Lead article from Aurora 32 for the strikes and demonstration week ending October 18 2014

There’s no doubt workers need a pay rise. If the economic recovery meant change for the better, then the working class should at least be clawing back the losses of recent years. Pay deals are now supposedly above inflation, but in real terms most people’s earnings are falling. For public sector workers at the hard end of the government’s ‘deficit reduction’ programme this is no surprise. Overall public sector workers’ real pay has dropped by 15-20 per cent since 2010 and, like everyone else, this is as pensions are lowered whilst contributions are upped and people (like fire fighters) are being told they’ll just have to keep working for longer.

Already in July this year thousands joined a TUC sponsored day of action in London to protest against a 2 year pay freeze being followed by a derisory 1% pay ‘rise’. To add insult to injury, the government has since back-tracked on even the nominal 1% rise for many NHS workers, including some of the lowest paid. That makes for a lot of very angry people who are clearly not content with a Saturday march with their union banners in the streets of London, Glasgow or Belfast. In the week running up to the 18th October demo tens of thousands of workers in the public sector are set to show their anger and go on strike … on three different days. Council workers on 13th, a “day of industrial action” by civil servants (PCS) on 14th, followed by another “day of action” by thousands of NHS staff involving a four-hour walkout of workers from nine separate unions.

Why No All-Out Strike?

At once the strength and weakness of the modern union machine is apparent. On the one hand the professional organisers (salaries paid out of membership dues) have been able to impress on shop stewards and militant workers that ‘action days’ culminating in a national demo are the way towards regaining a better life. Angry and increasingly desperate workers who want to do more than pay their union dues by direct debit are engaged in these campaigns. Yet, we have not had even one all-out strike. We have to ask: Where is this sort of activity leading? What is the TUC’s strategy? Is it adequate or appropriate for the situation facing the working class?

On the evidence of the last four years ---– since Osborne first wielded his axe in October 2010 – the answer to the first question is that the TUC’s action days have led workers round in circles to no effect. Osborne originally announced that up to 500,000 public sector jobs were due to be cut by 2014-15. According to a study commissioned by the GMB union last year 631,000 public sector jobs had already been lost by the end of March 2013. Not only have the unions completely failed to halt the programme of job cuts, the government is now even more confident it can face down the occasional TUC day of action and has speeded up the cuts programme. According to the same GMB report the Office for Budget Responsibility is now aiming to have cut a further 400,000 jobs by the general election, some time in 2015.

As for the relentless attacks on social services and welfare rights over the past four years, it is now very clear that the aim of the game is to dismantle what’s left of the universal welfare system that was put in place after World War Two. Countless campaigns and local struggles have proved unable to stem the multi-pronged attack. It has brought widespread harassment and anxiety, misery and impoverishment, as well as premature and unnecessary deaths to a widening range of vulnerable people. Given the closures, cutbacks and job losses that hospitals and ambulance services are already enduring, nobody can seriously believe Labour or Tory assurances that the NHS is ‘ring-fenced’ from all this.

The Real Threat

This brings us to the wider situation which we have to face up to. This is not really about the budget deficit; it’s about the growing threat capitalism’s profitability crisis poses to working class chances of a civilised existence. As a matter of fact, in the 1950s UK national debt was a much higher percentage of GDP than it is today. The key difference between then and now is that the overall rate of profit was much higher and with it the rate of GDP growth. So gradually the debt to GDP ratio fell even as government borrowing went up and it was easy for the state to finance its interest payments. All that changed with the onset of capitalism’s world crisis way back in the 1970s. In the face of at least 17% inflation it was Labour Prime Minister, James Callaghan, who famously admitted:

We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists…

The bankrupt Labour government was obliged to beg for a loan from the IMF which in turn demanded government spending cuts and a reduction of the budget deficit. Unemployment rocketed. Keynesianism was out of the window. In came ‘Thatcherism’ and ‘Reaganism’ dedicated to cutting state spending and opening up national economies to monopoly capital under the banner of the ‘free market’. At the same time the industrial working class was devastated as industries were privatised. New technology replaced tens of thousands of workers and globalisation accelerated as capital moved to areas with cheaper labour power to boost falling profit rates. Decades on and several financial bubbles later, capitalism is still grappling with the same crisis only now its options have narrowed and the situation is much more dangerous. The world financial crash of 2007/8 was a game changer. It exposed the extent to which capitalism was relying on paper profits accruing from financial speculation. Central banks were forced to take on the financial sector’s losses, buying up worthless assets under ‘quantitative easing’ programmes in order to maintain confidence in otherwise totally devalued currencies. But even though central banks and monetary authorities have tried to sweep the debt under the carpet the threat of another crash remains, or rather is growing. In September a report for the International Centre for Monetary and Banking Studies observes “Contrary to widely held beliefs, the world has not yet begun to delever [reduce debt] and the global debt to GDP ratio is still growing, breaking new highs.” In other words, it’s only a matter of time before the next global financial crash.

Meanwhile, the merciless competition to drive down wages and the general cost of labour power continues. Far from clawing back something of what we have lost, the present ‘recovery’ is based on the growth of low paid, insecure, increasingly part-time jobs often based on zero hour contracts. Unemployment is still well over 6 per cent of the workforce while this year “Britons’ wages have fallen in cash terms for the first time since 2009…” [Financial Times 13.8.14]

Capitalism’s Obscene Crisis

This is not only about workers in Britain. Ever since the crisis began in the 1970s workers in all the supposedly advanced states have been receiving a smaller and smaller share of the national pie as the prospect of finding a job and wages and conditions of work steadily deteriorate. Capitalism is losing its civilised veneer as the consequences of growing inequality impact on society. At one end we see 3.8 million children living in extreme poverty, a growing number of food banks, the resurgence of Victorian diseases stemming from malnutrition, including rickets, TB and scarlet fever. On the other we read that the rich continue to get richer. There is now a record number of 2,325 billionaires in the world with combined wealth of $7.3 trillion. This is 4.5 times the combined income of the 3.5 billion people who make up the poorest half of the world’s population! [Report by UBS 18.9.14] Meanwhile – as a sign of the depth of capitalism’s profitability crisis -– more and more non-financial companies are holding on to their cash. This year the top thousand of them are sitting on $3.5 trillion because it is “unattractive to invest”. There are a few crumbs of comfort for some capitalist firms. Rising income inequality is proving a boost for those who can get in on the global luxury goods market. A Deloitte business survey “considers the more promising markets to include Colombia, Mexico, Philippines, and much of sub-Saharan Africa – where Ermenegildo Zegna, Hugo Boss, and MAC have been at the vanguard of opening stores.” [Financial Times survey on The Business of Luxury, 12.5.14] These are not isolated examples. They indicate the degenerate state of world capitalism today. As the UN appeals for $1bn to contain the Ebola outbreak in West Africa, trillions of dollars are being hoarded by companies whilst others are more concerned about the threat to their luxury markets in places where most people are so poor that a deadly epidemic could be contained by simple measures such as buckets of bleach.

Once we see the wider context of our struggles it is obvious that we are facing much more than a cost-cutting government unfairly targeting the working class. Unfairness is intrinsic to capitalism. There is nothing more unfair than the profit capitalists make by selling the product of workers’ labour. The trade unions and Labour would have us believe that capitalism can be made to work in the interests of everybody. The fundamental absurdity of this was not so apparent during the boom years which followed the war. The rate of profit was high enough to allow a steady increase in workers’ direct wages as well as the indirect reward of a health and social welfare system. Today, despite the electronic and digital revolution, new technology has not offset the fall in the rate of profit and capitalism – -when it is investing in production at all – is resorting more and more to driving down wages to try and improve profitability. After decades of worsening crisis the capitalists’ room for manoeuvre has narrowed and they cannot afford to let up on their war against the working class. There is no longer any room for the illusion that our interests are best served by the union rep negotiating a deal behind closed doors. Instead we have to recognise that

Our Unity is Our Strength

The unions of course would say that they are the means for workers to unify. But when it comes to the workplace workers are divided up by various union allegiances, not to mention that many workers are not in unions at all. Any serious struggle must start from encouraging the participation of everyone in the whole workplace. But this is just the beginning. The aim must be to extend the struggle as widely as possible: beyond any single workplace, beyond industry and category boundaries, where possible to include local communities and with the perspective that each local struggle is part of a wider international struggle against the world capitalist class. At every step the key must be to hold regular mass assemblies run on the basis of direct democracy –-- i.e. where delegates have to explain their actions and if need be can be immediately recalled by the meeting as a whole. This perspective alone would ensure that even when workers are obliged to retreat in the immediate battle there are valuable lessons learned about how to fight next time. Beyond, this it is not our task to lay down a blueprint for how the working class must fight. What is essential however, once the working class struggle really gets going, is for an international political organisation of the working class with a programme which articulates the lessons from a long history of working class struggles and points the way towards our ultimate goal: A world that is rid of capitalism, wage slavery and wars and instead is based on the free association of the people who do the work, where “the free development of each is the condition for the free development of all”. This is the real meaning of communism. It is a far more realistic goal than the utopian idea that rotten monopoly-finance capitalism can be directed to meet the needs of the world’s working class.