World crisis preparing ground for new and deeper explosions

Report of discussion on World Perspectives at CWI International Executive Committee meeting in November 2017.


The 2017 International Executive Committee meeting of the Committee for a Workers’ International took place following a year of important incidents throughout the world.

Peter Taaffe, opening the discussion on World Perspectives, commented that it had become a cliché but it was accurate to say there had been ‘abrupt turns and sudden changes’ in the situation. This was illustrated in a number of ways.

The crisis in Catalonia (more fully dealt with in the session on Europe) has had world repercussions, pushing the national question to the fore in Europe in particular but also in the neo-colonial world, with echoes reverberating through the mass movements

The political deadlock in Germany since the Christian Democrats’ worst Election performance since 1949, has led to a certain paralysis with major repercussions for Chancellor Merkel, German capitalism and Europe.

In Zimbabwe, the pre-emptive coup and mass demonstration that have deposed Mugabe were just the opening events of an unfolding situation.

However, these and other important developments do not yet constitute a qualitative change but a further deepening – socially and politically in particular – of the crisis of the capitalist class internationally and its system. These flow from the crash of 2007-08, which we described in the last and current IEC theses

This is recognised by everybody, including Jeremy Corbyn in his Labour Party conference speech this year: “2017 could be the year when we catch up with 2008.” This shows that Marxists can exert big pressure from outside of Labour. What the Labour leadership does not appreciate are the pitfalls a Corbyn government would face, similar to those encountered by the Syriza government in Greece.

Internationally, there has been much mention of economic ‘recovery’ but no creation of substantial, long-term jobs in the US, in Europe (in the East as well as the West) or in the neo colonial world. Even a reasonable upturn could help to restore the confidence of the working class and prepare the masses for struggle. In fact, this is a ‘recovery’ once more fuelled by debt, the figures for which continue to alarm the capitalist class worldwide.

There is also a crisis of productivity due to lack of investment in new products, processes or the development of markets, which would come from demand. But that has not arisen because employment has grown thanks to low-wage jobs; there has been no structural upswing.

Falling wages have resulted in deepening inequality while the increased wealth of the capitalists is Illustrated by the so-called ‘Paradise Papers’ revelations. Such is the growing gap since 2008, that some capitalists have begun to speak of a new ‘Gilded Age’, similar to the period at the turn of the 20th century dominated by the so-called ‘robber barons’ like the Rothschilds, Vanderbilts and Rockefellers.

The billionaires today are a new plutocracy and Martin Wolf of the Financial Times now talks of “plutocracy populism”, as represented by Trump. The rich worldwide increased their wealth by one fifth in 2016 – more than the combined GDP of Britain and Germany. They are now more parasitic than during the classical genesis of capitalism. $2.7 trillion of US-created wealth is now parked offshore; taxes have become purely ‘voluntary’ for big business.

Meanwhile wages stagnate or decline in real terms. In Britain, wage growth is the worst since the Napoleonic Wars over 200 years ago. America has had a long period of wage stagnation and Europe is experiencing the same process.

As a result, ‘consumption’ drops and the working class are incapable of buying back the goods they produce. The introduction of new technology can only aggravate these trends. There is great potential in this technology but it is impossible to utilise properly on the basis of capitalism. Only socialist planning can do this.

The effects of this will be profound not just in advanced countries but in the neo-colonial world even, perhaps particularly, China.

The US and China are now the dominant, decisive players in the world economy. Yet by not overcoming the 2007-08 crisis, and using debt to stoke the economy, the fear of another financial crash is still there and potent.

Recent interest rate increases risk the danger of repeating a ‘recession within a depression’, although with somewhat different details to the 1937 recession in the US following the Great Depression. That was caused by the tightening of fiscal policy. Rate increases now will have the same effect of cutting growth and thereby employment.

Deindustrialisation is now affecting parts of the neo-colonial world, together with the rapid transfer of inward investment to countries and regions with the highest ‘yield’. This leads to hunger, famine and chaos, particularly in Sub-Saharan Africa chaos.

Sebei from South Africa explained that the events in Zimbabwe have shown that revolution is shaking the tops of the trees. There has been the veneer of democratic appearance despite the faction that took power being the faction of Robert Mugabe himself! But the coup has opened the floodgates for the masses. The ‘new situation’ has consequences for whole of sub-Saharan Africa, points developed by Weizmann also from South Africa. The past five years have seen a deepening of the crisis, with no way out being offered by capitalists to the crisis of poverty of masses. Mugabe’s downfall poses questions for Zuma; the beginning of the end of ZANU-PF could presage end of ANC, which would possibly open an entirely new era for southern Africa.

Abbey from Nigeria referred to the explosive situation likely to erupt in sub-Saharan Africa, exhibited, for example, in the protests in Cote D’Ivoire earlier in the year over non-payment of salaries.

Peter mentioned the similar upheavals in Latin America (also dealt with in a separate session), typified by the crises in Brazil and Venezuela exhibiting political corruption, poverty and a big ratcheting up of social tensions. This has sent warnings to the capitalists of the ‘West’ that “Latin American inequality” leads to “Latin American politics”!

The possibility of default in Venezuela – adding to the already disastrous economic and social situation – is now serious. The disappointments in Venezuela will be used as a scarecrow against revolution and socialism in the worldwide ideological conflict which rages.

There is now competition between the two biggest economies in the world: China and the US. It is no accident capitalist commentators have evoked from ancient Greece the notion of the ‘Thucydides trap’, where an established dominant power seeks to contain and eventually goes to war against the rising power.

An all-out war is extremely unlikely, mainly for the reason that such a conflict would result in ‘mutually assured destruction’ (MAD). But their intense competition means military conflict cannot be excluded and even proxy ‘small’ wars, particularly in the South China Sea which has some of the world’s most important sea lanes. Add to this the unpredictability of the ‘Trump factor’ and there is an explosive mix worldwide and domestically.

Trump has had a catastrophic effect both internationally and also within the US itself. His excursions into foreign policy have been a disaster for US imperialism which can see its already tenuous ‘leadership’ further undermined by Trump’s clumsy actions.

Despite being still the world’s major capitalist power, it is losing out to China worldwide but particularly in Asia. Trump boasts he will economically clip China’s wings but the US trade deficit with China in the first nine months of this year $274 billion!

Trump has ended involvement in the Trans-Pacific Partnership (TPP) trade agreement, and might do so with NAFTA and even US membership of the WTO. This has left the field free for China. There is more ‘trust’ in China than the US in Indonesia, Germany and Canada.

China’s own world ‘imperialist’ ambitions have been clearly demonstrated through its ‘One Belt One Road’ policy in Asia and Europe, which is a search for resources and markets for its goods. China intends to lend more than $1 trillion. Moreover, 100 countries count China as their largest trading partner compared to 57 who have the US.

In the North Korea crisis, Trump is playing a dangerous game. His administration is exerting pressure on China – which is unlikely to clip Kim Jong-un’s wings –to force him to retreat.

There are reports that North Korea will have the potential in 18 months to hit Los Angeles in the US with some kind of nuclear device. It cannot be ruled out that Trump will strike first pre-emptively. Pre-emptive strikes have been considered before by US imperialism; President Nixon wanted to use so-called ‘tactical nuclear weapons’ against North Vietnam. There will be colossal repercussions of even a limited nuclear exchange. A revolutionary wave will sweep throughout the world even if one accidental bomb dropped.

Trump is stirring up the world against the US and preparing the way for a new anti-war movement. It will have a radicalising effect on the US working class and lead to profound political developments in the next period.

Trump still retains significant support amongst his ‘base’ but generally he has seen massive erosion in support. It was interesting that the Economist, in relation to new technology, stated: “There was a machinery riot last year: it was the US presidential elections”. Dispossessed, unemployed workers – in the coalfields and steel industries – struck out as did the so-called ‘Luddites’ during the Industrial Revolution in Britain.

This earlier revolution paved the way for the historical triumph of capitalism on a world scale. This new revolt denotes the system’s stagnation and decline, which cannot fully harness either new technology or integrate the working class into production. Trump will only speed up this process.

Trump is universally condemned even by sections of ruling class – perhaps most violently by his ‘own side’, the Republicans. One ‘Reaganite’ thinks that the “Trump crowd is like the crowd from the Goodfellas” – with Tony Soprano thrown in for good measure!

A brutal ‘civil war’ within the Republican Party is paralleled by a similar conflict within the Democrats. This could result in Trump’s impeachment. There is a general sentiment in favour: “Who is not in favour of the impeachment of Trump?” asked right-wing Republican Ann Coulter

Comrades from the USA explained the factors behind Trump’s election and also why there is a lull in the movement against him since the initial protests. The absence of any serious leadership from the labour unions to build class opposition has been a big factor. In fact, some union leaders initially welcomed Trump’s election!

There is the possibility of splits within both of the major capitalist parties with four emerging. The process may not develop in a neat way but all the fault lines are there to develop at a certain stage.

Already, the Democratic Socialists in America (DSA) have grown to over 30,000 members, although this is still a small force compared to a working class the size of that of the US. The CWI has a sympathetic approach to members of movements like the DSA and the Corbyn-supporting Momentum in Britain. We put forward our socialist programme to their members while outlining the limitations of the leaderships of such organisations.

China could also face big upheavals; the recent Congress of the Chinese Communist Party consolidated the powers of President Xi Jinping, the most powerful leader since Deng Xiaoping and possibly since Mao Zedong. Xi has nakedly asserted the power of the centralised state and party to try to remove opposition to their policies. In reality, China expounds a powerful centralised nationalism with a state to go with it.

Although economic growth has been impressive so that China has become the largest or second largest economy in the world (depending on how it is measured), this has been sustained by the massive accumulation of debt. The Chinese regime could try to engineer a ‘harmless’ deleveraging, but economists warn this is without precedent! Even the Chinese leaders themselves have warned of a ‘Minsky moment’, i.e. a financial meltdown.

Comrades from China, Hong Kong and Taiwan explained in detail the effects of the clampdown by the Chinese Communist Party which could have drastic repercussions on campaigners. But social explosions are inevitable as the events in Hong Kong and elsewhere have shown. The regime will not be able to keep a whole people in chains.

Peter went on to describe the conditions in another volatile area, the Middle East, where one intractable war has reached its end phase with the defeat of Isis (Daesh). It holds just pockets of territory in deserts and semi-desert areas. The victors are largely the Assad regime, Russia and Iran; together with its allies Hezbollah it is in the process of establishing a Shia ‘corridor’ from Iran, through Iraq down to the Syrian coast and Lebanon.

However, Isis has not been completely eradicated; it will be transformed into an insurgent force in the region and wider. The masses have paid a terrible price in this war with massive casualties and 11 million displaced Syrians and 4 million Iraqis.

The aftermath of the defeat of Isis saw the premature attempt to establish a Kurdish state taking in the ethnically-mixed city of Kirkuk. It was unable to hold the city, as minorities in the area felt threatened by the domination of the Kurdish rulers. This shows the necessity for a clear programme on the national question is vital in this region, guaranteeing the rights of all ethnic and religious groups.

No sooner is the war against Isis almost finished than a possible new conflict looms with developments in Saudi Arabia. There has literally been a ‘palace revolution’, a sweeping purge which has cut down the swollen privileges of some of the royal elite.

The new crown prince has significantly promised to go back to ‘moderate Islam’. The situation is still fluid but the Saudis’ main aim is to check the power of Iran.

Fathi from Tunisia explained how austerity attacks and the restoration of elements of the old (pre-‘Arab Spring’) regime have provoked social protests in the south of the country; these have included demands for the nationalisation of the phosphate industry. He also described the disastrous situation in Libya since Western intervention where African migrants are subjected to open slavery.

Comrades Shahar and Yasha from Israel/Palestine dealt with the situation facing the Palestinians with the moves toward normalisation of relations, emphasised since the IEC by Trump’s recognition of Jerusalem as Israel’s capital. The recent eruption of a semi-mass uprising of Palestinians in East Jerusalem shows the weakness of both the Netanyahu government in Israel and Palestinian leadership. An important character of this period is that, despite some counter-revolutionary features of period, there is fear of revolutionary explosions.

Peter optimistically put forward that it was inevitable that an independent working class movement will develop at a certain stage in the Middle East, which Marxists can intervene in, as with the working class throughout the region.

In conclusion, Peter explained that the deepening and aggravation of conditions inherited from the last period are Guarantees of mass upheavals The CWI is preparing our small forces for big breakthroughs, establishing important bases in a whole number of countries, readying for mass breakthroughs for Marxism in the future.

A number of comrades also raised the volatile situation in South Asia, including in Pakistan, where the rise of Corbyn and Sanders has had an impact on the youth.

In his reply to the discussion, Niall from the IS agreed with points made by Comrades Bill from Canada and Per from Sweden on the disastrous effect capitalism has had on the world reflected in environmental disasters and climate change.

On the economy, despite global growth estimated at 3.7% for 2017 and 3.8% for 2018 there has been no return to the social conditions of workers before the crisis. There has been huge growth in insecure employment which has contributed to falling productivity, and less money for demand while more for profits – labour’s share of income has fallen by $4tr since 1970s.

All these factors pose questions as to how working-class struggles can develop. He concluded by pointing out the majority of youth in the USA and the UK support ‘socialism’; they are fed up with their current conditions. They have fewer possibilities than older generations and the system cannot offer a way out. The CWI will reach many of these layers of young workers and this will help build our forces.

Liked this article? We need your support to improve our work. Please become a Patron! and support our work
Become a patron at Patreon!

Be the first to comment

Leave a Reply

Your email address will not be published.