Capitalists
will try every trick to derail a Labour government. Sarah Bates
argues it will take mass resistance and strong counter-measures to
give them a run for their money
Part
1
It’s
not a paranoid fantasy to argue that parts of the establishment want
to derail the left wing Labour leadership’s plans. The prospect of
a Jeremy Corbyn-led Labour government seemed like an outside chance
earlier this year. It now seems more than possible, with even the
bosses’ Economist magazine calling him “The likely lad”.
At
The World Transformed festival in Brighton last week, shadow
chancellor John McDonnell spoke about a “potential assault” by
the ruling class. He said the leadership is doing “war game-type
scenario planning” for all possibilities following a Labour
victory.
One
possibility is that bankers could launch a run on the pound.
Britain’s currency—the pound sterling—“floats” on the
international market. Its value goes up and down as investors buy and
sell sterling. When the pound falls, private investors claim Britain
may be unable to pay back state debts. So they rapidly sell their
stock of sterling at reduced prices before their profits can take a
hit.
Bankers
and bosses say they withdraw their investments in sterling because
they think the market is in trouble. But they are not just moving
money from one account another—it can be a calculated method of
political influence. If this mass selling happens, it forces the
government to devalue the pound. Because the pound would be valued
less favourably against other countries’ currencies, the price of
imported goods would go up.
The
Tories and mainstream media piled criticism on McDonnell for even
discussing a run on the pound. That’s a bit rich of the Tories, who
presided over an 11 percent drop in the pound after Brexit. In the
immediate aftermath of the vote the pound fell to its lowest level
since 1985—and £120 billion was wiped off the value of the FTSE
100 share index.
But
this isn’t the first time bosses have threatened a run on the
pound. In 1974 Harold Wilson’s Labour government was elected on a
wave of anger against the Tories and rising trade union militancy.
Its manifesto pledged to “bring about a fundamental and
irreversible shift in the balance of wealth and power towards working
people”.
The
bosses bared their teeth to face down the Labour government. They
destabilised the economy through mass selling of sterling, which
quickly lost value against the dollar. By 1976 the value of the pound
declined by nearly 25 percent in nine months. Terrified of a
deepening economic crisis, Labour’s chancellor Denis Healey asked
the International Monetary Fund (IMF) for a huge loan. At £2.3
billion, it was the largest amount the IMF had lent at that point.
But the money came with strings—the IMF insisted the Labour
government impose big public sector cuts.
Source,
links:
https://socialistworker.co.uk/art/45399/We+will+need+sterling+resistance+to+stop+the+bosses+sabotage
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