A RECENT analysis by Sky News has shown that the ‘recovery’ of British capitalism since the world banking crash in 2008 is actually smaller than the recovery of the US economy in the ten years after the Great Depression in America in the 1930s.
The Great Depression was caused by the Wall Street crash in October 1929 when a massively inflated stock market bubble collapsed, sending share prices crashing down in the most devastating crisis in the history of American capitalism.
It was followed by a crash in the London Stock Market which started the beginning of the 12-year long Great Depression that hit all Western industrialised countries. What this analysis of the effects of the 2008 crash shows, is that far from recovering from this crash, British capitalism is in a worse situation than even America was throughout the 1930s.
This was the period of mass poverty and starvation on an epic scale throughout America and Britain, the hungry 30s of mass unemployment and hunger marches.
According to Sky’s analysis, by the end of the 1930s the US economy was around 12.6% bigger than it was in 1929. In stark contrast, since 2008 the UK economy has grown by a measly 10.8%.
While bourgeois economists and politicians have been in the past quick to dismiss the crash of 2008 as nothing more than a normal recession, admittedly bigger than most, and that following it capitalism would quickly bounce-back to previous rates of growth, it has become crystal clear that this is not going to happen.
The banking crash of 2008 was not some episodic ‘correction’ to capitalism. These statistics show it to be an unprecedented crash of historic proportions exceeding that of 1929. While the banks were bailed-out in Britain to the tune of £130 billion pumped in to keep them from collapse in 2008, this was paid for by the working class through massive austerity cuts.
Real wages today in Britain are worth £24 a week less than they were ten years ago.
This represents the longest period of wage-cutting since the Napoleonic Wars between 1798 and 1822. In other words, the longest pay squeeze in 200 years has been inflicted on workers to pay for the banks’ crisis! In fact real wages even recovered faster during the Great Depression than they have following 2008.
The longest period of falling wages and decline in industrial output for 200 years can no longer be dismissed by the ruling class as some episodic moment in the history of capitalism. It is waking up to the fact that the working class hates a capitalist system that condemns it to poverty while the bankers and bosses wallow in million pound pay packets.
The fear stalking the bourgeoisie is that workers are being revolutionised by this crisis.
This fear was reflected in the speech at the Tory party conference by chancellor Philip Hammond, who warned: ‘Too many people have experienced years of slow wage growth….And as they look around them, they feel a growing concern that they are falling behind’.
Lord Adair Turner former head of the bosses CBI and the Financial Services Authority was even blunter when he told Sky News; ‘The capitalist system is not delivering for ordinary people in the way it seemed to be doing before 2007. And that’s the crisis which I think is still unresolved. I think people are legitimately angry about it.’ Turner added: ‘Something has gone deeply wrong with capitalism.’
Capitalism has not just gone wrong, with the implications that it can be somehow fixed, as left-reformists like Corbyn and John McDonnell in the Labour Party claim. Capitalism cannot be fixed with a few reforms. It is a system that has reached the end of the road historically and long outlived its ability to provide any future for workers or young people.
As millions of workers across the world are now recognising, the only way forward is to put an end to capitalism and go forward to socialism through the working class taking power in a socialist revolution that will expropriate the bosses and bankers and bring in a planned socialist economy where production is for human need not profit.