"I THINK it's wrong for America to take it all into their own hands and to drop bombs and kill civilians," said Nahim, originally from Afghanistan, one of 50,000 people on a huge anti-war demonstration in London on 13 October.
She told us: "While their war is with the Taliban it's just not right to kill innocent people in the process - that's terrorism in itself. So that's why we are here."
US President Bush and his 'deputy' Tony Blair are fighting a war against Afghanistan which won't end terrorism but is already killing innocent civilians in one of the world's poorest countries.
On 16 October, so-called 'pinpoint' US air strikes hit a well-marked Red Cross warehouse in the Afghan capital Kabul, destroying wheat and other humanitarian supplies. How many other civilian targets are going to be attacked?
Every day this war is making the world a more dangerous place but people are moving into opposition to it.
Over the same weekend as the London protest, there was a gigantic demonstration, estimated between 250,000 and 500,000, in Italy (see page 4) and other anti-war protests in cities around the world.
As economic recession kicks in at home, opposition to Bush and Blair's system will grow in the US and Britain alongside opposition to the war.
Look what's happening to workers' jobs. On just one day, 15 October, 12,000 jobs were lost. For instance, telecoms giant Siemens cut 7,000 jobs making a total of 15,000 jobs disappearing this year as the bosses defend their profits by sacrificing our jobs.
It's not just war against Afghanistan - capitalism is declaring war on all fronts. It's a class war by the rich against the poor. The bosses' system cannot resolve any of the problems that the working class and the poverty-stricken people of the world face.
Don't just fight on one front but join us in a battle to change the system. We will build on the huge demonstrations that have taken place already and fight for a socialist alternative to capitalism, war, poverty and terrorism.
IMAGES OF death and destruction in the village of Khorum demonstrated the horrific reality of Bush and Blair's 'war against terrorism'.
Bush said that the Taliban would "pay the price" for 11 September attacks. But it's ordinary Afghans who are the innocent victims of a futile war that will not end terrorism and will make the world a more unstable and dangerous place.
Opinions polls in the US and Britain have shown a majority in favour of air-strikes on Afghanistan. But many of those who feel that "something must be done" have grave reservations about any action which results in the deaths of innocent civilians.
On 13 October 50,000 marched on an anti-war demonstration in London - bigger than any national protests during the Gulf War or the war in Kosovo. Significantly it included a large, organised Muslim contingent. At least a quarter of a million people protested against the war in Italy.
These demonstrations and anti-US protests around the world show that Bush and Blair do not have a blank cheque to wage war against the people of Afghanistan and that the 'anti-terrorist' coalition is being built on shaky foundations.
The ruling class in Britain and the US have said that this will be a long war. If the civilian death toll rises as a result of bombings, cold and starvation, the mood could harden against it.
After several days of intense bombing, death and destruction, Bush boasted that the richest nation in the world had air-supremacy over one of the poorest! But the bombs have not realised US imperialism's main aim of rooting out bin Laden. Nor have they overthrown the Taliban.
Now the US war strategists are drawing up plans for the use of ground forces. However there are clearly fissures opening up within the US administration and the 'anti-terrorist' coalition about what to do next.
They do not want to get embroiled in any lengthy ground war or occupation of Afghanistan which might result in massive casualties, as happened with the Soviet occupation from 1979 to 1989. But there is a real fear that the situation could spiral out of their control in Afghanistan and more widely.
It's a sign of the difficulties that US imperialism faces, that they are forced to rely on the Northern Alliance as an ally to defeat the Taliban and shape a post-Taliban 'solution' for Afghanistan.
When the forces which make up the Alliance were in 'power' between 1992 and 1996, 50,000 Afghans were killed through repression and fighting between rival factions. It was because of the Northern Alliance's horrific record of raping, looting and destruction that the Afghan population in many areas initially welcomed the Taliban.
There is general agreement within the international coalition that the mainly Tajik and Uzbek Northern Alliance must not be allowed to form a post-Taliban government on their own. Instead they want to try and cobble together some kind of coalition government that will also include forces representing the Pashtuns, who are the biggest ethnic group in Afghanistan.
The US appears to have deliberately held back from bombing Taliban positions north of Kabul for fear of the Northern Alliance prematurely seizing Kabul before some kind of 'settlement' has been worked out. But as one US Defence official commented: "This is a very complex area. It makes Bosnia look homogeneous" (Financial Times 16 Oct).
Any post-Taliban government imposed on Afghanistan by US imperialism, even under the guise of the UN, will be extremely unstable and unable to solve any of the problems ordinary Afghans face. Only a government of workers and poor as part of a socialist federation of the Middle East can offer a lasting solution.
The more 'gung-ho' sections of the US administration, especially in the Defence department are still pushing to widen the war beyond Afghanistan and into Iraq. There have even been attempts to link the anthrax outbreaks in the US to the Iraqi regime in order to justify an invasion, including seizure of the Basra oil-fields.
However the 'doves', around Colin Powell, realise that military attacks on Iraq would blow apart the international coalition and enormously destabilise the world situation.
The coalition is already fraying at the seams. That's why Blair has been flying all over the world desperately trying to do a quick repair job and hold everything together.
The bombing of Afghanistan has provoked anti-US demonstrations throughout the Muslim world, including Indonesia, the world's largest Muslim country. "There's a huge concern that Indonesia could be the world's biggest powder-keg" commented one US diplomat (Guardian 11 October).
In Pakistan, General Musharraf has moved quickly to try to quell unrest by removing military chiefs sympathetic to the Taliban, arresting Islamist leaders and ordering security forces to open fire on protesters.
But potentially the situation could explode, especially if the war drags on for any length of time. A Newsweek poll found that the percentage of Pakistanis supporting the Taliban against the US has gone up by 40% to 83% since the bombings began.
The Saudi regime is also walking a knife-edge and Israel/Palestine remains a tinder-box (see The Socialist page 4). Bush has even raised the idea of extending the war on terrorism to South East Asia, which would add fuel to the existing anti-US imperialism mood.
It's clear that this will be a long, drawn-out and complicated war. But the rifts within the coalition, the growing anti-US protests and movements against the war all indicate that US imperialism won't be able to move around the globe at will in defence of its own interests.
The longer the war goes on, the more unstable the world situation will become. The task for socialists now is to build on the sizeable anti-war protests which have already taken place; to campaign for the formation of new mass parties which can represent the interests of the working class and poor internationally and to fight for a socialist alternative to the horrors of poverty, terrorism and war which this capitalist system engenders.
At least 50,000 people marched through central London on Saturday demanding an end to war on Afghanistan. Protesters poured into London from all over England and Wales. The Socialist Party's contingent queued for one hour and 40 minutes to get out of Hyde Park; an indication of how big the demonstration was.
This shows that a sizeable anti-war movement exists in Britain even at this early stage. Blair will not be able to dismiss this demonstration or ignore the huge display of anger and indignation at his prosecution of the war on Afghanistan.
Thousands of young people have been stirred into political activity by the onset of Bush and Blair's war. Our contingent was mainly made up of young people and was led by a group of school students.
Also significant were the hundreds of Muslims who took part; for many of them it was their first political demonstration. The anti-war movement needs to welcome their involvement and build upon it.
200 people listened to Dave Nellist, Socialist Party councillor, and other speakers outline the Party's analysis of the war at a street meeting at Speaker's Corner. Hundreds queued up to sign our petition and join the anti-war campaign.
We all need to re-double our efforts to build this campaign into a genuinely mass movement. Anti-war groups need to be established in every school, college and workplace. Coaches should be booked now for the next national demonstration on 18 November. Where Socialist Party members booked coaches for Saturday's demo they were all full.
All the indications are that November's demonstration will be even bigger. The first reports of civilian casualties are coming in. What we said all along is being vindicated- there is no such thing as a precision bomb or smart missile.
Many ordinary Afghans will be killed and injured in this bloody conflict. The big powers never go to war in the interests of the poor and the oppressed but only ever in their own interests. This war will not solve the problem of terrorism or put an end to reactionary regimes in Afghanistan.
As this becomes apparent to more and more people the movement will grow; let's ensure that it is a powerful force that puts an end to this war.
THE LAST time that so much military equipment and troops were amassed was ten years ago in preparation for the Gulf War. There was talk then of a war for justice, of getting rid of dictators and of a 'new world order'. But Operation Desert Storm, as the attacks were called, achieved none of these.
In fact the defeat of Iraq in the Gulf War only increased the anger of the Arab masses towards US imperialism, an important factor in the present war.
On 16 January 1991 the US and its allies began bombing cities in Iraq which left thousands dead, destroyed much of Iraq's infrastructure and created millions of refugees.
Like Osama bin Laden, Saddam Hussein (a ruthless dictator), had been supported by the US and the West right up until the invasion. Many military personnel were trained in Britain and other Western countries helped finance Iraq in its war with Iran. There were no protests from the US when Saddam used poison gas to kill Iraqi Kurds struggling for their national rights.
However Saddam took a step too far when he threatened American interests, namely oil. The Iraqi economy was weakened by eight years of war with Iran. Saddam saw the invasion as a diversion from the growing anger of the population.
He was also desperate to force up the price of oil which Kuwait and other states were keeping down. To head off increasing anger and protests Saddam invaded and occupied the whole of Kuwait on 2 August 1990. Having taken over the Kuwaiti oilfields Iraq controlled a fifth of the total world reserves and would have controlled 45% had it gone on to occupy Saudi Arabia.
US imperialism could not allow an unpredictable dictator to have such a large control of the world's oil supply and threatened to go to war unless Saddam's troops withdrew.
The coalition of 25 countries that Bush's father put together included Arab states such as Syria, Egypt, Morocco and Saudi Arabia, ruled by hated dictatorships and bought on board with billion dollar bribes. As today it held together very tentatively.
This was officially a United Nations alliance but in effect it was the US, with token forces from other countries, which controlled the operation although other countries - particularly Japan and Germany - had to contribute large sums of money to fund the war.
KUWAIT, ALONG with the other regimes that ruled the rich Gulf states, was hated by the Arab masses as a client state of the US with little democracy. The problems in this part of the world, just as critical now as ten years ago, were originally sown by imperialism creating artificial states in the Middle East.
Saddam, in standing up to US imperialism and demanding rights for the Palestinians, won support from the Arab masses with huge demonstrations in many countries against their leaders for joining the coalition.
The US ruling class were just as divided as today. Should they use ground troops and risk a drawn-out conflict with many American casualties while inflaming the situation in the Middle East? Or could they defeat Saddam without using ground troops.
The bombing campaign was incessant with 90,000 sorties taking place before the land battle and 16,000 during the battle. 100,000 Iraqis were killed or injured in the 100-hour land war. On 15 February Saddam agreed to withdraw from Kuwait.
Then in a terrifying example of US imperialism's viciousness, tens of thousands of Iraqi troops were continuously bombed as they retreated. Pictures afterwards showed miles of burnt out tanks and trucks with charcoaled bodies still inside.
This was the US's message to the developing world that the US was powerful and ruthless enough to crush any country that threatened its interests and prestige.
The Gulf War came about at a time when world relations were fundamentally changing. Since world war two there had been two antagonistic super powers - the United States was the most powerful capitalist country and the Soviet Union whose economy was state owned but undemocratically run by a bureaucratic elite.
Each had their own spheres of influence and acted as a restraint on each other internationally during four decades of 'Cold War'. But by the time of the Gulf War Stalinism in the Soviet Union and Eastern Europe was collapsing. World capitalism, dominated by the US, had just experienced the long 80s boom and appeared to have triumphed internationally.
WE POINTED out at the time that this new world balance of forces would open up a period of instability and more wars as there was no longer a counterweight to US imperialism. Since the Gulf War there has been the intervention of the West in ex-Yugoslavia and now the war against Afghanistan.
Where once the poor and oppressed would have looked to Stalinism as an alternative system, Islamic fundamentalism partially filled the vacuum its collapse had created, especially with the absence of strong mass workers' parties and marxist forces.
This was a quick war for the US with very few casualties on its side. Despite talk of the US going into Baghdad and deposing Saddam this never happened. The US feared that if their troops went into Iraq's cities they would meet resistance and a roused population. The masses in other Arab countries would also protest. Better to leave Saddam in his place than risk the regional instability his removal would create.
Although American imperialism claimed they wanted Saddam overthrown just as they now say they want the Taliban routed, in reality their major fear is for the ordinary people to overthrow their oppressors. Immediately after the Gulf War the US stood by as Iraqi Kurds and Shia Muslims in south Iraq, having risen up against Saddam, were ruthlessly crushed.
To ensure support from the masses of the coalition countries this war for oil had to be described as a war against the evil dictator Saddam and in defence of occupied Kuwait. But in Britain, 58% believed that this was a "war motivated by oil and money".
Capitalism appeared triumphant in the wake of crumbling Stalinism and the long boom (the early 90s recession was only just beginning). Nevertheless there were demonstrations and protests throughout the world which would have grown had the war continued.
This was the worst military defeat for an Arab nation in 50 years and only increased the Arab masses' hatred towards the US. In an article in our paper (then Militant) in March 1991 just after the war we explained that Islamic fundamentalism was growing in every Arab country.
"Kept in grinding poverty, exploited by imperialism and its stooges who rule their lands, the masses of the Arab world have much to despair about. Imperialism's latest victory against them will only make them more desperate, wanting to reject all the values of the West and turn back to what they see as exclusively their own - Islam."
SINCE THE war, it has become patently clear that the Gulf War was never fought for the benefit of the Iraqi masses. Sanctions and bombings have taken place against Iraq for the last ten years resulting in the deaths of thousands of Iraqi children.
As the bombing of Iraq was taking place George Bush the First declared that America was the nation "that can shape the future." The Gulf War and the conflicts that have taken place since show that US imperialism and global capitalism cannot be trusted to shape the future of our world. Only the working class and oppressed can do that, fighting for socialism internationally.
COLIN POWELL'S visit to Pakistan was greeted by rioting in Hyderabad and a partial strike shutting down shops called by pro-Taliban religious groups.
The regime of Pervez Musharraf in Pakistan was already struggling to control extreme Islamist groups within Pakistan itself.
He has acted against two prominent generals who helped him to overthrow the former government of Nawaz Sharif but who were in support of some of the Islamic parties. However, significant sections of even the army officers in the Pakistani army are supposed to be sympathetic to, if not members of, Islamic fundamentalist parties and organisations.
The repercussions for Pakistan are going to be severe. There is an incipient civil war already within Pakistan.
The outcome of this could be the removal of Musharraf and his replacement by a fundamentalist regime and possibly also, the fracturing of Pakistan along national lines. In particular, the breaking away of the Northwest Frontier province with its majority Pashtun population makes this a real possibility.
Musharraf is caught between the millstones of the colossal pressure of US imperialism, upon which his regime ultimately depends for economic salvation, and the mounting opposition to the bombings within Pakistan. It is not an accident that he has referred to the current situation as the greatest crisis that Pakistan has faced since the Bangladesh war of 1971. This led to the break up of Pakistan as it was then and the separation of East Pakistan into what became Bangladesh.
Given the support of the Pakistan military for the Taliban in the past, including from Musharraf himself, he is not at all enthusiastic about replacing it with the Northern Alliance who are supported by regional rivals Iran and Russia.
This is why Musharraf has suggested what was previously "unthinkable", support for the return of the former Afghan king, Zahir Shah, as a focal point for an alternative post-Taliban government.
Meanwhile, the political fault line running through occupied Kashmir threatens to explode into a new regional conflict. A point emphasised by the latest shelling of Pakistani troops by Indian artillery along the disputed 'line of control' border.
In the bloody equation of war, anything is possible. The future will not be one of tranquillity and peace but of unprecedented turmoil with the risk of a break up, or partial break up, of Pakistan, the repercussions of which will be felt throughout the Indian subcontinent.
SAUDI ARABIA with its 262 billion barrels of oil possesses a quarter of the world's total. The US imports 57% of its oil needs. By bombing the Afghan Taliban regime and thereby destabilising Saudi Arabia, George Bush is playing with fire.
Attacks on European and US nationals in Saudi Arabia are growing. The regime is downplaying such incidents or blaming them on other foreigners.
The Saudi Arabian regime is facing unprecedented opposition. This has meant that the Saudi royal family, while giving verbal support to US imperialism, has been compelled to refuse permission for the US bases in Saudi Arabia to be used in military action in Afghanistan.
The collaboration with US imperialism, the massive corruption of the rotten ruling feudal dynasty, the worsening economic situation of Saudi Arabia and its effects on significant sections of the population, and the outrage felt at the continued oppression of the Palestinian people, have all fed into a big movement of opposition to King Fahd's regime.
The parasitism of the ruling dynasty is shown by the existence of 15,000 'royal princes', each with their own courts and bands of retainers.
AT THE same time, a section of Saudi youth, who comprise most of the 20 million population, are discontented at the deterioration in their economic and social situation. The drop in oil revenues has meant that income per head has gone down from $28,000 in the early 1980s (comparable to the US) to about $7,000 today. Ten years ago unemployment didn't exist. Now, the official unemployment rate is 18% and rising.
Moreover, the role of the Saudi regime in fostering the development of a powerful clerical establishment, preaching religious messages in the schools and universities, has resulted in bin Laden and his like finding an echo amongst thousands of graduates versed in religious teaching but lacking basic skills for the labour market.
This is an explosive mix which the trigger of the Afghanistan war could ignite, leading to the overthrow of the 'fundamentalist' regime of King Fahd and its replacement with an even more extreme fundamentalist regime. This would threaten the interests of US imperialism in the region.
INDONESIAN POLICE fired tear gas and water cannon into hundreds of anti-US Muslim protesters outside the national parliament buildings on 15 October. Eyewitnesses spoke of brutal police beatings, including against journalists.
This marked the first significant protest in the capital, Jakarta, since the start of the attacks on Afghanistan.
Right-wing Muslim groups, including the Islamic Defenders' Front (FPI), threatened to storm the parliament unless the government of President Megawati Sukarno-putri clearly condemned the US-led war.
Last week, the FPI threatened to target and drive out Americans and Britons from the country.
Initially, Megawati, desperate for foreign investment and aid following years of economic decline and instability, gave qualified backing to Bush's war plans.
But as the killing of civilians continues in Afghanistan, 'moderate' Muslim opinion has hardened against US policy (Indonesia has the largest Muslim population in the world).
Islamic organisations have links to the powerful armed forces that proved critical in bringing Megawati to power recently. In a setback for Bush, the President recently softened her support for the war. This follows calls from the Vice-President, Hamzah Haz, for a halt to the bombings.
Megawati hopes that through repression and by making concessions to the popular mood she can contain the rise in Islamic opposition.
MEANWHILE, THOUSANDS of Filipino Muslims have staged anti-US protests on the island of Mindanao in the southern Philippines. They are demanding President Gloria Arroyo withdraws an offer to the US to allow them to use former military bases.
Muslims make up around 5% of the 76 million population and are largely concentrated in the south of the Philippines where the Abu Sayyaf paramilitary group fights for a separatist Islamic homeland.
The US administration claims Abu Sayyaf is linked to Osama bin Ladin's al-Qa'ida network, and is reportedly planning to send in military advisers and a number of troops to help the Filipino government crush the group.
Such US involvement, in the Philippines, Indonesia or even Malaysia, will only aggravate religious, ethnic and national sores, which erupted after economic crisis hit the region in 1997.
AFTER THE US-led bombings, anti-US feeling and protest have too increased in the divided state of Kashmir.
In Kotli, in POK (Pakistani Occupied Kashmir), where there are number of training camps of the different Islamic groups, the Jamiaat-Islami - the main Islamic group - is in the forefront in organising anti-US and pro-Taliban protests.
One such demonstration included the ruling Muslim Conference, PPP (Pakistan Peoples Party), and JKLF (Jammu Kashmir Liberation Front). Other capitalist nationalists have sided with the reactionary Islamic groups.
A suicide bomb attack on the IOK state legislature on 1 October, which resulted in the killing of over 38 people and dozens injured, was initially claimed by the Jaish-e-Mohammad but later denied.
This group's leader was one of the imprisoned leaders who were released from an Indian prison as part of a government deal following the hijacking of an Indian airliner in December 1999. This latest attack provided the Indian ruling classes an excuse to whip-up anti-Pakistan war hysteria.
Here in Kotli and other parts of POK, Islamic groups have planned for further protests, while the Sikandar Hayat Administration of the Muslim Conference continues to attack the working-class. Its right-wing, neo-liberal policies of privatisation and down-sizing continues unabated, with expected loss of thousand of jobs, and women teachers have not been paid their salaries for the last six months.
A CRISIS never has just one cause - there are always a combination of factors, economic as well as political, which, at a certain stage, act as a brake on economic growth.
Today's economic crisis is very much a classical crisis of capitalism, described by Karl Marx in the volumes of Capital, with overcapacity and overproduction, or "excess capacity" as the capitalists call it, as factors together with contracting or falling profits.
With the crisis in SE Asia in 1997 and, in its wake, the collapse of many other so-called "emerging markets" in 1997-98, global capitalism entered a drawn-out process of stagnation and crisis.
At the time, under the headline of 'The threat of deflation' the US magazine Business Week commented: "Today for the first time in years there is worldwide overcapacity in industries, from semiconductors to auto. And the excess supply will get even worse as Asia tries to export its way out of the crisis".
And it got worse, although for a time it seemed that the expanding US market would absorb all goods produced around the world as the US economy became the buyer of last resort during 1998.
That made the process of crisis much more protracted, and global capitalism also became dangerously dependent on US capitalism remaining willing to spend beyond its means.
It is impossible to predict how deep and how long-lasting this crisis will be. But the latest boom created serious structural problems within global capitalism which could pave the way for a long period of stagnation, as happened in Japan after the bubble burst in the early 1990s.
NO. THE horrifying attacks on New York and Washington DC have speeded up the process of crisis. But the world was already on the brink of recession - defined as two quarters of negative growth - before 11 September.
Global industrial production fell at an annual rate of 6% in the first half of 2001 and growth in the volume of world trade was falling at its fastest rate for 20 years. Business investment has fallen at an annualised rate of 15% in the US and 18% in Japan.
Furthermore, unemployment was simultaneously rising in Europe, Japan and the US. Well before 11 September all indicators pointed to a serious downturn in the US while in the world's second largest economy Japan, second-quarter gross domestic product (GDP) figures were even more worrying than expected.
Nominal GDP fell at an annual rate of 10%. On top of that, Germany's economy, the world's number three, has stopped growing. This synchronised sinking shows that further integration and interdependence in the wake of globalisation works both ways. Capitalist countries may swim together when the world economy is booming, but they also sink together when the boom is over.
The global nature of the present crisis reflects the downward side of globalisation.
THE FALL-out in economic terms has to be seen in the context that this shock came as US capitalism has run of steam. The events of 11 September therefore tended to reinforce and aggravate the worldwide downturn.
It is almost certain that the US is now in a recession. Growth for the year to the fourth quarter of 2001 is expected to be minus 0.5% in the US, according to the latest forecast from JP Morgan in New York.
The terror attacks, the call for a "long war on terrorism", gave an added twist to widespread uncertainty, which tends to undermine business and consumer confidence even further.
This, together with higher unemployment and the collapse in share prices will reduce US consumer spending, which accounts for two-thirds of the US economy and has up to now not been affected by the downturn.
Moreover, the world's financial and currency markets have become even more unpredictable and short-sighted after the attack. In the week following the attacks, central banks around the globe were forced to inject at least $208 billion into the financial system to avoid a meltdown and protect the dollar.
But shares are generally still overvalued. This is despite more than $11 trillion (equivalent to one-third of global GDP) having been knocked off world share prices since their peak last year - prices could plunge even further.
Another important effect of the attacks is that the US's image of being an 'economic safe haven' has been shattered. Time Magazine commented (1 October): "Foreign investors, who lately ploughed $500 billion a year into the US economy, no longer view the dollar as the safe haven as it was".
The value of the dollar is bound to come down with supplementary turmoil on Wall Street as investors and speculators convert their part of US assets into other holdings.
A sharp fall in the dollar's value following a capital outflow from the US would mean that US capitalism could not sustain its huge deficits. The obvious way to avoid falling into the trap is an increase in US exports and a cutback in imports. But instead of increased exports, US exports are falling.
So US capitalism is compelled to look for other means of protection, maybe even some kind of capital controls.
Even before the attacks, global foreign investment (FDI) was set to fall by 40% this year. The climate for investment has deteriorated further after the attacks and the capital flow will continue to slow, particularly to so-called emerging economies and indebted countries. All these act as a brake on the process of globalisation.
THE ATTACKS had their most immediate impact on the airline and travel industries. In the weeks following 11 September, 120,000 jobs were lost in the US and European aviation industry. The bosses across the world have used the tragedy as a pretext to brutally get rid of the "excess capacity" built up over years in the airline industry.
Even before the attacks, the global economic slowdown had significantly cut the numbers of passengers. The US carriers were already facing their worst year in a decade and many big airline companies were making huge losses. Some companies, such as Swissair, were $10.5 billion in debt - 40 times the size of its market capitalisation - and struggled to survive.
However, after 11 September, workers in the airline industry and industries directly linked to airline travel - airports, aircraft manufacturing, hotels, restaurants etc. - are in a catastrophic situation.
Millions of workers will be laid off, while the bosses try to save their skins. The Hotel and Restaurant union in the US reports that 40% to 60% of its membership has been laid off in the past few weeks. Trade unions in the US have been forced to hand out food packages to hotel workers who have lost their jobs.
The Independent reports: "Since many hotel workers lead precarious existences anyway - living from pay cheque to pay cheque and struggling to pay the rent and feed their families - the mass lay-offs could easily have the sort of consequences previously associated with the Great Depression - food queues, emergency homeless shelters, starving children".
This gives a dire warning of the horrifying social consequences of the crisis because the present generation of workers are less protected than the generation before. That is particular true in the US, but also in Europe after years of cutbacks in social services.
FIRST OF all, it is a more synchronised crisis than at any time since the 1930s. Europe, Japan and the US are going down together and there is now no major region providing support to world output.
In the recession of 1990-91, Japan was still booming, so was part of Europe thanks to German unification and the so-called emerging markets. That is not the case today so this is truly a world recession.
"The next two years will be the worst for the world economy for a generation", writes Hamish McRea in the Independent [3 October].
Secondly, the global crisis reflects itself in overcapacity, lack of demand, debt overhang and huge imbalances in the world economy. All these point to a prolonged period of stagnation.
The Economist [25 August], warns: "America's long expansion in the 1990s encouraged rosy expectations about future growth and profits, encouraging overinvestment financed by heavy borrowing.
"When there is excess capacity and an overhang of debt, interest rate cut demands tend to be less effective in reviving demand. Investment led recessions, which were common before the Second World War, tend to be deeper and to last longer because it takes longer to purge financial excesses and overcapacity than it does to tame inflation."
THERE IS in fact very little governments and central banks can do to change the direction in which global capitalism is moving. But, of course, they will have to respond and inject more money into the economy.
Governments worldwide have already taken steps to increase demand and make cheap money accessible for companies and consumers, eg. cutting interest rates. The Federal Reserve, the US central bank, has cut interest rates nine times so far this year. Key interest rates in the US are at the lowest level since 1962 and they are close to zero (0.1%) in Japan.
However, these cuts have had little impact on economic activity, because even if cheap cash is provided to companies they have no reason to invest when many industries have excess capacity and investment spending is falling. The same goes for consumers who are likely to spend less and save more, instead of going further into the red.
An important outcome of recent events and rising unemployment in the US is that the right-wing Bush administration has been compelled to stimulate the economy. Bush has already announced a stimulus package of $130 billion.
But more Keynesian measures to prop up the economy will come as the government tries to avoid the social crisis which tears society apart (unemployment could hit 6% in the US early next year). These will not only include further hand-outs to the airline and travel industries, tax cuts and money to rebuild New York, but also public investments in infrastructure and social spending.
One effect of the tragedy is a widespread feeling in the US that the administration has an obligation to all who suffer, including workers who have been laid off.
Bush has no choice than to give up the old neo-liberal aims of "sound money", of a budget in balance and paying off the national debt. This is particularly the case when the Bush administration is expected to increase military spending from $316 billion this year to as much as $400 billion next year (4% of GDP).
But this policy of tax cuts and spending is like giving a patient in desperate need an aspirin instead of surgery, as the example of Japan has shown. Since 1992 the Japanese government has tried ten spending packages to stimulate the economies, yet in nominal terms Japan's economy is no larger than in 1995 and the country's public debt is now the biggest in the world.
Nevertheless, it is an irony that the Bush administration is moving in the direction of Keynesianism while the so-called centre-left governments in Europe still try to operate within the limits set by the so-called Growth and Stability pact.
If the Euro zone "insists on a rigid interpretation of the Growth and Stability pact, then it will act to intensify recession, and Europe could end up being even weaker then the US", commented a banker in International Herald Tribune on 24 September.
But as the recession start to bite and with more people on the dole, even Europe's governments will have no choice other than trying to stimulate and protect their economies.
So it cannot be excluded that countries within the Euro-zone including Germany, who ironically saw the Growth and Stability pact as a mean of enforcing fiscal discipline on others, in practice will abandon the pact. This in turn, will put enormous strain on the EMU and the Euro in the years to come.
IT IS too early to say how massive lay-offs, after 11 September and the start of the "long war against terrorism", will affect the consciousness of workers and young people. Recent events have added to a mood of uncertainty and anxiety. This mood is reinforced by widespread fear of another terrorist attack.
For a time this could hold back workers from entering the arena of struggle, although it cannot act as complete brake on struggle as shown in many places across Britain where workers have recently voted in favour of strike actions.
Nevertheless, the present mood has given trade union leaders in Britain and the US a pretext to make an unilateral declaration of social peace, while the bosses axe jobs and make cutbacks in investment and production.
The capitalist establishment has also used the spectre of terrorism to step up its campaign against the anti-globalisation movement in general and its socialist part in particular.
A Financial Times editorial even said: "One of the less remarked consequences of the US terrorist attacks has been to halt in the tracks the mass movement against globalisation".
But neither the anti-capitalist mood nor the anti-globalisation movement has gone away, nor have the reasons why such a mood developed. The anti-war movement will give a new dimension to this mood and movement.
The political, social, economic and military fall-out of 11 September have resulted in a politicisation, particularly amongst sections of the youth, as well as a polarisation within society.
This process of politicisation will become deeper as it becomes more obvious that society's elite is using the "war against terrorism" as a guise for attacks on workers' standards and jobs, civil liberties and against those who challenge the horrors of global capitalism.
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What the Socialist Party stands for
The Socialist Party fights for socialism – a democratic society run for the needs of all and not the profits of a few. We also oppose every cut, fighting in our day-to-day campaigning for every possible improvement for working class people.
The organised working class has the potential power to stop the cuts and transform society.
As capitalism dominates the globe, the struggle for genuine socialism must be international.
The Socialist Party is part of the Committee for a Workers' International (CWI), a socialist international that organises in many countries.
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http://www.socialistparty.org.uk/articles/9213