Capitalism in crisis: don't be part of it!
Labour Briefing1980sTranscribed by hand from the printed page.
Concrete moves by Reagan to "resolve" the 2.37 trillion dollar US budget deficit which has triggered the stock exchange collapse around the world over the past weeks have failed to make any impression.
Whatever happens now, millions of large and small shareholders are facing ruin in what the media now call a financial "meltdown" or "holocaust". One shareholder in the USA has already shot his stockbroker — followed by himself.
Yet faced with the disintegration of their financial structures, representatives of capital are unable even to explain what has happened let alone halt the slide. Some hopelessly point to the "big bang" and the computor systems, whilst Reagan has set up a "court of inquiry" to try to find out what is going on.
The fact is that it is no longer possible to explain these historic developments by conjunctural factors — a hiccup in the system or a rash statement by a minister. It is clear that something fundamental is at work in the system itself.
Marxists rightly point to the protracted general crisis of capitalism, particularly the huge unresolved debt problems it has piled up in recent years.
The buck, however, has stopped with Reagan, and governments around the world are looking to the US administration for a solution to the problem — a major reduction of the debt which is fuelled by the massive US arms budget, and a reduction in current interest rate levels.
Such a solution, however, is extremely difficult. The Reagan administration is weak and crisis-ridden and unable to stem the wholesale collapse of confidence which has taken place and the financial markets are like mad-houses as individuals and institutions refuse to believe the only advice on offer — "don't panic"; "if you believe everything will be all right it will be all right."
Reagan has a big problem, since what is required, if it is to have a lasting effect, is nothing less than a reversal of his entire economic policy. It would involve a huge deflationary package, the creation of mass unemployment and a head-on confrontation with the American working class — not so easy for a government which makes a lame duck look like an Olympic runner.
Such measures are, however, necessary. When it comes to the bottom line — in the USA or anywhere else — the only way that capitalism can hope to stabilise itself is raising the productivity of labour — the rate of exploitation of the workers at the point of production.
The same situation exists in Britain. Here the Tories have been successful in pushing up the rate of exploitation in recent years. They have bought off sections of society, including sections of the working class — whilst systematically attacking the vast majority of workers under the whip of mass unemployment.
Even that, however, has not been enough. The bubble has now been burst on a world scale and the "share owning democracy" and "people's capitalism" has collapsed around their ears.
The issue now is not how many people lost their shares but how many will lose their jobs and their way of life.
Huge stock exchange losses, whatever measures are adopted by capitalist governments, will work through into recession and mass unemployment. The timescale is not so clear, but if a temporary upturn — which is possible but unlikely — is not engineered soon there will be failures of banks and institutions, a cutback in production and a drive towards protectionism.
But it is not just the Tories whose plans are in ruins. The drift of the Labour Party Conference towards share ownership and away from nationalisation and Clause IV is shown for what it is — bankrupt Toryism. Brian Gould's ideas lasted 3 months.
The basis of the new realism is undermined as well. The idea that the government is so strong that it is impossible to confront it is a difficult argument these days — although presumably the argument will be that such a crisis is the time to pull together.
At the same time the crisis puts not only class struggle but socialism back on the agenda. Capitalism can hold the line if it can create the impression that it controls the economy, but the reassertion of the realities of the casino economy which has exploded in their faces will create a new anti-capitalist feeling amongst millions of people on which socialists can build. It will polarise society with capitalism and the right moving to defend themselves and the doors opening for the socialist movement.
Under the pressure of these events all the political reference points are rapidly changing — from Kinnock and the new realists right across to the hard left.
This fact was very clear at the Chesterfield Conference at the end of October — and expressed most clearly by Arthur Scargill and Ken Livingstone.
Livingstone made a strong and remarkable speech which could be seen as a bid for the leadership of a revitalised socialist movement.
He rightly stressed that there had been no change in the real class nature of society. He told the Conference that the problem in the 1930s was that the labour movement failed to take control of capital — and "there is no alternative now."
A bit of reflation will not solve it. "We have to take full control of capital, the financial institutions and the City of London and use it for the common good. Labour, in the broadest sense, must take control of the commanding heights of the economy or we will go around the cycle again."
He said that Thatcherism, monetarism and Reaganism have been defeated by their own market forces "and we should step forward to replace them."
He said we have to fight seriously in this country for power and link up with those in other countries across the world who "want to change the international order."
He also explicitly rejected briefing papers for the Conference which urged delegates not be too critical of our leadership, saying quite rightly that at crucial points of struggle the leadership factor is crucial. "How can a struggle be won if it is led by a Ramsay MacDonald?" he asked.
All this may contrast sharply with his own track record over recent years, but it did more than any other platform speech to address the realities of the situation we are now in.
Whatever the exact course of the momentous events we are now living through — for which the only possible reference point is 1929, whatever technical factors mmay have changed — these are the kind of ideas which need to be discussed in the united democratic left wing movement which is a possibility out of Chesterfield.