From the November 2017 issue of the Socialist Standard
Monday 2 October, 8.00am: 2,100 Monarch Airlines staff woke up to learn on BBC News that they had no job. Monarch had maintained complete secrecy until midnight on Sunday when the final rescue deadline expired with the Civil Aviation Authority and the company went into administration. Monarch destroyed thousands of holidays, and two thousand working lives, with zero notice and zero decency. But mass redundancies aren't always so brutal. Sometimes they are done on the sly.
Things seemed to be looking up recently in my area when a long-derelict piece of ground overgrown with scrubby weeds was invaded by a small army of diggers and 'dozers and men in hard hats and neat stacking portacabins. The recession was over, this hive of sudden activity seemed to say. Banks must be investing again. Capitalism is moving out of slump towards its boom phase.
As if to confirm the excitement, there was around the same time a flurry of mail through the door offering credit cards sweetened with zero-interest loan periods. What did it all mean? Where was all this new cash coming from?
But this isn't new cash, it's old cash that's been in hiding. Recessions aren't times of no money, they are times when the people who have money don't want to lend it. Idle money may not earn them anything, but with firms going bust every day the risk of not getting their money back is just too great. Nor is there any incentive to lend, because the central bank will have floored the interest rate in order to keep people spending and borrowing and thus keep the economy moving. But it's a Catch 22, because the same trick also means that nobody wants to lend.
In a recession businesses can't get loans so they go to the wall, sometimes taking whole supplier networks with them, while new businesses can't start up. To people on the street with nothing but fluff in their pockets and negative figures in their bank accounts, it will look as if there is no money anywhere, as if it's all mysteriously vanished into some cosmic black hole. Which in a way is true. The banks have sucked all the money out of the system and are sitting on huge piles of it, stashed away in their credit ledgers.
Eventually things change, if only because things can't stay that way forever. People with money need to lend almost as much as the rest of us need to breathe. They dare to become confident again, or at least their venality finally overcomes their caution. The economic lights turn from red to amber. The green light is coming, and engines start to rev.
Looking back on the start of the recession is like looking at an elephants' graveyard, a mass culling of under-financed and over-exposed businesses including the shock collapse of seemingly-invulnerable giants. In this late period one might still see the odd outlier like Monarch, but mostly it's a long tail of rasping last gasps drawn by small and medium businesses which had somehow hung on grimly under the radar and, cruelly, started to believe they were going to make it.
Death of a company
You don't hear about these small deaths because they don't reach the news. Their passing is marked by barely noticeable details. Boards go up, tombstone-like, across windows which yesterday were alive with deals and special offers. Workers in a car park manoeuvre large numbers of used office desks and other furniture into a removal van. A skip is piled high with rain-soaked office jumble: filing shelves, brochure containers, birthday cards and old Christmas decorations.
As in nature, businesses don't necessarily enjoy a serene passing. Smelling blood, the sharks close in, and there is a feeding frenzy of takeovers, asset-stripping and closures. It is a wonderful chance for those with money to pick up plant, equipment, patents, licences and customer databases, all at rock-bottom prices.
Cannibalising a company is not straightforward though, and buyers must be careful to step gingerly through the regulations, known as TUPE, which relate to takeovers. Specifically, you are not allowed to buy a company and immediately sack its workforce, because you will be successfully sued at a tribunal for unfair dismissal. Neither can you get around this by offering, or appearing to offer, similar employment in some distant city, as this will fall foul of the rules around constructive dismissal.
Instead, the clever thing to do is to buy the company and tell the nervous staff that you have no idea what you plan to do. You issue a 'Letter of Measures' which includes an innocuous clause suggesting that 'some redundancies' may not be ruled out. You then embark on a period of 'Consultation' with the staff in order, supposedly, to determine the best way forward for their company. You encourage them to open up honestly about systemic problems in the company and when they do, you are all ears and sympathy. You want to find solutions. You are here to help. If staff want to know what the future holds, you answer helplessly that nobody can predict how the Consultation will turn out. If staff are tempted to desert the company before you are ready to let them, you encourage them to stay and assure them that there is no reason to fear the worst. You beg them for the sake of everyone's future to maintain business confidentiality and not divulge any information to business associates, or even to their friends. You maintain an impenetrable air of fairness and open-handedness.
When the consultation period is over you can announce 100 percent redundancies, citing systemic problems and confident that you have followed TUPE procedures to the letter if not the spirit. The devastated staff know that they do not have a legal leg to stand on. However you are still not in the clear, because you now have to abide by Part IV, Chapter II of the Trade Union and Labour Relations (Consolidation) Act 1992, which stipulates that you must represent your intention to close the business as a 'proposal' and allow a further minimum 30 days for more 'Consultation' with the staff. You duly do this, inviting the staff as per regulation to come forward with any alternative suggestions (e.g. not getting sacked) which they may be able to come up with. Of course you have no intention of seriously considering these suggestions and when they materialise, you destroy them comprehensively by any means necessary including using financial data which is confidential to the business and to which the staff have no access. The proposed closure is at this point a 'proposal' in name only, a fact evident to everybody but which you must continue to deny at every point. With no other recourse, the staff sit at their desks pretending to work and await the inevitable. When the staff fail to produce any further suggestions to avoid their fate, you can regretfully proceed with the closure. The staff have had every opportunity. Procedures have been followed. No chance of ACAS becoming involved.
Working lives trashed
When the bottom line demands it working lives get trashed, either brutally and all at once, or slyly and through a prolonged pantomime of consultations. Workers ought to understand this and some do but somehow many don't. Instead they insist on believing in decency and fair play, not realising that these are only found among the working class and in fairy tales but not in business or among the rich. First comes the hope, then the shock, then the bitterness. Too late comes the cynicism.
But the knife twist is worse than this, if one considers how the business came to fail in the first place. Like the captain of a ship who runs it aground or into an iceberg, the boss of a company may refuse to take good advice from their officers and crew. Such bosses, emotionally attached to their own authority and deeply distrustful of those around them, may refuse to delegate and attempt to micro-manage every part of the business until, exhausted and unable to tell good decision from bad, they make a final and fatal error. The 'wisdom of crowds' is not a concept understood by bosses. Democracy is anathema in business and reviled as 'mob rule'. So even when the enterprise is sinking the workers are kept in the dark for reasons of confidentiality, to maintain authority and to avoid early desertions. They are victims of capitalism's obsession with hierarchies, in which pecking orders matter more than rational decision-making and corporate status alone decides whether a worker has a voice.
So the ship goes down and the workers then discover, if they didn't know it already, that debt is an ocean it's easy to drown in. They flounder in this ocean, holding their families up and trying to hail passing boats, but the boats are all full or not looking in their direction. If a boat approaches with a spare seat, there's no question of being automatically hauled on board. Instead, the worker must go through the interview process. Why this boat, and not some other boat? What can you bring to this boat? Are your skills a match for what this boat needs? Why should we rescue you and not someone else? Describe a situation where you helped a boat row faster. Describe a problem involving boats which you solved. The worker concentrates hard on playing the game and giving the clever answers while trying to tread water and look cheerful. Nobody wants you when you're desperate.
And that is not even the final twist, which is that the boss has meanwhile got a handsome pay-out by the takeover company and an executive job on their board. When the captain of the Costa Concordia ran his ship aground in 2012 and fled before bothering to see his passengers safe, he got 16 years in jail. When similar things happen in business nobody thinks anything about it. It's nothing personal. It's just business.
Gradually the global recession lifts. New companies start up and new job opportunities will appear. Eventually a new generation of wage workers will also appear to fill these posts, brought up to aspire to better things than their parents had, but inevitably facing all the same groans and gripes and office politics that wage slavery engenders. And they will persist in the cruel delusion of their forebears, that if you work hard for a company, the company will work hard for you, and that if you defend capitalist society, that society will defend you. One would like to think that workers can learn from their mistakes, but some never recover from the experience of being scrapped like a rusty hulk, and sink into the murky depths of self-worthlessness and nihilism.
Some workers do get over it though. Maybe they talk to other people, maybe they just figure it out for themselves, but they understand where the real blame lies. Underneath the corporate courtesies and the glossy paintwork is a submarine class war that's as deep as it is dirty, a war that could not exist if all the oceans of power and money were drained right out of the world. Those workers know that the class war is being won today by the bosses because workers don't even realise they're in a fight. And they also know that doing nothing about the class war is the same as giving in.
That's why there are socialists in the world.