No nation has been able to escape capitalism’s inherent contradictions. War and austerity are its solutions — consequences

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time work at near minimum wages, or less, and the figure leaps to perhaps 20-25 percent or more. The government formally admits to a 16.1 percent out-of-work figure.

The same Times article strikingly refers to the Federal Reserve’s “limited arsenal of tools” to rejuvenate the economy. For decades the term ”limited arsenal” was excluded from the nation’s general economic terminology. The Federal Reserve’s chair was endowed with nearmagical powers to regulate the economy to guarantee its steady growth and stability.

In recent years, these generally consisted in lowering federal interest rates to provide cheap money to banks and corporations to supposedly encourage their investment in industries that produce new jobs and hence a steady supply of commodities for the market. The steady decline in such investments has been the general trend in the past several decades as banks and corporations understand that, in a world of unprecedented and globalized competition, profit rates in the industrial sector have registered steady declines, with major U.S. corporations like General Motors, and thousands of others, going bankrupt.

Today’s corporate owners prefer to invest their money in the bubble-driven speculative or financial sectors—where big fortunes were made seemingly out of thin air—or abroad, where labor and production costs are qualitatively lower than in the U.S.

It has been frequently noted in recent months that U.S. corporations today sit on some $2 trillion in cash, but nevertheless decline to invest in the American economy. It’s not a lack of patriotism that explains this apparent contradiction, but rather a lack of profits In today’s increasingly integrated world economy, U.S. multi-national corporations find it qualitatively more profitable to invest in poor nations, where near slave wages and tax breaks result in profits far in excess of what can be obtained at home. But when U.S. competitors follow suit and seek the same advantages of low-wage labor abroad, the initial gains soon evaporate, and undercutting one’s competitor’s prices becomes increasingly more difficult.

The “race to the bottom” eventually takes its toll on all workers, but the capitalists themselves have no choice but to drive each other out of business in order to remain in the profit/accumulation game.

Corporate profits are supposed to be taxed in America, but only when they are repatriated to the U.S. But compliant government policies have increasingly allowed corporations to avoid taxation by legislative devices. To encourage corporations to bring their profits home for investment in the domestic economy, for example, legislation is in progress to declare “tax holidays” in which taxes owed would be forgiven or reduced to qualitatively lower rates.

Grateful corporations, who in truth own the legislators as well as their multi-national companies, readily comply, but only long enough to quickly return to their low-wage operations abroad. Meanwhile, others simply avoid all taxation by declaring that their corporate offices are no longer located in the U.S. but rather in tax havens like the Cayman Islands or Barbados.

One of the monetary measures increasing employed today to supposedly re-balance or “save the system, “quantitative easing,” was hotly debate during the Aug. 9 meeting of the Federal Reserve, where divided bankers could not agree on any solution to capitalism’s crisis other than to guarantee that they would maintain federal interest rates at near zero levels until at least 2013. This would allow banks and other corporations to borrow with impunity based on the premise that they can profit by investing the government’s money at higher rates of return, but again, largely in the speculative sectors of the economy. Casino capitalism rides again!

“Quantitative easing,” or QE, is not the norm in capinot far behind. A default on their obligations to the more powerful capitalist nations, to the tune of trillions of dollars or euros, would send the entire system into a crisis that all agree would threaten the system’s essential cohesion.

The European solution to date has been twofold: to re-negotiate the loans of the defaulting or near-defaulting nations, with the more solvent ones absorbing the risks of future default, and to ensure that these loans are repaid by imposing draconian austerity measures on the world’s peoples—as in Greece, where decades of social gains in pensions, wages, and health care have been stolen.

A New York Times article entitled “Banks Hard-Sell Greek Bailout Plan” makes this explicit. “In the case of the proposed second bailout for Greece— the one that is supposed to make private interests feel the financial pain along with taxpayers—the biggest banks in Europe are on the road now promoting the plan. It’s not that the banks are suddenly masochists. It’s that this first major bond restructuring in Europe’s long-festering debt crisis is shaping up as a much better deal for the banks than for the Greeks it is supposed to be helping.”

No nation has been able to escape capitalism’s inherent contradictions. War and austerity are its solutions, the consequences be damned.

“There is work to be done, and there are workers ready to do it,” said President Obama during his Labor Day speech to the Detroit AFL-CIO, where the sellout labor chiefs pledged their ongoing support to labor’s greatest public enemy. “Labor is on board. Business is on board, ” said the posturing president. And, in anticipation of Congress’s return to session next week, Obama continued “We just need Congress to get on board. Let’s put America back to work.”

Empty rhetoric in the extreme! President Obama has proven to be U.S. capitalism’s strongest weapon, exceeding George Bush in literally every attack on U.S. working people, with his abandonment of the Environment Protection Agency’s already inadequate planned “stricter limits on air pollution” being the latest example of subordinating the interests of the many to the corporate few. n Socialist Action SEPTEMBER 2011 3

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... Libya victory no gain for masses (continued from page 1: “Imperialist victory is no gain for Libyan people”) terventions and wars, covert and overt, over the past century or so—all to advance the interests and power of the ruling elite, who require the constant expansion of their “spheres of influence,” today in the name of the “War on Terror,” to sustain their competitive advantage over their rivals. The interests of the oppressed peoples of the world have never been a factor in imperialist calculations.

Both the Bush and Obama administrations were more than happy to deal with the Gadhafi dictatorship as long as the formerly left-sounding populist dictator, turned U.S. ally, was willing to open the country’s economy to foreign capital. And Gadhafi readily acceded to IMF-dictated austerity programs, to giving a lion’s share of and reducing the costs of Libya’s oil to Western corporations, privatization of key industries, border guard assistance in thwarting the immigration of Black Africans into Italy and France, and joining in the “War on Terror” and the associated rejection of the Palestine liberation struggle. Gaddafi’s harsh repression of dissent was never of any consequence to the Western corporations and governments who have now conquered the nation.

TNC officials have promised that they will honor all contracts that the Gadhafi regime made with Western capitalists. But the Libyan catastrophe will undoubtedly result in a new race by European and North American corporate rivals to turn a larger profit out of the nation’s oil wealth. The British Independent commented on Aug. 24, “After five months of fighting in the world’s 12th-largest oil producer, industry figures are acutely aware that billions could be made in the coming years from rebuilding Libya. Immediate focus will fall on the country’s oil fields that are currently producing a 10th of the 1.6 million barrels a day that were exported pre-revolution.”

As with the devastation in Iraq and Afghanistan, the conquerors can be expected to seek payment for their services and to rebuild what they have destroyed via the impounded hundreds of billions of dollars of Libyan funds that have been frozen by imperialism’s more-than-cooperative banking and financial institutions. As the Aug. 28 New York Times so delicately noted, “With so much uncertainty over the governance Moises Samran / NY Times Roberto Schmidt / AFP / Getty Images (Top) School in Zlitlan, Libya, reportedly bombed in NATO airstrike, July 25.

(Below) Burned copy of “Green Book,” with cover photo of Gadhafi speaking at UN, in Benghazi.

of Libya, none of the money will be given to the rebels, but instead will go directly to pay for services [provided by imperialism] and fuel costs.”

The U.S./NATO war began when the Gadhafi dictatorship ordered its troops to open fire on a group of protesting human-rights activists. As with the anti-government mobilizations in Tunisia and Egypt, this was followed by massive protests that were violently repressed by Gadhafi’s police and military, which did not shrink from using its still intact ground and air power to quell the deep resentment that permeated Libyan society. Gadhafi’s decision to make amends with Sylvio Berlusconi’s Italy and Nicolas Sarkozy’s France, in the context of world capitalism’s economic crisis, could only be at the expense of the Libyan masses.

In the early days of these mass protests, there were unmistakable but only modest indications of the independent character of at least a portion of the antiGadhafi leadership, as when anti-government protesters unfurled massive banners from rooftops, declaring, “No Foreign Intervention: The Libyan People Can Manage It Alone.” Even then, it was not always clear whether opposition to foreign intervention referred to troops on the ground only, since major elements of the opposition had announced early on, and even demanded, support by U.S./NATO forces and a “no-fly zone.”

When a team of British secret operatives was captured by early anti-Gadhafi forces, they were summarily deported, an indication that at least a portion of the early fighters rejected any association with imperialist troops and other would-be liberators.

The United National Antiwar Coalition (UNAC) referred to the mass character of the early mobilizations against Gadhafi when it issued its “Statement on U.S. Non-Intervention in Libya and Other Countries,” declaring: “UNAC calls for an immediate halt to U.S. intervention in regions and countries where mass mobilizations are challenging oppressive regimes.”

The statement continued, “We have seen the horrific consequences of U.S./UN-imposed economic sanctions against Iraq, as well as the consequences of U.S./UN operation of ‘no-fly zones’ over northern and southern Iraq, prior to the U.S. Shock and Awe attacks and invasion.

“We therefore oppose any form of U.S. military or economic intervention in Libya, Egypt, Bahrain, Tunisia and other countries where movements are rising in opposition to dictatorships and military rule.” UNAC continues to oppose all U.S. intervention in Libya, North Africa, and the Middle East more generally.

Unfortunately, the mass and independent character of the anti-Gadhafi mobilizations proved to be ephemeral. They had been politically limited and poorly organized, and therefore incapable of overcoming what rapidly devolved into a self-appointed governmentlike formation consisting of assorted factions from the Gadhafi regime, including leading political figures and top military commanders. These were supplemented by a swath of returning capitalists with connections to imperialist forces and representatives of assorted anti-Gadhafi tribal and fundamentalist groups. Virtually all these “leaders” demanded and expected U.S./ NATO intervention to remove Gadhafi.

The conquest of Libya and the division of the spoils was moved to the top of the warmakers’ agenda. Libya, with some 3-4 percent of the earth’s known high quality, “sweet crude” oil reserves—and an important European supplier—was slated for permanent imperialist oversight, if not occupation. The European and American interveners brooked no voices to warn against or denounce the savage history of foreign intervention in the Arab world. They much preferred and selected the present mix of pro-capitalist Libyan oppositionists, who proudly sported and mass-produced the flag of King Indris al-Senussi, deposed by Gadhafi in 1969, and whose reign consisted in a permanent accommodation to world imperialism.

As we write, plans are in the works to establish an imperialist “stabilization” force to disarm the masses of Libyans who still retain the automatic rifles and other weapons captured from Gadhafi forces or liberally distributed by British, French, U.S., and other NATO forces parked at Misrata and other coastal ports. But disarming the population might prove more difficult than the imperialists originally thought. An Aug. 31 New York Times article entitled “Tripoli divided as rebels jockey over leadership” makes it clear that plans to stabilize Tripoli, not to mention several other cities, are uncertain.