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  • Published in Opinion
The next stock market crash. Graphic: Pixabay/Gerait

The next stock market crash. Graphic: Pixabay/Gerait

Finance capital is a game for the rich and when it goes wrong it's our side who are expected to pay the price, argues Lindsey German

Exactly 10 years on from the financial crash which led to recession, austerity and bank bailouts, some economists are predicting that the next financial crash has already begun. Most of us haven’t seen much improvement from the last one. Wages are lower in real terms and personal debt is at record levels. Inequality is growing in Britain, with those at the bottom facing real misery. Children have been going hungry during the summer holiday as parents are unable to provide food which in term time they receive at school. 

Employment is at record highs, but much of this is insecure and part-time. Those among the poorest and least able to cope through disability or sickness, and those who already have caring responsibilities, are effectively being forced to work because benefits are being denied in so many cases. This impacts particularly on some of the worst off working class people and especially women. 

A major reason for predicting a further crash is the astronomical levels of debt which are estimated to be 3 times as large as GDP worldwide. This means the debt can never be repaid. Workers borrow essentially because their wages are too low to cover their ‘costs of reproduction’ as Marx put it, and there is increasing evidence that people borrow to cover the shortfall until payday or to pay for basics like food, or school uniforms. 

Businesses and institutions have also been borrowing at very high levels and are encouraged to do so by low interest rates. Once those rates increase there will be many who cannot pay their debts. Already this has led to financial crises in emerging economies Turkey and Argentina. 

This is - and should be - an explosive situation, because it both demonstrates the inability of the current model of capitalism to deliver and will herald much greater misery for millions of people. The strange thing in this situation is that the level of resistance to the attacks on working people remains low in many countries. In Britain, the level of industrial action is catastrophically low, despite the very high number of people employed which usually leads to more strikes over wages. 

Instead, we have a situation where an expanding labour market is accompanied by stagnating or declining wages in real terms. There are a number of explanations for this including the weakening and legal constraints of trade unions, the precarious nature of much work and fear of losing it if employers are challenged, the attacks on the welfare state, the drawing of various reserve armies into work (including that of those with sickness or disability, and those with caring responsibilities like single mothers), which has helped to keep wages down. 

The unions could do much more in this situation to build their strength and to encourage industrial action, especially in precarious sectors but throughout industry. We have seen small but significant actions from workers at McDonalds and TGI Fridays, but these need to become causes célèbres for the whole movement. The unions have the potential to begin to lead a fightback, but this means they cannot rely on their existing wealth, their old members who have a history of militancy, or token actions. 

The last three decades have represented a massive shift in the share of wealth in society, with less and less proportionately going to working people, and much more going to the employers and the rich. It can’t go on like this and our side needs to start organising - before the next crisis hits. 

Vote 'til you get it right 

One way not to do that is to spend your time campaigning for a second referendum on Brexit. Party conference season means this campaign is in full swing, brought to you by the people you shouldn’t really trust to go down the corner shop. The whole idea behind the second referendum is that intelligent and informed people voted remain, and those who voted leave were racists or ignorant lumps who know no better. They were told lies in the referendum campaign cry the likes of Nick Clegg, who entered the coalition in 2010 having pledged there would be no tuition fees. 

What exactly would such a referendum achieve? 

It’s not even clear that the outcome would be different. If it remains the same, then it will only hearten the Johnsons and Farages of this world who will instantly claim vindication. If it is a narrow vote for Remain, then there will be uproar with demands for further votes. Even holding a referendum would strengthen the far right, who would claim betrayal of the original decision. No one on the left should fall for this one. Instead, we should demand Brexit with guarantees for EU citizens here, and the right of entry from both inside and outside the EU; Brexit with workers rights guaranteed and enhanced from the present situation; Brexit with public ownership extended; Brexit with investment in jobs, housing and infrastructure. It’s really not that difficult. 

Tinker, tailor, soldier, liar

The Times has regurgitated the old story that Michael Foot, former Labour leader and firmly on its left, was a Russian spy - or maybe if not a spy at least ‘used for disinformation.’ The story is taken from a new book and is supposedly based on MI6 sources. When the Sunday Times told the same story during his lifetime, Foot sued and won. That doesn’t stop the despicable Murdoch press from repeating the lie. 

I am very glad that Foot’s great-nephews, sons of the investigative journalist and fine socialist Paul Foot, have responded to the allegations with a mixture of outrage and scorn. They point out that the same man, John Witherow, who now edits the Times was then editor of the Sunday Times. He later grovelled to the Leveson inquiry about his mistakes. But here we go again. 

There is, of course, a contemporary connection. Smears on Foot and other Labour lefts were common in the 60s, 70s and 80s, as Tony Benn documents so well in his diaries. Now, with a left wing Labour leader and a very weak Tory government, they are common again. Jeremy Corbyn has been accused of being a Czech spy and too soft on Russia because he doesn’t want to nuke Moscow or start World War Three. He has been pilloried over antisemitism all summer. Last week there were stories that some of his staff were potential security risks. 

Many of these stories come from security sources such as MI6 or MI5 or - dare I say it - the  Israeli security services. They are repeated without question in the media and turn out all too often to be virtually total fabrications. We could do with more decent investigative journalists like Paul Foot today, rather than the pathetic placemen and women who dominate the media. 

Republican heroes 

If you watch one thing this week, catch up on the Channel 4 documentary on the Massacre in Ballymurphy. It is superbly made, really gripping to watch and has incredibly good reconstructions. Most importantly it is a devastating story which indicts the British army for the crimes committed by the Paras in particular in Northern Ireland during the 1970s. The story is set over 3 days in August 1971, when internment was introduced across the North and young men were imprisoned without trial. The massacre on Belfast’s Ballymurphy estate over those days left a number of people dead including women and a priest, shot by snipers when they were completely defenceless. The army faced no discipline at the time and 6 months later the Paras went on to carry out the atrocity of Bloody Sunday in Derry. 

The film shows the role of British army officers such as Frank Kitson and (later General Sir) Mike Jackson, and their contempt for the local Catholic population. Indeed an army training site was later named Killymurphy and looked identical to the Ballymurphy streets. It also shows the tremendous resistance, especially from women. I hope the survivors get justice. I also hope a new generation will begin to understand that the ‘troubles’ in Northern Ireland were about fighting injustice and oppression from the Loyalists and the army. 

Lindsey German

Lindsey German

As national convenor of the Stop the War Coalition, Lindsey was a key organiser of the largest demonstration, and one of the largest mass movements, in British history.

Her books include ‘Material Girls: Women, Men and Work’, ‘Sex, Class and Socialism’, ‘A People’s History of London’ (with John Rees) and ‘How a Century of War Changed the Lives of Women’.

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