A Short Thesis: Two necessary steps in resolving the current world financial crisis

The endeavour by the states of different nations (whether industrially advanced or in the ‘developing’ phase) in finding a solution to the current financial crisis within the national boundaries in the context and mindset of post war Keynesian economy (John Maynard Keynes, 1883-1946), to say the least, is doomed and bound to fail. The reason is quite trivial:

In contrast to the Wall Street crash of 1929 and the depression that followed there after (mass unemployment, hyperinflation, rise of fascism in the most advance industrial countries(Germany, Italy, Great Britain…) and the World War II (which was NOT inevitable, had it not been for the betrayal of labour movement by traditional parties, the appeasement of Nazi Germany by the British Government, the Nazi-Soviet pact over Eastern Europe between Soviet leader, Josef Stalin, and the Third Reich, Adolf Hitler,… with its devastating consequences for the human race)), the current financial crisis has manifested itself on the scale, unprecedented.

Ever since birth of the industrial revolution and the emergence of bourgeois or capitalist means and relations of production as the dominant socio-economic formation, the periodic crisis of overproduction, inherent in the system which its sole purpose is to realise the highest rate of profit with no regards for political and socio-economic consequences, has been occurring now and again, each time on a broader, more devastating, and severer scale.

The current financial crisis originated in the United States of America. Within a short span of time it encompassed the economy of every single nation on the planet. It has taken by surprise and has affected the life of every single individual regardless of social position or status, including all the head of states, their respective minsters, their advisors, the national and international banking and bankers, all financial institutions, the political economists, the academia, the stock brokers, capital investors (big or small, alike), all finding it difficult in coming up with an effective and plausible solution which is NOT at the expense of the workers and the working population, i.e. those who generate the wealth of the nations.

In the words of British Primer Minister, Gordon Brown, and I quote, ‘This is a global problem, we need to find a global solution’. So, he states the obvious for the British and International Communities, prior and during the Labour Party Conference. However, what happens next? Alistair Darling, the British Chancellor of Exchequer, and Gordon Brown rush to G7 summit in New York City, the head quarter of the United Nations, in an attempt to find a solution to the current worldwide economic crisis, and they do so by excluding all the rest. Moreover, while the British companies are constantly searching for cheap labour power on the world market, outsourcing off shore their need to Indian Sub-Continent and the Far Eastern countries, the British Government announces, in an effort of course to protect the ‘national’ labour market, the need to restrict immigration from outside European Union, with the help of media and popular press, selling the ‘news’ to the working population, whether British or immigrants. One cannot help but wonder whether these contradictions in response to the
crisis are some confusion on the part of the British establishments and the minsters or they are some sinister political appeal to national chauvinism and patriotism with devastating consequences, if they remain unchecked and unchallenged?

In the light of the short analysis above, naturally two steps are necessary, but by no means sufficient, as indispensible prerequisites for resolving, in the longer term, the periodic crisis of overproduction and the current and future economic crisis, inherent in the underlying relations of production:

a)The need for a single currency on the world market, say  M, under the full control of world community and a single global bank, 
say  Bank M.  

b) A universal minimum average exchange value, determined by the average standard of living and productivity of labour on the global scale, for the most important commodity on the world market, i.e. the labour power, in terms of the former, i.e., M, say 10 units of M / hour (expressed in relation to the exchange value of pure Gold given the average productivity of labour of the average mining conditions, for historical reasons, as the universal commodity for the exchange of commodities, for the exchange value of M, in relation to the exchange value of the labour power on the global scale).  

These two steps are necessary prerequisite but may I add once again that by no means sufficient in order to bring about a lasting solution to the devastation caused by the down turn in the economic cycle. Moreover, it goes without the need to add that it requires sincere efforts on the part of every single nation and respective government or state for the implementation and realisation of these two necessary steps or measurers.

It is not difficult to appreciate why these two steps are required, all implicit in the above analysis. However, (a) will put an end to all the currencies speculations and hence fluctuations on stock markets.

Majid Shabpar
London, Nov. 8 2008