World Capitalism Plunges

Source: http://www.internationalist.org

month after month. With the financial crisis that exploded in September 2008, the international credit system effectively froze. In the past five months, there has been a sharp drop in industrial production, investments, exports, consumer spending, construction and just about every other major indicator of economic activity in virtually every country of the capitalist world.

In the U.S, this is already be the longest recession since World War II, and it’s not ending any time soon. In short, the recession is rapidly becoming a depression, although the capitalist rulers don’t want to say so because they fear that would set off an even worse panic. The underlying issue behind both the waves of financial speculation and now the sharp drop in the real economy is the overproduction of capital, and the associated falling rate of profit.

Under capitalism, the only way the rate of profit can be restored is through the destruction of capital, by massive bankruptcies producing millions of unemployed, or by imperialist war laying waste to productive capacity. Or, as happened in the 1930s and ’40s, by both. The present global capitalist economic crisis is not cyclical or even structural but systemic. Neither monetarists nor Keynesians can solve it. But as Lenin and Trotsky insisted, capitalism will not collapse of its own accord. A series of transitional demands should be raised pointing to the need bring down the bourgeoisie and institute workers rule.