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The Economic Crisis:It's more than Katrina

Courtesy People's Tribune

The ruling class is attempting to use the destruction brought about by Katrina as a smoke screen to hide the real reasons for the continuing deterioration of the people's living standards. Katrina's cost in human suffering is immeasurable -- but clearly the politicians aren't worried about that. The cost in material damage is in the neighborhood of $200 billion.

That is a lot of money to take out of an economy. Yet the criminal war against Iraq has cost $201,418,920,955 as we go to press and the cost is increasing by $1 billion a week. We have to look elsewhere for the reasons behind the economic crisis.

The real reason -- and workers know this instinctively -- is the constantly falling value of labor power. It is falling because labor power is cheaper to produce or at least cheaper to acquire. And why? Eventually, the price of anything on the market will fall to the value of the amount of socially necessary labor that goes into creating it. It might seem callous to talk about the cost of producing a worker, but the capitalist class calculates it down to the penny. Cut down the amount of necessary labor to produce it and you ultimately cut the market price. There is not a direct one to one relationship, but in the long run this is true. Labor replacing machinery -- robotics, automation, whatever you may call it -- is hitting the world’s working class hard and laying the foundations for a revolutionary change in society.

An example of this is that world productivity has risen 70 percent since 1973, while wages have risen 13 percent. It is cheaper to produce a worker today.

The electronics that produced robotics also produced a global labor market. The former Soviet Union , India and China entering that global market has doubled the global work force with practically no increase in capital. At the same time, ongoing technology is constantly cutting the demand for labor. The growing labor supply and the lowering of the demand for labor can have only one result -- the often referred to "race to the bottom." It also means the political strengthening of capital and a corresponding weakening of the political clout of the workers.

The process is deep in the so-called developing countries and is becoming clear in America . For example, last year’s real wages fell at the fastest rate in 14 years. Employment for young workers in the age bracket of 20 to 24 years old fell from 72.2 percent to 67.9 percent. Katrina caused none of this.

The outlines of the developing crisis are clear for all to see. Are we to sink deeper and deeper hoping for some good capitalist to lead us out of this impending crisis? They're the ones who created it. If we, the people do not intervene it is going to go from bad to worse.

The people of New Orleans must first visualize what kind of a city they want to rebuild before they can fight for it. In a like manner, the people must first visualize what kind of a country they want before they can effectively fight against this looming catastrophe. A competitive economy and private property brought us into this mess -- we cannot visualize it getting us out. The alternative is a cooperative society based on public ownership of the giant corporations. The people must visualize it, and then fight like hell for it.

The government cannot hide behind Katrina. That hurricane was terrible. Global capitalism is worse.

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