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Across Globe, "Age of Austerity"
Preparing Seismic Convulsions
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Dec 4, 2012
By Socialism Today |
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We are
living through one of the most dramatic periods in history.
Extracts from the draft document on world perspectives that will be
discussed at the December meeting of the International Executive Committee (IEC)
of the Committee for a Workers’ International (CWI)
 This extract from the draft was taken by Socialism Today, magazine of the Socialist Party (CWI England &
Wales) for its December edition.
We will publish the entire amended document here, on socialistworld.net,
after the IEC meeting in the middle of December.
The Greek workers, followed by the Portuguese and Spanish, are in the
vanguard of the movement against 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 epic general strikes, they have resisted. They have
yet to create a mass party and leadership worthy of them in the battle between
labor and capital that will dominate the early 21st century. It is the task of
the Committee for a Workers’ International (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.
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.
At the same time, a new regional war or wars are 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. Socialists cannot
support either Assad or the opposition, but have to steer a clear independent
path towards those masses we can reach with a class programme and perspective.
Socialism Today
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. But neither do we 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.
South African miners show the way
NOTWITHSTANDING THE influence of geopolitical factors such as wars 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 symbolized by the magnificent reawakening of the South African working
class led by 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. An element of ‘South Africa’ could also be transported to
Europe through a similar movement within the trade unions to overthrow those
leaders who refuse to organize the working class to resist the onslaught of
capitalism.
Following the miners other sections of the South African working class
resorted to action in a strike wave which is currently the biggest and bloodiest
in the world. This has also been characterized 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 the
assistance of the Democratic Socialist Movement (DSM – the South African section
of the CWI) – 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. 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.
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 – 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. A big polarization 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
African-Americans, of course, while significant sections of unionized 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’. He will not, of course, be able to do this because of the
character of this economic crisis, which will be drawn out.
The marvelous result of the Socialist Alternative candidate in Seattle for a
Washington state House of Representatives seat, with a splendid 28% of the
votes, was a triumph not just for the American comrades but for the whole of the
CWI. It was 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 vote is a harbinger
of what can be expected elsewhere, particularly in South Africa and Europe in
the next period, and shows 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 favorable
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 socialist party of the working class. Of course, all
perspectives are contingent on how the economy develops in the US and throughout
the world.
World economy faces ‘chain of crises’
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 stands between
you and the pitchforks”. But in the election, this did not earn him the support
of the American bourgeois as a whole who favored Romney in the main. This just
goes to show that a class does not always recognize 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.
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. 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. 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 in the development
of capitalism, and particularly in driving forward the productivity of labor.
The authors of the above study concluded that there have been “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. 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 do not fundamentally
change labor 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”.
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 emphasize the limitless possibilities – evident
even today – if society was organised on a more rational, planned way through
socialism.
Europe’s intractable crisis
THE ECONOMIC CRISIS in Europe is the most serious facing world capitalism. So
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 (ECB). On the one side the ECB has
sought to implement, like the US Federal Reserve and the 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,
privatization, 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
born-again 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-humorously, 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 largess 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 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.
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 recognizes 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.
Greece is the key
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. 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 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. Nineteen
one-day general 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 skepticism towards Syriza and
its leadership on the part of the masses. 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 skepticism 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 have tended to move to the right, watering down their programme and
opening their doors even to ex-leaders of social democracy who have played an
open strike-breaking role in the very recent period.
In the circumstances of Greece, the flexible tactics employed by our Greek
comrades, 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 sizable forces outside, whom 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 pressurize it into taking
measures in defense 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. This work assumes exceptional importance and could be a model for
the kind of situation that may confront the working class 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 utilize 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.
China at the crossroads
US IMPERIALISM HAS identified Asia as a key area – more important than
Europe, for instance, strategically and economically – shown by the fact that
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 but also served as a warning to China of the importance of US
military strategic interest. It was felt 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 is beginning to build up its
military forces, of course, for ‘ defense’ alone! This means that Asia will
become a new and dangerous theater 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.
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 being 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 naively 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 the CWI has used in
describing China as ‘state capitalist’. They do not add the proviso that we do,
of ‘state capitalist, but with unique features’. This is necessary in order to
differentiate our analysis from the crude position of the SWP and others, who
incorrectly described the planned economies in the past in this fashion. The
direction of travel of China is clear. 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
recentralization 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 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’ favor 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 rumored 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 side-lined. 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 rumored 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.
Conclusions
FOUR TO FIVE years into a devastating world economic crisis, we can conclude
that there are very favorable prospects for the growth of Marxism. 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 has been
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 – proletarianized – 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.
The CWI has not made a decisive breakthrough as yet in any country or
continent. However, we have retained our overall position in terms of membership
and especially increased influence within the labor movement. There are many
workers who are sympathetic to and watching us, and on the basis of events and
our work can join us. We must face up to the situation by educating and
preparing our supporters 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.
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Large number of demonstrators clashed with state forces
outside the presidential palace in Cairo on 4 December over attempts by
President Mursi to grab new powers. Marchers chanted that "the people want the
downfall of the regime", and held placards bearing slogans of "no to the
constitution". It was reported that during the clashes Morsi fled the palace
from a side gate in a convoy. 
