It will take a revolution to end capitalism

Since we wrote the article ‘Are we reliving a crash like 1929?’, the media has already changed its tone, no longer playing down the extreme gravity of the present economic crisis or its similarities with 1929. But it is important to put all the current talk about ‘the end of capitalism’ into a clear perspective.

As the world’s media documented the global financial crisis the IMF issued a report using less sensational language, but admitting the same recession. "The world economy is now entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s." The IMF also knew that the future is looking difficult: "The situation is exceptionally uncertain and subject to considerable downside risks."[1]

Recent headlines have been more succinct when they have proclaimed the ‘disaster’, ‘hurricane’, ‘tsunami’ or ‘tectonic shifts’ that capitalism faces. Markets are in ‘turmoil’, ‘meltdown’ or ‘mayhem’. A head of an equities trading firm described a "horrendous, cataclysmic end-of-the-world environment."[2] A broker said "Nothing will be like it was before" as "The world as we know it is going down." [3]Some drew back from announcing Armageddon, but the French Prime Minister said the world was at least on the edge of the abyss. ‘Abyss’ conjures up visions of the bottomless pit, primal chaos and catastrophe. For the religious, it can mean hell.

For once politicians and media were telling a sort of truth. They mostly don’t think that we’re going to have an exact replica of the Depression of the 1930s, but admit that capitalism’s crisis will not be limited to the finance sector, and will go on to have its impact on industry, trade, jobs and all our lives. It will, as they say in the US, go from Wall Street to Main Street.

It is the end of an era, but not in the way they say

There has been a lot of propaganda surrounding this latest lurch in the crisis. With the massive intervention of the state around the world the demise of ‘neoliberalism’ has been proclaimed by the Right and Left. Conservative Shadow Chancellor, George Osborne, thought "laissez faire is dead"[4]. The Socialist Workers Party celebrated the end of Reaganomics and Thatcherism as "free market capitalism has imploded and "history sweeps away a failed ideology"[5]. Francis Fukuyama (who once declared that history was dead) even thought that "the Reagan era should have ended some time ago"[6].

What these remarks have in common is an idea that somehow the state has played a lesser role during the last 30 years, only re-asserting itself in this time of crisis. In reality the economic crisis is a crisis of state capitalism, within which ‘neoliberalism’ was a particular ideology (supported by the Right and attacked by the Left with its own variety of state capitalist ideology). It was precisely because of the experience of the 1929 Crash that the already growing role of the state was accelerated. Official figures show that the US federal government was 3 percent of the economy in 1929, as opposed to 20 percent today - and that’s not even beginning to account for all the areas of control that the 50 individual states and state bodies like the Federal Reserve have throughout the economy.

This is one of the essential lessons from capitalism’s crisis over the last year. The bankruptcy of capitalism can’t be hidden. The state has had to come up with plans to rescue banks, insurance companies, currencies and money markets. It has not acted to help out the working class in any way whatsoever. Also, the extent of the debt that was holding back a ‘crash’ was only possible through the sustained intervention of the state and international economic bodies such as the World Bank and the IMF. With the massive injection of funds into the financial sector there will be even more likelihood of attacks on the living standards of the vast majority of the world’s population, in a lethal combination of recession, growing inflation and unemployment, and government cuts.

It is the end of an era because material reality has shown the degree to which the economic crisis can get out of control. It has also demonstrated that capitalism is utterly reliant on the state. Most of those who set themselves up as opponents of ‘neo-liberalism’ were supporters of the ‘protective’ powers of the state. It’s even clearer now that the state is there only to protect capitalism.

Watershed for capitalism

Lies are exposed by material reality. The so-called ‘celtic tiger’ of the Irish economy has, in the face of the storm, gone the same way as the rest. India’s ‘emerging’ economy is not in such great shakes either as many sectors are already being impacted by the extent of the crisis. With the development of a recession China will suffer a sever contraction of the markets where it hopes to sell its goods.

More importantly it shows that capitalism is a global system. There’s been a lot of talk about greedy bankers and the need for more regulation, but there’s a general admission that we’ve been witnessing something that is ‘systemic’, that is, it’s a crisis of a world system.

Billionaire financier George Soros, looking at the economic policies pursued in recent decades said in a television interview that "This whole enormous construct is built on false conceptions," adding "You can go a very long way. But in the end, reality rears its ugly head and that’s what happened now." [7] It rears its ugly head, and then reality bites.

Robert Zoellick the President of the World Bank[8] said that the crisis was a "man-made catastrophe" that would have real consequences for real people. He warned that "For the poor, the costs of the crisis could be lifelong," and for "The poorest and most vulnerable groups risk the most serious - and in some cases permanent damage". This is why he thought that "populations around the world will respond with anger and fear."

That is indeed the prospect that the latest stage in the crisis opens up. It should be compared with what happened after the fall of the Berlin Wall.

2007-08 in comparison to 1989-91

The wall came down in 1989. The countries of eastern Europe broke away from the USSR, which itself broke up into 15 parts in 1991. People like Fukuyama talked about the end of history, the end of communism, the end of the class struggle. What existed in eastern Europe was a particular stalinist form of state capitalism, and, history, as has unsurprisingly been revealed, had not come to an end. However, the working class was just a bystander while great events occurred, and the bourgeoisie conducted a whole campaign which put over the idea of a world in which there is no working class, just workers who are citizens like any others. This was one of the factors that led to disorientation in the working class throughout the 1990s.

But what about the crisis of 2007- 2008? How do Fukuyama and co respond to the bite of reality?

Fukuyama (in an article entitled "The Fall of America, Inc."[9]) admits that "The scale of the Wall Street crackup could scarcely be more gargantuan" and thought that "Washington failed to adequately regulate the financial sector and allowed it to do tremendous harm to the rest of the society." Accordingly "there is a growing consensus on the need to re-regulate many parts of the economy" and "The entire American public sector-underfunded, deprofessionalized and demoralized-needs to be rebuilt and be given a new sense of pride. There are certain jobs that only the government can fulfil." In the end he thinks that what was wrong with the centrally planned economies of eastern Europe was that they were "welfare states on steroids". For him "a certain vision of capitalism has collapsed" and all that the American model of capitalism has to do is "reinvent itself once again". So, after all that, all that was wrong with the economies of eastern Europe was the "steroids."

In the 1990s, with the collapse of the USSR, there were many in the West who behaved as though they had achieved a great victory, not only over the Russian bloc, but also over the working class. The crisis of 2007-08 shows the working class what that ‘victory of capitalism’ actually amounted to. It’s true that the economic crises of the past have not always led to mass strikes or revolution. The example of the 1930s is there for all to see. But today’s open crisis, in its depth and obviously global nature, is a material reality that it will surely not be possible to ignore, or to disguise.

There was no end of ‘history’, or end to the class struggle, as the ideologues of the 1990s claimed. But also, today, we are not witnessing the ‘end of capitalism’. Ruling classes across the world have looked into the abyss, seen catastrophe, and despite all manner of imperialist antagonisms, co-ordinated a response. There will be further massive attacks on the working class, continuing the offensive on wages, jobs, services, pensions etc. That’s the only perspective that capitalism has, and if there is no resistance to it, capitalism will drag humanity not only towards the abyss of poverty but towards outright self-destruction. The only alternative can come from the working class in its struggles. These are limited at present, but have been slowly developing over the last five years. In the period to come workers will feel even more intensely the effects of capitalism’s crisis, but, with some of the illusions from both Right and Left discredited, there is more possibility that not only workers’ struggles but workers’ consciousness of capitalism will grow. This will be at the basis of the mass strikes to come. Growing consciousness of the reality of capitalism also helps the understanding that it has to be overthrown by the revolution of the working class.  

[1] Financial Times 8/10/8

[2] Baltimore Sun 14/10/8

[3] Spiegel Online 10/10/8

[4] Daily Telegraph 13/10/8

[5] Socialist Worker 11/10/8

[6] Newsweek 13/10/8

[7] Daily Telegraph 13/10/8

[8] Daily Telegraph 13/10/8

[9] Newsweek 13/10/8

Impeachment kay Gloria, Repormismo sa Esensya

Oktubre 13, 2008 nagsampa ng panibagong impeachment case sa kongreso ang burges na oposisyon kasabwat ang Bayan Muna at mga kaalyado nito sa Kaliwa at repormista. Ang panibagong impeachment case ay pinangunahan ni Joey de Venecia, anak ni dating Speaker Jose de Venecia na dating kaalyado ng paksyong Arroyo.

Ano ang layunin ng impeachment?

Una, nais lamang ipako ng burges na oposisyon at Bayan Muna ang kamulatan ng masa na ang paksyong Arroyo lamang ang ugat ng kahirapan sa bansa.

Pangalawa, upang muling hikayatin ang taumbayan na muling magtiwala sa burges na kongreso. Natatakot ang buong uring kapitalista na dadami ang mawalan ng tiwala sa parliyamentarismong burges at hawakan ang landas ng rebolusyonaryong pakikibaka. Ang papel ng Kaliwa sa kongreso bilang oposisyon ang epektibong pamg-eengganyo ng burgesya para muling manumbalik ang tiwala ng manggagawa at maralita sa burges na demokrasya.

Katunayan, si Bayan Muna representative Satur Ocampo mismo ang nagsasabing malaki daw ang posibilidad na mas maraming mga kongresista ang makumbinsi ngayon sa mga “ebidensyang” inihapag nila. At kung hindi na naman daw magtagumpay ang impeachment ay “naipakita” ng Kaliwa sa taumbayan na may kumikilos pa rin para patalsikin si Gloria. Ganito ka baluktot mag-isip ang Bayan Muna!

Pangatlo, paghahanda ito ng burges na oposisyon at Kaliwa para sa kanilang alyansa sa eleksyon sa 2010. Ibig sabihin, hikayatin ang masang anakpawis na itransporma sa boto ang kanilang galit sa bulok na sistema.

Bagamat punung-puno ng radikalismo ang pananalita ng Kaliwa laluna ng mga maoista, namutiktik naman sa repormismo ang kanilang praktika. Hindi maitago ng “armadong pakikibaka” ng maoistang Kaliwa ang mabilis na nalalantad na pagtatanggol nito sa pambansang kapitalismo na ngayon ay binabayo ng matinding krisis.

Kung sasabihin naman ng Kaliwa na ang ginagawa nila (repormismo) ay isa lamang taktika para isulong ang “rebolusyon”, mabuti pang iumpog nila ang kanilang mga ulo sa pader!

Kahit pa magtagumpay ang impeachment at mapatalsik si GMA sa Malakanyang, si Bise-Presidente Noli de Castro, na isa ding bataan ng mga kapitalista lamang ang papalit.

Higit sa lahat, hindi ang isang paksyon ng naghaharing uri ang dahilan ng krisis kundi ang mismong sistema ng sahurang pang-aalipin. Ang LAHAT ng paksyon ng naghaharing uri (administrasyon at oposisyon) ay sagad-saring tagapagtanggol ng bulok na sistema. Ang buong kapitalistang estado mismo (anumang paksyon ang hahawak nito) ang tagapagtanggol ng sistema. Ang buong estado mismo at ang lahat ng mga institusyon nito (kongreso, senado, korte, hukbong sandatahan, at iba pa) ang kailangang durugin sa pamamagitan ng rebolusyon ng manggagawa at hindi ng gerilyang pakikidigma sa kanayunan.

The Sinking Ship of American Capitalism

For over a year now American capitalism has gone through a protracted economic malaise of proportions unseen since the Great Depression of 1929-35.  There isn’t a month that passes without a dramatic new event in the life of the system, from head-spinning gyrations in the stock markets, to the widespread failure of the most reputable financial institutions, yesterday’s symbols of capitalism’s alleged vitality.  And things have just gotten worse since the summer!

In recent weeks there has been an aggravation of the economic crisis that has shaken the confidence of even the most unrepentant cheerleaders of American capitalism. The official line of the White House has gone from a self-assured defense of the "good fundamentals" of an economy that’s just going through a momentary hiccup, to a hysterical call for "all hands on board" to shoulder the task of saving the sinking ship.

Without doubt the bourgeoisie is right to be concerned. What started as the infamous bursting of the housing bubble at the beginning of 2007, has become the greatest financial disaster in 70 years. The pile of failed institutions is growing by the day:  the investment banks Bear Stearns, Merrill Lynch and Lehman Brothers; the mortgage behemoths Freddie Mac and Fannie Mae; the world’s biggest insurance company, AIG; Washington Mutual, America’s largest savings and loan; and the commercial bank Wachovia — just to mention the more famous cases. The whole financial system is in shambles.  The air is filled with the poisonous odor of capitalism’s rotting body, and amidst this agony, we are being  given a window into the rarified world of high-stakes gambling that characterized the multi-trillion casino-like-economy centered around Wall Street.  

Yet even though the center of the storm is the US economy, its effects are rapidly extending throughout the world. In Central Europe, Russia, Japan, Asia…. everywhere, the financial system is going bust, forcing governments to scramble to the rescue, repeating the American experience, except for the specificities of the local details.  

Faced with a dramatically worsening situation, the "collective capitalist", the State, has done its best to manage the economic crisis.  But the balance-sheet so far is negative. The State has proved once again unable to stop the blood-letting. And the current so-called "comprehensive bail out" of the financial system at the staggering cost of 700 billion dollars could well go the same way as other measures put in place in the last year.

Behind the financial crisis, the economic crisis of capitalism

The whole bourgeois media is having a field day covering the financial crisis. Newspaper reporters, economic columnists, TV commentators and all kinds of economic "experts" are outdoing each other in their colorful description of the storm blasting the high temples of the American financial system.  The message is one of high alarm. The predominant view is that the financial system is on the brink of collapse, and credit - the lifeblood of the system - is drying up, endangering the well-being of everybody. In short, the turmoil on Wall Street, the financial system, is now menacing Main Street, the real economy. There is a lot of moral outrage expressed against the "excesses" and "greed" of the Wall Street crowd that recklessly brought this calamity to themselves and the rest of society. It’s almost comical, that this condemnation is coming from the same media that not long ago servilely celebrated the seemingly unstoppable record profit making of the high-flying Wall Street financial industry and the lavish life style of investment bankers, traders, hedge fund speculators, unscrupulous mortgage brokers and other parasitic so-called entrepreneurs.

What the media is not saying - and can’t say because its main function is the mystification of reality through conscious choice or self-delusion - is that the current financial crisis is clear and simple an expression of the economic crisis of capitalism, a chronic crisis that is rooted in capitalism’s own contradictions and for which the dominant class has no real solution to put forward. On the contrary each remedy put forward to manage the crisis in the end winds up aggravating the malady. This is expressed in the fact that what the economists called recessions are each worse that the preceding one, while the so-called recoveries are increasingly phony.

Four decades of economic crisis

The immediate chain of events behind the current financial crisis is very well known. The American bourgeoisie got out of the recession of 2001 just the same way that it had done before during previous recessions: through state capitalist policies of cheap credit and lax fiscal policies. And just as during other "recoveries," in time these policies feed the illusion of growth and finally end by creating the conditions for a new crash. Thus, the celebrated housing boom became the current housing bust, just as the Internet "revolution" ended in the dot.com bubble being popped in 2001.

This is the basic short story of how the American economy ended up where it is today:  with a financial system in total disarray, weighed down by an unstoppable wave of mortgage defaults, housing foreclosures, downward-spiraling real estate prices and mind-blowing gambling bets going bad.  The bourgeoisie has yet to recognize officially that its economy is in recession, but given the extent of the carnage, that hardly seems relevant.

The "basic short story," however, is a very poor reflection of reality. Actually, what gives the present financial crisis its historical proportions is the fact that it expresses the accumulation of decades of contradictions of a decadent economic system that has become in all senses a menace to the very survival of humanity. A permanent state of war and economic crisis, with a relentless worsening of standards of living, chronic unemployment, rampant inflation and growing insecurity for the working class and other non-exploiting sectors of the population -  this has been the history of capitalism for most of the last century. This is a system that has put humanity through two devastating World Wars and the Great Depression, a dreadful worldwide crisis to which the present turmoil is often being compared.

After the brief respite during the post-World War II period of reconstruction, the economic crisis came once again to the forefront, shattering the vision of unlimited, crisis-free prosperity put forward by the system’s acolytes based on the record setting economic growth of the post-war period in the central countries of capitalism.

The economic malaise that started at the end of the 1960’s exploded in a full blown worldwide economic crisis at the beginning of the 70’s and has since persisted like a slow growing terminal cancer at the center of the body of capitalism.

It is not an accident that the US economy is today, just as it was in the ‘70s at the center of the storm. In August 1971 Richard Nixon reneged on the U.S. commitments under the American-brokered 1943 Breton Woods System that had guaranteed the dollar convertibility to gold and that had given the post-war financial and commercial systems a semblance of stability.  This turnaround of the American bourgeoisie left the use of the dollar as a world currency without an economic rationale and has contributed greatly to the fragility of the world financial system showcased in today’s crisis. The world’s banks are awash with paper dollars. The currency reserves of most countries are held mostly in dollars. In fact there are, by far, more dollars circulating around the world that in the US economy. This insane situation is based on a simple collective delusion: that behind the dollar stands the so-called "full faith and credit" of the US government, which amounts to an overt overestimation of the U.S. creditworthiness.  If the present U.S. financial turmoil does not bring a reality check to the global financial system, then nothing will.

The lack of solvent demand relative to the needs of capitalistic accumulation – the root of the current open crisis of capitalism dating back to the end of the sixties – is illustrated by a twin feature of the life of capitalism in recent decades: the perversion of credit and the explosion of speculation.

Faced with a lack of solvent markets to absorb its production, capitalism has found the way to square the circle: give it away on credit.  Not an economically rational credit based on a reasonable expectancy of repayment of a debt with a profit — a normal capitalist practice and a powerful tool for the development of capitalism — but instead, credit as a way to keep the system artificially going to prevent its collapse under the weight of its historical crisis.  This is the reason behind the reckless explosion in recent decades of both individual debt (credit cards, auto loans, student loans, personal loans, mortgages) and corporate and public debt (which in many cases will never be repaid). After so many years of abuse of the credit-debt mechanism, it is not surprising that the financial system is now cracking up.

Furthermore, faced with a diminishing rate of profit in the process of production, capital has been turning the world over towards the sphere of speculation, creating a virtual casino economy where - on paper - fortunes are made and lost with the mere tapping of a computer keyboard in the comfortable rooms of traders, hedge fund managers and other investment specialists. All this without the bothersome creation and sale of commodities in the process of production and circulation that defines capitalism as a mode of production! Thanks to the collapse of the real estate bubble and the current financial turmoil, a rare window has been opened into the secret world of high stakes gambling on such immaterial things as the so-called "credit default swaps," and the now radioactive "mortgage securities."  It is no wonder that the global financial system is falling apart.  Sure, speculation has always been a component of capitalism, but the amount of capital involved in it today, its weight on the economy as a whole, the extent to which it has managed to permeate increasing layers of society — even the working class‘s future livelihood is being made dependent on pension fund investments on speculative schemes - is unprecedented and is itself a condemnation of capitalism as a viable mode of production for society.

The show must go on

Mr. Paulson, the US treasury secretary, and Mr. Bernanke, the Federal Reserve chairman, are the men of the hour, the media reporting their every word, change of mood and actions 24/7.  All this for free, while McCain and Obama have to pay millions to get their electoral message across - surely, the candidates can’t be happy about it!

Evidently, the men in charge of managing the economic crisis are very busy these days. But the real question is what has the State accomplished and what can be expected from the policies so far being put forward?

The first thing to note about the bourgeoisie’s response to the early signs that the housing boom was over in 2007, was, judging by its actions, that it was a total underestimation of the gravity of situation that was going to unfold. Following the beginning of the housing bust and the financial system turmoil during 2007, the Federal Reserve responded with its conventional policies of monetary manipulation, sharply reducing in record time the Fed interest fund rate to lower the cost of credit and pumping in tons of money directly into the financial system, trying to shore up the deteriorating finances of banks and other financial institutions. For their part the White House and Congress also made use of their traditional fiscal tools in the management of the crisis.  At the beginning of 2008, they passed a so-called "stimulus package" composed of tax rebates for consumers, tax breaks for businesses and other measures directed at reviving the slumping housing market. These measures were supposed to avert a recession. As the somewhat upbeat economic forecast of Bernanke in mid-February put it, "My baseline outlook involves a period of sluggish growth, followed by somewhat stronger pace of growth starting later this year as the effects of (Fed) and fiscal stimulus begin to be felt" (USA Today, February 15, 2008).  

A few days later, the collapse of Bear Stearns, the fifth biggest investment bank in the country, would raise the stakes and foretell the current financial tsunami blasting the American and global financial system, which has already totally changed Wall Street financial landscape.

According to public declarations emanating from all corners of the State, the bourgeoisie is now truly worried about the dangers posed to its system by the present situation and has decided to bring in the big State guns to fix the situation. This is the sense of the so-called 700 billion dollar, "comprehensive" bailout program that the dominant class has finally agreed upon.

It remains to be seen what effects this new program will have in the bourgeoisie’s attempts to manage the crisis of its system.  Nonetheless, clearly, this program is an attempt to make the working class - both current and future generations - pay for the financial debacle.

On the other hand, this bailout, which in essence will be financed in the short term by public debt, could easily backfire, fueling inflation and further economic turmoil.

Finally, there is one more important thing to underline in relation to the bourgeoisie’s policies of the last year:  on the one hand they make clear the purely ideological character of the so-called American "free market" economy, and on the other, they overtly demonstrate the dominant role of the State in the economy - what revolutionaries have long characterized as state capitalism.

And the working class?!

Faced with the deepening economic crisis, the bourgeois media’s message to society is that "we are all in this together". Yes, it argues, some CEO’s are guilty of excess and greed, but we ALL are more or less responsible for the financial mess. "Everyone" took advantage of the good old days of easy and cheap credit of the debt functioning economy and we all have to line up in a common effort behind the State efforts to save the economy. This is nonsense. The working class has no say on how the bourgeoisie runs its decaying system. The fact is that the condition of the working class has known no improvements over the last four decades of bourgeois gimmicks aimed at keeping its economic system afloat. Unless they want to consider all matter of suffocating debts -credit cards, auto loans, student loans, sky-high mortgages, etc. - a change for the better that workers are obliged to incur in order to partake of the increasingly elusive "American dream".

Politicians, in particular those belonging to left wing, want workers to believe that they are concerned about the suffering of the working class. Both the bourgeois left and right want us to believe that the answer to rising unemployment, eroding salaries, the sorry state of the health care system and deteriorating pensions lie in the ballot box, that all is needed is the right president or congressman.  However the reality is that the bourgeoisie has no solution to the crisis of its system and no future to offer society other than an increasingly devastating crisis and murderous imperialist wars.

The hard reality is that workers have been paying for years for the crisis of capitalism. And today face with a barrage of attacks from all directions they have no choice but to oppose capitalism’s assault on their working and living conditions on their own terrain, the terrain of the class struggle - fighting against the logic of capitalist exploitation. Against capitalism’s future of crisis and war, the working class must put forward its own perspective of a society based on human needs.

Eduardo Smith, Oct. 3, 2008.

Economic crisis opens the door to massive struggle

As banks get nationalised, as the Federal Reserve and other central banks leap in to prop up the money markets, and the US Congress argues over the $700bn banking rescue plan, workers know that no one’s going to bail them out. On the contrary. It’s clear that on top of the existing wages that are falling behind inflation, the attempts to crank up productivity that are already in place, and jobs that have already gone, the current financial crisis will rapidly have an impact on the working and living conditions of millions who haven’t already been directly hit by the collapse of banks and other financial institutions.

The material conditions experienced by workers are the basis for the development of their struggles. The crisis of capitalism leads to attacks on the working class that in turn can lead to a militant response. How far workers’ struggles go, how combative they become, what sense they have of their own potential cannot be tied down in a scientific formula. The deepening of the crisis, x, doesn’t necessarily become y amount of struggle or z amount of consciousness.

However, it is right to ask whether the working class is today showing signs that it could be up to the challenges of the current crisis, or whether it has been disarmed by the whole brutal experience of exploitation, and succumbed to ideologies which have left it passive in the face of the worsening situation it finds itself in.

In contrast to the 1930s the working class is not defeated

In the aftermath of the 1929 Wall Street Crash, the Depression is recognised as a time of great economic suffering. A characteristic image from Britain in the 1930s is of the weary hunger march from Jarrow, or, from the US, the queues at soup kitchens in the richest country in the world. This was only part of the reality, as there were many expressions in this period of militant class struggle. In France there were waves of strikes and occupations from 1934-38 that were ultimately derailed by the illusions workers had in the Popular Front. In the US there were major struggles from 1935-37, finally undermined by workers’ misplaced confidence in the new industrial unions. In Spain in 1936, the workers’ first response to Franco’s coup took on a semi-insurrectionary nature. But here again the Popular Front dragged workers away from their own ground into the battle between democracy and fascism, prefiguring the mobilisation of the world working class for the second imperialist carnage. In short, this was a period of profound defeat for the working class.

It was a different situation at the end of the 1960s, where a less serious expression of the economic crisis set off first the struggles in France in 68, the ‘hot autumn’ in Italy 69, and the demonstrations and strikes in Poland in 1970. These were followed by waves of struggles over two decades, in which the working class in countries across the world returned to the struggle, often on a massive level.

While it’s now easy to see the limitations of the struggles of the 70s and 80s, it shouldn’t be forgotten that the ruling class was not a passive onlooker. The ruling bourgeoisie adopted particular political strategies against the threat of the class struggle. Typically, in the 1970s left parties came to power, using the language of reform or even socialism, able to get the working class to accept wage levels and unemployment that would have been unacceptable from the conservative parties of the right. In the 1980s, with governments privatising and cutting jobs and services, there was a massive response from the working class; in this context left parties (along with unions and the leftists) posed as the opposition to the status quo, advocates of a so-called ‘alternative’.

In the 1990s, in the wake of the collapse of the eastern bloc and the huge campaigns about the ‘death of communism’ and the ‘end of the class struggle’, there was a definite disorientation within the working class and a low level of militancy, but since 2003 there has been a slow but definite renewal of workers’ struggles, with a number of positive characteristics.

Loss of illusions and revival of solidarity

Changes in material reality can have a significant effect on workers’ understanding of the world and their place in it. Even the blind can recognise objects when they bump into them. In the current state of the economic crisis it is clear that our masters have very little control of their own affairs and have to resort to the further intervention of the state to cope with a crisis of state capitalism. The idea that capitalism doesn’t suffer from crises that are intrinsic and insoluble can surely now only convince those who have an interest in its continuation. In addition, the worldwide nature of the crisis, revealing yet again the interlinked nature of all economies, is another reminder that there can be no national solutions to the problems presented by global capitalism.

In recent struggles the illusions that workers have in the possibilities of sustainable reforms, or in the real role of the unions, or in left-wing governments, have been challenged. Indeed because of the lack of credibility of the left parties (and their leftist satellites) there have been attempts recently to create new, or re-launch old, left parties in Germany, Italy and France, among other countries.

As for the content of the class struggle, we have seen a number of struggles where solidarity has been shown in practice. Not on a massive scale, but significant enough to demonstrate one of the most important aspects of the working class in struggle, and as the basis for a future society. Some academics (and other ideologists) maintain that the working class has changed so much with the development of technology and the transformation of heavy industry that the marxist view of the working class is a relic of the 19th century. Expressions of solidarity among the ‘new’ working class show that such ideas are just wishful thinking from the ruling class.

Furthermore, the expansion of migration patterns across the world means that in nearly every country there is greater diversity in the working class, and correspondingly, a greater capacity for internationalism and unity across potential divisions. The fact that the bourgeoisie is everywhere trying to sustain racist and anti-migrant campaigns in order to sow divisions in the ranks of the working class shows what a threat working class unity is to capitalism.

Evidence from across the world

During the last five years there have been examples of workers’ struggles that have shown significant differences to the past. For instance, we have seen various struggles in a country as important as Germany, which was much less affected by workers’ militancy in the 1970s.

In a country like Iraq, where we can see the profound effects of war, both past and present, we can still see the struggle of the working class. Recently, in response to an attempt by the Iraqi government to cut public sector wages by 30% (that is, to reverse a wage rise from earlier in the year) there was a wave of strikes, demonstrations, protests and sit-ins. The wage rise has been reinstated, the government will no doubt rapidly return to the attack, but workers have gained a sense of what it is like to fight for class interests, not national or religious interests.

In Iran, supposedly under the rigid domination of fundamentalist clerics, there have been demonstrations over labour laws as well as strikes involving thousands of workers angry at the non-payment of wages for many months.

Across Egypt there have been successive waves of strikes during the last two years, involving thousands of workers. In Vietnam, a country that is in no way isolated from the impact of the economic crisis, there is high and still growing inflation that has led to dozens of wildcat strikes. There have also been massive strikes in Bangladesh and Argentina, and a nationwide general strike in South Africa in August.

As for the latest ‘economic miracles’, India and China, neither has been immune from the crisis or the class struggle. In China, with tens of thousands of enterprises going bust and 20 million people laid off, it is not surprising that there have been massive workers’ demonstrations that wouldn’t have happened ten years ago, and wildcat strikes involving many thousands of workers happening just about every day. In India, in September, there was a strike affecting a number of states, which the unions claimed involved 80 million workers. Industry, banks, insurance, coal, power, steel, tea, telecoms and IT were all affected. Subsequently, there was a two day strike of 900,000 workers in 26 government-run banks that closed about 60,000 branches; and at the time of writing tens of thousands of workers employed by the ‘Bollywood’ film industry are on strike against low wages or not being paid at all.

Change through struggle

A working class that can’t defend itself can’t make a revolution. But the question still stands: can the working class go beyond the defensive struggles of today?

In practice, as the working class struggles it begins to change. It becomes more aware of the possibilities of the struggle, the nature of the obstacles that will be encountered and the lies that it has been told. Consciousness develops through the gradual escape from the weight of bourgeois ideology at the same time as the development of workers’ self-organisation and the sense of unity and solidarity. The response of the working class is not just to immediate attacks but to a whole history of them. The difference between ‘economic’ and ‘political’ struggles diminishes; ‘defensive’ struggles announce the start of struggles where workers take the initiative.

But in this whole process of the development of the working class through the experience of its struggles there is still one enormous hurdle to get over. The more workers reflect on the implications of their situation, the more they will be drawn to the conclusion that capitalism has to be overthrown. That means a revolution. It is understandable that workers should be hesitant when the immensity of what lies before them becomes clear.

The current phase of the economic crisis will lead to the further development of the class struggle. When the working class begins to realise where that struggle is leading, it will be vital that it understands that it is not only the sole force that can free itself from capitalist exploitation, but also the only force that offers a future to humanity. Revolutionaries will play an important role in the development of this consciousness. Hesitation is understandable, but the working class is transformed by its struggle, so that future movements will be undertaken by a class that has gained from its struggles and in reflecting on them.  

Car 1/10/8