As world economy worsens, inter-imperialist relations intensify
The International Executive Committee (IEC) of the Committee for a Workers’ International (CWI) met from 17 to 22 January 2012, in Belgium, following the most momentous year for working-class struggle for some time. Over 33 countries were represented at the IEC meeting, with over 85 comrades attending from Europe, Asia, Latin America and Africa.
Last year witnessed revolutions and mass movements in the Middle East and North Africa, the crisis in the euro, the fightback of the working class throughout Europe against austerity, and the development of the Occupy movement worldwide. An overview of the year and an outline of the likely processes that could develop in 2012 was introduced by Peter Taaffe and replied to by Lynn Walsh from the International Secretariat of the CWI. Kevin Parslow reports on the discussion, below.
The International Labour Organisation expects "social turmoil" in at least one third of countries in the world this year, explained Peter, and this indicates the scale of upheaval arising from the world economic crisis. Even as the IEC convened, Nigeria had seen the most important movement in that country for some time – the general strike against the withdrawal of oil price subsidies and the rise in prices that followed, while further political turmoil was facing Pakistan.
2011 began with the capitalist class internationally hoping that the worst of the economic crisis, initiated by the banking turmoil of 2008-09, was over. They had modest hopes for growth to recover in the economy. Instead, the sovereign debt crisis in the European had worldwide implications as bailouts imposed austerity on Greece and other debtors, which shattered growth expectations and forced the working class throughout Europe to strike and take to the streets in protest at the imposition of cuts and redundancies by the bankers, the EU and the IMF.
Austerity programmes exacerbate the world economic downturn. They were feeding into the already low growth rates and inducing recessions and even slumps. All the capitalist class could do was, in the words of Gillian Tett from the Financial Times, “manage the pain”. The same newspaper recently run a series entitled ’Capitalism in crisis’ to discuss the problems that big business faced internationally, the options available to them and the opposition they were facing.
The current economic downturn has lasted longer than the 1930s slump, although the depth and scale of destruction of economic resources is not yet as great. In fact, big business was sitting on huge cash piles but was refusing to invest in production because of the lack of profitable opportunities. The lack of real growth in the US and the persistently high unemployment was having political effects, not least threatening the possibility of Barack Obama winning the presidential election in November.
During the discussion a comrade explained that the capitalists had suggested that the advanced capitalist countries were facing ’Japanisation’ – a long period of stagnation and low or no growth. National debt in Japan ballooned to 200% of GDP and no resolution to the country’s low economic problems. Japan has not been rocked with social battles but could be in the future, if the economy, propped up by the booming Chinese economy over many years, was forced into further recession and more cuts to public expenditure are made, leading to protests. Japan would begin to face the same scenarios of instability and protest as seen recently in the US and Europe.
China experienced the ripples from the crisis in Europe, with the cutting of demand from some of its major export markets. Economic forecasters are altering their predictions downwards for the growth rate of the Chinese economy, particularly with the prospect of the bursting of the bubble in the property market. There was ’alarm’ amongst capitalist commentators at the possible social effects of a downturn in the Chinese economy. In the discussion, comrades described some of the social and industrial protests of the Chinese masses, including the significant strikes and also a movement in Wukan village, at the end of last year, against forced land sales by local state officials.
Protest has spread worldwide in 2011. The big bosses and pro-capitalist commentators fear revolts and mass movements of youth and the working class. The revolutions and upheavals in the Middle East were followed by the Occupy movement worldwide (which in the US was preceded by the start of a re-awakening of the working class in the movement in Wisconsin). The Occupy movement has seen a generation of youth move onto the political stage and oppose the effects of unrestrained capitalism. In the US, in particular, some of the occupations have turned towards the labour movement.
Lynn Walsh, when summing up the discussion, pointed out that the majority of the US population was in favour of the Occupy movement, while 59% of Afro-Americans and 49% of youth had a favourable opinion of socialism! But, in general, the Occupy movements have not put forward clear ideas of how to abolish capitalism; rather they have been limited to measures to ’make capitalism work better’.
The CWI will continue to participate in the Occupy movement, putting forward a programme to change society to the benefit of the 99% rather than the 1%, as is the case under capitalism.
Europe has been the epicentre of the world economic crisis in 2011 (perspectives for Europe will be looked at in greater detail in a separate report of the IEC discussion on this site). The threat of default and expulsion from the Euro-zone hangs over a number of countries. The emergency European Union summit at the end of last year only laid down rules to try to prevent future crises, not solved the current problems, and the initial euphoria of the markets at the ’deal’ evaporated within days. Lynn said the Europe-zone was like a ’house on fire’ where the owners could not decide on sending in the fire brigade, on which fire brigade to send and when, yet at the same time they called in architects to build a new house!
The European capitalists, led by Germany, reject the idea of euro-bonds to finance bail-outs for the moment but comrades during the discussion raised the possibility that this alternative may be turned to in the future. The latest attempted Europe-zone agreement, a “Stability Pact on steroids”, would rule out economic stimulus plans in the future. But if Europe-zone economies faced slumps, they could be forced into deploying spending packages to try to escape temporarily from recession and prevent radicalisation and revolution in society.
The EU has imposed ’technocratic’ governments on Italy and Greece, and austerity policies are also imposed from above. The increased use of anti-democratic methods by the ruling class in Europe has added to the anger of workers and youth. These governments and their measures will face increasing challenges from the working class in the next period.
The eurozone states faced huge repayment commitments in the first half of 2012 which would test the bail-out funds and the policies of the EU once more. The crunch-time for many countries could come soon. The loss of France’s ’AAA’ rating further emphasises the depth of the crisis.
German big business was the main beneficiary from the introduction of the euro, as its introduction allowed it to make big profits from the sales of manufactured goods. They use this as justification for dictating the austerity policies on the economic ’sinners’ in the eurozone; their political representatives talk about Europe becoming or speaking ’more German’! Led by Chancellor Merkel, Germany was deciding the level of cuts to be imposed in those countries asking for bail-outs. The imposition of savage cuts from outside is exacerbating resentment. Peter Taaffe explained that the working-class was the real force that could oppose these diktats. The agreement of centrally agreed deflationary policies was also fanning the national question in areas such as Scotland and Catalonia.
In Europe, youth, in particular, have been been badly hit by mass unemployment. The phenomena of mass emigration has re-appeared, as despair at the lack of opportunities for young people has grown. Some youth from European countries, like Portugal, are even forced to emigrate to former colonies, like Angola, in search of work.
However, the European working class has returned to the stage of mass struggles. A series of general strikes in Greece, as well as those in Portugal, Spain, and Italy, and the public sector general strike in Britain last November, have all shown the combativity of workers faced with attacks on their living standards. Unfortunately, most of the union leaders do not match up to the task of defending their members from the ravages of the brutal austerity programmes.
The deep political crisis and hugely unpopular austerity cuts resulted in five prime ministers ousted in Europe in 2011. The pro-capitalist policies of the former social-democratic parties have led to their defeats in elections in Spain and Portugal by right-wing parties. In many countries there is a vacuum on the left. Some of the left political formations which have arisen in the last period, such as Syriza in Greece, have not met the expectations of their supporters, as the leaderships have moved to the right. Their lack of success in building big movements does not mean that they could not have some electoral success. But neither does it exclude that new movements and parties will be formed. Where new viable left organisations arise, the CWI will argue that they need to adopt a socialist programme against cuts and for real system change.
The crisis is also hitting Russia and Eastern Europe. Protests against rigged elections in Russia rocked the ruling class and their main political representatives, Putin and Medvedev. In response, the Financial Times ran the headline: ’Russian revolution possible’!
Protests against cuts have also recently rocked Romania. However the dangers of the far right in Europe have been posed by the situation in Hungary, where the right-wing government has introduced austerity measures and the neo-fascist Jobbik party has been the major beneficiary. However, the recent introduction of a new constitution with anti-democratic measures provoked mass protests on the streets of Budapest.
The magnificent revolutions and movements in the Middle East and North Africa in 2011 will be dealt with in a further report on socialistworld.net. Here, it is necessary to say that the new regimes installed in Egypt and Tunisia will not be stable. Particularly in those two countries, there is a feeling that the revolutions have not been completed, and that workers and youth continue to fight for their economic, social and political demands. This will lead to further conflicts. Neither have the revolutions brought peace to the region, with the threat of war breaking out if Israel or the US take military action against nuclear facilities in Iran. Only the further successful struggles of the youth and working class, who made last year’s revolutions, can prevent the horrors of war ravaging the region.
Nor is the Middle East the only ’hotspot’ for imperialism. The US may have withdrawn troops from Iraq in 2011 but it is still deeply involved in Afghanistan. Reflecting the impasse in that country, the Taliban was recently allowed to set up an office in Qatar for the express purposes of negotiating with the US and bringing some elements of the Taliban into the government in Kabul.
Another potential flashpoint could be the Asia-Pacific region. Recently, the US government produced a new strategy document that shifts the major orientation of its foreign policy towards this area of the world. This was predicated by the fear that China would use its growing economic power to dominate the region. China could eventually become the biggest economy in the world, although average living standards were far below those in the US. However, the potential for conflict could be cut across by the rise of a mass movement in China.
In his conclusion, Lynn said that 2011 was an outstanding year for mass movements and posed enormous tasks and challenges for socialists. As Peter said, there has never been a better time for the CWI than today and its supporters everywhere have to explain our Marxist ideas to workers and youth in struggle, to build our socialist forces to strengthen the struggle to end capitalism and to move towards genuine socialist change in society.