By Sam Marcy
No matter what topics are discussed during the primary election campaign, attention inevitably turns to the issues of war, the capitalist crisis and national oppression. The three are so indissolubly bound together, it is impossible to isolate one from the other or disconnect them.
At the moment, the Reagan administration has been caught red-handed in an obvious act of piracy. This is so patently clear that even an ultrarightist like Senator Barry Goldwater (R-Ariz.) had to disassociate himself from the administration, while his not much milder counterpart on the Senate Intelligence Committee, Daniel Moynihan (D-N.Y.), felt obliged to resign his post on the committee in order to absolve himself of the guilt of mining Nicaraguan harbors.
But the Reagan administration, caught off guard completely by worldwide condemnation of this act of war, figures it will ride out the storm by harping ever so loudly on “the continuing upswing in the recovery.”
Reaganites hope for capitalist recovery
The capitalist recovery will save us, they are saying, notwithstanding the war in Central America, continued adventurism in the Middle East and underhanded efforts to undermine independent and sovereign African states and above all to try to wreck the national liberation struggle of the African National Congress (ANC) and Namibia’s liberation organization, SWAPO.
“If only the recovery sustains itself until after the elections, we will be saved,” so their thinking goes. “And then we will carry out the rest of our program—retrieve our predominant position in the world, speed up the arms buildup and be able to take on all our adversaries.”
The Democratic politicians are no less fearful that the ephemeral, limited capitalist recovery may continue. Uncertain about this, they began months ago to de-escalate their demagogy on the collapse of the economy. Slowly they stopped emphasizing the unemployment issue and decided to take another tack in the continuing rivalry between the two capitalist parties.
Instead of pushing hard on the unemployment issue—there are almost 11 million unemployed, at least as many partially employed, and plant closings are continuing—they have shifted their position significantly. They are now giving top billing to the federal deficit and high interest rates—issues which appeal more to the middle class than to the working class.
Also the attacks on Reaganomics have become more generalized, rarely spelling out nowadays the real hardships upon the working class and the oppressed people. Lately they have adopted a general plan to restructure the smokestack industries, bring in high tech more vigorously, and put the economy on a new footing. The whole thing is so vague and so ambiguous that hardly anyone among workers could find the slightest ray of hope.
It’s not to be wondered at that the Wall Street banker Felix Rohatyn is the loudest in proclaiming the need for such a plan, which has also been enthusiastically supported by AFL-CIO President Lane Kirkland.
Reagan and Rockefeller together
It’s to be noted that this scheme is also endorsed by David Rockefeller, who wants to “internationalize” it to include all the Western imperialist democracies. His Trilateral Commission, which has always been anathema to the Reaganites, got a warm greeting from Reagan himself when the Trilateralists met recently in Washington. There wasn’t a peep out of the ultrarightists that Reagan, formerly the staunchest warrior against the Eastern (Trilateralist) Establishment, had such a joyful get-together with Rockefeller, who runs this supernational body of imperialist politicians, bankers and industrialists.
The capitalist politicians and the ruling class as a whole are carefully watching the course of economic development in the U.S. Masses of statistics are released daily.
All the capitalist economists, especially those from bourgeois academia, all their statisticians, all the money managers of the multibillion dollar corporations, all the Wall Street speculators big and small, watch with the keenest interest every new available statistic which may reveal a clue on the course of the economy.
Never was interest in the state of the economy as high as it is now. Never before were all the lines between Wall Street and Washington so intimately tied together.
Shouldn’t the ruling class be happy, confident that their recovery can last at least until November? But they’re not.
Otherwise why the morbid concern with every small and insignificant indicator of the direction of the economy? It’s because they don’t think it’s real, solid, substantial.
‘Overheating’—what’s that?
Almost every other day a high priest from the bourgeois economists or from the Federal Reserve Board is likely to issue one of those reassuring but nervous press releases which in substance says, “We’re fearful that the economy may be overheating.” Reagan just the other day said that he was “glad to see there are some signs of a slowdown—that’s natural and normal. It will stop the economy from overheating.”
What do they mean by an overheated economy?
It’s supposed to mean the economy is in very good shape, going great guns, but it shouldn’t go too fast. The image is that of a rider on a horse galloping at high speed who has the will and capability to slow down. It’s as easy as all that.
So why the worry, the uncertainty?
In terms of the realities of the nature of the capitalist economy, whenever the bourgeois economists talk about overheating it’s a code word for a distasteful, dangerous, if not catastrophic development. It’s not like a rider on a horse who requires only skill and experience in handling the pace of the ride.
What overheating means, if translated into real, that is Marxist, terminology, is the possibility of imminent capitalist overproduction which inevitably leads to a capitalist bust, another catastrophic crisis.
Looking at it realistically, with some 20 million unemployed or on part time, can it be said by any stretch of the imagination that what is now in progress is a normal capitalist recovery?
When there are that many unemployed, the recovery is at best extremely limited and, considering its short duration, extremely unstable. By comparison with the 1960s and 1970s, the current recovery should have absorbed between six to eight million more unemployed to have reached the level of the earlier recoveries—which themselves were fueled by wars like Viet Nam and by inflation.
This, however, hasn’t happened.
Slowdown is uncontrollable
When the bourgeois economists say they are glad there are some signs that the economy is slowing down, they’re deliberately misinterpreting what is really a classic danger sign in the evolution of the capitalist cycle of development.
The slowdown is not a planned one, contrary to the assertions of the apologists and manipulators of the capitalist economy. It is spontaneous and uncontrolled. It’s not at all like a rider deliberately slowing down the pace.
The slowdown has historically been the precursor for a financial crisis followed by an epidemic of failures and then a sharp acceleration in industrial decline, more layoffs, more plant closings, and a greater and greater accumulation of bankruptcies, consolidations and mergers.
The Reagan administration is trying to whip its economic team into manipulating the economy by alternately using artificial stimulants and depressants—the tools that are used to help an unfortunate drug addict. What it means is alternately reigniting inflationary measures and then in panic applying heavy doses of depressants that haven’t worked for the last 30 years and have all ended in catastrophic crises.
But whether these methods will work until the election is over, no one on Wall Street is willing to bet on. Beneath the aura of optimism, there suddenly comes like a flood of light the grim reality of the state of the capitalist system.
This happened just last week when one of the most powerful investment and banking combines in this country—the 134-year-old firm of Lehman Brothers, Kuhn Loeb—was forced to sell out to an even larger financial octopus, the mammoth Shearson/American Express. This development sent a quake through the entire structure of finance capital.
The Lehman Brothers shockwave
The collapse or merger of a financial banking combine has more significance than a very large industrial failure. Strains in the nervous system, the circulatory system of the anatomy of capitalism, reveal the depth of the disease in the system and are much more dangerous.
When a financial giant like Lehman Brothers, known for its so-called stability, responsibility, and above all for its high profits, either decides to sell or is swallowed by an even larger finance capitalist conglomerate it is an unmistakable sign of danger in the system as a whole.
This is especially true because there have been in the recent period several other combinations of giant financial institutions.
The financial analysts of the bourgeoisie, whenever confronted with such phenomena, almost always point to the kind of superficial aspects which avoid fundamental causes—poor management, bickering and tensions within the summits of the company, cash flow problems, momentary weak capitalization, stretching resources too thin, and so on.
In the case of Lehman Brothers, the financial analysts have found a rather unique explanation for this portentous development. Having been hard put to explain how such a stable and respectable financial conglomerate, regarded as a paragon of capitalist virtues, could suddenly fold or be swallowed by another goliath, they have hit upon this explanation.
“Partnerships,” said Michael Tushman, a professor of organizational behavior at Columbia Business School, “are essentially forms of organized anarchies.” He is quoted in an article in the New York Times (April 15, page 24, Business Section) on the projected absorption of Lehman Brothers, Kuhn Loeb by Shearson/American Express.
There you have it in a nutshell! As succinctly summarized as one could possibly ask. But what did the good professor say?
Organized anarchies—isn’t this a contradiction in terms? If it is organized then it is not anarchy. If it is chaotic and anarchic, it is not organized. What the professor is really doing is consciously or unconsciously confusing organizational form with social content.
Partnerships, like corporations or associations, are a form of capitalist economic organization. They vary in each case and the form is chosen by the capitalists for the particular purpose of the accumulation of capital—profit. The form in which the capital is organized is like the package or container for the capital. The packaging can only incidentally affect the contents, that is, the capital itself.
Chaos goes deeper than mere packaging
The chaos, the anarchy, lies not with the form, the packaging, but with the content of capitalist production. There is where the anarchy lies; there is the chaos. Its reflection in the financially most powerful combines of investment banks and insurance companies is a most dangerous sign.
No amount of changing the form, the packaging, can change the fundamental contradiction inherent in capitalist production, which arises out of the irreconcilability of private ownership with the collective organization of capitalist industry and finance.
That’s where the contradiction is. That’s where the chaos and anarchy lie. And they grow and develop independently of the will of the capitalist. No matter how attractively or conveniently a can of worms may be packaged, it cannot be turned into a can of peas.
A capitalist recovery comes now and then but is inevitably followed by economic bust. In the imperialist epoch this takes on a more aggravated character because of the artificial bolstering of inflation and militarism.
Thus we see there is no permanency or stability, even among the most powerful investment banking houses which advise and manage the big industrial corporations.
Only the overthrow of the capitalist system, only the abolition of the system that puts the means of production in the hands of an ever smaller group of multimillionaires and billionaires, can abolish this anarchy.
Abolishing this anarchy of capitalist production will also abolish capitalist wars, unemployment, racism and all the other devastating evils which the continued existence of the system perpetuates and increases.
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