The polycrisis and the challenges for the left
Peter Mertens at the Havana International Conference For World Balance
I. The polycrisis
II. The challenges for the left
II.3. working class and youth
It was exactly 175 years ago in Brussels that Karl Marx and his comrade in arms Friedrich Engels wrote the Communist Manifesto, one of the most influential political writings of modern history.
Brussels is not Davos. In Europe's highest town in the Swiss Alps, bankers, top industrialists, top politicians, billionaires and lobbyists are meeting these days at the World Economic Forum. Like-knows-like at the highest level. It's the merger of big business and politics.
It's been 175 years since the Manifesto was written and today the director of that World Economic Forum declares that "Eighty percent of experts think we are running from one crisis to another." According to her, we're in the midst of a 'polycrisis'.
A polycrisis, when several crises are interacting: we've got an economic crisis (inflation and recession), an environmental crisis (climate and pandemic) and a geopolitical crisis (war and international divide).
Today the world is on the brink of great changes. Perhaps even more so than in 1848. The United States-dominated era of capitalist globalization is coming to an end. The world is shockingly dividing into new poles. This poses great challenges for the left. It is time for the left to resource. To combine steadfastness of principle with flexibility, to bravely take a class position again, and to firmly turn toward the youth.
I would like to thank the organisers of this conference For World Balance to allow me to tackle these issues with you today.
I. The polycrisis
A number of government leaders and central bankers try to assure us that the world will soon be ‘back to normal’. They maintain that our economies will return to pre-pandemic levels.
But that won't happen. Everything indicates that: the Great Moderation, the period when inflation remained low and activity was more or less stable, is behind us. The three main economic centres - the US, China and Europe - are slowing down. It cannot be ruled out that a third of the global economy could fall into recession this year.
For years, China was a growth locomotive in a sluggish global economy. But the Chinese locomotive is slowing down due to the end of the real estate bubble, setbacks in supply chains and the erratic evolution of the pandemic. 'For the first time in 40 years, China’s growth in 2022 is likely to be at or below global growth,' says the Managing Director of the International Monetary Fund.
Actually, the global economy never really recovered from the 2008 crisis. When the financial elite bailed out private banks and passed the bill on to working people with drastic austerity. Central banks injected thousands of billions of fresh money into the system, but the so-called ‘free money’ mostly piled up in the coffers of big business, as a fire accelerant for even more debt and speculation.
A year before Covid-19, a new recession announced itself. Germany was then the first European country where growth dipped below zero. When Covid-19 broke out, the patient was already sick, and everyone knows a sick patient to be less resilient. The economy had to go straight to intensive care and on a drip. A second injection of massive public money followed to save it from the worst. Governments plunged deep into debt with hundreds of billions of euros in bailout plans and direct aid.
The goal was primarily to save big business. Monopolies, airlines, car manufacturers and other giants received deferrals of payment, guarantees and cartloads of subsidies. Meanwhile, tons of ordinary people and small businesses went under.
Even before the pandemic was over, forecasts of ‘general recovery’ for 2021 were rampant. Except, that never happened. Because global manufacturing supply chains were disrupted and they faltered. Prices were already rising steadily months before the war in Ukraine broke out.
The war came as a second blow. The sick patient, who had never really recovered, developed complications. All of a sudden the governments had to arrange for a totally different energy supply, due to economic sanctions and counter-sanctions. Energy and food prices went through the roof, because of big monopolies' profiteering. The grain supply of a lot of countries in the South was compromised. Governments were pressured to splash out on military spending.
Today, additional debt can no longer save the system, as it could in the banking and corona crises. The entire financial system is facing a huge stress test.
Inflation is everywhere. Even though price increases are over their double-digit "peak" of ten percent and more, energy prices won't return to what they were before. They will continue to soar for the next three years. Meanwhile, food prices continue to rise. Monetarists want to combat inflation by limiting money supply and raising interest rates. No more "free money". The ultra-low interest rates of the past 15 years have pushed public and private debt to unsustainable record highs. The World Economic Forum estimates that Tunisia, Argentina, Egypt, Ghana, Kenya, Pakistan and Turkey are in imminent danger of default. Southern countries are the first victims.
As usual, they're trying to pass the buck to the working class and the Global South. It is a class war imposed from above. They're preparing a new general climate of moderation and austerity. Four decades of neoliberalism have led to sharply decreased real wages. This is a huge transfer from labour to capital: wage restraint on the one hand and phenomenal profits on the other. The fight to block prices and raise wages is the first economic class struggle of this new era.
During the Cold War between the US and the Soviet Union, China was an outsider. It belonged to neither camp in the 1960s and was at times more critical of Moscow than of Washington. Until reconciliation with the US in 1971, China had to pursue development within its own borders, disconnected from the rest of the world.
In the 1970s, China began to attract foreign capital, and by the late 1990s the Chinese economy was largely integrated into the global capitalist system. It imported raw materials, exported manufactured goods and services, and increasingly engaged in foreign trade. They started to develop the New Silk Road. Despite their rivalry, Washington and Beijing complemented each other during that period. China industrialised at a fast pace and the US financialised its economy. These two processes were complementary, and at the end of 2001, China also became an official member of the World Trade Organization.
US President Barack Obama put an end to that parallel development. With his Pivot to Asia he explicitly set his sights on Beijing and threatened a trade war. In this way, he wanted to prevent China from standing completely on its own feet technologically and being able to threaten American hegemony. After Obama, Donald Trump continued the trade war with all sorts of protectionist measures.
The Biden administration increased the pressure even more in October 2022 and launched a technology war against China. Biden banned export to China of advanced integrated circuits, i.e. chips, of the technology for designing them, and of the machinery for producing them. He wants to stop Beijing from advancing to a high-tech future and to the latest generation of chips, which they would need for artificial intelligence and advanced weapons systems, among others.
These trade wars and technology wars are widening the gap in the current world trade system. China and other emerging economies may establish an international trading system, separate from the old US-dominated system, to secure their position in the global industrial chain. And so the new Cold War also marks the end of a period of unimpeded capitalist globalization since the 1990s.
Meanwhile, more and more countries are choosing an independent course. The vast majority of countries reject Russia's war against Ukraine, and rightly so. But outside the West, few countries are willing to follow the sanctions policy imposed by Washington. This is an unprecedented change, a revolt, as it were, of non-Western countries against the established order. A new group of ‘non-aligned countries’ no longer wish to dance to the US' tune. Thus ends the brief period of a ‘unipolar world’, in which the US dictated everything through its controlled ‘globalization’ of the economy, with the dollar as the international means of payment.
Many countries in the South refuse to be forced to take sides. Meanwhile, the European Union seems to become more and more dependent on the US. It would seem that Biden is pushing European Commission President Von der Leyen around.
The war in Ukraine is costing bags of money. In Germany, eighty years of history has been reversed in a few weeks. The country is investing more than 100 billion euro in its military. It's buying massive amounts of new weaponry. They're not buying it from a European country, no. They're buying it in the US, where the arms industry is experiencing a golden age. Others followed the German example. France, Poland, Lithuania, Denmark, Sweden and Belgium: They all increased their military spending and are buying new equipment from the US. To pay for that, they are scaling back all kinds of public investment projects, and blocking wages. A military war on the outside and a social war on the inside: these are the two sides of the same coin.
The US forced Europeans to tear up gas contracts with Moscow and look for alternatives. One of those is extremely expensive American shale gas. Last fall, the price of a tanker load of liquefied gas from the US rose from 60 million euro per Atlantic crossing to 200 to 300 million euro. US energy monopolies cash in and the European industry suffers. The US chips embargo against China also hits European high-tech companies such as ASML in the Netherlands and Carl Zeiss in Germany.
But that's not enough for Washington. They are pumping fortunes into a new protectionism. Biden’s Inflation Reduction Act will provide no less than 370 billion dollar in subsidies to businesses over the next 9 years. This ‘climate protection program,’ as the US government calls it, provides massive purchase incentives for US-made e-cars and batteries.
When you add the rising energy prices in Europe, it becomes clear why some energy-intensive companies and chemical giants such as BASF and Tata Chemicals are considering moving some of their production to the US. Swedish battery manufacturer Northvolt may also be putting expansion plans in Germany on hold to invest more in the US. Washington wants to subsidize Northvolt with bags of money for this purpose. The US is fanning the de-industrialization of the European continent and is doing so openly.
Europe is reacting lukewarmly or not at all, and Brussels is increasingly tagging along with Washington. Supporters of an independent European Union are on the defensive, but they aren't finished yet.
The world's tectonic plates are shaking. In the foreseeable future, two of the world's three largest economies will be Asian: China and India. When an emerging power puts pressure on the regional or international hegemony of an established power, like what China is doing today, we call it a Thucydides Trap. That trap is shaking the world. But the current debt system can also rock the world. What if China is no longer able, allowed, or willing to participate in the large international debt system? Then what happens?
And yet a bipolar world is not the only possible option. China does not favour a bipolar world with two opposing blocks. It wants to continue its own path of stability, and continue to trade with the world. Many forces elsewhere in the world also seek their own development and desire a multipolar world. We support that path to address the great challenges of the third millennium: peace, the fight against inequality, climate degeneration, global health.
II. The challenges for the left
Crises do not automatically lead to social awareness or a pull to the left. We know that.
A lot of people are looking for security and fold back on theirselves. Emancipatory frames of mind as well as perspective are often lacking. This is an ideal breeding ground for pessimism and defeatism, and all sorts of far-right charlatans like to plow that field to present themselves as the new Messiah.
It is not an easy period for the left. But there are many possibilities if the left dares to re-energize, to start again from principles, to be flexible, to appeal to the working class and to the youth. This is how we see it, from our humble experience in a small country in Europe. A small country where not only the saxophone and smurfs come from, but also the headquarters are located of NATO and of the European Commission.
II.1. Being principled
Our party, the Workers' Party of Belgium, has grown significantly over the past decade. Since the Renewal Congress in 2008, the party has grown from 2,800 members to 25,000 members. With 8 percent of the votes nationwide, we count 12 seats in the federal parliament, and 1 seat in the European parliament. In the European context, such progress is more of an exception for a Marxist party.
In Belgium, too, the political court culture is on shaky ground. Suddenly communists are in parliament. These threaten the culture of like-knows-like. And then there are an awful lot of mechanisms to domesticate rebellious parties. Parliamentarians are disproportionately paid, from the understanding that those who become dependent on power structures will be less inclined to denounce and change them. The pressure is great to stay in the little parliamentary bubble, among academically educated people, all of them tight in suits, all of them wallowing in their own self-righteousness, far away from the real world.
How do we deal with that? We start from the principle that you can only change the balance of power on the ground through a process of social action, organization and awareness raising. All of our cadre and all of our parliamentarians have to be on the terrain, in the real world, at least half their time. Parliamentary work is in function of social struggle and not the other way around. Furthermore, all our cadre and MPs live on a median blue collar worker's wage. They remit the rest of their income to the party. Because as we say: 'He who does not live as he thinks, will soon think as he lives.'
Possibly even more important: not the parliamentary group who takes the decisions in our party. Not the parliamentary group works out our position on the pandemic, the energy crisis or the war. It is the elected party organs that do that, after thorough debate. Parliamentarians are not ‘above’ other militants in the party; they are at the service of the party. This is a matter of principle.
In a world where the big-mouthers of the right try to drown everything out, the left cannot move forward unless it starts from some strong leftist anchors or principles, we believe. A cornerstone to this is: each time make a thorough analysis of the situation, a sober analysis from a Marxist perspective. If you skip that step, you start hitting in all directions. Taking a class position, that is the basis.
This is not always easy. When Russian tanks invaded Ukraine, everyone had to take a stand. There is the right of defense against foreign interference. Sure, hostilities had already started from 2014 but that does not take away from the fact that the Russian invasion is against all international law. But it also quickly became clear that the war has a double nature, a Janus head so to speak. A defensive war against the Russian invasion on the one hand. A proxy war by the United States and NATO against Russia on the other hand. That proxy war tilts the situation. Initially, war hysteria in Europe was enormous: everyone had to march blindly along with Pentagon orders. Any other point of view was reviled and marginalized. It was a bit like World War I in 1914, when war budgets had to be approved everywhere.
At such times, it is especially important to make a thorough analysis and take time and space for sober debate in the party. On that basis, we did not approve the additional budgets for the military. We voted against the sanctions policy and against arms supplies. And we actively supported the development of the peace movement, 'Europe for Peace'. Often we were alone in parliament. But it is better to go against the grain in the short term than to go against history in the long term.
II.2. Being flexible
This brings me to our second premise: to be flexible. Because although being principled is crucial, it is not enough. Those who are only principled become rigid. Being right is not enough, it is essential to also get right and change things.
The issue surrounding the war is a vital one. There was pressure on our party to still vote along with the resolutions, to "not isolate ourselves" and to "not let be destroyed what has been built up in recent years". Then it is important to keep a cool head and be able to rely on solid unity in the party on the principles. But that is not enough. We cannot be content to sit on a chair and pour out ‘great truths’ over people's heads. That's not how it works.
We have seen that some ultra-leftist movements like to entrench themselves in their own bubble, have no political sense of the situation and safely provide a few easy slogans from behind their desks. According to those people, it can't be leftist enough. One must do this and one must do that, you hear from them. But you don't respond to right-wing pressure with ultra-left rhetoric. You respond by engaging in debate, by argument, by education, by conviction, by willingness to listen and by patience, on the basis of a solid class position of your own.
There is a distinction between strategy and tactics. We reflect on strategy in order to know where we want to go, what our long-term goals are, how we want to achieve them, who the allies and adversaries are. We reflect on tactics to find the best adapted path and methods to move forward in that direction. We do not get ahead by pouring our ‘whole program’ over people. The left, we believe, must master the art of moving minds as well as hearts. Mind AND soul. This happens when people live their own experiences, when they get behind a cause, get moving, get organized, and social action or struggle occurs. Therefore, it is essential to take into account the existing balance of power, the level of consciousness.
In Europe, war and speculation have led to huge increases in energy prices. This is what people feel every day. We advocate taking the energy sector out of the hands of monopoly companies, which today impose extortionate prices and make a real green transformation impossible. We are campaigning for that transition. But at the same time, we also opened ‘energy helpdesks’ for people who are struggling with their energy bills. In doing so, we try to help, very concretely, and preferably seek collective solutions. This tangible aid also strengthens our political campaign.
Being principled and being flexible go hand in hand for us. A flexible party is one that knows how to adapt to the circumstances in which it operates. Tactics are an integral part of Marxism. Sensible tactics know when to attack, when to defend. But tactics are always secondary to strategy. Our intention always remains to make progress toward our strategic goal of socialism. Our tactics must pull upward and not downward.
II.3. Working class and young people
The final issue is that of the forces of change. What forces do we rely on to impose change? The working class, Marx and Engels wrote in their Communist Manifesto. Today the world is much more industrialized than it was then. We think it is time to once again proudly start from class politics.
With the corona crisis, it became clear: not the stock markets make the world turn, not the stock exchange makes the earth rotate, not the chattering class pulls the chestnuts out of the fire. It is the working class: those who sell their labour for a wage, those who work in factories and in the fields, those who process the meat, those who distribute the goods with trucks and trains, those who load and unload the ships, those who fill the shelves, those who bring the packages around, those who organize care.
But as quickly the coronavirus was forgotten, just as quickly the working class was forgotten. And immediately class politics as well. For us, a left party must give a central place in its ranks as well as in its leadership to working men and women. And base its politics on the class interest of the broad working class. To us, this should be obvious, but it is not.
There are more and more movements that no longer do economic analysis. Who no longer speak of the "working class," but only of the "center" and the so-called "middle class". Gone is class analysis, gone is production, gone is the workplace and gone are the heroes of the corona crisis. And once all class distinctions have been shown the door, all sorts of identitarian debates stroll into the dominant discourse. All possible real and unreal contradictions are stirred up and before you know it, common people are screaming and hitting at each other.
We think it is time to take a class position again. It would be absurd to leave the working class to the Trumpists, Bolsonarists, Voxians or other far-right rat-catchers of Hamelin. Yes, we fight racism, yes we fight sexism, yes we oppose every form of exclusion. But then we always do so from the perspective of strengthening and consolidating the clout and unity of the working class. A divided working class cannot win. Not yesterday, nor today.
For us, the focus is not only on the working class, but also on the youth. Those who live, get older, that is a law of nature. But at the same time, your organization, party, union, or social movement should not age. So you have to be active on that level.
The youth carries the future. Youth is not inhibited by the power of habit, by routine or by the weight of the past. Youthful enthusiasm is liberating, and a source of commitment and contestation. Young people are not yet nested in a particular family situation. They have the courage to challenge the seemingly unchangeable. It is no accident that youth have played an important role in major mass movements in the past century. Just think of the Cuban Revolution, the anti-fascist resistance, the fight against colonialism, the movement against the Vietnam War, the civil rights movement, the May '68 movement, Occupy Wall Street, Black Lives Matter, the global Fridays for Future climate strikes....
We need youth to learn from them. To learn from their energy, to learn from their enthusiasm and to learn from their organization and communication techniques. Today we are in the middle of the fourth industrial wave. Artificial intelligence, dynamic networks, pervasive robotization, you name it. In the ten thousand years of technical development since the agricultural revolution, the older generations have patiently passed on their knowledge and experience to the younger generations. But what is taught today is often obsolete within 20 years. The pace of change has become so fast that teenagers have to teach their parents the latest digital techniques. This is unseen and causes much distress. But it does place youth at the forefront of this stormy development.
Thank you for allowing me to speak before you today about the polycrisis and the challenges for the left. A great many people on this planet are looking for a just, social and ecological answer to the polycrisis. The deeper different movements seek to realize their dream of social progress and justice, the more they collide with the limits of capitalism. We believe that socialism is necessary, to ensure lasting and deep social, ecological and democratic development. Socialism is needed to anchor sustainable change, to put the problems of people and the environment at the center, and to put the wealth creators themselves at the wheel of society. Socialism 2.0 is our alternative to a world where people come first and not profits, a world that turns on people size, not profit size.