THESE ARE CONDITIONS IN WHICH REVOLUTION BECOMES THINKABLE
BEN TARNOFF
4.07.2020
https://communemag.com/these-are-conditions-in-which-revolution-becomes-thinkable/
In a few months, Covid-19 has remade our political horizons entirely.
History moves slowly, then all at once. The coronavirus crisis
has catapulted us into the latter rhythm. The pace of events has
accelerated sharply; the course of events has become impossible to
predict. In retrospect, 2020 may end up being a 1968 or a 1917: a year
of leaps and ruptures, and a dividing line between one era and the
next. How might we characterize the new era? It’s difficult to draw
definitive conclusions about a period that is in the earliest phases
of its formation. Still, even in fast-moving moments, it’s possible
to work up a preliminary sketch. For such a sketch to be useful,
though, it must capture, albeit in rough strokes, the sharpness of
the break and the newness of the situation produced by it. As Stuart
Hall wrote: When a conjuncture unrolls, there is no “going back.”
History shifts gears. The terrain changes. You are in a new moment.
You have to attend, “violently,” with all the “pessimism
of the intellect” at your command, to the “discipline of the
conjuncture.”
A conjuncture is a thing made out of other things—literally, a
“joining together.” So a good way to start when trying to attend
to it is to attend to the various elements that combine to create it.
Ideally, this shouldn’t just be a laundry list of various things
that are happening but also an account of how they fit together, a
theory of the complex, contradictory whole that is generated by their
interaction.
This is difficult work, and it requires a sustained, collective
effort. It’ll take a lot of people thinking and acting together to
make sense of our new terrain. What follows is an early contribution:
a partial inventory of circumstances in the US and a provisional
picture of how they fit together.
The economy is collapsing. Goldman Sachs economists have predicted
an annualized 34 percent decline in GDP in the second quarter of
2020—an implosion with no historical precedent. By comparison, the
worst annual decline on record is 13 percent, which happened in 1932
during the Great Depression. Goldman’s predictions for the rest of
2020 are somewhat rosier: a return to double-digit growth in the third
and fourth quarters, so that GDP falls by 6.2 percent for the full
year on an annual average basis.
These numbers may ultimately be too optimistic, however. They take for
granted that lockdowns and social distancing will be relaxed enough
towards the end of the year for something resembling normal life
to resume. By contrast, the economists Warwick McKibbin and Roshen
Fernando suggest, more plausibly, that the economic fallout from the
coronavirus crisis will be worse. They estimate that a pandemic that
lasts a year and kills a million people—well within the range of
current CDC projections, and perhaps too low given the current pace of
infection—would reduce GDP for the year by 8.4 percent.
But a precipitous drop in growth isn’t the only cause for concern.
We may also be facing another financial crisis soon, which would
make the situation considerably more painful. Corporate debt is
particularly vulnerable, partly as a result of how governments handled
the last financial crisis. To combat the 2008 meltdown, central
bankers made money cheap. This in turn encouraged companies to issue
bonds, largely to finance mergers and acquisitions and stock buybacks.
Since most of these companies aren’t sitting on huge cash piles,
even minor disruptions may make it impossible for them to service
their debt. Given the immense volume of this debt—the global value
of non-financial corporate bonds reached $13.5 trillion at the end of
2019—a crunch could easily sink the financial system, freezing up
credit markets and leading to a wave of bankruptcies among employers.
It’s little comfort, then, that investors have been fleeing
assets of all kinds in recent weeks: not just corporate bonds, but
historical safe havens like gold and Treasury bonds. The Fed has
acted aggressively, using tools similar to the ones it deployed in
2008: slashing interest rates and buying up various financial assets,
including corporate bonds. Still, the ambivalent response of markets
to these moves suggests they may not be enough. Stocks rallied in
anticipation of the $2.2 trillion stimulus bill, and continued their
gains after the bill passed. But there is little doubt that more
upheaval lies ahead.
If the swiftness of the economic contraction inflicted by the pandemic
is one feature that distinguishes our present crisis from previous
ones, another is the particular segment of the economy that will
suffer the most from that contraction: services. Services usually
don’t take the worst hit during recessions. That’s because they
can’t be stored, so they have to be consumed right awa
