World Capitalism in Crisis
3.1. It has been seen that the possibilities of crisis constantly exist within the capitalist system. The contradiction between the social nature of production and the private nature of capitalist appropriation is at the root of this crisis. This contradiction between social production and private appropriation is constantly becoming deeper. Even as the world produces and consumes more the rich-poor gap widens.
3.2. The crisis that struck the world recently originating from that haven of capitalism, the USA, is a combination of financial crisis and an economic depression. Based on the market economy, on speculation, and on the 'profit first' principle, the maximization of profit under neo-liberal dispensation, the financial economy has grown several times over the real economy. The sub-prime speculation in the US hit the financial economy like a tsunami, leading to the bankruptcy and collapse of several giant banking institutions in America. It spread to other developed capitalist countries and adversely affected the economy of most developing countries. If India and China could manage to avoid the worst it is because the financial sector was very largely in the hands of the state. For this in India the credit belongs to the communists and the Left and to the unions in the financial sector who tenaciously and firmly opposed the move of the bourgeois government to move towards privatization of these sectors.
3.3. The failure of, the all-powerful US monopoly capital to recover from the economic meltdown underlines the general crisis of capitalism. This is despite the fact that huge financial packages running into trillions of dollars in the entire capitalist world were handed over to the capitalists to 'stimulate' the economy and help its recovery. All this was done at the expense of the working class and other sections of the people, for whom social spending from the budget was drastically cut and austerity measures were imposed on the people in a blatant move to pass on the burden of the crisis on to the toiling sections and the common people. Several countries like Greece, Portugal, Italy have been on the brink of bankruptcy.
Job loss, unemployment is the major form of attacks on the working people as a way-out of the crisis of capitalism. The International Labour Organisation in its 'The World of Work Report 2011 ' has painted a gloomy picture of the world economy and said just 40 million or half . of the 80 million jobs were likely to be created over the next 2-years. Most of these new jobs would be created in the developing world, while just 2.5 million would be created in advanced economics. As a result, industrialized countries would be short of 24.7 million jobs during 2012 and 2013, it said. The developing world, including India, needs to create 53 million jobs in the next 2-years, required to attain pre-crisis employment rates.
3.4 The US had been all through the decades a consumer society living beyond its means. It has been described as a parasite sucking the blood of others by using its economic and military might. Its foreign debt has accumulated to unprecedented and unmanageable dimensions. The danger of default to its creditors stared this mighty country in the face. It had to enter into a 'deal' between the Democrats and the Republicans to limit the debt ceiling and to cut its excesses. This has led to the downgrading of US credit rating for the first time in history.
There is good deal of talk about environmental standards today. People have woken up to the issue of preventing environmental pollution and protecting the ecological balance. Actually the profligate consumption in which the world's rich indulge is the single biggest factor in destroying environment and upsetting the ecological balance. The manner in which driven by the craze for earning super-profits, resources of this earth are being denuded and the entire ecosystem is being destroyed; the speed at which the air, the terrain, rivers, lakes and seas are being polluted, spell disaster for the future of entire humanity. The most industrialized nation, the one which is responsible for the maximum damage to the environment, viz. the United States of America, has refused to sign the 'Kyoto Protocol', E.U. and the USA are stalling fruitful negotiations at the World Conferences on Climate change.
3.5 The size of the financial economy today is several times bigger than the real economy. This is so both globally and in each country. This has given rise to tremendous volatility to finance capital leading to widespread speculation, movement of capital across borders, instability in national currencies etc. The dominance of finance capital, of the money market overall and a liberalized system has come to mean an' over- heated stock market and unrestrained speculative activities by which colossal sums are transferred from public to private pockets and huge profits are raked in without any corresponding productive activity. In this free-for-all market, money has a merry free run. The foreign banks lead in this swindle from up front.
3.6 International financial oligarchy is on the' rampage, blackmailing governments in certain countries, manipulating changes within governments and even bringing them down. Of course all this is within the framework of the World Capitalist System.
3.7 The imperialist powers, in particular the USA,-remain as exploitative and aggressive as ever before. Times have changed and therefore tactics and propaganda methods have also changed. Armaments including weapons of mass destruction are piling up. The USA and its allies have a monopoly of them. Under imperialist domain the world military spending has reached Himalayan dimension. Of this more than half is spent by the US alone. A literal arms race has been unleashed. India, Pakistan and other developing countries have been drawn into it. Little wonder that American imperialist aggression, preemptive strikes against countries for bringing about 'regime changes' suited to imperialist interests, local and regional wars have accounted for nearly 23 million deaths mostly in the developing world since the end of World War II.
3.8 The quest for oil has already provoked invasion and war by US imperialism and its leading EU partners, as witnessed in the oil rich Middle East. Such possibilities can recur as long as Imperialism exists. Globalisation unmasked Is nothing more than imperialism working in the interest of international finance capital and the multinational corporations. It Is Imperialist globalization. It is a US led process of compelling the developing world into accepting what Is dictated by US and EU countries. The aim is to turn the entire Third World into a huge open market, a free trade zone, dominating their industries and buying up their resources for their exploitation, forcing them to face the most unequal competition.
3.9 The Indian bourgeoisie and its government is trying to put up a brave face in the midst of the capitalist crisis pretending that its 'fundamentals are strong' and that it is doing 'business as usual'. Its response to the present situation is to persist with more 'economic reforms', that is to proceed further with the policies of liberalization, privatization, and globalization. Of course one should not underestimate the resilience, the capacity to maneuver and to find ways out of accumulated economic difficulties which capitalism as a system still possesses both on world scale and in India, by means of various devices. These are however shrinking by the day. The solution of the basic problem facing the economy lies only along the socialist path. But in the immediate context i.e. 'here and now', the CPI and the Left in general have to struggle for an alternative economic path which can help overcome the present economic difficulties, encourage normal development and growth. Such an alternative calls for:
3.1. It has been seen that the possibilities of crisis constantly exist within the capitalist system. The contradiction between the social nature of production and the private nature of capitalist appropriation is at the root of this crisis. This contradiction between social production and private appropriation is constantly becoming deeper. Even as the world produces and consumes more the rich-poor gap widens.
3.2. The crisis that struck the world recently originating from that haven of capitalism, the USA, is a combination of financial crisis and an economic depression. Based on the market economy, on speculation, and on the 'profit first' principle, the maximization of profit under neo-liberal dispensation, the financial economy has grown several times over the real economy. The sub-prime speculation in the US hit the financial economy like a tsunami, leading to the bankruptcy and collapse of several giant banking institutions in America. It spread to other developed capitalist countries and adversely affected the economy of most developing countries. If India and China could manage to avoid the worst it is because the financial sector was very largely in the hands of the state. For this in India the credit belongs to the communists and the Left and to the unions in the financial sector who tenaciously and firmly opposed the move of the bourgeois government to move towards privatization of these sectors.
3.3. The failure of, the all-powerful US monopoly capital to recover from the economic meltdown underlines the general crisis of capitalism. This is despite the fact that huge financial packages running into trillions of dollars in the entire capitalist world were handed over to the capitalists to 'stimulate' the economy and help its recovery. All this was done at the expense of the working class and other sections of the people, for whom social spending from the budget was drastically cut and austerity measures were imposed on the people in a blatant move to pass on the burden of the crisis on to the toiling sections and the common people. Several countries like Greece, Portugal, Italy have been on the brink of bankruptcy.
Job loss, unemployment is the major form of attacks on the working people as a way-out of the crisis of capitalism. The International Labour Organisation in its 'The World of Work Report 2011 ' has painted a gloomy picture of the world economy and said just 40 million or half . of the 80 million jobs were likely to be created over the next 2-years. Most of these new jobs would be created in the developing world, while just 2.5 million would be created in advanced economics. As a result, industrialized countries would be short of 24.7 million jobs during 2012 and 2013, it said. The developing world, including India, needs to create 53 million jobs in the next 2-years, required to attain pre-crisis employment rates.
3.4 The US had been all through the decades a consumer society living beyond its means. It has been described as a parasite sucking the blood of others by using its economic and military might. Its foreign debt has accumulated to unprecedented and unmanageable dimensions. The danger of default to its creditors stared this mighty country in the face. It had to enter into a 'deal' between the Democrats and the Republicans to limit the debt ceiling and to cut its excesses. This has led to the downgrading of US credit rating for the first time in history.
There is good deal of talk about environmental standards today. People have woken up to the issue of preventing environmental pollution and protecting the ecological balance. Actually the profligate consumption in which the world's rich indulge is the single biggest factor in destroying environment and upsetting the ecological balance. The manner in which driven by the craze for earning super-profits, resources of this earth are being denuded and the entire ecosystem is being destroyed; the speed at which the air, the terrain, rivers, lakes and seas are being polluted, spell disaster for the future of entire humanity. The most industrialized nation, the one which is responsible for the maximum damage to the environment, viz. the United States of America, has refused to sign the 'Kyoto Protocol', E.U. and the USA are stalling fruitful negotiations at the World Conferences on Climate change.
3.5 The size of the financial economy today is several times bigger than the real economy. This is so both globally and in each country. This has given rise to tremendous volatility to finance capital leading to widespread speculation, movement of capital across borders, instability in national currencies etc. The dominance of finance capital, of the money market overall and a liberalized system has come to mean an' over- heated stock market and unrestrained speculative activities by which colossal sums are transferred from public to private pockets and huge profits are raked in without any corresponding productive activity. In this free-for-all market, money has a merry free run. The foreign banks lead in this swindle from up front.
3.6 International financial oligarchy is on the' rampage, blackmailing governments in certain countries, manipulating changes within governments and even bringing them down. Of course all this is within the framework of the World Capitalist System.
3.7 The imperialist powers, in particular the USA,-remain as exploitative and aggressive as ever before. Times have changed and therefore tactics and propaganda methods have also changed. Armaments including weapons of mass destruction are piling up. The USA and its allies have a monopoly of them. Under imperialist domain the world military spending has reached Himalayan dimension. Of this more than half is spent by the US alone. A literal arms race has been unleashed. India, Pakistan and other developing countries have been drawn into it. Little wonder that American imperialist aggression, preemptive strikes against countries for bringing about 'regime changes' suited to imperialist interests, local and regional wars have accounted for nearly 23 million deaths mostly in the developing world since the end of World War II.
3.8 The quest for oil has already provoked invasion and war by US imperialism and its leading EU partners, as witnessed in the oil rich Middle East. Such possibilities can recur as long as Imperialism exists. Globalisation unmasked Is nothing more than imperialism working in the interest of international finance capital and the multinational corporations. It Is Imperialist globalization. It is a US led process of compelling the developing world into accepting what Is dictated by US and EU countries. The aim is to turn the entire Third World into a huge open market, a free trade zone, dominating their industries and buying up their resources for their exploitation, forcing them to face the most unequal competition.
3.9 The Indian bourgeoisie and its government is trying to put up a brave face in the midst of the capitalist crisis pretending that its 'fundamentals are strong' and that it is doing 'business as usual'. Its response to the present situation is to persist with more 'economic reforms', that is to proceed further with the policies of liberalization, privatization, and globalization. Of course one should not underestimate the resilience, the capacity to maneuver and to find ways out of accumulated economic difficulties which capitalism as a system still possesses both on world scale and in India, by means of various devices. These are however shrinking by the day. The solution of the basic problem facing the economy lies only along the socialist path. But in the immediate context i.e. 'here and now', the CPI and the Left in general have to struggle for an alternative economic path which can help overcome the present economic difficulties, encourage normal development and growth. Such an alternative calls for:
- Expanding the domestic market through radical land reforms and consistent policy of agrarian reform
- Instead of copying the western model of industrialization, concentrate on a labour-oriented policy of developing infrastructures, education and health care system.
- Undertake employment-oriented schemes and boost Self-employment through credit and marketing facilities.
- Fight price rise and introduce universal public distribution system.
- Develop the productive forces more speedily by removing the shackles which restrict their growth.
- Restructure and democratize the public sector, making it cost effective, competitive and accountable, while being socially committed, oppose disinvestment and dilution of state equity.
- Cut down imports which cater for elitist consumption.
- Crack down on corruption through an effective Lokpal; break the nexus of the corporates, bureaucrats and venal politicians responsible for scams and scandals.
- Restructure the tax structure so that the burden falls on the corporate houses, big business and affluent section of the country. Mobilize internal resources for development.
- Activate the bureau of industrial cost and pricing for investigating the cost of production and essential industrial goods so as to curb monopoly pricing and super profit.
- Allow foreign investment in industries where high-tech is essential and urgently required for development, in the interest of overall economic growth.
- Unearth black money, bring back and confiscate black money stashed away in foreign banks.
- Provide easy credit and market support to tiny, small and cottage industry and cooperatives.
- Protect the interests of the non-monopoly section against the threats of Indian and foreign monopolies.
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