{"id":45856,"date":"2024-08-24T19:05:11","date_gmt":"2024-08-24T11:05:11","guid":{"rendered":"https:\/\/chinaworker.info\/?p=45856"},"modified":"2024-08-24T19:05:14","modified_gmt":"2024-08-24T11:05:14","slug":"world-economy-historic-stock-market-crash-capitalism-on-thin-ice","status":"publish","type":"post","link":"https:\/\/chinaworker.info\/en\/2024\/08\/24\/45856\/","title":{"rendered":"World economy: Historic stock market crash \u2014 Capitalism on thin ice"},"content":{"rendered":"

The stock market losses have sent chills down the spines of the world\u2019s capitalists and governments, who have had another brutal reminder that global capitalism rests on a fragile foundation<\/strong><\/p>\n

Per Olsson, Offensiv, weekly paper of Socialistiskt Alternativ (ISA in Sweden)<\/p>\n

(This article was first published on 6 August 2024)<\/p>\n

On Monday (5 August), the collapse of the world\u2019s stock markets continued. In Japan, prices on the Tokyo Stock Exchange fell by more than 12 per cent, the biggest drop since \u201cBlack Monday\u201d in 1987.<\/p>\n

The stock market losses have sent chills down the spines of the world\u2019s capitalists and governments, who have had another brutal reminder that global capitalism rests on a fragile foundation. Today\u2019s capitalism is characterized by chronic instability and is beset by a series of interconnected crises.<\/p>\n

There are a number of interacting factors behind the stock market crash. One is geopolitical conflicts and the increased risk of major wars in the Middle East; another is the growing number of indicators pointing to a rapid slowdown in the US economy; and a third is the growing concern that investments in artificial intelligence (AI) have turned into a new bubble that is about to burst, leading to particularly large stock market declines for US tech giants. \u201cHas the AI bubble burst? Wall Street wonders if artificial intelligence will ever make money\u201d (CNN, 5 August).<\/p>\n

There are also other reasons, such as the fact that the Chinese economy continues to stagnate while the economies of Japan and Germany, for example, are not growing.<\/p>\n

Even hopes of lower interest rates in the US could not prevent stock markets from falling.<\/p>\n

\u201cThursday\u2019s (1 August) sharp fall in stock markets marks a break in the trend. Unlike earlier in the year, falling interest rates did not act as a shock absorber for weak economic signals. Be prepared for the market to enter a new era,\u201d commented Dagens Industri.<\/p>\n

Regardless of what happens in the coming days (share prices rose on 6 August) and weeks, capitalism is heading for a new crisis, in a weaker position than before previous crises and in a completely different global environment.<\/p>\n

Globalisation is over and with the crisis of the Chinese economy, global capitalism has lost its main engine of growth.<\/p>\n

At the same time, the Inter-imperialist Cold War has heated up and the world is divided by the two blocs created by US and Chinese imperialism.<\/p>\n

At a time when capitalism is taking refuge behind the nationalism of states and governments, there is also no room for coordinated action to stem the tide of the crisis, if possible, as in the 2008\u20132009 crisis and in previous stock market and currency crises. Since then (after 2009), it has been \u2018every man for himself\u2019 and imperialist power struggles have left an ever stronger imprint on the world economy. In the name of \u2019national security\u2019 and bloc-building, economic warfare has steadily escalated and trade barriers are increasing.<\/p>\n

The huge mountain of debt also makes it harder for governments to respond to the crisis with massive new stimulus packages which increase debt.<\/p>\n

Together, the causes of the stock market crash represent a turning point, although the crisis may be protracted.<\/p>\n

Even before the stock market crash, there were signs that private consumption in the United States, which has been largely financed by increased credit debt but has also made the strongest contribution to the growth of the US economy, was declining. Rising unemployment makes it even more difficult to sustain consumption.<\/p>\n

The fact that the US slowdown coincides with the stagnation of other major economies reinforces both the tendencies towards crisis and governments\u2019 desires to make workers and the poor pay for the crisis created by the parasitic and rotten capitalist system.<\/p>\n

It is by building the fightback now that workers and the poor can build a front against capitalist attacks and germinate the seeds of a new socialist consciousness.<\/p>\n

The ultimate cause of all the crises of capitalism is that it is a system of production for the profit of a few super-rich capitalists and not a system of production according to need and in harmony with nature. If the future is to be possible, capitalism must be abolished. Therefore, the socialist revolution is an absolute necessity.<\/p>\n","protected":false},"excerpt":{"rendered":"

The stock market losses have sent chills down the spines of the world\u2019s capitalists and governments, who have had another brutal reminder that global capitalism rests on a fragile foundation Per Olsson, Offensiv, weekly paper of Socialistiskt Alternativ (ISA in Sweden) (This article was first published on 6 August 2024) On Monday (5 August), the […]<\/p>\n","protected":false},"author":10,"featured_media":45851,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"tdm_status":"","tdm_grid_status":"","footnotes":""},"categories":[148,124],"tags":[4766,4319,2992],"class_list":{"0":"post-45856","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-international","8":"category-news","9":"tag-capitalism","10":"tag-stock-market","11":"tag-world-economy"},"yoast_head":"\nWorld economy: Historic stock market crash \u2014 Capitalism on thin ice - 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