We won't pay for their crisis

Capitalism is in crisis. The entire system of profit has been thrown into chaos with the world's major economies going into recession left, right and centre.

This is nothing new - capitalism has always had these crises and they tend to arise around every 7-10 years. Sometimes they are shallow crashes and sometimes they cause utter devastation on a world scale. The recession starting in 2008 looks to be one of the latter.

The bosses and their representatives in parliament will do whatever they can to save capitalism, which provides them with wealth and power whether the economy is going up or going down. They have spent the last ten years amassing huge profits out of sweatshop labour abroad, destroying the environment and launching wars to control energy resources in the Middle East and elsewhere.

Now the economy is on a downturn the capitalists are not about part with their money or their property. The question posed to all of us is “who will pay for the economic crisis?” Will it be ordinary working class people thrown out of their jobs? Immigrant workers thrown out of the country? Young people made to work for poverty wages?

Or will the rich bosses pay for the crisis? After all, it's them and their system that caused it in the first place!

If we want the bosses to pay we will have to force them. We will have to build a movement that fights for work as a right, decent pay and that guarantees work for all who want it. We want to provide employment through the building of more schools, colleges, universities, hospitals through massive spending in public services by taxing the rich - not through giving Lloyds, Natwest and Barclays blank cheques.

We should fight for decent benefits for all those laid off during the recession and those unable to find a job. We should fight for nationalisation and workers control of industry when the bosses threaten closures.

But overall we should fight for a democratically planned socialist economy. This would be a system run by workers making use of the centralisation of production and trade that already exists. It would be free from crises and would, in the words of Karl Marx work upon the principal of “from each according to his ability; to each according to his needs”.

This pamphlet by REVOLUTION explains how the bosses will try to make us pay for their crisis and why the capitalist system is to blame. Here we will put forward our views on how young people in particular will be the worst affected by the crisis and how we can organise to fight back and defeat the system altogether forever.

As bank Northern Rock fell in Spring 2008 - the first British casualty of the “credit crunch” queues of customers formed in panic to get their money out before it was lost. To prevent the bank going under, Gordon Brown announced its nationalisation at a cost of £55 million - to be paid for by the income paid in tax by British workers. The catch was that only the bad debts of the bank were to be owned by the state. Granite, a profitable investment company and part of Northern Rock was left well alone. Now Northern Rock, the supposedly state-owned bank carries out more repossessions of people's homes than any other. The Labour Party has made the working class pay to save the banks - only for the banks to steal their homes. Next they did the same with the Bradford & Bingley building society. It was part-nationalised with the profitable assets given away to the Spanish bank Santander. For capitalist hypocrites, nationalising losses is great - just don't go near their precious profits.

Then it appeared that other banks like Natwest, RBS, HBOS were also in trouble. They approached Gordon Brown for help and received a bailout that dwarfed anything ever seen before. It was the same across the Atlantic. In October 2008, $2 trillion (a trillion is a million, million) were spent bailing out the banks in the UK and USA alone through the buying up of huge amounts of shares and guaranteeing loans with the state treasury.

In Britain, the bailout was supposed to come with strings attached. The banks were under instruction that these vast quantities of money from the taxpayer were not to be spent on the infamous bonuses to city investors, which in previous years had been (to give one example) spent on things like cocktails costing £333 each. Nor were they to be given to shareholders in the form of huge dividends. But it was almost immediately after the bailout that the Royal Bank of Scotland Group (RBS), who also own Natwest, assured investment staff and shareholders that they had “reached a deal” with the government and could do it anyway.

And then it was party time! RBS threw a huge bash near Edinburgh for executives costing £300,000 for the finest wine and no-expense-spared accommodation at a five-star hotel. HBOS, who are cutting 40,000 low paid call centre and admin jobs to save costs and “streamline” their operations had the same idea. Their party cost £330,000 to celebrate the “successes” of 302 of their top mortgage staff - all this given the disastrous crash in the property market.

No wonder that the anger of ordinary people exploded across the world! In the USA workers held placards up to Wall Street skyscraper boardrooms saying “Jump! You fuckers!” In London, students and workers took to the city on 10 October 2008 and pushed past police lines attempting to force their way into financial buildings shouting “We gotta get rid of rich!” The slogan “we won't pay for their crisis” has been taken up in movements against privatisation, cuts and unemployment all over Europe.

What should be done with the banks?
Socialists are in favour of nationalising all the banks into one single state bank. This should democratically controlled by the organised working class for the benefit of society and should be done with no compensation at all for the greedy bosses.

The role of banks in capitalism is to centralise the wealth in society and distribute resources where they provide the highest return of profit - aside from what it does to any economy, the environment and workers in any industry. If they were merged into one state bank for the benefit of people, not profit, they could help those whose homes were at risk through buying them up and renting them back out more affordably. They could put forward the funds for massive infrastructure projects to improve health, transport and education, providing jobs in the meantime. They could abolish the huge debts that bleed the global south dry. When the bosses tell us that they need to cut our wages or lay us off, the state bank could publish the real state of their finances and strike a blow to business secrecy.

It's not only through spending our taxes on the rich that the capitalists aim to make us pay for the crisis. They aim to make us pay for the recession through our jobs, through our pay and through our working conditions.

In order to get away with this, they blame the crisis on the very people who suffer from it most. The 2008 Labour Party conference made this clear. When Gordon Brown made his speech against “something for nothing society” and those “who take more out of the system than they put it” one might have imagined that he was talking about people like the former CEO of HBOS, Andy Hornby. Hornby is now being paid £60,000 per month to organise the job cuts in the merger between Lloyds TSB and HBOS, making a fortune out of working people losing their jobs.

Actually, the speech was addressing those unable to find work in the current economic crisis. He stated that everyone who “can work must work”. The government has now prepared policy documents for the introduction of “workfare” - the idea that one must work to receive benefits. In practice this can mean working normal hours on a government scheme, whereby they pay you only the rate of benefits. This could mean working for as little as £1.51 per hour!

Perversely the government are not just blaming the jobless themselves for unemployment but are pushing to blame immigrants for taking up jobs that they say could belong to “British” workers. Phil Woolas MP, former NUS careerist said "when we're moving into a recession, the length of which we do not yet know, the immigration policy suitable for a boom is totally unsuitable". Immigrants are welcome in Britain when the bosses want them to work for cheap, but when unemployment comes back on the agenda the capitalists blame them for the failures of their system.

In February 2009, wildcat strikes broke out across the UK as workers in energy and construction took action against contracts in Britain being awarded to foreign companies, some of which were hiring European workers from outside the UK. This was despite the fact that British workers hold more jobs in Europe than European workers hold in Britain. Workers on the strikes held Union Jacks with the slogan “British jobs for British workers”, whilst the fascist BNP worked overtime to exploit the issue for their own racist purposes. As the recession grows, socialists must stress internationalism and reject chauvinism in the workers movement, after all the working class have no country. But lets not forget - the slogans used on the strikes came from Labour MPs and right-wing tabloids. They will step up their assaults not only on “immigrants” but on any workers who they deem not “British” enough.

Socialist raise the slogans, “Jobs for all!” and “Blame the bosses - not foreign workers” in response. Racism is a tool used to divide the workers as the chauvinist wildcat strikes show. If we want to make sure that this crisis of capitalism is turned into a victory for socialism then fighting racism and fascism is a major task for workers and youth.

Unemployment is rising and rising quickly. This recession could see unemployment reach three million in Britain or even higher in a short space of time. When we first heard about the crisis we were told that Britain was particularly well placed to “weather the economic storm” but this isn't true. The British economy relies hugely on financial services - the first sector of the economy to come crashing down when the crisis hit.

Other industries such as the construction industry have also been very hard hit with collapse of the previously raging housing prices, and recession has now worked its way into every other sector of the economy too.

In a nutshell, Britain's economy was based very much upon speculation (predicting higher and higher profits all the time) and ordinary people are now being made to pay for this imbalance - with our jobs, with our livelihoods.

Many of the companies now laying off workers now have been making huge profits over the last two years. It was the workers of these companies that created the profits by producing goods and delivering services. Now times are a bit harder many companies are using the recession as an excuse to “streamline” their businesses and lay off their hardworking employees, rather than use the profits they had made to keep them on.

So when a company threatens job cuts and say they can't afford to keep us, we demand they open their accounts books and prove it to us. If they can't, then nationalise - under the control of the workers!

One of the most crazy aspect of a recession is that while so many workers get laid off, those still lucky enough to be in work tend to have to work harder, longer, more back-breaking hours, whilst others are left idle, unable to find a job.

That's why workers need to fight to cut their working hours not their jobs. To boost employment we need to build schools, hospitals, railways and windfarms for sustainable energy. If we fund this by taxing the rich we can make a better world for everyone.

The onset of the capitalist crisis has resulted in many new terms entering the vocabulary. Many of the long words used by bankers and economists are very confusing, and no doubt used to put ordinary people off attempting to understand what is really behind this crisis.

However one term which has recently started appearing on our TVs, radios and newspapers is “give-back”. If we lived in a fair and just world, one might have expected a “give-back” to be an arrangement between the capitalists and the workers whereby the bosses give back all the money they have stolen from us over the last ten years as the gap between rich and poor has greatly increased.

But we don't live in a fair and just world; we live within a capitalism system. A “give-back” is where the bosses place an ultimatum on the workers - to lose their jobs or take huge cuts in pay and/or working conditions. These are generally negotiated between bosses and the trade union leaders who have collaborated with many of these give-back schemes. Of course, give-backs weaken trade unions within a workplace as many workers feel outraged at their unions for negotiating to their disadvantage. This can open the way for bosses to both cut pay and layoff many workers too.

Now British bosses are negotiating with the trade union leaders to do the same. At Honda, leaders of the Unite union are negotiating pay cuts among 5000 staff in Swindon. Rank and file union members must oppose actions such as these, by setting up their own committees. They must demand that all negotiations between the union tops and the company bosses are made public to avoid sell-outs.

Youth worst hit
Low wages are a classic way that bosses try to make workers pay for the crisis, and for youth, who get paid less anyway the results can be disastrous. Over the last decade, more and more youth have been forced to take up “McJobs” due to the lack of other opportunities. Many of these jobs have been paid at the appallingly low minimum wage which also openly discriminates - the younger you are the less you get.

In October 2008, the government used the crisis to justify the tiniest wage “rises” to those on the minimum wage. For workers under 18, the hourly rate rose just 13 pence - at the same time as some basic food essentials went up in price by 30%. It will be of little comfort then that as unemployment rises in almost every sector of the job market, that Kentucky Fried Chicken plan to open 300 new outlets. These are the kind of jobs that will pay peanuts and offer no opportunity. When we say “we want jobs” we mean decent jobs with decent wages.

Youth must start to fight back against low pay and for job security too. Too often youth are forced into temp work or “zero hours” contracts where we suffer worse conditions and are at the mercy of the bosses who choose how much we can work from week to week. We can also lose our jobs with little or no notice at a time when prospects for finding other work are bleak. We must demand the right to join unions and build them in our workplace. Trade unions must fight for us too. For more information, check out our website, and the blog set up by Revolution members at McDonalds to help fight for low paid workers: http://theinsidemcjob.wordpress.com/

Under capitalism, products and services are only produced and distributed if they can make a profit for the capitalists - those at the top of the system who own the means of producing and selling goods and services, like the factories, the call centres and the shops.

Today the capitalist system is entering a deep crisis. But even when it's “working”, when it's “fine”, it builds up massive inequalities between rich and poor.

The richest 1% in the world receive as much as the bottom 57%, or in other words, less than 50 million of the richest people receive as much as 2.7 billion of the poorest. Even in Britain - a country that is much wealthier than most states in the world - we live with outrageous levels of inequality. The wealthiest 10% of people in Britain control 54% of the country's total wealth.

To enforce and defend these massive concentrations of wealth in the hands of the few, the capitalists in the world's most powerful countries are all too happy to use force. That's why we've seen the horrific and bloody occupations in Iraq and Afghanistan.

But despite all this, for years the right wing media and government told us that capitalism was not just the only way to organise the economy, it was also the best way. They said that thanks to technology and the spread of capitalism across the globe, it had become free of crises and the boom times would run forever. Never mind spiralling inequality. Never mind war without end. Capitalism was so powerful, so stable, so downright unchallengeable, it was here to stay.

But now the right wind ideologues have suddenly piped down. This year capitalism has gone into an almighty crisis.

This crisis didn't happen because of a global workers' uprising against inequality, exploitation or oppression, or any other challenge to the power of the rich. Amazing as it may seem, capitalism goes into crisis on its own - because of the contradictions it builds up in the period when it is spreading and expanding.

All profit generated by the capitalists always has to be reinvested (as “capital”) to make more profit. Capital never sits still - it's always moving. Products are made in factories, then sold on the market (exchanged for money), then some of that money pays the workers their wages, while the capitalists pocket the rest as profit. And then the “circuit of capital” begins again.

Workers are always short changed, they never realise the full value of their labour power that they put in because the capitalist always takes out the profit.

The crisis comes when too much money is made than can be re-invested at a profit and this is exactly what we are seeing now all over the world.

Once this happens, the circuit of capital breaks down. Capitalists are desperate to keep hold of their cash because if they put it into loss making industries they could suddenly find that it evaporates. This is happening in the American car industry, for example, where the three biggest companies, Crysler, Ford and General Motors, are all losing billions of dollars and are on the verge of bankruptcy.

Desperate to cut their costs, the capitalists will always try and make workers in their companies pay in order to restore their profits. That's why now we're starting to see companies announce redundancies, job losses, cuts in pay and hours and even factory closures. The capitalists don't care that each job lost is someone's food and bill money, someone's rent check - they only care about restoring their profits.

This all suddenly seems “normal”. The media and government make it appear as “common sense” or just the way things are. But the truth is that it is quite insane. Capitalism is the only system that has ever gone into crisis for making too many things. Too many cars than can be sold for profit in declining markets. Too much money than can be reinvested into profitable businesses.

Added to this insanity is the simple injustice of this way of organising production. All the capitalists bring to the table is their legal ownership of the factories, companies and private property in general. Thanks to this or that piece of paper - a share ownership certificate or credit note in their possession - the capitalists are able to make “legal” claims on the profits generated by working people's labour.

The bottom line is that capitalism doesn't work. It is not only based on fundamental injustices, but it's also a crisis-ridden system. The rule of capital is the rule of a crazy market, which creates massive wealth at one pole only to create misery at another.

There is an alternative. If only the system wasn't run for profit, if only it was democratically controlled by working people, then we could run it on the basis of the need of all - not the profit of a few. That's the system – socialism – that REVOLUTION is fighting for.