This government is interested only in saving capitalism, not jobs. That’s the meaning of today’s unemployment figures, which show that people’s lives are being wrecked by a system that’s breaking apart. That’s the significance of writing a blank cheque to bankers, who promptly hoard taxpayers’ money to bolster their shattered balance sheets, while jobs disappear in their tens of thousands.
No one knows how much the state has pledged to the bankers because the government refuses to come clean on that one; what we do know, however, is not a single penny has gone to save one job since the crisis exploded last summer. So official figures show that unemployment in November reached 1.92 million in November last year, a rise of more than 131,000 in three months. The real total is bound to be higher because many people do not register while others from outside the UK, like Polish workers, have simply returned home.
Anyone looking for a positive response from New Labour will have to forget it. All employment minister Tony McNulty could say was that the figures were "very disappointing" and predicted things would "get worse before they get better". Just what sacked workers wanted to hear as they search for the address of their local unemployment office (aka “Job Centres”).
McNulty and his fellow ministers labour under the illusion that bailing out the banks will get them lending again and that the economy will magically revive. This says more about New Labour’s infatuation with finance than it does about the government’s ability to grasp even the bare essentials of how capitalism operates.
The global banking crisis actually expresses processes within the “real economy” and not the other way round. So long as the world economy continued to grow, and people repaid their borrowings, the merry-go-round could continue. As long ago as 2006, however, some American households hit by falling income, stopped paying their mortgages and the rest, as they say, is history.
Suddenly exposed to the light of day were the results of the tendency for capitalism to over-produce commodities which consumers cannot purchase out of their normal income. This obvious contradiction itself expresses the predisposition for the rate of profit to fall as output per worker increases. Today’s crisis is thus the unravelling of this fatal flaw at the heart of present capitalist economic social relations.
Not that New Labour could or would do anything to resolve this paradox, even if it could understand what was going on. For one, the state is capitalist in its nature and cannot, therefore, act in a way that challenges private ownership of big business and finance run for profit as the basis of the economy. Moreover, there is an objective, unstoppable momentum to the economic crisis which capitalist governments are incapable of arresting.
You could actually see this in a graphic way yesterday, both in Britain and the United States. As the markets digested the second Brown government bail-out, shares and the pound fell sharply. Even as Obama was sworn in as president, banking shares nosedived on Wall Street. Firms continued to announce redundancies and closures because orders had dried up.
Yet, you can conceive of a state and a government that could act. One that would order a halt to redundancies and closures pending a reorganisation of the economy on co-operative lines. A state that would switch funds from the banks to pay the unemployed the average wage while the economy was reorganised. A government that would reconstitute the financial system on the basis of mutual ownership and control. A democratically-controlled political system that would issue a clarion call to workers in other countries to do the same. Getting to this point requires decisive, conscious revolutionary action.
AWTW communications editor