Year 2000 No. 35, February 15, 2000

The Mania for "Mega Mergers" Is the Drive for Domination and War

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The Mania for "Mega Mergers" Is the Drive for Domination and War

Train Guards Back Strike

Letter to the Editor:
Deterioration in Postal Service

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The Mania for "Mega Mergers" Is the Drive for Domination and War

It is clear that the rate of the so-called "mega mergers" – the merger of already massive monopolies, or more usually and accurately the take-over or hostile bidding of one giant for another – is accelerating. Barely a week goes by without the announcement of one or other of these "mega mergers", often breaking records for size or global scope. The concentration of capital and wealth is reaching incredible levels.

At the end of last year Vodafone Airtouch (not that long ago formed by a £40 billion purchase of AirTouch by Vodafone) launched a hostile bid, worth £82 billion, for the German telecoms giant Mannesmann. Mannesmann had itself acquired the British mobile phone group Orange last year. On February 3, the merger was agreed, valuing the combined multinational at £225 billion. This makes it Europe’s largest company. Vodafone, when floated by Racal’s Ernie Harrison on the stock exchange in 1989, had a market value of £1.7 billion.

In the first few weeks of this year, AOL (America Online) announced its merger with Time Warner, itself the result of some not inconsiderable mergers, to make a multinational worth £220 billion. SmithKline Beecham and Glaxo Wellcome (the names alone demonstrate each’s merged pedigree) announced their merger a week or so later, to create a £114 billion drugs monopoly, Glaxo SmithKline. And shortly after, EMI announced its merger with AOL Time Warner to create "the world’s biggest music industry". BP Amoco, the recently merged oil giant, is engaged in a take-over struggle for Atlantic Richfield (Arco). If all these mergers go ahead, the three monopolies of BP Amoco, Vodafone Airtouch and Glaxo SmithKline will between them account for one-third of the value of the FTSE 100 share index which is made up of the 100 biggest companies in Britain.

This massive concentration of wealth and power is the 21st century equivalent of what Marx in his day described as "one capitalist killing many", a form of enormous accumulation of capital expropriated by one giant multinational from others.

Even more characteristic of today’s world is the concentration and mergers of the banks and financial institutions, not excluding from consideration the international financial institutions such as the IMF and the World Bank. For example, NatWest and the Royal Bank of Scotland two weeks ago agreed the take over of the former by the Royal Bank. Even this will only form the seventh largest European bank at a capital value of $42 billion. The world’s largest bank (and still Europe’s largest) was the merged Midland and the Hong Kong and Shanghai banks – HSBC, with a capital value of $97.5 billion – until three leading Japanese banks announced an integration of their operations to the tune of $1,300 billion by 2002.

Some commentators have suggested that this mania is merely a "fashion" for the "mega" monopolies, to be broken up at a later date into smaller, "leaner" companies. But this is to misread the nature of these objective developments. The demand is to dominate markets and not only compete but actually become "number one", if possible the only one, on the world stage. Many more banks are predicted to merge, as the creation of the euro has led to a rapid consolidation of European banks into national superbanks. In this, of course, the people are made to pay with job losses in the "rationalisations" and the disruption to the economy.

But as competition becomes ever more cut-throat in the drive to globalisation, the drive to domination also is exacerbated. The contradictions between the imperialist powers and their economic and political blocs become ever sharper. In many ways, the situation is similar to the turn of the 19th into the 20th century, when the division of the world had been completed, coinciding with the growth and power of the monopolies and of finance capital, and the competition between the big powers could only be resolved by redivision of the world, which is to say through imperialist war. This preparation for war is also evident today, with actual aggression, such as against Yugoslavia, reflecting the contradictions for domination of Europe and other parts of the globe. In these circumstances, all calls for social partnership between workers and the monopoly capitalists, for an end to the class war, are calls for the people not to radicalise society as the objective developments are urgently demanding, not to bring about the revolutionary transformation of society which is so urgently needed, not to oppose the imperialist drive for domination and war.

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Train Guards Back Strike

Guards at most of Britain’s train companies have voted to take strike action over the undermining of their role in ensuring the safety of trains. Guards at 16 train companies voted for, while it is reported that those at a further seven had voted against.

There was hope that strikes could be averted, however, as the RMT union delayed outlining strike dates because fresh talks are to be held next week. Jimmy Knapp, general secretary of the RMT union, said after a lengthy meeting of the union executive on Wednesday that he had received a letter of support from South West Trains indicating support for the union’s case. The move has raised the prospect of fresh talks with Railtrack, which is in charge of safety rules, and the Association of Train Operating Companies.

Railtrack has said that its intention is to put drivers in charge of safety. But the RMT points out that not only with the guidelines downgrade guards’ jobs but they will also worsen safety.

The dispute comes at a time when the report on the Southall rail disaster has been scathing of the privatisation of the railways in bringing about a chaotic situation as to who is responsible for safety and hence a tragic deterioration in stands, and as John Prescott has backtracked in his decision after the Paddington rail disaster to strip Railtrack of their responsibility for safety.

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LETTER TO THE EDITOR

Deterioration in Postal Service

Dear Editor

In the light of the moves in the Postal Services Bill to make the Post Office competitive in the global market, making its motive one of paying the rich and not serving the social needs of the people, it is interesting to note articles and correspondence in a South London local paper.

Residents have been writing in to complain of late deliveries and even no deliveries at all. Despite this worsening situation, which all are agreed arises because there are not enough staff to deal effectively with the volume of post and a reliance on overtime which the workers cannot always work, the authorities continue to insist there is no problem. A union spokesperson has said that in carrying out staffing revisions, instead of creating new jobs, positions will be cut, and that the revisions do not seem to be designed to address the real problems but to minimise Royal Mail’s expenditure. Despite the fact that the problems are actually spreading, Royal Mail has said that talk of the "shambolic state" of the delivery service is "scare-mongering". A spokesperson for Royal Mail said, "These claims serve no other purpose than to undermine the hard work we have put into provide our customers with the services they have the right to expect." I have also read that with a new wage deal, Royal Mail will expect any increase to be met by "productivity improvements through more flexible arrangements".

Not only this, I may say. The postal workers are obviously being made the brunt of a vicious campaign against them. I understand, for example, that in a BBC Radio 5 Live broadcast in January, an anonymous pre-recorded voice of a person claiming to be a postman gave a so-called "interview", which deliberately gave the impression that it was normal behaviour for postal workers to delay and throw away mail, to insult customers, to "give customers hassle", and to receive advances from the stereotype "bored housewife". I feel sure this sort of slander has an aim, which is all part of softening up both the workers and the public – already suffering from the closure of so many sub-post offices – for this so called "becoming competitive in the global market". Certainly it must have some aim, since the postal workers that I am acquainted with are professional and friendly, as you would expect from postal workers.

If privatisation and competition in the railways is anything to go by, I dread to think what is going to happen to the postal service when the Postal Services Bill becomes law.

South London Reader

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