Crisis worsens as government sells out

POWERS to imprison trade unionists are the answer proposed by Wilson's 'Labour' government to the growing economic crisis.

When Wilson visited President Johnson in Washington he went out of his way to insist that the powers taken by the government in the Prices and Incomes Bill, now going through its last stages in Westminster, were without precedent in 'democratic' societies, even in wartime.

Wilson's method for taking these powers is also 'unprecedented'.

Young Socialists and Socialist Labour League members were told on various lobbies of parliament that 'left' MPs intended to amend the projected Bill so thoroughly that it would be toothless and harmless. What happened was something quite different.

The powers taken by the government have been introduced after the debates in parliament, during the 'committee stage', in such a way that ordinary 'democratic' procedure is dispensed with.

It was not a matter of everything being done by the traditional rules of democracy, as the reformists always told us things could be put right, but of the economic requirements of international finance capital insisting on a change in the law.

No Pretence

Wilson and his Cabinet now serve these banking interests directly, and have dropped all pretences of gradually wearing down capitalism by reforms. They are tied hand and foot to the banks.

The old democratic forms become an obstacle to the continued exploitation of labour.

The seamen's strike increased the determination of the ruling class to discipline the working class.

What is urgent now is that the working class prepares for the critical struggles ahead as thoroughly as the enemy.

In the first place the depth of the crisis must be understood. There will be no quick or easy solution. The six-month wage freeze is only the beginning.

The new Bill actually gives power to cut wages.

In June, according to government figures published this week, retail trading and hire-purchase was already on the decline in a serious way, i.e., before the new measures announced by Callaghan.

There was a fall from 138 to 126 points in the level of new hire-purchase credit, and HP sales fell from 87 to 80 points.

Shops selling durable goods had a decline of £8 millions to £301 millions.

New credit extended in the second quarter of 1966 was 11 per cent lower than the same quarter of 1965.

All these are signs that the economy was in decline well before Callaghan took his steps in July. It is therefore only to be expected that the 2 per cent unemployment which Wilson says will be 'not unacceptable' is a laughable underestimation.

The process of large-scale attack on the working class has already begun with the wage freeze. All the big capitalist newspapers admit that it is entirely a question of wage control and not price control.

Crisis deepens . . .

77,000 municipal busmen are going to have to fight to get the increase awarded two hours before the freeze came into force. Over 500 other wage claims are in the pipeline.

In the car factories and throughout the engineering industry, thousands of piecework revisions will be pushed aside by the employers with the help of the government's policy, and meanwhile they will proceed with their plans for speed up and redundancy.

Hundreds of strikes are inevitable under these circumstances. Everyone of these struggles will find the government on the side of the employers.

At the same time the government's own measures force up the cost of living.

The duties on petrol, HP restrictions etc., announced by the Chancellor, not to mention all the consequences of the increased Bank Rate, have already begun to take money out of the pockets of working-class families.

Official Receiver

When workers on holiday from Blyth dry dock, on the North-East coast, received a letter from the employers, they discovered that their firm was in the hands of the official receiver, and that instead of going in to work they should report 'to the nearest employment exchange'.

Now they do not know if they will receive the week's wage owed to them by the company. They must queue up with the other creditors.

In Rochdale and other areas, local councils are fighting hard to put up rents, despite the 'freeze' in order to balance the corporation books.

The number of local Labour councils doing this is an indication of how much can be expected in the way of leadership from the constituency Labour Parties in these areas.

Where Lansbury went to jail rather than put up rents, they defy the Minister for the right to put them up!

The Monopolies Commission, meanwhile, supposedly there to protect the public from 'unfair trading practices', has achieved the astounding victory of cutting the price of Kodak colour films. This will be a great relief to the family budgets of millions of workers during the coming difficult months!

While he takes powers to 'get tough' with the trade unions, like his fellow capitalist rulers in the US and Germany, Wilson has merely 'requested' the building societies not to increase their mortgage rates.

These increases, like wage freezing and rent increases, like the cuts in HP, and like the 10 per cent cuts in the Health Service, are class questions: they affect the working class and not the ruling class. The only answer of the working class must be a counter-attack against the capitalists.

The British working class is regarded by the capitalists of the whole world as a grave threat. This is why Johnson lectured the American trade unions on the situation in Britain.

He warned that the unions had taken too much in wage increases, and that if the American trade unions did not behave more soberly, then US 'prosperity' could not last.

Within a few days the reasons for his concern became apparent, with news of increased balance of payments difficulties for the US economy, and widespread falls on Wall Street.

Press agencies attributed these falls to the Vietnam war and the economic prospects in Britain, i.e., whether the trade unions in Britain would accept the wage freeze.

Similarly, General de Gaulle was one of those who helped the recent rescue operation for the pound sterling, because he was disturbed by the example for his own working class of the seamen's strike.

Contradictions

But his own capitalist interests still bring out the enormous contradictions in international problems that there is no quick solution for the British employers.

For example, the French balance of payments and currency reserve figures, announced this week, show that 86 per cent of French reserves, now at an all-time high, are held in gold, since the adoption of the policy of converting dollar credits into gold.

There are serious implications here for the British capitalists. As junior partner to the dollar, since 1944 the basis of the international monetary system, the pound sterling has retained an anachronistic strength. Since 1949, the dollar itself has been losing the basis of its strength, as is shown by the loss since then of one half of US gold holdings, now standing at 13 billion dollars.

Many ministers in the French government are driving at a devaluation of the pound, taking advantage of the incurable historic crisis of British capitalism because they know this would be inevitably followed by devaluation of the dollar and the consequent strengthening of French capitalism.

The British working class is therefore in the cockpit of a great international crisis.

The intensity of the struggle will reflect the enormity of this crisis. The situation has now developed where the steps taken by the capitalists of any particular capitalist country endangers the interests of the system as a whole.

For example, in Japan there was a 50 million dollar loss in exchange reserves during July because of the increases in US and British money rates. The Japanese had held down their own rates to encourage industrial expansion.

Such a situation has great dangers for the working class. World war and repression against the workers are the only paths open to the capitalists.

Favourable

But the situation is at the same time favourable. This international intensification of the crisis means that the ruling class in each country lacks the security of stable international capitalist conditions and support against its own working class.

The workers in the advanced countries are highly organised and undefeated for for many years. They are the key to the international situation. The joint crisis of the British, US and West German economies gives great opportunities for the building of new revolutionary leaderships through the struggle of the working class.

Strong sections of the capitalist class would like to take the path of war against China and eventually against the USSR and Eastern Europe. They are behind the imminent decision to invade North Vietnam.

But the US government is held back by two forces.

Five Years

A US Defence Department study released this week estimates that it would take 750,000 US troops five years to win the Vietnam war; such is the fighting power of the Vietnamese people, even assuming the US could win.

But the report is more concerned about another obstacle to 'winning the war'—this is within the US itself.

Even the Korean war brought political issues into the Presidential campaign in 1951. But now the issue is brought into the middle of the Negro struggle and the growing militancy of the American labour movement.

This is a remarkable confirmation of the strategy of working class internationalism.

Every blow struck by the working class and socialist movement in the advanced countries helps in the struggle against US imperialism in Vietnam.

Every battle won by the National Liberation Front is a blow against the ruling class in the US and Britain.

The weight of these blows can bring the downfall of capitalism if we accept the challenge of building a Marxist leadership equal to the task of leading the struggle for working class power.