Tuesday 14 October 2008

Economic Crisis - what does it mean for us?

It's hard to keep pace with the development of the current economic crisis, and the numbers are so large they are mind-boggling. There's a real danger of the labour movement not responding adequately to the scale of the changes that are taking place. This is not the time to be stuck in a rut.

The old saying that "there's no crisis so bad that the bosses can't get out of - if we're prepared to pay" should stand as a stark warning to us all.

We're already seeing recession in many countries, jobs being lost, house repossessions on the rise etc. How will governments raise the billions being pumped in to prop up the casinos? Will they get away with forcing through tax rises and service cuts?

Will employers get away with increasing their share of wealth by holding pay rises below inflation?

Can we press the government to reduce dependence on increasingly vulnerable pension funds (many of which held shares in the banks) which gamble on the stock market by a boost to the state pension on a similar scale to the support for banks?

Ideology and Resistance
For some decades the ideology of the free market (neo-liberalism) has been used as a barrier to workers fighting to improve or defend their standard of living. The arguments came in a variety of forms:

  • The money isn't there
  • Governments are helpless in the face of the markets
  • Any interference in the market would only make things worse
All these arguments now stand threadbare. The money is there - on a scale that we in the labour movement never dared ask for. Governments can and have intervened in the market.

The stark truth is that governments chose not to intervene when jobs, livelihoods, homes and whole industries were under threat. Because many in the labour movement accepted the neoliberal arguments to a greater or lesser extent, we were disarmed. We didn't believe we could fight and win the things we needed. It's high time this changed.

There is no escaping the political dimension to the current crisis.

With the government now owning most banking activities in the UK, will they press on with repossessions? How can it be right to make someone homeless for failing to service their mortgage, while bailing out the billionaires? As other industries suffer from the recession, how can the government justify non-intervention? We're not just talking about a few small companies on the ropes here - for example GM, Ford and Chrysler are reportedly talking about mergers and wholesale job cuts.

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