[OPE] Meszaros, "The unfolding crisis and the relevance of Marx"

From: <glevy@pratt.edu>
Date: Tue Nov 04 2008 - 15:01:58 EST

The unfolding crisis and the relevance of Marx :: Herramienta :: Revista
de debate y crítica marxista

unfolding crisis and the relevance of Marx
Autor: Admin

Autor: István Mészáros*

Some of you may have been present at our meeting in May this year in
this building, when I recalled what I said to Lucien Goldman in Paris a
few months before the French historic may 1968. In contrast to the then
prevailing perspective of "organized capitalism", which was
supposed to have successfully left behind the stage of "crisis
capitalism" - a view prominently asserted by Marcuse and shared also
by my dear friend Lucien Goldman - I insisted that, compared to the crisis
we are actually heading for, "the Great World Economic Crisis of
1829-1933" would look like "the Vicar's tea party".

In the last few weeks you had a foretaste of what I had in mind.
But no more than a foretaste, because the structural crisis of the capital
system as a whole, which we are experiencing in our time on an epochal
scale, is bound to get considerably worse. It will become in due course
much deeper, in the sense of invading not only the world of more or less
parasitic global finance but every single domain of our social, economic
and cultural life.

The obvious question we must now address
concerns the nature of the globally unfolding crisis and the conditions
required for its feasible re­solution.

If you try to remember what you heard in the last two weeks endlessly
repeated about the current crisis, one word stands out, overshadowing all
of the other claimed diagnoses and corresponding remedies. That word is
confidence. If we could get a ten pound note for every occasion when that
magic word has been offered for public consumption in the last two weeks
all over the world, not to mention its continued reassertion ever since,
we would be all millionaires. Our only problem would then be what to do
with our suddenly acquired millions. For none of our banks, not even our
recently nationalized banks - nationalized to the tune of no less than two
thirds of their capital assets - could supply the legendary
"confidence" required for safe deposit or investment.

Even our Prime Minister, Gordon Brown, presented us in this respect last
week with the memorable phrase: "Confidence is the most precious
thing." I know the song - and probably most of us do - which tells us
that: "Love is the most precious thing". But confidence in
capitalist banking being the most precious thing?! That suggestion is
utterly perverse!

Nevertheless, the advocacy of this magic
remedy now seems to be universal. It is repeated with such conviction as
if "confidence" could simply rain out of the sky or grow in
great abundance on capitalistically well manured financial trees.

Three days ago (on the 18th of October) the BBC's flagship Sunday
morning interview programme - the Andrew Marr programme - wheeled out a
very distinguished elderly gentleman, Sir Brian Pitman, who was introduced
as the former Head of Lloyd's banking business. They did not say when he
headed that organization, but the way he spoke made it amply clear soon
enough. For it transpired through his respectfully received answers that
he might have been the Head of Lloyd's Bank well before the World Economic
Crisis of 1929-33. Accordingly, to encourage the viewers, he introduced a
great conceptual innovation into the confidence discourse by saying that
our troubles were all due to some Over-confidence. And he immediately also
demonstrated the meaning of "Over-confid­ence", by saying,
more than once in a short interview, that there can be no serious problem
today, because the market always took care of everything, even if
sometimes it went unexpectedly far down. Later it always went up again. So
it will do so also this time, and it will unfailingly go up again and
again also in the future. The present crisis should not be exaggerated, he
said, because it is much less serious today than what we experienced way
back in 1974. For in 1974 we had a 3 days working week in Britain [even if
nowhere else], and now we do not have it. Do we? And who could argue with
that irrefutable fact?

Thus, we now have the magic explanatory
word of all our troubles not stan­ding like an unhappy orphan, alone,
but as part of something like a Fukuyamized pseudo-Hegelian triad:
confidence - lack of confidence and over-confidence. The only constituent
missing from this magic explanatory discourse is now the real foundation
of our perilous banking and insurance system which operates on the ground
of self-serving confidence tricks that sooner or later are bound to be
(and from time to time actually have been) found out.

In any
case, all this talk about the absolute virtues of confidence in capitalist
economic management is much like the explanation offered in Indian
Mythology about the supporting ground of the universe. For in that ancient
vision of the world it is said that the universe is carried, most
reassuringly, on the back of the elephant. And the self-evid­ently
powerful elephant? you might well ask. No one should think of that as a
difficulty. For the elephant is, even more reassuringly, supported on the
back of the cosmic tortoise. But what about the cosmic tortoise itself?
Don't you presume to ask such question, lest you might be fed to the
tigers of Bengal, before they are extinguished.

perhaps (?), The Economist is a little bit more realistic in its
assessment of the situation.

In the context of our painful
subject, the now acknowledged worsening economic crisis, I am going to
give you exact quotations, including some damning figures of no longer
deniable capitalist failures, taken mainly from such well established and
unashameadly class conscious bourgeois newspapers as The Economist and The
Sunday Times. Quoting them meticulously word by word not only because they
are prominent in their field but also in order to avoid that they should
accuse us of "left-wing bias and distortion".

used to say that on the pages of The Economist the ruling class is
"talking to itself". Things have somewhat changed since those
days. For now even in the specialized field of "economic
expertise" the ruling class needs a mass circulation propaganda
organ, for the purpose of general mystification. In Marx's lifetime the
ruling class had plenty of "confidence", and also a great deal
of unchallenged "over-confidence", for needing that. Thus, under
the present less cocky circumstances, the London based mass distribution
weekly paper, The Economist, - the self-righteous mouthpiece of the U.S.
dominated annual "Davos Jamboree" - is well advised to concede
that the crisis we are facing today is concerned with the difficulties of
"Saving the system", according to the full title page of its
October 11, 2008 issue.

We can grant, of course, that nothing
less than "saving the system" (or not) is what happens to be at
stake in our time, even if The Economist's discussion of this problem is
rather strange and contradictory. For in its usual way of trying to
present its highly partisan position as an objectively "balanced
view", by using the formula of "on the one hand and on the other
hand", The Economist always succeeds in reaching its desired
conclusion in favour of the established order. Thus, also on this
occasion, The Economist asserts in its pricipal leader article of the 11th
of October that "This week saw the first glimmer of a comprehensive
global answer to the confidence gap." Now, thankfully, the
"confidence gap", although reprehensible in itself, is expected
to be remedied thanks to a somewhat mysterious "comprehensive global

At the same time, on the more realistic side,
the London weekly also acknowledges in the same Editorial article that

"The damage to the real economy is becoming apparent. In
America consumer credit is now shrinking, and around 150,000 Americans
lost their jobs in September, the most since 2003. Some industries are
hurting badly: car sales are at their lowest level for 16 years as
would-be buyers are unable to get credit. General Motors has temporarily
shut some of its factories in Europe. Across the globe forward-looking
indicators, such as surveys of purchasing managers, are horribly

They do not say, though, that "the
confidence gap" may have something to do with such facts.

Of course, the apology of the system must prevail in every article, even
if it must be presented as the unquestionable word of pragmatic wisdom. In
this sense, "saving the system" for The Economist amounts to the
journal's totally uncritical identification with, and the uncontestable
advocacy of, unlimited economic rescue-opera­tion - to be accomplished
by no means out of the customarily most dogmatically glorified
"market resources" - in favour of the troubled capitalist
system. Thus, even the most cherished and well tried propaganda tenets (of
a not only non-existent but never in reality existed free market) can be
now thrown overboard for the noble cause of "Saving the system".
Accordingly, we are told by The Economist that

"The world
economy is plainly in a poor shape, but it could get a lot worse. This is
the time to put dogma and politics to one side and concentrate on
pragmatic answers. That means more government intervention and
co-operation in the short term than taxpayers, politicians or indeed
free-market newspapers would normally like",[1]

We have
been treated to similar sermons by President George W. Bush before. He
told his television audience two weeks ago that normally and instinctively
he is the believer in, and the passionate supporter of, the free market,
but under the present exceptional circumstances he must think of other
ways. He must begin to think under these difficult circumstances, full
stop. You cannot say that you have not been warned.

The sums
involved in the recommended "pragmatic" solution, which
advocates sweeping aside the "normal likings" of the
"taxpayers and free market newspapers" (that is, the now
advocated solution which means, in truth, the necessary submission of the
great masses of the people to increasing tax-burdens sooner or later) are
literally astronomical. To quote The Economist again: "in little more
than three weeks America's government, all told, expanded its gross
liabilities by more than $1 trillion - almost twice as much as the cost so
far of the Iraq war."[2] "American and European banks will shed
some $10 trillions of dollars."[3] "But history teaches an
important lesson: that big banking crises are ultimately solved by
throwing in large dollops of public money".[4]

Tens of
trillions of dollars of public money "thrown in", and justified
in the name of the claimed "important lesson of history", and of
course in the service of the unchallengeable good cause of saving the
system, that is certainly quite a dollop. No High Street icecream wendor
could ever even dream about such dollops. And if we add to that magnitude
the fact quoted on the same page of the London paper, that in the course
of last year alone "The Economist's food price index jumped by nearly
55%",[5] and "The food-price spike in late 2007 and early 2008
caused riots in some 30 countries",[6] in that case the dollop in
question becomes even more revealing about the nature of the system which
now finds itself in ever deepening crisis.

Can you think of a
greater indictment for a pretendedly unsurpassable system of
econproduction and societal reproduction than the one which - at the
height of its productive power - is producing a global food crisis, and
the suffering of countless millions inseparable from it all over the
world? That is the nature of the system which is expected to be saved now
at all cost, including the currently "dished out" astronomical
economic cost.

HOW can one make some tangible sense at all of
the wasted trillions? Since we are talking about astronomical magnitudes,
I addressed this question to a close friend who is Professor of
Astrophysics at London Univesity. His answer was that I should point out
that one trillion alone is roughly one hundred times the age of our
universe. Now, on the scale of the same magnitude the regularly
understated official figure of the American debt, on its own, amounts in
our days to more than 10 trillion. That is, one thousand times the age of
our universe.

But let me quote you a short passage from a
Japanese publication. It reads like this:

"How much
speculative money is moving around the world? According to a Mitsubishi
UFJ Securities analysis, the size of the global 'real economy', in which
goods and services are produced and traded, is estimated at $48.1
trillion... On the other hand, the size of the global 'financial economy',
the total amount of stocks, securities and deposits, adds up to $151.8
trillion. The financial economy thus has swollen to more than three times
the size of the real economy, growing especially rapidly during the past
two decades. The gap is as large as $100 trillion. An analyst involved in
this estimation said that about half the amount, $50 trillion is scarcely
necessary for the real economy. Fifty trillion dollars are worth well over
5,000 trillion yen, too big a number for me to actually

It is indeed very difficult even to
comprehend, not to mention to justify, as our capital-apologetic
politicians and bankers do, the astronomical sums of parasitic speculation
accumulated to the magnitude corresponding to 500,000 times the age of our
universe. If you wish to have another measure about the magnitude
involved, just imagine an unlucky accountant from Roman times, who is
asked nothing more than simply to chalk up on his blackboard the figure of
5,000 trillion yen, in Roman numbers. He would be in total despair. He
simply could not do it. And even if he had at his disposal Arab numbers,
which he could not have had, even in that case he would need as many as 17
zeros after the number 5 in order to write down the cifre in question.

The trouble is, though, that our well heeled politicians and
bankers seem to think only of the zeros, and not of their substantive
linkages, when they present these problems for public consumption. And
that approach cannot possibly work indefinitely. For one needs much more
than zeros for getting out of the bottomless hole of the global
indebtedness to which we are condemned by the system which they now want
to save at all cost.

AS a matter of fact, Gordon Brown's
newfound popularity has a great deal to do with zeros in more ways than
one. His astonishing new popularity - which, on second thought, might well
turn out to be rather ephemeral - was illustrated last week by the
front-page newspaper headline: "From Zero to Hero". The article
in question suggested that our Prime Minister actually succeeded in
"saving the system". That is how he earned the high acclaim.

The reason why he was hailed in that way, as a hero, was because
he invented a new variety of nationalizing capitalist bankruptcy, to be
adopted with untroubled "free market conscience" by other
contries as well. That made even George W. Bush feel less guilty about
acting against his own proclaimed "passionate instinct" when he
nationalized a huge "dollop" of U.S. capitalist bankruptcy of
which one single item - the liabilities of the giant mortgage companies of
Fannie Mae and Freddie Mac - amounted to 5.4 trillion dollars (that is to
say, the sum required for 54 years of running the Iraq war).

The "pragmatic novelty" - as opposed to "dogma and
politics" in the words of The Economist - of the recent
nationalization of capitalist bankruptcy by "New Labour" is that
the taxpayers get absolutely nothing (in other words, zero-zero-zero as
many times as you like to write it down, even seventeen times) for the
immense sums of money invested in failed capitalist assets, including our
two thirds nationalized British banks. This kind of nationalization of
capitalist bankruptcy is somewhat different from the earlier versions,
instituted after the Second World War when the Labour Party's "Clause
4" - advocating the public control of the means of production - was
still part of its Constitution. For in 1945 the nationalized bankrupt
sectors of the capitalist economy were transferred to state control, for
the duration of being generously fattened up again from general taxation
for the purpose of proper "privatization" in due course.

Even Conservative Prime Minister Edward Heath's 1971
nationalization of the bankrupt Rolls Royce Company followed the same
embarrassing pattern of state controlled and openly admitted
nationalization. In our own days, however, the beauty of Gordon Brown's
solution is that it removes the embarrassment while multiplying manifold
the wasted billions invested in capitalist bankruptcy. Surely that fully
deserves his promotion "From Zero to Hero" as well as the
highest accolade of "Saviour of the World" conferred upon him by
some other newspapers, on account of his great modesty of being satisfied
with absolute zero in exchange for our - not his - generously dispensed
billions. But can this kind of governmental remedy be considered a lasting
solution to our problems even on a short-term basis, not to mention its
required long-term sustainability? Only the fool could believe that.

In truth, the recent measures adopted by our political and
financial authorities only attended to one single aspect of the current
crisis: the liquidity of the banks, mortgage, and insurance companies. And
even that only to a very limited extent. In reality the huge "dollops
thrown in" represent no more than paying the deposit only, so to
speak. Much more will be required also in that respect in the future, as
even the still unfolding disturbances on the world's stock-exchanges
continue to underline it.

However. well beyond the problem of
liquidity, another dimension of just the financial crisis concerns the
near catastrophic insolvency of banks and insurance companies. This fact
becomes clear once their speculatively and irresponsibly assumed, but none
the less existing, liabilities are actually taken into account. To give
you just one example: two of our big banks in Britain have liabilities
amounting to $2.4 trillion each, acquired on the adventurist assumption
that they will never have to be met. Can the capitalist state successfully
bail them out of that size of liability? Where could the state possibly
borrow the money of such magnitude for the rescue-operation required for
the purpose? And what would be the necessary inflationary consequences of
"dishing out such dollops" of truly gigantic rescue-operation by
simply printing the money called for in the absence of other solutions?

Moreover, the problems are by no means exhausted by the
perilous state of the financial sector. For even more intractably, also
the productive sectors of capitalist industry are in serious trouble, no
matter how highly developed and favoured they might appear to be by their
competitively advantageous position in the global pecking order of
transnational capital. Due to our limited time, I must confine myself
again to one, but one very significant, example. It concerns the United
States' motor car industry, greatly humbled in the last few years, despite
all of the subsidies received from the most powerful capitalist state in
the past, counted in many billions of U.S. dollars.

Let me
quote from an article published on Ford Corporation and its globalizing
fantasies way back in 1994, published in The Sunday Times. This is how our
distinguished financial journalists painted in those days their rosy

"Full globalization is being attempted by
multinationals ... 'This is definitely Trotman's baby', said one American
source. 'He has a vision of the future which says that, to be a global
winner, Ford must be a truly global corporation.' According to Trotman,
who told The Sunday Times in October 1993, 'As automotive competition
becomes more global as we get into the next century, the pressure to find
scale economies will become greater and greater. If, instead of making two
engines of 500,000 units each, you can make 1 million units, then the
costs are much lower. Ultimately there will be a handful of global players
and the rest will either not be there or they will be struggling along.'
Trotman and his colleagues concluded that full globalization is the way to
beat competitors such as the Japanese and, in Europe, Ford's arch-rival
General Motors, which retains a cost-advantage over Ford. Ford also
believes it needs globalization to capitalise on fast-emerging markets in
the Far East and in Latin America."[8]

Thus, the
"only" thing Alex Trotman - the British born Chairman of Ford
Corporation at the time - forgot to consider, despite his impeccable
arithmetical skills of knowing the difference between 500,000 and 1
million, was this: what happens when they cannot sell the 1 million (and
many times more) motor cars, despite the company's strategically envisaged
and enjoyed cost-advantage. In the case of Ford Corporation, even the
massive differential rate of exploitation which the company could impose
worldwide as a huge transnational company - that is: paying for exactly
the same work 25 times less to the workers of "Ford Philippines
Corporation", for instance, than to their workforce in the United
States of America - even this unquestionable advantage could not be
considered sufficient for securing a way out of this fundamental

This is where we stand today, not only in the
case of the badly humbled Ford Corporation but also in that of General
Motors, irrespective of its cost-advantage once deeply envied even by the
Ford Corporation of the United States.

Talking about a
recently instituted deal which provides major subsidies by the American
state to the country's giant motor car companies, this is how the unhappy
current situation of the U.S. automotive industry is described in one of
the last issues of The Economist: "the deal [in question] means that
car companies - blessed with the government guarantee - should get loans
with an interest rate of around 5% rather than 15% they would face on the
open market in today's conditions."[9]

However, no amount
of subsidy of any kind can be considered satisfactory enough, because the
"Big Three" companies - General Motors, Ford, and Chryslers -
are on the brink of bankruptcy, despite the fact that Trotsman's dream
baby is by now a fully grown teenager. Thus The Economist must admit that

"Once industrial subsidies like this begin to flow, it is
difficult to stop them. A recent study by the Cato Institute, a rightwing
think-tank, found that the federal government spent some $92 billion
subsidising business in 2006 alone. Only $21 billion of that went to
farmers: much of the rest went to firms such as Boeing, IBM and General
Electric in the form of export-credit support and various research

The Big Three are already complaining that it will
take too long to dish out the [state] money, and they want the process
speeded up. They also want a further 25 billion, possibly attached to the
second version of the Wall Street rescue bill. The logic of bailing out
Wall Street is that finance underpins everything. Detroit cannot begin to
make that claim. But, given its successful lobbying, can it be long before
ailing airlines and failing retailers join the queue?"[10]

The immense speculative expansion of financial adventurism, especially
in the last three or four decades, is of course inseparable from the
deepening crisis of the productive branches of industry and the ensuing
troubles arising from the utterly sluggish capital accumulation (and
indeed failed accumulation) in that productive field of economic activity.
Now, inevitably, also in the domain of industrial production the crisis is
getting much worse.

Naturally, the necessary consequence of
the ever deepening crisis in the productive branches of the "real
economy", as they are now beginning to call it and contrast the
productive economy with speculative financial adventurism, is the growth
of unemployment everywhere on a frightening scale, and the human misery
associated with it. To expect a happy solution to these problems from the
capitalist state's rescue-opera­tions would be a great illusion.

This is the context where our politicians should really begin to
pay attention to the claimed "important lesson of history",
instead of "dishing out large dollops of public money" under the
pretence of "the lesson of history". For as a result of
historical development under the rule of capital in its structural crisis,
in our own time we have reached the point where we must be subjected to
the destructive impact of an ever worsening symbiosis between the state
legislative framework of our society and the material productive as well
as the financial dimension of the established societal reproductive order.

Understandably, that symbiotic relationship can be, and
frequently it also happens to be, managed with utterly corrupt practices
by the privileged personifications of capital, in business as much as in
politics. For, no matter how corrupt such practices might be, they are
fully in tune with the institutionalized counter-values of the established
order. And - within the framework of the symbiosis prevailing between the
economic field and the dominant political practices - they are legally
quite permissible, thanks to the most dubious and often even clearly
anti-democratic facilitating role of the impenetrable legislative jungle
provided in this respect by the state also in the financial domain.

Fraud­ulence, in a great variety of its practicable forms, is
the nor­mality of capital. Its extremely destructive manifestations
are by no means confined to the operation of the military-industrial
complex. By now the direct role of the capitalist state in the parasitic
world of finance is not only fundamentally important, in view of its
all-pervasive magnitude, as we had to find out with shocking clarity
during the last few weeks, but also potentially ca­tastrophic.

The embarrassing fact of the matter is that the giant U.S.
mortgage companies, like Fannie Mae and Freddie Mac, were corruptly
supported and generously supplied with highly profitable but totally
undeserved guarantees by the American State's legislative jungle in the
first place, as well as through the personal services of unpunished
political corruption. Indeed, the capitalist state's ever more dense
legislative jungle happens to be the "democratic" legitimator of
institutionalized fraudulence in our societies. The editors and
journalists of The Economist are in fact perfectly well acquainted with
the corrupt practices whereby, in the case of the giant American mortgage
companies, receiving from their state outrageously preferential treatment
[here I quote The Economist]

"allowed Fannie and Freddie
to operate with tiny amounts of capital. The two groups had core capital
(as defined by their regulator) of $83.2 billion at the end of 2007; this
supported $5.2 trillion of debt and guarantees, a gearing ratio of 65 to
one. [ !!! ] According to CreditSights, a research group, Fannie and
Freddie were counterparties in $2.3 trillion-worth of derivative
transactions, related to their hedging activities. There is no way a
private bank would be allowed to have such a highly geared balance
sheet,[11] nor would it qualify for the highest AAA credit rating. . They
used their cheap financing to buy higher-yielding assets.[12]

[Moreover,] With so much at stake, no wonder the companies built a
formidable lobbying machine. Ex-politicians were given jobs. Critics could
expect a rough ride. The companies were not afraid to bite the hands that
fed them."[13]

Not being afraid "to bite the hands
that fed them" refers, of course, to the American state legislative
body. But why should they be afraid? For such giant companies constitute a
total symbiosis with the capitalist state. This is a relationship
corruptly asserting itself also in terms of the personnel involved,
through the act of hiring politicians who could serve them preferentially,
with a mind-boggling "gearing ratio of 65 to one" and the
associated AAA credit rating, even according to the reluctant confession
of The Economist.

The gravity of the present situation is
underlined in a characteristic way by the circumstance, reported in these
words by The Economist: "traders in the credit-default swaps market
have recently made bets on the unthinkable: that America may default on
its debt."[14] Naturally, such traders react even to events of such
character and gravity that we experience today the only possible way they
can: by squeezing profit out of it.

The big trouble for the
global capital system is, though, that the default of Am­erica is not
unthinkable at all. On the contrary, it is - and it has been for a very
long time - a coming certainty. This is why I wrote many years ago (in
1995, to be precise) that:

"In a world of financial
insecurity nothing suits better the practice of gambling with astronomical
and criminally unsecured sums on the world's stock exchan­ges -
foreshadowing an earthquake of magnitude 9 or 10 on the Financial 'Richter
Scale' - than to call the enterprises which engage in such gambling
'Securities Management'; . When exactly and in what form - of which there
can be several, more or less brutal, varieties - the U.S. will default on
its astronomical debt, cannot be seen at this point in time. There can be
only two certainties in this regard. The first is that the inevitability
of the American default will deeply affect everyone on this planet. And
the second, that the preponderant hegemonic power position of the U.S.
will continue to be asserted in every way, so as to make the rest of the
world pay for the American debt for as long as it is capable of

Of course, the aggravating condition today is
that the rest of the world - even with the historically most ironical
massive Chinese contribution to the balance sheet of the American Treasury
- is less and less capable of filling the "black hole" produced
on an ever growing scale by America's insatiable appetite for debt
financing, as demonstrated by the global reverberations of the recent U.S.
mortgage and bank crisis. This circumstance brings the necessary default
of America, in one of its "more or less brutal varieties", that
much nearer.

The truth of this disturbing matter is that there
can be no way out of these ultimately suicidal contradictions, which are
inseparable from the imperative of endless capital-expansion, irrespective
of the consequences - arbitrarily and mystifyingly confounded with growth
as such - without radically changing our mode of social metabolic
reproduction by adopting the much needed responsible and rational
practices of the only viable eco­nomy,[16] oriented by human need,
instead of alienating, dehumanizing and degrading profit.

is where the overwhelming impediment of capital's self-serving
interdeterminations must be confronted, no matter how difficult it must be
under the prevailing conditions. For the absolutely necessary adoption and
the appropriate future development of the only viable economy is
inconceivable without the radical transformation of the established
socioeconomic and political order itself.

Gordon Brown
recently voiced his displeasure about "unfettered
capi­talism", in the name of totally unspecified
"regulation". You may remember that Gorbachev, too, wanted a
kind of regulated capitalism, under the name of "market
socialism", and you must also know what happened to him and to his
grotesque daydream. On the other hand, British Conservative Prime Minister
Edward Heath's expression, a very long time ago, for the same sin of
"unfettered capitalism" was "the unacceptable face of
capitalism". And yet, "unfettered capitalism", despite its
"unacceptable face", remained all these de­cades not only
"acceptable" but - in the course of its further development - it
had become much worse. For the causal foundation of our ever more serious
problems is not the "unacceptable face of unregulated
capitalism" but its dest­ructive substance. It is that
over­powering substance that must resist and nullify all efforts aimed
at restrain­ing the capital system even minimally - as, indeed, it
actually succeeded in doing so also in the form of metamorphosing
socialdemocratic "Old Labour" in Britain into neoliberal
"New Labour". Accordingly, the periodically renewed fantasy of
regulating capitalism in a structurally significant way can only amount to
trying to tie knots on winds.

But the last thing we need today
is to continue to tie knots on winds, when we have to face the gravity of
capital's structural crisis, which calls for the institution of radical
systemic change. It is most revealing about the incorrigible character of
the capital system that even at a time like this, when the immense
magnitude of the unfolding crisis cannot be denied any longer even by the
system's most devoted ex officio apologists - a crisis described a few
days ago by no less a figure than the Deputy Governor of the Bank of
England as the greatest economic crisis in all human history - nothing can
be contemplated, not to mention actually done, for changing the
fundamental defects of an ever more destructive societal reproductive
order by those who control the economic and political levers of our

In contrast to the recent illumination by his own
Deputy, the Governor of the Bank of England, Mervyn King, had no
reservations at all about the soundness of the cherished capital system,
nor did he have the faintest anticipation of a coming crisis, when he
praised to the sky Martin Wolf's capital-apologetic book, with its
self-com­placent peremptorily assertive title: Why Globalization
Works. He called that book "a devastating intellectual critique of
the opponents of globalization" and a "civilized, wise and
optimistic view of our economic and political future".[17] Now,
however, everybody is forced to have at least some concern about the real
nature and the necessary destructive consequences of dogmatically hailed
capitalist globalization.

Naturally, my own attitude to Wolf's
book was very different from that of Mervyn King and others who share the
same vested interests. I commented at the time of its publication that

"the author, who is the Chief Economics Commentator of the
London Financial Times, forgets to ask the really important question: For
whom does it work?, if it does. It certainly works, for the time being,
and by no means that well, for the decision makers of transnational
capital, but not for the overwhelming majority of humankind who must
suffer the consequences. And no amount of "jurisdictional
integration" advocated by the author - that is, in plain English, the
tighter direct control of the deplored "too many states" by a
handful of imperialist powers, especially the biggest one of them - is
going to remedy the situation. Capitalist globalization in reality does
not work and cannot work. For it cannot overcome the irreconcilable
contradictions and antagonisms manifest through the global structural
crisis of the system. Capitalist globalization itself is the contradictory
manifestation of that crisis, trying to overturn the cause/effect
relationship in a vain attempt to cure some negative effects by other
wishfully projected effects, because it is structurally incapable of
addressing their causes."[18]

In this sense, the recent
attempts to counter the intensifying crisis symptoms, by the cynically
camouflaged nationalization of astronomic magnitudes of capitalist
bankruptcy, out of the yet to be invented state resources, could only
highlight the deep-seated antagonistic causal determinations of the
capital system's destructiveness. For what is fundamentally at stake today
is not simply a massive financial crisis but humanity's potential
self-dest­ruction at this juncture of historical development, both
militarily and through the ongoing destruction of nature.

Despite the concerted mani­pulation of interest rates and the recent
vacuous Summits of the dominant capitalist countries, nothing has been
lastingly achieved by "throwing in gigantic dollops of money"
into the bottomless hole of the "crunched" global financial
market. The "comprehensive global answer to the confidence gap",
as wishfully projected by The Economist and its masters, belongs to the
world of (not so pure) fantasy. For one of the greatest historic failures
of capital, as the long established mode of social metabolic control, is
the continued dominance of potentially most aggressive nation states, and
the impossibility of instituting the state of the capital system as such
on the basis of the structurally entrenched antagonisms of the capital

To imagine that within the framework of such
antagonistic causal determinations a harmonious permanent solution could
be found to the deepening structural crisis of a most iniquitous
production and exchange system - which is now actively engaged in
producing even a global food crisis, on top of all of its other crying
contradictions, including the ever more pervasive destruction of nature -,
without even attempting to remedy its grievous iniquities, is the worst
kind of wishful thinking, bordering on total irrationality. For,
self-contradictorily, it wants to retain the existing order despite its
necessarily explosive iniquities and antagonisms. And the so-called
"jurisdictional integration of the too many states" under a
self-appointed few, or one, as advocated by some capital-apologists, can
only suggest the - equally self-contradictory - permanence of potentially
suicidal global imperialist domination.

This is why Marx is
more relevant today than ever before. For only a radical systemic change
can offer the historically sustainable hope and solution for the future.


* Lecture written for a meeting held in Conway Hall, London, on 21st
October 2008. Este artículo fue enviado por el autor para su
difusión en Herramienta a fines de octubre de 2008. Una vez
traducido, subiremos a la página también la versión
en castellano.

[1] All these quotations are taken from the
same Editorial article of The Economist, 11 October 2008, p. 13.

[2] The Economist, 11 October 2008, special section, p. 3.

[3] Ibid.

[4] Ibid., p. 4.

[5] Ibid.

[6] Ibid., p. 6.

[7] Shii Kazuo in Japan Press Weekly,
Special Issue, October 2008, p. 20.

[8] "Ford prepares
for global revolution", by Andrew Lorenz and Jeff Randall. The Sunday
Times, 27 March 1994, Section 3, p. 1.

[9] "A bail-out
that passed. In the slipstream of Wall'street's woes, the Big Three land a
huge subsidy." The Economist, October 4th, 2008, p. 82.

[10] Ibid., p. 83.

[11] Lehman Brothers, one of the
principal private merchant banks, had a gearing ratio of 30 to 1. That is
bad enough!

[12] "Fannie Mae and Freddie Mac: End of
illusions", The Economist, July 19-25, 2008, p. 84.

"A brief family history: Toxic fudge", The Economist, July
19-25, 2008, p. 84.

[14] "Fannie Mae and Freddie Mac: End
of illusions", The Economist, July 19-25, 2008, p. 85.

[15] "The Present Crisis", quoted from Part IV. of Beyond
Capital (published in London in 1995), pp.962-3. (In Spanish in Más
allá del capital, Vadell Hermanos Editores, Caracas, 2001, pp.

[16] See in this respect: "Qualitative Growth
in Utilization: The Only Viable Eco­nomy", Section 9.5 of my
book, The Challenge and Burden of Historical Time, Monthly Review Press,
New York, 2008, pp. 272-93. (Published in Herramienta, Numbers 36 and 37.)

[17] Mervyn King's endorsement, on the back cover of Martin
Wolf's book, Why Globalization Works, Yale University Press, 2004.

[18] In "Education - Beyond Capital", Opening Lecture
delivered at the Fórum Mundial de Educação, Porto
Allegre, July 28, 2004. In Spanish reprinted in La educación
más allá del capital, Siglo Veintiuno Editores / Clacso
Coediciones, Rio de Janeiro, 2008. See also the chapter: "Why
Capitalist Globalization Cannot Work?" in my book, The Challenge and
Burden of Historical Time, Monthly Review Press, New York, 2008, pp.
380-398; Spanish edition: El desafío y la carga del tiempo
histórico, Vadell Hermanos Editores / Clacso Coediciónes,
Caracas, 2008, pp. 371-389.

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