The economic crisis shows the necessity
of struggle and revolution

(Based on an article in The Workers' Advocate, February 25, 1980, pp. 1-2)


. The crisis gripping the U.S. monopoly capitalist economy is deepening and broadening with every passing day. According to minimized official figures, unemployment has again reached 6.2% of the workforce. Over the last five years unemployment levels have remained higher than at any time since the Depression and are once again headed upwards. At the same time the U.S. already has the second highest level of unemployment in the industrially developed capitalist world. Inflation too is at record levels. In 1979 the Consumer Price Index soared 13.3%, marking the highest inflation rate since the conclusion of World War II. And last month consumer prices rose at an 18.2% annual rate, demonstrating that skyrocketing inflation levels are not letting up. 1979 also witnessed the continued stagnation of industrial production with a near zero growth in industrial output. Moreover, as the year 1980 begins, all indications point to the fact that the monopoly capitalist economy is on the brink of renewed and deeper industrial crisis. The recent collapse of the auto market is such an indicator. 1979 auto sales were down over 10% from the year before and are continuing to fall. In mid-January a third of the auto assembly plants were closed, and 143,300 auto workers were on indefinite layoffs with many thousands more on short-term layoffs. Thus, far from recovery and economic health, the obvious reality is a thoroughly disease-ridden and crisis-stricken monopoly capitalist economy sitting on the precipice of even deeper crisis and decline.

. For the working class and the masses of the people the crisis has brought unbearable hardship. The over six million unemployed have been deprived of any means of securing a livelihood for themselves and their families. Only if they are lucky do the jobless receive measly unemployment or welfare payments, which are not nearly adequate to keep body and mind together. At the same time, the workers remaining on the job face man-eating speedup and overwork, and the workplaces are becoming ever more dangerous to the workers' very life and limb. Moreover, the workers' real take-home pay is being ravaged by the high cost of living and unbearable tax increases. According to official figures, the working people suffered a devastating 5.3% real decline in their purchasing power in 1979, with an additional decline of 1.1 % in January 1980 alone.

. Furthermore, every degree of the further impoverishment and ruin forced on the working masses has witnessed a corresponding increase in the profits of the monopoly capitalist exploiters. The annual doubling of the profits of the oil corporations is a case in point, and the other biggest banks and corporations continue to rack up record profits as well. The economic crisis brings about the acceleration of the polarization of society -- the historical process whereby the rich get richer and the poor get poorer.

By their own admission the rich have no solution to the crisis
and can only predict a future of doom and gloom

. By their own self-confessions neither the bankers on Wall Street nor the economic "experts" in Washington have any solutions to the deepening economic crisis. Short-term predictions of renewed recession and long-term predictions of a future of doom and gloom is all the captains of monopoly capital have to offer. This was the message Carter delivered to Congress in his Annual Economic Report on January 30. According to Carter: "There are no economic miracles to be performed", and therefore the people should reconcile themselves to their worsening situation. If the working masses go down on their knees and "with patience and self-discipline" make "sacrifices" at the altar of the profits of the millionaires and billionaires, only then is there any possibility of some improvement in the situation. And even then the brightest future Carter can offer is that: "The 1980's can be a decade of lessened inflation and healthy growth." In other words, as Carter himself admits, it will in fact be a decade of high levels of inflation and unemployment.

. In 1976, Democratic Party candidate Carter ran for office pledging "full employment" as the "friend of labor and minorities". And in 1978 the Carter administration passed through Congress the Humphrey-Hawkins Full Employment and Balanced Growth Act, which had the alleged goal of reducing the rate of unemployment to 4% by 1983 and the inflation rate to 3% in the same year. But two years later, Carter himself is predicting that in 1980 unemployment levels will reach 7.5% and that inflation will continue to soar at over a 10% annual rate. As for the false promises of Humphrey-Hawkins, Carter has postponed their realization until 1985 (to reduce unemployment to 4%) and 1988 (to bring inflation down to 3%). So much for the cheap lies of "full employment and balanced growth" from the "pro-labor" demagogues of the Democratic Party!

. Having no solution to the crisis, the bourgeois economists have resorted to solving the crisis by simply redefining it. They have redefined a "full employment economy" as having 4 to 5% of the active working population unemployed -- that is 4 to 5 million workers out of work! Now the White House "inflation fighter", Alfred Kahn, has set to work "controlling inflation" by proposing to exclude from the CPI the prices for such things as housing mortgages, which Kahn complains are soaring so rapidly that they "distort" the rate of inflation!

. Of course, swindle can only go so far in hiding reality and the scope and depth of the economic crisis. The "official optimism" in the ranks of the ruling class is giving way to official pessimism and forecasts of bleak prospects for the future. As Business Week, that slick magazine for corporate executives, states: "But the golden age of the consumer is over. The U. S. standard of living is shrinking. .  .  . The American credo that each generation can look forward to a more comfortable life than its predecessor has been shattered." (Business Week, "The Shrinking Standard of Living," January 28, 1980)

. This admission reflects the fact that the hoax of the so-called "affluent society" or the so-called "consumer society" has gone bankrupt. The enormous propaganda built up about the "constantly rising standard of living" and the great hocus-pocus about "unlimited opportunities for individual advancement" are all being smashed to smithereens against the realities of the economic crisis. The crisis is demonstrating for all to see the insanity of the capitalist system. This system of brutal exploitation and oppression has lost any reason to exist and cannot even provide the basic necessities of life for the people in a country of immense wealth and economic resources.

The rich are waging an all-sided offensive
to shift the burden of the crisis onto the working class

. Of course, the official pessimism about the economic prospects is being used to create a definite public opinion. That is that the working class should "lower its expectations", make "sacrifices" and tone down its demands, "considering the economic climate", etc. , etc. This propaganda too shows that the rich have no solution to the crisis but to squeeze the masses even harder. The capitalist monopolies are waging an intense and all-sided offensive to preserve and increase their profits by dumping the burden of the crisis onto the workers, onto the poor of city and country at home, and onto the oppressed nations and peoples abroad. The capitalist employers are intensifying the exploitation of the workers through the cutting of real wages by means of inflation and through the rationalization of industry, large-scale layoffs and plant closings, and productivity drives to impose speedup, job combinations, etc. The restoration of the high level of capitalist profits over the last three years is a direct result of these crisis measures imposed on the working class -- the unbearable overwork in the plants and the consequent permanent elimination of hundreds of thousands of jobs, combined with the drastic cuts in real take-home wages due to record inflation and tax increases.

. It is this capitalist offensive against the working masses which has been at the center of Carter's domestic policy, a savage anti-working class policy which this smiling lackey of the monopolies again reasserted in his Annual Economic Report to Congress. In recent years the crisis measures against the working class are invariably imposed under the hoax of "fighting inflation". In his report Carter stressed that "It is my strong conviction that inflation remains the number one economic problem" and that "to fight inflation that we act along four lines. " Carter spelled out this four pronged assault on the livelihood of the working masses as follows:

. Besides fighting the working class in the name of "fighting inflation", Carter also gives lip service to reducing unemployment in order to impose further anti-working class measures. Carter continues to preach saintly lies about "pursuing the goals of full employment". Meanwhile, the capitalist employers continue to hurl record numbers of workers into the ranks of the unemployed, and millions upon millions of workers are condemned to joblessness, starvation and despair. The official unemployment figure of 6. 2%, or over six million workers, actually minimizes the true depth of unemployment. It ignores those who have given up looking for work, the under-employed, many of the unemployed forced onto welfare, etc. , etc. Unemployment is closer to double the official figure. Unemployment is even more devastating for the oppressed nationalities and the youth. In 1979 official unemployment levels among black workers was over 10%, for youth 16 to 19 years old it was over 15%, and the astronomical rate for black teenagers was over 35%.

. For his 1981 budget Carter has proposed: "Substantial increases in spending for education training and employment programs.'' But Carter's measures have nothing to do with providing sufficient work for the millions of unemployed so that they can earn a living. And one of these measures is the welfare reform bill which Carter has allotted funds for in his proposed budget. Patterned after Nixon's notorious "welfare to workfare" schemes, this so-called reform will force welfare recipients into public sector jobs where they will receive "benefits" at or even below minimum wage.

The working class is rising in struggle
against being saddled with the burden of the economic crisis

. Against the monopoly capitalist offensive to make the people pay for the crisis, the working class is rising in struggle. The ever-deepening crisis is a source of revolutionary ferment. It is bringing the widest sections of the working masses into activity and struggle against the oppression of the big bourgeoisie. The crisis is bringing home the fact that there can be no salvation for the workers in the false promises and lies of the capitalist politicians. It is only the resistance movement of the working class itself which can block the capitalist offensive and save the workers from total ruin. It is only by resolutely defying Carter's wage controls and carrying out vigorous struggle to press their demands for higher wages that the workers can find any relief from the ravages of inflation. Relying on their own efforts the workers must put up a stiff fight against the brutal productivity drives, speedup, overtime and murderous working conditions and against the layoffs and plant closings.

. The economic movement of the proletariat to resist being saddled by the economic crisis is an absolutely necessary struggle. The rich must be made to pay for the crisis. The revolutionary mass struggle against increased exploitation is essential to prepare the working class for carrying out the revolution and the overthrow of the exploiters altogether.

The crisis shows that capitalism has had its day
and must be replaced by socialism

. The U.S. monopoly capitalist system is in the clutches of an all-sided and comprehensive crisis. Economic crises are an inherent fellow-traveler of the monopoly capitalist system, and with the further decay of imperialism they are becoming even more frequent and severe. The present crisis is particularly acute and prolonged because, among other things, it is interwoven with a severe energy crisis as well as a financial and monetary crisis. The iron laws which govern the capitalist mode of production as revealed by Marx and Lenin are in effect in full, devastating force.

. At the foundation of the economic crisis is an industrial crisis of overproduction. The root cause of this crisis lies in the fundamental contradiction within the monopoly capitalist system of production for maximum profit. This is the contradiction between the existence of modern, large-scale, socialized production and the outdated and backward system of private appropriation of the product of tens of millions of producers by a tiny handful of capitalist owners. With the inherent anarchy of capitalist production, with the various capitalist concerns competing for markets and profits with their capitalist rivals, the powerful productive capacities inevitably come into contradiction with and outstrip the capacities of the market, a market restricted by the inherent impoverishment of the masses under capitalism.

. Hence the inevitable clash of the productive forces against the moribund capitalist relations of production and the resulting destruction of the productive forces. Hence the layoffs and plant closings for lack of a market. Hence the howling contradiction where the working masses are being squeezed to the wall and forced to go without even the basic necessities of life because too much wealth has been produced. Such is the total madness of the monopoly capitalist system. This system cannot be straightened out. It is rotting alive. The crisis is laying bare the reality that capitalism has long ago had its day and must go. The old relations of production, of private capitalist ownership, must be replaced by the new socialist relations of production. Through the proletarian revolution, capitalism will be replaced by socialism, the monopoly capitalists will be expropriated and the exploitation of man by man will be abolished. The factories and other means of production will become the public property of the working class. Production will be organized to guarantee the maximum satisfaction of the material and social needs of the vast majority of the population instead of the securing of maximum profits for a handful of capitalist parasites. It is only such a socialist revolution which can put an end to the growing impoverishment and ruin of the working class. To achieve this end the working class must organize itself as a class independent of and opposed to the exploiters and the political parties of the rich. The working masses must advance the revolutionary struggle against the class enemy, against starvation, fascism and war, and in the course of struggle get organized to overthrow the exploiters altogether. The way out of the crisis for the working class and people is the socialist revolution. []

Back to main page, how to order CV, write us!

Last changed on February 21, 2009.