Were Shakespeare still gracing this world with his presence he would almost certainly exclaim, “There’s something rotten about the system of capitalism.”

No wonder! Each day millions are learning that insider trading, sleazy accounting, profit inflation, phony off-book transactions, stock option rip-offs and political payoffs are standard operating procedures of the modern corporation. And they’re angry with Wall Street, thieving corporations, and increasingly the Bush administration.

How do we explain the cesspool of corporate thievery and meltdowns? Are there simply more bad apples now than there were a few decades ago? Perhaps, but to leave matters here sheds little light on present day corporate wrongdoing.

A more useful way to understand this phenomenon is to situate it in a new phase of capitalist development. It commenced with the petering out of the long post-war boom in the 1970s, and the onset of a protracted economic slowdown. The stagnation continues to this day in a global environment dominated by transnational corporations and burdened by commodity production.

In this new phase, many corporations shifted their focus from the production of goods and services to speculation, merger mania and hostile takeovers, and the manipulation of new financial instruments as a means to accumulate capital.

This shift began on the periphery of the capitalist economy in the mid-1970s. It quickly gathered steam during the Reagan years – thanks especially to a high interest rate, deregulatory, corporate tax friendly, anti-labor regime. And by the closing years of the 1990s, it had turned into the main engine of capital accumulation. In fact, hyperinflated prices on equity markets, which in turn made corporate and individual investors feel wealthier and more willing to borrow and spend were virtually the only factor that imparted momentum to the economy during those years.

But speculative bubbles are not sustainable for very long. At some point, underlying realities in the real economy spoil the party and the bubble bursts.

At the root of this is not simply insatiable greed, nor “irrational exuberance,” nor the deregulation of the economy, nor for that matter simply a new phase of capitalist development. Each of these had a hand in it, to be sure. But all are also products of an economic system in which the interaction of competing capitals, seeking to accumulate maximum profits, not only results in fierce exploitation, permanent labor force reductions, periodic economic crisis, inequality and pressures toward war. It also generates corruption, criminality and parasitism in corporate suites and the corridors of political power.

In short, corporate parasitism is both systemic to capitalism as well as connected to the particular features of U.S. capitalism’s present economic and political development.

Undoubtedly, more disclosures of fraudulent corporate practices and more bad news for the workers are in the pipeline. What is less clear is how this will play out.

Just a few weeks ago, it was said that this scandal would shine momentarily and then fade quickly, but how wrong that was. The near-daily exposure of corporate wrongdoing is roiling millions and shaking the economy.

Bush, in his speech on Wall Street last week, hoped to calm financial markets and alleviate concerns about the economy, but had little success. In fact, for the first time since Sept. 11, the Bush administration is on the defensive and Bush’s moral authority has been tarnished with the resurfacing of his own shady financial deals in the past.

This is a change of enormous political consequence. In the wake of the terrorist attack last year Bush acquired new stature in the eyes of the American people. People looked past his elite background, connections and policies. Overnight he was transformed from an illegitimate president to a popular one. True, it was undeserved, yet the administration skillfully utilized it to win support for their reactionary domestic and global plans.

That has become more difficult now. The American people are more skeptical of Bush and his administration. Millions have graver concern about market based solutions to health care, pensions and public education

Anger over corporate greed is merging with mounting doubts about the administration’s “war on terrorism,” savage restrictions of democratic rights, and economic policies that unabashedly favor its corporate masters. Mass leaders are speaking out with new vigor and anger. And even congressional Democrats, whose response to this crisis has been inadequate, are showing more life. In a few words, tucked into this moment is the possibility of a qualitative political change.

Labor, the racially oppressed, women and other progressive forces can move full steam into the 2002 election arena with well-grounded hopes of decisively defeating the extreme right in November.

A broadly based people’s movement can take the offensive against corporate greed, deregulation, and tax policies that favor the rich. Why not establish people’s commissions at national, state and local levels empowered to take criminal action against those directly and indirectly involved in corporate wrongdoing and to recommend legislative measures to fully compensate the victims of corporate piracy and to radically re-regulate the transnational corporations?

Actually, in every arena of struggle, including the struggle for peace, the prospects for turning back the right-wing offensive have improved – not to mention the possibility of winning people to a deeper understanding of the nature of capitalism and the advantages of socialism, and a democratically planned socialist economy that has no inherent tendency to overproduction and joblessness.

Of course, all this will take broad initiative and unity as well as a readiness to respond quickly to any “wag the dog” diversionary provocation by the Bush administration.

Sam Webb is the national chairman of the Communist Party USA. This article is based on a recent opening given to the National Board. Webb and Political Affairs editor Joe Sims are on their way to South Africa to attend the South African Communist Party’s Congress. The author can be reached at swebb@cpusa.org