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Alex Callinicos talks to Rajni Lallah about financial crisis

15.10.2008

Last week, when Lalit member Rajni Lallah was in London, she had a meeting with Alex Callinicos, leading Socialist Workers Party member. He also agreed to give her a short interview on the financial crisis for our website, which we have pleasure in publishing for our readers. Lalit has had political exchange with the SWP for many years.

"I`d like to say first of all hello to the comrades of Lalit and thank you for the interview. I think the fundamental reason why this crisis has developed is that for the last 10 years the financial managers of particularly the US and Europe have been trying to prevent the development of a new major economic crisis by making it as easy to borrow money as possible. So for example even though worker`s wages in countries like Britain or the US have either stagnated or declined in recent years they`ve been encouraged to borrow on very painful terms and spend to keep the economy going. And this has led to the development on the financial markets of more and more bizarre and dangerous forms of speculation. It`s actually gambling. And what`s happened in the last year or so - it`s become increasingly clear - that the gambles have failed and as a result of those failures the major banks in the world are stuck with absolutely gigantic losses. They lent lots of money, they borrowed lots of money. they can`t get the money they lent back. and they`re in debt to each other. And that`s produced a paralysis of the financial system. That paralysis has gone on for nearly a year. So a few weeks ago when the american government allowed a major bank, the Lehman brothers to go bust that then turned the paralysis into panic faced with the real danger that the banking system would collapse. The banks are critical in holding the capitalist system together. They are the nervous system of the capitalist system."

"And so, faced with that crisis, we see the right wing administration in the US for seventeen or eighteen years suddenly nationalising big chunks of the housing system. The British government did the same yesterday. In other words, all we`ve been told in the era of neo-liberalism that the market is best, that privatisation is best, that the State can`t play a positive role in the economy, must be thrown away. And that poses a very important opportunity in principle for the revolutionary and radical Left because now, millions are saying it`s OK for the State to intervene in the economy but they`re doing that to save their system. They`re pumping billions upon billions of pounds and dollars and euros into the banking system with the aim of preserving the existing private property system. And what we should say is "we`re glad that you agree that the State should play an important role in the economy."

So let`s take over the banks completely. Let`s then use the banks to defend people`s jobs, to defend people`s homes because many workers in the US, in Britain, in Ireland, in Spain and other countries are threatened with the loss of their homes, to defend living standards, to stop the way in which inflation is eating into people`s living standards. In other words we have to see this financial crisis as an opportunity to put forward an alternative genuine left wing politics.

For years and years we`ve been saying that capitalism is the problem. Now everyone can see that. And we need to put forward an alternative that moves us towards socialism."

9th October, 2008