. on The Crisis
December 2008
No, not a newsletter on the food or water crisis. Not on the energy crisis nor on the climate crisis or the social crisis. We close off the year with the financial and economical crisis!! Is it a bad thing? Is it a good thing? And is it an opportunity for radical transformation?
**Contents
1. Credit Crunch
2. Saving Iceland's savings
3. Apokapitalism now!
4. New deals
5. Alternative solutions
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1. Credit Crunch
OK, in short: The capitalist sysem is based on the ideology that profit leads to investments leads to growth leads to progress. Accumulation of capital is understood here as the engine of growth. New investments need to be made constantly to keep the engine running. Investments are done in real capital goods on the expectation of profit but since the 70s capital sees no ways to put made profit into new investments in order to expand. The standard of profit and economic growth was temporarily maintained though by moving production lines in the 80s and 90s to countries where salaries are low. Then capital thought to put its investments in more short term projects based on speculation, also referred to as “casino capitalism”. Profit is here made more and more via transactions in financial circuits rather then in trade or in real goods.This virtual economy kept expanding but was a soap bubble about to pop. Money was no longer going around to finance trade and the production of goods and lost its basal function within the financial system. As with all bubbles it took more and more money to make a return. Taking it so far that banks had to stop giving out big loans (credit) – a Credit Crunch – and went bankrupt.
For a more extensive and critical analysis' see:
http://www.indypendent.org/2008/10/02/how-to-wreck-the-economy
http://www.greatrecession.info
http://casinocrash.org/?page_id=222
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2. Saving Iceland's savings
Due to the financial crisis and the collapse of the Icelandic banks the activists of the Saving Iceland environmental campaign get their well deserved break. The construction of the Alcoa's aluminium smelter in Straumsvik will be delayed for the next years. The construction of the dam in the Tungnaá river as an expansion of the smelter is now also uncertain due to the lack of financing. See http://savingiceland.org
Did we say a break? For more than 2 months Icelands has seen weekly massive demonstrations and actions. The three major Icelandic banks have been nationalized, putting the debt on the people's shoulders. People have lost their lifelong savings, lost their jobs, and are facing the threat of losing their houses. The International Monetary Fund (IMF) has granted a loan to Iceland. But as with all IMF loans it comes, most likely, with a set of neoliberal measures, privatizing health care and education and destroying Iceland's wilderness. Protestors not so much ask the current government to resign nor plea for new elections; they demand a radical transformation and an end to capitalism now!
See http://aftaka.org/2008/12/12/direct-action-in-iceland
And what does Björk think of this all:
http://savingiceland.puscii.nl/?p=3514&language=en
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3. Apokapitalism Now!
Governments are pumping billions into the big banks to prevent the financial system from a total collapse. After three decades of privatization, we are back at regulation and nationalization. The fact that this is paid by people's tax money does not mean that they get any more control over the banks. Top managers still claim their x-mass bonuses in millions of euros. Fed-up people in Greece got rid of all the banks by burning them to the ground. For a timeline of events in Greece: http://balkans.puscii.nl
Horrible scenes in Amsterdam while bankers go beserk in search of money:
http://www.youtube.com/watch?v=B_Anjv95eKE
http://indymedia.nl/nl/2008/10/55457.shtml
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4. New deals
The car industry is in major crisis. America's General Motors, that brought us the most polluting SUV's, sacks its workers (a major social crisis). Under pressure of the unions Obama promises a rescue plan for the company. You would think that in light of an energy crisis and a climate crisis rejuvanating this dirty industry is not the answer. In order to plead for public funds the three CEO's of GM, Ford and Chrysler flew from Detroit to Washington to discuss the rescue plan. Each in their own private jet.
http://abcnews.go.com/Blotter/Wallstreet/story?id=6285739&page=1
Meanwhile UN leaders talk of a “Green New Deal” - named after the “New Deal” implemented after the depression of the 1930's to help set up the world economy and stimulate growth. The green economy should provide a new engine for economic growth, create jobs and decrease poverty, by investing in environmentaly sustainable solutions.
But what constitutes 'green' here? Are huge plantations for agro fuels green? Is nuclear energy green? Is this the new economy that we want or is it the same old market? Plus the question if our planet has the raw materials for all these alternatives and whether it can handle more economic growth. More growth is not sustainable and solutions can only lie in reduction in our use of energy and in our consumption habits. We need to shrink! As long as growth and profit stay the pillars of our economy this planet is doomed.
At the end of November 2009 world leaders will come together in Copenhagen for COP15 – the UN climate summit. The Kyoto protocol adopted in 1997 will be followed up by a new environmental treaty. Climate change has put us up with a hard deadline. Ten years after Seattle the movement needs to bring its demands for real change to Copenhagen. http://climateaction09.org
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5. Alternative solutions
At a congress two weeks ago in Amsterdam titled 'Left and the Crisis' a Socialist Party member was asked what their response is to the crisis. Fairly it came down to staying seated on your ass while smirking a 'I told you so'. Looking at history we can see that every crisis is grasped by capitalism and its elites as a window of opportunity. Read for example http://www.naomiklein.org/shock-doctrine . So we can't stay on our asses and wait for capitalism to reform itself again. Real change can and needs to be pushed now.
An initial response from individuals, social movements and non-governmental organisations in support of a transitional programme for radical economic transformation Beijing, 15 October 2008. Includes a long list of concrete action proposals mostly on a macro-level: http://casinocrash.org/?p=235
On a more grassroots level:
Communities taking it in their own hands:
http://www.transitiontowns.org
Alternative currencies:
LETSystems: http://www.gmlets.u-net.com
Open Money projects: http://www.openmoney.org
Participatory Economics: http://eng.anarchopedia.org/Parecon
Anarchist perspective(s) on economics: