The end of capitalism as we know it?

Morbid headlines are starting to appear in the Polish media just as they have elsewhere - we are facing the “worst financial crisis since 1970s…no, 1940s…no, the Great Depression!” What a load of nonsense.

A few months ago I was talking to a British bloke here in Warsaw. He was a member of the old Trotskyist Militant faction, an entryist organisation within the UK Labour Party that I knew well when I was involved in the Poll Tax unions of the early 1990s. That was quite a while ago but the rhetoric is undimmed by nearly two decades. “We are heading for a showdown,” said my Trotsky friend. “Environmental crisis, and capitalism is facing its greatest meltdown since the 1930s. We live in interesting times. It gives us great opportunities politically,” he said knowingly.

I couldn’t believe my ears. Did lefties still talk like this, these days? Are they still waiting for the inevitable collapse of capitalism?

That kind of thinking, then, might be still alive, but not so well, on what is left of the cranky leftwing. No surprise, really, I suppose. But my friend’s catastrophist thinking has become almost mainstream today. Everyone is talking about the crisis in the financial sector in the US and elsewhere as if it really was the greatest economic crisis since… well, the Great Depression.

See the skies raining bankers and brokers as they take their last step, from a tenth story window!

Last month, the British press reported that UK finance minister, Alistair Darling had “let the cat out of the bad” when he announced that Britain faced the worst economic conditions since…1948![?] Quite why the chancellor chose 1948 as his Year Zero is still a mystery to me. Why not 1947, or 1949?

Darling was quite obviously talking out of an orifice not designed for the talking out of.

My dad was alive in 1948 and I remember him talking of rationing, which was still in existence then in Britain. There were chronic shortages of many things, including labour. Those post-war years were dark and difficult for most.

Darling’s 1948 bull, however, looks almost sensible compared with some other doom mongers, who, like Mr Militant, think a new Great Depression is coming. But let’s look at that real Great Depression and see what it had in common with the banking crisis of today.

What they do have in common is that both then and now, problems started in the US. In the first ten months of 1930, 744 American banks failed. Prices and incomes fell on average around by 20 to 50 percent during those years. At its worst point in 1933, 25 percent of Americans couldn’t find work. Between 1929 and 1932 the Times index in New York declined by 89 percent. Poverty was endemic. More than half of Americans were living below subsistence level. In 1930, GDP shrank by 9.4 percent!

Sounds familiar today? No, it doesn’t, does it. And nobody is expecting growth to fall by nearly 10 percent. In fact, what is expected is that growth will remain sluggish in western Europe and the US…maybe even dipping below zero for a time. Unemployment today is not expected to rocket over 10 percent. Mass poverty is not about to return.

In Poland, they are starting to get media alarmist too. But it never will reach the hysteria that is now sweeping our great commentators and politicians in western Europe and the States. Poles remember hard times just gone past. Nothing is going to be worse than the 1980s. The economy is growing by 6 percent, will slow to something like 4 percent. And though the price of bread is rising like a particularly lively yeast culture, it won’t be going up by 100 percent overnight, as the communist had an annoying, and very dumb, habit of doing every ten years or so.

There is an unforeseen element in all this that is hard to predict. But if my friend Mr Trotsky, from Tunbridge Wells, wants a revolution then he had better sharpen up his ideology, and maybe even power of hypnosis - he‘s gonna need them - cause he will not be stepping from the ruins of capitalism and sweeping into the Presidential Palace, just yet.