Workers start the fight-back

Representatives of sections of the Committee for a Workers’ International (CWI) from Europe, Asia, Latin America and Africa are meeting in Belgium, this week, to discuss the world situation in a period of deep capitalist crisis and when working people are facing intense attacks against their living standards.

This week, we will publish summaries of some of the main discussions at the CWI meeting, beginning with the discussion on world economy and world relations.

“Worst capitalist crisis since the 1930s”

Opening the 2009 International Executive Committee (IEC) meeting of the Committee for a Workers’ International (CWI), Tony Saunois declared that the last year had been “extremely explosive and important for world capitalism and the CWI”. The first session on the world economy and world relations, introduced by Peter Taaffe of the CWI’s International Secretariat (IS), developed this theme. Hardly a country or region of the world could be considered stable now, said Peter. For example, real gross domestic product (GDP) in Africa had halved in the last decade. The BRICs (Brazil, Russia, India and China) had become the BICs since Russia’s economic implosion!

It was a “delicious irony” that the world’s leaders’ hopes of celebrating the 20th anniversary of the collapse of Stalinism in Eastern Europe as a “free market victory” had coincided with the worst capitalist crisis since the 1930s. One East German had commented to the Guardian (London) newspaper that “godless communism had been replaced by godless capitalism”!

At last year’s IEC meeting, the CWI commented that the capitalists would mortgage their future to prevent the recession becoming a global depression. This seems, for now, to have been achieved, but the difference between a recession and depression is academic to many of the world’s poor. Even in the US, cities like Detroit and entire states like California have been devastated by the economic crisis. This was despite the $14 trillion (30% of world GDP), which the capitalists have thrown into the world economy. The recent default of Dubai World was symptomatic of the kind of prospects facing world capitalism: prolonged depressionary features, with waves of shocks to the system. Following Dubai World, whole countries could face collapse, as Iceland had experienced previously: Ireland, Greece, Hungary and Ukraine, which was reported to have a 56% chance of a default, are all possible candidates. However, workers are fighting back. Irish public sector workers have shown their fury at being made to pay for the capitalists’ crisis through a series of mass demonstrations and strikes that have shaken the island.

No return to boom

It was clear, continued Peter, that there would be no return to the same economic position that existed before the unfolding of the subprime mortgages crisis marked the onset of the crisis. For a period, world capitalism relied on finance and credit to help it maintain profitability and markets, but now this road was being closed off. “Stimulus packages” have moderated the first effects of this new crisis, but now the working class, and many sections of the middle class, will have to pay. The cost of the slump was “equivalent to that of a war” said one commentator. The bursting of the bubbles created by the financial orgy pre-2007 would mean 10 years of savage austerity for the working class - unless it fights back.

For capitalism, the only supposed ‘bright spot’ has been China. There has been a reassertion of state control in the economy and the estimated $600 billion pumped into the economy is creating new bubbles, particularly in the stock market and property. The international capitalists are trying to force the Chinese government to revalue its currency, the renminbi, but this would be an echo of the Plaza and Louvre accords, in the 1980s, which forced revaluation of the Japanese yen and sowed the seeds for that country’s two ‘lost decades’ of economic growth, an average of just 0.1% growth per annum since 1991! The Chinese ‘boom’ will not solve its or world capitalism’s problems. The world economy faces a drawn-out period of stagnation and even stagflation.

Afghanistan

Turning to world relations, Peter commented that the previous day’s announcement by President Obama that he was sending 30,000 extra troops to Afghanistan was an echo of the policy of ‘Vietnamisation’ of President Johnson during the Vietnam War. That did not work and neither will this! Not even Alexander the Great was able to subdue Afghanistan. This is now a regional crisis, involving Pakistan, where the Taliban was fighting the Pakistan army. Obama will appoint a viceroy to Afghanistan and force President Karzai to accept his rule, but the whole region was unstable and the poverty of the masses terrible. Afghanis “can’t eat democracy”, as one commentator put it.

The Middle East is also heading towards further and deepening conflict. The plight of the Palestinians remained unsolved and would do under capitalism. The mass of oppressed Palestinians are now increasingly very sceptical, to say the least, about a ‘two-state’ solution under capitalism. Added to this, is the threat of Israel to attack Iran’s nuclear plants and the danger of a bloody regional conflict.

In conclusion, Peter emphasised the role of bold socialist ideas in the unfolding processes. The far right has managed to partially occupy some of the political vacuum following the economic recession but this is still the first phase of the crisis and their poisonous and false ideas will be undermined as it continued - if socialists gave a lead. Unfortunately, some of the new left parties formed in recent years have turned to the right, disappointing sections of working people. But the idea of new workers’ parties, given the political vacuum on the left, is gaining ground.

The CWI has developed over the last year, featuring at the head of important industrial struggles and with the election of Joe Higgins to the European parliament. The next period is favourable for socialists, with capitalism in deep crisis and the CWI can be enormously strengthened.

India

In discussion, a number of comrades made valuable points. Comrade Yuvraj from India pointed out that serious capitalist politicians, like Peter Mandelson in Britain, were stressing the need for British capitalism to turn to manufacturing but he and others ignored that investment went where the most profits were. Al Gore called for “sustainable capitalism” but the contradictions of capitalism were so deep that they could only be solved by abolishing capitalism, as a whole.

Several comrades discussed the recent movements of the working class and youth. Sonja described the student occupations in Austria that had linked up with trade unionists demanding higher wages. Ainur from Kazakhstan said that over 50 workforces had come out demanding nationalisation of their factories in recent months, including 30,000 oil workers, supported by coal and mineral miners. Large sections of the middle class in Kazakhstan had been impoverished during the crisis and were now known as the “nouveau poor”. These struggles and protests were laying the basis for new independent unions and political formations.

Obama’s honeymoon over

Philip from the US explained that Obama’s honeymoon had ended. The hopes engendered by his election had evaporated amongst a section of workers and youth, caused by the economic crisis, the debate about affordable healthcare in the US and the big anti-war mood. Economist, Paul Krugman, explained that one of the reasons for Obama’s fall in support, with an approval rating below 50% in one recent poll, is that he has been “too timid” in economic policy. There was a massive anger against the banks and ‘banksters’ in the US, as elsewhere, and capitalism was facing its greatest questioning for decades in the US, with an increased interest for socialist ideas. In another poll, 35% of youth in the US said they would prefer ‘socialism’ as an economic system.

The potential for struggle in the US was underlined by Bryan, who reported on a militant split in the trade unions. The United Healthworkers, representing 150,000 workers, had left the SEIU because of the latter’s leadership’s rightwing policies. Mass struggles in the US, said Bryan, will lay the basis for an independent working-class alternative to the Democrats.

Ayesha from Lebanon described the poverty of the Egyptian masses and the lack of any political force to represent them, despite their burning anger. The Egyptian capitalists were building up a social explosion for the future.

Hannah from England and Wales outlined the huge figures for state debts of the major world economies: Britain 87% of GDP, the US 98%, Japan 200%! This was due to the unprecedented scale of intervention to prevent a depression. Even if a depression is avoided the future for the working class was terrifying without a struggle. Implicit in the situation are general strikes of one day or longer. Britain had only had one general strike in its history, in 1926, and that followed a similar period of savage austerity, as proposed by all the capitalist parties today in Britain.

Several comrades made comments on the disastrous effect capitalism have on the environment and climate change. The CWI will energetically participate in the demonstrations surrounding the climate change conference in Copenhagen.

Capitalist economic relations break down

In replying to the discussion, Lynn Walsh, for the International Secretariat of the CWI, commented that capitalism was in its worst crisis since between the two world wars. The average losses of capitalist economies were 5% of GDP but some, like the Baltic States, had lost far more. The last period was dominated by neo-liberalism, globalisation and ultra-free market policies, which had been directed at restoring the profitability of capitalism. But this was at the expense of storing up a huge debt mountain: in 1980 world liabilities were equivalent to a year’s world GDP, but by 2005 this had reached four times a year’s production! The crisis had shown that one set of relationships had broken down without being replaced by a new set. The capitalists internationally were working on an empirical day-to-day basis as a response to the crisis.

Stimulus packages would need to be maintained to prevent a double-dip recession but this would be at the expense of state debt. How to reduce the burden of state debt had divided the capitalists’ strategists. Some, like Ben Bernanke of the US Federal Reserve or Mervyn King of the Bank of England, had become ‘converts’ to Keynesianism. Without the effects of ‘quantative easing’ (QE), there would already have been a crisis in the bond markets, so this camp is reluctant to remove QE and the financial stimuli. But another wing of the capitalists still follows the ideological stance of the past that affirmed state debt was inflationary. That would be the effect in ‘normal’ economic periods but this was not a normal period, it was a deflationary one. Despite this, most of the money from QE was sitting in the banks unused.

Gloomy capitalist perspectives

One thing all capitalist strategists agree on is that the working class will pay for the crisis. Wealth and corporation tax rises will be opposed but public services face huge cuts. The fact is that depressionary features will dominate the world economy for years.

In conclusion, the discussion showed that the prospects for the world economy were extremely gloomy. That meant the attacks on working-class living standards and conditions would be immensely stepped up. But the debate showed that the CWI was prepared for those attacks and was ready to arm the working class with the programme, strategy and tactics to counter the ravages of capitalism and show the way to a socialist future.

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