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Socialism in the 21st Century
Marx was right
Capitalism's abject failure to provide the vast bulk of humanity with the material means for a dignified existence is not only due to the greed of individual billionaires or the failure of politicians.
If it were, changing society would be a far simpler question of reforming the excesses of capitalism and dealing with the bad apples. But inequality and poverty are part of the fundamental nature of capitalist society.
Over 150 years ago Karl Marx and Friedrich Engels wrote The Communist Manifesto. It has become the most influential political pamphlet of all time. In 1999 a new edition entered the bestsellers list. Marx and Engels were the founders of scientific socialism. In The Communist Manifesto, and later works such as Marx’s Capital, they were the first to give a thorough and scientific analysis of the laws and workings of capitalist society: why it results in the polarisation of wealth and, vitally, how it can be overthrown.
In the last few years their ideas have been regaining popularity. At the end of 1999 Marx was voted the ‘greatest thinker of the millennium’ in a BBC online poll. Even some capitalist commentators and Wall Street traders have reread Marx and realised how clearly he described capitalism as it is today.
The journalist, Francis Wheen, wrote in his biography of Marx:
Even the right-wing tabloid, the Sun, felt impelled to declare in an editorial that "Marx was right". Marx’s ideas are, of course, not new. However, for us the important question has to be: are they outmoded, or do they accurately describe the world as it exists today? We would argue that the fundamental tenets of Marx’s ideas are as applicable today as ever. Despite the age of Marx and Engels’ theories, they are thoroughly modern.
This does not mean that everything they wrote in the 19th century was correct in every detail or has been confirmed by events. On timing and the proximity of the socialist revolution and on some other issues they were mistaken. Many of the demands drawn up in 1848 are now obsolete. Moreover, society today is in many ways very different to then. Nonetheless, an amazing amount of what they formulated about society is as relevant today as when it was written.
It is the economic crisis of capitalism internationally that has forced many commentators to reassess their view of Marx. In January 2001, Time Magazine had a front cover depicting the economic crisis that was bearing down on the US. The headline was, Here Comes the Slump. Their main feature commented:
Reality has hit some commentators between the eyes and has forced them to partially recognise Marx’s analysis of the nature of capitalist crises which, he explained, were intrinsic to the system. Capitalism is a cyclical system: crises can be triggered by a number of factors, such as financial crashes or political unrest.
However, the underlying reasons for crisis are the fundamental contradictions of capitalism as first described by Marx. These include the antagonism between the social, collective nature of production on the one hand, and private ownership of the means of production on the other; and the antagonism between the world market and the limitations of the nation state.
Capitalism is based on production for profit and not for social need. The working class creates new value but receives only a portion of that new value back as wages. The capitalists take the rest – the surplus. As a result, the working class collectively cannot afford to buy back all the goods it produces.
The capitalists partially solve this by ploughing a proportion of the surplus back into industry, but this results in the production of more goods which, at a certain point, actually intensifies the problem. The inevitable results are crises of overproduction and overcapacity. In the long term, the capitalists cannot overcome this problem. As a result, capitalism is a system riven by crisis.
While some commentators have accepted that Marx predicted the fundamental features of the modern economy remarkably well, in general they shy away from the conclusions that he drew. Marx famously declared:
This does not mean that Marx saw nothing positive in capitalism. He recognised that capitalism, despite all its brutality, played a necessary historic role in developing the productive forces and the world market. It was therefore an advance from the feudal societies that preceded it. Today, the idea of capitalism as a progressive force is unthinkable to most of those involved in the anti-capitalist movement. Yet capitalism has developed the world market and the enormous wealth, science and technique that have laid the foundations for a socialist society.
Under capitalism, however, wealth and power have always been concentrated in the hands of a minority – the capitalists. And the development of technology is not driven by any rational means but by the need for profit. Capitalism is completely incapable of fully harnessing the productive forces it has brought into being. This is a system where science and technique are only ever used partially and inadequately. And the anarchy of the capitalist market always results in increasing wealth and power for a few alongside poverty for the many.
The capitalist class
As Marx explained, the capitalists are those who own the means of production. They own the factories, banks and offices. Marx’s prediction that capitalism would lead to an ever-increasing concentration of wealth in the hands of a tiny minority and the increased exploitation of the vast majority worldwide is graphically borne out by the reality at the beginning of the 21st century.
Today the capitalists are a far wealthier and a far smaller class than they were in Marx's time. Capital has been concentrated in fewer and fewer hands at the same time as it has grown beyond the wildest dreams of the Victorian capitalists. In the last 50 years the wealth gap between the richest 20% of humanity and the poorest 20% doubled. Individual multinational companies have become richer than entire countries.
The world’s 100 biggest companies now control 70% of global trade. Any one of them sells more than any of the poorest 120 countries on the world export market, while 23 of the most powerful sell more than even semi-developed countries such as India, Brazil, Indonesia or Mexico.
The working class sells its ability to work to these people who maximise their profits by paying as little as they can get away with. As far as the capitalists are concerned, as long as we have enough to live on and can ensure that our children -future generations of workers - survive, we have plenty.
In many countries of the world that is all that workers get - enough for a bowl of rice and a floor to sleep on at night. In Britain, over many decades, workers have won more than that - the right to join a trade union, to vote, a National Health Service. However, the capitalists use any chance they get to try and take these things away from us. Anyone who has lived in Britain over the last 20 years knows that.
Year after year our living standards have been eroded by cuts in healthcare, education and benefits, longer working hours and worse pay. Like acid on metal, the drip, drip of cuts has eaten away at our standards of living and turned us into one of the poorest working classes in Western Europe.
Marx explained that capitalism is the first society based on the mass production of commodities. In previous feudal societies goods were produced by individuals or families, primarily for the use of their lords and masters, as well as for their own personal use. Any production of goods for sale was on a small scale.
By contrast, under capitalism, goods (commodities) are mass-produced on machinery owned by the capitalist class. The capitalist class does not make commodities itself, it pays the working class to do that. The commodities produced then enter a process of exchange in which the capitalists attempt to sell them to make a profit. Under this system, market relations dominate every aspect of our lives. In other words, the inner logic of capitalism is that everything – even art, literature, sex and sport – becomes a commodity to be bought and sold.
There are those who argue that this is no longer wholly true. For example, in her book No Logo, the anti-capitalist Naomi Klein seems to argue that the multinationals now sell 'brands' and 'lifestyles' rather than simply selling commodities as they did in the past.
It is true that the huge multinationals such as Nike and McDonald’s spend vast sums promoting their brand images. However, no matter how overwhelming the advertising, their aim remains the same as it did in the past - to sell commodities. They use brand image to secure a bigger share of the market than rival products, but if McDonald’s or Nike stopped selling burgers or trainers they would still go bust.
Marx explained that the underlying value of commodities is determined by the amount of ‘socially necessary human labour’ used to produce them. Of course, he understood that the reality of the market is far more complicated than that. Supply and demand, shortages and overabundance all mean that the prices of commodities fluctuate around the underlying value. Nonetheless, it is the labour of the working class which ultimately determines the value of all commodities.
How is the working class exploited?
All workers sell their labour power. This is a commodity to be bought and sold like any other. We receive a certain sum of wages in return for selling our time. How is the value of labour determined? Why does a manager receive more than a secretary? Who decides what a journalist is paid, or a checkout worker, or a bricklayer? The answer is horrifyingly simple: the value of 40 hours’ labour is decided in the same way as the value of anything else. It depends on what it costs to produce 40 hours of labour!
What does that mean? It means what it costs to keep a man or woman in a fit state to do 40 hours’ work. In other words, if an employer wants those hours worked, he or she has to pay enough to produce those 40 hours of labour or, to be more exact, enough to produce a man or a woman capable of performing it. Skilled workers are paid more simply because it costs more to 'produce' them – to train them to do their job.
As with any other commodity, supply and demand means that the price of labour fluctuates around its underlying value. At bottom, however, the capitalists have to pay enough for a man or woman who is capable of doing the job to live on and to bring up children to do the work for the next generation. From the bosses’ point of view, why pay more than this?
Why pay more than enough to secure a supply of the commodity required? In fact, employers would probably not be able to pay more even if they wanted to because someone else would pay less and undercut them. Capitalists can only be forced to pay more by the collective struggle of the working class.
Labour is like, but also unlike, other commodities. It is different in that labour creates new commodities and new value. For the capitalist it is like the goose that lays the golden egg. This, Marx argued, is the root of the exploitation of the working class. The working class is never paid the full value of its labour. The capitalists pay workers what is necessary for our survival, what Marx called ‘necessary-product’. The rest, which the capitalists expropriate, is called ‘surplus-product’.
How much goes to the worker and how much to the capitalists is not fixed. It is a living struggle between the classes. Speed-ups, increasing working hours, cutting tea breaks, stopping bonuses, and the introduction of performance-related pay, all result in the boss getting a larger proportion of the surplus product. On the other side, cuts in the working week and improvements in pay or working conditions increase the workers’ share of the surplus product.
What is the working class?
Today it is fashionable to assert that the working class no longer exists. New Labour claims that we will soon all be middle class. So-called 'experts' on the economy talk about how we now live in a knowledge-based society where all you need is access to the internet to escape from membership of the working class.
The truth is very different. In reality, Britain is returning to an ‘Upstairs, Downstairs’ economy, more akin to the Victorian era. The fastest growing sector of the labour market belongs to those who clean, shop, child mind or garden for others. Low wages and long hours are the norm for working-class people. More and more workers have to take on several jobs just to survive.
As one journalist stated in The Guardian on 6 June 2000:
When Marx talked about the working class he did not simply mean people who wore flat caps or the equivalent stereotype in the 19th century. He defined classes not by a superficial façade (what kind of car someone owns or whether their house is pebble-dashed) but by both an economic and a social definition.
In Marx’s day the average worker was more likely to sell their ability to work in a factory. Today in Britain, millions still work in factories but there are others working in different fields who, nonetheless, produce new value. Others again do not strictly fit this category but are part of the working class because of their social outlook and their economic situation – their wage level and standard of living, etc.
Contrary to popular opinion among the chattering classes, the working class is not disappearing. In fact, it is objectively stronger than it was in Marx’s day. When Marx and Engels were writing the working class was a minority worldwide. The working class was growing but large sections of the population were still artisans, small shopkeepers, peasants, and small-business people.
Now, in Britain and other economically advanced countries, those of us who rely on wages make up the overwhelming majority. Of course, some people – the unemployed, pensioners and many single parents – have to survive on the meagre pittance provided by state benefits. They are still members of the working class and the only way they can hope to improve their living standards above the breadline is to work.
Work is the only option available to most of us. In general, stories of individuals becoming rich by setting up companies in their bedrooms are a myth. The saga of the dotcoms, where young entrepreneurs believed they had discovered a new way of making millions from the internet, demonstrates this. Even prior to the dotcom bubble bursting, the reality was very different to the fiction.
Most internet millionaires, such as Martha Lane-Fox of lastminute.com, are the sons and daughters of existing ‘traditional’ millionaires. In many cases, less privileged small-business men and women are seeing their companies crushed under the juggernauts of the multinational companies. In 2000, 43,365 small businesses went bust. This is a record figure for a boom year. Up and down the country local high streets are dying because the small shops cannot compete with Tesco, Asda and all the rest.
Capitalism has led to the concentration of wealth and power in ever decreasing numbers of hands at the top. Meanwhile at the bottom, more and more previously middle-class people are forced downwards into the ranks of the working class. This process is taking place in a particularly harsh and barbaric way in Argentina.
The heart-rending economic crisis is devastating the lives of the population. The Financial Times declared that "Argentina can no longer afford its middle class" and it is, in fact, rapidly disappearing. The shanty towns are strewn with banners marked ‘welcome middle classes’ as teachers, lecturers, and bank workers are forced into the ghetto.
In Britain, nothing so dramatic is taking place. Nonetheless, many sections of the population - such as teachers, civil servants and lecturers – who were relatively privileged in the past and who saw themselves as middle class, are now low paid, overworked and increasingly see themselves as part of the working class. They are also beginning to draw the conclusion that the only way they can defend their pay and conditions is to use the traditional weapon of the working class, by taking strike action.
Immediately after New Labour declared that ‘we are all middle class now’, a Daily Mirror poll showed that 60% of people described themselves as working class - a far higher percentage than was the case even ten years ago. In Britain, 28 million people work for wages, selling our ability to work, our labour power. We are potentially by far the strongest force in British society, and far stronger than in Marx’s day.
It is true that the working class has not made its strength felt in Britain over the last few years. However, this does not primarily stem from an objective weakening of its latent power. It is more a result of subjective reasons that can be summed up as a temporarily debilitating lack of confidence.
This followed the defeats that the working class suffered during the 1980s and 1990s internationally, and specifically in Britain where the Tory government inflicted a number of blows against the workers’ movement. These factors resulted in a low level of class struggles over the last decade.
This has had some objective effects. Sections of the older generation have been affected by the memory of bitter defeats. The younger generation has, in general, no experience of struggle and so is, as yet, inexperienced, raw and untutored. At the same time, right-wing trade union leaders took advantage of the situation to try and entrench their power and detach themselves as far as possible from their members.
But like a natural athlete who is a little out of shape through lack of practise, the British working class has not lost its capacity to fight. It only needs to experience its strength in struggle to regain confidence. As it does so, it will also turn on the right-wing union leaders. The first steps in this direction are already underway, as shown by the recent election of left-wing general secretaries in the RMT (rail and maritime workers union), the PCS (civil servants union), and the defeat of Sir Ken Jackson in the AEEU (engineering union).
It is true, however, that the most powerful sections of the working class - that is, the industrial working class whose strength stems from the fact that it is largely responsible for the creation of new value - are a smaller proportion of the workforce now than they were 20 or 30 years ago. The major reason for this is the chronic weakness of British capitalism combined with the conscious policy of Thatcher and her cohorts of moving away from manufacturing to services to undermine the strength of the British working class.
There are other additional, international trends which also had an effect. The major one is capitalism’s constant drive to speed up production, creating factories with the capacity to produce ever more commodities.
At the same time, capitalism is incapable of fully using the capacity that has been created because, ultimately, the working class cannot afford to buy all of the goods it produces. This leads to overproduction and overcapacity. The bosses attempt to deal with this through lay-offs and downsizing, resulting in a smaller number of industrial workers producing the same amount of commodities that a larger number produced in the past.
In the last 20 years there has been a sevenfold increase in the sales of the biggest multinational companies, yet the number of people they employ has remained virtually the same. (This gives a glimpse of the potential for a democratically planned economy to fully utilise and further develop the productive forces capitalism has created.)
Whilst it is smaller than it was at the height of the post-war economic upswing, however, the industrial working class has far greater numbers today than it did a century ago. In the 24 leading economies, it numbered 51.7 million in 1900, 88 million in 1950, 120 million in 1971 and even in 1998 still numbered 112.8 million. In the US there were 8.8 million industrial workers in 1900, 20.6 million in 1950, 26 million in 1971 and 31 million in 1998.
The decrease in the size of the industrial working class in Britain is also, partially, the result of the international phenomenon known as ‘globalisation’. The capitalists in the US, Europe and Japan, in an attempt to restore their profit levels, have set out to drive down the living conditions of the working class.
One means by which they have achieved this is by moving production to other countries where labour is cheaper. Nonetheless, the majority of manufacturing industry is still concentrated in the advanced capitalist countries. For example, if the industrial economy of the whole western hemisphere is given the value of 100%, then the US accounts for 76% of this. By contrast, the biggest of the Latin American countries, Brazil, is only 8%.
And while all of the factors mentioned above have had some effect, the strength of the British working class remains immense. The London Underground and rail strikes have given a glimpse of how capitalism can be paralysed when a key section of workers takes action.
Even less powerful sections of workers are able to have an effect on the profits of the capitalists. For example, to a far greater degree than in the past, if teachers were to take national strike action millions of parents would be unable to work because of childcare commitments. This would exert real pressure on the capitalist class.
Marx did not reduce his analysis of the exploitation of the working class to a simple question of economic poverty alone. He explained that in a capitalist society workers are alienated from the work they do. Hours spent every day building a palace or tarmacking a road are not undertaken for the satisfaction of making something useful or beautiful, but to receive a wage on which to survive.
This description of working life would apply just as much to the workers in McDonald’s, Tesco, call centres, on modern building sites or in factories, as it ever did to the weavers and labourers Marx was describing. Instead of making life easier, the increase in automation has reduced ever more jobs to mind-numbing repetition and boredom.
It is not only work that is dehumanising under capitalism. The commodification of human existence – a society where everything is for sale - is deeply alienating. Marx talked about how, in its drive to sell ever new commodities, capitalism created "imaginary appetites" long before TV started to bombard us constantly with a thousand new products that claim to keep us young and beautiful, or that we ‘must’ own to keep up with the Joneses. And long before having the right mobile phone or pair of trainers became a major pressure on almost every young person’s existence!
As capitalism has become more brutal over the last 20 years, alienation has undoubtedly increased. Without exaggerating, there is a small section of young people in Britain for whom the system has offered nothing and who are, as a result, almost entirely alienated from society.
Work is alienating but it also brings with it the experience of being part of a collective workforce that, potentially at any rate, has the power to fight back. In the organisation of the working class the germ of a new society exists. At times when class struggle is at a high level it tends to increase the sense of common interest and community amongst wide sections of the working class.
One of the worst of all experiences in capitalist Britain is to be a young person who cannot get work – to have been thrown on the scrap heap before your teens are even over. These young people do not even have the right to claim benefits until they are 18 years old. They are surrounded by the pressures and demands of modern capitalist culture – that to fit in they have to own clothes and trainers costing hundreds of pounds - yet they often have no income at all.
There are now generations of such young people who have grown up in the 1980s and 1990s on the housing estates throughout Britain. The result has been an increase in street crime and robbery, almost all of it carried out against people who are also living in poverty.
There has also been an increase in drug addiction: for example, a 400% increase in the number of children who died from sniffing gas and glue between 1980 and 1990. The reasons for drug use are wide and varied. Nonetheless, the increase in every kind of drug addiction and dependency, both legal and illegal, is primarily a result of a more alienated society.
This increase in alienation is a direct result of neo-liberal policies. This is graphically illustrated by the experience of the ex-mining villages around the country. The defeat of the 1984-85 miners’ strike and the closure of the pits have left previously strong communities suffering the ravages of unemployment, poverty and drug addiction.
As long as we live in a capitalist society then, as Marx described, "brutalisation" and "moral degradation" will remain. However, future action by working-class people – both in the workplaces and communities – will to a degree counter the current trend. A new generation will see the point of collective struggle.
One strand of future mass campaigns will undoubtedly be the struggle to strengthen our communities and to prevent anti-social crime. These will have nothing in common with Blair’s empty moralising about being "tough on crime, tough on the causes of crime", whilst simultaneously exacerbating the causes of crime with cuts and more cuts. On the contrary, campaigns against anti-social crime in working-class communities should be linked to demands for decent jobs, facilities for young people and the right to claim benefits.
Is Marx relevant in the 21st century?
According to New Labour, theories developed in the dark, satanic mills of the Victorian era are no longer relevant. It claims that there are good and bad bosses (mostly good). If we are 'reasonable', 'patient' and 'hard working' we can convince good bosses to pay us well. Yet the experience of working people and the statistics - even the government’s statistics - show that this is absolutely untrue.
In the two decades after the second world war capitalism developed at a rapid pace. (This was possible because of exceptional and unrepeatable circumstances following the war, when whole swathes of Europe had been reduced to rubble.) It was in those post-war years that workers in the West won many of the benefits, such as the welfare state, that are being constantly eroded today.
In the early 1970s capitalism went into crisis internationally. Since then the capitalists have set about restoring their profits to the level of the post-war years. They have done this primarily by driving down the wages of the working class, in other words, by increasing their own share of the surplus product.
In the US, the most powerful economy in the world, the longest boom in its history has recently come to a close. Yet, even at the height of the boom - in 1999 - 80% of the population were no better off than they were 20 years ago and 50 million people (nearly 20%) were worse off.
Meanwhile, the capitalist class is drowning in riches. According to the US magazine, Business Week, if a US worker who earned $25,000 (£16,500) in 1994 received the same percentage income increase as the average boss over the same period he or she would now be earning $138,350. The US, the world’s only superpower, contains the most extreme polarisation of wealth.
On the one hand, it is normal for chief executives to receive phenomenal sums in bonuses - like the $45 million (£30 million) that Wendt received from Consecso Insurance just for turning up at his new job. However, the income of individual chief executives is chicken feed compared with the wealth and power of the owners of the big corporations.
Two US corporations alone - General Motors and Ford - exceed the Gross Domestic Product (GDP) of the whole of sub-Saharan Africa. In glaring contradiction with this unimaginable wealth the US also contains ever-increasing poverty: 0.5% of the population of the USA own as much as the bottom 90%.
But the US is only the leader in what is an international trend. In 2000 there were seven million people worldwide with liquid assets of more than $1 million - an increase of 18% in one year alone. In Britain the average income of a chief executive of a FTSE 100 company is a huge £643,000 a year. This means, by the way, that all but the most obese are literally worth their weight in gold!
New Labour argues that these individuals ‘earn’ their wealth with their talent and entrepreneurial skills. Yet in Britain there are a mere 392 people who sit on the remuneration boards adjudicating on the pay and bonuses of the top company directors of the 98 largest companies. Thirty directors sit on more than one remuneration board. This is a tiny club of wealthy people deciding how much more gold to heap on themselves and their friends and relatives. There were 6,600 millionaires in 1992 and now there are more than 47,000.
By contrast, as the house journal of the financial wing of the British ruling class, The Financial Times, commented:
Employment insecurity for those who do have jobs is at "the highest level for 30 years", according to the Joseph Rowntree Foundation.
All the neo-liberal attacks on the living standards of the working class have been designed, at base, to increase the ruling class’s share of surplus value at the expense of the working class. This has been achieved by decreasing the 'social wage' - cutting the welfare state. But it has also been carried out directly on the factory floor. Today the bosses take a much larger percentage of the surplus created by the working class than was the case in the recent past. As the American economist William Greider explains:
This example is based on US car workers. Yet, many car plants internationally have been moved away from the US and Europe to areas where labour is far cheaper, such as Latin America and Eastern Europe. The same has happened in many other sectors. Greider describes the reasons why:
This demonstrates one of the ways in which the bosses were able to hugely increase their profits by lowering wages in the 1990s. However, in doing so they have also massively exacerbated the problems that the capitalist system is facing now, and will face in the future.
The coming crisis
Until recently the US economy was booming. Like Atlas it held up the world economy. This was a boom that massively intensified the inequalities of capitalism. It was also the precursor to recession: in the 12 months up to March 2002, US big-business profits suffered the biggest drop since the Great Depression of the 1930s. Despite this, at the beginning of 2002 most commentators were claiming that the US economy was on the road to recovery. As the collapse of WorldCom and the slide on the stock markets show, this was more than a little over-optimistic.
Capitalism is a cyclical system and the current recession will, at a certain stage, come to an end, but the underlying systemic malaise will remain. Economic stagnation, mass unemployment and underemployment, and the general undermining of working peoples’ living standards, are all capitalism has to offer in the 21st century. The most modern understanding of can be found in the writings of Marx.
Today the capitalists claim to have solved overproduction with techniques like 'just-in-time' production. Yet only a few years ago, massive overproduction was the major factor in the South-East Asian economic crisis which has decimated the living standards of the working class of the area. Overproduction is also at the root of the current international crisis. After 1997 the US was able to temporarily ameliorate the situation by acting as the ‘buyer of last resort’ for the world’s goods. This is now coming to an end.
Even in instances where overproduction has been partially overcome, it is replaced by a crisis of overcapacity. That is when capitalism is only able to function by leaving a large proportion of productive capacity idle. In the European car market there was a massive 40% overcapacity in 1999.
This has been the primary reason for the merger mania that has swept the world car industry. In the full knowledge that some factories will have to close and some firms go to the wall, the world’s car producers are slogging it out for markets in a fight to the death. This is what lay behind the mass slashing of jobs at Ford Dagenham, Vauxhall Luton and Longbridge.
The method by which the capitalists have restored their profits in the 1990s has laid the seeds for a catastrophic crisis. They have driven down the wages of workers in the West whilst simultaneously moving production to the ex-colonial countries where labour is cheaper. Inevitably, this is exacerbating the problems of overproduction and overcapacity.
On a global scale the working class receives a considerably smaller share of the value it creates. Therefore, it can buy back only a smaller percentage of the goods it produces. In the current economic crisis the capitalists’ chickens are coming home to roost.
An additional factor in the 1990s US boom has been the massive overvaluation of stock markets throughout the world, but particularly in the US itself. This has been combined with a huge expansion of credit – or, as it is otherwise known, debt. In 1999 private savings in the US went negative for the first time since the 1930s.
In 2000 the total private-sector debt was around 130% of GDP, compared with less than 100% in 1929 when the stock market crash on Wall Street heralded the Great Depression of the 1930s. Credit, like elastic, can be stretched so far.
At a certain point, however, it will have to snap back into line with reality. The result is the collapse of companies like Enron and WorldCom as the 'astute' business practises of the 1990s are revealed as the reckless gambling of a terminally short-sighted capitalist class.
But capitalism’s crises never affect only the billionaires and Wall Street traders. In fact in 2001, despite the world economic downturn, the number of millionaires still increased by 3%! The ‘masters of the universe’ may suffer a bit of a hangover as a result of their decade-long Wall Street party, but it is working people and the poor who will really feel the consequences.