Britain and the international situation (2nd Congress of World Revolution)

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The IInd Congress of the ICC section in Britain, World Revolution, took place in April this year. Because regular congresses are at the heart of the organization of revolutionaries, such events reveal the main preoccupations and tasks of revolutionaries. They allow the organization to take account of its previous work and draw up future perspectives. In particular they reveal that revolutionaries have no other purpose than to fulfill their responsibilities within the class that has produced them: to clarify “the line of march, the condi­tions, and the ultimate general results of the proletarian movement” (Marx and Engels).

In the main, the IInd Congress of WR, re­flected the attempt to build on the founda­tions of our activity laid at the Ist Congress of the entire ICC in its adoption of the platform and the awareness of the need for centralized, international work.1 In this sense, far from being a national affair, the congress simply expressed a moment in the international work of revolutionaries, which is the only scale of activity possible for a political organiza­tion of the proletariat.

In the context of the strengthening of WR’s work the congress affirmed the increased ability of World Revolution to intervene in the class in Britain. In particular the publication World Revolution now appears bi-monthly, and the congress adopted a resolution to proceed to a monthly regular­ity in 1978.

Other sessions of the congress took up dis­cussions which are animating the Current, and, to some extent, the revolutionary movement as a whole today. One, on the subject of confused groups, has originated in the need to better understand the actual process by which class consciousness is appropriated by the clearest elements of the proletariat today. The process is a painful one, fraught with mistakes and disorienta­tion, owing to the heterogeneous nature of the proletariat’s consciousness today, and the effects of all the limitations imposed on the class by the residues of the counter­revolutionary period. In understanding that the Current itself developed within this process, we must identify and win over those forces whether they are split offs from leftist groups, elements of degenera­ting communist tendencies, or products of the class struggle today, which are capable of moving towards revolutionary regroupment. The question of confused groups assumes all the more importance in view of the fact that a pole of regroupment is still being formed after the counter-revolutionary epoch eventually destroyed any organic continuity with the previous workers’ move­ment.

Another question, the state in the period of transition from capitalism to communism, was a vital subject for discussion at the congress, considering that the problem has not at all been “solved” by working class experience, unlike for example, the nature of the trade unions in decadent capitalism, which the proletariat has discovered time and again to be reactionary adjuncts of the capitalist state. Revolutionaries must therefore devote a large amount of their efforts to clarifying the nature of the ‘post-revolution’ phase of the proletarian struggle, basing their research as much as possible on the experience of the class, particularly that of the Russian Revolution. While only the working class in its prac­tical experience can resolve the problem of the transition period, the proletariat and its revolutionary minorities must theoretically prepare themselves today for this barely understood and formidable task of the future.

The text from the congress that we are presenting here is on the subject of the present situation, dealing with both the international and British situation. It is a contribution to one of the ongoing tasks of World Revolution and the whole ICC -- to continually analyse the present period in relation to the general tendencies of decadent capitalism. This has no academic motive, but is an attempt to make concrete, in our intervention in the working class, the context of the basic political orienta­tion we stand for -- the movement of the world situation towards the alternative of either war or revolution, the impotence of the bourgeoisie to deal with the crisis on an economic or a political level, the nature of the mystifications, particularly those of the left, hurled at the working class, and the stages of the development of the proletarian struggle towards revolution. One of the more important aspects of the text is the attempt to see the British situation in the framework of the inter­national arena, referring to the above tendencies, which have already been dis­cussed in previous issues of the International Review.

Our intention is always to make our dis­sections of the evolution of the present situation as clear and precise as possible, remembering that they are a guide to action for the proletariat. While in many respects this today means a call to revolutionaries to understand the urgency of their tasks and the need to redouble their efforts, tomorrow our analyses will be a practical weapon wielded by the class as it directly influences history in a decisive way.

International situation

1. In the fourteen years from 1953-1967 inflation, in the eleven leading industrial countries of the world, averaged 2% per year. In the two years from 1973-1975 it averaged 13% per year. During the 1960s world industrial production grew by 6-7% per annum. But by 1974 global production had stagnated, and in 1975 it fell by 10%. The volume of world trade from 1964-1974 increased every year by 9% on average, but it too fell n 1975 -- by 6%. As a consequence of these factors unemployment has risen to an official figure of 5.5% of the developed world’s labour force, over double the rate during the post-war ‘boom’.

These are some of the key figures which high­light the gravity of the economic crisis which has developed since 1968. It is a crisis emanating from the recurrence of the saturation of the world market, marking the definite end of the reconstruction period, and hailing once again the mortality of the capitalist system.

2. In 1976 and in the beginning months of 1977 we have seen the so-called recovery, which was supposed to have dealt with the recession of 1975, splutter to a virtual halt. The ‘recovery’ was founded on a shaky basis of stock-building, and a growth in consumer spending, and thus has failed to significantly affect any of the main indicators of the economic crisis. The stagnation of world trade has not really been alleviated, and industrial growth has leveled out, with the modest target of 5% per year set by the OECD in July, proving to be over-optimistic. A 3.5% growth rate is now forecast for 1977. Most importantly no real inroads have been made into the classic features of capitalist crisis: the under-utilization of the productive forces, and of labour power. On the con­trary, even during the latest ‘recovery’ a rationalization process is occurring throughout the economy, with costs of labour and production being cut back as far as possible.

3. It is more and more ridiculous to sup­pose that the Keynesian policies, designed to deal with the problems of the economy in the recent past, can solve today’s crisis. On the one hand the bourgeoisie is now terrified at the prospect of reflation: stimulating production by huge deficit financing, which without an expanding world market can only lead to even more disastrous inflation than exists now. But on the other hand deflation, by means of the restriction of credit, is equally alarming to the ruling class. The capitalist economy can only function with the goal of profitability in sight. The promise of little or no expan­sion can only lead to less and less ‘business confidence’, falling investment, and, as a result, the further bankruptcy of the system. Steering a course between these two evils is becoming more and more difficult as the depth of the crisis reduces the options open to the bourgeoisie.

4. A reversion to protectionism, through the means of the further statification of each national capital, that is policies which in the end lead to generalized war, are in the long term the only way forward for the bourgeoisie. The US will attempt to preserve the cohesion of the Western bloc, which a policy of autarky within each nation would threaten, for as long as possible. It seems that the US will attempt to use the relative strength of the German and Japan­ese economies to prop up the weaker capitals, (Britain, Italy, Spain, etc) which as a cor­ollary, will further strengthen American capital itself. Already calls are being made for the Germans and Japanese to expand their home markets for the sake of weaker countries’ exports. Talks have also begun concerning the formation of a ‘creditor’s club’ to bail out the weaker economies, financed by the stronger capitals. But even this strategy will sooner or later be doomed to failure. The trade surplus of the stronger economies, amounting to $4.5 billion in 1976, cannot soak up the deficit of the weaker ones, which reached -$27 billion in 1976. (This is not to speak of the deficit of the ‘Third World’ which in 1976 reached a figure of -$24 billion, or that of the Eastern bloc, which has accumu­lated a debt of -$482 billion!)

5. The deepening of the economic crisis will continue to exacerbate inter-imperia­list rivalries between the Russian and American axes. On a secondary level the contradictions between the interests of each nation and those of the bloc, and be­tween the progressive and backward sectors within each economy, will further heighten. The most important consequence of the crisis will be the greater deterioration of the class equilibrium. But the still existing quiet in the class struggle obliges us for the moment to concentrate on the former two factors.

6. In the sphere of international politics we have recently seen the build-up of ten­sions in Southern Africa. The visits of Castro and Russian President Podgorny to the ‘front-line’ states of Southern Africa, the arms aid which goes hand in hand with these visits, and the undoubtedly Russian-inspired invasion of Zaire, indicate the manoeuvring of the USSR in this region of the world. Its manoeuvring is characterized by an attempt to contest America’s economic and political superiority by military means and by de-stabilizing the existing situation. On the other hand the USA is attempting to hold onto its client states of Rhodesia and South Africa by maintaining a stable situ­ation in these countries, using economic and political pressure to bring about a gradual transition to black majority rule. This must be the meaning of the recent placement of a complete embargo on Rhodesian exports by the US, and the US-inspired United Nations resolution against apartheid in South Africa. But despite the manoeuv­ring of both imperialist blocs in this continent, the situation remains in the balance at the present time.

The importance attached to Southern Africa by both America and Russia, as well as to East Africa and the Middle East, rather than S.E. Asia, shows the intensification of inter-imperialist struggle in areas which will be crucial in a third round of global imperialist carnage.

7. All the talk about strategic arms limi­tation and the danger of the proliferation of nuclear power, which is currently fash­ionable amongst the bourgeoisie, cannot hide the ever-increasing volume and sophis­tication of nuclear armaments held and developed by the super powers. Carter’s cynical defence of ‘human rights’ in the Eastern bloc is nothing but the opening shot in a new phase of cold war and an escape route by means of which an arms agreement with the Russians can be avoided. Brezhnev has already warned the US about interfering in Russian affairs and claimed that Carter is endangering the so-called detente. Considering that the US now requires the left as an ally in Western Europe the cause of ‘human rights’, as opposed to ‘anti-communism’, is the most appropriate in its propaganda war against Russia.

Russia wants to avoid the political pressure which its economic subservience to the West is already producing. But even if the USSR succeeded in repaying its enormous debt to the West, this would only accelerate its own economic crisis, and compel it towards further military hostility with America.

8. The attempt of the US bloc to strengthen itself in Europe is continuing. We have already implied that America will increa­singly have an economic stranglehold over its European satellites. This permits it in large measure to supervise the political teams which are obliged to put the necessary economic policies into effect. However, this development has led to extreme tensions between US interests and those of certain European countries.

In the face of the economic crisis each national capital requires the most energe­tic move towards the statification of soc­iety. This is in order not only to centra­lize and further concentrate the national capital, but also to facilitate the greater exploitation and mystification of the working class. The latter purpose is aided by the fact that the political factions favouring state capitalism the most are usually left-wing teams spewing out ‘socialist’ rhetoric. However, as the recent histories of Spain, Portugal and Italy have shown, some of these left-wing teams are distrusted by the US bloc, and by strong sections of the local bourgeoisie. The CPs which in these countries are the strongest parties of the left, threaten backward sectors of the bourgeoisie linked to the US, and have an affinity (although this has been toned down) to the Eastern bloc in their international orientation. Thus in these countries there is an extreme political crisis mainly because a solution which could satisfy both the interests of the bloc and the national capital has yet to be satisfactorily found. This crisis intensifies as the economic situation deteriorates in these countries and the class struggle promises to develop. The huge student revolt in Italy is a symptom of the decomposition of both the economic and political situation in this country. But despite the political crisis in Western Europe the US is increasingly aware that only the left can hope to guarantee social peace and economic cohesion -- and thus will be the most adequate instrument of its heg­emony over Europe.

9. By contrast, the victory of the left coalition in the French municipal elections, which anticipates its victory in the general election in 1978, seems to point the way to the most adequate solution for both the national bourgeoisie and the entire Ameri­can axis. This is because Mitterand’s Socialist Party, the dominant force in the coalition, appears to be Atlanticist; would probably enact a gradual statification of society; and has the potential ideological apparel to mystify the working class.

10. In the Eastern bloc the attempt of the Russian bourgeoisie to maintain the internal cohesion of its satellites, has met with some problems in the recent year. In these countries, the fact that economic and poli­tical life has already been engulfed by the state means that there is very little room for the bourgeoisie to manoeuvre against today’s conjunctural crisis. The inability of the Polish bourgeoisie, for instance, to persuade the working class to accept brutal price rises in 1976, indicates the extreme rigidity of Eastern bloc regimes, and the deep political crisis which they must suffer as a result. In Czechoslovakia the movement of dissident party bureaucrats and leftists is giving the faction of the bourgeoisie in power severe headaches. ‘Democracy’, which they advocate, would if granted undoubtedly lead to the break-up of the remaining stability of the state apparatus and of the Eastern bloc as a whole. The fact that the Charter 77 movement coincides with Western propaganda about civil liberties, adds to the danger of this dissident bour­geois movement for the interests of the Eastern bloc. The obvious inability of the Czech ruling class to make effective use of this dissident stratum (which sees itself as a weapon to contain proletarian anger) to mystify the class, highlights the poli­tical bankruptcy of the Eastern bloc.

11. The charade of bourgeois democracy in the recent Pakistani and Indian elections points to the extreme weakness of the bour­geoisie in the ‘Third World’ as it is severely shaken by the crisis. While Bhutto’s Pakistani People’s Party and Gandhi’s Congress Party are really the most suitable forces for governmental rule, the strength of the less politically viable sectors of the bourgeoisie, which consti­tuted the opposition in these two countries, was such that in the case of Pakistan, it could not be kept out of office or neutra­lized without the electoral process being rigged and manipulated, and the ruling faction resorting to armed force to preserve its power. In India the fact the opposition did achieve office must mean that a period of political dislocation is on the agenda for this country, and a swing back in the long term to the reinforcement of the state, particularly the army, will become essential as a result.

12. The events in China over the last year also bring out the brittleness of ‘Third World’ countries and of ‘socialist’ coun­tries. The elimination of the more backward sector of the Chinese bourgeoisie, the radicals, who supported national indepen­dence in economic, social, and military life, was not achieved without violent up­heavals within the party apparatus (witness the wave of executions now going on), nor without the use of the army to put down rebellion throughout the country. The in­ability of the Chinese bourgeoisie to settle its differences in a stable manner, which will continue despite the victory of the ‘progressive’, pro-Western moderates, points to the certainty of extreme convulsions in the political apparatus as the crisis deepens and the working class takes the path of open struggle again.

The deeper integration of China and India into the Western bloc, as a result of re­cent developments, aggravates the reversals the USSR is suffering on the world arena.

The British situation

1. Britain does not face fundamentally dif­ferent problems to those faced by other weak European capitals, although its poli­tical crisis is less acute than some, and its economic problems are of a somewhat unique origin. Once the dominant capitalist power in the world, but eliminated as such by the Ist and Ilnd World Wars, Britain has lost its colonies, its military (parti­cularly naval) strength, and its position as usurer of world production. Its GNP only accounts today for about 5-6% of the total output of the OECD countries. The hopelessly low productivity of its capital, a result of the completion of its industri­alization at the beginning of the century, is expressed by the fact that today the average age of British plant (34 years) is three times that of the Japanese! These factors help to explain the precipitous decline of Britain’s competitive position on the world market.

2. Since 1972 British capital has not had a positive trade balance. By the autumn of 1976, following a severe ‘run on the pound’, sterling had lost 44% of its pre-1967 value. The Chancellor of the Exchequer, Denis Healey, had to appeal to the US bloc, through the International Monetary Fund, for a $3.9 billion loan to preserve Britain’s economic life.

Inevitably conditions came with this loan; conditions which seem to express an econo­mic and political strategy in the interests of the Western bloc as a whole. This stra­tegy, in turn, is a reflection of the pro­cess of internal strengthening of the im­perialist bloc. On the economic level a deflationary policy was ‘advised’, invol­ving:

-- a savage reduction in government spending which had resulted in a £11 billion annual deficit in this department.

-- a credit squeeze to attempt to cut the money supply and contribute with the reduction in government spending to arresting Britain’s ‘above average’ inflation rate.

-- a rejection of import controls and protectionism in general. The stra­tegy embracing these elements was clearly designed to enforce an accep­tance of the continuing deterioration of Britain’s competitive position on the world market, and preserve an important link in Europe’s capitalist chain.

3. On the political level the centre/left government of Callaghan and Healey was given implicit support because it would, as well as implementing the economic policies already mentioned:

-- maintain its commitment to the Western bloc through participation in NATO with its important nuclear capability, and its army in West Germany.

-- maintain its commitment to the EEC.

-- continue a policy of the gradual fusion of the weakest elements of private capital with the state, without upset­ting the mixed economy, the parlia­mentary process, or American interests in British capital.

-- maintain social order, through its alliance with the unions and the mysti­fication of the Social Contract, while continuing to slash workers’ consump­tion and living standards.

However, such an economic and political orientation does not necessarily coincide with the strictly national interests of the British bourgeoisie which, in the long term, must proceed to a thoroughly stati­fied economy behind which the working class can be mobilized by a left-wing governmental team.

4. The contradictions between the interests of the imperialist bloc and the nation arise from the immense problems confronting the Callaghan governmental team today. Defla­tionary policies imposed by the IMF are not significantly improving Britain’s economic situation, which is likely to worsen in 1977 as the full effects of the devaluation of the pound are felt. The measures to centralize the economy and political life of the country in the hands of the state are not proceeding very rapidly. Finally, the class equilibrium and the Social Contract on which it is based are beginning to crack.

The moves the present Labour Government has made to nationalize certain sectors of industry and eliminate parasitical elements of the economic and political apparatus, relatively mild though they have been, have met with many obstacles. The Shipbuilding Nationalization Bill was held up by opposi­tion in the House of Lords and has only been passed now that the Tories have ensured that the profitable ship-repairing industry re­mains in private hands. The Bullock Report (an ingenious plan to statify industry with the help of the unions) has been effectively shelved after furious opposi­tion to it from traditional sectors of the bourgeoisie and the right-wing political parties. Measures to curtail the conserva­tive activities of the House of Lords, and nationalize the banks, are nowhere near being implemented. The frustration of these measures is the result not only of the mod­erate nature of the Labour Government but also of the electoral strength of the more backward sectors of the bourgeoisie. Now the Labour majority in parliament has gone, and the government has been obliged to enter into a quasi-coalition with the right-wing Liberal Party. This will no doubt further retard a strategy of stratification.

The Labour Government and its representa­tives entrenched in the working class in the shape of the trade unions, are finding it increasingly difficult to uphold the Social Contract. The seamen already showed their hostility to it in August of last year. The miners and railwaymen are also promising to reject it in the future. The carworkers, particularly at British Leyland, the giant, state-subsidized vehicle corpora­tion, have frequently struck against the effects of the contract. While the osten­sible reason for the recent four-week stoppage by the toolmakers at British Leyland was for the maintenance of differ­entials and separate negotiating rights, its underlying cause was the impoverishment the wage freeze is forcing on the whole class. Although the stoppage was contained by the shop stewards, who prevented the strike from generalizing and escaping its sectional preoccupations, the refusal of the workers to go back for the good of the national interest (British Leyland symbolizes the weakness of British capital), despite the open alliance of employers, unions, and the state, shows the capacity for struggle which the class promises for the future.

5. All the major unions have been obliged, sensing the angry mood of the class, to proclaim opposition to, or doubt about, the success of a third phase of the Social Contract and pay restraint. The TUC as a whole refused to commit itself to the third phase until it could see the content of the Chancellor’s budget. But considering that the Social Contract is a vital pillar of Britain’s economic survival it is essen­tial that it continues. But the bourgeoisie is already aware that concessions to certain groups of workers, and a flexible applica­tion of the Social Contract in future is also essential if there is to be any class peace at all.

6. The three basic issues confronting the British bourgeoisie today (the need to accelerate the domination of the state over society, the need to eliminate or neutralize conservative portion of the economic and political fabric of the country, and the need to mystify the working class) can only be dealt with in the long term by a move to the left of the present government. Only the left of the Labour Party has the resolu­tion to take the necessary measures of sta­tification (remember the Lefts in the present Cabinet, Tony Benn and Michael Foot, were fervent advocates of the Bullock Report). Only the Labour Left has no qualms about dealing with stubbornly backward sectors of the bourgeoisie. Finally and most importan­tly it is the left which is the best placed to derail the class struggle which is brew­ing today. The Labour Left’s policies have the greatest echo in the trade unions, and are the best able to present the interests of the nation as identical with the interests of ‘socialism’ and the working class.

7. However, the Labour Left by no means has the confidence of the American bloc, because:

-- it has a plank for the reduction of defence expenditure and commitment to NATO.

-- it defends a policy of autarky (import controls, etc) and withdrawal from the EEC.

-- its far-reaching plans for ‘public’ ownership would threaten specific US interests and undermine politically those factions of the British bourgeoi­sie most favourable to the US.

-- its close ties with the CP and some Trotskyist groups could influence it in a pro-Russian orientation in the international arena.

But despite these large obstacles the Labour Left is still the only bourgeois faction which has the long-term perspective for sus­taining capitalist order in Britain. For this reason, whatever the difficulties which exist today, a compromise between the US bloc and the Labour Left could legiti­mize the latter for power as a long range perspective.

8. The adoption of the recent quasi-coalition with the Liberals, the first move­ment in this direction since the war, is a sign of the political crisis which will more and more affect even the British bour­geoisie. In the short term the ‘deal’ with the Liberals means a swing to the right and an increase in the difficulty of slowly pre­paring a government team of the Labour Left. It is therefore likely that the latter will come to power in the future as a response to the resurgence of the class struggle and the impotence of the present team in the face of it. However, at the present time, and for the immediate future, the Callaghan regime is the most apt governmental faction for the bourgeoisie. The Lib-Lab pact is a sign that despite the electoral unpopular­ity of the government, the bourgeoisie understands the necessity of keeping it in power.

9. The situation in Northern Ireland is undoubtedly a barrier to efforts of the British bourgeoisie to face up to the crisis. Not only the rival terrorist groups, but also the parliamentary parties, resist the centralized power of the British state.

The futile terrorist campaigns severely curtail production in the North, and the continued presence of the British Army is a drain on Britain’s limited military re­sources which have to be stretched to ful­fill its NATO obligations.

The exposure of the ‘dirty tricks’ carried out by the army in Northern Ireland and President Carter’s promise to halt money going from the US to the IRA seems to show that the bourgeoisie is thinking about a move to withdraw or scale down the presence of British troops in Northern Ireland.

Class struggle

1. The attacks on the wages and living standards of the class are the most impor­tant ‘solutions’ of the bourgeoisie to the crisis, because firstly, it’s an essential means for reducing the price of commodities to be sold on the market and secondly, it helps to prepare the class for sacrifices to the nation, and in the end, for mobili­zation for war.

The first wave of world class struggle since 1968 was an elemental response by the proletariat to encroachments of the crisis on its living standards. It caught the left parties of capital and the unions by sur­prise, and temporarily went beyond them. Since then a definite recuperation of the ground lost has been achieved by the bourgeoisie, in most cases using those implacable enemies of the class. Left teams in power have to a certain degree persuaded the class to accept austerity for the good of the country, and the trade unions have faithfully managed to keep the class struggle within acceptable limits. This has led to a certain reflux during which the class has been obliged to deepen its awareness of the situation con­fronting it. The lull is therefore partly a response to the implicit perception that economistic struggles are less and less fruitful, and only by generalizing and deepening the struggle can it develop positively. At the same time such a course involves today a conscious confrontation with the left. The sense of the immensity of such a step and its implications -- the beginning of a veritable class war -- has kept the class in a passive, but not defea­ted condition.

The bourgeoisie for the future, despite its adoption of the left, has exhausted many of the options open to it when confronting the proletariat. Because of the deepening of the crisis it is able to manoeuvre much less, and, once the left card has been played, it will have used its most important source of mystification.

2. The steady exacerbation of the world crisis ensures that huge class confrontations are on the agenda in the future. The class struggle in Poland and Spain in 1976, the upsurge in Egypt and the strikes in Israel this year and the activity of the class in Western Europe, are signs of a re-emergence of the proletariat after the relative lull since 1972. The responses of the bourgeoisie to the crisis; its inter-imper­ialist conflicts; the attempts to statify each national capital; and all its political games, will be interrupted by the renewed class struggle. The tendency towards capi­talist barbarism which seems to be most evident at the moment will be eclipsed as the solution of socialism becomes a more concrete possibility.

Revolutionaries must prepare today for the second phase of class struggle since the end of the counter-revolutionary epoch.

1 See the texts in the International Review, no. 5.

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