The global capitalist crisis (part VII) The global crisis and Marxism The following article was published in "The Guardian", newspaper of the Communist Party of Australia in its issue of Wednesday, December 16th, 1998. Contact address: 65 Campbell Street, Surry Hills. Sydney. 2010 Australia. Fax: (612) 9281 5795. Email: <[EMAIL PROTECTED]> Webpage: http://www.peg.apc.org/~guardian Subscription rates on request. ****************************** By Anna Pha One of the common criticisms of Marxism by its opponents is that a theory developed 150 years ago is out of date and irrelevant. In the years since Karl Marx and Frederick Engels wrote the "Communist Manifesto", capitalism has certainly undergone many changes but it remains capitalism none-the-less. The present world-wide crisis shows that capitalism is incapable of resolving its problems. Some aspects raised in this series of articles include: * the growth of monopolies into TNCs, * the predominance of finance capital over industrial capital, * financial speculation, * the intensified exploitation of workers, * a crisis of overproduction, * the pauperisation of millions of people. Accumulation of capital In the present conditions, who could doubt the basic law of capitalism as enunciated by Marx: "The directing motive, the end aim of capitalist production, is to extract the greatest possible amount of surplus value, and consequently to exploit labour power to the greatest possible extent." (Marx K. "Capital", Progress Publishers, Vol I, p 313) The annual reports of companies reveal the record profits and rapid accumulation of capital, particularly by the largest corporations and big banks. The assets (that is, the accumulated capital) of the top 1,000 companies in Australia have more than doubled from $932 billion in 1993 to $2,151 billion in 1998. (IBIS, "Business Review Weekly", "The Top 1000'', Oct 22, 1998) This was achieved by increasing the rate of exploitation of workers -- the attacks on wages and conditions, use of contract and casual labour, unpaid overtime, longer working hours, mass sackings, speed-up and the use of new technology. The periodical crises of overproduction as predicted by Marx have continued irrespective of the different governments and theories Šimplemented. Governments and capitalist apologists have never let up trying to find ways of smoothing out the cycle or softening the landings. After the big crash and Great Depression of the 1930s, Keynesian economics came to the fore, advocating some state intervention and regulation to stabilise and stimulate the economy during times of crisis. But Keynesian theories did nothing to remove the basic profit-making purpose of capital and the exploitation of the working people. >From free competition to monopoly The relatively unregulated, small scale enterprises of the 19th Century gradually gave way to the development of monopolies. "Competition becomes transformed into monopoly", said Lenin. ("Imperialism, the Highest Stage of Capitalism", Lenin "Collected Works" Vol 22 p 205) "This transformation of competition into monopoly is one of the most important -- if not the most important phenomena of modern capitalist economy..." (ibid, p 197) Today's transnational corporations (TNCs) grew out of these big monopoly concerns as they spread their activities, not just trading in goods but making capital investments and loans around the world. "Typical of the old capitalism, when free competition held undivided sway, was the exports of "goods". Typical of the latest stage of capitalism, when monopolies rule, is the export of "capital"." (Ibid p 240) Domination of finance capital The monopolisation process applies equally to the banks and other financial institutions. The banks "collect all kinds of money revenues and place them at the disposal of the capitalist class", wrote Lenin. "As banking develops and becomes concentrated in a small number of establishments, the banks grow from modest middlemen into powerful monopolies having at their command almost the whole of the money capital of all the capitalists and small businessmen and also the larger part of the means of production and sources of raw material in any one country and in a number of countries." (Ibid p.210) In Australia four big banks and two insurance companies dominate the market. The financial institutions hold the top controlling shareholdings of almost all of the top 50 corporations. They control industrial capital. Š"The 'business operations' of capitalist monopolies inevitably lead to the domination of a financial oligarchy". (Ibid p 226) The banks did not create one cent of the wealth that they have accumulated from interest, gambling and, more recently, fees and business "services". Their riches are appropriated from the wealth created by workers. The surplus value (gross profit) of the top 100 companies in Australia last year was around $80 billion. The banks pocketed $42 billion -- around half -- as interest. Only $11 billion was paid in taxes. The banks also directly extract billions more from workers' pockets with their 15 per cent or so interest on the $5 billion credit card debts and the interest on the $100 billion of housing loans by the banks. (They pay interest as low as 0.01 per cent on workers' savings.) Globally, around 10 financial institutions are dominant but the mergers and takeovers continue. The recent merger of Deutsche Bank and Bankers Trust is the latest example. Imperialism Lenin listed five features of imperialism: "1. the concentration of production and capital has developed to such a high stage that it has created monopolies which play a decisive role in economic life; 2. the merging of bank capital with industrial capital, and the creation, of the basis of this 'finance capital', of a financial oligarchy; 3. the export of capital as distinguished from the export of commodities acquires exceptional importance; 4. the formation of international monopolist capitalist associations which share the world among themselves; and 5. the territorial division of the whole world among the biggest capitalist powers is completed. "Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capital is established..." (Ibid p 266) Lenin wrote "Imperialism, the Highest Stage of Capitalism" in 1916 but its conclusions remain strikingly relevant today. Parasitism ŠLenin also emphasised the parasitism and decay of capitalism, characteristic of monopoly. He pointed to the rentiers, the people who live by "clipping coupons", who take no part in production and "whose profession is idleness". Their parasitism has reached new heights with the gambling on stock markets and speculative trading in currencies, futures, options and other derivatives. The hedge funds have taken parasitism and decay almost beyond the realms of imagination. State monopoly capitalism The emergence of state monopoly capitalism during the 20th Century saw the merging of the state and capital. "The `personal link-up' between the banks and industry is supplemented by the personal link-up' between both of them and the government." (Lenin Ibid p 221). In the period following the Second World War the state has played a considerable role in assisting monopoly capital. It gives direct financial assistance, legislates tax exemptions, imposes discriminatory tax systems, subsidises the supply of gas and electricity, provides lucrative contracts for infrastructure and for military hardware, etc. It helps the capitalist class exploit the labour of workers by restraining wages and working conditions and implements legislation to penalise trade union struggles. For a certain period and under pressure from the gains made by workers in socialist countries and by the workers' struggles in the capitalist countries, the capitalist state was seen to have a responsibility for people's welfare. Hence, the "welfare state" with its aged pension, public education system, health services, public housing, etc. This period has now come to an end. Globalisation The steady growth of monopolies led inevitably to the emergence of transnational corporations (TNCs) and the demands of the TNCs led to the replacement of Keynesian economics by "economic rationalism" or "neoliberalism". The new agenda involved the sweeping away of all the controls constructed in the Keynesian period (deregulation), the privatisation of all public enterprises and withdrawal of the state from anything that could be done by the private sector. The "welfare state", so we are told, is no longer affordable and has to be disposed of. In order to sweeten the bitter pill of capitalism and to obscure the real control of the TNCs, theories of convergence and "common interests" between capital and labour are advanced. Ideas about a "people's capitalism" are propagated to encourage workers to Šbecome shareholders. This is also a means of making workers' savings available for use by the monopolies and banks. However, none of these developments alters the basic fact that the production of goods and services is achieved by the collective labour of millions of workers while what they produce and the proceeds of services goes into the pockets of the owners of the means of production. Today, economic rationalism and the directives of the IMF (which is one of those capitalist "associations" that Lenin mentioned) are moving in the direction of the naked and direct dictatorship of capital by the TNCs. Sovereignty paramount In the East Asian crisis the IMF steadfastly rejected the wishes of the governments wishing to establish controls over the private sector although none of the governments had any thought of doing away with the capitalist system. The IMF forced these governments to leave it to the "markets" with devastating consequences. "... the struggle of the great powers for the economic and political division of the world, gives rise to a number of "transitional" forms of state dependence ... countries which, politically, are formally independent, but in fact, are enmeshed in the net of financial and diplomatic dependence..." (Lenin Ibid p 263) Apart from the economic devastation they cause, the IMF, the World Bank and the World Trade Organisation in particular, deny the people of many countries the right to determine their own affairs through elected governments or other means. How far? Under the conditions of TNC domination the effects are becoming more extreme and on a global basis. Mass unemployment and impoverishment face the working people of many countries. Working conditions and rights are deteriorating rapidly. How far will this process be allowed to go? Resistance is growing around the world with strike struggles, demonstrations, the emergence of powerful people's organisations campaigning for progressive policies. Capitalism's political and economic instability is convincing more people that this system does not work for them. The internationalisation of economic relations will continue, the question is who will control the changes and who will benefit. The international solidarity and co-ordination of struggles becomes more imperative than ever and the defeat of the MAI shows what can be achieved by the unity of progressive forces on a worldwide basis. These struggles are building a broad alliance of social and political forces. Š At the same time the question of winning working class power becomes more urgent, which demands that communist, trade union and other working class organisations be strengthened. More and more people are searching for an alternative, it is up to the communists to show there is an alternative that puts people first. It is called socialism. end ============== Leftlink - Australia's Broad Left Mailing List As vilified, slandered and attacked by One Nation mailto:[EMAIL PROTECTED] http://www.alexia.net.au/~www/mhutton/index.html Sponsored by Melbourne's New International Bookshop Subscribe: mailto:[EMAIL PROTECTED]?Body=subscribe%20leftlink Unsubscribe: mailto:[EMAIL PROTECTED]?Body=unsubscribe%20leftlink
