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Global Turmoil
Disorder and People’s Struggles
Arup
Baisya
The world economic and political order is in great turmoil.
The US economic and geo-political world hegemony is based on two pillars.
The dollar, for all its faults and weaknesses, is the pivot of the entire
global system of currencies, stocks, bonds, derivatives and investments of
all kinds. Along with it, the military might for strategic geo-political
control is another pillar.
The third currency war which has been started from 2010
post-subprime crisis is taking new dimensions. In 1997 the US trade deficit
with China was less than $50 billion. Then the deficit grew steadily, and
in the space of three years, from 2003 to 2006, it exploded from $124
billion to $234 billion. This period, beginning in 2003, marks the
intensification of concern about the US-China bilateral trade relationship
and the role of the dollar-yuan exchange rate in that relationship.
China's internal deflation is exported to the United States
through the currency exchange rate and ends up threatening deflation in the
United States. This begins with the Chinese policy decision to peg the
exchange rate between the yuan and the dollar.
This meant that as the Fed printed dollars and those dollars
ended up in China to purchase goods, the People's Bank of China (PBOC) had
to print yuan to soak up the surplus. In effect, China had outsourced its
monetary policy to the Fed, and as the Fed printed more, the PBOC also printed
more in order to maintain the pegged exchange rate. The Chinese acquired
massive quantities of US Treasury obligations as their trade surplus with
the United States persisted and grew.
Chinese leaders have begun to make it easier to trade the
yuan in foreign exchange markets. On March 23, 2015, China backed the
Renminbi Trading Hub for the Americans. That makes it easier for North
American companies to conduct yuan transactions in Canadian banks. China
opened up similar trading hubs in Singapore and London. (Source:
"Canada Aims to Boost Deals in China Currency", The Wall Street Journal, March 23, 2015.)
The process of absorbing all the surplus dollars entering
the Chinese economy, especially after 2002, produced a number of unintended
consequences. The first problem was that the PBOC did not just take the
surplus dollars, but rather purchased them with newly printed yuan. By
early 2011, Reuters estimated that total Chinese foreign reserves in all
currencies were approximately $2.85 trillion, with about $950 billion of
that invested in US government obligations of one kind or another. The
United States and China were locked in a trillion-dollar financial embrace,
essentially a monetary powder keg that could be detonated by either side if
the currency wars spiralled out of control.
While the Russian ruble is in no position to replace the
dollar in international reserves, it could become a regional reserve and
trade currency for Russian and Central Asian gas suppliers and Eastern
European gas customers, dislodging the dollar to that extent at least.
Energy is a wedge used to forge a regional economic bloc with a regional
reserve currency, the ruble. Russia successfully maintained its regional
hegemony by establishing Gazprom's near monopoly on natural gas supplies to
Europe through pipelines transiting Ukraine and Belarus. Europe and US
backed company Nabucco 's attempt to circumvent these pipelines in a way
that neither uses Russian natural gas nor passes through Russian territory
has been foiled. Nabucco tried to source its gas initially in Azerbaijan
and later Kazakhstan and Iraq and traversed to Turkey on its way to Europe.
Russia also speaks openly of the dethroning of the dollar as the dominant
reserve currency.
Russia released its official "National Security
Strategy of the Russian Federation up to 2020," an overview of the
global strategic opportunities and challenges confronting Russia. In
addition to the usual analysis of weapons systems and alliances, the
strategy draws the link between energy and national security and considers
the global financial crisis, currency wars, supply chain disruptions and
struggles for other natural resources, including water. The strategy does
not rule out the use of military force to resolve any of these finance- or
resource-related struggles.
For now, it is enough to say that Russia has warned the
world of the coming blue fuel wars in both words and deeds.
While all currencies by definition represent some store of
value, the dollar is different. It is a store of economic value in a nation
whose moral values are historically exceptional and therefore a light to
the world. The debasement of the dollar cannot proceed without the
debasement of those values and that exceptionalism.
In global scenario, table has already turned, and US, it
seems, is oblivious of its containment. US is desperately flexing its
muscle and inciting war hysteria with pernicious show of its war machine,
when both US job market and wages are plummeting. When Turkey strikes a
missile deal with Russia, US war machines are displayed in Sweden under
NATO umbrella fearing deep fissures within NATO camp. When US fails to
compel North Korean rulers to kowtow, it brazenly applies sanction and
shows South Korean missile. Israel, the pivot of US Arab domination, has
been taken aback by the recent non-violent resistance by tens of thousands
of Palestanians mobilised in response to Israeli closure of old city. The
Palestenian youths forced open a gate in the Israeli separation wall. It's
a sign of rejuvenation of Palestanian movement. New form of grassroots
movement is emerging all over the world. And it's a sign of warning to the
imperialists of all hues.
The US is threatening to cancel nuclear agreement with Iran,
but other European signatories are averse to Trump's rhetoric. US failed to
tame North Korea despite repeated threatening of attack on Korean nuclear
installations. Through Russia's successful intervention, the US agenda to
dislodge Assad regime has failed. US show of its military might could not
dissuade China from its overwhelming claim on South China Sea. The
strategic interest of US in East Asia and Afganistan is getting jeopardised
by China's ever-increasing influence in East Asia through its One Belt One
Road (OBOR) project. The diffusion of Doklam crisis is in conformity with
the toning down of India's opposition to China's OBOR project.
One must comprehend where this disorder in world
geo-politics will lead. In view of the world capitalist economic crisis
which is showing no sign of overall revival post-subprime crisis, the
imperialist conflict for strategic control will deepen. If it triggers into
a full-fledged war, it will not last long with large-scale human and
natural catastrophe due to the use of nuclear arsenals which many countries
now posses.
So, while aligning with world-wide anti-war campaign and
people's movement, progressives in India must build popular pressure for
negotiation and dialogue with the neighbouring countries especially China
and Pakistan to resolve all vexed issues.
Throwing a Russian resources assault, a Chinese currency
assault and an Iranian military assault at United States interests in a
near simultaneous affront would produce predictable effects in the
hair-trigger world of capital markets. Markets would experience the financial
equivalent of a stroke.
The global economy in double whammy: the capital surplus
absorption problem due to scarcity of profitable destination for investment
and investment problem due to scarcity of fund of highly indebted banks.
Labour's earnings plummeted due to the widespread trend towards investment
in asset values instead of production and manufacturing, the asset value
also took a plunge. The gap between earnings and consumer spending is being
tried to cover by the rise of credit card industry and increasing
indebtedness.
The Japanese boom of the 1980s ended with a collapse of the
stock market and plunging stock prices and is still ongoing. To boost
investment, Japanese banks are maintaining near zero percent interest
rates. Investment in India for bullet train etc is an opportunity for the
Japanese. But this model of development will further screw the Indian
people. Indian banks are reeling under crisis due to bad loans and NPA, and
now expecting bailout package from Govt. with common Indian taxpayers'
money.
Despite the appearance of economic dynamism in China today,
sudden collapse is entirely possible and could be caused by things such as
inflation, rising unemployment, ethnic tensions or a burst of housing
bubble. Prolonged and widespread unemployment is potentially destabilising
in China.
In the midst of deep global economic crisis, India cannot
achieve export led growth as China achieved at the initial phase of
neo-liberalism in the eighties. The SBI report said, "GDP growth
during the second quarter of the current fiscal is expected to remain below
6 percent due to downward trend in export and muted growth in the
agricultural sector. The Gross Domestic Product (GDP) growth in the first
quarter had fallen to 5.7 percent". Though US imports of textile and
apparels have grown 30 percent between April and July, Indian export to US
remained at the same level. The slowdown in demand has only aggravated the
situation. The Indian economy is facing the cliff from where its downward
march would continue. As the economy contracts the news came of the massive
growth in net worth of the top 100 billionaires growing by 26% and who else
to top the chart but Mukesh Ambani whose net worth increased by a massive
67%. What people are witnessing is a jobless economic growth with
tremendous growth of capitalists.
The author of Capital in Twenty-first Century, Thomas Picketty, and his colleague Lucas Chancel at the
World Inequality Lab, Paris School of Economics, have provided the numbers
as far as incomes are concerned in their working paper "Indian Income
Inequality, 1922-2014". (Indian income inequality, 1922-2014 : From British Raj to
Billionaire Raj? :
Lucas Chancel, Thomas Piketty : July, 2017)
This report states "our results shed light on a
particularly striking characteristic of Indian growth over the past three
decades: the very moderate rise of the "middle class"—at least
defined as individuals above median income and below the top 10% earners.
Incomes of the middle 40% grew at 102% over the 1980-2014 period. Compared
to industrialized countries' growth rates for this group, the figure is
impressive. In the Indian context however, the middle 40% were notably
below average growth (187%). Since 1980, the middle 40% group in India
captured a much smaller share of total growth (25%) than its counterparts
did in China or Europe (more than 40%) or even the USA (33%). This result
should help us better characterize what has been termed as the rise of
India's middle class".
In this mirage of growth and despair the opportunity arises
from the revolutionary proletarian to give the clarion call for
redistribution of wealth through nationalisation, state intervention and
workers’ participation.
The uneven development is ingrained in capitalism especially
at its latest stage of imperialism. But the capitalism has the dynamic
capacity to annihilate the space with time. It can dismantle all
geographical barriers to bring sundry nations under its overwhelming
control. Geographical diversity is not anathema to capitalism, rather it is
necessary for its sustainability. Barring few African countries, every part
of the world has come under its fold. Capitalist relations of production
are in the driving seat when all other social relations have been remoulded
and co-opted under its command. When one talks about uneven development,
one must keep an eye on changing geographical landscape due to capitalist
restructuring and huge investment in assets. The rising Washington DC with
investment in social and physical infrastructure and contrasting sorry
state of affairs of once industrialised Pennsylvania with deserted
factories, dilapidated roads and bridges and unemployed workers speak
volumes about the capitalist restructuring. Who could have imagined that
Bengalore will develop as world's IT hub and Mumbai will take its present
look with high rise buildings. The investment of capital in assets is
displacing the toiling masses from its habitat and workplace. Capitalist
accumulation through displacement or primitive accumulation already displaced
crores of people from Indian agriculture as well as from urban and
semi-urban areas. The distress situation of agriculture due to lack of
Government investment and the presence of blood-sucking corporates in
agri-business, a huge number of migrating contractual labourers have been
created. On the one end, the organised labour has been dismantled through
capitalist neo-liberal restructuring and on the other hand a large
vulnerable proletariat or precariat is being created. In agricultural
sector, a new class of landlord capitalist and peasant capitalist have
emerged, the mid-peasant is almost extinct, and the number of agricultural
wage labourers has crossed the threshold to influence the change of
relation of production to capitalist one. But all the agricultural classes
have a score to settle with global corporate sharks that are in control of
labour process, surplus accumulation and input and output side of
production.
This new proletarianisation and precatrianisation has also
been changing the contours of all kinds of identity movements. The support
base of the dalit movements solely driven by identity rights without
focusing on the working class within the identities is dwindling, when
section of upper strata being co-opted in the overall corporate interest is
siding with the ruling class. When there is loss of jobs of muslims and
lower castes Hindus who cart cattle, labour in tanneries and make shoes,
bags and belts including for big name brands such as Zara and Clarks, the
Dalit middlemen who are in supply chain are with ruling class. The timings
of banning and lynching in the name of cow nationalism are in sync with
claim of big exporters that that they have enough leather as they source
hides widely, including from abroad. However, the emergence of new Dalit
movement which is highlighting the rights of Dalit workers is noticeable.
Without organising this working class, there cannot be any
effective resistance movement against corporate onslaught. There are
structural barriers to achieve the unity of working class. These working
classes are disorganised and compartmentalised with their diverse immediate
interest. But there is also a commonality in their desire of wage-hike and
social security. They are also divided on caste-identity fault lines. The agenda
of identity rights and opposition of caste oppression needs to be
incorporated within the working-class struggle with strenuous and
continuous pedagogic efforts. The socio-economic gap between the mental
working class predominantly comprising of upper-castes and the manual
working class is huge in Indian reality and this needs to be addressed
through a simultaneous cultural movement too.
The resistance movement against land grabbing and eviction
or the movement against the capitalist accumulation by displacement as
David Harvey termed it is not enough to build a revolutionary struggle
against corporate onslaught. If progressives fail to build a revolutionary
working-class movement, the fascist forces are bound to raise their ugly
face. When capitalism is in crisis and the working class is in disarray,
the fascist forces are bound to rise.
Due to jobless growth and dismantling of state-guaranteed
social security, the exponentially rising parliamentary curve of Bharatiya
Janata Party (BJP) has been momentarily halted. In the recent by-elections
and very recently held Gujarat Assembly elections, the downward trend of
the curve is also visible. But there is no scope for complacency, the
revolutionary popular upsurge under the leadership of working class can
only defeat fascism effectively. One must bear in mind that the fascist
forces backed by RSS have taken two-pronged strategy for fascist take over.
One is overt fascist mass movement on the issue of Hindutwa—illegal
migrants, infiltration, refugee etc and other is more insidious nature of
changing the character of democratic institutions through infiltration of
fascist forces. On the second front, RSS has achieved substantial success.
No doubt the Supreme Court is still giving citizens some respite by pronouncing
democratic judgement on Privacy issue, Rohingiya issue etc. But this will
not be sustainable, if BJP once again reign in power post 2019-election.
The revolutionary forces should rise to the occasion when
Indian economy is in deep crisis, to build the working class revolutionary
core with a view to develop united anti-fascist struggle of all social and
political anti-BJP democratic forces.
The two things that capitalism exploits are the labour and
nature for profit and accumulation. The human being has been evolved from
and is organically linked with nature and thus human body is the metabolic
unity of labour and nature. The separation between natural, inorganic
conditions of human existence and living & active humanity is a
separation which is completely posited only in the relation of wage labour
and capital. In the capitalist social relations of production, the
metabolic rift between labour and nature occurs and capitalists control the
labour process to exploit both labour and nature and thus destroy the
balance of nature. The capitalist carbon economy and unbridled exploration
of natural wealth has already destroyed the nature to such an extent that
it is beyond the reach under the capitalist profit-motive to repair the
damage and rejuvenate nature.
The genius of capitalism's Cheap Nature strategy was to
represent time as linear, space as flat, and nature as external.
Recognising capital accumulation as both objective process and subjective
project, Marx's value thinking offers a promising way to comprehend the
inner connection between accumulation, biophysical change, and modernity as
a whole. So, to save earth and the humanity from ecological disaster,
people must have a project to go beyond capitalism.
The global warming, holes in Ozone layer and rise in sea
water level have posed disastrous consequences to the existence of human
civilisation. The first world or industrial north, with about 25 percent of
the world's population and owning about 86 percent of the world's industry,
consumes 80 percent of world energy. The US, with around 5 percent of world
population, has been estimated to consume 20 percent of the world's
non-renewal energy resources. The US gobbles up a quarter of the world's
energy supplies, about as much energy as used by entire third world. Under
the pressure of global opinion, global leaders reached an agreement known
as Kyoto Protocol to address ecological issues. But industrial north
especially the US diluted the obligatory provisions of Kyoto Protocol and
designed a new agreement known as Paris Agreement with voluntary
provisions. Now President Trump is threatening to withdraw from Paris
agreement too. The people's struggle against capitalist development and for
sustainable development model needs to be launched with a view to march
ahead beyond capitalism, can only save humanity from ecological disaster.
Indian people are bearing the brunt of both global
ecological degradation and the capitalist development model. Many states
and cities are encountering repeated floods and draught. For example, due
to the release of water from the Big Dams, the large landscape of lower
Assam has been inundated with three consecutive floods in this year.
There is a sustained anti-dam movement in various parts of
India including Assam. But the difficulty is that the workers engaged in
the construction and running of Big Dams and ancillary industries are not
averse to its construction due to their immediate livelihood issue. So, it
is necessary to formulate a programme on sustainable development model
along with anti-dam movement.
Frontier
Vol. 50, No.27, Jan 7 - 13, 2017
http://www.frontierweekly.com/articles/vol-50/50-27/50-27-Disorder%20and%20Peoples%20Struggles.html
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