THE SPLIT in the leading bodies of the Bank of England over whether or not to raise interest rates has emerged just shortly after the decision to keep them at the historic low of 0.25%.
The contradiction in which they are caught is that even a slight increase will plunge the millions of people with cheap loans and mortgages into the abyss of bankruptcy as their repayments soar at a time when wages are plunging.
On the other hand, keeping them at near-zero levels is only fuelling the debt bubble that everyone knows is on the point of exploding and bringing down the entire banking system. This crisis was the theme of a speech this week by the Bank’s chief economist, Andy Haldane, in which he predicted interest rates would have to be increased shortly whatever the risk.
He went further by attacking the entire development of British capitalism and the policies ruthlessly pursued of driving down wages and creating zero-hours working along with bogus self-employment.
Haldane pointed out that the lack of wage growth in Britain is the result of ‘turning the clock back’ to the days before the Industrial Revolution of the 18th century, a time when there were no trade unions and self-employment was widespread.
He said that the relationship between pay and employment today had more in common with the period between 1500 and 1750. After the 1750s, Haldane claims that the growth of trade unions and collective bargaining meant that workers were able to get better pay rises when labour was scarce.
Haldane correctly identifies the fact that full employment claimed by the Tories today is a mirage, that the only jobs today are low-paid part-time, self-employment and zero-hours contracts. He notes that millions of workers even on full-time work are forced to rely on food banks to survive.
The blame for this he puts on the decline of trade union membership and the consequent weakness of unions to secure decent pay increases for their members. Where Haldane is completely wrong is his implied assertion that the working class is on its knees and helpless in the face of this inevitable return to the 18th century.
It is not workers who have shown a reluctance to fight, it is the leadership of the trade unions that at every turn have refused to lead any struggle against the deliberate policies pursued by the Tories since the days of Margaret Thatcher to smash the unions through anti-union laws while consciously de-industrialising Britain.
Time and again members have voted overwhelmingly for fights over pay and against privatisation only to be betrayed by a leadership that refuses to take on the government and a TUC that point blank refuses to mobilise the enormous strength of the working class in a general strike to defeat the class war attacks on them in the name of austerity.
Haldane is correct to say that British capitalism in the 21st century is so bankrupt today that it is forced to try and drive back to the 18th century. Capitalism may have reached the end of the road, but the working class is on the road to its revolutionary overthrow.
Millions of workers and young people in Britain and across the world have reached the revolutionary conclusion that capitalism is a bankrupt system that can no longer be tolerated and that only the working class can advance humanity today by overthrowing it once and for all and advancing to a socialist society where the productive forces will be used not for the profit of a tiny few but for the benefit of all.
This immediately means demanding that the TUC leaders get up off their knees and call for mass action, including a general strike, to kick out this dead dog of a Tory minority government or be removed and replaced by a new leadership that is prepared to lead this struggle to go forward to a workers government that will implement socialist policies of nationalising the banks and industry and placing them under the control of and for the benefit of the working class. Only the WRP is building this leadership, join us today.