International Political and Economic Perspectives
The international situation is marked by increasing instability, friction and open conflicts between states. The rise of China to the status of a Great Power, once heralded as a stabilising factor in a new globalised economy, has actually created greater global instability, restructuring both production and trade, stimulating some economies and stultifying others. While the last century has rarely seen any period when there were no wars anywhere, 2015 was the first year in decades in which essentially local disputes such as in Ukraine, Syria and Yemen, drew in the Great Powers and threatened to escalate into military confrontations between them.
The Syrian Civil War has reached a scale of destruction and danger to world peace comparable to that in the former Yugoslavia in the 1990s, Spain in the 1930s or the Balkan Wars 1912-14. Moreover, conflicts such as those in Syria and Ukraine inevitably have repercussions far beyond their frontiers; millions flee their homelands to seek refuge thousands of miles away and trade is disrupted for states not directly involved.
At the same time, new trading blocs such as the Trans-Pacific Partnership, TPP, dominated by the USA, the Regional Comprehensive Economic Partnership, RCEP, dominated by China, and the proposed Transatlantic Trade and Investment Partnership, TTIP, again dominated by the USA, are clearly designed to exclude dominant partners' principal rivals, thereby laying the foundations for future friction. The developing trading blocs give a geographical expression to the zones of greatest conflict; revealing, as it were, the fault lines along which the Great Powers and their subaltern states grate and grind against each other.
These blocs are not yet fully formed or consolidated, political and strategic alliances can still shift, but the forces driving them are fundamentally economic. Underlying all else is the general trend of the profit rate to be lower after each cycle in all the imperialist powers, above all the USA, a trend that can be traced back to the Seventies. Linked to this is an expansion of fixed capital stocks and demands on finance in every investment cycle that are more and more difficult to fund from the more slowly growing mass of profit. This over-accumulation of capital is what Marx was alluding to when he said, “The true barrier to capitalist production is capital itself” and it can only be resolved by a massive destruction of capital. As with earlier crises, the policy response to 2008 was to prevent the bankruptcies that would have gone some way to achieving such destruction, on this occasion the banks that were “too big to fail”.
The policies adopted to deal with the crisis in the major economies, such as lower interest rates, government investment, Quantitative Easing and cuts in social expenditure, not only did not resolve the underlying problem but in some respects have compounded it. Funds flowed into speculation, mergers and acquisitions, rather than into productive investment, cuts in spending lowered consumption, lower taxes on high incomes increased social divisions.
At the same time, the longer term effects of the division of the world between a small number of Great Powers and the overwhelming majority of states, containing most of humanity, continue to take their toll. Particularly in Africa, millions are condemned to hunger, disease and poverty as their countries are stripped of resources to feed the economies of the imperialist powers. As the continent becomes a cockpit, fought over by the imperialists or their agents, there has been an increase in the number of regimes resorting to bonapartist and authoritarian measures, even in formally democratic states.
Lastly, looming over the whole world is what can now be seen to be the longest trend of them all, global warming. Just as the years before the two world wars were marked by the Great Powers holding peace conferences whilst they finalised their plans for war, so, now, we see climate change conferences and declarations while the corporations and their states finalise their plans to extend hydrocarbon extraction in regions only made accessible by climate change.
None of these developments, however, takes place in a vacuum. All of them generate responses within societies and recent years have also seen sometimes spectacular opposition movements that have given at least a glimpse of the social forces that could be mobilised against not only the particular phenomena but also the system that breeds them.
Many apparently firmly established political parties and leaders have suffered dramatic losses of popular support; from Mahinda Rajapaksa in Sri Lanka on the right to Nicolas Maduro, Cristina Kirchner-Fernandez and Dilma Rousseff on the left. The same was true of the Indian National Congress in 2014, when it suffered its worst ever electoral defeat at the hands of Narendra Modi and the Hindu chauvinist BJP. The rise of Bernie Sanders and Donald Trump in the USA, the success of Marine Le Pen in France, Pablo Iglesias and Podemos in Spain, the victory of Jeremy Corbyn in the UK Labour Party, all testify to a powerful surge of popular discontent with the established order from both ends of the political spectrum.
Like the attempts of capitalist governments to resolve the crisis of their own system, however, the oppositionist movements adopted tactics and policies that were completely inadequate to the task. In assessing the current situation and, on that basis, developing their own programme, strategies and tactics, revolutionaries, therefore, have to lay bare the dynamics of both the economic and political forces and the key errors of the oppositionist movements to date.
The economic underpinning
The impact of the 2008 financial crisis on world trade ensured a high degree of synchronisation of the recession that followed it. However, “local” factors then came to the fore in determining the policies adopted to deal with the recession in different countries. This ensured that there were different patterns of recovery in different parts of the world. Each of these policies, in time, proved to be insufficient to sustain growth, even where they did, for a while, allow it.
The USA, still by far the largest economy, has seen a combination of recessions and faltering recovery that meant pre-crisis levels of production were only regained in 2015. The policy of Quantitative Easing, initially adopted as part of the recapitalisation of the banks that were “too big to fail”, was extended, year after year, because the economy failed to respond as expected. Few of the billions of dollars pumped into the system went to renovation of industrial capacity, most fuelled a speculative boom on the stock exchange or financed mergers and acquisitions, creating a greater concentration of capital. By 2015, the nominal value of shares on the New York Stock Exchange was some three times that of 2007, and the Shiller Price:Earning Ratio for the S&P 500, which measures share prices against longer term productivity of the underlying values, stood at 27. This indicator was above 25 in 1929, 1999 and 2007, three dates whose significance in financial history needs no further comment, indicating, alongside many other indicators, that the financial markets have once again entered a period of high risks.
That is not to say that there has been absolutely no investment in productive capacity, clearly there has. The development of new industries such as shale oil and gas extraction, renewable energy sources and wholly new technologies, together with some re-equipping of existing industry, such as car and truck plants, has taken place and does generate profits. Nonetheless, in comparison to the scale of the economy, such developments are, for now, peripheral. Across the economy as a whole, the lack of investment in new plant is reflected in figures for growth in productivity before and after the crisis; between 1991 and 2008, growth averaged 2.3 percent per annum, between 2011, that is, after the initial impact of the crisis had passed, and 2014, by which time a cyclical recovery would normally be in full swing, it grew by just 0.5 percent per annum.
China, the world's second largest economy, faces altogether different problems, rooted in the domestic economy but with profound international implications. Having grown into a world power through its exports, the dramatic decline in world trade after 2008 threatened Beijing with both economic and political disorder. The response was an emergency stimulus package intended to develop the economy away from the coastal provinces and to stimulate domestic consumption.
The $400 billion stimulus certainly restored GDP growth rates with huge investments in infrastructure and new industrial capacity. However, by 2014, this boom was coming to an end and, as even official growth rates began to slow, it became clear that the stimulus had exacerbated underlying weaknesses in the Chinese economy.
In practice, state owned enterprises had borrowed at low interest rates from state banks to finance projects that often either duplicated existing assets or were simply not viable as going concerns. Since that means the loans will never be repaid, this is a threat to the viability of the banks themselves. Moreover, during the boom, China's “shadow banks” also provided loans, mainly to private investors or companies eager to profit from the frenzied economic activity. Any downturn carries the threat of companies being unable to repay and consequent banking failures because there is no state backing for these banks. Both aspects of China's banking system, therefore, represent financial crises in waiting.
China's new leaders, Xi Jinping and Li Keqiang, who only came to power after a protracted factional struggle within the CCP, have no choice but to cut the Gordian knot that ties the state banks and the state owned industries together. This, however, poses huge political problems because the rope that joins them is the Communist Party itself.
Xi's strategy is to expose state banks to a degree of competition from foreign banks now permitted to accept deposits and advance loans within limited “free trade zones”. In this way, he hopes to force banks to rationalise their own operations and to impose strict commercial principles on their dealings with the state owned sector. Thus, “market forces” will begin to determine the winners and losers throughout the economy.
Domestically, then, the scene is set for a bout of rationalisation. Beijing no doubt intends to proceed incrementally, as it has with past changes in policy. However, even the CCP's leaders are not all powerful and the cyclical downturn could unleash forces that will not easily be controlled.
Across the East China Sea lies the third biggest economy, Japan. In late 2015, it was in its fifth recession since 2009 and this alone makes clear the scale of its problems. Since the beginning of his second term as PM in late 2012, Shinzo Abe has resorted to a range of measures to overcome long term deflation and a stagnant economy. “Abenomics” consisted, essentially, of devaluing the yen by introducing negative interest rates and an increase in government spending.
Within 6 months, the yen had dropped by 25 per cent against the US dollar and the annual GDP growth rate was 3.5 per cent, but this could not be sustained. Devaluation raised the price of imports and, after the 2011 tsunami and the closure of nuclear power stations, Japan had to import more fossil fuels. In addition, to offset government debt, in 2014, the consumption tax was raised from 5 to 8 percent and this had an impact on consumer spending and the GDP growth rate fell to -6.9 percent on an annualised basis.
The European Union, EU, has experienced a series of major shocks; the threatened collapse of the banking system, the sovereign debt crisis of its weaker members, a possible permanent disintegration of the Schengen area when faced by many states' refusal to admit refugees, and the threat of a British exit. If the EU were a single economic entity, it would be the biggest in the world but, in reality, it is 28 national economies and the differences between them are threatening to disintegrate those elements of coordination that have been developed.
From the beginning, the EU was dominated by an alliance between two imperialist powers, Germany and France, who ruled via the EU bureaucracy and, since its introduction, the euro, a currency modelled on the Deutschmark and regulated by the ECB, itself modelled on the Bundesbank. Despite decades of collaboration and even some examples of fusion between German and French capital, as with aerospace and chemicals, these two remain separate nation states with their own interests. Today, German capital dominates all continental European markets, the trade surplus with France varies between 25 and 35 billion Euro every year.
A further disruptive factor is the role of the UK, still a powerful financial force but not a member of the Eurozone. While the UK played a leading role in the expansion of the EU into Eastern and Central Europe, it opposes the aspiration to “ever greater union” of economies in the EU, recognising that as a euphemism for greater German control. These tensions between the biggest nations express the two potential directions for the future of the EU: increasing integration under German dominance, which would reduce the bourgeoisies of smaller countries to little more than compradors, or division into two or more blocs, each behind one of the leading nations, thus ending Europe as a potential world player.
The strategic imperative to unite Europe so that it could compete with the US and China, encapsulated in the “Lisbon Agenda”, was dealt a serious, probably fatal, blow in 2004-5 by the failure to adopt the proposed European Constitution which would have created the necessary institutional framework for achieving the first of these options. The forces that could bring about the second can already be seen on the right wing of several countries and in the decision of the UK to hold a referendum on continued membership of the EU.
In the immediate aftermath of the 2008-9 crisis, it appeared that much of the EU had escaped its impact, largely as a result of the strength of the German economy in which profits had been boosted by the neo-liberal reforms of the Schroeder government before the crisis. However, this soon proved to be a fool's paradise, especially for Portugal, Ireland, Italy, Greece and Spain, the PIIGS, as they were derogatorily called. These countries were forced, via the mechanism of the euro, to accept austerity packages in return for EU bail outs of bankrupt institutions.
The immediate result was that millions of workers lost their jobs. The unemployment rate in southern and eastern Europe has been between 20 and 25 per cent since 2009 and for youth it has been as high as 40 per cent in many countries. In the EU as a whole, one quarter of the total population lives in poverty. In Southern and Eastern Europe the proportion is more than 30 per cent while Bulgaria, with nearly 50 per cent, represents the deepest social distress. Total unemployment in the EU is nearly 30 million with 20 million of those in the Euro zone.
Until the Ukraine crisis, Russian imperialism appeared to have re-stabilised itself economically under the bonapartist regime of Putin. Geo-politically, it was trying to contain any further losses of influence to the US while developing a “strategic partnership” with the European powers, particularly Germany. Nonetheless, Russia's military power, its global political role and the concentration of power within Putin's regime cannot hide the fact that, economically, it is the weakest of all the imperialist powers.
A large part of its foreign exchange income depends directly on the export of raw materials for energy production. In 2013, it was 71.2 per cent. The economic crisis has hit Russia hard, the inflation rate is soaring and the crisis is spreading despite economic intervention by the government. Only the dictatorial concentration of power in the Putin-system, Russian-nationalist demagogy, and the political and organisational weakness of the opposition, especially the workers' movement, have so far prevented massive protests against imposing the costs of the crisis on the masses of the population.
Among the most important regional powers, such as Brazil, India, Australia and South Africa, the period since the crisis has brought very mixed fortunes. For several years, both Australia and Brazil prospered, Australia avoided a recession altogether and Brazil reached annual growth rates as high as 8 per cent. However, the secret of this success was, in both cases, the huge demand for raw materials, energy and foodstuffs from China as the stimulus package there took effect. The slowing of the Chinese economy and, for Brazil, the drop in the price of oil, rapidly reversed the situation so that Brazil entered a deep recession in 2015 with GDP down 3.7 per cent and a predicted continued contraction of another 3 per cent in 2016.
Falling energy and mineral prices also took their toll on South Africa with giant mining corporations like Glencore and Anglo-American cancelling planned investments and closing existing operations.
Increasing inter-imperialist rivalry
It is against this economic background that the Great Powers have developed their strategies for the coming decades. For each of them, whatever the immediate priorities at home, the crucial consideration is the maximisation of its global reach.
True to form, the first priority for US imperialism is not the wholesale renewal of its industry on a qualitatively higher technical basis. That would require the destruction of existing capital assets on an almost unimaginable scale. US capital long ago ceased to rely primarily on its industry, which now accounts for only some 15 percent of the economy in GDP terms. For the dominant fraction of US capital, finance, the way forward is to take full advantage of its global dominance to squeeze yet more profit from other countries.
That is the purpose of TPP and TTIP. Although much of the content of the proposed treaties remains secret, they are known to contain provisions that systematically outlaw any legal, constitutional or economic provisions that might prove disadvantageous for US companies seeking to enter a foreign market. Thus, for example, state provision of services in health or education, let alone state ownership of industry, would be open to the challenge of unfair competition by US corporations, and those challenges would be pursued not in courts of law but in tribunals dominated by corporate interests.
In China, Xi's strategy, is not limited to reforms of banking and state owned industry, he has also laid out plans for, quite literally, re-ordering the global economy. These are summed up in the four character slogan, “One Belt, One Road” or OBOR. The “belt” is the sea passage from China to East Africa, via South East Asia and the Indian Ocean, while the “road” is the collective term for the overland routes from China to Europe, with connections to the Bay of Bengal, the Andaman Sea, the Malaysian Peninsular, the Arabian Gulf, the Black Sea, the Baltic Sea and the North Sea.
Although this is a plan for many decades, some elements are already taking shape; rail links to Germany, Spain and Iran are already operating, albeit at low capacity, the new port and free trade zone of Gwadar, in Pakistan, has already been handed over to the Chinese company that will operate it; according to Fitch, the ratings agency, China's Development Bank had already made loans of US$125.9 billion to OBOR projects by the end of 2014, and has plans to fund a further 900 projects with US$800 billion of investment. On top of that, a consortium of Chinese commercial banks, including Bank of China, China Construction Bank and China Citic Bank, have also planned a combined US$198 billion of new lending for OBOR projects.
This is the context in which to understand not only China's promotion of the Asian Infrastructure Development Bank, AIIB, which excludes the US but now has the support of 57 countries including major US allies such as the UK and Germany, but also the Shanghai Cooperation Council, the New Development Bank and the Regional Comprehensive Economic Partnership.
What OBOR makes clear is that Lenin's observation that a new imperialist power would be forced to seek the re-division of the world is not limited to the re-alignment of existing economic resources but can include the creation of entirely new centres of production and novel economic relations. What remains the same is the inevitability of rivalry and conflict between a rising power and the existing powers and it is the accentuation of this that we should anticipate as a result of China's expansion.
Although only officially announced in 2014, China's strategic plan was clearly in development for many years and was not unknown to other powers. It throws light on policy developments in Europe, particularly Germany's budding economic cooperation with Russia, which has been seriously set back by developments in Ukraine, and the UK's decision to seek Chinese capital investment even in the security sensitive area of nuclear power generation.
Nor has it gone unnoticed in Washington. Obama's “Pivot to the Pacific” is quite blatantly aimed at containing Chinese expansion and, if possible, interdicting the “belt” from coastal China to Africa. The revelation of Beijing's plans also makes sense of the belligerence of the US intervention in Ukraine and its insistence on establishing forward NATO bases in Eastern and Central Europe.
The development of such economic blocs is symptomatic of the predominant feature of the current period; growing inter-imperialist rivalry. Although the historically most important of these rivalries may be that between the USA and China, that is not at present the most likely source of conflict. The relative decline of US imperialism, revealed most clearly when it met its nemesis in Afghanistan and Iraq, has encouraged regional powers, once its gendarmes, to assert their own interests, sometimes even directly against the wishes of Washington.
To date, the most hideous results of this have been in Syria where the stalemate between the inadequately led and divided forces of the democratic revolution and the Assad regime created a power vacuum into which neighbouring powers; Saudi, Qatar, Turkey, Lebanon, Iran, Israel, then intervened. The resulting war not only killed at least 250,000 and forced millions to flee the country but also saw the emergence of the “Islamic State”, initially a product of the collapse of Iraq and funded from the Gulf, whose advance effectively wiped local state frontiers off the map. Such instability, which also drew in the Kurds of Iraq, Syria and Turkey, could not be ignored by the Great Powers whose attempt to control the situation via a UN mandate was simply a cover for their own self-interest.
Inevitably, the bloodbath in Syria had consequences far beyond that country's borders, and this, too, is characteristic of the period. With regard to inter-imperialist rivalry, it strengthened Russia's hand in another conflict that also threatened direct confrontation between Great Powers; Ukraine. There, a German-led EU intervention to remove President Yanukovych, after he refused a deal with the EU, and to replace him with an alternative who was pro-EU but willing to accept a compromise with Russia, was overridden by the US. By mobilising the extreme right wing of Ukrainian nationalism, including fascist militia, Washington got its wish, but also provoked a civil war in the East which drew in Russian support.
On the other side of Europe, French intervention in Syria was met by the ISIS bomb attack in Paris in November 2015, prompting the declaration of a State of Emergency. No doubt Paris was targeted, as it had been in the Charlie Hebdo attack, in retaliation not only for Syria but also for the rising Islamophobia in the country and other military interventions in Libya, Mali, Niger, Chad, Burkina Faso and the Ivory Coast.
More generally, as at the dawn of the imperialist epoch, there is a scramble for Africa, this time involving not only the European powers but also the USA and, sign of the times, China. Until recently, Beijing's involvement was confined to economic development, predominantly of infrastructure and mineral extraction, and collaboration with regimes whose human rights records, or anti-imperialist rhetoric, made them awkward partners for the Western imperialisms, often enough former colonial powers. Now, however, Chinese troops are stationed in Africa, as “peacekeepers” in Sudan.
This new “scramble for Africa”, already noted in our last perspectives, has gathered pace during the Great Recession and is set to continue as imperialist capital seeks profitable outlets for its over-accumulated capital. Different imperialist powers have opted for different investment strategies; China has for decades concentrated on infrastructural development, often paid for by guaranteed deliveries of minerals and energy supplies, while older-established imperialisms look for “greenfield” sites for production facilities. The biggest single source of such investment has been France in recent years with $18.5bn in 2014 while the US accounted for $8bn. The returns on such investments have been lucrative, between 2003 and 2012, some $528bn was repatriated to the metropolitan centres from Africa, the equivalent of 5.5 percent of the continent's GDP.
Finally, in South Africa, the economic crisis, precipitated by the collapse of mining and extractive industries, has led to the destabilisation of the ANC (and President Zuma in particular) and the breaking away from the Alliance and expulsion from Cosatu of the mineworkers' union, Numsa. Whether Numsa and/or the breakaway miners’ union, AMCU, can establish a workers' party and rally the working class round its banner will be key to future battles.
China's economic “belt”, running to East Africa, also has its strategic-military counterpart, the misleadingly named, “string of pearls”, that is, a series of naval facilities that will line the route to Africa and includes Sri Lanka and Pakistan as well as Burma. At its eastern end, in the South China Sea, Beijing has constructed artificial islands by building up the reefs of the Spratly and Paracel Islands, thereby challenging the neighbouring states of Indonesia, the Philippines, Vietnam and Malaysia, all of which are closer to the islands. The construction of bases on these islands, including airstrips, has already provoked the US Navy to sail close to assert the “freedom of the seas” - half a world away from its own coast.
Further north, in the East China Sea, a similar confrontation is taking place between China and Japan over ownership of the Diaoyu/Senkaku Islands. Here, confrontations have occurred between naval vessels and fishing boats, minor incidents in themselves but with the potential, in the right circumstances, to spark more serious conflicts. In this context, Shinzo Abe's invocation of the slogan of the Meiji Restoration, “fukoku kyohei”, “enrich the country, strengthen the army”, when presenting his economic programme and his proposals for removing the pacifist clauses from the Japanese Constitution, confirms this region as another potential flashpoint.
Across the Pacific, in what was once considered “America's backyard”, the “pink tide” of populist-socialist leaders such as Chavez in Venezuela, Lula da Silva in Brazil, Evo Morales in Bolivia and Rafael Correa in Ecuador, which rose and was sustained by rising commodity prices, is now clearly on the ebb as those prices collapse in the wake of the slowing global economy and, in particular, reduced demand from China. Now, Chavez' successor, Nicolas Maduro faces a hostile majority in parliament after the December 2015 elections, Dilma Rousseff, Lula's successor faces impeachment over charges of corruption and the neo-liberal Mauricio Macri has been elected president in Argentina, bringing to an end the left Peronist rule of Nestor Kirchner and then Cristina Fernandez de Kirchner.
All of these developments point to a potential restoration of US influence in the region. This is even true of the normalisation of relations with Cuba whose leadership has already opened the door to European capital and seems set on a restoration of capitalism modelled on the Chinese experience. Although increasingly flouted, the US embargo had become an obstacle to US capital in that process and its removal will allow, in the longer term, a strengthening of the restorationist forces and a disruption of the cooperation between Cuba and its erstwhile Latin American allies.
Since the re-election of Dilma Rousseff in Brazil, there has been an intense attempt by right wing bourgeois forces, using mass demonstrations against corruption and a massive campaign by the powerful TV network “Globo”, to overthrow the elected president and thereby remove the Workers' Party, PT, from power. This has been accompanied by harsh austerity legislation passed by the federal Congress in the context of the severe economic crisis. In response, a large social movement drawing in not only the trade unions but also the landless and homeless movements MST, MTST, signalling a heightened level of general class struggle in Brazil. After the detainment of Lula, a still wider counter-movement emerged against the reactionary mobilisation and the bourgeois attempt to construct a right-wing government of social attack. The outcome of this clash on the political and social level will be decisive in determining whether the rightwing trend in Latin America can be reversed or not.
For the period ahead, the Middle East remains the “powder keg”, comparable to the Balkans of the early 20th century, where clashes between Russia and Nato could explode with unimaginable consequences. Turkey and Saudi Arabia are not only aiding counterrevolutionary forces abroad, in Syria, Yemen and Libya, but are increasingly repressive at home. Indeed, this is a region where a powerful endogenous counterrevolution is still advancing; in Egypt, Bahrain, Libya, and Syria, trampling into the dust the gains of the Arab Spring of 2011. Such repression, and the massive destruction wrought by civil wars, may ensure an extended counterrevolutionary phase but the economic and social instability of the regimes will sooner or later create cracks and fissures through which the revolutionary fire will emerge, more serious and more dangerous than before.
The working class after the crisis
All developments within capitalism necessarily bring about changes in the working class, in terms of both its location and its structure. The last two decades have seen particularly big changes, most obviously because of the growth of capitalism in China but also in other parts of Asia and Latin America, most notably in Brazil. The important difference with China is that it has established itself as an imperialist power, not dependent on inflows of capital from abroad to sustain its own growth. This has already led to a degree of differentiation within the Chinese working class that could, in time, allow the development of a labour aristocracy.
One consequence of the shift of production to Asia has been a restructuring of the established working classes in the older imperialist countries of Europe and North America. This process was accelerated by the crisis that not only drove up unemployment, the ILO calculates an increase of 30 million, to 193 million, but also forced millions to accept greatly reduced working conditions and wages. Even in Germany, one of the stronger economies, 25 percent of the workforce is now reckoned to be in “precarious” employment.
Meanwhile, in the semi-colonial world, the hopelessness of rural life has driven millions into burgeoning mega-cities. For the first time ever, the urban population is now greater than the rural but the standard of living of wage workers there is often little different from that of paupers; 1.25 billion are believed to live on less than $1.25 per day and 447 million of them are in paid employment.
Migration, of course, is not only from countryside to town but also transnational. Workers driven from the semi-colonies to the imperialist metropolitan centres by poverty, often without legal status, are forced to accept super-exploitation and the denial of basic rights, as well as facing chauvinist and racist discrimination in every aspect of their lives.
Around the world, the working class has also been altered by the entry of increasing numbers of women into the workforce, again, often in the worst of working conditions and subject to all the extra disadvantages resulting from their family responsibilities. The wars in the Middle East and Africa, the flow of refugees across continents, seas and frontiers all massively increase the suffering of women and their families. The strengthening of reactionary salafist movements, the al-Qa'eda affiliates, Boko Haram, Lashkar-e-Taiba, the Pakistani and Afghan Taliban and, above all, ISIS, partly in response to the imperialist interventions and crisis of capitalism, has led to increasing numbers of attacks on women and women’s rights. Social crisis, counterrevolutionary, religious, or clerical regimes encourage or allow rapes and physical attacks as well as denial of women’s rights to education and social life and work outside the home.
Women working in the industries across Asia or Latin America often face terrible working conditions, some approaching outright slavery. Over the last five years, a number of factory fires on the Indian sub-continent, as well as the horrific collapse of the Rana Plaza factory building in Bangladesh, which killed more than 1,000 workers, testify to this. However, the women workers in the textile and garment industry have waged a number of courageous struggles. In Pakistan, home based women workers have begun to organise and in India there has been a major movement against rape and harassment of women on public transport. In short, the movements in defence of women’s rights have grown over the past period.
The development of capital, however, necessarily also brings about conditions that allow some strata of the working class, and not exclusively in the imperialist countries, to secure significantly better working conditions as a result of a combination of skill shortages, strategic economic positions and higher levels of trade union organisation.
This “aristocracy of labour”, which generally forms the social base of stable, often bureaucratised, unions and reformist parties, is itself subject to change. In recent decades, the restructuring of industry across the globe has completely removed whole industries, which were once the basis of labour aristocracies, from some countries. At the same time, technological advances have forced large numbers who were previously “wage earning middle strata” in the professions into the better paid ranks of the working class.
At a global level, the crisis did not reduce the size of the working class but, on the whole, it did force it into retreat, accepting lower wages, harsher working conditions and surrendering past gains in terms of rights and welfare. In the imperialist countries, and semi-colonies with already established working classes, this was the price paid by trade unions to an employing class which itself wanted to contain the crisis, rather than “let it do its work”. However, the policies used to contain it; bail outs, low interest rates, Quantitative Easing, have dramatically reduced the reserves available to deal with another crisis, signs of which are already visible in the form of speculative bubbles.
A very different picture is to be seen in China whose rapid capitalist development has created the biggest national working class in the world, indeed, in history. This class, although it has not yet won legal recognition of its rights, has generally been able to achieve a steady improvement in its conditions because of the continued expansion of production. It has not done this without frequent mass actions including strikes, occupations and blockades but, under the continued dictatorship of the CCP, it has not yet been able to form independent trade union or political organisations.
It is one of the more visible contradictions of capitalism that the crisis is marked by an enormously increased concentration of wealth in the hands of the top earners, leading to an ever greater gap between the rich and the poor. In particular, the over-accumulation of capital, with its lack of profitable possibilities for investment in the production of goods, leads to an increase in a parasitic capitalism in which more and more business is involved in securities transactions and property and financial speculation.
Today, the capital stock in the imperialist centres is, on average, more than six times the figure for GDP; in the 1950s it was only double. In the USA, for example, the richest 10 percent of society control 70 per cent of this wealth, and 35 percent of it is controlled by the richest one percent of the population. The bourgeoisie in imperialist countries now has financial resources on a scale never seen before, and it can use these flexibly and globally in its own interest. Over-accumulation, concentration of wealth and financial globalisation together undermine the political leverage of national states against the financial power of this class. As a result, the rich are paying less and less of their enormous wealth toward the financing of state affairs by paying less income and wealth tax. Any national state trying to stop this trend to less taxation will immediately be “punished by the financial markets” through exchange rate, currency, and interest rate turbulences or investment transfers.
In this way, national states are currently chronically under-financed. At the same time, there is a race to the bottom as states compete to offer the lowest taxation, best conditions for investment, and highly reduced labour costs. The debt crisis leads to privatisation in the industrial sector as well as in housing and in public services, creating further investment possibilities for the parasitic asset capital. It is one of the characteristic phenomena of the financial crisis, which began with speculation in precariously financed mortgages, that it has now ended up in an enormous increase of investment in real estate by the big owners of wealth.
This spiral of social and tax dumping, public debts, austerity, privatisation and further enrichment of the super rich is often called “neo-liberalism”. However that term might be understood, in effect it constitutes an action programme whose demands and slogans; privatisation, labour market deregulation, free markets, express the urgent needs of the decisive sections of big capital. Reformists and right wing centrists often present Keynesian programmes, which include progressive income and wealth taxation, relief for those on low incomes, public investment, stimulation of consumer spending and renationalisation of privatised supply companies, as a viable alternative to this within capitalism. This approach fails to understand the capital constraint of over-accumulation, the globalisation of capital power, and the change in the balance of power in favour of the most wealthy.
“Neoliberalism” is an expression of the “constraint” exerted by the “market forces” of big capital on the political puppets in the respective state apparatuses, whatever their party colouration. Whatever government holds office in a state it has to carry out “neoliberal” policies because of the capital constraint working behind its back. The experience with the Syriza-government in Greece should have made this clear but was not understood in its essence by large sections of the left. In present circumstances, a policy different from neoliberalism could only be implemented by a real seizure of power by the working class, that is, by socialisation of the conditions of production and reproduction of a country, within the context of an international revolution against global capital.
Left wing reformist economists like Piketty or Varoufakis declare that “breaking the logic of neo-liberalism” and achieving a successful management of the crisis would be possible through measures such as cancellation of debts, levies on wealth, progressive taxation of the income and wealth of big capital and a capital transfer tax. They argue that the rich are quite capable of paying for public debts, pensions, health service systems and redistributive taxation because “there is enough money”. Such reformism, however, not only avoids the crucial confrontation with capital at the national level but lacks any international political strategy to deal with the inevitable international response of capital.
Movements like Attac, Occupy and “We are the 99 per cent” are active internationally and often take radical forms of action but are unable to combine their sectoral demands with a revolutionary struggle for power in the sense of putting to the fore the question which class has to seize it. Of course, revolutionaries should also raise demands like cancellation of debts, expropriation of big wealth and progressive taxation, these are all elements of our programme, but only in combination with the struggle for workers' control, and in the framework of transitional demands which make clear that not even a “fair” distribution of wealth could be achieved within the scope of today’s management of crisis.
The policy of the established reformist parties, be they Socialist, Social Democratic or Labour, when faced with the onset of the most severe crisis since the war, was to do exactly what the bourgeoisie demanded of them. Those in power when the crisis hit, or who came to power as a result of it, took up the mantra of the “inevitability” of social austerity whilst bailing out banks and big corporations and attacking those sectors of workers who resisted. Major examples were the Labour government under Gordon Brown in the UK and, later, the Socialist Party of François Hollande in France. To some degree, they ensured that austerity, wage cuts and job losses did not hit their labour aristocratic bases, but at the same time they fostered the growth of insecure, part time and badly paid jobs (précarité) for a huge section of the workforce.
The trade unions in Greece, France, Italy and the USA, did mobilise large-scale protest marches and one-day strikes. In Greece, there were dozens of one or two-day actions in the 2009-2014 period and, since the Syriza government’s betrayal, they have begun again. Even in Britain, the TUC passed a motion threatening a general strike and a coalition of “left” unions called for a campaign of coordinated industrial action, but the days of action remained isolated acts of defiance.
Where “left” governments were in power, social democrats in Europe, populists in Latin America, Obama in the USA, the trade union bureaucracies ensured that they were not seriously embarrassed, let alone threatened with overthrow, by sustained and militant mobilisations. Meanwhile, the traditional left critics of the mainstream social democrats such as Die Linke, Izquierda Unida and what was left of Rifondazione Comunista in Italy, sought regional or national coalitions, which blunted their alternative to the mainstream reformists. In short, reformist political parties and trade union bureaucracies of all types, right and left, failed the challenge of the recession and acted to disorganise and dampen resistance rather than to lead it against an initially weakened and discredited capitalism.
In countries without such reformist parties, where unions were historically aligned either with one of the main bourgeois parties, as in the USA, or with more or less left nationalist or populist parties, the pattern has been fundamentally the same; identification with the interests of the capitalist class, or one wing of it, led to failure to defend working class interests and, as a result, a reduction in the size and influence of trade unionism as a social force. This has been the case, for example, in Venezuela and Argentina. The only major exception to this has been in South Africa where the unions have broken from their alliance with the ANC.
Where repressive regimes had previously meant that trade unions were clandestine or only semi-legal, the impact of the crisis created conditions in which they could grow dramatically and spearhead mass opposition that could even bring down governments. This was most dramatically demonstrated in Tunisia and then Egypt whose uprisings sparked the Arab Spring. However, even here, the political limitations of trade unionism meant that leadership of the mass movement was ceded to other class forces; the popular front in Tunisia, to Mursi and the Muslim Brotherhood in Egypt.
Elsewhere, the weakness of trade unions, the austerity politics of established reformist parties and the inevitable limitations of “spontaneous” mass movements led to the growth of parties that claimed to represent a new form of political organisation but were actually variants of left populism. Such parties as Podemos in Spain were also heavily influenced by the petty bourgeois ideology of the “middle class” layers who were also badly hit by the crisis. Echoing the Bolivarian regimes in Latin America that many took as their role model, these parties adopted a form of plebiscitary democracy for their own organisation resulting, inevitably, in the authoritarian rule of a small clique around the central leader.
As in the past, the failure of the working class organisations to advance a consistent anti-capitalist programme, coupled with the continuing inability of the dominant fractions of ruling classes to resolve the economic consequences of the crisis, has encouraged the growth of the extreme Right. This has taken many forms, from the Tea Party in the US Republicans and the UK Independence Party, UKIP, in the UK, to the Front National, FN, in France and the Freedom Party, FPÖ, in Austria and has included outright fascist parties such as Jobbik in Hungary and Golden Dawn in Greece. Although this has been most developed in Europe, where it has benefited not only from xenophobia against immigrants and refugees but also from popular discontent with austerity policies identified with the EU, the rise of Modi's Hindu-nationalist BJP in India shows that this phenomenon is not confined to that continent.
Even where such forces are not the chosen instruments of a ruling class, their growth can result in division, disorganisation and demoralisation within the working class and its organisations, thereby allowing enforcement of reactionary legislation and economic policies. The struggle against the Right, therefore, cannot limit itself to defence of past gains or democratic rights but must be integrated into a strategy aimed at the overthrow of the capitalist system itself.
Faced with the depth of the capitalist crisis and its social and political consequences, the forces of the radical and subjectively revolutionary Left, in reality centrist formations of one sort or another, have signally failed to provide an alternative source of working class leadership rooted in a consistent strategy for the overthrow of capitalism.
Centrally, this lay in their inability, with partial exceptions in Greece, Spain and France, to challenge the major reformist parties in terms of the electoral struggle. In the trade unions, their unwillingness to break with the bureaucracy meant that they failed to build powerful movements of the rank and file or to challenge bureaucratic leaders at critical moments when they aborted or betrayed the struggle when it objectively posed the question of power.
In Greece, this failure applied at both the trade union level, in the years of mass strikes and occupations, 2009-2014, and politically during Syriza’s rise to power, 2012-15. Here, the far left either stood aside from the massively empowered reformist party in passive propagandist isolation or participated in it as merely polite critics of the Tsipras leadership. For all the reformist strings that tied it to Greek bourgeois rule, Syriza was the tool that the mass protest movement against the Troika created on the political level and was as such under enormous pressure from below. A further move on in the confrontation with the bourgeoisie, together with a well-founded intervention by revolutionary forces, could have broken it up in a progressive way, laying the base for the formation of a revolutionary party and putting onto the agenda the formation of a true workers' government.
Clearly, this perspective is now over. From being a tool of the masses in the fight against austerity, Syriza has turned into a tool for implementing austerity. Like other social democratic formations, it is now voted for by the workers only as a party that mitigates austerity and that is not as corrupt as others, yet. Although there are still defensive struggles against single measures of the government and the EU, there is no longer any general political offensive against these attacks. The crushing of the revolutionary potential and the opening of the counter-revolutionary process by the betrayal of Syriza, therefore raises the very real possibility that an increasing disillusionment in Syriza will not necessarily strengthen the forces of social and left resistance, but will, in the medium term, open the way for a right-wing reactionary solution to the Greek crisis.
This pattern could be repeated in Spain, with Podemos. The party could force the Socialist Party, PSOE, to enter government with it on an anti-austerity basis. Alternatively, the PSOE could opt to help Mariano Rajoy, leader of Partido Popular, PP, to cling on to power. Either scenario would give Podemos the opportunity to benefit from the PSOE's inability to take decisive measures against capital. Just as Syriza was boosted by Pasok’s betrayal, Podemos could become a party able to win an election and take power. Should that happen, the outcome is likely to be similar to that in Greece unless there is a massive mobilisation by the working class in which the UGT and CCOO union leaders lose their grip on their members.
With regard to the struggle against both the established leaderships of mass reformist parties and unions and against the inadequacies of new leaderships thrown up by the resistance to austerity, the centrists have displayed three broad categories of error, from which the revolutionary movement must learn:
Abstentionism: this is a sectarian tradition which draws from the betrayals and weaknesses of existing mass organisations the conclusion that either organisation itself is to be opposed or that, despite their mass memberships, reformist parties or unions are no longer working class organisations in any respect. While apparently radical, this is a recipe for leaving those mass organisations under the leadership of pro-capitalist forces rather than fighting to dispel illusions in them and to win the rank and file to revolutionary politics.
Advocacy of “broad parties”; this is an opportunist response to the marginalisation of the revolutionary tradition. It results in proposals for new parties that embrace both reformist and revolutionary currents as the only “practicable” strategy at the present time and leads in practice to adaptation to left reformism and opposition to the adoption of clear revolutionary programmes. A variation on this, stemming from the Committee for a Workers' International, CWI, tradition, combines a sectarian abstention from involvement in existing social democratic parties, because they are bourgeoisified, with opportunist support for new parties on “broad” programmes.
Anti-capitalism: this is a more clearly centrist error which rejects open support for reformist programmes or parties but calls for all other currents to unite around limited programmes which are not explicitly and fully revolutionary. It is argued that adoption of a fully revolutionary strategy will only become possible as the result of common experience and the process of political intervention. Examples of this are the New Anticapitalist Party in France, Antarsya in Greece and, showing that this error is not confined to Europe, the Awami Workers' Party in Pakistan.
What this strategy ignores is that the battles against austerity and in defence of past gains, political as well as economic, have to be fought here and now and, if the correct, revolutionary methods and goals are not adopted, those battles will be lost and the class will be correspondingly set back.
Their small size and weak implantation in the working class vanguard obliges revolutionaries to seek to overcome this by working within these parties as a distinct revolutionary tendency or faction. In this, they need to combine loyalty to the democratic decisions of the majority vis-a vis action with a clear presentation of a revolutionary action programme and alternative leadership.
This was the tactic that Lenin advised for the British communists in the early 1920s and that Trotsky developed more generally in the 1930s. Like so much else of the Bolshevik and Trotskyist tradition, this tactic was subsequently distorted beyond recognition by their postwar followers either in an opportunist or a sectarian direction, but its correct application will be necessary time and again in the coming period. Above all, it must not be turned into a strategy in which revolutionaries, chameleon-like, take on the political colour of their hosts, waiting for an objective revolutionary process to allow them to reveal themselves and be ushered to the head of a mass organisation.
One hundred years after the appearance of Lenin’s Imperialism, the Highest Stage of Capitalism we can see more clearly than in the decades after the Second World War the truth of his description of this era as one of “particularly intense struggle for the division and redivision of the world”. We live in a period in which the decay of capitalism is manifested in repeated crises that put the breakup of old alliances and even national states (the EU, the UK, Spain) as well as wars and revolutions, on the agenda. A new, high-tech arms race and dangerous interventions in the wars between the rival imperialists’ regional allies has already begun.
These inter-imperialist and inter-regional power clashes have diverted or derailed movements for political and social change, such as the Arab Spring of 2011, opening the way to the rise of reactionary movements like ISIS. Islamist political movements have taken the place once occupied by Arab nationalist, socialist and Communist parties in the 20th century because they appear to be actively resisting the imperialist powers (US, Russia, Britain and France) who have divided and exploited the Middle East for a century.
In 2015, the interventions of the USA and Britain in Iraq and Syria, of France in its former colonies and Russia’s support for Assad, produced the “blowback” of terrorist outrages to which France responded with a draconian and indefinite State of Emergency. The other blowback was the flood of refugees into adjacent Middle Eastern states and then into the Balkans and on into central and western Europe. This led to a major borders crisis within the EU. This, in its turn, has stimulated the growth of racism from mainstream conservative parties, right-wing populists and outright fascists. Islamophobia has become the central crypto-racist ideology of both populists and fascists; the anti-Semitism of the 21st century.
None of the imperialist blocks represent any sort of progressive camp that socialists could support, even critically. They are all what Lenin called “bands of brigands”. The working class is an international class that cannot fight for its historic interest if it subordinates itself to either bloc or to any of the imperialist powers or, for that matter, to the capitalist ruling classes of the smaller oppressed and exploited nations. Class independence is critical, as is the recognition that in such a period we are not decades away from wars and revolutions but will repeatedly face them in the years to come.
Yet, as the Arab Spring has shown, toppling long-standing dictators alone does not create some sort of unstoppable objective revolutionary process. Revolutionaries must draw the lessons that the working class needs to learn;
- the difference between legitimate democratic uprisings against tyrannical regimes, and counterrevolutions masquerading as revolutions, like that in the Ukraine;
- that the working class must come to the head of all such democratic revolutions, creating its own organisations with which to break up the old state power and eradicate every element of its repressive machinery;
- that it must then proceed to the tasks of the socialist revolution and spread the struggle to the surrounding region and, indeed, worldwide.
In all the imperialist countries, our guiding principle must be that the main enemy is at home. A primary task is to mobilise against the imperialist powers' bombing campaigns, sanctions, border fences and states of emergency and their preparations for war. Revolutionaries must denounce and warn of all measures, like retreat into national isolation, that lead on to trade wars, to cold wars and eventually to inter-imperialist war.
In most European states, the experience of five years of austerity has disillusioned large sections of the population with the parties that imposed it, whether of the right or the left. There is is a widespread disillusion with the old reformist parties of the Socialist International. Indeed, it has disillusioned many with the “two party system” as a whole since both have carried out similar, often identical, policies. Recent elections across the continent have shown a search by the electorate for an alternative, whether on the right (Poland) or on the left (Portugal, Greece and Spain). We have witnessed the meteoric rise of populist parties, right and left. Some, like Syriza, between 2012 and 2015, seemed to present a new and exciting alternative. Today, in Britain, the movement supporting Corbyn promises a transformation of Labour in a similar direction.
Wherever masses of workers are attracted to such developments, it would be sectarian for revolutionaries to stand aside. But they should join these struggles with no illusions, warning of the fatal weakness of the leaders and their programmes. Our goal, where participation in these mass parties or movements under our own banner is a possibility, must be to transform them into genuine, that is revolutionary, workers' parties. We must not fight only for the adoption of a socialist transitional programme but against all the obstacles to its implementation, including those within the party. That means, principally, the reformist bureaucracy and the ineffective forms of organisation it has forced onto the working class organisations.
Resolving the crisis of leadership afflicting the world’s workers' movement requires the small numbers of revolutionary communists to adopt tactics that put them alongside all the struggles of the masses, using the varied forms of the united front tactic. Not the least expression of the crisis of leadership today is the fact that, although there was resistance to the effects of the crisis after 2008, with the important exceptions of the Arab Spring and the Occupy movements in Europe and North America, it was much less international in its organisation and scope than in the 1998-2003 period, which saw the social forums and summit sieges.
The revolutionary left needs to rally its forces to resist and reverse these negative trends. A further deepening of capitalist crisis will make this task ever more urgent. Immediately, we need mass united fronts of resistance both to austerity and to imperialist war, racism and reactionary populism, whether in a religious or secular disguise. We need to rally the forces from the left wing of the mass organisations of the working class as well as new forces of the workers, women, youth and the racially and nationally oppressed, to build revolutionary workers' parties and a new, Fifth, International.