Britain on the brink

“In developments of such magnitude twenty years are more than a day - though later on days may come again in which twenty years are embedded.” (Karl Marx, 9 April 1863)

[This article will be published in the 270th edition of Socialist Appeal tomorrow]

In Britain we have experienced a fundamental break in the situation. A sea-change has taken place politically, socially and economically. Britain is now one of the most unstable countries in Europe. Following the deep slump of 2008, working people have faced a new brutal reality of austerity and falling living standards. This has produced an anti-capitalist and anti-establishment backlash amongst wide layers of the population, especially the youth. This is forcing many to draw radical and even revolutionary conclusions.

This is precisely what Trotsky meant when he referred to the molecular process of socialist revolution. A slow and gradual accumulation of discontent builds up beneath the surface, unnoticed by superficial observers, until it reaches a critical point where quantity becomes transformed into quality with explosive consequences. Now the movement in the direction of revolution is being reflected on the political plane.

The British ruling class, who have ruled Britain for the last 200 years, are also gripped by a sense of despair and despondency, as things go from bad to worse. In the 1930s, Trotsky referred to the ruling class “tobogganing towards catastrophe,” which is an apt expression. He went on to say: “The economy, the state, the politics of the bourgeoisie and its international relations are completely blighted by a social crisis, characteristic of a pre-revolutionary state of society.” (The Transitional Programme)

In many ways, we are faced with a similar situation unfolding today. In fact, the events in Britain have a striking resemblance to the situation that existed in 1931, which Trotsky described as a pre-revolutionary situation. Despite all the power in their hands, the capitalist establishment have seemingly lost control of the situation. They have certainly lost control over the Labour Party, which they regarded in the past as a useful prop to the capitalist system.

The pendulum swings

Aghast, the strategists of capital are forced to reappraise what is taking place. According to The Economist, a right-wing establishment mouthpiece: “For the past 40 years Britain has been dominated by neoliberalism, a creed that sought to adapt some of the tenets of classical 19th-century liberalism to a world in which the role of the state had grown much larger. It emphasised the virtues of rolling back that state through privatisation, deregulation and the reduction of taxes, particularly on the rich; of embracing globalisation, particularly the globalisation of finance; of controlling inflation and balancing budgets; and of allowing creative destruction full rein.”

So ingrained were these ideas that, in the words of Stewart Wood, a former adviser to Gordon Brown: “One of Margaret Thatcher’s great achievements was to turn a fundamentalist faith in free markets into the hallmark of moderate centrism for the next generation of leaders.”

The Economist goes on to explain that the pendulum has now swung far in the other direction, “grounded in the failures of neoliberalism.” It continues:

“The biggest factor was the 2008 global financial crisis. It hit Britain particularly hard because financial services play an outsized role in the country’s economy, generating 8% of its GDP, and because of its ‘light touch’ regulation. The crisis made Britons significantly poorer: British workers saw their wages (adjusted for inflation) fall by 10% in 2008-14, and are unlikely to see them reach pre-crisis levels until at least 2020. It played havoc with the public finances: faced with large deficits the coalition government chose to cut back on public spending….

“The crisis also undermined the public’s faith in their rulers… Many British politicians also did very well, and not just through their expenses. Politicians such as Mr Blair, Peter Mandelson and Mr Osborne have made millions by offering advice to banks, making speeches and otherwise transforming themselves from gamekeepers into poachers…

“But the financial crisis did not just entrench distrust and anger. It also laid bare longer-term problems in the economy…

“That division was made more poisonous by the fact that the elite did very well in the neoliberal years. In 1980 the average CEO of a company on the FTSE All Share index earned 25 times more than the average employee. In 2016 the bosses earned 130 times more. Between 2000 and 2008 the index fell by 30% but the pay for the CEOs running the firms on the index rose by 80%.

“Privatisation has fed resentment too. Labour’s promise to re-nationalise the railways, which would have been unthinkable ten years ago, is popular today: thank high fares and private profit. The bits of the public sector that stayed public did pretty well by their overseers, too. Mark Thompson, then the director-general of the BBC, saw his pay soar from £609,000 in 2005-06 to £788,000 the next year and £834,000 the year after that. The average pay of a university vice-chancellor is now more than a quarter of a million pounds…

“And all the while Brexit will be hurting the economy. Even Brexiteers concede that Britain will suffer short-term shocks as it renegotiates its relationship with its single biggest market. Most independent experts predict long-term harm as well…

“The result is likely to be a partial reprise of the 1970s. Politics will be paralysed—this time by negotiating Brexit rather than fights with unions. The economy will stagnate thanks to a mixture of uncertainty and business flight. Public services will be squeezed. The roiling discontent that produced Brexit will find new targets. In the 1970s, though, Britain edged its way towards solving the problems of its former dispensation. It is much harder to see it doing the same this time round.” (The Economist, 17 June, 2017)

Turning point

But there is no solution to this on-going crisis. The capitalist system is in an organic crisis, meaning that it has reached its limits as a socio-economic system. It is a system in terminal decline. However, that does not mean it will simply collapse. It will need to be overthrown.

This pessimism in the future of capitalism was also made by Wolfgang Munchau in the Financial Times, the organ of finance capital, who talks of a “historical turning point”.

“The victory of capitalism over communism was the single most formative event for many of today’s commentators and analysts like myself. Our generation has fully bought into paradigms of global financial capitalism, even though we may have been sceptical about the end-of-history euphoria of the 1990s. We celebrated the advent of centre-left pragmatism and a new generation of centre-left leaders.

“Our failure was to mistake the politically expedient for the universally true. The financial crisis turned what outwardly seemed a stable political and financial environment into what mathematicians and physicists would call a ‘dynamical’ system. The main characteristic of such systems is radical uncertainty. Such systems are not necessarily chaotic — though some may be — but they are certainly unpredictable…

“Radical uncertainty is a massive challenge, because you can never be sure of much. In particular, you can no longer be certain that you can extrapolate the trends of the past into the future. Opinion polls are becoming less relevant (even if they were able to produce a correct snapshot of opinion at any one time). Even ultra-modern tools like social network analysis cannot break through into an unknown future. The usefulness of these tools is confined to explaining what went wrong in the past.

“In a world of radical uncertainty, gambles become harder because the information on which they are based is less trustworthy. This is naturally true for investors but also for politicians. It is no surprise that the big political gambles of our time, like the recent referendums in the UK and Italy, have failed…

“Once we accept that our globalised world has characteristics of a dynamical system, many of our assumptions will fall like dominoes, and so will the political parties that cling to them.” (FT, 19/6/17)

Their old model has clearly broken. Capitalism is without doubt a dynamic and chaotic system, where periodic crises of over-production are endemic. Marx explained this over 150 years ago. The strategists of capital, however, are blind to the fact that their system is in a complete impasse, which is causing this profound instability at all levels.

This is the reason for the new convulsions in British society. The Scottish referendum, which had revolutionary overtones; the shock election of Jeremy Corbyn as leader of the Labour Party; the 2015 general election, where Labour was wiped out in Scotland; the Brexit result; and now the unexpected results of the 2017 general election: all these are a reflection of this crisis-ridden system.

The Grenfell tower murder

On top of this has come the tragedy of the Grenfell Tower in west London, where possibly 100 people have lost their lives. This horrific event has produced shockwaves throughout society. Ordinary people have taken to the streets and confronted the powers that be, especially the Prime Minister, Theresa May, who was chased and booed by crowds of angry residents.

The rich and their governments have contempt for the working class, who have been treated like dirt by the authorities, officials and councils alike. “We have no voice,” repeats everyone. But people are saying enough is enough. They are challenging all authority and demanding action now. At the same time, they do not trust the establishment and their cronies.

John Sweeney, a BBC Newsnight reporter, who followed the crowd, talked of a dark mood and possible riots. “Politics has left parliament and gone into the streets”, said a visibly shaken Sweeney. “The BBC is not popular around here,” a reference to the hostility towards the bourgeois media.

There is talk of seizing empty flats and other radical measures. Symptomatically, youth on the streets have even talked of the need for a revolution. John McDonnell, the shadow chancellor, has called for a million people to take action to kick out the government, which has added to the radicalised mood.

Under pressure to be seen to be doing something, Theresa May met some residents in a local church, but when she left was chased by the crowd who shouted “shame!”, “scum!” and “murderer!” Everyone knows that this tragedy was avoidable. It wouldn’t happen to the millionaire estates in the borough, where life expectancy is 14 years more than the poorest estates. The tragedy has prompted questions about austerity and the inadequate quality of housing provision in our cities. But it also raises questions of rich and poor and the rotten system we live in.

Scandal follows scandal! We now find out that May’s new chief of staff is former housing minister Gavin Barwell was the Tory minister who “sat on” a report warning of fire safety risks in tower blocks! The culpability for Grenfell goes right up to the tops of government, further adding to its demise.

According to the Tory Telegraph newspaper, the official response has been “woeful”, while “the government seems to be drifting, rudderless, stunned by the election result and overwhelmed by the magnitude of all the other tasks it faces, not least the Brexit talks that begin on Monday.”

Whatever the government does is wrong. Every step they take backfires. Every wrong word simply adds to inflame the situation even further. They are caught in a vicious spiral. But this is simply a reflection of the political malaise and how out of touch they are from the real situation on the ground.

Tories in crisis

Britain’s political turmoil has become entrenched. Ever since the general election – only a couple of weeks ago – Theresa May has been desperately fighting for her political survival. With each passing day, her political authority is being relentlessly drained away.

Not surprisingly, May’s popularity has been falling like a stone. The Grenfell Tower disaster and her approach to it could be her final undoing. A recent YouGov poll showed that her net favourability rating fell to minus 34 after the election, down from plus 10 in April.

The unprecedented situation has opened up divisions within the Tory party. Osborne's remark that May was a "dead woman walking" is not far off the mark. "It is almost overwhelming,” said one Tory MP. “Things are changing so quickly. The assumption is Theresa May has weeks or months.” A leadership challenge after the summer is entirely likely, with Boris Johnson and others lining themselves up for the top job.

May was accused of taking decisions involving a tiny clique, to the exclusion of her ministers. Senior Tories are now demanding Cabinet government and are flexing their muscles in this power vacuum. The chancellor, Philip Hammond, who has repeatedly clashed with May and her coterie, is now presenting his own agenda, especially on Brexit. His views are more in line with the interests of big business as they seek to maintain access to Europe's markets.

David Cameron has called publicly for a "softer" Brexit, again reflecting the fears of the banks and the City of London. He said May should talk to the Labour opposition to develop a more consensual approach. For obvious reasons, Downing Street is resisting such moves for fear of stirring up a hornets’ nest within the Tory party over Europe. As differences arise in the Brexit negotiations May will be forced to make concessions. In response, the hard line Brexiteers within the Tory party will create huge problems for May’s minority government, which will be blown in different directions. Civil war within the Tory party is very much on the cards.

Corbyn government on the horizon

It is clear that May’s government of crisis is hanging by a thread. It has become a lightning rod for public anger.

In a final throw of the dice, the Prime Minister has turned to the sectarian DUP to haggle for support and a parliamentary lifeline. But this has provoked alarm, even in Tory circles. Sir John Major, the former Tory prime minister, saw a deal as a serious danger to the Good Friday Agreement, which is already in a fragile state. The Stormont power-sharing executive and assembly have collapsed. And any DUP deal will place in jeopardy attempts to restore the government in the North of Ireland.

Even if an agreement with the DUP is reached, which is already proving more difficult than May originally hoped, it will give the government only a two seat majority, hardly “strong and stable”. In the rocky road ahead, the government will be faced with one backbench revolt after another, as well as harassment from an emboldened opposition. It will therefore by a very hot summer politically and the government could fall by the autumn.

Such a scenario will open up the prospect of a new general election within months. Given the unpopularity of the Tories, this opens up the real prospect of a left Labour government under Corbyn. Such an eventuality will throw the British establishment into panic.

A left government would be under pressure from the working class to carry out bold reforms. But it would also be faced with sabotage by big business. The capitalists and bankers will engage in a strike of capital in an attempt to bring it down or bring it to heel.

A Corbyn government would be faced with a stark choice: either bend the knee to big business blackmail or introduce emergency measures to take control over the economy. In this epoch of capitalist crisis there is no room for compromise.

The Labour leaders should do the same thing as they correctly propose in regard to the Grenfell disaster: take emergency measures to requisition empty properties to be used to house the homeless. “In emergency measures, as we saw in wartime periods, you can requisition properties,” said McDonnell. “You will need powers to do it. We have got those powers.

“I would have convened parliament immediately to push more legislation through within 24 hours, if that was necessary. We cannot be in a situation where we have people who have lost their homes struggling to find alternative accommodation and we have properties standing empty. Occupy it, compulsory purchase it, requisition it – there’s a lot of things you can do,” he said.

Absolutely correct! But in the same way, we say if a Corbyn government is faced with sabotage and a strike of capital, they should take emergency measures to take over the banks, insurance companies and the giant monopolies that dominate the economy, and plan them in the interests of the majority. An appeal should then be made to working people to help carry this out by occupying their workplaces and setting up committees to defend the government.

Any attempt to patch up or compromise with capitalism in crisis will end in disaster. That is the lesson of previous Labour governments.

The situation in Britain is now opening up in a way that would have been difficult to predict not long ago. The whole pace of events is accelerating by the day. We have entered a new stormy chapter. It is more urgent than ever that we build the forces of Marxism in order to provide the necessary ideas and determination to ensure a victorious conclusion.