Document on World Relations
Document on World Relations
DSM 21st Congress resolution
Global capitalism is in its worst crisis since the 1930s with every nook and cranny â€“ on the basis of the greatest ever integration of the world into capitalist orbit â€“ feeling the pinch of the crisis. The few countries which have enjoyed growth, like China and Brazil, are no longer confident about their future while the older imperialist powers do not see any long period of economic growth, only ups and downs of the capitalist economic cycle. Growing with the global penury this crisis has engendered is also mass struggles of workers and young people who are refusing to be made scapegoats for the crisis caused by capitalist fat cats and bosses. These mass struggles have come in form of mass movements unprecedented in history in Europe and elsewhere; mass radicalization and politicization of working class; and dislocation and disintegration of various capitalist regimes even in seemingly stable democracies of Europe. This will bring back to mainstream consciousness, the genuine ideas of socialism, possibly after all the factions of capitalist rule have been tried and found wanting by the mass of working people and youths.
Nowhere is the necessity for socialist ideas direr than in the Middle East, which has been convulsed with mass revolts and revolutions â€“ and along with it is the germination of the seeds of counterrevolution. From Tunisia to Egypt, revolutions and counterrevolutions are going hand-in-hand with mass of working and young people asking how they can get permanent resolution to the unmitigated suffering that led to the revolutions in the first instance. In places like Syria and Libya, as a result of lack of independent working class initiative and organization, counterrevolutions expressed in civil wars and emergence of right-wing Islamists and pro-imperialist sectarian forces. In these two countries, revolutions, which were started by mass of working people and youths, disgusted with the corrupt but bankrupt regimes of Assad and Gadhafi, were derailed and hijacked by pro-capitalist and pro-imperialist elements, who took the initiative from the mass of people. Rather than resolving the intractable problems that led to the revolutions, the aftermath have shown that while mass movements are vital in defeating anti-people regimes, only movements under an organized banner of the working masses, aimed at ending capitalist rule and system, and replacing it with democratic socialist alternative can ultimately bring genuine change.
Though not initially caused by current global economic downturn, the revolutions in Tunisia and Egypt â€“ and other places in the region â€“ have been exacerbated by the current global capitalist crisis. The bankruptcy and failure of various pro-capitalist regimes and political forces that have emerged to replace the ousted regimes, have been sharply and quickly shown by the economic downturn, as reflected in the overthrow â€“ on the back of mass revolt â€“ by the military hierarchy of Morsi/Muslim Brotherhood regime in Egypt. For instance, “over 1,500 factories have closed since the first revolution in 2011. Half of the country’s eighty million people are living below the poverty line or near it.” It is these serious economic dire straits of the majority of the population, which the capitalist and pro-imperialist Morsi regime failed utterly to resolve, that fueled the Second Revolution.
Unfortunately as a result of lack of independent organizations of the working class with independent revolutionary programmes in the lead, the over 17 million-strong movement of workers, youth and the downtrodden (more than those who voted for Morsi in the first election), has only meant that the vacuum will be filled by a section of the bourgeois class â€“ in this case the military. The Tamarod movement, which comprises mish-mash of elements and factions, including the representatives of the old Mubarak regime, petty bourgeois elements and pro-capitalist layers of various strands, cannot fulfill the task of taking the society forward. It is thus no accident, Tamarod’s acceptance of the military take-over of power, its subsequent participation in the military-organized interim government, and support (covert or overt) of military bloody clampdown on pro-Morsi supporters, which has meant military massacre of an estimated 2, 000 civilians aside arrests, detention and brutalization of several hundreds of others. Indeed, reflecting lack of any pro-working masses initiative, Tamarod had ‘banned’ any independent banner, aside the national flag, during the course of the massive protests that ousted Morsi.
As the CWI has said severally that military rule will never resolve anyone of the myriads of economic, social and political crises facing the Egyptian society. On the contrary, it will worsen these problems. This is because the military regime, being an integral but organized entity of the capitalist class in Egypt (with control of significant part of the economy, both openly and in the deep state), will try to use the whip of counterrevolution to enforce stability and ensure continuity of capitalist exploitation. This will mean the military restoring the old order and turning the guns on the mass of people as the global economic problems, to which Egypt is very exposed, continue to instigate more social reactions by mass of workers, young people and the poor. Already, as a show of force and attempt at restoring the old order, ousted Hosni Mubarak, previously in prison has been moved to military hospital â€“ another euphemism for his release from detention. In addition, the military has started attack on striking workers â€“ a foretaste of the future.
While at present, the society is divided with the risk of growth of sectarian tendencies (of the anti- and pro-Morsi groups), while the massive attack on pro-Morsi protesters might have scared many workers from openly confronting the military, it is glaring that the military and the pawn administration it has put up, are daily earning the widespread hatred of the mass of workers and the poor. This in itself will lead to schism within the ruling class, as some elements in the ruling regime have resigned from the regime in the wake of the clampdown on pro-Morsi supporters. More than this, as the military rule try to assert total control and silence workers in the bid to ensure stability of capitalist exploitation (with the support of global capitalism and on much brutal basis), mass of workers will have no other choice than to take to the road of struggle.
Based on the bankruptcy of the existing organizations (including currently Tamarod, which is already part of the ruling regime), workers have instinctively been drawing a conclusion of the need to build their own independent organizations. Significantly, at this stage, it seems that while workers are forming and joining trade unions, or workplace based organizations, they are not flocking to political parties or organizations, including Tamarod which is already part of the ruling regime. The move towards trade unions started since before the Morsi days, when workers, on the basis of lack of trust in leadership of the first revolutions, have poured into unions leading to increase in independent unions’ membership from 50, 000 to 2.5 million within the last two years. Although, the head of the central trade union federation has joined the military-organised government, this will not stop workers, and indeed the oppressed class from combating the regime in the coming period. The question though is whether this fight-back is expressed through the workers’ movement or whether religious elements seize the initiative and come to the fore as the main fighters against the repression of the new regime and the capitalist crisis.
The Egyptian development is definitely having repercussion within the rest of the Middle East. Already, various Arab regimes, as consequence of removal of the Muslim Brotherhood regime in Egypt and its defeat, have started realigning their interests, not to advance the revolutions, but to aid counter-revolution. This is in the interest of imperialism, which the various Arab regimes are in neck deep relationship with.
The events in Egypt are also having ripples in Tunisia, the birthplace of the Arab Spring. The ruling Enhanda-led coalition is unstable while, based on its glaring failure and unpopularity, it has been forced to be contending with the pro-capitalist opposition, The Call of the Nation, led by Ceid Essebsi (the former prime minister), linked with the ousted Ben Ali regime. The working class and youth have also started playing active role in politics participating and mobilizing towards the downfall of the regime. Unfortunately, the leaders of the trade unions and left coalition are directing this independent movement toward the liberal section of the bourgeois; the reappearance of the Stages theory, if you must say. The Enhanda regime, on the basis of its instability has been trying to balance with the various forces in the society; combining repression with appeal to Islamism (an attempt to court the more radical Islamist Salafist groups). While trying to enforce anti-democratic and anti-trade union postures to appease imperialism, it is, at the same time trying to promote Islamic demagogy to appease the most backward section of the society.
Aside to this is the state terroristic activity of the regime that has led to assassination of two left figures in parliament. In July the assassination of a leading left-wing parliamentarian (the second in a year) led to widespread mass movement being spearheaded by the trade union federation, UGTT and left coalition. This mass movement of workers and youths is demanding the ouster of the pro-capitalist, authoritarian regime of Ennahda in Tunisia. However, in spite of the huge support and growing initiative of the masses in building community controls, the leaders of the movement are attempting to turn the movement towards the establishment of a multi-class government of “national salvation”. This treacherous policy has provoked enormous opposition on the left, and which is giving our young section big opportunities. As the bankruptcy of the regime is shown, especially on the economic front, the left forces will get strengthened with mass radicalization that will accompany this.
The Arab regimes are trying to influence the Arab Spring to prevent spillover on their areas of influence, working with imperialism to curtail the revolutions and, at the same time, each advance their own interests. Their various manipulations are already destroying the region as witnessed in Syria, where genuine revolutionary movement of working people and youths, was hijacked by pro-capitalist elements, acting in concert with corrupt Arab regimes and western imperialism. With an estimated 100, 000 dead, and several millions displaced and wounded, it is clear the poor working masses of Syria will only wish for the end to the civil war quagmire. According to a report, around 10 percent support Assad regime, another 10 percent support the rebels, while overwhelming eighty percent majority are simply war weary and want end to the whole madness. Western imperialism, especially US, is trying to use Syria to resolve its age-long issues in the region.
Aside arming, through various Arab regimes, the rebels, imperialism is hoping to use the human misery, which it contributed to, to launch an adventurist war against Syria with a view to ousting Assad and reconfiguring relations in the Middle East. With this it hopes to isolate Iran, which has been a bulwark of opposition to the US and Israeli imperialism in the Middle East, while also using the opportunity to put foothold on developing mass movements in the region. Furthermore, it hopes to edge out competing Russia and Chinese (the main supporters of the murderous Assad regime) influence in the region. The central aim is to put Middle East more firmly under the control of US/European imperialism, with a view to ensuring the continued exploitation of resources for the stability of capitalism.
The overwhelming rejection of planned war on Syria, by not only mass of working people, but also by sections of the ruling classes, has profound meanings. It shows the failure of imperialisms’ intervention in Iraq and Afghanistan, which is glaring to vast majority of people. It also reflects the lack of mistrust of the general population to the capitalist governments. For instance, in US, according to the Wall Street Journal, two out of three Americans oppose any US planned invasion of Syria. In Britain, it would have been politically suicidal for the capitalist politicians to have given approval to Cameron to support the invasion, as this may awaken mass movement of working and poor people. Such movement will not lead to crisis for the Tories alone, but capitalist ruling class generally, as it will expose all the seething anger of the people, against the austerity and cuts. This can have a European wide ripples.
The tactical retreat of US imperialism on the planned war also shows the limitation and crisis facing imperialism in the contemporary period. It shows how the war in Iraq and Afghanistan has weakened the moral authority of US imperialism. Unlike in 2001, when US imperialism was strong enough to defy any opposition, and was able to railroad other western capitalist governments to the wars in Afghanistan and Iraq, the current situation from the recent debacle in these wars, have shown that such may not been possible again, at least for now. The US intervention in Libya and French role in Mali, while reflecting attempts of imperialisms to reassert their global relevance, also shows their limitations. Aside relying on local forces (rebels in Libya and African forces in Mali) to undertake on-the-ground invasion, the imperialist forces were quick to leave the countries, to avoid intractable quagmire that an occupation will generate.
While US imperialism is temporary defeated, it will still look for means to reassert itself. This means that waging the war on Syria is not totally ruled out. Whether imperialism undertakes war or not, US imperialism is surely in crisis. If it goes to war with Syria, it can only lead to monumental crisis in the Middle East, which will draw in more countries. It can also lead to proxy war between, or among countries (US, Russia, China, etc). On the other hand, the setback to waging war has further weakened not just Obama administration, but other European capitalist governments.
For Marxists, the solution to the humanitarian tragedy in Syria lies in the hands of the majority of the working and oppressed people of Syria, and not in western intervention or in the hands of the self-styled, imperialism backed rebels. Only an independent movement of working and oppressed people, democratically organized in defence committees at local, regional and national levels, can defeat the Assad regime, sectarianism and imperialism. While defending the right to self-determination we call for a united genuinely socialist Syria as part of the united voluntary socialist federation of Arab and Middle East countries, under democratic socialist governments.
As against the euphoria in the Western press of African growth, the reality is that the so-called growth in Africa, aside being unsustainable is centred on unprecedented inequality in wealth. The rich few, mostly in control of mineral wealth and in politics, have been the main beneficiary of the so-called growth. The growths itself is fueled by increasing exploitation of mineral resources, and rise in consumptive activities (product of growing population), is clearly unsustainable both on the prevailing backwardness of Africa and the instability of the crisis-ridden global economy.
A sizable proportion of the growth in Africa has been product of China’s intervention and turbo-growth. China, on the basis of industrial growth is relying heavily on raw materials including fossil fuel and other minerals, which are abundant and easily exploitable in Africa. In 2009 alone, 69 percent in export in sub-Saharan Africa were mineral. Also, because of the cheapness of Chinese products, relative to West-made (US, Europe and Japan) products, many African markets have been accessed by Chinese businesses. This has led to increased role of China in not only African economies, but also in politics. As means of securing resources and markets, China is also financing many African economies, and helping to stabilize many regimes, albeit authoritarian and corrupt. Many Chinese businesses, based on this increasing relation, have outsourced production to Africa, employing workers on terrible working conditions.
However, the increasing wealth that has accumulated to these African states have not translated to better living conditions for the majority, neither has it improved decrepit infrastructures in these societies. On the contrary, it has led to increased wealth for a tiny clique in big business and politics. Africa now house richer people than before, while more and more poor people are thrown to the heap of poverty. While luxury products like champagne, jewelries, and now private jets are finding markets in Africa for the few elite, so also is poverty and suffering getting to more households.
For instance, in spite of the Ghana’s so-called unprecedented growth rate of 13.6 percent, only 5,000 out of 70, 000 graduate, who are thrown to labour markets yearly, find job, while rising inflation has meant the economic boom is really a doom for majority. In Nigeria, in spite of the huge oil wealth, the education sector is in disarray with less than 600, 000 applicants out of over 1.7 million, find space in public tertiary institutions across the country â€“ a product of acute underfunding of education that has led to collapse of infrastructures and facilities. More than 25 percent of the population is officially unemployed with the labour unions estimating it at more than 40 percent. In the same country, you find the richest African, who got most of the wealth through state subsidy and favourable policies.
In South Africa, the leading African economy, more than 25 percent of the population is unemployed with seventy percent being youth. More than 40 percent is poor. Reflecting the backwardness of African economic situation, Liberia, with vast rubber resources, import its plastic products just as Nigeria, the leading African oil producer, cannot guarantee supply of fuel for its population. Angola, one of the world’s ‘fastest growing’ economy, and the second largest crude oil producer in Africa, has two-third of the population living below $1.25 dollars a day, and just 25 percent of the children in school. While Africa rulers are celebrating 50 years of the African Union, their capitalist policies and unbridled corruption has pushed the continent to brink of barbarism with the continent, comprising just 12 percent of world population, accounting for 57 percent of women dying at child birth, and 49 percent of infant mortality in the world.
The so-called growth rate in Africa is indeed a camouflage, as Africa still account for less than 2 percent of world economy. Moreover, the current unraveling of world economy including China, means that the so-called growth is simply reversible. Currently, the Chinese economy is undergoing what the Economist referred to a great deceleration, with growth rate expected to be around, if not less than, 7 percent â€“ the worst in decade. This will simply throw back the so-called growth in Africa, which has not even benefited majority of the population. Already, export in Nigeria has fallen by 49 percent within months, a product of declining demand for oil. The impact of reversal in the growth will surely affect the working and poor people. For instance, increase in oil wealth has also meant tiny rise in middle class, mostly upper, layer, which has fueled rise in consumption. The reversal of this trend, aside leading to tightening of the noose around the necks of the working people through further enforcement of neo-liberal policies, will also mean serious crisis in the private sector. This is already happening, but will get more serious in the coming period.
But the working people will not sit back and allow their living conditions to continue to deteriorate without a fight back. From Nigeria to South Africa, the working people are fighting back. The nationwide scale of the January 2012 mass revolt in Nigeria against hike in fuel price has shattered the long held illusion that Nigerians are docile. The labour leadership, in recognition of the latent anger of the working and poor masses and fearful of any massive outburst of anger, has been trying to place a lid over this mass enthusiasm for change. The labour leadership, as partner of the capitalist regime, is fearful of the repercussion of calling any mass action that can be taken beyond its control by mass of workers, youth and the oppressed.
In South Africa, attempt of the ‘black apartheid’ regime of Jacob Zuma/ANC to maintain stability of capitalist exploitation has led to explosion of struggle across various sectors of the economy. Despite mass repression that saw the killing of 34 miners last year in Marikana, mineworkers have refused to yield. They have forced one concession or the other from the capitalist bosses, who are trying to maintain profitability in the era of global capitalist crisis. Reflecting the growing radicalization of the working class, they have bypassed official trade unions. Indeed, the most combative layer of the South African workers like the mineworkers, are now outside the COSATU, which is in neck-deep alliance with the ANC corrupt regime. A feature of the situation in South Africa is that today it is one of the few countries in the world where there is a widespread socialist consciousness, something reflected in the fact that the largest trade union, the metalworkers, formally stands for the establishment of a workers’ party. It is this radicalization, coupled with a clear-cut Marxist understanding of the CWI in South Africa that has led to the formation of the Workers and Socialist Party (WASP) in the country. The party can become a pole of attraction for the most combative working and oppressed people of South Africa, while also giving programmes and ideas of CWI prominence.
However, aside development of radical mood among working people and youth in Africa, there is also tendency of growth of political crisis as a result of lack of working class alternative. This is coupled with the deadly struggle among various sections of the corrupt ruling class in Africa who rely on rents and royalties from mineral wealth. Capitalism not only engenders class struggle, but other struggles too a la nationalism, ethnic chauvinism, religious demagogy, etc; all of which are mostly product of the inability of capitalism to resolve basic problems, chronic wants and the lack of a genuine working class platform and alternative. This is glaring in most conflict zones in Africa. From Mali to DR Congo, it is a product of contradiction and deep crisis created by capitalism. The neo-colonial nature of capitalism in Africa only makes this worse. Only a genuine working class revolutionary platform of struggle will unite the working people around social transformation. The situation of Africa, on the basis of capitalism, will never generate any hope, unless working and oppressed people of the continent overthrow the iniquitous capitalist system and enthrone a genuine democratic socialist system. With a united socialist confederation of Africa, the huge natural and human resources can be used to make living worthwhile for multiples of the current population of the continent.
As in Africa, most of the trade and economic activities in the Latin America is dominated by extraction and export of raw materials and minerals. Within the framework of capitalism, these huge resources will not translate to massive development of society or industrialization, but continued dependence. This is why these economies will continue to be unstable, even in periods of economic upswing. This is clear even in a country like Venezuela where part of the oil wealth is used to benefit the populace. Despite the radical social programmes of the Hugo Chavez, and now Maduro government, the economy has not been turned away from dependence on oil. This is because the economy is still left intact in the hands of capitalist overlords. When global economic maelstrom worsens, these social programmes may be under attack depending on the balance of forces. This in itself can embolden the right wing to try to stage a comeback as it tried to do towards the last election that saw marginal victory for Maduro. Suffice to say that the victory of the right wing, while may not lead to immediate or total reversal of social programmes (an action that can spring a revolution or revolt), it will set back consciousness among not only Venezuelan working masses, but working people in Latin America and globally who are keenly watching events there.
However, the banality of the growth theory being bandied about emerging markets is more glaring in Brazil, the so-called poster boy of capitalist success in Latin America. Within three years, the economy is already decelerating rapidly with growth rate falling around 2 percent from around 10 percent. While the previous huge growth rate has led to emergence of middle class, and lifting of millions of poor people out of poverty, majority of whom have moved into the city, this has not resolve the contradiction of the system. More than 40 percent of the budget is committed to debt servicing while less than 4 percent is spent on healthcare, and around 7 percent on education. Millions of poor people, despite moving to cities have to struggle to earn living. In spite of the huge wealth, public infrastructures such as transport are in decrepit state, while running inflation is affecting greater section of the population.
All of these are linked, not only to the fall in GDP growth, but has its root even in the unevenness of the growth rate at its peak. Surely, the current deceleration in growth, occasion by the fall in trade with China and the general economic crisis especially in Europe, will worsen social tension. Brazil’s economic growth has strengthened both the working class and its confidence, something shown earlier this year when millions of youths and working people trooped to the streets to demand not just reduction in transport fares, but also better living conditions, have shown what is obtainable in the coming period. More than 120 cities were convulsed with mass movements. Showing the picture of the future, mass occupations, assemblies, etc were set up. Of course, because of lack of preparedness or understanding of clear-cut revolutionary ideas, there was no mass political platform leading these movements, even though the left forces, including LSR, the CWI in Brazil, played active role. However, these events, watch by millions of working and young people globally, will push up questions as to how to make subsequent movements effective and enduring, especially as global capitalist contradictions grow deeper.
Generally, in the Latin America, China and Western imperialism are trying to create spheres of influence and assert control. Currently, China is building joint economic and military collaboration with its allies in Latin America, while US is strengthening its pliant regimes in the area, with formation of an economic bloc, similar to NAFTA.
The US economy is still on life support of Quantitative Easing. This is reflected in crisis that gripped the US stock market when the Fed President, Ben Bernanke, announced that the QE may be eased out. Moreover, the QE, while helping the corporate and big businesses to increase their earning to unprecedented level, for majority of the population the situation has not fared much better with the economy still on sick bed. The bankruptcy of city of Detroit, the former industrial capital of US reflects this clearly. While some jobs are actually created in US, it is still weak, and much below the pre-recession era. 80 percent of parents now believe their children will be worse off than them. The earnings of the big businesses are not being reinvested into the economy to generate employment and grow the economy. This is because of the lack of confidence in the capitalist solution to the economic crisis. Currently, over $2 trillion is held by US banks in tax havens, to evade tax and gain short-term, less risky profits.
The Obama administration has been facing its worst unpopularity ever, after the honeymoon of reelection. This is basically over the economy, but on other issues too. Obama’s reelection itself has more to do with massive rejection of ultra-right populist Tea Party, which is having some impact on the Republican Party, than on approval of Obama’s handling of the economy. There is general rejection of Obama’s drone attacks, while the recent handling of the Snowden issue has pushed the administration more towards unpopularity, with popular approval rate seen to have dipped by 10 point, while youth approval stand at 19 percent.
The terrible austerity and cuts by both Republicans and the Democrats, has further moved more people to search for alternative. This is important on the basis that, unlike in Europe and elsewhere where the effect of Stalinism and failure of social democracy is having terrible legacy, many citizens are open to new ideas and alternatives. CWI comrades in Socialist Alternative have been filling this role with mass campaigns for better conditions for workers and opposition to ejection from residences. The CWI in US have played active role in the campaign for $15/hour minimum wage. In Seattle, our comrades have made this a centre point of the city election, coming up in November, having already won over 44,000, 35%, in August’s primary ballot.
The last may not have been heard about the European capitalist economic decay. With increasing slowdown in Chinese economic growth, Europe may face new crisis. Germany, the powerhouse of Europe’s economy has seen increase in export to China grown by over 100 percent in the last four year, after the dip in European markets. A further slowdown in Chinese economy â€“ already witnessed continuously in the last six quarters â€“ will further the crisis in Germany which in itself is facing one of its worst in decades. Germany itself is turning to the working poor’s country. The same German economy is playing the savior role for the rest of the Eurozone. With most of the Eurozone in economic dire straits, Germany’s economic crisis will throw many other European economies, especially in the Southern Europe into another round of crisis. Already, some southern European economies like Greece, Portugal and Spain are walking corpses of capitalism. Many southern European citizens are now migrating in search of jobs, with skilled Portuguese workers pouring into now oil-rich the former Portuguese colonies.
In Britain, even, a 1-percent rise in GDP will still leave the economy 3 percent contracted. Deeper crises in European economies will mean various capitalist governments implementing more neo-liberal, austerity policies. Even if the economies stabilize, and there are some form of growth â€“ which are going to be insignificant anyway in the face of deep crisis already in place â€“ this will possibly give better justifications for capitalist austerity regimes. Of course, on the other hand, it will embolden the working class to demand for their share of the growth. Average unemployment in Europe is around 20 percent, with many employments in part-time and low income sectors. On the other hand, the richest tops and big business continue to earn more than before. The Chinese angle into the European economic crisis is only a factor among several others of the vulnerability of capitalism in Europe to further crisis, and the inherent instability of the system.
Currently over 1.6 million youths are in part time work in Italy, according to government sources, while another 9 million workers in Germany, most of whom in what is called mini-jobs, are working for less than 8.5 Euros an hour. In Britain, in the public sector, 400,000 jobs lost in last 4 years, with another 400,000 to go; all products of privatization, out-sourcing, wage freeze and low wage jobs. It is estimated that real wages have fallen by 15% since the start of the crisis; meanwhile the average pay rise for chief executives is 15% annually. Reflecting the depth of the crisis for the working and oppressed people, there has been rise in use of Food Banks to get free food from 60,000 to 500,000 within four years. One million workers are using pay-day loans. Also, millions are missing credit card or council tax payments. All of these are having impact on demand and sales, showing how the middle class, the engine room of capitalist growth, are affected. Currently in Europe, there is an overcapacity in auto industry. While the European auto industry has been in crisis in the last 4 years the industry has seen its sharpest drop in sale in decades now, with an overcapacity of 7 million units. Demand is 5% under 2004 levels in the whole Europe, and 15% in southern Europe.
For Europe, in order to return to pre-recession real growth based on capitalism, wages have to be cut deeply and mass retrenchment will have to be carried out. However, this will be met with mass revolt of workers. On the other hand, the failure to return to growth will mean a kind of institutionalization of current cuts/austerity. In any case, the mass of workers and youths will react politically and in struggles.
Of course, where there are no preparations by workers, in terms of building their resistance platforms i.e. trade unions and mass workers’ party, deep austerity can bring shock initially to workers, which can retard growth of mass struggles immediately. In fact, this can only be a temporary setback. Working people, through practical experiences, will come to the conclusion of struggle. It is indeed vital to state that in several countries, workers are getting interested in their organizations and in alternative ideas, which is vital for the impending mass struggles. This is clear from the level of instability of various governments in Europe.
However, right now, from Spain to Portugal and Greece, the governments are only surviving because of the treachery of the leadership of labour movement. The failure of strikes to stop austerity policies, coupled with the failure of labour movement leadership is creating a big vacuum politically that can be exploited by far right or fascist tendencies such as the NF and Golden Dawn in France and Greece respectively. Also, this vacuum can create radical and even revolutionary consciousness that can aid the emergence of mass left platforms from existing small platforms, as seen with the rise of Syriza in Greece during the last elections. Such radicalization can also force trade unions to the left. However, all this will require the role of socialists and Marxists if it is to be consolidated into a movement that can challenge capitalism. Without this opportunities can be lost. In Greece the Syriza leadership began moving towards the right as they gathered mass electoral support. Indeed, as was discussed at this year’s CWI Summer School, workers would have taken power several times over if there had been a revolutionary platform and programme in mass organizations.
Unfortunately, while struggles and, in some cases, revolutionary movements are breaking out, socialist consciousness still lag behind, while there is low level of organization, as against what obtained in the period until the late 1980s. The collapse of the Soviet Union and other eastern European nationalized economies, coupled with the ideological volte-face of many trade union leaders â€“ leading to the ideological transformation of trade unions and especially the most of the former mass workers’ parties â€“ has led to reversal of socialist consciousness. The political bankruptcy of many former mass workers’ parties has created a kind of anti-party consciousness in many mass movements, especially among young people. This can be an immature expression of future revolutionary and socialist consciousness, which if worked on can be of great importance in emerging movements. But it needs to be mentioned that in an attempt to punish pro-austerity parties, workers and youths can vote for variety of parties both on the left and right.
However, on the other side of the divide is the growth of far right groups, especially in Europe because of the continued failure and political bankruptcy of the formerly â€“ but now totally bourgeoisifiedâ€“traditional parties of the working class, and the absence of new mass parties. This has led to rise in far right and ultra-nationalist tendencies that seek to scapegoat immigrants as cause of the failure of capitalism, aside other anti-worker tendencies. This will surely be exploited by the big capitalist class to launch attacks on not only immigrant workers, but also workers in general by tagging their demand for improved working conditions as fetter for resolving economic crisis. This far-right tendency has become pronounced in Greece, where several general strikes have not led to defeat of the troika and their deep neo-liberal cuts that have seen dozens of deaths through suicide. The rise of the Golden Dawn which got 7 percent, in the last election and had representative in the legislature for the first time, reflect this deep political gulf existing. However, while the Golden Dawn may be embolden by this victory, an attempt to express this politically may instigate mass movement that can move more people, fearful of the character of the fascists, to the left. This in itself may rub off on left parties, groups and unions, like Syriza.
September’s attack by Golden Dawn thugs on members of the ‘Communist’ Party, KKE has provoked mass movements of thousands against the fascist groups. The current debate about bringing the fascist party into the national right-wing/austerity government led by New Democracy may also push more people to the left. All of this shows both the potential and challenges in the coming period. In the absence of a radical socialist programme of working people, ultra-right tendencies will grow. This is made worse by the rightwing movement of the left party, Syriza. However, our comrades in Greece and elsewhere have organized mass campaigns against ultra-right tendencies by linking this with campaign for social programmes for all in communities, and better welfare conditions for all workers irrespective of race. This is one of the lessons we in Nigeria can learn from this method, especially as various sections of the capitalist class â€“ coupled with neo-liberal policies being deepened â€“are trying to use the divisive tool of ethnicity to hold on to levers of power â€“ the main source of wealth distribution in Nigeria.
China and the World Economy
China’s economic growth, which has saved many economies, especially the third world economies of Africa and Latin America, has been based on unsustainable investments. Already, the economy is mired in serious debt crisis, while the ruling party CCP is trying to turn towards private investment to reduce the growing interest in shadow banking and debts. Indeed, the Chinese economy is unraveling with growth rate already falling to 7.5 percent in the last quarter from 10% two years ago. This is the lowest in 13 years. While, this may sound plausible in Europe and elsewhere, where there have been consistent recession for years now, this is terrible news for the world economy that relies on Chinese import and export. China is the world’s leading trading partner with 124 countries being China’s trading partners, against 76 for US.
The Chinese economy is plunged by twin problems of debt overhang and overcapacity. The massive stimulus package carried out by China in the wake of global economic crisis in 2008 has led to widespread dependence on debt by local governments and state-owned enterprises. This itself has led to profiteering from the state handout with the rise of shadow banking, which was as much as 50 percent of the total credit in 2012, while overall credit has jumped from $9 trillion in 2008 to $23 trillion. According to Chinese central bank, the total value of shadow banking is around $4.8 trillion. Shadow banking refers to a kind of loan arrangement carried out by hedge funds, and some other non-financial institutions and organizations. The aim of shadow banking is to avoid government’s regulation of credit market in order to get more interest and profit on credits. However, shadow banking is now carried out mostly by state-owned enterprises and big state owned banks.
As a result of overcapacity, many state-owned enterprises use fronts to borrow money from banks at lower rates, and sell out at higher rates, in order to gain profits â€“ not based on production but on financial speculation. The implication of this is that risks are being moved around and shared at all levels. Shadow banking is similar to various complicated financial vehicles in US and Europe prior to the collapse of the financial sector. Indeed the depth of shadow banking is getting close to the level of shaky financial instruments in US prior to the collapse of financial system.
The huge government bailout was meant to sustain China’s production activities in order to sustain export, as the global economic crisis especially in Europe and US threatened Chinese business. This huge state intervention is now turning into its opposite, as there is huge overcapacity and housing bubble. Overcapacity in the steel industry in 2012 is 200 million tons higher than total China’s steel output for 12 years (128 million tons), and more than Japan’s total output. Meanwhile, the total debt burden of the steel industry in 2012 is $400 billion (around the size of South Africa’s economy) â€“ Chinaworker.info, 5 March, 2013. China hoped to overcome the crisis of world economy by massive state stimulus, while maintaining capitalist relations in many sector. This, the world capitalist class hope will save the world economy. However, while western capitalism is trying to recover from the worst, China’s monster is unraveling, and threatening to create a new, if not bigger problem.
The Chinese ruling class, fearful of the coming implosion, is trying to shift the economy away from debt overhang and overcapacity by promoting internal consumption. This it hopes to do by allowing private sector control of some sectors, especially the financial system, thinking this can lead to better and effective management of the sector. However this could introduce austerity in the credit market and shrinking of investment. This would mean reduction in growth rate and austerity for several millions of workers who are currently striving to make ends meet. In spite of the unprecedented wealth in the Chinese economy, currently, about half the population, more than 500 million are living below $2 a day while another half population does not have access to clean water.
The pro-market reform tagged Liconomy (representing a new phase of policy planned by Li Keqiang, the premier and Xi Jinping, head of the CCP), despite attempt by Li and Xi to make a ‘controlled’ process may spiral out of control, and unwind the economy. This is coming on the heel of massive accumulation of wealth by the party officials. For instance, the president, Xi Jinping family wealth is reportedly worth $376, which is more than the wealth of all the British Con-Dem cabinet. This is modest, as many members, mostly princelings (children of former party leaders), controlling state enterprises and private businesses are worth several billions of dollars.
As the economy falters, the already schism, being papered over by Xi (who has been trying to maintain balance between the two factions â€“ the youth layer and the princelings â€“ of the party), will only widen, raising the prospect of such threatening the foundation of the current one-party regime. The case of Bo Xilai is a pointer to this. Even if the factions unite in the face of economic crisis, to save the system â€“ which is a possibility â€“ it will never stop the social tension the economic crisis or austerity will generate. But even if the regime is able to keep the economy growing that would not necessarily prevent struggles as growth could encourage workers to demand a greater share of the wealth being produced.
Globally, the new austerity pro-market measures will cause crisis, both for the third world and advanced economies. Already, the Brazilian economy, which has China as a major trade partner, is growing at less than 2 percent as against 4.6 percent last year.
For many third world economies, especially in Africa, where China has played the role of last savior since the beginning of world economic meltdown, the economic crisis in China will surely lead to serious economic and political maelstrom. China has been major market for raw materials from Africa and Latin America, and trade partner to many advanced economies. With most African political and economic elites being parasitically dependent on primitive accumulation, the economic crises that will accompany the Chinese economic debacle will surely be far more serious.
In China itself, the current “Great Deceleration” as the Economist tag it, is putting the question of revolution and mass revolt on the agenda. A reality the ruling CCP is daily ruing about. In 2010 alone, there were over 180, 000 mass incidents (protests) in China, mostly by workers and communities. These protests have been based on industrial and community issues. The downturn in the economy in China will lead to mass actions by the working people. With a quarter of world population and the world’s largest working class, emergence of mass movement or revolution will have a global reverberation.
Conclusion: Prospect for CWI and Socialist Ideas
There have also been development of the idea of mass parties and increasing influence of left and socialist forces as seen in South Africa, where our forces have been playing significant roles in the struggles of workers in the country especially since the Marikana massacre that clearly exposed the neo-colonial, pro-imperialist and brutal character of the ruling ANC, and the bankrupt character of its trade union collaborators â€“ the COSATU. This has led to the emergence of Workers and Socialist Party (WASP), being spearheaded by our comrades in South Africa. But the ANC and the capitalist class, having seen the prospect and the potential of the WASP, will work to undermine it, including the use of fascist methods such as assassination, etc. But, in a radicalized mood, any repression or attack can only provoke further mass radicalization.
In other countries where mass movements have also emerged like in Brazil, our forces have also grown significantly on the basis of our intervention. Also in US, there has been significant development of our forces on the basis of patient, skillful but consistent campaign in communities and workplaces. Currently, there are possibilities that our comrades in Seattle, Minneapolis and elsewhere will win council seats. The socialist campaign of Kshawa Sawant for a council seat in Seattle has popularized socialist programmes and profile, which is unprecedented in Seattle for a long time. She came second in the primary elections just held, beating pro-capitalist politicians to third and fourth positions. She only came next to the incumbent who, despite spending more than ten times than Sawant for the campaign could only lead by 14 percent points. Surely, the coming real election in November between the duo will provide huge opportunity for socialist ideas and profile to gain some permanent currency in not only Seattle, but across the US, where the idea of mass socialist/working class party is not common in recent history. All of this shows the gain that can come to socialist forces, when we maintain consistent but uncompromising socialist position; combined with flexible and friendly work within workers’ and community movements.
In Nigeria too, on the basis of clear analysis, we have also launched Socialist Party of Nigeria (SPN) since mid-2012 to provide a working class and socialist political voice to millions of workers and young people, who are searching for political alternative to the rotten politics of the main parties of the bourgeois, but are left in the lurch by the labour movement leadership that has failed to build a genuine mass working people’s party. Indicating the similarity between South African and Nigerian experiences is the fact that had a socialist or workers’ party also been formed in Nigeria prior to the January 2012 mass revolt against fuel price increase, it could have grown substantially into a strong force, in the heat and as a consequence of the January 2012 mass revolt, just as the South African party has grown. This corroborated the campaign that we have launched prior to the January revolt that labour movement, and pro-labour cum socialist organizations should form a mass party of the working people.
Conclusively, capitalism is in for a long drawn crisis, which some of its thinkers and practitioners have foreseen to last for up to four decades. This will be calamity for working and young people. If the last ten years is seen as the lost decade for the young people, it will indeed be worst for the coming period. Already, a quarter of youth globally are classified as NEETs ((Not in Employment, Education or Training), while in the last few years since the beginning of the crisis, more than 100 million people have been added to the population of the poor. Meanwhile, general population, especially in Africa and Asia is expected to rise (for instance, by 2050, Nigeria’s population is expected to outgrow that of US), with more than 60 percent of the population being young people. In these situations, the crisis of capitalism will generate more social tensions with the young and working people being in the centre stage of the crises. On the other hand, the capitalist strategists are lost as to how to resolve current crisis either in the short- or long-term. They are themselves resorting to gambling and guess work, as seen in Japan’s Abe-conomics, China’s Liconomy, QEs, and the over-emphasis on unsustainable growth in third world. Reflecting the lack of trust of capital in their own solution, by 2020 there will be $900 trillion of financial assets worldwide, compared to $90 trillion of GDP, according to The Economist magazine. The result, according to the magazine “will be a world economy structurally awash with capital and a corresponding shortage of places in which it can be invested”.
Based on these realities, working and young people will not sit by and allow capitalism to destroy their future. Already, there is growing consciousness and general mistrust of capitalist parties. Working masses and youths, in search of genuine alternative have been switching support from one political group to the other. This will open up vista for genuine and consistent idea of socialism in the coming period, as working people come to the conclusion of need to rebuild their organizations. Mass political formations, of the left, will develop in the coming era, while interest in mass organizations will create audience for alternative idea. It is this process that Marxists in CWI hope to play active roles in the coming period.