Marxist perspectives for Scotland: Mass struggle and socialism will challenge capitalist austerity

This statement was written by the Executive Committee of Socialist Party Scotland for the party conference which took place in late November 2015.  Following discussion, amendment and voting, the document was agreed by the conference. The statement was written before the terror attacks in Paris, Beirut and Mali etc. See here for more on the struggle against terror, racism and war. 

Stagnation and austerity

“The world is one recession away from a period of stagnation and prolonged deflation in which the challenge would be to avoid a re-run of the Great Depression of the 1930s.” Larry Elliot, Observer 11/10/15

Despite colossal resources being expended by British capitalism there has not been a return to sustained economic growth following the 2007/08 crisis. £133 billion in bank bailouts, £375 billion of Quantitative Easing (QE) – in addition to interest rates being slashed to historic low levels – have failed to kick-start economic growth. A combination of factors including perpetual austerity – cutting the market for goods and services – and stubbornly high levels of debt created by the policies of world capitalism and rooted in the crisis of the 1970s has led to the period of stagnation, at best, for British and international capitalism.

Indeed a new recession is also possible. According to the International Monetary Fund (IMF): “Six years after the world economy emerged from its broadest and deepest post war recession, a return to robust and synchronised global expansion remains elusive.” A severe economic decline in China is having a global impact by driving down commodity prices. This is creating major problems in the “emerging economies”, including Brazil. The current steel crisis is linked to the decline in China and the “flooding” of world markets with steel. There are also a number of other “headwinds” facing the global economy, according to the IMF.

This has led to further calls by a section of the ruling class for more QE measures (electronic money to produce government bonds etc), both in the USA and the Euro zone area. Yet QE -“Keynesianism for the rich” – has so far failed to produce a sustained economic recovery. A key factor for this is the fact that these measures have gone overwhelmingly to the top 1% and the corporate elite. They have used access to “easy money” at low interest to speculate more widely in stocks and commodity transactions, including purchasing their own companies shares to boost the price.

While austerity and falling incomes are the reality for the working and even the middle classes, the bourgeois and their share of wealth has grown enormously through this process. “A recovery for the rich but not for us”, is a widely perceived mood in society, and for good reason. Oxfam’s recent report found that the global elites’ wealth had increased from 44% to 48% between 2009 and 2014. In contrast the bottom 80% held just 5.5% of global wealth.

A combination of factors; continuing austerity, the debt burden and the general crisis of capitalism, will not allow any return to a long-lasting economic upturn. Rather a prolonged period of low growth, cuts and, at a certain stage, a new recession is the most likely scenario. It’s this bleak outlook for capitalism that is driving the fears and growing splits among the ruling class.

Keynesians v Austerians

Historically, Keynesian economic theory was a response by economists to the tendency for capitalism to be thrown into periods of economic crisis, for reasons outlined by Karl Marx. It was based on a search for policy solutions that would steer the economy back toward economic recovery through state intervention. Specifically government spending on public infrastructure projects to soak up unemployment and other “stimulus measures”, including wage increases for workers and even the nationalisation of sectors of the economy.

In a different historical period this was the policy adopted by world capitalism after 1945, which laid the basis, alongside other decisive international factors, for the post-war boom. As we have explained on many occasions, the “Keynesian miracle” came to an end in the early 1970s, a product of the internal contradictions of capitalism and its limits. The 1970s crisis provoked a “rethink” by the bourgeois who embraced a new dominant economy “theory” of monetarism. This new policy was marked by the rolling back of the social gains made by the working class during the post-war boom. Privatisation, deregulation, globalisation and other anti-worker policies, as well as a turn to “financialisation” in an effort to find a road to increased profitability, were key features of monetarism.

Another crucial factor, particularly in the 1990s and the 2000s, was the explosion of credit to try and sustain economic growth. As we know, this came to a crashing conclusion in 2007/08 when the collapse of a major part of the global financial infrastructure ushered in a general crisis and the biggest shock to world capitalism since the 1930s.

So why has Keynesian policy not been used this time around as a response to the crisis? In one sense it was. The nationalisation of the banking system, the underwriting of trillions in financial assets and the hundreds of billions in QE is a distorted form of Keynesianism. However, this led to hugely increased levels of government debt and was immediately followed by the opening up of a savage austerity offensive against the working class in order to “balance the books” and to ensure “we lived within our means”.

The key factor as to why, up to now, the majority of the capitalist class are opposed to Keynesian policies, reflected in the policies of the Tories, Merkel in Germany etc, is the changed economic conditions compared to 1945. The growth cycles of capitalism in the UK, USA, Europe etc are far weaker in comparison with the position in the past. The general weakening of global capitalism gives far less room to manoeuvre. Rather than investment in the productive forces and an effort to increase productivity, the bosses favour increasing the rate of exploitation of the existing workforce, or reducing the numbers of workers. This necessitates a race to the bottom in wages and conditions, often through “globalisation”, to assist in this, alongside cuts to public spending.

This does not mean that in the face of workers’ struggles that concessions cannot be won, including increases in public spending. But they will be a product of mass struggle and moreover, will be less long lasting as the capitalist class attempt to claw them back. Even where Keynesian policies are implemented under mass pressure, they would not be a solution in the long-term. Both capitalist governments and the employers generally oppose Keynesian policies, as they would lead to rising government debt and a cut in the share of bosses’ profits. Only well organised trade union and workers’ struggles will deliver concessions, which we would link to the need for socialism and fundamental system change.

How will consciousness change?

There is huge public anger against austerity and the growing levels of poverty and inequality. This has been combined with a hatred of the global elite and the bourgeois establishment politicians. Left-wing policies such as support for tax rises on the rich and big business, public ownership, a living wage and wealth redistribution are backed by an overwhelming majority of the population, especially the working class.

While there is not yet an acceptance of the need for an end to capitalism, rather the hope for a reformed and fairer system, it is nevertheless an important stage in the development of a future mass socialist consciousness. By testing out the limits of what can be achieved within the limits of capitalism, a leap forward in political consciousness is being prepared. Which is why our transitional approach, which seeks to engage with this outlook, is so indispensable at this time. As the lessons from Greece underline a thousand times over.

Both the Corbyn phenomena and the huge support for the SNP reflect, at its root, a searching for a thorough anti-austerity alternative. Corbyn stands to the left of the SNP on public ownership but is currently a prisoner of the right-wing majority of the Parliamentary Labour Party. It is uncertain as to whether he and his supporters will take the necessary steps needed to crystallise the emergence of what would be, effectively, a new left party.

Both Corbyn and the SNP base themselves on a reformed capitalism, an end to austerity through “economic growth” and quasi-Keynesian policies, for example a “people’s QE” etc. While we support the idea of a massive programme of public spending to reverse the cuts and for social programmes etc, we link that top the need to take decisive socialist measures against capitalism so that these can be sustained. The idea of ending austerity and increased public spending underpinned by a sustained capitalist economic recovery is not possible, as the Syriza government proves. The experience the working class will undergo in the next period will reinforce the reality that there is not going to be an end to cuts. Indeed that austerity is going to continue, with many of the so-called “anti-austerity” politicians complicit in this onslaught.

Under these conditions the SNP and Scottish Labour – influenced by the Corbyn factor – will be placed under unprecedented scrutiny. As we have explained, the SNP benefited hugely from the anti-establishment, anti-austerity mood arising from the indyref. They were seen to have stood out against the pro-austerity parties and have gained as a result. Nicola Sturgeons’ elevation to the leadership of the SNP and her performance during the general election has further boosted the party’s support. But their rhetoric does not match their actions in power. They passed on all the Tory cuts in Scotland and as John Swinney commented recently, “We must live within the resources that are available to us.” He went on to claim that even under independence it would be very unlikely that they would reverse the welfare cuts.

It is inevitable that the SNP’s anti-austerity credentials will be undermined by the tidal wave of austerity cuts that are imminent in Scotland, paving the way at a certain stage for an upsurge in support for a fighting and left socialist alternative. A socialist programme and the idea of a mass workers’ party will increasingly chime with this objective reality.

A joyless recovery

There has been economic growth over the past five years. Yet is has been a “joyless boom” for the majority, with no end to falling incomes and attacks of the working class through austerity policies. The average worker has seen a minimum of a 10% fall in wages since 2010, a result of the pay freeze and attacks on pensions etc. The current 1.5% pay rise for public sector staff in Scotland will not compensate for this. Particularly as the tax credit cuts and other measures will drive hundreds of thousands deeper into poverty.

Currently there are 488,000 workers who earn less than the living wage in Scotland and this is set to increase after next April. The phenomena of the working poor, households living in poverty with at least one adult who is in work, has rocketed over the last five years. Today, a majority of the over 800,000 people in poverty involves households with one or two working adults. Numbers of foodbanks have rocketed creating a “humanitarian crisis”, according to one Scottish charity.

With 50,000 jobs already slashed from public services in Scotland and another 50,000 likely to go, there is no possibility of a mood that the “worst is over” existing for long, if at all. On the contrary, the scale of cuts pending will be felt even more deeply, creating the conditions for an increased mood for action among workers and communities.

Trade union struggle is key

Indeed the prospects for struggle of a mass character to defeat austerity will grow. This is a key question for our party. Struggle will play a decisive role in shaping consciousness. Ideas, programme and propaganda are vital, but as important is a movement, or a series of struggles, by the working class through which their outlook is transformed. Through struggle, ideas and methods are tested out and conclusions drawn as to the need to confront and ultimately defeat capitalism itself.

The potential for the eruption of mass struggle by the trade unions is rooted in the conditions that exist today. Indeed the only thing holding this back is the conscious role of the majority of the trade union leaders. Neither on the austerity cuts or the anti-trade union bill is there any intention of launching a fight back. The exception to this – The Public and Commercial Services Union (PCS), The Rail, Maritime and Transport Workers Union (RMT) and Glasgow Unison among others – proves that struggles can win concessions and indeed victories. This has been our experience in the recent Glasgow caseworkers and Dundee porters’ strikes, as well as the RMT who have also won concessions on the London Underground. These struggles are vital in helping to create “facts on the ground” while acting as an example and inspiration for others.

One feature of this period of savage onslaught on the working class has been the tendency among the tops of the movement to seek a compromise with the capitalist class. The Scottish Trades Union Congress (STUC), for example, have been working with the SNP government in Scotland as part of the Working Together Review that led to the Fair Work Convention. This body, with representation from government, employers and unions, will be, according to the Scottish government, a “powerful advocate of the partnership approach”. Underpinning the agreement is a so-called recognition of “fair pay”, trade union recognition and bargaining rights, but also is clearly an attempt to draw the unions into discussions and agreement over “acceptable cuts”. The dangers for the trade union movement are real and could involve at a certain stage a formal partnership agreement as in Ireland.

Under the conditions of ongoing austerity such an agreement would have no other role than to bind the trade unions into accepting cuts in exchange for a seat at the table. Where is the policy of “Fair Work” against the backdrop of up to 100,000 job cuts in the public sector from 2010 until 2019? Not to mention years of a pay cap policy which has resulted in workers seeing living standards fall at their fastest rate since the 1870s. With no perspective of leading a mass movement against austerity and therefore capitalism, the majority of the union tops in reality accept the need for cuts. At best they hope for an economic recovery and an easing of the pressure on public spending.

However, the tendency of the trade union leadership to acquiesce to austerity will not prevent a movement from developing. It may be that this will take place at a localised level to begin with, rather than national action, for example over the new round of public spending cuts. One of our central demands is for coordinated action across the trade unions. As we saw in the run-up to the November 30 2011 coordinated public sector strike, the impetus for this was created to a large extent by the more limited action in June 2011 involving PCS, National Union Teachers (NUT) and some others. As well as the huge Trades Union Congress (TUC) demonstration in London in March of that year.

In a similar way, while still making the case for coordinated action across the trade union movement, local struggles can act as a catalyst for more widespread struggles to develop. We’ve seen a reflection of this in Glasgow where all the major local government unions have adopted the no cuts policy of Glasgow Unison. Moreover, it is likely that the demand on councillors to refuse to make the cuts will spread to other local authorities as well. This will also apply to strike action as it develops, Even if strikes begin on a localised basis to begin with, they could act as a catalyst for growing and more widespread action. The breaking of the no compulsory redundancy position could also spark ballots for strike action.

The potential for major battles is not restricted to the public sector. Against the backdrop of a huge fall in the price of oil from $110 a barrel in June 2014 to around $50 today, major oil companies have slashed jobs and began an onslaught on wages and conditions. An estimated 15,000 jobs will have gone from the industry by the end of 2015. Both Unite and the GMB have been balloting oil workers relating to attacks on working conditions, specifically that the big employers wanted to move to a three weeks on, three weeks off rota system. These ballots resulted in big majorities for action and forced the employers to come back to the table. Further disputes are inevitable as the oil bosses continue to look for cuts.

As with the steel industry, the demand for the nationalisation of the oil sector is a key demand that will form part of any strategy to defend jobs and conditions. We’ve seen a huge response in the west of Scotland in particular to the campaign for nationalisation of the steel industry. Further attacks on the oil workers can also see this demand come into its own, linked to a fighting industrial action campaign by the unions to defend the jobs, pay and conditions.

Other action in the private sector is also likely in a range of industries. Our approach in all these cases will be to intervene quickly and offer support and solidarity as well as discussing the most effective way to combat the bosses’ attacks on workers.

The Trade Union Bill is also an important arena for potential action. With a correct lead from the TUC leadership a mass movement could have been built linking the struggle against austerity to this attack on fundamental democratic rights. However, its one thing passing a law, it’s another entirely trying to implement it, especially some of the clauses on picketing etc.

The draconian nature of the legislation can push workers into taking illegal action, if they are blocked by the rules. In Scotland the demands we raise on the local authorities and the Scottish government to refuse to implement the legislation will also be important and will also play a role in exposing the SNP who, while opposing the legislation, may argue that they have to accept those parts that apply to Scotland when it’s passed into law.

One year on

In the wake of the indyref the base of support for the “pro-union” capitalist parties has been dramatically weakened. Scottish Labour, who spearheaded the Better Together campaign, suffered an electoral annihilation just 8 months after their “victory” in the referendum.

The leadership of arch-Blairite Jim Murphy, who promised a revival, lasted barely 5 months. He lost his Westminster seat in May along with 39 of the 40 other Scottish Labour MPs. The former “Peoples Party” was reduced to its worst election result since 1918. In contrast, a landslide of support towards the SNP saw it secure 56 of the 59 available seats. Today they currently stand at 55% support in the polls for the Scottish elections in May 2016.

The standing joke after the 2010 general election was that there were more giant pandas in Edinburgh zoo than Tory MPs. Now this political humiliation applies not only to the Tories in Scotland, but Labour and the Lib Dems as well.

Moreover, a new referendum – the Quebec scenario, where two independence referendums were held within fifteen years – is also very likely. Another five planned years of savage Tory austerity will inevitably create the conditions for further demands for more devolved powers and independence.

Mass anti-austerity mood

The 2014 referendum was an expression of the same mass anti austerity, anti-establishment mood that has particularly undermined the former social democratic parties in creating the conditions for the rise of parties like Syriza and Podemos. Bernie Sanders’ insurgent campaign in the US and the huge support for Jeremy Corbyn are also a reflection of the widespread desire for new mass anti-austerity and working class parties.

Labour leader Harold Wilson coined the phrase “a week is a long time in politics”, pointing to the possibility of rapid political change over a short period of time. The events in the days following September 18 2014 were an acute example of this.

Rather than being cowed and defeated, tens of thousands of primarily young people poured onto the streets and squares looking for a way to continue the struggle. There was an explosion in the membership of pro-independence political parties with many searching for left and socialist ideas.

Project Fear; the combined might of the political establishment, the majority of the media and big business had unleashed an unprecedented campaign of intimidation and misinformation in the run-up to September 18. The effect of this was to drive the working class to the left. This mood, particularly from February 2014, was given an organised expression by the launch of an explicitly socialist pro-independence campaign by Tommy Sheridan – at the suggestion and with the support of Socialist Party Scotland.

The “Hope Over Fear” tour was a series of mass meetings of an energised and radicalised working class and caught the mood, which was in favour of independence but also radical socialist solutions to capitalist inspired austerity. Socialist Party Scotland helped organise huge meetings titled “the socialist case for independence” as part of this tour. The support for public ownership, taxing the rich, a living wage and an end to cuts was overwhelming and reflected the political vacuum to the left of the pro-business SNP.

New party

In the hours following the indyref we called for the launching of a new socialist party to offer a political home to young people and the working class. Tommy Sheridan and also the leadership of groups like the Radical Independence Campaign rejected such an approach. Tommy Sheridan went further and drew the conclusion that the left should call on people to vote for the SNP.

The failure to take these necessary steps, alongside the widespread outlook that the SNP leaders had been prepared to stand up against Project Fear, led to a mass influx into the party of over 80,000 people. However, as we predicted, this has not led to a significant shift to the left by the SNP under its new leader Nicola Sturgeon. Despite an unprecedented electoral mandate and securing 50% of the popular vote in May on an “anti-austerity” platform, the SNP are continuing to implement Tory cuts at council and Scottish Government level.

Indyref 2?

Today the issue is not so much whether there will be another referendum but rather its timing and the circumstances that could trigger it. Nicola Sturgeon and the SNP leadership are attempting to reconcile the demands of a large section of their new membership who want a commitment to a relatively quick referendum with her own “gradualist” approach. Sturgeon has made it clear that there wont be another vote unless “we were confident that we could win it by a large majority.”

The SNP leaders are in the process of drawing up the wording for their 2016 manifesto. In it they are likely to refer to a number of scenarios that could trigger an indyref 2. These include the possibility of Britain voting to leave the EU while Scotland vote to stay in. A failure to deliver the promised enhanced powers agreed by the Smith Commission, far less the “near federalism” promised in “the vow”, and a continuation of Tory austerity will also be included as “material changes of circumstance” that would trigger a possible second referendum.

In all likelihood there won’t be a date or even a firm commitment in the SNP 2016 manifesto for another referendum. However, there will be the option to call one if the conditions of an upsurge in support for independence existed. A possible referendum in 2020 or 2021 cannot be ruled out.

Westminster still has the powers over whether a “legal” referendum can take place in Scotland – not the Scottish parliament. It’s not ruled out that a Tory government could refuse another indyref, particularly if support for independence had risen markedly in the meantime. Under this scenario an “illegal” referendum could be organised by the Scottish government, creating a new flashpoint that would ratchet up the national question still further.

What the SNP leadership certainly will do is continue to use the issue of a second referendum to push for more concessions from the Tories on the one hand, and to try and placate the tens of thousands of new members of the party on the other.

In addition, they will also increasingly use the national question to try to divert attention away from their own role in the implementation of Tory austerity in Scotland. The scale of the cuts will be ratcheted up significantly over the next two or three years. Primarily it will be SNP MSPs and councillors, alongside Labour, who will be carrying through these cuts, leading to an increasing exposing of the pro-business SNP leadership.

Achilles heel

A key factor in the defeat of the referendum was the SNP’s pro-capitalist economic model for an independent Scotland. The SNP’s white paper – the so-called blueprint for independence – outlined support for tax cuts for the major corporations, a pledge to keep the monarchy and proposed a currency union with the Bank of England as the central bank – a single currency arrangement that the pro-union parties in Better Together ruled out.

Alex Salmond and co held out the promise, more like the chimera, of a thriving capitalist economy under independence in which “all boats would float”. Today, with a new recession only a matter of timing and the north sea oil price fallen by over half since last September, the idea of an independent capitalist Scotland offering an escape route from austerity is increasingly the Achilles heel of the SNP leadership.

By refusing to go beyond the limits of what capitalism could afford they were unable to combat the onslaught from big business and the bosses’ media. To answer the fears of a layer of the working class on pensions, public services, savings etc would have required a developed socialist programme, including support for massive wealth redistribution underpinned by the nationalisation under democratic control of the banks and big business in an independent socialist Scotland.

The Corbyn factor

An added potential complication for the SNP was the insurgent campaign of Jeremy Corbyn who won the UK Labour leadership contest. Corbyn stands significantly to the left of the SNP on public ownership, tax rises on the rich, his unflinching support for trade union struggles and workers rights etc.

While the carnage inflicted on Scottish Labour as a result of their collaboration with the Tories in Project Fear has been seismic, a new left, anti-austerity party could seriously undermine SNP support in Scotland. Whether this arises through an influx of new radicalised trade unionists and young people into Scottish Labour to try and transform it, and there are major obstacles to this, or whether a new party is ultimately created, remains to be seen.

The recent developments in Scottish Labour are worthy of comment here. A combination of the near-death experience for Labour in the May elections and Corby’s victory has changed the situation with Labour in Scotland. The recent party conference in Perth voted overwhelmingly to oppose Trident renewal, a position rejected earlier this year by Kezia Dugdale, the new Scottish leader. She was nevertheless forced to back the Trident position at the conference. In addition, Labour have also now come out in favour of using the new powers coming to the Scottish parliament for a complete reversal of the planned tax credit cuts. Even a section of the right in Scottish Labour are prepared to accept the move to the left that is taking place if it leads to an undermining of the SNP. However, this conversion does not go as far as to being prepared to deft the cuts.

As with the rest of the UK party, the balance of forces in Scottish Labour is stacked against Corbyn and his policies. Scottish Labour leader Kezia Dugdale openly opposed him during the election. There are no left figures in Labour’s leadership team in Scotland. At council level, for example, only two Glasgow Labour councillors out of 43 supported Corbyn. The right-wing majority in the UK Labour Party will oppose tooth-and-nail any attempts to drive the party to the left and democratise its structures. A determined campaign will be needed to change this balance of forces.

Our appeal to Jeremy Corbyn and his supporters in Scotland, as it is across Britain, is to organise an open conference and invite all his supporters, the trade unions who have backed him and socialist organisations to participate. Out of such a conference could develop a major anti-austerity and socialist campaigning organisation to provide a base of support for these ideas. It’s vital that an anti-austerity movement around Corbyn is built outside of the formal structures of Scottish Labour if this opportunity is not to be wasted.

In addition we would appeal to Jeremy Corbyn and his supporters in Scotland to reassess their position on the national question. No to independence, the position currently held by him, will be a barrier to reaching some of the most radicalised sections of the working class in Scotland. The numbers applying to join Labour in Scotland to support Corbyn have not been on the same scale as in England, partly this is a reflection of the still toxic brand that Labour is seen as in Scotland.

It is possible to stand for the unity of the working class across Britain at the same time as defending the democratic rights of the Scottish people. Socialist Party Scotland did precisely this during the referendum. We supported a Yes vote but also stood for an independent socialist Scotland as part of a voluntary socialist confederation with England, Wales and Ireland.

The Socialist Party and the Trade Unionist and Socialist Coalition (TUSC) have pioneered this approach and will continue to advocate such a stand. We’ll be writing to Labour and SNP candidates calling on them to support a no cuts policy. Where they do we will seek to make common cause with them. However, it is very likely that they will be tiny in number, if they exist at all. Therefore Scottish TUSC should stand as widely as possible in the Scottish parliament elections next year.

The outcome of the election, as current polls indicate, will be a re-election of an SNP government, very likely with an overall majority. Scottish Labour could stage a certain, limited recovery if they continue putting forward a “left” face in attacking the SNP, which is possible. Whatever the final outcome, the mood to confront and defeat austerity among the working class will grow. This will necessitate a growing challenge to the SNP from the socialist left on a principled basis. We will be in the forefront of such a strategy in both 2016 and 2017.

The referendum on September 18, 2014 was an expression of a mass anti-austerity mood in society and the hatred of the pro-big business political elite. The spectacular electoral success of the SNP, as well its spiralling membership following the indyref, was also a distorted reflection of the same mood. The SNP leadership by their actions so far have betrayed those who looked to them seeking a fighting opposition to cuts and austerity.

It is therefore vital that a clear socialist and campaigning anti-cuts political force is created. It is possible, and we hope it is the case, that Jeremy Corby’s victory will open the door to such a development. Although the retreats and concessions that Corbyn has made to the right wing raise serious questions as to whether this will take place. If it doesn’t, and it’s still too early to draw a definitive conclusion, the anti-austerity mobilisation around Corbyn will not simply disappear. Many will look for a more viable vehicle to continue the struggle to build an anti-austerity alternative. The TUSC intervention at the election next year is important to articulate and make concrete that alternative. This is all the more the case given the likely political platform of Rise and Solidarity, neither of whom will stand on a clear no cuts policy.

Basing itself on defiant opposition to austerity and mass trade union and community struggles against the accelerating cuts, the anti-trade union bill etc, such a political alternative could become a mass party within weeks and months. It would represent a big step forward in the necessary task of arming the working class with a clear socialist programme to lead the struggle against capitalism.