Rudd’s message: all power to the casino capitalists
Posted by Leonie, July 26th, 2009 - under ALP, Australia, Australian Labor Party, Australian politics, Casino capitalism, Economic crisis, Economics, Kevin Rudd, Labor Party, Labour theory of value, Marxism, Rudd, Rudd Government, Rudd Labor.
Kevin Rudd spent over 6000 words in the Fairfax press giving us a simple message.
Everything will go up, except for wages. The working class will pay for the crisis of capitalism.
Interest rates will rise, fuel prices will rise, food prices will rise, unemployment will rise. All of it is disguised in spin about ‘the decade of nation building’ and attacks on extreme capitalism (whatever that is) and neoliberalism.
But Rudd is a neoliberal, or fiscal conservative as he calls it.
His neoliberal economic strategy is simple; government spending increases during recessions and is cut during recovery.
For that reason the next Budget is likely to be a shocker – to supposedly free up the market to boost the recovery. In other words workers are to pay for the crisis.
The premise is that recessions are temporary aberrations which Government spending can address and that the market is the best vehicle for economic development and satisfying human need. Neither are true.
Rudd appears not to understand the business cycle (an idea Marx developed and which most economists and politicians now accept.)
Because capitalism is undemocratic and unplanned investment pours into profitable areas and there is overproduction or over-stimulation. This depresses profits and demand and recession develops.
Over time the system can correct itself, but at great cost to working people.
But Marx went further. He understood another consequence of the way capitalism is organised, what he called the tendency of the rate of profit to fall.
Labour creates profit, not capital. Yet competition forces capitalists to invest more and more in machinery and the like. This means that profit rates decline unless other factors like the destruction of capital, or falls in employment and living standards, and increases in working hours and productivity occur.
Profit rates for the last generation have been low in the productive areas of capital where value is produced. This real economy is manufacturing, mines and the like.
Profits boomed in the casino of capitalism - the finance sector and stock exchange.
But that boom was unsustainable if it was not underpinned by booming profits in the productive sector. And it wasn’t.
The present ‘green shoots’ are the same. They appear to be based on a boom in the casino sector, not productive capital. Certainly confidence is returning to banking and the stock market.
But without a return to profitability in the productive sections of society a gambling boom is unsustainable.
Stimulus packages don’t address or improve long term low profit rates. Driving down living standards and destroying capital can.
Rudd’s nation building is an attempt to build up infrastructure.
After 11 years of neglect that might help at the margins. But it does nothing per se to restore profit rates.
Having transport facilities to expedite exports won’t work if the demand for exports fall.
So Rudd falls back on rhetoric. Evidently the problem is extreme capitalism. It is unclear what this means.
All capitalism is extreme – it is a form of slavery in which capitalists expropriate the value workers make.
If by extreme capitalism Rudd means unregulated profit making, then he condemns himself.
It is ‘extreme’ capitalism that he perceives will step in to save the economy as the government reduces its ‘interference’ in the markets when the recovery, he hopes, strengthens. He is making space for the cowboys to ride again.
Rudd is going to hand back complete control to the casino capitalists and attack workers. What a great strategy for further disaster.