Presentation on the international economic situation, for the Fifth International Conference of the Via Campesina in Matola, Mozambique on October 20, 2008.

The Nature of the Current Phase of Capitalism

Capitalism is in a phase of imperialist globalization, in which its means of production and its laws (such as exploitation of labor, appropriation of the surplus value, accumulation, concentration and centralization) dominate the economy of all the countries of the world. In this phase, the principal sphere of accumulation of wealth of the capitalists is located in finance. The capitalists who earn the most wealth are those who have more capital in the form of money.

They transform their capital (goods) into money. And they use this money capital, in order to appropriate the surplus-value created by the productive sector. This appropriation is by means of a levy on interest, a levy on public utility services (capital applied to companies that supply electricity, telephone, water, etc.), by means of  royalties, by speculating on the purchase and sale of stocks in the most profitable companies, and by speculating in the international stock markets in the agricultural commodity and mineral markets.

The result of this process of capitalist development brings a concentration of capital worldwide for about 500 large corporations (which control more than 50 percent of the Gross World Product) and from the great exchanges of stocks and merchandise.

Due to the information and technological revolution of the last twenty years and the globalization of the market, this financial capital greatly increased its velocity as applied to speculation. The same value can appear on the same day, in three different exchanges, on three continents. This process greatly increased the velocity of accumulation of financial capital and brought the contradiction wherein there is an ever greater divorce from the real productive base of value, of surplus-value produced in the productive sphere.

The Nature of the Current Crisis

The current crisis has a natural cycle, which results from the normal logic of how capitalism functions. This time the cycle has been aggravated by a combination of the following factors:


•    A large volume of financial capital had recently been transformed into paper, in governmental bank notes, into IOUs, and loans, without any tie, as with cash, to the production of goods.
•    The government of the United States abused its ability to print and issue money, as a way of financing the US trade deficit (imports greater than exports). Increase in the scale of speculation in the commodities markets, dissociated from actual production.
•    The high cost of the wars in Afghanistan and Iraq.
•    As there was a lot of money circulating, three to 10 times greater than the value of the goods in the market, the interest rate fell. In that way, many capitalists went and used this financial capital on the merchandise and commodities markets.
•    The price of foods became untied to their value and is barely affected by the cost, due to speculation and the oligopoly-like control that the large corporations have over the world markets. For this reason, food prices have been alternating between high and low, independent of value or cost.
•    Speculation in the stock exchanges raised the price of oil in an exaggerated way.

Consequences of the Crisis

The corporations, banks and investment funds that have more capital/money in the form of paper transactions, without a base in real goods, were the first to fail and break. And since they are interconnected to the world, when one goes bankrupt, it pushes others, since they have paper of the bankrupt company. There will be a destruction of trillions of dollars (up to now more than thirteen trillion dollars have disappeared) in financial capital, expressed only in paper. Their capitalist owners lost.

The companies of the productive sector having the most difficulty are those who used part of their capital in financial and currency speculation, or who depend on banks for their liquidity.

The governments are using national savings (surplus social value accumulated from the whole world) and guarded in central bank reserves and national treasuries, to rescue and not allow these large companies to fail. They pass along this capital, buying stocks, giving extraordinary loans and opening lines of subsidized credit.

The money collected from working people, in the metropolitan and peripheral countries, is being used to save capitalism. It is impossible to determine (for such a determination would entail an exhaustive study of economic, social, political and ideological relations) the depths to which this crisis will descend, or how long it will last. Nevertheless, it is possible to affirm from an economic viewpoint, this crisis will produce a greater concentration of income and wealth, will diminish the tempo of production of real goods, will cut employment and income levels, in order to increase the transfer of wealth. The large companies and finance capital will increase pressure to control and skim off profits from the wealth of nature: land, water, minerals, energy, biodiversity. Since nature is the final  frontier for the appropriation of capital, that is where the greatest profits can be realized. The large corporations will increase their level of exploitation of the countries on the periphery, increasing profits, in order to transfer this wealth to its centers and save them from the crisis.

There will be a greater control of agriculture by the large  companies. Since they have to increase their share of wealth, this will  also diminish the margin of profit for the landlord-capitalists in the agricultural export countries. These crises are part of the ordinary  functioning of capitalism. At each crisis, capitalism renews itself,  re-concentrating wealth and expelling the least efficient capitalists. The  current crisis, since it is global, is developing international mechanisms of mutual help, between governments, states, to save the large capitalist  companies. The effects of the current crisis will be less tragic and  violent than the crisis of 1929, because financial capital is responding  more, and also because in the whole world, we already have about 50% of the whole economically active population outside of the productive sector.  Due to that, this crisis will be more durable. which is to say it can last  several years, while it reconstitutes its bases in real production, which  sustains financial capital. The working class of the cities and the  countryside will continue, in shock, watching the movements of governments  and capitalists, without understanding the nature of the crisis and its likely consequences on conditions of life. For this reason, it is  inert, and does not react. The capitalists and their capitalist mode of  production only suffer defeats in the crises, which can open space for a  decrease in exploitation and improvement in the conditions of life of the  population, whereby the working class joins forces to create a large political mobilization. Which is to say, capitalism does not lose by  itself, but rather renews itself. Capitalism only loses if there is a class struggle, a political struggle of the working class, the producer of  wealth, against capital.

Contradictions of the Crisis that the Working Class Can Utilize

The international organizations will live through these demoralizing crises: the IMF, the World Bank, the WTO and the FAO have demonstrated that they serve no purpose. They cannot prevent these crises, and much less resolve them, even in the interest of capital.

There will be ideological changes in the behavior of the dominant class. One perceives that neo-liberal sectors have been ideologically defeated (the Chicago School, Fukuyama…) Now the ideologues of neo-Keynesianism will rise up, who defend government intervention to regulate the economy, for their interests. (Very symptomatic was the designation of two Nobel Prizes, in economics and peace, that reveal this new ideological hegemony.)

The United States will lose its political hegemony. It no longer has the morale to control the world. The political strength of Europe, Russia and China is growing. And certainly there will still be disputes among them, since a contradiction was generated between the economic and the military power of the United States, that still has its companies and its state and what remains of its political force.

The dollar will lose its universal role.

Probably industrial agriculture will lose strength, since it is even more dependent on high levels of credit, of financial capital, that will be impacted by this crisis.

Reflections for Our Political Debate

Via Campesina International needs to apply all its energies, to spell out all the popular forces at the international level, in our countries, on our continents, to take the initiative to create a movement that can stimulate the political struggle and obtain some victories from this situation of crisis.

Some demands that can motivate mobilizations throughout the world:

For  the end of the dollar as an international Currency.

For the end of the WTO, IMF, World Bank. Substitute for them a new international order, that generates other organisms, with the participation of society and popular forces.

For an immediate withdrawal of all foreign military forces abroad in all the countries of the world, starting with a withdrawal from Afghanistan, Iraq and Haiti. Close all the foreign military bases in existence (more than one thousand).

For the defense of a new economic order of global production, based on the priority of food production, employment-creation, decent housing and education for everyone.

For the control and popular sovereignty over natural resources: land, water, oil, minerals, energy and biodiversity.

For  national and popular sovereignty.

For this reason we need:

To call national meetings of all the popular forces in existence, in a unified manner, to debate the processes of popular mobilization during this crisis.

To call continental meetings of all the popular forces.

To prepare a large popular mobilization, in all the countries and at a world level.

To confront the transnational companies and the foreign banks in all of our countries, with mass actions.

To connect with progressive governments and propose the calling of an extraordinary international Conference of all the periphery countries, the non-aligned, with the participation of governments and popular forces.

To build in the meantime a worldwide unified protest, of general grievances, marches and direct actions.

MST is Brazil’s Landless Workers Movement, or in Portuguese Movimento dos Trabalhadores Rurais Sem Terra (MST) .It is the largest social movement in Latin America with an estimated 1.5 million landless members organized in 23 out 27 states. The MST carries out long-overdue land reform in a country mired by unjust land distribution. In Brazil, 1.6% of the landowners control roughly half (46.8%) of the land on which crops could be grown. Just 3% of the population owns two-thirds of all arable lands.