Critical Times

Politics is the strife of interests. It masquerades as contrast between principles and different means of conducting public affairs. The key issue in all politics is whom does the system serve? Under capitalism it is always the greedy corporate class and their private interests. The millionaire is always advantaged not the working man and woman.

Recently some neo-liberal elements of the media and intellectual class have shown genuine alarm at the steady erosion of ‘civil rights’ in our western ‘democratic’ societies. They raise a chorus of discord about the ‘new’ powers of arbitrary arrest and detention given to security forces under the guise of ‘Anti-Terrorist’ laws. Unfortunately this process is just the beginning of an erosion of personal liberty caused by the general crisis in the world economy.

The passing of repressive legislation like the Patriot’s Act in the US, and equivalent laws in Britain, Oz and other ‘western’ nations is no accident—it is a calculated political design due to the need to maintain order in a collapsing social system. This process of economic collapse has happened before in history and will happen again.

The experience of social crisis is basic to an economic system that accumulates wealth in a certain way. The economic mechanism that drives the ‘western’ process of wealth accumulation is based on profit. This process develops as follows.

The factor called ‘profit’ is actually a material surplus gained from the exploitation of labour. It occurs through the manipulation of the conditions of work in three basic ways: i. replacing people by machines; ii. increasing hours of work; iii. reducing rates of pay. These act to drive down the price of wages. To mask this exploitation three great lies dominate the media and education system —: i. profit is the result of individual enterprise or genius; ii. markets are always perfect and not monopolized; iii. economic growth is infinite in a finite world.

Profit actually comes from the difference between what labour power is worth and what one is paid for it. The boss always pays less than the true value of the labour he employs; pocketing the difference as his cut. Hence the worker is always robbed. This social system makes inequality and class stratification inevitable. Society is divided between rich and poor. The justification for social inequality is justified by the endlessly repeated lie that human beings are greedy. That selfishness is the only incentive in society. That greed is ‘efficient’ and ‘universal’ because it is based on ‘human-nature.’ These are only ideological assertions. Many cultures in history have thrived on very different social values. Such cultures are always destroyed by an invasive imperialism of genocide. (e.g., Bantu, Indian, Aztec, Inca and Aboriginal culture)

We are told by existing power elites that cultures based on greed are ‘natural’ and ‘stable.’ The reality is different: profit can only be maximised at the point of labour. The problem is how to maximise social consumption (markets) while paying workers less and less for their productive labour. Workers are the major consumers of goods by volume. The endless drive for profit forces wages down, making them too low to sustain effective demand. This destroys consumption and halts economic expansion. An economic crisis results due to over production and under consumption. This destroys the market, drives down stocks, shares and land values. Eventually money value is affected, becomes unstable, causing deflation or inflation (or both), dependent on money supply and debt level. Thus we have an endless ‘business cycle’ of boom and bust!

As the time comes when the loss of consumption destroys the market how can the crisis be contained? Banks contain crisis in two ways. i. the creation of false credit (live now pay later) ii. the ruthless imperial expansion into other markets at the expense of other peoples (foreign wars). The former strategy postpones the inevitable economic crisis, the latter, incites conflict with other nations—turf wars between conflicting interest groups!

This then is the root of wars… not the personality of ‘crazy’ individuals like they teach us all at school!

Real world history is like this. The first modern economic crisis made war in 1756 between England and France. For seven years they fought for North America and India; seeking empire to stimulate home markets and gain cheap sources of raw materials and labour. The result was bankruptcy of both nations. England tried to make its American colonies pay the war debt through taxes, causing the American Revolution. The French ignored their debt, creating a prolonged depression, starvation and eventually the French Revolution. Thus history is economically determined. Individuals are just players… actors in the human drama.

The next great crisis of capital developed after the French and American revolutions. As ideas follow economic conditions, social discontent and ideas about human rights grew as people experienced new extremes of wealth and destitution. America gradually formed new economic structures… now called the ‘mixed economy’. Benjamin Franklin framed this model with idealist views of the ‘rule of law’; belief in a ‘political executive’ that stands ‘above’ and ‘distinct’ from the economy it serves. This mental nonsense is called ‘liberalism’ and is still taught in Universities today! Thus our social institutions (laws, culture, values, etc) justify and explain the existing order of the economic/political elite. It is obvious that ideas in life stem from our social conditions… they do not arise ready made from latent individual ‘genius’. Before people can think abstractly… they first must eat, be clothed and have shelter! This means pre-existing society pre-conditions the values people experience as their own.

After 1794 rivalry began between powerful Dutch-British capital, linked to the old aristocracy, and the new economic order forged by the French and American revolutions. War followed…America and France on one side and a union of Ancient Regimes on the other. These conflicts are now called the Napoleonic wars. Millions died over a fifteen year period.

The third great crisis of capitalism was caused by the great depression of 1890. By then the world was divided into European ‘spheres of influence’. The endless jockeying for power between nations damaged world trade. International tariffs rose to protect national markets from competition. This stifled growth, stagnated trade and initiated depression. To get out of the depression large nations gave their capitalists credit to start an arms race. This made a short term boom that lasted for twenty years. In 1914 imperial tensions between great powers caused World War I.

After the war and 65 million dead there was a boom…the roaring twenties. The greedy ‘winners’ forced the ‘losers’ to pay the cost of the war… to avoid the effect of their own huge war debts. This was impossible and in 1929 another market crash resulted. So! How to get out of the new depression? Yep… you got it! Credit was given to spend on armaments… another arms race! Result? WWII! Another 75 million dead!

The situation today: From the two great wars of the twentieth century a third force emerged on the political front—a class-conscious and organized labour force. To crush this ‘aberration’ the international capital class united in open class warfare. The socialist upsurge was stopped and kept within national boundaries, first in Russia, then in China. It was not until scientific socialism that capitalism was seriously challenged.

Before then, when economic chaos threatened, the international bankers and industrialists merely beat the nationalist drum and sent their unemployed off to war. It did not matter who won or lost as the international economic elite still ran the world. The great industrialists and financiers made money from both sides! Only politicians and figureheads of the ‘losing’ side were replaced as behind the scenes, the same elites continued to rule. (e.g., the company that once made the Zero warplane now dominates the Aussie car market! Why then the war?)

Thus prolonged economic collapse causes the disintegration of the body politic. It throws rabid actors onto the human stage who represent various conflicting class interests. Certain actors in the late 19th and early 20th centuries formulated political structures to save capitalism from collapse. George Sorel founded the theory of the ‘corporate’ or fascist state. This ideology was designed to save capitalism from revolution and socialism. Indeed some fascist states posed as socialist! They claimed to forge a homogenous society comprised of organized labour (militarised) big government and big capital. All classes were forced to work together in the so-called national (militarist) interest.

Contrary to popular myth, Fascism is not always a single party state. Hitler and Mussolini, not to mention Franco or Pinochet, controlled multi party states. Minority parties exist under fascism… so long as they all espouse exactly the same values and ideas. A choice between the same and more of the same… like America, Britain or Australia; where every few years… people can choose who can best serve corporate ‘free enterprise’… and… corporate free enterprise! The open rule by such corporate interests without multi-party limitation, ‘democratic’ laws or trappings, characterise ‘open’ fascism. Sound familiar? Yep, a form of fascism already exists here!

What are the signs and conditions for this type of culture? i. growing civil unrest; ii. declining economy; iii. vast wealth difference; iv. growing international rivalry; v. class or racial conflict; vi. unifying social myth of social chauvinism; vii. patriotic militarism; viii. glorification of war.

All these conditions now exist. This explains the changes in ‘work practice’ laws, the erosion of the welfare state, the privatisation of public utilities, the current racially motivated violence in western nations. When people are afraid they allow Big Brother to take away their personal liberty!

The current economic crisis: The USA is bankrupt and has been since the great crash of 1987. World capital simply ignored the fact and continued to accept worthless American dollars in exchange for goods and raw materials. The US abandoned Bretton Woods’s gold standard of $35 an ounce after 1970. America then moved from Roosevelt’s ‘New Deal’ mixed economy to the current British-Dutch lassie-faire system, renamed by Milton Friedman, as the ‘market economy’. A consequence of this and a sign of the worthless dollar is the price of gold, now $556 an ounce. Likewise the price of oil has increased $400% since 1971. America’s national debt now tops 8-12 trillion dollars and is growing astronomically. Just to function, usurers lend the US Fed $2.5 billion a day—365 times a year! In 2004 US revenue was $1,862 trillion; expenditure was $2,338 trillion. The difference in one year being $0.476trillion deficit!

The only thing that underpins America’s economy is the continued linkage of its dollar value to the price of oil, the so-called petro-dollar. This means that the $US is accepted as trade currency for a barrel of oil. China has now amassed $800 billion, more $US than Japan, but unlike Japan, provides America with over 48% of all its manufactured goods. Without this America would sink. America lives way beyond its means, consuming 66% of the world’s energy and resources, with only 6% of its population. It is the most profligate empire in history. China is now diversifying its dollar holdings. It is buying gold and using its $’s to amass raw material sources and tangible assets (like mines and real estate) around the world, particularly in Asia, Africa and Latin America. Thus America is sitting on an inflationary time bomb as its currency is basically worthless.

The military danger: America invaded Iraq for its oil. This is to ensure it controls the Middle East supply, thereby shoring up its tottering petro-dollar. So long as other nations keep accepting its worthless currency America’s economy will stagger on. As soon as a major holder unloads its $ reserves it will crash. China, Japan or Saudi Arabia could facilitate this at any time. America is losing the war in Iraq… and like Hitler, President Bush rides the Tiger. He has to go further just to maintain what he has already taken; or lose the lot.

An attack on Iran is certain and very soon for in March Iran opens an ‘Oil Bursar’ that will only trade oil for Euros. This is the reason for the troop reduction in Iraq… to prepare for Iran. This strike will involve mainly British, American, Jewish, Australian and Turkish troops, setting the Middle East ablaze. Russia, China, India and Brazil have formed an alliance.

They will not allow America to control all of the Middle East (and Caucasus) oil reserves. The stage is set for the next and final conflict in the sorry history of world capitalism. The situation is very similar to that of 1914, when socialism was abandoned by social democratic parties, and a huge war wrecked the world economy destroying a generation of young men.

History repeats itself… only this time as tragedy for all humanity beyond measure.

By Peter Howes