The General Crisis of Capitalism

The inherent contradictions of capitalism have intensified and broadened.  Their consequences have become more serious during the imperialist era.

They embrace not only the economic but also the social, cultural and political spheres of capitalist society.  For much of the 20th century, communists therefore referred to the all-round ‘general crisis of capitalism’.

Its chief features were identified as:

  • The fatal sharpening of capitalism’s contradictions (notably in relation to the new role of the state, the stagnation and growing instability of the economy and the deepening of class conflict).
  • The degeneration of capitalist politics, ideology, morality and culture with their demagogy, careerism, corruption, egoism and callousness.
  • The crisis and overthrow of imperialism’s colonial system.
  • The emerging challenge from the forces of socialism led by the Soviet Union and the international socialist system.

This concept of ‘general crisis’ underestimated the capacity of state-monopoly capitalism to overcome crises, to withstand the socialist challenge, maintain exploitation abroad through neo-colonialism, launch and sustain the STR and retain political, ideological and cultural dominance.  It also over-estimated, from the late 1950s, the achievements of the socialist countries and their potential for immediate economic development.

Counter-revolution in the Soviet Union and eastern Europe temporarily reinvigorated capitalism ideologically, politically and, to a lesser extent, economically.  This masked capitalism’s general crisis for a short time, yet its objective features remain.  Indeed, they have returned to full view with a vengeance.

On the economic front, for instance, recent regional and global crises have assumed a substantially, and even predominantly, financial character.  This reflects the increasingly parasitic nature of monopoly finance capital.

The liberalisation of financial markets from the 1980s led to a huge boom in trading.  The development of global 24-hour financial, currency and commodity markets facilitated an explosion of speculation in stocks, shares, currencies, commodities and financial instruments of every kind.  Sharp imbalances, shocks and raids have since precipitated severe crises, not only in the financial world but in the productive economy.  Bankers, speculators and asset strippers in the City of London enjoyed lax regulation, attractive financial ‘products’, a favourable tax regime and easy access to tax havens under British protection.

In Britain and the US, the huge bubble in capital values based on insecure and fraudulent financial securities and derivatives, linked to debt and risk, burst in late 2007.  The private, household and government debt that had maintained economic demand dried up, making the postponed cyclical downturn in the real productive economy all the sharper and more sudden.

Across the developed capitalist world, governments and central banks then had to rescue the financial monopolies and their markets with the biggest bail-outs in history, using public money and public institutions to do so.  Yet, immediately afterwards, those same governments and central banks utterly failed to mobilise politically and financially to rescue public services and socially useful jobs, or even to introduce stricter national and international regulation of the financial system.  Instead, from 2008, mass unemployment returned to the record post-war levels of the early 1980s.

Clearly, the world’s major capitalist powers are unable or unwilling to control the immense anarchic, parasitical, anti-social financial forces unleashed by capitalist globalisation.  Since the disintegration of the post-war system of international regulation, all attempts to construct a new financial and economic settlement have failed.

Thus the insoluble contradictions of capitalist production have become combined with, and aggravated by, the deep contradictions of capitalist exchange on a global scale.  Together, they constitute the permanent structural crisis in the economic base of capitalist society.

The combined economic and financial crisis that commenced in 2007 also confirmed the tendency to synchronisation between the main capitalist economies.  Capitalist ‘globalisation’ has made it more difficult for one major economy to grow out of crisis at the expense of others.

For Third World countries, crisis in the imperialist countries drags them down too, while most of the benefits of recovery and expansion are reaped by the TNCs.  Monopoly capital uses state power to enforce its interests against rival imperialists and against Third World peoples through super-exploitation, trade inequality, war and forced mass migration.  This reality illustrates another fundamental contradiction of capitalism: between imperialism’s incessant drive for domination at home and abroad, and humanity’s aspirations for peace, national self-determination and a civilised society.  This contradiction has been highlighted by the fact that, while imperialism has used the crisis as an opportunity for super-exploitation of the Third World, China has become a major engine of world growth, not least in the developing countries.

The disparities in economic and social development between nations and whole regions of the world have increased over the past 20 years.  This is the product of capitalist economic anarchy – where no effective economic planning takes place above the level of the individual enterprise or conglomerate – combined with the unequal distribution of monopoly and state power between the imperialist countries and the rest.

Capitalism’s structural economic crisis has also produced a structural crisis of distribution on a world scale.

More than a billion of the Earth’s seven billion people are severely undernourished or starving.  Food production and distribution is organised by TNCs in order to maximise profits in the most lucrative markets, while Third World governments enslaved by debt collaborate in ‘cash crop’ farming, which leaves their own populations poor and hungry.  Meanwhile, the EU routinely destroys mountains of food produced by subsidised agriculture in order to maintain prices and profits.

Hundreds of millions of adults and children have no access to medical services and a similar number – the majority of them women – are illiterate.

More than one billion people lack access to safe drinking water and sanitation, causing millions more deaths every year from preventable disease.  Water and other energy resources that could be harnessed for those in direst need are instead exploited, diverted or neglected by capitalist monopolies seeking maximum profit.

Another dimension of capitalism’s general crisis has come to the fore in recent decades, one which threatens the very future of the human race.  Capitalism’s rapacious, short-term drive to maximise monopoly profit now endangers our global environment and eco-system.

The continuing growth in carbon emissions plays the main part in heating up the Earth, melting the polar ice-caps, raising sea levels, spreading desertification, disrupting weather patterns and destabilising some of the most vulnerable societies on our planet.  Yet big business and the major capitalist powers refuse to take the drastic steps necessary to curb emissions, for fear of curtailing monopoly profits.  Instead, they use sanctions, military intervention and compliant local dictatorships to maintain access to oil supplies.

Until and unless global warming is halted, many more people will join what are already some of the biggest forced migrations in human history, as millions flee the famines and resource wars inflicted on their homelands by imperialist super-exploitation and military intervention.

The depletion of finite resources such as coal, oil and natural gas, without the planned development of renewable alternatives, confronts humanity with the prospect of catastrophic energy shortages within a generation or two.

Yet instead of investing massively in alternative, safe and renewable energy generation and distribution, the EU promotes carbon emission trading schemes.  These enable the industrial and financial monopolies to trade licences to pollute for profit, while shifting dirtier production to the developing countries when not limiting their industrialisation altogether.

Capitalism’s social crisis afflicts countries at every level of development.  Almost everywhere, social inequality has widened over recent decades.  The alienation of people from their local community and society – especially young people denied prospects and opportunities – has grown, together with associated problems of drug abuse, crime and anti-social behaviour.

In the sphere of politics, big business influence has nurtured naked careerism, hypocrisy and corruption.  Large numbers of people in the advanced capitalist ‘democracies’ – especially among the working class – have turned away from bourgeois politics.  This is reflected in declining levels of participation in political parties, together with higher levels of scepticism and hostility towards professional politicians.

At the same time, people will still mobilise in large numbers around issues relating to local services, unemployment, the environment, peace and racism.

Ideologically, while people’s confidence in any viable alternative to capitalism was shaken across the world by the downfall of the Soviet Union, critical and antagonistic attitudes to capitalism continue to be widespread and have even increased in the wake of the post-2007 crisis.

The liberating potential of artistic and cultural activities for working class people, both as producers and as consumers, is continually undermined by capitalist ownership and power.  Capitalism increasingly produces ‘culture’ as it does other commodities – for sale and at a profit or not at all – regardless of social need or the social good.  ‘Popular culture’ is thereby turned into a commercial, conservative force that promotes ideas of selfishness, greed and individualism.  Monopoly capitalist society is one in which the price of everything is proclaimed, while the real value of things to society as a whole is denied or distorted.

There is little in capitalist mass-produced ‘culture’ that reflects the real experience, collectiveness and creativity of working class life, past or present.

New technology such as the internet can be used extensively by progressives and revolutionaries in the interests of human liberation.  But capitalist ownership and state control also strive to promote it for the purposes of mass trivialisation and diversion, as well as for military and security projects that endanger everyone.

Economically, socially, politically and culturally, capitalism has long ceased to play a progressive role in human development.  It does not lack dynamism in its quest for maximum profit, but this imperative of capitalist development threatens every aspect of humanity.  Capitalism’s general crisis is society’s general crisis, as much in Britain as anywhere else.

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