Oil On Troubled Waters?

Thousands of British workers have taken spontaneous industrial action at refineries and other installations around the country in response to a dispute with Total at Immingham. After years, of passivity of the British Labour Movement the fact that workers have stood on their own feet to protest and strike is a good thing. Faced with increasing job losses that workers rather than being cowed, instead looking to their own strength for a solution to their problems is to be welcomed. For that reason, the workers taking this action have to be supported. But, socialists also have to tell those workers that the object of their strike is reactionary. Whatever, they say about the Italian and Portuguese workers employed at the site not being their enemy, the logic of this strike action is precisely that. It is a strike that places the blame for the problem of British workers on those foreign workers. The logic of the strike were it successful would be to throw those Italian and Portuguese workers on the dole, and for that simple reason the strike as it stands is reactionary. The maxim put forward by Karl Marx and the socialists of the 19th Century – “Workers of the World Unite” – is as valid today as it was then. Global Capitalism which is the real enemy here, cannot be defeated if workers are divided by race, gender or nationality, and fight against each other rather than uniting against the common Capitalist enemy.

Irony

The irony of this situation is apparent for anyone that looks at it logically. Total is a French Oil company. It has awarded a contract to an Italian company, which employs largely Italian workers. The objection of those taking action is that there are British workers unemployed who have the necessary skills to do the jobs required for this contract. They have taken the jingoistic comments of Gordon Brown about “British Jobs for British Workers” at his word. But, what would be the logical conclusion here? What if French refinery workers were to turn round and argue the same thing. After all why, they might ask, is a French Oil Company providing jobs for British refinery workers, should it not apply the maxim the strikers are demanding except as “French Jobs, for French Workers”. If the strikers demand were applied logically then the question of these jobs would not apply, and all those refinery workers would also find themselves out of a job as Total moved its operations back to France to provide those “French Jobs for French Workers”.

Down this road lies catastrophe for the working class, not just in the reduction in employment that would result from such protectionism, but in the greater power it would give to bosses resulting from such protection behind national boundaries, not to mention the huge increase in the cost of living as workers found themselves paying much higher prices for domestically produced goods. After all, I can remember not so long ago that if you wanted a suit made in Britain it would cost you a couple of hundred quid. I haven’t seen many people complaining about being able to buy suits made in China for a tenth of the price in the last ten years or so. And this dispute is really no different than that. If this firm had been an Italian firm based in Italy employing Italian workers making say shoes, would we have seen such action outside shoe shops selling those Italian shoes on the basis that those shoes could have been made by British shoe workers???

I was talking about this today with a worker from Bentley at Crewe. He too has just been laid off for a while. Apparently, the demand for Bentleys is still there but the buyers are afraid to turn up at their factories in a new £250,000 car when they’ve just laid workers off. His position sums up why the demand for British Jobs for British workers is not one that workers should adopt. He works for a German company (VW) producing cars the vast majority of which are sold outside Britain. As he said, what if VW decided to create “German Jobs for German Workers”, and shut up shop here and moved production to Germany. All the jobs at Crewe would be lost. Alternatively, what if foreigners decided that they should buy cars made in their own country rather than those made in Britain. Then not only all the jobs at Bentley, but probably many if not all the jobs at Toyota, Nissan and other car plants where a lot of production is exported would go too. The same thing was argued by a worker in the US last night on Newsnight. The US government has made it a condition of its stimulus package that steel and other products have to be bought from US companies. But, as this worker from Caterpillar said, 50% of their production is exported. If foreign countries adopted the same attitude then all their jobs would be lost the plant would have to close.


Marx

In the 19th century Karl Marx addressed this question.

In a speech on the issue of Free Trade he said,

“Do not imagine, gentlemen, that in criticizing freedom of trade we have the least intention of defending the system of protection.

One may declare oneself an enemy of the constitutional regime without declaring oneself a friend of the ancient regime.

Moreover, the protectionist system is nothing but a means of establishing large-scale industry in any given country, that is to say, of making it dependent upon the world market, and from the moment that dependence upon the world market is established, there is already more or less dependence upon free trade. Besides this, the protective system helps to develop free trade competition within a country. Hence we see that in countries where the bourgeoisie is beginning to make itself felt as a class, in Germany for example, it makes great efforts to obtain protective duties. They serve the bourgeoisie as weapons against feudalism and absolute government, as a means for the concentration of its own powers and for the realization of free trade within the same country.

But, in general, the protective system of our day is conservative, while the free trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favour of free trade.”

See: Speech On The Question of Free Trade

Despite that, in the 1970’s those who claimed to be adherents of Marx in the British Stalinist Party, along with their fellow travellers in the Labour Left put forward a thoroughly reactionary document known as the Alternative Economic Strategy that really set out to advise the British Capitalists how best they should run their economy. One of its main planks was the call for the kind of protectionism through import controls that Marx rightly denigrates above. It was a thoroughly reactionary, nationalist programme. Unfortunately, the British labour Movement, partly because of Britain’s colonial past has been marked with such a Little Englander, and nationalist odour for over a century. The clear nature of the current strike is shown by the fact that already the Nazis of the British National Party have jumped on the bandwagon parading a truck with a large billboard past the refinery.

A Real Grounds For Struggle

Speaking of workers strikes for higher pay, Marx said that such struggles could never be a solution to workers problems because they left the means of production in the hands of the bosses. As long as that was the case workers would continually have to strike to get better pay. The real answer was for the workers to take over the means of production for themselves. But he recognised that you can’t just say that to workers, its necessary for them to live in the meantime, and its necessary to support workers struggles even on an inadequate basis, so that they can learn to struggle for the real solution to their problem. That is true here. No socialist should condemn these workers for this action even though it is reactionary. It is the result of workers not having a clear picture of what the real solution to their problems is. That is not the fault of workers it is the fault of Marxists in not having related to the working class correctly for the last 100 plus years. The task of Marxists here is to support the workers, but to do what Marx advised to show them why the solution they think they want is not in their interests, and instead to provide them with solutions which are.

Global Labour

About three years or so ago I wrote a piece about the booming world economy, and I posted it here in the middle of last year Workers and Inflation . At the end of that piece I wrote,

“As the economic expansion of the upswing begins this demoralised and weakened condition is not easily shaken off. Confidence has to be restored, organisation rebuilt, new leaders developed. It takes time, and with new more productive technology the demand for labour may not rise quickly, and may rise in new unorganised industries. Indeed each Kondratieff upswing has tended to see the emergence of a new economic powerhouse that challenges and replaces the former dominant economy – in the present case China appears to be fulfilling that role, and that may require the development of a whole new Labour Movement.

I think all of these elements can be identified in the present conjuncture, and that should give confidence to Marxists that once more the conditions are developing for militant working class struggles. How these struggles manifest themselves will differ. In China wages are rising by 10% plus per year, and there are clear signs that Chinese workers are beginning to become more organised. The same is true of workers in South Korea and other rapidly growing Asian economies. Under these conditions workers struggles are likely to take on increasingly an offensive nature. Yet in the US, the UK and Europe despite signs of economic growth it is anaemic compared to China and elsewhere. The reason is that these economies are hugely inefficient compared to China which combines the latest technology, with low wage labour. Consequently, we see Delphi declaring bankruptcy with GM looking to be not too far behind.

In Britain we see Peugeot closing Ryton etc. Britain and the US also have a problem with huge levels of public and private debt which has been run up as an alternative to their economies cratering during the downturn, but it now acts as a drag on recovery. As with the PCE in France, it is quite likely that workers struggles in these old economies are likely to have more of a defensive nature, but as the victory of the workers and students in France demonstrates, and following on from the victory against the neo-liberal EU Constitution, which no doubt also helped develop confidence for this current victory against neo-liberalism, there is an air of change beginning to sweep into the Labour Movement even in Europe. In the US too, the demonstrations against the regime’s attempts to bring in new Immigration Laws shows that within the lower depths things are beginning to stir.”

That I think is a pretty accurate description of what we have in fact seen over the last three years. The strikes this week in France are just another reflection of it. But, as stated above these strikes are still of a defensive rather than offensive nature. That in part is the explanation for the reactionary nature of the strikes in Britain at the present time. But, as I went on to say in that article,

“Soon the nature of the struggles will noticeably change from being defensive to offensive struggles, and Marxists and Trade Union militants must be prepared to reorient to that situation, or there is a danger of being left behind the class. It will begin to manifest itself in another aspect of the Kondratieff cycle. During the last 20 years western governments have pumped huge amounts of liquidity into the economic system to reduce the effects of recession. As Marx points out when economies are growing rapidly they require increased amounts of money to be put in circulation in order to enable goods to circulate. When real money – gold – was used there was a self-correcting mechanism which threw out excess currency from circulation. But since economies have used fiat currencies in place of gold this mechanism no longer exists. Consequently, any increase in the amount of money tokens (paper money and coins) or credit over and above what is required for circulation leads to a devaluation of these tokens, and thereby inflation.

This inflation has not been manifest because of two things. Firstly, the prices of consumer goods have been kept down because of imports from China, and other low cost producers which have sucked up a large amount of this excess liquidity, and is then recycled into Chinese Foreign reserves and loans back particularly to the US, hence the huge trade deficit of the US and UK. Secondly, the liquidity has gone into financial and other assets – in particular creating a house price bubble in the US and UK. However, there will come a point where the current economic expansion, having used up the readily available labour and other resources, and faced with demands from labour for wage increases, as the demand supply balance for labour tips more in favour of labour, will lead to pressure for higher prices. The Chinese Stalinists are already fearful of the imbalance between the cities and countryside, and are trying in the latest 5 year plan to direct resources to the country. One project is to drive a huge motorway through to Western China, both as a means of facilitating the transport of raw materials from Kazakhstan and other Central Asian countries, but also to stimulate economic development along its route into Central China. The rapidly rising living standards of Chinese workers are already fuelling a consumer boom, and increasingly the Stalinists will be forced to divert an increasing proportion of output to meet domestic consumer needs rather than the needs of western consumers. Combined with the likelihood in the next year or so of a revaluation of the Yuan the consequence is going to be a significant rise in consumer goods prices.”

With the current downturn this forecast might seem unlikely. I disagree. The longest boom in living memory is what came to be known as the Post War Boom of 1949-74. But, in fact that was just one of several such booms since the beginning of industrial capitalism around 1800. The post war boom was marked by rapidly rising standards of living in the West, a large expansion in consumerism, of home ownership and so on. Yet, during that boom there were many recessions. If we take the period roughly equal to that since the beginning of the current boom in 1998, we find that there were recessions in 1948-9, 1953-4, 1957-8, and 1960-1. Since the current boom began there have been recessions in 2001-3, and 2005-6. The current recession is special because of the huge financial crisis that began in the Autumn of 2007, and was itself produced by the massive amounts of liquidity pumped into the economies particularly of the US and UK, and the explosion of debt that followed it, as referred to in the article above. But, on the basis of past experience we would expect the financial crisis to be ending within the next few months, and indeed as I wrote recently, Green Shoots? , there are indeed signs that the credit crunch is thawing – today British Mortgage lending expanded three times faster in December than had been forecast – and given the normal duration of recessions we would expect the current recession to be coming to an end by the second half of this year. In fact, given the huge global stimulus that has been made, the likely next problem when that recovery recommences, will be inflation.

What Now?

That doesn’t solve the issue for workers now facing job losses, and does not provide an adequate basis of struggle in place of those currently being fought for. The reality is that the solution isn’t simple or easy, and Marxists shouldn’t pretend to workers that it is. There will be those such as the Nazis who provide easy solutions like blame the foreigners, there will be those on the left who will propose “more militancy” or “blame the government”, but none of these easy solutions provide a real solution for workers. Those that put them forward are not really interested in doing so they are only interested in recruiting a few more people to their respective organisations.

The answer lies in a number of things none of which are immediate, and some that are. Firstly, rather than workers dividing and blaming each other for their situation, they need to come together even more closely than they are at present. The answer to low wage workers coming into Britain is not to impose immigration controls on those workers, but for workers throughout Europe to come together as a single powerful force to demand parity of wages, pensions and benefits in all EU countries. To do that we need to establish European wide Trade Unions, and European Workers Parties. Workers in the better off countries need to actively support through action, financially and politically the struggles of our Brothers and Sisters in the less developed economies for higher wages. The Trade Union tops won’t do that. WE need to build European wide organisations of workers at a rank and file level whose focus is on building a confidence at the shop floor level to take action themselves. The Internet gives the ability for such groups within a single multinational business to down tools simultaneously in support of each other.

The objection of most of the workers at Immingham was that they could do the jobs required. Fair enough, but what that really comes down to was not that they needed THESE jobs, but that they needed A job. The short term solution to that is that where over the last twenty years or so workers have been all too prepared to sell their jobs in return for a big redundancy payout – that soon is found to be not as big as you thought it was – that workers have to fight against job losses, have to demand that the work be shared out without loss of pay. But bosses will not only resist that, there is a point beyond which they simply can’t do it, because it would mean the firm goes bust. IN those cases we need to do what Marx and Engels advised we need to have a strategy whereby these companies can be taken over and run as a Co-operative by their workers. We know from the example of Tower Colliery that workers can run their businesses more efficiently than can the bosses. For one thing in a Co-operative there is no need to pay out high salaries for the top bosses, or for supervision, and more importantly there is no need to pay out dividends to shareholders who contribute nothing to the business whatsoever. For workers like those at Immingham, craftsmen such as joiners, electricians, plumbers etc., we know that there is in fact plenty of work that the community needs doing that would keep such workers fully employed. They don’t have to work at a refinery they could be building much needed houses, schools and other facilities, and if we used the finances available through the Co-op Bank, through Unity Trust, and especially through workers pension funds we could establish Co-operative Housing schemes that would employ such workers. And in building these Co-operatives that gave workers decent jobs, under their own control they could join together not just on a local or national basis, but could join with workers in other such Co-operatives across Europe, not only providing jobs for workers here and now, but strengthening the position of workers against the bosses, joining up with the Trade Unions to support workers on strike, and with the Workers Parties to prevent the bosses using the law against us as they would do.

The bosses seek to divide us. Don't let them