On This Page:
Coronavirus and Capitalist Contradictions ♦ Why Capitalism Can’t Be Fixed ♦ Masses Need Communism to Prevent New Diseases ♦ Coronavirus, Idealism and Imperialism ♦
Coronavirus and Capitalist Contradictions
The coronavirus is already being blamed for the world-wide economic crisis that is about to explode. Don’t be misled. It’s merely the trigger. The crisis is the inevitable result of contradictions in the capitalist system.
Capitalism cannot work without crisis.
By November 2019, the two leading economies, the USA and China, had produced a huge stockpile of unsold cars, steel, aluminum and other commodities. They were running at only 75% of their productive capacity. That is, a quarter of the capital invested in them was not being used.
No sale, no profits! Capitalist production is all about profits. That’s in trouble. The world’s rate of profit has fallen since the 1970s from around 42% to around 17% today (see box). The bankers and captains who live off our labor are finding it harder and harder to make profits out of manufacturing. They turn to borrowing, juggling accounts and speculating. The London Financial Times (a major business newspaper) estimates that world debt levels now exceed $250 trillion or 320% of what we workers of the world produce every year!
The interest on that $250 trillion debt has to be serviced every month. This eats away at profits even more. It was itself unsustainable even before the coronavirus interrupted fragile markets.
There is now a general crisis of capitalism, the size of which the world has not confronted since the Soviet Revolution (1917) and the Chinese Revolution (1949) – that is, since World Wars I and II.
Crisis is not collapse. Crisis is a period where either capitalism advances or communist revolution advances. It is a period of destruction of capital value.
Destruction by many means
Destruction can be caused by market forces. Imagine an enterprise that only makes $3 million a year in profit from an investment of $100 million. Its rate of profit is a mere 3%. It goes out of business, is devalued and is bought by a rival for $10 million. Now the rate of profit is 30% and the rival’s section of capitalism rises. “One capitalist,” Marx pointed out, “kills many.”
Destruction can be biological, like the coronavirus! As it shuts down economy after economy, the ability to service the $250 trillion debt will end. Banks will collapse.
Destruction is now increasingly by military force, as it was in the years leading up to World Wars I and II. The invasion of Iraq, the bombing of Libya, the sanctions on Venezuela and Iran — all limited or removed rival oil producers from the market. This allowed US shale oil to flood the world markets at the right price. War and military power are essential economic forces.
At each crisis, the US loses geopolitical power to its rival, China. It was the industrial might of China that pulled the world economy out of the 2008 crisis. Now as an economic crisis triggered by the coronavirus pandemic begins to unfold, it is China that leads the world scientifically.
China has dispatched teams of medical experts to help two outbreak hotspots, Iran and Italy. The US has failed to produce a coronavirus test that works
A revolutionary working class
Another economic force could be decisive: the working masses. We are entering a pre-revolutionary period. Cooperation, collectivity, and communism are necessary to defeat the virus attack.
Capitalist relations of production have produced not only a global economic crisis, but a climate crisis and a future of pandemics and plagues. This is an existential crisis. A desperate capitalism will turn to more war and fascism. We must work to win the angry working masses to revolution and communism.
Chinese Poster: Create Marxist Theoretical Troops in the Midst of Battle
Why Capitalism Can’t Be Fixed
The capitalist system is a roller coaster. It moves from economic crisis to boom to crisis to war. Marx worked out how the laws of motion of capitalism must produce these crises.
The main idea is that only workers’ labor creates value. When bosses hire workers to make something, they have to provide raw materials, machines, and energy. In order to make a profit, however, the business must produce new value. This new value is created by the work workers do. Some of that new value is returned to workers as their wages. The rest is kept by the boss. This new value is called “surplus value” and it’s where the profits come from.
Wages Rob Workers Every Day
Profits come out of scamming the worker. The workers’ wages don’t come from what they produce. It only comes from the number of hours they work. Say a chair made from wood and leather takes 8 hours’ labor to make, and sells for $400. Say the wood and leather cost $100. The workers don’t get $300 in wages. If the workers’ wage is $15 per hour, the workers get 15 times 8 or $120, leaving the boss with $180 in surplus value.
Competition forces capitalists to produce as cheaply as possible. This often leads the boss to replace some workers with machinery. The problem with this is that surplus value only comes from the work workers do. When bosses buy a new machine that replaces workers, they must invest more money to obtain less surplus value. Hence, their rate of profit falls.
Revolution Will Abolish Wages and Crisis
Capitalists have some ways to deal with this situation. They can lower workers’ wages. They can get their government to lower their taxes. They can move production to a low-wage country, and so on. But the basic problem, lower profit rates, remains. It eventually leads to crises.
When the rate of profit is low, capitalists don’t make investments in the real economy which creates services, products and jobs. Capitalists will then try to invest abroad then capital, or hoard their cash, or invest in financial assets like stocks and bonds, what Marx called “fictitious capital.” In any case, profits and new production dry up and a crisis results.
Right now, with massive unemployment and the stock market in free-fall, the COVID-19 crisis is certain to result in an economic crisis, which was already overdue 12 years after the 2008 crisis.
Crises can only overcome the profit rate problem by destroying capital. This happens when the stock market falls, or when capital is physically destroyed in an imperialist war or by rust and lack of use in a depression. Because the tendency for the rate of profit to fall is a law of motion of the capitalist system, there is no way out of this cycle but communist revolution.
Masses Need Communism to Prevent and Stop Life-Threatening New Diseases
In March 2019, four Chinese scientists from Wuhan and Beijing published a scientific paper called “Bat Coronaviruses in China.” They reviewed three recent large epidemics caused by coronaviruses (CoVs). These were: Severe Acute Respiratory Syndrome (SARS, 2003) and Middle East Respiratory Syndrome (MERS, 2012), in humans, and Swine Acute Diarrhea Syndrome (SADS, 2018), in pigs.
The paper summarized the evidence that these viruses originated in bats, and were transmitted to people, camels and pigs. Many thousands of people died in these epidemics
Ten months before the first reported COVID-19 cases, the paper warned that it is “highly likely” that future coronavirus outbreaks will originate from bats, and that this would occur in China. It reported: “It is generally believed that bat-born CoVs will re-emerge to cause the next disease outbreak.”
There are bats almost everywhere in the world. MERS began in Saudi Arabia. Ebola may have come from bats in DR Congo.
Viruses also jump from other animals besides bats. The H1N1 flu virus came from birds. That doesn’t mean that bats and birds are to blame.
Capitalist activities create conditions that encourage animal diseases to pass to humans.
Capitalism is mainly responsible for the destruction of wild animal habitat. Capitalist agribusiness includes huge livestock farms that produce huge waste, attract wild animals, and increase output with antibiotics. People in rural areas often have to hunt animals for food, another source of risk.
The spread of life-threatening new diseases is a certainty. The masses not only need good medical care and health education, but constant large-scale efforts to prevent and stop epidemics.
Obviously, capitalism does not do this. Capitalists’ priorities are always making more profits and preparing to fight imperialist wars with other capitalists. Epidemics are only important to them when they threaten profits.
Now strong competition among capitalists and the falling rate of profit force them to cut back on all kinds of health care, including finding and stopping epidemics before they kill millions.
We cannot live under this system. The time to fight for communism is now.
NOTE: The paper is in English and free to download at https://www.mdpi.com/1999-4915/11/3/210
Coronavirus, Idealism and Imperialism
The COVID-19 crisis exposes the possibility of communist relations emerging as existing capitalist relations of production are seriously undermined.
When the Corona virus first spread in China, US bosses engaged in China-bashing. They accused the Chinese government of suppressing information, restricting movement and generally mishandling the crisis. The unsubtle message was: “China’s loss, America’s gain.”
A scientific, Materialist analysis starts with the understanding that everything changes. In contrast, the US bosses promoted an unscientific Idealist outlook that nothing would change. Their response assumed that Coronavirus was a “foreign” virus and that US capitalism will remain intact.
The Chinese imperialists have already emerged stronger from the crisis. They have been able to reopen factories while the US and Europe are likely to remain locked down.
State-capitalist China can organize their entire society, which traditional free-market economies can’t. Chinese workers, however, are still wage slaves and are experiencing hardships and possible loss of jobs. They, too, need real communist revolution!
Western capitalists’ inability to organize as effectively as the Chinese capitalists will intensify and sharpen the inter-imperialist contradictions. COVID-19 has allowed China to rehearse and showpiece its war-preparedness. Meanwhile, the Trumps and Bolsonaros are mired in their anti-scientific idealism.
The possibilities of communist class struggle are endless. The key is to encourage collectives and comrades to use Red Flag as the most powerful weapon in the hands of the international working class.
Comrades in South Africa can confront bosses who are requiring workers to bring their own hand sanitizers. In India, mass outrage against fascist citizenship laws continues. In some places it has intensified. Energetic young comrades are spreading Red Flag and giving support, moral and financial, to the garment worker comrades.
Communist society will be organized around scientific knowledge. The working masses, trained in dialectical materialism, will quickly grasp the science of how viruses spread and how to end that.
Science and communist relations will bury Corona-like situations in no time. However, now it is time for us to organize the masses to bury capitalism. Let’s make a concerted effort to recruit new members to the Party.
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