Crisis opening in 2007

What will come from the G20 summit?

Author: 

Martin Thomas

The 15 November meeting in Washington of leaders from 20 governments representing 85% of global output will have little effect on the tsunami of job cuts and home evictions already heading for us.

Will this crisis lead to an orderly "new Bretton Woods"? More likely to "global disintegration".

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Marxist Theory and History: 

Economic Crisis - We Need a Workers' Plan!

During this economic crisis, working class people are being made to go without, while the government finds billions to fund the banks. The ruling economic system, capitalism, has exposed its own inbuilt cycles of booms and busts and the government has shown that its main purpose is to prop up this deeply flawed system. If nobody stands up for the working class and we are left to suffer the most. We can not leave 'politics' to the politicians. We have to stand up for ourselves and make demands.

During this economic crisis, working class people are being made to go without, while the government finds billions to fund the banks. The ruling economic system, capitalism, has exposed its own inbuilt cycles of booms and busts and the government has shown that its main purpose is to prop up this deeply flawed system. If nobody stands up for the working class and we are left to suffer the most. We can not leave 'politics' to the politicians. We have to stand up for ourselves and make demands.

Marxist Theory and History: 

Tubeworker topics: 

General strike against privatisations, for better wages and pensions

Riot police fired tear gas on Tuesday 21 October to disperse demonstrators amid a nationwide general strike that brought air, rail and ferry traffic to a halt.

The general strike by millions of workers also crippled urban, rail and sea transport and kept schools, banks and public offices shut. State hospitals and utilities, including the partially privatized OTE telecom company, operated on skeleton staff while journalists staged a media blackout.

Unions are opposing privatisation of Olympic Airlines and attacks on pensions proposed by Prime Minister Kostas Karamanlis’s right-wing government.

Around the world: 

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Italian students tell government: we are not paying for your crisis!

Author: 

Hugh Edwards

“They are pissing on us, but the government tells us it’s raining”. These words on a banner in Rome on 18 October say it all: the five-month post-electoral honeymoon between the right-wing racist government and large sections of the Italian masses is unravelling.

“They are pissing on us, but the government tells us it’s raining”. These words on a banner in Rome on 18 October say it all: the five-month post-electoral honeymoon between the right-wing racist government and large sections of the Italian masses is unravelling.

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Around the world: 

Capitalist crisis: Italian, Greek, Irish workers and students fight back

Author: 

Colin Foster

Fifteen thousand students marched in Dublin on 22 October against education cuts made by the Irish government because the world crisis has sent its tax receipts slumping. Another big demonstration, initiated by the teachers’ union INTO, is due in Dublin on 6 December.

Pensioners are protesting against another Irish government decision, to means-test free medical care for over-70s.

Greek workers joined a general strike on 21 October against privatisation and pension cuts.

Fifteen thousand students marched in Dublin on 22 October against education cuts made by the Irish government because the world crisis has sent its tax receipts slumping.

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The bail-outs: how much do they cost, and who pays?

Bank of England and government support for the banks so far totals something like the equivalent of £18,000 for every child, woman, and man in the UK.

The Bank of England's Financial Stability Report of 27 October 2008 estimated that "perhaps as much as £5,000 billion has implicitly or explicitly been made available by central banks and governments since April 2008 to support wholesale funding" by banks.

Robert Peston, on his blog, says that the Bank of England told him that the figure £5,000 billion was a mistake, and it should be a bit less, US $5,000 billion.

Bank of England and government support for the banks so far totals about £18,000 for every person in the UK. That figure must be misleadingly inflated, and it is. But what estimate can we make of the real costs, and who will pay them?

Marxist Theory and History: 

As downturn snowballs, activists should plan fightback

Author: 

Gerry Bates

On 27 October Luton Trades Union Council sponsored a meeting, “No Pay Cuts For Down Days!”, in support of the 1200 workers at the General Motors van factory in Luton.

The way out, said the call for the meeting, was for workers “to join up with other unions to build a movement to fight redundancies, cuts in pay, house repossessions, and to start to build a world that does not rely on the waste and madness of capitalism to determine our future”.

Sections of the working class may at first be stunned, by the crisis; a lot depends on the ability of activists in the labour movement to start formulating and arguing for a workers’ plan for a fightback.

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Five notes on the economic crisis

Author: 

Martin Thomas

Inflation likely to rise again

Almost all the press says that price inflation will slow down. Prices for basic raw materials - oil, metals, wheat - have already fallen, and in the coming months that will work through to finished-goods prices.

This online version is longer than the version in the printed paper

But meanwhile the governments and central banks are doing exactly what they have long said is certain to increase inflation - pumping masses of cash and credit into the economy.

Inflation; "Keynesian" public spending; who pays and who controls; the end of "IMF law"?; Marx's theory

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Marxist Theory and History: 

Who is to blame for the crisis? Just financiers, or capitalism more generally?

Author: 

Martin Thomas

In a poll published by the Financial Times on 19 October, 80% of people across the European Union blamed the banks for the current economic crisis.

This is a longer version of this article than appears in the printed paper

In the UK, over 50% of people responding to the poll said that the crisis was due to "abuses of capitalism", and a bit over 10% that it was due to a failure of capitalism itself.

Just an aberrant system of finance? Or at the roots of the crisis deeper?

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Australia lurches into crisis: a workers' plan needed!

Author: 

Martin Thomas

On 22 October Glenn Stevens, governor of the Reserve Bank of Australia, said that the worst of the global financial crisis had passed. In the next few days the Australian dollar plunged downwards, reaching 58 yen where it was 104 yen earlier this year.

Financial tumult continues on a big scale. And it is pretty certain that it will be followed by a serious downturn in trade and production in Australia, as across the world.

Australia could be very hard-hit by the crisis if its house-price "bubble" implodes like the USA's or the UK's. Even if not, a serious downturn is likely as credit implodes and prices and markets for its commodity exports shrink.

Marxist Theory and History: 

Around the world: 

Capitalist crisis - working-class socialist answers

Left debates the credit crisis

Author: 

Martin Thomas

Conway Hall, in London, was pretty full - over 200 people - for a meeting on 21 October on "Marx and the Credit Crunch". The content was, however, disappointing.

The meeting was organised by Andrew Burgin's "Public Reading Rooms" group, with a platform of three: the writer Istvan Meszaros, the SWP's Chris Harman, and Richard Brenner of Workers' Power.

Brenner's speech was particularly formulaic, composed almost entirely of generalities equally applicable (or inapplicable) to any economic disturbance at any time in the history of capitalism.

A meeting in London on 21 October debated the credit crisis, with platform speeches from SWP, Workers' Power, and Istvan Meszaros, and contributions from the floor from AWL and others.

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We need a workers' government!

“The markets rule the world. Maybe that’s why your conspiracy theorists make up all those crazy things. Because the truth is so much more frightening...”

So a top US businessman told the journalist Jon Ronson for his book Adventures with Extremists. It was a frightening truth like death is frightening — something scary that was, however, the way the world had to be.

Anything less than free-fire for “the markets”, would spell stagnation and collapse. So they said.

We need social regulation — but by a workers’ government, based on, loyal to, and accountable to the working-class majority.

Marxist Theory and History: 

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Comments on the crisis

John McDonnell MP: we have no say in this deal

The government have come out with their statement, possibly the worst deal you could have, you shove in up to £50 billion... you get non-executive directors... we have no say whatsoever... this idea that they’ll control bonuses on executive pay for a limited period of time; they’re going to set up an arms-length body to monitor their investments... it’s laughable.

John McDonnell MP, and Mark Serwotka of PCS, on the crisis.

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For a workers' government!

Author: 

Editorial, Solidarity, 16 October, 2008

Freedom of competition changes into its very opposite — into monopoly… The official representative of capitalist society — the state — will ultimately have to undertake the direction of production.

The situation imposes on working-class socialists the responsibility to be sharp and clear on how working-class socialism differs from “bankers' socialism”.

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Marxist Theory and History: 

Attila the Stockbroker Cleans Up the City!

Author: 

ATTILA THE STOCKBROKER

I was a clerk there: I've seen the greed
How wealth and power eat hope and need
Now they're eating each other but they're still screaming
'No interference' - I start dreaming.

The financial crisis...

Marxist Theory and History: 

Culture and Reviews: 

Capitalist crisis and workers' plan: London AWL study course, 2008

1: The general Marxist theory of capitalist crisis

2: Issues in the theory of crisis

3: Capitalism since 1980

4: Why banks go bust: the "credit crunch"

5: "Bankers' socialism" and workers' socialism

6: Workers' plan

Reading:

Excerpts from Marx at http://www.workersliberty.org/crisis

Views from various Marxist economists on the current crisis at
http://www.workersliberty.org/crisis2008

Six sessions.

Marxist Theory and History: 

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The Capitalist Mystique Shatters!

Author: 

Editorial

“For us the bourgeoisie is not a stone dropping into an abyss, but a living historical force which struggles, manoeuvres, advances now on its right flank, now on its left. And only provided we learn to grasp politically all the means and methods of bourgeois society so as to each time react to them without hesitation or delay, shall we succeed in bringing closer that moment when we can, with a single confident stroke, actually hurl the bourgeoisie into the abyss" - Leon Trotsky, 1922

1968 went down in history as the year of an enormous upsurge of the left all over the world. 2008 will go down as the year in which world capitalism, after 20 years of triumph, received a tremendous blow to its credibility.

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Marxist Theory and History: 

US announces "bankers' socialism"

Author: 

Colin Foster

For decades now we've been told that the only way to a dynamic and efficient economy is privatisation and fiercer free-market competition. Now the same capitalist governments say that the only escape from economic disaster is to nationalise and regulate.

That is how capital is. When things are going well for capital, it wants a free hand to grab what it can. But that free-fire zone for capital necessarily, sooner or later, leads to economic bubbles bursting, and the state stepping in to shore up capital.

For decades now we've been told that the only way to a dynamic and efficient economy is privatisation and fiercer free-market competition. Now the same capitalist governments say that the only escape from economic disaster is to nationalise and regulate.

Publications: 

Marxist Theory and History: 

Marxism at Work: Economic Crisis - Who Pays?

A comment often heard at the moment is “While I normally agree with strikes, it's not right when we're going into a recession”. As if the fact that everyone is suffering means that the kindest thing we can do is suffer with them? As if our sacrifices will somehow help everyone else? Will it get laid-off workers their jobs back? Will it bring energy prices down? We must have the confidence to believe that we are right if we put up a strong fight over pay now. And now is precisely the time to fight if we want to not harm but help working-class people suffering the economic crisis.

A comment often heard at the moment is “While I normally agree with strikes, it's not right when we're going into a recession”. As if the fact that everyone is suffering means that the kindest thing we can do is suffer with them? As if our sacrifices will somehow help everyone else? Will it get laid-off workers their jobs back? Will it bring energy prices down? We must have the confidence to believe that we are right if we put up a strong fight over pay now. And now is precisely the time to fight if we want to not harm but help working-class people suffering the economic crisis.

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World economic crisis - Australian AWL 2008 conference report

Author: 

Martin Thomas and others

Martin: Since late 2006, stream of financial collapses. That's how the crisis has immediately presented itself. The peculiarity, compared to the norm of capitalist crises, is that it comes at a time when profits are generally high, average company debt low. Origins in consumer credit rather than in transactions between companies. Results so far: slowing growth, US recession. No collapses in trade and production yet, but we'll see.

World economy

Marxist Theory and History: 

Around the world: 

Privatising gains and socialising losses? Socialise the gains!

Author: 

Editorial, Solidarity, 21 August, 2008

The massive state involvement in desperate social action on behalf of the capitalist classes to avert the collapse of their financial system is making the basic case for working-class socialism more forcefully, unanswerably, and urgently than it has been made for a very long time.

The nationalisation by the conservative George Bush administration of the two giant US financial corporations known as Freddie Mac and Fannie Mae has made the case for working-class socialism more forcefully, unanswerably, and urgently than for a long time.

The massive state involvement in desperate social action on behalf of the capitalist classes to avert the collapse of their financial system is making the basic case for working-class socialism more forcefully, unanswerably, and urgently than it has been made for a very long time.

Publications: 

Marxist Theory and History: 

A workers’ plan for the crisis

Author: 

Gerry Bates

In moments of desperation, capitalist governments reveal themselves. Take these two examples: Alistair Darling’s prognosis for the British economy and the recent bail-outs of US mortgage giants Fannie Mae and Freddie Mac.

In moments of desperation, capitalist governments reveal themselves. Take these two examples: Alistair Darling’s prognosis for the British economy and the recent bail-outs of US mortgage giants Fannie Mae and Freddie Mac.

Marxist Theory and History: 

Trade Unions: 

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A real plan for crisis

The TUC has responded to the economic crisis by demanding, “action to stop unemployment growing further still… Unions are looking for action to boost demand; we urge the Bank to cut interest rates and the Government to take the cap off public sector wage increases.”

As a programme to deal with the problems workers face this is pitifully inadequate. Workers do not just need “action to stop unemployment growing further”, but full employment. This is an immediate pressing concern for millions of workers.

The TUC has responded to the economic crisis by demanding “action" - but on pitifully inadequate lines.

Marxist Theory and History: 

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Marxists on the capitalist crisis: 5. Trevor Evans - The Imbalances in the System are Unsustainable

Author: 

Trevor Evans

Trevor Evans is a professor at the Berlin School of Economics, and has also worked in Nicaragua and other countries. He has written especially on the interrelation between finance and capitalist crises. He spoke to Martin Thomas.

Trevor Evans is a professor at the Berlin School of Economics, and has also worked in Nicaragua and other countries. He has written especially on the interrelation between finance and capitalist crises.

Publications: 

Marxist Theory and History: 

A new lurch into crisis

Bear Stearns

Author: 

Editorial

It is now "arguably the worst financial crisis in seven decades", according to Gillian Tett in the Financial Times (18 March).

On 17 March the US investment bank Bear Stearns went under. It had been credited as worth $18 billion only months ago. Right up to the collapse its bosses claimed it had plenty of cash to meet its commitments.

On one level, this crisis exhibits the basic DNA-coding of capitalism. In several ways, it is also something new in the history of capitalism.

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Marxist Theory and History: 

Barefaced exploitation by the super-rich

Rolls Royce

Author: 

Martin Thomas
In 2006, 54 UK-based billionaires were paying income tax of just £14.7 million on a combined fortune of £126 billion. New Labour rule has seen the apotheosis of the super-rich.

Review of Who Runs Britain? How the Super Rich are Changing our Lives by Robert Peston (Hodder and Stoughton)

“No nation”, Frederick Engels once wrote, “will put up with production conducted by trusts [i.e. big, industry-dominating cartels], with so barefaced an exploitation of the community by a small band of dividend-mongers...

“The exploitation is so palpable that it must break down...”

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Marxist Theory and History: 

Culture and Reviews: 

Socialism for the rich!

Author: 

Colin Foster

“All comparisons with the 1970s are absurd”, squeaked one of Gordon Brown’s media people, embarrassed about the Government’s decision on 17 February to nationalise Northern Rock.

“The man running it has credibility in the City, it will be run on a commercial basis..”

There is nothing “welfare-state”-ish about this nationalisation! No, sir! “Credibility in the City” is still the highest principle!

Actually nationalisation cannot but be a “social” measure. It is even a “welfare state” measure. Only... the “welfare” being tended to is the welfare of the rich.

According to the writer Gore Vidal: “America is a unique society in which we have free enterprise for the poor and socialism for the rich”. Not so unique after what Gordon Brown and New Labour are doing here.

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