JOHN McDONNELL the newly appointed Labour shadow chancellor, made his first speech to the Labour Party conference yesterday outlining the ‘new economics’ that he and Jeremy Corbyn intend to fight for.
McDonnell is undoubtedly the most ‘left’ of any previous holders of this office in the party and the policies he intends to pursue reflect his consistent anti-austerity position – a position that over the years has brought him into sharp conflict with right-wing Labour MPs as well as winning him the hatred of the Tories and the bourgeois press.
His speech deserves close and serious attention for it reveals quite clearly the limits of even the best representatives of left reformism. McDonnell promised a ‘new economics’ for Labour, a break with the past right wing policies of following blindly the Tory policy that austerity cuts are the only way to bring down the country’s huge budget deficit.
Answering the charge that he was a ‘deficit denier’ McDonnell insisted that a future Labour government would cut the deficit but would do so without cutting services. This would be achieved by pursuing an ‘aggressive’ plan to balance the books by going after the multinational companies like Starbucks, Vodafone, Amazon and Google to ensure they pay their ‘fair share’ of taxes.
Labour would ensure that the country ‘lives within its means’, not on the backs of the poorest but by ‘dynamically growing our economy’, promising that a Labour government would ‘strategically invest in the key industries that will deliver the sustainable long term economic growth’, investing to ‘grow the economy’ and sharing the proceeds ‘more equally’.
McDonnell insisted that austerity ‘is not an economic necessity, it’s a political choice’ and that the Tories have taken a ‘conscious decision’ to protect ‘the very richest’. Towards the end of his speech McDonnell remarked that he was ‘very worried’ that the pre-crash warning signs that heralded the international economic crisis in 2007 were appearing once again.
There was no recovery for world capitalism after the banking collapse that emerged in 2008. What happened was that in order to prevent every single bank in the world going bust, the capitalist world’s central banks were forced to step in to bail them out, transferring their huge debts onto the nation states.
It is these debts that the bankers and bosses are insisting be paid for out of the backs of workers and youth. To keep the banks going, trillions of pounds worth of valueless paper money was handed to the bankers through Quantitative Easing and cheap credit, all of which has created a vast bubble in stock market and share prices across the world as this free money was used in an orgy of speculation.
For capitalism it is a necessity to cut all public expenditure in order to pay off the bankers’ debts at the expense of the working class, through destroying all the gains of the welfare state and the living standards of every worker. Austerity isn’t some ideological choice made by the ruling class that can be reversed by a well meaning reformist party.
McDonnell states that he can see the huge crisis of capitalism developing. What is not grasped is that the huge and continuous austerity attacks on workers and youth is leading to a massive class eruption with the working class rising up and demanding the Tories and the ruling class go.
Reformist policies are unable to solve this capitalist crisis. It needs the expropriation by the working class of all the means of production, it needs the nationalisation of the banks and the land and the driving out of the big monopolies so that a planned socialist system can be introduced to provide for the needs of millions and end the rule of just the few rich employers and bankers.
Reformism will be crushed in the struggle against the ruling class – it needs the revolutionary party to carry this fight forward.
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