The Combination of Capitalism’s Four Crises

Economic - Social - Imperialist and Ecological

 

The Economic Crisis

 

Paced by a succession of cyclical crises, capitalism has seen its rate of profit fall since 2014 in the main economies of the Western world, a fall that heralded the coming recession that the pandemic has only accelerated, as shown in graph 1 below:

Graph 1 Profit rates in the US

The current challenge for the ruling class is to restore the profitability of its capital. Several means are being deployed, ranging from the most conventional, such as austerity measures, social budget cuts and multiple pension ’reforms’, etc., to the most perverse, such as the use of inflation and rising interest rates, which constitute formidable taxes on wage earners (see the article Inflation, interest rates and the distribution of wealth in this issue):

Graph 2 UK inflation, 11,5% in December 2022

This inflation erodes the proletariat’s standard of living all the more, as it is much higher in basic foodstuffs, as shown in graphs 3 and 4 for the UK and France, yet these are more important in the budget of a low-wage household:

Graph 3 UK – Total and food inflation

Graph 4 Inflation in France total and food

All these austerity policies are combining to drive real wages down (graphs 5 and 6) and spur renewed class struggles in several Western countries:

Graph 5 UK – Fall in real wages when the red curve is below zero: between 2008 and 2015, in 2017 and since 2022

Graph 6 FR – Fall in real wages during the subprime crisis (2008), during the pandemic (2020-21) and since May 2022

 

Where is the class struggle at?

 

This upturn in social conflict in certain countries (graph 7) contrasts with the decline in social conflict over the past half-century – 1974-2022, graph 8:

Graph 7 UK – Soaring social conflict in 2022

Graph 8 Strike index in 16 Western countries [1]