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This morning (yesterday) it was being recited in the world capitalist press, that Europe, was pulled back from the brink of financial meltdown after its leaders came delicately agreeing a £96 billion bailing out for Greece. Interestingly, the Eouozone leaders put forward a new plan for Greece which included lower interest rates and gave more time to pay it off. These much softer lending conditions will also be applied to the multi - billions loaned to Ireland and Portugal as the leaders of Europe battle to forestall the debt contagious disease spreading deeper across Europe and ultimately the possibly of it growing legs and going global.
Always, there is but one saying that comes rebounding around in my head, and into my mind when I read of these economic woes:
'In its quest for higher profits and new markets, capitalism will inevitably sow the seeds of its own destruction.'
Today we live in a world that is completely dominated by capitalist production for sale on a market (very dirty) with a view to profit. Writing in the middle of the 19th century, Karl Marx was able even back then, to see that this globalization would happen, as his study and analysis of capitalism had identified it, as an inherently globalizing system. And as in the Communist Manifesto it was chucked up like this - "the cheap price of commodities...compels all nations on pain of extinction, to adopt the bourgeois mode of production".
In August 2007, soon to be a forth anniversary, a new term came into the English speaking world vocabulary - "credit crunch". However, to describe an old phenomenon: the sort of credit crisis that used to occur at regular intervals in the 19th century. This also took place in more recent times in both 1907 and 1929. It's all there in Marx's description and analysis of them in Volume III of Capital. There is the same panic-struck, the same bank collapses, the same dash for cash, and the same government to make cash available by breaking its own rules. And the same downturn in economic activity.
In short global capitalism has engendered for the vast majority of the world's population is neither Global Keynesian nor regulation as both these would still leave intact the basic structures and mechanisms of capitalism.
And in trying to repave and repair its own damage; capitalism has built institution's globally to deal with it, such as the International International Fund (IMF). Now you may or may not be aware that this noble organisation not to dissimilar to adhesive tape, recently had prescribed a new boss. Christine Lagarde who took over the reigns will earn $467,940 per year plus a $83,760 allowance. Notably it has been pointed-out, this salary is up almost 6 percent from the $441,980 per year that former IMF chief Dominique Strauss-Knhn used to make - and significantly more than the $4000,000 salary earned by the US President.
The irony is, the IMF justified Lagarde's raise as "reflecting the rise in the cost of living." Yet workers in countries 'bailed out' by the IMF have experienced vastly greater increases in their cost of living without any form of wage recompense . I don't know if this is humorously sarcastic, mocking or both.
Indeed, living standards are rapidly plummeting, which you may well have noticed, whilst the cost of living continues to rise, and yet the IMF calls on countries like Greece, Portugal and Ireland to cut public sector wages.
Not to put too fine a point on it, but in contrast, the average Greek worker if fortunate to be in work, say like, a waiter in a restaurant, made some 727 euros net per month in 2008 on an average work week of 47+ hours, and which is said to be much less today, yet Lagarde makes over 53 times that amount. I suppose all in all this situation reveals a painful truth about our world today. It amply reveals the enormity of the chasm between the technocratic elites' in charge of economic policy and the ordinary people affected by their decisions.