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World on fire capitalism in meltdown

Marxist Analysis · 2020-06-03

Core Argument

The central thesis is that the COVID-19 pandemic has not caused a temporary recession but has triggered the opening of a new world depression — structurally deeper than the 1930s — which marks the terminal exhaustion of capitalism as a viable social system. Sewell argues that this is not a cyclical downturn but an endemic crisis, meaning the system can no longer develop the productive forces. Because a world war in the nuclear age is ruled out as a means of resolving the crisis (as it was in the 1930s), the contradiction will be internalised as intensified class war. The only way out, therefore, is revolutionary: the working class must seize the economy and plan it rationally, or face permanent mass unemployment and austerity.

Theoretical Grounding

The analysis is grounded in the Marxist theory of crisis as developed by Marx in the Grundrisse and Capital, particularly the proposition that a social system enters the epoch of social revolution when it can no longer develop the productive forces. This is a classical historical-materialist framing: crisis is not a malfunction but a symptom of the relations of production having become fetters on the forces of production.

The article also draws on the Trotskyist tradition's understanding of the relationship between war and revolution. The argument that nuclear weapons foreclose the possibility of interimperialist war as a "solution" to depression echoes Trotsky's analysis of the epoch of capitalist decay, updated for the nuclear age. The rejection of reformism — the idea that capitalism can be patched up — is a settled position of the tradition: the article treats the choice as binary (revolution or catastrophe), with no middle road.

The concept of permanent arms economy is implicitly present in the negative: the article argues that the 1930s depression was "solved" only by war, and that this solution is now unavailable. This leaves the system with no escape valve, intensifying the internal contradictions.

Conjunctural Relevance

The article was published in June 2020, at the peak of the first wave of lockdowns. It cites specific data to ground its argument:

  • US GDP fell 52.8% in Q2 2020 (Atlanta Federal Reserve estimate).
  • UK economy contracted 20.4% in April 2020 alone.
  • 45 million US workers ejected from employment (25% of the workforce).
  • 9 million UK workers furloughed.
  • US Federal Reserve expanding balance sheet by $12 trillion — twice the 2008 level.
  • UK government debt approaching 100% of GDP.

The article names Henry Kissinger's warning of a "world on fire" as evidence that even the strategists of capital recognise the severity. It also cites the Financial Times (3 June 2020) admitting the pandemic was "just the trigger for a recession that was already approaching."

The conjuncture is defined by the simultaneity of economic collapse, state intervention on an unprecedented scale, and the radicalisation of mass movements (the article references the US mass movement, likely a reference to the George Floyd protests that erupted in May 2020). The argument is that this combination — deep depression + mass radicalisation + exhausted ruling-class strategies — creates the objective conditions for revolutionary politics.

Where the Argument Continues

The article is a broad-stroke conjunctural analysis, not a detailed economic treatise. It leaves several questions open:

  • The mechanism of the crisis: The article does not elaborate on the internal dynamics of overaccumulation, the tendency of the rate of profit to fall, or the role of fictitious capital in the pre-pandemic period. These are developed in other IDOM articles, particularly those by Alan Woods and Fred Weston on the 2008 crash and its aftermath.
  • The trade war: The article mentions a likely trade war but does not analyse its geopolitical dimensions (US-China rivalry, the breakdown of global supply chains). This is taken up in later IDOM articles on deglobalisation and the new cold war.
  • The labour movement strategy: The call for factory occupations, nationalisation under workers' control, and a fight for a socialist programme within the Labour Party is stated but not elaborated as a transitional programme. This is developed in the broader corpus of the Revolutionary Communist International's writings on the transitional method.
  • The international dimension: The article focuses on Britain and the US. The crisis in the Global South, debt defaults, and the role of the IMF are mentioned but not analysed in depth.

The argument continues in subsequent IDOM articles throughout 2020–2021 on the second wave, the vaccine rollout, and the inflation crisis. The Against the Stream podcast episodes from this period also develop the analysis of the depression's trajectory.

Connections

  • Marx, Capital Volume 3: The theory of crisis and the tendency of the rate of profit to fall is the theoretical foundation, though not explicitly cited here.
  • Trotsky, The Death Agony of Capitalism and the Tasks of the Fourth International (1938): The article's framing of "death agony" and the impossibility of reformist solutions echoes this founding document of the Fourth International.
  • Ted Grant, The Unbroken Thread (1989): The article references Grant's 1992 prediction that the collapse of capitalism would dwarf the collapse of the Soviet Union.
  • Alan Woods, The Crash of 2008 and the Marxist Theory of Crisis: For a more detailed economic analysis of the pre-pandemic period.
  • Fred Weston, The Great Depression of the 21st Century: A companion piece that develops the comparison with the 1930s in greater detail.
  • RCI, The Transitional Programme: For the strategic conclusions — how to move from resistance to revolution.

Key Quotes

  1. "The pandemic was not the cause but the trigger for this downswing. Nevertheless, the scale of the outbreak has certainly aggravated the crisis."

  2. "Marx explained that as soon as a social system is not able to develop the productive forces – namely its economy – it enters into crisis and the era of social revolution opens up. This is precisely the period we have now entered."

  3. "This is no ordinary crisis, but an endemic crisis, reflecting the utter exhaustion of the capitalist system. What we have entered is a new world depression, worse than in the 1930s."

  4. "A new depression, deeper than anything we have known, cannot be brought to an end this time by world war. Such a war – in the present epoch of nuclear weapons – is ruled out, as it would obliterate the planet. That being the case, all the contradictions of capitalist crisis will be internalised. Therefore, not war, but class war is on the agenda."

  5. "The choice is clear: either we bow down and accept the capitalist system; or we must fight to overthrow it. There is no middle road."

  6. "In 1992, Ted Grant, who helped found Socialist Appeal, explained that the collapse of the Soviet Union was a major historical event. But he stated that it would be nothing compared to the collapse of capitalism. This prediction is being realised in front of our very eyes."