Economic Crisis _conrp. from Page Two

SLES SP A NN a RE a SEA ain a BA AACA VT ne A LT TN OR TRAE tS TET: OTE SATE LIEST VOE SY Re ee not create enough new jobs to balance this loss. Unemployment creeps up slowly. The following table shows the development of this tendency after the initial expansion of the early sixties.

Percentage rate of unemployment:

1966 1967 1968 1969 1970 1971 ‘"2'73 47. 50 $3 50: 58! sgl 63) 62 The contradiction we have shown above between the falling rate of profit and rising wages, which produces inflation is called in economic jargon, excess demand, Excess demand can be tolerated by the employers for a limited period of time because it keeps the economy ticking over. But it doesn’t eliminate the fall in the rate of profit. Indeed by leading workers to expect bigger and greater wage increases each year it threatens the rate of profit with further decline. Sooner or later something has to be done to reduce this excess demand, At the moment that is exactly the problem confronting the National Coalition Government.

To reduce the buying power of the working class the government has three objectives:

(i) restrain wages; (ii) increase taxation; (iii) increase unemployment. These three objectives combined imply a deflationary policy. The first wo objectives limit the amount of goods that workers can buy and those workers producing these goods are made redundant. As an ‘Irish Times’ economic correspondent noted:

“In addition, those thrown out of work as a resu/t of the deflation have Jess to spend on anything. The existence of a large number of THE PLOUGH PAGE 8 unemployed makes it difficult to successfully pursue wage claims, This situation is seen as being conducive to a reduction in the rate of inflation and an improvement in the Balance of Payments” (October fst}.

In the light of this it is easy to see that the government is not trying to save us from “national ruin’ or help workers, What it is doing is to eliminate the contradiction between the sloping profit return and rising wages — and it is attempting to do this at the workers expense.

A crisis of “Zooming Profits’’!?

It is important for workers to understand that the present crisis stems from a falling rate of Profit. What the falling rate of profit shows above all is that capitalism is bankrupt. It can't , as a viable system continue even on its own terms.

The capitalist political parties, the reformist trade union and labour party leaders and even some tendencies on the “extreme left’’ wish to obscure this fact. After all, if the capitalist system is irreperable, then what would workers have to gain by moderating their demands or making sacrifices? Accordingly, last month for instance, during all the gloomy talk about restrict.ng wages and growing unemployment Mr. Cosgrave could cheerfully declare that the:

“Economy is stronger and more resilient than ever before’ (October 4th)

The trade union and Labour Party leaders, including ‘lefties’ like Mattie Merrigan, also like to give the impression that the capitalist system is basically sound. They talk about the vast areas of the economy.

A transitional programme Printed in Ireland and publish. ed by the Revolutionary Marxist Group on the 25th October 1974, great profits that are being made and they tell workers that all they have to do js put gentle pressure (if it is Mullens, Carroll or Larkin speak ing) or strong pressure {if it is Merrigan speak ing) an the employers to share out the wealth. in ‘this way they avoid all talk of the need for a socialist alternative to capitalism.

Even among those who profess to be Marxists there are some, still clinging to the coat tails of the Labour Party and the trade union bureaucrats who use the same argument. They attempt to show that they are being very radical by denouncing the employers for making so much profit whereas they are only revealing how mesmerised and impressed-they are by capitalism. The result of this approach for these people is on the one hand. opportunism — a failure to raise these demands which, challenge the basis of capitalism e.g. the failure to raise and fight for a rising scale of wages. On the other hand it results in ultra-leftism —, a tendency to substitute their own utopian ideas for the real struggle that is already in progress. For example because they don’t understand that industry as a whole is in crisis they dismiss the demand that the state should take over those industries that threaten to close down, as only propping up a few declining firms when in fact as the crisis deepens it will become a demand for the elimination of private capitalist ownership in A clear understanding of the self-produced and unsoluable (except at the expense of the working class) nature of the present crisis of capitalism must be the basis of-any poliey of fighting against the crisis. This rules out putting faith in solutions offered by the employers and government — they can’t even mak; sufficient profits for themselves so what can they offer to workers? The central lesson to be drawn from the bankruptcy of capitalism Is in fact that socialists and revolutionary trade unionisi must put forward demands which are relevant to workers’ immediate needs but which also make the employers themselves pay for their own mess, Under present conditions the best and most relevant demands will be those related to inflation and unemployment, On inflation for example, the most useful demand will be to link wages to prices, This demand puts the reasponsibility for halting prices firmly on the shoulders of the employers. On unemployment, it is of central importance to demand that the state take over (without compensation) and keep in operation all those industries which are threatened with closure, Also it should be demanded that all available work be shared out without loss of pay, Here again the employers and the government will be forced to pay the cost of unemployment.

The capitalist system is in its death agony and the working class has nothing to gain by giving this senile patient a blood transfusion!

RMG TRADE UNION CAUCUS