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CRISIS OF FINANCIAL CAPITALISM
After Russia: Who's turn next?

Whilst everyone, and in particular the experts at the IMF and their feudal court of liberal economists, is spouting forth about global happiness and the triumph of capitalism, everything possible is done to hide the human misery and the chaotic situation the world economy finds itself in.

However, the prognosis for international capitalism is not so good. The industrial countries cannot maintain their levels of growth except at the expence of more unemployment and social instability which takes us back 40 years for some of the population (no social protection, redundancies with no comeback, less working hours with comensurate loss of income...). Meanwhile the poorer countries, or the people who live in them, are becoming poorer in relative terms. In point of fact the wealth gap between, say, the US and Africa has grown of the last 30 years, a fact which flies in the face of received wisdom. Emmerging countries like Brazil, Mexico, South Korea and Indonesia - magnets for foreign investment and areas of growth (between 5 and 10% per annum) - have seen in succession crashes on the stock exchanges and financial havoc... It happened in Mexico in 1994, Korea in 1997 and Indonesia in 1998. Now it is Russia's turn. This is the stability and balance put forward by the exponents of liberal utopianism, a recurring crisis which rides on the backs of the people.

It is, moreover, worthwhile taking a look at how the media only now speak of the Russian crisis. The Russian people have not, in point of fact, had to wait for July 98 to discover exploitation, misery and the liberal morgue. The media actually do not speak of crisis unless it is the interests of capitalists which are at stake. And its the same with the current period of growth in France which is the growth in profit of that clique whilst the workers see no improvement.

FROM THE CAPITALIST MIRAGE....

If there is one country where one can really talk about a liberal utopia it is, indeed, Russia. As the Wall began to fall in 1989 it was clear to one and all (or nearly one and all) that capitalism would come to the rescue. The complete and universal capitalist victory was at hand. Poor countries were emerging from underdevelopment, the rich countries were in the middle of one of those periods of growth which follows unavoidably the last period of crisis whilst pressaging the next one. The so-called communist countries were going to enjoy the magic potion in a similar way. Certainly there would be some sacrifices to be made, such was the level of debate with the people, but there were no doubts. The reality has, however, proved to be a bit short on the fulfilled promises since the end of state capitalism was to give rise to a radiant future. Russia has known only falling output and inflation. Life expectancy has fallen from 63 to 59 since 1990 - the only country where this is the case. The magic potion has turned toxic. Policies implemented seek only to make those sectors profitable where this is a possibility. These sectors are so lucrative that Russia has succeed in pulling the wool over the world's eyes by attracting investment and, more importantly, help from the west. Whilst the people were bled dry and went without their salaries all that was needed was the expectation of gain to be undermined for all the investors to start getting cold feet which increased the anxiety of other investors who also got cold feet which increased....

That is how we arrived at a situation where the stock exchange lost 60% in a week and the rouble halved in value. That is how the power of Mamon and a small clique of international investors can bring a country to its knees in a week. It was, in large part, the collapse in prices for raw materials like oil and nickel which dashed any confidence the investors had in this economy.

... TO THE EL DORADO OF THE LIBERAL UTOPIA

It is clear that the capitalists must have decided that they could drain no more out of the Russian people. Russia, even if it failed to provide us with a communist experiment, succeeded in building a real model of pure capitalism in seven years. A country where capitalists cannot pay their employees, don't pay taxes, where there is next to no legislation to control their excesses, where the health system has been dismantled. That is Russia: the El Dorado of the Liberal Utopia. But seven years later the nightmare has arrived. From being the second world economic power it has been transformed into a country with a Third World hue, a banana republic. Because it is indeed the loss of wealth which some had accumulated so quickly at the expence of the poverty of the masses which signals the disintegration we are witnessing. The mafia is no more and no less than those who live and speculate on the back of the people... no political responsibility or collective decisions: leave the market and those who are profittingfrom it to their own devices. And then when the reforms were not being enacted quickly enough the financial markets decided to move on. Once again economic cynicism is the flavour of the day and happily replaces the politics.

AN ECONOMIC DEBACLE

With the case of Russia now we see the whole economic order stagger. Not that Russia is such a significant economy but the Asian crisis and the difficulties in the raw materials markets have shown capitalism incapable even if it wanted to to provide the most basic that is to say a dignified and decent life for one and all with social needs satisfied and an equal distribution of useful work. Most Asian countries are now beginning to implement anti-liberal policies in order to put the brakes on the disintegration of their economies. This is how it is in Malaysia which has just reintroduced currency controls, despite the protests of the IMF, because these are the cause of the economic debacle. What else could we call the rising unemployment (8 million in Indonesia, 3 million in Thailand as many Koreans and mass misery in Russia)? The IMF, by forcing so called emerging countries to put into effect ultra-liberal policies has thrown them into the current crisis. But as is the case with all capitalist investment cynicism must play its role every now and again to purge the financial system. The latest fashionable prognosis coming from the investors is to say that Russia will be flourishing in a few years time and once again appealing to foreign investors. But given the current state of the world economy one ends up wondering where they will place their money... if they don't go for domestic investment ... which explians why the American and European economies have enjoyed a period of growth.

Capitalism offers only poverty sandwiched between periods of growth. It's the weather forecast of human fortune. As sure as good weather follows bad so it is with capitalist economics with one important difference: capitalism isn't natural and people are beginning to get fed up with it.

translated from Le Monde Libertaire 16th September 1998

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CRISIS OF FINANCIAL CAPITALISM After Russia: Who's turn next?

CRISIS OF FINANCIAL CAPITALISM
After Russia: Who's turn next?