Debtors of the World, Unite!

With City Hall in the hands of Boris Johnson, an anti-political clown if there ever was one, it would seem that the intransigence with which the state opposes the demands of trade unions. There has been talk for a while now of taking the workforce out of the tube completely, replacing them with automated machines. It would be a popular move in the London City-State, where any kind of inconvenience equates to an outright assault on one's basic liberty. The tube unions are the last bastion of working-class power left in this country and this is precisely the reason that the forces of reaction are out to destroy them. No doubt it's part of the same process that has rolled back the state in public services and even more so today. After all the tube is mostly to get people out there to be rinsed at work and in the shops, think surplus value. Thatcher could only dream of doing what Cameron is doing today. The Tories themselves have been caught saying this, though we all know it.

The Tories handed over a lot of public money to banks from 1992 onwards as part of the Public-Private Partnership, which sold-off public aid and gave greater power to bankers. As Michael Hudson wrote "The financial giveaway had the effect of increasing prices for basic infrastructure services by building in heavy financial fees – guaranteed for the banks, who lent the money that banks and property owners used to pay in taxes in more progressive times." The theory goes that the banks will create jobs as they invest the funds in British infrastructure, specifically public transport, but it was really a way for real estate speculators to get even richer. The extension of the Jubilee Line to Canary Wharf cost £3.5 billion as it raised property values along the route by £13 billion. The public investment in transport could pay for itself simply with a tax on the higher rent-of-location and the site value. But the government would rather the banks rake in the cash.

As Chomsky has pointed out when politicians prefer to talk about 'jobs' than even utter the filthy word 'profits'. The allies of the super-rich then moved to sell-off British Rail and saw to it that the railways carry an over-flowing gravy train for the wealthy. It is standard practice in a privatisation for the state to make sure the buyers are well served with comfy pillows stuffed with the taxes of working-class people. Last year that blond gannet Richard Branson gobbled up £18 million of tax-payer's money as the system underwent a multi-billion state upgrade. The privatisation opened up a space for private ownership safeguarded by public investment and, even as standards of service have slipped, there has been no attempt to re-nationalise the railways. The government contributes £4.6 billion to the railways as the private sector pays just £459 million into the set-up, most of which goes towards stock rather than anything in the real world.

Since the 70s we have seen a process of de-industrialisation and financialisation. Thatcher sold-off an awful lot of things and broke the backs of major unions as part of a policy that amounted to the destruction of entire industries. Production was taken abroad where there was a ready workforce desperate enough to work for a $1 a day or whatever. The businesses of the country began invest overseas and import much more from abroad. The back of the industrial working-class was smashed in the 1980s leading to a massive unemployment level. So the threat of unions to the power of the wealthy had been significantly diminished. The people were left in a position where they could easily be squeezed dry by businesses, working-class people suffered some of the biggest wage-cuts in 1990. You would've thought that this would've held down the ability of people to spend, spend, spend. But a lot of credit had been freed up as the constraints that had kept banks in check were removed.

The shock of the assault on the living-standards of the working-class left them in an increasingly dependent position on debt. To make up for the loss in wages people turned to their credit cards, there was a much greater need for loans and mortgages than ever before. This is the basis of the explosion of household debts in the last 30 years. A lot of these debts are concentrated in housing markets because the system is pushed to find profitable investments in order to grow. We're talking about a minimum of 3% compound growth. The desperation to find new investment opportunities for over a trillion dollars has led to greater investment in the control of assets. We might want to think that the banks take unused funds from our bank accounts and use them to help some family to buy a home somewhere. Instead, what we've seen is the emergence of a huge property bubble and the concentration of enormous sums to feather the nests of a very few.

The banking system is built on the knowledge that not everyone will come into the bank and want every last penny of their money. Of course, when a run on the bank happens it's newsworthy for this reason - remember Northern Rock. The odds are calculated in the favour of greater lending and accumulation. The presupposition is that there being enough money to keep the bank going, so that there is enough there for people to pay the bills and put food on the table. The tendency here is to lend out more and more money to accumulate in order to cover itself. This is how the system pushes itself at the ground level. Everyone knows that banks aren't what they used to be. There used to be a time when the pound sterling was symbolic of a pound of silver somewhere. Now that's gone with the advent of fiat currency much to the chagrin of nostalgic right-wingers. It's much more important that the financialisation of the economy has made financial crises likely.

The household debt in Britain is set to rise from £1,560 billion to £2,126 billion in this time of austerity. I would assume there is something similar going on with household debts around the world given the attempts of government to patch up the system as it is. Household debt in the US was at 115% in 2011 down from 135% in 2008, the dip is probably the result of the crisis. In the years of the bubble, 2000 to 2007, households doubled their debt to almost $14 trillion while personal consumption shot up by 44% from $7 trillion to nearly $10 trillion. Over a period of 5 years American households ringed $2.3 trillion of home equity loans and cash-out refinancing from their homes. That's an injection of nearly $500 billion into the economy every year. So you can see why Obama's so-called "stimulus package" was a cop-out, $787 billion for 2 years doesn't cut it! Especially when it's left to the sort of self-glorified bureaucrats who would rather cut than spend.

There is actually an opportunity in this. It might seem that the working-class movement is finished because it has been de-industrialised and, at this point, unions have been reduced to xenophobic suspicions of anymore foreign rivals coming over here. That extends to the opposition of trade unions to European integration, these are supposed to be organisations that are internationalist. It's fine to propose unionisation of workers on a European scale. We're wrong to confine the prospects of unionisation to traditional industries that have been wiped out. Follow the money, grab the vampire by the balls before you drive in the stake! The formation of debtors into unions on a cross-continent scale could potentially give the working-class a way to yank at the banks. A straight refusal by the majority of people with debts to make the payments unless the rates of interest are cut could work. It could also be a way to repudiate the debts altogether.

There are flaws here, but it is a way forward. It would definitely need to be well organised and coordinated to ensure that it was a mass-scale action that would have an impact. Generally the major flaw of the trade union is that the relationship between capital and wage labour can be taken for granted. The priority is to improve the conditions for workers within that relationship, which is fine but the relationship is the fundamental problem. The capitalists have the upper-hand to the workers in this relationship, so victories can only be temporary. It's true that the debtor union would only be active in pushing for a better deal for people who need to fall back on credit cards, loans and so on. But it's striking at the centre of the system and we forget that banking is actually more susceptible to social democratic compromise than labour-intensive industry was. If the bankers think they have to pay-off socialism that's exactly what they'll do.