Coronavirus crisis deepens class antagonisms
Statement from the International Secretariat of the CWI
On the other side of the coronavirus pandemic crisis, things will never be the same again. This will be similar to the situation after the two world wars of the twentieth century. The general situation has already unmistakably “changed, changed utterly”. Moreover, it is the rapid speed of events that is one of the most striking features of the situation. Even former British prime minister, Gordon Brown, with his New Labour pedigree, has taken to quoting Lenin, as the CWI has argued, saying that the events of decades in a crisis can sometimes seem to be concentrated into a week!
Measures that were considered as unacceptably ‘socialist’ just a matter of months ago have been desperately embraced by capitalism and their governments as a means of trying to save them and their system from a worldwide economic and social catastrophe, including an uprising of workers in the advanced industrial countries and a colossal revolt in the neocolonial world.
As one bourgeois commentator in Britain declared, Rishi Sunak, the Tory Chancellor of the Exchequer, was “forced to decide between Tory doctrine and food riots, [and] made the right choice”. And what was that choice? Another Tory Cabinet minister answered in the Observer newspaper: “We’ve just nationalised the economy.” This was not completely accurate but what is true is that the Tories have spent billions of state money – our money – to prop up their system based upon private profit and not on social need. This was amid claims particularly that the system was threatened with collapse and the consequent outburst of class anger by the workers who would be most affected.
Moreover, the crisis starkly revealed that this system has clearly failed – above all in the crucial National Health Service (NHS). Prime Minister Boris Johnson and his cronies extol ‘our NHS’ but they have systematically privatised and leeched off the NHS. The NHS was historically a creation of the labour movement in the post-1945 period when the troops and working class, coming home from the war, declared ‘never again’ would they go back to the mass unemployment and deprivation of the interwar period. Moreover, in setting up the NHS Aneurin Bevan met with ferocious resistance from the Tory party and, at that time, the mostly Tory doctors. Bevan admitted that the only way he got the scheme off the ground was by “stuffing the doctor’s mouths with gold”, in the form of allowing them to pursue a certain amount of lucrative private practice. Later this was used as a wedge by Thatcher in her counter-revolution to effectively privatise significant sections of the NHS, which left it in a weakened state. Her destructive initiatives were continued and strengthened by Blair, Cameron and May.
This has been starkly revealed in the current crisis and has directly contributed to the shortages of emergency beds, respirators and other vital, potentially life-saving equipment. Austerity took a terrible toll on the NHS which lost 44% of its general and acute care beds between 1987-88 and 2018=19. A health researcher commented to the Financial Times that the expansion of the private hospital market over 20 years had provided “an excuse for the government not to invest enough in healthcare capacity… the deal with NHS England was effectively a ‘bailout’ for the UK’s private hospital sector and their landlords, which include listed real estate investment trusts.”. The price is now being paid in Britain with the terrible overcrowding in hospital wards, putting NHS workers and ill patients at risk, including the threat of death. This is where ruthless capitalist privatisation leads.
“the invading socialistic society”
In the US there is not even a national health service with the Trumpian opposition to so-called ‘socialist healthcare’. This has put in jeopardy the very poorest of the American working class who cannot afford punitive private health schemes. This has even led to the beginnings of the revolt against this iniquitous scheme and its advocates like Trump. It has shown all the inadequacies of private ownership and capitalism, which has even posed the question of urgent state intervention in this crisis. It was Friedrich Engels who, when the bourgeois state was forced to step in and rescue failing industries through nationalisation, describe this as “the invading socialistic society”. Capitalism was no longer capable of doing the job and had to be rescued through nationalisation by the capitalist state. This, in turn, calls into question taking over the majority of industry. The idea of an organised socialist plan is then posed.
Under the blows of the desperate economic situation – particularly for the poor and the working class – quite unusual developments are currently taking place in the US. The Financial Times describes how a “little-used piece of wartime legislation has taken centre stage in the increasingly bitter battle between Donald Trump and critics who accuse the president of not doing enough to fight coronavirus.”. Supplies of equipment such as protective masks and hospital ventilators have run low. Democrats and even some Republicans criticised his reluctance to use the Defence Production Act, under which companies can be compelled to make certain products, to press big business into the service of fighting the pandemic. Trump has now been forced to invoke the act in relation to General Motors. Over a hundred national security experts wrote to the president to use the act immediately, warning the private sector “lacks the ability to process incoming requests, prioritise the most urgent needs and coordinate with other companies.” Moreover, the US trade unions have added their voice, with the president of the American Federation of Labour and Congress of Industrial Organisations bluntly stating that the “administration’s current piecemeal efforts to increase the production of N95 masks and ventilators have not worked and quite frankly will not work.”
Their intervention comes after similar warnings from Joe Biden, now the frontrunner in the Democratic Party’s presidential primaries, together with Andrew Cuomo, the governor of New York State. Trump refused to do this because “he does not want to nationalise parts of US business”. He now calls himself “a wartime president” but refuses to use measures already on the statute book for such a situation as this!
The same ideological pig-headedness is displayed over the worsening economic situation in the US where more than three million Americans filed a claim for unemployment benefits last week, “a record high that offers the first nationwide picture of the damage to the US economy from the coronavirus shutdown.” Unemployment claims rose to 3.3 million from 282,000 the previous week: “The data eclipsed consensus expectations of 1.7m, showing the staggering scale of job losses in the first full week of claims since cities and states began to restrict public gatherings and, in some cases, ordered residents to stay home.” This is the single biggest weekly rise in unemployment claims since the government began publishing records in 1967. A Labour economist commented: “This is an impossible-to-comprehend number. We just wiped out a year and a half of job growth… The most important thing to remember is that this is an undercount of people suffering.” Economists at Oxford Economics have predicted 15 million to 20 million job losses in the coming weeks with Jay Powell, chairman of the Federal Reserve, saying that the US “may well” be in recession already.” We are living through a generation-defining moment,” added Mohamed El-Erian, chief economic adviser at Allianz.
This ‘wartime president’ (who dodged the Vietnam War!) may now face more opposition in the presidential elections later in the year than he may have expected. Given his $2 trillion boost to the economy, including cheques through the doors of every household and up to four months increased benefits for the unemployed, he was clearly expecting an electoral bonus. This might still happen given the political weakness of Biden and particularly as the ILO now envisages a scenario where nearly 25 million people globally could lose their jobs compared to the 22 million job losses during the crisis of 2008 which unfolded over a much longer period: “Job losses are materialising at speed.”
EU national antagonisms
National antagonisms have now sharpened even amongst so-called ‘partners’ in the EU under the whip of the crisis. European Commission president, Ursula von der Leyen, has accused EU states of “looking out for themselves”. She accused them of imposing equipment bans and border restrictions in the face of the pandemic. She particularly singled out the lack of response to calls for medical supplies to Italy and export bans on equipment to other member states: “When Europe really needed an ‘all for one’ spirit too many initially gave an ‘only for me’ response… Too many initially refused to share their umbrella. But it was not long before some felt the consequences of their own uncoordinated action.” She singled out “Germany which initially restricted the export of medical supplies to other EU countries… Poland’s government came under fire for imposing a strict no-foreigners rule that led to thousands of kilometres of tailbacks on its borders.”
At the same time Christine Lagarde, the European Central Bank’s president, stated: “there are no limits to our commitment to the euro”. As the CWI has consistently argued that, faced with a severe crisis – and this is a catastrophic crisis – it cannot be excluded that there will be new defections from the euro. Italy, for instance, is locked into a monetary straitjacket from which it could break away at any time. The EU is still a voluntary ‘union’ of independent states, which could fly apart under the pressure of deep and growing economic and social crises. Moreover, national antagonisms, both within the blocs and between them, will be an increasing feature for the foreseeable period ahead.
Even at this early stage of the pandemic crisis, the bourgeois and its political and economic strategists have no clear idea of the way forward. There is a dim realisation that there are no easy short-term remedies to the politically and socially dangerous accumulated problems of world capitalism. They are prepared to take unprecedented measures if necessary in order to break the economic logjam. Again proposals that were condemned out of hand yesterday are now seriously considered as short-term solutions to the economic catastrophe. ‘Helicopter money’ – doling out money gratis – is to some extent the official policy of the Tory government in Britain. Yet when this seemed to be suggested by Jeremy Corbyn and John McDonnell only a matter of months ago, they were condemned out of hand. Once the Tories proclaimed there was no ‘money tree’ to pay for reforms. Now, when it’s a question of saving their system they have discovered a whole forest of money trees!
Now terrified by the prospect not just of a recession but of an economic depression, they are considering the most ‘extreme’ measures to stop the economic decline. Economic soothsayers like Nouriel Roubini – who was one of the few bourgeois economists who empirically anticipated the crisis of 2007-08, as did the CWI, have now resurfaced predicting that this crisis could be deeper and more enduring; in fact an economic depression. He argues that it will not be V-shaped -a sharp decline and an equally sharp recovery – but will most likely take an ‘L-shaped’ form, or even an ‘I’, meaning a complete collapse with no certainty when and how it will end. This is a drop followed by a long-continued stagnation, in other words, a depression. Larry Elliott, the economics editor of the Guardian (London), also argues this is the most likely scenario.
It is ninety years since the economic depression of the 1930s. And as one commentator pointed out there have been quite a few economic crises since, of different depths and seriousness, but up to now only one serious economic depression, starting in the US in 1929. But this was not just marked by economic stagnation but also by the political repercussions worldwide, both negatively in the opportunities that were given to the fascists and far right to take power, but before them, by the colossal revolutionary movement of the organised workers and labour movement, and the opportunities to fashion a mass movement to take power.
The 1930s Great Depression
To begin with, big sections of the working class in the 1930s were stunned by the speed with which the economic crisis developed. And while opposition mass movements existed and grew, the ‘depression’ discouraged many workers from taking the road of struggle. Only when there was a certain recovery in the economy – most notably in the US in 1934-36 – did the labour movement rouse itself and join the battle against the bosses and the ruling class generally. In the US the period from 1933 to 1936 was marked by a titanic industrial and political awakening of the working class, most notably in new industries at the time of steel and automobiles, alongside traditional fighters such as the miners, etc.
At the same time, the seemingly moribund traditional trade unions were roused into a new life. Trade union leaders used the ‘New Deal’ with Roosevelt’s tacit support to engage in a colossal recruiting drive in which three million workers, mostly in the new industries, joined the unions. John L Lewis the leader of the United Mine Workers of America, produced millions of leaflets which were slightly ‘economical with the truth’ in proclaiming: “Your president wants you to join a trade union”. This helped a huge recruiting drive into the unions. Moreover, it was no accident that the Trotskyists in the US played a key role, particularly in the automobile industry and in the Teamsters union, encapsulated in the magnificent series of books beginning with ‘Teamster Rebellion’ by Farrell Dobbs. The American SWP was at this stage firmly under the political sway of Trotsky.
History is not likely to be repeated in exactly this form or even take the same course as it did in the 1930s with the formation of new unions. However, so low is the present official union membership in the US, that some new unions could be founded and grow. But the battle inside the already existing unions can also prepare a new militant fighting leadership which can lead to the filling out of the existing trade unions, renovated and democratised through new militant class fighters. This, in turn, can lead to new unions which will fill out under the hammer blows of events. Those who recently split from the CWI are unlikely to play a key role given their capitulation to identity politics, and, in reality, an abandonment of trade union work. They will prove incapable of finding a route to the best sections of the US working class who are set to be aroused from their winter sleep by the blows of US capitalism, now led by the widely perceived inept Trump.
Larry Elliott has largely written in relation to Britain but, his economic analysis resonates with the situation in other countries, particularly the US. He has stated that a crash is inevitable….. “It is as if the lights have been switched off. The global economy has been plunged into darkness as countries hunker down… the UK economy is on course to shrink by 15% in the second quarter of 2020. That is not a recession, it is a collapse surpassing anything in modern times, including the Great Depression.” The scale of the collapse and the dilemma confronting governments in the EU is indicated by Germany which has ripped up its fiscal rulebook, which has been in place for a decade. Fiscal soundness has not been previously seriously questioned, but now it has gone out the window even in Germany.
Disaster looms in the neo-colonial world
The situation is far more serious, more disastrous in the neocolonial world, where a series of national disasters loom. The South African government has already declared the country to be in a “national disaster” and in lockdown for 21 days with the army mobilised to contain whatever “trouble” looms from the African townships. The idea of social distancing and regular washing of the hands to check the virus is entirely necessary and laudable but completely utopian in large swathes of the neocolonial world on the basis of the colossal overcrowding of the population, particularly in the villages and townships. In Lagos, Nigeria, for instance, there are 21 million people already crowded into indescribable conditions. Regular washing of hands, advocated by all the health authorities to avoid the spread of the virus, is not possible in conditions where even to wash your hands once is a luxury.
On top of this is piled the risk of a new debt crisis in the world’s poorest countries with borrowing costs rising due to the risks of increasing debt and commodity exports hit by the tumbling prices of oil and other raw materials. Commodity prices have plunged: the price of copper is down by 21% since the start of 2020, oil 61% lower, and coffee has fallen by 15%. These poor countries are demanding urgent action to head off the economic impacts of the virus. An indication of some of the problems that will confront Africa, amongst the hardest hit by the pandemic, are the weak public health systems and an overreliance on commodity exports, tourism and remittances sent home from abroad. There have been calls for a debt moratorium for these countries. However, the debts of these poor countries, which have been severely impacted already by the pandemic, should be cancelled. The 54 countries in the world’s poorest continent, Africa, are the most severely affected.
We are just at the beginning of this process in the neocolonial world where the demands for the state takeover of failing industries can find mass support. But a new ‘Marshall Plan’ for Africa and the other poor countries are unlikely to be forthcoming. ‘Private investors’ – capitalist leeches in other words – removed $83 billion from emerging markets through the catastrophic drop in commodity prices. The demands should be raised now for the state takeover of industry and the decisive sections of the economy on a national scale. This, in turn, should lead to the call for a democratic socialist confederation of the whole of Africa.
It is noticeable that those societies which have evolved or are in the process of developing from largely state-owned industries have handled the pandemic much more effectively than ‘normal’ capitalist countries. For instance, the ex-Stalinist state of Vietnam has been more efficient than its neighbour Thailand. The latter acted in a high-handed inefficient manner in dealing with ‘foreigners’ in danger of being stranded, and often demanded exorbitant fees – a form of ransom – from innocents, often poorly financed young people and tourists. It is not an accident that China has also handled the fallout from the pandemic more efficiently – with less avoidable victims – than other capitalist states in Asia like the Modi regime in India. As we have reported on the CWI website, socialistworld.net, and in Socialism Today, the Modi regime recently instigated communal clashes and murders of entirely innocent Muslims and others after protests around the new citizenship law. Modi is now presiding over widespread closures of workplaces in a lockdown of almost the entire country. Severe food shortages and terrible suffering could result from this adding to the trials and tribulations of the long-suffering Indian masses and fuelling the massive resentment that exists already. The brutal treatment of migrant workers from the countryside, forcing millions out of the cities with no income or food, has provoked riots and brutal repression. This is the biggest movement of people since partition. The actions of the government in dealing with this crisis will lead to Modi undermining his support at a certain stage. A colossal revolt from below is brewing in India, as in the neocolonial world as a whole, in opposition to the inefficient and cruel rule of regimes that are dominated by the landlords and capitalists.
Disturbed periods in history
The foregoing analysis leads us to conclude that the world is entering one of the most disturbed periods in history – when the whole of the world can be ravaged to one extent or another by the pandemic – with colossal deleterious consequences. At the same time, this will underline the incapacity, inefficiency and downright reactionary character of capitalist private ownership of the means of production and control of the state. The idea of an untrammelled market as the best way to organise production and distribution has already suffered a huge ideological blow. In the next period, the working class and its organisations will take up the issue of the reorganisation of society along socialist lines with democratic control and management of every level of the economy.
At the same time, the independent movement of the working class and its embrace of a class struggle programme will be taken up by millions of workers in all sections of the world, both in the so-called advanced (industrialised) countries, as well, as in the terribly oppressed and exploited countries and continents in the neocolonial world. Until recently, reactionary despots like Bolsonaro in Brazil, Trump in the US and Modi in India seemed to be setting the tone. Bolsonaro echoed Trump in boasting that he “wouldn’t feel anything” if infected with the virus and “rubbished efforts to contain the illness with large-scale quarantines as his country’s two biggest cities went into shutdown in a desperate bid to save lives”. [Guardian]. He claimed in a five-minute address to the nation that it was more important to contain panic and hysteria, and called for an end to lockdowns imposed in some states. This sparked protests and opposition demonstrations with one declaring: “We don’t have a president – we have a clown who doesn’t know what he is doing”! Echoes of Trump!
This provoked even the gangs in the favelas to go onto WhatsApp and seek to take the situation into their own hands by urging residents in the densely populated slums to “stay home or else”. In other words, in their own way they were trying to protect the population from the virus, something that Bolsonaro has refused to do, describing the pandemic as mere “sniffles”. The Financial Times describes the incredible neglect by showing the independent intervention of the poor occupants of the favelas and even of the gangs to seek a modicum of safety. They report that in Sao Paulo “most people are self-employed and are becoming concerned about what tomorrow will look like without money or food”! Already, Bolsonaro’s stance is provoking big protests and will fuel a revolt against him and his government. Given Brazil’s history, which at the best of times is a pressure cooker ready to explode – mass uprisings can be expected here and in other parts of Latin America, as the example of Chile, that we have reported, shows.
These clowns and despots already stand politically exposed as being incapable of either understanding the pandemic or taking the necessary action to defend the population. Economically things may get worse before politically they get better. The net result will be mass movements worldwide seeking once more to rediscover the genuine ideas of socialism – organised on a democratic and working-class basis – in a movement to change the world!
