The politics of recession

In the world today, one person dies of starvation each second, but food is deliberately destroyed in order to maximise prices and profit. Production is being cut back in all vital areas, with one major exception. The world’s governments are now spending a million pounds a minute on weapons of destruction, to defend the property and privilege of their investors. Clearly, society is not being run according to a principle of human well-being, but to provide profit for the holders of property.

There is a lot of talk at the moment about the recession. The Tories pray that it will lift in time for the next General Election. The Labour Party claims to have a master plan with which to beat it, but is increasingly cautious in its claims. Financial institutions such as the World Bank and the London Chamber of Commerce speak desperately about it “reaching the bottom” and “turning the corner” in the hope that they can inspire confidence among investors and make their predictions come true. Politicians like Geoffrey Howe and Francis Pym argue over when business is likely to pick up again. Perhaps the most honest judgement has come from the Employment Secretary, James Prior, who said “Frankly, I don’t know what the forecasts will show or what the results will be in three years’ time.” (Guardian. 2914/81.)

This might lead you to believe that the recession has a mind of its own. Labour politicians speak of magical spending programmes which they intend to offer up as sacrifices to soften the temper of the crisis. Certainly, world recession can no more be produced or ended by governments than the “boom” periods with which it alternates. But as an integral part of the present social system, it is ultimately a human creation which can be removed once it has been understood.

We are taught to regard social institutions such as nations, employers and money with a kind of religious reverence which gives them an eternal air. We allow them to dominate over us, so that the relations between us develop a greater importance than our wish to survive in comfort and security. The present world economy of capitalism is based on the blind anarchy of competition between companies and nations. It does not serve the interests of the majority but it is kept in being by distortion and confusion.

The mass unemployment and destruction which is a sign of recession is an inevitable part of the profit system which dominates the entire world today. It is a demonstration of the natural insecurity of the wage-worker or salary-earner. Even in “boom” times there is unemployment. Keynes, who expounded the theory that higher government spending could relieve unemployment, only ever hoped to reduce it to a rate of five per cent, which Geoffrey Howe recently referred to in a Commons Treasury Committee paper as the “natural rate” of unemployment.

Most of the factories, offices, farms and other productive and distributive machinery are in the hand of a tiny minority. In Britain, for example, only seven per cent of adults have any shares whatsoever, and the richest one per cent have more wealth than the poorest eighty per cent (Royal Commission on the Distribution of Income and Wealth, 1979). The majority are forced to work to live, but are only allowed access to the work-place on terms which are beneficial to the employer who owns it. Of all the wealth produced, only some is paid to the employees who create it all, just enough to keep us fit for work at an accepted standard of living, while the remainder is accumulated as capital. The surplus goes to the parasitical, unproductive minority in the form of rent, interest and profit. They only employ us when they think it will be profitable—that is, when they think they can sell the goods and services we produce. When we have produced too much for the market, so that people cannot even afford to buy back what they have made, the market dries up and redundancies occur. Food is destroyed, politicians moan about the “lakes of wine” and “butter mountains”, and “destocking” takes place until a chance of a profit arises again.

This system of wages, profits and prices is based on competition. Instead of working together, pooling resources to satisfy needs, we are regimented into the armies of companies which compete over the profits they make in the world market. Like a monster breathing in and out, this anarchy leads to a continuous cycle of stops and starts. After a period of rapid growth in production, market demand falls behind in a particular industry, so investors pull out, bringing further decline in that area. They switch their money into other fields, where production increases until it outstrips market demand, when, again, profitability is threatened and investors pull out.

The process spreads in a matter of years, across the world, and a crisis of “overproduction” is declared. Overproduction for the restrictive market system, it should be noted, not for the needs of humanity. While industrialists complain about the lakes of wine, workers are told to “pull our belts in”, and cut back on “luxuries” like bottles of wine. The United Nations recently declared that half of the world’s population is severely malnourished. Millions of workers are put on the dole. War breaks out as nations compete over reduced profit margins and glutted markets. The Italian stock exchange was closed for three days recently after £4 billion had been wiped off the value of companies. State-capitalist countries like Russia and China are affected too. The Polish government recently announced that unemployment will be unavoidable there and Janos Kadar, the Hungarian Communist Party leader, has stated that the relative “liberalism” of recent years must end, and that a tougher line is needed.

When there has been enough destruction and human misery to deplete stocks to the point where market demand is greater than supply, when industry has been stripped of enough capital, including workers, then production will pick up again. In one area after another the prospect of profit will persuade the capitalist class once again to allow us to work for them. And so the cycle continues. The vast destruction of the second world war. It was partly through the reconstruction necessary in the post-war period that there was relatively full employment in the ’fifties and ’sixties.

 

 

Daddy never worked: nor have I . . . I have various businesses . . . Speaking personally, the recession doesn’t affect me at all because I’m not employed. (Man Alive, BBC 2, 6 March 1981.)