6 thoughts on facing the (possible) eve of another economic meltdown



Predicting the future is often a mug’s game but we can be fairly confident that 2016 we see the conditions for capitalism, both in Australia and globally, worsen. At the very least the mining boom is grinding to an end and perhaps there will be another global meltdown. What will this mean? Depending on the size of the malfunction it will (probably) mean rising poverty, homelessness, unemployment (though currently employment in Australia is surprisingly high) and general misery and declining wages, government spending (as revenues drop), wealth levels and good vibes. This will (probably) all manifest in impacts on life expectancy, mental health, identity based-conflicts, state repression, social cohesion… all this in a world already marked by war, violence, inequality, alienation and ecological disaster. A grim prospect unless we can collectively change our destiny.


1.     It’s Not Turnbull’s Fault.


It is totally wrong to say these bad times are a product of the specific actions or policies of the Coalition Government; just as the Government is wrong when it blames unions, penalty rates or a supposed ‘culture of entitlement’. These bad days are a product of the internal malfunctioning of global capitalism.


The current major global threat is the financial meltdown in China. Asset values are crashing as the level of export lead growth stalls and profits are squeezed by a militant workforce demanding higher wages. But this is just a manifestation of a global crisis of capitalism. Since the 2007 crash the Chinese government has been trying to keep the ball in the air through stimulating the economy via infrastructure development and encouraging real estate and financial speculation via expansionary monetary and fiscal policy. This is running out of steam (Kumar 2016, Lin 2015).


Globally since 2007 a combination of bailouts, austerity, stimulus and functionally zero interest rates kept the roof from falling in. However they didn’t return high enough profit levels to lead to real growth and have lead to the vast accumulation of debt and potential monetary instability. As conditions worsen investors are left looking at their assets and thinking what the fuck are these worth? Thus the crisis threatens to manifest in falling growth levels, falling commodity prices and the falling value of financial assets (Patnaik 2016). A big snowball of shit.


2.     Keynes & Social Democracy can’t save us.


Just as policy isn’t to blame policy can’t save us.  We live in global capitalism and the problems are systemic. The nation-state is simply a node for administration of capitalism(Holloway 2002). A government that tried, for example, to vastly increase state spending, stimulate consumption and/or ensure basic living conditions via welfare financed through either/and an increase in taxation or debt would run into a brick wall. Already states have made interest rates functionally zero: all this has done is create financial and property bubbles and mountains of corporate and household debt. If a state increases taxation to fund investment and social welfare capital would probably flee to warmer climes. If a state increases their borrowings to do the same this could lead to more financial instability. State debt takes the form of bonds which work as both profitable investments and a key element of setting the prices of all financial assets: if debt rises and states struggle to meet their obligations then this will intensify the breakdown of the system. All this would also be used as a cudgel to beat down a progressive government – see what happened in Greece.


The ultimate cause of the crisis is the general decline in the profitability of capital. It is unclear if stimulating demand can address this.


Reality compels us to be even more radical.



3.     Directional Demands


We have a double problem: how to assert our needs and desires within capitalism as it stumbles and malfunctions and how to also to subvert and overcome it all and build a better society? What can we do now, in the present, to address our immediate needs and desires in a way that opens up paths to a radically different kind of life?


Perhaps the idea of the directional demand can help:


In short directional demands aim to provide a direction of travel rather than simply describe the wish for ‘full communism.’ They need to make sense within existing conditions while pointing beyond them. Indeed they need to make better sense of the current situation and the potential it holds than conventional politics does. They need to play a compositional role, I.E. link different sectors or interests together or indeed produce a new subject of their own. And their fulfillment, or indeed movement towards their fulfillment needs to leave us, the working class, the multitude or whatever, in a stronger position, able to better articulate what we want and better able to exercise the power to get there. The Universal Basic Income (if framed correctly) could provide one example, a Debt Jubilee or Universal Expropriation (a residency restriction on housing), could provide others.

(Milburn 2015).


Directional demands can’t be just dreamed up: rather they need to be developed in concrete situations reflecting the tensions in society, the challenges we face and our desires for a better life.  But…if in the face of rising unemployment will we simply beg for ‘jobs’ or struggle for a reduction in the working week without pay reductions, the creation of community workshops to produce our own needs, a general basic income and the reduction in prices? The legal permission to take over abandoned workplaces and buildings (or just take them)? How could we respond to increasing difficulties to pay our rent and mortgages? A prohibition on evictions perhaps, pegging rent to capacity to pay and the renegotiation of mortgages as property prices tumble?


Let’s be clear if achieved such demands won’t solve the crisis – the will probably make it worse. But they will defend and improve our lives and crack open the possibility of something else. But to win anything we need the power to win.

4.     Manifest Power


The old playbook of rallies that appeal to the state isn’t fit for purpose. Rallies lack power and the state can’t really do anything to address the deep global causes of the looming catastrophe.


We will need to exert our own power.  Power enough to break the dominant forms of control (confront the state, defend ourselves from reactionary forces and disrupt the everyday normal functioning of capital accumulation). Our power emerges from the reality that our labour, paid and unpaid, across all of society is the real energy that fuels capitalism. Our ability to rebel, block the production, circulation and acclamation of capitalism and displace the state is our power. Strikes, occupations, blockades, sit-ins, mass non-compliance and the like. The Bentley Blockade, the Hutchinson Dispute and #nofansnofootball are all inspiring examples. Globally people are experimenting with the social strike.  When we exert our power we both jam the operation of the system and contribute to the further creation of our collective capacities.


All this looks very far away. Only a small minority of workers are members of unions, and most unions are dominated by ALP careerists with little room for members to take initiative, and days lost to industrial action are down to historic lows. The state wields incredible coercive power. We may need to revitalise the organisations we already have and generate a whole host of new ones: a complex constellation of decision making and coordination. But if we start discussing these ideas now, if we start by picking specific contestations on the terrains of our lives, collectively standing up for ourselves and supporting each other, we can start the ongoing process of generating our capacity to change the world. We also need to address the practices of bigotry and inequality that exist within us and keep all of us chained in place.


5.     Build Alternatives


If we can exert our power to block the operation of capitalism we also need to start creating alternatives: to build the future in the present.  Firstly if the global economy does continue to malfunction we will all need to confront the question of how will meet our needs and how will we care for each other as incomes from work dry up or are reduced. If we are able to able start blocking the circulation of capital we will be compelled to start thinking about how is everyone going to get milk tomorrow or meds from the chemist. Generating alternatives simultaneously gives us the space to start building better lives: to work together differently, to distribute our creations differently, to untangle our dependency on wage-labour. Successful alternatives can function as laboratories of hope that convince more and more people that life can be different.


Co-operatives, commons, solidarity economies, communisation – all of these reflect different approach to do just this. Many such attempts already exist: parents’ groups in local halls, community gardens, food co-ops, mutual societies and informal bonds of sharing and care. The more we can start to create the society we want the more we can pull apart the one we don’t – and vice versa.



6.     Start Where You Are


Our capacity to do all this arises from the concrete and material conditions of our lives. You don’t need to go anywhere special. Look around but look under the surface – what kinds of rebellion, solidarity, care and power can you see? What are the issues and concerns being discussed on social media, in the break room, over the kitchen table… Start by picking a useful act that can increase our capacities.


But our divisions keep us down. The more we can circulate our struggles and experiences, generate spaces of discussion, understanding and debate and learn from each other the better. Facing a grim time where all the official solutions are bankrupt we might be able to understand that we are the ones we have been waiting for.


Holloway, John. 2002. Change the World without Taking Power: The Meaning of Revolution Today. London: Pluto Press.


Kumar, Ashok. 2016. The Devaluation of the Chinese Yuan Marks a Crisis in Capitalism. Independent [cited 12th January 2016]. Available from http://www.independent.co.uk/voices/the-devaluation-of-the-chinese-yuan-marks-a-crisis-in-capitalism-a6802086.html.


Lin, Kevin. 2015. Anatomy of a Collapse. Jacobin [cited 25th August 2015]. Available from http://www.jacobinmag.com/2015/07/china-market-collapse-communist-party.


Milburn, Keir. 2015. On Social Strikes and Directional Demands. Plan C [cited 1st June 2015]. Available from http://www.weareplanc.org/blog/on-social-strikes-and-directional-demands/.


Patnaik, Prabhat. 2016. Capitalism and Its Current Crisis. Monthly Review 67 (8), http://monthlyreview.org/2016/01/01/capitalism-and-its-current-crisis/.



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