Labour whistles in the dark
"Nothing has collapsed," insisted Welsh Secretary Ron Davies, questioned by Radio 4 over the implications for the Welsh economy of the decisions by Siemens and Fujitsu to close British factories in the aftermath of the Asian economic melt-down.
The Siemens closure axed 1,000 jobs, and Fujitsu 600, in the north east of England. Such high-tech manufacturers do not lightly abandon hundreds of millions invested or pull out of production.
These decisions, arising from a major disruption of the global market for computer technology place a massive question mark over the Tory/Labour strategy of luring "inward investment" of international capital to exploit cheap labour in Wales, Scotland and other areas devastated by the years of Thatcherite rationalisation.
Naive
Davies went on to burble naively about New Labour’s strategy of "partnership" with Japanese, Korean and other corporations, apparently oblivious to the collapse in markets in Asia and the new financial pressures upon these companies.
Any idea of "partnership" has collapsed in Korea, where car workers at Hyundai fought courageously but lost a battle to prevent redundancies, and where new laws have now ended job protection and opened the door to massive lay-offs.
It has vanished, too, if it ever existed, in Indonesia, where the nose-dive of the currency has been followed by widespread bankruptcy and closures, leaving upwards of 20 million workers unemployed.
Nor is there much prospect of "partnership" in the floundering Russian economy, where the rouble has lost three quarters of its value in just two weeks, leaving workers unpaid or facing hyper-inflation.
The international bankers are taking it in turns to congratulate themselves on escaping relatively unscathed from the wreckage of Boris Yeltsin’s plans for capitalist restoration, leaving the rouble in free fall and the country without a government.
The IMF – whose austerity plans have spread poverty and helped trigger the downfall of the Indonesian regime – arrogantly lays down instructions for the Russian government to "stop printing money and put the budget in order", whatever the cost for Russian workers.
Indeed the costs of these economic and social disasters are falling consistently on the working class, poor peasants, the sick the elderly and the poor, while western bankers and investors bide their time before advancing any new loans under stringent conditions or buying up devalued assets at a massive profit.
There will be little "partnership" on offer for the masses of Latin America, widely predicted to be the next domino to fall to the currency speculators, where governments are already slashing public spending and imposing even tighter austerity on the working class as they aim to pre-empt the pressure to come.
The stakes there are higher: bankers are less optimistic about the implications if Brazil or Mexico with their huge debts were to go under in the same way as Indonesia or Korea. Some US banks could be put in difficulty, and the US economy, currently the mainstay of the optimists, could face a serious setback.
Some of the more far-sighted analysts – though of course not the cock-eyed optimists of New Labour – are wondering just how many more areas of capitalist expansion can face collapse without it having a severe impact on the imperialist centres of Europe and the USA, creating a global slump.
Not only are markets disappearing, but the attempts of corporations in Japan, Korea and elsewhere to export their way out of the present crisis will drive down prices for a wide range of manufactured goods.
For firms in Europe and America to compete, they would need to slash back their costs of production, by waging a new war on jobs, pay and conditions, and by stepping up the pressure for tax cuts and cuts in public spending.
Already British business chiefs have begun to pressurise Gordon Brown to scale down his modest increases in public spending. Manufacturing bosses, in recession even before the summer crises, are looking for further rationalisation.
Whatever else the ruling rich may sacrifice in order to ride out the current world-wide storms, they will not sacrifice their profits.
For the bankers and industrial bosses, the rule of "women and children first" has always meant that they and the whole working class were the first to be thrown overboard at times of crisis.
They hide behind the police and army of each capitalist state, and band together when their interests are threatened.
In response, in Korea and Indonesia, trade unions are beginning to break free of the political straitjacket of "yellow", employer-dominated confederations, and wage a bitter fight to defend jobs and living standards against the "market forces" of capitalism.
Instead of cuddling up to the bosses in the pursuit of an impossible "partnership", the TUC and Labour Party should be freeing the trade unions of the legal shackles that prevent them fighting to defend their members’ jobs and wages in this country.