Capitalism in deflationary crisis


THE bosses organisation, the CBI, yesterday unveiled a report entitled ‘Better Off Britain’ which it claimed offered a radical blueprint to raise living standards for low paid workers.

This blueprint – which the CBI’s director general, John Cridland, boasted contained recommendations that could have come from trade unions – calls for more money for the low paid by the government raising the threshold whereby people pay employee National Insurance to £10,500.

In addition the CBI is calling for an extension of free childcare provisions as a means of getting more adults back into work.

This concern for the plight of low paid workers by the very people who ensure that they are paid as little as possible, has been hailed as a complete change in direction for the CBI and a major departure from its usual demands for tax cuts for the wealthy.

According to the CBI, Britain is ‘jobs rich’, but unfortunately these jobs are so low paid that wages were now too low for workers to be able to buy the goods they have produced.

The CBI’s solution is not to ask its members to increase the pay of workers by paying a living wage, but for the state to subsidise the employers through increased taxes.

What the CBI wants is for low wages to be subsidised by the state and productivity for those in work to be driven up as the only way that industry can be kept from tipping over into mass bankruptcy and closure.

Cridland was careful to slip in a kind word for the leadership of the TUC saying that he ‘often agrees with Frances O’Grady’. The plan is obviously to draw the TUC into a corporatist agreement with the bosses to push up productivity and avoid a fight for a £10 an hour living wage (the official policy of the TUC) through a united front to call on the government to bail out bankrupt British industry.

They are assured of a warm response from these treacherous leaders who, back in August, stabbed young people in the back when they signed a joint statement with the CBI praising the Tory trainee programme which forces unemployed youth onto unpaid five months of ‘training’ with no job at the end.

On the day that the CBI were unveiling their desperate strategy for survival, the real world of capitalist crisis was rudely intruding.

An article in Monday’s Financial Times revealed that the Tories’ plans to cut government spending by £25 billion by 2019 would have to be doubled to £48 billion next year to meet the government targets for debt reduction.

Even this figure is a gross underestimation, according to the Institute of Economic Affairs Britain faces a ‘debt time-bomb’ that requires public spending to be slashed by a quarter to reduce the national debt by just 20% – a cut of £168 billion.

The inescapable fact is that, having driven wages down to poverty level in order to keep up their profits, the capitalist class are now caught in a deadly deflationary spiral that will wipe out manufacturing industry for good.

At the same time, the huge debt mountain built up to prop up the bankrupt financial system demands even more savage austerity measures, ruling out any state support.

That the TUC will undoubtedly grasp any chance at entering into a corporatist alliance with the bosses rather than lead any fight for wage rises, demonstrates just how far these leaders have moved to the right.

For the working class, there can be only one solution to the crisis of low pay and that is to demand a general strike to bring down this government and go forward to a workers government that will nationalise under workers control the banks and industry.

With the leadership of the TUC lining up with the bosses the urgent requirement is to remove these class collaborators and replace them with a new revolutionary leadership prepared to lead the struggle to put an end to capitalism once and for all.

It means building the WRP and Young Socialists.