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System's defenders warn of 'collapse' of global capitalism

By Grant Morgan

October 22, 2009 -- Something molecular is changing in the DNA of capitalism. Look at these three recent quotes:

  • "The future will be a total disaster, with a collapse of our capitalistic system as we know it today."
  • "Capitalism is near the tipping point, unprepared for a catastrophe, set up for collapse and rapid decline."
  • "There is a high probability of a crisis and collapse by 2012. The 'Great Depression 2' is dead ahead. Unfortunately, there's absolutely nothing you can do to hide from this unfolding reality or prevent the rush of the historical imperative."

What's particularly important about these quotes is who made them. Not socialists. No, they were made by ardent, intelligent and reputable defenders of capitalism. For more information, read the MarketWatch essay "America's soul is lost and collapse is inevitable".

Each of the three quotes includes the word "collapse" in the sense of a collapse of global capitalism, rather than merely a crisis in a particular part of the world system (such as cracks in the financial architecture or deflations of housing and share bubbles).

What we are starting to see is collapsing confidence among the defenders of capitalism. While far from universal, it is becoming a common phenomenon among the more insightful ideologues of the global marketplace.

History is crystal clear on this point: a crisis of confidence among the ruling elites of any social system is both a symptom and a catalyst of impending social disintegration (and, after a turbulent interregnum, the rise of another type of social system).

Increasingly common talk among our "betters" about the possibility or probability of capitalist collapse is tightly intertwined with the crisis of legitimacy, one of the quartet of contradictions which are besieging late capitalism. The other three contradictions are the profitability crisis, the resource crisis and the ecological crisis.

Corporate profitability is in overall longterm decline despite late capitalism's frantic efforts to compensate via the ultimately self-destructive mechanism of financialisation. The system is reaching peak oil, peak water and peak farmland as the scramble for dwindling resources sparks new imperial wars. Capitalism's predatory exploitation of the environment has unleashed the revenge of nature, facing humanity with the catastrophic dangers of climate warming.

The mounting fury of this quartet of contradictions points towards only one possible outcome: the collapse of capitalism on a global scale within a historically short time span.

When a country's rulers become so isolated that they block even the "normal" evolution of capitalism, such as in Russia (1917), Spain (1935), Cuba (1959), Czechoslovakia (1968), Nicaragua (1979), Venezuela (1999) and Nepal (2007), they can be ousted by a grassroots revolt without fatal consequences to the system as a whole. And so often the world system has rolled back the people's gains as isolation gutted the revolution.

The structures of a social order spanning the entire planet will be weakened to the point of collapse only by an elemental conjunction and intensification of worldwide contradictions.

The quartet of contradictions eating away at global capitalism's profit rates, natural resources, ecological stability and popular legitimacy may be slowed by intelligent policy options, but they cannot be halted. Indeed, they are more likely to be hastened by stupid policy options driven by the dynamics of competitive profiteering.

That brings us full circle to the despair expressed at the outset of this story by defenders of capitalism. They feel that the financial institutions which increasingly drive not only investment strategies but also government policy have "lost all sense of fiduciary duty, ethical responsibility and public obligation", to quote the words of US financial guru Paul Farrell. Their short-run thinking, he says, will inevitably generate "bigger, more frequent bubble/bust cycles" and the "rapid decline" of global capitalism.

Self-doubt and cynicism have now taken such a hold of capitalism's intellectuals that it is becoming commonplace for them to parody the stupidity and greed of big banks.

The website of the British Financial Times, that once-magestic propagandist of the corporate marketplace, hosts a side-splitting video send-up of banking practices, political economy and how everything yet nothing has changed in the last year. It features a bumptious banker saying, "Show me a stupid risk, and we'll take it", because governments will always shovel more money into his bank vaults.

This must-watch spoof can be seen at

While tapping into a deep vein of public disquiet, the criticisms of bankers made by capitalism's intellectuals seldom offer real alternatives because of the mental chains and social bonds constraining the critics.

Socialists need to tap into the same vein, but with different objectives. That's why Socialist Worker-New Zealand recently initiated a ``Bad Banks'' campaign. By joining the dots between big banks, which most people love to hate, and the entire workings of a world system sliding into existential crisis, the campaign aims to prepare people for life after capitalism.

Different campaigns on different issues in different countries are organising resistance to global capitalism's mistreatment of people and nature. All these campaigns are necessary, and all deserve support. Since the Bad Banks campaign in New Zealand is just one campaign among many, it does not claim any special status.

And yet, in one way, this campaign is special. It targets a key driver of early social collapse: the grotesque financialisation of global capitalism. We must be prepared for that early collapse, and we must prepare others. We must propose socialist alternatives now so that we prepare the ground for the green shoots of popular recovery.

If you want to be part of the Bad Banks campaign in New Zealand, or spread it to other countries, email campaign manager Vaughan Gunson at For the latest information on the campaign, visit the Bad Banks campaign website or UNITYblog. The latest edition of Socialist Worker-New Zealand's magazine UNITY is also devoted to the Bad Banks campaign.

[Grant Morgan is a leading members of Socialist Worker-New Zealand.]

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