The Agony of Capitalism in the Production and Currency Crises, 1979

The Agony of Capitalism in the Production and Currency Crises, 1979
International Communist Party
On Marxist Economics
The Agony of Capitalism in the Production and Currency Crises
Reports submitted to the May and September 1978 and January 1979 meetings
[RG11, RG12, RG13]
(
Comunismo
, No. 1, 1979)
In the first 1968 issue of our then organ of the press,
Il
Programma
Comunista
, we headlined with obstinate
scientific stubbornness:
Monetary Crisis – World Capitalist
Crisis
, and in May of the same year:
The Bourgeois Myths of
Prosperity Collapse
. The experience of the following decade
confirmed that diagnosis. The usual cyclical alternation of capitalist
accumulation, of phases of greater momentum with periods of stagnation
in production and trade, has been repeated in these years in the various
industrialised countries, marking, however, deeper crises, greater
recessions in the volumes produced and shorter-lived recoveries with
oscillations around an average tendency of slowing down to almost a
standstill in the growth of the mass of capital in operation.
A period of overwhelming development of imperialism has definitively
come to an end: from the end of the war, and precisely thanks to its
immense destruction, until the crisis of 1975, the capitalist monster
enjoyed three decades in which the machine of industry swelled, crushed
formerly colonial nations and corrupted the western proletariat. The
mass of products grew, by 4.6 times in Germany, even though halved, likewise in America, in Japan even by 11 times. There has been a repetition, on a
magnified scale, of the capitalist expansive momentum, with robust and
prolonged productive upturns and barely noticeable slowdowns, as Europe
experienced from the Franco-German War of 1870 to the crisis of the
early years of the century, also then three decades of accumulation,
of bourgeois enrichment, without wars at home, of corruption of the working class
and of opportunist influence on the proletarian party and organisation.
Today, this phase of ‘opulent’ capitalism, in which the enemy
ideologies of social pacifism, reformism, inter-class collaboration,
gradualism and revolutionary progressivism can penetrate the
proletariat, is irreversibly closed. Neither the demagogy of the
regime’s official ideologues nor the obscene patches of opportunist
propaganda based on planning and participation will be able to
resuscitate the exhausted capitalist momentum.
World imperialist capitalism enters the period of crises, in which
the ineliminable fall in the profit rate and the accumulated
disproportion between production and consumption is being meted out.
Seventy years later, capital has once again reached its ‘critical mass’,
it is too swollen to be profitably employed in its productive
metamorphosis, the merchant-owner form of wealth is unable to satisfy
social needs to the extent it previously did, indeed, for the future
resumption of production, it requires the violent destruction, outside
of the circuit and laws of the market and capital, of the unwieldy
surplus of unsold goods, money capital and unused means of
production.
Capital is misery and destruction
The impossibility for capitalism of a non-traumatic and continuous
development, the absurdity, demonstrated in theory by our school and
verified by historical experience, of the perpetuation of the
accumulation process stems from the intimate contradiction inherent in
the dual nature of commodities, a contradiction rendered pure and
generalised to the point of the critical explosion of the capitalist
mode of social production.
While the production of profit is by its very nature without measure
and tends to increase independently of the quantity and quality of
social needs, the scale of social consumption capable of compensating
for the value of goods is shrinking ever more precisely as a result of
and in parallel with the increased scale of commodity production. On the
one hand, a huge industry grows according to its own laws and rhythms
devoid of any possibility of control and planning, on the other hand,
the proletarianisation of all social strata spreads, with the ratio of
final consumption to the mass of capital in motion shrinking inexorably.
Although the size of consumption has historically tended to increase,
albeit slowly, enormous is the dead capital looming over society. And as
capital grows and becomes more concentrated, and as it becomes
increasingly detached in anonymous forms, its state apparatus of
political management swells monstrously, flanked by the top
representatives of big industry and big finance.
The apparent prosperity of the past decades was a fleeting
manifestation, well exploited by the regime’s incense-burners,
characteristic of only one phase of the cycle, paid for by the enormous
increase in productivity and duration of work in the factories and by
the systematic robbery and slow starvation of the populations of entire
continents by the imperialist power stations.
But not even the ‘consumer society’ has been able, nor will it ever
be able to realise the fantastically growing value of the commodities
vomited onto the market. It is a reactionary utopia to expect capital to
survive by extending consumption. Production and sales, proceeding at
top speed, continue in all spheres of production and on all marketplaces
when the retail market can no longer absorb new goods. At this point the
commercial crisis is triggered, panic in the bourgeois class, prices
collapse and reproduction comes to a standstill. Narrow individual
consumption, further reduced by falling wages and employment and the
lower incomes of the bourgeois, petit-bourgeois, professional and
intellectual classes, could never absorb the exponential growth of
production.
After all, large and growing shares of the capitalist production of
the most industrialised countries do not find final consumption at home
but on the world market, which is very sensitive to price and economic
fluctuations. At the end of the period of prosperity, capital has filled
all pores of ‘solvent consumption’ to the maximum.
By its own internal law, the organic composition of capital grows
along with the increase in its total mass: the technical improvement of
the production process implies the increase in the mass and value of
machines and plants, like that of the raw material processed, and the
mass of labour needed to set them in motion is reduced. The value of
wages, on the other hand, is reduced by the reduction in the value of
the proletariat’s means of subsistence due to the increase in
productivity in the sectors that produce them. The mass of total wages
paid, variable capital, becomes a decreasing fraction of total capital.
The increase in the exploitation of the proletariat, necessarily limited
to the natural duration of the working day, does not compensate capital
for the enormous and potentially infinite increase in its organic
composition, the gigantic apparatuses set in motion by the individual
worker. The result is the reduction in the rate of profit, already
denied by legions of well-paid university theorists, and which today
imposes itself with the obvious drama of crises.
Competition between capitals is exacerbated, growing portions of
capital cannot profitably invest in means of production and
labour-power, they cannot continue their metamorphosis and in monetary
form, they roam the financial markets of the entire world, driven here
and there by even the smallest differentials in exchange rates, in
interest rates, manoeuvred by speculation. There is overproduction of
capital, before that of commodities.
But capital can only reproduce itself by keeping the mass of profit
constant, by intensifying the exploitation of the proletariat through
the application of science to material production, only if it can extend
the scale of its reproduction to all branches and all continents. The
contraction of production cannot therefore be planned and contained
within the continuity of the economic regime, it cannot be subject to
the same laws of general accumulation, it can only manifest itself in a
catastrophic manner, inducing a general regression of society, a modern
imposed artificial and temporary barbarism, where the myths that until
yesterday had been smuggled in as eternal are suddenly overturned into
their opposite.
In the current imperialistic phase of decrepit capitalism, when all
regions of the globe have been subjected to the plunder of a few wealthy
countries, all markets are saturated with goods, and each national
capitalism seeks to export its overproduction of goods, unemployment,
and inflation onto the others, the outcome can only be the violent
resolution, through direct confrontation of military forces, of the
otherwise unresolvable conflicts of interests. Only through war, as
already at the height of the period of capitalist stagnation between the
two world wars, after the crisis of 1929-33, with the destruction of a
large part of the accumulated social capital, of the means of
production, and with the new needs that destruction imposes, can the
impetus towards a new division of spheres of influence, towards the
general renewal of fixed capital, towards new accumulation, new
employment and super-exploitation, new waves of migration, consumption,
‘prosperity’, be diabolically regenerated.
Premonitory tremors
The international concordance of production trends over the last
decade is so obvious that it is possible to describe in a single
alternation the different moments of capitalist stagnation around the
world.
Broadly speaking, the oscillating curve of industrial production
shows three marked and common downturns: in the winter of 1970-71, in
the winter of 1974-75 and in the winter of 1977-78. There is
international agreement in the convulsions of accumulation not only in
terms of the temporal synchronism of the cycle, but also in the
magnitude of the perturbations: the first of the three recessions,
measured as a regression on the average calendar year basis, marks a
recession in the USA but only a sharp and marked slowdown in European
capitalisms and Japan. We find negative values of quarterly rates of
increase on an annual basis, with lows ranging from -6% in the US to +3%
in France.
Far more sudden and profound for all capitalisms was the crisis of
1975 that shattered the myths of indefinite growth and reminded
economists and the bourgeoisie of the spectre of 1929. In the first
quarter of 1975 Japan contracted its industrial production by 20%, which
meant -10% on an annual average, which followed another -4% in 1974. The
halt in production occurs with relative speed: it goes from an
accumulation rate of 16% to the predicted low within 16 months.
Stagnation on this low production scale lasted for about a year, only
beginning to show signs of recovery from the bottom at the beginning of
1976. Almost the same productive trend was maintained by the United
States, limiting the quarterly minimum of the recession to -11%,
demonstrating that in the capitalist crisis, those who have accumulated
and overproduced the most collapse the most: it is a crisis of too much
capitalist industrialism, not of scarce ‘productive investments’ or
‘structural backwardness’, nor of ‘constraints’ on the freedom of
enterprise. European capitalisms exhibit the same timing and similar
dimensions in regressions.
The subsequent unfolding marked recovery everywhere. But, while US
capitalism managed to stabilise its growth at an annual rate of around
5% (which makes us anticipate the next deeper crisis), recession
returned to hold back accumulation in Europe and Japan where quarterly
values fell to -1% in Japan in September 1977, to -8% in Italy in
mid-winter and to values around zero for the other industrialisms in the
following spring.
Thus, a reduction in the duration of the industrial cycle emerges.
More than a century of American capitalism demonstrates the constant
repetition of two series of overlapping cycles. In the United States
from 1873 to 1970, the roughly ten-year cycle already recognised by Marx
and Engels is well marked, with eight regular periods between 10 and 14
years. These are interspersed with other, more frequent periodic
recessions, spaced about four years apart and usually occurring twice
per ten-year cycle.
A similar tendency of alternating trends is demonstrable in the
accumulation of other national capitalisms, although the temporal
coherence of cycles only occurs at historical turning points of general
crisis of the system. One of these was the immediate post-war period
with the world crises of 1919 and 1921, another famous one from 1929 to
1933. In this post-war period, there was no shortage of stagnations and
even productive recessions, but they were short-lived and always
occurred out of phase in time from one country to another so that it was
always possible for world capitalism as a whole to mitigate the impact
of the recession by offsetting imbalances in the world market for goods,
capital and labour. Today, cyclicality is in phase everywhere, precisely
because capital flows have been settling for thirty years, and the
interest of each national capital does not integrate but collides and
contends for space with the other.
In the last few months, industrial production in all capitalistically
mature countries has tended to increase, managing to exceed the highs of
1973-74: in four/five years, the self-surpassing amounts to only 4-5%
for European capital, except for the UK, which is stagnating, and for
Japan, while it is 13% for the US.
The most recent production indices would indicate that a new maximum
in capitalist expansionary speed has already been reached with these
values and would mean that 1979 could bring a new period of
deceleration. In January, Japanese industrial production recorded the
lowest growth rate since last August, in Italy the annual rates measured
in December and January are half those of the previous months, while the
Federal Republic of Germany announces zero growth in January compared to
the previous year, and the contribution of the steelworkers’ strike is
to be seen.
Inflation chastises dirigisme
The sharp rise in the inflation rate well above the average values
maintained throughout this post-war period dates back to the early
1970s, thus preceding and not following the 120% increase in oil prices
in the autumn of 1973 and a further tripling on 1 January 1974. The rise
in consumer prices had already begun in March 1973 in France, as early
as 1970 in the Federal Republic, and since April 1972 in Italy. The rise
in crude oil prices is therefore rather to be seen as a reaction to the
depreciation of the dollar on the world market, aimed at defending the
payment of value in real terms to the producing countries. Since then,
the price was kept constant in real terms until 1976 and then declined
slightly due to declining demand from consumer countries.
Inflation galloped to more than 20% per year at retail level in
Japan, Great Britain and Italy, to more than 10% in the USA and France.
Strong inflation persisted until the 1975 crisis fully unfolded.
Generally speaking, in all countries a production recession is followed
by a retreat of inflation, but there is no direct correlation between
production levels and inflation. In the year just gone, the world’s
major currencies experienced a stabilisation in the pace of
depreciation, but settled at very different inflation rates: from 12%
per annum in Italy to the German minimum of 2%. This relative
stationarity of inflation is, however, belied by the most recent price
measurements, which would indicate a beginning of an upward recovery in
changes: the February data for the United States, Great Britain and more
markedly Italy, and the December and January data for the FRG indicate
an upward trend.
The inflationary excess of the last decade can be explained by the
issuance of paper money by governments committed to interventionist
support of an economy that is tending toward decline: inflation is the
economic system’s reaction to the forcing that one would like to impose
on it, a reaction by which the laws of the market come back into
play.
In
Capital
, Marx comprehensively frames the phenomenon of
price variation, which under a monetary regime of forced circulation
(i.e. fiat money Ed.), does not depend on variations in the value of
commodities or accidental fluctuations in the relationship between
supply and demand, resulting in an automatic adjustment of the socially
conventional value of the mass of paper money circulating in a market
according to the total value effectively demanded and accepted to
compensate for transactions and payments and which is actually in
operation as such: the mass of exchanged value defines the value of the
mass of circulating paper money; its only measure is the actual
recognition of value that is made for and in circulation. Unlike gold
money, or money exchangeable for gold in a fixed proportion, a commodity
before it is money, state paper is a commodity only and to the exact
extent that it is recognised and functions as such. If a general
contraction of trades or their slower progress, or an excessively loose
operation of the presses alters the numerical ratio between paper
bearers and commodity bearers, it is the market itself that
re-establishes equilibrium with a general alteration of the price
scale.
On the capitalist market, not only are commodities destined for
consumption exchanged against income in money form, but, to a
predominant extent, means of production against capital in money form.
The crisis influences inflation in two opposing ways: on the one hand,
the mass of money capital in paper form swells and cannot be hoarded
without serious risk for the money capitalist, while the circulation of
commodities and the velocity of money changing hands collapses; on the
other hand, the oversupply of unsold commodities tends to produce a
collapse in prices due to competition. In the crises of this decade, the
markets have not yet become so flooded with unsaleable goods that a
tendency towards deflation prevails. In this case the reference
commodity can only be gold: if the price of commodities remains constant
in relation to gold we are evidently, as is the recent case, in the
presence of inflation due to an alteration of the price scale, due to
changes in paper signs alone; when instead the price of gold rises
alongside general deflation it will be the time for the more general
crisis of mistrust, a traumatic precipitation of the crisis of
overproduction.
Today, the mass of wandering capital in search of investment at
remunerative rates is increasing at a very fast pace, with a marked
acceleration in 1978: the size of capital borrowed on the Euromarket
rose from 63 billion dollars in 1976 to 69 billion in 1977 to 51 billion
in the first quarter of 1978 alone. These huge sums of money came
largely from the US trade balance deficit, which from the winter of 1976
to the summer of 1978 went from an annual surplus of 10 billion to a
deficit of 33 billion. It is the sign of the end of American dominance
as a trading power, closely pursued by its more productive Japanese and
German competitors. US imperialism compensates for the trade deficit
with massive exports of its own green currency. Even if, compared to the
American domestic product, this shortfall represents only a few
percentage units, the inflationary effect on world markets is
decisive.
New competitors are emerging for US capital: last month, for the
first time in history, German exports surpassed American exports in
quantity, an event long predicted by the party, signifying the great
expansive capacities of the capital of halved Germany. On the other
hand, as far as capital exports are concerned, it is Japan that is
increasing its share of the whole, at the expense of the US share, while
the share of European capital investing itself in the US is growing, and
Japan already invests a third of its foreign capital in America, thus
having those goods produced there that protectionist barriers would
prevent from exporting.
The insecurity of money capitalists to invest because of the risk of
zero profits or even loss of capital that the crisis entails is such
that while everyone seeks to invest their capital, perhaps at low rates,
but on a short-term basis, the supply of long-term loans is becoming
scarce and the state-entrepreneurs themselves are finding it difficult
to invest their ‘residual liabilities’ in projects with a ten-year
turnover. The banking intermediation thus finds itself, as in all
periods of crisis, including the classic 1929 crisis, collecting
short-term capital while its own capital is already tied up for many
years. A state of great rigidity is created which, if at first it is
capitalism’s resource for ‘inventing’ a willingness to invest, in
reality it is non-existent and not justified by the most reasonable
forecasts and thus delaying the recession, then, when the reality of the
capital surplus imposes itself, it is the trigger and amplification of
the banking meltdown, of the financial crash. We await the phenomenon,
not attenuated but generalised by the ever closer connection and
centralisation of credit institutions with each other and with the
issuing institutions and the government treasury.
Exchange rate fluctuations as bulletins in the trade war
The reflection of the heterogeneity of the development or regression
of the various national capitalisms can be seen in the incoercible
fluctuation of currency exchange rates. In part, this phenomenon is due
to the linking of monetary systems with different inflation rates, so
that the exchange rate variation merely reflects the real depreciation
of one currency against the other, measured on the basis of a series of
the same commodities. The fact remains, however, that the exchange rate
is influenced not only by the movement of goods but also by capital
flows, by the different rates of profit from one country to another,
i.e. by the varying levels of development of the productive forces and
by the different degrees of subjection of the proletariat to
exploitation. The exchange rate can also be voluntarily altered by the
massive movement of a money supply from one market to another and by the
psychological amplification that results.
All epochs of capitalist crisis also mark the alteration of the old
monetary parities. On the world market, the use of gold currency has
continued far longer than within individual national markets, even to
this day for the balance of trade with the Eastern countries. Gold was
in fact for a long time the only authority superior to that of
individual states and recognised by capitalists and merchants: gold is a
commodity and as such has value in itself. It is the result of
imperialistic maturation that the currency of dominant capitalism has
also established itself in international trade. And with the military
victory and American economic and political preponderance, the dollar
can replace the once-dominant pound sterling on the markets: the basis
of the dollar’s authority is the treasury’s gold reserves but also the
power of its navy and army.
However, the process of corrosion of the dollar’s value is
contemporaneous with its domination of the markets and is openly
manifested with the end of the fixed exchange rate regime: it is a
continuous process, accelerated over the last ten years. The speed of
depreciation of the American currency exceeds the natural differential
between domestic inflation and the average devaluation in competitor
countries. The result is:
1) a continuous depreciation of US exported goods and an increase in
imported goods;
2) a devaluation of America’s huge debts: in effect, the US obtains
loans from all over the world at negative rates, returning devalued
paper upon payment.
As a first reaction to these phenomena, the dollar has lost its
authority where the permanence of the value it represented is
indispensable, i.e. as a reserve currency. The gold reserves of central
banks are still considerable (75% in France, 40% in the FRG). But as a
means of payment the dollar remains the absolutely dominant currency:
bad money drives out good money, with all holders of money trying to get
rid of dollars, rather than marks, yen or gold.
The utopia of the ultra-currency
The capitalistic necessity of the continuous expansion of exchanges
on the world market, in a regime of (now impossible) stable monetary
circulation, led the lesser capitalisms to search for a monetary
alternative to the declining dollar, a more ‘neutral’ unit, which would
avoid the disruptions induced by the dollar’s fluctuating course and its
speculative flows manoeuvred by American financiers. The other
imperialisms, in their impotence and mutual disagreement over the
imposition of a second currency on the world market, have on several
occasions started multilateral, regional negotiations and initiated
experiments for the common issue and control of conventional means of
payment. Such common institutions should have been the monetary crowning
glory of the ultra-imperialist philosophy of peaceful coexistence
between competing capitalisms, a reactionary and utopian myth that will
prove to be definitively so as the clash of capitals intensifies,
markets close, and protectionism begins, but which the world bourgeoisie
has failed to initiate even in its heyday.
The monetary crisis is only one aspect of the crisis of accumulation
and the tensions that arise between the different partitions of world
capital. Any monetary arrangement is destined to have a very short-lived
life due to the continuous chaotic bubbling of production and trade, the
overturning of interests and flows of goods and capital.
The first formulation of a monetary arrangement was that of the
International Monetary Fund, which issued the ‘Special Drawing Rights’.
Since the official abolition of the gold price, SDRs have a daily
quotation resulting from a weighted average of the exchange rates of the
16 major currencies weighted according to their participation in world
trade. Originally, the authority of the new ‘unit of account’ was
derived from the Fund’s gold reserves contributed to it by the various
participating countries. This collateral meant that the SDRs acted as a
currency and also as a reserve, albeit in the modest proportion of 3% of
the total and still a long way from replacing dollars as a means of
payment or even as a unit of account for prices. The project’s failure
can be traced back to sabotage by the United States, which frowns upon a
competitor to its currency. The spread of dollars on the European and
Japanese markets, a currency imposed on the debtors of the USA, has
further reduced the space for SDRs.
More recently, under pressure from America, the IMF even proceeded to
sell the gold in its possession, so that its price would be lowered
against the dollar, but officially in the name of definitively
surpassing the ancient yellow metal as a monetary instrument. It is
unthinkable that the greatest imperialist power would consent to its
currency being dethroned, let alone favouring the emergence of another
artificial, consensual, mathematically averaged currency with
‘collegial’ management, thus renouncing such a lever for control over
financial flows and for the blackmail of competitors. The USA gained its
brigand-like dominance over the world by force of arms in a victorious
world war, against precisely Japan and Germany, and by demonstrating the
overtaking of allied Great Britain by the old colony. The imperialist
system in crisis will not peacefully find a new monetary arrangement,
just as it will not achieve a stable trade structure through diplomatic
agreements. The exhaustion of the capitalist cycle requires, with the
elimination of the surplus of wealth that engulfs it, a confrontation of
the forces of competing imperialisms for survival, the outcome of which
can redefine world power relations.
The most recent episode in the currency war is the attempted
agreement for the ‘European Monetary System’ which, after difficult
negotiations, formally came into effect among the countries of the
economic community with the exclusion of Great Britain. Apart from the
empty phraseology about the ‘ideal values’ of Europeanism, to which, as
with Lenin, we attribute a bourgeois and reactionary character to, the
agreement is, at least as far as it can be respected, a success of the
diplomacy of German capitalism against American interests. Due to the
continuing devaluation of the dollar, German trade has found itself
progressively disadvantaged on the world market, and only due to the
greater productivity of the German productive apparatus does the
conspicuous trade surplus remain. If the FRG finds it cheaper to buy the
raw materials it needs (oil) abroad, it suffers more from competition
from foreign products, both on the domestic and third-party markets. The
FRG, the largest capitalist power in Europe, the largest trader in the
world, the country with the largest foreign exchange reserves and the
strongest currency, and commercially in surplus even with the oil
exporting countries, is also a country highly dependent on exports and
very vulnerable to exchange rate fluctuations, currently orchestrated
around the US currency. It is therefore an expression of the strength
and maturity of German capital the necessity of imposing its own
currency in international transactions.
The political weakness of the FRG, a destroyed and dismembered
nation, was explicitly imposed by the victors who forbade it to rebuild
its own army. Not unlike inter-war Germany, we are now faced with the
same monstrous productive machine, the same (only formally different)
subjugation of the proletariat and its organisations to national
interests, housed in a limited territory, squeezed between old and
competing capitalist nations, with no territories from which to extract
raw materials and no commercial outlets for surplus production. The
expansive offensive undertaken by Germany in the 1930s with the use of
military and diplomatic force is now attempted with commercial
penetration, low commodity prices and the authority of a strong
currency.
A ‘mark zone’ already exists, after all, comprising the Netherlands,
Belgium, Luxembourg, Denmark, Norway and Austria, countries whose
currencies were already linked to fixed exchange rates before the EMS
negotiations, in a single monetary and financial market. The mark also
gained confidence as a reserve currency, which already surpassed the
pound sterling in central bank treasuries in 1972 and accounted for 7-8%
of the world’s reserves in 1978 at 40 billion. Even as a means of
circulation the German currency has established itself by making up 10%
of the circulating currency, where 80% is the dollar.
But for the marks to access the world market (as for the Japanese
yen, in its ‘area’) means to clash with US capital. It is for the united
European front around the FRG and as a counterweight to American
financial dominance that Schmidt called the smaller capitalisms into the
EMS, invited to choose between the protection of the dollar and that of
the mark, with the immediate aim of slowing the revaluation of the
German currency by providing European monetary policy with the strength
of union. As is well known, this project, in itself modest in scope and
with little binding force for the participants, found, nor could it have
been otherwise, many difficulties in its elaboration due to the many and
so deep-seated conflicts that divide even neighbouring European
capitalisms. Monetary solidarity with the DM (Deutschmark Ed.) means for
countries with weak currencies such as Italy and Great Britain to
deprive themselves of the commercial advantages of continuous
devaluations, as well as to alienate good relations with the giant
across the ocean. Indeed, Great Britain has preferred to maintain
privileged relations with the USA. Italy, after the traditional waltzing
and the promise of regional fund loans, joined the System.
For all capitalisms, FRG first, there is also the ball and chain of a
backward peasant world with the unresolved problem of feeding the cities
at reasonable prices, an area of relative barbarism even in the most
industrialised societies due to low productivity, and a source of
irreconcilable contradictions not only between different nations but
within individual societies where the preservation of the peasant
structure requires high prices for agricultural products, prices
artificially imposed by state authority, paid for by the increased
exploitation of the urban and rural proletariat. The management of the
reactionary structure of the Compensatory Amounts, which tend to prevent
the formation of a single agricultural market, which would cause an
unsustainable upheaval in the countryside of all countries, is therefore
capitalistically ineradicable and a source of growing tensions.
The exchange rates of the countries adhering to the System have
remained within the limits set by the agreement since 1 January. There
was, however, a period of relative general exchange rate stability, so
that it was no sacrifice for any country to comply with the agreement.
Our prediction is that if there is an appreciable alteration in the rate
of the dollar against the deutschmark, an irresistible centrifugal
tendency will arise within the EMS, where all the smaller capitalisms
exporting to the USA will once again prefer to place themselves in an
intermediate position with their currency.
* * *
The convulsions of capitalist industry and finance throughout the
world are a sign and anticipation of forthcoming crises far more serious
in scope, depth and duration than those that have just passed. The
wealthy classes will defend their privileges, their gilded idleness,
their decadent luxury by all means, even more so when the crisis begins
to erode their prerogatives and when millions of proletarians will see
the false guarantees that this decrepit and rotten society had promised
them dramatically collapse: work, wages, a roof over their heads. The
working class, hitherto clouded, dispersed and brutalised by the double
array of bourgeois jailers and ex-communists, is showing signs of
revolt, still sporadic but with the unmistakable traits of the generous
class tradition. Let us strengthen, colleagues, let the gigantic
international army of labour, the bright promise of the future in
today’s fetid stench of dying capitalism, join with the revolutionary
direction.