The following Editorial was published in "The Guardian", newspaper
of the Communist Party of Australia in its issue of Wednesday,
July 3rd, 2002. Contact address: 65 Campbell Street, Surry Hills.
Sydney. 2010 Australia. Phone: (612) 9212 6855 Fax: (612) 9281 5795.
CPA Central Committee: <[EMAIL PROTECTED]>
"The Guardian": <[EMAIL PROTECTED]>
Webpage: http://www.cpa.org.au>
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Editorial: The rise and fall of WorldCom
WorldCom started off as a small-time telco in Mississipi in 1985. In 17
years it was built up into one of the largest US corporations by means of
no less than 75 takeovers. It is one of those rags to riches stories that
the proponents of capitalism use to prove that by entrepreneurial talent
anyone can rise to the top and take over the world. After all, the very
name WorldCom incorporates the ambitions of those who built the company.
They were riding the wave of the new technology and the vast extension of
communications made possible by telephone systems, satellites, the Internet
and computers. Unclouded horizons seemed to stretch for ever into the
distant future. The future was to be one of more and yet more takeovers and
the accumulation of unlimited profits.
Everything was built on the belief that despite some ups and downs
capitalism would always expand. The US was the greatest and the world
leader in technology. Everyone recognised the US as the world's only
super-power and everyone would bow down to the might and the demands of the
US. They told us that themselves.
WorldCom reached a market peak of $US180 billion and what could possibly
threaten such unimaginable wealth, power and authority?
But inherent in the capitalist system are the inevitable downturns. By the
year 2000 a capitalist crisis of "overproduction" began to push down the
market and profits began to fall.
The Wall Street Journal writing on WorldCom commented: "The booming
telecommunications market was beginning to falter (in 2001) from a glut of
capacity after frenzied investment in fibre-optic networks. Suddenly it
found it had too much capacity..."
Satisfying the lust for profits by shareholders becomes an all-consuming
chase. The report of profits is the means by which to push up share prices
and, thereby, enable even bigger profits to be made.
It is also the path by which Chief Executive Officers and others in top
management enrich themselves with obscene salary packages and share options
purchased at discounted prices and sold on for huge profits.
In this situation, WorldCom, Enron and a string of other US companies
engaged in some "creative" accounting to hide the reality from company
shareholders and the rest of the share market.
But sooner or later the reality comes out. Workers are sacked. Smaller
shareholders, hoodwinked by the dishonest company reports, are robbed as
prices fall. In the case of WorldCom they plummeted from a high of over US
$64 in 1999 to 0.06c recently. Other companies are dragged down and banks
are faced with unpaid debts and their clients with worthless investment
packages.
As with ENRON, so with WorldCom the big shareholders in the know sell up in
good time and walk away with millions.
This is the inevitable course of deregulated, unplanned, immoral, dishonest
"free" capitalism. Fortune magazine has recently published a long list of
similar corporate bankruptcies.
President Bush now protests and calls for regulation, even the jailing of
corrupt and fraudulent company directors, as he cried following the crash
of Enron. And, as following Enron, he will continue to push for further
deregulation and even less accountability of the big corporations. This is
the very system that successive US Presidents have helped create. This is
the capitalism that they demand should be implemented by the US and the
rest of the world.
This is the capitalism that has resulted in millions around the world
living in poverty, deprived of health, housing and jobs -- even clean
water. It is this situation that is being challenged by hundreds of
thousands in the streets of Rio de Janeiro, Seville, Rome, Paris, Athens,
Johannesburg, Havana, Washington and around the world.
In the streets are the people in their millions. Behind concrete and barbed
wire barricades, protected by thousands of heavily armed police and troops
are the despicable leaders of the "free" world.
The rise and fall of WorldCom and the stench that goes with it will awaken
new millions to the capitalist reality. The number on the streets demanding
an end to this obscenity will steadily grow from a trickle to a flood and
an eventual torrent capable of building a new world -- without WorldCom!
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