THE impact of the Covid pandemic on many capitalist economies has had the effect of masking and disrupting their increasingly synchronised economic cycle. Growth rates in the major economies (the US, Germany, Britain, France and Japan) were stagnant or declining in 2019 and almost certainly heading for recession. Covid plunged them into deep decline in the course of 2020.

Thus, a virus — rather than capitalism — is being held responsible for the steep downturn that might well have happened anyway. And the fact that the downturn was so extreme means that the recovery looks all the more impressive — in mathematical terms at least — when coming up so quickly from such a deep trough.  

Yet the speed and extent of the recovery — funded by state spending — is such that the major central banks are now worried about inflation and its impact on economic stability and currency values.  

The IMF and the OECD have been urging central banks to reduce economic demand by continuing to raise interest rates, while the World Bank is warning that increasing them too much would make an international recession more likely and much worse, especially in the developing and so-called “emerging market” economies, as higher interest rates make borrowing for government, business and household spending and investment more expensive.

Obviously, the Russia-Ukraine War has contributed to fears of both inflation and recession because of the disruption it has brought to energy and food supplies.  

Nor should we ignore the fact that the critical features of the 2008 financial crash — the rising organic composition of capital and, in particular, the over-accumulation of fictitious capital just as the international capitalist economy was going into a downturn — are still present.  

Yet missing from the policies proposed by capitalist governments and various international agencies is the single biggest and most direct measure that would reduce inflation and protect working-class living standards — namely, selective price controls. This is because these would restrict the boom in capitalist profits that is taking place in specific sectors such as energy, food retail and banking.

In Britain, Conservative governments — and we have had three different ones so far this year — are seeking to repay the costs of responding to the Covid crisis, while also limiting the huge rise in energy bills without taxing the profits of the energy companies.  

The short-lived government of Liz Truss wanted to subsidise energy company profits in order to keep their prices down, boost military spending and cut taxes on big business and the rich — while refusing to explain how this could be funded without slashing social and welfare programmes.  

The bond markets responded by demanding higher interest payments in return for lending to the government, tipping pension funds into crisis, pushing up housing costs and driving down Sterling in the foreign exchange markets which made food imports more expensive. Truss and her Cabinet were forced to resign just 28 days after unveiling their plans.  

This was a powerful reminder of the power of the Bank of England in league with the financial City of London, its banks and its markets to threaten, discipline or bring down elected governments that step too far out of line with the interests of finance capital. We have seen this before, notably with Labour governments in the 1960s and 1970s.  

The failure of social democracy to challenge this power politically and ideologically helped open the way for the triumph of neoliberalism in the US, Britain and other major capitalist countries in the 1980s and 1990s.  

In response to the falling rate of profit in most of the G20 economies, from a peak in the mid-1960s to a trough in the early 1980s, the ruling capitalist classes embraced a neoliberal programme of lower taxes on business and the wealthy, cuts in social and welfare spending, liberalisation of capital, deregulation, privatisation, labour flexibility and anti-trade union laws.  

They met little resistance from those leaderships of the working-class movements that had no Marxist analysis of capitalist political economy and state power. These policies also briefly arrested the declining rate of profit.  

In Britain, the leadership of the Labour Party, the Trade Union Congress and most of the trade unions reacted to the neoliberal offensive by embracing the “social partnership” ideology preached by social democratic supporters of the European Union — even though the EU itself is based on the same capitalist “free-market” principles that neoliberalism advocates so ruthlessly.  

In numerous EU member states, the failure of the traditional social-democratic parties to defend working-class interests against this offensive has led to spectacular collapses in electoral support, notably in France, Italy, Greece and the Netherlands.

There, voters have turned to populist alternatives, from far-right nationalists to greens to superficial leftists, none of them based in class politics. Other social-democratic parties have recovered as neoliberalism’s impact on the working class has proved to be so damaging.  

The question for communists is: why haven’t the communist parties been the main beneficiaries of this collapse of the traditional social-democratic parties?  

In Britain, the pattern of media ownership and control and the first-past-the-post electoral system has made it almost impossible for any minor party to secure publicity and votes on a mass scale. The main exceptions to this reality are in Scotland and Wales, where the left-of-centre Scottish National Party and Plaid Cymru enjoy significant support from sections of the working class and middle strata.  

The new British government headed by Prime Minister Rishi Sunak has calmed the financial markets by pledging to follow a policy of austerity. This will finance the energy support plan and cut the state’s medium-term deficit through tax rises and substantial reductions in government spending — except on armaments.  

The trade unions will resist, extending the current wave of industrial action to protect wages, jobs and public services as millions of people face a serious cost-of-living crisis. The Conservative government intends to limit still further the legal right of workers and their unions to take industrial action.  

The Labour Party leadership would like to avoid big confrontations between capital and the working-class movement. It is far ahead in the opinion polls at present, but this is because people have turned against the Conservative Party, its governments and their mismanagement of the Covid crisis, the National Health Service and the public finances.

Labour’s refusal to propose a bolder alternative programme such as nationalisation of the energy sector, higher taxes on the super-rich and big business, and massive public investment in housing, education, health and transport means that victory in the next general election — due in 2024 at the latest — is not guaranteed.  

The Conservative government and the right-wing media will seek to undermine support for the Labour Party, falsely portraying it as unpatriotic, dangerously left-wing, unwilling to fight crime or control immigration and opposed to the military defence of Britain’s interests.  

In fact, the Labour Party leadership has wrapped itself in the British flag, excluded former left-wing leader Jeremy Corbyn from its parliamentary party, purged or driven thousands of socialists from its ranks, pledged support for big business and the City of London, refused to challenge racist immigration and asylum policies, and endorsed British imperialist foreign and military policies including a major expansion of nuclear weapons.  

The Communist Party of Britain (CPB) and its left allies warn that this capitulation to the ruling class will undermine Labour’s more progressive policies and alienate many working-class supporters before or soon after the next general election.  

Although the CPB contests some elections, much of its work is concentrated in the trade union, peace, anti-austerity and international solidarity movements. In the party’s view, building and mobilising these movements in a broad-based militant alliance, led by the working class and aimed at state-monopoly capitalism in Britain, is essential at this stage in the struggle for socialist revolution.

The immediate political objective is to bring down the Conservative government at the earliest opportunity, while strengthening the forces of the left across the labour movement including — where possible — in the Labour Party. At the same time, an essential part of this strategy is for the CPB and the Young Communist League to grow and exercise significant influence in the organised working class and across the left.  

British imperialism is very much alive and kicking, in alliance as a junior partner with the US and Nato. The British capitalist class still has more investments outside its own territory than any other except that of the US. Imperialist and racist views are still a powerful force in British society, combining with appeals to “the national interest” that are a cloak for class collaboration at home and abroad.  

This means that the ideological struggle — the battle of ideas — must be a very high priority for Marxist-Leninists in England, Scotland and Wales, as elsewhere, combined with mass struggle on the economic, social and environmental issues that most directly affect people in their everyday lives.

That is why the CPB seeks to analyse and explain questions of social and national inequality, women’s oppression, racism, gender identity and the climate crisis on the basis of class politics: they arise within an exploitative class-divided society that will only be abolished in a revolutionary process led by the organised working class.

The international communist movement and its annual, regional and bilateral meetings are vital to the ideological and practical work of communist and workers’ parties. Its constituent parties should, in our view, be considering how best to strengthen it organisationally so that those parties that wish to do so can raise their levels of communication, co-ordination and practical solidarity with communist parties under attack or working in dangerous conditions.  

The “general crisis of capitalism” has returned with a vengeance and neoliberalism has failed to resolve any aspect of it.

Communists across the world have to redouble their efforts to explain this crisis — including its important new features such as environmental degradation, global warming and climate change — and build national and international working-class and people’s unity around left and progressive policies aimed at state-monopoly capitalism and imperialism.  

Adapted from a contribution given to an international ideological seminar in Caracas hosted by the Bolivar-Marx Institute of the Communist Party of Venezuela.

Robert Griffiths is general secretary of the Communist Party of Britain.