Report on the economic crisis for the 25th ICC Congress

The resolution adopted by the 24th ICC Congress provided a framework to orientate the organisation through the evolving economic crisis.  It stated that: "The scale and importance of the impact of the pandemic, the product of the agony of a system in total decay and which has become completely obsolete, illustrates quite clearly that the phenomenon of capitalist decomposition is now also massively affecting the entire capitalist economy and on a global scale. This irruption of the effects of decomposition in the economic sphere directly affects the evolution of the new phase of crisis that is inaugurating a situation totally unprecedented in the history of capitalism. The effects of decomposition, by profoundly altering the mechanisms of state capitalism put in place to "track" and limit the impact of the crisis until now, add into the situation a factor of instability and fragility, of growing uncertainty." (Point 14)

It also recognised the predominant role of ‘every man for himself’ in relations between nations and the "rush of the most 'responsible' bourgeois factions towards increasingly irrational and chaotic management of the system, and above all the unprecedented advance of 'every man for himself', a tendency, revealing the growing loss of control of its own system by the ruling class" (Point 15). This tendency "By causing increasing chaos in the world economy (with the tendency to the fracturing of supply chains and the splitting up of the world market into regional areas, the strengthening of protectionism and the proliferation of unilateral measures), this totally irrational movement of each nation to save its own economy at the expense of all the others is counterproductive for every national capital and a disaster at the global level, a decisive factor in the decline of the whole world economy." (Point 15)

It underlined that "The consequences of the unbridled destruction of the environment by capitalism in decomposition, the phenomena resulting from climate change and the destruction of biodiversity, (...) are increasingly affecting all economies, with the developed countries at the helm, (...) disrupting the production in the industrial sector and also weakening the productive capacity of agriculture. The global climate crisis and the increasing disruption of the world market for agricultural products threaten the food security of many states."  (Point 17)

On the other hand, if the resolution did not envisage the outbreak of war between nations, it did state that "we cannot exclude the danger of unilateral military flare-ups or even of terrible accidents which would mark a further acceleration of the slide into barbarism. (Point 13)

And it is clear that: "The crisis that has already been unfolding for decades is going to become the most profound of the entire period of decadence, and its historical significance will exceed even the first crisis of this era, the one that began in 1929. After more than 100 years of capitalist decadence, with an economy ravaged by the military sector, weakened by the impact of environmental destruction, profoundly affected in its mechanisms of reproduction by debt and state intervention, plagued by pandemic, suffering increasingly from all the other effects of decomposition, it is an illusion to think that under these conditions there will be any kind of sustainable recovery of the world economy." [1]

So:

- The acceleration of decomposition and the impact of its cumulative effects on the already highly degraded capitalist economy;

- The eruption of war and the world-wide increase of militarism that drastically worsens the situation;

- The growth at all levels of ‘every man for himself’ between nations against the backdrop of increasingly fierce competition between China and the USA for global supremacy;

- The abandonment of a minimum set of rules and cooperation between nations for dealing with the contradictions and convulsions of its system;

- The absence of a locomotive capable of reviving the capitalist economy;

- The perspective of total pauperisation is now on the agenda for the proletariat of the central countries;

all these indicators point to the historical gravity of the current crisis and illustrate the process of "internal disintegration" of world capitalism as proclaimed by the Communist International in 1919.

I. The concatenation of the factors of decomposition

A. The consequences of the war

As a major French industrialist summarised it: "What has been exceptional over the last two years is that crises start but do not stop. There is a real accumulation effect. The covid crisis started in 2020 but it is still there! Since then, we have been confronted with extreme pressures and disruptions in supply chains, a profoundly changed relationship with work, a war at the borders of Europe, the energy crisis and the return of inflation, and finally the realisation of climate change (...) The shocks are adding up. They are sudden and violent. (Les Echos 21-22/10). In a historical situation where the various effects of decomposition combine, intertwine and interact in a devastating whirlwind effect, with global warming and the ecological crisis, the war and its repercussions highlight every man for himself in relations between the states and, in general, the fundamental contradictions of capitalism, that it becomes the central aggravating factor of the economic crisis:

• The destruction of Ukraine: The size of the economy is reduced to 40% of what it was. According to its Prime Minister, "the damage was estimated in the autumn at $350 billion. But these estimates are expected to double by the end of the year, to $700 billion, due to the massive strikes carried out by Moscow against our infrastructure. (...) The current power cuts are expected to represent a loss of between 3% and 9% of GDP[2]. The military effort absorbs 30% of its resources; the shortfall of budget revenues has forced the government to go into debt and to print money.
• Inflation: It causes inflation to soar around the world: 7.2% in advanced countries, 9.8% in emerging countries, 13.8% in the Middle East and Central Asia and 14.4% in sub-Saharan Africa. In the EU the average is 10%, although in some of its countries this figure is higher: Latvia and Lithuania are at 22%, the Netherlands at 17%. The US peaked at 9% in mid-2022, falling to 7.1% by the end of 2022.
• The worsening global food crisis and famines: In pitting two key producers of grain and fertiliser against each other, the war has resulted in “an unprecedented increase in hunger, far worse than any since the Second World War”.[3] "The shock is compounded by other major problems that had already led to higher prices and shortages of goods, including the Covid-19 pandemic, logistical constraints, high energy costs and recent droughts, floods and fires[4]." The world's grain production has fallen: China, following severe flooding in 2021, is facing the worst wheat crop in decades and in India "the crop yields have been significantly lower this year" due to unprecedented heat waves. Rising prices and "threats to food security" have provoked a "wave of food protectionism", with India banning grain exports or with the introduction of quotas (in Argentina, Kazakhstan, Serbia...) to guarantee domestic supplies. While American winter wheat "is in bad shape", France's reserves "are running out" and "the world is beginning to face a wheat shortage".[5]

-          Capitalist anarchy is reaching new heights. The organisation of production and supply chains, exposing each national capital to multiple dependencies without any consequences and with world trade and commerce being able to be carried out without any restrictions until now, has been undermined by the pandemic and then the war, which have changed the situation. Lockdowns in China, sanctions against Russia and the effects of the trade war between the USA and China have led to multiple blockages and interruptions in both production and trade, causing chaos and anarchy; shortages are multiplying in many areas: e.g. computer chips, medical products, raw materials.

-          The development of militarism and arms production. One of the main consequences of war is the boost given by all states to staggering levels of arms expenditure. The burden of military spending (a deadweight for capital) on the national economy, the accelerated increase in arms production, the possible conversion of strategic sectors to military industries, the resulting indebtedness and fall in investment in other sectors of the economy will significantly change economies and world trade.

 

B. What effects have the sanctions had on the Russian economy?

By aiming to 'bleed the world's 8th largest economy dry', Western sanctions against Russia have opened a real 'black hole' in the world economy with as yet unknown consequences. Even if the Russian economy has not yet collapsed or been divided in two (as Biden promised), the Russian economy is being suffocated and driven to ruin, caught in the trap of the ongoing war and strangled by the retaliatory measures imposed by the US. With GDP falling by 11% and inflation at 22%, the economic sanctions have weakened the Russian war effort[6] and caused crippling shortages within industry. The embargo on semi-conductors imposes limits on the production of precision missiles and tanks.[7]

With the withdrawal of foreign manufacturers, the automobile sector has almost completely collapsed by 97%. The sectors of aeronautics (strategic) and air transport (crucial for such a vast country), totally dependent on Western technologies, have been heavily hit.

With hundreds of thousands of Russians fleeing abroad, the Russian economy is suffering a massive loss of labour, particularly in the IT sector with the departure of 100,000 IT specialists.

The assistance offered by China and those who resist Western sanctions (India, Turkey, purchasers of Russian energy) may have provided a temporary respite but it does not compensate for the disappearance of Western markets, far from it. The enforcement from the start of December of the European embargo on Russian oil (a volume equivalent to these purchases) will destroy this 'breath of fresh air'.

While Chinese imports from Russia have risen, exports to Russia have fallen in line with those from the West (due to China's cautious implementation of most Western sanctions[8]). The resilience of the value of the rouble, and even its rise against the dollar, reflects this massive imbalance between the high volume of oil and gas exports and the parallel collapse of imports as a result of the sanctions, and is by no means a sign of strength. The financial sanctions and the freezing of 40-50% of Russian reserves and the ban on its use of the SWIFT system have increasingly affected its practical ability to make foreign payments as well as the credibility of the Russian state's creditworthiness.

Despite the apparent resilience, sanctions are a formidable weapon of war and will have a significant medium-term impact on the Russian economy and because of their 'delayed' effect, the prolongation of the war will be the means by which the US fulfils its objective of 'destroying' the Russian economy.

 

C. The destabilising shock of the war on gas

The seismic shock of the war represents an important 'epochal change', not only affecting individual nations, especially the European ones, but also the situation internationally.

The war is a sinkhole with exorbitant economic costs "(from March to August) Ukraine received 84 billion euros from 40 partner states and EU institutions - the most important allies being the US, EU institutions, the UK, Germany, Canada, Poland, France, Norway, Japan and Italy." "Ukraine could receive up to $30 billion between September and December 2022." The EU plays a central role "in maintaining Ukraine's macro-financial stability" (by providing €10 billion between March and September 2022)[9]. The economic shockwave of war in the world does not impact in the same way, immediately and in the medium term, the main areas of the planet. European capital is suffering the most brutal effect. It is an unprecedented destabilisation of their 'economic model' for these countries.

Due to the economic sanctions imposed by the US on Russia, European firms more involved in Russia than American ones are more directly affected by the severing of economic relations with Russia.

The Russian gas embargo is having a huge impact with knock-on effects in Europe: "The real bombs are falling in Ukraine, but it is as if the EU's industrial infrastructure has also been destroyed. The continent will experience a violent industrial crisis. It will be a terrible shock for public finances and for the middle and poor classes in European countries.[10] As J. Borrell said: "The United States took care of our security. China and Russia provided the basis for our prosperity. That world no longer exists (...) Our prosperity was based on energy from Russia, its gas, which was said to be cheap, stable and risk-free. All this was wrong (...) This will lead to a profound restructuring of our economy."

Each capital is faced with almost insoluble contradictions and dilemmas, having to make drastic and urgent economic and strategic choices to protect its national sovereignty and safeguard its world ranking.

1. Even though growth was already slowing down, the sharp rise in energy prices (the price of gas has multiplied by a factor of 20 compared to 2010) has already lead to a downturn across entire industrial sectors heavily dependent on imported energy where large parts of the business are no longer profitable nor competitive. Some of them have had to reduce production (chemicals, glass, blast furnaces in the steel industry, aluminium, etc.) to offset exorbitant costs, while many bankruptcies are looming because of the dramatic fall in profitability.
2. Faced with the seriousness of the situation, the State intervened massively with the nationalisation of the main energy companies, Uniper in Germany and EDF in France, and the setting up of 'financial or tariff barriers' to protect companies and cushion the blow on companies and individuals.
3. European countries are running a real risk of de-industrialisation and economic downgrading, due to the ongoing difference in energy prices between Europe and the USA and Asia. In this atmosphere of "saving yourself", there is a tendency for those who can to relocate European activities whose survival is threatened to American or Asian areas where energy prices are lower.
4. With the drying up of Russian gas supplies, there is the fear of having to restrict production in the most exposed sectors such as chemicals, metallurgy, wood-paper, or the plastics and rubber industry, or even to interrupt it during the winter, in France for example. In addition, there is the electricity shock: due to under-investment and the dilapidated state of nuclear power stations, electricity cuts could lead to a reduction or even shutdowns in manufacturing as early as next January and to chaos in sectors such as transport, food processing and telecommunications in the world's 5th economic power![11]

The undermining of German capital: It is in Germany in particular where all the contradictions of this unprecedented situation seem concentrated, ready to explode. The end of Russian gas supplies places German capital in a situation of unprecedented strategic and economic fragility: the competitiveness of its entire manufacturing sector is at stake.[12] German capital (and European) runs the risk of having to move from dependence on Russian gas to dependence on American LNG, which the United States is seeking to impose on the European continent, taking over the role that Russia has played until now. The end of multilateralism, from which German capital has benefited more than any other nation (also saving itself from the burden of the military expenditures with the 'peace dividend' from 1989), is affecting more directly its economic power, which is based on exports. Finally, the pressure exerted by the US to force its "allies" to engage in the economic/strategic war with China and to relinquish markets in China, places Germany in a huge dilemma, as it depends highly on the Chinese market. Because of its leading position in the EU, the wavering of German power has repercussions for the whole of Europe, which is marked, to varying degrees, by the same contradictions and dilemmas.

China and the Silk Roads are directly affected. One of the goals of the war alongside the weakening of Russia is to target China. The war thwarts the major objective of the Silk Roads of making Ukraine a gateway into the European market; the chaos cuts China off from one of its major markets. This will mean it having to seek an alternative route via the Middle East.

 

D. The climate crisis

Although the major powers agree that "climate change is a destabilising, even economically disruptive force", the Sharm El Sheikh COP was torn over the question of “who should pay?” Beyond capitalism's congenital inability to hold back the destruction of nature, what sounds the death knell for the great powers' commitment to reducing greenhouse gas emissions is the return and preparation by all states for 'high intensity' warfare. Indeed: "No war without oil. Without oil, it is impossible to wage war (...) To give up the possibility of obtaining abundant and cheap oil is simply to disarm. Transport technologies [that do not require oil, hydrogen and electricity] are totally unsuitable for armies. Battery-powered electric tanks pose so many technical and logistical problems that they must be considered impossible, as must everything else that runs on land (armoured vehicles, artillery, engineering machinery, light off-road vehicles, lorries). The internal combustion engine and its fuel are so efficient and flexible that it would be suicidal to replace them."[13]

Capitalism is condemned to suffer more and more the effects (huge fires, floods, heat waves, droughts, violent weather phenomena...) which affect more and more significantly and penalise more and more heavily the capitalist economy: the climatic factor (already an aspect of the implosion of the Arab countries in the decade of 2010) is in itself instrumental in the collapse of particularly vulnerable countries of the periphery of capitalism. According to UN Secretary General, Antonio Guterres, in Pakistan "climate carnage is on an unprecedented scale"; it has caused damage estimated at 2 ½ times its GDP - a catastrophe that is impossible to overcome economically.[14] Above all, the magnitude of the climate shock is now directly impacting the core countries of capitalism and all their economic activity at every level:

- The costs of climate-related damage in the central countries continue to rise: in the United States alone "the total costs of natural disasters amounted to 3 billion dollars per year in the 1980s. This amount rose to more than 20 billion dollars per year from 2000 to 2010 (...) And from 2011 and 2012 (...) these costs started doubling" and reached "300 billion dollars of material damage in 2018 which corresponds to ¾ of the annual cost of servicing the American debt."

- Productive infrastructure (and its distribution) trade is directly affected, undermining and jeopardising the stability of national economies due to climate change: among other examples, the combination of drought and overuse of water in America, Europe and China is disrupting both nuclear and hydroelectric power generation; disrupting and reducing the flow of goods by river; and "posing a major risk to US agricultural capacity (...) A permanent state of water catastrophe, fraught with conflict and internal migration, is taking hold in the American West." China is threatened by "a new food insecurity induced by the climatic, water and biological fragility of agriculture."

The “increasingly rapid and intense” effects of rising sea levels are posing huge challenges to states. Soil salinisation is sterilising arable land (as in Bangladesh). They threaten both coastal megacities (as in the United States on the East and West coasts and many cities in China) and coastal industries (the oil industry around the Gulf of Mexico; the Shenzhen region of China, at the heart of the country's electronics manufactures, where "the Chinese urban authorities are already starting to evacuate hundreds of thousands of people".

In the last two years, the various effects of decomposition that had already begun to impact the capitalist economy have taken on a new quality with unprecedented interaction on a previously unknown scale which has only become stronger in a kind of infernal "whirlpool" where each catastrophe feeds the virulence of the others: the pandemic has disrupted the world economy; this in turn has aggravated the barbaric war and the environmental crisis. The war and environmental crisis will continue to have a huge impact striking at the heart of the major powers and considerably worsening the economic crisis which forms the backdrop to this catastrophic development.

 

II. A mode of production weakened and undermined by its contradictions

A capitalist system already weakened as a whole by the convulsions resulting from its contradictions and its decomposition has been impacted further by the war.

 

A. Weakened industrial production

The shock wave of the war has hit a very vulnerable economy with certain sectors very weakened since the pandemic: "in 2022, world automobile production will still be lower than in 2019. In China, it will certainly increase by 7%, but in Europe it will remain 25% lower, and in the United States by 11%. The industry has lost volumes and is seeing its costs rise..."[15]

 

B. Inflation

"The fundamental causes of inflation are to be found in the specific conditions of the functioning of the capitalist mode of production in its decadent phase. Indeed, empirical observation allows us to see that inflation is fundamentally a phenomenon of this epoch of capitalism, as well as to see that it manifests itself most acutely during periods of war (1914-18, 1939-45, the Korean War, 1957-58, in France during the Algerian War...), i.e. those where unproductive expenditure is highest. Therefore it is logical to consider that it is on the basis of this specific characteristic of decadence, the considerable share of armaments and more generally of unproductive expenditure in the economy, that we should try to explain the phenomenon of inflation.[16]

A consequence of the increase in the weight of unproductive expenditures, the build-up of a debt burden by the states in their various rescue plans dealing with the pandemic and in the development of the war economy and general rearmament of the capitalist nations, inflation will only increase[17] further because of the needs of each national capital for mounting unproductive expenditures, with:

- the absurd levels of arms spending, subjecting the economy more than ever to the service of war and the unbridled production of the instruments of destruction without any economic rationality;

- the effects of the recourse to printing money to feed the debt to address the contradictions of its system;

- the exorbitant cost of the devastation that decomposition causes to society and the manufacturing infrastructure: pandemics, severe weather events, etc.

- the ageing of the population in all countries (including China), which sharply reduces the proportion of the working age population in the total population.

With inflation at a high and lasting level, which capitalism can no longer control as before (the bourgeoisie rejects a return to 2% as unrealistic), it also marks an important stage in the aggravation of the crisis. It will affect the economy more and more negatively by destabilising world trade and production which it deprives of the needed transparency, when it will be an essential vector of monetary and financial instability.

 

C. Financial and monetary tensions

The fragility of the capitalist system is illustrated by "growing risks to financial stability in key parts of financial markets and sovereign debt". (K. Georgieva (IMF) and new “cracks” opening up.)

- The fragility and tensions around the currencies of the main powers is becoming an increasingly important feature of the situation: the fall of the pound against the dollar to its lowest level in history, it lost 17% of its value; the devaluation of the yen (-21%) to its lowest level since 1990; the fall of the yuan to its lowest level against the dollar for 14 years; the unprecedented fall of the euro to equal parity with the dollar... Already requiring the intervention of the central banks to support their currencies; a growing monetary instability is taking shape.

- The bursting of the crypto-currency financial bubble (with a reduction by 3 in one year of the bitcoin market's stock market valuations) and high-profile bankruptcies in this sector with FTX (the world's second largest crypto-currency player) having the bourgeoisie fearing contagion to other players in traditional finance. The financial instability in this sector is a harbinger of the threat of further crashes, like the one in real estate (50% of global transactions by value), which started in China, and threatens to appear elsewhere.

- Similarly, "The tech economy is faltering, (...) Over the last ten years or so we have seen the emergence of a financial bubble fed by the abundance of liquidity created by central banks. (...) This bubble has burst since the start of the Russian-Ukrainian war and the advent of inflation. The valuation of tech on the stock market has collapsed. Amazon became the first company in history to lose $1,000 billion in stock market value. A $200 billion loss in six months for Meta. (...) This brutal return to reality has unleashed vast layoff plans, particularly in the United States. It is likely that 130,000 jobs were destroyed in the tech industry in 2022.[18]

 

D. The continuation of the policy of increasing debt

Although the mass of indebtedness (260% of world GDP) is already weakening the whole system[19], the evolution of the nature of indebtedness, which is less and less based on surplus value already created and is fed by the printing press and the sovereign debt of the states, the continuation of the debt policy continues; despite the deleterious effects on the increasingly uncertain stability of the capitalist system, it remains an unavoidable necessity for all national capitals. All states depend on it more and more in order to address the contradictions of the capitalist system. It is behind the suspension of the EU Stability Pact, which was only reinstated at the beginning of 2023 after having been heavily modified with the relaxation of its enforcement rules and quite probably to allow the ECB to play the role of lender of last resort.

 

E. Political chaos within the ruling class, a factor in the aggravation of the crisis

The irresponsibility and negligence of the ruling class, which has been manifest in the health crisis as well as in the energy crisis and in the face of the climatic calamity, is a powerful factor in the aggravation of the crisis.

Added to these factors are the political chaos and the impact of populism within the ruling class. They are having catastrophic effects on the UK economy, on the world's oldest bourgeoisie. Brexit illustrates the economic irrationality of ‘every man for himself’; "Instead of the prosperity, sovereignty and international influence, which [the Conservatives] claimed to be bringing by separating from their neighbours, they have only achieved a fall in exports, the depreciation of the pound, the worst growth forecasts of the developed countries except Russia, and diplomatic isolation.[20]" (Le Monde 18-19/12) Following Johnson's departure, the brief period in office of incompetence and cronyism of the government of Liz Truss is explained by its irresponsible decisions, condemned by the rest of the ruling class: the announcement of £45 billion of unfunded tax cuts for the benefit of the wealthiest in society precipitated a fall in the Pound, and a fear for its collapse and a debt crisis!

In Italy, Prime Minister Meloni's pledges to respect European rules (the first time a far-right government has come to power in one of the founding countries of the EU) have momentarily calmed fears about the future of the Italian recovery plan financed by the European monetary fund created by an agreed debt placed on the member countries, but it does not augur well for future stability.[21]

Finally, the divisions within the ruling class can only be aggravated by the choices and priorities to be adopted in the defence of the interests of each national capital in this more than uncertain and contradictory context.

 

F. The exacerbation of every man for himself at the basis of relations between nations

In the 2020 report, the ICC asked if the development of every man for himself, originating in the impasse of overproduction and the increasing difficulty of capital to realise the expanded accumulation of capital, while subjected to the effects of decomposition, was irreversible. Since the crisis of 2008 (which can be considered as the crisis of globalisation) and up until today, every man for himself in relations between powers has progressively undergone a qualitative change and now is completely triumphant. According to the IMF the war will "fundamentally alter the global economic and geopolitical order. The conflict in Ukraine is bringing the 'in-between' period after 2008 to a close and it marks the end of globalisation:

- After 2008, ‘every man for himself’ was first shown in the tendency for China and especially the USA to question the framework of globalisation; the one by sabotaging structures such as the WTO, the other by developing its own alternative Silk Road project.

- It was then brilliantly illustrated during the Covid epidemic, notably through the inability to coordinate a policy for production, distribution and vaccination at a global scale; the gangster-like behaviour of certain countries stealing medical equipment destined for other countries, the tendency to retreat into the national framework, and the desire of each bourgeoisie to save its own economy to the detriment of the others as an irrational tendency could only be disastrous for all countries and for the world economy as a whole.

- The current 'war on gas' between nations is proving to be worthy of the mask war[22]: The recent sabotage of the Nord Stream II pipeline, blamed on an as yet unidentified 'state agent', illustrates the gangster mentality while "in the LNG market, (...) all bets are off."[23]

The US is the big winner in the war, including on the economic terrain. In the historical conditions of decomposition, through the war, the ultimate expression of the war of all against all, military power - as the only real means at the disposal of the US to defend its world leadership - the US obtains the momentary strengthening of its national economy to the detriment of the rest of the world at the price of global dislocation and the decisive weakening of the whole capitalist system[24]. This economic strengthening of the US is the direct product of every man for himself; it is not in contradiction with the sinking of the whole system into the spiral of its decomposition (it is a manifestation of it and in no way represents a stabilisation, but on the contrary testifies to its sinking deeper) since it has as its corollary and condition the extreme development of chaos and the weakening of the capitalist system as a whole. "Washington's unwavering support for Ukraine has made the US the global winner of the sequence without a single GI having to set foot on Ukrainian soil. Undeniable geostrategic, military and political gains. (...) Against a backdrop of unabashed protectionism and economic nationalism, Biden's America can now devote itself entirely to the technological war against its one great rival, China. Europe, which had managed to act in solidarity during the Covid crisis, has been weakened and divided, with the Franco-German tandem in tatters."[25] In this descent into the abyss by world capitalism, the war changes the situation for all capitals and upsets all global economic relations:

• The oil and gas war: in an unprecedented turnaround, Washington is the big winner - while the US did not export LNG 10 years ago, it is now the world's largest exporter. "The United States enjoys near-independence in energy, which allows it to project itself calmly into a world where hydrocarbons have become geopolitical weapons. America does not need to import gas, it is the world's leading producer ahead of Russia. As for oil, Washington is also the world's leading producer and has recently reduced its dependence on foreign crude"[26]. (Le Point Géopolitique, Les guerres de l'énergie, p.7) The product of a vast policy of long term self-sufficiency in the planning of the Obama administration as part of its wish to counter the increasing power of its Chinese challenger, the war in Ukraine allows the US to take full benefit from it to boost its industry[27], and it also provides the means for it to set itself up as a key player. The US is putting its rivals on the defensive and in an inferior position on this strategic energy front:

Europe is almost reduced to a dependence on Russian gas and American LNG. To escape this deadly strangulation, the Europeans are frantically seeking to diversify their suppliers.

China, which is largely dependent on hydrocarbon imports, is at a disadvantage and has been weakened by the US, which is now in a position to control - to cut off - the land and sea routes of Chinese supplies.

• The strengthening of the military sector: With 40% of the arms market, "the undeniable strategic success of the American war machine" is a boost to the US military industry: "The arsenal of democracy, as President F D Roosevelt called it, is running at full capacity (...) As a result, the American military sector is faced with considerable production pressures.[28]".

- The strong dollar and the increase in interest rates: The unprecedented scale of the Biden plan to support the US economy with $1.17 trillion to boost demand and consumption, followed by the beginning of the dismantling of quantative easing and the gradual increase in interest rates by the FED (from the beginning of 2022) caught all its rivals off guard. Taking advantage of both the central role of the dollar (in the reserves of the world's central banks, its preponderance in the world economy and trade) and the strong dollar, the size of its economy and its rank as the world's leading economic power, this policy has the effect of:

a. attracting and channelling capital and investment (in search of a safe haven) into the US economy,

b. making the rest of the world give financial support to its economy,

c. passing the most adverse effects of inflation on to other weaker countries[29]. The US is stabilising and strengthening its own economy at the direct expense of its most immediate competitors.

Clearly, the US is not concerned with the risk of fuelling recession, slowing down international trade and provoking financial crises in the weakest states provided that its own economy profits and it is able to save its own economy and protect its place as the world's leading power.

Increased protectionism: with the $370 billion government Inflation Reduction Act for public investment in US industry coupled with strong protectionist measures giving preference to US-produced manufactures over imported products, the EU has experienced a '2nd competitivity shock' (after the gas shock).

More generally, all the economic, monetary, financial and industrial measures adopted in the USA are designed to attract investments and to draw companies into relocating to the US. The 'Eldorado' of low energy prices and subsidies diverts capital and large foreign companies to the USA, to the detriment of Europe in particular. More than sixty German companies (Lufhansa, Siemens, etc.) are planning to invest in the USA. VW has announced that it wants to increase its production of electric vehicles in the USA and plans to invest 7 billion in its US sites. BMW is investing 1.7 billion in its North Carolina plant and is tempted to produce batteries there rather than in European projects. France estimates its potential losses at "10 billion euros of investment" and "10,000 potential jobs" lost.

This "tipping" of the United States "to the wrong side" of protectionism (according to the EU)[30] is being met with the threat of a 'Buy European Act'; and "France and Germany have formalised a proposal for a counter-offensive ... and asked Brussels to relax the rules governing public subsidies to companies as well as targeted subsidies and tax credits for strategic sectors."[31]

• Agriculture: "The war in Ukraine has upset the global agricultural equilibrium. Africa and the Maghreb were the first victims. But the old continent has also been affected. Over the past decade, Europe has depended on the Ukraine for its maize supplies[32] (...) Even though a large part of the shipments have been able to leave the Ukraine, the European buyers have not been able to acquire enough and have had to knock on the doors of other suppliers. The United States has a very large maize production capacity (...) This strength has not only enabled it to serve its own domestic market but also to take over from Russia and Ukraine and to export extensively to other countries, and in particular to Europe"[33].
• The US offensive against China at the economic level: From a position of strength, the US is stepping up pressure on China and attacking its economic interests around the world through various initiatives and, in profiting from the weakening and the divisions among the Europeans, is seeking through various means to coerce them to follow in its offensive[34]: 'A first': The meeting of the G7 in June 2022 denounced "non-transparent and market-distorting interventions by China" and called for "collective approaches, also outside the G7, to address the challenges posed by non-market policies and practices that distort the global economy" using the democratic argument of "eliminating all forms of forced labour from global supply chains, including state-sponsored forced labour, such as in Xinjiang."

In order to guarantee its decisive technological lead over China, the United States is organising the relocation[35] of the production of the latest generation of semi-conductors on to home soil, as well as controlling the entire sector internationally, from which it intends to exclude China, and is threatening sanctions against any rival that maintains commercial relations with the latter that might violate this 'monopoly'.

The vast investment programme of 600 billion dollars between now and 2027 for these developing countries of the Global Partnership for Infrastructures aims to counteract as a priority the huge projects financed by China as part of the Silk Roads, primarily in sub-Saharan Africa but also in Central America and Asia.

The establishment of the Indo-Pacific Economic Partnership[36] to "write the new rules for the 21st century economy" (Biden) and "build strong and resilient supply chains" under Washington's control was immediately denounced by China as the "formation of cliques intended to keep it at bay".

 

Is the EU in the grip of ‘every man for himself’?

With Germany's unilateral release of a $200 billion support plan for its economy (described as a "middle finger to the rest of Europe") and with the dispute between France and Germany over leadership, the EU is facing major internal conflicts. "Some countries, like Germany, have the means to massively subsidise their industry. Others, such as Italy, much less so. Greece, Spain and also France are worried about this and are asking for European solidarity measures to correct these differences. 'The American Inflation Reduction Act is 2% of GDP, we must make a comparable effort', said President Macron. Conversely, Germany, the Netherlands and Sweden remain opposed to a new European financial package."[37] The two European powers are not on the same wavelength towards China: "Diplomatic niceties are no longer enough to hide the gap between Washington - which sees Beijing as its main rival - and the German government whose interests lie in maintaining a good trade relationship with China. (...) Though not aligned with the United States, France is closer to Washington than to Berlin. China is only France's 5th major trading partner (...) When Macron met Xi on the sidelines of the G20 summit, his position was closer to Biden's than Scholz's.[38]" So Scholz's trip to China was responded to by Macron's trip to the US.

If these tensions worsen, as a consequence of the competing national interests fanned by the American rival, to the point of threatening the break-up of the EU, this would further aggravate the crisis and destabilise the whole capitalist system.

 

China's reaction: The war in Ukraine shows how the decoupling of the US and Chinese economies initiated by the US makes China vulnerable:

- The sanctions against Russia are a warning to China about "the huge consequences for the Chinese economy of potential Western sanctions against China.[39]" As it has huge foreign exchange reserves in dollars "The war in Ukraine has set off alarm bells (...) Chinese experts note that its dependence on the dollar is an even greater concern than the case of Russia. China is not ready to face possible Western sanctions" and "wants to drastically strengthen the security of its foreign assets so as not to repeat the mistakes of Russia, (...) to change the structure of its foreign investments and reduce dependency on US dollars[40] as soon as possible" to avoid the contradiction of having "no other solution currently for protecting the value of the dollars accruing from its trade surplus than to lend them continually to the United States.[41]

- The State's efforts to make the yuan an international currency competing with the dollar have failed, even in a context where many countries could seek to protect themselves from Western sanctions: the yuan has stagnated at 2.88% of foreign exchange reserves (30% of which are held by Russia) compared to 59.5 for the dollar and 19.76 for the euro; and since 2015 at 5th position in global payments with a share of 2.44% compared to 42% for the dollar. The BPC (People's Bank of China) must fight to halt the depreciation of the yuan against the dollar.

- "As a result of measures taken in recent years by the United States" restricting the export of advanced technology (used in high-tech production in the automobile, aeronautics, space exploration, scientific research, computers, transport, medicine, etc.) "China is currently no longer in the race (...) Chinese semiconductor manufacturers do not have the technology to catch up. (...) So much so that some experts doubt that China will be able to catch up in the short and medium term in this field, which is responsible for a large part of future economic growth." (Asyalist)

- China is engaged in a competitive struggle to the death for control of certain strategic sectors (such as rare earths and metals); or to guarantee its hydrocarbon supplies, is taking advantage of Russia's weakening to sign contracts with the Central Asian republics and with the every man for himself approach to get closer to Saudi Arabia

- China's vital economic interests are at stake in the tensions with Taiwan, which like Singapore, acts as an essential platform for China's manufacturing industry and is indispensable to its current economic model.

The result: The exclusion of Russia from international trade by the United States, the offensive against China, and its desire to reconfigure global economic relations to its advantage mark a turning point in the vision of free trade that guided American policy for nearly thirty years. This will result in further fragmentation of the global market and in the multiplication of regional agreements such as the one between the United States, Canada and Mexico signed in 2020[42].

The fact that "signatories would share more common interests", and that states and companies would favour like-minded partners and no longer trade with just anyone, does not augur well for stability or the formation of exclusive economic relationships under the aegis of major sponsors. On the contrary, because they tend to follow the multiple fault lines of tensions between the powers, it will only result in the further fragmentation of the world market on a global scale and the reinforcement of the every man for himself trade war, national withdrawal and the search for the preservation of national sovereignty on all levels. This will only sharpen, as a matter of survival, the desire to control strategic supply chains essential for national survival and the need to put oneself in a position of strength vis-à-vis other powers using blackmail, etc., or by evading them[43].

In a nutshell: From now on, not only has the capacity of the main capitalist nations to cooperate in order to delay and lessen the impact of the economic crisis on the whole capitalist system and on themselves slowly disappeared (without any perceptible return), but it is becoming increasingly clear that there is a policy, in particular driven by the first of the great powers, the United States, to safeguard its own position in the world arena at the direct expense of the other powers of the same type (and the rest of the world) by attacking their interests and deliberately weakening them.

This situation is a clear break with a substantial part of the rules that were established after the crisis of 1929 and opens up a period, terra incognita, where chaos will unfold on a greater scale, including in and among the central countries, with repercussions that are still difficult to 'imagine', striking at the heart of the capitalist system sinking even deeper into the crisis

 

III. PERSPECTIVES

1.  Worsening crisis: the only future under capitalism

The irreversible crisis of capitalism is the backdrop to an acceleration of chaos and barbarism. 50 years of economic crisis that has accelerated since 2018 is openly manifested by galloping inflation with its consequences in misery, hunger and widespread impoverishment.

"The capitalist crisis affects the very foundations of this society. Inflation, insecurity, unemployment, hellish pace and working conditions that destroy workers' health, unaffordable housing… all testify to an unstoppable degradation of working class life and, although the bourgeoisie tries to create all imaginable divisions, granting "more privileged" conditions to certain categories of workers, what we see in its entirety is, on the one hand, what is possibly going to be the WORST CRISIS in the history of capitalism, and, on the other hand, the concrete reality of the ABSOLUTE PAUPERISATION of the working class in the central countries, fully confirming the accuracy of the prediction which Marx made concerning the historical perspective of capitalism and which the economists and other ideologues of the bourgeoisie have so much mocked."[44]

In contrast to the 1930s, there are now more factors aggravating the crisis. The pandemic and the war in Ukraine stamp a new quality on the situation. The concatenation of the factors of decomposition is at the root of a spiral of degradation and the worsening of the global economic situation. "This crisis is shaping up to be a longer and deeper crisis than that of 1929. This is because the irruption of the effects of decomposition on the economy tends to cause havoc with the functioning of production, creating constant bottlenecks and blockages in a situation of growing unemployment - combined, paradoxically, with labour shortages in some areas. Above all, it is expressed in the outbreak of inflation, following various successive rescue plans hastily deployed by states in the face of the pandemic and the war, and thus caused and fuelled by a headlong rush into debt. The increase in interest rates by central banks in an attempt to curb inflation risks precipitating a very violent recession by shackling both states and companies. The proletariat in the central countries now faces a tsunami of misery and brutal impoverishment."[45] The spectre of "stagflation" hangs over the world. While it was a concept of bourgeois economists in the 1970s to characterise a state of high inflation with economic stagnation, today this danger is becoming evident and the current uncontrolled inflation and economic slowdown will lead to a chain of bankruptcies, even of entire countries (Pakistan, Sri Lanka, etc.) as well as financial turbulence and even greater difficulties in the emerging countries.

"Growth in advanced economies is expected to decelerate sharply from 5.1% in 2021 to 2.6% in 2022 (1.2 percentage points lower than projected in January). Growth is expected to moderate further to 2.2% in 2023, largely reflecting the withdrawal of monetary and fiscal policy support provided during the pandemic."[46]. The bourgeoisie has no alternative but to continue to raise interest rates, as the Fed did last November, all states are involved in this dynamic and this will cause contractions in the markets, company closures with massive layoffs as we can see in the technology companies in the USA (GAFAM). The relocation of companies from China to America (Nearshoring) will worsen the unemployment situation in certain regions of the world.

Unlike the 1930s, current debt levels are unprecedented. China, the world's second largest power, owes 2.5 times its GDP! At the same time, it has become a financial backer, primarily to support its Silk Road and to ensure its influence in Africa and Latin America. The United States, whose total debt now exceeds 31 trillion (millions of millions), has printed $5 billion while the EU, with 750 million euros, has printed 20% more than the US. The prospects for the coming years will be full of convulsions and difficulties for capitalism.

 

B. China as a factor destabilising and exacerbating the crisis

i.- The Chinese economy has suffered a sharp slowdown due to repeated blockages and then the tsunami of infections that caused chaos in the health system, the real estate bubble and the blockage of several "silk road" routes due to armed conflicts (Ukraine) or the chaos that surrounds it (Ethiopia). Growth in the first half of this year was 2.5%, making the 5% target for this year unattainable. For the first time in 30 years, China's economic growth will be lower than that of other Asian countries (Vietnam). Large technology and business companies such as Alibaba, Tencent, JD.com and iQiyi have laid off 10-30% of their workforce. Young people are particularly sensitive to the deteriorating situation, with an estimated 20% unemployment rate among university students looking for work. Expansion plans for the "New Silk Road" are also in trouble due to the deepening economic crisis: almost 60% of the debt owed to China is now owed to countries in financial difficulty, compared to 5% in 2010. In addition, economic pressure from the US is intensifying, including the Inflation Reduction Act and the CHIPS and Science Act, which directly target technology exports from several Chinese technology companies (e.g. Huawei) to the US.

Even more distressing for the Chinese bourgeoisie, the economic problems, coupled with the health crisis, have given rise to major social protests.

 

ii.-The failure of the neo-Stalinist model of the Chinese bourgeoisie. Faced with economic and health sector difficulties, Xi Jinping's policy has been to return to the classic recipes of Stalinism:

- Economically, since Deng Xiao Ping, the Chinese bourgeoisie had created a fragile and complex mechanism to maintain an all-powerful single party framework cohabiting with a private bourgeoisie directly stimulated by the state. "By the end of 2021, Deng Xiaoping's era of reform and opening up is clearly over, replaced by a new statist economic orthodoxy.[47] The dominant faction behind Xi Jinping is reorienting the Chinese economy towards absolute Stalinist-style state control;

- On the social front, with the "Covid Zero" policy, Xi not only ensured ruthless state control over the population, but also imposed this control on regional and local authorities, which had proved unreliable and ineffective at the beginning of the pandemic. By the autumn, he sent central state police units to Shanghai to rein in local authorities that were liberalising lockdown measures.

"A developed national capital, held "privately" by different sectors of the bourgeoisie, finds parliamentary "democracy" its most appropriate political apparatus; to the almost complete statification of the means of production, corresponds the totalitarian power of the single party".[48]

The failure of the "Covid Zero" policy has resulted in the re-election for a third term of the man who imposed it, Xi Jinping, at the cost of complex compromises between the factions of the CCP. The Chinese bourgeoisie is thus demonstrating more than ever its congenital inability to overcome the political rigidity of its state apparatus, a heavy legacy of Stalinist Maoism.

 

iii.- A crisis that spreads inexorably. The world's second largest power is caught up in the same dynamic as its rivals. This catastrophe is still to come.

- China's role in the 2008 financial crisis was to contain and not stop investing, including focusing on its domestic market and infrastructure (high-speed rail), of course, all on the back of a mountain of debt. However, during the financial crisis of 2008, it remained a 'healthy sector of the economy'. Today we cannot say the same, China, after the bankruptcy of Evergrande was followed by that of Shintao (second largest construction company after Evergrande), Evergande alone represented 350 billion dollars of debt that they cannot pay. Behind this debt are international investors who are demanding their money, among them BlackRock. Regional banks have failed to the point of triggering a Chinese "corralito[49]". 320 real estate projects are at a standstill and there are 100 million empty homes. Household debt has tripled to $7 trillion and there is also corporate debt. Drought has severely reduced hydroelectric power production to the point of rationing and partial closure of factories, such as TESLA which ironically produces electric cars! What was the response of the Chinese bourgeoisie to the crisis? Lower interest rates, massive state hiring, state funds for infrastructure and real estate, (nothing new!) and we already know the "effectiveness" of these measures... We can only expect a series of economic shocks in the near future in this part of the world.

- The trade war with the United States and the intentions of not being dependent on China have forced the developed countries, and the United States in the forefront, to diversify their supply chains and look for new maquiladora countries. Thus, countries such as Mexico, but especially Vietnam, which has already surpassed China in terms of economic growth in percentage terms, are emerging as the new "maquiladoras[50]" of capitalism. This year, US orders to Chinese manufacturers have fallen by 40% (CNBC).

 

In conclusion, it now seems that while Chinese state capitalism has been able to take advantage of the opportunities offered by the change of bloc, the implosion of the Soviet bloc and the globalisation of the economy advocated by the US and the major Western bloc powers, its congenital weakness in its Stalinist-style state structure is now a major handicap in the face of economic, health and social problems. The situation foreshadows instability and possible upheaval, even for the position of Xi and his supporters within the CCP. A destabilisation of Chinese capitalism would have unpredictable consequences for global capitalism.

 

C. The continuation of militarism and the war economy

The year 2021 saw an accelerated explosion in military spending. The US increased its spending by 38% ($880 million), China by 14% ($243 million) and Russia by 3% ($65 million). America's military superiority is reflected in its budget.  According to the Stockholm International Peace Research Institute (SIPRI), in the same year "the world spent $2 trillion" on the military.

The entire Indo-Pacific region has seen its military spending increase for fear of falling victim to Chinese imperialism: Japan has also doubled its military budget and signed a 'defence transfer' agreement with Vietnam, Thailand is investing $125 million in 50 warships to protect its seas, Indonesia is increasing its military investment in the China Sea by 200%, and the Philippines has just received an additional $64 million from the US to strengthen its military bases in order to contain the Chinese threat. But this region is not the only one caught up in this dynamic; no one is spared.

The world is heading for an explosion in military spending like never before in history. All this unproductive spending will be loaded onto the backs of working people.

-The energy war will mark the future of capitalism: despite the frantic search for clean and renewable energy, it will be impossible under capitalism. The control of energy sources, in particular gas and especially oil, will remain a question of "national security" for every capital. The functioning of business depends on it, and at the imperialist level, the military runs on petrol (US=gasoline). The US currently has control over these resources and the fact that it is now Europe's main supplier becomes a source of future blackmail and pressure on EU countries. Xi's trip to Saudi Arabia and the recent energy deal with Russia confirm this (30 Dec 2022).

The historical acceleration of the influence of war on the economy is worth noting, and was tragically demonstrated by the war in Ukraine. If we make a historical comparison with the Vietnam War, the military burden was on the economy, but today the impact of militarism on the economy is even greater.

 

D. The impossible energy transition

Capitalism is the only system in history capable of devastating nature on a massive scale, eliminating entire ecosystems and accelerating the extinction of species that alter the entire natural order. This phenomenon is cumulative and accelerating, leading to the rapid devastation of the planet. The current "clean energy transition" is simply an expression of the struggle between capitalists and their competition to the death. It's all about who will get to the market first and take customers away from their rivals. All the talk about their "concern" for the environment is demagogy. The worsening "ecological crisis" is accelerating and causing unacceptable devastation. The United States, whose former president Trump denied the existence of "climate change", is facing the effects of this ecological crisis and the world's leading power is far from being "spared" from "natural disasters" and even holds the dubious world record for the destruction of biodiversity. In fact, capitalism cannot be a competitive system and be "ecological" at the same time, because

- Its objective is profit, not the preservation of nature, which will always be considered by capitalism as a source of free resources whose depredation and the consequences do not concern it;

- The ‘every man for himself’ and the anarchy of production mean that the bourgeoisie has no control over the "new technologies", it is a sorcerer's apprentice!

- Technological advances are one-sided; they never care about the global implications. If the extraction of lithium for car batteries is polluting and its recyclability is reduced to 5%, it does not matter. The main thing is to sell 'green' cars;

- The separation between man and nature becomes extreme under capitalism, to the point of considering man as 'outside' his natural environment.

On the other hand, the return to coal, even if companies pay an extra tax to cover environmental damage, which is just a smokescreen, does not eliminate the enormous failure of capitalism to eliminate carbon emissions. If the Europeans had decided to abandon nuclear power, they are now trying to reintroduce it to offset their dependence on Russia and the US. This is yet another example of the failures of capitalism, which pushes us to revive old glories, even if they are polluting. Each country only looks out for itself and the others suffer!

A transition to "green energy" under capitalism is equivalent to the illusion of a capitalism without wars.

 

E. Towards the absolute impoverishment of the working class in the central countries

The unproductive spending of capital will not stop, militarism and the maintenance of the state will take its toll on the working class. This phenomenon of the impoverishment of the working class in the central countries has its history, but since the pandemic and the war in Ukraine it has accelerated. Inflation drastically reduces the purchasing power of workers and, unlike the 1970s, today the bourgeoisie does not resort to wage indexation, for example, the bourgeoisie in the UK has taken a hard line on demands for wage increases to compensate for inflation, the British Prime Minister has said "no negotiation is possible".

- The slogan of the British strikes "Heating or eating" reveals the seriousness of the situation. For many working families, it is more expensive to pay for energy than for a mortgage: increasingly miserable wages, rising costs of living, ever-increasing prices, mass redundancies, cuts in social security, attacks on pensions, etc. All this points to a future of misery to which the proletariat will have to respond by following its class brothers and sisters in Britain, Europe and even the USA. A future of pauperisation of the proletariat is opening up and accelerating.

- The 'labour shortage'. The discussion [at the ICC Congress] should provide a response to this phenomenon: is the shortage the product of a ‘new’ relationship to work in one part of the class? Is it the product of the increasing anarchy that seizes Capital that generates both unemployment (over capacity) and the shortage of personnel? This report can only give a few elements such as the following:

- The logistics of commodity capitalism are in chaos, there are not enough drivers and products rot or there is a shortage. In health care there are too many vacancies and in education teachers are quickly leaving their jobs. In China, for example, 1 in 5 young people cannot find a "promising" job and prefer not to take it. "Let it rot" (bai lan) is a common Chinese expression used by young people who do not accept work. Behind this situation is obviously an individual and desperate outcome, a "private" reaction to the deterioration of working conditions. The new generations do not want to live at the pace of capitalist production. This phenomenon is at the same time the expression of a lack of class identity, they don't organise themselves to fight and only take an individual position in the face of an eminently social, economic and political problem. The reduction in unemployment benefits, the lack of pensions in many countries, the increase in mental illness and suicides, all this creates unbearable living and working conditions.

It is the crisis and the prospect of global recession that creates the conditions for workers to begin to raise their struggles on their own terrain. "Unlike social decomposition which essentially effects the superstructure, the economic crisis directly attacks the foundations on which this superstructure rests; in this sense, it lays bare all the barbarity that is battening on society, thus allowing the proletariat to become aware of the need to change the system radically, rather than trying to improve certain aspects of it " (Theses on Decomposition) International Review 107.

 

(January 2023)

 

 

---

[1]      Resolution on the international situation International Review 167.

[2] Le Monde 17/12

[3] Hunger increased by about 18% during the pandemic and now affects 720 to 811 million people. The reduction of food aid, its reorientation towards the reception of Ukrainian refugees only or the reallocation of its funds to increasing military expenditure have meant that for Afghanistan where famine threatens 23 million inhabitants, Somalia where part of the population is in "imminent danger of death" the necessary funds could not be raised.

[4] In Europe, the considerable reduction in fertiliser production (which consumes a lot of natural gas) due to high energy prices is leading to a decrease in fertiliser consumption throughout the world, from Brazil to the United States, which threatens the size of the next harvest. For example: "Brazil, the world's largest soybean producer, buys almost half of its phosphate fertilizer from Russia and Belarus. It has only three months of stock left. The Brazilian association of soybean producers (Aprosoja) has asked its members to use less fertilizer this year, if any at all. Brazil's soybean crop, already diminished by severe drought, is likely to be even smaller as a result. Brazil sells its soybeans mainly to China, which uses much of it for animal feed. Less abundant and more expensive soybeans could force Chinese farmers to reduce the rations they feed their animals. The result: smaller cows, pigs and chickens - and more expensive meat."

[5] All the quotes in this passage are from Courrier International

[6] "The dwindling of public revenues due to the Western embargo on the purchase of gold, coal and metals means that pay is only received periodically by certain regiments. This could contribute to refusals to fight, or to even surrender.” (Les Echos 17/09)

[7] "Many factories of the military-industrial complex have had to reduce their production, or even to shut down, such as the Ulyanovsk anti-aircraft missile factory, the Vympel air-to-air missile factory, or the Uralvagonzavod tank factory, the country's main production site." (Les Echos 17/09)

[8] "Indeed, although Beijing refuses to publicly disavow its major strategic partner, Chinese authorities have largely complied with the sanctions imposed by the West against Russia. Chinese companies have followed Western companies in their exodus from the Russian market: the Chinese tech giants - Lenovo, TikTok and Huawei - have blocked all their operations in Russia, while the Chinese builders of the Arctic modules for the Russian gas mega-project Arctic-LNG2 have decided to end their cooperation with Novatek. Finally, despite the assurances of the Kremlin's official propaganda, UnionPay, one of the world's major state-controlled payment processors, put its plans to collaborate with Russian banks on hold at the end of April, cutting short their hopes of finding an alternative to American payment giants Visa and Mastercard. This complex pas de deux should, in Beijing's eyes, protect Chinese interests and minimize the impact of the war on the Chinese economy..." Aerion

[9] Diplomatie 118, p33; "If one adds [to purely military spending] humanitarian, emergency economic and refugee assistance, the EU and member states have provided more aid than the United States, according to the Kiel Institute, at $52 billion versus $48 billion for Washington." (Les Echos, 3-4/02)

[10] IFRI, Le Point Géopolitique, Les guerres de l'énergie, p.6

[11] The example of South Africa shows the general nature of the problem: the effects of the drought and the water shortages that the country is experiencing this fall are compounded by an energy crisis of unprecedented magnitude due to the obsolescence and breakdowns of the old coal-fired power plants, which are causing incessant power cuts that prevent the pumping of water in the Drakensberg mountains and its delivery to Johannesburg and Pretoria, which are rationed, while 40% disappears in leaks in the network. But to repair all of its infrastructure would require 3.4 billion euros, which the Water Authority does not have.

[12] For example, in the chemical industry (the largest consumer of gas), production has been drastically reduced; 70% of the sector has recorded losses; for BASF, entire parts of its activity are no longer profitable or competitive, which has led to a 30% drop in its results. All of Europe (which absorbs 60% of the exports of this sector) is affected!

[13] Conflicts no.42

[14] The floods have almost completely destroyed the crops of this ranked 5th in the world cotton producer. It is a colossal loss for the textile industry which represents 10% of the GDP; agriculture in Sindh has been destroyed, the livestock decimated; the rest left to disease: "the food security of the 220 million inhabitants is in danger" (Le Monde 14/09). Add to this the scourges of malaria, dengue fever, cholera and typhoid. As the fourth largest rice producer and supplier to China and sub-Saharan Africa, "any drop in exports will only add to the global food insecurity fuelled by the drop in wheat exports from Ukraine." (Le Monde 14/09)

[15] Les Echos, 23-24/12

[16] Révolution Internationale n°6, old series

[17] "Inflation should not be confused with another phenomenon in the life of capitalism, which is the upward trend in the price of certain goods due to the insufficient supply. This phenomenon has recently taken on a particular magnitude due to the war in Ukraine, which has affected the supply of a significant volume of different agricultural products, the shortage of which is already a factor of aggravation of misery and hunger in the world. It is a permanent feature of the period of decadence of capitalism that heavily impacts the economy. Like the lack of supply, it is reflected in rising prices, but it is the consequence of the weight of unproductive expenditures in society, the cost of which is passed on to the cost of the goods produced. Finally, another factor of inflation is as a consequence of the devaluation of currencies resulting from the recourse to printing money to accompany the uncontrolled increase of global debt, which is currently approaching 260% of world GDP."

[18] Marianne n°1341

[19] "Many defaults are on the horizon. The IMF estimates that two-thirds of low-income countries and one-quarter of emerging countries are facing severe debt-related problems." (Le Monde 24/09)

[20] Brexit has led to a stalling of the British economy: "The UK is the only advanced country whose exports fell last year and remain below their pre-Covid level (...) business investment remained 10% below its mid-2016 level." (Les Echos 24/09) "With Brexit, the European financial passport that allowed products to be sold throughout the EU has been lost. Some ten thousand bankers have left the London financial centre to move to Dublin, Frankfurt, Paris, Luxembourg or Amsterdam. (...) Another phenomenon: since the end of 2019 the number of jobs in the British financial sector has fallen by 76,000 (out of a current total of 1.06 million) ...  Brexit has played a significant role in the decline of the City in connection with the ten thousand or so jobs relocated, but mainly indirectly, because the major international financial institutions have chosen to invest elsewhere." (Le Monde 19/11)

[21] "This alignment with the European Commission and its doctrine of austerity will not be without problems for a significant part of Mrs. Meloni's electoral support.” (Le Monde Diplomatique, 12/22)

[22] "Since the early 1980s, the United States under Reagan had a dream of cutting Europe off from Russian gas. They used enormous pressure. They used enormous pressure so that the Nord Stream 1 gas pipeline would never see the light of day and did it again years later with Nord Stream 2, going so far as to threaten sanctions against companies that would participate in the project. The war in Ukraine is a gift from heaven for them."

[23] "One story made the headlines last spring: an LNG tanker left Freeport, Texas, on March 21, bound for Asia. But after ten days of travel, it abruptly changed its course, in the middle of the Pacific Ocean, to divert to Europe (...) the high premiums offered on the Old Continent for this precious cargo of LNG convinced BP, the company that chartered the ship, to change its plans." (Le Point Géopolitique, Les guerres de l'énergie, p.36) "At the beginning of November, some 30 gas tankers loaded with LNG worth $2 billion were circling the waters off the Spanish coast and northern European terminals. When will they unload? 'The brokers who control the tankers are waiting for prices to rise when the temperature drops during the winter', says the FT (4/11/2022)" (Le Monde Diplomatique, December 22)

[24] The impact of the crisis on the US economy, the relative erosion of the weight of the US economy in the world, the effects of the decomposition on its political apparatus as well as the historical trend of losing its leadership should not lead to an underestimation of the reality of the power of the United States and its capacity to defend it on all levels: "The United States exploits a unique panoptic system that allows it to control most of the nerve centres of globalisation. 'Global' remains the adjective that best defines its power and strategy. It relies on a surveillance system and on the simultaneous control of 'common spaces': sea, air, space and digital. The first three correspond to distinct physical environments innervated by the fourth. Thanks to the dollar and the law, guaranteed by their overwhelming military superiority, the United States retains a formidable power of structuring, and therefore of destructuring”. T. Gomart, "Invisible Wars," 2021, p. 251

[25] l’Express n°3725

[26] "Since 2020, its exports have exceeded its imports and its main supplier is a country with which it should maintain good relations in the years to come, since it is Canada (51% of imported oil came from its northern neighbour). An energy insurance that allows it to conduct an offensive diplomacy in Ukraine.” (Le Point Géopolitique, Les guerres de l'énergie, p.7)

[27] "In the first half of 2022, LNG exports (all countries) increased by 20% and almost two-thirds went to Europe. America has considerable potential. Firstly, because there is a political consensus to go further in shale gas. Secondly, because they have the most extensive pipeline network of any country. And finally because they are investing heavily in liquefaction terminals. (...) All around the Gulf of Mexico, south of Louisiana, from Texas to Florida, an LNG revolution is being written. America currently has only 8 liquefaction terminals. But five are still under construction, 12 others have already been approved and are awaiting permits, and eight permits are being processed.”  l'Express n°3725

[28] "Most European countries have placed orders. First and foremost Germany, which has announced its wish to buy up to 35 F35 fighter aircraft from Lockheed Martin. The Royal Navy will invest 300 million euros to increase the capabilities of its Tomahawk missiles. The Netherlands has put a billion euros on the table for Patriot medium-range missile defence systems. This summer, Estonia ordered six Himars systems and a ballistic missile capable of reaching a target nearly 300 km away. As for Bulgaria, it decided in September to further increase its order for F16 fighter jets for a total of 1.3 billion dollars.” l'Express n°3725

[29] "Capital is deserting emerging markets, weakening their currencies in the process. (Ghanaian currency -41%, Taiwanese dollar -13%, Mongolian tugrik -16%,) (...) Eleven emerging countries risk a balance of payments crisis due to international monetary tightening (Chile, Pakistan, Hungary, Kenya, Tunisia)." (Le Monde 13/10)

[30] Another drag on international trade is the increase in tariffs by many countries, including the United States. Since 2010, the value of global trade subject to tariffs and other barriers has increased from $126 billion to $1.5 trillion, according to the WTO.

[31] Faced with "'the end of a liberal era of globalisation' (Lemaire), French employers have also changed their doctrine... and are advocating 'intelligent protectionism'." Les Echos 23-24/12

[32] Nearly a quarter of the ears of corn consumed on the continent are grown outside the borders of the EU, particularly in Ukraine, which has become our main supplier over the years. As the fighting has disrupted planting, the country's production could be cut by 10 to 15 million tons this year.

[33] L’Express n°3725

[34] "For Washington, Europe cannot view China as a partner, competitor and rival all at once." Bloomberg, 11/21

[35] "Joe Biden signed the Chips and Science Act last August, which would inject billions of dollars into the industry, including $57 billion in loans, grants and other tax measures in an effort to encourage U.S. semiconductor producers to build capacity." Asyalist

[36] The member states of this pact are: Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam. Together with the United States, they represent 40% of the world's GDP.

[37] Le Monde 17/12

[38] Bloomberg, 21/11

[39] "According to a study conducted by the Chinese State Council last April, the text of which was leaked to Japan, these sanctions would have a "dramatic effect on China", which "would return to a planned economy cut off from the world. There would then be a serious risk of a food crisis", due to the damage that these sanctions would cause with the interruption of imports of essential food products. Stopping imports of soyabeans in particular would create a crisis for Chinese food chains that are highly dependent on soyabeans, while reducing or stopping exports would have serious consequences in terms of financial revenue, says the Beijing document. China imports 30% of its soybean needs from the United States. It says Chinese soyabean production provides for less than 20% of the country's needs. Soybeans are essential for the production of edible oils as well as for feeding pigs, which account for 60% of the meat consumed by the Chinese."

[40] Conflits N° 41, Sept-Oct 2022

[41] T. Gomart, « Guerres invisibles », 2021, p. 242

[42] This is evidenced by recent comments from Treasury Secretary Janet Yellen: "During 2022, the Biden Administration promoted an economic plan to strengthen U.S. resilience to supply disruptions by easing bottlenecks at ports, investing heavily in physical infrastructure, and building domestic manufacturing capacity in key 21st century sectors such as semiconductors and renewable energy. (...) Through a 'friend-sharing' approach, the Biden administration intends to maintain trade efficiency while promoting the economic resilience of the United States and its partners. (...) The goal of the 'friend-sharing' approach is to deepen our economic integration with a large number of trusted trading partners on whom we can rely. (...) Through the EU-US Trade and Technology Council, we are working together to create secure supply chains in the solar, semiconductor, and rare earth magnet sectors. The United States is forging similar partnerships through the Indo-Pacific Economic Framework (IPEF) and in Latin America through the Economic Prosperity Partnership of the Americas. The countries involved in the IPEF, which account for 40% of global GDP, have committed to coordinating their efforts to diversify supply chains. (...) 'friend-sharing' will be implemented progressively. Already, new supply chains are being developed. The EU is working with Intel to facilitate an investment of approximately $90 billion in the creation of a semiconductor industry. The U.S. is working with its trusted partners to develop a comprehensive semiconductor ecosystem in the United States. We are also working with Australia to build rare earth mining and processing facilities in both our countries." (Le Monde 1-2/01/2023)

[43] "The trade war is one of the theatres in which the Sino-American strategic rivalry is played out, with a major consequence for all the players: the transformation of interdependencies into levers of power (...). (...) By abandoning the multilateral system that it had built itself, [the United States] has deliberately destabilised its traditional allies, while indicating its desire to continue to exercise its structuring power. Even if it maintains the forms of multilateralism, the Biden administration will use them to contain China's rise to power as much as possible,"  T. Gomart, "Invisible Wars," 2021, p. 112

[44] Third Manifesto of the ICC. Capitalism leads to the destruction of humanity; only the world revolution of the proletariat can put an end to it

[45] The 20s of the 21st century: The acceleration of capitalist decomposition openly raises the question of the destruction of humanity

[46]World Bank, June 2022

[47] Foreign Affairs, in Courrier International 1674

[48] Theses on the economic and political crisis in Eastern Europe

[49] Unofficial name given to the economic measures taken in Argentina during the economic crisis in 2001 limiting cash withdrawals and prohibiting all remittances to the outside world, in order to put an end to the liquidity race and combat the flight of capital.

[50]  Factories benefiting from exemptions from customs duties in order to produce goods at a lower cost.