-By WPRM (Britain)
The ruling class in Britain, their think tanks and the media deceitfully insist that the reasons for the current deepening economic crisis are deregulatory financial policies and the greed of a few individuals and bankers, and this is the cause of the accumulation of “bad debt” and “credit crunch”. They deliberately conceal the truth from the people that these factors are only by-products and minor, but inseparable aspects of the economy of the monopoly capitalist system.
At first they said that this was a collapse of a few financial companies in the US, and it is only due to the corruption of their management. In autumn 2008, they said that there were a few financial problems with some banks, especially Northern Rock, but the main problem is the housing market in the US. With the collapse of many banks and financial companies they said that it was only financial crisis. But shortly afterwards they were forced to admit that it is a deepening full economic crisis, deviously avoiding the word depression. And now they are desperately trying to hide the scale and depth of the crisis and declare that it will be over in a couple of years. Pigs might fly too!
The imperialist rulers try to hide the fact that the exploitation of workers is the pumping heart of the capitalist system. Monopoly capital feeds on the exploitation of billions of workers and peasants around the world, including hundreds of millions of children. Capitalists do not pay the actual value of the commodities that workers produce and consequently the majority of workers in the world cannot afford to buy even the basic commodities they need. According to the United Nations, the income of nearly 5 billion working people per head is $3 per day or less. One billion people do not have food and tens of million, especially children, die of hunger and malnutrition every year. Nearly 3 billion people do not have access to clean drinking water, proper sanitation, medicine and electricity.
A few hundred super rich accumulate billions of dollars per day, adding to their already colossal wealth, where hundreds of millions of youth are forced to drug use and addiction and tens of millions of women into the global sex trade. In spite of massive scientific and technological advances achieved by the workers in different fields, during the last 4 decades, air quality, fish stock, arable land and forest area across the world have reduced at an alarming rate. These staggering facts and figures and many more show that the monopoly capitalist system dominating the world is destructive and harmful to the people and society. But the ruling class desperately tries to hide the root cause of poverty, destruction and war – the capitalistic mode of production.
Crisis in the monopoly capitalist economy is inevitable, because the accumulation of capital and its moribund relationship of production are based on private appropriation of the means of production. The contradiction between socialised production and capitalist appropriation manifests itself as the antagonism between billions of workers and a few big capitalists. In addition to exploiting local and migrant workers, and super exploiting tens of millions of “illegal” migrant workers in the imperialist countries, principally monopoly capital thrives on plundering the wealth of the so-called third world countries, sucking them dry and keeping their economies destitute and dependent in order to make super profits.
Also, the contradiction between socialised production and capitalistic appropriation manifests itself as an antagonism between the organisation of production in work places and the anarchy of production in society generally. It is the compelling force of anarchy in the production of society at large that leads to the crisis of overproduction. The capitalist system cannot fundamentally resolve the problems of unemployment, inflation, housing, medical care and education for the vast majority of the working people. The capitalist economy always develops through boom and bust cycles, and it is never able to get out of this vicious circle. The ruling class and the managers of the capitalist economy continuously design different policies to maximise profit as well as keeping the crisis at the level of recession, avoiding an all out depression.
Maximising profit and anarchy of production inevitably lead to the creation of bubbles. The Consumer Credit bubble is designed for the workers in the imperialist countries, who cannot afford to buy the surplus of the massive amount of commodities overproduced by China, India and other countries, where labour and raw material is extremely cheap and thus super profits can be guaranteed. However, the level of mass consumer debt has continuously increased during the last 30 years reaching an unsustainable level. The British government’s statement that they are encouraging banks to lend to kick- start demand is flawed, because people cannot afford to borrow any more.
The Government Debt bubble is based on Keynesian deficit spending, which is used to artificially increasing consumption by creating public work projects and even non-productive jobs for the unemployed. The government gets most of its income in the form of taxes obtained from the people, buys the excess commodities in bulk when the people cannot afford all that is produced, and then sell it to the people making profit. Since the economic crisis surfaced last year, the government has used hundreds of billions of pounds collected in taxes from the people to save the banks who have extracted hundreds of billions of pounds of interest every year; on the mortgages, personal loans, credit cards, etc., from the same people. Today, the British government has its biggest budget deficit in history and its finances are in too perilous a state to permit a new round of fiscal stimulus.
In addition to these, there are various kinds of speculative bubbles such as estate bubbles, stock market and other financial bubbles. Economists working for the capitalist system cannot understand the fundamental flaws in the capitalist economy. Today, some say continued reliance on bubbled-based economics is a mistake, whereas others say at this point, bubbles are the only thing keeping us floating and the need for another spontaneous make-believe source of wealth has never been more urgent. However, both groups are mistaken, because the monopoly capitalist economy inevitably creates bubbles, and bubbles have to expand and eventually burst, deepening the crisis. For example, the dot-com bubble burst in 2001, and the housing bubble burst in 2008.
These economists have already stated that this is the worst economic crisis since the Great Depression of the 1930s. However, the current economic recession will soon develop into a full scale depression and it will actually be developing into by far the worst economic crisis in all of capitalist history. According to the Institute of Fiscal Studies, debt crisis in Britain will continue well into 2030s. Regarding its scale and depth, this coming depression could be dated from 2008; however, it has been developing since the early 1970s. Also, for 64 years, there has been no world war to basically restructure the global monopoly capitalist economy. But, imperialism means war.
It is important to consider that policies adopted by Roosevelt to overcome the Great Depression, which started in 1929, did not really work. In fact, it was the preparation for the Second World War, and the large scale military and civil production related to the war that finally stimulated the US economy. Also, after its defeat in the First World War, it was the preparation for war that enabled Nazi Germany, to overcome its monumental economic crisis. Finally, the US strategic offensive, through war, is supposed to shape the global economy for building the US Empire of the 21st century.
After the Second World War there were nearly 28 years of worldwide capitalist boom and this was made possible by the colossal destruction of capital during the war, which cleared the ground for a long term boom. But since 1973, the growth rate of GDP in the leading imperialist countries has been reduced by 50% compared to the 1950-1973 period. In fact, overall the world GDP growth rate has declined every decade since the 1960s, and globalisation had only a short term effect on this declining trend.
Today, the ruling class in Britain is at war with the oppressed nations of Afghanistan and Iraq and supports the Israeli aggressors, but they try to hide the fact that monopoly capital is the main cause of all wars and destruction. Capitalism causes reactionary and world wars, state terrorism and military aggression to re-divide the world and make room for the dominant capital to circulate. Therefore, intensification of exploitation and oppression, accelerated destruction of the environment, more wars of aggression, military intervention and occupation, blatant political repression, naked state terrorism, the rise of fascism and perhaps world wars are all on the horizon. And only the masses can put an end to all these.
We cannot predict how long the current global economic crisis will last and how the imperialist powers can deal with it. But we need to analyse the objective situation, unite with whoever can be united and mobilise the masses for the fundamental transformation of society. The era of capitalism is over, we need a new world.