When the International Monetary Fund (IMF) – the international body that promotes privatisation, public spending cuts and reduced governance across the globe – says that it’s time for the British government to re-think its austerity measures, then it really is time to worry.
Olivier Blanchard, the IMF’s chief economist, stated that “if things look bad at the beginning of 2013, which they do, there should be a reassessment of fiscal policy”. His advice echoes the organisation’s recent findings that the impact of spending cuts on UK economic growth was two-to-three times greater than first imagined. (See ‘Time for Plan B?’ by Ben Chu, Independent, 24 January 2013)
Blanchard’s comments came just days before the Office of National Statistics confirmed that the UK economy contracted by 0.3 percent in the last three months of 2012 – and is likely to enter an unprecedented ‘triple-dip recession’ in the coming months. While the previous quarter offered the government respite, with misleading growth figures due to Olympic spending, these statistics are a sobering reflection of the failed policy of austerity. The manufacturing, mining and quarrying sector, for example, fell by 10.8 percent, the greatest decline since records began, while the services sector, so vital to the UK economy, due not least to the steady decimation of manufacturing, stagnated. (See ‘UK economy shrank at end of 2012’ BBC News Online, 25 January 2013)
In response to these comments, George Osborne shrugged that he and his government have “the right deficit-reduction plan”. The Chancellor, speaking after the World Economic Forum in Davos, explained that he believed Britain’s “credibility” would be at risk if policy direction was now altered: “Credibility is very hard won and easily lost,” he said, “and I think it would be a huge mistake to put that at risk”. (‘George Osborne ignores IMF’s warnings on austerity plans’ by Heather Stewart, Guardian, 25 January 2013)
However, it would be too simple to interpret the government’s stubborn commitment to austerity as short-sighted, poor economics. Osborne, one of many millionaire cabinet members, is pressing ahead with vicious spending cuts and sweeping privatisation measures in a deliberate, considered attempt to pass the burden of the capitalist economic crisis onto the backs of the poor – and his government faces little credible opposition to this strategy.
Speaking at the end of last year, as the government prepared to announce it would be capping annual rises in benefits to one percent – effectively cutting benefits year-on-year for millions of society’s most vulnerable people, since official inflation currently stands at nearly 3 percent, while rises in prices of energy, food and transport (which account for a disproportionate percentage of the budgets of the poor) have been far higher – the Chancellor took pleasure in contrasting the “striver” with the “shirker”, the “shift-worker” with the “scrounger”, the person that rises early in the morning to work tirelessly for their family with the unemployed neighbour whose blinds are always closed. (See ‘Caps on benefits … will worsen poverty, say critics’ by Randeep Ramesh, Guardian, 5 December 2012)
Such sensationalism evokes the cruel Victorian distinction of ‘deserving’ and ‘undeserving’ poor, and reveals how our rulers rely on encouraging prejudice in order to divide workers and persuade them to accept the ‘inevitability’ of these measures.
The state’s divisive rhetoric regarding those it wishes to brand as “feckless” and “irresponsible” is today being used as a battering ram against our hard-earned rights and welfare provision. Any honest observation would show that deindustrialisation, neo-liberal reform and a weakened trade-union movement have only exacerbated the innate inability of capitalism to provide full employment – and, hence, the need for a comprehensive welfare system to ameliorate its worst effects.
Under a barrage of propaganda, however, fear and scapegoating has replaced reason and inevitably introduced panic amongst British workers, many of whom, in a most unfortunate act of self-sabotage, have been persuaded by such insidious ‘divide-and-rule’ arguments to support widespread welfare ‘reform’ – usually a code-word for slashing benefits and public services. (See ‘Editorial: Rich and poor: deserving and undeserving’, Guardian, 27 January 2013)
Whilst trade unions and so-called left-wing organisations have rightly criticised the ConDem government’s commitment to austerity, much of this has been ineffectual and contradictory, as they continue to promote the Labour party as a serious (don’t laugh) alternative – even as Labour councils implement cuts with zero resistance. Moreover, Ed Balls, Shadow Chancellor, has publicly declared that he “can make no commitment now to reverse any of those cuts or the tax rises”. (BBC Breakfast News, 1 October 2012)
The champions of social democracy, which in Britain constitutes the Labour party and the various opportunist left groups that promote it, are quite happy to build their careers by criticising ‘Tory cuts’, but are completely unable and unwilling to explain to British workers the real cause of capitalist crises – as it would expose their complicity in maintaining this system of exploitation.
Their role, as history has shown, is to go amongst the workers, absorb their anger, and then deliberately misdirect it into, at best, reformism and meaningless banner-waving and marching. Every labour dispute, every workers’, students’ or unemployed people’s movement that emerges during the recession that aligns itself with social democracy is bound to become embroiled in this charade and diverted away from genuine, revolutionary class struggle.
In striking contrast, it is the duty of any principled communist to introduce a Marxist analysis to workers. Whilst the majority of people, particularly the young, can now see that Labour is not a party that represents the interests of the working class, we must go further and shatter the illusion of it being a ‘lesser of two evils’. The Tories, of course, personify British elitism, but it is the Labour party that has suffocated all meaningful attempts to organise against and ultimately replace capitalism.
The ongoing crisis, which has seen our standard of living plummet and tossed an entire generation of young people onto the rubbish tip, is the result of capitalist overproduction; the fundamental flaw in capitalist economics that compels bosses to reduce workers’ wages and lay them off in order to increase profits, even as they churn out increasing numbers of goods that the impoverished masses cannot afford to buy.
However, capitalism will not vanish by economic crisis alone but from the conquest of political power by the working class. Our first step towards achieving this is to expose the bankruptcy of social democracy and introduce Marxism Leninism – scientific socialism that has produced proletarian revolutions across the world – into the working-class movement.