Editorial for Revolutionary Perspectives 18 (Series 4).
Capitalism has brought the world to the edge of an abyss. Hundreds of millions, if not billions had already fallen into it, even before Covid-19 appeared. Despite the “boosterism” of the British bourgeoisie, the vaccines have not brought the pandemic under control even in the richest countries in the world (and less than one in six of the global population has currently had two jabs). As we go to press, all legal safety measures are being lifted in England despite a rising infection rate. Their gamble is that the profit-making machine can get back to “normal” soon.
For most of us the previous “normal” was hardly paradise. Before the pandemic much of humanity was already subject to various forms of imperialist violence, with wars in Afghanistan, Syria, Yemen, Central African Republic, Congo, Sudan (where the war in Darfur goes on), Somalia, Mozambique, and all across the Sahel, not to mention the insurgencies in Burma, Indonesia and the Philippines. Add to that the continuing police violence in places too numerous to list, but includes Colombia, Peru, Brazil, Philippines etc. Throw in too the perilous fate of refugees forced to flee this violence and the hunger it engenders, who end up in North Africa (especially Libya), Mexico and Europe.
Despite the selective Panglossian propaganda of the Stephen Pinkers of this wonderful world, the reality for over 2 billion of the planet’s people is literally not knowing where the next meal is coming from. Scientific advance contrasts dramatically with social atavism. We have recently seen dramatic protests against attempts to make the population pay for economic failings in Colombia and Cuba, but as the fallout from the pandemic continues, we can be certain that these will not be the last.
Debt and its Consequences
Even in the relatively comfortable “democracies”, increasing numbers were seeking help from food banks before the pandemic. The numbers have increased manifold over the last 15 months. Whilst the lowest paid workers struggle to survive, governments have created billions in payments to businesses to keep the economy afloat. As a result the Wall Street Journal (WSJ) tells us:
"The pandemic has pushed global government debt to the highest level since World War II, surpassing the world’s annual economic output. Governments, especially in rich countries, are borrowing still more, partly to erase the damage of Covid-19."(1)
And, as the same article points out, the global capitalist system seems a lot more relaxed about ever-increasing debt since the quantitative easing programme saved the system after 2008. But these debts still exist. The WSJ goes on to tell us that:
"The U.S. government is on course for a budget deficit of $3 trillion for the second year in a row. Despite that and fears of inflation, 10-year Treasury bonds are yielding only around 1.33%, partly because of the Federal Reserve’s caution about raising its interest rates."
Though the ruling class are playing it cool (perhaps due to having no idea what to do?), the system is in a bind. If the fears of inflation which are already apparent (especially in global “commodity”, i.e. raw material, markets) come to pass then the system will have to raise interest rates (in the US, and in other rich states, they remain historically low, between 0 and 0.25% in the US). If that happens debt repayment will suddenly become unsustainable, especially for the now substantial numbers of “zombie companies”, who survive only by paying interest without making a profit. They would not be the only ones in danger. Given the global hegemony of the US dollar, the consequences of higher interest rates would spell disaster for so-called “emerging markets”. They cannot simply issue currency without it having drastic inflationary consequences at home. Here, some countries which are already experiencing high inflation (like Argentina), will be faced with hyperinflation, and unsustainable debt repayments.
Even before the pandemic, UNICEF were telling us that in 2019, 25 countries — most of them in Africa and South Asia — were spending more on debt payments to financial institutions in wealthy nations than on education, health care and support programmes for the poorest. Zambia’s external debt payments took 2% of government revenue in 2011 but 34% this year. Pakistan’s external debt payments have soared to 35% from less than 10% over the same period.(2) Paying more for vaccines will only drive these debt levels even higher but, as we show in this issue, the pharmaceutical companies are only interested in the health of humanity (or lack of it), as far as it registers profits for themselves. This can only mean mass misery and more social explosions of the type mentioned above. Even in some of the wealthy capitalist countries, the ruling class are already refining the tools of oppression, with France, the UK and Australia leading the way in either giving enhanced powers (and indemnity) to the police, or militarising still further the forces of law and order.
Some things do carry on as “normal”. Imperialist rivalry does not abate just because millions are sick and dying. The USA is now re-mending the fences torn down by Trump to revitalise a Western alliance against Chinese ambitions to dominate the whole of Eurasia, via its Belt and Road project. As our Italian comrades show in this issue, the response is for China to draw closer to Iran, and any other state that has fallen foul of the US. But the rivalry does not stop there. China increasingly threatens Taiwan with a whole series of military manoeuvres as it builds up its navy in preparation for an eventual confrontation in the Pacific with the US.(3) The Chinese leadership under Xi Jinping make no secret of the fact that they want to be the world’s dominant power by 2049, exactly 100 years after the “Chinese Revolution” brought the Chinese Communist Party to power. And part of that nationalist resurgence demands the full integration of Hong Kong, Macao and Taiwan into the People’s Republic of China.
The new “normal” also now includes imperialist rivalry in the Arctic where global warming has reduced the ice to its second-lowest levels ever in October 2020. This has opened up a new contest. Russia, Canada, the US and the UK are vying to control the area. China sent its second icebreaker, Snow Dragon 2, there whilst
"Beijing-based Cosco is the only one of the five major container shipping companies sending vessels through the Northern Sea Route each year as part of the “Ice Silk Road” initiative with Russia."(4)
All this in addition to the impetus for imperialist confrontation over increasingly scarce water resources (in the Sahel, the Blue Nile between Ethiopia and Egypt or the Jordan, Euphrates and Tigris in the Middle East) which climate change has created. Indeed capitalist-created climate change is what links pandemics, imperialist competition and the overall environmental threat to humanity’s future.
Capitalist Climate Change
As we go to press 500 people are feared dead from an unprecedented heatwave in Canada whilst, by contrast, 200 are dead and hundreds more missing in Belgium and Germany, due to floods brought about by massive concentrated rainfall not seen before. Both are consequences of human-made global warming which has already cost the lives of 150,000 people a year for 3 decades. This is expected to double in the decade ahead (according to WHO and other scientific estimates).(5) And all that has been agreed are pious promises to reduce emissions but as the WSJ advised in 2017 this should not cost more than 0.1% of world GDP growth! We are actually living through a mass extinction which is developing faster than any in global (and not just human) history with species vanishing at a rate far in excess of that of the Permian extinction of just over 250 million years ago.(6) The root cause of all of these issues (or the failure to deal with them) is a system based on nothing but the pursuit of profit, which creates excessive wealth at one pole, and unbelievable poverty at another. It is comforting, for some, to think that there is nothing much wrong with the world that a few reforms cannot solve, but we have already gone too far for that. Unless the system of production is changed so that it is dedicated to producing goods that people need, and not commodities aimed solely at financial profit and whose production entails massive waste and destruction, humanity faces a planet which will only support about an eighth of the world’s current population by the end of the century.(7) It would be good if the capitalists agreed that their game is up, but we know that is about as likely as the Second Coming.
From the point of view of the controllers of capital there is no serious crisis just a series of “problems”. They are still getting richer, the working class globally is hardly responding, and lacks a coherent project of its own, so our masters and mistresses are not being pushed into a corner by the class war (which they are currently winning). As the article on the collapse of Bretton Woods in this issue shows, world capitalism has been facing a crisis of profitability for half a century now. It is unprecedented and the longest such crisis in capitalist history. The system really needs a massive devaluation of capital before it can start a new cycle of profitable accumulation like the post-war boom after 1945. Indeed, only some devastating event like a world war can bring this about. Naturally they will do everything in their power to avoid it as the consequences are too dire to be contemplated. As long as no other pressures come to bear (from a rising working class movement or an intensification of the imperialist rivalries already analysed), inertia and muddling through will be the primary policy drive. Great hopes will be raised about a “green industrial revolution” (on the capitalist right) or a Green New Deal (on the capitalist left). A chimera in both cases. The one thing that is certain is that the working class, and the populations of the poorest countries in general, will pay yet again for the follies of the system. How the working masses respond will be key.
… there is One Hope
In the social turmoil that will accompany the inevitable dash to extinction, the extent to which the revolutionary programme is taken up will be crucial. A movement that sets its sights on a new global way of living, not based on fighting for this or that local or immediate issue (e.g. abolition of the police without abolition of the capitalist state is meaningless), which will not be based on “identity” (an ideological game to divide humanity), but the common class position we hold in the system of production. We have a clear political alternative furnished by the history of past generations of workers’ struggles (a world human community based on the direct democracy of workers’ councils). We have an alternative to the profit-driven road to disaster in the shape of a community of freely associated producers who exchange to meet each other’s needs. Of course, a programme propagated only by revolutionaries is not enough. What is also needed is a mass movement of the working class which is already the majority of the world population. Our task is to get across the ideas we have gleaned from the history of class struggle so far so that this time capitalism everywhere is overthrown. Capitalism cannot be overthrown by decree but only by the actions of the mass of the class taking up its own programme of emancipation. Humanity has never needed that initiative so much as it does today.
(2) Peter S. Goodman and Alan Rappeport “This Is the Plan to Rescue Poor Countries From the Pandemic” New York Times, June 24, 2021
(3) news.usni.org China may now have more ships that the US Navy but it also has not fought a war since 1979 when it tried to invade Vietnam – and lost.