On September 10, far-right youth group Turning Point USA leader Charlie Kirk was assassinated by a sniper at Utah Valley University in Orem, Utah. The FBI arrested 22-year-old Tyler Robinson, who turned himself in at the urging of his family. Turning Point USA specializes in organizing far-right youth to support the Republican Party and Donald Trump. Kirk was a thorough-going bigot who specialized in baiting African Americans, Muslims, women’s rights activists, gays, trans people, leftists, progressives and liberals. He also made anti-Semitic remarks that in no way excluded his strong support for Zionism.
Kirk belonged to a right-wing tendency called Christian nationalism that claims the United States is a “Christian nation.” In Kirk’s eyes, if you aren’t a white Christian, you are not a “real American.”
Kirk believed the separation of church and state, a basic principle of (bourgeois) democracy, should be abolished. As far as I know, Kirk didn’t engage in gun violence personally, though he glorified guns, stating, “I think it’s worth it. I think it’s worth to have a cost of, unfortunately, some gun deaths every single year so that we can have the Second Amendment to protect our other God-given rights. That is a prudent deal. It is rational.” In an ironic twist of fate, among those “unfortunate gun deaths” was Charlie Kirk. (1)
As soon as Trump announced Kirk’s death, the capitalist media practically canonized the professional bigot. Trump is now 79 years old, and there are growing rumors that he’s in poor health. He is serving his final constitutionally allowed term, and if he survives it, he will have to leave office no later than January 20, 2029. (2) After that, in light of the events of January 6, 2021, there is suspicion he may attempt to stay in power one way or another.
In light of his age and the laws of biology, the time cannot be far off when Trump will cease to be the leader of the far right in the U.S. If he had lived, Charlie Kirk could have been a strong candidate to succeed Trump. If you don’t like Trump as president, you would certainly not have liked Kirk.
Kirk’s death means he’ll never sit in the Oval Office. But the far right has many would-be successors, some even more extreme than Charlie Kirk.
The problem isn’t a Trump, or a Kirk, or even an Adolf Hitler as individuals. It is the capitalist system that allows these individuals, under given historical circumstances, to cause enormous harm.
Marxism and individual terror
As capitalist class rule becomes increasingly unbearable to a greater number of people, a few in despair will “pick up the gun” and engage in individual terror. They attempt to assassinate and occasionally succeed in killing particularly hated persons.
These individual terrorists are motivated by various ideologies. However, they all believe that the basic evils caused by the laws of capitalist society and economy can be eliminated by killing the individuals who, in their eyes, personify these evils. It has been observed that some believe it’s enough to remove a few hateful individuals from political office. Liberals advocate for elections, while terrorists use assassination. If they are right, the evils of capitalist society do not go very deep. (3)
Marxists take an opposite view. We do not think removing a few individuals will eliminate the evils of capitalist society. The abolition of the exploitation of the world’s workers by a class of nonworkers can only be accomplished by a complete transformation of the relationships of production. To achieve this, we must organize the working class on a massive scale to carry out the transformation, despite the fierce and often violent resistance of the capitalist class. Individual acts of terror, regardless of their intentions, have only harmful consequences.
Some of these consequences we see right now. The mass media have elevated Kirk’s reputation close to sainthood. Trump supporters swear to take revenge for Kirk’s violent end on the “radical left” — liberals, progressives, LGBTQ+ activists, Democrats, Muslims, as well as socialists-communists.
Kirk’s assassination, an act of individual terror, encourages the tens of millions of working people who hate what Trump and Kirk represent to put their hopes in heroes who will take personal revenge on their tormentors while they remain passive. This won’t work.
We Marxists have a different message. If the oppressed are to end their misery, they must organize and fight on a massive scale. No individual with a rifle will liberate the working class and its allies. Only mass organization is the road forward. “Workers of the world, unite!”
An individual act of terror involves many accidental elements, though there’s a general pattern. As class contradictions become unbearable, many are driven into despair. A small number will resort to individual terror. No wonder.
If we look at society today, we see the government under Biden and now Trump pouring tens of billions of dollars into Israel for it to carry out genocide against the Arab people of Palestine. And despite some predictions that Trump is about to “walk away” from the war in Russia-Ukraine, he has not done so.
In the meantime, U.S. imperialism continues to threaten China, has pushed things to the brink of war against Venezuela and is continuing to fuel bloody wars in Africa.
The people in the U.S. demand medical care as a human right as the Trump regime moves in the opposite direction. It’s “big beautiful bill” guts the Medicaid program for poor people below age sixty-five. Representatives in Congress, especially Republicans who voted for the bill, attending their district report-back meetings face crowds of furious people. Increasingly, they are canceling the gatherings.
The class struggle
Behind the increasingly turbulent political situation in the U.S. and around the world, there lurks the class struggle between the capitalists that appropriate surplus value on one side and the class that is forced to sell their labor power and perform unpaid labor on the other.
The increasing sharpness of the class struggle occurs in the shadow of the historic defeat the working class suffered thanks to the Russian and Eastern European counterrevolutions of 1985-1991. For more than three decades, the level of class consciousness of much of the working class (especially in Europe) has been lower than it has been since before the October 1917 Russian Revolution.
This is reflected in the electoral gains being made by European far-right parties. The effects are also being felt in the United States, where the class consciousness of the working class has always been low. In this climate, it’s not surprising that some individuals, mostly young men, are engaging in individual terror. In time, the evolving class struggle will lead to new growth in class consciousness among the international working class.
The class struggle is intensifying due to the deteriorating economic situation, and it has two aspects. One is the increasing economic competition that the old capitalist countries of Europe and the U.S. face from former colonial and semi-colonial countries, especially China.
The other factor is the approaching downturn in the global industrial cycle.
This takes us to the mechanism through which the industrial cycle manifests itself, which I have been exploring throughout this blog. I have been investigating the mechanisms of the industrial cycle for almost seventeen years now, and will summarize some of these findings as they shed light on the current troubled political situation we find ourselves in.
The law of value
In the wake of a crisis such as that of 2007-09, the money market is saturated with a large amount of idle money capital. This is reflected in the low interest rate, which indicates an accumulation of money in the banking system. The central bank can set the interest rates it controls outright, the (re)discount rate, or that it manipulates: the federal funds rate. This gives the impression that the central bank itself sets the overall level of interest rates — this is false.
When money capital is abundant, the central bank can push the interest rate it controls to low levels. It appears interest rates in general are set by central banks at low levels — an illusion. When we say money capital is abundant, we mean that the money commodity, gold as a material use value, is abundant relative to the quantity of non-money commodities, that, along with the gifts of nature, make up the wealth of the world. The actual amount of gold and its relationship with the amount of non-money commodities is beyond the control of even the most powerful central bank, the Federal Reserve of the United States, or any other central bank or central banks acting together.
The law of value of commodities works through the mechanism of competition, which tends to lead to profits among capitals of equal size over equal periods of time to equalize. This includes the capital used to produce the money commodity.
For the profit rate to equalize among all commodities, including the money commodity, all other commodities, except the money commodity and labor power, must sell at their prices of production. The commodity that serves as money does not have a price of production in the proper sense of the word because prices are reckoned in terms of the use value of the money commodity.
Labor power is not sold by capitalists but by workers who have no capital. The price of labor power is formed by the commodities the workers must purchase on the market to reproduce their own labor power. If the equalization of the profit rate were ever achieved, the market prices of the items the workers must buy to reproduce their labor power would equal their prices of production.
In the real world, commodity prices will never equal production prices. What is true is that commodity prices cannot deviate too far from their production prices without setting forces into motion that drive them back toward their production prices. This process is enforced through competition among the commodity owners against one another.
When commodities are overproduced
Periodically, this gives rise to a situation where the money commodity is under-produced. Or as we normally refer to it, non-money commodities that through their use values constitute the mass of wealth produced by human labor in the world are overproduced. When commodities are overproduced, money becomes scarce because the commodity that serves as money is being underproduced relative to non-money commodities.
The financial press calls this “tight money” and “high interest rates.” In the wake of a crisis of overproduction, the production of non-money commodities is depressed due to the low or negative profit rate. In contrast, the production of the money commodity rises due to a higher-than-average profit rate in the production of money material.
The overproduction of non-money commodities gives way to its opposite, the underproduction of non-money commodities relative to the overproduction of the money commodity. This is marked by low interest rates and an abundant supply of loan money.
In this economic climate, the state can borrow large amounts of money (run deficits) without raising interest rates. This encourages the state to spend a lot of money that stimulates economic recovery — so-called Keynesian policies. This situation arises periodically through the operation of the industrial cycle, which encourages capitalist states to follow aggressive military policies that end in war. The classic example of this is the 1930s.
Overproduction develops, money gets increasingly tight, the money market tightens, and interest rates rise. The state is then pressured to reduce its deficit spending and follow “austerity policies” that tend to end in recession. As recession threatens, what prevents the central bank from flooding the money market with newly created money until money is abundant and interest rates fall before the recession arrives?
What stops the central banks is the commodity nature of money. As explained throughout this blog, the impossibility of establishing “non-commodity money” is the fatal flaw in Keynesian economics.
If the central bank tries to drive down interest rates when overproduction is driving them up, the demand for the money commodity, gold, increases. The currency, the dollar price of gold, rises. (4)
The rising dollar gold price signals depreciation of the currency. Each dollar represents less and less actual gold (real money), the prices of commodities measured in dollars rise (inflation), driving up interest rates.
If, in trying to keep interest rates down and the boom going, the Federal Reserve creates more dollars, inflation accelerates, leading to even higher interest rates. If it continues, hyperinflation sets in, and the dollar spirals toward total collapse, where it could cease to function as money and under current global circumstances, the collapse of the U.S.-NATO empire.
The situation where the U.S. can import more commodities than it sells abroad year after year and maintain an artificially high standard of living for the working and middle classes would come to a crashing end. The class struggle would explode that, carried to its logical conclusion, would mean either a socialist revolution or a bloody fascist dictatorship with all the consequences flowing from that.
To stave it off, the Federal Reserve has to balance between the risk of a deflationary super depression like that of the 1930s (that led to a radicalization of the U.S. working class) or a hyper-inflationary collapse of the U.S. empire. As long as gold remains abundant relative to non-money commodities, the Federal Reserve can follow an “easy” monetary policy designed to encourage capitalist prosperity and relatively low unemployment (called “full employment” by capitalist economists).
As overproduction develops, it drives up interest rates, and the Federal Reserve has to increase its target for federal funds to prevent runaway inflation caused by the depreciation of the dollar against gold (the rising “dollar price of gold”).
Ultimately, due to the commodity character of money on one hand and the drive of global capitalist industry to increase production without limit on the other, neither the Federal Reserve nor any other central bank can avoid a crisis. Capitalist central banks are limited to staving off the inevitable crisis as long as possible.
When industrial capitalists expand capitalism too rapidly, as in the wake of the COVID-19 shutdowns, the job of the central bank is to slow them down by pushing up the “fed funds” rate. If the economy slows down, as it is now (fall 2025), the Federal Reserve cuts its target fed funds rate to stave off recession.
Hence, the Fed decision to reduce its federal funds target by 0.25% in September 2025. The game ends (as it always does) when the Federal Reserve cannot maintain federal funds sufficiently low to prevent recession without causing gold demand to soar, triggering runaway inflation and ultimately higher fed funds rates and interest rates in general.
This was the lesson of the 1970s. From the viewpoint of central bankers, recessions must be allowed periodically to prevent the collapse of both the national and international dollar systems. A collapse would trigger the worst economic crisis in history. A crisis might be postponed, but never avoided.
The crisis unfolds against political situation
Every successive crisis and pre-crisis situation unfolds against a particular political situation. While an economic crisis forms its foundation, the political situation reacts on the economic situation, as a kind of secondary effect.
For example, as recession threats increase, the Federal Reserve comes under political pressure to lower the federal funds rate to prevent (in reality, only postpone) the recession. The job of the Federal Reserve is to resist this pressure.
Once overproduction has developed to the point where a crisis can no longer be safely postponed, the chairperson of the Federal Reserve Board of Governors, now Jerome Powell, becomes the scapegoat for the inevitable economic crisis. It is part of the job description.
We see a difference between the Biden Democratic administration and the Trump Republican administration with its strong Bonapartist leanings. Biden (and Democrats in general) have, in recent years, expressed strong support for the independence of the Federal Reserve.
Trump has been more aggressive in demanding that the Federal Reserve lower interest rates. Since the end of the international gold standard, the principle of central bank independence has become primary for capitalist central banking. Under the international gold standard, the legal responsibility to maintain a fixed rate of exchange between the banknotes they issued and gold served as a guarantee against the dangers of currency collapse and runaway inflation.
Today, there is no legal gold standard to hold the central bank in check. Capitalist politicians are under constant pressure to prevent recession and mass unemployment. They can sometimes postpone a recession, but they cannot prevent it.
During the overproduction preceding the crisis, capitalist politicians will press, or at least pretend to, for easier monetary policies than the central bank can safely follow. This is where the independence of the central bank comes in. Once overproduction approaches the critical stage, the bank follows a tight monetary policy while politicians complain about interest rates that are “too high” for “too long.” Because the central bank is “independent,” there is nothing that they can do about it.
When a recession and mass unemployment arrive, politicians blame the central bankers for underestimating the danger of recession. The anger of the people gets directed away from the capitalist system and toward the central bankers who happen to be in office at the time. Economists do their part, joining the politicians in blaming the bankers.
Trump attempts to fire central banker Lisa Cook
The Bonapartist Trump administration, unlike Genocide Joe Biden, increasingly demands that the Federal Reserve lower interest rates, which, considering dollar gold prices have recently risen above $3500 an ounce, would be dangerous. The Fed limited itself to 0.25% and said it will probably make two more such cuts during the rest of 2025.
Even these limited steps might prove to go too far, though that depends on whether or not the economy is entering a recession. If it turns out that it is, the cut will be appropriate to the needs of the capitalist system, and deeper cuts could be justified. If there is no recession on the horizon, this could prove to be a mistake. It will be a while before we know.
Rather than blaming the recent limited rise in unemployment on overproduction rooted in the basic contradictions of capitalism, the media blame it and recent signs of renewed inflation on Trump’s erratic tariff polices. I certainly do not deny that tariff policies are having a negative effect on the economy and workers’ living standards. We should oppose them. In the final analysis, Trump’s policies are an attempt to shift the recessionary pressures fueled by global overproduction from the U.S. economy to those of other countries.
As part of his pressure campaign on Powell to cut interest rates, Trump tried to fire Lisa Cook from her position as a member of the Board of Governors of the Federal Reserve. Cook is an African American woman. Until recently, it would have been unthinkable for a woman or an African American, let alone a person who is both, to sit on the Board.
Unlike members of the president’s cabinet, Federal Reserve Governors, all of whom sit on the open market committee, can only be fired for “cause” — though that is open to interpretation. The reason Trump gave was that Cook claimed more than one house as her primary residence. I won’t get into the legal technicalities because I don’t know them. But given the Trump administration’s general political orientation, the decision reeks of racism and misogyny. As for the legal situation, Cook has not been convicted of any crime (unlike Trump).. I am no lawyer, but to the best of my knowledge, in the United States, a person is considered innocent unless proven guilty by a court of law.
There is another question, one that concerns the continuing ability of the dollar to serve as the world’s chief currency, the representative of real money, gold, in global commodity circulation. The dollar is under pressure in this regard for two reasons.
One is the declining share of the total amount of commodities produced in the U.S. relative to the rest of the world. Additionally, it is worth noting that it has been more than fifteen years since the last global crisis of overproduction.
It was the Genocide Joe administration that “weaponized” the dollar when it seized Russia’s foreign reserves deposited in U.S. and Western European banks. This made Russia and any other country that might clash with U.S. imperialism nervous about keeping their money in dollar-denominated assets.
Would you want to keep money in a bank if there is a good chance it will seize your deposit and steal your money?
The policies of the Biden and Trump administrations forced other countries, which have some independence from the U.S., to reduce their foreign currency reserves held in dollars. They fear that their currency reserves could be seized for political reasons. They may also fear that Trump could pressure the Federal Reserve to follow an irresponsible monetary policy, leading to major losses in the real value of their reserves.
Increasingly, foreign central banks are preferring gold over dollars. In addition, cyclical global overproduction increases the chances of a run against the dollar into gold, which could unleash a financial and economic crisis for the entire global capitalist system. We’ll follow this situation as it unfolds.
Ukraine war
On August 1, Donald Trump and Vladimir Putin held a summit meeting in Alaska. This raised hopes that the Russo-Ukrainian conflict, which has been raging for more than three years, may be coming to an end, though such hopes have so far gone nowhere.
Satellite European imperialist countries have opposed any movement for peace unless European “peacekeepers” get to occupy Ukraine. There has been talk online that Trump might simply “walk away,” and if this happened, the collapse of the Kiev regime would likely follow quickly. Polls within Ukraine indicate that public opinion is shifting against the war. Wars tend to be popular at the beginning, but when fighting drags on for months and years, support erodes, then collapses.
Beyond Russia and Ukraine, there is a divide in opinion between the Global North, which generally supports Ukraine, and the “Global South,” which has been more favorable to Russia. The roots of this war extend far into the past.
The city of Kiev was the site of the Kievan Rus, a medieval state that both the Russian and Ukrainian nations consider to mark the beginning of their national histories. Subsequently, Ukraine became part of the Russian Empire, which later collapsed in the revolutions of 1917. The Russian and Ukrainian nations are closely related.
Many in the revolutionary camp considered the idea of Ukraine as a separate nation merely reflective of the attitudes of some Ukrainian intellectuals, but not of the people themselves, who do not consider themselves a separate nation. Though there are, of course, many differences, this is somewhat like the dispute of whether or not African Americans are an oppressed race within the U.S. or are a separate nation.
Vladimir Lenin held the view of Ukraine as a separate nation, while Vladimir Putin sees Ukrainians as Russians. Putin complains that if Lenin had treated Ukraine as part of Russia, capitalist Ukraine today would be part of capitalist Russia.
Not only would Ukraine’s raw materials and “black earth” grains add to Russia’s balance of payments, but there would be no war between them, and Russian capitalism would be stronger. In contrast, Lenin was not interested in strengthening Russian capitalism. He was interested in maintaining the firmest possible relations between the working class of the two entities in the struggle to build an international communist society.
The trouble with many leftists, especially in the West, is that they write about the relationship between Russia and Ukraine without knowing anything about the concrete history of the territories or their people. People from the Global South are repelled by the Kiev regime, which is seen as allied to the U.S.-NATO empire. In contrast, Russia has opposed that world empire in recent years and has offered material support to nations in the Global South in their resistance to it.
Ukraine has a complex history. Slavs entered the scene around the time the Western Roman Empire was collapsing. Over the centuries, Slavs divided. Those in the east eventually became Russians, those of the west became Poles, and in the 20th century, those of the south formed the country of Yugoslavia ( meaning “south Slav”), a federation of small nationalities. Yugoslavia was destroyed under the pressure of U.S.-led world imperialism following the Russian counterrevolution of 1985-1991. In addition, there are a series of smaller Slavic nations such as the Czechs, Slovaks (who formed Czechoslovakia during the 20th century, which also broke up after the 1985-91 counterrevolution), Bulgarians, Belorussians, etc. Western Slavs formed the Polish nation.
The first Slavic people to settle the area that was to become Ukraine were the Poles, a western Slavic group. Some of these became landowners. Later, Russians, Eastern Slavs, arrived, and with the passage of time, they became Ukrainians.
Ukraine means borderland. The emerging Ukrainians often became serfs of the Polish landowners. Jews who lived there often acted as agents of the Polish landowners, which didn’t make for the best relationships between the Ukrainian peasant and Jewish populations. As a result, the relationship between the Russians, Ukrainians, Poles, and Jews was marked by class mixed with national antagonisms that often led to hostile relations between them all.
As a rule, the farther east you go, the less “Ukrainian” and the more Russian the population becomes. The Ukrainian language gradually diverged from Russian beginning in the 12th century, with literary Ukrainian emerging in the 18th century. It is spoken in its purest form (most distinct from Russian) in the West. In eastern Ukraine, Russian is spoken, with occasional Ukrainian words or pronunciations.
The area known as the Donbass, claimed today by both Russia and Ukraine, was industrialized by European capital in the late 19th century. The current war has been fought mainly in the Donbass. South of the area lies the Crimean Peninsula. At its southern tip is the city of Sevastopol, which was fought over during the Crimean War of the 1850s and briefly seized by Nazi Germany during World War II.
In many ways, the current war can be viewed as a modern version of the Crimean War. Control of Sevastopol has been vital to Russia since the days of Catherine the Great, as it provides access to warm-water ports and guards access to the Mediterranean.
Lenin’s policy toward Ukraine
Lenin championed the right of Ukraine to self-determination, which he considered, unlike Putin, a nation separate from Russia. Lenin also wanted Ukraine to associate with Russia on a new basis.
There were problems. First, there was the relationship between Russians who, under the Czardom, oppressed the Ukrainian people, as well as Poles and Jews. In addition, Ukraine contains some of the world’s richest agricultural lands.
At the time of the Russian Revolution, Ukraine, excluding the industrialized Donbass region, was predominantly a peasant country. This meant that without the Donbass, there was no chance of creating a worker-led government in Ukraine. Lenin realized that without the Donbass, Ukraine would be ruled by the capitalists.
Let’s fast-forward a bit to understand the consequences of this development. In 1931, Stalin said, “We are fifty or a hundred years behind the advanced countries. We must make good this distance in ten years. Either we do it, or they will crush us.” Leaving aside the possibility that a different policy by the Communist International might have stopped Hitler’s rise to power in Germany, Stalin’s words proved all too true. Ten years later, Nazi Germany launched Operation Barbarossa.
To industrialize, the Soviet Union imported massive amounts of machinery from the Western imperialist countries. These machines had to be paid for in cash, as Western capitalists were not willing, with few exceptions, to invest capital in the USSR. This was true despite attempts by the Soviet government to convince them to do so during the New Economic Policy (NEP) between 1921 and 1927.
The only way the Soviets could raise the money was to sell grain (which Soviet Ukraine played a crucial role in producing) on the world market.
The cost was high. Problems were compounded by the fact that the early 1930s saw the super-crisis of 1929-33 and the lingering Great Depression that was to ravage the global capitalist economy throughout the critical decade of the 1930s.
The prices of agricultural commodities such as wheat, which the Soviet Union exported to raise the money for the machinery needed for industrialization, dropped more than the price of the machinery the Soviet Union was importing. In 1932-33, a drought also occurred in Ukraine, which, combined with disruptions caused by the collectivization of agriculture, led to a massive famine in the country.
Ukrainian nationalists called the famine the Holodomor, “time of hunger,” and claimed that Stalin harbored a special hatred for their nation. Perhaps he did; who knows what was going on inside Stalin’s head? However, to the best of my knowledge, there is no evidence to support this claim.
Capitalist historians call it a manufactured famine, deliberately induced to destroy an entire nation. Today, we are witnessing a real manufactured famine, this time in Gaza. There’s evidence that the leaders of the Zionist entity, supported by U.S. imperialism, see the manufactured famine in Gaza as part of their plan to destroy the Palestinian-Arab nation. It can only be called genocide.
Did the Stalin government actually follow a similar policy in Ukraine?
Besides a Ukrainian genocide being a monstrous violation of the principles of the Russian Revolution, such an attempt would have represented economic suicide on the part of the Soviet Union and the Stalin leadership. To carry out his industrialization program, Stalin needed the Ukrainian peasants to raise as much grain as possible to be exported to the imperialist countries, thereby raising the money to purchase the machinery needed for industrialization.
It would have taken decades to replace the peasants with producers from any other nation or nationalities, decades the Soviet Union did not have. Mistakes and excesses by the Stalin leadership certainly played a role in the famine, but it can be excluded that it was caused by any attempt by the leadership to exterminate the Ukrainian nation.
Ukrainian nationalists often emphasize the role of Lazar Kaganovich, head of the Ukrainian Communist Party at this time. Kaganovich, an enthusiastic ally of Stalin (more Stalinist than any other member of the Soviet leadership, according to Vyacheslav Molotov in his memoirs), was of Jewish-Ukrainian origin.
When the nationalists emphasize the role of Kaganovich, they give their claims of genocide an anti-Semitic twist. It is their way of saying, “The Jews were out to exterminate Ukraine.” This is why we should not use the term “Holodomor” to refer to the tragic famine of 1932-33.
Under Stephen Bandera’s leadership, Ukrainian nationalism took on a fascist form, centered in western Ukraine. Ukrainian fascism, as noted above, was strongly anti-Semitic and anti-Polish. Western Ukraine, which was not part of the Soviet Union until 1939, was part of Poland, a fact that didn’t make Ukrainian fascism any less anti-Polish. During the so-called “Holodomor,” this part of the Ukraine was not even part of the Soviet Union.
However costly it was, industrialization was sufficiently achieved in ten years to make it possible for the Soviet Union to prevail against Nazi Germany. We know that the Soviet Union succumbed to imperialist pressure and internal counterrevolution, but that didn’t occur until 40-45 years later.
Before the Soviet Union was destroyed we saw the great Chinese Revolution that made modern industrial China possible, the CIO in the U.S., the end of the Jim Crow system in the U.S. South, the victory of Vietnam and Laos against U.S. imperialism, the Cuban Revolution, the end of direct colonialism in most of Africa, the winning of the right to medical care as human right in Western Europe, and many other things we tend to take for granted today, that would not have been won if Nazi Germany had been victorious against the Soviet Union.
Returning to the time of Lenin, how did he achieve the victory of the Soviets in peasant Ukraine? He did it by encouraging the Donbass to become part of the country. The Donbass, as mentioned above, was one of the most industrialized parts of the Czarist empire. By convincing Donbass to become part of Ukraine, it gave a proletarian head to the peasant body.
Putin has expressed bitterness about Lenin’s policy. Lenin, of course, was counting on the victory of proletarian revolutions, not capitalist counterrevolution, during the 20th century. However, as it turned out, his farsightedness proved to be the correct policy for the time. This doesn’t make it correct for the different conditions created by the counterrevolution of 1985-91 that prevail today.
How about Crimea? Didn’t Russia steal Crimea from Ukraine? If you look at a map, Crimea appears to be a southern peninsula of Ukraine, and is identified as such. So that case seems to be clear-cut.
In reality, Crimea has been majority Russian since the 1860s. There was a Tatar community, a Turkic people, in Crimea, but at the time of the 1917 revolution, Crimea was overwhelmingly Russian. As a result, under Lenin, unlike with Donbass, there was no thought of making Crimea part of the Ukrainian Soviet Republic. Under Lenin, it was made part of the Soviet Russian Republic.
In 1954, on the two hundredth anniversary of the conquest of Ukraine from the Ottoman Empire by Russia under the leadership of Catherine the Great, Crimea was “gifted” by the Russian Soviet Republic to the Ukrainian Soviet Republic. Why was this done? Since Russian Crimea was geographically separated from the rest of Russia, there were some administrative advantages. When it was transferred, an overwhelmingly Russian region was put under the administration of another nation, Ukraine.
This occurred right after Stalin’s death, when Nikita Khrushchev, as the first secretary (general secretary) of the Central Committee of the Communist Party of the Soviet Union, was struggling to establish his leadership. Khrushchev had been the head of the Ukrainian Communist Party for many years before becoming the first secretary of the CPSU after Stalin’s death in March 1953. Ukraine formed an essential part of his political base.
In 2007, Yale University Press published the memoirs of Dmitrii Shepilov (1905-1995) under the title, “The Kremlin’s Scholar.” Shepilov wrote this document in the 1970s, long before the present Russo-Ukrainian war. When he wrote it, such a war seemed unimaginable. Today, Shepilov, as was true already in 2007, is almost entirely forgotten, and such books are not published by a major university press for a mass audience but only for the information of imperialist experts.
In the 1950s, Shepilov, an economist, was a rising star in Soviet politics, eventually becoming a full member of the Central Committee and a candidate member of the Presidium (Politburo). He briefly served as foreign minister of the Soviet Union in 1956-57. He later became a political enemy of Khrushchev and was expelled from the CPSU for supporting the unsuccessful attempt within the Presidium to remove Khrushchev as First Secretary in 1957. Shepilov was accused of joining the anti-party group, as Khrushchev called his internal party opponents. In the 1970s, he finally succeeded in obtaining readmission to the CPSU.
If this document is to be believed, Khrushchev’s motive for transferring Crimea from the Russian to the Ukrainian Soviet republic was political, not administrative. It was to strengthen his political position within the party. If we are to believe this document, V.M. Molotov, the perennial second-in-command of the Soviet Union (until he fell out of favor during the final years of Stalin’s life), voiced opposition to Khrushchev’s proposal but did not press the issue because, according to Shepilov, at that time members of the Presidium were eager to maintain a united front.
The transfer of Crimea was more significant than the transfer of a region of a U.S. state to another because states do not have the character of separate nations or nationalities. Soviet republics were considered separate nations, and the transfer of ethnically Russian Crimea to the Ukrainian Soviet Republic violated the principle that boundaries of Soviet Republics should reflect the national composition of the geological areas that made up the Soviet Union.
Unlike U.S. states that have no constitutional right to secede from the union, a Soviet republic had this right guaranteed by the Soviet constitution. As long as the CPSU remained intact and maintained political leadership, there was no chance any of the republics would secede. Once the party split apart and lost control of most of the republics, including what was still formally the Soviet Russian Republic under the leadership of Russian President Boris Yeltsin, in 1991, the Russian and Ukrainian republics seceded from the Soviet Union.
What remains of the Russian Revolution
The Russian Revolution destroyed the Czarist empire, which kept many nations, including Ukraine, under the domination of Russia. The combined revolution of 1917 was a bourgeois democratic revolution inasmuch as it ended feudal relations on the land and the rule of Russia over the other nations of the empire.
It was a proletarian socialist revolution insofar as it achieved the nationalization of industry and moved toward socialized agricultural production.
The combined bourgeois and socialist revolutions were achieved through the leadership of the Bolsheviks, afterward known as the Communist Party. The Union of Soviet Socialist Republics, established in 1922, was open to all nations of the world, including, however strange it might seem today, the United States of America when the U.S. working class seized state power.
The Soviet Union was not meant to be another name for Russia. In the early days, Russian communists looked forward to the day (that they hoped would come soon) when Russia would no longer be the leading nation of the Soviet Union.
As we now know, history did not develop that way. After 1945, when workers’ states were established in Eastern Europe, they did not become part of the Soviet Union. This was a major retreat from the original aims of the Russian Revolution.
In the years following Lenin’s death, the Soviet leadership came to view the Soviet Union as a nation-state alongside other nation-states, with the difference that the Soviet Union was socialist rather than capitalist. This was a retreat from the original aims of the revolution.
Today, the Russian government of Putin is attempting to consolidate Russia as a bourgeois national state. From his point of view, the Russian Revolution was a tragic excess caused by the failure of the Czarist empire to transform itself through timely reforms into a modern bourgeois nation-state. Putin, a Russian nationalist, sees Ukrainians as fellow Russians who were wrongly convinced by the Bolsheviks, as well as Ukrainian nationalists, that they are a nation different from Russia. Putin also realizes that present-day capitalist Russia cannot just take over Ukraine and rule over it like the Czars once did.
During the so-called Cold War, imperialist propaganda often pictured the Soviet Union as a continuation of the Czarist empire. Even today, bourgeois propaganda talks about the “Soviet empire.” Much of the Western left, no longer remembering the days of the Russian Revolution, more or less accepts this view.
The Russian Revolution destroyed Czarism and the Russian Empire. This was a conquest dreamed of by generations of revolutionists. This conquest remains fully intact. The 1917 revolution swept away the feudal economy on which the Czarist empire rested and was not restored by the 1985-91 counterrevolution.
The counterrevolution, though it restored some Czarist symbols, has not been able to restore the feudal economy. What it did was to liquidate everything socialist that had been achieved by the October Revolution, especially the state-owned industrial socialist planned economy, the system of state farms, and the semi-socialist system of collective farms. Today, Putin’s government rests on the weak capitalist foundations established by the 1985-91 counterrevolution, not the feudal foundations of the czars.
Putin’s Ukrainian policy
Putin’s Ukrainian policy has gone through various stages. Originally, he wanted Donbass to remain attached to Ukraine. The largely Russian population acted as an electoral counterweight to western Ukraine, which was part of Poland until 1939 and has a largely pro-imperialist orientation. It is a stronghold of modern Ukrainian nationalism and fascism.
Before the Euromaidan coup of 2014, the pro-Russian vote of the Donbass counter-balanced the pro-imperialist vote of western Ukraine. This helped keep Kiev neutral regarding the growing struggle between modern capitalist Russia and the imperialist U.S.-NATO empire.
For its part, the U.S.-NATO empire, while delighted by the destruction of the Soviet Union and its socialist property forms, was not satisfied — finance capital never is. U.S.-NATO is determined to dismember today’s capitalist Russia. One idea is to split Russia into three separate countries.
After the Euromaidan coup, Putin decided to take back Crimea with the support of its overwhelmingly Russian population. The Russians of Crimea, all proportions guarded, had no more desire to live under the far-right, Russian-hating, Nazi-ridden Euromaidan regime than Palestinians want to live under the racist, Arab-hating, genocidal Israeli apartheid regime. The difference being that capitalist Russia, though weak compared to the Soviet Union, is still stronger than the Arab nation and was strong enough to protect Crimean Russians from the Ukrainian nationalists.
With its back against the wall, Russia, allied with China and the Democratic People’s Republic of Korea (North Korea), decided to fight back. At the beginning of 2022, as the Nazi-ridden Kiev regime prepared a new offensive against the Donetsk and Lugansk people’s republics, Russia launched a counterattack called the Special Military Operation. A month later, peace talks were held in Istanbul, Turkey, between Russia and Ukraine, and it looked like the war would be quickly settled. Then Washington and its London satellite told Kiev to reject the deal. The war was on for real.
Overall, Ukraine is a weaker nation than Russia. On its own, Ukraine could not dream of attacking Russia. Then again, how could the long dispersed and persecuted Jews of Europe ever dream of attacking the Arab nation? The answer: on their own, they couldn’t.
Under the leadership of Zionists joined to world imperialism, first British, then U.S., Zionist Jews transformed into Israelis who could and did. The result is genocide. Euromaidan Ukraine could and did attack Russia not as a legitimate representative of the Ukrainian people any more than Zionists are the legitimate representative of the Jewish people, but as representatives of U.S.-NATO imperialism.
The Russian nation, facing destruction at the hands of the “collective West,” has been forced to fight back in self-defense, though under more favorable conditions than the Arab people of Palestine and the Levant.
The only solution
Putin is not fighting a revolutionary war in Ukraine. Capitalist property relations will prevail in Donbass and the other territories being fought over, whether U.S.-NATO imperialism or capitalist Russia prevails.
This doesn’t mean that the working class has no stake in this tragic war. A victory for U.S.-NATO would strengthen the chief enemy of the global working class and all oppressed nations.
This is why people of the Global South support Russia. In the event of victory, U.S.-NATO will feast on the raw materials and the rich agricultural lands of Ukraine. The Russian people would be demoralized like they haven’t been since the 1990s, and the chances of Russia breaking up will be increased. If this occurs, U.S.-NATO imperialism will be strengthened for decades to come.
The Ukrainian people would gain nothing from a U.S.-NATO victory. If Ukraine becomes a neocolony of the West, its natural wealth will be pumped out with a few crumbs for its native capitalists and some hangers-on.
Even from the view of genuine patriots, a Ukrainian “victory” would be a disaster. Increasingly, the Ukrainian people are realizing it. Videos smuggled in from Ukraine show Euromaidan thugs kidnapping young people (and the not so young, as the draft age has been raised to 60) off the streets and sending them to the front with minimal training.
The working people of Ukraine have no interest in maintaining the Kiev regime that acts as an agent of Washington’s rule. Nor do they have any interest in allowing the U.S.-NATO world empire’s seizing of Sevastopol that would make it easier for the U.S. and its Israeli agents to wage war against the people of Southwestern Asia, including the people of Palestine.
A Russian military victory over the Euromaidan puppets, though important, will not be enough to solve the relationship between Russia and Ukraine. Only a new proletarian socialist revolution, having learned the lessons of the 1985-91 counterrevolution, will make it possible to restore health between the peoples and working classes of the two countries. Then the people can work out borders and other aspects of the relationship. As long as this does not occur, any deal to end the war will be a temporary truce at best and a prelude to renewed conflict.
Answers to some reader questions
Turning back to economics, Pro Econ asked, “You said that if a technique or discovery that allowed for a truly vast quantity of gold to be produced that gold would be demonetized, this was something that I had thought might be the outcome of say a giant gold meteor being mined (and one does exist, apparently) but I wasn’t sure whether you personally agreed.”
This needs some qualification. Gold has served as a money commodity for thousands of years in part because its value — the quantity of abstract labor socially necessary to produce it — has remained stable relative to the values of other commodities. Because of this, it has been possible for gold to serve as the medium in which money capital is accumulated.
Suppose a method is discovered to make it possible to produce gold cheaply, that is, with less labor. This results in a sudden increase in gold production. The fall in the gold’s value would not be the result of an increase in quantity but of the fall in the amount of labor needed to produce it.
Like all commodities, we have to distinguish between the individual value of a piece of gold and its social value. There is always a chance somebody will find a rich nugget of gold without performing much labor. What counts is not the individual value of the commodity, but the average amount of abstract human labor, its social value, required to produce it. If I were to find a nugget of gold in my backyard, it would have a revolutionary effect on my personal finances, but its overall economic impact would be next to nothing.
A meteor believed to be rich in gold has indeed been discovered in China, but it is deep underground. If it’s possible to mine it at all, it would take a great deal of labor to build the machinery to get to it. As long as it isn’t profitable at current values to mine it, this meteor won’t have any effect on the social value of gold.
It remains theoretically possible that a method will be discovered to produce gold bullion with less labor. What would be its economic effects, assuming whatever caused the value to fall affected only gold production?
First gold production would increase. Its value relative to other commodities would plunge, causing commodity prices calculated in the use value of gold to soar. Capitalist economists would attribute the collapse in gold’s value to the sudden increase in its quantity and not to the fall in the amount of labor socially necessary to produce it relative to other commodities.
Economists and historians attribute the rise in prices during the 16th century to the fall in gold and silver’s value, to the rise in the quantity of gold and silver on the market, and the drop in value to the discovery of rich new mines as a result of Europe’s “discovery” of the Americas.
If the cheapening was great enough, gold’s ability to continue to function as the money commodity would be undermined or even ended. In theory, a new money commodity would emerge, but there would be problems. The biggest, as noted above, is that gold has served as the medium for the accumulation of money since before the beginning of the capitalist mode of production.
If gold were suddenly devalued to the extent that it could no longer serve as money, the money capital that has accumulated since before the beginning of the capitalist mode of production would be wiped out. Since there must be a definite proportion between real capital and money capital, the results would be disastrous for capitalist production.
In theory, a new money commodity would emerge. However, the accumulation of money capital would have to begin again to restore the correct proportions between money and real capital, and this would take a long time.
A limited devaluation of gold, lasting for a short period, followed the discovery of rich mines in California in 1848, in Australia in 1851, or in the mid-1890s in the Klondike, and acted as a powerful stimulant to capitalist production. We shouldn’t forget, however, that the capitalist upsurge that followed the 1848 and 1890s discoveries ended with the crashes of 1873 and 1929-33, respectively, though in the latter case, World War I also played a crucial role.
Our reader also asks, “What if a capitalist government were to read your blog and, with potential gold reserves permitting, run gold mining as state-directed with the intention of producing conditions akin to the post-WWII boom to preserve the health of the global capitalist system?”
First, it would take the action of more than one capitalist government. World gold production would need to be planned by a world capitalist government or authority, while other commodities continue to be produced under the anarchic, profit-driven system of capitalism.
This would create a contradiction. We would have gold, the money commodity, produced according to a plan, while in other production sectors, capitalist anarchy would rule. I don’t believe that would work.
What this comes down to is that gold would be produced according to a common plan and would no longer be a commodity, while all other goods would be produced as commodities. Before a given use value, such as gold, can function as money, it must first be a commodity.
We must remember that the money relationship of production is not necessarily represented by gold, but rather gold is the commodity that, up to now, has best been able to function as money. If governments could abolish the commodity nature of gold, they would effectively demonetize it, and among other things, would wipe out all the world’s accumulated money capital.
The problem is that the need for the money relationship in production arises from the fact that, under private ownership of the means of production, the labor embodied in commodities is not immediately social. Society’s total labor is split into many separate, private labors whose social character is recognized only indirectly — through exchange.
To address recurring shortfalls in demand, capitalist overproduction, commodity production must be abolished. By replacing the commodity form — where labor is only indirectly social — with planned production — where labor is directly social — we have abolished the money relation in production.
Our reader asks, “Since the policy of the imperialists since 2008 has been ‘the rich can never be allowed to lose, ever’ I don’t see any signs of cleaning the gunk of fictitious capital and asset price over inflation happening and it does appear like the system will crack, likely from bad news in finance and everything will come tumbling down regardless but with the added issue that the tool kit for recovering the economy through central bank policy and bailouts is truly exhausted.”
I would add that it is not so much too much fictitious capital but too much real capital (relative to money capital) and the fact that it is not only prices of corporate stocks, land, not to speak of so-called cryptocurrencies, that are grossly overinflated, but very likely the market prices of real commodities measured in gold terms that are overinflated.
Unimproved land and cryptocurrency are not true commodities, but only, in the case of cryptocurrency, artificial factors or rent factors. When the prices of true commodities rise above their values (or production prices), the result is a depression of the production of the commodity that serves as money material, that, in terms of its own use value measured in the value and the surplus value embodied in commodities. This, as explained throughout this blog, depresses the production of money material and eventually makes it impossible to fully realize the value and surplus value of commodities embodied in them.
Our reader goes on to observe, “I was struck by Kliman’s contention that not enough capital was destroyed in ‘08 to clear the stage for a renewed boom and in 2020, this was even more the case.”
That’s a shrewd observation. In the fall of 2008, the Federal Reserve created a vast quantity of dollars that stopped the crisis before it could do all its hellish “work” of liquidating overproduced commodity capital (unsold inventories) and overproduced real capital (fixed capital like factory buildings and factory machinery). The price they paid was that the recovery that followed was unusually weak. When the 2020 COVID shutdowns occurred, the sudden cessation of production had the effect of running down inventories, though the shutdowns didn’t have much effect on the accumulation of fixed capital because they didn’t last long enough.
Once the shutdowns were lifted (under pressure from the capitalists), there was a boom. In the U.S., nothing like this boom has occurred for decades as businesses scrambled to rebuild their inventories (commodity capital) as well as their staffs (variable capital). The result was a rise in interest rates that soon caused the boom to taper off in the course of 2022 back into the kind of quasi-stagnation that has been typical of the post-2008 period.
Our reader asks, “Maybe a new Great Depression, if capitalism survives it, will be the end of economic doldrums that appear to have plagued the economy since ‘08 and will set the stage for an even greater boom.”
It is certainly possible that sometime in the years ahead, not only the U.S. but the entire world capitalist economy will experience a thoroughgoing crash that will lead to a new Great Depression worse than the 1930s, and capitalism might even survive it. This is theoretically possible.
Capitalism will not transform itself automatically into a communist society. It is certainly possible that the result of this future Depression, as in the 1930s, will be a boom, perhaps the greatest ever seen. If we assume such a Depression will lead to massive class struggles ending in fascist dictatorship and eventually war, and if, in addition, the capitalists continue to rely on fossil fuels for energy (Trump’s avowed program), would our civilization even survive another such Depression-boom cycle?
This brings us to the main point. Our task is to build the workers’ movement and its most important component, its communist party, to make sure that capitalism does not survive a new Great Depression or the many other types of crises now brewing.
Reader Boi98 Dtempo asks, “Gold prices is all time high and the yield curve has been inverted for its longest time. Yet no recession in the horizon yet. Why is that? I have been watching this bourgeois economist channel, and one of his thesis is that the economy did not crashed yet because abnormal activity in truck sales”.
I doubt that truck sales, representing only one branch of commodity production, are responsible. Nor is the current situation unprecedented. Whether it is really true that no recession is in sight is debatable. In 1966, the Federal Reserve restricted the rate of growth of the dollars it was creating. The yield curve, the relationship between long- and short-term interest rates, inverted. Normally, long-term interest rates are higher than short-term interest rates.
When capitalists give up immediate access to money for a long time, they demand higher interest rates than when they give up immediate access to money for a shorter time. When money “suddenly becomes tight,” as occurs immediately before a recession, there is a scramble for short-term access to money. The result is that the short-term interest rates rise above long-term rates, or, in the language of the market, the yield curve becomes inverted.
To return to 1966, the Fed dramatically reversed its policies and eased, causing the yield curve to become un-inverted, and there was only a mini-recession in the first quarter of 1967. The economists of those days declared that a “recession had been averted,” as so many claim now. Taking a long view, the inverted yield curve of 1966 was followed not by a normal recession that would last a year or so, but by the stagflation of the 1970s and early 1980s, when weak and increasingly inflationary recoveries alternated every few years with deep recessions. This finally ended in the double-digit unemployment of 1982.
Today, by pumping in newly created dollars at the last minute, the Fed has so far avoided recession, though overall growth remains low in the U.S. and Europe, with no growth in overall industrial production for a prolonged period. Even the official unemployment figures have been creeping up.
As the record-high dollar gold prices show, this has not resolved capitalism’s overproduction problems. Instead, the demand for gold has been increasing, and along with tariffs, this has led to increased inflation, thus forcing the Federal Reserve to halt its planned rate cuts.
As of September 2025, the Fed is attempting to renew the interest rate cutting cycle with a 0.25% cut in the target for fed funds, but with the dollar gold price at or near all-time highs. This is a dangerous move unless a deep recession arrives soon. If it does, the Fed can safely proceed with its rate-cutting cycle. However, if a recession doesn’t arrive soon, the risk of a repeat of the stagflation of the 1970s, with even more disastrous consequences, will be great.
We must account for the contradictory effects of Trump’s trade war on the economy and the resulting impacts on the current situation. For example, if you run a retail business and expect your costs to soar due to the tariffs, you’ll increase your commodity orders to beat the expected price increases when you might otherwise keep your order the same or maybe reduce it. This can have all kinds of effects on economic statistics, making them more difficult to interpret.
We also have to account for the effects of the attacks on federal workers that, until recently, were carried out by the richest capitalist in the world, Elon Musk. Big revisions in the employment numbers [see last month’s post] indicate government figures are becoming ever less reliable and will continue to do so unless Trump’s attacks on government workers are halted and reversed. It may turn out that a recession has actually been in progress for some time.
(1) Marxists recognize the inevitability of violence in the struggle against capitalism. This is not because we like it, but because capitalists and their die-hard supporters inevitably resort to it in their struggle to maintain the outmoded system. We only have to look to Gaza for an extreme example. In Gaza, the existence of capitalism is not even being directly challenged. The Palestinian people’s basic demand is to be allowed to live in their own country. But that is too much for U.S.-led world imperialism to accept, and as a result, the people are being subjected to violence designed to drive them out of their country under pain of physical extermination.
Of course, it’s not only in Palestine. At the moment, while capitalist violence is worse there than elsewhere, it exists almost everywhere. To end the reign of violence imposed by our class enemies, to quote Malcolm X, we must “use every means necessary.” Individual acts such as Charlie Kirk’s assassination are not effective in the struggle against capitalist terror. This is true whether it is the verbal terror practiced by the late Mr. Kirk, or the terror of missiles, guns, bombs, drones, etc., practiced by many other servants of capital by the U.S.-NATO military machine. (back)
(2) Ironically, it was the Republican Party that pushed for the 22nd Amendment to the Constitution, limiting the president to two terms. The amendment was passed in reaction to Franklin Roosevelt’s election to four terms (though he served less than two months of his last one due to his death in April 1945). (back)
(3) In late 19th-century Russia, Czarist rule was becoming intolerable to Russian society, which was then in transition from feudalism to capitalism. The movement of the Narodniks, populists, emerged, made up of intellectuals who were isolated from the main classes of Russian society, and they took the road of individual terror. Among them was Lenin’s older brother Aleksandr Ulyanov.
Ulyanov was a leader of the populist People’s Will party. He was hanged for his role in the attempt to assassinate Czar Alexander III. The successors of People’s Will developed into the Social Revolutionary Party, which continued to use terrorist tactics in its struggle against Czarism. When the Russian Revolution occurred, the Social Revolutionary Party played a purely liberal role. The Russian party of revolutionary terrorists ended up as what we call today, in the U.S. sense, a liberal party.
Despite Trump’s claims otherwise, the majority of U.S. liberals reject individual terror. It is true that the Russian party of individual terror ended up as a liberal one, while the Marxist party that rejected it ended up leading the October Revolution. (back)
(4) Strictly speaking, the dollar or currency price of gold is an incorrect term because price is the rate of exchange between a given quantity of the use value of a commodity measured in units appropriate to that use value and the use values of the money commodity measured in the use value appropriate to that use value of the money commodity. I use terms like ‘currency’ or ‘dollar price of gold’ as a concession to common usage. (back)
A Critique of Crisis Theory 