Economic situation

The crisis of overproduction that erupted in 2019 continues to shape the capitalist world economy today. In particular, the extent to which the capitalist crisis cycle has been deformed by decades of low interest rate policy and the accompanying enormous expansion of credit is revealed.

In conjunction with several developments acting as external shocks on the economy, such as the Corona pandemic and the economic-political consequences of the heightened inter-imperialist contradictions, this has created a situation in which the capitalist economy has since failed to achieve a real upswing. The current situation in Germany can be described as fluctuating stagnation.

Both the deep upheavals in the economy and strategic considerations against the backdrop of a period of sharper geopolitical confrontation since Russia’s February 2022 invasion of Ukraine have greatly accelerated a profound restructuring of the global economy that had already been underway.

Restructuring of international production chains

We are witnessing an intensified economic war, which, with the help of protective tariffs and in part gigantic subsidy packages, is no longer taking place only between the already fragile imperialist alliances, but also within them. For German capital, the most significant factor is the direct competition with U.S. imperialism, whose state is currently trying to tie up capital in its own country with historically unprecedented subsidies.

As a result, the basic tendency in all imperialist countries is to restructure internationalized production chains and to withdraw capital invested in the spheres of influence of geopolitical competitors in order to invest it in their own countries or in regions considered safer.

The increasingly louder discussion in Germany in recent years about the need to remedy structural weaknesses vis-à-vis imperialist competition, for example in the IT and Internet monopolies, the chip and semiconductor industry, and the arms industry, through targeted governmental or at least EU-level initiatives, also clearly shows that this is a necessary complement to direct military preparations for war. This also applies to the much-discussed energy transition, which is not about saving the world’s climate, as is often pretended, but, from the point of view of German imperialism, about the autarky of primary energy supplies as a prerequisite for a war economy.

As communists, therefore, we are faced with the task of closely monitoring the changes taking place here and, in particular, of looking for natural starting points for building internationalist relations in line with the reorientation of German capital.

Impact of the crisis in Germany

German imperialism is also strongly affected by the ongoing economic crisis. At the moment, however, it is expressing itself in quite contradictory ways in this country.

In the course of these restructuring measures, we are witnessing major shifts of capital to other countries as well as austerity measures typical of capitalist crises and, as a result, numerous mass layoffs that are being carried out or announced.

At the same time, the German economy is still in a situation of acute labor shortage, which has so far meant that there has been no significant rise in unemployment and workers have even been able to obtain partial wage increases on an individual basis if they transfer to another company that exploits them.

On another level, however, the country is currently experiencing the sharpest attacks on the living standards of the working class in decades, especially in the form of skyrocketing inflation rates.

Its immediate effect is a drastic impoverishment of large sections of the working class, with its poorest sections, single parents, students, apprentices and pensioners, naturally being hit the hardest.

The social-partnership alliance of state, capital and yellow unions has done its best to create the appearance of countermeasures through a jumble of one-time payments, energy flat rates and short-term tax breaks. It is obvious that all the sham concessions by the state and capital will not prevent the impoverishment of the working class, especially in the long term. Nevertheless, there have been no major protest movements so far.

Even if in the past few months the now largest strike movements in recent history have been heating up the spirits of the capitalist media houses, these represent a transparent maneuver to create an outlet for the justified frustration in the working class. But the collective bargaining negotiations, which often end quickly and with extremely disappointing results, show once again that the unions are not acting in the interests of the workers. Instead, they stabilize the profit rates of the monopolies by agreeing to rotten compromises at the expense of the workers or even real wage cuts.

The inflation did not start with the resurgence of the Ukraine war. Likewise, it is not just foreign capital that has raked in the enormous extra profits and speculative gains that have emerged in this context. German capital in particular is profiting massively from the current historic price increases.

Outlook

Against the backdrop of this situation, there are no signs of the economic turmoil calming down. Quite the opposite: The interlinked bank failures in spring 2023 clearly show how unstable even the current state of economic stagnation is.

In the course of this crisis, both the difficulties of capital utilization, especially in the tech and Internet sectors, and the bursting of speculative bubbles in this area are becoming apparent.

It therefore seems a likely scenario that a new deeper economic downturn is imminent before the global economy overcomes the consequences of the economic crisis that began in 2019.

International situation

From the point of view of German imperialism, the most significant change in recent years is certainly Russia’s attack on Ukraine. The escalation of a long-simmering flash-point of imperialist contradictions marks the entry of world politics into a new phase: the direct preparation for a third great war to redivide the world.

The character of the war in Ukraine is becoming increasingly clear. It is an imperialist proxy war between Russia and the various imperialist members of NATO, in which there is no just side. Ukrainian and Russian workers and peasants are paying the blood toll for the imperialists‘ struggle for control of a country that is of enormous value to both sides in terms of direct military confrontation.

For German imperialism, this also means the end of a successful model that had lasted for decades. This consisted of developing into the dominant economic and political power in Europe within the US’s foreign policy and military slipstream, while at the same time seeking economic relations with other imperialist predators such as Russia or China that were as advantageous to it as possible.

Against this background, German imperialism is now faced with the situation that it must overcome military and political deficits as quickly as possible in order to be in a position to participate successfully in such a war of distribution. If it fails to do so, it is threatened with permanent relegation to the rank of an imperialist power with no independent geo-strategic capacity to act.

However, this war also shows how great the obstacles are for German imperialism. While Russia, after all, can rely on a continuously running arms production for warfare, the European NATO countries have to scrape together tanks and air defense missiles one by one to prevent a collapse of the Ukrainian front.

However, the dominant role of the war in Ukraine in the German media should not blur the view that this is only one imperialist flashpoint among many. From the point of view of the world’s most powerful imperialist country, the U.S., and its main imperialist rival, China, in the struggle for the world economy, the other country is the center of attention. Therefore, the number of voices from the imperialist staffs and think tanks that openly anticipate a war between China and the U.S. over Taiwan in the next few years is increasing.

This also explains the initiatives from both the U.S. and China for a temporary freeze of the front in Ukraine. At the same time, a lasting solution to the conflict over Ukraine is unthinkable against the backdrop of the sharpened contradictions. That is because, from NATO’s point of view, this war serves to permanently weaken one of the world’s still largest nuclear powers, especially in view of a possible Third World War.

From the point of view of Russian imperialism, it is a matter of keeping the anticipated enemy in precisely such a major imperialist war far enough away from its own industrial centers to have a realistic chance of defending its own territory. It is not only the access to the Black Sea around the Crimean Peninsula but also other regions that play an essential role for this from the point of view of Russian imperialism. In the Balkan region, for example, the interests of Russian and German imperialism are also directly opposed.

It is precisely in the world’s dependent countries that the political and economic consequences of the crises and escalations in the global climate described here are taking place, often in much more dramatic form. The sharp rise in energy and grain prices, for example, has plunged millions of people into a direct struggle for survival. The situation in many dependent countries is further aggravated by drought waves, floods and other catastrophes caused by capitalist over-exploitation of nature.

Against this background, there have been numerous protest movements and even uprisings, particularly in South America, Africa and West Asia. It is particularly noteworthy that these struggles combined hunger revolts with political issues. In Iran, for example, the struggles against patriarchal violence and oppression served as a spark for an uprising in which numerous social contradictions were unleashed and which put the Iranian regime in serious danger.

Domestic developments in Germany

Although the current massive intensification of imperialist competition does not correspond to the interests and capabilities of German imperialism, this does not mean that it would be relatively slow or cautious in carrying out domestic attacks on the working class and efforts to militarize the country.

Instead, this intensification necessitates an unusually rapid shift – especially by German standards – in the mood and political culture for German imperialism. This is increasingly driven by a coalition of green and social democratic elements in the political landscape posing as progressive and modern.

This tendency is logically complemented by the fact that ever since the state of emergency imposed in the course of the Corona pandemic, any clearly perceptible opposition to the measures of the German state has been covered with the stigma of coming from the most reactionary or even fascist circles in Germany. In this sense, today even harmless bourgeois pacifists who dare to supplement their condemnation of the Russian invasion of Ukraine with a wish for early negotiations are declared „Putin friends“ in order to isolate them politically.

Large parts of the political resistance movement, both in the pandemic and in the face of the Ukrainian war, have capitulated precisely to this political pressure and have become leftist fig leaves of imperialist policy.

On this basis, both internal and external militarization are being pushed forward. In recent years, for example, a series of stricter laws have been enforced that massively expand the legal scope of the repressive authorities and severely curtail the population’s civil liberties, such as the right of assembly. The bans on communist symbols against the backdrop of the war in Ukraine can also be seen in this context.

The preparation for war is taking place not only through a greatly accelerated implementation of rearmament projects that had been planned for a long time, but also in the form of a permanent propaganda barrage to make the working class willing to go to war, initially on the basis of Ukraine.

However, the efforts of German imperialism have so far met with only limited success. Quite contrary to what the great unanimity in the bourgeois political establishment and media would suggest, a large part of the population has so far not been persuaded either for the fairy tale of a collective renunciation of hot water and heating for the freedom of Ukraine or for a reintroduction of compulsory military service.

Responding to the turn of the times of the rulers with revolutionary class struggles

We are witnessing a clear acceleration and intensification of processes of change in imperialism, which in turn are an expression of the deep contradictions that characterize this rotten social system.

The German Chancellor has coined the term „turning point“ (Zeitenwende)for this. Indeed, we can see that new times are dawning. The phase of comparatively calm and seemingly peaceful development in imperialist centers like Germany has come to an end.

Whether we consider the attacks on the living standards of the working class, the intensification of class struggles in other countries, or the imperialists‘ preparations for war, it is clear that if the working class does not want to be led to the imperialist slaughter without resistance, it must be armed by building its own fighting organizations, up to and including the Communist Party. In this sense, it is necessary to respond to the turn of the times of the rulers with a turn of the times of the proletariat.

But this is not only a necessity, but also a concrete possibility that exists in the current situation. For the sharpened objective situation also gives rise to the possibility of particularly large and rapid subjective steps forward. Thus, in the face of the current situation, reformist forces are suffering obvious shipwreck and are experiencing further setbacks in their ability to bind sections of the working class to themselves.

Likewise, ever larger sections of the working class are themselves tangibly feeling that there can be no secure future for them in this system, either economically or on other levels. Last but not least, it must be a matter of developing revolutionary class struggles against the imperialists out of the widespread skepticism of the workers toward the ongoing war preparations of the imperialists.

For the question that confronts us in the coming period is clear: imperialist war or revolutionary civil war? Socialism or barbarism?