by Lenny Brody
Global capitalism has entered the most serious crisis in its history. Any crisis of capitalism means increased exploitation and oppression of the working class. Today, the global proletariat is facing one of the most serious wars against it in its history.
The U.S. state apparatus is the principal political leader of global capital. In the U.S., the working class is waging a class struggle without an organized general staff; that is, without a revolutionary communist party. Internationally, the Communist Party of China is in the challenging position of attempting to provide what international leadership it can under very difficult circumstances.
Given the current economic and political situation, revolutionaries need to develop a deep understanding of global economic conditions. A recognition of the seriousness of these developments can be seen in the new Council on Foreign Relations Task Force Report: U.S. Economic Security: Winning the Race for Tomorrow’s Technology.
Since WWII, Western bourgeois democracies have functioned under what they have called a “rules-based international order,” centered in a number of institutions largely under the control and serving the interests of the U.S. state apparatus and global capital. The collapse of the so-called “rules-based international order” is a result of serious economic developments since the heyday of the 1990s globalization. The Council on Foreign Relations (CFR) sees this collapse as a fundamental, critical question of national security. The report notes; “Increasingly, economics and national security have converged, if not collided.” In light of this collapse, the report asks how, and in what circumstances, the government should intervene in the market.
To better understand this crisis, it is helpful to summarize the circumstances that led us to this point. The past thirty years have been characterized by both rapid technological advances, as well as the collapse of the Soviet Union (1991) and other socialist countries in Eastern Europe (1989). By the end of the 1990s, we lived in a “unipolar” world dominated by the U.S. capitalist state apparatus. In 2001, China was brought into the World Trade Organization with the hope that it would become a fully capitalist “democracy.”
China’s economy rapidly developed and became a major component of the global economic system. However, since China’s 1949 Revolution, it has been ruled by the working class, with a “dictatorship of the proletariat.” Because of this, its economy operates relatively independently of the control of global capitalism. It should be noted that China’s decision to both maintain a dictatorship of the proletariat and enter the global economic system was a radically different tactic than the one taken by the Soviet Union in the post WWII period. At that time, the Soviet economy was not an integral part of the international economic structure and their economic systems were developing parallel to international capitalism. China decided to integrate to some degree into the global capitalist system in the 1990s and early 2000s.
The serious global financial crisis of 2008 was not simply one of the periodic capitalist crises. It was a crisis that revealed a fundamental structural crisis of production: the increasing use of labor replacing technology. Technological developments have been throwing growing numbers of workers, world-wide, including in the U.S., into the “informal” section of the economy. This has been driving down their standard of living and their ability to consume the goods being produced. It is estimated that about 60% of the global working class labors in the informal economy (where people work as day laborers, in the illegal economy, or the so called “gig-economy”).
It is of critical importance to grasp that every current cyclical crisis of capitalism is being impacted and transformed by the historical crisis of capitalism. Thus, each periodic crisis of capitalism can only develop into a partial recovery of the capitalist system. This is even more true in our time, as a capitalist structural crisis unfolds.
Today, with the Chinese economy being part of the global economy, the limitations of the capitalist global economy is becoming increasingly apparent. In a growing number of technological areas, China is surpassing the U.S. and other capitalist economies.
The CFR report states, “From the quantity and quality of artificial intelligence publications and patents to the production of drug inputs, China is well on its way to compete in, if not lead, the development of foundational technologies, including artificial intelligence, quantum (sensing, communication, and computation), and biotechnology. China has also discovered where it has leverage over the U.S. economy, including its near monopoly on critical minerals extraction and refining.”
Perhaps one of the most serious limitations of “globalization” was further exposed by the Covid pandemic. Important networks of global economic supply chains were revealed to run through the Chinese economy. China had become the leading trading partner of 120 of about 195 countries in the world.
The growth and development of the Chinese economy and the limitations of the U.S. dominated global economy have forced a serious re-evaluation of the structure of the current global economy. The CFR Task Force report clearly reveals how the global capitalist ruling class is understanding these developments. Changes in U.S. economic policy do not reflect the opinions of Democratic or Republican politicians but rather reflect changes in economic conditions.
The CFR report points out; “Government intervention in the economy in the name of national security is most clearly warranted in cases of market failure.” Further; “Today, the market failures that loom largest for national security are shortfalls of private capital in strategically important areas and over-concentration of critical supply chains in unfriendly countries.” These references to “market failures” are examples of the growth of Chinese economic dominance that are seen to threaten U.S. dominance.
This sense of crisis has led to calls for a new “industrial strategy or policy.” The Trump administration taking equity stakes in semiconductor and rare earth mineral firms, in the name of national security, is an example of these new policies. Both the Trump administration and the CFR report converge, calling for the U.S. government to intervene in certain aspects of the global economy. They both also call for the “re-industrialization” of the U.S..
These are ways that various elements within the ruling class are attempting to find solutions to the economic crisis. However, given the rapid technological developments (AI, quantum computing, biotechnology, etc), and especially in general labor replacing production technology, it is becoming clear that capitalism as an economic system cannot support a society where fewer and fewer people have jobs in the formal economy.
Historical materialism informs us that the economic foundation of society shapes the political superstructure of society. That is, politics are shaped by economic demands, not vice versa. With the rapid changes in how goods are produced and distributed due to labor replacing technology, changes in the form of organization of the state apparatus is necessitated.
The only “solution” for the capitalist ruling class is to institute an authoritarian political system, a form of fascism. Fascism today can not develop under the same economic and political conditions as fascism in the 1920s and 30s. In the past, there was room, globally, for the economic growth and development of capitalism. Fascist rule was, in a certain sense, a “choice” for the various ruling classes and could be used as a temporary form of rule. History shows that in places like Germany, Italy and Japan capitalism continued after the fall of fascism under the form of rule of bourgeois democracy.
Today, particularly in the U.S., the ruling class feels that fascist political rule is necessary to respond to the economic crisis and continue the rule of capitalism. This is why we see the rise of the Trump administration. There is certainly no possibility to control society with the rule of bourgeois democracy, or the “rules-based” international order. However, it is important to recognize that, while it may control the population for the short term, fascist political rule will not solve the fundamental economic crisis.
Thus, it is critical for revolutionaries in the U.S. to have a deep understanding of the global economic and political situation. These developments will inevitably impact the conditions of the class struggle. To remain isolated in one corner of the class struggle, with a limited understanding of global events, is to guarantee our defeat.
It is clear that global capital has entered into a historic crisis from which it can not recover. The feasibility of the plans of the CFR task force and also of the Trump grouping have no chance of success. Given the labor replacing technology it is impossible for these “solutions” to have a favorable impact on employment in the U.S.. The political and economic impact of this crisis is already leading to an upsurge by the masses of people in the U.S.. The U.S. ruling class is clearly moving to transform the form of government from bourgeois “democracy” to an authoritarian, fascistic form of government to control the growing mass upsurge of the working class.
Under these conditions, it is urgent that Marxist revolutionaries rapidly move to organize those in the mass movement who are asking deeper questions about the situation we are facing. Without developing a strategic, fighting communist party, fundamental success is not possible.
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Lenny Brody has been politically active since the early 1960s. During the mid-1960s he was a volunteer with the Southern Christian Leadership Conference, the civil rights organization led by Dr. Martin Luther King, Jr. in South Carolina. As part of his activities in protest of the Vietnam War he refused induction into the Army. He was a founding member of the Communist Labor Party and has studied economics and theories of political change while continuing his political activism. Currently he is one of the coordinators of the University of the Poor Think Tank and a member of the University of the Poor Journal.
