(Based on an article in The Workers' Advocate, December 15, 1974)
. During the past twelve months, the United States has plunged deeper and deeper into an economic crisis. This crisis is characterized by the over-production of commodities resulting in an increasing collapse of industrial production. At the same time as the economic crisis deepens, the U.S. economy is also suffering from a severe financial crisis and a new monetary crisis threatens to break out at any time. This has resulted in galloping inflation at the same time that industrial production is collapsing, worsening the economic crisis and putting the working people in the situation of being "caught between the Devil and the deep blue sea" -- between the jaws of spiraling prices and growing unemployment. On the one hand, there are plenty of goods; on the other hand, fewer and fewer people can buy them.
. In recent weeks, large parts of the auto industry have dramatically shut down, while the housing construction industry has remained in a state of depression. These two important sectors of the production of consumer goods only represent the tip of the iceberg. For close to a year now the Gross National Product has been falling. Industrial production has been declining, wholesale and retail sales are declining and not only are future factory orders down, but there is a growing trend of cancellation of present orders as many types of inventories of goods lie stagnant and unsalable. Most significant, the decline in production of consumer goods is spreading to the production of means of production, such as factory construction, production of heavy trucks, etc. , and becoming general. The over-production crisis is resulting in large numbers of firings and lay-offs of workers and in numerous bankruptcies of businesses and failures of small and large banks.
. The present economic crisis, the sixth since the Great Depression, is rapidly becoming the worst since then. It shows no signs of letting up, but in fact gives every indication of deepening still further. At the same time, inflation and soaring prices have sent the cost of the necessities of life for the working masses spiraling out of reach, rising by more than 10 per cent annually. This, too, is aggravating the economic crisis by causing the domestic market to shrink.
. The economic and financial crises in the U.S. are taking place simultaneously with crises in
many other developed capitalist countries in Western Europe and Japan, and are part of an
economic crisis gripping the world capitalist system. Economic rivalry among the developed
capitalist countries has also cut the markets available for U.S. imperialism. At the same time, the
Soviet Union has restored capitalism and has embarked on the road of its own imperialist
expansion, contending with U.S. imperialism for the shrinking world markets. Both U.S.
imperialism and Soviet social-imperial ism are now having economic troubles, and this is further
sharpening their contention against each other for world hegemony and causing them to threaten
the world with a new world war more devastating than the previous two.
U. S. monopoly capitalists shift the burden
of the crisis onto others
. The U.S. monopoly capitalist class, imprisoned by the laws of capitalism, cannot stave off the economic crisis, which hurts the capitalists' profits, throws many of them out of business and endangers their rule. For this reason, the monopoly capitalists contend frantically with each other and with the non-monopoly capitalists in an effort to keep their profits intact or to minimize their losses. Their main method is to shift the burden of their crisis onto the shoulders of the working class in the U.S, and onto the peoples oppressed by U.S. imperialism in Asia, Africa and Latin America and other countries abroad. In this way the capitalists try to make others pay for their own crimes.
. In the United Slates the capitalist employers shift the burden of the crisis onto the workers first of all by large-scale firings and lay-offs. Nearly 500,000 workers were fired or laid off in October, raising the percentage of the labor force unemployed to 6.5 by November 16 (under-estimated, since government figures ignore the millions of permanently unemployed who have given up looking for work). Hundreds of thousands more workers have been dismissed in the month since then. Since capitalist production is only possible when wage-labor can be exploited in order to expand capital, these firings and lay-offs show the seriousness of the growing breakdown of capitalist production. They also show that when the workers cannot be exploited for a profit, the capitalists toss them aside like waste, to bear the brunt of the crisis. Thus the man-eating exploitation and the miserable insecurity of life the workers face under capitalism (which the bourgeois economists claimed had been eliminated by the "American way of life") stands starkly revealed by the economic crisis.
. While firing or laying off large numbers of workers, the capitalists try to grab higher profits from the remaining employed workers by increasing the intensity of labor (speedup) under the slogan of "more productivity" and by increasing the length of the working day under the policy of compulsory overtime, totally disregarding the health and safety of the workers. Thus the capitalists increase the exploitation of the employed workers in order to shift part of the burden of the crisis onto them.
. In addition, galloping inflation and soaring prices are a further method used by the monopoly capitalists to shift the burden of their crisis onto others. The unprecedented rise in prices in the U.S. is due, in part, to:
. For the workers the effect of these price increases is to increase the cost of all the necessities of life by an immense amount, while at the same time wages -- the price of the worker's labor-power which he sells as a commodity to the capitalist -- are not raised equally. This means that the capitalists' profits increase while the worker's real wages decline. The worker works a shorter part of the day for himself and a longer part for the capitalist than before. Hence, he is exploited at a greater rate, and the capitalist makes a greater profit from employing the same amount of the worker's labor-power.
. To combat this increased exploitation, the workers wage struggles for higher wages. The monopoly capitalists then blame the workers for "causing" inflation, in order to "justify" their increased prices. But this is a fallacy. Wages and prices are not connected, as the capitalists claim. On the average, commodities are sold at their values, which arc determined by the average amount of labor it takes to produce the commodities. However, the worker is not paid for his whole day's work, but generally only for that part during which he produces enough value to equal a subsistence wage. The workers and the capitalists struggle against each other over how much of the workers labor-time will be paid to the worker in wages and how much will be unpaid and go the capitalist in profits. But this has nothing to do with the total value created during that day, which determines the price of the goods. To claim, as the capitalists do, that wage raises cause prices to rise, is to claim that profits are sacred and eternal and cannot be cut by wage raises, while at the same time the workers are expected to peacefully accept wage cuts without a struggle. In fact, in the present conditions of crisis and spiraling prices, the workers must struggle first to counter the previous actions of capital and recover their losses caused by the increased exploitation. Thus, the present clamor by the capitalists (especially in the wake of the coal strike) that the workers cause inflation is doubly hypocritical and only serve to cover their drive for maximum profits.
. The U.S. monopoly capitalists also attempt to shift the burden of their crisis onto the nations oppressed and exploited by them in Asia, Africa and Latin America and elsewhere. Here, too, high monopoly prices are an important method in increasing their plunder and their imperialist profits. The prices of manufactured goods which the U.S. monopolies sell to these countries increase more rapidly than the prices which the U.S. pays to these countries for their raw materials. U.S. imperialism engages in every kind of monopolistic practice and, in the last analysis, supports it by the U.S. imperialist military machine, which maintains bases throughout the world to threaten, attack and occupy the oppressed nations. A case in point is the recent threat by President Ford to seize the Middle East oil fields (a threat backed up by the sailing of a U.S. aircraft carrier into the Persian Gulf).
. But while shifting the burden of the crisis onto others, by their own actions the U.S. monopoly
capitalists unavoidably intensify their immediate difficulties in the economic crisis.
Unemployment and inflation shrink the purchasing power of the masses at home, making it still
more difficult for the capitalists to sell off their amassed commodities. Also, inflation throws the
market for money capital into chaos, since the depreciated dollar cuts the value of the interest on
loans re-paid to finance capital. The only way out for the bourgeoisie under capitalism is the
destruction of productive forces to draw off the over-produced commodities, the conquest of new
markets and the more thorough exploitation of the old. Under present conditions these are a
powerful driving force pushing the bourgeoisie toward war and fascism.
The cause of economic crisis
. The economic crisis is caused by capitalism itself. The anarchy inherent in capitalist production is the cause of economic crisis. This anarchy arises from the basic contradiction of capitalism -- between the organized, social character of production (large-scale production, advanced machinery, highly developed division of labor, etc.) and the private appropriation by a handful of capitalists of the abundant products produced by the workers. Each capitalist lives only to make profits and expand his capital through the exploitation of the workers, so he is forced to revolutionize and develop production through new techniques, more advanced machinery, increased scale of production, etc. Because commodities are produced for unknown buyers, each capitalist sets his machinery of production into motion madly and blindly, producing for a market without knowing whether or not it will be able to absorb the commodities produced. Since the means of production are owned by individual capitalists or by monopoly capitalist groups, each capitalist or monopoly group is forced into savage competition with the others under threat of being wiped out himself. Each is thus forced to develop the productivity of his means of production at a greater rate than the others, assuring overproduction. Thus production by modern capitalist industry and agriculture far outstrips the ability of the market to absorb its products, especially since the private ownership of the means of production by the capitalists keeps the working class and broad masses in a state of poverty, unable to consume all the goods offered on the consumer market.
. The development of competitive capitalism into monopoly capitalism in the late 19th century only sharpened this contradiction by intensifying the anarchy of production. Now most of U.S. production is controlled by handful of finance capitalists, contending violently with each other and with non-monopoly capitalists for the markets. At the same time, to save itself from collapse due to overproduction at home, monopoly capitalism exports capital abroad and the monopoly capitalists of each country contend with those of other countries to divide and re-divide the world between them, in search of maximum profits. This forces the monopoly capitalists to build up a tremendous military machine in order to maintain their control over spheres of influence and seize new ones, further impoverishing the masses at home, who are called on to pay for it through taxes and inflation.
. Further, the greater concentration of capital under monopoly forces the finance capitalists into ever-riskier speculation, thus intensifying the anarchy of production (for example, Franklin National Bank speculated heavily in foreign currencies, leading to its collapse and the disruption of the market). The growth of the armaments industry and the huge hand-outs given to the armaments monopolies by the government also increases the anarchy, due to the over-development of this sector of the economy at the expense of others.
. Thus the development of monopoly intensifies anarchy of production under capitalism and leads to still more immense crises than before, as in the case of the Great Depression of the 1930's.
. The airlines industry is a good example of anarchy of production. The two monopoly capitalist airlines, Pan Am and TWA, which dominate American international air travel, have been plagued with over-capacity. That is, the number of passenger-spaces far exceeds the number of people flying. Nevertheless each of these firms has gone deep into debt to buy jumbo jets in order to edge out each other and other domestic and international competition. This has aggravated their over-capacity. The recent sharp drop in air travel caused by the crisis has squeezed both airlines, threatening their ability to repay their debts to the financiers. In this way, their drive for maximum profits has forced them to develop the means of production anarchically in order to contend with each other.
. Since anarchy of production, which causes economic crises, is inherent to capitalism, capitalism
can never eliminate its periodic crises, which every increasingly threaten its very existence.
The capitalist political programs cannot eliminate crises
but can only shift their burden onto others
. Since crises are caused by the basic contradiction of capitalism, the capitalists and their political parties and politicians cannot eliminate them. They can only carry out programs, dressed up in different disguises, aimed at shifting the burden onto the shoulders of the masses at home and abroad, and at throttling their capitalist rivals in order to take over the whole field for themselves.
. Since World War II, bourgeois economists have been declaring that the Keynesian economics of the Roosevelt brand and other capitalist programs had eliminated crises forever. But the present severe crisis has forcefully reasserted the laws of capitalism discovered by Marx a hundred years ago, so the old gibberish about "eliminating" crises is now being replaced by new gibberish about "solving" them.
. Currently there are two main "solutions" offered for the crisis by the U.S. monopoly capitalists through their politicians and political parties.
. The "solution" offered by the Ford Administration and the Republican Party is cloaked with rhetoric that "inflation is the main problem." They aim to "solve" inflation and crisis by a "tightening of belts", that is, by demanding that the workers accept wage losses and greater exploitation at the hands of the capitalists for the "national interest", that is, for the capitalists' interest. At the same time, the taxes of the workers, according to the Republican program, are to be increased and government services reduced or scrapped. While the Republicans will bestow these "benefits" on the workers, they offer tax breaks for the biggest monopoly capitalists, especially those in heavy industry and production of means of production. In his October WIN ("Whip Inflation Now") speech, Ford also guaranteed that the government will back up the wheelings and dealings of the finance capitalists, promising to "restore [capital markets'] vitality". At the same time, Ford continually hands the monopoly capitalists windfall profits through the increased military spending that goes with the stepped-up arms race.
. In order to enforce the increased exploitation of the workers, the Republicans are carrying out growing repression in U.S. society, increasingly preparing and carrying out suppression of the workers and oppressed masses. Nelson Rockefeller's statement in the Senate confirmation hearings that his only mistake at Attica Prison was that he didn't act fast enough is indicative of the trend.
. At the same time, the so-called "alternative" presented by the Democratic Party, which controls Congress, is to increase the exploitation of the working class by slightly different means. The Democrats hypocritically pose as "friends of the minorities" and as "the party of the working man." Crying crocodile tears for the workers and oppressed nationalities, the Democrats reveal their own capitalists class nature by calling for wage controls even more loudly than the Republicans, while trying to hide this program behind phrases about "price controls" and "controls" on "excess profits". They talk about increasing labor's "productivity" (speeding up the workers). They launch American national-chauvinist movements like "Buy American" in order to carry on trade wars and blame the working people of other countries for the misery brought onto the U.S. workers by the U.S. capitalists. They launch attack after attack on the oppressed nationalities and immigrant workers (like the Kennedy-Rodino Bill, which will escalate state attacks, terrorization, and deportations of oppressed nationalities and immigrants). At the same time, the Democrats are just as warlike as the Republicans for example, they oppose the Palestinian people just as rabidly as the Republicans.
. The bogus debate between the two main capitalist parties, Republicans and Democrats, over
whether to fight inflation or recession, is a smokescreen to hide their contention over who will
get the use of the bourgeois state (government at all levels, military, etc. ) to maximize their
profits. It also hides their practical actions to shift the burden of the crisis onto the workers at
home. These "solutions" to the crisis offered by the capitalists will only intensify the effects of
the crisis while covering up its cause.
The working class's solution to the crisis
. Since the capitalist political parties do not attack the cause of the economic crisis, but instead shift its burden onto the working people, the working class must rely on itself to combat the effects of the crisis and struggle to eliminate its cause the capitalist system itself.
. The workers must fight against increased capitalist exploitation by fighting for higher wages, for job security, against speed-up and compulsory overtime, and for better working conditions. To achieve this requires strengthening the trade unions, fighting for trade-union democracy, organizing the unorganized workers and resisting all attempts of the capitalists and their agents, the labor lieutenants of the capitalist class, to weaken the unions and suppress the workers. It calls for defending the democratic rights of the Black people and other oppressed nationalities, against whom the monopoly capitalists are directing especially savage attacks. It calls for opposing growing repression and opposing imperialist war threats, aggression and plunder against other peoples. It means opposing the superpower politics of U.S. imperialism and Soviet social-imperialism who are contending for world hegemony and threatening the world with a new world war.
. To eliminate economic crises once and for all, the workers must eliminate their cause the capitalist system. Only the proletarian socialist revolution can accomplish this. This means that the workers must mobilize all the oppressed people, rise in revolution and seize political power, overthrow the monopoly capitalist class, establish the working class as the ruling class (the dictatorship of the proletariat), suppress the capitalist class and transform the means of production from private property into property of the working masses, doing away with the exploitation of man by man and with the anarchy of production that plagues the American people under the present dictatorship of the capitalist class. Once capitalism is overthrown and the dictatorship of the proletariat and socialism are established in the U.S. , then an end will be put to the exploitation and oppression by U.S. imperialism of the oppressed nations and peoples of the world and the American people will be able to live in peace with the people of other countries.
. To fight against the effects of the present crisis and to eliminate its cause by overthrowing the monopoly capitalist class, the working class needs its own revolutionary party a Marxist-Leninist Communist Party like the Bolshevik Party in the time of Lenin. Today the "Communist" Party U.S.A. is no longer the workers' revolutionary party it once was. It has been destroyed from within by agents of the capitalists nestling in the workers' ranks (revisionists) and turned into a reformist capitalist party. This places the urgent task before the genuine Marxist-Leninists of uniting to build a new Marxist-Leninist Communist Party to lead the working class in revolution.
. Workers and oppressed people of all nationalities in the U.S., unite to struggle against the monopoly capitalist class and its shifting of the burden of the economic crisis onto the working masses!
. Support the struggle of the oppressed peoples against imperialism and in particular the superpowers!
. Oppose the world war plotted by U.S. imperialism and Soviet social-imperialism!
. Marxist-Leninists, unite to build a genuine communist party and prepare for proletarian revolution!
. Workers, oppressed nations and people of the world, unite! <>
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