The aberrations of "democratic" capitalism

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Whether for or against "globalisation", whether reassuring or alarming, all the commentaries on the international situation and its perspectives are unanimous on one point: democracy is the only system which will allow society to progress and prosper, and capitalism is the final form of humanity's social, political, and economic organisation. "2000 was not really the first year of the 21st century. In substantive terms, the 21st century began in 1991 with the fall of Soviet communism, the collapse of the bipolar order and the rise of global capitalism as the uncontested ideology of our age" ("Ideas: No, Economics Isn't King", F. Zakaria, Newsweek Jan. 2001).

But what about the spread of local wars and massacres? What about the undeniable spread of poverty throughout the world? Why the rise in unemployment and the degradation of the proletariat's living conditions? How are we to understand the famines, the reappearance of epidemics, the growing corruption and insecurity? Why the so-called "natural disasters", and what about the threat hanging over the planet's environment? Where do all these catastrophes come from, if not from the survival of capitalism, of those social and production relations which care not a jot for human needs, and have only one aim: the pursuit of profit: "not just the pursuit of tangible profit, but of ever-growing profit" (Rosa Luxemburg, "Critique of the critiques: what the epigones have done to marxist theory", published with L'accumulation du capital, Maspéro).

There are a whole series of attempts to explain this situation

"Globalisation" and the fairytale of "democracy" to hide capitalism's chaos

From liberal capitalism's supporters, the usual answer is that all this is nothing but the exaggerations of a few Cassandras, refusing to recognise the benefits of the present system. The disastrous consequences of capitalism's survival are the normal price the normal price to pay in this social system, the inevitable result of a law of nature which determines the elimination of the weak, and salvation only for the strong.

For the left wing of the bourgeoisie's political apparatus - the social-democrats, the one-time Stalinists, the ecologists - all these scourges of the modern world at the dawn of the 21st century are real enough, but seen above all as excesses or imperfections, the consequences of errors committed by rulers too eager for gain, too unconcerned for the general welfare of all. They are the result of "uncontrolled" capitalism. What is needed, then, is control: well thought out regulations, organised by the appropriate governments, states, local, national, or international bodies (by the famous NGOs - non-governmental organisations - for example). This would be enough to eradicate the system's devastating effects, to make it a real organisation of "citizens", a haven of peace and prosperity for all. This is the conception of the "anti-globalisation" movement, where we also find leftist currents who tone down their traditional revolutionary phrase-mongering to make a radical contribution to the concert in defence of democracy. It is the case with all kinds of Trotskyists, ex-Maoists, anarchists or libertarians: all the more or: all the more or less defrocked currents of the socialist, communist, and libertarian leftism of the 1970s and 80s. Irrespective of their differences, everybody today, from the extreme right to the extreme left, defends democracy.

Those who once contested the parliamentary circus have revealed their true nature as ardent defenders of the bourgeois democracy they used to decry. Indeed, many are now at the helm of state, in positions of responsibility in honourable institutions, organisms, and enterprises, thoroughly integrated into the system. Those who have kept up a more or less radical opposition to the governments and institutions[i], denounce the system's errors and excesses, but fundamentally they never pose the question of its real nature.

One of the best examples of this ideology is regularly offered us by the French monthly Le Monde Diplomatique. In its January 2001 issue, we are told that "The new century is beginning in Porto Alegre [the town in Brazil where the 1st World Social Forum is being held at the end of January, in a sort of answer to the Davos meeting]. All those who, in one way or another, contest or criticise neo-liberal globalisation will meet there (...) Not to prhere (...) Not to protest, as at Seattle, Washington, Prague or elsewhere, against the injustice, inequality, and disasters that the excesses of neo-liberalism are causing around the world. But to try, this time in a positive and constructive spirit, to propose a theoretical and practical framework which would make it possible to envisage a new kind of globalisation, and to declare that another world, with more solidarity and less inhumanity, is possible[ii].

In the same issue, we find an article by Toni Negri, the leading light of Potere Operaio[iii], who develops the idea that today there is no longer any imperialism, but rather a capitalist "Empire"!? The words seem faithful to the "class struggle" and "the battle of the exploited against the power of capital". But this is only in appearance. Above all, the article claims to invent a sort of new perspective for the class struggle. This leads it straight onto the tired old theme of the necessary defence of democracy, instead of "revolution"; the identification of citizens instead of the class entity of the proletariathe proletariat. "These struggles demand, apart from a guaranteed wage, a new expression of democracy in the control of the political conditions of the reproduction of life (...) most of these ideas were born during the Parisian demonstrations of the winter of 1995, the 'Paris Commune in the snow' [sic!!] which exalted (...) the subversive self-recognition of the citizens of the great towns".

Whatever the subjective intentions of these protagonists of the contestation of the capitalist system, these defenders of the democratic perspective, all this serves objectively, first and foremost, to maintain illusions in the possibility of reforming this system, or of transforming it gradually.

What the working class needs to understand, against these old reformist ideas dressed up in more fashionable guise, is that imperialism, this "highest stage of capitalism" as Lenin said, still reigns supreme. That it affects "every state, from the greatest to the smallest", as Rosa Luxemburg said. That it underlies the proliferation of local wars and massacres all over the world. Faced with a multitude of questions as to the insanity and absurdity of the world today, with the absence of any perspective which colours the whole society, faced with the individaced with the individualist attitude of "look after number one", the decomposition of the social fabric, the disintegration of collective solidarity, the working class needs to understand that capitalism's perspective is not a world of citizens living in peace, abundance, and prosperity under a good democracy. It needs to understand that the present society is and will remain a class society, a system of exploitation, whose motive force is profit and whose functioning obeys the dictates of capital accumulation. That democracy is bourgeois democracy, the most developed form of the dictatorship of the capitalist class.

What has changed since 1991 is not that capitalism has triumphed and imposed itself as the only viable system possible. What has changed is that the capitalist and imperialist regime in the Soviet bloc has collapsed under the blows of the economic crisis, and faced with the military pressure of its enemy, the Western bloc. What has changed is the imperialist configuration which has dominated the planet since World War II. It was not communism that collapsed in the East, or even a system in transition towards communism. Real communism, which has never yet existed, remains on the historical agenda. It can only be created by the revolutionary overhe revolutionary overthrow of capitalist rule by the international working class. This is the only alternative to what capitalism's survival promises us: a plunge into indescribable chaos, which could eventually lead to humanity's definitive destruction.

The "new economy" takes a dive, the crisis continues

The Year 2000 celebrations were held under the auspices of "new economy" euphoria. The year 2001 starts with a serious concern for world capitalism's economic health. The new and prodigious profits we were promised never turned up. On the contrary, after a year of trip-ups and disillusionment, the champions of "e-business" and the "net-economy" have produced nothing but bankruptcies and unemployment, in a context of widespread gloom. A few examples: "As the new economy has cooled, there has been a steady drumbeat of layoff announcements. More than 36,000 dotcom employees were cut in the second half of last year, including some 10,000 last month" (Time, January 10, 2001, "This Time It's Different").

We have already analysed the situation of the economic crisis several times in these columns[iv]. We will not return in detail to theurn in detail to these analyses, whose conclusions are once again being confirmed today. Last December, two major reviews of the international press were headlined "Chaos"[v] and "A hard landing?"[vi]. Whatever its reassuring, grandiloquent talk, the bourgeoisie needs to the truth about the profit it can expect from investment. And there is no getting away from the fact that the "new economy" is nothing but an avatar of the "old economy", in other words a product not of growth, but of the capitalist economy's crisis. The development of telecommunications via the Internet is not the "revolution" we have been promised. The widespread use of the Internet, both for commerce and financial transactions, as well as inside companies and administrations, changes nothing in the laws of capital accumulation, which demand profitability, net profit, and market competitiveness.

As with any other technical innovation, the competitive advantage gained from the use of the Internet disappears very quickly as soon as its use becomes generalised. Moreover, in the domain of electronic transactions ronic transactions and telecommunications, for the technique to work it is necessary for every company to be connected, so that the innovation of the Internet itself puts an end to the advantage that it is supposed to confer!

At first, the great Internet "technology revolution" was supposed to allow a colossal development of the "B2C" (ie "Business to Consumer" - shopping on the Internet) model. In fact, this is nothing but looking up electronic catalogues and placing orders over the Internet rather than by post. Some revolution! B2C was soon abandoned in favour of "B2B" ("Business to Business" - electronic transactions between companies). The first "model" counted on the profits to be made from catalogue shopping by e-mail, whose profitability is limited because it is essentially directed towards household consumption. The second was supposed to put companies directly in touch with each other, and the gains were supposed to come from two "outlets". On the one hand, companies could make profits - or rather reduce their costs - by eliminating intermediaries from their relationships. Already, this is not a real outlet but merely a reduction in costs! On the other hand, this was supposed to open a fabulous "market", made up of the need to provide all the neco provide all the necessary services over the Internet (directories, lists, catalogues, computer software, payment processing, etc); which in fact meant that... the intermediaries who had just been kicked out the door came straight back in through the window. Thank you Internet! There again, there is no getting away from the facts that the profits simply didn't turn up. These economic "models" were quickly abandoned: 98% of the last three years' start-ups, these companies of the new economy supposed to exemplify the glorious future of capitalist development, have gone bust. In those that have survived, there is disenchantment among the workers, who were once so euphoric at their (virtual!) enrichment by generous stock options that they worked round the clock. Significantly, the trade unions, which until lately ignored this sector of the work force, are now arriving in force. Not that they have suddenly become defenders of the working class[vii]. Rather it is because it would be dangerous to allow any reflection to develop amongst workers so abruptly disenchanted.

This ideology of the "net-economy" is a clear illustration of the dead end in which the bourgeois economy finds itself, of the historic decline in capioric decline in capitalist relations of production. According to this ideology, profit was henceforth supposed to be driven by the development of trade, and no longer directly by the development of production. In a sense, the merchant had become more important than the producer. But this ideology is nothing but an aspiration to return to the mercantile capitalism which existed at the end... of the Middle Ages. At that time, capitalism was beginning to develop thanks to the blossoming of commerce, which broke down the barriers of feudal relations of production that restricted the productive forces within the straitjacket of serfdom. Today, it is more than a century since capitalism completely conquered the world market, and world production is gorged with a generalised overproduction unable to find adequate outlets. Capitalism's salvation will not come from a new blossoming of trade, which is completely impossible in today's historic conditions.

In this article, we have only considered the "net-economy", because its collapse during 2000 was the aspect of the capitalist crisis to receive the greatest media attention. But as the article in Time goes on to say "the firings went well beyond dotcomland. There were more than 480,000 layoffs through November. General Motors is laying off 15,000 workers with the corkers with the closing of Oldsmobile. Whirlpool is trimming 6,300 workers; Aetna is letting go 5,000". Indeed, 2001 has begun with a considerable acceleration in the crisis. In the USA, Alan Greenspan, head of the Federal Reserve, has had to adopt emergency measures to try to banish the spectre of recession. The "new economy" is long gone, and the crisis of the "old economy" continues its inexorable advance. Gigantic debts at every level, ever-increasing attacks on working class living conditions internationally, inability to integrate the growing masses of unemployed into capitalist relations of production, etc: these are the fundamental consequences of the capitalist economy. States, central banks, stock exchanges, the IMF, all the financial and banking institutions and all the "actors" of world politics in general are try to regulate the chaotic functioning of this casino economy[viii], but facts are stubborn and capitalism's laws always end up imposing their rule.

Just as in the economic domain, where differences of language only serve to hide capitalism's historic decline and the depth of the crisis, in the imperialist domain, so all the talk about peace only hides a growing chaos ans a growing chaos and antagonisms proliferating at every level. The present situation in the Middle East is a clear illustration.

Peace at a dead end in the Middle East

By the time this International Review is published, the plan that Clinton has been trying to push through at any cost will have remained a dead letter, as forecast.

The protagonists of the “peace process” do not themselves know how to deal with the situation. Each is trying to defend his positions without any of them being capable of proposing a stable and viable way out of the endemic warfare dragging on in the region. The Israeli state is determined to give up as little as possible of its prerogatives, while the Palestinian Authority under Arafat cannot accept anything that would look as if it were abandoning its ambitions.

Israel is defending a position of strength gained since its foundation in 1947, through several wars against its Arab neighbours (Jordan, Syria, Lebanon, Egypt), and with the unfailing support of the United States. Thanks to its role as bastion of the Western imperialist bloc's resistance to the 1950s offensive by the Russian imperialist bloc, via the Arab states that had declared allegiance to the USSR, Israel has won a position as regional policeman which it is not ready to give up in a hurry.

But since the collapse of the Russian imperialist bloc ten years ago, the situation has changed. The United States has modified the orientation of its policy towards the Middle East. The 1991 Gulf War aimed to impose the recognition of the USA's world super-power status, to discourage its allies in the Western bloc - Britain, France, but above all Germany - from leaving the orbit of their overbearing godfather. The discipline of the bloc was no longer so easily tolerated once the threat of the opposing bloc had disappeared. But the Gulf War's second objective was to impose a total US control on the Middle East.

When the world was divided into two great imperialist blocs, the US could tolerate its allies occupying influential positions on the imperialist scene in certain regions of the world. It could even delegate to some of them a foreign policy which, though it sometimes opposed American interests, was always obliged to remain within the orbit of the Western bloc. In the Middle East, Britain could thus have a preponderant influence in Kuwait and certain Gulf Emirates, France in Lebanon and Syria, Germany and France in Iraq, etc. In 1991, the Gulf War gave the signal that the US intended to take complete control of the enforcement of the pax Americana. The Madrid conference in 1991, then the Oslo ne991, then the Oslo negotiations at the beginning of 1993 were to lead to the signature of the Israeli-Palestinian declaration of principles in Washington in September 1993, under the sole authority of the US, without any help from its old allies. In Cairo in May 1994, Arafat and Rabin signed the agreement on the autonomy of Gaza and Jericho, and the Israeli army began its withdrawal, to allow Yasser Arafat's triumphant arrival in Gaza in July 1994.

But this turn of events caused a significant fraction of the Israeli bourgeoisie to break with US policy, for the first time in the country's short history. In November 1995, Rabin was assassinated by a Jewish “extremist”. The elections that followed brought the Likud party led by Benjamin Netanyahu to power, and the new government began to be a serious hindrance to the plans of American diplomacy. The US took things in hand with the return to power of the Labour Party, with Ehud Barak as Prime Minister, and this led to the Sharm-el-Sheikh agreement between Arafat and Barak in September 1999. Nonetheless, the July 2000 Camp David summit, which was supposed to crown the USA's ability to impose a peace settlement on the Middle East, fell apart and ended without agreement. During this episode, French policy was an open attempt to sabotage the policy of its American ex-ally - whican ex-ally - which the latter moreover openly denounced as such. In Israel itself, resistance to the peace process returned to the fore in September 2000, with the provocative visit to the esplanade of the el-Aqsa mosque by Ariel Sharon, a long-standing hawk of the Likud party; this was to be the signal for new and violent confrontations, which spread rapidly through the West Bank and the Gaza Strip. In October, a new summit at Sharm-el-Sheikh was supposed to put an end to the violence, create a commission of enquiry, and restart the negotiations. It had no effect on the ground, where the Intifada and the repression continued.

The situation today is thus not the same as it was during the Six Day war of 1967, or the Yom Kippur war of 1973, when the Israeli army directly confronted the armies of the Arab states, within which were included units of the various Palestinian liberation movements. Nor is it the same as during the 1982 war, when Israel invaded the south Lebanon and encouraged the massacres (more than 20,000 dead in a few days) perpetrated by its allies in the Christian militias. Then, the situation was still dominated by the fundamental division between the two great imperialist blocs, whatever the secondary divisions that might exist within each one. And even if Yasser Arafat, ever since his first appearance at the tst appearance at the tribune of the United Nations in 1976, had been trying to attract American diplomatic support, in US eyes he remained forever suspect of conniving with the USSR.

Today, there is division everywhere. The Israeli bourgeoisie is no longer unswervingly loyal to the US. During the 1991 Gulf War, a significant fraction, especially in the army, protested at the Americans' ban on Israeli counter-attacks against Iraqi missiles. For the Israeli army, the most operationally effective in the region, the humiliation of being forced to remain passive and rely on the US High Command for its defence, was a bitter pill to swallow. The “peace process”, which virtually put Israel and the Palestinians on an equal footing, forced the Israeli army to withdraw from the south Lebanon, and envisaged the abandonment of the Golan Heights, was not at all to the taste of the most “radical” fraction of the Israeli bourgeoisie. Nor was this “peace process” easy for Barak's Labour Party to accept. The Labour Party is closer than Likud to the United States, and above all has a more realistic long-term view of the Middle East situation; it is nonetheless the war party, the party which has led the army and conducted the main military campaigns. It is even the Labour Party which has presided over the greatest extener the greatest extension of Jewish colonies in the Occupied Territories! Contrary to what is commonly supposed, the Labour Party is not more in favour of “peace” than the Likud right. There may be differences of opinion, but there is no fundamental disagreement between the two fractions of the Israeli bourgeoisie. National unity has always been maintained in both war and “peace” (it was the right that signed the peace agreements with Egypt at the end of the 1970s).

Israel is not the only country tempted to play its own game, and free itself from American tutelage. Syria was able to lay hands on Lebanon in exchange for its “neutrality” during the Gulf War in 1991. Nonetheless, it is not prepared to accept Israel's annexation of the Golan Heights, conquered in 1967. Here too there is cause for friction. Within the Palestinian bourgeoisie itself, Arafat's Fatah and the more radical organisations are far from being in agreement amongst themselves. Like the rest of the world, the whole region is prey to a rise in unbridled self-interest. The wholly dominant influence of American diplomacy is in fact thoroughly superficial, since it is trying to keep a lid down on a whole series of powder kegs just waiting to explode, in a region whose protagonists are all heavily armed.

As for the other great As for the other great imperialist powers, they cannot openly sabotage the US initiatives if they are not to be completely excluded from the game - as is the case currently with France's diplomacy. Officially, they are all toeing the line in support of the “peace process”. However, this does not exclude the possibility of them acting underhand to sabotage the Clinton plan, or any other American plan. Arafat himself sometimes calls for the European Union's involvement in the negotiations, since he would like to avoid a complete dependence on the US for his political survival. That being said, it is not with the EU that he is discussing, but with the US administration.

In today's world where each is “looking after number one”, only two of the great powers are capable of a long-term vision: the United States, which is doing its utmost to maintain its status as the planet's only military super-power; and Germany, which is pursuing in the background a discreet imperialist policy aimed at increasing its influence, completely straitjacketed ever since the end of World War II. The less powerful states are less capable of long-term vision. Each tries to defend its national interests, to defend itself when it is attacked, in particular by undermining its adversaries and sowing disorder in their camp. None today are capable of aoday are capable of a constructive, long-term policy. The Middle East situation is not likely to stabilise. Even the kind of “armed peace” that Eastern Europe experienced during the Cold War is no longer possible today.

As for the possibility of creating a Palestinian state, the fantastic absurdity of its proposed frontiers almost makes the South African Bantustans look like a rational project! There are territories under exclusive Palestinian control - the Gaza Strip, and a few big blots on the map of the West Bank; then there territories under joint control - a few more blots on the West Bank - where Israel is responsible for security. And the whole thing is situated within the environment of the West Bank Territories under exclusive Israeli control, with special roads to protect the Jewish settlements... How could anybody believe that such an aberration contains an ounce of progress, an iota of satisfaction of the needs of the population, anything whatever to do with any kind of “right of peoples to self-determination”?

The whole history of capitalism's decadence has shown that the national states which failed to reach maturity during capitalism's ascendant phase have been unable to constitute a solid and viable political and economic framework in the long term; the disintegration of the USSR andgration of the USSR and Yugoslavia is a demonstration. In Africa, the states inherited from the period of decolonisation are in tatters. War rages in Indonesia (Aceh...). Terrorism is rife in southern India and Ceylon is riven by civil war. There is extreme tension on the frontier between India and Pakistan, between Myanmar (Burma) and Thailand. In South America, Columbia suffers from permanent destabilisation. War is endemic between Peru and Ecuador. Frontiers everywhere are in dispute, since they have never really been recognised and accepted since the 19th century.

In this context, not only will “the Palestinian state never be anything but a bourgeois state in the service of the exploiting class, oppressing the same masses with its cops and prisons”[ix], it will never be anything but an aberration, a rump state, the symbol not of a nation but of the decomposition caused by capitalism's survival in the present historic period. Sharing out sovereignty over an indescribable entanglement of zones, towns, villages, roads attributed to one or the other is not a “peace process”, but a minefield for today and tomorrow, where any incident can at any moment provoke a new conflict. It is the irratiot is the irrationality of the world today pushed to the extreme.


The 21st century is beginning with a new acceleration of the dramatic consequences for humanity of the capitalist system's continued survival. Neither the promised prosperity of the “new economy”, nor the promised peace in the Middle East have put in an appearance. Nor could they, for capitalism is a decadent system, a sick body politic whose decomposition can only bring chaos, poverty, and barbarism in its wake.



iThough in reality, they are mostly in "unofficial" positions (en France for example, Krivine is leader of the Trotskyist Ligue Communiste Révolutionnaire, while Aguiton is one of the founders of the rank-and-file union SUD in the Post Office), or even occupied as discreet advisers in the bourgeoisie's left-wing administrations.

iiLe Monde Diplomatique of January 2001, the article being written by its editor Ignacio Ramonet.

iiiItalian far-left extra-parliamentary group during the 1960s-70s.

ivSee the articles "The new economy: a new justification for capitalism" (no.102), "Capitalism's fake good health" (no.100), "The abyss that hides behind 'uninterrupted growth'" (no.99), and the series of articles on "Thirty years of capitalism's open crisis" (nos.96-98).

vNewsweek, 18th December 2000.

viThe Economist, 9th December 2000.

viiSee our pamphlet Unions against the working class

viiiSee "A casino economy" in International Review no.87

ix“Neither Israel, nor Palestine: the workers have no country”, position adopted by the ICC and published in World Revolution (Britain) and Internationalism (USA), as well as on

General and theoretical questions: