After weeks of suspense Tony Blair finally had to abandon his preferred date for the general election. May 3 had been pencilled by the strategists at Millbank months if not years in advance. And the gathering clouds over the world economy were making it all the more urgent to get the election over with as soon as possible. But the scale of the foot and mouth epidemic forced the postponement.
These two factors, foot and mouth disease and the looming American recession, may appear to be accidents which came along to disrupt the best-laid plans of Blair and Brown. An in a way they were, in the sense that they were events over which New Labour had no control and at least as far as foot and mouth is concerned, could hardly anticipate. But in another and more profound sense they were not accidents. Both of them were and are entirely logical manifestations of the capitalist society we live in and of its present phase, globalisation.
The foot and mouth virus is not, in a biological sense, a product of capitalism. But the way in which it spreads and the ways of dealing with it certainly are. The development of intensive and export-oriented agriculture, the constant large-scale movement of animals within Britain and between Britain and other countries has greatly facilitated the spread of the disease. There is of course nothing intrinsically wrong with importing food from other countries. But today much food is imported and exported not according to criteria of human needs, but in order to make the maximum profit, when it could often just as easily be produced locally.
The spectre that is haunting the capitalist world, and in particular the United States, is the example of Japan. Widely touted in the 80s as the new model of capitalist development, the Japanese bubble burst ten years ago. The world's second-biggest economy has limped through the 90s and today its debt-ridden banks are creating one more factor of instability in the world economy.
So Blair has had to put the election off until almost certainly June 7. Any further delay could be very dangerous for him. It is still too early to say how long and how deep the American recession will be. But the overall impression is of a number of chickens coming home to roost. First of all Gordon Browns claims that the days of boom and bust were over have been shown to be nonsense. Boom and bust, otherwise known as periodic crises of overproduction, is a permanent feature of capitalism. So on one level what is happening is quite classical. But there is something more serious. The booms of the 80s and even more of the 90s were largely built on credit and speculation. Consumer credit, credit to banks and industry, speculation in anything that moves. That sort of house of cards eventually collapses. The spectre that is haunting the capitalist world, and in particular the United States, is the example of Japan. Widely touted in the 80s as the new model of capitalist development, the Japanese bubble burst ten years ago. The worlds second-biggest economy has limped through the 90s and today its debt-ridden banks are creating one more factor of instability in the world economy.
In America itself the stock market steadily rose to the point where already in 1996 Alan Greenspan, chairman of the Federal Reserve Bank, was warning of irrational exuberance. But over the last year the bubble has burst, or rather slowly deflated. The equivalent of 40 per cent of GDP has been wiped off share values (compared to 20 per cent in the stock market crash of 1987). Given that half of all Americans now own shares, such a drastic fall in share values will be reflected in decreased consumption, further depressing the real economy.
With the worlds two biggest economies in recession, there is no chance of Europe escaping unscathed. The German economy is already slowing. Scotlands export-oriented economy will be particularly hard-hit. What has happened at Compaq and Motorola, and at Marconi in England, to take only the best-known examples, is unfortunately only the tip of the iceberg.
This is the background to the coming General Election. Blair will probably win it. If he does he should send William Hague a case of champagne. Already in 1997, New Labours victory was much more a rejection of the Tories than any real enthusiasm for Blairism. That will be even truer this time, probably on a lower poll as many traditional Labour voters stay at home, disgusted by Blairs pro-business agenda.
As New Labour tries to replace the Tories as the natural party of government, it is all the more urgent to offer disillusioned voters a socialist alternative. That is why the Scottish Socialist Party will be standing in every constituency in Scotland. And in a new and encouraging development, the Socialist Alliance will for the first time be present in many constituencies in England and Wales. Whoever said that socialism was dead?