AFTER actively assisting in the creation of trillions of debt, and showing its contempt for the concept of value by selling almost half of the Bank of England’s gold reserves for a relative pittance in paper currencies, the Labour government, led by Gordon Brown, is seeking to solve the debt crisis, by building up an even more massive state debt, allegedly to be redeemed when the current slump transforms itself into a new boom.
Formerly the government argued that the manipulation of paper currencies, by utilising the movement of bank interest rates, meant that the government had replaced the negation of the negation of the boom to bust to a new boom spiral development of capitalism, with a continuous expansion of the system.
This petty theory has collapsed around the ears of those that propounded it.
Instead they have lurched to embrace the opposite theory that the depression will clear the way for a new expansion in which all of the multi-trillion pound debts accumulated during their ‘spend your way out of the crisis’ turn, will be paid off.
They have all become admirers of John Maynard Keynes. This is after they fashioned their new Labour Party and its policies in the image and likeness of Margaret Thatcher and monetarism, Keynes’ opposite.
The heyday of Keynesian policy was the 1930s when the main practitioners of his ideas were Roosevelt and Hitler.
Roosevelt came to office in 1932, and was very fearful of the revolutionary movement that was emerging in the US working class, as a result of the depression.
He was able to adopt the New Deal of public works for the unemployed because the US was enormously rich, was not yet an imperialist power, and was not weighed down and crippled by being the ‘world’s policeman’, the position that it was to adopt after 1945.
However, the New Deal really began to have effect when the interests of the US collided with those of Nazi Germany and a massive rearmament took place which made the US’ entry into the Second World War in 1941 inevitable.
In Germany the trade unions were declared illegal in 1933, and the trade union leaders were put into concentration camps.
Just days after the 1933 Nazi takeover, Adolf Hitler ordered a massive public work, the autobahn construction project.
Soon, over 100,000 labourers worked at construction sites all over Germany.
As well, a massive spending on rearmament was undertaken and a colossal debt was built up which could only be redeemed by ‘blitzkrieg’.
In both the US and Germany, Keynes’ theories led to massive rearmament, colossal debts and imperialist war.
It was out of the vast destruction of the Second World War, that Keynes and others fashioned the basis of a new boom, based not on pieces of paper money or credit notes, but on value, the central feature of which was that the US dollar was to be the measure of value for world trade and that it was to be directly exchangeable with gold, at a rate of $35 to an ounce of gold.
Today, we see Darling boasting about ‘spending our way out of the crisis and flirting with national bankruptcy, which can only be held off by constant and savage attacks on the working class through wage cutting, pensions busting, mass unemployment and privatising the NHS, Royal Mail and education.
This will be at the same time as the government will be spending trillions on aircraft carriers, nuclear submarines, and a general expansion of the armed forces, while continuing to rescue bankrupt banks and other employers, particularly failed builders, and supplying them with cheap youth labour.
The future under capitalism remains slump, war and revolution.
However, the 1930s are not being re-run. Capitalism is much weaker and is in a much more serious and deadly crisis. It is reaching the end of its death agony.
This crisis must be resolved by the working class building revolutionary parties that will mobilise the masses for socialist revolutions, to put an end to capitalism as a worldwide system and bring in socialism.
