Imperialism faces its worst financial, economic and political crises since the 1930s
Statement by the Liaison Committee for the Fourth International - LCFI
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The British riots that began in Tottenham on Aug. 6 after police shot Mark Duggan were the result of contention of the class struggle by the trade union bureaucracy in favor of the capitalist class
The US is still the only major superpower in terms of military might. The emerging rival imperialist powers bloc of Germany and the BRICS countries, Brazil, Russia, India, China and South Africa, who abstained in the Libya no fly zone vote at the UN (apart from South Africa who was not then a member) have been intimidated into accepting the situation; pressure on Germany has cowed that rival and in turn Russia and China has been forced to accept that the military might of the US and its allies Britain, France and other smaller European imperialist countries cannot be challenged on a global scale. It is clear that this is very much the weaker Imperialist power bloc; they do not have the economic might to replace the dollar and they do not have anything like the military strength to oppose the US and its allies in a war. And there are really only two rival theories of world Imperialism and we are Leninists; it will not be possible ultimately to resolve these inter-imperialist conflicts as Karl Kautsky thought. These will inevitably lead to WWIII and great revolutionary upheavals where the world revolution of decent into generations of barbarism will again be sharply posed.
But the sociological terminology has some purchase here; it is a multi-polar world now with the decline of US Imperialism and the rise of the Asian economies – these now account for almost 36% of the world’s GDP, with the US and EU on about 20% and the rest of the world on about 24%. But the relationship is much different when it comes to military spending. Here the US military budget accounts for 43% of the world expenditure; almost six time that of its nearest rival China. The US has accused China of duplicity in its military spending data but “There is no such thing as a so-called hidden military expenditure in China,” Li Zhaoxing, spokesman for the Fourth Session of the 11th National People's Congress, said at a March 4 news conference announcing the budget. Whatever the truth of this allegation the massive imbalance cannot be denied.
But in economic terms it is a very different matter. Look at the GDP graph. Clearly Asia is rising strongly, with China to the fore, and the US and particularly Europe are declining not only relatively but in real terms also. Therefore imperialist rivalries and tensions continue to grow. According to the website Marsh on Monday on Aug. 22, 2011, Germany was forced to make a choice: Us or them? We read;
“Last week’s meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel, which brought more promises of “economic government” (called, unhelpfully, “economic direction” in German), predictably failed to calm the markets. Since there is no firm buyer of last resort to repel bond-market contagion, the viral assailants are now closing in on Berlin. Many of Merkel’s natural supporters are uneasily aware that, were Germany and other creditor countries to submit to demands that they formally pool government borrowing with the other euro states, that could mark the gradual end of Germany’s own economic sanctity.”
The logic of the crisis is forcing a choice upon Germany to split Europe no matter what it wants to do. If it is to bail out Italy and Spain after Greece, Ireland and Portugal – and France is also in trouble – how will it manage to avoid hyperinflation and economic collapse? As Marsh on Monday says,
“Wolfgang Reitzle, the well-regarded boss of industrial gas giant Linde, says he supports the euro “but not at any price.” Kurt Lauk, the head of the economic council of Merkel’s Christian Democrats, a former finance director of motor group Daimler and energy company Veba (the former Eon) even talks of a “currency reform” if euro supports arrangements fail to work.”
China is desperately propping up the Euro and demanding a new world currency to replace the dollar. But there is little prospect of that happening. The wars on Iraq and on Libya followed moves by both regimes to ditch the dollar, Iraq following Iran in adopting the euro as its oil currency and Libya promising to use a gold dinar which could see a new move to restore the gold standard to all currencies internationally.
‘DOUBLE DIP’ AFTER 2008 OR NEW AND GREATER GLOBAL CRISIS?
What stage of the global economic crisis are we at? It is clear that the so-called 'double dip' theory explains nothing. The LCFI suspect that the current crisis expresses the depletion of a cycle marked by the hegemony of the dollar standard. Here it is clear we are in the period of a new crisis of global capitalism.
What stage of the global economic crisis are we at? It is clear that the so-called 'double dip' theory explains nothing. The LCFI suspect that the current crisis expresses the depletion of a cycle marked by the hegemony of the dollar standard. Here it is clear we are in the period of a new crisis of global capitalism.
But when Nixon abandoned the gold standard in 1971 (and so effectively defaulted on its international debts) gold was set at $35 to an ounce. It now hovers around $1,900 to the ounce. Establishing a global currency based on gold would require gold at a far higher price and would also require the liquidation of such quantities of debt built up over the last forty years since Nixon’s fateful decision that it is as yet impossible to contemplate for the world imperialists. But there is no alternative; to prepare for this global currency the exploitation of the working class in the metropolitan countries combined with the subjugation of the remaining semi-colonial hold-outs must be enormously increased. And that really requires WWIII as the working class will not tolerate this and the rivals of US Imperialism cannot tolerate their continued propping up of the US economy by means of the dollar’s position as the global reserve currency. The consequent ability of the US treasury to print dollars in ‘Quantative Easing’ exercises forces the rest of the world to pay for US debts and, incidentally, fund the enormous US military spending which is aimed ultimately at war on them.
Details like France’s manoeuvres against Italy over Libya reveal the change to protectionism in the minds of the ruling class and the seeming irrationality of the drive to war. But in reality this is the perfectly rational class interests of the capitalist class that is now so much a feature of this crisis.
The US is provocatively patrolling the South China Sea and fomenting disputes over four separate groups of islands claimed by China. A recent article in China’s state-run Daily Times described the South China Sea as a “second Per-sian Gulf” according to an article on the WSWS website US Imperialism and the South China Sea crisis on 26 July 2011. They say:
“The South China Sea is also the key passageway for China’s energy imports. About 80 percent of all oil brought into China crosses the Indian Ocean from the Middle East and Africa, entering the South China Sea via the Straits of Malacca. Other Asian economies, including Japan and South Korea, are similarly dependent on the daily passage of oil tankers through the South China Sea, making the naval route a key strategic choke point.”
Following the imperialist war on Libya China, smarting at her obvious loss of influence and contracts there and in the rest of Africa, delivered a blunt warning to the US. According to the European Union Times on May 22nd, 2011,
“China has officially put the United States on notice that Washington’s planned attack on Pakistan will be interpreted as an act of aggression against Beijing. This blunt warning represents the first known strategic ultimatum received by the United States in half a century, going back to Soviet warnings during the Berlin crisis of 1958-1961, and indicates the grave dan-ger of general war growing out of the US-Pakistan confrontation… Responding to reports that China has asked the US to respect Pakistan’s sovereignty in the aftermath of the Bin Laden operation, Chinese Foreign Ministry spokesper-son Jiang Yu used a May 19 press briefing to state Beijing’s categorical demand that the, “sovereignty and territorial integrity of Pakistan must be respected.”
According to Pakistani diplomatic sources cited by the Times of India, China has,
“warned in unequivocal terms that any attack on Pakistan would be construed as an attack on China.” This ultimatum was reportedly delivered at the May 9 China-US strategic dialogue and economic talks in Washington, where the Chinese delegation was led by Vice Prime Minister Wang Qishan and State Councillor Dai Bingguo. Chinese warnings are implicitly backed up by that nation’s nuclear missiles, including an estimated 66 ICBMs, some capable of striking the United States, plus 118 intermediate-range missiles, 36 submarine-launched missiles, and numerous shorter-range systems.”
What does this mean for the future of the semi-colonial world? It is clear that there is a new ‘grab for Africa’ and victory in a war that apparently did not cost a single NATO life will encourage the unfolding of the plan that Gen. Wesley Clark revealed to Amy Goodman in that famous interview in September 2001, just after the 9/11 attack: “I said, “Are we still going to war with Iraq?” And he said, “Oh, it’s worse than that.” He reached over on his desk. He picked up a piece of paper. And he said, “I just got this down from upstairs” -- meaning the Secretary of Defense’s office -- “today.” And he said, “This is a memo that describes how we’re going to take out seven countries in five years, starting with Iraq, and then Syria, Lebanon, Libya, Somalia, Sudan and, finishing off, Iran.”
They are a bit behind schedule but they are getting there. It is clear the Syria is next as that opposition has been definitely subordinated to the interests of Imperialism, despite the legitimate demands of the initial protests.
The “War on Terrorism” has brought death and destruction to millions in Iraq, Afghanistan, Pakistan, Somalia, Yemen, etc. but it has met with fierce resistance; there has been no easy victory for Imperialism there. The wars sapped the economic and political strength of the US and strengthened Iran as the regional power, the total opposite of their intention. They are facing defeat in Afghanistan and in the last decade the rise of China has proceeded apace whilst the US and Europe have declined as global imperialist powers. But new bellicose noises are issuing. The US is again threatening Pakistan and Syria, the new NTC government in Libya is threatening Algeria and war on Iran look inevitable. In fact we may well be seeing the opening wars of WWIII. But with global conflagrations come revolutions which must develop on a global scale to win.
We are confident that the British riots that began in Tottenham on 6 August after the police shooting of Mark Duggan are a portent of the coming revolution, a reflection of the deep going anger and despair of a whole generation of youth denied a future and consigned to criminalisation and oppression as the economy enters a new phase of its crisis; the sub-prime crisis of banking debt has been replaced by sovereign debts of whole nations which is insolvable – bourgeois commentators have taken to quoting Marx and some even Lenin in reference to the currency crisis. These were an expression of the holding back of the class struggle on behalf of the capitalist class by the TU bureaucracy, like the Chilean high school and college students who are demanding free, quality education and are fighting against the neo-liberal politics of the right wing government which has lead to such appalling levels of inequality. Similar also were the Banlieu riots in France in late 2005 and those of the picateros in Argentina in 2001-2.
In the United States itself, the land of the mightiest imperialist power the world has ever seen, trade union struggle is practically illegal following the Wisconsin attack on union rights in February 2011 and the WSWS site reports on the latest statistics on poverty in the US:
“The poverty rate increased nearly a full percent-age point, from 14.3 percent in 2009. It was the third consecutive annual increase in the poverty rate and the fourth consecutive annual increase in the number of people living in poverty. Last year, there were 46.2 million people living in poverty, defined at the absurdly low level of about $22,000 a year for a family of four and $11,000 a year for an individual. The number of people earning less than twice the poverty rate (about $44,000 for a family of four) stood at 103 million in 2010, or about 34 percent of the population.”
The laws of history are stronger than the bureaucratic apparatus, Trotsky affirmed, the bureaucrats will be swept aside and the whole class will being to fight for its life and future internationally. This does require a new Trotskyist international, a recreated Fourth international. That is the prime task the present crisis poses to all serious militant and Marxists internationally.
Workers moving from defence to attack need to understand the new situation that presents itself, the inter-imperialist crisis and growing offensive against the world proletariat. Only then can we establish a program of action to organise the political resistance of the masses. The LCFI was born to organise this resistance from the perspective of permanent revolution and internationalism.
15 September 2011
Socialist Fight - Britain
Liga Comunista - Brazil