitment.

These are not victimless acts, the victims are the ordinary members suspended and even those investigated and cleared and let’s remember that they invented a procedure whereby they wrote to people saying that they had no evidence but that if another complaint was made then it would be taken as a factor In any future investigations.

Labour’s rules

The NEC have rightly fought to ensure there is no place for antisemitism in the Party, and have launched two enquiries, issued three codes of conduct, and changed the disciplinary rules three times. After the original stories about antisemitism and its weaponisation in Oxford Labour Students and NOLS, the NEC commissioned a report by Baroness Royall, which found little; Corbyn commissioned a report by Shami Chakrabarti which made a number of recommendations and also proposed changing the rules, proposing the abolition of the absolute free speech defence. McNicol’s NEC refused to bring these rule changes to #lab16 and in the tradition of the Labour Party in playing the player not the ball, their allies launched a campaign to denigrate Shami Chakrabarti and the report. Despite this, the NEC brought rule changes to Conference for the following three years. (2017 – 2019). All these changes weaken the presumption of innocence.

The effect of all this is that the segregation of powers where the Conference defines the rules and thus unacceptable behaviour, the secretariat investigates complaints, the NEC decides to if there is a case to answer and the NCC acts as judge and jury taking into account the accused’s defence has been weakened. The NEC writes the Codes, and now also decides on guilt and sanctions without a right to state one’s defence. We now have evidence that the investigation process has been corrupted over the last four years. This agglomeration of power is not something we permit in our judicial system as it breaches the principle of a fair trial.

Wrong steps

The transition from McNicol’s term of office to that of Formby was not handled well. The use of compromise agreements, involving extra contractual payments for McNicol and other key senior staff. One lesson must be that the widespread use of Non-Disclosure Agreements and the use of peerages to supplement senior staff pensions needs to stop.

The fact is that Corbyn’s office were so grateful for their agreement to go that they were prepared to pay any price. The eulogy by Corbyn, reported in this Telegraph article, dated 24th Feb 2018 is shocking in the light of the allegations, I reproduce the full quote in my blog article, “Not even the basics”.

“I would like to personally thank Iain McNicol for his long and dedicated service to the Labour Party as General Secretary.

He has run our party’s organisation at a time of great change, including a near tripling of the membership, two general elections and the EU referendum.

Iain has served the Labour Party and trade union movement in a wide range of roles throughout his career and is a credit to our movement.

I am confident Iain will continue to play a major role in politics and our party, and will support our team inside and outside Parliament with his experience and skills.

Jeremy Corbyn (according to the Telegraph)

At the time McNicol resigned, the Head of Compliance, Stolling and London Regional Director, Fleming also resigned but were all allowed to work their notice. This is pretty much unheard of in the private sector.   We also need to know if others were involved. The exposure of one individual’s WhatsApp records shows that much of this was undertaken using IT tools to which Labour’s management had no access.  There may be much more to find.

The contents of the leaked report suggest that acts of gross misconduct and conduct which in the opinion of the NEC is prejudicial, or in any act which “in the opinion of the NEC is grossly detrimental to the Party” have occurred.  If so, employees should be dealt with under the staff disciplinary rules and if necessary, under the party’s disciplinary rules. Each allegation against those no longer employed by the Party needs to be assessed but if any compromise agreements were signed with people that have been shown to have performed acts of gross misconduct then the Party should look to recover the, in some cases, very generous compensation payments made. …

What cost equality?

What cost equality?

51.5% of Labour MP’s are women and 20% of Labour MP’s are BAME.

But what about the class background of MP’s?

29% of MP’s went to private school (7% of the population did), 14% of Labour MP’s went to private school.

25% of MP’s went to Oxbridge (0.5% of the population did)

50% of MP’s went to the Russell Group of Universities, 24 ‘top’ universities (11% of the population did).

In 1979, 15% of MP’s came from ‘blue-collar’ backgrounds. In 2019, 3% did!


Closing the Stable Door II

Tye Labour Party’s inquiry, now known as the “Forde Inquiry” after its independent chair, Dr Martin Forde, into the leaking of its investigation into the activities of its complaints team and senior management has published a call for evidence. It’s web site is at fordeinquiry,org and the call for evidence page is here and behind the image.

I plan to make a submission based on Unanswered Questions, also Closing the Stable Door and a third one based on the various acts in breach of the member’s charter, the rules and the law which impacted me personally.  …

Mushroom Therapy

I have just bookmarked Crispin Flintoff’s video made for Stand up for Labour, as part of his campaign to get the Party to spend more on the CLPs by means of remission of a higher proportion of the membership subs.

From 29:30 Dave from Milton Keynes, kicks off a discussion about the management and reporting of the Party’s finances. Two NEC members, Gurinder Singh and Jon Lansman comment on the exclusion of the NEC from the management of money. It’s really quite shocking. …

More Masonry

Paul Mason comments on the Labour Together report; the article examines how to reassemble a majority voting coalition, he argues it’s not just policy, it’s campaigning culture and this I agree about; he also argues that we must be ready to go into coalition with the SNP as we cannot win sufficient Scottish seats while Scottish Labour holds a unionist position. I think he maybe right about economism being sufficient but is too hopeful about Momentum, certainly the election campaigns to its national committee itself suggests that neither its leadership nor its challengers are ready to learn the lessons on political culture that he advocates. The Left needs to recognise why Corbyn’s coalition has fractured and learn how to rebuild a new one otherwise it’s in a minority in the Party and country. …

Black Lives Matter

Over the weekend, there were many protest demonstrations about racism in the UK under the slogan #blacklivesmatter

There was violence at the demo in London, a police horse bolted after the police had decided to charge a bunch of protesters; it injured a protester, several statues inc. that of Churchill were defaced. In Bristol, the statue of Edward Colston a slaver, later a Tory MP and philanthropist was pulled down and thrown in the Avon. Both these actions have started debates, about Churchill, slavery, museums and how we do history in the UK.

The establishment was quick to apportion blame on the protesters, with Johnson calling them thugs, and Priti Patel yet again disgracing herself, but this is to avoid examining the racism within British society, the Tory led state and the Tory Party itself. Only when we, i.e. the people of the United Kingdom, have satisfactorily resolved the Windrush scandal, the hostile environment and, most recently the suppression of the report into BAME propensity and deaths from CV19 can the Tories have anything to say about anti-racism demos.

The Labour Party has its own demons to exorcise, apart from the record of the Attlee government in India and Africa, more recently there is the allegations of racism at the most senior levels of the Party towards its leading black MPs, and Keir Starmer, albeit in a longer interview criticised the Bristol demonstrators who had pulled down the Colston statue. He has been rebutted by Marvin Rees, the black Mayor of Bristol, who also criticised the Govt’s priorities and Dawn Butler, the black MP for Brent Central.

Len Duval, the Leader of London’s GLA Labour group issued a statement, in which he says, this must be a turning point. Anyone who disagrees is just not listening to their friends, co-workers, family and neighbours.

This is a challenge for everyone in the UK, together we can make a better society and move towards eliminating racism within our society.  …

Culture for all

Culture for all

Tracy Brabin, in her statement, “Culture for All” says,

When times are dark, culture and creativity provide a light. That’s why I’m proposing a vision of Culture for All to be at the heart of Labour’s forward journey.

She has great ideas on Football, the BBC, diverting the festival of Britain funding, access to the creative industries,and comments on nepotism, class bias and the impact of other informal networks, together with the impact of the growing gig economy relationships in the creative industries.

For instance on football, which she identifies as important community resources and hubs, she says, “We need to tackle the mostly undemocratic ownership and control of football clubs, and the way that sport is organised, so that fans and communities are properly engaged.”

While she recognises the stake holding interests of fans in sport, she doesn’t spend the words on talking about them in terms of acting, music nor film? Although she does say ” … Campaign to put more digital cultural content online. Just as the National Theatre has done in response to Covid-19, so too must we support our regional arts institutions in reaching new audiences.”, although this is also weak on the contribution of value by fans.

There is a good section on health and well being

On digital she says, amongst other demands, the UK needs, “a new properly resourced internet regulator to tackle online harms, abuse and misinformation” is needed and Labour should “Make the case for a Digital Bill of Rights so UK citizens have greater control over their own data”. She does not repeat the free broadband promise on which I comment positively here, and less positively here.

This is a thoughtful review of what we could do, it might be a shame she lost the shadow spokesperson position, but she remains Shadow Spokesperson (Minister) on Cultural Industries.


This does not repeat big media’s bollocks on the “Value Gap”, which is an unmeasured & unmeasurable concept aimed at appropriating the value created by fans and commentators and implementing a trickle-down approach for artists and performers. It appeared in one of the NPF reports.

Featured Image: cropped from Tracy’s twitter feed …