Analysis Economy Global

An Epoch of Turmoil!

By Lal Khan

The invention and frequent use of the term ‘Fake News’ is not an accident. Such is the pathetic condition of the intelligentsia in Pakistan and around the world that to expose the harsh realities is considered pessimism. Putting forward a revolutionary alternative as a radical lasting solution is termed utopia at best and insanity in general. Fake news is the only optimism possible here. This situation is the outcome of a protracted and worsening crisis of the capitalist system on a world scale that few in the corporate media and intelligentsia would admit. The year 2018 marked the highest number of people, more than 820 million, that are suffering from hunger and semi-starvation on the planet according to an obviously conservative report by the UN. But it’s not just the poverty misery and deprivation, but unprecedented violence, terror, bloodshed, proxy wars, instability and turmoil in the world economy, trade wars, politics, social distress, mass upheavals and boomeranging world relations.

However, the serious bourgeois analysts and strategists seem worried about the scenario. The Time magazine wrote,

“Markets are soaring, but divisions are deepening among citizens of both developed and developing countries. Liberal democracy currently has less legitimacy than at any time since World War II, and the global order is unravelling. There has been plenty of turmoil in international politics over the past 20 years, but 2018 looks especially ripe for an unexpected crisis—the geopolitical equivalent of the 2008 financial meltdown. Governments, political parties, courts, the media, and financial institutions, which support and sustain peace and prosperity, continue to lose the public credibility on which their legitimacy depends.”

Donald Trump’s ascendency to the presidency of the USA has exacerbated these contradictions. The US state-sponsored annual survey that is produced by the CFR (Center for Preventive Action), wrote this year,

“The U.S. is now the most unpredictable actor in the world today, and that has caused profound unease…You used to be able to pretty much put the U.S. to one side and hold it constant, and look at the world and consider where the biggest sources of unpredictability, insecurity are. Now you have to include the U.S. in that. … No one has high confidence how we [Americans] would react in any given situation, given how people assess this president… This president might welcome the development as he wrote in 2015, ‘I don’t want people to know exactly what I’m doing—or thinking… It keeps them off balance.”

During the winter of 2008-9, with its trade and industrial production collapsed at a faster rate even than during the Great Depression. In the ten years since then, the world capitalist economy has staggered on only at sluggish rates of growth and investment, and at the cost of a massive accumulation of corporate debt. Aggregate global debt has now piled up to a colossal $247 trillion, equivalent to nearly 250% of world GDP.

The last remnants of the liberal post-war agreements established in the upswing of capitalism that was mainly the consequence of the massive destruction and then reconstruction after the world war II are finally being stripped away. The concessions given to dissipate the post-war movements of the workers and the youth that the ruling classes had to reluctantly give away; such as the free health care, social housing, unemployment benefit, free university education, decent pensions, care for the elderly and the social welfare state are being dismantled. For decades, the ruling class had been fretting about these reforms gained by the working people and society. With indecent haste, that web of liberalism is being stripped away.

The world capitalist economy has been struggling for ten years to get out of the recession of the 2008 crash but hasn’t been able to achieve a healthy and stable growth and economic development. Even the present relatively high growth rates with Trump’s temperate steroidal boost in the US are fragile and temporary. Despite “quantitative easing” (the central banks’ printing of undocumented money) amounting to $3.7 trillion in the USA, declining rates of profit have kept productive investment at a standstill. Instead, a huge bulk of loose cash is sloshing around, salted away in land, property, artworks and an orgy of predatory asset stripping. The accumulated shortfall in the rise of world output, set against projections from the preceding growth rate, has been calculated at 8.4% – equivalent to the disappearance of the entire German economy.

Unprecedented levels of corporate debts are tightening the Chinese credit crunch. The escalating global trade war stirred-up by Trump is ringing alarm bells in the bastions of capitalist powers—east and west. National governments have entered a downward spiral of protectionism, tariffs and competitive devaluations. In the event of a new crash, with interest rates already close to zero, there is barely any margin left for adjustments in monetary policy; and with global debt already at record levels, states are reluctant to borrow.

The long-established parties throughout Europe and beyond are eclipsing. The dominant nationalist conservative and social democratic parties have embraced vicious austerity and neo-liberal policies. The ruling classes exploited the support of crumbling middle-class and backward elements of conservative chauvinistic parties. The bourgeois, this time, is evading direct military dictatorships and propping up reactionary parties such as BJP (India), Islamicist and religious-liberal outlets, e.g. PTI in Pakistan. In Europe, UKIP, Front National, the Liga, the AfD, are neofascist parties.

Capitalism has declined from a progressive system at its inception, declined by the later part of the 19th century into a retrogressive order. The scientific-technological ‘revolutions’ from steam to electricity, telegraphs, railways, industrial conveyor lines, automation, computers, Internet and now the advent of Artificial Intelligence and other inventions and discoveries played a crucial role leading to a rapid growth in industrial production. However, these technological wonders remained in shackles of the bourgeois to enhance their rates of profits and intensify exploitation. The masses suffered from want and misery.

Today eight individuals own more wealth than seven billion human souls. Such an inhuman system is ruining the existence of mankind. Its socialist transformation through a revolutionary insurrection is the only genuinely optimistic perspective.

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