acnnews 2A Significant Meeting, Reflections by Comrade Fidel
After the end of the conference on Globalization and Developmentattended in Havana by more than 1500 economists, prominent scientificpersonalities and representatives of international agencies, I receiveda letter and a document from Atilio Boron, a PhD in Political Sciences,Professor of Political and Social Theory, Director of the Latin AmericanDistance Education Program in Social Sciences, along with otherimportant scientific and political responsibilities.
Atilio, who is a steadfast and loyal friend, had taken part in the CubanTelevision Round Table program on Thursday the 6th with otherinternational experts who had attended the Conference on Globalizationand Development.
I knew that he would be leaving on Sunday and so I decided to invite himto meet with me at 5:00 p.m. the previous day, Saturday, March 7th.
I had decided to write a reflection about the ideas contained in hisdocument. I will use his words in a summarized version:
“…We find ourselves before a general capitalist crisis, the first oneof a magnitude comparable to the one of 1929 and the so-called 'LongDepression' of 1873-1896. A comprehensive crisis with civilization andmultidimensional characteristics, whose duration, depth and geographicalscope will surely be more widespread than the preceding ones.
“We are dealing with a crisis that transcends the financial or bankingrealm and affects the real economy in every area. It affects the globaleconomy and goes much further than the United States borders.
“Its structural causes: it is a crisis of both super-production andunder-consumption. Not by chance did it explode in the United Statesbecause this country has been artificially living for the past thirtyyears on external savings and external credit, and these two things arenot infinite: the corporations indebted far beyond their possibilities;The state also indebted above its possibilities while facing up not onebut two wars, not just without increasing taxes but cutting them.Meanwhile, the people are systematically encouraged by commercialadvertising to go into debt to maintain exorbitant, irrational andwasteful levels of consumerism.
“But we must add other causes to these structural ones: the acceleratedfinancing of the economy and the irresistible tendency to enterspeculative operations that are more and more risk-laden. Discoveringthe capital’s ‘Fountain of Youth’ thanks to which money generates moremoney without the value contributed by the exploitation of the laborforce and, bearing in mind that enormous masses of fictitious capitalcan be amassed in a matter of days, or weeks at the most, the addictionto capital leads it to put aside any calculation or scruples.
“Other circumstances favored the outbreak of the crisis. Theneoliberal policies of deregulation and liberalization made it possiblefor the most powerful actors milling about in the markets to impose thelaw of the jungle.
“A huge destruction of capitals on a world scale characterized it asa 'creative destruction'. On Wall Street, this ‘creative destruction’saw to an almost 50% devaluation of the corporations trading in thatmarket; a corporation that had earlier been trading with a capital of100 million, now only had 50 million! A plunge in production, prices,salaries and purchasing power… ‘The financial system as a whole is onthe point of explosion. We already have more than 500 billion in banklosses, and there is a billion more to come. More than a dozen banksare bankrupt and hundreds more are waiting to succumb to the same fate. By now, more than a billion dollars have been transferred from the FEDto the banking cartel, but a billion and a half will be needed tomaintain the cash-flow of the banks in the years to come’. What we areliving through is the initial phase of a long depression, and the wordrecession, so much used nowadays, does not capture in all its drama whatthe future holds in store for capitalism.
“Citicorp ordinary shares have lost 90% of their value in 2008. In thelast week of February, it was being traded on Wall Street for $ 1.95 pershare!
“This is not a neutral process since it favors the largest and bestorganized oligarchic-monopolies which will oust their rivals from themarkets. The 'Darwinian survival of the fittest’ will sweep the roadclear for new corporation merging and alliances, hurtling the weakestinto bankruptcy.
“Accelerated increase of unemployment. The number of unemployed in theworld (some 190 million in 2008) could increase by 51 million in thecourse of 2009. The poor workers (who earn a bare two euros per day)shall number 1.4 billion, in other words 45% of the economically activepopulation on the planet. In the United States, the recession hasalready wiped out 3.6 million jobs, half of them in the last threemonths. In the EU, the number of unemployed totals 17.5 million, 1.6million more than a year ago. For 2009, the loss of 3.5 million jobs isforecast. Several Central American states such as Mexico and Peru, dueto their close links with the U.S. economy, shall be severely hit by thecrisis.
“A crisis affecting all sectors of the economy: banks, industries,insurance, construction, etc. and which will spread through the entireworkings of the international capitalist system.
“Decisions taken in the world centers and affecting the subsidiaries inthe periphery generating massive layoffs, interruptions in the salarychains, decreased demand for consumables, etc. The U.S. has decided tosupport the Big Three of Detroit (Chrysler-Ford-General Motors), butonly to save the plants in the country. France and Sweden haveannounced that they will be providing assistance for their autoindustries: only the centers located in their respective countries willbenefit from this. French Minister of Economy Christine Lagarde hasstated that protectionism could be 'a necessary evil in times ofcrisis'. Miguel Sebastián, the Spanish Minister of Industry, urges 'theconsumption of Spanish products'. Barack Obama, we add, promotes 'BuyAmerican!'
“Other sources that spread the crisis in the periphery are the decreasein prices of the commodities that the Latin American and Caribbeancountries export, with the recessive repercussions and the increasedunemployment.
“Drastic decreases in the remittances sent by Latin American andCaribbean emigrants in the developed countries. (In some cases, theremittances are the most important item in the international currencyincome, above exports).
“The return home of the emigrants with further depression of the jobmarket.
“A profound energy crisis that demands replacing the current energybased on the irrational and predatory use of fossil fuels.
“This crisis coincides with a growing awareness of the catastrophicscope of climatic change.
“Add to it the food crisis, heightened by capitalism’s plans tomaintain an irrational consumer pattern that has led to turning landsuitable for producing foods into land destined to grow agro-fuels.
“Obama recognized that we have not reached bottom yet, and MichaelKlare wrote a few days ago the ‘if the current economic disaster becomeswhat President Obama has called the ‘Lost Decade’, the results could bea global panorama full of upheavals caused by the economy.’
“In 1929, unemployment in the U.S. reached 25% while the prices foragricultural products and raw materials kept falling. Ten years later,and despite the radical policies implemented by Franklin D. Roosevelt(The New Deal), unemployment continued being very high (17%) and theeconomy was not successfully coming out of the depression. Only WorldWar II put an end to that phase. And now, why should this one be anyshorter? If the Depression of 1873-1896 lasted 23 tears, as I haveexplained!
“Given these precedents, why should we now be able to come out oftoday’s crisis in a matter of months as some of the Wall Streetpublicists and gurus are predicting?
“We are not coming out of this crisis with just a couple of G-20 or G-7meetings. If there is any proof of its radical inability to solve thecrisis, it is the response of the main stock markets in the world afterthe announcement or sanctioning of a law approving a new bailout: theinvariable response of ‘the markets’ is negative.
“According to George Soros ‘the real economy will suffer from thesecondary effects which are now gaining in strength. Since in thesecircumstances the American consumer can no longer serve as the motordriving the world economy, the U.S. government must stimulate thedemand. Given the fact that we are facing the threatening challenges ofthe warming of the planet and energy dependence, the next governmentought to direct any plan to stimulate the saving of energy, to developalternative energy sources and building ecological infrastructures.
“A long period of wheeling and dealing is beginning to define what willbe the way out of the crisis, who will be the beneficiaries and whoshould be paying its cost.
“The Bretton Woods agreements, conceived within the framework of theKeynesian phase of capitalism, coincided with the stabilization of a newmodel for bourgeois hegemony that, due to the consequences of the warand the anti-Fascist struggle, had as its new and unexpected backdropthe strengthening of the influence of the workers’ unions, the left-wingparties and the state regulatory and interventionist capability.
“The USSR no longer exists; its mere presence and the menace ofextending its example towards the West tipped the negotiations scale infavor of the left, popular sectors, unions, etc.
“At the present time, China occupies an incomparably more importantplace in world economy, but it does not have a similar importance inworld politics. The USSR, by contrast, in spite of its economicweakness, was a formidable military and political power. China is aneconomic power, but has a light military and political presence in worldaffairs, although it is undertaking a very cautious and gradual processto reassert itself on the world political stage.
“China could play a very positive role in the re-composition strategyof the countries of the periphery. Beijing is gradually reorienting itsenormous national energies towards the domestic market. For a number ofreasons it would be impossible to discuss here, China needs the countryto grow an 8% annually either as a response to the world marketincentives or to those originating in its immense and only partiallytapped domestic market. If such a shift were confirmed it would bepossible to predict that China will still require many productsoriginally coming from the Third World countries like oil, nickel,copper, aluminum, steel, soy and other food and raw material.
“During the Great Depression of the 1930’s, in comparison, the USSR hada very weak participation in the world markets. China is different: itcould continue playing a very important role and, like Russia and India(these, however, to a lesser degree) buy the raw materials and food itneeds abroad, in contrast to what happened with the USSR during theGreat Depression.
“In the 1930’s, the ‘solution’ to the crisis was found in protectionismand the world war. Today, protectionism will encounter many obstaclesdue to the interpenetration of the great national oligarchic-monopoliesin the different spaces of world capitalism. The making up of a worldbourgeoisie, entrenched in gigantic corporations that, despite theirnational base, operate in a plethora of countries, make theprotectionist option in the developed world rather ineffective inNorth/North commerce and the policies will tend to respect theparameters established by the WTO, at least for now albeit with sometension. The protectionist option appears much more probable when it isapplied, as it surely will be, against the global South. A world warpushed forward by the developed world’s ‘national bourgeoisies’ willingto fight among themselves for market supremacy is practically impossiblebecause these ‘bourgeoisies’ have been displaced by the rise andstrengthening of an imperial bourgeoisie that regularly meets at Davosand for which the option of military confrontation constitutes aphenomenal nonsense. This is not to say that that world bourgeoisiedoes not support, --as it has done so far with the U.S. militaryadventures in Iraq and Afghanistan-- numerous military operations on theperiphery of the system, necessary for the preservation of the returnsof the U.S. industrial-military complex and, indirectly, for the greatoligarchic-monopolies of the rest of the countries.
“The current situation is not like the one in the thirties. Lenin: ‘capitalism will not collapse unless there is a social force tomake it collapse'. That social force is not present today in themetropolitan capitalist societies, including that of the United States.
“The U.S.A., the U.K., Germany, France and Japan used to settle in themilitary terrain their feud over imperial hegemony.
“Today, hegemony and domination are clearly in the hands of the U.S.A.,the only guarantor of the capitalist system on a world scale. If theU.S.A. were to fall, there would be a domino effect that would cause thedownfall of almost all the metropolitan capitalisms, not to mention theconsequences on the periphery of the system. In the case thatWashington sees itself threatened by a popular uprising, everyone willcome to its assistance, because it is the last bulwark of the system andthe only one which, in case of need, can come to the rescue of all therest.
“The U.S.A. is an irreplaceable actor and the indisputable center ofthe world imperialist system: this country alone has at its disposalmore than 700 military missions and bases in some 120 countries thatconstitute the final reserve for the system. If the other optionsshould fail, the force will appear in its entire splendor. Only theU.S.A. can deploy its troops and war arsenal to maintain order on aplanetary scale. As Samuel Huntington would say, it is the ‘lonesheriff’.
“This ‘underpinning’ for the imperialist center has the invaluablecollaboration of all the other imperial partners or that of itscompetitors in the economic arena and even most of Third World countrieswhich accumulate their reserves in American dollars. Neither China,Japan, Korea nor Russia --just to mention the greatest holders ofdollars on the planet-- can liquidate their stock in that currencybecause it would be a suicidal move. Of course, this also is aconsideration that must be taken cautiously.
“The behavior of the markets and investors all over the worldstrengthens the U.S. position: the crisis deepens, the rescues prove tobe insufficient, Dow Jones of Wall Street falls below the psychologicalbarrier of 7,000 points –falling under the level of 1997!– and in spiteof this, people still seek refuge in the dollar and the rates for theeuro and gold are descending!
“Zbigniew Brzezinski has declared: ‘I am concerned because we are goingto have millions and millions of unemployed, many people having a reallyvery hard time. And that situation will be around for some time beforethings eventually get better’.
“We are in the presence of a crisis that is much more than an economicor financial crisis.
“We are dealing with a comprehensive crisis of a civilization modelthat is economically unsustainable; politically, without appealing evermore to violence against the peoples; also ecologically unsustainablegiven the destruction of the environment, irreversible in some cases;and socially unsustainable because it degrades the human condition tounimaginable limits and destroys the very fabric of social life.
“The response to this crisis, therefore, cannot be only economic orfinancial. The dominant classes will do exactly that: use the vastarsenal of public resources to socialize the losses and rescue the greatoligarchic-monopolies. Locked away in the defense of their mostimmediate interests, they lack even the vision to conceive of a morecomprehensive strategy.
“The crisis has not touched bottom”, he says. “We find ourselvesbefore a general capitalist crisis. There was never one any greater. The one taking place between 1873 and 1896 lasted 23 years and wascalled the Long Depression. The other very serious one was that of1929. It also lasted no less than 20 years. The current crisis iscomprehensive, and has civilization and multidimensionalcharacteristics.”
Immediately, he adds: “It is a crisis that transcends the financial orthe banking realm and affects the real economy in all its areas.”
f someone were to take this summary and carry it in his pocket, readingit from time to time or memorizing it like a small Bible, he will bebetter informed about what is happening in the world than 99% of thepopulation that lives besieged by hundreds of advertisements and issaturated by thousands of hours of news, soap-operas and fiction or realmovies.
Fidel Castro Ruz
March 8, 2009.