[OPE] Samir Amin, "Financial collapse, systemic crisis? Illusory answers and necessary questions"

From: Gerald Levy <jerry_levy@verizon.net>
Date: Sun Nov 23 2008 - 02:44:50 EST

Financial collapse, systemic crisis ?
Illusory answers and necessary answers

 by Samir Amin

 Paper introducing the World Forum of Alternatives, in Caracas, october 2008

 The financial crisis could not be avoided

 The violent explosion of this crisis did not surprise us; I mentionned
 it a few months ago while the conventional economists were ignoring its
 coming development and consequences, especially in Europe. In order to
 understand it we must get rid of the conventional definition of the
 system which qualifies it as “neo-liberal” and “global”. This definition
 is superficial and masks the essential. The current capitalist system is
 dominated by a handful of oligopolies that control the basic decisions
 making of the world economy. These oligopolies are not solely financial;
 such as the banks or the insurance companies, but include enterprises
 involved in industrial production, services, transports and the like.
 The way they are financiarized is their chief characteristic. We must
 understand here that the main source of economical decision has been
 transferred from the production of surplus value in production towards
 the redistribution of profits between the oligopolies. To that effect
 the system needs the expansion of financial investments. In that respect
 the major market, the one which dominates all other markets, is
 precisely the monetary and financial market. This is my definition of
 the "financiarization" of the global system. Such a strategy is not the
 result of independent "decisions" of banks, it is rather that the choice
 of the “financiarized” groups. These oligopolies hence do not produce
 profits; they just swipe the monopolies’rent through financial investments.

 This system is extremely profitable for dominating sectors of the
 capital. Thus, the system should not be qualified "market economy"
 (which is an empty ideological qualification) but as a capitalism of
 financiarized oligopolies. However, financial investment could not
 continue indefinitely, while the productive basis was growing at a low
 rate. Consequently, we have the logic of a “financial bubble”, the sheer
 translation of the financial investments system. The gross amount of
 financial transactions reaches two thousands trillions alone, while the
 world GDP is 44 thousands trillions only. Quite a huge multiple! Thirty
 years ago, the relative volume of such transactions did not have this
 extent. As a matter of fact, those transactions were directed in general
 and expressly to cover the operations linked to production, and internal
 and external trade. The overall outlook of this financed oligopolies
 system was – as I said previously- the Achilles’ heel of that capitalist
 structure. The crisis was doomed to be initiated by a financial collapse.

 Behind the financial crisis, the systemic crisis of the aging capitalism

 To attract the attention on the financial collapse is not enough. Behind
 it, a crisis of real economy is standing out, since the financial drift
 was continuously asphyxiating the growth of the production basis.
 Solutions brought to the financial crisis can just lead to a crisis of
 the real economy, i.e. a relative stagnation of the production with its
 side effects: regression of wages, growth of unemployment, growing
 precariousness and aggravation of poverty in the Southern countries. We
 must speak now about depression and no more about recession.

 Behind this crisis, the systemic crisis of capitalism is looming right
 after. The pursuit of the model based on the growth of the real economy
 –as we know it- and of the consumption attached to it, has become, for
 the first time in history a real threat for the future of humankind and
 the planet.

 The major caracter of this systemic crisis is related to the natural
 resources of the planet, now less abundant than half a century ago. The
 North-South conflict constitutes for that reason the central axis of
 coming struggles and conflicts.

 The production and consumption-waste system at the moment forbids the
 access to the world natural resources for the majority of the planet,
 i.e. the peoples of the South. Previously, an emergent country could
 take its share of these resources without questioning the privileges of
 the affluent countries. But today, it is no more the case. The
 population of opulent countries -15% of the planet’s population- has to
 monopolize for its own consumption and waste 85% of the world resources,
 and cannot tolerate that newcomers may reach these resources, since they
 would provoke shortages for rich people’s standard of living.

 If the USA has formulated an objective of military control of the
 planet, it is because, without it, they cannot secure the exclusive
 access to these resources. As we know: China, India and the South as a
 whole need them as well for their development. For the USA, they must
 limit the access and ultimately, there is only one mean: war.

 On the other hand, to preserve energy sources of fossil origin, USA,
 Europe and others develop production of bio-fuel projects to a large
 scale, to the detriment of food production, still accusing the rise of

 Illusory answers of the governing powers

 Governing powers, under the rule of financial oligopolies, do not have
 any other project except to restore the same system. However, their
 success is not impossible, if they can inject enough liquidities to
 restore the credibility of the financial investments, and if the
 reactions of the victims –working classes and nations of the South-
 remain limited. But, in this case, the system steps back to better jump
 and a new financial collapse, still deeper, is unavoidable, since the
 “adjustments” for the management of financial and monetary markets are
 not wide enough, because they do not question the power of oligopolies.

 Furthermore, answering the financial crisis by injecting phenomenal
 public funds to re-establish the security of the financial markets is
 amusing: first, profits were privatized, if they are jeopardized, the
 losses are socialised! Reverse, I win, head, you loose.

 Conditions for a genuine positive answer to the challenges

 To say that the State’s interventions may change the rules of the game,
 lessen the drifts, is not enough. We must define the logics of that
 intervention and its social purpose. Of course, we could come back in
 theory to the formulas associating public and private sectors, to a mix
 economy as it existed during the glorious thirties in Europe and at the
 time of Bandoung in Asia and in Africa, when State capitalism was
 largely dominant, accompanied by strong social policies. But this kind
 of State intervention is not on the agenda. Also, are the progressive
 social forces able to impose such a transformation? Not yet to my

 The other choice is the toppling of the oligopolies’ exclusive powers,
 unthinkable without, finally, their nationalisation leading
 progressively to the socialisation of their management. End of
 capitalism? I do not think so. Yet, I submit that changes in classes'
 relations are possible, imposing adjustment to the capital, in answer to
 the demands of working classes and peoples. The conditions for such an
 evolution to occur imply the progress of social struggles, still
 fragmented and on the defensive position altogether, moving towards a
 political coherent alternative. In that perspective, the long transition
 from capitalism to socialism becomes possible. The advances in this
 direction are obviously always uneven from one country to the other and
 from one phase to the other.

 The dimensions of this desirable and possible alternative are numerous
 and concern all aspects of economical social and political life. I will
 recall here the general lines of this necessary answer:
(i) The re invention by the working people of adequate organizations
 allowing the construction of their unity, bypassing the fragmentation
 due to the forms of exploitation (unemployment, precariousness and
(ii) The awakening of theory and practice for democracy associated to
social progress and respect of people’s sovereignty, not dissociated
 from them.
(iii) The emancipation from the liberal virus based on the myth that the
 "individual" has already become the subject of history. Frequent rejects
 of ways of living associated to capitalism (multiple alienations,
 patriarchal relations, consumerism and destruction of the planet) signal
 the possibility of this emancipation.
(iv) To get rid of atlantism (NATO) and militarism, associated to it,
 aiming at the organization of the planet on the basis of apartheid on
 the world scale.

 In the countries of the North, the challenge is to avoid that the
 general opinion adopts a consensus in support of privileges unacceptable
 by the peoples of the South. The necessary internationalism goes through
 anti imperialism and not the “humanitarian”.

 In the countries of the South, the strategy of the world oligopolies is
 to transfer the weight of the crisis on these peoples (devaluation of
 money reserves, fall of the export raw resources prices and rise of
 import ones). In counterpoint the crisis presents the opportunity for
 the renewal of national, popular, democratic alliance of working
 classes, and on that basis the move from a pattern of capitalist
 dependent development with growing exclusion of majorities towards an
 alternative pattern of inclusive development, in other words
 "delinking". This involves:

 (i) The national control of monetary and financial market (moving away
 from the integrated global monetary and financial "market").
(ii) The control of modern technologies, accessible now (defeating the
 exclusive monopoly of the North, overprotected by WTO rules on
 industrial property).
(iii) The recuperation of the use of natural resources.
(iv) The defeating of global management, dominated by the oligopolies
 (WTO) and the military control of the planet by the USA and their allies.
(v) The liberation from the illusions of an autonomous national
 capitalism system as well as of passeist myths (para religious or para
(vi) The agrarian question lies in the heart of decisive choices in
 Third world countries. An inclusive pattern of development needs an
 agrarian radical reform, that is a political strategy based on the
 access to the soil for all peasants (half of humankind). On the
 opposite, the solutions proposed by the dominant powers –to accelerate
 the privatization of arable soil, and its transformation into
 merchandise- lead to massive rural disintegration. The industrial
 development of the concerned countries being not able to absorb this
 overabundant manpower, this one crowds together in shantytowns or risks
 its life trying to escape in dugouts via the Atlantic Ocean. There is a
 direct link between the suppression of access to the soil and the
 migratory pressures.
(vii) Can regional integration, while encouraging the emergence of new
 development poles, constitute a resistance and an alternative?
 Regionalisation is necessary, maybe not for giants such as China, India
 or even Brazil, but certainly for many other regions in South-East Asia,
 in Africa or Latin America. Venezuela has rightly chosen to create ALBA
 (Bolivarian Alternative for Latin America and the Caribbean’s) and the
 Bank of the South (BANCOSUR), long before the crisis. But ALBA –an
 economical and political integration project- has not yet received the
 support of Brazil or even Argentina. However, BANCOSUR, whose aim is to
 promote another development, gathers these two countries, even though
 they still have a conventional conception about the role of this bank.

 Progresses in this or that direction, North and South, the basis of
 workers and peoples internationalism, constitute the only guarantees for
 the reconstruction of a better, multipolar democratic world, the only
 alternative to the barbarism of the aging capitalism. More than ever,
 the struggle for the 21st century socialism is on the agenda.

Translated from French by Daniel Paquet for Investig'Action
Revised by Samir Amin

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