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Millennium Crisis
The rich and
super-rich are doing fine: record profits, low taxes. Many middle-class people and some
sections of workers are enjoying a few crumbs from the capitalists’ table. But
let’s take a wider view. Who can seriously argue that capitalism is a successful
system?
A majority of the world’s population are currently suffering from one or more
of the following (mostly life-threatening) problems: low pay, excessive working hours,
hazardous working conditions, unemployment, poverty, food shortages, inadequate shelter,
disease and non-existent health care, environmental degradation, war, banditry,
dispossession, persecution, violent political repression…
Every day, crisis symptoms are reported on TV news and in the press.
SYMPTOMS
CREEPING SLUMP
Wall Street, London and other western stock exchanges are still soaring. The bubble
economy is driving the United States, Europe is growing moderately. But Japan is still
locked into its ten-year stagnation. Half the world, in fact, is now gripped by slump,
steadily creeping around the world since the 1997 Asian currency crisis. With a new wave
of mergers, finance, production, services and trade are more and more concentrated into
the hands of a tiny number of multi-national corporations. The globalised world market is
dominated by highly volatile flows of speculative capital. Brazil is in recession, pulling
other Latin American economies down. Far from reviving Russia and Eastern Europe, the
capitalist market economy has brought the worst economic depression in modern times,
recalling the medieval plague or the Thirty Years War.
SOCIAL CRISIS
The unbound market is digging a chasm of inequality into the foundations of the advanced
capitalist countries. The US leads the way: the wealthiest 1% own over 40% of all wealth,
more than the bottom 92% of the US population. The media focuses on ‘winners’,
but there are far more ‘losers’. In the US, 45 million live below the poverty
line, without healthcare. In the EU, 50 million people live in poverty, 18 million are
unemployed. Drug abuse, crime, etc, are rising. The crisis in the semi-developed and poor
countries, weighed down by massive debts, is much worse. The bottom fifth of the
world’s people share only 1% of world GDP. Seventy countries are poorer in the 1990s
than they were in the 1980s.
WORLD DISORDER
When the Soviet Union collapsed and the US launched the Gulf war in 1991-92, US president
Bush proclaimed a New World Order. The US superpower would maintain peace and stability.
Despite its immense power, it has failed miserably. Nationalistic leaders carried out
massive ethnic purges in former Yugoslavia. Nato bombing failed to avert a humanitarian
disaster in Kosova, and has pulverised Serbia. US forces have pulled out of Somalia and
Haiti without any problems being solved. The Indonesian military were allowed to lay East
Timor to waste before the Australian-led UN force went in to protect western interests
(especially oil).
The ‘Cold War’ supposedly ended in 1989-90, but the US (and Britain and
France) and Russia (and China) still have huge nuclear arsenals. Clinton has revived
Reagan’s ‘Star Wars’ plan, a hugely expensive anti-missile system. In 1998
India and Pakistan (once again a military dictatorship) carried out nuclear tests. The US
Congress recently refused to ratify the Nuclear Test Ban Treaty, encouraging other
regional powers to demonstrate their nuclear capacity.
WAR
The 20th century opened with the first world war (26m dead), continued with the second
world war (54m dead), and ends with war. Apart from Bosnia and Kosova, there is a
continental-scale war in Central Africa. Since 1989: 61 major armed conflicts, three
between states, the rest civil wars (often with the intervention of outside states).
Symptoms of deep social crisis, and they aggravate the crises even more.
ENVIRONMENTAL
CATASTROPHE
The giant multi-national corporations treat the natural world as a consumable resource,
just another source of profit alongside human labour. Besides disturbing the normal
climate, global warming will have unimaginable consequences. Deserts are spreading,
rainforests being destroyed. More air pollution, more respiratory diseases. Both food and
land are contaminated by intensive farming methods (chemical fertilisers, pesticides,
over-farming, etc). Attempts by capitalist governments to curb pollution and prevent
environmental destruction are pathetically inadequate.
POLITICAL
MALFUNCTION
Liberal democracy supposedly triumphed after the collapse of ‘communism’, but
parliaments and parties everywhere have been hit by corruption (‘sleaze’)
scandals. Paedophile and food-poisoning scandals in Belgium, Kohl’s slush fund in
Germany. Traditional capitalist parties have been discredited (British Tories, CDU in
Germany). Opposition parties (Labour, Social Democrats, etc) and former Communists (Left
Democrats in Italy, etc) have swallowed free-market policies and are trying to manage
capitalism. Voters are increasingly abstaining (less than a third vote in US elections),
or giving protest votes to mavericks (Jesse Ventura in the US) or right-wing populists
(Haider in Austria). Denied a voice, workers, farmers, students, have increasingly taken
to the streets (public-sector strikes in Europe, mass demos outside WTO meeting in
Seattle). There’s deep cynicism about all establishment parties and politicians, with
growing recognition that big business manipulates governments and bribes politicians. The
‘democratic legitimacy’ of capitalist governments has been drastically
undermined, politics has become much more volatile.
SETBACKS FOR
WORKING CLASS
Workers throughout the world, despite many great struggles, have suffered some severe
setbacks during the 1980s and ’90s. De-industrialisation, deregulation of finance and
industry, privatisations, globalisation processes, high unemployment – reinforced by
the aggressive free-market policies by capitalist governments – have undermined many
of the gains made by the working class during the long post-war economic upswing 1950-73.
Politically, the leaders of the Labour and Social Democratic parties, the trade unions,
proved incapable of defending working-class interests. The severe weakening of the left,
rank-and-file organisations, etc, made things worse. The disarray of the workers’
movement allowed the capitalist class to get away with murder, enormously intensifying the
exploitation of the working class in the advanced and the underdeveloped countries.
DIAGNOSIS
SYSTEMIC CRISIS
The symptoms are all interrelated, adding up to a fundamental crisis of the system.
It’s not a temporary, passing sickness: it is deep-rooted, long-term.
ECONOMIC
DEPRESSION
Despite the booms in the 1980s and 1990s in the advanced capitalist economies and a
handful of ‘Tigers’ or ‘emerging markets’, the world economy moved
into a state of depression after 1973: high unemployment, huge pockets of poverty,
relatively slow growth, and pathetic productivity growth despite the appearance of new
technology (computers, rapid communications, new materials, etc). Financial speculation
dominates manufacturing activity. Markets are highly volatile. Globalisation spreads
crisis rapidly around the world.
OBSOLETE SOCIAL
SYSTEM
The modern economy depends on harnessing the resources of the whole of society (workforce,
infrastructure, social structure). But the factories, most services, most transport, etc
are owned by a tiny majority, the capitalist class, who also control the state. Their
egotistical pursuit of profit accumulates enormous wealth into their hands. The reduction
of the share going to the working class, plus cuts in social spending, not only
impoverishes the working class but cuts the market for capitalist goods and services,
aggravating the crisis. Private ownership of the means of production is an absolute
barrier to broad, sustained economic growth.
NATIONAL
ANTAGONISMS
Despite the immense power of the world market, increased by globalisation, the capitalist
world is still divided into rival national states. There is a sharpening polarisation
between a handful of major economic powers (US, Japan, Europe) and a host of states which
are falling further behind, some declining absolutely. There are major trade conflicts
between the big powers (US and EU). Some poorer states are collapsing (Congo, Indonesia).
National antagonisms, breaking out into armed conflicts, underlie the new world disorder.
Even the most powerful nation states cannot guarantee prosperity and security for all
their people. National frontiers are a barrier to the rational use of human resources,
technology, natural resources, etc. The capitalist nation state has become an absolute
fetter on economic development and social progress.
LIMITS OF CAPITAL
The systemic crisis arises from what Marx called a collision between the ‘forces of
production’ (technology, plant and machinery, instruments of production) and the
‘relations of production’, by which he meant the social and political framework
within which the economy operates: the state structure, the relationship between the
bosses and the working class, government policy, the role of nation states, the
international economic-political framework, etc. Such a basic conflict is a fundamental
condition for social revolution.
POLITICAL WEAKNESS
OF WORKING CLASS
The working class, in alliance with other exploited sections of society, is the only force
capable of breaking the deadlock and taking society forward (the capitalist class is tied
to private property and the nation state). At the moment, the working class
internationally lacks the consciousness, leadership and organisation to challenge the
capitalists for control of society. The former Soviet Union and East European Stalinist
states were a grotesque caricature of socialism. But their collapse caused great
confusion, with a shattering of the traditional left. It was intensified by a world-wide
capitalist propaganda campaign: ‘socialism is dead, capitalism triumphant’. The
workers’ movement, however, was not smashed as it was under fascism in the 1930s.
Strike waves in Europe, the mass movement in Indonesia, etc, show things are beginning to
change.
PROGNOSIS
WORLD-WIDE SLUMP
Things will unfortunately get worse before they get better. When the US bubble bursts, the
US will enter a stagnation period (like Japan’s), dragging the whole world into a
serious downturn: overproduction, mass unemployment, trade war between the major blocs,
social upheaval.
NATIONAL AND
INTERNATIONAL CONFLICT
World disorder will intensify, with further interstate conflicts and civil wars.
Social conflict will erupt in all countries, including US, Japan and other advanced
capitalist states. Serious splits will occur within the capitalist class, while sections
of the middle class, hit by crisis, will be radicalised and move into opposition (while
some sections may well move to the right). In the poorer countries, the social
disintegration now occurring in Africa will spread to other continents.
MOVEMENTS OF THE
WORKING CLASS
Recent mass strike waves and protest movements point to the way in which things will
unfold (France, Germany, wharfies in Australia, public-sector strike in South Africa,
general strike in Colombia, workers and students in Israel, and so on). A new generation
of class fighters will re-establish rank-and-file organisations in workplaces and
neighbourhoods, democratise the trade unions, and engage in titanic defensive and
offensive battles against the capitalist class. Community campaigns will erupt. There will
be moves towards the formation of new, broad workers’ parties based on class struggle
and fighting policies. A new generation of worker-activists will revive the fighting
traditions of the workers’ movement and rediscover the genuine ideas of socialism.
Fighting the battles of the moment, they will become increasingly conscious of the need
for a programme for a fundamental social transformation.
REVOLUTIONS
Social crisis, splits in the ruling class, struggles of workers and exploited masses will
erupt into revolutionary movements. Indonesia points the way. The 1995 mass strike wave in
France also displayed revolutionary features: workers’ committees, paralysis of whole
regions, support from the middle class, clashes with the state.
REMEDIES
The distorted Stalinist model of socialism has been swept away. The reformist
Labour and social-democratic parties have become ‘left’ capitalist parties,
though reformism (the idea that capitalism can be changed gradually) will still be a
strong political trend. A successful struggle against a crisis-ridden capitalism, however,
requires a thorough-going anti-capitalist programme: socialism.
WORKERS’
POWER
The working class, now the big majority in advanced capitalist countries, must replace the
capitalist class as a ruling class and take over the running of society. Socialist forces
will have to mobilise workers, big sections of the middle class, for a socialist
transformation. For the first time society would be run democratically, with the full
participation of all sections.
PLANNED ECONOMY
The commanding heights of finance, industry, transport and services need to be
nationalised and run under a plan of production. This would be run under democratic
workers’ management, and with workers’ control in workplaces, democratic
consumer committees, etc. The economy would serve the needs of society. Rapid growth would
raise living standards and soon create a much more equal society.
INTERNATIONAL
SOCIALISM
The struggle for socialism has to be international, with solidarity across capitalist
borders. Socialist transformation in one country would immediately be spread to other
countries. Socialism would guarantee self-determination for oppressed nationalities and
the rights of minorities, but at the same time begin to transcend the nation state through
international cooperation and economic planning. Through planned use of resources,
grotesque inequalities between countries could rapidly be eliminated. Wars (motivated by
greed for territory, wealth, power, prestige, etc) would become a thing of the past.
ASPIRATIONS
The aim of world socialism would be to provide everyone on the planet with
all the necessities of life and more: food, homes, healthcare, education, and so on. Then
people could really begin to enjoy life through stimulating work, culture, sport,
developing personal and social relations. Anti-social vices (greed, aggressiveness, etc)
bred by a capitalist society dominated by the greed for profit would quickly begin to die
out. Insecurity and fear would no longer generate prejudice against social scapegoats or
hatred of foreigners, and so on. Socialist society, as Marx put it, will lift humankind
out of the realm of necessity and into the realm of freedom.
TIMESCALE?
The hardest thing to predict. The 21st century, however, will undoubtedly open with a
major economic downturn, triggered by the bursting of the Wall Street bubble. This will
shatter what’s left of the capitalist triumphalism that followed the collapse of the
Stalinist states. There will be a massive reaction against capitalism, and a search for an
alternative. The more politically conscious will grasp the ideas of socialism. Throughout
the world, there will be a radicalisation of a wide layer of workers, students, and
sections of the middle class. The world will move into a new, deeper phase of capitalist
crisis. Nobody can give a timetable. But we have a clear diagnosis and definite aims. What
else do we need? An audacious commitment to struggle.
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