Get Red Pepper's email newsletter. Enter your email address to receive our latest articles, updates and news.

×

Who are the real strikers?

Kai Grachy on ‘capital strikes’ and the power of big finance

June 29, 2011
5 min read

‘As a minister, I experienced the power of industrialists and bankers to get their way by use of the crudest form of economic pressure, even blackmail, against a Labour Government. Compared to this, the pressure brought to bear in industrial disputes is minuscule.’

Tony Benn, Diaries, 1988

The smallest rumour of a worker downing tools in response to an injustice is enough to provoke hysteria in the British media, so little wonder that what is billed as the biggest wave of strikes in 85 years (albeit by a union not yet taking action) means our airwaves are full of questions as to the legitimacy of strike action.

Let’s skip over the ludicrous argument that one day’s less schooling on 30 June does more damage to the development of a school pupil than Michael Gove’s onslaught on the education system. And the one that the average teacher’s principal concern is their annual salary rather than the thankless job they have chosen to do – presumably in sharp distinction to our selfless banking class.

The vast majority of workers in the UK will only take strike action in the most extreme of circumstances, even when their wages, pensions and working conditions are under attack. Society is worse off as a result of this reluctance. Since the 1970s, workers’ share of the economy has been severely eroded. Our economy has turned into a giant casino for the super rich, with asset bubbles placing basics like housing out of the reach of ordinary people. Massive mortgages, credit card bills, privatised pension funds, public-private partnerships and a hundred other means of transferring money from the pockets of the majority into the investment portfolios of the elite have been created. Workers’ quiescence has been deafening.

Another section of society is much more active when it comes to protecting their own very narrow interests. Those in control of our society, most particularly the financial sector, are not afraid of using economic power to ensure governments of whatever shade serve their interests, no matter what the impact on millions of ordinary people.

The term ‘capital strike’ refers to the practice of business elites, in particular banks, withholding capital in an economy in order to pressure or undermine a government. Roosevelt first accused big business of capital strike in order to undermine his progressive ‘New Deal’ reforms in the 1930s.

But you don’t have to go back that far to see corporations ‘downing tools’. At every stage of the financial crisis, business elites have gobbled up their bail-out subsidies and piles of ‘quantitative easing’ while withholding those funds from small business. For all their posturing, Vince Cable and George Osborne have done nothing to ensure banks assist recovery, allowing them to raise rates for borrowers, keep them down for savers, and pocket the difference. Meanwhile, even a hint that the banks might be taxed a little more to pay for their behaviour provokes howls of protest and threats to move abroad.

Where threats fail to work (they usually don’t), finance indeed brings the economy to a halt. In April, Portuguese banks stopped buying government bonds, forcing the government within a matter of days to go to the European Central Bank for a bailout. It really makes no difference whether that bailout was sustainable, the point is to get those funds flowing into the banks’ coffers once again. Society will pay the price for many decades to come.

On a wider scale, a small group of unaccountable companies called Credit Ratings Agencies issue verdicts which effectively dry up a country’s access to finance, often sending economies into a tail spin.

None of this is limited to our own part of the world. Just to take a very recent example, the election of Ollanta Humala to president of Peru earlier this month, on the mildest of social democratic platforms, led to a stock market plunge after he dared raise the prospect of windfall taxes on the mining transnationals which are looting his country.

All of this has a deeply corrosive impact on democracy of course. Back in 2001/03 Lula da Silva faced an even tougher ride than Humala at the beginning of Latin America’s left turn. During his campaign, the Brazilian currency fell very quickly as it became increasingly clear Lula would win. Financiers attempted to subvert the democratic process, and indeed won a fair bit of influence over his government.

So again and again financiers use their power to change society to suit their own interests. It’s in the interests of everyone else that workers use strike action to shift power back in the direction of the rest of us.

Red Pepper is an independent, non-profit magazine that puts left politics and culture at the heart of its stories. We think publications should embrace the values of a movement that is unafraid to take a stand, radical yet not dogmatic, and focus on amplifying the voices of the people and activists that make up our movement. If you think so too, please support Red Pepper in continuing our work by becoming a subscriber today.
Why not try our new pay as you feel subscription? You decide how much to pay.
Share this article  
  share on facebook     share on twitter  

The government played the public for fools, and lost
The High Court has ruled that the government cannot veto local council investment decisions. This is a victory for local democracy and the BDS movement, and shows what can happen when we stand together, writes War on Want’s Ross Hemingway.

An ‘obscure’ party? I’m amazed at how little people in Britain know about the DUP
After the Tories' deal with the Democratic Unionists, Denis Burke asks why people in Britain weren't a bit more curious about Northern Ireland before now

The Tories’ deal with the DUP is outright bribery – but this government won’t last
Theresa May’s £1.5 billion bung to the DUP is the last nail in the coffin of the austerity myth, writes Louis Mendee

Brexit, Corbyn and beyond
Clarity of analysis can help the left avoid practical traps, argues Paul O'Connell

Paul Mason vs Progress: ‘Decide whether you want to be part of this party’ – full report
Broadcaster and Corbyn supporter Paul Mason tells the Blairites' annual conference some home truths

Contagion: how the crisis spread
Following on from his essay, How Empire Struck Back, Walden Bello speaks to TNI's Nick Buxton about how the financial crisis spread from the USA to Europe

How empire struck back
Walden Bello dissects the failure of Barack Obama's 'technocratic Keynesianism' and explains why this led to Donald Trump winning the US presidency

Empire en vogue
Nadine El-Enany examines the imperial pretensions of Britain's post-Brexit foreign affairs and trade strategy

Grenfell Tower residents evicted from hotel with just hours’ notice
An urgent call for support from the Radical Housing Network

Jeremy Corbyn is no longer the leader of the opposition – he has become the People’s Prime Minister
While Theresa May hides away, Corbyn stands with the people in our hours of need, writes Tom Walker

In the aftermath of this disaster, we must fight to restore respect and democracy for council tenants
Glyn Robbins says it's time to put residents, not private firms, back at the centre of decision-making over their housing

After Grenfell: ending the murderous war on our protections
Under cover of 'cutting red tape', the government has been slashing safety standards. It's time for it to stop, writes Christine Berry

Why the Grenfell Tower fire means everything must change
The fire was a man-made atrocity, says Faiza Shaheen – we must redesign our economic system so it can never happen again

Forcing MPs to take an oath of allegiance to the monarchy undermines democracy
As long as being an MP means pledging loyalty to an unelected head of state, our parliamentary system will remain undemocratic, writes Kate Flood

7 reasons why Labour can win the next election
From the rise of Grime for Corbyn to the reduced power of the tabloids, Will Murray looks at the reasons to be optimistic for Labour's chances next time

Red Pepper’s race section: open editorial meeting 25 June
On June 25th, the fourth of Red Pepper Race Section's Open Editorial Meetings will celebrate the launch of our new black writers' issue - Empire Will Eat Itself.

After two years of attacks on Corbyn supporters, where are the apologies?
In the aftermath of this spectacular election result, some issues in the Labour Party need addressing, argues Seema Chandwani

If Corbyn’s Labour wins, it will be Attlee v Churchill all over again
Jack Witek argues that a Labour victory is no longer unthinkable – and it would mean the biggest shake-up since 1945

On the life of Robin Murray, visionary economist
Hilary Wainwright pays tribute to the life and legacy of Robin Murray, one of the key figures of the New Left whose vision of a modern socialism lies at the heart of the Labour manifesto.

Letter from the US: Dear rest of the world, I’m just as confused as you are
Kate Harveston apologises for the rise of Trump, but promises to make it up to us somehow

The myth of ‘stability’ with Theresa May
Settit Beyene looks at the truth behind the prime minister's favourite soundbite

Civic strike paralyses Colombia’s principle pacific port
An alliance of community organisations are fighting ’to live with dignity’ in the face of military repression. Patrick Kane and Seb Ordoñez report.

Greece’s heavy load
While the UK left is divided over how to respond to Brexit, the people of Greece continue to groan under the burden of EU-backed austerity. Jane Shallice reports

On the narcissism of small differences
In an interview with the TNI's Nick Buxton, social scientist and activist Susan George reflects on the French Presidential Elections.

Why Corbyn’s ‘unpopularity’ is exaggerated: Polls show he’s more popular than most other parties’ leaders – and on the up
Headlines about Jeremy Corbyn’s poor approval ratings in polls don’t tell the whole story, writes Alex Nunns

Job vacancy: Red Pepper is looking for a political organiser
Closing date for applications: postponed, see below

The media wants to demoralise Corbyn’s supporters – don’t let them succeed
Michael Calderbank looks at the results of yesterday's local elections

In light of Dunkirk: What have we learned from the (lack of) response in Calais?
Amy Corcoran and Sam Walton ask who helps refugees when it matters – and who stands on the sidelines

Osborne’s first day at work – activists to pulp Evening Standards for renewable energy
This isn’t just a stunt. A new worker’s cooperative is set to employ people on a real living wage in a recycling scheme that is heavily trolling George Osborne. Jenny Nelson writes

Red Pepper’s race section: open editorial meeting 24 May
On May 24th, we’ll be holding the third of Red Pepper’s Race Section Open Editorial Meetings.


95