Workers World, Vol. 4 No. 11
Both sides of the class barricades have a deep and abiding interest in arriving at an objective evaluation of the social significance of the stock market collapse. This is so because every analysis or prognosis in economics even more than in politics, is necessarily a guide to action.
What to do next becomes a burning, immediate issue, not only for each of the major contending classes in contemporary society, but for the various groups within the classes and for the masses of people as a whole who may be on the brink of economic ruin.
In times of economic crisis, all strata of society address themselves to the State and urge immediate solutions to the problem. But it is precisely in such moments that the State, i.e., the executive committee of the ruling class, stands revealed as the collective exploiter of the mass of the people.
The gutter press analysts are constrained by the very nature of their task to exude confidence in order to deceive the mass of the people generally and demoralize and diver them politically. The more sober bourgeois analysts, who are writing for the capitalist class proper, are more prone to arrive at an objective analysis because they are dealing with alternative courses of action for the benefit of their class – even if their vision is blurred by fundamental class interests which are running against the broad stream of history.
Thus Business Week, the authoritative organ of high finance and industry, in its June 2 issue, states:
“There is nothing to be gained by Pollyanna talk about what happened in the stock market. ... So violent a deflation of values is bound to be bad. ... It casts future plans in doubt. ...”
To begin with, the deluge of selling that wiped out more than $20 billion of security values in a single day cannot possibly be regarded as a purely psychological aberration in stock market operations. The tidal wave of selling expropriated a whole section of the petty bourgeoisie. This in and of itself, regardless of other and deeper consequences, is an unfailing sign of economic decline. No amount of assurances regarding “the good health of the economy” by the high priests of the Kennedy Administration can erase this indisputable fact.
The basic question is whether this stock market collapse is on a par with the catastrophe of 1929.
The answer to this question must be a conditional yes!
Of course there are differences! Any apologist for U.S. capitalism will be quick to cite the built-in stabilizers, the higher living standards, social security and unemployment benefits.
But that is not what is decisive. What is decisive is the degree to which the disproportion between the spectacular growth of the productive forces of the postwar period has developed in relation to the continual narrowing of capitalist markets. If the gap between the galloping productive forces and the shrinking market has widened to the straining point, a catastrophe is imminent.
Because the domination of monopoly capital has among other things also meant the maintenance of economic secrets among the corporate pirates and the withholding of otherwise public information, it is much more difficult to gauge the degree of maturity of the long-developing economic debacle.
“In 1865, the stock exchange was still a secondary element in the capitalist system.” Thus wrote Frederick Engels a bare few months before he died.
“But since 1865,” he continued, “a change has taken place, which assigns a considerably increased and constantly growing role to the stock exchange, and which, with continued development, tends to concentrate all production, industrial as well as agricultural, and all commerce, the means of communication as well as the functions of exchange, in the hands of stock operators, so that the stock exchange becomes the most prominent representative of capitalist production itself.”
All that needs to be elucidated in this remarkable passage is only the term, “stock exchange operator.” This includes not merely brokers, traders and speculators, but far more importantly, the big banks, insurance companies, and the multi-billion dollar corporations who together constitute the financial oligarchies which reign supreme over the entire economy.
If in 1895, when Engels wrote the above words, the stock market was the “chief representative of capitalist production itself,” then the evolution of the competitive stage of capitalism into its monopoly stage made the stock exchange the chief organizer and generator of social catastrophes, political reaction and imperialist war. One need only remember that the term “peace jitters” originated in the stock market and is said to have caused declines on at least a dozen occasions during the Cold War.
Without a doubt, it is the very personification of the financial oligarchies who, in union with the capitalist state, govern the destiny of the nation. But they are not omnipotent. Rather than being the masters of their fate, they are the tools of blind and uncontrollable forces, which ultimately must spell their doom.
The stock market break is the grimmest reminder of this.
The stock market is practically the only avenue open for the blind forces which govern the anarchic capitalist system to forcibly assert themselves – to let the public know that a social crisis is imminent.
Nevertheless, the stock market in the imperialist epoch lends itself more to political manipulation and influence by the capitalist state than in the days of competitive capitalism.
This means that it is possible to suppress the symptoms of decay inherent in the system for a much, much longer period. Rather than cure the disease, however, it drives it deeper into the organism. The tendency toward a catastrophe of truly gargantuan proportions becomes more likely the longer the symptoms are suppressed. What is really at issue is whether the ruling circles are working to arrest the impending economic collapse and divert it into some political-military adventure as a solution to their crisis. The next couple of weeks will surely reveal the trend of development.
Last updated: 11 May 2026