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Arguments for socialism :: Northern Rock
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We do not take a simplistic 'economic determinist' approach to politics. It is not our conception that recession will automatically lead to a mass increase in support for socialist ideas.
Nonetheless, Karl Marx's basic materialist idea that 'conditions determine consciousness' is ultimately true.
In general, however, consciousness lags behind 'conditions' or objective reality. In times of mass radicalisation consciousness catches up with objective reality in sudden bursts or jolts.
These are turning points in history; the most developed of which is a revolution. However, in the historic period we have just passed through, the pushing back of socialist consciousness in the wake of the collapse of Stalinism, combined with the increased brutality of world capitalism's exploitation of the working class, have meant that the gap between conditions and consciousness has been an unprecedentedly large chasm.
It is not economic hardship as such, but the change from one economic period to another which tends to have the most profound effects on the consciousness and outlook of the working class.
There is no doubt that the coming economic storm will have a marked effect on consciousness worldwide.
This will not be uniform but will vary both according to the severity of the economic crisis in different countries, and the experience of the working class over the previous period.
For example, a sudden deep recession could have a temporary stunning effect on the working class, at least as far as industrial struggle is concerned.
Fear of unemployment, and the desperate struggle to survive, can temporarily drown out the possibility of struggle.
This was the initial effect of the Great Depression in the US. However, this did not last. In 1934 three bitter but ultimately victorious strikes exploded onto the scene, one of which, the Minneapolis 'Teamster Rebellion', was led by Trotskyists.
Arising from these movements was the founding of a new 'industrial' or 'general' trade union federation which went on to lead the magnificent auto industry strikes and occupations.
These events resulted directly from the effects of 1929 but they did not begin until some years after the economic effects of the crash started to bite.
A delay in the onset of struggle, however, is not necessarily on the cards. Particularly those countries where the working class is already involved in major struggles are more likely to very quickly enter into large-scale defensive, and even semi-offensive, industrial battles against the effects of a recession.
Even in countries, including Britain, where the level of struggle is still relatively low, a recession, perhaps particularly if it is more gradual and/or less deep, may lead to outbursts of industrial militancy and also anti-cuts movements very quickly.
The working class in Germany, for example, met the recession earlier this decade with significant strike action, despite the lamentable role of the trade union leaders.
In addition, more than half a million workers and unemployed marched against the government's attacks on the unemployed in the biggest demonstrations for many years.
Our sister section played a crucial role in initiating this movement. Even where workers are initially too shocked to struggle, there will still be an important effect on consciousness, as the illusion that capitalism can provide the means for a decent life is shattered for millions of workers.
This will be intensified by the experience of the last years of the boom - where broad sections of the working class have experienced stagnating wages and cuts in public services, while they have looked on at the fantastical 'conspicuous consumption' of a tiny elite.
Even looming economic crisis has not brought the orgy of money making by the 'masters of the universe' to an end.
End of year bonuses for 2007 in the City of London are estimated to have exceeded all previous records.
All the discontent that has built up over a long prolonged period of class polarisation and a 'joyless' boom will lead to a qualitative change of outlook for the most conscious layers of the working class.
Broad layers will begin to question the nature of the system that has brought them to this pass.
The fact that the capitalist classes themselves will be forced to begin to empirically move away from neo-liberalism in order to defend their system can enormously accelerate this process.
The effects of the bail-out of Northern Rock, the biggest government bail out of a private company ever in Britain, gives an indication of how this could develop.
In order to prevent a collapse of the banking system major sections of British capitalism, arch-champions of neo-liberalism and globalisation, have been forced to call for nationalisation.
The journals of the City, including The Economist, the Financial Times and the Evening Standard, have led the battle-cry for nationalisation.
They, of course, do not support genuine or permanent nationalisation, but rather want the state to step in and rescue Northern Rock before handing it back to the private sector at a later date.
Nonetheless, it gives a glimpse of how far the capitalists can move away from their existing neo-liberal policies under the impact of crisis.
New Labour, terrified of carrying even the faintest whiff of old Labour, has resisted nationalisation with every fibre of its being, going so far as to 'nationalise the losses but privatise the profits', as Liberal Democrat shadow chancellor Vince Cable accurately described the government's proposals to underwrite any future buyer.
Despite their gargantuan efforts to avoid the horror of nationalisation they may still be forced into it.
This will increase the effect on consciousness. Nonetheless the partial nationalisation that has taken place has already had a significant impact. Peter Hain, prior to his resignation, was forced to step in and guarantee 90% of the incomes of 140,000 workers whose pension funds had gone bust.
That he only did this in the wake of the Northern Rock crisis, after five years of prevarication, is an indication of the effect it had.
Inevitably workers will ask: 'If you can do it for Northern Rock, why not for our pension fund, or to stop our car plant closing?' Over the last few years when we have intervened in car factories threatened with closure nationalisation has always been seen as a 'nice idea' but a 'pipe dream'.
The Northern Rock debacle alone is likely to change this outlook. This raises the possibility that factory occupations to prevent closures, which have not taken place over the last decade, could be on the agenda again in the future.
If initially workers are not confident to struggle industrially they could turn to the political front for an answer to their problems.
The formation of new mass workers' parties, or steps in that direction, can be accelerated as a result of economic crisis.
In Germany it was the effects of the sharp recession in the middle of the decade, combined with the brutal austerity measures that the government carried out against the working class, which led a layer of middle ranking trade union officials to found the new left party, the WASG.
The speed with the which the WASG gained support - together with the Left Party it received over four million votes, 8.7%, in the 2005 general election - was related to the shift in consciousness caused by the recession.
The German economy has since been growing again, albeit sluggishly, but radicalisation continues, with the merged Left Party gaining 14% in opinion polls in 2007, not least because real incomes for working-class households are still falling.
However, an increase in anti-capitalist or socialist consciousness will not be the only effect of a recession.
Other trends will also exist. As we will comment later an increase in the divisions in the working class, particularly increased racism and nationalism, can also be a trend.
In the absence of new mass workers' parties this can provide opportunities for far-right parties to grow.
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Banking crisis (15)
Clause 4 (1)
Clause four (6)
Minimum wage (312)
New workers parrty (6)
Northern Rock (34)
Party funding (1)
Socialism 2007 (17)
Socialism 2008 (13)
Solidarity Scotland (1)
The Socialist (1162)
Them & Us (25)
Trade union organisation (7)
What we saw (38)
Workers press (1)
Working class (847)
Article dated 1 March 2008
The Socialist, weekly newspaper of the Socialist Party
Lessons from history
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