|The News Line: Editorial
Tuesday, 26 February 2019
Economic crisis of capitalism can only be resolved with socialist revolution
THE PLUNGE of world capitalism over the precipice of an almighty crash has become so obvious that a sense of panic is gripping bourgeois economists and politicians as they face a world crisis that they are powerless to avoid.
Over the weekend the ratings agency S&P Global reported that global sovereign debt will reach $50 trillion this year as governments are forced to run up huge levels of debt just to pay off existing debts!
According to an analyst at S&P Global: ‘Some 70%, or $5.5 trillion, of sovereign’s gross borrowing will be to refinance maturing long-term debt.’ Earlier this month the USA reached a historical milestone when its national debt went over $22 trillion, making total US debt nearly ten times the size of the combined debt of France, Germany, Italy and the UK.
This is capitalism today, a system that only survives through eye-watering and continually growing debt while at the same time running down and destroying productive industry. Global recession is now a fact of life as major industries close down, a fact underlined by the US Federal Reserve Bank which reported that growth in US Gross Domestic Product (GDP), the measure of the economic performance of a country, has halved since January.
The economic growth of the most powerful capitalist nation in the world is fast approaching what one writer has called ‘stall speed’. What has confounded economic commentators, is that side by side with the collapse of productive industries like the motor industry, there has been the unparalleled boom in the stock markets and share prices over the last two months.
What is now being rammed home to them is that this ‘boom’ was the result of just more accumulation of debt, including US president Trump’s $1.5 trillion hand-out to the corporations and banks in his fiscal package last December. Most of this free money, along with all the trillions pumped out by central banks under their Quantitative Easing programmes, went in speculation in stocks and for corporations to buy-back their own shares and so inflate, on paper, the value of these companies.
While workers in the US and Europe are seeing their factories and plants closed, these corporations are paying out billions in pay and bonuses to the bosses and fortunes to their investors on the back of free money that the working class are being made to pay for through austerity.
The revolutionary implications of this have not been lost on the capitalist class. Last week Democrats and even Republican politicians, who had previously cheered Trump’s hand-out, lined up to call for legislation to stop companies engaging in buy-back, dubbed in America as ‘corporate cocaine’ with these companies which produce no profit through production addicted to debt and ‘free’ money.
What drives them is the fear that the American working class have had enough of low wages and industrial closures and is moving forward to deal with a capitalist system which is determined to make workers pay for its crisis.
This was reflected in Trump’s unprecedented warning in his presidential address of the danger that American workers and youth were embracing socialism saying ‘we are alarmed by new calls to adopt socialism in our country’ and vowing ‘America will never be a socialist country.’
This expresses the fear of a capitalist class that is weak and desperate in the face of an economic crisis from which it cannot escape and which is driving the working class across the world to rise up and tear apart the old political order of capitalism.
In Europe, it has seen the rise of mass anti-austerity movements like the Yellow Vests which started in France and is spreading across the continent and the decisive blow inflicted on the capitalist EU by the vote of the British working class to leave which has torn apart the old two-party system.
Across the world the crisis of a capitalist system that can no longer develop the productive means to satisfy even the most basic requirements of humanity is inspiring socialist revolution.
The decisive issue of today is the building of revolutionary parties of the Fourth International in every country to lead this mass movement to the victory of the world socialist revolution.
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