report on the economic crisis for the 24th congress of the ICC

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report on the economic crisis for the 24th congress of the ICC
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The Report on the economic crisis for the ICC's 24th Congress makes for sober and grim reading. As well as the fundamental elements and contradictions driving capitalism (and the world) into the abyss there is now a further twist with the effects of decomposition directly affecting the capitalist economy showing again how central this issue is to the perspectives of capital and what this means for the working class. Following the Report, one of the consequences will be no "peace dividend" or any "decomposition dividend" now that world war is, for a time at least, off the agenda. That is war will spread and the capitalist war economy will intensify.

I want to state my general agreement with this text but I want to look at one specific and very important area for the economy: what the ICC calls the "war economy". This can be something of a diffuse term meaning different things or is presented as specific to some areas and while, as the Report says predictions are dodgy in this context, I want to point to the overall centrality of the war economy above all else in the unfolding of capitalism's crisis.

The Italian Communist Left (1926-45, see chapter 6 of the ICC's book on the subject) became very confused over the issue of war and the war economy as one might expect but nevertheless some elements of the Communist Left were, in continuity with Rosa Luxemburg and the Bolsheviks, very clear on what the issue meant for capitalism and the working class. For Mitchell and the Belgium Fraction the war of 1914 heralded "the decline, the decomposition of capitalism" ('The Problem of War', January 1936); colonial wars were over and war no longer represented the 'necessary progression' of capitalism but its general decadence brought about by "the revolt of the productive forces against their private appropriation" on the basis of overproduction, unemployment and a slow-down in accumulation ... and the continuous fall in the rate of profit" (Bilan, no 11). The conquering of new markets and the division of the world completed the domination of capitalism over the globe and the relative exhaustion of these outlets meant that "inter-imperialist competition (is) deprived of any way out (and) moved towards imperialist war" and this would become a permanent feature of capitalism - though some "recovery" after war wasn't ruled out. But, fundamentally, militarism and war was now a permanent and central feature of capitalism summed up in the communist slogan of "War or Revolution".

In 1936, as economic activity grew in every major country based on preparation for war (military spending was 3 times higher than 1913) the question was raised in the CL about the possibility that war production could be a way out for capital. Could armaments productions and strictly localised wars avoiding world war provide a steady outlet for capital replacing extra capitalist markets? Mitchell argued that economic war always led to military war and the result of that is the congealing of capital blocking production and re-investment. War production as an effective outlet, one of the strange views of Vercesi from the Italian Communist Left, would necessitate juggling all the elements precisely in order to avoid world war was no way out globally for the crisis of capitalism. This was the idea of a sort of super-imperialism that controlled everything sufficiently well to produce just enough armaments to maintain "locked-in" localised conflicts providing capitalism with productive outlets in which major sectors of the working class, of the heartlands presumably,  could be pacified by the reforms of continuous increases in wages and proletarian living conditions.

For Mitchell state capitalism was now a "world-wide tendency" as was the "manipulation of the weapon of credit" and both were intricately linked to the question of militarism and war, i.e., the war economy (Bilan no. 24, Oct/Nov 1935). The flight into debt was already becoming a poor and more dangerous substitute for extra-capitalist markets and, against Vercesi's position, meant no improvements for the working class and no end to the latter's antagonism to capital; on the contrary both state capitalism and its war economy epitomised and sharpened that antagonism.

"Militarism and war", says point 3 of the 'Orientation Text on Militarism and Decomposition' (IR 64, first quarter 1991), "... the central manifestations of capitalism's entry into its decadent period"... "has necessarily led to the aggravation of military tensions, the constitution of ever-more imposing arsenals and the growing subjection of the whole of economic and social life to the imperatives of the military sphere". This is a bold statement on the centrality of the war economy to the crisis of capitalism and rather than any sort of reduction in military spending, any "peace dividend" or any sort of let-up in the intensity of imperialism coming out of the collapse of the bloc structures from decomposition, the last thirty years have only given further weight to "the growing subjection of the whole of economic and social life to the imperatives of the military sphere" as a major expression of the self-destructive nature of capitalism. Instead of a "peace dividend", instead of any indication that capitalism remains a healthy economic system capable of emerging from its decay, its decomposition means that its wars and its militarism will not attenuate but become ever-more irrational, chaotic, destructive and widespread. The decomposition of imperialism as we are seeing it expressed today is a significant development in capitalism's irreversible downward slide.

In the Report on the Economic Crisis, the question of armaments production is raised in relation to the war economy. There is absolutely no question of any tendency for this type of production to "scaled-back", reduced and so on. In fact it's about to go stratospheric with a whole range of initiatives from the major powers to militarise everything from the Arctic to outer-space. The sort of military programmes that the bourgeoisie are pricing and talking about now will increase by (xy) as they develop. The bourgeoisie have become adept at hiding and minimising military expenditure hiving it off into different sectors of the economy, obscuring it here, downplaying it there or by simply putting it in "civilian" records. The official statistics for direct military spending are an absolute minimum that vastly underestimates its real scope and depth.

The war economy, as the text on 'Militarism and Decomposition" unequivocally states above, increasingly dominates the whole of society and social life making the question much deeper and more widespread than that of direct military production, the maintenance of armies and so on. There's the question of what's called "soft power" within imperialism which on the face of it appears nothing to do with militarism but which is an absolutely necessary adjunct to it. Loans and credits are an extensive part of the soft power used by the larger imperialisms to gain sway over the smaller showing how debt overall has replaced the military conquest of new markets of the "colonising period" of capitalism. State capitalism is an essential factor in this and it's hardly separable from the war economy. NGO's, "aid" and health are part of imperialism as we've seen in the "vaccine wars", along with other responses to the Covid-19 pandemic and national health systems that have arisen from and maintained from the very needs of the war economy.

The relationship of the world-wide drugs economy to militarism and war is there for all to see, developing and increasing over decades. Similarly, the relationship between the war economy and environmental and climatic destruction is evident.

It's been known up to a couple of years ago that the Peoples Republic of China, which lays out vast amounts on military spending, has been spending more on internal repression. Internal repression is an essential part of the war economy and it's not just in dictatorships but also the democracies where vast networks of internal repression are growing - an increasing parasitic sector: police forces, border patrols, surveillance, prisons and "justice systems" are part of the war economy of democracies and dictatorships alike. The same can be said about the forces of "soft repression", particularly in the democracies ", where their universities (education systems generally) and research and development are often directly linked to needs of the war economy; the political and trade union structures of the state similarly.

The necessities for capital, even more so in these times and the future they point to, remain the extraction of the maximum amount of surplus value from the working class - giving the latter the opportunity to begin to strike back. But more and more of this productive capacity is given over, subordinated to, the needs of the parasitic needs of the war economy. This means the destruction of capital rather than its enlargement, the "congealing" of capital as Mitchell calls it above. The Lord and Master of the war economy, imperialism, is visibly in a state of decomposition itself, meaning it will demand further and greater tributes from production in order to feed its dynamics in the direction demanded by it. The bourgeoisie will have less and less control over this process.

From the beginnings of the discussion on decomposition the ICC has insisted on (sometimes not enough it says elsewhere) the fact that the collapse of the Eastern Bloc wasn't an event that was specific to this bloc - though its specificities, rigidity, bureaucracy, inefficiency, etc., contributed to it, but was a phenomenon that affected the whole of global imperialism.  We saw this immediately in the disintegration of the "Western alliance" and this dynamic has continued to the point today that the ICC can write in its current article on Afghanistan that the decline of US leadership has reached a point where it "has become the main vector of the chaos and instability which marks the phase of capitalist decomposition". Just as there's no "peace dividend" from the particular event of the collapse of the Soviet Union, so the current and future effects of capitalist decomposition in relation to the weakening of the United States will mean an acceleration and deepening of the war economy and wars globally.

A welcome contribution

The documents from our Congresses are among the most important outputs in the life of the ICC. They pull together all the disparate aspects of our general theoretical framework, refine them and synthesise them into a framework that analyses the world situation, with the aim of arming the organisation (and the wider working class) in its understanding of the life of capitalism.

They are the clearest expression of the organisation's militant purpose. We are not simply engaging in idle speculation or academic analyses. We aim to understand the world in order to change it - even if our capacity for the latter is somewhat limited at present!

In this context, we welcome Baboon's very serious contribution, taking position on the Report on the Economic Crisis from our most recent Congress, and also his effort to expand and elaborate on the question of the war economy.

We would encourage other comrades to respond and tell us what they think of the Report. Are our analyses correct? Have we correctly understood the "line of march" for capitalist society in the coming period? Does the report provide a useful framework for understanding the current situation of the world capitalist economy? And what areas need further elaboration and deeper reflection?

The report on the crisis, is not the only document we have published from our Congress. The reports on the class struggle is also available as is the report on the pandemic (which Baboon has also posted a response to).

In addition, we have published the Resolution on the International Situation. This document is the final synthesis of the Congress's work, integrating the observations and insights from the various reports to formulate a fuller picture of how all the various historic threads of life in this current moment of history interact. As with the reports, we strongly encourage all comrades to read and respond to it - all contributions are warmly welcome and while we cannot respond to all of them, each and every one is read.