A system in crisis

Capitalist chaos – class struggle sharpens

CWI - a socialist analysis


Below, we publish a document on world and European perspectives which will be proposed by the CWI’s International Secretariat to a meeting of the International Executive Committee of the CWI in January. Following discussion and amendments at the meeting, the final version of the document will be published on socialistworld.net at the end of January

A world in turmoil
1. Since the last World Congress, just over a year ago, the world has been in almost continuous turmoil. We have witnessed the Middle Eastern and North African revolutions, which still endure, as the bloody conflicts in Cairo and elsewhere in late November indicate. This in turn has been followed by the elections in Egypt. In the first stages of the Egyptian parliamentary elections the Islamic parties appear to have won two thirds of the vote. The Muslim Brotherhood’s Freedom and Justice party got 36.6%, according to preliminary results. However, the ultra-conservative fundamentalist al-Nour party, with its doctrine of Salafism gained nearly one quarter of the vote in areas which encompass nine of Egypt’s 27 provinces, including the main urban centres of Cairo and Alexandria. On the other hand, parties supporting the regime of Mubarak received only 3% of the vote! By the time of the IEC, the elections will have been completed and we will have a better picture of what this signifies.

2. The CWI predicted in broad outline, particularly for Egypt, in the documents adopted at our congress, the revolutionary upheavals which have unfolded in the region (we will comment further on the developments below). This has to be taken together with the revolutionary convulsions in Greece as well as the mass strikes and protests in Spain and Portugal. New social explosions impend in Italy, Ireland, Britain and elsewhere. Even the seemingly ‘strongest’ or up to now the ‘least affected’ European countries will not be immune from the radical if not revolutionary virus emanating from the so-called ‘periphery’ of southern Europe. The US has also seen the sizeable ‘Occupy’ movement which has affected and drawn in sections of the trade unions.

3. The continuation of the deep crisis of world and European capitalism has provided the impulse for these events. This crisis has been enormously compounded by the ‘sovereign debt’ turmoil. This in turn opens up the likelihood in Europe of national defaults and the collapse of the euro with all the grave consequences for European and world capitalism flowing from this. The crisis has already led directly to the demise or overthrow of a number of governments and prime ministers: in the last year alone, the execrable Berlusconi in Italy, Papandreou in Greece, Zapatero in Spain, Socrates in Portugal and Cowen in southern Ireland have all been swept from power.

4. This was preceded by the overthrow of Ben Ali in Tunisia, Mubarak in Egypt, Gaddafi in Libya, and followed by Saleh in Yemen. Nor have the mass movements and revolutions in the Middle East and North Africa finished their work; other governments in the region are likely to be toppled in the next period. Europe can also expect further convulsions which will lead to the early demise of current governments and the possible eviction from office through elections of Sarkozy in France, which could be paralleled with the breakup of the ConDem coalition in Britain and early elections, leading to its defeat. It is not just the desperate economic situation afflicting the whole of Europe that could shipwreck the Cameron government. The EU crisis could trigger referenda in a number of European countries. Although Britain has opted out of the new ‘treaty’, it is not excluded that the Tory party could split on this issue.

5. Ireland also could face a very important referendum on this issue. An opinion poll in October showed that 47% of the Irish electorate would vote against the proposal to amend the Lisbon Treaty with just 28% saying they would vote for it. In Britain, there would also likely be a ‘No’ vote in the event of a referendum and this could be repeated in some other countries within the EU, if the different governments actually allow a vote on proposed treaty amendments. In such a situation, we would be compelled to support the ‘No’ campaign, as we did in Ireland, particularly as the Lisbon Treaty and the EU in general are perceived much more so than in the past as austerity mechanisms to savagely attack the living standards of the working class. This question has already been posed in the British labour movement. The RMT rail union wishes us to be heavily involved in a ‘No’ campaign. The England and Wales organisation of the CWI considers that it will be necessary to be involved. However, we must seek to give it a clear anti-nationalist profile, standing for socialist measures whether inside or outside the EU. We will probably have to produce special material on this issue.

The ‘Occupy’ movements
6. At the same time, the ideological cement underpinning capitalism has been severely undermined. Not only does capitalism confront its biggest economic crisis ‘ever’ (according to Mervyn King, Governor of the Bank of England), in its wake it has also faced a profound crisis of legitimacy. This is reflected in the mass strikes of the working class but also in the worldwide ‘Occupy’ movement which spread to about 1,000 cities and all continents.

7. Despite its weaknesses – it is not firmly based either ideologically or with deep roots and a presence in the organisations of the working class – it has nevertheless evoked widespread public sympathy including from the working class and the labour movement. This movement, unlike the antiglobalisation movement at the turn of the century, takes place against the background of a deep recession. Most active support, however, in most countries emanates from the increasingly alienated young people, many if not the majority from the middle strata of society. However, the highlighting of searing inequality against the background of mass impoverishment synonymous with ‘modern’ capitalism has evoked a powerful echo among broad sections of the population in Europe and the US. An additional factor is that in this crisis it is not just the working class but also big sections of the middle class that have been affected – some of them quite severely. In the US, for instance, average wages of manual workers– still referred to as ‘middle class’ by the capitalist media as a means of blunting growing class consciousness – are at the level of the 1950s in real terms; the religion of everlasting capitalist progress has been shattered. The unrestrained piling up of wealth by the ‘1%’ – perhaps the greatest concentration and centralisation of capital in history, foreseen by Marx – has fuelled the protests. There have been many symbols of this in the past period but perhaps the most striking example is that of Bloomberg, the present mayor of New York, the 30th richest individual in the world – literally one in 230 million – who through his police sought to repress the ‘Occupy’ movement in ‘his’ city. The images of this were beamed around the world as was the indiscriminate use of pepper sprays against crowds in Seattle, one of those affected being an 80-year-old protester.

8. This comes after the earlier attacks on students in Britain, followed by punitive punishment, including draconian prison sentences, for the young people caught up in the protests at the end of 2010 because of the destruction of their future, which the massively increased university tuition fees and the withdrawal of grants for the 16 to 18-year-old mean. This, however, did not prevent the riots in London in late summer 2011. This bore out completely our contention that unless the labour movement provided an organised resistance to the savage cuts in public spending of the Tory-Liberal Democrat government on welfare, planned poverty, then an inchoate movement of despair would erupt from below. The government attempted to explain the riots in terms of the ‘criminality’ of those involved. This was entirely disproved by later reports which showed that most of those involved were poor, economically and culturally deprived, etc. On the other hand, others, like the SWP, sought to prettify the movement as ‘positive’, a genuine conscious uprising of the oppressed! This is equally wrong and moreover is potentially dangerous for the working-class movement.

9. Already alienated youth attracted towards anarchism – as Greece shows – have indiscriminately and provocatively attacked the police, which in turn has provided an excuse for the state to use repressive measures against workers involved in strikes and protests. Rightly, our comrades in Greece have criticised and separated themselves from such actions. These methods, particularly on the basis of defeats and setbacks, can lead to a section of disappointed youth, not all of them of petty bourgeois origin, resorting to the methods of terrorism. In one of the demonstrations in Greece, it was the workers themselves – members of the Communist Party (KKE) – who were subjected to physical attacks. Such methods are totally alien to genuine Marxism. Even if these young people and workers are genuine in the belief that such methods can undermine and eventually overthrow capitalism, it is the duty of Marxism to counter this mistaken approach. Reaction can only gain if these methods persist, both in providing an excuse to the state to use repression but also, at this stage in particular, alienating sections of the middle-class and even workers who are maybe joining the struggle for the first time. It is therefore necessary to educate the new generation in combating anarchistic methods which can lead into a blind alley for the workers’ movement. We need to point out in particular that, historically, it was not those who started out with bombings and terroristic methods which led to overthrow of the tsarist regime and landlordism but the Bolsheviks, basing themselves upon the working class with the methods of mass struggle, the general strike, independent committees – soviets –and workers’ and peasants’ power.

10. The serious, more farsighted bourgeois have shifted their original position from outright hostility to the ‘Occupy’ movement into seeking to co-opt it, to ‘assimilate’ it. They are attempting to lean on the ‘leaders’ or ‘non-political’ spokespeople of this movement to lay the basis for cutting down some of the more glaring blemishes of capitalism with a ‘Tobin’, or ‘Robin Hood’, tax on financial transactions. And, given the alarm at the top of capitalism at the turn of events, it is not excluded that some measures of a cosmetic character could be undertaken against the banks, for instance, and even the ‘rich’. The panic in bourgeois circles in general was summed up by the right-wing founder of the Independent newspaper in Britain, Andreas Whittam-Smith, who wrote recently: "Western nations are now ripe for revolution." The purpose of Whittam-Smith and the bourgeoisie for whom he speaks is not to prepare to commit suicide or depart from the scene of history but to use these movements as a lever to save if possible and renovate the capitalist system. Moreover, the lack of a clear alternative from most of the leaders is assisting them in this task.

11. The ‘Occupy’ movement is the widest global movement since the collapse of Stalinism. It encompasses more of the world and is deeper than the anti-globalisation movement of the turn of the 21st century. Although it is ‘anti-capitalist’ in essence, the ‘Occupy’ movement does not seriously challenge capitalism; many of its leaders do not propose ‘system change’ but seek to ‘mend a broken system’. Incredibly, some on the left, even including Trotskyists like the USFI (in Spain, for instance), have sought to reinforce the ‘non-political’ posture, which on the part of the youth who participate represents the rejection of pro-capitalist ‘politics’ and the big parties which reflect them.

12. Never before in history has it been more necessary to stress the need for organisation, for a mass workers’ party, as a vital step in the development of class consciousness; ground won in the past has to be reconquered again and again. To some extent because of the turning back of the wheel of history, we face some of the tasks of Lenin – set out in his pamphlet ‘What is to be Done’ – on the need for a party to combat false ideas, in his case those of the ‘Economists’, of so-called ‘spontaneity’, opposition to ‘politics’, etc. Of course, we face an entirely different period. We are not starting with a blank sheet. There is the accumulated experience of the working class and the formation of parties. But we still have to reckon with the deep scepticism – a product of the betrayal of the ex-social-democratic parties and Stalinism – which affects the new generation, and leads them to the dead end of ‘anti-politics’. This was indicated clearly in the recent elections in Spain: ‘They don’t represent us’, ‘they are all the same’; ‘the polls are in the safe custody of the European Central Bank’. Moreover, spoiled ballots, abstentions and blank votes were 11 million, more than voted for the right-wing victors, the Partido Popular.

13. This movement, which at one stage assumed mass proportions in some countries – Spain, Greece and, to some extent, in the US – represents a necessary stage of a confused but important political reawakening. This was inevitable given more than 30 years when the ideas and influence of neoliberal capitalism dominated and were enormously reinforced by the ideological offensive of the bourgeois in the period after the collapse of Stalinism. These movements hold out the hope, for those participating and those observing them, of drawing revolutionary conclusions. The precondition for this, however, is the intervention of the labour movement and in particular Marxism, which, while being sympathetic and sensitive, argues against the ‘non-political’, anti-party stance of many who have been drawn into this movement.

14. At the same time we have never had a fetish about organisation and a party. Of course, a mass party will be necessary for the working class to conquer and hold power. However, the way in which this will be constructed – which will vary according to the concrete circumstances in each country – has to be worked out in the course of events and through the experience of the working class itself. Parties, particularly of a mass character, in this explosive era may not be constructed in a linear fashion, step-by-step, like mass parties were built in the period before the First World War. Such is the severity of the present crisis – reinforced by the message from bourgeois leaders that the working class faces ‘endless austerity’– that one can perceive of a situation where this could lead to a mass uprising, which could result in the masses being compelled to move in the direction of power. After all, this is what happened in Spain following the uprising in July 1936 and also in Portugal after the failed Spinola coup of March 1975, when the banks were expropriated and most of industry was put in state hands. In these situations, the question of the rapid building of a mass party was posed – and moreover was possible – if there had been a subjective factor not necessarily of millions but of thousands or tens of thousands of cadres who were politically and theoretically armed to intervene in the situation. This is in no way to make concessions to anti-party or anti-organisation moods that exist. On the contrary, it poses sharply the vital necessity of the building of an organisation, of a revolutionary pole of attraction, which is capable of intervening in the situation and building a powerful force of the working class, particularly to consolidate power as the working class moves towards revolution in real pre-revolutionary situations. Merely to pose this question at this stage indicates the political sharpness which is required by us in this period.

The general strike
15. The general strike has come back forcefully onto the agenda of the workers’ movement, particularly in southern Europe. In Greece – with seven general strikes in 2011 alone, including one-48-hour strike and not including public-sector strikes! – in Spain, Portugal, Italy and in recent years, in France, one-day general strikes and partial ‘general strikes’ have featured. But Northern Europe will catch up, as shown by the one-day public sector strike in Britain in November. This was a colossal and effective strike, involving at least one and a half million workers, the biggest in absolute numbers since the 1926 general strike, and was a landmark in the history of the workers’ movement. The Belgian trade union leaders tried to sidestep calls for a general strike by organising the 2 December 80,000-strong daytime demonstration in Brussels, but support for general strike action is growing, especially in Wallonia in struggle against the planned partial closure of the ArcelorMittal steel plant in Liège where, significantly, the trade unions are officially calling for the company’s nationalisation.

16. General strikes implicitly pose the question of power before the working class and the labour movement. However, it is not posed in this way at this stage in the political outlook of the working class. The reasons for this we have sketched out in previous material: the legacy of the collapse of Stalinism in the form of pro-capitalist ideology and a consequent political immaturity of the working class, as well as the opportunism of the trade union leaders who are afraid of going outside the limits of capitalism. Not least of the factors holding back the working class from drawing all the necessary conclusions from the current situation is the weakness of the alternative revolutionary pole of attraction. Therefore, general strikes which represent a high point in working-class struggle take the form, at this stage, more of mass protests than serious preparation to take power out of the hands of capitalism which is ruining industry and society, in the process dragging the working class into an economic and social abyss. However as the working class is hardened through struggle with the creation of a new generation of fighters and particularly cadres, this will change and new general strikes which do raise the alternative of a new society of workers’ power and socialism will be posed in workers’ minds.

17. Moreover the struggle will take different forms at different stages. In Greece for instance the number of one-day general strikes that have taken place is incredible; in fact it is unprecedented. This was followed by the 48-hour general strike and our Greek organisation was the first to raise and popularise this slogan. In this sense, the Greek workers have outdone the Argentinian workers who had a similar struggle to theirs at the turn of the century. It is not just the working class but broader layers, including sections of the middle class, which are being drawn into the strikes, which have therefore assumed some of the characteristics of the ‘hartals’ of India and Sri Lanka with the towns and countryside, virtually the whole population, participating in such action. At the same time when the masses are checked in one field – in this case the industrial plane – they turn to the alternative, the electoral field. While industrial and social struggles will continue in the next period, it is likely that the masses will now turn in this direction with promised elections in early 2012. This will require our Greek comrades to raise the alternative of a workers’ government to the right-wing alternatives of Pasok and New Democracy. The precise expression of this in terms of parties to support has to be worked out in discussion.

The revolutions in the Middle East and North Africa
18. The revolutions in the Middle East and North Africa are, with the events in Greece, the most important developments for the workers’ movement in the past year. Tunisia and particularly Egypt, the world’s oldest nation state, have exercised a magnetic effect on the masses throughout the region. They also resonate powerfully in the neo-colonial world and in the advanced industrial countries as well. For instance, in the USA they helped inspire the Wisconsin protests and the Egyptian flag flew over the ‘Occupy’ movement in Oakland and elsewhere. However, as in all revolutions, particularly in the period after the overthrow of a dictatorship, illusions are generated in the masses that the main job has been completed. In reality, because the revolution has not been completed, right from its outset the forces of revolution and counter-revolution have vied for supremacy. The liberal bourgeoisie and the Islamists have tried to contain the revolution, together with the remnants of the old regime. They seek to engender a mood of class conciliation, of ‘national unity’. They instinctively oppose all attempts to organise independent action or organisations of the working class. Moreover, amongst the masses, who seek the line of least resistance in the first instance, this mood can also exist. Even where there is a strong revolutionary party that seeks to warn the working class and counter this from the outset, as with the Bolsheviks in 1917, this mood can exist for a period, allowing the establishment of class collaborationist, coalition governments. It takes time and events, together with the intervention of the revolutionary forces, to change this. In the case of Egypt there was no mass force in the underground which could perform this job.

19. In the vacuum that existed, as with other cases in history – Poland under Stalinism, in Iran under the Shah – religious forces, with roots amongst the masses, can initially provide a force, a pole of attraction, around which the opposition to dictatorial regimes can mobilise. This role in Egypt has been played by the Islamist Muslim Brotherhood and the mosques. They were persecuted, which enhanced their attractiveness to the exploited workers and peasants, as were the network of charities, enterprises, etc, which they built under Mubarak and, previous to him, Sadat. Consequently, they were well placed to exploit the current elections in which they have received an estimated 36.6% of the votes counted so far. In addition to this, the more fundamentalist expression of right-wing political Islam, the Salafists around al-Nour, linked to the more fundamentalist Wahhabi brand of Islam emanating from Saudi Arabia and the doctrine of Al Qaeda, seems to have done well with almost a quarter of the votes in the cities that had voted by 5 December and probably could register more than this in the countryside.

20. If they are allowed to form a government then the Brotherhood will come under serious examination. They are, in any case, a more conservative force than in the past. They abandoned the struggle to overthrow the dictatorship, concentrating on providing the organisation to feed the poverty-stricken masses. They initially stood aside from the revolution which caused splits, particularly amongst the youth within their ranks. Unlike the Iranian revolution, when radical Islamic forces initially developed, the Brotherhood is politically conservative, accepting the free market, not favouring independent trade unions and rejecting ‘extremist’ brands of Islam in favour of the Turkish model of Erdoğan, even borrowing the name of Turkey’s ruling ‘Freedom and Justice’ party. This party was described by the New York Times as a “religious right of centre movement but no fanatical band”. This is also the favoured model for the ‘moderate’ Islamist forces throughout the region, including Ennahda, the party in Tunisia which emerged victorious in the recent elections there. However, the military council, SCAF, has no intention of ceding complete power to the ‘civilian’ forces. Another ‘model’ is Pakistan, where the army and the generals are the real ‘power behind the throne’ – the government and Parliament – and have been and remain so since the foundation of the Pakistani state.

21. There were big illusions in the military at the time of the overthrow of Mubarak – ‘the Army is with us’. And at its base and even amongst a significant section of the middle layers of officers, that was the case. However, the top generals, we warned at the time, were and remain an integral part of the ancien regime. In fact, we commented at the time that, in effect, the military carried out a ‘soft coup’ in overthrowing Mubarak in collusion with the CIA and American imperialism. They were terrified that the revolution under way – and it was and remains a revolution – was deepening and would not stop at the removal of Mubarak but would go further towards a social and economic revolution. The Egyptian revolution – the country contains one third of all Arabs – was above all a mass event, in which the working class, particularly in Suez, Port Said and elsewhere played a crucial role.

22. Once the masses have thrown off the shackles of a dictatorship, they inevitably come forward with pressing social and economic demands. There has been a wave of workers’ actions – attempts to establish independent trade unions – which had been effectively banned by the military, demanding that those culpable in the killing of the protesters at the time of the overthrow of Mubarak, as well as those who perpetrated the massacres in November, be brought to trial.. So great has been the disillusionment since the events of February that a questioning has arisen as to whether it was a real revolution in the first place. In fact, in both Tunisia and in Egypt the masses moved independently or semi-independently against the dictatorships of Ben Ali and Mubarak. They made the revolution but because of insufficient consciousness of their own power and a programme to achieve this they did not complete the revolution in a social and economic sense.

23. Revolutions, as Karl Marx pointed out, are the locomotives of history while counter-revolutions – dictatorships – are an enormous brake, throwing back consciousness enormously. Both in Tunisia and Egypt what we saw was in fact a political revolution which changed the main actors on the stage but did not touch the social foundations of Egyptian landlordism and capitalism. The generals have an estimated 40% stake in vital aspects of the economy. Moreover, US imperialism has donated an estimated $150 million to promote the “transition to democracy.” And the army still gets $1.3 billion a year from the US. The army in all capitalist states is the main guard of private property. Increasingly aware of the real situation, some of the participants in the February uprising now say that all that has been achieved is ‘a change of curtains’. That is true of the state but not of the consciousness of the mass of the people, particularly the youth and workers who participated in the revolution. And the masses have begun to pour onto the industrial, social and political stages. There is now talk, correctly, of the need for a second and third revolution. For this to happen, what is required is the building of powerful and independent workers’ organisations, both on the industrial and political stages.

24. Imperialism and its client states in the region were completely taken aback by the outbreak of revolution. Obama and the representatives of the strongest power on the planet were powerless to intervene, reduced to utterly pious regretful phrases about the role of US imperialism in propping up Mubarak. Sarkozy and Cameron were equally impotent. In Egypt and Tunisia, where the urban masses played the key role, military intervention was ruled out. US imperialism, that still views the region as of key strategic and economic importance, was in any case completely tied down in Iraq and Afghanistan, and therefore could not intervene militarily particularly using ground troops, even if that was possible. The same applied to its NATO allies.

25. Only with events in Libya, and to some extent in Bahrain, was imperialism given the pretext to establish a foothold against the revolutions. Our analysis of the uprisings in Libya, of NATO’s intervention and the subsequent outcome of the 9 or 10 months struggle has stood the test of events. We supported the uprisings against Gaddafi in Benghazi and other towns in Libya. At the outset they represented a genuine movement of the masses in opposition to the dictatorship. The committees established to administer Benghazi after the expulsion of Gaddafi and his henchmen, including the now imprisoned son of Gaddafi, Saif, appeared to be in the hands of genuine representatives of the masses and have a mass popular base. At this stage, the Benghazi masses were opposed to outside intervention by imperialism. However, the mobilisation of Gaddafi’s troops on the outskirts of Benghazi and the consequent fear of a massacre allowed imperialism the excuse to intervene militarily through NATO. The subsequent course of the war – orchestrated and controlled both in the air and on the ground by NATO – altered completely the character of the ‘revolution’. The CWI has always opposed the Gaddafi regime and has called for support for genuine mass movements to establish a real socialist, democratic society in Libya.

26. However, the war conducted against Gaddafi possessed all the features of a de facto military imperialist intervention. It is impossible for Marxists to give support to such an action. And yet, to their eternal shame, this is what some alleged Marxists did! The propaganda campaign against Gaddafi included manufactured hysteria and gross exaggeration of what would happen if Gaddafi’s forces were to occupy Libyan cities held by the ‘rebels’. It was claimed that massacres would automatically follow. No such things happened when Gaddafi’s forces fought the rebels for Misrata and other cities on the way to Benghazi. However, this was used to carry through real massacres on the part of the ‘rebels’ when they entered cities that were allegedly in support of Gaddafi and through the air war of NATO. It is impossible to calculate the exact number of victims arising from this but probably between 30,000 and 50,000 people were killed. It is not possible to describe the outcome as a victory for ‘revolution’.

27. What transpired in Libya in the beginning was a genuine revolution of an incipient character which was derailed by a counter-revolution in a ‘democratic’ form. However, as the scale of bloodletting and reprisals – sometimes against completely innocent people including black-skinned Libyans and foreign workers, some of whom had lived in Libya for many years – has been revealed there is profound questioning as to whether ‘democracy’ or counter-revolution currently dominates. In fact, the post-Gaddafi Libya is clearly a new fiefdom for imperialism to exploit its rich resources, particularly its oil reserves. Combining completely antagonistic forces from the Islamists to defectors from Gaddafi’s regime, and assorted ‘democrats’ of recent vintage, it is very unlikely that the Transitional National Council will hold together. Libya threatens to fall apart, as we warned before the war, and resemble in the future not so much a democratic Arcadia, which had been promised, but the nightmare of ethnic and tribal divisions along the lines of Somalia. We advocated an independent movement of the working class for Benghazi and a class appeal from them to the Libyan masses as a whole. A similar class approach is necessary in all the states in the region – the perspectives for which are impossible to compress into this document.

28. The movement in Syria is clearly at a crossroads. The number of victims arising from the regime’s repression is over 4000 now. Daily mass demonstrations take place and sanctions have been imposed both by the UN and now the Arab League. The latter is a severe blow to the elite gathered around the Assad regime because of its historic association with the Arab struggle. Only Iran – where the Shias are in the majority, unlike in Syria – supports the Assad regime. But Iran is also now facing sanctions because of its nuclear programme. As we have pointed out previously, it is possible that military action could follow this, which could trigger a regional conflict, including war. Indeed, with the near civil war in Syria all kinds of possibilities involving conflict could break out. Turkey, which is already involved on its borders with the flight of refugees into its territory, has already warned the Syrian regime that it might be compelled to intervene. On the other hand, Israel – which actually prefers the Assad regime to remain in power because of the fear of what would happen if it was overthrown – could also be drawn in. This could take the form of military action against Iran or Syria or both. The region is like a tinderbox where anything could happen. Then there is the Palestinian question, which could explode at any time. Moreover, all of this is taking place against the background of radicalisation – reflected in strikes and occupations – in Israel. A new period of generalised struggle, arising from the deepening of the world economic crisis and its severe impact in the Middle East and North Africa, is likely. We must energetically seek out the best sections of workers and youth and convince them about our ideas and perspectives.

29. The opposition in Syria appears to have gained ground in the past period. However, it is not clear that it has reached the ‘critical mass’ that could lead to a speedy overthrow of the Assad regime. Syria is very divided on ethnic and religious lines. This is why imperialism and neighbouring Turkey fear the breakup of the country. The bitter sectarian ethnic and religious conflicts that would result from this would have incalculable consequences on neighbouring states. The opposition is divided with most of the opposition coming from the majority Sunni population. At the same time the army – always crucial in maintaining the Alawite elite around Assad in power – has not yet disintegrated, although sections of it have defected to the rebels. Therefore, it is most likely that the struggle in Syria will be a more drawn-out one. The regime does not yet appear to be at its tipping point but in this highly unstable situation it could arrive at this position very quickly.

Severe economic crisis for capitalism
30. The ‘Occupy’ movement is highly symptomatic of the overall mood which is developing under the whip of this crisis. It also presages coming mass movements in many countries not yet seriously affected politically, and not just in Europe but throughout the world. This deduction arises from the perspective of an enduring long-term crisis of capitalism, which has formed the bedrock of the CWI’s approach since its onset in 2007-08. Our conclusion was that we had entered a period of revolution and counter-revolution because of the incapacity of the bourgeoisie to solve this underlying crisis.

31. This has been reinforced at each stage. However amongst the masses there were illusions that capitalism would be able to extricate itself: through state intervention, stimulus packages, etc. And these measures did have some effect in preventing an outright depression with mass unemployment along the lines of the 1930s; but they did not solve the underlying crisis. Moreover, the switch from semi-Keynesian policies in the US, Britain and to some extent elsewhere to austerity programmes reinforced the recession, with depressionary features following in their wake; capitalism now finds itself in a cul-de-sac.

32. The European ‘sovereign debt’ crisis illustrates the catastrophic consequences for capitalism, not just in Europe but throughout the world, of the financial credit bubbles, which grew exponentially and involved massive injections of fictitious capital during the boom in the ‘noughties’. This process, which goes back to the 1970s, was in turn the consequence of the lack of profitable outlets in Europe, the US and Japan. There has been some discussion and controversy in Marxist economic circles as to the immediate factors which lead to a crisis. However, Marx was careful not to single out just one trigger for the onset of crises. Undoubtedly, the limited purchasing power of the masses, which is inherent in the exploitation of labour power, examined by Marx, reinforced by the colossal inequality, which is a feature of the last 20 to 30 years, as well as the current attacks on living standards are big factors in the present crisis.

33. On the other hand, the long-term tendency of the rate of profit to decline, particularly when there is a drop in gross profits – which mostly concerns the capitalists – can be a factor leading to crisis. As we pointed out, this is certainly not the case in the current situation, where there is a colossal accumulation of cash reserves (what the capitalists call liquidity). Samuel Brittan, a British economist firmly in the Thatcher camp in the past but now fervent in his advocacy of semi-Keynesian measures, has pointed towards healthy profits presently in the coffers of big business which could provide the source of new investment and could, he maintains, in turn provide a spark to begin the process of growth. However, confronted as capitalism is with a big element of Keynes’s ‘liquidity trap’ – a hoarding of assets and money, low interest rates, fear that deflation will persist, etc. – the capitalists are refusing to invest, are, in effect, on a ‘strike of capital’. Creditors refuse to lend and borrowers – weighed down with leaden boots of debt – refuse to borrow more. At the moment, the system is jammed and, given government and private indebtedness, that is unlikely to change in the foreseeable future. All the economic institutions of world capitalism point to, at best, stagnation in the current economic situation – an ‘L-shaped recovery’ – with anaemic growth rates and, in some estimates, zero growth for the eurozone. At the same time, it cannot be ruled out that the paralysis of the bourgeois in the teeth of this crisis can lead to an outright depression or, at the very least, depressionary features – already there in some cases – in countries in Europe and even on whole continents.

China facing crisis
34. Nor can China provide the lifeline for rescuing ailing world capitalism. In 2008 when China faced a serious crisis, factories were closed and unemployment climbed exponentially. Consequently, the Chinese elite feared massive ‘social unrest’, code for revolution. So they ‘primed the pump’ through a massive injection of credit facilitated by the state banks that dominate the economy. This resulted in annualised credit growth of 170%, probably the biggest ‘economic stimulus’ in world history. China was allowed to do this because of its unique character. In this way, the Chinese elite managed to crank up the growth rate to double digits. But the other side of this was that factories and shopping malls were built on a massive scale which will never make a profit, with many them standing idle. This overcapacity is the price that China, particularly the ruling elite, was prepared to pay to prevent an uprising of the Chinese masses. They were able to do this because of the unique character of China. It possesses a considerable pure capitalist sector, particularly in the coastal provinces. But the remnants of the now disintegrated ‘planned economy’ still exercise an important, in some senses a decisive effect, on the direction of the economy. We have characterised it as a ‘state capitalist’ regime of a ‘unique kind’. Its ‘uniqueness’ is indicated by the considerable concentration in the hands of the state, some estimate a majority, of banks and industry, but with a substantial ‘pure’ capitalist sector. There is no comparison to this kind of state, which exists in China at the present time. It allows this regime to do something in the midst of a crisis that no other is capable of doing; a massive stimulus package, which has created jobs not just in China but indirectly with those trading with China, such as Germany.

35. However the other visible side of this process is huge overcapacity – fuelled by bank credit – and a bout of inflation, which the Chinese regime now appears to have under control. Officially, government debt remains below 20% of GDP. However, if you factor in the local government infrastructure loans and sundry other commitments, the Chinese national debt is closer to 70% of GDP. Edward Chancellor in the Financial Times [5 December] comments: “Beijing cannot repeat the massive stimulus package of 2008-09. That was a one-off trick for which the bill of reckoning remains to be paid.” However, a second stimulus package of some size cannot be ruled out. This process was reflected also in the chronic housing problem. This goes together with massive corruption and the growth of inequality, which is recognised to have aroused the indignation of the masses. It is estimated that the growth rate is likely to drop to about 8%, which will immediately affect those countries whose manufacturing industries have received big benefits from the Chinese economy, like Germany, and some of the commodity producers, like Brazil, who have increased their trade with China but now will probably face a contraction. Not least of the effects will be the fuelling of discontent, which is rising amongst youth and the working class against the unacceptable social conditions that now exist in China. Since 2008, China’s stock of private credit (or ‘social finance’) has grown to an extent that it has exceeded the credit growth of the US in the years prior to the Lehman Brothers collapse. The slowdown in the world economy could have a serious impact on China’s economy.”

36. The capitalist crisis is not just economic but profoundly political, particularly at the summits of society, with the biggest and most open clashes within the ranks of the bourgeoisie for decades. Their political leaders are treated almost with disdain for their inability to show a way forward. They are like a football crowd dissatisfied with their manager and shouting, ‘You don’t know what you are doing!’ Their ineffectiveness was quite clearly demonstrated at the Cannes summit of the G20 in November. In the run-up to this meeting, the press was full of optimism, echoing Obama’s slogan, with the French pronouncing: "We Cannes do". Afterwards, the conclusion was: "We Cannes not do"!

37. This gathering also served to illustrate the decline in the economic power of US imperialism. In the immediate period after the Second World War, US imperialism through the Marshall plan was able to impose its economic will in the capitalist world. Even at the summits in the past 10-20 years, the US was able to wield its influence on economic policy. At this gathering, Obama was completely unable to impose on ‘Europe’ economic solutions beneficial for the continent and, of course, for the world as a whole. Sarkozy was also treated disdainfully – he was forced to publicly kick his heels – until the Chinese president, Hu Jintao, eventually deigned to turn up to meet him. This was supposed to be the platform to launch Sarkozy’s bid for a second presidential term as he paraded himself before the French people as the ‘saviour’ of European and world capitalism. His proposal for China to use its colossal reserves to underwrite the euro in the form of loans and guarantees to the European Central Bank (ECB) was dashed within days of its announcement. Even if it wanted to, the Chinese regime will be incapable of selling to its own population – with average GDP per head on the level of El Salvador – the massive transfer of funds to prop up the pensions of ‘rich Europeans’.

38. The failure of capitalist summits to offer a way out of the economic crisis is accompanied by the open inability to take or coordinate any serious measures on environmental issues, especially climate change. In fact, the opposite process is happening; even such limited and ineffective measures as the Kyoto protocol are history and several states are opting out. The Durban climate conference (COP 17) is a manifestation of this failure. After a minor decline in carbon dioxide emissions in 2008 and 2009, even the US Department of Energy’s latest world data shows an unprecedented increase in 2010. It is worse than all worst-case scenarios put forward by the experts of the IPCC (the UN’s world climate council) four years ago. With an additional 5.9% rise in emissions in 2010, the speed of the increase reached a new all-time peak. While some of the demonstrations linked to the COP 17 summit have been smaller than in the past, this inability to find a solution has a big impact on the consciousness of workers and especially young people. Environmental questions will be a trigger again for protests and rebellion in the future.

Europe in ferment - France
39. Sarkozy himself is under siege – as with all governments of Europe –because of the effects of the deteriorating economic situation in France, with unemployment rising. He faces an uphill battle to secure a second term in April and May’s presidential elections. There is the ‘drip drip’ of job cuts; the car giant Peugeot has angered unions with its proposals to scrap 5,000 jobs from a total worldwide workforce of 200,000. The threat to France to downgrade its credit rating is being used by Sarkozy to prepare the ground for savage cuts: ‘spend less and work more’. There is a noisy campaign by the government and the employers to cut ‘labour costs’. It is alleged that the hourly cost of labour in France rose by €9 between 2000 and 2010 and in the same period in Germany it rose by just €4. This is just one example of the way the bourgeois in each country play off their working classes against one another – dragging in at the same time the terror of the ‘downgrading’ of its national debt – in order to justify the huge reinforcement of neoliberal policies.

40. The employers are also demanding the complete scrapping of the remnants of the 35-hour week, which it alleges is a ‘handicap on the cost of labour’. France being France, the working class, despite elections on the horizon, is bound to move onto the industrial plane in answer to these attacks in the next period. However, they will also look towards the electoral plane. The more advanced detachments of French workers will be searching for a clear fighting alternative. It will not be forthcoming from the main challenger to Sarkozy, the Socialist Party candidate Hollande, who is already committed – like his ‘social-democratic’ cousins throughout Europe – to cutting the debt, meaning further attacks on the working class. However, if he is successful in defeating Sarkozy and carries out similar policies, as he will, then he will meet with ferocious resistance. In the ‘primaries’ to select the Socialist Party’s candidate, there was a massive turnout, reportedly of about 2 million. This does not at all vindicate the method of ‘primaries’, borrowed from the broken political system in the US. This is designed to dissolve the organised strength and politically-aware membership of a party into the raw mass, influenced by the press, etc. But it was a powerful expression of the yearning of huge swathes of the population, particularly of workers who feel disenfranchised, when no candidate or party really expresses their views. They therefore turned out in huge numbers and in the first round 17% voted for the ‘left’ candidate Arnaud Montebourg. His programme was only vaguely left but struck a chord because of the implied criticisms of capital and the suggestion of a radical alternative.

41. Imagine the response if the NPA, in the past period, had organised itself properly and formulated a clear class struggle perspective, intervening energetically in all of the myriad industrial and social conflicts of the past few years. Our French comrades reported that there had been 77 strikes in France between February and the beginning of June alone. The NPA would now be a serious contender for garnering at least some of the support that presently goes to other left forces and candidates. Unfortunately, it appears as though the NPA will not be a serious contender in the elections. This itself is a criticism of the still leading force within the NPA, the former LCR, French section of the USFI, who have been incapable of building on the success of the 2002 elections. It is still necessary for us to assist the best workers and youth who wish to transform this party into a real fighting socialist pole of attraction. At the same time, it is urgently necessary to attract to our own banner those both within the NPA as well as a considerable section of workers and youth who remain outside its ranks. In the convulsive events are that opening up in the country, France and the French working class will reclaim its place in the first rank of radical and revolutionary forces in Europe.

Germany – dominant force in Europe
42. Germany has long been the leading economic force in Europe. However, the Eurozone crisis has forced it to be a more overt political force. The representatives of German capitalism have assumed the mantle over the rest of Europe as the US did towards the world in the past. It has used the eurozone – with interest rates set by the ECB, which it dominates and attunes to its interests– to put the rest of Europe on ‘rations’. This was tolerated – indeed, it was enormously beneficial – by the ‘periphery’ because it allowed them to borrow at low interest rates, which allowed them to ‘grow’ although at the cost of piling up huge debts. The quid pro quo for Germany was that these countries and the rest of Europe provided the markets for German exports, industrial exports in particular. China also represents a huge market for German goods but with the likely slowing down of the Chinese economy– latest estimates say that growth rates could slump below 8% – sales of these will fall. The other side of this, of course, is that other countries, particularly the weaker ones, were placed in a currency straitjacket, which has proved disastrous – as we anticipated – once the boom turned into bust. Nevertheless, German capitalism has made huge financial investments in the eurozone by its banks purchasing sovereign bonds and this why they are exposed to its collapse.

43. The attacks on the living standards of the German workers in the earlier part of the last decade , through the programme of wage cuts, part-time and precarious work etc., has up to now given German capitalism a competitive edge in exports . Both Europe and China have provided the main outlet for these, which will not necessarily be the situation in the future. A period of competitive devaluations, which would follow the breakup of the eurozone, could have a devastating effect on the German economy, with one estimate concluding it could result in the loss of at least one million jobs in Germany.

44. Angela Merkel, expressing the confidence of the German ruling class, bestrides Europe as an imitation ‘Colossus’, waving the big stick at perceived economic sinners throughout Europe, but she does not cut the same figure at home. Unemployment has gone down yet her coalition government– with the former ‘liberals’ of the FDP – is not popular and could collapse at any time. Moreover, she has to face big opposition within her own party, the Christian Democrats, over Europe with some sections of the party, backed by elements of big business, threatening to split and form a new eurosceptic party. Industrial production has fluctuated up and down in the latter months of 2011, reinforcing the worries of the more farsighted representatives of German capitalism and Merkel herself of the consequences for them of the current world and European economic death spiral and particularly the threat of a deepening of deflation. She has floated the idea of a minimum wage, partly for this reason but also because she wants to lay the basis possibly for ditching the waning FDP from the government. This in turn could prepare the way for a grand coalition with the SPD, but it is also possible that a split in the ruling coalition will force early elections.

45. While DIE LINKE has suffered regional election setbacks and its national opinion poll standing has fallen to around 8%, it still has the potential to grow and act as a rallying point for left opposition, particularly when the SPD is back in the federal government. Like some of the other left parties, for example the IU in Spain, DIE LINKE has moved leftwards in response to the crisis. It recently adopted a left reformist programme that combines openness on participation in capitalist coalition governments with calls for “system change” and pledges that “we want to build a democratic socialist society”. The combination of DIE LINKE being the only Bundestag party opposing the EU leaders’ ‘rescue plans’ and the return of Lafontaine gives the party another opportunity to build support, however whether it is able to seize this opportunity is unfortunately an open question.

Britain
46. The onset of the crisis has profoundly affected Britain, particularly since the election of the ConDem coalition government last year. The catastrophic errors of the British ruling class have been exposed. It has allowed its manufacturing base to atrophy in favour of investment in financial services, which in turn have collapsed. All the layers of fat built up to cushion British capitalism from economic storms have been eaten away. Its empire has gone and North Sea oil revenues have begun to run dry.

47. Unprecedented cuts in living standards have been implemented with more to come. The government admits that living standards in 2015 will be lower than they were in 2002; society will have stood still for 10 years! This will go down historically as a lost decade, with a lost generation of one million young people and one million women already unemployed, with more to follow in the dead-end of joblessness.

48. Britain faces a situation it has not confronted for 80 years. The ConDem government’s declaration of war against all the rights and conditions of the British working class – for this is what it represents – is the greatest challenge since the period immediately prior to the 1926 general strike. This explains the ferocious reaction of the mass of the working people reflected in the huge demonstrations and strikes in 2011: 26 March, the biggest specifically working-class demonstration in history; 30 June a partial public-sector strike; and the mammoth 30 November strike.

49. The official leadership of the Trade Union Congress (TUC) has been compelled to go where they did not want to and that was to ratify action against the government’s plans. In this, our comrades played a key role, especially where we have considerable influence on the left in the unions. Above all, the battle that we have been engaged in the National Shop Stewards Network (NSSN), where we mobilise from below as well as from the top within the trade unions, has paid dividends in helping to bring about this situation. Our youth comrades have also conducted a heroic and energetic campaign against youth unemployment, including the new Jarrow march, as well as intervening in the riots in London, etc.

50. The situation in Britain illustrates many things: the blind alley of capitalism and the lack of an alternative of all the major parties and organisations. This includes the great majority of the trade union leaders, particularly those on the right. It also illustrates the role that can be played by a small organisation which possesses clear perspectives. It can have an effect much greater than its size. This is what we have achieved in Britain at the present time. However, it is not sufficient just to build influence but serious forces have to be organised in the party.

US workers begin to fight back
51. The crisis is clearly illustrated by the deadlock in Europe between the different European powers over what economic direction to take. If anything, the divide between different sections of the ruling class and their alleged representatives in the US is even more pronounced, expressed as it is in the stand-off between Congress and Obama over the scale of the cuts, the issue of health, education, etc. Obama is terrified that a deepening of the European crisis – resulting in the collapse or partial collapse of the banking sector– will have wider repercussions on the US and the world. This could dash his hopes for a successful re-election campaign for the presidency next year.

52. But the economic catastrophe of the US today is also alarming the bourgeois of other countries because of the still pivotal position of the US ruling class for world capitalism. The ‘American nightmare’ was the headline of an editorial in the Guardian on 28 November, which stated: “The US economy is now almost thrice as big as in the early 1970s – and yet the typical workingman finds not a dime of this transformative growth in his pay packet… Back in the 1960s, it would have been assumed that such a sustained riot of the rich would incur a revolution.” And the grounds for a revolution in the outlook of the working class are being prepared by the systematic and seemingly never-ending degradation of the conditions of significant sections of the masses. Unemployment officially stands at 9% but is, in reality, twice that level and with a pronounced tendency for mass long-term unemployment to become entrenched along the lines of the 1930s.

53. In some senses this crisis is worse already than the 1930s. Overall, that decade witnessed economic stagnation and ‘depression’. But within this framework there was a period of growth from June 1934 to 1937. Roosevelt’s attack on the pensions of First World War veterans in 1937 threatened to plunge the US economy back into crisis. However, the US was saved from a new and deeper crisis by the onset of war preparations, which allowed growth in the defence industries to seep through to other industries. Without this, the social convulsions of the 1930s could have tipped over into a powerful revolutionary movement with the possible establishment of an independent mass workers’ party. History, however, took a different route. But now the knot of history is being retied in the industrial and social reawakening of the mass of the working class in America. This process will be furthered by the attacks arising from this crisis, which will rain down on the heads of the American workers.

54. Moreover, the US is racked by a deep political crisis. Daily, both houses of the US Congress demonstrate just how dysfunctional is the political system and how outdated is the US Constitution. This constitution, designed in the 18th century for a small farmer-dominated population and for ‘bipartisanship’, is no longer ‘fit for purpose’. Bipartisanship is completely outdated and utterly incapable of reconciling the growing class antagonisms that are rendering it almost ungovernable. This would represent a problem in any state but it could put the most powerful in mortal danger.

55. The infamous ‘special interests’ – with at least 13,000 lobbyists infesting Congress, 25 for every US congressman – big business and its cohorts dominate this ‘dollar democracy’ as never before in history. At the same time, more than 50% of the people – and that figure could grow in the next US presidential election – are disengaged from this travesty of democracy, where an increasingly impoverished population gets to choose which gang of millionaires and billionaires will dominate and exploit them over the next four years.

56. No US president has been elected for a second term with the level of unemployment that now exists in the US. Obama’s popularity has plunged as a result with one poll in December giving him an approval rating of -24 percentage points! This would ‘normally’ indicate the defeat of the incumbent in presidential elections. However, few US presidents, if any, have quite faced the incredible phenomenon of the Tea Party with its ludicrous and crazed ideas and leadership. In few other countries could potential candidates get away with what Perry, the governor of Texas, attempted recently. In attacking Obama, he allegedly quoted him as saying that the economy was ‘not important’. However, Obama, it was shown later, had never said such a thing but his opponent in the last presidential election, John McCain, did express himself in this way. But no apology or retraction was forthcoming from Perry when this was revealed.

57. The overall political level in most countries has been thrown back. And, if left to the media, which lies through its teeth even against ‘liberals’, this will not rise much, if at all. The US started from a very low level and because of the absence of class-based parties, the level of understanding politically has sunk even further amongst huge swathes of the population. Nevertheless, under the pressure of big events the political understanding of the working class in particular can develop by leaps and bounds. This would be facilitated enormously by the building of a real ‘third party’ as a mass radical pole of attraction.

58. To the Tea Party Obama is without doubt a ‘socialist’! He is certainly not, as his actions have demonstrated when he has bent the knee to big business. He has also backpedalled on necessary reforms in health. Roosevelt in the 1930s, in the manner allegedly of Jesus Christ, threatened to ‘drive the moneylenders from the temple’. Obama has not even attempted to trim the fingernails of big business as he more and more demonstrates that he is firmly in the camp of capitalism.

59. On the other hand, the American working class has been given a very powerful lesson in the realities of capitalism over the past period. They have witnessed mass evictions from their houses– over 2 million houses have been ‘foreclosed’ – they have been ejected from the workplaces and factories while the rich pile up even more wealth . They have witnessed and defeated the attempt of right-wing governors of states such as Ohio to outlaw unions and the right to organise in the public sector. This attempt was smashed by a successful union campaign in a referendum to defeat this proposal. It is just one indication of the rising militancy – the increased class polarisation – which is taking place in the US the present time. It is no accident that the ‘Occupy’ movement was on a higher level of involvement, reaching out to the trade unions in particular, than in most countries in Europe. A bigger space was allowed for this movement to develop because of the low density of trade union membership – just 12% of the American labour force is organised into unions – combined with the conservative officialdom that dominates big sections of the trade union movement. Therefore, the unions – particularly the militant base of many of them – threw themselves eagerly into the ‘Occupy’ movement. In this way the mood in the ‘Occupy’ movement can feed back into the trade union movement and prove to be an important catalyst for change.

Dilemma of the eurozone
60. As to perspectives for the eurozone and the fate of the euro, the bourgeoisie themselves are completely at sea, incapable of coming up with agreed solutions. Mervyn King, when asked what was likely to happen in the next few months, bluntly stated: "I could not tell you what is likely to happen tomorrow never mind in a few months time." Equally, it is very difficult for us to work out precisely the likely march of events, particularly the timescale of how the ‘sovereign debt’ crisis will play out, particularly in the short-term. This question was carefully analysed in the article which appeared on our website and in the theoretical journal of the English and Welsh section, Socialism Today. The IS agrees with the analysis made there and the following conclusions.

61. The article pointed out that Merkel and the Bundesbank have blocked the ECB making large-scale purchases of eurozone government bonds, the only immediate measure that could possibly shore up sovereign debt in the short term. This is despite pleas from eurozone governments, including Sarkozy, for ECB intervention. At the same time, the European Financial Stability Fund (EFSF – which has only around €250bn left) has not been turned into an effective vehicle for intervention (it has failed to raise additional funds on financial markets). Merkel has also rejected so far the introduction of mutually guaranteed eurobonds to secure the position of the weaker eurozone countries.

62. ECB intervention or eurobonds would, in the view of Merkel, let the ‘profligate’ eurozone governments off the hook regarding further austerity measures. They would create ‘moral hazard’, allowing them to run up further debts without any penalty. Meanwhile, the assault on eurozone bonds by financial markets continues, even threatening French sovereign debt. “Few doubt Ms Merkel’s good intentions,” commented Philip Stephens [Financial Times, 22 November], “many more worry, with good cause, that her obsession with moral hazard could yet be the death of monetary union.”

63. However, there are also attempts by Germany and France to prepare such measures through the back door by extending the ECB purchase of government bonds or bringing forward the additional implementation of the ESM to 2012. The crisis is pushing the German and French bourgeoisies into more and more attempts to centralise Europe and organise new bail-outs to banks and states, which will continue until they cannot afford to either financially or politically. Then the centrifugal forces will take the upper hand. New U-turns are possible and likely, both towards more centralisation and in a nationalist direction.

64. The big bond traders have forced up the cost of Italian and Spanish sovereign debt, and are now turning against French government bonds. The bonds of other countries, like Netherlands, Austria, etc, have been threatened. There is even the beginning of a sell-off of German bonds, despite the relative strength of the German economy. This reflects growing fears among Asian investors of a complete collapse of the eurozone.

65. Merkel’s response has been to propose ‘more Europe’, initially tightening the eurozone monetary union. This would be, according to her plan, another small, incremental step towards fiscal and political union. She is proposing a tighter eurozone regime, with strict rules over taxation and spending. There would be the creation of a new body, a ‘European monetary fund’, which would have powers to intervene, supervise or even take over the fiscal and economic policies of national governments. Then, it is hinted, it might be possible to introduce mutually assured eurobonds and deploy other measures to support eurozone governments. This plan, for supervision of all eurozone budgets, would really be a return to the stability pact, broken by France and Germany in the past, but now ‘on steroids’!

66. Merkel, however, has not welcomed proposals from Barroso, president of the European Commission, putting forward plans for eurobonds. The German version would be based on stricter conditions than are being proposed by the commission. This has raised fears among European leaders that the new eurozone regime would, in effect, mean German hegemony. This was particularly true after comments by Volker Kauder, Merkel’s parliamentary party leader, at the recent Christian Democratic Union conference that Europe “is now speaking German”.

67. The proposals put forward by Merkel would require a treaty revision. Although the revisions would affect only the 17 eurozone members, revisions would require the approval of all 27 EU members. In a number of countries this would require referenda. In her meeting with Cameron, Merkel, it appears, was eager to get the British government’s acceptance. In return for the Con-Dem government accepting the treaty changes (and, according to some reports, giving an undertaking not to call a referendum in Britain), Merkel would agree to further opt-outs for Britain on social and employment legislation.

68. Would the measures proposed by Merkel be enough to save the euro? The first problem is time. It would take at least several months, possibly all next year, for the eurozone leaders to draw up and themselves approve a new eurozone framework. But then there is the even bigger problem of gaining political acceptance in the eurozone countries. Mass opposition will undoubtedly be increased by further austerity measures, a downswing in the European (and most likely global) economy and the fact that Merkel and others link these limited steps to the idea of political union.

69. Merkel is raising the question of political union as a long-term aim to be achieved by incremental steps. A fiscal union, with a central political infrastructure – a supra-national state apparatus - is the logic of a single currency. The present crisis shows the impossibility of sustaining a pure currency union without fiscal and economic coordination. The wealthier capitalist states are never going to underwrite the weaker economies without having a decisive say over their economic policies. To be successful in the long run, the currency union would require a common fiscal policy, common sovereign bonds and transfers from the wealthier to the poorer countries to avoid growing economic disparities and political tensions.

70. This implies a federal European state, similar to the federal structure of the United States. However, the US was formed during a period of long-term growth in the 19th century. US capitalism was consolidated as a result of the civil war against the southern slave-owners, who were based on a plantation economy. US capitalism was able to develop a common (or at least dominant) language and culture. In contrast, Europe (whether the 17 or the 27) consists of a collection of nation states with their own languages, histories and national consciousness.

Greek workers continue to fight
71. For these reasons – as we have long contended – the euro and the Eurozone rather than leading to a more unified Europe will result in the opposite: to splits, nationalism and all the ‘evils’ which the euro project, we were told, would banish forever. The euro itself could collapse with either a voluntary or forced exit of a number of countries, beginning with Greece. The price of remaining within the euro is a permanent savage austerity package and, at the end of this, national debt will still be 120% of GDP! Yet this is already the ‘unacceptable’ current level of Italian national debt, which forced big cuts and prompted the downfall of Berlusconi, replaced by the imposition of an undemocratic ‘technocratic’ government.

72. This means the mass impoverishment of the Greek people for a whole historical period. Workers in other countries will share the same fate, as the programme of the British ConDem government for years of austerity indicates. The Greek people currently fear that eviction from the eurozone will turn back the clock to the economic backwardness and isolation of the pre-euro period. Therefore, in opinion polls 80% expressed opposition to leaving the euro at the time of Papandreou’s projected, but then withdrawn, referendum. However, this could change very rapidly and in a referendum on ‘in or out’ – which could loom quickly not just in Greece but in other European countries – getting out of the EU could appear as a more attractive option than remaining in the austerity straitjacket. However, we have to emphasise that ‘in or out’, the same problems will be posed and the same attacks on living standards will be unleashed against the Greek people. The reintroduction of the drachma could lead to the wholesale collapse of the banks and with this the destruction of savings – à la Argentina – as well as a devaluation of the new currency, which would be accompanied by a big rise in inflation.

73. We have to be extremely flexible in the way that we approach the EU and the possibility – perhaps even the likelihood – of referenda for and against the euro and the eurozone, which could be posed both in the 17 countries within the eurozone and the additional 10 countries ‘outside’. Because continued membership of the EU could be identified in the minds of the masses with further ruthless cuts in living standards, in some situations the working class and our sections could be faced with voting to leave the EU. In this situation, it is vital that we put forward a class and internationalist position, with clear opposition to bourgeois nationalism, which we oppose on all occasions. However, in view of the bureaucratic centralist diktats of the EU, a legitimate feeling of national indignation can develop, as has obviously been the case in Greece, and can develop in other countries. Trotsky pointed out that it is the working class and its organisations who are the real champions of the ‘nation’, of which the majority is the working class and its allies.

74. The idea that the EU was ‘progressive’ and was leading ineluctably towards a ‘unified Europe’ has been shattered with the onset of the economic crisis. This idea, which was entertained not just by bourgeois liberals and pro-capitalist trade union leaders but even by some of a Marxist or even a Trotskyist persuasion, has been severely undermined as the neo-liberal character of the EU – with the imposition of anti-worker measures such as the Posted Workers Directive, the opening of the door for the acceptance of wages and conditions of the neo-colonial world – has become clear. This view has been reinforced by what has been perceived, particularly in those countries at the receiving end, as a virtual colonial power inflicting misery and diktats on its ‘subjects’. This is the case in Greece with EU officials installed – or at least attempting to act – in the offices of the different ministries, thus ensuring the carrying out of the austerity programmes. The same applies to the virtual ‘coup’ of the so-called ‘non-political’ Monti government in Italy, which followed the eviction of Berlusconi from power. The same process has been witnessed in Greece with the replacement of Papandreou’s government by a ‘national’ government led by former ECB vice-president Papademos as an ‘arbiter’ between New Democracy and Pasok.

75. This represents a new phase in Europe, reflecting as it does the depth and seriousness of the economic crisis, the severity of the attacks on the working class, its resistance to this and, as a consequence, the intensification of the class struggle. Even in ‘normal’ periods of ‘social peace’, a veiled civil war takes place between the contending classes. This, however, has taken a more direct and open form in the past period as the bourgeois has, in some instances, resorted to brutal measures against the rights and conditions of the working class, as is clearly the case in Greece. The Greek workers are still ferociously resisting, reflected in the power workers’ refusal to implement government-imposed measures which would have seen householders’ electricity supply cut off if they had not paid the new property tax. This is accompanied by a ‘don’t pay’ campaign in which our comrades are participating. But even in other countries where the class struggle has not yet reached this pitch – in Ireland, Britain and other countries – a kind of ‘one-sided civil war’ has been unleashed, which has not yet been met with sufficiently resolute resistance from the trade union leaders. In fact, the capitalists, in a number of countries, have won the first round in the battle; in some cases – such as Greece – the second and third rounds as well. In Britain, 300,000 public sector jobs have been lost since the ConDem government came to power and another 400,000 are planned to go. The promise of Osborne and Cameron that private-sector jobs would replace them, like the phoenix from the ashes, has been shown to be completely illusory; there are plenty of ‘ashes’ in the empty factories and a massive rise in unemployment, but no sign of the phoenix which has flown away to China and other ‘growth areas’, never to return!

Spain and Portugal look over the cliff
76. With the advent of right-wing governments in Portugal and Spain, the working class can expect a huge worsening of their position through a deepening and extension of the austerity measures promised by the new right wing government of Rajoy in Spain and by the Portuguese centre-right coalition government, elected in June. The Portuguese economy contracted from July to September 2011 for the fourth consecutive quarter, the worst performance of any of the 27 nations in the EU. Gross domestic product fell 0.4% in the third quarter compared with the three previous quarters and was down 1.7% from the same period last year. And tax increases aim to reduce the real income of public-sector workers and state pensions by more than 20% compared to 2010. Significantly, soldiers and police, wearing civilian clothes, joined in the massive demonstrations and the general strike in November which brought the country to a complete standstill.

77. Even 87-year-old Mario Soares, former leader of the Portuguese Socialist Party (PSP) and past president of Portugal, was compelled to oppose the government’s programme and support the general strike! What a volte face for Soares, who played a decisive role in the derailment of the Portuguese revolution in the early 1970s! He acted as a conduit for German social democracy – which in turn was linked to the American CIA – in facilitating counter-revolution in a ‘democratic’ form in Portugal. This rescued Portuguese capitalism, which The Times newspaper, in a premature obituary, had declared ‘was dead’ following the events of March 1975. Unfortunately, Soares and his party, together with other factors– and particularly with the absence of a mass revolutionary party– managed to bring it back from the dead, subsequently leading to the rolling back of the gains of the revolution and in turn laid the basis for the nightmare confronting the Portuguese people today.

78. One thing is certain: the traditions of the Portuguese revolution which began in 1974 will be rediscovered by the new generation moving into struggle. The same need for a mass guiding organisation of the Portuguese masses remains as urgent today as it was in the period following the 1974 overthrow of Caetano. The Portuguese Communist Party, while it has still an important presence in the working class, has not yet managed to shed its Stalinist traditions and methods of the past, and has failed to reach out to the new generation with a genuine Marxist, democratic revolutionary policy and organisation. On the other hand, the Left Bloc, which had the promise, when it was founded, of becoming the basis of a new alternative revolutionary pole of attraction, has stalled because of its heterogeneous class character– it is not firmly rooted nor does it appeal to the working class, particularly the industrial working class. It was also opportunist in its approach in the recent elections when it supported the PSP candidate for president! The small forces of Marxism in Portugal must fight for a genuine Marxist programme, orientating to the new generation of youth and workers, and at the same time combine this with the struggle within the two major left forces of the CP and the Left Bloc.

79. The continuing economic crisis could also bring back onto the agenda the national question in Europe: for instance in Spain and in Britain – both in Scotland and Wales. Even in countries in which the national question has seemingly been ‘solved’, or pushed into the background, it can reappear: in Belgium, in Italy (for instance in the north and in Alto Adige), in Ireland, Cyprus, etc. This can complicate the struggles of the working class unless a clear policy and approach is adopted. This involves support for the legitimate national aspirations but opposition to bourgeois nationalism and striving for the closest unity of the working class in action through unified workers’ organisation in trade unions and parties.

80. In Spain, the right-wing government, under ferocious pressure from the EU for even more cuts, will act quickly to introduce ‘reforms’, in reality massive counter-reforms. A programme of cuts, estimated at €16 billion, must be inflicted on the Spanish people in order to mollify the ‘markets’, in effect a handful of bond vigilantes. Rajoy, leader of the Partido Popular (PP), won by default, perhaps anticipating an economic default by his government later! However, the capitalists have little faith in the right-wing government delivering. The electoral victory of the PP led to a precipitous drop in shares the day after it was elected! This is tacit recognition that the Spanish workers and their organisations – despite the existence of mass unemployment – remain a formidable force to reckon with. The government of Zapatero acted to restrain, to an extent, a full confrontation with the working class, because of its alleged ‘socialist’ pedigree, although in reality – as the indignados movement showed – it has moved so far to the right, it was seen as just another capitalist party.

81. The Spanish masses will be much more prepared to confront an open right-wing government of the PP, perhaps after an initial pause, as they gather their forces and their thoughts, to take on the new government. A protracted period of struggle opens up in Spain on the social, industrial and political arenas. The ‘indignados’ movement which began in Spain – obviously inspired by Tahrir Square in Egypt –initially adopted perhaps the most pronounced ‘non-political’ stance of any. This was precisely because of the complete disappointment, particularly of the youth, in the political decay of all the main parties. This included the trade unions and the United Left (IU). It is true that the IU increased its representation in the Cortes, tripling its number of MPs. But given the disillusionment with the capitalist parties, particularly the ‘Socialist’ party, and against the background of the devastating economic crisis, it should have done immeasurably better. In Valencia – the third largest city in Spain –for instance, one quarter of the workforce is unemployed. PSOE received its lowest number of seats – 110 –since the end of the Franco regime in 1977.

82. However, the political abstentionism of the youth cannot be maintained in the teeth of the seriousness of the crisis confronting Spain and the urgency of seeking a viable solution. The ‘Occupy’ movement will melt away unless it takes on a clear political direction. The CWI in Spain must push, as we have done so far successfully, for the struggle within the left organisations, particularly IU, for a clear Marxist policy of struggle, which can engage youth attracted to the ‘Occupy’ movement and to politicise them on clear class lines. This must be combined with raising a clear independent Marxist banner. Rajoy expresses the complete bankruptcy of Spanish capitalism, speaking for the system as a whole, throughout Europe and the world, when he declared: “There will be no miracles… We haven’t promised any.”

Berlusconi goes but more attacks in Italy
A similar approach is adopted by the leaders in other countries, including those of the ‘left’ like Bersani of the Democratic Left (PD) in Italy. The PD – the remnants of the once mighty Communist Party of Italy – acceded to the capitalists’ campaign that lifted Monti to the head of a completely undemocratic ‘technocratic’ government to replace the discredited Berlusconi. In fact a ‘soft coup’ by the right has taken place without a peep of protest from the ‘left’ political leaders. They now display the same fear of taking power, on which Trotsky remarked in relation to the de Man plan of the Belgian social democracy in the 1930s. The devastating crisis –partially hidden by Berlusconi’s long period in power – is now clearly visible. Italy has experienced a ‘lost decade’ of economic stagnation which has left Italy at the bottom of the world league table of growth. According to the IMF, “only Zimbabwe, Haiti and Eritrea have done worse”. As in other countries in southern Europe, it is young people who have borne the brunt with at least 30% unemployed; many of them, because of the housing crisis, forced to remain living with their parents until they are into their forties. Under the ‘national umbrella’, Monti’s government – urged on by the EU – will attempt to attack all the past gains in the Italian working class, on pensions in particular, by seeking to cut them and extend retirement age to 67. But not for nothing did the leader of the Northern League, Bossi, warn Berlusconi before he departed the scene that if they touched pensions “the people will kill us”! The same will apply to the Monti government or any government which replaces it.

83. Whole families exist in Italy – as in other countries –with the only source of income being the pension received by a retired parent. An attack on pensions – which will surely come from the Monti government – is therefore in Italy much more a direct attack on whole families than in other countries. It is sure to provoke massive resistance, as will raising the retirement age: “How can you retire at 67 on a production line? It is not physically possible. We are producing a car in less than a minute,” commented a car worker reported in the Financial Times.

84. Therefore the expectation that this government will last until elections scheduled for 2013 is a chimera. If the Monti government tilts towards the ‘left’ –by introducing a wealth tax for instance, highly unlikely but not ruled out – it could be brought down by the right-wing parties who still have a majority on paper. However, it will not be in parliament that the crucial social issues will be decided. It will be in the factories and workplaces and on the ‘street’ which will now be decisive. The mass demonstrations, the singing of hallelujahs in Rome when Berlusconi was driven out – more like a ‘liberation’ that the normal change of government– the chants, the ferocious reaction of the students all over Italy, is the signature tune of this coming period.

85. The general strike called by all the major unions for 12 December, in a matter of days after the announcement of the new austerity package, is an indication of the anger that has exploded from below. It presages a new period of class struggle in which what is left of Rifondazione Comunista, which is sticking to its support for the PD, will prove incapable of giving a fighting lead. The initiative of well-known metalworkers’ leader, Giorgio Cremaschi, which has gathered together hundreds of lefts under the title ’Cancel the Debt’, will also be tested in the major clashes between the classes.

86. Italy will see the rekindling of its best revolutionary traditions in the coming period. The idea of a ‘workers’ front’, of the best militant working-class fighters and young people, which can lay the basis for the rebuilding of a genuine workers’ party, fits the present needs of Marxism in Italy. The installation of undemocratic regimes in Italy and Greece raises the question of the character and the limits of bourgeois democracy in the present period.

Elements of Bonapartism
87. One function of bourgeois democracy is to contain the social tensions which rise particularly in a crisis from overflowing the riverbanks, of ‘normal’ and ‘peaceful’ daily, parliamentary struggle. But increased ‘electricity’ – rising class tensions – can reach such a pitch that the ‘fuses’ blow. The idea of a cross-class solution to the crisis was summed up by the British Chancellor of the Exchequer (finance minister) George Osborne in the sentence: "We are all in this together." The idea that the class struggle has been conjured away convinces few in this period of heightened class tension. Warren Buffet, allegedly the richest man in the world, stated bluntly: "There is class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning."

88. Faced with a serious even threatening challenge, which assumes more and more of an open character – as in Greece and elsewhere – the capitalists can resort to extra-parliamentary measures. There is an element of Bonapartism even in the most ‘democratic’, or ‘republican’, countries, in the powers, very often ‘latent’ and held ‘in reserve’, which governments can resort to in ‘emergencies’. Part of this process has been an increased tendency to use state repression. The extreme manifestation of extra-parliamentary measures, of counter-revolution, is of course fascism. The bourgeois cannot resort to the classic fascism of Hitler and Mussolini in the modern era. The class balance of forces – particularly with the overwhelming social weight of the working class, including its newer layers, as well as the radicalisation of the petty bourgeois or sections of it – precludes this.

89. However this does not mean that the bourgeois will not seek to edge towards more ‘authoritarian’ measures, which have as their aim the bypassing of democratic control through elected bodies. In the future, particularly if the working class and its organisations miss chance after chance to put its stamp on the situation, leading to mass disillusionment, then it cannot be precluded that a new ‘strong man’ could emerge out of the chaos with all the associated barbarism – as in Latin America in the 1970s. Before the nightmare assumes a real form, however, the working class will have more than one opportunity to effect socialist change, especially if Marxism can win over the great majority. It is clear that in Greece in the last two or three years alone the working class could have taken power and effected socialist change if they had had at their head a mass revolutionary party – our present organisation organised on a mass basis.

90. But even in the present crisis, forms of Bonapartism – parliamentary Bonapartism in particular – can be resorted to by the capitalists when there is political deadlock, as there is to some extent in Greece and Italy. Moreover, such measures can be threatened on a European scale as well as in nation states; witness the leaking in the Bundestag of Ireland’s next budget before the Dáil and the Irish people were informed of its contents! The unelected EU commission – with the connivance of Merkel and Sarkozy – have resorted to Bonapartist diktats against ‘miscreant’ countries that are reluctant to swallow the austerity medicine. They are proposing a tighter version of the ‘stability pact’ that did not work fully in a period of boom and therefore is less likely to be effective in a period of serious economic crisis. They are threatening to ‘fine’ countries that sin against debt limits a percentage of their GD.

91. However, at this stage this is a very weak form of parliamentary Bonapartism. Moreover, it can be blown away once the situation that gave rise to it changes, particularly with an upswing in the class struggle, which is likely in a number of countries. Also, in Greece, given the new bitter mood which has developed, the resistance of the working class will be resumed once the full impact of the austerity measures on top of the agonies that the Greek people have suffered in the past period are felt.

The far right
92. The far-right parties and organisations in Europe continue to occupy an important part of the political vacuum which has existed for some time now. In fact, in some countries they have strengthened the position on the electoral field in particular. The far-right National Front, led by Marine Le Pen, could have a big impact in next year’s French presidential elections and it is not excluded that she could beat Sarkozy in the first round. In the Netherlands, the party of Geert Wilders, the PVV, is propping up the government. Wilders is seen in the polls as the second most popular politician in the country. In Austria, the far-right Freedom Party is just behind or level-pegging in the polls with the governing Social Democratic Party, with the other far right party, the BZÖ, at 5%. In the Russian elections, the right-wing nationalist the Liberal Democratic Party of Russia led by Zhirinovsky received 11.4% of the vote. And, ominously, in opinion polls in Greece the nationalist right-wing party, LAOS, is at 8% at the present time, while in Hungary the viciously anti-Semitic Jobbik party has a substantial electoral base with almost 17% of the vote in the election of 2010, giving it 47 seats in the parliament. Its vote rose by over seven times from the previous election in 2006. There are important, vicious far right-wing organisations, possessing paramilitary wings, although with smaller numbers, in Scandinavia, in Germany in Italy, Britain and elsewhere. The damage and mayhem they can inflict on the completely innocent was revealed in the Norwegian massacres in the summer by the racist right-wing madman Anders Breivik. This was followed by the revelations in Germany of a cell of neo-Nazis which had carried out a series of murders over seven years and yet had never been detected by the police!

93. These parties and organisations have to be countered whenever they raise their heads, but they do not yet represent a firm basis for right-wing reaction. In pursuit of electoral popularity and acceptability many have sought to downplay their overt racism, anti-Semitism, anti-Islamism, etc. But if the working class is not presented with a clear alternative, a new party fighting for them, these parties can grow. They can be reinforced by a further deepening of the crisis and a consequent growth of helplessness and despair. It is urgent that we, the CWI, and the national sections of the International continue to pay special attention to the far right opposed to the labour movement and propose effective measures to counter and undermine their influence.

Russia and Eastern Europe badly affected
94. Eastern Europe and Russia have also been severely affected by the crisis in the eurozone. The Czech Republic, Hungary and Poland have seen the value of their currencies plummet. The Czech koruna – considered only recently to be a ‘safe haven’ for the region – has dropped against the euro. Moreover, the Czech Republic is perhaps the most exposed with 49% of its GDP consisting of exports to the eurozone, while Hungary has 44% of its GDP, Bulgaria and Poland 20%! Russia, on the other hand, sends exports to the eurozone worth less than 10% of GDP, while Turkey sends just over 5%. The glittering promise of an everlasting staircase to wealth and prosperity linked with a return to capitalism and the prospect of these countries entering Europe has been severely undermined. Notwithstanding the disarray in the EU, the ruling class or caste which holds sway in countries like Poland are ever hopeful and still knocking at the door demanding entry. However, when the dust settles, if indeed it ever does, at the end of the present European bust up, then there could be little for them to enter! The stronger EU powers like Poland could find themselves, as a consequence, plunged back into the kind of economic catastrophe which has blighted countries such as Latvia, Lithuania and Estonia in the past period.

95. At the same time the shine has begun to come off the Putin regime, reliant on the income from oil. The price of this commodity has been affected by the stagnation or even further decline in the world economy. At the same time, there is growing discontent, partially reflected in the outcome of the rigged parliamentary election. Putin’s party ‘United Russia’ has lost its two-thirds majority and gained just under half of the votes, down from 64%. The Communist Party’s share of the vote shot up from 11% to nearly 20%, and it seems to have gained votes from a layer of youth. With the outlawing and intimidation of the opposition, which the Putin regime has perfected to a fine art, the real discontent of the masses can only be indirectly expressed. However, this was spectacularly on display when Putin attended a martial arts tournament – at which, through his own admission, he is an ‘expert’ – and was roundly booed by the crowd. This visibly shocked Putin, which then led his apologists attempting to excuse the booing; they were not displaying opposition to Putin but merely wanted to go to the toilet! Therefore presumably they were inviting Putin to ‘piss off’!

96. In reality, it is incidents like this which display the simmering hatred of Putin – referred to in his own cloistered circle as the ‘tsar’ – and his regime, which is looting the resources of Russia at the expense of the people, from increasing sections of the masses: “Putinism, the selective autocracy that he created, is a giant car boot sale.” [David Hearst, Guardian 30 November 2011.] Coming to power, he pledged to eliminate the power of the ‘oligarchs’ – seven of them control half of the wealth of Russia –but he has, in effect, created a new set of gangsters, oligarchs in their own right, in place of the few like Khodorkovsky who have been jailed. The court case in London recently between Berezovsky and Abramovich has revealed in all its gory detail the scandalous and shameful economic looting of Russia, the stealing of the resources built up by the Russian people, through mass privatisation and ‘wild capitalism’. It was probably the greatest robbery perpetrated in human history. These two oligarchs and their deeds, their misdeeds, make Chicago gangsters of the 1930s like Al Capone and Bugsy Siegel look like street corner muggers.

97. And there is a growing awareness of this amongst the people, even amongst that section of the population, young people – who in the 1990s had the greatest illusions in the return of Russia and the former Soviet Union to capitalism. But the only governments that they have experienced are one gangster regime after another of rotten and prematurely senile Russian capitalism. But as the Guardian article indicated: “Russians are still waiting to live the normal life they rightly yearn for. Many have given up waiting. A private poll of 5,000 students at Moscow State University found that 80% intended to leave the country.” Something like 30 to 40% of the total population would also like to emigrate!

98. Hearst also showed that there is a flood of capital exiting Russia. The ‘filthy rich’ have demonstrated their ‘patriotism’ by doubling the amount of capital flows out of the country this year from $34 billion-$70 billion! Moreover, should the price of crude oil hit $125 a barrel, it would not benefit the Russian people as four times as much money as a percentage of GDP is going out of Russia rather than coming in. In other words, both the most dynamic section of the population, the young people, and the capitalists and their international backers have no faith in Putin or the regime upon which it rests. The conditions for a revolution, an explosion, are therefore being prepared in Russia: “It’s clear that the authorities very much fear a Cairo-type situation unfolding,” said Nikolai Petrov, a Moscow analyst. [Financial Times 5 December.]

99. As elsewhere, the independent power of the working class has not been expressed either in powerful independent trade unions or in the creation of a mass party of the working class. The main opposition to Putin at this stage is around those ‘liberals’ who are fighting against Putin’s ‘crony capitalism’ and looking to establish a more ‘normal’ capitalism, built firmly on ‘the rule of [capitalist] law’.

100. Because of the history of the workers’ movement in Russia, once they move into action they will rediscover the rich revolutionary traditions of the past. It is the new generation – students who seriously look towards the labour movement and the working class – as well as young workers who will supply the necessary yeast for the rise of the workers’ movement in Russia.

Conclusions
101. Clearly, we have arrived at a turning point in world history. The utter bankruptcy of capitalism is clear before the eyes of the world. The bourgeoisie – at least their representatives – openly confess their inability to solve the problems of humanity. Patchwork solutions, which are all that is on offer, are not enough. This is revealed in the economy, the social field, with the increasing impoverishment of growing sections of the working masses, and also in the environment. Any pretence of a ‘green agenda’ is being thrown overboard as capitalism scrambles for an economic lifeline to save its system. ‘Growth’ at any cost – which in any case will remain illusory – is proclaimed by the ConDem government in Britain, even if this results in a rise of harmful emissions. At the same time, the climate change conference in Durban is in disarray and could break up without even a minimal agreement. This reinforces our contention that capitalism will be incapable of saving the world from a catastrophic and potentially irreversible meltdown of the ice caps and the environment as a whole.

102. The class divide has widened enormously during the crisis and is destined to widen even further. But the greatest gap is between the objective situation of failing and disintegrating capitalism and the consciousness of the masses. This arises from a number of sources and differs from continent to continent and within countries in the same continent. Sections of the working class – with memories of recent prosperity – are still in a state of shock at the severity and length of the crisis. They will need more time to see that capitalism is on its way out on the basis of undermining the rights and conditions of them and their families. Many are hoping against hope that the ‘good times’ will return. Most will be severely disappointed when this does not materialise. However, we will be making a mistake if we conclude that this is the outlook of all sections, even a majority, of the working class. Events since 2007-08 have left an imprint on the consciousness of huge swathes of the working class and particularly of young people. As we have repeated many times, however, most of these workers know what they do not want but are not yet clear of the alternative. However, events, and big events at that, will change this and prepare the ground for further revolutionary or near-revolutionary explosions, leading to a molecular change in the consciousness of the working class. New political formations of the working class, including mass parties, will arise in this period and these will give us opportunities. The change of consciousness will allow us to win the best to the banner of Marxism, to the CWI.