Vol. 71/No. 34      September 17, 2007

In the absence of new markets to sell their goods, capitalists in the United States and other countries have faced a tightening competitive squeeze for more than three decades. They can no longer turn profit at the same rate from the direct exploitation of labor to produce saleable goods.

To counter this trend, the owners of capital have turned increasingly to speculation. A mountain of debt—tied up in countless forms of betting on paper values—has been the result.

The upturn in the business cycle from 1991 to 2001 was marked by such speculation. While stock prices rose a blistering 225 percent between 1994 and 2000, U.S. gross domestic product climbed just 25 percent.

Corporate lending by big banks took place at a furious pace. But only a small portion of those fund went to expand production. The big majority instead became casino chips in high-stakes Wall Street gambles.

As the technology bubble of the 1990s collapsed, the housing bubble continued to inflate.

Millions—from workers who had previously been denied credit to those seeking “easy money” by buying “investment homes”—have been drawn in. Many bought new homes, and many more took out loans on existing homes. Seven years ago the average outstanding debt on housing was 78 percent of the value—by last year it had risen to nearly 87 percent.

As long as everyone kept paying and home prices kept going up the credit flowed more freely and the bubble kept inflating. As of 2004, home prices had risen 40 percent faster than the rate of inflation over the previous eight years. But now millions are facing ruinous debt.

The capitalists bragged that the “miracle” on Wall Street was due in part to computers and the Internet increasing labor productivity. But this is false.

Meat packers fighting to defend their union at Dakota Premium Foods in Minnesota and coal miners across the country facing life-threatening conditions on the job every day know the reality of this “productivity miracle.”

The bosses’ productivity gains are the result of their sucking more wealth out of the working class. They have lowered wages and cut benefits. They have sped up production at the expense of workers’ lives and limbs.

At the center of it all has been an offensive against the unions. The percentage of workers organized in unions has declined to 12 percent from more than 25 percent in the 1950s.

Workers can gain no individual protection or guarantees from the capitalist system. The key to defending ourselves as a class from the ruinous effects of capitalist economic crises begins with the fight to organize and use union power—the main defensive tool of the working class.

Strengthening the fighting capacity and self-confidence of the working class is key to forging a movement capable of leading workers and farmers to take political power. Only on that basis can a world be built where human solidarity rules, not the dog-eat-dog greed of the bosses.
 
 
Related articles:
1.1 million in U.S. face home foreclosure
Foreclosures, evictions hit Georgia workers hard  
 
 
Front page (for this issue) | Home | Text-version home