Thanks to Will Brown (not pictured) for this

International Buy Nothing Day (Nov 28^th) will be a triumph this year. (http://www.adbusters.org/campaigns/bnd). Behind catchy slogan ‘Participate – By Not Participating,’ the anti-consumerist campaign will mobilise millions of armchair supporters. The retailers of industrial capitalism are desperately facing the collapse of the key Xmas season. Signalling a desperate fall in sales, Marks & Spencers, bell weather of the UK High St, has launched an emergency ‘one day only – 20% off everything’ pre Xmas sale. Deep discounters Lidl, Aldi and Primark are the winners: frugality is the new bling.

M&S’s shock move follows a fortnight of grim economic news showing the financial crisis has slammed into real economy with a vengeance. Unemployment has taken off as demand has collapsed.

ArcelorMittal is the world’s largest steel producer, with 10% of world output of 100,000,000 tons, smelted by 330,000 employees in 60 countries and 4 continents. AM announced last week that they were cutting their annual output by 20% in the face of collapsing world demand from the car and construction industry.

Citigroup is the USA’s largest bank and one of the survivors of the finance industry meltdown. Last week it announced a further 52,000 jobs are to go on top of the 23,000 cut earlier this year. These represent 20% of the workforce and appear as the best guide to the scale of immediate job cuts facing the world’s financial sector. One of the two leading world finance centres, after 2 decades of cultivation by Mrs Thatcher and Blair/Brown, the City of London is expected to be particularly hard hit.

Home to many financial markets, the City is the centre of world shipping finance. This market, the Baltic Dry Index, is currently in turmoil – emergency meetings are underway to stop it collapsing entirely. Earlier this summer, buoyed by record ore and oil prices bid up by speculating hedge funds, shipping rates peaked. The largest bulk ore carriers, called Capewise because they are too long for Panama and Suez canals, were costing a record $220,000 a day to hire. If you want to hire one tomorrow it will only cost you $3,500. The collapse in shipping rates threatens to bankrupt shipping lines and other industry actors. As ship prices have fallen, orders for new freighters have been cancelled. The South Korean yards, making 40% of world tonnage, face disaster. Observers hope that chaos in world shipping doesn’t preview a collapse in world trade.

There are 160,000,000 cars in the USA – one for every adult who can drive. In 2007 16,000,000 new cars were sold, half by the big three domestic producers, Ford, General Motors and Chrysler. Since the summer, new car sales have collapsed to an annual rate of less than 12,000,000 and are still falling. General Motors’ share price has fallen from $29 to $2.40 a share in 10 months. The big three are on the edge of bankruptcy. General Motors and Chrysler will both run out of cash before Obama is inaugurated in late January. They employ 300,000 directly in 80 plants – 68 in Michigan alone. A viscous battle has broken out in Washington over plans to bail them out. A group of Southern Republicans are arguing that they should be left to go bankrupt. They want to know which other failing businesses will the US taxpayer end up buying.

Commentators have been discussing the recession as though it will be on a similar scale to those of the 80’s. Obama and Brown are willing to use Keynesian policy in contrast to the harsh monetarism of Thatcher and Reagan – so perhaps the damage will be limited. But others have pointed to similarities with the 30’s – the profound financial crisis and the broad international scope. Unemployment in the USA rose from 8% to a devastating 25% in 1931. There were bread lines in US cities. Gordon Brown urges us to keep on spending while he secretly prays the pound doesn’t collapse – but Buy Nothing Day has a certain appeal – we can practise for a hard New Year. Bah humbug.

Will Brown

Totterdown