02) A SYSTEM IN CRISIS WITH NO SOLUTIONS
Excerpts from the Main Political Resolution adopted by the Central Committee, Communist Party of Canada, Aug. 27-28, 2011
The political, economic and social situation in our country can only be fully understood if viewed in the wider context of the deepening systemic crisis of capitalism as a whole ‑ both domestically and internationally. Capitalism is mired in irreconcilable contradictions which are maturing rapidly, reflected in growing economic volatility and political instability around the world. In their desperate attempts to shore up their economic interests and maintain political hegemony, ruling capitalist classes are reverting to an extreme right‑wing, reactionary agenda ‑ an intensified assault on the economic conditions of the working class; the accelerated dismantling of public services and programs; a sharpening attack on labour and democratic rights; the increasing promotion of racism, sexism and anti‑communism; and a stepped up drive to militarism and war. While the pace and intensify varies from country to country, the essence and direction of this reactionary drift is evident in all capitalist states, including Canada.
This systemic crisis, and the attendant policies which the ruling classes are imposing in the hope of resolving it in their favour, are continuing to erode the living standards and quality of life of the masses of working people everywhere, and especially in the so‑called "Third World". The social divide between the super‑rich and the vast majority of the people ‑ most of whom 'sell' their labour‑power in order to survive ‑ is growing by leaps and bounds. Household debt levels are ballooning; young people are being denied the hope of a reasonable future; the 'wage gap' between women and men is once again growing; poverty and insecurity is swelling among seniors and pensioners, many of whom are compelled to compete with young workers for the worst jobs available just to survive; and an ever‑larger segment of the working class is being permanently marginalized, forced to survive on part‑time, temporary and precarious forms of employment, or driven into the 'shadow economy'...
The rollercoaster ride on global stock markets witnessed over the past several weeks has been chalked up to 'investor uncertainty' about the world capitalist economy and concern that leading economies will slip into another recession. Such fears are not without basis; indeed another recession/depression ‑ or more correctly, a continuation of the same economic crisis which broke out in 2007‑08 (which we have more accurately called "phase two" of the same crisis) ‑ is a virtual certainty. Stagnant and even 'negative' growth in the leading imperialist economies (Germany, France, the U.S., etc.), high consumer/household debt levels and correspondingly poor consumption figures, persistently high levels of unemployment, and the real prospect of government defaults in so‑called "sovereign debt" payments in a number of European countries (Greece, Spain, Italy, Ireland, Portugal, and even possibly France and the U.S.) have sent finance capitalists scurrying for cover.
But a narrow focus on market jitters over another economic downturn conceals more fundamental structural contradictions in global capitalism, flowing from the long‑term consequences of neoliberal economic policies, and the intensifying struggle for markets by imperialism and also emerging economies such as Brazil and China.
Back in the 1970s the rate of profit began to fall precipitously for monopoly capital, dragging down growth rates in the U.S. and other leading capitalist countries as well. In order to arrest and reverse the decline in profit rates, monopoly (through the auspices of the State) introduced neoliberal policies ‑ 'free' trade, deregulation, privatization, etc. ‑ first in Britain under Thatcher and the U.S. during the Reagan years, and then throughout the advanced capitalist economies and beyond. The 'free trade agenda' was never primarily about freeing up the international movement of goods and commodities, but rather about radically increasing the mobility of capital flows across borders, thus increasing the grip of foreign finance capital with devastating consequences throughout the neo‑colonial world.
That the banking and the financial service sector began to expand rapidly following the introduction of neoliberal policy was hardly coincidental. This sector has overtaken basic industry and manufacturing and non‑financial services (where value is actually produced) in virtually all of the advanced capitalist economies today. Neoliberalism was the structural instrument facilitating the movement of capital from 'value‑producing' to non‑value producing" (parasitic) forms of investment.
Neoliberal policy ‑ the economic dogma sometimes referred to as the 'Washington consensus' ‑ was a big success for monopoly interests. It not only accelerated the concentration and centralization of capital on an international level; it also temporarily reversed the decline in the rate of profit, leading some 'neo‑' and 'post‑Marxists' to mistakenly argue that Marx' famous Law of the Tendency for the Rate of Profit to Fall no longer held true. Of course the increase in the aggregate rate of profit during this period was highly misleading, because it included a growing share of 'fictitious capital' based on market and currency speculation, artificially inflated stock prices, and security and equity investments and hedge funds built on an unsustainable pile of public and private debt.
This house of cards began to fall apart in 2007‑08, and it is far from over. The massive government bail‑out packages over the past three years protected the financial holdings of monopoly capital, but at the expense of running up massive levels of public government debt. One left‑wing economist, Richard D. Wolff, commented recently on the sick irony of all this:
"Capitalist governments bail out big business by going into deep debt. And who do they borrow these funds from, that they must now pay back with interest? Big business ‑ the same monopoly capitalists that they bailed out in the first place."
Now, these same finance capitalists are worried that their security holdings in government bonds are not so secure after all, if governments are forced into default. Hence the unanimous and strident demand from 'the market' (i.e., finance capitalists) that governments cut 'discretionary spending' (a euphemism for healthcare, education, public sector wages, pensions, etc.) to the bone so that governments can meet their credit obligations and avoid default. The contradiction however (which even bourgeois economists are forced to concede) is that cutting 'entitlements' and other government programs ‑ as seen, for instance, in the vicious austerity measures imposed in many European countries over the past year under pressure from EU and IMF mandarins ‑ has stymied economic recovery, and further 'restraint' will contract demand even further, sending economies into a deeper downward spiral.
The worsening global economy has ignited a fierce debate within bourgeois circles about how to extricate themselves from the crisis, preserving their interests intact. All of the traditional fiscal and monetary economic 'tools' ‑ interest rates changes, currency devaluation, stimulus spending, etc. ‑ have been tried without success. Even the relatively buoyant Chinese and other Asian economies have failed to stem the global downturn, centered in the U.S. and EU imperialist blocs. The only rationale option which could hypothetically stimulate growth and reduce unemployment would involve a radical redistribution of wealth from the banks, corporations and the super‑rich (who are awash with cash) to the working class ‑ directly in the form of significantly higher wages and benefits, and/or indirectly through a great expansion of public services and programs benefitting working people, financed through substantial tax increases on corporate profits, and increased taxes on personal fortunes of the wealthy elite. But this is the one 'reform' which the ruling class will not contemplate (although some mega‑capitalists like Warren Buffett, embarrassed by the voluminous size of their richesses, have offered to pay higher taxes... for a while).
Their only remedy (sic) therefore is to intensify the exploitation of the working class (and working people in general) to maintain the transfer of wealth into their already swollen coffers, to further inflate the debt 'bubble', to ramp up the repressive security apparatus to quell spontaneous outbursts of discontent (as witnessed recently in London and other English cities) and especially organized class resistance and struggle, and to the accelerate the growth of militarization and war. Canadian finance capital has also embraced this agenda, and has mandated the Harper Conservatives to oversee its imposition on the working class of our country.
But this sharpening capitalist offensive is being met by increasing working class resistance and struggle around the world. The clearest example of this is of course Greece where the KKE‑led Militant Workers Front (PAME) has been in the forefront of numerous demonstrations and general strikes. But mass struggles are erupting elsewhere as well. Indeed, there were more general strikes around the world in 2010 than ever before in history. And in addition to these workers' actions, there has also been a big increase in anti‑government mobilizations by youth and students in a number of countries, such as those in Britain last November and more recently in Chile. The deepening crisis is spurring an upsurge in mass action around the world.
The current situation brings into sharp relief the most fundamental contradiction of capitalism ‑ that is, between the increasing social character of production, and the private appropriation of the wealth it produces ‑ and the bankruptcy of social‑democratic, reformist `solutions' aimed at ameliorating the impact of its excesses while preserving intact this crisis‑ridden system.
(The above article is from the October 1-15, 2011, issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $30/year, or $15 low income rate; for U.S. readers - $45 US per year; other overseas readers - $45 US or $50 CDN per year. Send to People's Voice, c/o PV Business Manager, 706 Clark Drive, Vancouver, BC, V5L 3J1.)