Capitalism was bailed out at a global cost of some $20tn. But this didn't resolve the crisis - it shifted it from the private sector to the public sector, saving the investment banks from outright collapse at the expense of the public treasury, leading the sovereign debt crises we've seen. Now, having rallied behind bail-outs, global ruling classes are increasingly shifting behind austerity and structural adjustment after the fashion of that imposed on the 'global south' in recent decades. But that in turn will merely shift the crisis on to a new plane, because the private sector is not well-placed to make up for the sudden contraction in demand that is being imposed. There's nowhere to pick up the slack.

Look at the US. Money supply is plummeting, which means the rate of investments and transactions is collapsing. Companies aren't borrowing, consumers aren't borrowing, which means they aren't spending. Structural unemployment remains extremely high. Emergency legislation is being introduced to prevent nearly two million Americans from suddenly losing their unemployment insurance in the next week - though the extension is only until 30th November. If unemployment figures continue to be poor, some investors now say they are worried that the US will face a second recession. The fantasy of renewed growth led by auto sales, always groundless, has just been dealt another blow as sales fall. Now consider China. Having invested in a proportionally much larger stimulus than the US, its sluggish performance is sending Asian stock markets reeling. The strike wave that I described continues to roll on, which means that capital may find its ability to transfer the costs of the crisis to the Chinese working class limited.

Elsewhere in south-east Asia, which was a key driver of global growth in the 1980s and 1990s, Japan is still in the doldrums, as demand for its exports continues to fall, unemployment rises once more and output falls. It has stuck in a cycle of deep crises since the early 1990s. Europe is in no state to lead the recovery since significant sectors of it are in deep recession (the PIGS countries), and those states now imposing structural adjustment may soon join them. The UK is headed for a period of extremely weak demand. Even on the previous government's advertised cuts, the IFS estimated that the average family would be £2840 worse off per year by 2017 as a result of fiscal contraction. Recent studies show that the Cameron cuts will reduce household income across the board, by as much as 8% in the poorest decile. So where is all the demand going to come from to support any recovery? Paul Krugman thinks that the most likely prospect now is a prolonged, 'third depression'.

The world's very jittery financial capitalists are reflecting this dilemma. The cuts are supposedly being introduced to appease "the markets" (a global demigod about whom it is best to speak only in hushed, respectful tones) but said markets don't appear to respond uniformly well to austerity. Hence, they have shown a tendency 'reward' countries that impose harsh cuts, but then 'punish' those that appear to them to risk recession or political unrest in doing so. This is interesting for a number of reasons. It suggests that the ruling class is far more fractious and uncertain than it would like us to think. They desperately want to make the working class pay for this crisis, but are deeply worried about the effect this may have on growth and future opportunities for profitable investment. It also suggests that the best response to bullying from finance capital and the ratings agencies is to create such tremendous political pressure that there is too much risk for them in political unrest to embark on spending cuts.

Strike waves are already sweeping Europe. France has seen repeated general strikes, with resistance initially stoked by the tremendous uprising in Guadeloupe. Greece has been in upheaval since the earliest days of the crisis, and has ground to a halt again today. Icelanders overthrew their government and voted in a radical new administration. Italy, despite labouring under a horrifically reactionary government with mafia-led racist pogroms, a depleted left and a rising far right, is undergoing a succession of general strikes against austerity. Ireland has seen huge strikes, and occupations. Even the UK, though its labour movement has been very conservative in response to the recession and job losses thus far, has seen some impressive examples of militancy with significant local successes. But it's just not enough, nowhere near equal to the scale of the ruling class attack.

Going on the evidence of what has happened in the UK, for example with the terrible handling of the Bassa dispute by the Unite leadership, I would infer that the problem is partly that the even the most combative unions have not been able to adapt to what is a qualitatively new situation. Their organisational inertia and their relative ideological conservatism has produced an at best hesitant, faltering response. Union leaders that have come out of decades of defeat and falling union density want to be acquiescent in practise, even if they feel compelled to sound belligerent. They want to behave as if something like capitalism-as-usual will be restored soon, even if they know that it can't be. Or perhaps they believe that a re-elected Labour government will ultimately 'see sense' and 'do the right thing'. The truly epochal nature of this crisis needs to be registered before a proportionate response can be mustered, and I have the sinking feeling that as far as the labour movement is concerned, the last people to get it will be the union bureaucracy.