Speech by

International Meeting "The Crisis of Capitalism, Globalization and the working-class movement's response"

Contribution of the PCP by Carlos Aboim Inglez - Athens, May 21-23, 1999

Dear Comrades,

We greet all the comrades present here and in particular our fraternal hosts from the Communist Party of Greece. The topic of this Conference is of extreme importance and relevance. But it is also very vast and complex. We bring only a few brief notes.

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Since at least mid-1997 we are in the midst of a developing world economic crisis, that is, a crisis that has not yet hit the bottom and which is even threatening to sink further.

Beyond the short-term and/or local causes of its current episodes, this crisis has precedents, among which the following stand out: on the one hand, the previous cyclical crises of 1974-75, 1980-82 and 1991-93; on the other hand, a series of crises of financial dominant - such as the October 1987 Wall Street crash, the bursting of the junk
bonds bubble and the US Savings& Loans bankruptcies in 1989, the bursting of Japan's real estate and stock speculative bubble in 1990-91, the crisis in the EMS in May-October 1992, the Mexican crisis in 1994-95, among others.

Although each of these cases has its specific traits, the present crisis flows from these precedents in at least two fundamental aspects: (1) a latent and persistent chronic overproduction; (2) a growing hypertrophia and instability in the financial sphere, which is increasingly speculative, rentier and parasitic.

The present global crisis apparently began with the so-called "Asian crisis", which broke out in mid-1997, continued throughout 1998 and still has no end in sight. It became worse with the (now worsening) collapse of Russia in mid-1998 which, in turn, strongly affected (as the "Asian crisis" already had, in 1997) the so-called "emerging markets" in Latin America and not only there. Both these, in turn, affected Europe and the United States. In the second semester of 1998, and throughout 1999, the crisis in Brasil and other Latin American economies broke out, adding a new important recessive factor to the overall picture.
These, so to speak, regional crises, have been accompanied by a drawn-out drop in the prices of oil, essential raw materials and commodities, which is still being felt and is affecting those economies that are most dependent on these goods. The situation in both Europe and the United States is related to all these developments, both as causes and as effects. Europe, whose emergence from the 1991-93 cyclical crisis occurred later than that of the USA, was, and is strongly conditioned by the recessionary consequences of implementing the Maastricht criteria, the uncertainties surrounding the Euro, the corset of the Amsterdam’s “Stability Plan". The USA, despite the resilience of its enormous might (economic and monetary, but not only – also its decisive influence in steering the international institutions such as the IMF, the World Bank, WTO, etc.) is clearly coming to the end of a cycle, and its much-heralded boom is very relative and has feet of clay. The US is now, potentially, the most destructive factor for the near future.

The threat of a general recession (which already affects nearly 50% of the world economy today) is knocking at the door, as is recognized even by the pundits of global big capital. The constant lowering of growth estimates which marked 1998, as well as the unconcealed uncertainty and concern marking their most recent analyses and prospects (e.g., the IMF's World Economic Outlook of last April) are
no cause for optimism. After all, a growth of 2% in the world product for 1998 is not qualitatevily different from the rates of 1975, 1980-81 and 1991, which are years of an acknowledged global recession. And even worse scenarios are, quite explicitely, not ruled out - even including the possibility of a global deflation (with drops in prices, production and employment) and the prospect of a depression, which many compare to that of the 1930s.

It is today almost a general consensus that the world capitalist economy has been evolving, in the last two decades, according to very different parameters from those that marked the "30 glorious years" of the post-World War period.

First of all, due to a clear deceleration in production growth rates (despite, it should be registered, the contribution of the New Technologies developed by the Scientific and Technical Revolution). Whilst it is estimated that GDP in the industrialized capitalist countries grew at an annual average rate of close to 5% in the 1950s and 1960s, this rate dropped to some 3% in the 1980s and to less than 2% in the first half of the 1990s.

In addition, because (after a long period of almost full employment, growth in wages and living standards, creation of social welfare systems and public services), we are now witnessing an explosion of unemployment, that is becoming massive and chronic (even in the upswings), together with increasingly precarious working and living conditions, a permanent pressure for lower real wages, the widespread pauperization of the masses and the ongoing generalized dismantling of social security systems and public services, namely through their privatization. To mention only the prime problem of unemployment, whilst OECD countries officially had some 11 million unemployed in 1973, this figure rose to 30 million in 1983 and to 34 million in 1993. The ILO's latest report estimates that over 1/3 of the world labour force is unemployed or underemployed, even before taking into full account the effects of the latest recessionary outbreaks.

Finally (and without minimizing other relevant aspects), it is essential to underline the enormous mass of financial capital which is parasitising the productive sphere. This phenomenum began to grow in the late 1970s, but its cancerous growth speeded up during the 1980s and 1990s. Let it just be said that between 1980 and 1992, the annual average growth rate of financial assets was 2.6 times larger (6%) than the Gross Fixed Capital Formation (2.3%), which is essential for productive growth - and that short term and portfolio capital flows outstripped those related to long term direct investment. The hypertrophy of the financial sphere - which is increasingly becoming merely rentier or speculative, and even dealing with an enormous mass of "fictitious capital" - is nonetheless draining a large chunk of the wealth created by the productive sector and imposing its own criteria upon it, essentially that of obtaining maximum profitability in the shortest possible time span. This causes permanent instability and uncertainty in the economy and generates successive devastating monetary and equity crashes.

In the conditions of the "30 glorious years" of the post-war period, the most important capitalist countries by and large implemented and promoted economic policies inspired by Keynesianism - which, it is appropriate to recall today, did not seek to jeopardize capitalism, but to save it, to manage and consolidate it. The neo-liberal and monetarist economic policies are completely different in their guidelines. Having been worked out in the 1970s, they have been ruthlessly implemented in a widespread manner in the past two decades. These policies correspond to the new plateau attained by contemporary capitalism, to the difficulties which arose in pursuing the accumulation process, and to directly serving the interests of their
main actors, the major transnational corporations and financial capital. The turning point was, significantly, linked to the outburst of the serious cyclical crisis of overproduction of 1974-75, which brought back into the open that intrinsical objective law of modern capitalism (which many insist on denying, despite the recurring crises of 1980-82, 1991-93 and the one that is now breaking out...).

The neo-liberal offensive, under the slogan-alibis of "Less State" and "Free Market", and characterized by the fundamental traits of liberalization, deregulation, competitiveness, privatization, globalization, was launched and carried out by big business, in order to respond to its growing difficulties in realizing surplus value and
satisfying its need to reap maximum profits in a period of decline.

In our opinion, the present crisis is mainly the fruit of over-production tendencies deep-rooted within capitalism as a system, and exacerbated by the neoliberal policies. The latter were triggered to reverse the sagging profitability of the 1970s, and we are now facing the same consequence: in the USA, dividends are scarcely 2% of the stock values, almost a record of weakness for this century! But the increasingly deregulated global movement of capital, which was supposed to guarantee maximum efficiency, has instead exacerbated instability and the risk of collapse; and the greatest ever "opening" of economies to so-called "free trade" has intensified uneven development and those very same tendencies towards over-production, as everyone scrambled to out-export everyone else, in a global consumer market which neoliberal policies themselves are restraining, in a relative but constant way.

The full effectiveness of both (correlated) sides of Marx's law of capitalist accumulation is plainly shown up in today's world, where Capital has acquired an almost planetary realm in this last decade.

The increasingly gigantic private accumulation of Capital in the hands of a scarce few, goes side by side with the, both relative and absolute, extension of pauperization and precarious existence of an ever increasing large majority of Humankind.

The unprecedentedly enormous potential which scientific and technological progress has opened up, for a fuller, more ecological sustainable and social equitable satisfaction of the basic material and spiritual needs of all Humankind, stands in barbaric contradiction to the brutal sub-standards of living of billions of human beings and the fate of Earth itself. That is the profound contradiction of civilization in our times, which exposes the intrinsic historical limits of global Capitalism.

* * *

As for the current so-called "globalization" of the economy, only a few brief remarks (I shall not allude to many other dimensions connected with this most polysemous word).

The use (and abuse) of this non-univocally defined (and often just not defined or even content-confused) term, has increasingly invaded the technical literature and the mass media during the 1990s - undoubtedly in connection with the disappearance of the Soviet Union and the world socialist system, and the consequent spread of Capital's rule over the world. By the same token, "capitalism" was replaced by the much more suitable "market economy" pseudonym, and "imperialism" simply silenced as an obsolete "orthodox" archaism. This is a first and prior remark, that throws some light on the content of that currently very fashionable, but dubious and mis-used "globalization". And that demands a full inquiry into its myths and realities.

A second remark. Marxism strictly demands a historical approach - historical not just in the sense of a few recent decades, but from the very beginning of Capitalism as a reality. We have to put globalization" deep in History.

Ever since the Communist Manifesto and Capital (inter alia), Marx stressed the intrinsic tendency towards the universalisation of Capitalism. This was so, right from the beginning, ever since its initial and decisive phase of constitution and consolidation in the 16th Century, which was linked to, and accelerated by, the great Maritime Discoveries. That was the first and decisive advance towards "globalization". But Marx also acutely revealed the contradictions and limits associated with this intrinsic tendency.

A second great historical wave towards universalization of the realm of capitalism occurred in the late 19th century - early 20th century period, linked to, and accelerated by, the Industrial Revolution and leading to monopoly capitalism and imperialism. Which, as is well known, did not eliminate the internal contradictions of its functioning, nor diminish its historical limitations. On the contrary, both became more profound.

As for the issues that usually are referred as crucial distinctive for the current process of "globalization" - and this is our brief third remark -, historical comparisions between the present values and those of the late 19th-early 20th centuries do not confirm such a quantitative and qualitative novelty as are being claimed so emphatically.

What we are facing today is, not so much a "great breakthrough" in the history of capitalism, but capitalism at its most basic. This third great wave of the current "globalization", or further advance towards the universalization of capitalism, obviously has its own historical characteristics and limits of its present stage.

It is arising within a complex framework in which their neoliberal policies are showing clear signs of exhaustion, despite the much-heralded Information Revolution. Striving to preserve, extend and reinforce the reign of the major transnational corporations and of an
oversized financial sphere - in which the unbearable burden of speculative and rentier Capital threatens disaster – the governors of Big Business, namely the G-7, and their technical servants of supranational institutions, are already seeking some timid regulatory palliatives. But, above all, they insist on the same "remedies" which are exacerbating the real root cause of the "disease" – the limits of capitalist relations of production themselves.

The contradictions and main features of capitalism under the current "globalization" are at the same time expressions and factors of the present crisis. And the difficulties in overcoming it with the old methods of pulling out of a crisis, despite all of Capitalism's might, are now so complex precisely because capitalism is now so universal and at the same time so fractured - between The Triad (the real "global village") and The Rest of the Planet, as well as within the Triad itself, within its components, and within the other regions and countries of the world. The "North/South" contradictions, better saying economic and social polarization, are objectively much more universal than Capital's homogenization of the Globe.

* * *

As for the last correlate theme of our Meeting, it is undoubtly the point of most practical relevance, as it is in the practice and with the masses that decisively the present must be faced and changed, towards a better future.
In spite of this, we stress only briefly a few topics.

First: The worsening crisis of global capitalism, the further deterioration of economic, social and politic framework, would inflict even greater sufferings upon world's population. Historical experience shows us that, in this context, fertile ground to adverse conditions,
including disruptive factors, often arise and negative lyharms the united struggle of workers.

Second: So, increasing militancy and organizational strengthening of worker's movement and struggles are of utmost importance and urgency - just now! And so, that is also our utmost basic and constant task and responsibility.

Not any easy task, with no universal receipts. But an offensive, persistent, confident and courageous spirit and class consciousness, yes, that is our universal need in our relentless efforts to surpass objective and subjective difficulties.

Third: National framework in organizational and struggle actions, that is a fundamental and not surpassed ground to fulfil those basic tasks. And strengthening of international solidarity in common or convergent struggles, is a vital need for the success of each and all of us.
Concrete and even limited struggles are the only solid and viable road to advance toward larger and more general struggles.

Fourth: Workers are not the only class or strata suffering from the offensive of global Capital and crisis; and historical experience shows fully that workers movement must not confine itself in a ghetto. So, it is also of utmost importance to converge with and support actively the interests and struggles of a very broad range of other people's classes and strata.

Fifth: Crisis and Big Capital offensive goes alongside with on-going processes of degeneration and restriction of democracy, cultural and ideological obscurantist regression, growing militarisation and imperialist aggressiveness. And all those linked processes nourish the revival of fascistic and extreme-right wing forces, outbreaks of chauvinism, reactionary nationalisms, racism, religious and ethnic fanaticisms. Against all these connected evils, workers movement must be also in the forefront, advancing its core class solidarity and humanism.

Last, but not the least: Today we are facing (among others imperialistic interventions all over the world), a most serious and brutal threat to peace and security in the world, with the brazenly illegal and criminal aggression to Yugoslavia and the recent summit of NATO in Washington.

Struggle for peace, against aggression and war, to stop immediately the criminal bombing of Yugoslavia's peoples, to nulliphy the "new" NATO's arbitrary disorder and violation of international Law, for security for all sovereign countries and peoples of the world, with real advance in disarmament and real economic, social and democratic development around the world - is today a top priority for workers' movement and all peaceful men and women of the Earth, in this threshold of 21st Century.

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  • International Meeting of Communist and Workers Parties
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  • Yugoslavia