Sunday, August 15, 2010

Crisis. What Crisis? Profits Soar!

By James Petras

"While progressives and leftists write about the “crises of capitalism”, manufacturers, petroleum companies, bankers and most other major corporations on both sides of the Atlantic and Pacific coast are chuckling all the way to the bank.....

What the current unequal and uneven impact of the capitalist system tells us is that capitalists can overcome crises only by heightening exploitation and rolling back decades of “social gains”. The current process of profit recovery, however, is highly precarious because it is based on exploiting current inventories, low interest rates and cutting labor costs (Financial Times August 10, 2010, p 7). It is not based on dynamic new private investments and increased productive capacity. In other words, these are “windfall gains” - not profits derived from increased sales revenues and expanding consumer markets. How could they be – if wages are declining and unemployment/underemployment/and lost labor is over 22%? Clearly, this short-term profit boom, based on political and social advantages and privileged power, is not sustainable. There are limits to the massive layoffs of public employees and production gains from the intensified exploitation of labor … something has to give. One thing is certain: The capitalist system will not fall or be replaced because of its internal rot or “contradictions”. "

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