“That capitalism is in crisis.”

 First in Victoria University Debating Society 2009 series of public debates on topical public policy issues.  (Rutherford House, 6.30pm, 11 May 2009)

 Third affirmative speaker Don Franks

 Unfortunately capitalism is not on its deathbed, but it is in a state of crisis.  You don’t have to take the word of a communist union organiser – just listen to the despairing of senior capitalist mouthpieces.

 “Our world is broken—and I honestly don’t know what is going to replace it. The compass by which we steered as Americans has gone. The last time I saw anything like this, in the sense of disorientation and loss, was among my Russian friends when the Soviet Union broke up.” So said Bernie Sucher, Merrill Lynch operations head in Moscow, in the March 8th  Financial Times.

 In the same edition of the Financial Times Associate editor and chief economics commentator Martin Wolf despaired: “It is impossible at such a turning point to know where we are going… Yet the combination of financial collapse with a huge recession, if not something worse, will surely change the world. The legitimacy of the market will weaken. The credibility of the US will be damaged. The authority of China will rise. Globalization itself may founder. This is a time of upheaval.”

 In the midst of this time of upheaval, Wolf continued clinging to the old capitalist mantra: “no credible alternative to the market economy exists…”

 It is a well known habit of ruling classes to declare their own particular social formation immutable. Before Martin Wolf’s fellow capitalists came to hold sway, feudal lords believed their regime to be ordained for all time by God .

 In fact the market economy form of production and distribution is relatively historically recent. Since our evolution into humans, most of our production has been for direct consumption by the producers.

 Small scale commodity production has existed for several thousand years.

 But only in the last couple of centuries has commodity production become the earth’s dominant form of creating goods and services. Capitalism is not the most enduring form of human society; neither is it the most logical, natural, efficient or humane.

 Individual capitalists generally drive their workers to produce the maximum without regard to the capacity of the market to absorb their production, or to any negative social, economic or environmental effects. The result is a system with built in inescapable periodic crises. Competition between countries in the world market make it ever more difficult for them to sell the goods which are produced in ever-increasing quantities. Intense competition among capitalists makes it necessary to keep investing in plant and machinery. Relatively greater proportions of capital are invested as constant capital, which merely reproduces its own value, and relatively less as variable capital, which is spent on labour-power, the one commodity which creates new expanded value. This leads to the tendency of the rate of profit to fall, described by Marx as “the single most important law of modern political economy.” The effects of falling profitability can be seen in capitalists’ inability to generate a new round of economic growth on the scale of the post-war boom.

 Modern capitalism has been in a state of chronic slump for several decades. Long periods of recession have been punctuated by shallow, short-lived booms termed ‘jobless recoveries’ because they generally don’t restore employment. The result is a crisis. Workers’ rights and living standards are attacked and the price of labour-power is driven down; capitalists less able to compete are driven to the wall and their business go bust, with their workers thrown on the scrap-heap; goods are unable to be sold even though people want and need them.

 Or, as the old union song puts it:

 “now we stand outcast and starving midst the wonders we have made”

 The latest edition of the Maritime Union of New Zealand magazine The Maritimes features an article titled “We won’t pay for their crisis” The section ‘effects on workers’ notes:

 “The USA jobless rate will reach 9.4% this year according to a survey from the business website Bloomberg News. The USA has already lost 4.4million jobs since December 2007”.

 “A national business organisation predicts UK unemployment will hit 3.2 million people as the economy shrinks – over 1 in 10 people. Official unemployment figures are rising and currently stand at 2 million.”

 “ The UN puts the average unemployment rate as 15 % in the Arab world, reaching 40% among people between the ages of 15 and 24- a total of 66 million out of the total Arab population of 317 million.”

 “The IMF expects global unemployment to hit 50 million.”

 For working people capitalism is a cruel denial of their human potential.

 In my own working lifetime I’ve seen things get not better but worse. Since I began working there has come to be for workers, a dirtier deal. More casualisation, lower union density, greater inequality, lower job safety standards, worse housing, greater state and employer surveillance, fewer social services and a far more bleak and uncertain future for our children.

 Labour and National governments have made no difference – why would they – the problem is not governments but the capitalist system.

 Capitalism is a system of privilege, injustice and crisis.

 There is no better way to spend one’s life than taking part in the destruction of capitalism and its replacement with socialism. The Workers Party is seriously committed to help accomplish this task and I invite all people of goodwill here tonight to join us. If you are interested, please see me after the conclusion of this debate,

 Thank you.


  1. Barrie (AWSM-Private Capacity) says:

    Can you supply some background to the debate? Who else participated (on both sides)? What was the attendance like? etc


  2. Don Franks says:


    There were 67 people there . Mostly students.

    If you are not used to university debates you may find your first one quite daunting. There is a lot of stuff that you would not expect to happen.
    Like, Salient editor Jackson Wood was first speaker on our team affirming “Capitalism is in crisis”, but opened up with a sidewipe at his fellow affirmers :
    “I love capitalism” began Jackson “it made everything, including Don Franks Nike shoes and Joel Cosgroves Ipod.”
    I have never worn Nike, prefering New Ballance in a running shoe and at the time I had on some rather comfy black plastic things with no logo. Both those, and Nike and every other shoe since Adams flax jandals have actually been made by human labour power, but facts don’t have a big part in varsity debating. As was to become more and more evident throughout the night.
    Jackson went on to read a long thing about Keynes, who he seemed to like a lot. Or, possibly, who his speech writer seemed to like. On the way home my mate said that Jackson looked like he was reading from read from his text as though he’d never seen it before.

    The next up was international champion debater Stephen Whittington. Stephen had a nice loud clear voice and a great deal of vigorous muscular upper body movement. As an audio visual , all we missed was a little dynamic variation, but apart from that Stephen’s delivery was masterly. It made up for the total lack of logic in the content; sample:
    “capitalism is the response of the whole sum of human actions.” All encompassing or what? So if you’re putting out the cat or scratching your arse or whatever, its capitalism.

    Green ex hippy protester mp Catherine Delahunty broke the rules by hitting on some real life examples of capitalist crisis in the here and now. She made some good forthright points to the effect that capitalism is not the only possible form of human organisation. Catherine had a running gag about poor old Smithy’s “invisible hand” , it was/is like the hand of a pedophile. Someday someone will explain that Adam’s IH is neither a magic market fixer of all things, nor a synonm for all that is evil, but that was not to be this good night.

    After Catherine was the dude I’d been worried about. Phil Barry, economist, with a bourgeoise cv longer than my police record. A pro hired prize fighter for the ruling class. What havoc would he wreck on my little lefty economic box of tricks?
    Well, in the event, Phil got up in front of everyone in a funny coat and a fur hat and dark glasses. He put on a russian accent and told old jokes about food queues and getting woken up in the night by armed police. ( No, not Tuhoe or anarchists, just russians). And that was the sum of comrade Barry’s contribution.

    When I went on after him I said I’d thought we were s’posed to be about “Capitalism is in crisis”, but it seemed the topic was apparently “Stalinism was unsatisfactory”

    We have little to fear ideologicaly from the bourgeoisie if Roger Kerr is anything to go by. He too spent much time on the failings of the soviet union; one would think it had fallen the morning of the debate. The nearest we got from Roger to the shit we’re in now was the Great depression.
    “The great depression was due to mistakes of federal banks and protectionist policies” Now you know.
    Roger said he just wanted to talk about New Zealand capitalism; Iceland was off the agenda. He didn’t like Keynes, he did like the fact that privatization will save the environment. ( Method unspecified)

    In reply to my arguments he could only say; “I’ll pass over Don because I didn’t understand him”

    The nice VUW Deb Soc folks running the show gave us a bottle of wine at the end. They said if we don’t mind , the debate will be stuck up on their webbsite. None of us minded so if you don’t believe my reportage of this weird night, and are still curious you can look it up and see for yourself.


  3. Barrie (AWSM-private capacity) says:

    Thanks for that account Don. A truly bizarre experience by the sound of it!

  4. “Privatization will save the environment” utter bull you can expect a statement like that from Roger Kerr.


  5. Hmm. I think the Workers Party is in a bigger crisis than capitalism, if the statements from ex-members flying around the internet are anything to go by.

  6. John Edmundson says:

    I think some people place undue importance on the chatter that takes place on the internet.

  7. Recent events in WPNZ bring back the melancholy memory of the Communist Party of NZ circa 1982.

  8. May I suggest that the left now move on and focus on the BIG enemy like what ACT is doing with the Auckland super city. Don’t you guys find this a wee bit scary?

    Yours respectfully

    Paul Drake

  9. Jackson6, you have very little to back that up from bar your inner trolling logic. Just saying something doesn’t make it true…

    //May I suggest that the left now move on and focus on the BIG enemy like what ACT is doing with the Auckland super city. Don’t you guys find this a wee bit scary?//

    Couldn’t agree more, Greater Auckland has $28 billion in assets? That accumulated public capital would definitely provide a huge short term boost to capitalists if sold in an under the sly 1980’s style garage sale.

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