The industrial production and the stock exchange of the financial market have collapsed at the beginning of March in the whole world. The trigger, according to the worldwide press monopoly, is the coronavirus expansion. However, it is actually the crisis of relative overproduction of capital.
The coronavirus itself could not cause such an impact in the world economy. The reason of stoppage of the capital reproduction is the capital itself. The portal Crítica da Economia, quoting a newspaper of the reaction, has observed that the coronavirus nowadays is less lethal than the flu: “Internal data of the World Health Organization (WHO) show that, in 2020, the simple seasonal flu has already caused more casualties (76.537 deaths) than the new coronavirus (2.812 deaths); that is, our well-known and familiar flu has already killed 2.720% more people than the misterious new coronavirus”.
Tha main target of the pandemia and by the overproduction is the Chinese social-imperialism. Many regions of the country are under quarantine and some industries, according to news from the worldwide media, have closed completely their activities. The production stoppage impairs consequently the business orders and household consumption, bringing about drop in prices and damage to the Chinese capitalists and others. Nevertheless, even before the pandemia, in the second quarter of 2019, the Chinese economy had already the slower pace in nearly three decades. It proves that the virus is not the cause of the crisis, it only aggravates it. The causer is the capital itself.
The production stoppage in China is a factor of impact. To have an idea, the Chinese export of intermediate goods for eletronics ( for instance, microwaves parts and an infinity of other goods) correspond to more than 10% of the global production of such a sector.
The smartphones production must drop at least 12% in the first quarter of 2020 in comparison to the same period in 2019, according to report of Trendforce, an analyst firm. This will be the worst production outcome in the industry.
Other similar industries as the production of notebooks, monitors, televisions, etc.,will also suffer decrease in the production of million unities.
Imperialism brings about chaos and disorder
International large monopolies have already issued risk warnings on the weakness of the profit situation. Apple, for instance, affirmed that will not reach the goal of revenues laid out for the first quarter of the year and granted it to the coronavirus.
Mastercard, United Airlines, Toyota, Danone and other monopolies did similar statements.
Petrobras, in Brasil, affirmed it will have difficulties in the first quarter of the year due to the international falling prices of the oil because of the competition between Russia and Saudi Arabia and the decrease of the industrial demand.
On March 12th only Petrobras’ shares fell 19,1%.
The industries in Brasil as the LG factory, Tatuapé, SP, and Samsung and Motorola, Campinas, SP, had a production downtime in eletronic parts coming from China as chips, integrated circuits and others.
According to Abinee ( Brazilian Association of Electric and Electronic Industry), half the enterprises reported problems to receive the industrial raw materials and components from the Chinese social imperialism.
Other local monopolies have already envisaged the crisis. Gol, for instance, had a fall of 29,3% in the Bonespa shares (B3). Latam, in turn, reduced 30% the movement of aircrafts because of the low demand.
Bolsonaro and generals’ government has been discussing a “rescue packet” with a generous tax exemption while ignoring that the people’s masses have been subjected to the worsening in the life conditions.
The international price of important commodities for the Brazilian bureaucratic capitalism is also going into free fall. Soybeams, that represent more than 30% of exports to China, is a merchandise with sharp decline as well as iron ore ( 21% of the export).
The occurrence of the coronavirus is just a fact that aggravates the economy. However, behind this fact there is already a relative overproduction of the latent capital.
The crisis of overproduction of relative capital occurs when the capital production extrapolates the consumption capacity of the society defined, ultimately, by the contradiction between the social character of production and the capitalist appropriation of the product.
To get an idea of it, the unemployment rate in the USA reached, on October, 2019, a low record of 3,5%. It amounts practically to “full employment”. It was the lowest rate for the last 50 years, resulting of the interest rate that propels the credit for the production. However, in October, the creation of new workstations in the industry has decreased for the first time in six months, although the productin has increased 1,1% in November. It is a huge increase of the global production that grows disproportionately to the addition of the capacity of worldwide consumption. The overproduction crisis is the inevitable consequence. Proof of this is that all Yankee economists foresee that the economy will slow down in the short run, i. e., it will not find markets to continue the expansion.
The New York Stock Exchange on March 12th had a strong fall of 8,4%.
But this does not constitute a trend only in the USA. In Japan, specifically, the GNP fell down in 6,3% in the October/November, 2019. Germany, one of the most powerful economies, collapsed in 7% of its industrial producation last year ( before coronavirus) The economy real fall determines the Stock Exchange fall.
As an echo, on March 12th , important Markets in the world (London, Paris, Frankfurt) had violent falls: 10,8%, 12,28% and 12,24%, respectively.
The B3, in Brasil, lost 14,4% in only one day. In a little more than a month, comparing the period between the historic maximum and March 12th, the fall is of 40%, much worse than the 2008 crisis.
For the people, the crisis will provide massive unemployment, a sharp fall in the wages, exploitative working hours and other evils. This will boost the large masses to struggle and can open a radicalization period of class struggle, spontaneous and conscious.