The coming great depression

April 19, 2015

 

The following is a resolution proposed at a Chicago conference of the Communist Party’s Unemployed Councils in 1930, in the context of the Great Depression:

 

"The basic cause of this mass unemployment is the fact that the workers receive as wages only a fraction of the value they create, and cannot buy back their product. Hence vast quantities of commodities are left in the hands of the capitalists which they, despite their luxury and myriads of hangers-on, cannot consume or find markets for. Thus ensues “over-production,” shutdown of industry, and mass unemployment. The capitalists cannot make profits; therefore, they make the workers starve.

 

"In its period of rapid growth and development [in the nineteenth century] capitalism was able to overcome these periodic crises by temporary shutdown of industry, by more intense exploitation of the home markets, and by the extension of foreign trade. But now the periods of crisis become longer and longer, and the periods of industrial activity shorter and shorter.

 

"With the huge development of industry in many countries; with more intense international competition and shrinkage of the colonial markets; with the tremendous speeding up of the workers and mechanization of industries, which constantly throws more workers out of jobs; with the driving of millions of farmers and farm workers from the farms by the industrial crisis into the cities where they search in vain for work—the capitalist crisis daily deepens [and] “overproduction” grows constantly, with a gigantic, permanent mass unemployment.

 

"The productive capacity of capitalist industry thus hopelessly outruns the power of capitalist markets to buy. And this basic contradiction, fatal to capitalism, must go on intensifying itself so long as capitalism lasts, with increasing unemployment, hardships and misery for the workers. The world capitalist system is in a state of the deepest crisis."

 

Sound familiar? Aside from the dated talk of colonial markets, this analysis applies almost perfectly to the present. Workers in the meatpacking industry, for example, can tell you about the barbarism of the “speed-up”; workers and even economists can tell you about how automation is throwing people out of jobs. Mass purchasing power thereby decreases, which shrinks markets, which threatens profits and so forces capitalists to cut costs, which they do by cutting wages and investing in automation, which continues the vicious circle. Overextended credit can keep the economy going for awhile, but, as we saw in 2008, a day of reckoning has to come sooner or later. Then the government bails the system out and sets it in motion again—so that another collapse can happen, etc. This cycle can’t last forever, as mass unemployment (and insecure employment) grows and revolutionary movements spread.

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