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In WR 280 we included part of a report presented to our recent 16th Congress on the current position of British imperialism. In this issue we’re publishing the resolution on the British situation adopted by the Congress.
The economic crisis
1. The economic crisis has continued to develop for more than 35 years. The bourgeoisie has been able to slow the pace of the crisis and even to gain temporary respite in some areas of the world. But it is unable to halt or reverse the crisis. One illustration of this is the slow decline in the average global growth rate per decade, which fell rapidly from 5.2 % in 1962-69 to 2.8% in 1980-89 and more slowly after that, with rates of 2.6% in 1990-99 and 2.2% in 2000-2002. A second illustration is the growth of debt, both national and household, which has risen significantly and remains high. This debt is crucial to the survival of capitalism. A third illustration is the increase and persistence of unemployment.
2. The British economy seems to stand at odds with this. “Since the mid-1990s, GDP growth, inflation and unemployment have been remarkably stable in the United Kingdom. Nowhere else in the OECD has economic activity remained so consistently close to trend over this period. The United Kingdom has also been among the most resilient economies during the recent downturn” (OECD Economic Surveys, United Kingdom, 2004, p.23). It has even been able to close the gap with France and Germany, its historic economic rivals, leading to claims that it has been able halt its historic decline.
3. The above average growth rates achieved by British capitalism in recent years are the result of an increase in exploitation. The productivity of British industry is substantially below that of Germany, France and the US. Unit labour costs have risen more rapidly than in the US, while Germany and France have achieved reductions. Investment in research and development and in training remain below that of the OECD as a whole. The increase has been due principally to an increase in the hours worked and to a lesser extent to an increase in the proportion of the population of working age actually in work. While the official working day has declined there has been a real increase due to the growth of overtime, which is frequently unpaid. The hours worked declined from the start of the last century until 1984 when they began to rise again. Long hours for one part of the working class goes hand in hand with part time work for another part and reflects a general polarisation between overwork and underwork. The health of the British economy rests on a regression to the early days of capitalism when growth was achieved through the increase in the absolute rate of exploitation. This situation is the result of a quarter of a century of gradual, covert attacks by the British bourgeoisie, to create a ‘flexible’ labour market and reduce restrictions on business and it reveals once again its intelligence and ruthlessness.
4. The increase in production has not been realised through a corresponding increase in trade. The historical decline of Britain’s share of world trade, from 25.4% of manufactured goods in 1959 to 7.9% in 1992 has now reached 5.2% of both manufacturing and service industries while the overall balance of trade remains negative. Nor is it due to increased government spending, which has averaged about 40% of GDP a year since 1990. The increase in growth rates rests on a very substantial rise in the indebtedness of the working class. Average household debt has risen to 135% of income; credit card debt has gone up at a rate of 12% a year and re-mortgaging is currently running at 16% per year. Total debt in Britain reached £1 trillion in the spring of 2004.
5. The developing pensions’ ‘crisis’ in Britain, as in the rest of the advanced capitalist countries, is an eloquent expression of the bankruptcy of the whole capitalist system. Something that should be positive, the increase in life expectancy, in decomposing capitalism becomes negative because it confronts the working class with a future of continued exploitation and poverty. Furthermore, the working class benefits least from the increase in life expectancy. The pensions’ ‘crisis’ is not a result of the success of capitalism but its failure. A consequence of the crisis of capitalism, it is turned into an ideological and material attack on the working class by the ruling class.
6. The health of the British economy rests on diseased foundations; its current animation is a result of the drug of debt. The ruling class knows this and is trying to manage and limit the decline; hence the policy of gradually increasing interest rates to slow the escalation of debt. At the same time it cannot allow it to stop: if the working class decides to follow government advice and save for its pension the economy will slide; if house prices decline sharply it has been estimated that growth will drop by 2 percentage points. This is the dilemma of the ruling class and is why it is renewing efforts to increase the labour force participation rate, notably through the assault on incapacity benefit. Similarly, the increase in the absolute exploitation of the working class risks provoking a response; hence the efforts to once again increase productivity through a range of measures to increase skill levels, favour investment and research and reduce costs. The British bourgeoisie will try to maintain its success in managing the crisis but it will become harder and harder for it to do so, requiring more direct attacks on the working class that risk provoking the response it has worked so hard to prevent.
7. Following the collapse of the Eastern Bloc in 1989, the ICC recognised that imperialist rivalry had entered a new phase: “In the new historical period we have entered, and which the Gulf events have confirmed, the world appears as a vast free-for-all, where the tendency of ‘every man for himself’ will operate to the full, and where the alliances between states will be far from having the stability that characterised the imperialist blocs, but will be dominated by the immediate needs of the moment. A world of bloody chaos, where the American policeman will try to maintain a minimum of order by the increasingly massive and brutal use of military force” (IR 64, “Militarism and Decomposition”, 1991). This has been amply confirmed in the years since, above all by the wars in the Gulf, in Yugoslavia, Afghanistan and the Gulf again but also by the innumerable small, but no less cruel and bloody wars all over the globe.
8. The British bourgeoisie, drawing on its long experience, generally recognised that its interests were best served by trying to play the US off against Europe. One of the main reasons for the election of the Blair government was because it was capable of pursuing this independent strategy in an effective manner. This led to conflict with the US in which Britain gave and received blows, tacking now to the US, as in the first Gulf War and now against, as in the offensive in Kosovo. The US for its part used the situation in Northern Ireland to apply pressure, culminating in the Good Friday agreement that brought the republican movement into the government.
9. Following the attack on the World Trade Centre, the US launched its war on terror, in reality an attempt to encircle its main rivals in Europe. The British bourgeoisie’s response was to immediately turn towards the US, not from any sense of loyalty or solidarity in the war against terror, as the media proclaimed, but in order to be in as good a position as possible to safeguard and defend its interests. In this it showed its understanding of the real stakes of the situation. It recognised that it had either to turn to the US or to Europe – in reality Germany. The move towards the US was the best tactic for it to maintain its independent strategy by adapting it to the new situation; it was not a change of strategy.
10. Since 9/11 the independent strategy has continued to be pursued by the British bourgeoisie in both word and deed. It has proclaimed its determination to be a ‘force for good’ in the world and affirmed its intention to maintain alliances with a range of powers. While it has very publicly continued its alliance with the US in Iraq and Afghanistan, elsewhere it has been willing to quietly oppose US interests. It has sided with Europe against the US in Iran, with France in Africa and played its own hand in the Middle East and Libya. In Ireland it has tried to reduce the impact of the Good Friday agreement through the suspension of the power-sharing executive and the refusal to hold elections.
11. The central division that has developed within the British bourgeoisie is not a dispute over strategy but over the best tactic to continue to defend the independent strategy that remains the dominant view in the ruling class. Recently Blair has reaffirmed Britain’s independent stance and declared his opposition to US ‘unilateralism’.
12. The tactic that the British ruling class is following is dictated by the dynamic of the situation, but it is unstable. The increasing tensions between the great powers can only make it harder for any policy that situates itself between them and that attempts to play one against the other. The British bourgeoisie is incapable of resolving the contradiction it is in. This is because there is no rational solution. The US will continue to assert itself and, recognising the situation of the British bourgeoisie, will put pressure on it without mercy. The danger of the tack towards the US lies in the fact that it makes the British ruling class more vulnerable, not just to pressure from the US but to reciprocal pressure from its European rivals. The perspective is thus for the contradiction to continue to sharpen.
The class struggle
13. With the collapse of the Eastern bloc the class struggle entered a new phase. The reflux in class consciousness and combativity led to the loss of the class’ sense of identity. In the decade and a half that followed there were important developments in the situation, with some significant expressions of combativity and a high level of manoeuvres by the bourgeoisie. The weakening of the impact of the campaigns around the ‘death of communism’, the evident falseness of the idea of a new world order and of an economic recovery created the situation in which a qualitative change in the situation could begin to develop. The large scale struggles in France in 2003 were one expression of this. The subsequent relative success of the ruling class in re-imposing a degree of social peace has not reversed this development.
14. There have been no similar large scale struggles in Britain although there have been some significant smaller strikes, such as by postal workers and the fire-fighters. The British bourgeoisie has continued to use manoeuvres against the working class. This does not mean that the situation in Britain is an exception but that the evolution of the situation does not affect everywhere equally or at the same time. In particular, the relative success of the British bourgeoisie in defending the economy and spreading propaganda about its health means that illusions in the economy are greater than elsewhere.
15. Another factor in the relative calm in the class struggle in Britain has been the ability of the bourgeoisie to introduce its attacks in a gradual, almost hidden way. Official unemployment has fallen substantially, the reality being hidden by various methods and most effectively by pushing workers onto incapacity benefit. The fact that these efforts are hidden somewhat clumsily means that the ideological impact of unemployment - spreading fear amongst the working class – is still there. Real poverty has also grown, albeit hidden behind a plethora of anti-poverty strategies while the polarisation of wealth has increased. In the degradation of the environments in which it lives and works and in its human relationships the proletariat feels the impact of decomposition increasingly sharply. Despair, violence and the fear of violence grip many and obliterate the idea of a meaningful future for humanity.
16. The ruling class has waged a largely successful offensive against the working class, both materially and ideologically. It has led the world bourgeoisie in the effectiveness of its economic attacks and has continued to mount successful manoeuvres against the class struggle. The election of the Labour government marked a strengthening of the ruling class against the working class, especially given the anger directed at the Tory government and the illusions in the new government, which was consequently able to take the attacks to a level impossible under the previous government. Overall, the Labour government expressed a strengthening of state capitalism.
17. However, the ruling class also suffers from the effect of decomposition. One expression of this is the personalised dispute between Blair and Brown. Another is the informalism of the Blair government, which prompted criticism from the Butler Report.
18. The working class in Britain is not currently at the forefront of the class struggle. This expresses the heterogeneity of the situation of the class, which results from the continuing weight of the reflux and the campaigns of the bourgeoisie and the real difficulty of the working class even to recognise itself as a class in society rather than just a collection of individuals. There are a number of reasons for the current situation in Britain: the experience of the two classes, the historic strength of the unions, the legacy of the defeats suffered in the miners’ strike, the effectiveness of the gradual introduction of economic attacks and the continuing ideological weight of the Labour government. The working class in Britain still harbours illusions in the capacity of capitalism to meet its needs but, despite all the skill of the bourgeoisie in managing the crisis, its deepening means that more direct attacks have to be made and illusions become harder to sustain. As this happens the working class in Britain will begin to march in step with its class comrades around the world.