The capitalists are frightened

Today's Wall Street Journal has the main headline on its front page, and in red ink no less: "Capitalism's Crisis of Confidence." The article is about their crisis and the recent taking into part ownership by governments of some banks and increased regulation. They write: "In the past two weeks governments in Asia, Europe and the US have effectively nationalized vast swathes of banking. Perhaps the world has gone so far down the road of socialized finance that there is no turning back. However the doughty remnants of capitalism should be under no illusion about the risks and opportunities they confront. They cannot miss the risks. Mr. Paulson pledges that the government's bank investments will be passive and apolitical, but the record of the depression-era Reconstruction Finance Corp. suggests that the federal government is a shareholder that can throw its weight around."

The bourgeois see this recent tendency towards take overs and some turn again to regulation as a threat. This tendency could become a strong trend in the future on the basis of a deepening of the economic crisis. And it is hard not to conclude that this crisis is just beginning. 

Today's Wall Street Journal also had an interview with Anna Schwartz who once co-authored the work: "A monetary of the United States" along with Milton Friedman. She argued strongly that the bail out and the partial nationalization policies were wrong, that finance houses in trouble should be let fail, that this was the only way that the ones which were in trouble could be identified from the ones not in trouble and this was the only way to free up the money markets and trade and the real economy. 

There is a partial truth in her arguments but only partial. She leaves out the political, the class struggle and the potential power of the working class. The union leaders have been so subservient in the past period, and the working class so on the defensive that it is easy for her to miss this. But on the basis of a world depression the working class will have no choice but to get to its feet and to fight. Their entire system would be in danger. This is why the Paulsons and Bushs and co are acting. 

The Financial Times is a bit more careful than Schwartz. It quotes Keynes in 1933: "We have reached a critical point. We can see clearly the gulf to which our present path is leading. If governments do not take action, we must expect the progressive breakdown of the existing structure of contract and indebtedness, accompanied by the utter discredit of orthodox leadership in finance and government, with what ultimate out come we cannot predict." Yes the ultimate outcome we cannot predict. Keynes was talking about the danger of world revolution. And the discrediting of the orthodox leadership in finance and government. He was talking about the capitalist class. 

The Financial Times goes on: "Keynes whose life's mission was to save capitalism from itself, is more relevant than at any time since his death in 1946." This is what is happening. This is why extreme right wing capitalists like Bush and Paulson and governments around the world are part nationalizing sectors of the banking industry. They are afraid of the collapse of their system and the explosive movements of the working class that would result. The Wall Street Journal while accepting the handouts wants to campaign against government action at the same time and the Schwartz's the same. The truth is neither opinion have a solution. 

Capitalism is in catastropic crisis. It is the working class with a revolutionary socialist leadership and establishing a democratic socialist world that can show a way out for the human species and the planet. Capitalism has forfeited its right to exist and the capitalist class has forfeited its right to rule. And the union leaders have forfeited their right to lead. A new movement has to be built.  Contact us. 

Sean.