Economy

Earlier this month, the IMF and the World Bank held their second series of meetings since the outbreak of the pandemic. Despite the unspeakable horrors that millions are facing, here the mood was one of celebration and optimism. The world economy is moving again, and even faster than they had hoped for!

At a White House dinner on 24 February, Joe Biden held up a microchip and recalled a popular saying: “Remember that old proverb: for want of a nail, the shoe was lost; for want of a shoe the horse was lost.” And – as the proverb goes – without the horse, the messenger was lost; without his message, the battle was lost; and so on until, eventually, the empire itself was lost. For the empire which is the United States, that nail – according to Biden – is the microchip.

At the time of writing this article, the Ever Given container ship, owned by Shoei Kisen Kaisha and operated by Evergreen Marine, has finally been freed after running aground on the banks of the Suez Canal. The blockage had a major impact on the international economy: the price of crude oil rose, and there was a significant impact on the cost of transporting goods and their final prices. This event could have longer-term consequences, with a chain of effect that is difficult to calculate.

In the midst of the COVID-19 catastrophe, some parts of the economy are booming. Speculative investments are continuing in a frenzied fashion. The latest celebrity-driven fads, NFTs and SPACs, are among the insane expressions of this whirlpool of speculation.

The past few years of political turbulence have troubled the ruling class. They are facing unprecedented waves of protests and instability. They are now increasingly desperately trying to stabilise the situation using state expenditure and other concessions. This was seen at the World Economic Forum last month.

Argentina’s approval of a one-off wealth tax has been presented as a model by some on the left in Britain, as well as in other Latin American countries – where the idea is very popular. What is its real content, however, and is it a useful proposal to deal with the crisis of capitalism and the impact of the COVID-19 pandemic?

Apologists for capitalism argue that it is the best, most-efficient system that could ever possibly exist. But the current period of crisis and chaos prove otherwise. Today, the COVID-19 pandemic has triggered an economic collapse that threatens to throw society back to the 1930s, sending the world into a full-blown depression. Clearly, something is rotten at the heart of the system. The advocates of Keynesian ideas - or modern varieties like Modern Monetary Theory - cannot provide a real solution to this crisis. In his talk from this year's International Marxist University, Adam Booth, a leading activist of Socialist Appeal, explains why capitalism has failed, and what the way forward

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The capitalists are eagre for the COVID-19 crisis to come to an end, and many anticipate a rapid economic bounceback. But the new normal will be one of crisis, chaos and class struggle.

The world’s poorest countries are going through a vicious cycle of spiralling debt. The coronavirus epidemic has added a further heavy burden to their state coffers. These mainly raw material producing countries were already struggling to deal with the collapse in raw material prices, and this latest crisis makes the situation completely untenable, which has major implications for the advanced capitalist countries as well.

A huge cache of documents has revealed the criminality and corruption at the heart of capitalism’s biggest financial institutions. We cannot trust the ‘regulators’. To root out these evils, we need nationalisation and workers’ control.

While the real economy has fallen off a cliff in recent months, stock prices have reached record highs. Capitalism is nothing but a casino. In place of this speculation and gambling, we need a rational socialist economic plan.

With mass unemployment on the cards, many are comparing the current crisis to the Great Depression of the 1930s. In both cases, however, these crises were not 'accidental', but a product of capitalism's insoluble contradictions.

On 8 July, federal finance minister Bill Morneau announced that the deficit had ballooned to an astronomical $343 billion. The total government debt load is predicted to surpass $1 trillion for the first time in Canadian history, reaching $1.2 trillion sometime next year. This unprecedented level of government spending begs the question: When will the shit hit the fan?

The capitalists and the stock markets were breathing a sigh of relief as new economic figures showed a slowing of the rate of the decline in the world economy. However, none of the problems have been resolved and the inevitable uptick after the easing of lockdown will not alter the prospect of a deep economic, social and political crisis.

This extensive work (originally published in March by Lucha de Clases in Spanish) exposes who controls the world’s economic and health resources, how we can break away from the exploitative and irrational capitalist system that is strangling public health, and how we can ensure healthcare for the working class of the entire world.

As society begins to reopen, the ruling class is hoping for a return to ‘normality’. But the future will look nothing like the past. A deep depression looms, threatening to throw us back to the 1930s. We must fight for revolution.

“Those who do not learn from history are doomed to repeat it.” Finding ourselves at the beginning of a new depression, interest in the last one has increased considerably. In this in-depth study of the Great Depression, Alex Grant (editor of marxist.ca) details the crash, the response of the ruling class, and how the workers fought back.

According to federal officials, the Trudeau government has finished with the emergency response phase to COVID-19 and now is moving onto the “recovery” phase. But the prospects for a healthy recovery are not looking good. The fact is that the coronavirus pandemic has only served as the knockout punch to a weak and feeble system.