No 1612 9th July 2022
The PM is a liar, twister and mountebank scoundrel and has to go. But so is the rest of the Tory crew, all a nest of poisonous vipers, mendacious manipulators and corrupt frauds. They should be thrown out immediately not decide themselves the next shyster to serve the degenerate billionaire ruling class and its vicious exploitation now driving millions into penury and desperation. But there is no challenge because anti-strike Labour and the rest are shysters too, fronting an entirely fraudulent racket called “parliamentary democracy”, pretending to change things but just lulling the working class and keeping it from revolutionary politics, the only way to stop the Catastrophic collapse of capitalism into Slump and World War Three. The fake-“left” bolsters the whole racket feeding illusions in “freedom and democracy” the same lying mantra Boris uses to support the NATO backed Ukrainian Nazi war on Russia. Workers waving Kiev flags should ask why they are on the same side as the Tories. Build Leninism
The supposed “ousting” of Tory prime minister Boris Johnson after his unprecedented denunciation by foreign office mandarin Gus McDonald, and resignation of a slew of senior Tory ministers, signals the growing panic of the ruling class as the Quantitative Easing deferred imperialist crisis slides into Catastrophic failure and war.
This astonishing and historic forced resignation is not essentially about Johnson’s probity, honesty or flawed character however cynical, dissolute, suspect and blusteringly superficial that might be.
It is not even about the corruption, sleaze and duplicity of the entire Tory gang, every part of it up to its neck in the barefaced lies and cover-ups that constitute “government” and more and more so as the crisis deepens.
Instead what the working class needs to understand and get to grips with is that everything the ruling class touches in society is turning to dog-do because of objective reasons, the implosion of the monopoly capitalist world economy resulting from the inbuilt contradictions of production for private profit.
In immediate terms the Tory turmoil comes from the shattering defeat (so far) for the foul Western-instigated nazi-NATO proxy war against Russia in Ukraine, the ever worsening competitive position of has-been British imperialism in the great cutthroat battle for markets, and the rising temper of mass dismay as the endless food bank and homelessness austerity deepens.
Before that was the humiliating retreat from Afghanistan and from Iraq too, the floundering disaster of “go it alone” Brexit, the callously sleazy and corrupt incompetence of the pandemic (no “success” at all save for chance fortune finding an early vaccine – one no longer used domestically for not quite explained reasons) and numerous smaller defeats like the further retreat from Ireland shown by nationalist Sinn Fein’s stunning ascendancy (EPSR No 1610).
Behind all that is the downspiralling collapse of the world monopoly capitalist economy into vicious trade war and Slump, international antagonisms and chauvinist hatreds as the greatest Catastrophic failure of the profit making system in all history ripens and rots inexorably.
The world is falling apart not because of the Ukraine war or the pandemic, which are caused by the crisis not causes of it, but because the capitalist system has hit a brick wall of contradiction and collapse, exactly as “catastrophist” Leninism has been fighting to get (re)understood for four decades (against petty bourgeois complacency, “official” trade unionist blinkeredness and fake-“left” cynicism and derision – all 50-shades-of-pink from revisionism to poisonous anti-communist Trotskyism) and particularly since the unresolved and unresolvable global credit collapse of 2008.
The ruling class is falling apart with the crisis.
Loss of confidence by the ruling class lies underneath the turmoil over personal and subjective depravity (nothing new in the ruling class and its acolytes in fact), forced out crisis-driven economic and class balance shifts and changes in the world which are shaking the once easy domination by the capitalist ruling order.
The frenzy of vicious backstabbing, and outrageous self-righteous hype and posturing about “standards”, “honour” and gross hypocrisy about “doing the best for the country” (meaning the upper class and its interests, not workers) which has followed – as if this disreputable crew of corrupt, money-grubbing self-seeking careerist mountebanks on all sides of the parliamentary circus would even understand the words, let alone ever put them into practice – shows even more clearly the sheer vicious nastiness of these “honourable gentlemen” as they turn on each other like great white sharks scenting blood in the water (with apologies to marine predators).
But this is hardly new; the lies, pocket-lining bribery venality, drunkenness and debauchery of the ruling class’s modern “democracy” charade (all parties) is notorious – not for nothing does the House of Commons club-on-the-Thames have more bars than there are pubs in Norwich, metaphorically speaking at least.
And it all stretches back for decades, or to be more historically accurate, centuries, even to the earliest parliaments of the bourgeois ascendancy after it took power from stultifying feudalism in the 1640-60 Cromwellian Revolution and its re-establishment, after a temporary monarchist counter-revolution, in 1688 – the first of the great prime ministers Robert Walpole for example made sure he was very well looked after indeed with great estates and grand houses (as top-hatted throwback empire-nostalgic ultra-toff William Rees-Mogg should point out in one of his toffee-nosed disdainful interviews, if he could get the words past all the plums in his mouth).
It is getting worse however and more exposed because the huge contradictions in class-rule society are reaching a point of total paralysis and the bourgeoisie is unable to rule on coherently as the world crisis reaches the point of intractable impasse.
Personal incompetence, sleaziness, pocket-lining hubris, arrogance and contempt become part of the meltdown and add to it, but are secondary effects.
The unstoppable and unsolvable contradictions of the profit making system, first identified and analysed by Karl Marx, (see EPSR box, Capital etc and elaborated by Lenin’s Bolsheviks) are what need to be grasped, studied and understood in depth by the working class, overcoming its traditional hostility to theory, if it is to make sense of the world and bring to an end the deadly chaos of war, famine and environmental collapse facing humanity because of the profiteering capitalist order – as only the ordinary proletarian masses can do.
There is an urgent need (well overdue) for the working class to build a party dedicated to the polemical advance of the revolutionary theory of Marxism-Leninism, and to develop it to a greater depth than ever before through polemical struggle.
That alone will can explain this devastating implosion of slump and war and guide its class war solution, the revolutionary overturn and ending of the bourgeois system.
A first big question to ask is why are the Tories – all of them – still carrying on at all?
The whole crew of mountebanks, frauds and liars are up to their necks in the sleaze, incompetence and mendacity now pinned exclusively onto Boris Johnson, who is merely a high level scapegoat (notionally since it is not even clear he will be driven into the desert at all, the traditional fate of scapegoats, ie be thrown out of No 10).
They all knowingly and mendaciously have slickly and smoothly been doing the rounds of the media for the whole three years of this fraudulent constitutional coup administration, lying barefacedly as they deny this and refuse to accept that, and constantly denouncing the anyway pathetically tame and unchallenging interviewers (all petty bourgeois and reactionary themselves) for allegedly “being biased” if they presume to question too far the most risible “explanations” and excuses, with threats in the background against their jobs and even the whole structure of even this compliant and reactionary media (privatising Channel 4, disciplining the BBC etc, censoring entire TV channels like RT, shutting down social media accounts).
It is a million miles from the “free speech” and “democracy” they lyingly pretend to uphold).
If democracy and public accountability mean anything how can this grotesque disintegration continue to rule the country and to wage yet another disgusting and vicious war internationally, slaughtering millions from Iraq to Ukraine (which the West provoked)?
How come they have not immediately all resigned and called an election?
How, incredibly, is Johnson himself carrying on as normal, laughing and joking with the usual afternoon Cabinet session not an hour after his notional “resignation in shame”?
The simple answer of course is that democracy does NOT mean anything while big money and property ownership dominates society (see Lenin eg quoted in EPSR 1065).
Under capitalism it is and it has always been, a gigantic racket to cover over and disguise the dictatorship rule of the bourgeoisie, serving only the interest of big money capital.
The pretence that “everyone has a say” is the biggest joke in history pulled at the expense of the masses, and refined and developed by those in power over centuries to head them away from the revolution they would make tomorrow if they understood fully what dupes they were being taken for.
It has worked partly because in the richer countries it went hand in hand with a certain amount of bribery of the population, made possible because the exploitation and tyrannical enslavement of the colonial world (where even bourgeois “democracy” is mostly unknown at all for the sweatshop exploited masses) which created such vast superprofit wealth that a (very small) amount could be diverted to buying off the domestic masses with “reforms”.
The petty bourgeoisie and the better off layers of the worker class (foremen, skilled workers etc) all went along with it, to such an extent in once world dominant empire Britain that corruption goes deep into nearly all the working class, expressed via the Union Jack waving jingoism still hoodwinking many through Brexit etc).
And it has worked too because of the opportunism and MIS-leadership of the fake-“left” selling this pup to the masses for the last 150 years of “Labourism” and “official trade unionism”, creating an entire philosophy of forelock tugging class collaboration and “steady change for the better”, while decrying revolution, and helping feed the non-stop anti-communist brainwashing and rubbishing of the workers states that twists minds and ultimately leads them to the slaughter.
The TUC and the Labourites are still at it.
In the last decade of “austerity” decline, social service and wage cuts all the way to foodbank and homelessness poverty, they still are not only not delivering any such improvements (which were mostly a huge fraud anyway, like “nationalisation” under the Attlee post-war government), but deliberately holding back from challenging the Tory ruling class at all in practice, so deep has class collaboration treachery gone (including aiding the ruling class to sabotage the “left Labour” movement, ineffectual though it was, around Corbynism).
Which already answers the next question as to why the Labour and SNP “opposition” has not immediately called a vote of no confidence and brought the government toppling down, refusing to do so with the most outrageous evasions and excuses, as it has throughout the entire Johnson government (and throughout the Cameron and May governments before that) covering up its inaction with loud PC posturing and faux feminist and other, knowingly ineffectual, “woke” single-issue “outrage” and grandstanding (which simply annoys and alienates much of the working class because of its fatuousness. Even where there are specific injustices – racism, double oppression of women, global warming etc are all deeply serious and often painful issues in capitalist society – the real and only answer to them of changing capitalism’s exploitation society and divisiveness by revolution is ignored or worse, outright opposed).
In fact Labourism is part of the whole hoodwinking racket too, the other face of the wool-pulling “democracy” manipulation of the masses, diverting minds from the revolutionary question.
As conditions have deteriorated since the great 2008-9 Global Credit breakdown, it has been sitting back as the “reserve team” to run capitalism should things become so bad that the ruling class can no longer rule on directly, as was the case when Thatcher and then John Major melted down (all the way to total brown envelope cash-for-questions sleaze), paralysed by Britain’s declining role in the world and its uncompetitive position as international trade war intensified from the 1980s onwards, and by the ever-growing split in the bourgeoisie (echoed by Labour) over whether to stay in the European monopoly capitalist alliance or go with US imperialism, the core issue still tearing the whole British establishment apart now.
(And which can only go on doing so because neither option – kowtowing to more efficient Germany, leading the EU, or kowtowing to Washington – can stop the world economic collapse of the entire capitalist system, another key point the fake-“lefts” don’t make, simply taking sides with one or the other wings of the ruling class and thereby helping foster the jingoism and “British” chauvinism used by the ruling class to whip up warmongering hatred and diversions.)
Labourism covers-up the real issue, collapse of the whole profiteering capitalist system, because it knows even to mention it would immediately set minds running on the only possible answer, the revolutionary class war overthrow of this disgusting and arrogant ruling class to establish the rule of the working class.
But that can only delay things. History itself demands that the working class carry through a revolutionary transformation of society to bring to an end the stinking corruption, degeneration, wastefulness and planet-threatening warmongering of the profit system, because it will have no choice as the inexorable Slump deepens.
Nor will the ruling class have any choice – if it is to continue the sweet life of power, wealth and privilege it must impose its class dictatorship ever more firmly, not least because the “democracy" racket is nearly up.
The latest Tory government is already halfway there.
For all the “justification” Boris Johnson tries to pretend about having an 80-seat majority “mandate”, everyone knows this is a hollow fraud, even within the framework of the parliamentary racket itself.
And what might have been transiently pulled off by trickery and manipulation three years ago, no longer holds anyway.
The working class has steadily withdrawn from the whole pantomime over decades as it has increasingly become disillusioned with the corruption and betrayal of its interests, expressed largely through the ever-declining vote for the Labour Party and the ever declining turnout in all elections (a crucial figure which the bourgeois media manages to avoid giving at all, or downplays).
It is a quite deliberate omission, trying to suggest there is still meaning in the figures by maintaining the pretence of “percentage swings, gains and losses” – notably so in the recent Wakefield by-election for example where the Labourites did not so much see a swing their way as the total collapse of the disgusted Tory vote, leaving their candidate sticking out of the mud as the tide went out.
In all modern elections only tiny numbers take things seriously, and then mostly to give the most detestable of the candidates a good kicking.
“Positive” votes need assessing very concretely too – looking at specific factors like the rise of the nationalist support and collapse of colonist intransigence in once-occupied “Northern Ireland (see EPSR No 1610) and assessing the class movements and forces that they give expression to.
No bourgeois vote means anything in the absence of such analysis, least of all as an expression of the “popular will” which at best is uninformed, and worst pushed to and fro by the mass media both in the information (and opinions) it does give, and even more importantly in what it does not give (or is blocked from giving by informal or state imposed censorship).
The Boris 2019 vote, such as it was, was won by an unprecedented level of twisted advertising and social-media manipulation, (orchestrated by Dominic Cummings, like the Brexit Referendum before), last ditch working class dismay at the crisis, ready to both “try anything once” after nearly a dozen disappointments in Labourism, and to “punish” the elitist establishment in London, and in some sectors swayed by the particularly vicious MI5/Zionist conspiracy of character assassination of the Corbynite “left” revival, lyingly calling them “anti-semites” (eagerly abetted by the vile treachery and conspiratorial backstabbing of the warmongering Blairites themselves).
Trickery and trampling on constitutional niceties, in particular the illegal proroguing of parliament was already halfway to a coup three years ago as made even clearer over the last week with the Boris Johnson’s Trump-lite attempt to remain in power.
If the deep layers of the ruling class backing Johnson (who would not be operating alone) have failed to pull off the political coup attempted in the last week it only makes its necessity greater.
At some point the ruling class has to use the most brutal methods to suppress and hold down the enormous revolt which is coming as the inflationary Slump disaster forces millions more into foodbank and homeless penury on top of a decade of already near intolerable austerity.
The petty bourgeois element of the parliamentary establishment has got cold feet for the moment at so openly dispensing with 400+ years of the democracy trick, the best weapon the ruling class ever came up with for staying in power.
But that failure and loss of nerve at this point among the petty bourgeoisie, only pushes the ruling class further onto the ropes than ever, making “suspension” of democracy, military and secret police (MI5 Gestapo etc) crackdowns and outright coups more likely, not less.
Faced with inevitable mass strikes, still piecemeal at present but more and more likely to coalesce into coordinated or possible general strike action, and explosive street revolt like Brixton and Toxteth in the 1980s or the burning Croydon and Tottenham centres in 2011, the capitalist state will be forced all the way to the brutal levels of military coup seen in Indonesia in 1965, in Egypt in 2103, more or less permanently in the Zionist domination of stolen Palestine, in Haiti, and in dozens more examples.
Some of the bourgeois pundits have already speculated that the most reactionary wing of the ruling class and its controlled media, might even try to rehabilitate Boris Johnson yet, to be brought back as a “strong leader” as the remainder of parliament flounders in the deepening crisis conditions which are rapidly escalating.
But it is a desperate game, and only further cuts away the illusions in “democracy” (as the archive piece on the back page points out).
“But a coup - is this not a bit hysterical” and “not possible here”?
That is just what trusting Salvador Allende’s revisionist-influenced “democratic path” idiocy said in “civilised” and economically advanced Chile in 1973 even as General Augusto Pinochet, ostensibly “restoring order” was finalising the brutal CIA-plotted takeover that butchered thousands and tortured tens of thousands.
And the Great Catastrophe, partially deferred from 2008 by non-stop dollar printing, is unfolding with a vengeance.
Already “money expert” Martin Lewis has been spelling out vast new increases in the gas and oil prices which he says on Channel Four News could push ten million of the population to the poverty limit this winter.
And the scale and extent of the economic collapse is apparent even to bourgeois commentary now coming thick and fast with its doom warnings:
Elon Musk has warned that a US recession is “more likely than not” to come soon as the Tesla chief executive confirmed plans to cut 10% of salaried staff at the electric carmaker over the next three months.
The world’s richest man said a recession in the US was inevitable ...
Musk’s outlook echoes comments from other executives, including JPMorgan boss Jamie Dimon, who warned this month that a “hurricane is right out there down the road coming our way”. The US president, Joe Biden, reiterated on Monday that he felt a US recession was not inevitable, even as the world’s largest economy struggles to tackle high petrol prices and inflation, which is at its highest in 40 years. Former US treasury secretary Lawrence Summers told NBC News on Sunday that he too expected a recession.
The global rout in stock markets, cryptocurrencies and other risky assets has gathered pace amid growing concern that out-of-control inflation, rising interest rates and slowing growth could combine to tip the world into recession.
Share prices fell in Asia on Friday at the beginning of what was likely to be another torrid day for investors spooked by the US Federal Reserve’s decision this week to raise interest rates by the largest margin for almost 30 years.
Other leading central banks such as the Bank of England and the Swiss National Bank have followed suit – the latter in its first hike for 15 years – sending economists scrambling to revise their forecast for growth downwards.
Stephen Innes at SPI Asset Management in Hong Kong said: “No central bankers worth their weight would put inflation-fighting credentials on the line and import higher energy inflation via a weaker currency.
Despite the Bank of Japan announcing on Friday that it was sticking to its ultra-loose monetary policy, he added the rate rises elsewhere were a “highly ominous signal for stock market investors... the global race to hike rates is nowhere near the finishing line”.
Britons should expect to suffer a more severe bout of inflation than other major economies during the current energy crisis, the governor of the Bank of England has warned.
Speaking at a conference of central bankers in Portugal, Andrew Bailey said inflation was higher in the UK and would persist for longer than previously expected as soaring petrol and gas prices sent household bills rocketing to new highs.
Bailey said he was determined to bring down inflation and was prepared to use the Bank’s power to increase interest rates aggressively in response, though he added that it may not be necessary if price growth slowed towards the end of the year.
“I think the UK economy is probably weakening rather earlier and somewhat more than others,” he said. “There will be circumstances in which we will have to do more. We’re not there yet in terms of the next meeting. We’re still a month away, but that’s on the table. But you shouldn’t assume its the only thing on the table – that’s the key point,” he added.
His comments came as leaders of the world’s most powerful central banks warned that the global economy is facing a new period of persistently high inflation, unleashed by the coronavirus pandemic after decades of stability.
The heads of the US Federal Reserve and European Central Bank joined Bailey in saying that the era of low and stable inflation across advanced economies since the 1990s was unlikely to return in the wake of a succession of economic shocks.
Christine Lagarde, the head of the ECB, said there were “forces that have been unleashed” by the Covid pandemic, Russia’s war in Ukraine and the breakdown of global supply chains that made the return to a world of low and stable inflation difficult to achieve.
“I don’t think that we’re going to go back to that environment of low inflation,” she said.
The global financial and economic outlook for the year ahead has soured rapidly in recent months, [posing] six questions.
First, will the rise in inflation in most advanced economies be temporary or more persistent? This debate has raged for the past year but now it is largely settled: “Team Persistent” won, and “Team Transitory” – which previously included most central banks and fiscal authorities – must admit to having been mistaken.
The second question is whether the increase in inflation was driven more by excessive aggregate demand (loose monetary, credit, and fiscal policies) or by stagflationary negative aggregate supply shocks (including the initial Covid-19 lockdowns, supply-chain bottlenecks, a reduced US labour supply, the impact of Russia’s war in Ukraine on commodity prices, and China’s “zero-Covid” policy). While demand and supply factors were in the mix, it is now widely recognised that supply factors have played an increasingly decisive role. This matters because supply-driven inflation is stagflationary and thus raises the risk of a hard landing (increased unemployment and potentially a recession) when monetary policy is tightened.
That leads directly to the third question: will monetary-policy tightening by the US Federal Reserve and other major central banks bring a hard or soft landing? [..] the consensus has rapidly shifted, with even the Fed Chair, Jerome Powell, recognising that a recession is possible, and that a soft landing will be “very challenging”.
Moreover, a model used by the Federal Reserve Bank of New York shows a high probability of a hard landing, and the Bank of England has expressed similar views. Several prominent Wall Street institutions have now decided that a recession is their baseline scenario.
fourth is whether a hard landing would weaken central banks’ hawkish resolve on inflation. If they stop their policy-tightening, we can expect a persistent rise in inflation and either economic overheating or stagflation (above-target inflation and a recession).
Most market analysts seem to think that central banks will remain hawkish but I have argued that they will eventually wimp out and accept higher inflation – followed by stagflation – once a hard landing becomes imminent because they will be worried about the damage of a recession and a debt trap, owing to an excessive buildup of private and public liabilities after years of low interest rates.
Now that a hard landing is becoming a baseline for more analysts, a new (fifth) question is emerging: Will the coming recession be mild and short-lived, or will it be more severe and characterised by deep financial distress? Most...argue today’s financial imbalances are not as severe as ..the run-up to the 2008 global financial crisis. But this view is dangerously naive.
There is ample reason to believe that the next recession will be marked by a severe stagflationary debt crisis.
As a share of global GDP, private and public debt levels are much higher today than in the past, having risen from 200% in 1999 to 350% today (with a particularly sharp increase since the start of the pandemic). Under these conditions, rapid normalisation of monetary policy and rising interest rates will drive highly leveraged zombie households, companies, financial institutions, and governments into bankruptcy and default.
The next crisis will not be like its predecessors. In the 1970s, we had stagflation but no massive debt crises. After 2008, we had a debt crisis followed by low inflation or deflation. Today, we face supply shocks in a context of much higher debt levels, ..a combination of 1970s-style stagflation and 2008-style debt crises – that is, a stagflationary debt crisis.
When confronting stagflationary shocks, a central bank must tighten its policy stance even as the economy heads toward a recession. The situation today is thus fundamentally different from the global financial crisis or the early months of the pandemic, when central banks could ease monetary policy aggressively.
The space for fiscal expansion will also be more limited this time. Most of the fiscal ammunition has been used, and public debts are becoming unsustainable.
Moreover, because today’s higher inflation is a global phenomenon, most central banks are tightening at the same time, thereby increasing the probability of a synchronised global recession.
This tightening is already having an effect: bubbles are deflating everywhere – including in public and private equity, real estate, housing, meme stocks, crypto, Spacs (special purpose acquisition companies), bonds, and credit instruments. Real and financial wealth is falling, and debts and debt-servicing ratios are rising.
That brings us to the final question: will equity markets rebound ...Regardless of whether the recession is mild or severe, history suggests that the equity market has much more room to fall before it bottoms out. In the current context, any rebound – such as the one in the last two weeks – should be regarded as a dead-cat bounce...Things will get much worse before they get better.
The technical and detached tone of all these constantly worsening prognoses covers over the savagery of the crisis impact on the masses.
Some of the petty bourgeoisie, like the anti-communist Blairite Polly Toynbee and her Observer colleague Nick Cohen capture the impact a little better in their despair as their idiotic reformist illusions are ground down:
This year’s annual living standards audit from the Resolution Foundation contains graphs that risk plunging readers into downright despair at this benighted country’s state.
It has come to this: UK household income growth between 2007 and 2018 fell behind the rest of Europe, with only Greece and Cyprus below us. Ireland grew by 6%, France by 10%, Germany 19%, while the UK fell back – yes, backwards – by 2%. All countries struggle in this energy shock, but after 15 years of income stagnation, “global Britain” is the hardest hit and least resilient.
“A toxic combination of both low growth and persistently high income inequality” is this audit’s definition of the British disease. Among EU countries, only Bulgaria is more unequal than us.
With the Bank of England predicting a steep rise in unemployment to 5.5%, many will be shocked when they discover UK jobseeker’s allowance at its lowest on record, just 13% of average pay. Sweden pays 80% of previous pay for those seeking a new job. In this fragile society, more than a quarter of households say they couldn’t manage a month on their meagre savings.
Economic commentators warn of the gathering storm clouds of a recession. Consumer confidence, the best predictor, has hit an all-time low as alarming news tumbles out daily. Sterling fell against the dollar by 10% this year, after already falling substantially since the Brexit vote.
The balance of trade was once so crucial that in 1970, the first election I covered as a junior reporter, Harold Wilson’s shock defeat was partly caused by last-minute bad trade figures registering a mere 0.2% deficit. Compare that to our stonking post-Brexit trade deficit of 8.3%, the worst since records began in 1955. No wonder the government bars any Brexit impact assessment. The Resolution Foundation found Brexit caused a post-referendum rise in the cost of living equivalent to an increase of £870 a year for the average household. That makes restoring EU trade an urgent necessity.
All this is about to be made worse, deliberately. Disregarding the cause of this inflation, the Bank of England is bent on raising interest rates to throttle nonexistent demand. Orthodoxy ordains inflation must be crushed by intentionally raising unemployment. To the Bank of England, with a hammer, every worker looks like a nail. Never mind that stagnant pay has zero responsibility for inflation.
Whenever technical “recession” arrives, Monday’s audit shows that living standards have been in a 15-year recession and are now plummeting further. The half of households below median income levels rely 70% on pay and 30% on benefit top-ups – so both are responsible for Britain’s slump in living standards. Pay needs to keep rising – but benefits also need the same triple lock as pensions.
That surely means these strikes must succeed to stop pay retreating. And then pay must keep rising. The Bank’s call for restraint is so economically wrongheaded that there will be no cure until we escape the Treasury and Bank of England orthodoxies that helped land us here.
Of course we should tax more, and more fairly: look at the shabby long-term social consequences of paying lower tax than France and Germany. We should tax the rich until their pips squeak, when they have gained so much recently while the rest lost out. But, in the end, all that can sustain us is rising productivity.
However, business is on strike over investment. Already abysmal, preferring dividends and share buybacks, business investment has fallen 9.2% below pre-Covid levels. Profits of the largest non-financial companies rose 34% in 2021, compared with pre-pandemic levels, says the Institute for Public Policy Research thinktank: time to rein in profiteering. The National Institute of Economic and Social Research finds the cause of Britain’s weak productivity is low business investment, inadequate infrastructure, insufficient innovation and low skills.
Where the market fails, the state has to step in. Jettison Treasury rules defining capital spending as only on bricks and mortar, and invest in human capital. Why is further education funding so low and apprenticeships falling, while universities cut places? To shoot through a decade of moribund productivity takes a burst of investment daring, imagination and determination. The only hope is renewable energy, insulation, housebuilding, and research and development to match more successful countries with highly trained and educated people. Borrowing confidently to invest wisely and optimistically shores up a country’s credibility against a threatened slide in sterling’s value.
We are back in the thieving world of Fred “the Shred” Goodwin and Northern Rock. The sole difference from 2008 is that instead of the state expecting ordinary people to bail out failed banks, it is expecting them to take pay cuts to protect bosses’ bonuses.
.. As millions sink down, all they say is that it is their patriotic duty to protect the privileged by sinking deeper. Or, as a writer plucked from the Victorian age explained to Daily Telegraph readers last week, the rewards of the rich are “natural and inevitable” but the “clamour” of workers for pay rises is “nothing but shameful opportunism”.
...The hopes of working-class voters that Brexit would raise wages by removing the competition from EU workers have proved false. Unemployment is as low as it has been for 50 years. Employers are desperate to fill vacancies. Despite the most favourable of circumstances, average pay rose by just 4.2% between January and March – far behind inflation, which is now at 9% and heading higher. Averages conceal as much as they reveal, however, and the Resolution Foundation found that bonuses in the financial services sector were running at a “red-hot” rate of 30% a year.
That is still not fast enough for the City, which is pushing the government to remove all limits on the rewards they can dole out. Meanwhile in the corporate boardroom, chief executives’ renumeration packages are at 63 times the pay of their average (median) worker – almost double the 2021 ratio.
The manifest unfairness explains why the government has been surprised that its old tunes about militant workers holding the country to ransom no longer play with the public. The Conservatives have yet to realise there is no good argument against the staff at BT threatening to strike to maintain their wages, when the chief executive pocketed a 32% increase and shareholders received £700m in dividends.
The prime minister breaking his own lockdown rules is not the sole reason for the anger in the air. Inflation makes the previously poor desperate, the previously comfortable poor and everyone aware of inequalities around them.
Yet as the rage rises, the government has lost the ability to talk to the public.
Previous crises have brought forward politicians with solutions. Phil Tinline’s admirable new history, The Death of Consensus: 100 Years of British Political Nightmares, shows how Labour responded to the poverty of the 1930s by planning a welfare state and putting their plans into action in government in the 1940s. It moves on to the Tory right responding to the strikes and inflation of the 1970s by devising the anti-union laws and marketisation of the 1980s.
Vacuity characterises the crisis of the 2020s. There are no solutions on offer beyond making the rest of society pay to maintain the incomes of its pensioner and wealthy supporters, in the case of the Conservatives, and the fantasy worlds of Scottish and Brexit nationalists, which just make the UK poorer. As for Labour, I have no idea how it intends to put its ideas into practice or indeed what ideas it possesses.
The absence of workable plans for the future is what gives our crisis its frightening quality and why I suspect today’s anger will morph into despair.
Both these latter pieces continue to peddle fantastical reformist notions that will not, and cannot come about while capitalism lasts, and serve only to head workers back into the democracy delusion behind the opportunist Labourites.
They go nowhere near explaining to workers the reality of terminal collapse in a system that cannot recover and must be overturned.
What “today’s anger” needs “to morph into” is not despair but revolution.
But the leadership of the unions, where the anger is now being expressed equally steers clear of giving any such guidance, mostly treacherously standing behind Labour.
Even “militants” like Mick Lynch at the RMT, leading the major rail strikes this summer studiously avoid any hint of deeper questions and the need to end capitalism.
Given the enormous opportunities of endless interviews during three days of strikes, and an appearance on the BBC TV Question Time he deliberately declared himself and the union to be “apolitical”, with a few limited comments about a “fairer tax burden” to help out poorer families, a more useless reformist notion than even Toynbee could come up with.
There was not a word about the sickness of the capitalist system and the need to replace it with a planned socialist economy; about the impossibility of safeguarding jobs and wages for long in the teeth of the economic hurricane without challenging the whole system; about the treachery of Labour and its disgusting suppression and censorship of even tame Corbynism and its reactionary ban on picket line support for the RMT or the dozens of workers groups being forced into strike action; of the dangers of Brexit jingoism and British chauvinism, the go-to diversion and hate-building mechanism employed by the ruling class to split and divide workers and head them away from revolution; nor a warning of the dangers of the steel tariffs just introduced, feeding divisive trade war protectionism and racist hatred of “foreigners” (notably shutting out imports from the Chinese workers state, thereby whipping up disastrous anti-communist sentiment too).
And most of all there was nothing said to expose the stinking lies of the NATO war on Russia, and the complete non-stop psyops lie campaign about Moscow’s response, with the entire media bucketing out the purest upside down fabrications and Nazi allegations of “war crimes” and “civilian killing”.
The stampeding of popular opinion behind this hate propaganda, is one of the major obstacles holding the working class back in its understanding, feeding continued the anti-communist sentiment that blocks off its capacity to grasp the need for revolution and the establishment of workers states, the only way the crisis will be overcome.
Even asking the simple question “how come Boris Johnson and the Tories are exposed as the great enemies of freedom and democracy - imprisoning or sanctioning the slaughter of journalists and whistleblowers across the world, sustaining and upholding the vilest regimes like Saudi Arabia, which butchered (literally) Jamal Khashoggi; bolstering the fascist Zionist occupiers of Palestine who just cold-bloodedly shot Al Jazeera journalist Shireen Abu Aqleh (and disrupted her funeral); staying silent on the corrupt Maltese government and its effectively state ordered murder of anti-corruption writer Daphne Galizia; and most grotesquely of all handing over the illegally detained and persecuted Wikileaks editor Julian Assange to American imperialism which is intent on killing him (by endless solitary incarceration if not more sinister “accidental” means) because of his exposure of US and British warcrimes in Iraq (both states still unarraigned let alone punished for their grotesque brutalities) – yet Boris Johnson can still claim he is ‘fighting for freedom and democracy’?” - even asking this question would have helped expose the Western propaganda for the total lie it is,
But Lynch said nothing of this, wasting all the media attention.
No wonder the bourgeois press has elevated him into some kind of “reasonable man” hero - he is no “militant” threat at all, lulling the working class into quiescence.
What the working class needs to hear is that it has to take power and establish its own scientifically led working class dictatorship, seizing control of all production and natural resources so they can be used in a planned way for communal benefit as a rational self-disciplined society is steadily built until eventually, all state control can wither away in the medium and far future.
Only total class war will do, to completely overturn the existing system dominated by the vast financial and coercive force power of the grotesquely wealthy arrogant and corrupt ruling class.
That means building Leninism. Don Hoskins
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