Texts from the 2nd Congress of Revolution Internationale

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The texts on the international situation and the period of transition which we are publishing in this issue of the International Review were presented to the Second Congress of Revolution Internationale, the ICC's section in France. These two themes were the main focus of interest in the work of the Congress. They were put on the agenda of the Congress not as purely theoretical questions but as a response to the real situation in which we find ourselves today. The present evolution of the crisis of capital - which is simply the continuation of the system's decay – is demonstrating more and more clearly that the only way out of the crisis is the revolution. The inexorable development of the crisis, which no one tries to deny anymore, will force the proletariat to once again take up the weapons of its historic struggle. At a time when capital has given up talking about the 'good times' ahead and is simply asking the workers everywhere to 'pull in their belts', the revolution no longer appears as a distant possibility but as a vital necessity.The content of sociaiism, the problems posed by the victory of the revolution, are going to become increasingly important preoccupations for revolutionaries, It is these problems - the analysis of the situation which leads up to the revoiution and the initial problems posed by the seizure of power - which the Congress attempted to deal with, These two aspects of the future - the situation before and after the revolution - are intimateiy connected with each other, because the present evolution of the crisis, by making the revolution a more and more concrete perspective, will oblige the proletariat to consider the content of the revolution as a reai and urgent question.

This is indicated by the fact that today a number of groups have begun to realize the importance of the problems of the transition period. Groups like the PlC (Pour Une Intervention Communiste), the CWO (Communist Workers' Organization), and the Spartakusbond have written articles on this question, which only a few years ago was practically ignored by the newly emerging revolutionary movement. Reality itseif has given rise to this need for clarification. The full reality of the crisis had to become quite obvious before eiements of the class like ICO (Informations Correspondance Ouvrieres), GLAT (Groupe de Liaison pour l'Action des Travailleurs), Alarma, or the situationists, who in 1968-9 used to make ironic comments about the 'apocalyptic prophecies' of RI, would be forced to recognlze the crisis and discuss it. Similarly it is the present evolution of the situation which is impelling various groups today to recognize and examine the problems of the revolution. "Mankind always sets itself only such tasks as it can solve." It is the real situation which demands that the proletariat becomes aware of its interests and its tasks; it is the real situation which forces revolutionaries to fulfil their responsibilities in the development of this awareness.

The development of the situation will therefore increasingly confront the workers movement with the problem of the content of the revolution. Who takes power, what form does this power take, how will it be organized, what are the first measures to be taken - all these questions will have to be raised and discussed as widely as possible. We can only begin to answer these questions by basing ourselves on the experience of the past. These questions must be approached in an extremely serious manner, and the responsibility of revolutionaries in this work is emphasized by the rupture in organic continuity with the past workers' movement, which has left the present workers' movement in a state of ignorance about the acquisitions of its own past. For several years now RI has been engaged in a discussion on the period of transition: this discussion has culminated in the passing of the resolution published in this Review, and the resolution is in turn a contribution to the discussion that is going on in the ICC and in the working class as a whole.

Concerning the texts on the international situation, the first, which deals with the world political situation, is an attempt to make a synthesis of the discussions on current events which have taken place in the ICC this year, and to highlight the various general factors which determine each particular situation. It is in this sense a methodological text which seeks to develop instruments for understanding any political situation that might arise. The second text examines the economic situation of capital at this juncture.

We can thus see that the Second Congress of RI didn't restrict itself to the specific problems of the section in France. The Congress was seen as an integral part of the work of the ICC as a whole. We published the texts which related more directly to the French section in Revolution Internationale no.32 (and the text on the situation in France also appeared in World Revolution no.9), but the following texts are of a general international interest, and we are publishing them in our international press as a contribution to the workers' movement as a whole. CN

The International Political Situation

1. For years the appointed spokesmen of the bourgeoisie tried to exorcize the demons of the crisis with their pseudo-scientific incantations. By handing out the Nobel Prize and other honours to its most cretinously complacent economists, the bourgeoisie hoped that reality would concur with its aspirations. But today the crisis of capitalism has become so blatant that even the most 'confident' and 'optimistic' sectors of the ruling class have had to admit not only its existence but also its severity. Because of this the task of revolutionaries today is not to proclaim the inevitability of the crisis, but to underline the bankruptcy of all the theories which sprang up like mushrooms after the rain during the fake 'prosperity' of the post-war reconstruction period.

2. Among the more fashionable theories of the bourgeoisie, those of the neo-Keynesian school were surely the most favoured. They promised an era of unlimited prosperity on the basis of judicious state intervention in the economy through various budgetary mechanisms. Since 1945, intervention of this kind has indeed been the rule in all countries: but the present economic crisis is shattering the illusions held by disciples of the man the bourgeoisie called: "the greatest economist of the twentieth century."

On a more general level, the present situation is exposing all those bankrupt theories which saw the state as the instrument that would save the capitalist system from its own internal contradictions. State capitalism - which these theories presented as simply the prolongation of the process of capital concentration which began in the ascendant period of capitalism, or even as a 'transcendence of the law of value' – is increasingly being revealed for what it always has been since its appearance during World War I: the essentially political expression of an economic system at the end of its tether, the desperate attempt of capitalism to retain a minimum of cohesion and to ensure not the expansion of the system but simply its survival.

The violent way in which the world crisis is now hitting those countries where state capitalism is most developed is more and more dispelling any illusions about their 'socialist' nature, or about the supposed ability of 'planning' or a 'monopoly on foreign trade' to end the anarchy of capitalism. In these countries it's becoming harder and harder to cover up unemployment by underutilizing the labour force. The authorities are now openly and officially recognizing the existence of this classical capitalist scourge. At the same time, rising prices which until recently have only affected the private sector market, are now hitting the official market in a spectacular manner. The economies of these countries which were supposed to be able to stand above the convulsions of world capital are now proving to be extremely fragile; poorly equipped to face up to the exacerbation of commercial competition. Despite the claims of their leader about 'overtaking the capitalist west' these economies have in recent years run up enormous debts with the west, which makes them more or less bankrupt today. This vast state of debt is a ringing refutation of all those theories which - sometimes in the name of 'marxism' - forgot that the general saturation of the market is not a phenomenon specific to this or that region of the world, and which saw the so-called 'socialist’ countries as a miraculous outlet for the resolution of capitalism's problems.

3. Since the end of the I960s, when it first began to become aware of its economic difficulties, the bourgeoisie has repeated over and over again that the present situation is fundamentally different from that of 1929. Terrified by the idea that it might enter another 'depression', it has tried to console itself by emphasizing all the differences between today's crisis and the crisis of the I930s. Thus the bourgeoisie has been trying to fixate on different aspects and stages of the crisis; it began by talking about a simple 'crisis in the monetary system' and then about the 'oil crisis', which was held responsible both for galloping inflation and the recession.

But in contrast to the explanations given by most 'experts' of the ruling class, it is clear that the crises of 1929 and of today do have the same underlying nature: both are part of the infernal cycle of the capitalist mode of production in its epoch of decadence, the cycle of crisis-inter-imperialist war-reconstruction-crisis, etc. They are both expressions of the fact that, after a period of reconstructing the productive apparatus destroyed by imperialist war, capitalism is unable to find outlets for its production on a saturated world market. The differences between the two crises are purely circumstantial. In 1929, the saturation of the market manifested itself through the collapse of private credit, in turn expressed through the collapse of the stock exchange. After an initial panic massive state intervention in the mechanisms of the economy permitted a temporary recovery; this took the form of armaments production and public works programmes, as in Hitler's Germany or the American New Deal. But these policies reached their own inherent limits because the reserves of the state were not inexhaustible: by 1938 the Treasuries were empty and the world economy plunged into a new depression, from which it emerged only because of the war …

In the period after World War II, state intervention was not relaxed as it had been after the first war. In particular, arms expenditure retained a crucial role in the economy. This explains the structural inflation which has existed in the system since 1945. Such inflation expresses the growing weight of unproductive expenditure necessary for the system's survival which leads to an increasingly generalized state of debt, especially on the part of the state machine when the period of reconstruction ends and the market is saturated, the only escape route open to the system is the accumulation of huge anticipatory debts which transform structural inflation into galloping inflation. Henceforth capitalism has no alternative but to oscillate between this inflation and recession as soon as the governments try to intervene. This is why 'recovery' and 'austerity' plans succeed each other at a growing pace in time with the system's catastrophic convulsions. At the present stage of the crisis, inflation and recession are more and more hitting national economies simultaneously and not one after the other.

Systematic state intervention has avoided the collapse of private credit which took place in 1929. Obfuscated by mere epiphenomena, unable to understand the fundamental laws of its own economy, the bourgeoisie does not see itself faced by a new 1929 … for the simple reason that it is already in the situation of 1938!

4. The present situation of the world economy also invalidates an idea which was defended even amongst revolutionaries, namely that the present crisis is a ‘crisis of reconstruction' - not meaning that it has no solution except a transformation of the structure of society itself, but that it is a result of a rearrangement of the existing economic structures. In this conception, state capitalist measures are often presented as a means for the system to overcome its contradictions.

At the end of the 1960s such theories could have a certain credibility; today they just look like intellectual gimmicks. The managers of the bourgeois economy would be wretched sorcerers' apprentices if they alone had plunged the world into the present state of chaos just to 'restructure' the economy.

In fact, in every sphere, the situation today is far worse than it was five years ago, which in turn was a considerable come-down from the situation ten years ago. If the conditions which began ten years ago led to the situation we were in five years ago, and if the conditions of five years ago have in turn led to the present situation, it's impossible to see how the present conditions - in which recession, debt, and inflation have never been worse - could lead to some kind of amelioration of the capitalist economy.

Nobel prize-winning economists, and those 'revolutionaries' who threw marxism on the scrap-heap because they thought they had gone beyond it, might as well resign themselves to the fact that there is no way out of the crisis and that it can only get worse.

5. Although the present crisis can only deepen inexorably, although no measure the ruling class might take can change its direction, the bourgeoisie is forced to adopt a series of policies aimed at assuring some kind of defence of the national capital amid the general panic and at slowing down the process of deterioration.

Because the crisis is the result of the conflict between the limitations of the world market and the expansion of capitalist production any defence of a national capital's interests must be based on a strengthening of its competitive abilities in relation to other national capitals; this also involves pushing its own difficulties onto others. Apart from the external measures aimed at improving its position on the international arena, each national capital must, on the internal level, put into effect policies which help to reduce the price of its commodities in relation to those of other countries; this requires cutting the costs of production. A fall in the costs of production in turn demands a maximum return on capital and a reduction of a country's over-al consumption; and this means, on the one hand an attack on the most backward sectors or production and on the middle classes as a whole and, on the other hand, an attack on the living standards of the working class.

There are thus three aspects to the policies of the bourgeoisie: deflecting difficulties onto other countries, onto the intermediate strata, and onto the working class. The common denominator of all three is the strengthening of the tendency towards state capitalism, which the bourgeoisie everywhere is trying to put into effect. The resistance against this, and the contradictions it gives rise to explain how the economic crisis is leading to a political crisis which is becoming more and more generalized today.

6. The first aspect of the response to the crisis by the bourgeoisie of each country - the attempt to deflect its problems onto other countries - comes up against the immediate and obvious problem that it is met by the same effort on the part of all the other national bourgeoisies! It can only lead to an intensification of economic rivalry between countries which inevitably has repercussions in the military sphere. But no single nation can be in opposition to all the other nations of the world, whether it be on the economic level or, still less, on the military level. This is why there are imperialist blocs, and these blocs inevitably tend to strengthen themselves as the crisis deepens.

The division of the world into these blocs does not necessarily correspond to the main economic rivalries which continue to intensify (thus Western Europe, USA, and Japan, the main economic rivals, are all in the
same imperialist bloc). But even though military conflict between the countries of one bloc can't be ruled out (eg. Israel and Jordan in 1967, Greece and Turkey in 1974), these economic tensions do not override the military 'solidarity' between the main countries of a bloc when they are confronted with the other bloc. If the intensification of economic rivalries between the countries of one bloc expresses itself in military terms, it only serves the interests of the other bloc; thus it expresses itself as a rule in the intensification of military rivalry
between the blocs. In this situation, the defence of the national capital of each country tends more and more to come into conflict with the defence of the interests of the bloc as a whole. This constitutes another difficulty encountered by the bourgeoisie of each country in its attempts to put into effect the first aspect of its response to the crisis; and the only outcome can be the submission of national interests to the interests of the bloc.

7. The ability of each bourgeoisie to carry through this aspect of its policy is conditioned basically by the strength of its economy. This is expressed by the fact that the first waves of the crisis hit countries at the periphery of the system, the countries of the Third World. But as the crisis deepens, its effects begin to shake the industrial metropoles with increasing brutality; and here again it is those metropoles which have the most solid economic base that are best able to resist the crisis. Thus the 'recovery' u:t 1'175-76, which mainly benefited the USA and West Germany, was paid for by a catastrophic deterioration of the weakest European economies such as Portugal, Spain, and Italy; this increased these latter countries' dependence on the more powerful economies, above all on the USA. This economic superiority also expresses itself on the military level: not only do the weaker countries of each bloc have to subordinate themselves more and more to the most powerful country, but also the bloc which has the strongest economic base - ie. the American bloc - is advancing and strengthening itself at the expense of the other bloc. It is quite clear today, for example, that the much vaunted American 'defeat' in Vietnam was no more than a tactical withdrawal from an area which was of no great military and economic interest in order to reinforce American power in much more important areas like Southern Africa and the Middle East. The intensification of the crisis is thus silencing the chatter about 'national independence' which developed in countries like France during the reconstruction period; at the same time it is giving the lie to all the mystifications disseminated by the extreme left of capital about' national liberation' and a 'victory against American imperialism'.

8. The second aspect of the bourgeoisies' response to the crisis consists in trying to make the productive apparatus more profitable by acting against other social strata apart from the proletariat. On the one hand this involves an attack on the living standards of all the middle strata linked to non-productive sectors or small scale production; on the other hand it requires the elimination of economic sectors which are the most backward, the least concentrated, or which use the most archaic techniques. These heterogeneous social strata are essentially composed of small peasants, artisans, small capitalists and shopkeepers, whose incomes are often being reduced in a draconian way because of fiscal pressure and competition from more concentrated units of production and distribution. Quite often this has led to the ruin of these strata. Through state capitalist measures this policy can also hit the liberal professions, officers in the armed forces, certain elements in administration or the tertiary sector, as well as those factions of the ruling class which are most tied to the classical forms of individual property.

Such policies when executed by the national capital inevitably come up against resistance, sometimes extremely fervent, from all these strata. Although they are historically doomed and incapable of unifying themselves, these strata can have a considerable weight in political life. In particular, they can have an important, even decisive electoral influence in certain countries. They represent the main source of support for right-wing governments linked to 'classical' capitalism - governments which dominated most countries during the reconstruction period - or even a balancing force to governments of the left, particularly in Northern Europe. Because of this, the resistance put up by these social strata can act as a powerful obstacle in the way of state capitalist measures which governments desperately need to take. This obstacle can lead to a real paralysis in a government's ability to act which further serves to aggravate the political crisis of the ruling class.

9. The third aspect of capitalism's response to the crisis, attacking the living standards of the working class, is bound to become the most important since the proletariat is the main producer of social wealth. This policy, whose main aim is to reduce real wages and increase exploitation, manifests itself primarily through the inflation which is hitting consumer prices in goods most important to the working class ( food, etc.); through a massive increase in unemployment; through the elimination of certain 'social advantages' which are actually a part of the means of reproducing labour power and thus a part of wages; and finally through speed-ups in the pace of work which are sometimes extremely brutal.

This assault on the living standards of the working class is a reality which the capitalist class has to recognize; in fact it is the cornerstone of all its 'austerity' plans. This assault is actually much more violent than official figures dare admit, since these do not take into account the reductions in 'social advantages' (medical facilities, social security, housing, etc.), or the effects of unemployment which not only hits workers out of a job but the class as a whole since it means a general reduction in the variable capital available for the maintenance of labour power.

This situation is destroying another theory which had its hey-day in the period of reconstruction: the so-called refutation of the marxist prediction about the absolute pauperization of the proletariat. Today the consumption of the working class is being reduced and exploitation being increased, not in a relative but in an absolute manner.

10. Since around 1968-69, the capitalist attack on the working class has encountered a very lively response. This confrontation between the bourgeoisie and the proletariat determines the general direction which the current crisis is imposing on history, a direction which leads not to the imperialist war which followed the 1929 crisis but to class war. So, of the three aspects of the bourgeoisie's response to the crisis, the one which relates directly to the working class is going to become more and more important in the general political developments ahead. Especially where the proletariat is strongest, we are going to see capital making increasing use of its 'left' factions, those political forces best qualified to mystify and contain the working class, to impose on it the 'sacrifices' demanded by the economic situation. This need to call on the left will be most strongly felt in those industrialized countries whose economy makes it impossible to establish any kind of social 'consensus' or to inspire any confidence in capital's ability to overcome the crisis. In contrast to the more prosperous countries which are better able to resist the effects or the crisis and have less need for 'anti-capitalist' propaganda in their efforts to tie the workers to the defence of the national capital, the weaker countries are about to go through important changes in their political apparatus. However - and this is another contradiction which the ruling class has to deal with - these changes are being met with a determined resistance from the old governing clique; these cliques are doing everything they can to stay where they are or at least retain a position of importance, even if this works to the detriment of the national capital.

11. We can thus see how, in trying to put these three aspects of its strategy into effect, the bourgeoisie is coming up against a whole series of resistances and contradictions. Not only that, but each aspect of capital's strategy has its own internal contradictions. In some cases, there is a convergence between certain of these aspects: for example, state capitalist measures which are bound to hit the most backward sectors of capitalism also provide the left factions of capital with an opportunity to mystify the working class by presenting them as 'anti-capitalist' or 'socialist' measures. Similarly, it can be the case that a struggle against the most backward sectors of society is led by political forces who enjoy the confidence and support of the dominant imperialist bloc. This is the case in Spain today where the process of ‘democratization’ is being set in motion in liaison and agreement with the European and American bourgeoisie. Very often, however, there is a conflict between the state capitalist measures demanded by the deepening of the crisis and the increased subordination of the national capital to the interests of the bloc. Such conflicts can be the result either of a threat to the economic interests of the major power in the bloc, or of the fact that the political forces most qualified to serve the interests of the national capital defend international policies which do not conform to the interests of the bloc. For the same reason there may be a conflict between the needs of a national capital in its international policies and the nationalist mystifications which it tries to use against the proletariat.

12. As the crisis deepens, these contradictions tend to get sharper, to make the bourgeoisie's problems more inextricable. In trying to cope, the bourgeoisie does not have recourse to any long-term or even middle term plans. It proceeds blow by blow, from day to day, according to the needs of the moment. The empirical character of bourgeois politics is further accentuated by the fact that the bourgeoisie is incapable of developing a long-term view of its own historical perspectives. Certainly it has profited from past experiences and its political and academic advisers, its economists and its historians are always on hand to jog its memory and prevent it from making the same mistake twice: on the economic plane for example, it has understood the need to avoid another 1929; similarly, on the political plane, in 1945, it was able to take measures against the possibility of a post-war revolutionary wave like the one of 1917-23. However the bourgeoisie's use of its own experience never goes beyond learning how to make a few fixed responses to a situation that has already appeared before. Its own class prejudices prevent it from developing a real understanding of the laws of history; this lack of vision is further aggravated by the fact that today, the bourgeoisie is a reactionary class whose social system is in total decomposition and decadence. As the economic system gets out of control, it becomes harder and harder for the bourgeoisie to understand the complex and contradictory mechanisms which underlie the crisis.

Any understanding of the different policies which the bourgeoisie of this or that country is compelled to adopt at any given moment, any grasp of the relations of force between contending factions of the bourgeoisie, must therefore take into account the contradictory elements of the various problems which confront the ruling class, and the relative importance which these elements acquire in a given geographic, historic, economic and social context. It is particularly important to bear in mind that the bourgeoisie does not always act in its own best interests, either immediate or historical; very often the factions of the bourgeoisie most suited to deal with a situation only come to the fore after violent conflicts with their rivals.

13. It is in the under-developed countries that the bourgeoisie comes up against the most violent contradictions in its efforts to deal with the crisis. The measures taken by the ruling class are doomed to meet a total impasse at the economic level. These countries are unable to push the effects of the crisis elsewhere: on the contrary they are the main victims of this policy when it is used by the bourgeoisies of more developed countries. This economic impotence expresses itself on the political level in the form of chronic instability and brutal convulsions. Confrontation between different factions of the national capital cannot be resolved through the machinery of 'democracy', and often leads to armed conflict. These conflicts are particularly violent when they take place between the partisans of state capitalism - the need for which increases as the economy falls to pieces - and the most anachronistic factions of capital, who have a particular importance in countries with a low level of industrialization.

These confrontations between factions of national capital are usually amplified by the pressure of inter-imperialist rivalries, and in areas like Lebanon and Southern Africa today, they are entirely subordinated to the conflict between imperialisms.

For all these reasons, the under-developed countries are the main breeding ground for 'national liberation' struggles - especially when they happen to be situated in regions over which the great imperialist brigands are squabbling - and for military coups d'etat; the latter because the army is the only force in such societies which can guarantee a modicum of cohesion because it offers something which is crucial to the struggle between factions of the ruling class in these countries: physical violence. Very often the army in the under-developed regions is the most resolute agent of state capitalism in contrast to the 'democratic' factions who are tied to private interests. The predominant role of confrontations between factions of the ruling class in these countries is further underlined by the fact that the working class, despite frequent violent reactions to ferocious levels of exploitation, is relatively weak, owing to the low level of industrialization.

14. It is in the countries with the greatest economic strength that the ruling class has the strongest grip over the problems thrown up by the crisis and therefore enjoys the highest level of political stability. This is connected to the fact that in these countries the different aspects of the bourgeoisie's response to the crisis do not lead to so many contradictions. Since the economic situation is less chaotic than elsewhere, the ruling class is not forced to take such extreme measures and still has a wide margin of political manoeuvre.

In concrete terms, this is expressed by the fact that the national capital is in a position to compete with its rivals on the economic and military front. This makes it less dependent on the imperialist blocs and more able to impose its own objectives on them. The strength of these capitals is further reinforced:

-- By the fact that the anachronistic sectors of production have a small numerical, economic and political influence in these countries;

-- By the ability of these countries to use the simple mystification of 'prosperity' against the working class.

This second aspect of the power of the bourgeoisie is particularly apparent in countries like the USA and West Germany where the ruling class has been able to mount an officially acknowledged attack on the living standards of the workers (a fall in real wages and massive increases in unemployment) without any major reaction from the proletariat, even though it is amongst the most powerful in the world. Moreover in countries of this kind, the general tendency towards state capitalism which the crisis accelerates does not take the form of violent conflicts as it does in the backward countries. Instead there is a gradual fusion between private and state capital.

In these conditions, the bourgeoisie retains a fairly wide margin of manoeuvre which tends to keep confrontations between ruling factions within certain limits (eg. the similarity between the programmes of Carter and Ford in the USA), and to absorb the repercussions of these confrontations (eg.the ease with which the American bourgeoisie survived and made use of the Watergate affair). The fact that moves, towards implementing the first and third aspects of the bourgeoisie's strategy does not lead to many contradictions at the moment can, even though these two are the most important historically, lead to a temporary pre-eminence of the contradictions created by the second aspect. In this way one can explain the defeat of the Social Democrats in Sweden and the SPD's losses in Germany.

But the SPD is being kept in power thanks to the co-operation of the liberals and this expresses the German bourgeoisie's need to retain a vehicle for carrying out state capitalist measures and mystifying the working class.

15. In countries which are developed but where capitalism is relatively weak, the contradictions engendered by the different aspects of the bourgeoisie's strategy are tending to find their own balance and to interact in a way that may appear paradoxical and precarious at first sight. This phenomenon is particularly clear when we look at the role of the Communist parties in certain European countries. These parties represent the faction of the bourgeois political apparatus which is best qualified both to take the state capitalist measures demanded by the situation and to make the working class accept the necessary sacrifices. This is why their participation in government is becoming more and more urgent. However, because of their international policies and the fear that they invoke in important sectors of the ruling class, the CP's accession to government office is being held up by a determined resistance from the American bloc, which is supported by the most backward sectors of society. In recent years, the CP's have been trying to prove to the rest of the bourgeoisie that they are loyal servants of the national capital, that they are independent from the USSR, and that they have every intention of respecting the rules of democracy; an intention which their rejection of the term 'dictatorship of the proletariat' clearly indicates. However, all these concessions have yet to overcome all opposition, even though the entry of the CP into government is extremely urgent in some of these countries. This again illustrates the fact that, shaken by its own internal contradictions both nationally and internationally, the bourgeoisie does not always grasp the right instrument at the right time. This is a significant, though temporary and unstable, characteristic of the situations and balance of forces which prevail today in a number of European countries, especially Portugal, Spain, Italy and France.

16. Of all the European countries, Portugal has in the last few years been the best illustration of the political crisis of the bourgeoisie. Portugal has the combined characteristics of both a 'backward' country - which explains the role played by the army - and a 'developed' country with a highly concentrated proletariat which became extremely combative around the end of 1973. These factors were at the root of the country's convulsions in 1974 and 1975. The first phase of these convulsions was a sharp move to the left, led by the established left, the left of the army and the extreme left. This expressed both the urgent necessity for state capitalist measures in a particularly catastrophic economic situation, and the need to derail and contain the working class. This phase was followed by a return to the right, which corresponded to a decline in the class struggle to an extremely strong resistance to state capitalism by sectors linked to small property, and to enormous political and economic pressure from the American bloc. The present orientation of Portuguese politics to the right (the abandoning of some aspects of agrarian reform, the return of Spinola, the liberation of PIDE - secret police agents) is an expression of a reflux in the class struggle and reinforces the demoralization of the class; at the same time the agents of these policies are poorly equipped to deal with a revival of class struggle, so the Portuguese situation is full of instability for the future.

17. Spain is one of the European countries destined to go through major convulsions in the next few years. The sharpness of the crisis, together with the senility and unpopularity of the old Franco regime, have made it extremely important that Spain should undergo a 'democratic' transformation. The death of Franco has set this process in motion. Such a change is all the more important for a bourgeoisie that has to deal with one of the most combative proletariats in the world: mere repression is becoming less and less effective as a means for containing the struggles of the Spanish working class. 'Democracy' is the only instrument Spanish capital can use to derail the combativity of the workers. And yet despite the urgency of this democratic transition, the whole process is being held up by the determined resistance of the most backward sectors of the ruling class based around the state bureaucracy, the army, and above all, the police. At the same time the Spanish bourgeoisie, like the rest of the Western bourgeoisie, is still extremely distrustful of the Spanish Communist Party, even though it is one of the staunchest advocates of 'Eurocommunism'. Alarmed by the Portuguese experience, the Spanish bourgeoisie wants to avoid a too rapid shift of power into the hands of the opposition, in case this might give too many advantages to the CP which is the main force in the opposition movement. Therefore, before any major changes take place, the bourgeoisie is trying to set up a strong centre party to defend the interests of the classical bourgeoisie and form a counter-weight to the CP.

The political crisis of the Spanish bourgeoisie is thus expressing itself in an extremely precarious balance between the vestiges of Francoism, the demands of the western bloc, and the strength of tile class struggle.

18. The situation of Italian capital is also characterized by the extreme precariousness of the political solutions it has resorted to up until now. Confronted with one of the most chaotic economic situations in Europe, the ruling political faction, the Christian Democracy, is incapable of taking the necessary measures to bring some degree of health to the economy and to strengthen the authority of the state. But although a growing element of the bourgeoisie recognizes the indispensability of the Italian Communist Party to the government, this solution is encountering fierce resistance today. In Portugal an alliance between the interests of the American bourgeoisie and those of backward sectors of the national economy opposed to further state capitalism pushed the CP from power. The same alliance is now keeping the Italian CP out of the government. At the moment the PCI is carrying out its responsibilities to Italian capital in an indirect manner. But its 'critical support' of the minority government of Andreotti can only be temporary. If it lasts too long it will bring considerable problems for capital in Italy.

This bastard solution has a dual inconvenience: it does not allow the adoption of energetic state capitalist measures, and it cannot be presented as a 'victory' for the workers in the way that direct PCI participation in government could. At the same time the unpopularity of austerity measures is to some extent directed at the PCI. In Italy as in Spain, capital is walking a tight-rope.

19. In France a long period of political stability is coming to an end. It is now following the path of other Latin countries hit by the crisis and is also on the verge of major political upheavals. The political forces which have been in power for nearly twenty years are becoming worn out, incapable of taking energetic measures to ameliorate the economic situation. As the parliamentary fracas about capital-gains tax showed, these forces are extremely dependent on the most backward sectors .of society, and they are only capable of mounting a relatively timid attack on the living standards of the working class. This is illustrated by the moderate character of the Barre plan. In these circumstances, the 'united left' is confidently putting itself forward as the most likely successor to the right after the legislative elections of 1978. The left will tend to move towards the centre of political life in France. It will also make use of the municipal elections of 1977 in order to induce an increasingly discontented working class to be patient and 'await the 'great victory' of a left government.

In the meantime, the right will have to improvise. However, although the situation in France is transitory - just as it is in Portugal, Spain and Italy - French capital has a greater structural strength and therefore a wider margin of manoeuvre and more effective means of holding its political problems at bay.

20. The precarious situation of British capital is not fundamentally different from that of other European countries we have looked at. But the point to emphasize about Britain is the paradoxical relationship between the depth of the economic crisis and the ability of the bourgeoisie to retain political control of the situation. If we bear in mind the three main aspects of the bourgeoisie's strategy, we can see that the British ruling class does not have much difficulty with the middle strata, in particular the peasantry, which is practically non-existent. At the same time British capital's main left faction, the Labour Party, enjoys the full confidence of the American bloc. Finally, the political strength of British capital is demonstrated by the way that the trade union apparatus from the TUC to the shop stewards has succeeded in maintaining control of one of the most militant proletariats in the world.

However, although the oldest bourgeoisie in the world has surprised everyone with the breadth of its resourcefulness, in the end all its 'savoir faire' will be rendered powerless by the continued decomposition of an economy which since 1967 has been one of the hardest hit by the world crisis.

21. The situation in the so-called 'socialist' countries is fundamentally no different from the situation in western Europe. The economic crisis is moving onto a political level because of the contradictions engendered by the divergences between national interests and the interests of the bloc; by the necessity to breathe some life into the productive apparatus; by the sullen but sometimes decisive resistance of sectors like the peasantry; and by the sporadic but violent reactions of the working class. In fact the fragility of these regimes, their economic weakness and their unpopularity, leave them with a much narrower margin of manoeuvre than the 'democratic' countries. In particular, the almost total statification of political life means that there are no political forces capable of channelling working class discontent into a 'democratic' dead-end a la Spain. The only political changes that can take place in these countries involve a modification of the ruling clique within the single party apparatus, and this places considerable limits on the mystifying effect of such window-dressing. Apart from the recuperation and institutionalization of organs of working class struggle, and the 'democratic' phraseology of certain forces which are doomed to remain in opposition, capital in these countries lacks any method for dealing with the working class excepting ferocious and systematic repression. The situation in Poland is a graphic illustration of all these points: Polish capital is extremely weak, and this means that its rigid political apparatus is subject to all kinds of convulsions which make it incapable of mounting an attack on the living standards of the peasantry and of an extremely combative working class.

22. China is a particularly significant example of the crisis of the 'socialist' countries. The development of its domestic and international policies confirms the analysis put forward for other countries.

To begin with, its rapprochement with the USA towards the end of the I960s has invalidated the theory that there is a 'state capitalist bloc' with a fundamental solidarity of interests against the 'private capitalist bloc'. This rapprochement also shows that it is impossible for any country, no matter how powerful, to be independent of the two great imperialist blocs which dominate the globe. The only 'national independence' is the ability to move from one bloc to another.

Secondly, the convulsions which have followed Mao’s death show the extreme instability of regimes of this kind. Once again we have seen confrontations between political forces more or less favourable to the Russian bloc or the American bloc, combined with conflicts within the state bureaucracy over various political and economic orientations. These conflicts have been settled in a violent and sometimes bloody manner by the different cliques that make up the state and the party.

Thirdly, the fact that Hua Kuo-Feng, former chief of police and now strongly supported by the army, has emerged as Head of State shows that open systematic repression is the main way of dealing with the working class in China. It also illustrates the fact that despite its particular characteristics, China does not escape the rule which gives the army a preponderant role in the internal politics of under-developed countries.

23. Although we can only understand the current political crisis of the bourgeoisie by taking into consideration all three major aspects of capital's response to the crisis, this doesn't mean that the three aspects have the same impact in the evolution of the crisis. We have already seen that certain of these aspects can, at a given moment and for largely circumstantial reasons, constitute the determining factors in a particular situation. But it is also true that on a historic level certain of these aspects will tend to play a more decisive role than others. We can thus say that the importance of problems arising from capital's attack on the middle strata will tend to give way to problems which are more directly linked to the fundamental interests of capital and which are at the heart of the historic alternative posed by the crisis: generalized class war or imperialist war. In the coming period we are going to see a growing concern with, on the one hand, the question of competition between national capitals, which will be expressed by the aggravation of inter-imperialist tensions and the internal strengthening of the blocs; and, on the other hand, with the question of the class struggle. And since it is the class struggle which will determine the survival of the system, the more the class struggle threatens the existence of capital the more it will come to the fore over the factor of inter-imperialist rivalries. History has shown, especially in 1918, that the only time the bourgeoisie is able to forget rivalry between nations is when its own life is at stake; and at such extreme times the bourgeoisie is perfectly capable of uniting against its common enemy, the proletariat.

Having outlined this general perspective, an examination of the political situation in most countries (with the exception perhaps of Spain and Poland) leads us to the conclusion that, over the past year, the factor of class struggle has to some extent given way to the other factors which determine the way the bourgeoisie runs its affairs.

Although in contrast to the 1930s the general perspective today is not imperialist war but class war, it must be said that the present situation is characterized by the large gap between the level of economic and political crisis and the level of class struggle. This gap is particularly striking when we look at a country which since 1969 has experienced a large number of social movements: Italy. The first effects of the crisis produced a powerful response from the working class, like the 'rampant May' of 1969. But today the massive assault on the working class which is the result of the country's political and economic disintegration has provoked a very limited response from the class, a response which in no way measures up to the previous levels of struggle. We are not just talking about a stagnation of class struggle, but an actual retreat by the proletariat. This applies both to the combativity of the class and to its level of consciousness, since today in Italy the trade union apparatus especially, which was previously brushed aside and denounced by an important number of workers, has regained a fairly effective control over the class.

24. Leaving aside the explanation for the present downturn in the class struggle, this phenomenon has delivered the coup de grace to all the theories which see the class struggle as the cause of the crisis. Whether they come from bourgeois economists - usually the most stupid and reactionary - or whether they hide behind a 'marxist' screen, such conceptions are today quite incapable of explaining how a reflux of class struggle can lead to such an intensification of economic crisis. The 'marxism' of the situationists, who saw May 1968 as the cause of economic difficulties which they only 'discovered' several years later, like the 'marxism' of a group like the GLAT ( Group de Liaison pour l'Action des Travailleurs) which spends its time accumulating vast stocks of statistics, is in dire need of a rest cure.

On the other hand, the present situation might appear to provide grist to the mill of those theories which hold that the crisis is the enemy of the class struggle and that the proletariat can only make its revolution against the system when it is functioning 'normally'. This idea, which bases its arguments on the way the class struggle developed after 1929, is one expression - when it's defended by revolutionaries - of the demoralization engendered by the terrible counter-revolution which has dominated one half of the twentieth century. It turns its back on the whole historical experience of the class and has always been opposed by marxists. If we look at the present situation in a static, immediatist manner, it might appear that the relative reflux of the class struggle is the result of the deepening crisis. But if we take into account all the characteristics of the proletarian movement, we can understand the real causes of this reflux and draw out the perspectives which arise from this situation. And of all the factors which determine the present situation three in particular must be borne in mind:

-- the characteristics of the historical development of revolutionary movements of the class;

-- the nature and rhythm of the current crisis;

-- the situation created by a half-century of counter-revolution.

25. For over a century revolutionaries have defended the idea that, in contrast to bourgeois revolutions which "storm quickly from success to success", proletarian revolutions "constantly engage in self-criticism, and in repeated interruptions of their own course … they seem to throw their opponent to the ground only to see him draw new strength from the earth and rise again before them, more colossal than ever …" (K. Marx, The Eighteenth Brumaire of Louis Bonaparte). The jagged course of the class struggle, which manifests itself both in the great historic cycles of flux and reflux and in fluctuations within these cycles, is connected to the fact that, in contrast to previous revolutionary classes, the working class has no economic base in society. Because its only source of strength is its consciousness and its capacity to organize which are constantly threatened by the pressure of bourgeois society, any mistake by the proletariat can mean not simply a standstill but a defeat which immediately plunges the class into demoralization and atomization.

This phenomenon is further accentuated as capitalism enters into its decadent epoch, when the working class no longer has any permanent organizations, such as the trade unions last century, to defend its interests as an exploited class. Today, as we emerge from the most terrible counter-revolution in the history of the working class, the jagged evolution of the class struggle is further accentuated by the profound break between the new generation of workers and the past experience of the proletariat. The working class today will have to endure a whole series of experiences over and over again before it will be able to draw the lessons of these experiences, renew the links with its own past, and integrate everything it has learnt into its future struggles.

The long road the class struggle must follow today is elongated further by the conditions in which the resurgence of class combativity is taking place: the slow development of an economic crisis of the system. Previous revolutionary movements of the proletariat all grew out of wars; this immediately forced the class to deal with the most violent convulsions that capitalist society can give rise to, and which very rapidly confronted the proletariat with political problems, above all the problems of seizing power. In the present circumstances, the development of an awareness of the total bankruptcy of the system - especially where the proletariat is most concentrated, ie in the most developed countries - is necessarily a slow process which has to follow the rhythm of the crisis itself. This allows all kinds of illusions to linger for quite some time about the possibility of the system overcoming the crisis by simply changing the bourgeois team in power and applying a few choice formulae.

26. This who l e situation has allowed capital to recoup some of the ground it lost at the beginning of the crisis when the sudden initial reaction of the proletariat came as quite a surprise to the ruling class. In particular, the left factions of capital and their trade union machinery have managed to systematically sabotage the struggles of the class: when they are in power by brandishing the threat of the return of the 'right', of the 'reactionaries or even more frequently, by presenting state capitalist measures as a way of overcoming the crisis and of defending the interests of the proletariat. The 'extreme left' has played an important part in all this with its policy of 'critical support' which serves to steer elements of the class who are beginning to break with the established left back into the electoral and trade union fold.

The idea of waiting for the victory of the left has gained ground in the working class because of the disappointment engendered by a series of defeats on the level of economic struggles. Feeling the need for some kind of 'politicization' of its struggles, but lacking sufficient experience, the class has been led onto the terrain of bourgeois politicization. This disappointment has also bred a certain fatalism in the working class; the workers will not tend to react again until the crisis has deepened in a really violent manner.

27. All these factors allow us to understand the present mood of the proletariat and the relative decline of its struggles. But because the crisis can only get worse, and because, in contrast to 1929, the working class today is an undefeated class, the conditions which for the moment have allowed the ruling class to regain control of the proletariat will tend to disappear.

As the crisis deepens and the living conditions of the proletariat get worse and worse the class will be forced to respond no matter what mystifications are obscuring its consciousness today. In places where the left and its leftist pimps are already in power this response will tend to unmask their real nature quite quickly. In places where the left is not yet in office, its accession to state power will probably allow it to keep things ticking over for a little while longer. But at the same time this will give rise to the conditions which will enable the proletariat to understand that its struggles can only lead in one direction: direct confrontation with the capitalist state.

Finally, as an accumulation of experience allows the class to draw the lessons from its struggle, the demoralization and the mystification that it is going through today will be transformed into positive factors in the development of combativity and class consciousness. At the moment, the mystifying manoeuvres of the bourgeoisie are still bearing fruit and the role of revolutionaries is to carry on denouncing them with the utmost energy, especially those mystifications promulgated by the 'extreme left'. But this very gap between the level of the crisis and the level of the class struggle means that important upsurges of the class are on the agenda, and these upsurges will tend to narrow the gap.

The relative calm in the class at a time when the crisis is getting worse and worse (particularly the period 1974-5) and seems to have stunned the class to some extent, should not be seen as an inversion of the general tendency for the class struggle to follow the ascendant course it began in the late sixties. The calm today is simply the calm before the storm. After its initial battles at the end of the sixties and beginning of the seventies the working class is often in an unconscious manner preparing and concentrating its forces for a second round. Revolutionaries must also prepare themselves for this second round so that it doesn't take them by surprise and so that they can fully carry out their tasks in the coming struggles.

November 1976

The Acceleration of the Economic Crisis

"It seems that this time, happily, the danger will be avoided. The recovery has taken on afresh and has become general during the first quarter of 1976; unemployment which had reached one of the highest levels since the war, has started to fall in some countries." (OECD, Economic Perspectives, June 1976)

These optimistic predictions of the OECD would be swept away just a few months later. For the first time since the recession of 1974-5 the stock exchanges in New York, London and Paris experienced their lowest trade-figures. Confirming the profound scepticism of the bourgeoisie as to the depth of the 'recovery', the Paris stock exchange experienced its 'black Thursday' on 12 October with an average 3 per cent fall in one day of all its shares. On the very same day, Spain, Portugal and Italy took the most draconian measures in their histories: interest rates were raised; wage and price freezes introduced; and a series of protectionist measures against imports brought in. Actually Paris had already preceded them on this path (though not with the same severity) with the ‘Barre Plan'. Simultaneously, in the same month, the franc, pound and lira continued their slow descent to hell. On 5 October Le Monde could laconically conclude that the "recovery was drawing to a close".


Before examining the phenomena and nature of the 'recovery' we must first of all recall the state of the world economy in 1975. According to the Bangue de Reglements Internationaux world trade for that year expanded by 33 billion dollars, an eighth of the figure for 1974; the most significant contraction in world trade since World War II.

This paralysis in trade, the expression of an over-developed productive apparatus acting on a world market saturated with unrealizable commodities, was concretized in a 10 per cent decline in the volume of international trade.

In August 1975 the decline in industrial production taken over a year was the following: the USA by 12.5%, Japan by 14%, West Germany by 12%, France by 9%, Great Britain by 6% and Italy by 12.2%. As a corollary to this, the indices for world trade in metals went from 245.8 in May 1974 to 111.5 in May 1975, (using 100 as the base in 1970). That classic expression of the insoluble contradiction between the relations of production and the productive forces, unemployment, had reached a record total of 23 million unemployed in the OECD countries by the middle of 1975.


The reason for the 'recovery' - beginning in the last quarter of 1975 - was essentially the purely conjunctural movement of stock-building that had taken place during 1975. This artificial aspect of the ‘recovery' was emphasized by the fact that "the build-up of stocks this year will undoubtedly have contributed about 1.75 per cent to the expansion of production in real terms, although this played a negligible role during the recoveries of 1969 and 1972." (OECD, Economic Perspectives)

What are the results of this 'technical operation'? According to the OECD Ministers who met last June in Paris:

"The rapid expansion experienced by the USA since mid-1975 provided a strong impetus to the recovery in other countries, notably Japan. The level of industrial production in the OECD zone is now approaching the highest achieved in the last months of 1973. The level of unemployment which had reached some 5.5 per cent of the active population towards the end of 1975 has now fallen to about 5 per cent of the active population, a fall which essentially reflects the improved situation of the USA. In Japan and in Europe part-time working has clearly receded, but the number of unemployed remains high.”

Once again these optimistic predictions would be contradicted by reality only a month later:

The deviation already observed in May and June is now being transformed into a slowing-down and we could even see a sudden drop in economic activity. The rates of industrial growth for France and Germany are falling far more than could have been predicted some months ago; 5 per cent growth per annum is small for a growth economy which should normally be around 7 or 8 per cent. In Italy, where the recovery is most recent, the rate of growth is also falling, although it still remains quite high (18 per cent). Let’s not discuss Great Britain where the ending of the recovery followed on almost immediately after the first serious effort to get the economy moving.”

As for the two big economic giants, the USA and Japan, they too have experienced the same process of declining growth since the third quarter of 1976 - although less marked because of their economic strengths.

In Japan the recession hit later but was devastating: the rate of growth has fallen from almost 30% in April to no more than 9% in June-July to hardly 2% in November. Only the rate of industrial growth in the USA shows a different pattern, less abrupt and more reassuring: after a pinnacle of 18% in September-October 1975 the growth rate fell to 6% in the beginning of 1976, to stabilize at 7% in June-July.” (Le Monde, 5 October 1976)

As for the fall in unemployment, presented as the great victory of the ‘recovery’, this was essentially due to the fact that the USA added 1.8 million to its labour force from the beginning of 1976.1 In Europe, on the contrary, not only has the number of unemployed remained exactly the same in France, Italy and even West Germany, but in Great Britain the number has grown to the record figure of 6.4 per cent of the active population.

It is this extremely ‘moderate’ nature of the ‘recovcry’ which explains the fall-back in the inflation of wholesale prices and raw material prices (but not retail prices which always rise): thus, as in 1975, a movement started from July-August to lower metal prices in order to counteract the falling sales in metals, particularly from Japan. The fall-back in inflation, which the economists of capital have taken to be a sign of 'recovery', actually expresses a relapse into the crisis.


Unlike the ‘recoveries’ following the recessions of 1967-8 and 1971 the 'recovery' in the first quarter of 1976 was of a sectoral and non-generalized nature. The boost to production was far from being the result of a rise in investment in fixed capital (as had been the case with the preceding ‘recoveries’ through a policy of hyper-inflation); this ‘recovery’ was above all the result of purchases in durable goods (cars, electrical gadgets, etc) in addition to public service expenditure (social security, public works, housing etc). In fact the ‘recovery’ was quite simply a matter of 'depreciation’ costs (wear and tear of durable goods and public facilities). As the OECD asserted on the subject in France:

Demand emanating from the public sector and private consumption were the motive force behind this recovery. Later they were replaced by foreign demand and a new restocking cycle. The extremely brisk increase in demand for household goods was stimulated by last autumn's reflationary measures and essentially meant a catching-up on the purchase of durable goods which had been deferred since 1974.”

Today, whatever Professor Duhring's descendants in the shape of the left and leftists may claim to the contrary, the idea that consumption can be a boost to production is more than ever an utter lie. This is so not only because the very survival of capital implies a more rapid growth in Sector I (production goods) than in Sector II (consumption goods), but also because growth in Sector I implies the necessary relative or absolute decline in Sector II, this being the contradiction which lies at the very heart of the capitalist system. In fact there can only ever be a rise in oonsumption when it is based on a massive and lasting growth in production which corresponds to the existence of solvent markets. And today the crises of decadent capitalism are accompanied not only by a relative decline in consumption but also by an absolute decline. Today when millions of workers are being thrown out of production and the mass of the proletariat is subject to an ever-increasing decline in its wages, both nominal and real, this analysis is proved more than ever to be correct.

This is why the apparent demand for consumer goods was really an attempt to keep ahead of the wear and tear on consumer goods necessary for the upkeep of the labour force.

Moreover, we can observe the complete inability of capitalism to maintain any level of consumption,except for a more and more restricted sector of the population, in the fact that this so-called policy of 'stimulation' of the economy has not only not stopped the decline in production for all capitalist countries, but has been accompanied by a real worsening in inflation through a policy of growing debts and budgetary deficits. Thus the increase in the volume of trade in the first quarter of 1976 has brought with it a speed-up in the current deficits of the OECD which have risen from 6 billion dollars in 1975 to some 20 billion dollars (annual rate) during the first quarter of 1976.

Faced with the growing pessimism of the bourgeoisie, governments have implemented all kinds of measures to encourage investments in production: from tax credits to subsidies for investments, to a quicker redemption of debts. Thus at the end of 1975 the French government granted fiscal reductions to companies on 10 percent of the value of orders for capital goods carried out between 1 May 1975 and 7 January 1976. When governments are in a state of semi-bankruptcy financially they make urgent appeals for foreign loans: a loan of 1 billion dollars to Italy from the OECD and also to Great Britain and Portugal where the central banks have been propping up these flagging economies. But, as The Economist recently noted: "The bankers are worried now about the fate of these loans, but they have allowed trade to continue." (our emphasis) It could not have been stated clearer: survival by credit, or the sudden death of the system!2

Through this growth in budgetary deficits and foreign debts we see the ever-increasing role of state intervention in the economy. This is the real motive force behind the 'boom' when a real boom in markets is missing, for markets have continued to stagnate and even to decrease (the share in the world market of the seven largest OECD countries further declined in 1976, the only exceptions to this tendency being West Germany and Japan). Faced with this state of affairs governments have implemented a system to encourage exports by subsidies and lessening taxes on profits. This policy has encouraged exporting countries like West Germany and Japan to significantly increase their share of exports in world trade.


One of the most convincing indications of the permanent character of the general crisis of the system since 1967 is that the length of the phases of 'recovery' have become shorter. The crisis of 1967-8 was followed by a two-year 'recovery'; the 'recovery' in 1971 only lasted a year and a half.
The 1976 'recovery' lasted scarcely more than six months. On the other hand the phases of recession have lengthened: one year in 1967 and 1971 and almost two years in 1974-5. Thus the phases of 'recovery' become shorter and shorter to the point that they become non-existent, while the phases of recession become longer and longer, tending to become permanent.

We can thus clearly see the futility of 'marxist' explanations (like the one in Programme Communiste, no.67) which describe cycles of growth and recession in capitalist decadence. These cycles had a real existence in the nineteenth century when recessions opened up the way to an enlarged expansion onto the world market. But they can have no real existence when capitalism is in decline.

While capitalism was still an ascendant mode of production and was still developing its modern form of industrial capital, the development of economic cycles was a manifestation of the organic growth of the system. The cycles of expansion and recession were therefore expressing in a material way the contradictory development of a system coming up against the limitations of national markets when its mode of existence was already set within a global framework. Capital was not yet limited by the completion of the conquest of the world market and experienced crises which essentially were ones
of adaptation, when the growth in production tended to be more rapid than that of the market, or when the incessant technical revolution imposed an ever more rapid transferring of capital to new branches of production. The crises therefore acted as spurs
to new and greater cycles of production on the level of the world market. The reason for these periodic phases of recession and stagnation, as regular as the tides and generally short, came to lay less and less in the burden of agricultural or climatic conditions (for example the crisis of 1847) as in the temporary weakness of that universal aspect in the world-wide growth of production: capital in its money or credit form. The long phases of depression (long in relative terms) such as the one from 1873-96 found their origins in the appearance of more modern capitals (Germany and the USA) who started to compete with the old capitalist countries (Great Britain, France) and were therefore of a more local than international nature. It was then a question of different levels of development in the general period of international expansion of the system. As for the crises which burst out at the peak of these cycles, they became less and less frequent but more severe (1873) in relation to the colossal expansion of the system itself.

What were natural cycles in the life of a developing system are today nothing but convulsions, spasms of a declining system which occur with greater frequency and with shorter and shorter intervals in between. Only the mechanisms applied by the bourgeoisie since 1929 have to some extent attenuated the violent growth of these convulsions - although these mechanisms are becoming weaker and weaker like a brake will with overuse. To imagine in spite of all this that the bourgeoisie is able to launch 'recoveries' and booms at will before falling once more into a new crisis, is to believe that the bourgeoisie is able to overcome its mortal contradictions indefinitely:

"The global cycle we have observed from 1971 to 1975 has an average duration of four to five years ….. Within this hypothesis the slow recovery in the beginning must speed up towards 1977 because of the simultaneity of forces at play in the economic cycle and the interdependence of economies; this recovery would have to be as vigorous as the fall was deep and should take place towards 1978 with a new productive boom." (Programme Communiste, no. 67)

The transparency of the 'recovery' in today's crisis and the bankruptcy into which the whole of Europe is slowly sinking in the wake of the Third World countries, will soon sweep away such pseudo-dialectical mumbo-jumbo about the 'natural' cycles of capitalism in decadence.3


Recessions in the period of reconstruction during the fifties were of a purely conjunctural origin (due to the inequality of reconstruction according to country, the weight of colonial wars etc) which is also why the recovery was general and continued on such a regular and strong path.

Since 1967, the beginning of the phase of the general crisis of capitalism, the very opposite has taken place. Recession has become the rule and recovery the exception.In general, the 'recovery' on a world scale has only affected the most powerful economies, essentially the dominant imperialisms who can throw off the effects of the crisis onto their zone of influence, like the USA and Russia who temporarily benefited from the 'recovery' by strengthening their hold over their own bloc. In reality only three countries experienced a real recovery in production and foreign trade: the USA, West Germany and above all Japan. The famous 'recovery' in fact saw the fall of the three larger capitalist powers: Italy, Great Britain and France.

At the end of the day, only the USA with its greater economic strength has been able to withstand the increasing competition posed by West Germany and Japan. It has achieved this by floating the dollar and taking a series of protectionist measures, while at the same time exerting political pressure on its allies. The weakness of Japan and West Germany, whose production depends on keeping up and even increasing exports, is clear to see; and in the USA industrial production has already declined in the third quarter of 1976 and unemployment has reappeared. Thus we can see that movements of 'recovery' that were both local and international in 1969-70 and 1972-3 have now become unequal and purely local. We can also say that as these periods of 'recovery' become purely local expressions and then increasimgly appear in only two or three nation, they also take on a negative character: the 'recovery' in production is simply a relative slowing down in the fall in production as compared to the previous period of 'recession'. At the same time the precondition for this local 'recovery' is the acceleration in the decomposition of the
weakest competing economies. And within this general decomposition, what the bourgeoisie calls 'recovery' is no more than a greater capacity to put a brake on the free fall of the economy on the part of the economically strongest countries, and no longer corresponds to a rise in industrial production and world trade. In this new mortal crisis of world capitalism there can no longer be an alternation of economic cycles as in the ascendant phase: there is only one cycle, that of the permanent crisis which leads either to war or revolution.

Let us examine in more detail some of the measures which capital has tried to take in both the national and international spheres in order to halt the rapid decomposition of the economy.


Export More

From the East to the West it is heralded as the miracle solution. This is the solution which presents itself particularly to the weaker capitals on account of their own second-rate home market. For example, in Poland, exports were increased by 30 percent in 1975 acting as the key to the maintenance of the GNP. For all the Eastern bloc countries exports to the OECD zone have increased from 22 per cent to 30 per cent in 1975. The same thing applies to Italy and Great Britain where successive devaluations allowed them to increase the volume and value of their exports.

Despite the massive aid pumped into exporting companies by the different countries a much smaller number of countries have enjoyed the few months of 'recovery' than in 1972; Essentially these were countrles where the productivity of labour has been noticeably raised or was maintained at a former level, while the real wages of the workers have diminished. This is particularly true in the three major powers in world trade: Japan, West Germany and the USA. This can be proved by looking at the development of unit-costs of manpower in manufacturing industries:






Germany (all industry)




















Figures from the OECD Economic Perspectives, 1976

It is thanks to its greater competivity that Japanese capital has been able to improve its position to the detriment of the USA by becoming the main exporter of steel and by solidly implanting itself in Latin America and Europe in the automobile and electronic fields. To a lesser extent it has done this in the USA and West Germany as well. However, the fact that Japan's hold over such crucial capital exports is at the expense of other capitals, means that the latter can less and less be used as outlet for Japan's goods, so that overall there is in fact a decrease in markets.

The first contradiction of this 'solution' for capital can be observed in the current massive export of capital. Foreign investment has increased to a previously unknown proportion; for example, West Germany and Japan have increased theirs seven times since 1967. What people refer to as the 'multinationals' having increasing investments outside their country of origin really expresses the need of capital to reduce its costs of production by lessening the share of variable capital included in the price of a commodity. The places for investment can only be those where the average cost of labour is below the average in developed countries and where the production of commodities is necessarily a simple process. The installation of production units discharging commodities onto a world market at lower prices can only reinforce the very competition it is trying to overcome: according to the Far Eastern Review (15.10.76) the implantation of Japanese electronic factories in Singapore and South Korea brought with it an increased competition on the Japanese home market for cameras and transistor radios. The same thing has happened in the largest capitalist power, the USA. Because of the lowering costs of labour power in the USA over the last three years4 European and Japanese multinationals have already taken one quarter of American exports with investments costs at half those in 1970. (Mentioned in Neue Zurcher Zeitung. 29 June 1976.)

This pursuit of lower investment costs on the world market is accompanied by a fall in investment in the larger industrial countries.

This brings us to the second contradiction, (a corollary to the first) which increasingly affects the industrialized countries, and that is the need to continue investing productively in their own national capital in order to maintain the minimum of modernization in machinery, a prerequisite for the maintenance of competivity in export commodities. But budgetary restrictions and a massive reduction in profits for capital bring with them a growing reduction in productive investments and technical research in proportion to decreasing markets:

"The weak inclination to invest, apparent in the USA for some years, has now resulted in the phenomenon of a much more rapid ageing in machinery than in Japan or West Germany. While in West Germany in 1975 less than 50 per cent of industrial machinery was eleven years old or more, in the USA the proportion was 85 per cent; in the most important sectors such as steel, paper and cars, there is no longer any trace of innovation." (Der Spiegel, 29 March 1976)

What is already true for the USA (and even more so for Britain) can only be repeated on a larger scale in the weaker countries. Countries like Russia or Poland which, in spite of their accumulation problems, or rather because of them, attempt to modernize their productive apparatus with investments obtained through systematic overseas borrowing, can in the long run only burden their commodities with the heavy weight of these foreign debts. Without a foothold in the world market they will only accelerate their bankruptcy and also the bankruptcy of the lending countries who will be unable to recover their loans.

This is why the only possihle investments for the capitalists are those that they cynically call 'rationalizations'. Further on we will look at how these 'rationnlizations' really mean more unemployment and increasing exploitation for the working class.

Thus, what the bourgeoisie is pleased to call the 'scarcity of capital' really only expresses the growing powerlessness of capital, both East and West, to find new outlets for its commodities. To develop the productive apparatus in order to realize an ever shrinking volume of capital becomes increasingly absurd even within the framework of this system. Today only the most developed capitals are able in any way to break the fall in their investments and keep production at previous levels; and this can only be at the expense of destroying weaker capitals, which leads to a further contraction of solvent markets.

The Return of Protectionist Measures

The end of the Irecoveryl once more puts on the agenda the time-honoured recipes of the bourgeoisie in crisis. Because of the generalized bankruptcy expressed in the negative balance of payments of the Eastern countries, Third World countries and the OECD countries (apart from West Germany and Japan for the time being), each country is trying to protect its own home market from competition by restricting import commodities.

Over recent months the free circulation of products within the EEC was a reality. However, France recently decided to put a price freeze on importers' goods until 31 December in order to fight against German competition. Since last spring, Italy has put a 50 percent surcharge on imports. In order to fight against Japanese competition Great Britain started talking about imposing supplementary quotas. In general, all the anti-inflation plans adopted in Europe over the last few months will have the effect of restraining foreign trade. The EEC believes that trade within the community will decrease in value from 13 percent to 10 percent in a year.

In the Eastern bloc countries the same tendency is apparent. In Hungary, for example, the five-year plan predicted a decline in imports as much from within COMECON as from the OECD, the figures given being respectively: from 9.9% a year to 6.5% and from 8.3% to 6.5% (Courrier des Pays de l'Est, May 1976).

In the USA, that haven of 'free trade', the government decided in June to impose quotas on steel imports (specialized steel and stainless steel). This recent imposition of quotas in steel imports reveals the same tendency to return to a sort of autarky as did the numerous inquiries into Japanese dumping of televisions, cars and shoes.

Nevertheless, such extreme measures can only be taken within very well-defined limits owing to:

– the greater international division of labour and interpenetration or rather inter-dependence of the largest capitals than in the past;

– the strengthening of blocs which demands a minimum level of economic stability. The bankruptcy of a given country under the blows of too-vicious protectionist measures can only lead to the bankruptcy of other economies in a chain reaction;

– the lessons which the bourgeoisie has learnt following the 1929 crisis about the catastrophic effect of a brutal return to autarky by national capitals;

the development of the class struggle since 1968, which imposes a certain prudence on the bourgeoisie about limiting essential consumer imports (for example, the lesson which the Polish bourgeoisie learnt from the workers' riots in 1970).

In the coming period, therefore, we can predict that we will see protectionist measures being accompanied by hagglings over export quotas and 'mutual compensations'.5 However, the gradual limitations on trade can only postpone the inevitable crash of the world economy, and ensure that it will take place on a much more extensive scale. At the same time, the massive 'aid' granted to the weaker economies by the central banks, by unleashing new waves of hyper-inflation, risks unleashing at some time or other a generalized financial bankruptcy; this is because the permanence of the crisis will produce movements of more and more uncontrollable panic within the bourgeoisie.

State Capitalism and Austerity Measures

All the measures to 'boost' the economy taken by the different national states demonstrate the growing importance of the statels role in favorizing exports and restricting imports on the home market and expresses the tendency for the whole economy to be taken over by the state apparatus, the ultimate crutch of this declining system.

The tendency towards state capitalism, which has resulted in total control of the economy in the Eastern bloc and most Third World countries (eg Peru, Algeria, China etc) also exists in all countries where capitalism is in a state of debilitation and endemic stagnatlon; and recently the tendency has considerably increased in countries where the economy is in an adverse position vis-a-vis the world market. The coming to power of the left in Europe, in order to take the nationalization measures necessary to obtain a centralized control over the economy, will appear more and more inevitable in the months to come. The repeated cropping up of 'scandals' in all the Western countries could perhaps be interpreted as signs of the increasingly intense pressures being exerted by a growing faction of the bourgeoisie on the most backward or developed sectors of capital, in order to get them to submit to the necessity for an increasingly energetic state control of the most important capitalist firms.

Where capital has traditionally been the most powerful (Japan and the USA) this tendency to state capitalism is essentially expressed by an increasingly rapid rate of capital concentration, encouraged for the most part by means of a variety of state 'aids', Just between January and April 1976 the number of fusions rose to 264, 40 percent more than during the same period in 1975. What's more, in the USA there is a growing faction of the capitalist class which has no hesitation in envisaging a planned economy as a very real possibility. In April 1976, the President of the Ways and Means Commission of the House of Representatives had to announce that:

"The expression 'planned economy' is considered in some circles to be like a red flag used against private enterprise and evokes the image of soviet commissars; it would be absurd for a government to plan the complex system of supply and demand down to the very last detail, but it would be even more absurd to claim that the government has no responsibility about having some foresight and taking intelligent measures in order to avoid dangers or even disaster." (Cited by Hiscox in 'Analysis of the Crisis in the USA', Critique of Political Economy, nos.24-25.)

But even in the state capitalist countries this tendency is accelerated by putting into operation plans (like the ones in Russia) which envisage the liquidation of the small peasant property-holder and the reorganization of land into agrico-industrial complexes. This is now a necessity after the recent succession of agricultural disasters. Thus the Central Committee of the Soviet Communist Party issued a decree on 2 June 1976 concerning the "development of specialization and agricultural concentration on the basis of inter-company co-operation and agrico-industrial integration." Such statements quite clearly point out their main preoccupations, (quoted from Courrier des Pays de l'Est, July-August 1976). In addition there has been over the last few years a particularly accelerated fusion of capital by horizontal and vertical concentrations: these measures have made the fusion of capital with the state more direct, and in 1976 have led to the development of industrial units regrouping formerly autonomous companies (their number has now reached 2300 according to Kosygin's speech at the Twenty Fifth Congress of the Russian CP).

These measures to 'rationalize' the economy in face of the crisis are accompanied by unprecedented austerity measures which tend towards 'cheapening' accumulation for a state severely paralyzed by budgetary deficits of dizzying proportions. In 1975, as a result of the 'stimulation' measures following the recession, the budgetary deficits reached unprecedented heights: 70 billion dollars for the USA; 35 billion for West Germany; 10 billion dollars for Japan, etc.

With the end of the 'recovery' the OECD warned and advised its members to reduce their budgetary deficits; according to the OECD they should be reduced from 1977 onwards. These reductions would come primarily from cuts in 'services' (social security in particular, whose costs have risen everywhere) which constitute a part of workers' wages. In New York the 'rationalization' measures in municipal services balanced the books by getting rid of 36,000 jobs, while other big cities decided on massive lay-offs, increased taxes, and a draconian reduction in social aid. Similarly, from France to Italy and Poland the governments have taken measures to freeze wages and introduce tax increases; and in Poland the government decided, as a matter of course, to levy some part of savings bank deposits in order to subsidize house-building.


In recent years we have seen a considerable growth in the rate of exploitation of the proletariat through a vicious increase in productivity for those workers still employed. This increase in the rate of exploitation through the extraction of relative surplus value is supplemented by absolute exploitation through enforced overtime.

The relative pauperization of the proletariat which is a permanent feature of the capitalist system, is now joined by the growth of absolute pauperization. In the past this was denied by the reformists when the cyclical crises crashed down on the vast majority of the proletariat, and today it is denied by the left of capital when the crisis has become permanent and has ended up affecting the entire class. Limited during the period of reconstruction to Third World and East European countrics, the tendency towards pauperization is now affecting the immense majority of the world proletariat through:

the constant unemployment which now affects 20 million workers in the OECD countries and at least 20 percent of the active population in Third World countries; in East European countries where it is not officially recognized, it is often hidden by the existence of labour camps, (according to Contemporary Poland, September 1971, there were 600,000 unemployed before the 1970 events). More and more this immense mass of unemployed is being pushed towards the threshold of physical poverty as governments cut down their already paltry benefits to the unemployed. While this threshold of physical poverty varies quantitatively according to each country (depending on the historic rates of pay of the different working classes), qualitatively speaking (as the OECD inquiries into 'poverty' have demonstrated) the whole capitalist world is moving towards the poverty-line,and in some cases has already crossed over it.6

the cutting of real wages, which is expressed both by the cutting of benefits (family allowances, social security etc) and by the decrease of buying power which is being attacked with increasing severity by galloping inflation. The official statistics from the Department of Trade reveal that the average real wage of wage-earners has fallen by more than 10 percent between 1972 and 1975, even in the USA. Judging from the official statistics from Ministries of Labour and employers, it seems that in one year from 1974-5 real wages fell on average more than 6 percent in France, Japan and Great Britain. This fall can be more or less sharp in the different countries affected by the crisis depending on how fiercely the workers resist the massive attacks of capital; in Poland, for example, the workers had just peen subjected to massive reductions in their real wages when the insurrection of 1970 forced the Polish government to become massively indebted to the USA and Russia in order to dampen the powder-keg of class struggle with a nominal 40 percent raise in wages to be spread over five years (Le Monde Diplomatique, October 1976). This to a large extent explains the bankruptcy of Polish capital, which sees today that 'to produce more' means to 'consume less'.

The living conditions of the working class were only made worse by the 'recovery', which was accompanied by wage freezes and an inflation which became more violent when 'boom' techniques were set in motion. The complete lie of a 'recovery' is exposed by this more than anything else.

The return of absolute pauperization, believed to be definitively banished from 'industrial societies', confirms the analysis Rosa Luxemburg made almost seventy years ago:

The lowest, most reprobate and miserable layers which are rarely or never employed are not the rubbish which the bourgeoisie describes as the 'good for nothings' of 'official society'; these layers are intimately linked to the best placed upper layers of industrial workers down through all the intermediary members of
the reserve army. The existence of the lowest layers of the proletariat is determined by the same laws of capitalist production that swell or reduce its numbers; and so the proletariat forms an organic whole, a social class whose degrees of misery and oppression allow it to grasp the capitalist law of wages in its totality, and that includes farm labourers and the reserve army of unemployed with all its different strata, from the highest to the lowest.” (Rosa Luxemburg,
Introduction to Political Economy) (our translation)

Thus the pauperization of the class does not mean its defeat or atomization; absolute pauperization far from expressing the organic decomposition of the exploited class, as was the case in the periods of decline in the slave and feudal systems, is the organic affirmation of a whole class, an historic class forced to affirm itself through revolution, or to disappear through the war that will signify the general destruction of humanity.


In the report brought out after the meeting of the principal OECD members in June 1976, the world bourgeoisie imagined 'scenarios' of growth (the bourgeoisie no longer speaks of forecasts, given the growing bankruptcy of state capitalism). It considers:

that growth until 1980 must be moderate (not more than 5 per cent per annum) in order to avoid a new wave of inflation which could make the international monetary and financial system sink into bankruptcy after too strong a 'recovery'. Thus the bourgeoisie, which once developed the productive forces in a historically progressive manner, and puffed itself up with the pride of a conquering class, today acknowledges that the condition for its survival now rests upon "containing the risks of an excessive growth in profitslt and avoiding “the risk involved in an under-estimation of the strength of expansionist forces", (OECD, June 1976);

that “growth between 1975 and 1980 can only happen if wage rises are prevented from reaching a level which would compromise productivity and discourage investment.” Said another way, the slowing-down in decline now depends on whether the bourgeoisie can limit the class struggle. The bourgeoisie is beginning to understand that the survival of its system now lies in the hands of the proletarian class.

Nevertheless, today's crisis is still developing slowly. Unlike in 1929 the crash in the economy doesn't spread from the most powerful nations to the weakest (from the USA to Germany from 1929 to 1932) but rather from the least developed centres (Italy, Great Britain and France) to the heartlands of capitalism (USA, Japan, Russia) because of a slow process whereby the fall of the weak economies is momentarily accompanied by the relative strengthening of their strongest rivals. In view of the gradual disappearance of the phases of 'recovery' and the support world capital has given to its bankrupt partners by an increasing resort to fictitious capital, the bourgeoisie has to resist the temptations to panic which are more and more appearing in its midst (despite all the international organs which it has set up since 1945 to assure some kind of cohesion among the various national capitals). Otherwise the threat of generalized bankruptcy will present itself to a terrified bourgeoisie.

These then are the two factors - class struggle and the growing panic of the bourgeoisie - which together determine the survival of the system.

The State and the Dictatorship of the Proletariat

Presentation on the Period of Transition

In the ICC Platform adopted at the First Congress of the ICC in January 1976, the question of the relationship between the proletariat and the state in the period of transition remained “open”:

The experience of the Russian Revolution has shown the complexity and seriousness of the problem of the relationship between the class and the state in the period of transition. In the coming period, the proletariat and revolutionaries cannot evade this problem, but must make every effort to resolve it." (The Platform of the ICC, “The Dictatorship of the Proletariat” (Point 15), in International Review no.5.)

It is in the context of this effort that the Second Congress of Revolution Internationale has approached the question and tried to formulate a resolution which sums up the point reached by the discussion so far.

But the question which has been raised is of a programmatic character. Since the ICC Platform is the only programmatic basis for all sections of the Current, it goes without saying that only the general Congress of the ICC has the competence to decide about any possible changes in the Platform.

Thus by taking up a position on the resolution on the period of transition, the Second Congress of RI will not be altering the programmatic basis of RI; just like any other section of the ICC, RI does not have a distinct programmatic basis from the Current as a whole.


Before going into the complex problems of the period of transition, it would be useful to distinguish three main areas of discussion:

The general specificities which characterize the period of transition from capitalism to communism and which distinguish it from other historical periods of transition.

The relationship between the revolutionary class and the rest of society during the period of transition; in other words the problem of what is meant by the "dictatorship of the proletariat" and, consequently, what must be the relationship between the revolutionary class and the state during the transition period.

Questions about all the concrete 'economic' measures for the transformation of social production.

Revolutionaries must try to give an answer to all those problems. However, ever since Marx and Engels first laid down the bases of 'scientific materialism', revolutionaries have been aware that they must be conscious of the tremendous limitations imposed by the very limitations of proletarian experience in this area. Otherwise they risk losing themselves in the kind of speculations which Marx dismissed contemptuously as "recipes for the dishes of the future". The extent of these limitations was underlined by Marx in 1875 in his Critique of the Gotha Programme:

" … what transformation will the nature of the state undergo in communist society? In other words, what social functions will remain in existence there that are analogous to present functions of the state? This question can only be answered scientifically, and one does not get a flea-hop nearer to the problem by a thousandfold combination of the word people with the word state."

This same awareness was expressed by Rosa Luxemburg in 1918 in her pamphlet on the Russian Revolution:

"Far from being a sum of ready-made prescriptions which only have to be applied, the practical realization of socialism as an economic, social, and juridical system is something which lies completely hidden in the mists of the future. What we possess in our programme is nothing but a few signposts which indicate the general direction in which to look for the necessary measures, and the indications are mainly negative in character at that … (socialism) has as its prerequisite a number of measures of force against property etc. The negative, the tearing down, can be decreed; the building up, the positive, cannot. New territory. A thousand problems. Only experience is capable of correcting and opening new ways." (The Russian Revolution)

Beyond these general limitations, the resolution is bound by the objectives it sets for itself. It does not claim to make a synthesis of everything that has been clarified by revolutionaries on the period of transition. In particular the resolution does not go into the question of the economic measures for the transformation of social production. On the one hand, it includes the positions which were acquired by the workers' movement before the experience of the Russian Revolution and which have shown themselves to be genuine class frontiers; on the other hand it includes a number of positions concerning the relationshlp between the dictatorship of the proletariat and the state in the period of transition. These positions have been derived mainly from the Russian Revolution, and although they are not in themselves class frontiers, they are lessons sufficiently developed by historical experience to be an integral part of the programmatic basis of a revolutionary organization.

These fundamental class frontiers are: the inevitability of a transition period; the primacy of the proletariat's political activity as the precondition and guarantee of the transition towards a classless society; the world-wide character of this transformation; the specificity of the power of the working class, in particular the fact that the proletariat, in contrast to other revolutionary classes in history, has no economic basis within the old society, and therefore does not fight for political domination in order to consolidate itself as an economically ruling class, but in order to put an end to all economic domination by abolishing classes themselves; the impossibility of the proletariat using the bourgeois state apparatus and the necessity for its destruction as a precondition for the establishment of proletarian political power; the inevitability of a state during the period of transition, even though this state will be profoundly different from all other states in history.

These positions already represent a categorical rejection of all the social democratic, anarchist, self-management, and modernist conceptions which have always been present in the workers' movement but which are today pillars of the counter-revolution.

On the basis of these fundamental class positions the resolution goes on to define, primarily from the experiences of the Russian Revolution, certain aspects of the relationship between the proletariat and the
state during the transition period. Thus we have an understanding of the inevitably conservative nature of the transitional state; the impossibility of the proletariat or its party identifying themselves with this state; the necessity for the working class to conceive of its relationship to this state (in which it participates as a politically ruling class) as being a relationship of force: "domination over society is thus its domination over the state"; the necessity for the existence and armed strength of the working class's own specific organizations: only the working class is organized as a class in this period and the state can have no coercive power over the proletariat's own organizations.

These positions enable us to reject the mystifications which served as a basis for "the counter-revolution which developed in Russia under the direction of a degenerating Bolshevik Party" and which are defended today by all the Stalinist and Trotskyist currents as a theoretical justification for identifying state capitalism with socialism.

The content of this resolution thus represents a real safeguard against all the erroneous conceptions which the proletariat could encounter in its coming world-wide assault on the capitalist system. However, no matter how important these positions might be for the future struggles of the class, we must understand the real limits of this acquisition today.

The historic experiences which gave rise to these positions dealing with the relationship between class and state in the transition period are still much too rare and specific for the conclusions that can be drawn from them to be considered class lines by revolutionaries today. Class lines are positions which establish a clear point of demarcation between the bourgeois camp and the proletarian camp. They cannot be drawn up by revolutionaries on the basis of insufficient historical experience or in anticipation of the future; they can only arise on the empirical basis provided by the very history of proletarian struggle, which must be sufficiently clear to supply us with lessons that are'beyond discussion'.7

It is therefore necessary to underline how very limited are the points which we can consider as definite gains on this question: the rejection of the identification of the proletariat or its party with the transitional state; the definition of the relationship between the dictatorship of the proletariat and the state as being one of the dictatorship of the class over the state, and never the state over the class; the defence of the autonomy of the proletariat's own organizations in relation to the state, as being the precondition for the real autonomy and strength of the proletarian dictatorship.

These points are still inevitably abstract and general. They are simply "a few main signposts which indicate the general direction in which to look for the necessary measures, and the indications are mainly negative in character at that." The precise forms in which they will be put into practice inevitably remain a "new territory" which only experience will allow us to open up.

A precondition for the effectiveness of a revolutionary organization is not only understanding what it knows and can know, but also what it does not and cannot know. This can only come from its ability to show a real programmatic rigour and to grasp the fundamental lessons provided by the living struggle of the proletarian masses.


The general lack of knowledge about the history of the workers' movement, which has been aggravated by the organic break between the revolutionaries today and the former political organizations of the class, have led some to think that the analysis presented in this resolution is somehow a 'discovery' or an 'originality' of the ICC. A brief summary of the way this question has been tackled (one might even say 'discovered') by revolutionaries since Marx and Engels will soon show how wrong this view is.

In the Communist Manifesto which did not yet make use of the term "dictatorship of the proletariat", the "first step in the revolution of the working class" is defined as raising "the proletariat to the position of ruling class, (winning) the battle of democracy". This conquest refers in fact to the apparatus of the bourgeois state which the proletariat must use in order:

" ... to wrest, by degrees, all capital from the bourgeoisie, to centralize all instruments of production in the hands of the state ie of the proletariat organized as the ruling class; and to increase the total of productive forces as rapidly as possible."

Even if the idea of the ultimate disappearance of the state was already affirmed in The Poverty of Philosophy; even if the idea of the inevitable existence of a state during the “first step of the revolution of the working class” is present in the Manifesto, the actual problem of the relationship between the working class and the state during the period of transition was hardly touched upon.

It was the experience of the Paris Commune which really began to allow the problem to be more fully understood through the lessons that Marx and Engels drew from it: the necessity for the proletariat to destroy the bourgeois state apparatus, the setting up of a completely different apparatus which was "no longer a state in the proper sense of the word" (Engels), since it was no longer an organ for the oppression of the majority by a minority. That this apparatus was still burdened with the weight of the past was clearly underlined by Engels who defined it as a "necessary evil”:

" … an evil inherited by the proletariat after its victorious struggle for class supremacy, whose worse sides the victorious proletariat, just like the Commune, cannot avoid having to lop off at once as much as possible until such time as a generation reared in new, free social conditions is able to throw the entire lumber of the state on the scrap heap." ('Introduction' to The Civil War in France.)

However, despite an intuitive awareness of the necessity for the proletariat to distrust this apparatus inherited from the past (the proletariat, Engels, said "must safeguard itself against its own deputies and officials, by declaring them all, without exception, subject to recall at any moment"), and probably because the extremely short and circumscribed experience of the Paris Commune did not make it possible to really pose the problem of the relationship between the proletariat, the state, and the other non-exploiting classes in society, one of the ideas which came out of the Commune was the identification of the proletarian dictatorship with the transitional state. Thus, three years after the Paris Commune, Marx wrote in his Critique of the Gotha Program:

"Between capitalist and communist society lies the period of the revolutionary transformation of the one into the other. There corresponds to this also a political transition period in which the state can be nothing but the revolutionary dictatorship of the proletariat.”

This was the theoretical basis which Lenin reformulated in the concept of the 'proletarian state' in State and Revolution; and it was on this basis that the Bolsheviks and the Russian proletariat established the dictatorship of the proletariat in 1917.

This attempt at proletarian power confronted the most enormous difficulties - the overwhelming majority of peasants in Russian society, the immediate necessity to wage a pitiless civil war, the international isolation of Russia, the extreme weakness of a productive apparatus destroyed by the First World War and then the civil war. All this was to dramatically highlight the problem of the relationship between the dictatorship of the proletariat and the state.

The grim reality of these events was to prove that it was not enough to baptize the state as 'proletarian' for it to serve the revolutionary interests of the proletariat; that it was not enough to place the proletarian party at the head of the state (to the point where it became totally identified with it) for the state machine to follow the course on which even the most dedicated revolutionaries wanted to set it.

The state apparatus, the state bureaucracy, could not be the expression of proletarian interests alone. As an apparatus whose task was to ensure the survival of society it could only express the survival needs of the moribund Russian economy. What Marxists have said from the very beginning was powerfully vindicated: the imperatives of economic survival imposed themselves mercilessly on the policies of the state. And the economy was a long way from being influenced in any proletarian direction. Lenin had to admit this powerlessness at the Eleventh Congress of the Party, one year after the NEP had begun:

"You communists, you workers, the politically enlightened section of the proletariat, which undertook to administer the state, must be able to arrange it so that the state, which you have taken into your hands, shall function the way you want it to … the state is in our hands: but has it operated the New Economic Policy in the way we wanted in this past year? No! … How did it operate? The machine refused to obey the hand that guided it. It was like a car that was going not in the direction the driver desired, but in the direction someone else desired." (From Lenin and Trotsky, Lenin's Fight Against Stalinism, ed. Russell Block, Pathfinder Press, Inc. New York, 1975, p. 75.)

The identification of the proletarian party with the state did not lead to the state being subordinated to the revolutionary interests of the proletariat, but to the subordination of the party to the Russian state. Under the pressure of the survival needs of the Russian state, which the Bolsheviks saw as the incarnation of the dictatorship of the proletariat, the 'proletarian bastion' that had at all costs to be defended, the Bolshevik Party ended up subordinating the tactics of the Communist International to the interests of Russia (for example, alliances with the big European 'social-chauvinist' parties in an attempt to break the 'cordon sanitaire' which was strangling Russia); it was this pressure which led to the signing of the Rapallo Treaty with German imperialism; and it was to prevent any weakening of the power of the 'proletarian' state apparatus and in the name of this state, that the Kronstadt insurgents were crushed by the Red Army.

As for the working masses, the identification of their party with the state led to their vanguard being cut off from them precisely when they most needed it, while the idea of identifying their power with the power of the state rendered them powerless and confused in the face of the growing oppression of the state bureaucracy.8

The counter-revolution which reduced the dictatorship of the proletariat to ashes had arisen out of the very organ which for decades revolutionaries had thought could be identified with the dictatorship of the proletariat.

The long process of drawing out the lessons of the Russian experience began right from the beginning of the revolution itself.

The first theoretical reactions came in the midst of an unavoidable confusion; they were limited to attacking partial aspects of the problem and unable to grasp the essence of the question in the tumult of a revolution whose signs of degeneration began to appear right from the start. Rosa Luxemburg's pamphlet on the Russian Revolution in 1918, which criticized the identification of the dictatorship of the proletariat with the dictatorship of the party as well as warning against any limitation of working class political life by the state, contained already the germs of a critique of the identification of the proletariat with the transitional state. Rosa Luxemburg, although she still considered this transitional state as a 'proletarian' state, and although she still retained the idea of the "seizure of power by the socialist party", pointed out the only way of "lopping off the worse side" of this "evil", the state:

" … the only effective means in the hands of the proletarian revolution are: radical measures of a polical and social character, the speediest possible transformation of the social guarantees ol the life of the masses – the kindling of revolutionary idealism, which can be maintained over any length of time only through the intensely active life of the masses themselves under conditions of unlimited political freedom." (Rosa Luxemburg, The Russian Revolution)

In Russia and within the Bolshevik Party itself, the development of the state bureaucracy, and thus of the antagonism between the proletariat and the state power, provoked early on various reactions, such as that of Ossinky's group or later on the Workers' Group of Miasnikov. These groups, by questioning the rise of the bureacracy, were already raising, albeit in a confused manner, the question of the nature of the state and its relationship to the class.

But it is probably the polemic between Lenin and Trotsky at the Tenth Congress on the question of the unions that most sharply posed the problem of the state. Against Trotsky's idea of more and more integrating the workers' unions into the state inorder to deal with economic difficulties, Lenin defended the necessity to safeguard the autonomy of the proletariat's organization, so that the workers could defend themselves against "the nefarious abuses of the state bureaucracy". Lenin even went so far as to say that the state was not a "workers' state, but a workers' and peasants' state with numerous bureaucratic deformations". Even though these debates took place in a milieu of a generalized confusion (Lenin considered his differences with Trotsky to be questions of contingency, not principle), they were nevertheless authentic expressions of the proletariat's search for answers to the problem of the relationship between its dictatorship and the state.

The Dutch and German Left continued along the path laid down by Rosa Luxemburg concerning the development of the state bureaucracy in Russia. Having been forced to confront the problem of the degeneration of the international policies of the C.l., they were also led to elaborate a critique of what they called 'state socialism'. However, the work done by Jan Appel in collaboration with the Dutch Left on the Basic Principles of Communist Production and Distribution was mainly concerned with the economic aspects of the transition period. Concerning its political aspects they tended to reaffirm the fundamental ideas of Rosa Luxemburg.

The theoretical basis for a more profound understanding of the problem was posed above all by the work of the Italian Left in Belgium, in particular the articles by Mitchell published from no. 28 of Bilan (March-April 1936). While retaining a 'Leninist' position on the quasi-identity between party and class, Bilan was the first to clearly affirm the pernicious character of any identification between the dictatorship of the proletariat and the state in the period of transition. At the same time Bilan stressed the importance of the class and its party remaining autonomous from the state. Taking up some of Rosa Luxemburg's ideas, Mitchell saw the vitality of the proletariat's own organs as the necessary antidote to the "worst sides" of the state:

"But in the middle of the most terrible contingent difficulties, the Bolsheviks did not consider the Soviet State as 'an evil inherited by the proletariat … whose worst sides the victorious proletariat … cannot avoid having to lop off as much as possible', but as an organism which could be completely identified with the proletarian dictatorship, ie with the Party.

The result of this important modification was that the foundation of the dictatorship of the proletariat was no longer to be the Party, but the state; and through the ensuing reversal of roles the latter found itself in a course of development which led not to the withering away of the state but to the reinforcement of its coercive and repressive powers. Once an instrument of the world revolution, the proletarian state was inevitably converted into a weapon of the global counter-revolution.

Although Marx, Engels, and above all Lenin had again and again emphasized the necessity to counter the state with a proletarian antidote capable of preventing its degeneration, the Russian Revolution, far from assuring the maintenance and vitality of the class organs of the proletariat, sterilized them by incorporating them into the state; and thus the revolution devoured its own substance." (Mitchell, Bilan)

Bilan's analysis still contained hesitations and weaknesses, in particular its analysis of the class nature of the transitional state, which it still characterized as a 'proletarian state'.

These understandable hesitations and inadequacies were transcended in the analysis of Internationalisme in 1946 (see the article 'The Nature of the State and the Proletarian Revolution', republished in RI's Bulletin d'Etude et de Discussion, no.1, January 1973). Basing itself on an objective analysis of the economic and political nature of the period of transition, Internationalisme clearly affirmed the non-proletarian, anti-socialist character of the transitional

The state, insofar as it is reconstituted after the revolution, expresses the immaturity of the conditions for a socialist society. It is the political superstructure of an economic base which is not yet socialist. By its very nature it is opposed to and hostile to socialism. Just as the period of transition is a historically inevitable stage which the proletariat has to go through, so the state is for the proletariat an unavoidable instrument of violence which it must use against the dispossessed classes but with which it cannot identify itself ...

The Russian experience in particular has demonstrated the theoretical falsity of the idea of the workers' state, of the proletarian nature of the state, and of identifying the dictatorship of the proletariat with the utilization by the proletariat of this instrument of coercion, the state." ('Theses on the Nature of the State and the Proletarian Revolution', Internationalisme, no.9, April 1946.)

Internationalisme drew from the experience of the Russian Revolution the vital necessity for the proletariat to exert a strict and permanent control over the state apparatus, which at the slightest reflux would become the principal force of the counter-revolution:

"History and the Russian experience in particular have demonstrated that there is no such thing as a proletarian state as such, but only a state in the hands of the proletariat, a state whose nature remains anti-socialist and which, as soon as the political vigilance of the proletariat weakens, will become the stronghold, the rallying point and the expression of the dispossessed classes of a reborn capitalism." (Ibid)

Still impregnated with certain conceptions held by the Italian Left from which Internationalisme had evolved, especially on the question of the party and of the trade unions, but clearly aware that the subject of the revolution was the working class, Internationalisme defended the necessity for total political freedom for the class and its class-wide organs (which it still thought could take the form of 'unions') in relation to the state. In particular Internationalisme condemned any use of violence by the state against the class. It was also the first to develop a real understanding of the link between economic and political problems during the transition period:

"This period of transition between capitalism and socialism under the political dictatorship of the proletariat expresses itself on the economic terrain in an energetic policy which aims to diminish class exploitation, to constantly increase the proletariat's share in the national income, to alter the relationship between variable capital and constant capital in favour of the former. This policy cannot be based simply on the programmatic declaration of the party; still less is it the prerogative of the state, the organ of coercion and administration. This policy can only find a guarantee and a real expression in the class itself, through the pressure which the class exerts over society, through its opposition to and struggle against all other classes ...

Any tendency to reduce the role of the trade unions after the revolution; any pretence that the existence of a 'workers' state' means the end of freedom to engage in union activities or strikes; any advocacy of fusing the unions with the state, through the theory of handing economic administration over to the unions, which seems revolutionary but which in fact leads to an incorporation of the unions into the state machine; any position which, however revolutionary its intentions, calls for violence within the proletariat and its organizations; any attempt to stand in the way of the broadest workers' democracy and the free play of political struggle and of fractions within the unions: any such policies are anti-working class. They falsify the relationship between party and class and weaken the proletariat's position during the transition period.

The duty of communists will be to energetically denounce and fight against all these tendencies and to work for the full development and independence of the trade union movement, which is an indispensable condition for the victory of socialism." (Ibid)

It was the achievement of Internationalisme to have provided the general theoretical framework in which the question of the relationship between the dictatorship of the proletariat and the state in the period of transition could finally be posed in a solid and coherent manner.

Situated firmly within this process, the resolution presented to the Congress is to be seen as an attempt to reappropriate the principal gains of the workers' movement on this question and as an effort to continue the unending work of deepening the programmatic basis of the proletariat's revolutionary struggle.

We can see that this resolution is in no way a 'discovery' of the ICC. But we must also understand the weight of responsibility which the revolutionary organization is taking on its shoulders by attempting to assume this inheritance.

Contribution from the 2nd Congress of RI

1. Between capitalism and socialism there inevitably exists a more or less long period of transition from one to the other. It is transitional in the sense that it does not have its own stable mode of production. Its specific characteristic is the systematic and uninterrupted transformation of the relations of production. By means of political and economic measures it undermines the basis of the old system and lays the basis for new social relations, for communism.

2. Communism is a society without classes. The period of transition, which can only really develop after the victory of the revolution on a world scale, is a dynamic period which tends towards the disappearance of classes, but it still suffers from class divisions and the persistence of divergent and antagonistic interests in society.

3. In contrast to previous periods of transition in history, all of which unfolded within the old society and culminated in revolution, the period of transition from capitalism to communism can only begin after the destruction of the political domination of capitalism, and in the first instance of the capitalist state. The general political seizure of power over society by the proletariat, the dictatorship of the proletariat, precedes, conditions, and guarantees the process of economic and social transformation.

4. In contrast to the bourgeois revolutions which took place within the framework of the region or nation, socialism can only be realized on a world scale. The extension of the revolution and of the civil war is thus the primordial act which conditions the possibilities for and the rhythm of the social-economic transformation in the country or countries where the proletariat has already taken political power.

5. A product of the division of society into classes, the dictatorship of the proletariat is distinguished from the power of previous ruling classes by the following essential characteristics:

a. Not being an economically dominant class, the working class does not exert power in order to defend any economic privileges (it does not and can never have any) but in order to destroy all privileges.

b. For this reason, unlike other ruling classes, it has no need to hide its goals, to mystify the oppressed classes by presenting its dictatorship as the reign of Liberty, Equality and Fraternity.

c. This dictatorship does not have the aim of perpetuating the existing state of affairs, but on the contrary of revolutionizing the social fabric so as to ensure the advent of a genuinely human society without exploitation or oppression.

6. In all class societies, in order to prevent the class antagonisms of society from exploding into permanent struggles which threaten its entire equilibrium, endangering the very existence of that society, superstructures and institutions have emerged of which the state is the highest expression, whose essential function is to maintain these struggles within an acceptable framework, to adapt themselves to and conserve the existing economic infrastructure.

7. The period of transition to socialism is as we have seen a society still divided into classes. This is the reason why there will inevitably arise in this period this superstructural organism, this unavoidable evil, the state.

But there are fundamental differences between this state and the state in other class societies:

a. In the first place, the fact that for the first time in history it is the state of the majority of exploited and non-exploiting classes against the minority (the former ruling class), and not of an exploiting minority for the oppression of the majority.

b. The fact that it is not constituted on the basis of a specialized body - of political parties - but on the basis of delegates elected by local territorial councils and revocable by them.

c. This whole state organization categorically excludes any participation in it by exploiting classes and strata, who are deprlved of all political and civil rights.

d. The fact that the remuneration of the members of this state is never more than that of the workers.

It is in this sense that marxists can justflably speak of a semi-state, an altered state, a state on the road to extinction.

8. The experience of the victorious Russian Revolution bears with it certain precise though negative, lessons concerning the relationship between the dictatorship of the proletariat and state institutions in the transition period:

a. The function of proletarian political parties is fundamentally different from that of bourgeois political parties, above all because they are not and cannot be state organisms. While bourgeois parties can only exist by tending to become integrated into the state apparatus, the integration of workers' parties into the state after the revolution perverts them and causes them to completely lose their specific function in the class.

b. Because the function of the state is the conservation of the existing social order the state in previous class societies could not fail to be identified with the economically dominant class, to become the main expression of its general interests and of its unity, both within that class and in the face of other classes in society.

This is not at all the case ror the proletariat which does not tend to conserve the existing state of affairs but to overthrow and transform it. That is why its dictatorship cannot find its authentic and total expression in a conservative instrument par excellence, the state.

There can be no such thing as a 'socialist state'. This is a contradiction in terms. But soclalism is the historic interest of the proletariat, its own evolving essence. There is identity and identification between the two. To the extent that onc can talk of a socialist proletariat, one cannot speak of a workers' state, a proletarlan state.

We also consider that, on the basis of the Russian experience, a theoretical effort must be made concerning the necessary distinction between the state in the period of transition, which the proletariat is forced to use and over which the proletarlat must exert its dlctatorship at all times, and the proletarian dictatorship itself. Politically this identification has been tremendously harmful to the revolutionary struggle of the proletariat, serving as a mystifying cover for the counter-revolution in Russia, under the direction of a degenerating Bolshevik party.

c. The state in the transition period, with all its distinctive characteristics and limitations, still bears all the marks of a class-divided society. It can never be the organ which establishes and symbolizes socialism. Only the proletarian class is the seed-bearer of socialism. Its domination over society is also its domination over the state, and can only be assured by its own class dictatorship.

9. The dictatorship of the proletariat must be defined by:

a. The necessity to maintain the unity and autonomy of the working class in its own organs, the workers' councils, accompanied by the proletariat's dissolution of all organs belonging to other classes as classes.

b. The proletariat's exertion of its hegemony in society, which means a hegemonic participation within the organizations from which the state emanates, while denying the other classes any right to intervene in its own class organs.

c. The proletariat's assertion of itself as the only armed class, independently of any other organ, above all the state.

1 This 'increase' in the labour force, greeted by the American bourgeoisie as the great success of the 'recovery', simply expresses a certain decrease in the number of unemployed, an absurd success when there were 9 million unemployed in 1975.

2This survival 'by credit' is still clearer in the so-called 'socialist' countries where the debt of all the countries in the Russian bloc to the West is now calculated to be 35 billion dollars. The situation is so serious that they have already asked for a moratorium. North Korea has even stopped paying the interest back on its debt which is something like 1.5 billion dollars. The situation is identical in the non-oil producing backward countries where the current deficit has now reached the incredible figure of 37 billion dollars. Faced with this state of affairs, bankers and Western governments have therefore decided to curtail their loans to the East, and within their own bloc loans to countries like Italy and Great Britain are matched with all sorts of conditions which undermine any pretence to 'national independence'; and these loans are only granted because of the necessity to safeguard the cohesion of their own bloc. Russia has only granted new credits on condition of a stricter control of its clients' foreign policy.

3 It is no accident that this view is very similar to the Trotskyist analysis of someone like E. Mandel, who claimed to see in the 1967-8 crisis a "new long wave of stagnant tonality", "the result of a traditional cyclical movement (septennial, decennial, or quinquennial)". In short the Bordigist and Trotskyist augurs are the birds of good omen for suffering capitalism, to which they ascribe the virtues of immortality.

4 The hourly rate of pay went from $4.20 to $6.22 in the USA during the period 1970-75, while in Belgium it rose from $2.08 to $6.46 and even in Sweden it rose from $2.93 to $7.12 (City Money International, May 1976).

5 This was effectively done during the last quarter when Japan's competivity threatened to inundate the EEC countries with its commodities, so that the latter forced Japan to climb down. It yielded to the EEC's decision whereby Japan would allocate its exports of steel according to quotas, limiting its policy of dumping and opening up its own market much more to European goods.

6 80 percent of the unemployed hit by the crisis were unable to find another permanent job during the 'recovery' and are attempting to live by various forms of casual or illicit labour. This is becoming less and less possible. The capitalist class speaks not only of cutting 'social welfare' but of creating work camps. For example, in Belgium, the Minister of Labour has announced a a plan to force the unemployed to work for three days a week for nothing under pain of having its welfare immediately withdrawn.

7 The 'programmatic basis' of a revolutionary organization is made up of all the principal positions and analyses which define the general framework of its activity. Positions that represent 'class lines' are part of this and are inevitably its backbone. But the activity of a revolutionary organization cannot be defined in terms of class lines alone. The necessity for the highest degree of coherence in its intervention obliges it to search for the highest degree of coherence in its conceptions, and thus to define as clearly as possible the general framework which links together all the class positions and situates them in a coherent, global vision of the aims and methods of the revolutionary struggle of the proletariat.

8 These two factors partly explain the often extreme confusion which characterized the proletariat's outbursts against the counter-revolution (eg Kronstadt).