Global Capitalism, Global Pandemic, and the Struggle for Socialism
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- Published on Tuesday, 14 April 2020 09:18
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A Socialist Project e-bulletin ... No. 2056 ... April 14, 2020
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Global Capitalism, Global Pandemic, and the Struggle for Socialism
Stephen Maher and Rafael Khachaturian
We are now in the grip of one of the worst economic crises in the history of modern capitalism. As the Coronavirus pandemic forces people to stay home and businesses to remain shuttered, the St. Louis Federal Reserve has projected 30% of the workforce will become unemployed, significantly surpassing the level during the Great Depression. Meanwhile, Goldman Sachs has forecasted a massive 24% drop in GDP -- more than twice as large as the previous postwar record.
In seeking to manage this unfolding catastrophe, the American state has once again taken radical steps to save the system. The Federal Reserve has not only pumped liquidity into the financial sector, but has also expanded its purview to buying "unlimited" corporate debt. Thus the $2-trillion "stimulus" bill that passed Congress, the largest in US history, is only one part of the picture. The true center of crisis management lies in agencies that have long been shielded from democratic oversight.
These events... have rocked the shaky foundations on which the previous crisis was resolved, and further eroded the legitimacy of neoliberalism. Decades of austerity politics driven by the logic of "There Is No Alternative" have left the state scandalously ill-equipped to address the pandemic. As the death count continues to rise, increasingly drastic measures such as "reopening" the economy are considered -- exposing the working class to mortal danger for the benefit of restoring capital accumulation.
Though the bailout of the banks after 2008 stabilized financial markets, it also led to widespread popular anger that drew neoliberal policies into question in a new way. The project of globalization pursued by the state since World War II, from which capital continued to benefit handsomely, was no longer "common sense." The American state had succeeded in temporarily containing the crisis, but at the expense of the legitimacy of neoliberalism -- which only further crumbled amidst the austerity that followed.
This also discredited both political parties, which were both complicit in decades of neoliberal restructuring. It created space for Bernie Sanders and Donald Trump to make the case for alternative hegemonic projects, which, at least on the surface, were not at all neoliberal: "America First" nationalism, on the one hand, "democratic socialism," on the other. With the 2016 election of Donald Trump, as well as the growth of the democratic socialist insurgency, the political crisis reverberated from the political parties throughout the state as a whole.
That the current crisis has emerged on Donald Trump’s watch opens the possibility that he will use it to further shift politics to the right. The main alternative to this is a beleaguered neoliberal establishment, which has itself supported increasingly authoritarian means to stabilize capitalism. Yet the crisis has also created an opening for the left, as the claim that expansive state policies to support social welfare are unfeasible collapses in the face of the emergency measures enacted in recent weeks. It is up to us to build on this, making the case for a fundamentally different kind of society.