At a time of rapidly growing war crisis, the cry for unity in the camp of the ruling class becomes ever louder even as divergencies appear more and more frequently.
The centrifugal forces in the capitalist organism seem to propel the extremes further and further away from the center. And the center itself appears to be fracturing.
How else can we explain the divergence in both tactics and strategy of the two principal military commanders of the U.S. — former Air Force Chief of Staff Gen. Michael Dugan and the commander of U.S. forces in the Middle East, Gen. Norman Schwarzkopf? They have openly proclaimed different approaches in relation to the Iraqi war crisis.
Should these divergences be dismissed as nothing more than opinions of the individual commanders concerned, having no relationship to the governing group of the capitalist state structure as epitomized by the Bush administration?
Or do they manifest a far deeper crisis within the organism of the capitalist economy itself?
It's not necessary at this point to go into a detailed examination of whether or not a full-scale capitalist crisis is now in progress. It is enough to state that the biggest, the most powerful bank in the world, Chase Manhattan, had to succumb to thousands of layoffs. The usual reassurance that these layoffs are of a temporary character arising out of the technical conditions of the capitalist financial markets is nowhere to be heard.
On the contrary, they seem to herald a crisis within the vitals of the capitalist financial structure itself. Business Week, the leading weekly of big business and high finance, categorically admits in its Oct. 1 issue that the banks themselves now face a credit crunch of their own.
How could that possibly be? Can Chase Manhattan, Chemical Bank and Citicorp, the very apex of world imperialist finance, actually be "reeling," as they put it?
"Traditionally," says Business Week, "investors in the credit market look on banks as a sure thing."
Of course, it's not the savings and loans that Business Week is talking about. The capitalist government is plundering hundreds of billions of dollars from the mass of the working people to bail them out.
No, it's the commercial banks. Business Week says, "Commercial banks were supposed to be stable institutions with conservative policies. Long and short term bonds, commercial paper and certificates of deposit issued by most commercial banks routinely receive a warm reception. And Wall Street loves to underwrite bank debt.
" `It was as easy as taking a dog for a walk,' a Merrill Lynch banker said. ... [But now] the nation's banking industry is reeling."
The consciousness of the masses has not yet absorbed the significance of this development, especially at Chase Manhattan, for decades the second largest commercial bank. It is still seen as though some steel, auto or chemical plant were experiencing difficulties and the usual cutbacks were falling on the heads of the workers.
But these layoffs at Chase, Chemical, Citicorp and other banks yet to come have a far deeper significance than the large-scale industrial restructuring witnessed earlier in the 1980s. These massive dismissals are a precursor of future, far more extensive and deep-going unemployment which will characterize the economic scene in the U.S. in the coming months if not weeks.
As if to prove the Marxist thesis on the relation between productivity and unemployment under capitalism, the New York Times of Nov. 7 ran an AP story from Washington explaining that "productivity of American workers climbed at the fastest pace in two years during the July-September quarter, but hours of work fell, the government said today, in a sign that the economic slowdown is forcing businesses to make do with fewer employees."
Yes, rising productivity under capitalism does lead to unemployment sooner or later. The basis for the current recession was laid by the widespread restructuring which "rationalized" so much of the economy — a euphemism for replacing people with technology.
The bank layoffs are of an anticipatory character. No one knows the state of the economy better than the banks with the largest deposits, the largest loans and the largest indebtedness. Chase, Chemical and Citicorp, the three biggest of the giant banks, are a mirror of the economy not only of the U.S. but of the capitalist system as a whole. When giant banks find it difficult to sell their own commercial paper, that is, their own IOUs, it can only be interpreted as a signal of an impending crash.
Does the Federal Reserve system today have the wherewithal to do again what it did in the 1987 stock market crash, when it absorbed a great deal of the shock by funneling in untold billions of dollars to postpone the crisis?
Can such dilatory measures solve the deeper problems of the capitalist economy? Can they compensate for the hard fact that the U.S. economy as a whole has lost as many as 600,000 manufacturing jobs since January 1989, and that this has not been made up (as it was in the 1980s) by an increase in service sector employment? (Washington Post, Nov. 4, Business Section, page 1.) In fact, the biggest layoffs now are in the service sector itself, and this is a nationwide trend.
It is now beyond doubt that the layoffs are spreading outside the banking industry. The New York Times reported Oct. 29, "Many American companies are laying off workers now, rather than waiting to be hit by hard times as they have in the past. Some economists warn that this outburst of corporate preventive medicine increases the odds of a steep recession." Regardless of how one interprets these unmistakable signs of a downswing in the capitalist economy, virtually no one views them as just temporary in character or projects an optimistic outlook for an immediate rebound.
The capitalist crisis is affecting not only the U.S. but also Europe, Japan and wherever the capitalist mode of production prevails, especially where imperialist domination and control are in effect.
How is all this affecting the countries in Eastern Europe where planned economies were overthrown? How is it impacting on the capitalist restructuring plans in the Soviet Union?
It seemed just a few months ago that all sorts of hopes were held out; the collapse of the socialist system in the East, it was believed on Wall Street, was a boon that would accelerate capitalist development in the West and become the biggest source of superprofits for the giant multinational corporations.
For decades they had looked forward to the great day when, by invasion, subversion or both, the vast markets of Eastern Europe and the Soviet Union would become open to them for investment, i.e., for capitalist exploitation.
Not many months ago a high official from the Mexican Central Bank came to the U.S. seeking loans and investments. He then decided he would also visit the European capital markets and see if he couldn't interest the European banks and large-scale capitalist investors in opportunities for investment in Mexico.
After conversations with a considerable number of bankers and transnational executives, he found at that time that their most important preoccupation was not with Mexico or Latin America, or even Asia, but rather with Eastern Europe and the USSR.
One only has to read the news reports of that period to fully confirm the analysis made by the Mexican bank official. That was only a few months ago. Since then the situation in Eastern Europe has deteriorated markedly. The familiar phenomena of capitalist unemployment and inflation have brought home a new lesson about the integration of the once-planned economies into the fold of capitalism.
In the USSR especially, while socialist planning has been vandalized and there has been a rush to widen the capitalist market, with plans underway for selloffs (one may say ripoffs) to giant capitalist multinationals, there is no Gold Rush, no flood of capitalist financiers and huge multinational corporations with ready cash.
Bourgeois economists claim the U.S. has a $5.5 trillion economy, and estimate the value of the Soviet economy at one-third of that. Of course, this is speculative at best and biased at worst. Nevertheless, that seemed to be part of their calculations before the collapse in the East.
But now that their big opportunity has come and the bourgeois restructuring of Soviet industry, commerce and finance is underway, neither the imperialist banks nor the multinational corporations are hurrying to invest in the USSR.
Of course, investments are planned for the USSR, especially since Gorbachev has begun dismembering the Soviet Union with his sovereignty measures for the various republics. This has opened up bargain-basement opportunities for the multinationals to deal directly with the smaller republics, who are weaker and most eager to overcome the internal economic crisis which the Gorbachev administration is dumping on them.
But none of this has added up as yet to the great expectations which the imperialist bourgeoisie had, especially in the first year or two of the Gorbachev capitalist reforms.
Why is that? Why the sudden pause?
At least one reason is the economic crisis in the U.S. Periods of economic crisis do not easily lend themselves to a search for new investment areas unless they are foolproof and guarantee lush profits to be made quickly. This is definitely not the case in the USSR, above all at this time.
The investments already made are certainly large enough to have reduced a small country to colonial vassalage. Nevertheless, whatever advantages the monopoly capitalists have gotten out of the restructuring plans in the USSR, they are still mostly of an anticipatory character. Whatever the investments, sales and loans have been, they have not been of the scale or magnitude anticipated during the pre-Gorbachev period. This was evident even two or three years ago.
Thus far, Gorbachev's plans have created more chaos than ready markets for imperialist exploitation, and so there has been a decided decline of interest on the part of the imperialist investors in the U.S.
There is another element which is not often discussed but should be quite obvious to anyone who considers the magnitude of Soviet industry and the high level of its science and technology in certain key sectors such as space. It should be rather plain that in many ways the economy of the USSR goes far beyond being just a base for sources of raw materials like coal, oil, gold and other metals. Rather, the Soviet industrial-technological apparatus is geared to rival that of the West. This aspect of the situation must not be lost sight of.
It is true that the Soviet Union has a great deal to offer in the way of raw materials. But its fundamentals, however inadequate they may appear at this moment, were built to compete with and rival the capitalist West. This important factor is now being given considerably more attention by the imperialist monopolies than in the days immediately following Gorbachev's usurpation of the power of the Soviet workers' state.
Thus the USSR is not an area ripe for imperialist colonization economically, either from the point of view of exports or imports. It doesn't present the great attraction of countries of the Third World from the viewpoint of the extraction of superprofits on the basis of super-exploitation.
Moreover, should a counterrevolution fully succeed in the USSR (which although in progress has not yet been consummated by any means), there is another factor that dims even more the likelihood of it becoming a safe and secure area for capitalist investment. The current political apathy of the working class in the Soviet Union is bound to crumble under the influence of the continued adverse economic conditions resulting from the dismantling and outright vandalism and robbery of state property now being stolen from the workers by the bourgeoisie.
Revolutionary ferment is most likely to overtake the current apathy. It is an all-too-true historical law witnessed in all great struggles of the working class that the whiplash of the counterrevolution, the severity of the economic conditions which the class enemy not only stimulates but imposes, creates the conditions for a revolutionary revival.
Gorbachev and his new bourgeois grouping will stimulate and revive the revolutionary elements in Soviet society precisely because his restructuring is bringing on social and economic adversity as severe as that imposed by any ruling bourgeoisie in a capitalist country. The present passivity and ambivalence of the working class flows from the fact that some socialist achievements like low prices and guaranteed jobs do still remain and the Gorbachev regime still retains an ambiguous attitude toward them. But this cannot continue for long.
Disillusionment with the Soviet CP will give way to revolutionary socialist reawakening of class consciousness. In fact, it may already be well on its way even now.
In the meantime, news of a debacle of the capitalist system in the West cannot be kept out of the Soviet press. The bourgeois intelligentsia which was so dazzled by the successes of U.S. capitalism in the 1970s and 1980s is bound to give way to disillusionment too. The Soviet intelligentsia has had an opportunity to see for itself how U.S. capitalism is doing economically — it has read about the layoffs at the auto plants, about the hundreds of billions for the S&Ls, about the U.S. deficit and what it used to believe were lies of the Soviet press regarding homelessness and unemployment. All this is decidedly a downer for capitalist restorationists in the Soviet Union and their promoters and cheerleaders.
In the meantime, the Wall Street bankers, financiers and multinational captains of industry who used to eagerly look to the East now see it as an area to be shunned instead of one ripe for investment. The kind of "malaise" prevailing in the East, as they like to put it, will only add to the problems brought on by the looming capitalist crisis in the U.S. The counterrevolutionary developments in the USSR are not a safety net for the imperialists after all.
In the meantime, the U.S. capitalists have a war on their hands, growing disaffection of the masses, and generally a resurgence of the working class under the whiplash of a 10-year-old anti-labor offensive. Under these conditions, there will be no easy pickings for the U.S. imperialists in the USSR or in Eastern Europe.
Last updated: 23 March 2018