Statement by the International Secretariat of the CWI
21 April 2020
The devastating consequences of the covid-19 pandemic and the unprecedented economic global capitalist crisis which it triggered, has continued to ravage all continents. It could cause the onset of one of the deepest recessions, with elements of depression, in the history of capitalism. The unprecedented collapse of oil prices, which in the US turned negative for the first time, is a measure of the fall in production that has taken place. There is no market for oil and producers were driven to pay companies to take oil due to the lack of storage. It is an extreme case of over-production when there was no or little demand. This will have catastrophic consequences for oil-producing countries in the Middle East, Venezuela and others. Capitalism was facing the threat of a recession/slump before the onset of the covid-19 pandemic, as the “recovery” following the 2007/8 crash was ending.
The consequences of the current crisis in the neo-colonial world of Asia, Africa and Latin America are provoking massive political and social upheavals and, in some countries and regions, a collapse into barbarism. This crisis has also struck at the heart of the major imperialist countries of the US, Europe, Japan and also China. As we have explained in our previous statements, the crisis has exposed the deep and bitter class divisions present in capitalist society. These are set to intensify in the coming weeks and months, provoking bitter class battles. Revolutions and counter-revolutions will also emerge in the period ahead. On the other side of the pandemic, a new era of geopolitical relations and balance of power is emerging.
A historic weakening of US imperialism following recent decline, and a strengthening of China, are set to shape a new balance in world relations. US imperialism emerged from the 1930s depression in a far -strengthened position. It will emerge from this crisis weakened and increasingly challenged by China. A new period of international relations is posed. This will not only be between the US and China but the EU and also regional powers in Asia, Africa and Latin America.
The pandemic has seen US imperialism continue its embargo against Iran, with devastating consequences, and also against Cuba. The US administration has even threatened sanctions against any country that accept medical aid from Cuba such is the viciousness of the Trump dynasty! Under the guise of fighting drug traffickers, the US also dispatched a large naval fleet to the coast of Venezuela to support those attempting the overthrow of the Maduro regime.
The depth of the crisis has now been starkly revealed in recent economic forecasts. Even the IMF has slashed its growth forecasts. It predicts contractions in the main capitalist economies not seen since the great depression of the 1930s. A former global expansion of 3% has now been replaced with an expected shrinkage of the global economy by 3%. On average the main capitalist economies are now expected to decrease by 6.1%. The revised figures from China paint a disastrous picture, where the economy has shrunk by 6.8% in the first quarter of this year. This follows a series of declining growth in 2019, which saw the economy expand at its lowest rate for 30 years. Even with a limited recovery by the end of 2020, China is poised for possibly the slowest rate of expansion since the Cultural Revolution in the 1960s. The prospects of such a collapse in the world economy have already had devastating consequences. The CWI explained that prior to this crisis a new economic storm was brewing. The IMF and other capitalist institutions also recognised there was “trouble ahead”. Yet, as the British economist, Larry Elliot, pointed out, it did not come from where they expected. He drew the analogy with British imperialism defending its colony in Singapore in 1941. Expecting an attack from the sea, all of its defences were concentrated on the big guns at its naval base. In fact, the attack came from behind, with a land attack down the Malay Peninsula.
Crisis in the Heart of US Imperialism
Now one of most critical effects of the crisis is in the heart of US imperialism; the economic, social and political crisis unfolding there are a historic turning point for the most powerful of the imperialist nations. There is a certain historic parallel with the demise of British imperialism following the First World War. Britain imperialism emerged decisively weakened from the 1914-18 conflict, confronting massive class battles and the threat of revolution, at home and abroad.
US society is entering a new era of class polarisation and battles which will see the emergence of the powerful working class acting as a class for itself. This will have a decisive impact on the world situation. As has already been seen under the Trump presidency, massive political polarisation will be a part of this process and include elements of a civil war, which is a feature of US history, in which the class struggle is fought out in the sharpest manner.
This crisis has been compounded by the ravings and unstable reaction of Tump and his administration to the pandemic. Trump’s criminal actions, driven by his thirst to win re-election and keep business going, are responsible for the mass deaths that are taking place there. Trump is the first US President to preside over such a slaughter of US citizens on US soil since the 1918 flue pandemic. At the time of writing, there are “officially” over 670,000 confirmed cases of covid-19 infection in the USA, and the horrific deaths of over 39,000 people (15,000 of them in New York, where four workers on the subway die every day from the virus). The Black and Latino communities are particularly badly hit by the virus. The US is now suffering the greatest number of victims of the pandemic. These death rates are driven up in the US by the privatised health, and the lack of an overall decent public health system. The demand for the nationalisation of the private health care and the introduction of a federally-planned, tax-funded health care system, free at the point of use, is a crucial part of a programme of struggle for US workers and socialists.
The ruling class globally needs to be indicted for their criminal lack of action in preparing for this pandemic. They have been repeatedly warned by scientists and others that such a development will, at some point, take place, especially after the SARS virus outbreak in 2002-2003, Avian Flu from 2003-2007, Swine Flu in 2009, Mers virus in 2012, and the Ebola 2013-20016 outbreaks. In the US, alone, more than a dozen reports since the 1990s have warned of the medical supply shortages that would exist in the event of a pandemic, which was inevitable, at some point. As early as 1993, the Clinton administration asked for a review of the public and private sectors regarding dealing with a pandemic. Nothing was put in place.
In this crisis, Trump was compelled to introduce a stimulus package of an unprecedented US$2.3 trillion to stave off an economic collapse. Over 43,000 millionaires will get a “stimulus” averaging US$1.6 million each! Yet even this has not averted a deep recession or depression from setting in. Trump and sections of the capitalist class are now driving to lift the lockdown within a few weeks, at the beginning of May. The callous, cold calculating nature of capitalism was reflected in Trump declaring, “America will be open for business” and with his comment, “The cure can’t be worse than the disease”. Other Republican leaders, like the Lt Governor of Texas Dick Patrick, have been even blunter, declaring: “We cannot sacrifice the country and the economy” in a lockdown, and accepting those most vulnerable, like the old, may perish. Sweden is now paying the price for “remaining open for business”, with a rocketing in the number of deaths of older people.
In Michigan, and elsewhere in the USA, small but significant armed protests by Trump supporters have been demanding the lifting of the lockdown. This is an illustration that the polarised situation in the US can involve elements of a civil war. This and other protests were initiated by right wing groups under the banner of “Operation Gridlock”, and directed against the Democratic governor. The protest was facilitated by the Michigan Conservative Coalition, which co-ordinates pro-Trump activities and is linked to the US Education Secretary and Cabinet member, Betsy Devos. The protests were then followed by Trump tweeting, “Liberty for Michigan” and Virginia and other US states.
These protests appealed to a layer of people who demanded a return to work to get wages to live. Socialists and the workers’ movement need to raise demands for wages to be paid to all workers or an equivalent in a state payment and other measures to protect worker during the lockdown. The protest by medical workers in Colorado against such right-wing mobilisations illustrates how polarised the situation is and how it can escalate. Like the ruling class in other countries, the US ruling class wants the working class back at work and the economy to open up, to try and restore their lost profits.
Capitalism as a system cannot function without this. It is one of the reasons that steps are being taken to ease the lockdown in Austria, Italy, Spain and other European countries, partly in a co-ordinated response by the EU. Hypocritically, the EU has now apologised to Italy for its lack of assistance at the outbreak of the crisis. The anti-EU sentiment, which has grown enormously in Italy, threatens the continuation of the Eurozone, and even the EU, as the Spanish Prime, Minister Pedro Sanchez, warned.
Human Misery Not Seen Since the 1930s
As in other countries, the consequences of the economic recession in the US are having catastrophic consequences. Human misery and suffering are blighting the lives of millions. Scenes worthy of John Steinbeck’s novel, ‘The Grapes of Wrath’, depicting the depression in the 1930s, are being witnessed in 2020. Unemployment has rocketed upwards within a few weeks. In the week up to 16/4/20, the number of workers filing for unemployment benefits rose by 5.2 million! In the last month, 22 million people have applied for unemployment claims. Millions more jobless have not been able to register and are excluded from government statistics. This tsunami of unemployment has wiped out the jobs gained – albeit on low wages and precarious contracts – following the 2007/8 recession! Many commentators now estimate unemployment in the US will peak at around 30% – nearly 49 million. This is higher than the percentage reached at any point in the 1930s depression (In 1934, the official count reached 24.9%).
Added to this, is the tragedy of homelessness, which now officially engulfs over 500,000 Americans and a staggering 98% increase in those using food banks. Organisers estimate a further 17.1 million will need free food in the coming months. In San Antonio, 10,000 people lined up for free food. This foodbank normally distributed 60,000 free meals a week. This has now rocketed to 120,000.
All of this comes on the back of the enormous growth of inequality and rise in poverty which has ripped through US society in recent decades. The New York Times warned of the consequences of this, in an article published on 10 April. The article points out that US GDP has risen by 79% since 1980. Yet the bottom 20% has only seen their income rise by 20%. The top 1%, the ruthless oligarchs, like Jeff Bezos of Amazon, have seen their incomes explode by 420%. Since January 2011, a family in the bottom 90% has effectively given each member of the top 1% US$110,367.15!
These are the social and economic conditions to provoke uprisings and revolutionary movements. It is no wonder that workers at Amazon, as the CWI featured, speak of the need for “revolution”. Other workers, in the course of this crisis, have also taken strike action and other protests to demand steps to protect themselves from the covid-19 virus. Workers at the General Electric company organised protest action, demanding that production is switched to making desperately-needed ventilators. The production of ventilators using alternative techniques, like the 3-D-printed ‘Venturi valve’ or those designed by the Mercedes F1 team, could help resolve the shortages that exist in many countries. An emergency plan of production, with requisitioning of factories under the democratic control of working people, utilising the inventive skills and talents revealed during this crisis, could be organised to resolve such problems. Trump and the other capitalist governments, however, are not capable of or willing to do this.
Trump, Louis XVI and the Czar
The crisis has also intensified the conflicts between different sections of the ruling class and its political apparatus and representatives. The increasingly erratic and unstable Trump is behaving more and more like the royal court of Louis XVI in France, prior to the French Revolution in 1789 or like the Czar in Russia prior to the 1917 revolution. The capitalist class, internationally, is facing this crisis with some of its most dangerous and unreliable politicians at the helm – Trump in the US, Bolsonaro in Brazil, Modi in India, Johnson in Britain and others elsewhere. It reflects that the ruling classes have partially lost control of the political superstructure in some countries which is extremely dangerous for them, especially in a crisis of this magnitude.
Trump has threatened to overrule the states in the USA and decide when the lockdown should be ended. The names of a “Council to re-open America” appeared on Monday April 13th – all were Trump officials, including Trump’s daughter, Ivanka, and her husband, Jared Kushner. None were health officials! At the same time, Andrew Cuomo, the governor of New York State, together with six other northern state governors, agreed to coordinate how and when to ease the lockdowns. California declared it would act as a “nation-state”. Then in a further remarkable twist, Trump threatened to suspend Congress from sitting, so that he could push through some of his appointments. Trump’s ravings prompted Cuomo to react with the comment: “We have a constitution – we don’t have a King!”
The lightning speed, with which events are unfolding, means that deep and rapid changes in the situation will take place. What seemed fanciful yesterday, today seems plausible, only to be forgotten tomorrow. The dramatic paralysis of the US economy, combined with the morbid effects of the virus, and the ineptness of Trump’s handling of matters, now puts a very big question mark over the prospect of him winning a second term in November. It is not excluded that Trump could secure another time at the White House despite losing the popular vote. A combination of “voter suppression” – which is taking thousands off the electoral roll to the benefit of the Republicans – and the undemocratic electoral college that is weighed against the larger, more populated states and cities – could yet allow Trump to steal a “victory”. Socialists need to oppose voter suppression where it takes place and to demand the abolition of the undemocratic Electoral College.
Biden for the Corporate Democrats
At the same time, the most likely Democratic candidate, Joe Biden, has risen in the polls. Biden is the candidate of the corporate Democrats and an open representative of the capitalist class. At this stage, he has won the endorsement of Barack Obama, Elizabeth Warren and now Bernie Sanders, in what they all argue is an attempt to unify all wings of the capitalist Democratic Party against Trump.
The 2020 election campaign will be one of the most polarised election campaigns that have taken place in the US, reflecting the massive social and class divisions which have opened up. These will only deepen in the run-up to the election campaign. Armed protests in Michigan, and elsewhere, demanding an end to the lockdown, initiated by Trump supporters, are a warning of the polarised mood that will develop in the election. Elements of a civil war are likely.
A powerful mood of “lesser-evilism” is certain to develop during the campaign. The understandable desire to defeat Trump will undoubtedly be a powerful mood amongst many workers and young people.
Socialists understand this sentiment and support a struggle to defeat Trump. Yet, at the same time, it is necessary to warn that Biden and the capitalist Democrats will not offer a way forward for the US working class. Biden in power will not take measures to end the rule of the oligarch capitalist class nor defend the interests of workers and their families. Following the election, major upheavals and crisis will emerge whoever is the victor.
Biden’s lacklustre campaign in the primaries and failure to respond in a combative way to Trump’s handling of the covid-19 virus left doubts and hesitations in the minds of many. He is an extremely weak and unreliable candidate. For this reason, the Democratic leadership are enlisting the support of Obama, Warren and, in particular, Sanders, in an effort to boost Biden’s campaign. They hope that Sanders can deliver the youth vote he was able to mobilise. It was not an accident that former Democrat President, Obama, when endorsing Biden, praised Biden’s opponents in the primaries as, “One of the most impressive Democratic fields ever.” He declared Sanders was “an American original” who would be critical to defeating Trump in November. Yet, if this is not sufficient and Biden fails to gain momentum, it is not excluded that another candidate, such as Andrew Cuomo, from New York State, could be drafted in at the Democrat Party convention.
Sander’s Squanders Another Opportunity
Sanders, for the second time, squandered an opportunity to end his collaboration with the Democratic Party and break with it, by taking the necessary steps to form a new party of working people. In 2016, he channelled his supporters to the Democrats and ended up backing Hilary Clinton. In 2020, Sanders repeated the same capitulation. Had he broken from the Democrats, in 2016, and taken the steps necessary to build a new party, it is likely Trump could have been defeated. Even if Sanders had not won the 2016 election, he could have built a powerful new workers’ party that would be in a very strong position today to win mass support during this crisis and defeat Trump.
The CWI consistently argued the need for a new workers’ party in the US. Sanders had the opportunity to help build one but failed to do so. We warned of this danger from the beginning of his campaign. Unlike some on the left, like Socialist Alternative (SA) and Kshama Sawant (a former CWI member, and a sitting councillor in Seattle) and the Democratic Socialists of America (DSA), the CWI did not act simply as cheer-leaders for Sanders. We did not, as SA wrongly did, urge Sanders to continue his primary campaign right through to the Democratic convention and fight for the nomination. The SA dropped their previous criticism that Sanders should, from the outset, run as an independent, and take necessary steps to build a new party and break from the Democrats. Opportunistically, SA continues to uncritically endorse other candidates from the Democratic Party. They are echoing the DSA position of ‘part in, part out’ of the Democrats. Inevitably, this opportunist adaptation of the SA towards Sanders, and SA’s day to day approach of simply uncritically describing DSA members elected to positions as “socialists”, has now resulted in a split in the SA organisation. A layer of former members of SA have collapsed into the DSA. The SA’s failure to consistently argue for an independent workers’ party is not the road which will lead to the building of such a party in the USA, which is so urgently needed, as the current crisis reveals.
Sanders is clearly going to be used by the Biden campaign to try and channel his supporters into backing the Democrats and Biden. This he openly states now. Sanders has even gone so far as to attack as “irresponsible” some of his supporters who declared they will not back Biden, thereby doing the bidding of the Democratic leadership.
A new party of the American working class and youth can only be built on the basis of a struggle, including an electoral challenge to both the existing capitalist parties. Now is the time to strike! Unfortunately, Sanders has lost the opportunity.
Some on the left in the US urge that Sanders supporters should still vote for him in the upcoming primary ballots, to maximise the number of his supporters as delegates to the Democratic convention. Daniel Denvir carried an article on the Jacobin website, “Bernie must retool his campaign organisation, not dismantle it” (11 April 2020). In this piece, Denvir makes the case that the Sanders’ campaign, in essence, should be maintained with a view to pushing the Democratic Party programme to the left, and maintaining some of the procedural changes which were made to marginally reduce the role of the “super delegates” at Democrat party conventions. In other words, the idea of a struggle to do the impossible – transform the Democratic Party. If Sanders’ two failed attempts to secure the party nomination illustrate anything, it is the impossibility of transforming a capitalist party, like the Democrats, into one which will genuinely represent workers and their families.
According to reports by CNN on 8 April 2020, and other news outlets, Obama was in regular contact with Sanders before his withdrawal from the race. The Sanders campaign team has also had meetings with Biden’s teams.
Sanders supporters have started to criticise how the 2020 campaign was run. The national campaign, they argue, was directed by “highly paid mercenary establishment political consultants” some of whom have now gone over to Biden campaign or are looking for other posts with the Democratic Party establishment, which illustrates Sanders’ political approach during the 2020 campaign.
Given the critical situation unfolding in the US, it is not excluded that the Biden campaign will verbally put forward some more radical phraseology. However, if elected, Biden’s administration is certain to take measures to attack the working class and to try to make workers pay for the coronavirus crisis.
A New Workers’ Party and Socialist Programme Needed
These shocks and upheavals place the question of a new party being established by the US working class. Under these conditions, and taking into account the character of US society once such a process begins, it could develop at lightning speed. The trade unions and supporters of the Sanders campaign can play a decisive role in taking the steps to form such a party. This process may not begin at the federal (national) level, especially given the highly bureaucratic and corrupt nature of the majority of the trade union leadership. At state and citywide level, local initiatives can develop involving the trade unions, rank and file workers, and others. If this takes place, it could then develop onto a federal level.
Already the general idea of socialism is present in the US, as an alternative to capitalism. It is necessary to fill out this general sentiment with concrete demands and a programme to defeat capitalism and explain what a democratic socialist alternative is. The emergence of the working class, as a class to change society, is already beginning to emerge. This can develop at high speed as this crisis unfolds. The CWI’s co-thinkers in the USA, the Independent Socialist Group, will intervene in these historical developments to assist workers to draw the conclusions about the need for a party of their own, and the need for a socialist programme to defeat capitalism in the USA, its strongest base.