Workers Hammer No. 205
"Neo-liberal" and Keynesian policies—two ends of the same stick
New Labour fleeces working people
For a revolutionary workers party!
The financial meltdown in Wall Street and the worldwide capitalist recession is having tremendous impact on the British economy, inflicting severe hardship on the lives of working people. Gordon Brown’s Labour government semi-nationalised Britain’s commercial banking system in October and brokered the takeover of HBOS (the country’s largest mortgage lender) by Lloyds TSB. Brown’s bailout of the banking system was widely acclaimed in Washington and in the rest of Europe. Both in the US and in Britain, colossal government bailouts of financial institutions have become the order of the day, as US president-elect Obama embraced the Bush administration’s plan to transfer $700 billion of taxpayers’ money to banks and other financial institutions.
However, despite the US and other central banks having provided hundreds of billions of dollars in short-term loans to large banks — and pledged hundreds of billions more — the pinnacles of finance capital continue to totter. The US government came to the rescue of Citibank, guaranteeing $306 billion of risky assets and injecting $20 billion of capital into one of the world’s largest commercial banks. And so far these government handouts have done little to unfreeze the credit markets. Banks are still refusing to lend money, which means further government handouts at the expense of the taxpayer will be likely to follow.
Also tottering are some of the cherished orthodoxies of the Blair-Bush era, and indeed of the Reagan-Thatcher years. As Joseph Stiglitz, an economist at Columbia University in New York has written: “We are all Keynesians now. Even the right in the United States has joined the Keynesian camp with unbridled enthusiasm and on a scale that at one time would have been truly unimaginable” (Guardian.co.uk, 5 December 2008). At one time it would have been equally unimaginable to hear New Labour leaders in Britain paying homage to John Maynard Keynes, the liberal bourgeois economist who advocated increased public spending and lower interest rates to lift the US out of the Great Depression of the 1930s. Yet Gordon Brown invoked the name of Keynes while visiting New York in November, and his chancellor Alistair Darling recently wrote that “It was John Maynard Keynes who said that ‘the difficulty lies not so much in developing new ideas as in escaping from the old ones’” (Financial Times, 10 October 2008).
At the most fundamental level, the condition of the financial markets is governed by the state of the class struggle between the working class and the capitalists. The working class in Britain today is atomised and weakened by de-industrialisation, itself the result of betrayals at the hands of the Labourite misleaders and defeats in struggle, of which the defeat of the heroic miners strike in 1984-85 was the pivotal event. Internationally, the working class is suffering from the effects of counterrevolution in the former USSR and Eastern Europe in 1991-92. This historic defeat for the working people of the world has resulted in a profound regression of political consciousness which, although uneven, means that workers no longer identify their struggles with the need for a socialist society.
The world economic crisis demonstrates the bankruptcy of capitalism. But for the capitalist ruling class, “there is no such thing as an absolutely hopeless situation” as Russian revolutionary leader VI Lenin explained during the revolutionary upheavals of 1920. The working class, in the course of struggles against the depredations of capitalism and through the intervention of a Leninist-Trotskyist party, must be won to the programme of Marxism which led to victory in the 1917 Bolshevik Revolution in Russia. Under the leadership of Lenin and Trotsky, the revolution showed the way out of the endless cycle of capitalist economic crises and imperialist wars when the Russian workers took power in their own hands, expropriating the bourgeoisie and establishing a workers state.
Boom-and-bust cycles are endemic to the capitalist system itself and cannot be prevented by government policies, Keynesian or otherwise. The key contradiction in capitalism was identified by Karl Marx and Friedrich Engels: under capitalism production is socialised, that is, concentrated and organised in vast corporations, but the means of production — and the appropriated, socially produced wealth — remain the private property of a few. In his 1916 study Imperialism, the Highest Stage of Capitalism, Lenin described how imperialism, the system of modern, decaying capitalism, “leads directly to the most comprehensive socialisation of production” under capitalism. Socialised production must be extended to socialised ownership through the producers taking control of society. We fight for international socialist revolution, for the collectivisation of the means of production and for economic planning on an international scale.
The working people need a party that fights for their class interests, a workers party committed to sweeping away the bankrupt capitalist system through socialist revolution. We fight for a multiethnic revolutionary workers party, part of a Leninist-Trotskyist international, dedicated to the task of fighting for socialist revolution to overthrow the capitalist order worldwide. Socialist revolution will lay the basis for rationally planned economies based on production for need, not for profit. This in turn will allow for development of the productive forces so that poverty, scarcity and want will be eliminated thus laying the basis for the creation of an egalitarian socialist society.
Break with Labour, old and new
In Britain, a revolutionary party can only be built through opposition to all varieties of Labourite reformism, which has served to tie the working class to the capitalist exploiters for over a century. Tony Blair’s abolition of Labour’s Clause IV in 1994 signalled his intention to remould the Labour Party from its original status as what Lenin termed a “bourgeois workers party”. Labour had a pro-capitalist leadership and programme while its base consisted of Britain’s industrial proletariat which at the beginning of the 20th century constituted the vast majority of the population.
In November Brown and Darling announced measures in the pre-budget report, which liberal Guardian columnist Seumas Milne described as “the first Keynesian-style expansion programme for more than 30 years” (Guardian, 4 December 2008). Labour’s budget centred on a massive public borrowing programme estimated at a cost of £118 billion, combined with £20 billion worth of tax cuts, including a temporary reduction in VAT and a token increase in income tax for those earning over £150,000 per annum, from 40 to 45 per cent.
Nonetheless sections of the bourgeois press reacted as if New Labour had reverted to old Labour overnight and indeed one could be forgiven for thinking that Gordon Brown had threatened to introduce “socialism” through parliament. The right-wing Daily Mail headlined “The day New Labour died” (25 November 2008) while the Times editorial the same day was an obituary for “new Labour’s tragic end” and described the increase in the top rate of tax as the “final nail in new Labour’s coffin”. An article by Philip Stephens in the Financial Times said: “We are watching a bonfire of the old orthodoxies”, ludicrously claiming that the Brown government “announced it would soak the rich” (Financial Times, 28 November 2008). Hardly. New Labour intends to make working-class people pay the lion’s share of the cost of this capitalist crisis. Moreover, it is not as though old Labour represented the interests of the working class. All old Labour governments loyally served the British capitalist class, carrying out attacks on the working class and enforcing capitalist austerity. The last Labour government broke strikes during the “Winter of Discontent” of 1978-79 as well as introducing racist anti-immigrant measures.
Brown’s new business secretary Lord Mandelson was quick to point out that reports of New Labour’s death are greatly exaggerated. “It is the times that have changed, not New Labour” (Guardian, 27 November 2008) said Mandelson, a key architect of New Labour which, he once declared, is “intensely relaxed about people getting filthy rich”. He described the new 45 per cent tax rate as “a purely practical measure” noting that there would have been “a public backlash if those who are so clearly better off and have gained so much in the last 10 years were not seen to be shouldering their fair share of the burden” (Guardian, 29 November 2008).
New Labour has certainly not adopted its present economic measures out of a desire to return to “old Labour”. Rather, as Darling and Brown insist, the government has been forced to take “exceptional measures for exceptional circumstances”. As in the US, the British government has been forced to ditch monetarism — the dominant economic doctrine of the bourgeois right since the ascendancy of Ronald Reagan and Margaret Thatcher in the 1980s. Advocates of monetarism maintained that economic crises could be minimised, if not eliminated, by adjusting the amount of money in the banking system along with interest rates. This today stands exposed as a myth. It is not only financial institutions, but also industrial giants such as GM and Chrysler in the US that are lined up for government bailouts. Capitalist governments are hardly likely to continue to abide by monetarism when that would mean allowing titans of capitalism to go under.
The Labour Party has gone some way towards becoming a bourgeois party, mainly by severing the party’s historic links to the trade unions. This process has been stalled however because of uncertainty about finding alternative sources of party funding. With the revival of the Tory party, Labour’s hefty donations from wealthy business figures are no longer assured and the party has once again become dependent on the unions for a large share of its funding. As we noted at a national conference of the Spartacist League/Britain held in the summer of 2008, the transformation of the Labour Party is an unfinished process and is thus reversible, although such a reversal would involve ousting both the Brown and Blairite cliques. This is an unlikely outcome and today’s Labour Party is moribund as a reformist party.
The Transitional Programme v Keynesianism
The reformist Socialist Workers Party (SWP) recently wrote that: “Socialists should welcome Keynesian policies only if they take power away from the rich and put it into the hands of the working class”, while complaining that Gordon Brown’s “vision of Keynesianism” is rather “to spend billions on replacing the Trident nuclear system, aircraft carriers, the Olympics and other such projects” (Socialist Worker, 1 November 2008). Lenin’s understanding is counterposed to such reformist pipe-dreams of a non-military imperialism based on “welfare, not warfare”. Lenin emphasised that militarism is essential to imperialism by its very nature: the monopolisation of production and the dominant role of finance capital impel the imperialist powers to divide the world as they strive to develop new markets and spheres of exploitation.
It is a myth that Keynesian economic policies based on pubic spending pulled the capitalist world out of the Great Depression. Keynes himself admitted that capitalist “democracy” can use its full productive capacity only when producing armaments for all-out war. As he said: “It is, it seems, politically impossible for a capitalistic democracy to organize expenditure on the scale necessary to make the grand experiment which would prove my case — except in war conditions” [our emphasis] (“The United States and the Keynes Plan”, New Republic, 29 July 1940). It was when the imperialist governments in Britain and the US mobilised their economies for World War II that they fully adopted Keynes’s programme of deficit spending for public works, those “public works” being battleships, bombers, tanks and finally A-bombs.
Any meaningful fight to defend jobs in the face of mass job losses on the scale we are witnessing today must be based on Trotsky’s 1938 Transitional Programme, the founding document of the Fourth International which asserted that: “Neither monetary inflation nor stabilization can serve as slogans for the proletariat because these are but two ends of the same stick.” It outlined a strategy for revolutionary leadership of the proletariat in the face of tremendous defeats, stating that: “Under the conditions of disintegrating capitalism, the masses continue to live the meagerized life of the oppressed, threatened now more than at any other time with the danger of being cast into the pit of pauperism. They must defend their mouthful of bread, if they cannot increase or better it.” It also asserted:
“The Fourth International declares uncompromising war on the politics of the capitalists which, to a considerable degree, like the politics of their agents, the reformists, aims to place the whole burden of militarism, the crisis, the disorganization of the monetary system and all other scourges stemming from capitalism’s death agony upon the backs of the toilers.”
— The death agony of capitalism and the tasks of the Fourth International, 1938
“Transitional” demands are often misused by reformists to cover their capitulation to the existing misleadership of the working class, but such demands lose all meaning outside of a programme for the conquest of state power by the proletariat. Demands such as a shorter working week with no loss in pay and a sliding scale of wages and hours are designed to show that the struggle against unemployment and rising prices must be linked to the overthrow of the capitalist order.
Reformists dream of return to old Labour
The response of the Labourite left to the crisis has centred on the call for reform of capitalism through “real” nationalisations. Socialist Worker (4 October 2008) wrote: “Nationalisation for the public good would involve nationalising to protect jobs and to stop repossessions. It would involve using the huge amounts of cash held in the banks to build affordable council homes.” Peter Taaffe’s Socialist Party demanded that Labour carry out “real” nationalisations, which they also refer to as “public ownership”. This demand is the maximum programme of the declaration for a “new mass workers party” posted on their website which says: “No to the capitalist profit system. For a democratic socialist society, based on public ownership of the major corporations that dominate the economy, and run to meet the needs of all, and to protect our environment for future generations, instead of the profits of a few” (Declaration for a new mass workers party).
Nationalised industry under capitalism and the myth of “public ownership” is the core of old Labour reformism. It was stated in Clause IV of the Labour Party’s constitution, which nominally committed the party to “common ownership of the means of production” and codified the myth that “socialism” could be achieved through legislation in parliament without smashing the capitalist state and without establishing the dictatorship of the proletariat. The adoption of Clause IV in 1918 was an attempt to deflect the radicalising impact of the 1917 Bolshevik Revolution. In practice, Clause IV was simply a fig-leaf for class collaboration and betrayal. In the context of British imperialism’s loss of hegemonic power, the nationalisations of coal, steel and other industries by the Clement Attlee Labour government were in reality giant capitalist bailouts designed to help British capitalism to compete in the world market. In that sense the post-WWII nationalisations under old Labour were no more “socialist” than the bailout of the banks being carried out today by New Labour (and for that matter by the Bush/Obama regimes in the US).
Trotsky made clear that on occasion it may be appropriate to call for partial nationalisations, for example of branches of industry that are vital, such as oil, or of a particularly parasitic section of the bourgeoisie. However Trotsky’s call for nationalisation is not in any sense a means of peddling illusions in parliamentary measures to improve capitalism. Rather it is meant to be used as a bridge to working-class power:
“Nationalization can signify as in England the mines, in France the military industries — a voluntary agreement between the owners and government. The owners became participants in the nationalized property, and many of them in France, for example, became richer than before, for they were saved from bankruptcy. That is why we can use, I believe, the alternatives in our agitation, the words expropriation and nationalization, but underline the word expropriation. We can say to the miner, you wish nationalization. Yes, it is our slogan. It is only the question of conditions. If the national property is too burdened with debts against former owners, your conditions can become worse than now.
Now you must organize your own government in the state and expropriate them.”
— “For a Workers’ and Farmers’ Government”, 1938
For the British working class, the burden of the present capitalist crisis is proportionally higher than elsewhere because Britain’s financial sector centred on the City of London vastly outstrips the rest of the economy. The combined assets of Britain’s main commercial banks amount to four times the size of the whole economy (GDP). This figure does not include the giant investment banks which dominate the City, of which New York’s five biggest — Bear Stearns, Merrill Lynch, Lehman Brothers, Goldman Sachs and Morgan Stanley — have now ceased to exist as investment banks. Britain’s working people are already impoverished and saddled with among the highest levels of debt in the world. When mortgages are included, the average debt per head amounts to 180 per cent of disposable income, “the highest proportion of any country in the G7 club of rich nations”, according to an Observer article (5 October 2008).
The gleaming skyscrapers such as Canary Wharf tower in the Docklands symbolise the boom years of the City of London as an opulent international centre for finance capital. Obscenely, according to TUC figures, bonuses paid out in the City for 2008 amount to £250 for every man, woman and child in the country (TUC press release, 17 October 2008). Canary Wharf happens to be in the borough of Tower Hamlets, a poor and heavily Bangladeshi area which ranks third from the bottom of 354 local authorities in England and Wales in terms of average deprivation. This is a borough where “eight-out-of-10 kids face poverty in the world’s 6th richest city” (East London Advertiser, 16 October 2008). The same “tale of two cities” picture of inequality is shown in a statement by Labour minister Alan Johnson that: “A man living in Kensington and Chelsea will on average live 10 years longer than a man living in Manchester. For every stop on the Jubilee line from Westminster to Canning Town, life expectancy goes down by one year” (Guardian, 9 June 2008). The headline of an article about Glasgow’s Calton area by Audrey Gillan also captures the poverty levels of the “boom” years: “In Iraq, life expectancy is 67. Minutes from Glasgow city centre, it’s 54” (Guardian.co.uk, 21 January 2006).
Across Britain, the rate of repossessions of homes is rising weekly while the toll of job losses is staggering. BT has announced 10,000 job losses; Rolls-Royce will cut 2000 jobs. All of Britain’s car manufacturing plants are cutting production as part of the global crisis: Nissan in Sunderland; Ford in Southampton and Land Rover at Halewood, while Honda in Swindon will suspend production for two months in 2009. TUC general secretary Brendan Barber noted: “The dole queue is now growing by 1,000 people a day” (Guardian, 13 November 2008).
To defend jobs and fight for the very existence of the multiethnic working class requires a fight against the politics of the pro-capitalist trade union bureaucracy — not least in the car industry where they have made “sweetheart” deals with the bosses. While making false promises about extracting concessions from the Labour government, the bureaucracy kept industrial peace while the bosses further decimated the industrial proletariat through job losses.
It is vitally necessary for the unions to fight against racism. Labour’s vaunted “flexible economy” is heavily dependent on immigrant workers, who work for pitiful wages and face a climate of racist hostility. The government’s “war on terror” has led to increased racism against Muslims, who are concentrated among the poorest section of the working class. Particularly in the context of recession, attacks on immigrant workers are increasing. The union Unite recently protested at the decision of subcontractors working at Staythorpe power station near Newark to employ only overseas workers on the job while refusing to hire any local workers. A demonstration outside the power station evoked Gordon Brown’s call at the GMB union conference in 2007 for “British workers for British jobs” — a slogan associated with the fascists. We vehemently oppose such divide-and-rule ploys, pitting workers of different countries against each other. We say the trade unions must fight for full citizenship rights for all immigrants!
The deadly chauvinism of the trade union misleaders of “defending British jobs” against foreign competition, including against the Chinese deformed workers state, where capitalist rule was overthrown by the 1949 Revolution, is itself a defence of the interests of the imperialist rulers against the working class both at home and abroad. As the world today is again riven by an economic crisis, rivalries among competing imperialist powers that have led to two world conflagrations are heating up. We insist that the defence of the class interests of the proletariat must be imbued with the programme of international solidarity and struggle that Karl Marx and Friedrich Engels inscribed on the banner of the communist movement more than 160 years ago: “Workers of the world, unite!”
Defend the Chinese workers state!
Central to a proletarian internationalist perspective today is the defence of China which is not a capitalist state but a bureaucratically deformed workers state that issued out of the 1949 Revolution. This revolution overthrew capitalist rule and led to the building up of a collectivised economy. Despite inroads made by the “market reforms”, the core of China’s economy is still collectivised, which represents a historic gain for the working class of the world.
China’s economy is dominated by the state-controlled banks and the core elements of the Chinese economy remain collectivised while state-owned enterprises are dominant in the strategic industrial sectors. China’s growth rate has been particularly dramatic in contrast to the economies of the capitalist West and Japan. However, China is by no means completely insulated from the destructive irrationality of the capitalist world market. China has vast investments in Wall Street, the City of London and elsewhere and huge balance of trade surpluses with the United States. In addition to being the world’s largest foreign holder of dollar reserves, worth almost two trillion dollars, China is now the largest holder of US government debt. The current global financial meltdown has already had adverse effects on the Chinese economy. In particular, large numbers of workers from privately owned factories producing commodities — such as toys, clothing, consumer products — geared for export have already lost their jobs.
Although economic forecasts suggest that China will maintain a growth rate of between 5-8 per cent next year, a figure which the Economist (13 November 2008) says most countries would still be happy with, “it has become an article of faith in China that output needs to grow by at least 8% a year to create enough jobs for the millions of rural Chinese moving to cities”. Already hundreds of thousands of China’s estimated 120 million migrant workers are being thrown out of jobs, particularly in Guangdong province, resulting in a mass return migration to the countryside. Workers no longer have the “iron rice bowl” which once guaranteed a job and benefits for workers in state owned enterprises, so workers who lose their jobs often have no source of income. Faced with growing social unrest, the Beijing government in November announced a colossal sum of almost $600 billion for public spending. But according to an article by Geoff Dyer in the Financial Times (15 November 2008) little more than a quarter of this will come from the central government and, “with revenues falling, it is difficult to see how local governments, banks and companies can make up the rest”.
Fundamentally, China remains a nationally isolated workers state with a large impoverished peasant sector. Moreover, the strategic aim of US and all the imperialist bourgeoisies in relation to China is to destroy the workers state and to restore capitalist class rule in this vast country. We uphold the Trotskyist programme of unconditional military defence of China against imperialist attack and against counterrevolution from within. At the same time we fight for proletarian political revolution to oust the Stalinist bureaucracy that rules in Beijing and replace it with a regime based on workers democracy, exercised through workers and peasants councils, committed to proletarian internationalism.
“Globalisation” theories go splat
British trade union leader Derek Simpson of Unite enthused that the Labour government has heralded the end of “neo-liberalism” in its November budget which is “a welcome warm up exercise after 30 years of inaction and neo-liberal economics” (Unite press release, 24 November 2008). The end of so-called neo-liberalism is also hailed by the SWP who described the US and British government takeovers of the banks as “the biggest refutation conceivable of the free market, ‘neo liberal’ language which such politicians and media commentators have inflicted on us” (SWP pamphlet, Capitalism’s New Crisis, October 2008).
Following the counterrevolution in the Soviet Union, liberals and reformists such as the SWP — who supported this defeat for the working masses — equated opposition to the “neo-liberal” policies identified with the Blair and Bush regimes with opposition to capitalism itself. “Neo-liberalism” became shorthand for the depredations of “free-market” capitalism — the drastic “structural reforms” dictated by US imperialism via the International Monetary Fund/World Bank in underdeveloped countries as well as the “flexible labour markets” and privatisations of public services carried out by New Labour.
Contrary to the ideology of the “anti-globalisation” movement, opposition to “neo-liberalism” does not equal opposition to the capitalist order. This system can only be eradicated through a series of proletarian socialist revolutions internationally. The conquest of power by the working class must shatter the capitalist state and replace it with a workers state, a task which requires the leadership of a Leninist-Trotskyist party. For the anti-globalisation movement, “anti-capitalism” became a code phrase for support to the (“good”) European “social market” model of capitalist rule — or to the populist nationalism of Hugo Chavez in Venezuela — as opposed to (“bad”) “neo-liberal” forms of capitalism.
The current economic crisis demolishes the notion of a new era of “globalisation” which posited that capitalist rule had transcended the nation state and that agencies like the World Bank and the International Monetary Fund had become some kind of world capitalist government. The myth of “globalisation” was premised on the liberal-pacifist illusion that the capitalists don’t need state power — ie, armed bodies of men — to defend their interests both against the exploited at home and against rival capitalists in other countries. Currently the national bourgeoisies of various countries, including those in the European Union consortium, are scrambling to shore up their own economic interests. Within 24 hours of a European summit in Paris to “co-ordinate” the response to the crisis in EU countries, Angela Merkel suddenly announced that, like Ireland and Greece, Germany would guarantee savings in its banks, as did Denmark. When Iceland effectively went bankrupt, the British government invoked the anti-terrorism laws to freeze the assets of Icelandic accounts in Britain.
The move by Ireland to guarantee the debts and deposits of its six largest banks provoked the ire of the New Labour government, which feared a loss of depositors in its banks as people transferred their savings to Irish banks. Typical of this was an article on the website of the Financial Times (3 October 2008) by Willem Buiter, a professor at the London School of Economics, which said: “The Irish guarantee is the most ‘in-your-face’ beggar-thy-neighbour provocation since medieval armies catapulted bubonic-plague-ridden corpses into the cities they were besieging.”
The City of London, citadel of British imperialism
Britain’s staunch military support to US imperialism such as in the occupations of Iraq and Afghanistan is a product of British imperialism’s long decline to the level of a decrepit third-rate power which lacks the wherewithal to defend its own interests abroad and has little choice other than to rely on the US. However, long after Britain ceded to US imperialism the role of dominant world power, London retained a position second to Wall Street as a world centre of finance capital. An article in the London Review of Books (25 September 2008) by Donald MacKenzie notes that, paradoxically, London’s status as a financial centre came about in part because of “Britain’s failure — crystallised in the 1957 sterling crisis — to re-establish the pound as a major international currency after the war”. MacKenzie says:
“That [failure] prompted the leading British banks increasingly to lend, borrow and accept deposits in US dollars (‘eurodollars’, as they came to be called). The Bank of England overcame its initial anxieties and came tacitly to support the eurodollar market, and the Johnson administration inadvertently encouraged it by trying to stem the flow of dollars overseas. Eurodollar operations conducted in London allowed US banks to circumvent the new controls.
“The result was that London became — and in many ways remains — the centre of the international money markets. ‘Money’ here does not mean cash, but short-term loans between banks and other major institutions; more than a fifth of international lending of this kind still takes place in London.”
The author also notes that the rate at which the world’s banks are willing to lend to each other — the LIBOR — is set in London daily. This benchmark figure, the author notes, “anchors contracts amounting to some $300 trillion, the equivalent of $45,000 for every human being on the planet”.
London’s international status was boosted in the 1980s under the high priestess of monetarism and the “free-market”, Margaret Thatcher, who de-regulated the City in the “Big Bang” of 1986. It is not an accident that this boost for untrammelled profiteering came in the aftermath of the defeat of the miners strike of 1984-85. Faced with abject decline, the only way for British imperialism to become competitive was to enforce wage reductions on the working people, which meant breaking the power of the unions. Labour governments tried to do this during the 1960s and 1970s and met with massive resistance from the unions, particularly the miners, rail and dockers unions. Together these unions had the power to bring the country to a halt. The miners strike of 1974 indeed threw British capitalism into a profound economic and political crisis. This resulted in the election of a Labour government in 1974 which tried and failed to break the power of the unions.
Labour was replaced by the Thatcher government in 1979 which prepared a showdown against the miners, culminating in the heroic year-long strike by the miners union. Defeat in this battle was far from inevitable and was not mainly the result of the massive state repression such as the thousands of cops attacking striking miners daily in the coalfields, but of the treachery of the Labourite union leaders whose perspective did not go beyond the election of a Labour government. Particular responsibility lies with the “left” leaders of the rail unions, who failed to strike alongside the miners, and the dockers union leaders who sent their members back to work twice during the miners strike rather than mount joint strikes against Thatcher. The Labour Party “lefts” such as Tony Benn were no better, despite many speeches about solidarity with the miners, while the Labour leadership under Neil Kinnock was openly hostile to the strike.
The difficult conditions under which the British workers struggle today — including the panoply of anti-union laws prepared by Thatcher and retained by New Labour — are the legacy of the defeat of that struggle and the fact that the leadership of the unions have refused to rock the boat with class struggle against the Labour government. It was the political bankruptcy of old Labour reformism that led to the rise of Thatcher and of New Labour. The deregulation of the City led to the growth in the 1990s of the new investment banks and resulted in the runaway “free market” binge based on hedge funds, derivatives and securities. This also stemmed from counterrevolution in the former USSR. A Financial Times article by Tony Jackson described its effect on the markets:
“The market peaks of 2000 represented one of the biggest overvaluations of equities in history. The blame is conventionally laid on the technology bubble, and that certainly played its part. But the more fundamental factor was the collapse of the Soviet Union a decade earlier. That led to the final discrediting of socialism and central planning, the revival of globalisation and the triumph of the US as the unipolar world power.”
— Financial Times, 4 May 2008
The unfettered boom in the City that characterised the Thatcher years went hand in hand with the destruction of manufacturing jobs. This continued throughout Labour’s decade in office, during which one million more jobs were lost in manufacturing which is now a mere 14 per cent of the economy (as opposed to the “service” sector, including financial services, which is around 70 per cent).
The British capitalist order is based on the dominance of the City of London and the yuppie English Home Counties over the former industrial heartlands of the north of England as well as the national oppression of Scotland and Wales. We oppose the reactionary United Kingdom which is centred on the archaic institutions of the monarchy, the House of Lords and the established churches. We seek to build a multiethnic revolutionary workers party that fights to overthrow Westminster rule and replace it with a workers government. Abolish the monarchy, the established churches and the House of Lords! British troops out of Northern Ireland, Iraq and Afghanistan! For an Irish workers republic within a voluntary federation of workers republics in the British Isles!