Downloading PDF. Please wait... Issue 2485

Capitalism is teetering on the edge of crisis

This article is over 8 years, 4 months old
Issue 2485
Is another crisis around the corner?
Is another crisis around the corner? (Pic: Universiteitskrant Univers)

The New Year began with a new shock to global stock markets. For the first time ever, all of China’s main stock exchanges had to use emergency measures to halt trading after shares plummeted on Monday of this week.

Across the world markets sank. The knock-on effect was felt in Tokyo, Hong Kong, New York, Frankfurt, Paris and the City of London.

The trigger was China’s government releasing figures that showed up how weak its manufacturing growth was.

And it came alongside a diplomatic stand-off between two of the world’s biggest oil producers, Saudi Arabia and Iran.

The Saudi price war against the US had already sent oil prices into freefall since 2014.

If Iran joins the race to the bottom they could get lower still.

Will this be a flash in the pan, or could it be the start of a new global crisis?

Kit Juckes, from the top French bank Societe Generale, summed up the best analysis among the ruling class. “I didn’t see that coming!” he said.

Almost a decade after the global financial crisis began, recovery remains sporadic and fragile.

Almost a decade after the global financial crisis began, recovery remains sporadic and fragile.

Indebted “zombie firms” and weakened politicians lumber on, with no telling when they’ll next lurch into crisis.

Each time the economic crisis seems to be over it breaks out somewhere else.

It started with a “credit crunch” centred on the US.

Then it became a “sovereign debt crisis” threatening to tear apart the eurozone.

None of those places are out of the woods.

The US Federal Reserve central bank is only now trying to raise interest rates for the first time in nine and a half years.

In Britain the Bank of England dare not do even that. Both fear it could choke off what growth there is.

But now giant developing economies that were supposed to prop up the whole world are also in trouble.

Brazil is in a recession forecast to be its worst in over a century, and China’s growth hasn’t kept up with the burden of its debt.

That brings political turmoil—and imperialist rivalry on a scale not seen since the Cold War.

It shows up something about the capitalist system when it can be thrown into such turmoil by arbitrary numbers on a spreadsheet.

That doesn’t mean the next recession will start this week. But it’s a reminder that our rulers aren’t in control—and that they will take any problems out on us.

What the Tories call the “good times” have brought us staggering cuts, new wars and extreme weather.

Their bad times could bring even worse—unless we seize the chance to get rid of them and their rotten system.

Sign up for our daily email update ‘Breakfast in Red’

Latest News

Make a donation to Socialist Worker

Help fund the resistance