CWI: A bureaucratic farce, solidarity with Bruce Wallace

and the group of 11 My former party the CWI the Socialist Party of England and Wales is under going a crisis it would seem. With the news that long standing member Bruce Wallace has been suspended has not surprised me in the slightest. This all feels very familiar to my time in the party where my blog was used to attack me and my critical thinking was frowned upon too. You would think, perhaps naively, that advocates of two different theories of crisis could co-exist in the same organisation and fight things out at length. Apparently not. After a protracted drama, Wallace has been suspended, in substance for making his criticisms openly - his blog, apparently, is “a platform for a continual stream of invective and attacks on the party”. He has already declared his intention to appeal. While I am no longer a member I have full solidarity with Bruce and the others under attack I know how it feels to feel isolated and cast out as a trouble maker. Indeed this very blog came under intense scrutiny for my own critical views of the way the Socialist party was heading in terms of its methods and ideas. There is much with Bruce and the group of 11 which I agree with most of what they say are spot on to call out the Socialist party’s reformism and dedication to a under consumptionist position economically when it comes to understanding capitalist crisis. Bruce and others including Professor Andrew Kliman who is not a member of the CWI I’d like to point out rightly point towards the Tendency of the rate of profit to fall to find the under lying cause of crisis under capitalism. Why a party cannot co exist with members holding differing views on things I’ll never know. Where is the democracy I wonder? Whilst I don’t agree with everything I can identify with their outlook when it comes to theory. They argue for vigorous theoretical debate in SPEW, based on the actual practice of the Bolsheviks in the pre-revolutionary period. They write, entirely correctly: “democratic centralism prescribes unity on the basis of action, such as programmatic action and activity, and not unity on theory. What is clearer to me though is the fact the revolutionary left and the Marxist and trotskyist left is in crisis and it doesn’t look like a solution is anywhere to be seen as many of them are stuck in their old dogmatic ways and methods. We are going through a period where, it is fair to say, the long-standing organisations of the Trotskyist left are fraying at the edges. We have seen two splits in the space of a year in the SWP. As I write, the Renewal Platform of the International Socialist Organization - the SWP’s erstwhile US group - has been expelled. Workers Power, an orthodox Trotskyist group, has shed a large proportion of its small membership over the last few years. In Ireland, the CWI organisation has itself lost a clutch of experienced members. All these splits have taken place on an extraordinarily thin political basis. We are beginning to recognise the pattern. Comrades, whether through a short, sharp shock (the SWP’s rape debacle) or through a longer disillusionment, come to realise that the grand breakthrough is not, after all, just around the corner. They advance criticisms of the toy town Bolshevism of their organisations, the delusions of grandeur, and set out on their own - whether they jump or are pushed - to really build the movement. What they do not do is sit down and think, and come up with a rounded political alternative. Thus, they drift into liquidationism.

What is the cause of the capitalist crisis ?

At last a debate is taking place within the CWI on the cause of the current capitalist crisis. The opening document released by the Socialist Party EC on the 20th September here http://socialismiscrucial.wordpress.com/2013/09/12/some-revelations-on-method-and-democracy/ However, there is a growing number of comrades within the CWI,I was one of them untilla few weeks ago , who disagree with this "analysis" and we have published our document online here http://69.195.124.91/~brucieba/2013/09/27/what-is-the-cause-of-the-current-capitalist-crisis-critical-document-on-the-cwi-position/ I believe debate on important issues such as this should be aired publicly and oriented towards the workers' movement to win the best workers to our cause and programme Just adding to the debate. I fully support the opposition or the minority if you like. I do think many comrades in the CWI are accepting the leaderships position uncritically with little thought sadly. A critical mind is important for any revolutionary or would be revolutionary . Do take time in reading both documentsa nd make your own mind up not because I or anyone else has told you to think this or that. Remember to think critically at all times. Hold those in control to account.

CWI socialist party play the man not the ball in economic crisis debate

At last the CWI socialist party have published their reply to those who have made criticisms of its economic position. You can read it here if you wish. Warning there is many straw man arguments in there and is a very long draw out piece. http://www.socialistparty.org.uk/articles/17458/20-09-2013/the-causes-of-capitalist-crisis-reply-to-andrew-kliman The piece mainly attacks Marxist Andrew Kliman a university lecture from the USA and a comrade of mine Bruce Wallace from Scotland. Now I wont be giving a long winded reply to this document as its not my place to do so but I do look forward to the response from the opposition which is more than Andrew Kliman who isn’t even a member of the CWI and Bruce Wallace who you'd be forgiven for thinking were the only two who hold Marx’s views on crisis with capitalism. The piece focus's heavily on Andrew Kliman and linking his political standings to his economic ones. Many straw men make a straw man army in my view and this document has straw men all over the shop sadly. At least we have seen the Law of the tendency of the rate of profit to fall finally get a mention in a socialist party official piece. SO far up to now you would struggle to find any mention of the law that Karl Marx brilliantly describes in 3 chapters of his famous works in capital volume 3. Sadly this is dismissed as nonsense by the CWI and Bruce and Andrew are lambasted for their so called dogmatic stance when it comes to theories of capitalist crisis. So by this we should be calling Karl Marx a dogmatist too right? I am a supporter of Bruce Wallace and Andrew Kliman and defend their right to oppose the economic position of the CWI which I have to be honest I am far from convinced with either. Bruce has made many attempts o raise this debate and has been trying for over a year now only now September 2013 something is published and now it is I do hope and I am sure it will be scrutinised hugely by good Marxists out there like Andrew Kliman and Michael Roberts Mick Brooks etc who certainly know their stuff on economic issues. One of the worst parts of all this is the CWI's tactics of trying to shut down debate up until now when it’s on their terms. Bruce Wallace was uninvited to the CWI School in Belgium this year which is a crying shame and has only lead to further frustrations from Bruce and others who are equally confused by the CWI position. The CWI seem to have tried to link Bruce's support for Andrew Klimans economic position to his political one of supporting a state capitalist position trying to link him to the SWP quite laughable really when you think about it if you've ever read any of Klimans works which I have done. Bruce Wallace and others in the CWI do not share Andrew Klimans views of this and a collapsing capitalism and what the CWI describe as a non dialectical position yet they are all lumped in together and Bruce is made out to be this nutty rag tag who is a supporter of this isolated academic . Guilty by association in other words. Bruce is a fine comrde and has taught me many things from his blog and online.. I do think a lot of the attacks in the piece are false and wrong but I will let others reply to this who are directly involved. I would just like to offer my solidarity to Bruce and others who are in official opposition to theCWI leadership on the causes of the capitalist crisis. It is a long document as I say and you will need a while to read it all through properly but I would urge all who read it to read it with a critical eye and do not just swallow the CWI line unapologetically. There may be parts which may be quite right and others are not but as any Marxist should o we should not just accept what a party who claims to be Marxist as read and a given. An all sided rounded out analysis of the position must be under taken. I am sure this debate will run and run. I lend my support to Bruce Wallace and others and there is more all the time that is questioning the economic analysis of the CWI and are right to do so in my view. I will be sharing and publishing any of the opposition’s pieces if they don’t mind me doing so and offering a platform to understand the debate in its entirety. This is just the start there will be many more exchanges.

Why the underconsumptionists appear to be winning the argument

This is the perception anyway. The underconsumptionist argument detailed by myself and Bruce and Steve Dobbs in various blogs in the last few months has detailed how they as revolutionaries try to explain the crisis. It is clear that this is a popular and highly thought of position certainly within the trade unions anyway. This is a worry and not just for Marxists. If the trade union movement or the labour movement believe in reforming capitalism and that it is simply a lack of demand that is hampering the capitalist mode of production from investing then we are indeed in a very very bad place indeed. I do believe the under consumption position is so wide spread is because it is easy. It is easy to understand and then consider yourself a Marxist if you get it which frankly isn’t hard. You don’t need to read Marx or Lenin or any Marxist economist if you believe that there is no such thing as a falling rate of profit or if you do and just consider it maybe as part of a multi causal cause of a crisis under capitalism then you nod to yourself and carry on This was in fact my position for a long time and due to me not critically thinking and not questioning the position and the economic analysis of my own party I just took this explanation as read. I have now met a fantastic group of Marxists and have now started to root out the causes of capitalist crisis and Marx himself provided us with a brilliant and well thought out explanation and it is an amazement that more Marxists do not and refuse to take this up. I do wonder why. Maybe the implications of what Marx says is too much for some and the status quo is something however much some may detest it maybe just too great to get rid of all together ? But as I say holding a under consumptions view on the cause of the crisis and all crisis's is a quite simple and yet it is not a view that is helpful to the labour movement. Under consumptionism which in affect is a Keynesian idea and as a result is a bourgeois idea and even Keynes was not on the side of the workers so why some bring this into the labour movement I have no idea. Maybe they fear the socialist revolution more than the capitalists themselves? As I say this is an easy position to get to grips with all be it not a Marxist position at all as I shall explain. “For Marxists, capitalism goes into economic slump because profitability drops so much that the mass of profit starts to fall. This leads to capitalists stopping investment in real production. If credit is provided, investors use their money to invest in other assets that are not productive like property or speculating in shares. Thus this capital becomes fictitious. It will not stop the eventual slump but merely delay it. Once enough capital value (of money, labour and plant) is destroyed and profitability is restored, those capitalists that are left will start to invest again and the ‘liquidity trap’ will end. Just as huge dollops of credit will not stop a slump under capitalism; neither will huge dollops of credit revive capitalism, if profitability is not right.... Slumps cannot be avoided under capitalism, because they are necessary to restore profitability when it gets too low.” The laws of motion that Marx identified in the capitalist mode of production, including the Law of the Tendency of the Rate of Profit to Fall (LTRPF), are responsible for booms and slumps and crises. Quite often you will get arguments like this below on the left and must be taken to task as Steve Dobbs a fine comrade and a comrade I have huge respect for has done in his blogs repeatably . “The reality is the capitalist system has reached its limits. In the past, it was able to develop the productive forces at a colossal pace. The recent period of globalization and intensification of world trade reflects the latest efforts of the system to overcome its contradictions. Credit was used to extend the market beyond the limits of capitalism but this has now reached its limits..... While corporations are flush with cash, they are not prepared to invest given the lack of markets but without investment there can be no recovery. This, in turn, adds to a collapse in demand. It is a vicious circle.” The capitalist system has reached an impasse. Sound familiar? It gets better: “Marx analysed capitalism long ago. He explained the contradictions of a system based upon the drive for profit. The capitalists employ workers in order to squeeze surplus value from their labour. This surplus value is then reinvested by the capitalists to make more money which serves to develop the productive forces. However, the barrier to capitalism is capital itself. The outpouring of commodities seeking new markets reaches a crescendo at the height of the boom. However, there comes a point where the limits of the market come into collision with the unlimited production of commodities. This leads to an inevitable crisis of over-production, as witnessed in 2008-9. Everything comes to a complete standstill. The capitalist system is paralyzed, not because people do not want things, but because of a shortage of effective demand, i.e. money to buy the products.” So now the problem is the limits of the market – there is not enough demand for all these commodities produced, so there is overproduction of commodities. This is nonsense. Workers can never afford to buy back the goods they produce, so how can this be a cause of crisis? Overproduction is never in relation to consumer demand, as I explained previously. “A fall in the rate of profit and accelerated accumulation are different expressions of the same process only in so far as both reflect the development of productiveness.... Those economists, therefore, who, like Ricardo, regard the capitalist mode of production as absolute, feel at this point that it creates a barrier itself, and for this reason attribute the barrier to Nature (in the theory of rent), not to production. But the main thing about their horror of the falling rate of profit is the feeling that capitalist production meets in the development of its productive forces a barrier which has nothing to do with the production of wealth as such; and this peculiar barrier testifies to the limitations and to the merely historical, transitory character of the capitalist mode of production; testifies that for the production of wealth, it is not an absolute mode, moreover, that at a certain stage it rather conflicts with its further development.” (Marx, Capital vol 3, Chapter 15, http://www.marxists.org/archive/marx/works/1894-c3/ch15.htm) As Marx states, the capitalist mode of production becomes the barrier to itself because of the falling rate of profit, which means that capital can no longer accumulate at the same pace. This is rooted in production, not the market. In fact, Marx explicitly cites the falling rate of profit as the underlying cause of over-production and crises: “On the other hand, the rate of self-expansion of the total capital, or the rate of profit, being the goad of capitalist production (just as self-expansion of capital is its only purpose), its fall checks the formation of new independent capitals and thus appears as a threat to the development of the capitalist production process. It [the falling rate of profit] breeds over-production, speculation, crises, and surplus-capital alongside surplus-population.” (Marx, Capital vol 3, Chapter 15, http://www.marxists.org/archive/marx/works/1894-c3/ch15.htm) Clearly, having large amounts of debt in itself does not cause crisis. Remember, the highest percentage of debt to GDP, 250%, the British government had was after WW2, but it was able to pay off most of the debt over the proceeding decades on the basis of the high rate of profit. http://www.google.com/url?q=http%3A%2F%2Fsocialismiscrucial.files.wordpress.com%2F2013%2F08%2Fuk-debt.jpg&sa=D&sntz=1&usg=AFQjCNFxiv0oIittK6-hP5A1Ey7cg2wT6w With thanks and links and references to comrade Steve dobbs who blogs at http://wp.me/p2NvOP-36

Reclaiming Marx the need for a debate on the current capitalist crisis

I am increasingly hoping we get a debate on the current cause for the capitalist crisis. I think within the CWI the debate is needed as there is some confusion over how we understand the current crisis. There has been a statement put out late last week in regards to Bruce Wallace of the Scottish section of the CWI. I’ve been told this statements puts the record straight I think it does anything but that. The statement is full of inaccuracies and smears on comrade Bruce sadly. The CWI seem to want to have the debate on the cause of the crisis but on their terms and seem confident they have the right ideas which I am still unconvinced of. My regional full timer the other day tried to explain the CWI’s position and what they see as the cause but I was left feeling less than convinced by the ideas I was being told. In the CWI statement they statee : ‘’We are confident that a calm and thorough debate will show that the political approach of the CWI leadership is correct on these issues. And that the position of Bruce Wallace is a one-sided, dogmatic interpretation of Marxism and is therefore false.’’ If the CWI are so confident I am not sure still till this day why Bruce has been banned from attending the CWI school this summer in Belgium. He wished to debate the crisis and for me someone who attended last years school I would have thought this would be a excellent opportunity to debate the ideas of marx and if we have the right analysis or not. I see no problem withallowing Bruce to go and debating with others there. Even the sects have picked up on this debate now in the weekly worker the CPGB line up with the CWI in attacking Bruce sadly. Bruce explains what debate should be all about here “‘’Debate is a method of interactive and representational argument. Debate is a broader form of argument than deductive reasoning, which only examines whether a conclusion is a consequence of premises, and factual argument, which only examines what is or isn’t the case, or rhetoric, which is a technique of persuasion. Though logical consistency, factual accuracy and some degree of emotional appeal to the audience are important elements of the art of persuasion, in debating, one side often prevails over the other side by presenting a superior “context” and/or framework of the issue, which is far more subtle and strategic. The outcome of a debate depends upon consensus or some formal way of reaching a resolution, rather than the objective facts as such. In a formal debating contest, there are rules for participants to discuss and decide on differences, within a framework defining how they will interact. Debating is commonly carried out in many assemblies of various types to discuss matters and to make resolutions about action to be taken, often by a vote. Deliberative bodies such as parliaments, legislative assemblies, and meetings of all sorts engage in debates.’’ This form of debate is more in keeping with bourgeois notions of democracy. In the Marxist movement the actual method of reaching correct conclusions in relation to the waging of the class war is ‘’polemic’’. Polemic is different from debate as it is a clash of completely opposed ideas. A polemic is a contentious argument that is intended to establish the truth of a specific understanding and the falsity of the contrary position. Polemics are mostly seen in arguments about very controversial topics. The art or practice of such argumentation is called polemics. A person who often writes polemics, or who speaks polemically, is a polemicist or a polemic. The word is derived from the Greek πολεμικός (polemikos), meaning “warlike, hostile”, which comes from πόλεμος (polemos), “war”.” I would like to see this debate properly take place comrades have told me there are more important things to focus on but what could be more important than understanding the current crisis and knowing how to react best to it ? I think many have criticised Bruce and his blog for its so called tone and having a go at other comrades in the party whilst I can understand Bruce’s frustration in the lack of a debate it hink talking on the tone and his so called behaviour is a red herring and miss’s the politics which is what this has got to be allabout. I’ve never met Bruce but I’ve never had a problem with him personally I find him a well read good thinking Marxist who has stayed loay l to the CWI. I think we should value good well read Marxists like Bruce who can offer us insight into marx and help others learn in the process. I certainly don’t think his tone is rude or anything like that it’s a question of how you interpret his blog I find it a mine of information and I’ve learnt much from it already. The CWI accuse Bruce of a one sided dogmatic approach but this is the same approach of Marx so I am not sure what they mean by that Bruce is simply returning marx from the grave to help us today with the current crisis and to help us understand the system in which to over throw it. Marx didn’t call the law for the tendancy for the rate of profit to fall the most important political economic law for nothing I think we should take marx’s works very seriously afterall we claim marx to be right so lets look again at his works especially capital. ‘’This law, and it is the most important law of political economy, is that the rate of profit has a tendency to fall with the progress of capitalist production.’’ Grundrisse The MOST IMPORTANT LAW! ‘’So where does this tendency for the general rate of profit to fall come from? Before this question is answered, one may point out that it has caused a great deal of anxiety to bourgeois political economy. The whole of the Ricardian and Malthusian school is a cry of woe over the day of judgement this process would inevitably bring about, since capitalist production is the production of profit, hence loses its stimulus, the soul which animates it, with the fall in this profit.’’ Grundrisse Comrades must have the right to raise disagreements at anytime the party itself doesn’t have the right to say when is right and when isn’t to raise concerns. Surely the summer when there is traditionally a quieter time could be a good opportunity to discuss this and the nature of the capitalist crisis. Those who have confidence in their ideas surely have nothing to fear lets have this debate out in the open for all members to learn from. ‘’It is ridiculous to say that Bruce Wallace must first raise such a debate in the Scottish Section before it can be discussed elsewhere. This is not a Scottish issue, it’s an International issue of our analysis of the current crisis and where it is sorely lacking in Marxist terms. We should, as an organisation internationally welcome the discussion and grow from it, rather than dodging the issue and hoping it will go away. If we cannot discuss Marxist analysis of the economic crisis openly and confidently before the membership and the wider working class then frankly what can we do?’’ With thanks to bruce Wallace and his excellent blog which you can read at http://69.195.124.91/~brucieba/

Is an Underconsumptionist theory relative to today’s current crisis?

i received an interesting reply on my blog today in response to yesterdays post on Marx’s theory on the tendency for the rate of profit to fall. This is their reply. I’ll keep them nameless Justin case of any awkwardness. “No, it isn't. Firstly, Marx distinguishes between financial crises and economic crises. The former as he points out relates to crises that emanate from the circulation of money rather than capital. They emanate, therefore, in financial markets rather than in the real economy. A Stock Market, Bond market or Property Market crash would be an example. Marx points out those crises can remain within that sphere, or may spread out to affect the real economy i.e. through a Credit Crunch. But, such crises have nothing to do with the Tendency for the Rate of Profit to fall. But, the latter also has little or nothing to do with crises in the real economy either, crises that Marx describes as arising from an overproduction of capital. For one thing, Marx points out that although there is a minimum for wages, set by the Value of Labour Power, there is no minimum rate or amount of profit. Subjectively, of course, there may be some point at which capitalists decide to consume unproductively or speculate rather than invest, but such action Marx describes, in itself tends to cause accumulation to slow down, and the rate of profit to rise. A falling rate of profit is a long-term tendency, whereas crises are sharp ruptures. The former cannot be the cause of the latter. Marx sets out the very many counter tendencies to the Falling Rate of Profit, to an extent that it’s clear that in practice there is no reason why the Rate of Profit should fall. In fact, over the last 30 years its clear it has been rising sharply.” Let’s look at the whole Underconsumptionist theory if we will use my good comrade Bruce Wallace’s and his excellent blog at http://69.195.124.91/~brucieba/2013/03/18/does-the-cwi-have-an-underconsumptionist-position/ So here is an extract from a paper Bruce wrote to clarify his own thoughts on the issue: What is Over-Production? There has been an ongoing debate amongst Marxists since the death of the founder of scientific socialism in 1883 as to the meaning of his critique of capitalism. In terms of historical time, a not particularly lengthy period, of one hundred and twenty nine years, actually only some four to five generations, revolutionary socialists have tended towards two camps with various offshoots. One group has adhered to an interpretation of Marx’s critique of capitalism that the reason for capitalist crisis is that the working class does not receive the full fruits of their labour in wages. Surplus value, which equals profit, is the unpaid labour of the working class and therefore workers, the mass of the population, will have insufficient means to buy back all the commodities that capitalism produces. Therefore capitalist crisis is primarily caused by over-production of commodities for which there is an insufficient market i.e. in economic speak demand. Supporters of this view are called underconsumptionists. Other Marxists reject this view as simplistic and not based on a thorough understanding of Marx’s critique of capitalism and that the underconsumptionist position is, in fact, not a Marxist position at all, but a distortion of his ideas. Why should this be an important issue today? Does it really matter if one group of Marxists disagrees with another group over the interpretation of Marx’s critique of capitalism? Surely we are all opponents of capitalism and so what if we disagree over what causes capitalist crisis, surely the point is to overthrow the system? In fact this is probably one of the most important disputes in the history of the revolutionary movement. It not only deals with the fundamental meaning of Marxism but also has direct implications for theory, strategy, tactics and programme. It also impacts on how we view Marxist’s vision of the future socialist society. So this paper will hopefully attempt to address some of these issues in plain language without recourse to mathematics. The Manifesto Apparent support for the under-consumptionist position has been sought in the Communist Manifesto of 1848 by Karl Marx and Fredrik Engel’s where they state: ‘It is enough to mention the commercial crises that, by their periodical return, put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, is periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity — the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce are destroyed. And why? Because there is too much civilization, too much means of subsistence, too much industry, too much commerce’. The Socialist Party of England and Wales Website has a commentary on the Manifesto which explains: ‘The Manifesto outlines how destructive periods of recession are inherent in capitalism. It appears that “too much” is produced, but the working class receives far less in wages than the value of the goods they produce. The “consumers” of today can no longer buy the products which they themselves, as workers, produced only yesterday’! Unfortunately this is reading something into the Manifesto which isn’t actually there. This is all that the Manifesto states: ‘Previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity — the epidemic of over-production’. There is no mention at all that the destruction of productive forces is because, ‘The “consumers” of today can no longer buy the products which they themselves, as workers, produced only yesterday’! This is the classic underconsumptionist ‘common sense’ explanation of capitalist crisis projected onto the description of crisis by Marx and Engel’s in 1848. The founders of scientific socialism never stated, anywhere, that capitalist crisis is caused by the under-consumption of the ‘products’ of capitalism. And the reason that there isn’t an explanation in the Manifesto as to how crises of over-production occur, not one jot, is because in 1848 neither Marx nor Engel’s knew what the causes of over-production actually were. Their referral to over-production is purely a description of the form of capitalist crisis exhibited at the time, not an analysis of causation. What’s in a word? The word ‘product’ is not a description that Marx went on to use in his critique of capitalism in Capital. The word ‘product’ appears in the Manifesto in 1848 but that was before Marx’s intellectual labours uncovered the way that capitalism actually worked, but he only reached this conclusion in 1858 when he was compiling his Grundrisse notebooks. He discovered that capitalism produces commodities which can be bought and sold for a profit. A ‘product’ is a completely different thing and could be the outcome of the labour of a prehistoric caveman, which certainly wasn’t ever produced to make a profit. Marx dedicated the first chapter of volume one of Capital to ‘Commodities’. The reason for this is that Marx had discovered that commodities are the ‘cell form’ of capitalist production and any analysis of the system needed to start from there. What characterises the capitalist mode of production, unlike all other pre-existing modes of production, is the presentation of ‘an immense accumulation of commodities’ (Capital Vol I on the very first page!). This ‘minor’ terminological and historical blip being cleared up, what actually was Marx’s view of over-production? References http://69.195.124.91/~brucieba/2013/03/18/does-the-cwi-have-an-underconsumptionist-position/

Marx’s theory of the tendency of the rate of profit to fall

This is Karl Marx’s basic ideas of financial crisis. It’s not something which is easily understood and many on the left today fail to grasp Marx’s teachings sadly. But here I will point readers in the right direction. Marx described his idea of how crisis’s come about and how they can be counters acted and how they will eventually be overcome. This is basic Marxism which all comrades must try and grasp if we are to understand the current economic crisis and produce a well rounded Marxist analysis and a alternative to the crisis which as Marxist’s must be nothing less than the over throw of the current order the removal of the capitalist system in place of a socialist planned democratic economy based on the needs of the many. The tendancy for the rate of profit is basically summed up in the notion thatcapitalits as technology advances naturally uses’s more machinery to help produce comodites and as Labour is the source of profit the capitalist use’s less of labour power variable capital if you like the tendancy for the rate of profit to fall is thus. One blog I would point you in the direction of is my comrade from Scotland Bruce Wallace http://69.195.124.91/~brucieba/ Bruce is a highly developed comrade in terms of political economy and Marxist economics that the CWI should treasure and look to. Bruce’s blog is excellent in expressing and educating other socialists on the ideas of Marx and Marx’s ideas of crisis. Bruce like others remains true to the ideas of Marx and Marx’s ides in volume 3 which I’d advice all comrades to read closely the ideas of crisis and how Marx understands crisis’s to develop. To quote from Bruce’s excellent blog below. “We must clarify exactly what is meant by the rate of profit in capitalism because the term profits can be quite misleading. The rate of profit is determined by the rate of return on the amount of capital invested (advanced in Marx’s terminology). If a capitalist advances a capital of £100 and the rate of profit is 20% they will get their original investment back plus £20 in profit. The rate of profit is therefore a percentage rate of return on investment. The £20 the capitalist reaps as profit at the end of the production process is what is regarded as the mass of profit. From this it is easy to see that if the rate of profit falls to say 10% but the capitalist advances £1000 that the mass of profit will be £100. So even with a lower rate of profit the capitalist can recoup a greater mass of profit. This is an important point to remember as we proceed with Marx’s theory. What is clear is that the rate of profit is what the capitalist expects to make on the investment of their capital based on the existing rate of profit. So caution is required when reading economic literature that refers to the abstract term ‘profits’ as the rate and mass of profit are two distinctly different things. The rate is the expectation and the mass is the result. Capital is attracted to the areas of industry which are making the highest rate of profit. This is not based on the independent decision making of individual capitalists. In modern capitalism there is a free flow of capital to the most profitable sectors and this process is automatically governed by the stock market. Through the coercive force of competition the rate of profit tends to equalize and to fall across the economy as a whole. This applies to the world economy and not just within national economies. The less productive, and hence less profitable, industries go out of business or are absorbed by rivals. So it is the rate of profit which is the motive force of competition and for a greater and greater concentration and centralisation of capital. There is a growth of larger corporations and monopolies with their integration into banking and finance. This is what Marx means by an increase in the mass of accumulated capital although a fall in the rate of profit means a decline in the rate of accumulation. In other words economic growth slows but the concentration of capital (its mass) increases. This is very much like the evolution of a black hole in physics. How the LTRPF, in tandem with accumulation, works out in practice to produce crisis is explained by Marx in a chapter in Capital Volume III titled “Development of the Law’s Internal Contradictions”. Let’s look at how it works? How it Works in Practice The continuous downward pressure on the rate of profit brings forth what Marx called counteracting influences or tendencies and these are the main ones. • More intense exploitation of labour (increasing productivity) • Reduction of wages below their value (wage cuts) • Cheapening of the elements of constant capital (reducing the cost of machinery) • The relative surplus population (using unemployment to force down wages and conditions)) • Foreign trade (the expansion of global capitalism) • The increase in share capital (the growth of banking and finance/debt” All these points above are crucial to understanding how the tendency for the rate of profit LTRPF, can be delayed and held up. But as we know this can only delay the v LTRPF to fall. The general tendency is for this to eventually fall. The addition of credit in the capitalist system in the last 10- 20 years extending this process was a method adapted to the capitalist system only to stem the crisis and put it off for another day. Bruce in his superb blog goes on to explain what this means in practice “The LTRPF is primarily a historical law whose influence is felt over a protracted period of time resulting in major periodic crisis but it also is the underlying reason for ‘normal’ periodic recessions. In this sense the law has two aspects. Marx analysed the impact of the counter tendencies on the long term operation of the law. As he explains in relation to increasing the exploitation of the working class either through improving productivity or lengthening the working day: ‘This factor does not abolish the general law. But it causes that law to act rather as a tendency, i.e., as a law whose absolute action is checked, retarded, and weakened, by counteracting circumstances’. (Capital Vol III ) Earlier, in relation to the reduction of surplus value embodied in commodities due to accumulation offsetting a fall in the rate of profit by cheapening the cost of both productive and consumer goods he wrote: ‘But in reality, as we have seen, the rate of profit will fall in the long run. In no case does the fall in the price of any individual commodity by itself give a clue to the rate of profit. Everything depends on the magnitude of the total capital expended in its production’. (Capital Vol III ) And: Thus the law acts only as a tendency. And it is only under certain circumstances and only after long periods that its effects become strikingly pronounced’ Recourse to credit and finance was a particular feature of the neo-liberal boom. There was a huge growth in both consumer and government debt which extended the period of the boom but it did not negate the general law. Thus recourse to what Marx called fictitious capital laid the basis for a sovereign debt and fiscal crisis. This is fictitious i.e. imaginary value, because it is based purely on paper assets, promissory notes on future profits, yet the root of the crisis lay in production and the long term decline in the rate of profit. The law appears to operate cyclically and governs the onset of recessions. This has been proven in excellent research by José Granados (2012): ‘‘Data on 251 quarters of the U.S. economy show that recessions are preceded by declines in profits. Profits stop growing and start falling four or five quarters before a recession. They strongly recover immediately after the recession. Since investment is to a large extent determined by profitability and investment is a major component of demand, the fall in profits leading to a fall in investment, in turn to a fall in demand, seems to be a basic mechanism in the causation of recessions.’ Thus we have periodic booms and slumps. Normally there are recessions approximately every eight years or so that are quickly overcome but the process is also cumulative. As accumulation proceeds the historical operation of the law builds up pressure for major generalised crises over a longer timescale. We have seen this in the history of capitalism where there have been four major generalised crises; the Long Depression of the 1870’s, the Great Depression of the 1930’s, the crisis of the 1970’s and todays Long Depression. The falling rate of profit is the underlying and indirect force driving these crises all of which have specific and unique features. In some ways this is akin to the movement of the earth’s tectonic plates that build up pressure at fault lines in the earth’s crust eventually causing earthquakes. The LTRPF is exactly like this; an indirect force acting on the dynamics of capitalist development that causes economic earthquakes! “ Bruce finnish’s with this section “The crisis is far from over as more sober economic commentators have pointed out in a world loaded with geopolitical and economic risk. It is just as Karl Marx predicted for capitalism: ‘Its historical mission is unconstrained development in geometrical progression of the productivity of human labour. It goes back on its mission whenever, as here, it checks the development of productivity. It thus demonstrates again that it is becoming senile and that it is more and more outlived’. (Capital Vol III ) Capitalism is senile and outlived because its motive force, the rate of profit, is weak. In order to restore it and usher in a renewed period of dynamic growth there must be the mass destruction of capital value and intensified exploitation of the working class, a renewed major global economic slump is therefore inevitable at some point. Even a major recovery will sow the seeds for a renewed downturn and these are becoming ever more violent and catastrophic in their effect. Only One Alternative Marxists are in favour of revolution not because capitalism is an unjust or unequal form of society. Of course capitalism is just that but there is another more pressing reason. Marx showed that capitalism leads to ever more destructive economic crises. Capitalism’s lust to expand endlessly inevitably hits ever more insurmountable barriers due to the crisis tendency that is inbuilt into the very logic of the system itself. As Marx stipulated the barrier to capital in these terms is capital itself. Unless capitalism is overthrown the prospects for humanity are grim including the exhaustion of the earth’s natural resources or destructive war but there is an alternative: ‘The contradiction between the general social power into which capital develops, on the one hand, and the private power of the individual capitalists over these social conditions of production, on the other, becomes ever more irreconcilable, and yet contains the solution of the problem, because it implies at the same time the transformation of the conditions of production into general, common, social, conditions. This transformation stems from the development of the productive forces under capitalist production, and from the ways and means by which this development takes place’. (Marx Capital Vol III) The only alternative to the deepening crisis of capitalism’s ‘creative destruction’ is its abolition as a social system and its replacement with a socialist plan of production on a global scale. Other solutions, such as limited nationalisation, state control of the banks and policies aimed at redistributing wealth for example are completely utopian. Provided capitalist production continues i.e. a system which aims at the production of value, of abstract wealth, in favour of a small minority of society and not to meet general human need more destructive crises are inevitable. Marxists do of course struggle for immediate reforms such as halting the austerity cuts, an increase in wages and a program of public works but only as part of a general strategy towards the overthrow of the capitalist system itself. To argue otherwise, as some on the left have done, that capitalism has somehow solved its problems in the advanced countries negating the need for revolution is flying in the face of reality. The epicentre of the current capitalist crisis is precisely in the advanced capitalist countries where there is such a historic accumulation of the mass of capital. In the advance countries the prospect for the working class is increasing misery and exploitation and the historic decline of the economy. The Greek and Spanish crises show the more advanced European countries an image of their own future as the crisis begins to grip France who’s unemployment has hit 10%. Across Europe more that 20 million workers are jobless and the depression is deepening. Neither will the rise of capitalism in the emerging markets offer a way out as this will lead to exactly the same working out of Marx’s law. China, the world’s second biggest economy, is preparing a massive slump with its huge growth of constant capital. The interconnectedness of the global capitalist economy heralds further conflagrations of more intensity and depth on a world scale than ever before. The long term choice for the working class is stark, socialism or barbarism, and only in the works of Karl Marx can a thought out scientific answer to the way forward be found.” So we can see that the tendancy for the rate of profit to fall is a long term affect with several counter acting measues which can be taken but ultimately can only put off the crisis for another day. The ultimate choice is of a widespread destruction of capital resulting in huge redundancies, mass unemployment and therefore a driving down of labour power to a point where capital can feel confident enough to start to reinvest. Not when the ground is clear for reinvestment will this happen. It is clear that left Keynesian demands will only go so far that we have to take a much bigger look at the overall picture of production and the capitalist system as a whole to understand the long term trends within the system itself. For Marxist’s this should be Marxism 101 but not for an all sadly. A fear of theory and economics leads others to blindly follow others yet a examination of Marx’s works will show many experienced Marxists that the tendency of the rate of profit to fall is spot on and however had they try to disprove it Marx always comes back stronger and even more correct. Lastly I don’t fully understand this myself but am developing my understanding all the time I therefore encourage other comrades and beyond to educate themselves too in the teachings of Marx and Engel’s in economics as it’s crucial to understanding the period we are living through. With huge thanks to comrade Bruce Wallace and his excellent blog for extracts and help. Do check him out if you can. References Marx, K. (2013) Capital Volume I Marxist internet archive http://www.marxists.org/ Marx, K. (2013) Capital Volume II Marxist internet archive http://www.marxists.org/ Marx, K. (2013) Capital Volume III Marxist internet archive http://www.marxists.org/ Marx, K. (2013) Theories of surplus value Marxist internet archive http://www.marxists.org/ Marx , K. (2013) Grundrisse Marxist internet archive http://www.marxists.org/ And lastly comrade Bruce Wallace’s blog http://69.195.124.91/~brucieba/2013/06/11/the-basic-mechanism-of-capitalist-crisis-part-ii/

A split ruling class

From how I see it the ruling class nationally and internationally is split. More or less down the middle anyway on how to react to the crisis of their own capitalist system. Do they go for growth or austerity? It is something which features heavily within the European Union as also with intervention from the IMF The IMF echo’s America’s calls for growth but on what basis it doesn’t make clear. Clearly we live in a time of global economic melt down with no sign of a way out of the present crisis that anyone can see. Even China has seen its growth rates cut by the World Bank today too. There have been concerns whether China can sustain its high growth rate amid a global slowdown The World Bank has cut its growth forecast for China amid warnings of slower but more stable global growth over the coming months. The bank now expects the China to grow 7.7% in 2013, down from its earlier projection of 8.4%. It also cut the forecast for global economic growth to 2.2% from 2.4%. The bank said growth in China, the world's second-largest economy, had slowed as policymakers look to rebalance its growth model. Over the past few decades China has relied heavily on exports and government-led investment to boost its economy. However, a slowdown in key markets such as the US and Europe has seen a decline in demand for Chinese exports, prompting concerns whether China can sustain its high growth rate. This is not just a case of world governments being split and undecided to what to do but whole sections of the bourgeoisie who are finding themselves torn further and further apart on solutions for the crisis. Also take the example of Europe with some parts of the bourgeoisie wanting to make a hasty exit from the EU in order to boost our own competitiveness in terms of pushing down wage labour even further than possible at present whilst others warn against leaving and attack the others for even daring to suggest a exit. The euro zone does not work. No measures have been introduced in order to make it work. In any economic union of the kind that was being envisaged, it is obvious that there will be some areas that are richer and some that are poorer. There will be some areas that import more from the richer areas and vice versa. You will consequently find an economic balance that will reflect itself in a series of economic data. Unless the richer areas are prepared to accept that, as in the US, the centre must in some way or other assist parts of its union - with the richer areas in effect subsidising the poorer areas - then it simply cannot work. This is all rather obvious and many people have been making this point for some time. The overall result of these differing viewpoints amongst the bourgeoisie is a muddle. Whereas it is actually possible to get out of the present downturn, that will not happen, because ultimately this would be tantamount to suicide on the part of the capitalist class. Its difficult to know which way the bourgeoisie will turn next there’re signs of a heightened turn towards protectionism in protecting your own markets with the recent flare-up of solar panels with the EU and China. I am thinking we may see more incidents like this when nations and economies start to get desperate to restart growth further and further desperate measures may be attempted. In Japan right now they are trying a plan which is noted by many economists as radical and risky so waiting to see how that one turns out will be interesting too. What is clear though is that we are in a log jam across the world. No country, government or organisation has the magic formula for getting out of this crisis and many expect things to get a lot worse before they get better. Something will have to give eventually as jams in the system cannot last forever. Watch this space for heightened tensions between global super powers in order to deflect the blame for a lack of growth in their own country on others. A split ruling class as Lenin once said is just one part of a successful revolution. The other parts were a middle class also awake and not sure which way to turn in support of the capitalist or the working class. Lastly a mass revolutionary party which we are far from in any country in the world. Things are just hotting up. Our time may come soon. We must prepare for all eventualities.

world in crisis, central banks not providing the anser

Increasing concerns and contradictions Per-Åke Westerlund, from Offensiv, newspaper of Rättvisepartiet Socialisterna (CWI Sweden) The severe downturn in 2008-09 made the world economy into an experimental workshop. But neither extreme austerity or trillions to the banks has led to a solid recovery. Now there is growing concern among politicians and economists. At the center of concern is the crisis in Europe. In early 2012, both Italy and Spain were close to sovereign defaults, which in turn would have made the whole euro project collapsing. EU’s leading politicians and institutions were scared into taking extreme measures. The European Central Bank, ECB, promised "unlimited access" to capital for both states and banks. Since then, the ECB lent 360 billion euros to Spanish banks and 260 billion into Italian. A large part have been used to buy their respective state bonds. The interest rate gap - how much more it costs for Spain or Italy to borrow than Germany - have fallen from 6-7 percentage to 2-3 percent. The ECB’s generosity is matched by other central banks. The U.S. Federal Reserve is in its fourth round of Quantitative Easing which means that the Fed buys government debt notes for $ 85 billion each month. Japan’s new right-wing government has now embarked on a "quantitative and qualitative" monetary policy in double pace compared to Fed. In two years, the central bank (Bank of Japan, BOJ) will use equivalent to a quarter of Japan’s GDP - the third largest economy - to purchase government bonds, equities and real estate. Central Banks But now there is increasing concern that central banks’ intervention is not the solution, but rather deepens the crisis. "Some of the leading figures in central banking concede they were flying blind when steering their economies," reported the Financial Times (18 April), from the International Monetary Fund’s (IMF) spring meeting. Lorenzo Samgh of the the ECB’s executive board: "We do’nt fully understand what is happening in advanced economies." The head of the Bank of England, Mervyn King, said that no one can be sure that the expansionary monetary policy is correct and wondered if they are “running the risk of reigniting the problems that led to the financial crisis in the first palce?”. Central bank intervention has eased the immediate crisis for the most vulnerable banks and states. But they do not kick start economies - investments in the advanced capitalist countries is still at a record low. However, the new policy opened for sharper conflicts between nation states. The Japanese currency, the yen, has fallen by 25 percent since last year. It has benefited the Japanese export industry, at the expense of for example German and South Korean industry. The IMF’s semi-annual reports from April (Global Financial Stability Report and World Economic Outlook) notes that central banks’ actions have achieved “a broad market rally” but also created new risks. Capital now flows back from the richer countries to developing countries, creating potential instability. The Fed boss Ben Bernanke recently warned that banks’ speculation may increase. IMF But especially worried is the IMF for what happens when easing ends. There is no equivalent in history to learn from. "Continued improvements will require further balance sheet repair in the financial sector and a smooth unwinding of public and private debt overhangs. If progress in addressing these medium-term challenges falters, risks could reappear. The global financial crisis could morph into a more chronic phase marked by a deterioration of financial conditions and recurring bouts of financial instability", writes the IMF. The conditions raised here - balance sheet repair and unwindling of debts - have so far failed, which points towards a more chronic crisis. The second leg of the crisis policy - the extreme austerity measures - have had worse immediate effects. 19.2 million are now unemployed in the euro zone, of which six million in Spain alone. In Greece, youth unemployment is 59.1 percent. The New York Times reported in an article on Greek school children who faint and are searching for food in the bins. The Portuguese Prime Minister Pedro Passos Caolho - a strong proponent of the infamous Troika (IMF, EU and ECB) austerity - promised in 2011 that "two terrible years" would be followed by recovery. But as a result of the extreme austerity, in 2013 Portugal "faces a much deeper and longer recession than the government or international lenders had foreseen" (Financial Times). The IMF estimated in April that the risk of recession (the economy contracts) in the euro zone was 50 percent. Since then, the ECB president Draghi warned that even France is dragged deeper into the crisis. The EU has given Spain and France two additional years to meet the rule that budget deficits should not exceed three percent of GDP. Under new rules they would otherwise been fined. In a large survey among capitalists and finance investors in Europe, made by the credit rating company Fitch, a large majority believe this year’s calm in Europe is transient. "Fitch warns in a statement that it [2013] can once again become a summer marked by the euro crisis, just as in 2011 and 2012, since there is a strong contradiction between the recent stock market rally and euro zone recession and rising unemployment." (From Swedish daily, Dagens Industri). No capitalist solution None of the capitalist institutions have a solution. Many warn that austerity has gone too far, but stil emphasise the need for a balanced budget for the "medium term". How quickly the Cyprus crisis threatened to spread shows that EU countries need a banking union, writes the IMF in its report. And before the ECB’s "limitless" capital flow eased the crisis, leading EU politicians like Germany’s Angela Merkel and European Commission President Barrosso put forward the EU needed a much tighter budget policy and synchronisation. But national interests and conflicts makes especielly German politicians hesitating. The risk, in their view, is that Germany then definitely become the guarantor of banks across Europe. In parallel with the growing contradictions within the EU member states there is a sharp increase of distrust against the EU itself. In Spain today 72 percent are critical of the EU, against 23 per cent before the crisis. Germany the increase is from 36 to 59 percent. The crisis has been exploited to push through many of the counter-reforms the capitalists dreamed of. Worse pensions in Italy, easier to fire workers in Spain, pay cuts of 50 per cent in Greece and so on. Now the capitalists increase their pressure on French President Hollande go the same way. He has already abolished the capital gains tax and promised to reduce the cost of unemployment insurance, pensions and municipalities. At the same time, the political pressure from below is increasing. In a French opinion poll, 70 percent believes a "social explosion" is possible in the coming months. The IMF in April again lowered its forecast for world economic growth this year to 3.3 percent (though 3.5 in October). World trade is expected to only increase by 3.6 percent this year after 2.5 percent last year. The index of large corporate purchasing managers in both the EU and Japan is still below 50, indicating that the economy is not growing. But even the index for China is just over 50. China China’s economy - the world’s second-largest, estimated to overtake the U.S. before 2020 - is now slowing sharply. The large stimulus package in 2009, which held up growth through massive investment, is now hitting back with full force. Debts of municipalities and provinces is estimated at between 20 and 40 percent of the country’s GDP. In the first quarter of this year these debts increased twice as fast as in the same period in 2012. The IMF and politicians in the West are talking about how consumption in China must increase and investment must go down. But lowering the investment share of GDP from the current 50 percent to 30 percent in a position when economic growth will be 6 percent instead of the previous 10 percent "would cause a depression, all on its own", concludes economics columnist Martin Wolf of the Financial Times. Demand would collapse, with considerable effects on the world economy. Governments and capitalist classes now places greater pressure on other states. The U.S. wants to see greater demand in Germany and Europe, while European politicians requires that the deficits in the U.S. and Japan are reduced. The budget deficit in Japan this year is near 10 percent of GDP for the fifth consecutive year. Public debt is expected to be 255 percent of GDP in 2018. The U.S. deficit is five per cent of GDP and the debt is 110 percent. Growth in the US is expected this year to be the highest of the developed capitalist countries, 1.2 percent. But the forecast is uncertain since the automatic cuts, the sequester, will have effect in the latter half of the year. With the failures of "unorthodox methods" more and more people will realise that there is no solution within the framework of the capitalist system. The resistance from workers and poor will grow, like for example the general strike in Portugal in early March, which was the largest since the revolution in 1974. The task for socialists is to build new workers’ parties with a clear socialist answer to the crisis.

The detachment of the political class in Britain

The political class our current crop of politicians who are a professional class in their own right now you’d say now have been slowly and slowly detaching themselves from society and understanding social process’s. In this day and age of political think tanks and political advisors is directly linked to the way the political parties have lost their supporter s base the 3 major political parties currently do not have much more than a quarter of a million members and not even a million between them . This in my view has lead to a bigger disconnect with understanding the moves and changes in society. In the past the political class could command a fair bit of respect and in a strange way they still do but now a days after the Mp expenses crisis and then the phone hacking where politicians has lead to a breaking down of trust and confidence in our so called politicians. Of course the move of the political class further and further to the right has played its part where now the so called centre ground is now further to the right than we have ever seen. The political class used to be drawn from small business owners and landlords but now much of our MP’s are former lawyers, solicitors bankers even who have a disconnect clearly with everyday life. This may seem an obvious point but it’s important to understand when we are looking for political representation. We still have a vote and a big emphasis is placed on it when elections come around in the UK. Oh you must use your vote you don’t know how lucky you are kind of thing yet all we are voting for more often than not is who will be our government who screw us over next. Is this much of a choice? Of course not so wherever we can it is important for Marxists to stand in bourgeois elections to provide an alternative and to at least try and reach people who have been taken in by the political class who see them still as our masters. People are becoming more and more disgusted with politicians in the pub every weekend I’m told how much our MP’s are thief’s corrupt and in it just for themselves and in many ways they are. But no politician today goes out their way to confront this image they have themselves created. They almost seem to revel in this thought and image and play off the fact they re dis trusted and have become further detached from the person on the street. The fact that MP’s are so distrusted now is an interesting situation when people have little faith in the establishment as they do right now with low levels of confidence in our police and media establishments too this can be fertile ground for new movements and new thinking. As we have seen the springing up of occupy and the tents movement in a so called new form of democracy where something new and different was tried was a direct out pouring of dis trust of politicians to deal with the crisis we find ourselves in today that’s capitalism in decay as a economic system that can benefit the many. Occupy wanted little if anything to do with politicians and tried to be far more democratic focusing on the banks and the financial institutions in London and around the globe if we’re honest to focus their anger. This was a marked change as many times down the years when there is anger or a protest movement it normally involves lobbying or protesting against the government of the day. The fact that people went and set up camps and tent villages outside major financial districts showed for me a marked change in people’s consciousness and ability to identify where this crisis has come from and where we must focus our energy in highlighting. The recent growth of UKIP is a interesting development again too as they try to pose themselves as anti establishment and down with the common man on the street clearly a image they are going with for now to court a popularize right wing vote fairly successfully taking 25% of a popular vote n the recent county council elections clearly shows they are having a impact and a big one at that. Not wishing to over play the UKIP threat at this stage as there are still opportunities for the left to get its act together it is something we should keep in mind too. But lastly a political class with seemingly no direction or any real ideological base any longer is not only a danger to us but to its own existence I think with no clear out and out leader of a political class the idea of a technocratic government a so called national government used in the past during crisis’s cannot be ruled out either to stabilise the ruling class during times of social unrest.

The lull before the coming storm

In Britain today it may appear relatively quiet on the class struggle front there has been little in the way of mass action by workers so far this year and you’d be forgiven for thinking workers are just keeping their heads down to avoid attacks. Of course this will not last and mass social explosions can erupt at anytime be it next week, next month or next year we as Marxists know that struggle will break out again on a mass scale what form it comes in we cannot predict. If no lead is given by the labour movement or the union bureaucracy and the right wing in the unions are seen as a block on workers taking action we could see mass social explosions in all sorts of different way we can’t even rule out riots again in our inner cities where people’s anger is burning up with rage. What is clear to me is that in 2012 it was the year that the Tories were exposed as a government for the rich of the rich and the gulf in wealth from the top 10% and the bottom 10% had become glaringly obvious to many. Many ask why people are not fighting back. We have to remember people’s consciousness always lags behind the reality of the current situation. Just having mass planned poverty which in affect is austerity’s true name does not necessarily equal mass resistance. Only the disappointments in people’s expectations encourage them to take another route to venting their frustrations and mass struggle can break out then. The trade unions are seen by many as not relevant to their situations, many are not even aware of trade unions still and secondly do not know what a trade union can do for them. The unions themselves do not help this by constantly selling their members out barring a few fighting left unions such as the PCS and the RMT for example. Unions need to appeal to people and fight for them. It’s no coincidence that union membership increased around N30 when workers were seeing a lead being given and felt encouraged to get involved and fight back. Since the sell out by Dave Prentice and other right wing trade union leaders people have understandably felt demoralised. This will not last and new issues even small ones can spark a mass response. I mean a small local campaign to save the Lewisham A and E drew in mass numbers just imagine if a national demonstration on a weekend was called by the trade unions to save the NHS it could be massive. What is clear though is that although things may seem quiet in Britain right now and things appear calm things are bubbling away under the surface cuts have not stopped raining down on the working class and the anger is still there if not heightened due to the lack of an outlet as yet. This will change it has to a dam will break if an unsustainable amount of pressure exists behind it this will be the Sam in the coming period. We as socialists and Marxists must be aware to these changes coming and be prepared to run to catch up as when the working class moves it can move frighteningly quickly if we have the correct perspectives and ideas we can be in the best position to give a clear direction for the overall victory of struggles. For the overall direction to change society on a socialist basis to meet the needs of the many not just the few.

Youth in revolt Socialist party national youth meeting discuss perspectives

This weekend I attended the socialist party’s national youth meeting in London. It was a whole weekend of debate, discussion and the way forward. Around 80 members of the party attended in a cold wet February weekend and a great level of political understanding was felt by all. The Saturday afternoon was kicked off by Hannah Sell the deputy general secretary of the socialist party who lead off quite rightly on the international global struggle against the global economic crisis and the catastrophic social disasters which have followed from that. Namely the huge levels of unemployment with over 50 million now unemployed in the OECD nations the most prosperous apparently is surely a huge indictment of this rotten capitalist system we live under. Hannah brilliantly outlined the global situation of course she couldn’t go into every country issues but gave a really good broad overview on the global economic crisis and the horrific facts and figures behind that. It has been said that this is the new norm now whilst many workers and even capitalists have been hoping that things will go back to “normal” sometime soon if we just tighten our belts is looking even more unlikely than ever and many are starting to think this is it unless we organise and change society. So this was the basis of these weekends’ meetings getting young people who are deeply angry at the government and the system too wanting direction, a hope and a strategy to fight back. Youth fight for jobs and the socialist party a long with Socialist students can play a vital role in the coming period with our ideas showing the working class which route to take. A really good wide ranging discussion then followed with many comrades coming in e with personal questions on the world situation on certain countries the question of the EU and our views towards it, Cameron’s Tories in a mess how long will the government last, role of new labour and a lot more personal experiences of workplace and student experiences. The later session of commissions was a choice of different sessions I attended a session on answering anarchists criticisms and the need for a revolutionary party I found this really interesting a lot of it I already knew but was a good defence of why we need a party by Sarah Sachs-Eldridge of who is a editor of the socialist our weekly paper. Not much was talked of in terms of anarchism sadly it would appear we don’t have a huge grasp of what they stand for it’d be fair to say but as I expected we know all too well about a revolutionary party which was fair enough I guess. The social was excellent a lot more discussion and drinks On Sunday we had a session on more youth matters focusing on our work with youth fight for jobs introducing our new campaign “sick of your boss” encouraging young workers to get in touch write articles and take on stunts and the like against the worst bits of your boss be them heavy handed or tight on breaks or whatever it could bring in a layer of angry young people we feel linking up with trade unions such as Unite on their community based membership could be useful. The trade unions need to get active with young people organise the youth show them they can fight back and the union will support them. So many still dont know what a union is and others are put off by them so much much more is needed to be done by us and the trade union movement to give young people a future. The socialist party is a revolutionary socialist party fighting for socialism linking the day to day struggles to the need to change society so in the afternoon we had sessions on how we can recruit members, write a leaflet, organise a picket line/protest, public speaking and writing an article for the paper. I attended recruiting and organising in a protest all very interesting discussions and great points. I was glad to see comrades getting fully involved and contributing to the debates and I personally found them very useful for the struggle ahead. Its now time for us to take our ideas out there and fight for the socialist society we all so badly want but more importantly need!

Lull before the storm

Perspectives for 2013 Extracts from a statement on Britain agreed at the Socialist Party (CWI in England & Wales)National Committee on 19 January. AS 2013 BEGINS many commentators have suggested that 2012 was a ‘groundhog year’. "British politics has got a bit stuck", declared Andrew Rawnsley (Observer, 30 December). While this was true on the surface, in reality society, and particularly the working class, underwent profound changes which will accelerate in the coming year. In 2012 the majority of the working class, and wide sections of the middle class, suffered a battering. An avalanche landed on our heads, including benefit cuts, dramatic cuts in local services, hospital closures, the attack on pensions, the headlong rush to turn schools into academies. This is, however, only about 20% of the government’s planned cuts. At the same time, a majority of households saw a marked fall in their income. The Bank of England’s chief economist, Spencer Dale, noted: "The harsh but inescapable reality is that households and families are worse off – much worse off". Office for National Statistics (ONS) figures show that average wages rose by an annual rate of 1.7% compared to an official inflation rate of 2.7%, meaning a real-term fall of 1% in the last year. This comes on top of years of belt tightening. The Bank of England estimates that the pay packet of the average worker is now worth 15% less than it was in the pre-crisis period. No wonder that Christmas spending was down. Increasing numbers of people cannot afford the necessities. Three new food banks open every week and the numbers using them over Christmas doubled. Since the recession began people are buying 20% less fruit and vegetables, and far less milk, bread and fish. The Children’s Society reports that 72% of teachers have pupils who not only skipped breakfast but had no lunch or the means to pay for one. Cases of rickets, previously considered a disease of a long-gone Dickensian past, have increased fourfold. The government has had two stated aims for the misery it is imposing: eliminating the deficit and maintaining Britain’s AAA status. Neither will be achieved. Chancellor George Osborne is being forced to endlessly move back the target date for eliminating the deficit, now to 2018. All three major credit ratings agencies have given official warnings that Britain can expect to be stripped of its AAA rating. The 2012 budget, particularly the cut in the top rate of income tax, was a tipping point in how the majority, including most of the middle class, perceived the government. It is now widely seen as a government of the rich. Rawnsley summed up the mood with ‘one of 2012’s best political jokes’: "Why did 80,000 people boo Osborne at the Paralympics? Because that’s the maximum capacity of the stadium". At the same time, the conspicuous consumption of the ruling elite is creating a burning rage. The 2012 Sunday Times rich list revealed that the combined wealth of Britain’s richest 1,000 people swelled by almost 5% to £414 billion, the highest amount ever recorded by the 24-year-old survey. That the growing class anger was not fully given voice in 2012 was primarily the result of the failures of the leadership of the trade union movement. Consequently, the latest round in the war against austerity was another defeat for the working class. It was huge pressure from below, channelled by the National Shop Stewards Network (NSSN), in alliance with the RMT, PCS and the Prison Officers’ Association (POA) unions, which led to the TUC congress taking the historic decision to back the POA resolution ‘to consider a general strike’. Afraid of appearing conservative to their own membership, even the right-wing leadership of UNISON backed the motion, while openly admitting that they did not really support it. Since then, thanks primarily to the general secretaries of UNITE and the RMT, Len McCluskey and Bob Crow, attempts by the TUC leadership to rule out a general strike have been blocked and unions are being consulted on the possibilities of a general strike. At this stage, however, only the PCS has concrete plans to ballot for strike action and to call for other unions to coordinate their action alongside them. It is likely to take further pressure to force wider coordinated action. A 24-hour general strike is still firmly on the agenda but could be delayed for longer than many expect because of right-wing union leaders dragging their feet. As the last two years have shown, the working class will find the means to fight back despite the faults of its leadership. The question is whether that struggle is organised into a powerful force or will be inchoate and disorganised due to lack of leadership. Lack of leadership can also lead to struggles developing on a sectional or local level without the workers involved, in the short term, necessarily understanding the need for making common cause with other sections of the working class or not being able to find a route to do so. The government has succeeded temporarily in increasing the divisions in the working class, particularly between workers and the unemployed. There is also potential for other divisions to grow, including between the old and young and the public and private sectors. Nonetheless, Britain has entered a protracted period of class struggles, as the working class attempts to resist endless austerity. This flows from the continuation of the economic crisis, the worst British capitalism has faced in at least 80 years. Economy in crisis FIVE YEARS INTO the crisis, UK gross domestic product (GDP) is still 12-15% below the pre-crisis trend. Mervyn King, retiring governor of the Bank of England, has predicted a decade or more of economic misery. British capitalism is in a dead end, its best scenario being to keep ‘bumping along the bottom’ as it has since the autumn of 2010. Britain has become a new Japan, with its lost decades of stagnation, except that the Japanese crisis took place against the background of growth in the world economy; Britain today is one of many Japans in a stagnant, crisis-ridden world. Larry Elliot wrote (The Guardian, 30 November): "Japan ended up with a zombie economy in which zombie banks were lending to zombie companies. Worryingly, the UK is showing signs of heading in the same direction. One in twelve companies are able to repay only the interest on their debts". Britain is paying the price for its refusal to invest in industry over decades. The weakness of British capitalism is summed up in the ‘mysterious’, dramatic fall in productivity figures since the crisis began. In the private sector, productivity per hour worked fell an incredible 4% in the first nine months of last year. UK productivity has long lagged behind other advanced capitalist countries, as British capitalism has relied on cheap labour rather than investing in developing technology. During the crisis investment has fallen to record lows, with £750 billion sitting idle. The productivity gap is the biggest since 1990, with UK workers 20% less productive than the G7 average. Economists have deduced that the latest fall in productivity is largely as a result of the crisis in the finance sector, which drove UK economic growth during the last boom, as it "adjusts from the unsustainable business models of the last decade" (Financial Times, March 2012). In other words, Britain’s previous productivity figures were artificially high because they were based on the massive bubbles in the finance sector which dominates the British economy. The small decrease in unemployment figures at the end of last year will not last. In any case, the real numbers are disguised by the huge levels of under-employment, which has increased by at least one million since the crisis began to a massive 8.1 million. This includes workers who have been kept on by employers on reduced hours, in the hope that the crisis will be short. Many of these will be laid off in the next period. This part-time army is made up predominantly of millions of workers trying to exist on a few hours of casual work every week. This is now a permanent feature. Karl Marx’s conception of a ‘reserve army of labour’, designed to keep wages down because there is always someone desperate enough to work for less, has been recreated. There is a burning need for the trade union movement to organise the part-time casual workforce. The disastrous effect of government austerity in exacerbating the economic crisis has even led the IMF to call on Osborne to switch to ‘Plan B’. David Cameron and Osborne have rejected this, saying they are adopting ‘Plan A+’: continued austerity and measures to ‘assist business’. It is not excluded, however, that the protracted crisis could force the government, under pressure from business particularly the construction companies, to carry out increased investment into infrastructure. Nonetheless, this would be combined with further savage public-sector cuts. Former Tory chair, Lord Ashcroft, let the cat out of the bag when he blogged that the odds were stacked against his party winning the general election, and that New Labour leader, Ed Miliband, "ought to be able to put together 40% of the vote without getting out of bed". Knowing that they stand little chance of winning, the Tories are attempting a scorched earth policy, knowing that Labour in power would not reverse their policies. In doing so, they have the support of short-sighted British capitalism. The CBI continues to "stand shoulder to shoulder" with the government on austerity. Clearly, there is an ideological element to the government’s cuts and privatisation programme. Recently released papers show that, 30 years ago, the Thatcher government considered almost every policy that is being implemented by the Con-Dem coalition in the name of ‘austerity’. Margaret Thatcher, however, did not dare to go so far. But Miliband’s ‘one nation’ Labour would not have pursued a fundamentally different policy. Miliband defends capitalism which sees the road to increasing profits to be over the living conditions of the working class, particularly by driving down the ‘social wage’ – benefits, pensions, the NHS, etc – despite the fact that this will further shrink the UK market. At the same time, the capitalists are clamouring for the further privatisation of public services to find profitable fields of investment. One section of the ruling class, voiced by King, has been pushing for even harsher austerity, arguing that the Tories are too worried about electoral popularity! King has talked in brutal terms about the Japanisation of the UK economy, saying that ‘deeper readjustment’ is needed. The Financial Times (13 November) summed it up: "Bank of England insiders fear that the recession did not generate sufficient destruction to enable the creation of more productive companies in the upswing… At the heart of the new thinking lies the remarkably low mortgage repossessions and corporate liquidations in this downturn". King argues that not enough outmoded value has been destroyed in the recession to create the basis for new investment, leading to a new upswing with a higher rate of profit. He is making a call for more companies to close, more people to be thrown out of their jobs and homes so that, trampling on our misery, capitalism might find a new stability. In attempting to carry this out, however, British capitalism would face powerful resistance by the working class. John Maynard Keynes himself said that his theories were designed to ‘avoid revolution’, and the capitalist class could be forced to move in a Keynesian direction under the huge impact of the workers’ struggles against austerity that are coming. Concessions would be given, which the capitalists would attempt to take back at a later stage if the working class had not yet succeeded in taking power. The working class faces a weak, divided government, ultimately reflecting the capitalists’ inability to find any way out of the crisis and, flowing from that, the increasingly weak social base for the capitalist institutions in Britain. All of the capitalist parties, including Labour, are inherently unstable, with internal tensions which could become splits later on. Politicians lead in unpopularity polls, but trust in the capitalist media, church, the police and even the BBC has been markedly undermined as scandal after scandal has revealed their feet of clay. The Leveson phone-hacking inquiry, for all the timidity of the final report, has exposed the corrupt relationships between different sections of the capitalist state. The renewed attempt to popularise the royal family, via ‘Kate and Will’, is partly a conscious attempt to strengthen the social reserves of the capitalist state. The queen attending cabinet is a deliberate politicisation of the monarchy’s role. The government’s weakness will not prevent it stepping up its assault on the working class, unless it is stopped by the working class. The cuts experienced so far, devastating as they have been, are small beer compared to what is coming in 2013. The need to generalise the struggle, through a 24-hour general strike against austerity in the first instance, is absolutely clear. In the meantime, we could see explosions on a multiplicity of issues. Where the organisations of the working class fail to give movements an organised cohesive form we are likely to see inchoate rebellions, including further riots, perhaps even on a bigger scale than the summer of 2011. Socialists do not condone rioting, which gives the capitalists a whip to strengthen repression, as well as damaging working-class communities and small businesses, but we understand why they are inevitable if a generation of youth are left with no future. We could also see social protests and movements including the kinds of raids on supermarkets and occupations of empty properties that are starting to take place in other European countries. Public-sector flashpoints THE PUBLIC SECTOR was previously a relative haven of job security. No more. Over one million public-sector jobs will have gone if the latest round of cuts is implemented. Already, 7,000 nurses’ jobs have gone as the NHS faces the worst spending squeeze in its history. After two years of austerity, the money hospitals will receive for treatment in 2013 is a 4% cut in real terms. The next year is going to see a series of hospital cuts and closures. In London seven out of 32 A&E departments are already marked for closure by 2020. The remainder will have to cover an extra 120,000 people on average. The chief executive of the Health Federation, Mike Farrar, declared that the public must accept "the closure of many hospital units and live healthier lives if they want the NHS to survive". The public show no signs of doing any such thing! In November around 10,000 demonstrated in the pouring rain against the closure of Lewisham Hospital’s A&E department. Many more such demonstrations could take place in 2013. Alongside cuts public services are facing wholesale privatisation. Education secretary Michael Gove is leading a mad dash to academies, which were first initiated by New Labour. More than half of secondary schools and many primary schools are now academies or have plans to convert. Gove’s latest assault, demanding that head teachers dock the pay of teachers who take part in industrial action, shows his vitriolic determination to smash effective trade union organisation in schools and move to performance-related pay. However, it was demonstrated at the end of 2012, by the successful strike at Stratford Academy in East London against a head teacher doing what Gove had demanded, that teachers will respond to the whip of counter revolution, and can win the support of a majority of parents and pupils. What is needed is to mobilise for a similarly resolute campaign of strike action at national level. It is not yet clear that the National Union of Teachers’ leadership is prepared to do this, as it appears to be hesitating in the face of the onslaught on its members’ rights. If the teachers’ unions do not fight back their ability to organise effective action will be in jeopardy. But the government could overreach and provoke a reaction from below. Lack of enthusiasm for Labour ON THE NHS Labour is 30 points ahead in opinion polls, and is generally ‘more trusted’ to run public services. However, it is not lost on workers that most of the policies now being sledge-hammered through originate in New Labour’s period in office. It is the Private Finance Initiative that is directly responsible for a number of hospitals going bankrupt. Labour has promised to repeal the Health and Social Care Act, although Miliband was reluctant even to commit to this, but has made no promise to reverse the wholesale privatisation of the NHS. The lack of enthusiasm for Labour was demonstrated in the 2012 parliamentary by-elections. Labour won them, but the turnout in Manchester Central was the lowest ever in peacetime, at 18%. Even Corby, which was a battle between Tory and Labour, could only summon 44%. In every election a majority, and a big majority of the working class, did not vote. It will be different in a general election. Larger numbers of workers will turn out ‘holding their noses’ to get rid of the Con-Dems, but this does not represent positive support for Labour, and will not automatically take place on a big enough scale to guarantee a majority Labour government. It is not only a question of what Labour did in government, but what Labour local authorities are doing now. In total, local authority spending has been cut by 29.7%. This is leading to the annihilation of countless essential services. Recognising the horror these cuts will bring, leaders of three Labour councils – Newcastle, Liverpool and Sheffield – wrote a joint statement over Christmas begging the government to change tack because "forces of social unrest are starting to smoulder". The possibility that they should mobilise and organise those forces into a mass campaign against the cuts is utterly foreign to them. On the contrary, they were really begging the government to rescue them from the social unrest they can feel developing underneath them. The pro-capitalist character of New Labour can be summed up by the tiny number of councillors who have so far refused to vote for cuts. The Southampton Two have been summarily expelled from the Labour Party for this, but their stand has received enthusiastic support from workers. Southampton UNITE and UNISON trade union branches have, under pressure from their members, pledged support for the councillors’ stand. UNITE has also backed them nationally. Its general secretary, Len McCluskey, has pledged that UNITE will demand that Labour does not stand against the Southampton Two or any other councillors who have taken the same principled position. Battles against the coming round of local authority cuts are inevitable. In 2010 the leadership of UNISON, the biggest local authority union, avoided sanctioning many ballots for strike action by arguing that anger should be channelled into the national campaign in defence of pensions. This will not work so easily again. We have to demand national action on pay, linked to building for a 24-hour general strike. Equally important is the fight for local action in defence of pay, conditions and services. We also have to be prepared for more widespread community campaigns, including occupations, than have taken place up until now. The Trade Unionist and Socialist Coalition (TUSC) has played an important role in providing a banner under which anti-cuts and trade union candidates can stand. It has begun to popularise the idea that it is possible to have anti-cuts councillors, which had a real effect for example on the struggle in Southampton. The growing trade union support for TUSC, particularly the RMT’s unanimous support at its last AGM, gives it potentially far more social weight than any of the previous attempts to build a new electoral formation in this era. Nonetheless, it is still at an early, fragile stage. Electorally it has not yet made a qualitative breakthrough. However, we have to be prepared for the possibility of the anti-cuts struggle leading to much wider support for workers taking the fight against cuts to the electoral plane. While it may be under a Labour government that decisive steps towards a new mass workers’ party take place, we cannot preclude earlier electoral breakthroughs. 24-hour general strike ELECTIONS ARE ONE facet of the struggle against cuts. In the short term, the most pressing issue is the campaign for a 24-hour general strike. There is a glaring need for decisive action against austerity and the attempts to undermine union strength by slashing trade unionists’ facility time. The trade union movement needs to put the defence of union rights at the heart of the struggle against austerity, making clear to workers – in propaganda and, more importantly, deed – the essential role of the unions in defending their pay and living conditions. If the government manages to force through the attacks on facility time it will weaken the trade union movement in the short term. In the longer term, however, it could rebound on the government as new, younger, more militant fighters develop in workplaces across the country. In 2012 we already saw more militant methods being adopted by sections of workers, particularly in the private sector. The mass picket lines of the London bus workers were combined with blockades against those bus companies that had obtained a court injunction against the strike action. Crown saw three unofficial 24-hour walkouts and electricians won major concessions via unofficial demonstrations and blockades which, in turn, put pressure on UNITE to act officially. A new generation will tend to adopt these kinds of methods as they see that they cannot let themselves be hemmed in by the law if they are to stand up to the employers. Of course, even a 24-hour general strike against austerity would not be guaranteed to force the government to retreat, never mind to precipitate a general election, unless it was linked to a serious strategy for further action. Nonetheless, unlike Southern Europe, Britain has not had even a warning general strike for over 80 years, and it would have a gigantic effect on boosting the confidence of the working class and its sense of its own power, while it would terrify the capitalists. Millions of unorganised workers would be attracted to the trade unions. The right-wing leaders of the TUC will do all they can to prevent a 24-hour general strike taking place – it frightens them as much as it does the capitalist class! In 1972, the last time the TUC was forced to set the date for a 24-hour general strike, it was the strikes developing from below which forced them into reluctant action. Today the anger and bitterness of workers is as great, if not greater. The working class, however, lacks confidence in its capacity to win. It is not aware of its own power. At the same time, the trade union structures remain relatively empty. While there is widespread support for the idea of a general strike – over 80% in one Guardian survey – at this stage it does not occur to the majority of trade union members to attend their branch meeting to demand such action. Instead the current trade union leaders are seen by many workers as, like relatives, perhaps infuriating but unchangeable. But this outlook is not permanent. In 2011 we saw the working class enter the field of battle for the first time in years, with mass demonstrations, strikes and picket lines. On the basis of experience workers will fight to force their union leaders to act or, if they can’t, to push them aside. The potential for genuine trade union broad lefts, involving fresh layers of workers, is likely to grow in the next period. The right-wing leadership of the TUC holds up the anti-trade union laws as a means to avoid action. Socialists are not in favour of taking unnecessary risks with union funds. But workers are facing the biggest attack on their living standards since the 1930s. To fail to lead a serious struggle in defence of workers’ rights would be far more damaging to the trade union movement than anything the law courts could deliver. And it is possible to go a long way towards a general strike even within the straitjacket of the anti-union laws. If the TUC was to name the day for a 24-hour general strike against austerity, and to use all of its power to mobilise workers, it would get a huge response. All unions with live ballots could plan to strike on the named day. Other groups of workers inspired by the call would want to ballot over the real issues in their workplace, which would also allow them to take part in the general strike. Without doubt other workers not currently in unions would flock to take part. Whether the government or employers could use the law – either against those who had not balloted or to invalidate ballots – would depend on the balance of forces. Faced with the threat of a popular general strike, with a clear threat to immediately strike again if any workers or trade unions were victimised, the anti-union laws would be worthless. The limits to how far the employers can use the anti-trade union laws are shown by the situation in UNITE. Since Len McCluskey became general secretary not a single group of workers has received a ‘letter of repudiation’ from the union for unlawful action. Yet the government and employers have not dared to threaten UNITE with sequestration. Nor has the POA been threatened for its action in defiance of the law last May. Many European countries have seen general strikes, despite also having varying degrees of repressive anti-trade union laws and restrictions. These have been swept away by the struggle. Prospects for the Con-Dems IT IS STILL an open question whether this government will last its full term. But it may not be the cuts which act as the immediate trigger for a collapse of the coalition. There is a whole number of possibilities. Europe has once again become a nightmare for the leadership of the Tory party. John Major’s ‘bastards’ are back with a vengeance! Desperate to appease the Tory right, and also to cut across the growing electoral support for UK Independence Party, Cameron and Osborne are ‘talking tough’ on Europe. Osborne has gone further than Thatcher ever did, threatening UK withdrawal from the EU. His statement, however, horrified the majority of the British capitalist class, including representatives of finance capitalism. The president of the CBI, along with the chairman of the London Stock Exchange and others, wrote an open letter warning that the dominant powers in the EU – Germany and France – are extremely unlikely to accept Cameron’s attempt at renegotiation. The British capitalists fear that in that situation, having played the nationalist card, the government would end up holding an in/out referendum which could result in Britain’s exit from the EU. This would have negative effects for British capitalism. Companies would be less likely to set up in Britain, and the City of London’s global position as a centre of finance would be eroded. It is also a very dangerous situation for the eurozone as it could deepen the divisions within it. Not only German chancellor, Angela Merkel, but now representatives of the US government are trying to make Cameron back-pedal. Cameron’s fear of a split in the Tory party makes it extremely difficult for him to simply retreat. This issue can escalate further. It will drive the Lib Dems wild. In the main, the ‘Orange Book’ Lib Dems chose their party over the Tories only because of its pro-European stance. In the event of a collapse of the government, the Tories could play the nationalist card to try and win the general election. In recent opinion polls, 51% of people want to leave the EU compared to 40% who want to stay. This is a dramatic shift. While it can swing back under the impact of a campaign, it is a clear sign of how events could develop. In such a situation, the labour movement and the working class must have an answer which poses issues from a class point of view, in particular to cut across the dangers of nationalism. The current position of the leadership of the TUC, that the capitalist EU’s ‘social Europe’ is a progressive force, is increasingly ludicrous against the background of the nightmare facing workers in the countries of ‘the periphery’. Socialists argue for the trade union movement to campaign for a referendum, but on the issues of our choosing: the class questions which are at the heart of the neoliberal project of the ‘modern’ EU. This would be a referendum to oppose the EU’s Lisbon treaty agenda of privatisation, cuts in wages, etc. We need to reassert total opposition to the bosses’ club of the EU. We must come together, not in a narrow nationalist fashion but in solidarity with the workers’ movement across Europe. At the same time, the need for a confederation of democratic socialist states must be brought to the fore. Next general election WHENEVER THE ELECTION comes it is most likely that Labour will come to power, either with a majority or as part of a coalition with all or a section of the Lib Dems. Miliband would prefer the latter in the hope the Lib Dems would act as a cover for a Labour government’s pro-capitalist policies. However, like Tony Blair before him, he might lead Labour to a majority despite himself. Labour has no answer to the burning problems facing working-class people. The failure of a new Labour government could pave the way for an even more right-wing Tory government at a later stage. Nonetheless, the building of a new mass workers’ party would also be firmly on the agenda. Work done before the general election to campaign for a serious electoral force to the left of Labour is vital preparation for the development of a mass party of the working class. On the basis of socialists’ intervention and their own experience workers will draw the conclusion that ‘we need our own party’. Consciousness in Britain lags well behind the objective reality of 21st century capitalism. However, workers’ illusions are progressively being stripped away. Many who previously hoped that the crisis was temporary are beginning to understand that this is the ‘new normal’. While all kinds of divisions remain within the working class – between benefit claimants and others, young and old, migrant and non-migrant, public and private sector – there is a growing unity in a burning hatred of the tiny elite at the top of society. There is not yet a mass socialist, never mind Marxist, consciousness but there is a growing minority of workers and young people who are looking for an alternative. An anti-capitalist outlook is becoming widespread. Struggles can develop, possibly very suddenly, on a qualitatively higher level than anything which has taken place over recent years. Capitalism is putting every gain won by previous generations into jeopardy. There is no possibility of the working class meekly accepting this. On the contrary, we will see ferocious opposition. On the basis of experience the working class will draw the conclusion that the only alternative to capitalist misery is socialism and the democratic planning of society’s resources.