Newsletter #26: Life Under Inflation and Price Chaos, with Rupert Russell and Isabella Weber
The Dig is releasing Newsletters #25 and #26 in reverse order.
By Michal Schatz
Russia’s invasion of Ukraine was accompanied by a new wave of articles predicting the retreat of globalization. Such articles have circulated periodically since the beginning of the pandemic, but Russia’s barbarous invasion was an acute reminder that our financialized global supply system has the structural integrity of a house of cards.
Prices have surged since February, fueled not only by the uncertainty and trade disruptions associated with the war alongside retaliatory sanctions against Russia, but also by COVID-related lockdowns in China. Among the many excellent aspects of this week’s interview with Rupert Russell and Isabella Weber is its focus not only on the immediate crisis, but on providing a long view of price chaos — its mechanisms and global impact over the last decades, and what might lie ahead.
Inflation and price chaos may be problems to which developed countries have not fallen victim in several decades, but Global South countries like Venezuela and Tunisia have become accustomed to their devastation throughout the twenty-first century. The Arab Spring was not, as Western media narrated, a revolution against tyranny, but a response to skyrocketing bread prices — a peripheral casualty of finance bros’ hubristic bets in the core. Now that price surging has come home, richer countries like the US want to insulate themselves from such shocks by reshoring production.
Listening to this week’s interview, I was reminded of Achal Prabhala’s observation in his discussion with Astra Taylor about the rise of a new form of ultranationalism. Most discussions of nationalism’s resurgence have focused on its political and rhetorical content, but its economic manifestations have inflicted some of the harshest blows, as COVID vaccine apartheid lays bare. The International Monetary Fund recently released a report warning that a manufacturing retreat may in fact leave countries more vulnerable to trade volatility. As Biden made clear in his State of the Union speech, however, the push to deglobalize is not merely a response to the current inflation crisis, but a crucial part of a mounting trade war with China. While these economic powers vie for supremacy, what happens to developing countries who abandoned their diversified domestic economies for international commodity production?
There’s no retreating back into Pandora’s box — deglobalization will not spell the end of neoliberalism. The logic that has structured our global trade system for a generation will not wither away, but adapt itself to these new conditions, as we have seen it do so many times before.
These trade realignments spell out the conditions under which we must combat the climate crisis. An ecofascist response to the climate crisis is not a distant specter lying in future’s wait — the time is now. The Left cannot fight national capitalism with national socialism, but must re-envision the platforms that underpinned its resurgence to local and national electoral politics as part of a global project in solidarity with working people beyond US borders. Earlier this week, Olúfẹmi O. Táíwò and Patrick Bigger published a report with the Climate and Community Project calling for climate reparations for the Global South through debt restructuring and cancellation. Internationalist proposals like Táíwò’s and Bigger’s are a good model for the types of policies the Left will need to adopt in order to advocate for a just climate transition, not only at home, but internationally.
Further Reading If you want a more in-depth overview of price chaos and the financial crises of the last few decades, Rupert Russell’s book Price Wars is an ideal place to start. Check out Isabella Weber’s book, How China Escaped Shock Therapy to learn more about China’s economic development and marketization, as well as her first Dig interview. Aris Komporozos-Athanasiou explores how the speculation that dominates financial markets has filtered into our political structures and behavior in his book Speculative Communities.
There is no shortage of insightful writing on the supply change, climate crisis, and the Global South. Jayati Ghosh has warned that rich countries may exacerbate food crises in the Global South by limiting supply. Leonce Ndikumana and James Boyce’s recently published book On the Trail of Capital Flight from Africa traces how a network of individuals and institutions has enabled capital to leak out of African countries. Olúfẹmi O. Táíwò makes the case for climate reparations to Global South countries in his new book, Reconsidering Reparations.