Economy

A recent study on tax evasion and inequality has revealed just how much of the top 0.01%’s fortunes is hidden away in foreign bank accounts. This clearly shows how the capitalist system has reached a dead end. These injustices and inequalities can only be abolished through socialist revolution.

Buoyed by statistics showing growth in many key countries, capitalist commentators are once again optimistically predicting that “green shoots of recovery” are blossoming for the world economy. But with this empirical attitude comes an incredible hubris – for none of the fundamental contradictions have been resolved. The system remains riddled with crisis.

When Boris Johnson recently promised to “make a titanic success” of Brexit, it is unlikely that he realised at the time just how apt his choice of words was. With the Philip Hammond, the Tory Chancellor, yesterday predicting slower growth and a £122bn hole in the government’s finances as a result of Britain’s forthcoming departure from the EU, it is clear that the UK economy is heading for an iceberg.

Only a few short years ago it seemed that the tech market could do no wrong. Whatever problems the rest of world capitalism faced, the tech industries looked to be moving from success to success, with ever-larger profits each year. But, as Steve Jones (not Jobs) reports, the major technology firms – such as Apple – are now facing an increasingly uncertain future.

The spectre of Lehman Brothers is haunting Europe. Last week, on Monday 26th September, the price of shares in Deutsche bank, Germany’s largest lender, slumped to its lowest level since 1983. A slump of this magnitude in the shares of one of Europe’s biggest banks has dire implications, not only for the eurozone, but for the world economy as a whole.

Following the shock of the Brexit vote, Britain has now joined the centre of the world crisis of capitalism. Already in a fragile state, confidence in the British economy has plummeted, prompting the Bank of England to intervene. However with the world economy still in deep crisis, the Bank’s measures will be like trying to stick a plaster over a gaping wound.

All the focus around Osborne’s latest Budget announcement was on the dire forecasts for the state of the UK economy, signalling that growth is slowing and years of austerity lie ahead. Rather than committing Labour to a clear anti-austerity programme of socialist policies, however, McDonnell is pledging to balance the books.

The world’s stock markets have fallen by over 10% in a matter of weeks. Some markets have not seen such falls since 1929. The Royal Bank of Scotland, Rob Sewell – editor of Socialist Appeal – reports, have warned that 2016 will be a “cataclysmic year”.

George Osborne, the Tory chancellor, who only six weeks ago was boasting about the strength of the British economy, has now had to issue a bleak warning for the coming year. A culmination of weakening world growth, plummeting oil prices, and a sharp slowdown in China, amongst other things, has blown Osborne’s economic predictions out of the water.

It is now over seven years since the beginning of the crisis, and there is still no end in sight. Talk of recovery is a sick joke at best, and deluded at worst. The reality is that a new – deeper – phase in the world crisis of capitalism is opening up.