In recent months, economists warned that another economic crisis is coming. In contrast, the U.S. government announced that job growth increased above expectations for the month of December, 2014, supposedly proving that the economy is strong and well on the way to recovery. How can these two seemingly opposite things, going on at the same time, both be true? The answer lies in how capitalism causes economic crisis.
In a world of continuous change, new productive technology is always introduced. Productivity increases. Soon production out paces consumption. Markets become saturated. Commodities cannot be sold. Slowing sales lead to layoffs. Layoffs lead to even slower sales and a downward spiral begins. Such over production crises have occurred 14 times since the Great Depression, on average every six years.
The introduction of new labor replacing electronic technology, beginning in the 1970s, however, is creating a new situation. It constantly cheapens everything, including labor. While some jobs, particularly low-wage, may temporarily grow numerically, wages and hours fall. The working class, unable to buy back the things they have produced, find themselves homeless and hungry in a world of plenty.
This kind of wide-scale poverty used to be temporary. Today it is becoming permanent. The new advanced automated production also insures that each recovery from crisis is born ready to give birth to new crises. In order to keep sales up and commerce moving, credit expanded far beyond the ability of those in debt to pay. The debt bubble this has created stands ready to burst at any moment. Trillions of dollars from the federal government continues to pump into the bankers’ hands, under the guise that this will stimulate investment and jobs. But all this does is inflate stock prices and create another bubble ready to burst.
The capitalist class, organized into giant corporations, and increasingly unable to make profits in the old way, has resorted to privatization. Public schools, parks, housing, parking, water—in other words, all things public are becoming the private property of the corporations and a source of profit.
This outright economic theft of ‘we the people’ is finding political expression in the development of an openly militaristic police state, put in place to defend the private property of the ruling class. Protests against the outright murder of unarmed citizens by police are directly challenging that police state with signs that read, “the whole damn system is guilty.” Yes, the system is guilty of impoverishing workers by the millions and then murdering anyone who resists in the slightest.
Revolutionaries face a paradox in that they must participate in the fight to reform a system which cannot be reformed. Automated electronic production is making capitalism impossible. What is becoming possible is a new economic system of public, common ownership of that automated electronic production where goods are made available to all as needed. Once the working class grips this vision, a new world without economic crises or police states is not only possible and necessary, it is inevitable.
