“The City of London’s most vocal ‘bear’ has warned that the world is heading for a financial crisis as severe as the crash of 2008-09 that could prompt the collapse of the eurozone.
Albert Edwards, strategist at the bank Société Générale, said the west was about to be hit by a wave of deflation from emerging market economies and that central banks were unaware of the disaster about to hit them. His comments came as analysts at Royal Bank of Scotland urged investors to “sell everything” ahead of an imminent stock market crash”.
Of course we should take such predictions with a pinch of salt. Even though the financial crisis of 2008 was very serious indeed, there was also an element of exaggeration in the propaganda of the ruling class at the time. The collapse of Lehman Brothers, which acted as a kind of trigger for the crisis, was to some extent allowed to happen by the US government as an example to others, and the message of “we’re on the brink” certainly helped to ram home austerity measures as the “only alternative”. We shouldn’t underestimate the capacity of the bourgeoisie, with the whole apparatus of the state and the financial system at its disposal, to use all kinds of tricks and manipulations to prevent the economic crisis running out of control – that’s an unforgettable lesson it learned from the great crash of 1929.
But none of this means that the economic crisis is something superficial, just part of the regular business cycle with its ups and its downs. The current economic difficulties have very deep roots indeed – going back at least a hundred years, and ultimately reaching the very basis of capitalist production, the wage labour system and the contradictions that are inherent in capitalist accumulation. We may not be in a “final” economic crisis right now, but in a more long term sense we are at the final stage of capitalism’s obsolescence as a social system.
The real problems facing the system can be gauged by the fact that the current stock market jitters were to a considerable extent provoked by the slowdown of the Chinese economy, which has played such a key role as a market and a target for investment for “developed” and “developing” countries alike. For years now, western economies have been displacing production and capital to fuel the Chinese “miracle”, which could then send out a stream of cheap commodities back to the west. The result? China’s economy has been “overheating”, or to use marxist terms, it is facing the same crisis of overproduction, the same falling profit rates that have plagued the central countries throughout this century, and in particular since the end of the post-war boom in the 1960s.
All units of capital, whether individual companies or major national economies, are driven to accumulate, to expand, or risk annihilation by rival companies and national economies. But the more they produce, the more they tend to outstrip the available market, which is ultimately limited by the restricted buying power of the masses; the more they invest in new technologies to boost production, the less living labour – the only source of surplus value – is incorporated into what they produce.
The penetration into new areas of the globe, the integration of previous forms of production into the orbit of capitalism, has long provided a lifeline to capitalism, a means of postponing its in-built tendency towards breakdown. The Chinese economy, for example, though already capitalist under Mao, had at its disposal a vast mass of peasant labour available to be transformed into wage labour, considerably reducing the costs of labour power on a global scale. This process now is reaching its limits and China’s slowdown - along with that of other BRICS like Brazil and Russia – is indeed a sign that the temporary solutions found by capitalism over the past few decades are also reaching their limits. Seen from a historical standpoint, the world capitalist economy has indeed reached an impasse.
The ecological cost of growth
The mounting panic in the stock markets at the prospect that China and other BRICS – not to mention the economy in the US and Europe – are heading for another recession, highlights another irresolvable contradiction of capitalist production. A few weeks ago, at the environmental summit in Paris, much play was made of the fact that an agreement had been reached to place a limit on carbon emissions over the next few decades. The threat of global warming running amok was thus, we were told, averted by the wise counsels that have prevailed among the world leaders. And indeed, in the extremities of the crisis, the bourgeoisie does become intelligent. In the wake of 1929 it was able to push aside the objections to state intervention coming from its more backward-looking factions, and to hold back the unfolding economic disaster through the application of state capitalist remedies. Today, in the face of mounting evidence that man-made global warming is not only real but is already becoming a major “cost of production” (as in the case of the floods in the UK, the droughts in the US and Australia, etc), the ruling class now has much less time for those die-hards (many of them financed by the big energy concerns who have most to lose through pollution controls) who insist that global warming is a hoax or has purely natural causes. The wise leaders have understood that something needs to be done.
But the bourgeoisie is caught in a cleft stick. It is seeing the ecological impact of its need to accumulate, to grow without limit. And at the same time it panics when economic growth stutters or goes into reverse. In this sense the die-hards are right: if you restrict “our” national production for the sake of the environment, other national economies will profit. So the measures it adopted at the Paris summit to reduce the impact of accumulation are extremely feeble – no more than a vague promise to curb pollution and cut emissions, without any legal sanctions. If the planet is a forest reserve, it has been entrusted to unscrupulous loggers, for whom the trees are not a source of oxygen, a “sink” for carbon dioxide, or a barrier to floodwaters in the hills, and certainly not a factor of human well-being or an inspiration for artists. They are a valuable commodity, most valuable when they are converted into timber.
Capitalism and war
On these counts alone – the management of the production of life’s necessities, and the protection of the natural environment on which all this depends – the ruling bourgeoisie has proved that it is no longer fit to rule. But the final proof of its incapacity to provide humanity with a future lies in the omnipresence of war.
War has always been part of capitalism. In the days of its ascent, wars, however brutal, were part of its expansion across the world and its replacement of outmoded forms of society. But once the world had, to all intents and purposes, been conquered by capitalism, war increasingly became an end in itself, and even when it brought temporary triumph for the victors, the overall balance sheet for humanity has been negative: the destruction of decades of human labour, the exacerbation of hatred and division, the prospect of new and even more destructive wars. The great rash of wars now spreading from Africa to central Asia, with their focal point in Syria, Iraq and Afghanistan, which has engendered the desperate flight of millions of human beings to the “haven” of western Europe, is a sign – like the two world wars and the nuclear arms race which marked the 20th century – that capitalism’s drive to accumulate, when it comes up against insuperable barriers, turns into a drive towards self-destruction.
The necessity of communism
The longer capitalism continues, the more it undermines the possibility of replacing it with a human society – a society based on solidarity and cooperation. But at the same time, every aspect of its descent into barbarism adds further proof that such a society is both necessary and possible. If the capitalist economy is in crisis because it can’t sell all the commodities it produces, if it can’t generate enough profit from its production, then we need a society where people produce not for the market and not for profit, but for need. If national economies are driven to plunder nature in order to outdo their rivals, or if the same nation states can only advance their interests through war and destruction, we need to replace competing national states with a unified world community. In short, we need communism.
For us, communism and socialism are the same thing, and they are international or they are nothing. But if the word “communism” has fallen into disrepute because it has been so horribly besmirched by the nightmare of Stalinism, there are any number of politicians selling a new brand of “socialism” and claiming that they are carrying on the great traditions of the workers’ movement of the past. In Britain there’s Corbyn and the Labour left, in Greece Syriza, in Spain Podemos. But none of these “socialisms” ever put into question the need to defend the national economy, not one of them advocates the abolition of the capitalist wage relation and production for the market. All of them offer an updated version of the same state capitalism which has for decades now been the last rampart of the bourgeois mode of production.
These politicians and parties claim that the new society can come about through the existing institutions – through parliament and elections, through strengthening the trade unions and other official bodies. And what they call socialism can indeed be introduced from above, through organs which are an integral part of the present-day state. But genuine communism is, as Marx put it, “the real movement that abolishes the present state of affairs”. It can only come from below, from the unification of the exploited and the oppressed in defence of their own needs, from the bursting asunder all the state bodies which have been maintained to keep them passive and disunited. In short, if we are to have communism, we must have a revolution, the deepest, most far-reaching revolution in the history of humanity.