We all know the story of the frog in boiling water. If you drop a frog in a pot of boiling water it will, of course, frantically try to clamber out. But if you place it gently in a pot of tepid water and turn the heat on low, it will float there quite placidly. As the water gradually heats up, the frog will sink into a tranquil stupor, exactly like one of us in a hot bath. Before long, with a smile on its face, it will unresistingly allow itself to be boiled to death.
As of today we have been in an economic crisis for over ten years. We think that if you ask most Americans who or what is responsible for this economic crisis they will say it’s the bankers and Wall Street, and for the most part that makes sense. However, the crisis is much bigger than just the banks.
Since the mid 1970’s the following trends have been identified in the United States:
- Steepest grade of differentiation between rich and poor in the world
- Mass layoffs at work
- Predominance of job offerings that are part-time, temporary, low wage with no benefits
- Spiraling rate of home foreclosures
- Large percentage of homeowners with mortgages under water
- Repeated slashes to social services and employment benefits
- A collapsing infrastructure of roads, bridges, sewer systems, underground gas and water mains
- Mass public school closings and rise of charter and private schools
- Growing student debt
- Rising costs of food, gas, energy
- Wage stagnation
- Sevenfold increase in the rate of bankruptcies between 1980 and 1998
- Capitalists’ increasing investment of their profits outside the United States
If you think this crisis is temporary, just look at where the crisis is playing itself out now – in Europe. It would be one thing to have a crisis in capitalism if some of the people in the peripheral countries like Mexico or Haiti were the ones rebelling. But this is a crisis in the home of capitalism; Italy, Spain and Greece. In Europe even Germany, the pillar of the European Union is no longer on firm economic ground. Lately workers there are not doing so well. Capitalism is in more trouble now than it ever was when it was fighting against socialism. What Marx had to say about the crisis in capitalism is truer now than ever before.
BUT THERE IS NO ALTERNATIVE TO CAPITALISM
In spite of these dire straits, most older Americans think that capitalism is the best and only economic system. But Americans’ idea of capitalism has little or nothing to do with how capitalism is actually practiced. Many of you want a chance to start up your own business and believe that if you save your money, are smart about identifying a unique product or a service that is needed, you have a right to fill that niche and make a profit from doing so. Fair enough. However, the fact is that more than 4 out of 5 start-up businesses fail.
Like you, we think that an economy should produce real goods and services. But the kind of capitalism that has caused the crisis is not about provisioning goods and services. These days, capitalists in the United States spend most of their time making profits on destruction (the arms industry) or in finance such as real estate, insurance, or (stock-options and derivatives). These are profits made on paper only with no physical production of anything. Yet mainstream economists make no distinction between “finance capital” and profits made on production. This explains why we are told that despite record individual bankruptcies, debts and unemployment, the economy has undergone a “recovery”. Recovery for whom? Clearly, it’s a recovery only for the 1%. And further, a recovery of the 10% of the upper middle class
On the whole, if you’ve held on to the American Dream, we hope you’ll realize the American Dream is over. Capitalists have “left the building” and have gone on to invest in other countries. We say this not to tell you that you cannot dream. Rather we’d like you to join us in another kind of collective dream. The most recent research says that Americans between the teen years and mid-twenties favor socialism over capitalism. While Bernie Sanders is no socialist, he is currently the most popular politician in the country. His labelling of himself as a Democratic Socialist has made it easier to talk about socialism than it has been for at least 70 years. We think he is a New Deal liberal. But that doesn’t change the fact that 13 million people wanted a socialist for president.
For the last 35 to 40 years capitalism has been dominated by rejection of the policies of John Maynard Keynes for state intervention in the economy. Keynes proposed this in the 1930’s to reduce the likelihood of more capitalist crises. Instead, capitalist elites have returned to a “market fundamentalism” called “neoliberalism” which minimizes state intervention in the economy while expanding trade to global proportions.
We are now seeing the very first signs of rejection of neoliberal globalization in the rise of economic nationalism in Europe. These take the form of the British rejection of the European Union; the growing threat of secession among the Catalans and the Basques in Spain as well as the rise of right-wing movements in France, Greece and even Germany. We can also see this in the United States when largely lower middle class and some working class people elected Donald Trump. The common theme in all these movements is that market fundamentalist globalization has lowered the standard of living for people and that people mistakenly think that immigrants and refugees who are part of the globalization process have taken their jobs. We do not want right-wing governments to come to power, but we understand why people are behind them. It is the failure of the world socialist movement to provide a program which gives workers an economic solution rooted in the crisis of capitalism rather than a racial and religious explanation.
SOCIALISM IS IN THE AIR
If we continue a global focus, we can see movements on the left that are fed up with calls for austerity and lower standards of living.
- In the last 15 years 7 South American countries elected Social Democratic governments. While these governments are now on the defensive, this is the result of the world collapse of oil prices as well as capitalist political intervention to control national policies and keep wages down. Whatever becomes of these regimes, the fact is that many people voted for them.
- Norway, Sweden and Denmark have long had Social Democratic governments. They have somewhat escaped the crisis that now grips most of the European Union countries, and in the case of Norway and Sweden they have standards of living higher than those in the United States. While some may argue that they are not really socialist countries, what this does demonstrate is that major industries can be nationalized while people maintain a very high standard of living.
- The emergence of an Occupy movement in over 28 cities in the US in which people took over physical space in the public squares, demanding change to a corrupt system. Late in 2011 after Occupy just got off the ground, a survey was conducted by a mainstream media outlet asking people in the United States what they thought of the Occupy Wall Street movement (OWS). Approximately 60% of the respondents supported it. There are a number of reasons we think this is an extraordinary turn of events:
- The slogan “Occupy” has radical connotations, far beyond any of the protests in the last 50 years, including anti-war and civil rights movements. To “occupy” means to take over public space and stay there.
- The focus was not on politics, but economics, specifically the banks and Wall Street. While this may not call capitalism per se into question, it does call into question finance capitalism. It has been well over 80 years since the US public wondered about the viability of its financial institutions.
- The slogan of the “99%” and the 1% has really drawn attention to the class nature of the current economic crisis.
PROMOTING COUNCIL COMMUNISM
We promote a form socialism called “council communism”, or libertarian Marxism. Especially in the last 130 years, there erupted a series of attempts by workers to take over social life without capitalists, without the state or without vanguard party leadership. These “workers’ councils” arose out of irreversibly critical situations in the existing order. In some situations, they emerged alongside the state, creating a “dual government”. When the state fell some workers’ councils spread over a wider terrain, as during the Spanish revolution, reaching as much as one third of the country. In some cases, they not only governed without the state but in some places they abolished the local currency and began their own system of exchange. These experiments took place during revolutionary processes when the official authorities lost power but before that power was regained. These movements lasted as briefly as 3 days (the Seattle General Strike) or as long as 3 years (the Spanish revolution). They involved general assemblies, strictly mandated delegates who were immediately recallable. Theoreticians of workers’ councils include Anton Pannekoek, Herman Gorter, Amadeao Bordiga and Paul Mattick.
Despite considerable reservations, we see how what are now called “worker cooperatives” can become proto-councilist organizations, because worker coops at their best teach workers how to plan what, how, when and where to produce and well as having control over their decision-making processes, including determining their pay scale.
We want to keep our focus squarely on capitalism because more than any other social institution, it is responsible for the misery of more people. Additionally, we also want to focus on capitalism, in part because it struck a chord in working and middle class America. The public responded to an attack by the banks and other financial institutions that have stolen our money, savings and retirement funds. We just want to face the fact that, like it or not, the mass of the American public has never supported leftists’ causes around race and gender in as large numbers as they did during the focus on capitalism during the life of Occupy. We think the focus needs to be on, and remain focused on, the irrationality and incompetence of capitalists to manage social life.
Focus on Working and Middle Class Adults
We want the heart of our membership to be composed of working class and middle class adults. This is because this section of the population has the most power to undermine the capitalist economy by withholding surplus labor and shape a socialist revolution. Upper middle-class people, with all their good intentions aside, are not a reliable sector of the population to draw from because they have too great a stake in the existing order. On the other extreme, people who are not working and are poor do not have any bargaining chips in the way of withholding work, taxes or investments.