BRITAIN is in the grip of the deepest recession since records began putting the country on course for the biggest economic collapse since 1709 – this was the verdict this week of the Office for Budget Responsibility (OBR), an independent organisation but which works closely with the Treasury in making its economic forecasts.
Such is the economic catastrophe that is tearing capitalism down across the world that bourgeois economists are having to go far back in history in an attempt to find any parallels.
At first the most obvious one was to draw comparisons with the international banking crash of 2008.
As it became clear that the coronavirus pandemic, which has closed down economies across the globe, was of a much greater magnitude than even this banking catastrophe, they began to draw comparisons with the Great Depression of the 1930s that followed the stock market crash in 1929.
Even this, however, has turned out to be inadequate in getting anywhere near the depth and scale of capitalism’s crisis today and they have been forced to go back over 300 years to find anything comparable.
All the way back to 1709 when the entire northern hemisphere, from Britain across Europe right through the Mediterranean, was closed down through a natural disaster – a deep freeze that saw the Thames frozen over along with all the ports in the Mediterranean.
For three months, Europe was frozen solid. The economies of Britain and Europe crashed, while food shortages and freezing weather led to starvation and hundreds of thousands of deaths amongst the poor in every country.
This is the parallel with today’s crisis that OBR is now making when it warned that the UK economy will sink by 35% over the coming months and unemployment will soar by two million to nearly 3.5 million by June this year.
According to the OBR, the UK’s Gross Domestic Product (GDP), the total wealth produced by the country, will fall by more than a third in the second quarter of the year if the lockdown lasts into June even if this was followed by another three months of partial lockdown.
Robert Chote, the chairman of the OBR, said: ‘The longer the lockdown goes on, the more likely it is that the future potential of the economy is scarred by business failures, by less business investment and by the unemployed finding it harder to get back into the labour market.’
While the OBR is looking back to 1709 the International Monetary Fund (IMF) joined in the panic warnings this week saying that the world economy will shrink by 3% this year making this the ‘worst recession since the Great Depression’.
IMF chief economist Gita Gopinath said that for the first time since the Great Depression, both advanced, emerging markets and developing economies of the world would all be in recession.
Meanwhile the IMF warned that far from being the saviours of capitalism the banks could become an ‘amplifier’ of the crash as they are refusing to risk their profits by making loans to business and corporations that they know are already bankrupt.
A clear message has been spelt out by these economists at the OBR and the IMF – capitalism is in the midst of an historic crisis that will devastate the economies and lives of millions of workers across the world, a crisis for which it has no solution except for the hope that a few capitalists can emerge from the wreckage while the working class are left to suffer poverty, starvation and death from the deadly coronavirus pandemic.
The case for the necessity to bring down capitalism and replace it with socialism is no longer the sole prerogative of Marxists – the case is being made daily by these bourgeois economists.
At the same time the necessity for socialist revolution is being driven into the consciousness of workers world-wide as they confront a system in its death agony that deserves to perish.
The immediate task for the working class today is the building of revolutionary parties of the Fourth International to lead the socialist revolution to its final victory.
In Britain this demands the building of the WRP. Join today.