- While progressives and leftists write about the "crises
of capitalism", manufacturers, petroleum companies, bankers and most
other major corporations on both sides of the Atlantic and Pacific coast
are chuckling all the way to the bank.
-
- From the first quarter of this year, corporate profits
have shot up between twenty to over a hundred percent, (Financial Times
August 10, 2010, p. 7). In fact, corporate profits have risen higher than
they were before the onset of the recession in 2008 (Money Morning March
31, 2010). Contrary to progressive bloggers the rates of profits are rising
not falling, particularly among the biggest corporations (Consensus Economics,
August 12, 2010). The buoyancy of corporate profits is directly a result
of the deepening crises of the working class, public and private employees
and small and medium size enterprises.
-
- With the onset of the recession, big capital shed millions
of jobs (one out of four Americans has been unemployed in 2010), secured
give backs from the trade union bosses, received tax exemptions, subsidies
and virtually interest free loans from local, state and federal governments.
-
- As the recession temporarily bottomed out, big business
doubled up production on the remaining labor force, intensifying exploitation
(more output per worker) and lowered costs by passing onto the working
class a much larger share of health insurance and pension benefits with
the compliance of the millionaire trade union officials. The result is
that while revenues declined, profits rose and balance sheets improved
(Financial Times August 10, 2010). Paradoxically, the CEO's used the pretext
and rhetoric of "crises" coming from progressive journalists
to keep workers from demanding a larger share of the burgeoning profits,
aided by the ever growing pool of unemployed and underemployed workers
as possible "replacements" (scabs) in the event of industrial
action.
-
- The current boom of profits has not benefited all sectors
of capitalism: the windfall has accrued overwhelmingly with the biggest
corporations. In contrast many middle and small enterprises have suffered
high rates of bankruptcy and losses, which has made them cheap and easy
prey for buyouts for the 'big fellows' (Financial Times August 1, 2010).
The crises of middle capital has led to the concentration and centralization
of capital and has contributed to the rising rate of profits for the largest
corporations.
-
- The failed diagnosis of capitalist crises by the left
and progressives has been a perennial problem since the end of World War
II, when we were told capitalism was 'stagnant" and heading for a
final collapse. Recent prophets of the apocalypse saw in the 2008-2009
recession the definitive and total crash of the world capitalist system.
Blinded by Euro-American ethnocentrism, they failed to note that Asian
capital never entered the "final crises" and Latin America had
a mild and transient version (Financial Times June 9, 2010, p. 9). The
false prophets failed to recognize that different kinds of capitalism are
more or less susceptible to crises and that some variants tend to experience
rapid recoveries (Asia-Latin America- Germany) while others (US, England,
Southern and Eastern Europe) are more susceptible to anemic and precarious
recoveries.
-
- While Exxon-Mobile reaped over 100% growth of profits
in 2010 and the auto corporations recorded their biggest profits in recent
years, the workers' wages and living standards declined and state-sector
employees suffered harsh cutbacks and massive layoffs. It is clear that
the recovery of corporate profit is based on the harshest exploitation
of labor and the biggest transfers of public resources to the large private
corporations. The capitalist state, with Democratic President Obama in
the lead, has transferred billions to big capital via direct bailouts,
virtual interest free loans, tax cuts and by pressuring labor to accept
lower wages and health and pension givebacks. The White House plan for
'recovery' has worked beyond expectations corporate profits have
recovered; "only" the vast majority of workers have fallen deeper
into crises.
-
- The progressives' failed predictions of capitalism's
demise are a result of their underestimation of the extent to which the
White House and Congress would plunder the public treasury to resuscitate
capital. They underestimated the degree to which capital had been freed
to shift the entire burden of profit recovery onto the backs of labor.
In that regard, progressive rhetoric about "labor resistance"
and the "trade union movement" reflected a lack of understanding
that there has been virtually no resistance to the roll back of social
and money wages because there is no labor organization. What passes for
it is totally ossified and at the service of the Democratic Party's Wall
Street advocates in the White House.
-
- What the current unequal and uneven impact of the capitalist
system tells us is that capitalists can overcome crises only by heightening
exploitation and rolling back decades of "social gains". The
current process of profit recovery, however, is highly precarious because
it is based on exploiting current inventories, low interest rates and cutting
labor costs (Financial Times August 10, 2010, p 7). It is not based on
dynamic new private investments and increased productive capacity. In
other words, these are "windfall gains" - not profits derived
from increased sales revenues and expanding consumer markets. How could
they be if wages are declining and unemployment/underemployment/and
lost labor is over 22%? Clearly, this short-term profit boom, based on
political and social advantages and privileged power, is not sustainable.
There are limits to the massive layoffs of public employees and production
gains from the intensified exploitation of labor something has to give.
One thing is certain: The capitalist system will not fall or be replaced
because of its internal rot or "contradictions".
|
