A century ago, Rosa Luxemburg expressed humanity’s historic dilemma in these terms: socialism or barbarism. Now, the global crisis underlines the urgent need to create objective and subjective conditions which guarantee a successful way out of the crisis, based on the best experiences of past centuries, reflecting on these experiences and enriching them in turn. This responsibility requires that progressive forces immediately create a programme for taking an initiative and maintaining it, acquire the capacity to create a political construction, block neo-fascist bids and open the way to real change.
The fundamental change in the economic processes and social forces, triggered by the canonisation of financialisation during the most recent phase of capitalisation, defines a range of very particular challenges in relation to the political action of progressive forces in the course of the present crisis. Despite a certain euphoria in critical sectors of the system, it is essential to recognise the strength of reactionary tendencies around the world, united by a network of ideological, political and pecuniary loyalties headed by people who have more or less been the principal beneficiaries of the crisis: a narrow Anglo-Saxon oligarchy with speculative, military and energy interests.
Ironically, these social actors, who played a key role in this crisis, have learned their lessons from history and are using them to profit from the destructive spread of profound objective processes underway.
Even though a study of capitalism’s internal regularities, which generated the crisis, reveals that only large-dimension systemic changes can make possible a way out of the current tendencies, it must be understood that the immense process of concentration of capital and power in recent decades, exacerbated in the last few months, results in very different priorities of profitability. In dealing with the crisis, war is the easiest, cheapest and most profitable solution for these mafias. For that reason, it is not only the crisis of capitalism which should be analysed but also the capitalism of the crisis.
Recovering the productive drive and employment requires more than structural change in institutions and economic policies (regulatory mode), or a change of the dynamic of the distribution of income and the dynamics of investment orientation (accumulation regime); rather, it is necessary to propose a productive logic and social priorities which go beyond the laws of profit (mode of production) and demand transformations of production and consumption paradigms (mode of life).
There is no sort of determinism which can lead to this kind of response. No progress will be possible until there is a skilfully managed process of coordination of progressive forces at the international level around a realistic and viable programme of change capable of uniting the broadest spectrum of forces aiming at peace and development.
In this long economic cycle, the question of historical subject is taking on new dimensions. The violent way in which the crisis is developing tests each human being’s capacity to act. The dehumanisation of conditions is more and more omnipresent. The crisis exacerbates commodity fetishism which makes one perceive the economic world as outside of, and opposed to, human will. All of which leads to the effective construction of capacities to act in such a crisis framework, notably for nations of the South, victims in the last decades of a systematic dismantling of institutions and macroeconomic weakening.
The current financial war may reach dramatic proportions, bursting the rational boundaries constructed over the centuries. The decisions of ever smaller yet powerful elites have a life-and-death impact on millions of human beings.
The enormous process of concentration and centralisation of capital in the last three decades is nothing compared to what has occurred in these three months of open crisis. In the United States, for example, just 47% of the banks registered in 1982 survived in 2004 even with triangulation and pyramidisation mechanisms put into place, which described a tighter structure of property and control. At the top of the heap only three out of the seven banks historically responsible for the transnational manipulations, financial panic and wars, remained.They represent the Anglo-Saxon structure that is governing the present international organisation of credit. These are the sectors of finance capital that created the financial structures of “shadow banking” which caused speculation to explode and unhinged the banking system. According to the US Treasury, five banks, among them those to which we have alluded, dominate 97% of the derivative market. Their value in 2008 was equivalent to 20 times the basic value of last year and is equivalent to a debt that equals 20 times the world’s GDP !
These opposed sectors benefit from the cumulative weakness of the system, from the control that they have exercised on the government agencies of many countries and from exclusive information used to pursue their hold over their old colleagues, acting as they do like experts in deconstruction. For months we have witnessed a gigantic and encouraged, if not actually provoked, clearance sale, whose acquisitions are in fact huge operations financed by the blank checks, apparently limitless, of government rescue plans.
The impotence of millions and millions of human beings who are watching the destruction of their conditions of life is opening up a perspective of contestation and rebellion. In addition to the millions of workers who are arbitrary “victims of life” and are losing their jobs, there are other millions who, above all in the countries of the South, are likewise losing the fragile resources which they had to sustain their families. The ILO – to give an idea of a more complex phenomenon – estimates that more than 30 million people lost their jobs in 2008 and that this figure will increase to more than 50 million in 2009. The FAO estimates that the number of people threatened by famine grew from 850 million in 2007 to 960 million in 2008, and that the figure could reach a billion in 2009 !
All this happens even though it is public knowledge that humanity has sufficient productive capacity to take care of itself, and even though it is increasingly clear that certain scientific and technological advances are not deployed because they do not answer to the criteria of profitability demanded by capital which controls the process.
Individual and collective frustration could lead to a refusal to become engaged, in such a way that a long-lasting reactionary political construction, compatible with the maintenance of a decaying capitalism, could be favoured. This is no longer a matter of a situation which Krugman already called in the 1980s “the age of reduced expectancies” but in fact a situation of economic stagnation and of social decay.
This feeling of injustice and indignation runs up against the fear, whether realistic or ideological, that little or nothing can be done to change things. The masters of these events feed these fears in order to discourage any collective action and enclose people within a “devil-take-the-hindmost” individualism and ultimately in an impotence and acceptance of (or adaptation to) the triumphant power.
As never before, this crisis affects the whole planet and nearly all human beings. It is not just a financial crisis, it is also a crisis of production, a food, energy and environmental crisis, and it will soon be a crisis of legitimacy.
The process of the production of goods and services is in itself at also the production of consciousness. The sudden break of productive continuity also implies a break in the production of consciousness. The insanity of being punished through unemployment, famine, exclusion and insecurity, whereas “we haven’t done anything wrong” is spreading geographically and socially, allowing us to predict a break in the rationality and value systems. In the face of such a latent crisis of legitimacy, only the capacity of progressive forces to take the moral leadership could open the way to the construction of an alternative historic bloc for a new culture of living together.
Macroeconomic management has been crucial to this massive and accelerated process of the expropriation of decision-making power. The role of the macro-economy as an instrument for the domination of entire nations was little studied in the literature on imperialism. In the tradition which highlights the extra-economic factors of modern imperialism, in a perspective closely tied to the historic experience of old colonial empires (of the first epoch – the 16th to 18th centuries – or of the second epoch – the 19th century), the accent is on the forced destruction of certain types of production, the imposition of monopolies and trade prohibitions. On the other hand, in the more economic studies by Hobson, Hilferding, Bukharin, Luxemburg, Kautsky and Lenin, and later among Marxists and neo-Marxists of different outlooks and from different countries, the accent is on the role of enterprises and private sectors. The discussion on unequal exchange bequeaths us many theoretical tools to understand the issue, but there are many gaps.
The constitution of a special espistemological area within economic sciences corresponds – with time lags – to the ontological development of the possibility of managing the law of value within capitalism. What some writers call “state monopoly capitalism”, an historic phase that began to take shape among the central powers involved in the First World War, is the basis for those differentiated phenomena which, in time, were to be called “macroeconomic”.
The transformation of the old colonial empires and the re-definition on a global level of neocolonial power imposed a double burden on Latin America, under the hegemony of the dollar after the Second World War, with the tacit creation of a “dollar zone” whose mechanisms of domination were exacerbated by the unilateral breaking of the Bretton Woods agreements, the non-convertibility of the dollar and the imposition of neoliberal policies which were brutally to accelerate with the crisis caused by foreign debt in the 1980s. The increasing vulnerability of the macroeconomic in Latin America is directly related to the competitive weakening of their industrial capital and is accompanied by a systematic process of the destruction of economic sovereignty, the “policy space”, the framework of the effective management by governments and national economies.
The erosion of national currencies, the fragility of the external sector in light of the volatility of non-regulated capital flows, the race to ever lower taxes, labour and environmental norms, commercial undertakings and a rigorous policy of opening up entails the increasing impossibility of carrying out politics in our countries, of disposing over a real decision-making capacity.
This capital accumulation regime based on deregulation, the return to the production of raw materials, financialisation and the regressive redistribution of income has imploded. Although it is directly linked with this regime, the dollar hegemony has its own inertia within the structures of global power and in turn is transforming itself into a fundamental instrument in the dogged defence of an obsolete model, in direct opposition to the democratic gains achieved in the last centuries.
The perspective of a speculation war would be the easiest and most profitable exit door for this old power within crisis capitalism. The massive destruction of values and of capitals which requires productive redundancy because of the over-accumulation of sectoral capacities, leads the losers and the winners to a geographic point of view. The tension among nation-states in order to obtain productive relevance could be a propitious terrain for confrontations which could rapidly drag them into an endless spiral. The powerful interests of war markets could realise big profits from these dynamics. It is a nerve-racking question of survival for certain sectors of capital, and the asymmetrical capacities for macroeconomic response have to become exacerbated, generating tensions, beginning with monetary and commercial wars.
But it is the same process of the increasing centralisation of power that generated a dynamic of the potential accumulation of forces for a more democratic future: the systemic players who are impeded and even threatened by the present conjuncture are becoming ever more numerous. These cracks in the system of domination are recent and they are growing and accompanied by “geological faults” in the historical structuring of world powers. Progressive forces have to act within this framework with intelligence in order decisively to influence the conjuncture in the near future. The ferocity and the velocity with which the crisis is deepening is bringing about unusual movement in the relations of forces at the global level.
The Latin American initiative, facilitated by the president of the General Assembly of the United Nations, to convoke a world summit from June 1 - 3 to discuss alternatives to the crisis is opening up a framework of truly multilateral negotiations which has never been seen before. This is so even if it remains only a possibility due to the intense pressure being applied in order to block it or limit its breadth and the pressure being put on several heads of state so that they do not participate. That the debate should take place in the framework of a G-192 and not of a G-8 calls deeply into question the possibility of imposing a unipolar vision.
Social movements, political forces, progressive governments and intellectuals should seize the historic occasion presented to them and include among the world decision-makers those who are not content to correct abuses or the redressers of wrongs caused by extreme privileges, as has been timidly asked.
Several elements confirm the new possibilities created by the progressive offensive of these last months, even if they only lasts a short while: the calling of this summit, the inclusion in the G-20 of relatively different voices, the open challenge of the Chinese Central Bank to the present international system of reserves, the positioning of Russia, the possibility of expression of wishes other than those of the central powers, which has appeared in the preparatory documents for the summit, redacted by the commission of experts headed by Stiglitz, and even in the latest communiqué of the G-20.
In the context of these recent repositionings we may propose three elements which could be the object of discussion within a democratic perspective.
1.) If after more than three decades of North American vetoes, the G-20 acknowledges the necessity of issuing 250 billion dollars for special drawing rights (SDR), there must be a guarantee that it is put into effect immediately, but not in order to reinforce the old financial architecture represented by the IMF and the supremacy of the dollar.
2.) It is a fact that not only the governments of the North, but also those of the South, including those led by progressive forces, have decided to pay significant contributions to the IMF. This turn of events is part of an effort which is becoming more and more successful in order to resuscitate the fundamental axis of the old international financial architecture, now in full operative and ideological decay. Later in 2003 the IMF’s assets decreased 90%, but for the month of November 2008 alone it was able to lend more money than in the last 5 years together, and the country waiting list is becoming longer every day. It is necessary to stop this and to transform the political will of some governments, which are paying in funds in order to face the international liquidity crisis, into an instrument which allows the South to implement effective anti-crisis policies. The progressive forces can in a very short time bring together a large slate of protagonists able to decide that these new resources will constitute a new easing within the IMF, with no condition other than forbidding expenditure on weapons, and with another governance mechanism. A precedent already exists in the World Bank with the Global Environment Fund. Additionally, a sign of a more democratic direction will certainly attract major contributions from countries with high liquidity disposability like China or allow social forces within certain European countries, for example, to pressure for the financial support of this more progressive option.
3.) The behaviour of the financial markets is leading to a rapid deterioration in the macroeconomic conditions of the periphery and the semi-periphery. The growing gap between the financial costs borne by the centre and those borne by the rest of the world is based on the conceptual construction of “risk country” which reinforces the objective restrictions of an asymmetric macroeconomic response. It is urgent to reduce the debt which puts burdens on the limited tax systems and to lighten the weight of debt repayment in the countries of the periphery. Conditions exist for doing so. The peoples of the South are not responsible for the crisis and there is no justification to punish them because they live in a “risk country”. The United Nations could issue vouchers without risk premiums which compete with the tax titles of the United States, Japan and any European country, with a rate of 1 or 2% and which feed a line of credit, such that countries wishing to restructure their debt can re-buy it on a secondary market, like a reverse auction, after a compulsory and standardised auditing process for foreign debt.
Putting this new institutional framework into place in the next months would create the conditions permitting an attack on the monopolised power of decision-making based on the current dynamic. The construction of a new world monetary and financial order would then be envisaged in a more democratic perspective, including the principal protagonists from different regions of the world. Additionally, this minimal programme immediately makes possible a global compromise which would impede wars of commercial changes and conflicts, which would be a breeding ground for speculators (the carry trade involves almost half of the financial speculation and represents a sum equivalent to 6 times the GDP.), but also make a return of production and employment very difficult.
Other production and consumption logics going beyond the predatory development model, for human beings and for the environment, would become possible by relying on sovereignly built regional blocs in the area of food, energy, health, etc.
We have now reached an historic crossroad. What follows depends on the capacity to construct a social subject for change in a post-capitalist perspective guaranteeing that humanity does not fall into a long period of barbarism. Today more than ever it is essential to articulate a strategy and tactic allowing the left to take the lead, here and now, in the process of political convergence opening up the shaping of a new historic bloc. Initiating, and staying in the lead of, a process of regroupment of forces is crucial now that the desperation of those in power leads them to contemplate a neo-fascist future benefiting a speculative and warlike oligarchy that exhibits less and less restraint.
Such an initiative requires a collective process of construction on a global level that coordinates political actions on various levels and instances. One of the priorities, a necessary but insufficient precondition, to retake the powers of decision-making-capacities which were confiscated through the centralisation of wealth, would be the reconstruction of a supranational monetary and financial sovereignty in the concrete conditions of the 21st century. On this basis, we might not only avoid in the short-term the victimhood of the periphery due to the asymmetric macroeconomic capacity to implement contra-cyclic politics but we would seed a multipolar and more democratic structure of the new world order. Such an initiative would also create new global conditions for the development of new economic logics, different from profitability and accumulation per se, including the increase of other sovereignties in the food and energy structures, which oppose the destructive plans of transnationals.
Immediate components of this progressive agenda would be the appropriation from the left of the systematic issuing of special rights in order to impede neoliberals revive the extortion of adjustment policies, and, on the contrary, to strengthen multilateralism, the use of new resources of the IMF towards for radical internal reforms and the integral restructuring of the foreign debt of the periphery.