A Socialist World is Probable (I): The Bubble Bursts

March 2, 2013 6:01 pm

recessionThe fall of the Berlin Wall in 1989 precipitated the revolutionary movements of East European working class. They had been shackled to the Stalinist totalitarian system for more than forty years. Most capitalist commentators claimed that ‘capitalism had won’.

The trumpeters of Wall Street and the City of London claimed triumphantly that capitalism was the best socio-economic system that suited humankind and no other system was feasible. Sure, it wasn’t perfect, they crowed, but it was the only game in town. Even the likes of big brained ‘political scientist’, Francis Fukiyama, joined in the chorus of triumphalism, declaiming that this was ‘the end of history’. He declared that ‘liberal democracy’ is the highest form of ‘human government’.

George Bush Snr., the then US President and daddy of the disastrous ‘Dubya’, hastily announced the dawning of a ‘New World Order’. This was in  particular reference to the former USSR that broke up into its component parts as independent states. Its monolithic command economy – for so long stagnating under the dead hand of a self-serving bureaucracy that had sucked the very lifeblood out of Soviet society – ground to a halt and was hastily sold for a song to the lowest bidder.

The US bourgeoisie rubbed their hands at the prospect of being the primary world superpower.  They faced a world with no real rival and, together with the pet poodle-ism of the British ruling class, they could bestride the world markets tied up with a neat little star-spangled bow of ‘globalisation’.

Well, how the mighty have fallen. Their words of arrogant triumphalism turned to ashes in their mouths as we now live in the fifth consecutive year of recession.


Free-wheeling laisser faire capitalism has run rampant these last two decades, riding roughshod over economies the world over. Its agencies – the World Trade Organisation, the World Bank, the United Nations and the International Monetary Fund – have acted as mere gatekeepers to even greater exploitation of the former colonial world of Africa, Asia and Latin America.  Millions of starving, impoverished men, women and children live in dire poverty either deprived of the means of providing their basic needs or are ruthlessly underemployed in sweatshops and near bondage as companies shift operations to low-wage economies often held in the vice-like grip of military-police dictatorships.

In the west, mass de-industrialisation has transformed once secure, stable societies into minimum-waged, de-skilled ‘McJob’ economies with high unemployment creating an ever-ready cheap pool of labour that continues to hold down wage levels.

Meanwhile, vast profits are accrued by the private sector who are served up with more easy pickings from the de-regulation bonanza of our public services. And, rather than investing in industry and manufacturing, our banking and financial sectors have been let loose to gamble freely on the markets, snapping up shares, offloading gilts and bonds in the casino that is global capitalism.

Woe betide anyone who attempts to break free of such super-exploitation or ‘threatens the status quo’. Expect an invasion force to head your way with the latest, state of the art military hardware to pound you into dust, or secret service operatives to undermine you from within, or, at the very least, a suitably funded and trained homegrown oppositional ‘resistance force’ will undermine your economy with bloody civil war.

The very presence of the Soviet bloc used to act as a partial brake on such activities, or at least provided a counter-balance. But while the former USSR reeled from its own crises, the USA was able to stamp up and down and flex its muscles and beat its chest.

However, in the last ten years, this process has ground to a stop.

‘House of Cards’war on terror

US foreign policy, particularly in the Middle East, reaped a whirlwind in 2001, with the murderous attacks in New York and Washington on 9/11. In its haste to teach former client Saddam Hussein a lesson for his invasion of Kuwait back in 1990, American forces, under the auspices of the UN, launched an invasion of Iraq using Saudi Arabia as a base. The likes of radical jihadists, Al-Quaeda, resented the presence of such a force in the land of Mecca. This and the US’s support of Israel only added to resentments. Bush Jnr.’s response to the attacks on 9/11 was to unleash a ‘War on Terror’ and the invasions of Afghanistan (2001) and Iraq (2003). Wars that were to cost dear in lives and treasure.

Furthermore, the US hawks were now faced with a reviving oil rich Russia under the gangster capitalism of Vladimir Putin, a figurehead who was now prepared to forthrightly oppose any further expansion of NATO territory or a new generation of missiles pointing Moscow’s way.

Moreover, in 2008, the capitalist House of Cards came toppling down with the collapse of the ‘sub-prime’ housing market in the US itself. Mortgage loans made to borrowers who would never be able to afford to pay them back sparked a crisis of confidence, particularly in one of the USA’s foremost banking houses – Lehmann Brothers – whose tentacles stretched around the world and back. The domino effects hit virtually every country in the world as debts were ‘called in’. The ‘unthinkable’ had happened. It was the biggest crisis since the Wall Street Crash of 1929.

George ‘Dubya’ Bush Jnr., the arch neo-conservative, the public representative of rightwing American capitalism, was forced to take a number of US banks into public ownership – just like those very ‘commies’ he had spent his life railing against. Like the old saying went: ‘when America sneezes, the rest of the world catches cold’. So interconnected are the international banking system and financial houses, linked by a million threads, once more, as so regularly happens, capitalism dragged the world towards an economic, social and political black hole.

As a consequence of this world-wide disaster of capitalism, millions have been thrown out of work; in the USA the figure stands at 12 million; in Britain alone 2.5 million and millions more across the EU. Behind them are the working poor whose wages have been held down by unscrupulous bosses and subsidised by the taxpayer.

‘Debt nationalised, profits privatised’

In Britain, the Labour government wasocialisms once the party of full employment, the creator of the welfare state and the NHS. Now long since transformed into a neo-liberal formation that mimicks the policies of Tories, the party of the rich, was forced to adopt Keynesian policies to bail the capitalist system out. In effect, the ‘debt’ was nationalised, but the profits continue to remain ‘privatised’ as the millionaire class continued to make money hand over fist by foisting austerity policies on the working class and attacking the public sector and local authorities.

In the developing countries, poverty increased to a level that an eternity of ‘Red Nose Days’ could never alleviate.

This was the face of capitalism as it stood by 2008-09. It had delivered, as so often in its history –  unemployment, stagnation, low pay and many of our people locked into a cycle of deprivation. The capitalists of all political hues only offer swingeing cuts and austerity for years to come.

The late historian, Eric Hobsbawm, noted that the financial crisis of 2008, that remains with us today, was ‘the capitalist equivalent of the fall of the Berlin Wall’.

Out of the wreckage of this misery, however, are the stirrings of resistance, the beginnings of a fight back that may turn the tide both here and abroad.


NEXT –  A Socialist World is Probable (II): An Absence of Fire

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