China talks Marxism, but still walks capitalism

If there is one message that seemed to surface through last month’s crucial meetings of the Communist Party of China it is continuity. The inference that might best be taken is no significant change from the path on which the party has led China in recent years should be expected. 

That path, despite the oft-used slogan “Socialism with Chinese Characteristics for a New Era,” has been a restructuring of the economy toward capitalism, albeit a gradual entry on Chinese terms and keeping the “commanding heights” of the economy in state hands. If we attempt to grasp the meaning of the communiqués and reports issued surrounding the party’s 20th National Congress, it would be better to observe through a holistic lens rather than fixating on personalities.

The Western corporate media obsessively dwelled on President Xi Jinping’s third term, as if nothing else was of note or as if President Xi is an all-powerful sole dictator single-handedly deciding the fate of 1.4 billion Chinese. To be sure, communiqués, internal press reports and speeches repeatedly stressed the party leader’s “core position” and urged all Chinese to fully study and implement “Xi Jinping Thought” along with the ritualistic panegyrics to the party. There appears to be no doubt as to his leadership, both through the extravagant praises for him and that the top leadership body, the Politburo Standing Committee, appears to consist solely of those aligned with him.

Mount Emei/Emei Shan in Sichuan province. (Photo by McKay Savage, London.)

But nobody in a country ruled by a communist party is a sole dictator, excepting the unique circumstances of the Josef Stalin dictatorship and Enver Hoxha in Albania. Given the opaqueness of the Communist Party of China (CPC) it is impossible for us to say with any certainty what is going on behind closed doors. Is President Xi truly all-powerful, or does he lead a faction that has gained majority backing among party leaders? Does his third term, breaking two decades of precedent, represent not a grab for power but rather a reflection of opinion alignment behind closed doors and a desire for continuity in a time when more difficulties are almost assuredly coming? Certainly this is possible.

Let’s turn away from parsing personalities and instead examine key communiqués and reports, and how we might reasonably interpret them.

Prominently continuing to honor all past leaders

The most important document to read is arguably the Resolution of the 20th National Congress of the CPC on the Report of the 19th Central Committee adopted at the closing session of the Congress on Oct. 22. The very first paragraph reads:

“The Congress has held high the great banner of socialism with Chinese characteristics; adhered to Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory, the Theory of Three Represents, and the Scientific Outlook on Development; and fully applied Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era.”

This list is repeated five paragraphs later. Why would this be significant? That it is the opening of the resolution is significant because it is nearly identical to the equivalent statement issued in 2017 when the 19th Communist Party Congress adopted the report of the then outgoing Central Committee. Then, as now, every Chinese leader is mentioned. The “Scientific Outlook on Development” is the product of President Xi’s predecessor, Hu Jintao, who declared that China must end its reliance on cheap labor and invest more in science and technology. The “Theory of Three Represents” was laid down by former President Hu’s predecessor, Jiang Jemin. (Incidentally, this tends to throw cold water on the idea that former President Hu was “ejected” from the Congress; if the current leaders were intent on “humiliating” him as corporate media commentaries assert, why would the party enshrine his policy in their most important communiqués?)

That October 2017 party Congress confirmed that the role of the market would be “decisive” rather than “basic,” consistent with the CPC leadership switching the role of the market from “basic” to “decisive” in 2013 at a key Central Committee plenum. That would certainly seem to contradict the stress on Mao Zedong Thought, a major pillar that the party consistently upholds as a source of authority. That pillar is in contradiction with the era of Deng, who inaugurated China’s move from its Maoist path and toward the introduction of capitalism. It is in particular a contradiction with former President Jiang’s “Theory of Three Represents,” a declaration that the party should represent the most advanced productive forces, the most advanced culture and the broadest layers of the people. That is an assertion that the interests of different classes are not in conflict and that the party can harmoniously represent all classes simultaneously.

The skyline of Beijing (photo by Picrazy2)

Because there is no way to reconcile these divergent programs, the consistent listing of all party leaders since the 1949 revolution can reasonably be read as a statement of continuity with the decades of China’s current capitalist path, stretching back to the early Deng years. Yet the Resolution of the 20th Congress, in apparent contradiction to China’s growing private sector, the stress on the “decisive” nature of markets and China’s integration into the world capitalist system, declared that Marxism remains central to the party’s work. The resolution states:

“The Congress stresses that Marxism is the fundamental guiding ideology upon which our Party and our country are founded and thrive. Our experience has taught us that, at the fundamental level, we owe the success of our Party and socialism with Chinese characteristics to the fact that Marxism works, particularly when it is adapted to the Chinese context and the needs of our times. [The party] has achieved major theoretical innovations, which are encapsulated in Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. … Only by integrating the basic tenets of Marxism with China’s specific realities and fine traditional culture and only by applying dialectical and historical materialism can we provide correct answers to the major questions presented by the times and discovered through practice and can we ensure that Marxism always retains its vigor and vitality.”

Further, President Xi, in his keynote report to the 20th Congress, also stressed the importance of Marxism. He said:

“The sound theoretical guidance of Marxism is the source from which our Party draws its firm belief and conviction and which enables our Party to seize the historical initiative. … Taking Marxism as our guide means applying its worldview and methodology to solving problems in China; it does not mean memorizing and reciting its specific conclusions and lines, and still less does it mean treating it as a rigid dogma.”

Drawing on past triumphs to justify present policies

Understood properly, Marxism is a living body of work and not a catechism, and can only be applied with creativity and analysis of concrete conditions. Nobody can rebuke the Chinese for adapting it to their particular circumstances and need to develop rapidly. But at what point does a “socialist market” economy tip over to a capitalist-oriented economy? There is no bright line that can be drawn but at some point, the rubicon has been crossed. Then there is the matter of what lessons might be drawn. Another clue as to what might be expected from the party in the near future might be derived from a visit by the Politburo Standing Committee to Yan’an, the old revolutionary base in northwest China. A report by Xinhua, China’s news service, quoted President Xi as stating that “the firm and correct political direction was the essence of the Yan’an Spirit.”

The lesson to derive from that spirit, according to President Xi, is that progress depends on the party and that party leadership is unquestionable. Xinhua summarized his interpretation of that spirit as follows:

“All Party members must adhere to the correct political direction, resolutely implement the Party’s basic theory, line, and policy, thoroughly implement the Party Central Committee’s decisions and plans, so as to further advance the great cause pioneered by revolutionaries of the older generation. … All Party members must stand firmly with the people, act on the Party’s purpose, put into practice the mass line, maintain close ties with the people, take the initiative to apply the people-centered development philosophy to all work, and achieve solid progress in promoting common prosperity, so that the people share more fully and fairly in the gains of modernization.”

Shanghai (photo by dawvon)

So there won’t be any slackening of party discipline, nor of any loosening of authoritarian party control over society. Nor will there be any swerving from the long-standing goal of achieving “common prosperity.” To return to the Resolution of the 20th Congress, the party states its goal as:

“[F]irst, basically realizing socialist modernization from 2020 through 2035; second, building China into a great modern socialist country that is prosperous, strong, democratic, culturally advanced, harmonious, and beautiful from 2035 through the middle of this century. [One of the main objectives in the next five years is to] Make new strides in reform and opening up; make further progress in modernizing China’s system and capacity for governance; further improve the socialist market economy; put in place new systems for a higher-standard open economy. We should continue reforms to develop the socialist market economy, promote high-standard opening up, and accelerate efforts to foster a new pattern of development that is focused on the domestic economy and features positive interplay between domestic and international economic flows.”

The reference to “positive interplay between domestic and international economic flows” is another signal of continuity. In May 2020, the Politburo announced a policy of “dual circulation” development. This policy represents lessening China’s reliance on exports and imports — “international circulation” — and rebalancing with production for the domestic market. This is intended to lessen China’s reliance on imports for its production and become more self-reliant in the wake of U.S.-led Western hostility to Chinese technological development. Just last month, the Biden administration announced sweeping prohibitions on the sale of semiconductors, advanced computing chips, chip-making equipment and other high-technology products to curb China’s ability to indigenously develop these technologies.

“The plan places a greater focus on the domestic market, or internal circulation, and is China’s strategic approach to adapting to an increasingly unstable and hostile outside world,” according to an explanatory article in the South China Morning Post. “Officially, China will look inward to tap the potential of its huge domestic market and rely on indigenous innovation to fuel growth. But despite the increased emphasis on the domestic market and on self-reliance in some sectors, President Xi has said repeatedly that China will not completely close itself off from the outside world, and will instead open up more.”

The dual-circulation policy is also a response to an expected reduction in reliance on exports on the part of China’s export destinations in the wake of economic disruptions caused by the Covid-19 pandemic. The Morning Post writes, “It is essentially a defensive approach by Beijing to prepare for the worst-case scenario as the world undergoes significant geopolitical and economic changes. The coronavirus exposed how dependent the world was on China for critical supplies of medical equipment, with nations around the world vow[ing] to be more self reliant on such products, amid a push by the US for a sharp decoupling of the world’s two largest economies.”

Investment, not consumer consumption, continues to drive economy

The dual-circulation policy has been integrated into China’s 14th five-year plan, covering 2021 to 2025. But this policy doesn’t represent any jarring change from past policy, as China has long sought to re-balance its economy to improve consumer consumption. Progress here has been slow — household consumption there was reported at only 40% in 2021, little improved from 36% in 2007. (Household consumption is all the things that people buy for personal use from toothbrushes to automobiles.) By comparison, advanced capitalist economies tend to have household consumption account for 60% to 70% of their economies. China will remain an investment-dependent economy for some time to come.

The funds necessary for China’s massive domestic investments don’t come simply from trade surpluses; they also come from depressed living standards. That means low wages for most Chinese and increased inequality.

“[T]he vast majority of China’s citizens still have a disposable income of less than 5,000 yuan per month, and over two-thirds of the population make substantially less,” according to the China Labor Bulletin, a a non-governmental organization based in Hong Kong that “supports and actively engages with the workers’ movement in China.” For comparison, 5,000 yuan equals US$686. And even that paltry amount is well above the minimum wage. The Bulletin report says, “The highest monthly minimum wage as of July 2020 was in Shanghai (2,480 yuan), which was roughly double the minimum wage in smaller cities in provinces such as Hunan, Hubei, Liaoning and Heilongjiang. In setting this wage, local governments are focused on industry concerns and local investment rather than on ensuring a liveable wage for workers, and employers likewise still find ways to avoid paying the minimum wage.” For comparison, 2,480 yuan equals US$340.

Chinese regulations mandate that each region should set its minimum wage at between 40 and 60 percent of the local average wage, but very few cities have ever reached that target, the Bulletin report says. “Moreover, the discrepancy between the average and the minimum wage has actually increased over the last decade as higher wages for the privileged few has pushed the average wage up and wages for the lowest-paid have stagnated. In many cities such as Guangzhou and Chongqing, the minimum wage is now less than 24 percent of the average wage, while in Beijing, which has some of the highest-paid employees in the country, it is just under 20 percent.”

People’s Grand Hall in Chongqing (photo by Chen Hualin)

Similar to advanced capitalist countries, inequality is worsening in China. “The annual average per capita disposable income of the richest 20 percent in China’s cities increased by nearly 34,000 yuan in the seven years from 2013 to 2019, while the disposable income of the poorest 20 percent in urban areas grew by just over 5,500 yuan during the same period,” the Bulletin report says. The report makes a damning conclusion familiar to those living in places with harsh inequality like the United States:

“A superficial glance at China’s major cities seems to show a reasonably affluent society: young, hard-working, middle-class families, determined to make a better life for themselves. This illusion was shattered however in late 2017 when the municipal government of Beijing embarked on a 40-day high-profile campaign to clean out the city’s shanty towns and evict the so-called ‘low-end population’ who produce, market, and deliver the goods, services and lifestyle products that Beijing’s middle class families aspire to have. The evictions revealed the harsh truth that the affluence of China’s cities depends almost entirely on the impoverishment of the underclass.”

There is no independent organization pushing against inequality. The All-China Federation of Trade Unions is the sole legal union confederation in China; independent unions are not tolerated. Although the ACFTU is tasked with protecting workers and sometimes stands up for them, overall it “has rarely been a staunch advocate for workers” and is “dedicated to ensuring ‘harmonious labour relations’ and smooth economic development for the nation.” Strikes are often carried out in defiance of the ACFTU but as a consequence tend to be localized and uncoordinated. The Bulletin has recorded 666 strikes thus far in 2022, roughly on pace with 2020 although down from 1,095 in 2021.

Development, but who is benefiting?

Who is enjoying the fruits of “smooth economic development”? China has 1,133 billionaires in 2022, up 75 from previous year, the most in the world and ahead of the U.S., according to the party newspaper Global Times. The paper celebrated this in its report, saying the high number of billionaires “underlined robust growth in various industries in China.”

Somehow that is not consistent with the construction of a socialist, egalitarian economy. Nor does it meet with disapproval from “think tanks”  in the West that are dedicated to upholding and strengthening corporate domination.

Interestingly, separate papers recently issued by the Peterson Institute for International Economics and Citibank both predict further privatization in China, which, naturally, they approve. It’s good to remember here that although the corporate mass media routinely lies and passes off propaganda as news for popular audiences, those sources are truthful when the audience is big business; the bourgeoisie wants accurate information. (A nice example illustrating this is a general strike in Copenhagen in the late 1990s in which a key demand was a sixth week of mandatory paid vacation for Danish workers. I read not a word about it in general newspapers but there was daily coverage in the Dow Jones Newswire, an expensive service used by financiers, where I worked at the time.)

Although the state sector of the Chinese economy slightly increased this year, reversing a long trend of shrinkage, there seems little concern from capitalist boosters. The Peterson Institute, which has never seen a corporate-promoting so-called “free trade” agreement it didn’t like, declared that global commodity price increases and China’s property crisis were behind the “pause in the rise of the private sector.” It would be “simplistic and premature” to conclude 2022’s reverse is permanent, assuring its wealthy readers that “the drop in the previous private-sector advance should not be viewed as the start of a new trend of continuous decline, at least not yet.”

Nor are Citibank economists worried. A Citibank report similarly called the idea of a reversal of privatization “superficially attractive.” Rather, “support for private sector development is evident in a number of ways in recent years, from the effort to simplify the process of registering businesses to a new bankruptcy law and greater reliance on the court system to successfully adjudicate commercial disputes.” As to the “dual circulation” strategy, the bank notes that a fear that the U.S. might impose sanctions on China similar to those on Russia are driving China’s move toward self-reliance, and that reliance in turn will lead to reduced export opportunities for U.S., Germany, Japan, South Korea and Taiwan. That trend nonetheless dates back to the Trump administration’s moves against Beijing.

In contrast to continual forecasts in the corporate mass media predicting collapse for the Chinese economy, Citibank economists seem to believe China will be fine, in part due to the big trade agreement it signed in November 2020 with Asia-Pacific countries while subtly acknowledging growing critiques of runaway neoliberalism. “China’s engagement with the Regional Comprehensive Economic Partnership is a sign that even if the world is experiencing deglobalization, a growing regionalization might end up being the most likely replacement for the kind of globalization that now seems anachronistic,” the Citibank report says.

More state-owned enterprises would help Chinese workers

Corporate interests across the West would of course like more and faster privatization, as would the governments, especially the White House, that cater to those interests. But would that be a good idea? In contrast to standard discourse that mindlessly intones “private good, government bad,” when actual studies are conducted — naturally, only done by heterodox economists not interested in parroting propaganda for public consumption — a much different picture arises.

A study published in the March 2022 issue of Review of Radical Political Economics concludes that “a higher share of state-owned enterprises is favorable to long-run growth and tends to offset the adverse effect of economic downturns on the regional level.” The paper’s authors, Hao Qi and David M. Kotz, found that China’s state-owned enterprises (SOEs) in 2015 had average wages 65% higher than private enterprises; most SOE employees have access to social security, while only a few private-enterprise employees have access to it; and SOE working hours are less than in the private sector. (These findings should be no surprise to anybody familiar with conditions in China’s many sweatshops.) 

SOEs are not just good for employees; they are better for the economy as well. The authors write:

“SOEs have played a pro-growth role in the Chinese economy in several ways: first, SOEs play the role of an economic stabilizer, offsetting the adverse effect of economic downturns; second, SOEs promote technical progress by carrying out investments in riskier technical areas. In addition, SOEs have established a high-road approach to treating workers by providing workers with a living wage, which is crucial for the reproduction of labor power. We suggest that this high-road approach has a potential pro-growth role, which is favorable for the transition of the Chinese economy to a more sustainable growth model in the near future. SOEs appear to be less profitable than private enterprises; however, the higher profitability of private enterprises to a large extent results from the intense exploitation of their workers. If the profits of private enterprises are invested, the result is growth—but profits of private enterprises also go to dividends and non-productive uses such as speculative purchase of existing assets.”

Three Gorges Dam, a project funded by the World Bank that displaced 1.3 million people (photo by Christoph Filnkössl)

The low wages paid by the private sector — which gives the appearance of those enterprises being more efficient — weakens the Chinese economy. An over-reliance on investment and exports are also de-stabilizing factors, the authors write.

“With low wages, the consumption demand of the economy has been insufficient, making the economy vulnerable to overinvestment, trade conflicts, and external shocks from the global economy. Thus, moving to a more sustainable growth model requires steadily increasing wages and consumption in aggregate demand and moving away from reliance on investments and exports. It is easier for SOEs to accept higher wages given their high-road approach to treating workers. Thus, SOEs can be the bridge that connects the old and a more sustainable new economic model.”

Noting that most economic literature “fails to consider that private enterprises treat their workers badly,” the role of SOEs in stabilizing economic growth is ignored. The study by Dr. Qi and Dr. Kotz concludes that “privatization would be harmful to economic growth in the long run. In our view, privatization would destroy a central pillar for China to be able to achieve sound economic growth under unfavorable conditions.”

Too much reliance on private sector counter-productive

Another heterodox economist, Michael Roberts, also argues that privatization would be counter-productive. “[I]t is China’s large capitalist sector that threatens China’s future prosperity,” he writes. Debt and rising housing prices are products of a reliance on the private sector

“The real problem is that in the last ten years (and even before) the Chinese leaders have allowed a massive expansion of unproductive and speculative investment by the capitalist sector of the economy. In the drive to build enough houses and infrastructure for the sharply rising urban population, central and local governments left the job to private developers. Instead of building houses for rent, they opted for the ‘free market’ solution of private developers building for sale. Beijing wanted houses and local officials wanted revenue. The capitalist housing projects helped deliver both. But the result was a huge rise in house prices in the major cities and a massive expansion of debt. Indeed, the real estate sector has now reached over 20% of China’s GDP.”

There will not be a financial crash in China, Mr. Roberts writes, because the country’s big banks are in state hands and the government can order them to take whatever measures are necessary to stabilize the financial system, tools not available elsewhere. Nonetheless, the CPC’s “common prosperity” project has been launched due to the pandemic exposing “huge inequalities to the general public,” with China’s billionaires reaping benefits while ordinary people suffer lockdowns. The share of personal wealth for China’s billionaires doubled from 7% in 2019 to 15% of GDP in 2021, Mr. Roberts reports. What China needs, he writes, is more planning and accountability:

“These zig zags are wasteful and inefficient. They happen because China’s leadership is not accountable to its working people; there are no organs of worker democracy. There is no democratic planning. Only the 100 million CP members have a say in China’s economic future, and that is really only among the top. Far from the answer to China’s mini-crisis requiring more ‘liberalising’ reforms towards capitalism, China needs to reverse the expansion of the private sector and introduce more effective plans for state investment, but this time with the democratic participation of the Chinese people in the process. Otherwise, the aims of the leadership for ‘common prosperity’ will be just talk.”

Before and during President Xi’s reign, privatization and reliance on exports have increased. The reforms inaugurated in the Deng era and continuing into the 2000s brought forth special economic zones to draw in foreign direct investment (FDI), job security guarantees replaced with contracts, welfare provisions scrapped, privatizations, state-run companies converted to state-owned enterprises expected to maximize profits, 50 million laid off and an intensification of work. Fifty millions layoffs! The government has sought to retain the “commanding heights” of the economy while divesting itself of smaller and medium-sized enterprises through closings and bankruptcies, a policy begun in the late 1990s of “grasping the large and letting the small go.”

Privatization and layoffs on China’s path toward capitalism

A couple of numbers illustrate how far-reaching China’s move toward capitalism has been. As late as the end of 2010, among China’s 100 largest corporations, 78% of aggregate market value was held by SOEs vs. 8% for the private sector. By June 30, 2022, it was 42% for SOEs and 45% for the private sector. That’s just the largest enterprises. When we look at the Chinese economy as a whole, SOEs accounted for about 25% of the economy in 2021, according to a source that wishes that total to be far lower. Finally, China’s debt is estimated at 350% of its gross domestic product, an extraordinarily high sum even if that is not an immediate problem given the country’s large trade surpluses.

China’s winding road toward capitalism needn’t be seen as intentional or the product of any cabal. A strong critic of China from a Left perspective, Ralf Ruckus, who is highly critical of what he calls China’s definitive return to capitalism, nonetheless offers this explanation: “This transition was not the result of a detailed master plan or blueprint but of a series of — often experimental — reform steps taken to improve the country’s economic performance, save the socialist system, and stabilize CCP rule. This is the meaning of the phrase ‘crossing the river by feeling the stones’ that Deng Xiaoping allegedly used to describe his understanding of the course of reform.”

Of course, none of us outside the party leadership, and certainly those of us outside the country, can know for sure what the long-term intentions might be. Our guides are the communiqués following important party meetings, the speeches of party leaders and, most importantly, the policies carried out and the concrete results of those policies.

President Xi had begun taking steps to reign in certain Chinese capitalists and has more frequently talked about Marxism, even before last month’s party gatherings. Whether these are the opening moves of a future reversal back toward socialism or simply an assertion of party rule will not be known for some time. Even if it were true that the moves toward capitalism since the 1990s are intended to be a temporary expedient, as some pro-China Leftists in the West like to argue, becoming more deeply entangled in markets and the world capitalist system carries its own momentum, a drift not at all easy to check. There are industrial and party interests that favor the path China has been on since the 1990s, and those interests represent a significant social force that would resist structural moves toward socialism.

Whatever long-term intentions the party leadership may have, its short-term tactical policies are likely to be driven by a need to counteract U.S.-led aggression against it, which implies a high likelihood of increased diversion of internal resources toward a continuing military buildup. Increased tensions between Beijing and Washington are not in the interests of working people on either side of the Pacific. The U.S. maintains its global hegemony through its stranglehold on the global financial system even more than through military strength, and that domination, while eroding, remains far from any danger of being toppled. China, then, will surely be focused on internal development for some time to come. That development is increasingly capitalist-based, a direction that is fraught with contradictions and dangers.

In the former Soviet bloc, socialism came to be seen as simply expropriation and building industry. But placing production in public or state hands is merely a pre-condition, not the actual content, of socialism. Moreover, China is moving toward, not away, from privatization. A fuller definition of socialism mandates that democracy be extended to economic and political matters, beyond what is possible in capitalism. Socialism can be defined as a system in which production is geared toward human need rather than private profit for a few; where everybody is entitled to have a say in what is produced, how it is produced and how it is distributed; that these collective decisions are made in the context of the broader community and in quantities planned to meet needs; political decision-making is the hands of the communities affected; and quality health care, food, shelter and education are human rights. There is no class, vanguard or other group that stands above society, arrogating decision-making, wealth and/or privileges to itself.

It is easy enough to point out that such conditions are far from reality in any capitalist country. But such conditions are far from reality in China as well. The Chinese nation must develop within a world capitalist system deeply hostile to any attempt at building an alternative, has its own strong cultural traditions, and must find its own path toward development while navigating a complex set of economic pressures. Nor can any expectation that any socialist path can be easy or short be realistic, as history as amply proven. At the same time we shouldn’t mechanically make assumptions because of the label a country’s ruling party uses to name itself. Better to analyze with a clear eye.

Yes, Gorbachev was a failure but other hands helped bring down the Soviet Union

The reasons for the fall of the Soviet Union are myriad and can’t be laid solely at the feet of one person. Mikhail Gorbachev is widely despised by Russians as well as by activists and partisans of the Left. There are good reasons for that. It is impossible to imagine the collapse of a superpower and the catastrophic effects of imposing capitalism via “shock therapy” that immiserated a vast country without him. 

But if we are serious about analyzing history, and the ongoing effects that history has on the present day, we must take a dialectic approach, and examine this history in all its complexities. Amid the triumphalist accolades heaped upon Gorbachev upon his death from Western capitalists and the opprobrium heaped on upon him by his many critics — continuing a pattern of three decades since the Soviet Union’s dissolution at the end of 1991 — we might take a more nuanced view.

The preceding is not to deny that Gorbachev was, ultimately, a failure who disorganized an economy and set in motion one of the greatest economic collapses ever recorded. But to pin all blame on him ignores not only other personalities but the stultifying effects of an economy badly in need of modernization and democratization, a sclerotic political system and the social forces and corruption set in motion during the reign of Leonid Brezhnev. Nor would it be fair to exclude the unrelenting pressure put on the Soviet Union and other countries calling themselves “socialist” that did much to distort and undermine those societies. 

Nonetheless, a serious examination must concentrate on internal factors, those the responsibility of Gorbachev, and those where responsibility lies elsewhere. That was the approach taken in my book It’s Not Over: Learning From the Socialist Experiment, and it is that book’s fifth chapter, The Dissolution of the Soviet Union — that forms the basis of this article. Indeed, the mounting problems of the Soviet Union were not unnoticed within its borders — from the 1960s, academic institutions published reports detailing the bottlenecks built into the system and reform plans were drawn up within the government, but mostly were ignored.

Mikhail Gorbachev was praised by Western leaders who were happy to see shock therapy imposed on Russia (Credit: George H.W. Bush Presidential Library and Museum)

The edifice of the Soviet Union was something akin to a statue undermined by water freezing inside it; it appears strong on the outside until the tipping point when the ice suddenly breaks it apart from within. The “ice” here were black marketeers; networks of people who used connections to obtain supplies for official and illegal operations; and the managers of enterprises who grabbed their operations for themselves. Soviet bureaucrats eventually began to privatize the economy for their own benefit; party officials, for all their desire to find a way out of a deep crisis, lacked firm ideas and direction; and Soviet working people, discouraged by experiencing the reforms as coming at their expense and exhausted by perpetual struggle, were unable to intervene.

Five years of reform with meager positive results in essence caused Gorbachev to throw in the towel and begin to introduce elements of capitalism. Gorbachev intended neither to institute capitalism nor bring down the Soviet system, but by introducing those elements of capitalism, the dense network of ties that had bound it together unraveled, hastening the end. To say this, however, is not at all to agree with some simplistic and unrealistic ideas out there that Gorbachev was a trojan horse intent on destruction. Every so often, over a period of many years, an article circulates online purporting to quote Gorbachev that he was intent on destroying the Soviet Union from the beginning of his career and worked patiently until he was in a position to do so. But this “confession” has allegedly appeared in many different publications in several different countries. The last time I saw this peddled it was an alleged article published in a Turkish newspaper. One might ask: Why would he make a spectacular confession such as this to an obscure publication in Turkey?

People who circulate such nonsense are simply seeking a scapegoat, and either can’t be bothered to study the actual conditions of the Soviet Union or are so blinded by a rigid ideology that they have ceased thinking. Again, this in no way suggests Gorbachev doesn’t have a huge responsibility to history. One can be a firm critic of the Soviet Union and still lament what happened. 

Changes needed, but what changes?

Serious reforms were necessary; that is why the members of the Politburo, the Communist Party of the Soviet Union’s highest body, finally named Gorbachev general secretary. There was also strong support for his elevation among the party’s regional and provincial first secretaries, who formed the backbone of the Central Committee. When Andrei Gromyko, the foreign minister for a quarter-century and stalwart of the party’s old guard, endorsed Gorbachev’s ascension, that essentially clinched the promotion. Reforms had been attempted since 1965, when Prime Minister Aleksei Kosygin first proposed reforms that went nowhere. But by 1985, even the most doctrinaire party leader knew changes were necessary. The political and economic systems were out of date. A Soviet book published 20 years earlier declared that “a system which is so harnessed from top to bottom will fetter technological and social development; and it will break down sooner or later under the pressure of the real processes of economic life.”

Gorbachev started by stressing the “strengthening of discipline,” cracked down on alcohol, readily discussed the need for improvements in consumer products and consolidated several ministries to retool industry. He also pushed out several high-ranking officials opposed to any reforms, demanded “collectivity of work” in all organizations and declared that collective work is a “reliable guarantee against the adoption of volitional, subjective decisions, manifestations of the cult of personality, and infringements of Leninist norms of party life.”

Even before he became general secretary, Gorbachev had begun meeting with intellectuals working in Soviet institutions, later recalling that his safe was “clogged” with proposals. “People were clamoring that everything needed to be changed, but from different angles; some were for scientific and technical progress, others for reforming the structure of politics, and others still for new organizational forms in industry and agriculture. In short, from all angles there were cries from the heart that affairs could no longer be allowed to go on in the old way.”

First major reform more stick than carrot

Yet when it came to making concrete changes, there was a lack of imagination. To put it bluntly, Gorbachev had no plan and little idea of what to do. So when concrete structural changes began being implemented in 1987, they mostly were on the backs of working people. Eventually, the early enthusiasm for a new course gave way to anger and disillusionment. The first major reform, the Law on State Enterprises, approved in June 1987 by the party Central Committee, was more stick than carrot. The basic concept of the enterprise law was to liberate enterprises from some of the more rigid controls of the ministries, put them on profit-and-loss accounting, reduce the amount of product required to be produced for the state plan, reduce subsidies in order to make enterprises more efficient, and to bring a measure of democracy into the workplace with the creation of “labor-collective councils” and workforce elections of enterprise directors. 

State planning remained in force, but would become less of a hard numerical total and more of a guide, although the requirement of fulfilling the (reduced) plan requirements would continue. Production sold to the state under the plan would still constitute most sales and would continue to be paid at rates specified by the state, but production beyond plan fulfillment could be sold at any price, subject to volume limitations to prevent unnecessary production beyond any reasonable social need. 

In conjunction with these reforms, measures were implemented aimed at putting pressure on wages. Basic wage rates were increased, but individual output quotas (or “norms”) were also raised, to make it much more difficult to earn bonuses. Bonuses would no longer be essentially automatic; they could only be earned through more effort — and the new wage levels made up only part of the differences between the new basic wage and the old basic wage plus bonus. Put plainly, workers would have to work harder to earn the same amount of money. The basic idea behind these sets of reforms was to introduce a mechanism that would provide a better understanding of demand while retaining central planning. In turn, more efficiency would be wrung out of the system through the use of shop-floor and enterprise-wide incentives and the introduction of some workplace democracy, thereby alleviating both some of the alienation on the part of the workforce and the incentive of management to avoid introducing technological or other improvements. 

The de facto wage cuts, and accompanying ability of factory managers to force workers into lower skill grades (thereby forcing reductions in wages), was implemented immediately, but the rest was to be phased in. “Labor-collective councils” were supposed to be formed to give workers a say in managing their workplace since they were asked to shoulder some of the profit-and-loss responsibility. These were stillborn. In most factories, either there was no council, it did nothing or the enterprise director headed it, neutralizing its potential. The trade unions, as before, did nothing to intervene, remaining silent or backing management.

The enterprise law text was ambiguous — it made references to “one-man management,” the foundation of the existing top-down command structure; did not specify the powers of labor-collective councils and the workforce; and stated that, although directors are elected, those elections must be confirmed by a ministry, a veto power supposedly needed to avoid cases of unspecified excesses. Not only did managements remain unanswerable to workforces, government ministries refused to relinquish their grips. Government bureaucrats owed their privileges and power to the ability to command, and naturally most of them did not relish losing such positions. Ministry officials continued to issue detailed orders to enterprise managements that left no room for enterprises to make their own decisions and continued to require enterprises to buy from a specific supplier, acting as a crucial brake on democratization; they also continued to impose management personnel. The traditional top-down economic structure remained largely untouched. 

Workers announce their response by striking

During these years, serious reforms to the structure of the Communist Party were made, with Gorbachev maintaining his hold on power and steadily placing his followers into high-level positions. There may have been a quickening pace of events in the political sphere during 1988 and 1989, but everyday matters such as the economy and living standards stagnated. Failing to see sufficient improvement from the promises of perestroika, working people began to take a more direct approach — by striking. 

The first mass strike was conducted by the country’s miners in 1989. More than 400,000 miners ultimately walked out across the country. The fastest advancing strikers were in Ukraine’s Donetsk province. Strikers there occupied the square in front of the regional party headquarters, and all 21 area mines sent representatives to occupation meetings. Abandoned by their union and all other institutions, the miners set up their own strike committee, and began making contact with the striking miners in other regions, who then also set up committees. The strike committees became the effective local governments, setting up patrols, acting as arbitrators for problems citizens brought to them and closing all sources of alcohol. Strikers this time refused to negotiate with the coal industry minister, and would only end the strike when Prime Minister Nikolai Ryzhkov signed a detailed agreement and Gorbachev announced his personal approval.

Further strikes in other industries broke out. These were often strictly local affairs, however, and there was little attempt at national coordination, rendering them politically ineffective. Nor was there coordination with the miners. The Soviet trade union central umbrella was widely seen as irrelevant, but new unions that began to form by 1990 were very small and unorganized, and even the very few unions that did work well had no links with other unions. A lack of a coherent plan and a lack of grassroots pressure meant that perestroika, as the restructuring was called in Russian, was failing.

A Russian coal mine (credit: Institute of Economics and Management in Industry)

All social groups seemed to lose faith in perestroika. By 1990, polling found that 85 percent believed that economic reform had achieved nothing or made the situation worse. As the miners’ strike, the failure of the labor-collective councils and mounting disillusionment demonstrated, efforts by the reformers to gain the support of working people had failed. Two important reasons for this failure were the ongoing shortages of consumer goods, which, if anything, were becoming worse, and the realization that the economic reforms were, in large part, going to come on their backs. The timid effort at workplace democratization through the labor-collective councils was intended to compensate people on the shop floors for the harsher work conditions and lower basic pay, and when the councils proved a farce the reformers were empty-handed.

The 1987 enterprise law, in addition to the profit-and-loss accounting and its other reforms, also legalized “cooperative” retail and service enterprises. These cooperatives, although not altogether new, helped exacerbate shortages and trigger inflation. Farmers’ markets, which sold produce at higher prices than charged in state markets while offering greater variety, were long a part of Soviet retail, as was street trading and peddling. But the new cooperatives quickly took advantage of the differential between what the new market would bear and the level of prices set in state shops. For example, when a shipment of meat would arrive at a state store, where it was intended to be sold at the low, state-controlled price, more than half of the shipment would be illicitly resold to a cooperative, which would then sell it at a far higher price, and leaving a shortage in the state store. 

Another report found that, although the Soviet Union enjoyed an excellent harvest in 1990, only 58 percent of produce that was supposed to be delivered to state stores actually made it; the remainder was siphoned off by black marketeers or rotted due to a distribution system that was breaking down. Consumers feared future shortages, which became self-fulfilling prophecies when wide-spread hoarding helped empty store shelves.

Why manage factories when you can own?

By now, black marketeering and corruption, which blossomed during the Brezhnev “era of stagnation,” were worse than ever. Now adding to the picture was that the government and industrial bureaucracy (known as the “nomenklatura”) had begun thinking bigger. Their privileges were based on their management of the Soviet Union’s industry and commerce, and this control rested completely on the state ownership of that property because they did not own the means of production themselves.

Some among the nomenklatura began to dream of capitalism — then they would be able to dramatically upgrade their lifestyle. Economic malaise was becoming more pervasive as the dense web of threads that held the Soviet system together were starting to be snipped through corruption, local protectionism and supply disruptions, the last of which was exacerbated because many component parts were produced in only one factory. The move to profit-and-loss accounting helped to bring about an “all against all” mentality: Instead of simply continuing to manage state property, why not grab it for yourself?

It was against these backdrops that in 1990 Gorbachev began to abandon his efforts to renew the system he inherited. On the political level, the general secretary began eliminating the party’s monopoly on power and, through creating a new freely elected legislature, built himself a power base outside the party. His power was soon used to begin to introduce elements of capitalism. To bring about these “market reforms,” the limited ability of working people to defend themselves had to be eliminated. A series of laws designed to do this began with a new enterprise law stealthily passed by the Supreme Soviet in June 1990. Gorbachev continued to insist that market reforms were to remain within the boundaries of a socialist system (and there was a widespread belief in the country that the conditions for an outright restoration of capitalism didn’t exist), but in reality from this time the debate within Gorbachev’s government and among his closest advisers was about how far and how fast the transition to a capitalist-type system should go. 

Red Square, Moscow

The new law eliminated what little opportunity workers had to influence their management in addition to legalizing private ownership of enterprises. More would quickly come in the following months. Subsequent laws completely freed wages of any central control, reducing wage labor to a commodity as it is in capitalist countries; granted guarantees to investors, including compensation in the event that future legislation affects an investment; created unemployment insurance but failed to authorize any money to pay for it, in expectation of mass unemployment; and legalized the privatization of state enterprises.

Simultaneous with the passages of the above legislation, two competing economic plans were floated. One called for a phase-in of some market mechanisms over five years while retaining state control over pricing, the other called for a sweeping transition to a capitalist economy in 500 days with no working plan on how to accomplish that. Gorbachev, increasingly unable to make a decision, asked the backers of the competing plans to reach a compromise between them. But Boris Yeltsin, having maneuvered himself into the newly created presidency of the Russian Republic, undercut Gorbachev by unilaterally declaring the 500-day plan adopted.

The Russian Republic constituted about 80 percent of the area of the Soviet Union and was by far the dominant republic among the Soviet Union’s 15 republics. The other, much smaller 14 republics had their own party apparatus, albeit completely subordinate to Moscow, and a Russian republic party would have been almost redundant. But as nationalism rapidly gripped peoples across the country, a Russian party body was created. Yeltsin gained control of it, using it to accelerate and deepen a path toward capitalism, undermine Gorbachev, dismantle the Soviet Union and ultimately impose brutal shock therapy on Russians after the Soviet Union’s dissolution.

In essence, Yeltsin set up a dual government in competition with the Soviet government headed by Gorbachev. But unlike 1917, when a brief period of dual government would end with the taking of power by the Bolsheviks, this time the capitalist restorationists led by Yeltsin would win.

The period of a dual government must always be brief

As 1990 drew to a close, many reformers became convinced that Gorbachev had gotten cold feet, and would call a halt to reform or even turn back. His appointment of hard-liners as prime minister (Valentin Pavlov), interior minister (Boris Pugo) and vice president (Gennadii Yanayev) fueled this fear; enough so that Gorbachev’s long-time ally and foreign minister, Eduard Shevardnadze, resigned in December with a warning that “dictatorship is coming.” Ironically, hard-liners — those who had been opposed to any reforms and wanted a return to the Brezhnev era — were needed so that capitalism could be imposed on a country that didn’t want it.

Gorbachev, until the end, maintained that he was committed to a long-term strengthening of socialism through the introduction of market mechanisms, although the concrete results of the decisions that he and the Supreme Soviet took from June 1990 formed a reality of a phased transition to capitalism. Yeltsin, in contrast to his populist image and public proclamations in favor of democracy, stood firmly for a much more rapid transition to capitalism — when the time came, the change would be so sudden and so cruel it would become known as “shock therapy.” Yeltsin was already assembling a team of young technocrats itching to upend the entire economy, and there would be absolutely no popular consultation nor any consideration of the social cost. Yeltsin was also a skilled political tactician; he turned back an attempt by the Russian parliament to remove him as parliament chair by calling for demonstrations in his support and gathering enough support so that a referendum to create a new post of Russian president be put to voters. Voters approved, and in June 1991 Yeltsin was elected president of the Russian republic. The dual government was more firmly in place. 

The military attack on the Russian parliament in 1993, which killed 500, was praised as “democracy” by the U.S. government and World Bank officials.

Separate from all the political maneuvering, no true popular mass movement developed. If the creation of a better society, with popular control over all aspects of life, including the workplace, was in a position to happen, it was now, before widespread privatization. The workers of Czechoslovakia, during the Prague Spring, had begun working out a national system of workers’ control and self-management; they could attempt to create an economic democracy because the economy was in the hands of the state, and therefore could be placed in collective hands under popular control. But once the means of production become private property, the task of wresting control becomes vastly more difficult. The owners of that privatized production dominate a capitalist economy, enabling the accumulation of wealth and wielding that wealth to decisively influence government policy; the state becomes an agent of the dominant bourgeois class and the force available to the state is used to reinforce that dominance.

Although it probably is impossible to overstate the exhaustion of Soviet society as a factor in the failure to develop national grassroots organizations, perhaps the people of the Soviet Union didn’t believe that they had nothing left to lose as their ancestors had in 1917. Back then, Russians lived in miserable material conditions and under the constant threat of government violence. By no means were material conditions satisfactory during perestroika, but they were not comparable to the wretchedness endured under tsarist absolutism nor did the urgency of having to remove a violent dictatorship exist. A social safety net, tattered and weakened, still existed, and most Russians believed that, despite whatever dramatic economic and political changes still lay ahead, they would be able to retain the social safety net they were used to under Communist Party rule. 

Pushing back against economic and political changes, hard-liners thought they would be able to turn the clock back and reinstitute some variation of the orthodox Soviet system. They, too, did not understand the social forces that were gathering. The Soviet Union could not stand still — if it could not find a path forward to a pluralistic, democratic socialist society that would be defended from across the country, then capitalism was poised to burst in as if a dam holding back a sea burst. 

The Soviet Union could not find such a path — working people were unable to create a society-wide movement, perestroika was unable to solve the massive economic problems that had only become worse, and introducing capitalistic reforms had severed the supply and distribution links among enterprises without putting anything in their place. The Soviet command system did not function well and had been long overdue for radical changes to convert it into a more modern system — but it did function. What had begun to replace it, elements of capitalism, disorganized the country’s economy into disaster.

Yeltsin grabs power and imposes shock therapy

The August 1991 putsch brought an end to communist rule. Although the coup was badly executed and failed within three days, with Gorbachev reinstalled as Soviet president, the failure of the party to condemn the coup and Yeltsin’s opportunistic speeches loudly condemning the coup, despite his antipathy toward Gorbachev, meant that Yeltsin emerged as the winner. The party was swiftly banned, its publications suspended, and the brief period of the dual government effectively ended. Yeltsin quickly assembled a team of young technocrats itching to dismantle all institutions of planning and began doing so despite having no legal authority to alter Soviet agencies. That no longer mattered; Gorbachev was now irrelevant. He resigned at the end of the year, having no country to lead.

The three leaders of the Slavic republics — Yeltsin, Leonid Kravchuk of Ukraine and Stanislav Shushkevich of Belarus  — met in a forest to sign an accord declaring that the Soviet Union had ceased to exist. One week after Mikhail Gorbachev’s resignation, the shock therapy would begin on January 2, 1992, with complete liberation of prices (except for energy), the concomitant ending of all subsidies of consumer products and for industry, and allowing the ruble to float against international currencies instead of having a fixed exchange rate. The strategy was to radically reduce demand, a devastating hardship considering that most products were in short supply already. The freeing of prices meant that the cost of consumer items, including food, would skyrocket, and the ruble’s value would collapse because the fixed value given it by the Soviet government was judged as artificially high by international currency traders. This combination would mean instant hyper-inflation.

Belavezhskaya forest, Belarus (photo by Szeder László)

Yeltsin was already ruling by decree at the end of 1991, and his team of reformers used the president’s authority to force through their plans. Inflation for 1992 was 2,600 percent and for 1993 was nearly 1,000 percent — that alone wiped out all savings held in banks. The excess cash that had accumulated in banks, instead of being put back into circulation by stimulating demand or used toward productive investment, was simply made worthless. A large surplus of personal savings parked in banks had built up during the previous three years because there had not been enough production for consumers to buy. Yeltsin’s economic aide, Yegor Gaidar, considered liquidation of the money in savings accounts part of the effort to reduce Russia’s “monetary hangover.” In other words, Russians possessed too much money — another “technical” issue because too large a supply of money causes inflation, Chicago School economists believe, a problem cured here through hyper-inflation.

In the first days of January, what little food was available in state stores completely disappeared, as state-store managers diverted their supplies to private operators for a cut of their profits. State enterprises were also crippled by new high taxes levied only against them. Reduced to penury, Russians took to the streets to begin peddling their personal possessions to survive. At the same time, a handful of speculators, mostly arising out of black-market networks, made fortunes through smuggling consumer items and exporting oil, the latter particularly lucrative because the oil was bought at extremely low subsidized Soviet prices and sold abroad at international market prices. Organized crime networks blossomed, demanding “protection” money from all merchants and street peddlers.

Yeltsin would, in 1993, maintain power by launching a military assault on parliament that killed about 500 people and wounded another 1,000. Yeltsin ordered the parliament disbanded and, for good measure, also disbanded the Moscow city council. He was loudly applauded by the U.S. government and financial institutions for preserving democracy for that. Yeltsin would go on to give away Russia’s natural resources to oligarchs who had him re-elected in 1996 despite an approval rating of 3 percent.

Further economic disasters would come. By the end of 1998, on the heels of another crash that again wiped out savings, Russia’s economy had contracted 45 percent from 1990, when capitalism began to be introduced. Investment in industry declined by almost 80 percent in the same period and the murder rate skyrocketed to become one of the world’s highest. Two million children were orphaned with more than half of them homeless. The World Bank estimated that 74 million Russians lived in poverty; two million had been in poverty in 1989. In the Ural Mountains, competing organized-crime groups fought armed battles for control of factory complexes, backed by different police forces, with the winners then proceeding to strip the assets.

The stagnation of Gorbachev gave way to collapse under Yeltsin. Capitalism de-developed Russia. The weakness of Russian institutions, both cause and effect of the oligarchs, had the perverse effect of enabling a vigorous proponent of nationalism, Vladimir Putin, to arise. How much of Russian history can we assign to Mikhail Gorbachev? A lot. But not all. History is always far more complicated than the career of one human being. What if the Soviet peoples had rallied to their cause and built a system of economic democracy? History would be far different. Gorbachev must be assigned much responsibility for the inability of Soviet peoples to organize, but the long history of Soviet-style communism that atomized and alienated people while shutting them out of political participation can’t be overlooked, nor can the Soviet bureaucracy’s willingness to adopt capitalism for personal enrichment be over-estimated.

There was a poverty of imagination: In a mirror of the West, Soviet officials could not see beyond an impoverished and unimaginative choice of either Soviet-style centralism or Chicago School runaway capitalism. No one leader could, or can, be responsible for all that. 

We have no cheering interests when two oligarchic right-wing governments fight

It is bewildering to see the Russia/Ukraine war be reduced to a cheering contest, as if a football game were being watched. For those along much of the political spectrum, this cheering for “our side” is not a surprise given the well-oiled propaganda apparatus that constitutes most of the corporate media. But many on the Left have substituted cheerleading for analysis, on both sides.

On one side, we have a capitalist country run on behalf of selected oligarchs in which a reactionary church aligns itself with a powerful authoritarian ruler who oversees an intensely patriarchal social policy featuring deep sexism and violent homophobia (Russia). On the other side, we have a capitalist country controlled by shifting alignments of oligarchs in which a virulent nationalism long intertwined with fascist ideologies are backed by far right militias given free rein (Ukraine).

Why should we be rooting for either of these? To say this is not to deny the brutality of Vladimir Putin’s invasion of Ukraine or to condone it, nor to deny the reality of U.S. imperialism and the aggressive, destabilizing NATO expansion that contributed to the tensions that detonated into war. But it is ordinary Ukrainian people who are paying the biggest price of this war — if we are anti-war, then perhaps our efforts might be directed toward bringing the war to a negotiated end. Both sides still believe they can win militarily, but as the war increasingly develops stagnant front lines, it seems that negotiation may be the only way to bring the fighting to an end. From a humanitarian standpoint, ending hostilities not only will save Ukrainian and Russian lives, it will also save lives elsewhere, given the blockades on Ukraine’s Black Sea ports that have prevented the export of grain.

Dawn in the Prypiat-Stohid landscape park, Northwestern Ukraine. (photo by EnergyButterfly)

The July 22 agreement among Russia, Ukraine, Turkey and the United Nations to allow grain shipments to resume was a hopeful sign, although the bombing of Odessa’s port a day later demonstrates there are many difficulties to come and that humanitarian concerns are not at the forefront of military minds.

A serious look at the two combatant countries might provide us ample reason to not engage in cheerleading. Is Russia really classifiable as a progressive bulwark because of its opposition to U.S. domination of the world as some would have us believe? Is Ukraine really a democratic beacon in which fascist groups are so minuscule as to be completely irrelevant as some others would have us believe? Let’s take a look.

Putin represents a continuation of Yeltsin

To understand President Putin’s rise and continuing grip on power, it is necessary to summarize Russia’s post-communist history. Boris Yeltsin was able to out-maneuver Mikhail Gorbachev in the last years of the Soviet Union, and upon the breakup, Yeltsin was already Russia’s leader. Yeltsin immediately imposed a program of “shock therapy” — the sudden simultaneous lifting of all price and currency controls and withdrawal of state subsidies in conjunction with rapid mass privatization of public assets and properties. The immediate purpose of such a program is to place everything into private hands so that as much profit as possible can be extracted, in conjunction with the concomitant broader goals of blocking the creation of more socially harmonious economic models. This would be a very specific ideological experiment — a “pure” capitalism. “Pure” because this would be capitalism without constraints.

There was nothing democratic about this. The plans for shock therapy were not placed before the public nor the Russian parliament; they were presented only to the International Monetary Fund. A large majority of Russians opposed full privatization, instead backing the transformations of enterprises into cooperatives and state guarantees of full employment. The shock therapy program of complete liberation of prices (except for energy), the concomitant ending of all subsidies of consumer products and for industry, and allowing the ruble to float against international currencies instead of having a fixed exchange rate was a disaster. The freeing of prices meant that the cost of consumer items, including food, would skyrocket, and the ruble’s value would collapse because the fixed value given it by the Soviet government was judged as artificially high by international currency traders. This combination would mean instant hyper-inflation. At the same time, oligarchs quickly arose, mostly from the black-market networks that flourished during the corruption of the Brezhnev era, taking control of Russia’s productive enterprises. Western governments, while doing everything they could to have shock therapy imposed, slated Russia to be reduced to a natural resources exporter as Russian industrial output drastically decreased.

The Russian economy collapsed so steeply that Yeltsin could only “win” re-election in 1996 through massive cheating, and handing the biggest prizes, giant natural resources enterprises that had not yet been privatized, to the seven biggest oligarchs for almost nothing in exchange for their financial and media support. The result of the first years of capitalism was that the Russian economy contracted by an astonishing 45 percent by 1998 as poverty and crime rates skyrocketed. Yeltsin appointed Vladimir Putin as his last prime minister, then appointed him his successor as president in exchange for a blanket pardon for him and his family. Rising prices of oil and gas helped the Russian economy strengthen during Putin’s first set of terms as president. Nonetheless, he cut taxes for the rich while reducing benefits for pensioners. Corruption became so rampant that, in Putin’s first years as president, the amount of money spent on bribes exceeded the amount of revenue paid to the Russian government.

Red Square, Moscow

It is a commonplace cliché to say that he is a product of the KGB who oversees a personal dictatorship that represents a sharp break from Yeltsin’s reign. That is not so. An excellent analysis of the Putin régime is found in Tony Wood’s book Russia Without Putin. The author demonstrates well that the Putin era is in large part a continuation of the Yeltsin era, that corruption is endemic among Russian elites and that Putin is at the apex of a system that predates him. The kleptocratic, autocratic variety of Russian capitalism was well established before Putin’s ascent to power. Putin was shaped in the massive corruption of the post-communist 1990s and the Yeltsin régime. He was brought into the St. Petersburg city government in 1990 and became a functionary in the Yeltsin national government in the mid-1990s. Loyalty to superiors and to Yeltsin enabled his swift rise. There was a gradual drift of Putin’s government from seeking cooperation with the West to dogged opposition, a change cemented by the 2014 overthrow of the Ukrainian government and the U.S. hand-picking the new prime minister for Kyiv. Unrelenting hostility from the U.S. despite Russian overtures, and NATO expansion as the U.S. pressed its strength over Russian weaknesses, played a significant role in this evolution.

Mr. Wood offers this summation of Putin’s rule:

“Putin’s first administration, from 2000 to 2004, was perhaps the most energetically neoliberal, introducing a series of measures designed to extend the reach of private capital: in 2001, a flat income tax set at 13 per cent; in 2002, a labour code scaling back workers’ rights; tax cuts for businesses in 2002 and 2003. These moves were widely applauded in the West at the time: the right-wing Heritage Foundation praised ‘Russia’s flat tax miracle’, while Thomas Friedman gushed about Russia’s embrace of ‘this capitalist thing’, urging readers of the New York Times to ‘keep rootin’ for Putin’. His second presidency, too, was marked by moves to increase the private sector’s role in education, health and housing, and by the conversion of several in-kind social benefits to cash payments — a ‘monetization’ that prompted popular protests in the winter of 2004-05, but which was carried through in modified form all the same.”

Reactionary social policies grounded in misogyny and homophobia

Not very progressive, is it? Nor is the Putin régime in social matters. Here’s an excerpt from a Human Rights Campaign press release issued after an anti-LGBT law was passed:

“Last year, the law banning ‘propaganda of nontraditional sexual relations’ was passed by Russia’s Federal Assembly and signed into law by President Vladimir Putin. Under the guise of protecting children from ‘homosexual propaganda,’ the law imposes fines or jail time on citizens who disseminate information that may cause a ‘distorted understanding’ that LGBT and heterosexual relationships are ‘socially equivalent.’ The fines are significantly higher if such information is distributed through the media or Internet.

An article in the peer-reviewed academic journal Slavic Review, authored by sociologist Richard C. M. Mole, provides further information on Putin’s anti-LGBT law:

“The politicization of homophobia in post-Soviet Russia came to a head in the 2013 ‘gay propaganda law,’ under the terms of which individuals and organizations can be fined for disseminating information about ‘non-traditional sexual orientations’ among minors, promoting the ‘social equivalence of traditional and non-traditional relationships’ or ‘the depiction of homosexual people as role models, including mention of any famous homosexuals.’

Sounds just like what right-wing Christian fundamentalists promote in the United States, doesn’t it? If we, correctly, energetically oppose such hate in the West, shouldn’t we also energetically oppose it elsewhere? Directly related to these developments, Russian Orthodox is again the official state religion — in an echo of tsarist rule, the ruler and the church are reinforcing one another. The Russian Orthodox Church is so extreme in its hatred that its top-ranking official equated same-sex marriage to “Nazism” and also “a form of ‘Soviet totalitarianism’ that threaten[s] humanity.” He has called Vladimir Putin’s rule “a miracle” while Putin grants the church “generous economic support from state-allied energy giants.” The church is deeply misogynistic, with the church opposing laws against domestic violence because such concepts are “Western imports” and church officials claiming women are less intelligent than men.

Putin is also in lockstep with the church when it comes to women. He signed into law a measure that decriminalizes domestic violence — in a country in which an estimated 14,000 women per year die from injuries inflicted by husbands or partners. Russia also has one of the world’s widest pay gaps between men and women, and numerous jobs are closed to women.

The far right ideologist who gives Putin his worldview

Although Russia is increasingly aligning with China, that alliance is perhaps more grounded in pragmatism than in any shared economy-building project. China has given rhetorical support of Russia’s invasion of Ukraine, but appears to have given no material aid. In any event, Moscow will be the junior partner in any formal alignment with Beijing. Who are Putin’s ideological allies around the world? Donald Trump, Brazil’s Jair Bolsonaro, France’s Marine Le Pen and her National Rally, Italy’s Matteo Salvini and his far right League, Hungary’s Viktor Orbán and his reactionary Fidesz party, and Nigel Farage, former leader of Britain’s absurdly named United Kingdom Independence Party. Might there be a pattern here?

Taking all this into account, plus Putin’s wildly inaccurate claims that Ukraine is an artificial construct, might leave a reasonable observer in less than shock that the person believed to be Putin’s biggest ideological influence is Aleksandr Dugin. Who is this person who is frequently described as “Putin’s brain”? “Alexander Dugin is quite possibly, after Steve Bannon, the most influential fascist in the world today,” writes Dan Glazebrook, a journalist and activist who writes frequently on fascism. “His TV station reaches over 20 million people, and the dozens of think tanks, journals and websites run by him and his employees ultimately have an even further reach.”

A pro-Russian demonstration, May 9, 2022, in Vienna. (photo by Robot8A)

Mr. Glazebrook wrote a most interesting article on Dugin in the now lamentably discontinued CounterPunch print magazine (Volume 25, No. 6). Dugin’s strategy is using Left-sounding phrases as a way of coopting the Left, a classic strategy of the far right. (This has echoes of so-called “9/11 truthers” on the far right who are trying to use the issue as a way of worming their way into the Left; a strategy that, sadly, all too many fail to observe.) It is worthwhile to quote extensively from Mr. Glazebrook’s article so we get a full sense of the Dugin strategy. He writes of Dugin:

“His strategy is that of the ‘red-brown alliance’ — an attempt to unite the far left and far-right under the hegemonic leadership of the latter. On the face of it, much of his programme can at first appear superficially attractive to leftists — opposition to US supremacy; support for a ‘multipolar’ world; and even an apparent respect for non-western and pre-colonial societies and traditions. In fact, such positions — necessary as they may be for a genuine leftist programme — are neither bad nor good in and of themselves; rather, they are means, tools for the creation of a new world. And the world Dugin wishes to create is one of the racially-purified ethno-states, dominated by a Euro-Russian white power aristocracy (the ‘Moscow-Berlin axis’) in which Asia is subordinated to Russia by means of a dismembered China. This is not an anti-imperialist programme. It is a programme for an inter-imperialist challenge for the control of Europe and Asia: for a reconstituted Third Reich.

And what does Dugin propagate? “His first journal, Elementy, founded in 1993, praised the Nazis and the Conservative Revolutionaries which preceded them, and published the first Russian translations of esoteric interwar fascist Julius Evola.” Dugin’s work, Mr. Glazebrook writes, is frequently re-published on a U.S. white supremacist website. That is no aberration, as Dugin “has close links to the American far right — he has links to former KKK leader David Duke; one of his disciples, Nina Kouprianova, is married to leading US fascist Richard Spencer; whilst him and Alex Jones feature on each other’s TV shows.” But, sadly, Dugin was once invited by a Syriza government minister in Greece to give a lecture.

“Dugin’s outlook essentially boils down to a combination of “ethnopluralism” and what he disingenuously terms Neo-Eurasianism,” Mr. Glazebrook writes. “Both ideas lend themselves well to the building of a ‘red-brown’ fascist-led alliance, as both have elements which are superficially appealing to the left whilst in fact providing theoretical cover for genocide and imperial war.” While superficially saying that different land masses belong to the people who originate there, the corollary is that non-Europeans should be removed from Europe. This is white supremacist and anti-Semitic, demonstrated when Dugin condemns what he calls “subversive, destructive Jews without a nationality.” The Dugin project “is essentially the reconstitution of the territories of the Third Reich (including the parts of Russia it never conquered) under joint German-Russian tutelage. … The real inspiration Dugin appears to have gained from classic Eurasianism was its strategy of the infiltration and colonization of the left rather than direct confirmation with it.”

Mr. Glazebrook’s article concludes that “Duginism is a classic fascist blend of ‘anti-elite’ rhetoric, demands for ethnic purification, and an imperial foreign policy agenda, all dressed up in politically-correct appeals to cultural distinctiveness and anti-western tubthumping. Its particular danger comes from the deep inroads it has made into anti-imperialist and leftist circles.”

The reactionary source for claiming Ukraine doesn’t exist

The article just summarized does not mention Putin. But plenty of writers have made the connection between the Russian leader and Dugin. Writing in the March/April 2015 issue of World Affairs, Andrey Tolstoy and Edmund McCaffray write, “Dugin is the intellectual who has Vladimir Putin’s back in the emerging ideological conflict between Russia and the West. At home, Putin uses him to create a nationalist, anti-liberal voting bloc.” And not only the Russian leader: “Dugin has also been actively involved in the politics of Russia’s elite, serving as an adviser to State Duma chairman and key Putin ally Sergei Naryshkin. His disciple Ivan Demidove serves on the Ideology Directorate of Putin’s United Russia party, while Mikhail Leontiev, allegedly Putin’s favorite journalist, is a founding member of Dugin’s own Eurasia Party.” Dugin is a former sociology professor at Moscow State University, founded the Center for Conservative Studies and lectures at police academies, military schools and other law enforcement institutions.

Dugin, in 2016, praised the election of Trump as U.S. president. Olivia Goldhill, writing in Quartz, said “Dugin’s ideas are reminiscent of the alt-right movement in the US, and indeed there are ties between the two. … The Russian philosopher has published articles on Spencer’s website, Alternative Right, reports Business Insider, and recorded a speech titled ‘To my American Friend in Our Common Struggle,’ for a nationalist conference in 2015. … Dugin has also identified an ally in Donald Trump, viewing him as a triumphant opponent to the liberal global elite. After Trump was elected, Dugin told the Wall Street Journal he was elated at the result. ‘For us it is joy, it is happiness,’ he said. ‘You must understand that we consider Trump the American Putin.’ ”

Other friends of Dugin’s include the Greek fascist party Golden Dawn. The party has a picture of Dugin standing with a Golden Dawn member who was also a member of an anti-Semitic group that “praised the gas chambers of Auschwitz.”

Percentage of population that identified Ukrainian as their native language in the 2001 census. (Author: Alex Tora)

Dugin’s ideology is also sometimes characterized as “Traditionalist.” But regardless of what term might be used for his far right ideology, there seems little doubt that he is a strong influence on Putin. Interviewed in Jacobin, Benjamin Teitelbaum, an International Affairs professor who has written works on the far right, said:

“[I]t seemed quite obvious that Putin was listening to Dugin speak, because when Putin went out afterward he was recycling and learning from Dugin, almost letting him teach him how to characterize the war and Russia’s role in the world. But throughout all of this, he has basically had no significant official role in the Russian government. That’s what makes him so hard to characterize. … If Russia is being characterized or ever characterized itself as a beacon of the immaterial and the spiritual in the world (which you do hear from Putin occasionally — we heard a version of it at the beginning of his speech on Ukraine right before the invasion — that’s Dugin territory. It’s in the most deeply messianic and eschatological framings of this war that you can see Dugin’s influence.”

Dugin’s use of the term “Novorossiya” (New Russia) for territories of Eastern Ukraine, has been taken up by Putin. Three days before the invasion of Ukraine, Putin asserted that Ukraine is a fiction. He said, “Modern Ukraine was entirely created by Russia, more precisely, Bolshevik, communist Russia. This process began immediately after the revolution of 1917. … As a result of Bolshevik policy, Soviet Ukraine arose, which even today can with good reason be called ‘Vladimir Ilyich Lenin’s Ukraine.’ He is its author and architect.” Earlier, in December 2019, Putin said, “When the Soviet Union was created, primordially Russian territories that never had anything to do with Ukraine were turned over to Ukraine,” referencing Ukraine’s southeast, including the entire Black Sea region. But, according to a London School of Economics blog post linking to the 1926 Soviet census, ethnic Ukrainians “far outnumbered ethnic Russians” in eastern Ukraine, including today’s contested areas, at that time. Internal Soviet republic borders tended to be drawn very carefully as to the local populations; the highly complicated borders of the former Soviet Central Asian republics remain a good demonstration.

Putin’s assertions, resting on anti-communism no less, have no basis in reality. Present-day Ukraine is where Slavic peoples settled in the fifth century CE; from there Slavic tribes expanded their territories, including tribes that would eventually become the Russian nationality. A state centered on Kyiv was founded in the late ninth century, and the name “Ukraine” has been used for centuries. It is true that for six centuries there was no independent Ukraine — it was overrun by several empires and often divided — but Poland was similarly wiped from the map for more than two centuries and Slovakia spent a thousand years under the Hungarian yoke. Does anybody deny the existence of the Polish and Slovak peoples? Putin’s statement is ahistorical nonsense.

Ukrainian attacks on its Russian minority

Now let us turn to Ukraine. The country experienced a collapse and oligarch domination similar to Russia. Ultimately, the Ukrainian economy shrank by about 60 percent in the first five years of independence, and didn’t resume growth until 2000, one of the worst performances of any former Soviet republic under capitalism. As late as 2013, Ukraine’s economy was 20 percent smaller than it was in 1990. In 2014, with the economy still floundering, the International Monetary Fund proposed more shock therapy for Ukraine. The IMF program required Ukraine to impose drastic austerity, in the usual fashion. In accepting the IMF deal, Prime Minister Arseniy Yatsenyuk said the austerity package would result in inflation as high as 14 percent that year and a further economic contraction of 3 percent.

Earlier that year, U.S. diplomat Victoria Nuland imposed Yatsenyuk as prime minister, famously caught on tape saying “Yats is the guy” and offering a vulgar dismissal of any potential European Union concerns. Yatsenyuk had a reputation as “rabidly anti-Russian,” which surely featured prominently in the U.S. decision. That of course was hardly the only occasion of U.S. interference.

A Ukrainian demonstration in Kyiv on Oct 6, 2019, under the slogan “No to capitulation.” (photo by ReAl)

Ukraine, despite the previous close relationship between Russians and Ukrainians, became a bitterly divided country in the years after independence. Fighting in the Donbas provinces of Donetsk and Luhansk has gone on since 2014. The Minsk Accords were to have been the solution. Under these accords, the Donbas provinces were to have been given measures of autonomy with full Russian language rights. The Ukrainian government, spurred by nationalist agitation, had put strong prohibitions on the public use of the Russian language, making Ukrainian the only official language. The Minsk Accords would have also kept Ukraine neutral. Given the deep divides of the country, having trading links to both the EU and to Russia, and allowing Russian as an official language given the millions who speak it, would be in the country’s interest.

Unfortunately, nationalists, and in particular the far right, had different ideas. Contrary to those proffering one-sided pro-Ukrainian viewpoints, the far right is a significant factor in Ukrainian politics, regardless of the tiny size of their official parliamentary presence.

The Ukrainian refusal to implement the Minsk Accords

As we did above with Dan Glazebrook’s work, an article on Ukraine, “Towards the Abyss” in the January-April 2022 issue of New Left Review, is worth an extended study. The article is an interview with Volodymyr Ishchenko, a Ukrainian sociologist now based in Berlin. Extreme nationalists and the far right took advantage of the 2014 “Euromaidan” coup that overthrew the administration of Viktor Yanukovych, but not only them. According to Dr. Ishchenko, the 2014 Euromaidan, like previous “color” revolutions in former Soviet republics, were captured by “agents” who participated in the uprising but “were very far from representing” ordinary Ukrainians. The four major agents that grew stronger after the Euromaidan were the oligarchic opposition parties, structured around a “big man” and patron-client relations; NGOs funded by the West; the far right, organizing into militias and espousing extreme nationalism while taking advantage of a weakening state; and “Washington–Brussels.”

“The competing oligarchs exploited nationalism in order to cover the absence of ‘revolutionary’ transformations after the Euromaidan, while those in nationalist-neoliberal civil society were pushing for their unpopular agendas thanks to increased leverage against the weakened state,” Dr. Ishchenko said. Those who gained the upper hand were opposed to the Minsk Accords. “The Minsk agreements specified a ceasefire, Ukrainian recognition of local elections in the separatist-controlled areas, the transfer of control over the border to the Ukrainian government, and a special autonomy status for Donbas within Ukraine, including the possibility of institutionalizing the separatist armed forces. … The general logic of the Minsk Accords demanded recognition of significantly more political diversity in Ukraine, far beyond the bounds of what was acceptable after the Euromaidan.”

Multiple political currents that had been mainstream before Euromaidan became stigmatized as “pro-Russia,” leading to online and physical harassment. Left organizing had to be done clandestinely due to persistent unchecked threats from the far right. Although the far right comprised only a tiny portion of the post-Euromaidan governments, their ultra-nationalist agenda became government policy. Petro Poroshenko, elected after Yanukovych fled Kyiv, became widely unpopular. As a result, Volodymyr Zelensky was elected in a landslide (in part on his promise to implement Minsk), but had no pool of people behind him to fill out his government.

NATO headquarters (photo by Swadim)

Poroshenko began opposing the Minsk Accords despite his campaign promises to implement them. According to Dr. Ishchenko:

“Although in the end it appeared to be Putin who put an end to the Minsk Accords by recognizing the independence of the Donetsk and Luhansk People’s Republics in February 2022, there had been multiple statements from Ukrainian top officials, prominent politicians and those in professional ‘civil society’ saying that implementing Minsk would be a disaster for Ukraine, that Ukrainian society would never accept the ‘capitulation’, it would mean civil war. Another important factor was the far right, which explicitly threatened the government with violence should it try to implement the Accords. In 2015, when parliament voted on the special status for Donetsk and Luhansk, as required by Minsk, a Svoboda Party activist threw a grenade into a police line, killing four officers and injuring, I think, about a hundred. They were showing they were ready to use violence.”

After his election, Zelensky proved to be too weak to control the far right militias, which had continued fighting in the Donbas provinces.

“At the same time, Azov and other far-right groups were disobeying Zelensky’s orders, sabotaging the disengagement of Ukrainian and separatist forces in Donbas. Zelensky had to go to a village in Donbas and parlay with them directly, even though he is the Commander in Chief. The ‘moderate’ anti-capitulation people could use the protests of the hard right to say that implementation of the Minsk Accords would mean a civil war because Ukrainians wouldn’t accept this ‘capitulation’, and so there would be some ‘natural’ violence.

From 2014 until the Russian invasion in February 2022, an estimated 14,000 people were killed in Donbas fighting and dislocations are believed to be numbered in the millions.

The weakness of the Ukrainian state and the strength of fascist fighting groups, doesn’t absolve Russia of responsibility, Dr. Ishchenko concludes:

There has been an “incapacity of the post-Soviet and specifically Russian ruling class to lead, not simply to rule over, subaltern classes and nations. Putin, like other post-Soviet Caesarist leaders, has ruled through a combination of repression, balance and passive consent legitimated by a narrative of restoring stability after the post-Soviet collapse in the 1990s. But he has not offered any attractive developmental project. Russia’s invasion should be analyzed precisely in this context: lacking sufficient soft power of attraction, the Russian ruling clique has ultimately decided to rely on the hard power of violence, starting from coercive diplomacy in the beginning of 2021, then abandoning diplomacy for military coercion in 2022.

The adoption by Ukrainian governments of fascist demands

It would be grossly unfair to characterize Ukraine as a country of fascists. Nonetheless, the extent to which fascists have gained control within the country is likely understated by Dr. Ishchenko despite his well-informed commentary. They are definitely understated by those who blindly defend all things Ukrainian. A February 2019 article in The Nation provides a dire picture of fascists running nearly unchecked. Written by Lev Golinkin, the article, “Neo-Nazis and the Far Right Are On the March in Ukraine,” pulls no punches. Mr. Golinkin, widely published on Russian and Ukrainian topics, flatly states, “There are neo-Nazi pogroms against the Roma, rampant attacks on feminists and LGBT groups, book bans, and state-sponsored glorification of Nazi collaborators.”

The fascist Azov Battalion, which has been folded into the Ukrainian army, is the best known of these formations but is not the only one, Mr. Golinkin wrote.

“The Azov Battalion was initially formed out of the neo-Nazi gang Patriot of Ukraine. Andriy Biletsky, the gang’s leader who became Azov’s commander, once wrote that Ukraine’s mission is to ‘lead the White Races of the world in a final crusade … against the Semite-led Untermenschen.’ Biletsky is now a deputy in Ukraine’s parliament. In the fall of 2014, Azov—which is accused of human-rights abuses, including torture, by Human Rights Watch and the United Nations—was incorporated into Ukraine’s National Guard. … In January 2018, Azov rolled out its National Druzhina street patrol unit whose members swore personal fealty to Biletsky and pledged to ‘restore Ukrainian order’ to the streets. The Druzhina quickly distinguished itself by carrying out pogroms against the Roma and LGBT organizations and storming a municipal council.

Militia leaders have also been given high-ranking positions in the security apparatus. “The deputy minister of the Interior—which controls the National Police—is Vadim Troyan, a veteran of Azov and Patriot of Ukraine,” Mr. Golinkin wrote. Far right influence has extended beyond personnel, and to the rewriting of history. “In 2015, the Ukrainian parliament passed legislation making two WWII paramilitaries—the Organization of Ukrainian Nationalists (OUN) and the Ukrainian Insurgent Army (UPA)—heroes of Ukraine, and made it a criminal offense to deny their heroism. The OUN had collaborated with the Nazis and participated in the Holocaust, while the UPA slaughtered thousands of Jews and 70,000-100,000 Poles on their own volition.”

Cherry blossoms in Washington (photo by Sarah H. from USA)

Is the above report alarmist? Somehow exaggerated? Here are two U.S.-centric sources that also paint a disturbing picture. A group of four human rights organizations — Human Rights Watch, Amnesty International, Front Line Defenders and Freedom House — issued a joint statement, “Ukraine: Investigate, Punish Hate Crimes,” that condemns unchecked hate crimes in Ukraine. The statement says:

“Since the beginning of 2018, members of radical groups such as C14, Right Sector, Traditsii i Poryadok (Traditions and Order), Karpatska Sich and others have carried out at least two dozen violent attacks, threats, or instances of intimidation in Kyiv, Vinnitsa, Uzhgorod, Lviv, Chernivtsi, Ivano-Frankivsk, and other Ukrainian cities. Law enforcement authorities have rarely opened investigations. In the cases in which they did, there is no indication that authorities took effective investigative measures to identify the attackers, even in cases in which the assailants publicly claimed responsibility on social media.”

Among the statement’s organizations, Human Rights Watch is known to tilt its reportage toward U.S. interests, and Freedom House is funded by the U.S. government and is notorious for its conservative biases. Not the sort of groups going out of their way to condemn U.S. allies. Want more? How about a report from Radio Free Europe/Radio Liberty, one of the U.S. government’s leading propaganda arms. A 2019 article by the combined organization reported on the arrest and quick release of far right militants that resulted in several police commanders declaring themselves “Banderites.” That is a reference to Stepan Bandera, a 1940s Ukrainian Nazi collaborator whose Ukrainian Insurgent Army massacred tens of thousands of Jews and Poles, and issued anti-Semitic statements as virulent as those of Hitler.

Radio Free Europe/Radio Liberty reported that after a riot police officer taking part in the arrest of “ultranationalists” called them “Banderites,” Interior Department and police senior officials issued apologies for the use of “Banderite” in a derogatory way, and the arrestees were released. “National Police chief Serhiy Knyazev says he is one. So does Interior Ministry and National Police spokesman Artem Shevchenko. Interior Ministry adviser Zoryan Shkyryak is, too. From the top on down, cops and their bosses are lining up to air their admiration for Stepan Bandera,” Radio Free Europe/Radio Liberty wrote.

Not a government or society free of fascism, is it?

Should we cheer or should we think?

Lurking in the background, there is the specter of NATO expansion. Many advocates for Ukraine (although, here, not from people on the Left) try to claim that the U.S. never promised Russian officials there would be no eastward expansion of the military alliance. Soon after the invasion, a New York Daily News article “assured” its readers that no such promises were ever made, even claiming that Mikhail Gorbachev had “no recollection” of such a promise. Either Mr. Gorbachev has a short memory or, more likely, the Daily News writer made up that claim out of thin air. It was quite well known at the time that assurances were in fact made. For those requiring proof, George Washington University’s National Security Archive has published an extensive collection of documents demonstrating that such assurances were repeatedly made. “Not one inch” was the well-known formulation of James Baker, then the secretary of state for the Bush I administration. Such promises were made in the context of securing Soviet approval of German unification.

Finally, there are U.S. commercial interests involved. The U.S. has long sought to wean Europe off Russian natural gas and instead buy liquified natural gas from U.S. energy companies. Thus an excuse for Europeans to drop Russia as an energy supplier is not unwelcome among U.S. political and corporate leaders. At this time we have no proof, but it is likely that such considerations contributed to U.S. encouragement for Ukraine to refuse the Minsk Accords.

This has been a long discussion of Ukraine and Russia, but unavoidable if we are to seriously grapple with the complex issues of the war and the combatant countries. Who among us really has a rooting interest in this? Or in either of these two dismal régimes? The United States may be willing to fight a proxy war to the last Ukrainian and Russia is conducting its war in a savage, inhumane manner — and Ukraine has the right, as does any country, to defend itself — but this does not require us to act as cheerleaders for either side. Neither side is remotely a beacon of democracy. Russia’s severe crackdown on dissent is heavily reported, since Russia is now the No. 1 enemy of the West, but parallel actions by Ukraine are ignored in the corporate media. Ukraine has outlawed several parties for being on the Left, or simply because they were in opposition to President Zelensky, including parties holding parliamentary seats. Ukraine, as has Russia, shuts down television stations it doesn’t control.

Cheerleading for Russia simply because it opposes U.S. imperialism without regard for the nature of the country’s government represents a lack of thinking; nothing more than a simplistic chasing of anything that appears to contradict corporate media discourse and U.S. foreign policy. Cheerleading for Ukraine represents a similar lack of critical thinking; an unreflective regurgitation of U.S. government and corporate media propaganda. We really can, and should, do much better than either. War is not a football game.

Must collapse be inevitable? Imagining a “half-Earth” sustainable economy

It seems vastly easier to imagine the future as a dystopian nightmare than as a time when today’s problems are mostly behind humanity. For every work of optimism, such as Star Trek, there are dozens of works imagining a nightmare world of deprivation, environmental destruction and severe repression amidst a world of people scrambling to survive anyway they can in a war of all against all.

Even if a cultural byproduct rather than an intentional construction, this depressing ratio of future scenarios is the inevitable result of capitalism. From cradle to grave, we are endlessly bombarded with propaganda incessantly telling us that humans are competitive, not cooperative, and that individualism is the highest expression of “freedom.” Cut-throat competition is the natural way of the world, as natural as the tides of the ocean, and that participation in struggles against other human beings is the only possible method of organization in a world in which countries and nations also compete fiercely because the world must be organized into “winners” and “losers” through competition. Greed is not only good, it is the primary characteristic driving human behavior because markets sort who those “winners” and “losers” are.

All in the above paragraph is nothing more than propaganda in the service of capitalist elites, the “ruling class” of any capitalist country. Markets, in a capitalist economy, are not dispassionate entities sitting loftily in the clouds making judgements. In reality, they are nothing more than expressions of the aggregate interests of the most powerful and largest industrialists and financiers. Who is this individualistic “freedom” for? It is “freedom” for industrialists and financiers to rule over, control and exploit the vast majority of humanity. “Justice” becomes the unfettered ability to enjoy this freedom, a justice reflected in legal structures. Those who have the most — obtained at the expense of those with far less — have no responsibility to the society that enabled them to amass such wealth. Working people are “free” to compete in a race to the bottom set up by capitalists.

It can’t be repeated too often that capitalism is just another system created by human beings, and everything of human creation comes to an end. It is simply one more system of exploitation, one more system to advantage a numerically tiny class at the expense of everybody else. Increasing numbers of people do realize that the days of capitalism are numbered, and with the deprivation that capitalism increasingly imposes on people, and the stunting of human potential that goes with that, it is no surprise that multiple polls have shown young people about equally in favor of capitalism and socialism. That half of respondents are able to overcome the bombardment of capitalist propaganda issued through every imaginable channel is a harbinger that the phrase “a better world is possible” is not pie in the sky.

Imagining a concrete future better world, one based on realistic prognosis using some of the bricks of today to build tomorrow because a tabula rasa is not possible, and realistically meeting human needs in a sustainable economy, is an under-appreciated task. Especially given the endless production of dystopian futures churned out by Hollywood and other corporate cultural producers, it is vital that scenarios of better future worlds be conjured and communicated widely.

That future better world will have to be socialist, in some form. It can’t be capitalist — the system that is driving humanity toward catastrophe and shows no ability to deviate from rushing toward a cliff can’t save itself. There will be new technologies in a future better world, but there won’t be magic techno-fixes. A sustainable world will also be a world in which the peoples of the advanced capitalist countries will have to consume less and more sustainably. But limits won’t be imposed by a government, socialist or otherwise; limits will be imposed by nature and the limits to resources it provides. When fossil fuels dwindle, reduced energy usage will be forced upon us. We can begin to adjust and develop renewable alternatives now on a systemic basis, or have it imposed in a more difficult fashion later.

An extraordinary solution for an extraordinary problem

A worthy addition to the literature of a better world of the future is Half-Earth Socialism: A Plan to Save the Future from Extinction, Climate Change, and Pandemics* by environmental historian Troy Vettese and environmental engineer doctoral student Drew Pendergrass. The two authors have produced a lively, interesting book that sketches out a sustainable world that is socialist. The Half-Earth in its title refers to the thesis that 50 percent of Earth’s land surface needs to be “re-wilded” — allowed to return to forests and grasslands — because that is the only way that the majority of the planet’s species can survive.

At first glance, the concept of “re-wilding” half our planet’s land sounds nearly insane. Under present political conditions, it certainly is impossible and unthinkable. Similar to working people flocking to work in oil and gas production, even tar sands and fracking, despite the environmental damage of such work because capitalist economies offer them no alternatives, who today would have any incentive to leave their homes in the service of returning land to nature? Such a concept could only be possible in a people-centric system that would incentivize people to move and do so over a timescale of decades so that those who wished to stay where they are could do so, free of any pressures, and in a time when environmental needs are at the forefront of popular thinking.

Let us acknowledge that a concept such as re-wilding half of Earth is a proposition that seems fantastic to almost all of us, myself included. An extraordinarily drastic solution, even when acknowledging that humanity faces an extraordinary problem. So let’s take a step back for the moment from this idea, and instead allow the authors to build their case and give us a sense of what such a world might look like.

Housatonic Meadows State Park in Connecticut (photo by Morrowlong)

Half-Earth Socialism opens by sketching out what the world might be like in 2047 if present conditions continue unchecked. This is a future in which geo-engineering is unilaterally undertaken by the U.S. government after a catastrophic hurricane devastates the Northeast U.S., and it goes bad, causing a cascade of problems including atmospheric ozone depletion. There is a temporary planetary cooling because of the aerosols thrown into the atmosphere by the geo-engineering project, but in response fossil fuel usages begins to increase again, more climate disruptions cause more problems, ozone depletion becomes worse, agriculture is disrupted and the threat to the prevailing order by social movements peaks and subsides. Capitalist business as usual prevails.

“The problem was that the greens mistook slowing down the pace of the environmental crisis for victory, rather than merely a defeat postponed,” Dr. Vettese and Mr. Pendergrass write in imaging this business-as-usual scenario of 2047. “Despite briefly tasting power, the environmentalists accomplished little because they never elucidated how the various facets of the environmental crisis — climate change, pandemics, and mass extinctions — were interlinked; nor did they articulate what a post-crisis society might actually look like. The ruling class had long been clever and ruthless, but they were also fortunate to face such hapless opponents.”

Does that judgment seem harsh? It shouldn’t. Mainstream environmental groups, who mostly subscribe to liberal ideas and concepts, today do seek piecemeal solutions to systemic problems, staying within the “acceptable” boundaries of capitalist discourse. This is not to suggest that a typical leader of a national environmental group is insincere, but rather that imaginations are often circumscribed and that leaders often seek “practicality” in the sense of staying within accepted parameters, failing to challenge larger capitalist orthodoxies and being mindful of how far their corporate funders would be willing to go. So although a typical leader of a large environmental group likely believes that they are doing what is possible, they nonetheless often lag well behind their rank-and-file, grassroots members. Can we really expect the totalizing ideology of capitalism not to infiltrate environmental thinking?

Why is the environment outsourced to the market?

The dystopia with which Half-Earth Socialism opens is not inevitable, the authors write, saying that they seek to encourage the environmental movement to take seriously the challenge of creating a better society in a stabilized biosphere. A rapid growth of alternative renewable energy sources is not enough if fossil fuel usage doesn’t decline drastically. The authors ask: Why is the environment outsourced to the market? They then lead the reader through a discussion of neoliberalism, as most of the world calls the present stage of capitalism, tracing its birth to a conference led by Friedrich Hayek in 1947. Hayek believed that markets “communicated information” and that neoliberals are committed to “simple and powerful axioms” that enable them to offer prescriptions and act. Neoliberals can be beaten, the authors write, if socialists and environmentalists create a diverse coalition and learn from one another. In the absence of such a coalition, “racist-libertarians” such as the “alt-right,” Brexiteers and the Alternative for Germany (AfD) will be neoliberalism’s only competition.

A crucial point that Half-Earth Socialism repeatedly makes is that nature is unknowable. “Nature is more unknowable than the market” and deserving of awe as unimaginably complex. This idea is backed up by a discussion of Biosphere 2, the 1990s experiment in which a living, sustainable biosphere was created inside a dome but failed badly, with the human “biospherians” left short of food and oxygen while most life and the coral reefs died. The neoliberal goal of “humanizing” nature — in essence, turning all of nature into exploitable capital — is not realistic. The inventor of “cap and trade” carbon and pollution schemes actually believed that clean air and water were “luxury goods”! Thus “the humanization of nature must proceed in conditions of ignorance,” Dr. Vettese and Mr. Pendergrass write; with a continuation of that process, zoonotic diseases (those jumping from animals to humans) and other dangers will continue unabated.

Caribbean National Rain Forest of El Yunque, Puerto Rico (photo by Alessandro Cai)

Readers are also led through a discussion of why mainstream panaceas proposed by environmentalists are not feasible or realistic. Bioenergy with carbon capture and storage (BECCS), a favorite scheme often promoted as a way of reversing atmospheric carbon dioxide buildup, is a chimera. The technology to remove carbon dioxide and store it underground sufficient to reverse global warming doesn’t exist and can’t be a solution. To do what it is advertised to do, BECCS would require land bigger than India — so much land would have to be cleared that BECCS would become a net producer of greenhouse gases. This sort of concept is an example of mainstream environmentalists seeing a “set of discrete technical problems” to be tackled through piecemeal reform while leaving capitalist foundations untouched. Nuclear energy is also no solution, despite its promotion by some environmentalists, not only because of radiation and radioactive waste, but because nuclear is more carbon-intensive than renewables. (The authors don’t mention the finances of nuclear power, but the entire industry only exists because of massive subsidies; nuclear is completely uneconomical.)

Such proposals have “almost no chance of being implemented” despite concessions that are made by proponents; BECCS, nuclear power and biofuels will fail due to “lack of utopian imagination” and because the environmental crisis can’t be understood outside the structure of the society causing the crisis.

Any half-Earth coalition “must be a broad one,” the authors stress, and suggest that the wide popularity of anti-nuclear movements would provide a firm pillar of any such coalition. Advocates of BECCS and nuclear power are trying to maintain as much of the status quo as possible. Instead, it is better to be realistic about what lies ahead and the trade-offs that must be made. Half-Earth Socialism acknowledges that giving up meat and energy quotas won’t be popular for many people, but are nonetheless better and more viable than mainstream alternatives.

Balancing human needs with planetary boundaries

So what are the specifics of half-Earth socialism? The goals, Dr. Vettese and Mr. Pendergrass write, are to prevent the sixth mass extinction, “natural geo-engineering” to draw down carbon dioxide from the atmosphere and create a fully renewable energy system. Re-wilding means re-forestation, renewed grasslands, restoring wild animals and rebuilding stocks of fish and whales. Likely the only way to accomplish all this and have enough food for 10 billion people would be through “widespread veganism” and energy quotas. A quota of 2,000 watts per person would be a significant reduction for most living in the Global North but a large increase for the Global South. Needless to say, farming would become all organic. Trade-offs are inevitable, and should be addressed honestly rather than “cooking the books” as mainstream environmentalists can do:

“We offer an honest reckoning of Half-Earth socialism because we believe that a feasible utopia is one where its costs are democratically appraised rather than hidden by the pseudorational measure of money.” [page 84]

What is proposed is half-Earth socialism, with heavy stress on socialism. This is to differentiate from reactionary promoters of half-Earth re-wilding that should be rejected. “Half-Earth must be socialist,” Dr. Vettese and Mr. Pendergrass write. That means fully democratic and publicly supported. The proposals of far-thinking economists in the former Soviet Union failed to gain ground due to lack of a democratic movement to support them and the inability of Western climate scientists’ models to be taken with the necessary seriousness follows from the absence of social movements strong enough to put them into practice.

Half-Earth socialism would need to balance human needs with planetary boundaries, working through a myriad of factors. A fully democratically accountable planning organization could offer several scenarios with differing parameters and trade-offs, with decisions made either by elected representatives or a global referendum where everybody is eligible to vote. The authors whimsically call their planning agency “Gosplant,” quickly adding “forgive us” with the introduction. (The name is a play on “Gosplan,” the name of the planning agency in the Soviet Union, but unlike Gosplan, “Gosplant” would be fully democratic and based on public input.)

This wouldn’t be easy at the start, and realistically shouldn’t be expected to be easy. The planning agency would need to determine energy quotas and to balance land use and greenhouse gas emissions. This would be made more challenging by the difficulty of electrifying transport and some industrial processes. Widespread veganism would make this much easier because animal agriculture uses up so much land and is responsible for significant greenhouse gas emissions. Trade-offs would be required in every plan or scenario. There would also be some temporary measures that would be phased out when practical.

“Wide-ranging improvements to industrial processes to reduce pollution, fuel use, and waste are undertaken in just about every industry. Large swathes of manufacturing become rationalized when ‘planned obsolescence’ itself is made obsolete. Resources are directed towards building solar panels, wind turbines, super-efficient insulation, and railways. Immediately after the Half-Earth socialist revolution, much of the world’s pasture is converted into biofuel plantations for the short-term decarbonization of transport and industry, while the remainder is rewilded, which in turn requires an expanded cadre of ecologists and foresters trained in both conventional science and traditional Indigenous knowledge.” [pages 110-111]

The planning agency does not dictate what the future should be or how the economy should be run, but rather would provide the public and its representatives with blueprints. Making economics understandable for everyone is a pre-condition for a socialist democracy. The planning agency would educate citizens on how the economy and the biosphere work. “Half-Earth socialism would not be some distant, top-down technocracy but rather a relatively simple democratic system, based on robust public education and involvement. An informed citizenry would be well-equipped to choose among the competing plans devised by the planners.”

Planning would need a balance of flexible local decision-making with some measure of central control, with continual refinement for specific outcomes. The idea here would be that an approved plan, whether approved by a world parliament or by popular referendum, would be “coarse” — it would be a general guide with local and regional economic plans based on it being more detailed and tailored to those local and regional needs. Decisions on plans would occur after copious popular discussion and would be flexible so that changes in raw materials and component allocations could be made as shortages appear in one area and excesses in another.

Building the future with tools we already possess

The technology to make this level of planning a reality already exists, Dr. Vettese and Mr. Pendergrass write:

“Every element of Half-Earth socialism’s ‘vast machine’ of planetary calculation is based on already existing technologies. The central algorithms in the model would take advantage of many of the insights and engineering designs that climate scientists have spent decades developing. Its tiered structure could draw on the nesting pattern found in environmental and atmospheric models, with global and local simulations constantly interacting and updating one another. … All this data does not mean that we fully know nature, only that Half-Earth socialist planners would have access to the vital signs of the planet so they could modify humanity’s interchange with nature when necessary.” [pages 129-130]

Lurking in the background is the experience of the Soviet Union and its Central European satellites, which collapsed. In acknowledging this history, the authors note that those failures must be reckoned with and that people must have a direct say in social and economic decisions.

“Socialism is a society emancipated from the relentless, unconscious, and irrational power of capital. Living in a planned society should feel better and freer, with a sense of solidarity and freedom from the threat of poverty. Democracy and meaningful work are not mere side effects of a socialist economy but central for planning to function.” [page 130]

Accepting limits and trade-offs is also central to such a project. Postulating that socialism leads to shortages just as capitalism leads to surplus production that results in inequality, unemployment and environmental catastrophe, disadvantages must be accepted if we want the benefits. Crucially, the sketches of the book are “starting points for a deeper discussion of how socialism should function in an age of ecological crisis.” The book concludes with a fictional chapter describing a functioning half-Earth socialist democracy in western Massachusetts, written with a nod to William Morris’ utopian novel News From Nowhere. Bicycling is the main transport method here because public transport, as is the case across the U.S., badly lags other countries, something the people of this region are coping with.

Downtown Amherst, Massachusetts. Might be difficult to re-wild. (Photo by AlexiusHoratius)

Half-Earth Socialism is not a utopia, even though the authors have a practical utopian streak in them. They conclude by stating that humanity’s choices are “further humanization of nature through mad [geo-engineering] schemes” or “to plan an economy within planetary boundaries.” Everyone would have the essentials but “occasionally it might be necessary to stand in queue.” As the authors put it, there will be more comfort than what Cubans experienced during the early 1990s “special period” but “less than a typical eco-Yuppie in the Global North who installs solar panels on the roof of their McMansions … and has a $70,000 electric car in the garage.”

As I have said in previous book reviews, the judgment to be made is whether an excellent contribution to the literature has been made, not whether we agree with all the details and theses. I will say here that I do agree with a huge majority of the contents but even if I had more disagreements, I would still recommend Half-Earth Socialism. Dr. Vettese and Mr. Pendergrass have provided us with a marvelous, needed concept for how to organize a realistic better world, one recognizable from the standpoint of today. The one thing missing, however, is substantial — there are no ideas provided on how we might get from today to a half-Earth socialist democracy tomorrow. Also missing is how a transition to re-wilding half the land could be carried out, other than it would be a slow, decades-long transition.

I won’t consider these fatal flaws, for how to ignite and see through a successful revolution is something none of us possess today, nor can we alone. I have long said if I knew the secret, I’d tell everybody and not keep it to myself. What is essential is that we have practical, realistic ideas based on the limits our planet imposes on us if we are ever going to be in a position to create a better world. On that important metric, Half-Earth Socialism should be widely read.

* Troy Vettese and Drew Pendergrass, Half-Earth Socialism: A Plan to Save the Future from Extinction, Climate Change, and Pandemics [Verso, London and Brooklyn, 2022]

As long as housing is a commodity, rents will keep rising

Capitalism marches on. And thus housing, because it is a capitalist commodity, has resumed its upward cost, putting ever more people at risk of homelessness, hunger, inability to access medical care and medications, or some combination of those.

There had been a temporary dip in the costs of rentals in 2020 as the pandemic threw a spanner into the economy, but the dynamics of capitalist markets have reasserted themselves. Rent is not only too damn high but getting higher, fast. And almost everywhere, not just in your city.

Here are a few numbers that begin to tell the story:

  • In the United States, rents on residential units have increased at more than double the rate of inflation since 1980.
  • In Canada, rents increased seven and a half times faster than wages from 2000 to 2020.
  • In England, rents grew 60% faster than wages between 2011 and 2017.
  • Germany’s 77 largest cities have a shortage of 1.9 million affordable apartments.
  • In Australia, rent from 2006 to 2022 has increased 12 times faster than inflation-adjusted wages.

Those are countrywide numbers, not specific to particular cities. The numbers are more disastrous in the largest cities.

“Greed” by Rolf Dietrich Brecher

Does this just happen? Could this be, as the corporate media, corporate-funded “think tanks” and the whole panoply of capitalist institutions incessantly propagate, the natural workings of the world? A federal judge in San Francisco, one with a reputation as a liberal, once declared that landlords have nothing to do with rent increases but instead rents rise without human invention in striking down a city law that would have required landlords who kick tenants out of rent-controlled apartments to pay them the difference between the rent they had been paying and the fair market rate for a similar unit for a period of two years.

Perhaps this is what is meant when right-wing ideologues praise the “magic of the market.” More profits just by showing up.

In the real world, actions don’t necessarily happen without human intervention and large trends don’t happen without larger interests. As a case in point, gentrification does not happen spontaneously, but is a result of powerful social forces.

Corporate and government backing of gentrification

A working definition of gentrification is: A process whereby an organic culture originating in the imagination, sweat and intellectual ferment of a people living in a particular time and place who are symbolically or actually distinct from a dominant moneyed mono-culture is steadily removed and replaced by corporate money and power, which impose a colorless chain-store conformity. The process of gentrification is assisted by a local government under the sway of local corporate elites, and is centered on dramatic increases in commercial and residential rents such that the people and culture who are being removed find it increasingly difficult to remain.

Gentrification frequently means the replacement of a people, particularly the poor members of a people, with others of a lighter skin complexion. A corporatized, sanitized and usurped version of the culture of the replaced people is left behind as a draw for the “adventurous” who move in and as a product to be exploited by chain-store managers who wish to cater to the newcomers. Once community members are pushed out, real estate money begins to pour in, rapidly pushing up rents and making the area increasingly unaffordable for those who remain. 

Water is a human right, the people of Detroit say. (Photo by Moratorium NOW! Coalition to Stop Foreclosures, Evictions, and Utility Shutoffs)

One city where this process was particularly harsh is Detroit. Not only are municipal services withdrawn, schools starved of resources, militarized police unleashed and homelessness criminalized, but a “gentrification to prison pipeline” is set up, with People of Color targeted by the legal system. In a “personal” article published in Truthout detailing his experience in Detroit’s Cass Corridor area, Lacino Hamilton, who was incarcerated for 26 years thanks to a wrongful conviction, gives first-hand testimony. He writes:

“I don’t know which came first, but the changes came hard and fast: mortgage foreclosures, the imposition of tax liens, governments seizing property through their power of eminent domain, the reduction and gutting of city services, city officials ignoring an influx of drugs and prostitution, rampant homelessness, and courts and prisons’ increased presence in our lives. But I am certain we were being pushed out of the Cass Corridor, displaced through a complex network of public and private interests. In the mid 1980s, Detroit Mayor Coleman Young announced that city dollars would be used to finance the development of downtown hotels, so that Detroit could attract convention business. Homes were foreclosed. Businesses were dismantled. And everyday decision-making power was shifted from families and local business owners to state legislators, venture capitalists and a combination of financial institutions and interests. It was as if a number of bombs just went off. Almost overnight the Cass Corridor resembled a war zone. …

Forcing people to evacuate a neighborhood or entire section of a city cannot be achieved by democratic means. It is inconceivable that anyone would vote to displace themselves, right? This explains why police, courts and prison are often used to remove and disappear some people. …

The grim reality of gentrification for a large portion of the Cass Corridor’s population has been evident for years. In the eyes of city officials and the big corporations that now control that section of Detroit, the ‘limits of development’ did not call for public participation but for confinement. We were viewed as obsolete commodities that had to leave whether we had some place to go or not, and many of us didn’t. This is how the city of Detroit’s approach to ‘social development’ came to rely so dramatically on the bricks and mortar of prison at the expense of other responses that would have been both more humane and more effective — such as social development with people in mind, not profit.”

That process is deeply related to other problems imposed on Detroit in recent years, such as the same city officials who assisted the process of gentrification being fleeced by financial industry predators who talked them into buying complex, and poorly understood, derivatives that are much more profitable for Wall Street than the issuance of “plain vanilla” municipal bonds that denominate a set amount of debt paying back a set amount of interest on a specific schedule. Following Detroit having to declare bankruptcy because of the financial fleecing, the city literally became a colony with a corporate lawyer imposed as an “emergency manager” who oversaw the shutting off of water to tens of thousands while allowing businesses to accrue vastly higher arrears without penalty. That corporate lawyer was a partner at one of the biggest law firms in the U.S., Jones Day, which supplied at least a dozen officials to the Trump administration.

Pitting renters and homeless people against each other

Gentrification is certainly not confined to Detroit. Far from it. Nor are the processes set in motion by capitalists, especially those in the real estate industry. In Boston, the United Front Against Displacement, an anti-gentrification organization, has reported on the “onslaught of gentrification being unleashed upon Boston’s working-class residents by developers, construction companies, and the city government.” A part of the city’s strategy was to create divisions between renters and homeless people. The organization writes:

“The cops were also regularly messing with people, allowing them to stay in the park for a week or two and then forcing them to move on. They often push people towards a part of the city known as ‘methadone mile’ because of the concentration of methadone clinics. ‘Methadone mile’ is not somewhere most homeless people want to end up, since there is a lot of stealing, violence, and heavy drug use. The police know this stuff is going on and don’t do anything to stop it, preferring to push homeless people from across the city into a situation where they’re likely to get caught up in violence, have their stuff stolen, or fall back into addiction. …

These dynamics have created significant divisions between homeless people in the park and working-class residents of the surrounding projects and apartment complexes. Many residents have grown frustrated after dealing with unsafe conditions in the park for years, from needles left on the playground to stabbings, fights, and other violence. These problems have so far been a significant barrier to bringing residents of the apartments and the homeless population together.

The major divisions we saw amongst people in the park and between them and local tenants are not unique to this one part of Boston. They reflect a larger strategy that the ruling elite use to keep people down by creating conflict and division between people who really should be organizing together. For instance, the police push homeless people to move into the park and the city fails to provide services or sufficient shelters to them. They do this knowing that it will lead to various negative effects for people living in the area: needles and broken bottles in the park, violence, and so on. Then a section of the tenants will start to blame the homeless for these problems, and potentially support increased police patrols and the like as a result. Then two groups of people, homeless people and working-class tenants, who have a common interest in opposing gentrification, are at each other’s throats instead of organizing together.”

Boston Public Garden (photo by Rizka)

Divide and conquer is of course one of the oldest tricks in bourgeois tool boxes. The new administration of New York City Mayor Eric Adams, shortly after taking office, began sending the police to make hundreds of sweeps of homeless encampments. Mayor Adams claims he wants homeless people to “trust” authorities, but having the police arrest them and throw away their belongings hardly seems likely to earn “trust.” At the same time, he appointed real estate-aligned people to the city board that oversees what landlords can charge tenants in rent-stabilized apartments, who promptly asked for massive increases despite steady increases in landlord profits since 1990, a trend that accelerated from 2005.

Seeing battles for affordable rent in a larger context

Although a full toolbox is needed to combat high rents, one tool desperately needed is rent control. Few localities have it, and in most places that do it is inadequate and in need of strengthening. One place with some of the strongest rent control laws in the United States, yet still not providing needed protection, is San Francisco. 

Randy Shaw, writing on the FoundSF website, has provided a brief history of rent control in San Francisco, noting that a comprehensive struggle must go beyond that issue:

“As rents rose and gentrification and displacement worsened, tenant activists unified around a common goal: strengthening rent control. While Proposition R represented a comprehensive response to all aspects of city housing policy, since 1980 the tenant movement has been a series of campaigns designed to improve the very weak 1979 rent control ordinance. This exclusive focus on rent control had positive and negative implications. The 1979 laws clearly provided tenants with inadequate legal protections against eviction, and permitted automatic 7% annual rent raises, an amount well in excess of inflation. Moreover, San Francisco’s rent control law allowed unlimited rent increases on vacant apartments. This gave landlords an economic incentive to evict, and meant that the housing stock would, as tenants vacated, become increasingly unaffordable. As a result, rent control on vacant apartments (i.e., vacancy control) became the chief goal of tenant groups throughout the 1980s.

Tenants’ exclusive focus on strengthening rent control, however, had a major downside: the movement became divorced from the larger urban crisis agenda. Tenant-landlord and rent control fights were no longer surrounded by discussions of class, economic unfairness, and redistribution of wealth. The broader context of rent control as akin to progressive taxation was replaced by debates whose dialogue excluded the tax benefits offered to landlords, their superior wealth, and the conflict between Democratic Party politicians who espoused Republican, free-market principles when rent control was involved. The tenant movement was increasingly comprised of people whose involvement arose from negative personal experiences with their landlords rather than from a broader political outlook. Progressive activists who came to tenant issues in response to an urban crisis were not drawn to tenant organizations whose only response to the crisis was stronger rent control.”

Could a broader focus have helped pass a 2014 ballot referendum that would have imposed a “speculation tax” on building owners who sell a building in less than five years after buying? The proposed law included exemptions to ensure it would have applied only to speculators. Outspent 12-to-1 by real estate interests, the referendum narrowly lost. An activist with the Tenderloin Housing Clinic believed that a greater emphasis on community organizing would have made a difference; the referendum had been placed on the ballot by four members of the city Board of Supervisors (San Francisco’s city council), rather than by activists collecting signatures.

San Francisco’s Haight-Ashbury district (photo by “Urban”)

United Front Against Displacement, also active there, reports that “almost all the public housing has been privatized” in San Francisco and Oakland. The organization writes:

“In San Francisco, there is an ongoing citywide privatization scheme … called HOPE SF. The city government, banks like Bank of America, Wells Fargo, JP Morgan Chase, corporations like Google, Kaiser Permanente, and foundations in the city are working together to achieve the HOPE SF scheme. HOPE SF’s plan is to eliminate the last public housing in San Francisco (Sunnydale, Potrero, Double Rock/Alice Griffith, Hunters View), which are in working class neighborhoods in San Francisco, by destroying them and building mixed income developments owned and managed by different private developers.”

United Front Against Displacement reports that the San Francisco Housing Authority actually sent them a letter alleging its organizers were harassing tenants! In response, tenant organizers at one of the targeted public housing projects sent a letter to the authority saying its “misrepresentation is particularly shocking” in light of “over a hundred tenants, voicing opposition to the HOPE SF’s privatization of Sunnydale that is destroying our homes.”

Even getting effective laws passed does not guarantee better housing policies will be implemented. In Berlin, for example, a rent cap that would have frozen rents for 90% of the city’s apartments at their June 2019 level for five years was overturned by Germany’s Constitutional Court in April 2021. The German high court ruled that because the federal government had already made a law regulating rents, which allowed landlords to raise rents by 10% above the local market level, state governments can not impose their own law. But this ruling does not simply repeal Berlin’s law, it may even result in higher rents, reports German broadcaster Deutsche Welle. The “decision could mean a windfall for landlords as rents are instantly raised by hundreds of euros a month, on top of which landlords could now demand their tenants back-pay higher rents for the past year,” DW reported.

Predatory speculations spread their tentacles

Although everybody who rents is affected by gentrification and the social forces pushing rents upwards, those stranded in low-wage jobs and in particular People of Color are most affected. Racism being an ever present reality throughout the advanced capitalist countries, it would be most surprising if that did not impact housing. And here we have no surprises. A highly useful new book, Counterpoints: A San Francisco Bay Area Atlas of Displacement & Resistance, prepared by the Anti-Eviction Mapping Project collective, provides a series of stories and colorful graphics and charts detailing the precarious state of housing in the nine counties of the San Francisco Bay Area, backed by copious research. For example, research detailed in Counterpoints revealed that although Latinx communities represented 25 percent of the populations of San Mateo County in 2014 and 2015, they were 49 percent of those evicted. Black/African-American peoples were 2.5 percent of the county’s population but 21 percent of the evictions.

Displacement is not confined to cities such as Oakland, but is underway in suburban towns. This is due, in part, to the voracious appetite of financial speculators buying up houses in large numbers to rent out, a trend that catalyzed in the wake of the 2008 economic collapse. Geography professor Desiree Fields, writing in Counterpoints, outlines the scale of that speculation, which contributes to rents becoming out of reach. As many as 7 million single-family homes in the U.S. have been converted to rentals since 2008. This is now a suburban phenomenon, not only an urban one, Dr. Fields writes:

“Whereas, for generations, urban crises set off by financial exploitation were largely confined to aging buildings in [the] ‘inner city,’ after 2008, the single-family home, representing middle-class suburban life, became the ‘mascot’ of the crisis. Cul-de-sacs in low-density subdivisions were lined with for sale signs, and auction notices dotted the front yards of McMansions. In sunny California, Arizona, and Florida, ‘zombie pools’ in abandoned properties grew algae and bred mosquitoes, becoming incubators for disease. Speaking to how the crisis overflowed the spatial, racial, and class boundaries of the urban core, Alex Schafran observed, ‘Just as burned-out housing projects in inner cities were the iconic images of the mid-1970s recession, trashed-out tract homes in California and the Sun Belt are the signature images of crisis in post-millennial America.’

In suburbs and exurbs like Antioch, Brentwood, and Pittsburg (and down-at-the-heels sites of industry like Richmond and Vallejo), places where African American, Hispanic, and Filipino American Bay Area residents displaced from the region’s urban core sought affordable (ultimately unsustainable) homeownership, it was these ‘trashed out tract homes’ to which investors — of all kinds — were drawn in the aftermath of 2008. Crisis as opportunity is, of course, nothing new in capitalism. If anything, crisis is one of its fundamental dynamics and how it adapts to changing contexts, thereby reproducing itself anew. And so, as crisis created a ready population of tenants comprised of former homeowners and those unable to qualify for mortgages under tightened crisis conditions, a financial industry ‘somewhere between anxious and desperate for new products’ began to reimagine single-family rental homes as financial assets. The activities of large-scale ‘corporate’ investors have been particularly notable in parts of California and the Sun Belt hit hardest by the crisis.

Able to raise cash cheaply on capital markets rather than relying on the uncertainties of mortgage credit and armed with digital technology allowing them to zero in on properties meeting their investment criteria, these corporate actors enjoyed a distinct advantage over smaller investors. … ‘Wall Street’ landlords saw in single-family rental the ingredients for a novel financial asset: once they had aggregated ownership, bundles of rent checks could replace bundles of mortgage checks, fueling a model of securitization suited to a potentially post-ownership society. … The sale of these financial assets to bondholders allows Wall Street landlords to borrow against the value of the properties, securing a cash infusion to settle previous debts or pay themselves out. Meanwhile, tenants back this loan with their rent checks.”

SkyView Atlanta (photo by Don McCulley)

Similar dynamics are at work on the other side of the U.S., in Atlanta. A U.S. Department of Housing and Urban Development report, “From Foreclosure to Eviction: Housing Insecurity in Corporate-Owned Single-Family Rentals,” found that evictions are spatially concentrated, meaning minority renters are more likely to be thrown out of their homes, and that corporate landlords are much more likely to evict. The report said:

“We document a high, spatially concentrated evictions rate. More than 20 percent of all rental households received an eviction notice in 2015, and 5.6 percent of tenants received a judgment or were forcibly removed from their homes. Evictions are spatially concentrated; in some zip codes, over 40 percent of all rental households received an eviction notice and over 15 percent of all households received a judgment or were forcibly removed. … We find that large corporate owners of single-family rentals, which we define as firms with more than 15 single-family rental homes in Fulton County [the county centered on Atlanta], are 68 percent more likely than small landlords to file eviction notices even after controlling for past foreclosure status, property characteristics, tenant characteristics, and neighborhood. …  Depending on the firm, institutional investors were between 11 percent and 205 percent more likely to file for eviction than mom-and-pop firms, even after controlling for property, tenant, and neighborhood characteristics.”

Out of control rent increases vastly outpace wages and inflation

This is a trend almost certainly to get worse — the Housing and Urban Development report said that, from 2011 to 2013, institutional investors and hedge funds bought an estimated 350,000 bank-owned homes.

A New York Times report noted that “Various studies have found that corporate landlords are more likely to raise rents, evict their tenants and poorly maintain their properties than smaller landlords.” Financial speculators are rapidly buying up single-family homes and are targeting African-Americans. The report said:

“Real estate investors bought a record 18.4 percent of the homes that were sold in the United States in the fourth quarter of 2021, up from 12.6 percent a year earlier. In Charlotte and Atlanta, investors purchased more than 30 percent of the homes sold in the fourth quarter of 2021, according to Redfin. In Jacksonville, Fla., Las Vegas, and Phoenix, they bought just under 30 percent. …  More than 93 percent of homes purchased by corporations as of May 2021 were bought for under $300,000. Many of them were in predominantly Black neighborhoods.”

Regardless of whether you rent a single-family house in the suburbs or an apartment in a city, rent is going up, around the world. In the United States, average rent prices have increased at a rate of 8.9% per year since 1980, consistently outpacing wage inflation by a significant margin. By comparison, average wages increase at an annual rate of 3.44%. Thus, as stated above, rents increase at more than double the rate of wages. A report in the online publication Real Estate Witch reports that from 1985 to 2020, the national median rent price rose 149%, while overall income grew by only 35%. That 35% figure may be overstated; the Pew Research Center reported that U.S. wages, adjusted for inflation, have increased by pennies since 1970, from about $22 per hour then to $22.65 in 2019.

To put all this in another way, your rent would be hundreds of dollars less per month if rents had increased at only the rate of inflation over the past 50 years. If rents had risen at the rate of inflation from 2000, today’s rents, on a national average, would average nearly $200 per month less than they do; if rents had risen at the rate of inflation from 1970, today’s rents would average about $380 per month less than they do. That’s money stuffed into landlords’ pockets and all they have to do is put their feet on the desk and let the checks roll in.

Vancouver as seen from Lookout Tower

One final statistic on U.S. rents, this time for New York City: The Housing and Vacancy Survey, conducted triennially for the city by the U.S. Census Bureau, published its latest report on May 16, 2022. The median wage in New York City is only half of what would be necessary to pay for the median rent, a figure calculated by using the standard metric that nobody should pay more than 30 percent of income to rent. The report said, “The median rent of a unit that was available for rent was $2,750, which would require an income of at least $110,000 to afford; yet, the median household income of renters in 2021 was only $50,000.” In 2021, more than half of New York City renter households (53 percent or just under 1 million households) were rent burdened (more than 30% of income going to rent) and one-third were severely burdened (more than 50% of income going to rent).

These trends are accelerating as the brief pause in rent increases in 2020 are now behind us. Median rents for one-bedroom apartments in several Boston-area towns, including Cambridge, are up by at least 30 percent compared to last year. Boston itself wasn’t far behind with a 27 percent increase in median one-bedroom rents.

Rent gouging and spiraling housing costs in Canada, Britain

As dramatic as housing costs are in the United States, the situation may be even more out of control in Canada. Unlike the U.S. and many European countries such as Germany, housing costs did not pause following the 2008 economic collapse. Prices have risen dramatically since 2000, and the trend of institutional investors scooping up housing is more accelerated in Canada than in the United States. Better Dwelling, which describes itself as “Canada’s largest independent housing news outlet,” reports on the rapid increase of speculation in housing:

“Canadian real estate is being scooped up by investors with excessively cheap credit. Ownership data for residential real estate across four regions show a significant share owned by investors in 2020. What’s most impressive is how fast this trend must have accelerated. Cities have seen up to 90% of recently completed homes go to investors, much higher than normal. … Since we’re only looking at cities, no one’s shack in the woods is likely to be included. Only data for Ontario, British Columbia (BC), and Atlantic Canada is available. … About 1 in 5 (21.0%) homes in the median city across the four regions are investor-owned. When isolating new construction (built after 2016), that number rises to 1 in 3 (33.7%) bought by investors. …

Toronto is Canada’s biggest real estate market, and it’s seeing investor-ownership soar. Investors owned 18.4% of the housing stock in 2020, just shy of 1 in 5 homes. Isolating recently completed homes (after 2016), investors owned 39.1% of the new supply. … Vancouver real estate shows a similar trend, but a higher share of investors. Investors owned nearly 1 in 4 (23.5%) of total housing supply in 2020. For recent builds, that share jumps to nearly half (44.0%) of the supply. It’s easy to see how Toronto and Vancouver home prices are so distorted. There’s a lot less friction for home prices when you’re passing the costs on to someone else. … Atlantic Canada real estate is quickly becoming home to a robust rentier class. In Nova Scotia, investors owned 25.5% of total housing stock in 2020 but 48.7% of recently completed homes. New Brunswick has seen a similar trend where 17.2% of total housing is investor-owned, representing 41.0% of recent completions.”

That concentration of ownership helps fuel the dramatic increase in Canadian housing costs. Sales figures show a 318% rise in home prices since 2000, according to the Canadian Broadcasting Corporation. House prices in Montréal, Toronto and Vancouver tripled from 2000 to 2020, and the rest of the country wasn’t far behind, as Canadian house prices overall increased two and a half times, adjusted for inflation, from 2000 to 2020. Canadian wages, by contrast, increased only 49% from 2000 to 2020, which really means wages barely improved because Canadian inflation rose 44% from 2000 to 2020.

Across the Atlantic, rent in Britain is too high as well, and it is not only London where such is the case. A report in the Shelter blog reveals that the average renter in England is rent-burdened, by the standard of paying no more than 30 percent of wages to housing. “Other government figures confirm the reality of the affordability crisis in the privately rented sector,” the blog said. “The English Housing Survey (EHS) shows that renters spend 40% of their income on housing costs — double what owner-occupiers pay (19%). Affordability is particularly acute for those with the lowest incomes in England, who spend over 75% of their income on housing costs.”

As noted above, rents in England increased 60% quicker than wages from 2011 to 2017 . The Shelter report said, “And this isn’t just an issue confined to London and the south-east, as you might expect. … So as well as affordability worsening in London, rents in Rugby in the West Midlands have risen at twice the national rate (30% vs. 16%) yet wages have increased by just 5%. Similar figures are seen for East Hertfordshire in the east of England, and in Daventry wages have fallen, while rents have increased by 26%.” In Cambridge, rents increased 36 percent from 2011 to 2017, while wages rose only nine percent. Separately, a 2016 report by the Resolution Foundation found the household income of British renters increased two percent from 2002 to 2015, while their housing costs increased 16 percent.

And on it goes, from Barcelona to Paris to Berlin to Istanbul to Sydney to Melbourne.

Capitalism is global, and it follows that gentrification is global. Rents will continue to rise as long as housing remains a capitalist commodity. That can only change if we create a better world.

Corporate greed keeps the pandemic alive

More than two years on, it is hard to imagine there could be someone who is not sick of the pandemic. Although we can point to multiple reasons for the inability to bring Covid-19 under control, a prominent factor is corporate greed.

The elevation of the private profit of a few over the welfare of the many is, sadly, the ordinary course of events in a capitalist world. This is brightly illustrated by the failure of the world’s governments to prioritize health care over money as exemplified by the ongoing failure to make vaccines available to the Global South.

Business as usual, yes, and it would be easy enough to lament the standards of the United States and its wildly expensive health care system being exported to the rest of the world. The U.S. does play a role here, but this time the U.S. is not the biggest villain. The European Union, with its obstinate refusal to waive any intellectual property rule because of fealty to Covid-19 vaccine makers, has been the biggest roadblock.

As new variations and mutations repeatedly spread, achieving a critical mass of vaccinated people is the only way the pandemic will be brought to an end. Covid-19 may never be fully eradicated but it can be reduced to a background nuisance as are many other illnesses. Hesitancy among many in the Global North to be vaccinated has played a not insignificant role, whether by right-wingers believing the nonsense peddled by the likes of Fox “News” or by people on the Left who, not without reason, are skeptical of Big Pharma.

Nurse graffiti COVID-19 in Málaga, Spain (photo by Daniel Capilla)

Those in the latter category see nefarious motivations behind pharmaceutical companies’ promotion of Covid vaccines. But is this another instance of Big Pharma pushing unneeded or even dangerous drugs? Such things do happen; suspicion does have a basis. But let’s consider what Big Pharma wants, which is no different from any other corporation: To accumulate the biggest piles of money possible. Given the global health emergency that arose in the first months of 2020, the surest path to achieving that goal would be to become the first to develop a cure. The pandemic was that rare instance in which the interests of Big Pharma and the general population coincided, and the vaccine makers wouldn’t be, and indeed aren’t, at all shy about taking advantage of an emergency to rack up huge profits, even by their industry’s standards. And with the whole world watching, a vaccine had better work and not cause undue harm.

Thus, because of unique circumstances, creating a safe, effective product for a real problem was actually in a corporate interest. And the profits, thanks to these rare circumstances and government largesse, are gigantic, a topic to which we will return.

Intellectual property as a weapon

It should surprise no one that the vaccine makers are doing everything they can to keep windfall profits rolling in. That means clinging to intellectual property (IP) law, heavily skewed in their favor, to maintain a monopoly. Capitalist governments have rolled over for corporate interests for decades, making IP laws ever more rigid. National legislation has played a role, firmly augmented by so-called “free trade” agreements that are used as battering rams by the United States, the European Union and other advanced capitalist countries to force open less powerful countries’ economies and force the world’s governments, including themselves, to be subordinate to multinational capital. Seeking to undermine government health care systems, and especially the ability of governments to negotiate lower prices, is often a goal of “free trade” deals, most notably demonstrated in the efforts of the U.S. government to push draconian rules in the Trans-Pacific Partnership.

These developments are anathema to the interests of working people everywhere. It is unconscionable, or should be, when IP rules are used to keep life-saving vaccines away from most of the world’s people. Struggles to make Covid-19 vaccines available to the Global South kicked off quickly, and there is no sign that this issue will anytime soon be resolved. This is not only against the interests of those for whom vaccines remain out of reach, but, given that the pandemic won’t end until a substantial percentage of the world’s peoples are inoculated and thus end the risk of still more dangerous variants arising, it is against the interests of those countries whose governments continue to elevate corporate profits over human life.

What the world needs is for manufacturers anywhere in the world to be granted the unrestricted right to manufacture the vaccines.

To achieve this necessity, what is needed is something called a “TRIPS waiver.” This will require some explanation, as once again a trip into the weeds of global trade policy becomes unavoidable.

Traffic in a British village is reduced from two lanes to one so there would be sufficient space for walkers to maintain two-meter distances from one another. (Photo by Martinvl)

Under World Trade Organization (WTO) rules, IP rights are strictly enforced. As the neoliberal variant of capitalism became dominant with the decline of Keynesianism in the 1970s, economic decision-making has been separated from politics, leaving multinational corporations free to move production to the places with the lowest wages and least regulation, constantly on the prowl for locations that can be even more exploited. With components obtained from around the world, assembled in low-wage, low-regulation havens and finished products exported, barriers to trade such as tariffs were necessary and, having won those, corporate executives and financiers next sought to eliminate the ability of governments to regulate them. Thus the era of “free trade” agreements arose, and one of the institutions that was created to enforce corporate supremacy was the WTO.

One of the legs of corporate domination is IP law. How that relates to the pandemic is this: A handful of multinational corporations, interested in the biggest possible profits for their executives and shareholders, can decide who will receive vaccines and at what price. That human life is at stake — more than 6 million have died from Covid-19 — does not make for an exception. As Alain Supiot, writing on international law in the November-December 2021 issue of New Left Review, noted:

“On the one hand, the Preamble to the [World Health Organization] Constitution states that ‘The extension to all peoples of the benefits of medical, psychological and related knowledge is essential to the attainment of health.’ But on the other, since the creation of the World Trade Organization in 1994, this knowledge has become an object of private property, precisely opposed ‘to all peoples’ by virtue of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Until then, it was accepted in international law that the protection of public health interests took precedence over the interests of patent-holders. The TRIPS Agreement reversed this hierarchy and gave primacy to the protection of industrial property.

Negotiations to enact a waiver are stonewalled

A waiver of TRIPS rules, then, is what is needed. In other words, a comprehensive waiver that, even if temporary for the duration of the emergency, sets aside Big Pharma’s IP rights and allows all manufacturers of vaccines, wherever they are, to produce Covid-19 vaccines. The governments of India and South Africa proposed, in October 2020, just such a waiver to allow the production of one or more of the Covid-19 vaccines. A year and a half later, the world is still waiting, with no resolution in sight.

Sarah Lazare and Paige Oamek, writing for In These Times, recently wrote an article demonstrating the “big lie” of Big Pharma talking points as the industry, in particular Pfizer, furiously resist any weakening of their IP fortresses. They wrote:

“The lie relates to an October 2020 proposal from India and South Africa that the World Trade Organization suspend enforcement of key patent rules so that cheaper, generic versions of Covid-19 treatments and vaccines can get to more people more quickly. (The proposal is referred to as a TRIPS waiver, a reference to the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights.) The pharmaceutical giants Pfizer and Moderna, concerned with maximizing their present and future profits, emerged as virulent opponents of such a measure, which still has not passed more than a year later, even as just one out of 21 people in poor countries have been fully vaccinated. It is no anomaly that the industry would reject such a proposal — pharmaceutical companies had a big hand in shaping those WTO intellectual property rules in the first place, to protect pharmaceutical monopolies and their profits.”

Negotiations have centered on four-way talks among India, South Africa, the European Union and the United States. A report surfaced in March 2022 that an agreement had finally been reached, but that has been denied, most notably by the U.S. government. Text accompanying the reported agreement was widely and loudly condemned around the world as grossly insufficient, and possibly even adding additional barriers to global vaccine access. Weeks have gone by, and there is no word that any agreement has actually been reached. What the true state of the negotiations may be can not be stated with any certainty, but there is no indication that any deal is imminent. Or that any deal will resemble what is needed by the Global South.

A doctor in a hospital during the COVID-19 pandemic (photo by Pablo Jarrín)

A surprise announcement by the Biden administration in May 2021, when President Joe Biden announced support for a TRIPS waiver, in a partial reversal of U.S. policy that has consistently elevated corporate profits above all other considerations, raised hopes. But the Biden administration pronouncement is less than meets the eye, and the European Union has remained obstinately opposed to any waiver. Providing a fresh demonstration of the anti-democratic nature of the EU, that the European Parliament has three times called for a waiver to be approved and many EU countries are in support have had no apparent effect on EU negotiators.

The U.S.-based watchdog group Global Trade Watch, in its analysis, says that accepting the EU proposal would be worse than having no deal:

“The European Union has been the primary obstacle to progress on the waiver. … The EU’s position had been to basically restate existing WTO flexibilities on patents that almost every WTO member already has, while requiring additional conditionalities. … Any proposal that follows the EU position is worse than no action at all, because it could further undermine current WTO rules that already allow governments to issue compulsory licenses. The need for far greater, not less, freedom to make and use medicines in a global health crisis like the COVID-19 pandemic is precisely why more than 100 countries have supported the waiver as introduced by India and South Africa.”

The EU, however, is not the only obstacle. The U.S. negotiating position isn’t for a full waiver. The Global Trade Watch analysis states:

“The longstanding U.S. position to support a waiver for vaccines only, excluding the tests and therapeutics, is shameful, particularly as President Biden recently lauded testing and treatment as key tools in fighting the pandemic at this stage. The new proposal only covers vaccines, with tests and treatments to be considered six months after the proposal is agreed, if it is agreed. Given the already seventeen-month delay since the waiver was introduced, it is irresponsible to suggest further delay for tests and therapeutics. … The U.S. had also reportedly suggested limiting the geographic scope of the waiver, which would only further limit the ability to scale up manufacturing all over the world. This demand was apparently agreed, as the proposal now on offer would only apply to developing countries that contributed less than 10% of the world’s exports of COVID-19 vaccine doses in 2021.”

Public statements by the Office of the U.S. Trade Representative have not been encouraging. The trade representative, Katherine Tai, “assured” the U.S. Congress that her office is not “working to give away American IP.” With the usual bipartisan commitment to corporate profits, congressional Republicans and Democrats oppose a meaningful waiver, echoing industry talking points to underline their disapproval. A bloc of Republican representatives is seeking to enforce this by introducing a bill that would grant Congress more oversight over negotiations.

Most of the world’s countries back India, South Africa

As many as 120 of the WTO’s 164 countries are said to be backing India and South Africa. Yet many of these countries would be excluded even from the limited and inadequate proposals put forth by the EU and U.S. As noted above, larger Global South countries would be excluded under the U.S. proposal to limit the countries eligible, while also limiting what would be available. Médecins Sans Frontières/Doctors Without Borders, for example, calls on WTO members to “tackle the current barriers to accessing all COVID-19 medical tools, including treatments and diagnostics, and also addresses patents and non-patent barriers in an effective way.” Dimitri Eynikel, EU Policy Advisor for MSF’s Access Campaign, noting the “considerable limitations” of what is on the table, said:

“It is incredibly concerning that the leaked text currently only covers vaccines, but neither treatments nor diagnostics. Excluding treatments and diagnostics is a critical weakness, especially as access to COVID-19 treatments remains a significant problem in many low- and middle-income countries, particularly in Latin America, in part because of patent barriers and restrictive licensing deals controlled by pharmaceutical corporations. Excluding countries with significant manufacturing and supply capacity like Brazil is highly problematic as it arbitrarily blocks potential critical avenues to increase access to COVID-19 medical tools for low- and middle-income countries.”

The severe limitations the EU and U.S. are attempting to impose make it unlikely that a “deeply flawed text” can be set right, according to Professor Jane Kelsey of the University of Auckland. Noting that by the end of 2021, more boosters had been given in high-income countries than total doses in low-income ones, Dr. Kelsey wrote, “The leaked ‘solution’ agreed by the informal ‘quad’ (US, EU, India and South Africa) is insufficient, problematic and unworkable. There are too many limitations to make any significant difference and it is a far cry from the original proposal from India and South Africa that would have effectively addressed the barriers.”

Perhaps activists and medical professionals going on the offensive as part of a public-pressure effort is one way that a fair deal might be forced. Nurses from 28 countries filed a complaint in November 2021 with the United Nations alleging human rights violations by the EU and four countries for “the loss of countless lives” in the pandemic. The nurses, representing more than 2.5 million health care workers around the world, named Britain, Norway, Singapore and Switzerland in their filing — the four countries known to be standing with the EU. The nurses charge that “these countries have violated our rights and the rights of our patients — and caused the loss of countless lives” through “continued opposition to the TRIPS waiver … resulting in the violation of human rights of peoples across the world.” The complaint notes human rights obligations to which WTO member states are legally bound.

Nurses demand safe staffing (Photo via National Nurse magazine)

The organizations behind the filing are mostly from the Global South, but among the 28 are ones from Canada (Canadian Federation of Nurses Unions and Fédération interprofessionnelle de la santé du Québec), the United States (National Nurses United) and Australia (Australian Nursing and Midwifery Federation)).

Deborah Burger, president of National Nurses United, which represents more than 175,000 members in the United States, was unsparing in her assessment. She said:

“The maldistribution of vaccines in the face of more than 5 million deaths, many of them preventable, is a devastating reminder of the deplorable disparity of wealth between the rich nations of the north and the global south. To refuse to act simply to protect the profits of giant pharmaceutical corporations is unconscionable, inhumane, and must be ended.”

Upon receipt of the complaint, Dr. Tlaleng Mofokeng, the UN’s Special Rapporteur on Physical and Mental Health, said, “The nurses’ core demand is one I share.” She said:

“States have a collective responsibility to use all available means to facilitate faster access to vaccines, including by introducing a temporary waiver of relevant intellectual property rights under the WTO Agreement on Trade-Related Intellectual Property Rights (TRIPS Agreement). Nurses and health care workers have been on the front line keeping us safe and have witnessed the most painful and heart-wrenching effects of the Covid-19 pandemic. Their evident commitment to the right to physical and mental health provides them with moral authority.”

No executive or shareholder is any danger of starving

Let us now return to the profit margins of pharmaceutical companies and the massive windfall profits being racked up by Covid-19 vaccine manufacturers, which will provide some context to industry arguments. The business news agency Bloomberg reports that Pfizer’s vaccine generated $20 billion in pretax profit in 2021 while Moderna “is expected by analysts to earn $12.2 billion before taxes this year.” Pfizer’s vaccine may rack up $36 billion in revenue this year.

The pharmaceutical industry was already one of the most profitable. To provide some examples, health technology was found to be the most profitable of 19 broadly defined “major” industrial sectors in the U.S. for 2015 and 2016. A BBC report found that pharmaceuticals and banks tied for the highest average profit margin in 2013, with five pharmaceutical companies enjoying a profit margin of 20 percent or more — Pfizer among them. The most profitable pharmaceutical corporations spent far more on sales and marketing than they did on research and development. With little control exerted over pharmaceutical prices in the U.S., it is no wonder that U.S. health care costs are the world’s highest, greatly exceeding any other country.

Even by these rarified standards, the boost to profit margins from Covid-19 have been noteworthy. Pfizer reported almost $22 billion in net income for 2021, only $3 billion more than it reported for 2020 and 2019 combined. Moderna, which even self-described “capitalist tool” Forbes magazine says produced a vaccine “largely funded by taxpayer dollars,” reported $12.2 billion in profits for 2021. Moderna received a billion dollars in government subsidies for its vaccine, and has, overall, received $6 billion from the U.S. government to develop, test, manufacture and deliver its vaccine.

Johnson & Johnson reported net income of almost $21 billion for 2021, a healthy gain of 40 percent over the previous year, a much larger gain than the gain it reported in revenue. And AstraZeneca reported a 37 percent increase in its core earnings per share (a comparison apparently used to exclude special one-time costs from an acquisition).

So it appears that no executive or shareholder of these four pharmaceutical makers is in any danger of being out on the street.

What is the problem in sharing the technology that would finally put an end to the pandemic? The real reason is that the maximum possible amount of profit wouldn’t be accrued. No big corporation is going to admit that, so other excuses are offered.

Debunking Big Pharma’s favorite talking points

The director-general of the World Health Organization, Tedros Adhanom Ghebreyesus, had a revealing conversation with Pfizer’s chief executive officer. As reported by Bloomberg, Dr. Tedros, on a conference call with pharmaceutical executives, said, “Honestly, I’m not seeing the commitment I would expect from you.” The Pfizer chief executive, Albert Bourla, whined that Dr. Tedros was speaking “emotionally.” Consistent with that exchange, Johnson & Johnson’s chief scientific officer, Paul Stoffels, declared at an industry lobbying group gathering that there was no need for any waivers because the industry’s efforts are “sufficient.”

Letting the pharmaceutical industry have its way quite clearly hasn’t been “sufficient,” given the small numbers of vaccines available to the Global South well more than a year since vaccines became available and the inability to stop the pandemic given that lack of availability. The Bloomberg report admitted that “Vaccine inequality didn’t happen by itself. It was the result of decisions by corporate executives and government officials.”

Yonge-Dundas Square in Toronto during the pandemic (photo by Sikander Iqbal)

Big Pharma talking points have revolved around claims that restrictive patents are necessary to encourage research and development, without which supposedly nothing would be invented. (Yet Jonas Salk famously declined to pursue a patent on the polio vaccine.) A new line has emerged during the pandemic: That even if a full waiver were granted, the Global South is incapable of producing vaccines because of a lack of capability or capacity, and thus granting rights would do nothing to solve the pandemic. Government officials backing the pharmaceutical industry loudly echo these claims, among them former German Chancellor Angela Merkel, French President Emmanuel Macron, and members of the U.S. Congress who are recipients of Big Pharma donations.

The In These Times article “Big Pharma’s Big Lies About Vaccine Patents,” debunks these talking points:

“It’s clever messaging, because it has an air of expert knowledge, casting companies as patiently informing activists who are well-intentioned but don’t understand how vaccine production works. It also plays to pre-existing racist assumptions that the Global South does not have pharmaceutical sectors capable of producing quality goods, but must rely on its more sophisticated former colonizers. … We don’t have definitive proof that pharmaceutical executives sat in a room somewhere and said, ‘Let’s deceive the public about the world’s vaccine manufacturing capacity.’ But there have been enough activists, scientists, and heads of state pointing out holes in Big Pharma’s narrative to make it highly likely that the industry, at the very least, was aware of challenges to the veracity of its claims. And it was in its interest to ignore them. Remarkably, the industry has shown it would rather build its own facilities from scratch — like the BioNTech facilities in Rwanda and Senegal, which won’t even start construction until mid-2022 — than give Global South countries the ability to produce vaccines themselves.”

India, for example, ranks third in the world in producing pharmaceuticals, measured by volume, and generics already constitute 70 to 80 percent of the world pharmaceutical market. The Serum Institute of India is the world’s largest producer of vaccines by number of doses produced and sold.

It’s not only vaccines that are being held back

Beyond vaccines, what about pills that are being developed? Pfizer has developed a Covid-19 oral antiviral treatment and granted a royalty-free license for the pill to the United Nations-backed Medicines Patent Pool, but the license covers only about half the world’s population. The Associated Press reported, “The deal excludes some large countries that have suffered devastating coronavirus outbreaks. For example, while a Brazilian drug company could get a license to make the pill for export to other countries, the medicine could not be made generically for use in Brazil.”

The Medicines Patent Pool said on March 18 that 35 companies around the world will produce generic versions of the pill, which has received an emergency approval by the U.S. Food and Drug Administration. The countries where the generic producers are located include Bangladesh, Brazil, China, the Dominican Republic, Jordan, India, Israel, Mexico, Pakistan, Serbia, South Korea and Vietnam.

Nonetheless, health care activists note that the license is less than adequate. Yuanqiong Hu, senior legal policy advisor for Médecins Sans Frontières/Doctors Without Borders’ Access Campaign said:

“Pfizer’s license with the Medicines Patent Pool for its potential oral antiviral treatment offers supply to 95 countries by generic companies that take up the license, covering about 53% of the world’s population, but this again shows how voluntary licenses come up short and do not harness the full capacity available globally for sufficient and sustainable production and supply of lifesaving medical tools for all. Many upper middle-income countries, such as Argentina, Brazil, China, Malaysia and Thailand, where established generic production capacity exists, are excluded from the license territory. We are disheartened to see yet another restrictive voluntary license during this pandemic while cases continue to rise in many countries around the world. The world knows by now that access to COVID-19 medical tools needs to be guaranteed for everyone, everywhere, if we really want to control this pandemic.”

What is more important: Ending the pandemic or increasing corporate profits? Life or money? The world capitalist system is making its choice. Should that choice be allowed to stand?

As long as capitalism exists, the threat of fascism exists

Six years is an eternity in politics. Consider what was common opinion at the start of 2016: That changing demographics in the United States favored the Democratic Party; it would soon be impossible for Republicans to win a national election unless they sharply changed from their primary strategy of sending dog whistles to their base of conservative white people, a dwindling percentage of the U.S. population.

Six short years later, there is not only much hand-wringing that Republicans are using bare-knuckle tactics that are poised to give themselves a permanent grip on power despite their minority status but there is open worry of a possible coup by fascistic elements in the Republican Party that would put an end to formal democracy. No longer, it seems, is demographics destiny; the Democratic Party, ever haughtily giving the back of the hand to its base, had believed it merely need show up to win elections.

One year on from Donald Trump’s attempt at a fascist coup — that the attack on the Capitol by his deluded but fanatical followers had no chance to succeed does not mitigate the severity of that day — the Orange Menace’s grip on the worst of the two parties of capital has further tightened. And perhaps Republicans won’t have to resort to widespread cheating and voter suppression to win back the White House — not that the possibility will in any way give them second thoughts about blocking access to the ballot box — given the pathetic performance of Democrats since winning the 2020 elections, a lack of results dismal even by Democrats’ standards of ineptitude.

Fascism is a global phenomenon, not limited to any one country. (Photo by The All-Nite Images from New York)

Many reading these lines will wonder why we should care which party wins since neither of the two parties of capital will work for working people, who constitute the vast majority of United Statesians as they do in any advanced capitalist country. Even the minuscule number of genuine progressives among Democratic members of Congress are constrained by their party’s dominant corporate wing and, due to the material realities of elite politics, inevitably find themselves politically supporting that wing. Nor is the corporate wing reluctant to undercut its electoral base and its progressive colleagues. Witness House Speaker Nancy Pelosi doing an end-run around the Squad’s refusal to back the bipartisan infrastructure bill until the larger Build Back Better bill passed the Senate by gathering sufficient Republican votes to win passage of the infrastructure bill and thus torpedo the only leverage the party had over its two Senate holdouts, fossil-fuel mouthpiece Joe Manchin and perfidious Kyrsten Sinema. It is impossible to avoid thinking there are other Democrats secretly glad the focus is on those two holdouts, allowing them to avoid the pressure to vote for Build Back Better.

There are others who argue that people should hold their noses and vote for Democrats anyway, given that when Democrats are in office there is more room to maneuver and some possibility of some small reforms. The all-out assault by Republicans, when Trump occupied the White House, on seemingly every front does provide support to lesser-evilism voting. So those who do hold their noses and vote for Democrats won’t get any criticism from me although I can’t bring myself to do it. Whether voting for lesser evils or for socialist or Green candidates, the important thing is to be involved in organizing; taking a half-hour to vote once a year need not detract from activist work.

Nonetheless, there are anti-capitalists, including Marxists, who argue forcefully that Trump and his minions are a unique threat, a threat that rises to the threat of fascism. Fascism is far worse than capitalist formal democracy, sham as the latter is. There is no question, or shouldn’t be, that Trump has aspirations of being a fascist dictator. That alone should be enough to see him and his followers as a mortal threat. Trump does not have sufficient support of industrialists and financiers (however much they applaud what he did for them while in office) to actually become a fascist dictator, and his base, although depressingly large and immune to reason and reality, is not big enough for a successful putsch.

Trump does have the blind support of the Republican Party, after Republican leaders momentarily wavered during the immediate aftermath of the 2021 insurrection, so he does have an institutional base he originally lacked — an institution that has become singularly focused on voter suppression and using all means available to put themselves in a position to overturn election results that don’t go their way. There is indeed here an existential threat to the formal democracy of the United States. History provides no shortage of warnings of what could happen, from Weimar Germany and post-World War 1 Italy to Chile and Argentina in the 1970s.

Fascism is a specific form of dictatorship

First, let’s clarify what the political term fascism means. It does not mean any right-wing movement or politician we don’t like, and shouldn’t be thrown around as such. What it does reference is a specific political phenomenon.

At its most basic level, fascism is a dictatorship established through and maintained with terror on behalf of big business. It has a social base, which provides the support and the terror squads, but which is badly misled since the fascist dictatorship operates decisively against the interest of its social base. Militarism, extreme nationalism, the creation of enemies and scapegoats, and, perhaps the most critical component, a rabid propaganda that intentionally raises panic and hate while disguising its true nature and intentions under the cover of a phony populism, are among the necessary elements.

Despite national differences that result in major differences in the appearances of fascism, the class nature is consistent. Big business is invariably the supporter of fascism, no matter the content of a fascist movement’s rhetoric, and is invariably the beneficiary. Instituting a fascist dictatorship is no easy decision even for the biggest industrialists, bankers and landowners who might salivate over the potential profits. For even if it is intended to benefit them, these big businessmen are giving up some of their own freedom since they will not directly control the dictatorship; it is a dictatorship for them, not by them. It is only under certain conditions that business elites resort to fascism — some form of democratic government, under which citizens “consent” to the ruling structure, is the preferred form and much easier to maintain.

Boston Free Speech rally counter-protesters on August 19, 2017 (photo by GorillaWarfare)

Fascism is instituted when it is no longer possible for capitalists to enjoy the profits they believe they are entitled to, or to put a forceful end to large and rising left-wing movements threatening the power of industrialists and financiers. Neither of these conditions are in place in the United States, and with one party dedicated to using existing legal power to repress working people and giving capitalists all they want, and the other party giving them much of what they want while absorbing and smothering nascent movements, formal democracy works just fine for them. What immediate need do they have of going to the trouble of instituting a dictatorship? (Although some of course would love to have one no matter the circumstances.)

The foregoing does not give us license to be complacent. The economy is fragile, environmental destruction steadily mounts, and the numbers of people willing to oppose capitalism has grown tremendously over the past couple of decades, particularly since the 2008 economic crash. And industrialists and financiers — the bourgeoisie to use the classical term — believe themselves entitled to rule. The most important lesson from studying the fascism of the past is the overwhelming violence they will use to keep themselves in power. (No surprise there, given that violence, slavery, colonialism and plunder established capitalism and has kept it in place ever since.) U.S. capitalists are quite content to have police and the world’s biggest and most well-equipped military at their service, and there has never been much hesitation to use it.

If conditions continue to deteriorate, then Trump (or, more likely, someone with more intelligence and self-control) could be tapped on the shoulder. Trump is hardly the only demagogue out there. It could have happened in the 1930s. In Franklin Delano Roosevelt’s first year as president, a group of bankers and industrialists, backed by financing from DuPont, General Motors and Morgan Bank, hatched a scheme to institute fascism. Wall Street bond salesman Gerald McGuire approached retired Marine Corps General Smedley Butler with an offer for him to be the fascist leader and deliver an ultimatum to Roosevelt to either take orders from businessmen or be forced from office by an army of 500,000 veterans. Their arms were to be supplied by Remington, a DuPont subsidiary.

Butler declined, informed Roosevelt and the plan was defused by leaking it to the press. No one was punished and the coup threat was treated as a joke. Perhaps the coup plotters didn’t do their homework — Butler, in 1929, became the first general officer since the Civil War to be placed under arrest. His crime? Criticizing Benito Mussolini! Butler, summing up his highly decorated career in 1935, said in an interview, “I spent thirty three years and four months [in] the Marine Corps. … [D]uring that period I spent most of my time being a high-class muscle man for Big Business, for Wall Street and for bankers. In short, I was a racketeer for capitalism.”

Don’t confuse form with content

What we shouldn’t get hung up on is appearances. Chilean fascism under Pinochet and the Argentine “Process” took different forms than did the classical German and Italian varieties, and any fascism in the U.S. would have further divergences and would be wrapped in Christian fundamentalism and phony right-wing “populism.” Political culture in North America is such that brownshirts goose-stepping down the street wouldn’t have much appeal, and we need not have that. There were fascist street gangs in Chile and Argentina who did much marauding and received funding, but in those cases the military was the decisive organization. The military and police would almost certainly be decisive in any fascist takeover in the U.S., with crucial support from the right-wing militias that already exist and Trump’s middle-class base that we saw in action at the Capitol during the January 6, 2021, insurrection.

Comparisons of present-day United States to Weimar Germany are easily overstated, but the years leading up to Hitler being handed power (it is a myth that he was elected) are instructive. Consider the full name of the Nazi party — the National Socialist German Workers’ Party. Yet workers were whom the Nazis intended to suppress on behalf of their corporate benefactors. At the same time that Nazi rhetoric claimed to uphold the right to strike and other worker interests, Hitler was assuring Germany’s industrialists that such policies were merely an attempt to gain popular support and would not be implemented.

Mural paintings in honor of Jecar Neghme of Chile’s MIR in the place where he was killed by the Pinochet government. (Credit: Ciberprofe)

What Hitler’s corporate bankrollers wanted was clear enough: the destruction of their workers’ ability to defend themselves and higher profits in a stable atmosphere. This Hitler promised in meetings of Nazi leaders and industrialists. But no matter how powerful they are, numerically these big businessmen are a minuscule portion of the population. How to create popular support for a movement that would destroy unions, strip working people of all protections, regiment all spheres of life, mercilessly destroy several groups of society, reduce the standard of living of those who still had jobs and inevitably lead to war? This is not an appealing program.

Germany’s blue-collar workforce mostly didn’t buy into fascist siren songs, and continued to support the Communists and the Social Democrats, although it was sharply divided between the two. Most of the middle class, however, was a different story. The desperate economic crisis of the Weimar Republic devastated the shopkeeper, the professional, the white-collar worker on the lower rungs of management. The middle class was losing or threatened with losing what it had, and its sons and daughters were unemployed with little or no prospects. From here the Nazis were able to draw their votes, and these sons, along with unpoliticized people at the bottom of society, swelled the ranks of the storm troops.

The Nazis skillfully appealed to German middle class fears of economic dislocation, the increasing numbers of unemployed blue-collar workers, the threat of being swallowed by big business, and political instability (although the Nazis were the most responsible for the last of those four), creating the social base needed by the economic elite to bring its movement to power. A movement that was as anathema to the middle class as it was to the lower economic ranks, although its middle-class supporters were blind to that reality as the Nazis simultaneously appealed to its grudges against societal elites.

In the last election before President Paul von Hindenburg appointed Hitler chancellor, the Nazi vote was 2 million less than the combined vote for Communists and Social Democrats. Although there were many Communists who bravely battled Nazis in the streets, there was no attempt at a united defense of the two parties or their armed followers. The Communists, the Social Democrats and the unions all failed to mount any effective challenge, and the leaders of what remained of Germany’s centrist and nationalist right-wing parties thought they could control Hitler. Had the Communists, Social Democrats and the unions made a common fight against the Nazis, that would have been enough to stop Hitler’s accession to power.

Once in power, Hitler quickly arrested the political opposition, putting Communists, Social Democrats, union leaders and others into concentration camps. Within weeks, the right to strike was abolished, union contracts were canceled and an employer-aligned fascist “union” began to replace the existing unions. With opposition silenced by terror, severe oppression of Jews, Slavs, homosexuals, artists and others began. Once Hitler had destroyed all political opposition, there was no need to maintain his corps of street thugs, some of whom began demanding that the populist promises begin to be fulfilled. The storm troops, too, found out those promises were fantasy and this potential internal Nazi opposition was crushed in the murderous 1934 “Night of the Long Knives.”

From German shopkeepers to U.S. small business owners

Yes, history never repeats exactly. But what is noteworthy here is the class composition of Nazi support beyond big capitalists, who provided huge sums of money. It was shopkeepers, professionals and the white-collar workers on the lower rungs of management. This is consistently the case with fascist movements. It was the middle classes who supported a military overthrow of Chilean President Salvador Allende, as did the parties they voted for. (Both parties of the opposition to President Allende’s Popular Unity government were banned after the takeover; Pinochet’s blood-soaked dictatorship was a régime for Chilean big business and U.S.-based multinational capital, not a régime for shopkeepers or white-collar professionals, nor even big business’ political representatives, as they would soon find out.)

Although the middle classes in a capitalist country, particularly in advanced capitalist countries, are highly heterogeneous, including a wide mix of people with varying interests and thus unable to constitute an organized bloc, the weight of their demographic size can make them decisive if large numbers go one way or another. Large numbers in the U.S. are anti-fascist and/or Democratic Party partisans, and many of their sons and daughters are describing themselves as socialists, even if an ill-defined socialism that is more oriented toward strong reforms of capitalism unable to be accommodated by Democrats. Nonetheless, it is from middle class ranks that support for Trump comes. That has been seen clearly as hundreds of Trump’s insurgents are prosecuted (albeit treated with kid gloves in contrast to the harsh treatment of Black Lives Matter and other left-wing protest movements).

Raleigh-Durham IWW stands with clergy at the stairs to Emancipation Park in Charlottesville, Virginia (photo by Anthony Crider)

The “Tea Party” that arose during the Obama administration was a classic “astroturf” operation, a “movement” that was begun, organized and funded by corporate interests such as the organizations of the Koch Brothers and Republican Party leaders like Dick Armey. It is a straight line from the Tea Party to Trump; they have similar social bases and many of the same financial benefactors.

A study by two University of Chicago researchers, for example, found that more than half of the January 6 insurrectionists held white-collar positions such as small business owners, architects, doctors and lawyers. The two researchers, political-science professor Robert A. Pape and senior research associate Keven Ruby, also found that a large number of the insurrectionists live in counties that have seen declines in their White, non-Hispanic population, also not a surprise given the “great replacement” canard Trump-style fascists are fond of peddling. That of course was a prominent theme in the 2017 fascist rally in Charlottesville, Virginia.

Whatever capitalist country you live in, it can happen there. Fascism is capitalism stripped of all democratic veneers. In every fascist state, wages drastically decline accompanied by draconian laws stripping working people of all protections at the same time that corporate profits rise dramatically, all in an atmosphere of state-organized terror. The only safeguard against this happening in any capitalist country, including the United States, is for working people to organize in their own defense. Given the sorry record of social democracy, no help from there will come to the rescue in Europe. In the U.S., it would be laughable to believe the Democrats would save us from potential Republican dictatorship, whether a conventional authoritarianism or an outright fascist régime.

The long history of Democrats falling to their knees

Democratic Party ineptitude and weak-kneed acquiescence has been on display long before the Biden administration and current congressional majority’s yearlong lack of resolve. From Jimmy Carter’s austerity setting up the start of the neoliberal era for Ronald Reagan to Bill Clinton ramming through regressive legislation that Republicans could only dreamed of having done to Democrats’ meek “me too” in response to Newt Gingrich’s Contract On America and the 1994 Republican takeover of Congress to Barack Obama’s serial capitulations to Democrats’ present inability (unwillingness?) to implement the programs they were elected to fulfill, and instead give the Pentagon another raise, liberals are persistently run over by conservatives. But however weak-willed Democrats are, that is only one side of the picture.

It shouldn’t be forgotten that Democrats believe in so-called “American exceptionalism,” imperialism and corporate control of society just as fervently as do Republicans.

Liberalism has reached an intellectual dead end, however much individual liberals may yearn for alternatives. There are various reasons that can be assigned as to the cause of the Democratic Party’s — and, thus, North American liberalism’s — steady march rightward: Dependence on corporate money, corruption, domination of the mass media by the Right, philosophical and economic myopia, cowardliness. Although these factors form a significant portion of the answer to the puzzle, an underlying cause has to be found in the exhaustion of North American liberalism. Similar to European social democracy, it is trapped by its core desire to stabilize an unstable capitalist system.

In contrast to the Right, which loudly advocates what it stands for and uses all means possible to get it, liberals are caught in the contradiction of knowing changes are needed but unable to put forth anything beyond the most tepid reforms, a bit of tinkering around the edges. The Democratic Party is not only reliant on corporate money, but in thrall to ideologies that promote corporate domination, propaganda blasted across the corporate media and propagated through a thick web of “think tanks” and other well-funded institutions. With no clear ideas to fall back on, they meekly fall to their knees when the world’s industrialists and financiers, acting through their corporations, think tanks and the “market,” pronounce their verdict on what is to be done.

There is no secret formula waiting to be discovered. The only way to prevent a fascist takeover is through the same methodology that is the route to a better world: A mass movement of movements linking together struggles, organizing with people who don’t look like us and uniting across borders. As long as capitalism exists, the threat of fascism exists.