[Translated from the monthly journal of our sister organisation Lutte Ouvrière: Lutte de Classe n°236 - December 2023-January 2024]
What’s happening in the economy is not one of its “normal” more or less regular crises which have always been the way in which the capitalist system regulates itself.
Today capitalism is in profound crisis, which is indicative of how rotten it has become and, by the same token, how incapable the ruling class is of controlling the society it dominates.
After 20 months of war in Ukraine, and other wars which have been breaking out, from the Caucasus to Africa, it’s now the turn of the Middle East to fl are up once again, where the embers of conflict have been smouldering for some eight decades. The region is a battleground for the imperialist powers due to its oil resources and strategic importance on one of the most important international trade routes. But it is also a veritable social powder-keg. Huge individual wealth rubs shoulders with the poverty of the overwhelming majority of the population. All the contradictions of imperialism are concentrated here, including its policy of pitting one people against another, with the complicity of the local privileged classes and their nationalist leaders.
The current period has many features in common with the one that inspired Trotsky’s Transitional Program. He stated: “The bourgeoisie itself sees no way out” and “all the traditional parties of capital find themselves in a situation of perplexity that borders, at times, on paralysis of will”.
Today, some of the bourgeoisie’s most cynical or lucid spokesmen are basically expressing the same “perplexity”. Yeo Han-koo, former South Korean Minister of Trade, after noting that “a new economic order is being formulated”, asserts that “this will lead to uncertainty and unpredictability”.
Elon Musk, in his call to Tesla investors, offered his solution to the uncertainties: “The best we can do is have factories in many parts of the world”. This observation of the uncertainties of the global situation comes with the arrogant cynicism of the ultra-rich; he doesn’t even ask himself whether his solution is feasible for his fellow capitalists a little less wealthy than himself...
The bourgeoisie cashes in on the profi t extracted from exploitation, but has no control over it and “sees no way out”. It is driving blind. In normal times, capitalist society in its senility is already
riddled with profound contradictions, but the longer and deeper the crisis lasts, the more these contradictions grow, including between the economic aspects of imperialism and its military aspects. It is striking to see the extent to which the imperialist powers, and the USA in particular, are up to their necks in contradictions when it comes to their relations with China. At the very moment when American warships are sailing along the Chinese coast, and a war between the world’s two greatest military powers is on everyone’s mind, the American Secretary of State is in Beijing declaring that it is “extremely important” for relations between the USA and China to be “peaceful”.
The contradictory nature of capitalist development is by no means new. It was pointed out a century and a half ago in Kautsky’s Socialist Programme: “But the capitalist mode of production gives rise to the strangest contradictions. (... ) Trade needs peace, but competition creates war. If, in each country, individual capitalists and classes are in a permanent state of hostility, so it is between the capitalists and capitalist classes of the various nations. Each nation strives to expand the market for its products and oust its rivals. As international trade develops and universal peace becomes more necessary, competition becomes more fierce and the dangers of conflict between larger nations increase.
“The closer international relations become, the greater the demand for separate national interests. The greater the need for peace, the greater the threat of war. These seemingly absurd antitheses correspond perfectly to the character of the capitalist mode of production. They are already present in simple commodity production. But it is capitalist production that gives them their gigantic proportions and their unmanageable character. It exacerbates warlike tendencies while at the same time making peace indispensable: this is just one of the many contradictions that will be its undoing. ”
The imperialist phase of capitalist development has multiplied and amplified these contradictions, and the growing financialisation of the world economy has, for several decades, caused permanent instability.
In this context of aggravated crisis and war, the fundamental objective of a revolutionary communist current in the workers’ movement is the overthrow of the capitalist organisation of society through proletarian revolution. Only with this perspective, which needs to remain at the heart of our interventions, can the Transitional Program and its various demands in relation to unemployment, the rising cost of living, and the threat of war, have any revolutionary meaning. Otherwise, it amounts to reformist trade unionism or vulgar pacifism.
It is active propaganda, not agitation, which we need to engage in. So the purpose is not to call for the imminent struggle needed to change the balance of power with employers and their government. Nor is it about tactical recipes for struggles that may be on the horizon. We need to be constantly engaged in propaganda. This is particularly true when the crisis of capitalism is going through a phase as acute and perceptible as the present one.
Massive, explosive struggles will not depend on us, but on the energy and fighting spirit of the working class itself. We need to be attentive to the state of mind of the workers; our comrades need to be sufficiently well-informed and connected to our class to know that a revolution can start from things as minor as maggots in the meat served to the sailors on the battleship Potemkin, but it’s not our speeches that produce maggots!
Talking about struggles is no substitute for revolutionary propaganda, which is our responsibility. And all that goes with it: recruiting, convincing those around us, winning over supporters, and so on. In a word: building the revolutionary communist party, without which the rest is mere verbiage.
What’s the latest on the war in Ukraine?
After 20 months of fighting in Ukraine, neither Russia nor Ukraine, even with NATO’s support in terms of armaments, financial resources, diplomacy, etc. , seems likely to prevail in the foreseeable future.
When Putin took the initiative of launching the war in response to imperialist pressure, he was the first to delude himself into thinking that that Kiev would fall very quickly. We can see what happened!
Then the press, television, etc. , from all the NATO countries took over in triumphalist mode, talking about the Ukrainian counter-offensive. Again, pure propaganda! In reality, the front line has been blocked at virtually the same point since late last winter, and when news comes of a small town conquered by the Ukrainian army, it is followed by the reconquest of that town, or another one, by the Russian army...
After several months, the front line has clearly stabilised in Ukraine, without the imperialist coalition showing any immediate willingness to use the resources that could transform the war in into a prelude to Third World War. A “Korean-style solution” discussed in American ruling circles could involve stopping the war by signing an armistice, but without signing an actual peace treaty. It would have the advantage for NATO of preserving a situation of tension and continuing its “containment” of Russia, while letting Putin claim a partial victory.
Of course, we don’t know how credible those who put forward this type of solution are, but in the case of Korea, this “solution” has worked for 70 years, since July 27, 1953!
It should be remembered that this solution was also the legal form under which Germany remained divided into two blocs from October 1949 to November 1989, i. e. , for 40 years (Berlin Wall, minefields cutting Germany in two, and other delights, which were presented to us at the time as a consequence of the Cold War).
But imperialism has no need of a Cold War to reinvent the same solutions...
The worsening crisis of the capitalist economy
The Ukraine war and the economic sanctions have not improved the general economic situation. But what do we mean by that? While economic and military chaos adds a host of disruptions to economic circuits, seen from a class point of view, things are extremely simple: further impoverishment of the worker and poor, with all the variations in the situation of the different countries (war or not, famine-stricken or not, institutional anarchy or not... ); but for the imperialist bourgeoisie, all is well! Fortunes are being made, and not just by arms dealers.
Even the statistics of CEPII (Centre d’études prospectives et d’informations internationales), drawn from official IMF documents, note: “We have witnessed a brutal and unprecedented fall in real wages of 3. 2% in the euro zone, between 2020 and 2022, and 1. 4% in the United States”. And they also note that the sudden surge in inflation is not due to wages, but to dividends (a finding also highlighted by Les Echos).
While the victims of the war in Ukraine number in the hundreds of thousands, while entire cities are being bombed to the ground, while refugee flows from poor and/or war-torn countries grow, capitalist operations continue to run “as usual”.
New fortunes are being built up before our very eyes, like that of the Czech newcomer Kretinsky, who got rich from coal-fi red power stations and went on to buy up retail chains like Casino, not only in France but also in several other European countries. A fortune of 9 billion euros according to Forbes magazine, “an island in the Maldives, two yachts, a château and a French headquarters opposite the Elysée Palace”, adds Le Canard Enchaîné. Challenge magazine points out: “Twenty years ago, the 500th person in the ranking had a business fortune of 5 million euros. This year, the 500th has assets worth 235 million euros”.
Concentration of capital
In several sectors of the economy, the cards are being reshuffled between large companies. With the so-called overproduction crisis hitting manufacturing in particular, it’s hardly surprising that it’s in the logistics services sector that the most spectacular concentrations of capital are taking place. An oligopoly of three container shipping companies - CMA CGM, MSC and MAERSK - is in the process of taking over not only maritime transport (ports, docks, ships, containers), but also land transport in Africa.
The Italian-Swiss trust MSC, the world’s leading shipping company, has just spent 5. 7 billion euros buying out the Bolloré Group’s African logistics activities, thereby ridding itself of a competitor with a strong presence in Africa.
The trust’s bosses and shareholders must have based their reasoning on this observation, described by Le Monde (August 29, 2023): “In the gleaming shopping malls of Abidjan or Nairobi, hypermarkets with impeccable shelves offer dozens of references stamped with a Western or Emirati origin”, to set themselves the objective, according to a representative of one of the three trusts being able to transport a product directly from Amsterdam to Ouagadougou.
However poor the vast majority of Africa’s population may be, corruption and nepotism mean that there is a small minority who can pay, and not just the Bongo family!
The process of using logistics to take over an entire economic sector is not new in the history of big capitalist companies. It was used at the beginning of the imperialist era by Rockefeller, who, in order to get his hands on oil production, didn’t waste his time buying up all of the numerous oil wells that dotted Texas and Pennsylvania at the beginning of the 20th century. Instead, by developing oil transportation by rail tanker and then by pipeline, he built the first and most powerful oil trust, from which today’s Exxon emerged.
But what’s new in what Le Monde calls “the shipowners conquering Africa” is that what Rockefeller did at the beginning of the imperialist era on American soil, the MSC-MAERSK-CMA CGM oligopoly is reproducing on the world’s poorest continent. And with all that this implies in terms of trying to use the most modern techniques in the context of the underdevelopment of African infrastructures.
On the one hand, CMA CGM, for example, has taken a stake in the operator Eutelsat, so that the latter’s satellites can optimize the routing of the trust’s 580 container ships from a single centre in Marseilles. On the other, for the part of the journey between the ports of Abidjan or San Pedro (both in Côte d’Ivoire and controlled by MSC) and Ouagadougou, the trust intends to use the intermediary of myriads of small road hauliers, who are the only ones capable of driving on corrugated roads and changing route whenever they come across obstacles or poor weather conditions: ruts, rain, dust...
This is yet another contradiction in the way the economy works in the age of decadent imperialism.
The changing power relations between imperialist groups and nations
The war in Ukraine, US sanctions against Russia and the resulting disruption of production circuits have exacerbated competition and rivalry between capitalist companies, and just as much between capitalist nations.
Russia, a declared enemy of NATO, has suffered the repercussions of the latter’s sanctions. These effects are difficult to measure, as the sales channels for oil and especially gas, which accounted for the bulk of Russia’s export revenues, have found other ways to reach old and new customers.
The business press has noted how India has become a major gas exporter, buying gas from Russia in defiance of Western sanctions. And, according to Les Echos, this is how Indian business magnate Gautam Adani became the world’s third richest man.
It is unclear to what extent Russia has regained its revenues from oil and gas exports. We do know, however, that the war and the sanctions policy greatly weakened the German economy, this time in its rivalry with the other imperialist powers, principally the USA.
For a long time, the factors underpinning Germany’s economic success had included access to Russian gas on preferential terms; a strong foothold in the vast Chinese market, where German capitalists had gained an edge over their competitors; and the use of labour from their traditional Eastern hinterland. A winning combination that was brought down in mid-air by the war in Ukraine and, above all, by US sanctions!
The resulting change in the economic balance of power between the USA and Germany has hurt Germany as much as Russia, if not more.
Le Monde on August 24 devoted a full page to what it called “Germany’s great economic doubt”, a headline completed by: “The country in probable recession in 2023 discovers, demoralised, the fragility of ‘made in Germany’”.
In the body of the article, he quotes his colleague, the German weekly Die Zeit (August 3): “Made in Germany, it’s over”.
A third publication, Die Welt, followed suit a few days later: “America’s success is Germany’s failure”.
And the article goes on to give details: “Industrial production is in decline, and construction is in free-fall due to rising interest rates and expensive raw materials. As for the automotive industry, it is facing much more aggressive competition from electric vehicles than expected”.
The British magazine The Economist wonders whether “Germany has become the sick man of Europe”.
As far as growth rates are concerned, the IMF ranks Germany last among the major economies, behind the USA, Italy and France.
Yet Germany is Europe’s leading imperialist power. A country whose economy was the driving force behind the European Union, and which served as its model. In other words, the change in the balance of power between American imperialism and German imperialism has led to a more serious change in the balance of power between the United States and the European Union. All the more so, as the European Union is not truly unified, but a conglomerate of 27 states, some of whose interests coincide with those of their neighbours, but others are different, or even completely opposed. Vis-à-vis the United States and even China, the European Union is at cross purposes.
The weakening of German industry will inevitably mean greater difficulties for its subcontractors in Eastern Europe, many of them former People’s Democracies.
In the recent past, imperialist Germany owed much of its prosperity to the cheap yet skilled labour it found in Poland, the Czech Republic, Hungary, Slovakia, etc. , and also in Ukraine.
It was certainly not the only imperialist power to benefit from this, as evidenced by the fact that alongside Audi, Volkswagen, BMW, etc. , there are factories in Eastern Europe belonging to, or working for, France’s PSA and Renault. At the same time, however, investments by Western and Japanese multinationals have created additional jobs in these countries. Even Ukraine, while not a member of the European Union, has benefited from the fallout. And Polish factories, for example, financed by German capital, employed Ukrainian workers, who were even more poorly-paid than Polish workers.
It should be remembered that the integration of Eastern European countries into the European Union did not put an end to the relationship of subordination of the less powerful or semi-developed countries of the East to the imperialist countries.
Rivalry between imperialisms never stops, and never can, because the balance of power at any given moment is constantly being called into question. The inevitability of war stems ultimately from the fact that only wars can create a new balance of power in place of the old one.
Relying on “national sovereignty” to protect against imperialism is, to quote Trotsky, “in the full sense of the word, a reactionary task”, and he added: “A socialism that preaches national defence is that of the reactionary petty bourgeoisie in the service of capitalism in decline”.
In The Fourth International and War, written in 1934, Trotsky asserted: “Not to bind oneself in wartime to the national state, to follow the map not of war but of class struggle, is only possible for a party that has already declared irreconcilable war on the national state in peacetime. Only by fully realising the objectively reactionary role of the imperialist state can the proletarian vanguard immunise itself against all kinds of social-patriotism. This means that a real break with the ideology and politics of national defence is only possible from the point of view of international proletarian revolution”.
On the slow fragmentation of the world economy
“Is this the beginning of de-globalisation? ” asks the WTO, only to note that this is not the case, even though the share of trade in world GDP has been stagnating for some fifteen years. There is, however, a trend: industry’s share of world GDP is falling, while that of services is rising.
Above all, conflicts and, more generally, geopolitics are interfering with the world economy. To put it plainly, what economists call “value chains” tend to move preferentially between politically and militarily linked countries, rather than risk even momentary interruptions due to conflict.
Le Monde of 14 September summarises the most recent forms of protectionism that have been added to the list: custom duties, import and export quotas. In response to the protectionist measures, various retaliatory measures have been introduced, like new technical standards. But the preferred form of protectionism for the main imperialist powers, for those who can afford it, is quite simply state subsidies.
The United States has provided is a recent example of this: its Inflation Reduction Act (IRA). The IRA, i. e. , the billions promised to all capitalist groups, American or otherwise, who agreed to open factories on US soil, had the almost immediate effect of rekindling global competition between imperialist powers, channelling unprecedented sums of public money into private enterprise.
The German, French and British governments immediately jumped into the fray.
It’s notable that most of these subsidies are granted to capitalist groups in the name of the green transition and the fight against climate change. And yet daily life, with its succession of fi res and floods, bears witness to a worsening environmental catastrophe. The official cover given to these subsidies is that they are turning the world green. Even when this claim is blatantly cynical. So much so that (Les Echos, 16-17 June): “The World Bank is proposing to look at environmentally harmful subsidies granted by governments around the world to fossil fuels, agriculture and fishing [It] urges governments to redirect subsidies to fossil fuels, agriculture and fisheries, which are often harmful to the environment. Explicit and implicit subsidies are estimated to exceed $7,000 billion a year”. As the Managing Director of the World Bank puts it, with an acute understatement: “If we could reuse the trillions of dollars spent on useless subsidies for better, greener purposes, we could address many of the planet’s most pressing challenges”.
The ever-growing merger of the state and big capital to the benefit of the latter
These protectionist initiatives in various imperialist countries do, however, reflect a more general trend that seems to be one of the hallmarks of imperialism today. States are playing an increasingly important role in financing imperialist companies, to the extent that some industries would not even have existed without state involvement in their early days.
Strictly speaking, this is not a new phenomenon. In the early days of many of the great industrial enterprises of the past, the state played an important, even preponderant role. But this capitalist statism is taking on increasing proportions. To some extent, private and state capital are merging in order to implement investment projects. All that remains private are the resulting profits, and the fortunes of the owners of large amounts of capital!
This doesn’t stop spokesmen for the western bourgeoisie or its economists from criticising China for launching a subsidy race and “distorting international competition” through its extensive state intervention.
But there is an unintended convergence in these criticisms with Marx’s observation that it is the very laws of the capitalist economy that drive centralisation, interdependence, globalisation and the need for planning. Ultimately, it is the same fundamental economic laws of capitalism that drive it towards increasingly parasitic forms, but also towards the need for “socialist reorganisation” of the economy.
More than a century ago, Lenin observed in Imperialism, the Highest Stage of Capitalism, that the prototype of the big bourgeoisie in the age of imperialism is represented by rentiers, “coupon clippers” (we call them shareholders), and not at all by the captains of industry of the rising phase of capitalism.
Marxist literature has often drawn comparisons with the decadence of feudalism, when the aristocratic lords had already lost their political and military power, and locked themselves inside the gilded ghetto of Versailles...
The financialisation of the global capitalist economy makes capital movements easier and more unpredictable. At the same time, it makes the speculation that this encourages, easier and more brutal. Capital moves in search of more profitable investments, as much as to take advantage of speculative opportunities, such as real estate speculation or speculation on exchange rates.
Beyond the changing balance of power between the various imperialist powers, speculation poses a constant threat to the global financial system.
As with previous crashes and fi nancial crises, which have occurred almost every year since 1971 and the end of the dollar’s convertibility - the poor countries’ debt crisis (1982), the Japanese speculative bubble (1989), the Mexican crisis (1994), the Asian crisis (1997), the Argentine crisis (2001), etc. , and above all the most important one of 2008-2009 - today’s cure is tomorrow’s disease. Because the current crisis was being fought with injections of money, securities, etc. , into the money supply, this supply has grown and opened the door wider to more and more speculation.
De-throning the dollar?
The October issue of Le Monde diplomatique opens with the headline: “From the BRICS summit to the G20. When the South asserts itself”. The publication sees the expansion of the BRICS (Brazil, Russia, India, China, South Africa) to include half a dozen other states as “the willingness of emerging countries to work towards a reorganisation of the international system. A major step in the rebalancing of the planet that will require many others”. Which brings us to another question that keeps cropping up: “Will the BRICS be able to set up another international monetary system capable of competing with the one built around the dollar? ”
Even today, several national currencies are already used in international trade (pound sterling, Swiss franc, yen, yuan... ). The war in Ukraine and the sanctions imposed by the United States have led to the use of currencies other than the dollar for international trade, but nevertheless, the American currency retains its preponderance.
Le Figaro of September 6 points out that the BRICS, which have grown from four (Brazil, Russia, India and China) to eleven this year, “account for 45% of the world’s population and 30% of the planet’s GDP”. Nevertheless, the title of the article states: “The dollar king won’t be dethroned any time soon”. Below it notes: “One figure seems to lend credence to de-dollarisation: the greenback now accounts for just 58% of the world’s central bank reserves, compared with 70% at the start of the century”, it goes on: “If the greenback has lost ground as a reserve currency, no other currency can claim to have conquered it”, as its dominance “is founded on the depth of the US money and bond market, an unrivalled haven for global savings”. It still accounts for “40% of the world’s debt issuance and trade”.
The dollar is here to stay. For one good reason: who could arbitrate between the dozen or so more or less developed states, with their different and often contradictory interests? And above all, because in the kingdom of the blind, the one-eyed man is king. The dollar has been on the same footing as all other paper currencies since 15 August 1971, when the president of the United States announced the end of the dollar’s convertibility to gold, putting an end to the Bretton Woods international monetary system. But the dollar’s dominance is based on the economic weight, military and political power of the most powerful imperialism, which inspires the confi dence needed to attract capital in the most unstable periods of capitalism.
Currencies which can to some limited degree compete with the dollar are able to do so only because of the multiplication and amplifi cation of currency speculation.
The contradictory relationship between American imperialism and China
It is in the relationship between American imperialism and China that economic and military interests are clearly the most contradictory.
American imperialism has had China on its radar ever since Mao Zedong came to power in 1948- 1949. Despite the many links forged over the years between the economies of the two countries, military and diplomatic tensions, particularly over Taiwan, are escalating. So much so, that it’s difficult to predict whether the threat of a full-scale war will pit the United States primarily against Russia or China.
But at the same time, economically speaking, the US and Chinese economies are intertwined, and a decoupling would be catastrophic.
An article in the American publication Foreign Affairs headlined in May: “US-China economic relationship evolving but not disappearing”. The purpose of the article was to express the concerns of the American upper middle class, and to describe the efforts of the Biden administration to allay that concern. It quotes a US national security advisor to assert that the US is “in favour of risk reduction, but not decoupling”, and insists: “US export controls would remain narrowly focused on technologies likely to tip the military balance”.
The same magazine quotes US Treasury Secretary Janet Yellen, who a week earlier asserted that the US is not seeking to decouple from China, an outcome she said would be “disastrous” and “destabilising for the world”.
The magazine states, with supporting evidence: “No decoupling has taken place so far. For example, although direct investment in both directions has declined, merchandise trade between the US and China reached a record $690 billion last year. [... ] China remains the third-largest trading partner of the US, after Canada and Mexico. [... ] The reality is that, for many companies, the Chinese market is too vast and too valuable to abandon, despite the geopolitical risks. China accounts for a fi fth of global GDP and has 900 million consumers. Its unique combination of infrastructure investment, human capital and supplier ecosystem has made it a manufacturing powerhouse”.
So, we’re mainly talking about one-off anti-Chinese measures concerning a number of strategic products (certain types of electronic chips, for example). But the American magazine adds: “Many analysts doubt that a targeted approach to risk reduction can succeed”, to give a predictable reason: “Where chips are produced in the future will depend more on the demands of large private buyers than on government policy”.
It is this very reason - in fact a decision made by private capitalists - that has led to today’s aberrant situation, in which a Taiwanese company manufactures almost two-thirds of the world’s high-end chips.
Leading the class struggle of the proletariat to victory
At a time when the threat of generalised war is becoming tangible, all bourgeois parties have in common the implicit or explicit defence of the idea that war suspends or halts the class struggle.
We have to oppose this idea in our literature. And should war become so widespread that it directly concerns the countries where our movement is active, we will need to continue to do so. We’ll leave it to the anarchists to theorise individual reactions or advocate desertion.
If our class is unable to prevent a war, and is mobilised, our militants will have to take part, along with the rest of the working class. And when in uniform, not only will we need to continue to defend our ideas, the ideas of class struggle, but we’ll have to win over other servicemen and servicewomen who are our comrades; individually and clandestinely, as long as it’s not otherwise possible; even in whole contingents if there is a revolutionary upsurge. We will refuse to flee the war or desert. Demanding peace will not be enough, we will have to bring the class struggle into the army. “Turning the imperialist war into civil war”: this was the program of Lenin and the Bolshevik Party, and it led the working class to the conquest of power.
13 October 2023