Economy

The world
crisis of capitalism has entered a new stage. Rather than recover,
several countries are showing features of a depression. This is an
unprecedented situation and shows the deep malaise affecting the
capitalist system, still reeling from the slump of 2008-9.

“When sorrows come, they come not single spies, but in battalions!” Shakespeare: Hamlet Act IV.
Each week the financial crisis seems to be moving from one country to another without a pause. No country can feel safe. This is the grim reality for world capitalism today. Political editor, Rob Sewell, looks at the reasons for this ongoing crisis and explains why capitalism cannot find a way out.

The euro zone is heading into stormy
waters. The crisis that opened with the near collapse of the world
banking system in 2008 has now deepened into a crisis of insolvency of
entire nations. The bourgeois has no idea of how to get out of the
crisis, which is sweeping like an uncontrollable tsunami from one
country to another in Europe. In the words of Italy’s finance minister,
“There should be no illusions about who will be saved. Like on the
Titanic, the first class passengers won’t be able to save themselves.”

As I write these lines the destinies of Greece are being decided in a
titanic struggle in which the Greek working class is confronting the big
banks and capitalists of all Europe. The EU is subjecting Greece to the
most shameless blackmail. They say: either accept draconian cuts in
your living standards, or else we will refuse to hand over the next
tranche of 12 billion euros.

Workers have been feeling the pinch for
some time, even before the slump of 2008-09. Now they are in for an even worse
time, the most prolonged squeeze on living standards in recent memory.

Everywhere you look there is upheaval and crisis, from Europe to Japan
and to the United States. This reflects the worldwide malaise of
capitalism that is struggling to emerge from the recent slump. This is a
confirmation of Marxist ideas, which explains that capitalism is a
crisis-ridden system.

The world of international finance has been shaken by the
default in Dubai.
Shares have taken a tumble all over the world. Commentators have suggested that
this could be the cause of the recession moving into a double dip, of a further
downturn in the world economy. Mick Brooks looks at the unfolding crisis in the, until last week,  ‘money no object’ world of Dubai.

Why is New Labour hurling yet more of our
money at the banks?  The London ‘Metro’
screams that the latest deal is the “World’s biggest bank bailout.” It’s
costing every household in Britain £2,000, on top of all the money wasted last
time round 

This plan costs nearly £40bn, more than the
£37bn the government pumped in to the banks a year ago. £40bn would build more
than 1,500 schools, but the banks, we are told, are more important than our
kids’ future. Brown boasted last year that he had ‘saved the world.’ Not quite,
it seems. Now the banks are in further financial difficulties and back with
their begging bowls.

In 1929, the New York stock exchange panic began, kickstarting a financial meltdown and opening up a decade of global depression. Only Marxism can explain the real cause of this crisis.

Lord Adair Turner is head of the UK’s Financial
Services Authority, the body in charge of regulating the banks and other
financial institutions. Some weeks ago, he was interviewed
by Prospect magazine, a small mouthpiece of the Blairite wing of New Labour.  In that interview, Lord Turner blurted out a
telling truth about finance capital that its proponents did not want to
hear. The reaction  from
financiers has been apoplectic.

Nearly fifty years ago, Ted Grant wrote a major article called ‘Will there be a slump?’ in which he outlined the underlying reasons for capitalist crisis and why it would keep happening – a controversial statement during the period of the post-war boom. This article from 1960 remains as relevant today as ever, given the world recession which has thrown the economies of the world into chaos.

It makes your blood boil!  The only good news to come out of the UK budget announced by New Labour Chancellor Alastair Darling last week was the slight increase in tax rate that would now be levied on those earning more than £100,000 a year.  The rate was being raised from 40% to 50% to help raise a little more money from those who have benefited most from the credit binge that has now gone bust around the world.But what a barrage of criticism and rage has erupted from the great and good and from the news media on Darling’s action.