Leninist-International debate the World Crisis

Mark Jones Jones_M at netcomuk.co.uk
Sat Sep 5 02:03:49 PDT 1998

Leninist-International -- part of the Utah Marxism Space -- is launching a cyber-forum on the World Crisis.

To participate in this major Net seminar, simply reply to this email (press reply button) and your email address will automatically be added to the list. The Seminar will begin on 12 September.

Financial globalization has gone hand in hand with the globalization of corruption and crime and the interpenetration of organised crime, big business, the media and the political elites to form a seamless web of governmental, political, entrepreneurial and journalistic criminality, serviced by the banks and financial markets. The mass media even shares with us images of the directors of global delinquency: vulgar men and women, dressed outlandishly, living in ridiculous mansions or behind the bars of a jail . But the real influence in the political and economic circles are never divulged. Organised crime has ceased to be an alternative world outside the law; instead of the Chicago of Al Capone we have the Moscow of Yuri Luzhkov: the masterminds of crime have become public officials, law enforcement officers and celebrated politicians. The UN estimates annual global income of transnational criminal organisations at one trillion dollars, an amount equivalent to the combined GNP of the low income countries with their 3 billion inhabitants. This estimate includes drug trafficking, the illegal arms, trade, contraband of nuclear materials, etc., as well as traditional activities (prostitution, gambling, black market speculation...). But this figures hardly does justice to the real nature of the problem, for criminal organisations are massively involved in legitimate businesses. In Russia more than half of industry is now controlled by Mafia circles or the criminalised Financial-Industrial Groups (FIGs), which are the main achievement of post-Soviet 'reforms'. In reality, Russia is simply a playground for world organised crime and the Kremlin is the heart of Russian criminality. International organised crime have been the first to realise in practice the "spirit of global co-operation" and to participate in the conquest and reorganisation of the new markets . In addition to crime, their preferred legitimate businesses include luxury real estate, tourism, the mass media, industry, agriculture, public services and above all, banking. Laundered money is utilised by the commercial banks for loans, investments in financial markets, purchase of bonds for foreign debt, buying and selling of gold and stocks. "In many countries, the criminal organisations have become the creditors of the States and they exert, because of their actions on the markets, an influence over the macroeconomic politics of the governments. Over the stock markets, they invest equally in the speculative markets of finished products and raw materials." By basing itself on the fiscal paradises of the off-shore money centres, organised crime has helped create the borderless world of money which bourgeois politicians like Britain's Tony Blair proclaim as beneficial to the rest of us, insisting that the 'internationalising' of markets and financial flows in any case is an irresistible historical development to which, of course, There Is No Alternative. Thus the criminal activities of the world's 55 off-shore financial centres acts as a screen for the super-wealthy as a whole, justifying the abject failure of even the largest states to tax or even investigate their affairs, on the grounds that to raise income taxes is counter-productive: the wealthy can just 'go elsewhere'. Of these offshores, the Cayman Islands is the world's fifth largest banking centre and has more banks and registered companies than inhabitants). The Bahamas, Cyprus, Malta, the British Virgin Islands, the Bermudas, Saint Martin, Vanuatu, the Cook Islands, Luxembourg, Maurice Island, Switzerland, the Channel Islands, Dublin, Monaco, Gibraltar, Malta, are all centres of financial racketeering, but the greatest off-shore island is Great Britain, where the City performs irreplaceable services assisting organised crime to hide its assets and wash its blood-stained, drug-tainted money. Behind the blather of high technology in financial markets, of the 24-hour exchanges and the colossal sums of money switched from place to place at the touch of a button, is the sordid fact that organised crime has the world economy by the throat. Legal and illegal businesses increasingly overlap more and the Mafia channel legal money into criminal ventures just as they launder narcodollars through hotels, tourism and other cash-intensive businesses. Lack of transparency and the rules of banking confidentiality and anonymity screen this process; at this writing (June 1998) new UN-based initiatives to make global financial transactions more transparent have been announced. Don't hold your breath. No sphere of life is more corrupt and criminalised than the western political process. "Not only do the large banks accept laundered money, charging heavy commissions, but they also give credits to at high interest rates to the Mafiosi, to the detriment of productive industrial or agricultural investments." The 1980s world debt crisis impacted most sharply on neocolonies, particularly in Africa and Latin America, causing severe price deflation in world commodity prices. The loss of income and intolerable debt burdens (often incurred by corrupt regimes who later abandoned their countries, leaving populations who gained no benefit from the incurred debts, to foots the bills) together with the 'restructuring' policies dictated by dictated by the World Bank and International Monetary Fund, sharpened the crisis of the legal and directly led to the explosive growth of underground and criminalised activity to fill the vacuum. The United Nations reports that: 'The intrusion of crime syndicates has been facilitated by the structural adjustment programs with the indebted countries have been obliged to accept I order to access the loans of the International Monetary Fund.'


Of the world's 1.150 billion children more than 150 million live are homeless and 300 million are employed. 150 million Asian children work in sweatshops producing auto parts, toys, clothing, food, tools and chemicals. Child labour is not confined to the neocolonies. It exists in OECD countries such as France, the UK and the US. The UN estimates that each year a million children are sold for sex (Chi and Pilar, (1997). The number of refugees has grown from 2 million in 1975 to 27 million in 1995 according to the UN High Commission on Refugee. They flee from wars, intercommunal conflict and climatic and environmental degradation, soil erosion, desertification, lack of freshwater and rising sea levels in coastal areas. They are the most immiserated part of humankind, and a conscription-ground for neoliberal capitalism with its permanent instability and 'flexibility' creating both a demand for migrant labour and social tensions, unemployment and virulent racism among threatened host populations. A particularly severe loss to the neocolonies and peripheries is the 'brain drain' which suck desperately-needed talent to the metropoles. The largest 200 corporations only provide 18.8 million jobs -- less than three-quarters of 1% of the world's work force of 2.6 billion, In the 1960-1990 the world's economically active population grew from 1,376 1960 to 2,374 million. Thus less than 1 per cent of the world's proletarians produce around half of the total value. This tiny number of value and surplus-value producing workers bears an enormous, a historically-unprecedented burden: upon their shoulders essentially lies the task of valorising the entire, almost immeasurable quantity of global social capital. The distribution of labour by employment sector has changed substantially since 1970, when 30% of the world's workers worked in fishing and agriculture (15% in 1990); manufacturing employment fell from 25% in 1970 to 22% in 1990; the tertiary sector (commerce, transport, banking and services) grew from 42% in 1970 to 57% in 1990. During this period the world's urban population exceeded 50% for the first time. During the years of the decades of 1960 and 70's, the population considered poor (with less than a dollar a day of income for their basic necessities, according to the World Bank) was about 200 million people. By the beginning of the decade of the 90's this number was about 2 billion. In addition to this the mainstay of the 200 most important companies of the planet represent more than a quarter of the world's economic activity; and yet these 200 companies employ only 18.8 million employees, or less than 0.75% of the world's labour force. 6 billion people. Of them, only 800 million live with comfort while 5.2 billion live in poverty and levels of subsistence. Doubly absurd is the distribution among rich and poor: the rich are few and the poor are many. The quantitative difference is criminal, but the balance between the two extremes is secured with wealth: the rich supplement their small numbers with millions upon millions of dollars.

The fortune of the 358 wealthiest people of the world (thousands of millions of dollars) is superior to the annual income of 45% of the poorest inhabitants, something like 2 1/2 billion people. The gold chains of the financial watches are converted into a heavy chain for millions of beings. Meanwhile the "total number of transactions of General Motors is larger than the Gross National Product of Denmark, that of Ford is larger than the GNP of South Africa, and that of Toyota far surpasses the GNP of Norway" (Ignacio Ramonet, In LMD 1/1997 #15). For all workers real salaries have fallen, in addition to having to survive the personnel cuts in companies, the closing of factories and the relocation of workplaces. In the so-called "advanced capitalist economies" the number of unemployed has arrived at a total of 41 million workers. Little by little, the concentration of wealth in the hands of a few and the distribution of poverty among many begins to trace the profile of modern global society: what subcomandante Marcos calls: "the fragile equilibrium of absurd inequalities." The decadence of the neoliberal economic is a scandal: "The world debt (combining that of all companies, governments and administrations) has surpassed 33 trillion dollars, or 130% of the global GNP, and grows at a rate of 6 to 8% per year, more than 4 times the growth of the global GNP" (Frederic F. Clairmont. "Ces deux cents societes qui controlent le monde", in LMD, IV/1997. The progress of the great transnationals does not imply the advancement of developed Nations. To the contrary, while the great financial giants earn more, poverty sharpens in the so-called "rich nations". The chasm between the rich and poor is brutal and no tendency appears to the contrary, indeed it continues. Far from lessening, we won't say eliminating it, the social inequality is accentuated, above all in the developed capitalist nations: in the United States, 1% of the wealthiest Americans have conquered 61.6% of the total national wealth between 1983 and 1989. 80% of the poorest North Americans share only 1.2% of the wealth. In Great Britain the number of homeless has grown; the number of children who survive on social welfare has gone from 7% in 1979 to 26% in 1994, the number of British who live in poverty (defined as less than half of minimum wage) has gone from 5 million to 13,700,000; 10% of the poorest have lost 13% of their purchasing power, while 10% of the richest have gained 65% and in a period of the past 5 years the number of millionaires has doubled (statistics from LMD,IV/97). At the beginning of the decade of the 90's "...an estimated 37,000 transnational companies held, with their 170,000 subsidiaries, the international economy in its tentacles." Nevertheless, the centre of power situates itself in the most restrictive circle of the first 200: since the beginnings of the 80's, they have had an uninterrupted expansion through mergers and "rescue" buy-outs of companies.

In this way, the part of transnational capital in the global GNP has gone from 17% in the middle of the 60's to 24% in 1982 and more than 30% in 1995. the first 200 are conglomerates whose planetary activities cover with distinction the primary, secondary, and tertiary sectors: great agricultural exploitation, manufacturing production, financial services, commercial, etc. Geographically, they are divided amongst 10 countries: Japan (62), the United States (53), Germany (23), France (19), United Kingdom (11), Switzerland (8), South Korea (6), Italy (5), and others (4)". (Frederic F. Clairmont, Op.Cit.).

*LOWER COUNTRIES - loosely-translated as city-states, regions, autonomous zones - "Between 1983 and 1989 the top 20% of wealth holders received 99% of the total gain in marketable wealth, while the bottom 80% of the population got only 1%" (Edward N. Wolff, "How the Pie is Sliced," 1995). - "The combined wealth of the top 1 percent of U.S. families is about the same as that of the entire bottom 95 percent" (Holly Sklar, Jobs, Income, and Work: Ruinous Trends, Urgent Alternatives, 1995, p.9). - "The top 0.5% of wealth holders still own 32% of stocks - double the 16% share held by the bottom 90%. Bond ownership is even more top-heavy. The top 0.5% holds 46% of the total, while the bottom 90% holds just 10%" (Unpublished Federal Reserve technical paper, analysed by Left Business Observer, July 17, 1997). - "The United States is the richest country on the planet yet it has the greatest income disparity.... Sixty percent of all U.S. jobs created since 1979 pay less than $7,000 a year" (Fian Fact Sheet, Welfare by Corporations is Corporate Welfare). - "Over one in nine persons in the labour force during 1993 were living below the poverty line. Of these nearly 12 million workers, 70 percent (8.22 million workers) fit the category of working poor" (Denny Braun, The Rich Get Richer, 2nd ed. 1997, p. 238. Based on BLS data). - "The wages of the average non-college-educated male fell 10.1% from 1979 to 1989 and another 7.2% between 1989 and 1995" (The State of Working America 1996-97, Economic Policy Institute, 1996). - "The wages of a young male high school graduate dropped 21.8% in the 1980s and another 6.9% in the 1989- 95 period" (Ibid). - "A young female high school graduate earned 18.9% less in 1995 than in 1979" (Ibid). - "While 10.3% of Hispanic families were unemployed in 1996, 19.0% were under-employed" (J. Bernstein, "The Challenge of Moving from Welfare to Work," Economic Policy Institute, 1997). - "Among blacks 16-25, about 35% were under-employed in 1996" (Ibid). - "For most families, increases in net income have come from more hours of work, not increases in hourly pay" (Congressional Study: "Families on a Treadmill: Work and Income in the 1980s," January 17, 1992). - "Real hourly pay of wives increased for most families, but for 60 percent of families, the decline in hourly pay of husbands was greater than the increase in wives' hourly pay" (Ibid). - The total wages of all people who earned less than $50,000 a year -about 85% of Americans - increased an average of 2 percent a year from 1980 to 1989, which did not even keep pace with inflation. By contrast, the total wages of all millionaires shot up 243 percent a year (Internal Revenue Service). - "The cost of a college education rose more than 70% for private schools between the years 1977-1993, and more than 50% for public schools" (U.S. Centre for Educational Statistics; Figures are inflation-adjusted). - "Of the 82 women serving in state-wide elective executive positions, 3 (3.7%) are women of color" (Centre for the American Woman and Politics, 1998). - Percent of revenues for public elementary and secondary schools from the federal level averaged 7.0% between 1970-71 and 1994-95 (NCES, "Mini-Digest of Education Statistics," 1997, p.51). - More than 50% of today's college students will graduate in debt (National Association of Graduate-Professional Students). - Rate of tuition increases before 1978 was 1% below the inflation rate; since 1978 the rate has been more than twice the inflation rate (Ibid). - The student loan default rate in 1977 was 11%; in 1992 it was 22% (Ibid). - American students since 1990 have borrowed as much as the total volume for all of the 1960s, '70s and 80s combined (The Education Resources Institute, "College Debt and the American Family," 1995). - "Gaps in the academic performance of black and white students appear as early as age 9 and persist through age 17" (National Centre for Education Statistics, "The Educational Progress of Black Students," 1995, p. 3. - "Hispanic children start elementary school with less pre- school experience than white children, and this gap has widened over time" (NCES, "The Educational Progress of Hispanic Students," 1995, p. 2). - "Bankruptcies increased by 19 percent in 1997 to a record high of 1.4 million filings" (American Bankruptcy Institute, 1998). - "11.3 million children age 18 and under are uninsured - the largest number ever reported by the Census Bureau" (Children's Defense Fund, March 14, 1998). - "Approximately 13.6 million children under age 12 in the United States -29 percent - live in families that must cope with hunger or the risk of hunger during some part of one or more months of the previous year" (Community Childhood Hunger Identification Project). - "33.1% of all African Americans, 30.6% of Latinos and 18.8% of other non-whites live in poverty, as compared to 9.9% of White residents" (Cynthia Taeber, The Statistical Handbook on Women in America, 1996, p.145). - Hunger in the U.S. has increased by 50% since 1985 (Centre on Hunger, Poverty and Nutrition Policy, Tufts University, 1993). - Between 20 and 30 million Americans suffer from hunger (Congressional Hunger Centre, 1995). - Approximately 20% of American adults do not have a high school diploma (U.S. Census Bureau, 1990). - "Each year, almost 5,000 young people, ages 15 to 24, kill themselves. The rate of suicide for this age group has nearly tripled since 1960" (National Mental Health Association, 1997). - Over 1.4 billion people in the world live in abject poverty, surviving on less than $1 US a day. Another 3.3 billion people live in extreme poverty (United Nations Human Development Report, 1997). - By 1996, 36.5 million Americans lived in poverty (U.S.Bureau of the Census, 1997a). - Despite its recent increase, the minimum wage remains 15% below its average purchasing power in the 1970s, after adjusting for inflation (Kaufman, 1997). - In 1996, approximately 41.7 million Americans had no health insurance (U.S. Bureau of the Census, 1997b). Another 40 million had only limited coverage. - The average income of families in the middle fifth of the income distribution fell in 25 states between the late 1970s and the mid-1990s" (Centre on Budget and Policy Priorities, Pulling Apart: A State-by-State Analysis of Income Trends, December 16, 1997). - White, black and Latina women, respectively, earn 75, 65 and 56 percent of white male wages (The International Association of Machinists and Aerospace Workers, 1996). - Ninety-six percent of top executives are men (Ibid). - "Women make up nearly 70% of the world's poor and more than 65% of the illiterate" (International Labour Organisation, "Women Swell Ranks of Working Poor," 1996). - "In industrialised countries, much of the growth in women's labour force participation has been in part-time jobs. Women make up between 65% and 90% of all part- timers in OECD countries" (Ibid). - "Everywhere, women are paid less than men, and there is no indication that this will change soon. The majority of women continue to earn on average about three-fourths of the male wage outside of the agricultural sector" (Ibid). - "In 1978, corporate CEOs, or chief executive officers, were paid 60 times what the average worker earned. By 1995, CEOs had increased their pay to 173 times the average worker's income" (Ibid Aslam, U.S. Rich Benefit at the Expense of the Poor, Third World Network). - Percentage of persons below the poverty level was 12.6% in 1970, 13.0% in 1980, 13.5% in 1990, and 14.5% in 1994 (U.S. Census Bureau, Current Population Reports, Series P-60, No. 188, 1995). - "In the United States, where overall violent crime against women has been growing for the past two decades, a woman is physically abused by her intimate partner every nine seconds" (UNICEF, The Progress of Nations, 1997). - "The US, with just 5 times the population of Italy, has 150 times more children in detention" (Ibid).

Share of global income going to richest 20% and poorest 20% of world's population: year share of richest 20% share of poorest 20% ratio rich/poor 1960 70.2% 2.3% 30 to 1 1970 73.9% 2.3% 32 to 1 1980 76.3% 1.7% 45 to 1 1989 82.7% 1.4% 59 to 1

[UN, Human Development Report, 1992] - The U.S. has the highest infant mortality, AIDS, road accident, pesticide consumption, homicide, reported rapes, imprisonment and hazardous waste production rates among Switzerland, Japan, Sweden, Denmark, Norway, Germany, Austria, France, Finland and Canada (The World Bank, World Development Report, 1994 and UN, Human Development Report, 1994).

Military Budgets, 1996/97 ($billions) U.S. $260 Germany $42 Russia $82 U.K. $34 Japan $50 China $32 France $48 Italy $20

[The International Institute for Strategic Studies: The Military Balance, 1996/97] - "Between 1979 and 1994, the total number of unemployed in the G7 -Canada, France, Germany, Italy, Japan, United Kingdom and the United States - rose from 13 million to almost 24 million, along with 4 million unemployed who have stopped looking for work, and 15 million who work part-time but would rather work full- time" (International labour Organisation, 1996). - "Since 1990, an additional 300 million people are making do without decent sanitation" (UNICEF, The Progress of Nations, 1997).

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