An Anarchist FAQ (1117) by The Anarchist FAQ Editorial Collective & The Anarchist FAQ Editorial Collective

Author:The Anarchist FAQ Editorial Collective & The Anarchist FAQ Editorial Collective
Language: eng
Format: epub
Tags: affinity groups, An Anarchist FAQ, anarcho-communist, anti-capitalist, anti-civ, anti-voting, autonomy, Benjamin Tucker, bibliography, capitalism, children, Chile, class, crime, crisis, critique, democracy, direct action, ecology, economics, environment, ethics, feminist, France 1968, green, health, Herbert Spencer, history, Iain McKay, individualist, introductory, Leninism, marxism, Max Stirner, media, movement, Nestor Makhno, not-anarchist, organization, oxymoron, Paris Commune, platform, practice, prefigurative politics, primitivist, propaganda of the deed, property, proprietarians, reformism, religion, revolution, Russian Revolution, science, self-determination, sexuality, socialism, social revolution, society, Spain 1936, symbols, syndicalist, technology, terrorism, theory, the State, trade, trade unions, Trotskyism, vanguard, violence, work
Published: 2009-08-14T16:00:00+00:00

Of course, industrial capital also hates labour, so there is a basis of an alliance between the two sides of capital, even if they do disagree over the specifics of the economic policies implemented. Given that a key aspect of the neo-liberal reforms was the transformation of the labour market from a post-war sellers’ market to a nineteenth century buyers’ market, with its effects on factory discipline, wage claims and proneness to strike, industrial capital could not but be happy with its effects. Doug Henwood correctly argues that “Liberals and populists often search for potential allies among industrialists, reasoning that even if financial interests suffer in a boom, firms that trade in real, rather than fictitious, products would thrive when growth is strong. In general, industrialists are less sympathetic to these arguments. Employers in any industry like slack in the labour market; it makes for a pliant workforce, one unlikely to make demands or resist speedups.” In addition, “many non-financial corporations have heavy financial interests.” [Op. Cit., p. 123, p. 135]

Thus the general stagnation afflicting much of the world, a stagnation which has developed into crisis as the needs of finance have undermined the real economy which, ultimately, it is dependent upon. The contradiction between short term profits and long term survival inherent in capitalism strikes again.

Crisis, as we have noted above, has appeared in areas previously considered as strong economies and it has been spreading. An important aspect of this crisis is the tendency for productive capacity to outstrip effective demand (i.e. the tendency to over-invest relative to the available demand), which arises in large part from the imbalance between capitalists’ need for a high rate of profit and their simultaneous need to ensure that workers have enough wealth and income so that they can keep buying the products on which those profits depend (see section C). Inequality has been increasing in the USA, which means that the economy faces as realisation crisis (see section C.7), a crisis which has so far been avoided by deepening debt for working people (debt levels more than doubled between the 1950s to the 1990s, from 25% to over 60%).

Over-investment has been magnified in the East-Asian Tigers as they were forced to open their economies to global finance. These economies, due to their intervention in the market (and repressive regimes against labour) ensured they were a more profitable place to invest than elsewhere. Capital flooded into the area, ensuring a relative over-investment was inevitable. As we argued in section C.7.2, crisis is possible simply due to the lack of information provided by the price mechanism — economic agents can react in such a way that the collective result of individually rational decisions is irrational. Thus the desire to reap profits in the Tiger economies resulted in a squeeze in profits as the aggregate investment decisions resulted in over-investment, and so over-production and falling profits.

In effect, the South East Asian economies suffered from a problem termed the “fallacy of composition.” When you are the

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