let's talk about the global financial crisis

[Zurdito]

I am quite surprised no-one is talking about this. revolutionaries should be the first to have knowledge and analysis for times like this, not, as is apparently the case here, the last.

forgive my sharp words but I've seen this story before in argentina in 2001: "revolutionary" left taken completely unawares by a series of events which even mainstream bourgeois commentators had been predicting.

so let's talk about this:

http://news.bbc.co.uk/1/hi/business/7202645.stm



The Fed, the US central bank, said latest figures indicated a deepening of the country's housing market slump and increased unemployment levels.
One analyst said the Fed was "obviously panicked" by the threat of recession. "Unfortunately they have no power to reverse what in my opinion is the worst post-war recession," said Michael Metz, chief investment strategist at Oppenheimer in New York.

...


The last time the Fed cut rates as much as three-quarters of a percentage point was in August 1982, almost 26 years ago.
"This is huge," said the BBC's business editor Robert Peston. "And it is a big risk. If this doesn't work, then people will say they have nothing left in their locker."



let's look at the BBC bussiness page as well.
OTHER TOP BUSINESS STORIES

http://newsimg.bbc.co.uk/shared/img/o.gif
Profits plunge at Bank of America (http://news.bbc.co.uk/1/hi/business/7202588.stm)

Barclays begins charges defence (http://news.bbc.co.uk/1/hi/business/7201952.stm)

Millions 'living beyond means' (http://news.bbc.co.uk/1/hi/business/7202121.stm)

...

BP freezes pension contributions (http://news.bbc.co.uk/1/hi/business/7202577.stm)


not much good news. what should our response be?

[R_P_A_S]

I was talking about it on here. this was just yesterday

http://www.revleft.com/vb/global-stock-markets-t68679/index.html?t=68679

[cyu]

not much good news.

If the wealthy are losing money (assuming they have more money invested in stocks than normal people), then that's good news. It means they'll have less economic power (which also translates to less political power).

The problem happens when, because of the way the economy is stuctured, a recession results in loss of jobs for the common man, which would be unnecessary suffering.

What really happens after a stock market crash? Stock certificates and paper securities might go up in flames, but all the employees, technology, raw materials, and infrastruture are still right there. Products and services can still be produced at the same rate as before. If the capitalist economy is suddenly unable to produce products and services at the same rate as before, it's just further proof that the system was put together by idiots.

[jake williams]

What really happens after a stock market crash? Stock certificates and paper securities might go up in flames, but all the employees, technology, raw materials, and infrastruture are still right there. Products and services can still be produced at the same rate as before. If the capitalist economy is suddenly unable to produce products and services at the same rate as before, it's just further proof that the system was put together by idiots.Good, at least someone is saying exactly this, this is a very important point about "recession" and "depression" and all that. It's troubling, though, that it takes "anarcho-syndicalists" on a Revolutionary Left discussion forum to say it.

Proof that it wasn't just put together by idiots, but held together by idiots. And dangerous idiots, too, we can't exactly just sit back and laugh at Oh, how ridiculous they are.

[Zurdito]

I was talking about it on here. this was just yesterday

http://www.revleft.com/vb/global-stock-markets-t68679/index.html?t=68679


aah ok, I missed that. apologies. if there was still an embarrassed smilie I would use it. :)

[Zurdito]

If the wealthy are losing money (assuming they have more money invested in stocks than normal people), then that's good news. It means they'll have less economic power (which also translates to less political power).

The problem happens when, because of the way the economy is stuctured, a recession results in loss of jobs for the common man, which would be unnecessary suffering.

What really happens after a stock market crash? Stock certificates and paper securities might go up in flames, but all the employees, technology, raw materials, and infrastruture are still right there. Products and services can still be produced at the same rate as before. If the capitalist economy is suddenly unable to produce products and services at the same rate as before, it's just further proof that the system was put together by idiots.

When I said not much good news I should have been clearer, I meant from their point of view.

However let's elaborate on this:

The wealthy who lose money happen to own those means of production. So how do you think they recover the money? By trying to step up the rate of exploitation once more. Such is the nature of any of the systematic capitalist crises.

Why is this one different? Well, as far as I know, a lot of it comes down to the fact that in the last instances of recession, the imperialists could still move further into markets such as China to offset their crises at home. However, the Chinese economy is currently at the top of a peak, and there's only one direction from there. I thinkt his would be the first itme since the beginning of the 90's that production in China would begin to fall then.

What would that mean? Dent in living standards for workers in the imperialists states. What has kept our standard of living rlatively high, even as our wages have stagnated, our pensions been wiped out, our debts growing, etc.? a boom in China which pulls down prices at home. However, froma capitalist point of view they have been "overproducing" for quite some time now. So when those factories start to close, what will happen?

So yes, definitly these crises will lead to growing confrontation with the working class across the world. Good news if we win, very bad news if we don't.

Also, your point about productivity misses a key marxist point: profitability dictates production, not social need. When it becomes unprofitable to produce at the rate they are now, they wills top. Obviously they *could* produce at the sae rate forever, hellt hey could feed clothe house heat and transport the whole world. But they don't. And they will attack workers living standards when it becomes unprofitable to keep us living at the current level.

[Lynx]

If the wealthy are losing money (assuming they have more money invested in stocks than normal people), then that's good news. It means they'll have less economic power (which also translates to less political power).
Unfortunately, a bear market creates new opportunities. Those in a position to buy low will be sitting pretty.

[Zurdito]

Unfortunately, a bear market creates new opportunities. Those in a position to buy low will be sitting pretty.

which is exactly why capitalism will never jsut collapse. it works in cycles. crises=profit.

which is why we fight to actively overthrow it. crises are simply times when our view is most vindicated. in themselves they do not "kill" capitalism in any sense.

[cyu]

which is why we fight to actively overthrow it. crises are simply times when our view is most vindicated. in themselves they do not "kill" capitalism in any sense.
Agreed. Sometimes it can make the average person more open to listening to alternatives. The recovered factory movement in Argentina happened pretty much as a response to the economic crisis there. Too bad it didn't go far enough, but it was important in that it introduced many people to how an alternative economy can be structured.

[Ultra-Violence]

IM just surprised about how quite this board is Fucking shit is cracking and all is quite on the western front.

What i really wanna see is how the peoples anger is goana mmanifest itself and how much damage we can do to the ruling clas in these times of uncertainty

[Holden Caulfield]

if anything it with this scale of recession people will stop buying luxury items and so it probabably wont effect me personally, and so i have no anger towards it firsthand,

i welcome anything that weakens the empire,

[jake williams]

IM just surprised about how quite this board is Fucking shit is cracking and all is quite on the western front.

What i really wanna see is how the peoples anger is goana mmanifest itself and how much damage we can do to the ruling clas in these times of uncertainty
lol. Ultra-Violence.



Really though, I think we should pay attention to how absurd the idea is that all of a sudden we can't produce at least enough to supply current consumption simply because of some or another semi-arbitrary trend in the financial markets.

[Zurdito]

if anything it with this scale of recession people will stop buying luxury items and so it probabably wont effect me personally, and so i have no anger towards it firsthand,

i welcome anything that weakens the empire,

hmmm but it doesn't necesarilly weaken the empire. like all crises the cost gets passed to the poor. it only weakens the empire if we make it.

[Holden Caulfield]

i think that in the long run it does weaken them, even if it is just that it turns their people further away from them, and forces their politicians to make consessions (even if they are superficial economically) to public feeling, such as not funding foreign wars when their is recession in their own country.

and weakening the image that America is some unstoppable universal policeman, and give opressed people more hope in sucess,

Castro used recession in Cuba in the early days as a way of showing how the sturdy proles are more powerful than the capitalists, it helped to build support and turn people against the capitalists

[peaccenicked]

The crisis has already weakened the empire. China has become a rival economic superpower , investing in Wall st, and big US firms like Walmart. Some African countries have moved from the IMF to intetrest free loans from China. Military defeat is on the cards in Iraq and Afghanistan and is an endless drain on finance.
The Bush package is "too little, too late". We should perhaps be talking about the final crisis of capitalism? The most wealthy will squeeze the poor, either we choke or fightback. If we keep on saying the subjective factor is not there, it will never be there. We should be looking at militancy and at people fighting foreclosure and unemployment. It might be a good time to think about the politics of squatting.

Things are happening so fast, we need what little organisations we have to respond.

[Zurdito]

i think that in the long run it does weaken them, even if it is just that it turns their people further away from them, and forces their politicians to make consessions (even if they are superficial economically) to public feeling, such as not funding foreign wars when their is recession in their own country.

and weakening the image that America is some unstoppable universal policeman, and give opressed people more hope in sucess,

Castro used recession in Cuba in the early days as a way of showing how the sturdy proles are more powerful than the capitalists, it helped to build support and turn people against the capitalists

hmmm I think that's one of those very "win-win" ways of looking at things which many on the revolutionary left seem to have.

I see exactly what you are saying but the trouble is it's not true. The only meaningful victory for our movement is a ocncrete material victory.

Thinking that over time as capitalism "shows it's true colours" that this is a victory for us is just not going to cut it. The system has "shown it's true colours" many times. Nowehere more so than Chile. Yet Chile has one of the most neo-liberal govenrments in Latin America today and one of the least revolutionary situations.

The same can happen anywhere. It happened in the great depression, when even the rich countries populations were impoverished, and capitalism survived. In the 1980's the working class was brutally attacked in Britain in what was a real crisis for the bourgeoisie, yet they won, and they came out stronger than before, and the working class weaker than before, and regardless of the fact that capitalism had empoverished large numbers of people, it still came out stronger, because that is what crises do - they purge the weaknesses from the system and raise the rate of exploitation. If we don't stop them from doing so, the capitalists will succeed, and there is no evidence under the sun to suggest that it's some kind of "long-term" defeat.

To defeat capitalism, we have to be ready when crises occur. Crises in themselves won't just create communists. They may create Nazis. They may create apolitical desperate people only concerned with surviving. "Bad times" do not equal enlightenment. That's why building a working class base now, based on principled, honest, long-term poltiics, is the only route to success.

[Sleeping Dog]

I share Zurdito's concerns during the "great depression" money was of such great value the Rockefeller family was able to build an upstate New York mansion with solid Lapis lazuli mantled fireplaces.

We already have government so serene in it's fascists majesty as to grant the RIAA federal justice departmental warrant issuing powers. In the 1930s FDR was forced to counter growing civil unrest by the "New Deal". At that same time most private fortunes advocated the policies of Benito Mussolini. Hitler's Third Reich arose via German economic desperation.

As of the present we stand in threat of terrifying technical identification capacities. Our IP addresses are all on record.

When the Iraq fiasco first loomed as a likely scenario I cautioned of serious economic consequence but there may be a "method to the present global madness".

PS. Ultra-Violence perhaps a stint in the military would serve you well. My first protest vote was a 1968 write in for Daffy Duck signed in Walter Reed Hospital.

[redcannon]

well, I hate to say this, but it is true. I've been expecting something like this for some time, and I'm sure many of you have as well. The system won't hold. Marx said capitalism works in cycles, and he is most assuredly correct. Capitalism is on the wane, at least for now. It's going to lower the standard for the worker, increase the labour force (which will lower the price of labour) and end up clusterfucking the proletariat. I'm not sure if this is Capitalism's last stand, but if it is going it will not go quietly, and I'm a little afraid at what might happen in the next year.

We must remember that when capitalism begins to fail, the state will revert to militant fascism to uphold its power. This has begun to happen already (for example, the US shooting and burying the constitution with Homeland Security and the War on Drugs.)

I'm not sure what to expect.

[Commie Girl]

Expect hard times for all workers. Stock up on non-perishables if you can. This next year will not be pretty.

[KC]

Also, your point about productivity misses a key marxist point: profitability dictates production, not social need. When it becomes unprofitable to produce at the rate they are now, they wills top. Obviously they *could* produce at the sae rate forever, hellt hey could feed clothe house heat and transport the whole world. But they don't. And they will attack workers living standards when it becomes unprofitable to keep us living at the current level.

No they cannot. In order for capitalism to survive, it must expand. It cannot remain static.


which is exactly why capitalism will never jsut collapse. it works in cycles. crises=profit.

Yes but in ever worsening cycles. That is important to remember. The tendency for crisis increases.

As for capitalism "never just collapsing," I disagree somewhat. Every time capitalism has come close to destruction, the bourgeoisie have developed a means of sticking a band-aid on the problem and ignoring it until it happens again. This happened first with the New Deal and social reforms and worked its way up to the credit system, which capitalism currently is structured upon. I see no direction that capitalism can go any longer, as there is nothing for them to introduce (as far as I can see) to offset the inevitable.

I also think that this situation is unique in the sense that in the past few years American hegemony has experienced an overall decline in power, not only economically but politically as well. This is important to remember.


Expect hard times for all workers. Stock up on non-perishables if you can. This next year will not be pretty.

I don't see it happening that quickly, but I can definitely see some massive change happening in the next 5-10 years that will intensify the class struggle and perhaps even bring it to a head.

[Zurdito]

No they cannot. In order for capitalism to survive, it must expand. It cannot remain static.

True, but serious crises are when the crisis of profitability for the big boys is so serious that the system needs to be purged of even the weaker capitalists in order for the strong ones to keep expanding. So even in a shrinking market, some can actually increase their wealth. I mean, if the overall pot shrinks, but the share of global wealth owned by capitalists in fact increases (and due to there being more concentrated wealth within their ranks, the absolute and relative wealth of succesful capitalists also increases), then we can't say capitalism is collapsing.




Yes but in ever worsening cycles. That is important to remember. The tendency for crisis increases.

hmmm well now we get into economic theory which is somewhat beyond me, but isn't this related to different waves and/or long-term cycles? Therefore, the various crises within a wave may have a tendency to worsen, but it's possible to overcome the "big one" - ie the great depression, (the 1980's also?) - and then embark on a new wave of development or a new cycle. You can argue that the structural problems of each long-term cycle or wave are bigger than the last - and in fact historically I'd have to agree with you - but still, if they do overcome the next big looming crisis, it may well still allow them to embark on another 50 years or so of relative stability.


As for capitalism "never just collapsing," I disagree somewhat. Every time capitalism has come close to destruction, the bourgeoisie have developed a means of sticking a band-aid on the problem and ignoring it until it happens again. This happened first with the New Deal and social reforms and worked its way up to the credit system, which capitalism currently is structured upon. I see no direction that capitalism can go any longer, as there is nothing for them to introduce (as far as I can see) to offset the inevitable.

Interesting point.



I also think that this situation is unique in the sense that in the past few years American hegemony has experienced an overall decline in power, not only economically but politically as well. This is important to remember.


That's true but powers like China, Russia, the EU and the "third world" bourgeoisie are always ready to step in and profit. The weakening of its number 1 policeman is not "good news" for capitalism and definitely we will see contradictions worsening and growing threats to the system as workers become radicalised. I agree with all of this, and I think we are in for very interesting times ahead. However, I do not think that in itself, any of this means capitalism on its own will just collapse. If we don't prevent it, it is entirely possible for a new capitalist order to built on the reamins of this one, IMO.

[Tatarin]

But must not capitalism always have something to grow on and of? I mean, isn't the world almost empty of new markets? And since we aren't even close of expanding new markets to space, other planets, dimensions, dreams ( :) ) doesn't it mean that sooner rather than later, capitalism will fall?

[Zurdito]

But must not capitalism always have something to grow on and of? I mean, isn't the world almost empty of new markets? And since we aren't even close of expanding new markets to space, other planets, dimensions, dreams ( :) ) doesn't it mean that sooner rather than later, capitalism will fall?

There are many things this could result in (from their point of view) and these crisis could provide a kind of hugely costly way out, involving mass destruction of capital and the wiping out of many capitalists. For example:

Further stepping up imperialist penetration of the "third world" - I'm not sure how viable this is, how much more can be done, etc. It would need an even more aggressive foreign policy to the poor countries, would need huge militarisation, propaganda campaign, would mean slaughter of a lot of people.

Different imperialist blocs more aggressively going for each others markets, maybe even resulting in a third major inter-imperialist war. This would, when over, result in a huge amount of profitable rebuilding to be done, and new space for profit of the victors at expense of the losers (for example after WW2, much of the world was withdrawn from capitalist markets, but capitalism was able to survive for about 20 years through the imperialists states rebuilding their own markets and trade relations between themselves. In the space that had developed for the old colonies and semi-colonies to industrialise and develop some economic independence etc. while the imperialists were weakened, there was then a nice new market to take ocntrol of and penetrate when the imperialists were forced to look outwards again. i.e. re-colonissation. That's the nature of cycles.)

Well it has happened twice before, so let's not discount it.

[KC]

True, but serious crises are when the crisis of profitability for the big boys is so serious that the system needs to be purged of even the weaker capitalists in order for the strong ones to keep expanding. So even in a shrinking market, some can actually increase their wealth. I mean, if the overall pot shrinks, but the share of global wealth owned by capitalists in fact increases (and due to there being more concentrated wealth within their ranks, the absolute and relative wealth of succesful capitalists also increases), then we can't say capitalism is collapsing.

This is true. Depression is one of the greatest monopolizers of capital in this regard. However, I consider such monopolization to lead to its destabilization and an intensification in the class struggle. I don't think one can ever say simply that capitalism will just collapse under itself, regardless of the class struggle, but that it provides opportunities for the class struggle to turn revolutionary, and that these ever-worsening problems will eventually lead to that.


That's true but powers like China, Russia, the EU and the "third world" bourgeoisie are always ready to step in and profit.

Yes and no. The problem is that the entire world economy is dependent upon the United States, and that the destabilization of the United States as the "leading power" will have a very damaging effect on the world as a whole. This financial crisis is a good example of that.

[Zurdito]

This is true. Depression is one of the greatest monopolizers of capital in this regard. However, I consider such monopolization to lead to its destabilization and an intensification in the class struggle. I don't think one can ever say simply that capitalism will just collapse under itself, regardless of the class struggle, but that it provides opportunities for the class struggle to turn revolutionary, and that these ever-worsening problems will eventually lead to that.

I agree with you there. The class struggle is set to intensify notably.

[Sleeping Dog]

No they cannot. In order for capitalism to survive, it must expand. It cannot remain static..A salient point that always bears repetition.

[R_P_A_S]

for the last 2 months I've stop eating out and I cook all of my own food now. and I buy way less, considering I haven't bought meat in a month. I know this is a stupid question but have my change in consumer patters effected this "recession" at all? LOL

and an other thing. I have no idea how I will be effected. I just seem to think that corporations and all those loons running around wall street are the only ones in trouble. BUt today my brother told me to "brace my self" because money will be tight and work will be scarce.????????:confused:

[Ultra-Violence]

lol. Ultra-Violence.


^^^^^^^^
whats so funny?

PS. Ultra-Violence perhaps a stint in the military would serve you well. My first protest vote was a 1968 write in for Daffy Duck signed in Walter Reed Hospital.

^^^^^^^^^^^^^

first of all im not talking about revolutionary violence im talking about us making the ruling class look stupid ass fuck with thier laise fair economics. i want to see them get them selves TALK their way out of this one

I AM IN NO WAY LOOKIN FOR VIOLENCE

even though my name says other wise

[Sleeping Dog]

lol. Ultra-Violence.


^^^^^^^^
whats so funny?

PS. Ultra-Violence perhaps a stint in the military would serve you well. My first protest vote was a 1968 write in for Daffy Duck signed in Walter Reed Hospital.

^^^^^^^^^^^^^

first of all im not talking about revolutionary violence im talking about us making the ruling class look stupid ass fuck with thier laise fair economics. i want to see them get them selves TALK their way out of this one

I AM IN NO WAY LOOKIN FOR VIOLENCE

even though my name says other wiseK

[gilhyle]

I agree with a lot of this thread. Just one other point - this is a crisis driven by overpricing of financial assets (undervaluation of financial risk). That makes it a similar crisis to that which faced Japan in the late 1980s and 1990s and from which it is still recovering. However, so far, this crisis is on a smaller scale. The devaluation of financial assets is much smaller. However, it seems (very little is clear in the parts of the financial markets at the heart of this crisis) that there could be further to go. If there was a very significant devaluation in US financial assets on the back of nationwide falls in US property prices, the recession the US would face could indeed by of long term significance and it could mark a decisive decline in American power for a whole period.

I say 'could'......Im not convinced that will happen. But if it does happen it is likely to change the pattern of globalisation giving it a much more regional-trade-block character than it currently has and that would be a very significant change.

But what ever happens what is missing is strong trade unions to defend the mass of workers (particularly in China, India and other developing countries) and class parties, revolutionary or not. In the absence of all that this crisis will follow whatever spontaneous course it will follow, unfortunately unaffected by class struggle on any scale.