Platitudes will not change the nature of crisis-ridden capitalism

The G-20 summit took place on 24 & 25 Sep 2009 in Pittsburg, USA. The world leaders congratulated themselves for averting the collapse of global finance capital and world capitalism. They praised themselves for arresting economic decline and stabilizing financial markets, and for starting a reform process towards “strong, sustained and balanced growth in the 21st century”.

The leaders of the imperialist powers declared that the capitalist world economy was on the path to recovery. They asserted that the crisis was only due to reckless and irresponsible financial behaviour. Since they have begun to take steps to rein in the “irresponsible behaviour”, they reiterated that capitalism will bring development to billions of people in the world. Therefore the ‘stimulus measures’ taken by various governments must be continued, they advised.

The declarations were clearly to create illusions among people who are going through terrible pain and suffering all over the world including in our country. The global economy is still in deep crisis. Financial and industrial profits have momentarily risen in relation to their steep declines since last year – but this is only because of the unprecedented state bail-outs to monopoly capital, cost-cutting in the form of massive lay-offs and squeezing more surplus from the employed workforce.

Global output continues to contract, factories are still closing, millions of jobs are still being lost, millions are losing their homes, and family incomes and welfare continue to plunge. Conservative estimates are that the intensified crisis will see 5-10 crore additional job losses aside from increasing the number of “working poor” to some 140 crore in the  world. This additional misery is on top of what happened in 2008-2009 when nearly 20 crore jobs were lost worldwide. Official rates of unemployment have reached their highest levels, yet these leaders want people to believe that the economy is improving.

What is improving are the profits of big finance capital institutions and of big multi-national and local companies with the help of ‘stimulus measures’. The estimated US$10.8 trillion worth of stimulus so far are financed by soaring government debt. The US federal government alone already has US$11.8 trillion in debt even as it faces a deficit of US$1.8 trillion just for 2009 and trillion-dollar-plus deficits every year for at least the next decade.

Desperate fiscal stimulus programs are everywhere driving huge public deficits in the major imperialist powers, including in India. They are for instance around 13.5% of gross domestic product (GDP) in the US, 11.6% in the UK, 7.4% in France, 10.3% in Japan and over 10% in India – the highest seen since the Second World War. These are dangerous conditions for the people. At the very least the people will see education, health, housing and welfare services cut to give way to massive public debt service.

The Summit wanted to divert the attention of people from the laws of capitalism and from the reality of how hundreds of crores of working people around the world are oppressed and exploited, and have been driven into deeper suffering and backwardness.

The G-20 Summit declared that from now on G-20 instead of G-8 will be responsible for managing the global economy.  This reflects the changing balance of economic power, and the need to include the newly rising powers, such as China and India, in the club of leading imperialist powers of the world.

The summit concluded with the leaders agreeing to expand the G-20’s role and making it more central to international economic policy-making.  It advocated a greater and resurgent role for the IMF and the World Bank in advancing the imperialist agenda, especially in the over 170 underdeveloped countries outside the G-20.

The G-20 Summit sought to enhance the perceived legitimacy of the IMF and World Bank by increasing the voting shares distributed to under-represented countries. However, the adjustment in voting shares was considered too little by both China and India.