WWP First Secretary Holmes on ‘The developing global capitalist crisis’

This is an abridged version of a talk by Workers World Party First Secretary Larry Holmes at a New York City internal meeting on Dec. 6.

I want to bring to comrades’ attention the gyrations in the financial markets. As of now — and it’s ironic that it’s more or less the 10th anniversary of the 2008 near-financial collapse of global capitalism — the ruling class can no longer deny that a heavy economic crisis is descending upon the world.

Already there are signs of panic. I don’t think we should look for what happens on a day-to-day basis in the market or elsewhere as necessarily being a sign of whether this crisis has abated. It’s that the full extent, the full scope of the crisis will take a while to unravel. On the other hand, something could suddenly happen if a bank collapses or if a country goes bankrupt. I think they’re worried about Italy and perhaps other countries.

You hear a lot of discussion about the trade war, especially with China, and that’s a factor, but it’s symptomatic more than fundamental. China is not just an ideological, systemic rival that U.S. imperialism and world imperialism would like to do away with. It’s now a serious competitor. I believe they arrested a head of a big Chinese corporation in Canada. Whatever happens, we’ve got to take note of the danger here. This could be stepping in the direction of war — not just a trade war, a violent war.

You hear a lot about the Federal Reserve Board raising interest rates, which has been their program for about a year or so, and how that may be the reason why markets are freaking out a bit. Again, it’s more a symptom, perhaps a catalyst. It’s surface stuff. It could seem that it’s OK. There’s so much cash floating around because the central banks have flooded the market with money, so corporations to a certain extent can buy back their stock, especially if they’re encouraged by the president and other people, so we can’t just judge it on that. But what’s really happening is the inability of the ruling class to disguise the fact that the 2008 crisis never ended. It was just camouflaged. They just threw an unprecedented amount of money at it. The latest was big tax breaks. But to a large extent that’s all dried up, and they don’t have any more ammunition, at least ammunition that’s not based on terrible austerity.

In some sense, as bad as austerity has been, here and around the world, that may be one of the things coming up in this country. You see what’s happening in France.

It’s a continuation of the 2007-08 global financial capitalist crisis. And they don’t understand it, and those who do are frightened. What they’ve done in terms of flooding the market with free or very cheap money for 10 years is wholly unprecedented in history. Usually what they do to try to mask or conceal or derail a crisis is have a war. And, of course, the attacks on the working class. But this is the first time they’ve done this. I don’t know whether that means war is sort of next on the list of options. War is not what it used to be.

An irreversible global capitalist crisis

A central feature of the developing crisis is the financialization of capitalism, or in other words, imperialism. That’s a big part of imperialism, where paper becomes much more important than production. Trading, investing, money that has no real value because it’s just paper, and it’s just blowing up huge debt balloons that will be bursting. They’re afraid of another balloon in housing and in other places.

What we’re really talking about here is a profound crisis of capitalist overproduction. It’s not a cyclical crisis. It is — at least as far as history and our own Marxist assessment of capitalism would suggest — a permanent crisis. The crisis of the system has reached a point where cyclical crises don’t play a role. The crisis just stays there. And it’s a question of which class prevails.

Is the capitalist class able to dump enough suffering and misery on the masses of the world to buy time to find a way to revive itself? It’s very good at that; it has a lot of experience. Or do the working class and the oppressed of the world have enough time and the wherewithal, the leadership, the revolutionary spirit and inspiration, to use the opportunity to get rid of capitalism?

So we have to get ready for a protracted period. It will be very overwhelming and very difficult in so many ways. Not just companies failing or closing down; there’s so much of that happening, retail stores giving way to Amazon and so forth. There’s overproduction in so many spheres of the economy — in technology: Amazon, Apple. The auto industry on a global basis. GM is laying off 15,000 workers here. That’s just the beginning.

The capitalists today were hoping that the OPEC countries would make serious cutbacks in oil. Why? A lot of times there’s geopolitics, maneuvering, and the struggle between those countries that have oil and the imperialists, and that’s what dominates what’s happening with oil. But this time they don’t need the oil because there’s a glut. They don’t need it for the factories. They don’t need it for manufacturing. So it’s a product of overproduction, and a severe example of the falling rate of profit.

Just in terms of what could happen: Social misery, pauperization and precariousness are already pronounced. But it’s hidden, hidden behind unemployment numbers that are fictitious. It’s going to get worse. There could come a point when there’s no food in the supermarkets, or that you have to pay 10 times more, or that ATM machines don’t return your money. I’m not saying that this is going to happen tomorrow. But when there’s a full-blown global capitalist crisis, it disrupts everything in society. More unemployment. More social crisis. And of course finally there’s social upheaval and class struggle.

We may be facing the final chapter of capitalism, even if it’s an extended chapter with ups and downs. Some of the things that Fred Goldstein put in his two books, “Low-Wage Capitalism” and “Capitalism at a Dead End,” and of course what Sam Marcy wrote about in many books, but particularly in “High-Tech, Low Pay,” may already be dated.

Marxists have been saying that for many, many years. They were saying it around the time of the Russian Revolution. They probably were saying it before the beginning of the 20th century. But it’s never been truer, because never in human history have the productive forces more wildly, violently outgrown the capitalism system.

Understanding this is important. They can’t put it together again. The only thing they can do is wage war, and wage a more violent, destructive war against the working class.

Up until now, while a political crisis and struggles in the ruling-class political parties raged around Trump, as long as the rich were making a lot of money they seemed not to be so interested in that. He can do whatever he wants, say whatever he wants. A lot of what he’s doing is very dangerous. But we shouldn’t forget that just because Trump says fascist, racist and misogynist stuff, it doesn’t mean that the others don’t say it behind closed doors. It’s just that, because of the political crisis, he feels emboldened to say it to everybody — probably one of the important distinctions, not a fundamental one, but a sign of the times.

But with the economy turning, the struggle in the ruling class around Trump may exacerbate the economic crisis. That’s a potential. And it could embolden the neo-fascists and racists. They’re already doing stuff, but they appear to be organizing to respond to what they view as a deepening struggle in the ruling class that could involve Trump having to leave office or his family going to jail.

Political developments here and abroad

In the midterm elections, the Democrats took the House. Some people are very excited because a handful of Democrats seem to be distinctly more progressive, like Alexandria Ocasio-Cortez, the Latinx woman who became a congressperson from Queens and identifies as a social democrat.

I don’t know how important this is to comrades and to the Party. Whether it’s the most important thing about the election is a debate. But it is important for the Party to know what’s going on in the Democratic Party. And now with the economy turning, the struggle might heat up involving those who view themselves as being on the left of the mainstream, to the left of the Clintons. It might even heat up to the point where, whether during or after the next presidential election in 2020, there might be a split.

Whether we view it as important to the Party’s program, we’d better pay attention to it because we know what the Democratic Party is not. But we also know that a lot of oppressed people and a lot of workers, including immigrants, look to it. So what’s happening inside it is of interest. It doesn’t change our analysis of it — it’s a capitalist party — but we see what’s happening in the South, so it’s contradictory. And also what DSA is doing, and how other socialist tendencies are posturing, whether they become a part of it, whether they try to influence it.

We’re going to be talking about China a lot. I listened to Sara’s excellent report. This is very important for our preparation for defending China. It’s something that we’re going to have to ratchet up, and the Party should go over some of its contradictions. When we’re amongst those who are against China, or draw an equal sign between China and U.S. imperialism, we need a way of defending China that is more than just saying that everything they do is great, but shows that they have contradictions.

One of the reasons that China was compelled to turn inward was to develop its productive forces — which it has every right to do. It was an economically backward country with a huge peasantry. Who’s going to tell them that they can’t develop their productive forces, that there are dangers involved? Sara and other comrades have raised the dangers involved, but there’s another question, and it was true for the Soviet Union, too.

If the global class struggle from the workers’ perspective had been on a different level, particularly in the West, who knows what kind of impact that might have had on the course the Chinese Communist Party would take? Around the time of the Russian Revolution, all the big leaders were saying things like “the linchpin of the global revolution for communism will be the United States.” It could sound chauvinist, but that wasn’t the reason they were saying it. If the struggle of the workers in the West were so big, so pronounced that it became a material factor, then it stands to reason that it would be a factor in China, in Cuba, in the former Soviet Union, in Vietnam, in the DPRK, and in any other place trying to hold on. Who knows what kind of impact that might have had on the course that the Chinese Communist Party would take.

The current crisis has a dangerous side. Until there is a pronounced fightback that changes the relationship of forces, it just brings misery and suffering to the working class. And division. In my document prepared for the plenum we had last May I said that, I’m paraphrasing here, the destructive force of a capitalist crisis is not only applicable to the working class in general; it is a force, whether visible or not, in every union, every progressive movement or organization, including our Party.

If we want to be true to our mission and the mission of this Party, we’ve got to discuss the world and world events, and try to come to some kind of agreement on our analysis and direction. We must be prepared for an enormous and historical phase in capitalist development that may open the door, with all the contradictions and all the setbacks and backwardness of the working class. If we don’t try to do this, after a while the Party becomes virtually indistinguishable ideologically. And it’s “Why are you in Workers World?” “They’ve got a lot of people, I like their people, they’re nice, they have good positions on things, which is very important, especially imperialism and the national question and misogyny and LGBTQ liberation.” But as good and necessary as those things are, they are not a substitute for an analysis of what’s happening in the world.

Unorganized lead the way in France

An interesting development that puts into relief what I’m talking about is the rebellion in France that they call the Yellow Vest rebellion. They’ve got huge unions in France. It’s not unusual for them to shut down the country — transportation, trucking, government workers, everything. And they do it. And they’ve been fighting a very militant battle against anti-working-class austerity measures by the Macron government. In comparison to other countries, it’s a pretty militant working class. But this struggle has been so militant, so explosive, so out of control that, while it probably won’t bring down the Macron government, it’s the closest thing in recent history to an uprising potentially bringing down a big bourgeois government.

Who organized it? It wasn’t organized by the Communist Party. It wasn’t organized by those parties to the left of the Communist Party. I don’t think it was organized by the anarchists. And it wasn’t organized by the neo-Nazis, by Le Pen forces.

All those forces are trying to influence it. But it came from below, from a section of the working class that is being pauperized, that is becoming precarious. There are probably many reasons for them exploding, but the catalyst was an increase in the taxes on fuel. And people just got in their car and went to the nearest big city and rebelled. People have died. Things have been burned down. There’s a big demonstration this Saturday, and I was just hearing something on the radio about all the police that they’re mobilizing. It’s important to note that those forces on the left and in the working-class movement did not organize this.

The French working class on a historical basis has certainly been more advanced than the working class we are dealing with here. But I think that in France this is a case of sections of the working class who may not be in unions but may just be out there on their own, using social media to organize themselves without any party — whether it’s six months old or a hundred years old — doing it. It shows some of the problems of the working-class organizations: They’re used to functioning in a certain way; they’re used to representing some people but not other people; that as the capitalist crisis deepens, precisely because the working-class movement tends to be narrow and not embrace sections that are not in a certain industry or a certain union, others are going to have grassroots explosions.

It’s dangerous mostly in this respect: Sometimes they could be led by the racists and neo–fascists. In this instance they were not. And that’s significant because the neo-fascists are strong in France, and I wouldn’t be surprised if a lot of the people involved in the Yellow Vests uprising had voted for Le Pen. But this is different. And it may spread. It already spread to Brussels. I’m sure the police, the state in every country in Europe are exchanging information.

It may even spread to this country, like the Occupy movement. The Occupy movement was a different section; it was the youth. But what was intriguing about Occupy was that, like this protest in France, it was not organized by socialists, by parties that had been around for a long time. It was not organized by the labor movement. Anarchists, quasi-anarchists, people who were not even political but were just angry; that’s how it rose up. And the fact that the existing parties on the left did not do it — and I include Workers World Party — demonstrates to some extent that we’ve got our work cut out for us. You have to be careful about doing things the same way and just viewing it as this is the only way that things can be done. Maybe there’s nothing we could have done to prepare for the possibility of playing a leadership role in Occupy. But any serious revolutionary organization has got to think about it. We don’t want to be so dependent upon our old habits that we have no sense of the possibility of other sections of our class moving and not try things that we never tried before. If the Yellow Vest protests spread throughout Europe, I hope the Party finds a way to show solidarity with them.

Getting ready for the new year

The Party, in addition to taking initiatives in the struggle against racism and the attacks on migrants, should try to open up a struggle in the movement to be more internationalist. First in a symbolic way, but more and more in a substantial way. Technology has made internationalism far more available. There are all sorts of reasons why activists prefer to do things locally, but in order to revive our ideological edge we’ve got to try to push the radical forces toward an internationalist perspective. If these workers in France who weren’t active until last week are able to use social media to organize themselves — the same thing for education workers in Kentucky and West Virginia — then we can do this. It’s more a question of habits and consciousness than know-how.

Lessons of centennial of the Comintern

This March 2-4 will be the centennial of the convening of what was called the Comintern, Lenin’s International. It was an attempt to organize the communist movement on a global basis, to be in touch and coordinate with and help the struggles all over the world. Lenin and some of the other Bolsheviks were very dedicated to this because material circumstances did not allow them to lose the lesson.

They wanted some of the richer countries in Europe to make revolution. It almost happened in some countries — Poland, Germany — at that time. They realized that for their revolution to become more secure, more consolidated, it was going to require that the workers in other parts of the world, particularly in the industrial centers, do something, come to their help. That was very much on their minds.

Consciousness about the need for global class solidarity must be deepened.