Crisis in capitalism

Capitalism has always had business cycles. The capitalist enterprises that produce goods and services are distinctively organized around the conflicted relationship of employer and employees and the competitive relationship of markets.

These central relationships of capitalism together generate cyclical instability. Wherever capitalism became a society’s economic system over the last three centuries, business cycles recurred every four to seven years. Capitalism has mechanisms to survive its cycles, but they are painful, especially when employers fire employees. Widespread pain (unemployment, bankruptcies, disrupted public finances, etc) brought the label “crisis” to capitalism’s cyclical downturns.

Only on special occasions, and rarely, did the cyclical crises in capitalism become crises of capitalism as a system. That has usually required other non-economic problems (political, cultural, and/or natural) to reach crescendo peaks around the same time as a cyclical economic downturn. Today is a time of crisis both in and of US capitalism.

US economic policy now focuses on what is already the worst business cycle downturn since the 1929 crash. As data accumulate, it may well prove to be the worst in global capitalism’s entire history. Forty million jobless US workers find incomes lost, savings disappearing and over-indebted family finances worsening.

Today’s mass unemployment also threatens those still employed, the remaining 120 million members of the US labor force. Mass unemployment always invites employers to cut wages, benefits and working conditions. If any of their employees quit, many among the millions of unemployed will accept those abandoned jobs. Knowing that, most employees accept their employers’ cuts. Employers will justify them as required by “the pandemic” or by what they say are its effects on their profits.

Led by Trump and the Republicans and tolerated by the Democrats’ leaders, US employers are intensifying class war against workers. That is what mass joblessness accomplishes. On one hand, Washington bails out employers with trillions of dollars. On the other, Washington enables (by funding) a mass joblessness that directly undermines the entire working class. Germany and France, for example, could not allow such joblessness because of their labor movements’ and socialist parties’ social influences. In sharp contrast, the predictable results of mass joblessness in the US are deepening social divisions, renewed racism, social protests, and government repression (often violent).

A desperate president fears electoral losses because his government failed to prepare for or prevent (1) a bad virus or (2) a capitalist business cycle downturn or (3) their catastrophic combination. White supremacy, police brutality, mass media control, and so on serve Trump’s efforts to mobilize his political base. So do his attacks on foreign scapegoats aimed to distract blame from his government and from system failures. These include immigrants, China, the WHO, Iran, former European allies, etc.

All these tactical maneuvers by the Trump/GOP regime provoke oppositions. However, they remain dispersed and unorganized politically.

Instead of mobilizing and coordinating them, the Democratic Party leadership does the reverse. It undermined the Bernie Sanders movement, especially by splitting it from a large part of the middle-income African American community. By thereby blocking, if only temporarily, a powerful emerging opposition, Democratic Party leaders deterred mass opposition to bailouts, unemployment, minimal COVID-19 testing, and all the government’s other failures. They just want to win the November 2020 election.

Excerpted from: 'There’s a Crisis in US Capitalism'.

Courtesy: Counterpunch.org