Chancellor Rishi Sunak last week announced another £30 billion of support for businesses, bringing the total since March to almost £200 billion.
There were billions to encourage taking on the “free labour” of young people whose minimum wage pay would be covered by the state.
There was money for firms that take someone back into employment as the furlough scheme comes towards its end.
This vast corporate welfare underlines that we do not live in a system of “free market” capitalism.
Just as in the 2008 crash, the bosses globally have survived this year only because states have marshalled vast sums to sustain a system that has essentially collapsed.
Even companies that have not directly seen their business shrivel continue to exist only because the state has prevented the wider paralysis of the economy.
When, as now, the government pays 80 percent of the wages of nine million workers, it is always presented as sustaiing employees.
But in reality it is shoring up companies’ most precious asset—its workforce—and maintaining enough spending power to keep businesses going.
And some firms have prospered even amid the coronavirus carnage.
A new phase is coming that, unless there is resistance, will see a terrible cost for working class people
British American Tobacco and drinks firm Diageo have been able to maintain their decade-long record of increasing their annual dividend each year to shareholders.
Others will be announcing profits later this year solely because state support kept them going.
And the government asks for nothing in return. Not a single firm has to concede shares, or workers on the board, or guarantees about future employment—let alone public ownership.
But a new phase is coming that, unless there is resistance, will see a terrible cost for working class people.
During the economic whirlwind of the 1930s slump, global production contracted by about 10 percent. The world economy has not fallen—yet—by that amount. But Britain is on course to do so.
The OECD group of leading economies said last week that Britain faces the deepest downturn of all the richer economies.
It projected that production of goods and services will contract by 11.5 percent in 2020 even if the world avoids a second wave of coronavirus.
The OECD added that if there was a second wave, it expected the British economy to shrink 14 percent.
Compare that to previous downturns. In 1931, the worst year of that period of recession, the British economy contracted by less than 5 percent.
The financial crisis of 2008-9 saw a fall by 6 percent over a period of 18 months.
So what is coming now could hit harder than either of those recessions with the policies of the government and the actions of bosses producing mass unemployment.
The financial crisis of 2008 did not see a major surge in unemployment.
This was due to a combination of government support plus the fact that weaker sections of manufacturing had already been wiped out in the 1980s.
But at least some of the zombie firms that don’t make profits but staggered on after the 2008 shock will go under now. Corporate debt, the money that businesses owe is at a record high.
Executives from three leading British banks warned recently that they expected hundreds of thousands of companies to collapse.
The jobs slaughter has already begun. Thousands are going at logistics giant DHL, at Jaguar Land Rover, at British Gas owner Centrica, at chemicals group Johnson Matthey and many, many others.
More than 6,000 retail jobs were cut on a single day recently at firms ranging from Harrods to tax avoider Philip Green’s Arcadia group.
Last week John Lewis announced it will close eight of its major stores. Boots the chemist is slashing 4,000 jobs.
The number of shops that have collapsed in the first six months of 2020 is already more than the number that failed in the whole of 2019.
Remember the praise for key workers—many of them women, many of them on low wages—who kept society going during lockdown? Now many are of their jobs are destined for the scrapheap.
The potential scale of the collapse is why for now the government still hands out money to companies.
But at some point the government will have to turn off the cash tap. In an article headlined, “Sunak will not be able to play Santa Claus forever”, the Financial Times newspaper reports, “Total government borrowing is likely to be about £361.5 billion in 2020-21.
“That figure would be the highest level of borrowing since 1944-45. It would be almost twice the peak recorded in the global financial crisis and now ranks the UK higher than any other leading economy apart from the US.”
In the early stages of the recent crisis the government financed spending simply by printing lots of money. But it has now returned to the traditional method of borrowing—selling bonds.
A bond is a promise to make payments to whoever holds it on certain dates. Interest is also paid to whoever owns the bond in the meantime.
For now the bond markets accept the vast expansion of British borrowing. The capitalist class internationally has united behind state support for business.
But as stronger economies cut back on state support it will cost Britain more to borrow and banks will refuse to make cheap loans.
We have to challenge the notion that the only way to win decent jobs and pay is through the health of businesses
So the the Tories and the bosses will attack our class through pay cuts, redundancies and tax rises.
Two arguments are important here. Firstly we have to break the idea that the economy is outside human control.
The last few months should have destroyed the capitalist myth that economic matters exist separately from the actions of class forces.
All the interventions that have taken place so far were ultimately to shore up the system.
We have to demand that now there is a fight for measures that confront that system and are in the interests of working class people. We need money for workers, not for corporations.
If there are tens of billions for businesses then why not for the NHS and education, and for action to tackle climate chaos?
Winning this argument requires taking on union leaders who will accept pay cuts in exchange for often spurious promises about saving jobs.
The Unite union recently praised Ryanair bosses who offered to reduce their job-slashing plans in exchange for workers’ pay cuts of between 5 percent and 20 percent.
And that leads to a second argument. We have to challenge the notion that the only way to win decent jobs and pay is through the health of businesses.
If you can’t see beyond capitalism—and top union leaders and Labour’s Keir Starmer can’t—then you are imprisoned by the need to restart the profit machine.
The argument goes that wages come from profits, profits come from making and selling things, so ignore the coronavirus threat, get back to work—and keep shovelling government cash to businesses.
Indeed much of the unions’ criticism of the government is that it needs to give more money to bosses.
Instead we need to insist that it’s not the boss who makes the world tick but the labour of billions of ordinary people.
They are crucial so why shouldn’t they be in charge?
If the priorities of the vast majority of people ruled then we would not privilege the demands of chief executives and bankers. Instead we would prioritise the living conditions of workers and the services they rely on.
Why can’t Amazon and Royal Mail and the railways and all the other major firms be wrested away from private control and run democratically in the interests of all.
Let’s substitute Tory planning for corporate survival with a plan for people’s survival.
And that would include action, such as a shift towards green jobs rather than more investment in those sectors that have pushed the planet to the brink of catastrophe.
No going back to the world before the pandemic requires a radical break from capitalist priorities.
Writing in the 1960s the socialist Howard Zinn said that there are moments when people realise that society is based on “congealed injustice” and involves “everyday violence against body and spirit”.
For at least a sizeable minority of people, we are at such a moment. Recognition of the system’s failures needs to be translated into the fight for an alternative.