Measures outlined in chancellor Rishi Sunak’s spending review are just the latest in a series of desperate adjustments designed to keep the profits flowing as the effects of the pandemic take their toll.
Faced with an economy gripped by the most severe contraction in the history of British capitalism, the UK is not alone. The malady is worldwide and the cost of global bail-outs to keep the show on the road rivals if not surpasses that of the 2008 financial crash.
Sunak is nominally in charge, but it’s an entangled pile-up of global and local crises calling the shots. In their turn, the primary cause of each of these is to be found in the disintegrating economic, social and political system from which profits are extracted, aka neoliberal capitalism.
The pandemic is inseparable from the economic and social form. The neo-liberal, turbo-globalised form and the wilful exploitation of nature reciprocally act on each other in new, more disastrous ways.
Key figures in the state are deeply concerned that as a result of the combined crises, the general public is at breaking point. As a leaked Cabinet Office secret briefing says: “Economic chaos could raise the risks of a breakdown in public order and a national mental health crisis.” The briefing warns:
“Winter 2020 could see a combination of severe flooding, pandemic influenza, a novel emerging infectious disease and coordinated industrial action, against a backdrop of the end of the [Brexit] transition period.”
It is significant that flooding is included in the long list of “feeders” of the deepening crisis, proving that climate change is not waiting around for green recoveries, green new deals or any other greenwashing.
Britain experienced the wettest February on record in 2020 leaving thousands of homes flooded and many more without power. Flood damage currently costs the UK around £1.3 billion each year.
There is no doubt that this is climate change – but the government put a paltry £4bn of new money into the so-called Green Recovery announced last week, and much of the investment was actually already being wasted on new nuclear power stations.
Just as in the wake of the 2008 crash, Sunak’s revised spending plans depend on the fragile supply of historically-cheap credit, pitting public against private sector workers as he bears down heavily on living standards, driving millions into ever more precarious forms of existence.
Billions more will be handed over to keep businesses afloat during the pandemic, boosting the profits of Big Pharma – and the hedge fund managers, investment bankers and other speculators who’ve been claiming millions from the furlough scheme.
But it won’t be enough to save thousands of ‘zombie’ companies – those not making enough to service their debts – let alone prevent the wave of bankruptcies engulfing local authorities.
Sunak’s statement is proof that the capitalist system is bankrupt – and not just financially but morally, socially and historically as well. The stark conflict between public health and private ownership mirrors the clash between those who work for a wage and the corporations who exploit their labour.
Cutting overseas aid in a naked appeal to right-wing racist forces and Tory backbenchers shows the direction of travel. The state has amassed significant new powers during the pandemic and they will be used as tools of repression as a new austerity takes its toll on jobs, wages and services.
In these conditions, there’s no way we can afford to wait for the next general election (scheduled for 2024!) or an imagined collapse of the Tory government (especially while Starmer keeps propping it up). Instead, we should deepen the case for a democratic revolution to make capitalism history. That’s the lesson to draw from Sunak’s statement.