The system we live under is a drug addict. It’s perpetually fixated on getting the next surge of profits, on maintaining the intake of financial assets that keeps it afloat. If an obstacle appears, it will find a way to keep the flow of capital going by sacrificing the wellbeing of those not in the exploiting class. Now that Covid-19 has presented an obstacle by forcing tens of millions of Americans out of work, the system’s only solution is to siphon vast amounts of wealth to the rich while forcing poor and working people to sacrifice our health and resources.
In terms of the relief fund that the government will inevitably need to pay to keep the economy semi-stable, Republicans and Democrats are both trying to figure out how to give the bare minimum amount of money to the poor. All of the lower income people who are struggling to pay rent, bills, and other expenses will get a payment of only $1200, and the money likely won’t come until around two months from now. Throughout this time, it’s estimated that the U.S. unemployment rate will rise towards about 30%, and a steady income will also become harder to find for many of those who can still work.
This is because our economic crisis isn’t just the result of a quarantine. The quarantine has been one of the catalysts that’s set off a massive and long-foreseeable financial bubble. The debt-ridden housing market is part of it, the unsustainable banking system is part of it, and the inflated stock market is part of it. In the coming months and years, it will escalate into the greatest downturn since the Great Depression, far worse than the 2008 crash.
The planned economic relief efforts will do almost nothing for us. We’ll overwhelmingly still be expected to pay rent, and to give money to the capitalist class in all of the other ways that America’s highly privatized economy requires of us. If one of us gets Covid-19 or any other medical emergency, we’ll still have to pay thousands of dollars to the insurance companies. For over forty years, the capitalist ruling class has made neoliberalism into the world’s dominant economic model because neoliberalism has made them steadily richer. They won’t give up this model now, not even in this time of crisis. So they can only make us redistribute even more of our wealth upward.
As the super-rich have lost hundreds of billions of dollars, and as the country has lost 500,000 millionaires, the Federal Reserve has been re-bailing out Wall Street. This bailout process began early last fall, long before the virus, so it’s clear that the oligarchy has been anticipating the current financial unraveling throughout the last year and has been trying to compensate for the losses. Gloldman Sachs believes U.S. GDP could contract 24% by next quarter, meaning the executives and the big banks will get trillions of additional dollars in financial infusions over the coming months and years.
The Fed may be able to easily manage this job due to the innate ability of governments to create their own fiat money, but how can this money be translated into material value? As Karl Marx assessed, value comes from labor. And without a properly functioning labor force, the capitalist class will continue to lose their economic leverage. So as much as they abhor Marx’ labor theory of value, the capitalists now need to adhere to its rules in order to protect their own interests.
This means that for Donald Trump, Fox News, many Republican politicians, and many of the capitalists who support them, there’s reason to dismiss the extent of the threat from the virus. Even though the U.S. is now the country where the virus is most widespread, Trump is determined to reopen all of the country’s businesses by Easter. The best argument Trump and his camp can find for this idea is that the harm from increased virus cases in this scenario of reopening is outweighed by the suffering Americans will endure if the economy remains largely closed.
While this argument is very likely incorrect and fundamentally callous, it acknowledges the nature of America’s hyper-capitalist, neoliberal economic system. Unlike China, which has universal healthcare, a strong social safety net, and a police force that brings quarantined people groceries, the U.S. has become a Third World country for the have-nots. The newly unemployed masses have practically no support to turn to. So whatever businesses Trump reopens in the coming weeks, there will undoubtedly be many people who disregard the intensifying health risks and start showing up to work again. People will die from Trump’s decision, but Trump and his camp ultimately won’t care, and likely most of the workers will go along with it.
This is how our drug addict system is avoiding change. And it’s why unless a strong welfare state comes to the U.S. and the other neoliberal countries that will be impacted by the economic collapse, global capitalism will continue on its current path of rapidly consuming itself. Now that the bottom has fallen out-the bottom of a labor force that can sustain economic growth-there’s going to be a contraction that continues for a very long time.
America’s economic shrinkage no doubt won’t stop after the next quarter. It could go on for several years, like was the case during the years following the 1929 crash. At that point, the U.S. dollar will likely have declined far more than it has so far in the last two decades, potentially because of a European shift towards another currency. This is becoming more likely as China’s enormous foreign Covid-19 medical aid wins over more countries to the side of the PRC, and as China’s New Silk Road initiative continues to rise; this week alone, Italy joined the New Silk Road in defiance of its allies.
Whether or not the worldwide movement away from the dollar will actually cause the dollar to collapse, U.S. economic influence is going to continue to decline while China continues to rise. This is what will really dig into the assets of the American capitalist class, regardless of how much they try to grab up the wealth of the U.S. working class. American capitalism depends on the continuation of U.S./NATO imperialist hegemony, and China’s movement towards global economic and military dominance is bringing this worldwide power dynamic closer to its end. China’s financial support for many countries that have suffered under neo-colonialism, as well as the anti-colonialist effects of the Belt Road Initiative, are also helping shift the economic leverage towards the countries which the West has dominated for so long.
At some point in the next decade, the U.S. corporatocracy will no longer be able to extract enough profit from the Third World to maintain the American economy’s former size. Combined with the costs from the continued collapse of the climate, this will make the U.S. economy unable to recover from the great crash of the early 2020s.
Or at least it won’t be able to recover for as long as it remains capitalist; history shows that socialist countries are able to improve the living standards of their people while avoiding catastrophic recessions. This means that in the coming years, far more of America’s poor and working people will have the potential to embrace the cause of socialist revolution, which is the only thing that can save them.
This scenario-economic meltdown amid irreversible imperial decline-is the chain of events that can lead to capitalism being replaced with socialism inside a core imperialist country. We poor and working class people in America may be facing a great hardship, but we can find our collective power by recognizing that the advantage is ultimately shifting away from our capitalist oppressors. Then we can organize towards the defeat of this system and the implementation of one that ends our misery.
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