SELLING the New Worker in Lewisham last week all the regular readers and sellers of other lefty papers were walking several inches above the pavement with beaming smiles. History was happening; capitalism was dying; after decades of unrewarding campaigning, battling to raise class consciousness against the dead weight of inertia, a real point of dialectical change was there.
Capitalism was eating itself, without any help from us, dying of internal contradictions. We could dust off our dreams of a real change; hopes were raised – even though we knew the capitalists would probably find a way out and for certain they would do their best to make us pay.
We knew there was pain ahead but there was one important change that will endure a bit longer – the myth of the free market had exploded; bankers and speculators had become the least popular people on the planet.
It was a breakthrough in popular perception but it was not a revolution. Gordon Brown has nationalised some big banks and other capitalist leaders around the globe have followed suit and the panic in the stock markets seems to have eased. It is not a measure the capitalists wanted to take; they fear democratic control and being made accountable to the people they exploit day-in and day-out. But it was a concession they had to make to survive – they had to make the taxpayers, mostly the working class, foot the truly huge bill for their disaster.
They are hoping this is a temporary measure and that in a few years the banks will be restored to the private sector and things will go back to the way they were before the crash.
But the real pain is still to come: the job losses, falling consumer spending, cuts in public spending, cuts in welfare, deferred house building and so on.
The Prime Minister has had to borrow hundreds of billions to bail out the banks and that will have to be repaid. Keynesian techniques of government borrowing help in the short-term, they get a country out of a crisis and get people back to work and things ticking over again. But the debts have to be paid – with interest. Every time a government borrows and thereby puts more money in circulation, the value of money decreases; there is inflation.
Eventually once again a point is reached where a new crisis of overproduction arises and the government has to borrow again. It has to borrow to service old debts. It becomes an expanding cycle as the real debt gets bigger with every turn. In the end there is again a collapse of credit.
The collapse we have just witnessed would have happened about a decade ago if Brown, then as Chancellor, and others like him in other capitalist powers, had not urged consumer deficit spending. Ordinary citizens were pushed into taking on as much personal debts – mortgages, credit cards and so on – as they could bear, and more. This was a form of micro Keynesianism with consumers, rather than the government, taking on the strain of debt with interest payments, the long-hours culture and personal misery associated.
Meanwhile bankers were trading in hedge funds, futures and other ephemera. They traded in debt, forgetting it was not real money but froth. The froth grew into giant mountains. But when the low paid workers could sustain no more debt and started to default, the bubbles burst and the froth collapsed. It had to happen sooner or later.
Now the bankers have come cap-in-hand to the taxpayers. Potentially the working class has some power in this situation but we are still living under a capitalist state machinery.
We must use the situation to push for a reversal of public utility privatisations, now that all can see how risky the private sector economy is. We must resist all attempts to re-privatise the banks, indeed we must call for them all to be nationalised.
So far a few bankers have lost their bonuses and their jobs. But they are still far richer than we will ever be. They must be taxed to the hilt. We must never allow them to regain the full wealth and power they have grown accustomed to. And we must never allow them to claim they know what they are doing with our economy. We must keep the political momentum swinging against them – and one day we really will have a revolutionary situation.