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Year 2001 Number 4, January 11, 2001Archive Search Home Page

Tony Blair Begins Electioneering

Workers' Daily Internet Edition : Article Index :

Tony Blair Begins Electioneering

For Your Reference:
What Is Meant by the Knowledge-Based Economy

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Tony Blair Begins Electioneering

In his speech to party members and business leaders in Bristol on Tuesday, Tony Blair kept hammering home the catchphrase: "choice not chance".

The image that Tony Blair wants us to form is of a country which is heading in the direction of prosperity and investment. His argument is then that this situation has not come about by chance but by the choices the government has made. However, these have not just been any choices but "tough choices".

To bolster the image that the country is heading in a progressive direction, Tony Blair argues that the first term of a Labour government has simply being laying the foundations because of twenty years of neglect of the economy by previous Conservative governments. Tough choices have been necessary because of this neglect, and tough choices will be necessary to get the job done.

Tony Blair needs to implant this image because he understands that people’s perception of the state of the economy and of the quality of its prosperity and of investment in social programmes by the government is entirely different. The disillusionment with the government is quite profound.

It is not enough for him simply to trot out the threadbare argument that the present government’s policies are the correct ones but one cannot appreciate that because of the mess left by the previous government. Such an argument does not wash any more. It is made even more difficult by the fact that the Labour government’s programme built on and was a continuation of the Conservative programme. So Tony Blair has to accuse the Conservatives of neglect rather than economic incompetence.

Tony Blair even goes so far as to say that the 20th century was the Conservative century. He does not tell us why if this were so, people’s lives now are not filled with prosperity. For after all, the Conservative Party was the "party of the economy". Tony Blair is falling over himself to erase the entire history of the 20th century, which gave rise a socialist system, a workers’ state, the most advanced system seen in human history, through the October Revolution of 1917. Nor that, led by the Soviet Union and with a profound progressive and anti-fascist sentiment, the world’s people defeated Nazism. All that remains is, he says, "If you voted with your head, the old saying went, you voted Conservative; with your heart and you voted Labour."

So the tough choices have been to jettison "worn-out and irrelevant economic dogma". The tough choices have been to give the Bank of England independence and introduce tough new fiscal rules. This is precisely what Tony Blair says in his speech. And these tough choices have "revolutionised economic management in Britain". In other words, the tough choices are the government decisions that the people know in their hearts are firstly in favour of the financial oligarchy and secondly against investment in social programmes. And this is a "revolution"!

What Tony Blair stresses he is building on are the "structural changes in industry in the 1980s that were of benefit … particularly incentives for enterprise". So after the flow of progressive and revolutionary sentiment, the struggle against imperialism and for a new social system which rose and fell in the 20th century, giving way temporarily to a period where reaction has the upper hand, where privatisation and cuts in social programmes have been the order of the day, it is the latter period that New Labour is building on.

Of course, he claims that the goals are progressive but "the means are radically different".

In the end, the "tough choices" are to lie with the nation, the electorate. The "government and the nation" have got to "get the job done".

So rather than reject the whole system of parliamentary democracy and the economics of globalisation and making business successful in the global market, rather than continuing to fight for their interests and demand that their rights are recognised, the working class and people of Britain must unite with the government and elect them for a second term.

This is the tough choice that must not be left to chance that is the message of Tony Blair’s Bristol speech.

Article Index

For Your Reference:

What Is Meant by the Knowledge-Based Economy

The objective conditions are pointing towards socialism. The objective situation is that society is increasingly geared to pay the rich and globalisation of the economy. This is the case whichever party the bourgeoisie brings to power. In the struggle between the new and the old, between progress and retrogression, the bourgeoisie has further confirmed that it is not concerned with the national economy but with making and amassing maximum capitalist profit. The financial oligarchy utilises the state so that the whole of society is forced to pay the rich. At the same time, these old forces, the reactionary bourgeoisie, the rich, and all their political representatives are claiming that the conditions are pointing towards globalisation. They are taking measures to conciliate the class struggle of the workers against globalisation at home and attack those countries abroad which defend their own road of development by declaring them "rogue" states. In this context, the illusions of the "Third Way" of Tony Blair and New Labour have the aim of conciliating the class struggle and in particular are aimed at stopping the working class finding its bearings in the present situation.

The objective conditions are pointing towards the need for the working class to attain political supremacy and become the leading class in each nation. What this means in the economic sphere is that the workers as the producers of all wealth must take hold of what belongs to them and stamp their direction for the economy on society so that the economy is planned to meet the needs of all. Most importantly, this means today that in Britain the workers must hit at these illusions of the "Third Way", and must fully expose them among the working class and people.

One of the most significant of the illusory "solutions" that the government continues to peddle regarding the direction of the economy is what is called the "knowledge-based or knowledge-driven economy."

The "knowledge-based economy" is an ideological weapon in the hands of the bourgeoisie. According to them, anyone who is for the "knowledge-based economy" is forward looking and progressive whilst anyone against it is part of the forces of conservatism. The conception of a "knowledge-based economy" is a justification and an illusion to cover the disastrous course for society in gearing society to pay the rich and in globalising the economy, and is part of the arsenal of the "Third Way" illusions. But at the same time, is it an actual economic programme which the bourgeoisie is pushing. What is meant by the knowledge-based economy?

In October 1999, the OECD published what the Economist commented to be the first attempt at statistically examining the "knowledge economy". The Economist commented that the pundits and politicians were forever proclaiming the knowledge economy yet so little was known about what they were talking about. The OECD survey defined the "knowledge economy" as high technology industries, such as computing and telecommunications, and sectors which it defined as a highly skilled workforce such as finance and education. The argument it gave was that growth in knowledge-based industries requires investment in knowledge as well as in physical capital. So the survey also added together spending on research and development, investment in software as well as all public spending on education.

The survey then compared what it called the knowledge economy as a percentage of what it called the physical economy. This was supposed to be an attempt to show what part of the economy was due to what they called "knowledge" and what was simply due to the "physical" economy. But nowhere was the question of skill in terms of simple labour power evaluated nor how the law of surplus value operates and no attempt was made to seriously analyse as to how such a "knowledge economy" benefited the economies of the member countries. But at least this survey made some point by including spending on public education in the knowledge economy. This survey came up with result that the US was not top of the knowledge-based economies, although, in spite of this, the US is now declared as such.

In March 2000, Lord Sainsbury, Parliamentary Under Secretary of State for Science, spoke at a university conference, a speech which he has given on several occasions on this question on behalf of the government. Speaking about universities he said that in addition to their traditional roles, which he defined as producers of knowledge, trainers of young minds and transmitters of culture, universities are increasingly being seen as agents of economic growth. He then defined the Knowledge Driven Economy as the global economy, where capital is mobile, technology can migrate quickly and goods can be made cheaply in low cost countries and then shipped to developed markets.

The government clearly defines the knowledge-driven economy as a component part of the global economy. What it helps to drive is the global economy by making capital more mobile, migrating technology to where goods can be produced most cheaply and then in shipping goods to markets that fetch the highest prices. This seems to be the definition that is now officially used certainly in Britain. This knowledge economy is to facilitate the production in the cheapest part of the world and sell in the part of the world where the profits are highest using the scientific and technical revolution almost exclusively for this purpose and gearing education to that purpose. It is interesting to note also that when speaking about the knowledge economy in schools, education ministers simply refer to and define this as computer skills; when speaking about it in terms of the jobs market they simply mean computerisation of the Job Centres, so that instead of going to a Job Centre the claimants will wait to see if an employer accesses their CV online.

Then Lord Sainsbury went on to say that in 1984 the combined market value of the ten largest firms quoted on the London Stock Exchange was £40 billion while their net assets were worth £40 billion. Two were natural resource companies, none were banks, one was a retailer and four were industrial companies. He then made the point that today the combined value of the ten largest firms is £340 billion and their net worth is £90 billion. In other words, what he says has changed is that now on the Stock Exchange the top companies are knowledge-based companies which are valued by the investors at a much higher level than their actual net worth or assets. Their assets are now bound-up in intangibles such as creativity, knowledge and human skills. He says that six of those top companies – businesses such as Vodaphone, Glaxo-Wellcome, and AstraZeneca – owe their wealth to intellectual property rights or franchises. The recent changes to valuations in the FTSE 100, with old established industries such as brewers and utilities giving way to new knowledge-based companies, is indicative of these changes. He says that in America the picture is starker. The highest value companies include Microsoft, Intel, Merck, Cisco and Disney, many of which hardly existed twenty years ago. He said that they are all characterised by their IPR (Intellectual Property Rights), and knowledge content. So he concluded that their value bears no relation whatsoever to their net worth or capital stock. He then deduces from this that Britain will in future only compete successfully if an economy is created that is genuinely "knowledge-driven", and that universities have a vital role to play in this process.

The stock market was evaluating these so-called knowledge-based companies as having more stock market value than industrial companies or companies that control natural resources even though these companies may have more assets or be more important to the economy. His argument was that the value of these so-called knowledge-based companies is in the value of the shares and returns. These are not so much determined by the assets of these companies but in what he called the assets now bound-up in intangibles such as creativity, knowledge, human skills and intellectual property rights or franchises.

(to be continued)

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