Industry matters: economic troubles

A “rocky” year ahead for the British economy.

Proletarian writers

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Proletarian writers

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The massive strike wave that engulfed France towards the end of 2007 served notice upon the French ruling class that their efforts at rolling back the welfare concessions originally won by workers in the post-war period would not succeed without a struggle.

To a degree, popular resistance was fierce enough in 1995 to push back similar attacks on pensions, pay and public services by Chirac. However, the crisis has continued to sharpen in the interim, so obliging the bourgeoisie to return to the fray.

The militant determination of many French workers to resist was an inspiration to workers everywhere, while the crippling rail and bus strikes pulled many other workers into strikes and demonstrations, including civil servants, teachers and Air France employees.


Meanwhile, the much-further advanced demolition of Britain’s own post-war welfare concessions goes on apace.

The first Remploy factory opened in 1946 in order to offer employment to disabled war veterans. There are currently 6,000 disabled people employed in 83 Remploy factories, but the company announced earlier this year that 43 of these will close.

After strikes were threatened, the government came up with a so-called ‘rescue package’, but it now turns out that as many as 2,000 jobs may still be at risk.

In the 1980s, the budget-driven removal of institutional support from the mentally ill, leaving many vulnerable people homeless and unprotected, was conducted under the ‘liberal’ banner of ‘care in the community’ – a wonderful idea if the necessary publicly-funded and community-based support had been in place!

Remploy management seem to be using the same ploy again, accompanying their demolition of jobs now with the vague promise of jam tomorrow in the form of getting more handicapped people into mainstream employment.

Again, this would be just terrific if all those glittering career opportunities were really coming over the hill. But that is not what the Chartered Institute of Personnel and Development (CIPD) sees on the horizon.

Jobs squeeze ahead

In fact, the CIPD warns that the UK labour market will contract to its worst level in a decade, and predicts a “rocky year” for the British economy, with energy costs rising and global growth slowing.

Their chief economist has said that “2008 will be the first year for a decade that the engine of job creation will be spluttering right across the economy. This will be the worst year for jobs this decade and easily the worst since the Labour government came to power in 1997.” (Guardian, 28 December 2007)

When we bear in mind that many of the jobs that were previously being created were in any case low-paid, casual, part-time or on short-term contract, and remuneration for existing jobs is worsening, we start to get a glimmer of the future for all workers in Britain – whether disabled or not.

Barber’s New Year Message: Crisis, what crisis?

Why is growth slowing? Because demand is faltering. Why is demand faltering? Because capitalism forces down the living standards of the proletariat – and so the overproduction crisis spirals on.

However, for the lords of the labour aristocracy, no such crisis exists. To give him his due, TUC General Secretary Brendan Barber did, in his New Year message to the social-democratic faithful, concede that “2008 may be a rocky year … prospects for the economy are distinctly uncertain. The full effects of the credit crunch triggered by irresponsible lending in the USA sub-prime mortgage market have yet to work their way through the economic system. Northern Rock has already been taken in its wake.”

This much of the imperialist reality has penetrated the Labourite skull. However, Barber is quick to reassure us all about the fundamental soundness of British capitalism, warning that “it is important that we do not talk ourselves into thinking the economic situation is worse than it is. The truth is that instability has not come from events in the real economy where people trade goods and services, but from the world of finance … The greatest threat would be to confuse the difficulties now being suffered by banks with the economic fundamentals.”

Jekyll and Hyde?

This crass pretence that casino capitalism and “real” capitalism spin down the road along parallel lines, never to meet under the sun, is such a hoary chestnut that even most bourgeois economists won’t touch it.

Why does footloose capital increasingly flood into areas of investment like collateralised debt obligations, futures markets, currency speculation, etc – areas that are ever-more remote from the direct production of commodities? It is because the inner contradictions of capitalist commodity production results in periodical crises of overproduction, where the masses are starved of the means of consumption because capital is starved of investment opportunities.

It is the failure of “real” capitalism to escape its own contradictions that sends surplus capital hammering on the casino doors in the first place. And the central lesson about the sub-prime mortgage scandal is precisely that there is no impregnable wall separating “real” capitalism from its gambling-addicted brother.

Barber cannot admit any of this, because to do so would at once reveal the remedies he prescribes as the worthless snake oil that they are. Even though the “real” economy is supposedly sound, “there are lessons to be learnt. For many years we have been told that over-regulation and red tape are the biggest barrier to economic growth. Yet the biggest threat to the world economy has come from a failure to regulate the US mortgage market, and its biggest victim here flows from a regulatory failure in UK banking system oversight. No-one should support outdated or over-bureaucratic regulation, but perhaps it’s time to celebrate the role that appropriate regulation plays every day in maintaining economic stability …”

In short, put a mild-mannered bouncer on the casino door and maybe capitalist stability will resume! However, the truth is that not even the rudest bouncer can reform capitalism out of its contradictions, and when those contradictions are expressed in acute crisis then all regulation goes to hell.

Not only are those regulations devised by a state whose sole reason for living is to enforce the social dominance of the capitalist class over all the toilers; it is also the case that, under conditions of sufficiently acute crisis, all social regulation dwindles to dust as the crisis becomes ungovernable.

Having delivered himself of the Big Lie on behalf of his imperialist overseers, Barber can then relax and shoot a few harmless Aunt Sallies to please the gallery. Tax breaks for the superrich are denounced as “bad for social cohesion” (upsets the servants), and putting the squeeze on civil servants’ pay similarly threatens to “damage an industrial relations system that has minimised conflict in the public sector” (might give the servants ideas).

Such harmless criticisms of the “unacceptable face of capitalism” (to quote ex-Tory PM Edward Heath) are taken in good part by Barber’s imperialist masters, who understand the purpose of a good escape valve for letting off steam.

Proletarian resistance

Meanwhile, however hard social democracy tries to build “social cohesion” with the class enemy and “minimise conflict” in class relations, the working class is still willing to put up a fight, given half a chance.

Drivers and guards on First Great Western’s network from London Paddington to all over the South balloted for strike action over “the routine use of managers to operate and guard trains” , although the strike planned for 20-21 January was subsequently suspended.

And even at the BBC, the propaganda wing of British imperialism, resistance is stirring. BECTU, NUJ and Unite are balloting for strike action against the loss of 2,500 jobs at the corporation. Having invited applications for voluntary redundancies, management are trampling on with compulsory redundancies regardless, taking the opportunity to get rid of faces that don’t fit whilst turning down volunteers deemed too productive to lose.

Before, the unions carried some clout on the labour market, haggling for the least-worst redundancy package and securing advances in pay and conditions on the back of shrinking staff levels. Now, the buying and selling of labour power is proceeding in a colder climate. All that wheeling and dealing by union bureaucrats seasoned by long exposure to Labour opportunism has done precisely nothing to prepare workers for the struggles ahead.

Break the link with Labour

The resistance of the working class to the crisis-driven attacks upon its wages, pensions and conditions of work will prove stoutest when it secures for itself a political leadership that shakes from its feet the dust of social democracy. Every move of the working class in the direction of breaking with the Labour party and its Trotskyite and Revisionist hangers-on needs to be both welcomed and seriously analysed.

Imperialism itself follows such developments with the greatest seriousness, as was evidenced when official papers released under the 30-year rule revealed how the Labour PM Callaghan called for Yorkshire miners’ leader Arthur Scargill to be “warned off” after he led a series of mass pickets in the Grunwick dispute, telling ministers that they were “not dealing with respectable unionism but rent a mob” and that “If things continue on the present basis there could well be fatalities and in circumstances which might be in danger of bringing the Government down.”

So concerned was MI5 that Graham Angel, an official at the Home Office, contacted No 10 and told Callaghan’s principal private secretary Ken Stowe that Arthur Scargill would reject calls by the TUC to halt the mass pickets.

It is a fact of life that the organisational break with the Labour party that Scargill subsequently led with the founding of the Socialist Labour Party (SLP) has long since come to nothing, owing to the inability of his faction to break ideologically with social democracy. The secret police can sleep a little easier at night as a result.

But such events as the disaffiliation of the Rail and Maritime Transport Union (RMT) and Fire Brigades Union (FBU) from Labour, and the recent refusal of Galloway to remain in the social-democratic embrace of the SWP after his departure from Labour, are developments which, though modest enough in themselves, all communists should be watching and analysing with no less eagerness than MI5 will surely be doing themselves.

There is no more urgent task for the British working class than to break the link with Labour, and no more chilling prospect for British imperialism.