Obama has given in to the most reactionary elements in US politics.  He has opted for deep cuts in public spending which will certainly include reductions in Medicare and Social Security (thus bad for Obama's base), and are certainly dysfunctional for US capitalism.  There's no sense of a long-term strategy for reviving growth or sustainable profitability here.  It has delivered for narrow sectors of US capital, specifically finance capital, but seemingly no one else.  And yet, it's still not enough.  

Standard & Poor's, the credit rating agency, has downgraded the US, which means that the cost of government borrowing will go up, and the ability to repay any deficit will be reduced.  It will also hurt consumer spending, as every American will have to pay more to borrow.  And, as we've already seen in Ireland, Greece and Spain, the attempt to pay it off by cutting spending only further weakens economies that depend significantly on such investment, thus reducing the revenues needed to pay any deficit.  It can only contribute to pressures toward a 'double dip', as the Eurozone crisis brings us back to 2007/8.  Corporate investment is weak, job growth is terrible, wage growth ditto, and consumer spending is fragile because households are still up to their ears in debt.  It would take very little to tip the economy back into crisis.  What's more, Wall Street traders appear to be perfectly well aware of this weakness, as they have been panic selling stocks since the debt deal was reached.  S&P's rationale is as follows: 

This is a raw exertion of class power.  Making it more difficult to repay debts while demanding that the government repay its debts faster is only a reasonable step if you accept that finance capital can do whatever the bloody hell it likes.  During the New York City fiscal crisis in the 1970s, created because lenders refused to roll over debts, a director at thew NY State Emergency Financial Control Board pithily explained: "The demands of the lender become reasonable because the lender is the lender."  A poignant reminder that behind every rationality lies a sociology.  Of course the hedge funds, ratings agencies, banks etc are less than concerned about the effect of underfunded infrastructures such as health and higher education.  As far as they're concerned, spending is too high and they don't much care how it comes down.  Theirs is a very narrow perspective.  But why doesn't the Wall Street establishment seem overly concerned that 'fiscal consolidation' of this kind will compound the fragility of the US economy and possibly tip the world into a new recession-cum-depression?

The pathologies of the US economy are not exactly a secret.  Michael Perelman identifies the following as weaknesses of US capitalism in its neoliberal phase: long-term underinvestment in research and development, low productivity resulting from a shift toward low wage service jobs, more financial vs productive investment, underinvestment in infrastructure, and an irrational military Keynesianism that results in the best innovation and research being conducted in secrecy, hoarded by the Pentagon etc..  Obama has performed sterling work on behalf of the Wall Street establishment, throwing his immense clout behind the bail outs, screening them from criticism, allowing them to continue to act with relatively little serious oversight, bringing them into government decision-making, and basically devising most of his policies with an eye to pleasing investment banks, bond traders and, at the outside, hedge funds.  But what he doesn't done is re-orient US capitalism in a more rational direction.  What he doesn't done is anything that could conceivably rescue the system from its pathologies.  This raises the question of why the wider US ruling class isn't kicking up a stink about it?

David McNally has made a strong case for arguing that US capital, or at least dominant sectors of US capital, find more and more of their investments and sales overseas.  Sluggish growth and profitability within the core capitalist economies has thus been more than offset by dynamism in south-east Asia.  As a result of imperialism, then, much of American capital is at liberty to make significant returns without worrying too much about what happens to infrastructures, consumer power or labour productivity in the US.  And with financialization, much of the US services and manufacturing economy generates revenues from financial investments rather than productive investment.  The centrality of imperialism here may explain why reducing military spending to cover the deficit isn't on the agenda.  It would also explain why the mandarins of Pennsylvania Avenue have appeared to be desperate to placate the ire of Republican tubthumpers, blasting away with biblical fury about the dangers of out-of-control spending.

So, we have an astonishing spectacle.  The political leadership of the dominant capitalist states is now trying to shred the public investment that has hitherto acted as a lifeline to their economies.  They are talking about savagely reducing labour costs, ostensibly to compete with China or India.  And they're being urged on by the banks and business federations despite their awareness of the tremendous peril involved.  This is actually going to undercut the conditions that led to their dominance in the first place.  It's as if they've given up on the idea of having a relatively stable economy with a productive, educated, healthy workforce, and have decided instead to jack up the absolute rate of exploitation, take as much as possible until the economy crashes again, and then raise the flood barriers, hoard their capital, let others take the pain, and allow governments to police the inevitable fall out.  

My assumption was that the austerity project was mainly opportunistic, that it condensed policies long desired by capital, and that it was pushed rapidly in order to preempt the Left and keep the initiative in the hands of the ruling class.  As a result, I anticipated that they would have enough flexibility to backtrack on or delay any measure that looked like seriously endangering their long-term profitability.  They could always return to the 'Keynesian' emergency management of 2008.  Perhaps that is still the best assessment.  But in these circumstances, ruling class opinion is likely to be fractured and highly unstable.  And it's not impossible that as the economy continues in its parlous state, as the ruling ideologies lose their plausibility and traction, and as states lose the ability to coordinate workable policy responses, the weight of opinion will form behind the slash-and-burn option.

I spoke at a packed meeting at the 6 Billion Ways event today, on the subject of class and capitalism and their relevance to politics today. The socialist geographer Dorren Massey was, I think, the crowd favourite, not least for her note perfect impression of Ken Livingstone and her witty and detailed analysis of global capitalism and the effects of financialisation. Anthony Painter was representing for social democracy, I think. Though he accepted that class profoundly shapes people's life chances he is, as he said, more of a Weberian than a Marxist. He was sceptical of the analytical language of socialist critique, which he regarded as alienating, arguing that it was necessary to reach people emotionally. Phil McLeish drew on his experience of Reclaim the Streets and Climate Camp, arguing that it's more effective not to try to talk about capitalism directly, but to isolate processes within capitalism which one can directly mobilise against and have an alternative to. This is the speech which I hastily edited and cut down to a ten or fifteen minutes spiel. Much of it will be familiar to you:

The starting point for this discussion appears to be the question of whether a surfeit of single issue campaigns over specific problems is adequate in itself, or whether these need to be integrated into a broader analytical and practical framework addressed to recognising, opposing and eventually surpassing capitalism. Further, it seems to ask if class can be the concept, or antagonism, around which all of these seemingly distinct struggles can be organised.

First of all, I’ll try to say a bit about what I think class is, and how it relates to capitalism, because I think there’s a real mess of confusing and intimidating conceptions of class out there in the media. These often take class as a kind of status, based on levels of education and the prestige of one’s occupation – this is the version of class that is embedded in ‘social class’ statistics used by most pollsters and market research agencies - or a caste like nobility, or a pseudo-ethnicity, hence the ‘white working class’, a tea-towel memory of the sorts of communities that once exists in some form in the East End and elsewhere. Nor is it improved much by simply talking of class in terms of income distribution. We’re used to the usual shocking statistics concerning income distribution. I’ll cite some here.

In 2009, there were 10 million ‘high net worth individuals’, owning at least $1m in liquid assets – not illiquid assets like housing or cars – which comprises about 0.014% of the population. In the same year, ultra-high net worth individuals, owning at least $30m in liquid wealth comprised 36,000 people, or about 0.0005% of the world’s population. The total wealth held by all high net work individuals was $39 trillion, equivalent to about two thirds of global GDP in the same year. Another way to look at this is that increase in wealth held by this layer between 2008 and 2009 was $6 trillion, equivalent to approximately 10% of world GDP in that year. Now, if we just stopped there, we wouldn’t necessarily have come to an understanding of class. This would tell us about the assets that different actors could bring to bear in the market, and the rewards that they could generate from doing so, but that doesn’t automatically conduce to an argument about class. Perhaps another method will be hinted if I point out that in the UK, between mid-2009 and early 2010, some 89% of all new income produced went to profits – of £27bn produced, £24bn went to profits, and only £2bn went to wages. Mervyn King, the governor of the Bank of England, recently estimated that a combination of factors was producing a steep fall in the value of real wages, such that wages in 2011 would be at best no higher than in 2005. This was the first time since the 1920s that real wages had fallen over a six year period. So, that’s telling us something not only about the distribution of wealth, but about the distribution of wealth as a social product – ie as something that we all produce through our labour – as a result of the operations of a capitalist economy. In fact, one could go further: the share of GDP that goes to wages fell between 1974 and 2010 from 64% to 54%, a ten percent reduction.

Amid a revival of Marx in some quarters, I want to outline the approach that Marx offered to understanding how this works. For Marx, class was not best understood in a static way, by looking at hierarchies and income distributions. Rather, to find class, you had to look at the system as a whole and its evolution, or more particularly, its reproduction. And if you start by looking at how different actors contribute to the reproduction of the system, the existing relations of production as it were, you’ll understand the class system. Here’s a schematic way of approaching this. If you’re a wage labourer, you reproduce the system by selling your labour power as a commodity to a capitalist, someone who owns some means of production, and allowing them to extract a surplus from the exchange – a profit. Unless you subscribe to the ‘golden egg’ theory, a form of magical thinking integral to capitalism, the profit can come from nowhere other than your labour. If you’re a capitalist, you reproduce the system by purchasing capital assets, bringing them together with labour which you also purchase, and taking the commodities thereby produced to sell on the market. If you’re a successful capitalist, you’ll realise a greater share of the surplus produced than if you’re not. But if you just take the money you make, decline to invest it in new production, instead spend on having a good time, going bungee jumping and parachuting like some California teenager, you’re no longer a capitalist. You’re only a capitalist for as long as you’re putting your money into circulation as capital, in order to generate a surplus.

The conflict between these two groups, over the precise way in which surplus will be extracted, and the extent of that surplus, as opposed to wages, is the central conflict in capitalism which one might call ‘class struggle’.

But of course there are middling layers who perform various roughly equivalent roles in the reproduction of the system, who collectively comprise the middle class. You have middle and junior managers, professionals, small businessmen and lone traders. Together these comprise perhaps 20% of the total workforce – a controversial claim, perhaps, when we’re constantly told that we’re all middle class now, even though polls indicate that most of us don’t think of ourselves as such. The ‘old middle class’ mainly comprised small producers and professionals, but this has been in decline for some time, partly because of the concentration of capital, and partly because formerly professional occupations have been proletarianised; the ‘new middle class’ that arose in the mid-to-late twentieth century is just that apparatus of supervisors and managers who were basically built up to contain labour militancy and roll out greater discipline and productivity on the shop floor. They wield surrogate authority on behalf of the owners, just as professionals wield a broader authority in society, contributing to the reproduction of its dominant relations of production and divisions of labour. They’re not simply part of the capitalist class, and profits don’t make up the greater share of their income. But nor are their interests identical with workers, so in this sense they’re middle class and thus susceptible to varying alliances. In the past, professionals were overwhelmingly politically conservative; these days the majority are either Liberal or Labour. On the other hand, the lower middle class, small businessmen and so on, are overwhelmingly Conservative – this group formed the backbone of Thatcher’s electoral base in the 1980s, consistently giving her about 70% of their votes.

Well, the above is just an argument about how we can approach class and its wider relevance to social divisions and thus to politics, but we seem to need something else. Since we’re interested in questions of left-wing political formations, of how our campaigns can win wider support by being plugged into an overarching political framework, we have to find ways to concretely address the issue of how we relate to class antagonisms. There are different ways to operate on these, and you can see contrasting examples in the Labour Party. Phil Woolas, supported by the usual cortege of New Labour ideologues, thought that the best way to do this was to appeal to racism, social authoritarianism – his first election campaign was mounted on the basis of scaremongering about his Liberal opponent’s relaxed stance on drugs – and a politics of resentment, in which he claimed that the main form of racism in Oldham was anti-white racism. What he was trying to do was bring together socially conservative working class votes with economically liberal middle class votes, and build a coalition that way. It’s a microcosm of the New Labour approach which, though it lost 5 million votes between 1997 and 2010, mostly working class and mostly under Blair’s watch, the basic idea of electoral coalition building, mobilise fractions of different classes into a viable electoral constituency, is a basic component of any political strategy.

The basis on which one does so depends, however, on national, regional, local, ethnic and religious contexts. This recalls Marx’s conceptual distinction between the base and the superstructure – the base comprising the aggregate relations of production, and the superstructure comprising, ideological, political and legal relations which give shape to and organise the base. This is rather important – ideologies and identities and so on aren’t merely so much vapour that will be dispelled as soon as the real core of class antagonism asserts itself. Rather, they are formative, they determine to a large extent how class is experienced. I’ll give you an example. The monarchy sits at the apex of a caste of viscounts, military commanders, dames, duchesses, barons, baronesses, knights, clerics and so on. Its relation to the productive system itself is tentative – I mean, the royal family runs successful businesses, but that’s secondary to their role. What the royals do is uphold a caste within the capitalist class, a system based on ‘honour’ – and popular conceptions of ‘honour’ aren’t really important here, we’re talking about gradations within elites, within the ruling class. Now this caste is based to a considerable extent on the history of imperialism, and its relation to today’s Commonwealth, which gives ideological shape to the global position of British capitalism. And it upholds an idea of Britishness that, while a recent invention, has the appearance of longevity and stability. It says, there will be wars and recessions, turmoil and strife, but the firm lives on. Britain lives on. And no good bourgeois wants to go to his grave without having been admitted to that noble caste. Give a CBI member a knighthood, and he will consider himself to have truly lived.

For those of us who work for a living, there are all sorts of other divisions, gradations, and so on, based on occupation, region, religion, ‘race’, gender, sexuality and so on. These differences structure our life chances and our experiences. Now if you take a campaign like Unite Against Fascism, and its sister Love Music Hate Racism. These are single issue campaigns, but they somehow resonate beyond their borders. What they do is operate on a concrete lived experience of multiculture – people who are already living in a hybrid, inter-faith, inter-racial, even inter-national situation, whose life experiences don’t conform to those of a pure white Englishness or Britishness, whose idea of culture is of a dynamic process in which we’re all involved rather than a series of competing blocs. And it seeks to say that this is a far more valuable and vital form of life than the sterile integrationist models of culture in which we’re all supposed to have the same basic values as David Cameron, or Richard Desmond or Her Majesty. In doing so, it’s intervening largely in areas where there has been industrial decay, where there’s a breakdown in employment and trade union organisation and a widespread insecurity that is causing some layers of the population to hark back to a ‘respectable’, stable Britain in which culture seemed uncomplicated and innocent, in which there was public order and discipline in schools, and so on. Such campaigns help the Left by preventing the Right from using racism and insecurity to build a wider hegemonic bloc, preventing them from incorporating new layers of, say, working class voters into their traditional mobilising base. And it also says that there are real issues of social justice and class antagonisms that are being avoided when people talk about race and culture. You can argue about how successful it has been, and I would say it has acted as a retardant, but the point is that this single issue campaign has wider ramifications for where society is going.

So, there are two key ways to relate single issue campaigns to a wider social framework, and that is first to have some sort of analysis of the situation in which you’re working – even if you the campaign isn’t avowedly anticapitalist, it always helps I think to be aware of the ways in which capitalism is shaping the terrain in which these issues arise and often producing them very directly. I don’t think you can talk about the ecological death-trap intelligently without somehow broaching the subject of capitalism, and class. Secondly, one has to be aware of how class and its various lived modalities is shaping receptions of your campaign. Even if you’re not going to say ‘this is a working class campaign’, which in many cases wouldn’t be appropriate, you are trying to work within class divisions to assemble a potentially counter-hegemonic bloc. And you also lastly have to be aware of ruling class capacities. The capitalist class is not a conspiracy or a unified social layer – it’s deeply divided. There are fractions of capital, and within those fractions there will be daily disagreements over proper strategies, as well as conflicting interests. But the ruling class does have some advantages. First of all, it is more cohesive than other classes: the sociologist Michael Useem referred in the 1980s to an ‘interlocking directorate’ – different companies would send upwardly mobile executives to sit on the boards of other companies – which provided the basis for a certain class-wide perspective and for political mobilisation. And business political mobilisation is a huge problem for any left-wing campaign. But it also has the state. The state isn’t just an instrument for the ruling class. Obviously, divisions among the ruling class don’t produce any single use to which such an instrument would be put. But while there are many capitalists, there is only one state, and what the state does is provide a certain amount of unity and cohesion to that class, partly by allowing a segment of capital to acquire hegemony, consensual direction over other fractions of capital, and impregnating the state with its imperatives and motives, and partly by placing statesmen and intellectuals in a position to give ideological direction to the capitalist class. As such, you end up with a state that almost invariably maintains, and furthers, the dominant relations of production, meaning that the state will usually not be on your side if you want to somehow curtail capitalist interests.

Those are some of the ways in which capitalism and class should shape our appreciation of political campaigns.

***

As usual in these events, the discussion afterward was far better than the talks, ranging from Egypt to the cuts, Wisconsin, Ken Livingstone and the Olympics, the politics of climate change, the wage labour relation, and so on.

The annual Merrill Lynch Cap Gemini World Wealth Report is a serious study of liquid, investable wealth held by the richest people on the planet: the High Net Worth Individuals who have at least $1m liquid wealth, and the Ultra High Net Worth Individuals who have at least $30m, both "excluding primary residence, collectibles, consumables, and consumer durables". As such it constitutes an invaluable starting point for understanding who the ruling class are, where they live and how they hold their wealth. This is from the 2010 wealth report (I'm afraid there doesn't appear to be a working online file):

The world’s population of high net worth individuals (HNWIs) grew 17.1% to 10.0 million in 2009, returning to levels last seen in 2007 despite the contraction in world gross domestic product (GDP). Global HNWI wealth similarly recovered, rising 18.9% to US$39.0 trillion, with HNWI wealth in Asia-Pacific and Latin America actually surpassing levels last seen at the end of 2007.

For the first time ever, the size of the HNWI population in Asia-Pacific was as large as that of Europe (at 3.0 million). This shift in the rankings occurred because HNWI gains in Europe, while sizeable, were far less than those in Asia-Pacific, where the region’s economies saw continued robust growth in both economic and market drivers of wealth.

The wealth of Asia-Pacific HNWIs stood at US$9.7 trillion by the end of 2009, up 30.9%, and above the US$9.5 trillion in wealth held by Europe’s HNWIs. Among Asia-Pacific markets, Hong Kong and India led the pack, rebounding from mammoth declines in their HNWI bases and wealth in 2008 amid an outsized resurgence in their stock markets.

The global HNWI population nevertheless remains highly concentrated. The U.S., Japan and Germany still accounted for 53.5% of the world’s HNWI population at the end of 2009, down only slightly from 54.0% in 2008. Australia became the tenth largest home to HNWIs, after overtaking Brazil, due to a considerable rebound.

After losing 24.0% in 2008, Ultra-HNWIs saw wealth rebound 21.5% in 2009. At the end of 2009, Ultra-HNWIs accounted for 35.5% of global HNWI wealth, up from 34.7%, while representing only 0.9% of the global HNWI population, the same as in 2008.

The total liquid wealth of the rich in 2009, at $39 trillion, was actually more than two-thirds of world GDP in the same year, almost triple the GDP of the US, and nearly ten times that of China. Another way of looking at it is that the increase in liquid assets from 2008 to 2009 held by the rich was about $6.5 trillion, more than 10% of total GDP in 2009. This was in a year in which world GDP actually shrank by 0.8%.

The distinction between "economic and market drivers of wealth" is very important, and very telling. Most of the new wealth held by the rich was, as you can see, not produced by economic growth, but by stock market capitalisation. In other words, market relations, sustained by state intervention, facilitated the transfer of wealth from the working class to the rich at a time when most of the world's economy was such that the direct exploitation of labour could not sustain high profit rates. That's what the bail-outs did; it's what they were intended to do. Another intended consequence is that there were not only more high net worth individuals, 10 million of them globally (0.014% of the world's population), but the 'ultras' did far better at increasing their share of liquid assets than mere millionaires - thus wealth became even more concentrated than it had been, among a mere 36,300 people, or 0.0005% of the population. The corollary of this has been, and will continue to be, a general decline in the living standards of the working class in most of the advanced capitalist economies: at the same time as the wealth of the richest grew, global unemployment rose by 14.4%.

The role of finance-capital in surplus-extraction varies considerably, of course - and here, China's contribution to the reproduction of the world's ruling class stands out. While financial bail-outs (temporarily) solved many of the problems of the rich in Europe and North America, growth driven by unprecedented spending commitments in China (and, to a lesser extent, India, whose stimulus actually began before the crisis) kept the rich from the Asia-Pacific region in dough, and contributed to the wealth of the US ruling class. This could happen partly because China's growth rates were, like those of many 'newly industrialising countries', already robust. This meant that China's per capita stimulus was greater than that of any other country, and as such accounted for 95% of economic growth in the first three quarters of 2009. But it was also in part because state ownership of the financial and banking sector in China has enabled the government to have more control over the coordination of its stimulus and its effects.

Much has been made of the regime's policy of driving up wages. In fact, what has happened is that China's stimulus enabled an increase in the total amount of surplus value, both by increasing the total employment of labour and by increasing the productivity of labour. Productivity growth has offset wage growth, thus allowing an increase in working class wages and living standards to take place, while continuing the long term strend for wages to decrease as a share of GDP [pdf]. The result is that the top 0.4% of the population controls 70% of the country's wealth. Chinese growth has actually depended on wages sliding as a share of national wealth, and the world capitalist system would be a lot worse off if that hadn't continued to happen. Indeed, according to a World Bank economist, China's stimulus alone contributed 1% to world growth in 2010 - an extraordinary figure. Its GDP by purchasing power parity is already larger than the US by some calculations. China's growth is enabling its ruling class to dramatically increase its demand for luxury goods, accounting for 49% of luxury market growth as the rich spoil themselves with the usual array of jets, mansions, and yachts. But it has also substantially paid for US growth, through direct investment and sovereign debt purchases.

The role of China's working class, the largest in the world by far, in the reproduction of the world's ruling class has, of course, been steadily growing since 1978. The interesting question now is whether this can continue. The World Wealth Report expects future growth to be led by the Asia-Pacific region, "excluding Japan" - despite the latter's substantial stimulus. This obviously means the rich expect China to continue to drive growth and thus profitability. During the last thirty years, China's growth rates have been significantly ahead of its record following the 1949 revolution, and more than double the world average. Its share of world manufacturing rose from 2 to 18%, picking up the slack as manufacturing jobs were lost in Europe and the US. Its expansion fuelled a regional growth surge, eg allowing Japanese capital to increase profits by outsourcing to Chinese labour, and was a significant driver of world growth since 1982.

But the Chinese economy is accumulating tremendous spare capacity as a result of its stimulus package, adding to a global problem and endangering its future ability to produce sustainable growth. It has constantly had to counteract overheating, and may have to substantially reign in growth just when the rest of the world's economies are doing exactly the same, thus undermining its ability to lead a new phase of capitalist growth. The tendencies toward over-accumulation and declining profitability are already evident. Despite the hype about wage increases, real wages are already so low (manufacturing workers in China get less than 5% of the average in the US) that they can't go much lower. Even if they could, the effect may be to contribute to global deflation, thus harming the economies on which China depends for its export markets. China may thus be closer to the end of a long-term wave of growth than the beginning - that growth having been predicated on a now expired global wave of neoliberal expansion based on 'primitive accumulation' and the subsequent record expansion of the country's working class.

Whether and however the ruling class succeeds in overcoming the present barriers to further accumulation, it's hard to see future waves of growth proceeding in this self-same way. Instead, for the foreseeable future, it looks like there will be heightened competition over a diminishing share of surplus value. And Obama has just announced that America's approach in this will be a revamped 'open doors' policy, advised by a new panel headed by the chief executive of General Electric. This will basically involve coercing other economies into accepting US exports at whatever cost to the national or regional economy being thus prised open. It probably presages a new wave of aggression in the global south, especially where popular movements succeed in establishing governments that are interested in independent development based on some concessions for the working class. One would also expect things like this to happen more often, as white supremacy in its various forms is a well-established praxis for weakening the bargaining power of labour and breaking the political threat from the Left. And, especially in a period like this, when growth is thin on the ground and profits have to be wrested through acts of accumulation-by-dispossession, that is how the ruling class makes its money.

Capital represents itself to us principally through its advertising. Its presence is rendered in strictly non-materialist terms. Idealist, magical, or even downright theological thinking is at the heart of capitalist ideology - Smith's 'hidden hand', the religious mandate for 'improvement' of the earth in Lockean property theory, the 'reward-for-abstinence' theory of profits, and the 'golden egg' theory of investments and savings. So when capital represents itself to us, it is not as a set of material processes but as a benign Geist, a bearer of anthropomorphically enlarged humane values, an atmosphere of well-being, etc.. This study of turn-of-the-century corporate advertising and the ideological landscapes created by capital, devised by the author of this marxist analysis of Mork & Mindy, describes the self-representation strategies of capital as follows:

One of the projects I'm working on at the moment is the subject of work under capitalism. I have it in mind to write the kind of book that insubordinate types such as yourselves could take to work. It would be a sociological satire, a users' guide to the workplace, a good way of wasting company time, and a resource for the bored, stressed and bullied. It would be a work of explanation and incitement combined. Are you interested yet?

One aspect of the subject that always comes up is the way in which politicians speak of work as dignifying and emancipating. Whether you're a single mother, disabled, or simply unemployed, work is the answer. There's an important sense in which this is true. If you're not in a workplace, there's no one to socialise with, organise with, or fight against. You're stuck with your narrow horizons, enforced by a miserly income. In work, you can get a certain measure of independence and self-respect - sociological studies tend to show that this is what people value about work, and it's what attracts women to jobs even where they are paid less than men, even when the job is emotionally or physically taxing. It's an escape from house-bound drudgery.

But work under capitalism can never be so unambiguously liberating, and I would hesitate to participate in the paeans without at least considering the matter of exploitation, and the way in which oppression can be intensified when intersecting with exploitative processes. In this respect, there was an interesting discussion at yesterday's Marxism meeting featuring Nina Power, Hester Eisenstein and Judith Orr. Those of you who have read Nina's book will know that it is a witty, trenchantly iconoclastic and incisive re-thinking of feminist mainstays on subjects from equality to pornography, its provocative opening line setting the tone for the combative, aphoristic style of exposition that follows. The chapter on the feminization of labour and the arguments therein were the source of mild controversy at yesterday's panel. To be brief about it, the argument is about the limits of female-emancipation-through-work.

The tremendous changes in the lives of women since WWII, with their increasing absorption into the labour force, is in very obvious ways a step forward. The erosion of the traditional capitalist patriarchy in the form of the nuclear family, which allotted to women a largely passive, housebound role in the reproduction of society, is a development that reactionaries have every reason to regret. When Frank Field MP recently said something to the effect that "single mothers don't need benefits, they need husbands", he was mobilising this retrograde, patriarchal version of social solidarity to justify the coming cuts in welfare and public services that working class women especially depend upon. (The Tories are now reportedly upping the ante, looking for up to 40% cuts across departments, though this may be an effort to make 25% cuts look moderate by comparison). Field explained that he was opposed to the emphasis on getting single mothers into work, and that the real issue was to target 'shirking fathers' who refused to find work. He blamed them for the high number of single parents, and said that they should lose their benefits altogether if they refused to take a government offer of work. This would coerce fathers into being productive and responsible, restore the cohesive family unit and serve mothers better than work. Now, this is a break from New Labour's agenda of coercing single mothers into jobs, but it is a break to the right. It is also significant that this anti-feminist, traditionalist, pro-family discourse is being used to bully working class men. It doesn't at all free women from the burden of bearing sole or key responsibility for the raising of children. In fact, it reinforces that role by attempting to restate the traditional status of men as key bread-winners. But what it does is attack the idea that motherhood is a social responsibility, that the feeding, education and raising of the future labour force is something that society has an interest in, and has to share the burden of. It individualises what is a social issue, and in this way discloses the hard, Thatcherite kernel at the heart of the Tories' "Big Society" soft-sell.

Still, despite the potential for emancipation that work can offer, the persistence of oppression reflected in such features as structural wage inequality suggests that it has definite limits. These limits express themselves in a number of ways. First of all, as insecurity, and the way in which this is turned into a virtue ('flexibility', etc). Secondly, as occupational typecasting, in which women are encouraged to take roles that involve emotional labour, 'caring' and 'nurturing' jobs, jobs requiring communication skills, and so on. Thirdly, as the sexualisation of labour, in which women are required to consider their sexuality - not merely their bodies, but their ability to be flirtatious and charming - as part of their job skills, part of being 'professional'. Employers don't expect to have to shout at their female employees to dress nicely; they expect women to come prepared, knowing the drill, internalising such requisites as part of their own career mission. And this applies outside work as much in the workplace, ie in social networking sites, which employers and recruitment agencies regularly check to dig up information on CV submissions. Women have to see themselves as walking advertisements for themselves. And finally, perhaps, as a conflict between production and reproduction, in which women are expected to manage child birth and rearing in ways that don't burden the employers. This is just one more way in which women are expected to augment the exploitation process by pre-emptively exploiting themselves, by assuming extra hours of labour, by accepting deductions from their income to pay for childcare. The 'labourisation of women', as Power puts it, is a process that has intensified exploitation and reinvented gender oppression. That it doesn't have to be that way, and that the organisation of women in trade unions offers the beginnings of a way out of this deadlock, suggests that these limits arise in part because of a particular organisation of work, perhaps because of the individualisation of work in the neoliberal phase of accumulation, but more broadly because it's capitalism, and capitalism is most efficient when it is most exploitative, and when that exploitation is augmented by oppression.

I suggested previously that the phrase 'work-life balance' inadvertently revealed something about work under capitalism, namely the fact that the majority of one's waking hours are not spent alive, but labouring in a sort of undead capacity. If work and life are separate and opposing modes of existence, then the tendency of the former to increasingly dominate the latter outside of formal working hours, structuring our 'fun', commanding and regulating our socialisation, governing how we conduct ourselves in public, etc., means that capitalism is almost literally sucking the life out of us. That this process is advancing most rapidly for women confirms that the feminization of the proletariat is not automatically a liberation for women - not without the struggle and solidarity it makes possible.

There's a complimentary, but critical, review of my latest book in the summer edition of the Socialist Review here. Though the reviewer considers the book "brilliant" in some respects, he takes issue with one aspect of it, namely that pertaining to the balance of class power in the UK. Rather than take the huff, as would be my natural inclination ("does he know who I am?"), I will take this as an opportunity to discuss what The Meaning of David Cameron does and does not set out to claim.

First of all, the reviewer is quite right to say that the power of organised labour has not been completely "broken", but it is a misunderstanding of the book to think that it says otherwise. Were that my contention, the passages in the book dealing with union resistance to New Labour, even acknowleding that there continues to be a trade union movement at all to speak of, wouldn't make a great deal of sense. I suspect that the only context in which it is likely that such a state of affairs would actually come about would be under fascism. There are degrees, however. The reviewer is right to say that union density hasn't reached the lows of the 1920s, when it reached just 23%, but unionised workers currently represent less than a third of the workforce, a fall from a peak of 55% in 1979. It is true that this is partly because the workforce has expanded, but the inability to reproduce past rates of organisation is part of the problem - and I suggest that it is in part due to the recomposition of the working class and the defeats that I mention in the book. The recomposition of the working class, by the way, did not just entail a shift from manufacturing to services. It was a spatial recomposition, with production increasingly shifted to geographical areas with lower rates of unionisation, both in the UK and internationally - think of the shift in production from the 'snowbelt' to the 'sunbelt' in the United States, for example. It is true, as the reviewer says, that manufacturing has not always been the vanguard of the working class, and that the sharp falls in manufacturing employment doesn't doom working class organisation. But the rate of organisation that has persisted in manufacturing has not been reproduced in the service economy - as yet. And I certainly don't suggest that "the basic social contradictions" (ie, class conflict) have somehow disappeared with the shift from manufacturing - quite the reverse.

The militancy of the working class, moreover, has experienced a precipitous decline, with days lost to strike action reaching an historic nadir in 1998. During the 1920s, when union density was historically very low, the lowest number of days lost to strike action was 1.17m in 1927 - this, a year after a record high of 162.2m in 1926. In 1998, the number of days lost to strike action was 282,000, and this in a decade in which the number of strike days rarely exceeded a million. In the 2000s, the figure increased somewhat, but still remained historically low, peaking when New Labour picked a fight with a group of public sector workers. The figure of 900,000 strike days lost in 2004 was at the time considered unusually high, because it doubled the figure from the previous year. The loss of more than a million days in 2007 was also unusually high for the last decade. Last year, less than a half a million days were lost to strike action, in the middle of huge job losses. Would it not be fair to say that, to some degree, relative to its previous condition, the British ruling class succeeded in breaking the power of organised labour?

Secondly, I do maintain that neoliberalism as a class project was overwhelmingly "successful in its own terms". The attack on the working class, some of whose effects I discuss above, enabled a new spurt of accumulation by suppressing wage claims, permitted successive rounds of efficiency 'downsizing' and 'rationalising' (because of the reassertion of "management's right to manage"), produced new systems of work discipline and organisation that increased the rate of exploitation, enabled/compelled social democracy to adapt to neoliberalism, and opened up new avenues for profitable investment in previously socialised sectors either through full privatisation or private finance initiatives. The result is that profit rates in the advanced capitalist countries, while never recovering to their historically anomalous pre-1973 levels, did improve dramatically on the lows resulting from the systemic global crises in 1974-5 and 1980-2, and a new period of growth - centred on south-east Asia - was initiated. In the UK, that period of growth was interrupted only once before the credit crunch, with the 1991-2 recession. In global terms, there have been localised, and sectoral crises, but there hasn't been the kind of systemic, global crisis of capitalism seen in the mid-70s and early 1980s until the collapse of Lehman Brothers. This is not to say that neoliberalism didn't throw up its own problems, perpetual instability and the constant requirement for state intervention to shore up finance among them. Nor does it imply that the pace of neoliberal accumulation wasn't shaped and constrained by continued opposition - New Labour's battles with the PCS union show that it has been. But it does suggest that neoliberalism succeeded in its principal aim of restoring profitability by increasing the rate of exploitation.

While I'm on this subject, one aspect of this story that I don't give due attention to in The Meaning of David Cameron is imperialism, and the war against the global South which enabled a hugely increased rate of exploitation outside of the core capitalist economies, thus enhancing profit rates without necessarily resulting in stronger growth or robust rates of investment inside the core economies. Obviously, the narrative's focus is mainly on the United Kingdom, but a large part of the recovery in profit rates for British capitalism was due to Brittania's ability to hang on the coat-tails of the American empire. That is an aspect of the neoliberal assault that you may wish to bear in mind when reading The Meaning Of....

Thirdly, I referred to neoliberalism as a "hegemonic" project, but I did not foresee that this would be a controversial point. I think I'm using the concept of hegemony in its conventional marxist sense, first popularised by Plekhanov and taken up by Gramsci. It accounts for the way in which ruling classes in bourgeois democracies achieve the acquiescence of workers to their rule which, though the threat of force always lies behind it, is not merely coercive. Gramsci noted that mature capitalist democracies are not usually susceptible to sudden, catastrophic revolutionary assaults because behind the armed forces of the state lies a robust, complex civil society bloc that is capable of conserving the status quo. The rulers didn't merely have the armoury of the state to rely on: they had hegemony. A hegemonic bloc is one that incorporates fractions from multiple classes into a particular mode of class rule, not merely by winning them over in the battle of ideas, but by at least appearing to meet the interests of the incorporated groups at some level. In this context, I note that Thatcher, though she admired Pinochet, acknowledged that she could not import his methods to the UK. It would be "inappropriate", she said. Hence, it was not enough to defeat organised labour, nor was it possible to create a "police state" as some alarmed critics claimed - she had to produce a constituency favouring her policies, ostensibly benefiting from them, that extended well beyond the ruling class. The hegemonic bloc created by neoliberalism comprised high finance, internationally oriented services and manufacturing industry owners, a section of the professional middle class, most of the petit-bourgeoisie and a segment of workers. This doesn't mean that the ruling class got everything its own way. There remain counter-hegemonic forces, which are not negligible. But that is the normal state of affairs in a hegemonic regime.

Lastly, when I wrote of Cameron benefitting from a "taboo on class politics",this was in a context in which I pointed out that the majority were unconvinced by Blair's "the class war is over" spiel, that most still identify as working class, that class is still the crucial motivator in voting behaviour, and that Cameron provokes a class hatred which Labour has sought to capitalise on. So, my argument isn't rebutted by pointing out that class hatred helped deprive Cameron of an overall majority. The "taboo" I speak of doesn't really operate among the majority of people, but among the intelligentsia, politicians and the commentariat. For example, the sociologist Huw Beynon has pointed out that just when a record number of people registered the view that there was a class war taking place in Britain, social scientists, historians and other scholars were coming to precisely the opposite conclusion. Such shifts in intellectual culture profoundly shape normal political discourse, in that its products are then filtered through the capillaries of the capitalist media, pundits start to echo its conclusions, and the majority of elected politicians who worry about being demonised by the media soon learn to obey its norms. The New Labour politicians who expressed anxiety and embarrassment over the party's 'class war' strategy are an example of what I am talking about.

Now, I think the reviewer's overall concern is that I may be doom-mongering, offering a stilted perspective that oversells the achievements of neoliberalism and thereby precludes the possibility of working class resurgence. But as I have sought to outline, that rests on some profound misunderstandings of what I have written. Empirically, the situation of the working class and the Left is difficult, but there is no reason why this can't be reversed, provided the problem is given due recognition.

The global financial crisis that began in 2007 was clearly about money, credit and finance. For mainstream economists and politicians, from neoliberals like John B. Taylor at Stanford, and Australian opposition leader Tony Abbott, through pragmatists like Barack Obama and Australian Labor prime minister Kevin Rudd to Keynesians and social democrats like Paul Krugman at Princeton and John Quiggin at the University of Queensland, this was the full story.

They debate whether the nature of markets or the inadequacies of government regulation led to the hysterical speculation of the mid 2000s and then the breakdown of the global credit system. The notion that the causes of the crisis may lie in the way in which capitalist production is structured by class relations doesn’t cross their minds.

The mainstream accounts of the crisis are wrong, but they seem to make sense in three ways. First, they offer more or less plausible explanations of movements in prices, supply, demand and economic indicators. Out of these they spin happy-ever-after stories about what needs to be done to overcome the problems that led to the crisis.

They operate, secondly, in the interests of the capitalist class by justifying practical steps to sustain profit rates. This may be by preventing rapid economic collapse, through government stimulus spending. Or, on the other hand, they may urge governments to reduce their deficits, by cutting back on public spending, employment and living standards, in order to restore profits.

Although rival schools of mainstream economics don’t acknowledge it, the differences between these approaches are mainly questions of timing: when the necessary cutbacks will lead to minimum pain for bosses.

Finally, plausible, but superficial explanations of the crisis also serve ruling class interests by concealing how capitalist exploitation necessarily leads to economic breakdowns like that of 2007-2009, when the capitalist system cannot even maintain working class living standards. As the Communist Manifesto put it, the ruling class ‘is unfit to rule’ because it cannot even guarantee the survival of the wage slaves it exploits.

Profits are only restored through a crisis when large numbers of people are thrown out of work as production is ‘rationalised’, productive resources lie idle and working class living standards are slashed by employers and governments.


Commodities

Capitalism is an impressive building; its impressive outer surface is money and movements of prices on markets. But the vital structures of capitalist production make that façade possible and keep it in place. The link between them is the commodity form, the way most of the things we need, food, clothing, shelter, transport etc have a price and are bought and sold.

For millennia, money has been an aspect of economic activity. Societies which consistently make commodities need money. Commodities are things produced for sale rather than to satisfy the immediate needs of producers or those who exploit them by taking what they have made. In class societies before capitalism, the producers were generally peasants, occasionally slaves. The main exploiters were the senior officials of states which imposed taxes, feudal lords who extracted rent, or slave owners.

Money arose as the producers themselves or their exploiters traded commodities. It performed vital functions that were impossible if trade was only based on barter. Initially money took the form of a special commodity, particularly gold, that had value itself because, like other commodities it was the product of human labour. The money commodity served as a ready standard for measuring the prices of all other commodities. And, under capitalism, price ultimately derives from the amount of labour time that goes, on average, into producing commodities. It was the ‘universal equivalent’ that could also be used to buy any other commodity, that is, it was a means of exchange.

Under capitalism, most production takes the form of creating commodities and the commodity form is a feature of the production process itself. People sell their ability to work, their labour power, as a commodity to bosses. The distinction between labour power and labour is important here. Employers extract as much labour as they can out of the labour power whose control they have purchased, by making sure that workers don’t slack off by taking long breaks, going slow or otherwise wasting time that belongs to the boss.

Labour power is a commodity like all others in that its value is the amount of labour that went into making it, in the form of the effort to make the commodities necessary for the reproduction of human beings. Not only food, childcare etc but also the costs of learning specific skills used at work.

But labour power is also different from other commodities. It is human creativity for sale, capable of generating more value than it took to produce it in the first place.

When it is set to work, bosses owns the right to direct that labour power as well as the tools and raw materials it uses to produce new commodities. The new commodities, and the additional value embodied in them, created by human labour, likewise belong to the bosses. That’s where profits come from.

In class societies before capitalism, exploitation was pretty obvious: lords, state officials or slave owners simply took away things you produced or what they were worth in money. There was no exchange of equivalents; just a rip-off, ultimately backed up by the threat of violence. Under capitalism, exploitation is concealed by the sale of labour power. The exploitation happens through the exchange of commodities at their value for money rather than because exploiters get commodities or money for nothing.

The commodity form and money are capitalism’s self-camouflage. Economics seems to be all about them, but they conceal the exploitation of wage labour, that is class relations, in the production process.

The owners of wealth do not always immediately reinvest the value that they have accumulated. They may be saving up for a new project, or repetition of an old one, or holding off for better conditions before they invest again. In these circumstances, money serves as a convenient store of value. This was straightforward when there was a special, durable money commodity.


Money

States’ regulation of money was, from long ago, an aspect of managing the commodity-based economy of their territories and also of funding their own activities. Developed capitalism has progressively dispensed with the money commodity. Initially states supplemented the money commodity with symbols for it. Eventually, the coins and notes that we are used to keeping in our pockets and purses, became the only valid form of money within each state’s boundaries. When such symbolic money can no longer be converted into the monye commodity it is ‘fiat money’. The money we use today is fiat money; gold no longer plays a role in the monetary system.

When there are credit arrangements, under which commodities can change hands at a different time from the payment for them, money is a means of payment. This creates credit money, promises to pay that are distinct from cash which might only be needed when contracts are finally settled. As economic activity grew in scale and complexity, banking emerged and credit money became increasingly important. Credit money was created by those involved in trade and banks, which held otherwise idle reserves of those who were not themselves using the value they had accumulated, as deposits and lent them out.

Internationally, the money commodity facilitated trade across the boundaries of states. Just as states eventually replaced commodity money with fiat money, financial institutions and states have accepted some national currencies as the means to settle international accounts. They are known as ‘reserve currencies’. Since World War II, the most important has been the US dollar, even after the link between it and gold was severed in 1971.

But the acceptability of a reserve currency can change. The rise of the Euro as a reserve currency to rival the US dollar, for example, has recently been undermined by economic crisis in the Euro zone. The weakness of the economies of Greece and other European Union countries with very high levels of government debt have led to worries about stability of the Euro.

While money pre-dates the dominance of the capitalist mode of production, the transactions, planning and allocation of resources of capitalism are impossible without money, credit and finance (the activities of banks and similar institutions in directing funds to where they will earn the greatest return).

Although indispensable for capitalism, credit and financial activities do not create new value. Interest and financial profits derive from new value created in the productive sector of the economy. Capitalists in the productive sector who borrow have to hand over a share of their profits to lenders in the form of interest for the right to use the lender’s capital. States which borrow have to pay interest out of their revenue which ultimately comes from the productive sector. And workers have to shell out some of their wages to keep up with payments on mortgages and other loans.

With the transition away from reliance on the money commodity at home or in international transactions, the stability of currencies and consequently credit and financial arrangements more than ever relies on the confidence capitalists have in them. This trust is based on the strength of the economies with which the currency is associated and especially on the power of the state that backs it to ensure that it can be exchanged for a predictable quantity of real value embodied in commodities, even though it has no intrinsic value itself.

So, even though the United States was at the centre of the global crisis of 2007-2009, during the periods of greatest uncertainty the US dollar was bought up as a ‘safe-haven’ currency. The unparalleled killing power of the armed forces of the USA guarantees the value of the dollar.


Credit and finance

The complications of credit and financial systems mean that there can be all kinds of glitches. The failure or even worries about a single corporation can trigger a contraction of credit. Lenders may be reluctant to provide funds until they can work out whether the failure exposes potential borrowers, as creditors or customers, to problems. In a similar way, problems in one financial institution can ripple out to others. Contractions in credit can slow down or stop growth in the production of real commodities, or even lead to less being produced.

The net of businesses exposed to such problems has been spread wider by new mechanisms to spread the risk that credit and other contracts won’t be met, in the form of insurance and hedge funds. When problems are small and their dimensions easy to determine, this cushions their impact. If the failures are large and both their scale and implications are unclear, these efforts to spread risk end up spreading the crisis.

In the United States, financial institutions during the early and mid 2000s gambled that housing prices would rise for ever. They made ‘sub-prime’ loans to people who would never be able to pay them back. Then, to spread the risk, the loans were bundled together and sold off as securities. People with mortgaged houses had to pay interest and repayments to the owners of the securities who were also entitled to the revenue from sale of the home if mortgage payments weren’t made.

Such securities are a form of ‘fictitious capital’, traded as though they are real commodities with an intrinsic value. In fact they are only the right to an income stream that arises from a financial arrangement rather than from the use of the money to directly generate new value in a real production process. Not only mortgage backed securities, but also shares and government bonds are forms of fictitious capital.

Financial instruments can be even more complicated. ‘Collateralised debt obligations’ are bonds, promises to pay interest at a specified rate, issued by companies whose assets are holdings of other loans, bonds or securities. This is not to mention derivatives. They can be futures or options: contracts to buy or sell, or the rights to sell or buy at specified prices real commodities, amounts of particular currencies, shares, bonds etc at a specific point in the future. Or they can be swaps: agreements to exchange the income steams from different financial assets.

Shares were initially designed to raise money for productive investment; bonds as a form of readily tradeable loan; and more arcane instruments as, perhaps, means of spreading risk. But most of the trading in fictitious capital today is speculative: gambling in the hope of making gains at the expense of other players in the market. It does not create new value and just shuffles around existing value, held by other speculators or by productive capitalists.
The rapid growth of financial speculation has meant that the implications of problems in one geographical area or economic sector for the rest of the economy are ever harder to work out before the crisis hits.

But the healthier the real economy which underpins the tower of financial activity, the more rapidly will local and sector specific problems be sorted out. Extensive new avenues for highly profitable productive investment can offset the jitters and losses caused by the failure of expectations in credit and financial markets.


Economic crisis

The rate of profit in the advanced capitalist economies has been trending downwards for more than four decades. The scale of speculative financial activity in the lead up to the current crisis was itself is a consequence of limited outlets for profitable productive investments.

During the first phase of the crisis, from 2007 to 2009, the problems began in the US housing market and spread throughout the global financial system, leading to recessions and the economic contractions in most countries.

Credit froze up across the planet as banks stopped lending to each other, or anyone else, out of fear that borrowers might hold toxic assets like mortgage-backed securities and therefore be unable to pay back loans. Lack of credit and worries about the future led businesses to suspend investments, individuals to put off spending that could be delayed.

Governments which could afford to spent big to keep their economies, so reliant on credit money, going. In the USA, Australia, Japan, Germany, Britain, China and other countries, governments borrowed, created more fiat money in the form of central bank funds or dipped into reserves to shore up, bail out or take over banks and other financial institutions. To promote consumption, they encouraged borrowing by cutting interest rates, gave cash handouts to citizens and spent up big themselves. The Chinese regime set lending quotas for banks.

Only poorer governments, of necessity, did not engage in stimulus spending. This was the approach extreme neoliberals recommended everywhere. That approach certainly sent less efficient businesses to the wall and put pressure on working class living standards. But it risked killing off so many firms that the remainder would not be able to drive an economy-wide recovery for many years.

If real economies are fundamentally sound, then stimulus policies should jump start robust economic growth. Both state revenues and real estate prices would rise. Governments would use their increased tax income to pay off debt. Public and private financial institutions would sell off real estate without making phenomenal losses. The Keynesians would proclaim the truth of their dogma, the pragmatists the wisdom of their policies.

Instead, a second phase of the crisis became more obvious this year. As the Greek economy crumbled under the weight of public debt, the social democratic government began to attack working class living standards by cutting wages in the public sector, pensions and spending on health, education and welfare.

Now there is a growing consensus that cutting government deficits is the key to maintaining financial stability and thus restoring prosperity.

Spain, likewise under a social democratic government, but also conservative regimes in Germany, Britain, Italy and France are inspired by this dogma.

Rudd has promised to do the same; Abbott to do it harder and faster. Obama is moving in the same direction.

Financial austerity measures did not begin in 2010. In countries particularly hard hit by the crisis or with weak economies, the cuts began much earlier, for example in Iceland, Ireland and the Baltic states.

A return to financial stability won’t solve the basic problems that led to the crisis: you can’t eat a collateralised debt obligation. Its fundamental causes lie in the displacement of living labour by machinery and equipment the key to raising productivity under capitalism driven by competition among capitals and hence a lower average rate of profit across the economy. But efforts to cut public spending are part of a solution to the crisis in the interests of bosses and at workers’ expense.

The other elements of this solution are squeezing more profits out of workers and allowing more relatively unprofitable businesses to go bankrupt. Even as some governments engaged in stimulus spending during the early stages of the crisis, employers across the world used uncertainty about jobs and rising unemployment to hold or push down wages and increase workloads.

As governments economise on their spending they will be less able to bail-out weak capitals. This means their assets can be bought up cheap and set in motion again but risks more widespread of corporate collapses and the possibility that idle machinery, equipment and buildings will just be allowed to rust and rot alongside unemployed workers.

The alternative solution, workers’ revolution, is not risk free either. But it holds out the promise that we can get off the deadly, profit driven ferris wheel with its booms and slumps, and start producing to satisfy human needs.

I am hearing that today's 'Right to Work' conference was very large and very successful, though I don't know how it compares with Manchester. Obviously a major theme of the day was the BA strike, and workers from British Airways were present to explain their grievances and form links with other groups of workers represented at the conference. I also hear that about 200 people, angered by the treatment of BA workers, departed for the ACAS headquarters to stage a protest. As I wasn't there and haven't spoken at length to anyone who was, I don't feel confident in talking about the protest in any detail. What I can assert with reasonable confidence is that the protest did not disrupt negotiations, as is alleged by practically every media outlet I have seen, which predictably avoids the substantive issues behind the dispute and the protest. This is because the BA management is not negotiating, and the union leadership is neither in a position to compel them to negotiate, nor is it inclined to. It is effectively drafting terms of surrender.

The record is clear. Willie Walsh has consistently reneged on agreements with the union. He has withdrawn even the most cut-throat 'offers' even when the union leaders declared that they were prepared to negotiate over them. He and his subordinates have spent months bullying staff. He has sought vexatious court injunctions against the union to prevent perfectly legal and democratic strike action. He has sacked leading trade unionists on trumped up allegations - proving that their aim is to provoke the cabin crew. He has tried to conceal the impact of strike action by sending out empty "ghost flights" to make it appear as if the company can operate efficiently without the majority of its workforce. He is out to bust the union, in a company where 97% of workers are unionised. It is an attack on the work force, an attempt to fundamentally and permanently transform the balance of power between staff and their bosses in the name of "management's right to manage".

The cabin crew staff, for their part, have been patient and tolerant. They have accepted voluntary redundancies and wages cuts. BA workers have even worked for free when asked to do so. That is a staggering act of generosity toward their employers, an investment in the future of the company, which has been rewarded with outright malice and contempt. It is all the more astonishing when you consider that cabin crew salaries start at £12k a year, which is just on the poverty threshold. They have sought agreement at every stage and have been consistently rebuffed, and their good faith betrayed. They are at the end of their tether, forced to strike action by an aggressive management intent on smashing the union.

The Unite leadership, which is denouncing the protesters as "lunatics" (Woodley), has been pretty useless in the dispute. Derek Simpson has consistently undermined the strike, describing it in the media as "over the top". In a Labour gathering, he described Bassa reps as "clowns" and said that BA workers were "deluded" if they thought they could win. Bassa has twice voted overwhelmingly for strike action. They have found little support from the leadership of Unite, which has at times seemed more interested in protecting Labour's interests than those of the workers they represent. They have publicly endorsed agreements that the workers have not agreed to. They have dragged their feet over setting strike dates. No wonder Willie Walsh this week urged "Tony Woodley and Derek Simpson to assert their authority" over Bassa. He blames a 'hardcore' within Bassa for "wagging the Unite dog", forcing the Unite leadership into taking a position against - *sigh* - 'modernisation', which they would otherwise be reluctant to take. There is an increasingly tense relationship between Bassa and the Unite union to which they are affiliated as a result of this. I only qualify the term "useless" with the adjective "pretty" because both Woodley and Simpson have been forced to defend workers' right to strike against some pretty egregious court decisions, and because even lip service is better than no service at all.

The position of those meeting in ACAS today couldn't have been clearer. We have bosses who don't want to negotiate, who want to break the union, and a Unite leadership that has little time for the people it is supposed to be representing. We have talks going nowhere fast, and a workforce that has been treated so abysmally, provoked so hatefully, that it is straining at the leash to fulfil its two overwhelming strike mandates, and really stick it to the people who have shown them such utter disdain. There is going to be a strike, and the talks were never going to stop this. Only the courts, with the backing of the full armoury of the law and the state, could have done that. The outcome of this strike will not be determined by talks between Unite leaders and BA bosses. Consequently, the allegation being put about on Sky, the BBC, the Daily Mail and elsewhere that negotiations were scuppered by dozens of protesters surrounding Willie Walsh and advising him, rather volubly, that they support the cabin crew, is absurd. If the protests have had any impact on the talks, I suspect, it will have been to reinforce the emerging sense of solidarity between the Unite leadership and the BA bosses. Tony Woodley hurriedly departed the ACAS building after Willie Walsh's hasty exit, complaining that Walsh had "understandably" felt "harangued" by the protesters - a case of political Stockholm syndrome if ever there was one.

The issue now is how people can build solidarity with the strike that is going to happen, how funds can be raised, and how other groups of workers can be drawn into supporting those at the sharp end of a ruling class offensive. Because if the BA workers win, then I confidently expect that the unconscionable Mr Walsh will lose his job. And if the most outright reactionary union-buster in the country is at long last defeated, having picked a fight with the wrong group of workers, that will give a little boost to every other group of workers who are having to defend jobs, pay and conditions against management attacks. Which would be nice, wouldn't you say?

ps: One last thing. Note that Walsh describes the Bassa strikers as "reactionaries" stuck in the 1970s. One of my arguments about "progressive" conservatism concerns precisely this ability of capital to appropriate the language of progress on behalf of such agendas as war, pollution and privatization. This tendency has led the author Dan Hind to mock the Hayekians, Friedmanites and corporate propagandists as the 'Party of Modernity'. Since neoliberalism - rather, capitalism tout court - constantly attacks and subverts 'traditions' in the process of procuring a favourable environment for further accumulation, its opponents are invariably tied to a 'status quo' that makes them reactionary. So, if BA staff are understandably unhappy about attempts to break negotiated agreements, cut thousands more jobs, shred pay, and remove their rights in disciplinary procedures, this nevertheless makes them enemies of "progress".

Occasionally, if you open the Economist or the FT, you'll read an argument that runs something like this: people shouldn't be bigoted toward immigrants, because by they do jobs that British workers won't do for pay that British workers won't accept. In a similar way, you often hear members of the Institute of Directors or the CBI explain that 'globalisation' and international outsourcing is an excellent thing because it gives jobs to hard-working people in Third World countries who work much harder, and are much less demanding, than spoilt, recalcitrant Western workers. This is the zenith of ruling class anti-racism, and it's just another argument for exploitation. And it is, of course, deeply racist toward the recipients of its supposed benediction.

I mention this by way of introducing a popular BBC programme that aired the other day, called The Day The Immigrants Left. Featuring the economics commentator from Newsnight:

This programme begins with a series of vox pops involving working class, usually unemployed, white people regurgitating scaremongering headlines. The explicit remit of the programme is to challenge the racism of those workers by proving to them that they couldn't do the jobs that immigrant workers do. It essentially shares the purview of the employers of migrant labour, who explain that they would be out of business if they had to recruit from the local unemployed. Of course there's a heavy selection bias in the programme, because it can only feature those employers of migrant labour who are happy to have their workplaces filmed and have their practises discussed on air. And the programme backs up their claim that the reason they have turned to migrant labour is because, somehow and at some point, local workers just stopped being interested in such jobs and opted for the dole instead. Unemployment, in this light, is voluntary, and arises from some sort of psychic shift in the workforce. The truth behind this convoluted tale is much more simple: the politico-legal oppression of migrant workers makes the cost of their labour (ie, the cost of reproducing their labour) much less expensive, and it usually works to render those workers much more submissive. Employers like that.

Historically, systems of migrant and segregated labour work very similarly in that the costs of reproducing their labour power are reduced by the conditions of oppression. In pre-apartheid South Africa, for example, segregated and migratory labour were combined. African workers were imported from the rural economy, housed in cramped, collective living quarters, fed a standardised diet purchased in bulk, and transported collectively to the mineral mines (where they were admitted only to the most menial jobs on account of 'colour bar' policies). They may have had a family to support, but not in the city centre, and thus the remittance they needed to provide their family with was not elevated by city prices. All of this was much less expensive than the process of feeding, housing and transporting the white workers who lived in individual houses in the Witwatersrand core with high rents, ate in individualised units, had families to support and travelled individually. Hence, the politico-legal oppression of African workers meant that the cost of reproducing their labour was reduced, thus increasing profits.

In today's migration economy, similar principles apply. Migrants often have shaky legal status, even if they have documentation. The TUC points out that even where the legal status of migrant workers is insuperable, they are made unaware of their rights and are usually unable to enforce them short of high-risk militancy. This is a situation that is maintained on purpose as it provides low cost labour to both private and public sector institutions. Most migrants live in cramped, collective accomodation, are transported collectively, eat collectively, and any families they support are based in poorer countries where average incomes and prices are lower, thus reducing the amount of any remittance that needs to be sent. Hence, the cost of their labour is reduced. This means that more jobs are created that otherwise could not possibly have been created. The effect of the last big wave of labour migration in the UK, consistent with this outline, was to increase total employment without decreasing unemployment or job vacancies. New jobs were created because employers could afford the cheaper labour, but the old jobs were not filled because they weren't available to migrant workers and because a set of geographical and skill factors excluded local workers from taking those jobs.

What this means is that British workers could not, even if they were masochistic enough to want to, work in the same conditions that most migrant workers have to accept. To attempt it would be to attempt a perverse hoax in which one abandoned one's status as a British citizen, fled with one's family to a relatively poor country and gained citizenship there, accepted lower living standards, and then left one's family behind to try to get into the UK, legally or otherwise. Oh, and one would have to forget almost everything one had ever learned, because the first sign that one was socialised in the UK might alert any handler or employer that there's something awry. And the only thing that one would learn from such zaniness is that a worker's position in the global labour market is socially produced, maintained by politico-legal institutions and social forces much larger than any individual worker. The cost of labour is determined by all of these factors, and unemployment is not voluntary. The BBC's programme is an argument for exploitation.

One last point. Ruling class ideology on this subject oscillates between two mutually reinforcing poles. On the one hand, there is a patronising concern for the 'white working class', which scapegoats migrants, black people and 'politically correct' policies for the supposed alienation of white workers from politics. On the other hand, there is a condescending endorsement of the 'work ethic' of immigrants, as if their oppression and exploitation was a fact about their personalities or culture. From a different perspective, this attitude also blames immigrants, in this case for being more available for undignified, hyper-exploitative, low-paid labour than their local counterparts. What neither attitude can admit, what the ruling dogma can never allow, is that workers of whatever status have more in common with one another than with their bosses.

One of the most interesting meetings at the very well-attended Historical Materialism conference was that addressed by Kim Moody on the effects of crisis on labour. (I should mention that the meeting was also addressed by two Turkish comrades on the impact of recession on female labour but, alas, that is for another post). For, although organised labour threw its weight behind Obama's election, it has so far been unable to extract much advantage from it. The two key policies that labour was pressing for was healthcare, and the Employee Free Choice Act. But the union movement in America has been in crisis for upward of thirty years now, and it has yet to recover. All the major unions have experienced substantial declines in membership, all are experiencing a profound financial crisis in part because they had investments that have turned to ordure during the crisis, and all are trapped in an impossible model of 'business unionism' that has consistently crippled the American working class. American labour has thus lacked the ability to put enough pressure on Obama to see its key policies through. Obamacare is proving to be a corporate-driven shambles, and the EFCA will be seriously watered down.

Moody tracked the origins of this crisis to the late 1970s when, beginning in 1979, there was a sudden nosedive in membership, strike rate, NLRB negotiations and - as a consequence - wages. Part of the background for this sudden crisis of unionism in 1979-81 was that the union leadership had expended much of its energies combatting the rank and file insurgencies of the Sixties and Seventies that had challenged the norms of business unionism, thus evaporating activists energies on internal struggles. The dependence on the Democratic Party machinery was also fatal. The AFL-CIO helped Jimmy Carter beat Gerald Ford, with the promise of a labour-friendly bill, but it was filibustered and contained. And when Chrysler was going under, labour depended on Carter to organise a bail-out and thus engaged in its first, fatal, pre-Reaganite round of concessionary bargaining. Job losses were conceded and the union movement subsequently lost members and leverage. It was already ripe for plucking apart by the time Reagan destroyed the air traffic controllers union.

This nosedive in unionism reached a plateau by 1982 and it facilitated a wave of restructuring and spatial re-organisation in American industry, including auto, steel, meatpacking, trucking, mining, telecommunications and building. The US steel industry alone lost a quarter of a million jobs by the end of the 1980s, as larger firms downsized and smaller groups such as Birmingham Steel and Oregon Steel pioneered new successful models of accumulation. As in Europe, the manufacturing sector shed jobs in bulk and waged a bitter but often successful war against shop floor organisation. Through intensified labour regimes and technical innovation, capital was able to raise productivity while wages remained static rather than rising with productivity gains as had been the case in previous decades. Between 1973 and 1998, productivity in US industry rose by 46.5%, but the median wage fell by 8%. (Figures from Harman's Zombie Economics). Notwithstanding a brief period of growth at the end of the 1990s, real wages continued to fall in the Bush years, and are still falling while productivity has soared during this crisis. (Though, typically, a number of US economists writing in the New York Times have taken the opportunity to argue that US wages are actually far too high and should be reduced to the global "market-clearing rate"). The intensification of work included a crude increase in the rate of exploitation by way of increased working hours, so that the average labourer in the US worked almost as many hours in 2004 as a Mexican worker (1,824 and 1,848, respectively). This process, technically known as 'class struggle from above', did facilitate a substantial recovery in aggregate profit rates until about 1997 - not to the levels of the post-war boom, but certainly above the troughs of the late 1970s and early 1980s. (For figures, see David McNally, 'From Finance Crisis to World-Slump: Accumulation, Financialisation and the Global Slow Down', Historical Materialism, 17.2).

The model of business unionism that persisted and still persists involves the acceptance of capitalism not just de facto but in explicit ideological terms - the language of class politics is specifically eschewed. It involves reliance on the Democratic Party which is, both in terms of its outlook and leading personnel, a capitalist party, not even a reformist party akin to European social democracy. It involves bureaucratic top-down methods of organising and growth in which the latter is the preserve of 'professionals', long-term sweetheart deals, no-strike agreements, and the exclusion of would-be members if they do not belong to existing bargaining units.

The effect of this depoliticised, professionalised model of unionism is not only to forestall struggles but to substantially weaken them where they arise. Moody gave the example of auto-workers striking at a BMW plant who met with European trade union delegates. They explained that they were not against the company - they liked the company - but they just wanted a voice, a seat at the table. The delegates said 'they're going to get beaten', and of course they were beaten, because they didn't understand that it was a class conflict not a family quarrel. Another problem facing US workers is the one I mentioned in a previous post - older forms of community-based workers' organisation have suffered because labour is much more mobile than before. American workers can travel a hundred miles to get a job now, whereas once it was common to live within walking distance of work. Moreover, they are unlikely to work at the same plant, where common union representation would signify a common struggle. They are atomised, fragmented, and dispersed. The only workers' constituency that resembles those old communities is among immigrants.

The formation of 'Change to Win', which was supposed to break with the more bureaucratic methods of the AFL-CIO, did not augur a new period of growth. This was in part because the split didn't involve any substantial political or tactical disagreement. It was entirely driven by the unions' respective leaderships. The Change to Win federation essentially accepted the same model of recruitment as the AFL-CIO, based on professionalised campaigns and economies of scale. The SEIU, one major constituent of the Change to Win coalition, was supposed to have recruited tens of thousands of new members, but its net growth after factoring in losses amounted to approx. 10,000 - not really that large given that the SEIU represents 1.8m workers. Its leadership has publicly eschewed any idea of class politics, instead vaunting that old shibboleth, 'partnership'. And it has increasingly resorted to carrying out raids on other, smaller unions - a nasty and rightly scorned tactic in the labour movement. The UAW and USWA unions experienced losses. Only the smaller unions have made gains. There are positive developments, however. Unions are changing their attitude to immigration and increasingly looking to organise the 12 million Mexican workers in the US. The SEIU, despite its commitment to business unionism, did take some pioneering steps in this direction with its famous janitors campaigns in the 1990s. (The campaigns featured in Ken Loach's Bread and Roses). But it has not organised a great deal in the South, which is ripe for a recruitment drive, and where tentative efforts in, eg, the meatpacking industry have met with success.

Moody has long advocated a version of 'social movement unionism' to combat the conservatism and limitations of the 'business unionism' model. Rather than reserved for members of bargaining units, unions should be thrown open to all - not least those many workers who regularly volunteer their time and efforts to help union recruitment drives, but are not union members themselves. The unions should campaign on broader issues and be integrated into larger campaigns rather than restrict themselves to narrowly 'economic' issues. We had a glimpse of this with Seattle and after, and with the massive organisation of immigrant workers in 2006, subsequently crushed under a wave of ICE raids and horrendous repression. But as yet the model of business unionism has not been broken with on a large scale and, as a result, recruitment still doesn't make up for lost members, and union density continues to decline. It will require a painstaking accumulation of forces before the necessary shift can take place, but it would also require an ideological break with the Democratic Party to be sustainable - now a much more delicate and difficult matter with the Obama executive. To the extent that white workers break with Obama, it may just as well be to the right as to the left.

(Yet another whinging, pessimistic post. Where is the Hope? Where is the change-you-can-believe-in? Tsk.)