Supply chain issues, largely triggered by the global pandemic and now exacerbated by the war in Ukraine, have created the worst inflation in decades. In the United States, inflation jumped 8.5 percent in March of this year from March 2021, the fastest jump to occur since 1981 and the highest level of inflation since that year. This has resulted in especially high food and gasoline prices.
U.S. politicians are already using one of their typical go-to responses when workers find it particularly difficult to afford meeting their basic needs: blame someone else. President Biden is trying to get the label “Putin’s price hike” to stick, while Republicans are directing blame at the president, pushing the term “Bidenflation.”
While it is true that Putin’s invasion of Ukraine and Biden’s response in the form of economic warfare on Russians have both contributed to rising prices, the roots of this inflation crisis lie in the capitalist system, not in the war alone. In our globalized imperialist economy, high gasoline prices, for instance, are linked directly to the inevitable economic crises that capitalism produces over and over, and to the response of the capitalists themselves — which is always to make workers pay.
The pandemic demonstrated to many people a key fact about how capitalism works in our imperialist epoch: no national economy functions in complete isolation from the global economy. If one sector of production and transportation is slowed down in any part of the world, many other parts of the global economy will be affected. This was clearly demonstrated when a single cargo ship stuck in the Suez Canal had far-reaching economic consequences that rippled across the globe. In times of crisis, the cost of producing goods almost always goes up, and when supply chains are disrupted, there are fewer of those goods available. With fewer goods getting to consumers, the products that are available get priced higher.
Unlike the Suez Canal blockage, which was a case of one transport component of the global supply chain being disrupted, the pandemic affected every single country and nearly every single component of the supply chain. This disruption of the usual flow of commodities around the world has had an impact on nearly every commodity. Those commodities are the basic products people need to live, like gasoline for cars and food for families — and as prices rise and the capitalists profit from those higher prices, the desperation of most people increases.
Inflation was a serious issue prior to the start of the war in Ukraine, so what does any of this have to do with the Russian invasion? Again, when one part of a supply chain is disrupted, that disruption ripples through the world economy. As the eighth-largest producer of wheat in the world, Ukraine is essential to the world’s supply and distribution of that commodity — something the war is grinding to a halt. Already, experts are anticipating that the war will result in famines in the Middle East and Africa, two regions dependent on wheat from Ukraine as well as from Russia, the world’s third-largest producer. The two countries combine to account for about a quarter of total world exports of wheat.
One might think that the problem of potential famine would be solved by the United States, the world’s fourth-largest producer of wheat and third-largest exporter of the grain. But as a profound illustration of how capitalism functions against the interests of meeting actual human needs, the rising prices are threatening the U.S. crop and potential exports that could help address a looming famine. Farmers are finding that the actions of speculators in the commodities future markets, betting on reaping huge profits later on, are making it difficult for them to sell their wheat and get it into the supply chain today. Silos are full, and some wheat is just sitting there.
For workers in the Global South, this could mean starvation, but what is effectively hoarding has consequences for U.S. workers as well. Left unaddressed, the United States may be facing its own food crisis soon enough.
However, for many workers in the United States, the most immediate concern is the price of gasoline. Again, it is the globalized economy for profit, with its supply chains and distribution networks, that is creating the economic burden on workers. The United States and NATO countries responded to Russia’s invasion of Ukraine with economic sanctions aimed at isolating Russia’s economy from the global economy. In addition, Germany canceled the long-anticipated Nord Stream 2 Pipeline, which was going to supply more Russian natural gas to Europe (which already uses a lot). By cutting Russia off from the world in this way, prices rise because there is less overall supply — and the Western capitalists who may no longer be competing with Russian oil on the market see an opportunity to make a greater profit.
Politicians and the capitalist media have been painting these price increases as a small price to pay for “freedom,” but for the working class, higher gasoline poses tough choices about how to use limited resources: buy gas to drive to work but not, say, to visit family across town or elsewhere; buy fewer or cheaper, less-nutritious groceries to feed the family; and other serious economic hardships.
What does imperialism have to do with higher food and fuel prices? As Lenin explained, imperialism is the stage of capitalist development in which monopolies merge with banks to form finance capital, a type of capital that can control the markets of entire countries and even regions of the world. Nation-states act to serve and expand the influence of their national finance capital, resulting in competition between nation-states for spheres of influence. Given that capitalist economies cannot function properly without constant growth, and the world has finite resources, this means that wealthy capitalist countries are always seeking to expand their spheres of influence. Lenin reached this conclusion about capitalist development in 1916, describing imperialism as the “highest stage of capitalism.” Since then, the world economy has become far more globalized.
Western imperialism has fueled the war in Ukraine. The United States and the Western European imperialist countries have sought to expand their economic influence in the former Soviet bloc countries of Eastern Europe, and one key to this has been to make Ukraine a sort of semi-colony that would provide privileged access to the country’s valuable resources and labor pool. Helping prop up Ukrainian politicians like Zelenksyy, who cater to Western capital’s interests, is part of the scheme. Putin, seeking to maintain what he sees as a key part of Russia’s sphere of influence and security, has retaliated.
In many respects, a war in Ukraine was inevitable. The logic of capitalism pushes the imperialist countries to create more profit, and often the only way to do that is through increasing the exploitation of labor and resources beyond those countries’ own borders. In a world with limited resources, growth can continue only so long until one imperialist power reaches a point of direct conflict with another imperialist power, or threatens a regional power like Russia. In short, wars are inevitable so long as capitalism and imperialism remain the systems that determine how the world’s resources are acquired and used.
Workers outraged about high food and gasoline prices are right to direct their anger at both Putin and Biden. And there is little relief in sight. As the Boston Globe reports, some bourgeois “economists, former government officials, and financial titans” are starting to warn of the risk of a “recession striking anytime between late this year and 2024,” all resulting from the Federal Reserve raising interest rates to try to combat the inflation “that has been exacerbated” by the war in Ukraine and “continued supply-chain problems” from Covid-19. A recession would mean lost jobs and decreased household income, and it would hit the vulnerable the hardest. Even when the overall economy “recovers,” those workers and their families are typically left behind. The Great Recession of 2008 led to skyrocketing unemployment and disrupted the lives of millions — many of whom have never gotten back to anywhere close to their pre-2008 circumstances.
This is the price we pay from a system that pushes the world into conflicts and crises and then forces workers to pay for it. There are actions workers in the United States can take now in response to the current inflation, such as demanding wages that automatically adjust to the cost of living. But we must also fight for an international system that doesn’t make the next economic crisis inevitable. That begins with extending our solidarity as economically strained workers in wealthy countries to workers in the Global South facing famines, Ukrainian workers violently pitted between Western capital and Russian capital, and Russian workers suffering from U.S./NATO economic warfare. It means opposing the Russian invasion of Ukraine and the U.S./NATO intervention, including weapons shipments and sanctions.
All that requires a genuinely anti-imperialist anti-war movement that touches every corner of the globe.