The Socialist Issue 154April 21th 2000 |
Market Mayhem |
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IT’S BEEN a rough week for the capitalist bosses. Firstly, 10,000 protested in Washington against the World Bank and IMF’s exploitation of the Third World Editorial: The first rush of
the storm. IT WAS almost inevitable that as the
International Monetary Fund (IMF) gathered in Washington to issue its upbeat
forecast for the world economy, the biggest stock market panic since 1987
followed. |
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TEACHERS ACROSS the country have angrily rejected
New Labour's plans for Performance Related Pay (PRP). This weekend's National
Union of Teachers (NUT) annual conference must now give a clear lead to the
fight against these divisive plans. |
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Go to Special feature on the Socialist Party’s
national site |
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Last
Saturday police arrested and charged dozens of striking Los Angeles janitors
and their supporters who had blocked a road junction. This 2000 strong was
part of the Janitors struggle for better pay |
Protests grow Against Market Mayhem
IT'S BEEN a particularly rough week for the capitalist bosses. Firstly, 10,000
protested in Washington against the World Bank and IMF's exploitation of the
Third World.
Then stock markets lost £2 trillion in share values world-wide in what the
financial press wrote off as "the jitters". In fact, the stock market
falls show that the bubble of the world share boom is bursting.
Rich investors may shrug off £2 trillion losses. But the capitalist system
already keeps half the world's population close to starvation. Some are dying
from lack of food.
Thousands protested in Washington against this poverty amidst wealth. Millions
more are losing any faith they had in the bosses' system and in capitalist
globalisation.
And that number will grow. In Britain, New Labour chancellor Gordon Brown was
the darling of the IMF when he was refusing to spend a penny on vital public
services. He was following IMF policy.
But when fear of losing workers' votes made Brown spend more on the NHS and
education, the IMF gave New Labour a public dressing down. The priorities of
capitalism and the needs of workers are on a collision course.
Even before the bubble bursts completely, the bosses threatened tens of
thousands of West Midlands workers with redundancy for not making enough
profit. If we let this system continue, many more jobs will be threatened.
But why should workers pay for capitalism's failures? During the 'boom' the
bosses made themselves rich, behaved like tyrants and exploited the world even
though millions died as a result.
Now if companies threaten closures or sackings we say, let's see their
accounts. What have they done with the huge profits they made from our hard work?
If the money's still there, the workplace should stay open - not one job should
be lost.
If the money's vanished, we should fight to get the firm nationalised, with
minimum compensation and with workers managing and controlling production.
The bosses should pay for their own system's crisis.
We fight for a socialist society, where production is geared to meeting
people's needs internationally, including in the poorest nations on earth, not
to swelling the profits of a tiny minority of capitalists.
IT WAS almost inevitable that as the International Monetary Fund (IMF) gathered in Washington to issue its upbeat forecast for the world economy, the biggest stock market panic since 1987 followed.
Capitalism, the IMF claimed, had ridden the rough waters of the past few years and the US ‘powerhouse’, based on the new economy of high-tech internet shares, was the salvation of world capitalism. That, at least, was how they perceived matters before last week.
Once more the masses’ faith in capitalism to deliver growth and prosperity has taken a severe knock. The Socialist has warned for some time that the economic bubble would burst. Eventually, some of capitalism’s more sober analysts caught up with the potential catastrophe looming in the world economy.
But salutary warnings about “irrational exuberance” from the chairman of the US Federal Reserve, Alan Greenspan, did little to dent the hyper-optimism. Even now capitalism’s economic gurus say complacently that this is only a necessary correction that’s been waiting to happen.
To justify their position they cite the fact the US stock market, the Dow Jones, fell by only 5.6% on Friday 14 April compared to 22% on Black Monday in October 1987. Still, £1,250 million was lost in Wall Street in one day - the equivalent of German economic output - hardly insignificant given the underlying fragility of the world economy.
LAST WEEK’S IMF warning about high share prices followed by higher than expected US inflation figures make it almost inevitable that the Fed will raise interest rates. This is combined with fears about whether the strength of the current boom can be sustained, especially given the recent rise in oil prices, which has yet to fully work its way into higher costs and lower profit margins for companies.
Capitalism could face a very deep recession or slump now. Most of the escape routes they followed in 1987 or 1995 after the South-East Asian currency crisis are blocked off.
If US interest rates rise - possibly substantially - other countries will raise interest rates and this will have a deflationary effect in the world economy, depressing consumer and business demand.
This, combined with a volatile dollar, could provoke further speculative runs on currencies, and massive worldwide financial instability.
The spectre of a repeat of the 1929-33 economic disaster looms large as business confidence dwindles. But even if the stock markets stabilise for now, a big correction is still required in share prices, particularly of the dot.com companies, which are fast becoming dot.bomb companies.
Some like Greenspan, US Treasury Secretary Larry Summers and Eddie George, Governor of the Bank of England, argue stock market falls will have little effect on the real economy. Others are justifiably less confident.
The Observer’s William Keegan warned that much of the current world economic growth is highly dependent on ‘booming’ US high-tech shares, which has fuelled a US consumer boom keeping the rest of the world afloat.
He shows that the USA accounts for half of the G7’s total economic output. But in the past three years the US has accounted for more than three-quarters of the growth in the G7’s real demand. Current forecasts estimate the US should still account for about two-thirds of real demand growth within the G7 this year.
In reality, all bets about this continuing are now off. The IMF admits it cannot accurately predict developments in the world economy.
The Socialist also cannot predict exactly when and how deep capitalism’s downturn could be. A big downturn could, at first, stun the working class.
But we can confidently predict that world capitalism’s days of growth cannot continue much longer. As the world economy contracts, Britain, with its reliance on inward investment and rundown of its manufacturing base, will be harder hit than most.
In turn this could scupper New Labour’s electoral prospects and will speed up the process of those wanting to establish a new anti-capitalist mass working-class party to find a socialist solution to capitalism’s economic carnage.
More in The Socialist
TEACHERS ACROSS the
country have angrily rejected New Labour's plans for Performance Related Pay
(PRP). This weekend's National Union of Teachers (NUT) annual conference must
now give a clear lead to the fight against these divisive plans.
Martin Powell-Davies
(Lewisham NUT)
Instead of giving all
teachers the £2,000 pay rise we deserve, New Labour are introducing
"threshold" standards to limit increases to a minority. From
September, a new performance management system will also link every teacher's
pay to individual targets.
These proposals will set
in place a divisive regime of monitoring and testing that will be like having
an OFSTED inspection every week of the year.
PRP will set teacher
against teacher and be used to bully staff into accepting an even greater
workload.
Yet the union leaders
have failed to channel that anger into the national strike action needed to
make the government retreat. Instead of giving a lead, they have hoped for a
compromise. Of course their weakness only encouraged New Labour to press ahead.
Pressure from ordinary
members has forced the NUT to keep up a verbal opposition to PRP. But it has
fallen to School Teachers Opposed to Performance Pay (STOPP) to organise
action.
The success of STOPP's
demonstration in February nearly swayed a majority on the NUT National
Executive to finally call the ballot for the one-day strike agreed at last
year's annual conference. In the end, it resulted in only a national
"survey".
That survey could still
be the platform for action but not if it's down to the current NUT leadership.
They waited weeks before releasing the survey and then ignored the Executive's
decision to give a strong recommendation in favour of action.
Our conference must make
sure that there are no more delays. A firm call for national strike action
could still galvanise teachers to stand together against PRP. It would also
give teachers the confidence to support a boycott of performance management and
refuse to apply for the threshold.
Because the unions have
let things come this far without taking action, teachers are understandably
weighing up whether or not to apply for the £2,000.
But the more teachers
that apply for the threshold, the harder it will be to build united opposition
to PRP. Every application helps legitimise the system and helps the government
drive a wedge between teaching colleagues.
Conference delegates
face a stark choice. Either we allow teachers to be put under even more
intolerable pressure or we give colleagues a chance to stand together at last
in united strike action to defeat PRP.
Last year, more refugees were
created by environmental disasters than by wars…
Go to Special feature on the Socialist Party’s
national site
International news
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Last Saturday police arrested and
charged dozens of striking Los Angeles janitors and their supporters who had
blocked a road junction. This 2000 strong was part of the Janitors struggle
for better pay. Gene Pepi from
Socialist Alternative, the Socialist Party’s US counterpart, reports. |
CHANTING “HUELGA! Huelga!” [Strike, strike!] 500 Justice for Janitors strikers marched down Rodeo Drive in Beverly Hills on 5 April. “One moment all you see on this street are Rolls-Royces and Range Rovers and then this,” said a top hatted, hunting frock clad, attendant at one of the posh local retail centres.
A day earlier 3,000 strikers blocked freeway exits near the Los Angeles (LA) county government centre. By Friday 7 April, more than 2,500 people marched for ten hours through the streets of LA to demonstrate their support for the demands of striking members of Service Employees International Union Local 1877, the California-wide Justice for Janitors union.
Last Monday 3,000 members voted by a more than 75% margin to reject management’s latest offer and go on strike.
Most of these workers are immigrants from Mexico and Central America. The work force is almost 55% women too, many of whom are single mothers. SEIU Local 1877 represents janitors in about 70% of LA County’s rental office space, which includes almost all of downtown LA and Century City, but is much weaker in the LA suburbs.
Why a Strike?
LOS ANGELES union janitors are among the lowest paid in the country, earning less than their counterparts in most major US cities. In this strike they are hoping to gain a $1 per hour wage increase in each of the next three years. LA janitor’s wages now range from $6.90 to $7.80 per hour. The minimum wage in the US is $5.75, which is what most non-union janitors in the area earn. Many work two jobs to make ends meet.
Janitors work with toxic cleaning chemicals and at a very physically demanding pace. Non-union janitors and even the families of the union janitors do not have health insurance. Family medical coverage for only a part of the union janitors was gained only earlier this year. 72% of LA school children live in poverty.
John Sweeney, current head of the US labor federation, the AFL-CIO, rose to its top on the basis of the organising success of the SEIU. A big part of that success was the Justice for Janitors campaign.
This strike and several others by Latino immigrants are examples of what forced Sweeney and the AFL-CIO to recently call for the legalization of undocumented immigrant workers in the US. This is a significant change in the previous anti-immigrant policy of the US labor federation leaders.
Unions affiliated to the LA County Federation of Labor, the largest single trade union council in the US with more than 400,000 members, committed to support the picket lines of the striking janitors. Truck drivers who deliver parcels, food and beverages and remove garbage from the buildings said they would not cross the lines as did building maintenance and construction workers who fix air conditioning units and remodel the buildings.
Nationally, other SEIU janitors’ locals have pledged to walkout in support of the LA strikers. SEIU has also built a $1 million strike fund for this effort.
The people who own and operate the buildings these janitors clean are some of the wealthiest and most politically connected people in LA.
Take for example Richard Ziman, chief executive at Arden Realty. His company owns more ‘Class-A’ office property than anyone else in LA. He is a bigtime fund raiser for Democratic Party politicians like Bill Clinton, Al Gore and California Governor Grey Davis.
Estimates are that the increased pay for janitors will add one penny more per square foot toward the cost of cleaning LA’s megabucks office buildings.
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