A particular quirk of the British left is to celebrate every small industrial action involving a few dozen or a few hundred people as the harbinger of an imminent massive wave of industrial struggle. It does not even particularly matter if these disputes are won or lost. Of course if you say it for long enough you will eventually be right.

This is a version of an article which appears in the current issue of Permanent Revolution.

Key local struggles against plant closures and job losses marked the first half of 2009 in Britain, leading some on the left to declare after Bob Dylan that ‘The times they are a’changing’, but as George Binette documents the sharp downturn has yet to spark a truly mass upsurge in resistance. He assesses the background to apparent working class passivity in the face of an employers’ offensive

Two separate but very much related waves of unofficial strike action, complete with ‘flying pickets’, unfolded in the first half of 2009 in Britain’s engineering construction industry, with both centred around sackings at a Lincolnshire oil refinery. Both involved wildcat action by several thousand other workers at more than 20 refineries, power stations and other industrial sites across Britain.

After a small band of young workers occupied a Dundee box manufacturing workplace, the spring and summer months witnessed the occupation of two of the three factories owned by the car parts manufacturer, Visteon, a spin-off of Ford’s global empire. Ultimately, the occupiers won a substantial boost in redundancy payouts, though no saved no jobs. By June Unite members at the former Visteon, now Linamar, factory in Swansea had secured the reinstatement of their victimised convenor after a show of overwhelming support for indefinite strike action. By late July the sit-in by a small section of the previously unorganised workforce at the Vestas wind turbine plant on the Isle of Wight had become a focus for national media attention and solidarity activity among both trade union militants and climate change campaigners.

The RMT, which recruited dozens of members from among the Vestas workers, staged a two-day strike on London Underground in June. This eventually secured concessions on compulsory redundancies. The union has also been involved in several skirmishes with regional rail privateers around Britain.

Across the education sector teachers in the NUT mounted a successful campaign of resistance through strike action in July against compulsory redundancies at Haggerston secondary school, while UCU lecturers at Tower Hamlets Further Education College launched an indefinite strike in late August over job and funding cuts.

The second week in September saw another indefinite strike get underway as refuse collection workers in Leeds walked off the job in opposition to swingeing pay cuts, associated with the implementation of a “single status” pay package.

Meanwhile, in the public sector, a protracted dispute between CWU members and Royal Mail bosses, with the not so tacit backing of the New Labour government, continued to grind on as the latest and potentially decisive battle in a long-running war of attrition over the restructuring and threatened privatisation of postal services. A national strike ballot was finally underway in September.

The above list is hardly exhaustive and suggests that just possibly a significant change is in the air. An editorial in Socialist Worker (12 September edition, p 16) went so far as to refer to a “new wave” of strikes and suggested that developments in recent weeks hinted at a qualitatively different kind of militancy than witnessed for at least two decades with an upturn in unofficial (and so unlawful) action and indefinite strikes as opposed to the one-day walkout, which had been typical of most disputes since the 1980s.

But however inspiring and instructive these recent fights have been such examples of militant opposition to a widespread employers’ drive to slash jobs and labour costs have remained very much the exception over the course of the past 18 months in the face of the most severe economic slowdown in a generation, with unemployment rising remorselessly. Though the mainstream media has probably exaggerated the extent of concession bargaining and straightforward collapse in the face of bosses’ demands, it has been undeniably widespread, most notably in sections of manufacturing (Honda, Nissan and JCB being prime examples) and at previously nationalised giants such as British Airways and BT. Thus far, at least, even with the examples of resistance cited above, the response of the organised working class – itself a much smaller proportion of the total workforce than 30 years ago – has been muted, whether in comparison to the levels of resistance reported in several other nations or in Britain itself during the early 1980s.

Should we be terribly surprised by this? On balance, no. Despite the frequent assumption that economic crisis breeds working class militancy, there has never been a simple correlation, much less a causal relationship between economic slump and a rising tide of resistance. Indeed, an examination of strike figures during recessions in Britain from the late 1880s onwards indicates that the number of strikes almost invariably falls (Kelly, J – Trade Unions and Socialist Politics, Verso 1988, p 275). Indeed, periods of economic expansion tend to fuel the growth of industrial struggle, though as outlined below that was not really the case during the first two terms of New Labour in office (1997-2005).

Thousands may have marched through the streets of Kilmarnock over the threatened closure of the Scottish town’s Johnny Walker distillery, but a widely publicised May demonstration in Birmingham, called by the Unite union to protest at the loss of manufacturing jobs, attracted at most 7,000 protesters, even with the backing of the odious Digby Jones, former head of the Confederation of British Industry. Many times more had marched through the same city at the start of this decade when the Rover car plants faced the prospect of closure. Today, unlike the late 1970s and early ‘80s, there is no remote equivalent thus far of the Right to Work marches or the officially backed People’s March for Jobs.

The contrast between Britain and other advanced capitalist states can be overstated, but it is undeniably the case that Britain has not witnessed the phenomenon of “boss-napping”, which became almost commonplace in France in early 2009, nor the months of factory occupations in South Korea, defying brutal military assaults or, for that matter, the 100,000 strong protests seen in the late winter and early spring on the streets of Dublin, which very nearly led to a general strike in the Irish Republic alongside the sustained if only partly successful factory occupation at Waterford Glass.

Beyond the occasional headline reports of protest and resistance, the Government’s own statistics appear to confirm an image of relative passivity. Of course, official statistics, however accurate and detailed, tell only a part of the story, but we ignore the evidence they provide at our peril. While revolutionaries must not yield to an intellectual pessimism that breeds despair and paralysis, its antidote is not to be found in a gung-ho optimism that sees in each and e
very strike or workplace occupation the “end of the downturn” or the harbinger of imminent working class revolt.

So what do the official statistics tell us? Against the backdrop of a remorseless rise in unemployment over the course of 2008 levels of industrial action were not terribly different from those recorded in 2007, the final 12 months of a prolonged economic upturn. According to an analysis published in the June 2009 edition of Economic & Labour Market Review, the number of days lost to employers through strikes in 2008 totaled some 758,000, something of a dip from the previous year. According to author Dominic Hale:

‘The [2008] total is higher than the average number of working days lost per year in the 1990s (660,000). However, it is considerably lower than the average for both the 1980s (7.2 million) and the 1970s (12.9 million). The total of 144 stoppages in 2008 is marginally higher than the 2007 total of 142. . . . The number of stoppages has fallen sharply since the 1980s when the average annual number was 1,129. The average number in the 1990s was 273 per year. There were 511,200 workers involved in labour disputes during 2008; this

compares with 744,800 in 2007. The number of workers involved is higher than the average number involved in the 1990s (201,600) but below the average in the1980s (1,040,300).’

Strikes in ‘public administration’, largely involving members of the PCS in central government departments and UNISON members in local government across England, Wales and the north of Ireland, accounted for more than four out of five days lost. A further 14 per cent of days lost resulted from strikes in the education sector. A total of 28 stoppages in transport industries added up to 24,800 working days.

Despite the media focus on a ‘white collar recession’, ravaging financial services, there is no doubt that manufacturing employment shrunk dramatically from late 2007 onwards. Even as each week in 2008 seemed to bring news of still more job losses across manufacturing industries the total number of strike days across the whole of manufacturing industry fell to fewer than 7,000 – down from more than 15,000 the year before – and the lowest total on record.

In 1966 during the latter stages of the boom following the Second World War, manufacturing’s share of the total workforce peaked at more than 35 per cent, but now barely one in seven jobs across the economy is in manufacturing – one dramatic indicator of the significant structural changes that have occurred in virtually all of the advanced capitalist countries in recent decades, but to an exceptional degree in Britain.

Since the first quarter of 2008 both the proportion of the population aged 16-64 in paid work and the number of people in employment have fallen. The number of advertised vacancies has fallen sharply. The numbers of unemployed people, the unemployment rate and the claimant count have all shot up. All told some 600,000 people lost jobs in 2008 alone. The number of inactive people of working age and the inactivity rate has increased, while growth in average earnings, excluding bonuses, fell over the span of 18 month though earnings grew overall when bonuses and overtime payments were included in the calculation.

The employment rate for people of working age was 72.7 per cent for the three months to June 2009, down nearly a percentage point from the previous quarter and down 2.0 per cent over the year. The total number of people in employment for the three months to June 2009 was 28.93 million, down 271,000 over the quarter and down 573,000 over the year.

The unemployment rate was 7.8 per cent for the three months to June 2009, up by 0.7 per cent over the previous quarter and by 2.4 over the 12-month period. Officially, the ranks of the unemployed rose by 220,000 over the quarter and by 750,000 over the year, reaching 2.43 million by June.

The claimant count, which measures the number of people claiming Jobseeker’s Allowance, reached 1.58 million in July 2009. It has not been higher since May 1997, the month New Labour came into government. The count rose 24,900 over the previous month and by 709,000 over the year.

The number of redundancies in the three months to June 2009 was 277,000, a fall of some 9,000 over the previous quarter but still marking an increase of 150,000 from the same quarter in 2008.

There were 427,000 job vacancies listed in the three months to July 2009. This was the lowest figure since comparable records began in 2001 and marked a decline of some 26,000 over the previous quarter and 203,000 over the year from July 2008. Most sectors have shown falls in vacancies over the second quarter of 2009 with the largest decline occurring in finance and business services (down 13,000).

The inactivity rate is an estimate of the proportion of people of working age, who have dropped out of the official labour market. The inactivity rate rose to 21 per cent for the three months between April and June 2009, up 0.3 per cent over the previous quarter and an overall rise of 0.1 per cent over the year. The number of economically inactive people of working age rose by 127,000 over the quarter and by 83,000 over the year to reach 7.95 million.

Such a backdrop would hardly seem likely to create an auspicious atmosphere for fights over pays.

Average earnings, both including and excluding bonuses, which shrank substantially in the financial services sector in the immediate aftermath of the credit crunch, increased by 2.5 per cent in the three months to June 2009 compared with the previous year. This figure suggests the lowest annual growth rate in earnings since comparable records began in 2001. Even so, this average figure was ahead of either official estimate of the inflation rate over much of the same period as by late spring 2009 the annual rise in the Consumer Price Index was below two per cent and the Retail Price Index was negative, fuelling speculation about the prospects of Britain experiencing a period of Japanese-style deflation, which has yet to materialise.

In fact, generalisations about changing patterns of pay growth/contraction are notoriously problematic due to the uneven pattern of unionisation across the economy, the differential impact of the recession on various sectors of capital, the persistent reality of skills shortages in certain industries/occupations and the varied responses of organised sections of the working class to those attacks that have been unleashed by the employers. What is clear, however, is that despite the defeats suffered by the organised working class over the past 30 years, the type of wage stagnation that has characterised the experience of the US workforce since the early 1980s has not reallybeen repeated in Britain.

As Alastair Hatchett and Ken Mulkearn of Income Data Services (IDS), one of the most highly regarded sources of pay analysis, noted in a letter to The Guardian published on 7 July 2009:

The data for April 2009, using figures not seasonally adjusted and excluding bonuses, shows earnings growth of 2.5% in the private sector and 3.3% in the public sector, consistent with IDS research on pay settlements. In the private sector, the official figures show manufacturing (where most freezes are) at 1% and private services at 2.9%.

Meanwhile, recent developments in the public sector again refute the notion that its workforce has been cosseted against the impact of developm
ents in the real economy. In early September three unions (UNISON, the GMB and Unite), which between them organise the majority of local authority workers, numbering more than 800,000 across England and Wales, announced that their members had overwhelmingly consented to a pay deal entailing just a one per cent ‘rise’ for the vast majority of council workers. In a joint official statement the union tops charged with negotiating with the local authority employers said: ‘Acceptance of the offer comes at a time when our members are facing daily threats to jobs and services. They are providing vital council services with the threat of redundancy constantly hanging over them. This vote reflects that threat. We will now be working hard to show the public and service users how much our members do – for so little – in the run-up to next year’s negotiations.’

Just don’t expect us to lead any strikes, then! This, however, begs the question of how do such often unelected full-time officials sell deals that amount to real pay cuts without incurring little more than a murmur of opposition in the big three unions, which account for 60 per cent or more of the TUC-affiliated union membership.

There are several parts to the answer to the question ’how do they get away with it?’ The combination of structural change in British capitalism – itself in no small measure a product of working class defeats – combined with significant lasting juridical changes, associated with Thatcherism, has substantially altered the balance of forces between the main contending classes in favour of the bosses. Meanwhile, within the organised working class movement itself the effects of neo-liberal counter-reform have strengthened the dead hand of bureaucracy. The successive rounds of anti-union legislation of the 1980s and 90s, left largely untouched by New Labour, have meant protracted delays in initiating official action, which is now the all but exclusive remit of union full-timers. There has also been a much enlarged role for lawyers accompanied by vastly greater difficulties for militant activists in arguing for solidarity action and overtly political strikes.

While the sort of business unionism that became the norm in the post-war United States has shallower roots in Britain, the degree of casual collaboration with the employers and their HR lieutenants has risen sharply. For example, a 3 July Guardian article described a meeting of ‘union leaders and their traditional foe – management (in the shape of human resources directors) – . . . at the TUC in central London. The aim was to bring the often warring sides together for a friendly debate on the future of union and employer relations.’

Still more notable has been the unwillingness or inability of the unions affiliated to the Labour Party to obtain meaningful concessions from the Government when the party’s reliance on union funding has actually increased dramatically in the last five years.

Trade union density in Britain peaked just as the Thatcher era dawned. After a dramatic expansion in the 1970s of both union membership and organisation among white collar workers in the private as well as the public sector significantly more than half of the total labour force was at least nominally unionised. Nearly 12.2 million workers belonged to TUC-affiliated unions in 1979. Three decades later and the proportion of the workforce in unions has roughly halved, having stabilised since 2005 at between 26 and 28 per cent of the total. The most recent official figure, based on the Labour Force Survey, indicates a union density of 27.4 per cent, with approximately 6.5 million members (more than 90 per cent of the total) in TUC-affiliated unions after a fall of some 125,000 between 2007 and 2008. According to The Guardian online (11 September 2009) there is evidence of a further overall fall contained in the TUC’s annual report that was due to be released in mid-September. Combined membership of the 61 TUC affiliated unions reportedly fell by about 300,000 in the year to January 2009 to just over 6.2 million.

Across the private sector fewer than one worker in six (15.5 per cent) was in a trade union, while in the public sector union density stood at just over 57 per cent in 2008. The decline in the proportion of workers covered by a collective bargaining agreement has proved even more dramatic over the past 25-30 years, with barely one in three workers covered by a collective agreement, compared to more than 80 per cent at the start of the 1980s.

Though less well documented than the fall in overall union density there has also been a parallel decline in shop stewards’ organisation with the ratio of members to lay representatives worsening dramatically and many stewards’ posts going unfilled year after year even in supposed union bastions. On the one hand, this means that there is often no transmission belt between union headquarters and memberships at large, but it also means that there are often no organised poles of opposition at workplace or branch level to full-time officials even as the existing cadre of stewards becomes mired in a swamp of individual casework.

While quite a few on the Marxist left continue to see in the aftermath of the ‘credit crunch’ a latter day replay of the Great Depression of the 1930s and there is not yet a solid consensus among bourgeois economists about the prospects for the British and world economies, the worst of the recession does appear to be at an end. Even so, unemployment will continue to rise into 2010 and all three of the main parties have made it plain that the public sector workforce must suffer considerable pain to cover the cost of the multi-trillion pound bailout of the banks.

In a 8 September interview with the BBC’s Nick Robinson, Tory leader David Cameron effectively promised to outdo Thatcher by cutting ‘public spending in real terms’. In short, the stage is set for intensified attacks and potentially sharper conflict.

So is the prognosis all doom and gloom for the foreseeable future? The purpose of this article has been to refute simplistic optimism about the prospects for working class resistance by highlighting the legacies that bear down on today’s trade unionists and the workforce as whole. As ever, those who shall make history do not do so in circumstances of their own choosing and the recession has undoubtedly made the terrain of struggle that much more inhospitable for many.

But if – in addition to de facto pay freezes – large scale job cuts, a longer working week and attacks on other terms and conditions, including pensions, are in the offing for the public sector workforce then there might be some good reasons to believe that the real upsurge in struggle will come in 2010 and beyond. Union density is no guarantee of combativity, but public sector workforces remain much more unionised than their private sector counterparts and there is some evidence that there has been an upturn in recruitment to UNISON in 2009, not least among younger workers. This is all the more remarkable given the fact that there has been no national campaign of note waged by the union since the disappointing local authority pay strikes across England and Wales in July 2008.

The more generalised character of the threatened attacks also creates the possibility of a much broader response, involving far larger numbers of workers across wider geographical areas. While the media and employers have frequently sought with some success to put public sector workers against service users, there is also the enhanced potential for alliances between local tenants and service users generally, which again opens up
the prospect for generalisation of struggles. In some cases, as in the campaigns to save primary schools in Glasgow and Lewisham, parents may kickstart campaigns where union support is either weak or absent, though successful resistance on a large scale to closures and privatisations will almost inevitably entail strikes and occupations involving workers in the directly affected services.

Of course, there can be no way of knowing in advance what level of spontaneous resistance forthcoming attacks may provoke. What is, however, certain is that such resistance will face not only the obstacles imposed by the employers and the state, but a variety of forms of opposition from existing union leaderships, particularly in the three biggest unions, with the anti-union laws serving as a pretext for delay and inaction, however strong the evidence of members’ willingness to fight. There can be no pretending that ‘the left’ is in control of any these unions so the challenge for militant activists is clear in UNISON, the GMB and Unite, but there also lessons to be learned from the experience of ostensibly left leaderships in other unions where an emphasis on electoralism and an with it the capture of existing union structures has yielded little or no fruit for the rank and file while failing to transform the unions into vibrant democratic organs of struggle that are truly fit for purpose.

33 responses to “The British working class and the recession: from resignation to resistance?”

  1. The British far left has long been in thraul to a type of spontaneism. A belief that crisis will lead to a more or less sudden upturn in the class struggle, primarily in the form of strikes, and a new vistas will suddenly open to the left.

    This belief served a certain purpose for a time. It was a good antidote to both a reformism that basically assumed the working class is passive, and a toy bolshevism that saw the building of revolutionary “leadership” as the key task. A belief int he sponateous struggle of the class gave hope that one day things would change through the struggle of the class.

    This spontaneism has become more and more of a delusion as over and over again an upturn has failed arrive.

    This fact tends to get refuted by some with an endless list of previous upsurges, some British, but mostly foreign. It has frequently meant a disregard for the real circumstances that produced them.

    The historical reality is that in developed countries big explosions tend not to come out of nowhere. They usually rest on a period in which the class has grown in strength, organisation and politcal consciousness.

    This is even true of the Russian revolution. 1917 would not have been possible without the organisations and traditions built up in the class in the period 1905-14.

    The reality of today is that the class has been rolled back for more than a generation. There is a whole generation that has no experience of strikes or even active unions. In most work places where tunions even exist they are pretty dormant, the activist base is pretty old, and a large part of it is heading for retirement. In the past membership and participation in class organsiaons these did necessarily make workers fully “class conscious” but it meant they had contradictory ideas.

    People still have contradictory ideas, but they are more heavily weighed towards ruling class ideas. A whole new generation has no experience of involvement in class based organisations, whether a union, the Labour party, or any socialist organisation.

    A large part of the working class has been atomised, the ideas of the ruling class, even if the more socially liberal section, are overwhelmingly dominant.

    The left needs to be mush more honest with itself about where people are really at rather than just bigging up constantly where people agree with us, and ignoring all the evidence that actually most people are still along way from us and that we are still quite isolated and that there are whole sections of the class where we have no presence.

    Shifting the scales back is going to mean a long and patient struggle to put socialist and class conscious ideas back into political discourse. That is going to take a bigger and more rooted force than the small and scattered groups of the left at present represent.

    There is great alienation in society, this can turn to anger (though not necessarily). The fissile material is there.

    There are still enough people around to build something new and bigger, but that number is shrinking. This window of opportunity will not stay open forever. The class-based left in the US went down, we don’t want to join them.

    The left has “sheltered” for a long time under the branches of the great old oak of social democracy, a certain, if distorted form of class consciousness. It protected us against the full force of ruling class hegemony, and stopped us from being blown away in storms. But its shadow also stunted us and kept us small.

    That great oak is now dead inside and is starting to topple over. Is the left to grow now as a vigorous sapling to fill the gap, or is it just a weed?

    Like

  2. The article has many useful facts and figures from official statistics
    But the author strains very hard to even use the word “Recession”.
    The term is only mentioned in the phrase “the worst of the recession does appear to be at an end”.
    So I suspect it’s largely an attempt to justify PR’s failure to predict it in the first place!
    Not only does appearance often fail to coincide with reality, but wishful thinking is often confused with fact.
    The major capitalist governments certainly must be praying that this is true.
    Quite why it should matter that there isn’t a “solid consensus among bourgeois economists” is a puzzle.
    The bourgeois consensus prior to the Credit Crunch was totally flawed.
    Any Marxists who got it right are dismissed with ” if you say it for long enough you will eventually be right.”
    Given the vast amounts of money used to support the banks, it would be very suprising if there’d been no effect at all.
    The scale of government intervention shows how serious the situation had become.
    Without coordinated international action, the social crisis would undoubtedly have taken much more explosive forms.
    This has to be taken into account when examining what’s happened since.
    But “Quantitative Easing” is an experiment with a very uncertain outcome.
    Spontaneity is never sufficient, but what’s been noteable in 2009 has been the return of the wildcat unofficial strike and factor occupation.
    This shows a shift in working class consciousness that challenges the restrictive framework imposed on the unions in recent years.

    Like

  3. The impact of the recession is still ahead!

    Like

  4. Prianikoff might not have noticed but the article was not about the recession but about working class resistance to it. You will find several articles in PR on the economy that recognise the sharpness of the world recession.

    Did we predict it? – no. If Marxists could predict booms and crises with precision we could all be very rich! It was surely easier for those like Chris Harman who thinks the world has been in continuous stagnation and crisis since the early seventies.

    But what has happened to all the confident predictions of a 1929 type crash and the return of the 1930s depression era? Its gone all quiet on that front, but maybe Duncan will uphold that prediction for us. If he just means the lagging indicators like unemployment and wage cutting will continue and get worse in the next year or so, that is the case.

    Unless of course the working class can organise a fight-back, which is what the full article is trying to assess. Cassandra really picked the right pen name. He ignores the very real developments, for example of the construction workers at Lyndsey who organised widespread, rank and action, against the law and without material aid of their own TUs – something that inspired Visteon and then Vestas. Small and defensive in terms of the scale of the attack, but struggles that can be learnt from and built on if the advanced militants can link together and support each others struggles.

    Like

  5. “The scale of government intervention shows how serious the situation had become.
    Without coordinated international action, the social crisis would undoubtedly have taken much more explosive forms.”

    Well yeah. But did you expect them to sit on their hands?

    Like

  6. What a banal caricature of Harman’s analysis from Stuart. Didn’t the pea-brained “economists” of PR predict a new period of growth and capitalist stability? Presumably because one of you read about Krondratieff waves on wikipedia and thought it sounded cool.

    Like

  7. ” what has happened to all the confident predictions of a 1929 type crash and the return of the 1930s depression era? Its gone all quiet on that front”

    I don’t know about 1929, but I’d suggest that there are strong signs from the US and British economic data that the recession is NOT over. Industrial production hasn’t recovered and there was no growth in the UK economy last quarter. i.e. we’re still in recession.

    Furthermore, I think more effort needs to be put into analysing QE and the strong possibility it could fail.

    ” ..did you expect them to sit on their hands?

    They were sitting on their hands during the Lehman Bros collapse. It was only when the scale of the financial meltdown became apparent that Bush & co were forced to adopt Brown’s approach. That pretty much signalled their demise.

    The fact that the Tories are standing on a PLATFORM of Public Sector Cuts and a Pay Freeze says a lot!

    i.e. What’s needed from the left is something a lot stronger than the wishy-washy Peoples Charter Approach. Union activists should be passing motions to amend it, or replace it with something that rejects its emphasis on low interest rates (redundant) a mixed economy and regulation.

    Like

  8. Suggest all you like, but certainly in the US, if you’re talking about growth meaning the end of the recession then its almost certainly over. The figures come out at the end of the month.
    In the second quarter there was growth in Germany, France, Japan, China, Brazil, Russia, Korea, Taiwan etc.
    Indeed in the third quarter world industrial production grew at an annualised 9% rate.
    The UK is more of a basket case, mainly owing to its dependence on the financial sector, which is still only just recovering. Until mergers and acquisitions get going in a serious way, then that will remain the case.
    The world recession itself only really lasted between November and February, by which time the Chinese reflation kicked in and dragged the emerging markets out of crisis.
    I visited Chile over the summer, their view was the recession was extremely mild. I spoke to a Brazilian trade union leader, she said there was no recession there at all.
    They were sitting on their hands before the Lehman Brothers approach. Afterwards they were anything but. The ability of the capitalists to intervene into their system is not some external factor, catastrophists always say “if they hadn’t done anything then it would have been much worse, collapsed, a disaster or whatever.”
    You’re a catastrophist aren’t you?
    If you don’t press the brake then you drive over the edge of the cliff. So you press the brake. They pressed the brake albeit a little too late, the front wheels slipped over, but the car was stopped in time.
    You say that throwing money at it was always going to have an effect. That certainly was not the view of the SP/Workers Power/SWP/AWL/Tickten/Weekly Worker etc. who as late as May confidently asserted it was the Great Depression with no recovery likely….ever. Or at least not for the next two years.
    The Tories and Labour have realised that that the unions are pathetic and have decided to make the workers pay for their bail out. That isn’t really an economic necessity inasmuch as debt/GDP is not that high about the same as Germany, the government has made £20bn on its RBS shares so far etc., but capitalists don’t like paying for things when they don’t have to, so as they don’t have to, they won’t.

    Like

  9. The Economist thinks there was a short recession in Brazil:
    two consecutive quarters of shrinkage (1% in the first three months of 2009 and 3.4% in the last three months of 2008), which had put Brazil into a technical recession. This relatively short recession was the first for Brazil since 2003.
    http://www.economist.com/displayStory.cfm?story_id=14442343#
    And I wonder if the explanation I’ve been given for Brazil’s relative success in avoiding serious recession – that the banks never tightened up on credit – means that there is still fraud in their system waiting to be exposed.

    I would have thought that the bank bailouts mean that the state is more indebted to the capitalist class over time,that the crisis is not catastrophic, but that the space for social democracy to provide benefits without challenging the power of capital has shrunk to nothingness. But it’s been too long since I studied economics for me to think I have the answers.

    The fact that the Tories are standing on a PLATFORM of Public Sector Cuts and a Pay Freeze says a lot!
    That they are the same as they were in the 80s?

    Like

  10. The explanation for Brazils success is simple. China. Through the summer of 2008 China was trying to administratively slow its economy, as it was growing too fast.
    The crash meant that there was a couple of months when export demand collapsed but government policy was behind the game. Hence the world recession of the winter of 2008.
    China rapidly went into expansion overdrive so that once its banks began to lend and the state began to invest then its demand for raw materials recovered, and Brazilian exports, alongside Latin American exports in general recovered too. The price of copper for example is back up to 2006 levels and has doubled this year.
    I’ve just been reading a Robert Brenner article from April 2009 which concludes;

    “With a plunging real economy exacerbating the unprecedented financial meltdown and vice versa, how could the governments’ new self-described Keynesian interventions, however titanic, hope to stem the tide? Where, when, and how it would all end was anybody’s guess.”

    Of course when he wrote that those interventions had already stemmed the tide. When would it end?
    We can now answer. It ended in June in the US. In March in Germany, France, China, Brazil, Japan, Russia, etc.
    The UK? Maybe a little later.

    Like

  11. Bill J: “You’re a catastrophist aren’t you?”

    By “Catastrophist” you mean someone who bases themselves on a timeless interpretation of Trotsky’s 1938 Transitional Programme.
    No, I’m not. But I could equally accuse you of being an empricist.

    The outcome of the Second World War meant that “systematic social reforms and the raising of the masses living standards” were possible.
    As it turned out, the rise of the USA as a global imperialist power was just beginning in 1945.
    Failing to recognize this led “catastrophists” of the Healy variety to issue barren ultimatist demands in the boom period of the 50’s and 60’s.
    This created “frenzied over confidence of the leadership based on false hopes that could never be realised”
    (Jim Higgins 1961)

    Capitalism has been able to use Keynesian policies to avoid recessions turning into a Depression ever since the ‘New Deal’.
    But that’s not all that’s prevented another 1929-style crash.
    There was the little matter of Rearmament, World War 2, the division of Europe during the Cold War, the Arms and Space Race, Computerisation, the Internet, the incorporation of large sections of the Russian, Eastern European and Chinese economies into global capitalist market etc…

    In other words, Capitalist crises don’t simply occur in an endless cycle of boom and slump.
    Each crisis alters the technological base of society and changes the political balance of forces.
    Each period of stabilisation creates the contradictions that lead to the next crisis on a bigger scale.
    If that view is “Catastrophist”, then I submit that Marx was also a catastrophist.

    Contrary to your view, I don’t believe that the Credit Crunch was just another short lived cyclical blip.
    It’s fundamentally changing the economic balance of forces to the detriment of the USA.
    The ability of the US government to spend its way out of the recession depends on the continued inflow of Chinese, Asian and Gulf money into the dollar.
    Of course these have an interest in stability, not just because they want to prop up the value of their dollar holdings, but because they need to US market for their exports.

    But there’s no evidence that the conditions for a sustained boom period have been created.
    I think the opposite is true. Any recovery will be a weak one, based on massive the transfusion of money from the fiscal stimulus package.
    This is virtual money, based on IOU’s stored in Computer memory.
    But capitalism requires real surplus value to survive.

    Timing is everything.
    Ironically, Healy’s 1962 Perspectives sound quite contemporary now:
    “We must base ourselves on the perspective that no matter which Party wins the election, British Monopoly Capital is being forced into a conflict with the working class which cannot be avoided.”

    Funnily enough, it’s now the smug empiricists who are beginning to sound like a clock that’s stopped.

    Like

  12. Well if by empiricist you mean I’m actually interested in empirical reality, then guilty.
    1962 was of course the middle of the long post war boom. if you think the 1960s were a period of “Great Depression” then might I suggest a few facts would be useful? Even empirical ones? Or maybe just try a little history?
    The assertion that this was a period akin to the Great Depression was based on the idea that China would collapse without US imports. That assertion was put to the test. The test showed it was wrong. Ergo the assertion was wrong. Ergo this is not the Great Depression.

    This chart, while empirical, I’ll concede (what chart isn’t?) will be grist to your mill;
    http://www.voxeu.org/index.php?q=node/3421

    you will enjoy the authors original gambit “World industrial production continues to track closely the 1930s fall, with no clear signs of ‘green shoots’.”

    Until that is you look a little closer at their measure of world industrial production. When you do you will find that it is based on 12 nations. Quite a big sample to be sure. But one that does not include…China.
    The biggest industrial producer in the world, which has seen industrial production increase by 11% over the last year.
    Now call me an empiricist if you like, but that’s plain cobblers then isn’t it?
    Damn facts. Empiricism. Crap.
    Tell you what seeing as facts are so painful. Lie down on the sofa. Shut your eyes. And dream.

    Like

  13. I agree largely- if unsurprisingly- with Bill. Though not quite sure about his Ellroy. Like. Prose. Which risks being. Ever so. Slightly. Annoying…

    Capitalism is a deeply unstable system that even in its healthiest boom times means misery for billions of workers and small farmers- hundreds of millions go hungry, billions face uncertainty, workers’ lives are ruined by snap decisions motivated purely by profit- to throw someone on to the scrap heap, to cut corners that lead to deaths or permanent industry. It is ugly. More than that it is not sustainable- it ruins the environment, creates wars and swings from boom to bust, dashing the hopes and lives of the workers like so many bits of torn rag.

    Socialism is about creating organisations of working class power to overthrow capitalism and consign it to the past. More often than not however many on the left have greeted every cyclical dip as the next great depression and of course when a real recession does hit many are ready to short circuit the long hard road of rebuilding working class confidence and networks of resistance in a euphoric cry of the end is nigh. This elevates every partial victory into a harbinger of an explosion of working class resistance. Then when defeats come the euphoria comes crashing down. This is no guide to action.

    Marxism should be more cautious and sober, taking into account reality including of course facts and statistics. Empiricism of course implies lack of theory- basing one’s practice on experience without using the light of reason. We need theory: but theory without facts is superstition or religion something we can do without.

    Much better is to learn from partial victories and seek to apply the concrete lessons of e.g. the Tower Hamlets strike or the Lindsey dispute or Visteon occupation. Indulging in make-believe is not enough.

    Learning the concrete lessons- importance of rank and file networks, mass meetings, direct action, keeping up and spreading the struggle, not relying on leaderships, but always keeping a watchful eye on them and exerting control from the bottom- may be enough to at least begin to connect some of the partial victories into a coherent if painstaking strategy to rebuild the workers’ movement and revive working class confidence that we can take power into our own hands.

    Like

  14. Fair point. Jason. I don’t. Know why. Ellroy did that. I used to enjoy. His. Novels. Be. For. E.

    Like

  15. Bill J
    “..if you think the 1960s were a period of “Great Depression” then might I suggest a few facts would be useful? ”

    This is why I despair over so many of the sectarian headbangers on the left. So many people are completely blinkered in their views that they’re incapable of listening and twist arguments into entirely their opposite!
    You actually deploy “the facts” far more selectively than I do. You don’t locate them in any Marxist theory of crisis and I’m not sure you believe a recession has even occurred!
    You make no criticism of the QE programme, or its future contradictions. You don’t even acknowledge the change in the economic balance of forces to the detriment of the US which is occurring now.
    You underestimate the possibilities of working class resistance and draw no programmatic conclusions whatsoever.

    Like

  16. Despair all you like.

    In March Peter Taaffe wrote “Most capitalist commentators now agree with our analysis that at the very least this is the worst economic crisis since the great depression of the 1930s and may yet exceed it.”

    In April Robert Brenner wrote “The crisis currently unfolding in the world economy is, without close comparison, the most devastating since the Great Depression, and could conceivably come to
    approach it in severity.”

    In May Richard Brenner wrote “The crisis is the predominant and determining factor in world politics. Approaching its second anniversary, it shows little sign of abating, and has moved on to embrace the entire globe. Already the greatest financial crisis in history, it has metamorphosed from paralysis of the banking system and capital markets into the most synchronised global recession yet seen so far uncontained – and in many respects aggravated – by the battery of policy responses the bourgeoisie has fired at it.”

    So Richard Brenner thinks that QE actually deepened the world recession. What a joke. Without the action of the financial authorities then the world economy would certainly have collapsed. As capitalists do not want the world economy to collapse they acted.

    That’s one of your what ifs? What if they hadn’t have acted you say, capitalism would have collapsed. More despair no doubt.

    Quantitative easing shifts the cost of the crisis onto the holders of US/UK debt. Who are they? Mainly Japan and China. Far from not acknowledging the shift in power to China that is the absolute basis of our opposition to you catastrophists.
    Your gang predicted that China and the world economy would collapse. You were wrong. Why not eat some humble pie for a change?

    I haven’t commented

    Like

  17. Sorry? I’ve never predicted the Chinese economy would collapse. I’ve never read a single article by Peter Taaffe on the recession and I don’t follow Richard Brenner’s articles either.
    This is the Brenner in Workers Power right?

    No I don’t think QE ” deepened the world recession” or China will collapse. I think it stopped a catastrophic depression – for the time being…..

    Basically, BillJ seems to be suffering from a case of mistaken identity, possibly brought on by not bothering to read what I’ve actually written.

    In fact, I’ve been amazingly accurate on the economic crisis over the past 5 years and in predicting the credit crunch for longer. Even though I say so myself.

    You really ought to pay more attention…..

    But just to throw a few genuine questions, as opposed
    to wild accusations back at you:-

    *Do you, or do you not think that QE will lead to inflation?

    *Do you think the US and British govts. will be able to control it?

    * Given their dependence on foreign depositors in the dollar (and sterling) can their policy of holding interest rates at 0.5% hold much longer?

    * Do you think there’s been a major recession or not?

    * Do you think there’s any basis for a sustained upturn?

    next I’ll post some clues to help.
    Stay tuned……

    Like

  18. NEW YORK (CNNMoney.com) Oct 8
    “Gold rallied to a an all-time high early Thursday as the dollar continues to deteriorate and investors remain concerned that a bout of inflation is on the horizon. ..Gold is also being supported by persistent concerns that government efforts to stimulate the economy will cause inflation to rise in the future.”

    (Bloomberg.com, Simone Meier) Oct 8
    “The U.S. unemployment rate will probably rise to 10.5 percent by the end of 2010 as the world’s largest economy struggles to recover from the worst recession in over six decades, Goldman Sachs Group Inc. said….Job losses accelerated last month and the unemployment rate climbed to 9.8 percent, the highest level since 1983….September’s losses bring total jobs lost since the recession began in December 2007 to 7.2 million, the biggest decline since the Great Depression.”

    Guardian.co.uk Oct 2
    “The official figures from the US department of labour were far worse than economists had forecast. Together with a drop in factory orders and a slump in sales for Detroit’s car manufacturers, they sent stockmarkets lower and sparked renewed talk of the possibility of a “double dip” recession. September was the 21st consecutive month of shrinkage for the US workforce. The number of job losses accelerated sharply from a revised tally of 201,000 during August, and the rate of unemployment ticked up from 9.7% to 9.8%. ..15.1 million people are looking for work.”

    By ANDREW TAYLOR (AP)

    The federal budget deficit tripled to a record $1.4 trillion for the 2009 fiscal year that ended last week, congressional analysts said Wednesday.
    The unprecedented flood of red ink flows from several factors, including a big drop in tax revenues due to the recession, $245 billion in emergency spending on the Wall Street bailout and the takeover of mortgage giants Fannie Mae and Freddie Mac. Then there is almost $200 billion in costs from President Barack Obama’s economic stimulus bill, as well as increases in programs such as unemployment benefits and food stamps. …The huge deficits have raised worries about the willingness of foreigners to keep purchasing Treasury debt. The administration promises that once the recession is over and the financial system is stabilized, it will move forcefully to get the deficits under control.
    Economists worry that the deficits could place upward pressure on interest rates in future years as the government has to offer higher rates to attract investors…
    The previous record deficit was $459 billion and was set just last year….the 2009 deficit reached almost 10 percent of gross domestic product, a level not witnessed since World War II.
    The White House says it wants deficits in the next few years to stabilize at or below 3 percent of GDP. But by the White House’s own estimates released in August — which predicted deficits averaging about 4 percent through the rest of the decade — it would take several hundreds of billions of dollars in new taxes or spending curbs to just get the deficit down to 3 percent of GDP.

    Eurostat, the Statistical Office of the European Communities

    Euro area 1 (EA16) GDP fell by 0.2% and EU27 1 GDP by 0.3% during the second quarter of 2009, compared with the previous quarter, according to second estimates from . In the first quarter of 2009, growth rates were -2.5% in the euro area and -2.4% in the EU27 .
    In comparison with the same quarter of the previous year, seasonally adjusted GDP declined in the second quarter of 2009 by 4.8% in the euro area and by 4.9% in the EU27 , after -4.9% and -4.8% respectively in the previous quarter……
    Among the main partners of the EU , GDP decreased by 0.2% in the US in the second quarter of 2009 (-1.6% in the previous quarter). In Japan GDP increased by 0.6% in the second quarter of 2009 (-3.3% in the previous quarter).
    Compared with the second quarter of 2008, GDP declined by 3.8% in the US (-3.3% in the previous quarter) and decreased by 7.2% in Japan (-8.4% in the previous quarter).

    Nouriel Roubini forbes.com Oct 8

    “Unlike 1997 or 2001, Asia cannot employ an export-led strategy to drive the economic recovery. As consumers in the advanced economies de-leverage over the next few years and foreign direct investment (FDI) recovers slowly, attaining the pre-crisis GDP growth rates in Asian countries will largely depend on the governments’ ability to rebalance growth towards domestic demand and accelerate structural reforms. Government and private consumption and investment should be moved away from the export sectors. “

    Like

  19. Now for an article on the social effects of the recession in the USA.
    I don’t endorse the political line of the world socialist web site.
    But they do often have some very useful articles.
    This being one of them.

    http://wsws.org/articles/2009/oct2009/lead-o08.shtml

    Like

  20. Where did you predict it? Excuse me for not taking the blogosphere too seriously. Show me your articles.

    Yes there is a recession.
    “It stopped a catastrophic depression…for the time being.”
    Typical. Disaster is always round the corner. Do us all a favour. When will there be a catastrophic depression? And name the date or I’m not interested (I’ll allow you 12 months each way).
    QE may not lead to inflation. Increasing the money supply does not necessarily lead to inflation if the rate of circulation falls as it has done. They will have to unravel it as the economy recovers. Will they be able to control it? Don’t know.
    Is there a basis for a sustained upturn? Yes. Rates of return remain at very high levels, indeed higher than at the trough of any recession since the 1960s. The stock market recovery is the fastest on record. China has already pulled Asia, Africa and Latin America out of recession. Can it keep that up? Don’t see why not for several years at least.
    Will there be a recovery in the US/Euro/Japan? Yes, there already is, remains to be seen how strong though.
    Most likely over the next year there will be strong growth based on a sharp inventory correction. That is the general pattern in the year after deep crises – deep in the USA/Japan and Eurozone at least.
    What will happen after that? Can’t say with any certainty, but it really depends on whether unemployment starts falling in the major metropolitan centres.

    Like

  21. I’d have to dig up various union newsletter dating back to 1998, posts on the internet and so on. Sorry, I’m not going to spend my time on an that! So just take my word for it and pay attention from now on.

    I’m predicting there WON’T be any sustained recovery.

    The bosses will need to conduct a big assault on the living standards of workers in the advanced capitalist countries if they are to restore profitability.

    On the basis of QE, a weak recovery will give way to rapid inflation.

    This will also become a means to destroy working class living standards if the unions don’t fight back.

    That means an upsurge in union militancy will be the first result. Soon.

    In turn it will lead to a split in the Labour Party based on the Unions.

    The left needs to be in that split with an Action Programme. Something MUCH better than the Peoples Charter.

    Tonight’s Radio 4 programme on the RMT was an instructive listen on this score. (unfortunately not on Listen Again)

    Simon Cox of the Beeb was inciting the bosses to take on the RMT

    The gist being that Bob Crow and the union were TOO successful at defending members conditions and increasing their pay!!

    The union was “a bit like something out of ‘Life on Mars’” and “dominated by a hard radical elements such as Socialist Action” ( err, what???)

    Boris Johnson and the Tories are now discussing plans to curb the RMT with “No strike” legislation.
    But as Bob Crow retorted, “What will they do if all the members walk out, put them in Wembley stadium?”
    (Don’t give them ideas!)

    Most interesting bit was at the end when the RMT sponsored MP John McDonell discussed the TU coordinating group set up by RMT. Including FBU, Lorry Drivers, FBU, POA, PCS. Set to grow to 12 unions and in discussions around a new “Son of No2EU” type party.

    VERY significant that a Labour MP is discussing this development favourably!!!

    Like

  22. So when will there be a catastrophic depression then?

    Like

  23. “The hardcore union bosses ‘fear’

    MP3, 28 mins, 13 Mb
    download podcast from here :-

    http://www.bbc.co.uk/podcasts/series/r4report/

    Like

  24. Interesting. But why not answer the question?

    Like

  25. Even the IMF recognised that the current recession is the worst since 1930’s.
    But it could take the form of prolonged stagnation.

    The last Quarter’s figures from the US won’t prove it’s over one way or another.
    The time-scale isn’t statistically significant.
    UK figures are due out on Oct 23rd, but are likely to show that the economy is stagnant.

    US property prices have yet to bottom out.
    Prices in the UK are forecast to go down by up to 30%.
    With more people driven into negative equity, further banking failures are likely.
    So a double dip recession is quite possible.

    All I’ve said in my exchanges with you so far is that:-

    “There are clearly strict limits to the efficacy of Keynesian policies.
    In fact, I find it hard to believe that capitalism will be able to expand again without a massive assault on working class living standards.”

    Whereas you were arguing not so long ago that:-
    “at present, the crisis, is in large part raising workers living standards.”

    I don’t think so. Unemployment at around 10%, cuts in public spending, pay-freezes and attacks on pensions will characterise next period.
    The working class response to this, of course, depends on its leadership.

    Like

  26. So you won’t answer the question. Why make the catastrophic prognosis then?
    What a farce. If you can’t say when your catastrophic depression will be then it has no predictive or other relevance, apart from satisfying your own millenarianism.
    And just on the details as usual you’re wrong.
    The IMF have been busy upgrading their estimates for growth. Not that that means anything given their pathetic record of predictions.
    US and UK house prices have bottomed.
    There are more banking failures, but only tiddlers.
    The financial markets are back to normal.
    Its simply true that deflation and reflationary tax cuts have meant that most, although not all workers i.e. the unemployed are better off. The public sector cuts and pay freezes have not yet occurred.
    And the working class response does not mainly depend on its leadership. A nation and the working class has the leadership it deserves.
    Anyway if you won’t bother to answer the question I won’t bother continuing this waste of time.

    Like

  27. Laters Bill.
    As you’ve escalated from calling me a “catastrophist” to a “millenarian”, I agree it’s a waste of time going any further.
    Check you out in 6 months time……

    Like

  28. Recently Anthony Hilton wrote in the Evening Standard ‘ A union revival waiting in the wings?’ He writes that it is difficult to see how the Royal Mail strikers can win but goes on to make the point that it would be a mistake to think there will not be any militancy elsewhere. He cites a few reasons, one of which is that most of the anti-union legislation passed by Thatcher has been unwound by the current Labour government and the European legislation.
    Militancy may or may not happen but what can be said is that we are living in a much more individuated society. The sense of class has been undermined over the last 20 or so years. Employers and HR professional have taken over the job of engaging with the workforce and needless to say that engagement is a direct one to one engagement.
    Hence we have seen more individual responses to the economic crisis. Some people have resorted to working on their CVs, yet others are up-skilling.
    Is individual action smarter than collective action? If we do want to keep our jobs, can unions help or is it better to recession proof ourselves by up-skilling. These are some of the questions that will be debated by Michael Skapinker, Professor Lorna Unwin, Dr Glynn Williams and Paul Thomas from the PCS Union at the Work Strand at the Battle of Ideas (www.battleofideas.org.uk) on November 1st at the Royal College of Art, London SW7.

    Like

  29. BBC Friday, 23 October 2009

    “The UK economy unexpectedly contracted by 0.4% between July and September, according to official figures, meaning the country is still in recession.”

    Like

  30. And?

    China grew by 8.9% in the year to the autumn and “China May Add 11 Million Jobs as Recovery Gains Pace .”

    http://www.bloomberg.com/apps/news?pid=20601089&sid=ao8tgR4_OlOI

    Like

  31. “Check you out in 6 months time……”
    Anything else is a concession to bourgeois empiricism.

    Like

  32. Can’t wait. But as Trotsky pointed out references to dialectics aren’t an excuse for not doing research.

    Like

Leave a reply to The Bunk Cancel reply

Trending