The Economic Crisis: The Only Response is the Class Struggle

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All across the media, the economic experts are still debating whether the American economy is in a recession or a depression. This is hardly relevant for the working class, which is bearing the impact of the crisis. The ugly consequences of the ongoing economic collapse are there for all to see.

Massive unemployment

Since the start of this recession a staggering number of workers have lost their jobs and, in many cases, workers have actually lost all means of subsistence. According to the official Labor Department records,  the number of unemployed rose by 851,000 in February to a total of 12.5 million workers and the unemployment rate increased to 8.1 percent of the work force.   In the last 12 months alone, the number of unemployed workers has increased by nearly 5 million, and the unemployment rate has risen by 3.3 percentage points. And as bad as they sound, these figures give a very imperfect picture of the true world of the unemployed in the U.S..

The official government method for  calculating unemployment historically tend to understate the number of workers out of work. For instance, for the government statisticians, a person is only unemployed if he doesn't have a job, has looked actively for one in the last four weeks and is available to work. This definition does not count workers who have given up looking for jobs that don't exist. The government officially considers that the 731,000 "discouraged workers" they identified in February 2009 have dropped out of or have withdrawn from the work force, i.e., that they are no longer workers!  In addition, the official statistics tend to inflate the number of workers who are considered to be "employed" by including in this category those workers who involuntarily work part time simply because there are no full time jobs available. According to the Labor Department data the number of involuntary part time workers rose by 3.7 million over the past 12 months to a total of  10 million.  In February alone, the number of involuntary par time workers rose   787, 000.  In other words, if the official unemployment figures were adjusted to reflect both the "discouraged" workers and the involuntary part-timers a more realistic picture of 24 million workers or 15.6 percent of the work force are affected by unemployment!

Furthermore there is no  real safety net for  unemployed workers.  The so-called government Unemployment insurance program is a joke that that can't even cover the minimal needs of food and shelter for unemployed workers and there families. Unemployed workers are often obliged to take on onerous credit card debt to make ends meet, digging themselves into a deeper and deeper hole from which there is no easy way to climb out. Being unemployed does not guarantee a government handout. In fact the unemployment insurance program is designed to disqualify a majority of the unemployed from getting any benefits.  According to figures cited by organizations that study the government Unemployment insurance, only  40 percent of the unemployed workers over the past 12 months in the US have qualified to collect insurance payments, leaving the rest in danger of falling into total destitution. There is a direct link between the massive surge of unemployment in the last year and the rise of homelessness and  soup kitchens in many major American cities. The "tent cities" in California that recently caught the attention of the media are surely just the tip of the iceberg.

And if you are among those that still have a job, you are in constant fear that you may become a casualty in the next round of "readjustments." Meanwhile you are being asked to give up wage increases and accept cuts in current salaries and benefits and  quietly accept  increasing workloads and widespread management abuses. Pensions, medical benefits, vacations, holidays, salaries, working conditions, everything is under the ax. 

We are all under attack

The dominant class is always trying to divide us, senior workers against recent hired ones, the old generation against the young one, immigrant workers against native born workers, black against white workers. One thing that this crisis is making clear is that nobody is safe -everyone is under attack. Young people are finding it increasingly difficult to integrate into a work force saturated with an abundance of older and experienced workers recently laid off. Young workers are today even competing for scarce jobs with the rising wave of retirees who, finding themselves unable to live on their current meager pensions, are coming back to the work force, forced to give some more blood and sweat to capitalism.

During the present economic collapse even the popular myth about the "wealthy" baby boomers  on the verge of retirement is now clearly more and more just a fiction with no bearing on reality.  In fact many workers' retirement pension funds have been wiped out and dreams of retirement from capitalist exploitation have been put on hold or abandoned. 

And there is no end in sight. Left to its own devices the capitalist crisis will only worsen and its weight will be borne by the whole of the working class.

What is the way out:  state capitalism, populist rage or class struggle?

At the end of March the government announced with much fanfare its latest attempt to revive the financial system:  a gargantuan 1 trillion dollar infusion of capital to the banks in exchange for the so-called "toxic assets" now in possession of a large number of financial institutions. This money comes on top of Obama's $800 billion  "economic stimulus," approved  at the end of January, which itself came on top of the $800 billion of the TARP program enacted in the last days of the Bush administration, which came on top of still other  previous ‘bail out' programs.  By any stretch of rationality the dollar numbers quoted by the government have become irrelevant. The state has pumped into the economy such an enormous amount of paper money that one more trillion here or there seems  meaningless.

The hard reality from which the dominant class can't escape is that all its state capitalist policies have so far failed to stop the unfolding capitalist catastrophe.  And the only ‘solution' that the ‘bright' men of the ruling class can propose is still more state capitalism.  Yet no amount of state intervention seems to be able to untie capitalism crisis' Gordian knot: production has ground to a halt because there are too many means of subsistence and production relative to the solvent capacities of society. Historically capitalism overcame this periodical tendency to overproduction essentially by the discovery of new markets and thus the extension of capitalist relations of production the world over. This way out of its economic crisis  for capitalism has been essentially closed for most of last century with the creation of the world market and the expansion of capitalism around the globe.  The dominant class has responded to this historical impasse of its system with state capitalism measures directed essentially at managing a permanent state of economic crisis, keeping the economy afloat through ever worsening cycles of booms and busts. The significance of the current economic collapse sweeping  the globe is that it is showing an unyielding resistance to all the drugs in possession of the doctors of the capitalist economy. After years of overuse these drugs -basically monetary and fiscal expansionist policies aimed at creating an artificial solvent demand - are now also part of the problem contributing to what is clearly becoming the worse crisis in capitalism history.

For revolutionaries there is only one solution to the crisis and that is sending capitalism once and of all to dustbin of history. This is the historical task of the world working class.  But this will not happen automatically. A social revolution that will leave behind the ‘prehistory' of humanity by overcoming the exploitation of man by man, the divisions of society into classes, the existence of nations.... can only be the product of a conscious and collectively organized effort of the world proletariat. Of course this revolution will not fall out of the sky; it can't only be the result of a prolonged class struggle of which today we are only seeing the beginnings around the world. Faced with relentless attacks workers need to respond by refusing to submit to the logic of capitalism and developing the class struggle to its ultimate conclusion: the overthrow of capitalism.  The task is immense, but there is no other way out.

Eduardo Smith. 03/30/2009

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