The nightmare of a crisis that far from improving is, in reality, worsening

A quick glance at the calendar tells us that it is now 11 years since the bankruptcy of Lehman Brothers (2008). Since then the picture of the world economy has only become gloomier. The crisis in the real economy, instead of fading from memory, has become a fixture. Liquidity (an avalanche of money – globally we are talking of more than $11 trillion) injected to save the banks and to restart the economy, has ended up in financial and speculative circuits, thus rendering "economic fundamentals" ever more fragile.

Despite the great promises made by economists and politicians after those dramatic days and the illusory promise that they would fundamentally reform the financial system, everything carries on as before. They no longer speak of a "magical" separation of commercial and investment banks; there is only silence about the downsizing of banks “too big to fail”; the planned significant increase in the capital of the same banks remains a "pious wish", alongside proposals for a tax on financial transactions, etc.

At this point, they are even grasping at the "rediscovery" of some (appropriately mystified) aspect of Marx's "thought". Let’s be clear: they are talking about “another" Marx, generally considered to be dedicated to studies of a more "philosophical" than "economic" nature, which must be followed by the revaluation of some "Keynesian policies" alongside a critical evaluation of Marx's most urgent, risky and uncomfortable "ideas". It is the blah blah blah of economists and university professors of this "subject of study", who even define themselves as very close to the author of Capital. One of these is M. V. Passarella, a highly esteemed "expert" in macroeconomics in the academic world of "the left". The aforementioned admits, albeit with gritted teeth, that the crisis that began in the 1970s was due to a decrease in the rate of profit (by about 50% according to him!) which today has recovered somewhat but only equal to about half of the previous decline. A result however that has only been achieved thanks to greater exploitation of workers. All done without any "carrot", but instead with "stagnant wages" (for decades now!), with cuts to tackle the "unsustainability" of welfare and with reduced and flagging consumption "stabilised” by resorting to another worrying increase in public and private debt.

The immutability of capitalism

Take away capitalism’s (frantic) race for gains in productivity, and we lose what would appear to be, according to its apologists, that "dynamic" character which is its distinguishing feature, even when the doors of a menacing state of chaos are already opening! Thus, among all the conditions that could – so they say – counter a devastating tendency both on the economic and social levels, their precise prescription is being pursued; a decrease in wages (for those who still have jobs).

We read that, globally “the ratio of private debt (of households) to net available income rose from 50% in 1980 to 130% in 2007. In 1929 the rate of private debt was 30%.” From 2008 to date, the total debt, including that of financial groups, according to various sources, has increased by almost 50% to reach $250 trillion. It also has to be said that financial powers have been further centralised, expanding their "controls" on international assets. And alongside what is the official banking system with credit functions, the “shadow” one has further extended, contributing in turn to the growth of the “public and private debt economy”.

For those who took seriously the myth of the rise of "emerging countries", which would bring fresh air to a system gasping everywhere, in reality it only momentarily provided oxygen to the excessive power of multinationals engaged in their actual hunt for low wages and the lowest possible raw material costs. This partly explains the increase in the production of goods in the world from 2000 to today; due above all to the "emerging countries" (China and India in the first place) and much less to the "advanced countries". The multinationals were the creators of a process of globalisation that still sees a tangle of power relations, in particular for the control of raw materials (oil, uranium etc.).

The escalation of competition and its coercive laws

The hunt for "extra surplus value" has become a matter of life and death for the bourgeoisie desperately pursuing the self-valorisation of capital, the fetish that everyone adores, sacrificing to it the survival of all humanity, imprisoned in the network of a global debt that is approaching $300 trillion, more than three times global gross domestic product (GDP), and which has constantly increased for years (approximately around 9% p.a., according to data and estimates from the IMF compiled by Visual Capitalist). Global private debt (businesses and consumption) is around $250 trillion, according to the global debit monitor 2018 of the Institute for International Finance, which divided the 2017 debt into dollars thus: $68 trillion (92% of GDP worldwide) for non-financial companies, $63 trillion (87% of global GDP) for the public sector, $58 trillion (80% of global GDP) for the financial sector and $44 trillion (59% of world GDP) for households and individuals.

We are looking at a really widespread financial madness in capitalist society, confirmed by developments in technology based on the use of algorithms in the management of stock market movements worldwide. But for the production of commodities themselves the law (of the tendency of the rate of profit to fall) creates competition on the markets making further technological innovations in order to increase productivity necessary. Therefore the expulsion of labour-power necessarily becomes inevitable (for capital), since the reduction of working hours to a minimum (internationally...), and which should be the "rational" consequence of productivity increases, is clearly impossible for the current world order and its fierce competition in the markets. The dominant relations of production do not allow it. As the rate of profit tends to constantly decrease, the system is destabilised when its own laws of motion are plunged into crisis. Whilst these laws power the development of capitalism, they are also, however, the prime cause of the crisis itself. Only communism – thanks to its technological development of the production of use values (not commodities) – will finally allow us to have more free time which can be devoted to all the best human activities: culture, sport, entertainment.

An almost... humorous note

One academic much admired among many post-Keynesians is Michał Kalecki who explained that maintaining full employment was a political and not "economic" aim. Capitalism, in short, would still benefit from maintaining a large army of unemployed... After which, he treats us to the definition of a Marx who (like Keynes) would have been "a proponent of an internal theory of money", with stabilising functions... And then he begins a revaluation of the "planning question", which he says can only be "theoretically" deepened at the "political" level. All this, without in any way touching on the actual structure of the mode of production...

And so, from time to time, various swindles are put forward which always take causes for effects. These include calls like “we need a radical change of course”, which ends up as a counter-lobby of citizens, civil society and businesses, taking up the slogan of Occupy Wall Street: "We are the 99%"! Or they call for new rules of the game as we have read in the utterances of the many "foolish lackeys" who present themselves as... "antagonists" of the system. It finishes with the proposal for a cultural and information project to demand a change from politicians, or a financial policy that serves the economy and people!

They conclude: workers should be given the "control and management" of capitalism, so that – they do not say it but this would be the "end" to be pursued! – they recognise – for the general good! – the need to contain the fall in the rate of profit. A "fall" which is tormenting capitalism now, and which is slowed down only by resorting to those counter-tendencies that seem to sometimes cancel it for a short period, but then only to provoke an aggravation of the very conditions that caused the fall and reproduce it again. Above all, technological development, which without challenging the capitalist use that is made of it, serves to extract as much of a surplus value as possible from the exploitation of a numerically reduced workforce. In the Grundrisse, Marx wrote:

It is therefore a highly absurd bourgeois assertion that the worker shares with the capitalist, because the latter, with fixed capital (which is, as far as that goes, itself a product of labour, and of alien labour merely appropriated by capital) makes labour easier for him (rather, he robs it of all independence and attractive character, by means of the machine), or makes his labour shorter. Capital employs machinery, rather, only to the extent that it enables the worker to work a larger part of his time for capital, to relate to a larger part of his time as time which does not belong to him, to work longer for another.

Thus, in the capitalist system, technology serves no other purpose than to extract a greater quantity of surplus value; not to lighten the work of the worker. And this is the crisis that is eroding the very foundations of capitalism; within the framework of imperialist divisions and international clashes, relations between states are aggravated by sectoral imbalances, trade wars and financial market speculation.

The social disaster of unemployment

Today there can be little doubt that capitalism has entered an agonising historical phase. In fact, what up until decades ago could be interpreted as the will of the ruling class itself to have an industrial reserve army available in order to be able to exert a blackmailing pressure on the proletariat, has become a real social and economic calamity. The crisis in the process of capital accumulation is obvious even to the blind. But economists, rather than admitting the approach of the historic end of capitalism, go as far as imagining an "economic policy" (never clearly defined) inspired even by Marx, even reaching such conclusions as: discarding the forms of monetary transfer to the workers and removing “choices on the composition and level of production" from "private companies”. Here is the "solution" (defined as "Marxist"!) of the economists of the "bourgeois left": a plan for working with the public sector in a privileged position for "the employment of the labour force" (still as a commodity) necessary to " provide basic goods and services (construction, education, health, transport, infrastructure, energy, etc.)" (still in the form of commodities). Therefore, "restriction of the freedom of movement of capital, nationalisation of key sectors of the economy, close coordination between the Treasury and the Central Bank (in order to reconcile the stability of purchasing power with full employment), and highly progressive taxation of incomes and riches". Here we finally reach the land of Cockaigne(1) with the addition of public, "state", control – of national production of goods and with the hypocritical fiction of "full employment, reduction of social disparities and defence of the ecosystem".

The most "radical" demand is the need to a conquer power (democratically, of course) and the "state machine" to control it "better" and to assure the surplus value that should make the engine work better. That is precisely that valorisation of capital, which – by replacing living labour with increasingly automated machines – is disintegrating into a process that turns inward to strangle the system itself, threatening all of humanity with a descent into the abyss of a really barbaric society.

Internationalist Communist Party [Battaglia Comunista]

Tuesday, October 1, 2019

(1) Translator’s note: Cockaigne or Cockayne is a "land of plenty in medieval myth, an imaginary place of extreme luxury and ease where physical comforts and pleasures are always immediately at hand and where the harshness of medieval peasant life does not exist. Specifically, in poems like The Land of Cockaigne, it is a land of contraries, where all the restrictions of society are defied (abbots beaten by their monks), sexual liberty is open (nuns flipped over to show their bottoms), and food is plentiful (skies that rain cheese). Writing about Cockaigne was commonplace in Goliard verse. It represented both wish fulfilment and resentment at the strictures of asceticism and dearth." en.wikipedia.org