In the first part of this article (see WR 315 and the ICC website ), we tried to understand what the current economic crisis represents. We saw that it was only a particularly serious episode in the long agony of decadent capitalism. We showed that, in order to survive, capitalism has had to resort to a kind of drug: debt to capitalism is what heroin is to an addict. The drug of debt has made sure that capitalism has managed to stay standing, albeit leaning on the arm of the state, whether ‘neo-liberal' or ‘socialist'. The drug gives it moments of euphoria where it feels that it is living in the best of all possible worlds, but more and more frequently it is plunged into periods of convulsion and crisis, such as the one we entered in August 2007. As the dose increases, the drug has less and less effect on the addict. He needs a bigger and bigger dose to achieve a high that gets weaker and weaker. This is what has happened to capitalism today! But two questions remain: how, concretely, has debt supported the economy for 40 years while at the same time preparing the ground for new and more violent crises? And, above all, is there a way out of the crisis?
In the 1970s, debt ravaged the countries of the ‘third world' which had been lent masses of money in order to become outlets for the commodities of the main industrialised countries. The dream didn't last long: in 1982, Mexico, then Argentina, for example, were on the verge of bankruptcy. A route had been closed for capitalism. What was to be the new way forward? The US plunged itself into debt! From 1985, having been the world's creditor, the USA bit by bit became the most indebted country in the world. With such a manoeuvre, capitalism assured its survival, but in doing so it undermined the economic bases of the world's leading power. This strategy was shown to be untenable by the convulsions of 1987 and 1991. Since then, the world economy has geared itself towards what has been called ‘relocation' or ‘globalisation': to relieve the high production costs which were smothering the main economies, entire swathes of production were displaced towards the famous Asian ‘Tigers' and ‘Dragons'. But once again the powerful shocks of 1997-8, the famous ‘Asian crisis', resulted in the collapse of all the economies which were being presented as proof of capitalist prosperity. Only China succeeded in staying afloat thanks in large part to the miserable wages paid to its workers. China has now become a direct competitor with the main capitalist countries. The dizzying rise of China gives the appearance of ‘resolving' one of the main contradictions of the world economy - the weight of unsustainable production costs - but in doing so it took competition onto even more unbearable levels.
In the last few years, capitalism has managed to give itself a semblance of ‘prosperity' thanks to the vast property speculation in the USA, Britain, Spain and about 40 other countries. The ‘brick' boom is a crying expression of the aberrant level that this system has reached. The aim of building all these houses was not to give shelter to people - the number of homeless has gone up and up of late, especially in the US! The aim was nothing more than speculation on property. In Dubai, the desert has been sown with skyscrapers with no other purpose than to satisfy the thirst of international investors, greedy for profits made by buying housing and selling them three months later. In Spain, the coastal regions which were not yet overcrowded have been covered with holiday home developments, skyscrapers and golf courses. All this to fill the pockets of a minority, while the majority of these buildings remained conspicuously empty. One of the consequences of this speculative madness is that housing has become inaccessible to the majority of working class families. Millions of people have had to take out loans that can go on for 50 years, or sink huge amounts of money into the bottomless pit of rent. Hundreds of thousands of young couples are forced to live in sublet slums or crammed together with their parents. Today the bubble has burst and a fragile economy, where everything was held together with the sticking plaster of speculation, of accounting frauds and payments adjourned into some promised future, is experiencing the most violent convulsions.
Capitalism's only response: push the effects of its crisis onto the working class
Ten years ago, an article entitled ‘Thirty years of the open crisis of capitalism' (see ICC online) drew up a balance sheet of this continuous plunge into debt:
"This intervention by the state to go with the crisis, adapting to it in order to slow it down and if possible delay its effects, has allowed the big industrialised powers to avoid a brutal collapse, a general debacle of the economic apparatus. It is has not however been a solution to the crisis nor has it been able to overcome its most acute effects, such as unemployment and inflation. Thirty years of this policy of palliatives has only allowed a kind of accompanied descent towards the bottom of the abyss, a planned fall whose only real result is to prolong the domination of this system with its procession of suffering, uncertainty an despair for the working class and the immense majority of the world population. For its part, the working class of the big industrial centres has been subjected to a systematic policy of continuing and gradual attacks on its buying power, its living conditions, its jobs, its very survival. As for the great majority of the world population, those who eke out a miserable living on the vast periphery around the vital centres of capitalism, it is subjected to barbarism, famine and death on such a level that we can talk about the greatest genocide that humanity has ever known".
And the balance sheet of these past 40 years is indeed horrifying. In the 1960s, the majority of workers, even those in the less rich countries, had a more or less secure job; today the dominant tendency everywhere is towards job insecurity. For more than 20 years, the real wages in the richest countries have fallen continuously. And in the poorest countries, the average wage remains extremely low, even for the majority of the workers who are the ‘beneficiaries' of the ‘Chinese miracle'. Unemployment has become chronic. The best that states can do is to make it less socially visible. The bourgeoisie has succeeded in getting the unemployed to feel their situation as a shameful one: in the official discourse, the unemployed are idle losers, incapable of taking advantage of the wonderful possibilities of employment supposedly being offered to them. And what about retirement pensions? The older generation still at work (50-60 year olds) is seeing its future pensions melting away like snow in the sun. Their pensions will be much reduced in comparison to their parents' and many of them understand that they will have to continue with casual work or odd jobs after they are 60 or 65 if they are going to manage. And it's guaranteed that young people today won't even get a pension.
If humanity is to live, capitalism must die
These catastrophic perspectives have been with us for 40 years. But capitalism has an extraordinary capacity to sow illusions and to make people believe that the famous cycle of ‘boom and bust' is an eternal one. But today the ability of the capitalist state to ‘go with' the crisis through all sorts of palliatives is being seriously weakened. The new downward plunge we are seeing today will be even more abrupt and brutal than the previous ones. The attack against the proletariat and humanity as a whole will be even crueller and more destructive: a proliferation of imperialist wars, attacks on wages, increasing job-insecurity and unemployment, the intensification of poverty. In all countries, the governments are appealing for calm and claim that they have the answers, that they can get the economic machine moving again. And everywhere, the opposition parties play their own role in this deception, attributing the disaster to the poor management of the party in power and promising a ‘new kind of politics'.
Let's not be taken in! The experience of the last few months is highly instructive: the governments of the world, of all types and colours, armed with their legions of financial gurus and experts, have tried all kinds of potions to ‘get out of the crisis'. We can say without hesitation that they are all doomed to fail. The proletariat, the workers of the entire world, cannot have any confidence in them. We can only have confidence in our own strength! We have to develop our experience of struggle, of solidarity, of debate, acquiring the consciousness and will needed to destroy capitalism, which has become an obstacle to the survival of humanity. The slogan of the Communist International in 1919 is more relevant than ever today: "if humanity is to live, capitalism must die!"
Translated from Accion Proletaria, the ICC paper in Spain, 23/1/08