Posted to lowwagecapitalism.com on July 26, 2019.

Part 1

By Fred Goldstein

During the Cold War and the struggle that put the USSR and China on one side and imperialism headed by Washington on the other side, revolutionaries used to characterize the conflict as a class war between two irreconcilable social systems. 

There was the socialist camp, based upon socialized property, economic planning for human need and the government monopoly of foreign trade on the USSR-China side, and capitalism, a system of production for profit, on the other. 

That the two systems were irreconcilable was at the bottom of the conflict dubbed the Cold War. In light of the current sharpening economic, diplomatic, political and military conflict between U.S. imperialism and the People’s Republic of China (PRC), it is time to revive the concepts that were applied during the height of the Cold War.

Of course it is necessary to make modifications in these formulations with respect to socialism in China, with its mix of controlled capitalism and guided socialism.  Nevertheless, the conflict between imperialist capitalism, headed by Washington, Wall Street and the Pentagon, and the Chinese socialist economic system, which has state-owned industry at its core and planned economic guidance, is becoming much sharper, and imperialism is growing more openly hostile. 

U.S. imperialism’s long-standing effort to overthrow socialism  in China, Chinese capitalism notwithstanding, has been concealed beneath sugary bourgeois phrases about so-called “common interests” and “economic collaboration.”  But this kind of talk is coming to an end.

Washington’s first campaign to overthrow China — 1949-1975

This struggle has been ongoing since 1949 when the Chinese Red Army drove U.S. puppet Chiang-Kai Shek and his nationalist army from the mainland as it retreated to Taiwan under the protection of the Pentagon. 

The conflict continued through the Korean War when General Douglas MacArthur and the U.S. high command drove the U.S. troops to the Chinese border and threatened atomic war. Only the defeat of the U.S. military by the heroic Korean people under the leadership of Kim Il Sung, with the aid of the Chinese Red Army, stopped the U.S. invasion of China.

The struggle further continued with the U.S. war against Vietnam, whose strategic goal was to overthrow the socialist government of Vietnam in the north and drive to the border of China and to complete the military encirclement of the PRC. Only the world-historic efforts of the Vietnamese people under the leadership of Ho Chi Minh stopped the Pentagon in its tracks.

The Pentagon’s plans for military conquest failed 

With the rise of Deng Xiaoping and the opening up of China to foreign investment beginning in December 1978, Wall Street began to reevaluate its strategy. The U.S. ruling class began to take advantage of the opening up of China to foreign investment and the permission for private capitalism to function, which could both enrich U.S. corporations in the massive Chinese market and at the same time penetrate the Chinese economy with a long-range view to overturning socialism. 

U.S. multinational corporations set up operations in China, hiring millions of low-wage Chinese workers, who flocked to the coastal cities from the rural areas. These operations were part of a broader effort by the U.S. capitalists to set up low-wage global supply chains that integrated the Chinese economy into the world capitalist market. The U.S.’s recent sharp turn aimed at breaking up this economic integration with the Chinese economy, including the witch hunt against Chinese scientists and the U.S. Navy’s aggressive behavior in the South China Sea (called the Eastern Sea by Vietnam), is an admission that the economic phase of the U.S. attempt to bring counterrevolution to China has failed. 

China is now a growing counterweight to Washington in international economics, high technology,  diplomacy, and regional military might in the Pacific, which the Pentagon has always considered to be a “U.S. lake” ruled by the Seventh Fleet.

The attack on Huawei

A dramatic illustration of the developing antagonisms is the way the U.S. had Meng Wanzhou, the deputy chairwoman and chief financial officer of Huawei, arrested in Canada for supposed violations of U.S. sanctions against Iran — an outrageous example of imperialism exercising extraterritoriality. The Trump administration has also leveled sanctions against Huawei electronics, the world’s largest supplier of  high-tech operating systems in the world. Huawei employs 180,000 workers and is the second largest cell phone manufacturer in the world after the south Korean-based Samsung. The sanctions are part of the U.S. campaign to stifle China’s development of the latest version of data-transmission technology known as Fifth Generation or 5G. 

The Trump administration has barred U.S. companies from selling supplies to Huawei, which has been using Google’s Android operating system for its equipment and Microsoft for its laptop products − both U.S.-based companies. Huawei is contesting the U.S. ban in court. 

Meanwhile, as a backup plan in case Washington bans all access to Android and Microsoft, Huawei has quietly spent years building up an operating system of its own. Huawei developed its alternative operating system after a 2012 finding by Washington that Huawei and ZTE, another Chinese giant cell phone maker, were in criminal violation of U.S.“national security.” ZTE was forced to shut down for four months. (South Asia Morning Post, March 24, 2019)

But the conflict is about more than just Huawei and ZTE.

The new ‘red scare’ in Washington

The New York Times of July 20 carried a front page article entitled, “The New Red Scare in Washington.” A few excerpts give the flavor: 

“In a ballroom across from the Capitol building, an unlikely group of military hawks, populist crusaders, Chinese Muslim freedom fighters and followers of the Falun Gong has been meeting to warn anyone who will listen that China poses an existential threat to the United States that will not end until the Communist Party is overthrown.

“If the warnings sound straight out of the Cold War, they are. The Committee on the Present Danger, a long-defunct group that campaigned against the dangers of the Soviet Union in the 1970s and 1980s, has recently been revived with the help of Stephen K. Bannon, the president’s former chief strategist, to warn against the dangers of China.

“Once dismissed as xenophobes and fringe elements, the group’s members are finding their views increasingly embraced in President Trump’s Washington, where skepticism and mistrust of China have taken hold. Fear of China has spread across the government, from the White House to Congress to federal agencies….” 

The Trump administration has opened up a tariff war against the PRC, imposing a 25-percent tariff on $250 billion worth of Chinese exports and threatening tariffs on another $300 billion. But there is much more to Washington’s campaign than just tariffs.

The FBI and officials from the NSC (National Security Council) have been conducting a witch hunt, continues the Times article, “particularly at universities and research institutions. Officials from the FBI and the National Security Council have been dispatched to Ivy League universities to warn administrators to be vigilant against Chinese students…” 

And according to the Times there are concerns that this witch hunt “is stoking a new red scare, fueling discrimination against students, scientists and companies with ties to China and risking the collapse of a fraught but deeply enmeshed trade relationship between the world’s two largest economies.” (New York Times, July 20, 2019)

FBI criminalizes cancer research

According to a major article in the June 13, 2019 Bloomberg News, “Ways of working that have long been encouraged by the NIH [National Institute of Health] and many research institutions, particularly MD Anderson [a major cancer treatment center and research institute in Houston], are now quasi-criminalized, with FBI agents reading private emails, stopping Chinese scientists at airports, and visiting people’s homes to ask about their loyalty.

“Xifeng Wu, who has been investigated by the FBI, joined MD Anderson while in graduate school and gained renown for creating several so-called study cohorts with data amassed from hundreds of thousands of patients in Asia and the U.S. The cohorts, which combine patient histories with personal biomarkers such as DNA characteristics and treatment descriptions, outcomes, and even lifestyle habits, are a gold mine for researchers.

“She was branded an oncological double agent.” 

The underlying accusation against Chinese scientists in the U.S. is that their research can lead to patentable medicines or cures, which in turn can be sold at enormous profits.

The Bloomberg article continues, “In recent decades, cancer research has become increasingly globalized, with scientists around the world pooling data and ideas to jointly study a disease that kills almost 10 million people a year. International collaborations are an intrinsic part of the U.S. National Cancer Institute’s Moonshot program, the government’s $1 billion blitz to double the pace of treatment discoveries by 2022. One of the program’s tag lines is: ‘Cancer knows no borders.’

“Except, it turns out, the borders around China. In January, Wu, an award-winning epidemiologist and naturalized American citizen, quietly stepped down as director of the Center for Public Health and Translational Genomics at the University of Texas MD Anderson Cancer Center after a three-month investigation into her professional ties in China. Wu’s resignation, and the departures in recent months of three other top Chinese-American scientists from Houston-based MD Anderson, stem from a Trump administration drive to counter Chinese influence at U.S. research institutions …The collateral effect, however, is to stymie basic science, the foundational research that underlies new medical treatments. Everything is commodified in the economic cold war with China, including the struggle to find a cure for cancer.” 

Big surprise. A world famous Chinese epidemiologist, trying to find a cure for cancer, collaborates with scientists in China! 

Looking for the “reformers” and the counterrevolution

For decades the Chinese Communist Party has had changes of leadership every five years. These changes have been stable and managed peacefully. With each changeover, so-called “China experts” in the State Department, in Washington think tanks and U.S. universities have predicted the coming to power of a new “reformist” wing that will deepen capitalist reforms and lay the basis for an eventual full-scale capitalist counterrevolution. 

To be sure, there has been a steady erosion of China’s socialist institutions. The “iron rice bowl” which guaranteed a living to Chinese workers has been eliminated in private enterprises. Numerous state factories and enterprises have been sold off to the detriment of the workers, and in the rural areas land was decollectivized.

One of the biggest setbacks for socialism in China and one which truly gladdened the hearts of the prophets of counterrevolution, was the decision by the Jiang Jemin CCP leadership to allow capitalists into the Chinese Communist Party in 2001.

As the New York Times wrote at the time, “This decision raises the possibility of Communists co-opting capitalists — or of capitalists co-opting the party.”  (New York Times, Aug. 13, 2001) It was the latter part that the capitalist class has been looking forward to and striving for with fervent anticipation for almost four decades.

But on balance, this capitalist takeover has not materialized. Chinese socialism, despite the capitalist inroads into the economy, has proved far more durable than Washington ever imagined. 

And, under the Xi Jinping leadership, the counterrevolution seems to be getting further and further away. It is not that Xi Jinping has become a revolutionary internationalist and a champion of proletarian control. But it has become apparent that China’s status in the world is completely connected to its social and economic planning. 

Part 2: The New Cold War Against China

China’s planning and state enterprises overcame 2007-2009 world capitalist crisis

Without state planning in the economy China might have been dragged down by the 2007-2009 economic crisis. In June 2013 this author wrote an article entitled, “Marxism and the Social Character of China.” Here are some excerpts:

“More than 20 million Chinese workers lost their jobs in a very short time. So what did the Chinese government do?”

The article quoted Nicholas Lardy, a bourgeois China expert from the prestigious Peterson Institute for International Economics and no friend of China. (The full article by Lardy can be found in “Sustaining China’s Economic Growth after the Global Financial Crisis,” Kindle Locations 664-666, Peterson Institute for International Economics.)

Lardy described how “consumption in China actually grew during the crisis of 2008-09, wages went up, and the government created enough jobs to compensate for the layoffs caused by the global crisis,” this author’s emphasis.

Lardy continued: “In a year in which GDP expansion [in China] was the slowest in almost a decade, how could consumption growth in 2009 have been so strong in relative terms? How could this happen at a time when employment in export-oriented industries was collapsing, with a survey conducted by the Ministry of Agriculture reporting the loss of 20 million jobs in export manufacturing centers along the southeast coast, notably in Guangdong Province? The relatively strong growth of consumption in 2009 is explained by several factors.

“First, the boom in investment, particularly in construction activities, appears to have generated additional employment sufficient to offset a very large portion of the job losses in the export sector. For the year as a whole the Chinese economy created 11.02 million jobs in urban areas, very nearly matching the 11.13 million urban jobs created in 2008.

“Second, while the growth of employment slowed slightly, wages continued to rise. In nominal terms wages in the formal sector rose 12 percent, a few percentage points below the average of the previous five years (National Bureau of Statistics of China 2010f, 131). In real terms the increase was almost 13 percent.

“Third, the government continued its programs of increasing payments to those drawing pensions and raising transfer payments to China’s lowest-income residents. Monthly pension payments for enterprise retirees increased by RMB120, or 10 percent, in January 2009, substantially more than the 5.9 percent increase in consumer prices in 2008. This raised the total payments to retirees by about RMB75 billion. The Ministry of Civil Affairs raised transfer payments to about 70 million of China’s lowest-income citizens by a third, for an increase of RMB20 billion in 2009 (Ministry of Civil Affairs 2010).”

Lardy further explained that the Ministry of Railroads introduced eight specific plans, to be completed in 2020, to be implemented in the crisis.
According to Lardy, the World Bank called it “perhaps the biggest single planned program of passenger rail investment there has ever been in one country.” In addition, ultrahigh-voltage grid projects were undertaken, among other advances.

Socialist structures reversed collapse

So income went up, consumption went up and unemployment was overcome in China — all while the capitalist world was still mired in mass unemployment, austerity, recession, stagnation, slow growth and increasing poverty, and still is to a large extent.

The reversal of the effects of the crisis in China is the direct result of national planning, state-owned enterprises, state-owned banking and the policy decisions of the Chinese Communist Party.

There was a crisis in China, and it was caused by the world capitalist crisis. The question was which principle would prevail in the face of mass unemployment — the rational, humane principle of planning or the ruthless capitalist market. In China the planning principle, the conscious element, took precedence over the anarchy of production brought about by the laws of the market and the law of labor value in the capitalist countries.

Socialism and China’s standing in the world

China has lifted hundreds of millions of people out of poverty. According to a United Nations report, China alone is responsible for the global decline in poverty. China’s universities have graduated millions of engineers, scientists, technicians and has allowed millions of peasants to enter the modern world.

Made in China 2025

In 2015 Xi Jingping and the Chinese CP leadership laid out the equivalent of a ten-year plan to take China to a higher level of technology and productivity in the struggle to modernize the country. 

Xi announced a long-range industrial policy backed by hundreds of billions of dollars in both state and private investment to revitalize China. It is named Made in China 2025 or MIC25. It is an ambitious project requiring local, regional and national coordination and participation.

The Mercator Institute for Economics (MERICS) is one of the most authoritative German think tanks on China. It wrote a major report on MIC25 on Feb. 7, 2019. According to MERICS,  “The MIC25 program is here to stay and, just like the GDP targets of the past, represents the CCP’s official marching orders for an ambitious industrial upgrading. Capitalist economies around the globe will have to face this strategic offensive.

“The tables have already started to turn: Today, China is setting the pace in many emerging technologies – and watches as the world tries to keep pace.”

The MERICS report continues, “China has forged ahead in fields such as next-generation IT (companies like Huawei and ZTE are set to gain global dominance in the roll-out of 5G networks), high-speed railways and ultra-high voltage electricity transmissions. More than 530 smart manufacturing industrial parks have popped up in China. Many focus on big data (21 percent), new materials (17 percent) and cloud computing (13 percent). Recently, green manufacturing and the creation of an “Industrial Internet” were given special emphasis in policy documents, underpinning President Xi Jinping’s vision of creating an ‘ecological civilization’ that thrives on sustainable development.

“China has also secured a strong position in areas such as Artificial Intelligence (AI), new energy and intelligent connected vehicles… 

“Chinese state-owned enterprises (SOEs) continue to play a critical role for the development of strategic industries and high-tech equipment associated with MIC25. In so-called key industries like telecommunications, ship building, aviation and high-speed railways, SOEs still have a revenue share of around 83 percent. In what the Chinese government has identified as pillar industries (for instance electronics, equipment manufacturing, or automotive) it amounts to 45 percent.”

Breakup of U.S.-China relationship inevitable

The tariff war between the U.S. and China has been going back and forth. It may or may not be resolved for now or may end up in a compromise. The Pentagon’s provocations in the South China Sea and the Pacific are unlikely to subside. The witch hunt against Chinese scientists is gaining momentum. 

The U.S. has just appropriated $2.2 billion for arms to Taiwan. National Security Adviser and war-hawk John Bolton recently made a trip to Taiwan. The president of Taiwan, Tsai Ing-wen, made a recent stopover in the U.S. on the way to the Caribbean and is scheduled to make another one on the way back.

All these measures indicate the end of rapprochement between Beijing and Washington. This breakup between the two powers is not just the doing of Donald Trump. It flows from the growing fear of the predominant sections of the U.S. ruling class that the gamble they took in trying to overthrow Chinese socialism from within has failed, just as the previous military aggression from 1949 to 1975 also failed.

High technology is the key to the future 

Since as far back as the end of the 18th century the U.S. capitalist class has always coveted the Chinese market. The giant capitalist monopolies went charging in to get joint agreements, low wages, cheap exports and big super-profits when China “opened up” at the end of the 1970s.  

But the stronger the socialist core of the PRC becomes, the more weight it carries in the world and, above all, the stronger China becomes technologically the more Wall Street fears for its economic dominance and the more the Pentagon fears for its military dominance. 

The example of the stifling of international collaboration on cancer research is a demonstration of how global cooperation is essential to not only curing disease, but also to the development of society as a whole. International cooperation is needed to reverse the climate disaster wrought by private property — none of this can be carried out within the framework of private property and the profit system. Only the destruction of capitalism can bring about the liberation of humanity. 

Marxism asserts that society advances through the development of the productive forces from primary communism, to slavery, feudalism and capitalism. Marx wrote: “The hand-mill gives you society with the feudal lord; the steam-mill society with the industrial capitalist.” (The Poverty of Philosophy, 1847) And now the revolution in high technology lays the basis for international socialism.  

The bourgeoisie knows that the society that can advance technology to the highest degree will be triumphant in shaping the future. This is why imperialism, headed by the U.S., imposed the strictest blockade of the flow of technology to the Soviet Union, as well as the Eastern Bloc and China. This was done by COCOM, an informal organization of all the imperialist countries, which was created in 1949 and headquartered in Paris.

The main targets were the USSR and the more industrialized socialist countries, such as the German Democratic Republic, the Czech Republic, etc. Detailed lists were drawn up of some 1,500 technological items that were forbidden to export to these countries.

Marx explained that developed socialist relations depend upon a high degree of the productivity of labor and the resulting abundance available to the population (Critique of the Gotha Program, 1875). However, as Lenin noted, the chain of imperialism broke at its weakest link in Russia — that is, the revolution was successful in the poorest, most backward  capitalist country. The result was that an advanced social system was established on an insufficient material foundation. This gave rise to many, many contradictions. The countries that revolutionaries correctly called socialist, were in fact really aspiring to socialism. Their revolutions laid the foundations for socialism. But imperialist blockade, war and subversion never allowed them to freely develop their social systems.

The great leap forward in technology in China today has the potential of raising  the productivity of labor and strengthening the socialist foundations. It is this great leap forward that is fueling the “new cold war” with China and the real threat of hot war. 

Published on lowwagecapitalism.com website, July 7, 2019.

By Fred Goldstein

The Trump administration is caught between its “America First” super-imperialist, great power chauvinist politics on the one hand, and the capitalist world division of labor on the other hand. 

At every turn the contradiction between capitalist private property and world-wide socialized production becomes an obstacle to capitalism itself. In particular, the global interests of U.S. imperialism and the global economic structure of world capitalism today sharply contradict the Trump administration’s political goals.

Trump and his minions want to overturn the political and economic structure built up by the U.S. capitalist class in the past century. They want to realign the relationship of forces in a way that further subordinates the imperialist rivals and economic satellites of Washington and Wall Street. 

Trump has taken aim at Germany, France, Britain, and the entire European Union, Japan and China, as well as Canada (a minor imperialist country), Mexico, India, Turkey, Indonesia, and Thailand, among others. China is a special case which will have to be dealt with in a separate article.

Globalization and the socialization of production

The term “globalization” is a useful geographical designation of how workers produce goods and services, that is, commodities, today. It is highly descriptive since production of a single commodity takes place in sequence in different parts of the globe. However, from a Marxist point of view, the more scientific economic designation is the socialization of the productive forces on a global basis.

The capitalist class has forced the world working class into a vast, involuntary division of labor in which workers must cooperate, on pain of losing their means of survival, to produce the world’s commodities. But the economic surplus, the surplus value that arises from these global production chains of exploitation is reaped by the bosses. Even the workers who have jobs are left with barely enough to live on. 

Global chains of exploitation are a modern form of the socialization of production carried on within the framework of private property!

Thus, as Trump proceeds with his economic wrecking ball, he is up against the fundamental contradiction of capitalism — the contradiction between socialized production and private property. Friedrich Engels, a co-founder of Marxism, along with Karl Marx, explained this at the dawn of modern capitalism in his classical work “Socialism: Utopian and Scientific” (published in 1880, excerpted from his more extensive book, Anti-Duhring, published in 1878):

“This contradiction, which gives to the new mode of production its capitalistic character, contains the germ of the whole of the social antagonisms of today. The greater the mastery obtained by the new mode of production over all important fields of production and in all manufacturing countries, the more it reduced individual production to an insignificant residuum, the more clearly was brought out the incompatibility of socialized production with capitalistic appropriation.”

Tariffs: Trump’s blunt instrument

Today Trump is using tariffs as a blunt instrument to bully countries around the world to hand over their profits to U.S. capitalism. 

What are tariffs? In the imperialist era they are a tax levied on imports by a capitalist class in one country in the struggle against its rivals. The country upon which the taxes are levied suffers a decline in exports and the government of the country levying the tariffs collects the tariffs/taxes in its treasury. 

From a working class point of view, tariffs must be seen in the same light as automation. Like automation, tariffs are part of the world competition between capitalists. Tariffs, like automation, is a tool by which the capitalists fight each other in the world market. 

But this fight is carried on at the expense not just of capitalist rivals, but also at the expense of the working class. Workers in the country that has tariffs levied on it loses jobs because this country’s exports decline. Workers in the country that levies tariffs pay higher prices because the importing capitalists pass on their extra costs to the workers. 

Usually tariffs are met by counter-tariffs. So in a tariff war between the bosses, as in any war, the workers are the real casualties. 

‘Globalization’ and the complexity of socialized production

In his tariff campaign Trump is running afoul of imperialist globalization at every turn; his actions have provoked retaliation from capitalists.The threat, later withdrawn, to levy tariffs on Mexico to get political leverage in his racist struggle against immigrants is a case in point. 

Trump threatened to put a 5 percent tariff on Mexican goods and to raise the tariff another 5 percent every month up to 25 percent if the Mexican government failed to prevent immigrants from crossing the border into the United States.

According to Burgess Everett and James Arkin of Politico, at a closed-door lunch with Senate Republicans earlier this week, “White House deputy counsel Pat Philbin and Assistant Attorney General Steve Engel faced brutal push-back from the GOP, according to multiple senators, with some threatening that Trump could actually face a veto-proof majority to overturn the tariffs.” (Politico June 5, 2019)

If the Republican Trump loyalists in the Senate rebelled against their leader, it’s because the capitalist donors dug in against this. Mexico exports $345 billion to the U.S., much of it automobiles, automobile parts, agricultural products, clothing, etc. 

Other examples of the intricate and interwoven nature of global supply chains apply to Japan and Canada as well.

The Japan Automobile Manufacturers Association (JAMA) says about 8 percent of its members’ total annual sales are built in and imported from Mexico by way of U.S. railways, making them susceptible to the tariffs. JAMA represents Japanese exporters, manufacturers and importers in Canada. It represents Toyota, Honda, Nissan, Mazda, Mitsubishi and Subaru. 

Canada’s largest auto supplier, Magna International, has 32 manufacturing and assembly plants in Mexico, where it employs 29,175 people — more than in either Canada or the United States. (Automotive News, Canada, June 5, 2019)

A number of Japanese firms have their production bases in Mexico. Honda Motor Co., for instance, exported around 120,000 vehicles made in Mexico to the United States in 2018, accounting for around 80 percent of the cars it produces in Mexico, which is also home to large assembly plants owned by Toyota Motor Corp., Nissan Motor Co. and Mazda Motor Corp. (Japan Times, May 31, 2019) 

There are over 700 Japanese companies employing thousands of workers in Mexico. So Trump could also trigger a trade war with Japan because of his threatened Mexican tariffs.

The bosses experienced Trump’s threat against Mexico a threat against them. The Chamber of Commerce threatened the administration with a lawsuit. And the monopoly donors to the Republican Party told the U.S. Senate that they did not want a tariff war with Mexico and Canada.

The tariffs campaign was part of Trump’s reelection bid. Trump is desperate to get reelected and avoid prosecution by the various court jurisdictions that may bring charges against him. In his desperation, Trump ignored the complexity of the U.S. ruling class’s broader economic problem. 

Trade fight with EU and Asia

The United States is also intensifying its trade fight with the European Union over aircraft subsidies. Washington has proposed additional tariffs on EU goods worth $4 billion along with another $21 billion in tariffs it is demanding for European Airbus planes.

The tariffs, announced on July 1 by the United States Trade Representative, cover 89 products including meat, cheese, pasta, fruits, coffee and whiskey. They could be added to a list of EU Airbus exports that the U.S. Trade Representative (USTR) said in April would be subject to tariffs.

General System of Preferences (GPS) status exempts 3,500 items from U.S. tariffs. GPS status is meant for formerly oppressed and colonial countries, designated as “underdeveloped.”

In its struggle against Asia, the Trump administration has threatened to remove the (GPS) status from India, Thailand and Indonesia. Turkey has already lost its GPS status. 

U.S. dairy producers took aim at India and Indonesia, while pork producers targeted Thailand. Medical device manufacturers also filed a petition to exclude India from receiving preferential treatment from the U.S. 

All elements of the U.S. ruling class know that they have a compliant friend in the White House who will do their bidding for the most part, even if at times they have to buck him in the Senate or in the courts. They have reaped the benefits of his corporate tax cuts, deregulation campaign, and land giveaway policies for the energy, mining and timber industries.

With the trade war, the Trump administration is striking out in all directions to put economic pressure on the entire capitalist class world-wide. Its goal is to increase the domination of the U.S. imperialist monopolies.

The contradiction of socialized production vs. private appropriation

The contradiction between the socialized character of production and the private appropriation of the products of labor was emphasized by Vladimir Lenin in State and Revolution, which was written in preparation for the Russian Revolution of 1917. 

Lenin explained that imperialism was the stage of capitalism that would lead to socialism. Bourgeois economists at the time were evading the nature of imperialism by reducing it to the “interlocking” of corporations. Lenin answered:

“Skilled labor is monopolised, the best engineers are engaged; the means of transport are captured—railways in America, shipping companies in Europe and America. Capitalism in its imperialist stage leads directly to the most comprehensive socialisation of production; it, so to speak, drags the capitalists, against their will and consciousness, into some sort of a new social order, a transitional one from complete free competition to complete socialisation.

“Production becomes social, but appropriation remains private. The social means of production remain the private property of a few. The general framework of formally recognised free competition remains, and the yoke of a few monopolists on the rest of the population becomes a hundred times heavier, more burdensome and intolerable.” 

Fast forward to the 21st century. In 2005 New York Times columnist Thomas Friedman wrote about how his Dell computer was made, describing in great detail how workers spread across numerous countries in Asia contributed to its production. He summed up his findings:

“‘The total ‘supply chain’ for this computer, including suppliers of suppliers, came to about 400 companies in North America, Europe, and Asia, mostly the latter, with about thirty prime suppliers.” (The World Is Flat, Freidman, 2005, cited in Low-Wage Capitalism, Goldstein, 2008)

This author described these supply chains in Marxist terms in Low-Wage Capitalism (2008) as follows: “These so-called supply chains, which are really chains of exploitation spread throughout the globe by the giant monopolies, in partnership with finance capital are the business model for all the global capitalists. And the lesser capitalists fit themselves into this framework.” 

Capitalism is becoming an obstacle to the survival of the masses

The increasing inequality of wealth in the U.S. is something that the capitalists and financiers are deliriously happy about. That is why Donald Trump and the Republican National Committee raised  $105 million in the last quarter for his reelection bid.

That is why the capitalist media gave Trump a billion dollars worth of free media publicity in 2016 and why they continue to give the widest possible coverage to his every tweet. They care nothing about Trump’s cruelty to immigrants and their children;  his enabling and accelerating environmental and planetary destruction; his work, every day in every way, to transform the political structure of capitalism in a right-wing, authoritarian direction.   

The U.S. working class is an integral part of the world-wide socialized labor force. Through its hands pass much of the world’s wealth. However, almost none of that wealth stays in the hands of the working class; the lion’s share goes to the exploiting class. 

Sooner or later this fact is going to reach the consciousness of the masses. Sooner or later they will not be able to go on in the old way, suffering the deceptions of the bosses, their politicians in both parties, and the capitalist media. Capitalism is becoming an obstacle to the survival of the workers and oppressed. That obstacle must be removed.

In the long run, no trade war or imposition of tariffs can change the fundamental contradictions of capitalism or stave off its inevitable collapse.

Part 1:

By Fred Goldstein posted on December 4, 2018.

The following is the first part of an exchange between Fred Goldstein and Manuel Raposo, a left-wing Portuguese communist and editor of the web magazine Mudar de Vida (jornalmudardevida.net).

Fred Goldstein: Your question goes to the heart of a very important issue. Is the Donald Trump presidency a temporary phenomenon, or is his regime a symptom of a deeper malady in the organism of imperialism? Will things go back to “normal” once he is gone?

I have been thinking about this very question a lot. I have also been trying to arrive at a method by which to answer it.

First, I put the Trump victory in the context of the rise of political reaction in Europe and its decidedly anti-immigrant, racist emphasis, similar to Trump’s.

It cannot just be coincidental that the AfD in Germany, the Freedom Party in Austria, the Viktor Orbán regime in Hungary, the right-wing government in Poland, the Brexit forces in Britain, the new right-wing coalition in Italy, the National Rally (formerly National Front) in France are all on the rise at the same time. We also see the recent gains by the anti-immigrant Sweden Democratic Party, the rise of Golden Dawn in Greece (an advanced version of Hitler-like forces) and other right-wing political manifestations in Europe.

Second, I think that the general crisis of protracted capitalist stagnation has caused sections of the ruling class on both sides of the Atlantic to move toward adopting a strongly reactionary option: They will use “divide and conquer” because they see no way out of their own crisis — that is, they do not see any significant renewed growth or revived capitalist prosperity in the future. They are all struggling to just stay afloat.

This is true for sections of the U.S. ruling class which have relied on tax cuts, deregulation of environmental protections and stock market speculation to bolster their profits. This class is acting like its situation is precarious and its members anticipate an economic collapse.

Third, the working classes in all the European countries, like the workers and the oppressed in the U.S., have all been subjected to the trauma of austerity early on, BEFORE the immigrant crisis struck Europe in full force.

In the U.S. there is no large influx of immigrants. In fact, there is a net outflow of migrants on the militarized southern border now. I think that the demoralized, alienated sections of the petty bourgeoisie and working class were predisposed to shift to the right after the failure of the Democratic Party and of European social democracy to come to their aid during the economic crisis of 2008, BEFORE the immigrant crisis.

The failure of social democracy and the historical communist parties to take an aggressive, class-conscious, class-struggle approach to fighting austerity left the masses open to a right-wing, anti-immigrant appeal.

Fourth, the right wing of the ruling classes — which are growing stronger and richer — are tempted to stoke the flames of anti-immigrant racism or are growing more comfortable with it. They mildly protest the more extreme anti-immigrant measures, but in the end the bosses are only truly concerned with the availability of a labor force and the impact of immigration policy on their international relations.

Finally, capitalism at a dead end forecloses the possibility of reviving capitalist prosperity. And capitalist democracy depends upon imperialist prosperity.

The bosses in the wealthy imperialist countries were able to afford a more developed form of capitalist democracy in the post-World War II period — that is, to buy off the discontented workers with crumbs.

The British imperialists were able to have their “democracy” when they had a world empire. Once the empire was lost, the British working class was subjected to Thatcherite austerity and now they have the Brexit forces in charge.

The French imperialists had their republics based upon having a lesser empire in Southeast Asia, Africa and the Caribbean. Now they have the growing right-wing orientation of President Emmanuel Macron, with the National Rally party breathing down the necks of the so-called “moderate” bourgeoisie.

And U.S. imperialism constructed a bourgeois democracy on the basis of having established itself as a world power during and after World War I and having taken over large parts of the British and the French empires out of the ashes of WWII. The bosses attained world imperialist supremacy. On that basis they were able to make concessions.

Cannot revive imperialist prosperity

While Wall Street and the Pentagon are still the dominant imperialist power, they cannot revive imperialist prosperity, which is the economic foundation of capitalist democracy. This is the fundamental point about the future after Trump. Capitalist democracy requires imperialist prosperity to finance it. Capitalist democracy in its more vigorous sense must be funded by concessions. This is true not only in the oppressed countries, but also in the big capitalist countries.

The Trump regime may be a distorted form of capitalist reaction, peculiarly shaped by Trump’s style and personality. But whatever the peculiarities of the Trump regime — and there are many — the underlying reaction that he has stoked and consolidated is not going away anytime soon.

The reaction may be slowed down somewhat if the ruling class removes him. There may be a temporary respite if he is driven out or defeated at the polls. But in the long run, capitalism is in a stage of decline, stagnation and austerity.

The only thing that can push back the reaction in the U.S. is the awakening of the proletariat and the oppressed. No one knows when this will happen or how it will develop. But then no one knew that the tremendous teachers’ strikes were coming. These strikes spread like a wildfire from West Virginia to Kentucky, to Oklahoma, to Arizona, to Colorado, to North Carolina.

These strikes took everyone by surprise — the ruling class, the labor bureaucracy, the educational establishment — and the educational workers, who were organized despite the resistance of the government and the union leadership. All the strikes were technically illegal, but the ruling class wisely decided not to enforce the law. This showed in a microcosm what the working class is capable of when pushed to the wall.

The teachers’ struggle has died down for now. But the resentment, the poverty and privation that drove it to burst the bounds of bourgeois legality and conventional subservience to the higher-ups is spreading below.

Marxism has nothing in common with economic determinism. It recognizes that many factors affect political outcomes. Leaders, parties, financial institutions, historical and cultural traditions, natural disasters, etc., all must be taken into consideration.

In the long run, however, Marxism regards the economic factor as the dominant factor. The crisis of capitalist austerity is determining the growth of political reaction, and this reaction must be fought tooth and nail by the workers and the oppressed. History is made by the inevitable awakening of the masses.

This is the hope to turn things around.

By Fred Goldstein posted on September 1, 2018.

This is the 50th anniversary of the massive street struggles in 1968 during the Democratic National Convention. We reprint here an article by Fred Goldstein from the Workers World of Sept. 13, 1968.

The violence openly inflicted on liberals and radicals alike at the Chicago Democratic Convention confirms that the U.S. ruling class is entering a new phase in which their reliance upon deception is to be increasingly abandoned in favor of the use of force. The use of violence against the white population (after centuries against the Black) is part of the preparations for stepped-up attacks on the oppressed people around the globe.

All attempts to place the responsibility on the insignificant hired thug of the bosses, [Chicago] Mayor Richard Daley, are calculated to mask this fundamental shift.

Thousands of U.S. troops, tanks, jeeps, and all the other necessities of combat cannot be shifted around the country at the cost of creating great political unrest (to say nothing of the expense) on the say-so of such a relatively low-ranking political stooge as Daley. Nor can National Guard troops be called upon by a mayor.

For that matter, the Chicago Police Department would never dare to “mar the image” of the entire Democratic Party unless it had received explicit orders from the party hierarchy to crack heads. The White House, the Pentagon, the Democratic National Committee and the entire capitalist establishment were all involved in the Chicago operation.

In short, Mayor Daley was working for the ruling class and not they for him, as the bourgeois news media imply when they either condemn or condone “Daley’s handling” of the fascist attack on anti-war protesters in Chicago.

(The U.S. Department of Justice announced on Sept. 3 that it had just allocated $3.9 million to the cities for so-called “riot-control.”)

Of course, the billionaires did not shift from fraud to force arbitrarily. It’s just that their bag of tricks is just about empty and their two war candidates are about equally discredited.

It is no coincidence that they started clubbing, gassing and breaking heads just at the moment when the “peace” campaign of Eugene McCarthy was about to come to an ignominious end. (The police attack on McCarthy headquarters was the final humiliation dealt the liberals and served to illustrate the fascist mood of the ruling class.)

The rulers who rigged the convention long in advance knew that McCarthy was to be discarded in Chicago. And they also knew that thousands of youth whom the McCarthy campaign had kept off the streets would be back on the streets, together with thousands of radical youth who had never fallen for the imperialist-liberal McCarthy in the first place.

So the bosses prepared well ahead of time to deal with the anger and indignation which was as inevitable as the Humphrey-Nixon race. They decided to give the white youth a taste of the treatment hitherto reserved for the Black liberation struggle.

But an important by-product of Chicago is the wave of revulsion of new layers of youth for a parliamentary system which has to defend its candidates from the hatred of the population with bayonets and clubs.

Parliamentary illusions went up with the clouds of tear gas as the war party at the amphitheater steam-rolled over popular anti-war sentiment. The flow of blood from the heads of unarmed demonstrators in front of the Conrad Hilton made many a convert to the revolutionary struggle.

The bourgeoisie used strong-arm methods to brush the liberals aside and thus demonstrated the fraudulence and the futility of imperialist democracy.

If the liberal politicians folded up at the first show of force by the ruling class, the militant youth did not.

While McCarthy crept off to the sidelines and McGovern stepped into Humphrey’s fold, the fighting young people who really want and need to end imperialist wars were spontaneously fighting back against the cops. New and militant tactics were being developed simultaneously with the beginnings of change in their ideology.

Several hundred police, who tried to attack a Grant Park rally after someone lowered the U.S. flag, were literally driven away by the youth in the crowd. The cops were hit with everything that could be thrown and then surrounded by barricades of benches and immobilized before they withdrew in defeat.

Mobile street demonstrations were carried out, during which obstacles were strewn about to slow down police cars. Youth at Lincoln Park built such sturdy barricades to keep from being driven from the park that police had to saturate the area with tear gas many times in order to drive them out.

Occasional aggressive forays were made by small bands of youth in search of isolated police on foot or in patrol cars. In general, however, the brutality of the police produced spontaneous retaliation wherever possible.

Many so-called leftists frown upon these new tactics as “adventuristic” and inadequate to defeat such a heavily armed force as the police. But those who are serious about leading a revolutionary struggle against imperialism must take a carefully constructive attitude towards the initial bursts of revolutionary energy shown by the young people in Chicago.

Opponents of imperialism will try to assist the militants to improve their tactics, not throw cold water on them.

In general, the Chicago events have shown that the capitalists will always resort to force if popular will stands in the way of their imperialist objectives.

These events have confirmed the Marxist analysis of the state. This resort to violence on the eve of new imperialist crises has pointed out to thousands of young people that revolutionary resistance to boss rule is the only way to stop wars of aggression.

These are the lessons of Chicago.

By Fred Goldstein, posted August 20, 2018.

Bulletin, Aug. 20: Some 170 additional former government officials, including ambassadors, U.S. attorneys and other officials, have asked to have their names added to the protest letter over Trump’s suspension of the security clearance of former CIA Director John Brennan.

Donald Trump has provoked a revolt within the department of dirty tricks. The Central Intelligence Agency, which overlaps with the Pentagon officer corps, has issued a protest signed by over 70 former CIA officials denouncing the removal of the security status of former CIA chief John Brennan.

Why would such a rogues’ gallery of assassins, torturers and spies suddenly unite on an unprecedented scale and become partisans of the “free speech” of John Brennan? Brennan denounced Trump as dangerous and unfit, and he described Trump as “drunk on power” after the president revoked his security clearance.

The CIA is not an agency unto itself. It is deeply connected to the ruling class and its officialdom. Trump is acting more and more like an authoritarian ruler and making sections of the political and military establishment nervous.

He is using the powers of the presidency to endanger imperialist interests and capitalist commercial interests without deliberation or consultation with the most powerful elements in capitalist society.

The letter defending the “free speech” of former CIA director John Brennan can be seen as a message to Trump concerning his authoritarianism and his flouting of basic capitalist procedures of behavior established by custom and by law.

This letter is also a defense of the agency itself. These 70 plus cutthroats consider themselves defenders of U.S. capitalism around the world. It is perhaps hard work setting up eavesdropping, torture sites, assassinations, kidnapping, etc. In fact, it can involve risks. (Although the higher-ups who order the dirty tricks do not expose themselves to personal risks at all.) These CIA criminals want to be treated with respect by the chief executive of U.S. imperialism, but Trump has demeaned them and the FBI repeatedly.

The movement began with retired Navy Adm. William H. McRaven. He had been commander of the Joint Special Operations Command and oversaw the 2011 raid by Navy SEALs that “took out” Osama bin Laden and had his body dumped into the sea. McRaven is now a chancellor of the University of Texas system.

In an op-ed for the Washington Post, McRaven denounced Trump for “McCarthyite tactics” and, as an act of solidarity with Brennan, asked that his own security clearance be taken away, too.

To show how the CIA was primed for this attack, one of the signers told a Slate reporter on Aug. 17:  “[T]he statement was circulated to all living ex-directors and deputy directors at noon on Thursday, with a request to reply by 6 that night.” All but four responded.

Who is Brennan?

According to Glenn Greenwald, writing in The Guardian on Jan. 7, 2013, President Barack Obama had to withdraw Brennan’s nomination for CIA director because of his record under the George W. Bush presidency of defending torture, as well as “rendition” (sending prisoners to third countries to be tortured at secret sites), electronic surveillance of civilians, targeted drone strikes in which the “targets” were unknown, etc.

This quarrel amounts to one section of the state defending its right to speak against the president. The CIA, which has overthrown governments, destroyed movements and assassinated leaders is claiming First Amendment “free speech” rights for Brennan.

Trump is screwing up the job of protecting U.S. imperialism

But more important, as defenders of U.S. capitalism, they feel that Trump is screwing up the job. In this, they speak for a large section of the military, the diplomatic corps and the capitalist brain trust.

They fear that Trump is moving in an authoritarian direction — against them!

When Trump abuses the masses of people with his racism, misogyny, anti-immigrant fanaticism and cruelty, there is no mention of the freedom to live, let alone to speak of the victims of racist police murder. They said not a word about the kidnapping of women and children at the border and the wholesale violation of domestic and international asylum laws. Nor did these butchers mention a thing about the innocent civilians killed by U.S.-made drones in Iraq, Afghanistan and Libya and U.S. bombs in Yemen.

They said nothing about the rights of Mumia Abu-Jamal and Leonard Peltier to be protected from unjust imprisonment, or the right of the incarcerated masses to be free of sadistic prison guard persecution.

Trump’s grand military parade canceled

It is no accident that the same week this CIA protest letter was circulated, Trump’s Washington, D.C., grand military parade was cancelled. It had been an authoritarian move, characteristic of dictators. Trump claimed he wanted a parade like the one he saw in Paris during his visit to French President Emmanuel Macron last year.

He forgot that the parade he saw was not for Macron but for Bastille Day, a national holiday which the French ruling class uses annually to pump up patriotic war sentiments.

The fact that Trump wanted the Pentagon to back a parade aimed at glorifying himself was not greeted kindly among the brass, especially since he is trying to discipline them. Even though Trump has given them hundreds of billions of dollars in weapons and soldiers, they were not buying his extravagant appetite for pomp and ceremony dedicated to celebrating — Trump!

Secretary of Defense James Mattis denied that the price tag for the parade would be $92 million, but all other government and department estimates were around that figure. Trump tried to place the blame for the cancellation on the majority African-American city. They rebutted his argument, showing that the D.C. part of the cost was miniscule.

So Trump had to suffer a public humiliation at the hands of the brass. They don’t want to fan the flames of Trump’s authoritarianism at a time when he is wrecking their alliances in NATO and blocking them in their drive against Russia.

Clearly, the capitalist state is deeply divided with differences over what the crisis of imperialism is and how to deal with it.

Trump and Turkish crisis

Looking at the crisis from Trump’s point of view, Turkey under President Recep Erdogan is turning into an enemy that has to be subdued. Turkey is holding a U.S. operative under house arrest. He is a pastor under suspicion of participating in the anti-Erdogan coup in 2016 and of being linked to Fethullah Gulen, a Turkish cleric living in the Pocono mountains of Pennsylvania whom Erdogan accuses of engineering the coup.

Regardless of the merits of the case, Trump reduces the issue to one of bringing a small, defiant government in Ankara to its knees, in order to let the world know how allegedly all-powerful Washington is.

Looking at the same crisis from the Pentagon’s point of view, Trump has made an enemy of an important NATO ally that is desperately needed in the struggle for the military to regain some of its foothold in the Middle East. To complete the argument, the strategic Incirlik NATO air base is in Turkey. Trump has jeopardized all this in order to put Turkey “in its place.”

Looking at it from the vantage point of Wall Street, Trump has doubled the tariffs on Turkish steel and aluminum, escalating a tariff war when Turkey is in the middle of an economic crisis that is leading to a debt crisis. The Turkish ruling class is in debt to many European countries, especially Spain and Greece. As the value of the Turkish lira falls, its debt to Europe becomes more burdensome. Furthermore, by squeezing Turkey, Trump runs the risk of triggering defaults, both in Turkey and in continental Europe.

Indeed, all sectors of the ruling class are watching Trump’s attack on Turkey with great trepidation.

Trump and Saudi-Qatari conflict

Or look at the crisis in the Gulf states, where Saudi Arabia is in a virtual war with Qatar. Saudi Arabia has blockaded Qatar because it is sympathetic to the Muslim Brotherhood, a political rival to the Saudis in the Middle East.

In this conflict, in spite of mediation efforts by Secretary of Defense Mattis, Trump has come down heavily on the side of the Saudis, especially after they wined and dined him, giving him the royal treatment on his early visit there.

Former Secretary of State Rex Tillerson, former CEO of ExxonMobil, intervened last year to stop the Saudis and the United Arab Emirates from carrying out a joint invasion of Qatar. This may have been what led to his firing by Trump. (Al Jazeera, Aug. 1)

Qatar is the site of a strategic U.S. air base, Al Udeid, which is home to the Air Force Central Command and some 10,000 American troops.

Revolt of the spies

On the international scale, the CIA and the Pentagon have significant overlap. A number of Pentagon generals and admirals have been appointed directors of the CIA. In any case, both agencies share the task of securing the U.S. imperialist empire, using different means.

While they are always at war with one another over turf, resources, etc., they are both deeply concerned with how Trump’s policies affect them. Trump blames members of the CIA and the FBI for the Mueller investigation. In fact, Trump removed former CIA director Brennan’s security clearance because he was part of the “Russia witch hunt.”

Trump’s military policy, which seeks to weaken if not to destroy NATO, strikes at the heart of U.S. military strength in Europe, up to and including on the borders of Russia.

Trump is attacking the CIA and FBI as part of a “Russia witch hunt” while also attempting to weaken the U.S. strategic military alliance with NATO.  These two policy conflicts alone could bring about a bloc from above to interfere with Trump’s poorly thought-out strategic view of how to ensure U.S. imperialist world domination.