derelictspaces making some space

Life in the city at the moment is governed by crisis: housing, climate, food security, debt, and this thing called inflation… fears of the latter having driven large parts of the infrastructural and reproductive parts of the UK’s economy to industrial action over the last year.

Inflation has all the headlines at the moment for good reason. The monetary policies of the central bank seem to have no effect on the liquidity and credit crisis in London’s banks and finance houses. Which, considering the City is everything here and responsible for the boom (alongside the housing bubble), is a problem to say the least. The crash in the commercial real estate market, the write downs, and the large loss of jobs in the City will all have a substantial effect on the life of the City (though, the super rich will barely feel it in the end). But considering that increasing in money supply is one of the ways a government pays for its services, and the UK government is running a £40 billion deficit, the inability of the central bank to rein in interest rates is a problem – it doesn’t want high inflation (the inflation rate for food – estimated to be around 15.5% in some instances - is already a problem). So it has to use its only other tool of any substance – wage controls.

Real inflation is running at about 4.8%, though this may be an underestimate, and it has to be noted that different income brackets experience different levels of inflation. The official measure is the consumer price index, rising annually at 2.5 per cent. Which is opposed by the retail price index, which includes housing costs, which is running at 3.8 per cent. However, on some estimates, food is up 15.5 per cent (more conservative estimates put the figure at 7 per cent), gas and electricity more than 12 per cent and petrol 16.5 per cent.

The Government is trying to fight inflation via a 2% cap on pay rises in the public service (and through corporatist pressure on the charity sector – see the reasons behind the Shelter strike). Which is to say – it is trying to control inflation by cutting wages in real terms. And, as Brian Holmes says following Marx, inflation is actually the price of wages. Raw commodities are more expensive, so the only way to maintain profits across the board is to cut the cost of labour. Now, the Government isn’t ‘producing’ anything in particular, but it is reproducing society (education, health, etc) and the infrastructure necessary for capital accumulation (roads, legal and legislative services, police and prisons, etc). Which figure in the end sum of capital accumulation. And, alongside this, considering the total size of these sectors, if wages can be held down in the public sector, this will go a long way in holding down wage growth in general (1 in 5 workers in the UK).

The problem is this though: real wages have been in decline since the 70’s in general terms, and during New Labour’s reign in particular. This has been compensated for by 3 things – cheap food prices, cheap goods, and the ‘boundless’ rise of house prices, which have acted as an a source of cheap credit for households. Now we have a problem – basic commodities are rising in price (through increasing demand, decreasing supply and because commodities are an attractive speculative investment now because of the credit crunch and subprime fiasco) making goods and food more expensive; industrial unrest and wage struggles (and inflation in the case of China) around the globe are taking their share from profit margins; climate change, droughts, biofuels, the changes in diet (more meat) and increasing global population are all affecting food supply driving up prices; and the financialisation of debt and rampant speculation in house prices have come to a grinding halt – housing is losing its over inflated value. Which all means that people are feeling the pinch. And they want more money. They have had their declining wages and financial security buttressed by debt [see Lenin’s Tomb and Brian Holme’s excellent pieces] and cheap food and goods for 15 years or so. And now its coming to an end they want higher wages (or they are just out and out rioting in some places). But they can’t have them, because that would mean lower profits. And so inflation is the front line of struggle.

Which brings us to the recent industrial struggles in the UK – not all are in the public sector, and not all are in infrastructural or reproductive sectors (such as the refinery strike in Scotland, journalists, airline industrial action, etc), but many are. Teachers, nurses, postal workers, charity sector workers, workers in jobcentres and benefit offices, public sector workers across the board… people have been quick to call it another Winter of Discontent. But it’s not – not yet. There is real and substantial anger and resistance (see last years postal workers wildcat strikes for example), but this is being tempered by debt and mortgages, and the unions seeing now not as a time for strong industrial action, but as a time to push Gordon Brown on his wage and industrial policies. Because it looks like he will, at best, be PM in a hung parliament. And at worse be humiliated in opposition as the Tories take power. So the unions think now is the time to get what they can from him with spectacular displays of strength, as opposed to grueling industrial battles.

But this pessimism has to be tempered by the fact of the 2% cap. Around 25% of the public sector is on
£16,000/year or less (quoted in the linked article). And food inflation of 15% is killing them. The loss of housing value and their massive personal debt is killing them. So they have little choice but to fight. And fight they have - the postal wildcats last year are an excellent example. If anything its just going to get worse. If I had to hazard a guess, I would put the reproductive sectors of the state and capital – those sectors that permit the reproduction of people, legal and bureaucratic structures, physical, infrastructure – to be the front line in the coming round of struggle. Not just because of the 2% cap, but because if the cost of reproduction can be cut, profit increases. Historically reproduction has been a source of fantastic capital accumulation, and my sense is that in times of trouble, capital returns to plunder reproductive processes - both those of the State and those of existing communities and social networks. Part of this return is so-called primitive accumulation. But it goes further than this to the most fundamental social processes – processes that have in a way always formed the basis of capitalist accumulation. And now, with so many being incorporated into the processes of the state, struggles around reproductive labour becomes struggles over wages.