Global capitalism imploded in 2007. The central causes of capitalism's crisis include:
- the end of real wage increases in the US and the substitution of rising worker debt far beyond what workers could sustain; - the buildup of excess global industrial capacity; - the explosion of speculation and excess risk-taking by banks, other financial and non-financial corporations, and the rich; - the systematic misrepresentation of credit risks by capitalist rating firms; - the failure of supervision and regulation by governments increasingly dependent on corporations and the rich (for campaign contributions, lobbyists' supports, etc.) over the last quarter century; - the growing indebtedness of governments; - the huge imbalances between trade and capital flows among nations (and, above all, the trade deficits of the US and the trade surpluses of the PRC)
In this list, the role of Greece is minor almost to the vanishing point. But Greek workers loom large among the proposed victims of the capitalist crisis they did not cause.
When the global capitalist crisis hit in 2007, Greece like most other countries boosted its deficit finance. It had already been running high government deficits largely based on very rosy predictions of Greece's economic prospects given its low (for Europe) wages and rising productivity in the years before 2007. So Greece has borrowed a lot (although other countries who borrowed more and for similar reasons are not -- yet -- being treated like Greece).
The problem for Greek national debt is that other, larger, richer capitalist nations -- those whose capitalists' actions were the leading causes of the global crisis -- have also vastly increased their borrowing. Lending to the latter is far safer than lending to the poorer, often more indebted countries like Greece, Portugal, etc. So lenders are requiring them to pay much higher interest rates just to meet their current debt obligations (and they probably need to borrow more, just like other countries, to avoid another nasty recessionary downturn). Lenders are also threatening to stop lending unless these poorer countries lower the ratio between their debt and their GDP (the widely used measure of the country's total output and thus its ultimate ability to pay back its debts).
To make the billions in extra interest payments and/or to lower their outstanding debt, governments in countries like Greece would have to raise taxes on their people or cut spending on their peoples' needs or both. Those steps would provide those governments with the funds to pay higher interest rates on their debt and lower the total of outstanding debt.
In simple English: the global capitalist crisis first brought an economic downturn to Greece, and now the "recovery" seeks to impose on the Greek people an indefinite period of economic suffering as global lenders provide funds to the richer, larger capitalist economies elsewhere so that they can avoid what is demanded of the Greeks. The same leaders of business and government who produced the crisis are managing the "recovery" in just this way.
Nor should we fail to mention that the Greek government and its business leaders are now forced to make a big decision too. Will they go along with the plan? Will they force the mass of Greek workers and their families to pay higher taxes, earn lower incomes, and lose government services to "service Greece's creditors"? Or will they be blocked from doing so by the Greek peoples' resistance? That's what is at stake in the mass strikes now rocking Greece.
And how might that resistance handle matters differently? In the immediate future, they might finally demand an end to the massive evasion of Greek taxes by its billionaire and millionaire elite on both their corporate and personal accounts. Let them finally pay -- according to their exalted abilities -- to service Greece's creditors. However, given their equally notorious mechanisms of tax evasion, honed over centuries, it would be better -- and sooner rather than later -- to abolish private Greek enterprises and reorganize them as worker-controlled enterprises sharing power with the government. Their joint project would then be to produce a "recovery" not just from this particular capitalist crisis but from the system that reproduces capitalist crises every few years.
Such a Greek resistance might also stimulate and inspire parallel movements in other countries whose people are likewise boiling because they bear the costs of a crisis they did not cause and a "recovery" that is not theirs. And so it should be, because the Greek resistance would need allies elsewhere to succeed and vice versa. Capitalism's global crisis is a burden for the working classes of the world, but it is also an opportunity. To suffer the former while missing a chance to grab the latter would only make this crisis yet more tragic. Rick Wolff is a Professor Emeritus at the University of Massachusetts in Amherst and also a Visiting Professor at the Graduate Program in International Affairs of the New School University in New York.Posts: 1365 | Registered: Dec 2010
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Posts: 138 | Registered: Oct 2011
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Certainly seems to be heading that way. It appears that the world is entering a new stage of global working class struggle.
I suspect that as time goes by, and as civil disobedience persists, the class struggle will take a violent turn, as it already has in various places. The working class has to anticipate that capitalism is not going to go down with a whimper; violence will be unleashed, before it is finally done away with.
When the source of privilege of the rich few is under attack, they resort to increasing brutality as a deterrent. The police and military are the immediate tools for enforcing this.
I had the opportunity to witness this in motion at a nearby "occupy wall street".
Posts: 7516 | From: Somewhere on Earth | Registered: Jan 2008
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Greece is just one of those nations feeling the collapsing economy which is now spread to all four corners of the world. It's just a matter of time before the whole world goes under
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Only those who rely heavily on the globalized capitalist network will go down under.
Posts: 7516 | From: Somewhere on Earth | Registered: Jan 2008
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...for what its worth, someone in the 'west' might expect African economies to be among the hardest hit by economic slump in capitalist nations of western Europe and north America, but here's data that seems to indicate otherwise...
Daily chart
Africa's impressive growth Jan 6th 2011, 14:10 by The Economist online
Africa is now one of the world’s fastest-growing regions
MUCH has been written about the rise of the BRICs and Asia’s impressive economic performance. But an analysis by The Economist finds that over the ten years to 2010, six of the world’s ten fastest-growing economies were in sub-Saharan Africa. On IMF forecasts Africa will grab seven of the top ten places over the next five years (our ranking excludes countries with a population of less than 10m as well as Iraq and Afghanistan, which could both rebound strongly in the years ahead). Over the past decade the simple unweighted average of countries’ growth rates was virtually identical in Africa and Asia. Over the next five years Africa is likely to take the lead. In other words, the average African economy will outpace its Asian counterpart.
-------------------- The Complete Picture of the Past tells Us what Not to Repeat Posts: 7516 | From: Somewhere on Earth | Registered: Jan 2008
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I stopped by Family Dollar a few days ago to pick up the usual household cleaning items such as Ajax, and while walking by the clothes rack noticed a burgundy (maroon) colored Henley sweater. It looked pretty decent so I picked it up not really thinking about buying it, then looked at the tag expecting to see China on the inside collar, but BOOM! It was from Botswana.
Now this was a complete shocker to me. I have never seen anything from Botswana in any store, or any African country for that matter.
But to be fair I'm not fashion conscious anymore so I may be missing the boat on this one, that is, clothing from any African counry may be commonplace in other U.S. cities.
And I've always wondered why Haiti and Jamaica haven't been elected or able to pull off this feat. Then again politics surely has everything to do with it.
I bought the sweater.
Posts: 2118 | From: midwest, USA | Registered: Aug 2007
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How poor countries are subsidizing the rich
Just a few days ago came into circulation by the publisher Zed, book Léonce Ndikumana and James K. Boyce, entitled Africa's Odious Debts: How foreign loans and capital flight bled a continent, (The onerous debts of Africa: How the foreign loans and the flight of capital bled a continent). James Boyce is a professor of economics at the University of Massachusetts Amherst and Leonce Ndikumana former professor at University and now director of research department of African Development Bank.
Here is a brief description
“Africa being a drain on the financial resources of the West, the continent is actually a net creditor to the rest of the world. The extent of capital flight from sub-Saharan Africa is remarkable: more than $700 billion in the past four decades. But Africa s foreign assets remain private and hidden, while its foreign debts are public, owed by the people of Africa through their governments. —– Léonce Ndikumana and James K. Boyce reveal the intimate links between foreign loans and capital flight. More than half of the money borrowed by African governments in recent decades departed in the same year, with a significant portion of it winding up in private accounts at the very banks that provided the loans in the first place. Meanwhile, debt-service payments continue to drain scarce resources from Africa, cutting into funds available for public health and other needs. Controversially, the authors argue that African governments should repudiate these odious debts from which their people derived no benefit, and that the international community should assist in this effort. —– A vital book for anyone interested in Africa, its future and its relationship with the West.”
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Africa's debt: who owes whom? Even though Africa has only 5 percent of the developing world's income, it carries about two thirds of the debt – over $300 billion. Because of this, the average African country spends three times more of its scarce resources on repaying debt than it does on providing basic services. In addressing Africa's struggle for relief from its onerous external debt, advocates of global justice have raised a critical question: Who owes whom?
Posts: 1365 | Registered: Dec 2010
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That's a good question. Much of the debt owed by African nations has its roots in "newly independent" states borrowing money to rebuild all that colonial regimes destroyed [which is pretty much everything] in their tracks. The wholesale destruction of African socio-economic structures by the then outgoing colonial regimes ensured that African economies were held hostage even in the physical absence of said regimes. The debts that African countries would eventually owe is in essence loans acquired to cover what the outgoing colonial regimes (soon to be creditors) themselves destroyed; these debts would serve to become the new weapons of the outgoing colonial regimes, to manipulate African states to do their geopolitical and economic bidding, as they are designed to ensure that they would never be repaid in full, and they keep African states "dependent", while eliminating competition from these states.
Posts: 7516 | From: Somewhere on Earth | Registered: Jan 2008
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Now this was a complete shocker to me. I have never seen anything from Botswana in any store, or any African country for that matter.
If you drive a Mercedes Benz C class in the U.S., then it is possible you could be driving one assembled in Africa.
If you have ever ridden a low-floor metro bus in say, London, then chances are you were riding in one built in Africa.
If you have ever traveled in an Airbus 380 double-decker, any airbus for that matter, or even a Boeing 747 or 767, then chances are you were travelling in one that had some component or another built in Africa.
There is a chance an American F-16 or one sold by the U.S. to some third party nation has had components built in Africa.
If you have seen an articulated dumb truck under the nameplate of John Deere in the past, then chances are that was an African product under the guise of badge engineering.
These are just mere examples to watch out for.
Posts: 7516 | From: Somewhere on Earth | Registered: Jan 2008
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That's interesting. I see I'm guilty of not doing homework... of any kind. Posts: 2118 | From: midwest, USA | Registered: Aug 2007
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