Reykjavík Grapevine - 11.03.2005, Síða 38

The Collapse of Capitalism
World Capitalism seemed to be
doing well in early 1929, despite the
loss of Russia after the revolution
of 1917. There had been a brief
depression after the war, but by
the late 20s industrial production
in Europe was 25% higher than it
had been before the war and Britain
was back on the gold standard. It
was only in the spring and autumn
of 1929 that industrial production
showed signs of trouble, and prices
went down. Then, on the 29th of
October came the crash. By 1932
production had halved. Britain went
off the gold standard in 1931, the
US two years later. In 1933, world
trade had shrunk by a third. The
US, Germany, Latin America and
Eastern Europe were particularly
hard hit. The still vast British
Empire managed to insulate itself
to some extent by erecting tariffs
along its borders, but by 1939, the
capitalist democracies with lesser
empires such as the United States
and France in particular, were still at
a lower production level in 1939 than
they had been in 1929.
Capitalism Goes to War
The countries that had managed
to deal most successfully with
depression were the fascist-run
Germany and Japan. Increasing
state spending in armaments, they
managed to secure employment
for virtually everyone, which led
to both fear and admiration in the
west. The Soviet Union also avoided
the depression as it was not part of
global finance to begin with, and
went through a period of rapid, and
often violent, industrialization.
It was only with the outbreak of
war that the US, first as “Arsenal of
Democracy” and then as combatant,
overcame the effects of depression.
War rather than commerce was
now the driving force of production.
Many assumed that as soon as war
was over, depression would return.
But capitalism was fortunate in
that the end of war did not mean
the return of peace. The Cold War
began almost as soon as the guns fell
silent on the battlefields of Europe.
But pressure was strong to bring the
boys back home, and demobilization
proceeded. It took the Korean War
to get rearmament going again.
Blasting Those Yellow Reds to Hell
By the end of World War Two,
Soviet troops had advanced to north
of the 38th parallel and US troops
to south of it. In 1946, a civil war
broke out in South Korea, which
grew to include border clashes with
the north after both US and Soviet
troops withdrew in 1948. The
fighting died down briefly in early
1950, by which time 100,000 people
had been killed. When the North
finally launched a full scale invasion
in June 1950, the Soviets thought
it so unlikely that the United States
would intervene that they didn’t even
order their veto-holding diplomat
at the UN back in place, currently
away protesting against Taiwan
holding China’s place in the Security
Council. But intervene the US did,
to the tune of 30,000 killed in action.
Another Good War
Early in 1950, the US National
Security Council at the behest of
Secretary of State Dean Acheson had
drafted a top secret document known
as NSC-68, calling for, among
other things, the development of
hydrogen bombs, rapid building
of conventional forces, an increase
in taxes to pay for these and the
mobilization of American society
to create consensus on the necessity
of sacrifice. President Truman read
the document in April 1950, but
the proposals for higher taxes met
opposition in Congress and even
Secretary of Defence Louis Johnson
said that Acheson’s plans would
bankrupt the country. And then,
as Acheson would later say, “Korea
came along and saved us.”
The Cold War Flows, Ebbs and
Flows Again
Two years after the end of the
Korean War and the death of Stalin,
a summit was held in Geneva which
de-escalated tensions (the so-called
“Spirit of Geneva”), and for the
rest of the decade the Cold War
seemed at risk of subsiding. By this
time, a certain Senator Kennedy
was warning of a “missile gap” with
THE TRUE HISTORY
OF CAPITALISM
When Soviet Communism collapsed in 1989, it had outlasted
its rival, Market Capitalism, by some 60 years. The collapse of state
(which has little to do with theoretic) communism was swift. In the
early 80s, it had looked as strong as ever, if not quite as vibrant.
Few would have predicted its sudden collapse, even when the weak-
nesses became more apparent after Gorbachev came to power in
1985. By November 1989 the Iron Curtain had collapsed as did the
Soviet Union two years later. Capitalism’s demise was just as swift.
2ND FEATURE
by Sy
M
aurizio
Ögmundur Jónsson, volunteer for Pathfinder Publishing at the Havana
International Book Fair last February will give a presentation on the Cuban
revolution at Snarrót Radical Centre, Garðarstræti 2, on March 15th. Some
of the points discussed will be:
* How does the Cuban revolutionary leadership mobilize working
people to take on the challenges posed by the country’s integration
into the world market?
* How do the campaigns to expand education and culture to everyone
in the “Battle of Ideas” work?
* How does Cuba defend itself against relentless economic, political
and military pressure by the United States?
* What is the effect of growing ties between Cuba and Venezuela,
where millions of workers, farmers and youth are taking part in
campaigns to eradicate illiteracy, expand health care to everyone
and distribute land to landless peasants?
the Soviet Union, and upon being
elected President increased arms
spending significantly. Things were
soon close to breaking point with
the Cuban missile crisis in 1962.
A missile gap did indeed exist, but
in the United States’ favour, which
never had less than an 8-1 advantage
in nuclear missiles.
Another de-escalation of the Cold
War came with Nixon’s detente.
This time it lasted somewhat longer.
The United States went off the gold
standard, and the almost unbroken
boom of the post-war years came
to an end. By the early 80s, Ronald
Reagan was warning of the Evil
Empire, military spending was
increased again, and this time plans
were made to take the arms race into
outer space. The Soviets couldn’t
keep up, and finally showed their
cards and folded.
A Good Day for Gun Runners
Optimistic as people from East
Berlin to the Ukraine may have
felt at being welcomed into the
arms of the market system, this
might well have spelled disaster to
the armaments industry, the very
backbone of modern Capitalism.
But again Capitalism got lucky.
Saddam Hussein invaded Kuwait.
The US brought their latest high-
tech weapons to bear on Iraq’s
Third World army in front of the
world’s TV cameras. Sale of military
hardware abroad picked up nicely.
Although failing to get the US
involved in any major conflicts, Bill
Clinton bombed Serbia, but by now
US air power was old news. And
then September 11th, one of those
dates that happen rather than arrive,
happened. And the armaments
industry, it seems, will be safe for
quite some time to come.

The Bottom Line
Ever since 1939, the capitalist
economy has been driven first and
foremost by military spending.
Military capitalism has replaced
market capitalism. Fascism, by any
other name. Those who observed
Hitler’s success in dealing with
depression learned their lesson well.
The Cuban Revolution
in Today’s World
���������������������������������������������������
������������������������������������������������������
������������������������������������������������������
�������������������������� ����������������
������������������������������������������������ ������
������������������
M
aurizio
38