WHY CORONAVIRUS COULD SPARK A CAPITALIST SUPERNOVA

By John Smith
APRIL 5, 2020
Republished from Open Democracy. This article is part of Open Democracy’s 'Decolonising the economy' series.

“Global yields lowest in 500 years of recorded history. $10 trillion of negative rate bonds. This is a supernova that will explode one day,” tweeted Bill Gross, the ‘bond king’, in 2016.

This day has come closer. Capitalism now faces the deepest crisis in its several centuries of existence. A global slump has begun that is already devastating the lives of hundreds of millions of working people on all continents. The consequences for workers and poor people in Asia, Africa, and Latin America will be even more extreme than for those living in Europe and North America, both with respect to lives lost to coronavirus and to the existential threats to the billions of people already living in extreme poverty. Capitalism, an economic system based on selfishness, greed and dog-eat-dog competition, will more clearly than ever reveal itself to be incompatible with civilisation.

Why is supernova – the explosion and death of a star – an apt metaphor for what could now be about to unfold? Why could the coronavirus, an organism 1000th the diameter of a human hair, be the catalyst for such a cataclysm? And what can workers, youth and the dispossessed of the world do to defend ourselves and to ‘bring to birth a new world from the ashes of the old’, in the words of the US labour hymn, Solidarity Forever?

To find answers to these questions, we need to understand why the ‘global financial crisis’ that began in 2007 was much more than a financial crisis, and why the extreme measures taken by G7 governments and central banks to restore a modicum of stability – in particular the ‘zero interest rate policy’, described by a Goldman Sachs banker as “crack cocaine for the financial markets” – have created the conditions for today’s crisis.


GLOBAL CAPITALISM’S ‘UNDERLYING HEALTH ISSUES’

The first stage of a supernova is implosion, analogous to the long-term decline in interest rates that began well before the onset of systemic crisis in 2007, which has accelerated since then, and which fell off a cliff just as coronavirus began its rampage in early January 2020. Falling interest rates are fundamentally the result of two factors: falling rates of profit, and the hypertrophy of capital, i.e. its tendency grow faster than the capacity of workers and farmers to supply it with the fresh blood it needs to live. As Marx said, in Capital vol. 1, “capital’s sole driving force [is] the drive to valorise itself, to create surplus-value… capital is dead labour which, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks.”

These two factors combine to form a doom loop of awesome destructive power. Let us examine its most important linkages.

Many things both mask and counteract the falling rate of profit, turning this into a tendency that only reveals itself in times of crisis, of which the most important has been the shift of production from Europe, North America and Japan to take advantage of the much higher rates of exploitation available in low-wage countries. The falling rate of profit manifests itself in a growing reluctance of capitalists to invest in production; more and more of what they do invest in is branding, intellectual property and other parasitic and non-productive activities. This long-running capitalist investment strike is amplified by the global shift of production – boosting profits by slashing wages rather than by building new factories and deploying new technologies. This enables huge mark-ups, turbo-charging the accumulation of vast wealth for which capitalists have no productive use – hence the hypertrophy of capital.

This, in turn, results in declining interest rates – as capitalists compete with each other to purchase financial assets, they bid up their price, and the revenue streams they generate fall in proportion – hence falling interest rates. Falling interest rates and rising asset values have created what is, for capitalist investors, the ultimate virtuous circle – they can borrow vast sums to invest in financial assets of all kinds, further inflating their ‘value’.

Falling interest rates therefore have two fundamental consequences: the inflation of asset bubbles and the piling up of debt mountains. In fact, these are two sides of the same coin: for every debtor there is a creditor; every debt is someone else’s asset. Asset bubbles could deflate (if productivity increases), or else they will burst; economic growth could, over time, erode debt mountains, or else they will come crashing down.

Since 2008, productivity has stagnated across the world and GDP growth has been lower than in any decade since World War II, resulting in what Nouriel Roubini has called “the mother of all asset bubbles,” while aggregate debt (the total debt of governments, corporations and households), already mountainous before the 2008 financial crash, has since then more than doubled in size. The growth of debt has been particularly pronounced in the countries of the global South. Total debt for the 30 largest of them reached $72.5tn in 2019 – a 168% rise over the past 10 years, according to Bank of International Settlements data. China accounts for $43tn of this, up from $10tn a decade ago. In sum, well before coronavirus, global capitalism already had ‘underlying health issues’, it was already in intensive care.

Global capitalism – which is more imperialist than ever, since it is both more parasitic and more reliant than ever before on the proceeds of super-exploitation in low-wage countries – is therefore inexorably heading to supernova, towards the bursting of assets bubbles and the crashing of debt mountains. Everything that imperialist central banks have done since 2008 has been designed to postpone the inevitable day of reckoning. But now that day has come.

10-year US Treasury bonds are considered the safest of havens and the ultimate benchmark against which all other debt is priced. In times of great uncertainty, investors invariably stampede out of stock markets and into the safest bond markets, so as share prices fall, bond prices – otherwise known as ‘fixed income securities’ – rise. As they do, the fixed income they yield translates into a falling rate of interest. But not on March 9, when, in the midst of plummeting stock markets, 10-year US Treasury bond interest rates spiked upwards. According to one bond trader, “statistically speaking, [this] should only happen every few millennia.” Even in the darkest moment of the global financial crisis, when Lehman Brothers (a big merchant bank) went bankrupt in September 2008, this did not happen.

The immediate cause of this minor heart attack was the scale of asset-destruction in other share and bond markets, causing investors to scramble to turn their speculative investments into cash. To satisfy their demands, fund managers were obliged to sell their most easily-exchangeable assets, thereby negating their safe-haven status, and this jolted governments and central banks to take extreme action and fire their ‘big bazookas’, namely the multi-trillion dollar rescue packages – including a pledge to print money without limit to ensure the supply of cash to the markets. But this event also provided a premonition for what is down the road. In the end, dollar bills, like bond and share certificates, are just pieces of paper. As trillions more of them flood into the system, events in March 2020 bring closer the day when investors will lose faith in cash itself – and in the power of the economy and state standing behind it. Then the supernova moment will have arrived.


THE LEFT’S IMPERIALISM-DENIAL, AND ITS BELIEF IN THE ‘MAGIC MONEY TREE’

The gamut of the left in imperialist countries – the Jeremy Corbyn-led wing of the Labour Party in the UK; the motley crew of left-Keynesians such as Ann Pettifor, Paul Mason, Yanis Varoufakis; supporters of Bernie Sanders in USA – are united on two things: they all acknowledge, to one degree or another, that imperialist plunder of colonies and neocolonies happened in the past but do not acknowledge that imperialism continues in any meaningful way to define relations between rich and poor countries.

And they believe in one or other version of the ‘magic money tree’, in other words, they see the decline of interest rates into negative territory not as a flashing red light showing the extremity of the crisis, i.e. not as the implosion phase of a supernova, but as a green light to borrow money to finance increased state investment, social spending, a Green New Deal, and even a bit more foreign aid. In fact, there is no magic money tree. Capitalism cannot escape from this crisis, no matter how many trillions of dollars governments borrow or central banks print. The neoliberals rejected magical thinking, now they embrace it – this shows the extent of their panic, but it does not make magical thinking any less fantastical. The trillions they spent after 2007-8 bought another decade of zombie-like life for their vile system. This time they will be lucky to get 10 months, or even 10 weeks, before the explosion phase of the supernova begins.


CORONAVIRUS – CATALYST FOR CATACLYSM

The coronavirus pandemic occurred at the worst possible time: growth in the eurozone had shrunk to zero; much of Latin America and sub-Saharan Africa were already in recession; the sugar-high from Trump’s huge tax-giveaways to US corporations was fading; the US-China trade war was causing serious disruption to supply chains and was threatening to entangle the EU; and tens of millions of people joined mass protests in dozens of countries across the world.

Interest rates are now deep in negative territory – but not if you are Italy, facing an enormous increase in its debt/GDP ratio, not if you are an indebted corporation trying to refinance your debts, not if you are an ‘emerging market’. Since March 9, corporate interest rates have gone through the roof; in fact few corporations can borrow money at any price. Investors are refusing to lend to them. Corporations are now facing a credit crunch – in the midst of global negative interest rates! That’s why the ECB decided to borrow €750 billion from these same investors, and use it to buy the corporate bonds which these same investors now refuse to purchase, and why the USA’s Federal Reserve is doing the same on an even bigger scale. Italy’s (and the EU’s) fate now depends on the willingness of the Bundesbank to replace its private creditors. Their refusal to do this would be the final stage of the EU’s death agony.

During the middle two weeks of March, imperialist governments announced plans to spend $4.5 trillion bailing out their own bankrupt economies. An emergency online summit of the G20 (the G7 imperialist nations plus a dozen or so ‘emerging’ nations, including Russia, India, China, Brazil, and Indonesia) on 26 March, declared “we are injecting over $5 trillion into the global economy.” These are weasel words; by ‘global’ they actually mean ‘domestic’! The response of the ‘left’ in the imperialist countries is to clap its hands and say, we were right all along! There is a magic money tree after all! – apparently not realising that this is exactly what happened post-2008: the socialisation of private debt. Or that, unlike post-2008, this time it will not work.

Yet, as imperialist governments belatedly mobilise – and monopolise – medical resources to confront the coronavirus crisis in their own countries, they’ve abandoned poor countries to their fate. The left in the imperialist countries (or we could just say ‘imperialist left’, for short) has also ignored the fact that there is nothing in these emergency cash injections for the poor of the global South. If you are an ‘emerging market’, well, fuck off and join the queue for an IMF bail-out! As of March 24, 80 countries were standing in this queue, waiting for some of its $1tr lending capacity. $1 trillion sounds like a lot of money, and indeed it is, but, as Martin Wolf, chief economic correspondent for the Financial Times, points out, “the aggregate external financing gaps of emerging and developing countries are likely to be far beyond the IMF’s lending capacity.”

Furthermore, as Wolf suggests, the purpose of IMF loans is to help with “external financing gaps” – in other words, to bail out imperialist creditors, not the peoples of debtor nations; and they invariably come with harsh and humiliating conditions that add to the crushing burden already pressing down on the peoples of those countries. In this sense, they are just like the vast government bailouts of private capital in the rich countries – but without anything added on to finance welfare payments or partially replace wages. The aim of the latter is to purchase the docility of the working class in the imperialist nations, but they have no intention of doing this in Africa, Asia and Latin America.

On March 24, the United Nations issued an appeal for $2bn to fight the coronavirus pandemic in Africa, Asia and Latin America. This money, which the U.N. hopes to raise over the next nine months, is 1/80 of the annual budget of the U.K.’s NHS, and less than 1/2000 of the $4.5tr they plan to spend keeping their own capitalist economies alive. It is also less than 1/40 of the money which imperialist investors have taken out of ‘emerging markets’ during the first three weeks of March, “the largest capital outflow ever recorded,” according to IMF managing director Kristalina Georgieva.

The maximum extent of relief for the collateral effects of the coronavirus epidemic on the peoples of poor countries in Africa, Asia and Latin America was indicated by World Bank president, David Malpass, who said after the G20 summit ended that his board is putting together a rescue package valued at “up to $160 billion” spread out over the next 15 months – a minuscule fraction of the economic losses that the coming global slump will impose on the peoples of the absurdly-named ‘emerging markets’.


“WE HAVE A REVOLUTIONARY DUTY TO FULFILL" – LEONARDO FERNANDEZ, CUBAN DOCTOR IN ITALY

So, what is to be done? Instead of applauding the bailout of big corporations, we should expropriate them. Instead of endorsing a temporary moratorium on evictions and the accumulation of rent arrears, we should confiscate real estate so as to protect workers and small businesses. These, and many other struggles to assert our right to life over the rights of capitalists to their property, are for the near future.

Right now the priority is to do whatever is necessary to save life and defeat the coronavirus. This means extending solidarity to those who are most vulnerable to the pandemic – homeless people, prisoners, asylum seekers enduring ‘hostile environments’ – and to the dispossessed and victims of imperialism in the slums, shantytowns and refugee camps of the global South. Raghuram Rajan, former governor of the Bank of India, points out that “pending a cure or a reliable vaccine, the world needs to fight the virus into submission everywhere in order to relax measures anywhere.” The Economist concurs: “If covid-19 is left to ravage the emerging world, it will soon spread back to the rich one.”

The coronavirus pandemic is just the latest proof that we need not so much an NHS, but a GHS – a Global Health Service. The only country that is acting on this imperative is revolutionary Cuba. They already have more than 28,000 doctors providing free health care in 61 poor countries – more than the G7 nations combined – and 52 in Italy, 120 more to Jamaica, and are helping scores of other countries to prepare for the pandemic. Even the far-right Bolsonaro government in Brazil, which last year expelled 10000 Cuban doctors, branding them terrorists, is now begging them to return.

To defeat coronavirus we must emulate Cuba’s medical internationalism. If we are to defeat this pandemic we must join with its revolutionary doctors and revolutionary people, and we must prepare do what Cuba did to make this internationalism possible – in other words, we must replace the dictatorship of capital with the power of working people. The coronavirus supernova makes socialist revolution – in imperialist countries and across the world – into a necessity, an urgent practical task, a life and death question if human civilisation is to survive and if the capitalist destruction of nature, of which the coronavirus epidemic is merely the latest symptom, is to be ended.



Thanks to Andy Higginbottom, Shih-yu Chou, and Walter Daum for comments on earlier drafts of this article.

DONALD TRUMP AND ERIK PRINCE'S PRIVATIZATION OF WAR


(Pictured: Corporate mercenaries in Afghanistan)

By James Richard Marra

During my career as a business analyst, I learned much about why and how some businesses succeed while others fail. Failure may result from higher wage levels, employee health insurance costs, or market conditions. Nevertheless, it generally occurs due to poor management: owner incompetence, arrogance, and greed, insensitivity to fundamental business factors and best practices, or a flawed understanding of their markets and competitors.

I bring this up because the neofascist governance in Washington and its corporate partners are wooing Americans toward another imperial catastrophe in the Middle East, this time involving Iran. For these capitalists, much is never enough. So as expected, the military-technology-surveillance complex (MTSC) wishes to expand its profitable productive capacity into new or under-exploited war-commodity markets. The success of this expansion depends upon careful attention to geographic, material, and operational considerations. Best business practices demand that the MTSC develops a sound plan by first consulting experts in these areas. These factors might include those identified by the famous military theorist Carl von Clausewitz. For von Clausewitz, the three pillars of warfare are strategy, operations, and tactics. Within the MTSC’s production and marketing plans, these required military functions are transformed into profitable exchange values - money. If this program is managed well, the sky is the limit. If not, failure will likely come.

With these thoughts in mind, we might consider the case of Erik Prince, the ex-Navy Seal and founder/CEO of the failed and criminally mercenary service provider Blackwater. In 2018, Prince, the brother of Education Secretary, and public-education privatizer, Betsy DeVos, approached the Trump Administration with a proposal to privatize the Afghan War. Prince’s dog-and-pony show claimed that the war could be waged more economically and efficiently, while deploying fewer troops in smaller specialized units.

Neofascists, like Steve Bannon, invited further discussion and exploration. This is not surprising because fascism of any sort, including today's neofascism, is an artful alliance of an anti-conventional and zealous "Leader," a hyper-nationalistic culture, and an exceptionally exploitative form of capitalism. Trump's fascism gets its "neo" in part from the fact that today's capitalism is largely unfettered, "neoliberal," finance-and-service-dominated, and monopolized. This current form differs from the manufacturing capitalism that dominated the world economy from the 1920s to the 1980s. Furthermore, history reminds us that, while Hitler disliked “industrialists,” he admired Henry Ford to the extent that, in 1938, he bestowed upon him the Grand Cross of the German Eagle.

Now, capitalism opposes worker control over their labor power. The military command structure epitomizes this, as unions are banned and the demands made upon military labor (soldiers) go unquestioned. Likewise, fascist governance requires that workers absolutely obey the will of the political Leader, as it is transformed into the productive operations in which workers participate.

Both Prince and Bannon recognized a profitable business opportunity enabled by the structural efficiencies fascism offers within a privatized war market. In this model, military needs are continually identified and marketed by the Leader and the MTSC through their political minions and the capitalist media. Once workers are indoctrinated to the benefits of war, the MTSC transforms those needs into corresponding commodities. Vast amounts of capital are provided by taxes largely levied upon the working class. Politically trumped up fears of the working class not only provide a market incentive, but also mobilize workers’ labor power, both on and off the battlefield.

Trump’s military and other members of the MTSC balked at Prince’s scheme. Generals Mattis, Kelly, and McMaster ensured that Prince’s folly was a non-starter. Given this, a question arises: How could a neofascist mercenary's neofascist proposal to a neofascist Leader fail? Prince is neither an idiot nor a novice. His operational capabilities have been successfully field-tested, are marshaled by a highly skilled cadre of special-forces experts, and bolstered by significant international technical and political support.

It occurs to me that Prince’s business failure significantly resides in his misunderstanding of the contemporary war market and its players. He doesn’t understand his competitors’ collective business model, its functional role within the neofascist governance, or its monopolistic structure. Prince’s arrogance leads him to believe he can slither his way directly to the top of the neofascist food chain, biting off a prime piece of the war market without complaint from the big players. That might work if the market were immature, and competition largely relevant to profitability. But today’s market is both mature and well organized. Leading participants synergistically avoid price wars, fight unions and organizing efforts, fund think tanks and lobbyists, contribute to the campaign coffers of servile politicians, and meet together at national and global conferences to determine market rules.

Dominant corporations viscously defend themselves from the competitive risks presented by new and less mature companies. Thus, corporations join in a “co-respective” market behavior that largely guarantees their continuing control and profitability.

Alex Hollings asks:


So why didn’t Trump...a business man that values bottom-line savings, sign off on it?...Steve Bannon, Trump’s recently fired chief strategist, was said to support Prince’s plan, but the Generals Mattis, Kelly, and McMaster have all dismissed it. For those in Bannon’s corner, they argue it’s because he’s the outsider, free from the political pressures of the military industrial complex.

A congressional aide attending the meeting reported, “The adults hate it.”

There is another potential problem, although one that might offer a silver lining for Prince: the laws that govern American wars. These pesky laws make it more difficult for any privatized war business to control production, supply, and operational management. For a privatized war commodity to be successful, businesses require that civilian leadership regularly deliver new war-needs, which would motivate market demand. While both Democrats and Republicans are quick to fund occasional “short” wars, that isn’t enough. What is needed is a government that will go to war as unhesitatingly and continually, as Hitler did devouring the nations of Europe. A fascist leadership is ideal because it considers war to be among the noblest of human endeavors, and resists conventional or legal restraints imposed by “decadent” liberal democracies.

However, today’s renewed calls for limits upon the now imperial presidency from the American left illustrate the business risk represented by not appreciating the vicissitudes involved in political strategy. Prince’s short-term thinking led him to largely ignore the fact that presidents come and go. Public opinion changes with the lifting of a TV remote, and politicians the chase political winds like a bloodhound after a jackrabbit through a lush Kentucky meadow. Prince failed to appreciate that his business success hinged on controlling the dance card at a capitalist senior prom to which he is not invited.

My references to “neofascism” may annoy some folks: "You’re calling Trump a neofascist just because you don’t like his politics!” Although I find Trump's politics uniquely vile, that fact doesn’t inform my understanding of a “Futurist”-inspired fascism. To understand Futurism, let's allow it to speak for itself.

Futurists wish to


...sing the love of danger, the habit of energy and boldness.

...extol aggressive movement, feverish insomnia, the double-quick step, the somersault, the box on the ear, the fisticuff.

...to destroy the museum, the libraries, to fight against moralism, feminism and all opportunistic and utilitarian malignancy.

...glorify war - the only health-give [sic] of the world - militarism, patriotism, the destructive arm of the Anarchist, the beautiful ideas that kill, and contempt for woman.

These pleasantries might well have come from Donald Trump or one of his torch-bearing neo-Nazi devotees. But, they are offered by the founder of the Futurist movement, Filippo Tommaso Marinetti, in Futurist Aristocracy (1923), edited by the Italian Futurist Nanni Leone Castelli. As such, they illuminate a frightening Futurist thread between contemporary Trumpian neofascism and its historical roots. Benito Mussolini was a Futurist of sorts, and was seen by many contemporaries, Italian or otherwise, as the epitome of the aggressive and spontaneous Futurist hero. Here are a few priceless insights from Benito Mussolini’s (with Giovanni Gentile) 1932 article “Doctrine of Fascism.”


[Fascism]...repudiates the doctrine of Pacifism....[W]ar alone brings up to their highest tension all human energies and puts the stamp of nobility upon the peoples who have the courage to meet it.

For Fascism the tendency to Empire, that is to say, to the expansion of nations, is a manifestation of vitality...

Fascism attacks the whole complex of democratic ideologies and rejects them both in their theoretical premises and in their applications or practical manifestations. [F]ascism denies that the majority, through the mere fact of being a majority, van [sic] rule human societies; it denies that this majority can govern by means of a periodical consultation; it affirms the irremediable, fruitful and beneficent inequality of men, who cannot be leveled by such a mechanical and extrinsic fact as universal suffrage.

Against individualism, the Fascist conception is for the State; and it is for the individual in so far as he coincides with the State, which is the conscience and universal will of man in his historical existence.

Fascism, in short, is not only the giver of laws and the founder of institutions, but the educator and promoter of spiritual life. It wants to remake, not the forms of human life, but its content, man, character, faith. And to this end it requires discipline and authority that can enter into the spirits of men and there govern unopposed.

These happy thoughts tighten the historical thread that connects Mussolini’s historical fascism to Trump’s regime, as transmitted through pseudo-intellectuals like Steve Bannon and Sebastian Gorka. This fascist mentality now commands the most powerful military force in human history. Trump’s behavior in both deed and word is a litany of fascist, and therewith Futurist, virtues.

Possessing the legal and political prerequisites for endless warfare, war enterprises need capital to fuel ongoing accumulation. War profiteers understand that citizens purchase war commodities in the sense that they accede to the Constitutional requirement that they pay war costs through taxation. In the current war market, temporary wars no longer provide the required market potential or capital. Fighting temporary wars no longer makes market sense. Instead, the working class must purchase a product that is always urgently needed, requiring continuing maintenance, like the family car. To ensure the needed profitability, war is sold as an indispensable civic need, based upon a continually present danger. That danger comes conveniently from “terrorists,” a term whose meaning is so muddled that it can apply to anyone, anywhere, anytime, anyhow.

With the proper social and political indoctrination, and product marketing, citizens happily surrender their Constitutional right to decide against whom, where, when, and how they sacrifice themselves to the god of imperial war. They are invited by a monopoly of war service providers to choose between column A or column A. Americans now enjoy a neofascist Leader in the White House, and a semi-fascist congress willing to pass mushrooming military budgets. If there were a Constitutional challenge to this state of affairs, the matter would be decided by a Supreme Court infested with neoliberal sycophants. Thus, endless war, as always under capitalism, becomes a good business investment, and therefore good governance.

Under Trump's neofascism, the Leader commands the “supply side” of the war market. Taxes on war businesses are deeply cut, while those enterprises become decreasingly deregulated and increasingly empowered. Under contemporary capitalism, the distinction between the sales effort, which invents new needs, and commodity production is largely dissolved. With the rise of a privatized war market, the traditional relationship between democratic governance and the “invisible” divine hand that supposedly guides markets is, to echo Mussolini, "repudiated." The MTSC is now fully absorbed within the structural operations of the governance, and vice versa. The business role of the Leader is to manage a permanent war-marketing project that inspires the continuing development of new war commodities. Thus, the US Defense Department is “deconstructed” (to use one of Bannon’s favorite words), only to emerge refreshed as the Fannie Mae of American global capitalist dominance.

In sum, Prince’s business proposal was ill conceived, misinformed, and poorly timed. It suffered from management problems that most failed businesses experience. While Prince, like Trump, may have obtained some measure of business success by bullying the defenseless and lying about much, both have left an ultimate legacy of business failure and bankruptcy. Unfortunately, Trump was provided a place at the head of the capitalist table by a rapacious Republican Party and its white nationalist supporters. It will remain to be seen if Prince learns some lessons and abandons his unprofitable arrogance in favor of sound business judgment. For the sake of the American working class, I hope that won’t happen.

MONEY HAS ALWAYS BEEN THERE: CORONAVIRUS RESPONSE REVEALS CAPITAL’S LIES
By Olivia Wood
APRIL 5, 2020
Republished from Left Voice.


In the past weeks, companies and governments alike have begrudgingly been forced to provide minimal relief to workers suffering under the coronavirus pandemic. Inboxes are filled with emails from dozens of corporations about the steps they are taking to “protect” their employees and the public; these emails are nothing but damage control in the face of public demands.

Corporations and governments of all sizes are realizing that under such extreme conditions, they cannot hide the disastrous consequences of their actions like they once could. The need to “flatten the curve” is of course vital to protecting everyone’s health, but the capitalists are only struggling to flatten the curve of suffering under their own hegemony in order to keep people from connecting the dots. The old arguments — blaming the working class for their own financial irresponsibility or lack of work ethic — don’t work as well when entire sectors are getting shut down.

Already, we are seeing rapid changes in political consciousness across sectors. Many people now support measures — like free healthcare, guaranteed paid leave, and universal basic income — that they considered “too radical” only a few weeks ago. They are realizing that all people deserve more. And now they are demanding it.

Just in the last few weeks, airlines have been repeatedly revising their refund policies. Employers have been allowing more and more people to work from home. Health care providers are beginning to offer telehealth, and insurance companies are starting to provide coverage for telehealth where they didn’t before. These changes didn’t come from the goodness of their hearts. They came in response to a rapid loss in profits, fear of public backlash, and mass public outcry, both through piles of individual complaints and mass organized actions.

Many workplace protections that we are accustomed to today — such as the 8-hour workday, minimum wage laws, and unemployment and disability benefits — as inadequate as they are, were won in the 1930s when mass movements and organized labor put pressure on the capitalist class. By offering small, affordable concessions now, subsidized by government bailouts, companies hope to appease the newly agitated workforce and foreclose the possibility of even stronger organized revolt.

These concessions are not enough to prevent the serious physical, emotional, and financial harms that people around the country (and the world) are facing, but they do reveal just how many policies that were previously called “not feasible” or “too expensive” could have been rapidly implemented in our workplaces and in our lives all along.

This partial list of concessions demonstrates that while there are no lasting solutions under capitalism, working people can still win valuable gains that improve their lives and strengthen their ability to fight for even more. 

Many of these items are courtesy of @frnsys‘s compendium of concessions that they shared on Twitter.

Workplace Benefits


Some companies, such as REI, are continuing to pay their workers while stores are closed. At the same time, Congress has refused to provide paid sick leave for most employees, and other companies like Ann Taylor and American Eagle have failed to provide the paid leave they promised.


Many schools and workplaces are now allowing students/workers to connect from home, even in cases where teleworking accommodations were previously denied to disabled students and workers because these accommodations were not considered “reasonable” under the ADA.

Economic Interventions


Interest and payments on federally-subsidized student loans have been suspended.


Some U.S. citizens — excluding gig workers, many college students, sex workers, and others– will receive a one-time check of $1,200, adjusted based on number of children


The U.S. federal government is now subsidizing state-run unemployment insurance by $600 per week per person.

Shelter and Public Health Protections


California is commandeering hotels to house the homeless and create extra space for COVID patients, as well as sending 450 trailers around the state to provide additional shelter. Notably, this is not the case in places like Las Vegas, where homeless people are in a “socially distanced” parking lot.


Several municipalities have suspended evictions.


Many health insurance companies are now providing coverage for digital medical care (telehealth) and teletherapy, regardless of the person’s previous coverage plan

Law and Order


A county jail in Ohio released hundreds of inmates, although the terms of their release vary


The Portland police department is no longer responding to calls unless lives are in danger.


Bexar County, Texas is officially suspending arrests for all minor offenses, and many other locales are informally changing their responses


TSA has created an exception to rules regarding the amount of liquids that can be taken in a carryon bag to allow for large bottles of hand sanitizer. (Of course, this was already an arbitrary rule)

Services and Utilities


Comcast and T-Mobile are lifting all internet data caps for 60 days


Several municipalities have suspended utility shut-offs, and Detroit turned the water back on for families who had previously had their water service cut off.


Cities like New York and San Francisco are implementing government-sponsored childcare


Some internet service providers are providing free internet service for children who are now attending school from home. 

These concessions are not enough — not even close. We need to have universal paid leave, a quarantine wage, a layoff freeze, and the cancellation of rent and debt. These concessions are nothing but crumbs being thrown by the bourgeoisie in the hopes that it will be enough to quell our rage. However, these concessions do reveal that all of these reforms that governments and business leaders have for so long insisted are impossible to implement are, in fact, things that they always had the power to do. The money has always been there.

More than 10 million people have filed new claims for unemployment benefits in the last two weeks alone. The crisis is only going to get worse, and we need massive changes now. The way that the necessary concessions will be won is not by sitting idly by and hoping that the capitalists will take mercy on us. As the price gouging around food and medical equipment, landlords’ insistence on continuing to collect rent, and the many employers forcing workers to labor in unsafe conditions demonstrate, capitalist pity is hard to come by in the face of profits. We need to have widespread collective action to win the things we need to survive the coronavirus crisis. We should look to the powerful examples of workers at Amazon, Whole Foods, and General Electric who, this week, walked off the job, went on strike, or staged protests in their workplace to gain safer working conditions or, in the case of GE, switch over production from airplane parts to the much-needed ventilators.

It is important, as the crisis continues and worsens, to draw certain conclusions about what is happening and why. The concessions listed above are protections that could have always been in place, the bailout bill shows that there is always money, and the increased safety measures show that businesses always had the ability to improve conditions. These things didn’t happen before because they didn’t want to do them. They are giving us crumbs now because they are afraid; they are afraid of us. They know that we have the power to shut down production, to attack capital, and to take power for ourselves. They are hoping that if they give us some crumbs now, then we will forget and forgive them. But we won’t, and we can’t. These concessions should only add to our anger, because now we know, without a doubt, that they could have done this the whole time and chose not to. The money has always been there.

CAPITALISM NEEDS ANOTHER BAILOUT. IT'S TIME TO LET IT SINK.

By J. E. Karla
APRIL 16, 2020

HAMPTON THINK

There’s an old saying that leftists have predicted seven of the last three economic downturns. We know that capitalism is doomed to crisis, but we are often disconnected from how that crisis actually comes to pass. Now that we face a looming depression that’s surprised nearly everyone, it’s a great time to try thinking about production a little like a businessperson. It actually yields some pretty communist results.

The trick to thinking this way is pretty simple: businesses exist to make money, and the finer points of Marxist political economy notwithstanding, they make money by bringing in more revenues than expenses. These expenses can be broken down into the costs of goods and services, costs of revenue, operating costs, taxes and interest.

The costs of goods and services were the very things Marx focused on in his critiques of political economy – the costs of raw materials supplied by nature and the human labor-power used to transform them. This is the source of all value, and even capitalists understand that the surplus here pays for everything else. That’s why “gross profit,” total sales minus these costs, is their primary measure of profit. Even service businesses – airline, hotels, lawyers, etc. – have to make their money from gross profits generated by a commodity manufacturer somewhere else in the system.

With production gutted right now, this surplus isn’t getting generated, and that’s why the entire system is in big trouble. Demand-side problems caused by everybody isolating are bad enough, but Marxists know it’s the production side that runs the whole thing. On a micro level it’s true that their costs of goods and services aren’t being accrued right now, but debts on materials already purchased and perishable materials rotting in warehouses threaten to sink enterprises, nonetheless. Add in their other costs, and their options without a bailout are to dig into savings, sell off assets, or go bankrupt – an option with cascading consequences throughout the supply chain.

These other costs include “costs of revenue,” including salaries for managers, payments on long-term purchase agreements for raw materials, and – crucially – all of the income for service businesses. They also include operating expenses such as the costs of making sales and the overhead for the business. If businesses are renting space, paying mortgages on idle facilities, on the hook for service contracts or supply arrangements, having to ship mostly empty trucks, or still getting utility bills without the sales to cover them they either have to default and go bankrupt, or get outside help. As for taxes and interest, the government is going to want their money sooner or later, and not paying the bank now means the debtor can’t borrow after the pandemic, when credit will be more necessary than ever.

The system as a whole definitely does not have the reserves to cover all of these costs for very long, and they can’t sell assets for enough money to cover them either. They’re still trying, of course, which is why pretty much all asset prices dropped in recent weeks. Capitalists have been trying to get whatever they can to pay as many bills as possible, and their slide has only been halted by the promise of incoming bailout funds.

So, the only alternatives the businesspeople of the world can see are either a global decimation of production with no real prospect of restarting in the foreseeable future – an economic depression – or bailouts. The word “bailout” refers to the process of rescuing a sinking ship by dumping water from a leak overboard, a process that only works if you can collect and dump water at a faster rate than the ship takes on.

Central banks and governments are – as a result – furiously printing money in the hopes that it will be enough to keep the system afloat. At the same time they are also hoping that the consequences of uncharted economic policy won’t make things worse in ways they haven’t anticipated. Will it work? Nobody knows, but it’s a good time for one of our customary predictions of doom.

A much surer alternative would be to simply use state power to suspend contractual obligations, debts, rents, utility charges, and taxes – plugging the hole instead of bailing out the ship. They could then provide a universal basic income and guarantee delivery of necessary services without payment. They could compel the continued delivery of vital goods through government order and compensate all the necessary workers at a level commensurate to the benefit they are providing to society. They could further streamline things by eliminating unnecessary marketing and management positions.

At most a much smaller bailout might be needed to pay for ramping up operations after the pandemic has passed. In return, the government could claim an equity stake in all of these enterprises, using their ownership to serve the public interest.

Some caveats aside, the name for such a system is socialism, and the businesspeople of the capitalist class would rather endure a depression or kill millions of people than tolerate even a limited experience of socialism. Even the plausibility of such an arrangement – virtually every element of that description has been officially proposed or adopted somewhere in the last few weeks – terrifies them, because it makes it clear how close a socialist society really is. We could, conceivably, have it tomorrow.

The biggest caveat, of course, is that the existing bourgeois state will never do this. And smashing it while building a new one makes the task much harder. But the state’s legitimacy is eroding more and more every day, and a protracted depression is sure to swell the ranks of the proletariat, creating the very solution to our primary problem. Even if they pull off the bailout, they’ll only leave the system as a whole less prepared for the next crisis.

That's why the same business guys so enamored of up-by-the-bootstraps tales of rugged settler individualism are so desperate for government checks right now. We may have called more shots than we’ve made, but that’s only because we have always known one thing they are just now learning: capitalists are trapped on the high seas of crisis, surrounded by a world ready to throw them overboard, soon.

CORONAVIRUS AND THE PATH BEYOND POST-INDUSTRIAL SOCIETY
By Connor Harney

APRIL 3, 2020

“We must do away with the absolutely specious notion that everybody has to earn a living. It is a fact today that one in ten thousand of us can make a technological breakthrough capable of supporting all the rest. The youth of today are absolutely right in recognizing this nonsense of earning a living. We keep inventing jobs because of this false idea that everybody has to be employed at some kind of drudgery because, according to Malthusian-Darwinian theory, we must justify our right to exist. So we have inspectors of inspectors and people making instruments for inspectors to inspect inspectors. The true business of people should be to go back to school and think about whatever it was they were thinking about before somebody came along and told them they had to earn a living.”
- Richard Buckminster Fuller

It has been a little over a week since President Trump deemed my co-workers at Whole Foods and I critical infrastructure during the global Coronavirus pandemic, and already, any sense of appreciation that title conferred—both in being categorized as essential in combating COVID-19 and better everyday treatment by customers—has already dissipated. In the place of that gratitude, our customers seem as entitled as ever toward the labor we thanklessly provide. At the same time, any supply-chain issue or corporate-rationing policy out of our control means we face their ire, rather than the faceless executives and middle management responsible.

Taking aside that this global outbreak has everyone on edge, this sort of behavior is not at all surprising given the highly-stratified nature of class in the United States. There is a massive gulf in wealth, even among those that work. That is, the pay differential between say a software engineer and grocery stocker like myself is immense: the stock clerk can expect a median pay of just over 12 dollars an hour and the software developer, on the other hand, can expect just under $58. Even the lowest paid developer makes twice that of the clerk. Of course, none of this takes into account benefits connected to employment in the U.S. like healthcare and retirement, which widens this gap even further.

As Zizek wrote recently, “the impossible has happened, our world has stopped,” and yet, as we are expected to provide a sense of normalcy for the rest of country during what can only be described as a breakdown of all norms, workers in the service sector still struggle for basic human dignity. It was only after public shaming that my company offered paid sick leave, and only for the extent of the pandemic. Even our hazard pay is laughable, two dollars more an hour to put ourselves and our families on the front lines of this biological battle.

Given that, it has been nearly a decade since Fight for $15 began their campaign to raise wages and unionize typically-unorganized workers. And as the minimum still sits at under eight dollars, it should come as no surprise that conceptions of the nature of the work constitute a major dividing line among American workers. As a society, we fetishize technology, and its presence looms large over our national consciousness. For that reason, those who work in that sector of the economy find themselves held in high esteem by the public.

Unfortunately, this reverence is almost always accompanied by a zero-sum view, whereas only certain workers deserve dignity. Just like the literal wealth of the nation, there is only so much goodwill to go around—low-skilled workers, or the ones that make sure that everyone is clothed, fed, and sheltered, are barred from pride in their work that those in other sectors are allowed. This belief in the lowly nature of the service worker is by no means a new one.

Dolores Dante, a waitress interviewed by Studs Terkel in the early-1970s for his famous book Working, speaks to this long-standing state of affairs when she described her response to those who would say she was “just a waitress.” According to Dolores, “people imagine a waitress couldn’t possibly think or have any kind of aspiration other than to serve food,” but for her the job fulfilled a sense of purpose to the point that: “I don’t feel lowly at all. I myself feel sure. I don’t want to change the job. I love it.”

As human beings, we need to engage with the material world for our survival. Under capitalism, the way we meet our material needs is determined by factors like where we live, our level of education, skills we have, jobs available on the labor market, as well as the social networks we are a part of. All of these things set the stage for where and how we work. That a game of chance governs our career trajectories should highlight how arbitrary the barriers to respectability we create are: the Dolores Dantes of the world should find dignity in their work.

However, the strongly-held belief in the connection between “skill” and compensation remains an obstacle to a world where such self-worth for service workers is publicly embraced. In many ways, this problem comes out of the notion of the United States as reaching a new level of economic development—a concept that would not have been foreign to our waitress. During the 1970s, manufacturing began to shift from the core to the periphery of the capitalist world system, and what are often called the service and knowledge economies emerged as the dominant growth sectors. With a certain optimism, Daniel Bell and other thinkers responded to these changes by predicting the coming of the Post-industrial society.

Under these new social arrangements, making things no longer mattered. That the U.S. could provide the bare necessities of life was a foregone conclusion. The focus of the new economy would be on ideas and technical know-how. What this view did not consider is that, rather than a transcendence of industrial society in one country, it represented more its international universalization. This was at least Harry Braverman’s response to the idea of Post-industrial society. In Labor and Monopoly Capital, released in the same year as Bell’s book, he argues that the theory is just another in a long line of “economic theories which assigned the most productive role to the particular form of labor that was most important or growing most rapidly at the time.”

Most importantly, rather than a decline in Taylorism or scientific management in the world of work, the rise of the service economy symbolized its universal application. He describes the segmentation of work similar to that used on an assembly line as “a revolution…now being prepared which will make of retail workers, by and large, something closer to factory operatives than anyone had ever imagined possible.” Not only was American society still reliant on that manufacture of commodities, other workplaces were beginning to look more like the shop floor.

Even so, the link between knowledge and the so-called new economy placed a certain import on those with higher levels of education—as it was often assumed the technology used in the growth sectors of the American economy required more formal learning. Such a view still prevails, but considering the level of technology that has been integrated into our daily lives and the abundance of people with advanced degrees working behind Starbucks counters and driving for Uber, it should be left in the past along with the myth of the post-industrial society the current pandemic has clearly laid bare.

Instead, we should use the current crisis to break down barriers between working people—highlighting the work of all that keeps our economy in motion. Moving past these antiquated notions, we can come together to forge new social bonds to fight for an economy that works for the working class and not just the rich.

The Autonomous City: A History of Urban Squatting 

Alexander Vasudevan

Verso Books, May 16, 2017 - Political Science - 304 pages

A radical history of squatting and the struggle for the right to remake the city

The Autonomous City is the first popular history of squatting as practised in Europe and North America. Alex Vasudevan retraces the struggle for housing in Amsterdam, Berlin, Copenhagen, Detroit, Hamburg, London, Madrid, Milan, New York, and Vancouver. He looks at the organisation of alternative forms of housing—from Copenhagen’s Freetown Christiana to the squats of the Lower East Side—as well as the official response, including the recent criminalisation of squatting, the brutal eviction of squatters and their widespread vilification.

Pictured as a way to reimagine and reclaim the city, squatting offers an alternative to housing insecurity, oppressive property speculation and the negative effects of urban regeneration. We must, more than ever, reanimate and remake the urban environment as a site of radical social transformation.

EVERYONE'S A SOCIALIST IN A CRISIS
By Tom Bramble
Republished from Red Flag.
March 22, 2020

One of the most prevalent ideological mantras of Western capitalism is that the market should rule. But as the latest health and economic crises demonstrate, capitalists soon forget their worship of the market when times get tough. They scream for government money, and plenty of it. It turns out that “the market” is fine when it comes to whipping workers to accept lower wages, but when it comes to lower profits, the market can go hang.

Every student with the misfortune to have studied economics at school or university will know that “the market” is the god before which we must all kneel. Markets bring consumers and producers together to ensure an equilibrium of supply and demand, the textbooks tell us. We may all be individuals each pursuing our own private interests, but this selfish endeavour miraculously results in an optimum outcome for all.

You don’t even have to step inside a classroom to have received this lesson. It’s rammed home in normal times in every newspaper, in every news bulletin on the TV, in every politician’s speech. Just listen to them. Governments can’t expand spending on Newstart because “the markets” won’t allow it. Governments shouldn’t ramp up public housing because that will throw property markets into a spin. Competition should be opened between universities because a market in education will sift out the bad providers from the good.

The champions of the market, if challenged to explain how it is that markets consistently result in supplies of goods lurching from shortages to gluts, point to the economic dysfunction of the old Soviet Union as proof that if “planning” replaces the market, a much bigger disaster ensues.

It doesn’t take an Einstein to see what rubbish this is. The last thing any capitalist wants is “free competition”, because that might squeeze their profits. Just look at how the supermarkets have destroyed small shops or how any new industry that emerges is soon dominated by three or four companies globally.

But there’s another angle to this. Capitalists preach “the market” for the working class – stand on your own two feet, don’t rely on the government – but themselves sponge off the public big time. Just look at the billions in subsidies and tax concessions the fossil fuel companies, huge enterprises for the most part, extract from state and federal governments in Australia. The vehicle manufacturers raked in hundreds of millions a year from the Australian government for decades until deciding it wasn’t enough and went overseas. This is why big companies and industry groups hire armies of former politicians to lobby on their behalf in the offices of premiers and prime ministers – there’s money in government coffers and they want it.

And while the capitalists talk about “the market” setting wages for workers, in reality, they don’t really allow the market to do the job. They use the whole apparatus of state repression, the industrial tribunals, the police, the courts to suppress workers’ rights to organise to pursue their demands.

But when a crisis hits all the bullshit about the market is thrown to the winds. And that is just what we are seeing now. Faced with the collapse of the capitalist economy, for the second time in a dozen years, with massive bankruptcies on the table and the stock market plunging by more than 30 percent and more to come, fervent advocates of the free market are now embracing government intervention to save their skins. As the Financial Times put it on 18 March, “World leaders have been forced to tear up the traditional economic playbook in response to the historic jolt to the global economy”.

In the United States, the heart of free market capitalism, capitalists and politicians alike are demanding huge government handouts. As the New York Times explained on 17 March: “Business groups, local and state leaders and a growing chorus of lawmakers and economists begged the federal government to spend trillions of dollars to pay workers to stay home and funnel money to companies struggling with an abrupt end to consumer activity”.

Politicians and their advisers who just a week ago were scorning the idea of “helicopter money”, government payments to businesses and consumers to stimulate the economy, are now trying to outbid each other to push the figure up. The Trump administration, proclaiming a state of war in the fight against coronavirus and the economic crisis, will shortly launch a huge fiscal stimulus program pumping more than US$1 trillion into the economy in two stages, including potentially $1,000 handouts to spur spending. And there will be more to come.

In other times, Trump might have denounced his proposals as “socialism”. Not today. He now boasts that his new package will be “big and bold”. His chief adviser, Larry Kudlow, says that Trump has agreed to do “whatever it takes” to address the crisis. Senator John Cornyn, second highest ranking Republican in the Senate, for whom government intervention is normally anathema, explained: “Our economy, our whole economy is in jeopardy”. Some in the Democratic Party, which in recent years has become the favoured party of Wall Street, are proposing a monthly payment to every American for the duration of the crisis. Alongside this direct injection of funds into the economy, the US Federal Reserve Bank is pumping trillions of dollars into the banks.

As in the US, so too in the rest of the world. The European Commission, which has long insisted that member states keep their budget deficits to 3 percent of GDP, has lifted limits on government borrowing. In 2015, it refused to allow the Greek government to hike spending when faced with unemployment of 20 percent, but is now telling governments it’s open slather. The future of European capitalism is at stake, so nothing is off the table. The Swedish government is allowing businesses to defer tax payments for up to a year at a cost equivalent to 6 percent of GDP. Britain has unveiled a £330 billion package of emergency loan guarantees to business and £20 billion in fiscal support.

Tory chancellor (treasurer) Rishi Sunak, said: “This is not a time for ideology or orthodoxy, this is a time to be bold ... I’ll do whatever it takes”. Pedro Sanchez, Spanish prime minister, triggered what he called “the biggest mobilisation of resources in Spain’s’ democratic history”, including €100 billion in state loan guarantees. French finance minister Bruno Le Maire, who has put up €300 billion in state loans to business, told the press: “I will not hesitate [to use] all the means available to me”.

The European Central Bank, which estimates that the crisis might result in the euro area economy shrinking by more than 4 percent this year, is set to inject more than €1 trillion into the European banks in the next nine months. “Extraordinary times require extraordinary action”, says ECB president Christine Lagarde.

In Australia, the Coalition government which has made “balancing the budget” a central feature of its platform, is now spending $18 billion, three-quarters of which will go to business. It is now lining up a new wave of spending commitments for business, both of a general nature, valued at more billions, and also to specific sectors like tourism, sports, arts and entertainment and the airlines which will total more than $1 billion.

The Australian Chamber of Commerce and Industry is urging the federal government to provide wage subsidies to workers, equivalent in value to Newstart to all businesses experiencing a sharp downturn. It is also asking the government to provide concessional loans of up to half a million dollars, with 80 percent of the debt guaranteed by government, as well as wage subsidies to cover sick leave entitlements. Nothing but corporate welfare of a kind that they have long decried when applied to workers themselves.

In the short term, working class households will get some benefits from this cash splash. In Australia welfare beneficiaries will be getting $750 in their bank accounts. In the United States it is likely that Americans will receiving close to $1,000. But this is just short term relief to get the economy moving. The long term benefits will go to the capitalist class in the form of tax cuts and other financial concessions.

The current crisis demonstrates not only that all the ideological nonsense about the virtues of the free market is quickly thrown overboard when capitalist interests are threatened, but also that the idea that governments are essentially powerless in the face of the markets is rubbish.

Governments are not helpless victims who cannot do anything in the face of “economic reality”. In the normal course of events, when we demand things like better welfare, health care or education, governments tell us that it isn’t possible.

Workers every day face their own personal crises – lack of money to pay the rent or the possibility of defaulting on their mortgage because the boss didn’t call them in for work this week, overdue utility bills that must be paid or risk being cut off, expenses for children’s education that fall due, the fear of redundancy. These are crises that are experienced personally but are really a collective crisis of everyday life for working class people. But when we ask for governments to respond, we are told that addressing these things collectively is not possible, and that this is just the way things are.

But when the capitalist system goes into crisis, governments act promptly. It turns out that political decisions about the economy are possible and it is wholly possible for governments to tell the markets to go jump. The president of the eurozone financial ministers committee summed up the prevailing attitude today: “Rest assured that we will defend the euro with everything we have got”. European finance ministers are looking at deploying a firefighting fund set up during the last eurozone crisis, with €410 billion of capacity. In the case of Spain, the Financial Times reports that an inner circle of government has assumed “command economy powers”. The Spanish government will take responsibility for guaranteeing medical, food and energy supplies.

Most of the time we’re told that “the economy” can’t afford a decent standard of living for workers – higher minimum wages, liveable Newstart allowances, a massively expanded public housing program to get people out of the private rental market, free university education. Budgets have to balance. Businesses have to be competitive. Taxes have to be kept low.

And now, all of a sudden, we’re finding that the economy can, apparently, afford things that we have long demanded. Governments around the world are now laying out money on things that just weeks ago they would have attacked as unaffordable.

The Morrison government has been attacked even by the Business Council for not lifting the Newstart allowance. And now it’s spending $4.7 billion on a one-off $750 payment to millions on welfare. State governments too are ramping up health spending. In Western Australia, the government is freezing utility bills and public transport charges, doubling energy assistance payments and making sick and carers’ leave more available for public sector workers who either have the virus themselves or who need to care for others.

The Hong Kong government has handed out $1,000 payments to citizens. The Italian government, faced with one of the worst outbreaks of COVID-19, is suspending mortgage payments. In New Zealand, the government has raised all welfare benefits, permanently, by NZ$25 a week and doubled winter energy payments to beneficiaries and age pensioners. In France also, benefits are being hiked and made more widely available.

It’s not that governments have suddenly discovered a big pot of gold in the basement of the central banks. They say that they are taking these measures to both protect public health and to save the economy. But it’s obvious which takes priority. The new measures constitute the largest bailout bonanza in world history, carried out through state-administered transfers of public wealth and current and future debt to billionaires and big business: socialisation of losses, privatisation of profits. The outcome will be to further transfer, consolidate and concentrate wealth, just as has occurred since the GFC. While there is discussion about small handouts, nothing serious is being proposed to halt the mass layoffs now gathering steam.

In pretty much every spending package, subsidies to business, government loans and tax concessions account for two-thirds or more of the funds outlaid. Things that directly benefit workers – the big majority of the population – account for only one-third of the money. Just think of Australia: $13 billion to business, $4.7 billion to those on welfare.

When you think of the humiliating restrictions imposed on Centrelink clients, business is being showered with money with no strings attached. In Australia, the federal government is offering subsidies to bosses to keep apprentices and trainees. But all that does is encourage bosses to sack the trainee at the end of the six months and take on another one, with another government subsidy. No real jobs created, just a steady flow of money flowing into the bosses’ pockets.

But it’s not just a question of the money being disbursed. Other sacred cows are being slaughtered. The sanctity of private property, for example. The Spanish government has announced that it is requisitioning private hospitals and healthcare providers for the duration and developing plans to house and feed the homeless.

President Trump announced a series of extraordinary measures on 18 March, seizing on the powers vested in him by the Defence Production Act to steer production by private companies to overcome the shortage of masks, ventilators and other health supplies. Playing catchup on testing for COVID-19, Trump is deploying two Navy hospital ships to New York City and the West Coast. Astonishingly for the United States, whose president made his fortune in real estate, the Housing and Urban Development department will suspend foreclosures and evictions until at least the end of April. The federal government is also requiring employers to provide sick leave to workers infected with the virus. In California, the governor has announced plans to buy hotels to house some of the state’s 150,000 homeless people.

In Austria, healthcare workers with children are provided access to free childcare to allow them to continue working. In South Korea, the government is offering emergency child care to parents still at work, with class sizes limited to ten and supervised by trained teachers. In Australia, according to the Guardian, discussions are underway to underwrite home mortgages and even employment guarantees.

It turns out that these things, too, can be done.

So, in an economic emergency, few of the usual rules apply. Governments can marshal the resources and can threaten the narrow interests of private businesses. Hardcore libertarians despise these measures as rampant socialism. From their perspective, they’re right: the very existence of such programs is condemnation of the free market capitalist model that they promote. But they are best seen only as another approach to the management of the capitalist economy.

The fact that governments across the OECD are now prepared to spend trillions of dollar to save the financial system from collapse only confirms that the world economy cannot be left safely in the hands of “the market”. And, the situation clearly confirms that when the capitalist class and governments deem it necessary to save their system, lots of measures they once denounced as “unaffordable”, not permitted by the condition of “the economy”, are actually affordable and permitted. Governments can act when required. The ideological justifications of yesterday are revealed as threadbare. But nor are government interventions of this nature geared towards the interests of the working class, only the interests of the bosses.

POLITICS OF THE PANDEMIC: THE FAILED NEOLIBERAL RESPONSE TO CORONAVIRUS

COVID-19 Proves Workers Are Essential and Capitalists Are A Drain

March 27, 2020
By Jasmine Duff
Republished from Red Flag.

The Marxist argument that it’s the labour of workers, and not the supposed intelligence and entrepreneurial spirit of bosses, that keeps society running, has long been ridiculed by defenders of capitalism. In the conditions created by the COVID-19 pandemic, however, the truth of Marx’s claim has been brought into sharp relief.


Those whose work has been deemed essential under the current restrictions aren’t the CEOs, bankers, mining executives – or the politicians who serve them. It will come as no surprise, perhaps, to anyone but themselves, that these so-called wealth creators can spend months isolated in their mansions or country estates without this having any impact on the basic functioning of society.


The rest of us would be better off without them. The people we depend on in this crisis are those whose labour we depend on in everyday life: nurses, teachers, those who grow our food and those who transport it to the supermarket shelves, and the people who, despite the health risks, continue to serve us in the supermarkets and chemists.


We’re told that corporate bosses like Qantas CEO Alan Joyce and mining magnate Gina Rinehart deserve their immense wealth because they play a special role in the economy. Typical of this perspective is the argument made by Forbes columnist and “leadership strategy” expert Rainer Zitelmann in a 2019 article. “For entrepreneurs, who usually earn far more than top-tier managers, high earnings are usually a reward for particularly good ideas”, he wrote. “The richest people in the world are those who have the best ideas.”


The ideologues making these arguments want us to believe that workers are unimportant and replaceable – nothing more than a “human resource” to be exploited at the whims of the capitalists. If you’re a worker, they think, it’s because you’re not smart, creative or driven enough to have climbed through the ranks. That’s why you deserve low wages, poor job security, a shitty education in chronically underfunded schools and a lack of decent health care.


The COVID-19 crisis has torn this argument to shreds. The global economy is grinding to a halt because many workers have to stay home. The CEOs self-isolating in their mansions can do nothing to save the situation. All their supposed creativity and intelligence is useless without the labour force that their wealth was built on.


The actions of our political leaders confirm this. The only creative and intelligent thing they’ve thought of to do to stave off the prospect of a deep recession is to keep as many workers as possible at their posts – recklessly sacrificing our health to protect the profits of their corporate masters. Prime minister Scott Morrison gave the game away when he said in a press conference on 24 March that while all “non-essential” workers would be sent home “everyone who has a job in this economy is an essential worker”.


As Morrison put it, “It can be essential in a service whether it’s a nurse or a doctor or a schoolteacher, or a public servant who is working tonight to ensure that we can get even greater capacity in our Centrelink offices, working until 8:00pm under the new arrangement in the call centres, these are all essential jobs. People stacking shelves – that is essential.”

When the basic functioning of society is on the line, it’s not the Alan Joyces or Gina Rineharts who are deemed essential. It’s the shelf stackers. Without workers, the capitalists are nothing.


The flipside of this equation is expressed in Marx’s description of the working class as the gravediggers of capitalism. Workers are the engine that keeps society running. When our labour stops, society comes to a halt.


Already, in the context of the COVID-19 pandemic, we’ve seen numerous examples that illustrate this potential. Thousands of Italian workers in the auto and metal industries have walked out in wildcat strikes to enforce social distancing, refusing to risk their health and the health of their families for Italian prime minister Giuseppe Conte. Conte had made clear his desire to keep profits flowing despite the country having a 10 percent mortality rate from COVID-19 infections – tweeting on 14 March that “Italy doesn’t stop”. Workers, however, had other ideas.


Workers in Argentina who took over a factory in 2017 that previously sewed police uniforms are now using it to produce surgical masks. Another group of Argentinian workers who in 2011 took over one of the largest printing presses in Latin America are now using it to print 3D protective masks and produce hand sanitiser.

There has even been some action by workers here in Australia. Early in the morning on 27 March workers at a Coles warehouse in Melbourne’s western suburbs walked out in protest management’s refusal to provide adequate protective equipment. The industrial power of these workers is immense. A three-day strike at the same warehouse in 2016 resulted in supermarket shelves across Victoria and Tasmania lying empty for weeks.

Workers have the power to prevent capitalists exploiting our skills as pickers in warehouses, shelf stackers in supermarkets or as truck drivers. In a world without bosses, we could collectively and democratically decide how our skills should be used to advance the interests of everyone. We could distribute food, for example, according to human need. This would end the barbaric reality that exists under capitalism, where millions starve to death every year despite enough food being produced to feed the world 1.5 times over.


We could use our skills as construction workers to rapidly build hospitals, rather than, as this the case today, endless luxury apartments and shopping malls for the rich – so that in any future health crisis no one would be forced to go without a bed.


Working class solidarity, democracy and collectivity: these are building blocks of socialism. Socialism is a society in which workers can democratically decide, using all our skills and creativity, what kind of world we want to live in, rather than allowing a wealthy minority of capitalists to run society in the interests of profit. The bosses need us. We don’t need them.


Right now, capitalism is in crisis. Workers have more power than ever, but we’re being forced into more barbaric conditions every day. To quote German revolutionary Rosa Luxemburg, writing in the context of the of the epochal slaughter of World War One, we now stand at a crossroads, “Either transition to socialism or regression into barbarism.”


Every day, new sacrifices are made at the altar of corporate profits – whether it’s the destruction of the environment, or the destruction of human health. The task of organising for a socialist future has never been more urgent.
March 24, 2020
The Wall Street Journal's Pitch for Mass Murder is Catching on in Capitalist Circles
By J.E. Karla


Not even two weeks into an extraordinary response to the novel coronavirus outbreak, the upper echelons of capital are wondering whether saving millions of lives is really worth the damage being done to their investment portfolios. According to reports, the debate among the ruling class is over whether or not to walk back some of the measures taken to slow the spread of the virus -- efforts already considered tardy and inadequate by public health experts -- in order to minimize business losses.


Like many elite notions, this idea was first launched in the editorial pages of the Wall Street Journal. An unsigned editorial there is the most visible the vanguard of the bourgeoisie ever really make their deliberations, and this one last week (behind a paywall, of course) was especially candid.


After opening paragraphs congratulating the response to date, hoping that “with any luck” the nation’s health care system won’t collapse, they lay out their basic thesis:


“Yet the costs of this national shutdown are growing by the hour, and we don’t mean federal spending. We mean a tsunami of economic destruction that will cause tens of millions to lose their jobs as commerce and production simply cease. Many large companies can withstand a few weeks without revenue but that isn’t true of millions of small and mid-sized firms.”


After some attempts at pulling heart strings over the entrepreneurs that will eat the most shit in the months to come -- using the petit bourgeoisie as human shields for big business, as is custom -- and some other telling admissions we’ll return to, they end with this:


“Dr. (Anthony) Fauci (Director of the National Institute of Allergy and Infectious Diseases) has explained this severe lockdown policy as lasting 14 days in its initial term. The national guidance would then be reconsidered depending on the spread of the disease. That should be the moment, if not sooner, to offer new guidance on what might be called phase two of the coronavirus pandemic campaign.”


They do not have the guts to explicitly state that this “phase two” would mean allowing most normal activity -- the contact the virus needs to continue its spread -- to return, but their weasel word description of “substantial social distancing… in some form” (emphasis mine) says it all. “This should not become a debate over how many lives to sacrifice against how many lost jobs we can tolerate… But no society can safeguard public health for long at the cost of its overall economic health.”


They don’t want to debate how many lives to sacrifice in the name of saving “jobs,” -- a euphemism for the fortunes of employers, the bourgeoisie -- but that’s a great way to describe dialing back the only measures so far demonstrated to work against this plague in the name of economic “health.”


How many lives are we talking about? As I write, 565 people have died of the disease in the United States, with fatalities doubling every 2-3 days. The experience in Europe and China indicates that response measures take roughly a week to slow the virus down. That means that we should see 2-3 more doublings before last week’s actions finally take effect, 2260 to 4520 dead people this week. The Journal and their allies are suggesting that we should let those effects last a week, and then ratchet up the spread of the virus again.


Even assuming a very optimistic scenario where the doubling drops by half -- i.e. to once every 4-6 days -- and then lands somewhere in the middle -- say 3-5 days -- that would mean somewhere between 72,000 and nearly 600,000 dead people just a month from now.


But it’s worse than that, because there are about 5 times as many critical cases as there are fatalities. The absolute best case scenario puts us at more than 360,000 critical cases in a country with less than 100,000 intensive care beds. The worst case puts us at 3,000,000.


You can then add thousands of deaths from non-coronavirus causes that could not get adequate treatment -- car accidents, allergic reactions, heart attacks, etc. And that month cut off is arbitrary; the deaths would continue after that. In the New York Times Nicholas Kristof quoted a British epidemiologist as estimating a best case of 1.1 million. That best case involves much more distancing than what the Journal and company are proposing. They are calling for hundreds of thousands of people, perhaps millions, to be sacrificed for the sake of “economic health.”


This blood thirsty logic is precisely the sort of thing capitalists project onto communists. This, however, brings us to the admission I alluded to above, buried in the middle of the editorial:


“Some in the media who don’t understand American business say that China managed a comparable shock to its economy and is now beginning to emerge on the other side. Why can’t the U.S. do it too? This ignores that the Chinese state owns an enormous stake in that economy and chose to absorb the losses. In the U.S. those losses will be borne by private owners and workers who rely on a functioning private economy. They have no state balance sheet to fall back on.”


We don’t need to debate the class character of the Chinese state -- even the Communist Party of China will admit that “socialism with Chinese characteristics” accommodates global capital. Regardless, the Wall Street Journal openly admits that the options at hand are a state-controlled economy capable of stemming the plague’s advance or letting potentially millions of people die for the sake of sustaining a privately-owned one.


The US government could easily freeze all debts, rents, and other contractual payments, guarantee a short-term income for all families, and take all necessary measures to maintain provision of food, medicine, utilities, and vital services until the virus has run out of steam. But even a momentary economy run on the basis of human need and not the accumulation of profit poses the threat of a good example. It’s bad enough that China does it incompletely, hence official bellicosity against them even in this hour of mutual need.


There is no amount of human lives the ruling class wouldn’t trade to prevent that risk, especially when they know they are the least likely to die.


The only silver lining is that one way or the other most of us will come out on the other end of this nightmare, and when we do the argument we must make is clear: capitalism will continue to kill us by the millions and billions until it is stopped. You don’t even have to take our word for it -- you can read it in the paper.



March 22, 2020
Capitalism, COVID-19, and Crisis: A Class Analysis

By Ikemba X

THE CAPITALIST/IMPERIALIST CLASS

In the past week, the global economy experienced its worst week since 2008 (following a series of “Worst Weeks”, it keeps getting worse), and the economic crisis is sure to deteriorate as time marches on. Three years of growth in the market have evaporated, unemployment has seen a spike, multiple industrial sectors have slowed to a crawl or stopped moving altogether, and the trillion-dollar injection into the market by the Federal Reserve did almost nothing to stop the free fall (other than transfer toxic assets to the public). If the recession hasn’t already hit us, we’re in for a catastrophe when the bills are due. The following is a brief outline on how we got here, and how much worse it's going to be this time around.


The modern capitalist economy simply cannot function without large amounts of fiat currency in the form of government-backed loans. As the bourgeoisie continues its song and dance of improving the means of production, increasing production of commodities, and better perfecting the division of labor, the price of operating such vast and complex industrial armies and machines is simply too much. In order to compensate for this massive cost, the bourgeoisie in the global core have forged an alliance between industrial and finance capital, exporting ever increasing amounts of production overseas, so that cheaper labor can be exploited. At home, the use of credit, loans, and ownership of companies into shares have allowed capitalists to continue their operations, though the market has grown more unstable than ever before. The financial crisis in 2008 drove capitalism to the brink of collapse, and it was caused specifically by inherent contradictions in the system. The rate of profit has continued to fall, production has become more expensive and commodities are produced in greater volumes for lower prices. Any panic in the market has a ripple effect, and the harsh truth is that a large majority of the world’s “wealth” is artificial, mere symbols in a computer program that rely solely on blind faith. If the bourgeoisie becomes scared enough to taking out its money and halting production, the whole rotten structure collapses. If not for the action taken by the Feds over the past few decades, including multiple bouts of quantitative easing under Obama, the global market may very well have imploded long ago. It took almost a decade for the economy to mostly recover from the 2008 crisis, for the working class a recovery never really came, and some of its effects are still felt in more isolated sectors of the economy today.


Leading up to the COVID-19 scare, there was an already existing crisis in imperialism and capitalist production. Notably, the Trade War between China and the United States has had negative effects on the rival imperialist powers, who were willing to threaten economic crises while jockeying for hegemony in the world market. The global energy sector was also entering a crisis, with Russia and the OPEC countries at an impasse on restricting oil production, which had the effect of flooding the market with oil. The overproduction of commodities in this critical sector of the economy was causing problems for the bourgeoisie in the United States, who have responded by seizing oil fields in Syria and beating the war drums, threatening Iran with invasion. Meanwhile, European nations are experiencing a contraction of unified dominance as Brexit causes a fracture in European imperialism, and a potential crisis in the UK with the looming threat of a No-Deal Brexit. This would have significant ripple effects on the global market, as the UK is one of the largest economies in the world.


It is important to remember that this crisis was caused purely through the anarchy of capitalist production. Once the capitalists were bailed out following 2008, imperialist plunder continued and the bourgeoisie recovered, leaving the proletariat to fend for themselves and foot the bill. This time around, production really has stopped, and the effects on the capitalist economy will be disastrous. The Chinese economy today makes up 16% of global Gross World Product, is the second largest economy in the world, and has the largest pool of cheap labor, as well as being a rising imperialist power, offering predatory loans to African countries. Due to the COVID-19 pandemic, factories responsible for 70% of China’s exports have simply ceased to operate or have cut production massively, and travel to and from the country has been shut down completely. Several other countries have shut down massive sectors of their economy such as the airlines, and Italy has shut down its country altogether. Therefore, this latest crisis isn't caused by capitalists being unable to pay for their ventures, but rather there simply is no movement of capital, and no production of commodities. With this monumental economic halt/slowdown, we are staring in the face of a crisis the likes of which we have not seen in almost a century. The COVID-19 is sending the capitalist system into a freefall, and as always, the bourgeoisie and their governments will do everything in their power to make sure the workers absorb the brunt of this fall.



THE PROLETARIAN SITUATION


The situation in the United States is dire for the proletariat. For starters, there is a debt crisis, $14 trillion consisting mostly of mortgages, car loans, student loans, and credit cards. Deepening wealth inequality has accelerated the fall of real wages, and today (even before the arrival of COVID-19) most proletarians are in dire straits. Half of Americans make $30 thousand a year or less, and 70% of Americans live paycheck to paycheck and cannot afford a $400 crisis. Real unemployment was sitting at about 5% and has now spiked to almost 20%, and underemployment or those who have given up on finding jobs represent a forgotten sector that the US government is fine keeping in the dark. With the COVID-19 scare, layoffs are rising at an unprecedented rate, and those who aren't being fired are having their hours cut. In a country where health insurance is tied to employment, a pandemic which causes a spike in unemployment is probably the worst-case scenario for a proletarian.


The COVID-19 scare has also affected the mentality of the working class, who have begun panic buying commodities. This almost immediately resulted in a shortage of goods, which has ripped away the veil which hid the scarcity that does exist in capitalism, just like any other system. Lean manufacturing, or Just-in-Time manufacturing, provided us all with the hallucination that there was always an abundance of products for us to buy. However, after being put under pressure, the lie has been exposed for what it really is. In a nutshell, the transportation system has been developed enough that capitalists can rely on the nomadic lifestyle of proletarians in that industry. There is no large-scale storage of goods, but rather far-away sites that remain available whenever products are needed. Such a system is incredibly volatile, and any disruption in the distribution chain can cause an immediate and drastic shortage. We saw a glimpse of this with the aftermath of Hurricane Maria, when the natural disaster destroyed the colony of Puerto Rico. The result was that there was a global shortage of IV bags, since Puerto Rico was the hub of production for these goods. Now, imagine a crisis like this, but in multiple industries on every level of the production process, and not just based on production itself being shut down, but also on the transportation industry being paralyzed (like what we’ve seen with the decline in airline traffic and mass layoffs of truckers). China produces most of the world’s steel and, as stated before, their industrial production has been slashed in 70% of factories. And that is just one country. Globally, we are already seeing crippling shortages of medical supplies, most notably in Italy, the United States, and Iran, which has been the hardest hit of the three due to imperialist sanctions.


There has also been a growing trend of social distancing and self-isolation as a result of the pandemic. The cultural effects of this have the potential to negatively impact us all. Sowing fear and distrust of each other, the COVID-19 scare threatens to further divide us, further alienate us, and further fuel xenophobic and racist tendencies among white proletarians, as indicated by the recent uptick in racially-motivated attacks against proletarians of East Asian descent. This directly plays into some of the most reactionary and chauvinistic ideas in the US, expressed clearly by the Bourgeois slogan “China Lied, People Died” and scapegoating, such as labeling COVID-19 as the “Chinese Virus.”


In December of last year, the service sector accounted for 97% of new hires according to the Labor department. Additionally, the US economy relies heavily on consumer spending, and while the rush on grocery stores and online shopping may offset this in the short term, less and less people will be able to sustain this spending as incomes dry up in the coming months. Couple this development with the above-mentioned fact that most workers live paycheck to paycheck, and we see a crisis in consumption of commodities, one of the basic causes of capitalist crisis.


In short, the situation looks bad for the proletariat. Congress can’t even pass basic measures, and the clock is ticking. There have been discussions in Congress about a potential UBI bill, but if this crisis continues for several months, one-time checks will not be enough to stop the bleeding. Successive monthly checks may stop the bleeding in the interim, but the ripples effects of mass unemployment are sure to carry well into 2021, if not multiple years beyond. In other words, we’re going to see a crisis the likes of which the world has never seen before.

WHAT CAN WE DO?


There have been some policies proposed by Social-Democratic elements of the Democratic Party in response to the COVID-19 pandemic. The measures proposed are attempts to treat the symptoms, and not cure the problem. Things like Medicare for All and nationalization of the healthcare system, as well as nationalizing any industries which seek government bailouts, do not get rid of the underlying economic problems which lead to the crisis we are faced with today. Medicare for All in theory protects us all from the virus, but we have seen clearly that the capitalist system of production and distribution has utterly failed the Italians, who have been hit by a chronic lack of medical supplies for their patients. In other words, what good will universal healthcare be if the medical industry itself cannot handle the demand. Currently, the for-profit system in the US offers less than 1 million hospital beds, in a nation of 330 million people. Additionally, our aim should not be to simply treat the sick. We must have a centrally-planned economy, with systems in place that prepare large storages of medical supplies we need for when viruses like this are unleashed on the world. We need an economic system that does not collapse after one month of a fraction of its production being cut.


Activists should be cautious moving forward in their political work. The most important thing we can implement right now is Serve-the-People survival programs, specifically in terms of food and medical supplies. In doing our work, make sure to have hand sanitizer, gloves, and masks on hand for use and distribution. We should also not allow social distancing and hygiene practices to be spurred on by panic, and use them with clear heads, knowing full well that we are protecting the lives of others through these actions, not just ourselves.


The large-scale demonstrations are coming. No society can have mass unemployment and shortages of basic materials without intensifying the class struggle as a result. We must be prepared to go among the masses where they organize, and organize our own demonstrations, building strong links with the people. Go to the masses, learn from them, and educate them. Most of all, stay safe. Use the time given to us in this crisis to study theory from revolutionary teachers such as Marx, Lenin, and Mao. Do not hesitate, and do not be afraid of study. Study the conditions of the people. I strongly recommend we all crack open Lenin’s “What Is To Be Done” again, in preparation for the coming months.