World Perspectives: Age of austerity preparing seismic convulsions

We are living through one of the most dramatic periods in history

Document adopted by the December 2012 meeting of the International Executive Committee of the CWIIntroduction

We are living through one of the most dramatic periods in history. The Greek workers, followed by the Portuguese and Spanish, are in the vanguard of the movement against capitalist barbarity, endless austerity. No one can now argue that the working class is passive in the face of the onslaught of rotten and diseased capitalism. In a series of great general strikes, they have resisted. They have yet to create a mass party and leadership worthy of them in the battle between labour and capital that will dominate the early 21st century. It is the task of the CWI through the theoretical clarity of our ideas, matched to a programme of action to help create this new leadership, which can ensure victory to the working class.

Middle East

The unstable character of world relations – which can result in the outbreak of conflict in many areas of the world at any time – is indicated by the recent clashes between Israel and Hamas in the Gaza Strip. This was restricted to the exchange of rocket fire and a ceasefire agreement has now been reached. But the war could break out again and a ground assault by Israel against Gaza cannot be ruled out, which in turn would provoke turmoil throughout the Middle East and the possibility of a wider war.

The ‘Arab Spring’, or awakening, in the Middle East and North Africa, had already threatened to turn into autumn if not the onset of winter. As the CWI predicted, imperialist intervention in Libya – scandalously supported by some on the left, including some so-called ‘Trotskyists’ – gave the opportunity for imperialism to intervene and establish a bridgehead against the revolution in the Middle East and North Africa. This colossal movement of the masses had toppled Ben Ali in Tunisia and the Mubarak dictatorship in Egypt, with the Islamic jihadist forces largely impotent bystanders incapable of affecting the outcome of the revolution.

It threatened to do the same in Libya through a mass movement from below, expressed in independent workers committees in Benghazi in particular, which could have spread to the rest of Libya. This perspective, however, was cut across by imperialism and its local allies with catastrophic results for the people of Libya. The country is now divided into a patchwork of spheres of influence, with their own militias, including reactionary al Qaida-type Islamic fundamentalists. However having thrown off the dictatorial regime of Gadhafi the mass of the population were not prepared to tolerate the would-be mini-dictators and, consequently, have risen up in some areas to drive them and their militias out. This indicates the potential for an independent working-class programme for democracy and socialism. The fundamental process of the revolution is not dead but may be temporarily pushed into the background.

The situation in Tunisia, painted by bourgeois commentators as the rosy, successful story of the ‘Arab Spring’, remains profoundly unstable. Food prices and unemployment have risen sharply. The use of religious issues as an instrument of diversion by the ruling party Ennahdha, in the country with the strongest secular traditions in the Arab world, is essentially adding to the generalised anger. However, the Salafist movement is taking a certain grip among the most alienated layers of the urban poor. A looming power battle is taking place between elements of the old regime, federated under the wing of ex-provisional Prime Minister Caid Essebsi and his new party, ‘The Call of Tunisia’, which plays on secular credentials, and the ruling but crumbling coalition led by Ennahdha, which attempts to assert its grip over the state machine. Meanwhile, workers’ strikes and social protests continue unabated, as illustrated by the almost complete paralysis of phosphate production for a month in the Gafsa region in November. As in Egypt, the impasse of capitalism pushes the new rulers towards resurrecting the rottenness of the past, repression becoming a central method of rule. This cannot fail to lead to a new, wider backlash with the working class and the youth. The building of an independent working-class political pole of attraction, based on the immense power of the UGTT, is more urgent than ever.

The events in Jordan with a mass movement opposed to the King and the possibility of his early overthrow illustrates what is taking place. The emergence of majority Islamic fundamentalist forces within the parliaments of Egypt, Tunisia and elsewhere has obscured temporarily the original aims of the revolution, which had a pronounced democratic and social character. But the Islamic parties and forces will now be put to the test by mass movements demanding increases in living standards, the solution to mass unemployment, which on a capitalist basis cannot be met, independent trade unions, etc. It is the rise in prices, particularly of fuel, together with the demand for democracy that drives the current movements in Jordan. Big movements on social issues, possibly triggered by events from the outside, for instance, from Europe, can exercise a decisive effect in changing the situation.

At the same time, a new regional war or wars is still possible. Syria is a powder keg with the Assad regime besieged and facing possible overthrow but with an opposition that is also divided along sectarian lines. We cannot support either Assad or the opposition. We have to steer a clear independent path towards those masses we can reach with a class programme and perspective.

Some of the minorities still seek shelter under the wing of Assad for fear of the consequences for them of an opposition victory, which clearly enjoys predominant support from the majority Sunni population, with a significant and growing influence of al Qaeda-type organisations. Moreover, the intervention of Turkey against the Assad regime has ratcheted up the tension between the two countries. Armed clashes could take place between them, which could then spiral out of control. The intervention of Shia-dominated Iran on the side of their co- religionists in Syria cannot be ruled out. Equally, the conflict could spill over into the Lebanon with the outbreak of sectarian conflict. This, in turn, could lead to Israel seeking the opportunity to launch air strikes against Iran’s alleged nuclear facilities, which would undoubtedly lead to retaliation with Iranian and Hezbollah rockets striking Israeli cities and facilities.

In the current conflict, the Israeli regime and the wider population have been taken aback by the capacity of Hamas rockets to strike in the very heart of even Tel Aviv. The CWI opposes the so-called ‘surgical strikes’ of Israel – which are nothing of the kind – that have resulted in at least 160 Palestinians being killed.

In the legitimate struggle against Isreali state terrorism we do not support the methods of Hamas, which has unleashed indiscriminate rocket fire into the heavily populated towns of Israel. This has only served to drive the population of Israel into the arms of Netanyahu, with a reported 85% supporting retaliatory action and 35% now supporting a ground invasion of Gaza, in which hundreds and thousands of Palestinians as well as Israelis would be killed and maimed. The Palestinian people have the right to resist the Israeli government’s terroristic methods but this can be best accomplished through mass movements against the encroachments in the occupied territories – with the aim of splitting the working class of Israel from support for the vicious Netanyahu regime. In the event of an invasion of Gaza or anywhere else in the occupied territories, the Palestinian people have every right to resist, with arms if necessary, against the invaders.

At the same time, the increasingly provocative colonialist methods of Israel – particularly sections of the Israeli settlers who continue to encroach on and occupy Palestinian land – if they continue unabated, may push a part of the Palestinian population further towards a change in the outlook of an eventual settlement of the conflict. Up to now, support for a ‘two-state’ solution – a Palestinian state, or homeland alongside Israel – has been seen by a clear majority as a means of resolving the conflict.

In the short term, the attack on Gaza by Israel has probably increased support for the idea of a separate state for the Palestinians. However, we have pointed out that on a capitalist basis a Palestinian state would be an abortion. It will not satisfy the Palestinian masses’ demand for a secure homeland, given its limited character and the absence of a firm economic base. We therefore advocate a democratic socialist Palestine alongside a democratic socialist Israel in a socialist confederation of the region.

South Africa

Notwithstanding the influence of geopolitical factors on the course of events – which can seriously alter perspectives in some circumstances – the main features of the present situation are the deepening crisis of world capitalism and the combative response to this of the working class and the poor. This is symbolised by the magnificent reawakening of the South African working class led by of the miners. The heroic strikes, like the earlier revolutions in the Middle East and North Africa, have inspired the working class in the advanced industrial countries.

But following the miners other sections of the South African working class resorted to action in a strike wave which is currently the biggest and most bloody in the world. This has also been characterised by a high degree of consciousness, of socialist consciousness by the working class – a legacy which was not completely wiped out following the abortive revolution of the 1980s, which preceded the ending of apartheid. This is expressed in the demand for new fighting unions for the miners in place of the utterly corrupt mineworkers’ union, the NUM. Confronted with an equally corrupt ANC, the miners – with our assistance – have launched the call for a new mass workers’ party. This will strengthen a similar demand for independent working-class representation in all of those countries – the majority – where the mass of the workers have no party, even one which only partly represents them.

Even the Economist magazine, the voice of international big business, has stated: “The best hope for the country in years to come is a real split in the ANC between the populist left and the fat-cat right to offer a genuine choice for voters.” This seems surprising if not incredible at first glance. No capitalist journal advocates this for Britain! Yet what alarms the Economist is that so discredited has the ANC become– a gulf of Grand Canyon proportions now exists between the ANC’s lords , chiefs and kings, and the working class – that the impoverished masses have begun to turn sharply to the left and embraced real fighters and socialists, the members of the DSM (CWI South Africa). They will therefore move heaven and earth to try and prevent the masses moving in our direction, even if that means setting up a ‘populist’ alternative to a real mass workers’ party. They are unlikely to succeed if we do our job properly.

The movement in South Africa has also served to expose the weakness of South African capitalism. At the turn of the century, the country accounted for 40% of the total GDP of the 48 countries south of the Sahara. Nigeria, three times larger in terms of population, on the other hand, was way back in second place with around 14%. The remainder of the countries of Africa in terms of GDP were much smaller than these two giants. Yet economists now estimate that, despite Nigeria’s dislocation and obvious drawbacks, it will overtake South Africa within a few years. Part of the explanation is that there has been a 6% growth in the economies of countries north of the Limpopo River, although much of this growth is due to commodity production, whereas South Africa’s rate of growth has slowed to barely 2%. It is also rated very low in terms of education, science, maths, etc. Endemic mass unemployment of officially 25% is probably nearer to 40%. A third of South African workers exist on less than $2 a day. Massive inequality has actually grown since the dismantling of apartheid and the gap between rich and poor is one of the largest in the world.

The spectrum of an escalating crisis in the chronically unstable region of Eastern Congo, and the recent deadly ethnic violence in Kenya – which used to be presented as a beacon of stability – show that in the absence of a strong and united workers’ movement, social disintegration, sectarian clashes or even a complete break up can take the upper hand. Mali, also for a long time portrayed as a model of democracy in west Africa, is facing an unprecedented and multi-dimensional crisis, for which the masses are paying a heavy price. To date, an estimated 450,000 have fled the north of the country, which is effectively under the control of armed reactionary faction. The mineral wealth of Mali as well as its geo-strategic position are good reasons why it has stired-up the greedy appetite of the imperialist powers, with France at the forefront. Another factor is the fear of the neighbouring states that should Mali break up then this will set a precedent for their own countries. The possibility of an imperialist backed intervention in the north, via neighbouring states, runs the risk of further destabilisation of the entire region.

It is vital that the CWI builds on the important base we have developed in Africa, particularly in Nigeria and South Africa. Our Nigerian comrades have pursued heroic work of a mass character, including participation in a number of general strikes. However, a combination of the trade union leaders policies and the absence of a mass workers party has led to new complications in the situation. Particularly the rise of Boko Haram. The great experience we have accumulated in Nigeria and South Africa will pay big dividends in the next period.

Bourgeois economists and commentators are predicting an ‘African renaissance’. It is true that some countries have outstripped in terms of growth their former colonial masters, like Angola and Portugal. This has attracted immigrants from Portugal, Brazil and elsewhere. But this growth favours a very thin layer of educated professionals. It is highly unlikely that the masses will gain greatly given the world economic crisis, which will impact even more severely in the neo-colonial world than in the advanced industrial countries. Any ‘renaissance’ in Africa is likely to be of the revolutionary Marxist kind, in which we will play an important, if not decisive role because of the position we have built in the two main countries of Africa: Nigeria and South Africa. We must now seek to spread this to other countries in Africa, establishing the CWI on an all-Africa basis.

US Elections

The most important event in the past period, at least in the capitalist West, was the re-election of Obama in the US elections. He was the first president to be re-elected since 1945 with an unemployment rate above 7.5%. Some strategists of capital – including some who imagine they are, like George Osborne, the Tory Chancellor of the Exchequer (British finance minister) – have drawn totally false conclusions from this election. They argue that the main reason why Obama was elected was because the American people blamed Bush, the previous president, for their present economic catastrophes. This undoubtedly was a factor but it was not the only one and not decisive. In in Britain, the government will be judged on their current policies, which are having a devastating effect in cutting living standards. A big polarisation took place with Obama voters – despite their disappointment since he was elected – turning out to prevent the candidate for the ‘0.01%’, the rich, the plutocrats, from effectively winning the election through Romney.

There was a real fear of what a Romney victory would mean in turning back the wheel of history and undermining welfare, the limited health reforms, etc. This helped the turnout, which although not as high as 2008, was nevertheless quite high by historical standards. The popular vote was closer with Obama winning by 50.8% to 47.5% but, crucially, the majority of women supported him, with an even bigger majority of young women. He also won 80% of minority voters – Latinos and Afro-Americans, of course, while significant sections of unionised workers – such as the auto workers, worked for and supported him. In this election, it was not just a question of the victory of ‘lesser evilism’. That was there, of course, but significant layers were also prepared to give ‘more time’ to Obama to ‘fix the economy’. There was also a strong defensive mood amongst wide sections of society to defend themselves against a perceived onslaught against them should Romney have won. Obama will not, of course, be able to fix the economy, because of the character of this economic crisis, which will be drawn out.

The marvellous success of Socialist Alternative candidate in Seattle with a splendid 29% of the votes was a triumph, not just for the American supporters but for the whole of the CWI. So too was the re-election of our comrade in Australia. It was a mighty confirmation of our idea of standing independent workers’ candidates leading to a new mass workers’ party. Moreover, this took place in the very heart of the strongest capitalist power in the world. This victory is a harbinger of what we can expect elsewhere, particularly in South Africa and Europe in the next period. These elections show the potential which dialectically exists in the US for the ideas and programme of socialism. The heritage of social-democratic and Stalinist betrayals does not exist in the US. This makes it more favourable terrain for the genuine ideas of socialism than most places in Europe and elsewhere at this stage. So also is the victory of Obama from our point of view. His second term could prepare the way for a third party, but this time a popular, radical and even socialist party of the working class. Although, it may not initially be committed to socialism in its first period, the emergence of a new radical left party as a step along the way would represent a big step forward in the USA. Of course, all perspectives are contingent on how the economy develops in the US and throughout the world.

World Economy – Brics

Prospects for the world economy remain the key to the perspectives for world capitalism. And there is no region of the world now that offers the prospect of even a medium-term escape for the system. The idea that the Brics would be able to ‘decouple’ from the world economy has been dented by the slowdown in China and the spin-off effects of this for the prospects of those economies relying on the exports of primary products. The growth rates of Brazil of up to 7.5% have dropped precipitately to an estimated 1.6% in 2012. Following from this, Brazil and other countries whose economies grew – Australia for instance with a 21-year boom – can expect increased social tensions and strikes with the working class now sharing the fate of the rest of the world, which in turn allows more scope for combined international action along the lines of 14 November in Europe. In Brazil, the very development of the economy was a positive thing in the sense that, paradoxically, it strengthened the working class and led to strikes, as we had predicted, with the working class demanding its ‘share’ of the increased profits of the bourgeois.

US economy

The US economy – which is one of the few to regain the production levels of pre-2008 – has slowed to its weakest pace since 2009, growing at less than 2% while the world’s biggest economies have lost steam simultaneously. If the Republicans refuse a deal with Obama, if the US topples off the fiscal cliff, this could almost automatically plunge the world economy – which is basically stagnant – into a new deeper recession. The interests of capitalism should logically compel the Republicans to seek a deal with Obama. But the political system in the US, designed originally for an 18th-century population of predominantly small farmers, is now completely dysfunctional, along with the Republican Party. Obama, in one of his more revealing outbursts speaking to American bankers in 2009, stated: “My administration is all that is between you and the pitchforks.” But in the election, this did not earn him the support of the American bourgeois as a whole who favoured Romney in the main. This just goes to show that a class does not always recognise its own best interests! It is the strategists and the thinkers of the ruling class, sometimes in opposition to those that they supposedly represent, who are prepared to stand up for the best interests of the capitalists and chart a way forward. The problem for them today is that the choice is between different roads to ruin for capitalism.

World Economy

The decay, their loss of confidence, is evident in their refusal to invest, as well as the warnings from the hallowed institutions of capitalism: the IMF, the World Bank, etc. Their predictions of a quick escape from the present crisis have been dashed and they have now swung over to complete pessimism. They now agree with our analysis, concluding that this crisis will be drawn out and could even get worse, much worse. Cameron and the Governor of the Bank of England warn that the crisis might last another decade; the IMF whistles a similar tune. The theme first employed in Japan of ‘zombie banks’ is now used to describe not just the banks but the economies of America, Europe and Japan. And like Japan, bourgeois economists are predicting a ‘lost decade’ for some countries and for Europe as a whole. Some speculate this could last for two or even three decades. A comparison with the 19th-century depression from 1873 to 1896 is being made, at least for Europe. Martin Wolf in the Financial Times mused: “Is the age of unlimited growth over?” extensively quoting from a new study “Is US Economic Growth Over? Faltering Innovation Confronts the Six Headwinds.” [NBER Working Paper no 18315.]

This raised the vital question of the role of innovation and inventions generally in the development of capitalism, and particularly in driving forward the productivity of labour. The authors of the above study concluded that there have been, in the main, “three industrial revolutions” since 1750 that have been crucial in the development of capitalism. The first was roughly between 1750 and 1830, which created steam engines, cotton spinning, railways, etc. The second was the most important with its three central inventions of electricity, the internal combustion engine and running water with indoor plumbing in the relatively short period of 1870 to 1900. Both these revolutions required about 100 years for the full effects to percolate through the economy. After 1970, productivity growth slowed markedly for a number of reasons (which we ourselves have analysed in answer to the arguments of our South African and Liverpool defectors). The computer and Internet revolution – described by the authors as industrial revolution three (IR3) – reached its climax in the dot-com era of the late 1990s. But its main impact on productivity, they say, has withered away in the past eight years. They conclude that since the year 2000 invention has been largely concentrated on entertainment and communication devices that are smaller, smarter and more capable but they do not fundamentally change labour productivity or the standard of living in the way that electric light, motorcars or indoor plumbing did. This is not to say that there are not the potential inventions for enormously lifting productivity but the dilemma is the current state of capitalism in decline, which is incapable of developing the full potential of the productive forces. The tendency for the rate of profit to fall – and actual falls in profitability – discourages the capitalists from taking up inventions which can develop the productive forces.

Then there is the problem of ‘demand’ which in turn has led to an ‘investment strike’, with a minimum of $2 trillion of ‘unemployed capital’ in the cash piles of US companies. And, on top of this, exists the colossal debt overhang. Satyajit Das in the Financial Times berates the American bourgeois who “seem unable to handle the truth – the prospect of little or no economic growth for a prolonged period… Ever increasing borrowings are needed to sustain growth. By 2008 $4-$5 of debt was required to create one dollar of US growth up from $1-$2 in the 1950s. China now needs $6-$8 of credit to generate one dollar of growth; an increase from $1 to $2 15-20 years ago”. Trotsky commented about the situation confronting capitalism at the end of the 1930s depression: “Mankind’s productive forces stagnate. Already new inventions and improvements fail to raise the level of material wealth. Conjunctural crises under the conditions of the social crisis of the whole capitalist system inflict ever heavier deprivations and sufferings upon the masses. Growing unemployment, in its turn, deepens the financial crisis of the state and undermines the unstable monetary systems.” [Transitional Programme]

We must draw all the necessary conclusions from this, which sections of the bourgeois, from their own class standpoint, are already attempting to do. Capitalism faces not one crisis but a chain of crises. They are trying to reconcile the working class to the prospect of little or no growth and therefore of severely reduced living standards, as Greece demonstrates. We must counter this through our programme and emphasise the limitless possibilities – evident even today – if society was organised on a more rational, planned way through socialism. (China is to build the world’s tallest building – at the rate of three storeys a day – in just 90 days. Of course given China’s record of ignoring health and safety hazards, as well as the environmental costs, many are opposed to this. But this does show the colossal potential which cannot be used properly under capitalism but can be harnessed in a democratically-planned economy.)


The economic crisis in Europe is the most serious facing world capitalism. The depth of the crisis is partly a product of the introduction of the euro. It is manifested through the level of mass unemployment with 18.49 million people without jobs in the 17 countries sharing the euro, with an extra 146,000 joining the ranks of the unemployed in October alone. Across the whole 27-nation European Union, almost 26 million men and woman were without jobs in October – an increase of 169,000 in two months, while the overall unemployment rate stayed at 10.6%.

So serious and intractable does the crisis appear, with austerity clearly not working, that a spat has broken out, with the IMF warning against the “excessive austerity” applied by national governments in Europe with the benediction of the EU authorities and the European Central Bank. On the one side, as we have explained, the ECB has devised and sought to implement, like the US Federal Reserve and the British Bank of England, a form of Keynesianism through the purchase of government bonds as well as cheap loans to some banks and countries. On the other hand, these very same authorities – the ‘troika’ – have been the instruments for austerity policies. They have been stung by the implied criticism of the IMF, which has pointed out that a negative “multiplier effect” operates when severe austerity is implemented – cuts in government expenditure, loss of jobs, etc. – and therefore reduced income to the state. The ECB and national governments counter with the ‘absolute necessity’ to cut state spending, accompanied by all the other measures of austerity, privatisation, etc. Despite all the pleas and expectations of growth, austerity has had the effect of snuffing out even the economic embers that remained during the crisis.

It is true that Keynesian policies have failed to generate growth. In the current situation, it is like “pushing on a piece of string”. This has led new-born Keynesians, such as former Thatcherite monetarist Samuel Brittan, to lobby for bolder measures; he advocates what amounts to a giant game of ‘treasure hunt’ in a desperate attempt to get the economy moving again. He suggests, only half-seriously, that hordes of cash should be buried and then the adventurous souls who discover it will then go out and spend it! There is no indication of this happening, however. The largesse that has been distributed so far has been used to clear debts not to increase spending. This is an indication of the desperation of the ruling class for some improvement at this stage. Keynesianism has been partially tried and failed but this does not mean that, faced with a revolutionary explosion, the capitalists would not resort to far-reaching Keynesian measures. Concessions can be given and then the capitalists will attempt to take them back through inflation at a later stage.

Even now, the EU authorities are attempting to avoid the default of Greece by suggesting that more time is given for its debts to be paid off. This will not prevent the savage attacks on the Greek working class, which are being applied remorselessly by the EU. Nor will it solve the basic problems of Greece which will still be lumbered with colossal debts. Therefore, a Greek default is still likely, which will have huge repercussions throughout Europe, including Germany, which is heavily indebted to the banks of other countries. It is even possible that Germany itself could take the initiative of leaving the euro, such is the political opposition within Germany itself to bail-outs. Even the proposal to give Greece some more time to pay off its debts is meeting with opposition from the German capitalists because it means writing off a small portion of their debt. It is possible that, in relation to Spain and some other countries, the “can will be kicked further down the road”. But eventually the can will become too big to kick! Therefore, a breakup of the eurozone still remains on the cards. Opposition to Europe as a big business club is also growing with the demand for referenda in countries like Britain and possibly elsewhere. The majority in opinion polls in Britain is now for withdrawal from the EU. The capitalists of Europe are not at all certain that the present uneasy situation will not lead to even greater upheavals in Europe in the next period if they do not take some kind of emergency action.

Even the Chinese express alarm at the turn of events in Europe with a top Chinese official, Ji Liqun, sitting on top of a massive state-controlled sovereign wealth fund of £300 billion, warning that the European public are at “breaking point.” He had previously argued that Europeans should work harder but now recognises that the depth of public anger could lead to a “complete discarding” of austerity programmes. “The fact the public are taking to the streets and resorting to violence indicates the general public’s tolerance has hit its limits,” he commented. “Unions are now involved in organised protests; demonstrations and strikes. It smacks of the 1930s.” Not least of his unspoken concerns is that the example set by the European working class could spill over into China itself as well as his fear for Chinese investments in Europe.

Eastern Europe and Russia

Eastern Europe and Russia are also experiencing big upheavals. The regime in Russia is facing growing opposition. Putin, is no longer seen as invincible. Minor concessions made in the face of mass protests have been negated by the strengthening of authoritarianism, and Putin is increasingly relying on reactionary forces like the church. Recently we have even seen the introduction of Cossack patrols to maintain “order” and combat “illegal immigrants”. These measures will not save the regime. Two decades after the overthrow of Stalinism, the Russian people have begun to recover. Initially with an explosion of anger against the falsification of elections. As the protests developed over the year, even the pro-capitalist media commented how these protests were moving to the “left”, with a large block in defence of education and the increasing isolation of the failed liberal politicians and media personalities who “lead” the movement from the mass of participants. But often in history when the middle layers of society move against an unpopular regime, this opens the door to a movement of the oppressed masses. Up to now, the working class has not come out in a mass sense under its own banner. But it will do, demanding and organising independent workers’ organisations both in the trade unions and of a political character. This process will also be reinforced when economic circumstances change, as they will begin to do in the next period.

Unfortunately, the forces of the left are very weak in Russia. Those who come from a Stalinist tradition largely boycotted the protests making it easy for the liberals and far right to maintain their dominant position whilst other “lefts” tail-ended the liberals and even urged unity with the far-right forces. Although our forces are small, by taking up the democratic issues and linking them with social and economic demands in a transitional way, we succeeded in having a significant impact, gaining over 10,000 votes (about 14%) for our leading candidate in the election for an opposition co-ordinating committee. Our intervention in these protests has gone a long way to assist in establishing ourselves as on of the main left organisations in Russia.

The country is over-dependent on the oil price, which soared to record heights in the past but has now begun to decline and is likely to drop even more because of the contraction in the world economy and particularly of China. Some commentators claim that the US could become self-sufficient in energy by 2035 and this would have an effect on the oil producers’ income, including Russia, but also affecting Saudi Arabia and the Gulf States producers. This is highly questionable but it raises interesting geopolitical issues as to whether the US will still be committed to defending the Straits of Hormuz in the event of a conflict with Iran.


The same applies to many of the countries of the former Soviet Union. In the teeth of great difficulties and with the assistance of both the Russian comrades and the CWI we have continued to make great efforts in sustaining our organisation over a period of years. This can result in spectacular results in the next period. The spiteful repressive measures taken by the Nazarbayev regime only serve to spread the circle of opposition and will result in revolutionary upheavals. There are few societies in the world in which the gap between the top tiny elite and a mass of impoverished people is greater than in Kazakhstan. The same destruction of the middle-class took place here, even in advance of Greece. The working class is faced with mass unemployment, compounded by the denial of elementary democratic rights, in particular the right to organise trade unions and their own party. We have conducted a marvellous campaign internationally of solidarity which has combined action with our European parliamentary representatives alongside trade unionists, cultural figures, and workers and youth, not only to express sympathy and support but also in travelling on visits to the country, thereby forging international bonds between the Kazakhstan working class and the labour movement in Western Europe and internationally.

We need to continue the work of building the Socialist Movement Kazakhstan with the potential of uniting in a wider organisation of all the best class fighters in the country whilst taking further steps to ensure that a strong Marxist cadre is built capable of guiding the movement during the tumultuous events that will inevitably unfold. Any success in Kazakhstan in establishing an independent movement of the working class will also have big international repercussions, especially in Russia, as well as the countries of the former Soviet Union and Eastern Europe itself.

Eastern Europe

In Eastern Europe, we have had a general strike in Romania, a similar movement in Slovenia, and important strikes in the Czech Republic and elsewhere, which represent the entry into the arena of struggle of the masses of Eastern Europe. In Poland, the defeat on the increase in the retirement, age to 67 has led to bitterness in the workers’ movement and the first steps to building a regional general strike in Silesia. On the other hand, in the absence of a mass workers’ party, the against the far right-wing are stepping into the vacuum and there is a resurgence and consolidation of the far-right. In Hungary there has been a massive opposition movement in Hungary against the far-right government of Fidesz and its allies in Jobbik, with its paramilitary forces. The whip of the counter-revolution has been unleashed in Hungary but this will inevitably provoke a big counter-movement of the masses. We must endeavour to strengthen our small forces in these countries that can become an important arena of class conflict, with the re-entry of the working class onto the political arena.


Ireland is from many points of view a vital country for the CWI. Firstly it has experienced the most severe austerity programme in Northern Europe which parallels what has happened in southern Europe. Within a matter of years it is has been plunged from a country with one of the highest living standards in Europe – if not the highest, according to some measurements – not into a recession but a depression. Given the craven class-collaborationist position of the trade union leaders – used to decades of ‘social partnership’ – it is no surprise that the Irish working class was initially stunned by the severity of the crisis. But class anger has grown as accounts of breath-taking corruption of the capitalists, particularly the banks and the government has grown. This has been fuelled by the meteoric rise in unemployment to at least 15% of the labour force, increased dispossession of houses with the homeless alongside ‘ghost estates’. And then there is the draining away of the flower of the youth through emigration.

On top of this the government has imposed the infamous household tax. We have occupied a prominent position in the leadership of the campaign against this tax which has been successful in persuading at least 50% of the population not to pay it. However the Irish government is now proposing to replace this with a much more punitive property tax, which will give the working class and us much more scope to develop a mass campaign. The presence of our parliamentary representative in this and many other national and international campaigns has been invaluable for our organisation in Ireland and throughout the international. The resignation of one of our MPS from our ranks has disappointed some, but was linked to our struggle to defend our ideas and methods and will help us to move forward to seize the undoubted opportunities that will occur for us in the stormy period that is opening up in Ireland. Similarly in Northern Ireland, despite the enduring sectarian divide, our comrades managed to heroically organise a march against unemployment and commemorate the anniversary of the 1932 Belfast ‘riots’ also against unemployment which saw Catholics and Protestants come together in a unified demonstration against the means test – which was designed to cut unemployment pay.

Ireland is also important because of the United Left Alliance, in which we of course have participated. We have encountered difficulties from ‘expected quarters’ – ex-members together with the SWP – which have in turn led to the defection of one of the founding organisations from the ULA. It is vital that we continue to build our organisation in order that we can establish a powerful lever for Marxism in Ireland in the next period, as the successful conference of the Irish section showed.

The death of a young Asian woman, because the doctors refused to terminate her pregnancy on the grounds that Ireland was a ‘Catholic country’ and abortions were illegal, has caused outrage. This was despite the fact that the doctors concerned clearly understood that her life was in danger if the termination was not urgently carried out. Joe Higgins, our MP in Ireland, correctly described this as “medieval”, with the hierarchy of the Catholic Church still able to insist on reactionary measures like this in gross violation of the right of women to choose what happens to their bodies. This incident has led to protests and demonstrations of men and women demanding that the law be changed. This incident indicates that the struggle for women’s rights still has a long way to go – and not just in Ireland – if real equality between the sexes is to be established, which can only be fully achieved through a change in society. This, however, does not absolve us campaigning now – as sections have done – to fight to improve the position of women in the home, at work, where women are still grossly underpaid, and in society generally.


It is in Southern Europe where, in general, the most politically convulsive events are taking place at the present time. We have witnessed the general strikes in Greece, including four 48-hour general strikes, the massive movement in Spain, including two general strikes in eight months, with demonstrations of a million, in Portugal a million striking and taking to the streets, as well as a half-day general strike in Italy. For the first time on 14 November, coordinated European-wide action took place with the strongest support for the strike in what the capitalist press call the ‘Club Med’ countries: Spain, Greece, Portugal and Italy. The turnout in Greece did not compare to the earlier general strikes because of the sheer scale of the actions previously taken by the Greek working class. In southern Europe, TV studios were occupied, in Italy and Spain clashes took place while the railway tracks were occupied in Brescia and Naples. It is clear that a semi-insurrectionary mood exists in opposition to the austerity programme pursued on a continental-wide level.


In northern Europe also the masses are beginning to move. In Britain, for instance, the conference of the TUC, under the pressure of our organisation, together with the National Shop Stewards Network and left unions like the PCS, the RMT, and the Prison Officers Association (POA), in September voted in favour of considering a one-day general strike, for the first time in decades, in opposition to the austerity programme of the Tory-led coalition. A rearguard opposition is being pursued by the right-wing bureaucracy in the trade unions to the general strike demand. Also, the most punitive anti-trade union laws in the advanced industrial countries, which the employers and the government will not hesitate in using to prevent a strike, are an obstacle to overcome. But on the other hand a head of steam is building up for a one-day general strike because of the sheer scale of the cuts that have taken place, but particularly those that are in the pipeline. The Cameron government seems to have concluded that it is unlikely to win the next election and is therefore prepared to try and bulldoze through a draconian series of cuts similar to those introduced by the then Tory government in the period prior to the 1926 general strike. It is seeking to do this safe in the knowledge that an incoming Labour government led by Ed Miliband would not restore cuts in services. In fact, at the TUC demonstration of 150,000 in London on 20 October, Miliband was booed by the crowd when he admitted that he would not be able to cancel the cuts introduced by the Tory led coalition government.

A one-day general strike is likely to take place in Britain in the next period but the timing of such action is uncertain, partly because of the slower rhythm of the British labour movement but also because of the foot dragging of the right wing trade union leadership. Once a one-day general strike takes place in Britain the whole situation will be transformed. Of course, this partly depends on how it is prepared and whether it goes beyond workers in the public sector and the existing trade union membership, which stands at 26% of the labour force, a total of 6.5 million workers.

However, the appetite for decisive action to confront the government will inevitably grow as the attacks on the working class increase, not just through cuts, but also because of further government threats to trade union rights. The government is proposing such measures as prohibitively increasing the cost of appealing to tribunals against the bosses’ disciplining and dismissing workers, as well as curtailing ‘facility time’ for workplace trade union officials to represent union members. If a general strike does take place then the festering discontent at all levels of British society will gather behind it. Although Britain is not yet on the scale of Greece today, it is already Greece in slow motion. In the attacks on the most vulnerable sections of the population, the poor, disabled, etc., the British ruling class, through Osborne, has once more demonstrated its cold cruelty. Osborne was booed at the Paralympics, because the disabled people in the crowd and even some of the athletes themselves would soon have facilities and benefits taken away from them under government proposals. The middle-class as well as workers are coming under serious attack. Wages and salaries, for instance, have dropped by about 13% since the onset of the crisis. General strike action in Britain may therefore be similar to a ‘hartal’ in India and sri lanka – a strike not just of trade unionists in the urban areas but involving the middle layers of society, professionals and small businesses in towns – once action is undertaken in Britain.

A similar mood is beginning to take shape throughout Europe on a continental level. Perhaps only Austria – and it will catch up as a result of the generalised crisis – and one or two smaller ‘states’ such as Luxembourg and Liechtenstein, will be temporarily able to escape the full effects of the economic and social crisis. This, of course, is at its sharpest in southern Europe. Even Cyprus is now faced with the possibility of a bailout or default over its huge banking crisis. But ‘Greece, Spain and Portugal’ can come to Northern Europe much quicker than is anticipated, even by the cadres of the CWI. An element of ‘South Africa’ could also be transported to Europe through a similar movement within the trade unions to overthrow and replace those leaders who refuse to organise the working class to resist the onslaught of capitalism.

Northern Europe

Sweden and Scandinavia as a whole is being dragged into the whirlpool of the crisis. Already 28% of young people are unemployed in Sweden. Moreover, industrial output in Sweden dropped by 4.1% in September. Overall unemployment is almost the same as Britain at 7.8%. Sweden was a testing ground in the 1990s in particular for the policies of neo-liberalism. Both social-democratic and right-wing governments have sought to continue this in the fields of health and particularly education. Opposition from workers is beginning to grow as factories close and resources that have been built up over a long time are transferred to Eastern Europe and elsewhere. The rotten and bureaucratic leaders who presently suffocate the trade unions in Sweden will face the most serious challenge for generations by a working-class which is beginning to stir into action. Big opportunities will develop for our section in Sweden in the next period. We already have a formidable record of struggle in what up to now has been a difficult objective situation.

he Danish social democrats are also at their lowest position in the polls for a century! The social-democratic Prime Minister who presides over this collapse is the daughter-in-law of the discredited Neil Kinnock, who led the attacks on us in the Labour Party in Britain in the 1980s on the basis that we were an electoral ‘liability’. He succeeded in losing every election he fought as leader of the Labour Party! Despite winning the election this year, his daughter-in-law seems likely to resume the family trend!

Germany, hitherto the economic powerhouse of Europe with one of the lowest unemployment rates in Europe, is nevertheless beginning to be affected by the crisis. Other beleaguered members of the EU look towards Germany to act as the locomotive to drag Europe out of the crisis. But they will be disappointed as slowing growth has meant that Germany’s ruling centre-right coalition has decided to put on the brakes and cut the government’s net borrowing requirement for 2013. The chill winds blowing from China and elsewhere have severely curtailed German exports. German capitalists up to now have retained labour in the expectation of a resumption of European and world growth but are now abandoning this policy, which could lead to a rapid increase in unemployment in Germany. The government also faces federal elections in September next year. Merkel will be compelled, if she is to retain power, to once more seek coalition allies, but this time it is unlikely to include the increasingly discredited Free Democrats. There is speculation that she may even share power with the Greens, who are now a pro-capitalist party, in a ‘black-green’ coalition. Such a combination, some analysts think, “might be the most conservative government since the foundation of the German federal republic”. Both parties agree now on the environment with Merkel supporting the scrapping of nuclear power and also on “strict fiscal discipline.” This indicates just how far to the right the Greens have moved. They would still prefer a ‘red-green’ coalition with the SPD and the two parties already share power in a number of states. But the SPD is stuck on around 30% in the polls, while the Greens are around 12-15%; therefore at present it seems possible that any coalition with a majority would have to include the CDU. The involvement of the SPD and Greens in government, whether together or separately, could open up space for the development of Die Linke – within which we work – which could take on flesh on condition that it develops a serious left programme, which is the only way to find a big echo amongst the working class in the changing situation in Germany.

These abrupt changes in the economic fortunes of European countries are also reflected in the political about turns and convulsions that we have seen in a number of countries in the last period. The elections in the Netherlands resulted in a ‘centre-left’ coalition government of the liberal VVD and the Labour Party, which then almost immediately faced a rapid deterioration in the country’s economic position. The government introduced an austerity programme and met with a mass outcry.

The final formation of a national government in Belgium 541 days after the June 2010 election has not brought stability. Last October’s local elections saw a further big advance by the Flemish nationalist NVA. At the same time, there have been regular trade union protests, including a one-day general strike last January against job cuts and threatened attacks. Belgium was the only northern European country which saw significant strikes take place on 14 November, protests fuelled by the sudden announcement of the complete closure of the Ford plant in Genk. In both parts of Belgium, notwithstanding the continuing efforts of the Francophone PS to maintain a ‘worker-friendly’ face, there is growing discussion in the trade unions on the need for a new political force to present the working class.


In France, François Hollande and the Socialist Party won a majority in the presidential election and a left majority in the National Assembly just six months ago. However, Hollande has flip-flopped on crucial issues affecting the working class, first appearing to rule out austerity and then introducing severe cuts. He then proposed a wealth tax only to water this down when it met with opposition from French capitalists who were threatening to leave the country. Consequently, his standing in the polls collapsed and he is now at 36%, a record decline in popularity for presidents in the Fifth Republic after six months in office.

France also faces a severe economic decline, in particular manufacturing industry contracting to a level perhaps equivalent to Britain, which is now in the second or third rank of industrial powers due to the devastation wreaked by Thatcher in the past. Big class battles loom as workers react to an avalanche of redundancies – typified by the 6,000 Peugeot workers in the Paris region and the steel workers who are facing the sack. The political alternative on the left remains as vital as ever, particularly as the threat from the far-right National Front endures and has even grown. The NPA no longer offers a profitable field of work. This may change if a proper balance sheet is drawn up of its failure to seize the initiative on the left in the past, lessons are learned from this and it establishes the basis of a small mass party. The shift to the right of the Socialist Party and the failure to counter this by the left forces may lead to a revival of the NPA but at the moment this is far from taking place.

The ‘Left Front’ of Mélenchon has not yet developed into a serious opposition force. There are also many independent struggles taking place like the virtual regional revolt against a new airport in the West of France. At this stage the Left Front and Melenchon, its main spokesperson along with the PCF, have not yet built a real opposition to Hollande or intervened in those struggles which have taken place. However, this may change and we need to be prepared for important developments including around the Left Front.


Europe is the key to the world situation at the present time, where the class struggle is at its sharpest and with the greatest opportunity for a breakthrough for left and revolutionary forces. But if this is so, then Greece is therefore the key to the situation in Europe, with Spain and Portugal not far behind in the chain of weak links of European capitalism. We have carried extensive material on the website and in the newspapers of the different national sections charting the explosive developments in Greece over the last period. As Trotsky said of Spain in the 1930s, not one but three or four revolutions would have been possible if the Greek workers had a farsighted leadership and mass party at their head. A Greek computer programmer on the day of the recent general strike commented to the Guardian newspaper in Britain: “Personally, I’m amazed there hasn’t been a revolution.” British TV also commented that just 3% of the population actually supports the austerity measures of the government and the troika. With all the agonies and the pain that the Greek people are being forced to endure, by the end of the present austerity programme the debt of Greece will still be 192% of GDP! In other words, there is absolutely no chance that this debt will be paid. Nevertheless, endless austerity is the future that capitalism has decreed for the Greek people.

All the conditions for revolution are not just ripe but rotten ripe. 19 general one-day strikes out of which four have been 48 hour strikes and the rest 24-hour strikes testify to the colossal reserves of energy of the Greek workers and their preparedness to resist. However, they have concluded that, in the teeth of what has been a magnificent struggle, the troika and the Greek capitalists have still not budged and it is therefore necessary to turn to the political front towards the idea of a left government able to show a way out of the crisis. This is despite the fact that there is scepticism towards Syriza and its leadership on the part of the masses. According to our comrades, significant sections of the masses are prepared to support Syriza, which currently receives as much as 30% in some of the polls, but are not prepared to join and actively engage within its ranks. There is an element of this in many countries. Big disappointment at the failure of the workers’ parties has led to extreme scepticism towards them, even those formally standing on the left. There is a willingness to support left formations and parties in elections, but not to devote time and energy to engaging in their ranks and building them. Workers have been disappointed in the past and fear being let down once more. This mood, of course, can and will be changed once they see these parties actually carrying out what they promise. Instead of moving in a leftward direction, however, left parties in general and SYRIZA in particular tend to move to the right, watering down their programme and opening their doors even to leaders of social democracy who have played an open strike-breaking role in the very recent period. Also, this partly depends on creating an attractive internal life of debate and discussion. Our participation within these parties is, in this respect, crucial.

In the circumstances of Greece, the flexible tactics employed by our Greek section, while remaining firm programmatically, meet the needs of a very complex situation. We have to have an eye not just for those left forces within Syriza but also to the sizeable forces outside whom, the comrades explain, in some cases are re-evaluating past political positions.

We cannot give a timescale as to when the present government will collapse – as it surely will – with the likely coming to power of a Syriza-led left government. But we have to prepare for such an eventuality with the aim of pushing such a government towards the left, while at the same time helping to create democratic popular committees which can both support the government against the right but also pressurise it into taking measures in defence of the working class. It is not beyond the bounds of possibility that a new significant semi-mass force can emerge through the tactics in which we are presently engaged.

This will involve not just a concentration on developments on the left and in the workers’ parties but also against the danger posed by the far right and specifically from the rise of the fascist Golden Dawn, whose support recently rose to 14% at one stage in the opinion polls, but has now declined to around 10%. One of the reasons for this is the formation of mass anti-fascist committees, which we have helped to initiate and have drawn in workers, youth and refugees, some, the comrades inform us, Greek refugees or their descendants from Asia Minor. This work assumes exceptional importance and could be a model for the kind of situation that may confront sections in many other countries in the future.

If the working class and the left fail to carry through a socialist revolution, history attests to the fact that they will pay a heavy price as a consequence. The social tensions which exist in Greece cannot be contained forever within the framework of ‘democracy’. There is already a veiled civil war with more than 90% of the population pitted against the ‘one per cent’ and this can break out into an open conflict in the future. Some far-right elements in Greece have mooted the idea of a dictatorship but this is not immediately on the agenda. Any premature move that seeks to emulate the 1967 military coup could provoke an all-out general strike like the Kapp putsch did in Germany in 1920 and a revolutionary situation. Also a coup would not be acceptable at this stage to imperialism, the ‘international community’, in this era of ‘democracy and conflict resolution’.

The capitalists, in the first instance, are more likely to resort to a form of parliamentary Bonapartism, like Monti’s government in Italy but more authoritarian. The fraught economic and social position of Greece will demand a much firmer and more pronounced right wing government than in Italy, with the powers to overrule parliament in an ‘emergency’. If this does not work and a series of governments of a similar character are incapable of breaking the social deadlock, and if the working class, through a revolutionary party, fails to take power, then the Greek capitalists could go over to an open dictatorship. We have to warn the working class that we still have time in Greece but we have to utilise this in order to prepare a force that can carry through socialist change. The response throughout Europe to the strike on 14 November illustrates how the struggles of the working class are bound together. If the Greek workers were to break the chain of capitalism and appeal to the workers of Western Europe, at the very least to those in southern Europe, there would be a big response to the call for a socialist confederation – probably involving Spain, Portugal and maybe Ireland in the first instance, if not Italy. It is this approach that must inform the work of our splendid Greek section in a period that is opening up.


Spain is not that much behind Greece in terms of workers’ struggle against the eye-watering austerity which the right-wing PP government, backed by the troika, is attempting to implement. One in four of the population of Spain and Greece are unemployed, with more than 50% of young people out of work. These figures are similar to those witnessed during the 1930s’ US depression. Of course, up to now there has been a safety net in place, both from the state and families, but those reserves are rapidly disappearing. When pensioners, for instance, have been expelled from care homes because of the programme of austerity, poverty-stricken families welcome them back into the fold because, ironically, the pension of the elderly relative – meagre though it is as well as being rapidly devalued by cuts – can nevertheless help out with family finances! Many grandparents are paying their children’s mortgages with their state pension! The banks and the government have pursued a draconian policy whereby those who fall behind with just a few payments – often resulting from job losses – are evicted; 350,000 Spaniards have met this fate over the last four years. This means that the Spanish banking system has, in effect, pursued a policy similar to the sub-prime mortgage disaster which was a trigger for the downfall of the banks internationally and ushered in the present world economic crisis. This ensures that the Spanish banks and the government which backs them are extremely unpopular.

The result is that the struggles of the Spanish working class have been intensified and are expressed in many battles, culminating in a series of bitter general strikes in which millions have flooded the streets of Spanish cities from Madrid to Barcelona and Valencia. One of the features in the period following the elections of 1936, which brought the Popular Front government to power and the outbreak of civil war in July of that year, was that every city experienced its own general strike and some more than one. This was the unmistakable sign that the working class was preparing to resist the civil war preparations of the Spanish capitalists and the army. Spain is not as yet at this stage, but the working class, the overwhelmingly dominating force in society, is demonstrating its refusal through the strikes to accept the huge burdens of this crisis, which is not of its making. The struggles of the Spanish workers have undoubtedly helped to reinforce the Greek workers in their battle against austerity.
National question

At the same time the economic crisis has acted to resurrect the national question not just in Spain but in other countries of Europe: Scotland, Belgium and some other countries. Even where the national question has appeared to have been resolved, it can re-emerge as a consequence of the crisis which is unfolding. Even in Italy this could be the case. For example the former Austrian region of Alto Adige/South Tyrol could see the re-emergence of national movements, possibly ultimately leading to complete separation.

It would not be possible in such situations for us to have success without a correct position on the national question. In general, we stand in defence of the national rights of all oppressed nationalities. But this in no way means giving support to capitalist nationalism, whose aim is to split and divide the working class. Indeed, a vital task for Marxists is to unmask the bourgeois nationalists of every stripe who wish to use the legitimate national aspirations of the people to reinforce their own position. Independence on a capitalist basis will not solve one of the problems presently confronting the working class; only through socialist change and the idea of a socialist confederation can the aspirations of nationally oppressed peoples be realised.

Catalonia is a case in point where the capitalist politician Mas and his nationalist party, Convergència i Unió, have recently tried to ride on the back of the pro-independence movement, and in new elections attempted to increase their electoral support. And yet before the recent upsurge of the nationalist movement, he pursued an austerity programme which brought him into a sharp collision with the working class of Catalonia. This was a dramatic failure for the CiU, which lost 12 seats in the elections, amid a shift to the left, with significant gains made by the CUP, a new anti-capitalist pro-independence force. The task of building a united front of the left workers’ organisations starting from a united struggle against austerity, on the basis of the support for the right to self determination and the fight for free and voluntary socialist confederation of the Iberian peoples, is of particular importance in this new situation. Support particularly for the idea of separation notoriously ebbs and flows depending upon the concrete circumstances. The Basque country, which experienced the biggest nationalist movement in the past, now looks as though it is behind Catalonia cool on the idea of immediate and complete separation.

The task of creating an important point of reference in each country for Marxism remains one of the most vital for the CWI. It is linked to the creation of genuine Marxist parties within broad organisations of the working class, where they exist. The IU appeared to represent the best hope in Spain for achieving this. However, it has moved to the right recently, but nevertheless could probably still be a vehicle for the working class in the struggles to come. Spain remains of critical importance for the success of the CWI in the workers’ movement in Europe.


So too does Portugal. The outpouring of opposition and the reaction of the masses, with upwards of 600,000 on the streets accompanied by a march on the presidential palace when the government thought it could just announce savage austerity measures and they would be docilely accepted, compelled the government to step back initially. Nevertheless, it has proceeded with its austerity programme, which in turn has provoked the indignation of the masses with demands for another general strike. Moreover, the traditions of the Portuguese revolution of 1974 are in the process of being revived. It is highly significant that soldiers, including some officers, have marched in mass demonstrations in opposition to the government. The thread of history which was broken by the pushing back of the gains of the 1974 revolution, particularly during the 1980s and 1990s, is being re-tied by a new generation. We must reach them and bring them into the ranks of the CWI.


In Italy, the discrediting and virtual dissolution of the Centre- Right and Centre Left, including Berlusconi’s party means that the Italian bourgeois does not have a firm political instrument through which to rule. Berlusconi does not look as though he will recover from the latest round of convictions and his party could split into pieces. The Democratic Party is shaken by scandals and the struggle for power inside the leadership. A split is taking place inside Italia dei Valori, the populist party and the ex-magistrate Antonio Di Pietro. The vacuum that exists has been partially filled by the comedian Beppe Grillo and his Five Star movement, which has managed to win 20% of the votes in local elections where it stood. However, his movement is not just a joke; he has been forced to outline a programme, with some quite radical demands in the Italian situation, although he does not say a word on wages and workers’ rights. Of course, it does not represent a genuine attempt to create a mass workers’ movement but it is a reflection of the extreme volatility and frustration that no such party exists as yet in the country. The old is dying and the new has yet to be born. The RC is virtually extinct, a discussion on the need for a new left party is developing but, at this stage, no serious force with roots in the working class has yet been able to step into the vacuum on the left. Our comrades, who have been very successful in maintaining and extending a national organisation, can play a key role, particularly with the roots that they have built in the trade unions, in constructing the framework of a new mass workers’ and revolutionary party. We should never forget the great revolutionary traditions in Italy that, amongst the big countries of Europe, rival only that of France itself.

The government of Mario Monti has met with relative success in its attempts to undermine and attack the conditions of the working class, although he has not completely succeeded in eliminating the famous ‘Article 18’ of the constitution, which enshrined some of the gains made by the workers’ movement in the past. The €2 trillion public debt is the highest in Europe as a proportion of GDP after Greece. Living standards are being cut and unemployment has climbed and for the youth it is not all that much different now to Greece or Spain. There is also growing hostility to austerity, manifested in recent demonstrations. In some factories (Finantieri, ILVA, Alcoa) workers’ reaction against the threat of job losses has been very powerful. The youth seem very determined to fight back. On the other hand the lack of a political opposition to Monti’s agenda, the weakness of the unions and also the pressure of the objective situation on the most important layers of the working class are preventing a more generalised reaction to fight the cuts and austerity measures and those struggles that have taken place seem like “shots in the silence”. Therefore our comrades in Italy fight to support those struggles and also struggle to over come them being isolated.

The longer that ‘super Mario’ has gone on, the more the latitude which was extended to him at the beginning – not so much by the working class but by the leaders of the workers’ organisations – has begun to erode. Therefore, he faces being sidelined politically or new elections will have to take place which gives him the opportunity to play a pivotal role. In preparation for this, capitalist industrialist Luca Cordero di Montezemolo has assembled a platform, out of which could come a party, which it estimates will get 15% of the vote for Monti. As to his programme, he declared at his launch rally attended by 7,000 in Rome: “No one is asking commitments of me, and today I am not giving any.” In other words, officially “I stand for nothing!” but in reality for further austerity. It is hoped that in the post-election period it will be possible for Monti and his ‘party’ to construct a ruling coalition, probably including the ex-Communist Party, the Democratic party, which stands at 25% in opinion polls.

This phenomenon of the sudden mushrooming of figures or parties into national prominence has been repeated elsewhere, not just in Italy. The discrediting of the main parties, including the ex-social democracy, has produced parties standing on a single issue, like the new National Health Action Party in Britain, composed largely of health professionals who would normally go behind the Labour Party in defence of the National Health Service. The fact that such an organisation can come into being is itself a crushing condemnation of the lack of confidence or support for the existing parties. The most recent and bizarre expression of this was in Japan. The nationalist Sunrise party rose and fell in four days: “a shorter lifespan than such classic Japanese emblems of impermanence as the cherry blossom”!


Japanese capitalism now, like the rest of the world, is wrestling with its most severe crisis since-1945. Having experienced the lost decade of the 1990s – some say two lost decades – Japan is facing a new recession, in reality a deepening of the recession, with an almost 1% drop in output in the July to September quarter, the biggest decline since the tsunami hit the country in 2011. Even the Japanese Prime Minister Noda, has described this contraction as “severe”. This came as a particular blow to Japanese capitalism because, despite its huge debts – now at 250% of GDP – it seemed to have recovered from its economic trough in 2010, with twice the average growth rate of the G10. New elections have been called but they will not solve any of the fundamental problems facing Japanese capitalism. We can look forward to the re-emergence of the working class of Japan through the unions and a new mass political party.

India, alongside many other countries in Asia, has been severely affected by the world economic crisis with growth declining from a turbocharged average of 9% in the past to, at best, 5.5%. The problems of India are manifest. On top of the grinding poverty, which was the grim reality for the majority of the population, particularly in the ocean of rural villages, during the ‘India Shining’ period, the people must now grapple with a slowdown. This brings in its wake power cuts, hunger and, in the last period, a power failure that left 600 million Indians without electricity in history’s biggest blackout. What was the response of the government to this? To propose an increase in fuel prices! In fact, the period acclaimed as economic ‘ India shining’ now turns out to be the time “of the greatest economic skulduggery” [Jayati Ghosh, Guardian]. The Manmohan Singh Congress-led government opened the door to Wild West style neo-liberal capitalism which trampled in the dust the safeguards protecting workers and the poor – in short, the introduction of a massive form of crony capitalism. The ‘first family’, the Gandhis, have been intimately caught up in the scams and scandals that have resulted in huge state losses, which in turn have reduced the supply of public resources for the most basic needs of citizens, particularly the poor. The result is a growing wave of opposition against corruption, price rises and other neo-liberal policies such as the introduction of retail giants like Walmart and Tesco, supposedly to reverse falling growth. This was met by a 24-hour strike in many cities across the country in September. The opposition, involving the landless, has in turn given the opportunity to the Maoists to establish a small base in the rural areas. The move to the right, on the other hand, of the leaders of the ‘Communist’ parties means there is an absence of a political voice for the huge working class of India. The beginning of confusion and splits among the leadership of the Communist Party of India (Marxist) is also an indication that among the working class and youth the numbers searching for a clear socialist alternative will grow faster. It remains our task to intervene and acquire sufficient forces which will allow us to play a critical role in the formation of a new party, which can become a point of reference for all of those workers prepared to struggle.

In contrast to India, Pakistan has been faced with strong elements of social disintegration and collapse resulting in a horrendous situation for the masses. The strong tendency towards ‘Talibanisation’ is a measure of this development. The working class has not yet been able to emerge as a leading force with its own independent alternative to the crisis which engulfs the country. The features of counter-revolution are dominant at this stage, although not in the form of open military intervention. There are strengthening features of nationalism in the Sind and other provinces. The forces of the ‘left’ in general, apart from our comrades, are silent at this stage. There is currently a wave of pro-market, pro-neoliberal propaganda. Elections planned for next year are likely to see a weakening of the PPP and a strengthening of the PML and the religious parties. Faced with such a situation, the task of the Marxists is to prepare the most politically aware and combative sections of the workers and youth for a favourable situation which will eventually emerge. Our comrades have played a heroic role in fighting against these features of counter-revolution and defending the ideas of socialism.

Sri Lanka is, historically, a vital base for the CWI. It is a huge achievement of our heroic Sri Lankan section and its cadres that we have managed to sustain our party in one of the most difficult objective situations, both in the region and throughout the world. The 30-year civil war, which could not fail to polarise the population on ethnic lines, made it difficult to advance and popularise our social programme. We nevertheless steadfastly put forward a principled position on all the issues affecting the working class, calling for unity on the national question, defending the national rights of the Tamils, while at the same time opposing the methods of the Tamil Tigers. A guerrilla force based upon 18-20% of the population and, moreover, using indiscriminate terroristic-type methods could not hope to win a military victory against a regime based upon 80% of the population. Particularly as this regime increasingly drew on support from outside powers – India, China, Pakistan and the US – each sought to further their own ends by backing the blood-soaked Rajapaksa regime. Without this, particularly supplying the regime with overwhelming military superiority, it is unlikely that the Sri Lankan army by itself would have won such a complete victory in May 2009.

The brutal end to the war, with the indiscriminate killing of ordinary Tamils and then the killing of the Tamil Tiger leader himself after he had surrendered, nauseated world public opinion. It has now been revealed by the UN itself that its representatives stood by while this happened despite the fact that they were supposed to be a buffer between the last remnants of the Tigers and the Sri Lankan army. There is growing international recognition that the president and his brother, the defence minister, are war criminals. Like Pinochet, Rajapaksa was threatened with an international arrest warrant for war crimes if he had gone ahead and visited London recently. This even had an effect on his international capitalist backers, who now fear the tops of the regime may appear in the dock accused of these crimes just at a time when the Sri Lankan post-war boom is running out of steam.

Even the growth rate of the economy at 6% has not prevented rising public discontent over the increased living costs, which has in turn provoked strikes and protests. Even though there is relief that the war has ended, the repressive measures of the regime – with death squads using the dreaded ‘white van’ method of seizing opponents and then murdering them – provokes opposition and outcry. The government is seeking to colonise the north and east with Sri Lankan military-linked Sinhala families encouraged to go to these regions to supplant the original Tamil population. At the same time, the aftermath of the war has led to a questioning of previous political positions of organisations like the JVP, which has resulted in a split and the formation of the Frontline Socialist Party. We have discussed with them, but not yet reached common political positions on such crucial issues as the national question, and the programme and tactics that can be used against to topple the Rajapaksa regime. Even capitalist commentators recognise that the president and the governing circle are looking towards the model of East Asia, “Where nothing gets in the way of development.” [Financial Times] In other words, junk any semblance of a real parliament and proceed towards a Singapore-type model – a dictatorship with a thin veneer of ‘democracy’.

This is bound to clash with the Sri Lankan masses with their democratic tradition, especially through the trade unions, the right to vote, etc. It is not an accident that there have been demonstrations in protest at the possible impeachment of the chief justice, and that judges and lawyers boycotted courts after an assault on another leading judge, indicating the suspicion that the regime is moving in a dictatorial direction. University teachers also took prolonged strike action in protests on attacks on education. At the same time, the regime remains the most militarised in the region. The army tops are also beginning to act like their counterparts in Pakistan in their growing appetite for running golf courses, racecourses and even shopping malls. This is bound to provoke a revolt against the regime. This can open up a space for the development of our organisation, which together with others, can draw on the great revolutionary experience of the Sri Lankan masses to create a force that will open a way to the establishment of socialism in the island, which together with the masses of India can lead to a socialist confederation of the region.

Another regime and government which seems in the past to have remained impervious to the winds of change is Malaysia. It has been a capitalist ‘star performer’ with a growth rate of 5.4% in the second part of this year. For the full year 2012, it is estimated that the growth rate will be 4.6%, a record which compares favourably with the rest of Asia. The stock market is at a record high and there appears to be a ‘boom’ in the capital, Kuala Lumpur. Nevertheless, a slowdown is inevitable in Malaysia, because of the falling growth rates of China, upon which it is economically dependent like most of the countries in Southeast Asia. Moreover, Malaysia and Asia as a whole will not be immune from the effects of the crisis in the eurozone. Malaysia’s vulnerability to outside shocks was highlighted when the price of palm oil – its key export – plunged because of fears of oversupply. The government will be compelled to rein in its expenditure, which will impact on living standards.

An election must be called no later than April 2013. Like in previous elections, cash bribes have been handed out by the government. This was done in order to ward off the threat posed by the opposition Pakatan Rakyat coalition in the upcoming elections. The UMNO-led ruling coalition lost its two thirds majority in the parliament for the first time at the last poll in 2008. It is therefore possible that the opposition could win and this will, in turn, open an entirely new situation in Malaysia. The country has been in the grip of the ruling coalition since independence from Britain in 1963, which maintained its rule through ethnic division by playing off the majority Malays against the Chinese and Indians. That policy and straitened economic circumstances will not work to the same extent today. In this new period, big opportunities will open up for the CWI section which is a small but very impressive group of comrades. We seek to work in broader organisations in order to extend our influence.

Moreover, we need to carry our ideas to the region, to Indonesia and the Philippines in particular, which is a task to be jointly undertaken by the comrades in Malaysia and Australia, with the help of other comrades in the region. Like Africa, acquiring a firm base throughout Asia is a prime task for the CWI. US imperialism has clearly identified Asia as a key area – more important than Europe, for instance, strategically and economically – as the first visit of Obama after his victory in the US presidential election was made to the region. This was partly to reaffirm the economic stake of US imperialism in the region but also served as a warning to China of the importance of US military strategic interest. It was felt by the US to be necessary because of the new military assertiveness of China, which was revealed in its recent naval clashes with Japan over uninhabited disputed islands. Japan, as a consequence of this and previous clashes with China, is beginning to build up its military forces, of course, for ‘defence’ alone! This means that Asia will become a new and dangerous theatre of military conflict with the rise of nationalism and the possibility of outright conflict, where the contending powers will be prepared to confront each other, with weapons if necessary, in order to enhance their influence, power and economic stake. We must counter this by stressing the unity of the peoples of the region and promoting the idea of a socialist confederation.


China is the colossus of Asia, the second power in the world after the US. How it develops will exercise a big, perhaps decisive, effect on the region and the world. And China is certainly at the crossroads, as its ruling elite well understands. Like many a ruling group in history, it feels the contradictory tensions swelling up from below and is unsure how to deal with them. Chinese scholars described the current situation of the country to the Economist as “unstable at the grassroots, dejected at the middle strata and out of control at the top”. In other words, the ingredients of revolution are brewing in China at the present time. The spectacular growth rate of 12% is a thing of the past. It is now like a like a car stuck in snow: the wheels churn but the vehicle does not advance. Growth has probably contracted to between 5% and 7%. The regime claims that there has been a certain ‘recovery’ but it is not expected to return to double-digit growth. This will automatically affect perspectives for the world economy. A growth rate above 10% was only possible through a massive injection of resources, at one-time amounting to a colossal and unprecedented 50% of GDP invested into industry. This, in turn, generated discontent: resentment against growing inequality and environmental degradation as well as communally-owned land illegally snatched by greedy officials.

These and the sweatshop conditions in the factories have generated enormous opposition from the masses with 180,000 public demonstrations in 2010 – and it is has grown since then – compared to the official estimate of 40,000 in 2002. The removal of the iron rice bowl and attacks on healthcare and education have added to this discontent. This has forced the leadership to reintroduce a modicum of health cover. How to handle this volcano and which route economically to take haunts the Chinese leadership. The village of Wukan rose a year ago and successfully fought running battles with the police to reclaim land which had been stolen from them by the local bureaucracy. This was symptomatic of what lies just below the surface in China, a subterranean revolt that can break out any time. On this occasion, the local officials retreated but, also, the protesters did not follow through with their movement. It seems that this incident and many others are “small uprisings that continually bubble up across China”. [Financial Times]

Many of the protagonists naïvely believe that if only the lords in Beijing knew the scale of corruption, they would intervene to stamp it out. Something similar occurred in Russia under Stalinism. The masses initially tended to absolve Stalin of any responsibility for corruption of which he was ‘unaware’. It was all down to the crimes of the local bureaucracy but not Stalin himself. But the arrest of Bo Xilai and trial of his wife have helped to dispel those illusions. He has been accused of abusing his position by amassing a fortune, accepting “huge bribes “, and to have promoted his cronies to high positions. Bo, as a member of the top elite – a princeling, a son of a leader of the Chinese revolution – is accused of complicity in murder, bribery and massive corruption. This naturally poses the question of how he was allowed to get away with this for so long. In reality, it was not these crimes – true though they probably are – which led to his arrest and impending trial. It was because he represented a certain danger to the top elite – in going outside this ‘magic circle’ – and campaigning for the top job. Even more dangerous was that he invoked some of the radical phrases of Maoism, associated with the Cultural Revolution. In so doing, he could have unconsciously unleashed forces that he would not be able to control, which could go further and demand action against the injustices of the regime. And who knows where this could have ended?

The Chinese regime is in crisis. It is quite obviously divided as to the next steps – particularly in relation to the economy – which should be undertaken. One princeling commenting to the Financial Times put it brutally: “The best time for China is over and the entire system needs to be overhauled.” Bourgeois commentators in journals like the Economist, the Financial Times, the New York Times, etc., have recently resorted to the terminology which we have used in describing China as ‘state capitalist’. They do not add the proviso that we use: “state capitalist, but with unique features”. This is necessary in order to differentiate us from the crude analysis of the SWP and others, who incorrectly described the planned economies in the past in this fashion. There is complete agreement within our ranks on the direction of travel of China. The capitalist sector has grown at the expense of the state-owned enterprises (SOEs) in the past. But recently, and particularly since the stimulus package of 2008, there has been a certain recentralisation with economic power tending to be concentrated more in the state sector, so much so that SOEs now have assets worth 75% of total GDP. On the other hand, the Economist described China in the following fashion: “Experts disagree on whether the state now makes up half or a third of economic output, but agree the share is lower than it was two decades ago. For years from the late 1990s state-owned enterprises (SOEs) appeared to be in retreat. Their numbers declined (to around 114,000 in 2010, some 100 of them centrally controlled national champions), and their share of employment dropped. But now, even while the number of private companies has grown, the retreat of the state has slowed and, in some industries, reversed.”

It is clear that a ferocious discussion is taking place behind closed doors amongst the elite. ‘Reformers’ favour a more determined programme of dismantling the state sector and moving more and more towards the ‘market’. They are proposing to lift remaining barriers to the entry and operation of foreign capital. The new ‘leader’ Xi Jinping, despite his ritualistic incantation of “socialism with Chinese characteristics”, is rumoured to support the reformers. On the other hand, those who have proposed an opening up, both in the economy, but also with limited ‘democratic’ reforms, seem to be sidelined. Studies have been made of how former dictatorships like South Korea allegedly managed the ‘cold transition’ towards ‘democracy’. These took place when the boom had not exhausted itself and even then was against the background of mass movements. China’s proposed ‘transition’ is taking place in the midst of a massive economic crisis. China’s rulers are rumoured to be avidly studying Gorbachev’s role in Russia. He began intending to ‘reform’ the system and ended up presiding over its dismantlement. Serious reforms from the top will provoke revolution from below in today’s China. It cannot be excluded that a period of very weak ‘democracy’ – but with power still in the hands of the old forces, like in Egypt today with the army and the Muslim Brotherhood in power – could develop after a revolutionary upheaval in China. But this would be merely a prelude to the opening of the gates to one of the biggest mass movements in history. Our organisation has achieved miracles and we must build on this in preparation for the great events to come.

Latin America

Latin America has not been in the front line of the class struggle in the recent period. The economic growth which affected the main economies like Brazil, Argentina, Chile and others was based on the export of mineral commodities to China and other Asian countries. As Brazil illustrates, the economic slowdown in these countries is now dragging down the economies of Latin America. The increased dependency on the export of commodities like soya, copper, gas, etc., has weakened the industrial base of Brazil and other countries. They will enter a new phase of economic crisis in a weakened position in their domestic economic base.

The strike wave which has swept Brazil as the economy has slowed down has also been mirrored in other countries like Argentina and even Bolivia. During the period of economic growth, workers gained in confidence as the threat of mass unemployment was not felt. Workers in Brazil demanded their share of the profits. The changed economic situation in Latin America is already opening up a new phase of struggle by the masses. The recent general strike in Argentina graphically illustrates this development. Chile, the former showcase economic model, has been shaken by the social earthquake of the student and youth movement. This has transformed the social and political situation.

There is a generalised crisis of the traditional right-wing parties of capitalism in many countries. The ruling class of many countries have been compelled to rest on the ‘radical nationalist’ movements or the former workers’ parties like the PT in Brazil. However, Cristina in Argentina and Dilma are being compelled to attack the working class as the economic crisis begins to hit Latin America. While PSOL continues to exist and is an important area of work for us, it remains uncertain how this force will now develop. The significant gains made by the party in the recent elections have opened a new crisis in the party as the right-wing has opted to form agreements with bourgeois parties.

A new phase has opened in the ‘Andean’ countries. Chavez’s election victory in Venezuela, which we welcomed, does not mean a simple continuation of the situation under the previous Chavez governments. While workers and the masses rallied to Chavez to defeat the right-wing bourgeois, there is growing discontent and anger at the weakness of the Chavez regime. A new phase of struggle and differentiation within the Chavista movement will open now, giving our small forces which struggles in isolation new possibilities and opportunities to make important gains. The Morales government in Bolivia has increasingly moved to the right since 2008 and attacked sections of the working class. In both Venezuela and Bolivia one of our central tasks is to spearhead the call for the building of an independent movement and organisations of the workers and youth. Events in Latin America in the next period will offer us new possibilities to strengthen and build our forces.


Four to five years into a devastating world economic crisis, we can conclude that there are very favourable prospects for the growth of the CWI. With the necessary qualification that consciousness – the broad outlook of the working class – has yet to catch up with the objective situation, it can still be described as pre-revolutionary, especially when taken on a world scale. The productive forces no longer advance but stagnate and decline. This is accompanied by a certain disintegration socially of sections of the working class and the poor. At the same time, new layers of the working class as well as sections of the middle class are being created – proletarianised – and compelled to adopt the traditional methods of the working class of strikes and trade union organisation. The potential power of the working class remains intact, although hampered and weakened by the right-wing trade union leadership as well as by social democracy and the communist parties.

We have retained and in some cases strengthened our overall position in terms of membership and especially increased influence within the labour movement. But there are many workers who are sympathetic to and watching us, and on the basis of events and our work can join us. We are poised to make important breakthroughs – including leaps in membership – in a number of countries, as indicated by the foregoing analysis. We must face up to the situation by educating and preparing our cadres for the tumultuous next period in which great opportunities will be presented to strengthen the organisations and parties of the CWI and the International as a whole.