LAST WEEK's plunging pound effectively nailed the myth that sacrifices by workers could save the ailing fortunes OT-DISA capitalism. truth is brutally simple. The cost of the £2.3 billion loan the International Monetary Fund will be:
*25 billion worth of cuts in government expediture - 8 per cent off at a stroke;
*attempts to enforce a 10 per cent cut in jobs in central and local coveicl *large curbs in monetary supply;
*direct wage-cuts and an increase in unemployment to the two million mark.
Already the Tories have enthusiastically accepted these proposals, and It will be tne ransom paid oy te working class if the abject collaboration of the trade union leaders with the Labour Government is allowed to continue. The utopian nonsense of an export-led boom how can capitalist countries achieve an export-led boom at the same time? - has been similarly exploded. This week's news from the USA and West Germany shows that the long-heralded world boom is being strangled at In the USA, the index of leading economic indicators fell for the first time since early 1975 (and the cost of Ine OneT wolutA was anomer 2.5 million Americans forced below the poverty line last year).
In West Germany, business confidence is deteriorating as consumer demand levels off. The crude August trade surplus was down to $475m from $1,030m in July. external developments in food prices, the rapid pass through of a surge in industrial material prices and a rekindling of inflationary expectations'.
Every one per cent fall in the value of the pound brought about by the speculators will add anther ½ per cent to the rate of inflation. Remember that the next time someone asks you to take Walt cut to beat ABaLOn The real crisis of British capitalism lies in the lack of productive investment. Despite the rapacious greed of the bosses, which has seen trading OTOTTS CAD TONSoo nOnsn the third quarter of 1975 to £1,690 millions in the first quarter of 1976 it's only the decline in gross trading profits that has been halted Profits The Bank of England Quarterly Bulletin for September 1976 reveals that whereas gross trading profits as a percentage of total domestic income were 11.6 per cent at the end of 1974, in the first quarter of 1976 they were on v 10.6 per cent The steady decline in the profitability of British industry was underlined Sunday Times: the real, post-tax rate of return earned by British companies has fallen from between 7 and 9 per cent in the early 1960's to between 3 and 4 per cent in 1973 and 1974. The 1 October Financial Times reported a marked deterioration in trading profits in building materials, electricals and engineering - core sections of the economy The only good news came from consumer non-durables Breweries clocked up a gain of 44.3 per cent in trading profits over the previous year