Crisis brings ever deepening poverty

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As we approached the 2010 general election in Britain the ICC reminded workers of what the experience of the Labour government had been. Not only was the gap between the wealth of the rich and the poverty of the poor much the same as it was 60 years ago: the impoverishment of a great many was worsening.

The statistics, official and unofficial, that are produced on an endless carousel, continue to show that the state of the capitalist economy means further deterioration in the conditions of life of the working class.

In March, for example, it was confirmed that, with official price inflation rising faster than official wage levels, real household income had fallen for the first time in 30 years, and by the greatest amount since 1977. It doesn't take a genius to work out that, with a pay freeze and pay cuts in the public sector, and the private sector imposing the 'discipline of the market', incomes are down and the real level of price rises is higher than official inflation.

The official acknowledgement of the decline in incomes is not only bad news for those whose incomes are directly under attack but also for the overall state of the economy. If, as some claim, consumer spending accounts for 65% of the economy, then lack of spending power, with real earnings falling and with cuts to benefits and tax credits, is going to lead to more businesses going under, more unemployment, and even less money in the economy.

The most recent forecasts of the OECD for the British economy have unsurprisingly been further revised down. More dramatically, another forecast, by the Resolution Foundation, suggests that average pay in 2015 will be no higher than in 2001. This puts into clearer focus the 'real household income' question. Continuous inflation over 14 years means a continuing erosion of living standards for those in work. For those out of work the many cuts in benefits will further worsen the quality of life for the unemployed.

Meanwhile, the difference between the top earners and the rest of the working population is back at 1918 levels, or approaching the situation in Victorian times – according to who is interpreting the figures. The top 0.1% has the same proportion of national income as it did in the 1940s. The income of those in the top 1.0% went up 13% in 2009-10. The annual income of the chief executives of the FTSE 100 companies went up 32 per cent last year to an average £3.5million. The income of the top 0.1% is now 145 times that of those on median full-time incomes. Between 1996-97 and 2007-8 the income of the bottom 50% went from £16,000 to £17,100; by 2019-20 this is predicted to reach £18,700, while the top 0.1% will average £901,600. Most of these increases in social inequality took place under a Labour government that was supposedly committed to 'social inclusion'.

The fact that lots of the big money is made in financial speculation, hedge funds, insurance, banking, property, land, advertising and all sorts of other dubious 'services' is particularly galling when you consider the meagre rewards given to those who work at the sharp end in health, education, construction, manufacturing, transport and other areas of activity from which people can directly benefit.

Every tranche of figures tends to confirm an ever-widening impoverishment. Those who claim that capitalism can be reformed so that all can benefit have no evidence for such a proposition. The development of the class struggle is the only basis for tackling the problem.

The class struggle isn't simply between the rich and the poor. The fundamental conflict in capitalist society is between the ruling bourgeoisie and the working class that produces all value in society. Workers' struggles don't consist in attacks on the rich as individuals but need to attack, dismantle and replace the basic social relations of capital (wage labour and production for profit) and the state which tries to keep them alive, despite the fact that they are the fundamental reason for the impoverishment of the vast majority of human beings.

Car 3/6/11