"The growing instability on Wall Street is a symptom of the profound crisis of capital accumulation infecting the entire body of the world imperialist system. Another crash cannot be prevented by new regulations aimed at altering the habits of operators on the stock, bond, and options markets: bans on computer-assisted `program' trading, measures to shut down markets if fluctuations become too stormy, stricter credit regulations, or the myriad other `reforms' much discussed in the big-business press in the wake of October 19 [1987]. Nor can the banking system be sealed from the blows it will receive."

- From "What the 1987 Stock Market Crash Foretold."
Resolution adopted by the August 1988 Socialist Workers Party convention and published in the magazine New International no. 10.

The sharks on Wall Street have become afraid again. They have begun to lose confidence once more in their ability to shore up declining profit rates. That's what's behind the plunge in the stock market that occurred in mid July.

The 1987 crash - where financial speculators lost $500 billion in one day - signaled an acceleration of the downward slide of the curve of capitalist development that began in the early 1970s after the long post-World War II economic expansion. Since the early 1990s the capitalist system has entered a worldwide depression.

So long as capitalism exists, and despite ceaseless ups and downs in the business cycle, these depression conditions with their wearing deflationary bias can not be reversed unless the most powerful ruling classes in North America, Europe, and Asia and the Pacific are able to deal major defeats to the working class and labor movement and, through sharpening competition and trade battles, destroy masses of commodities and capital. The inevitable companion of such an outcome would be devastating financial collapse, growing fascist movements, and world war.

Declining profit rates worldwide are intensifying capitalist competition for markets, sources for raw materials, and domination of low-wage "export platforms" in the semicolonial world. Many capitalists have slashed prices to near bankruptcy to push their rivals to the wall.

Meanwhile, a bubble has built up as speculators pour billions into inflated stock and bond markets in their ceaseless quest for higher returns. As the price tag on these pieces of paper soars - with no basis in increasing production of real values - they become another point of instability for the capitalist system that threatens to come crashing down.

In the United States since the late 1980s "downsizing" and "re-engineering" have been the code words under which the superrich owners of industry and the banks waged a ruthless cost-cutting drive. They have been laying off middle managers, technicians, and office employees, as well as industrial workers; simplifying production and administrative routines through computerization; and shutting down obsolete plants and equipment and dumping less profitable divisions.

But their downsizing and computerization has hit its limits. General Motors, Chrysler, and other firms - especially consumer companies - are closing plants and laying off workers because they can't sell enough products since the purchasing power of millions of workers has continued to decline. As they become smaller and "leaner" these corporations are weaker, not more powerful. And capitalist accumulation of the mass of surplus value, produced by the sweat and blood of the workers and expropriated by the bosses, slows down.

In addition, investments in new computer equipment have decelerated, since the hoped-for productivity gains have not measured up to expectations. The recent dramatic drop of prices of computer stocks is a reflection of this.

It's more and more apparent that the only target the capitalist rulers have left to go after in order to reverse the decline in their profits is labor. They need a qualitative acceleration of their unremitting warfare on wages, working conditions, social programs, and the very humanity of the working class.

In western Europe, downsizing and frontal assaults on the social wage occur as double-digit unemployment has spread in many capitalist powers. But this engenders social explosions of a magnitude the bosses don't look forward to, as the wave of strikes and other labor protests in Germany, France, and elsewhere over the last year show.

Violent shifts in the class struggle are on the horizon. This raises the stakes for building communist parties now - before new social explosions erupt - capable of leading the working people to wrest power from the hands of the wealthy minority and prevent fascist victories and world war imperialism has in store for humanity.

As part of the process of building such proletarian parties, it is essential to win more workers to the idea of reading, thinking, and acting for themselves. Studying and selling New International no. 10 should be high on the agenda right now.  
 
 
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