ON Monday Chancellor Darling opened his pre-budget report with a piece of cheerful idiocy, saying that he was ‘confident that the UK, as an adaptable and open economy, will be well positioned to benefit from a return to growth in the world economy’, and then went on to hazard a guess that a period of growth would begin in 2011.
He however had to admit to the colossal scale of the crisis of capitalism, despite Brown’s earlier boasts that he had resolved its crisis.
He reported that the ‘Bank of England estimates that global bank losses could eventually reach 3 trillion dollars . . .’
He added of the crisis, separating the banking crisis from the crisis of capitalism as a whole: ‘Mr Speaker, all this happened, too, at a time when the global economy was already suffering from unprecedented increases in energy, food and commodity prices.’
In fact, since this speech, made only 48 hours ago, the crisis has immeasurably deepened with Citibank receiving $326bn of US government aid, and the Federal Reserve announcing that it was making a further $800bn available to rescue bankrupt banks, while General Motors is considering going for Chapter 11 bankruptcy so as to rip up all of its ‘expensive’ agreements with the United Auto Workers union.
Our cheerful idiot continued to say: ‘But the World Bank and other institutions are confident that the global economy will recover strongly – predicting it will double in size over the next two decades, helping to spread prosperity across the world.’
However, it is the ‘World Bank and other institutions’ that have presided over the mountains of debt that the banking system has built up over the course of the last 20 years. Their word cannot be taken on any issue.
Darling, while forced to dip his toe into the crisis, still maintains that the capitalist system is basically sound and that ‘the root of today’s problems are failings in the global financial system’ and that ‘The banking system is the heart of all economies.’
The answer to this crisis of the banks is regulation, says this one time fan of Brown’s ‘light touch regulation’ policy as far as capitalism is concerned.
In fact the root of today’s crisis is the basic contradiction of capitalism – long ago analysed by Karl Marx – between the needs of the productive forces to develop and the private ownership of the means of production and the capitalist nation state, this contradiction producing its cyclical crisis, from boom to slump and vice versa.
If the banks are regulated everything will be OK, say Darling and Brown. In fact capitalism cannot be regulated as this biggest crisis in its history, and its repeated crises prove. In fact, Brown and the whole bourgeois gang denied as an article of their faith that the current crisis could ever happen.
The banking system is not the heart of all economies since there were economies well before there were banks. The present banking system grew out of the transition of free competition capitalism into monopoly capitalism.
The heart of capitalism, its essence, is the production of commodities, use values for exchange, with money as a measure of value, and banks as the means to provide capital for the further development of commodity production.
Commodity production is the very thing that Thatcher and others sneered at, saying that British capitalism could flourish without it, through being a parasitic banking centre.
Darling has settled for a £20 billion fiscal stimulus and a further indebtedness of £118bn during 2009-2010, when the national debt will rise to 57% of GDP.
This is to be clawed back by sacking civil servants and other public sector workers, cutting public sector wages, forcing single parents into work, and privatising Royal Mail and other state-owned industries and services such as the NHS, along with a 0.5% increase in national insurance in 2011.
The Labour Party leaders and the trade union bureaucracy are standing by capitalism to the end, with Darling’s measures to expand the state debt in fact deepening the capitalist crisis.
The only way out of this crisis for the working class and the middle class is the organisation of a socialist revolution.