Stock market jitters

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A SYSTEM OUT OF CONTROL AFTER the last world slump, in 1974-5, the major capitalist governments pulled their economies back The new spending did produce some recovery.

But it was very limited - mdeed, in Britain, hardly noticeable. And inilation ballooned, prompting real fears of a terrible collapse of the world monetary This time round, all the leading capitalist governments, except France's new Socialist administration. have resolved to sweat it out, with 'tight money' policies designed to restrain inflation and to shift the balance of income from state spending to private Thus the world downturn that began between summer 1979 and spring 1980 has continued much longer than 1974-5's slump. And it could very well Wall Street shares have been falling since June. At the beginning of September the London stock market started falling, too - and fast. Over the last week or so the fall in prices has given way to sudden, alarming, plunges, not only in the US and Britain but also in Japan, Germany, France, Canada, etc.

The fall in share prices goes alongside high interest rates. The real interest rate (1.e. after allowing for inflation) in the US is the highest since the 1930s. Throughout advanced capitalist countries real interest rates are often much higher In other words - the people with the money are sitting on their hands. And instead of easing credit, The capitalists and their governments cannot OI making new investments themselves, the control their crazy system in any serious way. Their "tight money' policy, designed to curb inflation and Part of the drop in share prices, or the rise in state spending, has in fact (via higher interest rates) interest rates, may be a 'bubble' created by left inflation high and budget deficits huge. speculation. But such is the blindness of the But not only that. At present the main capitalist capitalist market system that a 'bubble' can well turn governments will not even try to forestall the threat For Reagan and Thatcher the recession has its Capitalism does not produce goods for people's advantages. They aim to use it to drive down real needs, but only Ior cash. It credit and cash flow dry wages, cut jobs, and enforce speed-up. That is the up sutticiently, then the whole economic process can real meaning of the code-words 'war against waste' falter. We slide into chaos - with no cash in the hands of the unemployed workers who need what In the US, output per worker rose in the first the idle factories could produce, and no effec- quarter of this year at an annual rate of 6%. In tive demand for goods sufficient to make the money- Britain, it rose at 9% between the first and second up again by increased state spending.

system.

profit.

lurch into a new, more drastic, decline.

than the real rate of profit.

governments are sitting tight too.

into a real slump.

A STRONG intervention from Lambeth council leader Ted Knight forced through an emergency motion calling on Labour's NEC to coordinate the struggle of Labour councillors against Hesltine's planned legislation on council spending.

It was this debate which came the closest to discussing real action to combat what every speaker routinely described as vicious and savage Tory policies.

Speakers prior to Knight men promote production. of slump.

and "battle against inflation' dards. be ended. butput per worker by 30% last year.

Unemployment is 12% in Britain, 52% in West Germany, and over 7% in every other major capitalist country except Japan.

Wage is secondary. dards and our jobs.

rises in line with that index.

with no loss of pay.

on a more rational basis. and to defeat the Tories.

ful public works.

to the labour movement.