Socialist Worker

Does it make a difference if we are in recession?

Issue No. 2238

The Tories are using the global economic crisis as an excuse to make savage cuts in Britain. They say that higher levels of unemployment, cuts to services, lower pay and worse pensions are unavoidable.

According to official definitions, Britain isn’t in recession because it hasn’t had two consecutive quarters of “negative growth”. That doesn’t stop the Tories using the crisis as a stick to beat people with.

They seamlessly move on to argue that any backtracking on cuts will threaten Britain’s “fragile recovery”, so “we” must continue to sacrifice.

Ordinary people, watching their lives get harder and attacks accelerating, may well wonder where this recovery is and why they aren’t seeing the benefits of it.

But the truth is that booms and recessions look very different depending on which class you’re in—and whatever the situation, workers are usually under attack.

Of course, economic crisis has a huge effect. Since the crisis began in 2007, workers across the world have seen their living standards decline—in some cases drastically.

A recession means a contracting economy and lower economic output. Bosses pull back on investment and there are fewer jobs.

They use spiteful measures to try and shore up their profits, such as slashing pay, taking on agency workers on lower wages or imposing worse pension schemes.

In recessions, it’s understandable that people fear for the future. Crisis also has a real impact on bosses, with some losing billions of pounds or going out of business.

But the key thing in determining the quality of workers’ lives is how much bosses and governments can force ordinary people to put up with.

In a crisis, bosses hope to get away with deeper attacks. They think that a combination of ideology and real cuts will create such fear and insecurity that people will be grateful for any job they can get.

It sometimes works. In October 2008, workers at JCB voted to accept a cut in hours, with a resulting pay cut, to save jobs.

The reasoning was that there was only so much money to go around and workers had to “choose” between pay or job cuts. But in the end, the company cut jobs anyway.

Councillors who tell us that cuts are inevitable, and so we should choose where they fall, use the same reasoning. In Birmingham, thousands of workers have been told they must swallow pay cuts or jobs will be slashed.

But cuts are never inevitable or automatic—they are a deliberate choice by bosses who want to protect their class interests.

Bosses attack workers because they are constantly in fierce competition with each other to make profits.

A boss may sack people because they believe it’s the best way of shoring up their profits.

Others will refuse to invest—not because they don’t have the cash, but because they fear low returns.

These decisions are based on profitability, which is shaped by recession but not automatically determined by it.

Debates

Understanding this sheds light on the ongoing debates over how to respond to the assault.

So the Labour Party says the problem with the Tories is that they are making cuts too fast. This, they say, will threaten the “recovery”.

Instead Labour wants to make cuts, but at a slower pace.

This utterly misses the class divide that lies at the heart of capitalism and the interests that drive the assault.

It’s not true that, if we make cuts at the “right” times, we can avoid recessions. They are built into capitalism because of the way the system is organised.

It’s not true that we must make cuts because the system is bankrupt. Big companies are still making profits.

Just last week oil firm Shell announced an astonishing 90 percent rise in profits.

But it’s also not true that, if only we can get the economy to “recover”, workers’ lives will automatically improve.

Recession can see working class people suffer badly—but we don’t see the benefits in “booms” either.

The Tories want us to think that recession means cuts are inevitable. And they also want us to believe that the system can deliver for us if only we manage it properly and make enough sacrifices.

Both of these are lies. The best way to protect our living standards isn’t to negotiate the terms of the assault. It is to resist the offensive wholeheartedly—and with the same ruthlessness that the bosses are using to attack us.


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News
Tue 8 Feb 2011, 17:25 GMT
Issue No. 2238
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