The people of the world suffer the greatest from the current economic and financial crisis, the worst in a century. Supposed measures to deal with the crisis further aggravate the hardship of the world’s poor and flagrantly serve to bail out and perpetuate the oppressive and exploitative system of monopoly capitalism. A radical overhaul is needed and societies must be built that deliver livelihoods, incomes, education, health and housing for the people.

The crisis is global and the worst in a century. The global economic recession has begun with consumption and production collapsing in the advanced capitalist United States (US), European Union (EU) and Japan which amount to over half of the world economy. World economic growth is currently expected to keep falling to just 3.0% next year which would already be the slowest in almost a decade. Yet growth estimates are adjusted downwards as often as they are made. Some estimates of the eventual financial losses have been in the order of an unprecedented US$25-30 trillion worldwide and the effects of this in the real economy will be catastrophic. The world faces the double danger of recession and deflation. The adverse consequences of neoliberal globalization  in the past decades will be aggravated all over the globe.

The people were  exploited and thus impoverished even before the turmoil and will nowsuffer even more. Poverty and inequality have been worsening in the last decades.  Even if one were to use the underestimated poverty line of $2 per day, there has been a 50% increase in the number of poor people since 1980 to some three billion today out of the world’s total population of 6.4 billion. Around 800 million people are jobless or otherwise still needing additional incomes and work, a billion people go hungry every day, and two billion people do not even have access to clean water. The current turmoil guarantees even more rapid increases in misery in the years to come.

Neocolonial economies are already facing falling exports, dropping commodity prices, speculative outflows and dried up capital markets. Even migration and remittances from abroad are at risk. Domestic growth is slowing and production cutbacks and layoffs are already starting. Hundreds of millions of households are struggling with increasing joblessness, declining incomes and deteriorating welfare. The people who have long suffered from the ravages of neoliberal globalization are faced with the terrible consequences of the rapid deterioration of the economy.

The current crisis is particularly severe and worse is to come in the train of recurrent crises under capitalism. Capitalism is inherently caught up in self-contradiction and is constantly imbalanced. The drive of the monopoly bourgeoisie to extract surplus value and maximize private profits is in contradiction with the social character and rise of production.  Thus keeping down  wage levels relative to increasing production reduces effective demand.   This is reflected in the so-called ‘boom-bust cycle’ which underscores the periodic episodes of collapsing production and acute crisis. Throughout this, the incomes and welfare of the working people remain miserably low.

Over the last three decades the advanced capitalist countries have tried to keep their economies and profits growing through the neoliberal offensive of exploiting cheap labor, seizing raw materials and dominating markets across the globe. Yet the crisis has continued to deepen. In the 1990s, they resorted more and more to financial devices: speculative profits and debt-driven consumption and production. However, the basic imbalance of capitalism remained and delaying the inevitable through inflating financial bubbles only meant an unprecedented accumulation of problems and instability.

There are limits to how far economies can be propped up by debt that is not based on any real economic values created or that could ever be created. The United States is a clear example. Unsustainable debt-driven pump-priming for its wars of aggression and unsustainable debt-driven household consumption are at the core of its financial and economic disorder.

The crisis erupted when the financial illusions and false dynamic of growth could no longer be maintained. Although manifesting first in the US, the world’s most advanced capitalist power and also the most indebted and financially troubled, the EU and Japan likewise have the same problems. The big power governments are now scrambling to mobilize public resources for private monopoly benefit.

The responses proposed are principally aimed at reviving corporate profits at the expense of the people. The imperialist powers are quick to take action to save a few giant financial institutions. They mobilized or otherwise committed trillions of dollars in bail-outs and support ostensibly to restore confidence in financial systems and stop a descent into even greater turmoil. There is, unsurprisingly, no such rapid and meaningful action to help underdeveloped countries or the billions of poor people even only in terms of keeping residents in their foreclosed homes at reduced rent and in New Deal or Keynesian ways such as reemploying people in  public works and expansion of social services in conjunction with reviving manufacturing upon the rise of effective demand. And yet the financial lifelines to finance capital are eventually going to be borne by the people in terms of higher taxes, diminished social services, higher inflation, and greater instability.

The advanced industrial powers are further seeking greater trading and investment opportunities abroad to restore their profits at the expense of the underdeveloped countries. At the same time they are compelled to preserve control of domestic markets, as well as push down wages and the  benefits of their workers. There are already efforts to revive the stalled World Trade Organization (WTO) talks and to increase the manipulative influence of the International Monetary Fund (IMF) and World Bank (WB). There is also a determined push to multiply imperialist-dominated bilateral and regional free trade and “economic partnership” deals. Insofar as these consolidate economic territories, they foreshadow economic conflicts over the world’s finite labor, natural resources and markets.

The most compliant underdeveloped country governments are already working to further remove trade barriers and investment controls. Neoliberal globalization has  destroyed domestic agricultureand industry and made hundreds of millions of peasants and workers poorer in economically backward countries. Farmers and agricultural workers around the world lost their livelihoods and were driven off the land, while factory workers were thrown out into the streets into destitution as entire industries were wiped out.

In any case, the world economy is still continuing to unravel. Capitalism is facing a prolonged recession with industrial closures, firm bankruptcies, wage repression, cutbacks in benefits, lay-offs, rural displacement and greater poverty to come. The global credit squeeze, drastic fall in demand for the raw materials and semi-manufactured exports and the depressed prices of these will aggravate and deepen the exploitation and impoverishment of the people in the Third World. There is in fact, a global depression which is becoming conspicuous as the methods of finance capital for covering deficits, funding consumption on credit and thus fabricating economic growth rates become ineffective.

Only a new social and economic order will prevent the worsening of poverty and a recurrence of crisis. The capitalist world economy is at the limits of being driven by debt, speculation, cheap labor exploitation and war. Household incomes and welfare are worsening rapidly both in the advanced centers of capitalism and in the vast backward hinterlands of the world. The current level of the crisis of monopoly capitalism has been on the make for several decades and is likely to be persistent for several years. The global bond market is expected to collapse soon.

Efforts at coping with the crisis under the current system will at best restore growth momentarily until the next bout of intensified crisis. The current global trade and investment regime promotes neoliberal globalization for the benefit of the world’s most powerful monopoly capitalists at the expense of the people’s welfare. The system itself needs to be radically overhauled with economies producing not for the profit of a few corporations but for the needs of the many for decent livelihood, goods and services.

It is imperative for the people to build an alternative system that is humane, equitable and just. This alternative system is guided by three general principles: social justice and reversing age-old biases against the working people; the economy and its resources serving the needs of the general population and not the profits of a few; and national independence, genuine democratic participation and environmental responsibility. The people must eschew the anarchic economics and social exclusiveness of the phoney free market of monopoly capitalism .

 There is no easy way out of the crisis and the people of underdeveloped countries are struggling to assert their economic sovereignty and strive for greater self-reliance and social justice. Among the critical measures that must be taken are:

1. Stop talks on all neoliberal multilateral, regional and bilateral free trade agreements that have grossly disadvantaged the working people and entire underdeveloped countries; and cancel all current deals. An international trade and investment regime that recognize economic sovereignty and self-reliant development and the primacy of the people’s welfare must be built. Domestic economies must be freed from imperialist exploitation and must have the leeway to implement development strategies as they see fit.
2. Oppose maneuvering by the IMF, WB and WTO to exploit the crisis and further impose neoliberal policies on the underdeveloped countries. Their opportunism necessitates the strengthening of  the people's demand for these organizations’ closure.
3. Stop speculative financial flows to underdeveloped countries that introduce instability, reckless speculation in energy and other commodities that causes undue volatility, and irresponsible speculation in food commodities that further disrupts food supplies and feeds hunger.
4. Execute strategies to build national industry, implement true agrarian reform, realize food sovereignty, and promote gender equality and environmental sustainability.
5. Carry out genuine agrarian reform which means immediately giving land to the tillers, providing the means to make this productive, and improving means of rural livelihood.
6. Unconditionally cancel foreign debts to stop the outflow of vital domestic resources.
7. Put in place schemes that ensure environmental sustainability, including long-term solutions to climate change that acknowledge the greater accountability of the imperialist powers.

At the same time there is an urgent need for the people to demand and obtain immediate relief against worsening social and economic distress.

1. Immediate emergency food, expanded unemployment benefits, income and work relief through expanded public works and social services and shelter at reduced rent for people whose homes have been foreclosed.
2. A greater share for the working people of the wealth that they produce through wage increases in industry and a larger share of the  agricultural produce for the peasants and farm workers.
3. Adequate and active provision of health care, public education, housing and other social sevices for the people.
4. Increased public spending on rural infrastructure projects that will directly improve people’s livelihoods.
5. Drastic reduction of military spending and elimination of bureaucratic corruption.
6. Reduction of  taxes on the poor, and increased taxation on the wealthy and corporations towards a  progressive tax system.

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