While blocking the rise of China is actually the main driving force behind Biden’s Inflation Reduction Act (IRA) and CHIPS and Science Act, the ‘cover story’ is encouraging investment in green technology as part of the green transition.
What a condemnation that modern capitalism’s response to climate change – which clearly can only be combated on a global basis – is being used to justify increased protectionism! The US has led the way, but every major power is being forced to respond by steps in the same protectionist direction.
Biden’s measures fall very far short of what is needed to transform the US into a green economy, which requires socialist planning.
And it is not certain even these limited measures will be fully carried out, particularly if the Republicans – backed to the hilt by the fossil fuel sections of the capitalist class – win the presidential election.
For weaker economies, the problems are much greater.
US imperialism is effectively trying to protect its position by putting the rest of the world ‘on rations’.
Under the current Tory government, even phraseology about a green transition has been rapidly ditched in the vain hope of winning a few votes, but Starmer’s New Labour is little different, retreating on promising a £28 billion green investment fund in order to assure the markets of its ‘iron-clad fiscal responsibility’.
As the job losses threatened in the steel industry are currently demonstrating, it will take a ferocious battle to combat capitalists making the working class pay for those green transition measures which do take place.
However, shadow chancellor’s Rachel Reeves endless speeches about fiscal responsibility do reflect the dilemmas faced by capitalist governments in Britain, which have far greater restraints on state expenditure than the US.
As Liz Truss graphically demonstrated, capitalist governments can face attacks by the bond markets if their policies are considered ‘beyond the pale’.
The declining position of British capitalism, especially since it has been outside the ‘protection’ of the major trading bloc of the EU, makes it one of the major economies that is particularly vulnerable to assault.
It is not for nothing that the Bank of England has asked more than 50 City institutions to model the impact of a new shock to the gilt (UK government bond) markets.
UK productivity has grown by 1.7% since 2008, compared to 27% in the previous 16 years.
The economy has been stagnating, on the verge of recession, for over a year.
Now the number of companies going bankrupt is surging, up 18% in October alone, as the increase in interest rates makes companies’ huge debt burdens unsustainable.
The very best that Starmer can hope to inherit economically is a continuation of the current stagnation, with a national debt of over 100% of GDP for the first time since 1961, public sector workers who have suffered over a decade of real-term pay cuts and expect Labour to change the situation, with at least 26 councils facing bankruptcy and many more desperate for a bail out, and an NHS, along with other public services, at or even beyond breaking point.
