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The contagion of revolt

Protests by students and teachers throughout Europe are mounting as governments try to offset savage reductions in education budgets with increased fees in the losing race to prevent state bankruptcy.

Students marched throughout Britain as well as in Italian cities yesterday in protest against attacks on education, blocking roads and railway lines in some of the biggest demonstrations seen in decades.

Hopes that the feverish activity resulting in an €85bn loan package for Ireland would inhibit the debt contagion spreading throughout Europe and the rest of the world were dashed as global investors immediately sent the rates soaring for lending to Portugal, Italy and Spain as well as Ireland and Greece.

"The crisis is intensifying and worsening," said Nick Matthews, a credit expert at the Royal Bank of Scotland. "Bond [government debt] purchases by the European Central Bank are the only anti-contagion weapon left. It needs to act much more aggressively."

Agreement on a European Stability Mechanism (ESM) to be launched in mid-2013 will be far too late to prevent a string of state bankruptcies. The loan package for Ireland itself postpones the intention of the ESM to force banks and hedge funds to take losses if a country runs out of money. The UK’s contribution to the Irish package is an attempt to ease the strains on the interdependence of the failed Irish economy and UK-based banks.

The ESM, if it comes into force, will not only test the power of the Eurozone governments against the global banks and non-banks, but will require a long process to arrive at unanimous agreement among Eurozone countries that a country is insolvent and qualifies for help.

As the crisis continued to spread, French Minister for the economy, Christine Lagarde says that each European country is facing very different conditions and each should be treated on a case by case basis. Whilst it is true that the levels of indebtedness vary, the development of the global economy means that debt is universal and the fate of each country is entangled with the fate of the whole world system, not just that of the Eurozone or even the whole of Europe.

In the US, the fallout from the mortgage defaults that triggered the global meltdown in 2008 is continuing despite the launch of a second round of quantitative easing or printing of money. US house prices fell for the third month running in September and at a quicker-than-expected rate.

The end of the government’s tax incentive for first-time homebuyers joined persistent unemployment, high rates of foreclosure and an excess of vacant homes. Home prices have plunged by 28.6 per cent since peaking in June 2006.

As every desperate economic measure stokes up social unrest, the time has come for a new kind of politics. Iceland was the first country to be driven into bankruptcy by the global financial meltdown of 2007/8. It has just elected a 25-person Constitutional Parliament to re-write its constitution for the first time in the Republic’s history.

It is a small indication of the much bigger political changes needed to resolve the economic, social and ecological catastrophe caused by capitalist production. The December 11 event in London on creating People’s Assemblies would be a good place to start.

Gerry Gold
Economics editor
1 December 2010

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Jonathan says:

BLACK DEATH

For anyone who can ‘remember’, or ‘recall’, the Black Death, this ‘contagion’ within their system and it have certain frightening similarities. That it does not respect national boarders and it is in its own nature to be contagious being the foremost. The overproduction and nature of their debt needs burning, along with the social relations that go with it. Each time, confronted with crisis, this system historically has a sharpening of class struggles and when the rising forces didn’t seem strong enough and the ruling classes, (the crisis being international by nature since the early 19th century) having achieved a temporary victory against their own working class has headed inexorably to war. Each time the voices against war were silenced or marginalised.

There are certain major differences this time in that many of us apply ourselves and follow others applying themselves to the crisis affecting all. Having the ability to go no further than printed forms smuggled through boarders and when we organise doing so in isolated places are now broken by aspects of the very system that degenerates this Internet Link being a major one.

Thus the internet developed for scientific purposes is now being used in the greatest overall science there is, socialised humanity. Marx took the unit of Capitalism to analysis production: the Commodity: “The wealth of those societies in which the capitalist mode of production prevails, presents itself as ‘an immense accumulation of commodities’, its unit being a single commodity. Our investigation must therefore begin with the analysis of a commodity.”

Here we see in the above piece, and their excellent booklet on the crisis ‘Beyond Resistance’ the changing form and the higher phase we have entered. The pamphlet which concisely and precisely deals with another seeming ungraspable, unfolding phase of an economic system in decay at that, that unit of exchange , addresses how matters stand when nothing but an ever changing form of ‘value’ become the issue.

In the last part of Capital Chapter 1 Marx says: “A commodity appears, at first sight, a very trivial thing, and easily understood. Its analysis shows that it is, in reality, a very queer thing, abounding in metaphysical subtleties and theological niceties.” And we are trapped in the outward expression of the ‘metaphysical’ horrors of the Financial Capital Form for it has passed over from the simple money form now. Now the crisis is ‘our being’ and ‘our being as the very planet’ at that and intuitively we at least are becoming ever more aware we are sick right down to the Amazon: polluted rivers an aspect of the Banking Crisis! Rather an extreme expression of the correctness of Spinoza.

This ‘electronic money’ is distancing itself more and more from an expression of value contained in a product (or service), while that ‘form of expression of value of the product is also more metaphysical than the commodity ever was. Even as a means of exchange it becomes lost and insecure and more and more confused as a means of exchange of other representatives of the genre. Like player 24 hour-every-second-counts musical chairs the whole system frightened to stop the music.

"The crisis is intensifying and worsening," maybe the Heading on many a ‘cabinet meeting’ paper and a prelude to the tightening of the screws, the Essential Being of the state machine. The Executive Committee of every Bourgeois State will now delegate even more powers. Every intelligence committee already fully aware of the depth of the crisis will be prepped on just how to respond to what is, and what is to come, before the social forces each measure will be applied against know what has hit them and then have to organise. The ‘case by case’ basis apart there is that identity. To them this crisis has been transformed into a militarised act: printing money a failure, next chapter. Student forces conscious: Next.

Within the nature of the crisis as it appears is still the general nature of the system it ‘grows’ out of, and of which it had a genuine role. Indeed it was the crisis of overproduction that was temporarily got around through the release of so much debt. Still unresolved by the classes involved in production are aspect to do with the value of commodities, of the products of labour, that would still be there whatever scheme they think of, whether practical or not, which would then cause sharper crises. This present crisis, as the above demonstrates and the pamphlet details, shows that this crisis as it appears in Finance Capital and in ‘money’ exchange knows no national barrier. There is therefore no National Bourgeoisie which can hood-wink ‘their’ population against other Nations as aggressor nations. Attempts at scapegoating (another similarity of the Black Death) and entrenching within Nationalism being are tried here and there but are, on the whole, rejected by the World Ruling classes. The World Class based on the exploitation of those that labour (in whichever form) are, with a few exceptions, in this together as one as much as are the social forces (including those to come, and not just the aspiring student class but the unborn – and indeed the whole of nature) who are subject to this exploitation. The social form built on this historical exploitation has run its ‘use-by-date’ and is being transformed by struggle. There are no exception taking the two issues of the expression of the crisis as it is now experienced and of the underlying aspect of the Tendency of the General Rate of Profit to fall and the impoverishment of the working class. In such conditions as now prevails even to counter the former Law the impoverishment i.e. the reduction of wages to almost slave-labour levels is a must that the ruling class don’t even have a ‘tinted glasses’ view of and the only way to try and sell this is how they have approached, universally, those on Benefits, along with a little Malthusianism, for overcapacity in humans is such a worry to them: poor souls. This last, impoverishment, it seems is about to take a massive leap forward, or rather downward.

Over the Banking sector and their national expression should be the sign put over the houses of the infected during the plague.


Fiona says:

I think Christine Lagarde may have a point, not all European countries are facing similar depths of crisis, that's obvious. Globally the situation is even more inconsistant, the U.S. is in deep trouble while Canada is not for instance. Brazil's economy is growing extremely strongly and confidence is so high it has been awarded both the World Cup and the Olympics. China is still in a growth phase. Within Europe the economies of Germany, Scandinavia and the so called 'PIGS' are so incomparable they could almost be on different planets. Leaving aside the desirability of economic growth from a long term environmental point of view, not to mention the huge disparites of wealth within Brazil or China, it does seem the the current crisis has in places such as Ireland and Greece, been massively exacerbated by misrule, greed and corruption. Capitalism works in mysterious ways and its effects are less or worse depending on where you are. Actually its ways are not really all that mysterious it just seems like it, but countries which have strong regulatory or 'socialistic' measures in place are suffering less. Then again Germany has been able to retain is squeaky clean reputation for its regulatory control over its Landesbanks thanks to the much laxer control in Ireland, where some of those banks murkier dealings have actually been brokered.


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