Burnham's Dead Cat Bounce - Part 2 – A Relief Rally Is Always Short-Lived

Part 2 – A Relief Rally Is Always Short-Lived

The reality of that was seen, after 2024. As Starmer moved further and further to the Right, so Labour's vote fell. A small part of it went to Reform, but for every Labour vote that went to Reform four votes went to the Greens, Liberals and others to Labour's “Left”. In part, all that is happening, now, is a partial unwinding of that.

Blue Labour did not win over any of the petty-bourgeois reactionaries from Reform, and so had few to lose back to them. They had lost votes to the Greens, Liberals, SNP, Plaid and Independents, and Burnham has simply won some of them back. In many ways, as in 2024, that backwash of support to Labour is what, in financial markets, is called a “Relief Rally”. Left inclined voters, in 2024, voted Labour, not out of any conviction, but because even a Starmer, Blue Labour government seemed a better prospect than a continuation of the Tories. That feeling of relief soon dissipated, when the reality of Starmer's government proved to be just as bad as what had preceded it.

It has to be said, therefore, that the chances are that this will be repeated as Burnham takes the reins. The improvement in Labour's standing in the polls looks like what, again, to use the stock market terminology is a “dead cat bounce”. Labour had dropped so far, so fast that the change of Leader was bound to lead to a bounce from the bottom. But, as I wrote in Part 1, one poll at the weekend put Labour only on 32%, still below the level it had at the General Election. According to Professor John Curtice, the average, currently, puts it only on 29%. That is a far cry from the 40% Labour had in 2017, under Corbyn, when, remember, Labour still lost the election.

Burnham's ratings are flattered currently not just because of the factors set out above, but, also, because the intense media attacks on Polanski and the Greens, have accelerated some of the backwash of votes to Burnham's Labour. In Scotland, the resurgence of the SNP, largely at Labour's expense, has been unaffected. According to Curtice, and I agree, Burnham is unlikely to call an election any time soon, because he is unlikely to win large numbers of seats in Scotland, and that means on the current standing Labour would be likely to get less than 300 seats in parliament, requiring some kind of deal with the Liberals, Greens, SNP and so on. But, that poses further problems for Burnham's Labour. Unless he can demonstrate that he is not just Starmer with better PR, his honeymoon will be short-lived, and the Greens and others will be back eating Labour's lunch.

The reality, already is seen in that Burnham plays with words, be it on Palestine, and the Zionist genocide, be it in relation to Trump/NATO and the illegal war against Iran, or be it in relation to the EU, but the underlying stance remains the same. Burnham repeats the same nonsense about getting closer to the EU, but without committing himself to a wholehearted campaign to re-join; he continues to shy away from condemning the genocide committed by the Zionist state against Palestinians, and even fuelled further attacks by Zionists and settler-colonialists in the West Bank, by attacking the Green Party resolution that recognised the reality that Zionism is racism; he has further backed Trump/NATO's illegal war against Iran by, now, also backing the brutal feudal regime in Saudi Arabia, in its war against the Houthis in Yemen. If Netanyahu loses the election in Israel, Burnham and others will no doubt take their cue to end the minimal sanctions currently imposed and swing behind the new government, even though it, too will be a government of genocidal racists and colonialists.

A similar backwash of support has happened on the Right, as some Reform voters have returned to the Tories. Reform has seen attrition on both flanks. On the one hand, it has been hoist by its own petard, as Rupert Lowe's Restore outfit has split away some of its Right flank. At the same time, as Farage has been exposed in the media, in relation to his funding etc., and, now, the ruling class and its media pile in with their investigations into the activities of Reform's members, not to mention the daily disasters of Reform led Councils, former Tories have drifted back to Badenoch, as she has moved further to the Right. Now, of course, that rightward drift of Badenoch drives away more Conservative voters towards the Liberals, which is no doubt why questions are being raised about the adequacy of Ed Davey's leadership, as the Liberals seem to have been singularly incompetent in winning over Conservative voters, over the last seven years, in conditions where their pro-EU stance should have enabled them to fill their boots.

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Anti-Duhring, Part III – Socialism, II – Theoretical - Part 25

For the SWP, the political extension of this strategy, which amounts to Economism/Menshevism, did not apply, because, unlike Militant and the Bennite Left/CP, it had no orientation to the Labour Party. The ironic consequence was that, its petty-bourgeois, Third Campist, moral politics meant that, come elections, it was led into a bankrupt “lesser-evilism”. It not only called on voters to just passively "vote Labour", to avoid the Tories winning, no matter how bad Labour's politics had been, and were likely to be, but they, also, were left proclaiming, that “for the next six weeks of the election, we will be the best supporters of Labour.” A bit like the Brexit/Lexit position they adopted later, they excluded themselves from the political struggle within, but then had to simply go along with the rules and decisions that came out of that struggle anyway!

The SWP, instead, pursued its Luxemburgist strategy, by which this mounting wave of industrial struggle – which for the reasons already described, was, by this time, on the wane and undermined by the growing relative surplus of labour – would, somehow, mystically transform itself into a spontaneous, political, revolutionary, class consciousness of the workers, who would, then, storm the barricades and seize state power.

The reality of the Militant position, was, in fact, not too different. Although, they propagandised week after week for the reformist idea that a Left Labour Government could, “nationalise the 200 top monopolies”, its leaders, who had been around in the Trotskyist movement for several decades, must have known that such an idea was preposterous, and had been shown on numerous occasions, when tried, to simply lead to the ruling-class and its state, destroying the government, and, if necessary doing so by means of extreme violence. The example of the coup against Allende's government in Chile, in 1973, was fresh in everyone's minds, were they to have forgotten, all the previous examples. Sections of the ruling-class had even discussed a coup against Wilson's social-democratic government, for goodness sake, so what would they do to a Left Labour government?!

The leaders of Militant must have known that, at the very least, even a Workers Government, would, as Trotsky described, baulk at breaking with the bourgeoisie, requiring a mobilised revolutionary proletariat, already organised in workers' councils/soviets, to control the streets and workplaces, to already be a workers' state in waiting – a condition of dual power. The trouble is that, it was no good the leaders of Militant knowing that, if even their rank and file members did not, let alone if the working-class they sought to lead was not schooled in that reality. Anyone who argued day after day with ordinary members of Militant could see that those members did not understand that reality, and they would try to give chapter and verse from Marx, Lenin and Trotsky on why a “parliamentary road to socialism”, was possible, and so sounding more and more like, simply more militant versions of the CP, and Bennites.

As Trotsky noted in relation to the German Revolution and the Chinese Revolution, in the 1920's, when it comes to revolutionary strategy and tactics, timing is crucial. Calling for General Strikes or for the creation of soviets requires that the workers are on an upward path of struggle, and that, revolutionaries have been preparing the advanced sections of the class for the raising of such demands, so that the workers know exactly what the implications of them are. If you continually call for a General Strike, in conditions where the working-class is not strong enough or confident enough, it will be mere revolutionary phrase-mongering, and demoralising. At best, the workers will not respond, at worst, they will respond in a weak and confused manner and the state will suppress them. All-out General Strikes are political strikes, they are revolutionary acts, which directly pose the question of which class rules in society. Trotsky described the mistakes made in that regard in Germany, in the 1920's.

But, as he set out in relation to the Chinese Revolution, it is pointless to refuse to call for the creation of soviets, as the Stalinists did, until such time as the condition of dual power exists. The soviets implies a revolutionary situation, and the workers need to be armed to defend those soviets, and ensuring that those arms are available and go to the revolutionary workers, not their opponents requires time, planning and organisation.  In other words, instead of leading, the Stalinists ended up “tailing” the working-class, and even the peasantry. The Stalinists, who had adopted the Menshevist “stageist” theory, in which the proletarian revolution could only come after the bourgeois-democratic revolution had been completed, were forced to adopt this stance, because they had tied themselves to the bourgeois-nationalists, of the KMT, and this Popular Front required that the interests of the workers were subordinated to those of the bourgeoisie and petty-bourgeoisie. Stalin repeatedly denounced Trotsky and his supporters – including some Chinese Communists, who did not even know they were supporting the line of Trotsky – for creating conditions in which the KMT and the Chinese bourgeoisie would split with them.

Stalin was still promoting that line just days before Chiang Kai Shek launched his coup in Shanghai, and slaughtered thousands of Chinese Worker Communists. The Communist Party and its fellow travellers have pursued the same Popular Frontist strategy ever since, with just the brief interlude of the period of sectarian madness of The Third Period. But, the strategy of the SWP has followed the same Popular Frontism, in search of building the widest possible coalition of forces on one issue after another, as their answer to everything sank into the idea of building the next ever bigger march or jamboree. The same souffle politics was adopted by the Stalinists and their periphery backing Corbyn, via Momentum, and it suffered the same fate as all the other such ventures, deflating on contact with the slightest external pressure.

The conditions, by the early 1980's, had already turned in favour of capital, as it had responded to the crisis of overproduction of capital relative to labour by carrying through the new technological revolution, based around the microchip. In industry after industry, technology replaced labour, particularly skilled labour, such as in the printing industry. Those that had thought that the old Economistic strategy of industrial struggle could simply continue, and would become even more radicalising for workers, as it sharpened, were guilty of the same kind of catastrophism of Sismondi, and of the Stalinists of the 1920's. Rising economic stagnation, and unemployment acted not to turn workers into class conscious revolutionaries, but to undermine even their ability to maintain wages, to keep their organisations together. Increasingly, it turned workers not against capital, but against each other, as they competed for work.

Back To Part 24

Burnham's Dead Cat Bounce - Part 1 – Even A Dead Cat Bounces If it Falls Far Enough and Fast Enough

Part 1 – Even A Dead Cat Bounces If it Falls Far Enough and Fast Enough

Last year, I wrote that, if Labour did not get rid of Starmer, and his reactionary-nationalist, Blue Labour project, it faced destruction. On the one hand, that project sought to compete for the votes of the reactionary petty-bourgeoisie, and its attendant layers, against Reform and the Tories. That was doomed. On the other hand, in pursuing that doomed project, Blue Labour's reactionary-nationalist politics, in government, not only doomed its economic agenda, they, also, drove a wider and wider wedge between Labour and the organised workers, primarily, the trades unions. They would respond, creating an increasingly powerful, if, at first, confused pole of attraction to Labour's Left.

The reason that competing with Reform and the Tories for the votes of the reactionary petty-bourgeoisie was doomed is that, although the petty-bourgeoisie – the self-employed and small business class – has grown by 50% since the 1980's, which is the other side of the deindustrialisation overseen by Thatcher and Reagan, it still represents only around 35% of the population/electorate. Even add in those attendant layers of lumpen elements etc., and it amounts to little more than the 37% of the electorate that voted for Brexit (37% of the electorate, as against the 52% of those that voted).

Dividing that 37% three ways between Reform, Tories and Blue Labour was never a rational electoral strategy for Labour, for reasons I have set out over the last ten years. Even an even split would give Labour just 12-13% of the vote, which it would need to supplement with the votes of its working-class base. However, in conditions where that base was being aggressively turned away from Labour, by those same petty-bourgeois, reactionary-nationalist politics of Blue Labour, it was driving itself over a cliff.

In fact, there was no equal split. In 2024, unlike 2019, Reform simply replaced the Tories, in seat after seat. Just a change of label on the same can of beans. The Tory voters (I'll set out why the term Tory as opposed to Conservative is relevant, later) saw Reform as their natural home, whilst Conservative voters were driven into the arms of the Liberals, or even Greens. Labour was saved, in 2024, by the fraudulent nature of the first past the post electoral system, and by inertia. Yet, despite Starmer's huge parliamentary majority, it was only just so. In seat after seat, even those it won, Labour's vote fell, not just compared to 2017, but compared to 2019. In many, again even those it won, its vote share fell compared to 2019, and, in pretty much all of them, compared to 2017.

In 2017, Corbyn's Labour secured 40% of the vote, and 12 million votes. In 2024, Starmer's Labour got 32% of the vote and only 9 million votes. (NB. The latest polling, at the weekend, puts Burnham's Labour on 32%, still no better than that of Starmer in 2024.) Its large parliamentary majority was a delusion. Despite Starmerite claims that it was all a clever plan to target resources to where they could win back seats, the reality was that in those Tory seats they won because the Tory vote went to Reform, but not enough of them for Reform to win the seat. Blue Labour did not, other than superficially, win those seats, the Tories and Reform lost them by splitting their vote share.

Blue Labour's parliamentary majority was a souffle. It was vacuous, and bound to quickly deflate on contact with reality. That is what happened. The historically low Labour vote, in 2024, and its historically low vote share, for any government, rapidly fell even further. In national polls, Labour dropped to 24%, and then, even below 20%, reflecting the calculations set out earlier. In actual local elections and by-elections, in 2026, it sank even lower than that, as a confused set of alternatives to its Left sucked away not just its core voters, but, more importantly, its activists. The 2024 argument, “Vote Labour, or get the Tories”, turned viciously against it.

The reality has been that Blue Labour never managed to win over any meaningful proportion of the reactionary, petty-bourgeois vote – just as the truth was that it never lost its core vote to the Tories or Reform in the first place. The votes of the petty-bourgeoisie, when they deserted the Tories, went almost exclusively to Reform, not to Blue labour, no matter how much Starmer and his government sought to adopt the racist, jingoist rhetoric of Enoch Powell and his Faragist legions of today. As in the past, when socialists, social-democrats and liberals sought to respond to a rise in petty-bourgeois populism and nationalism by borrowing from its agenda, it simply legitimised the lies and deceptions of those reactionary parties. The reactionary petty-bourgeoisie, thus comforted in the legitimisation of their bigotry, chose the real thing over their imitators.

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Anti-Duhring, Part III – Socialism, II – Theoretical - Part 24

I have set out why there has been that change, elsewhere. It is symptomatic of the fact that the ruling-class during the last century became entirely a class of owners of fictitious-capital. The state, as the state of the ruling-class, acts to protect their interests, and its ruling ideas are those of that class, even when those ideas are based on a delusion that falls apart as each day passes. As capital became increasingly imperialist capital (large-scale, socialised, state-monopoly capital), from the end of the 19th century, the ruling-class itself, in proportion, became a class of coupon-clippers.

As coupon-clippers, dependent on the interest on bonds, and dividends on shares, they continued to have a direct interest in the growth of the profits of the companies which paid out those revenues. The state acted accordingly to ensure the growth of those profits, and accumulation of industrial capital. The heyday of that came in the period after WWII. It actually began in the 1930's, as on the one hand, the 1929 financial crash ruined many of the speculators, and created the conditions for the dominance of an accumulation of industrial capital, of its reflection in a corporatist, progressive social-democratic ideology, and a significant extension of economic planning and regulation by the state. In the US, The New Deal, but, in Europe, Nazi Germany, Nordic Social Democracy, etc. As economies geared up for WWII, that process was accelerated, and it continued after the end of the war.

That heyday ended in the 1970's, for the reasons I have set out earlier, and elsewhere. The period since, then, in particular since the mid 1980's, is the first time when the nature of the ruling-class, as a class made up entirely of owners of fictitious-capital, increasingly divorced from the interests of industrial capital, and, indeed, as Marx describes, antagonistic to it, has asserted itself. Initially, the defeat of the working-class, resulting from the technological revolution of the 1970's/80's, which resolved the crisis of overproduction of capital, and created a huge relative surplus population, and a massive rise in the general rate of profit, caused a fall in interest rates. The supply of additional money-capital from these higher profits, rose significantly. At the same time, the technological revolution, created a huge moral depreciation of the fixed capital stock, and the rise in productivity, also cheapened materials and energy, as well as labour-power. In other words, it created a huge release of capital.

By the time the 80's became the 90's, asset prices had risen significantly. House prices in Britain had quadrupled, and similar rises occurred across the globe. In addition, money that did not find a home in real capital accumulation, found its way into other forms of speculation. In the US, the Dow Jones and S&P 500 rose by around 230%, between 1980 and 1990, whilst US GDP rose, just 108%. In 1987, a global financial crash set the scene for the following 40 years. It is the first time that the consequence of the ruling-class having become a class of owners of fictitious-capital becomes apparent.

The period of social-democracy, in its ascendancy, had been one in which real industrial capital accumulated, profits rose and out of those profits, were paid increasing amounts of interest, rent and taxes. The fact that demand continually expanded during this period, meant that every industrial capital was forced to seek to grab its share of the market, by increasing its output/accumulating capital – the intensive accumulation of the 1930's/40's, turned into the extensive accumulation of the 1960's/70's. The owners of fictitious capital, were subordinated to the needs of capital accumulation, but content in conditions where the mass of their revenues, in the form of interest/dividends and rent, continued to rise, even if, as a proportion of profits, they declined. When that period culminated in a crisis of overproduction of capital, in the 1970's, there were only two options. Either the constraints of capital itself had to be smashed, or else the working-class would be smashed.

The first required that the working-class had a fully conscious political leadership that understood the real basis of struggle. No such leadership existed. Instead, one of two strategies pervaded the labour movement. The most significant of those strategies was that which simply saw the period ahead as being a more intense continuation of the period that was, now, gone. In other words, it was a strategy based on a bourgeois, trades union consciousness of bargaining within the system for a bigger slice for labour. That had worked since the 1950's, as capital expanded, profits were high, and as the period progressed, labour became increasingly in relative short supply. It was precisely the success of workers in that period – more to do with the expansion of capital than effective trades union militancy – that brought about its demise, for the reasons I have set out, and that Marx describes in Wage-Labour and Capital, and Value, Price and Profit. It was an impossible strategy, at the point that capital had already responded to the overproduction of capital/shortage of labour, by revolutionising technology, and creating a relative surplus of labour!

That strategy was one pursued by the Stalinists in the Communist Party, and their fellow travellers in the Labour Left. In conditions where the historic dominance of those forces was being effectively challenged by the likes of the SWP and Militant, they, also, pursued that strategy. In the case of the Communist Party, Bennite Left, and Militant, the extension of this strategy took the form of a process in which mounting industrial struggle would lead to increased pressure on the Labour Party, via its Left-wing, to, in some form, “take the power”, meaning, in reality, that a Labour government would respond to opposition from bosses, by supporting trades unions, nationalising companies that were closing down, and by continuing the process began in the 1970's, of increased planning and regulation of production. In short, to become a Workers' Government. Unfortunately, not only was such a strategy, at this point, doomed, but, it was also, thoroughly confused and nationalistic, including elements that were inherently racist.  It was a modern version of the Moseley Memorandum, put forward by Oswald Mosely, when he was a Minister in the Labour Government, and which became the basis of the economic strategy he adopted for the New Party, and the British Union of Fascists.

So, elements of this Alternative Economic Strategy, called for import controls, which, of their nature, as with Trump's tariffs, not only lead workers to the conclusion that the source of their problems is not capitalism, but “foreigners”, who are, in some way, doing them down, by producing goods more cheaply, and exporting them to Britain, it also means that, as domestic prices rise, the consequence is either falling real wages, or, to the extent real wages are protected, falling domestic profits, and so less new money-capital available for capital accumulation, causing higher interest rates, a tie-up of capital, slower growth etc. That at a time when the solution for workers across Europe, and indeed across the globe, was to unite, across national borders, against their common enemy capital. Indeed some elements of that strategy not only called for import controls, but also immigration controls, immediately and visibly blaming foreign workers for the problems of British workers.

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Forward To Part 25

SNNS 66

 

Northern Soul Classics - Secret Agents - The Olympics

 

Anti-Duhring, Part III – Socialism, II – Theoretical - Part 23

Of the billions paid into pension funds, each year, even the money that does go to buy shares or bonds, rather than line the pockets of the financial institutions, 70% of it goes to buy up existing shares and bonds, and so to simply inflate their prices, rather than financing additional, real capital investment/accumulation. That is the case with all transactions on the financial markets, which act primarily as casinos where the participants simply gamble on which stock or bond is going to race ahead, and which be left behind. As Marx put it,

“It reproduces a new financial aristocracy, a new variety of parasites in the shape of promoters, speculators and simply nominal directors; a whole system of swindling and cheating by means of corporation promotion, stock issuance, and stock speculation. It is private production without the control of private property.”

(Capital III, Chapter 27)

Marx saw no reason why the regular financial crises/crashes, as against the cyclical economic crises, resulting from an overproduction of capital, or an overproduction of commodities, should be a concern of the workers.

“As regards the fall in the purely nominal capital, State bonds, shares etc.—in so far as it does not lead to the bankruptcy of the state or of the share company, or to the complete stoppage of reproduction through undermining the credit of the industrial capitalists who hold such securities—it amounts only to the transfer of wealth from one hand to another and will, on the whole, act favourably upon reproduction, since the parvenus into whose hands these stocks or shares fall cheaply, are mostly more enterprising than their former owners.”

(Theories Of Surplus Value, Part 2, p 496)

But, of course, now that the ruling-class is comprised entirely of such parvenus, and speculators, rather than industrial capitalists, and, because their entire wealth has become dependent on continually inflating asset/fictitious capital nominal prices, it is no wonder that they use the state to ensure that condition persists, even where doing so, directly conflicts with the interests of real industrial capital. As Marx again put it,

"... the reduction of the money equivalents of these securities on the stock exchange list has nothing to do with the actual capital which they represent, but very much indeed with the solvency of their owners."

(Capital III, Chapter 30)

“Talk about centralisation! The credit system, which has its focus in the so-called national banks and the big money-lenders and usurers surrounding them, constitutes enormous centralisation, and gives to this class of parasites the fabulous power, not only to periodically despoil industrial capitalists, but also to interfere in actual production in a most dangerous manner — and this gang knows nothing about production and has nothing to do with it. The Acts of 1844 and 1845 are proof of the growing power of these bandits, who are augmented by financiers and stock-jobbers.”

(Capital III, Chapter 33)

In previous financial crises, such as 1847, 1857, 1929, the state, responded to the events, and threat to production, by ensuring that credit was available for commodity circulation. In 1847 and 1857, as Marx and Engels describe, the financial crash itself had been provoked by the bursting of an asset price bubble, inflated due to low interest rates caused by burgeoning profits, which resulted in the supply of additional money-capital growing faster than the demand for it. The bubble burst when bad bank legislation (The 1844 Bank Act) unnecessarily caused interest rates to rise, because the Bank of England, reduced currency supply, in response to an outflow of gold. The resulting credit crunch led to a sharp curtailment of trade. But, as Marx and Engels note the real nature of the crisis was revealed because, when the Bank of England suspended the Bank Act, so as to facilitate additional currency supply, the crisis ended.

“By such artificial intensification of demand for money accommodation, that is, for means of payment at the decisive moment, and the simultaneous restriction of the supply the Bank Act drives the rate of interest to a hitherto unknown height during a crisis. Hence, instead of eliminating crises, the Act, on the contrary, intensifies them to a point where either the entire industrial world must go to pieces, or else the Bank Act. Both on October 25, 1847, and on November 12, 1857, the crisis reached such a point; the government then lifted the restriction for the Bank in issuing notes by suspending the Act of 1844, and this sufficed in both cases to overcome the crisis.”

(Capital III, Chapter 34)

But, in all these cases, including 1929, although the state facilitated the credit required to end the credit crunch restricting commodity circulation, it did not bail-out the financial speculators who had lost. As Marx notes above, some lost, others gained. In 1929, those like John Templeton, who sold prior to the crash, and, then, ploughed money in after it, when assets could be bought for 10% of their pre-crash prices, gained enormously. In 2008, and after, the opposite has been the case, as central banks have bailed out the speculators, whilst imposing credit restrictions and financial austerity on the real economy.

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