The Crisis and the Capitalist System Today

Abstract

Capitalist crises are specific to the epoch in which we live. Today there is a huge surplus of capital unable to find investment outlets leading to asset inflation and the various bubbles. The downturn itself reduces that surplus, both in monetary and physical terms providing the basis for an upturn. However, the underlying basis for the surplus of capital remains. That reflects the contemporary ruling class strategy of turning to finance capital. However, that too is in crisis and is in process of being controlled and curtailed. A new strategy is needed because capitalism-as-a-system is in crisis, but none is available. Governments and big business/the capitalist class can control the level of investment to a considerable degree, in part through nationalisations and through monopoly control, over firms, and they are not prepared to reflate to the point of full employment. Their initial reaction has been pragmatic assuming that muddling through will work. However, that has been succeeded by demands for massive reductions in the public sector and a squeeze on the standard of living. If successful, which is highly unlikely, it will amount to a period of extreme reaction, and popular defeat, lasting a generation. If it is unsuccessful, it will train a generation in the art of militant and political opposition, threatening the system itself. Crises today do not operate automatically but are closely integrated with politics.