Unleashing the barbarism of war in Ukraine means that the whole world is threatened with its collateral "damage", in particular in the growth of poverty worldwide and through the mounting attacks on the living standards of the working class: increased exploitation, inflated prices and widespread unemployment.
In addition to the threats of possible nuclear strikes by Russia and the risk of radioactive gases escaping from Ukrainian nuclear power plants damaged by the fighting, measures are being taken or planned by a numerous countries in order to bring the Russian economy to its knees, which carries the risk of destabilising the world economy. Moreover, a tragic illustration of the current escalation of war, the notable tendency to increase military budgets (Germany has suddenly decided to double its budget), will constitute an additional factor in weakening the economies of the countries involved.
Towards a new global economic depression and renewed wars
The retaliation with economic sanctions against Russia is going to lead to shortages of raw materials in a large number of European countries and the loss of markets in Russia for some of them. The prices of raw materials will keep rising for a long time and, as a result, so will the prices of many other goods. The recession will affect the whole world, bringing with it widespread poverty and an increased exploitation of the working class.
This is no exaggeration, as is shown by the statements of German experts reassuring a "well-informed public" anxious to know what the future holds while also protecting the best interests of the bourgeoisie: "We are talking about a serious economic crisis in Germany and hence in Europe". "Business collapses and unemployment" would be on the horizon for a long time: "We are not talking about three days or three weeks", but rather "three years". In this context, high energy prices sustained at a historic level would have consequences far beyond Germany and Europe and would affect the poor countries most of all. Ultimately, such a rise in energy prices could, it was said yesterday, "lead to the collapse of entire states in Asia, Africa and South America."
The scale and the depth of the measures taken against Russia, despite their undeniable severity, do not in themselves explain the economic tsunami that will hit the world. The current level of the decline of the world economy, which is the product of a long process of a worsening of the global crisis of capitalism, must be taken into account. But it is on this question that the "experts" chose to remain silent, so as not to have to admit that the cause of the decline of world capitalism lies in its historical and insurmountable crisis, just as they are careful not to identify this war, like all those that have occurred since the First World War, as a product of decadent capitalism. Nor do they mention certain consequences of a new plunge of the economy into crisis and the accentuation of the trade war that is inseparable from it: a new worsening of imperialist tensions and a new headlong rush into armed conflict. Following a similar defence of capitalism, some are worried about the very likely consequences of a severe shortage of basic foodstuffs, those produced in Ukraine previously, together with the resulting social unrest in a number of countries, without any obvious concern for the suffering of the starving populations.
A global economy overwhelmed by the accumulation of the contradictions of capitalism
The Covid pandemic had already exposed the growing vulnerability of the economy to the convergence of a number of unique factors in the period of capitalism's life since the collapse of the Eastern bloc and the subsequent dissolution of both blocs.
In fact an increasingly short-term vision has led capitalism to sacrifice a certain number of imperative necessities for any system of exploitation - such as maintaining the health of those it exploits - to the demands of the crisis and of global economic competition. Thus, capitalism has done nothing to prevent the outbreak of the Covid-19 pandemic, which is itself a pure social product given the way it has been transmitted from animals to humans and spread across the globe, even though scientists had warned of these dangers. Moreover, the deterioration of the health care systems which has taken place over the last 30 years has contributed to making the pandemic much more deadly. In the same way, the extent of the disaster and its repercussions on the economy have been further fuelled by the exacerbation of the "every man for himself" attitude at all levels of society (a characteristic of the current phase of decomposition of capitalism), thus aggravating the classic manifestations of competition and giving rise to incredible episodes such as the war for masks, respirators, vaccines, etc., not only between countries, but also between state and private services within the same country. Millions of people have died around the world, and the partial paralysis of economic activity and its disorganisation led to the worst depression since the Second World War in 2020.
By affecting the worldwide economy, the pandemic would also reveal new problems for capitalist production, such as the increased vulnerability of supply chains to various factors. Indeed, it only takes one link in the chain to be defective or inoperable due to disease, political instability or climatic disasters, for the final product to suffer a delay, sometimes a very significant one that is inconsistent with the requirements of the market. Thus, in some countries, a considerable number of cars could not be put on the market because they were immobilised on the assembly lines waiting for missing parts, in particular those delivered by Russia. Capitalism is thus confronted with the boomerang effect of the excessive "globalisation" of the economy that the bourgeoisie had progressively developed from the 1980s onwards, the aim being to improve the profitability of capital through the outsourcing of production and the employment of a much cheaper workforce.
Moreover, capitalism is increasingly confronted with disasters resulting from the effects of global warming (huge fires, rivers that violently burst their banks, extensive floods...) which, in an increasingly significant way, affect not only agricultural production but production as a whole. Capitalism is thus paying the price for the relentless exploitation and destruction of nature since 1945 (the impact of which became more widely perceptible from the 1970s onwards) through the heightened competition between the various capitals in the search for new and increasingly limited sources of profit. The picture we have just sketched is not a recent discovery, but the result of more than a hundred years of the decadence of capitalism, initiated by the First World War, during which this system had to deal repeatedly with the effects of the crisis of overproduction, which lies at the heart of all the contradictions of capitalism. This crisis was at the origin of all the recessions of this period: first the Great Depression of the 1930s and then, after a semblance of economic recovery during the 1950s and 1960s, which became known as the "Post war boom", the open crisis which appeared again at the end of the 1960s. Each of its expressions resulted in a more severe recession than the previous one: 1967, 1970, 1975, 1982, 1991, 2001, 2009. Each time, the economic system had to be revived by a resort to debt which, in an ever-increasing proportion, would only be repaid by resorting to new debt, and so on... So that each new open manifestation of the crisis is at the same time more devastating, while the means used to deal with it, debt, constitutes a growing threat to economic stability.
The slowdown in growth ten years after the financial crash of 2008 required a further boost to debt, while the fall in production in 2020 that was intended, as we have seen, to support the economy in the face of a set of "new" factors (pandemic, global warming, vulnerability of supply chains, etc.), contributed to a new record high in world debt, tending to disconnect it even more from the real economy (it jumped to 256% of the value of world GDP). This situation is not insignificant. It is a factor in the devaluation of currencies and therefore in the development of inflation. A long-term price explosion contains the risk of social unrest of various kinds (inter-classist movements and class struggle) and constitutes an impediment to world trade. This is why the bourgeoisie will increasingly be forced to perform a balancing act – which, although familiar to it, is becoming more and more perilous - in order to respond to two conflicting requirements:
- Raising interest rates to curb soaring inflation, which has the consequence of reducing the flow of credit;
- Sustaining an economy that cannot function without permanent injections of credit.
And this in a context tending towards economic stagnation combined with high inflation.
Moreover, such a situation is conducive to the bursting of speculative bubbles that can destabilise global business and trade (as in the real estate sector in the United States in 2008 and in China in 2021).
The lies of the bourgeoisie
Faced with each and every catastrophe in the world, whether it be war or the expressions of the economic crisis, the bourgeoisie always provides a panoply of spurious and diverse explanations which all have in common the fact that they place no blame on capitalism for the calamities plaguing humanity.
In 1973 (a year that was only a moment in the deepening of the open crisis that has since become more or less permanent) the development of unemployment and inflation was explained by the rise in the price of oil. However, the rise in oil prices is a by-product of capitalist trade and not of something that is external to this system .
The current situation is a new illustration of this rule. The war in Ukraine is blamed on authoritarian Russia and not on crisis ridden capitalism, as if Russia were not an integral part of world capitalism.
Faced with the prospects of a considerable worsening of the economic crisis, the bourgeoisie is preparing the ground to make the proletariat feel it should accept the terrible sacrifices that will be imposed on it, presenting them as the necessary consequence of the retaliatory measures against Russia. It has this well-prepared message: "the population can choose to turn down the heating or to reduce what it eats in solidarity with the Ukrainian people, because this is the price of the essential task of weakening Russia".
Since 1914, the working class has been through hell: either as the cannon fodder in two world wars and in the incessant and deadly regional conflicts; or as the victim of mass unemployment during the Great Depression of the 1930s; or being forced to roll up its sleeves to rebuild countries and economies ravaged by two world wars; or being thrown into the precariousness and poverty with each new recession since the return of the world economic crisis at the end of the 1960s.
With a new descent into economic crisis, and faced with the ever-growing threat of war, it would be a total disaster if the working class listened to the bourgeoisie's demands for sacrifice. Quite the contrary, it must profit from the contradictions of capitalism that are expressed by the war and the economic attacks so it can push forward the class struggle, consciously developing the perspective of overthrowing capitalism.
Silvio (March 26, 2022)
 "Habeck: Examining ways to moderate energy prices", Sueddeutsche (8 March 2022)
 "U.S. puts an oil embargo on the agenda", Frankfurter Allgemeine Zeitung (8 March 2022).
 "Resolution on the international situation ", International Review no. 63 (June 1990).
 Read our article, "The rise in oil prices: an effect not the cause of the crisis" , International Review no. 19