National Sections of the L5I:

Fight inflation and deflation

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Inflation and deflation are both weapons of the capitalists to solve the crisis of their system at the expense of the working class. They hope to break the collective resistance of the workers by condemning them to a miserable individual daily battle for food. Against both inflation and deflation we say – “Make the rich pay”!

Under conditions where rising prices slash workers’ wages, like in Argentina in 2002, we must fight for a sliding scale of wages. This must guarantee a wage rise to match any rise in the cost of living of workers and their families. To make this effective we should build organisations to monitor prices. Delegates should be elected in the workplaces, in the barrios, from organisations of working class women and consumers who together can create a working class and poor people’s cost of living index. Pensions must be indexed against inflation and be guaranteed by the state, not left to the mercy of the stock markets.

In conditions of hyper-inflation and mass unemployment, these organisations can promote the struggle to take over supermarkets and wholesale warehouses to save the poor and the unemployed from starvation. In the longer term, however, securing complete control over the necessities of life means establishing workers’ control over the food industry, the large farms, food processing plants, transport and the supermarket chains. In many countries, it will also mean establishing direct commercial links between the workers and peasants over the exchange of goods. It entails the building of workers’ and peasants’ committees to control food pricing and distribution.

Deflation – falling prices – is an increasing affliction of the developed world as financial and asset bubbles burst. Workers are affected as the burden of their debts increases and the value of their future pensions is written down by crisis-stricken assurance companies. The state must take over all private pension funds, protect the value of pensions and put them under the control of the trade unions. Household debts of workers should be cancelled and credit provision companies nationalised.

To tackle inflation and deflation, we must seize control of the money supply – the central banks and main financial conglomerates, and force their complete nationalisation. We can then prevent the transfer of capital abroad when the rich seek to escape the consequences of their ruinous policies.