No Life Support for Capitalism
Pulling the plug won't mean the end of the world; there is an alternative. Let's do a Kevorkian on this rotten system
We are witnessing one of those rare moments in history when the economic system in which we live is not simply teetering on the edge of the abyss, but has fallen over it. The swindlers and speculators who have had what one bourgeois commentator called a "sumptuous feast" are terrified, not simply that this free lunch is over, but that there will be no more free lunches; they are worried about the future of capitalism itself.
Debt allows capitalism to go beyond its limits and the massive amounts of debt accumulated over the past 25 years has brought the system to a near collapse. Since 1980, the aggregate stock of US debt rose from 163% of GDP to 346% in 2007. Household debt rose from 50% of GDP to 100% during the same period while the indebtedness of the US financial sector climbed from 21% to 116% (Financial Times 9-24-08). This debt allowed the capitalists, particularly the coupon clippers and swindlers to generate massive profits. Those of us who pay home mortgages are well aware of how much of our money goes to the purchase of our home and how much is interest to the moneylender in the first ten years or so; they want to ensure they get their pound of flesh. We are witnessing the law of the market dragging the system back within its limits; but for workers, this process is a bloody affair.
The headlines and comments in the serious journals of capitalism give some idea of the dour mood among the capitalists about the future of their system. "Capitalism in Convulsion" wrote the Financial Times on Sept. 20th. "A week that shook the system to its core", reads another headline in the same issue.
The main story in the September 29, issue of Business Week is titled, "Wall Street Staggers" and is accompanied by the picture of a bull, head down with blood dripping from its mouth and body from the numerous swords that are protruding from in between it shoulder blades; the defeated animal's blood is all over the page.
It is important for all of us to recognize that capitalism has received a crushing blow of catastrophic proportions. In order to save the system from collapse, the US government, in just the last few weeks, has bailed out the collapsed Wall Street investment bank Bear Stearns at a cost to the US taxpayer of $30 billion. It has nationalized the US housing industry by taking over Fannie Mae and Freddie Mac, the two giant mortgage companies, by doing this it is also assuming their more than $5.4 trillion in liabilities. Then another investment bank Merrill Lynch collapsed and was absorbed by B of A. Next to go was Lehman Brothers; the government, afraid of a bailout domino effect, let it collapse.
But more was to come and the insurance company, AIG, was nationalized. The US taxpayer now finds themselves the proud owners of the trillions of dollars in debts of the US housing industry, and the world's largest insurer. This from a capitalist system we are told cannot provide decent health care and housing for people, a system that has a "credit default swap market" which had a value of $6.2 billion so far this year. This market exists in order for speculators to gamble on whether or not workers or small business people would be able to pay the interest on the loans they took out for their home or shop, or both; in other words, their economic security.
This crisis is far from over. Writing in the Financial Times, Kenneth Rogoff, professor of economics at Harvard and former chief economist at the International Monetary Fund, argues that "... ... .it is hard to imagine how the US government is going to succeed in creating a firewall against further contagion without spending five to ten times more than it has already... " (FT 9-18-08) His advice was obviously heeded as Bush, the "pull yourselves up by your bootstraps" president, has now announced that he is going to spend $700 billion to bail out the financial system. On top of this, the US taxpayer handed $180 billion over to European central banks in an effort to defend the dollar as the world's reserve currency and instill confidence in the US economy.
There are great lessons for us here. The level of state intervention by what might be the most right wing, free market oriented administration in US history shows us how serious the situation is. It is safe to say that the system of global capitalism would have collapsed were it not for the US government intervening with socialist measures.
Marx wrote that the state is but the "executive committee for managing the affairs of the whole bourgeoisie". What has happened over the past couple of weeks is that the capitalist class has collectivized decision-making through its executive committee. It is curbing the freedom of individuals or groups of individuals within the capitalist class and is using the state to act on behalf of the interests of the class as whole. In the aftermath of this crisis, this executive committee will try to install some regulatory curbs as well; the system is at stake here. Overnight it has banned one group of speculators from continuing their swindling; short-sellers, who borrow shares and then sell them hoping to make a profit, and who are being blamed for contributing to the mess.
In crises such as these the system becomes exposed. As Warren Buffet, one of their most astute swindler's is reported to have commented, "you don't know who's skinny dipping until the tide goes out". As capitalism's tide recedes we can see who actually makes decisions in society and it is not the politicians in congress. The unelected rulers of society who party in Jackson Hole Wyoming now and again made the historic decisions of the last week. On hearing of the plan, Chris Dodd, the chairman of the Senate Banking Committee reveals the level of involvement of the political representatives of capital, "We understand the gravity of the moment" he says. But "none of us have any idea what the details are."
The capitalist class are shifting the cost of their crisis on to the backs of workers and the middle class not to mention the youth who are the future; "heavy costs will be inflicted on the American taxpayer, who is now subsidizing Wall Street." Writes John Plender in the Financial Times. (9-20-08) The likely next step now that they have committed the US taxpayer to a bailout of the speculators and swindlers by purchasing these debt ridden companies, will be to create a government agency like the Resolution Trust Corp that they formed in the eighties to clean out the defunct savings and Loans; it threw out the ones that were beyond repair and sold the best one's back to the crooks at bargain basement prices. This agency will do the same with bad, or what they call "toxic" loans. The US taxpayer will buy them at high prices and sell them back later to the same culprits at pennies on the dollar.
From the capitalists point of view this state intervention is necessary because a collapse of the system would lead to massive social unrest; riots, strikes, social upheaval and a conscious questioning of market fundamentals on an unprecedented scale. This is what the Paulson's and Warren Buffet's of this world are afraid of.
The entire response of the US government shows what can be done. It shows us that the money is there, that it doesn't have to take years to pass legislation and that the idea that health care or education for everyone is impossible is a myth. Without state intervention, the free market system would have collapsed due to this crisis. The level of society's resources thrown at the problem is confirmation that socialism is not an idealistic dream but a real alternative to the free market. But without an alternative, capitalism will re-emerge to face deeper crisis in the future and the working class will have been driven further backwards
Capitalism cannot advance human society. The aftermath of this crisis will see increasing competition between nation states and the continuation of the weakening of US imperialism on the world stage. We will see further wars as tensions between nation states intensify. Without an alternative, environmental degradation will continue and capitalism will survive when its historical epoch is clearly over.
The present wrangling in Congress between politicians from the two big business parties is all about the coming election and which party will be in the driver's seat in November. The Democrats are making an issue of executive compensation but this crisis has not been caused by executive compensation, obscene as it may be; it is about the failure of the system itself. The Democrats and Republicans are united on the important issue; workers and the middle class will pay for this. Carter began de-regulation in the late 70's and democrats joined with Republicans to de-regulate the Savings and Loans.
The only solution is the socialization of the means of production. A right wing capitalist government is showing that it is not opposed to nationalization. By socialization we mean ownership of the means of production, distribution and exchange by the working class, the overwhelming majority of us in society; the forces of production need a new organizer.
The reason for the lack of protests at this point is that so many people are in a state of shock and fear; they don't know what to do or what will happen next; much like the "experts". The other issue is leadership, or lack of it. The heads of organized Labor should be landing the knockout punch to an economic system that can only bring further misery to the world community and our natural environment. But they will not act as in the last analysis they have no alternative to capitalism. Our opponent is on the ropes and the leaders of the working class will do what they can to revive him. There is barely a peep from the heads of organized Labor in the US to this massive bail out of the swindlers and speculators by the US taxpayer except to echo the Democrats; they are representatives of the Democratic Party in the worker's movement.
But protests will increase regardless as the workers of the world feel the crushing weight of capitalism's crisis. The capitalists themselves have shown that we have the resources to provide health care, jobs, education and housing for everybody. The British Guardian pointed out on September 16th that, "America's financial system failed in its two crucial responsibilities: managing capital and allocating capital." The Labor of working people is the source of wealth and in a "free society" those who create it should own, manage and allocate it.
Every protest, every strike or gathering at the local school board, city council or city hall should condemn capitalism and make it clear that working people have a different solution, that we will not pay for their parasitic activities, their wasteful use of society's resources.
Every movement, every protest, must raise the need for an independent worker's party and should help build such a party on a local and national basis.
In a nutshell, what has happened?
*Swindling corrupt dishonest banks and Wall Street firms are being bailed out with our tax money.
*For People who cannot pay their mortgage or whose jobs are gone; there's no bail out for us.
*Multi millionaire crooks that ran the system and brought it to this crisis are walking away with the millions of dollars.
*This is all occurring with the blessing of the Democrats and Republicans
*Take over all the financial institutions, banks, and investment firms, insurance companies and run them through an elected body of working class people. This is not difficult. With the profit motive eliminated money can be invested in houses, jobs, infrastructure etc rather than being gambled by swindlers in the stock markets.
*Take over all the major industrial and distribution and transport companies and integrate them into a plan to produce what people want and need and not what is profitable or what feeds the military industrial war machine.
*The finances of the country and the production and distribution and transportation resources of the country to be part of a democratic socialist plan to transform society. That is, use our productive forces and invest our savings and finances in education, health, infrastructure, saving the environment, creating jobs, not letting it remain in the hands of the swindlers and crooks such as Bush and his cronies, Paulson and his fellow Wall Street criminals. This includes the Democratic Party and Republican Party and their big money criminal backers.
These criminals who have taken the US over the precipice of financial catastrophe so they could fill their own pockets; these criminals who have taken the country to war and who put the production of weapons to slaughter people above the production of health care facilities and resources to heal people, all these people must be removed from their positions of power and identified and pilloried for the criminals they are. All their ill-gotten gains must be seized back from them and used to improve the lives of working people. And in the socialist society we want to build they will be punished for their crimes.
There are two million people in prison in the US, overwhelmingly workers and the poor. With California's three strikes law, workers have been imprisoned for years for stealing a slice of pizza. We should heed the words of Bertold Brecht, "What is the crime of robbing a bank compared to the crime of owning a bank?"
And we are not going to leave things there. We want to ensure that this will never happen again. This means ending, capitalism. Ending the rule of the top 500 plus corporations that constitute a dictatorship over the world. We stand for replacing this dictatorship of money and greed with a democratic socialist plan of production.
The capitalist class themselves have shown how we can allocate capital in a way that will provide what we need to live a decent life free from perpetual war. As each opportunity to put capitalism to rest passes, the following period and further crisis bring even greater misery, war and environmental destruction.
Ken Loach the British film director commenting on the financial collapse said, "The war against Iraq was a massive opportunity to create a coherent anti capitalist movement, to find a real socialist alternative, and we let it slip through our fingers. This is another such opportunity and we must not let it go. "
We have to concur.
contribute to this article
add comment to discussion
view discussion from this article