Hitherto philosophers nave interpreted the world in various ways. The point however is to change it.
Karl Marx
Economic & Philosophic Science Review
[P&P] Bulletin Publications. PO Box 50. SWI7 9NL] [Post Office Regd.]
No 828 Tuesday November 14 1995                                                                                                                 10p

NW sales meetings Sat 2pm Plse bring rcpts. Sleepbgs

The 'new world order' in total turmoil.

The Middle East has again provided the most spectacular sign of capitalism's crisis reaching explosion point, this time with Arab fundamentalism's blitz on the US imperialist military HQ in Riyadh, following last week's Zionist-extremist assassination of Rabin.

But it is still the basic economic trade war which gives the greatest insight into what is really happening, and where things are heading, - dominated by mountainous balance-of-payments and bank debts everywhere which no one has the slightest idea how to overcome.

Agonising over Deutschmark stability, faced with the realities of rapidly-sharpening inter-imperialist conflict inside and outside the Common Market, continues to deeply disturb German society, completely transforming overnight the world's previous daft-headed illusions about 'European Union'. Listening to capitalism's own press is still the best guide to how ludicrous has become the notion of the EU as a 'permanent platform for peace':

"Suddenly the political elite is having second thoughts," says Norbert Walter, chief economist at Deutsche Bank, the country's biggest commercial bank. "That's the new element. The political elites were all in favour of European integration and Maastricht and now they're beginning to shy away from it."

Germans are loath to forfeit the mark, the most concrete embodiment of their country's post-war success. Every opinion poll shows a thumping majority of up to 70 per cent against trading it in for some nebulous Eurocurrency.

Chancellor Helmut Kohl, after 13 years in power, is used to getting his way. And his way is to sacrifice the mark to hasten European political union. It is not that he wants to lose the mark, rather that he has to, as a means to the end of a European federation.

The furore erupted a couple of weeks ago when the flagging Social Democrats questioned the selection criteria for EMU, laid down in 1991's Maastricht treaty and scheduled for launch at the beginning of 1999.

The SPD leaders spoke scornfully of ''monopoly money", breaking for the first time the all-party consensus that has characterised German policy on the future of the EU. The dam was breached. Since then professors, politicians and pundits have come out of the closet in an endless bout of agonising and acrimony over EMU and the mark.

The differences are not so much between the parties as within them. Despite the political point-scoring, the leaderships of Mr Kohl's Christian Democrats and Rudolf Scharping's Social Democrats are saying very similar things about the need to ensure that a future Euro-currency is as stable as the mark, that the terms for admission are rigorously applied, and that further instruments are needed to ensure this, going beyond the Maastricht agreement. A consensus remains that Germany must not relax the fitness test for EMU to meet the 1999 deadline. If need be, EMU will be postponed.

Within the parties, however, EMU-scepticism is rife. Oskar Lafontaine, the deputy SPD leader, is scathing. His criticisms are echoed on the right of Mr Kohl's governing coalition in Bavaria's Christian Social Union. It was the finance minister, Theo Waigel of the CSU, who triggered the entire controversy in September by dismissing Italy as unfit for EMU.

Dr Kohl also face's a formidable body of criticism in the think-tanks and universities. The six leading economic institutes, in their recent joint six-monthly report, urged a relaxation of the EMU terms, anathema to a government eager to persuade a nation of doubters that the terms will be so tough as to ensure the continuation of the Deutsch-mark by another name.

In contrast to the think-tanks, a club of economics professors is fiercely critical of the EMU-project, arguing it is premature, over-hasty, ill-prepared and will wreck rather than help prospects for European integration.

In short, the consensus bubble has burst, leaving in its place an air of panic, alarm-ism, and apocalyptic warnings.

The Kohl camp accuses the opposition of cheap populism for daring to question Bonn's policies. But the government shares a predilection for apocalyptic predictions.

For Mr Kohl, it is a question of "war and peace" in Europe. For Klaus Kinkel, his foreign minister, no single currency means a return to the Europe of the 1930s, in other words the Germany of Adolf Hitler.

"Without France and Germany, EMU cannot work," said Norbert Walter, chief economist at Deutsche Bank. 

Mr Chirac is about to shred his election manifesto by cutting spending to make the EMU grade by 1997, obliging him almost to halve his budget deficit from 5.6 per cent.

The opposition has demanded a full parliamentary debate on the single currency, but Dr Kohl has ruled this out until February. The reason for the delay may be the chancellor's eagerness to secure French backing for his policies, and to judge whether President Jacques Chirac can deliver on controversial new austerity policies to pass the EMU fitness test.

Dr Kohl's Christian Democrats (CDU) responded yesterday to the opposition criticism of the chancellor's European policies by accusing the Social Democrats of "Deutschmark nationalism".
 
"Nobody wants to nor will trade the D-mark for esperanto or tutti-frutti money," asserted the CDU MP, Friedhelm Ost, denouncing opposition leaders as "chauvinists".

The opportunist Blair has followed the SPD with his own anti-EMU display of chauvinism for the CBI bosses benefit. And in Japan, inter-imperialist hostility is now official:

TOKYO — Japan made a rare public statement of distrust in the United States on Friday after Washington said it could not discuss reports that it had spied on Japanese officials.

Tokyo formally asked Washington last week to investigate media reports that said the Central intelligence Agency had spied on Japanese officials and business executives during trade talks. Washington agreed to take up the request.

The reply came Thursday, when Winston Lord, U.S. assistant secretary of state for East Asian and Pacific affairs, told Takakazu Kuriyama, Japan's ambassador to Washington, that he could not comment on U.S. intelligence-gathering activities.

"They will not deny it, and their statement that they cannot comment further leaves room for doubt,"a Japanese government spokesman, Koken Nosaka, said Friday. The U.S. government "should make an effort to remove Japan's distrust of the United States," Mr. Nosaka said at a news conference.

The comment was unusually blunt.

Japanese government officials are normally wary of speaking out against Japan's biggest economic and political ally. Mr. Nosaka said that Japan would continue to follow U.S. action closely on the issue.

Mr. Kuriyama told Mr. Lord in Washington that the affair could have a "negative impact" on bilateral ties.

"I am concerned that this sort of media report will have a negative impact on overall U.S.-Japan ties," the prime minister's office quoted Mr. Kuriyama as telling Mr. Lord. "We regret that the United States did not firmly deny the reports," Mr. Kuriyama said.

The dispute broke out when The New York Times reported on Oct 15 that the CIA had eavesdropped on conversations among Japanese officials and car company executives and fed reports to U.S. officials during talks in Geneva in June.  Reuters

This sounds low-key but the Japanese are seething still against American sharp practice in the trade war, and against US hostile actions over Japan's Daiwa bank-collapse embarrassment. The tone of barely-suppressed conflict accurately reflects the growing frostiness of real-life inter-imperialist contradictions, utterly at variance with the myth of 'new world order' harmony.

The conflict within US imperialism about which way to turn in the crisis is almost as hate-filled and ruthless:

THE US government will start to close down again at midnight tonight as the 11th game of political chicken in 15 years resumes in the budget stand-off between White House and Congress. But, suddenly, this ritual is causing real alarm.

The prospect of a first default by the US Treasury has raised the stakes in the confrontation between a Democrat President and a Republican Congress. The room for political manoeuvre has been constrained by next year's presidential elections.

Robert Rubin, the US Treasury Secretary, signalled yesterday that he was ready to take "extraordinary measures" to prevent a default, by shifting social security trust funds from US Treasury bonds, where they add to the national debt, into an interest-bearing account, where they would not.

But forcing the Treasury to maintain its credit with an accounting trick would itself alarm the markets, and only buy time for the political drama to grind on.

The key players are President Clinton, Republican presidential front-runner Senator Robert Dole and Speaker Newt Gingrich, who is still deciding whether to join the electoral contest.

The three held a conference phone call on Saturday but failed to agree even on the need for a meeting to explore a compromise that would continue to fund the US government and allow it to borrow more to meet some $26 billion (£17 billion) in Treasury bills and interest which fall due this week.

The creeping closure of government operations will start gently enough, with national parks and government monuments closing on Tuesday, and ex-service personnel's benefits will no longer be paid.

Welfare and social security cheques will continue to be sent out but no new applications will be processed.

If the clock ticks past High Noon and into next week, real hardship will start to hit the unemployed and welfare applicants, while interest rates are expected to climb as the markets react.

The American imperialist bourgeoisie is presumably not so degenerate yet that it cannot avoid destroying itself in a head-on bureaucratic collision of this sort; but the reasons for the clash, and the damage it will do to the international markets one day, - neither of which are under any control at all, - will not be fudged over for much longer.

America's chronic foreign payments and domestic budget deficits, - the impossible price which has to be paid for 50 years of US imperialist world domination and anti-communist sabotage, - are going to bankrupt the entire 'new world order', probably via a complete collapse of the dollar initially, followed by the fall of financial markets of all kinds everywhere, leading to total inter-imperialist war of unprecedented vengefulness, and an international explosion of communist revolution which will dwarf 1917 and post-1945 in its savagery, extent, and significance. 

The permanent bloody civil-war chaos in half of Africa already and now in Nigeria with the Ogoni executions, is a symbol for the planet's immediate future. The slaughter of Americans in their 'safe-as-houses' Saudi bastion only brings home how desperately close to core Big Power interests the uncontainable turmoil is now creeping.

The Zionist stooges for US imperialism have no death wish and would happily have lorded it comfortably over the 'new world order' for ever in the Middle East, but they are in murderous uproar:

Here is a small sample, taken from one recent issue of the New York Jewish Press.

The editors freely cast doubt on the democratic legitimacy of the government: after denouncing "the current violation of Torah principles by the government of Israel", they then claim that "the Israeli government... conducts its affairs as a dictatorship". Columnist Gary M Cooper-berg refers to "the power brokers who presume to rule over us as dictators". Warming to this theme, Prof Paul Eidelberg of Bar-Ilan University (where the prime minister's killer was a student) writes that "a one-sided civil war is being waged in Israel. This war became conspicuously ugly with the ascendancy of the Labor-Meretz government. The goal of this triumvirate, which it must pursue to retain power, is the subversion of Judaism... This left-wing junta has been secularising, ie brainwashing, Jewish children and soldiers."

The use of militaristic language is continued in a column by Yitzhak Shamir, who refers to "the war against the present policies of the government". Prof Howard L Adelson talks of "the Rabin-Peres attack on Jewish shrines", and Ron Nachman, Likud MK, Mayor of Ariel, writes ominously: "When the first victims of [the peace] agreement fall, someone will have to pay the price."

The worst abuse is left to the letters page. Writing from Jerusalem, Binyamin Lemkin refers to "the war and terror process which Rabin and Peres and Arafat are conducting".

Jew is still willing to kill Jew for the sake of the Land of Israel.

Only hours after Rabin was laid to rest on the slopes of Mount Herzl, police discovered fresh evidence of the growing hatred that divides the country. 'Rabin, we will avenge your blood' is the pledge that appears time after time in the area close to Kings Square in Tel Aviv where the Prime Minister lost his life.

Last night police were holding two more suspects — a 21-year-old soldier, who serves in an elite combat infantry unit, and his father — in connection with the murder. Military police found weapons and explosives during a search of their home, near Tel Aviv.

Their arrests bring to eight the number of suspects being held.

In Tel Aviv a message to Binyamin 'Bibi' Netanyahu, the Likud opposition leader, reads: 'Bibi — the blood of Yitzhak Rabin is on your hands'.

More plainclothes security men were drafted for his protection after Rabin's widow, Leah, publicly castigated Netanyahu for feeding an atmosphere of hate that culminated in her husband's death.

Attempts by left-wing activists to desecrate Goldstein's grave arouse more anger than Rabin's murder. Last week the Israeli army ordered soldiers to stop patronising a Kiryat Arba restaurant where the owner, Elitsur Butavia, was heard welcoming the news of the Prime Minister's assassination.

Some bourgeois media coverage has tried to pretend that peace and love will follow Rabin's death, but the above capitalist press reports are the real story. Why? Because the deepdown worldwide economic crisis of the imperialist system is continuously unleashing and strengthening an anti-imperialist revolution of unstoppable proportions. Peace or no peace, Arafat sell-out or no sell-out, proletarian revolt continues to grow, - everywhere. Build Leninism. JH

Land & Freedom, - anti-communist lies and subjective idealism.

THE film Land and Freedom by Trotskyite fellow travellers Ken Loach and James Allen is just about the worst anti-Communist diatribe to come from this reactionary political camp so far.

What talents director Loach and playwright Allen possess have been willingly expended on a grotesque distortion of the Spanish Civil War, a vicious denigration of the Soviet Union's support for the anti-Franco cause, and an infantile reactionary interpretation of the Barcelona putsch which, for a time, derailed the anti—fascist struggle.

The confusion is so serious that cinema-goers without a fairly detailed knowledge of the war could easily assume the Communists in the struggle were in fact the fascists, and that the Soviet leadership was the executioner of the centrist Republican government, not Franco and his armed fascist-clerical hordes. Hardly a fascist soldier, and no fascist leaders, are portrayed, and the long final scene in the film uses unmistakable symbolism - low angled shots of jackboots and snarling gun—toting commissars barking orders - to suggest that the Communists ('Stalinist') were as bad as the fascists. 

No wonder the film has been warmly welcomed by most bourgeois critics (particularly the deeply reactionary pundits of the 'liberal' press who like a bit of flattering leftism mixed with their anti-Communism), and condemned by the Civil War veterans appalled that the sacrifice of their dead comrades has been so utterly ignored. 

Apart from anti-Communism (or anti-Stalinism as the consistently anti—Soviet Trot camp would have it), the other reactionary thread in the film is the tired reformist notion that workers are better left alone to lead their own mini-revolutions, and that leadership, centralism, and a struggle for socialist scientific theory is all entirely suspect.

This is Allen's particular stock-in-trade and is now taken to such degenerate lengths that every kind of Catholic, petty-criminal backwardness is now glorified as a fine example of 'pure' class consciousness -(see the film Raining Stones - scripted by Allen, directed by Loach.)

Land and Freedom's narrative is artificially contrived to bolster the Trotskyite fable that the putsch by the centrist-Trot influenced POUM, the so-called Party of Marxist Unification, together with a breakaway from the mass anarchist group the CNT, could have been the start of the Spanish proletarian revolution but for "the Stalinists" who put it down.

Thus the film follows the journey of an active card-carrying member of the Communist Party from Liverpool to Spain where he joins the POUMist-anarchist militia on the Aragon front.

Of course such a regular member of the CP would have been drafted into the International Brigade but this anomaly is deliberate since it is through this 'hero's' journey from support for the anti—fascist struggle, to his demoralised decision to desert, that Loach and Allen attempt to make their twisted points. The development of revolutionary consciousness in the Spanish conflict, and the possibilities of social revolution during the Civil War, are undoubtedly an important study and one that would yield rich lessons for better Leninist leadership in the present day, but the Loach-Allen-Trot notion that the POUMist-anarchist putsch was the start of the Spanish revolution is certainly a Trotskyite fantasy concocted to heap another anti-Communist boulder onto the mountain of lies stacked upon the Soviet leadership before, during and after the Cold War.

The POUM and the break-away anarchists were not capable of any revolutionary leadership, as even Trotsky on his writings on Spain admitted. 

The POUM had influence only in Catalonia, principally in Barcelona and Lerida, and had no mass base elsewhere in Civil War Spain.
 
The anarchist were hostile to party leadership, a unified revolutionary army, and the creation of a workers state.

Both organisations had no clear policy to win over the majority peasant population of the country, and invited the hostility of the sizable regular army units loyal to the Republic.

In short the conditions that convinced Lenin for revolution in Russia in October 1917, - support for the Bolsheviks from the overwhelming majority of the advanced working class; backing from a sizable section of the peasantry with the promise of land (not collectivisation of agriculture, advanced by the film as a key unifying demand in Spain); and, crucially, support from a significant section of the disaffected Tzarist armed forces, - were totally absent in the Barcelona putsch days in May 1937.

Furthermore, the doomed adventure punched a 20 mile hole in the Aragon front as militias abandoned their lines for Barcelona allowing Franco to halve his forces there and send 20,000 men to the Madrid front where the bloody battle of Jarama was taking place in defence of Madrid.

Not surprisingly the putsch failed, with the mass of the Barcelona workers in the CNT at best neutral.

None of these crippling weaknesses are addressed in Land and Freedom which blames the failure of the POUMist adventure on the evils of Stalin. Stalin, says the 'hero' in one scene, is moving the workers movement around the "chess board" in order to sell-out the revolution and snuggle-up to the Western powers of Britain, France and the USA.

The suggestion that one man, with a perverse and unexplained desire to see workers struggles strangled at birth, wanted to advance a secret campaign to further Western capitalist interests in direct conflict with the workers state he leads, is the most wretched and stupid piece of anti-Communist nonsense imaginable.

And in what strange ways did this 'monster' Stalin go about his treachery. He and the Soviet leadership started by publicly denouncing the cynical 'Non-Interventionist' policy of Britain and France which became a cover for massive German and Italian Fascist support for the Franco forces.

While the two Axis powers flooded Franco Spain with 200,000 troops, thousands of planes, and tanks, — the 'sinister' Soviet Union defied 'Non—Intervention' and sent 2,000 of its own soldiers, 500,000 rifles, 15,000 machine guns and, in the closing stages of the conflict, $100M in economic aid.

The ONLY official support for the Republican side came from the Soviet leadership.

Of the 2,000 British Communist Party members who volunteered for the International Brigades (no doubt to do their 'counter—revolutionary' best), - one quarter died on Spanish soil. The head of the Republican Air Force General Cisneros maintains in his own memoirs that far from stabbing the struggle in the back, Soviet aid could have turned the tide against Franco, but for the sabotage of the Western powers who refused to allow arms, ammunition, troops and food across their own territories, forcing the Soviet Union to send the essential supplies by the dangerous Mediterranean route with great loss of shipping.

Not a single mention of ANY of these factors in the Loach-Allen diatribe; - what a stitch-up!

The more subtle argument, (certainly too subtle for Loach and Allen), - that Stalinism subordinated revolutionary support for the Spanish struggle through its overwhelming reliance on Popular Front policies, - is also suspect.

No doubt the growing influence of revisionist conservatism (and lack of confidence) in the Soviet leadership played a role in checking any advance of revolutionary consciousness; but it was hardly responsible for stopping a social revolution there any more than it was in Korea, China, Vietnam and Cuba, all of which were supported and armed by the Soviet leadership.

And against these weaknesses of revisionism must be balanced the lethal and gathering threat of capitalist encirclement of the Soviet Union. Even the best Leninist leadership would have been wary of being drawn into an open-ended political commitment to a struggle it did not control (the Communists took only 17 seats in the 300-odd seat Republican parliament in 1936), especially as capitalist butchers were looking for any excuse to stage an economic or military provocation against the Soviet Union at the time.

In fact the Soviet leadership efforts to head off this threat and widen the antagonisms between the capitalist powers as the Second World War for market and trade domination approached, - paid off brilliantly, culminating in the Stalin-Hitler pact which set one capitalist block blitzing another (before the inevitable military invasion of workers-state territory began).

But for this sound workers diplomacy, fascism would indeed have triumphed instead of having its guts ripped out on the Eastern Front.

It was the illusion-building in Popular Frontism, - and the growing suggestion that there could be a peaceful, parliamentary road to socialism, - that undermined the development of working class consciousness, - not the heroic physical support by the Stalinist leadership for the Spanish struggle.

Just how much Bolshevik—style consciousness developed in the Spanish masses, was an important question.

But one which is not even posed, let alone answered, in the crude anti-Communist Land and Freedom. 

The film's bitter distortions are a grotesque product of later-day Trotskyism, the fairyland where revolutions must be perfect down to the last fetching bandana worn round the neck of a student-like activist, and all problems, all difficulties, mistakes, retreats and defeats are put simply down to the devil called Stalinism. Such pitiful, unpleasant idealist crap!

Ironically the film makers themselves have yet to produce what would be a far more instructive dramatic study for the British working class, - the British Trotskyist movement with which they had a long, arms-length association. Let's have a documentary about the rise and fall of Gerry Healy, the Workers Revolutionary Party, and its Redgrave remnants who embraced Gorbachev and the oaf Yeltsin as symbols of the 'real' workers revolution of Russia and who conduct international propaganda exercises for the fascist Croatian nationalists. 

Let's hear about how the Trotskyite movement with its 'splendid' theory, abysmally failed to produced a party capable of developing revolutionary consciousness and nurturing correct scientific socialist ideas. Why not an examination of the methods of Trotskyite leaders like Healy whose subjective-idealist, administrative antics were worse than the worst examples of bureaucratic idiocy in the Soviet Union, (and indeed would have put plenty in the Gulag, given power, instead of the more farcical petty tyrannies of Clapham High Street.) 

The film makers are silent on all these issues, but when a little niche in the rancid anti-Communist bourgeois propaganda scene opens up, - you bet, they're there. SJ.

Only he is a Marxist who extends the recognition of the class struggle to the recognition of the dictatorship of the proletariat. This is the touchstone on which the real understanding and recognition of Marxism is to be tested.
V I Lenin
South West Bulletin
[P&P Bulletin Publications (South West), BOX 32, 82 Colston St. Bristol BS1 5BB]
No.146.   Sunday 12th November 1995

Imperialist crisis deepens.

It is the impending catastrophic acceleration of the imperialist crisis, largely unspoken or only darkly hinted at, but in reality dominating everything, which alone can explain the political landscape in Britain or anywhere else.

It is this spectre at the feast which at one and the same time dwarfs all the self-important set-piece battles of domestic political life, but also gives them a grim new significance unintended by any spin doctor.

The latest of a long string of judicial criticisms of the Home Secretary's disregard for the rule of law (this time over arbitrary interference in the "tariff" governing the length of a particular murder sentence) is a case in point.

For the two elite wings of the establishment brought into contention, and all their petty-bourgeois hangers-on in each camp, this is all about 'the right of the government to govern' or 'the supremacy of the rule of law' etc. But once set this wrangle into the context of Britain's collapsing imperialist prestige under the hammer blows of impending world slump, and the picture changes dramatically. 

All the pompous hot air on both sides whistles away, revealing both Howard and the Judges as fighting over a constitutional shadow, whilst real class authority gets harder to handle by the week. But at the same time, the farce of Howard's lengthening criminal record at the same stroke reveals its true significance as an index
of just how far gone is British imperialism, whether gauged by its level of class confidence when it comes to brazening out 'technical' infringements of its own bourgeois laws for the 'greater good' of its exploitation-needs as a ruling elite, or conversely in terms of impressing middle-class public opinion with its 'equal under the law' bourgeois democratic fictions.

Whatever ultimate 'kick the judges' fascist mileage may be hoped for, right now bourgeois authority is between two stools, lacking the courage of its own fascist wishful thinking, but losing command of its bourgeois democratic posturing ahead of time. Inflating Howard's unpaid debt to society by weekly instalments with no probability of payment is the worst of both worlds, debasing the bourgeois democratic coin at the same time as making the Home Office look ridiculous.

Again, it is the smell of Rome burning that gives all the fiddling around parliamentary politics a new significance, not the pathetic set-piece Lilliputian battles themselves.

The Nolan pretence that it was only a case of sniffing out a few 'bad apples' at Westminster was certainly scuppered in spectacular form by the biggest 'apple' of the lot first commissioning the report, then personally leading a revolt against one of its central recommendations (disclosure of influence-peddling), and then incompetently failing to bribe or intimidate enough votes to avoid a humiliating government defeat. Panicking 'rotten apples' spilled through both division lobbies, torn between fear of getting caught with their hands in the till and fear of getting caught voting to cover the whole corrupt mess up again.

But what the Westminster antics proved was of course not the 'victory of parliamentary democracy over a corrupt few' (no new 'rules' can ever be a match for the systematic corruption inseparable from bourgeois dictatorship), still less the 'victory of principled New Labour against Tory corruption'. (No longer held back by even any reformist lipservice to socialism, the anti-democratic yuppie-infested New Labour can be relied upon to expand ambitiously on old Labour's own well-documented record of sleaze.)

What all this bad acting in Westminster demonstrates is that greed, exploitation, corruption, backstabbing and intimidation (the only air capitalism can ever breathe freely in, at the best of times) are now being driven so unconcealably to the surface of politics by the merciless pressure of world crisis upon geriatric British imperialism that the shit is piling up faster than all bourgeois 'democracy''s little helpers can shovel it out of sight.

Whilst on a larger stage the spectacle is of Colin Powell deciding that the most glittering bourgeois prize of all is simply not worth the hassle of running for ("yet"), Britain must content itself with the sight of Major's recently hired PR chief walking away from the intolerably unsavoury task of trying to justify continuing bourgeois rule to the public.

Reports that Mawhinney is instead to recruit a 'fellow Ulsternan', previously involved in British Airways's 'dirty wars' against Virgin, to take on Labour's yuppie pitbull, only further underline the bankruptcy of capitalist leadership. With the real 'Ulstermen' (and Cork men and Donegal men etc. etc.) on their way to giving all such colonist mentalities their long-deserved marching orders (and for that matter with BA's spoiling campaign having turned into such a costly own-goal), such an appointment hardly inspires confidence in any future public relations triumphs.

And whilst the German SPD 'socialists' take the plunge into trade-war chauvinism, posing as the real champions of a strong Deutsche Mark (capitalizing on lively memories, now stirred back into life by renewed world crisis, of how last tine around defeated Germany's imperialist rivals tried to shove all the crisis burdens onto Weimar in the form of annexations, reparations and hyperinflation), the Blairites still crouch slavishly in the Tory shadow with their latest attempt at a 'big idea'.

Their new workfare gimmick is hardly original. Insulting the workless (already outrageously injured by a 'free market' system which dictates their labour to be surplus to requirement) by threatening to wipe out 40% of their benefits if they fail to jump through whatever pretend-work, pretend-training or pretend-education hoops parliamentary cretinism can devise, is hardly even a new policy, but is more or less what most unemployed are already putting up with anyway, only with knobs on. Like all New Labour's shadow-boxing, everything's in the symbolism, in this case the 'communitarian' posturing of stressing the right of 'society' (capitalism) to enforce its 'citizens' (workers) to accept 'responsibilities' (exploitation and neglect) in return for 'rights' ('yet to be determined in the relevant New Labour working party document, subject to rigorous costing' etc.etc.).

And if the best solution New Labour can offer to mass unemployment in the relative affluence of the UK is to have Gordon Brown and Dawn Primarola clucking round some makework/training centre on a photo-opportunity, with cheesy grins up front and a coercive stick behind the back, then what do they propose to do about the inability of the 'free market' system to organize modern social productive development across, say, great swathes of the African continent?

For example, it is the exploitative unevenness of all imperialist productive development which keeps sections of the Nigerian population neglected for years, untouched by any of the benefits of modern progress, stranded in the narrow drudgery of low-level small-scale production. It is the logic of imperialism again which at a certain point compels a multinational monopoly to invade this enforced backwardness, shoving its snout in to pull the oil out from under the community's feet. And it is the ruthless competitive 'free market' system which dictates that Shell must do this as cheaply as possible so as to keep its profit edge on the world market, in the full knowledge that if Shell doesn't, another monopoly competitor will.

To sustain that profit margin, the extraction of mineral wealth must not only be conducted in such a way as to keep to a minimum any quid-pro-quo in the way of social progress, but must trample on the rights and livelihood of any community whose existence is surplus to the capital-accumulation requirements of monopoly. In Ogoniland, as in countless other corners of the planet on which the capitalist press habitually keep silence, this meant the Anglo-Dutch Shell oil monopoly polluting their fields and fishing grounds and poisoning their children, and then leaving them to cope with the ecological and social aftermath when the growing political heat made further operations in the area 'counterproductive':

THE OGONI, who comprise six kingdoms and are a distinct ethnic group, argue that they have received next to nothing from the oil industry. Instead, they say, they have paid with their land and health and been economically and socially marginalised by both state and oil industry.

They have many social grievances: few Ogoni households have electricity, there is only one doctor per 70,000 of the population and one hospital for 500,000 people. 

None of the four Ogoni languages is taught; unemployment is 85 per cent; only 20 per cent of the population is literate; up to 40 per cent of Ogoni youth now lives outside the area in search of work. Moreover, there is no piped water and the average life expectancy, at 51, is three years' lower than Nigeria as a whole.

Ogoniland. on the coastal plain of the River Niger, is very flat and very small. The densely populated 404 square mile strip of land is home for 500,000 people, most of whom live by fishing and farming.

In fact it has supported much of Nigeria for 35 years. In the 50 years since Shell was given permission by the British to trade, and since 1958 when it began drilling commercially for oil, Ogoni lands are estimated by Mosop to have yielded more than 900 million barrels of crude. There are 10 oilfields there, over 100 oil wells, a petrochemical complex, two oil refineries and, until Shell pulled out, seven gas flares burning 24 hours a day. The oil industry, dominated by Shell, has crisscrossed the land with pipelines and divided it with canals.

Ogoniland's economic importance for Nigeria, where oil is the most powerful focus for all political action — providing more than 95 per cent of all foreign currency earnings — is waning as new oil fields are found and opened. Shell now. downplays Ogoniland's significance saying it accounted for less than 2 per cent of Nigeria's total oil production when it was forced to pull out after the uprising. In peak years, however, it produced some 10 million barrels of oil a year — many billions 'of dollars a year in tax revenue for the federal government.

Ashton Jones's report for Pro Natura, a Brazilian-based group, details badly-maintained and leaking pipelines, polluted water, fountains of emulsified oil pouring into villagers' fields, pools of sulphur, blow-outs, air pollution, canals driven through farmland causing flooding and disruption of fresh water supplies, footpaths blocked by pipelines, drainage problems, polluted wells, inordinate delays in repairing faults and continual noise. "Some children have never known a
dark night even though they have no electricity", he says.

During the military government crackdown in Ogoniland, in which up to 1,800 people allegedly died, an army major planned the devastation of many villages, illegal detentions, torture and human rights violations.

Shell Nigeria stopped oil production and withdrew most of its staff from Ogoniland, a small, densely populated area in Rivers State, in January 1993 after environmental protests by up to 300,000 people led by Ken Saro-Wiwa, the Ogoni author and winner of the alternative Nobel prize. Shell claimed it left because its staff were being intimidated.

A memo dated May 12, 1993 from Major P. Okuntimo, chair of the Rivers State internal security task force based in Government House, Port Harcourt, recommended a "ruthless military operation" by 400 soldiers to suppress opposition to oil company activities.

Maj Okuntimo called for the military sabotage of oil company equipment — which could then be blamed on Ogoni activists — the "wasting" of political opposition, the use of "psychological" tactics, and surveillance to justify turning Ogoniland into a military operation. Within 10 days of the memo being sent to the military administrator of Rivers State, four Ogoni tribal leaders had been killed, burnt in a car, political opposition meetings had been broken up, and villages devastated.

Shell International has consistently denied responsibility for the political unrest in Ogoniland. A spokesman yesterday said Shell had not paid money into a fund for military protection, as suggested by the memo which recommends that pressure be put on the oil companies working in the area for "prompt, regular" payments for the military operation.

"It is totally unjustified to suggest that Shell, by virtue of endeavouring to carry out its legitimate business of oil exploration is in some way responsible for such conflict or the level of the Nigerian government's response to them... private companies have neither the right nor the competence to become involved", says David Williams, a Shell International spokesman.

It is a traditional, some would argue convenient, response of large mining companies to distance themselves from the politics of the states where they operate, and to stress that no links should be made between their operations and social unrest. Shell has weathered similar local hostility over its involvement in defying oil sanctions and supplying fuel to the South African police and military in the 1970s, its leases on millions of tonnes of Crow Indian "tribal" coal in the US, its road-building in the Amazon and its control of seed companies.

The company argues that the underlying grievances of the Ogoni are not environmental but political and economic.

Shell are only trying to make capitalism work, like New Labour now happily admit to wanting. If all these 'negative' elements keep getting in the way of the free working of the market, then 'that's a political problem, not a commercial problem'. Shell PR provides the cheesy grins, and relies on imperialism's local stooges to provide the big stick. Those in New Labour who now posture as friends of social justice and democracy in Nigeria had better start explaining what other way they suppose capitalism can ever work.

Nigeria, as the most populous and oil-rich nation in Africa, has for years been (along with apartheid South Africa hitherto) a major imperialist handle on control of the continent. It is a massive purchaser of UK exports, in particular illegal arms 'exports, as well as a huge oil market.

Whilst the need to keep social revolution off the agenda may oblige Major and the joke Commonwealth to deliver a slap on the wrist for the government's butchery of Ogoni activists, what put those butchers there in the first place was imperialism, and any successor regime will be entrusted with exactly the same unsavoury task of defending by all means necessary the right of capital to super-exploit as much of the world as it can digest, spitting out the rest as surplus to capitalist requirement.

Some fascist apologist for the Port Harcourt hangings shrugged off the Commonwealth's belated condemnation by saying the West would have forgotten Saro-Wiwa in a couple of weeks. This may turn out to be true, unless oil boycotts somehow get caught up in a more general imperialist rivalry over the control of oil markets. (With US-imposed boycotts against Iran, Iraq and Libya already provoking resentment amongst rival traders, and reactionary mad-dog Zionism once more throwing all Middle East oil calculations into doubt, Nigeria could prove a boycott too far.) But the infamous abuse of the tiny Ogoni people is restated a million times all over the third world. This is what makes concrete, Marxism's theoretical assertion that capitalism is doomed to make its rule intolerable to the very social forces which its node of production draws inexorably into modern existence. And what is making this bloody and intolerable reality of imperialist rule blow up in pious Commonwealth faces in Auckland,- making a liar out of every buck-passing, 'democratic', 'well-intentioned' imperialist leader, as well as mercilessly showing up the cracks in even the most 'progressive' positions being advanced from some in the third world,- is not just an arbitrary moral crisis sparked off by some 'unfortunate bad timing' from the monsters in Lagos', but rather the intolerable pressure of the world imperialist crisis breaking through.

The difficulty with predicting just what will finally prove decisive in causing the capitalist system to unravel again all the way back into outright slump, war and revolution (as twice before, but now with the productive forces raised by capitalism at an incomparably higher level, and with the world bourgeoisie looking more like a spent historical force than ever before) comes not from any convincing appearance of stability but rather from the confusing abundance of possible triggers.

Capitalism itself sometimes seems eager to start guessing which day will mark its nemesis, perhaps out of some primitive sense that by naming what is most feared, it might never happen:

The US budget battle has come down to the wire. The government is close to its official debt ceiling and a temporary resolution, allowing Washington to function in the absence of a budget, expires on Monday.

The unthinkable is being mentioned. On Wednesday, $25bn (£15.8bn) of interest payments are due and President Clinton's aides were describing default as "increasingly likely". But until (yesterday the financial markets seemed blasé. On Wednesday, the Dow Jones Industrial Average closed at an all-time high.

In part this lack of concern reflects the conviction that the politicians will strike a deal. Mr Mike Rosenberg, managing director for international fixed income research at Merrill Lynch in New York, said: "I can't conceive that the US will default, even only for a day."

"Some commentators do not think it will be too significant if a default does occur. 

"Is it necessarily bad for Treasuries if you get a default, if that default is the result of arguments over how to cut the deficit in the long term?" asks Mr Nigel Richardson, head of bond research at Yamaichi International in London. "Does it alter the willingness or ability of the US government to pay off its debt? We are not looking at a Mexican-style default."

But US investors may be underestimating the impact that even a technical default would have on confidence outside the country. Mr Jonathan Francis, head of global strategy at Putnam Investment Management in Boston, says: "The perspective of investors outside the US on the problem is much more serious. To international investors, it is inconceivable that a country like the US could default on its debt." 

Some fund managers may have covenant constraints which prevent them from investing in defaulted securities, forcing them to abandon the Treasury bond market.

Mr Youngdahl says: "A default would have very significant consequences and they would be negative - higher bond yields in the short and medium term and a higher risk premium for US bonds and currency." Indeed, the effect of default would be made worse because the markets have been predicting that it will not happen. The rest of the world will be hoping that the US's confidence in its politicians is not misplaced.

THE Clinton administration yesterday stepped up its warnings that congressional Republicans will force the US into an unprecedented default unless they drop conditions on legislation to raise the $4.9 trillion federal debt limit.

The war of words between the White House and Congress, as well as increasing worries that the political brinkmanship could precipitate a crisis which would prevent the US from servicing its debts, unsettled the financial markets, with bond prices easing and the dollar slipping back against the mark and the yen.

Treasury Secretary Robert Rubin warned that a default would call into question the integrity of the US in meeting its commitments and increase the costs of borrowing for years to come.

The US will hit its federal debt ceiling in the next few days and congressional action is needed to raise the limit. The crunch will come next Wednesday when more than $55 billion in interest and principal on government debt comes due. Another $44.4 billion in Treasury bills will mature a day later.

As the unthinkable became a possibility, the benchmark 30-year Treasury bond sank nearly half a point, pushing up its yield nearly four basis points to 6.29 per cent, while the dollar slipped back towards the 100-yen level.

While Wall Street analysts believe that both sides will pull back from a "budget train wreck", they say the game of chicken could damage America's financial reputation.

Six former Treasury Secretaries also weighed in on the dangers of default. In a letter to Newt Gingrich, they urged the House leader not to "put a gun to the head of the President and the head of the country".

And whilst this, weird game of Russian roulette is being played with the world dollar economy (is there any point planning anything on Wednesday?), Mexico continues to stagger from crisis to crisis, with the rest of Latin America not far behind.

Fears of a default fed into currency markets and, along with fears about the growing financial crisis in Mexico, caused the US currency to fall against the yen and the D-Mark.

Uncertainty surrounding the Mexican peso yesterday spilled over into the Brady bond market with prices of bonds issued by a number of emerging market sovereign borrowers falling sharply. By the close in London Brady bond prices had fallen by 0.8 per cent on average. Mexico was one of the worst performers with its bonds falling 1.5 per cent. 

The fall is still a mere blip compared with the fall in prices that followed the Mexican devaluation last December, but concerns about the political and economic prospects for Mexico, Argentina and especially Brazil have been growing recently.

In a research note this week Deutsche Bank Morgan Grenfell pointed to growing concerns about Brazil's widening fiscal deficit and growing internal debt. The three Latin American countries have issued $104bn in Brady bonds, and account for more than two-thirds of the total of $145bn.

Analysts say one of the main factors holding up the market is the strength of US Treasuries and US zero coupons which provide collateral for Brady issues.

Given the FT's earlier suggestion that US Treasury bands themselves will be dropped like hot bricks if the US government can't service its enormous debts, this admitted Mexican reliance on those sane bonds for collateral is hardly reassuring. And these new troubles for the USA's southern 'partner' in NAFTA come hot on the heels of French imperialism's recent open support for a secessionist plan to break up the Canadian state which is supposed to be holding up the other end of the 'free trade alliance'.

Meanwhile, the competitive concentration of capital gets progressively nastier and riskier, with Japan's finance ministry imposing a temporary ban on some of the Tokyo operations of America's biggest investment bank, Merrill Lynch, (for 'violation of trading rules', but in transparent retaliation for the Fed shutting down Daiwa's US operations), and with the 'rescue' of Daiwa triggering a major new concentration of Japanese finance capital:

The continuing after-shocks of the Daiwa Bank affair suggest the next big upheaval may already be in progress.

So far it seems one immediate effect will be the disappearance of Daiwa - likely to be merged with the larger Sumitomo Bank. This will create the biggest bank in the world. But the longer-term implications are more far-reaching and could result in the biggest upheaval of the system in the post-war period.

A Daiwa-Sumitomo merger would open up a rift among the country's hitherto roughly equal leading banks. The six largest city, or commercial, banks are remarkably similar in scale.

But next year that cosy club is already set to be shattered. Mitsubishi will break from the pack by merging with Bank of Tokyo, which is in the next tier of financial institutions. The new bank will have assets of more than Y61,000bn. A Sumitomo/Daiwa bank, which would be about the same size, would put the two merged companies in their own league. That would leave the other four former proud members of the Big Six - DKB, Sanwa, Sakura and Fuji - as a rather less impressive Middle Four.

That alone is incentive enough for them to search for partners

most intriguing is not simply which new alliances may form, but how those alliances could alter the contours of Japan's heavily regulated financial environment.

For most of the post-war period Japan's financial institutions have been rigidly segregated into their various specialist areas - city banks, long-term credit banks, trust banks, regional banks and brokers - all operated behind high regulatory walls. But in the last five years, through accident and design, those walls have started to crumble.

Always anxious to avoid the risk of instability, the ministry has kept the pace of liberalisation in check. But now the unfolding crisis is forcing the pace.

Two years ago, Daiwa Bank itself was permitted to buy Cosmo Securities, an affiliated broker, which had fallen into financial difficulty. In the process it became the first bank to run a fully fledged broker. Then last year, a similar concession was granted to Mitsubishi Bank, when a related company, Nippon Trust, a trust bank, had to be rescued from near-collapse. Mitsubishi was allowed to continue the trust-banking operations. Should Sumitomo buy Daiwa, it is virtually certain that it will be allowed to take over Daiwa's own trust-banking licence.

While the justification for these was that they were exceptional cases, the more such cases emerge the harder it becomes for the authorities to resist a wider breakdown of the regulatory barriers. In any case the ministry has little choice. It wants to hasten a consolidation of the banking sector and the only incentive it has to persuade banks to take over ailing institutions is that they will receive another" licence.

"I think you will now see real movement towards consolidation, not between institutions of the same type, but between institutions of different categories," said an official at one of the largest banks.

And there is an urgent incentive for the stronger banks to re-organise quickly. The finance ministry may yet prevail on the fittest to bail out the weakest. The sooner they can align themselves with a less troubled partner, the less likely they are to face pressure from the authorities to launch the lifeboats.

The probable outcome is the gradual evolution of the banking industry into four or five very large groups.

And just when, at the very least, it is becoming clear to all honest observers that competition, rivalry and mutual suspicion (and much worse) are the guiding lights of modern capitalist existence, — rather than the promised post-communist harmony, peace and prosperity, — it turns out that even the revisionism-addled, capitalist-subverted former Soviet socialist camp can't be relied on to stay good and buried:

At the St Kaziraierz church in the working-class district of Dolny Mokotow in Warsaw, Father Nowak dispensed last-minute advice to his flock: "Poland needs a leader with a clear conscience," he preached. "Someone who does not share responsibility for the unrepented sins of an evil system."

The Catholic Church, a bastion of opposition during the communist era, has been actively waging an anti-Kwasniewski campaign.

After the service at St Kazimierz, hundreds of worshippers queued outside polling booths. There was evidence that Fr Novak's sermon had aroused emotions. "The communists cheated us for 45 years," said Jerzy Zielinski, aged 50. "Now they're trying to do it all over again."

He was voting for Mr Walesa because "he is a true patriot".

When man in his mid-30s admitted voting for Mr Kwasnieski, churchgoers peppered him with insults and he was forced to flee.

But a widow's advanced age spared her similar treatment when she said she would cast her vote for Mr Kwasniewski. "I worked all my life for Poland," said Magdalena Sierocka. "Now I can't even survive on my pension. I feel abandoned, betrayed."

She was echoing the sentiments of many of Mr Kwasniewski's supporters, who have been hard hit by market reforms introduced by Mr Walesa. They yearn for the extensive social security net that the old system provided.

Russia's parliament will today debate changes to the country's election law to head off a communist victory in the December 17 parliamentary elections.

The move is part of a broader attempt by Russia's political and economic elite to keep the communists out of power. It gained momentum yesterday when the Supreme Court asked the Constitutional Court to rule on the validity of the election law.

If the court declares the legislation to be unconstitutional, it will be impossible to vote for a new parliament until another election law has been passed.

Opposition parties, including the most popular reform group, have denounced the campaign - which includes proposals to have the elections declared invalid after they have taken place - as a threat to Russia's fragile democracy.

The campaign reflects mounting fears among Russian political and business leaders that communists and their nationalist allies could win an overwhelming victory.

Mr Ivan Rybkin, speaker of the lower house of parliament, said the legislature would today consider two amendments.

The first is a proposal to scrap the 5 per cent threshold which political parties must exceed in order to win any of the 225 seats distributed by proportional representation among the parties.

At least 40 parties are likely to contest the election, and dropping the threshold would allow a number of marginal parties to win seats, diluting the communist and nationalist presence.

The second proposed change is for a second round of voting between the two leading candidates in each constituency under the first-past-the-post system. This is seen as a way of uniting fragmented pro-government forces against the communists. If these changes are not adopted by the parliament, the elections could even be postponed.

"It is very possible that the elections will not take place as scheduled," said Mr Vladimir Shumeiko, chairman of the upper house of parliament. But Mr Shumeiko, who is allied to the president, said: "Nothing terrible will occur if the elections are postponed."

What plans do the Solidarnosc-loving British left have for putting pressure on this clerical-fascist tyranny to restore to working people in Poland their democratic right to a secure productive existence in a workers state? And what kind of pressure do New Labour or the "left" propose to bring to bear to prevent this very undemocratic attempt to reorganize the entire Russian parliamentary system around the exclusion of popularly acclaimed 'communists'?

No, it's all right chipping in over the big bourgeois shoulder to urge the recalcitrant imperialist stooges in Nigeria or Haiti or Guatemala to 'please clean up your act before you drop us all in it'. But as soon as it's a question of calling for something to be done that actually makes a difference (unlike Aquino or Aristide or Abiola), something that actually takes account of what has been learned in this century about what really does or doesn't advance the class interests of the world's oppressed masses, then the great 'left' and Labour intelligentsia just don't want to know. When it comes to recognizing that the only real democracy that working people can in the end secure for themselves in the teeth of imperialist crisis is that won by overthrowing the capitalist state and putting in its place the dictatorship of the proletariat, and doing so on the broadest possible perspective of world revolution,- then the British 'left' can't be seen for dust.

Except they have a problem, which is that contrary to New Labour fantasy, the working class has not disappeared, continues to develop its own class experience under sharpening slump conditions, has reason to be bitterly sceptical about the whole experience of reformism which is now coming to an end, no longer shows any sign of recognizing Labour as being anything to do with its interests, and is sooner or later going to be demanding some more serious attempt at political explanations and leadership which starts to get a bit beyond both the nauseating market rhetoric of all the Westminster frauds and the kindergarten anti-communism of the Trots. Cue Scargill:

CHANGES in the Labour Party under Tony Blair's leadership have made the case for a new Socialist Labour Party overwhelming, according to Arthur Scargill.

In a nine-page discussion paper, the NUM leader floats the idea of a new party, to be called the Socialist Labour Party, which would be founded "on the basis of class understanding and class commitment".

Radical opposition in Britain is no longer symbolised by Labour but by organisations such as the anti-poll tax movement, Greenpeace, and other groupings outside the political mainstream.

"A Socialist Labour Party would be able to galvanise mass opposition to injustice, inequality and environmental destruction, and build the fight for a socialist Britain…

"It would require a simple socialist constitution and a structure designed to fight our class enemies. This structure would demand an end to internal wrangling and sectarian arguments," he says.

Mr Scargill calls for a "discussion" conference of sympathisers, which would decide on a constitution and party structure. An inaugural meeting would ideally be held on May 1, 1996.

Mr Scargill disagrees with left-wingers who are determined to "stay and fight" within the Labour Party.

He compares the formation of a new party in 1996 to the early years of the Labour Party, when many in the trade union movement believed the Liberal Party was the right parliamentary vehicle for the promotion of its interests.

A discussion paper presented by the National Union of Mineworkers president at a weekend meeting in London raised the possibility of founding a trade union-based Socialist Labour Party on May Day 1996, to stand candidates in every constituency in the country. Yesterday, however, he said it should not oppose "socialist MPs".

Mr Scargill said a further meeting would be held soon under the auspices of the Unshackle the Unions Campaign — a pressure group for the repeal of anti-union laws — to consider the response. "The reaction from all levels of the movement will determine what the end result is."

The miners' president first floated the idea of a leftwing party last month after changes to Labour's constitution including final rejection of the traditional Clause Four commitment to common ownership. But the suggestion that it could be set up before the next election has taken activists by surprise.

There was some backing for Mr Scargill in Scotland, where 40 activists attended a meeting in Glasgow this week to discuss his proposals. Tommy Sheridan, leader of Scottish Militant Labour, which has won several council seats from Labour in the city, described them as a "positive development".

Among the unions represented at the weekend meeting were the Rail Maritime and Transport union, the public services union Unison and the building workers' union, Ucatt. One senior leftwing union official opposed to the NUM leader's proposal said yesterday: "Blair has to understand that dissatisfaction goes far wider than those putting their heads over the parapet for a new party. This will at least start a debate about what should be done."

Whether this could ripen into some recognizable version of 'centrism' (revolutionary in appearance, reformist in essence), or is doomed to be just a nostalgic retirement hone for old reformists remains to be seen. But with or without Scargi11's assistance, the class-struggle contradictions at the heart of the developing crisis will sooner or later bring the whole debate about the revolutionary future of the working class roaring back to the surface of political existence. And when it does, the fight for Leninist proletarian dictatorship science will be ready to have its say.

Fight for Leninism. 

Build the ILWP. DH (Dominic Hull)

For the record; How the capitalist press admitted that the British bourgeois state kept Nazi Edward as reserve Empire leader to help winning German imperialism rule on, should the UK lose.

DOCUMENTS and interviews revealed today expose for the first time the full story of how King Edward VIII, later the Duke of Windsor, plotted to betray his country to the Nazis — and how the Royal Family has spent half a century attempting to cover up its shameful past.

History has treated the Duke indulgently, depicting him at best as a romantic who gave up his throne for love, at worst a weak, vain man with strong right-wing sympathies but politically harmless.

However, secret police reports obtained by the Observer, and a Channel 4 Secret Lives documentary being screened this week, reveal a man bent on revenge for being ousted from the throne, prepared to use the Nazis to foment a revolution in wartime Britain that would topple the Churchill government, depose his brother King George VI, and allow him to regain the throne with Queen Wallis at his side.

For Britain, struggling for survival during the Blitz and fearing a Nazi invasion, the most dangerous moment came in the summer of 1940 when Nazis and their agents in Portugal and Spain brought to a head a plot to woo the Duke to their cause.

The Observer has obtained a document from the newly-opened archives of the Portuguese dictator Antonio de Oliveira Salazar's secret police force, the PVDE, which shows that the Duke was an active player in the plot — using his car to ferry the conspirators around, allowing them to meet at his house, engaging in a constant shuttle between the German, Spanish and British embassies in Lisbon — and portrays a man in a state of agitated indecision.

The Duke and Duchess had gone to Spain and then Portugal after the fall of Paris. Both countries, officially neutral, were a hotbed for spies. Kim Philby, M16 head of station there, described Salazar's attitude to the Germans as one of 'amiable hospitality'. The ducal party stayed at the resort town of Cascais, near Lisbon, in a villa belonging to the pro-German banker Ricardo Espirito Santo, whose hospitality had been engineered by the German ambassador, Baron Oswald Hoyningen-Huene.

Gradually the pace of the activity built up until finally the Nazi Foreign Minister von Ribbentrop consulting with Hitler, sent Walter Schellenberg, head of Gestapo counter-intelligence, to Lisbon on 26 July. The next day the Spanish ambassador Nicolas Franco (General Franco's brother) talked to a Portuguese diplomat, Luis Teixeira Sampaio, who recorded their conversation: 'Don Nicolas told me the Duke... didn't want to accept the Bahamas appointment. Now he has the British Government doesn't want him to be either in Portugal or Spain, or in the United States. Apart from his volatile personality, which made him difficult for his ministers, and was one reason for the abdication, the Prince is still a reserve, the only one in the case of turmoil in the British Empire…

'If there was turmoil as a result of war, no one would like to see an institution like that collapse into anarchy. The Duke of Windsor, free from the responsibilities of war, in disagreement with English politicians, could be the man to put at the head of the Empire.'

Sampaio commented: 'This reminds me of what the German ambassador said of the Duke recently: "C'est notre premier President de la grande republique Britannique"'.'

The spy's nine-page report is the only document about the Windsors' stay to survive what appears to be a 'weeding' of the Salazar archives. The many reports that should have surrounded such an important episode are missing.                         

Files on the Duke in the Public Record Office and the Royal Archives at Windsor Castle continue to be withheld. Indeed, the Royal Family has taken extraordinary steps to keep secret information about his wartime activities, according to the Secret Lives programme.

Douglas Price, an academic who had worked at Allied headquarters, told the programme how, in June 1945, Anthony Blunt, an MI5 officer just appointed as Surveyor of the King's Pictures, was sent to Kronberg Castle in Germany — ostensibly to secure letters written by Queen Victoria. Price reveals how Blunt was on a secret mission from King George VI to retrieve letters from the Duke showing his close links with Hitler and other Nazis. Price describes how he saw Blunt smuggle out the contents of a cabinet containing the damning evidence about Edward.

In 1964 the Queen, it is alleged, specifically stated that, during interrogation Blunt should not be questioned about his mission to Kronberg Castle.

The Royal Family's interest in the affair continues today. On Tuesday, ITV will announce its own version of the Edward VIII story, presented by Prince Edward.

This week's revelations are likely to cast a long shadow over Prince Edward's programme. The Traitor King describes how in October 1937, the Duke and Duchess visited Germany as Hitler's guests. Sir Dudley Forwood, the Duke's equerry, tells how the couple visited an SS training centre and a concentration camp for political prisoners. They twice had dinner in Munich with Rudolf Hess, Hitler's deputy.

The Duke's manoeuvring in the Bahamas are revealed in a remarkably candid conversation in 1940 with an American journalist, Fulton Oursler, in which he states that it would be a tragic thing for the world if Hitler was overthrown'.

Alfred de Marigny, another acquaintance, says he was told by Edward: 'After the war is over and Hitler will crush the Americans... We'll take over... They didn't want me as their King but I'll be back there as their leader... We are the strong people, the Germans and us.'

In the Bahamas, the duke and a tight circle of businessmen around him — Sir Harry Oakes, Harold Christie, and Wenner Gren — indulged in a series of illegal currency deals involving millions of dollars. He continued his illegal currency transactions in Paris after the war, at a time when British taxpayers were providing him with £100,000 a year tax-free. According to his private secretary, Victor Waddilove, over a 10-year period the duke made a profit of about £200,000 — £2.5 million in today's money. Andrew Roberts, the historian who first revealed the full extent of the fraud last year in his book, Eminent Churchillians, says: "The reason why no one has heard anything about this before... is because of a classic Establishment cover-up."    •