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This is a crisis of capitalism, not virus lockdowns

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Issue 2720
Driving to disaster - competition, the push for profit and overproduction lead to repeated crises
Driving to disaster – competition and the push for profit lead to overproduction of goods such as cars, and spark repeated crises (Pic: John C Bullas/Flickr)

As millions of people fear for their jobs, bankers and bosses celebrated a bonanza on the stock market.

Stock markets in New York, and Tokyo saw their biggest August surge in more than a decade.

The big winner, billionaire Elon Musk’s Tesla, added £289 billion to the value of its shares this year.

Alongside such obscene wealth, millions face poverty as bosses try to make workers pay for the crisis.

And the unemployment crisis is about to get worse as the Tories wind down the furlough scheme that supports millions of jobs.

Car bosses at BMW have announced plans to axe hundreds of jobs at sites across the Midlands and the South East.

This includes 400 jobs—a 10 percent cut—at Mini’s 4,000-strong workforce in Oxford. Hundreds of agency workers could also lose their jobs, and more through the company’s supply chain.

In Lancashire, Rolls Royce has said it will slash 200 jobs. Bosses say the company, which produces airplane engines, has seen a pre-tax loss of £5.4 billion due to the coronavirus pandemic.

London Gatwick Airport plans to get rid of 600 workers—24 percent of its workforce.

And the Pret A Manger coffee and sandwich chain plans to cut over 2,800 jobs and close 30 stores as many people continue to work from home.

The Tory solution is to return to “business as usual”. They blame Pret job losses on people who don’t want to return to the office.


But this shows up an irrational way to organise an economy.

The cause of unemployment isn’t that there aren’t enough jobs that need to be done. It’s because of the logic of competition and production for profit.

The car industry, for instance, was in crisis long before coronavirus and the lockdowns.

And the problem wasn’t Brexit either. The underlying problem is that manufacturers are making more than they can sell—and this flows from the chaos of the market.

As rival manufacturers compete to grab a bigger slice of the market, they produce too many cars.

But their only solution is to intensify competition—and produce yet more cars.

There needs to be a fight now to save jobs. Unions and the Labour Party should be fighting to extend the furlough scheme.

It’s not impossible to win—Germany has extended its broadly similar scheme to the end of 2021.

Coronavirus was only the trigger for the economic crisis.

Global capitalism has suffered from an underlying crisis of profitability for decades, sometimes masked by share price rises or financial bubbles.

A socialist economy would be democratically-planned to meet social and environmental need.

We need to fight for jobs now—and for a break with the profit system that produces riches and poverty.

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