For all the supposed ‘success’ of the British economy its real position is actually very fragile. As we showed in a recent article in WR (283 and 284, ‘Britain can’t escape the world economic crisis’), after you’ve stripped away the government falsification of statistics you’re left with a state reliant on debt, an economy increasingly incapable of funding adequate pension provision, unemployment increasing, personal debt still growing and no prospects for improvements stimulated by growth anywhere else in the world economy.

The British government's announcement of the need to 'reform' the pensions system is not unique. Every national bourgeoisie is adopting the same measures: redundancy plans which don't leave any economic sector untouched; relocation of plant and investment; increasing hours of work; dismantling of social protection (pensions, health, unemployment benefits); wage cuts; the growing insecurity of employment and housing; deterioration of working and living conditions. All workers, whether at work or on the dole, whether still active or retired, whether they are in the private sector or the public sector, will from now on be confronted with these attacks on a permanent basis.

One of the main ideological themes used by the dominant class during the 1990s, in order to maintain its ideological domination over society, was the supposed economic health and prosperity of its system. According to this fable, following the recession of 1990-91, the American economy enjoyed the longest period of recovery in history. For some years capitalist acolytes even declared that, thanks to the new communication technologies, their system had arrived at an era of permanent prosperity, and that the so-called "business cycle" had been definitively surpassed.

After months of warning of a possible economic slowdown, the American bourgeoisie has suddenly acknowledged that its economy has in fact been in recession since last March, based not on the traditional capitalist economic criteria of two consecutive quarters of negative growth, but for the first time based on an admission that rising unemployment can be utilized as an indicator of economic decline. 

For years the media painted a rosy picture of the state of the American economy. Today all the hype about never-ending prosperity seems a distant memory. The myth of the “new economy” and the “end of the business cycle” has unraveled. The media is full of stories bemoaning the deteriorating economic situation. Officially the country isn’t yet in recession, although there are few economists that hold fast to this view. Elsewhere around the world, the situation is not much better with increasing signs that world capitalism is heading towards a new global, open recession. The situation is actually a lot worse than they would want us to believe.

The U.S. government continues to boast about its "unprecedented, longest running economic expansion in history." And it is true that the anticipated bursting of the "bubble economy," which we had anticipated was just around the corner has not occurred, and this despite the fact that the elements for open rececession seemed to be in place in 1998 following the collapse of the Asian tigers. State capitalism has demonstrated the resiliency to postpone its economic day of reckoning. On the one hand, much of this economic wonder is based on deception – the manipulation of economic data to paint an artificially rosey picture – and on policies designed to foist off the worst aspects of the global economic crisis on the peripheral countries of world capitalism. On the other hand, the degree to which there is economic growth in the U.S., or, more accurately, the absence of open recession, it hardly makes a difference from an historic perspective. The global economic crisis of world capitalism, a crisis of chronic overproduction, continues to deepen inexorably, regardless of the vicissitudes of the trade vicissitudes of the traditional business cycle that the bourgeoisie focuses on in its propaganda.

Since the spring, the world economy has been the victim of a series of financial tremors: whole states, and some of the developed world's biggest companies, have gone bankrupt, the stock exchanges have rarely been so unstable and fragile. The bourgeoisie's clever economists have trotted out a whole list of explanations for this avalanche of problems: they have 'denounced' the disastrous policies of the IMF, pouring oil on the fire as it came to the 'rescue' of countries in difficulty, the scandal of stock-options encouraging stock market fiddling on a grand scale, the headlong flight into financial speculation and debt by companies, etc.

When the CBI announced recently that Britain would escape recession, this was hardly enough to inspire confidence, particularly once we take into account the fact that manufacturing in Britain is in recession, with a 2% slump in output last quarter. This was followed by the news that the US economy is also just staying out of recession but with a growth rate close to zero. It has cut its forecast growth rate severely and its forecast budget surplus by 50%.

Regardless of delays in the date for the election, the campaign has already started, and it’s clear what’s in store.

The Labour Party’s mock horror movie posters, ‘Economic disaster II’ and ‘Son of Satan’, picturing Hague and other Tories, show that the strategy of making the campaign personal is no idle threat. “Even if we are criticised for being personal, we will be raising the profile of the election. We have got to give people a reason for voting and we will do that by stoking fear of the Conservatives” said a senior Labour spokesman (The Times 20.3.01). This follows on from Blair’s speech in Scotland in February condemning apathy, and Tony Benn’s farewell speech to parliament in which he said “The real danger to democracy is not that people will overrun Buckingham Palace and run up the Red Flag but that people won’t vote.” Academic studies have pointed to the possibility of the lowest electoral turn-out since 1918. The Socialist Alliance is trying to get workers interested in the democratic charade.

The threatened massive redundancies at Rover would destroy up to 50,000 jobs in the West Midlands. The threat to cut car assembly at Dagenham (or even close it altogether) would cause similar devastation, on a smaller scale, in East London and Essex. Tens of thousands of workers face the misery of unemployment and poverty.