|Last update on 1 May 2020|
|WHAT DISTINGUISHES OUR PARTY – The line running from Marx to Lenin to the foundation of the Third International and the birth of the Communist Party of Italy in Leghorn (Livorno) 1921, and from there to the struggle of the Italian Communist Left against the degeneration in Moscow and to the rejection of popular fronts and coalition of resistance groups – The tough work of restoring the revolutionary doctrine and the party organ, in contact with the working class, outside the realm of personal politics and electoralist manoevrings|
MAY DAY 2020
Capitalism is responsible for the losses caused by this epidemic. In all continents the chaotic cramming of rural people, in search of a wage to live on, in the frightening and insane urban agglomerations of capitalism, and the convulsive migration of people makes any preventive care impossible.
For years, medical science has predicted the worldwide spread of a new virus and its dire effects. However, epidemics can neither be avoided nor contained within present-day society. Capital, always in search of immediate profit, has no interest in predicting and preventing. It has not set aside adequate stocks of medical devices and has not trained an adequate number of medical personnel. Indeed, it has drastically reduced them everywhere, forcing them into intolerable overwork; it has closed many hospitals and turned others into “companies”. Its imperative is always to save on the maintenance and care of the working class.
The expected contagion has finally arrived, upsetting a humanity completely unprepared to face it and shattering the latest misplaced certainties about capitalism’s ability to protect health and life on the planet.
In the face of the universal scourge, which can only be attacked with a coordinated world-wide plan of science and solidarity, each state does its own thing. Worse, the crisis intensifies the competition between national centers of capital and their hateful and inhuman selfishness. It exacerbates the trade war in the fear that competitors from other countries will take advantage of the situation to deprive them of market shares. In this war between national bourgeoisies, workers have nothing to gain and everything to suffer.
Industrialists have postponed the closure of factories to the point where further delay was impossible: from China to Italy and France, to the United Kingdom and to the United States, which has seriously extended the contagion. Even when measures to close commercial and recreational activities were no longer postponed, the managers of the majority of industries found ways to circumvent the rules to continue production, apart from companies where it was convenient to close, finding easy loopholes in the ambiguous rules of governing blocs.
So, they forced workers to go to the factory, even in industries that have nothing to do with the health emergency, such as steel production, and to flock onto public transport, grossly dividing society along class boundaries: proletarians today are no longer even masters of their own lives. As in war, they must sacrifice themselves to the god of the bourgeois, profit.
While factories are kept open, strikes and worker assemblies are prohibited. The unions, which have sold out to the regime in the name of “national solidarity”, endorse the bourgeois dogma that reducing production “is not an option”. Be content with a little more soap and masks: a few dollars.
And it is true. In order to continue generating and appropriating profits, capitalists must infinitely grow the scale of production. For this reason, each company, without any agreement with the others in the sector, indeed at war with them, pushes the rhythm and scale of work to the maximum, in the vain hope of being able to find a buyer for the crazy growth of goods of all kinds, a deranged and anarchic system.
Capitalism does not produce based on what is needed; it produces based on the expected profit. The majority of goods produced therefore have no social utility and increasingly penalize the workers who manufacture them, the consumers who are driven to use them, and the environment, which is unnecessarily cluttered and intoxicated.
This irreparable and obvious absurdity must necessarily block all the apparatus for the reproduction of capital and commerce with increasing frequency. It is now a single and closely interconnected global machine, a monstrosity in which up to 95% of activity is useless or harmful.
In fact, in the course of the past year, well before the outbreak of the epidemic, the general, historical, centuries-old, inescapable crisis of the capitalist mode of production had arrived punctually and was already affecting all spheres of life and society.
So, it was not the plague that caused the crisis. Sanitary isolation, which is blocking the consumption of all the goods that are not really necessary for life, around the world and simultaneously, amplifies the pre-existing overproduction of goods, and is almost bringing the infernal cycles of capital accumulation to a standstill.
The panic spread among the bourgeoisie, who ran to sell on the stock exchange, while entrepreneurs were horrified at the decline of their profits. Desperate capitalists in all countries appeal to the State for orders, credits and commercial protection, as well as to help them defend against the workers’ struggle. But states are nothing more than associations between capitalists and, in the end, they only derive sustenance from capitalist production. They are not above the economic laws of capitalism: they can only transfer wealth from one part of the ruling classes to the other. Or anticipate something that must come back sooner or later.
The failure of this political, economic, social system is so evident that even many bourgeois, in the scientific, political and religious fields, are calling for its profound reform: a different relationship with nature, a different way of producing and a different choice of what to produce: “hospitals, not weapons”, they say. All empty talk. As soon as the emergency is over, and maybe even before, everything will go back to business as usual. This system is as absurd as it is incapable of reform.
The ruling classes will not peacefully surrender their power or give up their petty privileges, the immense profits and the repressive paraphernalia of their states.
The present upheaval of the rhythms of life must not only teach us the failure of capitalism, but that the working class can do without capitalism, this entire social and economic system. It is the bourgeoisie that needs the working class and not vice versa.
The international anti-worker solidarity of the bosses, who attack workers’ very existence, must be opposed with the international solidarity of the working class fighting for its emancipation and for the salvation of all humanity.
The working class will have to mobilize in all countries to defend itself
from the disastrous effects of this crisis, to impose its long-standing
demands through struggle:
- wages in full for the unemployed
- generalized reduction of working hours for the same wages
- regularization of the status of immigrant workers
- free health care for all workers.
The working class, well organized in its true class unions and well directed by its party, the custodian of its long-established internationalist program, must succeed with its revolution in breaking through the thick shell of prejudices and forces of repression that still imprisons the new, communist society, which will be classless and stateless, and which is ready, robust and complete to free itself and spread to all the countries of the world.
After weeks of dithering in the face of the impending Covid-19 pandemic, and talk of managing the waves of infection to “build up herd immunity”, there were panic measures introduced to require social distancing and whole industries were closed down. Financial measures were announced to pay for the furloughing of millions of workers, with the state paying 80% of the basic salary. Those who would not qualify for the furloughing scheme were to claim unemployment and sickness benefits. The basic rate for these benefits is so low that the Government added an extra £20 a week to these basic rates for a year in order for those claiming the benefits to survive at all. A three month “holiday” on payments for credit agreements was rushed through and now everything is on hold for the moment. Meanwhile thousands of workers have been dying, often because of the lack of protective equipment in hospitals, in transport and other essential services, while daily government briefings try to claim: “We are all in this together!”
Vast sums of money are being provided to businesses to ensure their survival. The Government and the Bank of England is producing money out of thin air to keep the economy on life support. Some on the so-called left are fascinated by this extension of state spending, and state support for industries, as some kind of social democracy in action. The new “renovated” Labour Party under Sir Keir Starmer, and trade union leaders, are just aching to get involved in such activities. But soon all these state finances will have to be paid for, and it will be taken out of the working class. Then it will be even more important for the workers to be organised independently for their own interests.
Organise as a class, think as a class, act like a class!
160 workers in Sanel Electronics factory in Maltepe, Istanbul, members of Birlesik Metal (United Metal - DISK) Sent on strike after one of them tested positive for coronavirus, but the necessary precautions weren’t taken by the bosses who decided to continue production. [April 1]
An unknown number of workers in the Fontana Mold Factory in Gebze went on strike after one of them was hospitalized with the suspicion of corona virus. The workers are waiting for the results to go back to work. [April 1]
Workers in Sarkusyan factory in Gebze, also organized in Birlesik Metal, went on strike after one of the workers tested positive for Coronavirus. [April 2]
Workers of Valfsan Valve Factory in Tuzla Industrial Zone, Istanbul, also members of Birlesik-Metal went on strike too after one of them tested positive for coronavirus. Apparently it’s rumored that the representative of the DISK union is saying the workers will return to work the next day. [April 2]
2000 workers in Akar Textile, located in Çigli Organized Industrial Zone, Izmir, members of Deriteks (Leather and Textile Workers Union - Türk-Iş Confederation) went on strike after one of them tested positive for Coronavirus. The bosses threatened the workers with firing them, while their henchmen armed with clubs attacked the workers. [April 4]
Workers in Melike Textile in Antep’s 4. Organized Industrial Zone went on strike after it was rumored that two of them tested positive for Coronavirus. Consequently the factory administration declared they stopped work for two weeks. [April 4]
Oakland, California: Dockers Refuse to Work Over Safety Conditions demanding better sanitation for themselves and local neighborhoods from Cruise Ship Covid-19 contamination. [March 20]
Bath, Maine: Workers at the country’s largest Naval shipyard struck to call for it to be shut down. [March 24]
Lynn, Massachusetts: "Workers at a jet engine factory stood six feet apart at a protest outside the facility, following social distancing guidelines while calling on General Electric (GE) to reverse its recent decision to lay off thousands of workers and instead put them to work building badly-needed ventilators for coronavirus patients. In nearby Boston, GE employees also marched six feet apart to their company’s headquarters with the same demand". [March 28]
Tampa, Florida: McDonald’s workers walked out on the morning of March 30 after being told not to wear masks and gloves in their store because it made customers uncomfortable. Soon after, workers in St. Louis, Missouri and Memphis, Tennessee similarly walked out when they found out their hours were dramatically cut.
Baltimore, Maryland Wastewater workers strike demanding better safety conditions. [March 31]
Souderton, PA: Workers sicked out en masses at JBS Meatpacking; forcing them to shut down. [Week of April 1st]
USA Nation-wide: Grocery delivery service Instacart on Thursday announced plans to distribute health and safety kits to its shoppers after they walked off their jobs earlier this week. The company says it will provide each full-service shopper with a reusable face mask, hand sanitizer and a thermometer. [April 4]
Los Angeles, California: Cooks and cashiers at a Crenshaw Boulevard McDonald’s in Los Angeles announced a strike after a co-worker tested positive for Covid-19. They were demanding a full two-week quarantine with pay. [April 5]
Nationwide: Workers for Target Store’s delivery service Shipt went on strike. They demanded $5 of hazard pay per order, 14 days of paid sick leave for all workers regardless of whether they’ve received a positive coronavirus test, personal protective gear for all gig workers, and a return to a clear, commission-based pay model. [April 7]
California: Workers from Burger King, Taco Bell, Domino’s, Pizza Hut, Subway, Popeye’s, El Pollo Loco, and WaBa Grill will participate in the walkout, which was inspired by two strikes earlier this week at McDonald’s locations in San Jose and Los Angeles, where two workers have now tested positive for coronavirus. [April 8]
King of Prussia, PA: Amazon workers strike over unsafe working conditions. [April 8]
Seattle, Washington: Docks Shut Down Shipping Terminal After Co-Worker Gets Covid-19. [April 9]
San Diego, California transit workers call out sick. [April 10th]
Bawley, CA: One World Beef workers Strike for Sanitary Conditions After Coworker Test Positive for Covid-19. [April 14]
Chicago, Illinois Fast Food Workers from 50 locations strike over Covid-19 safety. [April 15]
Renton, Washington: Boeing factory workers refuse to show Workers report many Boeing workers refuse to return to work due to Covid-19 concerns. [April 20th]
Nationwide: Over 300 people called out of their shifts at 50 Amazon fulfillment centers on Tuesday. [April 21]
Wallula, Washington: Tyson beef workers absent, scores of Covid-19 cases and community concerns about infections there. [April 23rd]
Portland, Oregon: 210 Nabisco workers Wildcat for contract: On April 3, graveyard shift workers started leaving early, and a majority of day and swing shift workers stayed off the job, shutting down all five snack production lines. The next two days, enough workers stayed home that only one line was able to restart.
Greely, Colorado: Hospital Couriers Delivering Covid-19 Samples Strike Over Lack of Protections. [April 8]
Daleville, Alabama: Union private defense workers refuse to build missles - employees have refused to work despite the Defense Department directive, and that the union is advocating for them to be spared disciplinary actions. [April 2020]
Shreveport, Louisiana sanitation workers stage sickout amid coronavirus. [April 13]
Norfolk, Virginia: Non-union General Dynamics contractors doing electrical repair on Navy ships refused to work due to conditions and worker death. [April 14th]
Waterloo, Iowa: Hundreds of Tyson Fresh Meats Workers Sick-Out. [April 15th]
Waynesboro, Georgia: Nuclear power plant construction workers absent over Covid-19. [April 16]
New York and New Jersey: Building doormen, facility workers and Janitors strike at dozens of buildings. [April 16]
Baton Rouge, LA: Bus drivers have warned the mass transit agency that member workers have the legal right to refuse hazardous work. [April 17th]
Phoenix, Arizona: Truckers protest dropping wages during the pandemic. [April 24]
Los Angeles, California: Truckers slow LA highway traffic to protest dropping wages during the pandemic. [April 24]
Logansport, Indiana: "Tyson Pork Workers close the plant because of ongoing absentee issues and community concerns". [Week of April 24th]
Shakopee, MN More than 50 Amazon warehouse walk out after management revealed two more cases of Covid-19 and unjustly fired another worker leader". [April 26th]
Richmond, Virginia Bus Drivers Sick Out:"Nearly half of the necessary bus driver workforce did not show up for their 4:30 am. shift. [April 27]
Crete, Nebraska: An estimated 50 workers at the Smithfield Foods pork plant walked off the job in protest after it was announced that the plant would stay open". [April 28]
Speculators care about predicting the price of oil in three or six months in order to profit from the fluctuation in prices. You buy a supply of oil at a certain price, often with money on credit and without cover, betting that at the time of delivery the quotation will have increased. The difference between the purchase price and that at which oil can be resold turns into a financial profit.
In the fourth chapter of the first volume of "Capital", Marx had already explained that the bourgeoisie’s dream has always been to go from the M-C-M cycle to the M-M, avoiding the production of commodities. In the case of futures, the commodities do not change in value; as what occurs in a production process with the addition of surplus value to machinery, semi-finished products and raw materials. Here you only bet, in those casinos that are the financial markets where futures and derivatives are exchanged.
Today however, forecasts of the barrel price of futures already traded at three or five months are two or two-and-a-half times higher than today’s prices. Why did the lords of high finance do such damage to their accounts? Why didn’t they predict the imponderable manifestation in the form of the coronavirus?
Capital cannot survive except by means of an unceasing expansionary process. But the limit to accumulation is in capital itself. Smooth production progress without cyclical crises is therefore impossible. It is equally impossible for the bourgeoisie to plan in the long term. Within this there is already the implicit admission that the future does not belong to them.
The economist par excellence of growth and intervention, John Maynard Keynes joked ironically about the doctrine of liberalism: "in the long run we are all dead". They, the cynical and desperate bourgeoisie, who chase the moment, will all be dead! The species remains. We Marxist communists, alive and kicking for two centuries, evaluate the economic and social processes in their long historical evolution; certain of the revenge that our theory will give us over the doctrines of their dead economic science.
Therefore, the ruling class in particular, even that of an imperialistic economic power, is unable to inscribe its energy policy usefully in certain guidelines.
The economic mechanism of rent, and in particular that of differential rent, already described by David Ricardo at the turn of the eighteenth and nineteenth centuries, was applied by Marx himself, who inserted it into his much more solid and organic theoretical construction.
When you take advantage of a mineral resource such as oil, you come across a form of income completely similar to that of agriculture. One field can have a higher quality oil than another, or it can be extracted from shallower wells, using less manpower and fewer technical resources. The field more within reach of the drills will offer an additional profit, a differential rent.
But on international markets the price of the various qualities of oil, the best-known being Brent Crude and WTI (Western Texas Intermediate), is also determined by other factors besides the cost of production. Against the background of all the tensions that are gathering on the commodity markets, its importance is played by the "liquidity available to economic operators", namely: excess capital in search of some speculative valorization.
Yet the mechanism of differential rent remains as the element that most influences prices. As manufacturing output grows, the demand for oil rises accordingly. Its price then also grows because a temporary supply shortage may occur, but mainly because the expansion of the productive base requires the exploitation of inferior deposits, which drives higher costs.
This is the case of the so-called shale oil, the oil from bituminous shale extracted mainly in the United States and Canada, which necessitates very high exploitation costs in relation to those of the Persian Gulf countries. In Iraq and Saudi Arabia, extraction costs are generally below $3 a barrel; if these are added to the general and transport costs, they will reach $9. In the United States however, opening a new shale oil field for exploitation becomes profitable with a market price above $48-52. If the price falls below $27, it is not worth exploiting the existing wells.
If a barrel of crude oil produced in Saudi Arabia at the beginning of January of this year could be sold for $60, against a production cost of $9, Aramco, the Saudi state-owned oil company, cashed in more than $51 in rent, over 5 times the initial investment.
This sorcery is achieved thanks to the fact that the Saudi state, monopolist owner of the best wells, appropriates the value of their superior product, obtained with the same capital investment, compared to the worst wells. Marxist theory identifies three classes on the basis of production relations: the proletarians who receive a wage, the capitalists who receive a profit, and the landowners who receive rent. The historical tendency is to a certain organic confluence between rent, interest and profit in the large financial groups, which consist of banks, industries and landowners at the same time.
In the oil industry, profit and rent have reached an agreement to accumulate immense wealth and great weight in the international economy and politics. We studied this topic in the article “Il petrolio, i monopoli, l’imperialismo”, published in 2013.
As early as the 1970s, capitalism entered a chronic crisis, particularly in manufacturing industry caused by the low rate of profit, which was due to the high organic composition achieved in mature capitalism. Huge masses of capital were then transferred to the oil industry, thanks also to the huge pressures following the first oil shock of 1973.
Since then the interminable series of wars that have battered the Middle East are essentially explained by the contention that has seen the major imperialist powers and the producing countries as protagonists, all interested in shares of oil revenues. A permanent conflict has systematically escaped any attempt at concerted management, yet another demonstration of the impossibility of quelling the irrepressible greed that characterizes each faction of the ruling class.
"The only wheels which political economy sets in motion are greed, and the war amongst the greedy – competition," wrote Marx in the 1844 manuscripts concerning alienated labor. Marxism defies any moralistic connotation here; the real engine of this greed is nothing other than the need to valorize capital, while human behaviors only subject themselves to this imperative.
Already in the summer of 2019 some tensions on oil prices suggested that they could jeopardize the shale oil industry, then flourishing in the United States and Canada. In August there was talk of a possible bursting of the bubble. In the United States, the extractive industry has made it possible to compensate for the stagnation in the manufacturing sector which in the last 12 years has not yet managed to recover the 2007 production peak. If US manufacturing is indexed at 100 in 2007, in 2019 the index was still at 96, whereas for industry in general, also including mining, it reached 103.8. The 7.8 percentage points difference are due almost exclusively to the increased production of shale oil.
The real amount of oil production in the various countries can only be known roughly. Part of it escapes the official figures both to circumvent cartel agreements such as those of OPEC, and to hide transactions on the so-called spot markets, in which the exchange takes place with the immediate payment of the equivalent value.
We can therefore give some credit to what was stated by the former boss of the Italian petroleum company Eni, and current vice president of the Rothschild Bank, Paolo Scaroni who stated in the "Sole 24 Ore" on Sunday 29 March that the current oil price war was started by the United States, which in recent years has increased production by 4 million barrels per day, becoming the world’s leading producer.
From these data we can draw three considerations. The first is that, since world oil production has remained stagnant over the last four years at 100 million barrels per day, the four million more barrels produced by the United States have subtracted market shares from other countries. The second, that this explains why Trump has wanted to tear up the Iranian nuclear agreement by imposing economic sanctions that have drastically reduced Iran’s energy exports. Thirdly if world crude oil production has been stagnant for four years, this means that the global production of industrial products has also lagged behind, in line with the general fall in prices of all raw materials.
The counter-proof of the imminent crisis had already occurred on September 14, 2019 when the attack on Saudi territory made by drones available to the Yemeni Houthi rebels, thanks to the military support of Iran, had hit the two desulphurization plants of the Aramco of Abqaiq and Khurais. Saudi oil is high in sulfur; therefore, without this treatment it cannot be loaded onto oil tankers or put into oil pipelines. On that occasion, the export capacity of Saudi crude was reduced by 60%, reducing the market supply of world production by 5%. While the Saudi nabobs were in a hurry to find spare parts and promised to pay gold for them in order to get the plants up and running again, a sudden jump in oil prices was expected and would continue to be maintained until the Aramco plants were once more fully operational. But this was not the case. After an increase of five dollars in a couple of days, the price returned to its original level. It was already, then, a sign that the crisis was knocking at the door and that it would not have been slow to manifest itself, even without the passage of the "black swan" of the lethal virus.
By the end of March, after six and a half months and with coronavirus, world oil production had already fallen by 29%, to just 71 million barrels per day. A similar drop in production had never occurred, not even during the 1929 crisis. And in the coming weeks extraction could drop further.
Between the end of March and the beginning of April the price of crude oil had reached a low of the past 18 years. Brent Crude had fallen below $25, WTI below $20, too low to allow the cultivation of American shale oil.
This was only the beginning. On April 20 in a somewhat agitated session of the NYMEX in New York, the oil future for WTI delivered in May was quoted at -$37.63. The negative price of crude oil has shown how far the deflationary effect of the crisis of capitalism, which had already occurred during the Great Depression in 1931, can go.
This was influenced in part by investment-fund speculation in oil futures, but the fall in prices is rooted in the real economy. The drastic drop in demand brings prices down, while only a long-awaited recovery in consumption, once the quarantine is lifted, would allow for a rise in prices. This expectation translated into a negative quotation of oil futures expiring. If the week ending April 24 marked a rise in oil prices (Brent Crude at $21.44 and WTI at $16.94), forecasts for the coming weeks remain bleak, so much so that the Japanese Mizuho Bank does not exclude a price around -$100.
The decisive cause of the fall in the price quotation is overproduction that has reached a level that can fill the huge tanks around the world and the gigantic oil tankers, whose freight rates are constantly growing. Producers must resign themselves to pay those who are willing to free them of surpluses.
It is evident that physical life collides with capitalist relations of production. The flood of the river of extracted oil, which no one can stop or put back under the ground, overflows, rebelling against the commodity form that is imposed on it, in dismay at the infernal sorcerer’s apprentices who claim to rule it.
States pay businesses not to produce: a new form of negative intervention, an incentive to destroy capital. Who knows what Lord Keynes would think of it!
The price, however, is likely to settle at a level that will ruin the economy across the world. If for the major producers, Saudi Arabia, Russia and the United States, the crisis would be mitigated for some time thanks to the large currency reserves available to the first two, the third would always play with the possibility of pouring dollars onto the world market. Things could get worse for Algeria, Iraq, Iran, Angola, Nigeria, and Venezuela, whose exports are predominantly made up of crude oil. Suffice it to say that the price of Merey, Venezuelan oil, was below $14 a barrel in mid-April.
In early April, the main producing countries reached an agreement in extremis to cut production in a decisive manner and to try to stop the drop in prices. The agreement concerned the OPEC countries, to which Russia was added, which agreed on a production cut of 9.7 million barrels per day.
Trump took the opportunity to talk about a cut in world production of 20 million barrels, adding to the "OPEC+" barrels the reduction of production in other countries including the United States itself. This is a hyperbolic figure, as it is in the style of the US president whose high-sounding statements and random numbers are intended to divert attention from the real issues of the national crisis.
The agreement between the United States and Saudi Arabia provides for a reduction in Saudi extraction in exchange for the US commitment to downsize production of shale oil. It is no coincidence that Exxon Mobil cut investments by 30%. But this is a forced choice; already at the beginning of April the first sizable victim was chalked up, Whiting Petroleum, one of the main shale oil fracking companies in Colorado, which went bankrupt.
Meanwhile, the largest reduction in oil supply in history does not seem to have achieved the objective of sustaining prices and a further decline should come as no surprise. After the drop in demand for oil of 29 million barrels in March, a not much better trend is expected in April. A recovery is expected in June if the closure measures adopted in 187 countries are eased.
But if the optimistic prospects outlined by OPEC speak of a drop in annual demand for crude oil of 6.85 million barrels per day, we have the definitive certification of a global economic recession, which could evolve into a serious new depression. The collapse of oil rents, and of all other revenues and profits, is a prelude to far-reaching social upheavals.