Capitalist crisis, a socialist alternative
The CWI has produced this book as a contribution towards providing the theoretical, strategic, and tactical basis for the building of a revolutionary Socialist International in the run-up to the year 2000 and beyond. It is also designed for those worker activists and socialists who have a general interest in world political, economic and social developments.
The Seventh World Congress of the CWI, held in November 1998, took place in a period of deep crisis for world capitalism, and slump in some areas of the globe. The World Economic Summit in Davos which brought together the world’s leading economists, businessmen and capitalist politicians in January 1999, produced no united approach on how to deal with the economic crisis. The attitude of serious capitalist commentators at this time was marked by foreboding and pessimism of what the future would bring.
This was in complete contrast to their triumphalist approach at the time of the previous CWI World Congress in 1993. Then, their propaganda was an ideological tirade about the superiority of the market, the death of socialism and the obsolescence of working class struggle to achieve change. As far as capitalist commentators were concerned, international conflicts were to be solved by US imperialism's "New World Order". Even at that time the CWI explained that the post-Stalinist euphoria about the supremacy of the market would not last and the fundamental contradictions in the capitalist system would shatter the propaganda of the ruling class internationally.
The Congress took place against a backcloth of world events which confirmed this analysis. It gave the CWI the opportunity to draw up a political balance sheet of the previous decade and to outline perspectives and tasks for the future. It was clear from the discussions that the effect of the development of economic crisis would lead to further political polarisation and radicalisation with the prospect of the emergence of big defensive battles of the working class. It also gave delegates the opportunity to identify the processes leading to the reconquering of socialist ideas amongst the working class internationally - as an alternative to capitalism.
The main discussions at the Congress were on world relations, Europe and the former traditional workers’ parties, and revolution and counter-revolution in the semi-developed world. There was also a discussion on Regroupment, which debated the possibilities of fusions with other socialist forces and organisations formally subscribing to Trotskyist ideas. The other main discussion was on the vitally important issue of building the CWI.
The complex world political situation following the collapse of Stalinism in 1989 has posed a number challenges to Marxists internationally on tactics, strategy, and perspectives. This has led to more debates on the challenges and tasks facing the CWI in its work to build a mass revolutionary International. The debates at the Congress helped to clarify the points under discussion. The post-Stalinist period has meant that all forces on the left have encountered difficulties in maintaining their organisations. The forces of the CWI may be somewhat smaller than previously, but the clarity achieved on political perspectives and tasks at the Congress leaves the CWI membership politically strengthened and prepared for the tasks that lie ahead.
One of the main themes in the discussion on world relations was the forthcoming world economic slump, its character and timing. Recent developments in Brazil indicate the possibility of economic slump spreading to the major western economies sooner rather than later, a prospect outlined at the Congress. In mid-January, there was a speculative attack on the Brazilian currency, the Real, following the debt moratorium announced by the governor of the country's third largest state. The Cardoso government devalued the Real by 50%. Brazil's economic crisis threatens to draw the whole of Latin America into deep recession or even slump. The situation had an immediate effect on the Argentine economy. The crisis in Brazil will have a potentially far more damaging effect on the world economy, and in particular the US economy, than the economic collapse in Russia did in August 1998.
One of the main themes of the Congress was the prospect of bitter defensive workers' struggles as a consequence of the crisis. This was demonstrated in Brazil following the sacking of 2800 workers at Ford's factory in Sao Paulo which led to a tenacious struggle by them to maintain their jobs. In an indication of the nature of the crisis that semi-developed countries will face over the next period, sacked workers have turned up to the production line in the factory and demanded to work as part of the tactics to regain their jobs.
Greek school students
Other movements internationally are a harbinger of future struggles of the working class. The four month long struggle of school students in Greece involved the occupation of over 2000 schools and demonstrations of tens of thousands in Athens and other major cities. This struggle resulted from government "reforms" of education which were designed to exclude large numbers of students from entering university education. The government mobilised the media and the police against the movement - at certain stages there were running battles between the police and school students.
The warning strikes by the 3.4 million strong IG Metall union in Germany in February 1999 are a foretaste of the type of struggles that could rock Germany as a consequence of the development of a European-wide economic slump. The concessions forced from the employers as a result of this strike are an answer to the argument that the industrial working class is a spent force in society.
A feature of the discussion at the Congress was the increased instability in the world political situation and the inability of particularly US imperialism, to solve protracted disputes around the world.
It was highlighted following the Congress, by US and British imperialism's decision to implement their threat to bomb Iraq during ‘Operation Desert Fox’. The exact timing of the operation was, in all likelihood, determined by Clinton's attempt to avoid impeachment proceedings. However, the main reasons for it were US imperialism's strategic and economic interests in the region - particularly the glut on the world's oil markets and the challenge to US authority that the continued existence of Saddam Hussein's regime represents.
Despite this concentrated air strike in mid-December, the limitations of US imperialism's power were still shown. Saddam Hussein was not dislodged from power. As the world relations resolution explained, the US could not commit itself to deploying ground forces because of the consequences in the Arab world which would result. The revelations concerning the use of UNSCOM special weapons investigators as spies for US intelligence agencies has further exposed the role of the UN as a puppet for US strategic interests internationally. As far as US imperialism is concerned it is clearly now no longer a question of compliance with UN resolutions on "weapons of mass destruction" but the removal of Saddam Hussein that lies behind their strategy.
Developments in the misnamed "peace process" in Israel and Palestine also illustrate the inability of US imperialism to provide a solution to one of the most intractable conflicts internationally. The Wye Plantation Agreement signed in October 1998, shortly after the world relations resolution was circulated, granted an extra 17% of the West Bank to the full control of the Palestinian Authority. The Wye Agreement represented another humiliating defeat for Yasser Arafat which he attempted to dress up as a victory.
Despite all concessions from the PLO leadership, Netanyahu froze the implementation of the Wye agreement, publicly on spurious grounds but, in reality, in a desperate attempt to save his right-wing coalition government. This failed and Israel faces a general election in May 1999. The falsely named peace process will be in deep freeze until then.
The instability in the Middle East, outlined in the Congress discussions has been further emphasised by the death of King Hussein of Jordan. The media tributes to him as a "peacemaker extraordinaire" indicate the fears that US imperialism has of the vacuum that his death may leave in the region.
Kosova’s insoluble conflict
Another insoluble conflict for imperialism - that of Kosova in the Balkans - has flared up again since the Congress. There was an early break in the cease-fire between the Serbian army and the Kosova Liberation Army (UCK in the Albanian language), with the massacre in the Kosova town of Drenica in January 1999. This brought the prospect of full scale war onto the agenda again and forced the western imperialist powers to act, but only after the massacre had taken place.
The western imperialist powers forced the two sides to the negotiating table with threats of NATO bombing raids if there was no agreement. The limitations of the UCK were clearly shown by the fact that they agreed to negotiations in the first place. Their pro-market and narrow nationalist political positions of this kind rule out the possibility of fulfilling the national aspirations of the Kosova Albanians under present conditions. The partial agreement arising out of the negotiations only lays the basis for conflicts at a later stage, since it solves none of the fundamental aspirations of the Kosava Albanians.
One of the features of the 1990s has been the internationalisation of the world economy. There was an in depth discussion about globalisation, as it is more commonly known, at this World Congress. Some capitalist commentators in the past have suggested that globalisation represents a qualitatively new and higher stage of capitalism, and through its adoption the world economy has overcome its fundamental contradictions and limitations.
In its material and at the Congress, the CWI recognised that globalisation did represent a distinct stage in capitalism's development, but within this new phase contradictions had arisen. The CWI has also explained that the process globalisation took place against a backdrop of economic growth in the so-called advanced capitalist economies. In the Congress discussion it was explained that the dominant trend of globalisation of the world economy would be checked and could even go into partial reverse with the onset of a world-wide economic slump.
Globalisation - a new phase?
These issues formed an important part of the discussion on world relations. Some delegates, for example from Austria, questioned whether globalisation actually represented any real change and argued that its main use was as an ideological weapon against the working class internationally (as their amendment in the appendix shows). The Congress concluded that although it is used as a propaganda weapon against the working class, globalisation did represent a distinct phase in world economic developments. Whilst the CWI has produced a number of articles dealing with different aspects of globalisation, it was agreed that the CWI’s International Secretariat should produce a full and updated statement on the question following the Congress.
The Swedish comrades also submitted an amendment to the world relations resolution dealing with China. The position of the IS was that the process of capitalist restoration has not been completed in China. However, the Swedish delegates were of the opinion that this process is completed. It was agreed at the Congress that this debate would be carried out in written form in the period after the Congress.
During the discussion on Europe, there was further debate on the perspectives for the Euro and European Monetary Union, an issue which has been raised in previous international meetings of the CWI. The Swedish delegates explained in an amendment to the resolution on Europe that, although a serious world economic slump could lead to the collapse of the Euro and EMU, this was not the only perspective. They explained that the political and then economic effects of the collapse of the EMU would mitigate against the possibility of its breakdown.
The majority of delegates disagreed with this point of view. The IS's point of view was that under the political and economic conditions of a world slump, EMU would not survive in its planned form. The social consequences of huge national debts and mass unemployment - which would result from all the national economies being locked into one currency with no room for manoeuvre through devaluation of their currencies or resort to inflationary measures - would make it extremely difficult for countries to remain in the EMU.
Under such conditions, clearly the major European powers would do their utmost to maintain a fiction of EMU, probably in the form of a "Deutschmark" zone including the Benelux countries and Germany. However, even this would represent a major defeat for the capitalist powers, and would be qualitatively different from the monetary union they first envisaged.
One related issue which was discussed was whether the Euro would be launched as a currency in January 1999. In the view of the IS, it was not excluded that this could be delayed if there was a rapid descent into economic slump in the world economy. As subsequent events have shown, this did not happen, and the Euro was launched. The "euro-phoria" which gripped the world for the first week after the launch has seeped away. The head of the European Central Bank, Wim Duisenberg explained in early February: "The Euro's recent fall is a matter of puzzlement not concern". However, "concern" will rise as the effects of the world economic slump make itself felt on the value of the Euro on the world's currency markets.
In the Congress discussion on Europe and the former traditional workers' parties, delegates commented on the crisis of confidence in the bourgeois establishment. A common feature was the growing hatred towards the establishment and their political representatives as a result of the spate of corruption scandals which have rocked different countries since the CWI's last World Congress in 1993.
An illustration of the effects of the crisis in bourgeois institutions of rule was the attempt to impeach Clinton which took place after the Congress. The narrow political interests of the reactionary right wing of the Republican Party were the driving force behind it. In the end the impeachment attempt failed as public opinion moved decisively against the process. Sections of the US ruling class undoubtedly exerted pressure on the Republicans to ensure there was no drawn out Senate trial. Their fear was that this could lead to a fundamental collapse of confidence in the whole ruling "Establishment".
Developments in the political arena have illustrated the new period of instability for capitalism internationally that was outlined in the resolutions to the Congress. The attempt to deport General Pinochet from Britain to Spain to stand trial for crimes committed under the military dictatorship shattered the relative calm in Chilean society and brought all the fundamental social and class contradictions to the surface.
In a similar way, the arrest since the CWI Congress of Ocalan, leader of the Kurdish PKK, by Turkish security forces has had a direct impact on Greek society. The implication of the Greek PASOK government in these events led to a major political crisis. Immediately three government ministers were sacked and the underlying anger towards the government was unleashed in a tidal wave against the PASOK administration. It is not clear whether the government will survive these developments and early elections may be called.
The potential for further collapse in the support for capitalist politicians, particularly with the onset of a world-wide economic crisis, has been illustrated by events in Brazil. In Sao Paulo, 50% of people who previously supported Cardoso, the president, now say that they would not vote for him. This is a direct consequence of the inability of the Brazilian ruling class to avert the collapse of its economy.
In Europe, the election of social democratic governments, mainly as a consequence of a reaction against previous right-wing neo-liberal administrations, has not provided a way out for the ruling class. The new SPD-Green government in Germany has not even enjoyed a honeymoon period where the working class has had significant illusions in them. The government is seen as having no clear strategy to chart a way out of the growing difficulties that the economy is encountering.
The process of the further ‘bourgeoisification’ of the former traditional workers' parties, evidenced by the policies of many European social democratic parties in government, was also raised in the Congress discussions. The outlines of the change in the class basis of many of these parties was already under discussion at the World Congress in 1993. Since then their degeneration has accelerated and raised the need for the building of new workers' organisations and parties. This was also an important part of the Congress discussions.
New workers’ parties
The perspective of new parties has been illustrated by events in Israel since the Congress. Following the collapse of the Netanyahu government, delegates from all the workplace committees in Israel met in January 1999 to form a party to represent the working class in the forthcoming elections. Headed by Amir Peretz, the leader of the Histadruth, this is the first time such a party has been set up in Israel.
It is potentially the first step towards a workers’ party in that country, although its evolution is not guaranteed. The name of the party - 'One People/ One Nation led by Amir Peretz' - is an indication of the confused consciousness of some of the forces involved. Whatever the outcome, it nevertheless indicates the profound changes that have occurred in the consciousness of the Israeli working class and the loosening of the bonds between it and the Zionist capitalist state.
The CWI has repeatedly emphasised the fact that the post-Stalinist era means that Marxists are faced with a new situation where new tasks are posed. In the period after 1989 this sharp change in the international situation caused a crisis in many left organisations. Internationally many organisations which subscribed to Trotskyist ideas were forced to re-examine their previous perspectives and strategies and see where there were common points of agreement. The CWI took part in the process of opening up discussions between different organisations which we believed could lead to fusion on the basis of principled political agreement. The experience of this process showed that there was not the possibility of fusion in the great majority of cases, although the CWI will continue the process of discussion, debate and joint campaigning initiatives with different left organisations. At the Congress there was a debate on this issue between the IS and the French section. These issues are explained in more detail in the resolution contained in this book on ‘Building the International, Regroupment, and France’.
Since the last Congress in 1993, the role of the revolutionary party, its programme and tasks in a changed world situation has been constantly reassessed in discussions in the CWI. The twin dangers of ultra-leftism and opportunism have to be avoided. While attempting to rebuild the workers' movement, the maintenance of the distinct political programme and separate organisational independence of the CWI is of vital importance. Part of the debates at the Congress concerned the move by the Scottish section of the CWI to set up a new Scottish Socialist Party. This decision had been discussed within the CWI in the run-up to the Congress. The overwhelming majority of the delegates at the Congress felt that the Scottish comrades were not defending a genuine revolutionary programme or the organisational independence of the CWI within the new party. Documents relating to this debate are available from the CWI offices in London.
Building the CWI
The final Congress discussion on the building of the International demonstrated the sweep and depth of the work of the CWI. In this discussion comrades reported on the work of their different sections, giving other delegates the opportunity to learn from the shared experience. The discussion showed that CWI sections in Britain, Ireland, Nigeria, Sri Lanka and Sweden have become an important factor in leading struggles even on a national basis.
The developments of the new section in the CIS were a source of inspiration to Congress delegates. Working in some of the most difficult political conditions internationally, the CIS comrades had managed to build their section from handfuls of members in St. Petersburg and Moscow to over 74 members in five countries of the CIS. The paper of the section with a print run of over 2000 regularly sells out and is bought in 30 cities.
Since the Congress, the Democratic Socialist Movement (Nigerian section of the CWI) has played a central role in leading a strike of public sector workers in Lagos, Nigeria which won an important wage increase. As a result of the conditions of economic chaos in Nigeria, the government has refused to implement the pay award it agreed. Chilean CWI members have been involved in a leading capacity in the struggle of the Mapuche Indian minority to drive the army and police from their land in southern Chile. In Sri Lanka, the United Socialist Party has participated as part of the New Left Front in provincial elections and in a subsequent campaign against the rigging of the elections by the Popular Alliance government.
In Europe, members of the CWI sections in Belgium, Britain, Ireland, and Sweden will be standing in the forthcoming elections to the European parliament as part of the process of providing a genuine socialist alternative to the working class. CWI sections will also be involved in the build up to the Euromarch in Cologne to be held at the end of May 1999.
It was clear throughout the discussions that, despite the difficulties experienced in the early nineties, the majority of sections were well equipped to take advantage of the new political situation that will open up in the new millennium.
Although a slump could initially stun sections of the working class in some countries, delegates raised the perspective of tenacious and bitter defensive struggles of the working class. The economic slump would smash the illusions that remain in the market and prepare the way for a re-emergence of the ideas of socialism as a much stronger force amongst a radicalised layer of workers and youth. As a result the Congress agreed that the CWI should strive to achieve a fifty per cent increase in the global membership of the individual sections by the end of 1999.
The Congress also decided to produce a number of documents to help prepare the CWI to intervene in the impending struggles that will arise out of the economic crisis that capitalism faces: a written political platform for all the sections to use - a "Manifesto 2000" as well as a platform for the European elections,.
The political and organisational discussions at the Congress undoubtedly helped to crystallise the understanding amongst those attending that the CWI stands at the edge of a totally new period of developments internationally where the pace of events will be much quicker. The debates helped clarify what the tasks would be in this new period and the experience of the Congress left delegates optimistic and confident of what the sections had to do to take advantage of the situation.
Leon Trotsky explained at the founding of the Fourth International: "Our ambition is not only to have more members, more papers, more money in the treasury, more deputies. All that is necessary but only as a means. Our aim is the full material and spiritual liberation of the toilers and the exploited through the socialist revolution". This idea is the same driving force that lies behind the struggle of the CWI to build a mass revolutionary International.