Critical Times

US, global and Australian economies are threatened with meltdown.
Share prices tumble, real estate values fall, economic activity starts drying up, businesses wind back, cost of living goes up and workers are thrown on the scrap heap. Industrial production is winding down.

Banks, rather than lubricating circulation have become a barrier to it, freezing economic activity.

Recession has arrived. Job losses and hardship for the working class and the people are accelerating across America, Europe, and now in Australia. Exploitation and oppression of the people in semi-colonial countries intensifies. Depression looms.

The people are calling for an immediate guarantee of jobs, savings, decent living wages, housing and access to education, healthcare and social services.

Inevitability of this Crisis
The crisis is not, as Kevin Rudd would have us believe, one caused by “extreme capitalism”. It comes as a result of the normal functions of capitalism being played out in the world economy.

The basis of the capitalist mode of production is private ownership of the means of production and exploitation of workers.

Profits exploited from workers are invested in machinery that, in turn, displaces workers and intensifies exploitation.

Economic rationalism and imperialist globalisation became a theoretical and practical framework to intensify the exploitation of workers, accelerating restructuring of world economies to benefit a few imperialist nations and a handful of corporations, displaced huge number of workers and further intensified exploitation and oppression of people around the world. Extraordinary profits created by the labour of workers, but owned by a handful of giant monopolies, paralleled a decline in workers wages. Monopoly capital’s record profits rapidly went into expansion of production for the creation of bigger private profit, while wages were left behind. With wages stagnating, so too did consumption. Overproduction set in.

Capitalism has become, as Lenin said, decadent and moribund, a brake on further development of the productive forces.

The profit share of Australia’s economy hit a record high of 27.8 percent, while the portion going to people dropped to a 42 year low of 53.2 percent, according to September’s National Accounts.

To bring consumption within cooee of production, a tsunami of credit was unleashed.

Some repayments could, inevitably, not be made. Defaults in US housing markets triggered a credit and then wider crisis, bringing in its train recession and insolvencies. The system ground to a halt. The financial crisis has exacerbated stagnation that existed in the US economy, which has since spread worldwide.

Propping up Capital
As they face the precipice, billionaire investors and corporate heads call for government intervention to save them. Governments responded by guaranteeing personal savings, and interbank loans, nationalising banks and easing the way for takeovers, increasing monopolisation.

The British government led the way, nationalising Northern Rock, followed by the US administration partially nationalising Freddie Mac and Fannie Mae. Governments from Iceland to Germany are now in the business of nationalisation, financial re-regulation, guarantees and de-regulation of takeovers.

Solution is Social Ownership
Monopoly capital called on the state to get involved in operating failing enterprises on behalf of society. A marvellous example of how private ownership of capital is superfluous and obsolete. The social functions of capitalists as owners of productive forces are now performed by salaried employees.

Nationalisation reflects the necessity of social ownership for the productive forces to be able to develop for the benefit of the people. (See article in Marxism Today, “Class Struggle and Nationalisation” page 6). The call for genuine nationalisation for the people, and not to save capitalists, deepens mass consciousness on the inevitability, and necessity, for social ownership of the means of production.

Nationalisation is a precursor, revealing the necessity, not just the desirability of socialism. The solution to the contradictions inherent in the capitalist mode of production is socialist revolution. The working class seizes power and transforms the social means of production into public ownership. This frees the means of production from their character as capital, and gives their social character complete freedom to assert itself. Social production to meet social need becomes possible. This crisis points to its necessity.

Make the rich pay
The crisis gathers oppressed people and nations up against the imperialist powers.

Contradictions are intensifying between countries that want independence and the imperialist powers; amongst imperialist powers; between the working class and the monopoly bourgeoisie in the imperialist countries and between the monopoly bourgeoisie and people in developed countries.

Struggles for national independence, national liberation and socialism will grow in the coming period, taking advantage of the weaknesses of imperialism. The impending crisis has already compelled people to make huge advances in Nepal, Venezuela and other Latin American countries.

As ever, the danger of inter imperialist wars looms. Invariably, economic crisis and imperialist wars are met with resistance and struggle by the people. No amount of force by the bourgeois state can suppress the emerging mass movements, organisations and struggles of the people across the world.

National independence
The failure of imperialism propels Australia towards national independence from US and other foreign imperialisms.

The crisis reveals the necessity of society taking control of the productive forces, particularly the pillars of the domestic economy in banking and finance, resource industries, infrastructure, mineral processing, metal and major manufacturing industries, and using them for the people.

Australia’s domestic economy must be made a system with social ownership at its core, for natural resources and people’s labour to serve the needs of the people and preserve the environment. It can be more self reliant, an economy with an independent, sustainable manufacturing industry.

Internationally, the crisis calls for capitalist dog-eat-dog competition between countries and corporations to give way to relations of cooperation, mutual benefit and solidarity between peoples, rejecting unequal trade and investment deals, so people the world over can look forward to security and peace.

In the first place, people demand guarantees of jobs, savings, decent living wages and conditions, housing and access to education and healthcare services. It must be backed by nationalisation of the banks to put the wealth of society to use for the good of society, not to generate profit for a few.