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Reports on Crisis

FOUR: England

We asked people in several countries to write down observations about social effects of the crisis.
The following is a report from England, written in January 2009, updated in February 2009

»Anti-social solidarity«

On January 8 Nissan sacked 1,200 of the 5,000 workers at its Sunderland car plant (Wearside, North-East England). Some reports said 800 permanent and 400 temp and 800 'permanent' jobs would go, others that it would be 'mostly' temp jobs. The Nissan plant, which began cutting production and hours in October, had introduced round-the-clock shifts to meet demand in January 2008; it was 'widely regarded as the most efficient in Europe' (Financial Times), and had supposedly 'revitalized' local business (Nissan's own supply chain, where at least another 5,000 workers are now threatened, plus petrochemicals, paper and 'high quality' call centres) through the example of its kaizen/'lean production' model. The case was the most prominent in the UK so far of mass layoffs by a profitable and solvent 'lean' employer. In a sense Sunderland is unusual among the parts of Britain affected by industrial shutdown in the 1980s, in that the 'replacement' for the shipyards and coal mines involved at least an element of new (i.e. downsized and 'flexible') manufacturing. Outside its reindustrialized outposts, though, Sunderland, along with other historically working class parts of the country (including much of London, eg. ex-Ford Dagenham and pre-Olympic Hackney/Tower Hamlets), has experienced the same things more or less uninterruptedly throughout the financial/services boom: persistently high unemployment, state and EU-funded 'urban regeneration' projects bestowing a few fragile retail and hospitality jobs along with real estate gains and 'creative' fees for a micro-minority, and prodigious growth of government agencies administering 'social exclusion'. The Nissan layoffs show that 'social exclusion' is something no-one is safe from now, to the point that the term loses whatever meaning it ever had. Behind all the state agencies' efforts to pathologize it, 'exclusion' essentially means having no realistic individual hope of 'prospering' individually as a rentier, a business-owner or a professional in a financialized economy. This hopelessness is clearly no longer exclusive : it can happen to anyone (it always could have done, but until recently 'anyone' wouldn't have believed it), and it is happening on an enormous scale right now. The near future of class conflict will depend on the reaction of those workers who find themselves flung into this condition, together with that of those have never known anything else.

The nature of the crisis in the UK follows directly from that of the16-year 'boom' that preceded it. The role of rising financial asset prices (i.e. expanding claims on value produced elsewhere or in the future) as the 'engine of growth' was not just a matter of the portion of 'GDP' attributed directly to financial services (officially 33 per cent in 2006): this hypothetical revenue, i.e. credit, flowed into the much larger business and consumer services market, paying almost incidentally for the low-wage, quick hiring/firing jobs of the local 'employment boom'. In this context, 'wealth creation' in the UK was not primarily dependent on surplus value from labour in the 'services boom' jobs. Rather, claims on flows of value from elsewhere in the globalized economy, refracted and magnified through 'complex financial instruments', flooded the economy, temporarily funding something like a giant job-creation scheme (or workhouse). The meagerness of real wages from the jobs 'created' this way forced those workers with access to mortgage or consumer credit into systematic dependence on it. (Meanwhile of course, for many others, state benefits and/or high-risk income from the 'criminal' economy remained the only options.) Of course these phenomena were by no means unique to the UK, but the precocious development of the system in this country, the unusual dependence of 'national' and household incomes on the bidding-up of financial assets, corresponds to the relative seriousness of the crisis here [1].

The role of the state in supplementing 'employment growth' through the financial boom in this most deregulated or 'Anglo-Saxon' of economies may be less well known. On November 23 the FT reported that two thirds of the jobs created between 1998 and 2006 'would be classified by most people as being in the public sector'. State employment rates were significantly higher among women and in the regions hardest hit by manufacturing job losses over the last 30 years, with the North-East at the top of the list. As the Daily Mail commented, "the government has based agencies and set up Quangos such as One North East in the region to tackle unemployment caused by the decline of traditional industries such as coal mining". Which is to say, it's not just a matter of adding to overall job numbers: many of the jobs are directly concerned with processing and policing the unemployed, or otherwise administering coercive 'care' to a disorderly low-income class. The 'public sector' designation here does NOT mean the workers are directly employed by the state, with protected wages, conditions and pensions. The 'public sector' has been drastically overhauled over the last 10 years under the Private Finance Initiative (PFI) system, which installs private contractors (actually often chains of contractors, with one hiring another for each particular function) as 'service providers' in the medical, welfare, transport, housing, education, waste disposal, policing/courts, immigration control and military sectors. The contractors put up the initial capital, which they borrow privately, and they hire employees on typically 'flexible' private sector terms. The state contracts to pay the money back over several decades, thereby indebting itself more than it would otherwise, but keeping public borrowing and spending officially off the books [2], as well as avoiding responsibility for the workers and for any damage done to infrastructure or 'service users'. This arrangement means the myth of relatively safe 'public sector' jobs is likely to disappear quickly, along with a lot of existing 'public services', as the PFI contractors struggle to refinance their private debt. It was reported on January 14 that contractors have failed to raise the initial money for major projects in the last year, with the number of new PFI deals almost halved. On the same day Deloitte published a report calling the crisis an opportunity for 'radical transformation' of the public sector in a 'market-savvy' direction.

Thus the whole configuration of the deindustrialized 'boom' economy, which detached returns on capital from labour income, making the whole edifice dependent on complex financial claims, now ensures that neither profitable manufacturing nor the 'state sector' is any refuge from the crisis. So far there has been almost no sign of a confrontational class response to the crisis as such, either through strikes rioting of the kind seen in Greece and Latvia or even symbolic protest through the 'official channels' [3]. Unions volunteered for wage cuts to save jobs at JCB and Corus; JCB accepted the offer then sacked the workers anyway. This kind of fear and demoralization surely has something to do with average household debt of £9,600 excluding and £59,670 including mortgages, with the total amount just above GDP at £1,456 billion.

Private capital (apart from banks) has so far deflected hostility by pleading helplessness . In the meantime the state has been asserting itself along all the lines of class confrontation, acting as planner, financier, 'employer' and unemployment/'exclusion' manager. The government's approach to imminent mass unemployment amounts to a buildup of outright war on the unemployed, with new legislation to be passed in spring, pilot programmes in 'socially excluded' areas [4] before the legislation, and full implementation in 2010-11. [5] Private and 'voluntary' sector dole policing and the attack on incapacity benefit, which absorbed hundreds of thousands of unemployed during earlier attacks on the dole [6], are longstanding but until now slow-moving policies. The decision to legislate now, so that the new regime comes into force over the next two or three years, may indicate state planners' idea of the time-frame for the arrival of depression-level unemployment. This timing ensures that full implementation of the new dole policy will more or less coincide with generalized 'austerity' (i.e. shutdown of state-funded reproduction services, users charges for those remaining, regressive taxes), as required by the Treasury insistence that the recent bailout borrowing and deficit spending should have zero fiscal impact in absolute terms, with the budget to be fully balanced again by 2015-16.

All this raises the question: what kind of 'strategy', if any, could be underlying an all-round attack on real wages and the unemployed during a recession in which circulation is atrophied and there is no work available to impose? Is the argument of George Caffentzis and Silvia Federici that the 'Western' proletariat is being prepared for 'Structural Adjustment' applicable, given the difference between (in the case of the UK) a bankrupt ex-industrial economy and those where agricultural/mineral-exporting debt peonage was imposed before full proletarianization ever took place? In this respect the term 'Structural Adjustment' may not fit, but certain capitalists and their intellectuals have been demanding for a long time that the expectations of 'Western' proletarians should 'catch down' with those of the low-wage world.?

What kind of class response can be envisaged, then, if mass unemployment, semi-employment and pressure on the wages of those still employed throw large numbers of workers into the condition known until recently as 'social exclusion'? In the present context of fear and retreat, this can only be considered the future tense (near as that future may be), or in the form of very open questions.

A crucial general factor must be the development or otherwise of some kind of solidarity between the newly 'excluded' and the so-called 'underclass' already in that position. Closely related to this question is that of the relation between 'permanent' and temp workers. Also, any emerging sense of common interest will have to deal with complex forms of individual and micro-communitarian competition existing on both sides of the line between the (former) 'respectable working class' and the (perpetually) 'socially excluded'. For instance, will shared material experience tend to dissolve or exacerbate animosity around immigration (or the hallucinatory 'common sense' idea of it) and 'ethnic identity'? Could the willingness of many proletarians to fight the state as well as each other over 'race' issues conceivably be turned into class hostility as more people find themselves in the same position across 'ethnic' lines, or must it be manipulated by state, media and 'community leaders' into intra-class sectarian disaster?

More broadly, will drastic change in material conditions be enough to undo a deeply ingrained ideological-cultural assumption that 'getting out' (as in 'out of the ghetto') or 'moving up' individually and competitively (whether as a business owner or a professional) is the only rational aspiration for proletarians? This assumption has been strengthened over decades by real factors: the withdrawal of the basis for survival for the 'working poor', eg. , state pension; relentless official emphasis on 'training' and 'personal development' as the solution to all problems [7]; disappearance from collective memory of any instance of material improvement on a collective basis.

If the stakes and complications of any near-future class confrontation can be conceived this way, perhaps it's possible, even more tentatively, to imagine some factors which might contribute to its outbreak:

Based on what I can see right now I'm quite pessimistic in the immediate term, but this doesn't necessarily apply at all to the situation in a year's time.
A class confrontation that looks like a damp squib from the proletarian side at one moment might become explosive not long afterwards as 'objective' conditions come to be experienced 'subjectively' in a more collective way.

January 2009


At the end of January collective anger and its contradictions burst out in wildcat strikes across the energy industry. At the Lindsey Total oil refinery, workers struck against the EU-mandated decision of Sicilian sub-sub-contractor IREM to supply 'its own' Italian and Portuguese workers for construction jobs not advertised locally. This action in support of the unemployed would already have been 'illegal' as a 'political' strike, but the Lindsey workers were joined by others at 11 sites UK-wide in doubly 'illegal' solidarity strikes. The strike appropriated Gordon Brown's slogan 'British jobs for British workers', allowing virulently anti-worker newspapers to 'support' it, turning the issue into one of 'nationality'. Strikers insisted otherwise, but after the Lindsey dispute was settled with a deal to hire 100 'British nationals', it's not clear how far their voice was heard. So it's worth repeating that what they said was true. Disastrous as the 'British' slogan was, the conflict is about the undercutting of wages during an income crisis. Collective agreements are not legally binding in the UK, so European workers 'posted' under the European directive need not be paid at the going rate. The Lindsey strikers voted not for exclusion of foreigners, but for identical protection for local and foreign workers, and for international (union) solidarity. Hundreds of Polish workers joined a solidarity strike at Sellafield nuclear plant. Also: employers now say they were provoked into hiring foreigners by ongoing '70s-style walkouts' by workers.


[1] Predictions of the scale of economic collapse correspond strikingly to the scale of the last decade's financial asset-driven 'growth', eg. the Chartered Institute of Personnel and Development forecasts approximately 750,000 job losses over the next 18 months: "equivalent to the total net rise in employment in the preceding three years". Oxford Economics attributes the fall in per capita GDP from the top to the bottom of the rankings of "major" economies to "the bust in financial markets". (For more in this vein see:www.wsws.org).

[2] For an account of how this works see David Morrison, 'PFI: is Gordon Brown "financially illiterate"':www.david-morrison.org.uk/pfi/pfi.htm

[3] Exceptions in the UK have included small-scale strikes over wages by London bus drivers, Glasgow 'community service officers', Merseyside council workers, Southampton care home workers, Wembley (West London) pharmaceuticals workers and 'further education' college staff at a number of sites across England. None of these has been explicitly crisis-related, but striking for wages at this time nonetheless stakes an implicit claim against those of the abstract 'economy' and returns on capital. For ongoing coverage of strikes at all levels see http://libcom.org/ and www.wsws.org/. See libcom.org in particular for coverage of events in Greece, and see http://www.wsws.org/articles/2009/jan2009/latv-j16.shtml for an article on anti-austerity rioting in Latvia.

[4] Glasgow, West Midlands, Greater Manchester, Norfolk and Lambeth (South London)

[5] The most widely-reported aspect of the attack on the 'economically inactive', as proposed in December in the report of Professor Paul Gregg and now on the legislative agenda, is a massive acceleration of the push to move claimants off 'incapacity' (i.e. sickness) and single parent benefits onto Job Seekers' Allowance, which would mean a substantial cut in benefits to £60.50 a week and much heavier pressure to grovel actively for and accept any kind of work going, regardless of things like physical unsuitability or availability of childcare. Less well-publicized but equally explosive is the regime proposed for 'job seekers', based on what Professor Gregg calls 'work-equal activity', i.e. nine to five attendance at privately-run dole offices in order to apply for jobs by computer, under supervision and with regular interrogation by employees of the PFI contractor (who are paid according to the number of people kicked off the dole). Aside from the matter of how few low-wage jobs are found or offered through this kind of formal process, rather than by physically turning up where work is available and/or through informal social contacts, what's really striking is the way treatment of claimants is equated with punishment more openly than ever, just when unemployment is starting to increase out of control. In his mildest language, Prof. Gregg says recalcitrant claimants, e.g. those who show up late for interviews, should be sent 'written warnings', a term borrowed from workplace 'disciplinary' procedure; for repeated offences they should be fined. Even more telling is that Gregg wants 'work-equal activity' to be 'like school detention': i.e. the whole condition of being a benefit claimant should be equivalent to that of a child being punished at school, and the experience should be similar. And furthermore the term now used instead of 'workfare' for forced labour imposed on dole claimants is 'community service', which until now was confined to criminal sentencing. Reinforcing the impression that criminal justice machinery is being imported into the management of unemployment, if any doubt remained, is the use of 'lie detector' tests on claimants, which has already been underway for a while in some areas, to be 'rolled out' nationally if the 'trials' [sic] are 'successful'. Surprise surprise, they were a great 'success', and the introduction of the system everywhere was announced late in December in the 'Queen's speech', which sets out the government's policy agenda for the coming year. The lie detector software is used on phone calls from benefit claimants: it supposedly picks up anomalies in speech patterns, so that those who talk the wrong way (such as... callers who for some reason find life on £60 a week 'stressful' and can't hide it in their voices? Or...foreigners with strange ways of pronouncing English words?!) can be called in for further interrogation. (For some time now claimants have been forced to contact benefits offices by telephone, regardless of whether they actually have one. This may or may not suggest that the lie-detector was a longstanding plan).

[6] See a series of articles by Aufheben at http://libcom.org/aufheben , in particular the pamphlet 'Dole Autonomy Versus the Re-imposition of Work'.

[7] Thus the aptly-named 'Crisis', a charity that helps state agencies harass the homeless into job training, advertises using the slogan, "we see the person, not the homelessness". It's hard to think of a more succinct way of stating where the state and its 'voluntary sector' allies assume the problem lies.

[german version]

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