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2002 - Capitalist crisis set to deepen

Build The Socialist Alternative

THE TRIUMPHALIST launch of the Euro on 1 January cannot disguise the massive problems in the world economy.

By Ken Douglas

The International Monetary Fund have had to downgrade their October 2001 World Economic Outlook report less than a year after forecasting the best outlook for decades:

"We now envisage a deeper and more prolonged global slowdown ... A particularly disturbing feature of the current slowdown is its synchronicity across nearly all regions - the most marked in two decades."

The US has had its largest fall in output since the 1930s. Economic growth in Japan, the world's second largest economy, is predicted to fall for the second consecutive year and unemployment is at an all time high.

In Argentina, now on its fifth president in two weeks, 2,000 people fall below the poverty line every day. New president Eduardo Duhalde blames free market policies for the economic crisis but crises are endemic to capitalism and it is always the workers and the poor who end up paying the highest price.

Opposition to the effects of the world economic crisis is growing. Argentinian workers have taken to the streets in mass protests to kick out failed and corrupt capitalist politicians. In Brussels on 13 and 14 December 80,000 trade unionists and 30,000 anti-capitalists showed their opposition to the bosses' EU.

Italian workers have demonstrated in their hundreds of thousands against the policies of the Berlusconi government. In France even the Gendarmerie have taken to the streets.

But being against capitalism is not enough - workers need a socialist alternative. As one young Argentinian protester put it: "We had a revolution but all we got is more of the same."

If workers in Argentina and elsewhere replace one capitalist government with another then their misery will continue.

We need to build that socialist alternative. We need to lay the basis for mass socialist parties that will enable working class people to get rid of capitalism world-wide and replace it with a system that will provide everyone with the necessities of life and the chance for a decent future.

 

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Argentina: Capitalist Crisis Intensifies

"WE ARE hungry; we want food!" chanted the demonstrators who braved police tear-gas and rubber bullets as they marched on the Argentinian congress building.

Disgusted by the corruption of the ruling class and desperate to end their economic misery Argentina's workers, unemployed and middle classes of this once prosperous country have taken to the streets, gone on strike and broken into supermarkets.

As the crisis deepens Argentina's rulers are changing presidents faster than the Peso is devaluing on the black market. The latest, Eduardo Duhalde, admitted the failure of the capitalist profit system. "Argentina is worn out, the country is broke. The current economic model destroyed our middle class, destroyed our industries and pulverised our workforce."

Hours after his inauguration a demonstration of thousands showed their contempt by jeering the new president.

Capitalism in South America's richest economy is on its knees: a three-year recession, an unrepayable $132 billion debt, 20% unemployment, cuts in salaries, pensions and social services. Some 2,000 Argentinians are swelling the ranks of the poor each day.

Three finance ministers (and now four Presidents!) have tried and failed to solve the crisis. The previous President, Rodriguez Saa, resigned after serving just one week, citing the impossibility of reforming the country's bankrupt economy.

Political vacuum

The previous finance minister, Cavallo, had imposed savage spending cuts including a "zero deficit" law (i.e. government spending cannot exceed tax revenues) in a desperate attempt to maintain payments on the foreign debt which makes up 45% of gross domestic product, and to demonstrate to the International Monetary Fund that his monetary discipline be rewarded with a fresh $1.6 billion loan.

As the crisis worsens, a political vacuum has opened up. If a party existed with a clear revolutionary programme and strategy, Argentina's working class, pulling behind it the middle classes, could now have been in power.

A socialist government that repudiated the foreign debt, nationalised major industries and ended the power of the ruling class would have not only begun the process of improving living standards but also acted as a beacon of hope throughout the capitalist blighted continent.

Before resigning, Saa put forward a 'rescue' package for the economy. He suspended (but didn't repudiate) payments on the foreign debt and said he would use the money to create one million new jobs.

Duhalde has also promised to create one million jobs and a social 'safety net' for the unemployed. Whether such populist reforms will be implemented is highly questionable given the pressure of international capitalism. (Although the US dominated IMF appears not to want to provoke more social unrest by insisting on a immediate resumption of payments.)

Saa had also announced a new currency - the Argentino - to exist alongside the dollar-pegged peso.

This measure would enable the payment of public salaries through tax revenues but delays the thorny question of whether to uncouple and devalue the peso from the dollar. As most savings and private debts are in dollars then this could financially ruin millions more Argentinians overnight.

Next week, eyewitness report from Buenos Aires

 

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India/Pakistan conflict

Only Socialism Can End the 'Madness Of War'

GLOBETROTTING TONY Blair has jetted off in a bid to avert a looming military conflict between Pakistan and India. But it is the US-led Afghan war - backed by 'lieutenant' Blair - that has further destabilised central Asia, risking an India/Pakistan war.

IN THE most serious conflict between the two nuclear powers since the Kargil mountain war in 1999, both the Indian and Pakistani ruling classes have put their countries on a war footing.

Over the European holiday period dozens of lives were lost in cross-border skirmishes. Tens of thousands of poverty stricken Indians and Pakistanis workers and peasants have fled villages in the border areas.

A new regional war (there have been three since independence from Britain in 1947 - the last one in 1971) could escalate from using conventional weapons to an exchange of nuclear bombs, killing millions in both countries and in occupied Kashmir.

This deadly scenario has alarmed Western imperialism. Under US pressure, Pakistan's dictator General Pervez Musharraf has arrested Hafiz Mohammed Saeed, the head of the Pakistan-based Lashkar-e-Tayyiba Islamist group.

These militants are suspected of involvement in the suicide bombing attack outside the state legislature in Srinigar, Indian Occupied Kashmir, which killed 38 people and the 13 December attack on the Indian Parliament in Delhi which left 14 dead.

The Indian coalition government has taken advantage of the new power relations in the region since the US-led war against Afghanistan in its response to the bomb attack on the Parliament. The Pakistani regime has emerged from that conflict in a weaker position.

But while the US and British governments are hoping they can defuse tensions between India and Pakistan at this week's regional summit, India's Prime Minister AB Vajpayee has increased the stakes by demanding that Musharraf arrest and hand over to India 20 'terrorists'. (Vajpayee's BJP-led governing coalition is determined to beat the drum of Hindu chauvinism ahead of important regional elections.)

Wasted resources

Musharraf has subsequently arrested 50 members of 'Jehadi' Islamic groups. But if Musharraf is forced to make too many concessions then he could be removed by more hardline Islamic elements within the military which would make another Indo-Pakistan war even more likely.

The spiralling of military spending in both India and Pakistan alongside the existence of mass poverty is an example of the sickness of capitalism at its most obscene. 370 million people in India and Pakistan live on less than $1 a day. Between 1990-96 the governments of these two countries wasted $70 billion on arms compared to only $12 billion spent on education.

This latest conflict is a continuation of the decades long struggle by both the Indian and Pakistani ruling classes to control Kashmir and to dominate the region. In Indian Occupied Kashmir the Indian rulers have resisted demands for Kashmiri self-determination and act as a brutal occupying power. Likewise in Pakistan Occupied Kashmir the Pakistan ruling class oppresses the working class.

With the military build-up on both sides of the border some political observers are predicting a descent into war. This will have severe implications for markets and the profits of big business but above all it will be the working masses who will pay a hefty price.

As a Kashmiri socialist recently explained (Socialism Today, July/August 2001): "The only durable solution to the madness of war hanging over the masses of the subcontinent, the poverty, hunger, disease, and oppression, is to overthrow capitalism and feudalism. This struggle would have to be linked with the struggle for the national liberation of the Kashmiri people for a united, independent and socialist Kashmir, as part of a voluntary federation of socialist India and Pakistan."

The task facing socialists in the sub-continent is to build mass working-class movements based on these ideas.

 

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Brussels demos:

Marching Against Capitalism And War

ON 13, 14 and 15 December 2001, workers and young people from all over Europe converged on Brussels in their thousands to protest at the European Union (EU) summit. What happened over that weekend shows the kind of struggles which could develop in 2002 and how support for socialist ideas could grow.

OVER 25,000 took to the streets of Brussels on 14 December in the first major anti-capitalist demo since the attacks in the US and the war in Afghanistan. Despite the bitter cold there was a carnival atmosphere with music and speeches broadcast from lorries at the head of each group.

International Socialist Resistance (ISR), International Resistance and the Committee for a Workers' International (CWI) which the Socialist Party is a member of, had the liveliest - and best organised - contingent on the demo. We had 800-1,000 members and supporters from all over Europe and from the USA, Canada, Australia, Russia and South Africa.

With speeches and chanting in Dutch, French, English and German and all wearing our red CWI vests we made quite an impression on the rest of the demo and the people who lined the streets.

Many stayed with us not just because of our size but also because of the very professional stewarding. At one stage, the police had blocked off every exit and it not only looked as if we were to be penned in but also soaked with water cannon and worse. However they then allowed us through in small groups.

The CWI meetings after the demo were packed out. Many joined the CWI and ISR on the spot and came to the conference the following day.

By Rob Crowhurst

Angry Workers' Show Of Strength

THE 100,000-strong turnout on the trade union demonstration will give a mighty impetus to European workers' confidence in their own strength. Tens of thousands came from all the countries of Europe as well as a massive presence from the Belgian unions themselves.

By Bill Mullins

Decked out in their union colours they made a lasting impression on those who attended. Car workers, engineering workers, metal workers and public sector workers flocked to Brussels.

They were there, whatever their leaders tried to say, to protest at the threats to their jobs and living standards. Union general secretaries from around Europe made speeches about wanting a "social Europe", asking the capitalist governments to include concessions to the unions in their deliberations.

But the demonstrators themselves reflected a mounting wave of anger at the growing list of companies declaring redundancies and mass sackings.

Sabena airline workers, brutally thrown out on the stones by the company's bankruptcy after 11 September, were demanding that the Belgian government take over the company and protect their jobs.

Tens of thousands of French metal workers demanded that the EC stop the threat to their jobs. Thousands of German car workers and engineering workers protested against wage cuts and other concessions forced on them by the bosses.

Trade unionists from Lisbon to Stockholm, from Slovakia to Poland and beyond marched together in a tremendous show of solidarity.

If the union leaders had demonstrated one-tenth of the confidence of their members then Europe's capitalist leaders could not keep on with their programme of deregulation, privatisation and job cuts. They would be forced into an inglorious retreat by this show of strength.

If for example the workers' leaders had called a one-day general strike in the city of Brussels alone to match up with the demonstration, there is little doubt that workers in this European capital would have answered the call.

Instead at the end of the demo (when workers were still setting off from the main square when the front ranks had reached the end three miles further on) the union leaders gave speeches "saying nothing in 15 languages". It really was a case of workers being led up the hill to be marched down again.

Not one union leader said what should be done next. They magnanimously thanked the demonstrators for coming and wished them "bon voyage" on their way home. It will take an earthquake to wake up the trade union leaders to do anything else, but that is exactly what is coming.

 

ISR conference

Build International Socialist Resistance

ON SATURDAY 15 December, over 500 young people attended the founding conference of International Socialist Resistance (ISR), including about 100 from England and Wales.

By Clare James

Following the brilliant demonstration the day before, the conference took place in the French-speaking university in Brussels, and the booked meeting room was too small for the huge turnout.

The conference started with an inspiring rally including reports from all over Europe on what the new ISR branches have been doing. Members from the North and South of Ireland reported on their work against low pay and campaigns they are running with young people from schools and workplaces.

Members from Germany, Britain and Belgium gave examples of campaigns against cuts in education, against racism and cuts in youth services and explained how many young people in their countries were becoming active against the war in Afghanistan.

Then the conference broke up into very successful workshops on the environment, education, anti-capitalist campaigning work and youth rights.

The conference ended with proposals for the name and platform of ISR, which were overwhelmingly carried with only a few votes against and one or two abstentions. Delegates' speeches highlighted the misery that capitalism inflicts worldwide.

In South Africa pregnant women with HIV and AIDS have been denied drugs to prevent infecting their unborn children as their survival would be a burden on the state.

CWI member Joe Higgins, an Irish TD (MP) said just £40 billion would meet the additional cost of ensuring that every man, woman and child on the planet had access to adequate food, safe water, sanitation and basic healthcare and education. This is less than 4% of the combined wealth of the 225 richest people.

ISR will build international action to oppose capitalism and raise socialist ideas. One proposal was to have an international student action in May when education ministers are meeting in Spain.

It was also decided to have follow-up meetings to build close links in the International Resistance movement.

ISR was initiated by the CWI (Committee for a Workers International), to which the Socialist Party in England and Wales is affiliated.

ISR is an independent, broad and democratic organisation, open to anyone who is against this capitalist system of poverty and inequality. We fight for a democratic socialist society based on need and not greed. If you are not already a member please join - get active and help build International Socialist Resistance.

Address: ISR, PO Box 858, London, E11 1YG

Tel: 020 8558 7947

email: againstcapitalism@hotmail.com

Website: www.notowar.org

International Website www.resistance.eu.com

 

"THIS WAS the first European demo I've been to and it was really inspiring to find very like-minded people, who were interested in the same issues as me. I think we've done really well building up the movement that we have done through organisations like the CWI and ISR. I thought the demonstration was good. We had a great contingent out there and on the whole it was very peaceful and we definitely got our point across very well." Duncan Torrance "I THOUGHT the demo was absolutely massive, I couldn't quite believe it. I think the conference was really good and it's inspired me to go back and build ISR." Nadine "I WASN'T expecting the demonstration to be so big. It went very well especially the CWI contingent - I was at the front and I looked back and it was quite impressive." Sam Hunt

 

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2002: Capitalist Crisis - Workers' Struggles

AT THE start of a new year, PETER TAAFFE, general secretary of the Socialist Party, asks will the recession last? Will the workers move into action? What are the prospects for 2002?

"LETTER TO Santa Claus may be laced with Anthrax"  (warning from United States Postal Service)

WHAT A fitting epitaph to 2001, a truly 'annus horribilis' for the whole of humanity! Last year will be etched into the collective consciousness by 11 September and its aftermath - the slaughter of innocents, not just in New York but also in Afghanistan, Gaza, the West Bank and Israel.

In an especially poignant moment, as the stricken Twin Towers began to disintegrate, a spaceship with an international crew (the International Space Station) happened to pass over New York and witnessed and photographed the unfolding carnage below.

In that incident alone is encapsulated the choice which confronts the peoples of the world. Together, we can harness and develop science, technique, and the organisation of labour on a gigantic scale which would eliminate the poverty and oppression which created the conditions for 11 September. Or the products of the genius of humankind can be misused to create a world of horror without end.

The choice is not between 'evil' or 'good' as George Bush or Tony Blair pretend. It is between outmoded rotten capitalism - which will be a world 'war without end' according to US Vice-President Dick Cheney - or a determination to share the resources of the planet for the benefit of all. This can only be fully achieved through world democratic socialism.

Paradoxically, 11 September bound the world together with iron hoops like no other event before. Amidst the poisonous fumes of war and mass terror the idea that we live or we perish together, that oppression or persecution in one part of the world touches us all, took hold.

Even in the US - a continent sized "island" whose population was led to believe they were immune to outside events - a questioning has begun about the role of the US government internationally; "Why is the US is hated so much?"

This mood will endure and grow in this year and in the future. This will happen despite the triumphalist rampage of US imperialism through Afghanistan, which may be followed by further ruthless incursions against Iraq and other 'failed states'.

Big events in the this year and beyond - above all in the economy, and their reflection in the field of politics - will shake to its foundations the newly acquired confidence of world capitalism. This is especially true of the 'victorious' ruling classes of the US and Britain.

Last year, the United Nations warned of a "vicious circle of downward adjustment" rippling out from the battered US economy to the rest of the world. That was confirmed in December with the drop in US output, "almost three times faster than earlier estimates" [The Guardian, 1 December 2001].

It was the biggest drop in output since 1991 in the midst of the last recession. White House spokesperson Ari Fleischer even declared: "The president is troubled by the fact that the economy has shrunk again".

This was followed one week later by revised figures showing that there had been 330,000 job losses in November - 100,000 more than expected - with revised figures for October of 468,000 redundancies. In services, where most Americans work, 70,000 lost their jobs, with amusement parks alone down by 25,000.

These represented "the worst two-monthly period for American jobs in twenty years". Moreover, according to the economists at Morgan Stanley, "profit margins have suffered their biggest drop in 50 years and so in one sense it is no surprise that the response to this is restructuring and cutting jobs".

Simultaneous recession

PERHAPS THEN, Europe and Japan will take up the 'slack' created by the downturn in the US. Yet, in Japan unemployment has climbed to 5.4% of the workforce, the highest levels ever recorded. Japan is mired "in its second recession for three years", says The Guardian [8 December].

In reality, Japan has suffered from a decade-long depression - a general stagnation in production - with minuscule growth in the economy in just a few years. Now it is unemployment, a dramatic rise in homelessness, cuts in wages (by 15% to 20% for those over 51 years of age), slashing of bonuses and a lowering of hourly wage rates, which are the order of the day.

The country's massive and spiralling debt is now more than 130% of gross domestic product. In the last decade the Japanese ruling class have postponed the day of reckoning, preferring to pile up debts rather than carry out savage retrenchment and brutal attacks on the Japanese working class.

That now appears to have come to an end as they steel themselves to close banks and factories and ruthlessly rein in the Japanese workers. The working class of Japan, which has a long history of struggle but which has been relatively dormant in the past period, will revive and move into action.

Big battles in defence of jobs, a revival of trade union struggle and above all a generalised opposition to capitalism are posed in Japan in the next period.

The same thing goes for Europe. Industrial output in Germany, Europe's economic powerhouse, contracted by 2% in October. The OECD has now warned that eurozone unemployment "would rise by 700,000 to 12.5 million next year and reach almost nine million in the United States, implying savage job cuts to come" [The Guardian 1 December].

At the same time, Canada has become the fourth of the seven major economies to post a record decline in output in the third quarter, its first in nearly a decade.

The International Monetary Fund has recently defined a world economic recession as growth of less than 2% internationally, given the rise in the world's population. Clearly, the powerful "triad" of world capitalism, the US, Japan and Europe, are in a simultaneous recession and this will deepen this year, thereby plunging millions of workers and poor peasants into even greater poverty and misery.

The International Labour Organisation estimates that this year a minimum of 24 million workers will be thrown out of their jobs. This will add to the one-third of the world's labour force which is either unemployed or underemployed at the present time.

And this is a system which the capitalists, in their Panglossian world, extol "as the best in the best of all possible worlds". Tell that to those in Eastern Europe, such as the Czech workers, who were promised in 1989 US living standards.

The Czech members of the Committee for a Workers' International retorted at the time: "Yes, via Bangladesh". The reality of capitalism for those in Eastern Europe and the former Soviet Union is shown by the figures from the UN which says that "nearly 18 million children in this region are living on less than $2.15 (£1.50) a day - a World Bank yardstick for poverty" [The Independent, 20 November].

Crisis of capitalism

DEFENDERS OF world capitalism like Blair, in his 'sermon by the seaside' at last year's Labour Party conference in Brighton, offer to transform the world within the confines of this system.

Dubbed by a former US ambassador to Britain as the 'president of the universe', Blair almost promised that he alone, with a walk-on part for Bush, would bestride the world scene, abolishing poverty, economic crisis, war and oppression wherever he went.

But devastating crises are not an 'act of God'. Poverty and oppression are not unnecessary, accidental features of capitalism. They flow from the very character of the system. Its driving force is profits, which come from the unpaid labour of the working class.

There are many factors which can lead to or trigger a crisis in capitalism - such as the tendency for the rate of profit to fall and a sudden drop in profits.

However, the ultimate contradiction of this system is that the working class cannot buy back the full value of what they produce. What Marx called "surplus value" - profits - is that part which is appropriated by the capitalists. However, this contradiction - the working class not being able to buy back the full value of their product - is temporarily overcome by the capitalists reinvesting back into production.

For a time, the economic cycle once more goes forward but then reaches a saturation point - a market glut of unsaleable goods - which Marx described as "overproduction". This is accompanied today by "overcapacity".

Part of industry lies idle because the working class and the middle class, with stagnant or even contracting incomes, cannot buy back the goods which they produce. Hence the cycle of boom and bust, which like poverty, national oppression and all the other ills which beset humanity, are organic to capitalism and cannot be 'reformed' away.

The economic day of reckoning can sometimes be postponed on the basis of an injection of what Marx called "fictitious capital" - massive borrowing which was a feature of the 1990s. The result is a huge piling up of debt; national debt as the case of Japan shows, corporate debt and personal debt.

The US consumer for a time provided a lifeline for world capitalism, by buying the goods of the rest of the world. But this was at a huge cost of borrowing and debt. The inevitable recoil is now taking place, reinforced by 11 September. The tendency now is, it seems, to retreat to "nesting" - not flying as much as usual, remaining at home instead of shopping, etc.

This appeared to be cut across in the pre-Christmas shopping spree in the US and particularly in Britain. This has even led to a renewed capitalist 'confidence' - in the teeth of the evidence to the contrary in the real economy - that the "worst is over", and the revival of world capitalism is under way.

There has even been an upturn in the US stock markets, with the Dow Jones Index on Wall Street rising above 10,000 points once more. There is even hope that the NASDAQ and technology stocks, which have slightly risen recently, will once more zoom into the stratosphere.

In view of the present historically low returns on deposits kept in banks, undoubtedly some of the speculators have once more tried for quick returns from equities. However, they could be burnt even more savagely than during the collapse of the last two years. Such blips as we are witnessing in the US and British stock markets today are not uncommon.

Many times in the past a temporary upsurge in stocks can take place, and yet the curve of capitalist economic development is stagnant or even downward. Similar upsurges took place even after the 1929 Wall Street Crash but it did not save the US or world capitalism from the most devastating slump in world history.

Workers' resistance

THE MORE serious capitalist economists are in no doubt when they discuss perspectives for the economy, at least in the short term. Experimenting with the "economic alphabet", they have chosen between a 'V'-shaped recession, in which the downward side resembles a very sharp, fast and deep ski slope.

Or they look at an 'L', similar to the depression in Japan of the past ten years but on a world scale. The more hopeful have recently looked towards a 'U'-shaped recession, of a drop and a lengthy 'bottoming out' before the economy begins to climb again. Because capitalism is not a planned system, but works blindly, it is not possible to accurately predict the speed or scale of economic events.

However, it will be the working class which will pay the price of this crisis, no matter what its character or length will be. They will not tamely lie down and accept the bosses onslaught against them.

Even as the economy sinks and declines, Europe has been marked by workers' resistance, symbolised by the mighty demonstrations in Brussels. This has dashed the hopes of the capitalists that the post-11 September mood would squash the anti-capitalist movement.

No one should allow 11 September to blot out the balance sheet of the last year; the magnificent demonstration in Gothenburg, followed by the titanic movement of the Italian workers - supported by international detachments of workers and youth - in the battle of Genoa.

The turnout of the Italian workers, led by the metalworkers and Rifondazione Comunista, was given added impetus by the coming to power of the right-wing Berlusconi government. This government has sought to attack the working class by removing obligations on employers to reinstate sacked employees if an industrial tribunal deems they have been unfairly dismissed.

They have also attacked pensions and other parts of the "workers' statutes" - the cornerstone of Italian labour law. The anger of the working class has merged with the enormous anti-war movement, such as the massive 300,000 who marched to Assisi in October.

Two-hour national strikes have been called in protest at the government's plans and the mood is building within the unions for a one-day general strike throughout Italy.

It is not lost on Berlusconi that it was a wave of strikes which defeated his last 'pension reform' and brought down his seven-month coalition government in 1994. The same scenario could be played out in Italy in the next period. But Italian workers will be sceptical of a return of the discredited 'Olive Tree' coalition, whose failure led to the resurrection of Berlusconi.

The strikes of Italian workers, accompanied by the magnificent strikes of school and university students, signify the re-emergence of the Italian working class who will be looking for a socialist alternative to the discredited capitalist parties.

A similar strike wave gripped France in the latter part of last year and will be carried over into this. Following an unprecedented wave of public protests by the paramilitary gendarmerie, big concessions were made on jobs, wages and working conditions.

This movement was preceded by earlier protests by hospital workers and other public-sector workers such as prison officers contemplating strike action over the introduction of the 35-hour week.

In Germany also, the powerful IG Metall engineering union is demanding significant pay increases, which will meet with the resistance of both the employers and the German government. Spain has also been convulsed by strikes of workers, and a massive strike and demonstration of students over Aznar's right-wing government proposals to attack state education.

Britain: capitalist crisis - workers' struggles

BRITAIN, AND the British workers, will not be immune from similar processes. Various pundits, such as Mervyn King, Deputy Governor of the Bank of England, puts Britain's chances of "going through recession" as one in ten. But even the most 'pessimistic' economists have speculated that the odds are no more than one in four.

In this fools' paradise, in which sections of British capitalism live, Britain will be an island not just geographically but also economically. Paradoxically, it is the very weakness of British capitalism which has meant it has not been as seriously affected up to now. Manufacturing industry, which is in a deep recession already, will shrink to no more than 16% of the whole economy.

This weakness, together with the high value of the pound - which could drop quickly and dramatically - has meant that British manufacturing exports have been slaughtered in world markets. Indeed, exports in this sector are at a 21-year low.

Manufacturing, and particularly manufacturing exports, is still crucial as the experience of Germany and even the US demonstrates. Knowledge-based services account for only a fraction of total export earnings; less than a third of receipts for manufacturing exports and only a quarter of domestic expenditure on manufactured imports in the year 2000.

The falling behind of enfeebled British manufacturing capitalists is shown in manufacturing labour productivity, which has grown, while output is almost stationary.

US firms produce almost twice as much with the same number of workers as they did in 1973, whereas British firms produce almost the same as before with only half as many workers. In other words, the so-called 'productivity miracle' of British capitalism is largely based on sweated labour, lower wages and worse working conditions.

Now it's not just exports which have collapsed, but income from abroad and inward investment - which has bailed out the economy - is drying up. One result is a big increase in redundancies in formally solid companies such as BAe, Waterford Wedgwood, GKN, chemical companies involving thousands of workers, and Rolls Royce.

As many as 30,000 workers in Consignia (the former Post Office) face being emptied out of their jobs in the next period. The benefit workers' strikes could be repeated in the Post Office and other sectors of the economy, such is the rising anger of the British working class.

Indeed, if they had a leadership in the trade unions at national level which was equal to the task, a strike wave on a higher scale to France or Italy would loom in Britain at the present time.

Transform the unions

DICKENSIAN CONDITIONS in the workplace and elements of the third world in the areas where they live or work; this is the lot of millions of British workers. Even the Chairman of the Labour Party, Charles Clarke, admits that the waiting lists for hospital appointments are longer now than when Labour came to power in 1997.

A leading surgeon is incredulous at the conditions in most hospitals and has said that this is the prospect we face for years to come. Alan Milburn's decision to allow patients to travel abroad for operations and his programme for privatisation in the health sector is a confession of bankruptcy.

In Germany, for instance, there are no waiting lists at all for hip operations or knee replacements. In reality, most people would still prefer to be treated locally, close to their family and loved ones.

The transport system is described by the government's own findings as "the worst in Europe", which will be compounded enormously if Blair allows the discredited privatisation of the tube to go ahead. In despair, The Mirror's political editor, Paul Routledge, declared: "We invented railways - now they are better in Bolivia than in Bradford".

Brown and Blair's "lifeboat Britain" - which they envisage will keep them afloat in the stormy economic seas which loom - will be found to have holes. Joblessness and poverty will increase, and with it will grow the anger of the working class.

The year 2002 could see the British workers begin to rediscover the fighting traditions of the past, fill out the trade unions and demand that the trade union leaders put up a struggle against the bosses and government offensive. From below, the unions in Britain will begin to be transformed into instruments for the working class to defend past gains and future conquests.

This will be through the emergence of new, fresh layers of young workers in particular who will be driven into seeking action by the blind alley of the bosses' system and those who defend it.

No such transformation, however, is possible in the Labour Party. Not just its leadership but at every level the Labour Party has been transformed into a capitalist party. Even Nigel Lawson, Thatcher's Chancellor, could declare recently that Blair espouses "Thatcherite conservatism - dressed up in Clintonesque rhetoric". It takes a Thatcherite to know one!

Socialist alternative

The defection of Paul Marsden to the Liberal Democrats - the first such move of a Labour MP since the SDP defections of the early 1980s - symbolises the rotten character of the Labour Party under Blair's tutelage.

Marsden can pass from New Labour to the Liberal Democrats with as little difficulty as former Taliban switching from support for bin Laden and Mullah Omar to the side of the Northern Alliance by changing the colour of their turbans. If anything, the Liberal Democrats are perceived by many as slightly to the left of New Labour!

The sleazy corruption of New Labour (which the Socialist Party predicted when it abandoned Clause Four, which was its adherence in words to socialism) has deepened in the past period and will grow in the next.

McLeish in Scotland, Robinson, more Scottish MPs, and who knows what further revelations of sleaze and corruption - all these show just how far Labour's leaders, councillors and officialdom are removed from the original ideals of self-sacrifice of the pioneers of the labour movement in Britain.

It is certain, however, that New Labour will be convulsed given the likely development of events in Britain and worldwide. Further defections, only more serious than Marsden's, are possible. A division already exists between Blair and Brown, who has been promised the 'crown' if and when the 'king' abdicates.

This, together with clashes over the Euro, could mean that the fault lines in New Labour could grow into a chasm. Splits within New Labour, largely on secondary and personal issues, nevertheless could encourage opposition to their programme and methods.

The ground is being ploughed in Britain and worldwide for the development of alternative ideas to those which have been tried and have failed: right-wing conservatism, the so-called 'Third Way' and Keynesian ideas, as shown with Japan. The growing anti-capitalist movement could gain renewed vigour this year.

Out of this and movements amongst the 'heavy battalions' of the working class, support for the ideas of socialism will grow. The knot of history was broken to some extent by the collapse in Stalinism in 1989-90 and the mood of market triumphalism which followed.

This knot will be retied in the mass struggles of the working class, of solidarity and socialism, which will be back on the agenda in the next period.

 

The Socialist 4 January 2002  [Top] [Home] [News] [The Socialist] 

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