Capitalism’s unsoundness

Mike Whitney, in “Economic Depression in America” (June, 2008) writes: “The real origin of the problem is…in the prevailing ‘trickle down’ orthodoxy which opposes any increases in wages or benefits for working people… (T)oday's captains of industry and finance refuse to accept … that if workers aren't adequately paid for their labor--and wages do not keep pace with production--then the economy cannot grow because consumers do not have the money to buy the things they make.

“Greenspan and his ilk believed that they could prosecute the class war and make up the difference by relaxing lending standards, changing bankruptcy laws, and by creating a nearly endless array of exotic financial products that expanded credit… By crushing the worker the Friedmanites have killed the golden goose. The world's most prosperous consumer society is in terminal distress and no amount of ‘free market’ gibberish will keep it from crashing.”

That capitalist orthodoxy of profit maximization at the expense of workers and producers in general, has been swallowed hook, line and sinker by the crop of Philippine economic policymakers/managers in a succession of governments post independence. The “sound economic fundamentals” that they crow about is nothing more than this backward feudal (not just agricultural) economy tied to and almost completely dependent on foreign, especially the US, capital and economy.

The remittances of Filipino migrants, foreign loans, foreign investments (direct and speculative) are what keep the Philippine economy afloat, albeit floundering, in the rough seas of debt and deficit. All this time, the economy has been in a state of chronic distress, even as the ruling elite and the government continue to give standard assurances that it can weather any external shocks such as soaring oil and food prices as well as economic downturns in the economies of its biggest trading partners and a slew of host countries for Filipino migrant labor.

Capitalism’s, or more precisely, monopoly capitalism’s latest doctrinal expression is the so-called neoliberal or “free market” policy framework with its regime of liberalization, deregulation and privatization under the popular signboard of “globalization”. In the Philippines, this dogmatic mindset-- passed of as conventional wisdom--has wrought record levels of joblessness and intensifying/expanding hunger, poverty and misery; persistent macroeconomic fragility with periodic acute economic/financial crises; intractable social unrest and armed conflicts; the inevitable escalation of military/police crackdowns; and an overall climate of political instability and state repression.

The US and world financial meltdown and economic recession is generating waves of destruction that can engulf the hapless economies of dependent/semicolonial countries such as ours. The Filipino people, especially the masses of the poor, exploited and oppressed, have long been suffering from the economic crunch. With the latest financial turmoil hitting the centers of global capital, the situation is bound to get worse. There can be no easy way out.

If anything can be salvaged from this catastrophic situation, not seen since the Great Depression of the 30s, perhaps it would be by treating it as a wake-up call. This most destructive crisis of finance capitalism should cast serious doubt on, if not shatter, the myth of "sound fundamentals" intoned by our thoroughly brainwashed and/or untruthful economic and political leaders.

We need to break our overweening dependence on foreign capital and economies. Instead we should strive for greater self-reliance and economic as well as political sovereignty so that we can chart an independent course to genuine agrarian reform, national industrialization, economic prosperity, egalitarianism and social justice.

Rough seas are ahead not only for Philippines and other under/maldeveloped countries, but for peoples all over the world. The crisis will not only be in the sphere of the economy but in geopolitics as well.

Grave economic crises have always been followed closely by war, because war has always been a way out of crisis, albeit temporarily, for the monopoly capitalists, imperialist states and their client regimes. This has been the case from the turn of the century, when capitalism qualitatively changed from its free enterprise to monopoly character, to include the Spanish-American War, the two World Wars, the "Cold War" between the US and the Soviet Union and the US-led "war on terror".

The grounds for the so-called “war on terror” were actually being laid when the economic crisis (slowdown, unemployment, runaway household and federal debt, etc) started. As revealed by US geo-political strategy documents and policy papers of the neoconservative block controlling the White House, this was long before the putative “terrorist attacks” of September 11, 2001 on the US mainland.

Thus the wars in Afghanistan, Iraq, the Balkans, Sudan, Georgia (South Ossetia) and the war being threatened against Iran are all about oil supply, pipelines and their strategic control. We must not forget that in our part of the world as well, that is, with regard to the country conflict over the Spratley Islands, it’s all about oil and other natural resources plus critical ship lanes too.

The crisis of global capitalism will surely intensify political maneuverings and military intervention and aggression as imperialist powers scramble to retain and extend spheres of influence, dumping grounds for goods and capital and sources of vital energy supplies and other resources.

The war of terror will intensify: the US and other countries have started to use other pretexts (natural and man-made calamities, human rights, ethnic struggles, etc) to intervene militarily and eventually invade sovereign countries. This is already happening right here in the Philippines, overtly in Mindanao but more surreptitiously in other parts of the country where armed anti-imperialist revolutionary forces have taken root.

The up side of all this is that conditions are ever more favorable for arousing, organizing and mobilizing the toiling peoples of the world against their exploiters and oppressors and the system that grinds them down and eventually kills them and their dreams.

People everywhere are struggling to survive and to break free from the unjust and inhuman system of global monopoly capitalism that has kept them in shackles, in order to build a social system that promotes their basic interests, assures them of a life free from want, upholds the dignity of honest labor and ushers in a truly liberating future.

There is a large measure of truth to the observation of an increasing number of analysts that the fundamental reasons for the meltdown we are witnessing today--the fundamental and fatal "unsoundness" of the capitalist system--had long been rigorously and scientifically analyzed 120 years ago, just as it was about to enter its monopoly stage.

The logical conclusion: Capitalism creates its own gravediggers.

*Published in Business World
10-11 October 2008