Capitalism may be unwell but it is not dead.

News of the death of capitalism is premature. The patient is sick, but she is not dead.

How sick? Here in Australia unemployment is 4.5 per cent. It will increase, but by how much? A lot, I would suggest. It is a slow train coming, but it is coming.

The pattern around the world appears to be that estimates about the impact of the crisis of profitability worsen almost weekly. For example the latest predictions for US unemployment suggest it could hit 9 per cent next year. Only a month ago it was 6.7 per cent.

Couple that with deflation and we may be seeing a profound crisis of capitalism, something akin to the Depression in its impact. However we need to be careful in saying that. During the Depression unemployment (depending on which country we are talking about) was in the 30 per cent range. We are a long way from that, at the moment.

If it is a slow train coming, it might be our place of reference that means we can’t see how fast the wreck is approaching.

Even if the system is very sick or about to be come very sick doesn’t mean it is dead. As Lenin said, capitalism can survive any crisis if workers are prepared to bear whatever burden the bosses impose on them.

Before discussing Australia and its working class, let me stereotype US industrial relations to fit in with Lenin’s comment. Now I have little knowledge of the US but suspect workers there are even less prepared than in Australia to resist job losses and wage cuts. Indeed the US economic crisis appears to be on speed. Hence Obama, almost every week, increases the economic stimulus package.

In Australia the position is contradictory, at least in relation to wages.

As I have written elsewhere the whole history of the working class in Australia over the last 25 years (especially the leadership) has been one of class collaboration. Independent rank and file organisation no longer exists.

The political leadership of the labour movement is even more conservative than the trade union leadership. Could you seriously imagine Kevin Rudd supporting workers on a picket line in defence of jobs or urging them to occupy the factory?

The Australian working class is totally unprepared industrially and politically to resist unemployment and wages cuts. Yet the paradox is, having said that, recent wage negotiations (for example in the building industry, with teachers in Western Australia and apparently even at Qantas) have produced what appear to be real wage increases. Now some of the unions involved are more militant than most and negotiations began some time before the crisis of profitability manifested itself, but nevertheless the results are not a disaster.

The real question is what will happen from now on, and in other industries. The public service at state and federal levels looks vulnerable, especially given the weakness of many of their unions. Teachers and nurses are a different question and there could be real outbreaks of action there.