Editorial - Into the Abyss

by Ian Griffiths, February 2009

In our document of autumn 2008 - What is Happening? - we laid the foundations of all subsequent analysis regarding capitalism in its crisis.

In this sense What is Happening? serves as a 'runway' from which to provide a more detailed understanding of the elements we have identified and an explanation and study of the further events of this crisis as they unfold.

There now can be no doubt that, in economic terms, we are living in the most interesting times. In terms of political and social developments we are about to witness an acceleration and explosion of happenings, initiatives, actions and events that will burn deeply into the psyche of the masses and, over time, transform their consciousness. There is the whiff of revolutionary stirring in the air.

Since the 1970s there have been a series of economic downturns and failures that have prompted some of those who are opposed to capitalism to hopefully yet recklessly announce the end failure of the system itself. Such thinking was and still is dangerously naive. It always underestimated and misunderstood the resilience of capitalism and the reserves and instruments previously available for policy makers to initiate change and thereby buy time.

The end of the system can only be announced when it has been super-ceded by a viable and acceptable alternative economy based, in our opinion, on firstly the democratic ownership, administration and planning of production and finance and secondly the equitable distribution of its product decided by paramount need.

That being said, this time things are decidedly different. As the world's leaders contemplate 'quantitative easing' - put simply the printing and strategic distribution of 'new' money without any underpinning relationship to value - it is clear that their store of economic fat is wasted, that they have eaten through their muscle and we are down to the bare bones of existence.

Previously, as stated, recessions - and indeed the Great Depression - were limited to certain sectors of the world economy and certain geographical locations whilst other areas prospered. It was these prospering areas which kept the the whole ship afloat, taking over as the engine of recovery in the short term. Now it is evident that the crisis is global and the whole structure of production and distribution has faltered.

Despite Gordon Brown's deluded megalomania he has done nothing that has "..saved the world" and, short of contact by an unusual life form on another planet, no other 'superhero' is destined to fly to capitalism's rescue.

I opened 'What is Happening?' with the assertion that this crisis will define the twenty first century as much as the Great Depression determined the events that developed in its wake.

Martin Wolfe, the influential Financial Times' economic correspondent, seems to agree stating that, "We are living on the cusp of history" (F. Times 04/02/09) and most commentators concur that the world economy is lost in "uncharted territory".

What such comments express is that the collective strategists of global capital have lost their grip on events, their understanding of developments and, with unprecedented unanimity, their confidence has vaporised. This was the mood emanating from this year's Davos gathering of 'the great and the good' of capitalism.

In unison, the world's exploiting class have declared they have one more throw of the dice, the constructed mystique of Barack Obama and his Rooseveltian New Deal.

Over recent weeks there has been a determined over-exaggeration of the effectiveness of one policy initiative after another particularly, as we explained, the monetary fuel injections applied to the banking system as attempts to stimulate credit lines. Equally, fiscal policy decisions and interest rate cuts have had no significant short term influence on the downward world trajectory. In reality it will continue to be a case of 'all roads leading to Rome' (Nero's) rather than Washington (Obama's).

The likelihood is that the presidential rescue package will fail if it does not result in firstly short term and then sustained consumer demand in a volume equal to that which preceded this crisis - the only market solution to the market economy's crash.

This is the economic reality of the world of 2009. In a series of articles that will follow we will try to develop a perspective for the likely direction of the world economy and world politics as determined by the policies enacted in each geographical region of influence - North America, Europe, Eurasia and the Far East.

We will hope to provide an expanding account of individual nations and the political events and social movements that will explode onto our screens as the year progresses.

For a small group we have made an impressive start in identifying problems and predicting events;

In Britain we anticipated the rapid contraction of the car industry, the collapse of high street retailing, the dispute which arose in the sub-contract/migrant worker section with its underlying racial tensions and, following the Children's Society report 'A Good Childhood' (Feb. 2009), the social problems created as a consequence of rampant 'individualism'.

In the broader world we warned of India/Pakistan tension, French fear of revolution as expressed by Finance Minister Christine Lagarde at Davos, French hostility to Brown's fiscal and economic measures, rising protectionism, a deepening world banking debt crisis and sovereign economic failure as shown in Iceland with more states set to follow suit.

If you want to be part of this reporting and analysis and wish to prepare the ground for real change and a better world please contact us at the address or telephone number provided. We particularly welcome international contributions and contacts.

Red Writings © 2009