Analysis

AJLPP on the Current Imperialist Crisis in the United States and the Whole Capitalist World

Los Angeles— The capitalist bailout rammed into the US Congress has infused into the banks more than $ 500 B out of the $ 700 appropriations. But despite the huge infusion to the capitalist system, the crisis marched on with impunity.

The Alliance-Philippines (AJLPP) believes that the latest unraveling of the “free market” dogma, the ultimate exposure of the failed concept of “neoliberal globalization” and the gravity of the current level of the economic and financial crisis of the imperialist powers headed by the US is now totally exposed to the whole world.

But this phenomenon must be explained and understood and should not be feared. We must act to face this crisis with renewed determination and readiness to struggle for the people and to change this rotten system.

The current economic crisis validates Marx and Lenin’s century-old analysis. Over subsequent decades, the finance industry has experienced a concentration into the hands of a smaller and smaller number of large institutions that control a great deal of capital.

We in the AJLPP condemns in the strongest terms all the economic and financial crimes of monopoly capitalism against the people under the slogans of “free market” and “neoliberal globalization”.

Such crimes against the people manifest in the systematic driving down of the wages ,job cuts, and cuts on other incomes of the working people in the United States, cutbacks of necessary social benefits and the suppression of their democratic rights for the purpose of maximizing the profits of the monopoly firms in the imperialist and other countries.

Destruction of the Forces of Production

The financial crisis, ignited by the mortgage meltdown and characterized by the bankruptcies of banks, abrupt stock market falls and severe credit crunch, and the economic crisis involving the further stagnation and depression of production and consumer market are destroying the forces of production and wreaking havoc on the lives of the people on a global scale.

In 1916, almost a hundred years ago, Russian revolutionary V.I. Lenin wrote on the fundamental role of banks: "The principal and primary function of banks is to serve as middlemen in the making of payments. In so doing, they transform inactive money capital into active, that is, into capital yielding a profit; they collect all kinds of money revenues and place them at the disposal of the capitalist class."

Lenin further described the development of banking: "As banking develops and becomes concentrated in a small number of establishments, the banks grow from modest middlemen into powerful monopolies having at their command almost the whole of the money capital of all the capitalists and small businessmen and also the larger part of the means of production and sources of raw materials in any one country and in a number of countries."

In the modern stage of capitalism, "millions of small, medium and even some big ‘proprietors’ are in fact in complete subjection to some hundreds of millionaire financiers."

Consolidation and Concentration of Capital

As some of the largest financial institutions in the world fail, others are growing even bigger. There are around 8,000 banks in the United States, yet the three largest banks alone—Citigroup, JP Morgan Chase and Bank of America—now hold 30 percent of all deposits.

The tendency toward an ever greater concentration of capital is natural under capitalism. This process gets a boost during times of economic crisis. As businesses in all sorts of different industries fail, others swallow them—or their assets—at discounted prices. To take an example, there were more than 1,000 U.S. car manufacturers in the 1920s; there are now only three.

Michael Poulos, a financial analyst at Oliver Wyman, summed it up: "What we have gotten is 10 years of consolidation in the last 10 days. The current situation has created opportunities for acquirers that are really unprecedented." (New York Times, Sept. 29)

While finance capital is c0nsolidating. are witness to the cutbacks on social spending by governments for education, health and other basic services, tax cuts, gilded contracts, subsidies and insurance for the monopoly firms, the privatization of state assets , deregulation to make way for the unbridled exploitation of the working people and the environment and the use of state power in the service of monopoly capitalism.

California stands out where the state government and the two parties, both the republicans and the democrats connive to cut billions of dollars for peoples needs.

( To be continued in part 2)