Dynamite in the foundations: Alan Woods on the crisis of world capitalism

https://www.marxist.com/dynamite-in-foundations-alan-woods-video.htm

~~ posted for dmorista ~~

At a meeting of leading members of the International Marxist Tendency at the end of January, Alan Woods (editor of marxist.com) provided an overview of the dramatic events unfolding at the start of 2021. The crisis of world capitalism is causing ruptions, dislocation and class polarisation in one country after another. We have also included below an audio recording with the Spanish translation removed. 

The COVID-19 pandemic continues to inflict misery and hardship on ordinary people, while the wealthy enrich themselves even further. The ruling class is pumping trillions into the system to keep it afloat, but even if there are short-term recoveries, this will ensure an even-deeper collapse down the line.

The new year barely began before a far-right mob stormed the US Capitol Building in Washington at the urging of former US president, Donald Trump – turning the centre of Western imperialism into the image of a failed state. These events, coupled with the vastly larger BLM protests last summer, show how deep the polarisation of US society has become.

Elsewhere, big protests in India and Russia demonstrate the same process: the masses' resentment is growing, and the ruling class is failing to govern in the old ways. As Alan explains, every road leads to an unprecedented explosion of class struggle on the world stage.

In this context, the task of Marxists is to present a revolutionary socialist alternative to the millions of radicalising workers and youth who are witnessing with their own eyes the total failure of capitalism to provide them with a decent existence.

(Please go to the link at the top for links to the video and podcast - for some reason they would not "take" on Blogger, NB)

Transcript

These world perspectives are unlike any other I’ve spoken on, like a black cloud hanging over the situation is this unparalleled pandemic, subjecting millions to misery and death. There are almost 100m cases worldwide, and over 2m deaths.

These figures are unprecedented outside a terrible world war. 

The situation is especially bad in poor countries, in Africa, Asia, Latin America. But it also affects some of the richest. In the USA there are over 25m cases, and the number of deaths is creeping inexorably towards half a million. I’m sitting in London, where Britain has the worst number of deaths per head. 3.5m cases, and they’ve just officially admitted to over 100,000 deaths.

In other words, the present crisis is not like an ordinary economic crisis. This is a literal life-and-death situation for millions of people. The starting point of our analysis is capitalism cannot solve the problem: it is itself the problem.

This terrible scourge serves to expose the deep divisions between rich and poor. It’s exposed the deep fault lines that divide society. Between those who are condemned to get sick and die, and those who are not.

It has exposed the wastefulness of capitalism, its chaos and inefficiency, and is preparing class struggle in every country in the world. Governments are fond of military analogies in describing the current situation. They say we are at war with an invisible enemy, this terrible virus. Their solution is all classes and parties must unite – behind the existing government. 

Yes, but a tremendous gulf separates words from deeds. This gulf is between the urgent needs of society, and the mechanisms of the market economy. If we were really at war with the virus, then all governments should mobilise all their resources towards one single task: to mobilise for a global plan of action.

The case for a planned economy, internationalism and international planning is unanswerable. Despite the ideas of Mr Trump, the virus doesn't respect frontiers or border controls. 

From a purely rational point of view, the response would be to ramp up vaccine production, one would have thought. Instead, we have the disgusting spectacle of the row between Britain and the EU over scarce vaccines, while the poorest countries are virtually denied access to any vaccines at all.

The question arises: why is there a scarcity of vaccines at all? Capacity for production needs to be expanded by setting up new factories. Why is this not done? For the simple reason that the big pharmaceutical companies have no interest in massively expanding production, because they’d be worse off. If they ramped up production capacity, so that the whole world was supplied within six months, which is entirely possible, the newly built factories would stand empty immediately after – think about it!

Profits would therefore be much lower than the current situation, where existing plants can produce at-capacity for years to come. Which means the pharmaceutical companies earn big profits, and of course there are constant problems with production and supply. This means shortages everywhere, with millions of doses being unused, and millions dying as a result.

On the other hand, the capitalist class of all countries are pressing for people to get back to work, for production to be restarted. 

Workers are forced back into crowded workplaces, without adequate means of protection, and this is equivalent to passing a death sentence on many workers and their families. 

On the other hand, the economic crisis is the most severe in 300 years, they say. Just between April and June of last year, 400m jobs were lost worldwide. If you take tourism alone, which is important for many poor countries, 120m jobs will be wiped out, they think. The so-called emerging economies are being dragged down with the rest. India, Brazil, Russia, Turkey are all in crisis. South Korea’s economy sank last year for the first time in 22 years. Despite state subsidies worth about $283bn.

I won’t spend much time on economics, though I will later if I have time. From a Marxist point of view, the study of economics is not an abstract question, not an academic question. But it [the economy] has a profound effect on the development of consciousness of all classes, that’s the point. The main thing that we note everywhere now is a crisis, not just of governments, a political crisis, but a crisis of the regime. Particularly in Europe and the USA, I would say.

There are clear indications that the crisis is so severe, so deep, that the ruling class is losing control of the traditional instruments they used in the past for running society. And bourgeois politicians have totally lost control. 

Beginning with the USA, the wealthiest and most powerful country. The world economic crisis has hit the USA very hard. 40m Americans filed for unemployment during the pandemic, as always it’s the poorest who suffer most, and the youth. A quarter of under-25s have lost work. This undoubtedly caused serious alarm in ruling class circles in the USA. 

The state was not supposed to play any part in economic life, perhaps you remember that theory? But, alarmed by the danger imposed by the situation, the ruling class was forced to take emergency measures. They ditched all the old theories that the state must not interfere in the economy, and now in all countries, starting with the USA, the so-called free market economy, capitalism, is really on a life support system, like a coronavirus patient. It only exists because of the crutches of the state. 

Most of this money went straight into the pockets of the rich. But initially it did have the effect of cushioning the effects of the crisis on the poorest layers. But now these supports are being withdrawn. And we have, as a result, the most terrible poverty in the richest country in the world. 

I gave the figures in a recent article that I wrote, horrifying statistics. US families now, many of them, lack enough money to put food on the table. Food banks are proliferating, and millions are sinking into the direst poverty. Many are threatened with losing their homes, because they can’t pay the rent. 

In other words, the gulf between rich and poor has been transformed into an unbridgeable abyss. 

And this has an effect. All this demagogy about the national interest, we must fight together, all in the same boat, etc. Well, let’s spell it out. The masses are prepared to make sacrifices under certain circumstances. In time of war, people are prepared to unite to fight a common enemy, that is true. They are prepared for a period at least, to accept lower living standards. And also restrictions on democratic rights, to some extent, for a period. 

But the existence of unprecedented inequality, the scandalous riches accumulated by the rich… while for example, the IMF estimates that close to 90m people are due to fall below the level of $1.90 a day: the threshold of extreme deprivation. 

Yet, in 2020, the total wealth of the billionaires grew by $1.9tn. That is during the pandemic, during the crisis. The example of Jeff Bezos stands out. He now makes more per second than the typical US worker makes in a week. 

The gulf separating the haves, and have-nots, has stretched into an unbridgeable abyss, as I said. And this is deepening the social and political polarisation, that’s the point. It’s creating an explosive mood of anger in society. Everywhere you look, in all countries, there’s a burning hatred of the rich and powerful: the bankers, Wall Street, and the establishment in general.

This hatred was skillfully channelled by the right wing demagogue Donald Trump. And this has appalled the serious representatives of capital. They rightly saw Donald Trump as a threat because he was deliberately dynamiting the basis of consensus, of all the centre politics they’d been painstakingly building up for decades.

The ruling class is desperate to prevent this polarisation, and put the centre together again. But all of the objective conditions militate against their success. And the events of 6 Jan are a striking demonstration of this. Now they’re saying it was an insurrection, they’re trying to impeach Trump who is accused of organising an insurrection. If it was an attempted insurrection it was a very poor one! More than that, it was a big riot. But nevertheless, it was dangerous for the ruling class, and glaringly exposed deep rifts in the state itself.

The events of 6 Jan in Washington indicate the polarisation of society have reached an unbearable point, a breaking point. The institutions of bourgeois democracy are being tested to the point of destruction. It’s a crisis of the regime, not a normal political crisis. Despite a barrage of media hostility afterwards, 45 percent of registered Republicans though the storming of Capitol Hill was justified. You’re talking about millions! That’s quite significant, but more significant is the fact that 54 percent of all Americans thought the burning down of the Minneapolis police precinct was justified. And let’s not forget that 10 percent of the US population took part in the BLM protests, which is many times more than those who stormed the Capitol.

The spontaneous movement that swept the country after the murder of George Floyd and the unprecendented (sic) events that followed the US elections, if taken together, represent a turning point in the entire situation. Of course, the movement is confused, to put it mildly. It has some reactionary elements, but it isn’t just a black tide of reaction. That’s the nonsense of liberal observers who understand nothing.

Marxists must be capable of determining what is progressive from what is reactionary. We must understand that here, in embryo, we have revolutionary developments in the future. The stupid liberals understand nothig  (sic), they shout about fascism, about which they know nothing. I will quote later from a very perceptive article which shows the far-sighted bourgeois understand what we understand: everywhere, in every country, beneath the surface, there is a mood of anger and resentment against the established order. This mood expresses itself in the collapse of confidence in the official institutions, the parties, the governments, the political leaders, bankers, rich people, the police, the judiciary, existing laws, tradition, religion, morality of the existing system. 

People no longer believe what they’re told by the newspapers and the TV, they compare the huge difference between what is said and what happens, and they realise we’re being sold a pack of lies. This wasn’t always the case. In the past, most people didn’t pay much attention to politics, which goes for workers also. Conversations in the workplaces were usually about football, movies, television programmes. Politics were rarely mentioned, except maybe at election time.

Now, all that’s changed. The masses are beginning to take an interest in politics, because they’re beginning to realise this directly affects their lives, and the lives of their families. This in and of itself is a reflection of a mood of revolution. The institutions of bourgeois democracy were based on the assumption that the gulf between rich and poor could be disguised and contained within manageable limits. But that’s no longer the case. That is precisely the reason for the collapse of the political centre. 

It’s true that because of the complete bankruptcy of the reformists, including the left reformists, this mood has been capitalised upon by right-wing demagogues, so-called populists. Of course, nature abhors a vacuum. This is being interpreted by the stupid liberals and reformists as fascism. But the strategists of capital do understand, very clearly. 

At Christmas time, the FT published an article signed by the editorial board, which showed a very different assessment of the process, and where it would go. With your permission, I’ll quote a few lines:

“Groups left behind by economic change are increasingly concluding that those in charge do not care about their predicament.” 

It’s true, these people – Trump supporters – when they’re interviewed say “Washington doesn’t care about us! We’re the forgotten people!” 

The article continues… 

“[O]r worse, have rigged the economy for their own benefit against those on the margins. Slowly but surely, that is putting capitalism and democracy in tension with one another. Since the global financial crisis, this sense of betrayal has fuelled a political backlash against globalisation and the institutions of liberal democracy...” (this is the fascinating bit!) “Rightwing populism may thrive on this backlash while leaving capitalist markets in place.” And this is the point… “But as it cannot deliver on its promises to the economically frustrated, it is just a matter of time before the pitchforks come out for capitalism itself...” “and for the wealth of those who benefit from it.” 

Now, that’s serious talk, isn’t it? It shows a perfect understanding of the dynamics of the class struggle. How so-called right-wing populism can just be the first stage before a revolutionary explosion. They understand that perfectly well. Even the language is significant. Armed with pitchforks suggests an analogy with the French Revolution, or the Peasants’ Revolt of 1381, where the peasants seized London. This tremendous volatility can be observed in many countries, if not in every country.

We saw it just recently in Russia, where the return of Navalny was the signal for an explosion of protests in Moscow and 110 other cities. Places like Vladivostokin the provinces. What does this represent? It’s not yet the Russian Revolution, it’s true. They’re also very heterogeneous demonstrations, lots of middle-class people, intellectuals, liberals – but also a growing number of workers. But these were big demonstrations in a Russian context. It needs to be seen in the context of falling living standards. Between 2013 and 2018, before the pandemic, the annual economic growth was 0.7 percent, basically stagnant. At the end of last year, you saw negative growth of about 5 percent.

Putin the past could boast of some success in the economic field, but not anymore. Unemployment is growing fast and many families are losing their homes. So the question of Navalny is only one element in this situation. Everything indicates as well that Putin’s support is collapsing. Two days after his arrest, Navalny put out a very interesting video, seen by millions, exposing the personal corruption of Putin, showing he’s built a large palace on the Black Sea, and all this is building up an explosive mood. As I say, Russia is not in a pre-revolutionary situation yet, but events are moving very fast now. 

Now at the other end of the world, in India, as I speak we see events that amount to an insurrectionary movement: of the farmers, who staged a tractor march to Delhi on 26 January, a couple of days ago, on Republic Day, where Modi was celebrating with a big military parade. It was impressive to see this on TV, astonishing, to see thousands of farmers fighting with the police to get to the red fort, fighting with heavily armed police, attacked and beaten. Modi has been clearly shaken by that uprising, which gave some idea of the pent-up fury of the masses.

But the weakness of the movement in India is the absence of a serious response from the powerful Indian working class. 

The farmers’ struggle did have a powerful impact in the factories, but the powerful Stalinist trade union leaders are trying to put the breaks on. Now the fire is under their backsides, Now they’re talking about a four-day general strike, which is significant. In the past they tried to exhaust the workers, as they did in Greece, calling a series of one-day general strikes. This is a trick to blow off steam, and prevent a generalised movement.

Earlier we were discussing the IS of the slogans proposed by comrades in Pakistan and India of a general strike: I hope I will have time to deal with that later on. 

I won’t spend long on the perspectives for the Biden administration, but clearly Wall Street is pinning all its hopes on administration and its vaccination efforts, but Biden will preside over a divided and declining nation. His attempts to buy his way out will only build up the debt in the system, which will prepare a bigger crisis down the line.

I don’t have time to deal much with China, but China is the only major economic power to have had some kind of positive growth. That’s because the Chinese state intervened decisely to counteract both the pandemic and the economic crisis. A kind of state capitalism, if you want to use that expression. And to be fair it’s got results up to now. 

It’s true that China’s growth is at about 2 percent, which is very poor from a Chinese perspective, but they’re now forecasting growth of 8 percent this year. If that is true, then China will outperform the rest of the world. But this very success will be its undoing. This economic growth is based excessively on exports. China is intervening aggressively on the world market and will have to intervene even more aggressively. This will inevitably mean tension between China and the US, which sees China as the main danger – not just Trump, but Biden as well, the Democrats agree. 

Previously, China was a big part of the solution for world capitalism, now it’s a big part of the problem. And the conflict particularly between the USA and China threatens to bring about an even-more-serious trade war, which is the greatest possible threat to world capitalism that exists, because it was the growth of world trade that explains the development of capitalism in the last period. So-called globalisation. Now of course this will turn into its opposite with very negative results for capitalism. 

This in turn will have an effect inside China. There have already been factory closures and unemployment, which have been concealed, but they exist. That explains the reason for Xi Jinping clamping down on Hong Kong. This wasn’t an expression of strength, but of fear and weakness. The Chinese ruling class were concerned this kind of movement would spread to the mainland, and it will, as night follows day. As an international we must be prepared for big events in China, which will happen when nobody expects it, because it is a totalitarian regime, we don’t know what’s happening there. While Chinese state could suppress a small state like Hong Kong, it will not be so easy to control 100 Hong Kongs in mainland China. So we must follow China carefully.

I don’t have time to discuss the economy for long. But it’s important to underline what I said earlier: when the bourgeoisie is faced with losing everything, they will resort to the most extreme methods to defend their system. Everywhere now, they’ve ditched their old arguments about the market, and opted instead for Keynesianism. They’ve lurched like a drunken man from one lamppost to another.

Now they depend, almost exclusively, on the handouts of the state. Ted Grant used to describe Keynesianism as voodoo economics, I think that’s a fair description. The idea that the state has unlimited funds is nonsense. That’s really a desperate policy they’ve adopted everywhere, and it’s led to astronomical, unthinkable debts. This is the greatest danger facing the capitalist system at this time. 

I have the figures here, we will produce this in a document later. But sooner or later, these debts will catch up with them. There’s a ticking time bomb of debt, which is built into the foundations of the economy now. In the long term, the effects will be more devastating than any terrorist bomb. But in the short term, they’re quite happy to continue this. And they even publish articles confidently predicting a rebound. 

Now, as serious people, we must consider these arguments seriously. Is a recovery of some sort possible? Well, first of all, we must understand that the economic predictions of the IMF and World Bank should be taken with a large pinch of salt. In the first place, the present crisis is different from crises of the past because it’s entangled inseparably with the coronavirus pandemic, and nobody can predict with any degree of certainty how long that will last. For this reason, the predictions of the economists cannot be considered more than mere guesswork. The only certainty is all the main indicators are pointing downwards, that much is clear. 

But does that mean a recovery of some sort is completely ruled out? No, you can’t draw that conclusion. In fact at a certain point, some sort of recovery is inevitable. The capitalist system has always moved in booms and slumps. Sooner or later, they’ll find a way out of this also. But we have to look at what kind of recovery we’re talking about. Are we talking about the beginning of a long period of growth and prosperity, or merely a temporary interlude between one crisis and another? 

The most optimistic prognosis is based on the existence, at least in the advanced capitalist countries, of what they call ‘pent-up demand.’ There are plenty who are facing genuine impoverishment, but there are also millions of better off families who now have money to spend – that’s a fact. At the end of the pandemic, they’ll be eager to spend in restaurants, bars, foreign holidays etc. This could mean an immediate sharp uptick in the economy after the pandemic, that’s not ruled out, together with further, huge injections of money from the state.

Now let’s be clear: sometimes comrades have a too black-and-white idea on this question. From our point of view, a temporary recovery would not be a bad thing. The pandemic and the consequent rise of unemployment, shocked the working class and led to a certain amount of paralysis, that’s a fact. But even a modest, small recovery of the economic activity, a slight fall in unemployment would have the immediate effect of reactivating the economic struggle, as workers strive to win back everything they’ve lost in the previous period.

And let’s be absolutely clear about it. Such a recovery would be temporary, and extremely unstable, because it’s on an artificial and unsound basis. It would contain within itself the seeds of its own destruction. And the higher it climbs, the more severe the fall will be.

But as I said earlier, the question of economics is only of interest from our point of view insofar as it impacts the consciousness of the masses. And here I must confess I feel a little bit uneasy about the way some comrades pose the question of perspectives. It strikes me as a bit mechanical. A comrade writes an article, makes a list of very interesting statistics on hunger, misery, unemployment etc., and then immediately concludes: capitalism is finished, long live the socialist revolution!

Comrades, things are not quite as simple as that, I’m afraid to say, and from a dialectical perspective that method is quite objectionable. You do not inject conclusions into a situation, you cannot assume what is not proven. Don’t assume that people who read these articles agree with what we stay. The conclusions must flow from the analysis, and it must be a serious analysis.

It’s not hard to describe the crisis of capitalism. What is not so easy, and what we have to establish, is to explain how you get from A to B. And this needs to be explained. The main problem is the absence of the subjective factor. The crisis is a fact, and the fact is the workers are learning, but it takes time – it’s a learning process. And the masses will not merely draw the same conclusions that we drew, for theoretical reasons, years ago. The masses can only learn from one thing, that’s experience. As Lenin used to say: “Life teaches.”

But learning from the great book of experience is a slow and painful process. It would be greatly expedited if there existed a mass revolutionary party like the Bolsheviks. An organisation with sufficient numbers to be present and with sufficient authority to be listened to by the workers.

Lenin quoted Hegel, he said the truth is always concrete. Sometimes, the most erudite Marxists have forgotten. Comrades, we must show concretely how to pass from A to B, and B to C and D and E. For this purpose, we must create an appropriate series of transitional demands that protect the health and livelihoods of workers, and place the burden of the crisis on the shoulders of the bosses. We must make appropriate demands, not just for workers in healthcare and frontline services, but for all workers, paid for by the employers. If the bosses say we can’t afford these things, let them open the books and expose the huge amounts of money they’ve got hidden, and the huge injections of money they’ve been given by the state!

It is only by the bosses’ failure to grant these demands that the workers will see the necessity of a transformation of society.

The main problem is one of leadership. The angry mood of the masses cannot find an expression from the leading layers of the class. The trade union leaders are holding the movement back. But with or without them the workers will find a way of expressing themselves. In Italy there is no mass workers’ party, but the mood of the workers grows angrier and more impatient every day. The repeated failures of government are inevitably leading to an explosion of the class struggle. 

This mood is expressing itself not in parliament but on the streets. New layers are being drawn into the struggle. We saw it in France with the gilets jaunes, we saw it in India with the farmers, in a peculiar way we see it in the storming of the Capitol. 

What would the appropriate slogans now be in India? Objectively speaking, all the conditions exist for an all-out general strike. The problem is the Stalinist leaders, as usual, have been dragging their feet. They’re hopelessly corrupt, counterrevolutionary, but you must understand that even the most corrupt and counterrevolutionary leaders can come under the pressure of the working class when it begins to move.

Now the trade union leaders in India are discussing the idea of the four-day general strike. Our position is for an all-out general strike. So what do we do? We’re not the leadership of the movement, but these guys are. We should say to them: ‘very well, let’s have a four-day strike – but less talk, and more action! First: name the day! Start a campaign in the factories, call mass protest meetings, set up strike committees, and draw in the farmers, women, youth and unemployed – and all oppressed sections of society. And link up these organs of struggle at a local and national level. In other words, soviets! If that were done – I don’t say it will be – but if it were, a four-day strike would be transformed into a four-day general strike, which poses the question of power. Once the masses in India are organised for that, no force on earth will stop them.

I must sum up my remarks. But there is one point we must understand: this will be a long, drawn-out crisis. It will last years, or even decades, with ups and downs. It will be longer due to the absence of the subjective factor.

However, this is only one side of the coin. The fact that it will be long and drawn out doesn’t mean it will be any less turbulent, quite the opposite. The current perspective is for sharp and sudden changes. Processes that took many years to develop in the past can now occur overnight, posing very serious questions before us. And we must be prepared, comrades! The year 2021 will be like no other, the working class has entered a very harsh school, there will be many defeats and setbacks, but from that school the workers will draw the necessary lessons.

The TU leaders are completely out of their depth – they reflect the past, the days when they had an easy life with the bosses, could easily get small concessions for the workers. Now things are very different. They will have to fight for every demand. And the workers find themselves in intolerable conditions, where their lives and those of their families are in danger. 

The unions will be transformed in the course of struggle. One by one, the old right-wing leaders are dying or retiring, or being replaced. A new generation of younger class fighters is beginning to challenge the leadership. The stage is set for the transformation of the unions into organisations of struggle. 

And even the most reactionary and apparently inert TUs will be drawn into this struggle. And we Marxists must be at the front ranks of this struggle, upon which ultimately the success of the socialist revolution depends. Dialectics tells us things can change into their opposites, and we must be prepared for this.

We have the correct ideas, methods and perspectives. Our task is now to turn this into growth, to create a powerful revolutionary army of cadres, that is capable of leading a revolutionary army, capable of leading workers in the struggle for power. 

There is nothing more important in our lives. And together, we can definitely achieve it.