NATIONAL CONFERENCE: DOWN WITH CAPITALISM, FIGHT FOR WOLD SOCIALISM!
System of exploitation reaches an impasse
Published Nov 18, 2010 9:33 PM
WW photo: G. Dunkel
Following are excerpts from the Nov. 13 talk at the Workers World
Party national conference by Fred Goldstein based upon a pre-conference
document entitled “The Capitalist Crisis.” Excerpts of the document
were published in the last two issues of Workers World; the entire document is
available at www.workersworld.net. Goldstein is a member of the Secretariat of
Workers World Party and the author of the book “Low-Wage Capitalism.”
We study the capitalist crisis not as an academic matter, but as a way of
sharpening our revolutionary perspective in the struggle to overthrow
capitalism and fight for a socialist future. From that point of view we see
that this is a rare moment in history, a moment at which a world historic
social system, the capitalist system, has reached an impasse and cannot go
forward. It is moving in the direction of dragging humanity down.
One of the most important features of the present crisis is the fact that the
capitalist state has become the principal prop of the system. It is an
admission that the so-called “free market” system can no longer
work on its own.
This was demonstrated dramatically the day after the elections when the Federal
Reserve Board announced to the world that it was going to pump $600 billion
more into the banks and to financiers in the hope that it would create wealth
and more jobs. This is on top of $10.6 trillion already put into the system.
Ben Bernanke, the head of the Federal Reserve, openly stated that economic
growth was anemic and could not deal with the unemployment crisis. Bernanke
also said that if $600 billion were not enough, the Federal Reserve would put
It is important to know, in order to understand the crisis at the G-20 meeting
in Seoul, South Korea, this week, that this money was entirely printed money.
The Fed created this money out of nothing. It is not putting in money that it
has. It is putting in money that it is creating. The Federal Reserve
“buys” a five- or 10-year bond from some banker by creating an
account in a Federal Reserve Bank for the rich to draw on when they want and
for what they want. This will inevitably debase the dollar as a world
But, most importantly, the financial authorities do not have even the slightest
evidence that this new infusion of money will work. In fact, the deep
reluctance of the capitalists to borrow for investment purposes and job
creation indicates that it will not work.
Instead of pouring $600 billion into a federal jobs program for workers, who
desperately need jobs and who can actually create real wealth and value, not
fictional paper value, the Federal Reserve is pouring it into the accounts of
bankers and other billionaire investors. This is the capitalists’
approach to the crisis — that is, to enrich themselves.
And the greatest sign that U.S. capitalism is moving backwards, and dragging
the workers and oppressed with it, is the new deficit commission. It should be
called the “capitalist commission to soak the masses and save the
Its mission completely verifies our analysis that capitalism is at an impasse
and headed toward deeper crisis. The document put forward the other day by the
two commission co-chairs will probably change drastically in its details over
time. But what it signifies is that the ruling class is reacting to the crisis
by getting ready to impose an austerity program on the workers and the
The original proposal seeks to cut the deficit by $4 trillion through cutbacks
to Social Security benefits, raising the retirement age to 69, cutting back on
Medicaid, cutting social spending, changing the tax structure to lower
corporate taxes and income taxes on the rich, and many other methods. Their
crisis is so severe that they have even proposed cuts in the military.
The deficit commission is the result of the bailouts. The financial crisis is
not because of Social Security or Medicaid. It is because of all the money that
has been spent to support the banks, to buy toxic mortgages, to bail out the
auto industry, to bail out AIG and other financial parasites. It is because the
bosses have laid off millions of workers across the country and the government
tax revenue is decreasing as the economy goes down.
The deficit is the result of the capitalist state absorbing the crisis of the
bankers and the bosses into itself. It is a capitalist crisis commission that
seeks to unload the crisis upon the masses by drastic cutbacks of gains won
over the last hundred years.
Consider that the U.S. is the richest, most powerful country in the world, with
the largest economy, the highest technology, the biggest businesses. Yet the
ruling class, by ordering an austerity program, is admitting that it is facing
a dire future and cannot grow out of this crisis on its own.
During and after World War II, the U.S. government had a deficit far greater
than the present U.S. deficit — well over 100 percent of the gross
domestic product. But U.S. capitalism was expanding as a world imperialist
power, and it paid down its debt in a few years after the war. Today, the
opposite is the case. The future is grim for the industrialists and the
financiers on Wall Street.
I would like to touch on the G-20 disaster suffered by the Obama administration
and U.S. capitalism in Seoul. The U.S. delegation came to tell the Chinese to
devalue their currency; they came to tell the Chinese and the German, Japanese,
Brazilian and other capitalists to cut down on the exports and let U.S.
commodities flood their markets. And they came to force south Korea to sign a
trade pact that would open up south Korea to U.S. auto companies. Washington
was rebuffed on all issues.
The most important thing for the workers to take away from this crisis at the
G-20 is that all the capitalist ruling classes are in a desperate state to
increase their exports. Why is that? It’s because they cannot sell their
commodities at home. They are all suffering from capitalist overproduction and
seek to export their way out of their own economic crises. This is a deep
symptom of the global nature of the present capitalist crisis.
It is bound to open revolutionary possibilities just the way it did during the
1930s, when the working class fought under the slogan, “Don’t
starve, fight!” But it is going to require a revolutionary Marxist party
to assist the workers on the only path that can lead out of this crisis —
the socialist revolution.
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