Capitalism is facing a triple-headed crisis


Last February, Torkel Lawson published an article in the “Anti-imperialist Network” entitled “The State of the New Year 2021” in which he discusses a number of features of global capitalism and the challenges it faces at this stage. This article is a summary with a quick reading of the highlights of this paper, which concludes that capitalism suffers from three crises: A financial crisis exacerbated by the cost of confronting Coronavirus, and a political crisis resulting from the decline in the influence of global institutions that were supposed to organize global capitalism due to the intensification of nationalism and competition, and a climate crisis that causes widespread disasters
The year 2020 was marked by uprisings from the Black Lives Matter movement in the United States of America, to anti-neoliberal movements in France, to popular uprisings stemming from economic or political crises, as in Indonesia, Thailand, Lebanon, Iraq, Iran, South Africa, Chile, Argentina, and Bolivia. . The last year also witnessed the intensification of the trade war between the United States of America and China and its transformation into something similar to the Cold War, and then the outbreak of the Covid-19 pandemic in the month of March.


A trillion dollars is the value of total global debt in 2020, which is an increase of 15 trillion dollars over the previous year

The author starts from the dilemma that confronted and continues to be the governmental decision-making centers around the world: close the country to save lives or continue to work to save the economy. Lawson asks: How could politicians – who previously had no money to tackle environmental and social issues – found hundreds of billions of dollars to save the system? Of course, there are answers. First, governments are under pressure from their people, and they may be brought down if they fail to confront the pandemic. Second, the pandemic was so sudden that it did not allow business owners to form lobbies and pressure groups to defend their interests. Third, the virus is highly contagious and moves between borders and countries. However, the paradox presented by the writer is that treating the pandemic with temporary measures such as closure, for example, and if it entails losses on capital, it contributes to saving the system in contrast to addressing the climate issue, for example, which contradicts private ownership and the capitalist mode of production per se. Therefore, it was not strange to see what the author calls “Corona Keynesianism” and not to hear the voices of the neoliberals and their objection to government interference and spending.

The financial crisis
The spending packages to confront the Corona pandemic have caused the total global debt to reach $ 277 trillion, an increase of $ 15 trillion in 2020. This number constitutes 365% of the total global output. Covid-19 was not the cause of the economic crisis. Rather, it may have accelerated or exacerbated some problems in a system in crisis since the 2007-08 financial crisis. The medicine in which the crisis was addressed, at that time, may have prolonged the life of the regime, but it did not treat the problem. Low interest rates have expressed weak profitability of investment opportunities in production, and thus a slowdown in the growth of the real economy. Since 2008, the GDP growth rate of the world’s major economies, excluding China, has been smaller than the average in any decade after World War II. Meanwhile, global debt doubled between 2008 and 2018. This large debt threatens to paralyze the global economy.

One of the features of this period, according to Lawson, is that the forty years of neoliberal globalization governed by American hegemony are being eroded today by the rise of national states in the East and West, North and South. The competition is mainly between the United States, China and Russia. According to a report by the International Monetary Fund, China will account for 51% of the growth of the global economy by 2020-2021 at a time when the American, European, and Japanese economies are in recession. To counter this rise, Trump declared the need for military dominance in space for the United States, withdrew from disarmament agreements and requested a military budget of $ 705 billion for the fiscal year 2021, which the Democrats raised in December to $ 740 billion. The unanimous agreement of Republicans and Democrats in America that China is the main enemy of the United States. But isolating China in the manner of the Cold War with the Soviet Union was no longer possible due to its productive capabilities. Half of the world’s electronics production capacity is located in China. Therefore, the American strategy is based on removing the Chinese Communist Party from power and replacing it with an ally system for the American system. Hence the focus on supporting Hong Kong, which Americans hope, if they succeed in it, will be the starting point and starting point for the spread of liberal democracy to all of China.

The aforementioned rivalry is leading to an increase in imperial vitality based on regional hegemony. There are countries as small as Denmark, which find themselves in the middle of the conflict between the United States, China and Russia. From this angle, American interest in buying Greenland in 2019 should be viewed. Climate change will make shipping routes south and north Greenland strategically important and make their territories an ideal point for launching and tracking ICBMs. The US bid to buy Greenland was rejected, but Denmark is adjusting to the growing US presence. In June 2020, the United States opened a consulate in Nuuk, and US Secretary of State Pompeo visited Denmark in July 2020 to discuss the Greenland issue. In October, the United States, Greenland, and Denmark adopted an agreement on new military initiatives as well as Greenland’s trade and investment programs.
Other US measures are aimed at freezing Chinese investment. The United States offered the Greenland Home Rule government “assistance in evaluating foreign investment.” At the meeting between the United States and the governments of Greenland and Denmark in October 2020, China was on the agenda. The Americans warned Greenland: “… how is China trying to gain a foothold in the Arctic. We indicated that China is not a polar country and Greenland should be aware of this.

Extraction of resources to secure the growth of capital and consumption has deepened the contradiction between the environment and capitalist production mechanisms

Huawei is the largest private Chinese company. It has the best and cheapest 5G technologies. While Nokia of Finland and Ericsson of Sweden are the only two European companies that have 5G technology, experts estimate that they are unable to quickly and cheaply secure Huawei technologies. US companies have banned recording their phone software on Huawei devices. In December 2018, Canada arrested Ming Wanshu, Huawei’s chief financial officer, at the request of the United States on charges of trading with Iran and violating sanctions against it. The United States is also pressing European countries to prevent dealing with Huawei and using its technologies under the pretext of fear of spying for the Chinese state.

Climate crisis
The climate crisis is exacerbating and its consequences are felt today. Extraction of resources to secure the growth of capital and consumption has deepened the contradiction between the environment and capitalist production mechanisms. Over the past 100 years, the United States of America, Canada, Europe, Japan, and Australia have been responsible for 61% of all global carbon dioxide emissions. China and India are responsible for 13%, Russia’s share is 7%, and 15% for the rest of the world. This huge disparity in the share of emissions is accentuated if we take into account where goods are consumed rather than where they are produced. For example, China is the world’s largest producer of industrial goods, but China is the world’s largest exporter of these goods as well, especially to the United States of America, Western Europe and Japan. Therefore, consumers in these countries are also responsible for a large portion of China’s share of carbon dioxide emissions.
The imperialist division of the world into commodity-producing economies in the “South” and consumer economies in the “North” has led to the displacement and intensification of air, water and soil pollution in the Global South. As a result, the consequences of climate change such as hurricanes, droughts and floods are more in the poor parts of the world than in the rich countries. According to the author, there is no possibility of solving the environmental issue and climate problems apart from the question of imperialism.

Trigeminal crisis
The author concludes that capitalism faces three crises: A financial crisis exacerbated by the cost of confronting the Corona. political crisis; Whereas, the global institutions that were supposed to organize global capitalism diminish their influence due to the intensification of nationalism and competition. Climate crisis causes large-scale disasters.
The author also concludes that the common denominator of the uprisings that we are witnessing around the world also is the lack of a vision of what society wants as an alternative to the status quo, as well as the strategies and organization to achieve this goal. Social media helps to communicate dissatisfaction and dissatisfaction, but it is struggling to push the protests beyond the street demonstrations.

Subscribe to «News» on YouTube Here

Continued «Capital» on Instagram


Please enter your comment!
Please enter your name here