READ AND DISCUSS:

South Africa’s Impending Socialist Revolution (Inqaba ya Basebenzi, 1981) ⁵⁴

“Part of the progressive mission of the capitalists historically was to break down the feudal barriers to commerce, and develop national markets, under the rule of bourgeois national states. But already in the nineteenth century, large-scale industry erupted beyond the limits of the national economy. From its nation-state bastions, the bourgeoisie launched into the world market, pushing forward its frontiers, waging competition internationally and laying the basis for the increasing division of labour among countries.

In this process, the banks played a crucial role, transforming themselves from simple money-changing institutions into the central instruments of a financial and industrial oligarchy that bound society in a web of dependent relations to itself. The rise of finance capital hastened the process of concentration of production in larger and larger enterprises, in fewer and fewer hands.

From this came the giant monopolies which obtained complete supremacy in the economies of the advanced capitalist countries towards the end of the nineteenth century. The rise of the monopolies rang in the epoch of imperialism, the highest stage in the development of capitalism.

Marx had long before explained that the capitalist accumulation of wealth inevitably meant increasing misery and poverty for the mass of society. Now imperialism demonstrated the correctness of Marx’s view on an international scale - in the effects of monopoly capitalism on the peoples of the colonial world. Competition was now waged between the monopolies, and between the capitalist powers, as competition for world domination. To the former motives for colonial expansion by the great powers of Europe, there was added the need for new sources of raw materials, the need to export capital which could not be profitably invested at home, and above all the need for new markets.

A cut-throat struggle followed between the imperialist states, each presiding over an increasing flood of production, each fighting to redivide the markets of the world into new spheres of influence and control. Relatively ‘peaceful coexistence’ between the great capitalist powers could last only as long as it was a question of dividing between them an expanding treasure chest of spoils. … Thus, in the epoch of imperialism, wars of colonial conquest turned increasingly into confrontations among the powers. … Imperialist competition came to a head on the continent of Europe in the First World War of 1914-1918.

The transition to imperialism marked the process of exhaustion of the progressive role of the capitalist system. As the highest stage of capitalism, imperialism is at the same time its last stage. … With the phenomenal expansion and integration of the productive forces on a world scale, with the development of a world division of labour and a world market, capitalism had laid the basis for undreamed-of progress of human society - provided the barriers posed by capitalism itself could be swept away. In that sense, as Lenin put it, monopoly is the transitional form from capitalism to a higher system of production. What is required to complete this transition is to take over the monopolies and, under democratic workers’ control and management, integrate them in a planned world economy.”

Fractured world economy (CWI, 2025) ⁵⁵

“‘As things stand, there are enough bubbles that are set to burst within a year. When they do burst, they will cause significant economic disruption.’ This was the recent prognosis of David Roche, former head of strategy at US financial giants JP Morgan and Morgan Stanley, in an article titled ‘A Crash Is Coming’.

Roche’s analysis is typical of a growing segment of the more astute defenders of capitalism who are pointing to the stress points in the global capitalist economy - particularly the huge bubbles that have emerged in the private credit market, state sovereign debt, and AI investment. Any or all of these, when they burst, could tip the global economy into a new recession or even a slump.

We are seeing similar practices to those that led to the 2008 subprime mortgage crash. The consequences of this casino capitalism led to eight million job losses in the US alone and an almost two-year-long economic recession. Capitalist governments, including those in the US and UK, were forced to nationalise major financial institutions to prevent liquidation. State intervention and hundreds of billions in quantitative easing followed to ‘save the system.’ A decade or more of austerity ensued as those same governments made the working class pay for the crisis.

So, history is repeating itself - only in an even more dangerous way. ‘Traditional’ banks are also deeply entangled in non-bank credit markets. According to Roche: “Even a 20% loss on European non-bank credit… would result in a net loss of US $5 trillion. That’s the size of the German economy”.

It gets worse for those who eulogise capitalism as the best possible system through which to organise the world. Next up is the AI asset bubble, which is growing to gargantuan proportions. Such is the capital being invested in AI - primarily by US-based tech giants including Google, Meta, Amazon, and Microsoft - that it can never yield a profitable return.

The inevitable crash will have a devastating impact, given the intertwining of capital investment markets, the stock market, big tech, and millions of workers’ jobs. Amazon employs 1.2 million workers in the US. Yet by using AI and robotics, it aims to cut future employment by 600,000 staff by 2033, as well as reducing the current headcount by not replacing workers who retire or leave. In other words, capitalists are using AI to increase profit margins with fewer workers. Marx would have much to say about the viability of that, given that human labour power is the key source of surplus value.”

1. Why have the banks and finance capitalists increasingly turned towards speculation rather than investment in production?

2. Reading the analysis by ‘Inqaba ya Basebenzi’, outline what Lenin described as ‘Imperialism, the Highest Stage of Capitalism’.

3. The CWI article on the ‘Fractured World Economy’ suggests that Marx would have questioned the viability of capitalism seeking to use AI to cut the world’s workforce. Why?