The “America First” Pandemic Response: Parasitic Finance as Lenin’s End-Stage of Imperialism
TRANSLATED BY D. LIAO
To mark Vladimir Lenin’s 150th birthday, Chinese blogger Zi Qiu offers a Leninist analysis of the U.S. pandemic response, the nature of U.S. financial hegemony, and the parasitism of the U.S. capitalist class’s advances on China.
Zi Qiu’s original Wechat blogpost can be found here (link in Chinese).
Editor’s Note: Zi Qiu (紫虬) is a Chinese Marxist blogger and commentator whose work can be found across several Chinese platforms and publications, including Weibo, Utopia, and Chawang.
This essay was written and published on April 30th, before the horrific murder of George Floyd on May 25, but well after the state of emergency declared by the State of California on March 4th in response to COVID-19, generally signaling the escalation of the pandemic in the United States. Long lines for food drives, anti-mask protests, and looming unemployment and financial insecurity had long become fixtures in the United States’ landscape. Rising public frustration and dire economic straits created a tense national atmosphere on the edge of upheaval.
In this context, this essay may even seem prescient—describing a United States that increasingly alienates both its own denizens and people abroad. Yet the structure and organization of the United States’ hegemony is but a slight step away from what Lenin observed long ago: imperialism as the final stage of capitalism, defined by monopolies, financial oligarchy, the export of capital, the formation of international monopolist capitalist associations, and the completion of global territorial division.
Combining deft application of Lenin’s theory onto modern U.S. imperialism, Zi Qiu shows not only that Lenin’s thought remains ever relevant in a post-Soviet, U.S. unilateralist world, but also that the widening contradictions facing the people of the United States are quickly coming to a head.
Protests against police brutality continue to ravage the country three months after the first protests in Minneapolis, only to be met by state violence and oppression. The West Coast of the United States now faces unprecedented ecological disaster, the product of centuries of indigenous genocide and profit-driven ecocide set alight by disastrously negligent and inept policies and practices. In this cataclysmic context, Zi Qiu’s analysis remains one of clarity. Maintaining not only a Marxist analysis describing the present state of affairs of the United States, Zi Qiu lays clear how China itself has been a victim of U.S. unilateralism and hegemony in concrete terms. The path for China then is clear, if easier said than done. Implicit from this analysis is the task of United States-based leftists moving forward: applying Marxist-Leninist analysis to fully understand the imperialism of the United States, educating the people, and building a movement to fully rid the people of the parasite, who do not even attempt to mask their relentless greed even in times of great mass suffering.
We are pleased to publish this translation of Zi Qiu’s work in honor of the legacy of Lenin’s life and work, still instructive to our work to dismantle the primary contradiction at the world level: U.S. imperialism.
In the last three to four months, the pandemic in the U.S. and Europe has provoked complicated emotions in the people of China. U.S. coronavirus statistics have skyrocketed far ahead of all other countries, unclaimed corpses are being disposed, heart-aching videos abound of forsaken seniors, nurses, Black people, and others of low social status crying out for help, death rates for low-income people and ethnic minorities are significantly higher, and overall everything is too miserable to bear witness. According to Chinese culture, “do not do unto others what you do not want others to do unto you.” Regardless of race or nationality, there is only great sympathy for the victims of the pandemic, especially the ones most vulnerable to it. On the other hand, in contrast to the situation outside, in China “the scenery here is beyond compare,” where people all across our country welcome the return of the heroes who rescued Hubei province. Work and production are being restored and shifted to fulfill the duty of aiding other countries’ battles against the pandemic.
All the while, American politicians are sugarcoating lies, demanding compensation from scapegoats, and shifting responsibility while claiming credit for themselves. Federal and state governments constantly bicker with each other, with various political spectacles revealing just how low their bottom line goes. Absolutely despicable. The outcome of Trump’s “America First” rhetoric is reflected in the pandemic: the ideological monument is showing signs of collapse; the empire unable to conceal a chaos akin to an ant nest being submerged in boiling water. Is it solely because of the ever-growing number of body bags? Not quite. The ones hauling the corpses are from the bottom rung of society; what strikes the heart of the empire is the profound economic crisis portended by the failures of the financial stock market.
In an unprecedented historical occurrence, the stock market in the U.S. crashed four times within the last ten days; the Federal Reserve’s strategies of slashing interest rates to zero, quantitative easing, and other emergency tools proved ineffective. On March 13, the U.S. declared a state of emergency. On March 17, the Federal Reserve activated an emergency tool used only in the Great Depression and the Great Recession of 2008 – the Commercial Paper Funding Facility. The same day, the federal government announced a $1 trillion economic stimulus plan, which includes a sum of $500 billion in checks distributed to the American public. Still, that was not enough to prevent the fourth stock market meltdown. Though the stock market slowly recovered afterwards, it still follows the trend of the Great Depression and the Great Recession, both of which experienced several upticks during their two-year and one-year plummets respectively, but still resulting in an 89% drop for the former and a 50% drop for the latter. The severity and duration of the financial crash and recession are hard to predict, but for crude oil futures to have a negative value is a phenomenon that has not occurred in the last thirty years. As the idiom goes: “Attract enough lice and the itching stops”—disregarding the astronomical national debt, the U.S. legislative and executive branch form a rare consensus to approve yet another bloated budget. And under the Federal Reserve’s quantitative easing via unconstrained money printing, the current trajectory is that the economic recession will cause countries around the world to experience varying degrees of debt, balance of payments, and liquidity crises. The hegemony of the U.S. dollar falling apart is becoming increasingly likely, as other countries cannot endure its exploitation any further.
I. The evolution of the U.S. Empire’s financial parasitism
More than a hundred years ago, Lenin pointed out that among the features of European imperialism, first and foremost is the control that financial monopolies have over society:
“The supremacy of finance capital over all other forms of capital means the predominance of the rentier and of the financial oligarchy; it means that a small number of financially “powerful” states stand out among all the rest.”
A hundred years later, the main aspect of the U.S. financial monopoly is parasitism that transcends from the material to the immaterial, evolving from societal control to global control. In “Imperialism, the Highest Stage of Capitalism,” Lenin lists the five characteristics of imperialism in the last century: monopolies, financial oligarchy, the export of capital, the formation of international monopolist capitalist associations, and the completion of global territorial division. The fundamental nature of those five characteristics has not changed in a hundred years: “the dense network of the financial oligarchy” and its parasitism have evolved into the soul, mind, and blood of the U.S. economy today.
The evolution of the five characteristics of imperialism:
1) The monopoly on production capital has evolved into a monopoly on all fields. Finance has permeated the multinational monopoly on data, intellectual property, and strategic resources, along with the monopoly of ideology, economic thought, and culture. International accounting information can be seized through the SWIFT banking system, while intellectual property rights, trademarks, patents, design standards, and other intangible assets are abused to extort surplus profits.
2) The merger of banking and industrial capital has evolved into the U.S. dollar hegemony through the logistics of global energy trading. Globally, the U.S. dollar is involved in 70% of trade settlements and accounts for 65% of total reserve currencies, thus generating significant seigniorage revenue. For ten years, the daily forex turnover rate skyrocketed at 40%, almost a third of the U.S. annual GDP. Excluding settlements involving production supply chains, the vast majority of those transactions are merely speculative.
3) The export of capital has evolved into the financial subversion of developing countries using neoliberalism as a weapon. Examples include using the “buy low, sell high” method to exploit the capital market and coercing capital-importing countries into industrial reliance via sovereign wealth funds.
4) The evolution of international monopoly alliances. For instance, the G7, when facing the rise of China after several years of U.S. dominance, is no longer a monolithic block during the dispute regarding the U.S.’s “withdrawal,” with various countries starting to abandon the U.S. dollar.
5) The global market that is being repeatedly contested and divided by old imperialist players. With the Chinese enterprise strategies of “encircle the cities from the countryside” and “Belt and Road Initiative”, countries in Africa, Latin America, Asia, etc. are withdrawing from what the West perceives as “skinny-dog” markets [“skinny dog” in Chinese means lower-end goods with low profitability].
II. The basic contradictions of imperialism newly embodied – the parasitic reaction of finance capital
Lenin pointed out:
“Imperialism is the epoch of finance capital and of monopolies, which introduce everywhere the striving for domination, not for freedom. Whatever the political system, the result of these tendencies is everywhere reaction and an extreme intensification of antagonisms in this field.”
What does he mean by “everywhere reaction?” The pandemic outbreak provides an excellent opportunity for everyone to make such an observation. It demolishes the attempted façade and transformation of the monopoly capitalist class that began during the Great Depression. The contradiction between the privatization and socialization of the means of mass production is still inescapable; it is only starker than ever before.
1. Rentiers are greedier than ever. Manufacturing only accounts for 20% of the U.S. economy. The other 80% consists of a trade service supply chain that is established through finance, technology, information, and military hegemony, collecting “tribute” from wealth produced all around the world. U.S. social spending is backed by a system of money printing and bond issuing at exorbitant amounts. The U.S. government, businesses, and residents all have a combined debt of $30 trillion. The reason why the U.S. is considered to be the most powerful country in the world – along with the inertia of its technological innovation as well as minor industries such as food – is because of its “proficiency” at printing and issuing cash and bonds. The governor of New York once exclaimed: “It is the cruelest irony that this nation is now dependent on China for many of these products.” The U.S. is so accustomed to products being imported from China and other countries for so long, that when facing a critical shortage during a pandemic, they suddenly realize that the “great” U.S. is so fragile in that it cannot produce anything.
U.S. politicians had hoped that manufacturing jobs can return to the U.S., but the reality is that there are many hurdles to overcome while the return of industrial capital poses no urgency for monopoly-finance capital. As of April 14, Renaissance Technologies had taken advantage of the pandemic to sell short under the Medallion Fund with an accumulative return of 39% this year, matching the 40% accumulative return of the Gaoling fund which invests in China. The founder of Renaissance Technologies, Jim Simons, is said to have “beaten” Warren Buffet, earning $10 billion in a single year. The oil futures market preying on Chinese clients of “Crude Oil Treasure” reflects the greed and efficiency of finance monopolies for them to gobble up small and medium-sized capital through technique alone, thus furthering the concentration of capital. The financial capital of Wall Street has no interest in returning manufacturing jobs to the U.S.; this is the conflict between the pro-Wall Street establishment and the populist anti-establishment represented by Trump.
Trump’s “Make America Great Again” is merely an attempt by industrial capital to “patch a hole in the sky.” Unfortunately, it can only be a desperate and ineffectual remedy at best if the only proposed solutions are imperialistic aggression and outdated trade barrier protections.
2. Income inequality. The Great Depression of 1929 taught the ruling class a lesson, and the gap between the rich and the poor had decreased for nearly half a century. But Reagan’s neoliberal economic policies created a turning point in the 1980s, and as of today, the level of inequality matches that of the Great Depression era. The world knows that Trump and his cohorts had willfully ignored the early stages of the pandemic; it is only because of the multiple stock market meltdowns and the certainty of an economic recession that they are now compelled towards grief and action. The evaporation of stock market values torment capitalists to no end. Among them are U.S. senators Marsha Blackburn and Lindsey Graham who, on behalf of Wall Street and the U.S. empire, demand restitution from China. Dan Patrick, the lieutenant governor of Texas, seemed to openly emphasize that the country’s economy was more important than the lives of the elderly when he said, “Those of us who are 70 plus, we'll take care of ourselves. But don't sacrifice the country.” But the pandemic reveals to the public the true nature of capital, which is a craving for profit above all else. Under the banner of “America’s economy” lies the interests of capital, hence the protests against Trump not caring about the lives and deaths of actual human beings, only the stock market and polls. It is difficult to blame the American public who has to work under such conditions; for the 60% of American families who have less than $400 in savings are facing a crisis of survival. They might by chance die to the virus, but self-quarantine guarantees unemployment and bankruptcy, a fate arguably worse than death to illness. As the pandemic worsens, the unemployment rate is surging towards the Great Depression’s record of 24%. More and more people are becoming bankrupt and destitute. Even as the government puts itself further in debt by printing money and handing out benefits, class conflict in the U.S. has only increased to even greater heights.
3. The severe internal strife within the U.S. system. One advantage of the U.S. federal system is its proactiveness on both the central level and the local level, something that Mao Zedong notes in his later years. But the pandemic reveals a fatal flaw of such a system: when conflict occurs, each goes their own way. The federal government and the states are attacking and bidding against each other while contesting for medical supplies. Americans pride themselves on their media and journalism, 90% of which is controlled by six corporations, yet there is so much negative reporting going on as if there is a fascination towards chaos – constantly condemning the president and the government, broadcasting the suffering of the masses, comparing other countries’ bright spots to the incompetence of the opposing U.S. political party, etc.
What looks to be the U.S. “beacon” of liberal democracy is in reality a power struggle between capitalist interest groups, a mere ploy to gain votes. Are equality, human rights, and an end to feudal society not the promises of the United States? The president’s son-in-law Jared Kushner has control over the pandemic response budget, to which he mobilizes national resources to gather rare medical supplies, only to hand them over to five private companies. State governments have to bid against each other to obtain those supplies, and those companies have made a fortune out of a national crisis.
In times of people dying, and the masses having difficulty getting tested, for capitalists it is an opportunity for audaciousness.
In times of people dying, and the masses having difficulty getting tested, for capitalists it is an opportunity for audaciousness. Trump ignores the pandemic and lies compulsively to deceive the polls, but the people are realizing that no matter who becomes president, the duplicity of the system has become the public enemy of middle and lower-class Americans. Furthermore, the exorbitance of debt and money printing not only positions the empire atop a volcano, but its parasitism also attracts the animosity of people all around the world.
III. The greed of Trump’s inner circle fostered by the parasitism of U.S.-China relations
In April of 2016, during the general election, after Trump’s position of reducing taxes for the wealthy received criticism, he tweeted: “Economists say that my tax plan will raise the national debt to 10 trillion. Idiots! I will let China foot the bill!”
Everyone sees that Trump’s magic solution is to repeatedly raise and collect tariffs. The new version of the White House National Security Strategy report views China as a strategic competitor; challenging the bottom line on the Taiwan issue, a trade war, and the threat of military blockade are in gradual development. And while the pandemic is still a pressing matter, the infection of military personnel results in the incapacitation of armed power.
On the one hand, solidifying U.S.-China relations would preserve the arrangement for U.S. parasitism, ensuring that China would continue to purchase U.S. debt in bulk, import high value-added products, import strategic resources reliant on U.S. products such as food, and export low value-added, labor-intensive products. Even though Chinese products only account for 20% of U.S. imports, they usually consist of necessities at a cheap price, thus alleviating class conflict. As the U.S. also gets to keep the surplus-value, the government can increase revenue by choosing to raise tariffs; the devaluing of the RMB keeps retail prices constant so that public unrest is prevented. On the other hand, many signs indicate that the U.S. trade war and military actions are merely smokescreens for setting up a financial chokehold. The objective is to infiltrate and influence China’s financial liberalization reform, as well as attempting to create a financial crisis in China so that Chinese capital would instead flow towards U.S. financial markets, all in service of the ultimate goal of preserving the U.S. financial bubble.
Many signs indicate that the U.S. trade war and military actions are merely smokescreens for setting up a financial chokehold. The objective is to infiltrate and influence China’s financial liberalization reform, as well as attempting to create a financial crisis in China so that Chinese capital would instead flow towards U.S. financial markets, all in service of the ultimate goal of preserving the U.S. financial bubble.
Organizations and scholars from China and abroad have explained the parasitism of U.S.-China relations concisely:
The National Health Report published by the National Health Research Group from the Chinese Academy of Sciences in 2013 reveals that the U.S. uses seigniorage, international inflation tax, sovereign debt, overseas investments, liquid assets, unfair trade practices, currency manipulation, financial derivatives, bulk commodity futures, and intellectual property as the ten avenues for profiting from its global hegemony. Combined, the wealth gained by way of these ten avenues amount to 52.38% of the United States’ total GDP while the wealth China loses to these ten avenues amounts to 51.45% of its own GDP. U.S. profit from these channels reaches $23,836.70 per capita while China’s losses from these channels per capita is $2,739.70, which is 120% of the disposable income of an average Chinese household. (China News, 2013 January 8)
The Director of the Ministry of Commerce’s Institute of International Trade and Economic Cooperation Huo Jianguo states that, for every $100 billion worth of products exported from China to the U.S., the U.S. can profit $80 billion whereas China only receives $20 billion. (China Economic Net, 2010 September 29)
A research paper by Harvard Professor Niall Ferguson succinctly summarizes U.S. parasitism: “China produces, the U.S. consumes.”
IV. Be on high alert against financial theft from the U.S.
“Tighten the fence.” That is what Xi Jinping said when directing the pandemic response, and the same can be said about the relationship between China and the U.S. When the U.S.-China. trade war began more than a year ago, U.S. officials brought up the need to rely on China’s “internal forces” which include the fifth column as well as the long-term infiltration of U.S. neoliberal thought. One such example is that some ideas regarding capital strongly uphold the central belief that the U.S. system sets a model for others.
Astonishingly, Lenin had foreseen the parasitism of the U.S.-China relationship as well as the proletariat response in “Imperialism, the Highest Stage of Capitalism”:
“Imperialism, which means the partitioning of the world, and the exploitation of other countries besides China, which means high monopoly profits for a handful of very rich countries, makes it economically possible to bribe the upper strata of the proletariat, and thereby fosters, gives shape to, and strengthens opportunism.”
Fixating at what Lenin deemed as “the greatest potential reservoir of profit” (China), the United States is eager to construct their fantasy version of “Chimerica”; encouraging slogans like “To save America is to save China” and “Make China pay!” has become a preoccupation of the last two presidential election campaigns. To use the pandemic as an excuse to demand sky-high financial recompense is merely the natural expression of Euro-American monopoly capital.
But Lenin’s theories on the parasitism of imperialism followed by its inevitable decay and death was regarded as outdated at the onset of the Soviet Union’s collapse, having been scorned by Gorbachev’s perestroika. This development also resonated within China for a long time: capitalism is fully alive, whereas socialist factions are disbanding one after another—where is the death that Lenin had predicted? Chinese scholars thereby regularly warn the people not to underestimate the rational appeal of capitalism.
“No social order is ever destroyed before all the productive forces for which it is sufficient have been developed, and new superior relations of production never replace older ones before the material conditions for their existence have matured within the framework of the old society.” (Karl Marx, “A Contribution to the Critique of Political Economy”)
Marx’s “Two Nevers” quote is often misused by pseudo-Marxists to defend capitalism by conflating parasitism with productivity. They believe that what they perceive as the “new superior” relations of production – worker cooperatives, for instance – are distant, abstract ideals that are far too impractical to put into practice when in reality, those socialist aspects already exist in capitalist societies since Marx.
Within this area of thought, the Washington Consensus’ proposal of privatization, liberalization, and marketization, spearheaded by U.S. economist John Williamson in 1989, received high praise from figures within and outside the Communist Party of China. One published an article saying: “An objective analysis shows that the three proposals of the ‘Washington Consensus’ have already been implemented in China…the state-owned sector’s contribution towards the national economy is not that significant, only around 30%.”
Since the 18th National Congress, comrade Xi Jinping summarizes the lessons learned from forty years of reform and openness as well as the prospects of a new Chinese renaissance, putting forward a clear-cut stance:
“All party comrades must keep in mind, what we are building is socialism with Chinese characteristics, not some other doctrine. The high-quality development of China’s future economy must also proceed in freer conditions.”
As more and more people support a global community that advances a shared human destiny, unilateralism and hegemonism being increasingly unpopular, the Beijing Consensus and the Belt and Road Initiative receiving unprecedented systematic favor, and the imminent collapse of the Washington Consensus can be confidently asserted, we must now reject dogmatism that ignores current circumstances while also maintaining a solid grasp on the quintessence of Lenin’s Imperialism. Within the waltz of mutual support and understanding, we must identify the parasitic aspects of monopoly-finance capital and be especially cautious towards a neoliberal ideology that endorses financial opening. Tighten the fence and drive the piles, remember Russia’s painful lesson of being looted by the U.S. after its own financial opening, and steadfastly fight against the parasitism of U.S. monopoly capital. The future of the U.S. is the product of the country’s internal conflict in motion; therefore the biggest contribution China can provide to the U.S. people is to refuse any economic activities that would foot the bill for U.S. parasitism.
We must identify the parasitic aspects of monopoly-finance capital and be especially cautious towards a neoliberal ideology that endorses financial opening. Tighten the fence and drive the piles, remember Russia’s painful lesson of being looted by the U.S. after its own financial opening, and steadfastly fight against the parasitism of U.S. monopoly capital.
The decades-long trend of neoliberalism that is still commonly accepted today was vividly dissected by Lenin a hundred years ago. We will conclude with a warning from the instructor of the revolution:
“(This all causes) …the propertied classes to go over entirely to the side of imperialism. ‘General’ enthusiasm over the prospects of imperialism, furious defence of it and painting it in the brightest colours—such are the signs of the times. Imperialist ideology also penetrates the working class. No Chinese Wall separates it from the other classes.”
2020, April 20, to commemorate the 150th birthday of the great Vladimir Lenin