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Socialist Party of Great Britain - Capitalism In Crisis - Marx and Crisis.

Capitalism is going through one of its periodic economic crises which the present Labour Government claimed was never going to occur again. No more “Boom and Bust” we were told by Gordon Brown. Houses are now being repossessed, some 26,000 in 2008 (Channel 4 News 9.10.08), companies are going bankrupt, the unemployment figures are going up to a level not seen for 17 years and economists are using the weasel word “recession” again. To bale out the banking system the government was forced to inject some initial £50 billion pounds with billions more to follow.

By the end of August this year the Chancellor of the Exchequer, Alistair Darling, stated that the economy was at a 60 year low leaving the voters, to use his expression, “pissed off” (GUARDIAN 30th August 2008). Rather than being “pissed off” the voters-that is the working class majority-should not have voted for the Labour Party in the first place.

Workers should steer clear of any political party wanting to administer the profit system. And if workers had read Marx on Capitalism then they would have understood why “boom and bust” is a feature of commodity production and exchange for profit which governments can do nothing about.

Workers would have also realised that capitalism can never be run in their interest. Periodic periods of high unemployment, social alienation and hardship are a fact of life under capitalism.

Where Now for Capitalism?

The BBC recently broadcast an on-line programme called “WHERE NOW FOR CAPITALISM” (19.09.08). Economic crisis, trade depression, contradictions of capitalism and Marx, all contained in one BBC programme. However, there were no Socialists present; no one who could bring Marx’s ideas to the debate.

Instead, there was the ubiquitous Tony Benn decrying the lack of market regulation and wanting a return to the security of government control of the finance markets as if that ever prevented economic crises.

Peter Jay, the economist, Bank of England Director and former BBC economics editor claimed “we had grown cynical of Marxist talk of the contradictions of capitalism because Marxism itself had, by the 1970’s failed while capitalism thrived…” He went on to conclude that the “failure of Marxism” was the reason why “its acolytes were discredited”.

We presume what Peter Jay meant by “Marxism” were the economies of pre-1990 Eastern Europe and the nationalisation policies of the Labour Party, none of which were “Marxist” or “Socialist”. Peter Jay admitted that most of his ideas of Marxism came from his friend the late Paul Foot, one-time leader of the Socialist Workers Party. It is doubtful if Jay knew what was meant by “the contradictions of capitalism” if it hit him over the head. The same would apply to Marx’s ideas. Marxism is not an economic system but a scientific understanding and critique of capitalism. Socialism has never existed; nowhere in the world has there been common ownership and democratic control of the means of production and distribution by all of society.

The Monetarist, Professor Mitford, an economist at Cardiff University and one-time adviser to Margaret Thatcher, claimed that despite the financial turmoil “Capitalism has a good record of dramatically raising the world’s living standards over long periods of time”. How and at what cost we are not told. A sizeable number of the world’s population live on less than $2 a day. Those peasants forced into Chinese and Indian cities as wage-slaves whose standard of living, according to Dr Mitford, has “improved” from when they eked out an existence on the land, mirrors Engel’s description of Manchester in the 1840’s.

Brendon Barber the Secretary General of the TUC said “this is not the final crisis of capitalism, but it ought to be the end of the road for a particular version of it”. He went on to say “the truth is that there is no single economic model for capitalism”.

There is only one capitalism; a capitalism where the means of production are held in private by a capitalist class and where the working class are exploited producing what Marx called surplus value. The TUC wanting to sit at the table with governments and employers have forgotten what their function is just as they abrogate the class interests of their members by giving vast sums to the Labour Party who in turn as a capitalist government attacks the working class.

If you type “Karl Marx” into the TUC data base on their web site you will only find one or two references to him. The TUC’s latest pamphlet “Do the Rich really Matter” (2008) has no acknowledgement to him at all. They did not even try to refute Marx’s scientific account of exploitation and crises. It is though his ideas are dead.

Is Marx a “dead dog” as he once remarked about the philosopher, G. W. Hegel?

Socialists think not. We would say with the poet Yeats “Was there a dog that praised its fleas”?

A Deep Crisis

And so the economic crisis continues with six countries in October of this year having to beg the IMF for money as capital leaves the emerging capitalist markets of Hungary, Iceland, Belarus, Ukraine, and Pakistan (now in Civil War on its Afghanistan borders as a proxy agent for Us Imperialism in the region).

On Thursday last week (23rd 10.08) the BBC had the following headlines:

• Gloomy forecasts for UK Economy

• Pound Tumbles to a five-year low

• Factory gloom “worst since 1980”

• UK Government borrowing at 60 year high

• Economy already in recession

• Jobless risk highest for 17 Years


Two bullet points are missing from this list:

First the BBC did not say Gordon Brown was utterly and hopelessly wrong when he said boom and bust was finished forever. And second The BBC did not go on to say that Marx was right about capitalism and crisis all along.

The Labour Party has boasted for ten years that under its watch there was to be no more booms and slumps. They thought that the Bank of England, through the interest rate mechanism, would ensure economic stability and constant growth. As with many things regarding the profit system, the Labour Party has been hopelessly wrong. Unemployment is now higher than it was ten years ago when the Labour Party first came into power.

Here is Gordon Brown, opening Lehman’s new European Head Quarters in Canary Wharf on 5th April 2004:

Lehman Brothers is a great company today that can both look backwards with pride and look forward with hope. And in wishing Lehman Brothers the success it deserves for its future, let me thank you for the privilege of being here and formally declare this new building open” (INDEPENDENT September 2008)

Four years later there was no future for the bank as Lehman’s went under with the loss of 4,000 jobs and very little hope that many former employees leaving the office clutching cardboard boxes filled with personal items would find quick re-employment. Many workers at Lehman’s had invested their bonuses in the company’s shares and lost everything. The average salary was $300,000. Some could not believe they were members of the working class. Unemployment pricks such shallow pretensions.

Not all those at Lehmans found themselves on the dole. At the beginning of the 1929 Wall Street crash it was reputed-although subsequently it was proved unfounded- that some brokers threw themselves out of multi-storey buildings as the value of shares fell. Times have changed. During the current banking crisis, three executives grabbed their coats and “parachuted” to safety out of Lehman’s Wall Street building taking with them £10 million in bonuses and making a soft landing on the pavement below, into waiting chauffeur driven cars and off to their yachts and villas in the sun. Marx noted a truth about capitalism: sharks eating fish; wolves eating sheep (CAPITAL VOLUME III, The Role of Credit in Capitalist Production p571 Penguin ed).

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