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World Perspectives 2013

posted 22 Jan 2013, 14:18 by Admin uk   [ updated 7 Feb 2013, 11:18 ]
Discussion Document      
Trotsky often advised his comrades to ask, “Through what stage are we passing?” This is the basis of this analysis of perspectives. At the present time it is an important and a difficult task.           
              
First, and most obviously, we have seen the most serious, deepest and longest crisis of capitalism since the Second World War. This ushers in a new period. The prolonged austerity being imposed on workers all over the world has generated enormous anger. They can see that the economic system is failing them. But the vast majority as yet have no conception of an alternative. That hampers their struggle.

The crisis is bound to cause a profound questioning about the nature of the system that we live under among the mass of the population. And it is doing so, even if we have not seen the consequences burst out into the open everywhere so far. Ultimately conditions determine consciousness. This is a fundamental proposition of Marxism. It is the bedrock of this document and of Marxist analysis generally. The changing conditions of life under capitalism are bound to produce a revolution in workers’ consciousness over time.

In the recent past working class people, at least in the advanced capitalist countries, have become accustomed to see their living standards rise steadily year after year. The age of rising living standards seems to have gone for ever, and workers increasingly realise that this is the case. They are determined to fight to defend their living standards, just to defend the gains they have made in the past – gains that are in the process of being snatched away.

Consciousness is definitely in the process of change, but its development is uneven and slow. It is easy to forget the extent to which the labour movement was thrown back both in its strength and consciousness by a series of defeats in the previous cycle of struggle that came to an end in most countries in the 1980s.

The radicalisation that we confidently expect has been long in developing so far. Through the gloom we now see the first lightning flashes of the coming storm. South Africa, Egypt and Greece are in the forefront of the class struggle so far. But they are only the advance guard of a tidal wave of anger and militancy that is developing below the surface. The general strikes against austerity, most recently a concerted general strike across much of Europe in November 2012,  and the global ‘Occupy’ movement of the youth are indications of the general anti-capitalist mood that is about to erupt.

World economy

The Great Recession, as it is now called, began in 2008. The vast frauds, massively overextended debt and crazy speculation of the preceding boom all made the downturn spectacularly severe and long lasting. The underlying cause of the crisis though was a fall in profits, not just in the rate but also the mass of profits. Capitalism is a system that runs on profit. 

In the third quarter of 2006 the US mass of profits peaked, according to the Bureau of Economic Analysis. Profits more than halved by the final quarter of 2008. This would have caused a massive crisis anyway even without the debt, swindling and speculation of the preceding boom. The fundamental reason for this fall in profits was the tendency for the rate of profit to fall. Marx explained that this happens because of the increasing cost of the accumulation of constant capital (machinery etc.) relative to the outlay on wages which is necessary to exploit the workers. But it is only the living labour of the working class that yields surplus value.

Since 2009 the mass of profits has revived in the main industrial economies, though the rate of profit remains below the level of 2007. There has been no upsurge of investment which would lead to a soundly based boom. As Marx explained, the destruction of capital in a slump is an inevitable process which prepares the conditions for an eventual revival in the rate of profit. An enormous mass of fictitious capital (paper claims on the unpaid labour of the working class) was built up in the preceding boom. A destruction of this fictitious capital in particular is required before the system can go forward. This will mean more bankruptcies and more pain for the working class. Capital and fictitious capital have not yet been destroyed in sufficient quantities to prepare the conditions for a healthy upswing. 

In 2009 two academic economists, Reinhart and Rogoff, wrote a book called ‘This time is different.’ The title is an ironic reference to the euphoric phase of an upswing where the speculators assure each other that this time the boom will not turn to bust – just before it does. The book examines hundreds of crises in the history of capitalism, starting from 1340. It separates the normal downswings which are an eternal feature of capitalism, from what it calls ‘Great Depression crises’. 

The parallels of the present Great Recession with the Great Depression of the 1930s are obvious. The crash that began in 1929 was no normal downturn. It caused permanent damage to the capitalist system. As a result recovery was fragile and slow. The economy was permanently knocked on to a lower and slower flight path, at least until the ‘healing’ effect of the outbreak of the Second World War upon the US economy ushered in a new era.
The same is true of the Great Recession.  It is clear that we are in another ‘Great Depression crisis’, to use Reinhart and Rogoff’s terminology. So an era of austerity opens up before us. Of course there will be economic upturns. These will offer favourable opportunities for the working class to regroup and fight their corner. But the heady years of the past featuring almost permanent growth, with short shallow downturns, has gone for good.

Inflation or deflation?

In the past Marxists have discussed the future prospects for the world economy – will there be inflation or deflation? The answer has become clearer now. Deflation is likely to be the dominant trend globally. After 1990, when the Japanese speculative property bubble burst, the country suffered twenty years of low growth, two lost decades and the end to the ‘Japanese economic miracle’. The bursting of the speculative property bubble in Japan left a crushing burden of debt, just as we see now. Artificially low interest rates allowed firms to survive, but the debt burden prevented the massive reinvestment that would have returned Japan’s economy to boom. 

Similar deflationary conditions are emerging now on a significant scale worldwide, for the first time since the Great Depression of 1929-33. In the advanced capitalist countries financial journalists have coined the expression ‘vampire’ companies. These firms live in a half life kept afloat by bank loans at very low interest rates. These low rates of interest in turn are made possible by the policy of quantitative easing (printing money) pursued by the Bank of England and the American Federal Reserve. Though these vampire firms are kept artificially alive, they are not growing and accumulating, just surviving – waiting for better times that may never come. 

Contrary to some predictions, quantitative easing has not caused an explosion of inflation. Instead it has allowed capitalist concerns to pay the (low) interest on their massive loans, but not to carry out new investments. This is deflation in action.

This is not to say that inflation has disappeared. The awful harvests of 2012, together with the odious activities of the speculators, have made another food price spike in 2013 very likely. The previous sharp rise in food prices in 2007 and 2008 was an important background trigger to the Arab spring and other upheavals.   

Economic perspectives

What prospects of growth has the world capitalist economy to offer now? The International Monetary Fund (IMF) predicts that the world economy will grow by about 3.4% in 2012 and by the same amount in 2013. This is a snail’s pace of development, insufficient to significantly reduce the level of mass unemployment. Moreover the process is very uneven. The IMF expects the advanced capitalist countries to grow by only 1.3% in 2012. The overall picture is of recovery, but of a particularly anaemic and slow recovery. The world’s output is still 4% below what it was in 2008.

There is a strong possibility that the Eurozone could turn in negative growth for 2012, with more misery in store for 2013. Japan, the third biggest economy in the world after the USA and China, is also rolling backward at present. A crisis in the Eurozone, or in any other of the flashpoints of the world capitalist economy, could easily plunge the whole world back into recession.

The world’s working class

For the first time in the history of the world there are more working class people than peasants. By workers we mean Marx’s classic definition of those who own no means of production and have no way of earning a living apart from offering themselves for hire to a capitalist for a wage. 

The latest figures we have were compiled by Filmer for the World Bank in 1995. He estimated that there were 880 million workers in the world. Since the ‘South’ has been growing fast for most of the years since then, it is safe to assume that there are now more than one billion workers in the world. Together with their families, they are close to be becoming an outright majority of the globe’s population of 7 billion people. 

This is a historic change which in principle tips the balance of power enormously in favour of socialist revolution. What a transformation compared with the time when Marx and Engels wrote the ‘Communist Manifesto’.  Then industrialisation and the emergence of the modern working class mainly covered a few industrial districts in Britain, while the rest of the world was stuck in the mire of pre-capitalist social formations!

One of the apparent features of the period we have passed through has been an apparent deindustrialisation and shrinking of the traditional working class in the advanced capitalist countries. In fact there has been no deindustrialisation on a world scale. The world produces more manufactured goods than ever before, but these are produced by fewer and fewer workers as the productivity of labour in manufacturing industry continues to develop by leaps and bounds. 

Increasingly these goods are not made in the former heartlands of capitalism. In part this is because of the ever-changing division of labour under capitalism as different regions emerge and decline; in part because of the increasing ability of the big multinationals to split up the production process into tasks that can be shipped out to wherever production costs – in particular wage costs – are cheapest.

Partly this relative decline of the working class in industry in the former heartlands of capitalism is because China is emerging as the greatest manufacturing nation on earth. China, as we explain later, has the advantage over its rivals of not being a capitalist country. The rebalancing of world capitalism that we have seen also means the rebalancing, as well as overall growth, of the world’s working class. The Chinese working class is now the biggest working class on the planet. We can expect important developments from this new, militant working class and also from other countries outside the established centres of the organised labour movement.

What are the conditions faced by the world’s workers? They are determined in large part by the requirements of capitalist production. The continuous increase in productivity means that, though more and more manufactured goods are produced, fewer workers are required to make them. Rather than seeing newly established proletarians being effortlessly drawn into employment, there has been the emergence of what Marx called an industrial reserve army – a huge reserve army worldwide. This became apparent after the end of the great post-War boom and the era of full employment in 1973. There is chronic unemployment in both advanced and less developed countries particularly among the youth. This is not likely to go away.

The conditions faced by workers have been made worse by the offensive conducted under the banner of neoliberalism over recent decades. The employers now have the whip hand, and they know how to use it. In the period of the post-War boom most workers, at least in the advanced capitalist countries, enjoyed stable employment prospects, steady pay and a full range of benefits, such as a pension plan and sick pay. No longer! A big stratum of working class people has emerged whose overarching condition of life at work is insecurity. We give details of this process in the case of South Africa later on.

Many more workers are employed as casual labour and dismissed peremptorily whenever there is no longer profit to be made out of their labour. They have virtually no rights. They are difficult to organise, though when they are drawn into action they can be the best fighters and show real revolutionary zeal in the cause of labour. 

It is inevitable that workers will fight back against the global trend to casualisation. Indonesia has been industrialising rapidly in the wake of the regional boom created by China’s apparently unstoppable growth. Capitalists have outsourced work to sub-contractors, with the aim of creating an insecure working class with no rights. There was an effective national strike against temporary contracts and for an increase in the minimum wage in October 2012.The strikers also raised the openly political demand for universal health care. A giant new working class is beginning to stir.

There also exists a mass of unemployed youth, including graduates, with no future under capitalism. The system has made this a fact of life from Cadiz to Cairo. The older generation has often written off today’s youth as incurably materialistic and apolitical. The youth were brought up in a period of defeats and apathy, and had no inspiring labour movement model to look up to and nurture them. They had to discover the unpleasant nature of modern capitalism for themselves. Now they have shown their mettle. These young people have been in the vanguard of revolt from Tahrir Square to the ‘Occupy’ movement all over the world. 

Capitalism has produced a massive underclass of urban slum dwellers, living on the margins of existence. Sometimes these chronically unemployed or underemployed people are called the ‘precariat’. There is no need for a new definition of this submerged section of the working class. They are the modern instance of Marx’s industrial reserve army. We do need to recognise that the conditions for workers have changed all over the world, and that this is bound to have an effect on their consciousness. 

It is because this urban mass of casually employed and occasional workers live cheek by jowl with more regularly employed proletarians that we often see general movements of the poor, both employed and unemployed together. This has been the pattern from Venezuela to Egypt. These generalised movements of the urban poor have taken place because the leadership of the organised labour movement has been thrown back over the previous period of defeats and has not shown leadership to the rest of the exploited and oppressed. 

Revolutionary-minded youth have been crying out for action against the intolerable conditions they confront. They feel they must do something. They are right. Hence movements like Occupy have popped up all over the world in response to the same basic needs. The organised working class has failed them, so they go ahead anyway. When the labour movement is going forward and has a clear sense of direction, it can show a lead to and draw these other layers behind it.  These layers will strengthen organised labour, develop innovative tactics and strategy and show initiative and courage. They are very welcome additions to our movement.

Capitalism obsolete

The notion of a period of the death agony of capitalism was put forward by Trotsky in 1938 in the ‘Transitional Programme’. Perspectives are always conditional. Trotsky was murdered in 1940, and reformism and Stalinism emerged massively strengthened as a result of the Second World War. 

This required a complete rethink on perspectives as workers after the War, often for the first time, got used to conditions of full employment, steadily rising living standards and, in the advanced capitalist countries, a fully functioning welfare state. This immeasurably strengthened the hand of reformism. It seemed to be delivering the goods. 

Stalinism had advanced in Eastern Europe and China, and established itself as the world’s second super power.  This gave it a new lease of life. Reformism and Stalinism were hegemonic in the international labour movement at the time. They held back the working class and created the political stability essential for the new period of capitalist growth ahead. Trotskyism proved unable to break their stranglehold after the War, partly because of mistakes by the Trotskyists themselves. 

The perspective of the death agony of capitalism was the only reasonable one for Trotsky to put forward in 1938. The world was faced with the prospect of World War and the advance of fascism and Stalinism. The alternative of revolution or counter-revolution seemed to loom before the working class in the next few years. This perspective was all the same falsified by events. 

We are now three quarters of a century on. The period since Trotsky wrote the ‘Transitional Programme’ has not only been interrupted by the greatest boom in the history of capitalism. The decades since the post-War boom of 1948-73, though seeing a return to a more normal course of capitalist development, have shown year on year rates of growth that have put nineteenth century growth rates (in the so-called ‘progressive phase’ of capitalism) to shame.

This is not to argue that capitalism is still progressive. It is now an outmoded system. The Russian Revolution of 1917 gave clear warning that capitalism had outlived its progressive role and must be replaced by a higher form of society. That remains our task.

Nor can we argue that, because the economy has usually grown, capitalism is still developing the productive forces. Trotsky, in his speeches (such as ‘Flood-tide’, delivered to the Communist International in 1921) argued against those who held that capitalism was in its ‘final crisis’. He explained that economic growth was the normal state of affairs under capitalism. Capitalism became outmoded by the early twentieth century not because it ceased to grow, but because it became clear that a superior mode of production could now take its place and outperform it in developing the productive forces, as well as producing for social need rather than profit. 

The Stalinist states

Trotskyists have used the expression ‘workers’ states’ to describe states where capitalism has been overthrown. In some ways this is a misleading usage. Most of these states, for most of their existence, have been bureaucratic dictatorships. The working class has been expropriated from the running of the government. A political counter-revolution has taken place that left the sole gains of the social overturn as the abolition of capitalist property relations. It is in this sense alone that we speak of them as workers’ states.

The workers’ states that came into existence in the wake of the Russian Revolution of 1917 indeed represented a higher mode of production than capitalism. Capitalism, as Lenin said, had broken at its weakest link. In practice the productive forces in the backward countries that made up the post-capitalist camp were far less developed than those of the capitalist countries they were competing with. The continued existence of scarcity meant that socialism remained unachievable so long as these countries remained isolated. As Trotsky explained, a bread queue needs a policeman to supervise it, and the policeman will make sure that he is fed first and best. 

So the Soviet Union underwent a bureaucratic degeneration. The gains in workers’ democracy of the early years of the Russian Revolution were progressively whittled away. Stalin and the bureaucracy usurped political power.  Other Stalinist regimes that came into existence, for instance in Eastern Europe on the back of Red Army victories, never experienced a genuine workers’ revolution. They were bureaucratically deformed from the outset. They were run by dictatorial regimes in the image of Russian Stalinism. 

Both Lenin and Trotsky argued that it was impossible to build socialism in one country. After the Revolution the best that could be accomplished, if it remained isolated, was an economy in suspended transition to socialism, forever threatened by the forces of capitalism on its borders. The collapse of the Soviet bloc after 1989 was a complete confirmation of that perspective.

This contradiction in the workers’ states between the germs of a higher form of society together with terrible backwardness, and later of bureaucratic rule, was one that Lenin and Trotsky were acutely aware of. That was what made the continued existence of the Stalinist states insecure, and eventually led to the downfall of Russia and its European satellite countries. In purely economic terms they were unable to compete with the most advanced capitalist nations on earth.

The workers’ movement

Many of the traditional social democratic parties date back to the foundation of the Second International in 1889. They are the oldest mass workers’ parties in the world. In their early years they were a significant if not dominant force in the foundations of the labour movement and its battle for democracy and reforms. When they were founded they were nominally Marxist parties and included many genuine revolutionaries such as Lenin, Trotsky and Rosa Luxemburg. Over time these parties developed an encrusted reformist bureaucracy. The majority of the leadership supported ‘their own’ capitalist class in the First World War and led the workers into the slaughter. They left behind a minority of socialist internationalists, who held the banner of Marxism aloft.

Stalinism

The social democracy was irretrievably split by the attitude of the leadership to the War and the Russian Revolution, the first successful socialist revolution in the world. At the outset this was a clear break between the forces of reformism and of revolution. For instance the German Independent Social Democrats (a substantial split of anti-War socialists from the Social Democratic Party) and the French Socialist Party went over en bloc to the Communist International to form mass Communist Parties, leaving behind a small residue of careerists. This was also the case with the Bulgarian and Norwegian social democracies. Big splits took place in the Italian and Czechoslovak parties. 

In several countries the communists replaced the social democracy as the mass party of the workers; in others the labour movement was split between social democracy and communism. The schism in the social democracy after 1917 was the only mass split in the history of the workers’ movement internationally. It is evidence that radicalisation of the working class will reflect itself in and proceed through the traditional mass parties.

The Stalinist parties were formed in the wake of the Russian Revolution of 1917. In the beginning these parties composed the revolutionary part of the working class. The communist parties did not remain genuinely revolutionary parties for long, With the bureaucratic degeneration of the Soviet Union under Stalin, the Communist International became over time a  mere instrument of Russian foreign policy. It was still more attractive to revolutionary-minded workers than the social democracy. 

The Trotskyists were isolated and persecuted in the Soviet Union as the bureaucracy strengthened its grip on power. Trotsky tried to rally the revolutionaries around the world against the counter-revolutionary forces of social democracy and Stalinism. His efforts were stillborn. 

The Stalinist parties played a leading and often heroic role in the struggle for national liberation in many countries. The victory of the Chinese Revolution in 1949 gave another boost to the prestige of international Stalinism. The ‘communist’ parties that supported the Soviet Union became a more important part of the labour movement globally than the social democracy. They were already evolving towards becoming second line reformist parties before the downfall of the Soviet Union and its ‘socialist’ satellites. Since 1989 they have become completely discredited and many have disappeared altogether.

The Sino-Soviet split in its turn produced new splits in the workers’ movement. This split was not as clear cut as the choice between reformism and revolution offered after the Russian Revolution. Initially Maoism appeared to offer a left alternative to traditional Stalinism to some militants. In advanced capitalist countries with a mass working class, guerillaism could not act as a model or a viable strategy. Mao used the Chinese-oriented parties as foreign policy instruments in the same way as Stalin had. In some areas the Maoists became independent of Chinese Stalinism, particularly after the death of Mao. The tendency of these parties was to drift towards reformism or to become rural guerrilla movements.

Social Democracy today

For decades after the Second World War the social democracy remained the main party of the working class in the majority of advanced capitalist countries. During the period of the post-War boom, when capitalism was growing rapidly, they were able to maintain their credibility by gaining important concessions for the workers. The British Labour government of 1945-51, for instance, won a National Health Service and a welfare state. As the post-War boom drew to a close, reforms were more difficult to achieve. The leadership progressively adapted to the dominant neoliberal ideology. The British Labour government of 1997-2010, despite being elected by a landslide, introduced very few reforms in their period of office. The traditional mass parties emptied out of members and disappointed their supporters. The British LP was finally ejected from office after the Great Recession struck. This pattern was repeated in one country after another. 

Reformism and revolution

Some commentators on the left have raised the question of the ‘decline of reformism’. The thesis is that there was a material basis for reforms in the nineteenth century when capitalism was progressive. That is supposed to have disappeared in the period of the death agony of capitalism put forward by Trotsky. The ‘decline of reformism’ thesis is based on Trotsky’s perspective in 1938. 

But in fact workers will always turn to trade unions and reformist parties for protection when under attack; in the same way that people put an arm up to protect themselves from being struck. It may well be objectively true that every major reform poses the question of changing society, as Trotsky insisted in 1938. We are certainly in a crisis-ridden era quite unlike the post-War boom and the flowering of reformist illusions that accompanied it. Reforms will not simply be conceded easily by the ruling class because it can afford them, as happened in the 1950s and 1960s. Every single reform will have to be fought for tooth and nail. 

Workers will fight the evil effects of the system pressing down on them, whether they understand the grim situation that capitalism finds itself in or not. In any case the system can always afford reforms if the alternative is revolution, however desperate the straits capitalists may claim to be in. 

Illusions in reformism are thus likely to be an inevitable feature of labour movement life under capitalism up to the moment of socialist revolution. The only way they will be dashed is by the steady, inexorable growth of revolutionary consciousness and that must be the work of a Party that systematically challenges those reformist illusions.

Have the workers’ parties changed fundamentally?

The thesis of reformism in decline is closely linked with the proposition that the traditional workers’ parties have become ‘bourgeois’ over the past decades. It is true that these parties have swung sharply to the right over this period. The reasons for this swing, and the actual course of these changes, are chronicled later in more detail in the case of the British Labour Party (LP). The question is: are these changes quantitative, or have they become qualitative?

Lenin called the LP a ‘bourgeois workers’ party’. This paradoxical formulation expressed the fact that the Party was the political expression of the mass of the working class; but that it actually served as a prop of the capitalist order. This contradiction is bound to manifest itself as an open clash as capitalist society, and therefore the LP, goes into crisis. A left wing opposition will emerge to challenge the established reformist leadership. The radicalisation of the working class will run through the trade unions to the LP. This actually happened in Britain in the early 1980s after the disappointments of the 1974-79 Labour government.

Even under extreme right wing leaders like Tony Blair, nobody could argue that Labour is the same as the Tories. Such an ultra-left stance would invite nothing but derision from the British working class, now under attack in 2013 from an unprecedented ruling class offensive. The Labour government of 1997-2010, arguably the most right wing ever, introduced reforms like the minimum wage. The Tories opposed this reform. In any case was Blair really more right wing than the German Social Democratic leaders Ebert and Scheidemann who put a price on Rosa Luxemburg’s head?

It may well be argued that right wing social democratic governments disappoint their natural support in the working class and pave the way for an electoral victory of the right wing parties, and that parties like Labour and the German Social Democrats do not effectively oppose their policies in opposition. Though correct, this criticism could be laid at the door of the reformist parties for any time over the past century.

Reforms and reformism

It is quite true that reforms have to be fought for much harder in the present crisis than in the post-War boom. Reforms, as Rosa Luxemburg said, are the by-product of revolutionary struggle. Revolutionaries are the best fighters for reform. Reformism is a different concept from reforms. Reformism means confining the battle for reforms to those that do not threaten the existence of the capitalist system. Reformists are those who take the existence of capitalism for granted and then try to work out what reforms are possible for the working class. At the top the reformist leadership has often developed a stake in the capitalist system. The ranks of the reformist parties are the mass of workers who instinctively want a better life, but have not seen an alternative to capitalism.
What is reformism? Though it is an ideology, the concepts of reformism support material interests. In the same way when we discuss neoliberalism, this ideology is important because it represents the interests of the ruling class in a period when their system is in crisis.

The material interest that the ideology of reformism represents is the welfare of the leadership of the labour and social democratic parties, often tied to that of the trade union leadership. This leadership lives well under capitalism. The reformist bureaucracy is not in decline. On the contrary it is in rude good health, strives to control the organisational framework of the mass parties and is more determined than ever to defend its own interests rather than those of the working class as a whole.

The fact that reformism is a ‘natural’ outgrowth of the labour movement in a non-revolutionary situation can be seen by the evolution of Chavez’s Venezuelan Socialist Party (PSUV). Though not a traditional social democratic party, as a mass party it has spawned a bureaucracy which generally strives to accommodate to capitalism. In other words it is dominated by a layer of reformists. 

The reformist party PASOK in Greece seems to be disintegrating electorally because of its abject failure to defend the interests of the working class. It is in the process of being replaced by Syriza, a party that offers real reforms and has yet to let the working class down. In other words one reformist party is being replaced by another! 

Reformism remains the main enemy of revolutionary Marxism within the international labour movement.

Reformism in Britain

We take Britain as an example of the evolution of reformism. The reason that the traditional mass party of the working class, the Labour Party (LP), has been dragged so far to the right is because of the defeats that the class has gone through. 

The British working class has gone through a period of industrial and political defeats since the 1980s, followed by a decline in class consciousness. This decline strengthened the hand of right wing reformism in the labour movement. The swing to the left in the LP in the 1980s was a result of the disappointments of the 1974-79 Labour government, which presided over a period of severe crisis for British capitalism. At one time the boss class feared that the Labour Party was slipping out of its hands as a safe ‘second eleven’ for capitalism. That has long ago been completely reversed. Under Tony Blair the LP was probably more right wing (and undemocratic) than it had ever been in its history.

This decline in consciousness must and will be recovered in the future. The process of rolling back the gains of the militancy of the 1970s may be illustrated by what happened in Britain after the defeat of the great miners’ strike in 1985. This was the most serious industrial defeat for the British working class since the General Strike of 1926. Any call for strike action in the years after the miners’ defeat was met with the response, ‘If the miners can’t win, nobody can win.’ At this time the trade union leaders saw their only salvation in the election of a Labour government, on almost any terms.

The changes in the traditional social democratic parties like the British Labour Party have been quantitative, not qualitative. These parties have not changed their fundamental nature. They declined after the defeats of the 1980s as the rest of the labour movement went into decline – in terms of trade union membership, activity and strike days lost.

In Britain the trade unions created the LP. Historically they have had a dominant voice in its decision-making process. The retreats of the Labour leadership in Britain since the 1980s were tolerated if not supported by the trade union leaders. If the trade unions no longer have a dominant voice at LP Conference, it is because they allowed their powers to be taken away. If Conference is no longer sovereign it is because the trade unions did not defend its sovereignty. Overwhelmingly Party finance still comes from trade unions. The trade unions could take their power in Labour decision-making back at any time if the will existed.

The Blair period was one that occurred after a series of defeats. In historic terms there was a low level of political involvement, consciousness and expectations. Traditional working class communities, with their associated level of class consciousness, were in the process of disappearing as the large parts of British capitalism were de-industrialising.

Blair only became Party leader as a result of LP leader John Smith’s death. This was a historic accident. Smith would have been an orthodox right wing social democrat (not ‘New Labour’) and would also have won by a landslide in 1997. There was actually an inchoate mood for change in the country in 1997, a mood Blair was determined to ignore and derail.

For most workers in Britain the standard of living went up during the period from 1997-2007 when Blair was Prime Minister. This was not on account of trade union activity or strikes, which were at a very low level. Workers sought an individualistic solution to their problems in terms of overtime working, seeking promotion etc. Since the whole period of Blair’s premiership was one of boom, the capitalists could carry on making money at the same time as most workers’ living standards improved.

The Labour leaders had been backtracking and moving to the right for more than a decade before the accession of Tony Blair. It is not true to say that in this they were just reflecting the rank and file mood, but they did not meet enormous resistance from the ranks either. By the 1990s millions of workers were desperate for a Labour government at almost any cost. A whole series of defeats and reduced influence for workers was accepted not only by most leading Labour parliamentarians, but also by the trade union leaders. Capitalism was seen as the only game in town. 

The election of Ed Miliband as LP leader represents a partial retreat from the traditions of New Labour. At least that was the intention of the Party members who voted for him. He was elected as leader because he was not his brother David, seen as ‘the heir to Blair’. He is the first Labour leader to have addressed the Durham Miners’ Gala or a TUC demonstration against austerity for decades. But he is surrounded and hemmed in by Blairite advisers. The Labour leadership has not presented and campaigned on an alternative to Tory austerity. That is the question of the hour for the British working class.

The crisis in Europe 

The Eurozone is the biggest cause for worry for world capitalism. Though the crisis of the Euro is an aspect of the general crisis of capitalism, the problems of the Euro area and the faulty architecture of the Euro make the economic situation particularly fragile there. 

The Euro was part of a political project aimed at the ‘ideal’ of a capitalist united states of Europe. The fundamental contradictions of capitalism are between the development of the productive forces and the limits imposed on them by private property in the means of production and the nation state. The growth of the productive forces has actually made tiny nation states like Belgium almost irrelevant. Europe needs a huge common internal market to further develop production on the requisite scale, and at some stage that necessitates a common currency. 

As we shall see, the nation state remains an immovable obstacle to a capitalist united states of Europe. This ideal was pursued by elites who were unconcerned to persuade the people of Europe of the advantages of their project, and who bypassed formal democratic structures to impose the Euro on most of the European Union. Naturally the crisis of the Euro has produced a crisis of democracy in Europe. This ‘democratic deficit’ has also led to the national question re-emerging all over Europe. We examine the case of Catalonia later

The Euro crisis

The Euro is an example of a fixed exchange rate system, just as the gold standard was for an earlier age. A country’s exchange rate is fixed, in principle for ever, against gold or the Euro. In the Eurozone national currencies have been abolished. 

In any economic arrangement under capitalism there will be competition between firms and between nations, producing winners and losers. Loser nations in a fixed exchange rate system find themselves running a deficit, buying more from abroad than they export. They cannot devalue – making their exports cheaper and imports dearer in order to adjust. That option, only ever a quick fix with a floating currency, is no longer available to them. So the only alternative solution to achieve balance is deflation, driving down wages and prices by imposing poverty on the nation. 

Greece and the Euro

That is what we see in Greece at present. It is an extremely painful process of adjustment, one that can often be self-defeating. In addition Greece has piled up enormous debts with the wealthy nations of the European Union (EU), debts which the creditors insist must be repaid. More and more of the money earned from exports drains straight out of the country just to pay these debts – or rather to pay the interest on the debt. 

Greek Gross Domestic Product (GDP), in freefall from 2009, is likely to fall by 6.7% in the year to the end of 2012 and by a further 6-6.5% in 2013. That shows that, even on its own terms, austerity does not work to restore full employment and prosperity. All the same austerity is what the capitalist class demands. The real intention of the imposed cuts in wages and social spending is to load the entire burden of the crisis onto the backs of the working class. This should eventually restore the rate of profit, which is what the bosses are really concerned about.

Since the crash living standards in Greece have fallen by 25%, as much as Americans suffered in the great Depression of 1920-33. The country is in a death spiral. The unemployed in Athens and the other big cities are raiding rubbish bins for food. Hundreds of thousands are dependent upon soup kitchens for nourishment. Will Greece default on its huge debts? Eventually it will have to. It is paying interest upon interest on the monstrous debts that have been built up. 

Theoretically the European Union authorities could take Greece through a negotiated default, writing off some debt. Greece only accounts for about 5% of Eurozone output. In practice the ruling group has continually dithered and could well make a complete mess of the situation, leading to a catastrophe for the Eurozone as a whole – and indeed for the world economy.

The authorities would not be able to step in to save Italy or Spain. Their crash would bring down the Euro without a doubt. The political consequences of a default or of exit from the Eurozone in either country would be disastrous. Italy and Spain are still on the critical list.

Will the Euro survive? Despite many predictions of its demise it is still hanging on by the skin of its teeth. The main question for the dithering authorities of the European Union is whether they can stave off the day of Greek default till the German elections are over in 2013. The rulers of the EU are still ruled by short term and trivial political calculation, seemingly unaware of the chasm opening up before them and threatening to engulf the entire world economy. They bumble along regardless towards oblivion. The Euro is not out of danger yet.

Germany and the Euro

Under a fixed exchange rate system a national deficit is seen as a problem to be sorted out by a country with a deficit. Yet a surplus nation is perceived to have nothing to worry about. But one country’s surplus is another’s deficit. Germany is the main surplus country exporting to its partners in the Eurozone, and the main beneficiary of the adoption of the Euro. 

German politicians blithely urge the Greek people to pull their belts in still tighter. They slander the Greeks in a racist manner as lazy, attributing the competitive failure of the Greek economy to the fault of its people. In fact the Greeks work much longer hours than the Germans. Their labour per hour is much less productive than that of German workers, but that is the fault of the Greek capitalist class who have consistently failed to invest in industry at home.

Though we can regard Germany as a beneficiary of the Euro regime, that is not true of the German working class. In fact German capitalism has been able to suppress wage rises over the past decade of prosperity. The previous Social Democratic Chancellor Schroder (the ‘German Tony Blair’) persuaded the German trade unions to abandon their protective practices. He threatened them with a wholesale removal of industry from Germany to low wage economies in Eastern Europe if they did not. As a result in 2010 we had 8 million German workers on less than 9.15 Euros per hour, 2.3 million more than in 1995! 

So Germany has an immensely strong and angry working class which has seen none of the benefits of the boom years of the present millennium. It is inevitable that at some stage they will be provoked to use their strength to fight to improve their wages and conditions.

Reformism in Europe

This section is intended to test and illustrate the propositions presented in a general way in the section on Reformism and revolution earlier in the document. It will also examine concretely the political perspectives for the main European countries.

France

In France Sarkozy and the right wing were almost bound to lose the Presidential elections in 2012. In a crisis the incumbents are likely to take the blame for perceived economic failure and may well be turfed out by the electorate. 

In the first round of the Presidential contest Melenchon, candidate of the Front de Gauche, came across as by far the most impressive candidate. In fact much of Melenchon’s vote came from the passing over  to him of the vote of the Communist Party (now part of the Front backing Melenchon) and the no less than three Trotskyists who have in the past presented themselves to the French people as Presidential candidates. So there was not a massive increase in the number of French citizens prepared to vote for candidates to the left of the Socialist Party. Melenchon was unable to break through to the second round. His vote was squeezed in a direct run-off between Sarkozy and Hollande, the Socialist Party (PS) candidate for President. 

Hollande presented himself as ‘Mr. Normal’, in contrast to the extrovert and hyper-active Sarkozy. Sarkozy positioned himself increasingly on the right, hoping to capture votes from the far right racist Front National, which came third. In fact Hollande was an unimpressive candidate. But the masses were faced with a straight choice between a discredited conservative President and the PS’s classic social democratic manifesto. Hollande promised to reduce the retirement age (which was in the process of going up) to 60 years, to tax the rich and bank profits, and to create more teaching posts and public sector jobs for the unemployed building social housing.

Hollande has received a storm of opposition from the capitalist class to his reform proposals including the threat of a strike of capital. His government seems to be drifting, and he has already lost a lot of popularity in the polls. It is not at all clear at time of writing which way he and his government will jump. One thing is for sure. The resistance to his reforms from the ruling class shows that austerity is the preferred programme of the capitalists. It can be defeated, but only by a determined struggle involving a mass mobilisation behind a programme of resistance.

Germany

As we pointed out earlier (in Germany and the Euro) the Social Democratic leader Schroder carried out many of the counter-reforms that wakened the trade unions and the working class in Germany. Of course Schroder was rewarded for his services to German capitalism by being booted out of office by the electorate in favour of the right wing parties. One reason he lost was because of the excellent showing in the polls of the predecessors of the left wing die Linke, which provided an alternative to his pro-capitalist policies.

Since the German working class has not benefited from the predominant position within the Eurozone under Merkel’s right wing government, we might expect the Social Democratic Party to regain support. The Party has failed to do so for two reasons. First they lack credibility as an alternative because of their previous role in government. They are even now failing to offer an alternative to the right wing parties.  In the meantime the mass circulation right wing press has run a racist campaign trying to blame the Greeks and workers in other peripheral countries as lazy and the source of all the German workers’ woes.

Spain

In Spain the traditional social democratic party PSOE suffered a serious electoral defeat in November 2011. They were ejected from office because they inflicted austerity policies upon the Spanish people. Their vote fell from 44% to 29%. Predictably the new right wing PP government pursued cuts even more ferociously. We might expect PSOE’s popularity to rise as the PP discredited itself, despite the fact that they pursued similar policies in office. Unfortunately the backlash against austerity has taken a nationalist turn in some regions of Spain for the time being.

The national question: the case of Catalonia

The seemingly interminable rounds of austerity have called forth a nationalist reaction in Catalonia. The Marxist position on the national question is clear: we support the right of nations to self-determination, up to and including independence. That does not mean that we support the call for national independence in all cases. 

Catalonia is a case in point: Marxists in Catalonia have to appraise whether to support independence or not; whether it advances the cause of the working class or not. Marxists in the rest of Spain have the duty to insist that the central state puts no obstacles to independence if that is what the people of Catalonia want, i.e. to support the right but not the duty of Catalonia to secede. They cannot be seen as lining up behind Catalonia’s national oppressors.

In the movement against colonialism and imperialism it was obvious that the cause of national independence was progressive, necessary and just. Marxists were to the fore in the independence struggle, without losing their identity as representatives of the interests of the working class in the process.

The danger of the breakup of existing nation states because of dissension caused by austerity policies is a different case. Catalonia suffered national oppression in the past. Its language was suppressed in the period of Franco’s fascist dictatorship. This caused lingering resentment. This national oppression was seen as a punishment to the working class and almost all the Catalan people for opposing Franco. Since the end of the Franco regime Catalonia has enjoyed wide political autonomy and is one of the wealthiest and most industrialised areas of Spain. Catalans no longer suffer serious national oppression in Spain.

The nationalist sentiment developing in Catalonia does not target capitalism as the root cause of the problem. It scapegoats the Spanish state. Instead of fighting for socialism the Catalans are increasingly being led to call for independence, implicitly blaming other regions of Spain for their problems. These other regions are said to take too much and contribute too little to the Spanish state coffers. In this instance the breakup of the Spanish state and the creation of an independent capitalist Catalonia would not be a step forward for the working class. It would be a diversion. Catalan Marxists would oppose the move.

Italy

Italy has been ruled for the past year by a ‘technocratic’ government led by Mario Monti, who is a banker and not even an MP. He has been a favourite of the global financial markets as he ruthlessly imposed austerity upon the Italian people. His government is likely to fall, as Berlusconi’s right wing party has withdrawn its support. Elections are due in 2013. Berlusconi is unlikely to win. The Democratic Party will probably form the next government. They are committed to continued austerity.

The Democrats are a bourgeois party, but they actually incorporate a majority of the former Italian Communist Party. In Italy the tendency of traditional workers’ parties to try to administer capitalism in crisis has reached its logical conclusion. The workers’ parties were swallowed up. The working class has no representation in Parliament for the first time for a hundred years. The rump Party of Communist Refoundation (PRC) remnant of the Communist Party has lost its MPs and is really just a large sect.

As long as the traditional mass parties continue to run the country in the interests of capital and place the burden of the crisis on the backs of the working class then they will continue to lose support. The question is whether these policies will be challenged by resistance within their ranks or by the emergence of new workers’ parties.

New workers’ parties?

The longstanding position of Marxists is that the radicalisation of the working class will take place in the first instance through the mass workers’ parties. We need to check the correctness of this perspective by seeing how far this has been the case in the present crisis. 

In the same way as Melenchon seemed to be doing well in the first round of the French presidential elections but faded when it came to a straight choice between the main right and left candidates, so the Dutch Socialist Party’s electoral challenge came to very little in 2012. It should be explained that the Dutch Socialist Party originates from a Maoist split off from the Communist Party. It is not a conventional social democratic party in its origins.

The Portuguese Left Bloc (BE) seems to have hit the same invisible ceiling. It was formed in 1999 by a coming together of left wing groups who retain their own autonomy within the Bloc. It represented a real challenge to the more established Socialist Party and Communist Party in the working class movement. Its vote rose steadily up to a share of almost 10% with 16 MPs. In the 2011 elections their vote collapsed to 5% and they lost half of their MPs.  Portugal is another peripheral country within the Eurozone, which has been forced to adopt savage cuts. Yet the Bloc has a clear anti-austerity position and should have been able to make gains like Syriza in the political and economic crisis. The solid support for the South European general strike shown by the Portuguese working class in November 2012 demonstrates that the battle against austerity is still very much on the agenda. 

It is understandable that socialists become frustrated at the continuing failures of the traditional parties and see their support haemorrhaging away because of their pro-capitalist policies. The call for new workers’ parties is an attractive one. There have been parties to the left of the social democracy for decades in countries such as Sweden. Quite often these left parties represent the rump of the old Stalinist parties. In most cases these parties have not disappeared in recent years; but neither have they taken over from the social democrats as the main party of the working class.  Die Linke in Germany is a partial exception in that it is a party that is holding its own while German Social Democracy seems to languish. But Die Linke is in part the remnant of the East German SED (Communist Party) and has a regional basis in East Germany because of the relatively depressed conditions that have prevailed in the former Communist East since German unification. It has made much less headway in the West.

Greece: is Syriza an exception?

Syriza has done better than the other alternatives to the traditional workers’ parties in Europe. The reason is that in Greece the crisis was more advanced and the situation facing the working class more urgent. Also the fact that the traditional workers’ party, the Panhellenic Socialist party (PASOK), was in office from 2009, pitilessly imposing austerity policies upon the Greek people, exposed their policies very sharply. 

PASOK won 43% of the vote in 2009. By 2012 this had shrunk to 12%. This is an unprecedented collapse, which has so far been replicated nowhere else. Obviously the mass workers’ parties will be tested in the fire of events as a result of the crisis. It is unlikely that many will see their vote collapse so dramatically and so completely. It is more likely that we will see civil war in the mass parties between the pro-capitalist leadership and the aspirations of the rank and file, leading to splits in the coming period.   

PASOK is the only example of a reformist party disintegrating in the face of the crisis so far. Though PASOK is basically a social democratic party, it has elements of a populist party, like the Pakistani People’s Party or the Peronists in Argentina, from its formation. The PPP and the Peronists are of bourgeois parties which for historic reasons have a basis of support among the masses.

At the outset PASOK was the vehicle for the career ambitions of Andreas Papandreou. More recently his son George took the helm. PASOK’s implantation within the working class was relatively recent. It was set up in the 1970s after the fall of the Colonels’ coup. Most European social democratic parties, have a hundred years of tradition and loyalty to draw upon. 

In addition the system of voting for a party list gives the PASOK bureaucracy enormous power in placing functionaries and yes-men in favourable positions on the list. Sometimes these Members of Parliament have tried to revolt against the austerity policies they realise will alienate their supporters and make them unelectable. Then they realise that they have no independent power base to stand up against the PASOK hierarchy. They can be easily marginalised and pushed to one side.

PASOK’s vote is being gobbled up by Syriza on account of the appalling betrayals of the PASOK leaders. It is not certain that SYRIZA will move to become a permanent replacement for PASOK as representative of the Greek working class. In the first place Syriza is quite an unstable formation, not a proper party. Secondly the political situation in Greece is itself very unstable. All the same Syriza’s rise has been astonishing. From being a fringe Party with less than 5% of the vote three years ago in 2009, it ran the ruling right wing Nea Dimokratia (ND) a close second in the June 2012 elections with almost 27% support. Its campaign aroused fantastic enthusiasm.  It swept the board in the main industrial areas such as Piraeus. 

It was faced with enormous opposition in the course of the campaign. The establishment parties (including PASOK) were claiming that Syriza was leading Greece to the precipice. This is a scare that can only be combated if the party has a cadre of members in every urban district and every village arguing against this alarmism and pointing the way forward. But Syriza does not have such an established network of local branches. Its vote was generated by huge enthusiasm to repudiate the programme of austerity rather than by the patient explanation of a programme and practical mobilisation for action by a party led by cadres of the Bolshevik type.

What sort of party is Syriza? In the first place it is not a unified party at all. Its core is Synaspismos, which is descended from the Euro-Communist split from the Communist Party. But Syriza itself is currently an electoral alliance of literally more than a dozen sects of Trotskyist, Green or Maoist origins. It is unrealistic to expect such a formation, its spokespeople dominated by Parliamentarians plucked from obscurity on the crest of a radical wave and run at a local level by squabbling sects, to have developed a coherent programme in a short time. 

On all the basic issues facing the working class they offer divided counsels:
  • Are they in favour of debt repudiation? Most of their representatives deny that this is necessary. But this is the most basic requirement to end the regime of austerity that is crushing the Greek working class. This is the key question facing the Greek people.
  • Do they understand that debt repudiation will require bank nationalisation and the imposition of severe capital controls, in other words of radical action against capitalism? There is no sign that the leadership is explaining and preparing for this.

Syriza has poached most of its vote from PASOK, which has so cruelly betrayed its working class supporters. Syriza appears to be a new left reformist party, with occasional gestures in the direction of centrism. Since the 2012 elections it has settled down to a period of purely Parliamentary opposition to the right wing government’s austerity programme. All the same Syriza represents the best hope for a break in the situation and the most likely fulcrum for change in Greece. This is the party Marxists in Greece should orient towards.

Syriza MPs have been sharply reminded of the limits of capitalist democracy. They recount that, 24 hours before the crucial vote on yet another round of austerity in 2012, they were delivered a mass of legislation dictated by the troika (the International Monetary Fund, the European Central Bank and the European Commission) to vote on. Some of the provisions may well have violated the Greek constitution, which does afford some protection to workers. MPs were not given time to check. They were just herded into the lobbies on the following day. It is no secret that the troika are the real rulers of Greece. 

Unlike Syriza, the Communist Party (KKE) has a long tradition of struggle, cadres rooted in the workplaces and unions and an established party machine. Unfortunately it is the most Stalinist Party in Europe. Recently the leadership has taken time out to justify Stalin’s notorious frame-up trials of the old Bolsheviks in the 1930s. Its attitude in the June elections was unremittingly sectarian and hostile to Syriza. The KKE managed to hold on to most of its established bases during the 2012 elections, but made no headway during what should have been an unprecedentedly favourable period for them. Truth to tell, the leadership was mainly concerned to protect its supporters from the ‘infection’ offered by the Syriza campaign.

There are some signs that the potentially revolutionary situation in Greece is in the process of subsiding. The working class, misled by its traditional parties, has not given a lead to the other layers of society who have proved themselves eager for change. The fascist Golden Dawn Party is on the march. There has been some discussion on the left as to whether parties like the French Front National can be regarded as fascist. No such doubts are needed with Golden Dawn. These are street fighting thugs like the Sturmabteilung (SAs) that provided the fighting forces for Hitler. Their main target at present is migrants. Greece possesses a long porous border of the European Union that attracts huge numbers of migrants that the impoverished Greeks are unable to cope with. Golden Dawn blames the migrants for all the problems of Greece in the classic fascist manner.

General strike?

In Britain and other countries we have sectarian groupings who believe that the call for a general strike is the answer to almost all political questions. What are they to make of the situation in Greece where, since the outbreak of recession, the Greek working class has launched 24 general strikes? It is true that many have been poorly co-ordinated between the different TU federations. The KKE trade union grouping PAME, for instance, makes a point of organising separate demonstrations and meetings from everyone else in a sectarian manner during every mobilisation.

A general strike poses the question of power. A one day general strike poses it in a formal way. A unified and determined showing of working class strength means that it can fire a shot across the bows of the ruling class. It shows the capitalists that potentially the workers are the real power in the land. Every wheel stops when the workers command it.  On the other hand a disunited and disorderly strike day will give aid and comfort to the ruling class, and disorientate and disappoint the working class.

An all out general strike seriously poses the question of who runs the country. The workers, for instance, may consider: should we withdraw essential services for an indefinite period? Or should we offer to keep hospitals and the like open on our own terms? In taking these decisions they are beginning to usurp the functions of the state. An all out general strike is bound to develop into a situation of dual power. Unfortunately the Greek trade union leaders, usually affiliated to PASOK or the KKE, have played with the slogan of the general strike. The Greek working class, exhausted from their struggles, are unlikely to see yet more general strikes as their salvation, though they may be drawn into them out of sheer desperation.

The Middle East

From secular nationalism to Islamism

During the Arab spring of 2011 revolutionary events shot from country to country. This interconnection of the Arab world indicates that a powerful pan-Arab consciousness still exists. This is despite repeated failed attempts to build a united Arab republic, going back to the time of Nasser. Nasser was one of a generation of secular, progressive politicians, often using socialist rhetoric, fighting for independence, modernisation and an advance in living standards for the whole Arab world. This was the dominant political trend at this time. Islamism was seen as obscurantist and subservient to imperialism. Nasser and his generation of independence fighters and leaders could not achieve what they wanted as long as imperialism continued to exist. They failed because they failed to break the power of capitalism in the region. 

In later years resistance to the status quo of poverty and imperialist domination tended to be voiced by the Islamist opposition, in contrast to imperialist puppets like Mubarak. Grotesquely, Al Qaeda at one time proclaimed itself the only opposition to imperialism in the Muslim world. Al Qaeda has of course achieved nothing but damage and chaos. The emergence of the mass movement, a concept they don’t understand, has shown them to be useless and divisive.

Islamist parties such as the Egyptian Muslim Brotherhood have also been completely confounded by the revolutionary developments in the region. They have had the historic advantage that they were the most well-known opposition element and were active on the ground for decades. The case of Morsi in Egypt shows that political Islam is a huge brake on revolutionary developments in the region.

9/11

The Al Qaeda outrage at the twin towers in New York was the most spectacular instances of terrorist activity ever. It was also one of the defining incidents of the new millennium. It led inexorably to a sequence of events where imperialism struck back, eventually hunting down and murdering Osama bin Laden. 9/11 was an event which armed imperialism with excuses to intervene, repress and kill. It led directly to the invasion of Afghanistan and the destabilisation of the region. Ironically the final outcome of the imperialist invasion is likely to be a fiasco which leaves the Taliban firmly installed in control of the country. 

Al Qaeda has shown itself to be a counter-revolutionary force; 9/11 served to throw the real movement back. Though it can continually harry imperialism, Al Qaeda cannot strike decisively against it. A handful of fanatics try to substitute themselves for the effects of a mass movement. The Muslims who bomb Christian churches in Nigeria are also serving to split the working class movement on religious lines. In the context of a unified movement against rising fuel prices, against the removal of subsidies at the beginning of 2012, that was a doubly criminal act.

Varieties of Islamism

The imperialist powers continually express fear at the rise of Islamism in the region and the wider world. Developments like the Iranian Revolution are unlikely to recur. What happened in 1979 was a huge, genuinely revolutionary movement against the Shah, a movement in which the working class was playing a leading part. The revolution was hijacked by Khomeini and the clerics. The Tudeh Party allowed them to hijack the revolution, because it was a ‘communist’ party and adhered to the Stalinist theory of stages. They saw the revolution as ‘national democratic’, with the aim of setting up a democratic republic. This, of course, was the Menshevik position in 1917. In fact the overthrow of the Shah could have been the first act in a socialist revolution, as the deposing of the tsar was in 1917. Khomeini only gained power because the labour movement’s leadership failed. The working class paid a heavy price thereafter.

Khomeini spouted anti-imperialist rhetoric, but capitalism is unchallenged in Iran, and the condition of the masses is desperate. Islamism is a twisted form of anti-imperialism. It can only gain credibility because of the failure of the labour movement to offer a way forward. Islamism is always and everywhere an enemy of the working class movement, as the events in Iran showed. Islamism in that regard is no different from any other political movement founded on religious beliefs – whether Christian, Sikh, Hindu or Buddhist. 

One thing all these religious parties have in common is that they are all bourgeois. Reactionary parties often take on the coloration of the dominant religion in the country. Marxists recognise that the main division in society, and the cause of conflicting political ideas, is the existence of social classes with different and opposing interests. Any political movement based on religion tries to cover over the real conflicts in society, at best with soothing words, at worst with repression.

The Egyptian Muslim Brotherhood is in any case not the same as the Iranian clerics. Political Islam is not a unified movement. There are huge differences between movements described as Muslim, between the moderates who aspire to be elected and the fanatical bombers. The Brotherhood presented itself as a reformist opposition to Mubarak through the Freedom and Justice Party. In this it seems to be following the ‘softly, softly’ example of the Turkish Justice and Development Party, which took on the armed forces through elections. The Turkish military were followers of the militantly secular Kemal Ataturk, founder of modern Turkey. The JDP was finally elected to government and is attempting to nudge Turkey in the direction of a Muslim country, while opening the country up to global capitalism completely.

The Arab spring 

The Arab spring has been compared to the Revolutions of 1848. The risings and demonstrations were entirely spontaneous, in the sense that there was no co-ordinated leadership. In fact the 1848 revolutions had almost all been rolled back by the middle of 1849. 1848 was posthumously labelled ‘the mad year’. So the Arab spring has already proved more long lasting and caused a more permanent change to the world than the events of 1848. It is still going on.

Tunisia

Tunisia is where the action began. The kleptocratic government of Ben Ali and his family was quickly chased out (bearing vast loads of loot as they went). Elections were held and what looked like a bourgeois democracy run by pro-capitalist moderate Islamic parties came to run the country. For imperialism this seemed like an ideal result. Tunisia is strategically important to them. Foreign investment in Tunisia now seemed safe from the greedy exactions of Ben Ali. It was a safe haven for building firms to enjoy a reconstruction bonanza next door in Libya after the devastation caused by the overthrow of Gaddafi. Foreign capitalists were also salivating at the prospect of the privatisation of assets confiscated by Ben Ali. 

All this changed after an Islamist attack on the US embassy in September. It appeared that Tunisia was no longer an easy and safe place for imperialism to make money. Foreign ‘investors’ then took fright. It is likely that the fate of Tunisia will continue to be in limbo. Tunisia is a small country whose future will be determined by movements in its bigger neighbours. 

Egypt

Egypt is the hegemonic power in the Arab world. The election of Morsi as President; the struggles with the remnants of the Mubarak regime since then; and the battles between Morsi and the revolutionary movement are some of the most important developments that have taken place in the world in 2012.

The movement in Egypt was fed in particular by the masses of unemployed youth created by the longstanding failures of the Mubarak regime to break with imperialism, develop the country and create jobs. Here is an illustration of the country’s plight and the background to the mass movement that erupted. Nearly half the population, 44% of Egyptians, live in absolute poverty on less than $2 per day. Food prices went up by 30% in the year before the uprising. Between 2000 and 2009 the country’s debt grew by 15%, despite repaying $24.6bn in loans over the period.  The net transfer from Egypt to the rich countries was $3.4bn over the decade.

The working class did not play a leading role in the overthrow of Mubarak as workers, though of course they were there in large numbers in Tahrir Square. Some commentators characterise the movement in Tahrir Square as a middle class movement. This is quite wrong. It was an urban movement of the mass of the people in Cairo. The same process occurred in other cities. 

The workers did not use the method of the strike against the regime in 2011, though the Egyptian Revolution had been prepared by years of a bitter and significant strike wave. There were 3,000 labour actions between 2004 and 2010. Particularly prominent was the textile industry in Mahalla (where Misra Spinning and Weaving mill employs 27,000 workers) which saw a wave of militancy from 2006 to 2008. This was already a clear sign that the Mubarak regime was on the rocks. 

The repression of the old regime was aimed in large part against the working class, restricting their power to take independent action against the bosses on the shop floor. The Egyptian Trade Union Federation was a tool of the regime. After the overthrow of Mubarak, independent trade unions were set up. There was a wave of militant strikes to kick out the ‘little Mubaraks’ in the workplace who had lorded it over the workers for so long. 

The armed forces were not neutralised by the movement, though this was beginning to happen in January 2011. The ranks were increasingly unwilling to do Mubarak’s dirty work of repression. The army heads clearly recognised that a rebellion was on the verge of occurring. They sacrificed Mubarak as a generous (and necessary) gesture to the masses in order to try to maintain their own control over the rank and file soldiers and prevent a complete meltdown of the old order.

The downfall of Mubarak produced the election of Morsi as Egypt’s President in June 2012. Morsi is a member of the Muslim Brotherhood. Though a longstanding opposition to Mubarak, the Brotherhood was not the force that brought him down. The revolutionary movement in Tahrir Square was essentially a democratic movement of workers and youth against the regime. The cry in Egypt was, ‘Bread, freedom, social justice!’

One weakness of the revolutionary movement was an inevitable product of the preceding history of the struggle in Egypt. Everyone who took part knew what they were against – Mubarak and his regime. The movement had no clear idea of what they wanted to replace Mubarakism with, apart from vague notions of democracy. Egypt was a very repressive society. Opposition parties could not function freely. There was no tradition of revolutionary socialist politics in the working class movement, as there had been in Russia in 1917.

What is needed now is the intervention of workers as workers under their own banner. What is lacking is a workers’ party to point the way forward. If that were to happen, the working class movement could take the lead in the Revolution, pulling all the other revolutionary-minded layers behind them.

At first it seemed Morsi’s new regime would be swallowed by the relics of Mubarakism. The Parliament, voted in by elections won by the Brotherhood, was dissolved by the Constitutional Court. In fact the Court was dominated by representatives of the old regime. 

Morsi has shown himself as surprisingly adept at Bonapartist manoeuvring. At the end of 2012 he immediately moved to pass decrees protecting the Constituent Assembly (the body drafting the Constitution, which was dominated by Islamists) and protecting himself as President from legal challenge. If he got away with this he could rule by decree. 

In effect he was declaring himself dictator. He declared this was merely a temporary measure. Every dictator begins by asserting their coup to be temporary. His coup, he declared, was necessary to defend the Revolution, a Revolution he neither anticipated nor supported. His Salafi allies also played no role in the Revolution. They subsist happily on money from Saudi Arabia.

Morsi’s manoeuvre was really a blow against the Revolution. It was also seen as a blow against the relics of the old regime. Morsi cleverly threw into the package renewed indictments against the Mubarakists who had shot down protestors in Tahrir Square. Obviously this was intended to win popularity and show him to be a friend of the Revolution. 

The workers were not fooled. At the end of 2012 Mahalla rose up once again against Morsi. They kicked out the ‘official’ local council and declared themselves independent of the regime. They seem to have set up the first Egyptian Soviet! The significance of this cannot be overstated. (The workers who set up the Russian Soviets in 1905 did not at first understood their significance.) This is a sign of a movement towards dual power in Egypt, the classic symptom of a pre-revolutionary situation. 

Mahalla is an isolated industrial town. The textile workers there were unable to connect with the masses in Tahrir Square at the time of Mubarak’s overthrow. It is possible that this giant step forward may be the only one taken for the time being. Time will tell. Even so it lays down a huge marker for the future of the Revolution in Egypt.
The Constituent Assembly was packed with Brotherhood members.  The new Constitution was rushed through, and subjected to a referendum, amid accusations of irregularities, in December 2012. This gave no time for anyone to study the detail. In fact Morsi is using the referendum on the proposed Constitution as a vote on his authority – for or against the regime! Marx pointed out that the referendum or plebiscite is the classic instrument of Bonapartist rule.

Everyone who is a genuine supporter of the Revolution, and all Coptic Christians and other minorities, are understandably nervous at having a Constitution containing elements of Sharia law imposed on them. This would be a setback to the cause of the Revolution. The secular democrats, trade unionists and all who were prepared to stand up to Mubarak and make the Revolution came back to Tahrir Square protesting, while the Muslim Brotherhood and their Salafi allies, supported by the army,  counter-mobilised. Morsi’s supporters are thugs, bussed in to the towns to attack the revolutionaries and back the new regime, with no expense spared.

Events are developing very fast. The fate of the Egyptian Revolution remains in the balance. Both Morsi and the Mubarakist remnant are coming together to impose the rushed Constitution. Both are the sworn enemies of the Revolution. Morsi is trying to hijack it.

The overthrow of Mubarak was achieved in the towns. The Revolution also has to face the problem of a relatively conservative peasantry under religious influence in the countryside, particularly in Upper Egypt. The peasantry was also a conservative layer in the 1848 Revolutions. In France the peasants formed the passive support of Napoleon III’s Bonapartist coup which effectively ended the Revolution there.

Comparing the Egyptian and Russian Revolutions

Marxists often use the events of the Russian Revolution as a template to analyse contemporary revolutionary events. The Russian Revolution unfolded in nine months over two main acts. The February Revolution overthrew the Tsar, the head of the old order. It is conventionally described as a spontaneous uprising of the common people in the big cities, like the Arab spring. The army was split, refusing to fight the revolutionaries, and thus rendered useless as a force for repression by the Tsar. Soviets, potential organs of workers’ power, were set up in the course of the insurrection. 

The February Revolution was seen as leaderless. In fact as Trotsky showed in his ‘History of the Russian Revolution’, worker Bolsheviks played a leading role in the Revolution at rank and file level, though not under the direction of the Bolshevik Party leadership, which was mainly working underground or abroad.

The Revolution instituted a period of dual power, with the Soviets and the bourgeois Provisional Government representing the two possible options for Russian society. Initially the Soviets were dominated by moderate socialist parties who sought to prop up the Provisional Government. The Bolshevik Party already had a cadre rooted in the working class from the previous revolutionary struggles of 1905. They were able to take advantage of the revolutionary situation in Russia, given the utter failure of the Provisional Government to solve the basic problems faced by the masses, to build themselves up as a mass Party very quickly. In nine months they won a majority in the Soviets and took power on behalf of the workers and peasants.

What should be the attitude of the working class to the other forces at work in a revolution - in particular towards the capitalist parties? The Russian Revolution provides a guide. The Mensheviks believed that, since Russia was a backward country ruled by the Tsar, the country was not ready for socialism. A similar argument could be and was used in the case of Egypt. 

In 1917 the Mensheviks argued that the coming revolution would be bourgeois-democratic. They argued that the attitude of the workers should therefore be to let the capitalist parties lead the revolution, while they would supply a left opposition. Lenin insisted on the contrary that the working class should be the vanguard fighters carrying through the revolution. In his ‘April Theses’ issued on his return to Russia in 1917 he warned that the capitalist parties were not to be trusted. He singled out Kerensky in particular as a future enemy.

Lenin was drawing on a long strand of Marxist analysis. Marx summed up the experiences of the 1848 Revolutions in his March 1850 ‘Address of the Central Committee to the Communist League’. He indicted, “the treacherous role that the German liberal bourgeoisie played against the people” in what was supposed to be a bourgeois revolution. He warned against class collaboration and suggested that the working class adopt the watchword of ‘permanent revolution’. 

Marxist analysis thus showed in advance that Morsi of the Muslim Brotherhood, who presented himself to the masses as a friend of the revolution against Mubarak, would turn against them because he represented a capitalist political party. This is exactly what happened. Kerensky too postured as a friend of the Russian Revolution. In the end his attempt to suppress the Soviets, now under majority Bolshevik control, led to the October Revolution which overthrew capitalism and landlordism in Russia. A further application of the theory of permanent revolution is included in the section on South Africa.

Palestine

Morsi gained some prestige with imperialism by negotiating a ceasefire between Hamas and the Israelis in Gaza. In fact if he had an ounce of integrity he would have opened the border with Gaza and stopped the Israeli blockade of the Palestinians there.  Abbas, head of the Palestinian Authority on the West Bank, also disgraced himself when the Israelis invaded Gaza at the end of 2012. He did not raise a finger or make a sound of protest at the Israeli incursion. The PLO is abjectly dependent upon diplomacy, in other words on the goodwill of the imperialists. It will never make any gains or concessions for the Palestinian Arabs that way. The long running plight of the Palestinians in the West Bank and Gaza reminds us once again that they are being subjected to an Israeli land grab with the full support of world imperialism. All the situation holds for the Palestinians and indeed the people of Israel is continuing political instability and violence. There is no solution to the problems of the Middle East under capitalism and imperialism.

Libya

Developments in other countries have followed a very different course from Egypt. The reason for this is that the weight of the working class in society is relatively much less elsewhere in the region. Libya was created as a unified country only quite recently, and strong regional identities persist. The fact that the insurrection against Gaddafi began in Benghazi and spread gradually to Tripoli is an indication of this. In fact the opposition to the regime appears to have had no common thread apart from an entirely understandable hatred of Gaddafi.

The rising developed differently from Egypt. Rather than powered by enthusiastic assemblies of millions of people in the cities, it was conducted by militias in pick-up trucks blazing away with AK-47s in the desert. It took the form of an armed civil war.

The rebels were not all just stooges of imperialism, though Western bombing was vital to their victory. The motivations of the rebels were mixed. Individual motivations in any case do not determine the class character of a movement. No doubt sincere revolutionary democrats took part in the struggle against Gaddafi. But they were drowned in a movement dominated by local, tribal and religious loyalties and by business people who chafed at the restrictions on their activities imposed by the regime. 

In this situation there is no reason why revolutionaries should support either side. But Marxists cannot be neutral when imperialism intervenes. We oppose imperialist intervention, whatever the ‘humanitarian’ pretext. Western bombing killed uncounted thousands of innocent civilians in Libya. Their aim was Libyan oil – no doubt about that. Already the oil booty, which previously was effectively the property of the Gaddafi family, is being divided up between the imperialist powers.

In Libya, the imperialists have been unable so far, with their local capitalist collaborators, to stabilise the situation. A secure bourgeois democracy is, for the moment, a pipe dream. Once again as in Tunisia the Islamists, invited in to destabilise the Gaddafi regime, attacked the US embassy in September 2012 and killed the ambassador. These are not conditions for stable capitalist profit-making! 

Syria

Developments in Syria are more similar to those in Libya than Egypt. There were mass movements of opposition in the cities to start with, but also armed insurrection by army rebels. The movements in these cities seem to have partly been fed by religious dissent. The majority Sunni population feel themselves to be oppressed by the Assad regime. Though Assad, like his father before him, regards his government as secular, in fact the power of the regime lies in maintaining a patchwork quilt of different religious faiths divided against each other. The army officer caste, like the Assad dynasty, is mainly Alawite, a Shi’ite sect.

As long as the army remains loyal to Assad then there is unlikely to be a successful overthrow of the Syrian regime. Every revolution poses the need to split the army, the repressive apparatus that acts as the last guarantor of the regime. Some soldiers, revolted by the brutality used against their own people, have deserted and begun armed struggle against Assad. Apart from hatred of the regime, they have no clear objectives. 

Cracks in the army have become more visible. The implications of Assad’s fall could be dramatic for the region. At this stage it is not clear what forces might emerge to take his place and what the implications would be for Syria and the region. After the regime’s demise at the hands of opponents with different aims, Syria could descend into chaos. Secondly Syria has a client regime in Lebanon, whose legitimacy would undoubtedly be called into question. Finally Syria is seen as an ally of Iran, whose regional power would therefore be weakened.

The situation is deteriorating. Blood flows abundantly. We now have a full scale armed insurrection supported by imperialism and the conservative Gulf Arab states. The insurgents have engaged in purely military operations against the Syrian army rather than mass mobilisations, often treating the civilian population like human shields. At the same time Al Qaeda and other jihadis are being given free rein. These are rightly seen by Christians, Alawites and other minorities as a threat to their security and lives.  

Marxists support neither side in the civil war. Neither side represents the working class. Neither the victory of the Assad regime nor the rebels will benefit the working class. Together they are tearing Syria to pieces and making ordinary working class mobilisation almost impossible. Marxists naturally oppose imperialist intervention in Syria, as everywhere else.  Imperialism has produced nothing but chaos and bloodshed wherever it goes.

The imperialists are desperate to set up a ‘reliable’ opposition (excluding the extreme Islamists) that they can negotiate with and who will eventually take over from Assad. The trouble is that Saudi Arabia is also intervening, backing the jihadis. It is a sign of imperialism’s present weakness that they can’t get the Saudis to back off. The longer the killing goes on, the greater the prospect of chaos and of the country becoming ungovernable. 

International Relations

It is clear that the USA remains the hegemonic economic power of world capitalism. There was fashionable talk of China and other countries decoupling from the USA, in the sense that they could separate themselves from the gravitational pull of the world’s biggest economy upon the global economy as a whole. This was disproved in the course of the Great Recession. 

It is clear that the USA, though weakened and under challenge from China in particular, remains the dominant economic power responsible for almost a quarter of world output. China’s economy produces only about 8% of world output. The USA remains the world’s only superpower after the demise of the Soviet Union. It is undoubtedly in decline compared with its peak in 1945, but is unlikely to be challenged as hegemonic power for decades.

It should be recognised that global hegemony is not just achieved by one country outpacing another for a number of years. The dominant power builds up the institutions and culture of global leadership gradually, and they only disappear slowly when under challenge. Britain was probably losing the economic race to Germany and the USA by the 1880s. But the City of London had built up its power as centre of the global capital market over centuries and retained a monopoly over financial expertise for a long time afterwards. America was unable to challenge this position till the First World War turned Britain from a creditor to a debtor country. Even then US hegemony did not become apparent till 1945.

China cannot yet become the global hegemon as Britain was with the pound sterling and the USA is with the dollar. For that the Renminbi must become the main reserve currency of world trade and China develop a city as the world’s financial centre. Shanghai is still growing as a financial centre. As yet the Chinese currency is not fully convertible. 

After the Second World War the USA was able to dictate the terms on which world trade was conducted. The basic rules of world trade, the formation of the International Monetary Fund and World Bank and the imposition of the dollar as the world reserve currency which was regarded ‘as good as gold’ were all part of this post-War settlement.

Since the world became dominated by capitalism Holland, Britain and the USA have acted as hegemonic powers. There are advantages to the stability achieved by allowing one hegemonic power to set the rules of the game. The inter-War period was chaotic partly because Britain was unable to take the lead in international relations and the USA was unwilling to do so. 

Right up till 1989 the world was dominated politically by two super powers, the USA and the Soviet Union. Before the collapse of Russian Stalinism in 1989, this provided a measure of stability to international relations. That has gone. This balance of forces allowed governments such as that of Nasser in Egypt to play the great powers off against each other. Nasser appealed to the Soviet Union for assistance when the USA found him too independent. The very existence of the ‘socialist bloc’ seemed to pose an alternative to capitalism.

The collapse of the USSR and its satellite countries after 1989 left the USA supreme in the world arena. Not only did the collapse generate a mood of capitalist triumphalism; it also seemed to make America the unchallenged champion of world imperialism. 

This was an illusion. Russia’s power collapsed with the counter-revolution that restored capitalism to the country and caused a massive decline of the productive forces there. Over the past few years the Russian economy has recovered on the basis of oil and natural gas exports to the advanced capitalist countries.

Russia has once again become a regional power. The country rebuffed the US as it moved to incorporate Georgia into NATO and in effect surround Russia. It asserted its power against the pro-American regime in Georgia in 2008 with a short war. This occurred at the same time as the economic collapse emanating from the USA showed America’s economic weakness. 

The world’s future is one of huge economic and political instability. This global instability is shown by the emergence of two very different movements. In Muslim countries there has been a revival of Islamic movements. As was pointed out earlier there are different varieties of Islamism, reflecting different aspirations of different sections of the population. Islamism can reflect a distorted form of anti-imperialism. The rise of political Islam is a sign of the weakness of the grip of imperialism.

Of more positive significance is the rise of the populist movement in Latin America. Chavez calls his revolution Bolivarian in tribute to the nineteenth century leader of the Latin independence struggle. The anti-imperialist nature of this movement is clear and written on their banner. Chavez is the first and most important leader of the mass movement, but has allies like Evo Morales in Bolivia all over the continent. The Bolivarian and anti-imperialist movement is discussed further in the section on Latin America.

Weakness of imperialism

Recent events have shown us example after example of the weakness of imperialism. This is a big change from the 1950s and 1960s, when the USA regarded Latin America in particular as its own backyard. America engineered coups in country after country and maintained rotten puppet regimes in power all over the continent.

The incapacity of the USA, and therefore of imperialism, to impose its will even on a country with a small population like Libya is a clear sign of weakness. All the recent experience in the Middle East shows that imperialism is no longer the all-powerful force that can dictate to whole nations. World imperialism, with the USA at its head, is being bundled ignominiously out of Afghanistan after more than ten years of bloody but futile hostilities. It leaves behind one of the most corrupt puppet regimes in the world. Iraq remains a quagmire. In fact imperialism has been responsible for fiasco after fiasco in Afghanistan, Iraq, Libya and now Syria, showing huge incompetence in addition to its declining powers. 

The right wing leaders of America’s client state in Israel are bursting to attack Iran. An invasion is ruled out. Iran is a country of almost 75 million people. An airborne attack on so-called nuclear sites is likely to be ineffective in all but the short term. All it would do is inject more bloodshed, tension and chaos into the Middle East. All the same the fact that USA has problems restraining the Israelis in is a further sign of its weakness. The fact is that the Israeli tail is virtually wagging the American dog.

The new instability has been reflected in the counsels of the United Nations (UN), a classic institution of the post-1945 settlement. Its whole history makes it clear that capitalism and international co-operation and world peace are incompatible. In the recent past the UN has been a vehicle for US foreign policy. In the last few years Russia and China have come together to oppose US policy, for instance on Syria. They correctly challenge the attempt to impose a US stooge in place of the Assad regime. As a result the UN has become paralysed, completely ineffective as a forum for decision-making between the world’s powers. 

The Americas

USA 

Obama won the US Presidential elections again in 2012. His victory was very different from the 2008 campaign, which allowed millions of Americans to hope for real change. Obama has proved a massive disappointment to his supporters. In 2008 he seemed to be challenging the establishment. The 2012 election was quite clearly fought with millions of dollars on both sides, rather than tapping the enthusiasm of ordinary people who want change for the better to get involved in Obama’s campaign. It was clear to every observer that both the Republicans and the Democrats are capitalist parties.

Even in the detail Obama has made little change. He has proved incapable or unwilling of closing Guantanamo Bay, a 2008 election pledge. Bagram Air Base in Afghanistan remains a torture centre. The USA, which was for long seen by people all round the world as a beacon of freedom, is now indicted before the globe as a blatant imperialist power which routinely uses torture and murder to achieve its aims. Obama has shown himself particularly enthusiastic in the use of drones, remote killing machines operated safely from the USA. Mistakes are inevitable with the use of drones, particularly since the administration has shown it does not care who or how many it kills this way. If a wedding party is wiped out, the victims are posthumously decreed to be enemy combatants.
The USA has seen class struggle, bitterly fought in Wisconsin and Ohio. The well-publicised Occupy movement has undoubtedly attracted sympathy and support from the 99% of ordinary people, and focussed their anger on the 1% of the rich. The potential for US labour to make forward strides is there. The mood exists for change.

A clean break in American politics will only take place when the American trade unions, still pathetically backing the Democrats as the ‘lesser evil’ in the 2012 elections, are pressured by their members to make the break and start the formation of an independent labour party.   

Latin America

One difference Latin America as a whole has with the labour movements in Europe and parts of Asia is that the grip of the traditional mass parties, whether social democratic or Stalinist, over the mind of the masses is not as strong. This is a good thing and a bad thing. It means that the working people are not as well organised. But it also means that they are not prey to the poisonous ideologies that have let the workers down again and again in Europe and Asia. The masses in Latin America can improvise their resistance to capitalism and experiment with new radical ideas and new forms of organisation.

Venezuela

Despite the panic and doubts, in the end Hugo Chavez won the 2012 Presidential elections quite easily. He retains the broad support of the masses. His Bolivarian Revolution is still presiding over a capitalist society in Venezuela. But the hopes and aspirations his movement unleashed burn in the hearts of millions of poor Venezuelans. This movement is viewed with alarm both by US imperialism and by the Venezuelan capitalist class. Despite threatening manoeuvres by the US 4th Fleet, imperialism seems in no mood to intervene militarily. An invasion of a country of 23 million people, the majority of whom are enthusiastic supporters of Chavez, is ruled out. Coup attempts in the past have proved a failure. In 2002 a coup was thwarted at the last moment by a mass movement of the common people.

There are serious weaknesses in the Bolivarian movement. Though Chavez has tried to build a mass party (the PSUV) to support him, the movement remains far too dependent on his personality and leadership. He definitely shows Bonapartist traits in lurching from initiative to initiative. Nobody else in the movement has his stature. He has been ill. He has been late to appoint a successor (Maduro), who needs to establish his authority and show the masses exactly where he stands. If Chavez were to die or drop out of activity the movement would be in the hands of squabbling cliques. He is surrounded by advisers, the majority of whom are desperate that Venezuela should not break with capitalism. 

Though the working class generally supports Chavez, they are not organised independently to intervene in the Bolivarian movement as workers. Instead they are part of a movement of poor people, who have benefited from the Bolivarian reforms such as the misiones, the social welfare, anti-poverty and education programmes which have been taken into the shanty towns.  Their beneficiaries enthusiastically support the President. Venezuela in turn can afford such reforms because it is one of the richest oil exporting countries in the world. Given the balance of forces in the country this standoff between revolution and counter-revolution could continue for years to come.

All the same it is our duty to warn that, if capitalism is not overthrown in Venezuela, the counter-revolution will continually probe the weaknesses of the Bolivarian movement and will eventually strive to destroy it and return to the unfettered rule of capital. This half way house cannot continue for ever.

Argentina

President Kirchner is the inheritor of the tradition of Peronism. Juan Peron was a populist politician who offered reforms to the working class while running Argentina as a capitalist country. Clearly this is a difficult balancing act. Peron was able to achieve it for a time because he was ruling in the favourable conditions of the post-War boom; and because Argentina is a fertile land with plenty of agricultural export opportunities on the world market.

Kirchner is finding things much more difficult now. In recent years Argentina has been growing at 7% a year, but is in danger of slowing down. The Achilles heel of the Argentine economy is inflation. Because of the danger of inflation, now way above 10%, well to do residents prefer to hold their wealth in US dollars. This could cause a flight of capital from the country, so Kirchner has recently imposed capital controls. Her popularity is dipping. She is finding it far from easy to manoeuvre between the pressure of imperialism and that of the masses while remaining on the basis of capitalism.

On several issues the Peronist government has come to clash with imperialism. In 2012 Kirchner took over the national oil company YPF from the Spanish firm Repsol. This caused squeals of outrage from the imperialist powers. In the case of the British Tories this is particularly poignant since 100 years ago their hero Winston Churchill did exactly the same, taking a majority shareholding in British Petroleum (BP). He did this to guarantee oil supplies to the navy and not, of course, as a socialist measure. Likewise Kirchner intended to offer her country fuel security, nothing more.

The latest provocation from imperialism is the attempted grab by the ‘vulture funds’ and their support by a US court. In 2001 Argentina defaulted on foreign debts and 93% of bondholders agreed to take a loss. The vultures are the ‘holdouts’, the 7% of bondholders (mainly American billionaires) who refused to take a loss on their bonds and are now pursuing Argentina through the courts to get all their money back. 

Argentine debts have been rolled over many times but they were ultimately incurred by military dictatorships that tortured and murdered thousands of Argentinean citizens. Why should ordinary Argentineans have to pay for them? It is surely right and sometimes essential for countries exploited by imperialism to repudiate their debts. Governments have to choose between the interests of their own common people and the demands of imperialism.

Whatever the outcome of the present quarrel, the existence of these vultures is evidence of the poisonous and destructive nature of imperialist politics. It is normal under capitalism for failing firms to go bankrupt and for creditors to take a loss. This is part of the destruction of capital, which Marx saw as playing a healing role in preparing for a new upturn. Yet this process is not allowed to happen in the case of nation states. It seems that an obscure New York judge can ignore the wishes of the elected government and tell an entire country of 41 million people what to do. 

If the American judgement is confirmed, Argentina may have to repudiate all its debts, since the 93% who took a ‘haircut’ (a loss) on their bonds will be back for the rest of their money too. This could actually cause an international crash, and send the world economy back into recession. US imperialism would then lose out, as well as the rest of the world. And all because some greedy vulture speculator was let loose by a maverick American court! 

These clashes show that a government can either grovel to imperialism or defend the interests of the common people. But defending the interests of the common people ultimately means overthrowing capitalism. Kirchner’s balancing act of taunting imperialism while keeping Argentina in the capitalist camp is proving more and more difficult to maintain. The era of boom, with the chance of substantial reforms for the masses that Peron faced after the Second World War, has gone for good.

Brazil

Brazil is one of the BRICs (Brazil, Russia, India and China). These are fast-growing large economies that are said to have bucked the trend of the slowdown in the world economy. In fact they have very little in common. The term BRIC has been described as a ‘broker’s fantasy’. The notion that these countries are impervious to the trends in the world economy, that they can uncouple from the fate of the rest of world capitalism, has been exposed as untrue. See the way Brazil’s economy is now slowing down.

Brazil’s growth pattern in the past has been described as ‘chicken flight growth’. This describes the way a chicken gets off the ground with a great deal of flapping and squawking and soon collapses back to earth. Growth in 2012 is expected to be a miserable 1.6% compared with 7.5% in 2010. President Rousseff of the Workers’ Party (PT) is alarmed by the slowdown. She has announced a $60bn economic stimulus in the form of massive infrastructural spending. In passing it may be mentioned that the existing infrastructure in Brazil is completely inadequate for this vast country. The government has drastically reduced interest rates and the national currency, the Real, has been devalued.

Will it work? Brazil continues to show that it is haplessly dependent on the vagaries of the world market. It will share the fate of global capitalism. Rousseff is the successor of Lula da Silva, a former steel worker and fellow PT member. He was popular and charismatic and able to deliver reforms to the poor while Brazil boomed. Those times have gone. We can say he got away with it. It is unlikely Rousseff will be so lucky.

South Africa

South Africa, together with Egypt and Nigeria, is the key to developments in Africa. Since the massacre at Marikana it has been thrust to the forefront of class struggle internationally. To fully understand the events unfolding, it is necessary to look back at the whole history of the struggle against apartheid in South Africa.

For decades the African National Congress (ANC) had been the main focus of opposition to the racist South African regime. For most of that time it was in exile. Its main support was among the Stalinist states. (Margaret Thatcher consistently described Nelson Mandela as a terrorist.) Under conditions of clandestinity the ANC developed a Stalinist internal regime. To this day political differences are routinely dealt with by expulsions. The ANC had its own trade union federation (SACTU) and an armed wing. In fact these had little impact on the apartheid regime compared with the marvellous class struggles waged inside the country. 

Permanent revolution

The South African Communist Party (SACP) was a key part of the exile alliance. It put forward a two stage theory. What was needed first, it argued, was to complete the national democratic revolution through the overthrow of apartheid. Later the country could move to socialism. This of course was the Menshevik theory that was discredited in the Russian Revolution of October 1917. In fact, even if it were accepted that the revolution was bourgeois democratic in its tasks, in the sense that it would install a democratic government, it did not follow that the capitalist class should be allowed to lead it. There is a long history, going back to the 1848 Revolutions, showing that the capitalist class would betray ‘their own’ revolution if they saw their material interests threatened.

Both Lenin and Trotsky argued that the working class would be the vanguard fighters for the democratic tasks. This was certainly the case in South Africa. Trotsky went on to predict, that having secured itself at the helm of the state, the working class would not stop at achieving the tasks of the national democratic revolution. Instead it could make the revolution permanent, or uninterrupted, by going over to socialist tasks that were in its own interests, carrying the mass of the peasants behind it.

The black working class showed itself capable of incredible militancy and courage in the struggle against apartheid. In the 1980s and early 1990s there were mass strike waves. These were not led by SACTU, but mainly by a confederation of trade unions forged in the heat of the struggle in South Africa itself. They came together to form COSATU in 1985. The ANC quietly dumped SACTU and worked hard at taking over and co-opting COSATU into its ruling alliance after 1994. Likewise the United Democratic Front (UDF) played a leading role in the mass struggles of the 1980s. The apartheid regime made the UDF illegal in 1989. In 1991, unable to run it outright, the ANC used its influence to urge the UDF to formally dissolve itself as ‘no longer necessary’. In fact it was a potential threat to ANC dominance of the movement against apartheid, and later in government.

It was the outright failure or refusal of the ANC, influenced by the ideology of the SACP, to recognise that the permanent revolution was unfolding before their eyes, and their determination to derail it in favour of a flawed theory of stages, that served to preserve South African capitalism after the overthrow of apartheid.

The theory of the permanent revolution is the key to understanding the unfolding of the national liberation struggles. The movements after the Second World War were massive and inspiring. Most countries have long since achieved their independence. But those who fought so bravely have often been disappointed with the results. Nowhere is this clearer than in South Africa.

This is because, as long as capitalism rules, national independence is in many respects a sham. The laws of capitalism still dictate to the post-independence governments. As a result the position of the mass of people is often no better than under colonialism.

Post-apartheid South Africa is a big disappointment to the black working class. The ANC is administering a severe neoliberal programme because it is running capitalism. The theory of permanent revolution is an indispensable guide for the real emancipation of the workers and peasants.

South Africa after apartheid

The dominance of Stalinist politics and organisational methods within the upper layers of the ANC brought its own catastrophic consequences. In the first free multiracial elections in 1994, the ANC swept the board and Nelson Mandela became President. Mandela and the rest of the ANC leadership used their enormous authority to save South African capitalism. They co-opted COSATU as an instrument of their rule, urging the unions to co-operate with their employers ‘to build a new South Africa’. Of course a policy of corporatism would have been impossible to advocate before the ANC took power. Then the unions were battling against racist employers buttressed by the apartheid regime. But the employers and the conditions of employment faced by black workers didn’t change after 1994! 

The fact that capitalism was still in charge was underlined when the ANC government adopted the Growth, Employment and Redistribution programme (GEAR). This was a severe neoliberal programme that made the rich richer and left the black working class often in conditions no better than before under apartheid. So far from nationalising the mines and carrying other promises from the days of opposition, the ANC government moved to privatise the water supply and electricity. There were waves of evictions and land grabs.

South Africa was in the process of becoming one of the most unequal countries in the world. A tiny handful of black former leaders of the movement shared in the wealth. One example was Cyril Ramaphosa, the former leader of the National Union of Mineworkers (NUM), who sold himself to the mine owners and became a billionaire in consequence.

The contradictions in all this came to a head in the events around the Marikana massacre. The ANC remains in power but is deeply discredited in the eyes of black workers. The rival political parties are either seen as vestiges of white rule or vehicles of tribalism, so they are not a serious alternative. There is a huge political vacuum to the left of the ANC. The workers have been vainly waiting for improvement since 1994. Frustration with the government is at boiling point.

Because of the militant history of the South African working class, the country has a relatively high level of trade unionisation. The unions have more than 3 million members, 25% of the work force. We should not underestimate the problems of effective organisation. Unemployment in South Africa stands at 25%. Casualisation has increased under GEAR to 30% of the labour force. This makes stable trade unions difficult to build and maintain.

The mining industry is a case in point. The longstanding NUM members have been pushed by the influence of the ANC to co-operate with the mine owners. This means that workers’ representatives such as shop stewards operate out of air-conditioned offices instead of working underground. Other longstanding union members have become supervisors instead of being directly involved in mining. The NUM has progressively lost contact with the workers it is supposed to represent and is in danger of becoming a privileged elite among the miners.

This contrasts sharply with the lives of the Rock Drill Operators (RDOs). They work in temperatures of more than 40 degrees Celsius using powerful vibrating drills to break up the rocks for platinum. The RDO workers at Marikana and in the rest of the industry are for the most part migrants. They have come to resent the cushy lives of the NUM officials.

Progressively this layer of migrant workers has come to feel itself without representation or support. The NUM is seen by many as a tool of the mine owners. The recent movement in the mining industry also articulates the anger of the black working class at the betrayals of the ANC leadership over many years. This wave of anger has been expressed in a spontaneous fashion at Marikana platinum mine, a wave that has since spread throughout the mining industry and on to the farm workers who have been reported burning vines in their anger.

10,000 workers resigned from the NUM and joined the independent union AMCU. AMCU was merely the rod of the workers’ militancy. The massacre at Marikana was shocking. At least 34 workers were gunned down by a police force accountable to an ANC Minister, in scenes reminiscent of the worst of apartheid era massacres. The forces of the state colluded with the bosses against the workers, exactly as they had done under apartheid. Cyril Ramaphosa denounced the workers’ action around the strike as “dastardly criminal actions” on behalf of mine owners Lonmin, and called for further repression against the strikers.

It remains to be seen whether the wholesale discrediting of the ANC-COSATU-SACP alliance will finally be achieved by these terrible events. The problem, of course, is that no serious political alternative has yet emerged. The outburst in Marikana was basically a spontaneous outburst of frustration and anger. COSATU has in the past toyed with the idea of a South African Labour Party independent of the ANC. That has become more necessary than ever.

Discontent was bound to be articulated through the ANC at some point. The frustration and anger of black workers with the ANC government was articulated by Julius Malema, former leader of the youth wing of the ANC, who called for the nationalisation of the mines. In so doing he has in effect challenged the rule of President Jacob Zuma. The ANC leadership expelled him straight away (their usual way of dealing with political debate). He went on to support the striking miners and those whose homes were being bulldozed by order of the government. He remains enormously popular and a potential focus of opposition to the ANC government.

Asia

India 

China’s present rapid industrialisation was prepared by the 1949 Revolution which led to the abolition of landlordism and capitalism. By contrast India has seen no thoroughgoing land reform since independence. Pockets of extreme poverty and backwardness still exist in the Chinese countryside, of course. Mostly they have been gobbled up by the rapid industrialisation that has offered the opportunity of a new and better life to hundreds of millions of Chinese peasants.

Evidence of India’s failing is provided by the Naxalite rising, where landless peasants armed with bows and arrows fight medieval style landlords. The Naxalite insurrection has dragged on for thirty years and claimed thousands of lives. There is no prospect that the Maoist guerrillas will overthrow Indian capitalism, but the rebellion is likely to remain a thorn in the side of the state for years to come. Its main significance is to challenge the view that India is modernising and adapting to the requirements of global capitalism. Though that may be the government’s intention, the situation in the countryside reveals the backwardness, lack of infrastructure and other obstacles to capitalist modernisation that still exist. 

The recent electoral defeats of the working class in Kerala and West Bengal have produced a trumpeting of capitalist triumphalism in India. This is completely premature. An objective balance sheet reveals the failure of capitalism in India. More than half the population is still dependent on farming and the land for work. Agricultural productivity is very low. Peasants labour on dwarf plots, incapable of taking advantage of new techniques. That would need bigger fields and organised co-operation among the peasantry to implement effectively. Seldom are the peasants outright owners. As sharecroppers they have to give up the fruits of much of their labour to an idle landlord class. They are often squeezed by moneylenders as well, and by the suppliers of inputs such as fertilisers. The villages can be very isolated. 

A majority of the population, 600m Indians, have no access to mains electricity. Thoroughgoing land reform and a helping hand from a workers’ state in command in the cities is an absolute precondition for modernisation and the elimination of rural poverty in India.

The picture of Indian industrialisation has been compared by economists to the construction of cathedrals in the desert. There are undoubted patches of modernity. The prevailing backwardness in the countryside means that the islands of prosperity cannot percolate out to the rest of the nation.

There is a significant layer of educated English-speaking young people who are being snapped up into performing outsourced business services – accountancy, routine legal services such as conveyancing and the like, and staffing call centres to serve the imperialist countries. It is impossible that these activities can provide employment and a way forward for a country of more than a billion people.

Indian manufacturing is still protected. It serves a big home market but is not generally competitive globally. In the years after independence Congress attempted a policy of import substituting industrialisation, of independent capitalist development. Inevitably this meant the state allocating resources through awarding licences. This was known as the ‘Licence Raj’, giving favoured business people assured markets and profits. Thus there was a close symbiotic relationship between capitalists and the state from the early years of independence. 

The later period since 1991 associated with Manmohan Singh as Finance Minister and later as Prime Minister has been seen as one of economic liberalisation. The constraints of the earlier period were abandoned. This does not mean that the bonds between business and the state were cut. The ‘Licence Raj’ was replaced by the ‘Resource Raj’, where the state dished out the right to loot India’s natural resources to favoured capitalists. Political influence (and therefore endemic corruption) has been the most important requirement of successful business practice ever since independence. The rich are known as bollygarchs.

Though Indian growth has been high over the past decade, it is slowing down sharply. The economy is due to grow at 5.3% compared with 9% in recent years past. Though this growth figure sounds adequate, it is by no means sufficient to meet the urgent needs of India’s poor. Warning signals are all around. India has a current account deficit of 4%. That means it is importing more than it exports to the equivalent of 4% of national income. This is despite the fall of the Rupee, which should make Indian exports cheaper and imports more expensive. The government has an enormous budget deficit. Inflation is at 7%. Interest rates have also followed suit, rising to 8%, so helping to choke off investment. 

As the economy slows, the relationship between the political leaders and big business seems to be breaking down. The infrastructure is crumbling, if it exists at all. Earlier in 2012 600 million people suffered electricity blackouts. Power generation is at crisis point. Yet infrastructure projects are in limbo. Substantial sections of the capitalist class, led by billionaire Lakshmi Mittal, are threatening to take their money out of the country. The cosy accord between business and the state has been shattered. Millionaires are in revolt against the Indian capitalist state.

All this is a sign of hard times to come. Can the labour movement take advantage of these divisions within the ruling class? Of far more significance to the workers’ movement internationally than the Naxalite insurgency is the loss of power by the Communist Party of India (Marxist) in the working class power base in West Bengal in elections in 2011. The victory of the right can be seen as a serious defeat for the workers’ movement. The CPI (M) owed their long rule to the popularity of their initial policy of land reform. It is ironic that they were eventually voted out in part because they conducted land grabs on behalf of capitalist interests. 

All the same the Party still claims hundreds of thousands of members nationally. Now it is in crisis. The traditional Stalinist parties have not represented and defended the interests of the working class. They have shown themselves to be irrelevant and are in danger of becoming marginalised. A longstanding fortress of labour movement strength has apparently been destroyed. It was destroyed because of the rottenness of Stalinism. 

As we have seen, Stalinist parties no longer exercise their malign influence in the labour movement of the advanced capitalist countries. Now they are in headlong retreat in the less developed world as well. In part this is because of the collapse of most of the Stalinist states after 1989.There are pockets of Maoists in India, Nepal and elsewhere. Though China continues to prosper as a deformed workers’ state, the leadership of the Chinese Communist Party (CCP) has no serious followers in the labour movement in the rest of the world. The collapse of the Stalinist tradition is a historic opportunity for the forces of Trotskyism.

China

China remains a deformed workers’ state. Its growth rate has been the highest in the world for more than thirty years. From 2007 to 2011 the advanced capitalist countries have backwards. In the same period China grew by more than 42%.

China is not a socialist country, nor is it capitalist. It has features of both modes of production. Marx and Engels insisted that a long period of transition was required before a post-capitalist society could be regarded as socialist, let alone communist. They were assuming that socialist revolutions would occur first in the advanced capitalist countries. It was a truth generally recognised by Marxists that Russia in 1917 was not ready on its own for socialism. The only hope of the Russian revolutionaries was to hang on for a revolution in an advanced country such as Germany. What was true for Russia was still more the case for China in 1949.

A period of transition towards socialism was needed for two reasons. The first was that the productive forces were too undeveloped to sustain a society of relative abundance. “This development of the productive forces...is an absolutely necessary practical premise because without it privation, want is merely made general, and with want the struggle for necessities would begin again, and all the old filthy business would necessarily be restored.” (German Ideology)

The second reason is that only the revolutionary working class has the maturity and experience to run a socialist society. Yet in Russia in 1917 and China in 1949 the working class was a tiny minority of the population. It needed to grow and develop into the status of a ruling class with the growth of state owned industry. 

In China the working class did not even play a leading role in the overthrow of capitalism and landlordism. The Chinese revolution took the form of a peasant war. In 1949 the vast majority of China’s people were peasants. The peasantry is a petty bourgeois class in Marx’s sense. Under capitalism the bosses own the means of production and the working class has no alternative but to work for them. The peasants both work and own their own plot of land. They are likely to be mortally hostile to forced collectivisation, to the expropriation of their property. 

The alternative to forced collectivisation in order to feed the towns is to trade industrial goods produced by the state sector for food and other farm goods. That means a transitional economy will retain some market relations for a indefinitely long period. This poses the danger of a restoration of capitalism. The workers’ government must therefore strive to build up the state sector and progressively reduce the influence of market forces. 

In China the state sector is dominant in industry. Unlike Russia there has been no massive privatisation. Most private firms are either foreign owned, operating in China under licence, or very small start ups by Chinese small business people. The major banks are all state owned. Three quarters of the investment directed by the banks goes to State Owned Enterprises (SOEs). In this way the banks, under the control of the state, actually direct the dynamics and direction of investment. The commanding heights of the economy remain in state hands. As a result China exhibits a completely different dynamic from capitalist countries.

China has some of the features of capitalism, and some features which are incompatible with capitalism. It is an economy in suspended transition. Since it is ruled by a bureaucracy that guards its own interests, it will not make the transition to socialism without a political revolution led by the working class to overthrow the bureaucracy.

China’s explosive growth has lifted hundreds of millions of Chinese out of poverty. The fact is that China is developing the productive forces faster than capitalism can because the commanding heights of the economy are publicly owned, because the economy is planned and because it has broken with capitalism. This should be an inspiration to the wretched of the earth, despite the oppression of the masses by the ruling bureaucracy represented by the Chinese Communist Party. As long as the productive forces continue to develop, and workers and peasants get some of the benefits, then the regime is likely to survive despite tens of thousands of rebellions that we know are taking place against injustices by local functionaries.

Because of the sheer size and gravitational pull of China, which is a densely populated country with access to few natural resources, trade with China has provided a fillip for countries in the Far East and as far away as Africa. Part of the current prosperity of countries like Indonesia is attributable to the fact that they act as raw material suppliers (mainly of coal and palm oil in Indonesia’s case) to the Chinese economy.

Despite the sensational events surrounding the downfall of Bo Xilai, the bureaucracy has made a smooth transition to a new generation of leaders. Bo was a maverick and not, as some commentators tried to suggest, the chief representative of the left wing of the CCP. His elimination did not mark a turn to the right. There is no sign of a move to capitalist counter-revolution from the top in China so far. State ownership and control of the economy remain on course and are likely to remain so while the country continues to boom.

Conclusion

Since the onset of the Great Recession of 2008 we have entered a new era. The period of the post-War boom of 1948-73 was a unique time of prosperity and relative class peace. This ended with the first general post-War crisis of capitalism in 1973-4. 

The 1973-74 slump ushered in a new era. This began as a stormy period of potentially revolutionary clashes between the classes. The ruling class rearmed. The election of Margaret Thatcher in Britain in 1979 and of Ronald Reagan in the USA marked the turn to an aggressive class struggle by the capitalist class, as recognition of the new situation confronting their system. 

Reagan, in what was virtually his first act as President, sacked the entire cohort of striking air traffic controllers. The leaders of their union PATCO were paraded on television in leg manacles. Later Thatcher took on the British miners and, after a one year long strike, destroyed the union and the coal industry. The miners were regarded as the ‘brigade of guards’ of the British labour movement. Their defeat inaugurated years of further defeats and relative industrial quiescence. It was a period of ruling class onslaught and widespread fear at the workplace. In both Britain and the USA trade union membership fell significantly from its peak in the later 1970s.

Eventually the ruling class turned the tide back in one country after another, inflicting serious defeats on the working class in Italy and other countries as well. We saw the apparent triumph of a rampant neoliberal ideology, representing the interests of a ruling class which saw no obstacles to its unfettered rule. They thought for a time that they could crush the working class like a steamroller. This capitalist triumphalism received a further boost with the collapse of Russian Stalinism and its satellite states in Eastern Europe after 1989. Capitalism seemed to be the only game in town.

Capital was celebrating its orgies. Wave upon wave of speculation and swindling greeted the new millennium. This was actually a sign of the sickness of contemporary capitalism, and not of its strength.

Rather than investing and developing the productive forces now money could apparently be made more easily by trading in fancy pieces of coloured paper with exotic names like Collateralised Debt Obligations (CDOs). Did it matter that the speculators didn’t know how or why these pieces of paper seemed to charm money into their palms? They had come to believe in magic!

It couldn’t last. Capitalism is based upon the extraction of unpaid labour from the working class. Speculation is just the froth on the top. When the profit-making machine began to falter we saw a colossal crash. The whole mass of what Marx called fictitious capital generated in the speculative boom proved to be just that – fictitious. It disappeared in a puff of smoke. The period following the post-War boom has been called the neoliberal age. That age is now at an end, the victim of its own illusions and fantasies.

We are entering a new period. What will be its main characteristics? History does not repeat itself exactly. As Hegel observed every historic period is unique. We know that it is likely to be a deflationary age, and that workers’ rage is building up against the never-ending austerity. The period that opened up after 2008 will at some stage initiate a new cycle of class struggle. This will pose revolutionary possibilities.

There are parallels of the era opening up with earlier stages in capitalist development. We have characterised the crisis ushered in by the Great Recession that began in 2008 as a ‘Great Depression’ downturn, much more serious than the normal, inevitable cycles of boom and slump that are an eternal feature of capitalist development. Two such earlier periods are the Great Depression of the 1930s, and another era, also called the Great Depression, in 1873-96. 

Much less is known about the economic characteristics of the nineteenth century Great Depression than about the 1930s. Economic statistics were much less developed at this time. It seems to have been a period of falling prices as well as economic gloom. In other words it was a deflationary time, as was the 1930s Depression.

We are not mainly concerned with the pure economic processes in these periods. Much more important to us is the way these forces impacted upon consciousness and the class struggle. The links between economic developments and political radicalisation are far from straightforward, but they exist. The 1873-96 Depression was a difficult period for the working class. But it was a time when the workers overcame these difficulties and, after a pause, built up mass organisations to defend themselves and advance their interests. During this time mass social democratic, nominally Marxist, parties were built in the countries of continental Europe. The German Party was the model. It built an apparatus with hundreds of papers, thousands of full timers, hundreds of thousands of members and millions of voters. Wherever capitalism took root (and it was developing rapidly, despite mass unemployment), the working class emerged and working class institutions were created. These institutions were trade unions and Marxist working class parties.

This did not happen in Britain, but the labour movement made great steps forward. The British workers shook off what Engels called “their forty years’ sleep” and built lasting trade unions for the mass of unskilled workers for the first time. These unions were forged in gigantic strikes on London docks, in the East End gas works and elsewhere. Often they were led by Marxists. In America too there were massive struggles for the 8 hour day and bitterly fought industrial disputes all over the USA.

It may seem to be a paradox; the nineteenth century Great Depression forced the working class into radical action, despite the difficulties in organising. It was a period when the labour movement went ahead with giant strides.

This was also the case, after a delay, in the Great Depression of the 1930s. The mass unemployment of 1929-33 did not produce conditions conducive to campaigning to build the trade unions. But a slight economic upturn after 1934 gave the workers their opportunity. The industrial unions of the Congress of Industrial Organisations (CIO), organised in mass assembly plants in crucial industries like autos, were created out of the magnificent workers’ struggles, including a wave of factory occupations, in the 1930s. There were even significant moves towards the creation of a US labour party at this time, but these were cut across by the prosperity created by the Second World War.

What will the conditions created by the new era we are entering into bring? We cannot predict the future but we can be confident that the working class around the world will not allow itself to be crushed. The hardships of the present provide unprecedented opportunities for the future. Workers will fight back because they have no choice. What seems at present isolated shafts of light in the form of struggles within the overall gloom of austerity will become a general movement of the working class that will shake the world.

Mick Brooks
11 January 2013

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