JUST AS the capitalist market systom roachos a global im. passo, condemning billions to grinding out to jettison the Party's historic com mitment to an alternative. The fight to uphold Clause 4 and for a an internationalist outlived its useful. ness.
HE LOUDER the celebrations of imperialist leaders, the deeper the crisis blighting the lives of billions of working people around the Even as it congratulates itself for outliving the miserable stalinist caricature of 'socialism', the capitalist system continues to demonstrate its total failure to satisfy the most elementary needs of the majority of humankind.
And as it does so, the market system continues relentlessly to underline the political bankruptcy of all political formations which depend upon it and act to implement it - whether they be British Which Road to Freedom?
Socialist Action on the National and International Situation AND a substantial introduction by US Fourth Internationalist Michael Schreiber. PO. Bo Tories, US Democrats, Spanish Socialists, Polish Communists or ANC nationalists. Exporting poverty THE MARKET system brings daily misery to billions of people. Poverty, hunger, disease, homelessness are rampant. Absolute poverty is at record levels. 53 per cent of the world's population live in the poorest countries, with an average income of just $330 per person, sharing only 4.4 per cent of the world's income. The gap between these poor countries and the advanced economies is growing. The richest countries with 16 per cent of the world's population have average incomes 59 times higher, with 78 per cent of the total income. The wealth of Africa, with double the population of the USA, and despite its huge natural resources, is little more than that of Belgium. The problems of poverty are worsened by interventions of the IMF, whose patent formulae for establishing capitalist market economies - privatising state enterprises, cutting state spending, freeing up prices and stripping out subsidies - have brought abject misery to millions. Time and Now available in Europe! Exclusive from Liberation! By Dr. Neville Alexander INCLUDES: Revisiting the economic crisis in South Africa, by Carl Breker PLUS resolution of the Workers Organisation for Just £8.50 including postage from Liberation! Publishing × 1109 L • N4 2UЦ, again, there have been angry demonstrations against food and fuel price increases and currency devaluations ordered by the IMF.
Though privatisation has gone slowly in Africa, with less than a fifth of state firms sold off (and almost none of them the economiGrowth of economic migration: Refugees fight for entry stamp into Jordan cally vital ones such as airlines, mining, telecoms or electricity) lasting damage is being done by the western prompted reforms. In Zimbabwe, the imposition of charges at health clinics has been followed by a tripling of numbers of women dying in childbirth. In Zambia, the end of price controls have brought ruin to peasant maize farmers, while the textile industry, stripped of government protection, has collapsed. In Ghana, the price of western intervention has been the sale at a knockdown price of half the government stake in Ashanti Goldfields - leaving Lonrho as the largest shareholder. The $1.4-$1.7 billion expected for the shares would increase the capitalisation of Ghana's stockmarket by more than ten times. But still there are fears that if the World Bank pulled Much of Africa remains on the sidelines of the world economy. The total of foreign direct investment in the continent for 1993 was just £1.6 billion, less than three per cent of global flows of investment. The latest World Bank study does not even measure this investment or bother to assess its rate of return. China, not Africa, is the largest recipient of World Bank project funding.
By contrast, the IMF early in 1994 agreed a new £1.5 billion package to prop up the Yeltsin regime in Russia, and to reinforce a $4 billion standby loan which is keeping capitalist wolves from the door who are demanding repayments on the old USSR's $80 billion foreign debt.
With the main imperialist powers struggling to resolve their own domestic economic problems, and seeking maximum strategic advantage from the collapse of stalinist rule in the east, there will be less chance than ever that Africa or south Asia can attract the capital they need to construct viable capitalist economies: For most imperialists there is simply not enough to gain in Africa for them to invest capital. The law of uneven and combined development, under which newlyemerging capitalist enterprises are forced immediately to compete in a world market with the largest and most technically advanced and experienced multinationals, makes it all but impossible for Africa, Latin America or much of Asia ever to achieve more than dependent status. Only measures running directly counter to the capitalist free market can hope to rectify this imbalance: expropriating domestic and international capital and offering a cancellation of past debts; technical aid; educational programmes and sustained Deepening instability in the east: Abkhazian riots quelled by troops trade with more advanced economales To fight for this, marxist parties based on the working class and with a programme developing Trotsky's theory of permanent revolution are needed to lead the combined struggle for genuine in dependence from imperialist domination and for socialism, which will link working class and peasant struggles, and reject the blind alleys of collaboration with national or international capital which have led many nationalist movements astray. Crisis in the East ]HE ATTEMPTS to extend the market system into the ex-Soviet Union and Eastern Europe have so far led to a shocking increase of misery. There has been an horrific 40 per cent drop in industrial production in Russia, where nine per cent of enterprises are technically bankrupt, and economic and financial chaos throughout the ex-Soviet republics.
Yet the western bankers hail Poland's deal to repay most of its £13 billion unpaid bank debts as a success. Only Russia remains in default. Reactionary regimes seeking to roll back and privatise 'the nationalised economies in the ex-Stalinist states face not only political obstacles at home, but a shortage of capital for investment. Imperialism simply does not have the resources needed to construct new capitalist economies on the ruins and wastelands of decades of bureaucratic mismanagement. There will be encouraging words from the bankers, a few selected projects will be favourbly regarded but, as the Poles have found, this will fall far short debtomsung thiem to the big i
league. Overall, the lack of seriousness attached to investment in Easter Europe was symbolised by last year's ludicrous scandal of Jacques Attali and his marblelined investment Bank. He spent more on its headquarters than it lent to its target countries.
Levels of direct investment from the west have been growing, but are still little more than a flea-bite in comparison with the tasks involved.
As the old system collapses into crisis and criminality, with wholesale theft and graft by the managerial layers of the new bureaucracy, the backlash of stalinist and conservative elements begins to link up with extreme nationalist and chauvinist forces. This is producing a growing political stalemate.
In more and more ex-stalinist states the old - often renamed -stalinist parties are moving back into positions of power, not to defend nationalised property or the social gains of the masses, but seeking themselves to oversee the transition to a new market system, and to grab in the process a share of the pickings, property to be privatised and the profits to be made. Piosos of China for sale JHE CHINESE bureaucracy gives a good example of the readiness of stalinism to do far-reaching deals with capitalism.
The Chinese economy, which in 1989 was little larger in GNP than that of Spain, is growing rapidly. But it is jealously watched by bureaucrats unwilling to share more of the surplus than they have to in procuring western technology and capital, and intent upon establishing a new market system under their control.
With only 62 per cent of Chinese homes connected to electricity supplies, vast new deals are on offer to western power station manufacturers, but future potential profits are restricted to a 12 per cent return on capital. Big capital investments in China are still unlikely as long as bankers and industrialists remain nervous about the political succession to Deng Xiaoping, and anxious at the lack of any infrastructure of legislation to protect their capital.
It is clear that with a vast state bureaucracy seeking to exert its influence to maximise its own control over developments, the prospects of unfettered profitable investment and exploitation in China are not great for wester capital.
The November 1993 Plenary of the CCP decided to take another step towards a "socialist market economic system" by setting up a new sytem of 'modern enterprises' as a staging post to privatisation. Some of these enterprises will be fully private, some limited corporations, and others will retain state shareholding.
Already some of the most efficient and profitable enterprises have been sold off - leaving the least attractive in state hands. The CCP carefully distances itself from the consequences of privatisation, declaring blandly that "Enterprises should, in accordance with the demands of the market economy, perfect and tighten up their internal management, and rigor"sly enforce labour discipline." The imposition of market disciplines on enterprises also involves controls to combat growing inflation,in order to preventan explo sion of mass anger. Political rovolution JHE EVENTS in the exUSSR, Eastern Eutope and China serve to underline the basic tenets of the Trotskyist struggle for political revolution. The 1980s, which began with the frontal challenge of Solidamosc to the power of Poland's Stalinist bureaucracy, saw Stalinist regimes increasingly face a stark choice. Even as they clung on to political power through increasingly desperate repressive measures, they were confronted with the stagnation and crisis of their economies, lagging ever further behind the technical advances in the West, yet forced to seek loans and credits from Wester banks. More and more regimes saw what at first had been passive working class resistance developing into the downright hostility of the masses Hoping to avert a showdown and retain control, sections of the Soviet bureaucracy attempted a risky programme of structural reform (Glasnost and Perestroika), which triggered a wholesale shift in bureaucratic policy throughout Easter Europe. The introduction of elements of marketisation only resulted in the profound dislocation of the centralised 'command economy'. However, the limited democratic openings that the reforms entailed lifted the lid on the pent up anger of the workers, which, in turn, further propelled the disintegration of the state.
It became increasingly clear that the post-glasnost Soviet Union could not pose the military threat of intervention that had terrorised the working classes of Eastern Europe: the prison doors had been left open, and the masses took advantage to rid themselves of hated bureaucrats: a clear example was the events in East Germany which led to the fall of the Berlin Wall.
Without a revolutionary class party representing its interests, the proletariat was - not for the first time in history - cynically used as a battering ram against a discredited regime by alien political and class forces which subsequently tumed against it. Facing mass unemployment, the workers in East Germany will have plenty of time to count the cost.
From then on, Gorbachev and Yeltsin's failed reform programme tumed into a headlong, counterrevolutionary rush towards restoring capitalism, a process aped by the other bureaucracies and newly elected governments of Trotskyist ideas are confirmed: jam-packed London Socialist Outlook meeting Eastern Europe. But the crisis has by no means been resolved. On the contrary, Russia, and much of the ex-Soviet Union and Easter Europe face an economic and social catastrophe. Bureaucratic rule and the old command economy are in a state of disintegration, while at the same time it has proved impossible to restore a viable capitalist system in the short or medium term.
Thus, Trotsky's analysis of the counterrevolutionary character of the bureaucracy is confirmed, including his prediction that, in the absence of political revolution, attempts by the bureaucracy to restore capitalism will only result in its own descent into criminality and the misery of the masses. Despite the electoral advances made by some extreme nationalist, xenophobic and populist leaders, such as Zhirinovsky in the Russian Federation, a more fundamental trend is descemable. Ioday, disillusioned with market reforms, the masses are turing back to the revamped communist parties which are now increasingly led by managerial sectors who have some (temporary) interest in the maintenance of social property. At best this may provide some breathing space for the construction of real democratic socialist altematives.
But there must be no illusions: the uld 'Communist' parties, the state apparatus developed by stalinist parties in Easter Europe and the degenerated workers' state apparatus in the Soviet Union, have proven themselves neither able nor willing to defend either nationalised property or the historic gains of the working dass after the post-war expropriation of capital.
In Poland we have seen an old, discredited Communist Party return to implement a restorationist programme in China we see a ruthless stalinist regime using its continued monopoly of political power to enforce the re-imposition of capitalist property relations.
The fight for socialist political revolution, for socialist democracy, for workets' control of industry and a workers plan of production, for democratic, independent trade unions, for defence of nationalised property against privatisation and profiteers, and for working class politics independent of the old bureaucracy and the new nationalists and proimperialists remains the key to the future: all other roads lead horibly and inexorably back to the dark days of exploitation and - as the proliferation of inter-ethnic conflicts show - barbarism. Tho Dotroit spinners THE CENTRAL players in the capitalist market have key strategic structural problems still unresolved. The March G7 summit in Detroit showed the varying attitude of the governments of the seven richest countries to the growing tide of unemployment created by their policies at home. Of 35 million officially deemed unemployed in the west', 20 mil lion are in Europe, causing social tensions and potential problems for governments. But while Bill Clinton and the British Tories press ruthlessly ahead with free market deregulation aimed at slashing wages and welfare spending to reduce overheads for employers, Japanese capitalism remains wedded to the Keynesian policies which everywhere else died with the post-war boom. Cushioned by their vast trade surplus and competitive advantage in world markets arising from high rates of investment, Japanese ministers are still pumping extra cash into infrastructure schemes to boost the econom. They can war the G7 against "imprudent dismissals which ignore the feel ings of employees", and stress the need for redundant workers to be offered new jobs.
rise in unemployment is the rapid decline of employment in manufacturing industry, and of manufacturing as a percentage of the GDP of the advanced economies.
Of the advanced economies, only in Japan is the manufacturing workforce now larger (by 20 per cent) than it was in 1970. In Britain, by contrast, the dedine has been dramatic, to just 45 per cent of the numbers employed in 1970. This demise has been accompanied by a worsening in the balance of payments, as consumer goods have been imported in ever larger quantities, while British firms have ever less variety of goods to export.
Just one British worker in five is now employed by a manufacturing firm, and one in six in the USA, compared with one in three in Germany and Japan. But this dedine has run alongside a big inin manufacturing productivity. In the USA, 90 per cent of the 1970 workforce produced almost double the 1970 output in 1992. Many of these industrial jobs have been switched to plants in lower-paid developing countries, often by subsidiaries of the same multinational firms. 40 per cent of the output of British firms is now produced abroad Other one-time bedrock manufacturing industries have been eclipsed by competition from abroad: in Britain, textiles, motorcycles, cars, shipbuilding, much electronics. and now even coal mining have been largely wiped out and replaced by imports. Mil lions more jobs have been eliminated by technological advances, decimating the skilled workforce in print and other industries. Organise марію The scourge of unemployment is one of the most difficult to combat through normal trade unionism. It requires both strong organisation and a high level of consciousness about the nature of the capitalist market economy to stage strikes and occupations against an employer threatening redundancies, demanding the opening of the books and a policy of work sharing with no loss of pay.
Without such policies and fighting leadership, or even serious nationwide campaigns for a 35 hour week, workers can be persuaded to accept a seemingly large lump sum of redundancy money, rather than risk an uncertain outcome to a half- hearted fight. The policy of work sharing and the 35 hour week is also important for organising the unemployed alongside the unions. This is anathema to the British union bureaucracy, who rejected any attempt at örganising the unemployed in the early 1980s, threatening sanctions against Trades Councils which persisted in doing it. The consequences of this failure of the British unions are painfully clear for all to see.
In Europe, however, campaigns are growing again for the 35 hour week, and we should promote these while also attacking the TUC's abandonment of the unemployed. Local campaigns should be mounted aimed at mobilising and organising part-timers, casual workers and the unemployed. Convoyor belt onds Alongside the decline of manufacturing has come a relative expansion of jobs in the service sector, ranging from retail and catering, through to finance, computing and design. However the service sector is also suffering a squeeze on jobs.
Privatisation in Britain and elsewhere of what were state-owned utilities and services has triggered a new wave of job cuts and subcontracting, slashing jobs and working conditions for millions more workers.
The break-up of the historic centres of proletarian power, the big factories and centres of manufacturing, has struck a major blow at trade union strength. And while drastically reducing the numbers of traditionally 'male', full-time jobs, the rise of the service sector has created growing numbers of part-time, casual, often low-paid work to an increasingly unorganised workforce - many of them The British trade union movement has been especially hard hit by this international phenomenon. Traditionally strongly organised, it has suffered a combined rise in unemployment and a rapid drop in union membership, down to just 38 per cent of the workforce, having lost four and a half million members since 1979.
Even this understates the qualitative weakening of most British unions, where historically powerful industrial shop stewards movements and industrial unions such as the NUM have driven forward the wages struggle. The loss of these vanguard forces has yet to be compensated by the emergence of new combative elements in the organisation of workers in the service sector.
A range of New Management Techniques, like short term and individual contracts (now even 'nil hours' contracts offering no guaranteed wage week to week), and the abolition of most previous employment protection not only worsens conditions, but makes the fightback more difficult. Despite some important victories the pace of victimisations continues to increase, with a consequent loss of activists.
The problem is compounded by the relative strengthening of the grip of full-time union officials, as lay and unofficial structures have weakened and collapsed. This helps reinforce the grip of new realism and the defeatist right wing, and lay the groundwork for future retreats and betrayals. The debt mountain One of the reasons investment remains at a low level is that free market liberalism has largely failed to resolve the world fiscal crisis and clear up the huge state budget deficits - which include not only the crippling Third World debt but also the gigantic trillion-dollar US deficit and growing debts in Europe.
The long wave of stagnation and recession simultaneously increased the social security costs of growing unemployment while it reduced government revenues through loss of taxes. Further cuts in state spending - on capital projects and services - cut outgoings, but also increase unemployment and deepen the recession, so further undermining tax receipts.
In the USA, even the Reagan 'boom', pump-primed by colossal military spending, widened the deficit and forced up interest rates as the government was forced to borrow on the money markets to bridge the gap.
In Britain, the deficit has grown to such an extent as to threaten the bankruptcy of the state; only North Sea oil has prevented a crisis occuring earlier.
The problem has been exacerbated by the historic British bourgeois tradition of investing abroad. 60 per cent of British capital investment goes abroad - more easily since Thatcher's deregulation of the City. Forty five per cent of British manufacturing activity takes place overseas. GATTastropho JANFARES in January I greeted the GATT agreements liberalising' world trade to the overwhelming disadvantage of the working class and peasantry in the underdeveloped economies.
They will be the prime victims as fledgling domestic manufacturing industries, agriculture and extraction industries are exposed to the bitter blast of global competition with multinationals, and raw material prices continue their downward spiral.
As the GATT director general admitted, "It is wrong to say that liberalisation is going to make the poor rich as a result of the opportunity offered to them".
In fact the USA, Japan and the European Union will continue to monopolise 80per percent of world trade, leaving the poorest 20 per cent of the world's population to share less than one per cent. Poor countries are even asked to eliminate subsidies and protectionist measures, and to grow food for domestic consumption rather than try to export cash crops on the world market.
Indeed even the limited 'expansion' which has taken place in the OECD countries as key economies begin to clamber from outright recession, has taken place on the back of huge hidden subsidies from the oil-producing countrieswhere prices of £13 a barrel offer little more in real terms than the pitiful return before the oil shock brought 70 per cent increases in 1973.
It is clear from the realities of world trade today that despite deals to trade technology between South Korea and China, and whatever growth might take place in Brazil, in India or elsewhere, there is no possibility of new industrial powers emerging to challenge the global domination of the present imperialist power blocs.
There is no new golden age of capitalist expansion: simply more of the old misery until the working class organises to take power in its hands and smash the market system. Costing us the earth → HORT SIGHTED and reactionary regimes in the OPEC states are pumping out irreplaceable assets at such a giveaway price that alternative energy or conservation measures are not considered economic, while bland governmental phrases about the environment have done little to limit the output of greenhouse gases.
Indeed it is not only the advanced economies but also those struggling to catch up with them which are polluting the atmosphere to alarming proportions. China and Brazil between them pumped almost a million tonnes of greenhouse gases into the air in 1987, while Japan, with a GNP four times as large as both combined, produced 220 tonnes.
The tide of pollution is even more serious when the leaks and discharges of radioactive and other poisonous waste products into the atmosphere, soil, rivers and seas are taken into account. The production of non-degradable plastic waste, consuming ever larger acreage in dangerous landfill dumps, is sowing seeds of disaster for future generations. It is clear that as long as the world is driven by cost-cutting and the lust for profit these outrageous and short-sighted policies will continue to put the lives and health of millions at risk. The environmental issue is above all one of planning, accountability and control: even in non-capitalist economies the disastrous legacy of environmental vandalism of the stalinist bureaucracies in the USSR and eastern Europe remains an unresolved problem.
Even while it fails to feed, house or educate hundreds of millions, the plundering market system is also taking a terrible toll of the earth's natural resources. Not only fossil fuels, but forests and fish stocks are falling prey to the unfettered drive for profits - even the free-market fetishists of the Economist have called for global a policies to control fish stocks. But such policies are ultimately only enforcible through planned food policy, which in tum demands an end to the competition of the free market, so that fishing crews, like farm workers, are guaranteed a decent standard of living without having to strip bare the natural assets of the oceans.
and the market system / are in constant contradiction with each other. So we find that behind the facade of growing cooperation displayed at the G7 summits, the basic thrust of the market is increasingly dividing the advanced economies into three main trading blocs, headed by the USA, Japan and the European Union.
Each bloc, and sometimes each major partner within each bloc, is primarily intent upon maximising
its share of markets and preferential deals in the developing and underdeveloped countries. Each is seeking its own inroads into Eastern Europe.
The North American Free Trade Agreement cements a US-led alliance of USA, Canada and Mexico.
In exchange for lessening the pressure on Mexico to repay its $100 billion foreign debt, and erecting protective barriers to ward off competition for Mexican firms from Europe and Japan, the deal allows US and Canadian monopolies privileged access to the Mexican market.
Under the guise of NAFTA, the USA is seeking to prise open restricted markets in Asia and around the Pacific Rim countries, previously seen as the preserve of Japan.
The Japanese remain the dominant voice of the increasingly powerful bloc of Asian countries where Japanese capital has played a key role in developing modern industries-notably South Korea, Singapore, Taiwan and Malaysia. Japan is currently funnelling additional investment into Indonesia and southern China.
The most vexed of relations arise in the European Union, where the attempts to forge a common trading bloc wielding political clout comparable to its economic strength run repeatedly into the conflicting national interests of substantial national bourgeoisies. Nonetheless, the fear of intense competition from NAFTA, together with the storm clouds from the dynamic Pacific-rim economies dominated by Japan, reinforce the dynamic towards European integration. The capitalist project for Europe was frozen half way between a simple free-tade zone (which the British Eurosceptics want to retain) and a real federal state (which they totally reject).
The Single European Act and the Maastricht treaty were attempts to move forward beyond this untenable situation with the creation of, amongst other things, a common currency. The creation of a political and military authority was scheduled for later. The more far-sighted European bourgeoisies have aimed at economic rationalisation on a European-wide scale. They pressed for a European Monetary System (EMS) and a Europe wide curb on government spending to rein in theory+practice 8 • A World in Crisis • page four costly welfare states. Both North America and Japan have comparatively minimal social welfare programmes and larger, more efficient industries.
Though the ERM collapsed, the same programme is now being introduced through the back door, designed to bring the different states into line and further their integration, making the EU competitive with the other major blocs. The ERM crisis and the subsequent attempts to defend the pound wiped out huge exchange reserves in Britain (at least £15 billion), with similar losses in France, Italy and the Spanish state. This exposes the weakness of national banks in the face of the floating capital of international speculators and bankers, of which $900 billion is exchanged daily IN CRISIS (three times the combihed exchange reserves of all the G7 countries).
It also brought into sharp focus the huge budget deficits building up in many European countries, making an onslaught on welfare spending inevitable if the EU countries are to meet the new Maastricht limit of three per cent of GDP.
The result of the Maastricht process is already making itself felt in the growth of mass unemploy ment, privatisations, speed- up, new managment techniques, massive cuts in the social wage (even legaly imposed limits to the levels of welfare spending, all of which compound the effects of the recession, and erosion of democratic rights. This is why it is a major betrayal of working people everywhere that the Labour Party and union leaders fully support the creation of the EU, using the pathetie fig-leaf of the unenforcable Social Chapter as their justification. Across the continent, the picture is the same. Workers' parties, whether social democratic or revamped communist parties, have been roped in to support the capitalist strategy. This class collaboration has led to a further step away from any concept of socialism and open embrace for the capitalist market - a 'Euro new realism', which has failed miserably to provide any alternative to the capitalist crisis.
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