** SPECIAL** SPECIAL** SPECIAL** SPECIAL** SPECIAL** SPECIAL** Communist Party of Britain, Oxfordshire Branch c/o CPB Ruskin House, 23 Coombe Rd, Croydon CR0 1BD cpb.oxford@virgin.net
I M P A C T
This is an edited article from the original by John Foster, international secretary of the Communist Party of Britain published in the Morning Star, 16.10. 2008.
People’s solution Communist parties across the world have long argued that the exponential expansion of credit and debt was unsustainable. It inflicted immediate costs on the weakest and poorest and mortgaged the future. Communists also warned that the collapse of this system would bring no automatic progress to a fairer social order, let alone socialism. As in the 1930s, finance capital would seek to resolve the crisis on its own terms at the expense of working people, opening the way for the politics of the right and far-right, with steps towards a fully fledged war economy one option. This is why clarity on the nature of the crisis is so critical. It’s not, as the Tories now say, about bonuses and fat cat City managers. It’s about how finance capital, the ultimate controllers of both banks and industry, have been able to shift the political balance of forces in their favour over the last 30 years, destroying the limits on capital won by the working class and imposed through the democracy of national parliaments over the previous half century.
The issue is democracy. The ability of the majority, of the working class collectively, to exercise power over capital.
Communist Party of the USA chair Sam Webb traces the crisis back to the political offensive of the Reagan administration against both the gains of the working class in the US and the Soviet Union and its support for anti-imperialism across the world. “While financialisation was an outgrowth of the systematic weakness of US capitalism, it was also the leading edge of a neoliberal model of capital accumulation designed to restore US capitalism’s momentum, profitability and dominant position in domestic and world affairs.” In Britain, the Tories under Thatcher spearheaded these policies. They used the shock treatment of mass unemployment to weaken the power of the organised working class. The City of London became the deregulated global centre for US financial dealings and the Tory-inspired Single European Act demanded privatisation everywhere – drastic controls over public borrowing and no controls over capital. But, as Webb points out, financialisation was also “a two-edged sword opening new fault lines in the US and global economy.”
NOVEMBER 2008
www.oxfordshirecommunists.org.uk The deunionisation and casualisation of labour brought record profit levels. So did the opening of the resources of the Third World and central and eastern Europe which followed the disintegration of the Soviet Union. But this brought a new problem. How was this bonanza of capital accumulation to be profitably reinvested in circumstances where real incomes were stagnant and Third World countries crippled by debt? George Bush had two answers. One was war. The other was unlimited credit expansion under the auspices of Alan Greenspan, Bush’s man at the US Federal Reserve. Workers were persuaded to compensate for low incomes by accepting unsustainable long-term credit. Webb says: “While it stimulated the domestic and global economy, it left our nation with an astronomical pile-up of household, government and corporate debt.” And the rest of the world. It was Karl Marx who argued that, in the final phases of capitalism’s regular boom and bust cycles, capital’s overaccumulation would spill over into financial speculation, ripping away the savings of workers and small capital in the search for profit. Marx also warned that as the ownership of capital became more concentrated so this “appropriation through fictitious capital” would become more and more central to capitalism’s operations. This is why Communists in Europe and the US have rejected the so-called “rescue packages” dictated by the banks. Handing public money to the banks on the colossal scale demanded without full, deliberate and carefully planned public ownership will only make things much worse. It will force up tax rates, cut purchasing power and rob governments of the ability to make the public-sector investments required to get the real economy moving again. It is for this reason that the CPUSA has raised so sharply the question of public ownership of the bank which could now be purchased at a fraction of the “rescue” price and which would allow the direct channelling of investment into the economy in return for full or part public ownership. In Greece, which has seen one of the biggest “banker rescues”, the Communist Party is demanding direct state intervention in the economy, including public-sector housebuilding; takeover of mortgages at reduced rates; action on wages and benefits to increase mass purchasing power and an end to the privatised pension system. ~ over
CPB OXFORDSHIRE MEET EVERY THIRD THURSDAY OF THE MONTH (EXCEPT AUGUST) AT 7.30PM IN OXFORD TOWN HALL
** SPECIAL** SPECIAL** SPECIAL** SPECIAL** SPECIAL** SPECIAL** Greek Communists make a further point. They stress that it is now essential that the trade union and labour movement directly challenges the whole logic of state monopoly capitalism, its neoliberal agenda and the EU structures that sustain it. For years, many sections of the European trade union movement have been paralysed by ideas of partnership within the framework of the EU. The current crisis exposes the scale of this con trick. It was the draconian limits on government borrowing that drove privatisation. But why borrowing limits for the public sector and none for the private? It was private credit creation by finance capital that brought this disastrous crisis. And where does the bank rescue now leave the private finance initiative? The government is now giving banks the cash to lend to PFI companies to lend back to the government at extortionate interest on public assets that the privateers then take possession of and ruin. Can even the most brazen new Labour minister still argue for that one? The case for alternative policies is unanswerable. The capitalist market can’t deliver. There has to be, as argued in the Communist Party’s Left Wing Programme, public investments and ownership in housing, energy and transport, major strategic intervention in manufacturing industry and measures to increase pension and benefits. Nothing else can stop accelerating recession as jobs are lost, real incomes decline and cuts savage the public sector. This is necessary for political as well as economic reasons. The current crisis provides exactly the circumstances for the far-right to make further advances. There is only one antidote – clear, simple explanation of the real causes matched by mass campaigning for progressive alternatives. And only by such mass campaigning led by the trade union and labour movement can a sufficiently broad and popular movement be created that can shift government policy. This is what Webb calls for in the US – a model drawn from the New Deal, taking its strength from the power of working and oppressed peoples that can challenge the power and practices of the agents of capitalism. Greek Communists call for a similar response across Europe. Working people must seize back and restore the democracy of their parliaments, above all their economic powers, from nullification by EU treaty. The past weeks have vividly exposed how finance capital in each country uses “its own” state power at the level of the nation state to salvage its interests. But, under EU treaty law, national parliaments are banned from implementing any alternative, non-neoliberal solutions. They are not allowed to impose controls over capital, limit its movement or redevelop the state sector. This is why real democracy, the balance of power between capital and labour, is central to resolving the current crisis. It is also why united collective action led by the trade union and labour movement, in Britain and internationally, is now of such critical importance.
IMPACT ON LOCAL SERVICES Shown below are Oxfordshire Authorities’ investments of taxpayers’ money at risk in Icelandic Banks which have collapsed, jeopardising public services and jobs. Authority
Oxfordshire County Council Oxford City Council Cherwell District Council South Oxfordshire District Council Vale of White Horse District Council West Oxfordshire District Council Thames Valley Police Authority Total
Amount
£5.0m £4.5m £6.5m £2.5m £1.0m £9.0m £5.0m £33.5m
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CPB BOOKLETS ~ £2 (cpb.oxford@virgin.net)
*The Case for Communism * Introducing Marxism* *Halting the decline of Britain’s Manufacturing Industry * The Future of Pensions* *The Politics of Britain’s Economic Crisis* (Issues tackled in the lead article examined in greater detail)
Classics of Communism series ~ *Manifesto of the Communist Party * Wages, Price & Profit * On Karl Marx & Marxism*
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CPB OXFORDSHIRE MEET EVERY THIRD THURSDAY OF THE MONTH (EXCEPT AUGUST) AT 7.30PM IN OXFORD TOWN HALL