[Marxism] "1873, not 1929"

[johnaimani]

There is a simple explanation as to why the United States is in the financial mess that it is.  At bottom, the financial crisis is merely symptomatic of this underlying cause.  No, it is not the GSE's lending of money to subprime borrowers; no it is not CDOs, SIVs, ABSs, nor any of the other exotic financial instruments created by Wall Street to sucker Main Street out of its pensions and savings.  The simple explanation is that we have ceased to work.

 

"What's that?" you say.  We are working longer, harder (and for less) than at any time in modern history.  True.  But what kind of work?  The vast and rich array of value-adding jobs that we once performed are either going or gone.  In their place, this economy has split into, at one end, highly paid professional activities; and, at the other, low-paying service jobs.  In a word, those that make the money and those that serve them.  In a word, trickle-down economics on a societal basis. 

 

Where is the capacity for manufacturing steel, machine tools, automobile, television and consumer electronics in general?  Gone.  Gone overseas.  These and many more truly 'value-adding' positions have been shipped to areas of cheaper labor and the jobs will only return until our wages have been levered down to the level of this competition (as witness the Asian manufacturer's shift from the export of automobiles to the export of their factories to the United States).  And where do the products that we need use come from?  Overseas.  And how do we pay for these imports since we no longer have make goods in equal qualities and equal quantities to effect a fair exchange?  Debt.  Debt is nought but future labor promised for present goods.  But how are we to pay off these balances due if we are no longer laboring as we ought could would?  Simple.  Sell off pieces of the rock.  Now the Asians are exporting capital not in the form of factories but in the form of money-capital seeking equity (ownership) in US financial institutions.  It is the beginnings of many such chickens coming home to roost.  There will be more deals such as the purchase of a portion of Morgan Stanley and all of Union Bank by the Japanese bank MUFG.  What will the Chinese seek with the $1 trillion of promissory notes they now possess?

 

Beneath this financial crisis, harkening back to eerily similar mortgage and financial crisis of the Panic of 1873, it can be discerned that this financial crisis is but a reflection of a crisis of production within the real economy itself.  Old Europe then found itself faced with, what has been termed, the American Commercial Invasion.  A mass of wheat, corn and soybeans as well as products of a mighty manufacturing infrastructure, built up during the Civil War, took the rug out from European agriculture, industry and finance that was at that time undergoing a period of intense speculative activities.  And when Europe crashed America and the whole industrial world followed suit. 

 

Today Old America has been similarly undermined.  In place of millions upon millions of workers employed in value-adding trades there now exist thousands upon thousands of workers employed watching computer screens, yelling into cell phones, pushing paper, moving vast sums of money at the slightest hint of arbitrage; making not planes, trains and automobiles but wagers, guesses and bets.  This is not a confidence crisis, this is not a mortgage crisis, this is not a financial crisis, this is a crisis of capitalism itself.

 

We must get back to working, truly working.  We must get back to building houses, parks and gardens, schools, libraries, highways, bridges, cities.  Capitalism denies us our rights to do so, shifting our jobs, designs and inventions, our factories, our livelihoods away to ports to lower labor costs with not the slightest bit of concern until its own house of cards threatens to come tumbling down.  Then, then it cries out that what is bad for Wall Street is worse for Main Street.  They didn't give a damn before.  And as soon as this bailout bill is passed, they won't give a damn after.  We must invoke eminent domain and seize and take hold of what is left of our productive capacity, rebuild it up, in consonance with the needs of nature and the and wants of human beings.  Only then will these altogether absurd threats of recession, if not outright depression, fade and be consigned to the ashbin of history. 

 

JAI



[Marxism] 1873, not 1929
Louis Proyect lnp3 at panix.com 
Wed Oct 1 06:43:42 MDT 2008 


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--------------------------------------------------------------------------------

The Chronicle of Higher Education  The Chronicle Review

http://chronicle.com/weekly/v55/i08/08b09801.htm

 From the issue dated October 17, 2008
The Real Great Depression

The depression of 1929 is the wrong model for the current economic crisis

By SCOTT REYNOLDS NELSON