Editorial: Crises and Catastrophe

When the market economy is booming there’s a tendency to assume this state of affairs will last forever – on so many occasions have we heard that ‘it’s different this time’ and that ‘we’re in a new paradigm now’. Yet when a slump occurs – as they do periodically – the mood of incautious optimism changes quickly and pessimism and despair can set in.

This has most obviously been the case with the present recession (or series of recessions, depending on how you define it). Since the first signs of crisis appeared in late summer 2007, the mood has been bleak. The nadir was probably reached in late 2008 when the collapse of Lehman Brothers led to massive falls in world stock markets and coincided with the seizing up of the credit markets. Unemployment and bankruptcies soon began to rise.

Since then the mood has hardly improved. Unemployment remains at over 2.5 million in the UK and in some counties – such as Spain, where it is 27 percent – is at levels that are at least as bad as the infamous depression of the 1930s.

Into such a space come the advocates of collapse and catastrophe. The end is nigh, they think, and we’d better buy some candles and get some tins in. Their underlying sentiment – that somehow the existing capitalism system is fundamentally flawed in many ways – is of course at least half right. But their fatalism that capitalism is in some way going to collapse around our ears in an economic Armageddon certainly isn’t. In fact, we’ve been here before – and are still here . . .

Much though theories of economic collapse may hold a curious fascination for those who want to see an end to the market system, they have been proven wrong time and again – in fact from the earliest days of the system itself. In this issue, we look at why. We examine why capitalism, for all its weaknesses and flaws, is a remarkably resilient system and why the conditions that lead to economic crises and slumps are replaced after time by conditions that prepare the way for a new boom and a repeat of the cycle.

Socialists have learnt that there’s no point waiting for capitalism to do us a favour and die. It’s just not going to happen. Instead, capitalism has to be put out of its misery and only a majority of convinced socialists can do that, democratically taking the reins of political power, so as to lay the foundations for a society where booms, slumps, crises and catastrophes are a thing of the past.