In this column I pointed out again and again that the crisis in capitalism has reached a level that demands a fundamental change in the system. No system can be accepted to be stable, if millions of humans are left out.

The main reason for the crisis is the fall of rate of profit, due to the advancement of methods of production. Better systems and new technologies allowed, reducing the participation of Labour, in the process of production. While some are working almost 24 hours, linked to production through online facilities, others are humbly dependent on state welfare.

This is how capitalism based on profit system has distributed work. While the division of Labour is such. Fall of rate of profit will compel the investors to turn towards formal and informal gambling.

I said in this column on 19/10/08;

“Immediate reason for this breakdown is the risk taken by speculators. As long as there is an assurance that the state will intervene to rescue, there is no real risk for speculation. So, it is not ‘short sighted speculation’ but unethical and callous activity of the financial players that effected the situation so badly. When the rate of profit goes down it is not useful to invest in any productive sector, especially in sectors with most modern technology. Speculation, credit frauds, stock swindles and even plain gambling may be attractive serious activities for somebody who could borrow money. Strangely enough all these were explained in Das Capital by Karl Marx.”

What the capitalist pundits told us was that poverty, misery and unemployment was no more and capitalism has found a way out of the ills found by Marx. One ex-Marxist told me “only problem left for Marxists to solve is the parking problem for the proletarians”.

Of state capitalism

However, some 80 years after George Orwell chronicled the lives of the hard-up and destitute in his book Down and Out in Paris and London, what has changed? Retracing the writer’s footsteps, Emma Jane Kirby finds the hallmarks of poverty identified by Orwell - addiction, exhaustion and, often, a quiet dignity - are as apparent now as they were then.

She says;

“poverty hasn’t left Paris or London - she’s simply changed address. She may not look quite the same as she did in the 1920s, but if Orwell were to meet her again on these streets, he’d know her straight away. And I doubt he’d find her greatly changed.”

Emma who went to see a welfare centre in Paris for the unemployed continued;

“We watch the steady line of people, Europeans, Maghrebians and West Africans, methodically trudging from table to table, collecting their rations and stuffing them quickly into a pram hood or caddy. Despite the animated cheerfulness of the staff, I notice not one of the customers meets their eye as they take the food parcels. Shame, Claudine - who is French - tells me, is what links everyone here. She’s told no-one that her weekly shop is a hand-out and she doubts anyone else here has admitted it either.”

What is the way out? On 16 Nov. 2008 in this column referring to Obama I said;

“The only path he could take is the path of state capitalism. State capitalism could be used not only in America but also on the international plane. The IMF, the WB and the WTO should be used to monitor all investments and the so-called development projects as suggested by Joseph Stigltz. The trio should be used to check ecology balance, environment hazards and world food production. Immediate steps should be taken to bring down barriers on migration and the flow of Labour. Steps could be taken to convert the United Nations assembly into a true democratic assembly. That could be a means to abolish nuclear weapons and war as a method to resolve conflicts. Every aspect of democracy should be promoted in all dimensions. I do not believe he could at least be a good state capitalist, but it is a pleasant dream for the moment.”

In spite of my disbelief he took the path I envisaged. It shows that the pressure of the working class both in America and elsewhere. But reaction was inevitable. As soon as crisis settled momentarily, the so called free market conservatives hit back hard. Even the IMF was affected by the backlash of the conservatives and the ‘socialist’ Khan who led this institute disappeared into wilderness. I believe that has created a bigger problem for capitalism and that could be seen in the events unfolding.