The very philosophy of the acquisition of wealth of capitalism is becoming a bane to the majority world people who are seeking deeper and deeper into poverty because of the desperate resuscitation of dying capitalism by their governments. For indeed the sufferings of the vast majority of the people is the price for the continued existence of this irrational and moribund system for in-built in its very nature is greed and corruption.

BY EDBERTO M. VILLEGAS
IBON Foundation
Posted by Bulatlat

US capitalism is once again wracked by a financial crisis, brought about by intense speculative investments in subprime mortgage lending and in stocks after a similar crisis in the late 1980’s, which was likewise sparked by a plunge of real estate prices. At that earlier financial turmoil, the US government came to the rescue of bankrupt and tottering banks and other capitalist corporations through a bailout of $500 billion, passed of course in the form of new taxes to the ordinary American citizens. Now, President Bush and his economic team, composed of Secretary of the Treasury Henry Paulson and Federal Reserve Bank Chairman (the central bank of the US) Ben Bernanke, have announced a plan to release $700 billion to buy the bad debts of ailing capitalist banks and other financial institutions. This rescue program for the big corporations is expected to raise US budget deficit to $482 billion by next year, and according to some analysts possibly reaching $1 trillion annual deficit in time. Other central banks of foreign governments, England, Switzerland, Japan and the European Union, pledged an additional $220 billion to make a grand total of $1 trillion, including the announced American counterpart, in their bid to protect their capitalist corporations who have huge exposures in the US finance market.

In this so called “mother of all bailouts” to save the rich, backed by the governments of capitalist countries, particularly the US, it is the ordinary workers who will bear the brunt. Some economic analysts are optimistic that the recovery of the stock markets of capitalism the world over from this huge bailout will lead to the creation of new jobs which will spur consumer demands, increasing profitability for business once again. Meanwhile as a result of the financial meltdown, unemployment continues to rise in the US, reaching a high 6.1 percent in September 2008, the highest in the last two decades in this country. Thousands of Americans have lost their homes, with many of them living in trailers while looking for new jobs. Global unemployment has reached 190 million, not counting the 1.3 billion “working poor”, in 2007 even before this present financial crisis and this number is bound to increase. That is why the expectation that the massive bailout for sick capitalist corporations will eventually trickle down to the masses is just rationalization for the miseries of the world people which are caused by capitalist greed for profits in the first place. Capitalist economists are so obsessed with what they call a transition period towards economic prosperity in their so-called business cycles that they forget that in this period of transition if ever it is true, thousands of poor and unemployed would be dead in the meanwhile. In the history of capitalism, as we will see below, it is not the logic of an imagined business cycle that made capitalist economies to once more enjoy good times, but wars that have caused the deaths of millions of the lower classes.

The Rise of Finance Capital

What is the nature of crises that have shaken the capitalist financial market, the present of which is more intense and adding greater sufferings to the already burdened majority classes, to be aggravated further by the passing over of higher taxes to them to finance capitalist governments’ bailouts of the rich? In order to answer this question, let us delve into a brief background into the rise of the modern financial market of capitalism. Capitalism thrives on accumulating profits and more profits through the extraction of greater surplus values from the labor of their workers, including intellectual workers, like engineers, scientists, etc. The difference between a miser and a capitalist is that the former hoards his earnings, while the latter reinvests it back to business in order to create more profits. The first big capitalists were engaged in production during the Industrial Revolution in England, particularly the making of textiles. Since the production of commodities by the working class never balances with their purchasing power, for after all it is the working class who are the main consumers of capitalist goods, overproduction in a particular capitalist country will inevitably occur and there arises the need to look for other markets by the capitalists. [If the worker is paid the whole value of what he produces, there would be no profit for the capitalists. Thus, the aim of the aggressive capitalists is to increase more and more the surplus value or the unpaid value that his worker produces either through extending his working hours(absolute surplus value) or introducing machines to accelerate the production of goods(relative surplus value]. There is also the search for cheap labor and raw materials to counter the costs of production due to the introduction of more modern machineries. [In Flyod L. Darrow “Masters of Science and Invention”, Harcourt, 1951, is discussed how the inventions and ideas of members of the working class and destitute scientists have been coopted by the bourgeoisie to be used for their business.]

Thus, the English bourgeoisie or capitalists supported by their government put up the English East India company to penetrate the markets of Asia, most particularly populous China. With the emergence of other capitalist countries in the latter half of the nineteenth century, Belgium, Germany, France, Netherlands, and the Johnny-come lately, the US, a general crises of overproduction occurred in 1870, resulting in a scramble for colonies, which also victimized the Philippines in 1898, courtesy of the US. Africa and China were carved out by the European capitalist nations, and South America exclusively claimed by US capitalists as its zone of business as early as 1854 in the infamous President Monroe’s doctrine. Inspite of the opening of new colonies, however, the second crises of overproduction of capitalism descended on it in 1911, leading to the closing down of many factories, laying off thousands of workers, especially in the US. In 1914, the first great war of the capitalist nations, World War I, erupted, primarily caused, among other reasons, by the quarrel between England and Germany to control the oil rich territories of the Middle East. That war spurred the recovery of the US economy through the selling of arms on credits; and England and France, profited from the defeat of Germany by seizing the latter’s capitalist assets and colonies based on the notorious Versailles Treaty, the vindictiveness of which nurtured the rise of Nazi Germany.

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