Tuesday, November 25, 2008

Financial/Systemic Collapse - Vast Conspiracy of Knowing Conceit and Outright Lying

And just as many others, myself included, have been writing about this massive developing economic crisis for several years, Samir Amin tries to disperse the smoke by adding some needed introspection and historical perspective to the analysis on my birthday. What a nice present. The main thought that immediately hits me is of the vast conspiracy of knowing deceit and outright lying done by Alan Greenspan and Paulson and Bernanke (and all the rest of the enablers of catastrophe) as they take the public's money under false pretenses - and all the rest of the insiders who knew exactly what lay in store for the poor (largely unknowing) peons of the economic world as a result of their hyperdriven greed-framing of the wheels of capitalism). The secondary thought (although I don't know why it's secondary) is that there is no way they will ever be held accountable or we will get our stolen value back. So it goes.

Financial Collapse, Systemic Crisis? Illusory answers and necessary answers by Samir Amin Global Research, November 23, 2008 World Forum of Alternatives (The original French version is available on our French language website www.mondialisation.ca) (Paper introducing the World Forum of Alternatives, in Caracas, October 2008) The financial crisis could not be avoided The violent explosion of this crisis did not surprise us; I mentioned it a few months ago while the conventional economists were ignoring its coming development and consequences, especially in Europe. In order to understand it, we must get rid of the conventional definition of the system which qualifies it as “neo-liberal” and “global”. This definition is superficial and masks the essential. The current capitalist system is dominated by a handful of oligopolies that control the basic decisions making of the world economy. These oligopolies are not solely financial; such as the banks or the insurance companies, but include enterprises involved in industrial production, services, transports and the like. The way they are financialiarized is their chief characteristic. We must understand here that the main source of economical decision has been transferred from the production of surplus value in production towards the redistribution of profits between the oligopolies. To that effect the system needs the expansion of financial investments. In that respect the major market, the one which dominates all other markets, is precisely the monetary and financial market. This is my definition of the "financialiarization" of the global system. Such a strategy is not the result of independent "decisions" of banks, it is rather that the choice of the “financialiarized” groups. These oligopolies hence do not produce profits; they just swipe the monopolies’rent through financial investments. This system is extremely profitable for dominating sectors of the capital. Thus, the system should not be qualified "market economy" (which is an empty ideological qualification) but as a capitalism of financialiarized oligopolies. However, financial investment could not continue indefinitely, while the productive basis was growing at a low rate. Consequently, we have the logic of a “financial bubble”, the sheer translation of the financial investments system. The gross amount of financial transactions reaches two thousand trillion alone, while the world GDP is 44 trillion only. Quite a huge multiple! Thirty years ago, the relative volume of such transactions did not have this extent. . . . As a matter of fact, those transactions were directed in general and expressly to cover the operations linked to production, and internal and external trade. The overall outlook of this financed oligopolies system was – as I said previously - the Achilles’ heel of that capitalist structure. The crisis was doomed to be initiated by a financial collapse. Behind the financial crisis, the systemic crisis of the aging capitalism To attract the attention on the financial collapse is not enough. Behind it, a crisis of real economy is standing out, since the financial drift was continuously asphyxiating the growth of the production basis. Solutions brought to the financial crisis can just lead to a crisis of the real economy, i.e. a relative stagnation of the production with its side effects: regression of wages, growth of unemployment, growing precariousness and aggravation of poverty in the Southern countries. We must speak now about depression and no more about recession. Behind this crisis, the systemic crisis of capitalism is looming right after. The pursuit of the model based on the growth of the real economy –as we know it- and of the consumption attached to it, has become, for the first time in history a real threat for the future of humankind and the planet. The major character of this systemic crisis is related to the natural resources of the planet, now less abundant than half a century ago. The North-South conflict constitutes for that reason the central axis of coming struggles and conflicts. The production and consumption-waste system at the moment forbids the access to the world natural resources for the majority of the planet, i.e. the peoples of the South. Previously, an emergent country could take its share of these resources without questioning the privileges of the affluent countries. But today, it is no more the case. The population of opulent countries -15% of the planet’s population- has to monopolize for its own consumption and waste 85% of the world resources, and cannot tolerate that newcomers may reach these resources, since they would provoke shortages for rich people’s standard of living. If the USA has formulated an objective of military control of the planet, it is because, without it, they cannot secure the exclusive access to these resources. As we know: China, India and the South as a whole need them as well for their development. For the USA, they must limit the access and ultimately, there is only one mean: war. On the other hand, to preserve energy sources of fossil origin, USA, Europe and others develop production of bio-fuel projects to a large scale, to the detriment of food production, still accusing the rise of prices. Illusory answers of the governing powers Governing powers, under the rule of financial oligopolies, do not have any other project except to restore the same system. However, their success is not impossible, if they can inject enough liquidities to restore the credibility of the financial investments, and if the reactions of the victims –working classes and nations of the South- remain limited. But, in this case, the system steps back to better jump and a new financial collapse, still deeper, is unavoidable, since the “adjustments” for the management of financial and monetary markets are not wide enough, because they do not question the power of oligopolies. Furthermore, answering the financial crisis by injecting phenomenal public funds to re-establish the security of the financial markets is amusing: first, profits were privatized, if they are jeopardized, the losses are socialised! Reverse, I win, head, you loose. Conditions for a genuine positive answer to the challenges To say that the State’s interventions may change the rules of the game, lessen the drifts, is not enough. We must define the logics of that intervention and its social purpose. Of course, we could come back in theory to the formulas associating public and private sectors, to a mixed economy as it existed during the glorious thirties in Europe and at the time of Bandoung in Asia and in Africa, when State capitalism was largely dominant, accompanied by strong social policies. But this kind of State intervention is not on the agenda. Also, are the progressive social forces able to impose such a transformation? Not yet to my viewpoint. The other choice is the toppling of the oligopolies’ exclusive powers, unthinkable without, finally, their nationalisation leading progressively to the socialisation of their management. End of capitalism? I do not think so. Yet, I submit that changes in classes' relations are possible, imposing adjustment to the capital, in answer to the demands of working classes and peoples. The conditions for such an evolution to occur imply the progress of social struggles, still fragmented and on the defensive position altogether, moving towards a political coherent alternative. In that perspective, the long transition from capitalism to socialism becomes possible. The advances in this direction are obviously always uneven from one country to the other and from one phase to the other. The dimensions of this desirable and possible alternative are numerous and concern all aspects of economical social and political life. I will recall here the general lines of this necessary answer: (Click here for the rest of the essay.)
Everyone knows this? And no one is hitting the streets? Suzan __________________________________

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