There is an alternative
2008 ended as a year of confusion and failure. The seemingly triumphant free-market capitalist ideology was shaken to its foundation by the credit-crunch, the crisis in the housing market which led to the collapse of parts of the banking sector. Banks had sold packages of debts containing ‘toxic assets’ in deals so complex that few understood them. When the insurer and finance house AIG collapsed the problem was complicated by the fact that they had recently fired their chairman and chief executive who was described by the head of Bank of America as “the one guy who knew who it worked”. The crisis in the banking sector hit hard with entire nations such as Iceland facing bankruptcy.
2009 has begun as a year of turmoil and conflict. Throughout the world the economic crisis of capitalism has hit millions of workers and their families. The spectre of mass unemployment is once again haunting the economies of the developed nations. In the developing powerhouses of India and China the once relentless march forward of industry has slowed considerably. With no markets in Europe and North America to buy their goods factories are closing.
The booming market for steel and oil which has been fed by these hungry economies has come to an end. Recycling companies find it is no longer economically viable to recycle waste for industrial production. Shipping companies which made millions during the boom transporting raw materials to China and India and bringing finished goods back to the rich North find their vessels idle for the first time for many years.
The unthinkable has happened politically and ideologically as well. There are few even amongst the Marxist left who would have predicted George W. Bush nationalising key parts of the banking sector. But October and November 2008 saw nearly a trillion dollars of aid for the banks from the White House with the government taking major shares in nine of the largest banks with the promise of more to come. Bush seemed as shellshocked as ever declaring that the measures were “not intended to take over the free market but to preserve it”.
The neo-liberal ideologists of the capitalist class faced their own crisis as the sanctity of the free market vanished. Adam Smith’s ‘hidden hand’ of the market had solved nothing. Even the Daily Telegraph, that voice of the British ruling class, wrote in words that echoed Mrs Thatcher “There is no alternative to nationalisation of as much of the financial system as necessary”.
The actions of the British government of Gordon Brown also marks a turnaround. The New Labour project was founded on a belief in the centrality of the capitalist free market and on the embracing and expanding of the Thatcherite programme of deregulation, attacks of the trades unions and privatisation. We are now entering a period of state investment, nationalisation of banks and increased financial regulation. However this 21st Century Keynesianism is still wedded to the market. New Labour minister Peter Mandelson has threatened privatisation of the post office regardless of opposition from the public, trade-unions and some back-benchers.
However this nationalisation is not being undertaken with a view to redistributing wealth or furthering social justice. It’s aim is to preserve the health of the capitalist system with as little disruption as possible. A new kind of state capitalism is emerging which will see the state as the most powerful entity in the economy, the lender of last resort, the only guarantor of the system itself. But the huge capitalist multinationals and financial institutions will continue to wield enormous influence on government, an influence they may seek to expand even further.
Socialists face a challenge and a great opportunity. They have a chance to use the analysis of the capitalist system by Marx and other socialist writers to explain the crisis and to explode the myths that have been created over the last two decades that portray free market capitalism as the natural way of things.
We face obstacles. Not least the weakened and divided state of the socialist movement. But workers will be looking for answers. The turnout at Scottish Socialist Party meetings on the crisis certainly points towards this. This issue of Frontline looks at the causes of the crisis and attempts to provide a Marxist analysis. It also looks at the impact that the crisis is likely to have on Scottish politics and the prospects for the SNP’s independence referendum. Finally it provides some alternatives to the changes put forward by New Labour.
The left will also have to do some fresh thinking. That means putting new and relevant demands that will catch the imagination. It means providing bold solutions and it means building dynamic movements that can change society.
Just a few years ago philosophers looked at the collapse of the Berlin Wall and talked about the end of history. Marxists can say confidently that on the contrary we can make history by revolutionising society.