Capitalist Crisis Hits Youth Hardest

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In January 2011, a 26-year-old street vendor, Mohamed Bouazizi, lit himself on fire in protest against repeated harassment by police in Sidi Bouzid, Tunisia. This marked the beginning of the Arab Revolution. Bouazizi’s self-immolation was simply the catalyzing event that connected with the anger and frustration of a large layer of society—anger and frustration that had been building up for years.

The problems faced by Bouazizi weren’t limited to him as an individual; his were just one example of the problems faced by millions of youth in the Arab world. Despite the dictatorial regimes that existed in Tunisia and Egypt at the time, these problems—chief among them being unemployment—are not at all limited to this part of the world. Youth in Greece and Spain find themselves in a similar situation—massive movements have already erupted there as a result—and here in the United States, conditions are also being prepared for a social explosion.

“But how can this be? The United States has a much higher standard of living!” This may be true in a relative sense, but as Trotsky once observed: “In reality the mere existence of privations is not enough to cause an insurrection; if it were, the masses would be always in revolt.”

Poverty in itself does not have a direct causal effect on revolutionary upheaval, if a certain level of stability exists, even the most impoverished layers of society can find a way to “get along.” It is when this stability is upset and a state of precarity prevails that the entirety of society finds itself thrust into crisis.

Precarity has come to define life under capitalism for today’s youth in the United States. The post-war boom sowed strong illusions in the stability of capitalism—this is the material basis for the concept of the “American dream.” Where higher education was previously a privilege of the wealthy, the demand for a highly educated labor force and the strength of the labor movement resulted in easier access to higher education for working class youth. Even high school dropouts could get jobs in manufacturing with union wages and benefits throughout the post-war boom. But by the late 1970s this came to an end. Yet, capitalism managed to limp along on the basis of a massive expansion of credit.

Today, the youth are facing an increasingly bleak perspective. The 2007–08 financial meltdown revealed the shaky foundations that the 80s and 90s “prosperity” was built upon. As is always the case, when capitalism finds itself in crisis it most acutely affects the youth.

According to the U.S. Department of Education, tuition costs have gone up an average of 15% in the last two years alone. Student debt has officially climbed above the $1 trillion mark, and more than one in five households in the U.S. are affected. 8.8% of recent graduates who began repayments in 2009 have defaulted on their federal loans. One of every two new graduates are unemployed or underemployed. The situation is also grim for those who do find employment. Since June 2009, 54% of all new jobs across all sectors of the economy have been temporary positions.

Bourgeois economists have expressed concern that the rising costs of tuition will serve as a drag on the struggling housing market, but little connection is drawn to the devastating effects we will see when the college loan bubble bursts.

The far-right have attacked Pell Grants and tax breaks for students as the cause of the skyrocketing costs. According to Mitt Romney’scampaign, “A flood of federal dollars is driving up tuition and burdening too many young Americans with substantial debt.”

Federal aid is given to students to help them pay for already-high tuition costs. This Keynesian model leads to increased demand for higher education, tending to raise tuition levels as the market functions on the basis of supply and demand. Students desperate for relief from expensive tuition and fees most certainly welcome this federal money; however, this is a far cry from fully-funded, free education for all. In essence, this arrangement amounts to a handout to private universities.

So what is the government doing to fund the state colleges? In the last two years, the Higher Education Price Index reveals that the costs associated with running a university rose 3% while government funding fell by the same 3%.

The capitalists have nothing of any substance to offer in the way of solving the impending crisis of the student loan bubble. In a New York Times op-ed, Luigi Zingales suggested a plan to get the venture capital industry to invest in “bright students.” In return for their investment, the investors would receive a percentage of the student’s future income.

Zingales says that he doesn’t want to suggest that helping underprivileged students attend college is “bad.” But his idea abstracts “bright students” from reality, and just where these bright students come from in the first place. Most children attend public schools, many of which are funded primarily by property taxes. School districts with a higher income to begin with tend to have better-funded schools; in-turn, the students have a better chance at receiving a better education, with smaller classrooms, more textbooks and other necessities. Schools in lower-income districts depend more on shrinking government funding. Why then would investors seek “bright students” in school districts that are economically depressed and under-funded? This plan would drastically limit access to higher education for poor and working-class children.

Zingales goes even further, suggesting that the IRS should be responsible for enforcing the investors’ claims on students’ future earnings. He argues that “this is not a form of modern indentured servitude,” but rather, a simple “voluntary” tax!

Similar schemes have been used by U.S. investors to build baseball academies in the Dominican Republic, where hopeful players agree to give up to 50% of their signing bonuses if they get picked up by a  major league team. These young athletes forgo a formal education to train in facilities that are surrounded by barbed wire fences, allegedly to prevent break-ins.

All of these schemes reflect the decay of capitalism. This is indicated by the tendency to invest, not in production, but in speculation; not only in commodities like oil, food, and housing, but also commodities in the form of promising young athletes and students.

What future does capitalism hold for young people today? Campus Consultants estimates that tuition costs will be $41,228 a year at public universities, and $130,428 at private universities within 18 years. As if the costs of raising children in the U.S. today wasn’t already daunting enough!

Economic crisis doesn’t just take its toll on wallets and pocketbooks; it weighs on mental health and human life itself. Suicides increased by more than a third in Greece in the past two years of unprecedented economic calamity. So it’s no surprise that there is a correlation between youth unemployment, student debt, and suicide here in the U.S.

According to the American Association of Suicidology: “There is a clear and direct relationship between rates of unemployment and suicide. The peak rate of suicide in 1933 occurred one year after the total U.S. unemployment rate reached 25% of the labor force. Similar findings have been documented internationally. At the individual level, unemployed individuals have between two and four times the suicide rate of those employed. Economic strain and personal financial crises have been well documented as precipitating events in individual deaths by suicide.”

Similar conditions breed similar results. In Tunisia and Egypt we saw the overthrow of two hated dictators. In Greece we have seen monumental struggles against the austerity that is being imposed, with several general strikes in the past year alone. In Spain, massive movements have begun to erupt against similar policies of austerity. In the United States, the protests in Madison, Wisconsin and the Occupy movement were just the tip of the iceberg. Huge struggles loom ahead, as the crisis of capitalism demands further austerity and further “shared sacrifice.”

It is easy to fall into the trap of viewing issues such as unemployment and debt as individual, subjective problems. Capitalist society tends to place the blame on individuals, and promotes solutions from a subjective standpoint. But there are millions upon millions of young people facing the same problems. It is the capitalist system itself that is the root cause of the crisis amongst the youth. It is not revolutionaries that “cause” revolutions; capitalism itself creates the conditions that make revolution necessary.

There will be many movements in the coming period. There will be ebbs and flows, but they will all serve as steps in the process toward revolutionary upheaval. Leon Trotsky was fond of pointing out that revolution seems impossible until it becomes inevitable. The prospects for revolution in the United States may seem far-fetched to most people, including the youth—until they are direct participants.

But a revolution doesn’t automatically imply victory for the working class, as can be seen by the Egyptian revolution, which continues to this day. What is necessary is a leadership that has absorbed and understood the lessons of the struggles of the past—both the failures and the successes—and can apply these lessons to ensure victory of the working class and youth in fundamentally transforming society. Only socialism can rationally plan and fully utilize the immense wealth that exists in order to meet everyone’s needs. Only socialism can ensure that everyone has a job or a place in education. Only socialism can offer the youth and future generations real hope: free from debt, free from unemployment, and free from the instability of capitalism that has come to define the lives of so many young people.


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