TODAY, the TUC reports that the Tories have presided over the worst economic growth since the 1920s and the biggest decline in real wages since Napoleonic times.
Now, clearly working people do not need historical analysis to tell us that we are getting steadily poorer under the disastrous policies of this government, that what we could buy with the money in our pocket is substantially less than it was a year ago, or that the cost of heating our homes and feeding our families has shot up while wages and the labour market seem to stagnate.
Indeed, the past 18 months of strike action across key industries such as post, rail, health, education, the Civil Service and elsewhere, show that working people understand very well that they are being given a kicking and whose foot is in the boot. As we get poorer, the super-rich get richer and this government of the rich, for the rich, by the rich are right in the thick of it.
And yet the statement above is staggering. Just pause and consider it for a minute.
The economy is growing more slowly than at any time since the 1920s. Slower than in the midst of a world war, slower than the period of post-war reconstruction when the country had to lift itself out of austerity, slower than the economic crises of the 1970s and ’80s that paved the way for neoliberalism.
The biggest decline in real wages since Napoleonic times. We have got poorer faster than at any point in the 20th or most of the 19th century. A drop in living standards that can only be compared to a point where Europe had been at war almost continuously for over 20 years.
Even from a government as incompetent, as corrupt and as venal as this one, that takes some doing.
But of, course this is the point.
As awful as this government is, economic problems of this scale have much deeper roots. The mismanagement of the Covid-19 pandemic, insufficient investment in the productive economy and the overstimulation of effective demand in place of supporting production have had a real impact. But they sit atop a number of other factors.
Covid-19 followed hot on the heels of the 2008/9 financial crisis and the decade of austerity which followed it. A crisis which had its roots in the financialisation of Britain’s economy and an over-reliance on financial services was met by 10 years of remorseless cuts to social security and investment in the productive economy.
Policies of austerity, far from balancing the books, left our economy much more susceptible to the kind of economic shocks caused not only by the pandemic but also the rise in food and energy prices triggered by the war in Ukraine and food scarcity caused by increasingly frequent catastrophic weather events.
To ignore the role played by war and climate change in destabilising the world economy would be foolish but the British economy experienced far deeper and longer effects than most other major capitalist economies due to the strategies pursued since 2010.
However, the roots of this crisis go back further still. The imbalance in Britain’s economy between productive industry — steel, manufacturing, etc — and financial services, the volatile housing market, and the use of public subsidy to privatised services to produce super-profits for a small section of society, are all products of a 40-year neoliberal economic consensus adhered to by successive governments, both Conservative- and Labour-led.
We will not break with low growth, declining living standards and structural instability until we break with neoliberal economics. The first step should be to impose real wage rises — above inflation — and price caps to protect the living standards of the vast majority.
Then we must redirect investment into Britain’s productive economy, increasing effective supply across the economy. We need substantial investment in public services, jobs and skills. This means a radical rethink of the economic consensus, something which is not on offer from the current government. But we must be honest that neither is it what is on offer from the current opposition.
Change must be demanded by the working-class movement and imposed on those who would rule over us. Anything less from the trade union movement now is a betrayal of working people.
