Symptom of capitalist decay
Aug. 25 — If anything dramatically shows the irrationality of the capitalist economic system, it is a financial market crash. This happens after a period of euphoria in the markets has driven prices to all-time highs and huge sums of money have been changing hands — in these days, usually electronically.
Then comes the day of reckoning. What had seemed solid wealth the day before suddenly turns into red ink. This is what began happening in the third week of August to markets around the world.
At such times, only those with deep pockets can stay in the “game” and hold on to their investments, hoping for a renewed surge upward. If the billionaires are able to buy when prices have plunged and others are bankrupt, they stand to make a real “killing” on the market — if it goes back up at some point.
By Monday, Aug. 24, some estimates put the losses worldwide at a total of $10 trillion. That’s a thousand, times another thousand, times another thousand, times a thousand again, times 10. $10,000,000,000,000 — just to put things in perspective.
How can $10 trillion of wealth be “lost”? Or did it ever really exist?
Presumably, this $10 trillion figure vaguely represents the value of real commodities — coal, steel, vehicles, food, shelter, aircraft carriers, gasoline — that would have been produced for sale at some future time, if the process of capitalist production and accumulation had continued on an upward course.
That so much can be “lost” so quickly shows the precarious nature of capitalism. It illustrates in the starkest way how the profit system runs counter to any rational planning of human economic activity in this high-tech era — when the gulf between rich and poor, between social classes and between whole countries, only widens even as productivity leaps ahead.
As this is being written, the media and many economic pundits are trying to talk up the market, emphasizing its partial rebound from record lows just yesterday. No one in the media wants to predict gloom and doom, knowing they could be held responsible for causing a panic and another plunge downward.
The blame game
Anyway, the blame gamers have already picked their target. Almost all the propaganda organs of the imperialist ruling classes have fingered who is responsible: China. China’s stock market, after a big rise in prices based on hopes of future economic expansion equal to its phenomenal growth of the last decade, took a dive starting in the middle of June, according to the Shanghai Composite Index.
There was general agreement then that Chinese stocks, especially in real estate, were overpriced, and the decline was considered a “correction.” But now the U.S. financial writers are beginning to describe the continued fall of Chinese stocks as a “plague” that has somehow infected Western markets. The assumption here is that the underlying economic conditions in the Western imperialist countries were healthy before this Chinese pathogen infiltrated markets across the globe.
Give us a break.
What’s healthy about workers’ wages in the U.S. buying less today than they did in 1967? What’s healthy about the economy of a country where a cop can arrest and kill a Black man for the survival “crime” of selling single cigarettes on the street? As happened to Eric Garner in Staten Island, N.Y. What’s healthy about a parent having to work two part-time, low-wage jobs just to feed her kids?
And speaking of wages, let’s not average in those chosen few corporate executives who manage the criminal acts of this dog-eat-dog system and get ever so nicely rewarded with “salaries” in the millions.
Stocks crash, rise and crash again
Capitalist stock market crashes are nothing new. China was an impoverished, semi-feudal, landlord-ridden country when the first big market collapses began jerking people around in Europe and the U.S. in the 19th century. China was still in that condition when the 1929 global market crash happened in the West, leading to a decade of extreme poverty for the workers — the Great Depression.
Since then there have been market crashes every seven or eight years. Some investors have gained, more have lost. But an interesting thing happened with the 2008-09 crash. There has never been a real capitalist “recovery” since then.
Unemployment has remained high, even in the developed capitalist countries — especially in Europe, but also in the U.S. Millions of workers here have just given up on finding a job, and millions more are still trying to get into the job market for the first time.
Workers are overburdened with debt that becomes increasingly unpayable. Home mortgages, car mortgages, credit card debt, student loans — they are now seen as the next bubbles to burst.
When the super-rich do relax their tight grip on their money and invest in production, it is likely a super-automated plant that costs billions and will employ at most a few hundred workers.
This is what capitalism has brought us to, and there is no easy way out.
Tear the system down!
All the glorious expectations created by the enormous scientific and technological breakthroughs of the last century and a half boil down to this: The rich have gotten unspeakably richer, the poor are getting poorer while being beaten down by cops and wars, and the environment, the planet we live on, is being wrecked by an economic system based on greed and exploitation.
That is not China’s fault. Hopefully, the lessons of this market collapse will spur on those in China who want to reorient their development plans away from using the capitalist market to stimulate the economy. It is a stimulant that can become a depressant only too quickly. And it also breaks down the solidarity of the masses — which made China’s transformation possible in the first place.
China didn’t cause this crisis. On the contrary, it was the success of China’s amazingly rapid development over the last few decades that kept the capitalist economies in the rest of the world afloat. They flocked to China to exploit cheap labor and stayed because of the rapidly expanding modern infrastructure and the availability of millions of educated, skilled young workers. But those things came from China’s ability to plan its development — the product of its socialist revolution.
Now it looks like the temporary boost that China’s growth gave to Western capitalism after the crash of 2008 wasn’t enough to keep this system going. All the laws of social development say that it is time to organize and fight here for a thorough overturn of the system — from the bottom up.