Kinnock is prepared to take hecause he puts the stability of capitalism even above his own desire to become prime mini- if their crisis continues over the summer) and an oconomic recovery in The Tories lagged a long way behind in the polls during stages of the miners" strike. The way to ensure they don't recover would be t support the struggles against them, but this is of course the exact op- the ruling class, it relies on the votes and support of the working class. to offer. Indeed, given Labour's response is always why should we say what the Tories should do with the coonomy, we're not in government' ster - is that the Tories could Tocover by the time of the general clection. Harold Wilson's Lahour government nearly did after facing a similarly large deficit in the polls. A change in the Tory leadership (not unlikely it is hard to sec what the economists "prefer" in Labour's programme. inevitable, even if we can't predict the how and when. Labour's contradictions 1991 could make this at least a remote possibility. posite of what Kinnock wants. Tories to become unpopular. given that Labour has no fun- place, Kinnock's approach has been to wait for the He couldn': do otherwise, damentally different policies Labour government. Page 24
FEATURES economic and social change. The way in which The long struggle of the twentieth century. more sign of the collapse of the world system what Lenin called the 'epoch of imperialism' - is building up into a crescendo of planet-wide It is widely recognised that the crisis in the knock-on effects worldwide. But, says PHIL immediate future of socialism, but whether Soviet Union and Eastern Europe will have HEARSE, the crisis of Stalinism is just one A new world this evolves will determine not only the which emerged from World War 2. order?
in time for the next election Only in the medium and long term is there any prospect of a new economic hoom: and that requires not cconomy, but massive changes in world The drift towards deeper crisis in the world capitalist cconomy has had its first and most gigantic aspects of this crisis are often under- transfers to the third world have been negative - in other words the poor are being forcod to subsidise the rich countrics, In 1977 the net outflow of capital from the imperialist powers 1o the less developed economies of the third reversed with a net capital flow to the West of Huge outflows of loans to the less basic icason why Thatcher can'1 turn the British economy round just the normal workings of the world dramatic effects in the 'third world". The truly estimated in the West. Since 1983, net capital world was S36.9bn: by 1986 it had exactly devcloped countries started when the banks were awash with "petro-dollars' in the 1970s. But Reaganite deficit financing sucked invest- ment into the United States from the carly 1980s onwards. The downward pressure on commodity prices, coupled with the problems Page 25 Third world poverty? No! It's Britain's Barrow-in-Furness under Thatcher Debt crisis recession. That is the just the 'normal politics. 574bn. the economies of all he major capitalist plied by imports and financed by credit. Thus the United States was rumed into the world's biggest debtor ration, as high interest rates sucked in foreign loans. And the government's own spending deficit mushroomed into the The nct result was to generate a surge in countries. Thatcher's clection victory in 1987 was net based solely on the defeat of the miners" strike, but on the fact the the British economy had been dragged out of recession by this US-led world mini boom - and thus: um- portant sections of the middle class and even sections of the working class hail seen their boom, showing its ultimate umsustainability, was the November 1987 stock market crash. The crash revealed the overpricing of shares worldwide the fact that boom was hased on speculative borrowing and not a fundamental restoration of the rate of profit. Like all Keynesianism had staved off the crisis but only by creating bigger contradictions which Now the world economy is heading into military the expansion created two unwanted effects; The signal for the coming ond of the mini- American would emerge at a later stage. living standards hold up. booms. But this boom was not the result of any dynamic US manufacturing. In compared with Germany and US. was declining. The sup- manufacturing was consumption speculative bonanza. boom Japan, Fact, socialism is an historic possibility. radical solution to this crisis, which could ser The post-war history of capitalism falls anto three main phases: the immediate post-war reconstruction, the long post- war boom starting in most countries in the early 1950s, and the prolonged crisis and spiral towards recession which has lasted Alrcady the post-war crisis has lasted wenly years, as long as the initial boom itself. is a crisis of "overproduction", a crisis of profitability. The uniqueness of the present world situation is that the elements are beginning to emerge of a off a new wave of capitalist accumulation and economic boom. The key factors here would be the restoration of capitalism in Eastern Europe and the defeat of revolution in the third ditions for defeats of the working class in the advanced capitalist west We will look at the different elements of the world crisis and final- When Thatcher came to power in 1979 her government deliberately crashed the Rritish recession. The aim of this deflation, which Eon mark for the first time, was to 'shake out' When Reagan was elected in 1980 everyone expected that he would do the same to the USA. But Reaganomies" turned intes something very different, in some ways the 'military world, which in turn would create the precon- cconomy, cicating a massive deflationary sent unemployment rocketing over the 3 mil- Keynesianism', an enormous increase in the state financed military budget, Reagan turned as the American middle class enjoyed a consumption the United States into a boom economy. Yup SOCIALIST OUTLOOK no 24, May 1990 pies were born of Ronald Reagan, The 1980s 'upturn' Through and restructure British industry, ly discuss how they combine. In Marxist terms, this since the late 1960s. opposite. very
reunifieation of Germany is achieved on a capitalist basis, the configuration of forces on a The modern nation state was bor with capitalism; the integra- separale capitalist states with one another has only ever been permanently achieved by conquest. But in the face of the rise of Jupanese and US cconomic power, there have been four decades of moves towards European integration. Eastern Europe, it looked as if the world Capitalist competition world scale will be transformed. Before the events in : previously of tion FEATURES breaking into protected im- perialist markets have made il impossible for Latin African countries to sorvice, let alone repay their loans: they have been caught in a spiral of debt The trend towards the economies has collapsed, to Korea. of third world' industries expansion of the thind world IMF The 'newly industrialis- ing countries of Asia - Sin- Hong Kong - are partial ex- with Taiwan, austerity packages. and replaced American gapore,
capitalist cconomy would soon revolve around three major blocs: Japan, dominating the four newly industrialised countries in Asia; the United States, with domina- and Western Europe, trying to make but in and France would be the events in Easiern Europe have achieved a partial disruption of this schema. European economic integration may still proceed, but only under the absolute domin- tion of Germany. Even in the unlikely event West Germany would still be the main that German reunification were not achieved, America; openings to the East Latin strongest nations. ton which Germany The East German workers did not think they were voting for unemployment progress in the West, in the USSR it never got capitalism were at the expense of the 40 mil- pense of the third world. Capitalism has not microchip revolution was able to make some off the ground. Thus the gap in the productive hon unemployed, the millions more excluded from the "iwo-thirds society?, and at the ex- potential of East and West has increased. Socialists of course should lusions; the partial successes profits of bankers in the "first world' - is reas- Will the deepening impoverishment of the masses in the semi-colonial countries spark off and perspective for the mass organisations of by reference to the economic facts. The defeat A question mark looms over this process. new revolutionary explosions? This question is fundamentally one of political leadership the oppressed: it cannot be answered merely serting itself with a vengeance. growth has sharply slowed ceptions - and even their The fundamental characteristic of imperialism - in which the less developed economies sink ever deeper into poverty to pay interest charges which fund the The downi.
beneficiary of now cconomic links with the east. Although the costs of reunification will be high for West Germany, eventually it is bound to represent an immense increase in united capitalist Germany would emerge on much more equal terms with the United States and The configuration of the world system will of course also depend on whether a series of Europe and from the independence of a series world situation fit together? If we look at it from the viewpoint of the prospects for world: capitalism, then a number of things are clear. capitalist states emerge in Eastern Now do the different clements of the new Development of the crisis economic and political power. of Sovici nationalities. smaller Japan. triumphant and uninterrupted upsurge Perestroika and glasnost are the response countries against imperialism has to stabilised isclf; but is dynamism far our- of the reform wing of the Soviet bureaucracy be rejected ... there are formidable by the people of the world's poor stripped that of the bureaucratic economies. "Any idea of an automatic, obstacles in the way of new revolutionary victories" in Nicaragua is part of a growing political of- to be rejected. While in a whole series of fensive against the masses of the third world, spearheaded by the United States, but aided by of Gorbachev, which played a fateful role in Any idea of an automatic, triumphant and uninterrupted upsurge by the people of the world's poor countries against imperialism has countries there are massive revolis against im- perialist oppression, there are formidable obstacles in the way of new revolutionary vic- Central to the hastening collapse of Stalinism. which involves all the post- The collapse of Stalinism the deepening "peaceful coexistence" Nicaragua. tories.
In the context of the emerging capitalist downlum, the long phase of capitalist reces- has not been overcome. To boost quire a combination of the re-establishment of capitalism in one or a series of Eastern class in the advanced capitalist countries. In enormous victories. There are considerable European countries with the continued process of assault against revolt in the third profitability for another long boom would re- world, and major new defeats of the working other words, it requires world imperialism to launch a wide ranging offensive and win SOCIALIST OUTLOOK no 24, May 1990 obstacles lo such a process. SION to this crisis. But the end of the Brezhnev doctrine has given the space to the masses of Eastern Europe to push through their political revolt. The consoquence has been the dramatic But this collapse takes place in a very dif- viable examples of socialist democracy in the real world have created a situation in which have wide currency in Eastern Europe. There is a great danger that the revolt will lead to a restoration of capitalism. In particular if the gle for world socialism. The absence of any myths of capitalist prosperity and democracy ficult context from the viewpoint of the strug collapse of Stalinist rule. capitalist states and the communist parties, is stagnation and Indure of the Soviet the lack of dynamism or ability to innovale which paralyses the development of the bureaucratic command coonomy: Only the at the price of stripping the rest of the The lurch into deep stagnation in the ery boom in the West. Living standards of part proved. In the USSR it only stagnated. The economy. At rooL this is a crisis arising from military sccior partially escaped this, hut only USSR was highlighted by the 1980s inflation- of the population in the West held up or im- economy of much of its productive potential. Page 26
FEATURES ahave 30 million, whole soctors of the population have been excladed Since the 1974.5 recession there has been a protracted attack on the position of the working class in the Unemployment has gone well advanced capitalist West
from affluence, and trade union menbership has declined. Since the: late 1970s a wave of capitalist fordist" model of accumulation. at- lempting to relice the state sector and restructure industry has swept the West Yet the basic strength of tact Recession and slump, as the restructuring, based on a new "post- the working class still romains in.
1930k showed, have limited use in they bring ruination to sections of defeating the working class since capitalists as well.
about left wing in Eastern Europe which will fight will be the site of the battle over capitalist res toration, a battle which will take place in the context of a sharp increase in the integration and unity of the labour movement continent- wide. The working class in western Europe also has a role to play in this fight, as part of tion, The battle for a socialist future in Europe If major defeats on the working class are inflicted in the coming years world-wide, then the future is bleak. Only military competition between NATO and the Warsaw pact has prevented inter-imperialist competition tum- ing into inter-imperialist wars in the last four Ecological catastrophe looms without in- lemational socialist planning. Millions of "unprofitable" people will be closed down by imperialism in the third world if a massive restructuring of world capitalism is allowed to socialism: and if it to be won, the socialist left internationally needs to renew its struggle on the basis of the essential twin themes of the next period - socialist democracy and anti-im- Anti-imperialist solidarity must not just be a general support for third world struggles, but a fight against capitalist restoration in Bastern Europe - both by raising the issues in our own labour movement and by helping to build a against capitalist restoration. But in the face of the crisis in the Soviet Union, Eastern Europe and China, "anti-imperialism" without a full commitment to socialist democracy and com- plete support to the workers" struggles in the Stalinist states will look like what it really al- its own struggle against austerity and exploita- is crucial as we head towards the next century. ways was - a political concession to Stalinism. Page 27 Undernourished in Honduras: the Nicaraguan setbacks may undermine moralo elsewhere in S. America inevitable nothing perialist solidarity. occur. regional conflicts in a framework of peaceful The evolution in Central America has been set back a long way by the defeat in Nicaragua, The invasion of Panama and the renewed threats against Libya also stow that Now, without doubt, Fidel Castro and the Cuban revolution are the next mujor target in All this could have a profoundiy demoralis- lead to skepticism about the possibility of revolutionary social change. Setbacks on the which the EMLN offensive has not been able In Asia, imperialist eyes ure on tho con- tinued pressure from Pol Pot's forces against the government in Kampuchea - a direct result of Soviet pressure on the Vietnamese to While these and other glohal flashpoints continue to highlight the struggle against im- perialist domination, our whole analysis leads us to the conclusion that Europe - east and movement is organisationally the most im- planted and potentially the strongest in the much more so than in Japan, the feult to imagine a new 'boom" without big defeats being inflicted here. Eastern Europe: coexistence with capitalism means opposing he United States feels it has a much freer hand to intervene against its third world enemies. ing etfect on the masses in Latin America and political terrain include the defcal of the Lula- Workers Party electoral challenge in Brazil, and the continued stalemate in El Salvador Without doubt the west European workers" stable economies of Latin America, It is dif- West - remains a decisive arena of this grow United Stales, or the newly developing and un Centrality of European events dangers for the workers and peasants. struggle, and withdraw from that country. decisively to break. the US gunsights. ing world crisis. revolutionary have shown, important sections of the working class are as willing as ever lo wage a fight No generalised defeat of the workers has occurred The worst setbacks have probably been the collapse of trade unionism in Spain (although there is a revival of struggle there and the chronic inability of the US labour movement to stem the decline in the proportion of the There is nothing in the new political situa tion which suggests sweeping new victories against the workers in the advanced capitalist The restoration of capitalism in Eastern Europe would of course provide the crucial link in any long-term project for restructuring But it can only be done on the basis of utilis- ing the East as a source of very cheap labour. industry around its most In other words, it requires - as the example bankruptcies and mass unemployment, and the removai of the state welfare systems, It could only happen on the hasis of a defeat, crushing That is not exactly the future which the against stalinism! The prospect is therefore one of a long struggle for the future resi5l austerity, against the attempts of both the Imperialism appears, in the short term at least, to have a much freer hand in the thind carry out a controlled transition to preserve mantled Gorbachev's policy of settling in any country, despite some bad setbacks. the world system and creating a new boom citizens of these countries opted for when they of Eastern Europe. The masses will certainly world" Despite the grave dangers facing im perialism in South Africa as de Klerk tries to capitalism an apartheid is at least partially dis- und prolonged, if the East European workers. SOCIALIST OUTLOOK no 24, May 1990 working class which is trade unionised. West and the bureaucracy to impose it by the miners in Britain have been Even defcals like that suffered partial. As events since last summer countries will be casy to achieve. profitable sectors: and renovating
must argue for socialist democracy without using il as a stick to beat the Sandinistas Out of touch? Sandinista leader Ortega This brings us to the content of the tion of the USA into pther countries. ta organisation is an illusion, um- less you can explain the nature of want to see unconditional support for their organisations. proclaimed loud and clear. Criticism should be in that context, The failure to show this kind of solidarity to the San- dinistas makes the criticisms look like conditions, almost as if we were saying our support for the people would be support for the ing policies. Yet solidarity for the people that by-passes the Sandinis- more than opposing the interven- FSLN - if they adopted the follow. DEBATE