Since July 25th, the government has been boasting of having brought the recession to an end, because official statistics show that annual production (what they call Gross Domestic Product or GDP) is back to its pre-crisis level. As if bringing the economy back to square one after six years of recurring financial crises and slump across all industries was worth boasting about!
But even this claim is no more than a sleight of hand, because over the past six years, the population has increased, while inflation was eroding the value of the pound. If both these factors are taken into account, it is estimated that the economy actually produces nearly 6% less per head than it did at its peak, back in 2008!
A Permanent crisis
There is another official figure which tells a very different story about this recession which is supposed to be over: total investments by British companies will be £50bn lower this year than in 2008. In other words, in this respect, the long economic degradation of the past six years is just carrying on, more or less at the same pace.
It is estimated that the sum total of lost production due to plant closures, short-time, etc., in Britain over the past six years amounted to an astronomical £320bn - a large part of which was due to a sharp fall in investment.
Not that companies were strapped for cash, though. Simply, the share of their profits which was not re-invested one way or another in production increased dramatically - reaching over £300bn last year!
In fact, the same thing happened in all the rich countries. A recent survey shows that the world's 2,000 largest private firms are sitting on a cash mountain worth £2,750bn - or twice Britain's GDP - with around 16% of this amount hoarded by British companies. Despite this, the same 2,000 firms have reduced their investments in 2013 and expect them to fall each year up to and including 2016.
This means that not only do the bosses fail to invest in new production and equipment, but they operate with outdated, worn out and poorly-maintained machinery - regardless of the risks for the workers concerned. Meanwhile they use their cash piles to speculate and to increase returns to shareholders. Nothing surprising in that, of course: the capitalists are only there to make profits, not to create useful jobs and production, and least of all, to protect workers' health!
Squeezing more out of our labour
Behind the official GDP figures, there are huge differences between different sectors of the economy. For instance, the output of production industries, which includes all newly-created material wealth, is still 11% smaller compared with 2008!
On paper, this drop may well be made up for by the meteoric growth of some service industries. But this doesn't make up for the fact that hundreds of thousands of workers have been pushed out of decent jobs and forced into low-paid, casual jobs, zero-hours contracts, or self-employment - when they haven't been forced into permanent unemployment! Nor for the fact that real wages are down by 12% from their 2008 level.
In reality, the economy has shrunk, with the bosses striving to extract always more out of our labour in order to maintain their profits on the basis of reduced production of material goods. Worse even, the economy remains in a permanent state of instability due to speculative bubbles, dubious debts and other "toxic" threats.
But what do the capitalists and their politicians care if their profit system staggers from one crisis to the next, as long as they are able to maintain their profits out of this reduced economic activity?
Such was precisely the whole point of the "deficit reduction policies" - i.e. austerity measures - implemented by both Labour and ConDems since 2008 - to shift the burden of the crisis from the capitalist minority to the working class majority. Welfare and service cuts were made to fund tax handouts and subsidies to companies and shareholders, while the bosses were cutting jobs and driving real wages down.
No wonder the recession is over for the capitalists - in fact, it has been for some time already - as is illustrated by the £100 bn to be paid in dividends to shareholders this year (up 5.4%), the on-going rise of the stock market, the soaring prices of top-end properties, the roaring luxury goods markets, etc.
But for the working class, the crisis remains as bad as ever and this is precisely why this hopelessly bankrupt profit system needs to be replaced - before it blows up once again!