Happy Christmas? Zavvi, the IMF and terroristic capitalism
Another major high street retailer has bitten the dust: Zavvi has gone into administration barely a year after a management team bought it from Richard Branson. Teas and coffees company Whittard has been sold to a private equity firm. All down the line, the reorganisation of capital proceeds apace, with little thought for the human cost of the procedure.
David Harvey in his recent lecture “A Financial Katrina” discusses this human cost. In fact he presents the clearest and most cogent Marxist analysis I’ve heard yet. Repossessions and job losses represent a war on the working class. An excess of liquidity drove investment in areas such as the subprime market but the people who will suffer most from the inevitable crash of that market (which is cyclical) are the working classes.
This is why the ideologues of free market capitalism have been arguing, a la Melanie Phillips, that the problem is with the working class people who chose to opt for home ownership on terms they couldn’t sustain. So not the fault of those pushing home ownership as the centrepiece of a consumerist ideology? Or those whose ethical guidelines are restricted to “Make a profit. That’s all.”
Harvey goes on to illustrate how it is the black neighbourhoods of the United States who are bearing the brunt of the punishment (though even by Harvey’s own data, white working class areas are still suffering, so we shouldn’t overemphasize the racial aspect).
A recent pronouncement by the IMF Chief Economist, Olivier Blanchard, seems to bear out some of Harvey’s contentions. Britain’s VAT cut is no good, he says; Britain needs to increase spending, but also Britain’s borrowing is going to cause problems. It seems that between the lines, the IMF wants Britain to hike taxes on the workers rather than create new business taxes or reduce regressive taxes.
Indeed this notion is reinforced by Blanchard’s support (surprise surprise) for Sarkozy’s plan to loan money to people to buy cars. If there is one symbol of unnecessary consumption, it is the car, yet the IMF Chief Economist wants people to be spending their money on such things. We might as well cut out the middle man and give the auto-giants their direct subsidy. At least it would mean less pollution and less personal debt.
In the United States, that is precisely what is happening, the Republicans are using the opportunity to squeeze out every last concession from the autoworkers’ unions, who have effectively rolled over. This is the bluntest end of the weapons arrayed against the working class; the direct assault on wages and terms and conditions, in order to allow a higher profit and to allow such newly accumulated capital to be refocused elsewhere.
It is clear that an opportunity is being lost. Surely now is the time to be investing in new patters of consumption? Such as the creation of vast networks of public transportation, which dovetails cutting carbon emissions and government stimulus packages. It’s not like the auto-companies wouldn’t have a part of the affair – especially if we nationalise them and retool them specifically for that purpose.
We should be under no illusions that the gloves have come off our capitalist overlords – indeed it is reflected in the increasingly sharp rhetoric from people like George Osborne. “Labour is bankrupting Britain again,” he says, and it is the ‘again’ part which has the sting in the tail. As Osborne surely sees, Labour expenditure now has nothing of the Left overtones of Labour expenditure in the 1940’s, 1960’s or 1970’s.
Yet Osborne is quite content to scaremonger that Labour’s class warrior spirit has returned. As Labour activists, we know better, more is the pity. Our response must be just as unyielding as the Republican Senators pushing to destroy the UAW, or Osborne trying to frighten the middle-classes with the spectre of a resurgent socialism. We must demand much, much more than we are getting from Labour.