Capitalism isn't working, and workers must find their own solution – or go down with it.

Marx was right!

WORKERS, JUNE 2008 ISSUE

So long as we were able to kid ourselves that capitalism was working, however cruelly, and would see us out, we could avoid the hard intellectual task of trying to understand how it all works. Now it clearly doesn't, so we have to try and do for our time what Marx did for his.

Marx's understanding of capitalism grew from his experience of living and working in Britain, the world's first industrial manufacturing and capitalist economy. Similarly, communists have to understand what is happening now and challenge all the received wisdom – judgement is by results not by proclaimed intentions.

Marx's basic principles still apply. The employer never lets up, even where workers choose to stop resisting. The employer always tries to get more for less – intensification of work – which used to be called "speed-up", and more household members have to work to survive. In the 1930s, there was often just one breadwinner. Now a household needs at least two workers to keep going, and increasingly the next generation lives at home, trying to find work or working for nothing or for a pittance. Household debts, just like local authority debts, company debts, government debts and trade deficits, keep growing.

Mass immigration means they have no need to reproduce labour power here – no need for a home-grown British working class. They'd let our class rot and import another one already educated and keen to work for less. The government maintains the EU's dogma of unrestrained immigration, whatever the consequences, whether we like it or not. The government talks of a future population of 70 million – is this what we want? And if immigration is not controlled, the number could be 80 million or 100 million. Is there really no sensible limit? And even this device for increasing profits has not prevented the crisis we see today.

Take responsibility
We must take responsibility for our land and for the size of our population. If we don't care for our land and our people, who will? The days of Empire, when we could migrate into other peoples' countries without their consent, are over.

Is manufacturing really the wealth-producing base, or can finance capital save us, as Thatcher, Blair, Livingstone and now Brown propose? Why has London become once more the financial capital of the world? Where does Canary Wharf come from? Are we already in a "post-industrial" world, as so many parrot? Surely, if there were no industry at all, we could not still be alive. If we were producing no goods, how could we continue to consume?

Unite pickets at Ineos in April: they showed that workers can win – and that capital never accumulates enough profit for the capitalists Photo: Workers

They tell us that property is the way to escape debt and dependency. But Inside Track, the biggest buy-to-let company, crashed in April. It spearheaded the buy-to-let scam, promising to show customers "how you could give up work and be a property millionaire instead". Now buy-to-let mortgages dry up as British new-build flats, Spanish apartments and Florida homes all lose value, Spanish apartments by 30 per cent. Housing starts in Britain fell by a quarter between January and March this year. As Workers has said, "Financial services – not so much an industry, more a short-cut to debt and dependency'" The drive for profit by those parts of the capitalist class who own and control the finance companies is responsible for that debt and dependency, urged on by the successive governments who serve them.

We are told that there is a "credit crunch" because of the US housing sub-prime market collapse. Workers in September 2007 called capitalism itself "A sub-prime system". Sub-prime means banks parcelling up bad debts with good. But this is nothing new. In the early 1990s, the IMF's Brady Plan repackaged developing countries' debts as collateralised tradeable bonds, privatising debt ownership, so venture (vulture, hedge fund) capitalists could buy debts and then sue for full, immediate repayment.

For example, in 1996 a company called Elliott Associates bought from the IMF $20 million of Peru's debt for $11 million; it then sued Peru's government and won $58 million, a cool $47 million profit. They have pulled the same trick in Panama, Poland, Turkmenistan, Ecuador, Ivory Coast and the Democratic Republic of Congo.

Debt rescheduling means capital bondage. The peoples of Asia, Africa and Latin America pay $5 in debt repayment for every dollar of aid their governments receive. Under finance capital's rule, one billion people only get a dollar a day, whereas every cow in the EU gets $2 in subsidies. For every $1 the US taxpayer gives to the international financial institutions, US companies get $2 in bank-financed procurement contracts. For every $1 going into developing countries (investment, aid, grants), $2 come out to service debts. Since the mid-1960s, $22 billion a year has gone from the developing countries to the capitalist classes in the USA and the EU.

The capitalist classes designed the World Bank and the IMF to benefit themselves and to harm the working class, to defeat economic rivals, like East Asia's developing states, to try to destroy Russia and flatten Africa. Capitalism's regional Free Trade Agreements, like the EU's, threaten state sovereignty, workers' rights, local cultures, and render meaningless all forms of democracy and representative government since decisions are actually being made elsewhere.

The government tells us three million British jobs depend on the EU, because they produce the goods we export to the EU. But there is another side to the story. Our imports from the EU are 21% more than our exports. (In 2007 our trade deficit with the EU was a record £40 billion.) So if the exports create three million jobs, then the imports must be destroying 3.6 million jobs. So we make a net loss from the EU of 600,000 British jobs.

EU rule
This EU rule is not legitimate. We have not consented to it, either by majority participation in EU elections, or by participating in drafting the EU Constitution, or by freely ratifying that Constitution. The Constitution has neither the explicit nor even the tacit consent of the majority of British citizens, so the government acted illegitimately when it ratified the Constitution.

The government's arguments against holding a referendum on the Constitution are arguments against democracy. To refuse a referendum on the issue of increasing EU integration, on which all the parliamentary parties promised a referendum, is to attack democracy. The government opposes a referendum because it fears and opposes the people. We are for real democracy not for parliamentary democracy, where, in theory, the people rule, but then the state overrules and does what the capitalist minority wants.

We said the bubble would burst, and now it has. And they mean for workers to pay. The government says the answer is to squeeze public sector pay, 2.5 per cent rises for the next five years, when inflation, even on official figures, is 4 per cent and rising. People are voting against increasing exploitation, lower wages, rising living costs, Post Office closures, and the attack on pensions, against government arrogance, dishonesty, corruption, spin and denial of reality. People vote against one lot of rascals or the other, usually to get shot of the rascals in office when their corruption becomes intolerable. But it is not enough just to kick the rascals out every five, ten or fifteen years.

We workers have to find a way ourselves to run and rebuild Britain or else capitalism will pull us down with itself, starve us out and hope to find someone else to exploit. We have to find a way, and it starts with class thinking and struggle.

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