The capitalist crisis sweeps away myths, false certainties, illusions Let proletarians prepare to sweep away capitalism

The financial storm shows no sign of calming: day after day, with slight, momentary pauses (nonetheless capable of stirring the demagogic enthusiasm of “experts” and “organs of information”), the world’s stock exchanges burn through billions of billions and total instability reigns. At this point no country’s economy is safe – not even in the so-called emerging countries that were supposed to be the engine capable of towing the rusty-wheeled wagons out of the tunnel… Faced with all this, there is utter frenzy amongst the bourgeoisie: the daily papers are awash with streams of words, which all boil down to a single confession – “We don’t know which way to turn!” “Bourgeois thought”, which has never known how, or been able, to get to the bottom of its own mode of production (because in doing so it would have had to admit to its own transience, its historically defined nature, destined for death and replacement by a higher mode of production), reveals to an even greater extent in the age of imperialism (and thus of the totally parasitical existence of the ruling class) its own complete emptiness and inability. From this crisis, which has far deeper roots than it is said to have and which is far from having touched its lowest point, it emerges with admirable clarity that the only possible approach, both from the analytical point of view and from that of a solution, is that of dialectic materialism, communism, the revolutionary party.

At the roots of the crisis

“Crisis of the sub-prime mortgages”, “financial crisis”, “crisis caused by wild speculation”, “crisis generated by the lack of regulations”… Let’s forget the pathetic interpretations that are suggested to us day after day. The crisis explodes in the mid-nineteen-seventies and is a crisis of overproduction. What does this mean? It means that the cycle of expansion that began with the end of the Second World War is over. In its turn, war (precisely as in the first world bloodbath) had been the inevitable response and solution to the capitalist mode of production emerging from the world crisis of the ‘30s – the latter being a pure crisis of overproduction. War had thus destroyed the excess of commodities produced compulsively over the previous decades: amongst these, the “special commodity” of labour should not be forgotten – the millions of proletarians massacred on both sides. Not only this: the impulse of reconstruction in the second post-war period (both in defeated and victorious countries) had fuelled the capitalist production machinery to an enormous extent, leading to the extraordinary economic boom of the ‘50s and ‘60s, abundantly paid for by the proletariat all over the world (colonies and ex-colonies included). From 1945 to the mid-seventies, the “volcano of production” was in constant, unceasing eruption, fuelling the whole progressive rhetoric of the “best of all possible worlds”, the “end of class differences”, “technology as the answer to everything”, “wealth within easy reach.”

However, we communists know that opposite the “volcano of production” there isalways the “quagmire of the market” –  the impossibility of the world market being able to absorb all the commodities it has produced, in the name of production for its own sake and the competition of all against all [1]. This perverse mechanism is not the fruit of individual malignity, the greed of the individual capitalist. In an attempt to contrast the law of the fall in the average profit rate [2], capital (as asocial force) is obliged, by the very laws of its own mechanism, to produce more and more, to compete more and more, worldwide, to find ways of endless self-valorization. It cannot keep still, it cannot impose limits on itself, it cannot do without profit and unregulated growth: “+” is its hallmark, “-” its daily terror.

In those thirty years this is exactly what happened, in the east as in the west, in the “western democracies” as in the so-called (unjustifiably, as we have always demonstrated) “countries of real socialism” – i.e. in the capitalist mode of production, which was dominant everywhere in different forms according to historical contingencies, but ones already very familiar (and that can always be traced back, in this second post-war period, to more or less highly developed “state capitalism” extending to the various production sectors, to “state intervention”, to the welfare state, as a form of economic and social domination typical of the expansion phase).

In the mid-seventies this mechanism started to fail. The “volcano of production” had now filled the “quagmire of the market”: the tidal wave of excess commodities had overflowed its banks. From this moment onwards there has been an uninterrupted sequence of crises, initially local, low-intensity ones, but extending increasingly and becoming more severe: the 80s and 90s are clear proof of this. The crisis of overproduction has resulted in capital, on the world market, no longer being able to valorize itself at the necessary rate and to the necessary degree, with those production and profit rates that are wrongly imagined to be necessary for attempting (in vain, it must be stressed) to combat the bête noire of capital: precisely that fall in the average profit rate, which represents its death sentence.

A crisis of overproduction, then. And, thus, a crisis of the real economy, as they say today: a crisis arising out of production [3]. To deal with this, capital looked for other ways, potentially faster ones, of accumulating money, i.e. the path of finance.  It invested enormous sums (individual, national, multinational) on the stock exchange, making use of the financialization of the economy typical of the imperialist phase of capitalism. But continuing to play the stock market when production is suffocating and competition on the world markets is growing keener and keener inevitably means creating bubbles of speculation. And it is in the nature of bubbles of speculation to burst: just as happened throughout the 80s and 90s, culminating (for now) in the “crisis of the sub-prime mortgages”.

We repeat: the roots of the crisis are not to be found in finance, in wild speculation, but in the real economy, in the overproduction of commodities and capitals and in the consequent impossibility of capital to valorize itself at the necessary rate and to the necessary degree.  The chain is not: wild speculation by financiers and unscrupulous players on the stock exchange who obey no rules – financial crisis – recession. The chain is (broadly speaking for the sake of argument): hyper-production in the second post-war period after the destruction of commodities and labour in the second world bloodbath – market saturation in a matter of around thirty years – crisis of overproduction from the second half of the seventies onwards – difficulty and slowdown in the process of self valorization of capital – attempt to find quick and remunerative shortcuts to remedy capital’s state of suffocation through financialization of the economy – creation of financial bubbles with their successive and increasingly serious explosions (for reasons of space, we shall not give examples, but they are well known) – a chain of bankruptcies of banks, credit institutes and credit crunches – repercussions on the real economy with aggravation of the cycle of recession already in progress (and for the moment we shall stop here, at this link in the chain).

Briefly, the capitalist mode of production is in its death throes.

State intervention

At this point, as the storm grew, a great racket was caused by the decision, gradually taken by the governments of all the big countries, on a massive intervention to support the bank crisis with huge injections of capital, even to the extent of a wave of nationalizations. This led several fools to exclaim, “But this is socialism!”, endorsing the idiotic equation “state-controlled=socialism”, that both Stalinists and Trostskyites have believed in (whether in good faith or not) for decades, without counting the numerous droves of rascally supporters of economic liberism.

This state intervention came as no surprise to us communists, and for many different reasons. On the one hand because the state is a tool of capital and of the ruling class, not an independent and impartial subject: both as an investor and in the guise of the policeman, the state, especially in this imperialist phase, can do none other than defend and promote the interests of capital – as is confirmed by the history of the whole course of bourgeois domination and in particular that of the 1900s [4]. On the other hand, we were not surprised because, over the past century, state interventionism (in different forms and ways, which are essentially similar and convergent) has inevitably presented itself as the leitmotif of the bourgeoisie’s political rule. It was as much a characteristic of Nazi-fascism, in the form of dictatorship (in order to defeat a combative and threatening proletariat in an area critical for the outcome of the world revolution), as of the U.S. New Deal in the form of democracy (where no such direct threat existed); and it was a characteristic of Stalin’s Russia, where a young capitalism had to be fully developed at supersonic speed, so that it could hold its own with the great existing monsters of imperialism [5]. But it was also a characteristic of the entire political-economic development of the second post-war period which, beneath its superficial and wordy democratic rhetoric, represented perfect continuity, not with the economic liberism of the phase now definitively outgrown by bourgeois supremacy (before the First World War, to be precise), but with those same centralized and state-controlled regimes that came out of the war defeated. As we have never ceased to declare and to demonstrate in this half century, “the fascists were defeated, fascism won:” in the sense that the substance typical of imperialism (centralization, financialization, state intervention, with all their political and social effects) was transferred from one form to another, smoothly and with no interruption,.

As we wrote in 1947 (sixty years ago!):

“The present war has been lost by the fascists but won by fascism. Despite using a democratic veneer, having saved the integrity and historical continuity of one of its most powerful state units, even in this tremendous crisis, the capitalist world will make a further huge effort to dominate the forces that threaten it and set up an increasingly severe system of control of economic processes, paralyzing the autonomy of any social and political movement that threatens to disturb the established order of things. Just as the legitimist victors over Napoleon were obliged to take on board the inherited social and legal structure of the new French regime, the victors over the fascists and the Nazis, in a more or less brief and more or less transparent process, will recognize by their acts – though denying it in the words of empty ideological proclamations – the need to administrate the world, so tremendously shaken by the second imperialist war, with authoritarian and totalitarian methods which were first experimented in the defeated countries.

“Rather than being the result of difficult and apparently paradoxical critical analyses, this basic truth is becoming more evident day by day in the work of organization for economic, social and political control of the world. The bourgeoisie, once individualist, national, liberist and isolationist, now holds its world congresses and, just as the Holy Alliance attempted to stop the bourgeois revolution with the International of absolutism, today the capitalist world tries to found its own International, which cannot help but be centralist and totalitarian.”[6]

Those who then wish to verify this affirmation by means of a systematic study of what has happened in the field of capitalist economy in the second post-war period and in related state interventions in the economy, can do so on the basis of the detailed analyses contained in our regular studies on “The Course of World Capitalism”.

No surprises, then, for us communists, when we come across nationalisation and central intervention by the state: indeed, a splendid confirmation of Marxist theory and the certainty, confirmed by bourgeois practice itself, that we are going in exactly the right direction.

Another confirmation comes from the fact that, in any case, capitalist economy is constitutionally unable to be self-regulating, because it is based on the sovereign law of profit and thus of competition with no holds barred, and this law means that, of course some extent of regulation is necessary; of course some degree of excess must be regulated; of course some attempt to create “world organisms of control” should be made: but in the end, beyond a certain limit, this same law enforces itself brutally and once again powerfully affirms itself. The proof of all this lies in all that is being said today, with more or less penitent capitalists and financiers declaring that “it is the real economy that must become the centre of attention once more,” that the massive state interventions to restore liquidity in the banks must serve to “put the real economy back on its feet”, to “get it out of the recession”…etc. etc. Or in the admission of George Bush himself (a real testimony to meditate upon!): “I remain a convinced liberist but the necessities of the economy make central intervention necessary.”

However, this rosy prospect of a new take-off then comes up against a fact that is far more real: that the economy is already in recession because of a crisis of overproduction, that the market is already saturated with goods as well as with capital. The capitalist mode of production thus flounders around in its essential contradiction: “volcano of production or quagmire of the market?”

Winds of War

Faced with all this, what is the meaning of all this talk (common to the ruling classes in every country) about returning to investments in the real economy? On giving impulse to industry again? On increasing productivity and production? On getting out of the tunnel of recession by launching consumption and making the national economy more competitive on the world market? And so on, from one lot of words to the next?...

It means, quite frankly: the conditions are being created for a new war, which will not just be a commercial one (as there has always been in this second post-war period) but which will necessarily have to be fought by making war. In other words, in a crisis, capital can do none other than return to the only final solution it knows: the one it has always turned to in similar situations, in 1914 as in 1940 – aworld war, to destroy everything that has been produced to excess.

If, at this stage, someone is tempted to exclaim. “The same old catastrophists!”, they had better stop and think. The classical definition given by Von Klausewitz of war (“the continuation of politics on a different level, and with different means” – of the politics of preservation of capital, we would add) is so well suited to bourgeois society that it might easily be turned around: i.e. defining politics as the projection on a different level and with different means, of that permanent state of war (though mostly carried out underground) that is capitalism’s real way of being and becoming. A war between individual capitals in daily economic life; a commercial war between concentrations of capital and thus, in the long term, also between States, for the control of markets and for predominance in vital sectors of production and supplies of raw materials; first a diplomatic war, then one waged by warfare, when the antagonisms inevitably linked to the process of the expansion of capitalism reach a level of extreme tension and look for their “solution” in armed violence, in war tout court.

Obviously a number of different factors must concur for the link between the successive stages of a single process to become evident, and for the collapse of those theories so skilfully constructed and propagated in support of the ventilated possibility that equilibriums reached in one of them consolidate in a sort of “perpetual peace”, albeit a restless one. In the Marxist vision, not only is it true that in a capitalist age wars are a necessary and unavoidable product of the current mode of production (and only the proletarian revolution can stop them breaking out or violently interrupt their progress). It is also true that, in certain periods (of crisis in the mechanism of capital accumulation), it is the extreme remedy that the bourgeoisie cannot help turning to, to safeguard its  dominion through the mass destruction of capital, commodities and labour – of men and women, that is – and of the products of their hands.

Of course this does not mean that the bourgeoisie embarks on a war on the basis of carefully weighed calculations or the free decisions of their legislative or executive bodies: it is the very existence of capitalism, its vital needs, that set in motion the mechanism of the conflict, starting out from the preliminaries of what will then become the formal declaration of war, right up to conducting it practically, materially and ideologically. War does not break out either “by chance” or “at the desire” of individuals or groups: it is the final outcome of an objective situation that has matured in a whole variety of sectors and exploded at the breaking point of power relations between the economies of the countries that are candidates for the role of belligerents.

Thus, in the past two decades, the winds of war have never ceased to blow. For those who are not so stupid as to believe that wars are waged to “save democracy”, to “strike down rogue states”, to “get rid of dictators”, it is clear that these more or less local or area wars (which have meant and continue to mean themassacre of civilians and widespread destruction – i.e., manna for those involved in the reconstruction) are the direct effect of this crisis: the control of strategic positions, occupation of areas rich in energy (both from the point of view of raw materials and from that of the passage of oil-lines and gas-lines), the exclusion of the main economic players. These are the reasons for the first Gulf War, the war in ex-Yugoslavia, the second Gulf War, the intervention in Afghanistan and so on, throughout a region that reaches from the Balkans to India and is proving increasingly to be a critical seismic fault-line in the capitalist mode of production.

The present phase characterized by the explosion of the speculative bubble of the “sub-prime mortgages” is thus only the most recent chapter in a long phase that began in the mid-nineteen-seventies. It is destined to drag on with high and low points for a few years, burning through hundreds and hundreds of billions of billions of dollars, euros, yen, yuan (giddy sums that are themselves the best evidence of market saturation), increasingly aggravating the living and working conditions of millions of proletarians all over the world and making the process of proletarianization of the middle classes more acute, leading to a further giant concentration of banks, financial and state companies, exasperating international competition and hostility. But this will be nothing compared to what is to come afterwards: a further and far more devastating crash that will mean an even tighter turn of the screw, a most violent acceleration in the objective processpreviously described. The problem is: how to stop this once and for all?

The effects of the crisis on the proletariat

There is no need to spend many words on what are (and above all will be) the effects of the economic crisis, as it becomes progressively tighter and keener: wages that are increasingly insufficient to secure a decent living, generalized increases in the prices of basic commodities and services, the soaring of unemployment and gigantic waves of migrants without reserves and, for those who may remain in employment, increasingly intense exploitation in the name of productivity and making the company and the nation competitive, progressive cuts in all the “guarantees” conquered by labour struggles over past decades, a head-on attack on the forms and objectives around which proletarian battles are waged and organized, military-police control on daily life  and on any type of antagonistic behaviour, or even any behaviour which is not in agreement with “social pact” and “national solidarity” policies… All aspects which, to a more or less minor degree, are already present everywhere, in Italy as in France, in Great Britain as in the United States, in China as in Russia, in Israel as in Iran and India as in Japan; but with the deepening economic crisis they can only become more serious and acute. The bourgeoisie is obliged to cut away all the dead and unproductive branches, it must use the whip to try and bring home the maximum profit possible, it needs a docile and obedient labour force, fragmented and in competition with one other, passive labourers today and drugged tomorrow by the myths of the nation and the fatherland, ready to transform themselves from beasts of labour into cannon fodder – this is the cruel, bare truth and proletarians must look it in the face without illusions.

Not only this: the crisis is already striking and will continue to strike increasingly hard at all the intermediate strata, too (the middle classes, the lower-middle classes), who have always deluded themselves that they could hitch onto the triumphal chariot of capitalism, humbly picking up the crumbs, but now see themselves plunging into the proletarian abyss, simultaneously losing the spin-offs and the social status that have been their foolish boast up to the present. This lower-middle class, which is turning nasty and has no desire to accept the inevitable process of proletarianization that is already affecting it, is a powerful enemy of the proletariat; on the one hand because it is the vehicle of all typical and infectious ills (individualism, career climbing, mental closure, rancour towards those who are different, a tendency to change colours, the inability to be coherent, the obstinate desire to “reform” the un-reformable…); on the other hand, because it will always be the first to proclaim its obedience to the bourgeois State in its policing and military adventures, like a fury against the struggling proletariat. And here again, we can quite clearly see all the warning signs.

Faced with all this, we communists do not have high-sounding or demagogic recipes for success. We have a prospect to indicate, that is amply confirmed by the same hard facts of daily life: the unstoppable progress of the economic crisis, the deterioration of all working and living conditions, the approach of a new world bloodbath. And we have a programme of struggle to confirm: the capitalist mode of production must be overthrown before it proceeds to massacre millions of proletarians once again (risking at the same time to destroy itself and with it the human species); its defeat can only be brought about by a proletariat that takes up the fight again in its own immediate and future interests and can only come about under the guidance of a newly restored world communist party, to whose extension and entrenchment the more aware of the proletarians and the avant-garde in the struggle must give their vital contribution; the capitalist mode of production must be replaced by a classless society, if humanity wishes to survive.

This means:

* The relentless defence of living and working conditions, using the classical arms of the class struggle: strikes with a deep, long-lasting and widespread effect; the blockage of production and services; unification, centralization, generalization and organization of fights beyond the limits of the individual company, category, sector; effective unity between employed proletarians and the unemployed, those “born and bred” in the country and immigrants, men and women, young and old; a strike fund to support the action; the defence and protection of proletarians suffering state repression and of their families. An attack on the individual is an attack on everyone.

* An open battle to win large rises in wages, bigger ones for the worst-paid categories, and drastic reductions in working hours, at the same wage.

* The rebirth of rank-and-file organisms capable of organizing proletarian action and battles effectively, in opposition to the complete betrayal of the official unions.

* The interruption and boycotting of any type of solidarity with capital on all levels (company interests, the national economy, preparations for war, patriotic and military propaganda however disguised, mobilization and intervention) and the re-affirmation of the only possible solidarity for proletarians: international and class solidarity. Not a single man for capital’s war mongering.

* The strengthening and rooting of the revolutionary party internationally, in the necessary perspective of the violent seizing of power and the installation of the dictatorship of the proletariat directed by the party.

Capitalism can bring only hunger, destruction and massacres.

The time has come to choke it once and for all!

1See: “Vulcano della produzione o palude del mercato? [Volcano of production or Quagmire of the Market?]”, Il programma comunista, nn.13-19/1954.

2 The proof of this law, documents in hand, lies in our constant work of analysis of the “course of world capitalism”, carried out by our Party since the nineteen-fifties, not so much on the latest episode, which has made the news, but throughout bourgeois economic history. There is an enormous amount of material: suffice it to consider the two reports “Traiettoria e catastrofe della forma capitalista nella classica monolitica costruzione teorica del marxismo [Trajectory and Catastrophe of the Capitalist Form in the Classical Monolithic Theoretical Construction of Marxism]” (Il programma comunista, nn.19-20/1957) and “Il corso del capitalismo mondiale nella esperienza storica e nella dottrina di Marx [The Course of World Capitalism in the Historical Experience and Doctrine of Marx]” (Il programma comunista, nos.16-24/1957 and 1-9/1958). An effective summary is to be found in the reports on the “Course of Capitalism” held at the recent General Meetings of the party and gradually published on our Italian-language newspaper, Il programma comunista (for example, in nos. 4/2004, 1/2005, 4/2005, 1/2008). As regards the so-called “real estate bubble”, its origins and nature, see the articles published in nos. 5/2006 e 4 e 5/2007 of this same newspaper.

3 To those who object that there has been no lack of crises in previous decades, from the end of the war onwards, we reply: of course they have not been lacking – the best example is the immediate post-war period, with times of crisis that struck the victorious and dominant imperial power – the USA. But the characteristic of the crisis in the mid-seventies is that, for the first time since the end of the war, it struck simultaneously at the economies of the world leaders, who all found themselves hit by crisis at the same time for the first time, and no longer in isolated ones as had happened previously (and therefore with the real chance of off-loading their own particular crisis onto others).

4 In this regard, see our party works entitled “Il ciclo storico dell’economia borghese [The Historical Cycle of Bourgeois Economy]” and “Il ciclo storico del dominio politico della borghesia [The Historical Cycle of Bourgeois Political Dominion]”, both published in no. 5, 1947, of what was then our theoretical journal Prometeo.

5 It is as well to recall briefly that for us there was no “building of socialism” in Russia but that, in the absence of a proletarian revolution in the west, the October Revolution (communist in perspective and political strategy but with capitalist economic tasks) ended up by collapsing, with the result that bourgeois economic forces (which could not help but be encouraged) gained the upper hand over the revolution and the Bolschevik Party itself, strangling the former and massacring the latter. Thus, in Russia, capitalism affirmed itself, with state management of heavy industries and a wide variety of phases of capitalist development in other sectors. The “fall of the Berlin Wall” in 1989 is not the crash of communism for us (since it never existed, either in Russia or elsewhere), but the devastating effect of the economic crisis penetrating even into countries with a more or less state-run economy, in order to accumulate capital. The study of Stalinism we are publishing in our Italian-language newspaper Il programma comunista gives an even clearer account of what our party has never ceased to argue, ever since, in 1926, the bastard, counter-revolutionary theory of “socialism in a single country” was advanced.

6 “Il ciclo storico del dominio politico della borghesia [The Historical Cycle of Bourgeois Political Dominion”], cit.

7 Cfr. “Vulcano della produzione o palude del mercato?”, Il programma comunista, nn.13-19/1954.