On the underlying causes of the current financial crisis.
The long-term repercussions of the crisis of Fordism
The particularities of the long deferral of the crisis
The current crisis of the financial market shows relatively unmistakably that this assessment was fundamentally false. And not because speculation destroys the real, sustainable economic structure (just as in the current controversy the ‘locusts’ are always blamed), but because the structure that has emerged in the last twenty-five to thirty years was never the cause of a self-supporting boom of capital accumulation. Quite the reverse: it was only viable at all because it was (and still is) continually serviced by the flows of fictitious capital. A self-supporting boom would presuppose that whenever growth were checked, more labour-power would be exploited in the production of commodities up to the required level, for this is the only way to ensure that the amount of added value can increase and the cycle ‘money – commodities – more money’ perpetually be preserved. From the perspective of demand, this would mean that at at every stage of development, enough labour-income would have to be generated to sell the commodities produced during the previous stage. Precisely this condition is absent under the conditions of the third industrial revolution. The rationalisation enabled by new information and communication technologies is ploughing up all sectors of the economy with such immense speed that more labour-power is always being rendered superfluous than can be put to use by the ensuing growth. This means that the process of valorisation not only has to cut away at the demand on which it depends in order to liquidate the produced value on the market, but also, more fundamentally, that it permanently undermines its very own foundations.5 To this extent the micro-electronic revolution in production is a sort of permanent crisis of over-accumulation: that is, it always produces an excess of capital that can no longer be valorised, which must in turn be diverted into the sphere of fictitious capital, and thus constitutes an essential contribution to the exponential growth of the financial bubble.
Crisis? What crisis?
Further deferral of the crisis…
… or global economic crisis?
translated by Josh Robinson
2 Cf. Norbert Trenkle, ‘Entsorgung nach Art des Hauses’ [‘Waste-Disposal à la maison], Streifzüge 32 (2004), online at http://www.krisis.org/2005/entsorgung-nach-art-des-hauses
3 Cf. the in part very good analyses in Elmar Altvater, Volkhard Brandes and Jochen Reiche, eds, Handbuch 4. Inflation – Akkumulation – Krise II, (Frankfurt/Main 1976).
4 A grotesque caricature of the idea that the abandoning of the gold standard was a wilful decision can be found in Jürgen Elsässer’s work: ‘In 1971 US president Richard Nixon announced the end of the gold standard for the dollar in a hush-hush operation. Since then the economic foundation of capitalism has been in gradual decay’, in Solidarität – Sozialistische Zeitung, Nr. 57 (4.5.2007).
5 From economic statistics it is well-known that much higher rates of growth in GDP are needed to create further jobs today than was the case in the 1970s. However, the statistical overview paints a rosy picture, because it adds all jobs together, without asking whether they contribute to the production of value (of course, economics disqualifies such a question from the start). For the majority of services and for the ‘production of knowledge’, this question must be answered in the negative (c.f. the article by Samol, Lohoff and Meretz in krisis 31). The growth of the service sector cannot therefore compensate for the exceptional melting-away of labour and value.
6 It should be remembered that Marx already points to this relationship in the first volume of Capital: ‘It might seem that if the value of a commodity is determined by the quantity of labour expended to produce it, it would be the more valuable the more unskilful and lazy the worker who produced it, because he would need more time to complete the article. However, the labour that forms the substance of value is equal human labour, the expenditure of identical human labour-power. The total labour-power of society, which is manifested in the values of the world of commodities, counts here one homogeneous mass of human labour-power, although composed of innumerable individual units of labour power. [...] The introduction of power-looms into England, for example, probably reduced by a half the labour required to convert a given quantity of yarn into woven fabric. In order to do this, the English hand-loom weaver in fact needed the same amount of labour-time as before; but the product of his individual hour of labour now only represented half an hour of social labour, and consequently fell to one half its former value.’ Capital, transl. Ben Fowkes, vol 1 (Harmondsworth: Penguin, 1976) p. 129.
7 C.f. Norbert Trenkle, ‘Es rettet euch kein Billiglohn’ [‘Low wages won’t save you’], in Kurz, Lohoff, Trenkle, eds, Feierabend! Elf Attacken gegen die Arbeit [Knock off! Eleven Attacks on Work] (Hamburg 1999), online at http://www.krisis.org/1999/es-rettet-euch-kein-billiglohn.
8 Elmar Altvater writes: ‘US citizens can afford a higher level of consumption, ‘the American way of life’, although they are so highly indebted. [...] However, this is only possibly because of high savings-ratios in other regions, which allow the USA and its citizens to get carried away. The financial markets must therefore function in such a way that the world’s savings are flushed into the USA.’ Elmar Altvater, Das Ende des Kapitalismus – so wie wir ihn kennen [The End of Capitalism as We Know It] (Münster 2005), p. 135.
9 Lafontaine ironically offered Josef Ackermann membership of the German Left Party because of his support for government intervention into the banking system because of the finance crisis (Netzeitung, 20.3.2008). This only shows that when it comes to the administration of the crisis, all the political parties are singing from the same hymnsheet.
10 It is thus ridiculous to condemn banks for their losses in property speculation. They have only done what everyone expects of them in a boom: invested ‘their’ money as profitably as possible. If they hadn’t, the same ‘experts’ who are now shouting ‘scandal’ because of the high losses would certinla have criticised them for ‘false excessive caution’.
11 Here, however, there is a conflict of interest between the US and the EU on the horizon, which might well accelerate the crisis-dynamic. Whereas the USA is characteristically beating down interest rates, and has issued with lightning-speed a state-run economic programme worth around $150bn, the European governments and the European Central Bank are focused on combating inflation, and are refusing to cut interest rates further. The in many ways ridiculous claim results that the crisis is basically taking place in the USA, while the European economy is stable, as if they weren’t closely interconnected. It could lead to further falls in the US dollar, at which point the USA would lose its function as consumption-motor of the world economy. The connection that the ECB and EU-governments have tried to repress would then assert itself violently.
12 On the analysis of this mechanism cf. Ernst Lohoff, ‘Out of Area – Out of Control’ Streifzüge 31 and 32 (2004), online at http://www.krisis.org/2004/out-of-area-out-of-control-1.
13 For example, large sections of the Italian anti-globalisation movement and social forums have allowed themselves to be integrated into Rifondazione Comunista and have thus been compelled at least indirectly to support the Prodi-government. This has to a great extent lost them their capacity to mobilise, and they are now standing before a political scrapheap…
14 Economists are even seriously discussing a return to the gold-standard, which would result in the complete devaluation of the dollar-debts that have built up over the last decades: ‘When nothing else works and no one wants weak dollars any more, America takes a step forward and pegs its currency to the gold-reserves in Fort Knox. The rest of the world, which has financed the US debt through the purchase of US-bonds, keeps an eye on the screen.’ Wirtschaftswoche 18.2.2008, p. 134.