YESTERDAY Boris Johnson set out his policy to rescue British capitalism through spending limitless billions of pounds on investing in everything and anything: ‘infrastructure, transport, broadband – you name it’ he said.
Johnson proclaimed he was committed to the New Deal polices carried out in the US during the 1930s by president Franklin D Roosevelt (FDR) saying: ‘I think this is the moment for a Rooseveltian approach to the UK.’
This followed a speech made at the weekend by Michael Gove who said: ‘FDR managed to save capitalism, restore faith in democracy, and set his country on a course of increasing prosperity for decades.’
The Tories’ embracing of Roosevelt’s New Deal policies, which saw the US government pump money in relief to the millions of US workers driven into mass unemployment and starvation in the Great Depression, will be greeted deliriously by the Labour and trade union leaders.
They are over the moon that the Tories have now come round to their way of thinking – after all, when Corbyn and the Labour Party fought the last general election on the basis of very limited public spending on infrastructure the Tories proclaimed it would bankrupt the country.
Now, however, the Tories are going far beyond anything Corbyn ever dreamed of. In fact, this is not so much an economic plan to revive British capitalism as a gigantic adventure being undertaken by the Tories out of desperation.
All these plans for massive state spending rely on the government simply ordering the Bank of England to print billions upon billions of worthless paper money in the hope that the government can borrow vast sums on the world market.
Turning on the printing presses is not going to inspire the confidence of capitalism or the world money markets.
All they are concerned with is profits, and all the road or school building that Johnson is promising will not make up for the fact that UK industry has sunk while the service sector has been destroyed and will never recover.
In fact, the world will rightly judge that British capitalism is sinking faster than the Titanic and that printing its way out of a crisis will only lead to massive inflation as the currency becomes worthless. They will not be prepared to finance the massive national debt that Johnson has pledged to run up.
Writing in 1939 about the US New Deal Leon Trotsky pointed out:
‘But the New Deal itself was possible only because of the tremendous wealth accumulated by past generations. Only a very rich nation could indulge itself in so extravagant a policy. But even such a nation cannot indefinitely go on living at the expense of past generations. The New Deal policy with its fictitious achievements and its very real increase in the national debt, leads unavoidably to ferocious capitalist reaction and a devastating explosion of imperialism.’ (Trotsky ‘Marxism in our Time’.)
British capitalism starts off with none of the tremendous wealth accumulated in the past that the US once enjoyed, and the ferocious capitalist reaction Trotsky spoke of will happen very rapidly.
Johnson’s lunatic plans for massive state spending financed through debt and money printing can only result in hyperinflation and state bankruptcy which will drive war against the working class.
When the furlough scheme ends in September millions of workers will find themselves unemployed and thrown on the mercy of poverty levels of benefit.
Those with a job will face employers determined to slash wages to restore profits. This cannot be done in any peaceful way but only through the Tories imposing a brutal regime on the working class aided by the treachery of the Labour leadership.
Capitalism will demand under Johnson’s New Deal that strikes are outlawed and that workers submit passively to every demand on them in order to restore profits. The only way to preserve capitalism and keep profits flowing is for a remorseless fight against the working class and its trade unions.
For the working class the only way forward out of this crisis is through the overthrow of bankrupt capitalism in Britain and the world through the victory of the world socialist revolution and going forward to world socialism.