The following is an  introduction to an educational which I led for the New Jersey District of the CPUSA in a conference call.

The discussion which followed was both very valuable and insightful. I am posting the introduction, followed by a few comments about the discussion both so that those who could not participate will be informed about events and for those who read PA online, since I believe it will be a interest to  them.

What is the basis of the economic crisis?

First, we have seen the concentration of capital on  a global level over the last three plus decades in unprecedented ways, directly connected to policies of deregulation and privatization everywhere

This concentration of capital has produced in the U.S. and globally a spectacular rise in income inequality, which has produced a lack of effective purchasing power to deal with the overproduction which the global expansion of industry has created. For Marxists this has been and continues to be the basis of the structural crisis of capital and it been since capitalism became dominant. Capitalism for Marxists and any rational person for that matter is a system which seeks to keep labor costs down in order to produce more and more for profit  simply loses its market. Since the wages and salaries of labor also purchase the goods that are produced, the natural workings of capitalism serve to undermine capital profit, throwing the since inevitably into crisis. With the development of modern industry, mass production technologies, and their quantitative and qualitative expansion, this crisis becomes greater in its intensity and effects pretty much the  most of the human race.

Capital resolves its crisis by in  by exporting industry to places where it can get extreme cheap labor and selling its goods to the “rich countries” (offshoring). This has the positive effect for capital of weakening trade unions which produces what Marxist economists call “wage repression,” which we have had for the last thirty years in the U.S. and internationally, in that capital while has concentrated and its assets and productive capacity have grown very substantially, wages have stagnated and in relative terms significantly declined.

So what has capital done? In the U.S. specifically it has lent hundreds of millions of people money at high interest the many to live on, creating in the U.S. especially but in other  rich countries too an enormous consumer debt crisis. It has also imported at relatively cheap process, consumer goods produced off-shore. This has postponed  breakdown, but in terms of  real incomes, purchasing power, and most of all employment, it has only deepened the overall crisis.

Engels writing  about the housing crisis in the 19th century, wrote that capitalism doesn’t solve the housing crisis but “moves it around,” meaning it abandons areas, creates slums, creates new boom areas, which then often go bust, Marxists have made the valuable point that this is what contemporary capitalism is doing with the “financial crisis,” it seeking  to leave weak countries holding the bag, countries like Greece, Spain, in Europe, Mexico in Latin America, where we have seen massive worker protests to the policies that intensify wage repression in  ways that are more draconian in content but essentially the same as the policies that workers face in the U.S. today.

We as Marxists and Communists  see all capitalist solutions to their crisis as attempts to make the working class pay for their debts drawn from  their new technologies, their mergers, their speculation. And we have a mountain of evidence to support that, which any reasonable person not blinded by capitalist propaganda can understand.

Capitalists are constantly innovating to protect and increase their profit margins, constantly giving and taking away;; although  these  innovations can bring about technological breakthroughs, and  in pre industrial societies  may even be the short run be a progressive force, but  in the U.S. and globally, thanks to modern imperialism they have become a parasitic force.

Here Lenin’s theory of imperialism is of particular value:

Finance capital, which is the merging of industry and banking and the selling of all productive property in stock markets, means that  banks and brokerage houses are in the drivers seat; that mergers, restricted and unregulated hedge funds, so called derivatives, a new  capitalist stock market development, means that profits derive from speculation which deepens debt, which deepens. Lenin saw this as an expression of capitalism’s decay, economically and politically. It would lead to big wars and revolutions, as capital sought to export itself and its crisis through the world. If Lenin were alive today, I think he would probably like left writer Naomi Klein’s use of the term “casino capitalism” to explain what is going on, that is, a world where speculation has not only been driving to new heights but has become both the engine of the system  as against productive investment even in capitalist terms.

What are Marxist solutions to the crisis. First we must educate and organize to end wage repression.

As real wages rise sharply they and only they can create the purchasing power that can stabilize an economy and stimulate growth in jobs and productive capacity.

Shoring up finance capital as the Bush and Obama administrations have done in the U.S. and various governments and the IMF and World Bank have done through the world,  may have been necessary to prevent a general collapse , but in the U.S. and everywhere else it was and is being done to save finance capital without any serious restrictions on finance capital and it has failed  to deal with the inter-related the employment wage and income questions seriously and/or effectively.

Capital has for thirty years in effect restructured wealth/assets away from the working class, assets which in this country led apologists for capitalism to talk about the miracle of production and the creation of a mass “middle class” society, to itself. Now capital everywhere is seeking to deal with the crisis by taking more wealth away from the working class in terms of wages, social benefits and protections, access to education and social services.

Marxists and Communists must fight for the return of those assets, not their reduction or even the maintenance of a bad status quo  How can this be done?

First, we must educate and organize for a  a national jobs program on the WPA model except bigger and more efficient to cut unemployment at  a bare minimum in half (to below 5 percent in the short run) and revive full employment which capitalist propaganda has buried, as a concept.

Second, the repeal of Taft-Hartley and all anti-labor laws which would enable the trade union movement to end the wage repression that anti-labor Republican governments carried out and Democratic governments did little to reverse.

Third, national public sector programs in education, housing, energy, transportation and a serious one in health care, which would serve as the basis for a revitalized public sector.

Fourth serious reregulation of banking and wall street (along with environmental reregulation) and the updating of regulation to deal with new developments like derivatives and hedge funds. In this regard, we should demand immediate repeal of Gramm-Leach, which ended the separation of commercial and investment banking established by the National Banking Act of 1935 and which led directly to the housing market financial crisis of 2008. Whatever one  can say about the achievements and failings of the Obama administration, it is really an outrage in my opinion that the  Democratic Congress and the administration did not push for this and this immediately when they came to power in 2009.

In conclusion, we must  educate and organize t to infuse aspects of socialism into the capitalist system, not to save it but to save  and empower the working class. We must  educate and organize for programs that  take away large parts of the assets and wealth of capital as they have successfully taken away so much over the last thirty years directly from the working class.

We must fight to bury for the foreseeable future the capitalist policies which destroy all forms of workers social protections in the name of free markets and create a larger and larger reserve army of labor globally while they play a global shell game and, quoting Engels once more on the housing question, don’t solve any crisis but move it around.

Discussion

The discussion was very valuable. One comrade mentioned specifically the immediate need to bring back the Employee Free Choice Act, which the Democrats supported but did not enact. The need to create public options in health care and in other areas of the economy, including energy, banking, which would be parallel to and in effect compete with corporate capitalism in the peoples interest was supported. Another comrade mentioned the central role of taxation and the need to explain to the working class how the tax policies of the last thirty years at all levels have led directly to the financial crisis and have at the same time tied the hands of public institutions to  fight the crisis. Finding ways to explain to working people what the deficits really are about, how detaxation along with military spending and other corporate subsidies, not social spending and subsidies to be the working people, have brought about the debt crisis.  Another comrade agreed with all of this but expressed real worry about the fragmenting of the coalition that had elected Obama and also, while seeing it as essential to find ways to both move the administration to the left and support it, given the danger from the right Republicans, was frightened that  the deepening crisis and the Obama administration’s lack so far of an effective response will make a breakdown possible.

Finally, one comrade looked to the struggles in Greece, Spain, and to a lesser extent France as examples of what workers were doing and what we should be organizing and educating working people here to see. He also made an interesting point about how these struggles receive no coverage in U.S. “mainstream media” while demonstrations in the Near East are hailed or feared as part of a great new revolution.

The discussion ended there. It was a really fine educational – the sort of discussion progressive people should be engaging in the U.S. and internationally.