Crisis and Imperialist Conflicts

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The unfolding of the world situation is determined by the complex interactions between the course of the economic crisis and the course of the proletarian class struggle. The course of the economic crisis -- which has become permanent in the epoch of capitalist decadence -- is basica­lly determined by the blind laws which regulate the capitalist accumulation process, which condemn capitalism to survive in a cycle of depression - war - reconstruction, and which inexorably drives the bourgeoisie to imperialist world war as the only capitalist response to the open crisis of generalized over-production. The course of proletarian class struggle, while closely linked to the course of the economic crisis, is also the product of a series of super-structural elements and is not in any way mechanistically determined by the unfolding of the economic crisis. Thus, if the course of the economic crisis, when it erupts in a world-wide depression, is a powerful factor pushing the working class to struggle against a constant worsening of its living and working conditions, the capacity of the proletariat to generalize and politicize its struggles is in the final analysis determined by the development of its class consciousness, its autonomous organization, its revolutionary minorities and the relative weight of bourgeois ideology (nationalism, legalism, electoralism, anti-fascism, national ‘communism’, etc) in its ranks.

The course of the proletarian class struggle its­elf becomes an extremely important factor which affects the very course of the economic crisis. By preventing the operation of capitalist palliatives (deflation, incomes policies, social pacts, lay-offs, ‘rationalizations’, militarizat­ion of labor, etc) the combativity of the working class greatly intensifies the crisis and hurls the bourgeoisie into turmoil and disarray. And if in the midst of a world-wide depression a descendant course of class struggle opens the way for the capitalist ‘solution’ of world war, an ascendant course of class struggle, with its development of class consciousness and the growth of both the unitary and political organs of the class, can turn the economic crisis into a revolutionary crisis, the beginning of the communist transformation of society.

It is on the basis of understanding this very complex interaction between the economic crisis and the action of the proletariat -- which is the essence of Marxism -- that revolutionaries can determine whether the historic course is today towards imperialist world war or towards rising class struggle. And it is on this determination that the form of the intervention of the revolut­ionary organization in the struggle of its class depends.

In this report on the international situation we will first analyze the course of the economic crisis, as well as both the incredible sharpening of inter-imperialist antagonisms which a world­wide depression has brought in its wake, and the political crisis into which the growing economic catastrophe has thrown the bourgeoisie of each nation. We will then trace the course of the proletarian class struggle and its impact on the unfolding of the economic crisis and on the mount­ing tendencies which propel the bourgeoisie towards world war. Finally, on the basis of our study of the interaction between the course of the economic crisis and the course of the prolet­arian class struggle -- of the rapport de force between the bourgeoisie and the working class -- we will show the nature of the historic course today and the factors which could bring about a change in it.

The Economic Crisis

Twelve years after the countries ravaged by the second imperialist world war (Europe, Japan) had again achieved positive trade balances and were able to compete with the US on the world market, thus signaling the end of the post-war reconstruction; eight years after tale collapse of the international monetary system established at Bretton Woods inaugurated a period of unceasing monetary chaos; four years after the sharpest decline in world production and trade since the 1930s -- the world economy in 1979 stands poised on the brink of new and even more devastating economic cataclysms!

In the industrialized countries of the US bloc (the OECD) while industrial production rose over 60% between 1963-73, the rise was less than 13% between 1973-78, or two-fifths the rate achieved before. This drastic slowdown in the growth of industrial production -- now verging on stagnat­ion -- is the grim testimony to the saturation of the world market and to the open crisis of over­production which afflicts the globe’s industrial giants.

One of the most glaring manifestations of the crisis of overproduction is the underutilization of productive capacity, idle plants. The US, even at the cost of new destruct­ive galloping inflation (prices are rising at a yearly rate of over.19%), which if it is not quickly checked threatens economic ruin, has not been able to duplicate its feats of the booms of the 50s and 60s when industry ran almost flat out: in 1978 manufacturing industry ran at only 83% of capacity, and in a key industry like steel production had fallen 7% from the already low level of 1974. But it is America’s allies who are today most devastated by the plague of excess productive capacity, which in a number of vital industries has reached epidemic proportions and is spawning a series of emergency plans to try and eliminate surplus capacity in a coordinated fashion throughout the bloc so as to avert the danger of internecine trade wars.

The contraction in steel production has already reached monumental proportions: between 1974-78 output has dropped 9.4% in Britain, 12% in Japan, 18% in France, 20.5% in West Germany, 22%; in Holland, 26.2% in Belgium and 26.6% in Luxemburg. And there is no end in sight! In Belgium, the steel industry is working at only 57%; of capacity, while in Japan 20% of the country’s blast furnaces are in mothballs. The magnitude of the steel glut is strikingly manifested in the brand new 3 million tons a year blast furnace near Tokyo which its owner, Nippon Kokan, hesitates to even start up since it can only add to the existing overcapacity, and in a new mill in France’s Lorraine province which is being allowed to rust even before it produces any steel whatsoever.

The situation in shipbuilding is even more catastrophic. World orders which stand at 74 million gross registered tons in 1973 fell to only 11 million gross registered tons in 1977 (not even enough to keep Japan’s ship­yards busy, let alone the whole bloc); moreover, orders have declined by 30% since 1977! It is the countries of the American bloc which have been the hardest hit by this virtual collapse of the shipbuilding industry. In France, for instance, new orders will keep no more than a quarter of the present capacity at work. Japan -- which builds half the world’s ships -- is planning to eliminate at least 35% of its ship­building capacity, while the EEC plans to cut almost half its capacity.

In chemicals, the West German industry -- which dominates the world market, even as its giant companies dominate the German industrial scene -- is operating at just 70% of capacity. In petro­chemicals there is a 30% overcapacity in the EEC -- and it is growing. In synthetic fibers, plants in the EEC are now working at 66% capacity, and a 3-year plan of ‘disinvestment’ aimed at reducing capacity by 20% has been drawn up. Meanwhile, Japan’s Ministry for International Trade and Industry (MITI) says that its fibers industry must permanently eliminate 25 of its bloated capacity.

In industries like shipping and automobiles the picture is equally bleak for capital. In countries where shipping is a mainstay of the economy much of the once busy fleets are now idle; in Greece 11%, in Norway 23%; in Sweden 27%. In the automobile industry, while production in the EEC is now running at around 10.6 million cars a year, factories are capable of turning out 12 million cars a year -- and on the basis of current projec­tions, the industry’s capacity will rise to over 13 million cars by 1982. A planned and coordinat­ed contraction (as in steel, shipbuilding and fibers), a spate of bankruptcies or protection­ism are the only alternatives for this key indus­try too.

The concomitant of a persistent and indeed growing excess capacity in key industries has been an alarming sluggishness in investment in new plant, or, to be more precise, the growing obstacles to the realization of surplus value have brought in their wake a slackening in the rate of accumulation. In a world burdened by the weight of idle capacity, investments in new plant cannot fail to stagnate and then decline. And this, as we shall see when we trace the economic perspectives for the 80s, is but the harbinger of a new and violent collapse of production!

The bankers and technocrats vainly seeking to coordinate the economies of the US bloc -- despite the impotence of their economic ‘science’ -- have at least been able to recognize the problem. Thus the savants of the OECD point to “... the slowness in the expansion of the fixed investments of enterprises observed in recent years in practica­lly all member countries ... Even in countries where the sum-total of capital expenditures has increased, until recently, at a relatively high rate, fixed investment of enterprises has remained weak relative to its previous highs.” (Perspect­ives Economiques de 1’ OCDE, July 1978) .

The Bank for International Settlements also points to “... the persistent weakness in expenditures on the fixed capital of enterprises ...” (Banque des Reglements Internationaux, 47 Rayport Annuels , Bale 1977) .

The magnitude of the problem can clearly be seen in the case of West Germany, where the average annual growth rate of manufacturing capacity declined from 6.1% during 1960-65 (the last phase of the post-war reconstruction) to 3.9% during 1966-70 (the onset of the open crisis) and then to 1.8% in 1975, 1.5% in 1976, and 1% in 1977. This catastrophic decline in the rate of accumula­tion in West Germany with its still fat trade sur­plus well illustrates the economic disaster thro­ugh which the world is going. While incapable of grasping either the fundamental or immediate causes of the world economic crisis, the bourgeoi­sie sometimes formulates its dilemmas of idle capital and the utter senselessness of new invest­ment in a perceptive way: “If the United States had to invest approximately 20%, of its GNP in new capacity, there would not be enough warehouses to store all the unsold merchandise, nor enough electronic calculators to make out the unemployment cheques.” (Business Week, Jan. 16, 1977).

The dimensions of the present economic crisis can also be seen in the huge and ever-growing mass of unemployed workers. There are now 18 million unemployed workers in the industrialized countries of the American bloc! This legion of the unemployed does not simply constitute an industr­ial reserve army which exercises a downward pressure on wages, as it did during the ascendant epoch of capitalism in the last century. Nor are the unemployed merely the by-product of the bourgeoisie’s offensive against the proletariat, the fruit of its effort to ‘rationalize’ product­ion and extract more surplus value from even fewer workers. While both of these tendencies are cert­ainly at work, the unemployed in their present massive numbers, far from being a boon to capital­ism have become an incredible burden on the profitability of global capital, which the bourgeoisie is helpless to control. Today, unemployed workers are one more manifestation of the insurmountable contradictions of the capitalist mode of production; they are first and foremost the materialization of the chronic overproduction of the commodity labor power.

To the overproduction of constant capital exemplified by surplus manufacturing capacity and idle plant, must be added the overproduction of variable capital exemplified by the living hell of unemployment on a mass scale. To the growing volume of idle money for which no productive investment is possible must be added an idle generation of young workers (in France, for example, 1 out of every 7 workers under twenty-five years of age is unemployed) whose labor power can no longer increase capital. The agony of a dying capitalism has confirmed the forecast of Marx and Engels of a capitalist mode of produc­tion which “... is incompetent to assure an existence to its slaves within their slavery, because it cannot help letting them sink into such a state that it has to feed them, instead of being fed by them.” (The Communist Manifesto).

The world economic crisis of capitalism, in total disregard of the Trotskyists’ insistence that the countries of the Russian bloc are ‘workers' states’ (sic), has not spared the 10 nations of COMECON1. The violent shockwaves of the open crisis of world overproduction have also convulsed the Russian bloc, and have brought about the same drastic slowdown in the growth of industrial production and fall in the rate of accumulation that afflict the rest of the capitalist world.

In Russia the annual rate of growth of industrial production which was around 10% in 1950-60, declined to around 7% between 1960-70, and for the last Five-Year Plan (1971-76) fell to an anemic 4.5% -- only slightly above the average annual rate of growth for the countries of the OECD during the same period. Moreover, the Russian planners have already had to concede that the objectives for industrial growth of their present Five-Year Plan (1976-80) will not be achieved. In every one of Russia’s satellites in Eastern Europe, the growth in industrial production in 1978 fell below planned targets. And in East Germany, where GNP grew at around 4% in 1978 instead of the planned for 5.2%, hopes for attaining the goals of the Five-Year Plan have been abandoned.

The countries of the Russian bloc are also suffering from a decline in the rate of accumulation. Thus, in Bulgaria, the growth of investment slackened from 6% in 1977 to only 4.4% in 1978. In Hungary, new investments will be practically frozen in 1979 (a rise of little more than 1% forecast), and not a single big investment project will be started this year.

A number of key industries in the Russian bloc are already directly plagued by overproduction and the limits of the saturated world market. Industries which produce largely for the world market, like Poland’s shipyards, the huge new auto plants in Poland and Russia which turn out Polski’s and Lada’s, and engineering factories like Poland’s RABA which sells a quarter of its 930 million annual production to the west, all face the bitter alternative of idle capacity or systematic dumping. This latter, to which these industries have turned, is merely another manifestation of the crisis of overproduction -- and one whose ramifications will be felt through­out the countries of the Russian bloc as the sale of commodities below their cost of production in one group of industries must be compensated for by higher costs in other sectors.

However, the bulk of the industry of the Russian bloc has not directly come up against the limits of a saturated world market. Indeed, Russia and her satellites are caught in the grip of chronic scarcity of capital, seemingly the very opposite of the crisis which is battering the metropoles of the US bloc. Yet both the idle capital in the US bloc and the dearth of capital in the Russian. bloc -- the excess productive capacity in the US bloc and the insufficient productive capacity of the Russian bloc -- are the different manifestations of the same global crisis of overproduction brought about by the saturation of the world market.

The specific manifestations of this crisis in the countries of the Russian bloc -- the lack of capital -- are the result of the relative backwardness of these economies. The GNP of all of Russia’s East European satellites does not equal the GNP of France alone; Russia’s own GNP does not match the combined GNP of Britain, France and Italy (which are certainly not the industrial giants of the US bloc), This backwardness is manifest in all the key areas which determine the competitiveness of an economy on the world market. Despite the almost complete statification of industry in COMECON , the concentration of capital in large-scale enterprises is much more advanced in the US bloc (the fifty largest companies account for nearly one third of America’s industrial production; in Russia, it takes the output of the 660 largest enterprises to reach a comparable figure) . The organic composition of capital is much higher in America than in the Russian bloc (Czechoslovak industry -- one of the most technically advanced in COMECON -- uses a quarter more workers than the average for the EEC2, therefore permitting the US to approp­riate a disproportionate share of global surplus value. The productivity of labor is also much greater in the US bloc than in the Russian bloc (Russian skilled workers are only three-quarters as productive as skilled workers in the US). Finally, the Russian bloc is burdened by a backward and labor-intensive agriculture (between 25-40% of the active population of the COMECON countries still works on the land, while in practically all of the industrialized countries of the US bloc the figure is under 10%).

The fact that Russian capitalism really only began its bid for world power when the capitalist mode of production was already in permanent crisis meant that it could not duplicate the feat of the already dominant economic -- and hence imperialist -- powers who had achieved a formidable accumulat­ion of capital on a still expanding world market. The saturation of the world market, the global crisis of overproduction, placed severe limitat­ions on the development of Russia’s export industries, on her capacity to realize surplus value beyond her frontiers (despite recourse to systematic dumping during the open crisis of the 30s and today), and thereby drastically restricted her capacity to import the advanced technology necessary to overcome her relative backwardness. Despite a forced capitalization, the attempt to compensate for her dearth of capital through an almost total statification (as well as the pillage of the capital stock of the countries conquered in World War II), imperialist Russia has not been able to close the economic gap which separates her from the rival US bloc. The deepen­ing of the present open crisis of world overprod­uction has only accentuated Russia’s economic backwardness, her inability to produce on the same scale as her competitors, and manifests itself east of the Elbe in the form of a chronic dearth of capital in the bulk of industry and agriculture, and in the dumping without which the output of certain key export industries would be un-saleable. Thus, the same global economic crisis brought about by the saturation of the world market, with different economic manifestations, has already led to a persistent and growing slowdown in the rise of industrial production and to a pronounced slackening in the rate of accumulation in both the American and Russian blocs.

In the under-developed countries, where most of the world’s population lives, the open crisis of world overproduction has greatly accentuated the dependence and backwardness to which these ‘independent’ nations are irredeemably condemned by the decadence of capitalism. The mere hand­ful of countries among the under-developed nations where industry has attained a consider­able weight in the national economy are convulsed by the same slowdown in the growth of industrial production, fall in the rate of accumulation and mass of unemployment on a rapidly growing scale which afflict the industrial giants -- despite the pervasive protectionism designed to stave off the competition of the industrial behemoths like the US, West Germany and Japan, as well as dumping by Russian industry. In Argentina, industrial production fell by 6% in 1978 and whole sectors of industry -- automobiles, (Gen­eral Motors has closed all its plants), agricult­ural machinery, steel, chemicals, petrochemicals have their backs to the wall. In Brazil, the anticipated growth in GNP of 5% this year (which has already become problematical in the face of a credit squeeze brought on by a skyrocketing annual inflation rate of over 60%) is only half the annual rate achieved during the economic ‘miracle’ a decade ago, and much too low to per­mit the creation of the l.5 million new jobs each year without which unemployment will soar. In Mexico, where real GNP rose 6-8% annually between 1958-73, the growth in GNP was only 2.5% in 1977. Investment, which grew at an annual rate of 23.1% between 1965-70, slowed to an annual rate of 17.8% between 1971-78; moreover, whereas the state acc­ounted for just one-third of this investment in 1965-70, the still high rate of investment between 1971-78 was only possible because the state, as a result of very heavy borrowing from foreign banks, provided about 90% of it -- producing not an accumulation of capital but an accumulation of debt. To all this must be added the fact that total or partial unemployment is already the lot of 52% of the active population! In South Africa, economic growth slowed last year to a weak 2.5%, far too low to prevent a rise in unemployment from an already staggering 2 million workers.

In the vast bulk of under-developed countries, the national economy revolves almost exclusively around the extraction of raw materials of agric­ultural production (usually one or two cash crops) The open crisis has exacerbated to an incredible degree the tendencies which have characterized these economies since the very onset of capitalist decadence more than seventy years ago: permanent agricultural crisis and absolute dependence on imported foodstuffs in what are predominantly agrarian economies; the enormous growth of a sub-proletariat cut off from the rural villages from which capital has separated it and condemned to a jobless existence in the vast shanty towns and bidonvilles which have grown up around the comm­ercial and political urban centers; in short, mass starvation and destitution.

The impossibility of the under-developed countries overcoming their backwardness and dependence is all too clear: assuming zero-growth in the indust­rialized countries of the western bloc, those under-developed countries which already have an industrial base (Argentina, Brazil, Mexico, South Africa, etc) would take sixty-five years of growth at their 1970-76 rate to catch up to the per capita GNP of the industrialized countries; for the bulk of the under-developed countries -- assum­ing the same conditions -- it would take 746 years! Yet while the crisis inexorably drives the indust­rialized countries towards stagnation and even decline in industrial output, it even more surely condemns the under-developed countries to economic collapse, thus making absolutely certain that the already enormous gap between the industrial giants and the under-developed countries will widen over the coming decade.

The global slowdown in the growth of production and in the rate of accumulation has brought in its wake a slowdown in the growth of world trade. After the sharp decline of around 10% in the trade of the OECD countries in the first half of 1975, these countries’ foreign trade jumped in 1976 only to virtually stagnate the next year; after another jump in 1978 -- though much weaker than in 1976 and largely due to America’s reflations -- their foreign trade is now again practically stagnant. The foll­owing table, which traces the growth of the value of imports and exports of the seven principal coun­tries of the OECD (USA, Japan, West Germany, UK, Canada, Italy) which account for the vast bulk of the world’s trade, clearly illustrates the stag­nation which characterizes the vital element in the health of the global capitalist economy which is international commerce.
































Source: Perspectives Economique de l’OCDE, 23/24

* estimates

However, the inability of world trade to develop is minimized and considerably obscured by the very statistics with which the OECD, the World Bank, the IMF and other capitalist agencies and instit­utions use to monitor the condition of internat­ional commerce3. The bourgeoisie fails to appreciate the significance of the fact that 70% of the foreign trade of the OECD countries is among themselves -- and that it is this intra-bloc trade that accounts for most of the growth that the stat­istics indicate4. When world trade dropped off so quickly and catastrophically in the open crisis of the 1930s, six of the seven of today’s principal trading countries (Canada was the exception) were then bitter imperialist rivals. Today, all seven of these countries find themselves firmly within the same imperialist bloc and the trade between them indicates as much the nature of the complex division of labor and economic interpenetration which the US has imposed on its bloc as a real growth in what has traditionally been international commerce. Much the same can be said about the fact that 50% of the trade of the Comecon countries is with each other, and that this too is the fastest growing component of each country’s trade.

Moreover, in tracing the very slow growth in world trade over the past five years, the bourgeoi­sie is incapable of grasping the significance which must be attached to the composition of this trade. Approximately 25% of the value of world trade in 1977 consisted of foreign travel, invest­ment income and other ‘services’ which represent paper or fictitious values and unproductive expenses which in no way constitute a real expan­sion of trade. Similarly, a considerable portion of both the value and volume of world trade con­sists directly of armaments (43.7 billion dollars between 1971-75, 76% of which is with the underdeveloped countries) which from the standpoint of global capital represents not a growth but a sterilization of value, not an expansion but a destruction of global capital5. The fantastic development of unproductive expenditures -- the hallmark of capitalist decadence -- one aspect of which is the growth of the arms trade, is obscured by the fact that a very considerable part of world trade which is actually for military purposes is hidden in the figures for the growth in trade in raw materials like crude oil, copper, nickel, tin, lead, zinc, molybdenum, etc of which around 10% at least is for armaments and the trade in electronic equipment and heavy machinery much of which (nuclear reactors for example) is for military production.

Finally, a huge part of the growth in world trade – particularly over the past five years – has its counterpart rapidly growing trade deficits and an astronomical rise in the foreign debt of the underdeveloped countries. The overall trade deficit of the underdeveloped countries rose from 7.5 billion dollars in 1973 to 34 billion dollars in 1978; the foreign debt of these same countries grew from 74.1 billion dollars in 1973 to 244 billion in 1978, and is the essential element in financing these mounting trade deficits. This huge debt indicates that the growth in trade which bourgeois economists have recorded hides the fact that there has been no real expansion of the world market. Indeed, as we shall see, effective demand on a world scale is shrinking at a rate which the expansion of world credit can no longer compensate for.

The stagnation of world capital over the past four years – which shattered the hopes that the bourgeoisie entertained of a recovery from the sharp downturn of 1974-75 -- now threatens to give way to another and much more devastating collapse of pro­duction, investment and world trade as the crisis of overproduction relentlessly deepens.

After the economic downturn which shook the countries of the US bloc in 1970-71, virtually all governments reflated (and the credit expansion fuelled the galloping inflation which followed). In the aftermath of the much more severe downturn of 1974-75 -- which convulsed both blocs simultan­eously -- only the US reflated and to it fell the burden of propping up the rest of its bloc for the next few years. Meanwhile, West Germany and Japan hurled themselves into an export offensive which fattened their trade surpluses and profits while their home markets stagnated. By 1978, however, the declining competitiveness of American goods of the world market, the US’s astronomical trade deficits and the collapse of the dollar, meant that Washington too would have to put on the economic brakes. The Bonn summit last July was intended to pressure West Germany and Japan to rein in their exports and to reflate their economies so as to relieve the pressure on the US while keeping the world economy from collapsing anew.

The months which followed the economic summit were to demonstrate that the US had succeeded to a considerable degree in imposing its diktat on its reluctant allies. Japan projected a budget defi­cit this fiscal year of 80 billion dollars equal to 40% of its total budget and larger than America’s), and Japan’s imports have been growing at a rate twice as fast as its exports, West Germany adopted a budget which would inject an additional 15.5 billion Deutsche Marks into its economy (equal to 1% of GNP). One result of more restrictive monetary police in the US, and German and Japanese reflation, was a dramatic rise of the dollar: between November 1978 and April 1979 the dollar rose more than 10% against the DM and 22% against the Japanese yen.

However, even the most optimistic forecasts of the bourgeoisie (the OECD for example) indicated that German and Japanese expansion in 1979 would not compensate for the slackening in the growth of America’s GNP. Therefore, a realistic appraisal of economic trends could only lead to the conclusion that the stagnation of the past few years would give way to a downturn in 1979. Rea­lity though has been even more brutal in the first months of 1979. GNP in the US grew at only 0.7% in the first quarter (less than half the rate forecast by the OECD last December) and is now actually declining. The galloping inflation which is today raging in the US precludes any significant stimulation by fiscal or monetary policy to halt the decline. Meanwhile the stimulative monetary policies and reflationary budgets in West Germany and Japan quickly ignited the fires of galloping inflation in those countries (the annual rate of inflation was 10% in West Germany in March and 11% in Japan in February); this has now provoked a credit squeeze and the aborting of reflationary policies, which has rudely shattered the hopes for substantial rises in GNP to even partially offset the decline in America. The nightmare that has haunted the technocrats and bankers of the OECD and the IMF is becoming a reality: virtually all of industrialized countries of the US bloc will be deflating their economies simultaneously!

Idle manufacturing capacity and deflation through­out the US bloc cannot be offset by a new expansion of trade with either the Russian bloc or the under­developed countries. The hard currency indebted­ness of the countries of the Russian bloc to the US bloc has risen from 32 to 36 billion dollars in 1976 to around 50 billion today. Poland -- which owes a staggering 15 billion dollars is already tottering on the brink of bankruptcy. Western bankers, trying to salvage their previous invest­ments, are in no position to grant the huge new credits that alone would make possible the financing of the mounting trade deficits of the Russian bloc with the west -- which rose from 4.9 billion dollars in 1977 to 6 billion dollars in 1978. Moreover, the preoccupation of the bureaucrats of the countries of the Russian bloc today is to limit their imports from the west -- even as they engage in massive dumping of their own commodities on western markets -- so as to reduce their spiraling trade deficits.

Turning to the underdeveloped countries, the countries of the US bloc face the same dilemma. With 244 billion dollars in foreign debt, the underdeveloped countries are virtually bankrupt and reduced to calling for debt moratoria. In countries like Algeria, Zambia, and Zaire the foreign debt is equal to more than half the annual GNP. The 5 billion dollar service on Brazil’s foreign debt in 1978 was equal to about 55% of the total value of its exports for the year. Mexico spent 6 billion dollars servicing its foreign debt in 1979, while its huge oil resources yielded only 1.7 billion dollars in exports. In the face of the sheer magnitude of such debts and the growing difficulty in servicing them, new loans -- which the west is increasingly hesitant to make -- far from expanding trade will be used primarily to assure the servicing of past debts and to avert the financial debacle for western banks which defaults would bring in their wake.

While the enormous expansion of credit within the US bloc, to the Russian bloc and to the under­developed countries over the past decade had to an extent masked the shrinking of effective demand on a global scale, the harvest of galloping inflation and un-payable debts -- a mass of paper values -- has virtually put an end to recourse to such a palliative today.

The Chinese market, which only a year ago aroused such hopes in business and financial circles throughout the US bloc, cannot provide sufficient outlets for the idle plant in major industries. China’s need for massive imports of technology and machinery is not matched by the resources with which to pay for these imports. After the ambitious plans announced in March 1978, China had to freeze thirty major plant import deals with Japan this February, when the Peking bureau­cracy thought twice about the consequences of its original ‘modernization’ plans. China will certainly grow as a market for the US bloc (part­icularly for armaments), but not as fast as the west thought a year ago; nor will China compensate for the stagnation and imminent downturn in world trade -- particularly as in the intense competition for the Chinese market between western countries there will be more losers than winners. Moreover, the Chinese will try to flood saturated western markets with textiles, shoes etc, thus compound­ing the global overproduction which already characterizes the consumer goods industries where Chinese capitalism is even now competitive.

For West Germany and Japan -- the countries of the US bloc whose economies are most competitive on the world market -- the end of reflation at home and the severe limits to extending credit abroad mean that an unrestrained export offensive at the expense of their trade rivals within the bloc looms as the most viable way to try to weather the growing economic storms. Such a move by the German and Japanese bourgeoisies cannot fail to fan the flames of protectionism smoldering just beneath the surface of the weaker economies of the US bloc (Britain, France, Italy) , and even in the US. The possible response in the form of competitive devaluations and import controls which would upset the European Monetary System and abort the just-concluded ‘Tokyo Round’ orchestrated by American imperialism, accelerating the collapse of world trade and producing a rush to autarchy, are issues we will take up when we discuss the political crisis of the bourgeoisie. For the moment it is sufficient to point out that a new German and Japanese foreign trade offensive can only deepen the world crisis.

The inexorable deepening of the global crisis of overproduction, and the failure of the several palliatives with which the bourgeoisie has vainly sought to stem the ravages of the blind laws which determine the course of the economic crisis, has brought world capital to the brink of another decline in industrial production, investment and trade -- sharper than the downturns of 1971 and 1974 -- as the 1980s begin6.

Inter-Imperialist Antagonisms

There is only one section of the world economy which will grow significantly over the next several years: the armaments industry, war production. The case of Syria where military expenditure con­stitutes 57.2 per cent of the state’s budget, while the productive sector of the economy coll­apses, is typical of the underdeveloped countries today. Those ex-colonies with any appreciable industrial sector, like South Africa, Israel, Argentina and Brazil, are spending billions of dollars to build nuclear bombs and delivery systems while galloping inflation and astronomical foreign debts ravage their economic base. Even countries whose industry remains confined to a few pitiful islands in an ocean of backward agricul­ture and cottage industries, like India and Pakistan, are exhausting dwindling exchange resources to expand and develop a capacity to wage nuclear war. In the imperialist metropoles, armaments production will zoom upwards while the rest of the economy contracts over the coming years. The Russian bloc is deploying its new SS-20 nuclear missiles which are capable of destroying every major city in Western Europe, and is augmenting its land armies so as to be able to reach the Atlantic coast in a few days march; to this must be added the prodigious development of the Russian navy, by which the Kremlin is determined to challenge America’s hegemony on the seas. The countries of the US bloc too are signi­ficantly increasing their military budgets, even as they slash other expenditures (France’s mili­tary budget increased 5 per cent this year while the Barre Plan calls for the scaling down of whole sectors of the economy). NATO is both planning to introduce a new system of nuclear missiles capable of hitting targets in Russia from Western Europe, and greatly expanding the whole infra­structure of ports, air fields, fuel depots, storage facilities etc, so as to facilitate the speedy transport of American troops and equipment to the European front in the event of war. Mean­while, the US is already re-examining its decision not to produce the neutron bomb, and is preparing to build a completely new intercontinental ball­istic missile system - the MX. Finally, the US bloc has enthusiastically joined Peking in its massive and costly program to modernize all branches of the Chinese armed forces.

The war economy, where the production of the means of destruction becomes the very axis of industrial production, is not a new phenomenon. The out­break of the first imperialist world war in 1914, which clearly marked the entrance of world capital into its decadent phase, had as its corollary the development of the war economy. Just as capita­lism’s historic crisis is a permanent one, so too is each national capital characterized by a permanent war economy in this decadent epoch of capitalism. However, just as the permanent crisis is marked by a cycle of depression-war-reconstruc­tion, a cycle in which there are passing respites from the ravages of open crisis and the devasta­tions of world war, so the permanent war economy is marked also by a zig-zag movement in which there are sometimes short periods when a decline in war production occurs (Europe and the US during the reconstruction of the 1920s; the US between the end of World War II and the outbreak of the Korean war, 1946-50). Nonetheless, like the historic crisis itself, the war economy has been a constant feature of capitalism since 1914. The present phase of world-wide depression, though, is bringing in its wake an incredible strengthen­ing of the war economy -- not simply on a national scale but dictated, coordinated and organized by the mammoth continental state capitalism, the US or Russia, which dominates each of the two contending imperialist blocs.

The present phase of monstrous growth of the war economy is neither a palliative for the rapidly deepening economic crisis nor a factor which can provide even a momentary facade of ‘prosperity’. Under all conditions, by its hyper-development of the unproductive sector of the economy, war pro­duction drains surplus value from the remaining islands of profitable activity. In all circum­stances, the war economy involves an assault on the proletariat: “... war is realized at the expense of the working masses, who are drained y the state (through various financial devices -- taxes, inflation, loans and other measures) of values with which it constitutes a supplementary and new purchasing power” (‘Report on the International Situation’, National Conference of the Gauche Communiste de France, July 1945). If the rearmament programs of Hitler, Blum and Roosevelt in the 1930s could temporarily stimulate their economies and even lead elements of the communist left to think that the war economy might open up an epoch of economic expansion and bring with it a rise in the living standards of the working class7, both the short-lived economic stimulant and the illusions it produced were due to the massive state debts incurred and the inflationary policies pursued by the capitalist governments. Today, however, the strengthening of the war economy in the midst of an already intolerable level of state debt and rampant inflation (themselves in large part the ransom capital has paid for some forty years of almost uninterrupted growth in arms production), and therefore recourse to debt and inflation as the specific way to make the working class pay for the war economy is impossible. Instead, the present phase of expanding war production will be accompanied by deflation, budget cuts in all non-military areas and draconian austerity programs, thereby precluding even a momentary stimulative effect on the economy as a whole. Indeed, because of the enormous waste represented by the surplus value crystallized in armaments, whose realization intensifies the inflationary spiral and which cannot re-enter the productive cycle, thereby becoming a dead-loss for global capital, the war economy can only exacerbate the economic decline and accelerate the fall in the living standards of the proletariat.

Nevertheless, war production will continue its dizzying growth at the expense of all other econo­mic activity, swallowing up whole sectors of industry (shipbuilding, electronics, construction etc) as their ‘civilian’ activities relentlessly shrink. The strengthening of the war economy is an absolute necessity for capital, though the “object of war production is not the solution of an economic problem” (ibid). The war economy is vital to capitalism only because of the inevitabi­lity of imperialist world war if the proletariat does not smash the bourgeoisie. War production as the axis of the economy is the bourgeoisie’s response to the blind laws which, in condemning capitalism to an inexorable deepening of the economic crisis, sharpen inter-imperialist antagonisms to the breaking point. The sole function of the war economy is ... imperialist world war!

In its decadent phase, imperialist world war has become the very condition for the survival of capitalism:

The more the market contracts, the more bitter becomes the struggle for sources of raw materials, and for the mastery of the world market. The economic struggle between differ­ent capitalist groups concentrates more and more, taking on its most finished form in struggles between states. The aggravated economic struggle between states can only be finally resolved by military force. War be­comes the sole means, not of resolving the international crisis, but through which each national imperialism tries to overcome its problems at the expense of rival imperialist states.” (ibid)

While it is the economic crisis which creates the necessity for the bourgeoisie to unleash a world war, the capacity of the bourgeoisie to impose its ‘solution’ of imperialist war is strictly determined by the rapport de force between the bourgeoisie and the proletariat. It is to this question that we will return in the discussion on the historical course.

Before discussing the actual strategies of the contending imperialist blocs today and surveying the zones of inter-imperialist confrontation, there are some general comments on the physiognomy of capitalism in the imperialist epoch which we think it is important to make. All the more so as confusion has existed and persists within the revolutionary movement on a number of characteristics in the epoch when it is permanently convulsed by latent or open imperialist war.

The process of concentration and centralization of capital, which is one of the hallmarks of the bourgeois mode of production, has been transposed by some revolutionaries onto the imperialist chessboard where it emerges as almost a teleologi­cal process bringing about an ultimate world unity of capital as the outcome of the concentra­tion process in the imperialist epoch:

It is necessary ... to see in the wars of the imperialist epoch the decisive moments in the process of world concentration of capital and of power; not simply struggles for a new division of the world, but the advance towards the universal domination of one single exploiting group ... And the limit of this process is -- if the proletarian revolution doesn’t intervene -- the domination of the world by a single imperialist state ...” (Pierre Chaulieu, ‘Situation de 1’Imperialisme et Perspectives du Proletariat’, Socialisme ou Barbarie, no.14)

This view of imperialist wars as bringing about the world unity of capital, which is an updated version of Kautsky’s theory of ultra-imperialism, this time realized not peacefully but through imperialist butcheries, “... loses contact with the reality of the decadent capitalist world: despite the inter-imperialist antagonisms which make the capitalist world momentarily appear as two single fighting units, the tendency is for the decadent capitalist world to go towards disintegration, disorganization, the dislocation of units ... It is in the tendency of decadent capitalism to greater and greater division, to chaos, that the necessity for socialism bringing about the world as a unity resides” (Internatio­nalisme, no.37, 1948) . Through state capitalism, national liberation struggles and world wars, capital in its decadent phase tends to destroy the limited degree of unity which it had itself brought about in its ascendant phase with the formation of the world market and the internatio­nal division of labor. In their place, decadent capitalism imprisons the productive forces within the narrow limits of a veritable plethora of separate national states8. Together with the sterilization of value through war production and the enormous destruction of imperialist war, the formation of new national states is one of the manifestations of decadent capitalism’s complete inability to develop the productive forces.

The formation of two giant imperialist blocs, dominated by Russia and America, led some revolu­tionaries to see the ruling class in each national state as the simple pawn or fifth column of Moscow or Washington. Thus, for the French Bordigists of the late 1940s, the Stalinist par­ties then vying for power in Western Europe could only be the pure and simple instruments of the Russian ruling class: “In order to succinctly characterize the different Communist Parties, we would say that they are fifth columns of Russian imperialism in the enemy camp” (Chaze, ‘L’ Imper­ialisme Russe Contre-Attaque’, L’Internationaliste, November 1947). Such a view completely fails to grasp the fact that the constitution of the two great blocs is not simply a function of the imperialist interests of Moscow and Washington, but also of the necessity for each local bourgeoisie to advance and defend its own national interests and imperialist interests as best it can:

In the epoch of imperialism, the defense of national interest can only take place within the enlarged framework of an imperialist bloc. It is not as a fifth column, as a foreign agent, but as a function of its immediate or long-term interests, properly understood that a national bourgeoisie opts for and adheres to one of the world blocs which exists. It is around this choice for one bloc or the other bloc that the division and internal struggle within the bourgeoisie takes place; but this division always takes place on the basis of a single concern and a single common goal: the national interest, the interest of the national bourgeoisie.” (L’Internationalisme, no.30, 1948)

Closely related to the inability to see the vital interests of each national bourgeoisie in the constitution of, and the choice between, contend­ing imperialist blocs, is the view of the Communist Workers’ Organization (CWO) that in the present epoch, while other countries may ‘aspire’ to become imperialist, only Russia and the US are imperialist states:

... imperialism is a policy of the major capitalist powers ... the idea that all coun­tries are imperialist undermines the idea of imperialist blocs .., how could it be argued that, for example, Israel was an independent imperialist power?” (Revolutionary Perspectives, no. 12)

Certainly, Israel is not an ‘independent’ power, whatever such a term is intended to mean by the CWO. The Jewish state is forced by the realities of decadent capitalism to try and satisfy its very real and voracious imperialist appetites (Greater Israel -- all of the old Palestine mandate, Lebanon south of the Litani River, the Syrian Golan Heights, part of the Sinai, almost all of Jordan), and to defend its no less real -- though more modest – imperialist acquisitions, within the framework of an imperialist bloc. From Rosa Luxemburg’s grasp of the fact that during the first world war a state like little Serbia was “reaching out toward the Adriatic coast where it is fighting out a real imperialist conflict with Italy on the backs of the Albanians ...” (Junius Pamphlet), to the ICC’s recognition that the recent clashes between Vietnam and Cambodia turned into a full scale invasion by Hanoi as “ … the consequence of the imperialist interests of the two countries, and particularly of Vietnam whose crushing military superiority made it possible to realistically envisage an ‘Indo­chinese Federation’ placed under its domination.” (Internationalisme, no.29, February 1979), revolutionary Marxists have understood that in decadent capitalism every national state is imperialist. It is only by starting from this fact that the complex inter-relation between the national interests of a local bourgeoisie and the overall needs of the imperialist bloc to which it is bound can be grasped, and the real nature of localized inter-imperialist wars and national liberation struggles understood.

Some revolutionaries argue that the basis for antagonisms between states and therefore, the composition of an imperialist bloc is solely determined by the prevailing trade or commercial rivalries on the world market. This is the view of the PCI (Programma Comunista) which in its analysis of inter-imperialist antagonisms in Africa has fixated on the clashes between the US, West Germany, France, Britain, and Italy which are today the result of trade rivalries, almost to the exclusion of the titanic struggles between the US and Russian blocs in which geopolitical, military and strategic necessities -- strictly limited to the overall economic interests of each -- are the determining factors. But it is in the hands of Pour Une Intervention Communiste (PIC) that this view, which mistakenly reduces economic interests to only one single factor, the present source of a country’s imports and the destination of its exports, has become the basis of a ‘new’ theory which makes it absolutely impossible to understand the unfolding of inter-imperialist antagonisms today. Because West Germany and Japan are the biggest trade rivals of the US, the PIC for several years has insisted on a crumbling of the US bloc; because trade between West Germany and Russia’s East European satellites has grown so prodigiously, the PIC has insisted on a crumbling of the Russian bloc. This, together with the belief that the strictly commercial interests of the US and Russia are complementary (Russia needs American technology and capital, while the US wants Russia’s raw materials), has led the PIC to put forward the theory of the emergence of new blocs: the US and Russia as one bloc; a German-dominated Europe, Japan and China as the other!

Neither the constitution of imperialist blocs nor the outbreak of imperialist wars can be explained simply by reference to the trading interests of the various national states. Were narrow commer­cial interests the determining factor that the PIC thinks they are, then an imperialist war between Great Britain and the US (and not the struggle between Anglo-American and German imperialism) would have broken out in the 1930s; America was a far more dangerous commercial rival of Britain’s in the markets which were critical to the Empire’s trade and payments surpluses (India, China, Australasia, Canada, South America) than Germany, which challenged Britain only in the less important central and Eastern European markets. It was the geopolitical and strategico-military considerations that a German dominated Europe would condemn the British Empire -- dependent as it was on the Mediterranean life-line -- to economic extinction that determined the ultimate configuration of the imperia­list blocs. Similarly, were trades what most concerned American imperialism in the 1930s, Washington would have infinitely preferred Japan (which was an excellent trading partner) to China (where opportunities for trade were not nearly so good). However, not trade in the strict sense, but the geopolitical question of military -- and hence overall economic -- domination of the Pacific dictated the course of events which would explode in imperialist war between America and Japan.

Today, the crushing economic superiority of America over its bloc (the dollar as the dominant reserve currency, the role of the IMF, the ‘Tokyo Round’, etc), and the absolute strategic-­military dependence of Western Europe and Japan on American imperialism (oil, raw materials, pro­tection of sea lanes) on the one hand, and the overwhelming military superiority of Russian imperialism throughout its borderlands (Warsaw Pact) on the other, conclusively demonstrate that the dominant tendency is that of the consoli­dation and strengthening of the existing US and Russian blocs. The consolidation of the war economy on the inter-continental scale of each bloc and the lines of localized inter-imperialist wars all indicate that the blocs are already con­stituted for a third imperialist butchery. The third world war towards which the blind laws of capitalism and the course of the economic crisis relentlessly drive the ruling class -- and to which only the class struggle of the proletariat now bars the way -- can only be a titanic conflict between Russian and American imperialism for world dominion9.

The basic strategies of Russian and American imperialism are determined by their relative economic weight on the world market. Because of its competitive weakness and technical backward­ness, the fate of Russian imperialism is integra­lly linked to the acquisition of an advanced industrial infrastructure and technology, which in the present epoch is dependent on its capacity to militarily dominate the West European and/or Japanese heartlands. The GNP of Russia in 1976 was less than half the GNP of America. With the addition of Japan’s industrial base, the Russian bloc would match America’s productive output; with the addition of Western Europe’s industrial might, Russian imperialism would easily outstrip its American rival in productive capacity and effectively challenge her in war-making potential. It is for this reason that the real object of Russian imperialism is the giant industrial centers of Europe and the Far East, and why a direct challenge to either would immediately lead to the outbreak of hostilities between the US and Russia. However, the strategy of Russian imperialism is not one of frontal attack, but to cut Europe and Japan off from their sources of energy and vital raw materials in the Middle East and Africa, to sever the trade routes on which their economies depend, and thereby to put enormous pressure on their ruling classes to preserve their national and imperialist interests through a reorientation towards the Russian bloc. In this sense, Moscow’s sustained efforts to destabilize the Middle East and Africa through national libera­tion struggles, and to acquire secure military bases in these regions, has as its real objective the industrial potential of Europe and Japan; the underdeveloped countries of the southern hemisphe­re are the soft underbelly through which Russian imperialism seeks to gain its overall objective of decisively altering the balance of power between the blocs.

If one vital element in the strategy of US imper­ialism is the protection of the vast areas it gobbled up in the two preceding imperialist butcheries, this is not to say that the posture of America is purely defensive. The two-thirds of the world which American imperialism already dominates are no longer sufficient to preserve its economic equilibrium. The devastating blows of the economic crisis dictate that the US fight for an even bigger share of world production, of the global surplus value, and thus for control of even greater numbers of workers, and even more of the world’s resources of raw materials and industrial capacity. The depth of the crisis is such that only the unimpeded control of the whole world market can now afford America even the very short respite which is all that is possible in decadent capitalism. And yet, the very nature of capitalism in the imperialist epoch, with its dominant tendency towards divisions and disaggregation precludes even this.

The past several years have seen a considerable strengthening of American imperialism and weaken­ing of its Russian rival. The integration of China into the US bloc and the commitment to Peking’s massive rearmament mean that the Kremlin will face an increasingly powerful force on its eastern frontier -- and one which can firmly bar the way to the industrial riches of Japan. Not even Russian imperialism’s effort to outflank China through the Indo-Chinese peninsula can minimize this victory for US imperialism in the Far East. In the vast Islamic belt that stretches across Asia from India to Turkey, despite Russian domination of Afghanistan and the fall of the Shah in Iran, this vital area is far from having fallen to the Kremlin. The prospect of the disintegration of Iran and the growth of national liberation struggles among the Azarbaijanis, Kurds, Arabs and Turkomans, may benefit America and not Russia, while the American-backed Islamic resistance to the Kabul regime may yet spell defeat for Russia in Afghanistan. In the Middle East, while a Pax Americana is far from complete and the Palestine abscess continues to fester giving Russian imperialism ample scope to destabi­lize the region, the opposition of even hitherto pro-Russian Arab regimes like Iraq to the Russian-inspired invasion of North Yemen by South Yemen indicates the difficulties of Russian imperialism in this crucial area. Finally, in Africa, America’s economic weight and France’s (and soon Egypt’s) military intervention is and will con­tinue to be a formidable obstacle to new Russian initiatives. In Africa, the Kremlin’s foothold is far from secure anywhere. While the next few years will see new and bloody inter-imperialist confrontations in Asia, the Middle East and Africa, the response of American imperialism to the Russian onslaught has so far been generally crowned with success.

The Political Crisis of the Bourgeoisie

The economic collapse, in the face of which all palliatives have proven useless, the incredible sharpening of inter-imperialist antagonisms and the growing combativity of the proletariat have thrown the bourgeoisie into turmoil, and exacer­bated the divergences within its ranks. The bourgeoisie is incapable of achieving unity and coherence as a class; it is divided not only into a multiplicity of irreconcilable national factions but also into a number of different and competing factions within the frontiers of each national state. In the ascendant phase of capitalism, the divisions within each national bourgeoisie largely corresponded to the different types of capital engaged in the accumulation process (industrial capital, commercial capital, bank capital, land­lords etc), to the types of commodities produced (heavy industry, light industry, mining etc), or to the size of the capital (big, medium and small capitalists). In decadent capitalism, where state capitalism is a universal tendency, the bourgeois as an individual owner of a particular quantum of the global national capital is either expropriated by the state or through the gradual fusion of big capital and the state it merges and overlaps with the state bureaucracy. The result is that the individual bourgeois -- parti­cularly in its upper layers -- is no longer solely or even primarily interested in the profits of one particular company or the valorization of his personal capital; rather the interests of each bourgeois are increasingly bound up with the interests and profitability of the global national capital and its personification, the capitalist state.

However, the fact that the bourgeoisie of each national state undergoes an increasing homogeni­zation of its interests around the needs of the global national capital, expressed through the growing power of the totalitarian state apparatus, does not eliminate divergences and factions within the ruling class. Questions of how to interpret the needs of the national capital, the program or orientations which best express these needs, the precise way to assure the stability of the state, produce divisions within the bourgeoisie. Thus, at the present time, divisions occur in virtually every national faction of the bourgeoisie over:

-- the degree of statification (with the more anachronistic sectors of the bourgeoisie vainly trying to resist the advance of state capitalism);

-- the economic policies to pursue in the face of the crisis (inflation vs deflation, protectionism vs ‘free trade’) ;

-- which imperialist bloc provides the best framework for the defense of the national capital, or the degree of integration into the bloc to which a particular national state is bound;

-- which strata or classes of the population to support in order to try to constitute a mass base in support of the needs of the national capital, which mystifications are most appropriate (nationalist, religious, populist, ‘democratic’, racist, ‘socialist’).

While debates rage over each of these issues in the higher circles of the bureaucracy, the military and the great economic and financial entities in each national state, as we enter the 1980s in the beginning of a world-wide resurgence of class struggle, it is the containment of the proletariat that most preoccupies the bourgeoisie everywhere today. In the industrialized countries of the US bloc, while the left in power over the last several years has been the best vehicle for the state capitalist measures which the deepening of the economic crisis makes necessary and for the more thoroughgoing integration into the US bloc which the heightening of imperialist antagon­isms dictates, the right in power, too, is capable of implementing these policies. However, only the left has a real chance of containing an undefeated proletariat. This was the essential task of the left as it came to power, shared power or prepared to assume power in country after country on the crest of the wave of prole­tarian struggles that began in 1968 and lasted until 1972-74. In Portugal, Britain and Italy, for instance, where the violence of the working class shook the bourgeoisie to its very founda­tions, the left in power (or providing indispen­sable support for the government in the case of Italy) achieved remarkable success over the past few years in drastically reversing the balance between profits and wages to the benefit of capital, in imposing draconian austerity on the prole­tariat and in breaking the first violent response of the working class to the open crisis.

However, as this past winter’s wave of strikes which shattered the social contract in Britain clearly demonstrated, the left in power, or moderating its ‘proletarian’ rhetoric in quest of power, has by now alienated its worker base and lost the tenuous ideological hold over the prole­tariat which it briefly regained between 1972-78. A cure of opposition, during which time the left can ‘radicalize’ its language and once again appeal to combative workers in the name of ‘socialism’ and ‘proletarian revolution’ is now vital if the left is to even have a chance of fulfilling its indispensable role of containing and diverting the class struggle.

Today it is imperative for the bourgeoisie that the resurgence of class struggle find the left not in power but in opposition. It will be on the crest of this new wave of class struggle that a more ‘extreme’ left will come to power as the last rampart of capital. The eruption of the proletariat and the bourgeoisie’s preparations to meet it with the left in opposition irrefutably demonstrate the truth of Marxism’s understanding that the class struggle is the motor of history.

1 The so-called workers’ state, China is also groaning under the weight of this same economic crisis and it is the deepening of this crisis which constitutes the material basis for the incredible sharpening of the antagonisms which are pushing China and Russia towards war, and about which we have spoken in this text.

2 The need to compensate for the very low organic composition of capital by the state mobilization of all the reserves of human labor-power in order to try to match the output of the US bloc is the most important reason why the Russian bloc is not plagued also by mass unemployment.

3 The virtually all cases, the manner in which bourgeois economics statistically charts the course of the world economy, the very categories it uses, are at variance with the Marxist categories which alone make it possible to grasp the real laws of motion of the capitalist mode of production and the actual course of the economic crisis. As with all ideology, bourgeois economics distorts and veils the real conditions which it purports to study.

4 With the exception made for oil imports.

5 This is of course, also true of the vastly greater production of armaments by each country which is not traded.

6 While the American government will almost certainly stimulate the economy during the Presidential campaign in 1980, its effects will be extremely short-lived and will scarcely change the economic perspective we have traced.

7 This was the view of Vercesi tendency of the Gauche Communiste Internationale.

8 This disintegrative tendency is only partially counteracted by the formation of two mammoth imperialist blocs and the economic coordination imposed by the US and Russia on the industrialized countries of their blocs.

9 Though it must be remembered that the disintegrative, centrifugal tendencies which prevail in decadent capitalism make world unity of capital around pole of accumulation impossible.