The following article was originally published as part of the June-July 2022 issue of uManyano lwaBasebenzi.
We are in a situation of record-high rates of inflation worldwide. The same money in the pockets of people this year is buying much less than last year. Many countries are experiencing their worst inflation in decades. This is especially devastating for the working class as prices outpace the increase in wages.
The Covid pandemic is among the causes of this unusually high inflation. Despite attempts to adapt to a “new normal” there have been lasting shocks throughout the global economy as supply of products cannot keep up with demand. Meanwhile, the effects of climate change and the United States’ emerging Cold War with China are adding even more pressure to the rising cost of living worldwide.
Putin’s invasion of Ukraine, in particular, has resulted in further disruptions to exports. Sanctions on Russia have pushed up prices for essential components to the world’s food supply, especially grain, cooking oil, and fertilizer. Crude oil exports from Russia have also been severely cut.
Although South Africa has already suffered from high inflation over the past decade, the supply shortages and price hikes will only serve to make things worse. The 5,9% inflation rate recorded in March had not been seen since 2017. Crude oil exports from Russia have declined by 20% as a result of sanctions leading to elevated prices globally and resulting in higher fuel prices for motorists in South Africa. Since June’s increase, people are paying almost 40% more at the pump than a year ago and estimates suggest that petrol might go up to R40/litre by 2024. Bus and taxi fares will also increase, negatively affecting the struggling working class.
The increased costs of transporting goods also add to the final prices people pay at the shops, which are already elevated because of the war in Ukraine. In recent months there has been a 50% increase in sunflower oil – not only an essential product for the home, but a key ingredient in several staple foods. Retailers already limit the amount of cooking oil that shoppers can purchase in anticipation of further shortages.
Higher prices not only mean extra burden on the working class, but also increased profits for companies selling the pricier goods and services. This is on top of the very profitable pandemic for the billionaire class while real wages have remained stagnant or declined.
The ruling class failed to mitigate the devastating effects of the pandemic, they continue to conduct meaningless wars, and their exploitation of the environment is making the planet less livable. Meanwhile, the complex supply chain established to exploit cheap labor and offload surplus production cannot weather these capitalist-caused shocks. In fact, the “solutions” of the ruling class often make things worse. The South African reserve bank, the tool of the bosses to combat these economic crises, is trying to address this inflation by increasing the costs of borrowing money. This will further dampen economic activity, rationalising further job losses by the bosses and adding to the already skyrocketing 45.5% unemployment.
We can’t fix the symptoms of capitalism with more capitalism. We must fight for a socialist system which will guarantee working class control of the productive forces of society. This starts with workers organizing to fight for living wages to counter the increased cost of living, but it must go further to implement lasting, effective change. Large-scale agriculture must be put under democratic worker and community ownership in order to ensure a food-secure future. We must additionally fight for affordable public transport systems that run on reliable renewable energy grids independent of fossil fuels. We must oppose these pointless wars and all imperialist ambitions. We must fight for a socialist world with a democratically-planned economy that puts the needs of the people before the greed of the bosses. This requires building a revolutionary, socialist alternative that will lead us there.
