The capitalists' crisis needs a workers' answer!

Capitalism is undergoing its most sever crisis since the Great Depression in the 1930s. Sparked by the bursting of the US housing bubble the crisis is now fuelled by the rise in state deficits. Ironically enough this debt that states have accumulated stems from the expensive rescue packages the states had to give to the banks and the economy after the markets were in turmoil when the US investment bank Lehman Brothers went bankrupt. Meanwhile the speculators keep making millions and billions of pounds. The cost of the crisis is passed on to the workers via severe austerity programs which have become the norm in Europe, pay freezes and job cuts.

This summer saw massive turmoil in the euro zone. Due to the fear of the banks of a second Greece scenario in Italy there was emergency summit after emergency summit to come up with a plan to save the euro and appease the banks. This was accompanied by a massive speculation on “secure currencies” like the Swiss Franc. To give an indication of the situation it is interesting to look at the Euro – Swiss Franc exchange rate. When the Euro was introduced the rate was 1 Euro to 1.6 Swiss Francs. In August of this year the ratio dropped as low as 1 Euro to 1.05 Swiss Francs. So the Euro lost a third of its value compared to the Swiss Franc! It is even more extreme when we look at the British Pound. In 2006 1 Pound would be traded for 2.50 Swiss Francs. In August the Pound hit an all time low of 1 Pound to 1.25 Swiss Francs. That means it lost half its value! The exchange rate has only just eased a little because Switzerland is not turning on the money press and inflating its own currency, which in the end will make consumer goods dearer for the Swiss workers whilst it saves the profits of the Swiss Bankers and Capitalists.

The USA’s credit rating was downgraded this year for the first time since World War 2 from AAA+ to AA by the rating agency Standard and Poor’s. Not that we in general should believe this rating agency, wasn’t it Standard and Poor’s that gave an excellent credit rating to really bad financial packages containing subprime mortgages before 2007!  This downgrade might look insignificant, but it means that the banks who lend money to the US are now able to charge a higher interest on their credits. That’s not peanuts if it is considered that the US deficit just reached 14.000 billion dollars, or 90% of its own GDP, in February, increasing over 3000 billion dollars in the less than 2 years!  What happens when your credit rating gets too bad is a story Greece can tell. The Greek state now pays an interest of 22.5% on its loans. That is pure usury! And so the speculators are sucking off every bit off money they can get.

So even during the crisis there are plenty of opportunities for the banks and speculators to make a fair bit of money. This they do mainly by scrounging off the states and the working class. All European Governments are on more than friendly terms with the capitalists. In Britain 18 out of 23 members of Cameron’s cabinet are millionaires themselves!  So the governments happily open the public sector up for profiteering and pass on the bill to the workers. So for example in Ireland, a country ruthlessly plundered by capitalism,  the parliament has decided to implement cuts worth 15 billion Euros in the next four years, introducing a new inhabitant tax, lowering the minimum wage by 11%  and cutting jobs in the public sector. The situation in Britain isn’t much better, here the government wants to axe public sector investment by 48%, saving themselves over 75 billion Pound and cutting 500,000 public sector jobs!

To be perfectly clear, this crisis was caused by the banks and the speculators in their ruthless hunt for profits. But speculation is not just the bad side of capitalism, it is one of its necessary products. At the heart of the current crisis lies a massive over-accumulation of capital. Capital has to make more and more profit, just to be re-invested and bring in more profit for the capitalist. The classical sectors of the economy have long ago stopped to be able to put all that capital to work. So capital is thrown into the virtual sphere of the stock markets and financial products. When finally, it becomes evident that the so made profits have no basis in the real world, like when the housing bubble burst in 2007, the market collapses and capital is invested somewhere else. This is a vicious circle with no way out except pressing more and more value out of the workers.

Another, more efficient solution for capital’s problems is war. This has always been a last hope for the capitalist system to restore its profits. In a climate of economic crisis the possibility of war must necessarily become imminent. The recent raid on Libya, organized by the US imperialists with the aid of their French and British lackeys clearly shows that tendency. War means death and destruction for millions, but capitalism won’t hesitate to take the path over the corpses of humanity just to get that profit.

A real alternative to this system is possible. This world is not carved into stone. If the workers for themselves decide that they will now run their own affairs, not for the sake of profit but for the good of humanity capitalism’s last hour has struck. The working class is numerically strong enough to defeat the capitalists and if they take action not a single wheel in the productive process will move. That makes them so powerful and capitalists are fearing nothing more than the rising of the workers. This is a real perspective, and the more workers realise it the realer it becomes!