Modern Myths

We live in a world of myths and stories that we tell ourselves.  Things we come to believe to be true. There are many examples of this, one being:

The British Empire tamed the savages and brought them civilisation.

We can see today a push back from various groups saying that this story and this myth which would have been used at the height of the empire isn’t true. 

There are many examples of extreme cruelty by the British in its empire.  So this means that the story of the empire is much more complex than one propounded by the wealthy elite white supermisists of its heyday and its understandable that people want to counter this myth today.

Some British people feel threatened by this myth being challenged.  Even some children of the commonwealth push back against this and that is because their experience of empire and colonies is an overwhelmingly positive one.  That is also a valid experience.  There will be many personal examples from ex-colonies where people like and enjoy its connection to Britain today, and its historical connection to Britain.  And that is because the story of empire is a complex and at times, a nuanced one.

The point of the people who counter the narrative is that, to achieve balance, you need to understand all aspects of the story, only when you have this do you have a better picture from which to draw a conclusion.

Lets take another myth.

Paying Striking Workers More Causes Inflation

When any company brings in more revenue than it has in costs its left with profit. 

Lets assume that the profit we are talking about here is that which is left for distribution to shareholders, so we have already accounted for, not only our costs incurred this financial year, but we have set money aside for future investment and other reserves.

If we add back into that profit the payroll costs, the cost of employing the workforce, you have payroll costs + profits.

Lets say our company, payroll costs + profits is £1,000,000, of which the payroll costs were £700,000 for the 100 people it employs, the people who work hard daily and produced that £1m profit.

That means, the owner, the shareholder, could have taken £300,000 as a dividend this year.

Capitalists describe this as the reward the owner takes for their risk, they could lose all their investment if the business went wrong.  Thats another myth for another day.  But our shareholder, who may have done very little this year, gets £300,000.

The workers strike, they want money.  In society at large, there is a cost of living crisis, inflation is already creeping upwards.

That wasn’t the fault of these workers, nor even its company.  Its just the cycle of the economy at that given time.  Its not the workers fault that grain used to come in from Ukraine in ship loads, but its stopped, so the other grain becomes more expensive.  Thats one cause of inflation, when the costs of inputs in the economy rise.

But we watch political commentators on TV arguing that in times of rising inflation we cannot pay workers more because it will drive inflation up.

But how can that be true?  All we are arguing about here is £1m.  Its £1m thats going into peoples pockets regardless. The only question is, who's pocket is it going into?

If the workers want a 14% payrise, all they’re asking for is an additional £1,000 each.  That means payroll costs become £800,000 and the dividend £200,00.  The same money overall, just less for the shareholder.

And if inflation is running at 14% in the economy then all these workers will be doing is using the extra money to ensure their families can eat the same food as last year.  Thats not EXTRA spending, thats just standing still.

Having a workforce that can feed itself and its family is generally accepted to be a good thing for any capitalist or business owner.

On the other hand, the shareholder, who lives off his own separate wage, has an extra £200,000 to spend rather than £300,000.  He may still buy a new Jag, just a slightly less good Jag.  That is what causes inflation, as its demand from consumers for more, so it's the higher dividend that drives up inflation, if thats the issue we're concerned about.

So really what we see here is an argument about the division of the wealth created by the workers, nothing more. Its just one group saying "I want to keep more for myself, and give you less".

Leading up to the next election the Tories will demonise striking workers and tell Labour that they are supporting these militant trouble makers, when actually by denying workers fair pay increases they’re saying “already extremely wealthy people deserve that money more than you.”

Next time our controlled media trot out this line as to why striking workers should not be paid more, let's question why we never hear arguments as to why owners should not be taking increasing dividends, of why highly paid executives continue to receive their pay and bonuses.

These myths are presented to us to swallow in the interests of someone. Let's just questions if they're true before we decide to demonise a particular group.