Crash and War
by Robert Kurz
[This article originally published in: ND 7/2002 is translated from the German on the World Wide Web, www.giga.or.at/others/krisis/r-kurz_crash-und-krieg_nd-kol64.html.]
The "salami crash" is now followed by the plunge of the world stock exchanges. The financial markets experience the greatest bear market of postwar history. All the baseless optimism of the last two years has proven misleading. Three things are alarming in the most recent development. Firstly, the supposedly solid values of the "blue chips" (banks, automobile- and food corporations etc.) are seized by the inexorable downhill whirlpool, no longer only the segment of the New Economy. Secondly, the speculative bubbles burst one after the other on the exotic, Japanese and European stock exchanges. The most holy global casino capitalism, Wall Street itself, rapidly approaches the critical mass of a big bang. Thirdly, the mega-bankruptcies of mammoth corporations like Enron, Worldcom and so forth closely following one another signal that the crash of financial markets threatens to leap over to the real economy.
If this crash cannot be stopped soon, the whole world situation will be endangered and the position of the US as the last superpower, not only the further financing of the US trade- and balance of payments deficit. The powerful unrivalled high tech military apparatus of the US was financially supported for a long time by the fictional capital of speculation bubbles, investments and opulent consumption in "God's own country". The military control over the world threatens to be lost along with the economic control. When nothing clicks any more, according to the standard argument of leftists, the final capitalist solu9tion is always war. The US is feverishly preparing an attack on Iraq without worrying about credible legitimation. Can this war solve the economic crisis in any way?
The motive of robbery was always dubious under the conditions of developed capitalism. Gaining accumulation capacity is central, not spoils. In the third industrial revolution, the annexation of foreign territories was carried on ad absurdum since a largely "surplus" population would be gained. Greed for the raw material oil exists since the strategic control of the most important reserves is always vital. However this has nothing to do with a possible solution to the structural economic crisis. Nothing remotely useful for that crisis can be gained in impoverished Iraq.
The motive of producing a war boom is also dubious. The Second World War brought the historically highest growth rates to the US economy because an enormous material expense was needed to overpower the Nazi war machine. The take off of the economic wonder through the boom of the Korean war was only possible because a substantial mass of war production over three years was necessary. The arms boom of "Reaganomics" was also based on arming the Soviet Union to death by mobilizing vast technological and material resources. Eleven years ago when the Iraqi army was still relatively dry or juiceless, the Gulf war was an ultra-brief affair needing few resources that hardly affected business conditions. Today the inadequate Iraqi defense would immediately collapse without even refilling the arsenal of the US aircraft carriers.
The argument should be countered of a reconstruction boom where the capitalist war first smashes everything so capital can accumulate again. This is economic nonsense. Accumulation capacity is determined by the state of productive forces, not by the outward range of production. In war-destroyed West Germany, the pre-war level of production was reached at the beginning of the 50s. Only the capacity of new fordist industries for expanded absorption of workers brought the economic wonder, not the reconstruction of destroyed buildings, machines and so forth. no new secular accumulation capacity would arise if the US bombed the whole surface of its territory. The military devastation of peripheral regions doesn't produce any reconstruction boom as hopeful western corporate representatives already learned to their regret in Bosnia and Kosovo.
The dawning new world economic crisis cannot be overcome by any war. If Iraq is massacred, a victory feast of the stock market will be brief, sluggish and half-hearted. The whole Middle East region will be permanently destabilized together with its strategic oil reserves. Nevertheless Bush will strike the more insurmountable becomes the financial crash and the real-economic crisis. The standard leftist argument is actually correct. However an error is made in its interpretation in imputing rational interests and problem-solving competence to capitalist power. The capitalist relation is irrational in itself and is its own limit. The internal rationality of interest ultimately capsizes into self-destruction.
What we witness is the logic of running amok. The post-modern person running amok is a creature of universal competition. A final demise is staged without accomplishing anything in this world. As blocked teenagers organized a school massacre, the global capitalist power of the US threatens to repeat this massacre on a large scale if it isn't prevented in time.