Who needs leaders? (1993)

From the November 1993 issue of the Socialist Standard

John Major looks like he’s in deep trouble with his party. But what difference does a change of leadership make to the operation of Capitalism?

Who would you like to be Prime Minister of Great Britain? Or leader of the Labour Party? Of the Liberal Democrats? And when you have made your choice ask yourself why — not why you chose that particular person but why you bothered to make a choice. Ask yourself what persuaded you that whoever is nominally in charge of things makes any noticeable difference to what happens to us.

We ask these questions in response to the present void in both Conservative and Labour parties, in which they are wracked with doubt over whether their recent choice of leader was advisable. In both parties the doubts have triggered off the usual frenzied but surreptitious campaigning by aspirants to the leadership, while they all deny any such ambitions and profess undying loyalty to the leader.

This is especially noticeable in the Tory Party because, as the government, their mistakes, disputes and obvious impotence to control capitalism are so clearly exposed. This is not good for John Major, who came to be Prime Minister on the assumption — which he encouraged — that his government's style would be different from Thatcher's and that this would ensure it would be more successful in tackling current problems like unemployment, housing, shortage of medical services and so on. His lack of success makes it embarrassing for Tories to remember his promise in November 1990, to lead "a nation at ease with itself.

After nearly three years of his government whatever the nation is at case with it is not John Major, whose popularity is at the point where it causes friction in his and a campaign lo replace him much as Thatcher was replaced. One seasoned MP tells of the day when a senior Tory minister advised him never to forget that loyalty was the party's secret weapon. Of an enquiring mind, this MP soon realized that the opposite is the ease — that the Tories are as disloyal and ruthless when they decide their leader is likely to lose them seats in parliament. When it gets down to it that is why Thatcher had to go and why Major’s job is in jeopardy.

The relentless and fruitless search for the perfect leader is, like so many of the delusions which bolster the capitalist system, clearly influenced by prejudice. For example, nothing in a leader appeals to British people so much as an apparent firmness of purpose. But when that same characteristic is shown by an "enemy" leader — like Saddam Hussein, it is a very different matter. Saddam, says the prejudice was not firm and consistent in his policies; he was mad, just like all the other bogeymen of the Sun and similar papers.

In any case, how valid are the memories of Thatcher single-handedly beating off all those mad, grasping foreigners and doing something called "putting the great back in Great Britain"? The decline of British capitalism since the First World War has done much to fashion the political history of this country. In one way or another every government has had to accept, and work with, that reality. Some have done this more readily than others; some have skilfully practised deceit on the issue, so that the voters were convinced they were not doing what they were.

Part of this deceit has been in the speeches of leaders who have suggested that the decline in British power was avoidable and that they could reverse the trend. This posture has not been confined to the Tories; Harold Wilson, especially during his first spell in power, consistently talked about British power and the British economy forcing their way to the top in the world. At times he was so absorbed in this crazy notion that his voice lost its Yorkshire twang and took on a Churchillian growl when he spoke about it.

The idea is to conceal reality so that all those voters who are deluded into thinking that if Britain is a super power they will become super-workers will gratefully vote for a Wilson or a Thatcher. For her entire period in Number Ten Thatcher was one of the cleverest at hiding the reality and persuading British workers that it could be avoided. That was why so many of them voted for her. But the deception is self-perpetuating because it reinforces the notion that the decline — or the rise — of a capitalist power is not a matter of history but of political policy. The assumption is then that the collapse of the British Empire would not have happened had it not been for feeble egalitarians such as Clement Attlee is mistakenly supposed to have been. It is a delusion which does not help to understand the place and the function of leaders nor what happens under capitalism.

And that brings us to the crucial question of how useful are leaders. Do they really change the course of events? One field in which they are confident they have control is the economy. When things are going badly — when British capitalism is in recession or a financial crisis — the Chancellor of the Exchequer assures us that they have the remedy; trust them and all will be well. And when things are going well — when there is a boom — they claim the credit, saying it is due to their skill and intelligence.

About a year ago British capitalism went through a crisis which has come to be known as Black Wednesday. It was a day when a panic-stricken Chancellor (who, as one of those clever political leaders, is supposed never to gel in a panic) ended a succession of juggling with interest rates by withdrawing sterling from the European Exchange Rate Mechanism. This was supposed to be yet another example of politicians’ skill but in fact it happened only a short while after the Chancellor — the hapless Norman Lamont — and John Major had lectured us on the theme that the only way to prosperity for us all was lo keep sterling in the ERM. They were in no doubt about this quite sure that sterling would not be taken out of the ERM. Now many Tory politicians are asserting that the withdrawal is an example of their cleverness and that things for British capitalism are better as a result. For example, Norman Lamont is now very clear on the issue, urging “the Prime Minister to stand up and say once and for all that Britain should never again have anything to do with a single currency. Then we could all sing in the bath" (Well he was writing in the Sun).

Parasitic minority

Different conclusions have been drawn from that muddle, as from all the other episodes of similar chaos which regularly burst on the scene, stimulating more speeches, lectures and promises from political leaders. But only one conclusion fits the facts. No matter how clever and learned leaders may be, they can have no significant effect on how capitalism works and how it affects us. This social system works to its own priorities, to the benefit of a small parasitic minority. It cannot be controlled or manipulated. The cleverer leaders may be able to conceal this for a time; the not so clever — like Lamont and Major — can’t conceal it and that is why they arouse such contempt. To choose one leader against another is to choose one style of futility before another. It would be better to abandon the whole sorry mess and opt instead for efficacy for our own ability to change society so that we operate it, trusting ourselves to run the world for ourselves.

Ivan

Capitalism and the Comet (1993)

From the January 1993 issue of the Socialist Standard

This is the way the world ends This is the way the world ends This is the way the world ends Not with a bang but a whimper.—The Hollow Men.

T.S. Eliot, it seems, was wrong. Dr Steel, an expert on asteroids and leader of the world's largest team involved in sighting new pieces of celestial debris, recently informed the second Australian Space Development Conference that Comet Smith- Tuttle, first sighted in 1862 and rediscovered in September 1992, is on course to collide with the planet Earth on 14 August 2116.

Comet Smith-Tuttle is a 3.1-mile-wide ball of rock and ice travelling through space at a speed of 37 miles per second. The comet’s collision with the Earth will create an impact force of 20 million megatonnes, or about 1.6 million times the force of the bomb dropped on Hiroshima. A head-on crash could destroy up to 95 percent of humanity.

With the plot of a thousand sci-fi novellas becoming fact, is any action likely to be immediately instigated to safeguard the future of our children's children’s children? Having been given one hundred and twenty four years’ notice of this impending event, do we agree with Samuel Johnson that “when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully”? Or, is it pointless to concern ourselves with something which will not directly affect a single person alive today?

Putting one in mind of Sir Boyle Roche who asked "what has posterity done for us?’’, the leader column in the Times (26 October) takes a very facetious view of the whole affair. Whilst contemplating the effect of Comet Smith-Tuttle’s arrival upon the stock market and property prices in 2116, the paper concludes that placid contemplation of the world’s fate has always worked up to now. The Times is, however, surprised at the prospect of civilization being brought to and end by a comet. It shares the existing belief that Armageddon is likely to occur through man-made pollution or nuclear war.

Should we placidly accept that the present world-wide system of society— capitalism—will still exist in the twenty-second century? Will the natural competitive elements of a system dedicated to the exploitation of the planet’s resources for financial gain, and to the economic exploitation of the majority of people living on the planet, be suspended whilst global co-operation is exercised in finding some way of averting the threat to ruling class and working class alike?

The odds of a head-on collision with Comet Smith-Tuttle are calculated at 400 to 1. The odds on the world being destroyed by an “internal’’ agency rather than an external one must be considerably shorter. Contemplate the effect of another hundred years of a social system based upon production for profit, not need. A system where political and economic control rests with a small minority. A system where the majority are forced to sell their mental and physical labour power to that minority in order to live. A system where the increasing wealth created by the majority is appropriated by the minority.

Threat from down here
Although no-one now living aged one hundred years has ever experienced the effects of a major collision with the Earth of an extraterrestrial object, they would certainly have experienced several times over the effect of a capitalist crisis of over-production. The same edition of the Times that carried the report of Comet Smith-Tuttle. carried stories with a more contemporary significance. We learn that George Soros, an Hungarian-American financier made £589 million profit from Sterling speculation during ‘‘Black Wednesday”. There are reports covering the march through London of 200,000 workers in support of the redundant miners.

The protests and demonstrations by workers against the effect of yet another capitalist crisis of over-production are understandable but misplaced. Instead of agitating for a fair day's pay for a fair day’s work the working class should be engaged in political action with the object of abolishing the wages system completely. It must be obvious that the bumblings and blusterings of hypocritical politicians and “labour leaders’’ can no longer disguise the fact that they arc powerless to influence the actions of the market system.

Capitalism has run its course. The only question is how much longer the working class are prepared to see capitalism thrash about continuing to do untold harm to millions of workers. The working class has a choice. It can continue to choose to support a social system which brainwashes them, which bullies them, which suppresses them, which makes them homeless, which makes them hungry, which makes them poor, which exploits them and which kills them. Or the working class can choose to realize that we are many and they are few. It can choose to stop its own exploitation and decide to hasten the demise of capitalism and bring about a social system based upon common ownership of the means of production and distribution. The working class can choose to abolish poverty, abolish famine, abolish want, abolish lack of opportunity, abolish the wages system. abolish capitalism.

Without an understanding of the present social system and a desire to bring about the social changes needed if we are all to have a future, simply rioting in the streets will not bring about the social revolution required to implement real global cooperation. After bringing about, and winning, that revolution, the task of preventing a comet from colliding with, and destroying the world must surely be a simple task for a world which by then has known many years of working together to clear up the mess left by capitalism.

There is evidence that the dinosaurs, rulers of the Earth in their time, were made extinct when an asteroid collided with the Earth sixty-five million years ago. We are not dinosaurs, but the social system has become one. It needs to be made extinct. Human beings are the most highly evolved species which has ever inhabited this planet. It seems ludicrous and unlikely that we should allow capitalism, which long ago fulfilled its historical purpose, to continue to prevent us all from progressing toward a collective and individual potential which individuals in the past could only dream about.

Nemesis is not a comet named Smith-Tuttle. Nemesis is the world-wide working class deciding that capitalism has served its purpose and that the time has come to end capitalism now before capitalism has any more opportunities to put an end to us.

Dave Coggan

That was the annus that was (1993)

Illustration by George Meddemmen.

From the January 1993 issue of the Socialist Standard

We haven’t been reading papers like the Mail and the Telegraph all these years without getting to know that the Queen is a historically brilliant woman but, even so, it came as a bit of a shock to learn that, with all her other talents, she can speak Latin. Or at least she can make a rather feeble joke in Latin, complaining that for her 1992 was the Annus Horribilis (when it might have been the usual sort of Annus Mirabilis with lots of money being made for her, lots of sumptuous living and lots and lots of crazily adoring subjects cheering her).

Of course she still had all these things in 1992: what she was regretting was the exposure of her children's activities and relationships in a way which would not once have happened. But this is not 1936, with the press muzzling itself over Edward VIII dallying with Mrs Simpson; nowadays a fierce circulation war among the tabloids practically guarantees the quickest and most glaring exposure of any royal misbehaviour. And then a small bit of Windsor Castle caught fire which did not leave the Queen and the other Windsors exactly homeless but which might have been a public relations triumph until some rather nasty questions were asked about how much money the Queen has, and how many homes and whether she should pay to repair the Castle. But more about the royals later; at the moment we want to consider 1992 and just how horribilis or mirabilis it was and why and what about 1993 and the year after that and so on.

We should remember, first of all. that 1992 was supposed to be the Big One, the year "we" went into Europe, the year "we” joined the ERM as a start to solving "our” economic problems, the year “we" found a new prosperity by moving towards a single European currency. It was also the year when trifling difficulties like the recession, unemployment, bankruptcies, homelessness and increasing numbers of people losing "their" house because they can’t keep paying the mortgage would be solved at a stroke by a Tory election victory. In particular a Conservative win would be such a boost to business confidence that there would be a rush to invest huge amounts of money in industry, which would trigger off a stupendous boom and stimulate everlasting popularity for John Major and his government especially his Chancellor Norman Lamont.

Victory
During the election Major was quite clear about this. For example, at the beginning of April—just before votes were cast—he told fawning Jimmy Young (who else?) that economic recovery was already under way:

  We will not see the statistics to prove it until after the event but there is clear anecdotal evidence, clear survey evidence. that it has started.

Well, enough of the voters believed that to put Major and Lamont back in their homes in Downing Street and what is the situation now? Another kind of anecdotal evidence was provided by the Confederation of British Industry conference last November. This gathering was once a congratulatory jamboree for Tory ministers but this was 1992, the Annus Mirabilis turned Horribilis. One speaker after another blamed the government for the slump (which shows that ignorance about how capitalism works, and why, is not confined to the working class) and complained bitterly about falling profits and investment and mounting bankruptcies. One speaker thought it a criminal matter:

  If the (Conservatives) election manifesto had been a company manifesto it would have landed the entire Cabinet in jail.

The government’s response to this kind of assault is as predictable as it is feeble. Last September on Sky News, Major had some explaining to do about the financial crisis which threw the government into such desperate chaos, putting interest rates up and down several times in the same day and then abruptly taking sterling out of the ERM after they had been telling us for so long that keeping it in the ERM was the only way to save it as an international currency. Major said that the government had been “overwhelmed by circumstances that neither Mr Lamont nor anybody else foresaw or could have dealt with”. This is hardly good enough since Lamont, when it suits him. claims to be able to foresee circumstances—famously he once told us all about noticing the "first green shoots of recovery" and he has by now pretty well exhausted his stock of metaphors in making the same claim. Nor is it good enough for Major to tell as that “what actually happened was an irrational market movement of a size we have not seen before" because the Tories won power in 1979 on a programme based on the assumption that the market is the rational force in society which, left to itself, will sort out all economic problems. In fact the Tories never seriously adopted that policy; the latest proof of this is their intention to intrude in the labour market by trying to hold pay rises in public sector employment below 1.5 percent.

Rainbow
On the matter of economic forecasts and a Chancellor’s ability to control events, Norman Lamont has recently revealed the true limits of his talents to some obviously sceptical journalists:

  What you seem to be asking me is “Why don’t I press some button and the world will change overnight and we will look up and see a rainbow in the sky". I’m afraid that it just isn’t like that and there aren’t these buttons to press.

Well rainbows make a nice change from green shoots as metaphorical portents of economic boom but the message is the same: the experts who say they can control capitalism can’t do it. If their luck is in and they are in office during a boom they may take the credit for it and so become famously popular. If things go the other way they have a rather different attitude; they don’t accept any blame but pass it on to unforeseeable difficulties, or the underhand machinations of foreigners or intractably greedy workers . . . One whose luck seemed to be in, and for a long time, was Nigel Lawson but even he has little cheer to offer Lamont. even he thinks now that Chancellors can’t make any promises:

  I misjudged the strength of the boom. The official forecasts were all over the place . . .  there was this enormous climate of optimism . . .  on the whole a good thing, much better than pessimism, much better than gloom. But again things went too far. (To Terry Coleman. Guardian, 7 November).

So Lamont is the Chancellor for whom the bad things have gone too far and Lawson was the Chancellor for whom the good things went too far. This makes sense only when we realize that capitalism makes impotent all the experts, the economists, the politicians. It works—as it worked in 1992—to its own laws and to satisfy its own needs regardless of what Chancellors do or plan to do, regardless of whether they see green shoots or rainbows or other mirages.

Royal misbehaviour
At times of crisis—if it is appropriate to use such a word about capitalism's never-ending upheavals—the system’s figureheads come into their own, reassuring everyone that, no matter what evidence is before their eyes, all is well. In Britain at such times the royal family are expected to be more prominent, to make even more meaningless speeches, to force their company onto even more distressed people. The message is that, no matter how severe their suffering as loyal, patriotic British workers they will pull through. At least that is the ideal. Our difficulty now is that unemployed people, struggling along on state benefit, are not taking too kindly to hearing this sort of cant from a woman whose personal wealth amounts to anything between £50 million and £6 billion. No-one is exactly sure about the true figure. And then there is the embarrassing fact that recently the royals have been neglecting a most important part of their job—setting an example to the rest of us in the lower orders of society.

As their marriages collapse one after the other under the spotlight of some triumphantly scurrilous press coverage, it is blindingly apparent that this family’s supposed position as guardians of the repressions of Christian marriage—which is bad enough as it is—is pure humbug. After all, the royals are paid a lot of money to do the job of telling the rest of us to be docile, unquestioning subjects of capitalism, by not being sexual adventurers, by not having unstable marriages and by not getting divorced. To some extent the royal conditions of employment can be breached and the media bludgeoned into ignoring it. But the 1990s' Windsors have simply overwhelmed the customary official concealment of their misbehaviour. So they have had a very bad press; even the fire at Windsor didn’t help, raising more inconvenient questions about the extent of royal wealth and how it contrasts to working class hardship. If 1992 was a horrible year for the Queen it was because so many of the delusions on which her position depends became under such intense and hostile questioning.

Poverty
It is ironic that so many of those delusions fester so powerfully among the class whose suffering should compel them to deal only in reality. Unlike Lamont's forecasts, one which is well on the way to being realized is Shelter's estimate in December 1991 that over the next five years more than a million families would become homeless. At that time Shelter said there were nearly 3,000 people sleeping rough and 55,300 households in temporary accommodation. By June 1992 the figure for Greater London alone was nearly 43,000 representing over 100,000 people—an increase of 12 percent over the year. Shelter's director recently described what this means:

  . . . families in bed and breakfast are forced to live in often overcrowded, usually depressing and sometimes downright dangerous hotels for anything up to two years. Imagine what it must be like to have no privacy, for your children to have nowhere to run and play, to have to share a bathroom with an average of 16 other people and a cooker with 21.

It is not just the homeless who are destitute. In 1989—the last year for which official figures are available—12 million people were living below a poverty line of half the average income; by now. as unemployment gets worse, that figure will be much higher. And what does this do to human relationships, so often fragile anyway in capitalist society? The NSPCC lists unemployment and family debt as key causes of child abuse; Relate, the marriage counselling service, calls it all “devastating". Especially poignant is the fact that unemployment is now hitting those areas in which one seemed relatively safe from it, while Tory MPs sat on Gibraltar-like majorities. Among the leafy towns of the South-East and the Home Counties a bitter lesson is being taught—that economic booms are not everlasting, that workers who experience a brief, relative prosperity do not do so through their own ingenuity but because capitalism is then operating in such a way as to allow it.

The hopes that 1992 was to be an Annus Mirabilis were based on misconceptions encouraged by deliberate deceit. It has turned out to be a typical year, in which a huge burden of misery and fear has fallen on an enormous number of people. For those who understand capitalism, as a year it came up to expectations. So what about the New Year? It could see the start of serious work for a society free of delusions—a society without classes and their representatives whether royal or political. We don't need aristocrats and political confidence tricksters to run the world; we can do it ourselves for ourselves. And. yes, we can do it now. In 1993.

Ivan

Greasy Pole: No More Mister Nice Guy (1996)

The Greasy Pole column from the January 1996 issue of the Socialist Standard

Like watching the sun rise, inch by inch, beyond a distant hill the idea is beginning to dawn that John Major is not, after all, the Very Nice Man he was once supposed to be. Not the simple, relaxed chap you’re pleased to have a chat with over the garden fence or a pint with at the local. Not the concerned family man with the homely wife and the nice kids who do well at school and who are always polite and respectful.

When Major first got the job of Prime Minister, after the men in grey suits had done their duty over Thatcher, it soon became apparent that his background was so obscured as to defeat the most penetrative of media hacks. We were told he came from Brixton, in those innocent days before it gained a reputation for hyperactive police and hyper-reactive rioters. He went to grammar school locally and then failed to become a London Transport bus conductor, which did not seem to have affected his later career at a bank, where he mysteriously scaled the promotion ladder. This must have stood him in good stead when he began to claw his way up the greasy pole of politics, from the local Young Conservatives to MP, to junior minister to Foreign Secretary, Chancellor of the Exchequer and Prime Minister.

This was highly unsatisfactory to all those frantically excavating hacks. They could not exhume anything like a scandal about Major, except for still-born stories about a long past relationship with an older woman and a non-existent extramarital affair. Meanwhile Major made soothing declarations about the desire to build a classless society and to lead a nation at ease with itself. A bewildered population began to ask itself whether it could be true: were we about to be governed by a Very Nice Man?

Well, Major himself has answered that question, with evidence that he is as ruthless a political operator as he needs to be. He may lack some of the skills required for this—for example he has not mastered Harold Wilson's knack of never completely leaving all his boats burned—but he is trying hard. Any problem which attracts publicity is explained away as if the past sixteen years had been spent under some other party in government. If necessary ministers who get in trouble are sacked, after an initial period when Major ritually declares they have his complete support.

Poll Tax debacle
This would have been a shock only to those who had failed to appreciate the steely edge of Major's ambition. For example, when Thatcher was confronted with the ominous result of the first leadership ballot in 1990 she turned to the two most powerful people in her cabinet—Douglas Hurd at the Foreign Office and Major at the Exchequer—for support in the second ballot. Hurd agreed, according to Thatcher, "at once and with good grace”. But Major was different. This was the man clearly chosen byThatcher as her eventual successor; it might even be said that he owed it all to her. How did he respond to her, in her hour of need?

  “I asked John to second my nomination. There was a moment's silence. The hesitation was palpable . . . Then he said that if that was what I wanted, yes. Later, when urging my supporters to vote for John for the leadership, I made play of the fact that he did not hesitate. But both of us knew otherwise" (The Downing Street Years).

There are other examples of Major’s careful duplicity. As Financial Secretary to the Treasury and later as Chancellor of the Exchequer he was closely identified with the Poll Tax. From the outset this was a very unpopular measure; multitudes of workers saw it as a blatant attack on their incomes and they showed how they felt with their votes.

It was only when Thatcher had gone and the fact that the Poll Tax was a monumental vote-loser became obvious to all but the most stubborn or stupid of Tories that Major changed his line. During his campaign for the Conservative leadership—and this was partly to undermine Heseltine’s appeal—he promised to review the tax, which really meant to abolish it. It was as if he had never supported it in the first place, just as if the whole mess was someone else’s fault.

Lucky Lamont
That was how it was again over the issue of sterling and the Exchange Rate Mechanism. Again, Major was a supporter of this policy, arguing that it would result in lower interest rates, a stable exchange rate for sterling—and so a big political advantage for the Tories.

Well it didn’t turn out like that and it all came to an end on that September day when interest rates were raised three times within a few hours and the Chancellor of the Exchequer wearily told the assembled media in Downing Street that sterling had been withdrawn from the ERM.

This withdrawal was, apparently, in order to achieve the very conditions which membership of the ERM was to bring in the first place. It was such an abject collapse of a policy that it might even have persuaded some politician—the Chancellor, the Prime Minister—to confess their impotence to control capitalism and fall on their political sword. What happened was that Norman Lamont, who was Major’s choice as Chancellor, took all the blame. He it was who stood mumbling into the microphone in Downing Street and he, some time later, who was sacked by Major. Again, it was almost as if the policies had nothing to do with Major. Not surprisingly, Lamont now sulks on the back benches, sniping at Major’s Teflon-coated image.

So far Major has got away with such breathtaking betrayals of what he claimed were his principles. If the day comes when he is finally, unavoidably, exposed as yet another political trickster we may be sure that we shall be encouraged to believe it matters whether our leaders are nice or nasty. We will be told we can really have a classless society, at ease with itself, if only we have a nice, unassuming, sensible person in charge at Number Ten. When that happens we should remember the cynical, disreputable history of capitalism of which John Major is a part.

Ivan

Capitalism Moves Into Recession. (1990)

From the December 1990 issue of the Socialist Standard

What the media call the "recession" in Britain today provides a classic example of a capitalist crisis. The City yuppies have been surprised by a supply that is exceeding demand to the point that it is provoking a decline in orders and cutbacks in production. The sales slump is giving the economic crisis an unstoppable momentum: reductions in production, investment and employment.

This should be no surprise. Crises of overproduction and a reserve army of the unemployed are integral to the capitalist system. They are not only the consequences but also the necessary conditions of capitalism's existence.

Think back to the early 1980s. An increased intensity of labour and new technology were easily imposed on workers severely weakened by the high unemployment levels of the previous crisis of 1980-82. We are well aware of what this meant for workers in the years of Thatcher's so-called "economic miracle". There was a general frenzy of activity for people in work as the rate of exploitation increased. This went hand-in-hand with the introduction of computers into the office and robotics into manufacturing industry.

The result of this frenzy was a marked increase in the average productivity of workers. A general rise in productivity means a fall in the unit value of all commodities: more of them can be produced in the same period of time so each is worth less. This is disguised by inflation, but a price calculation in hours of labour-time soon reveals the real fall in value.

The sharp economic downturn that we are now facing is the point of overproduction, the sudden failure in the balance of supply and demand that triggers the process in which prices are brought into line with values. In other words, the crisis is imposing the new, lower values that have resulted from rises in productivity on those commodities, particularly fixed capital, produced under previous conditions. The result is losses for the capitalists and unemployment for the workers.

Falling values and the tendency to capital losses are manifested in the unprecedented levels of bankruptcy for small and over-borrowed businesses. “More than 16,500 companies collapsed between January and the end of September 1990", a third more than the previous year (Guardian, 28 September).

Credit boom
The economists in the service of capitalism examine only the surface phenomena of economic activity in the search for explanations of the crisis. The financial pages of the press blame individuals: Nigel Lawson, for one. They blame the banks and building societies for their high levels of lending. They blame workers for pushing for higher wages. But all these things are effects not causes.

The underlying cause, the imbalance between supply and demand, came first. The current crisis, like every crisis of capitalism, is one of overproduction with regard to markets. But until recently it has been concealed by credit. As Marx put it, capitalism

  permits an actual free development only up to a certain point, so that in fact it constitutes an immanent barrier and fetter to production, which are constantly broken through by the credit system. (Capital, Vol III, chapter 27).

Despite all the talk about "tight monetary policy", the crisis has been delayed by neo-Keynsian recovery techniques: that is. by the Bank of England printing money for the clearing banks to lend. And the price of applying this technique is now, as it always was when overtly Keynsian, rising inflation.

For a while the Thatcher government managed to put off the inevitable, allowing inflation to rise. But the crunch had to come because high inflation cannot be sustained forever. For a start, when domestic demand is inflated by credit, imports rise as well, causing a trade deficit. This deficit puts downward pressure on the currency, necessitating high interest rates to hold off its complete collapse. But, on the other hand, a fall in consumer spending cannot be tolerated by industry because of its already high debt burden.

Exchange rate mechanism

Entry into the European Exchange Rate Mechanism (ERM) is an attempt to break out of this vicious circle. Thatcher hopes to give flagging businesses a quick fix before the general election without triggering a fall in the value of sterling. At the time of writing there has already been an interest rate cut.

Meanwhile, workers will pay the price of this quick fix. The ERM means that exports can no longer be protected from foreign competition by a devalued pound. John Major has already told workers to shoulder capitalism's problems by taking wage cuts if they want to keep their jobs. The President of the Bundesbank, Karl Otto Pohl, has given an ominous warning:

  A country with an inflation rate three times as high as Germany's cannot link its currency to the Deutschmark without mass unemployment and enormous payments problems . . .  It is very important, and not always understood, that monetary union means doing away with the exchange rate as a corrective to divergent economic developments. (Observer, 23 September).

Entry into the ERM is the policy of both the Tory and Labour parties. It marks a cynical attempt to squeeze more productivity out of workers. It will achieve this by throwing thousands of workers on to the dole queue. Employers will again impose an increased intensity of labour on the remaining workforce weakened by the threat of unemployment. And here we go again!

Are we going to suffer another ten year's frenzy of activity only to find that cut-backs and unemployment are the reward for higher productivity? Do we have to go through the whole predictable cycle again?

Socialists say emphatically no. Socialism offers the means of escape from the tyranny of the market. It offers a society in which all work according to our abilities for the common good. We will all take according to our needs. Goods and services will be produced solely for use, not profit. The capitalist barrier and fetter need never stand in our way again.

John Dunn