A crisis of capitalism

[Ichingcarpenter]

A crisis of capitalism
The financial problems plaguing Europe and Italy are not home-grown. They are part of a global attack on labour

by
Riccardo Bellofiore

History repeats itself, Marx wrote, first as tragedy, then as farce. If you wonder how it might repeat itself the third time, look at Italy: a country where the most effective opposition to government are – literally – comedians, and where the prime minister himself is a joke. This has distorted most analysis of the country's economical and political situation, as if Italy's problem is just its PM, distracted by sex and trials.

To understand the true nature of the Italian crisis we need to look at it in a wider European context. The limits of the eurozone are well known: it has a "single currency" that isn't backed by political sovereignty, a central bank that doesn't act as lender of last resort or finance government borrowing, and no significant European public budget. The flaws of the ECB's obsessive anti-inflationary stand, and its propensity to raise the interest rate whatever the cause of price rises, are also plain to see. And Germany's tendency to profit from southern Europe's deficit while simultaneously imposing austerity budgets on those countries pertains more to psychiatry than economics.

That said, the European crisis is not a home-grown one, the sovereign debt crisis is not truly a public debt crisis, and Italy's crisis is not Italian-born. German neo-mercantilism induced stagnation in Europe, which survived thanks to US-driven exports. When "privatised Keynesianism" – mixing institutional funds, capital asset inflation and consumer debt (a model exported from the US and UK to Italy, Spain and Ireland among others) – exploded, European growth imploded. The sovereign debt crisis is thus the private debt crisis in disguise. Deficits are not of the "good" kind (planned to produce use values, and self-dissolving through qualitative development), but of the "bad" kind (induced by real stagnation or saving finance).

snip........


However, this crisis is not just a financial crisis, but a capitalist crisis: it is part of an attack on labour. From this point of view, a New Deal should be part of a wider programme of the European left, who should push for a socialisation of investment, banks as public utilities, the intervention of the state as direct provider of employment, and capital controls. It is not (yet) Marx. It is Hyman P Minsky. Unfortunately what's really missing in Europe is not the money to finance debt; it is internationalism. Only European struggles can resist austerity and deliver decent reform.


edited for link:


http://www.guardian.co.uk/commentisfree/2011/sep/21/crisis-of-capitalism

[Owlet]

1. An interesting analysis

But he weakens it to some extent by basically blaming Italy's economic woes on those dastardly efficient Germans and those scheming Americans. Then, oddly, he proceeds to develop a pretty good case that Italy's problems have been largely home-grown.

He's definitely on to something, though, when he states that this capitalist crisis is a 'Minsky Moment'.

[Ichingcarpenter]

2. I believe he's talking about the German Banks and

American bank power system which are involved in these international fiascos . In that sense he is right if you look into it.....