- by Daniel Fisher
- The Guardian
- Issue #2182
Fremantle, 2023.
When the war in the Ukraine began in 2022 a wave of inflation swept across the world as international energy and raw materials prices rose and international trade was disrupted by both the direct effects of the war, and sanctions imposed by the west in a misguided effort to strangle Russia. In Australia the inflation spike coalesced into the ‘cost of living’ crisis where prices of all necessities rose while wages remained stagnant, becoming a dominant feature in Australia’s national politics.
The bourgeois efforts to contain inflation through central bank interest rate rises, admitted as being a blunt tool, blames inflation on Australian workers for spending too much. The solution to this problem is to take money away from the Australian people by making debt, particularly mortgages, more expensive and by increasing unemployment. Interest rate hikes during the ‘cost-of-living crisis’ sought to make the Australian people foot the bill for the years of COVID and a global commodities and energy price shock produced by imperial intrigues and struggles. Why should workers pay for a crisis that they have not caused, and whose pain does little to resolve the root cause of the crisis?
With the commencement of the imperialist war against Iran, the spectre of another far larger shock in energy and commodity prices looms. Trump’s USA has been cynically beguiled by the genocidal Zionist regime in Israel with false promises of an easy victory and a reshaped Middle East that has crushed all credible resistance movements to imperial exploitation. In doing so he has not only fulfilled one of Zionism’s most hungered for outcomes of the joint destruction of Iran by American military might. He has entered into a no-limits war of survival with an enemy that both anticipated and planned for this possibility, and which is determined to draw as much blood as possible. No matter one’s views on the system that came to power in Iran in 1979, only the Iranian people have the right to change their government and system. War from outside can only ruin and destroy the people and legitimise the existing system in its resistance to national ruin.
Iran, under crippling sanctions for decades, cannot directly match US military power nor can it take the fight back to the US homeland. Instead, it has prepared for an asymmetric response that targets the vulnerabilities of its enemies. It aims to impose crippling costs on its enemies for launching the war. With the relatively cheap drone and missile bombing of economic and military infrastructure owned by the US, and by closing of the strait of Hormuz in the Persian Gulf – a narrow waterway where most oil produced in the middle east must pass through, Iran is fighting back against the US by attacking the global economy. Already oil and gas prices are spiking in international markets as it has become clear that Trump and his minions have no plan for the war and are unlikely to easily succeed in their efforts to induce regime change. A long, costly and protracted regional war that spreads further, draws in major powers, and consumes life and wealth is becoming established.
Australia, and workers within Australia are highly exposed to the consequences of this growing imperialist war. The scale of the price shock from this war will be far larger than the Ukraine war due to the material destruction and halting of the flow of vast quantities of critical energy resources from the middle east. Australia imports almost all fuels used in the transport and movements of commodities from supermarket groceries to mineral exports and core industrial inputs. Australia remains dependent upon a ‘just in time’ logistics system – exposed during COVID – that is vulnerable to shocks and disruptions. Australian governments have neglected to build or develop sovereign reserves for decades. Private companies are subsidised to export almost all of Australia’s prodigious gas production. The cost of production of all commodities will increase both domestically and internationally with rises in energy prices. The costs in the movement of these commodities will rise with fuel costs.
The costs of almost all items on supermarket shelves will rise. Central banks internationally and within Australia will once again seek to make workers pay for this crisis by making debt more expensive and through the loss of their jobs. This will be politely described as raising interest rates to combat inflation.
Trump having damaged the international credibility of the US financial system in his efforts to decree interest rate cuts to the federal reserve is likely to achieve a substantial own goal through lifting international interest rates and making US debt more expensive as a result. These acts of war are bringing US debt and the health of the American financial system into play while its credibility has been eroded and is suspected to be riddled with speculative asset bubbles. Are we primed and set for an international unwinding of the global economy? Can a global economic crisis be averted?
For workers different questions are posed. What does consumer spending have to do with a crisis generated through imperialist war? Why should workers and the oppressed pay for a crisis made by the folly of the rich and powerful? Trump and Netanyahu’s war on the people of Iran really is a war on the wallets of every worker in the world, and war on the living standards and way of life of billions across the world. Imperialism and war is responsible for the growing danger to the lives and living standards of billions.
It will take months for the consequences of recent actions and those being undertaken today and in the coming weeks to become fully apparent. Communists and progressive allies must get ready to position themselves for the struggle that is coming to decide who will pay for the coming crisis. We must be ready with popular solutions that defend people’s lives and livelihoods, and which extricate ourselves from the tangle of imperialist alliances.
The mass movement in solidarity with Palestine could be transformed into a movement against imperialism in all its forms, and for an Australia run by and for its people. National independence and self-reliance, a renewable energy-based economy, and hitting back at the monopolies and corporate power are urgent and necessary tasks. This time we must make it so it is the rich that pay for the crisis.
