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Vol. 72/No. 38      September 29, 2008

 
Labor and the capitalist crisis
(editorial)
 
The demise of Lehman Brothers and Merrill Lynch and the $85 billion bailout of the American Insurance Group are the latest signs of the financial crisis the U.S. rulers face, the worst since the opening of the Great Depression.

The problem is not lack of bank regulation or out-of-control capitalists. The problem is the capitalist system itself.

The current crisis is rooted in the decline since the 1960s in the average rate of industrial profit. This has made investments in new plants and capacity-expanding equipment less profitable for the capitalists. Instead, the superwealthy rulers have placed their funds more into financial markets.

The falling rate of profit also pushes the U.S. rulers toward increased competition with their imperialist rivals for control of the world’s markets and resources, producing more wars. At the same time, they drive up the number of deaths and injuries in coal mines, on construction sites, and in factories as they ramp up line speeds and cut back on safety in order to wring more profit from our labor.

Some 85 percent of the value of stock is held by those in the top 10 percent income bracket in the United States. Those feeling the most immediate, direct impact from a plunge in the stock market and the collapse of leading investment and insurance firms are those in the middle class, not the working class. But the financial market is inseparable from the production and circulation of commodities. So a financial crash will have a ruinous impact on the toilers and over time will lead to sharpening class battles.

To defend workers from the devastating consequences of capitalism’s crisis, the labor movement should demand a federally-funded public works program that can put millions to work at union-scale wages, instead of funneling tens of billions of dollars to the banks and insurance companies. Institute a shorter workweek with no cut in pay that can spread the available work around to all those who need it. Put into effect a cost-of-living adjustment that guarantees when prices go up, workers’ income automatically rises to match.

Workers need to use union power. We need our own party, a labor party based on fighting unions, that can challenge the capitalist parties in the electoral arena and in the streets. That will be a step toward building a revolutionary movement that can replace the propertied minority with a government of workers and farmers that will abolish capitalism, reorganize society in the interests of the vast majority, the toilers, and join in the world struggle for socialism.
 
 
Related articles:
U.S. bank crisis shocks world financial system
Stocks plunge, more failures to come  
 
 
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