|
New Delhi, November 20-22, 2009 Henrik Stamer Hedin
Why talk about economic crises of capitalism? Everybody knows that capitalism is haunted by crises. So why talk about it?
We were told that economic crises, cyclical crises were a thing of the past – that in these modern days of regulated capitalism these things were just not tolerated anymore. We were told so when I was young; we were told so again a couple of years ago; it was wrong.
So let’s talk about the crisis.
Contrary to what is often said it did not come as a surprise. Rather, it was expected and predicted by many. The only thing surprising was that it took so long coming – or rather: that it proved possible to postpone it for such a long time.
No less than twenty years, as a matter of fact. The current doomsday crisis began in 1987 with the heaviest slump that the New York Stock Exchange had ever experienced in a single day – 1929 included. And a genuine crisis did follow: by the winter of ’89-’90 production had begun shrinking in the leading capitalist industrial countries, and unemployment was on the rise. But at that very moment – paradoxically and ironically, one might say – occurred the liquidation of socialism in Europe, East European economies were laid open to western capitalist initiative – and the lack of it – and it proved possible to “rub off” the crisis on Eastern Europe. This was most obvious in Germany, where industrial enterprises in the East were shut down massively in order for their western counterparts to survive, but the same thing happened in the other formerly socialist countries, and it was these countries, not capitalist Western Europe, that got to feel the destructive effects of the crisis with production slumps of 30-50 percent – the sad story which we know only too well.
Two years earlier it was the fall of capitalism seen on the horizon; now the former doomsday prophets were cheering the fall of socialism. The only one of the big capitalist countries to experience fully the crisis was Japan, having nowhere to rub off the crisis. And the Japanese economy still has not recovered.
Further crises ensued up through the 90’s and the beginning of the new millennium, but each time imperialism was able to “rub off” the crisis on some peripheral growth area – now the Southeast Asian “Small Tigers”, now Latin America. Production was boosted by wars and a general consumer optimism by blatant propaganda claiming a “historic” boom every time the market revived a little.
Thus it has been going on for twenty years. Now there are no peripheral regions left on which to rub off the crisis: Eastern Europe has been smashed to pieces; Latin America has turned its back on the very neoliberalism that made possible the rubbing off; South East Asia is itself hit by the crisis. Now the US, Europe, and Japan are feeling the full blunt of the crisis and at the same time. These last two years it has been obvious for all to see how false the picture of blooming capitalism was.
It began with a payment crisis in US housing; the “subprime crisis” it was labeled. It spread to the banking sector and was relabeled “financial crisis” and “credit crisis”. Stock rates nosedived, capitals were annihilated, and those surviving fled from the financial exchange markets to speculative investment in raw materials, oil and foodstuffs; food prices soared, and the label was changed to “food crisis”. Later, though, prices slumped again, and this year major parts of the world, Europe in particular, has experienced genuine deflation. Price slumps were followed by slumps in production and employment, in income and welfare, and it has become clear that this is not some “special” crisis, but a classical and general crisis: A capitalist surplus production crisis.
As such, the current crisis is among the worst in history, comparable to the Great Depression of the 30’s. Some prominent economists even point out that certain statistical indicators of the current crisis are worse than the corresponding data for the first two years of the Depression.
These economists accordingly warn against believing that it will all be over next year, even though numbers for production and employment this summer seem to promise so, and even though stock rates have been rising since March. Against the optimists’ expectation of a “V-development”, i.e. a fast recovery following the slump, they suggest a “U-scenario” of more delayed recovery, a “W-scenario”, in which temporary recovery is followed by a new slump before the crisis is finally done with, or even an “L-scenario” or “Japanese disease”, thus labeled because of the prolonged crisis in Japan of which I have already spoken.
If this summer’s fragile signs of bettering are really foreboding a recovery, it can at any rate be predicted with a fair degree of certainty that the entire cycle is going to repeat itself before long. For these last six months’ pronounced stock rate rises coinciding with a rise in bond rates causing the interest rate to go down show that there is still lots of surplus capital, or fictitious capital, around seeking in speculation the profits that it is not able to find in material production, and thus that the necessary reorganization of the economic circuit of capitalism has not yet been brought to its conclusion.
Or otherwise put: The recovery has come too fast and rests entirely on government intervention aimed precisely at saving the very same surplus capital which caused the crisis. The expectation that the recovery will not last is therefore widespread among economists.
In Denmark the crisis has led to bank crashes, mass sackings, and elimination of jobs in industry, and recently it has been announced that the country’s last great shipyard is to be closed down in the space of three years. Official, heavily embellished unemployment numbers have exceeded a hundred thousand, by a population of five million, mass unemployment thus being back after a short break.
The Communist Party of Denmark, at its National Committee plenary of February this year, reacted by issuing an appeal “To progressive forces in Denmark”, The crisis calls for activity and alternatives. In this document, the other workers’ parties, the trade unions, and other popular forces are called on to join in a “common effort” for “new initiatives capable of adding dynamism and renewed life to the task of developing democratic and socialist alternatives to the capitalist structures gone bankrupt”. Our aim and endeavour is to set up later this winter a joint committee with the purpose of convening sometime next year an open conference on the crisis of capitalism and the socialist alternative. It is our hope that in this way we can succeed in getting together a new, broad force critical towards capitalism and capitalist solutions, thus creating a new consensus of the Left and a new agenda of Danish politics. |