Capitalist chaos – class struggle sharpens

Below, we publish a document on world and European perspectives which will be proposed by the CWI’s International Secretariat to a meeting of the International Executive Committee of the CWI in January. Following discussion and amendments at the meeting, the final version of the document will be published on socialistworld.net at the end of January

A world in turmoil

1. Since the last World Congress, just over a year ago, the world has been in almost continuous turmoil. We have witnessed the Middle Eastern and North African revolutions, which still endure, as the bloody conflicts in Cairo and elsewhere in late November indicate. This in turn has been followed by the elections in Egypt. In the first stages of the Egyptian parliamentary elections the Islamic parties appear to have won two thirds of the vote. The Muslim Brotherhood’s Freedom and Justice party got 36.6%, according to preliminary results. However, the ultra-conservative fundamentalist al-Nour party, with its doctrine of Salafism gained nearly one quarter of the vote in areas which encompass nine of Egypt’s 27 provinces, including the main urban centres of Cairo and Alexandria. On the other hand, parties supporting the regime of Mubarak received only 3% of the vote! By the time of the IEC, the elections will have been completed and we will have a better picture of what this signifies.

2. The CWI predicted in broad outline, particularly for Egypt, in the documents adopted at our congress, the revolutionary upheavals which have unfolded in the region (we will comment further on the developments below). This has to be taken together with the revolutionary convulsions in Greece as well as the mass strikes and protests in Spain and Portugal. New social explosions impend in Italy, Ireland, Britain and elsewhere. Even the seemingly ‘strongest’ or up to now the ‘least affected’ European countries will not be immune from the radical if not revolutionary virus emanating from the so-called ‘periphery’ of southern Europe. The US has also seen the sizeable ‘Occupy’ movement which has affected and drawn in sections of the trade unions.

3. The continuation of the deep crisis of world and European capitalism has provided the impulse for these events. This crisis has been enormously compounded by the ‘sovereign debt’ turmoil. This in turn opens up the likelihood in Europe of national defaults and the collapse of the euro with all the grave consequences for European and world capitalism flowing from this. The crisis has already led directly to the demise or overthrow of a number of governments and prime ministers: in the last year alone, the execrable Berlusconi in Italy, Papandreou in Greece, Zapatero in Spain, Socrates in Portugal and Cowen in southern Ireland have all been swept from power.

4. This was preceded by the overthrow of Ben Ali in Tunisia, Mubarak in Egypt, Gaddafi in Libya, and followed by Saleh in Yemen. Nor have the mass movements and revolutions in the Middle East and North Africa finished their work; other governments in the region are likely to be toppled in the next period. Europe can also expect further convulsions which will lead to the early demise of current governments and the possible eviction from office through elections of Sarkozy in France, which could be paralleled with the breakup of the ConDem coalition in Britain and early elections, leading to its defeat. It is not just the desperate economic situation afflicting the whole of Europe that could shipwreck the Cameron government. The EU crisis could trigger referenda in a number of European countries. Although Britain has opted out of the new ‘treaty’, it is not excluded that the Tory party could split on this issue.

5. Ireland also could face a very important referendum on this issue. An opinion poll in October showed that 47% of the Irish electorate would vote against the proposal to amend the Lisbon Treaty with just 28% saying they would vote for it. In Britain, there would also likely be a ‘No’ vote in the event of a referendum and this could be repeated in some other countries within the EU, if the different governments actually allow a vote on proposed treaty amendments. In such a situation, we would be compelled to support the ‘No’ campaign, as we did in Ireland, particularly as the Lisbon Treaty and the EU in general are perceived much more so than in the past as austerity mechanisms to savagely attack the living standards of the working class. This question has already been posed in the British labour movement. The RMT rail union wishes us to be heavily involved in a ‘No’ campaign. The England and Wales organisation of the CWI considers that it will be necessary to be involved. However, we must seek to give it a clear anti-nationalist profile, standing for socialist measures whether inside or outside the EU. We will probably have to produce special material on this issue.

The ‘Occupy’ movements

6. At the same time, the ideological cement underpinning capitalism has been severely undermined. Not only does capitalism confront its biggest economic crisis ‘ever’ (according to Mervyn King, Governor of the Bank of England), in its wake it has also faced a profound crisis of legitimacy. This is reflected in the mass strikes of the working class but also in the worldwide ‘Occupy’ movement which spread to about 1,000 cities and all continents.

7. Despite its weaknesses – it is not firmly based either ideologically or with deep roots and a presence in the organisations of the working class – it has nevertheless evoked widespread public sympathy including from the working class and the labour movement. This movement, unlike the antiglobalisation movement at the turn of the century, takes place against the background of a deep recession. Most active support, however, in most countries emanates from the increasingly alienated young people, many if not the majority from the middle strata of society. However, the highlighting of searing inequality against the background of mass impoverishment synonymous with ‘modern’ capitalism has evoked a powerful echo among broad sections of the population in Europe and the US. An additional factor is that in this crisis it is not just the working class but also big sections of the middle class that have been affected – some of them quite severely. In the US, for instance, average wages of manual workers– still referred to as ‘middle class’ by the capitalist media as a means of blunting growing class consciousness – are at the level of the 1950s in real terms; the religion of everlasting capitalist progress has been shattered. The unrestrained piling up of wealth by the ‘1%’ – perhaps the greatest concentration and centralisation of capital in history, foreseen by Marx – has fuelled the protests. There have been many symbols of this in the past period but perhaps the most striking example is that of Bloomberg, the present mayor of New York, the 30th richest individual in the world – literally one in 230 million – who through his police sought to repress the ‘Occupy’ movement in ‘his’ city. The images of this were beamed around the world as was the indiscriminate use of pepper sprays against crowds in Seattle, one of those affected being an 80-year-old protester.

8. This comes after the earlier attacks on students in Britain, followed by punitive punishment, including draconian prison sentences, for the young people caught up in the protests at the end of 2010 because of the destruction of their future, which the massively increased university tuition fees and the withdrawal of grants for the 16 to 18-year-old mean. This, however, did not prevent the riots in London in late summer 2011. This bore out completely our contention that unless the labour movement provided an organised resistance to the savage cuts in public spending of the Tory-Liberal Democrat government on welfare, planned poverty, then an inchoate movement of despair would erupt from below. The government attempted to explain the riots in terms of the ‘criminality’ of those involved. This was entirely disproved by later reports which showed that most of those involved were poor, economically and culturally deprived, etc. On the other hand, others, like the SWP, sought to prettify the movement as ‘positive’, a genuine conscious uprising of the oppressed! This is equally wrong and moreover is potentially dangerous for the working-class movement.

9. Already alienated youth attracted towards anarchism – as Greece shows – have indiscriminately and provocatively attacked the police, which in turn has provided an excuse for the state to use repressive measures against workers involved in strikes and protests. Rightly, our comrades in Greece have criticised and separated themselves from such actions. These methods, particularly on the basis of defeats and setbacks, can lead to a section of disappointed youth, not all of them of petty bourgeois origin, resorting to the methods of terrorism. In one of the demonstrations in Greece, it was the workers themselves – members of the Communist Party (KKE) – who were subjected to physical attacks. Such methods are totally alien to genuine Marxism. Even if these young people and workers are genuine in the belief that such methods can undermine and eventually overthrow capitalism, it is the duty of Marxism to counter this mistaken approach. Reaction can only gain if these methods persist, both in providing an excuse to the state to use repression but also, at this stage in particular, alienating sections of the middle-class and even workers who are maybe joining the struggle for the first time. It is therefore necessary to educate the new generation in combating anarchistic methods which can lead into a blind alley for the workers’ movement. We need to point out in particular that, historically, it was not those who started out with bombings and terroristic methods which led to overthrow of the tsarist regime and landlordism but the Bolsheviks, basing themselves upon the working class with the methods of mass struggle, the general strike, independent committees – soviets –and workers’ and peasants’ power.

10. The serious, more farsighted bourgeois have shifted their original position from outright hostility to the ‘Occupy’ movement into seeking to co-opt it, to ‘assimilate’ it. They are attempting to lean on the ‘leaders’ or ‘non-political’ spokespeople of this movement to lay the basis for cutting down some of the more glaring blemishes of capitalism with a ‘Tobin’, or ‘Robin Hood’, tax on financial transactions. And, given the alarm at the top of capitalism at the turn of events, it is not excluded that some measures of a cosmetic character could be undertaken against the banks, for instance, and even the ‘rich’. The panic in bourgeois circles in general was summed up by the right-wing founder of the Independent newspaper in Britain, Andreas Whittam-Smith, who wrote recently: "Western nations are now ripe for revolution." The purpose of Whittam-Smith and the bourgeoisie for whom he speaks is not to prepare to commit suicide or depart from the scene of history but to use these movements as a lever to save if possible and renovate the capitalist system. Moreover, the lack of a clear alternative from most of the leaders is assisting them in this task.

11. The ‘Occupy’ movement is the widest global movement since the collapse of Stalinism. It encompasses more of the world and is deeper than the anti-globalisation movement of the turn of the 21st century. Although it is ‘anti-capitalist’ in essence, the ‘Occupy’ movement does not seriously challenge capitalism; many of its leaders do not propose ‘system change’ but seek to ‘mend a broken system’. Incredibly, some on the left, even including Trotskyists like the USFI (in Spain, for instance), have sought to reinforce the ‘non-political’ posture, which on the part of the youth who participate represents the rejection of pro-capitalist ‘politics’ and the big parties which reflect them.

12. Never before in history has it been more necessary to stress the need for organisation, for a mass workers’ party, as a vital step in the development of class consciousness; ground won in the past has to be reconquered again and again. To some extent because of the turning back of the wheel of history, we face some of the tasks of Lenin – set out in his pamphlet ‘What is to be Done’ – on the need for a party to combat false ideas, in his case those of the ‘Economists’, of so-called ‘spontaneity’, opposition to ‘politics’, etc. Of course, we face an entirely different period. We are not starting with a blank sheet. There is the accumulated experience of the working class and the formation of parties. But we still have to reckon with the deep scepticism – a product of the betrayal of the ex-social-democratic parties and Stalinism – which affects the new generation, and leads them to the dead end of ‘anti-politics’. This was indicated clearly in the recent elections in Spain: ‘They don’t represent us’, ‘they are all the same’; ‘the polls are in the safe custody of the European Central Bank’. Moreover, spoiled ballots, abstentions and blank votes were 11 million, more than voted for the right-wing victors, the Partido Popular.

13. This movement, which at one stage assumed mass proportions in some countries – Spain, Greece and, to some extent, in the US – represents a necessary stage of a confused but important political reawakening. This was inevitable given more than 30 years when the ideas and influence of neoliberal capitalism dominated and were enormously reinforced by the ideological offensive of the bourgeois in the period after the collapse of Stalinism. These movements hold out the hope, for those participating and those observing them, of drawing revolutionary conclusions. The precondition for this, however, is the intervention of the labour movement and in particular Marxism, which, while being sympathetic and sensitive, argues against the ‘non-political’, anti-party stance of many who have been drawn into this movement.

14. At the same time we have never had a fetish about organisation and a party. Of course, a mass party will be necessary for the working class to conquer and hold power. However, the way in which this will be constructed – which will vary according to the concrete circumstances in each country – has to be worked out in the course of events and through the experience of the working class itself. Parties, particularly of a mass character, in this explosive era may not be constructed in a linear fashion, step-by-step, like mass parties were built in the period before the First World War. Such is the severity of the present crisis – reinforced by the message from bourgeois leaders that the working class faces ‘endless austerity’– that one can perceive of a situation where this could lead to a mass uprising, which could result in the masses being compelled to move in the direction of power. After all, this is what happened in Spain following the uprising in July 1936 and also in Portugal after the failed Spinola coup of March 1975, when the banks were expropriated and most of industry was put in state hands. In these situations, the question of the rapid building of a mass party was posed – and moreover was possible – if there had been a subjective factor not necessarily of millions but of thousands or tens of thousands of cadres who were politically and theoretically armed to intervene in the situation. This is in no way to make concessions to anti-party or anti-organisation moods that exist. On the contrary, it poses sharply the vital necessity of the building of an organisation, of a revolutionary pole of attraction, which is capable of intervening in the situation and building a powerful force of the working class, particularly to consolidate power as the working class moves towards revolution in real pre-revolutionary situations. Merely to pose this question at this stage indicates the political sharpness which is required by us in this period.

The general strike

15. The general strike has come back forcefully onto the agenda of the workers’ movement, particularly in southern Europe. In Greece – with seven general strikes in 2011 alone, including one-48-hour strike and not including public-sector strikes! – in Spain, Portugal, Italy and in recent years, in France, one-day general strikes and partial ‘general strikes’ have featured. But Northern Europe will catch up, as shown by the one-day public sector strike in Britain in November. This was a colossal and effective strike, involving at least one and a half million workers, the biggest in absolute numbers since the 1926 general strike, and was a landmark in the history of the workers’ movement. The Belgian trade union leaders tried to sidestep calls for a general strike by organising the 2 December 80,000-strong daytime demonstration in Brussels, but support for general strike action is growing, especially in Wallonia in struggle against the planned partial closure of the ArcelorMittal steel plant in Liège where, significantly, the trade unions are officially calling for the company’s nationalisation.

16. General strikes implicitly pose the question of power before the working class and the labour movement. However, it is not posed in this way at this stage in the political outlook of the working class. The reasons for this we have sketched out in previous material: the legacy of the collapse of Stalinism in the form of pro-capitalist ideology and a consequent political immaturity of the working class, as well as the opportunism of the trade union leaders who are afraid of going outside the limits of capitalism. Not least of the factors holding back the working class from drawing all the necessary conclusions from the current situation is the weakness of the alternative revolutionary pole of attraction. Therefore, general strikes which represent a high point in working-class struggle take the form, at this stage, more of mass protests than serious preparation to take power out of the hands of capitalism which is ruining industry and society, in the process dragging the working class into an economic and social abyss. However as the working class is hardened through struggle with the creation of a new generation of fighters and particularly cadres, this will change and new general strikes which do raise the alternative of a new society of workers’ power and socialism will be posed in workers’ minds.

17. Moreover the struggle will take different forms at different stages. In Greece for instance the number of one-day general strikes that have taken place is incredible; in fact it is unprecedented. This was followed by the 48-hour general strike and our Greek organisation was the first to raise and popularise this slogan. In this sense, the Greek workers have outdone the Argentinian workers who had a similar struggle to theirs at the turn of the century. It is not just the working class but broader layers, including sections of the middle class, which are being drawn into the strikes, which have therefore assumed some of the characteristics of the ‘hartals’ of India and Sri Lanka with the towns and countryside, virtually the whole population, participating in such action. At the same time when the masses are checked in one field – in this case the industrial plane – they turn to the alternative, the electoral field. While industrial and social struggles will continue in the next period, it is likely that the masses will now turn in this direction with promised elections in early 2012. This will require our Greek comrades to raise the alternative of a workers’ government to the right-wing alternatives of Pasok and New Democracy. The precise expression of this in terms of parties to support has to be worked out in discussion.

The revolutions in the Middle East and North Africa

18. The revolutions in the Middle East and North Africa are, with the events in Greece, the most important developments for the workers’ movement in the past year. Tunisia and particularly Egypt, the world’s oldest nation state, have exercised a magnetic effect on the masses throughout the region. They also resonate powerfully in the neo-colonial world and in the advanced industrial countries as well. For instance, in the USA they helped inspire the Wisconsin protests and the Egyptian flag flew over the ‘Occupy’ movement in Oakland and elsewhere. However, as in all revolutions, particularly in the period after the overthrow of a dictatorship, illusions are generated in the masses that the main job has been completed. In reality, because the revolution has not been completed, right from its outset the forces of revolution and counter-revolution have vied for supremacy. The liberal bourgeoisie and the Islamists have tried to contain the revolution, together with the remnants of the old regime. They seek to engender a mood of class conciliation, of ‘national unity’. They instinctively oppose all attempts to organise independent action or organisations of the working class. Moreover, amongst the masses, who seek the line of least resistance in the first instance, this mood can also exist. Even where there is a strong revolutionary party that seeks to warn the working class and counter this from the outset, as with the Bolsheviks in 1917, this mood can exist for a period, allowing the establishment of class collaborationist, coalition governments. It takes time and events, together with the intervention of the revolutionary forces, to change this. In the case of Egypt there was no mass force in the underground which could perform this job.

19. In the vacuum that existed, as with other cases in history – Poland under Stalinism, in Iran under the Shah – religious forces, with roots amongst the masses, can initially provide a force, a pole of attraction, around which the opposition to dictatorial regimes can mobilise. This role in Egypt has been played by the Islamist Muslim Brotherhood and the mosques. They were persecuted, which enhanced their attractiveness to the exploited workers and peasants, as were the network of charities, enterprises, etc, which they built under Mubarak and, previous to him, Sadat. Consequently, they were well placed to exploit the current elections in which they have received an estimated 36.6% of the votes counted so far. In addition to this, the more fundamentalist expression of right-wing political Islam, the Salafists around al-Nour, linked to the more fundamentalist Wahhabi brand of Islam emanating from Saudi Arabia and the doctrine of Al Qaeda, seems to have done well with almost a quarter of the votes in the cities that had voted by 5 December and probably could register more than this in the countryside.

20. If they are allowed to form a government then the Brotherhood will come under serious examination. They are, in any case, a more conservative force than in the past. They abandoned the struggle to overthrow the dictatorship, concentrating on providing the organisation to feed the poverty-stricken masses. They initially stood aside from the revolution which caused splits, particularly amongst the youth within their ranks. Unlike the Iranian revolution, when radical Islamic forces initially developed, the Brotherhood is politically conservative, accepting the free market, not favouring independent trade unions and rejecting ‘extremist’ brands of Islam in favour of the Turkish model of Erdoğan, even borrowing the name of Turkey’s ruling ‘Freedom and Justice’ party. This party was described by the New York Times as a “religious right of centre movement but no fanatical band”. This is also the favoured model for the ‘moderate’ Islamist forces throughout the region, including Ennahda, the party in Tunisia which emerged victorious in the recent elections there. However, the military council, SCAF, has no intention of ceding complete power to the ‘civilian’ forces. Another ‘model’ is Pakistan, where the army and the generals are the real ‘power behind the throne’ – the government and Parliament – and have been and remain so since the foundation of the Pakistani state.

21. There were big illusions in the military at the time of the overthrow of Mubarak – ‘the Army is with us’. And at its base and even amongst a significant section of the middle layers of officers, that was the case. However, the top generals, we warned at the time, were and remain an integral part of the ancien regime. In fact, we commented at the time that, in effect, the military carried out a ‘soft coup’ in overthrowing Mubarak in collusion with the CIA and American imperialism. They were terrified that the revolution under way – and it was and remains a revolution – was deepening and would not stop at the removal of Mubarak but would go further towards a social and economic revolution. The Egyptian revolution – the country contains one third of all Arabs – was above all a mass event, in which the working class, particularly in Suez, Port Said and elsewhere played a crucial role.

22. Once the masses have thrown off the shackles of a dictatorship, they inevitably come forward with pressing social and economic demands. There has been a wave of workers’ actions – attempts to establish independent trade unions – which had been effectively banned by the military, demanding that those culpable in the killing of the protesters at the time of the overthrow of Mubarak, as well as those who perpetrated the massacres in November, be brought to trial.. So great has been the disillusionment since the events of February that a questioning has arisen as to whether it was a real revolution in the first place. In fact, in both Tunisia and in Egypt the masses moved independently or semi-independently against the dictatorships of Ben Ali and Mubarak. They made the revolution but because of insufficient consciousness of their own power and a programme to achieve this they did not complete the revolution in a social and economic sense.

23. Revolutions, as Karl Marx pointed out, are the locomotives of history while counter-revolutions – dictatorships – are an enormous brake, throwing back consciousness enormously. Both in Tunisia and Egypt what we saw was in fact a political revolution which changed the main actors on the stage but did not touch the social foundations of Egyptian landlordism and capitalism. The generals have an estimated 40% stake in vital aspects of the economy. Moreover, US imperialism has donated an estimated $150 million to promote the “transition to democracy.” And the army still gets $1.3 billion a year from the US. The army in all capitalist states is the main guard of private property. Increasingly aware of the real situation, some of the participants in the February uprising now say that all that has been achieved is ‘a change of curtains’. That is true of the state but not of the consciousness of the mass of the people, particularly the youth and workers who participated in the revolution. And the masses have begun to pour onto the industrial, social and political stages. There is now talk, correctly, of the need for a second and third revolution. For this to happen, what is required is the building of powerful and independent workers’ organisations, both on the industrial and political stages.

24. Imperialism and its client states in the region were completely taken aback by the outbreak of revolution. Obama and the representatives of the strongest power on the planet were powerless to intervene, reduced to utterly pious regretful phrases about the role of US imperialism in propping up Mubarak. Sarkozy and Cameron were equally impotent. In Egypt and Tunisia, where the urban masses played the key role, military intervention was ruled out. US imperialism, that still views the region as of key strategic and economic importance, was in any case completely tied down in Iraq and Afghanistan, and therefore could not intervene militarily particularly using ground troops, even if that was possible. The same applied to its NATO allies.

25. Only with events in Libya, and to some extent in Bahrain, was imperialism given the pretext to establish a foothold against the revolutions. Our analysis of the uprisings in Libya, of NATO’s intervention and the subsequent outcome of the 9 or 10 months struggle has stood the test of events. We supported the uprisings against Gaddafi in Benghazi and other towns in Libya. At the outset they represented a genuine movement of the masses in opposition to the dictatorship. The committees established to administer Benghazi after the expulsion of Gaddafi and his henchmen, including the now imprisoned son of Gaddafi, Saif, appeared to be in the hands of genuine representatives of the masses and have a mass popular base. At this stage, the Benghazi masses were opposed to outside intervention by imperialism. However, the mobilisation of Gaddafi’s troops on the outskirts of Benghazi and the consequent fear of a massacre allowed imperialism the excuse to intervene militarily through NATO. The subsequent course of the war – orchestrated and controlled both in the air and on the ground by NATO – altered completely the character of the ‘revolution’. The CWI has always opposed the Gaddafi regime and has called for support for genuine mass movements to establish a real socialist, democratic society in Libya.

26. However, the war conducted against Gaddafi possessed all the features of a de facto military imperialist intervention. It is impossible for Marxists to give support to such an action. And yet, to their eternal shame, this is what some alleged Marxists did! The propaganda campaign against Gaddafi included manufactured hysteria and gross exaggeration of what would happen if Gaddafi’s forces were to occupy Libyan cities held by the ‘rebels’. It was claimed that massacres would automatically follow. No such things happened when Gaddafi’s forces fought the rebels for Misrata and other cities on the way to Benghazi. However, this was used to carry through real massacres on the part of the ‘rebels’ when they entered cities that were allegedly in support of Gaddafi and through the air war of NATO. It is impossible to calculate the exact number of victims arising from this but probably between 30,000 and 50,000 people were killed. It is not possible to describe the outcome as a victory for ‘revolution’.

27. What transpired in Libya in the beginning was a genuine revolution of an incipient character which was derailed by a counter-revolution in a ‘democratic’ form. However, as the scale of bloodletting and reprisals – sometimes against completely innocent people including black-skinned Libyans and foreign workers, some of whom had lived in Libya for many years – has been revealed there is profound questioning as to whether ‘democracy’ or counter-revolution currently dominates. In fact, the post-Gaddafi Libya is clearly a new fiefdom for imperialism to exploit its rich resources, particularly its oil reserves. Combining completely antagonistic forces from the Islamists to defectors from Gaddafi’s regime, and assorted ‘democrats’ of recent vintage, it is very unlikely that the Transitional National Council will hold together. Libya threatens to fall apart, as we warned before the war, and resemble in the future not so much a democratic Arcadia, which had been promised, but the nightmare of ethnic and tribal divisions along the lines of Somalia. We advocated an independent movement of the working class for Benghazi and a class appeal from them to the Libyan masses as a whole. A similar class approach is necessary in all the states in the region – the perspectives for which are impossible to compress into this document.

28. The movement in Syria is clearly at a crossroads. The number of victims arising from the regime’s repression is over 4000 now. Daily mass demonstrations take place and sanctions have been imposed both by the UN and now the Arab League. The latter is a severe blow to the elite gathered around the Assad regime because of its historic association with the Arab struggle. Only Iran – where the Shias are in the majority, unlike in Syria – supports the Assad regime. But Iran is also now facing sanctions because of its nuclear programme. As we have pointed out previously, it is possible that military action could follow this, which could trigger a regional conflict, including war. Indeed, with the near civil war in Syria all kinds of possibilities involving conflict could break out. Turkey, which is already involved on its borders with the flight of refugees into its territory, has already warned the Syrian regime that it might be compelled to intervene. On the other hand, Israel – which actually prefers the Assad regime to remain in power because of the fear of what would happen if it was overthrown – could also be drawn in. This could take the form of military action against Iran or Syria or both. The region is like a tinderbox where anything could happen. Then there is the Palestinian question, which could explode at any time. Moreover, all of this is taking place against the background of radicalisation – reflected in strikes and occupations – in Israel. A new period of generalised struggle, arising from the deepening of the world economic crisis and its severe impact in the Middle East and North Africa, is likely. We must energetically seek out the best sections of workers and youth and convince them about our ideas and perspectives.

29. The opposition in Syria appears to have gained ground in the past period. However, it is not clear that it has reached the ‘critical mass’ that could lead to a speedy overthrow of the Assad regime. Syria is very divided on ethnic and religious lines. This is why imperialism and neighbouring Turkey fear the breakup of the country. The bitter sectarian ethnic and religious conflicts that would result from this would have incalculable consequences on neighbouring states. The opposition is divided with most of the opposition coming from the majority Sunni population. At the same time the army – always crucial in maintaining the Alawite elite around Assad in power – has not yet disintegrated, although sections of it have defected to the rebels. Therefore, it is most likely that the struggle in Syria will be a more drawn-out one. The regime does not yet appear to be at its tipping point but in this highly unstable situation it could arrive at this position very quickly.

Severe economic crisis for capitalism

30. The ‘Occupy’ movement is highly symptomatic of the overall mood which is developing under the whip of this crisis. It also presages coming mass movements in many countries not yet seriously affected politically, and not just in Europe but throughout the world. This deduction arises from the perspective of an enduring long-term crisis of capitalism, which has formed the bedrock of the CWI’s approach since its onset in 2007-08. Our conclusion was that we had entered a period of revolution and counter-revolution because of the incapacity of the bourgeoisie to solve this underlying crisis.

31. This has been reinforced at each stage. However amongst the masses there were illusions that capitalism would be able to extricate itself: through state intervention, stimulus packages, etc. And these measures did have some effect in preventing an outright depression with mass unemployment along the lines of the 1930s; but they did not solve the underlying crisis. Moreover, the switch from semi-Keynesian policies in the US, Britain and to some extent elsewhere to austerity programmes reinforced the recession, with depressionary features following in their wake; capitalism now finds itself in a cul-de-sac.

32. The European ‘sovereign debt’ crisis illustrates the catastrophic consequences for capitalism, not just in Europe but throughout the world, of the financial credit bubbles, which grew exponentially and involved massive injections of fictitious capital during the boom in the ‘noughties’. This process, which goes back to the 1970s, was in turn the consequence of the lack of profitable outlets in Europe, the US and Japan. There has been some discussion and controversy in Marxist economic circles as to the immediate factors which lead to a crisis. However, Marx was careful not to single out just one trigger for the onset of crises. Undoubtedly, the limited purchasing power of the masses, which is inherent in the exploitation of labour power, examined by Marx, reinforced by the colossal inequality, which is a feature of the last 20 to 30 years, as well as the current attacks on living standards are big factors in the present crisis.

33. On the other hand, the long-term tendency of the rate of profit to decline, particularly when there is a drop in gross profits – which mostly concerns the capitalists – can be a factor leading to crisis. As we pointed out, this is certainly not the case in the current situation, where there is a colossal accumulation of cash reserves (what the capitalists call liquidity). Samuel Brittan, a British economist firmly in the Thatcher camp in the past but now fervent in his advocacy of semi-Keynesian measures, has pointed towards healthy profits presently in the coffers of big business which could provide the source of new investment and could, he maintains, in turn provide a spark to begin the process of growth. However, confronted as capitalism is with a big element of Keynes’s ‘liquidity trap’ – a hoarding of assets and money, low interest rates, fear that deflation will persist, etc. – the capitalists are refusing to invest, are, in effect, on a ‘strike of capital’. Creditors refuse to lend and borrowers – weighed down with leaden boots of debt – refuse to borrow more. At the moment, the system is jammed and, given government and private indebtedness, that is unlikely to change in the foreseeable future. All the economic institutions of world capitalism point to, at best, stagnation in the current economic situation – an ‘L-shaped recovery’ – with anaemic growth rates and, in some estimates, zero growth for the eurozone. At the same time, it cannot be ruled out that the paralysis of the bourgeois in the teeth of this crisis can lead to an outright depression or, at the very least, depressionary features – already there in some cases – in countries in Europe and even on whole continents.

China facing crisis

34. Nor can China provide the lifeline for rescuing ailing world capitalism. In 2008 when China faced a serious crisis, factories were closed and unemployment climbed exponentially. Consequently, the Chinese elite feared massive ‘social unrest’, code for revolution. So they ‘primed the pump’ through a massive injection of credit facilitated by the state banks that dominate the economy. This resulted in annualised credit growth of 170%, probably the biggest ‘economic stimulus’ in world history. China was allowed to do this because of its unique character. In this way, the Chinese elite managed to crank up the growth rate to double digits. But the other side of this was that factories and shopping malls were built on a massive scale which will never make a profit, with many them standing idle. This overcapacity is the price that China, particularly the ruling elite, was prepared to pay to prevent an uprising of the Chinese masses. They were able to do this because of the unique character of China. It possesses a considerable pure capitalist sector, particularly in the coastal provinces. But the remnants of the now disintegrated ‘planned economy’ still exercise an important, in some senses a decisive effect, on the direction of the economy. We have characterised it as a ‘state capitalist’ regime of a ‘unique kind’. Its ‘uniqueness’ is indicated by the considerable concentration in the hands of the state, some estimate a majority, of banks and industry, but with a substantial ‘pure’ capitalist sector. There is no comparison to this kind of state, which exists in China at the present time. It allows this regime to do something in the midst of a crisis that no other is capable of doing; a massive stimulus package, which has created jobs not just in China but indirectly with those trading with China, such as Germany.

35. However the other visible side of this process is huge overcapacity – fuelled by bank credit – and a bout of inflation, which the Chinese regime now appears to have under control. Officially, government debt remains below 20% of GDP. However, if you factor in the local government infrastructure loans and sundry other commitments, the Chinese national debt is closer to 70% of GDP. Edward Chancellor in the Financial Times [5 December] comments: “Beijing cannot repeat the massive stimulus package of 2008-09. That was a one-off trick for which the bill of reckoning remains to be paid.” However, a second stimulus package of some size cannot be ruled out. This process was reflected also in the chronic housing problem. This goes together with massive corruption and the growth of inequality, which is recognised to have aroused the indignation of the masses. It is estimated that the growth rate is likely to drop to about 8%, which will immediately affect those countries whose manufacturing industries have received big benefits from the Chinese economy, like Germany, and some of the commodity producers, like Brazil, who have increased their trade with China but now will probably face a contraction. Not least of the effects will be the fuelling of discontent, which is rising amongst youth and the working class against the unacceptable social conditions that now exist in China. Since 2008, China’s stock of private credit (or ‘social finance’) has grown to an extent that it has exceeded the credit growth of the US in the years prior to the Lehman Brothers collapse. The slowdown in the world economy could have a serious impact on China’s economy.”

36. The capitalist crisis is not just economic but profoundly political, particularly at the summits of society, with the biggest and most open clashes within the ranks of the bourgeoisie for decades. Their political leaders are treated almost with disdain for their inability to show a way forward. They are like a football crowd dissatisfied with their manager and shouting, ‘You don’t know what you are doing!’ Their ineffectiveness was quite clearly demonstrated at the Cannes summit of the G20 in November. In the run-up to this meeting, the press was full of optimism, echoing Obama’s slogan, with the French pronouncing: "We Cannes do". Afterwards, the conclusion was: "We Cannes not do"!

37. This gathering also served to illustrate the decline in the economic power of US imperialism. In the immediate period after the Second World War, US imperialism through the Marshall plan was able to impose its economic will in the capitalist world. Even at the summits in the past 10-20 years, the US was able to wield its influence on economic policy. At this gathering, Obama was completely unable to impose on ‘Europe’ economic solutions beneficial for the continent and, of course, for the world as a whole. Sarkozy was also treated disdainfully – he was forced to publicly kick his heels – until the Chinese president, Hu Jintao, eventually deigned to turn up to meet him. This was supposed to be the platform to launch Sarkozy’s bid for a second presidential term as he paraded himself before the French people as the ‘saviour’ of European and world capitalism. His proposal for China to use its colossal reserves to underwrite the euro in the form of loans and guarantees to the European Central Bank (ECB) was dashed within days of its announcement. Even if it wanted to, the Chinese regime will be incapable of selling to its own population – with average GDP per head on the level of El Salvador – the massive transfer of funds to prop up the pensions of ‘rich Europeans’.

38. The failure of capitalist summits to offer a way out of the economic crisis is accompanied by the open inability to take or coordinate any serious measures on environmental issues, especially climate change. In fact, the opposite process is happening; even such limited and ineffective measures as the Kyoto protocol are history and several states are opting out. The Durban climate conference (COP 17) is a manifestation of this failure. After a minor decline in carbon dioxide emissions in 2008 and 2009, even the US Department of Energy’s latest world data shows an unprecedented increase in 2010. It is worse than all worst-case scenarios put forward by the experts of the IPCC (the UN’s world climate council) four years ago. With an additional 5.9% rise in emissions in 2010, the speed of the increase reached a new all-time peak. While some of the demonstrations linked to the COP 17 summit have been smaller than in the past, this inability to find a solution has a big impact on the consciousness of workers and especially young people. Environmental questions will be a trigger again for protests and rebellion in the future.

Europe in ferment - France

39. Sarkozy himself is under siege – as with all governments of Europe –because of the effects of the deteriorating economic situation in France, with unemployment rising. He faces an uphill battle to secure a second term in April and May’s presidential elections. There is the ‘drip drip’ of job cuts; the car giant Peugeot has angered unions with its proposals to scrap 5,000 jobs from a total worldwide workforce of 200,000. The threat to France to downgrade its credit rating is being used by Sarkozy to prepare the ground for savage cuts: ‘spend less and work more’. There is a noisy campaign by the government and the employers to cut ‘labour costs’. It is alleged that the hourly cost of labour in France rose by €9 between 2000 and 2010 and in the same period in Germany it rose by just €4. This is just one example of the way the bourgeois in each country play off their working classes against one another – dragging in at the same time the terror of the ‘downgrading’ of its national debt – in order to justify the huge reinforcement of neoliberal policies.

40. The employers are also demanding the complete scrapping of the remnants of the 35-hour week, which it alleges is a ‘handicap on the cost of labour’. France being France, the working class, despite elections on the horizon, is bound to move onto the industrial plane in answer to these attacks in the next period. However, they will also look towards the electoral plane. The more advanced detachments of French workers will be searching for a clear fighting alternative. It will not be forthcoming from the main challenger to Sarkozy, the Socialist Party candidate Hollande, who is already committed – like his ‘social-democratic’ cousins throughout Europe – to cutting the debt, meaning further attacks on the working class. However, if he is successful in defeating Sarkozy and carries out similar policies, as he will, then he will meet with ferocious resistance. In the ‘primaries’ to select the Socialist Party’s candidate, there was a massive turnout, reportedly of about 2 million. This does not at all vindicate the method of ‘primaries’, borrowed from the broken political system in the US. This is designed to dissolve the organised strength and politically-aware membership of a party into the raw mass, influenced by the press, etc. But it was a powerful expression of the yearning of huge swathes of the population, particularly of workers who feel disenfranchised, when no candidate or party really expresses their views. They therefore turned out in huge numbers and in the first round 17% voted for the ‘left’ candidate Arnaud Montebourg. His programme was only vaguely left but struck a chord because of the implied criticisms of capital and the suggestion of a radical alternative.

41. Imagine the response if the NPA, in the past period, had organised itself properly and formulated a clear class struggle perspective, intervening energetically in all of the myriad industrial and social conflicts of the past few years. Our French comrades reported that there had been 77 strikes in France between February and the beginning of June alone. The NPA would now be a serious contender for garnering at least some of the support that presently goes to other left forces and candidates. Unfortunately, it appears as though the NPA will not be a serious contender in the elections. This itself is a criticism of the still leading force within the NPA, the former LCR, French section of the USFI, who have been incapable of building on the success of the 2002 elections. It is still necessary for us to assist the best workers and youth who wish to transform this party into a real fighting socialist pole of attraction. At the same time, it is urgently necessary to attract to our own banner those both within the NPA as well as a considerable section of workers and youth who remain outside its ranks. In the convulsive events are that opening up in the country, France and the French working class will reclaim its place in the first rank of radical and revolutionary forces in Europe.

Germany – dominant force in Europe

42. Germany has long been the leading economic force in Europe. However, the Eurozone crisis has forced it to be a more overt political force. The representatives of German capitalism have assumed the mantle over the rest of Europe as the US did towards the world in the past. It has used the eurozone – with interest rates set by the ECB, which it dominates and attunes to its interests– to put the rest of Europe on ‘rations’. This was tolerated – indeed, it was enormously beneficial – by the ‘periphery’ because it allowed them to borrow at low interest rates, which allowed them to ‘grow’ although at the cost of piling up huge debts. The quid pro quo for Germany was that these countries and the rest of Europe provided the markets for German exports, industrial exports in particular. China also represents a huge market for German goods but with the likely slowing down of the Chinese economy– latest estimates say that growth rates could slump below 8% – sales of these will fall. The other side of this, of course, is that other countries, particularly the weaker ones, were placed in a currency straitjacket, which has proved disastrous – as we anticipated – once the boom turned into bust. Nevertheless, German capitalism has made huge financial investments in the eurozone by its banks purchasing sovereign bonds and this why they are exposed to its collapse.

43. The attacks on the living standards of the German workers in the earlier part of the last decade , through the programme of wage cuts, part-time and precarious work etc., has up to now given German capitalism a competitive edge in exports . Both Europe and China have provided the main outlet for these, which will not necessarily be the situation in the future. A period of competitive devaluations, which would follow the breakup of the eurozone, could have a devastating effect on the German economy, with one estimate concluding it could result in the loss of at least one million jobs in Germany.

44. Angela Merkel, expressing the confidence of the German ruling class, bestrides Europe as an imitation ‘Colossus’, waving the big stick at perceived economic sinners throughout Europe, but she does not cut the same figure at home. Unemployment has gone down yet her coalition government– with the former ‘liberals’ of the FDP – is not popular and could collapse at any time. Moreover, she has to face big opposition within her own party, the Christian Democrats, over Europe with some sections of the party, backed by elements of big business, threatening to split and form a new eurosceptic party. Industrial production has fluctuated up and down in the latter months of 2011, reinforcing the worries of the more farsighted representatives of German capitalism and Merkel herself of the consequences for them of the current world and European economic death spiral and particularly the threat of a deepening of deflation. She has floated the idea of a minimum wage, partly for this reason but also because she wants to lay the basis possibly for ditching the waning FDP from the government. This in turn could prepare the way for a grand coalition with the SPD, but it is also possible that a split in the ruling coalition will force early elections.

45. While DIE LINKE has suffered regional election setbacks and its national opinion poll standing has fallen to around 8%, it still has the potential to grow and act as a rallying point for left opposition, particularly when the SPD is back in the federal government. Like some of the other left parties, for example the IU in Spain, DIE LINKE has moved leftwards in response to the crisis. It recently adopted a left reformist programme that combines openness on participation in capitalist coalition governments with calls for “system change” and pledges that “we want to build a democratic socialist society”. The combination of DIE LINKE being the only Bundestag party opposing the EU leaders’ ‘rescue plans’ and the return of Lafontaine gives the party another opportunity to build support, however whether it is able to seize this opportunity is unfortunately an open question.

Britain

46. The onset of the crisis has profoundly affected Britain, particularly since the election of the ConDem coalition government last year. The catastrophic errors of the British ruling class have been exposed. It has allowed its manufacturing base to atrophy in favour of investment in financial services, which in turn have collapsed. All the layers of fat built up to cushion British capitalism from economic storms have been eaten away. Its empire has gone and North Sea oil revenues have begun to run dry.

47. Unprecedented cuts in living standards have been implemented with more to come. The government admits that living standards in 2015 will be lower than they were in 2002; society will have stood still for 10 years! This will go down historically as a lost decade, with a lost generation of one million young people and one million women already unemployed, with more to follow in the dead-end of joblessness.

48. Britain faces a situation it has not confronted for 80 years. The ConDem government’s declaration of war against all the rights and conditions of the British working class – for this is what it represents – is the greatest challenge since the period immediately prior to the 1926 general strike. This explains the ferocious reaction of the mass of the working people reflected in the huge demonstrations and strikes in 2011: 26 March, the biggest specifically working-class demonstration in history; 30 June a partial public-sector strike; and the mammoth 30 November strike.

49. The official leadership of the Trade Union Congress (TUC) has been compelled to go where they did not want to and that was to ratify action against the government’s plans. In this, our comrades played a key role, especially where we have considerable influence on the left in the unions. Above all, the battle that we have been engaged in the National Shop Stewards Network (NSSN), where we mobilise from below as well as from the top within the trade unions, has paid dividends in helping to bring about this situation. Our youth comrades have also conducted a heroic and energetic campaign against youth unemployment, including the new Jarrow march, as well as intervening in the riots in London, etc.

50. The situation in Britain illustrates many things: the blind alley of capitalism and the lack of an alternative of all the major parties and organisations. This includes the great majority of the trade union leaders, particularly those on the right. It also illustrates the role that can be played by a small organisation which possesses clear perspectives. It can have an effect much greater than its size. This is what we have achieved in Britain at the present time. However, it is not sufficient just to build influence but serious forces have to be organised in the party.

US workers begin to fight back

51. The crisis is clearly illustrated by the deadlock in Europe between the different European powers over what economic direction to take. If anything, the divide between different sections of the ruling class and their alleged representatives in the US is even more pronounced, expressed as it is in the stand-off between Congress and Obama over the

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