The oil slump and its ramifications
Since usurping the throne, Saudi Arabia’s crown prince, Mohammed bin Salman, hasn’t covered himself in glory with his tact and strategic thinking, but even his supporters must have been taken aback to see his oil dispute with Russia develop into rancour with the USA.
Overview of Saudi-Russia oil brinkmanship
The first thing of note for anti-imperialists is that this Saudi-Russian game of ‘chicken’ with the price of oil has been won by Russia. The second heartening facet is that the dispute was started by Saudi Arabia, and that its origins and causes are a result of Saudi weakness, not least the complete reliance of their economy (and hence their political and state institutions and power) upon oil. These factors should bring us cheer. The fruit of this recent dispute will leave a bitter taste in Saudi mouths because, in his insatiable desire to dominate the oil market, bin Salman has exacerbated differences with the USA and severely blotted his copy book with sections of the US Congress whose perception is that he was attempting to destroy the US shale industry. At the height of the crash in the price of oil, US Congressman Kevin Cramer demanded the withdrawal of US troops from Saudi Arabia along with US defence systems. All of this, should, in good time, prejudice the oil kingdom more securely towards the diplomacy of Russia, with whom it has been building bridges, weaken the US-led imperialist camp and give fresh hope to the Middle East. The recent Saudi ceasefire declared in Yemen is to be welcomed with this background in mind, though anti-imperialists know that it is the resistance of the Houthis and Yemeni people, and not the outbreak of Covid-19, that will bring the Saudis to the negotiating table, if not to their knees.
Background to the March-April oil dispute
Crown Prince bin Salman came to power via the usual intrigues, for any princely despot must plot against his own family, though a significant part of his appeal and usefulness to the Saudi ruling circle was his image as a young reformer, a go-getter. His ‘Vision 2030’ programme was supposed to build solid foundations for the future of the Saudi Kingdom which is currently as unstable as the sand it sits upon. Without oil running through its veins, this medieval Saudi outpost would soon be ruins in the desert, and, as oil is both a finite resource and is bringing diminishing returns, bin Salman’s plan was to diversify the economy, beginning with the floating of Saudi oil monopoly Aramco as a means to obtain the necessary funds.
In 2017 JPMorgan, Morgan Stanley and HSBC were brought in to start the long process of preparing the company for sale to public investors. The IPO (initial public offering) was initially scheduled to take place in 2018, but was then shelved amid concerns over how highly the company would be valued and where it should list its shares. That year also saw Prince Mohammed come under scrutiny over the brutal torture and dismemberment of Washington Post columnist Jamal Khashoggi by Saudi agents in Istanbul. Western intelligence agencies linked the crown prince to the killing, though he has denied involvement. In all events he continued to be protected by the imperialists.
Saudi Aramco went up for sale in 2019 and is now the world’s largest public company. Its initial stock market flotation in late 2019 raised a record $25.6bn – but that was a fraction of what had been hoped for. A Financial Times piece in January 2020 reported:
“The stock has retreated about 8 per cent from a mid-December high which briefly valued the company at $2tn — a level long coveted by Crown Prince Mohammed bin Salman. The company’s shares, like broader Saudi financial markets, have been rattled by heightened tensions in the Middle East after the US assassination of a top Iranian military commander. The listing has been at the heart of economic reform plans led by Prince Mohammed, with proceeds from the IPO due to be ploughed into non-oil investments.
“Saudi Aramco is the world’s most profitable company by net income. Yet the offering, which took place after a series of delays and ultimately a scaling back of its ambitions, has been like no other. Riyadh pulled out the stops to ensure its success, rather than leave it vulnerable to market forces. For example, the kingdom issued bonus shares and made bank loans available for retail investors, while pressuring wealthy families to buy in. It also encouraged state funds to keep some money aside to support trading in the after-market. When Prince Mohammed first disclosed intentions for the stock market flotation of Saudi Aramco, the kingdom had ambitions to raise $100bn from the sale of 5 per cent on an international stock exchange. But a tepid response from foreign institutions forced Saudi Aramco to abandon plans to market the offering globally, restricting it to the Gulf, and to scale back the size of the stake on offer to about 1.5 per cent. Analysts said that global fund managers were unimpressed by the dividend yield on offer, among other factors. Instead, Saudi Aramco now accounts for 9.9 per cent of the Tadawul All Share index, which represents the second-biggest weighting after Al Rajhi Bank. The company’s market capitalisation of $1.86tn makes it the world’s biggest by some distance, about $500bn clear of Apple” (Anjli Raval, ‘Saudi Aramco stretches away as top IPO after extra sale’, 12 January 2020).
Saudi Arabia was counting on the IPO to attract foreign investment but has been left heavily reliant on money from within the kingdom. The New York Times had predicted in December 2019 (Kate Kelly and Stanley Reed, ‘How Aramco’s huge IPO fell short of Saudi prince’s wish’, 6 December 2019) that the Aramco IPO valuation would be reduced by forecasts of weakening global demand for oil and geopolitical jitters. Whilst the flotation has achieved some of its aims, it cannot be said to have realised them all, and this failure to bring in foreign capital, and to have met its $2trillion target applied extra pressure to sell and export as much oil as possible in early 2020, as a previously brokered OPEC+ deal was due to draw to a close in March 2020.
OPEC+ is a group of 24 oil-producing nations, made up of the 14 members of the Organization of Petroleum Exporting Countries (OPEC chaired by Saudi Arabia), and 10 other non-OPEC members, including Russia. In December 2019, around the time of the Aramco IPO listing, OPEC+ committed to cutting oil production by 1.2 million barrels a day (bpd) — around 3% of members’ output — from a benchmark level set in October 2018. After an extension, that deal was scheduled to expire at the end of March 2020. The cuts were to ensure the price of oil remained stable.
The two top producers — Saudi Arabia and Russia — agreed to bear the brunt of the cuts.
Saudi Arabia alone, the deal’s main cheerleader, cut production by more than 850,000 bpd — covering more than two-thirds of the 24-country target single-handedly. Russia, meanwhile, was overproducing by 250,000 bpd in the third quarter.
It was clearly in Saudi interests to cut aggressively, and it was reported at the time that Putin said domestic issues were driving Riyadh’s “tough stance” in pushing for deeper cuts. “It is linked to the Saudi Aramco IPO,” Putin said. “Everybody understands this. It’s an open secret” (Jake Cordell, ‘6 things you need to know about OPEC+’, The Moscow Times, 4 December 2019).
Saudi Arabia opens up the taps
In the pursuit of its interests Saudi Arabia worked to keep the cuts to oil production in place beyond the March deadline, but, by keeping the price of oil high, US shale gas producers were winning on price and US shale output was expected to grow by 650,000 barrels a day through 2020 (see Jillian Ambrose, ‘US shale industry expected to shrink sharply as oil price falls’, The Guardian, 17 April 2020)..
Consideration of this led to Russia’s decision to decline to extend the agreement beyond its planned end date of March, since its interests lay in a lower oil price. It has been noted in previous articles in Proletarian and Lalkar, the strategic significance of US shale as the US attempts to foist its gas upon European markets along with warnings to Germany and others to avoid becoming ‘energy dependent’ on Russia and NordStream2. The Saudis for their part appear to have been caught between a rock and a hard place – drives to retain a dominant share of the market brought them into conflict with US shale which was expanding, but precipitate moves to reduce the price of oil risked the success of the Aramco flotation.
In the absence of Russian agreement to extending the OPEC+ deal, the Saudis chose the extreme path of selling and exporting massive amounts of its oil before the price completely collapsed. Saudi Arabia turned the taps on full, hitting record levels of production – in excess of 12 million barrels a day – and thus, by increasing its supply, significantly reducing the price of oil as it pumped. From the Ivory Towers of his palace in Riyadh, bin Salman must have failed to spot the coronavirus pandemic which was sweeping the world and caused demand to plummet far further than anyone could have imagined, along with the price of oil, all of which caused a major loss of bin Salman’s standing with his imperialist backers:
“In early March, the headstrong crown prince and de facto Saudi ruler slashed oil prices and turned on the taps to flood the market, after Russia declined to continue a three-year-old production restraint deal to shore up prices. Moscow had concluded this policy handed market share to higher cost US shale oil producers.
“Riyadh’s rash move not only added to oil oversupply at a time when fuel consumption was plummeting, it helped trigger the biggest stock market sell-offs since the financial crisis of 2008 and threatened the collapse of America’s highly leveraged oil industry — in the year US President Donald Trump, the Saudi crown prince’s only unconditional supporter on the world stage, is seeking re-election.
“One well-placed Saudi says this was ‘childish, playground behaviour’, but that the stakes were so high that Saudi Arabia was forced to capitulate.
“For some hubristic reason, possibly because Prince Mohammed often deals with what must look to him like a fellow princeling in the White House, Mr Trump’s son-in-law Jared Kushner, Riyadh seems to have thought Washington would blame Moscow for the price war.
“Instead, the US president, finding himself in the odd position of demanding that the Saudi-led Opec cartel should behave like one, threatened to slap tariffs on Saudi and Russian oil imports.
“Worse still, Republicans in both the House of Representatives and the Senate, who had acted as a shield for Saudi Arabia against congressional attempts to punish it for its ruinous war in Yemen or brutality towards dissidents, threatened reprisals.
“Led by lawmakers from oil states such as Texas and North Dakota, these erstwhile Saudi allies called for the withdrawal of US troops and Patriot air-defence batteries from the kingdom… When what was almost certainly an Iranian drone and missile attack last September devastated a neuralgic hub of Saudi Aramco, the state oil company, the Saudis were helpless, despite huge outlays on US weapons systems.
“Faced with this shocking vulnerability, the crown prince has moderated his bellicose tone towards Iran. Last week, moreover, Riyadh agreed a ceasefire in the Yemen war he launched in 2015, a costly failure against rag-tag rebels backed by Tehran that has led to famine and a cholera epidemic. But it did not deter him from gambling his political capital with Mr Trump by flooding a saturated oil market with discounted crude…
“Prince Mohammed’s now abandoned gambit looks just as reckless in the light of his ambition to build a more dynamic economy fired by private investment rather than dwindling oil revenue. Saudi Arabia is a low-cost oil producer. But its break-even price — the oil price per barrel at which it can balance its budget — is a whopping $85, twice that of Russia’s.
“How did he expect to pay for the vast capital outlays in his Vision 2030 prospectus to diversify the economy with oil prices at barely a third of that?
“This huge error of judgment, and further damage to the 34-year-old crown prince’s reputation, will be hard to repair — especially with Saudi Arabia’s now estranged friends in the US.
“Speaking just before the Opec+ production cuts deal was finalised, Kevin Cramer, a Republican senator from North Dakota, said: ‘They’ve spent . . . the last month waging war on American oil producers while we are defending theirs. This is not how friends treat friends. Frankly, I think their actions have been inexcusable and they are not going to be easily or quickly forgotten.’
“It is easy enough for regimes such as Iran’s or Venezuela’s to unite the fractious US Congress against them. But Mohammed bin Salman’s Saudi Arabia is an ally — at least for now“ (David Gardner, ‘US-Saudi ties strained as Mohammed bin Salman reverses on oil’, Financial Times, 14 April 2020).
Saudi-Russian deal of 12 April
Saudi Arabia and Russia ended their oil price war in April by finalising a deal to make the biggest oil production cuts in history, following involvement from US President Donald Trump who was desperate to support the US energy sector. The involvement of Trump was historic as the US has never signed up to any production quotas and is opposed to OPEC, yet Trump was brought into the centre of negotiations because of the threat to US jobs and shale production caused by the fall in the price of oil. Shale now accounts for 7% of US GDP and 10 million jobs:
“In the April deal Opec said it would cut 9.7m barrels a day in oil production in May and June, equivalent to almost 10 per cent of global supply, and continue with lower reductions until April 2022, in an effort to stabilise global crude markets. The cuts would be more than twice those made by the cartel during the global financial crisis.
“Opec officials added that the cuts could end up being much greater, at around a fifth of global supply. However, this would include declines forced on producers outside the cartel by the recent oil price collapse, like those in the battered US shale sector.
“Traders doubted the cuts would reach the headline figures or compensate for a collapse in demand expected to be at least twice the size of the Opec supply reductions.
“Big consumer countries that backed the deal, including the US, China, Japan, India and South Korea, are also understood to be preparing to buy oil to boost their reserves and tighten the market.
“’The big Oil Deal with Opec Plus is done,’ Mr Trump said on Twitter on Sunday. ‘This will save hundreds of thousands of energy jobs in the United States. I would like to thank and congratulate President Putin of Russia and King Salman of Saudi Arabia. I just spoke to them from the Oval Office. Great deal for all!’
“’Under the watchful eye of Donald Trump, Saudi Arabia seemingly had to relax their position that everyone cuts by equal proportion,’ said Helima Croft at RBC Capital Markets. “Trump essentially became the de facto Opec president” (Derek Brower, Anjli Raval and David Sheppard, ‘Opec secures record global oil cuts deal under US pressure’, Financial Times, 13 April 2020).
How will the deal affect Russia?
According to the TASS news agency the new OPEC+ deal will compel Russia’s oil industry to scale down the production of liquid hydrocarbon by 8.4% in 2020. This is the lowest level since 1994, when production in Russia fell by about 10% over three years after the collapse of the Soviet Union. In absolute terms, a decrease in oil production will be about 46.6 million tonnes – a larger drop in the history of modern Russia was recorded only in 1992 (63 million tonnes).
At the same time, production cuts, at least in the foreseeable future, will not result in an increase in oil prices. According to most forecasts, the average oil prices are unlikely to substantially surpass $30 per barrel. The last time such low prices were observed had been in 2003-2004 ($29-38 per barrel of Brent respectively).
Managing Director of Advance Capital, Karen Dashyan, is quoted as saying. "To begin with, all major investment in geological exploration will be put on hold. Major projects involving the construction of pipelines and infrastructure for new fields are likely to be frozen. Upgrading refineries and large-scale logistics projects will be frozen as well with a high degree of probability," he stressed (see Tass, ‘Press review: Russia embarks on biggest oil cut yet and Iran offers US coronavirus aid’, 13 April 2020).
How will the deal affect the USA?
Rather than producing an extra 650,000 barrels of shale a day, as forecasters had predicted, US shale is expected to contract by 2 million barrels a day (see Stanley Reed, ‘OPEC and Russia agree to cut oil production’, New York Times, 13 April 2020). Although not committed to cuts, the US Energy Department has confirmed what even the blind could not have missed, i.e., that market forces will bring about, of necessity, US production declines alongside a global reduction:
“In the fallout of the current crisis, one more statistic can be added to the toll of Covid-19 – US Energy Independence. The Shale Revolution was responsible for the growth in US oil and gas production that led to the President, Energy Secretary and industry bodies heralding the era of US energy independence and US energy dominance.
“But, with the oil markets in turmoil, US shale producers who account for over two-thirds of US production (and in particular the Permian Basin which accounts for almost forty percent of total US production) have been ‘tapping the mat’ urging President Trump to save the industry through various means of subsidies, bailouts and tariffs. Shale producers have been arm-twisting US politicians into cringeworthy calls with Saudi Arabian officials because of their belief that Saudi Arabia, as a strategic ally, shouldn’t be following free market practices to harm the US Energy Independence narrative they all promoted.
“So much for the US being the world’s champion of the ‘free market’!
“US shale producers have firmly placed Saudi Arabia as the ‘bogey-man’ of their current problems, accusing them of taking advantage of the global pandemic to use predatory pricing to dump excess oil into the North American market. What they are so conveniently forgetting is that it was left to OPEC/OPEC+ shouldering production cuts since December 2016 which kept oil prices at a level that meant that shale producers were able to propel the US to become the largest oil producer in the world.
“As the US kept producing more, negating the previous OPEC/OPEC+ production cuts and bringing the balance of global oil supply under pressure, OPEC/OPEC+ continued to cut more. But hey, it was all about ‘free markets’ they would say, and the party continued fuelled not responsibly by well performance and free cash flow – but by a gorging on cheap and readily available debt.
“But the US shale market was blowing up before the Coronavirus came along. As is the case with most viruses, it doesn’t kill you, it just makes the weaker ones more obviously weak.
“A bloodbath is coming with record Chapter 11 bankruptcies expected in US upstream E&P [exploration and production] companies. Equity markets had long turned off from the ‘growth at all costs’ shale story, leaving banks, credit markets and Private Equity companies that know more about raising money than investing it, as the sources of funding the unsustainable (i.e. loss making) production growth. They will now have to choose which are the best positions to support through the crisis and which ones will go. How did we get here? Like all parties, eventually they end, most of their own accord, the more out of control ones when the house burns down” (Mitchell McGeorge, ‘Do shale drillers deserve to exist in free markets’, oilprice.com, 18 April 2020).
Only two days after this article was published, “Benchmark US crude oil prices traded with negative prices for the first time in history …, sending shockwaves through the global energy sector” because “lockdowns imposed in many of the world’s major economies have sent crude demand tumbling by as much as a third” . (Derek Brower, David Sheppard and Anjli Raval, ‘What negative US oil prices mean for the industry’, Financial Times, 21 April 2020). “The price of US crude oil crashed from $18 a barrel to -$38 in a matter of hours, as rising stockpiles of crude threatened to overwhelm storage facilities and forced oil producers to pay buyers to take the barrels they could not store” (Jillian Ambrose, ‘Oil prices dip below zero as producers forced to pay to dispose of excess’, The Guardian, 20 April 2020). The US will try to protect its shale industry by blocking oil imports, thus sharpening contradictions between itself and other producing countries.
Ultra imperialism and de-globalisation?
In the wake of such unprecedented economic chaos, the defenders of the free market faith from all sides are declaring the ‘end of the old world’ and optimistically singing that ‘a new world is in birth, it won’t be the same after Corona’. Of course their vision of the new world is remarkably similar to the old one, with perhaps a little bit more direct exploitation of the energy of the proletariat of the imperialist powers:
“…there is the backlash against globalisation” says Mark Lewis (global head of sustainability research at BNP Paribas Asset Management). “This was mainly a political phenomenon before the pandemic struck but with the virus having revealed the fragility of over-extended industry supply chains, there is likely to be a debate over the prudent limits of outsourcing once the public health crisis has passed” (‘Why we may have already seen the peak in oil demand’, Financial Times, 17 April 2020).
“Washington’s centrality to today’s deal closing may mark a de facto Opec+ expansion and a further step in a global shift towards managed markets,” said Kevin Book of Clearview Energy Partners and reported by Derek Brower, Anjli Raval and David Sheppard in the Financial Times (op.cit.).
“The economic imbalances, which have been piling up for years, the coronavirus pandemic and the US-Russian-Saudi oil price war came together triggering the collapse, which, according to many forecasts, could exceed the scale of the 2008-2009 crisis. What’s more, the threat of new pandemics can become a permanent factor affecting national policies and consumption patterns and provoking a wave of de-globalization and a painful restructuring of a number of large economies," said Vasily Kashin at the Russian Academy of Sciences’ Institute of Far Eastern Studies (see Tass, op.cit.).
In Britain the very same Tories who only yesterday voted down pay rises for nurses today celebrate them as the finest flowers of Britain’s verdant fields. Gig economy workers, we are told, must be recognised for the central role they play in the economy, and the Health Secretary Matt Hancock has unveiled a badge to show his support for care workers (a badge which costs more than the hourly rate of pay of most care workers). These are indeed more humane times already!
The bourgeois economists the world over are now catching up with the economic philosophies first expounded by the much maligned ‘leader of the free world’, President Trump: globalisation is over, production will be brought home, China is the problem, supply lines are too long in the era of Coronavirus! With no understanding of the basic economic laws of capitalist imperialism, this may well appear plausible to millions of people, but to those familiar with Lenin’s writings on the subject it is ludicrous.
These so-called experts don’t understand even the recurring capitalist crises of overproduction, let alone the conditions under which such crises develop in the period of monopoly capitalism. For the benefit of such experts, we reproduce here the eloquent exposition of the crisis of overproduction, and the reasons behind them, as given by Marx and Engels in the Communist Manifesto a whole 172 years ago
“Modern bourgeois society, with its relations of production, of exchange and of property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells. For many a decade past, the history of industry and commerce is but the history of the revolt of modern productive forces against modern conditions of production, against the property relations that are the conditions for the existence of the bourgeois and of its rule. It is enough to mention the commercial crises that by their periodical return put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity — the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed; and why? Because there is too much civilisation, too much means of subsistence, too much industry, too much commerce. The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property; on the contrary, they have become too powerful for these conditions, by which they are fettered, and so soon as they overcome these fetters, they bring disorder into the whole of bourgeois society, endanger the existence of bourgeois property. The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented.”
Since the days of Marx and Engels, free competition capitalism long ago, through concentration and centralisation of capital turned into monopoly (finance) capitalism.
One of the chief characteristics of imperialism is the exports of capital. Capital is exported because national boundaries have become too narrow for profitable investment; as a result ‘surplus’ capital overflows, as it were, to places which offer the opportunities for the making of maximum profit. To believe that these productive facilities can be reshored to the centres of imperialism is to believe that monopoly capitalism can revert to its earlier stage of free competition capitalism. It is to believe that pigs can fly! It will not happen for it goes against the very raison d’être of the highest stage of development of capitalism – monopoly capitalism.
Lenin characterised imperialism as “moribund capitalism”, because it carried the contradictions of capitalism to their extreme limit, beyond which belongs revolution. It exacerbates the most important contradictions, namely, those between labour and capital; between the handful of imperialism countries and hundreds upon hundreds of millions of the oppressed and dependent peoples of the world; and between the various imperialist powers in a struggle for a redivision of an already-divided world, which inevitably leads to war, thereby weakening imperialism and facilitating the union of the proletarian movement for socialism and the revolutionary liberation movements of the oppressed. For these reasons, Lenin comes to the general conclusion that “imperialism is the eve of the socialist revolution” (see Preface to Imperialism, the highest stage of capitalism).
Imperialism is a global system of enslavement and colonial oppression of the overwhelming majority of the world’s population by a handful of “advanced” countries, which has produced the objective conditions for revolution everywhere; the insufficiency of industrial development in individual countries no longer presents an insuperable obstacle to the revolution, because the system as a whole is already ripe for revolution. Contradictions within this system result in the breaking of the chain of the imperialist front at its weakest point at a given moment in time, as, for instance, Tsarist Russia in 1917.
The imperialist epoch is characterised by the sharpening of contradictions of every kind, accompanied by extreme violence and fierce struggle. It is in this context that Lenin sharply criticised Kautsky’s theory of ultra-imperialism.
Before the First World War broke out, socialists debated the inevitability of war and Karl Kautsky posited that war might be avoidable, that the imperialist concerns might come together into one great combination, manage their affairs, avoid the scramble for cheaper markets to sell their produce and plunder for raw materials. Lenin dealt this theory of ultra-imperialism its mortal blow.
Accusing Kautsky of deserting Marxism, ignoring the conflicts, upheavals and the extreme contradictions of the imperialist epoch, and dreaming of peaceful capitalism, Lenin pointed out: that “… ‘peaceful’ capitalism has given way to non-peaceful, aggressive, cataclysmic imperialism… “ Kautsky’s retreat from the reality of the imperialist epoch to an imaginary peaceful capitalism, said Lenin, reflected the petty-bourgeois desire to hide from unpleasant reality, for “…which the petty bourgeois finds especially unpalatable, disquieting, and alarming” and seeks to escape from “the present highly conflicting and cataclysmic epoch of imperialism, which is the here and now, by means of innocent dreams of an ‘ultra-imperialism’ which is relatively peaceful, relatively lacking in conflict and relatively uncataclysmic”
While not denying in the long-distant future the theoretical possibility of an epoch of ultra-imperialism, before that happens, says Lenin, “imperialism will burst and capitalism will be transformed into its opposite”. Here is Lenin’s argument in his own words:
“…Can it be denied, however, that a new phase of capitalism is ‘imaginable’ in the abstract after imperialism, namely, ultra-imperialism? No, it cannot. Such a phase can be imagined. But in practice this means becoming an opportunist, turning away from the acute problems of the day to dream of the unacute problems of the future. In theory this means refusing to be guided by actual developments, forsaking them arbitrarily for such dreams. There is no doubt that the trend of development is towards a single world trust absorbing all enterprises without exception and all states without exception. But this development proceeds in such circumstances, at such a pace, through such contradictions, conflicts and upheavals—not only economic but political, national, etc.—that inevitably long before one world trust materialises, before the ‘ultra-imperialist’, world-wide amalgamation of national finance capitals takes place imperialism will burst and capitalism will be transformed into its opposite” (Lenin, ‘Preface to N. Bukharin’s pamphlet, Imperialism and the World Economy’, Pravda No. 17, January 21, 1927).
In Britain right now there are two opportunities which open themselves up to revolutionaries. The first is provided by the collapse of the Corbyn project. The main social democratic party, the Labour Party, is in disarray as never before. Amongst the scattered debris of this ship of 500,000 sailors are thousands of confused, shipwrecked proletarians, from across the varied strata of the proletarian class. We are too weak to capture the attention of them all, but we are able to speak to some. All communists who wish to do more than talk must engage in the struggle to win these workers from the organisational hold of Labour, whilst the hull has been breached. In carrying out and later, in consolidating this task, it will be necessary for communists to teach, both in the classroom and more importantly, in the economic, social and political struggles to come the truth of the Marxist Leninist teachings.
The second opportunity open to us is work amongst the masses, those whose eyes are starting to open to the Malthusian designs of our ruling class, and those who have been proletarianised by the economic crisis.
There will be no peaceful transition to a world without ‘globalisation’, there will be no ‘light bulb’ moment when the ruling class decides to relinquish its grasp upon the fruits of the labours of mankind, these things must be wrested from the bourgeoisie by degrees, through struggle and proletarian revolution.