The Third Crisis of Capitalism

Frei Betto

The system is a cat with seven lives left. During the last century, capitalism faced two monumental crises: the first at the outset of the 20th century, as imperialism was emerging, economic liberalism giving way to the monopolies’ concentration of capital. The economic war for the conquest of markets led to a military one, WWI, and ended in a ‘solution’ to the left: the 1917 Russian Revolution.

In 1929 a new crisis developed, the Great Depression. In the blink of an eye, thousands of people lost their jobs, the New York Stock Exchange crashed, the recession continued for a long period of time, affecting everyone. The ‘solution’ this time was found on the right: Nazism, and as a consequence, WWII.

And now what?

The third crisis is different from the previous crises and is surprising in a number of ways. Countries which previously constituted the periphery of the system (Brazil, China, India, Indonesia) are doing better than the metropolis. Growth in these countries, this year, will surpass that of the United States and Europe. The pre-conditions for economic growth are better in this part of the world. Wages are rising; unemployment is down; credit is available and interest rates low.

Rich countries are facing fiscal deficits, unemployment (24.3 million in the European Union) and government debt. In Europe it would seem that history is repeating itself – at least to those of us who saw the movie in Latin America. The International Monetary Fund is administering national economies, intervening in Greece and Italy, and before too long in Portugal, while Germany as the supplier of credit has accomplished what Hitler could not achieve with military might, imposing the rules of the game, as it sees fit, on countries within the Eurozone.

As of yet, no way out of the current crisis has emerged. All of the measures taken by the United States have been palliative and there is no light at the end of the tunnel in Europe. The situation may, in fact, get worse with the predicted slowing of China’s economy and the consequent reduction in its imports. This could be disastrous for the Brazilian economy.

World trade has been reduced 20% and there has been continual de-industrialization of the economy which is affecting Brazil. Speculation, as much as production, is sustaining profits for companies. And the banks are promoting consumption with easy credit. Enjoy life! Until the buck stops and bankruptcy spreads like the plague.

So will the ‘way out’ of the third crisis be toward the left or the right? I am afraid that humanity is facing two grave dangers. The first is already obvious: climate change. This is exacerbated as food loses its use value and is priced according to the market value largely established by speculators.

In the so-called emerging economies, there is a growing trend to return to a focus on primary products. Countries like Brazil are going back in time, returning to dependence on exports of commodities such as agricultural products, oil and iron ore, at prices determined by transnational corporations and the speculative market.

In this global scheme of things, given the enormous power of transnational corporations which control so much, from genetically modified seeds to pesticides, Brazilian agriculture becomes a weak link.

The second danger facing humanity is nuclear war. The two previous crises led to world-wide wars which served as escape valves. Faced with massive unemployment, there’s nothing like the military industry to put the jobless to work. There are thousands of nuclear weapons scattered around the planet and even mini-bombs, which can be focused with precision on specific targets, like Hiroshima and Nagasaki.

There is still time to avoid the coming apocalypse and react – to find a way out of the intrinsically perverse capitalist system, a system disposed to dedicating millions to save the financial market while tuning its back on millions of human beings suffering in misery and poverty.

The only option we have is to organize hope and create, through a broad mobilization, viable alternatives which allow humanity, just as we say in the Holy Eucharist, to share the “fruit of the earth and work of human hands.”

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