Obama wins: crisis continues

As US electors were going to the polls last night, economist Keith Harvey was reminding the Cardiff Radical Socialist Forum that the course of the election campaign turned on the collapse of Lehman Brothers, the signal that the US banking system was in crisis.    

The historic election of the US's first black president will do nothing to end the wars in Iraq and Afghanistan. Nor will it put a stop to a crisis rooted in the anarchy of capitalist finance.

Keith set out the two competing views of the economy current on the left today: the first, propounded by the SWP and others, holds that capitalism has been stagnant since the end of the long boom in the 70s; in a cycle of decline hidden by a growing mountain of debt. The second, argued by Permanent Revolution and a minority of other left economists, holds that capitalism underwent a vigorous expansion throughout the 90s and early 2000s and that the present crisis is a result of the inevitable overextension that occurs in every boom, a tendency accelerated by the deregulation of the banking system.

The forum debated different views of China and its significance to the world economy. While the US will remain the hegemonic power for the foreseeable future, China has a vital role as the source of finance for speculation. Some on the left predict that the collapse of the US economy will inevitably drag down China in its wake. Keith's view was that China, in contrast, will remain a bulwark; its total exports last year only amounted to 1.5% of an 11% growth in GDP.

Only time will tell who is right. However, Keith had no doubt that the developing recession in the UK is about to have profound implications, from a huge rise in unemployment to a squeeze on pay to an even greater rate of home repossessions. Since the real impact is yet to be felt, and may be partly delayed by Labour's desire to win the next election, it is not yet possible to know where struggle will erupt. It is a period of opportunity for the left, but following a series of failed left projects and in the face of a withered labour movement, socialists will have to prove themselves in the eyes of the masses as worthy leaders of struggle.    

 However, it has never been easier to talk about the dysfunctionality of private banking and the need for an open, accountable and rational system of financing the industry and services we need.

 One of the aims of the Cardiff forum is to facilitate informed debate on the subjects of the day, not hiding differences between participants but discussing them in an open and comradely manner. It was good to see more new faces at this month's event and once again we extend the invitation to all active socialists and anarchists to participate in the next one, which will be on Wednesday 3 December, discussing the environment and in particular involving trade unions in the battle to prevent climate change.

Wed 05, November 2008 @ 12:58