The Weekly paper of the New Communist Party of Britain
Week commencing 19th January 2018

Carillion tolls the bell for capitalism

THE DOWNFALL of the giant company Carillion brings back memories of the fall of the Lehman bank in 2008 and the beginning of the major banking collapse. We wonder what will be the full implications? What other companies are about to fall with it?

Carillion was one of both Tory and Labour governments’ private contractors for taking over public-sector work in many different fields — happily accepting taxpayers’ money, delivering a poor service, being a bad employer, but delivering vast wealth to its shareholders and even more to its directors.

Beginning as a construction company, it took on public-sector buildings and then spread its wings over the services delivered from those buildings: NHS hospitals, schools, our railways — especially the HS2 project — housing for the armed services and many more. It also acted as a conduit of taxpayers’ money to scores of subcontractors, taking over the complete management of major projects and the delivery of services. Around 30,000 businesses are due to lose around £1 billion through this collapse.

Banks are facing a loss of up to £2 billion just in connection with the HS2 rail project — will this lead to bank collapses?

Around 43,000 direct employees of Carillion are wondering if they will have a job next week — but so are uncounted others who are employed by these sub-contractors. Former Chancellor George Osborne has blamed corrupt senior civil servants for passing too many projects to Carillion without scrutinising the company’s finances more closely. He claims that some of the bids from Carillion were unrealistically low. But the Government has done nothing but urge the civil service to sell off as many public-sector services as possible. And he was amongst the Cabinet members pushing this process through. Ultimately the Cabinet is responsible for everything the civil service does.

It seems that the directors of Carillion took the taxpayers’ money and, instead of using it to pay workers and deliver services, Carillion has been gambling amongst the high finance dealers in hedge funds, futures, wind, water and fairy dust, and has fallen foul of ‘short selling’. The company’s finances have been weakening for some time now and there have been plenty of warnings of the coming crash. Even the shareholders have been let down but the directors have been very careful to protect their own bonuses.

Yet the Government has continued to give Carillion more and more contracts. But the Carillion directors have not broken the rules of capitalism; they have absolutely kept to capitalism’s prime directive, which is to make as much money as humanly possible. Had it traded more cautiously it would not have grown so fast or so far. Carillion and a handful of other giant companies carrying out public-sector work have created amongst themselves a massive centralised quasi-government administration that is now running most of what goes on in this country. And their only link to our elected representatives in Whitehall is through dodgy senior civil servants who ensure that the police and state agents protect them and smooth their way.

Karl Marx, in a short work on free trade included at the end of his book The Poverty of Philosophy, saw this process as potentially a good thing because after the capitalist state has fallen and when the working class is in power, this massive administration will be a valuable tool in delivering essential services to the people and overseeing production of goods in line with a planned economy — firmly under the control of the new workers’ government.

He stressed that trying to reverse capitalism to a previous era was counter-productive and that it was better to let it follow its process to the end and carry its technological and manufacturing developments to benefit a socialist society under workers’ rule.

Certainly, it would benefit the people of this country if, under the future Corbyn government, the whole Carillion empire was nationalised, though we do not mistake Corbyn winning an election for a workers’ revolution. There is a danger that a future Tory or other government would simply reverse Corbyn’s progressive acts.

That is why we must keep raising awareness and arguing for a proper socialist revolution, the end of the capitalist state and the creation of a workers’ state; a change that workers will not allow to be reversed.