[News] Fidel: The Global Financial Crisis
Anti-Imperialist News
news at freedomarchives.org
Wed Mar 11 17:08:54 EDT 2009
GRANMA INTERNATIONAL
Havana. March 9, 2009
<http://www.granma.cu/ingles/2009/march/lun9/reflexiones4.html>http://www.granma.
cu/ingles/ 2009/march/ lun9/reflexiones 4..html
Reflections of Fidel
A meeting that was worth it
AT the end of the Globalization and Development
event, with the presences of more than 1,500
economists, outstanding scientific figures and
representatives of international organizations
meeting in Havana, I received a letter and a
document from Atilio Boron, a Doctor of Political
Science, senior professor of political and social
theory, director of the Latin American Program
for correspondence courses in the social sciences
PLED, as well as other important scientific and political responsibilities.
Atilio, a firm and loyal friend, had participated
on Thursday the 6th in the "Roundtable" Cuban
television program together with other eminent
international figures who attended the Conference
on Globalization and Development.
I found out that he was leaving on Sunday and
decided to invite him to a meeting at 5 p.m. the day before, Saturday, March 7.
I had decided to write a reflection on the ideas
contained in his document. I will use his words in the summary.
"
We find ourselves facing a general capitalist
crisis, the first of any magnitude comparable
with the one that broke out in 1929 and the
so-called `Long Depression' of 1873-1896. A
crisis that is integral, of civilization and
multifaceted, whose duration, profundity and
geographical reach will surely be of a greater
scope that the ones that preceded it.
"It is a crisis that goes far beyond financial
and banking aspects and is affecting the real
economy in every department. It is affecting the
global economy, and goes far beyond the borders of the United States.
"Its structural causes: it is a crisis of
overproduction and at the same time of
under-consumption. It is no coincidence that it
broke out in the United States, because this
country has been living for more than 30 years
from external savings, from external credit and
these two things are not infinite: companies got
into debt over their heads; the state also got
into debt over its head in order to deal with not
one but two wars, and not just without increasing
taxes, but cutting them. Its citizens are
systematically pushed, by way of commercial
publicity, into getting into debt in order to
sustain exorbitant, irrational and wasteful consumerism.
"But in addition to these structural causes
others should be added: the accelerated
financialization of the economy, the irresistible
tendency to foray into increasingly risky
speculation operations. With the discovery of
capital's "fountain of youth," thanks to which
money generates more money based on the value
given to the exploitation of the workforce, and
taking into account that enormous masses of
fictitious capital can be achieved in a matter of
days or weeks, at the most capital's
addiction is leading it to set aside any c alculations or any scruples.
"Other circumstances favored the outbreak of the
crisis. Neoliberal deregulation and
liberalization policies made it possible for the
most powerful actors roaming the markets to impose the law of the jungle.
"Enormous destruction of capital on a world
scale, characterizing it as a `creative
destruction. ' On Wall Street, this `creative
destruction' meant the devaluation of companies
listed on that market to reach almost 50%; a
company that was previously worth $100 million in
capital on the market now has $50 million. A fall
in production, prices, wages, purchasing power.
`The financial system as a whole is about to
explode. We already have more than $500 billion
in banking losses, a billion more is to come.
More than a dozen banks have gone bankrupt and
hundreds more are expecting the same fate. At
this point, more than $1 billion has been
transferred from the FED to the banking cartel,
but $1.5 billion more will be needed to maintain
the liquidity of banks in coming years.' What we
are seeing is the initial phase of a long
depression and the word recession, so much
utilized recently, does not capture what the
future holds for capitalism in all its dramatic dimension.
"Ordinary Citicorp stock lost 90% of its value in
2008. The last week in February, it was worth $1.95 per share on Wall Street!
"This process is not neutral, because it will
benefit the largest and best-organized
oligopolies, which will oust their rivals from
the markets. The `Darwin ian selection of the
fittest' will clear the way for new mergers and
business alliances, sending the weakest into ruin.
"Accelerated increase in unemployment. The number
of unemployed in the world (some 190 million in
2008) could rise by another 51 million throughout
2009. Poor workers (who earn just two euros
daily) will number 1.4 billion; that is, 45% of
the economically active population on the planet.
In the United States, the recession has already
destroyed 3.6 million jobs, half of them in the
last three months. In the EU, the number of
unemployed stands at 17.5 million, 1.6 million
more than one year ago. By 2009, it is projected
that 3.5 million jobs will have been lost.
Because of their close ties with the U.S.
economy, several Central American states such as
Mexico and Peru, will be hard hit by the crisis.
"A crisis that affects every sector in the
economy: banking, industry, insurance,
construction, etc. and that is spreading
throughout the international capitalist system as a whole.
"Decisions that are taken in world centers and
which affect the subsidiaries of the periphery,
generating massive layoffs, interruptions in the
chain of pay, a fall in demand for supplies, etc.
The United States has decided to support the Big
Three (Chrysler, Ford, General Motors) of
Detroit, but only to save their plants within the
country. France and Sweden have announced that
they will condition aid to their automotive
industries: only the centers located in their
respective countries will be able to benefit. The
French minister of the economy, Christine
Lagarde, stated that protectionism could be `a
necessary evil in times of crisis.' The Spanish
minister of industry, Miguel Sebastián, is urging
`Buy Spanish products.' Barack Obama, we would
add, is promoting `Buy American!'
"Other sources of the propagation of the crisis
in the periphery include the fall in prices for
commodities exported by Latin American and
Caribbean countries, with their recessive consequences and higher unemployment.
"A drastic diminishment in remittances from Latin
American and Caribbean emigrants in the developed
countries. (In some cases, remittances are the
most important item in international hard
currency income, over and above exports.)
"The return of emigrants, depressing the labor market even more.
"This is combined with a profound energy crisis
that requires the replacement of the current one,
based on the irrational and predatory use of fossil fuel.
"This crisis coincides with growing awareness of
the catastrophic scope of climate change.
"Add the food crisis, sharpened by capitalism's
attempts to maintain an irrational pattern of
consumption, which has led to taking land
suitable for producing food and allocating it for producing agro-fuels.
"Obama admitted that we have not yet touched
bottom, and Michael Klare wrote recently that `if
the current economic disaster turns into what
President Obama has called the lost decade, the
result could be a global landscape full of convulsion caused by the economy.'
"In 1929, unemployment in the United States
reached 25%, as agricultural and raw material
prices fell. Ten years later, and despite radical
policies implemented by Franklin D. Roosevelt
(the New Deal), unemployment remained very high
(17%) and the economy could not climb out of the
depression. Only World War II put an end to that
stage. And now, why should it be shorter? When
the 1873-1896 depression, as I explained, lasted 23 years!
"Given this background, why would we now come out
of the current crisis in a matter of months, as
some Wall Street publicists and `gurus' predict?
"We will not come out of this crisis with a
couple of G-20 or G-7 meetings. If there is any
test of their radical incapacity to solve the
crisis, it is the response of the world's stock
markets after each announcement or each law
passed for a new bailout: invariably, the
response of `the markets' is negative.
"As George Soros attests, `the real economy will
suffer the secondary effects, which are now
gaining force. Given that in these circumstances
the U.S. consumer can no longer serve as the
driving force of the world economy, the U.S.
government should stimulate demand. Given that we
are facing the threatening challenges of global
warming and energy dependence the next government
should direct any stimulus plan toward energy
savings, by developing alternative energy sources
and building environmentally- friendly infrastructure.
"A long period of tug-of-war and negotiations is
opening up to define how to get out of the
crisis, who will benefit and who will pay the price.
"The Bretton Woods Agreements, which originated
in the framework of a Keynesian stage of
capitalism, coincided with the stabilization of a
new model of bourgeois hegemony, which, as a
product of the outcome of the war and
anti-fascist struggle, has as a new and
unexpected backdrop the strengthening of the
gravitation of trade unions, leftist parties and
states' regulating or intervening abilities.
"The USSR is gone; its sole presence and the
threat that its example could spread westward
tipped the balance of negotiations in favor of
the left, popular sectors, trade unions, etc.
"Currently, China holds an incomparably more
important role in the world economy, but without
reaching a parallel importance in world politics.
The USSR, in contrast, despite its economic
weakness, was a formidable military and political
power. China is an economic power, but with
little military or political presence in world
affairs, although it is beginning a very cautious
and gradual process of reaffirmation in world politics.
"China may come to play a positive role for the
re-composition strategy of countries on the
periphery. Beijing is gradually reorienting its
enormous national energies toward its internal
market. For many reasons that would be impossible
to discuss here, it is a country that needs its
economy to grow at an annual rate of 8%, whether
as a response to the stimulus of world markets or
to those that originate in its immense only
partially exploited internal market. If that
turn were to be confirmed, it is possible to
predict that China will continue to need many
products from Third World countries, such as oil,
nickel, copper, aluminum, steel, soy and other raw materials and foods.
"In the Great Depression of the 1930s, in
contrast, the USSR had a very weak insertion in
world markets. China is different: it could
continue to play a very important role, and like
Russian and India (although these to a lesser
extent), to buy the raw materials and foods that
it needs, as opposed to the case of the USSR in
the times of the Great Depression.
In the 1930s, the `solution to the crisis was
found in protectionism and world war. Today,
protectionism will come up against many obstacles
due to the inter-penetration of the great
national oligopolies in different spheres of
world capitalism. The formation of a global
bourgeoisie, rooted in gigantic companies that,
despite their national base, operate in a
countless number of countries, causes the
protectionist option in the developed world to
have scant effectiveness in North-North commerce,
and policies will tend at least for now and not
without tensions to respect the parameters
established by the WTO. The protectionist card
appears to be much more probable when it is
applied, as it surely will be, against the global
South. A world war driven by `national
bourgeoisies' of the developed world ready to
fight amongst them selves for market supremacy is
virtually impossible, because such `bourgeoisies'
have been displaced by the rise and consolidation
of an imperial bourgeoisie that periodically
meets in Davos, and for which the option of
military confrontation is a phenomenally stupid
thing to do. That does not mean that that global
bourgeoisie does not support, as it has to date
with the military adventures of the United States
in Iraq and Afghanistan, the realization of
numerous military operations in the system's
periphery, necessary for the preservation of the
profitability of the U.S. military-industrial
complex and, indirectly, for the great oligopolies of other countries.
"The current situation is not the same as the one in the 1930s. Lenin (said):
`Capitalism does not fall without a social force
that makes it fall.' That social force today is
not present in the societies of metropolitan
capitalism, including the United States.
"The USA, UK, Germany, France and Japan settled
their struggle for imperial hegemony on the military field.
"Today, hegemony and domination are clearly in
the hands of the USA. It is the only guarantee of
the capitalist system on a world scale. If the
USA fell, it would produce a domino effect that
would cause the collapse of almost all
metropolitan forms of capitalism, let alone the
consequences in the system's periphery. If
Washington were to see itself threatened by a
popular insurgency, they would all rush to its
rescue, because it is the last bastion of the
system and th e only one that, in case of necessity, can help the others.
"The United States is an irreplaceable actor and
unquestionably the center of the world
imperialist system: only it has more than 700
military missions and bases in some 120
countries, which constitute the system's final
reserve. If all other options fail, force will
appear in all its splendor. Only the United
States can deploy its troops and its war arsenal
to maintain order on a planetary scale. It is, as
Samuel Huntington said, `the solitary sheriff.'
"This `shoring-up' of the imperialist center has
the invaluable collaboration of its other
imperial partners, or its competitors in the
economic realm and even the majority of Third
World countries, which accumulate their reserves
in U.S. dollars. Neither China, Japan, Korea or
Russia to mention the largest holders of
dollars in the world can liquidate their stock
in that currency because it would be a suicidal
move. Of course, this is also a consideration
that should be made with much caution.
"The conduct of the markets and savings-holders
throughout the world is strengthening the U.S.
position: the crisis is deepening; the bailouts
are demonstrating their insufficiency; the Dow
Jones on Wall Street is falling below the
psychological barrier of 7,000 points falling
below the mark it fell to in 1997! and despite
that, people are seeking refuge in the dollar,
with the value of the euro and gold falling!
"Zbigniew Brzezinski has said, `I a m worried
because we are going to have millions and
millions of unemployed, many people really having
a difficult time. And that situation will be
present for some time before things eventually improve.'
"We are in the presence of a crisis that is much
more than an economic or financial crisis.
"It is an overall crisis of a model of
civilization that is economically unsustainable;
politically unsustainable, without appealing
increasingly more to violence against the
peoples; environmentally unsustainable, too,
given the destruction, in almost all cases
irreversible, of the environment; and socially
unsustainable, because it degrades the human
condition to unimaginable limits, and destroys the very fabric of social life.
"The answer to this crisis, therefore, cannot
just be economic or financial. The ruling classes
will do exactly that: use a vast arsenal of
public resources to socialize the losses and set
the great oligopolies afloat again. Occupied with
defending their most immediate interests, they
lack even the vision to conceive of a more comprehensive strategy.
The crisis has not touched bottom," he says. "We
find ourselves facing a general capitalist
crisis. There has not been a larger one. The one
that took place between 1873 and 1896 lasted 23
years; it was called the Long Depression. The
other, more serious one was the one of 1929. It
also lasted no less than 20 years. The current
crisis is all-embracing, of civilization, multifaceted. "
He immediately adds, "It is a crisis that goes
far beyond the financial and banking aspects and
is affecting the real economy in every department.."
If anyone were to take this summary and carry it
in his or her pocket, read it over once in a
while or learn it by heart like a small Bible, he
or she will be better informed about what is
happening in the world than 99% of the
population, where citizens live under siege from
commercials and saturated with thousands of hours
of news, and real or false soap operas or fiction films.
Fidel Castro
March 8, 2009
11:16 a.m.
Translated by Granma International
Freedom Archives
522 Valencia Street
San Francisco, CA 94110
415 863-9977
www.Freedomarchives.org
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