No 1487 23rd February 2016
Economic catastrophe gathers pace exactly as only Leninism has warned the working class. Smoke-and-mirrors QE collapse is unstoppable reality of Slump disaster 100 times worse than the Great Depression, not imposed for “ideological reasons” nor preventable by “anti-austerity” as the fake-“left” declares. Crash is built into production for private profit. Only complete overturn of all capitalism by all out class war can change things, establishing the dictatorship of the proletariat to build rational socialism. Just when ordinary minds begin to shake off decades of anti-communist brainwashing the fake-“left” retreats even more from building a disciplined but open polemic revolutionary party, dissolving into “left” Labourism and joining “anti-jihadism” demonisation. Corbyn and Sanders are hopeless new Allendes vulnerable to the capitalist counter-revolution as was fake-“left” lauded Chavism in South America. Capitalism turns to a new Hitlerism “Trump-eted” against scapegoats, preparing WW3 with meaningless “war on terror”. Confused jihadism is early sign of world revolution not “a new evil”
Donald Trump’s scarcely credible Nazi rants and bitter British Establishment euro-splits both confirm the colossal fears of the capitalist ruling class facing the resumption of the greatest ever collapse of their system.
The drive to World War Three has never been clearer, the need for a revolutionary grasp of the world never been greater, and the failure of the fake-“left” of all kinds to say any such thing never more sharply exposed.
The readiness of ordinary people to shake off the decades of anti-communist brainwashing is beginning to surface as the truly horrific nature of capitalism’s Slump and war disaster gets clearer.
But what is not being built is the revolutionary party, to stimulate, guide and lead the enormous debate which is stirring as the capitalist system sinks ever deeper.
It needs to reexamine all the great questions of world revolt, the lie of “parliamentary democracy” and above all the legacy of communism, its titanic 20th workers state successes and its revisionist leadership flaws and failures which saw ultimate (and pointless) Soviet liquidation.
The long suppressed and ignored need is for the revolutionary party to be built, to lead the struggle for the crucial theory needed at the heart of the fight to overturn this degenerate, greed ridden torture and massacre world system for good.
Mankind needs to build socialism, under the firm guidance of the working class taking and holding power, developing into the rational world of communism, where the flourishing and development of every individual is the basis for the flourishing of all society.
Complacency, denial of the crisis and woodenness are the overriding characteristics, offered instead by the reformists, Trots and revisionists, denying and denouncing the world revolutionary upheaval already underway and capitulating to the West’s “war on terror” hate campaigning being used to stampede public opinion against it, and into Third World War.
An immediate question is the foul atmosphere of racist demonisation and sub-violent scapegoating against “Moozlims and Mexicans” being whipped up in the US.
It is no joking matter, however much complacent middle class opinion might sneer at Donald Trump’s ill-fitting toupee, and declare that he is too “off the wall” ever to get elected.
So were Hitler and Mussolini.
The theatrical fascist tyrannies which capitalism turned to in Italy in the 1920s and Nazi Germany a decade later were equally derided in some quarters as buffoonery but they slaughtered the working class movement domestically and were the aggressive front for the universal drive into the devastation of the Second World War (which all of imperialism was pushing for to escape its crisis, egging Hitler on against the Soviet Union).
But tearing up the democracy fraud was a desperate move by an international ruling class facing near terminal collapse of its monopoly capitalist system in the Great Depression, paralysed by the “overproduction” contradictions of a system based on private ownership and its all consuming drive for private profit.
War was the capitalist “way out” as already tried with the 1914-18 slaughter and destruction (and the Franco-Prussian war of 1870 too) to destroy the surplus capital clogging the system and establish topdog imperialist dominance for further world colonialist plundering.
But it was much harder to get underway after the “never again” promises which had followed the revulsion at the Great War’s mud and blood horrors and because the terrible risk of Bolshevik revolution spreading which was triggered by the industrial slaughter, trench horrors and mass civilian deprivation.
So therefore weird jackboot mysticism and aggressive nationalism was needed to stir up war fever and petty bourgeois counter-revolution against domestic working class resistance, which had already seen three attempts at revolution after the humiliating defeat for Germany in the First World War.
Nazism ultimately failed but not because the working class came to understand how bad it was, calmly and “democratically” choosing something else, the idiot premise of the early 1930s “after Hitler our turn” slogan of the huge German Communist Party under Moscow’s revisionist influence, but because it was fought into the ground by the gigantic sacrifices of the USSR’s Red Army, Soviet “terrorist” partisans and civilian communist support and doggedness, excellently led and inspired, ironically, by the same Stalinist revisionism.
In 1941 it still retained some of the revolutionary momentum which established and developed the world’s first great workers state (before the deadening influence of Stalin’s revisionist philosophy, – and especially his mistaken 1952 post-war assessments of imperialism’s supposedly hamstrung future potential (see EPSR Book 21), completely smothered all Leninist grasp and revolutionary spirit in permanent “peaceful coexistence”, social-pacifism, and the “democratic road” nonsenses it led to, culminating in the eventual slide to complete liquidation by Gorbachevite delusions about the “free market”).
Second World War destruction(completing the unfinished business of the first War) gave capital, mostly from the victorious US, a breathing space to make profit again, but the relentless accumulation of surplus capital has stifled the system once more and deadly disintegration into world war is back on the agenda.
The world did not have to see shiny jackboots pulled on again for the degeneration back into outright fascist aggression to be clear; after a warmup for the nazi-NATO forces brutally pulverising the tiny Serbia remnant of Yugoslavia in 1998, the US Empire’s own presidency put on the Nazi mantle itself after the 9/11 New York attacks, barbarically imposing “shock-and-awe” civilian mass punishment butchery and torture on Afghanistan and Iraq and beginning the absurd “endless war on terror” (and anyone else opposing the US imperialists) declared by George Bush.
But it has not been going well for Washington.
Under Obama-ism the Empire has had to reign back from further direct war (though not from non-stop and greatly escalated indirect drone attacks on civilians, death-squad assassinations, Guantánamo incarceration, and proxy state terrorising) because it was defeated.
The ambition of re-establishing a compliant world network of stooge fascist “strongmen” to replace those “gone rogue” like Saddam Hussein, under the cyncial pretence of “rebuilding democracy” (an ever sicker hoodwinking nonsense) collapsed ignominiously as trillions of dollars poured into the sand and planeload after planeload of bodybags and flag-draped coffins returned home.
Unable to suppress the insurgency in Afghanistan and the Middle East, in fact massively increasing it, facing a war weary population at home hammered by the economic meltdown underway, there had to be a retrenchment.
The whole presidential “democracy” racket was almost toppled by humiliation from rising “terrorist” jihadist revolt and insurgencies, which for all their confusion, sectarianism and religious backwardness and self-destructive infighting, constitute the early turmoil of renewed world anti-imperialist struggle.
The near collapse of public credence in the presidency itself under Bush was staved off only by playing the PC black nationalist, feminist and pacifist cards (with Hillary Clinton), and by frantically printing money to conjure up the great smoke and mirrors illusion of “economic recovery”, forcing the global finance collapse outwards onto the rest of the world.
But that could never last and the crisis is about to implode again.
The US ruling class has to get back into war and Trump’s bizarre rise reflects its desperation, using the stampeding of crude xenophobia and scapegoating to whip up an atmosphere of crude and ignorant hatred and chauvinistic finger-pointing and blame, desperate to distract attention from the crisis.
The same imminent collapse is why the feeble British ruling class is bitterly tearing itself in two as well, the pathetic self-deluding arrogance of the rigid British ruling class staring like a headlit rabbit at the oncoming renewed Slump disaster in sheer paralysed panic, twisting that way and this in the wind.
It is just as frantic to distract attention from the real catastrophe, which is solely the failure of its own greed-ridden system; in one sense therefore the entire European referendum racket is nothing but a giant conjuring fraud, keeping the public occupied with a total non-issue.
As the excellent radical journalist but incurable reformist John Pilger said in an interview this week:
What fragile difference there might have once been between the economic, social and foreign policies of the EU and Britain has long evaporated. Both are extremist. Both embrace a fraud called “austerity”, which demands that ordinary people pay for the crimes of the financial elite. Both demonstrate institutional racism. Both back the American great game of “perpetual war”. Why should we have to choose between the specious views of Cameron and Farage? The referendum is a distraction.
But without a Marxist revolutionary perspective he misses the even more significant fact that the British ruling class is truly riven, by historic breakdown and collapse.
Far from being just a “fraud” the increasingly bitter divide shows a ruling class in deep trouble, unable to decide whether its future lies with the “Transatlantic alliance”, playing poodle in the aggressive Anglo-Saxon axis, as it has in the two gigantic crises of the twentieth century and the world war destruction which they inexorably led into, and in the renewed Bush/Blair Third World war mongering, or if it lies in a more “modern” choice, swallowing its historically empty “national pride” to tailend the German European alliance.
The overwhelming economic and political strength of the German core in Europe, is one of the few worldwide capitalist groupings capable of even hoping to stand up against the economic and ultimately military strength of the still huge Washington Empire, or against the other major monopoly capitalist grouping around Japan, an even more innovative and efficient industrial and commercial power than the US, as well as any rising elements like Brazil, India, or even the competition from China’s capitalist economic sector, adding to the conflicts or joining the major blocs.
Whichever the world is shaping up for World War Three.
It is the only possible outcome to the rapidly intensifying cutthroat market mayhem which is returning as the insane money printing period hits the buffers.
Minds have to be made up.
But playing second string to the German ruling class, still despised by the old colonialist wing of the British ruling class, sticks in the throat of these veranda-and-tiffin era throwbacks, unable to see or accept their own demise in the world.
The dried out husk of once imperial British power is not looking well placed, whichever way it goes.
But every ruling class faces catastrophe and, using fascist theatricals or not (all part of capitalism itself and generated by it, not some special “other threat”), faces the same hugely deepened pressure to wage trade-and currency war with utmost ruthlessness, pushing the crisis collapse onto others in a desperate bid to avoid the need to slash wages and conditions too much at home.
Speed up and cuts are needed to maintain falling profits, but fraught with the potential for explosive riots and upheavals.
When even upper middle class doctors are striking, the ruling class knows it is sitting on a powder keg of domestic revolt, forcing its hand in the international competitive arena even further towards all out conflict and deadly war.
And it also knows this is the greatest ever collapse in history which will shortly make even the great Depression of the 1930s look like a tea-party.
The need for austerity is no “ideological” fraud.
They have gone far beyond simple “over”-production.
“Surplus” capital has been stifling the entire world economy more and more since the 1970s causing repeated seismic Stock Exchange and market collapses, and repeated regional meltdowns in Latin America, south-east Asia etc etc.
But this cataclysmic meltdown is now much, much worse, multiplied hugely in its effects by the complete implosion of the endless credit creation which has fended off crisis over and over since Nixon took the dollar off the gold standard in 1973, irredeemably polluting the entire world reserve currency system.
Pilger’s casual dismissal of austerity as a “fraud” is a fraction of the story too.
Of course the workhouse callousness is imposed to pay for the “disaster caused by capitalism’s rich elite” but this is no smug “choice”, implying that they are in control.
And of course they are not about to handover to the working class.
But they would far rather stay with the easy life of throwing a few reformist crumbs on the floor to keep the working class quiet; and maintain the network of bribed fascist stooge tyrannies around the world which keep the exploited Third World masses in near-slavery churning out the palm oil, coffee beans, and cheap T-shirts and trainers (and everything else, along with most of the profit too).
The “democracy” lie, one of history’s greatest rackets, has always been a much better option to control people than overt repression where it can be afforded, and much less prone to revolt.
But the ruling class façade fools less and less of the world, and even less as the Slump, war and refugee turmoil deepens and the crisis grows.
But so far have the fake-“lefts” of all kinds, travelled from a truly revolutionary view of the world (for all the self-described pretensions of the Trots and revisionists to be “Marxists”) that most of them barely see the full extent of the crisis, if they see it at all. Even the ultra-bourgeois Telegraph can do better:
The world can’t afford another financial crash - it could destroy capitalism as we know it
They bounce back after terrorist attacks, pick themselves up after earthquakes and cope with pandemics such as Zika. They can even handle years of economic uncertainty, stagnant wages and sky-high unemployment. But no developed nation today could possibly tolerate another wholesale banking crisis and proper, blood and guts recession.
We are too fragile, fiscally as well as psychologically. Our economies, cultures and polities are still paying a heavy price for the Great Recession; another collapse, especially were it to be accompanied by a fresh banking bailout by the taxpayer, would trigger a cataclysmic, uncontrollable backlash.
The public, whose faith in elites and the private sector was rattled after 2007-09, would simply not wear it. Its anger would be so explosive, so-all encompassing that it would threaten the very survival of free trade, of globalisation and of the market-based economy. There would be calls for wage and price controls, punitive, ultra-progressive taxes, a war on the City and arbitrary jail sentences.
For fear of allowing extremist or populist parties through the door, mainstream politicians would end up adopting much of this agenda, with devastating implications for our long-term prosperity. Central banks, in desperation, would embrace the purest form of money-printing: they would start giving consumers actual cash to spend, temporarily turbo-charging demand while destroying any remaining respect for the idea that money needs to be earned.
History never repeats itself exactly, but the last time a recession was met by pure, unadulterated populism was in the Thirties, when the Americans turned a stock market crash and a series of monetary policy blunders into a depression. President Herbert Hoover signed into law the Smoot-Hawley Tariff Act, dreamt up by two economically illiterate Republican senators, slapping massive taxes on the imports of 20,000 goods and triggering a global trade war. It was perhaps the most economically destructive piece of legislation ever devised, and it took until the Nineties before the damage was finally erased.
That is why we must all hope that the turmoil of recent days in the financial markets, and the increasingly worrying economic news, will turn out to be a false alarm. It would certainly be ridiculously premature, at this stage, to call a recession, let alone a financial crisis. But at the very least we are seeing a major dose of the “dangerous cocktail of new threats” rightly identified at the turn of the year by George Osborne, a development which will have political repercussions even if the economy eventually muddles through.
Investors in equities, including millions of people with private pensions and Isas, have already lost a fortune; they won’t be too happy when they begin to realise the extent of the damage. Growth is slowing everywhere, and the monetary pump-priming of the past few years is looking increasingly ineffective. Traders believe that interest rates won’t go up in Britain until 2019, and there is increasing talk that negative interest rates could become necessary across the developed world, further crippling savers.
No positive spin can be put on any of the latest developments. Banking shares have taken a beating; China’s slowdown continues; Maersk, the shipping giant, believes that conditions for world trade are worse than in 2008-09; industrial production slumped in December, not just in Britain but more so in France and Germany; energy prices are devastating Middle Eastern and Russian economies; and sterling has tumbled.
It is always a sure sign that panic has broken out when financial markets respond badly to all possible scenarios. The prospect of higher interest rates? Sell, sell, sell. A chance of lower rates? Sell, sell and sell again. A rise in the price of oil is met with as much angst as a decline. The financial markets remain addicted to help from central banks: they are desperate for yet more interventions, regardless of the consequences on the pricing of risk, the allocation of resources or the creation of unsustainable bubbles that only enrich the owners of assets.
This is exactly the tonic that the populists have been waiting for. Despite their dramatic emergence, they have so far failed to make a real breakthrough. The SNP was unable to win the Scottish referendum and the National Front didn’t gain a single region in France. Mariano Rajoy remains Spain’s prime minister, and anti-establishment parties have been thwarted in Germany. Even lighter forms of populism, such as Ed Miliband’s, were rejected. Syriza’s victory in Greece was one of the few genuine populist triumphs; but it was soon crushed by the combined might of Brussels and Frankfurt.
This could be about to change. The fact that Donald Trump and Bernie Sanders both won their respective New Hampshire primaries is certainly one remarkable indication of the state of mind of many US political activists. Any economic relapse would help Marine Le Pen’s chances in next year’s French presidential election, and further undermine Angela Merkel’s sinking popularity in Germany.
But it is in Britain that the immediate impact could be the greatest. The Brexit debate is already being overshadowed by the migration crisis, undermining the Government’s attempts at portraying a Remain vote as a safe, low-risk option; a sustained bout of economic volatility would further ruin the pro-EU case, especially given that the eurozone, rather than the City, is likely to emerge as one of the epicentres of any fresh crisis. It would be hard for bosses of large financial giants to credibly tell the electorate to vote Remain when their own businesses are in crisis.
Britain will noticeably outperform the EU this year: our labour market remains strong and our banks far better capitalised than many of their eurozone competitors, too many of which are still sitting on massive amounts of bad debt. The Chinese slowdown is worse for Germany than for us. But while the Eurosceptic cause to which some of us are partial is likely to benefit from the turmoil, it would be madness for anybody who cares about this country’s future to feel anything but dread towards the economic threats facing the world. The sorry truth is that there is very little that governments can do at this stage
It is not “ridiculous to call this a financial crisis” of course.
It is the greatest collapse in history and the only brake since January’s renewed panic over Stock Market and bank meltdowns has been a promise by the European Bank president Mario Draghi and perhaps by Beijing, to carry on printing money – or more Quantitative Easing as it is known.
But that is only more of the same “medicine” and however long it things are spun out, it cannot last as Nobel prizewinner Joseph Stiglitz, one time lead economic adviser to President Bill Clinton, gloomily explains:
Seven years after the global financial crisis erupted in 2008, the world economy continued to stumble in 2015. According to the United Nations’ report World Economic Situation and Prospects 2016, the average growth rate in developed economies has declined by more than 54% since the crisis. An estimated 44 million people are unemployed in developed countries, about 12 million more than in 2007, while inflation has reached its lowest level since the crisis.
More worryingly, advanced countries’ growth rates have also become more volatile. This is surprising, because, as developed economies with fully open capital accounts, they should have benefited from the free flow of capital and international risk sharing – and thus experienced little macroeconomic volatility. Furthermore, social transfers, including unemployment benefits, should have allowed households to stabilise their consumption.
But the dominant policies during the post-crisis period – fiscal retrenchment and quantitative easing (QE) by major central banks – have offered little support to stimulate household consumption, investment, and growth. On the contrary, they have tended to make matters worse.
In the US, quantitative easing did not boost consumption and investment partly because most of the additional liquidity returned to central banks’ coffers in the form of excess reserves. The Financial Services Regulatory Relief Act of 2006, which authorised the Federal Reserve to pay interest on required and excess reserves, thus undermined the key objective of QE.
Indeed, with the US financial sector on the brink of collapse, the Emergency Economic Stabilization Act of 2008 moved up the effective date for offering interest on reserves by three years, to 1 October 2008. As a result, excess reserves held at the Fed soared, from an average of $200bn during 2000-2008 to $1.6tn during 2009-2015. Financial institutions chose to keep their money with the Fed instead of lending to the real economy, earning nearly $30bn – completely risk-free – during the last five years.
This amounts to a generous – and largely hidden – subsidy from the Fed to the financial sector. And, as a consequence of the Fed’s interest-rate hike last month, the subsidy will increase by $13bn this year.
Perverse incentives are only one reason that many of the hoped-for benefits of low interest rates did not materialise. Given that QE managed to sustain near-zero interest rates for almost seven years, it should have encouraged governments in developed countries to borrow and invest in infrastructure, education, and social sectors. Increasing social transfers during the post-crisis period would have boosted aggregate demand and smoothed out consumption patterns.
Moreover, the UN report clearly shows that, throughout the developed world, private investment did not grow as one might have expected, given ultra-low interest rates. In 17 of the 20 largest developed economies, investment growth remained lower during the post-2008 period than in the years prior to the crisis; five experienced a decline in investment during 2010-2015.
Globally, debt securities issued by non-financial corporations – which are supposed to undertake fixed investments – increased significantly during the same period. Consistent with other evidence, this implies that many non-financial corporations borrowed, taking advantage of the low interest rates. But, rather than investing, they used the borrowed money to buy back their own equities or purchase other financial assets. QE thus stimulated sharp increases in leverage, market capitalization, and financial-sector profitability.
But, again, none of this was of much help to the real economy. Clearly, keeping interest rates at the near zero level does not necessarily lead to higher levels of credit or investment. When banks are given the freedom to choose, they choose riskless profit or even financial speculation over lending that would support the broader objective of economic growth.
By contrast, when the World Bank or the International Monetary Fund lends cheap money to developing countries, it imposes conditions on what they can do with it. To have the desired effect, QE should have been accompanied not only by official efforts to restore impaired lending channels (especially those directed at small- and medium-size enterprises), but also by specific lending targets for banks. Instead of effectively encouraging banks not to lend, the Fed should have been penalizing banks for holding excess reserves.
While ultra-low interest rates yielded few benefits for developed countries, they imposed significant costs on developing and emerging-market economies. An unintended, but not unexpected, consequence of monetary easing has been sharp increases in cross-border capital flows. Total capital inflows to developing countries increased from about $20bn in 2008 to over $600bn in 2010.
At the time, many emerging markets had a hard time managing the sudden surge of capital flows. Very little of it went to fixed investment. In fact, investment growth in developing countries slowed significantly during the post-crisis period. This year, developing countries, taken together, are expected to record their first net capital outflow – totaling $615bn – since 2006.
Neither monetary policy nor the financial sector is doing what it’s supposed to do. It appears that the flood of liquidity has disproportionately gone towards creating financial wealth and inflating asset bubbles, rather than strengthening the real economy. Despite sharp declines in equity prices worldwide, market capitalization as a share of world GDP remains high. The risk of another financial crisis cannot be ignored.
There are other policies that hold out the promise of restoring sustainable and inclusive growth. These begin with rewriting the rules of the market economy to ensure greater equality, more long-term thinking, and reining in the financial market with effective regulation and appropriate incentive structures.
But large increases in public investment in infrastructure, education, and technology will also be needed. These will have to be financed, at least in part, by the imposition of environmental taxes, including carbon taxes, and taxes on the monopoly and other rents that have become pervasive in the market economy – and contribute enormously to inequality and slow growth.
Stiglitz’s proferred “large increases” in public spending and more taxes etc are just more fanciful and fatuous reformism, needing more credit, and can solve nothing about the collapse in profitability, even if by some remote fluke a new Roosevelt Plan were implemented (which was always much less of a success than bourgeois history presents it, with slump soon back and WW2 just afterwards).
And does he really believe that if, say, the “left” Bernie Sanders, and his “democratic socialism” to “regulate corporate capital” was to be elected as US President, – which is a tough call anyway against the overwhelming influence of big money advertising, “family” image building, dirty dealing and capitalist media bias, not to mention sectional bribery (eg “gay marriage”) and raw vote manipulation which makes up the reality of bourgeois “democracy”, – it would really be allowed to put through any measures that seriously challenged the wealth and power of the ruling class (“re-writing the rules of the market economy” etc)?
If the great wave of “left” populist electoralism of the last decade in Latin America is now seeing government after government toppled by outright coups, as in Honduras 2009, or CIA-coordinated legal and electoral coups as in Paraguay, often using the dirtiest of provocations, violent riots, arson, and intimidation, along with economic sabotage, tricksy “legal” challenges, character assassination and outrageous media lie campaigns as just pulled against limited Argentinian and Brazilian left reformism and particularly against the mass mobilised left-nationalist Chavistas in Venezuela and now Evo Morales’ indigenous supported reforms in Bolivia, (where a referendum to extend his leadership has been lost) -- then what makes anyone think that there would be any less skulduggery in the heartland of imperialism itself?
Only those filled with dull-brained illusions in doing things “by the democratic rules” and “real democracy” delusions fostered by revisionists, reformists and Trot “left pressure” would answer like that.
In the real world there would be coups or takeovers, or assassinations if the usual tricks failed, just as there have been time after time, notably against the first “democratically elected” socialist government in Chile brought down by a CIA directed campaign of civil disruption and economic sabotage (petty bourgeois owner-driver lorry strikes etc) and the culminating military coup by General Augusto Pinochet in 1973, butchering thousands of workers and imposing a brutal torture repression afterwards – and again recently in Egypt to suppress the spontaneous Arab Spring, massacring thousands.
The tragedy in Latin America is that the masses have not been trained and educated in a full Marxist understanding, and that revisionist and fake- “left” influence has let them believe in a peaceful path forwards through voting, when what they needed was to grasp and fight for the dictatorship of the proletariat.
The great “left reform” trick is now already in progress in the main “developed nations” most notably embodied in Sanders himself, offered as the “genuine left” solution the working class needs, but saying nothing of the real crisis underway, nor of the solution to it.
That can only lie in the determined mass movement waging a conscious class war to topple and overturn the capitalist ruling class, taking over the banks, factories, offices, farms and everything else run by the big corporations and owners, and holding onto them in common ownership for the use of a planned, cooperative socialist economy guiding production for rational social needs, not insane and wasteful consumerism, in harmony with the environment and nature.
Of course the sudden spontaneous emergence of this new “leftism” – like Jeremy Corbyn in Britain – reflects a shift in popular mood as the crisis bites deeper, but Laourism or “Sanders-ism” is designed only to head it into safe channels.
Neither (of them) challenge anything about the intractable Slump crisis, offering only hopeless reforms and ineffectual pacifism and already compromising all down the line on the warmongering and economic challenges.
They are deliberately tolerated by the ruling class, even bolstered by its “bogeyman” media hype, to pretend to the working class that this is a “real threat”, but in reality being set up as the new Allendes to lull the working class with continued illusions in “democracy” and “no to war” pacifism.
Most of all they lead workers up the garden path with the notion that the crisis and the Slump are “unnecessary”; just a wilful “ideological choice by a greedy ruling class” and that capitalism can be “made good” be regulation and pressure.
It is a deadly disarming dissembling lie.
There is a “choice” only in the sense that the ruling class chooses not to hand over all the means of production, land, resources and finance that it alone “owns”, just as no ruling class has ever willingly left the world stage when its system had become rotten ripe - even the bourgeoisie began as an armed revolutionary (even terrorist, puritanical!) movement, turning over feudalism in the English Revolution under Cromwell or the French aristocracy under Robespierre.
But there is not a choice about the collapse itself – it is built in to private capitalist ownership.
No “defence of conditions”, “save the NHS”, “no to austerity” or “no to war” marches, demonstrations, or strikes can, in themselves, do any more than King Cnut proved to his courtiers could be done about stopping the tide.
Of course such struggles will spontaneously happen anyway and some occasional retreats might even be forced on the ruling class, even in the hurricane economic turmoil to come, but the critical issue is that the revolutionary perspective needs to be argued for in all such struggles.
Only that way can the experiences help develop the mass conscious understanding needed for the gigantic coming revolutionary struggles, whatever the immediate outcome of any particular partial fight, however big or small, local library fight to national miners’ strike .
Leninism has constantly had to make its warnings about the catastrophe heard against the smugness and complacency of the fake-“left”.
For decades these groups have barely mentioned the crisis let alone the inevitability of such catastrophic Slump disaster, except in turgid and academic “Marxist” articles, many of those denying the prospect, or declaring it to be far in the future.
Such “theory” has been more like medieval disputes over pins and angels, a constant backbiting squabble that bears little relation to any kind of living grasp of the contradictions inevitably and inexorably drawing the entire world system towards devastation.
And when the proof (as above) finally arrives????
Far from seizing the day to build the revolutionary party required to lead and guide the enormous world turmoil fake-“left” has abandoned the field altogether.
The popular surge into Corbyn’s movement reflects growing disquiet at one level, and has certainly shocked the ruling class, but it is as much to do with avoiding revolutionary questions as anything else, its membership largely drawn from the municipal and welfare sectors, with a petty bourgeois influenced workforce still dominated by anti-communism and long years of imperialist corrupted privilege.
The sense is of a desperate hope to avoid drawing any firmer conclusions about the need for communism; a mass movement symptom which is both good and bad, reflecting the anti-communist brainwashing which still prevails but also how thin the reformist veneer has become.
No wonder much of the Trotskyist movement, with its formulas for never realisable “pure revolution” ––(so “pure” and exclusive that it hates and rules out most actual workers states and writes-off their living experience as “deformed” or “degenerated” against their petty bourgeois utopian blueprints, and certainly would allow little participation from most real workers, with their “rough and ready” attitudes out of line with “politically correct” self-satisfied single-issue notions about “gay rights”, or feminism, (now so reactionary they are currently “no platform” censoring even their own anti-communist gurus like Germaine Greer and Peter Tatchell!!)) – has dissolved itself into the “left”-Labourite surge.
Always aware of the main chance, ready to opportunistically hitch a ride on the back of more mainstream or successful workers movements (like the Scargillite Socialist Labour Party at one point) to try and further their own petty bourgeois ambitions and recruitment, some have even disappeared totally into the Corbynite “Momentum” movement, ostensibly dissolving their “revolutionary” parties just when the possibility for revolutionary debate is opening up.
This takes to a new level the hoary excuse that “the working class is not ready”.
Apart from this being a total abrogation of leadership responsibility, blaming workers for the failings of their supposed “Marxist” parties (which among other things have created the giant vacuum in world revolutionary understanding currently filled by “jihadism” etc - of which more next issue) it is anyway becoming less and less true.
The gigantic downward lurches in the world economy are beginning to shake loose the deeply embedded resistance to communist understanding everywhere including in the West.
Seven decades of endless consumer “boom” fed by endless inflationary credit in the Western nations, and particularly around the dominant imperialist trading currency of the US dollar, has been a key weapon for the ruling class in staying on top of its exploitation system.
Glitz, superficial fashion and “the next-new-thing” technology (for the “winners” in society only, in and those mostly in the rich countries) has underpinned the relentless anti-communist propaganda massage which is pumped into every individual from birth to deathbed.
Whatever problems you might have, it suggested, and however unjust life seems, things are always better than the alleged “drudgery and totalitarian oppression” over there in the workers states.
There is even the chance that “it could be you” that strikes lucky in the vicious ratrace lottery which is existence under even boom time capitalism (though with about the same impossible odds for the majority as in the ticket Lottery, since society is heavily weighted towards ensuring all the best life chances go to those from already privileged and wealthy backgrounds).
It was always a total lie and one that cut little ice in the ruthlessly suppressed and sweatshop exploited Third World, whose actual or near slave driven masses supplied the super-profit surpluses paying for the Western lifestyle, casually and complacently assumed to be “normal entitlement” by the self-satisfied middle class and layers of the working class temporarily corrupted by the few crumbs falling to them from the fabulous and obscene wealth of the ruling class (usually kept behind closed doors, to hide its unimaginable luxury and privilege).
But together with the illusions of “reform” gains and “welfare” nets etc sold to the working class via its class collaborating “left” leaders in the bourgeois Labour party and the “official” trade union movement (propped up by the assorted “left pressure” calls of the “revolutionaries”) the myth could always be maintained during the “endless” boom that life would never be bad enough to go through the revolutionary upheaval and agony needed to change things, or at least that such questions were for the unthinkable far distant future.
Since 2008 and the relentless imposition of increasingly vicious workfare cuts and workhouse disciplinary measures (though nothing yet like the extent needed for the ruling class if it is to hold on in the hurricane conditions of international cutthroat trade war) that has all changed.
It will change even further once the QE effect runs out.
And after nearly two decades of increasingly horrific warmongering, torture and blitzkrieg destruction, already wiping out half a dozen countries in the Middle East and creating the refugee crisis now being used by the Trumps to whip up racist and anti-Muslim scapegoating everywhere, it will dawn on minds that there is a complete connection between economic breakdown and the devastation and mayhem in the world.
But instead of making this connection consciously clear to the working class, the entire fake-“left” is playing it down, instead, pandering to the backward chauvinism and petty Little Englanderism being whipped up against “market dumping” for example, both those “for Europe” – the EU supposedly able to set protective tariffs, – or declaring Europe itself to be the supposed problem as the revisionist Stalinists do.
Some like the self-appointed “intellectual” leader of the Trotskyist fake-“left”, the CPGB go even further, which effectively denies in its Weekly Worker paper that there is any critical breakdown at all, some pieces in its hopeless eclectic stew even calling for support for capitalist investment.
One of its leading guru figures Hillel Ticktin “explains” in a completely garbled piece recently that while there is a “crisis” this does not mean conflict nor even austerity.
It is more a long term thing he says rather similar to Lenin’s grasp of Imperialism as a new stage of capitalism and permanent crisis since 1870.
True that is what Lenin analysed (at somewhat greater length), but this is “Lenin” restated, with no sense of the dramatic crisis developments of the 20th century and its huge revolutionary explosions in the great world war conflicts (which Lenin analysed constantly) and which emerged from capitalism’s historic breakdown.
No need to get excited Ticktin suggests, things slowly get worse but no great perturbations have so far disturbed anything – war, he somewhat airily declares, is simply a tool used by capitalism to “absorb capital” in order to “stabilise its system”.
That would be the “absorbing” which destroyed Western Europe in WW1 and most of Russia, Japan, south-east Asia, and Europe all over again in WW2, and the “stability” which not only killed tens of millions but more importantly for the big capitalists, led to waves of revolutionary upheaval???
Exactly how did the establishment of the Soviet Union and then post-1945 the huge anti-imperialist movement taking whole swathes of colonies out of the capitalist orbit (or with China, Vietnam, Cuba, North Korea and others into outright communism) threatening its unrestricted exploitation, equate to “stability” for the investors (particularly since all but a few victors were also wiped out, commercially or even physically) ??
And why anyway did these huge wars suddenly erupt if they are simply a “safety valve” to keep capitalist investment in balance? Why are they not a continuous process of capital “absorption”?
Because the contradictions build up to the point of revolutionary explosiveness is the Marxist answer.
Of course there are colonial wars and interventions too by the supposed “freedom and democracy” system, some on a huge scale of barbaric butchery and destruction like Vietnam, but far from “stabilising” anything it is the expense and difficulty of carrying them though which has helped lay low the entire imperialist order – the reason Nixon’s dollar was devalued in the first place, and continues the long-term humiliating memory of defeat still dragging down US confidence.
And this explains nothing about why the world wars erupted.
One of the basic problems is the clogging of the system with excess capital accumulating more and more and which were it all to be invested would lower the average rate of profit so far it would virtually be zero - much as the world is seeing right now as commodity prices plunge and shares collapse.
But while conceding that there is so much spare capital now that the world’s banks are stuffed with trillions of unused dollars – all unable to find way to make profit, this should in no way be understood to mean that there is a falling rate of profit he declares.
So that’s alright then, never mind the real world.
Nor does he heed it. Despite the frenzy of blitzing and destruction for the last two decades, the World War Three in embryo, he reassures us that new wars can be ruled out because:
I do not see where this approaching world war is coming from: the idea that the US is going to fight Germany or France is absurd. By the same measure, we do not really expect, despite the nonsense talked about it, the United States to go to war with China. War is effectively ruled out.
So that’s alright then. Probably we can rule out there being a giant wave of refugeess destabilising Europe too as he “cannot see where it is coming from”, or the build up of two thirds of all US naval forces now around China, temporarily in alliance with a renewed Japanese militarism (like Germany, re-establishing military intervention as “acceptable normality” after decades of “only self-defence" pretences).
Or the endless sniping, trade war hostilities and diplomatic wrangles indicating that inter-imperialist rivalries are building up to unprecedented level once more, as over Ukraine for example.
Of course the overwhelming power of the US has made it difficult to see which capitalist bloc will feel driven first of all to take on the Empire, and as the EPSR has speculated in past discussion (eg issue 1199 09-09-03), the shape of the Third World War may well be influenced by the disparity in strength between the monopoly dominance of the United States and every other power – including seeing it as possibly a more piecemeal disintegraton like the end of the Roman Empire, than WW1 and 2.
But the alliances and jostling for position continue apace - as the “European Debate” makes clear and, as the brash Trump-eting underlines, the confidence of Washington’s ruling class has been shaken to the core not least by the spontaneous world rebellion that the CPGB writes off as “reactionary Islam” just like all the other treacherous “left” groups.
The giant superiority of the US could be eaten away in all sorts of ways.
Domestically things are not so bad either to the CPGB’s eyes:
It is becoming clearer to the capitalist class itself that austerity is not a long-term strategy. The classic form of capitalism cannot be reimposed. That is why the IMF is now saying that there must be investment in infrastructure. That argument is powerful and it shows there is a realisation that the state cannot continue shrinking indefinitely, which reduces the potential for investment.
No differences with Stiglitz’ reformism then.
The supposed technical analysis behind this disarming garbage, allegedly disproving one of the fundamentals of Marx’s analysis, the tendency of capitalism towards a falling rate of profit (see EPSR box and Capital Vol III), was so self-contradictory that even one of the WW own arcane practitioners felt obliged to have a go, albeit only for academic point scoring:
Ticktin claims there is $76 trillion of uninvested cash held by capitalists, yet there is no crisis of profitability and the rate of profit is 12%. How can this be? I and, I suspect, anyone would not keep their wages in a tin under the bed if they could get a 12% return down at the local Coop bank. Rather, I suspect, he is wrong when he dismisses tendency of the rate of profit to fall as a reason for the current crisis. It is surely the fact that there is no return on their investment to be made that stops them from investing in new plant and machinery? Dave G
The real point of all this confusion is to evade the glaring truth about capitalism’s collapse, and more importantly the sharply presented need for revolution it confronts the working class with.
Ticktin tails off with:
There is talk about state investment, but the ruling class is worried about putting it in to practice. They are confused and stuck in a rut - this an important feature of the crisis at the present time. They can keep on with austerity, but this approach is breaking down, as we saw in Greece. They can see that the economy cannot continue like this and that the working class is not going to accept it. They have to change, but they cannot change, so they simply continue with the old forms.
In other words, a characteristic of the current stage is this prevailing confusion rather than any even semi- rationalised ideology to support the current approach. But a second characteristic is seen in the fact that the working class is beginning to act, and the capitalist class has no real answer.
The only confusion is that foisted on the working class by these mountebanks - pretending that if only the ruling class would “invest” things could be different, and hailing the Labourite Corbyn surge as “the working class beginning to act”, pure reformism.
And just to underline the confusion the same paper now follows through with an even more disastrously wrong assessment, hailing a new guru figure for its readers from France, one Alain Badiou whose view is that
for 30 years we have witnessed the triumph of globalised capitalism.... most visible in the return of a kind of primitive energy incapitalism - the resurgence and new-found effectiveness of the constitutive ideology of capitalism: namely liberalism.... In any case, the triumph of global capitalism, the revenue-generating capacity and the undisputed, shameless display of this phenomenon, the way it organises production, trade and eventually whole societies.
Today we have a capitalism installed explicitly on a scale that is global. What defines this globalisation is not only a capitalism that has considerable power,but one that has grown to such an extent that now we can say there is a global structure: capitalism has unchallenged control of the entire planet.
Well- phew! The collapsing profit figures, plunging oil prices, layoffs, steel closures and desperate fears have all got it wrong!!! The bourgeois papers have got it all wrong.
And above all - Marxism has got it even more wrong than Ticktin says!
It’s guru against even more deranged and detached guru challenger! Ding-ding!
The real point of this astonishing “triumphalist” inversion of reality however, apart from the normal deliberate demoralisation of the working class by these hopeless anti-communist posturers, is to explain away the most intractable bit of reality currently for imperialism, namely the complete chaos of the Middle East and the ever mounting world rebellion spreading from Indonesia to Nepal, Ukraine, Latin America and all compass points in Africa.
Far from showing the breakdown and loss of control of the imperialist system, says this slippery Frenchman the new jihadism is what they want –and is just a “new way of doing business” because “look they have been buying oil from ISIS”.
Yeah right, it might be said teenage style - all those years subverting countries, running the highly expensive CIA, and blitzing the hell out of them to install stooges and maintain “stability” were in vain – as too toppling the Muslim Brotherhood in Egypt at great political and economic cost in 2013, it would seem.
What astonishing sophistry!
But the fake-“left” is desperate to get off the hook it was caught on after 9/11, of denouncing and condemning “terror”, which is more and more clearly showing them lined-up with imperialist war stampeding, their true anti-communist anti-working class position.
Most glaringly of all, they are now lined up with Trump and Sarah Palin, demanding the same “kill them all” arse-kicking of ISIS and all world rebellion labelled “terrorism” (including the Palestinians it would be logical).
With this offered as “Marxism” it is no wonder that the Third World masses have turned away from it - and adopted local cultural forms to lead their anti-imperialist fight for the moment, especially Islamic fundamentalism.
Despairing suicidalism and the backward religiosity of the “terrorists” will only carry the world revolt so far, particularly with its blinkered sectarianism knocking six bells out of each other.
But “condemning” it is a disastrous mistake at best and mostly outright treachery.
The world needs to see the real enemy, which is imperialism, – collapsing slump ridden armsrace, barbaric warmongering imperialism and to organise the great world class struggle to topple it for good.
To do that it needs the battle for a clear revolutionary scientific world perspective, built by a Leninist Party.
*Analysis of the defeat of imperialist skulduggery and civil war provocations in Syria but without fostering any illusions in the flaky Assad regime, or the oligarch dominated imperialist bonarpartism of Putin needs to be held over.
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