Commercial conflicts and threats of war as proof of a system in crisis

Lutte Ouvrière workplace newsletter
August 12, 2019

Violent storms have accompanied this summer’s intense heat and caused a lot of damage locally. But the most devastating storm is developing at the heart of the economy. It follows the mad logic of markets, profits and commercial rivalry. As we have seen so often in the past, it leads straight to crisis and sometimes to outright war.

Since mid-July, war clouds have been gathering in the strait of Hormuz. Thousands of oil tankers from all over the world pass through this narrow stretch of sea which has recently become the latest battleground between the US and Iran since Trump banned Tehran from selling oil.

Last week, Trump relaunched hostilities against China by deciding to apply customs duties on all Chinese imports. China retaliated by devaluating its currency, the yuan.

The effect on the stock markets was instantaneous. In one week, the Paris stock market dropped by 5%. On August 5, Wall Street recorded its lowest figure yet for this year. The American press stated – “The losers were everywhere…Technology, Retail, Oil…” According to Silicon Valley specialists – “Microsoft, Amazon, Apple, Facebook and Alphabet lost a total stock-market value of 162 billion dollars.” This shows just how fragile their system is.

For months now, bourgeois economists have been ringing alarm bells about the increasing number and size of speculative bubbles. Since the 2008 crash, all central banks have poured hundreds of billions into the economy at historically low interest rates to help the economy recover. But those billions haven’t been used for production, they’ve been used for speculation.

Today, the amount of explosive material is greater than ever. The smallest shock, uncertainty or loss of confidence in this or that share value, could be like a spark to a powder keg.

The people who profit from the system are so conscious of this that they are now rushing to buy safe-haven assets – gold, property and even state debt – that allow them to secure their billions despite negative interest rates. And, as a sure investment, luxury goods continue to grow at a tremendous rate driving the personal fortune of Bernard Arnault (CEO of Louis Vuitton Moët Hennessey) up by 40 billion dollars in just one year which amounts to 106 million dollars per day or 4.5 million every hour!

In the meantime, hospitals and state-run homes for dependent people desperately need money. Countries as rich as France are even unable to maintain their rail system. Living conditions are deteriorating for the overwhelming majority of people who are essential to society. Many employees are overworked for 1,200 euros net before taxes. The thousands who work for Deliveroo, Uber and similar companies are the damned of the tarmac, cycling for hours for pitiful wages.

Capitalist greed interferes with all economic activities and diverts money away from being useful to society. Worse still, the whole system depends on speculative bets and, at the slightest hint of panic, everything could collapse.

Despite all the technological means at our disposal, the production of raw materials, energy, food, medication, the communications and transport networks, housing construction, etc. can all be stopped dead.

Immense wealth is cumulating on one side of society and the capitalists are wallowing in billions, playing on the stock market with them. Because of this, the economy is headed for a crash, for more destruction, more shortages, more unemployment, more poverty and possibly generalized war. No economy could be more unjust or crazy.

Only the working class can get the economy back on its feet. Its interests are driving them towards this because the workers are the main victims of capitalist parasitism. The economic situation is more and more strained for workers. Chasing profitability makes working conditions worse, causes job losses and develops job insecurity. Should there be a crash or a war, the working class will be the first to be sacrificed.

But, if they can find their way back to class struggle and collective organization against the capitalist class, workers will provide a future for the whole of society. They really are the only ones who can drive an economy organized collectively to answer the needs of all. This means overthrowing the power of the big bourgeoisie and putting an end to the private ownership of capitalist groups.