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World Economic Forum’s global risk report: A devastating picture of the capitalist crisis

Down through the years, the ideologists of the ruling classes have repeatedly accused Marxists of exaggeration and even “catastrophitis,” as they drew out the deepening contradictions of capitalism, which threaten the very future of civilisation.

Those who agree with such assessments, endlessly regurgitated through media and academic outlets, would do well to examine the “Global Risks Report 2023” of the World Economic Forum (WEF) prepared for the annual gathering that is taking place this week in Davos, Switzerland.

The report paints a devastating picture of a socioeconomic system hurtling towards disaster, outside of the control of the ruling elites for which the WEF speaks.

Former US Secretary of State Henry Kissinger appears on screen during the annual meeting of the World Economic Forum in Davos, Switzerland, Tuesday, January 17. [AP Photo/Markus Schreiber]

The executive summary begins by noting that the first years of the present decade “have heralded a particularly disruptive period in human history.”

Then follows a paragraph worth quoting in full:

As 2023 begins, the world is facing a set of risks that feel both wholly new and eerily familiar. We have seen the return of “older risks”—inflation, cost-of-living crises, trade wars, capital outflow from emerging markets, widespread social unrest, geopolitical confrontation and the spectre of nuclear warfare—which few of this generation’s business leaders and public policy-makers have experienced. These are being amplified by comparatively new developments in the global risks landscape, including unsustainable levels of debt, a new era of low growth, low global investment and de-globalisation, a decline in human development after decades of progress, rapid and unconstrained development of dual-use (civilian and military) technologies, and the growing pressure of climate change impacts and ambitions in an ever-shrinking window for a transition to a 1.5C world. Together, these are converging to shape a unique and uncertain and turbulent decade to come.

The Marxist analysis of the present situation is presented in the New Year’s Perspective of the World Socialist Web Site (2023: The global capitalist crisis and the growing offensive of the international working class), which notes that the accumulating pressures of the world capitalist crisis have “attained the equivalent of critical mass: that is, they have reached the point where the dynamic of crisis has passed beyond the ability of governments to control the movement toward a social cataclysm.”

Everything in the Global Risks Report confirms, in its own way, the veracity of this analysis, which is probably why the WEF document has received little or no coverage in the so-called mainstream media.

The report traces out a series of deepening crises, including the ever-worsening economic outlook, the intensification of geopolitical conflicts and tensions that are not confined to Ukraine, but extend far more broadly, the rapid deterioration of health and health care, and the effects of climate change, both in terms of the weather and the decline in biodiversity.

One of the most significant shifts in 2022 was the ending of the ultra-low interest rate regime initiated in response to the global financial crisis in 2008 and extended after the financial crisis of March 2020, at the start of the COVID-19 pandemic.

The monetary tightening implemented by the Fed and other major central banks to suppress the global wages upsurge by the working class is driving the world economy into recession.

But according to the WEF report:

Even if some economies experience a softer-than-expected landing, the end of the low-interest rate era will have significant ramifications for governments, businesses and individuals. The knock-on effects will be felt most acutely by the most vulnerable parts of society and already-fragile states, contributing to rising poverty, hunger, violent protests, political instability and even state collapse. … Governments will continue to face a dangerous balancing act between protecting a broad swathe of their citizens from an elongated cost-of-living crisis without embedding inflation—and meeting debt and servicing costs as revenues come under pressure from an economic downturn, an increasingly urgent transition to new energy systems, and a less stable geopolitical environment.

The report warns that social unrest and political instability will not be confined to emerging markets, as economic pressures hit the middle-income bracket:

Mounting citizen frustration at losses in human development and declining social mobility, together with a widening gap in values and equality, are posing existential challenges to political systems around the world.

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