Political and Economic Crises (Pt 15)

Trump orders assassination of top Iranian general

On Jan. 2, 2020, Donald Trump ordered a drone strike that the next day assassinated among others General Qassem Soleimani, considered Iran’s leading general and one of the most powerful and popular leaders of the Islamic Republic. Soleimani was killed at the Baghdad airport while on a diplomatic mission aimed at improving relations among Iran on one side and Saudi Arabia and the United States on the other. The murder of such an important military and political leader while on a peaceful diplomatic mission has few if any precedents in the history of diplomatic relations stretching back over thousands of years. Rather, Trump’s action is straight out of the history of the 20th-century New York mob.

This has brought the U.S. to the brink of full-scale military war with Iran, and frankly, as I write these lines it is hard to see how this war can be avoided. The U.S. is already at war with Iran in the economic and political sense. Iraq’s Parliament has now demanded that the U.S. withdraw its 5,000 troops in the country, which are supposedly there to fight ISIS, though the U.S. has announced it has now “suspended” its war with ISIS.

Trump responded by saying he will refuse this demand unless Iraq repays the U.S. for the “aid” it has given Iraq and threatened Iraq with vicious sanctions if it does not withdraw the demand. For its part, Iran has announced it is finally pulling out of the nuclear accord it signed under Obama that exchanged intrusive inspections for promises by the U.S. and its imperialist satellites to relax economic sanctions — dial back economic warfare. These events have raised the chilling possibility that the year 2020 could be for this century what 1914 was to the last.

Trump’s action should remove the illusions shared apparently by the government of Russia and even a few progressives that, however racist and reactionary he is, in other ways Trump is part of some right-wing “isolationist” anti-war tradition that opposes the “Wilsonian” imperialism that has long dominated the Democratic Party, and since at least 1940 the Republican Party as well. In reality, Trump’s economic and political nationalism has always pointed in the direction of war, not peace, whether Trump personally wants war or not. History shows that the beginning of a major war brings with it a “rallying around the commander in chief.” Such an effect could considerably increase Trump’s chances of reelection. True, as the experience of many countries shows, as wars drag on public support for the war and the government turns into its opposite. But by then, Trump may be thinking, the election of 2020 will be far behind him.

In general, there seems to be an unofficial rule that U.S. presidents don’t start major military campaigns in election years. Otherwise, every president facing dubious reelection prospects would be tempted to start a war. But Trump’s Bonapartist and autocratic tendencies mean that he does not feel bound by such a rule, any more than he feels bound by the rule that the president should not criticize the Federal Reserve System.

However, while Trump’s unstable personality and autocratic tendencies are extremely dangerous factors in the current crisis, it is not the main factor behind the current war danger. The roots of the current war crisis can be traced back to George W. Bush’s decision to invade Iraq — supported by Democratic Senators Hillary Clinton and Joseph Biden — on March 19, 2003. The Bush administration intended to create a new Iraqi puppet government that would provide a thin veneer over what would amount to U.S. colonial control of Iraq.

But this is where the problems began. It turned out that, with inevitable individual exceptions, virtually the entire Iraqi population opposed the U.S. invasion and occupation of their country. The U.S. armed forces encountered no major problems on their march to Baghdad as the (by then thoroughly disarmed) Iraqi army declined to confront the invaders in a hopeless conventional war and simply melted away. As a consequence, in the three-week “conventional war” the invading U.S. — and some British — forces experienced few casualties. George W. Bush and the U.S. media soon declared “mission accomplished.”

But then the real war — the people’s war against the U.S. invasion — began, and U.S. casualties mounted into the thousands. Eventually, the U.S. government, realizing that it had miscalculated and was facing the long-feared “new Vietnam” in Iraq, moved toward a political solution.

As part of this political solution, the U.S. made a deal with Iran and its supporters in Iraq to share control over Iraq. These supporters included the Shiite clergy, who as the traditional religious leaders of a large part of the Iraqi people enjoyed a certain amount of support, unlike the puppets the Bush administration had originally intended to install. In an attempt to make this solution work, the Obama administration made the “nuclear deal” with Iran.

In exchange for intrusive inspections and largely giving up Iran’s nuclear power program, the U.S. and its imperialist satellites promised to ease sanctions and move gradually toward a normalization of relations. This was especially desired by the European satellite imperialist powers such as France and Germany that are eager to trade their manufactured goods for Iranian oil and in this way reduce their dependence on what they view as an increasingly unstable and unreliable U.S. In this way, it was hoped, the joint control of the U.S. and Iran over Iraq could be put on a stable basis.

But when Trump tore up Obama’s “nuclear deal,” he effectively tore up the agreement for joint control of Iraq by the U.S. and Iran. In the meantime, the defeat — for the most part — of the pro-imperialist Syrian “rebels” with the help of both Russia and Iran meant that, under his skillful leadership, President Assad Syria had successfully resisted the attempt of both the Obama and Trump administrations to impose direct control of the U.S. world empire over that country. This represented one of the worst defeats U.S. imperialism has suffered since its historic victory over the Soviet Union and the socialist bloc that came with the the Russian and eastern European counterrevolutions of 1985-91.

In response, Trump decided to keep his campaign promise to tear up Obama’s nuclear deal and its unofficial corollary for joint control over Iraq with Iran. For awhile in 2019, Trump seemed to move toward ending the new U.S. war in northeastern Syria being fought in the name of protecting the Kurds. But then — facing resistance from the Pentagon, the Democrats and the “Party of Order” wing of the Republicans, and the media — he decided that instead of ending that war he would simply rebrand it as a war to seize Syria’s oil — which was, of course, the real purpose of this war all along. Typical Trump!

Then, in December 2019, he opened up a new war in Iraq against Iran’s allies in that country. The attempt, Trump — or his advisors — now decided, to maintain joint control with Iran over Iraq was over.

During the Obama administration, the U.S. had declared to the Iraqi government — a product of the joint U.S.-Iranian control of Iraq — that it would withdraw U.S. troops unless the Iraqi government agreed to the demand that U.S. forces occupying Iraq were not subject to Iraqi laws — a classic colonial practice. This was too much for the Iraqi government, which could now lean on Iran as well as the U.S. for support. Obama responded by withdrawing U.S. troops. At last, the Iraqi war seemed over.

But then the ISIS movement, founded originally by Iraqis as a combined militia and fundamentalist Sunni religious sect, arose. This militia-religious sect took responsibility for terrorist actions occurring in Europe and encouraged Muslims — advice ignored by all Muslims with the exception of a few desperate individuals — to engage in terrorist activities elsewhere. ISIS did, however, prove attractive to members of the Sunni Islamist militias that under corrupt “rebel” leaders in Syria had been working hand and glove with U.S. imperialism to overthrow the Syrian government. Washington, however, viewed ISIS as a rogue force resisting its imperialist aims, which had to be crushed.

Russia and Iran saw an opportunity to enter the war in Syria on the side of President Assad while hoping they could also improve relations with Washington by joining its effort to crush ISIS, which at its peak had conquered an area the size of Great Britain in parts of Iraq and Syria. In the name of fighting ISIS, U.S. troops were then reintroduced into Iraq, setting the stage for a resumption of the U.S. war against the Iraqi people.

With ISIS now largely defeated, Trump began a new war, this time against Iraqi political and militia forces allied with Iran. At first, this was a political war. Pro-U.S. forces in Iraq introduced anti-Iranian slogans into demonstrations protesting the terrible economic and political conditions in Iraq, blaming Iran rather than the U.S., which is actually responsible.

George W. Bush, backed by Democratic leaders such as Hillary Clinton and Joseph Biden, hadn’t invaded Iraq with the aim of sharing control with Iran. Instead, Bush, Clinton, Biden and the others intended to make Iraq a U.S. colony as a prelude to the colonization of Iran as well. Now this goal was been revived under Trump.

In order to take back exclusive control of Iraq, Trump ordered military attacks against Iraqi militia groups allied with Iran that are formally a part of the Iraqi armed forces. The anti-Iranian sloganeering was largely forgotten as the enraged Iraqi population demonstrated against the U.S. “embassy” in Baghdad. The overwhelming majority of the people of Iraq know full well that it is not Iran but U.S. imperialism that is Iraq’s — as well as Iran’s — main enemy. Trump then ordered a drone attack aimed at killing General Soleimani, which unfortunately succeeded, bringing the U.S. and Iran to the brink of a full-scale shooting war.

A change in Federal Reserve policy

As 2019 approached its end, I noticed a change in the Federal Reserve System’s monetary policy. The U.S. dollar-denominated monetary base — paper money and fractional coin plus the deposits of U.S. commercial banks in the Federal Reserve Banks — after being largely unchanged through much of 2019 suddenly began to shoot up. The dollar price of gold responded by rising once again above $1,500 an ounce. This occurred before the crisis over General Soleimani’s murder on January 2. When the murder did occur and with the world on the brink of a large-scale war in the Mideast, the dollar price of gold jumped even more.

The year 2019 saw a global slowdown in economic growth that has affected the U.S. economy as well. The media, for the most part, blames this slowdown on the U.S. trade war with China, though the current trade war doesn’t only involve China. If we only look at the sphere of material production — industrial production, agriculture, mining and above all manufacturing — the U.S. economy appears to be in a mild recession somewhat similar to what happened in 2016.

However the U.S. “consumer” is still spending at a strong pace, which means that the U.S. GDP, as officially calculated by the U.S. government, is still rising, so there is no “official” recession. In the meantime, the U.S. Labor Department claims that the U.S. “U3 unemployment rate” is at a 50-year low, an amazing claim considering the sluggish rate of economic growth since the end of the Great Recession proper. However, unlike earlier periods of low — by capitalist standards — unemployment, especially if we only look at non-supervisory employees, wages are not rising at a rate that one would expect during a period of genuinely low unemployment.

Still, the claim that unemployment is extremely low is repeated by virtually every news outlet. Sometimes the claim is made that unemployment is at a record low, which even the U.S. Labor Department’s U3 unemployment rate doesn’t show. A closer look at the official figures, however, reveals that participation in the labor force by the U.S. population as a whole remains below that of the period preceding the Great Recession. If unemployment — at least as most people would define it — was really as low as claimed, first we would see participation in the labor force rise above the level that immediately preceded the Great Recession, and second, we would see a stronger rise in wages.

Still, there hasn’t been a major generalized recession since 2009 — by major recession is meant a recession deep enough so that even the media and government have to admit that a recession has hit and even the U3 unemployment rate finally rises. That is not the situation now but what lies ahead.

Will the current slowdown — or mini-recession — deepen in the coming year enough to become a major recession, or will the economic upswing resume? Worst of all, will the current “mini-recession” be replaced by a war economy? This would happen if a full-scale shooting war with Iran erupts and the resulting regional war escalates into World War III and civilization does not collapse completely as result of a general nuclear exchange between the U.S. and Russia.

The conventional view expressed by the great majority of bourgeois economists is that the “mini-recession” will give way to a renewed economic upswing in 2020. Trump has announced that he will sign a limited trade agreement with China on Jan. 15, which will lower some tariffs and result in a significant increase in Chinese purchases. This is viewed if not as an end to the trade war at least its “easing.” In addition, the U.S. Federal Reserve cut its target for the federal funds rate three times last year.

The conventional view is that the combination of the trade “truce,” at least with China, combined with the Fed’s prompt and timely reductions of the fed funds rate has effectively removed the danger that the current “mini-recession” will turn into anything worse. Instead, business is expected to experience, according to the conventional wisdom, at least a modest upturn in 2020 with continued near “record-low” unemployment as measured by the Labor Department’s U3 unemployment rate.

This is viewed as extremely favorable for Donald Trump’s reelection prospects in November. In the past, when the U.S. economy was doing “as well” as it is now expected to do by most bourgeois “experts” in 2020, U.S. presidents have generally been reelected.

But in recent weeks, some developments have appeared that point toward the possibility of a quite different path for the U.S. economy, if not in 2020 then soon after. One has been continued tension in the repo market. The big banks are blaming “regulations” that were put in place after 2008 designed to prevent a repeat of the 2008 crash. Now the big banks are demanding the removal of these regulations to keep the current expansion going through 2020 and beyond. The Trump administration, always well disposed to proposals for “deregulation,” is likely to be responsive. This, of course, increases the likelihood that when the current expansion finally does end it will end not in a normal recession but a crash.

In the last few weeks the dollar-denominated monetary base has spiked up sharply after remaining largely unchanged through most of 2019. And as noted above, the dollar price of gold, which had fallen back to below $1,500 a troy ounce beginning last fall, has again risen above that level, and commodity prices have begun to rise. In addition, the rate on U.S. government 10-year bonds, which had fallen towards 1.50 percent by year’s end, has again briefly risen above 1.90 percent.

Rising long-term interest rates such as measured by the rate on the U.S. 10-year bond, a rising U.S. dollar price of gold, and rising commodity prices are exactly the combination that has preceded every major global economic crisis under the dollar system.

This raises another question. Could we be seeing a repeat of 1972 when the Fed under Arthur Burns surrendered to pressure from Richard Nixon and followed an easy monetary policy to help reelect Nixon? There has been no lack of pressure from Trump for the Fed to lower interest rates. It is against this background that the purchasing managers’ report for December expected to show a modest improvement in U.S. manufacturing output instead showed a further weakening.

Powell would deny that a repeat of 1972 is occurring. He would claim that in his judgment, and that of the majority of members of the Fed’s Open Market Committee, there is no reason for the economic expansion to end at this point and it is his job to keep the economic expansion going as long as possible as long as it doesn’t endanger the long-term stability of the economy. And there is always a chance that the Fed knows something that is not yet public knowledge such as a threatened major bankruptcy that could freeze the credit market. Or they could have information that the current mini-recession is indeed turning into a full-scale recession.

There could be another, far more chilling, explanation for the sudden increase of the dollar-denominated monetary base. Did the Fed leaders receive advance warning of a war against Iran and the people of Iraq and move to finance it?

What follows covers two crucial political developments of December 2019. These are the results of the British election of Dec. 12 and the impeachment by the U.S. House of Representatives of President Donald J. Trump, also in December. Now it seems that this post was written in another epoch, but it does provide some background to the political events leading up to the current war crisis in the Middle East.

U.S. Out of Iraq and the Middle East Now!


The British election and the impeachment of President Donald J. Trump

December 2019 was a frustrating month for progressives. Hopes that the British election held on Dec. 12 would bring Jeremy Corbyn power were dashed. Instead, the victor was the reactionary, racist Prime Minister Boris Johnson and his Tory Party. Dec. 18 also brought the impeachment of Donald Trump by the U.S. House of Representatives.

Most progressives have long hoped for Trump’s impeachment. However, there was a catch. The Democrats impeached Trump on only two articles. One charges Trump with abuse of power, and the other obstructing Congress. Since an impeached president can only be removed by a vote of two-thirds or more of the U.S. Senate — barring some completely unexpected development — there would appear to be no chance that Trump will be convicted and removed by that body.

What the Democrats are saying is, please GOP remove Trump. But Senate Republican leader Mitch McConnell has indicated that he will work closely with the White House and its lawyers to defend Trump. To make an analogy with a criminal trial, this is like having a defense attorney serve as the jury foreman.

House Speaker Nancy Pelosi reacted by postponing formal presentation of the articles of impeachment to pressure the Senate Republicans to hold a “fair” trial. Will Pelosi present the articles of impeachment at all? If no articles are presented, Trump can’t be acquitted but neither can he be removed. This would enable the Republicans to claim that the Democrats’ case against Trump is so weak that they are afraid to submit their articles of impeachment to the Senate. Before we look further into this, let’s look at the month’s other important development, the results of the Dec. 12 British election.

There were many factors that determined the results of the British election, just as there are in all bourgeois elections. First, the British capitalist ruling class united against Jeremy Corbyn. As part of the British capitalist-class campaign, the Labour Party leader was falsely charged with anti-Semitism — a charge supported by right-wing “Blairites” within the Labour Party. As is the case with virtually all charges of anti-Semitism from right-wing sources these days, the charges refer not to real anti-Semitism but to Corbyn’s support for Palestinian rights and for the rights of Muslims in general.

No doubt, the non-stop media campaign against Corbyn had its effect. However, it cannot explain an election outcome that was so different than another British election held only two years earlier. Back then, backed by the polls the British media predicted a Tory landslide. Corbyn was simply way too far to the left to have any shot at winning a Labour Party majority in Parliament.

But much to the chagrin of the media and the capitalist ruling class, Corbyn came within a hair of winning a Labor majority in Parliament and becoming prime minister. Since 2017, there have been no economic upheavals — neither a powerful economic boom or a major economic crash — that would explain why elections held only two years apart yielded such drastically different results.

The question on which the Corbyn-led Labour Party floundered was Brexit. The Brexit movement, calling for Britain to exit from the European Union, was launched by right-wingers in Britain. The Brexiters claimed that EU rules were forcing Britain to take in Muslim refugees from the Middle East, especially from Syria, which threatened Britain’s character as a “white country.”

And it isn’t only black and brown people who are being targeted by the Brexiters. Hostility is being struck up against Polish immigrants who are seen as taking jobs away from British workers. But then again, Poles were seen as not so white between 1939 and 1944 when Nazi Germany carried out its brutal occupation. That was so even if on average Poles are more light-skinned and blue-eyed than Germans or Britons.

Not least because of the racist and general chauvinism of the Brexit movement, there is opposition to Brexit on the left. But this left opposition is not universal. The reactionary essence of the Brexit movement lies in its pitting the workers of one nation against the workers of other nations. It is, therefore, sheer poison for anybody trying to build a socialist movement to appear to be a supporter of the racist-chauvinist Brexit movement.

But you don’t have to be a socialist or even a democrat to oppose Brexit. The “establishment” — what I would call the British section of the Party of Order — is also opposed to Brexit but not because it is racist or chauvinist. British capitalists opposed to Brexit are completely on board with the current global division of labor. Under this division of labor, the British economy is centered not on industry but on banking, insurance, and “financial services.” From this viewpoint, anybody who can’t get a good job in “the City” (1) has to scrape by with whatever work they can find in Britain’s chronically stagnant economy.

Behind Brexit, there lurks another issue — protectionism. Once it is out of the EU, what will stop Britain from putting up tariffs and non-tariff barriers to protect the home market against commodities produced in Germany and other EU countries with which British industry on the basis of “free trade” can no longer compete? A return to protectionism, many pro-Brexit workers hope, will encourage British industrial capitalists to move industrial production back to Britain. This, it is hoped, will lead to a revival of moribund British capitalism. Whether Brexit actually leads to protectionism remains to be seen. This is the type of thinking that caused a layer of overwhelmingly white workers in the U.S. to vote for Donald Trump.

These workers — whether British or American — are not necessarily racist. But they are at best insensitive to racism. The racism of the Brexiters — and in the U.S. of Trump — is not a deal-breaker for these workers. It is something like German workers in the early 1930s who voted for the Nazis, not because they were anti-Semitic but because they believed that Germany’s and thus their own economic situation would improve under the Nazis. Anti-Semitism was not a deal-breaker for them either.

Centuries ago, during the age of mercantalism, economists — from Sir Thomas Mum (1571-1641) to Sir James Steuart (1712-1780) — advocated that the government exercise strict control over foreign trade and the inflow and outflow of gold and silver coins. The idea was to accumulate as much gold and silver — money material — within Britain as possible. By following mercantilist policies, Britain created its home market at the expense of other nations. The expansion of the British home market, partially a result of mercantilist policies, stimulated the growth of manufacture.

The growth of manufacture was the pre-condition for the industrial revolution, which began in Britain in the late 18th century. Only after the industrial revolution — the application of steam power to industrial production — did the British industrial capitalists acquire the ability to produce commodities of a given quality far cheaper than capitalists elsewhere. Only then did Britain and its economists make their sharp turn away from mercantilist doctrine and embrace “free trade” as the best policy not just for Britain but every other nation.

Today’s Brexiters — and Trump supporters in the U.S. — are saying: If protection worked in the days of mercantilism making Britain the pioneer of the industrial revolution, why can’t similar policies lead to the rebirth of Britain — and rebirth of the U.S., Trump supporters add — as an industrial country?

The rise and fall of industrial Britain

By the early years of the 19th century, the British textile industry, centered in Manchester, used steam as its source of motor power. Steam was produced by burning coal mined by the Welsh coal-mining industry. The burning of coal began to increase the level of carbon dioxide in the atmosphere, starting the progressive warming of the Earth’s climate that we are well aware of today — a danger not understood in the days of the industrial revolution. Later, the role of the coal industry was broadened because it provided the carbon that “steels” iron. The iron industry became the steel industry.

This was Britain when Karl Marx wrote “Capital” — providing the main example of a highly developed industrial capitalism. But the British monopoly of modern industrial production could not last for reasons that I have explored elsewhere. (2)

As the British monopoly of modern industry was broken by the end of the 19th century by Germany and above all the United States — a former British colony — British industry, began its relative decline. Britain was no longer the “workshop of the world” but still a powerful industrial nation. It remained so until the Volcker shock (3) — which coincided with the Thatcher years with their “monetarist policies.” These years, beginning in 1979, saw the collapse of many British industries.

But it wasn’t really Thatcher’s monetarism that was the cause of the collapse of so much of British industry. The real cause of Britain’s decline, and under Thatcher its fall, as an industrial power was the fact that commodities of a given quality could now be produced far cheaper — with less labor — elsewhere. The law of value dictates when the individual value of commodities produced by a particular industrial capitalist — or the industrial capitalists of a particular capitalist country — fall too far behind the social value, that particular industrial capitalist — or industrial capitalists of that particular nation — must close up shop.

Just before Thatcher came to power, the British government and the Bank of England made a last-ditch attempt to save British industry by following Keynesian policies to boost the total demand for commodities. These policies attempt to do this by having the central bank issue currency not backed by gold and then have the government spend this newly created currency through deficit spending. These policies result in inflation and then fail when the central bank has to restrict its creation of new currency to halt the drift to disastrous hyperinflation. Britain in the years leading up to Thatcher’s rise to power in 1979 provides a textbook example of these economic laws. (4)

As a result of this attempt to defeat the law of value, stagflation hit Britain with even more force than it did in the U.S. As the U.S. dollar dropped against gold as measured by the rising dollar price of gold, the British pound dropped against the U.S. dollar. As a result, the pound’s role as an international reserve currency ended, which further fueled its decline.

The only way under capitalism that full-scale hyperinflation can be avoided under these circumstances is through abandoning Keynesian attempts to stimulate demand by issuing currency not backed by gold. This was what Thatcher’s monetarist policies amounted to. Progressive resistance to Thatcher’s policies was rendered impotent because those who led the resistance were neither willing nor able to follow the only real policies that would have defeated Thatcher — socialist revolution.

As a result, the British working class suffered a historic defeat. Thatcher’s policies were nothing but the British version of the Volcker shock, but even more brutal because the first-born industrial nation’s productivity was falling behind the global average even more than was that of U.S. industry, which itself had just passed its heyday. (5) The result was to a great extent — not entirely, of course — the end of industrial production in Britain. The world market, which had fueled the rise of British capitalist industry, first with the assistance of mercantilist protection and then “free trade,” now leveled it.

For example, during much of the 20th century, British coal mining was a sick industry. But thanks to the rise of oil and natural gas, and the fact that coal can be produced at lower cost elsewhere, the British coal industry is no longer sick — it is dead. The British National Union of Mine Workers is virtually defunct, with the closure of the last significant British coal mine in December 2015. Trade union resistance no longer works when the boss closes the factory or mine.

This is the background fueling the Brexit movement that gained support in 2016. The British Tory Prime Minister James Cameron represented what I would call the British section of the international Party of Order. Cameron decided to deal what he believed would be the death blow to the Brexit movement, calling a referendum where Brexit was to be voted up or down. To Cameron, “post-industrial” Britain no longer needs industries like coal, textiles and steel that had nourished the British trade union movement and the Labour Party based on it and provided relatively good-paying union jobs for generations of British workers.

The “modern” British economy is, as Cameron and the British section of the Party of Order see it, based on banking and other “financial services” located in the City. Though the British industrial capitalists may be a threatened species, the British money capitalists are not. Capitalists around the world still park money in the banks of the City with their centuries of experience. Much to the horror of the British Party of Order, however, the Brexiters won in the very referendum designed to banish them once and for all.

The ‘Lexiters’

In addition to the Brexiters of the right with their hatred of immigrants and obvious racism, there exists in Britain Brexiters of the left. The left Brexiters, or “Lexiters,” say they reject racism and political nationalism. What they want, however, is protection that they hope will turn back the clock and revive the British industrial economy.

If a socialist revolution occurred in Britain, it is true that a socialist Britain could not remain a member of the European Union. It would have to impose a monopoly on foreign trade without which an isolated socialist state in a capitalist environment could not develop a planned economy. We have to give this much to the Lexit position.

However, the Lexiters do not foresee a real socialist revolution in Britain. What they want is protectionism to revive British capitalism by securing the home market for British industrial capitalists. This will revive capitalism, the thinking goes, and open the door to a new era of accelerated capitalist growth.

Indeed, history shows that reformist labor movements that aim at improving the conditions of the working class within capitalism can only thrive under conditions of rapid capitalist development. Examples of this are the period between 1896 and 1913 and the postwar era from 1945 to the 1970s.

In contrast, today’s “secular stagnation” means that the number of workers engaged in large-scale industrial production — especially in the now imperialist “first-born” countries of industrial capitalism — does not increase but falls. Such a situation is deadly for any labor movement whose aims fall short of the seizure of political power by the working class followed by the transformation of capitalism into socialism.

With no apparent immediate prospect of the socialist transformation of society — the repeated failure of successive Labour governments to move toward socialism in Britain, the counterrevolution in the Soviet Union and Eastern Europe, and China’s development along capitalist not socialist lines — make the prospects of a revolutionary socialist transformation of society seem remote.

Under these conditions, the working class will tend to turn in despair toward protectionism and economic nationalism as the only way out of the misery caused by secular stagnation and de-industrialization. This is a climate made for racist demagogues such as Donald Trump and the Brexiters. The problem with the Lexit position is that it echoes the Brexit position: “Britain should regain its sovereignty from the Brussels bureaucrats,” as if we live in the era of the rise of the nation-state rather than in the era of its bankruptcy. In a struggle between the Brexiters and Lexiters, the Brexiters were sure to win.

Corbyn, Brexit and Lexit

In 2017, Jeremy Corbyn hinted that he was sympathetic to the Lexit position. Though the Labour Party’s formal position is anti-Brexit, Corbyn as a leader of the Labour Party left was never enthusiastic about the capitalist-imperialist European Union, which is closely associated with the international Party of Order that Corbyn opposes from the left. In 2017, Corbyn said that he accepted the results of the 2016 referendum and that if he formed a government he would negotiate a “non-destructive” Brexit with the European Union. This sounded to many working-class voters as if Corbyn was, for all practical purposes, endorsing a Lexit position.

They hoped that a Corbyn government would pursue protectionist policies that would revive moribund British capitalism sufficiently to allow for a new era of pro-working-class reforms. This had the effect of reconciling the anti-Brexiters within the Labour Party, who reject the economic and political nationalism and its association with racism, with the Lexit position. As a result, Labour did much better than the pundits of the Party of Order predicted against the Tories within England proper and Wales but just as significantly made progress against the Scottish Nationalist Party as well. It seemed as though a new day was dawning in Britain, but was it perhaps a false dawn?

But the British section of the Party of Order did not give up its own struggle against Brexit. They still hoped to get rid of it once and for all. The Liberal Democrats — the old British Liberal Party plus some right-wingers from the Labour Party that split away — represent this view. The Liberal Democratic Party, which by all rights belongs to the era of Manchester textile mills, Welsh coal mines, and Birmingham steel mills, has attempted to revive itself by presenting itself as a modern “progressive” party concerned with environmental issues and climate change and opposed to the chauvinism, racism, and anti-Islamism of the Brexit movement.

But the Liberal Democrats do not challenge today’s moribund British capitalism centered on the “City of London.” They want a liberal democratic capitalism without the conditions that make such a capitalism possible — a thriving industrial economy. They are very much part of the British section of the Party of Order and hence launched a campaign for a second referendum on Brexit they hoped would reverse the results of the 2016 referendum.

In this election, Jeremy Corbyn under pressure from the right wing — called the “Blairite wing” after former right-wing Labour Prime Minister Tony Blair — also came out for a second referendum. Notwithstanding Jeremy Corbyn’s radicalism, Labour now appeared to many British workers, especially in England and Wales, as simply another faction of the international Party of Order.

The capitalist media, showing its class bias, always celebrates the electoral setbacks of the British Labour Party or any other labor-based party. Joe Biden, who like other Democratic Party leaders is an opponent of single-payer health care in the U.S., has gravely warned what will happen if the Democrats move “too far to the left” such as endorsing a Bernie Sanders-like Medicare for All policy. In reality, if Boris Johnson and his Tories had been stupid enough to campaign on the elimination of Britain’s health care system in favor of a U.S.-style employer-centered system — the Biden position — the health care issue would have eclipsed Brexit and today Jeremy Corbyn would be the prime minister of Britain. Instead, Johnson promised to increase funding for the National Health Care System, which the Tories have been starving in an effort to undermine it. What Johnson will actually do is another thing.

Boris Johnson, for his part, was not above using some pseudo-populism of his own. He promised, for example, to increase spending on the National Health System, somewhat like Trump promised “great health care for everyone.” In this election, “Corbynism” — British left reformism that has the misfortune to exist in an era where favorable conditions for it do not exist — hit a wall.

The capitalist media, showing its class bias, always celebrates the electoral setbacks of the British Labour Party or any other labor-based party. Joe Biden, who like other Democratic Party leaders is an opponent of single-payer health care in the U.S., has gravely warned what will happen if the Democrats move “too far to the left” such as endorsing a Bernie Sanders’ Medicare for All policy. In reality, if Boris Johnson and his Tories had been stupid enough to campaign on the elimination of Britain’s health care system in favor of a U.S.-style employer-centered system — the Biden position — the health care issue would have eclipsed Brexit and today Jeremy Corbyn would be the prime minister of Britain. Instead, Johnson promised to increase funding for the National Health Care System, which the Tories have been starving in an effort to undermine it. What Johnson will actually do is another thing.

Ignored by Biden and the U.S. mass media is the fact that it wasn’t only Labour that was routed in the British election. The Liberal Democrats — the very heart of the British section of the Party of Order and the actual counterpart of the U.S. Democratic Party — did far worse than the Labour Party. In Scotland, not only the Labour Party but the Tories as well were smashed by the resurgent Scottish Nationalists. And in Northern Ireland for the first time, forces sympathetic to Northern Ireland’s withdrawal from the United Kingdom and merger with the Irish Republic came out on top. What really happened in the British election was the defeat of the Party of Order, which the Labour Party was seen, in contrast to 2017, to be a part of.

The end of the United Kingdom?

First Minister of Scotland Nicola Sturgeon, celebrating the landslide victory of her Scottish Nationalist Party, promptly demanded a new referendum on Scottish independence from the United Kingdom. The UK consists of the three nations located on the island of Great Britain (England, Wales and Scotland) plus Northern Ireland. Before 1922, the UK included the whole of Ireland.

The United Kingdom was created in 1707 to merge the kingdoms of England, Scotland and Ireland. Before that, these kingdoms had been ruled by a single king since 1603. Now the survival of the United Kingdom is suddenly thrown into doubt.

Boris Johnson quickly indicated he will not allow a second referendum on Scottish independence, despite First Minister Sturgeon’s demands. However, as Britain turns its back on the EU, the bell seems to be tolling on a much older union, that of England, Wales, Scotland, and (since 1922) Northern Ireland. The truth is that both Scotland and Northern Ireland feel the pull of the relatively less moribund capitalist economies of the European Union, centered on industrial Germany.

This reverses the situation existing when the British Union developed. Then, a mercantilist England by developing manufacturing — the precondition for the industrial revolution — pulled Wales and Scotland plus Ireland, which was already a cruelly oppressed colony, into the English-dominated United Kingdom.

An especially tricky situation involves the question of the border of Northern Ireland and the Irish Republic. The Irish Republic remains and intends to remain a member of the European Union. With both the Irish Republic and the United Kingdom members of the European Union, the border between Northern Ireland and the Irish Republic has remained open. But with Britain soon to leave the EU, the question is whether the border between the two parts of Ireland will remain “open” or it will become a real international border with border fences and guards and perhaps tariff walls and other trade barriers.

Brexit formally takes effect on Jan. 31, 2020. The deal expected to be reached between the Johnson government and the EU will keep things pretty much as they are for 2020 and 2021. Free trade between the UK and the EU — and the open border between Northern Ireland and the Irish Republic — is expected to continue.

Therefore, will anyone really notice Brexit in practice? If this state of affairs continues beyond 2021, Brexit will have accomplished essentially nothing. No tariff walls between Britain and the EU — or an international border dividing Ireland — but also no revival of Britain’s moribund capitalism. As the truth sinks in that nothing has really changed, what will happen then?

But if the forces of economic nationalism continue to grow and bring with them later in the 2020s and beyond tariff walls and trade barriers along with border fences, what then? And what if London is forced to finally grant independence to Scotland? Will border walls arise between England and Scotland as well where they have not existed for centuries? Even in Wales, nationalism has been growing. Is this really a promising background for a revived English — it will be English not any longer British — capitalism?

Common Market, European Union, the Eurozone and NATO

The European Union itself is a rather toothless institution that consists of a parliament that can formulate common policies on questions such as immigration but has no real executive authority. Many European liberals have long dreamed that the “union” will evolve into a true United States of (capitalist) Europe. However, with the United Kingdom itself threatened with disintegration, the chances are increasing that the far weaker EU will give way, not to a United States of Europe but rather the “old Europe” of independent and hostile nation-states. That Europe, we know, led to two world wars and fascism in the 20th century.

Second, there is the general free-trade area or customs union that in the 1960s was called the Common Market. Within a customs union, there are not supposed to be tariffs or other trade barriers. Instead, a customs union is surrounded by a common tariff wall and other trade barriers.

Third, there is a currency union that uses the euro. The central banks of the eurozone have given up their note-issuing authority to the European Central Bank. The United Kingdom never entered the currency union, and so the Bank of England has retained its note-issuing authority.

This whole crumbling structure is really held together by NATO, dominated by the United States. NATO’s real birth, as opposed to its formal birth in 1949, was June 6, 1944, when a U.S.-dominated invasion force invaded Hitler’s “Fortress Europe” and began its race with the Soviet Army towards Berlin. When it was formally “founded” in 1949, NATO was made up of the United States plus Britain, defeated (West) Germany and other West European countries that functioned as satellite imperialisms orbiting around the U.S. But since the counterrevolutions in the former Soviet Union and eastern Europe, NATO has been extended into East Europe, including such former republics of the USSR as Lithuania, Estonia and Latvia.

The U.S. also wants to include Ukraine, which was along with Russia and in some ways even more important because of its “black soil,” a leading republic of the Soviet Union. So far, opposition from within Ukraine and pressure from Russia has prevented the formal integration of Ukraine into NATO. But the U.S. is still working on getting Ukraine into NATO one way or another.

In addition, pipelines that deliver natural gas from Russia to western and central Europe — above all Germany — run through Ukraine. This along with Ukraine’s “black earth” breadbasket explains why Ukraine has become so crucial in the U.S.’s drive to extend U.S.-NATO control over Ukraine. U.S. imperialism by the nature of the economic laws that govern it cannot be satisfied until Russia itself is crushed as an independent state and fully absorbed into the U.S. world empire.

The City of London and Brexit

The mercantilist doctrine describes the laws that govern international trade under capitalism far better than the “law of comparative advantage” taught to university students. A balance-of-trade surplus — all other things remaining equal — draws money into the country that expands the home market at the expense of the home markets of other countries. When this happens, not only do industries that work for the world market but industries that work for a now expanded home market benefit at the expense of the (relatively or absolutely) contracted home markets of other countries.

This is the reason, by the way, our present-day economists hate mercantilist theory. The entire structure of modern “neo-classical” economics is based on the claim that classes and nations have the same interest in a “free market” and “free trade” global economy. However, mercantilist theory showed that capitalist nations engaged in international trade have conflicting interests since it is impossible for all trading nations to run a positive balance of trade at the same time. The trade surplus of one nation has to be offset by a trade deficit of another. (6) The age of mercantilism was, not coincidentally, also the age of commercial wars among the rising capitalist powers.

However, as successful industrial countries build up increasing quantities of cash, the banking and “financial services” industries within them develop. Successful trading and industrial capitalists, after all, have to find some place to put their growing piles of gold and silver coins that they cannot immediately invest at a profit. If they store these coins in strong boxes, the potential money capital lies idle and the capitalists, as our modern economists put it, incur the opportunity cost of not collecting interest — surplus value — on it.

This is where the banking business comes to the rescue. The job of the banks is to take deposits of money that its owners cannot immediately transform into capital and loan to other capitalists who can transform this cash into capital — M-C-M’. The banks then share the interest — surplus value — with the depositors.

The more a given nation runs a balance-of-trade surplus and business thrives, the more the banking industry develops. As the banks develop, they not only manage domestic cash surpluses but become parking places for foreign capitalists to deposit their surplus money capital as well. At this point, it becomes possible for a capitalist country to run balance of trade deficits without its domestic money supply draining away. If a country can manage to import more commodities than it exports without a drain of its domestic money supply, its living standards rise. What is decisive is not the balance of trade but the balance of payments.

However, when this “happy situation” arrives, the given country has actually entered onto the road of historic decline as its economy begins to shift away from material production and towards banking and financial services. From that point onward, the given capitalist nation bears an increasingly parasitic relationship with the world economy as a whole. It consumes an increasing share of the global material product while contributing an ever-smaller relative portion of it.

No country has gone further down this path than the United Kingdom, the former workshop of the world. This is why in the not-too-distant future the United Kingdom may be defunct. But the U.S., the industrial powerhouse of the 20th century, has long been on the same path toward disaster. Today, however, “the City” can still play its role as the major financial center of Europe because it has been integrated with Europe through Britain’s membership in the European Union. The European Union provides the legal framework under which City firms conduct their business.

But with Britain’s membership in the European Union about to end, the future of the City is suddenly up in the air. Wouldn’t it perhaps be more convenient, at least from the legal point of view, if the banks and other “financial services” firms that do business in the City moved to the continent, perhaps to Frankfort or some other continental city? But if this happened, a major flow of money into Britain would dry up. Britain would then have to balance its international payments by increasing the exports of what it still produces while reducing its imports. Britain would, therefore, face a drop in its standard of living, not only for those who work — or in this case formerly worked — in the City but for many other people as well.

This would deal a body blow to what is left of Britain’s political stability. The Brexit drama is not ending with the Tory election victory of Dec. 12, 2019. It is merely beginning.

Trump impeached by the Democrats

As the world now knows, President Donald Trump on Dec. 18 joined Andrew Johnson and Bill Clinton as presidents who were impeached when the Democratic House approved two narrowly drawn impeachment articles. But these two articles were not the first articles of impeachment to be introduced.

The first congressperson to introduce articles of impeachment against Trump was the Texas African-American Democratic congressman Al Green. But Green’s proposed articles of impeachment, unlike the two articles approved by the Pelosi-led House of Representatives, included items of concern for virtually every person residing in the U.S. who is either non-white or non-Christian or both. These concerns were conspicuously missing in the two articles of impeachment approved by the House on Dec. 18. According to Hunter Walker, writing in the Dec. 10 edition of Yahoo News, Green wanted these concerns included in the articles of impeachment.

“Green,” Walker reports, “cited Trump’s reported disparaging comments about migrants, his efforts to halt immigration from Latino and Muslim nations.” Congressman Green also wanted to see Trump’s infamous “very fine people on both sides” comments he made after the fascist demonstration in Charlottesville, Virginia, made into an article of impeachment.

Congressman Green, who remains a Democrat, still voted for the Pelosi articles despite their pro-imperialist nature and their failure to take up Trump’s racism. Instead, Pelosi’s articles of impeachment boil down to charging Trump with attempting to use the U.S. puppet government in Ukraine to advance his 2020 reelection campaign at the expense of U.S. imperialism’s drive to consolidate Ukraine’s status as a semi-colony. Progressives, with few exceptions, are glad that the Democrats are finally doing something to remove Trump and hope that his impeachment will help ensure his defeat in the November 2020 election.

But there are big problems even from the viewpoint of Democrats’ hopes to defeat Trump and the Republicans in the November elections by impeaching of Trump. First, the charges appear technical and obscure. This makes it easy for the Republicans to claim that Trump, though he may have made some technical mistakes, did nothing which is “impeachable.”

Helped by the “technical” nature of Pelosi’s two articles of impeachment, the GOP is moving to mobilize its reactionary-minded electoral base by claiming that the Democrats are trying to “reverse the election of 2016.” This claim is false in two ways.

First, Hillary Clinton won the popular vote in 2016, so the election was essentially stolen by Trump and the GOP through the mechanism of the Electoral College. This was perfectly legal under the 18th-century U.S. Constitution, but it is hardly democratic, even in the sense of bourgeois democracy. Second, the Democrats did not move to impeach Trump’s ultra-right Christian fundamentalist vice president, Mike Pence. Pence not Hillary Clinton would become president in the unlikely event that Trump is convicted and removed from office by the Senate. So in what sense would the election be reversed?

By making the claim that Trump abused the powers of his office when he subordinated the support of the Zelensky puppet government in Ukraine to his personal interests in getting reelected in 2020, the Democrats have set a deadly trap for progressives who are eager to get rid of Trump for the right reasons. The nature of the articles of impeachment as passed by the House of Representatives makes it impossible to support the impeachment without supporting the U.S. campaign to colonize Ukraine and steal its “black earth” agricultural lands. If you support the articles of impeachment you are — if unwittingly — supporting the campaign by U.S. imperialism to sell Ukraine’s “black earth” to U.S. agribusiness corporations.

The Democrats are taking full advantage of the fact that few Americans, progressives included, know much about the history of Ukraine and Crimea. To understand the Crimea question, it is necessary to know the history of the Russian Empire during the Czarist period, then the Russian Revolution, followed by the much-criticized collectivization of agriculture in the 1930s during the Soviet period, then World War II and the rise of Nikita Khrushchev (7) to power after Stalin’s death, as well as the period since the victory of the bourgeois counterrevolution that swept the USSR in 1985-1991, ending with the establishment of an “independent” bourgeois Ukraine republic in 1991.

This is reminiscent of the early 1960s when the U.S. was beginning its war against Vietnam. At that time, most Americans had not heard of Vietnam and certainly wouldn’t have been able to locate it on a map. The U.S. government justified its war moves by claiming that South Vietnam was a victim of “communist aggression” by the “Viet Cong” and infiltrators from “Communist North Vietnam” acting on behalf of “Peiping’s” (8) drive toward world domination. The almost total ignorance of the U.S. people on Vietnamese history meant that the U.S. government could issue the most outrageous lies to justify the war.

Today, the Democrats are using the same type of ignorance about Ukraine to justify their impeachment of Donald Trump! It would be as though the Republicans had impeached John F. Kennedy in the early 1960s for attempting to bully the “South” Vietnamese puppet government into supporting his campaign for president in the 1964 election, thus endangering the drive of the U.S. to conquer the people of Vietnam.

It is not impossible that the U.S. attempt to subordinate Ukraine could lead to World War III, because Russia borders Ukraine and what happens in Ukraine affects Russia’s vital interests. During the Vietnam war, especially in its earlier stages, the war was in the U.S. often seen through the prism of the risk of a war between the U.S. and China. And this danger did exist. But it turned out that the U.S.’s chief enemy in Vietnam was not China but the Vietnamese people themselves. Therefore, U.S. attempts to prop up the Zelensky puppet government could just as easily lead to a Vietnam-style U.S. war against the Ukrainian people.

The problems with the Democratic articles of impeachment doesn’t stop with Ukraine, as important as that is. In general, the charges against Trump also stir up national chauvinism against all “foreigners.” They are designed to undermine the freedom of Americans to hear the views of foreign governments. Somehow, this vital component of free speech is not supposed to be protected by the First Amendment.

When examined closely, the claim that Russia attacked “our election” boils down to the claim that Russia — or rather some Russians who may or may not have been connected to the Russian government — exercised their international right of free speech. Shouldn’t U.S. voters take into account what people of other countries think about various U.S. presidential candidates when choosing which candidate to vote for? Isn’t this freedom vital for (bourgeois) democracy in today’s world? Today’s biggest problems — the economy and above all the issue of global warming — are thoroughly international. Weather systems, increasingly altered by the ongoing process of human-caused global warming, pay no attention whatsoever to national borders.

The worst feature of Trump compared to his recent predecessors is his economic and political nationalism and above all his open racism. Examples of his racism include the Muslim ban, keeping immigrant “brown” children in cages, his racist rallies, and these are only the beginning of the list. Then there is his attempt to drive people off health insurance, which affects people of all races but disproportionately people of color.

The “anti-Trump movement” is actually a series of movements against these various policies. Particularly early in the Trump administration, actions against Trump took many forms. They took up issues as diverse as Trump’s racism, his attacks on health care and on the rights of women, his general misogyny, LBGT rights, the question of global warming, and the attacks on science in general, all crucially important questions. They often took the form of street demonstrations and other independent actions. While these actions were not enough to stop Trump, they did slow him down.

However, most of these movements were led by members of the Democratic Party. This is not surprising considering that most progressive-minded people in the U.S. still mistakenly — in my opinion — retain hope in the Democratic Party. But this always contained a tremendous danger. The Democratic leadership has always aimed to lead these movements from the streets to the ballot box. These leaders claim that if only we elect a Democratic president and Congress, everything will be fine — even if we may need occasionally “to hold their feet to the fire.”

Let’s examine the “anti-Trump” movement for making access to health care a basic human right, which in the U.S. is sometimes called Medicare for All. In 2009, the Democrats had a majority in both houses of Congress and occupied the White House. They could have passed a bill that made health care in the U.S. a basic human right like it is in most reasonably developed — and some not so developed — capitalist countries.

Instead, the Democrats passed so-called Obamacare, copied from a Republican plan based on “market principles” that was the GOP alternative to health care as a basic human right. While Obamacare did reduce the number of uninsured somewhat, it still left many millions without access to basic health care. In addition, Obamacare is a bureaucratic nightmare that includes such features as that health care must be purchased only during a certain part of the year, the need to prove you are poor enough for subsidies that make health care affordable, or that you are poor enough to receive Medicaid. If you cannot meet these requirements, you are notified that your health insurance will be terminated.

The Democratic Party leadership, including its various presidential candidates, has not acknowledged that it made a mistake and apologized for its failure to pass “single-payer” in 2008-09. The Democrats could pass a single-payer bill in the House and then organize street actions demanding that the Republican Senate pass it and that President Trump sign the single-payer bill now. As socialists, we would support these demands and join those demonstrations even if they were led by the Democratic Party. On election day, we would still vote for socialist candidates in order to educate the working class as best we can on the need for the working class to organize its own independent party. Even if the Democratic Party embraced health care as a human right, it would remain very much a capitalist party.

But considering today’s political realities, if the Democrats made a convincing case for health care as a basic human right backed by practical proposals to realize it, Trump’s defeat by a Democrat in the 2020 presidential elections would be assured and Republican candidates up and down the ticket would fall like flies. The socialist campaigns — with perhaps a few local exceptions — would for now remain very much “propaganda campaigns” designed to educate a still relatively small vanguard but with no expectation of winning office.

But the Democratic Party is not building a movement to realize health care as a basic human right, whether in the streets or at the ballot box. The leading Democratic candidates have either waffled badly on Medicare for all — most recently Elizabeth Warren — or opposed it outright — Joseph Biden, still the leading candidate at the time of this writing; Pete Butting; and Amy Klobucher.

The only major candidate for the Democratic presidential nomination for 2020 pushing for Medicare for all is Vermont Senator Bernie Sanders, who actually calls himself an “independent” though he caucuses with the Democratic Party and is seeking the presidential nomination of the Democratic Party. This makes it impossible to build a united front with the Democratic Party on the question of health care as a basic human right.

Populist versus Marxist explanations of Democratic and Republican opposition to health care as a basic human right

Progressives when asked why “their” Democratic Party opposes health care as a right complain about the role of “money in politics” and the influence of companies that sell health insurance for profit over Democratic candidates. These “big donors,” the progressives complain, have succeeded in corrupting every Democratic presidential contender with the sole exception of Sanders, who doesn’t even consider himself a Democrat in the strict sense. There is more than a little truth in this analysis. Here we the difference between Marxism and populism — understanding the role of class.

Even under Obamacare, it is extremely difficult for anybody that is not pretty wealthy to purchase adequate health insurance on the “free market.” The easiest way for people of working age to get it is to find jobs that come with decent — at least relatively — employer-provided health plans. This gives the employer — the capitalist boss — the power to deprive workers and their families of their health insurance by simply terminating their employment. In addition, it reduces the ability of workers to quit a job unless they have another job already lined up that provides similar or superior health insurance. Therefore, the “employer-centered” health care system greatly strengthens the position of the employers — the capitalists — relative to the workers in the labor market.

The employer-centered health care system bites especially hard where it involves not workers themselves but rather members of their families such as children. If children depend on employer-provided health insurance to pay for the medical care to keep them alive — for example, in the case of childhood cancers — the workers’ ability to quit or risk their jobs by attempting to organize a union is greatly undermined. Workers might be willing to lose their jobs to win a union for their fellow workers, but they might not feel they have the right to risk the lives of children struggling with childhood cancer.

Therefore, the employer-centered health care system is linked to another problem, which makes the U.S. unique among developed capitalist countries — that is the lack of labor rights, the right to organize a trade union enabling the workers to bargain collectively with the boss.

The effects of the employer-centered health care system are felt consequently far beyond the sphere of health care, as important as this is. These effects, first of all, include the raising of the portion of the workday that is unpaid relative to the portion that is paid. This ratio in Marxist theory is known as the rate of surplus value. It is the most important variable in the determination of the rate of profit. As we know, the rate of profit is the most important question of all to the capitalist.

By weakening the unions, the employer-centered health care system pushes politics further to the right. This, in turn, affects the struggle against racism and the crucial struggle to force governments to take serious steps against global warming. It is no accident that the election of Donald Trump followed decades of eroding trade union strength. And though it was not the only factor, the employer-centered health system has certainly played a role.

The importance of class

It is one thing to point out that the current U.S. political system is a system of legalized bribery and corruption. This is classic populism, and it is, of course, true as far as it goes. But it is another thing entirely to explain that the capitalist system requires a class of billionaire capitalists in order to function. This inevitably creates an extremely powerful class of people whose vast financial resources give them domination of the mass media and education and who have a material interest in denying health care as a basic human right as well as free college and forgiving student debt. Most important as well, it is in their interest to combat any serious moves to take action against the existential threat of climate change.

The only way to keep these evils at bay is to build a powerful workers’ movement. But even that is not enough. The only long-term solution is to eliminate the private ownership of the socialized — in terms of production — means of production that will eliminate the production and reproduction by the operation of elemental economic forces of a powerful class of people whose economic interests stand in contradiction to the great majority of the human species — and now the needs of Earth as a “living” planet.

The global class war and the employer-centered health care system

In the early 1950s, after some hesitation, the U.S. ruling class made a decision to go with an employer-centered health care system. It is impossible to understand this decision without understanding what the American Marxist Sam Marcy called the “global class war.” These were the days of the Cold War when capitalists in other countries did not dare go with an employer-centered health care system for fear the workers would turn towards the “Communists” if they did. In the European capitalist countries, the “McCarthy period” had occurred under fascism. And fascism was so discredited at that time that it was impossible to use anti-communism in the way it was used in the U.S. Fascism with its anti-communist demagoguery was simply too recent a memory.

But in the U.S., which had not experienced fascist rule or the occupation of fascist-ruled countries in the 1930s and 1940s, combined with the racist voting patterns of so much of the white population, the U.S. ruling class was emboldened to go ahead with the employer-centered health care system.

As World War II reached its end in Europe in May 1945, the Tories under Britain’s wartime leader Winston Churchill were expected to win a landslide victory. After all, hadn’t Churchill led Britain during its “darkest hour” when it stood alone against Nazi Germany? How could the British people be expected to reject such a heroic leader as Winston Churchill and his party? Much to the shock of the capitalists, however, the British people voted in Labour under Clement Attlee.

In 1945, it was widely assumed that capitalism after the experience of two world wars, the Great Depression, and the horrors of fascism was finished. Of course, this view greatly underestimated the difficulties of overthrowing the entrenched capitalist ruling classes. Hitler and Mussolini were gone but the capitalist classes they represented were not. And the European capitalists enjoyed both the military and financial support (with its huge gold reserves) of the United States.

But the capitalists did have plenty of reasons to be concerned, especially in light of the victory of the Soviet Union — the power that really defeated Nazi Germany. If the Labour government elected in 1945 had followed what today is called a “new Labour Blairite” policy, like the first Labour government of Ramsay MacDonald had done in the 1920s, in the next election, the capitalists feared there might be a shift of the vote even further left. Behind it all was fear of the emergence of a truly socialist Britain.

Under these conditions, to re-consolidate the rule of the British capitalist class, some significant reform had to be granted to Labour. But what would it be? It couldn’t be “democratic socialism” under King and Parliament. That just wasn’t — and isn’t — possible. The reform had to be meaningful for the working class and the people in general but still be compatible with the continued existence of capitalism. That reform turned out to the British NIH system, which made health care a right and put doctors on the government payroll, which more or less eliminated the “businessmen doctors” who play a huge role in the U.S.

Eventually, as the rule of the British capitalist class stabilized in 1951, the Tories returned to power. But Tories have never, so far at least — even under the infamous Margaret Thatcher — dared attempt to launch a frontal assault against health care as a basic human right.

In the U.S., in the days immediately following the end of World War II, the capitalists thought they might have to grant health care as a right to counter “communism.” President Harry Truman himself supported legislation that would today be called single-payer, though the Republican-Jim Crow Democratic bloc in the U.S. Congress blocked this from becoming law. Major CIO trade unions like the UAW, however, supported health care as a right.

The U.S. capitalist class tested the waters. They didn’t want to grant health care as a right any more then than they wanted to grant it today, but in those days they were above all preoccupied with defeating “communism.” Would the workers — or at least the CIO workers — of the “greatest generation,” as they are called today — resist the witch-hunt driving the best trade-union fighters out of the CIO and the trade union movement in general? Or would they accept it as part of the fight against communism and “the Russians”?

Would African-Americans in the North — in the South they were still disenfranchised — continue to vote for the Cold War anti-communist Democrat Harry Truman, or would they vote for Henry Wallace and his Communist Party-backed Progressives, who opposed the Cold War? The capitalists noted that there was little resistance from the “greatest generation” to the purge of “reds” from the CIO. They also noted that the generation of Northern African-Americans — in exchange for the concessions embodied in the Civil Rights Bill of 1948 — voted for Truman and not the Communist Party-backed progressives. The small vote for the Progressives in the 1948 election sent the U.S. left reeling, greatly emboldening the capitalist class.

Then, during the war against the Korean people between 1950 and 1953, there was virtually no open opposition in the streets, though the war, unlike the war against Nazi Germany, was highly unpopular. (9) This enabled the Democrats and Republicans, with the help of Senator Joe McCarthy, to establish temporarily the principle that it was virtually illegal to oppose an ongoing U.S. war no matter how unpopular it was.

It was to take the struggle of a new generation — the baby boomers — against another unpopular war, the war against the peoples of Indochina, to overturn this principle. By the early 1950s, the U.S. bosses were convinced that they, unlike the British bosses, would not have to grant health care as a basic right. Instead, they opted for the employer-centered health care system, which best meets their class needs.

Bernie Sanders and the struggle for single-payer

Today, young people have great hopes that the election of Bernie Sanders will deliver health care and education as a human right and stop the endless wars the U.S. has been engaged in since the days of George W. Bush. Let’s assume against all odds that Bernie Sanders sweeps the Democratic primaries and caucuses and wins the Democratic nomination on the first ballot. The obstacles to such an outcome are great, though the chances of this unlikely development seem to be increasing as Sanders’ support has been consistent in the polls while one after another anti-single-payer Democrat has faded, and Joe Biden remains a flaky contender whose candidacy could quickly collapse.

The U.S. capitalist media is now engaged in a massive misinformation campaign on the subject of single-payer. We can’t afford it because it will cost trillions of dollar, it is claimed, or it will require massive tax increases. It will take away your freedom of choice and you will lose your preferred doctor and hospital, and your current private — very likely employer-provided — health care plan. Anti-single-payer Democrats like Peter Buttigieg, Amy Klobuchar, and even Wall Street billionaire Michael Bloomberg are praised for their “innovative ideas,” centrist politics, and opposition to extreme and impractical ideas such as single-payer — or free college and forgiveness of student debt.

Senator Sanders, on the other hand, is pictured as an old man who has suffered a heart attack and supports totally impractical ideas. The Democratic Party leaders are warning the Democratic rank and file not to vote in the primaries and caucuses for Sanders. Sanders will never, the Democrats leaders insist, be able to defeat Trump because he will not be able to appeal to conservative “independents” and “moderate Republicans,” whose votes will be necessary to defeat Trump.

This, they falsely claim, is the lesson of the British election. They neglect to explain that the Liberal Democrats, the British Party that stands closest to the U.S centrist Democrats, was defeated more soundly than the Labour Party. And they neglect to mention that Boris Johnson promised to increase the funding for Britain’s national health care system, not abolish it.

But for the sake of argument let’s assume that Sanders can overcome all that, win the Democratic nomination, and actually defeat Donald Trump in the November 2020 election. A lot of people — workers of all races and nationalities, young people, and all others who reject Trump’s hateful demagoguery — will celebrate that November night. But what will happen after that?

The problem a President Sanders will face is that the Democratic Party is full of congresspeople and senators who oppose health care as a basic human right. Even if every last Republican up for reelection in the House (all of them) and in the Senate (a third of them) was defeated, the Democratic Party still has more than enough opponents of single-payer to defeat it. Sure, AOC and the “squad” and a few other “progressive” Democrats will vote for President Sanders’ single-payer legislation, but their votes will not be enough to overcome the opposition of the Democratic Party “moderates.”

What a president Sanders could do is use the bully pulpit of the presidency to educate on the need for health care as a right, as well as education as a right through college and forgiveness of student debt. .

Winning health care as a right — with or without a President Sanders — is not possible without a movement on the scale of the 1930s-era industrial union movement, the Civil Rights Movement, or the anti-Vietnam war movement, more likely a combination of all three. Such a movement would have to establish its own press — both on-line and printed — to expose the lies of the capitalists about people losing their beloved “private insurance plans,” the freedom to choose their own doctor — which, by the way, they often do not have under the current system — and the biggest one of all, “we simply cannot afford” it.

The opponents of single-payer, the Republicans and the Democrats, will point to the threat from Russia attacking “our elections” or Russia’s ally Iran — or the threat from China, the Arabs, Latin Americans, or even India and, who knows in the future, even Germany or Japan. Such a movement will if it is not to fail eventually have to form a new party of wage workers that will fight not only the Republicans — really fight them, not like the Democrats do — for their odious racism and their fascist allies, but also the Democratic Party itself.

The political situation in Britain compared to the U.S.

In Britain, health care as a right was won in the 1940s. Today, the question there is the defense of this right against capitalist attempts to erode it and eventually overthrow it. In the United States, health care as a right is yet to be won.

As we saw above, Americans are struggling for health care as a right not only against the united opposition of the Republican but the Democratic leadership as well and all the “major” presidential candidates with the exception of Sanders. In Britain, the Labour Party started out as a party based on the trade unions in the early 20th century. The leadership of the British trade unions always represented a bourgeois-liberal trend that operated within the unions and the broader workers’ movement. Therefore, the Labour Party was not and never has been a revolutionary party that represents the historical interests of the working class in opposing imperialism and transforming capitalism into socialism. Instead, this trend sought to improve the position of workers within the limits allowed by capital, landed property, King, Parliament, and country.

Despite this, the formation of the Labour Party still represented an historic step forward. Unlike in the 19th century, the British trade unions acknowledged that the workers’ movement couldn’t be “a pure and simple trade union movement” but had to be a political movement. A political movement doesn’t simply cut deals with individual capitalists — such as providing health insurance for workers employed by a particular boss — but has to take on the capitalist class politically such as fighting for health care as a human right. This is a step the U.S. trade union movement has yet to take, and this is why the U.S. alone among the “developed” capitalist countries does not have health care as a basic human right.

To be continued.


1 The “City” refers to the “City of London,” a one-mile-square area where the financial district is located. (back)

2 Under the global division of labor that prevailed during the early and middle 19th century, Britain provided finished goods while the rest of the world provided raw materials. For example, the Manchester-based textile industry used cotton as its main raw material, produced until the 1860s by African slave labor in the U.S. (back)

3 The “Volcker shock” by making the U.S. dollar relatively “scarce” put pressure on the Bank of England to make the British pound scarcer as well — tighten the money supply — or in the terminology of the day follow a “monetarist policy.” If the Bank of England had not done this, many British capitalists owning assets valued in terms of pounds and debts payable in dollars would have faced bankruptcy. (back)

4 Since it has been almost 50 years since the “stagflation crisis” of the 1970s, there is a visible tendency among some bourgeois economists to revive the policies that led to that crisis. This tendency is most clearly expressed in Modern Monetary Theory, which is gaining support among progressives around the globe. (back)

5 The historic defeat of the British working class did not go unnoticed among the retrogressive forces gaining influence in the Soviet Union and throughout eastern Europe — as the question of the succession to Leonid Brezhnev and his aging associates could not be put off any longer. With the failure of the British workers’ movement to pose a revolutionary solution to the stagflation crisis, one that posed point blank the failure of Keynesian economics, an historic opportunity was lost. Then, a few years later when Brezhnev finally died the most reactionary pro-capitalists forces won out in the Soviet Union and eastern Europe, unleashing a wave of unprecedented global capitalist reaction. (back)

6 This is not a zero-sum game because some nations — or their colonies — produce additional money material. Such a nation by exporting newly produced money material is in a sense running a trade surplus, but this trade surplus has the effect of a trade deficit because it increases the quantity of money in other nations. However, this doesn’t change the fact that the mercantilist theory, in contrast to the theory of comparative advantage, is correct when it brings out the antagonistic nature of international trade and the struggle for markets under the capitalist mode of production. (back)

7 The U.S. media virtually unanimously claims that the Putin government seized Crimea from Ukraine in 2014. Crimea indeed borders Ukraine. However, since at least the 1860s until today Crimea has had a predominately Russian population. In 1954, Nikita Khrushchev, who was then the First (General) Secretary of the Central Committee of the Communist Party of the Soviet Union, proposed at a Presidium (as the Politburo was then called) to give Crimea to Ukraine as a token of “friendship” between the Russian and Ukrainian peoples. (back)

Khrushchev’s son Sergei — now a U.S. citizen — claims that this was done for “administrative reasons.” However, according to Dmitri Shepilov (1905-1995), a former Soviet foreign minister and member of the Central Committee of the CPSU in the 1950s, this was not the real reason. In a memoir written in the 1970s, long before the current crisis, Shepilov indicates that Khrushchev was in effect rallying his political base in order to consolidate his role as the central leader of the Communist Party of the Soviet Union after Stalin’s death in 1953.

Khrushchev was the long-time head of the Communist Party of Ukraine. He was born in eastern Ukraine and largely considered a Ukrainian — though he claimed Russian nationality — meaning his main political base was the powerful Ukrainian Communist Party, which Khrushchev had headed since the end of Stalin’s purges of the 1930s.

According to Shepilov, the other members of the Presidium went along with Khrushchev because they wanted to maintain a united front in the post-Stalin era. The events that unfolded under Mikhail Gorbachev — which occurred after Shepilov wrote his memoir — shows that the Presidium members actually had good reason to do this. If they hadn’t maintained a united front, it would have put the rule of the Communist Party of the Soviet Union and continued existence of the USSR as a socialist state in danger. However, if we are to believe Shepilov, V.M. Molotov (1890-1986), Stalin’s number two man within the CPSU until Stalin turned against him in his final years, did privately express opposition to Khrushchev’s proposal to give Crimea as gift to Ukraine, but he too failed to oppose Khrushchev in the Presidium or Central Committee on this issue.

The background to this is that the revolution and then the collectivization of agriculture under the leadership of Stalin in the early 1930s, leading to a virtual civil war in the Ukraine, had sharply divided the Ukrainian people. That part of the population opposed to collectivization — especially the better-off peasants — was to look toward Nazi Germany to liberate them from the “Bolsheviks,” who had taken away their farm animals and other property to give to the collectives.

Nikita Khrushchev treated this opposition — which had taken an armed form in the late 1940s and early 1950s with considerable leniency — at least by the standards of the Stalin era. This put him in a position to pose as a “moderate Communist,” or “lesser evil,” in the minds of the Ukrainian nationalists. Khrushchev did what he could to integrate the nationalist “partisans” into post-World War II Ukrainian society, while Molotov in his memoirs claimed that Khrushchev was criticized when Stalin was still alive for his “rightist” policies.

Khrushchev, who was considered to have “populist” tendencies as leader of the Ukrainian Communist Party, had a reputation for being quite lax when it came to recruiting applicants for membership in the party, implying that a lot of “moderate” Ukrainian nationalists joined the party to work “from within.” These people would naturally become part of Khrushchev’s political base when the question of the succession to Stalin was posed.

Later policies of Khrushchev included his well-known denunciation of Stalin — not least his policies on collectivization — followed by his policy of selling off the farm machinery that previously had belonged to the state to the collective farms. This benefited the “strong” collective farms — many of which were located in Ukraine due to its rich agricultural land — at the expense of the “weak” collective farms and did major damage to agricultural production and therefore the entire Soviet economy.

This was admitted by the dissident Soviet historian Roy Medvedev (1925 -), who hated Stalin and was sympathetic to Bukharin and the old “right opposition” that Bukharin led. The right opposition had largely opposed Stalin’s collectivization of agriculture, which they viewed as premature and in violation of the basic Marxist principle that the collectivization of agriculture should be voluntary and never forced. Medvedev, being a sympathizer of the “right opposition,” was, in general, a sympathizer of Khrushchev and his policies as well. However Medvedev admitted that the denationalization of farm machinery had a very negative impact on agriculture.

All this would seem to confirm Shepilov’s view that Khrushchev was indeed pursuing political aims and not administrative efficiency when he “proposed” that Crimea be given as a gift from the Russian people to Ukraine.

As long as the Communist Party remained in power, and later after 1991, the Russian residents of Crimea were willing to tolerate Ukrainian rule, even though it probably wouldn’t have been their first choice. But when an anti-Russian Ukrainian nationalist government came to power through the U.S.-sponsored coup in 2014, the Crimean people supported by President Putin revolted and voted to rejoin Russia.

This — all proportions guarded — was somewhat like the still rather tongue-in-cheek suggestion that California with its Latino and other non-white majority secede from the U.S. after the election — or rather appointment by the Electoral College — of the racist Donald Trump as president. It seems that the people of eastern Ukraine — which the Czar, then Putin, and today’s Russian nationalists call[ed] “new Russia” — want to secede from the Ukraine and join Russia as well. However, Putin has not supported them in this since he views Russia as far too weak to safely carry this out in the face of the opposition of the U.S. world empire.

8 In the 1960s, Beijing was translated from Chinese characters to Peking in the Latin alphabet. In Chinese, this means “northern capital.” The city has often been the capital of China and has been China’s capital since 1949. However, in those years, U.S. government officials insisted when they referred to the government of the People’s Republic of China by the name “Peiping” underlining their refusal to recognize the government of China established by the Great People’s Revolution of 1949 rather than its proper name — Northern Capital Peking — or Beijing by today’s favored method of translating Chinese characters into Latin characters. (back)

9 This is not to say that the American people were correct to support the U.S. government in World War II. But there was almost no opposition to that war considering the nature of the Hitler regime in Germany, European fascism in general, and the fact that the U.S. was aligned with the socialist Soviet Union against Nazi Germany and oppressed China against imperialist Japan. (back)


%d bloggers like this: