ALMOST ALL media commentators now agree that the world, including Britain, is heading for a sharp recession. Only the most barmy of pro-capitalist pundits dare deny that the recession Socialist Worker has warned of over recent months is gathering pace. 'Hi-Tech Industries In Meltdown', 'Output Falls At Its Fastest Rate For A Decade', 'Fear Grips Investors' were just some of the headlines last week. All New Labour's talk of 'no more boom and bust' has evaporated as quickly as Marconi's share price.
Each day brings new warnings of closures and job cuts. The result will be fear and uncertainty for millions of workers and their families.
As in previous recessions, like that of the early 1990s, whole communities are threatened with devastation as factories and offices shut. People's lives will be wrecked as homes are repossessed. In most of the media the slide towards slump is presented as though it were some natural disaster, like a sudden change in the weather which no one can do much about.
All we can do is sit tight and hope for better times to return. The crisis is not natural. Instead it flows directly from the logic of profit which forms the basis of the whole capitalist system. And we can do something about it, provided we challenge that logic. The crisis ripping the world telecom industry apart shows why capitalism brings recession.
Over the last few years firms have all piled in, expanding production and churning out ever more equipment, hoping to make massive profits. Their share prices all soared, on the smell of a share of the profits that would soon roll in. The inflated share values helped them all borrow vast sums to try and expand faster than rival firms. It was hoped that future profits would pay off the debt.
None of this was planned. Like pigs to the trough, all the firms and the bankers who backed them scrambled to get their snouts in. Then they found they could not all profitably sell the equipment they were churning out and suddenly the whole mad charge has slammed into reverse.
Panic over profits spread, followed soon after by fears that loans may not be repaid. With the panic came falls in share prices, and cutbacks in production. Boom has turned to bust.
Capitalists, bankers and the governments that back them have only one answer-make workers pay for the madness of such a system. They want to try and cushion themselves from the pain of the slump by shifting as much of the pain as possible onto workers and the poor.
This is true across the world. In Argentina, for instance, the world's bankers are terrified that a financial collapse could see them lose out on the interest payments they had hoped to grow even richer from.
Their answer is to work with the Argentinian government to impose a savage austerity plan on workers and the poor to keep money flowing to the bankers. Whether they get away with this plan is not predetermined. Argentinean workers and the poor have fought back with general strikes and protests that have shown the power to force the government and bankers to retreat.
The outcome of such fights is what determines who will pay for the recession everywhere, including Britain. Workers faced with job cuts, and factory or office closures don't simply have to accept that. They can fight, and challenge the logic which says people should be sacrificed to profit.
In a threatened workplace by far the best answer is for workers to occupy the factory or plant. That can send a message that people are not going to allow bosses to shut the place down, sell off buildings and equipment and leave workers to rot. On its own that won't stop the job cuts and closures, but it can be the starting point for a fight that can.
If workers occupy they can go from there onto the streets, calling on solidarity from other workers on demonstrations and strikes.
Drawing wider layers into action to fight the job cuts not only puts pressure on the bosses, but can cause a political crisis for the government, forcing it to intervene.
The idea of New Labour intervening to save jobs may seem hard to imagine. But under sufficient pressure from below even a hard nosed Tory government has been forced to do exactly that. This is what happened, for instance, in the early 1970s when workers at the UCS shipyard in Glasgow occupied, won solidarity and created an enormous political crises which forced the Tory government to intervene to save jobs. Today, faced with the slide towards slump and a surge of job cuts, we need to fight across the working class movement for an action programme based on exactly this kind of response.