Food, fuel, and Euro crash: challenges for 2011
It’s looking like 2011 is going to be a bumpy economic ride. How the anti-cuts movement manoeuvres these mountains could define our future.
For a start, the amount stuff (commodities) costs is expected to go up, lots.
For example, oil prices could well de-rail any economic recovery. For lefty activists, oil prices pose a particular challenge. If they do go through the roof, it may turn out that the next major movement of civil unrest is truck drivers blockading oil refineries and demanding cuts to fuel taxes. Many of the most exciting campaigns against cuts have come from people who cut their teeth in the climate movement. What we really need is mass investment building a green economy which doesn’t rely on fluctuating, climate changing oil. But it’s hard to express nuance when people are shouting at each other.
On the other hand, oil prices going up will put the need for green investment back on the map. The first exciting idea of the credit crunch was the Green New Deal. This has been buried a little of late, but it may well find a second lease of life – and we should be trying to ensure that it does.
People say that oil is the fuel of our economy. But there’s one thing without which we should have no economy at all: food. Food is widely expected to get more expensive in 2011. Over the last year, climate change has begun to delivered more regular extreme weather patterns – from fires and floods in Australia to storms in Canada – and most significantly, drought and fire in Russia. This has already pushed prices up of late. But add to this rising costs of some of the raw materials needed in farming, and increased demand in many developing countries (particularly for grain intensive meat), and things are looking pretty hairy for the year ahead. Worse still, there is a significant risk that bankers’ speculation on these increases will push them still higher. When this happened 2 years ago, there were food riots around the world. Will 2011 see a cross border battle against those who price food off our tables? Does the power of social media solidarity reach that far? Let’s hope so.
The Government continues to be obsessed with prioritising stable inflation over stable jobs. With all these prices going up, (as Paul Mason points out) it’s looking more and more like we won’t see quantitative easing to replace the money that the cuts are taking out of the system. For a neo-liberal government, QE (printing money and giving it to banks) is the preferred way to stimulate the economy. But it does deliver some inflation, and if you already have prices rising because of real things happening, and if you are obsessed with stable low inflation, then this isn’t acceptable.
Without QE2, it seems that it will be harder for the government to re-inflate the finance sector bubble. And if they can’t squeeze a few more years out of that re-inflated balloon, then their economic and so electoral strategy lies in tatters. Mason even thinks that they will increase interest rates to control inflation – which will further sucking demand out of the economy.
Another kick to the government’s economic strategy is the looming Euro crisis. Because a collapse in the eurozone means that export led growth will be near impossible. You can’t begger-your-neighbours if they are begging for help.
This mixture of prices shooting up, money coming out of the economy, and exports stuttering seems to imply an even bigger kick to the jobs market. And so, in May, we will need to be ready to respond as another generation graduates from schools and universities, and into the bonfire of dreams that is mass unemployment.
And of course, all of this is on top of the devastating impact of George Osborne’s ruinous program of cuts and privitisation; and of the looming realisation that debt fueled consumerism will no longer cover up the failure to increase wages for 30 years. Communities up and down the country are already organising in their own ways. Inspired by their offspring fighting for Higher Education, many are remembering that the story we are told about Britain’s passive history is a lie. We are the country of the Jarrow March and the General Strike, Peterloo and the poll tax riots.
And as we face a bleak year ahead, it’s important to remember that this disaster is a choice that has been made. In the last year the 1000 members of the Sunday Times Rich List saw their collective wealth increase by more than £77bn. We have chosen to enrich the mega-wealthy while the majority are pushed onto the ever-more-expensive bread line. And this is a choice we can unmake. Because we are all in this together. And we can’t let people forget that.