Perspectives for Britain 2017
1. Britain in 2017 is crisis-ridden and unpredictable. The reasons for the increased instability are, at root, the consequences of the capitalist crisis, including the hollowing out of support for all the institutions of capitalism, and the political earthquakes that took place in 2016. First and foremost this was the vote for Brexit, but also the anti-austerity wave that flooded into the Labour Party in defence of Jeremy Corbyn, giving Labour the biggest individual membership of any political party in Western Europe. The Socialist Party has responded effectively to the events of 2016, and are now well-placed to intervene in the new eruptions which can take place in the coming year.
2. For decades prior to the 2008 world economic crisis the wages of many workers in Britain stagnated, with cheap credit the only road to a seeming increase in living standards. After 2008 the working class suffered the hardest squeeze on wages since the nineteenth century, from which it has still not recovered. At the same time there has been a sustained attack on working conditions. Much has been written about the supposed demise of the 'working class'. In fact, while the number of manufacturing jobs has continued to decline (although the industrial working class - while small numerically - has enormous potential power), what is being created is the antithesis of a new, prosperous middle class. Instead ever greater numbers are being forced into low paid, insecure work. Even though the majority have not yet fought back via collective action, this is the only road by which their living conditions can be improved. Small, but important struggles of precarious workers - including Uber and Deliveroo workers - are a glimpse of the battles that will erupt in the future. Although the overall level of strike action remained low in 2016, there was an increase in the ferocity of the largely defensive workplace battles that took place - both in the determination of the employers to defeat the unions and in workers' preparedness to take prolonged, even indefinite action. This has been shown by the Southern train strike. It is also a harbinger for the future. The introduction of the Trade Union Act, shamefully with no serious opposition from the TUC, is designed to make the organisation of national strike action extremely difficult. Without doubt the right-wing trade union leaders will attempt to use this as a reason to avoid action. In the short term this is likely to have some effect in limiting the number of national strikes. However, it will also - at a certain stage - backfire on the capitalist class, leading to more militant and determined strikes, sometimes reaching the thresholds demanded, but also increasingly in defiance of the law. In the future battles in defence of unions threatened with legal action for breaking anti-trade union laws could erupt on a massive scale, effectively making the anti-union laws null and void.
3. Today male weekly earnings are still below 2005 levels in real terms, while female weekly earnings have crept up to 2005 levels but are still lower than they were in 2010. This miserable reality is made worse by the huge increase in the number of workers in insecure work; estimated by UNITE to be above 5 million. Workers on zero-hour contracts, for example, lose an average of £1,000 a year compared to those on secure contracts. Wage restraint; together with the savage cuts to public services, soaring housing costs and growing inequality have been creating the conditions for mass revolt against the existing order. By midday on Wednesday 4 January the average FTSE 100 boss will have earned as much as the average worker earns in a whole year.
4. The year 2016, written off as a disaster by the liberal media, in fact saw a mass revolt against the existing order in the form of the Brexit vote. The more thinking representatives of the capitalist class fear that this could just be a foretaste of much bigger revolts to come. That is what Mark Carney, governor of the Bank of England, was warning of when he talked of the 'frustrated and frightened' 'becoming disillusioned with capitalism'.
5. Carney and his ilk are rightly concerned that a new economic crisis could be the trigger for further more wide-reaching revolts. While a new economic downturn, globally and in Britain, is inevitable it is not possible to predict the timing of either, which could be triggered by numerous financial, economic or political events. Worldwide the underlying sickness of the system is indicated by low growth rates and even lower world trade growth. In a world of ailing economies the weakness of British capitalism leaves it particularly vulnerable. As tensions between the different major capitalist powers increase Britain, a second-rate power, will tend to lose out to others. Britain's productivity has long lagged behind other major economies; but the gap has now reached Grand Canyon proportions. The gap with the G7 average is 18%, with Germany 35% and the US 30%. The weakness of the UK economy, and particularly its manufacturing sector, has limited its ability to take advantage of the slide in sterling with more competitive exports. At the same time the increased costs of imports has already led to some increase in prices for consumers, and is likely to lead to more in 2017. While inflation remains at relatively low levels by historical standards any increase can hit workers hard, given the huge level of personal indebtedness. Levels of unsecured personal debt are now approaching the record levels they were at before the 2008 crash.
6. The effects of the Brexit vote, and Brexit itself if it happens, are also destabilising factors in the UK economy. Clearly, from the point of view of the capitalist class, there are major economic disadvantages to being outside the EU, particularly if this means leaving the single market. For the working class only a socialist Brexit, linked to the struggle for a socialist confederation of Europe, would mean a real improvement in the living standards of working class people. A capitalist Brexit, on the other hand, will mean a continuation of growing inequality and impoverishment just as the working class has suffered in a capitalist Britain within the EU.
7. Fearing revolt when May came to power her government verbally shifted tack from brutal austerity to promising more Keynesian policies, particularly investment in infrastructure. So far, however, they have delivered nothing but warm words and continued misery; going ahead with further austerity measures including attacks on benefits and massive cuts to the NHS via the introduction of STPs. At this stage it is clear the chancellor, Philip Hammond, is attempting to blame new austerity measures on the Brexit vote in the hope of shifting public opinion against it. It would be difficult for any major capitalist power to implement Keynesian measures on a scale sufficient to have a real effect on the economy. Doing so would add considerably to the already high level of government debt, most of which would never be repaid. There would be a real risk that the markets would immediately punish countries that attempted to seriously 'prime the pump'. Nonetheless, this does not preclude, in the face of a new stage of the economic crisis in Britain, the government being forced to take more classical Keynesian measures in order to defend their system. The 'tool box' used to respond to the 2008 crisis - QE and the other 'Keynesianism for the rich' - has largely reached its limits. Such Keynesian measures, however, would also not solve the underlying crisis of capitalism.