[Part of Groundings in the Communist World Outlook. Click here for the table of contents.]

Introduction

• At the end of last session, we arrived at an understanding of capitalism as a global system of exploitation, ruled over by the bourgeoisie. The bourgeoisie is a class defined by the relentless pursuit of profit, and capitalism is a system driven by capital accumulation. Profit and capital accumulation are derived from exploitation—of proletarians in industrial production, of peasants producing cash crops, of other workers in mines, transportation, services, etc., of colonies and oppressed people, and of the Earth’s resources. That exploitation points us to the fundamental contradiction of capitalism: between socialized production, by the masses of people around the world collectively producing all that humanity uses, from necessities to cultural sustenance to luxury items, and private appropriation of what the masses produce by the bourgeoisie, who in turn sells the products to make a profit.
• The fundamental contradiction of capitalism generates crisis after crisis for the bourgeoisie, from revolts by the masses to crises of overproduction, when they cannot sell the products that are produced, to crises of overaccumulation, where they accumulate more capital than can be profitably invested. On top of that, capitalism is driven by competition, including between different blocs of capital based in different nations, which gives rise to wars between imperialist powers for the redivision of the world.
• The first half of the twentieth century saw many crises for capitalism:
  • The revolts of the masses were organized into communist revolutions in Russia and China. Those revolutions led to socialist states—the Soviet Union, established in 1917, and the People’s Republic of China, established in 1949. Those socialist states made large territories and populations off limits from capitalism and showed the exploited around the world that a different way of organizing society was possible with the socialist transition to communism.
  • Competition between imperialist powers led to two world wars.
  • Crises of overproduction and overaccumulation led to the Great Depression of the 1930s, which in turn fanned the flames of mass revolt in the 1930s.
• As a result of those crises, revolts, wars, and revolutions, the European bourgeoisies were weakened, so much so that they could no longer hold on to their colonies when anticolonial revolt intensified in Africa and Asia after World War II. (Examples: wars for national liberation in Algeria, Vietnam, Guinea-Bissau, etc.)
• The US bourgeoisie, however, managed to grow stronger during this time by staying out of the world wars and then swooping in at the end on the side of the victors. After World War II, the US bourgeoisie presided over the most powerful imperialist country in the world, and reconfigured global capitalism to serve its interests.

US bourgeois hegemony in the mid-twentieth century

• The US bourgeoisie’s power comes from the bloody origins of the US: seizing the land of the Indigenous people and subjecting them to genocide; exploiting Black slaves and then sharecroppers on plantations in the South; and wars of aggression against Indigenous people and Mexico to seize more territory. After the US Civil War, the US bourgeoisie’s power was furthered in two ways:
  • Proletarianization: turning large numbers of European immigrants and Black people escaping the rural South for cities into proletarians—wage-workers exploited in factories, whose exploitation made massive profits for the US bourgeoisie.
  • Imperialism: seizing colonies such as Cuba, Puerto Rico, and the Philippines, and exploiting the labor and resources of people around the world.
• US imperialism differed from the European model in that it subjugated and exploited people around the world not mainly through colonialism, but through free-trade imperialism. Most of Latin America, for example, was formally independent, but its resources and people were exploited by US corporations. You can just think about where we get our bananas, sugar, coffee, etc. from and how it was produced, and who made the profit.
• After World War II, the US bourgeoisie consolidated its top imperialist position through a set of political, military, and financial institutions:
  • The United Nations, dominated by the US and used to advance US imperialist interests.
  • The US military became the most powerful in the world, and led NATO (the North Atlantic Treaty Organization) to contain the socialist camp and (later) to push back against the US’s main imperialist rival. The US military, and/or the CIA, intervened in country after country, from the Dominican Republic to Ghana to Vietnam, whenever those countries opposed US imperialist domination.
  • The International Monetary Fund and the World Bank were established to govern international finance. They did this by ensnaring countries with debt that they could never pay back, and then forcing imperialist political and economic policies on them to relieve some of the debt.
• These institutions served the following purposes:
  • To create a stable alliance of imperialists and junior partners under US hegemony (examples: Western Europe, Japan, Saudi Arabia, South Korea).
  • To make sure that when colonies gained their independence, they would remain dominated by foreign imperialism but in a free-trade form. This is why most of Africa remains impoverished and exploited by foreign powers today even though it’s free from colonialism.
  • To contain and contend with socialist countries.
• The US bourgeoisie used the tremendous profits it made from exploiting the world to stabilize its home base. It created an imperialist way of life for large sections of the US population, with a well-paid working class making higher wages, a larger middle class, and investments in infrastructure projects that created working roads, sanitation, and electric grids, as well as suburbanization. There remained an exploited proletariat in the US, disproportionately made of people of oppressed nationalities (Black people, Puerto Ricans, Mexican immigrants, etc.), but it became a sizable minority of the US population instead of a majority.

1970s crisis

• Stability for capitalism and for bourgeois rule is always relative and temporary, never permanent and absolute. Since the US bourgeoisie became top imperialist power, it has faced several major crises and has had to reconfigure the global capitalist order after each crisis.
• In the 1960s and early 70s, mass revolt and revolutionary movements challenged bourgeois rule around the world. The Vietnamese people, after a long history of French colonialism, heroically defeated the French military and then the US military in their struggle for national liberation. That was part of a wave of national liberation struggles and revolutionary movements in the colonies and oppressed nations of Africa, Asia, and Latin America.
• During that time, in the US itself and in other imperialist countries, there were powerful mass revolts and revolutionary movements. In the US, that included the Black liberation movement and other liberation struggles by oppressed nationalities; the antiwar movement; the feminist movement; the gay liberation movement; revolts on college campuses, in urban ghettos, and in the US military; and the emergence of organized forces for revolution (the Black Panthers, the Young Lords, the Revolutionary Union, etc.).
• By the early 1970s, the bourgeoisie also faced a crisis of capital accumulation. Competition between imperialist powers, all producing industrial products at exceptional speed and volumes, led to a decline in profitability for industrial capital. And the US-led financial system could no longer be sustained because the US bourgeoisie was going into debt to fund its war on Vietnam and imperialist military more generally, and facing a trade deficit.

Overcoming the crisis

• The US bourgeoisie spent the rest of the 1970s and into the 1980s reconfiguring its rule. In the US, it had to dismantle legalized segregation and open white supremacy, grant democratic rights to Black people, women, and other oppressed groups, and reconfigure its regime of preventive counterrevolution to maintain exploitation and oppression in new forms.
• Around the world, the imperialist bourgeoisie used the growing debt of oppressed countries in Africa, Asia, and Latin America to force structural adjustment programs on them in exchange for debt relief. Those structural adjustment programs slashed social services and relinquished state control over the economy, and served the purpose of allowing US capital more access to the labor and resources of those countries.
• To make sure the profits kept flowing and capital kept accumulating in the hands of the US bourgeoisie, they reconfigured the way socialized production worked on a global scale. Factories and industrial production were substantially moved from the US and other imperialist countries to the oppressed countries of Africa, Asia, and Latin America, where people could be exploited more viciously. Behind the “made in Bangladesh” label on your clothes are women working in sweatshops for low wages, who sometimes perish in factory fires due to the lack of government regulation. In your cell phone is cobalt and other metals mined, sometimes by children, in Africa, and the exploitation of proletarians in Asia working in so-called export processing zones where products are assembled and then shipped off to the imperialist countries for our benefit.
• With a lot of manufacturing moved to Asia and elsewhere, large sections of the US population became “surplus populations” whom the US bourgeoisie could not profitably exploit. Not surprisingly, Black people were disproportionately thrown into the surplus population, the reserve army of labor, the unemployed. That led to a rise in the drug trade and illegal economy in the 1980s. The US bourgeoisie’s only answer to the growth of the surplus population in its borders was to throw them in prison, and the prison system became its new mechanism for enforcing white supremacy after the end of Jim Crow segregation.
• The motions of capital accumulation, moving manufacturing around the world, dictating economic and political policy to the oppressed countries, led to massive dislocations of populations. Many peasants selling their cash crops on the world market were ruined by competition. And the masses had to move in search of whatever precarious employment they could find. The results were:
  • Waves of migration, from rural to urban areas and from the oppressed countries to imperialist countries
  • The rise of massive slums in the oppressed countries
  • More women thrown into the proletariat, in low-wage manufacturing jobs
  • Privatization and deregulation—capital freed up to move to wherever the profits are highest, and state assets sold off at bargain prices to the bourgeoisie
  • The growth of informal employment—proletarians working without formal contracts, hustling to scrape together a living, as street vendors, garbage pickers, day-laborers, etc.
• By the 1990s, the US bourgeoisie had successfully reconfigured its system of global capitalism. It was aided by the loss of socialist states. In both the Soviet Union and China, a new bourgeoisie had arisen from within socialist society and seized power. In China, capitalism was restored beginning in 1976, and by the 1990s the Chinese proletariat was being exploited by US corporations (think of iPhones). The Soviet Union had become capitalist in 1956, and became a rival imperialist power of the US (that’s what the “Cold War” was about). But the capitalist Soviet Union collapsed in 1991, and the US bourgeoisie pillaged its former empire. The US bourgeoisie used the 1990s to proclaim its global victory, declare the death of communism, and insist that capitalism is the best possible system, that cutthroat competition is human nature.

From triumph to trepidation

• But the US bourgeoisie’s triumph was short-lived. When they tried to assert greater control over the Middle East region and its vast oil reserves in the early 2000s and get rid of any challenges to US imperialism there, they were met with resistance by the masses of Iraq and Afghanistan, and various political forces opposed to US imperialism—unfortunately, most of them reactionary—were strengthened.
• In addition, from the 1970s to the 1990s, the US bourgeoisie turned increasingly to finance capital rather than industrial capital as its main mechanism for capital accumulation. Finance capital invests in various capital accumulation processes, including production, but from a distance. And finance capital got more and more speculative during this period, making up mechanisms of financialization that invented ways of making profit divorced from producing and selling things. That led to financial bubbles that generated fictitious profits, and those bubbles eventually burst, as in the dot.com bubble of the late 1990s and the housing bubble of the 2000s. When a financial bubble bursts, it brings a cycle of capital accumulation and profit-making to a sudden and disastrous end. For example, as a consequence of the 2008 housing bubble burst, in the US, $11 trillion in assets were wiped out and there were nearly 4 million foreclosures on homes.
• Since the 2000s, the US bourgeoisie has been struggling to maintain its top position in the global capitalist system. The turn to finance capital led to other countries outperforming the US in industrial production. Political and military setbacks by the US have allowed rival powers, from Russia to Iran to China, to carve out their own spheres of influence and assert their own bourgeois aspirations. And the US bourgeoisie has struggled to unite around a coherent political program for dealing with those challenges and crises, hence the intensity of division and chaos in the US political system, exemplified by the rise of Donald Trump.
• Even as the US bourgeoisie’s power has been weakened in the last couple decades, it is still in command of the most powerful military in the world, with a vast cache of the most advanced weaponry, military bases around the world, and a navy dominating the seas and shipping routes of the world. The US bourgeoisie still has great technological advantages, it still presides over a global system of exploitation, and it still sits at the top of the global financial system.
• Our mission, as communists, is to take advantage of the US bourgeoisie’s weaknesses and crises to overthrow them. By understanding how capitalism works, we can see the weaknesses of capitalism and bourgeois rule. And we can make plans for how to make sure the bourgeoisie doesn’t keep surviving the crises that capitalism generates. We can use the weaknesses of bourgeois rule and the crisis of capitalism to overthrow the bourgeoisie and end capitalism.

Discussion questions

How does the fundamental contradiction of capitalism, between private appropriation and socialized production, shape our world—the production relations and the class divisions in it?

What kinds of crises and challenges does capitalism and bourgeois rule face? What were those crises and challenges in the first half of the twentieth century?

How did the US bourgeoisie establish its power?

How did the US bourgeoisie do imperialism differently than European bourgeoisies?

How did the US bourgeoisie fortify and stabilize its position as top imperialist power in the decades after World War II?

What crises and challenges did the US bourgeoisie and capitalism face in the 1960s–1970s?

How did the US bourgeoisie and capitalism overcome those crises and challenges in the 1970s and 1980s?

How did the US bourgeoisie and the motions of capital accumulation change and reconfigure the world in the 1980s and 1990s? What effect did those changes have on the masses, in the oppressed countries and in the imperialist countries?

What are the strengths of the US imperialist bourgeoisie today? What are its weaknesses? What crises and challenges does it face?

How does capitalism operate, on a world scale, today? How are things produced, how are the masses exploited, how does capital accumulate, and how does the bourgeoisie rule?

Key terms

crisis of overaccumulation, crisis of overproduction

competition, imperialist rivalry, redivision

socialist states

anticolonial revolt

national liberation

bourgeois hegemony

proletarianization

free-trade imperialism

debt

International Monetary Fund

World Bank

hegemony

junior partners

oppressed nationalities, oppressed nations

well-paid working class

stability and crisis

global capitalist order

decline in profitability

reconfiguration

regime of preventive counterrevolution

structural adjustment programs

export processing zones

surplus populations, reserve army of labor

migration

privatization, deregulation

finance capital, financialization, speculation, financial bubble