The huge bubbles of speculative investment in housing, InfoTech, petroleum products and others sectors have now burst
After the 2008 crash of the world economy, there was an unprecedented turbulence in the world markets and economies. In the advanced capitalist economies most regimes, social-democratic or conservative, carried through severe austerity and cuts that started the process of dismantling the welfare state, mainly in Europe. All those gains achieved through intense struggle by the working classes of these countries were being reversed. Still the US and European economies could not come out of the recession after five years of brutal recipes to put the burden of the crisis of capitalism onto the shoulders of the working masses. There is a seething revulsion against the ruling classes. A popular catchphrase doing the rounds in Europe say it all: “Bankers are slightly less popular than paedophiles and serial killers.”
The BRICS (Brazil, Russia, India, China and South Africa) countries, the so-called emerging economies that were expected to give a new lease of life to capitalism with high growth rates, have failed to do so. Their growth rates shrank and the nature of the socioeconomic development in these countries, where the tasks of the bourgeois revolution have not been accomplished, have resulted in severe social contradictions that have now begun to explode on the political plane. Instability, uncertainty and disillusionment are now stalking these lands. The eruption of mass revolts from Turkey to Brazil are thus not accidental. They reflect a growing discontent and a sense of revulsion amongst the masses who are being inflicted by the severe trauma of this crisis that is crushing their livelihood.
It seems as if happiness has become elusive for the ordinary people in the advanced capitalist countries, not to speak of the oppressed working classes of the underdeveloped world.
After the Second World War, even if the revolutions were defeated in several European countries mainly due to the betrayals of the leaders of the Social Democratic and Communist parties, yet the upswing enabled these traditional leaders of the mass organisations to carry out reforms. Reforms are always introduced from above to stop revolution from below, but at least at that stage capitalism in the developed countries had the capacity to create a social welfare state. In Britain, education became free and the Labour Party introduced a health system where even foreign visitors could get treatment at a minimal cost.
People had hope for a better future and that created a blissful atmosphere and relatively prosperous societies. Now that optimism in life in Europe seems to have evaporated. People have lost hope in a future that promises only a grim life. A social malaise has set in. It is astonishing that this situation has developed in the aftermath of the collapse of the USSR, Eastern European Socialism and the capitalist restoration in China. After these events the bourgeoisie gained access to a huge market of more than two billion. At that time in the end of the 1980s and the beginning of the 1990s, there was euphoria amongst the strategists of capital. The bourgeoisie on a world scale were dizzy with success. Yet it has turned out to be a hoax.
Dialectally it turned into its opposite and today we see capitalism mired in its most severe crisis, unprecedented in its 200-years history. This exposes the historical redundancy and the organic sickness of capitalism. Even with such a massive expansion of the market, it has failed to develop society and improve the living standards of the working class even in the advanced countries. The growth we saw in the last 20 to 30 years was through a greater labour intensive mechanism where all or most members of the household were working, many workers working overtime and of course, a gigantic expansion of credit.
The huge bubbles of speculative investment in housing, InfoTech, petroleum products and others sectors have now burst. But what triggered the crash of 2008 was the overextension of credit that accumulated in the corporate sector and through personal loans in the previous three decades. The banking default in 2007 led to the sovereign default in 2010. Ever since the economies of most European countries and the US have been reeling from a chronic crisis with no end in sight.
According to the Financial Times, it could take at least 20 years to solve the European crisis! It goes on to say, “Europe raises the spectre of an ungovernable world.” The usually boastful The Economist had to concede, “The way to recovery is long and dark.” If these most staunch strategists and spokespersons of capitalism are in such gloom, the reality of this system’s recovery must be much starker.
In the immediate aftermath of the 2008 crash, there was a sense of shock amongst the workers of the advanced capitalist countries. However, as various regimes embarked upon severe austerity programmes, retaliation began to emerge from the workers and the youth. The revolution in Tunisia that ignited the Arab revolution in the spring of 2011 took its inspiration from the mass demonstrations and protests in France in the autumn of 2010. The lightning strikes of the students in Britain in December of that year also had a huge impact on the youth, especially in Egypt. After the Arab Spring we saw the European summer with mass protests not seen in two decades in most countries of Europe. Then we saw the American Autumn with the sudden rise of the Occupy Wall Street Movement in the US with huge implications worldwide.
These movements also had important repercussions on the political plane. After 19 general strikes we saw the collapse of the traditional political party of the workers in Greece, PASOK. The meteoric rise of SYRIZA in Greece also shows that the working classes at a certain point can overcome the burden of their traditions and move ahead to a more radical solution.