Manuscripts Don't Burn continues to pillage the Guardian website today as extremely sound analysis of the financial meltdown develops. Next, blogger SocialistMike, furthering GolemXIV's analysis of the CDO tsunami with an analysis of the relentless capitalist drive for growth - what got us into this insane situation in the first place.
"Golem is right about the CDS nightmare hanging over the financial system, but doesn't touch on why we are in the crisis.
"It is because of over-production of commodities and a resulting over-extension of commercial activity and credit. Profits are great in the upturn and it is all reinvested in more machines, more warehouses and transport, more commodities and yet more profit. Soon markets become saturated as the workers producing the goods, whose wages have been held down to boost profits (trickle down etc), can no longer afford to buy what they produce and have to turn to credit, supplied by the very same growing profits of production and retail.
"We have a circuit of capital: investment, consumption, profit, reinvestment. The more profit the more loan capital is available for more credit, both to producers, distributors and consumers. The more loan capital is available the harder it is to find profit from actual production so speculation in credit and future profits starts, based on the loans that producers give to sellers, that sellers give to consumers, on what commodities and assets are expected to return in the future, etc etc. Paper money (meaning bonds, shares, futures, commercial paper etc) comes to replace and equal real money in tradeable value producing more 'profits' that need to be reinvested but with nowhere to go except back into ever higher levels of abstracted speculation in paper. But suddenly the cracks in reality can no longer be covered up. There is a dawning realisation that most of this credit will not be paid back, that it alone is supporting the whole of production and comsumption. Panic ensues.
"Crises are always caused by the same thing - an unequal distribution of the proceeds leads to over production relative to consumption as each capitalist and investor seeks the hightest profit for themselves in a reducing sphere of opportunity.
"Capitalism forces all of us - bosses and workers - to dance to its tune. There is no choice for a capitalist in an upturn - they must competitively reinvest for greater profit or be eaten alive thereby bringing on the crisis - or a downturn - their capital is tied up in unsold commodities and credit is suddenly unavailable from the banks so there are firesales and firings, cutbacks and economies all contibuting furhter to the crisis.
"They must act as a herd; there is no room for reason and objectivity at any stage of the capitalist process of production for any of those involved in it, which is everyone."
Manuscripts Don't Burn has constantly argued against our society being structured for the benefit of the economy (as a mathematical construct) rather than for the benefit of its members - which invariably leads to the nonsense we see today. As Gandhi famously said, what's so great about growth anyway? Growth is the mantra of late Imperialist capitalism, and it needs to be exposed for the hollow, inhuman dogma it is. In its drive for ever greater "efficiency", more and more people are laid off, fewer people are asked to do more work, prices are cut, and eventually no one can afford the goods they are producing. Hey presto - 2008, and people are buying their food on credit cards.
Manuscripts Don't Burn notes the increasing howls of anger and outrage from around the world as the powers that be stuff their pockets and jump the sinking ship whilst the rest of us are left to drown. We also note the increasing polarization into extreme left and extreme right in public opinion - so wearyingly familiar. Dumbing down the education system so that no one knows their history may make people easier to control, but it does mean we just keep on making the same old mistakes.
Manuscripts Don't Burn can see no option other than a re-creation of the labor movement, with all the government oppression, thuggery, and violence that entails. The labor movement and union power was not created because it was "just", "right" or "cool" - it was created because people were starving and the rich-sponsored police clubbed down anyone who complained. Tony Benn once lauded our system for being able to change government without there being blood on the streets: Manuscripts Don't Burn fears those days are over, and agitation and mobilization is the only way out. Every now and then it behoves a generation to fight for the lives of those still to come; Manuscripts Don't Burn had hoped to get through without it happening to us. Sadly, it doesn't look like that's going to happen.