British Capitalism’s ‘systemic crisis’: social explosion brewing

Even the strategists of the ruling class are warning of an apocalyptic scenario for British capitalism, as the pandemic, Brexit, and economic chaos combine to create a perfect storm. We are entering a period of revolutionary convulsions.

Before the war, Leon Trotsky wrote that the ruling class were tobogganing towards disaster with their eyes closed. This is a fitting description of the British ruling class at the present time.

British capitalism is staring into an abyss. It is faced simultaneously with an economic crisis, a pandemic crisis, and a Brexit crisis – all of which are disastrously feeding into one another.

The UK economy is forecast to fall by 11.3% this year, the deepest plunge for 300 years. And unemployment is set to rise by one million in a matter of weeks. This is a crisis without any precedent.

We can add a further twist to this scenario: the possible breakup of the United Kingdom, with Scotland and even the north of Ireland splitting away. In Scotland, a consistent majority are now in favour of independence, which the Tories are desperately trying to block. This could lead to a Catalan-style situation – that is, a showdown between Holyrood and Westminster.

On top of this, we have the most inept and politically bankrupt Tory government in history, led by a political clown.

Systemic crisis

The whole situation is preparing a social explosion, or series of explosions. This is not a throwaway remark, but is what the strategists of capitalism themselves are warning.

A recent confidential Cabinet Office briefing – marked “sensitive”, and drafted in September – admits that Britain faces a “systemic economic crisis” as it exits from the European Union.

“Winter 2020 could see a combination of severe flooding, pandemic influenza, a novel emerging infectious disease and coordinated industrial action, against a backdrop of the end of the [Brexit] transition period,” the document notes ominously.

Deal or no deal

Boris brexit crisis Image Socialist Appeal
Deal or no deal, Britain will be hit extremely hard by Brexit

With only a matter of weeks to go before Britain leaves the EU, all government departments have been told to prepare for a no-deal departure. But deal or no deal, Britain will be hit extremely hard.

International and domestic food supply chains will be disrupted by “circumstances occurring concurrently at the end of the year”, the briefing states. Stockpiles have severely diminished during the pandemic and cannot easily be rebuilt. Fresh food supplies will also be affected, pushing up prices. There are also concerns about water supplies.

Of course, the rich will not be affected. Instead, it is those on low incomes who will be most at risk of food insecurity if the UK crashes out of Europe.

The Cabinet Office’s “planning assumptions” predict economic chaos and a possible breakdown in public order, due to increased “community tensions”. The report even talks of a national mental health crisis.

A government spokesperson said that they do not comment on leaks. But they added that this forecasting reflects “a responsible government ensuring we are ready for all eventualities”.

Warnings and risks

Covid chaos Tories to blame Image Socialist Appeal
COVID continues to wreak chaos thanks to the Tories’ callous ineptitude

The briefing contains warnings of a “high degree of change”, regardless of whether the Tory government can agree a trade deal with Brussels or not. It warns of possible labour shortages in adult social care provision due to Brexit, given the sector’s reliance on European workers, leading to “provider failure”.

In fact, some of the most serious comments are in relation to health and social care. “The pandemic has and will continue to limit the capacity of the health and care sector to prepare for and respond to the end of the transition period,” the report warns, noting a “sustained level of system disruption from November until at least April”.

A fall in the medicine imports is also underlined as a serious potential problem, with “a reasonable worst case flow rate of 60-80% of current levels”. This poses safety risks for patients.

Council cuts

Tories out no more austerity Image Socialist Appeal
A full 5% of councils face bankruptcy

A disaster faces the UK economy, with investment and capacity in decline. “Companies are more fragile across many sectors and this will have an impact on business readiness and vulnerability towards the end of the transition period,” states the document. It points to the increased “likelihood of commercial failures, including of major government contractors”.

The report talks of local council finances being in a particularly precarious state. In fact, it states that – even with government support during the pandemic – some 5% of councils face bankruptcy. The latest failure is Croydon.

The Tory government has announced further cuts to local government funding, and is forcing councils to raise local taxes. With public services being slashed to the bone, the Cabinet Office briefing talks of the most vulnerable even having to receive help from the army.

Dickensian conditions

Tory economic measures Image Socialist Appeal
The number of unemployed will rise by a further 300,000 by next summer

The Office of Budgetary Responsibility (OBR) has also issued analyses looking into a no-deal scenario. The OBR study predicts a permanent erosion in the economy of almost 2% of GDP, on top of the 4% fall already factored in. This will further hit the government’s finances, and will push up the number of unemployed by a further 300,000 by next summer.

The Tory government is ploughing on regardless, piling disaster upon disaster. Their recklessness is a reflection of the bankruptcy of British capitalism, which is headed for the rocks.

The social fabric of British society is being ripped apart. What little ‘stability’ remains from the past has come to an abrupt end. We are facing a return to Dickensian conditions. Already 15.2 million are living below the poverty line, and this figure is rising.

When the furlough scheme comes to an end, millions will be thrown onto the scrapheap, on top of those already in destitution. Many will be faced with eviction, joining those who are already forced to sleep rough in temporary accommodation, in cars and tents, or on the streets.

The working class is facing a calamity of the worst order. In turn, it is workers who will be asked to pay for this debacle, through increased austerity and a collapse in living standards.

But workers will not take this lying down. The Cabinet Office report, as stated, also warns of industrial unrest. The struggles breaking out in Tower Hamlets and elsewhere are a harbinger of what is to come.

Marxist leadership

With the Tory government split and mired in chaos, the ruling class are desperate to reassert their control over the Labour Party through their right-wing agents.

The lefts within the party need to recognise the real ‘enemy within’ and act accordingly to drive out these right-wing charlatans and careerists. There can be no ‘unity’ with such people. It must be a fight to the finish.

Britain is entering a period of revolutionary convulsions. On a capitalist basis, there are no solutions to the problems facing the working class, only increased suffering.

No amount of tinkering with this bankrupt system will solve anything. Only a bold socialist programme – taking over the banks and monopolies, under workers’ control and management – can offer a way forward. Only when the economy is in the hands of working people can it be planned and run in the interests of the majority, and not the interests of the billionaires.

Titanic events are on the order of the day. We must therefore urgently prepare for what is in front of us. We need to build up the forces of Marxism with increased energy – in the Labour and trade union movement, and especially amongst the youth, who are the key to the future.

As Trotsky wrote, the problem – then as now – is ultimately a crisis of leadership. We need to build a Marxist leadership that is able to answer the needs of the working class at this time of unparalleled crisis. The fate of humanity depends on this question. We appeal to you to join us in this task!

by Rob Sewell, via