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NEWS & LETTERS, October - November 2009
Editorial
Specters haunting G-20
The leaders of the world's biggest economies met Sept. 24-25 at the G-20 summit in Pittsburgh. As with previous G-8 summits, which the G-20 has now officially replaced, the state guardians of the world economy were cocooned by a massive and often brutal police presence, from thousands of demonstrating youth, labor and peace activists. Aside from agreeing to peer review each other's economic policies, the summit was basically lots of happy talk about having saved the world economy from going over the abyss when one year ago an economic meltdown of the system of finance capital threatened an immediate onset of a Great Depression.
What was "saved," with huge and continuous infusions of public monies, was the finance sector, led now by even bigger too-big-to-fail banks again making record profits and fueling yet another speculative bubble. The $700 billion TARP bailout was only the beginning. The Federal Reserve Bank is now in the midst of a $1.45 trillion spending program to buy bad assets from big banks, sending them on their way to repackage risky investments.
Underneath the G-20 happy talk is anxiety over the creation of value in the real economy, where the damage from the world economy's first contraction since the 1930s is permanent; where unemployment, called a "lagging indicator," is now officially at 9.8% in the U.S.; where real investment has collapsed because even a much reduced rate of profit cannot be attained until a lot more of the capital built up during a series of speculative booms has been destroyed; where new tensions between the U.S. and China, now merely sparring over trade in tires, could bring global finance to a standstill.
The world's producers of value, workers, especially the poor, are the ones really suffering. Though nearly half the world's population--over three billion people--live on less than $2.50 a day, according to the World Bank the crisis pushed another 90 million people into extreme poverty--living on less than $1.25 a day.
The Great Recession may be declared over by the lords of finance, but investment for growth in the real economy where value is created has come to a standstill. In place of a sub-prime mortgage bubble, new economic activity has come from stimulus spending and inventory replacement. Behind the photo ops, tensions among the G-20--in particular the "G-2," the U.S. and China--are fermenting over global trade imbalances. Every economy--except the U.S., whose dollar is the world's reserve currency--faces structural adjustments aimed at the standard of living of its poor and working people under the impact of such imbalances. For now, the only thread holding back a blow-up over the dollar among state-capitalist finance centers is not very reassuring: "mutually assured financial destruction."
The barriers to productive investment, and therefore to accumulation in the real economy, portend an even more total day of reckoning. For capital that can only mean a deeper collapse, wherein finance capitalists, whom Marx called the mere "trustees" for capital's social ownership of production, will continue to transparently loot the public treasury to preserve the irrational capital relation at all cost. But this is also transparent for ordinary working people who are outraged and looking for a way to free themselves of being socialized according to the needs for capital accumulation. Never before has there been a greater need to return to Marx, not only for his prediction of total crises, multitudes of unemployed and a falling rate of profit, but his concept of liberation and human solidarity beyond capitalism.
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