"Peace and prosperity" or war and poverty?

Eight years after his father, George W Bush has begun his term as president of the USA. His father promised us "peace and prosperity" after the disintegration first of the Eastern bloc, then of the USSR. The son inherits a situation of widespread war and poverty, which has proliferated and deepened throughout the 1990s. The state of the world is truly catastrophic, and this is not merely a temporary transition before the promised land prophesied by Bush Senior. All the signs are that capitalism is dragging humanity down into a vicious circle of bloody military conflicts on every continent, of increasing imperialist antagonisms especially between the great powers, a new and brutal aggravation of economic crisis and poverty, and a series of disasters of every kind. These three elements - war, economic decline, and the destruction of the planet - are making conditions ever more intolerable for today's generations, and are endangering the very survival of the generations to come. It is becoming ever clearer that capitalism is leading the human species to extinction.

The illusion of peace collapsed quickly enough, following the Gulf War against Iraq in 1991 and then the interminable slaughter in the Balkans. The illusion of prosperity, on the other hand, has been given several new leases of life thanks to America's positive growth rates during the 1990s, the increasing value of stocks and shares, and the mirage of the "new economy" linked to the Internet. American growth rates and the rising stock market have not prevented a dramatic increase in world poverty and hunger - indeed quite the contrary. As for the "new economy", it is long gone, and the illusion of a coming prosperity for all lies shattered.

An economy in virtual bankruptcy

In this Review we have already denounced many times the lies about the "good health" of the capitalist economy based on positive growth rates. The bourgeoisie has established criteria for defining a recession, which is only considered to exist after two consecutive quarters of negative growth. By these criteria of bourgeois propaganda - let us note in passing - Japan has been "officially" in recession for the last ten years. Nonetheless, and quite apart from all the cheating with the figures and the ways of calculating the recession, the reality of a positive "official" growth rate does not mean that the economy is in good health. The increasing poverty in the US itself under the Clinton presidency, despite "exceptional" growth rates, is an illustration of this.

Worse than 1929

In order to define a catastrophic economic crisis, and to show that everything today is going well by comparison, economists, historians, and the media generally always refer to the great crisis of 1929. But the experience of 1929 itself gives the lie to this assertion: "In the lives of most men and women, although the central economic experience of the time was certainly cataclysmic, and crowned by the Great Crisis of 1929-1933, economic growth did not stop during these decades. It simply slowed down. In the biggest and richest economy of the day, the USA, the average growth in GNP per person between 1913 and 1938 did not exceed a modest 0.8% per annum. At the same time, world industrial production grew by slightly more than 80%, in other words about half the growth rate of the previous quarter-century (WW Rostov, 1978, p662). (...) The fact is that had a Martian observed a graph of economic movement from far enough away not to see ups and downs that earth-bound humans have suffered, he would undoubtedly have concluded that the world economy had undergone a continuous expansion" (EJ Hobsbawm, The Age of Extremes).

Our rulers and their economists are not Martians, but defenders of capitalist order, which is why they spend so much effort in trying to conceal the reality of the economic disaster. Only rarely, and in more confidential publications, does a partial recognition of this reality confirm what we are saying: "Nonetheless, economic growth will remain insufficient to reduce the level of poverty or improve the well-being of the population", admits The Economist with regard to Latin America (The World in 2001). But of course the same is true for the rest of the world's population. And what will it be like if Fred Hickey's forecast, cited by The Wall Street Journal, comes true, of a coming recession?

Since the collapse of the world's stock markets at the beginning of 2001, it is hard to make believe that all is well in the realm of finance and the "new Internet economy". "Since their historic high point of 5132 points on 10th March 2000, technology values have fallen by almost 65%. A sorry anniversary, since in the same period some $4.5 trillion have evaporated from US stock markets" (Le Monde, 17/03/01).

It is not just Internet values, but the whole stocks and shares market which is affected by the decline in values. For the moment, contrary to the market crises of the 1980s and 1990s in America, Russia, and Asia, the decline seems to be under control, although it is certainly a major crash. One question remains posed however: the Japanese financial and banking system, seriously undermined by bad debts, is on the verge of bankruptcy. According to Le Monde of 27th March, "The rout of the Japanese banking system threatens the rest of the world". If Japan withdraws its money from the US, then the whole credit financing of the US economy will be at risk: "If foreign investors no longer want to supply the necessary capital, then the impact on growth, the stock market, and the dollar, could be substantial" (The World in 2001). All the more so in that US household savings are nil, while individual and company debt for stock market speculation has reached impressive heights. As we have shown many times, the world capitalist economy is based on a mountain of debt which will never be repaid. After deferring the consequences of the crisis in space and time, by pushing them onto the "emerging" countries, these debts are now coming home to roost, to deepen and accelerate these same consequences. The world's largest economy, the USA, is also its most endebted, and its growth rates are being paid for by "a colossal trade deficit, and massive foreign debt" (idem). Even the experts have their doubts. "In short, the US economy in 2001 will need intelligent management and above all, a good dose of luck" (idem). Who would travel by plane if they were warned in advance that the pilot would need intelligence, "and above all, a good dose of luck"?

At the same time, after the different financial crises which have shaken Russia, Asia, and Latin America on several occasions, each time due to an inability to meet debt repayment deadlines, it is now Turkey's turn to go virtually bankrupt, and to see the IMF run to its sickbed. Unable to meet a $3 billion repayment deadline on 21st March, Turkey has received $6 billion in aid from the IMF, in exchange for a drastic plan of economic attacks on the population. The Argentine economy has suffered another relapse. This winter, it had to be propped up in extremis "by an exceptional financial package of $39.7 billion, intended above all to prevent it defaulting on its foreign debt of $122 billion (42% of GNP)" (Le Monde economic supplement, 20/03/01). These local crises might appear in themselves to express merely the fragility of the countries concerned. In fact, they express the fragility of the world economy, since in each case - and there have been many of them since the Latin American crisis of 1982 - where an "emerging" country is unable to meet its debt repayments, it has immediately endangered the whole world financial system. Whence the hurried interventions by the governments of the great powers and by the IMF, bearing new and ever greater credits.

In this situation, what is at stake - and has been for several years - for the world bourgeoisie, is to keep the inevitable decline in the North American economy under control. "The excess of demand over supply symbolises the other side of this miracle [of US growth]. This is also a danger, since it is accompanied by a colossal trade deficit, and massive foreign debt. If this deficit and debt were to continue, then the collapse would become inevitable. But this will not happen. In 2001, American growth will return to a more modest rhythm, no longer miraculous but merely impressive, and the foreign trade and balance of payments deficits should diminish" (The World in 2001). The first journalist we quoted counts on good luck. This one counts on a miracle (in an article entitled "The golden age of the world economy"). But for the different sectors of the world bourgeoisie - leaving aside their antagonistic imperialist, political, and commercial interests - the crucial question remains the success or otherwise of the "soft landing" of the US economy. In other words, one that avoids any excessive crises which would run the risk of revealing to the world population, and especially to the international working class, the irreversible bankruptcy of the capitalist mode of production. The perspective for the world's population, North America and industrialised Europe included, is one of growing poverty.

The "agricultural crisis" is the crisis of capitalism

In the industrialised countries, the crisis of agricultural overproduction will lead to the ruin of thousands of small and medium farmers and an accelerated concentration in this branch of the capitalist economy. "Mad cow" disease, and the foot-and-mouth epidemic, are not natural, but social disasters caused by the capitalist mode of production. They are the consequence of sharpening economic competition and the race for productivity. In short, they are an expression of worldwide agricultural overproduction. At the same time, they provide the opportunity to "solve" this overproduction temporarily by the mass slaughter of livestock... when a large part of the world's population does not get enough to eat. And when it would suffice... to vaccinate the animals. "The agricultural crisis emphasises yet again that hunger in the South can perfectly well exist alongside waste and excess of supply in the North" (Sylvie Brunel of "Action contre la faim", in Le Monde, 10/03/01). This crisis will also have serious consequences for the peasants in the countries of the capitalist periphery, in other words for a large part of the world's population. "Another disastrous consequence for the Third World of the collapse of the meat trade is looming: an overproduction of cereals" (idem). What clearer expression of the irrationality of the capitalist world, of the absurdity of its survival, than these healthy animals condemned to slaughter and destruction when millions of human beings have not enough to eat? "The world's food problem lies not in its production, which is amply suffiicient for all, but in its distribution: those who suffer from under-nourishment are too poor to nourish themselves" (idem). This is why capitalism cannot even offer itself the "luxury" of vaccinating cows and sheep: prices would collapse, all the more so if the animals destined for slaughter were offered free to the world's hungry populations.

As long as capitalism's economic laws, and especially the law of value, survive, it will be impossible to give away the animals that are to be slaughtered. The same is true of agricultural overproduction as it is of any other kind, whence the land lying fallow in the industrialised countries, and their unsold stocks of milk and butter. Only a society where the law of value, and so wage labour and social classes, have disappeared, will be able to resolve these questions, because it will be able to give rather than destroy.

But it is not only the population involved in agricultural production, whether small farmer, day-labourer, or farm worker, that will be hit by the brutal deceleration of the world economy.

Attacks against the working class

Redundancies are being announced in every branch of industry. In the USA, "new economy" companies like Intel, Dell, Delphi, Nortel, Cisco, Lucent, Xerox, and Compaq are laying off by the tens of thousands, but so are traditional industries such as General Motors and Coca-Cola. In Europe, lay-offs and shop and factory closures have abruptly taken off: Marks & Spencer and Danone, in the armaments industry at EADS and Giat Industries (builders of Leclerc tanks). Job reductions are hitting major companies and state employees.

In these industrialised countries, the national bourgeoisie is aware of the danger of a reaction from a concentrated working class with a strong historical experience of struggle, and so takes a maximum of political precautions to carry out its attacks. In countries where the working class is younger, less experienced, or more dispersed, the attacks are far more brutal. Amongst many other examples, it is clear that the working class will suffer particularly in Argentina and Turkey.

These massive attacks in every country and every branch of industry are dealing a serious blow to the lie of the "healthy economy", and above all to the idea that lay-offs in a particular company are exceptional, because elsewhere, everything is going fine. The whole international working class is affected, every branch of industry is undergoing redundancies, wage cuts, job insecurity and precariousness, speed-ups and longer working hours, a deterioration in living conditions, etc.

Bush Senior, accompanied by a chorus of states, governments, politicians, ideologists, journalists, and intellectuals, spoke of prosperity. Instead we have had, we have now, and all the signs are that we will continue to have more, and more widespread, poverty.

Humanity is faced with a historic log-jam. On the one hand, capitalism has nothing to offer but crisis, war, destruction, poverty, and increasing barbarism. On the other, the international working class, the only social force able to offer a perspective of an end to capitalism and a different society, remains unable to assert this perspective openly. In this situation, capitalist society is decomposing, rotting on its feet. Apart from the wars, the urban violence, the generalised insecurity, the most dramatic consequences threaten humanity's future and its very survival as a result of the destruction of the environment and the proliferation of all kinds of disasters.

The rottenness and irrationality of capitalist society

Holes in the ozone layer, the pollution of seas, rivers, the soil, the cities and the countryside, adulteration of foodstuffs, epidemics amongst human beings and livestock: this non-exhaustive list is a demonstration that the planet is becoming less and less livable, and that its very equilibrium is in danger.

Up till now, catastrophes and the deterioration of the environment appeared as simply the "mechanical" results of the deepening economic crisis, of capitalist competition and the frantic search for maximum productivity. Today, environmental questions have become stakes in the imperialist confrontations between the great powers. The US' breaking of the Kyoto agreements on the emission of greenhouse gases has been an opportunity for the other powers, especially the Europeans, to denounce American irresponsibility. "The European Union sees no solution to the climate problem outside the Kyoto protocol, and remains determined to apply it, with or without the United States" (Romano Prodi, president of the European Commission, Le Monde, 6th April 2001). Like "humanitarian" causes and the "defence of human rights", the environment and environmental disasters have become an area of competition between states. The "humanitarian interference" in Bosnia was a terrain for confrontations between the powers, just as it was during the intervention in Somalia. Humanitarian aid is in the same situation: whenever there is an earthquake, American and European teams compete to pull the most corpses from the ruins.

More and more, the link is becoming clear between capitalism's economic impasse, the exacerbation of imperialist tensions provoked on the historic level by the economic crisis, and all the consequences for the whole of social life, which in their turn sharpen imperialist rivalries and conflicts, and weigh still more heavily on the economic crisis. The capitalist world is dragging humanity and the planet down in an infernal spiral.

The proliferation of war

"Not the least tragic aspect of this catastrophe, is that humanity has learnt to live in a world where massacre, tortures, and mass exile have become daily experiences that we no longer even notice" (EJ Hobsbawm, The Age of Extremes).

The world today presents a terrifying panorama. The world is bloody with a multitude of interminable military conflicts, on every continent: the ex-USSR, especially its one-time Asian republics and the Caucasus; the Middle East from Palestine to Pakistan, via Iraq and Afghanistan; Africa; Latin America, especially Colombia; and the Balkans. Today, those countries or regions which are still untouched in one way or another by open or latent conflict, are islands of "peace" in an ocean of warfare.

In the late 1970s and early 1980s, the situation in the Lebanon was the clearest expression of the capitalist world's entry into its phase of decomposition. "Lebanisation" became an expression to describe countries prey to the dislocation caused by interminable war. Today, whole continents are "Lebanised". How many African countries? It is hard to count them all, but most have become new Lebanons. Afghanistan is doubtless one of the most extreme examples, after 20 years of continuous fighting.

And let there be no mistake, the primary responsibility in the aggravation of all these wars lies with imperialism in general, and with the great powers in particular. The wars have been started and stoked by the rivalries among the great imperialist powers: this is the case in Afghanistan since its invasion by Russia in 1980, and America's subsequent support for the Islamic guerrillas, including the Taliban, in the days of imperialist blocs. It is obviously the case in the Balkans, where Germany supported Croat and Slovene independence in 1991, and today supports the Albanian minority in Yugoslavia, while Britain, France, Russia, Italy, Spain and the USA - to name only the major powers - have intervened actively to counter Germany. The same is true in Africa. The great powers continue to stoke the flames even when the conflicts no longer represent any great interest for them, as is the case today for Africa and Afghanistan.

In general, the direct imperialist rivalries between the powers have been more discreet, especially since the end of the blocs in 1989. Today, however, tensions are rising. The USA has adopted a particularly aggressive attitude towards China, as in the case of the collision between the Chinese fighter and the American spy plane on 1st April 2001, towards Russia with the expulsion of 50 Russian diplomats at the end of March 2001, and towards Europe with the American rejection of the Kyoto accords on reducing greenhouse gases and with the proposed national missile defence system.

Bush Senior, accompanied by a chorus of states, governments, politicians, ideologists, journalists, and intellectuals, spoke of peace. Instead we have had, we have now, and all the signs are that we will continue to have more, and more widespread, war.

Wars in the period of capitalism's decadence

Capitalism seems to be irrational from a historic standpoint. It is leading the human species to destruction, and no longer has any economic or historical "rationality".

"During the 20th Century, more human beings have been killed or left to die than ever before in history (?) It has undoubtedly been the most murderous century for which records exist, both by the scale, the frequency, and the duration of the wars which have filled it (and which barely paused for an instant during the 1920s), but also by the incomparable extent of the disasters which it has produced - from history's greatest famines to systematic genocide. Unlike the 19th century, which seemed to be, and indeed was, a period of almost uninterrupted material, intellectual, and moral progress (that is to say, progress in civilised values), since 1914 we have seen a marked regression in those values once considered as normal in the developed countries and the bourgeois milieu, which it was once thought would spread to the most backward regions of the planet and the least enlightened strata of the population" (Hobsbawm, op. cit.).

It is true that capitalism has a history which allows us to understand its present dynamic. There are historical reasons for its irrationality. The most important is its entry into its period of historic decline, of decadence, at the beginning of the 20th Century - the 1914-18 war being the proof, the product, and an active factor in this decadence. It is with the period of decadence that wars ceased to be national or colonial wars - in other words with rational aims such as the conquest of new markets, or the formation and consolidation of new nations, aims which moreover were globally part of a process of historical development - to become imperialist wars caused by the lack of markets and the search for a new imperialist division of the world, objectives which could not contribute to historical progress. Imperialist wars have become ever more barbarous, bloody, and destructive. In the period of decadence, wars are no longer at the service of the economy: the economy is at the service of war, whether in war or in "peace". The whole period from 1945 to today thoroughly illustrates the phenomenon.

"During the 20th Century, warfare has increasingly targeted states' economy and infrastructure, as well as the civilian population. Ever since World War I, the number of civilian war victims has greatly exceeded the military in all the belligerent countries, with the exception of the United States (?) Under these conditions, why did the ruling powers conduct World War I as if it could only be totally won or totally lost? (?) In fact, the only war aim that counted was total victory, with what was called in World War II 'unconditional surrender' as the only fate for the enemy. This was an absurd and self-destructive objective, which ruined both victors and vanquished. It dragged the latter into revolution, the former to bankruptcy and physical exhaustion" Hobsbawm, op.cit.).

These specific characteristics of 20th Century warfare have been dramatically confirmed in all the conflicts from World War II onwards. Since 1989, and the disappearance of the imperialist blocs formed around the USA and the USSR, the threat of a world war has disappeared. But the disappearance of the bloc system and the discipline that went with it has opened the way to the explosion of a multitude of military conflicts provoked, stoked, and exacerbated by the great powers, even though the latter have difficulty controlling them once they are started. The characteristics of warfare in decadence have not disappeared with the disappearance of imperialist blocs, quite the reverse. They have been aggravated still further by the development of an attitude of "every man for himself" unbridled by bloc discipline, with every imperialist power, great or small, playing a lone suite against all the others. The capitalist world has entered into a particular phase of its historic decadence: a phase which we have defined as being its phase of decomposition. But whatever one's analysis, or the name one gives it, "there can be no serious doubt that a world historical era closed at the end of the 1980s and the early 1990s, and that a new one began (?) The last part of the century has been a new era of decomposition, uncertainty and crisis - and for much of the world, such as Africa, the ex-USSR, and the old socialist Europe, it has been one of catastrophe" (idem).

Wars in the period of capitalist decomposition

Today's imperialist tensions must be understood within this unprecedented historical situation.

"In the period of capitalist decadence, all states are imperialist and take measures in consequence: war economy, armaments, etc. This is why the aggravation of the world economy's convulsions can only sharpen the antagonisms between different states including, increasingly, on the military level. The difference with the period that has just come to a close is that these antagonisms, which previously were contained and used by the two great imperialist blocs, are now going to come to the fore. The disappearance of the Russian imperialist cop, and the resulting disappearance of its American counterpart as far as the latter's main 'partners' of yesteryear are concerned, will unleash a whole series of more local rivalries. At the present time, these rivalries and confrontations cannot degenerate into world war (even supposing that the proletariat were unable to oppose it). By contrast, given the disappearance of the discipline imposed by the existence of the blocs, they are likely to be more frequent and more violent, especially in those areas where the proletariat is weakest" (International Review n°61, 10th February 1990).

As long as capitalism exists, the Balkans and the Middle East will continue to be subject to endless war and conflict. In recent weeks, however, we have seen a proliferation of direct inter-imperialist tensions among the great powers. The attitude of the US has been particularly aggressive: "The motive remains mysterious for what seems gratuitous brutality in the Bush administration's approach not only to Russia and China, but also to South Korea and the Europeans" (W. Pfaff, International Herald Tribune, 28/03/01). It would be simplistic to blame this new aggressiveness solely on Bush Junior. True, a change in president and in the governing team provides an opportunity for a change in policy. But the underlying tendencies of US policy remain the same. The policy of "muscle-flexing" and "hold me back or I'll do something I'll regret" has nothing to do with the intellectual failings of the Bush family, as the European and even sometimes the US media try to tell us. It is a fundamental tendency imposed by the historic situation.

"With the disappearance of the Russian threat, the 'obedience' of the other great powers was no longer guaranteed (this is why the Western bloc fell apart). To obtain obedience, the US has had to adopt a systematically offensive stance on the military level" ("Report on the international situation, 9th ICC Congress, 1991", International Review n°67). This fundamental characteristic of US imperialist policy has remained unchanged ever since, for "Faced with this irresistible rise of 'every man for himself', the USA has had no choice but to wage a constantly offensive military policy" ("Report on imperialist conflicts, 13th ICC Congress, 1999", International Review n°98).

Increasing imperialist antagonisms

The US has all the more need to show its muscles when it finds itself in diplomatic difficulty. The Balkan wars' spread to Macedonia is an expression of the US' difficulty in controlling the situation there. The US has no real power base in the region, unlike the French, British and Russians traditionally allied to Serbia, or the Germans with the Croats and Albanians, and is therefore forced to adapt its policies to events. It is therefore no accident that "NATO has permitted a partial return by the Yugoslav army to the 'security zone' around Kosovo (?) There is clearly a desire to associate Belgrade to the effort to prevent a new conflict in the region" (Le Monde, 10th March 2001). As Serbia's ally, the US is interested in maintaining the stability of Macedonia "which has always been considered a weak link which must be preserved, if the whole of south-east Europe is not to be destabilised" (idem). The only power to profit from the extension of war to Macedonia, and the only power not interested in the maintenance of the status quo, is Germany. With an independent Croatia, a Croat province in Bosnia-Herzegovina, and a greater Albania created at the expense of Macedonia and Montenegro, Germany would have achieved its historical geo-strategic goal of a direct opening to the Mediterranean. Obviously, this perspective would give new life to Greece and Bulgaria's temporarily stifled appetites in Macedonia. And indeed, the Macedonian president is under no illusions as to who is really responsible for the Albanian guerrilla offensive. This was before the change in US policy. "Nobody in Macedonia today believes that the US and German governments don't know who are the terrorist leaders, and could not put a stop to their activity if they wanted" (Le Monde, 20th March 2001).

As in Afghanistan, in Africa, as in all the other regions of the world subjected to wars and conflicts typical of decomposing capitalism, there will be no peace in the Balkans until capitalism is overthrown.

The same is true of the Middle East. As we said in the previous issue of this Review, "the plan that Clinton has been trying to push through at any cost will have remained a dead letter, as forecast". The new Bush administration seems to be trying to take account of the US' inability to impose its pax americana. In fact, it seems to have come to terms with the idea that the region will always be subject to war, or at least that there will be no end to the conflict between Israel and the Palestinians. Colin Powell, the new US Secretary of the State Department and ex-Chief of General Staff during the Gulf War, recognises that there is no "magic formula", especially since Israel no longer hesitates to formulate its own policy, expressing the reign of "every man for himself" characteristic of the present period, even when this goes against US policy. As for Palestine, where the population is economically strangulated, poverty-stricken and oppressed, the bourgeoisie there can only express its despair in a suicidal anti-Israeli nationalism, supported by the European powers. France in particular has no hesitation in encouraging anything that counters US policy in the region.

America responded to its own impotence with the bloody bombardment of Baghdad as soon as Bush took office. The message is aimed at the Arab states, as well as the other powers: the US may not be able to impose its peace, but it will strike militarily whenever necessary, whenever it thinks that "the line has been crossed". Not only will there be no peace between Palestinians and Israeli, there is the danger that war, at least in latent form, will spread throughout the region.

The capitalist world's own laws inevitably exacerbate imperialist rivalries, spread military conflict on every continent; equally inevitable is the aggravation of the economic crisis. Capitalism in its death throes cannot offer peace and prosperity. It can only offer endless war and poverty.

What is the alternative to capitalist barbarism?

Only marxist theory was able, in 1989, after the collapse of the Eastern bloc and even before the disintegration of the USSR, to understand the significance of these events and foresee their consequences for the capitalist world and the international working class. This is not the result of the superiority of a few individuals, nor of blind and mechanistic faith in some Bible. If marxism is farsighted, it is because it is the theory of the international proletariat, the expression of its revolutionary being. It is because the proletariat is the revolutionary class that marxism exists and is able to apprehend the main lines of historical development, and in particular capitalism's inability to resolve the dramatic problems that its continued existence causes.

Even if the bourgeoisie tries to minimise its consequences and the attacks against the international working class, the avowed deterioration of the world economy can only help to awaken workers to the myth of capitalism's present prosperity and bright future. Already, there is a certain tendency towards a development of workers' militancy which the trade unions are doing everything to channel, to contain, and to derail. However slow their development, however timid the international working class' response to the present situation, these struggles bear the seeds of the overcoming of this daily barbarism, and of humanity's survival. The overthrow of capitalism demands the working class' refusal to accept economic attacks, and its refusal of all participation in imperialist war through the assertion of proletarian internationalism. It demands the widest possible development and extension, whenever possible, of workers' struggles. This is the only possible road towards a revolutionary perspective and the possibility for the whole human species to create a society without war, without poverty. There is no other solution. There is no other alternative.

RL, 7th April 2001