The economic crisis is not a product of mysterious ‘irrational exuberance’, nor of this or that government policy, but an inevitable product of capitalism’s inherent laws. This particular crisis expresses the dead end that capitalism has become, and is increasingly being reflected by tensions within the Tories – the party of the capitalist class. Daniel Morley looks at the latest economic figures and maneouvres inside the Tory Party.
Socialist Appeal has long pointed out that the economic crisis is not a product of mysterious ‘irrational exuberance’, nor of this or that government policy. The economic crisis is an inevitable product of capitalism’s inherent laws. This particular crisis expresses the dead end that capitalism has become. Our position has been confirmed by the dire economic statistics released yesterday, 12th March 2013, which underline both the special, long term crisis of British capitalism, and the fact that the present crisis is the worst in capitalism’s history.
Contrary to the government’s unfounded optimism, manufacturing data for January show a significant decline, not growth. Thanks in particular to declines in pharmaceuticals and building materials (the latter no doubt affected by big cuts to government spending), manufacturing as a whole shrunk by 1.5% over the month and is now 3% lower than a year ago.
In general industrial investment and production is the key to the viability of the capitalist economic system, hence the relative strength of the German and Chinese economies. But these figures shatter the government’s ‘rebalancing’ to industrial production and exports – in fact, exports declined 2.5% in January. This is now by far the longest period recession and stagnation – in reality depression – in British history. But the severity of the crisis does not imply a healthier and more exuberant recovery. These figures show that we are on the verge of our first ever ‘triple dip’ recession, and ordinary people are facing literally decades of increasing austerity under capitalism.
The shock of these figures also led to a big fall in the strength of the pound, which in 2013 has lost 8.6% against the dollar.
It has also emerged that in the past three months net lending in the British economy has fallen by £2.5bn, on top of a fall of £1.5bn in the six months prior to that. This utterly discredits those bourgeois economists who, in their desperation, have imagined that an excessively loose monetary policy year after year, including the increasingly dangerous ‘quantitative easing’ (printing of money), can kickstart economic expansion. Despite their efforts, lending is falling and economic activity declining.
The reason is obvious: a worldwide crisis of overproduction presaged by unprecedented debt levels. There is no demand for more credit by British capitalists because there is no demand for the commodities they sell. There is a global slump in demand, as falling exports and manufacturing data show. This is thanks in general to the fact that capitalists the world over necessarily exploit the working class, thus restricting their purchasing power, and in particular to the extremely heavy debt burden already piled up on workers’ shoulders.
Tensions in the Tory Party
All of this is eating away at the Conservative-led government, which gets weaker from month to month. The Eastleigh by-election was one of the worst results in recent Tory history; not because they came third, but because they managed to come behind the Lib Dems and UKIP! This came hot on the heels of their shocking showing in the Middlesbrough and Rotherham by-elections in late 2012, in which the Tories came fourth and fifth respectively.
Because the Conservative Party has to carry out its austerity crusade on behalf of the bourgeoisie, it is incapable of doing anything to reverse its dramatic decline in support. The long-term decline of Toryism’s social basis since Thatcher is in inverse proportion to its pandering to reactionary bigotry on the fringes, just like the US Republicans are obliged to lean upon the ‘Tea Party’.
There is an illusion within and outside of the Conservative Party that the road to popularity is paved with racist and homophobic drivel. The relative success of UKIP is held up as proof of this. And yet, in the latest national polls, UKIP support has fallen from 9% to 7%, despite their endless publicity. The same poll showed that almost 50% more people think those on benefits are simply unlucky victims rather than lazy and that a similar proportion believe the youth will be poorer than their parents. Labour are consistently ahead in the polls in spite of the Miliband leadership, not thanks to it.
Nevertheless, the Tories have nowhere else to go. They cannot abandon austerity, not only because they’ve based their entire government on it, but because international capitalism demands it. Instead, the party constantly lulls itself into the absurd delusion that its unpopularity is because it is too ‘left wing’! It has abandoned core Conservative values, it must increase austerity and ban gay marriage! Only a true-blue Tory can rescue their fortunes! To this deranged rallying cry, up steps the bold, heroic and massively popular figure of…Theresa May!
Yes, that’s right. The backbenchers of the Conservative Party, in their infinite wisdom, have threatened David Cameron with a leadership contest should the March budget and May local elections go badly for the Tories, which judging by the polls and recent elections, they certainly will. The Home Secretary Theresa May is attempting to establish herself as the darling of the Tory right. She panders to them with reactionary rubbish about scrapping the European Convention on Human Rights (see article) and forcing immigrants to pay a ‘cash bond’ for the pleasure of having the chance to be super-exploited on these shores.
The obvious fact, which sooner or later may penetrate the thick skulls of these Tory MPs – that a mid-term ‘regicide’ in favour of an even more reactionary leader is not exactly a recipe for political strength and stability – probably discounts the likelihood of such a blunder. But it cannot be ruled out.
Europe’s most successful and stable bourgeois party is in danger of forfeiting this title and joining the ranks of fractured bourgeois parties on the continent. There is even the realistic possibility of a sizeable split in the party, with a large chunk leaving to join UKIP. This would massively destabilise Britain’s bourgeois democracy.
The fact that the bourgeoisie no longer has a firm control of their own party as in the past is extremely telling of the wider crisis of British capitalism. The ongoing and deepening recession, the worst in our history, will lead to cracks if not outright splits in the Conservative Party in the future. The bourgeoisie will be unable to govern with any strength. This presents a fantastic opportunity for the working class.
The leaders of the labour movement must recognise the fact that this government is actually incredibly weak, and will only get weaker. There is no support for austerity. It is time to take up the militant fight against austerity and force the government from office, and to replace it with a Labour government on a socialist programme of ending austerity by nationalising the economy’s commanding heights.
