ON THE OCCASION OF THE 50TH ANNIVERSARY OF WORKERS WORLD PARTY
Aspects of the economic crisis and the Obama administration
Published Nov 11, 2009 11:20 AM
The following is excerpted from a document submitted by Workers World
Party secretariat member Fred Goldstein in preparation for the Nov. 14-15 WWP
national conference in New York City.
WWP founder Sam Marcy, second from right,
in front of the U.N. in 1960.
As a starting point to approach the present economic crisis, I would like to
begin with the theoretical framework of Marxism in order to stimulate
discussion of an assessment of the period we are entering. In this regard, it
is appropriate to go back to Karl Marx.
In 1857 Karl Marx, in the Preface to “A Contribution to the Critique of
Political Economy,” wrote a short summary of the evolution of his thought
and then concluded:
“The general result at which I arrived and which, once won, served as the
guiding thread for my studies can be briefly formulated as follows: In the
social production of their life, men enter into definite relations that are
indispensable and independent of their will, relations of production which
correspond to a definite stage of development of their material productive
forces. The sum total of these relations of production constitutes the economic
structure of society, the real foundation, on which rises a legal and political
superstructure and to which correspond definite forms of social consciousness.
The mode of production of material life conditions the social, political and
intellectual life process in general. It is not the consciousness of men that
determines their being, but, on the contrary, their social being that
determines their consciousness. At a certain stage of their development, the
material productive forces of society come in conflict with existing relations
of production, or—what is but a legal expression for the same
thing—with the property relations within which they have been at work
hitherto. From forms of development of the productive forces these relations
turn into their fetters. Then begins an epoch of social revolution. With the
change in the economic foundation the entire immense superstructure is more or
less rapidly transformed.”
Marxists have always included the study of this paragraph as part of learning
the fundamentals of the Marxist historical outlook on revolution. But it is at
rare moments in history that it can be studied, not only as the
forward-looking, long-range world view, but as a matter of imminent
The last time the realization of Marx’s prognosis was on the immediate
agenda with respect to the U.S. was in the 1930s during the Great
Marx’s prognosis and the present crisis
After three decades of ruthless restructuring of the global capitalist economy,
of using the scientific-technological revolution to intensify exploitation to
unheard-of degrees, the economic foundation of capitalism has indeed undergone
a transformation. What is new is that this crisis raises the question of
whether quantity has been turned into quality.
Has the extraordinary degree of the development of the productivity of labor,
the monumental scale of the expulsion of workers from the workplace because of
technology, the de-skilling of jobs across all types of employment, the
creation of the regime of low-wage capitalism—all in order to sweat the
last ounce of profit from the hides of the workers—have these
developments brought capitalist overproduction to a point where the system can
no longer recover from the present downturn?
The tension between socialized production on a world scale and the narrow
confines of private property—in which a tiny handful of billionaires
dispose of vast industrial, commercial and technological empires according to
their profit interests—inevitably leads toward an absolute brake on the
development of society, posing a grave danger to the material existence of the
proletariat and oppressed people as a whole, and to the very planet
Ford’s profits up, workforce down
To go from the general to the particular, one only has to read the glowing
headlines in the bourgeois press about the Ford Motor Company registering a
$997 billion profit in the third quarter of this year.
How did Ford bring itself to this turnaround from billion-dollar losses to a
billion-dollar profit? The fact is that Ford’s revenue declined compared
to a year ago.What made it possible to have declining revenue—declining
sales—and increasing profits at the same time?
Ford laid off 53,000 workers and shut down 15 plants since 2006! It also raised
prices on its higher-end cars, which were bestsellers during the
cash-for-clunkers program. Layoffs and state capitalist intervention made it
It is not only Ford but the entire auto industry that is contracting. And it is
not only the U.S. auto industry that has to contract its capacity. In 2008 the
world auto industry had a capacity to produce 90 million cars and could only
sell 65 million.
What does this mean for the working class and the capitalist system as a whole?
It means that capitalism cannot revive itself by normal economic means. But
capitalism is also facing a situation in which the artificial ways that it has
found to revive itself since World War II—through imperialist war and
corporate expansion, military spending, government funding of the banks and
corporations, lowering wages and increasing surplus value—have run out of
The ruling class cannot look forward to any of these methods of plunder to
sustain profitability and at the same time keep the system going in an upward,
expansionary direction. The two things—profitability, which is the
lifeblood of capital, and economic growth, which is the way the proletariat
survives under capitalism—are becoming irreconcilably opposed to one
Obama administration and the period
Because of the long delay in the working class and the oppressed entering the
arena of struggle, the relationship of class forces is highly favorable to the
Because of this, the bourgeoisie takes advantage of every political struggle to
gain further advantage over the working class. Every debate that affects the
workers is decided for the moment by the unfavorable relationship of class
The top bankers who presided over the economic collapse have used the crisis
they profited from to enhance their economic power in the capitalist state and
the concentration of ownership.
The health care insurance companies and the pharmaceutical companies have
manipulated the struggle for health care reform, which was supposed to aid the
working masses and the middle class, to enrich themselves even further and gain
millions of forced customers.
The environmental polluters are using the debate over environmental legislation
to further undermine any international agreements to limit their profits by
imposing carbon-reduction goals.
The military has used its own crisis in Afghanistan to extend its influence and
to push toward a greater adventure. The torturers in the Pentagon and the CIA
have been protected, and the advocates of arbitrary and indefinite imprisonment
have won the day.
Why is this? It is because the working class and the political movement have
yet to awaken.
This is the root cause of the course that the Obama administration has pursued
of compromising and conciliating with reaction on so many issues.
The state and the national question
Our party has conducted itself commendably in relation to the Obama
presidential run and to his administration. We have used the theory and
politics taught us by the founders of the party—we have used their
analysis of the state, the national question and parliamentarism.
We have dealt with Obama with extreme sensitivity to the African-American
community, on the one hand. But we knew from day one that once he became the
head of the capitalist state, he would be surrounded by the Pentagon generals,
the CIA cutthroats, the FBI and the entire capitalist state apparatus—the
armed bodies that exist for the suppression of the working class and the
And we knew that he would be surrounded and engulfed by the bosses and bankers
and all their thousands of lobbyists, influence peddlers and organizations.
While we knew that the masses would have illusions, we had none.
But we are now living through the period of his presidency. The great
contradiction is now playing out. Great expectations were understandably raised
by the exhilarating and historically progressive achievement of the election of
the first African-American president.
Now there is the beginning of the inevitable disillusionment based upon the
equally inevitable failure of the Obama administration to live up to those
Some will attribute this to Obama’s tendency toward centrism and
compromise. And there may be much to that. But of far greater weight than his
natural political inclinations is the present unfavorable relationship of class
forces alluded to above.
To this is added the major factor that he is an African American, with no base
whatsoever in the ruling class, and highly vulnerable to racist attack at any
given moment, should he choose to step out of line. The case of his mild
defense of Harvard Professor Henry Louis Gates Jr. against racial profiling,
for which he was soundly castigated by the capitalist media machine, is a case
in point. It is ironic that Obama is the chief executive of a racist state and
himself subject to racist attack.
Obama was chosen as a candidate during the period of capitalist boom. The
expectations of reform were based on expanding profits and revenues. By the
time he took office, the financial system had collapsed on a global scale. All
his calculations, and the calculations of his bourgeois backers, about reform
had to be readjusted based on the crisis. The money for the down payment meant
for health care reform went to bail out the banks.
From the point of view purely of the rhythm of economics and politics,
Obama’s position is highly unfavorable—and this is a situation that
the party has to continue to navigate with care, while commencing the struggle.
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