All the indications are that the British and European
economies have now been drawn into the deepening contraction of global capitalism:
- The Bank of England today slashed its forecast
for
- Last night, S&P cut
- The Banque de France, the country’s central bank, said that its preliminary figures show that gross domestic product will be down 0.1% in the third quarter, which ends on September 30. The bank had already predicted that GDP would fall the same amount in the second quarter.
- German exports slowed by a more than expected 1.5% in June. Imports dropped 3%, against a 2% prediction.
The Cameron-Clegg Coalition’s current austerity programme of
spending cuts and tax increases was based upon an unrealistic expectation of
growth, which has now been replaced by the certainty of its opposite. This –
and the crisis within the Coalition itself, spurred by the virulently
anti-Cameron Old Tories - underlies the sharpening of tensions as the Tories
abandon plans for reform of the House of Lords to focus attention on the
economy.
As BBC economist Stephanie Flanders puts it, we are experiencing: “ by some measures “the worst four-year period for the UK
People in the UK
face the same challenges as the rest of Europe
in battling assaults on public services, jobs, pensions and benefits and the
loss of their homes. Amongst the worst-hit countries is Spain Greece , the Orthodox Church has set
up emergency feeding centres for hundreds of thousands of people who have lost
everything. They include formerly well-paid professionals – architects,
engineers, information technology specialists who hardly know what has hit
them.
The contraction means demand is dropping fast, so exports,
imports and production must follow. Government revenues from tax continue to
drop, so “unaffordable” public services have to broken up and those parts that
can be made profitable handed to the private sector. Then, as the spiral of
recession deepens, comes the competitive elimination of surplus productive
capacity – the mothballing of factories, boom-year housing estates left empty,
infrastructure left to decline and rot, millions upon millions of people driven
from their jobs and homes, left without food, abandoned to their fate.
In country after country people have protested, marched and
even occupied workplaces. The Trade
Union Congress in Britain is calling for another demonstration in October. But the
experience of its last national anti-austerity protest in the spring of 2011 showed that it changed not
a whit of the Coalition’s policies.
Thus resistance must be transformed into
preparations to replace the broken system of capitalist social relations
dominated by the giant global corporations. It is these which have undermined
the legitimacy of the state and hollowed out the old forms of parliamentary democracy.
New forms of fully inclusive, participatory, direct and
representative democracy are needed. They can learn from the experiences of those
who’ve worked in not-for-profit institutions like the National Health Service,
housing, education and social services as well as the workers’ co-operatives,
credit unions, food coops and community shops that have spread around the world
as people try to protect themselves against the worst effects of the crisis. These
need to go further to develop policies and strategies to replace capitalist
social relations.
A World to Win believes that a global network of
People’s Assemblies can provide this framework. You’re invited to join the
discussion at http://aworldtowin.ning.com/
Gerry Gold
Economics editor
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