Class Struggle September-October
08
Drop bogus
charges on ILWU members
Pink Green
Left on
Shop till
you stop…the crisis
Tactical
Vote for Labour
Capitalist
Crisis in NZ
Fonterra
milk and melamine
Marxist
analysis of crisis
Socialist
Plan
Class line
in the
What we Fight For
Brief Stuff
Stand Up For ILWU 10 Members Jason Ruffin and Aaron Harrison: Drop Bogus
Charges Now!-Rally October 6
On
October 6, 2008 in
The
The
use of "homeland security" and the bipartisan "war on
terror" to attack US workers is not new and not an accident. It is part of
the war on the working class and a coordinated effort to repress workers and
control the trade union movement. The government violates the constitution
daily and wages a criminal war in the
We
condemn this attack and demand that the charges against these ILWU 10 brothers
be dropped. All unions and workers should attend the rally that will be held on
Monday October 6, 2008. Buses will leave ILWU Local 10 at 6 AM (
Initiated by Transport Workers Solidarity Committee
Pink Green Left on
The supercilious Pink Green lefties like Fred Fuentes http://boliviarising.blogspot.com/2008/10/bolivia-this-is-fight-between-rich-and.html and Stuart Monckton are the left leg of the popular front in
So every time the masses stage a semi-insurrection and are betrayed by
the bureaucracy and suppressed by the populist leaders, this is because they
are ahead of themselves. "The conditions are not ripe". The dynamite
is wet. So the masses are never ready, there was no dual power in 2005, or more
likely the Bolivarians were worried about losing power.
So the left leg of the popular front says that the bourgeois populists are
leading workers, not holding them back! That is the definition of the
popular front. Tie the workers’ hands behind their backs and call it a red
ribbon.
The fascist right keeps testing the popular front to
see if it can still contain the masses. The ‘red ponchos’ are Morales rich peasant militia to
keep the discipline of the popular front. They threatened to hang the Huanuni miners who told Morales his government did not
represent them. Such threats were not
enough so Morales attacked the vanguard and killed two of their militants and
then used their blood as the price of his 67% majority in the recall referendum.
The recent fascist killings of 16 peasants in Pando were a direct test
of the popular front. Morales’ response was to arrest the Pando prefect! But the masses were not going to put up with that.
One of his MAS leaders cried out after
the killings in Pando "Why didn’t you do something". So what happens?
A new pact is signed between the bureaucracy of the social movements and the
unions to tighten the ropes on the workers hands.
The Australian pink greenies see this as progressive when what
Morales is really doing is using the blood of the martyred dead as bargaining
chips for a new deal with the Media Luna fascists.
Now Morales offers another deal to the fascist killers for a Referendum on the
Constitution in January 2009. While they are discussing this new pact the
miners plan for action is diverted into yet another ceremonial march led by
Morales. http://boliviarising.blogspot.com/2008/10/morales-leads-march-for-bolivian.html.
For the pink greens this is progressive and correct and the miners had better
wait for further instructions from the Bolivarians.
Shop till you
stop…the crisis?
The liberal solution to the crisis is to get out and shop. This is also the view of the reformist
left. They celebrate the return of
‘Keynesianism’ to end the current crisis. If the problem is that the poor don’t
have enough money to buy stuff then the solution is more money. The technical
word the reformist left uses to explain the crisis is ‘underconsumption’.
Thus the Australian pink green left reprints John Bellamy Foster, editor of Monthly Review, http://links.org.au/node/677
“The truth is the advanced capitalist
system has been dependent on a process of financialisation
(the increase in the financial superstructure relative to the "real
economy") as the main means of combating the stagnation of production and
investment for decades now -- beginning in the 1960s, but accelerating in the
1980s, and accelerating still more in the 1990s. It is the underlying tendency
to stagnation rooted in exploitation and inequality that is the root problem.
(This was brilliantly and relentlessly explained in a long series of articles
by Monthly Review editors Harry
Magdoff and Paul Sweezy
from the 1960s to the 1990s.) Financialisation, the
blowing of one bubble after another (ideologically justified by neoliberalism), was offered as the solution to stagnation in the real economy. It was this that
mainly spurred economic growth in the
Here Foster says that this is not a financial crisis but one due to
long term stagnation where capitalism produces more goods than can be consumed.
Here
he misrepresents Marx by making underconsumption rather
than overproduction
the cause of the crisis. At first glance these appear to be two sides of the
same coin. But they are not. Underconsumption means
that all you have to do is increase the incomes of consumers and the problem is
solved. This is the underlying assumption of that branch of neo-classical
economics (value is set by supply and demand) dressed up as Marxism. It means
that by increasing demand you can match it with supply. And since capitalists
cannot be trusted to do this, the state has to intervene to overcome underconsumption. This would prevent the ‘financialisation’ of surplus capital and crises such as the
one we are facing.
For Marx, the crisis is
caused by overproduction of capital, both commodities and money, when
insufficient profits are realized, even
when those commodities are consumed at their values. The solution for the
capitalists is to increase their rate of profit by reducing the costs of plant,
machinery, raw materials and labor-power. The “wiping out of capital” does not
only refer to the destruction of fictitious or unproductive capital but the
devaluation of productive capital, both over-valued plant, machinery and raw
materials, and variable capital – the value of labor-power, or wages.
Against
the bosses’ solution the solution for the workers is not only to fight for jobs
and higher wages, but to overthrow of the wage system, i.e. capitalism, and its
replacement by socialism.
NZ: A Tactical Vote for Labour now!
The fast approaching election is not a normal
election. The current international capitalist crisis has put the capitalist
class under increased pressure, and the capitalist class is committed to solve
this crisis at the expense of workers. Our attitude towards the competing
parties now is about how the working class can defend itself from the bosses
trying to make us pay for their crisis. We do not have the luxury of assuming
that Labour and National are just two bosses’
parties, and that it makes no difference to our class which one we vote for. In
the past we have argued for a tactical vote for Labour
in order to expose it. This tactic has been overtaken by the crisis and what it
means for workers. We have to assess which of the two main parties is the most
immediate threat at to workers right now. We have come to the conclusion that
the urgent task for workers is to keep National out of office. A National
government would launch a massive attack on the working class and would weaken
its still fragile organisations. That's why we
advocate a tactical vote for Labour in this election.
Why do we say this? After all
National and Labour have both shown that they are
ruling on behalf of the capitalist class. Labour has
moved to the centre and abandoned its earlier commitments to the labour movement and workers in general in the last decades.
Under Key National clearly has an anti-worker agenda. So while it is true that
neither have the interests of workers at heart, let us see what we can expect
from each party after November 8 if it becomes the government.
The crisis, (see the
following articles and the causes and effects of the crisis) can only be solved
in two ways - at the expense of the bosses or at the expense of workers. Both
National and Labour will try
to solve it at the expense of workers
make no mistake. But the way they do it is like sudden death versus slow acting
poison. When offered a choice between being shot or poisoned, Trotsky
once said, I'll take the poison because I can at least try to get an
antidote. In fact, Trotsky survived an attempt at poisoning before he was
ice-picked to death.
National's
double barreled shotgun
National has shown in the
last 2 weeks that it proposes to return to a market driven policy in which
workers get wage cuts while bosses get tax cuts. It has ripped out the
employers’ contribution to Kiwisaver and effectively
made workers pay for it with lost wage increases. How do we know this to be
true? Because National has said that it will give workers in or out of Kiwisaver the same wage increases.
When the crisis began to bite
in the last week or so National's proposals were designed to rescue their big
business mates not protect workers from job losses and wage cuts. Its two main
proposals were first a 1% cut in the Reserve Banks rate of lending to banks.
This means that the banks can get money more cheaply from the Reserve Bank than
from the private banks facing a credit squeeze. While
this may appeal to some workers as cheaper credit, in reality there is no
expectation that any of this will be passed on to lower mortgage rates or any
other debt servicing by the working class. This is effectively a tax-payer
funded subsidy to investors to encourage them to take more "risks"
and invest.
The second proposal was to
force the Superannuation Fund to invest 40% of its fund in NZ. Key announced
that this money would go into the pet schemes they are planning, Private Public
Partnerships (PPPs) in toll roads, private prisons, private hospitals and
schools etc. In other words, National would plunder the future pension
funds of NZs for the short term profits of the private sector who would rake
huge profits from these PPPs. This rip-off amounts to Rogernomics
mark 2 except this time the state assets are not being openly privatised but rather plundered as taxpayers (created by
workers) money going into private profits.
Its important to understand
the link between National's cuts in taxes and social spending (e.g. taking the
razor to the public service etc, cutting the R&D money going to industry
and cutting Kiwisaver) and the use of the Super Fund
to 'develop' the economy. Both amount to a redistribution of current
savings all which originates in the labour of
workers, into the pockets of big business.
National has also supported Labour's deposit guarantee that would pay out (without
limit!) to depositors who might lose their savings in banks if they go bust.
But National wants to extend this guarantee to the wholesale borrowing of NZ
banks when the big 4 are Australian subsidiaries already covered by an
Australian state guarantee. In the context of NZ as a
semi colony, this amounts to National underwriting Australian and other imperialist
profit-making in the NZ economy. National is only interested in
solving this crisis by protecting and boosting profits at the expense of
immediately cutting wages and social spending on the working class. This is the
double barreled shotgun sudden death facing the labour
movement.
Labours
slow acting poison
Labour
–and that of the closely aligned CTU –has a 'partnership' policy that claims
that workers can be rewarded with their “fair share” of increased productivity
(i.e. exploitation). Facing a crisis
that threatens to destroy this 'partnership' Labour
has revived the Keynesian economic methods of full employment and state
spending to keep demand up in the economy so as to encourage investment and
hence profits. Kiwisaver and Super Fund are part of
this saving and investment strategy for profit growth.
National's policy to attack
jobs, wages, spending and saving cuts out the foundations from this policy.
That is why in response to the crisis Labour seeks to
reinforce those foundations by a number of emergency measures. Job losses will
be avoided with paid job training schemes and advancing house building and
infrastructure projects. Labour's
counter-crisis policy is designed to maintain the health of the capitalist
economy and the slow acting poison of increasing exploitation and profits, but
it has an immediate effect on workers in keeping them working, reasonably
educated and healthy so that they are fit, ready and willing for exploitation.
Yet from a working class
standpoint Labour's counter-crisis strategy opens up
the opportunity for the labor movement to develop an antidote to capitalist
exploitation. By keeping workers in work, training, education, and housing, and
by allowing the unions to survive and grow, the labour
movement can build the strength it needs to resist rising exploitation and
increase its share of its own labor-power.
It can fight to reclaim that
part of its former labor paid in taxes (including the bosses) that is being
invested in public and private ventures. It can fight to reject all use of
taxes by the private sector and to nationalise the
key sectors of the economy -taking back former state assets and nationalising under workers control without compensation.
All those industries that sack workers, close down, or are strategic in the
economy like Fletchers, CHH, Fonterra, Telecom etc should be socialised. The antidote to the slow acting poison of
rising exploitation is a fighting, democratic labour
movement that pushes for socialisation of the means
of production, distribution and consumption.
Short, sharp
shock
Some on the left will still
say it doesn’t matter if National becomes the government because it will give
the labour movement a short sharp shock and galvanise it into action to bring down the government.
Let's see how realistic this is. In the 1980s when we had a relatively stong labour movement, Labour got its new right agenda passed by short, sharp
shock treatment. The labour movement was defeated and
did not recover in time to stop the next short, sharp shock of the National
Governments attacks on workers and beneficiaries in 1990-1991. Short sharp
shocks have never resulted in the union movement being able to rally strongly
enough to bring down new right Labour or National
governments.
In fact it was the return of
the 5th Labour government in 1999 that created a
breathing space for the unions to recover and begin to rebuild. After 9 years
the unions have recovered some of their former strength and have begun to
tackle the difficult job of recruiting members who have never heard of unions
or are in jobs that have never been unionised. The Employment
Relations Act is designed to embed Labour’s class
collaborationist 'partnership' policy and it cannot provide any real protection
for workers. Yet National has promised to reform it and weaken those provisions
that have allowed the unions to rebuild in the 2000s.
Therefore when some of the
sectarian left say that a massive attack on workers is needed to revive and
strengthen the unions, this is an insult to workers. On the historical evidence
National will smother the weak child in its cot. The re-election of Labour facing this crisis will at least give the reviving
union movement an even chance of surviving and consolidating its strength. A tactical
vote for Labour facing this crisis gives workers more
time and space to rebuild their forces and fight for an independent working
class party.
Voting
Tactics
A vote for any other
candidate may defeat the Labour candidate even where Labour has had strong majorities in the past. For example
the total vote of Green,
The Greens will probably have
enough support outside the labour movement to get
over the 5%. Therefore workers in the organised labour movement should give their party vote to Labour and not the Greens. Remember that the Greens can only play a role in support of Labour if Labour is returned. The
Greens will not be able to stop National unless the
party commits to Labour.
November 8 -Vote for a Labour
Government
Capitalist Crisis in
The current crisis of the global
economy tells us some home truths about capitalism. The capitalists are trying
to download the costs of the crisis onto workers. National’s strategy is to
plunder the Superannuation Fund to finance private investment in
infrastructure. Labour plans to spend future taxes on
infrastructure housing and job training to counter recession. What position
should workers take in this situation? We argue here that workers should support Labour’s plan since it improves the opportunities for
workers to organize in fighting democratic unions and prepare to socialize the
economy under workers control.
Some home
truths
First, the market cannot
exist without the state. The evidence for this is overwhelming and has a long
history from the origins of European colonialism in the 16th century, right up
to the post WW2 Keynesian intervention of the state in the economy. The current
crisis is the ultimate proof of this calling on massive state bailouts for the
survival of the market.
Second, those who rule the
market also rule the state. The evidence for this is also overwhelming and has
a long history. Wherever the state intervenes in the market the outcome is in
the interest of the capitalist owning class. Even those interventions that
appear to benefit other classes, or people in general, are in the last
analysis, designed to increase profits. When interventions become less
beneficial for profits they come under attack and unless strongly defended are
removed. The current rescues of the market prove that all the arguments about
the state acting to distort the market are specious when the market is facing
destruction.
Third, capitalism today is
what Marxists call state monopoly capitalism (SMC). If the first
two propositions are correct, then we cannot be surprised at the fusion of
interests between corporations that become increasingly big and powerful, and
the nation states that serve their interests. This is evident from the clear
benefits that flow to the capitalist owners from state policies in foreign
relations, such as colonialism and imperialism, wars which are designed to
extend the power and wealth of the monopolies and the use of the state to police
and repress working class opposition to these policies.
We take from these truths the
fact that in order to survive capitalism has over the last century or so been
forced to become more and more monopolised and that
these monopolies rely increasingly on the state to defend their interests.
Monopolies
are defined not only by the exploitation of workers in production to produce
profits, but by the grabbing of the profits of other less powerful firms.
So what the capitalists argue
are special circumstances today –the massive state interventions to rescue the
"system" –are actually no more than the normal and necessary historic
role of the state to defend the interests of capitalism, today as State
Monopoly Capitalism where the state...bails out the banks!
The case of
New Zealand
NZ as a capitalist nation is
a good example of these truths. Capitalism in NZ was born as State Monopoly
Capital. The state was necessary from the start to enable colonisation
to occur. The British state forcibly suppressed the Maori people and dispossessed
it of its best land. To develop the land and industry, the state borrowed
heavily and so forced the taxpayers to fund the development of infrastructure
to enable the capitalist economy to be set up. So business was funded by the
national debt paid out of taxes deducted from the surplus created by workers. A
market for Land, Labour and Capital was created by
the state.
The NZ economy did not take
off however until after WW2 on the basis of a strongly interventionist state
under Labour governments that protected the domestic
market from global competition. Small farmers and businesses were able to grow
as a result of heavy state subsidies, tariffs and import controls. Public works
created a necessary infrastructure, while state borrowing and marketing of
exports subsidised the costs of individual capitalist
owners.
This state-protected economy
allowed the rise of local monopolies. Some were state owned such as energy,
rail, telecommunications etc., because no capitalist would risk money in such
massive ventures. Others, such as building, food processing, like Fletchers, Watties etc., were in the private sector but heavily subsidised (again by the taxation of workers wealth).
Growth was possible so long as exports were efficient and protected domestic
industry could compete with imports.
But increasingly exports were
subsidised by the state out of taxation (again
created by workers whose surplus value pays workers as well as bosses taxes) to
compensate for the high costs of inputs from protected industry. Local industry
could not sustain the cost of cross subsidies (they couldn’t screw more value
from workers) when monopoly industry reached the limit of the NZ market. The
class interests of the monopolists in exports and domestic industry prevailed
and deregulation, cuts in subsidies and removal of protection was forced
through by the 4th Labour Government of the 1980s.
NZs SMC was
then directly exposed to competition with global SMC which devalued and
restructured NZ capital. A fraction of NZ SMC which had comparative advantage
survived in partnership with increasing FDI. The more efficient export
producers rapidly amalgamated to form monopolies particularly in dairy and the
meat industry. The state backed cooperative structure of these industries is
now being merged with NZ and global monopoly partners. The case of Fonterra is
the subject of the following article.
The
current crisis is impacting on NZ in the following way. NZ is now fully
integrated into the global economy. The crisis of profitability in the
Labour's
response to global SMC
Labour's
social democratic approach to the national economy is to try to strike a
balance between the interests of NZ SMC and global SMC to protect the share of
value retained in NZ for redistribution as the social wage. The social wage is
the redistribution of some of the value created by workers back to them to
cover costs that the wage paid by employers does not e.g. health, education,
housing etc. It is a workers subsidy to employers rather than a welfare payment
to workers.
We can see Labour's FTAs as an attempt to negotiate deals that try to
balance the interests of NZ SMC with the SMCs of the
Has the FTA with
So while Labour's
limited social democratic trade objectives appear to be met insofar as NZ SMC
has won benefits from FTAs, there is no necessary benefit of a 'trickle down'
of social wealth inside NZ. For example, increased sales and profits to JVs in
Clearly social democratic
attempts to moderate the worst effects of the global market are unable to avoid
the need for SMC to make its profits at the expense of increasing exploitation
of the working class. I will come back to this below on the section on workers'
fight against SMC.
National and
Labour respond to the crisis
National's historic approach
is clearly to facilitate the takeover of NZ SMC by global SMC. Its policies in
the 90's continued Labour's Rogernomic
deregulation. The budget was balanced, taxes to the rich were cut, labour rights were attacked and welfare spending cut. The
policy was designed to make NZ more attractive to foreign investment. More
state assets were sold (Bank of NZ; NZ Rail; Contact Energy) and others were
turned into 'state owned assets' (SOEs). FDI increased and most large NZ
banks and businesses were bought up by Australian, US and other SMCs in the
form of multinational enterprises, pension funds and private equity funds.
National's response to the
current crisis has been to return to its former agenda of privatisation
and cost cutting to encourage FDI into NZ. However because most valuable state
assets have been sold, National is now focused on partial privatisation
via Public Private Partnerships (PPPs) that allow joint ventures between public
and private sectors in industry and infrastructure. Their policy is to open the
SOEs, roads, schools and jails to joint ventures. In the face of the global
credit squeeze, National has taken the line of global SMC in pushing for
cutting the Reserve Bank interest rate, supporting the Labour-led
government's depositor guarantee. It has promised that the NZ Superannuation
Fund would invest up to
40% of its funds in NZ if it becomes the Government.
In this way National is
hoping to privatise the Super fund to bankroll new
PPPs to create big profits for the private sector. This is like the profit
sharing agreements of Big Oil to exploit Iraqi oil. So while National has already
promised to cut taxes for the rich, and cut to cuts wages for workers, it now
proposes to tap into existing tax savings to transfer it into private profits.
National objects to deficit spending on public works because these are charges
on future taxation which it wants to cut further, so it is determined to
plunder existing tax savings. This is the equivalent of a tax cut for business
and a transfer of public assets from social spending into capital spending for
profit.
Labour's
approach to the current crisis is to revert to the techniques of Keynesian
demand management. As the recession bites Labour is
prepared to increase deficit spending to fund infrastructure work, speed up
house building, and set up skill training for those made redundant by layoffs
and plant closures. The difference between Labour and
National is that while National wants to plunder the existing savings of the
Super Fund to capitalise PPPs for private profit, Labour wants to increase public debt as a charge against
future taxation to stimulate the economy.
Workers'
fight against SMC
Both National and Labour are capitalist parties attempting to facilitate
public investment to stimulate the economy. In the case of National this is a
diversion of existing taxes in the Cullen fund to finance private sector growth
for profits. In the case of Labour it is spending now
to create jobs, housing, roads etc. to maintain consumption paid out of future
taxation which will be created by the ongoing exploitation of workers.
There is no question that
both are propping up SMC in NZ which can only survive by increasing the
exploitation and oppression of workers. Yet when facing these two options
workers at the coming election are being asked to choose between being robbed
of their taxes and pensions now as well as facing lower wages and increased
exploitation in the future, or being kept in public works or job training so they
can continue to be exploited and pay the taxes to fund growth of profits now
and into the future.
Facing this choice there is
only one option for workers. If we take National's option we are agreeing to
being robbed now for the privilege of facing an economy in which wages, living
standards and workers rights will come under increasing attack. If we take Labour's option we reject the plundering of the Cullen Fund
or the cutting of Kiwifund, and agree to deficit
financing to manage the recession and defer the question of who will pay this
debt into the future. Since workers produce the wealth from which ALL taxes are
paid, our strategy is to keep as much of the tax wealth that we produce as
possible as a social wage for use in employing, housing, feeding, educating and
keeping us healthy. It doesn’t matter that this drives up the public debt
because it buys us the precious time we need to organise
and prepare to give our collective answer to the question of who will pay for
the debt in the future!
We say that workers right now
must fight to retain and regain the surplus that they contribute in profits and
taxation by demanding that public spending goes on our wages, health, education
and housing, rather than goes into PPPs designed to boost the profits of the
ruling class in this country!
Fonterra and state
monopoly capitalism
NZ Dairy giant Fonterra, NZ's biggest
exporter, is implicated in the scandal over milk contaminated by melamine in
Why would a
company based on a farmers cooperative ownership which has a long history of
advances in technology and quality control, risk its reputation and its future
by gambling on such a risky venture? The answer is that to compete internationally
against the other Dairy Giants, Fonterra went for high profits and passed on
its risks and costs to the Chinese workers and consumers. At the same time it socialised its risks as the Chinese government and the NZ
Government will have to pay for the damage done to the families and to both
economies.
Of course this makes a mockery of the ideology of the free market that
argues that bad investment decisions should be punished by losses or even bankruptcy.
Fonterra's fiasco in
In a crisis then, neo-conservatives and liberals agree that the state
must come to the rescue to prevent the collapse of the "system". They
argue only over who will pay. The neo-cons like John McCain want tax cuts for
the rich so that the tax burden of the central bank bail-outs will fall on the
poor. Obama wants more taxes on the rich so that they and not the poor will
carry the cost of the bail-outs. But the liberals are only quibbling about who
will bear the costs. It is clear that the rich will benefit most from the
rescues as the biggest and strongest banks and corporations backed by the state
banks will survive. On the other hand, all those workers who lost their
homes and their savings and equity are basically bankrupted.
And in the case of Fonterra you can be sure that it is not the families
of the children who have died or got permanent kidney damage that will win. The
Chinese and NZ states will cooperate to rescue their Free Trade Agreement
by paying part of the health costs of these children. Sanlu
managers may be punished and even shot and the company will struggle to survive,
but Fonterra will escape real damage because it will be baled out by the social
democratic NZ Government against any claims for compensation as it is the
biggest NZ exporter and the backbone of the NZ economy.
Radical socialists object to this fraud. For them the power and wealth
of the elite should not go unpunished. In particular radicals see finance
capital as parasitic on productive capital, and should be nationalised
and put under public control. Hence the sub-prime crisis would not have
happened had Fanny Mae and Freddie Mac (that were formed to provide workers
housing in the 1930s depression) not been privatised
and allowed to fund a huge speculative wave of gambling on housing. They are
now saying "we told you so" and for every 'nationalisation'
of a private bank or finance house, they say "more nationalisation"
and "no privatisation"!
In the case of Fonterra, radical socialists argue that the cooperative
ownership should mean cooperative control. Farmers should throw out the
management that is trying to privatise the company
and investing in production offshore where profits are put ahead of people. If
the producers were in control and not the financiers then Fonterra would be a
responsible and sustainable company. Radical Greens would develop this argument
in the direction of a partnership between the producer cooperative and the
state in investing in sustainable technology to reduce carbon emissions and
protect the ecology, and to ensure that these standards apply in its
international operations.
For Marxists there is more going on here than meets the eye. First,
nothing new is happening. It’s happened before over long historical cycles of
booms and depressions. Depressions are caused by overproduction of capital that
cannot return a profit and they usually lead to the bankruptcies and buyouts by
viable capital. In depressions (or to stop depressions) the public sector has
increasingly intervened to subsidise losses to allow
capital to recover its profitability and restore its growth. Big private corporations are nationalized to
preserve them and prepare them again for re-privatization. With each cycle
capitalist firms got bigger and more multinational in their operation.
Since at least the opening of the last century, big monopoly banks and
corporations have fused as finance capital.
Banking capital continues to operate closely with industrial or
productive capital and both are intimately bound to the state. In fact in the
1950s
We conclude that the subprime crisis is but a symptom of a crisis of
overproduction of capital. It is not an aberration or novelty. The state
monopoly capital “complex” shows that the state does not intervene in the market but rather frames it. ‘Nationalisation’
therefore is not a qualitative paradigm shift from market to state. Rather it
is a quantitative intervention of the state on behalf of all capitalists posing
as the ‘national interest’. Since crises
are inherent in capitalist production, neoliberal, liberal and radical socialist
solutions that involve various forms of state intervention can only resolve
crises at the expense of workers and the ruined middle class.
In the case of Fonterra this can be seen clearly insofar as Fonterra
has become a Dairy Giant at the expense of both its workers and its cooperative
owners. Dairy production has become increasingly concentrated in a large scale
corporate employing wage labor and ownership is shifting from small family
farming cooperatives towards a fully privatized corporation listed on the share
market. It fits the model of a state monopoly corporation that privatizes its
profits and socialists its losses. The only solution to state monopoly
capitalism and its inherent crises is the socialization of the means of
production, distribution and exchange and the building of a socialist economy
and society.
A Marxist analysis of the Current
Crisis
The current crisis is a crisis of the global
capitalist system. It was not caused by bad housing loans but by falling
profits. It puts the whole capitalist imperialist system at risk. There is only
two ways out – either capitalism survives at the expense of the vast majority
of workers and poor people, or capitalism is overthrown and replaced by a world
socialist system.
Blame
deregulation?
Most of the left commentary
on the current credit crunch blames the
As proof
commentators point to countries where stronger regulations prevented the
current housing bubble. Like
What's wrong with this
scenario? Speculation doesn’t result from deregulation. Speculation causes
deregulation. In fact what happens is that an overproduction of capital in
industry creates a surplus fund of capital that has to look elsewhere for a
profit. If it is not invested to make a profit is looses its value. Since it
cannot do this in production it has to do it unproductively in speculating in
assets. To facilitate this finance capital ensures that the government (which
after all is the 'committee of the ruling class') allows it to do so. The
result is overproduction of capital that engages in unproductive speculation in
the future values of already produced commodities. It is easy then to see that
this does not create new value but instead speculates in the rise and fall of
existing values (e.g. houses).
But
why overproduction in the first place?
Overproduction of capital
results from a falling profit rate such that capitalists cannot be sure of
getting a reasonable return on their investment. This happens in capitalist
economies in a cyclical fashion. Increasing investment in new technology makes
labor more productive by increasing the rate of exploitation {s/v - the amount
of surplus value over the value of the wage roughly speaking). Workers can
produce more commodities in a given time, so the labor time required to produce
each commodity is less, and its value and usually its price is less.
Capitalists make these investments then so they can produce more efficiently
and cheaply and take a larger share of the market from their competitors.
Capitalist growth is getting a larger share of the market, usually by these
means, but not always (e.g.
However, while this succeeds
up to the point when the competitors make the same investment to catch up, it
also carries a down-side. This is the fact that the more capital spent on what
Marx calls constant capital which does not add value - plant, machinery,
raw materials to make labor more competitive - relative to variable
capital -wages of workers who do produce new value - then the organic
composition - the proportion of constant capital to variable - rises, so that
the rate of surplus value must rise faster to realise
an adequate profit p = r/c+v (where p is profit, r is
rate of exploitation (s/v) and where c is constant and v variable capital).
Marx calls this tendency
for the rate of profit to fall (TRPF) the most important law of political
economy. It is a general tendency and can be partially offset by
counter-tendencies that reduce the price of c and v by various means among
which are investing surplus capital abroad in colonies and other countries.
Lenin later called this export of surplus capital imperialism.
Jumping to
the current crisis
It's clear that the
In any other country than the
How is this
connected to the property boom?
Well, with billions of
petrodollars held by the oil producers and in demand by the oil consumers, the
As jobs and wages were cut
workers couldn’t afford to keep up mortgage payments, and the huge edifice of
debt now spread right through the international banking system began to
collapse. The sub-prime crisis spread to the credit crunch to the crisis of
"the system" as George Bush calls it. So the bailout, by whatever
name, is to get those bad debts off the balance sheet to allow the banking
system to restore its confidence (to make profits) and start loaning capital
again.
So it is a crisis of the
whole "system" not just the banks. In fact the
Solving the
crisis on the backs of workers - or not
So, far from this crisis
being caused by speculators freed from state regulation, it is caused by the
lack of competitiveness of US domestic industry pushing surplus capital into
speculative assets that have now proven to be valueless. This bubble maintained
the fiction of value because of the role of the US dollar as world money
enabling the
Along with this we see the
restructuring of the labor market to re-assign labor to the more competitive
industries or into the reserve army of labor. Part of the historical
re-adjustment of workers' living standards has been the collapse of inflated
housing prices. The tent cities springing up everywhere prove that this new
phase of
Plan for Socialism
Facing the crisis of the bosses
falling profits and the destruction of many trillions of fictitious capital,
workers internationally must mobilise to solve the
crisis on our own terms. The alternative is capitalist barbarism or workers
socialism! In order for workers to live, capitalism must die!
We are facing more than a crisis (which is the interruption
of the flow of capital) and are now facing a global depression. Depressions
function to destroy surplus capital that is unprofitable so that the surviving
capital can be reinvested in production and realise a
sufficient profit. What is being called the global finance meltdown is no more
than this destruction of surplus capital to renew the conditions for profitable
production. We are witnessing the wholesale
devaluing of surplus capital that has created a massive
speculative bubble in the last decades but cannot return a profit.
State nationalisations to rescue the bosses system
The central banks and the
state treasuries of the major imperialist powers are taking responsibility for
this process of destruction and restructuring of capital. This is to be
expected. Capitalism has always made use of its state power to create and
defend the conditions for capital accumulation -from the 'primitive
accumulation' of conquest and plunder in the 15th and 16th centuries to
conquest and plunder of state monopoly capitalism today. We live in the epoch
of imperialism, in which finance capital -the fusion of banking and industrial
capital - rules through the state machine to invade, destroy and plunder the
world resources for profits.
Thus facing a massive crisis
of devaluation, capital relies on the state to prevent its collapse and demise.
The measures used by the US, EU and UK central banks to subsidise
the losses of banks, including 'nationalising' them,
are being done on behalf of the whole capitalist class in the general interests
of that class (and not as some
would say the workers). It is the general interest of capital as a class that
the weakest capitals are bankrupted and that the strongest concentrate and centralise capitalist assets in larger
firms. This destroys the vast supply of surplus capital that
cannot realise a profit reducing capital stock to the
level that it can be reinvested profitably.
Imperialist
wars on the horizon
This is also true between
nations. While it appears that the rescue operations are coordinated between
the major powers, in reality the costs of the destruction of capital are being
partly transferred from US based finance capital onto their rivals in the EU,
For example, the
Workers bear
the cost of the depression
Clearly it is the working
class that will bear the biggest burden of these bailouts and rescue operations
of finance capital. Depression destroys not only surplus constant capital, but
also variable capital. Variable capital is basically the value of labor
comprising the total costs of the 'wage basket' - food, housing, transport,
health, education etc. Loss of jobs and conditions drives down wages and allows
bosses to reinvest productive capital in industry along with cheaper more
exploited labor. But widespread loss of jobs, incomes, housing etc means that
the process of destruction hits workers hardest and creates the conditions for
the rise of anti-capitalist resistance.
So when the bosses talk about
the destruction of "the system" they don't really mean the loss of
trillions of surplus capital, they are talking about the massive anger and
opposition to the effects of this on the working class that has the power to organise and bring down capitalism and replace it with
socialism. Thus the attempts by the bosses' states to manage the crisis are
directed almost entirely to the management of the impact of the depression upon
the working class and the suppression of organised
anti-capitalist resistance.
The value that is being destroyed
so far is mainly fictitious
capital (the paper assets that have no real value because they cannot
be exchanged for commodities embodying the labor of wage workers). It is of no
interest to workers to defend this fictitious capital invested in non-assets
with no value from destruction. So the housing mortgages that are based on
hugely inflated prices of land and housing should be cancelled. It is a good
thing for this fictitious value to be destroyed so that homes can return to
their real value i.e. the labor-time of the workers producing all the materials
and labor required to replace them.
1.
Mobilise
to occupy homes, fight foreclosures and evictions. Build local union-based defence committees.
The big investment banks are
the headquarters of finance capital. They are the repositories of money
capital, that is, the value produced by workers in commodities that are
exchanged for money deposited by the capitalists in banks. Much of their assets
will be fictitious capital which is reflected in their massive losses following
the sub-prime collapse.
The nationalisation
of the surviving investment banks under workers control would not compensate
their owners for bad assets. It means revaluing assets at their real value as a
capital fund for investment in planned production. Commercial banks based on
workers deposits would be nationalised and combined
as a single state bank.
2.
Nationalise
the banks without compensation and under workers control!
The productive capital
invested in industry only survives on the basis of massive state subsidies as
well as at the expense of workers who have lost jobs, decent wages and
benefits. The sub-prime crisis which triggered the meltdown of fictitious
capital originated in the attacks on workers jobs and living standards so that
they could not afford their mortgage repayments.
3. Occupy
and demand the nationalisation without compensation
and under workers control of all big capitalist corporations and big landlords!
The workers'
fightback needs to be mobilised
by transforming the existing organisations of the
labor movement, the unions. The leadership of the unions is
reformist and defends the class collaborationist policies of social democracy
to moderate the bosses attacks on workers. They
believe in workers collaborating with bosses, so the role of the unions is to
limit their actions to pressuring political parties and voting for those that promise
to bailout ‘Main Street’ rather than ‘Wall St’. They want nationalisations
of finance capital "in the interests of workers". But this is a lie
and a fraud. Nationalisations must not compensate the
bosses’ at the expense of workers and must be under workers’ direct control.
4. Workers
Democracy: for rank and file control of the unions. Build workers’ councils,
and defence committees!
The fight for workers
democracy in the unions means breaking the rank and file from the reformist
leaders who preach bosses democracy and prop up the capitalist class. In the
To make this break it is necessary to build a revolutionary workers party on
the tradition of Marx, Lenin and Trotsky in the vanguard of the union movement.
5
Build a revolutionary Leninist-Trotskyist party in the vanguard of the labor movement!
Class Line in the
Most of the revolutionary
left has responded to the war in the Caucasus with a dual defeatism of the
imperialist blocs on both sides because
Lenin defined
Is
We can ignore the right wing idea that
To become a new imperialist power,
Despite the imperialist powers successful attempts to enter the sphere
of interest of the former SU in the Baltic states, Poland, Ukraine, Georgia
etc., Russia retains a dominant sphere of interest in the CIS, especially in central Asia (Uzbekistan,
Kazakhstan, Turkmenistan etc) and South East Europe (Serbia, Morovia etc).
We would say that
How are
From what has been argued above, it follows that
While in our view
What is decisive in this situation is the fact that
To be more specific, Georgians have been ethnically cleansed from
To conclude, by defending
The correct position is defeat on both sides and defence of the national rights of the oppressed countries
in the region.
Therefore the only way to show to workers in all of these former Soviet
bloc countries that their fate rests with breaking from Russian as well as US
and EU imperialism, is mutual defeat in wars between the imperialist blocs and
their proxies, combined with the defence of the
rights of all these nationalities to self-determination. On the ‘National Question’ Lenin's method was
to prove to workers in oppressed countries that the workers of the oppressor countries
would side with them in their fight to win independence from the imperialist
ruling class. In the current case, this purpose would be defeated if we opposed
only Russian oppression and ignored
Therefore, we are for the right of Georgians to
self-determination against all regional powers including
What we Fight For
Overthrow Capitalism
Historically, capitalism expanded world-wide to free much
of humanity from the bonds of feudal or tribal society, and developed the
economy, society and culture to a new higher level. But it could only do this
by exploiting the labor of the productive classes to make its profits. To
survive, capitalism became increasingly destructive of "nature" and
humanity. In the early 20th century it entered the epoch of
imperialism in which successive crises unleashed wars, revolutions and
counter-revolutions. Today we fight to end capitalism’s wars, famine,
oppression and injustice, by mobilising workers to
overthrow their own ruling classes and bring to an end the rotten, exploitative
and oppressive society that has exceeded its use-by date.
Fight for Socialism
By the 20th century, capitalism had created the
pre-conditions for socialism –a world-wide working class and modern industry
capable of meeting all our basic needs. The potential to eliminate poverty,
starvation, disease and war has long existed. The October Revolution proved
this to be true, bringing peace, bread and land to millions. But it became the
victim of the combined assault of imperialism and Stalinism. After 1924 the
Defend Marxism
While the economic conditions for socialism exist today,
standing between the working class and socialism are political, social and
cultural barriers. They are the capitalist state and bourgeois ideology and its
agents. These agents claim that Marxism is dead and capitalism need not be
exploitative. We say that Marxism is a living science that explains both
capitalism’s continued exploitation and its attempts to hide class exploitation
behind the appearance of individual "freedom" and
"equality". It reveals how and why the reformist, Stalinist and
centrist misleaders of the working class tie workers to bourgeois ideas of
nationalism, racism, sexism and equality. Such false beliefs will be exploded
when the struggle against the inequality, injustice, anarchy and barbarism of
capitalism in crisis, led by a revolutionary Marxist party, produces a
revolutionary class-consciousness.
For a Revolutionary Party
The bourgeois and its agents condemn the Marxist party as
totalitarian. We say that without a democratic and a centrally organised party there can be no revolution. We base our
beliefs on the revolutionary tradition of Bolshevism and Trotskyism. Such a
party, armed with a transitional program, forms a bridge that joins the
daily fight to defend all the past and present gains won from capitalism, to
the victorious socialist revolution. Defensive struggles for bourgeois rights
and freedoms, for decent wages and conditions, will link up the struggles of
workers of all nationalities, genders, ethnicities and sexual orientations,
bringing about movements for workers control, political strikes and the arming
of the working class, as necessary steps to workers' power and the smashing of
the bourgeois state. Along the way, workers will learn that each new step is
one of many in a long march to revolutionise every
barrier put in the path to the victorious revolution.
Fight for Communism
Communism stands for the creation of a classless, stateless
society beyond socialism that is capable of meeting all human needs. Against
the ruling class lies that capitalism can be made "fair" for all;
that nature can be "conserved"; that socialism and communism are
"dead"; we raise the red flag of communism to keep alive the
revolutionary tradition of the' Communist Manifesto of 1848, the
Bolshevik-led October Revolution; the Third Communist International until 1924,
the revolutionary Fourth International up to 1940 before its collapse into
centrism. We fight to build a new, Fifth, Communist International, as a world
party of socialism capable of leading workers to a victorious struggle for
socialism.
Class Struggle is the Bi-Monthly paper of the Communist
Workers’ Group of New Zealand/Aotearoa, a member of
the Leninist Trotskyist Fraction [LTF]
The other LTF
members are the International Workers League (LOI-CI)
and the Trotskyist
Fraction (FT)
Email
cwganz@yahoo.com
Class Struggle is also on our website http://www.oocities.org/communistworker/