The economic crisis that is steadily engulfing our country is getting broader and deeper. This is not just another recession. The market economy system is running out of steam. The temporary “fixes” that have been used over the past 30 years to patch up the capitalist economy and keep it going no longer work. Now, only fundamental change that addresses the underlying problem will get us out of this mess.
What is the underlying problem? While the corporate press talks of the
bursting housing bubble and the subprime mortgage mess “spreading to
the broader economy,” this is only a symptom of the problem. At the
root of the crisis is the way a market or capitalist economy really
It works through workers selling their ability to work – their labor
power – to a capitalist in return for wages. That labor power creates
more economic value than it consumes – this is the source of profit.
The capitalist owns what the worker produces and sells it to get his
profit. The “market” that the capitalist sells to consists of
businesses and workers that have money to spend. The basic problem is,
the market is being destroyed because advancing technology is replacing
workers and wiping out jobs and whole industries. As more workers
compete for fewer jobs, wages fall for those who still have jobs.
Technology, combined with globalization, also means millions of jobs
can be shipped overseas, so workers in one country are competing for
jobs with workers all over the world.
The result? A new class of dispossessed workers – permanently
unemployed, or with only temporary, low-paying jobs – is being created
and is moving steadily toward becoming the majority. Workers will
little or no money cannot consume. This destroys the market for what is
produced, and the market economy begins to fail. This is the foundation
of the crisis we see developing now.
Until now, the crisis has been averted. For about the past 30 years,
the US economy has been propped up with borrowed money. Workers and
homeowners have borrowed on their credit cards and against their homes.
Banks, investors, industrial firms and the US government have borrowed
from foreign investors and governments. The US today relies on $2
billion a day from abroad to finance investment.
The periodic recessions and other economic crises that have developed
have been temporarily solved with more borrowed money. But sooner or
later the loans have to be repaid. And now everyone involved is out of
options. Unemployed and impoverished workers can’t pay. Without buyers,
businesses can’t sell what they make, and now they can’t pay. Seeing
this, bankers and other lenders are pulling back. Credit is drying up.
The US “Rust Belt” – the former industrial heartland – tells the story.
Look at Michigan, for example, where auto layoffs and buyouts continue,
and 400,000 jobs have been lost since 2000.
The jobs aren’t coming back, and new “New Deal”-style government
programs won’t solve the problem. It does no good to put money in the
hands of workers who will never again have jobs. Once the money is
spent, we’re right back where we started. During the Great Depression,
it wasn’t Roosevelt’s New Deal programs that ended the Depression, but
World War II, which put everybody back to work. But today, the military
industries and modern warfare are so automated, even another world war
won’t put many people to work, and it would probably destroy the world.
History shows that depression, war and fascism go hand in hand. If we
continue to follow capitalist leadership, war is where we’re headed.
And we’ll have fascism in the bargain, as the corporations seek to turn
us against each other so we don’t turn on them.
There is only one way out of this – we, the people, must organize
ourselves to fight for a new society where we use the marvelous
technology at our disposal to produce everything we need and guarantee
that everyone has the necessities of life. It is a world worth fighting