CWI Summer School: World capitalist crisis

The economy and inter-imperialist relations

This week, CWI supporters from over 30 countries are attending a CWI Summer School in Belgium. As well as comrades from across western and eastern Europe and Russia, visitors are attending from North and Latin America, Nigeria, Malaysia, Hong Kong and the Middle East.

Below, is a summary of a plenary discussion on world perspectives.

Niall Mulholland, from the International Secretariat of the CWI, introduced the wide-ranging plenary discussion on world economy and inter-imperialist relations by explaining how every part of the globe is affected by the deepening economic crisis. Due to globalisation, no continent has been able to escape and none of the fundamental problems have been resolved.

The ruling class worldwide is attempting to keep their priviledges at the expense of the working class and their rivals in other nation states. This means the development of new revolutionary movements and the developing possibility of global tensions and conflicts.

Capitalism is a system of extreme inequality. In the USA the top executives had a 38% increase in their bonuses in 2010, whilst two million people are currently on the verge of starvation in east Africa. Speculation in food prices has catapulted an extra 44 million people into poverty this year alone.

But the famine in east Africa is not an ’act of god’. Scientists believe that the region’s successive droughts may be linked to climate change. Local conflicts and imperialism’s meddling in Somalia have also contributed to the famine tragedy, as has the destruction of traditonal pastoral and sustainable ways of living by big business agriculture.

The environment is a vital part of perspectives today and forms a crucial part of the CWI’s programme, particularly now that the UK, China, Russia, and India all have plans to build more nuclear power stations. Environmental issues can shake governments and even bring them down.

In Australia, the Labour Party/Green government introduced a very unpopular carbon tax. Unpopular because the costs of the tax will be simply passed onto the working class by big business, while carbon emissions are set to increase.

To end famine, environmental disaster and poverty requires the reorganisation of the world economy based on social need, which is becoming more urgent as the capitalist crisis is prolonged.

New recession?

Until recently many economists were talking about an economic recovery – looking at the financial markets and the growth of the economies of Brazil, India and China. Now they have discovered that the world economy is locked in crisis. The global economy is in a period of stagnation but unless there is a fundamental change, the cycles of ’boom’ and ’bust’ will continue. But the general trend is now for weaker, shorter growth phases in a general depressionary period of world capitalism. The wastefulness of capitalism can be shown through one fact alone – global unemployment has increased by 27 million since 2007, to 205 million worldwide.

The barbarism of capitalism can be seen in the thousands who have died in the drug gang related violence in Mexico. Thousands of soldiers are engaged in occupying cities, carrying out torture and killings in the name of the “war on drugs”.

The response of the ruling classes to the 2007/8 finacial and economic crisis was to bail out the banks and launch a stimulus package but that has brought a new set of problems. The government deficits forced a reduction in social spending, while the big corporations, the banks and households are mired in debt.

In the US, Obama’s stimulus package is exhausted. His 2010 tax cuts have been wiped out by the increase in the cost of oil and rents. The bursting of the housing bubble has resulted in a cut in household wealth. There is a depression in the contruction industry and in household spending. US companies are cutting production and sacking workers. Over 24 million people are unemployed or underemployed. The number of people needing food stamps has increased by 50% from 2008 to 2011, so 45 million people – nearly one in seven people in the US – need help to get enough food to eat.

The ruling class everywhere is trying to destroy the social gains won by the working class in the post war period and there are more cuts planned.

The breakdown in negotiations between the Repubicans and the Democrats in the US over the economic programme has alarmed the markets and the IMF has warned that even just a crisis of confidence in US solvency can trigger a new global recession.

The Democrats argue for cuts and a small increase in the taxation of the rich, whilst the Republicans, under pressure from the Tea Party on the Right, only want huge cuts. One third of the republicans in the House of Representatives were only elected in 2010 and are vulnerable to Tea Party pressure, so they fear losing their seats if they go along with the Democrats.

Given the dire consequences of a default, even a temporary default, compromise is likely, but it will not bring a long term resolution to the US economic crisis. The US ruling class have no short term strategy, let alone a long-term solution, in the face of this systemic and protracted crisis of capitalism.

The US workers have no choice but to fight and they have already shown this in Wisconsin in the mass struggle against the right wing governor’s anti-union attacks and social attacks. But the failure to stop these assaults, largely due to the union tops not developing the mass struggle, also illustrates the need to build an independent party and fight for a change in the trade unions.


China is also prone to the global contradictions of capitalism. The 2008 crisis resulted in a drop in its exports, which cost 23 million jobs. Fearing social unrest, a stimulus programme was introduced by state directed banks, resulting in fast growth which boosted the markets and which also resulted in rising prices.

For three years, China seemed to avoid the world economic crisis but its overheating economy has created new problems and contradictions, not least huge ’bad debts’. The development of industrial production was dependent on loans from state banks, while local authorities borrowed heavily to invest in infrastructure. By the end of 2010, the debt in local government was equivalent to 40% of GDP.

Property speculation has meant a rise in prices and a surplus of housing stock. Yet millions of people cannot afford to buy or rent.

Brazil, Australia and Canada supply a lot of the raw materials for this growth in China. But that means those countries are vulnerable to a downturn in the Chinese economy. Equally, any slow down would mean an attack on the wages and conditions of the Chinese working class.

The ongoing economic crisis and the relative growing strength of China, sees a stepping up of big power rivalaries and tensions.

The ruling class in Pakistan has been developing increasing ties to China, while their counterparts in India are linking up more with the US – worsening the tensions between those countries.

The US ruling class aims to try to impose compliant regimes in vital geo-strategic regions of the world and to control oil reserves and other vital resources. In Afghanistan they have become reliant on warlords, as the occupation and puppert Karzai government lacks any real popular support. Obama plans to withdraw 33,000 troops from Afghanistan by the end of 2012, but around 70,000 will stay. They also have 50,000 US personnel in Iraq, in 53 military bases.

There is increasing tensions within the Russian elite in the run-up to presidential elections, mostly around economic policy and the approach to the west. President Medvedev is more pro-western and ’free market’ orientated. Both Prime Miniser Putin and Medvedev want to stand in the elections but both are facing falling support in polls. In the context of growing discontent amongst the massses in Russia, the struggle between Putin and Medvedev could become explosive.


In Venezuela, President Hugo Chavez’s serious illness has brought to the surface the competing factions in the regime. Chavez is still popular due to his social reform programmes, including in health and education. But suppport for the ’Bolivarian’ regime is declining against a background of electricity cuts, corruption, a housing crisis and one of the highest murder rates in the world. A new layer of the ruling bureaucracy is becoming enriched.

Chavez has announced he will stand for another six-year term but if his health worsens and he is out of the country for pro-longed peroids, it can open up a power struggle. This will give a boost to the reactionary opposition. And if the Bolvarian revolution unravels, it will have a big effect on Cuba, which relys on Venezuelan oil.

The only way to defend the social gains which have been won in Venezuela and Cuba, is for the working class to organise in defence of the revolution: taking the economy under the democratic control and management of the working class and spreading the revolution across the Americas.

The polarisation between the rich and poor across Latin America has fuelled the class struggle. In Brazil, there have been battles against corruption and tens of thousands of teachers and students marched in Chile on 30 June in defence of public education.

Industrial struggles in Africa

In Africa, the struggles of the working class have been boosted by the revolutionary movements in north Africa and the middle East. In south Africa, a recent three-week strike of engineers resulted in concessions. South African fuel workers are now in battle. These movements shook the pro-market ANC government but the COSATU trade union federation failed to co-ordinate the strikes effectively and to spread the action to meet the needs of millions of workers and poor.

In Nigeria, a three-day general strike over wages has been called off but this issue has the potential to explode again, given the terrible poverty conditions facing millions.There have also been “unprecented” protests in Malawi, where 75% of the population live on less than one dollar a day.

These examples show the potential for workign class resistance to develop. But there is a big gap between the needs of the working class and the level of conciousness amongst workers worldwide. The CWI aims to link struggles of workers worldwide, to campaign for and where possible help build new mass fighting parties of the working class and to also build the forces of Marxism.

During the plenary discussion, speakers from around the world gave inspiring reports of social and workers’ struggles and also about the development of the CWI.

In Australia, exporting raw materials to China and Japan has resulted in a boom in the mining industry, but also a lop-sided aspect to the economy. Mass conciousness may lag behind Europe and elsewhere but this period of relative quiet will not be maintained due to the crisis that will also hit Australia. The Labour Party minority government is at an historic low in the polls, following the imposition of the carbon tax. If there were an election tomorrow the opposition Right would win but only to launch an even more serious attack on the working class. A European-style revolt could develop in Australia. It suffers the same underlying problems of debt and one third of all jobs are identified as “unstable”.

Malaysia has been a fast-growing economy in recent years but it is not immune to the crisis. Exports of raw material, such as rubber to China, resulted in a 7% growth in 2010. But Malaysia is highly dependent on more powerful economies. Once the country is flooded with cheap Chinese goods, the local market will not be able to compete. Meanwhile the government is looking for further ’liberalisation’ – dismantling price control and slashing spending.

Paul Murphy, a Socialist Party MEP (member of the European Parliament), from Ireland, gave an inspiring report of his recent visit to workers in Kazakhstan. Using his position as an MEP, Paul was able to give concrete support to striking oil workers, who are waging one of the biggest industrial battles of workers in any ex-Soviet country since the collapse of Stalinism.

Kazakhstan is the richest country in the world in terms of its natural resources per head of population, but nearly all the money goes to the ruling elite. The oil workers labour in desert conditions, with very hot summers and very cold winters.

The workers are striking over wages, for the right to form independent trade unions and for the release of their union’s lawyer, who were jailed when the dispute began.

Thousands of workers have been on strike for two months with no strike pay and many have to support a family of eight or nine people. Some have been on hunger strike for 40 days in protest at the bosses.

The full force of the state has been used against the workers. Hundreds have been, in effect, locked out and some have received death threats.

Paul Murphy was warmly welcomed at mass meetings of the striking workers and he was able to help in negotiations with the management. Expecting a token visit from a compliant MEP, the top management were shocked when Paul argued vehemently on behalf of the workers.

All of this was reported prominently in the non-government Kazakh press, which helped to boost the confidence of the workforce. The task now is to build support internationally. Paul promised the company that if they did not begin meaningful negotiations there would be a massive international campaign against them.

Meanwhile, the Kazakh government know this is not just an economic strike – it is inspiring workers across the country.


One of the big questions facing the working class worldwide is the environment. Pete from the Socialist Party (England and Wales) explained that the National Academy of Sciences in the US concluded that emissions of greenhouse gases “stabilised” since 1990. But a 40% cut is needed in the next ten years to tackle global warming.

There has been a massive export of pollution to China. Between 2002 and 2008, greenhouse gas output in China rose from four to seven gigatonnes.

China consumes half of the world’s cement, coal, steel and iron ore and it is the world’s biggest emitter of greenhouse gases.

The majority of Greens argue for a huge cut in consumption, condemning workers in China and other countries like India to eternal poverty. At least the Green Left activists blame the world’s imperialist powers for this situation.

The Chinese government opportunistically echoes this argument. It develops renewable energy sources but as a part of a profit-driven attempt to become the world’s leader in renewable energy.

The CWI argues that there is no long term solution to the environmental crisis on the basis of private profit. Competitive markets downgrade the environment. We need a democratic plan of production, in harmony with the environment, throughout the world.

There were many other interesting contributions to the discussion, including from Hong Kong, France, Bolivia, Venzuela, Brazil, Israel, Russia, Nigeria and India.

Tom from the US explained how the protests in Wisconsin were a small indication of the fighting spirit of workers; an upsurge from below against attacks on the trade unions, pensions and other social benefits. The protests included thousands of unorganised workers and young people.

The election of right-wing governors, last November, has escalated the attacks on workers. The Democrats in many areas are using the Tea Party as a cover for their attacks on workers.

In Wisconsin, Socialist Alternative supporters called for a one-day general strike, whereas the union leadser argued that further action would “risk losing popular support”and refused to build the action.

But Wisconsin was one battle in a war – the next battles will be on a national level. The working class are being asked to pay for the crisis on Wall Street. The CWI is arguing in the trade unions for independent candidates against the cuts.


In southern Ireland, Joe Higgins, a Socialist Party TD (member of the Irish Parliament) hit the headlines this week responding to the Fine Gael/Labour government’s announcement of a new €100 a year ’household tax’. Joe Higgins and the Socialist Party call for a mass campaign on non-payment and have called a national forum on 10 September to organise that struggle. This got blanket coverage in the media. In contrast, a Sinn Fein TD, quoted in the press, warned that “a boycott is very dangerous”.

Summing up the discussion, Clare Doyle from the CWI International Secretariat, observed that the CWI has members in more countries than ever before and that there were more of those represented at the CWI School.

It was clear from the discussion that the ideas of struggle and revolution are spreading. Capitalism is in such a deep and prolonged crisis that the ruling elite in every country is worried about the future. One glaring indication of the depth of the crisis is the record price of gold.

Dictatorships worldwide were shaken by the fall of Mubarak in Egypt and Ben Ali in Tunisia. Futher strikes and protests will erupt, often despite of the trade union leaders. Our task in the CWI is to build our forces and a leadership worthy of the sacrifice and fighting spirit of those workers.

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