The health emergency created by the coronavirus pandemic is not yet over and the economic devastation it is causing has barely begun. Global debt increased by $15 trillion this year and is on the way to exceeding $277 trillion in 2020, 365% of global GDP after rising from 320% at the end of 2019. This is unsustainable. In emerging market economies debt has risen by 26 percentage points so far this year to approach 250% of GDP. In mid-November Zambia became the sixth country to default or restructure debts in 2020. More defaults are likely as the impact of the pandemic mounts. The IMF expects global growth to be negative this year and the worst since the Great Depression of the 1930s. Britain cannot escape such developments. DAVID YAFFE reports.
During the first half of 2020 the coronavirus pandemic drove the British economy into the deepest recession since records began. The second wave of the pandemic will ensure that the recession continues well into next year as the number of coronavirus cases rapidly rises and the government places new restrictions on businesses and social activities in an attempt to control its spread. DAVID YAFFE reports.
On 22 September Prime Minister Boris Johnson announced wide-ranging measures to contain the new wave of the coronavirus in England, which could be in place for at least six months. He reversed his recent call for workers to return to their offices, announced plans to shut pubs and restaurants at 10pm and scrapped plans to open up sporting events to spectators from 31 October. The objective, he said, was to avoid a second national lockdown.
The coronavirus pandemic is driving capitalism towards the greatest crisis in its history. The International Labour Organisation warns that two-fifths of the 3.3 billion global workforce already work in sectors experiencing drastic falls in output and 1.6 billion workers in the informal economy are facing ‘massive damage’ to their livelihoods. Global working hours in the second quarter of 2020 will be 10.5% lower than the last quarter of 2019, equivalent to the loss of 305 million full-time jobs. Unemployment in the US could reach 30%, greater than the Great Depression of the 1930s. Oxfam predicts that by the time the pandemic is over half of the world’s population could be living in poverty. DAVID YAFFE reports.
In 2020 global production will fall for the first time since the Second World War. Output in the European Union will fall by an estimated 8 to 12% this year, the steepest fall in the bloc’s history. The Bank of England (BoE) has forecast that the crisis will push the British economy into its deepest recession in more than three centuries, with a 30% fall in output in the first half of this year, creating the fastest and deepest recession since the ‘Great Frost’ of 1709. On the assumption that the lockdown measures will be relaxed in the second half of the year, the BoE is predicting an extraordinary 14% contraction in GDP overall in 2020.
The General Election of 12 December 2019 called to end the Brexit impasse in Parliament turned out to be a disaster for the Labour Party. Boris Johnson’s Tory Party was elected with an overall majority of 80 seats. It now finally had free rein to push the European Union (Withdrawal Agreement) Bill1 through Parliament and leave the European Union (EU) on 31 January 2020, more than three years after the leave vote in the EU referendum of 23 June 2016. On 20 December 2019 a revised, harder version of the Bill was passed in Parliament by 358 votes to 234, a majority of 124. Six Labour MPs ignored Jeremy Corbyn’s call to oppose the Bill and voted for it and another 32 abstained or did not turn up. DAVID YAFFE reports.
On 29 October 2019 MPs voted overwhelmingly to end the Brexit impasse in Parliament by supporting a motion by 438 votes to 20 for a General Election on 12 December. A day earlier the European Union (EU) had granted Parliament its requested extension of Article 50 from 31 October 2019 to 31 January 2020. The Labour Party leader Jeremy Corbyn abandoned Labour’s opposition to an early poll on the grounds that ‘for the next three months, our condition of taking no deal off the table has now been met’. Before the vote ten of the 21 MPs thrown out of the Tory Party for joining a ‘rebel alliance’ to rule out a no deal Brexit were readmitted, allowing them to stand as candidates for the Conservative Party. 191 MPs did not vote or abstained, including 106 Labour, 34 SNP, 19 Liberal Democrat, 15 Independent and 7 Conservative MPs. A total of 127 Labour MPs including Jeremy Corbyn supported the motion for an election, with 11 voting against. Corbyn said that his party would ‘now launch the most ambitious and radical campaign for real change that this country has ever seen’. David Yaffe reports.
In a dramatic and unequivocal ruling on 24 September, Prime Minister Boris Johnson’s decision to shut down Parliament for five weeks was overturned by the Supreme Court. Britain’s highest court ruled unanimously that Johnson’s advice to the Queen to prorogue Parliament between the second week of September and 14 October was ‘unlawful, void and of no effect’. A humiliated, yet defiant, Prime Minister was forced to cut short his visit to New York, after giving his speech at United Nations General Assembly, and fly back overnight to face calls for his resignation in a recalled Parliament the next day. The ruling class had made its move through the actions of its top judges. David Yaffe reports.
Johnson’s right-wing Tory government’s ‘do or die’ political strategy to deliver Brexit on 31 October ‘with or without a deal’ is in disarray. It has been blocked by Parliament and now the courts. The stage had been set for a stormy debate before Johnson’s return to the Commons to give a statement on the ruling of the Supreme Court. Leader of the House of Commons Jacob Rees-Mogg was reported as calling the court judgement a ‘constitutional coup’ during a cabinet conference call. In the reconvened Parliament the Attorney General Geoffrey Cox, answering an urgent question on his legal advice to the government on prorogation, set the tone for the rest of the session. He accused MPs of ‘setting their face against leaving [the European Union (EU)] at all’ and being ‘too cowardly’ to vote for an election. He said ‘this Parliament is a dead Parliament…It should no longer sit’.
On Tuesday 23 July the wealthy Etonian and flamboyantly self-promoting MP Boris Johnson was overwhelmingly elected as Prime Minister of the United Kingdom by paid-up members of the Conservative Party. His opponent, Foreign Secretary Jeremy Hunt, was a distant second. Johnson won with just over 66% of the vote, 92,153 votes, to Hunt’s 46,656. The total number of UK parliamentary electors in December 2018 was 45,775,800, so about 0.2% of the electorate have, in effect, elected the new Prime Minister. DAVID YAFFE reports.
This is the first time a Prime Minister of this nation has been elected by party members. There are 159,320 eligible members of the Conservative Party, down from a peak of 3 million in the 1950s. Turnout of party members for this election was a little over 87.1%. Nearly 40% of those voting are aged 66 or over, predominantly middle-class white men living in the south of England. Two-thirds of party members are said to support leaving the European Union (EU) without a deal, compared to only one-fifth of the wider electorate. Such are the decadent features of our bourgeois so-called democracy.
Undeterred by the worst Conservative performance for 24 years in the 2 May 2019 local elections and the threat of an even more damaging outcome in the 23 May European elections, Prime Minister Theresa May resolved to make a last ditch stand, a fourth attempt to get her Brexit withdrawal agreement through Parliament. On 21 May in a speech at the London headquarters of PricewaterhouseCoopers, the second largest professional services multinational in the world and one of the Big Four auditors, she outlined the content of her supposed ‘new and improved’ and ‘bold’ 100-page withdrawal agreement bill. The Prime Minister intended to put forward her revamped bill to be debated in Parliament in the week beginning 3 June.
‘Brexit day’, 29 March 2019, was the date chosen for the UK to leave the European Union (EU). This had been Prime Minister Theresa May’s ‘solemn promise’ to the British people, endlessly repeated in speeches, conferences and declarations for two years. The government broke this promise because they had been unable to force the withdrawal agreement negotiated with the EU through Parliament. ‘Brexit day’ saw a third defeat for the agreement by 344 votes to 286, a margin of 58 – higher than most commentators expected. This was another humiliating blow for the Prime Minister. It is the chaotic outcome of an irrevocably divided British ruling class facing the most significant strategic decision on the future path of British imperialism.1DAVID YAFFE reports.
‘Everything under heaven is utter chaos; the situation is excellent’ – Mao
On 15 January 2019 Prime Minister Theresa May’s Brexit withdrawal deal, the product of more than two years of convoluted, drawn-out negotiations with the EU, was overwhelmingly defeated in the House of Commons by an unprecedented 230 votes. 202 voted for the deal and 432 against. 118 out of 317 Tory MPs voted against it. This is the largest defeat suffered by a British Prime Minister in modern history.1 The last time there was a defeat of such proportions was on 8 October 1924 when Ramsay MacDonald’s minority Labour government was defeated by 166 votes in the ‘Campbell Case’.2 David Yaffe reports.
Value, Price, and The Neo-Ricardians: An introductory note
by David Yaffe
In recent times it has become fashionable on the left to 'correct' Marx with the help of the work of the neo-Ricardian L von Bortkiewicz. Indeed a radical form of Ricardianism has, in the work of many claiming to be in the Marxist tradition, replaced Marxian critique of political economy both in content and method. Recent examples include the work of Glyn and Sutcliffe, Hodgson and Steedman. What all these contributions have in common is a rejection of certain of the basic propositions of Marx's Capital and a substitution of others having more in common with the work of Ricardo. The justification for this change is an appeal to the 'facts', to empirically given real processes. So that the falling rate of profit is not connected with the rising organic composition of capital but with a falling rate of exploitation due to rising wage costs or some other phenomena. The proof of this is in the 'facts' of modern capitalism whether taken from Mage's or Gillman's statistics for the American economy or Glyn and Sutcliffe's 'facts' of the British economy. Ernest Mandel .has correctly pointed out the weaknesses of Mage's calculations and a similar .criticism can be directed against the .calculations of Glyn and Sutcliffe. Similarly, in arguing for the rejection of Marx's solution to the 'transformation problem' the neo-Ricardians appeal to the fact that the capitalist bases his investment decisions on the magnitude of the rate of profit in price terms and argue for the priority and reality of this rate of profit if our intention is not to construct empty tautologies. In all the cases mentioned we are dealing with a rejection of Marx's method and a substitution of 'empiricism' of one variety or the other.
Fight Racism! Fight Imperialism! 267 December 2018/January 2019
After months of negotiations, with further concessions having to be made by the British government, Prime Minister Theresa May was able, finally, to announce on 14 November 2018 that all aspects of the withdrawal (transitional) deal – including settling accounts, citizenship, and the Irish border – had now been finalised and agreed at negotiator level. This agreement is essential if the UK is to retain the benefits of the single market and customs union for a further 21 months after leaving the EU on 29 March 2019. The transitional period itself, however, depends on the withdrawal deal being agreed and ratified by both the UK and EU parliaments. The negotiators have also agreed on the outline of a political declaration on the future UK-EU relationship. David Yaffe reports.
The outlook for the Conservative Party looks increasingly bleak. Prime Minister Theresa May’s Chequers agreement,1 foisted on her divided Cabinet at a meeting on 6 July 2018, was not well received by the EU’s Brexit negotiators, or by significant sections of her feuding party. The EU’s chief negotiator Michel Barnier said the demands contained in the agreement were not a firm basis for negotiations with Brussels and fell foul of the EU’s red lines and founding principles. Boris Johnson, who resigned as Foreign Secretary shortly after the agreement was announced, crassly derided May’s Brexit strategy as ‘wrapping a suicide vest around the British constitution’. The arch-Eurosceptic Jacob Rees-Mogg, head of the 60-strong European Research Group MPs, said it was ‘absolute rubbish’ and we ‘should chuck it and have a Canada-style free trade agreement’. DAVID YAFFE reports.
It has been clear that every move by the Tory government on Brexit is designed to contain the splits in the Tory Party, hold together a deeply divided cabinet, and maintain a working majority in Parliament through a deal with the reactionary, pro-Brexit Democratic Unionist Party (DUP). The government is having to do this while, at the same time, gradually moving away from a ‘hard’ Brexit deal that would seriously damage the British economy, dominated as it is by financial services and the global activities of the City of London. That is why Prime Minister Theresa May’s major speeches on Brexit, since the Conservative annual conference in October 2016, have necessarily moved from a ‘hard’ to a ‘softer’ Brexit standpoint. The latter is, at present, embodied in the so-called Chequers agreement made at the special cabinet meeting of 6 July 2018. The inevitable limitations of this process have been dramatically exposed with the resignation of two leading Brexiters from the cabinet, Brexit Secretary David Davis and Foreign Secretary Boris Johnson, shortly after the Chequers agreement was announced. David Yaffe reports.
It is possible to forget that behind the chaos, backstabbing and rifts in the Tory party over Brexit exists the very real question of the future course of British imperialism. The parasitic character of British capitalism leaves it increasingly incapable of withstanding the economic and political challenge of US or European imperialism as an independent global imperialist power. In this context the Brexit conflict is essentially a dispute between sections of the ruling class over two necessarily, totally reactionary outcomes for British capitalism – staying as part of a European imperialist bloc or leaving and becoming an offshore centre for usury capital under the umbrella of US imperialism.1 The recent decision of US President Donald Trump to pull out of the 2015 Iran nuclear deal and impose further sanctions on Iran and any countries and companies trading with Iran has dramatically highlighted the serious consequences for British imperialism from the eventual outcome of the Brexit conflict. David Yaffe reports.
On the bicentenary of the birth of Karl Marx on 5 May 1818, we will no doubt see many reflections on the relevance and legacy of his work. Some will claim serious scholarship, others, like a recent Financial Times skit on the Communist Manifesto (‘Life and Arts’, 10 March 2018), will pour scorn on his work.
In the imperialist countries it has become the norm to concede that Marx made an important contribution to economic thought but to deny the Marx who would destroy the capitalist system. It is our hope that at least some of these bicentenary contributions will have the political courage not to separate Marx the revolutionary from Marx the social and economic critic of capitalism.
Prime Minister Theresa May’s hubris at every stage of Brexit negotiations has been progressively deflated. Britain has been forced to give way on each significant, contested point.1 The Brexit transitional deal agreed on 19 March 2018 between Michel Barnier, European Union (EU) chief negotiator, and David Davis, UK Brexit Secretary, is no exception. Britain has provisionally secured a Brexit transition lasting until 31 December 2020 by offering concessions on UK sovereignty in order to avoid a cliff-edge exit from the EU at the end of March 2019. This allows businesses and citizens a further 21 months to prepare for Brexit-related changes. Markets welcomed the news, with the pound climbing above $1.40 against the dollar, reaching its highest level for three weeks. More concessions will be necessary in a third phase of negotiations during which Ireland, governance issues and future trade relations will be further discussed in parallel. David Yaffe reports.
The Tory party is hopelessly divided. Prime Minister Theresa May is on the back foot, seriously at a disadvantage, often outmanoeuvred in her negotiations over Britain’s future relations with the European Union (EU). The meaning of Brexit is constantly in flux. The dominant sections of the ruling class, corporate business and the City of London, horrified at the damage an abrupt ‘cliff edge’ exit will do to the British economy, have started to up their game. A ‘no deal’ Brexit is no longer on the agenda. Brexit negotiations have, so far, seen Britain forced to give way on each meaningful, contested point. David Yaffe reports.
The exit agreement
The EU’s chief negotiator, Michel Barnier, had insisted that sufficient progress had to be made with the exit agreement – settling accounts, citizens’ rights, and the Irish border – before discussion on the future relationship between UK and the EU, particularly that on the terms of trade, could begin.1 At the end of November 2017, Britain submitted to the principal demand of the exit agreement, by stating that it would fully honour its financial commitments on leaving the EU. The net figure likely to be paid was thought to be in the region of between €40bn and €45bn.
The British ruling class is deeply divided on its future relations with the European Union (EU). The vote, by a small majority, in the EU referendum of 23 June 2016 to take Britain out of the EU was unexpected and no contingency planning by the then Cameron government or the Brexit camp was in hand to deal with it. Cameron resigned and Theresa May became Prime Minister on 13 July 2016. Soon after this, her monotonously intoned catchphrase ‘Brexit means Brexit’ was launched. Yet, more than a year later, after much toing and froing, we have little idea of what this means concretely. David Yaffe reports.
The divisions in the Conservative Party were most strikingly demonstrated on 22 September 2017 in Florence, the European city where Theresa May chose to deliver another, this time more conciliatory and less combative speech on what ‘Brexit means Brexit’ actually entails. Her aim was to break the deadlock in the ongoing talks with EU negotiators. Despite her speech being agreed at a two-and-a-half hour cabinet meeting the previous day, she felt it necessary to take along with her three cabinet ministers, the Chancellor Philip Hammond, the Foreign Secretary Boris Johnson, and the Brexit Secretary David Davis, who disagree profoundly with each other on Brexit. In a charade of cabinet unity they were made to endure her speech, sitting in the front row under the gaze of most of the British media. On her return, further rows and disagreements among the three ministers were reported in the British media.
20 years ago ‘globalisation’ was the latest fashionable term to describe the all-pervasive forces of a rampant capitalism. It was said to be a new stage of capitalism in which multinational companies and financial institutions, attached to no particular nation state, moved their capital around the world in search of the highest returns, and in so doing created a truly global market and global capital. At the time FRFI explained that, far from being new, globalisation was a return to those unstable features of capitalism which characterised imperialism before the First World War. It had begun to recreate the very conditions which produced those dramatic shocks to the international capitalist system that led to the revolutionary developments in the first decades of the 20th century. It reflected a deep crisis of the capitalist system that would soon lead the most powerful capitalist countries into a renewed struggle over world markets and global spheres of interest, into brutal wars in less developed parts of the world, into a new process to redivide the world according to economic power.1
Until the late 2000s, Martin Wolf, chief economic commentator at the Financial Times, was an enthusiastic advocate of neo-liberal globalisation. In 2002, the deepening crisis of the capitalist system forced him to raise the question whether the global expansion of capitalism had come to a halt and was about to be reversed. Will the second era of global capitalist integration, he asked, end like the first, which went into reverse between 1914 and 1945, after inter-imperialist rivalries led to war and socialist revolution in Russia? Wolf’s answer was no. Conditions he assured us were very different this time.2 Today, 14 years on, he is no longer convinced.