Winning the global race for growth?
"I'm Backing Britain" was a brief patriotic campaign, which flourished in early 1968 and was aimed at boosting the British economy. The campaign started spontaneously when five Surbiton secretaries volunteered to work an extra half-hour each day without pay to boost productivity and urged others to do the same. The invitation received an enormous response and a campaign took off spectacularly; it became a nationwide movement within a week. Trade unions were suspicious of, or even opposed to, the campaign, considering it as an attempt to extend working hours surreptitiously and to hide inefficiency by management.
The campaign received official endorsement by the Prime Minister, Harold Wilson, but it found that being perceived as government-endorsed was a mixed blessing. The Union Flag logo encouraged by the campaign became highly visible on the high streets, and attempts were made to take over the campaign by Robert Maxwell, who wanted to change its focus into an appeal to 'Buy British', but the campaign's own T-shirts were made in Portugal. After a few months without any noticeable effect on individual companies or the economy generally, interest flagged amid much embarrassment about some of the ways in which the campaign had been pursued and supported.
It has come to be regarded as an iconic example of a failed attempt to transform British economic prospects.'
https://en.wikipedia.org/wiki/I%27m_Backing_Britain
'Britain’s factories suffered the deepest slump in orders since the first Covid lockdown and are braced for worse to come as demand from customers in the UK and overseas withers.
Businesses are slashing investment amid rising taxes and red tape, according to the Confederation of British Industry’s survey of the manufacturing sector.
“Manufacturers have entered the New Year in a grim mood. Confidence has evaporated over the last three months as orders have dropped,” said Ben Jones, economist at the business group.
“A fall in domestic deliveries comes amid widespread concerns over the impact of the increase in National Insurance contributions, minimum wages and changes to employment law on firms’ operating costs.”
Much of the global manufacturing sector is struggling with German industry gripped by high energy prices, weak demand and stiff competition from Chinese car manufacturers, while China itself is also battling against an economic slump caused in part by a property crisis.
As a result British factories have few orders from overseas.
“Export prospects appear worse than at any time since the pandemic, reflecting a slowdown in overseas demand and reports of ongoing difficulties securing supply contracts with customers based in the EU,” said Mr Jones.
He called on the Government to inject fresh confidence into the economy.
“Several firms noted concern that negative sentiment risks becoming self-fulfilling,” said Mr Jones.
“The government can play a role in re-booting confidence by sending clear signals of intent on policies that could support the manufacturing sector, notably delivering an industrial strategy that helps the UK win the global race for growth, matching skills to economic needs, and accelerating our energy transition and resilience.”
The share of businesses reporting falling orders outweighed the proportion with rising demand by a margin of 20 percentage points, the worst since July 2020.
Expectations for the coming quarter are even worse, with the net balance anticipating growth in orders falling to minus 32pc, the lowest since April 2020, at the start of the first Covid lockdown.' The Telegraph
The below is from the March 1991 issue of theSocialist Standard
'Since its evolution out of feudalism, the capitalist system of society has ensured that there has been a long-term expansion in the productive capacity of the world. TVs, computers, weapons capable of mass wreckage at one stroke—all these things that were once unthinkable have become basic features of life, at least in the more developed areas of the planet where capitalism has been dominant for many decades, and in some instances, hundreds of years.
Although capitalism broke through the fetters placed upon production by the feudal system and has expanded the forces of production to an unprecedented degree in the years since, the expansion of productive capacity and output under capitalism has never proceeded in a straight line. Notions of steady growth and constantly increasing well-being owe more to the rhetoric of politicians than the actual reality of capitalist development.
As
a system, capitalism grossly underuses the technology and potential
for production that it has helped develop. On one level, this can be
seen by the growth in employment of people who are not engaged in
intrinsically useful activity—bankers, accountants, insurance
workers, armed forces personnel and so on. But even when capitalism
can be said to be working at “full capacity”, with expanding
output, growing productivity and booming sales, a period of
“under-use” is always around the corner.
Falling
output
Capitalism
in Britain has reached just such a turning point. The last few years
have seen fairly steady growth, with rising productivity and
increased investment in those expanding sectors of industry that were
making the headlines in Thatcher’s last years in
office—particularly microelectronics and information technology.
Much of that growth and expansion has now been halted.
This
has not, of course, prevented the present government from arguing
that the downturn in economic performance is just a "blip”.
Only in November 1990 was John Major (when Chancellor) prepared to
admit tentatively that Britain is in recession. The government
currently defines a recession as being a situation when there is a
negative growth rate for two successive quarters, but this “official"
definition hardly matters to the thousands being thrown on to the
dole queue or the thousands of others forced into
bankruptcy.
Britain,
in common with a number of other countries, is now in a situation
where industrial production is falling and unemployment is rising.
Although the official unemployment statistics have been doctored to
the extent that they have become virtually meaningless as a measure
of the actual level of unemployment in Britain, they do at least
indicate trends—and the current trend is up. Manufacturing
production has been falling since April last year and in the three
months to November fell by 2.7 percent compared with the previous
three-month period (Independent
on Sunday,
27
January).
So
far as governments and politicians are concerned, falling rates of
growth and high levels of unemployment are signs that something has
“gone wrong". When things start to go wrong for capitalist
governments they often look for a scapegoat— like some hapless
(ex-)Minister whose irresponsibility and recklessness is blamed for
having brought the period of growth to an end. In Britain this role
has been allocated to former Chancellor Nigel Lawson, a man
previously described as "quite brilliant" by Thatcher and
Major. But governments taking the credit when output is expanding and
unemployment is low, and finding a scapegoat when things get rough is
based on the mistaken assumption that the capitalist business cycle
results from the policies they pursue. They may like to think that
they are in control of the economy and that when things go wrong they
can put them right again with the correct policies, but this is a
fantasy.
Over—expansion
What
governments fail to realise is that an economic recession is not an
example of capitalism “going wrong" because of some dreadful
ministerial error. Economic recessions with stagnating production,
growing unemployment and a further slide into poverty are entirely
normal—and necessary—features of capitalist development. This is
because of the inner logic of the capitalist system's drive towards
expansion.
The
conditions for the development of an economic recession are present
even when the capitalist system is in a period of boom, or relative
prosperity. One thing that is immediately noticeable is that the
operations of capitalism are not planned at the level of the whole
economy. Decisions about investment are made by thousands of
competing enterprises operating independently without social control
or regulation. This means that when business is booming and when
profits and growth rates are high "over-investment" by some
enterprises will inevitably occur. In pursuit of future profits they
expand their productive capacity beyond what the market which they
are producing for can absorb.
A
particular industry over-investing and expanding its productive
capacity beyond the limits of market demand in this way is the usual
cause of an economic crisis and subsequent depression. If capitalist
growth was to be achieved in a controlled manner, eliminating booms
and slumps, then growth would have to be balanced in each sector of
industry. But the growth of an industry is not linked to the demands
of other industries—its growth is determined by the expectation of
profit, and this inevitably leads to a disproportion in investment
and a disproportionate expansion between the various branches of
production.
When
an industry has over-produced for its particular market, this will
have a knock-on effect for firms operating in other sectors of the
economy. For instance, if an enterprise is no longer able to sell the
commodities it has produced on the market at a profit, production
will be cut back thereby slowing output. This will provoke a chain
reaction as the enterprises' suppliers will no longer be able to sell
all their products either, which will in turn affect their suppliers
and then their suppliers' suppliers, and so on. Such an
overproduction for selective markets therefore only has to appear in
a few key industries for a crisis to break out and spread—reducing
overall growth rates and increasing unemployment. And it all arises
out of the general anarchy of production inherent in the capitalist
system.
Boom—slump
cycle
After
a period of generalised stagnation and high unemployment, capitalism
will be able to move out of the slump phase of its trade cycle.
Although a recession has devastating consequences for the working
class, no slump is permanent and once many of the weaker capitals
have gone to the wall—with their assets being sold off cheaply to
their competitors—the prospects for investment and expansion
improve again. Capital depreciation, coupled with reduced interest
rates caused by reduced demand for money capital, and lower real wage
rates in a recession, mean that the prospect for making profits
improves and industries begin to expand once more, taking on more
workers. The cycle then begins all over again. As Marx pointed out in
the last century:
The factory system's tremendous capacity for expanding with sudden immense leaps, and its dependence on the world market, necessarily gives rise to the following cycle: feverish production, a consequent glut on the market, then a contraction of the market, which causes production to be crippled. The life of industry becomes a series of periods of moderate activity, prosperity, over-production, crisis and stagnation. (Capital. Volume I. page 580, Penguin edition).
Now
that capitalism has become a world system the "sudden leaps"
of production referred to by Marx are not nearly as immense as they
were in the capitalist system's historical ascent when whole
continents of the Earth still had to be brought into the "factory
system" with its wage-labour and capital relationship. Indeed
capitalism, having raised the forces of production to a level where a
society of abundance is feasible, has outlived its usefulness for
humankind, and its cycles of boom and slump are a testament to its
inherent inability to utilise resources efficiently. Capitalism can
only advance so long as there are periods of regression when workers
are made redundant in increasing numbers. when growth stagnates and
when poverty spreads—not merely in the "developed" areas
of the world but in the weaker capitalist states also, where the
effects of the capitalist trade cycle are often felt hardest.
Most
importantly of all, there is nothing that politicians can do to
eliminate the boom-slump cycle—it will be around as long as
capitalism itself. Capitalism cannot be efficiently planned as
anarchy of production and uneven development are at the very heart of
the system. All attempts at planning capitalism have ended in
disaster—most notably in state capitalist countries like Russia and
China where production seems to be in an almost chronic state of
stagnation and where unemployment has. at least until recently, been
masked by overstaffing.
The
only way to take the abundant resources of the Earth and use them in
an efficient manner is to establish a system of society based on
common ownership and democratic control, where articles of wealth
will be produced solely for use and not for exchange on a market with
a view to the profit of a minority. Only then will crises, booms and
slumps be a thing of the past and only then can production be geared
to satisfying the needs of the inhabitants of the Earth.'
Dave Perrin
https://socialiststandardmyspace.blogspot.com/2020/03/crises-booms-and-slumps-1991.html
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