Wednesday 8 July 2009

Who pays for this crisis?

The calls for pay cuts and cuts in spending on public services prompted me to write the following article for the Morning Star today.

In the last major economic depression in the 1930s, a Labour government fell because it decided that the cure for the latest crisis of capitalism was to cut public spending - in particular, to cut benefits to the unemployed.

A Labour prime minister and his main ministerial allies accepted wholeheartedly the economic orthodoxy of the time that public expenditure had to be reined in to stabilise the markets.

Working people, living at best on subsistence incomes but more often on the edge of destitution, were told that the country couldn't afford to pay them decent wages, house them, educate their children or treat their sick.

Labour ministers who stayed in office in the national government were applauded by their Conservative colleagues and the press for their statesmanship in telling their working-class supporters that they had to accept wage cuts and longer hours for the sake of the economy. These ministers were lauded for their patriotism in putting the interests of the country before the interests of their class.

The consequence of this acquiescence by a Labour government was a level of unemployment that impoverished millions of people in Britain and many millions more across the globe.

Over the last three months the same consensus has emerged across the three main political parties and within the mainstream media. In the interests of the country, wages must be cut, working hours increased, public expenditure must be massively reduced and there has even been a call to increase the retirement age to 70.

In effect the difference between the parties is not the direction of political travel but the depth and speed of cutting wages and public spending.

Having dabbled with a bit of last-minute panic Keynesianism as the scale of the latest crisis began to unfold, the government has now budgeted for a £20 billion programme of cuts and privatisation, is introducing workfare in its Welfare Reform Bill and is attempting to introduce by the back door a public-sector pay freeze and, eventually, an overall strategy of pay cuts.

The usual alliance of big-business associations, the City and media commentators is urging the government to behave "responsibly" and bring forward an even larger-scale programme of public spending cuts.

The Telegraph's right-wing columnist Matthew d'Ancona has praised elements in the Labour Party around the Compass group for calling for austerity measures. Civil servants are reported to be preparing a "doomsday" plan for 20 per cent cuts in public services.

With unemployment rising rapidly and faced with a constant media propaganda barrage, some people are understandably falling for the line that the country can't afford decent wages and public services. It's the same old line they gave out in the '30s and in every economic downturn since.

Others are looking for scapegoats and the fascists are still around, just as they were in the 1930s, to exploit these fears and confusions.

Occasionally the realities of the situation peep through and show what is needed.

Just as the collapse of Northern Rock and Royal Bank of Scotland exposed the casino banking that contributed to this recession, the announcement last week of record bonuses at Goldman Sachs demonstrated starkly not just the grotesque inequalities of our society but also the absolute lack of effective government control of the finance sector and therefore the economy.

At the same time, the failure of National Express on the East Coast railway line exposed the scandalous waste of public resources in subsidising the privatisation rip-off of our public services.

The slogan repeated now on demonstrations and picket lines that "we are not paying for your crisis" is exactly the right one.

By refusing to accept pay cuts, phoney sabbaticals, longer hours, worsening conditions and cuts in public services, we are forcing change in how we manage our economy, how firms are managed and controlled, how we distribute the profits of these companies and the wealth of our country, how our public services are provided and what our taxes are spent on.

Every refusal to accept a cut is a demand for the system to change. It is a statement about the unfairness and incompetence of the existing system for managing our economy and controlling our lives.

If we are told that our wages and public services can't be afforded, we can show them where we don't want our resources spent - for example on wars, weapons and privatisations - and where they can find billions more by creating a just tax system where everybody and every company pays a fair share.

If they try to tell us in a company or a public service or in government that all this can't be done, then we should tell them that if they can't manage the place then move over because we can.