Re: Debt crisis

[Chris Burford <cburford@xxxxxxxxxx>]

At 15:14 11/04/00 -0400, you wrote:
> What's behind the debt crisis
>
>
> By Wadi'h Halabi



> The fundamental cause
>
> What is behind this phenomenon? The answer may be surprising to some. In
> the last analysis, the problem is that there is "too much" food, "too
> much" steel, "too much" of practically every commodity on world markets,
> indeed "too much" capital. Of course the 'too much" is entirely from the
> point of view of the capitalist class and their calculation of
> profitability. "In virtually every sector across [Asia]," reported the
> investor-oriented Far Eastern Economic Review in 1998, "The same
> intractable equation applies: Supply far outstrips demand. Basic
> materials, steel, cars, petrochemicals, semiconductors, the list [of
> excess commodities] rolls on." The Review called for "jettisoning the
> excess capacity."

Quite. A typical capitalist crisis of "overproduction". That is,
overproduction relative to the limited purchasing power of the market, and
in particular the impoverished masses of the world.

> The opposite is true for workers and oppressed people around the world:
> there is not enough food, fuel, housing, education, healthcare. Behind the
> "overproduction" (for capitalists) and misery (for workers) lies the
> anarchy of capitalism. What is happening is a breakdown in the necessary
> balance both among the inputs that go into production, and between
> production and the effective demand of producers as well as consumers.
> Breakdowns such as this are ultimately behind capitalism's unending
> boom-bust cycles.
>
> For lenders, however, debts must be repaid, even if production for which
> they lent capital cannot be profitable because of gluts in the market,
> even if millions of indebted people have suffered wage cuts or job losses
> because of capitalism's gluts.

This is not true. Debts do not have to be repaid even from the point of
view of the capitalists. All capitalists know that some have "bad luck".
They all know that every so often society has to rally round to keep
capitalism functioning. That usually involves injection of public funds
coupled with restructuring that re-establishes capitalist enterprises from
the wreckage of the crisis. Capitalist know well that as a class it is in
their interests that current exploitation continue. In that sense they too,
if push comes to shove, are in favour of living labour relative to dead
labour. So long as they can exploit it.


> Unemployment worldwide nearly doubled between 1989 and 1996, and now
> criminally afflicts over a billion people.

Nothing inherently criminal about it. (Although a lot of crime occurs). The
growth of the reserve army of labour on a global scale is the result of the
fair exchange of commodities according to the rules of capitalist exchange.
It is also the inverse of the accumulating mass of capital in the
metropolitan lands.



> The real question now is, On whose terms will the debt be canceled, the
> working class' or the capitalists'?


True.


> The capitalists' condition for forgiving the debt - through the IMF, the
> World Bank, or in bilateral negotiations - call for privatization, cheaper
> labor, more unemployment, cuts in education and health care, and
> destruction and idling of "overproduced" manufacturing and agricultural
> capacity. These are the kind of conditions that the U.S., Britain, and the
> International Monetary Fund have in mind when they agree to cancel some of
> the debt.
>
> The working class in the U.S. - and worldwide - has no interest at all in
> cheaper labor, greater unemployment, homelessness or hunger anywhere in
> the world. Working class terms for canceling the debt would therefore call
> for repudiation of the debt without condition, and for redirecting "excess
> capacity" and all resources to reconstruct the economy, achieve real
> social and economic equality in the world, and meet pressing human needs.
> People before profits


This article is a serious attempt to go beyond the widespread demand for
debt cancellation. That is so well established that we must look beyond it.

The article is clearly a marxist attempt to do so. IMO it does not go far
enough to break the perspective of charity to the world's unfortunate poor.
We must find ways to help people see the world economy in a completely
different light. To emphasise that it is living labour that is important
not dead capital. (That is not to say however that investment in the means
of production is not needed) We have to get the point across that an
envigoration of the economic life of Africa, Latin America and Asia is to
the benefit of the people of North America and Europe even if the rate of
growth there slows temporarily. A rise in the quality of life of third
world peoples is essential if they are to have better opportunities without
following in the environmentally destructive path of previous
industrialisations.

Indonesia is a topical test case.

Theoretically, it is essential to grasp the marxist law of value and to do
so on a global scale. It is essential to see that the uneven process of
accumulation of capital as the same process as the relative impoverishment
of vaste sections of the peoples of the world. It is essential to argue
that value must be consciously pumped out back to what at present is the
periphery of the world economy.

In this respect some of George Soros's remarks are more radical that the
debt campaigners.

Chris Burford

London