The Tata steel workers threaten to be the latest case in which the brutal logic of capital destroys industries and working class communities. We’ve seen it again and again in the past 35 years—the miners under Margaret Thatcher and John Major, and the Luton and Longbridge car workers under Tony Blair and Gordon Brown.
The bosses of Tata Steel are certainly applying that logic. They are rushing to the exit, desperate to dump an unprofitable subsidiary and shed responsibility for the British Steel pension fund. The Financial Times newspaper reports Tata is blocking a selloff of the South Wales plants to limit competition with its more efficient Dutch subsidiary.
The Tory government is also applying the logic of capital. Ambrose Evans-Pritchard, the Daily Telegraph newpaper’s international business editor, pointed out that Britain has consistently blocked proposals to increase the European Commission’s power to impose anti-dumping duties on cheap imports from China.
Evans-Pritchard accused chancellor George Osborne of a “Faustian pact” with China in the hope of attracting inward investment. Maybe, but British governments—unlike other advanced capitalist states—have since the 1980s consistently allowed unprofitable local firms to go bust.
The only sector they have made an effort to protect is banking, apparently in the belief that the City is the source of Britain’s main comparative economic advantage. The concern paraded by David Cameron and business secretary Sajid Javid is just for show, and reflects their fear that steel closures will be used against them in the Brexit campaign.
Evans-Pritchard concluded, “We may have to face the unpleasant truth that free trade has its limits. Anti-dumping duties are the only way to preserve our industrial core in a 1930s world.” But calls for retaliation against China seem futile in light of the figures he gives. China’s share of global steel production has risen from ten to 50 percent in the past decade.
As the investment boom launched to counter the Great Recession of 2008-9 has run down, the Organisation for Economic Cooperation and Development estimates China has built up 400 million tonnes of excess steel capacity. That’s twice the European Union’s total steel output. By comparison, Britain’s steel industry is a minnow, producing 12 million tonnes a year, 0.7 percent of global output.
Moreover, when Evans-Pritchard talks about “a 1930s world” he’s referring to how states responded to the Great Depression. First they increased import tariffs to protect their home markets and then they devalued their currencies to make their exports cheaper.
The effect of these beggar-my-neighbour policies was the near-disintegration of the world market. And the main victims were working people.
The Tata crisis threatens 40,000 jobs in Britain. Nearly two million Chinese coal and steel workers will be sacked under government plans to slash excess capacity. In January strikes and “workplace incidents” in China were double the level of a year previously.
Calls to nationalise the Tata plants are right, but not, as Labour politicians argue, as a stop-gap till they can be sold off.
Nationalisation could be a step towards another kind of economy, where a different set of priorities from the logic of global competition could begin to govern production. Once the steel workers’ jobs had been saved, they could begin to discuss with workers from other industries and areas how their products could meet need, not profit.
Of course, neither the Tory government in London nor the Welsh executive in Cardiff will contemplate such an alternative, unless they are forced to. At the start of the Great Recession in 2009, groups of workers occupied their plants when they were threatened with closure. This is what the steel workers should be planning now.
Occupying the steel plants would intensify the political crisis created by Tata’s decision. At the very minimum, like the 2009 occupations, it could get better terms for workers if they do lose their jobs. At best, it could keep the steel plants open. And this would be an example to workers everywhere that there is an alternative to the logic of capital.