Jandisha Weekly (Hindi) - Digital Weekly of CPI (ML) Red Star in Hindi
After the defeat of Germany on May 5, 1945, a worldwide victory was declared against fascism. Thus this year marks the 75th anniversary of the defeat of fascism.
Today it is well-known how in Germany and Italy fascism developed with full force and posed a challenge to human civilization. It was a terrifying force that threatened human civilization and was established very fast. But it was not just the fascist forces led by Hitler and Mussolini that were threatening to destroy human civilization. They were given the opportunity to grow into such a monstrous menace. Undoubtedly and undisputedly, the capitalist and imperialist forces helped, in various ways, these terrible reactionary forces to emerge. The idea of the capitalist-imperialist camp was that since the fascists were enemies of the communists, Hitler or Mussolini would strike at the Soviet Union and both the fascist and the socialist countries would end up destroying each other. In the eyes of Britain, France and so on, Hitler and Mussolini were indeed a great weapon to prevent the spread of socialism in the world.
The fascists were the only ones who had the power to wage an aggressive war by influencing a large section of the people with all kinds of reactionary ideologies, including popularizing extremist and perverted national chauvinism as opposed to internationalism. During World War II, the Axis powers led by Hitler-Tojo-Mussolini, on the one hand, mobilized the masses of their countries in reactionary ideology and militarized almost the entire masses of those countries, eliminating all opposition within. At a time when Hitler was preparing to develop German extremism in the name of establishing Aryan domination around the world, socialist Soviet Union informed the ruling classes of various countries that Hitler-Mussolini were moving towards the destruction of human civilization, so it was necessary for all to unite against it. But the imperialist powers of Europe and America at that time did not pay heed to that appeal, instead resorted to the now-infamous policy of appeasement. Their response was that if war broke out between fascism and socialism, they would support both sides to some extent and move forwards to end both, so that the capitalist powers, that is, the imperialist powers, could establish unchallenged hegemony throughout the world, having crushed both the fascist as well as the socialist forces.
Socialist USSR well understood this policy of countries like America, England, France and signed a non-aggression pact with Germany in 1935. According to that pact, neither side would occupy the other’s territory. This treaty shocked Britain and its allies, who were labouring under the assessment that since the fascists were the greatest enemies of socialism, no understanding was possible between the two. The USSR, meanwhile, desperately wanted some time to prepare itself to deal with the fascist forces and the inevitable onslaught that would follow not long after. Hitler, on the other hand, thought that after first occupying some large countries (while keeping USSR out of the war till then) and then striking at USSR would give him the leverage to occupy the whole world. As a result of the merging of these two interests, a non-aggression pact became possible and the history of World War II took a different course. Hitler moved to occupy the whole of Europe, leaving USSR neutral; Italy moved into Africa, and Japan targeted Asia and the Pacific. Thus, World War II broke out between the imperialist powers. Hitler showed his might and occupied France in 17 days. Then England came under attack, with severe bombing devastating the country.
But Hitler knew that none of his dreams would come true if the USSR survived. So, as the major European powers steadily lost ground under the Fascists’ onslaught, Hitler decided that the time was ripe to attack the Soviet Union. Unapologetically going back on the non-aggression pact, Hitler attacked USSR on June 22, 1941. The USSR had known perfectly well that it was only a matter of time before they were attacked by Hitler. Therefore, in preparation of what promised to be a long and bloody war, they had temporarily moved away from the socialist policy and occupied some important strategic places in the war so that they could not be occupied by Hitler. With the non-aggression pact, Germany could no longer enter those areas, as they had then become part of USSR. Dissection of Poland and the occupation of Finland were two such examples. In this way, the Soviet Union was able to restrict Germany far from their border before the war and at the same time plunged into the mobilization of democratic people all over the country and around the world by escalating the conflict between the enemies and preparing for the coming war. That was the USSR’s strength. In this war, 10% of the Soviet people were martyred and set up a unique example of resistance. It proved that only socialism can deal the death blow to fascism. Though Germany was undoubtedly militarily very powerful, the USSR not only defeated Hitler, but also liberated the whole of Europe from fascism. This victory ushered in a wave of anti-colonial struggles across the world. China liberated itself from Japanese imperialism and direct colonialism around the world almost came to an end.
Today, in the context of the retreat of socialism and the imperialist crisis, fascism is re-emerging in many countries, including our own. Fascist forces are trying to re-emerge all over Europe. The so-called liberals have very cleverly started to denounce Soviet Russia's glorious role in WWII as ‘dictatorial’, claiming that Stalin was no different from Hitler. This will of course, in the ultimate sense, only strengthen the hands of the fascists. In the 75th year of the defeat of fascism, if we are not aware of this conspiracy to malign socialism, equating it with fascism, we will not be able to strengthen the struggle against fascism. In order to check the advance of fascism, it is important to highlight the role of Soviet Russia not just in the anti-fascist war but also in the development of civilisation.
Actually what these nitpicking liberals – who are so keen to denounce every little drawback of the Soviet Union – tend to forget is that war never keeps people in a state of normalcy. No movement or struggle can be perfect. There are bound to be drawbacks, weaknesses. The anti-fascist war was not a simple war, it was a great war. It had no precedence, from which socialist forces could have drawn lessons. We have to think and reason from that perspective. If the USSR had not been a socialist republic, what would have happened to the whole world even in the unlikely circumstance of Hitler being defeated? Everyone has seen the condition of the lands occupied by America. Therefore, the power of advanced ideology is necessary to stop fascism. It is necessary to learn from the defeat of fascism in 1945 to check its advance now. It is not possible to stop fascism without upholding advanced ideological and political position. Hitler’s defeat and its outcome have indisputably proved that socialism is that advanced ideology. Even today, the rise of the BJP and the Sangh Parivar in India and the surrender of the established parties to these forces is a testament to the capitulation of capitalism to fascism. Therefore, it is of utmost importance to strengthen the socialist movement. Today, in this 75th year of the victory over fascism, we have to take the oath to revive the worldwide socialist and communist movement
What is given below is a note presented in the webinar on 14th June on the subject: When Crises like Covid19 pandemic threatens ecological catastrophe, Significance of the struggle for system change with people oriented alternate development perspective. Based on the discussion in the Webinar on 14th June, with the above subject in which scientist Soumya Dutta and environmentalist Nityanand Jayaraman participated along with comrades Sanjay Singhvi, Arun Velaskar and Vijaykumar – KN Ramachandran
- When whole humanity is in the grip of Covid19 pandemic, the warnings of Stephen Hawking like scientists that ecological destruction intensified by the arrogant ruling political class shall lead to a catastrophe, to possible destruction of this species itself sounds very relevant. Still the capitalist-ruling system wants to push forward with its re-creation of the world in its own image under neoliberal globalization. Not satisfied even with the accumulation of 73%of the wealth of the society already with the top 1% of the corporates, developing nuclear weapons capable of destroying the earth a hundred times, building great cities with glittering malls, highways, fly-overs and techno parks, bringing most of the people under the sway of consumerist lust, they want more and more of them. They laugh at suggestions that climate change, global warming like phenomena are due to the ecological destruction caused by their brand of development; that if not curbed it shall cause devastation, that it shall lead to global environmental catastrophe. So, Trump walked out of Kyoto Protocol, or all of them assembled at Madrid during last year’s climate conference dumped all talks about environmental dangers as rubbish!
- But Covid19 has surprised the globalized world; it has frozen the world for weeks. Is nature reacting in its own ways through SARS in 2003, MERS in 2012 and now more dangerous novel corona virus, Covid19 apart from more frequent super cyclones, forest fires etc? Scientists have recently warned also about old viruses getting mutated, and appearance of more dangerous viruses, dormant for many millennia, now coming out with the breaking of huge glaziers at both poles under global warming.
- In spite of these warnings, what happened? China, soon after its partial recovery from Covid19, rushed to its old ways! In all other countries also, after initial panic, once the lockdowns are being unlocked, they are hurrying back to business as usual, even when millions are newly affected and tens of thousands are still dying daily due to fast increasing infection of Covid19. They are seeking ways to loot the human labour and nature more voraciously, to recover the losses! They are intensifying the use of new intelligence machines and digitization at unprecedented scale for it. At the same time, they are shifting the whole burden of the pandemic to the backs of the workers and oppressed people once again with tragic consequences as we are witnessing around us.
- It is based on our studies on how the intensifying capitalist loot during the phase of neoliberal corporatization has taken the ecological destruction to by the imperialist powers and their junior partners in power in the dependent countries to unprecedented levels and how all the proposals of the scientists and environmentalists are rejected in practice by them, the CPI(ML) Red Star in its Program adopted by its 9th Party Congress in 2011, pointed out that, along with the plunder of labour and world people, the plunder of nature is also intensifying from the time of emergence of the capitalist system. In The Capital and other studies, Marx and Engel pointed out that from the time of emergence of the class divided society and beginning of exploitation of humans by humans, the interference in nature by man also had started. But, this interference started taking an antagonistic form, a quantitative leap, with the beginning of industrial revolution, and the advent of the capitalism. As it led to colonization of the whole world, the was further intensification of the loot of the oppressed peoples and the natural resources there. After, Second World War, transforming colonial forms of plunder to neo-colonial forms characterized by the ever increasing export of finance capital, market system and technology, the capitalist imperialist system along with the junior partners to whom they had transferred power in former colonies, further intensification of the exploitation of labour, massive entry of capital and technology in to agricultural sector under the banner of Green Revolution, and looting of nature. From 1970s, to surmount another bout of serious crisis inherent to capitalist system, they adopted neoliberal globalization and corporatization, taking imperialist plunder to a still higher phase.
- History teaches that, just because its barbarous character is exposed, just because the vast masses of people are facing more brutal plunder and oppression, the ruling system is not going to change on its own will, or it can be transformed from within through reforms. The latest example for this is its present mad rush for returning to Business as usual, even when the pandemic is spreading fast. For further accumulation of wealth, they are intensifying uncontrolled plunder of labour and nature, unconcerned about the threats of ecological catastrophe and extinction of human species, as they do not show any concern even after already damaging the eco system and bio-diversity. So, if we want to protect what is left of nature, and the human species, the one and only way out is to throw out the capitalist system with the perspective of putting in to practice a sustainable alternate development outlook.
- Celebrating the severe setbacks suffered by the socialist countries and their degeneration to capitalist path, the global capitalist system and its junior partners, launched the neoliberal corporate offensive based on globalization-liberalization-privatization in the 1970s , repeating ‘there is no alternative to neoliberal policies,’ asserting their world outlook. It is against this world outlook which has taken the humankind to verge of disaster, starting with Marx, the revolutionary forces are consistently fighting in spite of many ups and downs, taking lessons from their past experiences, for another world, by overthrowing the capitalist system at global level and initiating socialist transformation under people’s democracy , towards an exploitation free egalitarian society, progressively bringing all means of production under co-operative, social control..
- What you mean by this alternative is the central question asked by all? Our answer, of course, is: based on past experiences, and our socio- political –theoretical orientation it has to be evolved, and developed through practice. From what capitalist imperialist system has done, we have the clarity that if further attacks on the boundaries of nature should be ended forthwith, we have to drastically do away with the ‘parameters’ of development assiduously cultivated by the capitalist system, like the uncontrolled use of energy and consumerist lust. An alternative to capitalism can never be another mere economic model. A new socio-cultural-political outlook is to be developed, redefining human needs, and democracy as a way of life with the perspective of internationalism, a world without war, with co-operative, social ownership in all fields.
It means planning everything from the grass root level, with democratic institutions which ensure all power to the people. It calls for outright replacement of the bureaucratic-corporate-fascist model of governance with a people’s democratic model starting from the neighbourhood committees under Gram Panchayats, as a pyramid, with the power vested maximum at the panchayat level, then at bloc/taluk, district and state levels progressively diminishing as you go up, with very little power at the centre. It shall be built up as part of an international system, totally de-militarized, with open borders, where every country ensures food, clothing, housing, healthcare, education and employment to all as primary needs to begin with. Towards such a people’s model, many lessons can be drawn from the positive contributions of the models initiated in Paris Commune, Soviets in Soviet Union, People’s Communes in China and other countries during their socialist days; the attempts made by various progressive governments in Latin America, Asia and Africa, and what is done by the Scandinavian countries in Europe. Though presented from different political outlooks, there are alternate perspectives put forward by many including the concept of Gram swaraj of Gandhiji. According to concrete conditions in each country, and based on a critical study of all these, a new alternative can be developed.
Alternative development model means a society where democratic way of life and sustainable egalitarian path of development are integrally linked. In order to advance to such a development paradigm, the pre-condition is that the capitalist imperialist system is thrown out; and secondly, the recognition that people’s democracy means a direct rule of the people, people’s political power starting with the grass root level neighbourhood committees, which promotes progressive relation between humans and nature, put an end to all forms of exploitation of humans by humans, replacing present family system with a progressive partnership, putting an end to Manuvadi caste system, racism like revanchist systems, customs and habits and patriarch, where gender inequality and all other social and economic inequalities will be ended, with scientific temper and humanism guiding the world outlook Mobilization of the toiling masses and the oppressed classes and sections of people calls for a great cultural revolutionary approach, in short a vigorous fight for transforming the thinking among humankind cultivated by the oppressor classes during last many millennia. An evaluation of the experience of the former socialist countries show that at a critical time during the socialist transition, the leaks from the roof, the capitalist, consumerist influences which started influencing the super structure, started corroding the economic base, speeding up the degeneration of the former socialist countries. This can happen to the communist parties, groups and individuals also, if they do not engage in class struggle without a comprehensive approach, and do not pursue a cultural revolutionary perspective.
- To conclude, human society has reached a critical stage when either the capitalist imperialist system shall lead it towards ecological catastrophe and its own extinction, or the toiling and oppressed masses and the revolutionary intelligentsia shall come together, create public opinion and overthrow the capitalist system, and march towards a new socialist future, where humans, as a part of the nature shall co-exist with it friendly, giving birth to new blossoms of democracy and an alternate development paradigm.
John Bellamy Foster is editor of Monthly Review and a professor of sociology at the University of Oregon. He is the author, most recently, of The Robbery of Nature: Capitalism and the Ecological Rift (with Brett Clark) and The Return of Nature: Socialism and Ecology—both published by Monthly Review Press in 2020. Intan Suwandi is an assistant professor of sociology at Illinois State University and author of Value Chains: The New Economic Imperialism (Monthly Review Press, 2019). They thank Fred Magdoff for his invaluable comments.
COVID-19 has accentuated as never before the interlinked ecological, epidemiological, and economic vulnerabilities imposed by capitalism. As the world enters the third decade of the twenty-first century, we are seeing the emergence of catastrophe capitalism as the structural crisis of the system takes on planetary dimensions.
Since the late twentieth century, capitalist globalization has increasingly adopted the form of interlinked commodity chains controlled by multinational corporations, connecting various production zones, primarily in the Global South, with the apex of world consumption, finance, and accumulation primarily in the Global North. These commodity chains make up the main material circuits of capital globally that constitute the phenomenon of late imperialism identified with the rise of generalized monopoly-finance capital.1 In this system, exorbitant imperial rents from the control of global production are obtained not only from the global labour arbitrage, through which multinational corporations with their headquarters in the centre of the system overexploit industrial labour in the periphery, but also increasingly through the global land arbitrage, in which agribusiness multinationals expropriate cheap land (and labour) in the Global South so as to produce export crops mainly for sale in the Global North.2
In addressing these complex circuits of capital in today’s global economy, corporate managers refer both to supply chains and value chains, with supply chains representing the movement of the physical product, and value chains directed at the “value added” at each node of production, from raw materials to the final product.3 This dual emphasis on supply chains and value chains resembles in some ways the more dialectical approach developed in Karl Marx’s analysis of the commodity chains in production and exchange, encompassing both use values and exchange values. In the first volume of Capital, Marx highlighted the dual reality of natural-material use values (the “natural form”) and exchange values (the “value form”) present in each link of “the general chain of metamorphoses taking place in the world of commodities.”4 Marx’s approach was carried forward by Rudolf Hilferding in his Finance Capital, where he wrote of the “links in the chain of commodity exchanges.”5
In the 1980s, world-system theorists Terence Hopkins and Immanuel Wallerstein reintroduced the commodity-chain concept based on these roots within Marxian theory.6 Nevertheless, what was generally lost in later Marxian (and world-system) analyses of commodity chains, which treated these as exclusively economic/value phenomena, was the material-ecological aspect of use values. Marx, who never lost sight of the natural-material limits in which the circuit of capital took place, had stressed “the negative, i.e. destructive side” of capitalist valorization with respect to the natural conditions of production and the metabolism of human beings and nature as a whole.7 The “irreparable rift in the interdependent process of social metabolism” (the metabolic rift) that constituted capitalism’s destructive relation to the earth, whereby it “exhausted the soil” and “forced the manuring of English fields with guano,” was equally evident in “periodical epidemics,” resulting from the same organic contradictions of the system.8
Such a theoretical framework, focusing on the dual, contradictory forms of commodity chains, which incorporate both use values and exchange values, provides the basis for understanding the combined ecological, epidemiological, and economic crisis tendencies of late imperialism. It allows us to perceive how the circuit of capital under late imperialism is tied to the etiology of disease via agribusiness, and how this has generated the COVID-19 pandemic. This same perspective focusing on commodity chains, moreover, allows us to understand how the disruption of the flow of use values in the form of material goods and the resulting interruption of the flow of value have generated a severe and lasting economic crisis. The result is to push an already stagnant economy to the very edge, threatening the toppling of the financial superstructure of the system. Finally, beyond all of this lies the much greater planetary rift engendered by today’s catastrophe capitalism, exhibited in climate change and the crossing of various planetary boundaries, of which the present epidemiological crisis is simply another dramatic manifestation.
Circuits of Capital and Ecological-Epidemiological Crises
Remarkably, during the last decade, a new more holistic One Health-One World approach to the etiology of disease arose, mainly in response to the appearance of recent zoonotic diseases (or zoonoses) such as SARS, MERS, and H1N1 transmitted to humans from nonhuman animals, wild or domesticated. The One Health model integrates epidemiological analysis on an ecological basis, bringing together ecological scientists, physicians, veterinarians, and public health analysts within an approach that has a global scope. However, the original ecological framework that motivated One Health, representing a new, more comprehensive approach to zoonotic disease, has recently been appropriated and partially negated by such dominant organizations as the World Bank, the World Health Organization, and the Centres for Disease Control and Prevention in the United States. Hence, the multi-sector approach of One Health has been rapidly converted into a mode of bringing such varied interests as public health, private medicine, animal health, agribusiness, and big pharma together to strengthen the response to what are regarded as episodic epidemics, while signifying the rise of a broad corporatist strategy in which capital, specifically agribusiness, is the dominant element. The result is that the connections between epidemiological crises and the capitalist world economy are systematically downplayed in what purports to be a holistic model.9
There thus arose in response a new, revolutionary approach to the etiology of disease, known as Structural One Health, building critically on One Health, but rooted rather in the broad historical-materialist tradition. For proponents of Structural One Health the key is to ascertain how pandemics in the contemporary global economy are connected to the circuits of capital that are rapidly changing environmental conditions. A team of scientists, including Rodrick Wallace, Luis Fernando Chaves, Luke R. Bergmann, Constância Ayres, Lenny Hogerwerf, Richard Kock, and Robert G. Wallace, have together written a series of works such as Clear-Cutting Disease Control: Capital-Led Deforestation, Public Health Austerity, and Vector-Borne Infection and, more recently, “COVID-19 and Circuits of Capital” (by Rob Wallace, Alex Liebman, Luis Fernando Chaves, and Rodrick Wallace) in the May 2020 issue of Monthly Review. Structural One Health is defined as “a new field, [which] examines the impacts global circuits of capital and other fundamental contexts, including deep cultural histories, have upon regional agro-economics and associated disease dynamics across species.”10
The revolutionary historical-materialist approach represented by Structural One Health departs from the mainstream One Health approach in: (1) focusing on commodity chains as drivers of pandemics; (2) discounting the usual “absolute geographies” approach that concentrates on certain locales in which novel viruses emerge while failing to perceive the global economic conduits of transmission; (3) seeing the pandemics not as an episodic problem, or random “black swan” events, but rather as reflecting a general structural crisis of capital, in the sense explicated by István Mészáros in his Beyond Capital; (4) adopting the approach of dialectical biology, associated with Harvard biologists Richard Levins and Richard Lewontin in The Dialectical Biologist; and (5) insisting on the radical reconstruction of society at large in ways that would promote a sustainable “planetary metabolism.”11 In his Big Farms Make Big Flu and other writings, Robert G. (Rob) Wallace draws on Marx’s notions of commodity chains and the metabolic rift, as well as the critique of austerity and privatization based in the notion of the Lauderdale Paradox (according to which private riches are enhanced by the destruction of public wealth). Thinkers in this critical tradition thus rely on a dialectical approach to ecological destruction and the etiology of disease.12
Naturally, the new historical-materialist epidemiology did not appear out of thin air, but was built on a long tradition of socialist struggles and critical analyses of epidemics, including such historic contributions as: (1) Frederick Engels’s Conditions of the Working Class in England, which explored the class basis of infectious diseases; (2) Marx’s own discussions of epidemics and general health conditions in Capital; (3) the British zoologist (Charles Darwin and Thomas Huxley’s protégé and Marx’s friend) E. Ray Lankester’s treatment of the anthropogenic sources of disease and their basis in capitalist agriculture, markets, and finance in his Kingdom of Man; and (4) Levins’s “Is Capitalism a Disease?”13
Especially important in the new historical-materialist epidemiology associated with Structural One Health is the explicit recognition of the role of global agribusiness and integration of this with detailed research into every aspect of the etiology of disease, focusing on the new zoonoses. Such diseases, as Rob Wallace stated in Big Farms Make Big Flu, were the “inadvertent biotic fallout of efforts aimed at steering animal ontogeny and ecology to multinational profitability,” producing new deadly pathogens.14 Offshore farming consisting of monocultures of genetically similar domestic animals (eliminating immune firebreaks), including massive hog feedlots and vast poultry farms coupled with rapid deforestation and the chaotic mixing of wild birds and other wildlife with industrial animal production—not excluding wet markets—have created the conditions for the spread of new deadly pathogens such as SARS, MERS, Ebola, H1N1, H5N1, and now SARS-CoV-2. Over half a million people globally died of H1N1 while the deaths from SARS-CoV-2 will likely far exceed that.15
“Agribusinesses,” Rob Wallace writes, “are moving their companies into the Global South to take advantage of cheap labor and cheap land,” and “spreading their entire production line across the world.”16 Avians, hogs, and humans all interact to produce new diseases. “Influenzas,” Wallace tells us, “now emerge by way of a globalized network of corporate feedlot production and trade, wherever specific strains first evolve. With flocks and herds whisked from region to region—transforming spatial distance into just-in-time expediency—multiple strains of influenza are continually introduced into localities filled with populations of susceptible animals.”17 Large-scale commercial poultry operations have been shown to have much higher odds of hosting these virulent zoonoses. Value-chain analysis has been used to trace the etiology of new influenzas such as H5N1 along the poultry production commodity chain.18 Influenza in southern China has been shown to emerge in the context of “a ‘historical present’ within which multiple virulent recombinants arise out of a mélange of agro-ecologies originating at different times by both path dependence and contingency: in this case, ancient (rice), early modern (semi-domesticated ducks), and present-day (poultry intensification).” This analysis has also been extended by radical geographers, such as Bergmann, working on “the convergence of biology and economy beyond a single commodity chain and up into the fabric of the global economy.”19
The interconnected global commodity chains of agribusiness, which provide the bases for the appearance of novel zoonoses, ensure that these pathogens move rapidly from one place to another, exploiting the chains of human connection and globalization, with the human hosts moving in days, even hours, from one part of the globe to the other. Wallace and his colleagues write in “COVID-19 and Circuits of Capital”: “Some pathogens emerge right out of centres of production.… But many like COVID-19 originate on the frontiers of capital production. Indeed, at least 60 percent of novel human pathogens emerge by spilling over from wild animals to local human communities (before the more successful ones spread to the rest of the world).” As they sum up the conditions of the transmission of these diseases,
the underlying operative premise is that the cause of COVID-19 and other such pathogens is not found just in the object of any one infectious agent or its clinical course, but also in the field of eco-systemic relations that capital and other structural causes have pinned back to their own advantage. The wide variety of pathogens, representing different taxa, source hosts, modes of transmission, clinical courses, and epidemiological outcomes, have all the earmarks that send us running wild-eyed to our search engines upon each outbreak, and mark different parts and pathways along the same kinds of circuits of land use and value accumulation.20
The imperial restructuring of production in the late twentieth and early twenty-first centuries—which we know as globalization—was the result primarily of the global labour arbitrage and the overexploitation (and super-exploitation) of workers in the Global South (including the purposeful contamination of the local environments) for the benefit primarily of the centres of world capital and finance. But it was also driven in part by a global land arbitrage that took place simultaneously through multinational agribusiness corporations. According to Eric Holt-Giménez in A Foodie’s Guide to Capitalism, “the price of land” in much of the Global South “is so low in relation to its land rent (what it is worth for what it can produce) that the capture of the difference (arbitrage) between low price and high land rent will provide investors with a handsome profit. Any benefits from actually growing crops are secondary to the deal.… Land arbitrage opportunities come about by bringing new land—with an attractive land rent—into the global land market where rents can actually be capitalized.”21 Much of this was fed by what is called the Livestock Revolution, which made livestock into a globalized commodity based on giant feedlots and genetic monocultures.22
These conditions have been promoted by the various development banks in the context of what is euphemistically known as “territorial restructuring,” which involves removing subsistence farmers and small producers from the land at the behest of multinational corporations, primarily agribusinesses, as well as rapid deforestation and ecosystem destruction. These are also known as twenty-first-century land grabs, accelerated by high prices for basic foods in 2008 and again in 2011, as well as private wealth funds seeking tangible assets in the face of uncertainty after the Great Financial Crisis of 2007–09. The result is the greatest mass migration in human history, with people being thrown off the land in a global process of de-peasantization, altering the agro-ecology of whole regions, replacing traditional agriculture with monocultures, and pushing populations into urban slums.23
Rob Wallace and his colleagues observe that historian and critical-urban theorist Mike Davis and others “have identified how these newly urbanizing landscapes act as both local markets and regional hubs for global agricultural commodities passing through.… As a result, forest disease dynamics, the pathogens’ primeval sources, are no longer constrained to the hinterlands alone. Their associated epidemiologies have themselves turned relational, felt across time and space. A SARS can suddenly find itself spilling over into humans in the big city only a few days out of its bat cave.”24
Commodity Chain Disruption and the Global Bullwhip Effect
The new pathogens generated unintentionally by agribusiness are not themselves natural-material use values, but rather are toxic residues of the capitalist production system, traceable to agribusiness commodity chains as part of a globalized food regime.25 Yet, in a kind of metaphorical “revenge” of nature as first depicted by Engels and Lankester, the ripple effects of combined ecological and epidemiological disasters introduced by today’s global commodity chains and the actions of agribusiness, giving rise to the COVID-19 pandemic, have disrupted the entire system of global production.26 The effect of lockdowns and social distancing, shutting down production in key sectors of the globe, has shaken supply/value chains internationally. This has generated a gigantic “bullwhip effect” rippling up from both the supply and demand ends of the global commodity chains.27 Moreover, the COVID-19 pandemic has occurred in the context of a global regime of neoliberal monopoly-finance capital that has imposed worldwide austerity, including on public health. The universal adoption of just-in-time production and time-based competition in the regulation of global commodity chains has left corporations and facilities such as hospitals with few inventories, a problem compounded by urgent stockpiling of some goods on the part of the population.28 The result is extraordinary dislocation of the entire global economy.
Today’s global commodity chains—or what we call labour-value chains—are organized primarily in order to exploit lower unit labour costs (taking into account both wage costs and productivity) in the poorer countries of the Global South where world industrial production is now predominantly located. Unit labour costs in India in 2014 were 37 percent of the U.S. level, while China’s and Mexico’s were 46 and 43 percent, respectively. Indonesia was higher with unit labour costs at 62 percent of the U.S. level.29 Much of this is due to the extremely low wages in countries in the South, which are only a small fraction of the wage levels of those in the North. Meanwhile, arm’s length production carried out under multinational corporation specifications, along with advanced technology introduced into the new export platforms in the Global South, generates productivity on levels comparable in many areas to that of the Global North. The result is an integrated global system of exploitation in which the differences in wages between countries in the Global North and the Global South are greater than the difference in productivities, leading to very low unit labour costs in countries in the South and generating enormous gross profit margins (or economic surplus) on the export price of goods from the poorer countries.
The enormous economic surpluses generated in the Global South are logged in gross domestic product accounting as value added in the North. However, they are better understood as value captured from the South. This whole new system of international exploitation associated with the globalization of production constitutes the deep structure of late imperialism in the twenty-first century. It is a system of world exploitation/expropriation formed around the global labour arbitrage, resulting in a vast drain of value generated from the poor to the rich countries.
All of this was facilitated by revolutions in transportation and communication. Shipping costs dived as standardized shipping containers proliferated. Communication technologies such as fiber-optic cables, mobile phones, the Internet, broadband, cloud computing, and video conferencing altered global connectivity. Air travel cheapened rapid travel, annually growing by an average of 6.5 percent between 2010 and 2019.30 Around a third of U.S. exports are intermediate products for final goods produced elsewhere, such as cotton, steel, engines, and semiconductors.31 It is out of these rapidly changing conditions, generating an increasingly integrated, hierarchical international accumulation structure, that the present global commodity-chain structure arose. The result was the connecting of all parts of the globe within a world system of oppression, a connectivity that is now showing signs of destabilizing under the impacts of the U.S. trade war against China and the global economic effects of the COVID-19 pandemic.
The COVID-19 pandemic, with its lockdowns and social distancing, is “the first global supply-chain crisis.”32 This has led to losses in economic value, vast unemployment and underemployment, corporate collapse, increased exploitation, and widespread hunger and deprivation. Key to understanding both the complexity and chaos of the present crisis is the fact that no CEO of a multinational corporation anywhere has a complete map of the firm’s commodity chain.33 Usually, the financial centres and procurement officers in corporations know their first-tier suppliers, but not their second-tier (that is, the suppliers of their suppliers), much less the third- or even fourth-tier suppliers. As Elisabeth Braw writes in Foreign Policy, “Michael Essig, a professor of supply management at the Bundeswehr University of Munich calculated that a multinational company such as Volkswagen has 5,000 suppliers (the so-called tier-one suppliers), each with an average of 250 tier-two suppliers. That means that the company actually has 1.25 million suppliers—the vast majority of whom it doesn’t know.” Moreover, this leaves out the third-tier suppliers. When the novel corona virus outbreak occurred in Wuhan in China, it was discovered that fifty-one thousand companies globally had at least one direct supplier in Wuhan, while five million companies had at least one two-tier supplier there. On February 27, 2020, when the supply chain disruption was still largely cantered on China, the World Economic Forum, citing a report by Dun & Bradstreet, declared that more than 90 percent of the Fortune 1000 multinational corporations had a tier-one or tier-two supplier affected by the virus.34
The effects of SARS-CoV-2 have made it urgent for corporations to try to map their entire commodity chains. But this is enormously complex. When the Fukushima nuclear disaster occurred, it was discovered that the Fukushima area produced 60 percent of the world’s critical auto parts, a large share of world lithium battery chemicals, and 22 percent of the world’s three-hundred-millimeter silicon wafers, all crucial to industrial production. Attempts were made at that time by some monopoly-finance corporations to map their supply chains. According to the Harvard Business Review, “executives of a Japanese semiconductor manufacturer told us it took a team of a 100 people more than a year to map the company’s supply networks deep into the sub-tiers following the earthquake and tsunami [and the Fukushima nuclear disaster] in 2011.”35
Faced with commodity chains in which many of the links in the chain are invisible, and where the chains are breaking in numerous places, corporations are faced with interruptions and uncertainties in what Marx called the “chain of metamorphoses” in the production, distribution, and consumption of material products, coupled with erratic changes in overall supply demand. The scale of the corona virus pandemic and its consequences on world accumulation are unprecedented, with the global economic costs still increasing. At the end of March, some three billion people on the planet were in lockdown or social-distancing mode.36 Most corporations have no emergency plan for dealing with the multiple breaks in their supply chains.37 The scale of the problem has manifested itself in the early months of 2020 in tens of thousands of force majeure declarations, beginning first in China and then spreading elsewhere, where various suppliers indicate they are unable to fulfill contracts due to extraordinary external events. This is accompanied by numerous “blank sailings” standing for scheduled voyages of cargo ships that are cancelled with the goods being held up due either to failure of supply or demand.38 In early April, the U.S. National Retail Federation indicated that March 2020 saw a five-year low in the shipment of twenty-foot equivalents (of containers) in ship cargo, with shipments expected to plummet much more rapidly from that point.39 Airline passenger flights all over the world have decreased by around 90 percent, leading the major U.S. airlines to leverage “the bellies and passenger cabins of their aircraft [in order to redirect them] for cargo flights, often removing seats and using the empty tracks to secure cargo.”40
According to the estimates in early April by the World Trade Organization, the economic fallout from the COVID-19 pandemic would lead to a drop in annual world trade in 2020 by 13 percent in the more optimistic scenario, and by 32 percent in the more pessimistic scenario. In the latter case, the collapse of world trade would equal in one year what happened in the Great Depression of the 1930s over a three-year period.41
The dire effects of the disruption of global supply chains during the pandemic have been particularly evident with respect to medical equipment. Premier, one of the chief general purchasing organizations for hospitals in the United States, indicated that it normally purchases up to twenty-four million N95 respirators (masks) per year for its member health care providers and organizations, while in January and February 2020 alone its members used fifty-six million respirators. In late March, Premier was ordering 110 to 150 million respirators, while its member organizations such as hospitals and nursing homes when surveyed indicated they had barely more than a week’s supply. The demand for medical masks soared while the global supply froze up.42 COVID-19 test kits were also in chronically short supply globally until China revved up production in late March.43
Many other goods are also now in short supply, while in the general chaos warehouses are overflowing with goods, such as fashion clothing, for which demand has plummeted. In the world of just-in-time production and time-based competition, inventories are generally reduced to a minimum to decrease costs. With no slack, auto and many retail supply chains in the United States are likely to see a chronic shortage in supplies by early May. As Peter Hasenkamp, who directed Tesla’s supply chain strategy and now is in charge of purchasing for Lucid Motors, an electric car startup, has stated: “It takes 2,500 parts to build a car, but only one not to.” COVID-19 test kits were in scarce supply in the United States partly because of a shortage of swabs.44 By mid–April 2020, 81 percent of global manufacturing firms were experiencing supply shortages, evident in a 44 percent increase in force majeure declarations by March from the beginning of the year before the emergence of the novel corona virus, and a 38 percent increase in production shutdowns. The result is not only material shortfalls but a crisis in cash flow and hence a huge “spike in financial risks.”45
For today’s multinational corporations, which care little about the use values they sell provided they generate exchange value, the real economic impact of the disruption of supply chains is their effect on value chains—that is, on exchange value flows. Although the full value effects of the global supply-side disruption will not be known for some time, an indication of the crisis this generates for accumulation can be seen in the losses in value that corporations have experienced. Hundreds of companies, including firms such as Boeing, Nike, Hershey, Sun Microsystems, and Cisco, have encountered critical commodity chain disruptions in the last couple of decades. Studies based on some eight hundred cases have shown that the average effect for firms of such a supply chain disruption includes: a “107 percent drop in operating income; 114 percent drop in return on sales; 93 percent drop in return on assets; 7 percent lower sales growth; 11 percent growth in cost; and 14 percent growth in inventories,” with the negative effects normally lasting for two years. The same research indicates that “companies suffering from supply chain disruptions experience between 33 to 40 percent lower stock returns relative to their industry benchmarks over a three-year time period that starts one year before and ends two years after the disruption announcement date. Also, share price volatility in the year after the disruption is 13.50 percent higher when compared to the volatility in the year before the disruption.”46
Although no one knows how all this will fall out in the present, even in the case of an individual firm, capital has every reason to fear the consequences for valorization and accumulation. Everywhere, production is dropping and unemployment/ underemployment is soaring as firms shed workers who in the United States are left simply to fend for themselves. Corporations are now in a race to pull in their commodity chains and provide some semblance of stability in what seems to be an all-encompassing crisis. Moreover, the disruption of the whole chain of metamorphoses involved in the global labour arbitrage threatens to engender a financial meltdown in a world economy still characterized by stagnation, debt, and financialization.
Not the least of the vulnerabilities exposed is what is known as supply-chain finance, which allows corporations to defer payments to suppliers, with the help of bank finance. According to the Wall Street Journal, some corporations have supply-chain financing obligations that dwarf their reported net debt. These debts owed to suppliers are sold by other financial interests in the form of short-term notes. Credit Suisse owns notes that are owed by large U.S. corporations such as Kellogg and General Mills. With a general disruption of commodity chains, this intricate chain of finance, which is itself the object of speculation, is inherently placed in a crisis mode itself, creating additional vulnerabilities in an already fragile financial system.47
Imperialism, Class, and the Pandemic
SARS-CoV-2, like other dangerous pathogens that have emerged or re-emerged in recent years, is closely related to a complex set of factors including: (1) the development of global agribusiness with its expanding genetic monocultures that increase susceptibility to the contraction of zoonotic diseases from wild to domestic animals to humans; (2) destruction of wild habitats and disruption of the activities of wild species; and (3) human beings living in closer proximity. There is little doubt that global commodity chains and the kinds of connectivity that they have produced have become vectors for the rapid transmission of disease, throwing this whole globally exploitative pattern of development into question. As Stephen Roach of the Yale School of Management, formerly chief economist of Morgan Stanley and the principal originator of the global labor arbitrage concept, has written in the context of the corona virus crisis, what the financial headquarters of corporations wanted was “low-cost goods irrespective of what those cost efficiencies entailed in terms of [the lack of] investing in public health, or I would also say [the lack of] investing in environmental protection and the quality of the climate.” The result of such an unsustainable approach to “cost efficiencies” is the contemporary global ecological and epidemiological crises and their financial consequences, further destabilizing a system that was already exhibiting an “excessive surge” characteristic of financial bubbles.48
At present, rich countries are at the epicentre of the COVID-19 pandemic and financial fallout, but the overall crisis, incorporating its economic as well as epidemiological effects, will hit poor countries harder. How a planetary crisis of this kind is handled is ultimately filtered through the imperial-class system. In March 2020, the COVID-19 Response Team of Imperial College in London issued a report indicating that in a global scenario in which SARS-CoV-2 was unmitigated, with no social distancing or lockdowns, forty million people in the world would die, with higher mortality rates in the rich countries than in poor countries because of the larger proportions of the population that were 65 or older, as compared with poor countries. This analysis ostensibly took into account the greater access to medical care in rich countries. But it left out factors like malnutrition, poverty, and the greater susceptibility to infectious diseases in poor countries. Nevertheless, the Imperial College estimates, based on these assumptions, indicated that in an unmitigated scenario the number of deaths would be in the range of 15 million in East Asia and the Pacific, 7.6 million people in South Asia, 3 million people in Latin America and the Caribbean, 2.5 million people in Sub-Saharan Africa, and 1.7 million in the Middle East and North Africa—as compared with 7.2 million in Europe and Central Asia and around 3 million in North America.49
Basing their analysis on the Imperial College’s approach, Ahmed Mushfiq Mobarak and Zachary Barnett-Howell at Yale University wrote an article for the establishment journal Foreign Policy entitled “Poor Countries Need to Think Twice About Social Distancing.” In their article, Mobarak and Barnett-Howell were very explicit, arguing that “epidemiological models make clear that the cost of not intervening in rich countries would be in the hundreds of thousands to millions dead, an outcome far worse than the deepest economic recession imaginable. In other words, social distancing interventions and aggressive suppression, even with their associated economic costs, are overwhelmingly justified in high-income societies”—to save lives. However, the same is not true, they suggested, for poor countries, since they have relatively few elderly individuals in their populations as a whole, generating, according to the Imperial College estimates, only around half the mortality rate. This model, they admit, “does not account for the greater prevalence of chronic illnesses, respiratory conditions, pollution, and malnutrition in low-income countries, which could increase the fatality rates from corona virus outbreaks.” But largely ignoring this in their article (and in a related study conducted through the Yale Economics Department), these authors insist that it would be better, given the impoverishment and vast unemployment and underemployment in these countries, for the populations not to practice social distancing or aggressive testing and suppression, and to put their efforts into economic production, presumably keeping intact the global supply chains that primarily start upstream in low-wage countries.50 No doubt the deaths of tens of millions of people in the Global South is considered by these authors to be a reasonable trade-off for the continued growth of the empire of capital.
As Mike Davis argues, twenty-first-century capitalism points to “a permanent triage of humanity…dooming part of the human race to eventual extinction.” He asks:
But what happens when COVID spreads through populations with minimal access to medicine and dramatically higher levels of poor nutrition, untended health problems and damaged immune systems? The age advantage will be worth far less to poor youth in African and South Asian slums.
There’s also some possibility that mass infection in slums and poor cities could flip the switch on coronavirus’s mode of infection and reshape the nature of the disease. Before SARS emerged in 2003, highly pathogenic corona virus epidemics were confined to domestic animals, above all pigs. Researchers soon recognized two different routes of infection: faecal-oral, which attacked the stomach and intestinal tissue, and respiratory, which attacked the lungs. In the first case, there was usually very high mortality, while the second generally resulted in milder cases. A small percentage of current positives, especially the cruise ship cases, report diarrhea and vomiting, and, to quote one report, “the possibility of SARS-CoV-2 transmission via sewage, waste, contaminated water, air conditioning systems and aerosols cannot be underestimated.”
The pandemic has now reached the slums of Africa and South Asia, where faecal contamination is everywhere: in the water, in the home-grown vegetables, and as windblown dust. (Yes, shit storms are real.) Will this favour the enteric route? Will, as in the case of animals, this lead to more lethal infections, possibly across all age groups?51
Davis’s argument makes plain the gross immorality of a position that says social distancing and aggressive suppression of the virus in response to the pandemic should take place in rich countries and not poor. Such imperialist epidemiological strategies are all the more vicious in that they take the poverty of the populations of the Global South, the product of imperialism, as the justification for a Malthusian or social Darwinist approach, in which millions would die in order to keep the global economy growing, primarily for the benefit of those at the apex of the system. Contrast this to the approach adopted in socialist-led Venezuela, the country in Latin America with the least number of deaths per capita from COVID-19, where collectively organized social distancing and social provisioning is combined with expanded personalized screening to determine who is most vulnerable, widespread testing, and expansion of hospitals and health care, developing on the Cuban and Chinese models.52
Economically, the Global South as a whole, quite apart from the direct effects of the pandemic, is destined to pay the highest cost. The breakdown of global supply chains due to cancelled orders in the Global North (as well as social distancing and lockdowns around the globe) and the refashioning of commodity chains that will follow, will leave whole countries and regions devastated.53
Here, it is crucial to recognize as well that the COVID-19 pandemic has come in the middle of an economic war for global hegemony unleashed by the Donald Trump administration and directed at China, which has accounted for some 37 percent of all cumulative growth of the world economy since 2008.54 This is seen by the Trump administration as a war by other means. As a result of the tariff war, many U.S. companies had already pulled their supply chains out from China. Levi’s, for example has reduced its manufacturing in China from 16 percent in 2017 to 1–2 percent in 2019. In the face of the tariff war and the COVID-19 pandemic, two thirds of 160 executives surveyed across industries in the United States have recently indicated that they had already moved, were planning to move, or were considering moving their operations from China to Mexico, where unit labour costs are now comparable and where they would be closer to U.S. markets.55 Washington’s economic war against China is currently so fierce that the Trump administration refused to drop the tariffs on personal protection equipment, essential to medical personnel, until late March.56 Trump meanwhile appointed Peter Navarro, the economist in charge of his economic war for hegemony with China, as head of the Defense Production Act to deal with the COVID-19 crisis.
In his roles in directing the U.S. trade war against China and as policy coordinator of the Defense Production Act, Navarro has accused China of introducing a “trade shock” that lost “over five million manufacturing jobs and 70,000 factories” and “killed tens of thousands of Americans” by destroying jobs, families, and health. He is now declaring that this has been followed by a “China virus shock.”57 On this propagandist basis, Navarro proceeded to integrate U.S. policy with respect to the pandemic around the need to fight the so-called “China virus” and pull U.S. supply chains out of China. Yet, since about a third of all global intermediate manufacturing products are currently produced in China, most heavily in the high-tech sectors, and since this remains key to the global labour arbitrage, the attempt at such restructuring will be vastly disruptive, to the extent that it is possible at all.58
Some multinationals that had moved their production out of China learned the hard way later that the decision did not “free” them from their dependency on it. Samsung, for example, has started flying electronic components from China to its factories in Vietnam—a destination for companies that are eager to escape the trade-war tariffs. But Vietnam is also vulnerable, because they rely heavily on China for materials or intermediate parts.59 Similar cases have happened in neighbouring Southeast Asian countries. China is Indonesia’s biggest trading partner, and roughly 20 to 50 percent of the country’s raw materials for industries come from China. In February, factories in Batam, Indonesia, already had to deal with raw materials from China drying up (which counts for 70 percent of what was produced in that region). Companies there said that they considered getting materials from other countries but “it’s not exactly easy.” For many factories, the feasible option was to “cease operations completely.”60 Capitalists like Cao Dewang, the Chinese billionaire founder of Fuyao Glass Industry, predicts the weakening of China’s role in the global supply chain after the pandemic but concludes that, at least in the short term, “it’s hard to find an economy to replace China in the global industry chain”—citing many difficulties from “infrastructure shortcomings” in Southeast Asian countries, higher labour costs in the Global North, and the obstacles that “rich countries” have to face if they want to “rebuild manufacturing at home.”61
The COVID-19 crisis is not to be treated as the result of an external force or as an unpredictable “black swan” event, but rather belongs to a complex of crisis tendencies that are broadly predictable, though not in terms of actual timing. Today, the centre of the capitalist system is confronted with secular stagnation in terms of production and investment, relying for its expansion and amassing of wealth at the top on historically low interest rates, high amounts of debt, the drain of capital from the rest of the world, and financial speculation. Income and wealth inequality are reaching levels for which there is no historical analogue. The rift in world ecology has attained planetary proportions and is creating a planetary environment that no longer constitutes a safe place for humanity. New pandemics are arising on the basis of a system of global monopoly-finance capital that has made itself the main vector of disease. State systems everywhere are regressing toward higher levels of repression, whether under the mantle of neo-liberalism or neo-fascism.
The extraordinarily exploitative and destructive nature of the system is evident in the fact that blue-collar workers everywhere have been declared essential critical infrastructure workers (a concept formalized in the United States by the Department of Homeland Security) and are expected to carry out production mostly without protective gear while the more privileged and dispensable classes socially distance themselves.62 A true lockdown would be much more extensive and would require state provisioning and planning, ensuring that the whole population was protected, rather than focusing on bailing out financial interests. It is precisely because of the class nature of social distancing, as well as access to income, housing, resources, and medical care, that morbidity and mortality from COVID-19 in the United States is falling primarily on populations of color, where conditions of economic and environmental injustice are most severe.63
Social Production and the Planetary Metabolism
Fundamental to Marx’s materialist outlook was what he called “the hierarchy of…needs.”64 This meant that human beings were material beings, part of the natural world, as well as creating their own social world within it. As material beings they had to satisfy their material needs first—eating and drinking, providing food, shelter, clothing, and the basic conditions of healthy existence, before they pursue their higher developmental needs, necessary for the full realization of human potential.65 Yet, in class societies it was always the case that the vast majority, the real producers, were relegated to conditions in which they were caught in a constant struggle to meet their most basic needs. This has not fundamentally changed. Despite the enormous wealth created over centuries of growth, millions upon millions of people in even the wealthiest capitalist society remain in a precarious condition in relation to such basics as food security, housing, clean water, health care, and transportation—under conditions in which three billionaires in the United States own as much wealth as the bottom half of the population.
Meanwhile, local and regional environments have been put in danger—as have all of the world ecosystems and the Earth System itself as a safe place for humanity. An emphasis on global “cost efficiencies” (a euphemism for cheap labour and cheap land) has led multinational capital to create a complex system of global commodity chains, designed at every point to maximize the over-/super-exploitation of labour on a worldwide basis, while also turning the entire world into a real-estate market, much of it as a field for operation of agribusiness. The result has been a vast draining of surplus from the periphery of the global system and a plundering of the planetary commons. In the narrow system of value accounting employed by capital, most of material existence, including the entire Earth System and the social conditions of human beings, insofar as these do not enter the market, are considered externalities, to be robbed and despoiled in the interest of capital accumulation. What has mistakenly been characterized as “the tragedy of the commons” is better understood, as Guy Standing has pointed out in Plunder of the Commons, as “the tragedy of privatizing.” Today, the famous Lauderdale Paradox, introduced by the Earl of Lauderdale in the early nineteenth century, in which public wealth is destroyed for the enhancement of private riches, has the entire planet as its field of operation.66
The circuits of capital of late imperialism have taken these tendencies to their fullest extent, generating a rapidly developing planetary ecological crisis that threatens to engulf human civilization as we know it; a perfect storm of catastrophe. This comes on top of a system of accumulation that is divorced from any rational ordering of needs for the population independent of the cash nexus.67 Accumulation and the amassing of wealth in general are increasingly dependent on the proliferation of waste of all kinds. In the midst of this disaster, a New Cold War and a growing likelihood of thermonuclear destruction have emerged, with an increasingly unstable and aggressive United States at the forefront. This has led the Bulletin of Atomic Scientists to move its famous doomsday clock to 100 seconds to midnight, the closest to midnight since the clock started in 1947.68
The COVID-19 pandemic and the threat of increasing and more deadly pandemics is a product of this same late-imperialist development. Chains of global exploitation and expropriation have destabilized not only ecologies but the relations between species, creating a toxic brew of pathogens. All of this can be seen as arising from the introduction of agribusiness with its genetic monocultures; massive ecosystem destruction involving the uncontrolled mixture of species; and a system of global valorization based on treating land, bodies, species, and ecosystems as so many “free gifts” to be expropriated, irrespective of natural and social limits.
Nor are new viruses the only emerging global health problem. The overuse of antibiotics within agribusiness as well as modern medicine has led to the dangerous growth of bacterial superbugs generating increasing numbers of deaths, which by mid–century could surpass annual cancer deaths, and inducing the World Health Organization to declare a “global health emergency.”69 Since communicable diseases, due to the unequal conditions of capitalist class society, fall heaviest on the working class and the poor, and on populations in the periphery, the system that generates such diseases in the pursuit of quantitative wealth can be charged, as Engels and the Chartists did in the nineteenth century, with social murder. As the revolutionary developments in epidemiology represented by One Health and Structural One Health have suggested, the etiology of the new pandemics can be traced to the overall problem of ecological destruction brought on by capitalism.
Here, the necessity of a “revolutionary reconstitution of society at large” rears its head once again, as it has so many times in the past.70 The logic of contemporary historical development points to the need for a more communal-commons-based system of social metabolic reproduction, one in which the associated producers rationally regulate their social metabolism with nature, so as to promote free development of each as the basis of the free development of all, while conserving energy and the environment.71 The future of humanity in the twenty-first century lies not in the direction of increased economic and ecological exploitation/expropriation, imperialism, and war. Rather, what Marx called “freedom in general” and the preservation of a viable “planetary metabolism” are the most pressing necessities today in determining the human present and future, and even human survival.72
(Due to problem of space we have not included the Notes and references. You can get them from www.themonthlyreview press.com, 1 June 2020)
- Neoliberal imperialism is already extremely crisis-ridden, connected with the unbridled plunder of nature and labour. Covid19 like Pandemics are an outcome of this specific character of over accumulation by the most reactionary corporate capital.
- At the same time, the pandemic exposed the extreme vulnerability of the imperialist system, especially the bankruptcy and helplessness it is facing. Firstly, it laid bare that US imperialism that is supposedly leading the capitalist world is too weak- a trend which has been evident over the last few years. As a result, the US led neocolonial-neoliberal order has become unviable.
- This trend is going to be intensified further in the post pandemic situation. The entire imperialist world, except China as of now, based on the statistics provided by various neo-colonial institutions and neoliberal centres, is going to experience the biggest ever contraction, larger than that of the great Depression. As a result, unemployment, poverty, inequality, etc. shall aggravate to unheard of levels.
- According to available datas, in terms of economic strength, US is giving way to China in a well defined manner. In crucial areas like the size of the economy, in volume of global trade, in capital export etc US is far behind. Because of this economic decline, in the coming days US will also find it difficult to maintain its position as history's biggest war machine.
- Because of China's advancement in digitisation and the application of this digital technology to develop a digital currency for international transactions, the supremacy of dollar is going to be challenged.
- Similar to the economic sphere, in the political sphere too US dominance is declining. As manifested in the case of WHO, US finds it difficult to manipulate the UN and it's agencies as before. Even EU is taking an independent position and NATO is weakening while Chinese imperialism is displaying it's capability by leading many political and economic groupings and like OBOR, RCEP, SCO, etc.
- Amidst this shifting global balance of power, as the Communist forces are still weak to pose a revolutionary threat so far, neo-fascism is strengthening, using Covid19 as an opportunity. For this digitial technologies are effectively used. Many Apps developed from China to the rest of the world for tracking, tracing, quarantining and even treating corona patients are now being used as tools for surveillance over people. This is in addition to the taking away of hard-earned democratic and economic rights of workers and oppressed people in manifold ways.
- Secondly, an important trend is the use of digitisation which is the fast advancing 21st century technology for reorganization of the productive and service spheres for super exploitation of the working class by making collective bargaining and unionisation difficult, thereby transforming more and more workers as informal and unorganised.
- Definitely, a weakening of US and possible strengthening of bureaucratic capitalist China will give rise to a change in the form of neoliberal accumulation, including an alteration in many worn-out neocolonial institutions and re-arrangements, the overall trend, in the near absence of a revolutionary Communist initiative strong enough to challenge the ruling system, indicate an intensification in corporate capital's hegemony in more vicious forms. In the emerging situation, the inter-imperialist contradiction, and the contradictions between capital and labour, between capital and nature, and between the capitalist imperialist system with the world people are going to sharpen to unprecedented levels. It shall provide the revolutionary Communists with an excellent objective situation to challenge the ruling system and even to overthrow it; to create a new wave of revolutions. But the subjective forces, the revolutionary communist parties, are still weak and incapable of appropriately intervening in it from the perspective of the working class and oppressed people. This is due to various reasons, including their weakness to come out of the old frames, to seek truth from concrete facts, and to develop the theory and practice of revolution according to present concrete conditions. So, in the immediate present, in spite of many people’s upsurges, more numerous than in the post-2008 crisis, spontaneous and even sometimes led by the Communist forces may break out, all the present visible trends point towards an intensification of corporate capital's plunder of nature and exploitation of working class and oppressed people, once again throwing the entire burden of their crisis to the backs of the toiling masses.
So, the emerging situation calls for concerted action on the part of communist revolutionaries and struggling left forces the world over to build up solidarity and struggle both at international and national levels, putting forward a political alternative based on a concrete evaluation of the emerging situation and with an advanced vision of people oriented development and democracy.
Following India’s bloodiest clash with imperialist China in 45 years, there seems to be no dearth of jingoistic postures from saffron centres, as even Chinese intrusion in to India’s territory is becoming self-evident now. As part of this, a hectic campaign is in full swing for an economic retaliation against China mainly by boycotting Chinese products. For instance, the pro-RSS Confederation of All India Traders (CAIT), has called for an outright boycott of 450 broad categories of imported Chinese items which include 3500 products comprising a whole range of cosmetics, bags, toys, furniture, footwear, watches, etc. so as to reduce their imports by $13 billion or Rs. I lakh crore by December 2021, whereas the value of India’s import from China approximately equals to the staggering figure of around $70 billion or Rs. 525000 crore in 2019-20. However, at the outset, it may be stated that such moves are mainly rhetorical since India’s dependence on and integration with imperialist China in the economic field (of course with its political ramifications) is so complex and deep-rooted that in the immediate future, despite the much trumpeted “Make in India”, and the latest “Atmanirbhar Bharat”, it will be well-nigh impossible for India to resort to a ban on Chinese investments and products.
China’s Transformation as the Largest Imperialist Economy
To unravel this, a brief note on China’s emergence as an imperialist power with its position today as world’s leading capital and commodity exporter would be in order. No doubt, China’s experience of breaking the imperialist hierarchy inherited from the colonial world order is an exceptional and unique phenomenon. China’s political trajectory as a socialist country for more than a quarter century after WW II, its capitalist restoration following seizure of power by bureaucratic bourgeoisie in the late 1970s and its eventual transformation as an imperialist power are all complex processes that require in-depth analysis and, therefore, is outside the scope of this note. Since the beginning of the 1980s, with its catchword of “socialism with Chinese characteristics”, the bureaucratic state capitalism in China began its close integration with private sector orienting state-owned banks toward liberally supporting private businesses. Since the 1990s, there took place a relative shift in this privatisation strategy with more emphasis on FDI inflows that rushed in to take advantage of China’s inexhaustible supply of cheap labour. As the cheapest source of production and as an active participant in the neoliberal international division of labour, this enabled China to increasingly integrate itself with global finance capital. In conformity with the logic of capital accumulation, lucrative real estate, financial markets and other money spinning businesses also flourished as a concomitant. Party-led bureaucratic state was transformed into an apparatus committed to protect the interests of corporate capital at the expense of workers, peasants and toiling people. As estimated by All-China Federation of Industry and Commerce, the share of private sector in Chinese GDP today is more than 60 percent. As of 2018, the entire private sector including both domestic and foreign accounted for70 percent of technological innovation, 80 percent (340 million) of the total employment (783 million) and 90 percent of all Chinese exports.
The bureaucratic state monopoly capitalism of China through various joint ventures between state-owned enterprises and foreign corporate capital went on adapting itself to the most modern and state-of-the-art technologies and in the process succeeded in building up a number of Chinese monopolies exporting capital to almost a hundred countries by the turn of the 21st century and to more than 125 countries as of now. Sino-US bilateral trade during the four decades following capitalist restoration in China had grown by 150 times —quite unprecedented in recorded history — from $4 billion in 1979 to around $600 billion in 2019. With an average annual GDP growth rate of 10 percent since mid-1980s, China rose to the position of the second largest imperialist power when the 2008 world imperialist crisis erupted. Since then, though the growth rate has gone down, according to World Bank’s purchasing power parity estimates, by 2019 China became world’s largest economy with a GDP of around $27 trillion relegating the US to the second position with around $21 trillion. As its manifestation, in all other economic indicators including global trade volume, China had already surpassed the US. And by leading several organisations, groupings and initiatives such as Shanghai Cooperation Organisation (SCO), Regional Comprehensive Economic Partnership (RCEP), Asian Infrastructure Investment Bank (AIIB), Belt and Road Initiative (BRI), BRICS including New Development Bank (NDB), etc., China is already in an enviable position, as the US hold over many post war neo-colonial institutions such as UN and its Specialised Agencies are rapidly loosening. And in tandem with its growing imperialist political-economic clout, China’s military budget had steadily grown from around $14 billion in 2000 to more than $260 billion in 2019, almost four times that of India!
This transformation has its domestic repercussions. The so called “iron rice bowl” of socialism that ensured food, housing health, education and employment for all has been demolished. All the evils of ‘uneven development’ associated with capitalism and market economy are on the ascendance. Destruction of ‘self-reliant’ and ‘self-sufficient’ communes has led to one of the biggest internal migrations in history that resulted in tens of millions of displaced landless peasants becoming unemployed while a section of them who could migrate to urban centres and special economic zones in coastal areas were subjected to extreme forms of super-exploitation jointly by both foreign capital and emerging Chinese monopolies. In 1980, urban dwelling population was just 20 percent; it reached almost 50 percent in the first decade of the 21st century, a trend that gathered further momentum since then. China’s urbanisation, like its whole course of development, is unprecedented. According to latest Demographia’s World Urban Areas Report, there are now 113 urban centres in China that surpass the one million population threshold. In comparison, only North America and the European Union combined have 114 urban areas that surpass one million people. At the same time, large sections of the population still remain in the country-side at subsistence level. Since a social safety net composed of cost-indexed wages, health care and pensions is totally lacking outside the public sector employment, tens of millions of workers are left without access to welfare benefits or minimum standard of living. Migrant workers in construction sites and unorganised sectors live and work in desperate conditions and are paid below normal rates. As a reflection of the extreme misery and destitution suffered by people, all evils of capitalism such as poverty, price rise, corruption, sex trade, child-begging, homelessness and cultural degradation have also become rampant. And the emergence of a ‘deep state’ and political oppression have now become a corollary of the inevitable social tensions arising from the rigorous dismantling of even the remnants of erstwhile socialist achievements.
The concomitant political-ideological dimensions of this economic transformation found its first formal expression in the 16th Party Congress of Communist party of China (CPC) held in 2002 that formally announced extension of party membership to CEOs of corporate companies. Its outcome was well-reflected in the National People’s Congress (NPC) held in 2018 when large number of the delegates elected were from corporate CEOs and super-rich financial elite and wealthy individuals along with the party bureaucrats who have been the sole beneficiaries of the four decades of capitalist restoration. For instance, almost half of the more than 300 Chinese global billionaires (3 times that in India and second only to the US in 2018) whose wealth has appreciated by around 20 percent a year had their berth in higher echelons of CPC. Overall proportion of millionaires and billionaires in party bureaucracy is relatively high compared with their membership in CPC composed of 89 million out of a total population of almost 1400 million. According to China Rich List released by Hurun, the total wealth held by the top 70 delegates to the 2018 NPC was larger than that with the members of the entire US Congress! China’s Gini coefficient estimated at 0.465, - a statistical measure of inequality in which 0 indicates perfect equality and 1 depicts a situation where all incomes go to one person - is one of the highest in the world. In view of corroborative evidences coming from various other sources, today it is difficult to ignore such data as mere guesstimates associated with usual West-sponsored Sinophobia.
As a matter of fact, the reunification of Hong Kong in 1997 and Macao in 1999, both being nerve centres of global finance, trade and speculation, followed by China’s formal entry in 2001 into WTO, often characterised as the third neo-colonial pillar (the other two being IMF and World Bank) were milestones that speeded up its integration with imperialist market and finance capital. As world’s low-cost production base, this integration enabled China to capture substantial share of commodity markets not only in Afro-Asian-Latin American dependent countries, but even in US, its main imperialist rival for world hegemony. At the same time, this Chinese integration with global market has coincided with the emergence of fast moving ‘frontier’ or new generation technologies such as, digitisation, blockchain, artificial intelligence, biotechnology, robotisation, etc. which were practically insignificant in the 20th century. Closely integrated with the bureaucratic state, many Chinese companies became pioneers in economic innovation and application of these technologies to production at a maddening speed. Among them Baidu, Alibaba, Tencent (popularly known as BAT) and Huawei (pioneer in ‘5G revolution’) have now become world leaders in digitisation, the fast-moving frontier technology of the 21st century, and even capable of successfully challenging US-based “Silicon Six” (Google, Facebook, Amazon, Netflix, Apple, Microsoft). For instance, though five years younger than Amazon, the biggest American e-commerce giant, in terms of volume of trade, Alibaba has already eclipsed the former and is now the leading cloud-provider besides being world’s biggest e-commerce company. And backed by the breakthroughs in digital technology, China is also pioneering a digital currency alternative to the hegemony of US dollar in international transactions.
A crucial aspect to be underlined in this context is that mechanical approach to class/property relations and western notions of corporate governance do not fit in with the private sector in China. Chinese bureaucrats have learned lessons from Soviet Union’s eventual disintegration on account of private corporate sector finally usurping power and taking over the regime. As such, Chinese bureaucratic bourgeoisie’s unleashing of privatisation and corporatisation and encouragement to private businesses for generating economic growth, propelling investment and exports, etc., always go hand in hand with party bureaucracy’s strict supervision over the entire process. Party bodies and ‘party cells’ function in every private business, including even foreign enterprises. This intervention is intended to ensure economic growth strictly avoiding the plausible danger arising from any organised alternative to centres of political power.
It also ensures the regime’s close nexus with corporate capital together with constant surveillance over their dealings. According to a 2018 report, around 95 percent of the private enterprises in China had or in the process of having party cells/units in them. And the presence of the appropriate party representative in board meetings of companies is the accepted norm and corporate CEOs holding ‘Communist party’ membership is the general rule.
For instance, Jack Ma of Alibaba, global face of Chinese monopoly capital and corporate philanthropy has been a party member since 1980s, though his membership was openly declared only in 2018. Even Walmart, world’s biggest US-based retail MNC (that at one time depended on China for around 70-80 percent of its merchandise) which is notorious for not allowing unions in its US stores, had party cells in its companies in China. To be precise, driving corporate wealth accumulation and buttressing the bureaucratic state regime are two sides of China’s private sector that is accomplishing the miraculous “success story” of Chinese imperialism.
Alarming Chinese Penetration to Indian Market
In the background briefly stated above, it may be stated that India’s transformation as a market for Chinese products as well as a destination for investments from China is primarily a 21st century phenomenon intertwined with latter’s emergence as the workshop of the world under neo-liberal globalisation. On account of the 1962 Sino-Indian war and disputes such as the 1967 Chola incident, 1975 showdown when Sikkim became a state of India, and the 1987 Sino-Indian skirmish, both diplomatic and economic ties between India and China had not at all been enthusiastic during the 20th century. Obviously, it was China’s formal entry into WTO in 2001 that enabled it to integrate herself with other countries based on her ‘comparative advantage’ that prompted China to explore neighbouring India’s vast market. Consequently, Chinese premier Zhu Rongji’s2001 India visit was duly reciprocated by Indian Prime Minister Vajpayee’s visit to China in 2003. The period that followed witnessed regular visits by both Indian and Chinese delegations for pursuing and signing innumerable bilateral investment and trade deals.
As a result, since 2000, trade between China and India has grown nearly twice as fast as each country’s trade with the rest of the world. In 2008 itself, surpassing US, China became India’s largest trade partner. Meanwhile, bilateral trade between China and India shot up from $2 billion in 2000-01 to $65 billion in 2013-14. Trade (including exports and imports) between China and India during this period was growing at nearly three times the pace of US-China trade. Modi’s tenure since 2014 saw a further boost to trade such that by 2017-18 India’s trade volume with China again rose to $89.76 billion excluding that with Hong Kong ($34 billion). In 2018-19, though bilateral trade marginally declined to $87.07, in that year, India’s trade deficit with China was $53.57 billion (around Rs. 401700 crore) as India’s imports from China were worth US$ 70.32 billion and exports to China were only US$ 16.75 billion. Even today there is little change in India’s huge trade deficit with China. As such, India’s position in India-China bilateral trade is highly unfavourable for India.
According to IMF estimates (based on 2019 data), while China’s exports to and imports from India respectively came to 3 percent and 0.9 percent of its total exports and imports, the corresponding proportion for India was 5.1 percent and 13.7 percent (respective figures for 2020 February were5.33 percent and 14.09 percent). Revealingly, according to 2020 February data, in percentage terms, India’s imports from US at 7.58 percent of its total imports amount to only half of that from China. This depicts India’s relatively high dependence on China than US with whom India has even a strategic military relationship as a junior partner. An item-wise analysis of Indian imports from China also reveals the essence and gravity of this economic dependence. For instance, 76.3 percent of all antibiotics and pharmaceutical products imported today by India is from China. This dependence of India on China is 84 percent for vehicle accessories, 68 percent for nitrogen compounds, 64 percent for diodes and transistors, 63 percent for iron & steel pipes and tubes, 58 percent for electric accumulators, 55 percent for LCD/LED/OLED panels for TVs, 52 percent of insecticides and pesticides, 46 percent of data processing machines, ACs and Fans and so on for several other items. A significant aspect connected with these imports by India is that they also comprise critical raw materials and intermediate items for production and export to other markets. To put it differently, while India depends heavily on imports from China, the latter has no such dependence on India. Hence an economic boycott of China, as stated at the outset, is only of rhetorical value and not at all feasible in the immediate future, especially at a time when India’s growth rate is projected to shrink by 5 percent during the fiscal year 2020-21. And many Indian auto, pharma and electronic companies that heavily depend on Chinese supplies have already raised alarm bells against such a move in the absence of developing reliable alternatives. More revealingly, even US companies in India that relies on raw-materials from China have conveyed their anxiety on carrying on production in view of the reported move to ban Chinese imports.
How “Make in India” Became “Made in China”
From the very beginning, due to its inherent far-right economic orientation, RSS’ servility to imperialist masters, to Britain during the colonial period and then to US in the post-war neo-colonial phase is not at all a debatable issue. Hence, the RSS-led Modi regime’s allegiance to US imperialism is expected to be its normal behaviour. However, though credited with the ultra-rightist ‘Gujarat model’ of privatisation/ corporatisation during his long tenure as chief minister of Gujarat, on account of US visa denial to him following the Gujarat pogrom, Modi could not enter US for many years. Probably, this might have prompted him to cultivate his personal relationship with Chinese rulers by visiting China four times as chief minister of Gujarat, the only chief minister from India doing so, and again visiting China five times during 2015-18 as prime minister of India.
Modi’s five-day China visit in November 2011 was historic as it was against Manmohan government’s stand of not permitting him to travel to China. Modi went to China via Hong Kong and, according to reports, to the great embarrassment of the Indian ambassador, landed up at the Indian embassy in Beijing and during his visit met many Chinese companies willing to invest in Gujarat. This was followed by Vibrant Gujarat Global Investor Summit in 2013, and by 2014, could arrive at a deal on Chinese investments worth Rs. 9000 crore in the state. Apart from many Chinese firms such as Great Wall Motors Company Ltd and Shanghai Automotive Industries Corporation agreeing to set up mega vehicle manufacturing plants in the State, of particular importance was regarding the strategic Chinese investment in Mudra port owned by Adani. While ports like Mumbai and Tuticorin were not allowed to seek Chinese investment on account of security concerns, China’s investment in Mudra port remained an exception. In fact, the large-scale rolling-out of red carpet for Chinese investments in Gujarat was despite objections raised by the then UPA government at the centre. And as part of making Gujarat a Chinese investment hot-spot, Modi, in fact, went to the extent of initiating even Mandarin (China’s official language) coaching institutes and courses in universities in Gujarat.
No doubt, this “Gujarat-Cheeni Bhai Bhai” process accelerated once Modi became prime minister in 2014, and on his election Chinese media continued to eulogise the ‘Gujarat model’ followed by the 2014 visit of Chinese president Xi to Ahmadabad leading to a surge in Chinese investments in Gujarat and conversion of India as a dumping ground for Chinese exports. By the time of 2019 Vibrant Gujarat Summit, the committed investment by firms from China including Huawei were to the tune of Rs. 17000 crore in addition to proposals for a Rs. 21400 crore investment led by the Chinese solar giant East Hope Group in Dholera Special Investment Region along with an Adani-owned power plant at Godda in Jharkhand. This was over and above the June 2017 Rs. 2250 crore deal that Adani had with Chinese firms. Of course, this Chinese connection had other dimensions too. As per a document, revealed through Freedom Information (www.theguardian.com/ environment/February 2018; www.ft.com), Adani, Modi’s closest friend even sought Australian ministers’ help to write to a Chinese government agency vouching the controversial Carmichael coalmine project in Australia.
Meanwhile, after his ascendance as prime minister, the immediate initiative that Modi undertook was a pan-India extrapolation, this far-right ‘Gujarat model’ as prelude to the rapid transition from ‘Manmohanomics’ to ‘Modinomics’. At the same time, in conformity with RSS’ historical allegiance to US imperialism, even while maintaining his opportunistic Chinese link and camaraderie with Xi in relation to the economy, during the past six years Modi has strengthened India’s position as a strategic junior partner of US in latter’s geo-political contradictions with China by signing many military-to-military partnerships with Washington. Meanwhile, after a thorough overhauling of the last vestiges of Nehruvian state-led development paradigm including the abolition of the 64-year old Planning Commission, thereby transforming the state as a corporate-facilitator, Modi put forward the attractive formulation “Make in India” on September 25, 2014, with much fanfare. Its objective was to transform India as world’s “sweatshop” emulating the Chinese experience as a low-cost workshop of the world. The aim was to project India before the West as an alternative cheap-labour manufacturing hub by improving “ease of doing business”, removal of all barriers to the free entry and exit of foreign capital and a series of investor-friendly measures such as aggressive liberalisation of labour, tax and environmental laws for unfettered plunder of labour and nature by MNCs and their junior Indian partners. Coupled with Modi’s high-profile tours to neoliberal centres, the “Make in India” prognosis, amidst the pseudo-nationalism of the ruling regime, laid down the roadmap for India’s dependence on international capital at an alarming pace.
Obviously, even from a neoliberal perspective, the “Make in India” program, unlike the Chinese experience of making use of western capital in the initial phase of its capitalist transformation until the turn of the 21st century, was totally devoid of any domestic efforts to boost productivity and competitiveness. By utilising the ‘red-carpet for investors’, foreign companies wasted no time to enter the country and gobble-up precious natural and mineral resources and strategic public assets and critical infrastructure overheads through the “public-private-partnership” (PPP) route. And in accordance with the logic of corporatisation today, instead of developing employment-oriented productive spheres, capital that rushed in from the West, mainly from US with relatively obsolete manufacturing technologies, was only interested in ballooning the money-spinning speculative sectors thereby keeping up the bullish trend in the stock market and sky-rocketing of the Sensex. Accordingly, many concessions extended to US MNCs under pressure from Trump administration have led to a ‘financialisation-stagnation trap’ instead of adding up to real production, and this has been a contributory factor for unprecedented unemployment and economic downturn in India since 2014.
It was in this context that China, as the leading imperialist economy with up-to-date production technologies and whose manufacturing contributes around 30 percent to GDP (for US the corresponding share is only 11 percent) has been in a better position to take advantage of Modi’s “Make India”. The background for this was already there through Modi’s friendship with Chinese president Xi including his meeting with the latter as many as on 18 occasions! Cheaper and more efficient technology relative to that of the West has been a comparative advantage for China for grabbing projects in India. Probably, an interesting example in this regard is that of Indian Army’s 2017 contract with Beijing Protech New Material Science Company Ltd for the import of material fabric and boron carbon white powder essential for manufacturing bullet proof jackets (thepolicytimes.com). Earlier these raw material/ intermediate goods were imported from the US and Netherlands; but the shift was necessitated as the Chinese imports were 60-70 percent cheaper and the decision was taken following a series of firing tests to check quality in tune with the standardisation laid by Bureau of Indian Standards. When the usual security question regarding this Chinese deal came up, V K Saraswat, NITI Aayog member and former DRDO chief explained the government’s ‘helplessness’ thus: “It is a market force; we cannot do much about this. The only thing is if we find that the bulletproof jackets produced by the Chinese material are not up to the mark, then we will have to say, as of now there is no such reports.”Though a report on China printing Indian currency along with that of Brazil, Poland, Thailand, Malaysia and Sri Lanka (China is the only country that can perform the intaglio style of printing simultaneously on both sides of a banknote using a Colour Dance to improve note’s security) was there in the media (Deccan Chronicle, April 14, 2018), an official on condition of anonymity later denied it.
It is this “law of market” dictating neoliberal globalisation today that ultimately became decisive in unravelling ‘Make in India’ as ‘Made in China’. Despite Modi regime’s intensified military integration with US transforming India as former’s strategic base for its Indo-Pacific machinations directed against China, the US obsolescence in many badly needed technologies coupled with their high cost enabled China to effectively displace the US from many investment spheres. Accordingly, total Chinese investments in India rose from $1.6 billion (Rs.12000 crore) in 2014 to $8 billion (Rs. 60000 crore) in the beginning of 2020. If the planned or proposed investment is also added to this, the figure will be more than $26 billion (nearly Rs. 2 lakh crore; on the other hand, cumulative Indian investment as of now is estimated only at Rs.7000 crore). However, according to many observers, a major part of Chinese capital investment is often “rerouted”, that is from third country sources such as Singapore, which is technically the largest source of foreign investment for India today. During the UPA rule, Mauritius had been India’s biggest FDI source, which was mainly camouflaged US capital export to India (for taking advantage of the tax-avoidance treaty between India and Mauritius). Now under Modi regime, Singapore is replacing Mauritius as the biggest capital exporter to India may also be read along with India’s growing economic dependence on China. However, reliable data on this aspect are few and far between.
Now, coming to the concrete instance of Chinese investment with its thrust in the technology sector, the picture is too complex. In 2008 itself, India (Bangalore) with 1000 employees was the biggest foreign destination for the Shenzhen-based Huawei Technologies Company Ltd, world leader of 5G which (together with AI) is envisaged as the most strategic frontier technology. It is already reported to have carried out 5G trials in India much against the advice of Trump administration, though its future course of action in the wake of border dispute is uncertain. After Modi coming to power, as estimated by the Gateway House, leading Chinese tech MNCs have put an estimated $4 billion (Rs. 30000 crore) in Indian start-ups. Within five years of Modi rule, by March 2020, 18 of India’s 30 unicorns (unicorn is a start-up company valued at over $1 billion) are Chinese funded. Other 92 start-ups with less investments are also funded by Chinese companies.
Chinese software companies like Alibaba, Bytedance, Tencent, Huawei, ZTE, mobile companies like, Xiaomi, Oppo, Vivo, Oneplus, Coolpad, Motorola, LeEco, Lenovo, Meizu, Honor, Gionee, Gfive, Hair, TCL, and automobile giants such as Volvo, SAIC, Nippon, Shanghai Electric, Beijing Automotive, WISCO, China Dongfang, have already established there deep roots in India. Didi, Chunxing, Shunwei Capital, Fosun Capital, China-Eurasia Economic Cooperation Fund are well-known Chinese MNCs who have substantial investments in some of the important Indian start-ups such as Paytm, Ola, Snapdeal, Swiggy, Flipkart, MyDermacy, Hike Messenger, IBIBO and Make My Trip, Dream 11, Byju’s App, BigBasket,Delhivery, Oyo, PolicyBazzar, Quikr, Rivigo, Uddan, Zomato, etc. TikTok, the Chinese video app, has 200 million Indian subscribers and has overtaken the US-based YouTube in India. Alibaba, Tencent and ByteDance are in the process of overtaking the US giants Facebook, Amazon and Google in India. Chinese smartphones like Oppo and Xiaomi controls around 72 percent of Indian smartphone market leaving South Korean Samsung and American Apple far behind; and four out of the five top mobile phones in India today are Chinese brands. And unlike comparable investments from other imperialist powers, since Chinese investments are in fast moving frontier technology areas having complex linkages, their impact is considered to be disproportionate to the apparent size of such investments. In this situation, it is left to readers to ponder over whether Indians today can afford to boycott Chinese products.
Of course, the aforesaid ‘Chinese connection’ with “Make in India” is more explicit with respect to former’s domination in frontier technologies including digitisation. For instance, an important component of “Make in India” has been “Digital India” that too launched by Modi on 1 July 2015. But the last five years’ history of digitising India including Modi’s experiments with digital transactions amply reveals India’s abject dependence on China for the essential digital tools and digital infrastructures required for them. Even the ArogyaSetu App, India’s contact-tracing app to combat COVID-19, is modelled after the ‘authoritarian’ Health Code App of China. According to an MIT Technology Review, among 19 countries that designed similar apps, India belong to the category of the three countries, other two being China and Turkey, where the app poses greatest risks for user privacy. Even though India still depends on the US technology giants for a major portion of the digital software needed, Chinese monopolistic hold over the required digital hardware is explicit. A typical example is that relating to the swiping machines or PoS terminals which are indispensable for the ongoing digital payments/cashless transactions taken up by the regime as its flagship program.
In this regard, almost the entire PoS machines (around 3500000) in India today were made in China by two companies, Veriphone and Ingenica and directly exported to India. According to data published by an import tracking website Zauba.com, Ambani, India’s largest corporate player and very close to Modi together with Adani, have imported 435000 new 4G SIM cards from China. It is often said that through Jio, Ambani is trying to replicate the “Alibaba model” in India. Still there is no dearth of calls for boycott of Chinese products from far-right saffron quarters!
Along with this, Chinese capital’s penetration in many sectors of industry and engineering including solar power generation equipment, chemicals, aluminium, animal feed, automobile, metallurgy, construction, rail and port construction, etc. is regularly taking place. In the banking sector too, the People’s Bank of China (PBOC) already has a series of moves in India.
Recently, PBOC has increased its stake in Housing Development Finance Corp. Ltd (HDFC) in India. Even the 600ft high Patel statue, Modi’s towering tribute to Patel called “Statue of Unity” constructed at a cost of Rs. 2990 crore, is not free from the stamp of China. Announced in 2010 when Modi was Gujarat chief minister, but completed after his ascendance to prime ministership, the entire 6500 bronze panels weighing 1700 metric tons were cast in Jiangxi Tongquing Metal Handicrafts Co. Ltd, as India lacks such facilities.
By Way of a Conclusion
The above is only a bird’s eye view on India’s dependence on China and other imperialist powers for the emerging technologies. No doubt, the pitiable Indian situation is not an overnight development. When the country was opened up for globalisation a quarter century ago, its industrial and manufacturing system was characterised by extremely low productivity mainly on account of technological obsolescence. The crony capitalism-corporate-politician-bureaucrat nexus- oriented towards quick-yielding money spinning businesses and speculation that flourished since then had little interest in applying science and technology to production appropriate to the country. While India is world’s second largest smartphone market, it is too pitiable that the country is still incapable of manufacturing any of the phones itself. While R&D expenditure in imperialist countries is between 2.5 and 2.75 percent of GDP, the same in India is still less than one percent on an average. Here too, China is the global leader with almost 20 percent of total world R&D expenditure as of now. In accordance with its geopolitical global ambitions, the 2020 National People’s Congress of China has launched the “Made in China 2025” and “China Standards 2035” initiatives with an astounding $1.4 trillion (approximately 70 percent of India’s current GDP) public spending program to further shore up its domination in industry and frontier technologies.
On the other hand, India’s PSUs which were capable to undertake R&D even in advanced semiconductors were systematically dismantled or undermined, while the crony capitalists who made fabulous wealth appropriation through speculative corporatisation have little interest either in heavy industries or in technology development. Meanwhile, under the post-truth prognoses of “Make in India” and “Atmanirbhar Bharat”, the Indian private corporate sector is encouraged for technology imports through foreign collaborations and joint ventures. And the MNCs from China, US, Japan and other countries that are rushing in under the liberalised atmosphere in IT, biotechnology, pharmaceuticals (and revealingly not in heavy industries) and in similar other areas are not all willing for technology transfer or up-gradation here. COVID-19 has once again underlined that no country can move towards self-reliance without substantial investments in public health, public education and research and development. For a country of India’s size and diversities, there is no model that can be copied from abroad. Dependence on private corporate sector, financing from external sources, and offshore manufacturing bases at the cost of planned government intervention with appropriate people’s participation is becoming suicidal for India. The ongoing border dispute with imperialist China has exposed this vulnerability of India more than ever, and it is high time on the part of all progressive democratic forces to seriously think over a viable political alternative to this deplorable situation.