Crisis within Capitalism

Saturday March 08, 2003 19:47

by the Pragmatist

The economic system we live in, is based on shaky foundations, conflicting concepts of value and will ultimately fail as it has in the past.

"The collapse of the global marketplace would be a traumatic event with unimaginable consequences. Yet I find it easier to imagine than the continuation of the present regime."

These are the words of George Soros, financial speculator, profiteer and die-hard supporter of capitalism. Why would a man who earned millions through his knowledge of money markets, stocks and shares and all that nonsense about the FTSE and NASDAQ make such an assertion?
Well, largely because it is true. Capitalism, besides being a big word thrown around by people who should know better, is the situation where the means of producing wealth (machines, factories etc.) are in the hands of a minority of the populace. These factory owners (capitalists) proceed to live off the wealth generated by the workers who are poorer than them, who need money and who have to sell their labour (agreement to work) to the capitalist so they can live. There are smaller employers, entrepreneurs, government jobs and people who move up and down the scale every so often but the above example is what defines the system we live in.
This situation has not occurred because certain people are naturally more intelligent than others, as capitalist propaganda would have you believe. No, largely rich people inherit most their wealth and have made contacts with other rich people to keep their offspring rolling in it. No one would claim that Tony O'Reilly or Dermot Desmond would beat a scientist or teacher at Countdown. The overwhelming majority of people are products of their environment and keep in the same social class of their parents. How far you succeed in life depends on the chances you were given.
This is how people stand in capitalism. However it is the way in which the system is measured, which is entirely fictional, based on intangible and invisible sources of value and controlled by nameless men in suits. If you listened to the news over the summer you heard about stock market crashes that would have collapsed the economy 50 years ago, monies valuing and devaluing and people losing jobs due to a lack of demand in the sector.
Enron and the like had a certain share price one day and the next day nothing. Why? Because the way they were valued was simply made up. Fictional. The same thing happened in Weimar Germany in the 1920's, the Mark had a good value one day (Germany being one of the richest countries in the world) the next day it was worth nothing. The same amount of people, same amount of workers, machines, agriculture everything needed to produce wealth was the same. Only the way in which the economy was measured changed. Some fat cats on the US stock market decided one thing one day, and the next a whole nation couldn't afford to buy bread.
Odd, isn't it?
An assertion you would have made very early in your life was that (capitalist) economics makes sense, the punt had a certain definite value and the economic system you lived in was logical. Sure anyone could take economics in school or University and there were men in suits speaking in technical terms on TV about the economy. As long as the economy didn't fail (things built on solid foundations don't) and you buying a house, apartment, or anything you may want wasn't too difficult or taxing it was unlikely you would consider that one of your basic assumptions about money, that you'd never question, was wrong.
The capitalist system will fail in the future, not due to the masses rising up against injustices, a brave new communist leader or political pressure. No, the imperfect system we live in will fall due to the major and most simple human error: confusion. The money valuers, stock market speculators and Volvo driving toffs who read the Financial Times will bring about and point out the failure of the capitalist system bit by bit through being confused about the conflicting theories of value they have invented for themselves.
There are very basic economic laws in agriculture and machine production, which are applicable every where. They must be remembered as economics depends more on credit (money that doesn't exist), international markets with fictional ways of valuing company performance and glossy thin strips of a tree (paper money).
The aim of all socialists must be two-fold: to apply political pressure to change the system and to set up business ourselves to compete and eventually knock out the capitalists from the ‘market’. In doing this we must show how a very well paid work force who own the company collectively can all share in the profits made while charging low prices and providing good quality commodities to consumers. The essential difference will be that the board of directors will not be paid huge salaries and their workforce paid nothing. The workforce will be the board of directors and will be paid relative to productivity.
As capitalists exert increasing influence over governments this can be our only remedy to checking the power of the private sector over the people.

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Comments (3 of 3)

Good article

by Dolt

Mon Mar 10, 2003 02:19

Good to see a reasoned piece on here once in a while. Anti-capitalist enterprises seem like a nice idea but people change their priorites as thet get older and have kids. Ben and Jerry sold out.

Another view on the current crisis in capitalism and the environment

by Terry

Mon Mar 10, 2003 15:28

The above is a little incoherent, but nevertheless hopefully starts some debate. According to
Marx, capitalism has inherent contradictionary forces at work and that it is ultimately unstable.
Therefore a question that has arisen often over the last 100+ years, during each major recession
is has the failure point now arrived and of course recently the question has arisen again.

From what I can make out from some of the literatiure, is that sometimes people seem to think that
a better world will thus surely follow, and that form would be a socialist revolution. This has
a certain air of fate and destiny about it. Although it is true, many others argue that we should
make the push for revolution at precisely these times.

There is no doubt that the profit rate has been slowly falling since the 50s and there is a crisis.
But there are other crisis, such as the environmental crisis too which should be kept on the radar
screen too. The current militarism by the USA is clearly linked with resistance to the large waves
of anti-(neo-liberal) globalization and Sept 9/11 is merely some kind of pretext that they (US) have
used to go on the offensive. There is every indication that we are on the brink of going full tilt
to some kind of global totalitarian system dominated by US capitalism. On the more moderate side
of the capitalists, are those who are horrified at the Bush gang, and seem ready to implement relatively
significant 'reforms' of capialism. This may indeed work for awhile more and allow the system to
last a bit longer. Then again it may not, but at the moment they are not in power, but don't be
surprised if there is some kind of coup in the US, to remove Bush and for these people to come to the
fore.

Coming back to the question, as to where the world is about to leap and what is to follow, I think
we must recall, that before 'modern' capitalism arose, there were plenty of oppressive regimes
like fuedalism, the Roman Empire, and numerous empires and barbaric regimes. These of course had
capitalist elements to them, but ultimately in all cases were ruled by small elites. There is
absolutely no reason why we will NOT enter into a new long period of repression and the relative
freedoms of the last 100 or so years will be wiped out. We are already well into the transistion process.

What is different now to say the Roman empire, is the technologies at the disposal of the oppressors
and the giant global and incrediably powerful propaganda media machine, which we have to admit is
very effective. It doesn't follow we are destined for socialist utopia and that everybody will see
the light. While the level of resistance to globalization gives some cause for optimism, the level
of apathy and total lack of awareness by many is far greater. The issues need to penetrate much
deeper and wider to the masses, if our collective asses are to be 'saved'.

Another related factor, I reckon is the environmental factor. Even without the huge global financial
bubble, the effect on the severe erosion of our environmental capital has to kick in. In fact it must
be already present, except that it is largely being ignored. There is this notion, that when the
environment more or less collapses (and environmentalist tend to be prone to this sort of thinking)
is that people will 'realize' and then there will be a movement to do things 'right' from now on.
Nothing could be further from the truth. We have already lost vast portions of global ecosystems,
and nobody really cares or notices. The state of the environment currently is usually what people
come to accept as 'normal'. The destruction of the environment just means there will be much
greater pressure on the population at large, and it (pop.) will surely begin to fall. But even if it
were to fall to a quarter of the current level, it is likely that destructive practices will continue
unabated. It is also likely that society will still be ruled by elites and freedoms will be a rapidly
disappearing concept.

So the message is that to get a better world, we have to work really hard at it and now is the time
before we move to a new 'stable' and not so happy state. The power of the propaganda machine is so
great and the forces pitted against us, means it is a even more uphill battle than we realize. What
scares me most though is this constant referral to the fact that Capitalism is inherently unstable
and will fail. In others, sit back and watch the social universe unfold.

Below are links to two articles on the current crisis in the world economy. The first is from a
reformist perspective and naturally enough suggests some reforms. The second is from a socialist
prespective and suggests a push for socialist revolution. Both are well worth reading.

Capitalist Globalism In Crisis Part One: Boom and Bust (6 parts)
http://www.zmag.org/zmag/articles/dec98hahnel.htm

The World Economic Crisis: 1991-2001
http://www.wsws.org/articles/2002/mar2002/lec1-m14.shtml -Part 1
http://www.wsws.org/articles/2002/mar2002/lec2-m15.shtml -Part 2
http://www.wsws.org/articles/2002/mar2002/lec3-m16.shtml -Part 3

This article is more of a current look at the recent state of affairs and is again informative.

From Capitalist Crisis to Proletarian Slavery -An Introduction to Class Struggle in the US, 1973-1998
http://www.wildcat-www.de/en/material/gc_slave.htm

Global Peak of Cheap Oil Crisis

Mon Mar 10, 2003 19:38

I thought I might add some stuff to the impending global peak of cheap oil, which will
compound the economic/capitalist crisis and of course bears on the environmental crisis.

See for example this article "A 'Phantom Oil Peak' may become real" at
http://www.globalpublicmedia.com/ARTICLES/oil.phantom-peak.2003-01-22.php

See also the many interviews available at 'related link'

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Comments (3 of 3)