'Now more than ever the dilemma is socialism or barbarism'
By Luisa Maria Gonzalez Garcia
2009 started off badly. The international economic crisis is top priority of governments, companies, international organisations and individuals whose worries have become having a roof to sleep under and food on the table. The situation has taken many nations by surprise, but not so much Cuba. Almost a decade ago, Fidel Castro warned that the conditions existed for the outbreak of a crisis of enormous dimensions. Osvaldo Martinez, director of the Research Centre for World Economy and president of the Cuban National Assembly’s economic affairs commission, had also mentioned the subject on several occasions. Looking back, the economics PhD says, “they criticised us heavily, they called us catastrophists, but finally the crisis is here”.
Mass lay-offs all around the world, rise in unemployment rates and poverty indexes, bankruptcy of companies and banks are some of the most obvious effects of the crisis. At which stage of the crisis are we in?
The crisis is just beginning, and no-one can predict with certainty how long will it last nor its intensity. We are facing something more than a mere financial crisis: it is a global economic crisis that affects not only international finances but also the real economy. Due to the high degree of development achieved by speculation and financial capital in recent years, due to the extent of the breakdown in the financial sector and due to being in a highly globalised economy, we can deduce that the present crisis will be, with certainty, worse than the Great Depression that occurred in the 1930s.
What has been happening since August 2008 is the explosion of the speculative financial bubble, caused particularly by neoliberal policies. Right now the crisis is beginning to affect the real economy, that is, the economy that produces real goods and services, development of technology, and values that can be used to satisfy needs. How much more will it affect the real economy? It is hard to say. There are many opinions on this subject. Some suggest that the crisis may last between two and five years. If we use historical references, we see that the crisis of the 1930s started in October 1929, developed at full speed until 1933, and the economies had not fully recovered their previous levels of activity when the Second World War started in 1939.
What finally “solved” that crisis, and I say “solve” in inverted commas because this is only the solution that capitalism gave to the crisis, was precisely the Second World War. It was the destruction of productive forces caused by the war that allowed post-1945 capitalism to initiate a new growth stage based on the reconstruction of everything that had been destroyed by the war. Every crisis, linked or not to a war, is above all a process of destruction of the productive forces.
Back to the current situation, I do not dare to make a precise forecast on the duration of the crisis. However, what I do dare affirm is that it is far from having hit bottom.
Which are the sectors that have been worst affected?
The explosion of the financial bubble has caused the collapse of stock markets and the bankruptcy of important corporate speculators (the so called investment banks, which in fact are not productive investors but speculative investors). Large banks have become bankrupt. Credit has been affected at a global level, since it has become scarce and expensive. There has been a decrease in the prices of raw materials and oil. Sectors of the real economy are being affected by the crisis, as is the case of the motor industry in the USA. The three largest companies, General Motors, Ford and Chrysler are receiving support from the government to avoid bankruptcy. Several airlines have closed down. Flights have been reduced. Unemployment is on the rise. Tourism is also affected. It is a snowball effect, which can lead to the deepening of the crisis during 2009.
To some specialists, this is one more cyclic crisis of the capitalist system, one of those described by Marx in the 19th century. But it has also been said that it is not just “one more” but, given the huge dimensions it has reached, it is the expression of the internal destruction of capitalism. What is your opinion on this matter?
I think that the current crisis is, without doubt, another cyclic crisis of capitalism. It is one more in the sense that the system that has been in place since 1825 when, as Marx later noted, the first crisis occurred, has suffered hundreds of similar crises. A crisis is not an anomaly of capitalism. Rather, it is a regular feature of it, to the point that it is even necessary to the system. Capitalism follows a particular logic, since it needs to destroy productive forces in order to pave the way for another stage of economic growth. However, the current crisis is undoubtedly the mark of a deep deterioration within the capitalist system.
I believe the crisis can reach serious dimensions, but I do not think that, on its own, represents the end of the capitalist system or its definitive destruction. One of the things that Marx argued with great lucidity was that capitalism does not collapse due an economic crisis. Capitalism has to be brought down through political actions.
So do you agree with what Marx said, and later supported by Vladimir Lenin and Rosa Luxemburg, that despite the self-destructive nature of capitalism, there has to be a revolution to bring it down?
Of course I do. To think that capitalism will collapse on its own, due to a spontaneous force like an economic crisis, is to believe in utopia. The crisis may create conditions that favour anti-capitalist political movements. As long as politics are tactfully handled and as long as there is a leadership that takes advantage of the situation, the crisis creates favourable conditions because it generates more poverty, unemployment, large-scale bankruptcy and the desperation of the masses.
Throughout history, large-scale economic crisis have been linked to revolutionary movements. For example, during the First World War there was a profound capitalist crisis, and the success of the first socialist revolution in Russia was linked to this. The crisis of the 1930’s however, was linked to the appearance of fascism. The desperation of the masses in Germany and Italy provoked a crisis that was used by the right wing to create extremist right-wing, fascist, chauvinist and nationalist governments.
What I want to stress is that nothing is inevitably written in history. It all depends on the expertise and the handling of the political forces that are in competition. In the present situation, I think that it is possible to think about change. We are in a situation that may have us seeing a surge in the radicalisation of anti-capitalist movements as a response to the crisis.
If it is just another cyclical crisis, but at the same is different, what factors characterise it?
I think that the differences are down to the context. The present crisis is especially complicated because the global economy is also complicated, much more than the economy of 1929. Firstly, the level of economic globalization is vastly superior. The degree of interconnection that national economies had back in 1929 was incipient, and the same could be said of the technology available back then, transport or communications. In 1929 there was no internet, no email. They depended on telegraphic communications, telephones had not been perfected, and planes were just starting to cross the skies.
Today the situation is very different. Due to the degree of globalisation, every event that happens in a powerful economy has an impact, in a matter of minutes, on the rest of the world. Markets are greatly interconnected, especially financial markets, at a global scale, and that means that the world economy is like a spider web in which we are all trapped. A movement in any part of the spider web is felt everywhere else. Because of all this, the capacity for this crisis to spread is larger than in 1929. This is the first difference.
Secondly, the level of financing in the global economy is also vastly superior. The amount of speculative capital and the nature of the actions that occur are much more intense than in 1929. Back then there were stock markets, but their functioning was simple. Today, financial speculation has reached an immense sophistication, which is in turn one of its weakest points. The speculative operations are so sophisticated, risky, loaded with fraud and unreal that they have constituted the basis of the global financial breakdown.
Up until now there have been no radical measures put in place to stop the crisis. However we are seeing how the state, especially the United States, intervenes more and more to avoid the bankruptcy of companies and by doing this it is taking on a prominent position which reminds us of the Keynesian methods used by Franklin Roosevelt to come out of the 1930s crisis. Today many claim that neo-Keynesianism will be the alternative.
In essence that is what they are trying to do: to apply neo-Keynesian methods in a diffuse manner. We can see evidence of this in what Barack Obama has announced regarding a large-scale reconstruction of the road network (including roads, bridges etc). That is a typical Keynesian resource to generate employment and income, and to stimulate demand. But at the same time, measures like this are being combined with others that are contradictory, such as rescuing bankrupt companies and giving out large amounts of funds to put back together the speculative structure which failed and collapsed.
This is a contradiction of Keynesianism, and a clear expression that the neoliberals continue to hold positions of power. We are witnessing a battle between a neoliberalism that refuses to disappear and a neo-Keynesianism that wants to become established.
I doubt that neo-Keynesianism can turn out to be the solution to this crisis, even if it is strictly applied. This is because the current crisis has new components. The crisis combines elements of over- and under-production. It is a crisis that has attacked the environment. It is not only economic but also environmental, and with this human survival and the conditions of human survival are at risk.
Do you mean that, as it has already happened, Keynesianism will only be a temporary solution that will deal with the problems without getting to the roots?
Of course. We cannot consider Keynesianism and neo-Keynesianism as the infallible recipes that will solve the economic problems of capitalism. Capitalism has suffered crisis with both neoliberal and Keynesian policies. Between 1973 and 1975 there was a severe capitalist crisis that occurred under Keynesian policies, and that was a factor that provoked the substitution of Keynesian ideas by neoliberal policies.
We should not believe in the false dichotomy that affirms that neoliberalism provokes the crisis and Keynesianism resolves it. Simply put, the system is contradictory and has a tendency to develop periodic economic crisis. Whether they are neoliberal or Keynesian, economic policies can facilitate, stimulate or postpone the situation, but they are not able to eliminate capitalist crisis.
Then there is one solution left: socialism...
Without a doubt. I am more convinced than ever before and I believe that the dilemma presented by Rosa Luxembourg is in evidence: “socialism or barbarism”. I do not believe that humanity will go back to barbarism, simply because our survival instinct is the strongest of all.
I believe rational conditions will prevail, and rational conditions imply a sense of social justice. I think we will overcome capitalism, and the practice of creative socialism will prevail. This means socialism being a continuous search, without forgetting its basic principle. However from these basic principles stem the possibilities for experimentation, polemic and creativity.
And that would be the socialism of the 21st century?
I believe so.
[Ecuadoran] President Rafael Correa, during the conference given at Havana University in January this year, explained that one of the problems of socialism is that it has followed a development model similar to that of capitalism; that is, a different and fairer way to achieve the same thing: GDP, industrialisation and accumulation. What do you think?
Correa raised a good point. The socialism practiced by some socialist countries did no more than repeat the development model of capitalism, in the sense that the objective was the growth of productive forces. By doing this it constituted itself in quantitative competition with capitalism, and ignored that the capitalist model of development is a social structure unable to provide for the whole of humanity.
The planet would not survive this again. It is impossible to fall again into concepts like one car for each family, the model of North American idyllic society, etc. It is also impossible that a sector of the 300 million inhabitants of that country continues to consider that as a reality. That is also responsible for much of world poverty. It is therefore necessary to conceive another model of development which is compatible with the environment and which has a more collective way of functioning.
Although Correa was right in many things, I do not agree with him in one thing. In one of his TV interviews he mentions the socialism of the 21st century, with which I agree, but then claims that several things would become obsolete. Among them, he mentioned class struggle, when that is one of the political struggles of his country, Ecuador, which is now immersed in an episode of class struggle that he is trying to resolve with his project. Who opposes his project? It is undoubtedly the oligarchy and the bourgeoisie. Who can he rely on to support him against the enemy? The workers, the peasants, the indigenous peoples.
I am not thinking of the classic definition of “class”, but of the undeniable existence of social classes, and the struggle between them is undeniable and evident. If we renounce class struggle, what would be left? Cooperation between classes? I do not think Ecuador can complete its project of 21st century socialism with the cooperation of people like Gustavo Novoa [Equador’s richest person], the Catholic Church or those who try to overthrow Correa.
The world has built many expectations around the figure of Barack Obama in the United States. What role can he play with regards to solving the crisis?
I do not have high hopes of change. I believe that Obama’s government can represent a cosmetic change rather than a profound structural change in North American policies. I think he represents the position of a certain political sector in the United States which understood that it was impossible to continue a regime so unpopular, worn out and unpleasant such as that of George Bush. However, there is something we must take into account, and at least give him the benefit of doubt: Obama’s ideas are one thing, and where the deepening economic crisis may take him is another thing. And once again I have to use the 1930s as an example.
In 1933, when the crisis was full-blown, Franklin Roosevelt took over as president. His ideas were nothing extraordinary. There was nothing that could have had people guessing what would happen next — his policy of active state intervention, support by trade unions or the regulation of private economies. All those measures were taken more as the result of what the crisis forced him to do, than as a result of a pre-existing political philosophy. Something similar could happen with Obama, but we must give him the benefit of doubt to see where the crisis will take him.
In the past few weeks there has been a lot of talk on the role of Latin American integration to face the crisis. Although this process is only starting, there have been changes at structural level that point towards integration. How can integration help us face the crisis as a region and as a country?
I think that the integration of Latin America and the Caribbean will be a key strategic factor in the future of the region, and I do not mean integration as an appendage of the United States. For decades, Latin American integration has been nothing else but rhetoric, never practice. But we have seen the beginning of a new space, marked by the Summit of Salvador de Bahia, which took place in December last year, where Cuba joined the Rio Group. We also have the ALBA (Bolivarian Alternative for the Americas), a model of integration based on solidarity and cooperation, not on the market.
This situation coincides with a crisis that is forcing Latin America to rethink her position in the global economy. This also coincides with a profound crisis in the neoliberal policies that governed the region during the last 30 years. It is a great moment, and I think that there is a real possibility that true Latin American and Caribbean integration becomes a reality.
Some authors point to the idea that following the current crisis, the world economy will be structured in large regional blocs: one in Asia, another one in North America and a new one established by Latin American countries. The possibility is very interesting.
[Martinez was interviewed by Luisa Maria Gonzalez Garcia, a journalism student at the University of Havana. The interview was published in Spanish on March 14, 2009 by the Venezuela-based Aporrea.org website and translated into English for the Cuba Debate website by Damaris Garzon.]