Capitalism faces one of its greatest crises - Need for mass parties of the working class

The Committee for a Workers’ International (CWI) will hold its 10th World Congress during December 2010. This event will be attended by delegates and visitors from east and west Europe and Russia, Africa, all parts of Asia, North and Latin America, Australia and the Middle East.

The week-long congress will discuss and debate the main issues facing the working class internationally in a period of deep capitalist crisis and as the bosses try to impose unprecedented savage cuts on the working class and poor.

One of the main congress documents is on ‘World Relations’, which includes an examination of the current stage of the world economic crisis and the international class struggle. We are publishing the initial draft of this document today. During the CWI congress this document will be subject to debate, discussion and amendment, and the final text will be published on socialistworld.net following the congress.

Socialistworld.net

1. Capitalism from a social and economic standpoint has faced in the last three years one of its greatest crises in its history. If mass parties of the working class existed – even the limited bourgeois workers parties of the past – then, in all probability, left reformist, centrist and revolutionary ideas would now be widely discussed in society and particularly within the ranks of the organised working class and labour movement.

2. The absence of a mass point of reference for the undoubted seething anger of the masses has helped to blunt the challenge to capitalism in the short term. The bourgeois ideologists openly celebrate this outcome. They expected an ideological, industrial, social and political tsunami which would overwhelm them: “There will be no more glad mornings celebrating the superiority of the unconstrained market,” wrote the Financial Times. Now, the same journal proclaims “the market (capitalism) is back”.

Economic Recession

3. Since 2007, world capitalism has been in the grip of what capitalist experts describe, with some relief, as the “great recession”. Through state measures of bailing out the banks – quantitative easing – together with other economic short-term measures they have managed to avoid, up to now, a repetition of the last ‘Great Depression’ of the 1930s on a world scale. In reality, parts of the world – in Europe, Spain with 20% unemployment, some countries in Eastern Europe – are mired in a ‘depression’. The measures of Obama in America, for instance, have saved at least one million jobs. But still eight million workers have been ejected from the factories since 2007.

4. Unemployment stands officially at almost 10% but unofficially, with those who have given up looking for a job, part-time working, etc, the real unemployment or underemployment figure is 20%. Despite the much vaunted speculation and celebration in capitalist circles about economic ‘recovery’ this remains elusive.

5. Marxists have always pointed out that capitalism will always recover if, in a crisis, even a serious crisis, a force does not show an alternative to capitalism itself. During the 1930s devastating depression in the US, there were phases of growth – from 1934 -37 for instance. But this did not eradicate mass unemployment nor lead to a new structural growth of the productive forces. Without the impetus provided by preparation for the Second World War and the war itself, capitalism would have been plunged back into a deeper crisis.

6. Unfortunately the working class, with a huge burden of decades of neo-liberalism on its back and hobbled by the lack of mass organisations and leadership, has not been able to put its stamp on the situation. There have been titanic battles – Greece, France, Spain, India, South Africa, etc. – with more to come. And what is striking about the current economic situation is that, despite this, capitalism, as we predicted, has not been able to stage a full recovery. On the contrary what ‘growth’ has been recorded in the recent period, and then only in some countries, has been anaemic and has not in any way returned the economy to its position prior to the crisis.

7. The desperation of the capitalists’ and its empiricism and short-termism is demonstrated by the eagerness with which one month’s ‘favourable’ economic statistics are seized on to indicate that a full return to ‘economic health’ is imminent only for these hopes to be dashed when the next month’s figures show the opposite.

Double dip

8. In reality, most serious commentators have swung over to the idea that what they call the double-dip is now virtually inevitable. There is open discussion that the ‘recovery’ is more like the proverbial ‘dead cat bounce’. It is now referred to as the ‘Great Disappointment’. Moreover, the bourgeois are completely divided as to how to tackle the huge state debts – the debt ‘overhang’ – which is a consequence of the colossal bubbles in the financial and other sectors of the economy in the last 20 years. One British economist has written that this bubble was the biggest for 130 years. The Governor of the Bank of England, Mervyn King, said it was the largest “ever” and its consequences will be “with us for years to come”. There is in fact an open split – of an unprecedented character – between the ‘debt deniers’ and the ‘growth deniers’. This is a division between the Keynesian, in fact the quasi-Keynesian, school of economists and those who advocate, in effect, deflationary policies. Both are right in their criticisms of the other school – we have dealt with this in other material – and both are wrong in their different ‘solutions’ to the crisis.

9. This in turn has provoked a political crisis for the bourgeois and their parties. The divisions between the capitalist parties and within them, in the US, Japan, in practically all the states of Europe, have widened considerably. The lack of confidence in all the major parties is mirrored in some countries like Britain and Australia in the phenomena of ‘hung parliaments’ with no party able to govern alone and the emergence of unstable coalitions. Belgium has been without a government since April! In Japan, ‘everyone’ demands their ‘five minutes of fame’ as ‘prime minister’. This, in turn, reflects the organic economic crisis of Japan the further growth in the colossal state debt, with the deflationary tendencies of the last two decades still not purged from the system.

10. The massive and economically unsound financial bubbles of the last 20 years have left in their wake an organic and drawn-out crisis of capitalism. The accumulated debts of companies, of the state and of individuals mean that the economy of capitalism will be hobbled for a protracted period. Paul Krugman – the foremost of the advocates of Keynesian measures – is right when he says that to slash the deficits precipitately, as advocated by the ConDem government in Britain and others, will only enormously aggravate the situation in a world crippled by ‘lack of demand’. If the present policies of the European capitalists, and even Obama, up to now, continue, a ‘long depression’, similar to that which affected capitalism in the late nineteenth century is possible.

11. This is a manifestation of the ‘Hoover’ economics – of savage cuts – of the US government and others following a 1929-style crisis. Obama, unlike Franklin Roosevelt, came to power not as the latter had done when the economy was emerging from the crisis but instead in the very midst of the crisis inherited from the Bush Republican administration. Therefore the measures of Obama in rescuing the banks and financial sector have had a minimal effect. Now in panic at the prospect of election meltdown in the November mid-term elections he has advocated a jobs programme, amounting to an injection of $50 billion.

12. This will, however, have only minimal effects. Trotsky pointed out that only the richest countries – in reality only the US at the time – with ‘plump savings’ were able to afford the minimal measures of the ‘New Deal’. Now American imperialism, weakened economically, crippled by the twin deficits of the federal budget and of trade, is in no position to repeat the Roosevelt experience of stimulating the economy. In any case, as is now widely understood, Roosevelt’s ‘priming of the pump’ was short lived between 1934 and 1937-38. Then the cuts to the pensions of the First World War veterans and other economic retrenchments began to undermine even the achievements of the New Deal.

13. Obama will probably face a hostile Congress, both in the House of Representatives and Senate, after November – although the emergence of the Tea Party movement in the primaries could undermine the success of the Republicans. He could be prevented from carrying through further ‘stimulus’ measures. However, like Roosevelt, whose popularity declined at one stage, Obama and the Democrats could make an electoral comeback. In fact, a right-wing House and Senate is likely to be heavily influenced by the lunatic right of the Tea Party. It could act as the whip of the counter-revolution. This may later benefit not just the Democrats in the run up to the next presidential elections, but would also prepare the way for movements, within the unions in particular, for a third party, a workers’ and left alternative.

Drawn-out crisis

14. The economic perspectives for capitalism are of a drawn-out crisis, to be precise a series of crises. The system has arrived at one of those points in history in which it is in an economic cul-de-sac. The crisis confronting the system is symbolised by the colossal liquidity, the accumulation of record profits not just by the banks but non-financial companies as well, despite at the moment having no ‘profitable outlets’! Fully an additional $2 trillion is sitting in the bank accounts of the major companies in the US. Additionally, there is $10 trillion ‘hoarded’ by the rich which cannot, it seems, be invested with any guarantee of a ‘reasonable return’. Instead, capital has fled into ‘government debt’, as with Britain, despite its risky huge state debts.

15. Consumer spending has dropped in the US, as it has in Europe and Japan. A few ‘bright spots’ for capitalism – in Latin America, particularly Brazil, in Germany for special reasons, the growth of China, Australia etc – are the exceptions to the general picture which exists. Where there is limited industrial growth – in Germany for instance – this will in no way consolidate capitalism.

16. On the contrary, in Germany it is quite striking that the trade union leaders were advocating that the working class should tighten its belt because of the parlous economic situation are now echoing the demand for ‘our share’ which workers are making. Moreover this growth in Germany does not mean that the economy has fully recovered from the crisis. Production has not yet reached its pre-crisis levels and the German bourgeois are still preparing to cut welfare, attacking the poorest sections of the population. This economic stagnation – deflation – may be added to by a bout of inflation in food prices and raw materials in some regions and countries.

Iraq and Afghanistan

17. This is the background to a highly unstable scenario in the field of world relations. The dream of Bush, and the Neocons was symbolised by so-called ‘liberal’ interventionist policies, first in Kosova and then much more devastatingly in Iraq and Afghanistan. The US maintained that it would be able to establish a ‘unipolar’ world is buried under the rubble of those countries. Bush and Blair invaded Iraq against the background of ‘shock and awe’. Obama is trying to give the impression that the US is ‘quietly’ pulling out of Iraq and liquidating this adventure. In reality the US will retain at least 50,000 troops either within the country or ‘close by’ with the ability to intervene if necessary.

18. To this purpose a whole network of US bases – which did not exist before the war – have now been constructed to facilitate speedy ‘incursions’. Nevertheless it would appear to the peoples of the region and the US that the foundation stone of the ‘war on terror’ – brutal invasions – certainly as far as US imperialism and its allies are concerned has ended. But if the US’s vital interests are threatened it will not hesitate to intervene once more in the region, if able.

19. And the agonies of Iraq will not end. On the contrary the net upshot of the invasion and occupation – as the CWI foreshadowed – which led to the removal and execution of Saddam Hussein will only result in the creation of two, three or more ‘Saddams’, dictators, in the country. Iraqi ‘democracy’ is a thin veneer, seeking to mask colossal divisions. The invasion unleashed sectarian tensions that had been kept in check by ruthless military means by Saddam. The 4 to 5 million Iraqis forced to flee from their homes either to internal exile or abroad will be added to now as sectarian conflicts are likely to tear the country apart.

20. The CWI will work towards supporting all those working-class progressive and democratic forces in the country striving to rebuild the organisations of the working class, the trade unions. It will also support and fight for a genuine political voice of the working class in the form of a new mass workers’ party. The US consul in Iraq following the invasion was Paul Bremer who immediately introduced anti-working-class, anti-strike laws and banned the unions in the public sector. This underlined the fact that behind this intervention was not at all a ‘liberal’ agenda but a ruthless capitalist, imperialist policy to grab the resources of the country, which necessitated the weakening of those forces – the unions – which could stand in the way of this.

21. This brazen, naked, cash calculation policy in the neo-colonial world was summed up by the comments of a senior Pakistani diplomat in relation to the future of Afghanistan: “The Afghan government is already talking to all the stakeholders, [the Taliban].” The only “stakeholders” not consulted, of course, are the workers and poor of this ravaged country.

22. It is widely recognised that the Afghan conflict – which has now lasted longer than American involvement in Vietnam – is unwinnable. To begin with, this war was perceived by US imperialism and its allies as a ‘war of the future’ with a minimum of military or civilian casualties. This would be possible because of the so-called ‘revolution in military affairs’ following the end of the Cold War. But like Russia’s intervention in Afghanistan, this idea was smashed in Afghanistan and in Iraq. The situation necessitated the US and its allies to conduct a traditional ‘counter-insurgency strategy’. This led to the traditional policy of ‘divide and rule’, perfected by British imperialism. They fomented a sectarian civil war in Iraq and backed the majority Shias. This effectively led to the defeat of the Sunnis and in the process, by buying support from the Sunni ‘chiefs’, nullified the effects of Al Qaeda.

23. But the colossal expenditure of trillions of dollars in both countries has only led to a tacit defeat. There is now open recognition of the difficulty of promoting the ‘hearts and minds’ strategy because of the total rejection by the Afghan people of the organically corrupt central government, its corrupt officials, as well as the foreign invaders. In despair, sections of the US establishment, led by its former ambassador to India, now openly advocate the partition of Afghanistan.

24. This would involve giving the south – in which the Pashtuns are the majority – independence from the north, dominated by ethnic groups apart from the Pashtun. This would have the additional advantage of exerting pressure on Pakistan and particularly on its intelligence agency the ISI, which created and supported the Taliban, to rein in its former protégé. In any case the Taliban, although it has enjoyed military success with an increase of 50% in attacks on occupation forces in the last year, cannot – because of the ethnic divisions in the country – rule alone. On the other hand, as other bourgeois commentators have pointed out, the partition of Afghanistan is dangerous and could begin the process of ethnic and national unwinding throughout the region, affecting Pakistan, Iran, etc.

25. One thing is clear: imperialism cannot impose from the outside a lasting solution in either Afghanistan or Iraq. Indeed even with the reduced military presence ‘on the ground’ domestic support in the occupying countries for the continuation of military intervention – particularly of the US and Britain, which, per soldier deployed, has now lost as many as the Russians did in Afghanistan – will evaporate.

26. The conclusion which the strategists of American imperialism are likely to draw from this is not that they will not or cannot intervene to safeguard their economic and military strategic interests in the future. They are still the strongest military force – by a long way – in the world. But the character of this intervention must change. It is unlikely now, even with a predominately professional military force, that the US will be able to undertake anything more ambitious than short-term ‘military-police type interventions’. Moreover, the ‘support’ of allies, i.e. ‘coalitionism’, is now necessary rather than a unilateral approach in any large-scale actions. ‘Soft power’ must be accompanied with ‘hard power’.

27. It is possible, for instance – but not the most likely variant – that together with the Israeli regime the US could still attack Iran. The consequences of this however would be incalculable worldwide, particularly in the Middle East. The European Union, which had ambitions to economically match the US and with this to enhance its own military prowess, has seen, those hopes evaporate as the economic crisis and consequent feebleness and widened national divisions have taken their toll.

China, Russia and their relations with the US

28. China is perhaps the only power which, at present, looks able to begin to match the US in the future – and even then it is still puny militarily and economically in relation to the US at the present time. China on a per capita basis still has an income no greater than El Salvador in Latin America! Europe’s income per head is ten times that of China’s. But it has moved from a predominantly land-based military force into building up the strength of its navy.

29. The Chinese regime will, moreover, not be hesitant to bolster its international ‘presence’ – with the use of military power should a situation warrant it – in Asia in particular where locally it clashes with US imperialism, and in the future a resurgent Japanese military. The rising power of India will also come into collision with China’s ‘expansionary’ tendencies, particularly in its drive to acquire vital new materials such as oil and agricultural products.

30. Russia has also come into conflict with the US particularly in Central Asia which is considered by the ‘new-born’ but unstable Russian capitalists to be their ‘sphere of influence’, the ‘near abroad’. The whole of Central Asia is at flashpoint. Suffering from terrible poverty, riddled with corruption and mass unemployment, and with a cocktail of unresolved national conflicts, the uprising in Kyrgyzstan can be repeated in other countries in the region.

31. Kazakhstan, the largest state in the region, is a prime candidate as the opposition to the dictatorship of Nazarbayev and his family coterie has grown and speeded up recently. An heroic opposition to the regime is spearheaded by the burgeoning forces gathered round the CWI, particularly in Kazakhstan 2012, the independent unions etc. The tremendous work within Kazakhstan together with the international pressure exerted on the regime must be maintained and stepped up. We must be prepared for abrupt changes, given the huge mass discontent which is bubbling to the surface.

32. A spat over Russian spies in the US – more farcical than sinister – produced tensions between the US and Russia. But in reality the US and Russia – especially during the Obama presidency – have been drawn closer together by a combination of factors. Russia has sought an accommodation with the US, especially through Russian President Medvedev, not least because of the weakened economic position of Russia arising from the economic crisis. Overdependence on exports of oil (less oil is now produced in Russia than in the 1970s), gas and raw materials meant that during this crisis Russia contracted economically more than any other G8 country, by 8% in 2009. Comparisons are now being drawn, within Russia itself, between the current situation and the ‘period of stagnation’ under the Stalinist regime of Brezhnev.

33. Another consequence of the crisis is that the regime of Putin/Medvedev, with its authoritarian character, has come into collision more and more with the discontented masses of Russia. The diffuse opposition – the organised expression of this – is very limited at the present time. However the protests and demonstrations are finding a greater echo than previously amongst the mass of the population.

34. This summer’s unprecedented heat wave – which was the hottest for 100 years – combined with devastating forest fires enormously aggravated the gross deficiencies in the ability of the state to deal with catastrophes like this. Striking was the presence and effectiveness of CWI members in a protest against the opportunist attempt to build a road through the hitherto protected forest areas under the cover of this calamity.

35. One of the consequences of the fires resulting from the heat wave is that Russia lost 25% of wheat production. This will contribute to a sharp increase in food prices in Russia and worldwide. Combined with food shortages arising from droughts and floods in other parts of the world, this has meant a drastic reduction in food supplies which has led to significant growth in world hunger. In 2007-08, more than 100 million people were tipped into hunger by the economic crisis. In 2006, the number of ‘undernourished’ people was 854 million. In 2009, it was 1.02 billion, the highest figure since records began. The hungry are not just in the neo-colonial world; over Christmas 2009, 57 million people in the US did not know where the next meal was coming from! Food riots broke out in Mozambique which will be repeated elsewhere in the next period, and maybe not just in the neo-colonial world.

36. The heat wave and fires in Russia have been mirrored in disasters in other parts of the world which, combined with the catastrophic floods in Pakistan, are amongst the worst natural disasters that the world has seen. A major cause of this is climate change due to environmental pollution and destruction. ‘Natural disasters’ are inevitable. But the consequences can be enormously aggravated by the corrupt character and the incapacity of the regimes which confront the consequences of these disasters. Even the most advanced industrial country in the world, the US, George W Bush’s government, was profoundly affected by the Katrina episode. Five years after the event New Orleans has still not fully recovered from its effects. How much longer lasting then will be the effects of the crisis in Russia, in Pakistan and elsewhere in the course of this year?

Pakistan

37. History attests to the fact that natural disasters – earthquakes, heat waves, etc – are often the spark, the ‘midwives’ for revolution or a revolutionary situation. Forty per cent of Pakistan was flooded at one stage with reports that some rich feudal landlords deliberately diverted floodwaters away from their land towards that of the poor. Syed Gillani, the Pakistani prime minister, was openly attacked and vilified as the rich continued to prosper while the masses suffered the unspeakable effects of the crisis. Even the military, because of its intervention to help the poor, enhanced its reputation.

38. The fundamentalists tried to capitalise on the crisis and have been partly successful because of the complete paralysis of the state. The Pakistani state was, in effect, “washed away” during the floods. The full consequences of these events will only be felt when the floods recede. It is a great source of pride that our organisation in Pakistan and the CWI, in the most difficult circumstances faced anywhere in the world, has risen to the occasion, has been involved in the collection of resources for the poor and working-class and has continued to act in a political capacity.

39. China has also faced the consequences of floods. However, while the state has not exactly shone in its performance during these events, nevertheless they have not had as serious consequences as in Pakistan. It is the social ‘earthquake’ of the strikes in China this year which have had a more decisive effect on the situation.

40. Although the strikes broke out spontaneously – and reflected the inhuman conditions in the gigantic factories especially on the eastern seaboard of China – the regime, having opposed them at first, sought to accommodate itself to the situation. It was helped by the fact that the strikes broke out in foreign-owned factories in the first instance. Sympathetic noises came from the government, with even concessions about the ‘need for trade unions’. There was recognition, a hope, that if the workers gained wage increases – which they did – this would increase the purchasing power of the masses and hence boost the internal market.

41. But in reality the Chinese regime, like any dictatorship, has also worked to furiously prevent the independent movement of the working class. The strikes are an indication of what is coming; they have not as yet developed into broad-scale movements with the working class testing out its strength in big struggles, creating organisations in the form of independent unions and preparing to energetically combat the employers and, behind them, the Chinese state.

42. But the strikes have an enormous symptomatic importance, a sign of what is to come. They bear some resemblance to the pre-1896 situation in Russia, which was characterised by individual and sporadic strike action before culminating in the strike wave of 1896 in St Petersburg. This in turn allowed the working class to find its voice and developing separate organisations. This in turn laid the basis for the subsequent explosive industrial and political development of the Russian working-class through the creation of a mass party, the RSDLP, the 1905 revolution and of course the great events of 1917.

43. Despite the seeming all-powerful strength of the state, the Chinese workers are set to upset the apple cart by their movement in the next period. The CWI is well-placed to participate in and play a leading role in this movement. The spectacular economic fireworks of China have done nothing to drastically improve the lot of the Chinese masses. The 130 million migrants who work in China’s boom towns and cities take home as little as $197 a month, which is little more than one twentieth of the average monthly wage in the US.

44. The current shortage of labour strengthens the hand of the Chinese workers to demand increases. These appear to be quite substantial from 17 to 30% but are, in reality, percentages of very meagre wages. Even then, foreign capital, with the backing of the Chinese state, searches for even cheaper labour in the hinterland of China and in other parts of Asia: Vietnam, Laos, Cambodia, etc.

45. The actual share of the working class in total wealth has dropped dramatically in the last few decades. Wages were 56.5% of gross domestic product in 1983 (when the planned economy still existed) but were only 36.7% in 2005. This has provided a huge boost to the US which through a mass of cheaper goods exported to the US has, in effect, according to the Economist magazine, “added $1000 a year to the pockets of every American household”. It will be the actions of this massive working-class, numerically the strongest industrial proletariat in the world, which will be decisive in shaping events in China.

46. The same applies to India, where the working class has re-entered the political arena with the recent general strike. In Sri Lanka, our section has played a decisive and heroic role in fighting the ethnically-based Rajapaksa regime, in reality a dictatorship with a thin veneer of ‘democracy’.

47. Despite its seeming strength, the government is propped up by Pakistan, India and China. This and the aura of ‘victory’ in the civil war can sustain this government for a period. But the underlying condition of the masses has not improved. This will lead to an opposition movement at a certain stage.

Middle East

48. Another ‘hotspot’ for imperialism is the Middle East. There is not one stable regime in the region. The Palestinian-Israeli conflict is as intractable as ever. But such is the outrage worldwide at the repression of the Palestinians by the Israeli state that capitalism, particularly Obama’s administration, must be seen to be acting to try to resolve the situation. This led to the peace conference initiatives in Washington. But on the ground the polarisation between the Palestinians and the Israelis is as sharp as ever.

49. Pressure is mounting for some kind of resolution of the conflict. The outrage of the imprisonment of one and a half million people in the putrid and festering Gaza Strip has compelled the European powers – witness the statements of Cameron – and the Americans to be seen to be ‘doing something’.

50. The peace conference in Washington brokered by Obama is formally geared to laying the basis for a ‘two-state’ solution. But this would require as a first step a building freeze, and then some dismantling, of Israeli settlements on Palestinian land in the West Bank and Jerusalem. But if Netanyahu conceded that, or even a continued freeze on building after the end of September when it is intended to run out, then the right would walk out of his government and it would collapse. There have even been voices raised recently – surprisingly on the right in Israel – for a ‘common’ state which would draw in particularly the Arab Palestinians on the West Bank with Israel.

51. Gaza would, under this plan, be cut off, isolated and probably forced into Egypt as a consequence of this perceived option. Sections of the Palestinians, largely the petty-bourgeois, have suggested the ‘South African option’. This involves giving up the two-state solution – which is now seen as ‘unobtainable’ by many because of Israeli intransigence and US impotence – and replacing it with the demand for a common state of Palestinian Arabs and Israelis. Because of the greater birth rate of the Palestinians this would mean that they would form a majority within the state over time. It is reasoned that if a “democratic” Israel was to reject the demand for ‘one person one vote’, it would make Israel as massively unpopular as the apartheid regime in South Africa.

52. Some on the Israeli right, such as Arens, a former foreign minister for Likud, and even some of the settlers’ leaders on the West Bank, are, incredibly, attracted towards a solution of this character. However, they would exclude the one and a half million Palestinians in the Gaza Strip. Moreover, equal rights would only be introduced ‘gradually’. Such a ‘solution’ is likely to be rejected by the overwhelming majority of Palestinians. It is therefore likely to be a non-starter.

53. But nevertheless these developments indicate the attempts on the part of both sides to try and escape from the intractable existing situation. They will come to nothing as the Palestinian masses will not give up their demands for a separate state. Equally, the Israeli population will not accede to the demand that they form a possible minority in a ‘common state’. To do so would mean that they would take the place of the oppressed Palestinians; this would be inevitable on a capitalist basis. Our demand for a socialist, democratic Palestine and a socialist Israel linked to a socialist confederation of the Middle East retains all its validity.

54. The Middle East remains a powder keg that could explode at any time not excluding even a ‘nuclear exchange’ between Iran and Israel. The US and Russia, recognising this, have led to attempts to create a nuclear-free zone in the region. This is partly aimed at cutting across Iran’s determination to develop nuclear energy – and by implication nuclear weapons. In negotiations with Israel this would confirm the existence of their colossal nuclear arsenal – something Israel has so far refused to do.

55. This, it is intended, will lead to Israel bargaining away its weapons for ‘guaranteed peace’. This is not likely to be realised, especially in the short term as the Israelis perceive that they are surrounded by a hostile population of millions of Arabs who wish to see the state of Israel liquidated. Therefore rather than preparing for détente Israel is still pondering a pre-emptive military attack on Iran in order to snuff out its nuclear plans and thereby further intimidate the Palestinian and Arab peoples. It is an open question as to whether such an attack could take place. But it cannot be completely discounted.

Egypt

56. While this conflict between the Arabs and the Israelis is important, it is not the only factor which must be taken into account in working out perspectives for this region. Much more than previously the economic situation is preparing here big social and political movements. In a concrete example of workers’ unity across sectarian lines, teachers in Lebanon have conducted an ongoing struggle, gaining some victories from the government.

57. This is particularly the case in Egypt, the most important state – alongside Israel – in the region. Seismic shifts in this country are on the agenda. The 30-year reign of the Mubarak government is drawing to an end. In fact, many commentators compare the current situation in Egypt to what existed before the overthrow of the monarchy in 1952. The recent strikes are a symptom of the growing mass discontent.

58. Egypt is starkly divided between rich and poor. Egyptian nationalism – perhaps the most powerful strain of Arab nationalism – has dissipated as an organised force and the opposition now largely gathers around the Muslim Brotherhood.

59. The NDP – Mubarak’s party – had its roots historically in Nasserism and the mass basis which it enjoyed. Nasser and his ‘republican model’ were looked to throughout the Arab and neo-colonial world. Its promises of free health and education, land reform and jobs in state factories and offices lifted millions out of ‘misery’ to, in the words of the Economist, ‘near poverty’. This was a step forward! The ideology of Pan-Arabism, trumpeted by the 1952 coup leader Nasser, gave Egyptians ‘pride of place’ in the Arab world. But, two presidents and four decades later, Nasser’s regime has changed into Mubarak’s, one that encourages ‘private enterprise’ and with it the mass impoverishment of the majority of the population.

60. Egypt, in the past and even today, has been bolstered by massive subventions from US imperialism. Nevertheless, Israel’s actions in Palestine have tended to undermine the Egyptian regime. Caught between the pressure of Israel and the capitalist West, Egypt is in decline. Opposition now comes from the Muslim Brotherhood and figures like Mohammed el-Baradei, the former head of the United Nations nuclear authority who recently returned from the US to head middle-class opposition to the regime.

61. However he was denied headquarters, cannot raise funds and has difficulties in holding public meetings. In polls that were held this year for the upper house of parliament, the government claimed a 14% turnout but independent observers put it as low as 2.5%. This was poor even by Egyptian standards. A number of possibilities for the future are posed in Egypt. A mass uprising could blow the regime away with the main inheritors of what could follow, grouped around the Muslim Brotherhood. An Iranian-type development could take place. Mubarak’s son is in place to succeed him. But a new strongman from within the regime could rule the roost – such as the present head of internal security – after Mubarak disappears from the scene.

Turkey

62. The commentators and the strategists of capitalism hope that a regime along the lines of Turkey will follow. This will be a regime formally adhering to ‘democracy’ but in reality it will be a veiled dictatorship. But none of these scenarios would develop if the super-exploited Egyptian workers and peasants rose, developed trade unions (which already exist in embryo) and created a new mass party. Turkey itself is also a major ‘player’ in the region now. It has swung over from support for Israel to putting its weight behind the Palestinian and Arab causes. Through the Ottoman Empire, it formerly dominated the region.

63. The whole region remains volatile. Conflicts including wars over water use could easily take place between Egypt and peoples of the ‘drier’ states to the south that also draw on the water of the Nile. The solidarity of all African states and peoples – which was common under Nasser – has gone as the different national bourgeois pursue their own narrow interests. This makes it more likely that conflicts can take place between Egypt and sprawling African states which are perceived by the Arab elites as relative backwaters.

64. The main force to gain out of the Iraq and Afghanistan misadventures has of course been Iran. This has strengthened its regional pre-eminence and weakened the Sunni Arab states who are rivals in the struggle for influence in the area. Internally, however, the regime of Ahmadinejad remains highly unstable. The uprising of 2009 came very close to overthrowing the regime, as revelations subsequently demonstrated. It was revealed in June of this year that Ahmadinejad and the ‘supreme leader’ Khameini had an aircraft ready to flee the country – to Syria – if they were unable to crush the mass movement.

65. After a long rule of a dictatorship, it is not unusual for the first attempts to unseat it to fail. Moreover revolution never develops in one act but as a process. The Spanish Revolution, let us remember, evolved over six to seven years between 1931 and 1937. The movement of 2009 was just the first stage. The second act will be resumed in the next period as the economic difficulties of the government have been compounded by the world economic crisis and its effects in Iran. Opposition has been aroused by the naked grab of former nationalised resources by the Revolutionary Guards, the Praetorian Guard which defends the regime. The CWI must follow these events carefully and seek to find a road to the best revolutionary elements that are looking for a clear programme and perspective.

North Korea

66. North Korea remains highly unstable, with a high degree of ‘danger’ for the capitalists. The death of Kim Jong-Il, the ‘Supreme Leader’, could trigger a collapse with millions of hungry North Koreans fleeing over the borders, which would in turn lead to the complete economic collapse of the South, put pressure on China and could lead to a big geo-political fallout in the region.

Whole planet involved

67. ‘World relations’ is not a question, as was the case in previous eras, of one or two powers dominating the globe and the consequences that flow from this. Now it encompasses the whole of the planet. There is not one part of the world that is not affected by the economic crisis, by the environmental catastrophe that looms and by the general crisis confronting world capitalism. Therefore the broad developments in Africa, and Asia and Latin America are part of an analysis and discussion on world relations. But we will be producing for the Congress special material on these regions. Therefore we have not dealt with these areas in this document, except in passing as a means of illustrating the general processes.

68. But the most crucial aspect of world relations is of course the role of the working class, above all the vital issue of existing consciousness, how this is likely to change and in what direction. The unavoidable fact of nearly 30 years of neo-liberalism, reinforced by the hugely deleterious effects on the outlook of the working class by the collapse of Stalinism, is still the dominant factor. This, together with the absence of the ‘subjective’ factor – mass organisations and clear leadership – holds back the working class from drawing all the political and ideological implications from the current devastating crisis.

69. In the immediate aftermath of the financial meltdown in 2007 the ruling class feared for the future of this system. They were right to do so given the devastatingly damaging effects of this crisis. We also entertained hopes that there would be the beginnings of a big change in the outlook of the working class and the emergence of a broad socialist layer. This undoubtedly has been the case as an almost visceral hatred of the rich, particularly the bankers and the financial sector, has developed in the wake of the crisis. This mood, after all, was crucial in bringing to power the Obama administration in the US. A clear anti-banker consciousness exists worldwide – but particularly in the advanced industrial countries of Europe, Japan and America.

70. But this consciousness has not yet even developed into a broader, generalised, anti-capitalist consciousness which will begin to challenge the raison d’être of the system itself. The vital ingredients which would allow the masses to rapidly draw broad anti-capitalist and even socialist conclusions – of mass organisations and mass leaders relentlessly exposing the system – and fighting trade unions have been absent. Moreover, as the crisis has deepened, if anything the leaderships of the former mass organisations have moved further to the right.

71. Also, incredibly, some of the ‘far left’ have followed suit. They have not boldly linked the idea of a socialist programme with the day-to-day demands of working class people, as the forces of the CWI have sought to do. Unfortunately, it has been virtually our forces alone who have proposed fighting transitional demands linked to socialist nationalisation and a break with capitalism, leading to the establishment of a democratic socialist society.

72. Up to now, neither the NPA in France, the IST, nor, it must be said, the Morenoites in Latin America have clearly posed things in the way that we do. In Greece, these different groups were ‘behind the curve’ of what was required in an explosive, almost pre-revolutionary, situation. Only the forces of the CWI posed clearly the need for the cancellation of the debt, nationalisation of the banks and finance sectors as a step towards the socialist transformation of the ‘commanding heights of the economy’.

73. There is not one example from history in which the mass forces were created in the kind of conditions we confront today can be achieved without the necessary preparatory steps, many of them very small and at the time of seemingly little consequence. It is true that mass communist parties were formed in a number of countries – Germany, France, Italy, etc. – in splits from the old organisations of the working class, the social democracy, in the aftermath of the First World War.

74. But these ‘old organisations’ no longer exist, as we, the CWI, foretold in advance. Even the ‘new’ mass formation of the RC in Italy has largely disintegrated. This represents a reversal for the working class and genuine Marxism. This necessitated the adoption of the ‘dual task’ – which remains as a guiding principle – of helping to create new mass organisations and retaining a Marxist nucleus within them. New organisations will not develop easily and evenly. Other forces can temporarily develop and step into the empty political space.

75. Witness the situation in Australia at the present time with the Greens. Because of the vacuum that existed, they have now gone from a very small force to a sizeable 11% of the votes in the recent general election. The leader of the Greens, from his party’s point of view correctly, has drawn comparison between the growth and swing towards the Greens – a ‘greenslide’ – now with the origins of the Australian Labor Party itself at the end of the 19th and beginning of the 20th centuries. He pointed out that the ALP had no federal deputies until 1901 but eventually grew as a force which was able to form a government.

76. This is a correct general analogy but of course the Greens themselves will be a soap bubble particularly when serious workers’ forces begin to develop in Australia. Nevertheless we must have the confidence to continue with our attempts to create our revolutionary pole of attraction but at the same time helping the best of the youth and workers, trade unionists, etc, into realising what they are instinctively striving for: to build a force which can act as a mass point of reference in the colossal struggles opening up.

77. Behind the bombast about a new period of stability for capitalism the strategists of the ruling class are, in reality, insecure and fear for the future. They are correct to do so because we face one of the most disturbed periods in history. If capitalism could usher in a new period of economic stabilisation and then sustained growth then that would be cause for optimism for the defenders of the system.

78. But even the serious capitalist economists go to great lengths to warn that the pre-2007 situation will not return quickly, if ever. For instance, if the cuts of the Cameron government in Britain are fully implemented, a period of ‘eternal austerity’ could follow. The idea that the ‘private sector’ can fill the gap left by the elimination of one million public-sector jobs is a chimera. The British TUC says that in some areas – in the ‘best case’ scenario – this will take at least 14 years and in some regions 24 years to materialise!

79. At the Jackson Hole gathering with Ben Bernanke in August mentioned above, two capitalist economists who had studied 15 previous post-1945 crises, both in individual countries and generalised world recessions, concluded that in the ten years afterwards in none of them did the level of employment and investment back into production reach their peak crisis levels for up to a decade after. This crisis – the most devastating since the 1930s – will leave millions of unemployed. Marx’s idea of a reserve army of unemployed in capitalism derided by so many economists in the past could become a reality in the next period.

80. Sections of the working class, the most important productive force, cannot be fully integrated back into production. This goes alongside the environmental catastrophe. We have carried material in previous documents and on our website for a programme on the environment, and all sections of the CWI are involved in important work on this crucial issue. An increase in the world’s temperature by 3º Celsius, scientists now reckon, will mean ultimately the melting of the Himalayan ice caps!

The CWI

81. The CWI has come through intact from the isolation which arose from the collapse of Stalinism and the boom of the 1990s and the early part of this century. The relative quiescence which flowed from this meant that it was one of the most difficult periods in history for the genuine forces of Marxism, striving to avoid falling into the pitfalls of sectarianism or opportunism. It has been a considerable achievement to have maintained and built the CWI. Many lessons have been learnt, cadres have been formed and steeled together and now these forces are expanding.

82. Our task is to theoretically educate the new generation, fuse them with the experienced cadres and in this way produce a force which can lay the basis for participating – in fact playing a crucial role – in building mass formations. While not easy, the new situation opening up is much more favourable than the period we have gone through. We must have the necessary degree of determination matching this, of course, with the clarity of ideas and programme. This must be linked in turn to a meticulous approach to the building of the CWI. If we do this we can prepare the forces destined to play a vital role in the battle for socialism in the 21st century.

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