Shell profits - a case in point

Quarterly profits have risen by 11 per cent over the year to almost £5 billion, even though production is up by less than 2 per cent.

But in BBC and most other media circles the figures will be presented in the usual upbeat way, with share price rises gushingly reported as a welcome sign of economic revival.

At the same time the arrival of a second recession has been reported as though it has nothing to with corporate profiteering.

Indeed, the need for policies that will produce more and bigger profits for Shell and the other monopolies is, we are told, essential to ensure the restoration of economic growth.

But rocketing profits in the energy, retail, finance and other sectors are not leading to increased investment and job creation on a scale to offset the vicious cuts in public expenditure.

All the indications are that the profiteering monopolies are hanging on to that share of their profits that is not being doled out to shareholders.

More precisely, the banks are looking after the undistributed profits for them, using the loot for market speculation rather than making it available to home buyers, small businesses and productive industry.

Meanwhile those monopoly profits are being squeezed out of domestic and industrial customers through higher prices, which feed inflation even when the economy is stagnating.

Thus we have returned to what bourgeois economic textbooks used to claim could not happen - namely "stagflation."

Of course, we will continue to hear calls for less "red tape," looser employment laws, lower taxation and longer national insurance holidays for employers in order to encourage them to invest in more production and employment. 

Such policies would increase profits still further, at least for a time, but they will not boost the economy on anything like the scale required.

They have not helped Britain avoid a double-dip recession and there is no evidence that more of the same will produce something different. 

Why not?

Because increased production ultimately needs millions of consumers who can afford to pay for the extra goods and services at a profitable price.

Yet rising prices, wage freezes, benefit cuts and shrinking budgets in the public sector are slashing purchasing power in our economy.

Weakening employment rights and undermining trade union bargaining strength will reduce it still further.

For the giant monopolies who produce society's most essential goods and services, profits will continue to roll in at the expense of consumers and other sectors of the economy.

The inflationary effect of their freedom to ratchet up prices will go largely unchallenged, even by those politicians, financial analysts and media commentators who point to inflation as a disincentive to investment and growth.

The Morning Star has no such reverence for the monopoly-controlled "free market" that rewards corporate extortion and greed, plunges the economy into periodic recession and punishes workers, pensioners, the unemployed, single parents and the disadvantaged for the crimes of the rich and powerful.

That is why this paper will continue to campaign for price controls on essential goods and services, higher taxes on the wealthy and big business, public ownership of the energy and finance sectors, greater public expenditure and investment, higher wages, pensions and benefits, and more rights for workers and their trade unions.

This is the kind of alternative economic strategy, reflected in the demands of the People's Charter, that the labour movement and the Labour Party leadership should project.