Report on the British situation for the 18th WR congress

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A. Economic crisis

Holding this congress in the midst of the credit crunch financial crisis there is absolutely no shortage of material about the state of the economy in Britain today. In this discussion it is essential to step back and take a long view of the economic crisis internationally and historically. Many bourgeois commentators in fact ask us to step back from predicting appalling consequences on the basis of the latest figure for stock market falls or whatever, show us a graph of some economic indicator over the last 10 years or so showing a fall in 2002, and think they have a convincing argument for the underlying health of the real economy. In fact when we take the long view it is not to pacify fears by pointing out that we survived the bursting of the dot.com bubble, but to place the recent events within the 40 year development of the crisis since the end of the 1960s (‘30 years of the open crisis of capitalism' IR 96,97,99), marked by an international slowing of growth rates decade on decade, increased unemployment, constant resort to debt and speculation as well as a series of recessions and the collapse of several bubbles. And this open crisis is a part of the history of capitalist decadence, the period in which it can only maintain itself through constant crises and convulsions - so today's economic crisis follows that of the 1930s, has the same root causes and is in fact a new expression of the same contradictions, which is why the bourgeoisie have been able to learn from it. "Since it entered into its period of decadence, capitalism has had to temper [its characteristics of ‘every man for himself' and the ‘war of each against all'] through the massive intervention of the state into the economy, put in place during the First World War and reactivated in the 1930s, notably through fascist or Keynesian policies. This intervention by the state was completed, in the wake of the Second World War, by the setting up of international organs such as the IMF, the World Bank and the OECD, and finally the European Economic Community ... in order to prevent the system's economic contradictions leading to a general disaster such as we saw with ‘Black Thursday' in 1929" (‘Resolution on the international situation' in IR 130).

The bases for the rates of growth that the bourgeoisie were so proud of two years ago were not new, but a continuation of a policy used to prevent the saturation of the world market from stifling the world economy. "They can be summed up as growing debt. At the present moment, the main ‘locomotive' of world growth is constituted by the enormous debts of the American economy, both at the level of its state budget and of its balance of trade. In reality, we are seeing a real forward flight which far from bringing a definitive solution to the contradictions of capitalism, can only pave the way to even more painful tomorrows, in particular through a brutal slow-down in growth, of which we have had many examples in the past 30 years. Right now, the threat to the housing boom in the US, which has been one of the motors of the US economy, and which raises the danger of catastrophic bank failures, is causing considerable disquiet amongst the economists" (‘Resolution on the international situation' from the ICC International Congress in May 2007, IR 130). The effects of the bursting of the housing bubble are already clearly more profound than the end of the dot.com bubble because it deeply affects capitalism's most important financial institutions.

The characteristics of the British economy

The once mighty workshop of the world in the 19th Century had been overtaken in industrial production by the USA and Germany by the early 20th Century. The article on the decline of British imperialism published in Bilan in 1934-5 (and reprinted in WR 312, 313) gives important depth to our understanding of the national situation. It shows how a decadent ruling class no longer able to dominate the world economically resorted to a parasitic existence, drawing surplus value from its empire around the globe while its industry declined relative to its competitors, particularly in the productivity it was able to achieve with outdated constant capital (for example at that stage British textile industries had 4 looms per man while Japan had 8 per man). Bilan drew out the specificities of British banking capital that contributed to this decline: "the process of the fusion of industrial and banking capital was never pushed so far in Britain... This lag, while it can explain the relative stagnation of the productive forces, can itself be explained by the existence for nearly a century of a highly centralised productive apparatus...and which allowed it to make use of credit for its expansion. The structural particularities of finance capital constitute both a weakness and a strength: a weakness, because, due to its intimate links with the mechanisms of world trade, it suffered form their perturbations; a strength because, cut off from production, it retains a greater elasticity of action in periods of crisis."

London is a major financial centre, and finance is a major part of the service industries that employ 80% of the workforce producing 75% of GDP. Of the 23% of GDP from industrial production, 10% is from primary energy production (gas, oil and the run down coal industry), which is unusually high for a developed country. A lot of industry was lost in the 1970s and 1980s particularly coal, steel and shipbuilding. The development from industry towards services and particularly banking has only increased since the last official recession in the early 1990s. After 10 years of industrial stagnation and recession, services are even more predominant. Between 2000 and 2005 banking assets increased by 75% largely based on housing. Assets of British banks are greater than GDP and their foreign liabilities a significant part of UK foreign liabilities.

 


 

Two years ago we characterised the British bourgeoisie's response to the crisis as one which had allowed it to keep its growth rates ahead of many of its European rivals by managing the crisis in spite of poor growth, rising inflation and hidden unemployment. The bourgeoisie had been unable to address low productivity and was therefore relying on increasing the absolute exploitation of the working class. But the British state had been particularly effective in defending the economy: "The Labour government has sought to manage the economy through the adoption of counter-cyclical policies. It has increased state spending to counter the global recession in the short-term, and to smooth out the decline in the long term." (‘Resolution on the British situation', WR 302). Government debt was 42% of GDP and clearly not balancing out the deficit over an economic cycle, as claimed through manipulation of the figures. Personal debt had risen 25% in 2 years to £1.25 trillion - and by summer 2007 was up to £1.35 trillion, more than GDP of £1.33 trillion. However, any expectation that the housing market, on which this debt bubble was based, could be managed to achieve a soft landing proved misplaced.

Overall the ‘health' of the British economy was based on spiralling government and personal debt on the one hand, and attacks on the working class on the other. In particular the British bourgeoisie had managed to bring in many attacks on benefits, health services and pensions ahead of many other European countries.

Return to nationalisations

The expressions of the credit crunch in Britain are only one part of the events going on internationally. In a year we have gone from the first run on a bank for over a hundred years, and the government's reluctance to encourage ‘moral hazard' by rescuing banks that lent unwisely, through the bail-out of Northern Rock, Bradford and Bingley, to £500 billion being made available to the banks. In short, a complete turn about. Even when the government has been trying not to spend the state's money it has been directly involved, as with Gordon Brown arranging a shotgun marriage between Lloyds and HBOS.

This rescue so far amounts to £387bn, consisting of £250bn bank debt guarantee, £100bn short term loans, and £37bn direct injection of capital into banks. It is comparable in size to both the US Paulson plan of $700bn, and total UK public spending of £618bn, particularly when you add in £119bn for Northern Rock and £14bn for Bradford and Bingley. Not to worry: "the bailout is capital, not current spending. It is not like the schools' budget to which it has been absurdly compared. It is simply a recomposition of government assets... If you borrow to acquire an asset, you have that asset to set against your borrowing and the net position is as before" - so says a comedy double act of Michael Blastland and Andrew Dilnot in The Times 21.10.08. The various capital injection plans around the world produced only a small temporary rise in the stock markets, which have continued to fall.

Nationalisation is, of course, not new; bank nationalisation today, just like nationalisation in the 1940s, allowed the state to take over and run, or run down, ailing industries in the interests of the national economy as a whole. The policy of state control of the economy was first noticed by revolutionaries in the First World War as a way of mobilising the resources of the economy for the conflict. It was reintroduced in the 1930s with the New Deal, Stalinism, Fascism etc, and then built up for the Second World War. The post-war Labour government nationalised health, railways, steel and coal with much ‘socialist' ideology but the resources of the state were needed to invest in a thoroughly rundown infrastructure. Similar rescues took place from time to time as necessary, for example British Leyland. The privatisations under Thatcher was a different state policy and could not really reverse the tendency to state capitalism nor, despite claims about monetary policy, to deficit spending which was still extremely high in the early 1990s.

This brings us to the question of what it means for the state to take responsibility for backing up the banks. It is clear what it would mean for the state to refuse - a run on the bank like Northern Rock last year; in such situations credit seizes up and the economy falls into slump and depression much like the 1930s. The rescue has no hope of preventing recession here any more than anywhere else - unemployment is already rising sharply, Brown and the governor of the Bank of England have now joined the Chancellor Alistair Darling in admitting we are heading into recession. The bailout does aim to keep the economy moving. But what does it mean economically for the state to even partially guarantee banks with assets way above GDP? If we look internationally we can already see that this policy is not available to countries which have particularly small economies in relation to bank debts, Iceland being a prime example. It is at the very least bound to increase inflationary pressures.

It may also have social consequences as the state takes on much more overt responsibility for direct attacks on the working class.

The international aspect

In the wake of this rescue plan, Gordon Brown has been bestriding the world stage, meeting George Bush and gaining the approval of EU leaders. It seems that the British plan to partially nationalise banks, rather than agree to buy toxic assets as in the US plan, and to try to spend their way out of recession, was the only game in town. Certainly we should not forget that London remains a vital financial centre whose bourgeoisie has a wealth of experience. The crisis has also seen efforts to co-ordinate on an international scale, such as the round the world lowering of central bank interest rates in October, numerous meetings - EU, G7, Asia-Europe, meeting called by Bush, etc.

However these meetings, even while they express its need for a degree of cooperation to keep trade going, never escape the expression of conflict, any more than the various GATT rounds could. And capitalism's beggar my neighbour attitude has also come into the open at times, even if it remains secondary for the present time: for instance in Europe we have seen governments competing on guaranteeing bank deposits, which is potentially important for drawing deposits away from banks in neighbouring countries that may seem risky by comparison; and Britain's use of anti-terror laws to freeze Icelandic assets in the face of its banking collapses, which has led to much protest. As the bourgeoisie have learned so much from the 1930s depression, and particularly the danger of protectionism and shutting down world trade in the wake of huge stock market falls, this is likely to remain a secondary tendency to be avoided at all costs - but we should not rule out the possibility that international coordination will not be successful.

Perspective of depression

The British economy, like the rest of the world, is descending into a recession. The latest quarter showed a fall in GDP of 0.5% affecting all areas of the economy: business services and finance down 0.4%, hotels and restaurants 1.7%, manufacture 1%, construction 0.8% and transport 0.6%. And this is only the beginning. The way the banking crisis has built inexorably over more than a year, the depth of stock market falls and the level of instability, the way it has affected every part of the globe, and the way the first signs of recession are affecting every area of the economy, all point to this being a long sustained and deep recession.

The early stages of this crisis have seen inflation growing steadily till the Consumer Price Index has risen to 5.2%. This has been partly driven by food and fuel prices, and the cost of mortgages, but is not limited to any particular items. The current fall in the price of oil, that OPEC has been unable to prevent, will not be enough to reverse inflationary pressures. In fact they are going to get worse as governments around the world cut interest rates and pour in borrowed money to try and stabilise their economies. We have the perspective of the return of stagflation, the combination of recession and inflation, as we saw in the 1970s.

The working class will have to pay

Whenever we look at the attacks we have to bear in mind what has already been lost. Unemployment of about 1,000,000 became normal in the 1920s (see the Bilan articles), lasted until the war, and returned to those levels at the end of the 1970s. Although it has officially come back down to around 1 million officially since the early 1990s it is common knowledge that this has been achieved only by manipulation of statistics and not in reality.

So when we see the highest rise in jobless for 17 years, from 5.2 to 5.7% and 1.79 million, when we hear predictions of 2 million unemployed by the end of the year and another million by the end of next year, we know that the figure is much higher - we are talking 1980s or 1930s levels.

Over the last year inflation has brought about an across-the-board pay cut with many basic foods, fuel, housing costs up much more than official inflation, which is in turn more than average pay increases. The perspective is for this to get worse. And it will inevitably result in more home repossessions.

Over the last 40 years we can see what else the working class has lost: most final salary pension schemes; benefits much harder to get; not only are student grants gone, but they also pay tuition fees; many hospitals and beds... This year we also saw the abolition of the 10p tax band.

Even before the economy is in official recession we can see poverty among children and pensioners has started to rise again.

The government has promised efforts to reduce the effects of the recession by increased spending, but this will delay and not prevent the attacks which must have a profound effect on not just working class living standards but also on the development of class struggle and the consciousness of what perspective capitalism has in store for humanity.

B. Class struggle

"The situation of capitalism can only be understood at the global level, since it is only by grasping its totality that its real nature and dynamic can be seen. Thus it is a mistake to expect to see every aspect of capitalism expressed equally in the situation of any particular nation state. Britain does not show the devastation of the economic crisis seen elsewhere any more than it bears the direct scars of war and nor has it seen class struggle on the scale witnessed elsewhere. Nonetheless it is part of the international dynamic and the particular developments in this country contribute to the overall dynamic." (‘Resolution on the British situation' WR 301 and 302). When examining the class struggle it is particularly important to look at the global level in order to understand the context and significance of each development.

In looking at the developments in the struggle of an undefeated working class in response to constant attacks on its living standards we see the development towards decisive class confrontations, the slow and tortuous development towards the mass strike. The most important developments in this are qualitative. We know that there were many very large strikes in the 1930s, in a period in which the working class was defeated, which the unions used to deepen the ideological defeat and help prepare the conditions for war. Since 1968 there have been some massive strikes on a very militant basis - from 1968 in France, the Hot Autumn in Italy in 1969, Poland in 1970, 76 and most importantly 1980, the miners' strike in Britain in 1984... These huge strikes on a very militant class basis are an extremely important reference point for workers today. However we also know that the working class in this period was not able to develop the level of consciousness demanded. Obviously decisive class confrontations, the mass strike, require a quantitative development: they are massive, but the developments in consciousness that prepare this can also go on underground, hidden from view in periods of apparent quiet. The growing interest in the politics of the communist left in a very tiny minority of the working class is one aspect of this.

The ICC has drawn out the characteristics of these qualitative developments today: "they are more and more incorporating the question of solidarity. This is vitally important because it constitutes par excellence the antidote to the ‘every man for himself' attitude typical of social decomposition, and above all because it is at the heart of the world proletariat's capacity not only to develop its present struggles but also to overthrow capitalism". The effects of the long crisis have had an impact: "nearly four decade of open crisis and attacks on working class living conditions, notably the rise of unemployment and precarious work, have swept aside illusions that ‘tomorrow things will be better': the older generations of workers as well as the new ones are much more conscious of the fact that ‘tomorrow things will be worse'." And so "Today it is not the possibility of revolution which is the main food for the process of reflection but, in view of the catastrophic perspectives which capitalism has in store for us, its necessity" (All three quotations from the ‘Resolution on the international situation' in IR 130).

Two years ago we noted a development in the class struggle in Britain. We remarked that the strengths of the bourgeoisie in Britain which had impeded the development of the class struggle, particularly the strength of the unions, the slow introduction of attacks and the ideological weight of the Labour government, were having much less impact and there was a growing combativity. In particular there had been some small but highly significant struggles expressing solidarity, such as the BA workers who struck in solidarity with Gate Gourmet workers in August 2005, right in the middle of all the propaganda about terrorism. This and several other small struggles had gone outside the control of the unions. There had been a large scale strike by local government workers which, while carefully controlled by the unions, seemed to have a more militant spirit.

The working class, however, was still facing the very experienced unions, who had started to distance themselves from the Labour government to better control the workers.

The last two years

Discontent in the working class has been much wider than class struggle, inevitably. And there has been a lot to be unhappy about. For instance in spring 2007 there was widespread discontent in the NHS, like many other sectors, not just about the below inflation pay rises, 2.5% for nurses, or its staging, but also because of the government's tightening of financial controls, leading to the loss of 20,000 jobs in hospital trusts and to newly qualified nurses, physiotherapists and others finding it harder to get jobs. Pension funds had lost £5 billion a year thanks to a ‘simplification' of tax, to add to the difficulty pensions funds were in throughout the world. This was when we heard the first announcement of the loss of the 10p tax band, which came into force this April at such great cost to most workers that the government had to take measures to limit its effects. It is also the period that saw the sub-prime crisis break in August last year, followed by the run on Northern Rock, the credit crunch and now the financial meltdown we are in the middle of. This must give rise to both attacks and to reflection in the working class that will continue for some time.

Expressions of solidarity

All class struggle, all strike action, is an expression of solidarity among the workers involved. Given the situation of decadent capitalism, the increasing attacks affecting the whole class, the unity the ruling class shows against any workers' struggle, the need for solidarity and struggle to spread beyond the immediate dispute is posed in every struggle.

The question of solidarity was posed in the postal workers' dispute in the wildcat solidarity actions that continued throughout the struggle from summer to autumn last year. Huge discontent was expressed in the vote for strike action in May - 77% in favour in a turnout of two thirds in the CWU ballot. The issues were the below inflation pay offer, and even more importantly the ‘modernisation' plan to cut jobs and worsen conditions. But the union was able to keep a degree of control over the situation to the extent that they continued negotiation, expressed the need to try and prevent strike action, and then called 2 one-day strikes in July; they were very successful in selling the idea that token strike action would force the Royal Mail to negotiate.

However CWU control was not so complete, as was shown by the unofficial strikes that accompanied the official CWU limited strikes. In August 13 drivers refused to cross the picket line and were suspended, prompting a mass walk-out in Glasgow, quickly spreading to Motherwell and the rest of Scotland. Wildcats spread to Liverpool, where it was supported by Polish agency workers, Newcastle, Hartlepool, Chester, Bristol. At its height there were wildcats involving more than 1400 workers in 30 offices. It seemed that the CWU suspended the strike in the summer in order to break the unofficial strike movement - but they must have been bitterly disappointed to see the wildcats start up again in the autumn. At any rate they ended the strike very precipitately without any announcement of the deal until after the strike was ended. This showed great militancy and solidarity, but with the exception of Scotland it was confined to local areas. Union control prevented the struggle generalising to all categories of Royal Mail workers and to workers in other sectors.

In June this year 641 Shell oil tanker drivers struck for 4 days over pay, with workers from other haulage firms showing solidarity by refusing to cross picket lines: 15 BP drivers at Stanlow in Cheshire, drivers from every company supplying fuel in Devon and Cornwall, drivers from Wincanton, a large haulage firm, joined Shell drivers on protests in Cardiff, Plymouth and Avonmouth. "This solidarity took on a new dimension on the third day of the strike (16th June), when workers from other haulage firms joined the Shell workers picketing the Grangemouth oil refinery in Scotland in protest at the suspension of 11 Scottish Fuel drivers for refusing to cross picket lines. This was potentially a very explosive situation, given that the struggle was taking on a demand beyond those of the Shell tanker drivers - the defence of workers from Scottish Fuels. A demand that if not resolved could have drawn in more and more drives and potentially other workers into the struggle... Not surprisingly the bosses and unions moved rapidly to stop this by reinstating the suspended workers" (WR 316).

These examples of class solidarity are particularly important in revealing the potential that exists in the class struggle today. They are totally illegal, and therefore show the force of the movement. They are taking place on a larger scale than the examples of solidarity we were discussing 2 years ago (Heathrow strike, Cottam, Polish agency workers in Leicester); they are taking place in a context of very similar attacks on workers in all sectors of the economy, and in the context of developing international struggle in which solidarity has been a very important factor - from the solidarity shown in the struggle against the CPE in France, Vigo in Spain, Opel and others in Germany, Egypt, Bangladesh, New York transit etc. There is also the work that the unions needed to put in to keep control of the situation.

Union perversion of solidarity

In the postal workers' and Shell oil tanker drivers' strikes we saw the unions having a degree of control to delay and limit the struggle, but not to prevent unofficial solidarity action during the struggle. CWU and Unite used similar tactics: ending the struggles very suddenly, declaring victory when little or nothing had been added to the original offer, delaying the announcement of what the deal entailed. The CWU deferred negotiation on the so-called modernisation attacks to local offices after the return to work.

Their other major tactic is always to try and keep workers tied up within the limits of not just legality but of corporation, sector, job and union membership. Inevitably this leads to calling on workers to support their employer - the CWU added to their call for negotiation a demand for "An urgent government review of the damaging impact of competition on Royal Mail..."

A similar union perversion of the idea of solidarity was also shown when in March 2007 workers at the Airbus Broughton and Bristol plants took unofficial strike action in response to the threat of 1600 job losses, out of 10,000 announced by the firm in Europe as a whole. Workers faced union opposition to their action, but the unions also called for their version of solidarity - a Europe wide day of action and solidarity - calling for a better plan for Airbus, to make it more profitable, to make it more competitive with Boeing (which was cutting 7,000 jobs at the same time). In other words, unions perverted the notion of solidarity between workers into workers' solidarity for the boss within the company.

On 24 April this year we had what leftists described as ‘fightback Thursday' to unite workers in education and civil service. The unions put strict limits on their call for unity: schoolteachers but not other workers in schools, not teachers in sixth form colleges, teachers in the NUT but not the NAS-UWT... with demonstrations that tended to isolate teachers from other workers. The same tactic was used in the council workers' strike, involving 300,000, in July with a lot of small demonstrations.

While the unions have been keeping workers divided, the tendency to large scale union mergers has continued with Unite joining with the United Steelworkers of America to form Workers Uniting. This will not overcome each union's fundamental loyalty to the economy of the country in which it operates, nor prevent their support of protectionism, but it will give them a fig leaf of ‘internationalism' all the better to keep workers divided on national lines.

The unions have also continued their policy of distancing themselves from the Labour government, essential to maintain the trust of the workers they claim to represent while forcing through attacks and keeping the workers' response limited.

Development of consciousness

During the postal workers' strike we saw not only the development of the online rank and filist Royal Mail Chat, an opening where workers could discuss their struggle online, but the much more significant Dispatch which was not limited to any one sector, and on a much clearer basis "a group of workers who are interested in discussing and co-ordinating a response to the ongoing public sector pay disputes. We believe they key to winning is to unite the disputes, fight together and for workers themselves to control the struggle. We work in several different sectors, including the postal service, NHS, education and local government and all use the website libcom.org". It re-emerged in response to the public sector strikes this year with a new name, Tea Break (see WR 317) trying to draw the lessons of the defeats of 2007 and the role of the unions in dispersing the struggles.

This initiative plays a similar role to the development of groups of militant workers who came together in the 1970s and 1980s to try and influence the course of struggles, an expression of the development in consciousness. Some saw themselves as being a rival trade union, but others avoided this error, "they understood that they were only a minority, and that their essential role was to act in the more general class movement. Depending on whether or not that movement was latent or open, rising or retreating, they could play a positive role by:

  • - acting as a focus for discussion about the lessons of past struggle and the prospect for future ones,
  • - creating links between militant workers in different sectors,
  • - intervening as a group in the workplace, in mass meetings, strikes and demonstrations,
  • - producing leaflets and bulletins advocating the most effective methods for the struggle" (WR 307).

The emergence of this group is a very encouraging sign of the development of consciousness going on at the present time. Its presence online allows it to reach many workers and more to participate. But it will be a weakness if it is limited to an online network.

Revolutionary intervention

"It is the responsibility of revolutionary organisations, and the ICC in particular, to be an active part in the process of reflection that is already going on within the class, not only by intervening actively in the struggles when they start to develop but also in stimulating the groups and elements who are seeking to join the struggle" (‘Resolution on the international situation' in IR 130).

WR has participated in this work by articles on Dispatch/Tea Break, participation in online discussion, articles in WR (which have formed the basis for this section of the report). For particular events in the class struggle we have intervened with leaflets (to the postal workers, council workers, teachers). We have often found the latter form of intervention has been particularly difficult, at least in part due to the strength of the union hold. On one level this is a purely practical difficulty - in strikes where the workers are kept separated on small pickets, small demonstrations. But it is also due to difficulties in developing the discussion with workers - for example at the start of the postal workers' strike the certainty many workers had that they only to show their militancy in token strikes to force the Royal Mail to negotiate a better deal. It will be important to address this difficulty.

Perspective

What is the effect of the current economic crisis on the development of the class struggle today? It is quite clear that the financial crisis is already feeding into the economy as a whole, with increased unemployment, reduced living standards caused by inflation, and wages pegged well below price rises. This is already happening; we have to be prepared for attacks to accelerate, and this is bound to have an impact on the developing class struggle. However it would be a mistake to expect the development of the class struggle to follow the development of the crisis and attacks in any mechanical fashion. First of all the government is already turning its attention to attempting to control the economic fallout, measures which will not prevent a slump but may mean it develops more slowly, not just big bank rescues but also measures to ensure some small businesses either survive or take longer to go bust, slowing the development of unemployment a little; as well as to limit the immediate effects on workers, such as schemes to allow those who can no longer afford their mortgages to stay on as tenants, at least for the time being. We have no doubt about the severity of the attacks that are coming, but we should not forget the strength and intelligence of the British bourgeoisie at this level. In the UK they are ably assisted by the unions who are very experienced in ‘negotiating' to bring in attacks as well as in dividing up the workers' response and limiting it to safe token actions even when there is a real groundswell of militancy.

But the most important factor to take into account is the dynamic of the development of the class struggle itself. In The Mass Strike Rosa Luxemburg analyses the development of the dynamic of the movement in this way: "The January mass strike was without doubt carried through under the immediate influence of the gigantic general strike which in December 1904 broke out in the Caucasus, in Baku, and for a long time kept the whole of Russia in suspense. The events of December in Baku were on their part only the last and powerful ramification of those tremendous mass strikes which, like a periodical earthquake, shook the whole of south Russia, and whose prologue was the mass strike in Batum in the Caucasus in March 1902...". At the same time she went on to look at the immediate economic or other causes of each strike movement. This is the method the ICC has emulated in analysing the international waves of class struggle from 1968 to the collapse of the Russian bloc, looking at the international significance of each movement and of its developments and defeats. We have used the same method in analysing the developments of the revival of struggle since 2003, particularly looking at the development of the sense of class identity and of expressions of solidarity in struggles. It is this development of the international class struggle from one strike movement to the next that makes the use of revolutionary publications to overcome the bourgeoisie's blackout of important movements so vitally important.

We must also remember that the worsening economic crisis, while it makes struggle more essential, also makes it more difficult, and the growth of unemployment which is only just beginning today will only emphasise that difficulty: "the use of the strike weapon is much more difficult today mainly because of the weight of unemployment which acts as a basis for blackmailing the workers, and also because the latter are more and more aware that the bourgeoisie has a rapidly reducing margin of manoeuvre for satisfying their demands.

However, this last aspect of the situation is not just a factor in making the workers hesitate about entering into massive struggles. It also bears with it the possibility of a profound development of consciousness about the definitive bankruptcy of capitalism, which is a precondition for understanding the need to overthrow it. To a certain extent, even if it's in a very confused way, the scale of what's at stake in the class struggle, which is nothing less than the communist revolution, is what is making the working class hesitate to launch itself into such struggles." (‘Resolution on the international situation' in IR 130).

C. British imperialism

The main feature of the development of imperialist conflicts today is a growing chaos, unstable alliances and with the USA, the world cop, only able to impose its discipline through its huge military superiority. In doing so it has itself been one of the major factors in instability. "Today in Iraq the US bourgeoisie is facing a real impasse. On the one hand, both from the strictly military standpoint and from the economic and political point of view, it doesn't have the means to recruit a force that would eventually allow it to ‘re-establish order'. On the other hand, it can't simply withdraw from Iraq without openly admitting the total failure of its policies and opening the door to the desolation of Iraq and an even greater destabilisation of the entire region" (‘Resolution on the international situation', IR 130). Alongside and as a consequence of the difficulties faced by the US as it finds itself mired in Iraq and Afghanistan, various second rank and regional powers are starting to flex their muscles and stir things up.

The resolution on the British situation from WR's 17th congress two years ago noted the great difficulties facing British imperialism. Faced with the offensive launched following the destruction of the Twin Towers in 2001 Britain aligned itself more closely with the US. This was not an abandonment of the more independent strategy it took up following the collapse of the Russian bloc in 1989, in which it tried to steer a course between the US and Europe, playing one off against the other, as it did for instance in ex-Yugoslavia in the 1990s, but an attempt to apply this independent strategy in the new situation under the impact of the storm whipped up by the US. Britain joined the US in Afghanistan and Iraq and found itself sharing in the impasse in these two theatres of conflict, causing disquiet in the military. The July 7th London bombings in 2005 had only emphasised Britain's failure - it had laid itself open to attack, and while it could use the events to strengthen its repressive apparatus, it gained nothing on the imperialist level. This was followed up by Blair's humiliation over the invasion of Lebanon in 2006, when he tried to present himself as a player, only to suffer the humiliation of waiting for a call that never came - Britain was just a complete irrelevance in the situation.

Two years ago the resolution on the British situation told us: "Since the collapse of the Eastern bloc the ICC has argued that British imperialism is caught in a contradiction it cannot resolve. In seeking to play an independent role and to continue to punch above its weight, it must play the US off against Europe, but more and more the reality has been that it is caught between these powers. We have seen this contradiction sharpening... it has provoked a deep division within the ruling class...there is a recognition that the imperialist strategy has to change but there is an absence of any well-defined plan." And it asked; "Will it be possible to forge a new imperialist strategy in the wake of the failure not just of London's independent policy but also of Washington's post-9/11 offensive?"

A change at the top, but still stuck in the same quagmire

Blair handed over to Brown 18 months ago in May 07. While this handover was expected from before the 2005 election, it is common knowledge that he was forced from office sooner than he intended. Pressure had been put on him to go, chiefly through the loans for peerages scandal in which ministers were arrested and the prime minister questioned by police; but pressure was also applied with open criticism of government strategy by the head of the armed forces in 2006, by criticism of informal cabinet decision-making and cronyism in the Butler report. Despite all his good service to the bourgeoisie for 10 years Blair's foreign policy failures and excessively close relationship to the US led to his removal. "...Mr Blair's room for pragmatic manoeuvre in foreign affairs was limited by his partnership with George Bush... his insistence on seeing problems of the Middle East in purely Manichean terms - as a global struggle between Good and Evil, between Western Civilisation and apocalyptic terrorism does not lend itself to good policy-making. Stabilisation in Iraq, Iran's nuclear ambitions, Israel's occupation of Palestine - these are problems that require separate treatment" was a typical comment in the Observer 29.4.07. As an aside, we can see that it is not only the British bourgeoisie that noticed Blair's closeness to Bush - since he left office he has been rewarded with the role of Middle East Envoy and a lucrative post teaching at a US university.

The change in foreign policy was illustrated by the appointment of David Milliband, a critic of Blair's policy on Lebanon, as foreign secretary; Shirley Williams, who had opposed the Iraq war as an advisor; and another critic, Mallach Brown, as minister for Africa. Mallach Brown's appointment was described as "inauspicious" by John Bolton, former US ambassador to the UN.

Labour was brought in to defend British interests more independently than the Tory government: "Labour's huge victory, and the humiliation of many of the Eurosceptics, confirms that the most influential fractions of British capitalism have no intention of going back to the old alliance wit the USA" (WR 204, May 1997). After 2001, Britain's closeness to the USA was a result not so much of Blair's relationship with Bush as of its weakness as a declining power in the face of the pressures from America's ‘war on terror'. Indeed, steering a path between the US and Europe will only get harder whoever is in no 10. "Even though Blair has gone it is not possible to put the clock back. Britain's weakened power has been exposed and there is no basis yet for overcoming the divisions this produced in the bourgeoisie. Certainly the ruling class will try to respond to this situation and there may be some shifts in policy ahead of us but there is no way back to Britain's former standing" (WR 306).

Defeat in Basra

When Blair announced a partial military withdrawal from Basra in February 07 there was no disguising that this was a defeat: "By March-April 2007, renewed political tensions once more threatened to destabilise the city, and relentless attacks against British forces in effect had driven them off the streets into increasingly secluded compounds. Basra's residents and militiamen view this not as an orderly withdrawal but rather as an ignominious defeat. Today, the city is controlled by the militias..." (‘Where is Iraq going? Lessons from Basra', June 07, International Crisis Group). And "Anthony Cordesman of the Centre for Strategic and International Studies, in Washington, asserts that British forces lost control of the situation in and around Basra by the second half of 2005" (The Independent 23.2.07). Britain now has what Brown describes as an ‘overwatch role', completely powerless but unable to leave altogether. In March this year, when the Iraqi Army got into difficulties in its push against the Madhi Army in Basra, it called on the US to send troops, ignoring the British troops holed up nearby.

Britain's humiliating weakness was only emphasised when 15 UK naval personnel were detained by Iran in March 07. Blair could only bluster about the crisis moving to a ‘different phase', but it was clear that Iran was in control of this situation.

A further humiliation came in October with a Times interview with the Iraqi PM Nouri Al-Maliki in which he said it was time for British troops to leave and criticised the deal they made last year with the Mahdi Army.

Rise of Iran

Iran has gained from the US ‘war on terror' in Iraq and Afghanistan. In particular the invasion of Iraq "removed Tehran's traditional enemy from the region, while the US reliance on Shia clerics empowered Iran's allies inside Iraq. The US now confronts a greatly strengthened Iran because of its own actions" (Le Monde Diplomatique Feb 07). "Furthermore, the increasing boldness of Iran over its preparations for obtaining nuclear weapons is a direct consequence of the US falling into a quagmire in Iraq, which for the moment prevents a similar massive use of troops elsewhere" (‘Resolution on the international situation', IR 130).

This has been particularly uncomfortable for British imperialism with its troops holed up in Southern Iraq where Iran has greatest influence. The SAS has joined the USA's conflict with and incursions into Iran to protect its troops.

Afghanistan

NATO troops in Afghanistan are also bogged down in a quagmire. Even the UK commander in Helmand has warned we should not expect a decisive victory and there have been calls in the US for a troop surge. It is a country disintegrating into chaos, which is spreading into Pakistan. The Taliban operate out of Pakistan, which is seeing increased incursions by the USA.

Essentially the British bourgeoisie has been unable to extricate itself from the disaster of its close relationship to the USA and still finds itself bogged down in unsuccessful military adventures. Its weaknesses have been exposed, severely damaging its ability to ‘punch above its weight' in an effort to defend its interests world wide. In other conflict zones Britain is also shown to be impotent. For instance whatever support Britain may give to the opposition in Zimbabwe, its old colony, it is hardly an important player in this situation with South Africa negotiating the (failed) compromise. Similarly, Brown could bluster over the war between Russia and Georgia that Russia's actions have ‘real consequences', but this only showed Britain's powerlessness. The perspective is for things to get worse for British imperialism, both because it is embroiled in situations of growing chaos that it cannot control, and because its forces are overstretched. While the economic crisis sharpens imperialist tensions and conflicts, the ruling class is faced with an undefeated working class that it has not prepared for the level of sacrifice needed to significantly increase its military capacity. At the same time the wars in Iraq and Afghanistan are another example of the perspective capitalism has in store - more military chaos, more barbarity.

D. Life of the bourgeoisie

Two years ago the Resolution on the British Situation asked "Will it be possible to contain the divisions within the ruling class?" Blair was still in office, but the bourgeoisie had made it clear he had to go, piling on unprecedented pressure: the loans for peerages scandal had led to police questioning of ministers under caution and even the PM had answered questions. Their real problems with Blair had little to do with a bit of sleaze, which is normal anyway, but the fact the government had got too close to the USA and the informalism and cronyism criticised in the Butler report, both of which robbed foreign policy of sufficient flexibility. Nevertheless at the level of attacks on the working class, the bourgeoisie could be well pleased with the efforts of their outgoing prime minister - pressure on the unemployed to limit costs of benefits, longer hours for some, more insecure and part time work for others, etc. Brown became PM without even a leadership election to great media acclaim and for the first 5 or 6 months could do no wrong. When the media started the campaign about Brown the incompetent ditherer after the party conference season last year, this had none of the bite of the campaign to persuade Blair to resign and played more a role of smokescreen to divert attention from the worsening economic situation in the credit crunch. Brown had the role of scapegoat for the crisis, as well as being responsible for bringing in attacks on the working class - it didn't matter how unpopular this was making him, several commentators told him, as he had no hope of winning an election. It also allowed the media to start playing up the opposition leader, David Cameron, as a credible choice for a future government.

That this was largely a temporary campaign seems to be confirmed by the way the bourgeoisie have started to rally round the Brown government over the last 6 weeks or so as the true seriousness of the present financial crisis and of the recession can no longer be hidden. We have had cross party support for the bailout plan, and the media have played up the prime minister's role in pushing forward the international response to the crisis. We will have to watch the development of the scandals that break out, such as that going on now around Oleg Deripaska. The chronically scandal prone Peter Mandelson has been brought back into the government because his close ties and experience with business will be useful in responding to the crisis, but the scandal about this Russian oligarch affects the Tory shadow chancellor as least as much. For the moment then, the bourgeoisie have an administration that has done what it can to pull back from its previously too close association with the US, and even if this policy has limited success they are cohering, for the moment, in the face of the financial crisis.

E. Decomposition

Decomposition affects every aspect of life in capitalist society, from the increasingly chaotic shifting imperialist alliances and military barbarism, to cronyism in government. Its use by the bourgeoisie is obvious in so many campaigns asking us to look for scapegoats for every ill capitalism foists on the working class, with blame falling to immigrants particularly, but also bad teachers, bad doctors, chavs, and the obese. The pervading sense of ‘every man for himself' through society is a constant weight on the working class, something that has to be fought to develop solidarity and a sense of class identify in every struggle.

However, the most noted and most tragic expression of decomposition is the increase in knife and gun crime among teenagers. A UNICEF report has condemned Britain as a bleak place for children, where many live in fear of crime and violence, the worst among developed countries. If it is particularly bad in Britain it is a response to the future without hope that capitalism offers: "the world that young people are growing up in, with the violence of nation against nation, gang against gang, individuals against each other. Seemingly random pointless violence is a pure product of decomposing capitalism" (WR 311). This cannot be solved by either repression or education, but will no doubt continue to be used in a campaign of fear to try and encourage a feeling of dependence on the state and acceptance of repressive measures.

Conclusion

We find ourselves analysing the British situation today after a year of the developing credit crunch and at the very beginning of a recession that even the chancellor predicts will be long and deep. This poses difficult questions for the bourgeoisie as it tries to keep the banking system afloat with unprecedented rescue packages and stabilise the economy. At the same time it is totally bogged down in failing military adventures in Iraq and Afghanistan alongside the USA which continue to drain resources. In spite of a policy of trying to spend its way out of the crisis, with money it has to borrow, the working class will be made to pay for the crisis.

This gives the working class with much to reflect on about the future capitalism has in store for humanity. The working class remains undefeated and able to respond to the crisis. Nevertheless the fear of unemployment, the understanding that the crisis leaves the ruling class a reducing margin of manoeuvre to satisfy its demands makes it harder to enter into struggle. At the same time the crisis is posing the question of what is at stake in the class struggle today, the necessity to overthrow capitalism and make the communist revolution.

WR 26.10.08

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