WORLD ECONOMY AND RELATIONS
WORLD ECONOMY AND RELATIONS
Resolution of the DSM 22nd Congress, April 2018
Internationally, there has been much mention of economic ‘recovery’ but there has mean no creation of substantial, long-term jobs in much of 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 largely fuelled by debt, the figures for which continue to alarm the capitalist class worldwide.
Indeed, what obtains currently is far from a real recovery or boom as the under underlying contradictions of capitalism have not been solved but, in reality, have been brought onto a higher level. Despite cyclical ups and downs there is continuing overall stagnation in the advanced industrial countries. In Africa and Latin America the promise of a ‘brighter future’ has now been dashed as the commodity boom of the previous period has now largely evaporated despite a recent partial increase in exports in some countries.
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 real wages have resulted in deepening inequality while the increased wealth of the capitalists is Illustrated by the so-called ‘Paradise Papers’ revelations
The rich worldwide increased their wealth by one fifth in 2016 â€“ 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 generally 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. Often consumption is based upon debt, thereby preparing new crises in the future.
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.
China vs US
There is now competition between the two biggest economies in the world: China and the US. The US, which became the major world capitalist power just under a hundred years ago, is now faced with a rising rival, China. This competition is not just economic, but also strategic. 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.
But both are now on the brink of a full-blown trade war. Trump fired the first salvo by imposing tariffs on imports of steel and aluminium from China and some other countries. China retaliated, hitting the United States with tariffs on $3 billion of exports. But already Trump has announced plans to slap tariffs on about $50 billion worth of Chinese goods
Trump has had a catastrophic effect both internationally and also within the US itself. His excursions into foreign policy have often 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.
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’, partly because there has been some economic growth, but generally he has seen massive erosion in support. But he is universally condemned even by sections of ruling class â€“ perhaps most violently by his ‘own side’, the Republicans. While some Republicans have kowtowed to Trump, there is a brutal ‘civil war’ within the Republican Party that is paralleled by a similar conflict within the Democrats. This could result in Trump’s impeachment. There is a general sentiment in favour.
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! However, the current waves of largely unofficial, organised from below, strikes by teachers for better condition and against cuts which have recorded success in places like West Virginia could help radicalize workers to fight for improvement and reenergize the movement not only against Trump, but also both Republican and Democrat establishments.
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 Committee for a Workers’ International (CWI) has a sympathetic approach to members of movements like the DSA and the Corbyn supporters in Britain. We put forward concrete proposals for action and our socialist programme to them while outlining the limitations of the leaderships of such organisations.
China could also face big upheavals; the recent Congress of the so-called Chinese ‘Communist’ Party consolidated the powers of President Xi Jinping, the most powerful leader since Deng Xiaoping and possibly since Mao Zedong. Xi has cemented his grip over the Chinese regime through a ruthless power struggle and anti-corruption purge, forcing factional opponents and recalcitrant regions to “bend the knee”. This was further confirmed by his “coronation” at the so-called Communist Party’s (CCP) 19th Congress in October, at which Xi imposed his own choice of leaders, eliminating or demoting possible challengers, and inserted his “thought” into the constitution. 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. This step means that future popular opposition could rapidly be concentrated against the supreme leader himself, rather than underlings.
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. a financial meltdown.
The Chinese Communist Party has continued to viciously clamp down on activists and 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, particularly now when China now has the largest working class in the world.
Russia and the West
Tensions between Russia and the US, EU and even to a degree with China continue to worsen. It has been indeed escalated by poisoning of a former Russian spy with nerve agent in Britain. Russian was accused of the crime by Britain and the West, something that has led to tit-for tat expulsion of envoys and other diplomatic fireworks. The Kremlin’s initial support for Trump has now been forgotten, as the conflict of imperialist interests in Syria, North Korea and elsewhere continues. It allows Putin’s regime to use anti-western rhetoric at home, fuelled by the closure of some of its diplomatic missions in the US and the continuing controversy of the Kremlin’s ‘trolls’ and interference in western elections.
After a long period of exchanges of words up to the threat of nuclear strikes between Presidents Trump of United States and Kim Jong-un of North Korea, there is now suspension of hostility as the summit between the two madcap leaders being proposed. Ahead of the summit Kim had visited China â€“ North Korea’s biggest ally – in his first ever official foreign trip. There is also thawing of the frosty relationship with South Korea as his Kim’s sister was invited to Seoul during the Winter Olympic.
But despite the progress in recent months, a number of factors could affect the chances of success. While Kim has reportedly told China and South Korea he is willing to abandon nuclear weapons, he has stated that this comes with conditions, according to China’s Xinhua news agency the North’s conditions include the removal of a US nuclear guarantee for South Korea, observers say. Meanwhile, US and South Korean troops recently held annual military drills which the North has historically seen as provocation.
Contrary to the propaganda of the ruling classes that they had re-stabilised and resolved the political and social crisis which unfolded in Greece; Brexit and now Catalonia, reveal the underlying social and political situation which exists in many EU countries. There has not been a recent generalised upsurge in the class struggle in Europe. Yet this does not mean that the capitalist classes face a stable situation. Political shocks, crisis and upheavals continue to confront the capitalist classes across Europe. For instance, the political deadlock in Germany that trailed the Christian Democrats’ worst election performance since 1949, led to a certain paralysis with major repercussions for Chancellor Merkel, German capitalism and Europe. The revolutionary events that rocked Catalonia are of importance for the Spanish state, the EU and internationally.
Some capitalist commentators confidently look towards a return to substantial economic growth based on the rising levels of the domestic product within the Eurozone in the last quarters. However, the growth has at best been sluggish and extremely uneven. It has not been accompanied by a general rise in living standards but by continued austerity alongside an increase in speculation again and the building up of ‘bubbles’ as capitalists look for possibilities to invest their over accumulated capital. Greece, Spain, Portugal and Italy remain gripped by mass unemployment, especially amongst the youth. Across the Eurozone the real level of unemployment, not just those officially registered, including hidden unemployment, stands at 18%! Precarious jobs and menial wages, especially for the youth, is increasingly the norm throughout the EU. The slave labour scheme in Italy, which compels students to work for employers for no wages, is an indication of the scale of the attacks which have taken place.
In Britain the polls point to an increase in support for Corbyn’s Labour Party since the last election and likely, although not certain, victory at the next election. Corbyn’s “victory” at the last election has temporarily served to demoralise the right-wing Blairistas in the Parliamentary Party. However, they remain there, have an overwhelming majority amongst Labour councillors and influence over the party machine. The unwillingness of Corbyn and his allies to mobilise their supporters into action has allowed a large number of Labour candidates in the May 2018 local government elections to be Blairites. In the local councils the Blaristas continue to carry out cuts and austerity measures which Corbyn refuses to publicly attack in order to maintain “party unity”. The Blairistas nationally are waiting as a 5th column to sabotage and undermine a Corbyn-led government should he win the next election. The party remains two parties in one and its character is unresolved as we have explained in previous documents and articles.
The majority of the forces involved in Momentum and the Labour Party have many of the features and characteristics of the new left parties which have emerged in other European countries. While Podemos has won the support of young people and important layers of workers, especially the new younger sections of the working class, it has also included big layers of the radicalised petty bourgeois youth. Furthermore the Podemos leaders reject having a democratic party structure in favour of internet voting. The BE (Left Bloc) in Portugal lacks a consolidated solid base amongst the industrial working class. Its membership is largely amongst young “precariat” workers and petty bourgeois youth. Momentum in the Labour Party in Britain is largely composed of petty bourgeois layers. This does not detract from the importance of these developments and our sections orientating towards them and developing the necessary tactics in each country.
The mixed class composition of these parties is reflected in the programme and ideas they defend which are not yet of a classic reformist or left reformist character, with little or no reference to socialism at this stage. Even Corbyn, with the most “left” posture at this stage does not generally raise the question of socialism. One of the tasks of the CWI is to explain the need to oppose capitalism as a system and raise the idea of socialism as an alternative to it.
The shocks which have erupted in the past period; Brexit, Catalonia and the growth of the right wing, nationalist AfD in Germany, are an anticipation of even greater upheavals which will erupt in Europe in the coming period. These will include the elements of revolution and of counter revolution as we have already seen. Through the application of flexible and bold tactics and initiatives the CWI in Europe can make significant steps forward and assist workers and young people entering political and industrial struggles draw the necessary conclusions of the tasks and programme necessary to defeat capitalism.
The seemingly intractable war against Isis (Daesh) has reached a turning point with the defeat of the Islamist terrorist group’s attempt to build a state. 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 attempt by bourgeois nationalist leaders 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.
In Tunisia 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. In Libya, the situation has remained disastrous since Western intervention. It is essentially a failed state, with different power centres of armed gangs, as shown by how African migrants are subjected to open slavery.
The recent eruption of a semi-mass uprising of Palestinians in East and vicious clampdown on protesting Palestinians in Gaza show the bestiality of the Netanyahu government in Israel and the weakness of Palestinian leadership. An important character of this period is that, despite some counter-revolutionary features of period, there is fear of revolutionary explosions.
A socialist and Marxist approach, which seeks to unite all the peoples of the Middle East, is one of the keys to solving the problems of poverty and sectarian divisions in the Middle East.
Perspectives for Latin America present a deepening of the economic crisis, a sharp polarisation between the classes, political crises, aggravated by endemic corruption, and the inability of the ‘national bourgeoisie’, insofar as it now exists as a coherent force, to show a way forward for society.
Brazil, the biggest country in Latin America and previously the most prosperous is presently experiencing a major crisis which has produced almost a position of political deadlock following the impeachment â€“ a ‘soft coup’ â€“ of the reformist Workers’ Party (PT) President Dilma. The previous vice-president Temer, who orchestrated her removal and replaced her, has been shown to be implicated in colossal bribery and corruption. The recent court sentencing of former President Lula ahead of presidential election in October where he has been expected to stand, and win, will definitely complicate political tension in the country.
Argentina presents the same picture of economic and political deadlock which the election of Macri, rather than offering up a ‘new’ road, has resulted in more of the same.
The social, political and economic crisis in Venezuela has worsened. The ruling class internationally has tried to use this to discredit the idea of ‘socialism’ as it did following the collapse of the Stalinist regimes in Eastern Europe. However, the entire world situation and crisis of global capitalism will tend to weaken these attempts. The Maduro regime has swung further to the right and is struggling to maintain itself in power to defend the interests of the ruling bureaucratic elite which includes the main sections of the military. At the same time, the reactionary right-wing opposition has failed to gain sufficient support and momentum to remove the regime. A polarised impasse and stalemate currently exists. Exactly how this process will develop is uncertain at this stage. The crisis which exists is not, of course, a failure of socialism but a consequence of not breaking with capitalism, as we warned would be the case. The forces of the CWI in Venezuela, in extremely difficult conditions, work to try and assist those, especially the ‘dissident Chavistas’ to learn the lessons from the failure to carry through a break with capitalism and introduce a genuine democratic socialist alternative.
In sub-Sahara Africa, the same blind alley for landlordism and capitalism exists. The crisis of capitalism is worsened by neo-colonial character of the continent with the backwardness of its capitalist class and unresolved national question which is a legacy of colonialism. The ruling elites of the continent want to break the national barrier with a free trade agreement â€“ Africa Continental Free Trade Area. But the two biggest economies â€“ Nigeria and South Africa â€“ which together are one-third of Africa’s GDP and more than 20 percent of the continent’s total population, are among 16 countries which have not signed the agreement. Presidents Muhammadu Buhari of Nigeria and Cyril Ramaphosa are both standing in elections next year and afraid signing the agreement could have a backlash and thereby jeopardise their chance. This underscores the inability of African people to unite on the basis of capitalism.
The unresolved crisis of capitalism has begun to assume expression in political struggle which for now as factions of the capitalist elite in the lead in order to prevent upheaval from below that could undermine the system. This is what obtains in Zimbabwe where President Robert Mugabe was removed after over 30 years in power. We have also seen President Jacob Zuma forced to resign in South Africa. Also in Ethiopia, Prime Minister Hailemariam Desalegn was forced to step down in a move to attempt ending ethno-political crisis that has lasted many years. In these cases the sections of the ruling elite sacrifice their leaders in order to maintain hold on power. In the recent years where something close to fair elections have been held we have seen opposition defeating the ruling parties for example in Ghana, Nigeria, Gambia and lately in Sierra Leone. The failure of these false changes will help make more and more working people to search for alternative to capitalism.
In Cameroon, the overall capitalist agenda of exploitation by President Paul Biya which includes marginalization and discrimination of the people of South Cameroon has provoked a separatist struggle in the English-speaking region. But the crisis has been escalated since October 1, 2017 when the leadership of the Southern Cameroon separatist group declared independence from Cameroon. They called the new state the Republic of Ambazonia. The declaration has led to further intensification of repression. Activists estimate that about 100 people have been killed and 1, 000 are in detention. Some of the separatist leaders were arrested in Nigeria with the help of Buhari government which has similarly viciously repressed the agitators for the state of Biafra in Southeast Nigeria.
Socialists recognize the right of Southern Cameroonians to self-determination as we do in respect of Biafran agitators. Given the colonial legacy of the creation of modern African states, no serious Marxists can find a way to a people under the yoke of national oppression without recognizing this right unconditionally. However, socialists must warn that separation is not an automatic solution. The creation of a separate state of Ambazonia will not automatically resolve anything from the point of view of the working class and poor of Southern Cameroon if capitalism is not defeated and a workers and poor peoples’ government established which would ensure the collective ownership of the wealth, a socialist plan and respect for the right of national minorities in the new state.
In Nigeria, Africa’s biggest economy and South Africa, the continent’s most industrialised country, we have sections of the CWI. This shows the potential therein for us to influence development in workers’ movement and political struggle in the two countries that could vibrate in the entire continent. The issue of a new mass workers’ party is still a live issue in the workers’ movement in the two countries. Though we have own parties â€“ SPN in Nigeria and WASP in South Africa – to stand in elections with a socialist programme, we are still committed to working and campaigning for a mass working people party. With such party on a socialist program in the vanguard of the powerful working class of the two countries, it is possible to begin the defeat capitalism in Africa from Nigeria or South Africa.
Committee for a Workers’ International (CWI)
As the last CWI IEC world document concludes the events arising from the crisis of capitalism have had a profound effect in beginning to change consciousness of the masses worldwide. We are now seeing the rejection by significant layers of neoliberalism, an idea that Jeremy Corbyn has echoed and has been a constant theme in the analysis of the CWI in the past years. This has led to a generalised phase of left radicalisation in the workers’ movement internationally. This phase of left radicalisation can be followed by a more ‘distinct’ left reformism and become an international phenomenon. It will give way under the hammer blows of the events that loom to a more determined class mood and consciousness amongst the working class and particularly the youth.
This will lay the ground for big opportunities for us to win the new layers in particular to a clear revolutionary programme and organisation. The forces of the CWI require audacity in the interventions that we have made and we will make a next period. But equally it is vital to understand the rhythm of events, which sometimes on the surface can appear to be moving slowly but which are preparing the ground for huge political convulsions, out of which we can grow and become a significant force. We need the urgency but we also need patience in relating to the mass movements that are developing, which will not be just a simple repetition of the past but will have new features, will throw up new issues to which we must respond in order to build the national sections and the International.