Editors’ note: These are theses dealing with international relations, probably of greatest interest to our readers. For all the Congress preparatory theses, see <<https://inter.kke.gr/en/articles/21st-Congress-of-the-KKE/>>. The 21st Congress will be held June 24-27, 2021.
THE CURRENT INTERNATIONAL REALITY
1. Since the 20th Congress of the Party, the main contradiction between capital and labour has been sharpened and the unevenness between the capitalist states has increased.
The gap between the wealth concentrated in large business groups and the relative and absolute poverty that the majority of the people are experiencing is objectively widening.
The potential of new technologies, which are presented as the “4th industrial revolution”, instead of liberating the working people and being utilized for the expanding satisfaction of social needs, become a tool in the hands of the capital for intensifying exploitation.
Evidence shows the increase of certain manifestations of the parasitic nature of the capitalist system, e.g. drugs, prostitution, and crime.
In the previous years, the negative consequences of the capitalist growth in the environment became very clear.
The imperialist conflicts and the wars stimulated refugee flows.
All these developments verify that capitalism is a historically obsolete system and confirm that, despite the negative correlation of forces, our era is the era of transition from capitalism to socialism–communism.
The outbreak of the new deep international economic crisis and the visible inability of the public healthcare systems to address the pandemic in the imperialist states highlight the decay and the sharpening contradictions of the capitalist system, despite its expansion after the victory of the counter-revolution at the end of the 20thcentury.
The increase in long-term unemployment and the degree of exploitation of the working class, the strengthening of the trend of relative and absolute destitution, the failure to utilize the contemporary scientific potential for protecting people’s health, as well as their educational needs etc., highlight the sharpening of the main contradiction between capital and labour and overall of the social contradictions.
In the framework of the new international crisis, the competition amongst imperialist alliances is strengthening, along with the competition amongst capitalist states within the alliances, for the control of markets, energy resources and transport routes, creating flashpoints of war in the Eastern Mediterranean, Africa, Southeast Asia and the Arctic.
In recent years, it is evident that discontent has been building up, which is often expressed through outbreaks of people’s rage and indignation, even in powerful capitalist states. As such, it is worth pointing out the strikes and mobilizations against the policy of Macron in France and the protests at the occasion of the murder of George Floyd in the USA. However, disorientation and integration into the competing plans of sections of the bourgeoisie prevail insofar as there is no structured communist party and a labour, class-oriented movement. This competition was recently expressed through the storming of the US Capitol, which was incited by Trump forces, at the occasion of the governmental change in the USA. The so-called “return to normalcy” is not going to address this competition, nor the acute problems that the US people and the peoples of the world are facing, due to the years-long policy of all governments in the USA, both Republican and Democratic ones. However, people’s mobilizations in a number of capitalist states should not be underestimated, since they constitute elements that show the possibilities for the development of the labour–people’s movement in the future.
THE NEW INTERNATIONAL ECONOMIC CRISIS
2. In 2020, the new international economic crisis manifested itself in a relatively synchronized way, which was deeper than the one in 2008–2009 and the deepest since the post-war period.
Bourgeois analyses stress that the tackling of the COVID-19 pandemic was the main cause of the crisis (with measures for total or partial lockdown), which indeed led to an abrupt restriction of productive, transport and other economic activities. Undoubtedly, the pandemic did contribute to the timing and depth of the outbreak of the crisis; however, it was not its cause. It served as a catalyst, as an additional handbrake in the movement of the international economy that had already slowed down.
The slowdown that emerged already in 2019, revealed the large over-accumulated capital, which could not be recapitalized and invested, thus not ensuring a satisfactory rate of profit.
In the decade that followed the previous international economic crisis of 2008–2009, only a few capitalist economies reached a higher level of growth than the one in the pre-crisis period.
This particular tackling of the pandemic, despite individual differences amongst the capitalist states, reflects its universal class character. The particular restrictive measures for tackling the pandemic (total or partial lockdown) and the negative social and economic consequences are defined by the capitalist relations of production.
The tragic situation of the public healthcare systems (due to the lack of state primary care, staff and ICUs shortage, issues of infrastructure, etc. in public hospitals), the major problems concerning the preventive measures to protect the health and safety of workers and the low degree of protection of the healthcare staff are not inevitable phenomena, but a result of the bourgeois policy supporting capitalist profitability. The strengthening of the commercialization of health services and medicines is typical of the capitalist states.
The bourgeois policy tries in vain to strike a balance between taking tight health measures and supporting the recovery of capitalist economy. At the same time, the competition between groups and imperialist centres concerning the global market of vaccines and medicines is sharpening, also within the framework of geopolitical confrontations.
THE UNEVEN OUTBREAK OF THE CRISIS AND THE SHARPENING OF COMPETITION
3. The uneven outbreak of the crisis and its consequences affects the changes in the correlation of forces and sharpens the contradictions both amongst imperialist alliances and capitalist states, as well as within the EU and especially within the Eurozone.
The struggle for the control of markets, energy resources and maritime transport routes for commodities from the Eastern Mediterranean to the South China Sea is sharpening. The risk of a generalized imperialist war is increasing and expanding.
The developments show that the ability of China to threaten the US supremacy in the international imperialist system in the following years is objectively growing. This dynamic is also reflected in the retreat of the US share and the significant increase in China’s share in the2000–2020 Gross World Product.
The trend for changes in the correlation of forces to the detriment of the USA is also reflected in the dramatic increase in the US trade deficit in the bilateral trade with China (during the period 1985–2019).
On this basis, the US–China trade war escalated in 2018–2019, with the US imposing increased tariffs on Chinese commodities worth of $200 billion, and China imposing tariffs on American commodities worth of $60 billion. The USA is placing particular emphasis on maintaining its supremacy in new technologies and, at the same time, on limiting China’s expansion to this sector, since such an expansion could also lead to the strengthening of its political influence (e.g. the growing efforts to exclude China from 5G networks in Europe). At the same time, the US government, utilizing the massive tax reduction for the capital, called on the US monopolies in new technologies operating in China to abandon it or to return to the US, while making efforts to prevent China’s expansion through the “New Silk Road” (also known as China’s Belt and Road Initiative), and its investments in others states.
The sanctions imposed by both sides and the efforts for changes in the global transport supply chain, as well as for reducing the economic interdependence between the USA and China, have a negative impact on the international trade and contributed to the outbreak of the new crisis.
At the same time, protectionist trends are reinforced not only in the USA but also in the EU, following the explicit suggestions made by the President of the European Commission Ursula von der Leyen to the member states for the protection of the European business groups against any attempted aggressive takeover by foreign business groups —especially by groups of strategic importance— during the crisis.
The relations between the USA and Germany are deteriorating, through trade sanctions imposed by both sides and an intensification of disagreements on a wide spectrum of issues, e.g. energy cooperation between Germany and Russia, Germany’s limited participation in NATO’s military expenditure, Germany’s stance against Iran. Overall, the EU is in sharpening competition with the USA and the UK. The Brexit Withdrawal Agreement signed between the EU and the UK will sharpen the competition in the financial sector in Europe, since it is essentially restricted to the movement of commodities. At the same time, it reflects the pressure exerted to reach compromises, which will reinforce the Euro–Atlantic axis opposed to China’s dynamic. This pressure will be intensified following the election victory of the Democrats in the USA.
The changes in the international correlation of forces in favour of China feed opposing trends towards reviving the US–Germany relations and strengthening the cohesion of the Euro–Atlantic alliance. The increase of economic sanctions and the pressure on Russia, which is also experiencing the crisis outbreak, is a manifestation of these trends. Different opinions are expressed within the EU about the stance on Russia and China, which impede the formation of a unified and solid position. Nevertheless, China is objectively emerging as the largest trading partner of the EU, as confirmed by the recent EU–China Comprehensive Agreement on Investment.
THE OUTBREAK OF THE CRISIS IN THE EU
4. The contradictions amongst the EU member states that are generated by the competition of their respective monopoly groups and bourgeois classes are sharpened due to:
a) The impact of the law of uneven capitalist development both within the EU and in relation to the USA, China and Japan.
The strengthening of Germany’s standing compared to France and Italy, which was recorded in the previous period of the uneven capitalist development, was further increased in the period of the uneven outbreak of the new crisis and its consequences on the Eurozone and overall on the EU. The differences concerning the changes in the GDP, exports, and productivity confirm this conclusion.
b) The objective difference between the fiscal situation and the problems of the management of state debt and annual deficits, which need to be addressed by the bourgeois governments of the member states to ensure the satisfactory support of their monopoly groups in a period of crisis.
What is being tested here is on the one hand whether Germany will be able to shoulder the main burden of a joint EU borrowing without experiencing a downsizing of its economic power, and on the other hand the extremely limited possibilities of Italy and other highly indebted states to shoulder the burden of new loans, along with the deterioration of the conditions for their competitiveness within the EU.
c) The alternative solutions provided by the changes in the international correlation of forces (the dynamic rise of China, the sharpening of the USA–Germany relations, Brexit, etc.) for the bourgeois governments. Some sections of the bourgeois classes of states, such as Italy, realizing that they reap comparatively less benefits by their participation in the EU single market and in the Euro, are reconsidering the prioritization of their international alliances.
d) The aforementioned objective factors, which reinforce thecentrifugal forces of the Eurozone, do not negate the existing benefits that the bourgeois classes of the EU member states reap from the large EU single market in the international competition against other imperialist centres.
5. This contradiction that objectively characterizes the course of the EU and the Eurozone is reflected in the decisions of the EU Commission. The EU decided for the first time to proceed in joint borrowing to support plans of great state intervention for the recovery of the capitalist economy in all member states, through the formation of the Recovery and Resilience Facility.
It also decided to suspend the implementation of the Stability and Growth Pact for the period 2020–2021 and to proceed with not only loans but also grants to the member states.
At the same time, the European Central Bank (ECB) follows a lax policy and supports banking groups with a huge quantitative easing programme.
The resilience of the relevant compromise of the EU Summit will be put to the test by the increasing diversion of the interests of the bourgeois classes of the EU member states. The increasing diversion between Germany and Italy in particular highlights the objective issue of cohesion exhibited by the hard core of the Eurozone. A temporary agreement on cheaper loans to the highly indebted and financially weaker member states does not eliminate the objective factors of unevenness; on the contrary, it temporarily retains the centrifugal trends in the Eurozone.
Until the outbreak of the new crisis, Germany rejected steadily the proposals for substantial loosening of the restrictive fiscal and monetary policy, referring to the dangers that would derive from the stability of the euro and its credibility as an international reserve currency. Germany’s refusal of any proposal for joint borrowing, debt pooling and provision of grants to highly indebted states was even more pronounced.
Germany adapted relatively its position (thus reaching to a compromise at the EU Summit) mainly to avoid another shock in the EU after Brexit; to avoid a shock in the cohesion of the Eurozone and the dynamic of the euro, since this would have a negative impact on the economic power of the Eurozone and Germany’s exports. At the same time, Germany utilized the pressure of frugal states to restrain the initial proposal for providing grants to member states and mainly to impose its terms on the next steps for the economic and political integration of the EU.
6. The EU’s decision to proceed with joint borrowing for the first time in order to provide grants to member states is a step towards the further EU integration.
The agreement on the formation of the Recovery and Resilience Facility is part of this framework.
France and the Alliance of Southern EU States present it as a historical step forward against the reactionary positions of the Frugal North. Germany advances compromise as a temporary adaptation for tackling a major emergency that does not constitute any radical change of direction.
In any case, this is a course towards a reactionary direction. Every step that strengthens the cohesion of the imperialist alliance of the EU, in reality strengthens the true opponent of the workers, i.e. the dictatorship of the capital. The further integration of the EU means the strengthening of unified mechanisms for implementing unified and reactionary directions at the expense of the people.
The procedures provided for the approval of payments both in the framework of the Recovery and Resilience Facility and the Multiannual Financial Framework (seven-year EU budget) strengthen the monitoring and enforcement mechanisms for full compliance of the member states with the EU directions. The monitoring of the highly indebted states, such as Greece, will be conducted in a multiform way. A mechanism for constant evaluation of the reform programme and the commitments agreed will be added to the European semester. Based on this mechanism, it will be decided whether these famous subsidy budgets will be released or frozen.
THE BOURGEOIS MANAGEMENT OF THE NEW CRISIS
7. The bourgeois staff in the USA, EU, and Japan have proceeded with great state intervention to support the recovery of the capitalist economy, by utilizing Keynesian proposals. They follow an expansionary fiscal policy, i.e. an increase in government spending, mainly for the direct strengthening of business groups, but also as an effort to temporarily mitigate the acute consequences of the crisis on the people. This policy is related to tolerance towards the increase in state debt, that is to say, it is accompanied by a loose monetary policy.
From the viewpoint of the European social democracy, the need for a steady return to suggestions of Keynesian management is stressed, which is promoted as a progressive and pro-people answer to neoliberalism, that, according to them, is responsible for the outbreak of the crisis.
The truth is that on the one hand various crises manifested themselves during the second half of the 20thcenturyin the framework of a Keynesian type of management, but on the other hand various expansionary Keynesian proposals and directions of loose monetary policy were still present from the previous mix of bourgeois management.
After the international crisis of 2008–2009, the ECB and the Federal Reserve in particular followed aquantitative easing monetarypolicyto support the banking groups. The governments of the EU member states were given the opportunity to issue bonds purchased by banking groups, technically absorbing borrowed capital from the ECB at favourable rates.
Afterwards, the Green New Deal was introduced. Initially, it was submitted to the US Congress by the “left wing” of the Democrats in 2019. At the same time, the European Green Deal was promoted by the European Commission on the grounds of environmental protection and public health, aiming to form a temporary profitable way out of investments for the over-accumulated capital. In essence, this proposal, along with great state intervention, on the one hand provides incentives through the financing of new investments in the sectors of energy, transport, manufacturing and agriculture in conjunction with the strengthening of the digitalization of the economy, and on the other hand it ensures the controlled depreciation of capital, e.g. the closure of lignite stations, the withdrawal of conventional vehicles, the change of energy networks.
The expansionary fiscal policy and the greater state intervention place a heavy burden on the people once again, but this time differently. The people are called upon to pay for the new loans and shoulder the burden of loss-making private enterprises in the event of their temporary or partial nationalization and vice versa, of their privatization or restriction of state participation, by burdening the Public sector.
They promote the policy of cheaper labour force on the grounds of “employment protection”, by turning the Labour Agreements from full-time employment to part-time or rotating employment and by cutting the working hours enforcing their further flexibility and reducing remuneration, bringing about the intensification of labour and an increase in the degree of exploitation.
In the same framework, the possibility for the unilateral implementation of the anti-labour framework of teleworking is expanding, which, in several cases, eliminates in practice the distinction between free and working time.
The new anti-labour measures, which practically reduce wages, further facilitate dismissals and crush social security rights, initially are introduced as emergency measures but become permanent afterwards. Thus, the policy for a contribution-based pension and strengthening of the private pillar in the social security system is established.
A policy of adaptation to the new productivity level without any improvement in labour wages and of management of extreme poverty, i.e. containing unemployment rates and preventing the basic consumption level of the masses from crumbling, is not a progressive proposal for ensuring the “just distribution of wealth”, as claimed by many social democrats. It is a necessary condition for the safeguarding and recovery of capitalist profitability.
At the same time, the number of long-term unemployed is growing in sectors affected by the green transition, e.g. the closure of lignite power stations, and the popular families shoulder the burden of the workers’ retraining.
The so-called new paradise of green growth includes expensive electricity, flexible labour relations and cheap labour force, new burdens on the popular families’ shoulders for purchasing green vehicles and appliances, green indirect taxes and the overall drain of the people, in order for the state to support the new green investments of business groups. At the same time, the investments of the so-called green growth lead to the environmental degradation of the Natura sites, of protected areas, and of the mountains throughout the country, by aggravating the local economies and the life of the working class and popular forces.
In conclusion, various forms are promoted for the increase in the degree of exploitation of the working class, to provide incentives and possibilities for new and profitable capitalist investments under the pretence of climate change.
8. No proposal of bourgeois management, whether it is a Keynesian or a neoliberal one, is able to cancel the laws of capitalist production, its anarchy and unevenness, the contradiction between the social character of production and the individual capitalist appropriation of its results.
The crisis is bred by the contradiction existing in the core of the operation of the capitalist exploitative system, in the sphere of capitalist production: the universal and contradictory commodity character of capitalist production makes the outbreak of the capitalist crisis to its contemporary dimensions inevitable.
The operation of production with capital increase as a driving force, periodically leads to its over-accumulation that hinders its reinvestment at a satisfactory rate of profit.
The bourgeois management proposals, such as the Keynesian ones and generally those of the so-called counter-cyclical economic policy, can only postpone the time of the outbreak of the crisis and temporarily intervene in the degree of capital depreciation, which would lead to a deeper crisis in the future.
Any state intervention for retaining temporarily an extensive and anarchistic depreciation of capital and any plans for the strengthening of business groups in specific sectors by the state set out the conditions for outbreaks of newer and deeper crises of capital over-accumulation. At the same time, the great differences of state intervention amongst bourgeois governments sharpen the unevenness and competition both within each imperialist alliance and amongst the alliances.
The general increasing trend of the organic composition of capital and the decreasing trend of the profit rate in the “transition towards the 4th Industrial Revolution” establishes a fertile ground for a new and deeper crisis of over-accumulation, as a result of capitalist development.
Essentially, bourgeois management is trying in vain to address the growing intrinsic contradictions of the capitalist system. The cure for one problem of the “sick man” becomes poison for another. The “cure” of the wage increases for boosting people’s consumption undermines the increase of the degree of exploitation for retaining the decreasing trend of the rate of capitalist profit. Conversely, the wage cuts undermine the sale of commodities at a satisfactory profit for creating surplus value.
The great state intervention with constant increase of state and private debt is not limitless, particularly in periods when competition is intensified and contradictions are sharpened amongst imperialist centres. The latest forecasts of international imperialist organizations (OECD, IMF, etc.) rule out the return to the pre-crisis level in the EU, Japan and the USA over the next two years.
The outbreak of the crisis leads to the partial depreciation and destruction of capital and temporarily gives impetus to the system for accumulating once again. History has shown that this does not always occur unhurriedly and without redividing the global market or waging wars.