CWI Analysis and Commentary

A profound crisis of capitalism

www.socialistworld.net, 31/03/2009
website of the committee for a workers' international, CWI

Anger and protests manifest across the world

Kevin Parslow, Socialist Party (CWI England and Wales)

A meeting of the European Bureau of the Committee for a Workers’ International (CWI) takes place this week to discuss the developments in the world and European crisis, and the building of the CWI. Present are 31 representatives from 16 sections of the CWI.

Peter Taaffe introduced the first session on the ‘World Crisis, Europe and conclusions for the CWI’. He underlined the recent pace of events by remarking that it seems like years have passed rather than a few months since the last meeting of the CWI International Executive Committee took place. In that time, the depth of the crisis has become more profound, without the speed of the crisis decelerating, and it is becoming clear now to many people that the crisis is not going away quickly.

Anger against the capitalist system is manifested throughout the world: there have been three general strikes in Greece, as well as the revolt of young people; in the US there is rage against the bankers and their role in the collapse of the financial system, which is even reflected in Congress; there have been mass demonstrations in Ireland, where the economy could fall by 20% in what was formerly the ‘Celtic Tiger’; and there have been two one-day general strikes in France, where workers facing redundancy are ‘bossnapping’: holding their managers hostage for better payments for losing their jobs. Workers in Guadeloupe and Martinique took general strike action over several weeks for better pay to escape extreme poverty

The neo-colonial world is also refusing to let this crisis pass without protest; Madagascar is being convulsed, partly because of the previous regime’s association with multinational firms wishing to steal land from the poor to grow food for export.

Already, five governments in Europe have been toppled due to the crisis: three in Eastern Europe (Hungary, Latvia and the Czech Republic) plus Iceland and Belgium, and others are likely to follow. Europe has been severely hit by a crisis that took 5% of gross domestic product from the world economy in the last quarter of 2008, but was 7% from the ‘advanced’ economies of the world. Industrial production has been particularly devastated, seeing a drop of 30%-35%! Correspondingly, world trade is slowing down and is likely to fall by 9% this year.

Return of US shanty towns

Hundreds of thousands of workers are losing their jobs every month around the world and where there is no social safety net or a very weak one, like in the US, desperate situations are developing. The return of shanty towns into US cities, like the Hoovervilles of the 1930s, is such a sign and will be replicated in other countries.

As conditions of the working class worsen throughout the world, so the working class will move from a position of shock and astonishment to one where they feel they must act. Movements like those in Greece and Ireland which began at the end of last year have entered a hiatus but these will be temporary.

There are elements of a pre-revolutionary situation developing, with the bosses confused and divided, the middle classes in ferment and the working class looking for a way forward.

There is not a great difference between the European leaders and the US over objectives from the G20 but the question is whether any policy measures they agree could work. The cost of the bank rescues is greater than four wars, the moon landings and the Marshall Plan (that granted US funds to rebuild Europe after the Second World War to prevent revolution) put together! Many banks are technically insolvent – ‘zombie banks’ – but the capitalists want to avoid nationalisation if they can. Thus they have guaranteed up to $11.6 trillion to rescue the banks!

But the lack of unity of the G20 has been shown, since the last summit in the autumn that opposed protectionist trade measures, by the introduction of trade restrictions in 17 of the 20 member states! Similarly, a split has developed between government leaders who want further stimulus packages to continue and central bankers, like the Bank of England’s Mervyn King, who want a halt because much of the ‘treasure’ has gone and they fear inflation in the future.

Movements like the recent Lindsey strike in Britain against the European Posted Workers’ directive have been successful. In France, 30 universities are now affected by student protests. The key factor missing in many countries is a mass workers’ party. Where they exist, as in Greece, Germany and now in France, with the New Anti-capitalist Party (NPA) they have gained support – one opinion poll has put the NPA at 14% against the backdrop of the strikes and protests against the Sarkozy regime – although both SYRIZA in Greece and die Linke in Germany have fallen back in recent opinion polls.

But the CWI’s importance is in providing a programme for the masses out of this crisis and giving a lead to these movements that are in progress and will develop in the next period.

Depression?

In the discussion, a number of comrades raised the question of defining the period we are in – is this a recession or a Depression? It is clear that the length of the recession, at least 17 months in the US, and continuing, will be a factor, as will the presence of mass unemployment and other features. There are certainly depressionary tendencies in this situation. The world economy may be given a boost from the various stimulus packages and credit guarantees throughout the world, although that is by no means certain. But if it does, there will be no chance of a return to the credit-fuelled boom of the last 30 years. Peter Hadden from Ireland described the situation the capitalists face as “tobogganing towards disaster with their eyes open”!

China was discussed by several comrades, who tackled the questions of could China pull the world out of the slump and whether it could develop domestic demand. Chinese factories have been closing as their markets have shrunk. The Chinese fiscal stimulus at $580 billion is the highest as a percentage of GDP in the world but includes previously announced expenditures and weapons manufactures. The Chinese state may be forced to return parts of the economy back to open state ownership. The key to the Chinese situation is the Chinese working class; there are now 120,000 reported ‘mass incidents’ every year (over 300 a day) and consciousness is changing very quickly under the impact of factory closures, redundancies and the return of unemployed workers back to the countryside.

Rob from Russia and Paul from Poland explained how the crisis is shattering the illusions with capitalism in Eastern Europe and the former Soviet Union; the economy in Latvia will fall by 12% this year and Ukraine by 10%. Russia is facing a catastrophe; the sudden collapse of the economy has left 50% of citizens of Moscow below internationally defined levels of poverty. The Medvedev-Putin regime is desperately trying to stave off protests against the collapse. Protests have been set off, most recently by farmers in Bulgaria.

Cuts

Despite the widespread anger at neo-liberal capitalism for causing the crisis, the capitalists will continue to attack workers’ rights and conditions in trying to escape from their predicament. Marco from Controcorrente reported that 130,000 teachers in Italy will lose their jobs as their short-term contracts will not be revealed! Berlusconi seems strong in Italy because the working class has now no political point of reference. Sonja from Austria said that the bosses group of the right-wing Freedom party in Austria wants emergency laws to suspend collective bargaining agreements and other workers’ rights, and openly hand the running of the economy over to the hands of a small group of technocrats! In the Flanders region of Belgium, a right-wing populist formation ‘List Dedecker’ now has 16% in opinion polls by calling for ‘small government’ and is drawing support from other right-wing groups including the far-right Vlaams Belang.

CWI comrades from across Europe reported on how they are campaigning for new workers’ parties and formations, and where they exist to steer them in the direction of socialist policies. The fate of these organisations will wax and wane with events. As well as protests already mentioned, there were 60,000 people on demonstrations in Berlin and Frankfurt at the weekend. Further action planned is planned Europe-wide for 16 May. Whole Swedish towns have protested against the possible closure of the Saab car plants.

But workers and youth will fight back. The actions in Greece, Ireland and France show this. Organised labour movement activity is still low at the moment but that will change in the coming period as workers realise that this is not a short crisis. They will have to struggle. In such situations, Marxists in important positions can have huge effects in events. Because of this and our clear socialist programme, there was great optimism that we are set fair to grow rapidly in this period.