LETTERS, CRITICISM AND SUGGESTIONS
The VBS Mutual Bank Looting
It has been labeled as the greatest bank heist. The VBS Mutual Bank was formed under the Mutual Bank Act to provide banking services to individuals, small businesses and stokvels (informal rotating credit and savings organizations). Mutual banks are different than commercial banks because some types of deposits in a mutual bank qualify as an ownership stake in the bank.
Last year the banks’ deposits doubled from R1,2 billion to R2,4 billion. ($85-170 million USD) This is because some municipalities deposited money in the bank. This was not consistent with the Municipal Finance Management Act that allows them to only bank with commercial banks. These Municipalities were instructed by the National Treasury to stop using the mutual bank. This resulted in a number of councils withdrawing more than R1 billion, causing a liquidity crisis. This forced the reserve bank governor to place it under curatorship.
A few months ago the very same bank made headlines for paying millions of rands to the brother of the deputy president of the Economic Freedom Fighters (EFF) and the EFF political party. It also paid money to the ruling party’s officials and to the South African Communist Party. This is the very same bank which in 2016 “lent” the former president (Zuma) money to pay back the money used in his home.
These payments left the bank unable to pay its clients. The worst affected are the poor working class who deposited money into the bank.
In a communist society there will be no banks because we will do away with the fundamental basis of the problems caused by this Capitalist system, which is money. The working class will collectively decide what is needed by them. There will be no few individuals called the “government officials” that will receive special privileges. Everyone will contribute according to their ability and commitment and in return receive according to their needs. There will be continuous struggle against individualism, which results in greed and corruption. We can achieve this by joining the International Communist Workers’ Party and fighting directly for communism
—A comrade in South Africa
Fight Racism and Nationalism
Workers of the World Unite!
In our recent meeting as a collective we were discussing about what the party can do to speed up the unity within the working class because for us to achieve our goal of a communist revolution there has to be unity within our class.
A comrade of mine shared a story about how race is preventing unity of workers at his workplace. They were planning a strike to demand higher wages. When a meeting was called so that they could find common ground before they approached their Union, he noticed that some of the workers were hesitant to talk because they feared that some of the coloured workers (those who are of mixed black and white ancestry) would tell management who were the ring leaders. This is a typical example of the notion that all coloureds at work are spies for the bosses.
This dangerous generalization is widespread in all the industrial areas we visit. My comrade made attempts to struggle with those workers, telling them that its like saying that black people can’t have cancer because most of the people you know who have cancer are white.
He struggled with them not to generalize because not all coloureds are spies for the bosses. It is not a colour thing. These are our class brothers. They attended the meeting not to spy but to stand with us in our fight against the bosses.
—A Comrade in South Africa
Debate About the Main Contradiction in the World Today
Overproduction is the Main Contradiction in the World Today
What is currently the principal (main) contradiction in the world? Red Flag says that China-US rivalry is the main contradiction. I disagree.
I believe that the main contradiction is that between the forces of capitalist production and the capitalist relations of production. Today this takes the form of overproduction and resulting chronic economic stagnation and massive unemployment.
Marx and Engels placed great importance on this contradiction. In A Contribution to the Critique of Political Economy Marx said
At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production …. From forms of development of the productive forces these relations turn into their fetters. Then begins an era of social revolution.
In other words this contradiction sets in motion other contradictions—in particular, class struggle—which lead to revolution.
One thing that comes up in conversations with friends and family about Brazil is, how can workers, and women especially, vote for a fascist sexist dog like Bolsonaro? Overproduction helps explain this.
Overproduction caused the fall of the ‘soft’ socialist Lula. While Lula was in power the economy boomed thanks to raw material exports, especially to China. Lula could afford some social spending, which made him popular. Then the market contracted, prices dropped, and China cut back orders. No more social spending. Instead unemployment, austerity, and crime. Desperate Brazilians turned to Bolsonaro.
Communism will smash these relations of production and resolve the contradiction. Under communism, we will produce as much as we want of whatever we want.
Under capitalism, however, the relations of production (the market) limit what can be produced, in spite of technological advances. The world’s factories are capable of producing far more than the world’s capitalists can sell. Worldwide capacity usage is about 80%.
One result of overproduction is massive global unemployment – perhaps a billion worldwide. In South Africa, more than half of all young people have no job. In Greece, one third. Even in ‘advanced’ France one in five young people are unemployed.
This letter has a blog supplement (icwpweb.wordpress.com) in which I argue that overproduction lies behind the most important developments in the world today.
—A comrade
The Main Contradiction in World Capitalism
Communist dialectical philosophy says that the main causes of changes in a system are its internal conflicts, called dialectical contradictions. Usually there is one contradiction that is bigger than others, called the main contradiction.
Besides the main contradiction there are many others. Capitalism always has contradictions between the capitalist class and the working class. One way of expressing this is as a contradiction between capitalist social relations of production, that is capitalist exploitation of the working class, and the forces of production. The working class is the most important force of production. Since this contradiction is always present in capitalism, it is called capitalism’s fundamental contradiction.
Sometimes the fundamental contradiction is the main one. That means that the struggle between the working class and the capitalist class is so intense that it determines the major changes in the world capitalist system. This is not the current situation. Without communist leadership, the working class is too weak and divided to challenge the capitalists for power. We are not in a revolutionary situation.
The current main contradiction is part of a network of conflicts between imperialist powers, US vs. China, US vs. Europe, US vs. Russia, etc. Right now the strongest of these contradictions is the US vs. China. This contradiction involves serious struggles over economic issues, and increasing military confrontation, especially in the South China Sea.
An important area of inter-imperialist conflict is about markets. Most big capitalists own more capacity to produce than they can find markets to sell to. This is called “overcapacity,” but some people call it “overproduction.” One clear case of world-wide overcapacity is in cars and trucks. US carmakers are fighting German and Japanese manufacturers for markets and China is ramping up their auto industry and competing for markets in other sectors, like steel.
It is not correct to say that overproduction caused the victory of the right-wing government in Brazil. The main economic factor was the 2008 economic crisis, caused by the falling rate of profit. This crisis discredited the ruling parties of many countries. The crisis produced mass misery, misery the ruling parties did not (or could not) do much to relieve. That is why the Right has become a major political force in the US, Germany, Italy, France, the UK, Poland, Greece and Brazil, among others.
Economics was not all of it, however. The Brazilian regimes of Lula and Dilma Rousseff were exposed as massively corrupt. Likewise the Clintons were shown to be crooks in the US, raking in many $millions while Hillary was Secretary of State. Overcapacity in auto and aircraft has had an effect in Brazil, but did not bring down the government.
Overproduction is not the main cause of world-wide unemployment, either. Because of low profit rates, capitalists can’t find enough profitable investments that might create jobs. Partly this is because world markets for new production are not there, That is why capitalist are fighting each other to see who gets to sell in the markets that exist or will exist.
The other big factor in unemployment is the falling rate of profit. A low rate of profit causes low investment and few jobs created. This showed up in the big US corporate tax cut in 2017. This allowed corporations’ foreign profits into the US at a very low tax rate.
Few of these corporations are using the money for job-creating investments. Instead they are buying their own stock, paying stockholders bigger dividends, paying down debts and other things that don’t produce jobs. They do this because the rate of profit on new investments would be low.
Generally speaking the falling rate of profit is the main cause for capitalist crises, failures and miseries. The exception is overcapacity that increases the fight for markets between imperialist powers, one of the reasons that the main contradiction in the world is China-US rivalry.
—A comrade
Graph Showing the Decline in World Rate of Profit from 1869 to 2010. Source: E. Malto
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Life Sentence for Cyntoia Brown Shows Need for Communist Revolution
TENNESSEE, USA—Cyntoia Brown, a 16-year-old runaway, was drugged and forced into prostitution by a 24-year-old pimp called Kut Throat. He sold her to a 43-year-old pedophile, Johnny Allen, who raped her and threatened her with his weapons. Cyntoia pulled a hand-gun from her purse and shot Allen dead.
Was Cyntoia allowed a “stand your ground” defense like racist murderer George Zimmerman who killed Trayvon Martin? Was Kut Throat charged with child sex trafficking? NO! Cyntoia got 60-years-to-life for first-degree murder. She has already been in prison for 12 years. She won’t be eligible for parole until she turns 69.
Cyntoia’s story is a stark condemnation of capitalism’s sexism, racism, and market mentality. In communism, nothing and nobody will be bought and sold. Certainly not sex. Certainly not children.
Communism will end private property and capitalist production relations which are all based on exploitation (wage slavery). This will abolish the material basis of racism and sexism.
Communism will build strong communities that will help children like Cyntoia flourish, instead of allowing them to be abused and then throwing them in prison.
Communism will enable us to struggle successfully to end the mentality that people – especially females – exist to be “used” for sex or profit. It will make it possible to end sexism and racism at last.
READ OUR PAMPHLET:
THE COMMUNIST FIGHT AGAINST SEXISM
Available at
icwpredflag.org/sxse.pdf
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