World capitalism has a terminal condition. To our readers, and for much of the world, this is not news: The current round of sickness, which began in 2008, is yet another incident in a seemingly endless round of suffering. This is not a “death crisis,” which will result in some automatic collapse of the capitalist system, but rather a crisis which can only bring ever-greater misery for the mass of humankind so long as capitalist social relations are not overturned. In recent months, an election in France brought the Socialists back to power. More recently the U.S. returned a Democrat president. That these governments have struck a more populist rhetoric does not mean a return to “welfare capitalism.” Regardless of who won these elections, the treatment offered by the new governments is everywhere the same: more austerity, especially for the working class. No miracle cure exists to save the patient. Only the misery of prolonged suffering will be the result.
The US Election: Bring out the Leeches!
What was hyped as the “election of the century” proved to be less dramatic than that hype predicted. Despite minor changes, the White House and the Senate remained in Democratic hands, while the Republicans kept control of the House of Representatives. Barack Obama’s victory in the depths of recession is only proof that Obama is a more efficient evil rather than a lesser one: In times of deep crisis, it will be easier for Obama, rather than Mitt Romney to make those cuts capital deems necessary. Looking at the platforms of the two parties of capital, the especially toxic campaign rhetoric aside, there was very little of substance to even choose between. While Obama promised “sugar” to Romney’s “vinegar,” there is little doubt that both were loyal servants of capital committed to carrying out its policies. As if to underscore the point that there would be no respite for American workers, as soon as the result been announced both parties began to talk of a mandate for compromise and a mandate not to raise taxes. In other words, Republicans and Democrats would continue to collaborate in delivering deepening austerity programs while paying lip service to the idea of protecting living standards for the greater population. The impetus for austerity, however it is packaged, is not the simple greed of the “bankers,” but rather the imperatives of a system based on the value-form, whatever the political coloration – left or right – of those who administer the political system.
The defeat of many “Tea Party” candidates within the Republican Party will likely allow some superficial program of mild tax increases for the wealthiest section of the population “balanced” by deep cuts to social programs. The “need” for such a program, despite Obama’s image, is evidenced by the spectre of the “debt cliff” which made its appearance immediately after the election. The talk of a debt cliff has dominated all discussions of the US economy and the need to address it will lead Obama, no doubt expressing regret and concluding he had no choice, to institute further cuts in government spending, especially social programs: A little post-surgery political theatre for the masses.
Feverish Remedies and Feverish Reactions
But if North America is preparing for savage austerity, the Euro zone is already living with the consequences of it. In November, in response to the continued economic crisis, coordinated actions emerged. Simultaneous general strikes in Spain and Portugal took place, while significant actions have also taken place in Greece, Italy and Belgium.
Spain now threatens to replace Greece as the leading basket case in Europe. In Spain, the crisis has gone beyond the economy and threatens the very fabric of society. Conservative estimates have it that a quarter of the population is out of work. Reports indicate over 400, 000 people have lost their homes or apartments, and an estimated 1.4 million Spaniards are facing foreclosure proceedings. (As if to add injury to injury in Spain after foreclosure, the debt stays with you and banks have up to 15 years to collect what is “owed” to them). Little wonder the suicide rate has skyrocketed.
But if Spain is the New Greece, Greece still remains its old self. Misery continues, accompanied by general strikes. In Italy civil servants and national transportation workers strike intermittently, while students demonstrate throughout the country. In Belgium rail workers severely disrupted high-speed rail lines routes to other parts of Europe.
But while these signs of resistance are inspiring, at this point, they still remain within the realm of protest against the politics of various capitalist rulers, rather than against capitalism itself. The union federations have shown how willing they are to contain these struggles and direct them into harmless channels. In France, as workers struck and protests against austerity measures, rather than join the strikes, the main union federations called their own demonstrations which were largely attended only by themselves and their leftist supporters like Lutte Ouvrière.
These austerity-measures in southern Europe show the willingness of the ruling class to impose hardship, even death on the working population. For the ruling class, working people must die for the sake of debt-service, as if it’s the price they must pay to stay in the Euro zone. Outside of the zone, these countries would be even more starved for capital needed to keep the accumulation cycle going. The Euro-bosses need to impose these hardships to maintain the trust in the currency. If it collapses, much of the Euro zone might go the way of Greece. Meanwhile, there is, within the Euro zone, a stream of capital is moving from the weaker European countries to the stronger ones, making capital cheaper for the latter. It reflects an assessment by a majority of owners of capital that, sooner or later, a restructuring of the Euro zone is likely, with the exclusion of its weakest parts.
Middle East Blood Letting Doesn’t Ease the Patient’s Suffering
In the Middle East, bloody communal violence within a frame-work of inter-imperialist antagonisms continues an established pattern. If the cease fire between Israel and Hamas holds, this is an outcome that's desirable for American imperialism in the region: a bloody and ungovernable ground war in Gaza would threaten American relations with Egypt (and indeed much of the Arab world), and it would increase the prestige and power of Iran as the “protector” of the Palestinians.
Furthermore, any conflict in the region will take Western pressure off the Assad regime in Syria at a critical juncture. The protest in Syria was a part of the Arab Spring, itself in part a proletarian revolt against capital, but it also became a scene of inter-imperialist conflict, with Iran (supported by Russia, China) and the US allies in the Middle-East fuelling the conflict, using the local ethnic/religious differences for their own purposes. Whichever side wins in such a conflict, the outcome will be bloodbaths. Whether the victims will be mainly Alawites or Sunnis, whether the conflict spreads to Lebanon, remains to be seen. But the war shows another way in which crisis and decomposition gives an outlet to the need for devalorization, destruction of excess value, whether in the form of human beings or other productive capacity.
With a successful “cease-fire,” the U.S., through Egypt has an “in” with Hamas, which is critical if there is ever to be a resolution to the Palestinian question that will prove satisfactory to the U.S. These developments demonstrate that the replacement of Mubarak by Morsi and the Muslim Brotherhood has not hurt American power (indeed could enhance it); and it potentially weakens Iran in the region, for whom Hamas (and Hezbollah) were its entry point into the Arab world, and in the case of Hamas specifically into the Sunni world.
The West in Vain Looks to Chinese Medicine
In Internationalist Perspective 55, we published an article entitled “Can China save Capitalism?” Then, as now, we concluded that while China’s growth rate, largely based on the super-exploitation of China’s work force, is the envy of many Western capitalists, China is no more excluded from the problems that beset Western capitalism than any other part of the world economy. China’s state-capitalism cannot escape capital’s cancers.
A recent New York Times article noted that after a sluggish year, China’s economy was growing faster than expected. Yet the article also sounded a note of uncertainty:
“…the renewed growth has been fueled by rapidly mounting debt, as state-owned banks and the central bank have funneled hundreds of billions of dollars in additional lending to state-owned enterprises and government agencies to finance further investment projects.”
(New York Times November 9, 2012)
“Many worries persist about the sustainability of even a modest recovery heavily reliant on debt. Chinese banks are lending at such a brisk pace that by the end of next year they will have expanded their balance sheets in just 5 years by an amount equal to the combined balance sheets of the entire US banking system.”
Clearly, the Chinese Communist Party leadership is intent on continuing their current economic strategy despite the clear dangers. They are creating fictitious capital at a fast pace, inflating bubbles which will inevitably burst. It seems as if the delusions of the party leadership that this strategy can be successful reflect a greater fear of the social consequences of attempting to rein in this growth.
Perhaps if we Open (or Close) the window, the Patient Will Improve
Despite severe economic difficulties, there has been one positive development for U.S. capital: an increasing capacity of energy-production which will be a counter-acting factor slowing the acceleration of the current crisis. However, this factor can only be realized by severe ecological costs (hydraulic fracking, tar sands, shale-oil, ever-deeper sea drilling etc.) while investment in renewable energy is down everywhere. Perhaps the only positive note is that after the disaster in Japan, nuclear power is unlikely to expand. In the West, many people believe that pollution is being addressed, but in fact much the heaviest polluting production has simply been “outsourced” to China, India, etc. Indeed, anger over the poisoning of their living conditions has become a principal source of working class resistance in China. The scientific knowledge of the climate-altering consequences of the capitalist mode of production has in no way changed its behaviour. The more desperate it becomes for profit, the more corners are cut. And the result is increasingly severe ecological disasters. The havoc wreaked by Hurricane Sandy on the US northeast coast is but the latest example of this feature of capitalism. It seems remarkable the restrain showed by the media and various politicians to attempt to politicize Sandy and at the same time not mention global warming. The media focused on specific conditions, presenting the view this was a “one in a century perfect storm”. Just like Katrina, etc. These ‘one in a century’ disasters increasingly seem to take place in our part of the century. It seems increasingly likely that ecological destruction that capitalism spawns is itself becoming a principal channel for the destruction of value that the value-based system needs to survive.
The Only Solution for this Condition
The actual truth is as the various capitalist governments apply various band-aids and poultices in the hope of restoring the ailing patient to full strength, a drastic decline in the patient’s health is the more likely outcome. This issue of Internationalist Perspective leans heavily toward theory. We make no apologies for this. For, we believe it is only through an understanding of capitalism and its nature that we will be able to euthanize the beast that brings misery to all of humanity.
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