The Global Pressure Cooker


In Pontecorvo’s film Queimada, set in the 1830s, the agent provocateur, Sir William Walker, points out that a decade can show the contradictions of a century. Fast forward almost 200 years. It only took a few days into 2016, the strains of Auld Lang Syne having barely faded away, to highlight the contradictions of the whole capitalist system today. Once a decade was needed, now only a few days; the acceleration of forces and events is palpable. Indeed, although the various aspects of life under capitalism have always been linked – and those always highlighted in times of crisis – today’s expressions of crisis can move from one domain to another to expose a quite astonishing interconnectedness and immediacy as the past few weeks since the start of this year show.

This article aims to put some perspectives on the acceleration of events. One can always point to the underlying crisis of capitalism – its crisis of value – but this crisis never expresses itself without the decisions and actions of classes and groups, and the vicissitudes of events. It is on these behaviours that this article focusses. In a few pages it is impossible to review the whole world situation so I have selected a few key issues to concentrate on.

2016 opened with a major fall in the Yuan, forcing the Chinese rulers to find an appropriate response against the backcloth of falling economic expectations. Slackening of economic activity in the world’s major workshop has led to overcapacities in world shipping, air freighting, steel production and extraction industries– all of whose output and share prices have fallen substantially. The oil price fell further and it has not yet bottomed given that Iran has now rejoined the world market. The ever more murderous wars in the Middle East continued apace with the pivotal Saudi/Iranian rivalry and Russian interventions as prominent features. The mass migrations from the region into Europe are straining relationships between EU members; fences are going up between Shengen countries and there is a political and social backlash against immigrants. Meanwhile, all factions of the ruling class defend their right to bomb and murder civilians as and when they wish. The big question is: where is the response of the proletariat?

But before coming to that question, we must look at some aspects of the global crisis since last year. As a starting point, I refer back to the text of October 2014 – ‘Heart of Darkness’ – and its major themes in Internationalist Perspective 60. To recap, for some decades we lived in a period of post-imperialist blocs, post-Reagan and Thatcher economics, in which there was an accelerated development of the productive forces, an ever-tightening integration of world capital and its market that promoted both increased interdependence of national capitals and increased competition. This is a particularly profound contradiction today, around which much of the bourgeoisie’s policies are centred. Along with these economic changes, more nation states are asserting themselves aggressively as regional or global imperialist players. Furthermore, for some years strong social movements have collided time and again with broadening imperialist interests – as exemplified in the Arab Spring. A year ago we said that with the deepening economic crisis and the intensification of contradictions against political and social constraints, the world was fissile. It still is, and is getting hotter.

Financial Exhaustion

Consider how exhausted are the policies of the bourgeoisie in the economically-advanced countries following the financial crisis of 2008. Quantitative Easing – implemented in various ways across the world – was introduced to support the price of capital and increase the money supply through central banks buying medium and longer-term debt;it has lost almost all its leverage. Although the US stopped the policy in October 2014, the Japanese and European Central Bank have continued with it. Indeed the ECB increased the amount of monthly easing hugely a year ago and again, in desperation, this month by a further third:the current rate of QE is €80 billions/month.

Low interest rates, scarcely above zero for several years, have in places gone negative. The low oil price has brought lower revenues to producing countries while it has not stimulated industrial production in the importing countries. And now the banking system is again showing problems, especially in the Eurozone where banks’ share values have plunged. Deutsche Bank reported heavy losses in January and questions about its ability to pay interest on its contingent liability bonds have highlighted underlying risks. Worse still is the Italian banking system which is a chronic worry to the E.U. And underneath, the Eurozone’s structural problems remain. In the US, the Federal Reserve regrets the view it took in December that the American economy was growing, when it took the opportunity to raise interest rates. In February, Yelland told Congress that “Financial conditions in the US have recently become less supportive of growth,” and that foreign economic developments “pose risks to US economic growth”. The weakening of the economies in the West is reducing demand for Chinese manufacture and, in turn, weakens that country’s growth.And yet the key global policy makers have no alternative plans.

The Oil Price Plummet

The oil price has fallen catastrophically for producing countries – from over $130/barrel to under $28 in recent weeks.

Saudi Arabia abandoned its role as global swing producer over a year ago and until recently maintained high production levels, a strategy initially intended to undermine the US fracking and tar sands production. However, this policy – successful regarding the fracking but not against the tar sands – has been draining the Saudi finances savagely. It is difficult to know how long they can keep it up especially with the costs of their wars, although the oil minister says he is prepared to let it drop to $20. Iran’s output to the world market is only enlarging the glut. The Russian economy likewise suffers – indeed its economy shrank by 6% in 2015 – and the ruling class is imposing savage austerity measures on its enormous population.

There are signs of change. By February Saudi Arabia had made approaches for cooperation to Russia (and other producers both in and outside OPEC) – their opposing military-politico activities in Syria notwithstanding. A key meeting is scheduled to take place in Qatar in April where a realignment of oil producers is likely to take place along with agreement on reduced production and a floor for the oil price.

As a symptom of deeper economic weaknesses, the low oil price did not stimulate global production over the past year so its increase will not contribute to an improvement there.

Today’s Warfare

Imperialist rivalry has long been a permanent condition of capitalism, with much of the second half of the 20th Century dominated by that between the American and Russian blocs.Following the collapse of the Soviet Union the physiognomy of world imperialism has undergone great change.

Today’s sharpening imperialist rivalries are highlighted in many parts of the world, not only between global powers but also between regional imperialisms which have grown in reach and aggressiveness. Characteristics may differ in different theatres – such as in the Middle East, East and South Asia, or in various parts of Africa – in terms of adversaries, material, and strategic and political focus. But together, whatever else they express, these wars constitute a bloody violence against civilian populations; of bourgeois forces against the mass of society.

The Middle East is a vipers’ nest of shifting alliances and hostilities. What used to be the focus – the Palestinian question – has been marginalized; no-one now maintains the fiction of a Palestinian/Israeli peace process.Now other hostilities have moved to centre stage. The rivalry between Iran and Saudi Arabia has intensified with both committing air and ground forces and proxies into Syria, Iraq and Yemen which are treated as free-fire zones where civilians are indiscriminately slaughtered along with militias. Turkey’s conflicts with Kurdish forces has led to tension with the US which arms them, as has its shooting down of overflying Russian aircraft with Putin. For years the West – the US and other NATO members – has regarded the skies as its own. No longer. In this theatre global powers, regional powers and nearly one hundred militias are all operating in a murderous chaos from which has been generated a massive flood of refugees into Lebanon and Jordan far greater even than that into Europe.

The intricacies of this theatre of conflict change day by day but there are, however, some developments that should be pointed out. In the face of perceived Western, particularly US, hesitation to commit ground forces to confront the Islamic State and to sanction the Assad regime after it crossed a so-called ‘red line’ by gassing its citizens with chemical weapons,Russia entered the fray with objectives of its own. The combination of Russian cruise missiles and air power and Iranian Revolutionary Guard forces on the ground substantially overwhelmed IS and other anti-Assad forces and provided breathing space to the Syrian regime. The Russian pull-out (whatever the actual level turns out to be) then reduced the danger to them of being sucked into the quagmire. The extension of Russia’s use of military force in Crimea and Ukraine to Syria has further complicated the already uneasy relationship between the two strongest military powers. While Putin does not want to have direct military conflict with the West (although his aircraft are not averse to harrying US naval ships near Crimea and South Korea) he has shown himself adept at hobbling Western policies and wrong-footing the US. Putin does not necessarily want to maintain Assad in power, but this action gives Russia an ongoing role and a say in his replacement.

In this regard it is noteworthy that the cynical call for humanitarian aid to the Syrian population and for a cessation in hostilities came from Kerry and Lavrov in a joint US/Russian statement; subsequently, they both called for more progress in the Munich talks which may become again the stage for an illusory ‘peace in our time’ in this theatre of war. The Russian maneuvers have highlighted to the US the urgent need to define their military posture more coherently.

The Obama Administration has over recent years signalled a desire to re-focus on the Pacific region and to reduce commitments in the Middle East. This has been encouraged in part by the reduced strategic value of Saudi oil to the US and a related and substantial distancing from that erstwhile close ally and also by China’s increased belligerence in the Asia-Pacific region. In the South China Sea, China’s creation of artificial islands to justify exploitation rights and extended military reach have substantially increased tensions with Vietnam, Malaysia, Philippines and Indonesia. US Navy ships have challenged these activities by sailing within Chinese-claimed waters. Naval exercises in the area will take place this year involving US, Japanese and Indian forces. China, Japan, Taiwan and South Korea have their own tangle of relationships – of rivalries and collaborations – and all are wary of North Korea’s possible agendas. Although China may become the world’s largest economy, this does not translate in the short term into a military capability able to rival the US but its ability to pressure its neighbours will depend in part on US military commitment and the region is a long way from the American mainland. Yet, China’s very bellicosity encourages its rivals into the American aegis.

The ability of the US to re-focus American energies of course will depend on the reduction of hostilities in the Middle East and that doesn’t look likely any time soon. The challenges posed by Russia and China in their different spheres were among the main challenges that US Secretary of Defence Ash Carter identified in early February when presenting his 2017 military budget to Congress. In this presidential election year the American ruling class will be overhauling its strategic priorities and reassessing its view on the commitment to ground forces in foreign wars. The Obama Administration’s efforts to pull out from the wars in Afghanistan and Iraq have not given the US what it wanted and we can expect Obama’s successor to have a new mandate for more aggressive pursuit of American interests.

Interwoven with these global and regional imperialist antagonisms is the havoc created by the terrorist franchises which have spread across the globe: kidnappings in West Africa by Boko Haram, terrorist strikes in Europe by Islamic State and al-Qaeda groups, murderous street shoot-outs in Djakarta and Paris, bombings in Ankara and Brussels, Libya in chaos. The Islamic State, Daesh, has long spent its start-up funding from its original Saudi and Qatari backers and is now mainly self-sufficient thanks to selling oil and extorting the population under its control. Training foreign fighters and sending them home is a low-cost means of spreading the impact of the economic, political and social consequences of world imperialism’s policies back to China, Russia, Europe and the US where the propaganda of the ruling class tries to decouple their own long-term violence from the current blowback. Once the bourgeoisies of these major states considered their terror could be applied with impunity, now the jihadist terror reaches into their homelands. War has become normal everywhere; war is all around. Rarely do nation states now declare war on each other and march armies to battlefields. Today, war is endemic to everyday life for more and more populations under capitalism.

Just two days after the recent carnage in Brussels a UN war-crimes tribunal convicted Radovan Karadzic of the murder of 8,000 Bosnian Muslims amid wider crimes against humanity during the atrocious Balkan wars in the 1990s and underlined that fact that there is nothing the Eastern jihadists can teach Christian Europe about barbarism.

Stressed-out Europe

The state of the economy is not the only source of stress in the EU. The most dramatic and gutwrenching human images of the last year concern the massive migrations of peoples all over the world fleeing exploitation, oppression and destruction of their means of existence. Not since 1945 have there been such massive flights from conflict zones. From Syria, Iraq and Lebanon; from Eritrea and Sudan; from Yemen; from West and North Africa; from everywhere they flee, fleeing from war, destitution and torture. They flee from the bombings of the West and Russia, from Islamic State, the Taliban and Boko Haram, from a multitude of armies and militias. Millions have made it no further than countries adjacent to the war zones. But over the recent past a torrent of migrants have aimed for refuge in Europe where directly and indirectly they are intensifying social and political stresses on the EU. En route they have provided the raw material for human trafficking to become an industrial-scale – and murderous – business.

The dominant public mood has swung back and forward between sympathy and hostility for the migrants. Merkel, initially lauded for her openness towards the refugees, has found her political position suddenly become precarious. Not only in Germany but in most other European countries right-wing groups and parties are amplifying and preying off currents of xenophobia. The stresses are considerable as the ruling class spreads the social wage across an increased population; the effects are not only economic but are also expressed in cultural clashes such as in Cologne at the 2015 year-end. This is all grist to the mill of right wing governments such as the Law and Justice Party in Poland and Hungary’s Fidesz. (Long concerned about Fidesz, it has only taken a few weeks experience of the new Polish government for the European Commission to consider monitoring the Polish government to assess if its policies pose “systemic threats” to the rule of law.)

The migrations have generated huge problems for the EU rulers and forced them to take extraordinary and near-panicked responses. After 20 years of free movement in the Shengen Area the fences are going up again; country after country is adding controls to handle the flows of people and deal with their settlement. And after holding up Turkey’s application for accession to the EU for decades, in only a few days the EU concocted a deal promising to accelerate accession talks, open the Shengen area to Turkish citizens, take up to 72,000 refugees from Turkish camps, and give €6 billion cash in return for Turkey taking back from Greece those migrants who fail to get asylum. Clearly, this is not ‘business as usual’.

Furthermore, the migrations have provided cover for jihadists to return to Europe from the war zones. The carnage in Paris and Brussels will generate more tension around the migrations. It will surely be used in the UK where the Brexit referendum is scheduled for June where parties make poisonous cocktails of issues: refugees and terrorists, economic migrancy and so-called benefit tourism, racism and separatism. Separatist tendencies in the UK are strengthening, although it’s not clear just how much. Attention over the past couple of years concentrated on a possible Scottish exit from the UK, but there are indications of stronger support for Brexit. It’s not just the right wing of the Conservative Party but also the UK Independence Party and parts of the Labour Party (which historically has blown hot and cold on Europe) that want to leave the EU. Since the referendum will be a popular vote, parliamentary party results do not give an indicator. European governments are finally waking up to the fact that a British exit is a real possibility.

Coupling the Eurozone economic problems, the weaknesses of the Mediterranean countries and various separatist tendencies such as in the UK, Spain and Greece to the migration issue it is clear that Europe is under great stress at all levels. Some bourgeois commentators forecast the end of the EU; this is premature although the ruling class is clearly feeling instability grow in the face of all these events.

The Politics of Alienation

One striking expression of alienation today is in the circus that is the current American presidential primaries season.

Early expectations for the presidential election were a clash between the Bush and Clinton dynasties representing the Republican and Democratic Parties. Having got majorities in the Senate and the House, the Republican Party thought that with the right candidate they could complete the triad with the Presidency too and the funds gathered indicated that Jeb Bush had a good chance for the nomination. In the Democratic camp, Clinton looked to have the most suitable credentials: a Senator, Secretary of State and – a woman. The trend towards banality in previous campaigns looked set to continue. However, the major surprise has been the performances of Trump and Sanders: on the Republican side a billionaire who doesn’t trust the politicians he used to buy, wants Mexico to pay for a wall to be built along the border and to ban Muslims entering the US; and from the Democrats an elderly senator who describes himself as a democratic socialist (a word that would have previously anathematized any politician using it) and who offers free education and a hike to the minimum wage. Both these candidates have reached outside the party structures directly to a population that has suffered years of austerity and increasing precariousness in livelihood and is more and more turned off by jaded political institutions and processes which are imposed by force, money and lies. Their populist rhetoric and the strength of its resonance in their respective constituencies has confounded both party establishments, as it did in last year’s election of Corbyn as leader of the Labour Party in England.

There is an enormous well of anxiety, anger and cynicism in the population and the political castes in many Western countries are tapping into it for their own benefit.The non-stop global media coverage showing the brutality of IS, the carnage in the Middle East, the flood of refugees into Europe, the terrorist attacks are then used by politicians and the media to heighten anxiety and disorientation, sustaining their mystifications.In the absence of struggle the cycle continues.Perversely, it appears that the worse capitalism gets the more ideological weapons the bourgeoisie finds to use against the population.

Social and Class Struggles

In the face of worsening conditions, social struggles are triggered and respond to different local conditions; there is no longer a clearly identifiable general tendency expressed across the world as there was in the enormous response to the consequences of the global financial crisis of 2008. The social movements following that crisis had many faces: the Arab Spring, Greek demonstrations, the indignados movements in Spain and Portugal, the Occupy movement which had nearly 1,000 demonstrations in nearly 100 countries (over 600 in the US), as well as many specific reactions to issues such as cuts in education support. The response of the various bourgeoisies ranged from temporarily giving concessions to brutal suppression. The period did show the importance of a global phenomenon to provide focus for resistance to the austerity the ruling class almost universally imposed.

Struggles have become more heterogeneous, more disparate. In the US, ‘Black Lives Matter’ has grown in reaction to long-term police brutality.In India, the Dalits maintain an ongoing campaign for more civil rights. Communal strife, a mainstay of the Indian ruling class, has increased and the level of class struggle has diminished considerably over the past several years.

In contrast, social and class struggles have increased hugely in China. It’s difficult to assess the numbers of riots that take place as the various official statistics are likely to have been doctored. Nonetheless the numbers of protest events against state bureaucrats, corruption and forcible removal of people to make way for new projects are certainly to be measured in the tens of thousands annually. The importance of dealing with social unrest is reflected in the fact that the Chinese budget for spending on internal security exceeds its military expenditure.

And more ominously for the ruling class, the struggles of Chinese workers on their own class terrain have been increasing over the past several years, doubling between 2014 and 2015. To this must be factored in shutdowns and contractions in various parts of the Chinese economy.Thousands of small coal mines are being closed in an accelerated programme which will displace one million workers (added to the nearly 900,000 miners that have been laid off since 2013). Steel plants are being closed in the face of a world steel glut; already, dumping on the world market in past months has led to the eradication of the UK steel industry. Shipyards will be idle because of shipping overcapacity. The ruling class is bracing itself for more reaction from the workers.

The Lunar New Year eruption in Hong Kong over the police mistreatment of the fish ball street-sellers highlights the underlying social tension.Massive confrontations with the state can appear to come out of nowhere. This is at a time when a global economic downturn is expected and the economic issues are presenting themselves starkly in shutdowns and unemployment for huge numbers of workers even provoking strikes and demonstrations while the ceremonial National People’s Congress was in session in Beijing.

The global dispersion of the collective worker can make it difficult for proletarians to see in class terms what capitalism is doing to them, so the experience of the Chinese workers will help to highlight the full extent of capitalist exploitation and – hopefully – emphasize the power of collective action. In a world so full of violence and mayhem serving only the interests of the bourgeoisie, the potential for working class struggle in China is welcome but it must not be viewed with any triumphalism.

Clearly the immiseration across the planet is by itself insufficient to provoke revolutionary action. Of the consciousness necessary to accompany class action we have seen only hints. But the future convergence of several factors – concerning economic hardship, the enhanced threat of state violence and the willingness of workers to act collectively in their class defence – may well provide opportunity to start to breach our containment within capitalist social relations.


March 25, 2016

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