Britain: 2006 – Increased poverty, unemployment and war

Capitalism, both in Britain and worldwide, means increased poverty, unemployment and war for the peoples of the world. This is the unmistakeable message from the past year’s events.

Another message is that it has conjured up resistance, signified by the magnificent mass revolt of the working class and poor against the juggernaut of ’modern’ neo-liberal capitalism.

From the streets of Paris and Greece, to the cities of Chile, Mexico and the US, the rage of the mass of working people against this system is evident in the million-fold demonstrations. 2007 promises more of the same but on a higher level.

If the great Italian writer Dante was living today, he would add more ’circles of hell’ to describe the horrors of Iraq. The monthly death toll of almost 4,000 is higher than the total number of victims of the 9/11 attacks, one of the ostensible reasons for US imperialism’s onslaught on Iraq.

The pile of Iraqi corpses – most of them innocent civilians – has been put at 655,000. Iraq, once one of the most modern Arab states, is now a broken and fractured society, with no electricity, water or infrastructure, a situation considered by its people to be immeasurably worse than even under Saddam.

Now 3,000 American troops have been killed with 20,000 soldiers horribly mutilated because of Bush and Blair’s decision to invade Iraq. The economic cost to the US is already one and a half times that of the disastrous Vietnam War.

The waste of US blood and treasure is brutally spelt out in the Iraq Study Group (ISG) report, the commission of the ’great and good’ appointed by Bush to chart a way out of the quagmire. One by one, the report knocked down like dominoes the reasons given for the invasion.

"Nobody likes foreign missionaries," said Robespierre, the leader of the 18th century French Revolution. The report recognises that invading another country inevitably provokes national resistance. "If there were foreign forces in New Jersey, Tony Soprano would be an insurgent," commented an American official.

The report also dismisses the overblown, exaggerated claims of al-Qa’ida’s role in Iraq. There are 1,300 ’foreign fighters’ and yet, in one militia alone, the Mahdi Army organised by Moqtada al-Sadr, there are an estimated 60,000 Iraqis!

The report states the blindingly obvious; the US cannot win this war. In desperation, the authors argue that the US must seek to lean on former pariah states Iran and Syria to get itself out of the mess which Bush created.

Bush, however, has initially decided to ignore the ISG’s advice. He is likely to continue the war, even stepping up the despatch of troops, under the guise of ’trainers’ to the largely mythical Iraqi army. This will reinforce the isolation of Bush and his cabal. Former US president Harry Truman once commented that if you need a friend in Washington, you should get a dog! Blair fulfils this role by obligingly flying to Washington to stiffen Bush in their joint task of ’toughing it out’ in Iraq.

This will set Bush on a further collision course with the US people, whose anger was demonstrated in the mid-term elections. This amounted to an electoral uprising, as more than 60% of the American people want out of the present morass. If he persists and the number of US corpses rises, then even the tame Democrats and dissident Republicans in the US Congress may be forced to act.

They could use congressional hearings on the war to discredit Bush and seek to bring him to heel. And, as the example of Nixon showed during the Vietnam War, even impeachment hearings cannot be ruled out – although the Democrats, as another party of big business, would be reluctant to go down this road.

Unravelling boom

BUSH AND US capitalism could also be besieged not just on the war front but on the economy as well. The drop of the almighty dollar by 10% last year up to October signifies the underlying weakness of the US economy.

The twin pillars – more like chicken’s legs – which have propped up the world economy are an investment boom in China and the colossal consumer market in the US, which could judder to a halt this year.

This boom has been boosted by the housing boom which replaced the dotcom boom of a few years ago in the US, and sustained by cheap credit and historically low interest rates. But now, US house prices are dropping, which could lead to a cutback in the so-called ’wealth effect’, householders using their homes as virtual cash machines to sustain their spending spree.

There is also a bubble in the infrastructure which capitalist economists fear could collapse. In this casino capitalism, in the US and worldwide, ’hedge funds’ have played a role. These are huge betting syndicates on the different values of currencies, which means massive amounts of money moving around in speculative activity, something inevitable in all capitalist upswings.

This house of cards will tumble at some stage. Will it take place this year? Capitalism is an unplanned, blind system, with economic processes working out ’behind the backs of society’, as Karl Marx pointed out. There could be a slow accumulation of problems, then a sudden abrupt change.

All the ingredients for such a development exist in the US, the Atlas of world capitalism. If this collapses, it will have big repercussions for the system world-wide, particularly on the conditions of working-class people and the poor.

Growth in the US and Chinese economies was still taking place last year but with an evident slowing down. True, profits are still zooming ahead but savings of the US population are the lowest since 1933, when there was the worst economic crisis in history for US and world capitalism. With a massive deficit, US capitalism has, in effect, sucked in the world’s savings -  $3.5 billion a day – to plug the gaping hole in its massive finances.

China has bought up US Treasury assets as a means of propping up the dollar and, thereby, its own currency which is pegged to the dollar. This helps sustain this boom, important for China because of the market which the US provides for its exports.

But even China will begin to ’disinvest’ its dollar assets – switching into other currencies such as the euro – if the dollar’s relentless decline continues. This could precipitate a mass exodus from the dollar which could usher in a recession or a slump.

Capitalist economic experts hope for a ’soft landing’ but it is not excluded that the US economy’s slowdown could be ’hard’. Even a small reduction in the growth rate, expected to be 0.7% this year, will add one million to US unemployment rolls.

This will aggravate the already serious economic difficulties of the majority of the American working class and even the middle class. Stephen King, managing director of economics at HSBC, estimates that four-fifths of the US population are worse off, some of them considerably so, since Bush came to power in 2001.

The reign of Bush and the Republicans has shattered the claim that ’all boats rise together’ through capitalist growth. We have witnessed the colossal piling up of wealth by the rich – perhaps the greatest in history – at one pole and crumbs for the working class at the other.

Never before has such wealth been so brazenly paraded by the rich. City AM, a free sheet circulating in the banking area of Canary Wharf and the City of London, details the "sort of decadent scene in the latter days of the Roman empire" (their words!) of Britain’s modern plutocrats.

It writes: "How much would you pay for a mince pie? A few pennies? A couple of quid, maybe, if it’s got a nice star and some nutmeg on top, how does £200 sound? The Dion Bar at St Paul’s is serving a pie for just that amount."

Another item details the obscene practice of ’dwarf-tossing’ at City Christmas parties. The US Securities and Exchange Commission fined a Wall Street firm $9.7 million after it emerged that a senior vice-president had a $1.5 million entertainment budget. Among the excesses was a $75,000 stag party for an equity trader, which involved strippers as well as ’dwarf tossing’, hurling them between drunken, rich revellers.

Blairite Brown

All the ingredients are there for the unwinding of this present unstable economic situation, for which the working class will be asked to foot the bill. That this present boom will come to an end is certain, only the timing is in doubt. If the boom staggers on for another year or two, it will be at the cost of storing up even greater contradictions, which will ensure the collapse when it comes will be all that ’harder’.

Britain will not escape this, contrary to the impression given by Gordon Brown, chancellor and prime minister in waiting. Will his projected coronation represent a new departure for the working class and labour movement in Britain? As Blair waits in the political departure lounge, Brown has done everything to reinforce the impression that he represents more of the same.

He is the architect, with Blair, of the whole ’New Labour’ project, which represented a complete break with the Labour Party’s origins, based on the working class at the bottom, and with any semblance of a class or socialist approach.

His much-vaunted economic miracle is based on the worldwide economic upswing of the 1990s and of the mass migration at the beginning of this century of low-wage labour, particularly from Eastern Europe.

This resulted in massive profits for the bosses but an actual rise in unemployment of over a quarter of a million last year, while employment in general, those in work, appears to have gone up as well. In other words, this ’boom’ is partly fuelled by cheap labour which could lead, unless countered by the labour movement, to a general lowering of wages and living standards.

Fortunately, some unions, not before time, have begun to organise migrant workers, particularly from Poland, into union branches, such as the GMB in Southampton. The Transport and General Workers’ Union has taken a very important initiative to organise Polish workers in Glasgow, while the North-West TUC has brought over union organisers from Poland to give employment rights advice to Polish workers.

Brown, even before he moves house to 10 Downing Street, has promised to hold down public-sector pay rises to 2% at a time when inflation is officially at 4% but is much higher than that in reality. This is a formula for a head-on collision between public-sector workers and a Brown government.

Gas and electricity prices have spiralled much more than the wholesale price of oil. Scandalously, three million pensioners will die before the link of pensions with average earnings, abolished by Thatcher, is restored in 2012. One pensioner carried a placard on a recent demonstration which read: "I’ll die before the link."

The mean-spirited denial of a basic income to British pensioners, with the lowest income in all Western Europe, will continue under Brown as he strives to satisfy his ’base’, which is not the mass of the working people but the sharks of the City and big business.

Privatisation is likely to continue, even at an intensified rate. Brown has been one of the most enthusiastic advocates of privatisation, including the discredited Private Finance Initiative (PFI).

The sell-off of state schools to spivs, car dealers and even hedge funds could result in a total of £15 billion of state assets handed over lock, stock and barrel virtually gratis. The speculators, who now hold the fate of Britain’s children in their hands, will not even need to pay the £2 million ’deposit’ but can get away with vague promises of ’future investment’.

Union leaders’ inaction

BLAIR AND Brown have been emboldened to carry through their policies because of the official trade union leadership’s insipid, if not craven, capitulation. A major problem confronting Britain’s labour movement is still the chronic lack of confidence of workers that they can win in the teeth of a full-scale offensive from the bosses.

Frederick the Great, an 18th century feudal German ruler, once declared: "My people and I have come to an agreement. They say what they please and I do what I please." The bosses have the same attitude today.

Reports come from a thousand channels explaining graphically the realities of British capitalism, the bosses’ attacks on workers. At least one-third of hospital trusts are in deficit and 13 of them are, according to the guardian, "technically bankrupt, with no chance of meeting a legal obligation to balance their books".

The response to these attacks on the NHS from staff and patients has been massive and overwhelming. And yet, the official trade union leadership, particularly health unions like UNISON, have been hesitant to lift a finger to use this mood to call into action a movement to compel the government to retreat.

It has been left to community campaigns, many with Socialist Party involvement, which have organised demonstrations, including the march on parliament on the day of the health unions’ lobby, to provide the leadership. It is incredible that a huge campaign is necessary merely to compel the health unions and the TUC to call a national demonstration, which could now take place soon – 3 March – to compel the government to retreat.

Initially, the Blair government was tentative when it introduced secondary school academies. However, once they saw the feeble response of the tops of the education unions, they decided to go for broke, with plans now for 400 academies. The maxim ’Weakness invites aggression’ applies as much in the class struggle as it does in war.

Contrast the official trade union leadership’s pusillanimity with the determination of workers once they have clear leadership to fight to preserve their jobs and conditions. This was clearly shown in the case of Visteon (see page 2) and in Glasgow in the defeat of the council’s single status proposals. It is no accident that Socialist Party and CWI members played a big role in these actions.

This should become an inspiration and example to British workers in the labour movement in the next year. While refusing to lead workers in struggle, official union leaders still prop up the pro-imperialist, pro-rich, anti-pensioner, anti-youth and, above all anti-working class party, that New Labour is today.

Obscenely, the union leaders gave £100 million in the last ten years to this party. To do what? To remorselessly attack the living standards of the working class. Brown claims that 60% of the people of Britain are better off than they were in 1997. Yet even a loyal ’Brownie’, Polly Toynbee in the guardian, pointed out that ’gross’ figures like this hide a multitude of sins. Those who ’benefited’ most are the rich and a thin layer of the middle and working classes.

Will Labour lose?

MOREOVER, PRESIDING over a lopsided, uneven boom, which is what Britain has experienced, is no guarantee of victory for New Labour in a future general election. Brown should heed the example of Al Gore, the Democrat candidate in the 2000 US presidential election.

That election took place while the US economic upswing had not exhausted itself. However Gore was defeated, amongst other reasons, because the mass of the people, including those inclined to vote Democrat, felt no better off. Many were being forced to work in two jobs or more, while the rich piled up obscene wealth.

The same situation is observed in Britain today with four million voters detached from Labour since the 1997 general election. Most have not swung over to the Tories. But it cannot be excluded that, if Brown continues on the course set by him and Blair, former Labour voters, bitterly disappointed at New Lab-our’s defence of the rich, could abstain while traditional Tory voters and others could turn out to support Cameron.

Although the Tories were 1% ahead in the polls at the end of last year, Cameron is not yet seen as an alternative because he wants to be a new Blair, while the original model is completely discredited.

Blair himself justified his move to the right because the Tories under Thatcher and Major won ’four elections in a row’. Subsequently, he went even further to the right than Thatcher on issues like privatisation. Now, Cameron points to Blair’s three election victories to justify his political stance which, despite the ’hug-a-hoodie’ floss, underneath contains a brutal anti-working class programme.

Tax cuts for the rich of £21 billion are promised while the hatchet will be taken to the public sector, particularly education, the NHS and social services. The consequence of all this is a progressive shift to the right of all three capitalist parties.

2007, therefore, will be a period of struggle and resistance to the capitalist parties’ further attacks on the British working class. For the first time in over 100 years, Britain’s working people do not have a mass political alternative. Disgracefully, the trade union leaders – even after the scandal of cash for peerages – rushed to bail out Labour to the tune of £500,000.

They tried to justify this on the grounds that Labour can be ’rescued’ for the trade unions and the working class. However, John Harris, writing in the guardian, said he had rejoined Labour after leaving in disgust at the war but found the party empty. He concluded that on the basis of the present trends, "there will be apparently no-one left" in the Labour party by 2018!

At the end of last year, the guardian said: "The trade union-dominated Labour party crafted by Arthur Henderson and wrecked by Arthur Scargill will never return." In reality, of course, it was the right wing led by Kinnock, Blair and Brown not Arthur Scargill who destroyed Labour’s base amongst the trade unions and the working class. It is time to create a new mass political alternative for the British working class.

The shameless behaviour of the rich, brazenly and openly gorging themselves, would not be possible if they had to look over their shoulders at a mighty organised political force of the working class. It is urgent that the foundations of such a force are laid.

Worldwide and in Britain, 2007 will be convulsive. Massive opposition will continue towards the war in Iraq, indignation and protests will meet the government’s proposal to spend between £20 billion and £76 billion on the renewal of Trident.

There will also be resistance to privatisation and the ruin of the environment. In these looming tumultuous events will grow the idea of struggle, of socialism as the vision of the future and also the organised forces of Marxism around the Socialist Party and the Committee for a Workers’ International.

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January 2007