Capitalism drags the world down

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Wars on every continent, poverty and hunger everywhere, disasters of every description – the world is in a catastrophic state.

"A year after the Kosovo war began, vengeance killings, increasing crime, political infighting, intimidation, and corruption in that territory make an unpleasant picture (...). Kosovo is a mess" (The Guardian, 17/03/00). The hatred and warfare in the Balkans has got worse since the war and NATO occupation in Kosovo. NATO occupation in Kosovo. The war in Chechnya continues to cause thousands of casualties, most of them civilians, while hundreds of thousands of refugees starve in the camps. As in Kosovo, as in Bosnia before it, awful atrocities are committed. The capital Grozny has been obliterated. American generals boast that NATO bombing has put Serbia back 50 years. The Russian generals have achieved a still better performance in Chechnya: "This small Caucasian republic has been set back a century, as far as development is concerned" (Le Monde Diplomatique, February 2000). The fighting that has devastated the country is still going on, and will continue for a long time.

Hot spots of military tension are proliferating. They are particularly dangerous and numerous in South-East Asia. "In no other region do so many critical issues converge so dramatically" (Bill Clinton, cited in the International Herald Tribune, 20/03/00).

Poverty and hunger throughout the world

"Half of all the people in the world are poor" (International Herald Tribune, 17/03/00). All the talk about prosperity is given the lie by the terriblthe lie by the terrible situation of billions of men, women, and children. "The world’s production of basic foodstuffs covers 110% of human needs, and yet 30 million people continue to die of hunger every year, and more than 800 million are undernourished" (Le Monde Diplomatique, December 1999).

The situation in the peripheral countries, once called the "Third World", now described as "emerging", or "developing" is one of absolute pauperisation. "The number of hungry people remains high in a world of food surpluses. In the developing world, there are 150 million underweight children, nearly one in three" (International Herald Tribune, 9/3/00).

Today, we are told over and over that the Asian crisis of 1997 has passed, that the "Asian tigers" are back, that the recession has been much weaker than expected in Latin America, and that growth rates are positive again. And yet, "2.2 billion people [live] on less than $2 per day in Asia and Latin America" (International Herald Tribune, 14/07/00, quoting James D. Wolfensohn, President of the World Bank). With inflation under control, the rise in produtrol, the rise in production in Russia is "a minor miracle, if we just consider the macro-economic indicators" (Le Monde, 24/03/00). As in the countries of Asia and Latin America, this improvement in the "economic fundamentals" has been achieved at the expense of the population, and at a cost of growing poverty. Russia "remains a country in virtual bankruptcy, undermined by a foreign debt of $170 billion dollars (…) Living standards have fallen since 1990, and average monthly income is now equivalent to $60 per month, the average wage is $63 per month, and the pension $18. In August 1998, at the moment of the crash, 48% of the population lived below the poverty line (fixed at about $50); by the end of the year this had risen to 54%, and today it stands at almost 60%" (Le Monde, economic supplement, 14/03/00).

Poverty in the industrialised countries

The idea that the industrialised countries are an oasis of prosperity no longer stands up to even the most superficial examination, still less to the actual experience of hundreds of millions of men and women, mostly workers whether employed or unemployed. As we pointed out in our previous issue, 18% of the US population – at lepulation – at least 36 million people – lives below the poverty line. There are 8 million in the same situation in Britain, 6 million in France. Unemployment has fallen, but only at the cost of an increasing flexibility and precariousness of labour, and a drastic drop in wages. Along with Britain and the USA, Holland is often cited as an example of economic success. Le Monde poses the question: how can we explain the fall in Dutch rates of unemployment from 10% in 1983 to less than 3% in 1999? "Several themes have already been considered: (…) The development of part-time work [which accounted in 1997 for] 38.4% of total employment, and extensive retirement from economic activity (very particular to Holland), by people considered invalids (almost 11% of the working population in 1997). [Finally], the wage restraint negotiated during the 1980s could be the cause of the marked fall in unemployment" (Le Monde, economic supplement, 14/03/00). The mystery is solved: in one of the world’s most developed countries, 1 out of 10 adults is an invalid! It’s hardly a laughing matter. The secret of the Dutch success is insecure, part-time jobs, and fraudulent figures for the economy and health, along with a drastic drop in wages. That is the recipe, and the same one is being applied everywhere.

And these data are only a part of the social and economic reality in the industrialised countries: we should not forget the enormous public and private debt in the US, the growing trade deficit, and the huge speculative bubble hanging over Wall Street, and all the world’s stock exchanges with it. America’s uninterrupted period of growth during the 1990s, whose benefits we are told so much about, is being financed by the rest of the world, massive debt, and the ferocious exploitation of the working class. Japan, the world’s second industrialised power, is still suffering an apparently endless officially recognised recession, despite a gigantic state debt which had risen "to $3.3 trillion at the end of 1999, making it the biggest in the world (…) Japan has overtaken the US as the world’s most indebted country" (Le Monde, 4/03/00).

The reality of the world economy is a long way from the idyllic picture we are presented with.

Deadly disasters and the destruction of the planet

Ecological and "natural" disasters are proliferating. The are proliferating. The lethal flooding in Venezuela and Mozambique comes after that in China, and has left thousands of dead and missing, hundreds of thousands of hungry homeless. At the same time, a less spectacular drought is ravaging Africa, even in countries which on other occasions have been hit by flooding. The thousands buried alive in the ruins of their shanty-towns, built on the slopes of the mountains surrounding Caracas, are not the victims of a natural disaster, but of the anarchy and the living conditions imposed on them by capitalism. Nor are the rich countries spared by disaster, even if the results are less dramatic in the immediate. Accidents in nuclear power stations are becoming more and more frequent, as is oil pollution caused by shipwrecks among the world’s ageing fleet of tankers, rail and air accidents. The pollution of the Danube by a massive discharge of mercury from a Romanian gold mine is another example. Water itself is increasingly polluted and rare: "About one billion people have no access to safe, clean water, mainly because they are poor" (International Herald Tribune, 17/3/00). In town and countryside, the air is poisoned. There is a widespread re-emergence of diseases that had once disappeared: "This year, 3 million people will die of tuberculosis, and 8 million people will develop the diseasel develop the disease, almost all in poor countries (...). Tuberculosis is not just a medical crisis. It is a political and social problem that could have incalculable consequences for generations to come" (Médecins sans Frontières, quoted in International Herald Tribune, 24/03/00).

The destruction of the social fabric, and its consequences

The deterioration of living conditions, on both the general and the economic level, is accompanied by an explosion of corruption, Mafia activity, and extreme delinquency. Whole countries are rotten with drug-addiction, gangsterism, and prostitution. The Yeltsin family’s embezzlement of billions of dollars of IMF funds allotted to Russia is only a caricature of the universal corruption developing throughout the world.

Millions of children are living in a terrible hell: "The list of activities where children are transformed into commodities is a long one (…) Children are not only sold on the international adoption market, far from it. They are used much more for their labour power (…) The sex industry – the prostitution of both adults and children – has become so l – has become so lucrative that it now represents almost 15% of certain Asian countries’ GDP (Thailand, Philippines, Malaysia). Throughout the world, the victims are not only increasingly young, but also increasingly helpless, especially when they fall ill, and are thrown onto the street or sent back to their villages, where they are rejected by their families and abandoned by everybody" (Claire Brisset, Information Director for the French UNICEF committee, quoted in Le Monde, 21/03/00).

Equally horrible is the development of prostitution among young girls. One consequence of the war in Kosovo was to throw thousands of adolescents into the refugee camps. While the young men were enrolled in the UCK Mafia, drug trafficking and criminal gangs, the girls "were bought or kidnapped in the refugee camps to be sent either abroad or to the bars for soldiers in Pristina (…) Most of them suffered aggression, especially rape, before being forced into prostitution: at first (explained a French police officer), I didn’t believe in the existence of veritable concentration camps where girls are raped and prepared for prostitution" (Le Monde, 15/03/00).

At every level – wars, economic crisis, poverty, ecological and social disintegration – the situation is catastrophic.

Where is capitalism taking the world?

Is this a period of transition – a terrible one certainly – towards a better world of peace and prosperity? Or is it an inexorable descent into hell? Is this society going through torment in order to emerge into a period of extraordinary development thanks to the new technologies? Or are we faced with capitalism’s irreversible decomposition? What are the fundamental tendencies underlying every aspect of the capitalist world?

The destruction of the environment

Despite the speeches, despite the ecologists in government, capitalism’s destruction of the planet can only get worse. Whenever the scientists are allowed to carry out an objective study – and to publish the results – their predictions are dire.

In the words of a specialist in water use: "We are heading for disaster (…) The worst scenario would be to carry on as we are today; it would mean certain crisis (…) In 2025, the majority of the planet’s population will live in conditions of scarcity, or extreme scarcity, of water" (cited in Le Monde, 14/03/00). This scientist draws the conclusion that "A change in policy world-wide is vital".

There is no need here to mention, again, the hole in the ozone layer, or the global warming that is melting the ice-caps and causing the sea level to rise. Air in most of the world’s great cities has become unbreathable, and the associated diseases – asthma, chronic bronchitis, cancer, etc – are on the rise. Nor is it just the cities or industrial areas that are affected. A cloud of pollution produced by Chinese and Indian industry – a cloud the size of the United States – hung for weeks over the Indian Ocean. What is capitalism’s response? A proposal to stop, or at least to reduce pollution? Absolutely not! On the contrary, the answer is to appropriate the air, and sell it: "For the first time, the universal resource of air is going to become a commodity (…) The principle of a market in emission rights [ie in the right to pollute] is simple (…) A country which produces more CO2 than it is allowed can buy the right to pollute more fro pollute more from a state that produces less" (Le Monde, economic supplement, 21/03/00). Just as it does with water. As it does with children. As it does with the proletarians. Instead of stopping, or even slowing down, the destruction of the environment, capitalism – by transforming everything it touches into a commodity – is accelerating its destruction.

Worse poverty to come

Since the beginning of the century, despite all the enormous quantitative progress in the development of the productive forces, the living conditions of the whole world population, including the working class in the industrialised countries, have declined considerably, even without counting the sacrifices and misery of the two world wars. As the Communist International said in 1919, the period of capitalism’s decadence was opened (see the article in this issue on the legacy of the 20th Century).

The 1970s saw bankruptcy in Africa and rising debt in Latin America. The 1980s saw bankruptcy in Latin America and rising debt in Eastern Europe. The 1990s saw bankruptcy in Eastern Europe and rising debt, quickly followed by bankruptcy, in South East Asia. Whetheth East Asia. Whether in Africa, Latin America, Eastern Europe or Asia, the situation has deteriorated dramatically throughout the late 20th Century. At the beginning of the 1970s, the poor numbered 200 million (according to the World Bank definition, disposing of less than $1 per day). By the beginning of the 1990s, the number had risen to 2 billion.

When Stalinist state capitalism collapsed in the Eastern bloc, Western pseudo-prosperity was promised to all. "But instead of [the countries of the ex-Russian bloc] converging with the wage levels and living conditions of Western Europe, the region’s relative decline accelerated after 1989. Even in the most developed countries, GDP fell by 20%. Ten years after the transition began, only Poland has exceeded the GDP of 1989, while Hungary only began to reach that level at the end of the 1990s" (Le Monde Diplomatique, February 2000).

In Asia, where we are told that the crisis of summer 1997 is over, "many banks are still saddled with frightful debts, which despite the improving economic climate, have no chance of ever being repaid" (cited from the Economist in Courrier International). Certainly, the bour Certainly, the bourgeoisie has lately been expressing its delight at the Asian economies’ powers of recovery. "According to the vice-president of the World Bank for East Asia and the Pacific, the recovery of the region’s economies is ‘remarkable’". He goes on to say that "poverty is no longer rising, exchange rates are stable, there are substantial reserves, exports are rising, foreign investment is recovering and inflation is low" (Le Monde, 24/03/00). If "poverty is no longer rising", it is because the "good fundamentals" have already been achieved thanks to the destruction of whole sectors of the Asian economies and the massive pauperisation of the population. It is thanks to an increase in private and state debt that "there are substantial reserves", and a devalued currency encourages exports and investment. But even in the case of South Korea, the world’s 10th industrial power prior to the crisis of 1997, specialist opinion is divided, and there are many who refuse to get carried away by the demands of the propaganda machine.

"Hilton Root, an economist, former Wharton School professor and senior fellow at Milken, painted a worrisome picture of a Korean recovery more skin-deep than deeply rooted. South Korea's powerful chaebols - powerful conglomerates - are still digging out from mammoth debt, the country has too few families owning much too much wealth, and corruption continues to despoil the nation's political and legal system. Mr. Root doubts that the Korean recovery is sustainable even if Mr. Kim emerges stronger than ever. Yet many people worry that, without such a mandate, South Korea would quickly slip into reverse" (International Herald Tribune, 18/3/00). Our economist’s explanations are far from complete, but it is clear enough that the situation is far from being as bright as the bourgeoisie’s specialists would have us believe.

For the countries of the capitalist periphery, in other words for the great majority of the world’s population, the economic perspective is one of ruin, poverty, and hunger.

Towards rising unemployment and job insecurity in the rich countries

How can we say that capitalism is bankrupt in the face of today’s apparent economic growth? Are we blind? Won’t the "new economy" re-launch the machine and ensure a continuednd ensure a continued prosperity? Aren’t we heading for the "full employment" that the governments tell us about? Reality or illusion? A possibility or a lie?

The economic forecasts in the media are pure propaganda. Their purpose is to hide the general bankruptcy. The politicians, the specialists, the journalists, support their arguments with manipulated and deceptive figures. A return to "full employment" is supposed to be just on the horizon, thanks to the "new economy". How are they going to manage it? By job insecurity, forced part-time working and cheating: "As times change, so do landmarks. For years, it was agreed that full employment should be defined as a rate of unemployment no higher than 3%. Lately, the experts concluded that the same result would be reached with 6% of unemployed. Today, some are even raising the figure to 8.5%" (Le Monde, economic supplement, 21/03/00). This revision in the criteria demonstrates that there will be no return to "full employment" in the statistics, and shows just how much confidence they have in their forecasts. Unemployment and job insecurity will get worse, and weigh more heavily on the living and working conditions of the world working class.

The same is true of the figures for growth. It is normal enough for an eminent Japanese politician to refuse to admit that an open recession exists in his country: "even if the GDP has fallen for two quarters running, we do not think that the economy is in recession" (quoted in Le Monde, 14/03/00). And why should he not? Since the figures are massaged to appear in the most favourable light: "In the past, [a growth rate of 1-1.5% for the world economy] would have been considered as a recession. During the last three world ‘recessions’ – 1975, 1982, and 1991 – it is probable that world production never really fell" (The Economist, translated in Courrier International). In these conditions, we cannot take seriously the triumphant declarations on the return to growth in the industrialised countries.

In fact, one of the bourgeoisie’s main aims in the present situation is to hide from the world population – and especially from the working class in the industrialised countries – the economic bankruptcy of capitalism. One of the most crying expressions of this bankruptcy is the fall in production, recession, with all its terrible and violent consequencnd violent consequences. All the hymns of praise to American growth – whose "artificial" conditions and cost to the population we have already examined – aim to hide the world recession. The occasional mention of the "serious recession in most Third World countries" (The Economist) and in the countries of Eastern Europe, is drowned in the flood of praise for the American example.

Towards worsening contradictions in the US economy

Despite all the cheating, the bourgeoisie nonetheless has to try to get a clear picture itself, if only to try to control the process of decline. Whence today’s interest in a "soft landing". The "Asian" crisis, which ravaged Asia, Latin America and Eastern Europe in the summer of 1997, was contained in North America and Western Europe. The cost to the latter, especially the US, was an increase in private and public debt, accompanied by inflation, an overheating economy, and a still more gigantic and "irrational" stock exchange speculation.

The most serious financial authorities and economic specialists give the lie to the paeans of praise to the economy’s good heconomy’s good health and the revolutionary boom of the Internet and the "new economy"; in fact, they have only one concern: that the world economy should manage a "soft landing". They recognise that in reality, the economy is already in decline. "One thing is certain: US expansion will slow down (…) will the slowdown be brutal enough to cause a worldwide recession? This is very unlikely, but the danger cannot be dismissed. [Nonetheless] this situation has two alarming consequences. Firstly, a substantial slowdown will be necessary to prevent a return to inflation in the US during 2000 (…) If the new economy is a mirage, or at least much less real than is claimed, then today’s stock market valuations of American companies cannot be justified. As soon as the necessity for a moderation in world demand is combined with a stock market that is both over-valued and unprepared for disappointment, including the most serious, then all the conditions will be united for a much less successful landing" (The Economist, translated in Courrier International).

Doubt is setting in. will the bourgeoisie manage to keep control of the decline, and avoid a brutal collapse as in 1929? The issue is not one of bankruptcy or not. The bankruptcy not. The bankruptcy is already here. Unemployment and job insecurity, or full employment? The unemployment is already here. No, the real question is: will the bourgeoisie continue to control the decline, as it is still able to do today? Will the collapse be controlled, or uncontrolled? Doubt is present in another article in the same publication. "If it succeeds a soft landing, [the USA] will have pulled off a miracle every bit as remarkable as the sustained growth that it has known in recent years" (idem). Heavens! Two miracles in succession! What blind faith. And what confidence in the virtues of the capitalist economy. Like the first, this second miracle will be performed not by the market, but by authoritarian state intervention – especially by the USA – in the economy, by political decisions by governments and "technical" decisions by central banks, which will once again cheat with the law of value, not to save the economy but to "land" it as softly as possible.

Towards more war

As we have seen, peace will not return to Chechnya. Nor to the Balkans. The hotspots are numerous. Amongst the multitude of local antagonisms, the permanent tension between China and Taiwan,een China and Taiwan, India and Pakistan (and therefore India and China), all except Taiwan being armed with nuclear weapons, is full of danger. At the same time, the partly hidden antagonism amongst the great industrial powers is sharpening. These rivalries are either a direct cause – as in Yugoslavia – or an exacerbating factor in local conflicts. The disagreements over Kosovo and NATO’s use of occupying forces are an expression of this.

Renewed local conflicts, sharpening antagonisms between the great imperialist powers, this is where capitalism is taking us, day by day.

At the level of local imperialist antagonisms, the present period of decomposition has provoked a situation of chaos on most continents. "Almost everywhere, in the Southern countries, the state is disintegrating. There is a development of lawless regions, ungovernable chaotic entities untouched by any form of legality are plunging back into a state of barbarism, where the only law is imposed by the gangs of looters that hold the population to ransom" (Le Monde Diplomatique, December 1999). Abandoned Africa is the clearest illustration. Immense regions of central Asia have gone down the same path; though to a lesser exugh to a lesser extent, Latin America is also affected as we can see from the Colombian example.

As on the economic and ecological levels, capitalism’s irreversible tendency towards decomposition is dragging humanity into chaos and catastrophe. "This empire [Russia], falling apart into autonomous regions, this incoherent, lawless grouping, this flamboyant universe where the most enormous wealth lives alongside the most terrible violence, is a shining metaphor of this new Middle Ages into which the whole planet could plunge if globalisation is not brought under control" (Jacques Attali, one-time adviser to French President Mitterand, in the French weekly L’Express, 23/03/00).

Has humanity a future?

The state of the world today is catastrophic and frightening. The perspectives that capitalism has to offer humanity are as apocalyptic as they are inevitable. Inevitable, that it, unless we have done with the cause of these ills: capitalism itself.

"The myth persists that hunger results from a scarcity of food (...). The common thread that runs through nearlyt runs through nearly all hunger, in rich and poor nations alike, is poverty" (International Herald Tribune, 09/03/00). Capitalism has developed sufficient productive forces to feed the entire world, even despite the immense destruction of wealth and productive forces throughout the 20th century. Abundance and an end to poverty are possible for all humanity. With them, a mastery of the productive forces and the social distribution of goods. The end of the exploitation of man by man. An end to wars and massacres. An end to the wanton destruction of the environment. Economically and technically, the question has been settled since the beginning of the 20th century. It only remains to pose the question of the destruction of capitalism.

Against this, the ruling class reminds us endlessly that any revolutionary project is inevitably doomed to bloody failure; that communism is the same thing as its negation, Stalinism. It uses its "opposition" forces to put forward democratic campaigns against Pinochet, against the far right in Austria, against the hold over society of the great financial powers, against the WTO during the great anti-summit media show in Seattle, for the Tobin tax via associations like ATTAC patronised by Le Monde Diplomatique. These campaigns have extensions adapted to the situation in each country: the Dutroux affair in Belgium, the struggle against ETA terrorism in Spain, the Mafia scandals in Italy, anti-racism in France. Their main theme is that the population, and in the first place the working class, should regroup as "citizens" behind the state in order to support it, or, even more radically, to force it to defend democracy.

The aim of these campaigns and democratic mystifications is clear. To substitute the struggle of all classes and interests of the citizens, for the working class struggle; support for the state, for the struggle against capitalism, and the state as its supreme defender. The working class has everything to lose in an inter-classist mass of citizens or "the people". It has everything to lose in lining up behind the capitalist state. The bourgeoisie is trumpeting that the class struggle is over and that the working class has disappeared. And yet the very existence of these campaigns, their – often international – extent and orchestration, reveals that for the bourgeoisie the working class remains a real danger.

This is all the more true in that today, the working class struggle is making an appearance – dispersed certainly, controlled and defeated by the unions and the political forces of the left, but nonetheless indicative of a growing discontent at the attacks the class is subjected to. In Germany, Britain, and France, significant movements have taken place, even though they remain hesitant and largely controlled by the unions. The movement and demonstrations by the New York subway workers (see Internationalism n°111, our publication in the USA) was doubtless one of the main expressions of the strengths, weaknesses, and limitations of the working class today: on the one hand combativeness, a refusal to accept sacrifices without fighting back, a readiness to gather and discuss the needs and means of the struggle, and a certain distrust for the union’s manoeuvres; on the other, a lack of self-confidence, a lack of determination in overcoming the obstacles set up by the unions, to engage the struggle openly and to spread it to other sectors.

All the lies about the economy’s good health are intended to delay as far as possible the development of a consciousness throughout the working class, not of the attacks and the deterioration of its living and working conditions – that is daily common knowledgly common knowledge already – but of the bankruptcy of capitalism. And on the ideological and political level, the incessant, systematic campaigns on the need to defend and strengthen democracy are at the centre of the bourgeoisie’s political offensive against the proletariat in the present period.

Historically, the stakes are high. For capitalism, it is necessary to delay the development of massive and united struggles, and to prevent the workers developing their self-confidence. It is necessary to exhaust, disperse, and eventually to defeat the inevitable proletarian counter-attack. It will be a disaster for all humanity if the proletariat is defeated in the decisive battles to come!

RL, 26/03/2000

General and theoretical questions: