The attacks are not ideological: capitalism really is bankrupt

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This is the leaflet we distributed on the demonstrations against education cuts on 29 January.

The first estimates of economic output in the 4th quarter of 2010 suggest a 0.5% contraction. George Osborne blamed the snow but even with that factored in, growth was still flat. Forecasters have predicted that the UK’s total debt (private and public) will reach £10 trillion by 2015 – 5.8 times GDP even after taking into account the deficit cuts from the current government. Inflation is beginning to get out of control and not only education but every sector of the economy is faced with massive spending cuts, lay-offs and attacks on working conditions.

But the crisis isn’t confined to Britain. The sovereign debt crisis (i.e. investors beginning to lose faith in government bonds) continues to rumble on in Europe. Ireland has already been forced to adopt yet another austerity budget and growing political instability. Portugal, Ireland, Italy, Greece, Spain, and Belgium are also facing serious difficulties that continue to undermine the Euro-area. As for China, some investment banks (e.g. Goldman Sachs) and hedge funds are already starting to reduce their exposure, amid worries that the Chinese miracle may turn out to be the biggest bubble of them all.

The crisis is thus clearly embedded in the capitalist system on a global scale. It is not the product of this or that government’s policy but the result of the economic mechanisms of capitalism itself, over which even the most competent government has limited control. Contrary to capitalist ideology (and that includes the so-called ‘left’), the recession was not caused by ‘greedy bankers’ or ‘neo-liberal’ economic policies. These elements are no more than consequences of far deeper structural issues at the heart of the economy.

The financial crisis and accompanying recession is not a new problem that has suddenly appeared over the last few years. Their roots can be traced at least as far back as the Great Depression of the 1930s. In the 70s, mainly left-wing governments employed the Keynesian policies that successfully held off recession during the post-war boom. However, these were finally shipwrecked on the cliffs of enormous budget deficits, inflation and recession.

In the 80s, the era of ‘Reaganomics’ and ‘Thatcherism’ there were the brutal recessions of 1981 and 1990. The ‘third way’ popularised especially by Blair and Clinton in the 90s was punctuated by the Mexican ‘Tequila’ Crisis of 94, the Asian Crisis of 97, the Russian Crisis of 98, and the complete breakdown in Argentina in 2000.

All governments are our enemy, not just this one!

What does this potted history of the crisis tell us? For one, it demonstrates that the crisis is historic in scale, a product of an entire social system in decline. The media usually blame the government in power for the crisis but it has been a constant companion of right and left-wing governments in every country, and so have the resulting attacks on our living standards. Whether it’s the wage freeze imposed by Labour’s ‘social contract’ in the 70s or the mass unemployment under Conservative governments in the 80s, the common denominator under all governments is that the working class has to pay for the crisis.

For all their fine words, once in power, every would-be government is confronted with the same economic reality which demands workers sacrifice their interests for the sake of ‘their’ country. From this perspective, all governments are the same and participation in elections or signing petitions begging the capitalist state to have mercy are all a waste of time. The only restraint on capital’s assault on the working class is its estimation of how far it can push us before we start pushing back.

But how can we fight effectively? Firstly, we must challenge the idea of each sector fighting its own corner: instead, we must try to struggle together wherever possible. In colleges and workplaces we can hold general meetings open to everyone, regardless of faculty, job or union, where real decisions can be made about the demands to raise and how to win them. We can send mass delegations to other colleges and workplaces inviting them to join in.

Demonstrations should become a vehicle for workers and students to discuss together, for reaching out to other workplaces under attack (local councils, postal sorting offices, etc.) and asking those workers to join them.

But ultimately, the severity of capitalism’s decline is such that even the most vigorous struggle can only bring about a temporary relief.Capitalism has no choice but to come back for more. Eventually, the struggle against austerity must go beyond immediate self-defence and begin to pose the question of replacing a decrepit capitalism with a new social system that will provide for the needs of all members of society.

This is not a utopia; the weapons of self-organisation and class consciousness forged in the defensive struggle will be the same ones that will one day be used to overthrow our exploiters and build a new world of human solidarity.

International Communist Current 27/1/11