Since the end of 1973 western governments and economists have pointed to the rise in oil prices as their main explanation for the economic crisis and its consequences: unemployment and inflation. When companies close down, the work­ers thrown into the street are told: ‘oil is to blame’; when workers see their real wages shrink under the pressure of inflation, the mass media tells them ‘it’s because of the oil crisis’. The bourgeoisie is using the oil crisis as a pretext, an alibi, to make the exploited swallow the economic crisis. In the propaganda of the ruling class, the oil crisis is presented as a sort of natural disaster men can do nothing about, except passively submit to those calamities called unemployment and inflation.

But ‘nature’ has nothing to do with the fact that oil merchants are now selling their goods at a higher price to other merchants. The oil increase is not nature’s doing but the consequence of capitalist trade relations.

Like all exploiting classes in history, the capi­talist class attributes its privileges to the will of nature. The economic laws which make them the masters of society are, in their mind, as natural and unchangeable as the law of gravity. But with time these laws have become outmoded in terms of the productive forces; when their con­tinuation can only cause crises which plunge soc­iety into misery and desolation, the privileged class always sees this as ‘nature’s’ fault: nat­ure is not generous enough or there are too many human beings on earth, etc. Never in their wildest imagination would they want to conceive that the existing economic system is at fault, is anachronistic and obsolete.

At the end of the Middle Ages, in the decadence of the feudal system, monks announced the end of the world because the existing fertile lands had been exhausted. Today we are told ten times a day that if everything is going wrong, it is because existing oil sources have been exhausted.

Has nature really run out of oil?

In March 1979, the oil producing countries of OPEC met together to solemnly proclaim that they were going to reduce oil production once again. They are lowering production in order to maintain price levels, just as peasants may destroy their surplus fruit to avoid a collapse in prices.

Europe risks facing an oil scarcity in 1980 they tell us. Perhaps, but who still believes that it is because of a natural, physical scarcity?

The OPEC countries do not produce at capacity, far from it. For several years now new oil fields have been put to use in Alaska, the North Sea, and Mexico. Almost every week new oil depo­sits are discovered somewhere in the world. Furthermore it is said that oil deposits trapped in shale, in a form more costly to extract, are enormous in comparison to known oil deposits today. How then can we talk about a physical scarcity of oil?

It is perfectly logical to think that one day a certain ore or other raw material will be exhausted because of man’s unlimited use of it. But this has nothing to do with the fact that oil merchants decide to reduce capacity so as to maintain profits. In the first case it really is a question of the end of nature’s bounty; in the second it is simply the case of a vulgar speculative operation on the market.

If the world economic situation was otherwise ‘healthy’, if the only problem was simply the physical and unexpected exhaustion of oil in nature, then we would not be seeing a slowdown in the growth of trade and investment as we do today but a huge economic boom instead: the world’s adaptation to new forms of energy would set off a veritable industrial revolution. Certainly there would be restructuration crises here and there with factories closing down and lay-offs in some sectors, but these closures and lay-offs would find an immediate compensation in the creation of new jobs.

Today we are witnessing something completely different: countries producing oil the most pro­fitably are reducing production; the factories which close are not replaced by new ones; invest­ment in new forms of energy remains negligible in most major countries.

The idea of a physical lack of oil in nature is used by economists and the mass media to explain the dizzying rise of oil prices in 1974 and in 1979. But how can the spectacular rise in the world market prices of all basic materials in 1974 or in 1977 be explained? How can the fever­ish rise in basic metals like copper, lead, and tin since the beginning of the year be explained? If we follow the ‘experts’ of the bourgeoisie, we would have to believe that oil is not the only thing that is giving out in nature, but also most metals and even food products. Between 1972 and 1974 the price index of metals and ore exported in the world (aside from oil) has more than doub­led; food prices have almost tripled. In the second quarter of 1977 these food products cost three times more on the world market than in 1972. We would have to believe that nature is drying up all of a sudden not just in oil but in almost everything else; this is just absurd.

The theory of the physical exhaustion of nature hardly manages to explain the rise in oil prices, but it has even greater difficulty explaining why the real price of oil, as paid by the impor­ting, industrialized countries, (that is the price paid taking into account the growth of world inflation and the evolution of the value of the dollar1 decreased regularly before 1973-74 and afterwards, until 1978. Between 1960 and 1972 the real price of imported crude oil decreased 11% for Japan, 14% for France and 20% for Germany! In 1978 this same price dec­reased in relation to 1974 or 1975 levels by 14% for Japan, 6% for France and 11% for Germany.

How could the price of a raw material that is supposedly being physically exhausted be dimini­shing to the point of obliging its producers to artificially reduce their production so as to avoid a collapse of prices?

If we want to understand the present ups and downs in the prices of raw materials we cannot look to the greater or lesser generosity of Mother Nature, but to the decomposition of capitalist trade. We are faced with not the sudden discovery of a grotesque natural scarcity but a huge speculative operation on the raw materials market. This is not a new phenomenon: all major capitalist crises are accompanied by speculative fever in the raw materials market.

Speculation: a typical characteristic of capitalist economic crises

The real source of all capitalist profits resides in the exploitation of workers in the course of the production process. Profit, surplus value, is the surplus labor extracted from wage earners. When everything goes well, that is when what is produced gets sold at a sufficient rate of profit, capitalists reinvest these profits in the prod­uction process. The accumulation of capital is this process of transforming the surplus labor of the workers into capital: new machines, new raw materials, new wages, to exploit new quanti­ties of living labor. That is the way capita­lists ‘make money work’ as they call it.

But when things are going badly, when production does not give enough of a return because markets are lacking, this mass of capital in money form that is seeking investments, takes refuge in speculative operations. It is not that capita­lists prefer this sort of operation where risks are so great that you face ruin from one day to the next; on the contrary they would prefer the ‘peaceful’ road of exploitation through produc­tion. But when there is less and less profitable investment available in production, what can you do? Keeping your money in the vault means seeing its value diminish everyday due to mone­tary erosion. Speculation is a risky placement but it can bring fast and big returns. That is why every capitalist crisis is witness to an extraordinary degree of speculation. The law supposedly prohibits speculation but those who speculate are the very ones who make the laws.

Very often this speculation polarizes around raw materials. In the economic crisis of 1836, Beagle, the director of the US Bank, taking advantage of the fact that the demand for cotton in Great Britain was still strong, bought up the whole cotton crop to sell it at exorbitant prices to the British later. Unhappily for him, the demand for cotton collapsed in 1839 under the pressure of the crisis, and the cotton stocks carefully gathered in the heat of the speculative burst were worthless. Cotton prices collapsed on the world market, adding to the already large number of bankruptcies (1000 banks went bust in the US).

After provoking a speculative price rise in raw materials, the crisis has the effect of collapsing prices because of a lack of demand. These sudden bursts of rising raw material prices followed by a dizzying fall are typical of spec­ulation in a time of crisis. This phenomenon was particularly clear in the crises of 1825, 1836 and 1867 in cotton and wool; in the crises of 1847 and 1857 in wheat; in 1873, 1900 and 1912 in steel and cast-iron; in 1907 in copper; and in 1929 on almost all metals.

Speculation is not the work of isolated, shady individuals operating illegally, or of greedy little stockpilers, as the press likes to paint them. The speculators are governments, nation states, banks large and small, major industries, in short, those who hold most of the monetary mass seeking profits.

In times of crisis speculation is not just a 'temptation' capitalists are capable of avoiding. A banker who has the responsibility of paying interest to thousands of savings accounts has no choice. When profits are getting rare, you have to take them where you can get them. The hypocritical scruples of times of prosperity, when laws are made 'prohibiting speculation', disappear and the most respectable financial institutions throw themselves headlong into the speculative whirlpool. In the capitalist world the one who makes the profits survives. The others are eaten up. When speculation becomes the only way to make profits, the law becomes: he who does not speculate or speculates badly is destroyed.

What is being called the oil crisis is in fact a huge world speculative operation.

Why oil?

Oil has not been the only object of speculation in recent years. Since the devaluation of the pound sterling in 1967, speculation has been increasing in the entire world, attacking an over­growing list of products: currencies, construc­tion, raw materials (vegetable or mineral), gold, etc. But oil speculation is particularly impor­tant because of its financial repercussions. It has set off movements of capital of such size and rapidity as to be largely unprecedented in history. In a few months, a gigantic flow of dollars went from Europe and Japan towards the oil-producing countries. Why did speculation on oil bring such large profits?

First of all because modern industry relies on electricity and electricity relies essentially on oil. No country can produce without oil. Speculation based on the blackmail of an oil shortage is blackmail with economic clout.

But oil is not only indispensable for production and construction. It is also indispensable for destruction and war. Most of the modern arsenal of weapons, from tanks to bombers, from aircraft carriers to trucks and jeeps, works on oil. To arm yourself is not only to produce weapons but to control the means of making these weapons work as long as you need them. The armaments race is also the oil race.

Oil speculation therefore touches a product of primary economic and military importance. That is one of the reasons for its success -- at least for the moment. But it is not the only reason.

The blessing of American capital

One of the favorite themes of the new commenta­tors’ gibberish is the oil crisis as ‘the revenge of the under-developed countries against the rich ones’. By a simple decision to reduce their production and raise the price of oil, these countries, who are part of the victims of the third world, previously condemned to produce and sell raw materials cheaply to the industrialized countries, have got the great powers by the throat. A real David and Goliath story for our times!

Reality is quite another thing. Behind the oil crisis is US capital. Just consider two impor­tant and obvious facts:

1. The major powers of OPEC are very strongly under the domination of US imperialism. The governments of Saudi Arabia, the major oil expor­ter in the world, of Iran in the time of the Shah, or Venezuela, to take only a few examples, do not make any crucial decisions without the agreement of their powerful ‘protector’.

2. Almost all world trade in oil is under the control of the large American oil companies. The profits made by these companies, because of the variations in oil prices, are so enormous that the US government recently had to organize a parody of government hearings on the television to divert the anger of a population which is feeling the effects of austerity programs jus­tified by the ‘oil crisis’ onto the ‘Seven Sisters’ -- the major oil companies.

If this is not enough to prove the decisive role played by the US in the oil price rises, consider some of the advantages the strongest economic power drew from the ‘oil crisis’:

1. On the international market, oil is paid in US dollars. Concretely this means that the US can buy oil simply by printing more paper money, while other countries have to buy dollars.2

2. The US imports only 50% of the oil it needs. Their direct competitors on the world market -- Europe and Japan -- have to import almost all their oil; any price rise in oil therefore has a much greater effect on production costs of Euro­pean and Japanese goods. The competitiveness of US goods is thus automatically increased. It is not an accident that US exports have increased enormously after each oil price rise to the detri­ment of their competitors.

3. But it is surely on the military level that the US has benefited the most from the oil crisis.

As we have seen, oil remains a major instrument of war. The oil price rise allowed for the pro­fitable exploitation of new oil fields in or near the US (Mexico, Alaska and other US deposits). In this way US military potential is less depen­dent on oil deposits in the Middle East which are far from Washington, and close to Moscow. In addition, the huge oil revenues have financed the ‘Pax Americana’ in the Middle East through the intermediary of Saudi Arabia. In fact Egypt’s costly passage into the US bloc was partly paid for through aid from Saudi Arabia in the name of Arab brotherhood. Saudi Arabia directly influen­ced the policy of countries like Egypt, Iraq, Syria (during the Lebanon conflict) through their economic ‘aid’ financed out of oil revenues. Saudi Arabian financial aid to the PLO is not entirely foreign to the budding rapprochement between the PLO and the US bloc.

American imperialism has thus given itself the luxury of having its competitors and allies, Eur­ope and Japan, finance its international policy. Thus for economic and military reasons the US has an interest in letting oil prices rise and even encouraging this.

The attitude of the Carter government during the burst of speculation brought on by the interrup­tion of deliveries from Iran is very indicative. While Germany and France were trying to choke off the speculation developing on the ‘free market’ in Rotterdam in the first half of 1979, the US government cynically announced it was prepared to buy any amount of oil at a higher price than any reached at the Dutch port. Despite special envoys from Bonn and Paris, sent to Washington to protest against this ‘knife in the back’, the White House would not go back on its offer.

Whatever the different reasons for the price rise, one issue remains: what are the effects on the world economy? Is the official propaganda right in saying that the oil crisis is respon­sible for the economic crisis?

The effects of the oil price rise

There is no doubt that the rise in the price of raw materials is a handicap for the profitability of any capitalist enterprise. For industrial capital raw materials constitute an overhead expense. If expenses increase, the profit mar­gin proportionally decreases. Industrial capi­tal has only two ways of fighting against this decline in profits:

-- reducing overhead costs in other ways especially by reducing the price of labor;

-- compensating for overhead costs by increasing the sale price.

Capitalists usually use the two methods at the same time. They try to reduce their overheads by imposing austerity policies on the workers; they try to maintain profits by increasing prices and thus fuelling inflation. Thus it is certain that the oil price rise is a factor forcing each national capital to make new efforts towards maximizing profits: eliminating the least productive sectors, reducing wages, concen­trating capital further. It is thus true that oil prices are partly responsible for increased inflation.

The oil increase is indeed an exacerbating factor in the crisis. But contrary to what the propaganda of the media disseminates, it was only that -- an exacerbating factor and not the cause or even the major cause of the economic crisis.

The economic crisis did not begin with the oil increases. Oil speculation is merely one of the consequences of the economic disorders which have plagued capitalism since the end of the 1960s. To hear bourgeois ‘experts’ speak, one would think that before the fatal date of the second half of 1973 everything was rosy in the world economy. To justify their austerity policies, these gentlemen forget or pretend to forget that at the beginning of 1973, before the big oil price increases, the inflation rate had doubled in the US and tripled in Japan in less than a year. They pretend to forget that between 1967 and 1973 capitalism went through two serious recessions: one in 1967 (the annual growth rate of production fell by half in the US -- 1.8% in the first half of 1967 -- and fell to zero in Germany), and the other in 1970-71 when production declined absolutely in the US. They forget or hide the fact that the number of unemployed in the OECD countries (the twenty-four industriali­zed countries of the US bloc) had doubled in six years, from 6 million and a half in 1966 to more than 10 million in 1972. They ignore the fact that at the beginning of 1973, after six years of monetary instability that began with the dev­aluation of the pound in 1967, the international monetary system definitively collapsed with the second devaluation of the dollar in two years.

The speculation in oil did not burst in upon a serene and prosperous capitalist economy. On the contrary, it appeared as yet another convulsion of capitalism shaken for the past six years by the deepest crisis since World War II.

It is absurd to explain the difficulties of the 1967 to 1973 period by the oil price rises which followed it in 1974; it is just as absurd to consider the oil price increase as the cause of the economic crisis of capitalism.

*******************

Oil speculation dealt a blow to the world economy but it was neither the first nor the most serious one. The purely relative importance of the blow can be measured ‘negatively’ so to speak by considering the situation in an industrialized country which has managed to eliminate the oil problem by exploiting its own deposits. Such is the case of Great Britain which is less dependent on oil imports because of its fields in the North Sea. In 1979 the rate of unemployment was twice that of Germany and three times the rate in Japan -- two countries which nevertheless have to import almost all their oil. Inflation of consumer prices in Great Britain is double Ger­many’s and nine times greater than Japan’s. And finally, the growth rate of production is the weakest of the seven major western powers (in the first half of 1979 gross production had not increased but decreased by 1% in annual terms) .

The causes of the present crisis of capitalism are much more profound than the consequences of oil speculation. Since the beginning of the 1960s capitalism has been in a headlong race to escape the consequences of the end of the period of reconstruction. For more than ten years the industrial regions destroyed in World War II have not only been reconstructed -- thereby elimi­nating one of the major markets for US exports -- but have become powerful competitors of the US on the world market. The US has become a country which exports less than it imports and therefore must cover the world with its paper money to finance its deficit. For ten years, since the end of the reconstruction process, world growth has been resting essentially on credit sales to underdeveloped countries and on the US’ ability to finance its deficit. However, both the former and the latter are on the brink of financial bankruptcy.

The debt of the third world countries has reached unbearable proportions (the equivalent of the annual revenue of a thousand million men in these regions). The US is heading into a recess­ion as a way to reduce their imports and stop the growth of their debts. The recession beginning in the US is inevitably the sign of a world recession, a recession which according to the observable progression from 1967 onwards will be deeper than the three previous ones.

Speculation on the price of oil is only a second­ary aspect of a much more important reality: the fact that capitalist production relations are definitively out of step with the possibilities and needs of humanity.

After almost four centuries of world domination, capitalist laws have exhausted their validity. From being a progressive force, they have become an obstacle to the very survival of humanity.

It is not the ‘Arabs’ who have brought capitalist production to its knees. Capitalism is economic­ally collapsing because it is increasingly under­mined by its internal contradictions, and mainly by its inability to find enough markets to sell its production profitably. We are living at the end of a round in the cycle of crisis-war-reconstruc­tion which capitalism has imposed on humanity for more than sixty years.

For humanity the solution is not to be found in lowering the price of oil nor in lowering wages but in eliminating wage slavery, in eliminating the capitalist system east and west.

Only with a new form of organization for world society, following real communist principles, will we escape the endless barbarism of capitalism in crisis.

R. Victor

 

 

MARXISM AND IMPERIALISM

With the proliferation of ‘national liberation' struggles all over the planet; with the increasing number of local wars between capitalist states, with the accelerating preparations of the two great imperialist blocs for a final confrontation - all of these phenomena expressing the irreversible decomposition of the capitalist world economy - it becomes more and more important for revolutionaries to develop a clear understanding of the meaning of imperialism. For the last seven decades, marxists have recognised that we are living in the epoch of imperialist decay and have attempted to draw out all the consequences of the imperialist epoch of the class struggle of the proletariat. But - particularly with the onset of the counter-revolution which descended on the proletariat in the 1920's - the theoretical task of defining and understanding imperialism has been severely hampered by the almost unchallenged triumph of bourgeois ideology in all its forms. Thus the very meaning of the word imperialism has been distorted and undermined. This work of mystification has been carried out on several fronts: by the traditional bourgeois ideologues who declare that imperialism came to an end when Britain changed its ‘Empire' into a ‘Commonwealth', or when the great powers abandoned their colonies; by hosts of sociologists, economists, and other academics who vie with each other to produce ever-mounting piles of unreadable literature about the ‘Third World', ‘Development Studies', the nationalist awakening in the colonies, etc.; above all by the pseudo-marxists of the capitalist left, who loudly lambaste the crimes of US imperialism while pretending that Russia or China are non-imperialist and even anti-capitalist powers. This stultifying barrage has not left the revolutionary movement unscathed. Some revolutionaries, taken in by the ‘discoveries' of bourgeois academics, have abandoned all reference to capitalism's imperialist drives and see imperialism as an outmoded, superseded phenomenon in capitalism's history. Others, in their effort to resist the encroachments of bourgeois ideology, simply turn the writings of previous marxists into holy writ. This is the case with the Bordigists for example, who mechanically apply Lenin's ‘five distinguishing characteristics of imperialism' to the modern world, ignoring all the developments that have taken place over the last sixty years.

But marxists can neither ignore the theoretical tradition from which they come, nor turn it into a dogma. It's a question of critically assimilating the classics of marxism and applying the richest contributions to an analysis of present-day reality. The aim of this text is to draw out the real and contemporary meaning of the elementary formulation: imperialism dominates the entire planet in this epoch. We aim to give substance to the contention, expressed in the ICC's platform, that "imperialism... has become the means of survival for every nation no matter how large or small"; to show that, under modern capitalism, all wars have an imperialist nature, save one: the civil war of proletariat against the bourgeoisie. But to do this it is necessary first to refer back to the original debates on imperialism within the workers' movement.

MARXISM AGAINST REVISIONISM

In the period leading up to the First World War, the ‘theoretical' question of imperialism constituted a dividing line between the revolutionary, international wing of social democracy, and all the revisionist and reformist elements in the workers' movement. With the outbreak of the war your position on imperialism determined which side of the barricade you were on. It was an eminently practical question, because on it depended your whole attitude towards the imperialist war, and towards the revolutionary convulsions which the war provoked.

There were in this matter certain cardinal points upon which all revolutionary marxists agreed. These points remain the foundations of any marxist definition of imperialism today.

1) For marxists, imperialism was defined as a specific product of capitalist society; they vigorously attacked the more overtly reactionary bourgeois ideologies which portrayed imperialism as a biological urge, as an expression of man's innate desire for territory and conquest (the sort of theory which flourishes again today in the notion of the ‘territorial imperative' peddled by social zoologists like Robert Ardrey and Desmond Morris). The marxists fought with equal tenacity against racist theories about the White Man's Burden, and against all confusionist amalgams of all policies of conquest and annexation in all kinds of social formations. As Bukharin put it, this:

"...very widespread ‘theory' of imperialism defines it as the policy of conquest in general. From this point of view one can speak with equal right of Alexander the Macedonian's and the Spanish conqueror's imperialism, of the imperialism of Carthage and Ivan III, of ancient Rome and modern America, of Napoleon and Hindenburg.

"Simple as this theory may be, it is absolutely untrue. It is untrue because it ‘explains' everything, i.e. it explains absolutely nothing... the same can be said about war. War serves to reproduce those relations on a wider scale. Simply to define war, however, as conquest, is entirely insufficient, for the simple reason that in doing so we fail to indicate the main thing, namely, what production relations are strengthened and extended by the war, what basis is widened by a given ‘policy of conquest" (Imperialism and World Economy, Merlin Press, Chapter 9, p.112-113).

Although Lenin said that "colonial policy and imperialism existed before this latest stage of capitalism, and even before capitalism. Rome founded on slavery, pursued a colonial policy and practised imperialism", he concurs with Bukharin when he adds "general disquisitions on imperialism, which ignore, or put into the background, the fundamental differences between socio-economic systems, inevitably degenerate into the most vapid banality or bragging" "Imperialism, Highest Stage of Capitalism, Peking, Chapter VI, p.97).

2) Secondly, marxists defined imperialism as a necessity for capitalism, as a direct result of the accumulation process, of capital's innermost laws. At a given stage in the development of capital, it was the only way in which the system could prolong its life. It was thus irreversible. Although the explanation of imperialism as an expression of capital accumulation is clearer in some marxists than others (a point we shall be returning to), all marxists rejected the thesis of Hobson, Kautsky and others who saw imperialism as a mere ‘policy' chosen by capitalism or rather by particular factions of capitalism. This thesis was logically accompanied by the idea that you could prove that imperialism was a bad, short-sighted, expensive policy and that you could at least convince the more enlightened sections of the bourgeoisie that they would be better of f with a sensible, non-imperialist policy. This clearly paved the way for all kinds of reformist pacifist recipes aimed at rendering capitalism less brutal and less aggressive. Kautsky even developed the idea that capitalism was moving gradually and peacefully into a phase of ‘ultra-imperialism', fusing into one big non-antagonistic trust where wars would be a thing of the past. Against this utopian view (echoed during the post-World War Two boom by the likes of Paul Cardan) the marxists insisted that far from representing a transcendence of capitalism's antagonisms, imperialism expressed the sharpening of these antagonisms to their highest degree. The imperialist epoch was inevitably one of world crises, political despotism and world war; faced with this catastrophic perspective, the proletariat could only respond with the revolutionary destruction of capitalism.

3) Thus imperialism was seen as a specific phase of capital's existence: its highest and final phase. Although it is permissible to talk of, say, British and French imperialism in earlier parts of the century, the imperialist phase of capital as a world system does not truly begin until the 1870s, where several highly centralised and concentrated national capitals began to compete for colonial possessions, spheres of military influence and domination of the world market. As Lenin said, "an essential feature of imperialism is the rivalry between several Great Powers in the striving for hegemony" (Imperialism, Chapter 5, p.109). Imperialism is thus essentially a competitive relationship between capitalist states at a certain stage in the evolution of world capital. Furthermore, the development of this relationship can itself be seen to have two distinct phases, which are directly linked to changes in the global milieu in which imperialist competition takes place.

"The first period of imperialism was the last quarter of the 19th century and followed on from the epoch of national wars through which the constitution of the great national states was achieved, the terminal point of this epoch being the Franco-Prussian war. If the long period of economic depression following the crisis of 1873 already bore the seeds of the decadence of- capitalism, capital could still use the short recoveries which occurred during the depression to complete the exploitation of backward territories and peoples. Capitalism in its avid, feverish hunt for raw materials and buyers who are neither capitalists nor wage labourers, robbed, decimated and murdered the colonial populations. This was the epoch of the penetration and extension of Britain into Egypt and South Africa, France into Morocco, Tunis and Tonkin, Italy into East Africa and the frontiers of Abyssinia, Tsarist Russia into central Asia and Manchuria, Germany into Africa and Asia, the USA into the Philippines and Cuba, and Japan into the Asian continent.

"But once these great capitalist groupings had completed the division of all usable land, all the exploitable wealth, all spheres of influence, in short all the corners of the world where labour power could be pillaged, transformed into gold, and piled up in the national banks of the metropoles, then capitalism's progressive mission came to an end... it's then that the genera1 crisis of capitalism had to open up." (Le Problème de la Guerre, 1935, by Jehan, a militant of the Belgian Communist Left)

The initial phase of imperialism, while giving a foretaste of capitalism's decay and bringing blood and misery to the populations of the colonial regions, still had a progressive aspect to it, in that it was establishing the world wide dominion of capital - the precondition for the communist revolution. But once this world-wide domination was achieved, capitalism ceased to be a progressive system, and the catastrophes it had brought to the colonial peoples now rebounded to the heart of the system, as the outbreak of World War 1 confirmed:

"Modern imperialism is not the prelude to the expansion of capital... it is only the last chapter of its historical process of expansion; it is the period of universally sharpened world competition between the capitalist states for the last remaining non-capitalist areas on earth. In this final phase, economic and political catastrophe is just as much the intrinsic normal mode of existence for capital as it was in the ‘primitive accumulation' of its development stage... the economic expansion of capital in its imperialist final phase is inseparable from the series of colonial conquests and World Wars we are now experiencing. What distinguishes imperialism as the last struggle for capitalist world domination is not simply the remarkable energy and universality of expansion but - and this is the specific sign that the circle of development is beginning to close - the return of the decisive struggle for expansion from those areas which are being fought over back to its home countries. In this way, imperialism brings catastrophe as a mode of existence back from the periphery of capitalist development to its point of departure. The expansion of capital, which for four centuries had given the existence and civilisation of all non-capitalist peoples in Asia, Africa, America and Australia over to ceaseless convulsions and general and complete decline, is now plunging the civilised peoples of Europe into a series of catastrophes whose final result can only be the decline of civilization or the transition to the socialist mode of production." (Luxemburg, The Anti-critique).

Capitalism in its final imperialist phase was the "epoch of wars and revolution" recognised by the Communist International, an epoch in which humanity was faced with the stark choice between socialism or barbarism. For the working class the epoch meant the obliteration of all the reforms it had won in the 19th century and a mounting attack on its living standards through austerity and war. Politically it meant the destruction or recuperation of its previous organisations and the ruthless oppression of the leviathan imperialist state, compelled by the logic of imperialist competition and by the decomposition of the social fabric to take in hand every aspect of social, political and economic life. That is why, faced with the slaughter of World War 1, the revolutionary left concluded that capitalism had definitely outplayed its historic role, and that the immediate task of the international working class was to turn the imperialist war into civil war, to overthrow imperialism by striking at the root of the problem: the world capitalist system. Naturally this meant a complete rupture with the social democratic traitors who, like the Scheidemanns and Millerands, had become open, chauvinist advocates of imperialist war, or the ‘social-pacifists' like Kautsky, who continued to spread the illusion that capitalism could exist without imperialism, without dictatorship, terror and war.

THE DEBATE BETWEEN MARXISTS

Thus far there could be no disagreement among the marxists, and indeed these basic points of agreement were sufficient basis for the regroupment of the revolutionary vanguard in the Communist International. But the disagreements which existed then and still exist today in the revolutionary movement arose when marxists tried to make a more precise analysis of the driving force behind imperialism and of its concrete manifestations, and when they drew the political consequences from this analysis. These disagreements tended to correspond to different theories about the capitalist crisis and the historical decline of the system, since imperialism, as all agreed, was capital's attempt to offset its mortal contradictions. Thus Bukharin and Luxemburg, for example, emphasized different contradictions in their theories of the crisis, and thus gave differing accounts of the driving force behind imperialist expansion. This debate was further complicated by the fact that the bulk of Marx's work on economics had been written before imperialism had really established itself, and this gap in his work gave rise to different interpretations of the way Marx's writings should be applied to the analysis of imperialism. It is impossible in this text to go back over all these debates about the crisis and imperialism, most of which remain unresolved today. What we want to do is examine briefly the two main definitions of imperialism developed during the period - those of Lenin/Bukharin and Rosa Luxemburg - and to judge how adequate are these definitions both for that time and for the present period. In doing so we will attempt to make more concise our own conception of imperialism today.

LENIN'S CONCEPTION OF IMPERIALISM

For Lenin, the characteristic features of imperialism were:

"1) The concentration of production and capital has developed to such a high stage that it has created monopolies which play a decisive role in economic life;

2) the merging of bank capital with industrial capital and the creation, on the basis of this ‘finance capital', of a financial oligarchy;

3) the export of capital as distinguished from the export of commodities acquires exceptional importance;

4) the formation of international monopolist capitalist combines which share the world among themselves;

5) the territorial division of the whole world among the biggest capitalist powers is completed."

(Imperialism, chap 7, p.106)

Although Lenin's definition of imperialism contains a number of important indicators, its main weakness is that it is more a description of some of imperialism's outward effects, than an analysis of the roots of imperialism in the accumulation process. The organic or intensive development of capital into more and more concentrated units, and the geographic or extensive development of capital's field of activity (the search for colonies, territorial division of the globe) are fundamentally expressions of the inner processes of accumulation. It is the growing organic composition of capital, with the corresponding fall in the rate of profit and shrinking of the domestic market, which compelled capital to seek new profitable outlets for capital investment and to extend continuously the market for its commodities. But while the underlying dynamic of imperialism does not change, the outward manifestations of this dynamic are subject to modification, so that many aspects of Lenin's definition of imperialism are inadequate today, and were even at the time he was elaborating it. Thus the period in which capital could be seen to be dominated by an oligarchy of "finance capital" and by "international monopolist combines" was already giving way to a new phase during World War 1 - the period of state capitalism, of the permanent war economy. In the epoch of chronic inter-imperialist rivalries on the world market, the entire national capital tends to be concentrated around the state apparatus, which subordinates and disciplines all particular factions of capital to the needs of military/economic survival. The recognition that capitalism had entered an epoch of violent struggles between national "state capitalist trusts" was much clearer to Bukharin than Lenin (see Imperialism and World Economy), though Bukharin was still constrained by the equation of imperialism with finance capital, so that his "state capitalist trust" is, to a large extent, presented as a ‘tool' of the financial oligarchy, whereas the state is actually the supreme directing organ of capital in this epoch. Furthermore, as Bilan pointed out,

"To define imperialism as a ‘product' of finance capital, as Bukharin has done, is to establish a false connection and above all is to lose sight of the common origin of these two aspects of the capitalist process: the production of surplus value." (Mitchell, ‘Crisis and Cycles in the Economy of Capitalism in Agony' Bilan no. 11, 1934)

Lenin's failure to understand the significance of state capitalism was to have grave political consequences in a number of areas: illusions in the progressive nature of certain aspects of state capitalism, applied with disastrous consequences by the Bolsheviks in the Russian Revolution; the inability to see the integration of the old worker's organisations into the state, and the evasive theory of the Labour Aristocracy and of ‘bourgeois workers parties' and ‘reactionary unions' which are somehow distinct from the state machine (the problem with these organisations wasn't simply that a large number had been bribed by ‘imperialist super profits', as Lenin argued, but that the entire apparatus had been incorporated into the colossus of the imperialist state). The tactical conclusions which were drawn from these erroneous theories are well known: the united front, trade union work, etc... Similarly Lenin's emphasis on colonial possessions as a distinguishing and even indispensable feature of imperialism has not stood the test of time. Despite his expectation that the loss of the colonies, precipitated by national revolts in these regions, would shake the imperialist system to its foundations, imperialism has adapted quite easily to ‘decolonisation'. Decolonisation simply expressed the decline of the older imperialist powers, and the triumph of imperialist giants who were not burdened with many colonies in the period around World War 1. Thus the USA and Russia were able to develop a cynical ‘anti-colonial' line to further their own imperialist ends, to batten onto national movements in the colonies and transform them immediately into inter-imperialist proxy-wars.

Lenin's theory of imperialism became the official position of the Bolsheviks and the Communist International, particularly in relation to the national and colonial question, and it is here that the defects of the theory were to have their most serious ramifications. When imperialism is characterised by essentially super-structural features, it becomes easy to divide the world into imperialist, oppressing nations and oppressed, non-imperialist nations, and even for certain imperialist powers to abruptly ‘cease' being imperialist when they shed one or more of these defining characteristics. Along with this went a tendency to obscure class differences in the ‘oppressed nations' and to argue that the proletariat - as the national champion of all the oppressed - had to rally these oppressed nations to its revolutionary banner. This position was applied mainly to the colonies, but in his critique of The Junius Pamphlet, Lenin argued that even developed capitalist countries in modern Europe could, under certain circumstances fight a legitimate war for national independence. During the First World War this ambiguous idea was inoperative because of Lenin's correct evaluation that the overall imperialist context of the war made it impossible for the proletariat to support a policy of national defence in any of the belligerents. But the weakness of the theory were starkly demonstrated after the war, above all with the decline of the revolutionary wave and the isolation of the Soviet State. The idea of the anti-imperialist, character of the ‘oppressed nations' was refuted by the events in Finland, Eastern Europe, Persia, Turkey and China, where the attempt to carry out the policies of ‘national self-determination' and the anti-imperialist united front' was powerless to prevent the bourgeoisies of these countries from allying themselves with the imperialist powers and crushing any initiative towards the communist revolution[1].

Perhaps the most grotesque application of the ideas that Lenin had advanced in his On the Junius Pamphlet was in Germany during the ‘National Bolshevik' experiment in 1923: according to this debased concept, Germany suddenly ceased to be an imperialist power because it had been deprived of its colonies and was being plundered by the Entente. An anti-imperialist alliance with sections of the German bourgeoisie was therefore on the agenda. Of course, there is no straight line from Lenin's theoretical weaknesses to these outright betrayals; a whole process of degeneration lay between them. Nevertheless it is important for communists to demonstrate that it is precisely the errors of past revolutionaries that can be used by degenerating or counter-revolutionary parties to justify their treason. It is not accidental that the counter-revolution, in its Stalinist, Maoist or Trotskyist forms, makes abundant use of Lenin's theories of imperialism and national liberation to ‘prove' that Russia or China are not imperialist (see the typical leftist trick: ‘where are the monopolies and financial oligarchies in Russia?'); or, equally to ‘prove' that numerous bourgeois gangs in the underdeveloped countries must be supported in their ‘anti-imperialist' struggle. It's true that they distort and corrupt many aspects of Lenin's theory, but communists should not be afraid to admit that there are numerous elements in Lenin's conception which can be taken more or less ‘straight' by these bourgeois forces. It is precisely these elements which we must be able to criticize and go beyond.

IMPERIALISM AND THE FALLING RATE OF PROFIT

With Lenin, it is merely implicit that imperialist expansion was rooted in the accumulation process - in the need to offset the falling rate of profit by seeking cheap labour and raw materials in the colonial regions. This element is more explicitly drawn out by Bukharin, and it is perhaps not accidental that Bukharin's more rigorous analysis of imperialism was, initially at least, accompanied by a clearer position on the national question (during World War I and the first years of the Russian Revolution Bukharin argued against Lenin's position on national self-determination. Later on he changed his position; it was Luxemburg's position on the national question - intimately linked to her theory of imperialism[2] - which proved to be the most consistent). Without doubt, the need to offset the falling rate of profit was a cardinal element in imperialism, because imperialism begins precisely at that stage when a number of national capitals with a high organic composition come to the foreground of the world market. But although we cannot deal with the question at any length here[3], we consider that explanations of imperialism which refer more or less exclusively to the falling rate of profit suffer from two major weaknesses:

1. Such explanations tend to portray imperialism as the unique expression of a few highly developed countries - countries with a high organic composition of capital, forced to export capital in order to offset the falling rate of profit. This view has reached a level of caricature with the CWO, who equate imperialism with economic and political independence and conclude that there are now only two imperialist powers in the world - the USA and Russia - since they alone are truly ‘independent' (other countries merely have ‘imperialist' tendencies' which can never be realized). This is the logical outcome of looking at the problem from the point of view of individual capitals, rather than of global capital. For, as Rosa Luxemburg stressed:

"Imperialism is not the creation of any one or any group of states. It is the product of a particular stage of ripeness in the world development of capital, an innately international condition, an indivisible whole, that is recognisable only in all it€ relations, and from which no nation can hold aloof at will." (The Junius Pamphlet)

This does not mean that the CWO's conclusion is the inevitable result of explaining Imperialism solely with reference to the falling rate of profit. If one begins from the standpoint of global capital, it becomes clear that, just as it is the rate of profit in the most developed capitals which determines the global rate of profit, so the consequent imperialist behaviour of the advanced capitals must also have its echo among the weaker capitals. But the minute you do regard the problem of imperialism from the standpoint of global capital, you become aware of another contradiction in the cycle of accumulation - the inability of global capital to realize all the surplus value within its own relations of production. This problem, posed by Luxemburg in The Accumulation of Capital was dismissed by Lenin, Bukharin and their followers as an abandonment of marxism, but it is not hard to show that Marx was preoccupied with the same problem[4]:

"The more capitalist production develops, the more it is forced to produce on a scale which has nothing to do with the immediate demand but depends on a constant expansion of the world market. He (i.e. Ricardo) has recourse to Say's trite assumption, that the capitalist produces not for the sake of profit, surplus value, but produces use-value directly for consumption - for his own consumption. He overlooks the fact that the commodity has to be converted into money. The demand of the workers does not suffice, since profit arises precisely from the fact that the demand of the workers is smaller than the value of their product, and that it (profit) is all the greater, the smaller, relatively, is this demand. The demand of the capitalists among themselves is equally insufficient." (Marx, ‘Ricardo's Theory of Profit", Theories of Surplus Value, Part 2, chap XVI, p.468)

2. Thus any serious analysis of imperialism must take into account this necessity for the "constant expansion of the world market". A theory which ignores the problem is unable to explain why it was precisely at the point that the world market was unable to continue expanding - with the integration of the most important sectors of pre-capitalist economy into the capitalist pre-capitalist economy into the capitalist world economy around the beginning of the 20th century - that capitalism plunged into the permanent crisis of its final imperialist period. Can the historical simultaneity of these two phenomena be dismissed as a mere coincidence? While all marxist analyses of imperialism saw that the hunt for cheap raw materials and labour power was a central aspect of colonial conquest, only Luxemburg understood the decisive importance of the pre-capitalist markets of the colonies and semi-colonies, since they provided the soil for the "constant expansion of the world market" until the early years of the twentieth century. And it is precisely this element which is the ‘variable' in the analysis. Capital can always find cheap labour power and raw material in the underdeveloped regions: this was true both before and after the incorporation of the colonies and semi-colonies into the capitalist world economy, both in the ascendant and decadent phases of capital. But once the solvent demand of the regions ceases to be ‘extra-capitalist', once the bulk of it is integrated into capitalist relations of production, global capital has no new outlets for the realisation of that fraction of the surplus value earmarked for accumulation. It has lost its capacity to continuously expand the world market. Now the ‘colonial regions' are themselves producers of surplus value, competitors with the metro- poles. Labour power and raw materials in these regions may still remain cheap, they may remain areas of profitable investment, but they no longer help world capital with its problems of realisation: they have become part of the problem. Moreover, this incapacity to expand the world market to anything like the degree required by the productivity of capital also deprives the bourgeoisie of one of the main counter-tendencies to the falling rate of profit: increasing the mass of profit by producing and selling an increased amount of commodities. Thus the predictions of the Communist Manifesto are borne out:

"The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and destructive crises, and by diminishing the means whereby crises are prevented."

It is Rosa Luxemburg's theory of imperialism which most clearly continues Marx's thought on this question.

LUXEMBURG'S CONCEPTION OF IMPERIALISM - AND ITS CRITICS

"Imperialism is the political expression of the accumulation of capital in its competitive struggle for what remains still open of the non-capitalist environment. Still the largest part of the world in terms of geography, this remaining field for the expansion of capital is yet insignificant as against the high level of development already attained by the productive forces of capital; witness the immense masses of capital accumulated in the old countries which seek an outlet for their surplus product and strive to capitalize their surplus value, and the rapid change-over to capitalism of the pre-capitalist civilisations. On the international stage, then, capital must take appropriate measures. With the high development of the capitalist countries and their increasingly severe competition in acquiring non-capitalist areas, imperialism grows in lawlessness and violence, both in aggression against the non-capitalist world and in ever more serious conflicts among the competing capitalist countries. But the more violently, ruthlessly and thoroughly imperialism brings about the decline of non-capitalist civilisations, the more rapidly it cuts the very ground from under the feet of capitalist accumulation. Though imperialism is the historical method for prolonging the career of capitalism, it is also a sure means of bringing it to a sure conclusion. This is not to say that capitalist development must be actually driven to this extreme: the mere tendency towards imperialism of itself takes forms which make the final phase of capitalism a period of catastrophe." (Luxemburg, Accumulation of Capital, chap 31, p.446)

As can be seen from this passage, Luxemburg's definition of imperialism concentrates on the basic terms of the problem, viz, the accumulation process, and in particular the phase of the process concerned with realization, rather than on the super-structural ramifications of imperialism. Elsewhere, however, she shows that the political corollary of imperialist expansion is the militarization of society and the state: the exhaustion of bourgeois democracy and the development of openly despotic forms of capitalist rule; the brutal depression of workers' living standards in order to maintain the grossly inflated military sector of the economy. Although the Accumulation of Capital contains some contradictory ideas about militarism as a "province of accumulation", Luxemburg was basically correct in seeing the war economy as an indispensable characteristic of imperialistic, declining capitalism. But Luxemburg's basic analysis of the driving force behind imperialism has been the subject of numerous criticisms. The most important of these was written by Bukharin in his Imperialism and the Accumulation of Capital (1924). The bulk of his arguments against Luxemburg's theory have been echoed recently by the CWO (see RP 6 ‘The Accumulation of Contradictions'.) We want to deal here with the two most important criticisms raised by Bukharin.

1) According to Bukharin, Luxemburg's theory that imperialism is motivated by the search for new markets makes the imperialist epoch indistinguishable from all previous epochs of capital:

"Trade capitalism and mercantilism, industrial capitalism and liberalism, finance capital and imperialism - all these phases of capitalist development disappear or dissolve into capitalism as such". (Imperialism and the Accumulation of Capital, chap 4, p.253)

And for the CWO,

"...her rationale for imperialism based on ‘saturated markets' is extremely weak and inadequate. If, as Luxemburg admitted... the capitalist metropoles still contained pre-capitalist enclaves (e.g. serfs, peasants) why does capitalism have to expand overseas and away from the capitalist metropoles from the very beginning of its existence? Why doesn't it first bring all the areas closest at hand within the capital-wage labour relationship if it merely seeks for new markets? The explanation is to be found not in the need for new markets but in the search for raw materials and the maximisation of profit. Second, Luxemburg's theory implies that imperialism is a permanent characteristic of capitalism. As capitalism, for Luxemburg, has always sought to extend the market in order to accumulate, her theory cannot distinguish between the original expansion of trade and money economies at the dawn of capitalism in Europe and its later imperialist expansion... mercantile capital was necessary for the original accumulation of capital but this is a qualitatively different phenomenon from the capitalist drive to accumulate once it is established as the dominant mode of production." (RP 6 p.18-19)

In this passage the CWO's virulence against ‘Luxemburgism' outdoes even Bukharin's sharp polemic. A number of points should be made before we proceed any further. First, Luxemburg never said that imperialist expansion was aimed ‘merely' at finding new markets: she clearly portrayed its planetary quest for cheap labour and raw materials, as the CWO themselves note on the same page of RP 6. Secondly, it is astonishing to present capitalism's need to "extend the market in order to accumulate" as a discovery of Luxemburg, when it is a fundamental position defended by Marx against Say and Ricardo, as we have already seen. Bukharin himself in no way denied that imperialism was looking for new markets; in fact he identifies this as one of the three motive forces behind imperialist expansion:

"We have laid bare three fundamental motives for the conquest policies of modern capitalist states: increased competition in the sales markets, in the markets of raw materials, and for the sphere of capital investment. These three roots of the policy of finance capital, however, represent in substance only three facets of the same phenomenon, namely of the conflict between the growth of productive forces on the one hand and the ‘national' limits of the production organisation on the other." (Imperialism and World Economy, chap 8, p.104)

Nevertheless, the charge remains: for Lenin, Bukharin and others the ‘export of capital' rather than of ‘commodities' distinguishes the imperialist phase of capital from previous phases. Does Luxemburg's theory ignore this distinction and thus imply that imperialism was a feature of capitalism from the beginning?

If we refer back to the passages by Luxemburg quoted in this text, particularly the long citation from Anti-critique, we can see that Luxemburg herself clearly distinguished between the phase of primitive accumulation and the imperialist phase, which is unquestionably presented as a definite stage in the world development of capital. Are these just empty words or do they correspond to the substance of Luxemburg's theory?

In fact there is no contradiction in Luxemburg's analysis here. Imperialism properly speaking begins after the 1870's when world capitalism attains a significant new configuration: the period of the constitution of national states in Europe and North America is over, and instead of having a situation where Britain is the ‘workshop of the world' we have several highly developed national capitalist ‘workshops' competing for domination of the world market - competing not only for each others' home markets but also for the colonial market. It is this situation which provokes the depression of the 1870's - the "seeds of capitalist decadence" precisely because the decline of the system is synonymous with the division of the world market between competing capitals - with the transformation of capital into a ‘closed system' in which the problem of realization becomes insoluble. But of course in the 1870's, the possibility of breaking out of the closed circle still existed, and this largely explains the desperate haste of imperialist expansion in this period.

It is true, as the CWO point out, that capital always sought colonial markets, but there is no mystery in this. Capitalists will always look for areas of profitable exploitation and easy selling even when the markets available ‘at home' have not been completely saturated. It would be absurd to expect capitalism to follow an even course of development - as if the early capitalists got together and said to themselves: ‘first we'll exhaust all the pre-capitalist sectors in Europe, then we'll expand into Asia, then Africa, etc'. Nevertheless behind the chaotic growth of capitalism, a definite pattern can be seen: the colonial plunder of early capitalism; the use of this plunder to accelerate the industrial revolution in the metropoles; then, on the basis of industrial capital, a new thrust into the colonial regions. To be sure, the first period of colonial expansion was not a response to overproduction at home, but corresponded to the necessities of primitive accumulation. We can only begin to talk about imperialism when colonial expansion is a response to the contradictions of fully developed capitalist production.

To this extent we can see the beginnings of imperialism when the commercial crises of the mid-19th century act as a spur to the expansion of British capital towards the colonies and semi-colonies. But as we have said, imperialism in the full sense of the term implies a competitive relationship between capitalist states; and it was when the metropolitan market had been decisively carved up by several capitalist giants that imperialist expansion becomes an unavoidable necessity for capital. It is this which explains the rapid change in British colonial policy in the latter part of the 19th century. Prior to the depression of the 1870's, to the sharpening of competition from the US and Germany, British capitalists were questioning whether the existing colonies were worth the expense of their upkeep and were reluctant to take on new colonies; now they were convinced that Britain had to maintain and extend its colonial policy.

The scramble for colonies at the-end of the 19th century wasn't the result of a sudden fit of madness on the part of the bourgeoisie, or a vainglorious search for national prestige, but a response to a fundamental contradiction in the accumulation cycle: the growing concentration of capital and the carving up of the market in the metropoles, simultaneously aggravating the falling rate of profit and the gap between productivity and solvable markets, i.e. the problem of realization.

The idea that the need to open up new markets was a determining element in imperialist expansion is, contrary to the CWO's claim in RP6 (p.19), not contradicted by the fact that the bulk of world trade in this period was conducted between the capitalist metropoles themselves. This phenomenon was noted by Luxemburg herself:

"...with the international development of capitalism, the capitalization of surplus value becomes ever more urgent and precarious, and the substratum of constant and variable capital becomes an ever-growing mass - both absolutely and in relation to the surplus value. Hence the contradictory phenomena that the old capitalist countries provide ever larger markets for, and become increasingly dependent upon, one another, yet on the other hand compete ever more ruthlessly for trade relations with non-capitalist countries." (Accumulation, chap 27, p.367).

The ‘external' market for global capital was like a breathing space in a prison that was growing more and more crowded. The more the breathing space shrank relative to the overcrowded population of the prison, the more desperately the prisoners fought over it.

Neither does the fact that this period saw a great increase in the export of capital mean that imperialist expansion had nothing to do with a markets problem. The export of capital to the colonial regions was necessary not only because it allowed capitalism to produce in areas where labour power was cheap, and hence raise the rate of profit. It also extended the world market:

a) because capital exports include the export of producer goods which are themselves commodities which must be sold.

b) because exporting capital - whether in the form of money capital for investment, or producer goods - served to extend the entire market for capitalist production by implanting it into new regions and by bringing more and more solvent buyers into its orbit. The most obvious example of this is the building of railways, which served to extend the sale of capitalist commodities to millions and millions of new buyers.

The ‘problem of the market' can help to explain one of the most striking characteristics of the way imperialism extended capitalist production across the world: the ‘creation' of underdevelopment. For what the imperialists wanted was a captive market - a market of buyers who wouldn't become competitors with the metropoles by becoming capitalist producers themselves. Hence the contradictory phenomenon whereby imperialism exported the capitalist mode of production and systematically destroyed pre-capitalist economic formations - while simultaneously holding back the development of native capital by ruthlessly plundering the colonial economies, subordinating their industrial development to the specific needs of the metropolitan economy, and bolstering up the most reactionary and submissive elements in the native ruling classes. This is why, contrary to Marx's expectations, capitalism did not create a mirror image of itself in the colonial regions. In the colonies and the semi-colonies there were to be no fully formed, independent national capitals with their own bourgeois revolutions and healthy industrial bases, but rather, stunted caricatures of the metropolitan capitals, weighed down by the decomposing remnants of the previous mode of production, industrialised in pockets to serve foreign interests, with bourgeoisies that were weak, born senile, both at the economic and at the political levels. Imperialism thus created underdevelopment and will never be able to abolish it; at the sane time it ensured that there could be no national bourgeois revolutions in the backward zones. And, it is to no small extent that these profound repercussions of imperialist development - repercussions which are still only too apparent today, as the ‘Third World' sinks into barbarism - have their origins in imperialism's attempt to use the colonies and semi-colonies to solve its markets problem.

2) According to Bukharin, Luxemburg's definition of imperialism means that imperialism ceases to exist when there's no remnant of a non-capitalist milieu to be fought over:

"...it follows from this definition that a fight for territories that have already become capitalist is not imperialist, which is utterly wrong... it follows from the same definition that a fight for already ‘occupied' territories is not imperialism either. Again, this factor of the definition is utterly wrong... Here is a striking example to illuminate the untenability of Luxemburg's conception of imperialism. We mean the occupation of the Ruhr territory by the French (1923-24). From Rosa Luxemburg's point of view this is not imperialism since (1) the ‘remains' are missing, (2) there is no non-capitalist milieu, and (3) the Ruhr territory already had an imperialist owner before the occupation." (Imperialism and the Accumulation of Capital, chap 4, p.253).

This argument is reiterated in the naïve question posed by the CWO at the recent international conference in Paris, "Where are the markets pre-capitalist or otherwise, in the war Ethiopia and Somalia fought over the Ogaden Desert?" Such questions betray an extremely shallow understanding of what Luxemburg was saying, as well as a regrettable tendency to see imperialism not as "an innately international condition, an indivisible whole" but as "the creation of any one or any group of states": in other words, it looks at the problem from the fragmented point of view of individual national capitals.

If Bukharin had troubled to quote from more than the first sentence of the passage from Luxemburg's Accumulation, which we have cited in full, he would have shown that, for Luxemburg, the growing exhaustion of the non-capitalist milieu meant not the end of imperialism, but the intensification of imperialist antagonisms between the capitalist states themselves. This is what Luxemburg meant when she wrote that "imperialism brings catastrophe as a mode of existence back from the periphery of capitalist development to its point of departure" (Anti-critique). In the final phase of imperialism, capital is plunged into a horrendous series of wars where each capital or bloc of capitals, unable to expand ‘peacefully' into new areas, is forced to seize the markets and territories of its rivals. War becomes the mode of survival of the whole system.

Of course Luxemburg expected proletarian revolution to put an end to capitalism well before the non-capitalist milieu had shrunk to the insignificant factor that it is today. The explanation of how decadent capitalism has prolonged its existence in the virtual absence of this milieu belongs to another text. But as long as we continue to see imperialism as "a product of a particular stage of ripeness in the world development of capital, an innately international condition, an indivisible whole", we can still see the relevance of Luxemburg's definition. It only needs to be modified to the extent that today, imperialist policies of conquest and domination are brought about by the almost complete disappearance of an external market, rather than being a direct struggle for pre-capitalist remnants. The important thing to emphasise is that it is a global change in the evolution of world capital - the exhaustion of the external market - which compels each particular segment of capital to behave in an imperialist manner.

To return to Bukharin's objections: it is pointless to look for ‘non-capitalist milieus' in every imperialist conflict, because it's capital as a whole, global capital, which requires an external market to expand into. For the individual capitalist, capitalists and workers offer a perfectly good market for his goods; similarly , for an individual national capita), a rival capitalist nation can be used to absorb its surplus value. Not every market fought over by imperialist states ever was or is a pre-capitalist one, and this is less and less so the more these markets become incorporated into world capital. Neither is every inter-imperialist struggle a struggle directly for markets at all. In today's situation, the global rivalry between the US and Russia is conditioned by the impossibility of progressively expanding the world market. But many - perhaps most - of the specific aspects of the foreign policies of the US and Russia are aimed at securing strategic/military advantages over the other bloc. For example: Israel isn't much of a market for the US, or Cuba for Russia. The outposts are kept afloat mainly for their strategic/political value, at considerable expense to their backers. On a smaller scale; Vietnam's pillaging of Cambodia's rice fields is just that: pillage. Cambodia hardly constitutes a ‘market' for Vietnamese industry. But Vietnam is forced to pillage Cambodia's rice fields because its industrial stagnation leaved its agricultural sector incapable of producing sufficient food for the Vietnamese population. And its industrial stagnation is brought about by the fact that the world market can't expand, is already divided up, and won't permit any newcomers. Once again, it's only possible to make sense of these questions by beginning from a global standpoint.

POLITICAL CONCLUSIONS: IMPERIALISM AND THE IMPOSSIBILITY OF NATIONAL WARS

The practical issues in the theoretical debate on imperialism have always been centred round one question: does the epoch of imperialism make revolutionary national wars more likely, as Lenin argued, or does it make them impossible, as Luxemburg insisted? For us, history has indisputably verified Luxemburg's assertion that:

"The general tendency of present day capitalist policies determine the policies of the individual states as their supreme is blindly operating law, just as the laws of economic competition determine the conditions under which the individual manufacturer shall produce." and that consequently, "In the era of the unleashing of this imperialism, national wars are no longer possible. ‘National interests serve only as the pretext for putting the labouring masses of the people under the domination of their mortal class enemy, imperialism." (Junius Pamphlet)

The first citation has the following concrete applications in this epoch, both of which resoundingly confirm the second one.

a) Every nation, every aspiring bourgeoisie, is forced to align itself with one of the dominant imperialist blocs, and thus to conform to and carry out the needs of world imperialism.. Again in Luxemburg's words:

"The small nations, the ruling classes of which are the accomplices of their partners in the big states, constitute only the pawns on the imperialist chessboard of the great powers, and are used by them, just like their own working masses, in wartime, as instruments, to be sacrificed to capitalist interests after the war." (Junius Pamphlet)

Contrary to Lenin's hope that imperialism would be weakened by the revolt of the ‘oppressed nations', all national struggles in this epoch have been transformed into imperialist wars by the irreversible domination of the great powers; as Lenin himself recognised, imperialism means that the whole world is divided up by the great capitalist states, "So that in the future a re-division is possible, i.e. territories can only pass from one ‘owner' to another, instead of passing as ownerless territories to an ‘owner'." (Imperialism, Highest Stage...) The experience of the last sixty years has shown that what Lenin applied to ‘territories' can be applied to all nations as well. None can escape the stranglehold of imperialism. This is patently obvious today when the world has, since 1945, been divided into two permanently constituted imperialist blocs. As the crisis deepens and the blocs reinforce themselves, it becomes clear that even capitalist giants like Japan and China must humbly submit to the dictates of their US overlord. In such a situation, how can there be any illusions about national independence for the chronically weak countries of the ex-colonial regions?

b) Every nation[5] is compelled to act in an imperialist manner towards its rivals. Even while subordinating themselves to a dominant bloc, each nation is forced to try to subject other, smaller nations to its hegemony. Luxemburg noted this phenomenon during World War 1, in relation to Serbia:

"Serbia is formally engaged in a national war of defence. But its monarchy and its ruling class are filled with expansionist desires as are the ruling classes in all modern states... Thus Serbia is today reaching out towards the Adriatic Coast where it is fighting out a real imperialist conflict with Italy on the backs of the Albanians." (Junius Pamphlet)

The asphyxiated state of the world market makes decadence the epoch of war of each against all. Far from being able to escape this reality, small nations are forced to adapt themselves to it completely. The extreme militarization of the more backward capitals, the frequent outbreak of wars between local states in the underdeveloped regions, are chronic indicators of the fact that "no nation can hold aloof" from imperialist policies today.

According to the CWO, "the idea that all countries are imperialist undermines the idea of imperialist blocs." (RP 12, p.25), but this is only the case if you circumscribe the discussion in advance by insisting that only ‘independent' powers are imperialist. It's true that every nation has to insert itself into one or other of the imperialist blocs, but they do this because it is the only way they can defend their own imperialist interests. Conflicts and conflagrations within each bloc are not eliminated (and even take the form of open war, e.g. the Greek-Turkish war of 1974); they are simply subordinated to a more overriding conflict. The imperialist blocs, like all bourgeois alliances, can never be truly unified or harmonious. To present them as such, or at least to present the weaker nations of the bloc as nothing but puppets of the dominant power makes it impossible to understand the real contradictions and conflict that emerge within the bloc - not only between the weaker nations themselves, but also between the needs of the weaker nations and the dominant power. The fact that these conflicts are nearly always settled in favour of the dominant state doesn't make them any less real. Similarly, ignoring the imperialist drives of the smaller nations makes it impossible to clearly explain the outbreak of wars between these states. The fact that they are invariably used to further the interests of the blocs doesn't mean that they are the pure product of secret decisions in Washington or Moscow. They spring from real tensions and difficulties at the local level, difficulties which inevitably give rise to an imperialistic response from the local states. To say, as the CWO does, that the smaller nations merely have ‘imperialist tendencies' hardly makes sense when Vietnam, for example, invades the neighbouring state of Cambodia, topples its government, installs a pliable regime, plunders the economy and pushes for the formation of an ‘Indo-Chinese Federation' under the Vietnamese hegemony. Vietnam doesn't just have imperialist appetites: it greedily indulges these appetites by gobbling up its neighbours!

If we reject the idea that these policies are the expression of a worker's state fighting a revolutionary war; if we decline to see the Vietnamese ruling class waging a historically progressive bourgeois struggle for national independence, then there is only one word for policies and actions of this kind: imperialism.

IMPERIALIST WAR OR PROLETARIAN REVOLUTION

If all ‘national struggles' serve the interests of imperialist states large and small, then it is impossible to speak of wars of national defence, ‘national liberation', or ‘national revolutionary' movements in this epoch. It is therefore necessary to reject any attempt to reintroduce the CI's position on the national and colonial question. Thus, for example, the Nucleo Communista Internazionalista seems to suggest that it would be possible to apply the CI's theses in the underdeveloped regions, if a real communist party existed. For them "the constitution of an independent national state, economic and territorial unification, agrarian reform, nationalisation" can still be momentary tasks in the process of developing the international proletarian revolution in the extra-metropolitan zones. (‘Notes for an Orientation of the National and Colonial Question' Texts of the 2nd International Conference in Paris. Vol.1). The NCI's concern is that the proletariat and its vanguard cannot be indifferent to the social movements of the oppressed masses in these regions, but must provide leadership to their revolts, linking them to the world communist revolution. This is quite correct; but the proletariat must also recognize that the ‘national' element does not come from the oppressed and exploited masses, but from their oppressors and exploiters - the bourgeoisie. The minute these revolts are encompassed into a struggle for ‘national' tasks they are being pushed onto the terrain of the bourgeoisie. And in today's historical context national means imperialist:

"Today the nation is but a cloak that covers imperialistic desires, a battle cry for imperialistic rivalries, the last ideological measure with which the masses can be persuaded to play the role of cannon fodder in imperialistic war." (Junius Pamphlet)

This truth has been confirmed in all the so-called ‘national liberation' movements from Vietnam to Angola, from Lebanon to Nicaragua. Before and after their accession to power, bourgeois national liberation forces invariably function as the agents of one or the other of the great imperialist powers. The moment they seize the state, they begin to pursue their own petty imperialist aims. Therefore, it's not a question of leading the revolt of the oppressed masses through a ‘moment' of national, bourgeois-democratic struggle, but of leading them away from the bourgeois national terrain, onto the terrain of the proletarian class war. ‘Turn the imperialist war into a civil war' is the proletarian watchword in all parts of the world today.

The present imperialist character of all factions of the bourgeoisie and of all their political projects, is not something that can be reversed, even momentarily, not even by the best communist party in the world. It is a profound historical reality, based on an objectively determined social evolution. Thus:

"The epoch of imperialist wars and proletarian revolutions no longer pits reactionary states against progressive states in which, with the aid of the popular masses, the national unity of the bourgeoisie is forged, in which the geographic and political base is built to act as a springboard for the development of the productive forces.

"They no longer pit the bourgeoisie against the ruling classes in the colonies in colonial wars that provide air and space to capitalist productive forces that are already strongly developed.

"In this epoch imperialist states, economic entities which divide and re-divide the world, are pitted against each other, incapable as they are of containing class contrasts and economic contradictions in any way than by carrying out, through war, a gigantic destruction of inactive productive forces and innumerable proletarians who have been thrown out of production.

"From the point of view of historic experience we can say that the character of the wars that periodically convulse capitalist society as well as the corresponding proletarian policy, must be determined not by the particular - and often equivocal - aspects under which these wars may appear, but by their historical context, based on the level of economic development and the maturity of class antagonisms." (Jehan, op cit)

If we conclude that, in today's historical context all wars, all policies of conquest, all competitive relations between capitalist states, have an imperialist nature, we are not offending against Bukharin's justified stipulation that the character of wars and policies of conquest must be judged by looking at "what production relations are being strengthened or extended by war"; we are not undermining the precision of the term imperialism by overextending its use. For if marxists identified national wars as wars which served a progressive function by extending capitalist relations of production when they could still serve as a basis for the development of the productive forces, they contrasted wars of this kind with imperialist wars - wars that are historically regressive in that they serve to maintain capitalist relations when they have become a fetter on further development. Today, all the bourgeoisie's wars and foreign policies seek to preserve a rotten, decadent mode of production; all of them therefore can be justly defined as imperialist. Indeed, one of the most characteristic signs of the decadence of capitalism is that, whereas in its ascendant phase:

"war had the function of assuring an expansion of the market, and so of the production of the means of production, in the (decadent) phase production is essentially geared to the production of the means of destruction, i.e. to war. The decadence of capitalist society is strikingly expressed by the fact that instead of wars to serve economic development (as in the ascendant period) we now have economic activity geared essentially to war..." (Report on the International Situation., Gauche Communiste de France, 1945).

Although the aim of capitalist production remains the production of surplus value, the growing subordination of all economic activity to the needs of war represents a tendency for capital to negate itself. Imperialist war, born out of the bourgeoisie's lust for profit, takes on a dynamic in which the rule of profitability and exchange are more and more thrown to the wind. Calculations of profit and loss, the normal relations of sale and purchase, are left in the wake of capital's mad drive to self-destruction. Today humanity faces the logical consequences of the self-cannibalization of capital: a nuclear holocaust which could destroy the entire human race. This tendency towards capital's self-negation in war is accompanied by the universal militarization of society: a process which is horrifyingly apparent in the third world and in the Stalinist regimes, but which, if the bourgeoisie has its way, will soon be a reality for the workers in the western ‘democracies' as well. The total subordination of economic, social and political life to the needs of war: that is the hideous reality of imperialism in all countries today. More than ever before, the alternative posed by Rosa Luxemburg in 1915 confronts the world working class:

"Either the triumph of imperialism and the destruction of all culture as in ancient Rome, depopulation, desolation, degeneration, a vast cemetery; or, the victory of socialism, that is, the conscious struggle of the international proletariat against imperialism." (Junius Pamphlet)

CDW, October 1979.

 

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[1] See the ICC pamphlet Nation or Class for a more detailed discussion.

[2] Here we should correct a misconception held by the CWO, viz. their rejection of the idea "that Luxemburg's economics lay at the base of her views on the national question: the latter preceded the former by over a decade" (RP 12, p. 25). Evidently the CWO are unfamiliar with the following passage written by Luxemburg in 1898 and published in the first edition of Social Reform or Revolution:

"When we examine the present economic situation we must certainly admit that we have not yet entered that phase of full capitalist maturity which is presupposed by Marx's theory of periodical crises. The world market is still in a stage of expansion. Thus, although on the one hand we have left behind those sudden impetuous openings up of the new areas to capitalist economy which took place from time to time up to the seventies, and with them the earlier, so to speak, youthful crises of capitalism, we have not yet advanced to that degree of development, including the full expansion of the world market, which would produce periodic collisions between the productive forces and the limits of the market, or, in other words, the real economic crises of fully developed capitalism. . .Once the world market is more or less fully expanded so that it can no longer be suddenly extended, then the ceaseless growth in the productivity of labour will sooner or later produce those periodic collisions between the productive forces and the limits of the market which will become more and more violent and acute by repetition." (cited in Sternberg, Capitalism and Socialism on Trial, p.72)

[3] ‘Economic Theories and the Struggle for Socialism', IR 16.

[4] For further discussion of this point, see ‘Marxism and Crisis Theory', IR 13.

[5] When we say ‘every nation is imperialist' it's clear we are making a generalization, and, as with all generalizations, exceptions can be found, examples of this or that state which never appears to have committed any imperialist crimes, but such exceptions don't invalidate the general point. Nor can the issue be avoided by posing trite questions like "Where is the imperialism of the Seychelles, or Monaco, or San Marino?" We are not concerned here with petty tax havens or jokes of history but with national capitals which - though not independent - have an identifiable existence and activity on the world market.

 

In issue no. 10 of the International Review (June-August 1977) we introduced our readers to the ‘Mexican Workers Group’ of Mexico, a group which emerged in the darkest period of the workers’ movement. Its appearance in the years 1937 to 1939 was not a sign of a resurgence of the workers’ movement but a last gasp of communist class consciousness against the bloody cynicism of triumphant capitalism, ready to celebrate its victory in the unleashing of World War II.

The evolution towards state capitalism, accelerated by the criteria and the preparations for world war, found its main expression in the campaign for nationalizations. From De Man to Blum, from the CGT to Stalinist parties, from the British Labor Party to the Front Populaire, nationalization became the platform of the left of capital which presented this to the workers as path to socialism. The Trotkyists and Trotsky himself, as well as other extreme leftists, did not escape this ideology. They fell into the fray and all sang the same tune: although nationalizations weren’t yet exactly socialism, they were supposedly a very progressive step which the working class had to support with all its might.

Today, like in the thirties, nationalizations continue to serve as the economic program of the left, as we can see in the now deceased ‘Programme Commun’ in France; the extent of nationalizations called for serves as a sign of ‘radicalism’ and as a proletarian seal of approval to hide the capitalist nature of these leftist parties. Today just like yesterday, Trotksyists, Maoists, anarchists and other leftists hide the truth. They try to convince the workers that these measures will weaken capital; but in fact nationalizations only strengthen the capitalist state. Today just like yesterday revolutionaries must denounce the demagogy and demonstrate theoretically and concretely the capitalist, anti-working class content of nationalizations. We hope to contribute to this task by publishing this study of the Mexican Left printed in the first issue of their review, Comunismo in 1938.

By nationalizing industries the bourgeoisie protects itself from the proletarian revolution

Frederick Engels wrote in 1878:

“But..... conversion into state property (does not deprive) the productive forces of their character as capital…..the modern state, too, is only the organization with which bour­geois society provides itself in order to maintain the general external conditions of the capitalist mode of product­ion against encroachments either by the worke­rs or by individual capitalists. The modern state, whatever its form, is an essentially capitalist machine, the state of the capitali­sts, the ideal aggregate capitalist. The more productive forces it takes over into its possesses the more it becomes a real aggregate capitalist, the more citizens it exploits. The workers remain wage-workers, proletarians. The capitalist relationship is not abolished, rather it is pushed to the limit. But at this limit it changes into its opposite. State ownership of the productive forces is not the solution of the conflict, but it contains within itself the formal means, the handle to the solution…..The proletariat seizes state power…..” (F. Engels, Anti-Duhring, p. 360, Peking 1976.)

It seems as though these clear and simple words by Karl Marx’s comrade, uttered 60 years ago, refer expressly to the recent transformation of the oil industry and railways into the property of the Mexican capitalist state. it is of primordial importance for the Mexican proletariat to understand the fundamental truth contained in the passage:

“… the modern state, too, is only the organization with which the bourgeois society provides itself in order to maintain the general external conditions of the capitalist mode of production against encroachments either by the workers or by individual capitalists. The modern state, whatever its form, is an essentially capitalist machine, the state of the capitalists, the ideal aggregate capitalist.”

How many are there today, among those who call themselves ‘Marxists’, who would recognize the truth of these affirmations of one of the foun­ders of Marxism? How many are there who would admit that these affirmations relate to all capitalist states, whatever their form, ie., including the capitalist states which assume a ‘workerist’ title? How many would dare to say that these ‘workerist’ states also exploit workers and that this exploitation grows more and more as these states incorporate as their property more productive forces? How many wou­ld dare to say that in each new ‘nationalizati­on’, the capitalist relations between owners and producers -- (in other words, between capi­talists and workers), far from being extingui­shed through such measures, are sharpened and brought to a pitch? Who today dares to say that these affirmations refer also to the recent ‘nationalizations’ of the oil industry and the railways?

Who in Mexico today dares to say that all these affirmations by Frederick Engels are relevant to the recent ‘nationalizations’ of oil and railways? Why don’t the ‘Marxists’ of Mexico apply the teachings of Marxism to the problems of today?

Why don’t they, to start with, clarify the fact that ‘nationalization’ can under no circumsta­nce mean the property of ‘the nation’, but only and exclusively the property of the state; in other words, the property of one part of ‘the nation’, namely, of the bourgeoisie, whose instrument is the state? To put it diff­erently, why don’t they explain that by becom­ing ‘nationalized’ property simply passes from the hands of the ‘collective capitalist’ (using Engels’ phrase), that is, the state of the capitalists.

The real meaning of the nationalization of the oil industry and the railways

What is then, according to Marxism, the extent and meaning of the ‘expropriation’ of the prop­erty of the oil companies? In simple words: this property has passed from the hands of one set of exploiters (the oil companies) to the hands of another (the Mexican state). Only that, no more, no less. The nature of this prop­erty has not changed at all: it remains capi­talist property as before. The workers remain in the same position as proletarians: they have to sell their labor power to the owner of the means of production; in other words, to the owner of the oilfields, of the machinery utilized, of the distribution network. And this owner (today the Mexican state) pockets the surplus value produced by the workers -- or, what is the same – exploits them. Put differently, the Mexican oil industry has become a single gigantic PETRO-MEX (the state oil corporation), with ‘national’ foremen and specialists instead of foreign ones, and the main task of this large petromex is exactly the same as the one of the previous small petromex: impede or break strikes, as it did with the protest strike of last year.

Just like before the expropriation, the two fundamental classes of capitalist society -- capitalists and proletarians, exploiters and exploited, confront each other in the present Mexican oil industry. The oil industry remains what it was before: the bastion of the capita­list system in Mexico -- only that this bastion is today politically stronger than before. Instead of confronting many foreign companies only protected by the Mexican state, workers today confront directly this state, with its workerist demagogy, with its ‘conciliation’ boards, its police, its prisons, and its army. The struggle of the oil workers is today a tho­usand times more difficult than before. The state continues protecting capitalist property; and therein resides its fundamental role. But nowadays this function has changed in form -- to make it more effective and safeguard the oil industry from workers’ attacks, the state has declared as its own that which it has to defend, namely, the property of the American and Engl­ish capitalists.

The ‘workerist’ state defends the capitalist system against the proletarian revolution

According to the system of Marxism, the state is an institution born from the division of society into classes with irreconcilable interests. Its function is to perpetuate this division and with it “the right that the owning class has of exploiting the class that owns nothing and the domination of the former over the latter.” (Frederick Engels)

The modern state is the organization that the bourgeoisie utilizes to defend its collective interests, its class interests, against the attacks of the workers on the one hand and the individual capitalists on the other (especially against those capitalists and companies which do not want to sacrifice part of their individ­ual interests in favor of the defense of the collective interests of the whole bourgeois class against the workers). All the activities of the capitalist state, even if it calls itse­lf ‘workerist’, serve this one goal: the strengthening of the capitalist system. In the expanding phase of capitalism, the streng­thening of capitalism had a progressive charac­ter, in spite of the growing oppression that resulted from it, because in those times hist­ory had not yet put the proletarian revolution on the order of the day. Capitalist progress was the only possible progress. Today, in its phase of decomposition, that is to say, in the imperialist phase in which we are living, the reinforcement or the ‘reform’ of capitalism has an extremely reactionary and counter-revolutionary character, because today only the destruction of capitalism can save humanity from barbarism. The present role of the state is to defend capitalism against the proletarian revolution. In the imperialist phase the capitalist state -- whatever its form -- is the true incarnation of reaction and counter-revolution. Today there doesn’t and can’t exist a progressive capitalist state. They are all reactionary and counter-revolutionary. To reinforce the state means to prolong the life of this barbarous capitalist system. Only those who struggle for the destruction of the capitalist state are on the side of the proletariat and all the exploited and oppressed, struggling with them for their emancipation via the proletarian revolution.

When are nationalizations progressive?

The above mentioned words by Engels regarding the meaning of the transformation of individual capitalist property into joint-stock companies and their conversion into property of the capitalist state referred to the ascendant phase of capitalism, to the phase of its expan­sion, when the capitalist system was progressi­ve. During that phase, the concentration of the productive forces in the hands of capitali­st groupings and in the capitalist state const­ituted an important step forward, in the sense of the growing socialization of production, which in turn posed for humanity the task of socializing the property of those productive forces. We quote Engels again:

“The period of industrial boom with its unlim­ited credit inflation no less than the crash itself operating through the collapse of large capitalist establishments, drives towards that form of the socialization of larger masses of means of production which we find in the various kinds of joint-stock companies. Many of these means of production and communi­cation are so colossal from the outset that, like the railways, they exclude all other forms of capitalist exploitation. At a cert­ain stage of development this form, too, no longer suffices; ... the state, the official re­presentative of capitalist society, is (fina­lly) constrained to take over the direction of production. This necessity for conversion in­to state property first appears in the big communication organizations: the postal ser­vice, telegraphs and railways.” (Frederick Engels, Anti-Duhring, p.358-59)

But, adds Engels, “...it is only when the means of production or communication have actually outgrown direction by joint-stock companies and therefore their nationalization has become economically inevitable -- it is only then that this nationalization, even when carried out by the state of today, represents an economic ad­vance, the attainment of another preliminary step towards the seizure of all the productive forces by society itself. But since Bismarck became keen on nationalizing, a certain spurious socialism has recently made its appearance -- here and there even degenerating into a kind of flunkeyism -- which without more ado declares all nationalization, even the Bismarckian kind, to be socialistic. To be sure, if the nationa­lization of the tobacco trade were socialistic, Napoleon and Metternich would rank among the founders of socialism. If the Belgian state, for quite ordinary political and financial re­asons, constructed its own main railway lines, if Bismarck, without any economic compulsion, nationalized the main Prussian railway lines simply in order to be better able to organize and use them in face of war, in order to train railway officials as the government’s voting cattle, and especially in order to secure a new source of revenue independent of parliamen­tary votes, such actions were in no sense socialistic measures, whether direct or indir­ect, conscious or unconscious. Otherwise, the Royal Maritime Company, the Royal Porcelain Manufacture, and even the regimental tailors in the army would be socialist institutions.” (Engels, ibid, p.359).

Nobody will say that the nationalization of the Mexican oil industry was economically inevitable due to the fact that its administering -- from the standpoint of production -- was over­whelming the control by private companies. And nobody predicts any economic progress res­ulting from the transformation of this industry, which belonged to companies a thousand times better organized and more powerful than the Mexican state which now owns it.

In reality, the only words from the cited Engel’s quote which are relevant to the recent nationalizations in Mexico are those which talk about ‘political and financial reasons’, and of the concern by the state in creating for itself a ‘new source of revenue’, and converting the railway officials into ‘government voting cattle’.

Such nationalization, says Engels, represents no progress.

The reactionary character of nationalizations in the imperialist phase of capitalism

Only by analyzing the recent nationalizations in Mexico as part of the process of decomposition of capitalism we can understand their true historic significance.

In the ascendant phase of capitalism there was the possibility of progressive nationalizations, although many of them, as we can see in the examples given by Engels, did not have such character. Today, in the phase of decomposit­ion of the capitalist system there isn’t even the possibility of nationalizations with a progressive character, just as there can be not a single progressive measure carried out by capitalist society in decomposition and by its official representative, the capitalist state.

In the ascendant phase of capitalism the initi­al framework for the expansion of production and the concentration of property was the unif­ied national state, whose formation was progressive in comparison with the dispersed feudal associations. But soon the expansion of prod­uction and the concentration of property bypas­sed the limits of the national states. The large joint stock companies took on a greater and greater international character, creating in their fashion an international division of labor, and this, -- in spite of its contradic­tory character -- constitutes in turn one of the most important contributions of capitalism to the progress of humanity.

The greater international character of production began then to clash with the division of the world into national states. ‘The national state’, asserted the First Congress of the Communist International in 1919, ‘after having given a strong push to capitalist development, has become too narrow for the expansion of the productive forces.’

During that phase in which the national state constituted a progressive factor, in other words, in the ascendant phase of capitalism (and the words of Engels cited above refer only to that phase when certain nationalizations could have a progressive character), the conversion of property into joint stock companies, and then into state property was progressive. This was so because, in general, joint stock companies had not yet bypassed the framework of the national state.

But when the joint stock companies became structures encompassing already various states, nationalizations began to change their meaning: they increasingly went against the growing international division of labor. Thus, instead of constituting progress, they meant regression. The only possible progress today is the conversion of the property of the great joint stock companies and that of the capitalist state into property of the proletarian state which will emerge from the communist revolution.

Above all, nationalization during and after the World War threw into sharp relief their reactionary character throughout the whole of the capitalist world. Their objective is no longer the expansion of production, but its restriction – with one significant exception: the war industries!

One of the fundamental goals of nationalizations during World War of 1914-18, and during the recent wars of El Chaco, Ethiopia, Spain and China, was the restriction of production of consumer goods, and the production of means with which to destroy not only what has been previously produced, but the producers themselves. And this is applicable not only to the countries which directly participated in the war, but to all, whether Fascist or democratic governments. The nationalizations by both sides during the Spanish Civil War, and the recent nationalization of the railways and the war industries by France are cases in point. Destruction, not construction, is the great goal of capitalist society in its hour of agony.

While nationalizations in the past were expressions of the growth and expansion of capitalism, in the present they are the opposite. They are the expression of regression and of the more and more violent decomposition of the capitalist system. Before disappearing from the historic scene, capitalism destroys great parts of what it itself has created: the superb machinery of production, and the international division of labor. Capitalism thus, increasingly, subjects the productive forces to the confines of the national states.

Against this, when the proletariat’s hour arrives, it will ‘free the productive forces of all countries from the chains of the national states, thereby unifying all peoples in close economic collaboration.’ (Manifesto of the First Congress of the Communist International)

These are clear words, in irreconcilable opposition to the ideas of those who want to combine the watchwords of the proletarian revolution, which already has an international character, with those of so-called ‘national emancipation.’

The only possibility of liberating the oppressed peoples resides in the destruction of all national states by the victorious proletarian revolution and the unification of the entire world through close fraternal cooperation.

The triumph of the ‘good neighbor’

What we have said in a general way regarding the meaning of nationalizations in the phase of the decomposition of capitalism, needs certain additions and modifications in the case of semi-colonial countries like Mexico.

If it could be possible to place a part of the property of large international companies under the effective control of a small national state, it is clear that such nationalization would not increase the international division of labor created by capitalism; on the contrary, it would undermine and destroy it, thereby revealing its reactionary character, even more than in the case of the large imperialist states.

But, in reality, an effective nationalization on the part of small states is impossible, especially regarding the property of the large international companies, because it is them and their imperialist governments who control completely the economic and political management of small states. Only the imperialist states can nationalize today, either within areas of their direct political control or in the small states controlled by them. The ‘nationalizations’ carried out by the latter are, consequently, nothing but a farce, a change of label. Who is really ‘nationalizing’ is not really the small ‘free and anti-imperialist’ state, but the actual imperialist proprietor.

The only possible change would be that the small state, in our case the Mexican, passes being under the control of some imperialist companies and their state, to being under the control of other companies and their state.

And this is precisely what has happened in the case of the recent oil ‘nationalizations’ in Mexico: the great North American companies (Huasteca-Standard Oil and Gulf) plus their state no longer have to share the control of the oil resources and the whole destiny of Mexico with the English company E1 Aguila (Royal Dutch-Shell), and with their English state. Through the so-called ‘nationalization’, the North American companies have become the exclusive proprietors of what the Mexican bourgeoisie calls ‘our Fatherland’.

What has happened in this case is the only thing that can happen in the imperialist phase of capitalism. All the supposed ‘national redemptions’ inevitably mean the triumph of one or another imperialism. In the case of Mexico the victor has been the famous ‘good neighbor’.

The international bourgeoisie admits this with all frankness, as we can see in the following viewpoint expressed in the Bulletin of the Service Archives of Geneva (we quote from the Ultimas Noticias of 7th June): “From now on the United States is the indisputable masters of all the aspects of Mexican life. The last English (in Latin America) has been razed to the ground. The bridge to South America is now open. The United States has utilized the only possibility of defeating the English presence in Mexico, and it has done so without firing a shot. Today as yesterday they receive Mexican oil, with the difference that now they buy it from the Mexican government, instead of buying it from the oil companies. The prices are the same, the oil is the same, and the future will shortly show how the companies remain the same regarding their North American origins.... “It was Cardenas, hints the Bulletin, who finally helped the United States expel the British. Apparently it was all so simple. Precisely as the naive English were rejoicing at their owning 60% of the Mexican oil, as against up to the 40% owned by the United States, Cardenas grabbed it all. And, while London was raising a storm over the exprop­riations, Washington received the news with extr­aordinary calm... What happened then? The Bulletin suggests that there was a deal, between Washington and Mexico, through which all the oil becomes, in effect, ‘American’, “thereby definitely demolishing the last British fortress in this hemisphere”. This is what a bourgeois newspaper in Switzerland tells us.

E1 Nacional, organ of the Mexican government, gave the same interpretation when it announced the rupture of diplomatic relations with the Eng­lish government. It carried these two headlines side by side: ‘Mexico breaks with England/Talks with the American companies on a good path’.

One doesn’t need a better illustration of the transformation of Mexico into an exclusively North American colony than the flattery yankee imperialism receives in each number of E1 Nacion­al and in all the speeches by high Mexican funct­ionaries. According to them, today North American imperialism is in reality ‘anti-imperial­ist’. Only English imperialism is imperialism.

And the great traitor Leon Trotsky helps them in this propaganda, with his open letters in which ‘imperialism’ also means ‘English imperialism’, and not a word is whistled by the author of these letters about American imperialism...

How ‘workers’ management should save capitalist property

The capitalist system is in a dead-end sit­uation. Its destruction by the revolutionary proletariat is historically inevitable.

But, in these moments, the proletariat, weak­ened and disoriented by so many defeats and betrayals, is protecting the capitalist system instead of fighting it with the aim of destroying it and building a new society on its ruins. Helped by all the ‘workers leaders’, the bourgeoisie managed to derail the workers from their own class path, tying them to the interests of capitalism via the state. Blinded by the ideas of democracy and the fatherland, workers are defend­ing what they should destroy. We see this in Spain, in China, in Mexico, all over the world.

Instead of taking advantage of the crisis of the capitalist system to destroy it, the workers -- by not believing in the triumph of their own cause -- have temporarily become the best defenders of the system. Just like during the (first) world war, they sacrifice their economic gains and their lives in a fratricidal struggle under the orders of their class enemies. Of course we must not insist that today, like then, the responsibility for this lies not on the workers but on those Marxists who have betrayed Marxism and the cause of the proletarian revolution by their capitulation to democratic and patriotic fetishism. And we also don’t have to insist on the fact that the present situation will not last fore­ver, and that sooner or later the proletariat will again reclaim the revolutionary road. Historically, the proletarian revolution remains inevitable and invincible.

In Spain, and above all in Catalonia, we have seen in these recent years how the bourgeoisie managed to avoid the danger of proletarian revolution through the arming of the proletariat and the ‘socialization’ of industries -- ie, with their ‘deliverance’ to the workers. The class, under the illusion that they were the owners of the country, desisted in attack­ing the capitalist institutions. They began to de­fend with incredible sacrifices that which, in spite of certain label changes, remains capitalist property, and this included the capitalist state. Through the daily massacres in the battlefields of Spain, capitalism is reinforcing itself politically, filling up its senile veins with the blood of the exploited, who come from both sides of the front.

Following the example of the Spanish bourgeoisie, the Mexican bourgeoisie and its good North American neighbor attempt to exorcise the threat of prole­tarian revolution in Mexico with the ‘delivery’ of industries to the workers. Once these are ‘in the hands’ of the workers, the mortal enemy of the capitalist system will become its best defender -- such are the plans of the bourgeoisie in Mexico and Washington.

The Mexican and American bourgeoisie know of the hatred felt by the working masses of Mexico and of the whole Latin America for the large foreign companies. A proletarian attack against them would mean a blow struck at the heart of the capitalist system. That would mark the end of the imperialist domination of Mexico and of all the colonial and semi-colonial countries. The bourgeoisie in those countries, primarily its Mexican variant, know quite well that the only thing that keeps it in power and protects it from ‘its’ workers and peasants is precisely this imperialist domination. No wonder the Mexican bourgeoisie considers the North American bourgeoisie as its ‘Good Neighbor’.

In face of the growing and daily wrath of the ma­sses against the imperialist companies, a way had to be found to avoid at all costs a frontal attack by the workers against these companies. This task was, of course, taken up by the Mexican government. As everybody knows quite well, when semi-colonial governments do not carry out this task, they are overthrown. This has happened to many Mexican govern­ments as it has in Cuba and in other Latin American countries, when they were incapable of deflecting workers’ attacks against the sacrosanct property of imperialism. The ‘Good Neighbor’ requires efficient servants, and experience shows that the most apt servant is a ‘workerist’ government!

For a capitalist ‘workerist’ government, it wasn’t difficult to find the answer to the problem. The false ‘Marxists’ of the Stalinist and Trotskyist type had long since proposed it: for the united front between the proletariat and the bourgeoisie! And against whom? But, believe it or not, against imperialism of course!

In Spain and China that united front between the exploiters and the exploited has already been put into effect, with splendid results for the exploiters, fascists or anti-fascists, imperialists or anti-imperialists, and with dismal results for the exploited on both sides.

In Mexico something very similar has been developing for a long time. At last it took on a definite shape when the farce of the so-called ‘national redemption’ began. Pretending to be waging an irreconcilable struggle against imperialism (in words), the Mexican bourgeoisie and its government (in fact) delivered the destinies of the so-called ‘Mexican fatherland’ to the more and more absolute control of imperialism.

At the same time, by pretending that they were delivering the oil industry and the railways to the workers, they were able to extract from them the most extraordinary sacrifices.

Total victory throughout the front! Under the cover of its ‘nationalizations’, the bourgeoisie and its government hand over the most important industry of the country to the exclusive control of imperialism. Through this deal, the government of the Mexican bourgeoisie acquires a debt of ‘honor’ with the North American and English bourgeoisies; a debt which of course workers will have to pay. These will not only have to accept this sacrifice (‘voluntari­ly’ as their treacherous leaders claim), but they already have had to give, to the fatherland’s altar, and again ‘voluntarily’ of course, the 50 million pesos that they were demanding two years ago from these companies! We read the following in a report of the Executive Committee of the Oil Workers Trade Union, published in the press of the capital city on 28 April 1938:

“(We have been) in perfect agreement with the Government in the hour in which this was most needed by the Nation, and since we continue to be so, we patriotically accept that the benefits suggested by the findings of the Boards of Conci­liation and Arbitration Group 7, should not be effective as long as the present situation prevails. (We accept this) in spite of the sacrifices which the long years of struggle for a better life in the oilfields entail for the oil workers (not for their leaders to be sure!) In addition, the workers in this industry contribute to it various sums (and get what in return?), a fact that even the President knows. All these sums add up to around 140 million pesos. Apart from that, our various sections -- conscious of their duties as Mexicans -- are contributing on a monthly basis one daily wage for an indefinite period, to help alleviate the economic situation of the nation. This is equiva­lent to a monthly sum of more than 150,000 pesos.”

Adding all these sums, the famous ‘national re­demption’ has costed the oil workers (not to men­tion the others!) the respectable sum of more than 190 million pesos, apart from the other millions they have lost during the last two years, when they trusted the conciliation boards instead of striking and forcing the companies to pay higher wages. Instead of managing to get at least the 26 million pesos (out of the initial 50 demanded) that the ‘favorable findings of the boards promised, they were forced to pay those very same imperialist companies -- via the ‘anti-imperialist’ Mexican government -- a sum five times as large. Instead of receiving 26 millions, they have to pay more than 190 millions as their contribution to the so-called ‘debt of honor’!

It would be difficult to find in the whole history of the world bourgeoisie a better example of a perfectly executed swindle. Under the deluge of patriotic verbiage regarding the ‘economic liberation of Mexico’, there lurks history’s most gigantic robbery. The workers instinctively feel that in reality the whole thing has been a swindle, but because they are blinded by the idea that ‘the fatherland is in danger’, they don’t see reality. Hopefully our limited voice will help some understand the real situation, so that they can sober up from their dreams and illusions!

 

The task of the proletariat in the face of the recent nationalizations

If the false ‘Marxists’ leaders of Mexico lack the courage to denounce the real meaning of the ‘nation­alizations’ of oil and railways, they even less risk talking about the task of the proletariat in the face of these nationalizations made by the bourgeoisie for the benefit of the bourgeoisie.

Engels, on the contrary, spoke with the greatest clarity and frankness about this task. Of course he knew nothing about the ‘support for the govern­ment’ advocated by traitors to the class. The opposite is the case.

The only road that Engels points out in regards to nationalizations made by the bourgeoisie is the taking of state power by the proletariat, and the transformation of capitalist property, including that belonging to the capitalist state, into property of the proletarian state.

He points out with the utmost clarity the only le­sson that workers must draw from the transformation of individualist capitalist property or companies’ property into the property of the capitalist state: “By increasingly driving towards the transformation of the vast socialized means of production into state property, it itself points the way to the accomplishment of this revolution. The proletariat seizes state power and to begin with transforms the means of production into state property.” (Anti-Duhring, p.362)

Of course, this is its state, the proletarian state, the dictatorship of the proletariat.

The task of the Mexican proletariat is not, there­fore, to sacrifice itself so that the oil industry and the railways become profitable for the imper­ialist and ‘national’ capitalists. It isn’t either to go along with the farce of the ‘deliverance’ of industries to a so-called ‘workers’ management’. The task of the proletariat is to seize the indus­tries, that is, to wrench them from bourgeois hands through the proletarian revolution!

That is the only lesson that we should draw from the recent nationalizations!

The
Labor Party: Government Team and Loyal Opposition

9.
The party of the bourgeoisie which corresponds most closely to the
overall needs of British national capital -- not just in the current
conjunctural crisis but in the whole epoch of decadence -- is the
Labor Party. Its specific structure and orientation are best suited
to deal with the requirements of British capital, particularly since
World War II, in relation to the needs for:

--
the statification of the economy

--
the support of the western bloc

--
the containment of the struggle of the working class.

While
it would be a mistake not to recognize the flexibility of the
Conservative Party, a product of the maturity developed as the most
experienced party of the oldest capitalist nation-state, the
experience of the recent period has only underlined the role of the
Labor Party -- for the last decade has produced a profound economic
crisis, an intensification of inter-imperialist rivalry and the
greatest upsurge of proletarian militancy since the last
revolutionary wave. At first sight this argument may not appear to be
clear-cut -since the two parties have been in power approximately 17
years apiece. But this statistic masks the two important factors:

--
the longest period of Tory rule, from 1951 to 1964, had the major
objective of trying to hold the Empire/Commonwealth together as
market preserves for British capital. This effort failed and such a
requirement for a corresponding government will not return;

--
since the onset of the open crisis, the two occasions in which the
Labor Party has been ousted from power have both been during upsurges
of class struggle and when the capacity of the Labor Party and trade
unions to contain the proletariat has been considerably eroded by
periods when the left party had been in government office holding
down their living standards. At these times the Labor Party and the
unions have gone through phases of ‘opposition’ in which they
tried to regroup their forces in a more effective way to meet the
conditions of proletarian militancy. But even in opposition, the task
of trying to derail the struggle of the working class remains
predominantly with this faction of the bourgeoisie.

Thus,
as we examine the evolution of the situation since 1945, we can see
that the most effective defender of the national capital is the Labor
Party. It is consequently the most dangerous enemy of the
proletariat’s struggle.

10.
When we examine the maneuvers of the parties in this period
and relate them to the issues facing the bourgeoisie, we have to
remember that:

--
if the differences between the Labor and Conservative Parties are not
as great as their propaganda tries to make out nonetheless they do
correspond to different visions of the program for British capital.

For
example the Labor Party is far more committed to state control over
the economy than the Tories who retain a greater loyalty to
particularistic interests in society; Labor has a far stronger
connection to the union apparatus which the Tories can’t replicate;

--
the program defended by each of the parties are not static, but
change in response to the pressure imposed on the national capital
and the options presented in a given period. This pressure comes from
immediate circumstances as well as from the long-term effects of the
permanent crisis of capitalism. For example, with regard to
increasing statification (which is now a historical necessity for all
national capitals) the Conservatives have shifted far to the left of
the position they had, say, ten years ago;

--
each party has several currents or factions within it, reflecting
different programs for dealing with the problems of the national
capital. No matter how monolithic a bourgeois party tries to make
itself out to be, internal faction fights go on all the time. Shifts
in party policies can therefore also be achieved through the
assertion of one faction at the expense of another;

--
both Labor and the Tories are constrained by the parliamentary
framework and the electoral system which require them to construct
‘appeals’ to different sections of the electorate. This is a
burden on the capacity of the bourgeoisie to get the governing
faction it wants, though in Britain’s case it has provided an
important source of mystification against the working class. However,
the bourgeoisie is willing and able to suspend the electoral charade
when the need is felt -- as it did, for example, between 1939-45,
with the formation of the national coalition.

11.
At the beginning; of World War II the British bourgeoisie had in
power the very faction of the Conservative Party which had tried to
avoid the war. It fell with the end of the ‘phoney war’ and was
replaced by an alliance of those sections of the bourgeoisie which
saw their primary task being to stop German expansionism. The
coalition government led by Churchill included a substantial
representation from the Labor Party for two main reasons:

--
the Labor Party had the necessary capacity to organize and impose the
domination of the state over all aspects of the economy, and to
subordinate the economy to the needs of war production;

--
only the Labor Party had the ability to mobilize the working class
for the austerity and high rates of exploitation demanded for war
production, and for conscription into the army.

Despite
the majority of Conservatives in the government, the real weight of
the organization of society for the war was borne by the Labor Party
and the trade union apparatus. And, indeed, even the fall of
Chamberlain and the Conservative’s choice of Churchill to replace
him were due, in considerable measure, to the efforts of the Labor
Party.

The
war was prosecuted with several objectives, most of which were shared
with the US: to defeat Germany and Japan and to contain the Russian
threat to Europe. However, the coalition government resisted the
threat represented by the US to the British economy and to its
colonies -- the British bourgeoisie did not want to become a
dependency of the US. A measure of this resistance is given by the
fact that, despite all
the efforts of the US bourgeoisie, it was not until the Suez crisis
of 1956 that Britain finally and openly collapsed as a world power.

With
the Labor Party playing such a strong role in the coalition, the
bourgeoisie was much more able to see the need for a program for the
aftermath of the war to defuse any potential working class
struggle; the bourgeoisie had drawn the lessons from the consequences
of the unplanned end to World War I. The Beveridge Report was thus
commissioned to continue and further statification while appearing to
offer palliatives aimed specifically at the working class.

12.
The Labor government under Atlee, elected in 1945, corresponded to
the situation immediately following the war. Faced with a profound
dislocation of the economy it maintained many of the war-time
measures to continue the supply of workers and raw materials between
industries. It implemented a massive nationalization program which
included the Bank of England, coal, gas, electricity, iron and steel
as well as sections of many other industries, Externally, the
government recognized that there would be no reversal of the
new world order -- the US was master of its bloc – and that the
days were numbered for the retention of the Empire, since the
economic and military cost of preserving it could not be sustained.
The granting of independence to India was therefore not
such a fundamental wrench as it would have been for sections of the
Conservative Party. Although it tried to minimize
the worst of American economic measures against Britain, Labor was
well suited to the implementation of the austerity measures demanded
by the US. By working together with the union apparatus it was able
to hold down the workers’ living standards for years. To the
workers it presented itself, first of all, as the party of ‘full
employment’.

The
Labor government was only just returned in 1950 and fell from power
in the election held the following year. This electoral turning to
the right was a result of several factors:

--
the reconstruction was helping to stipulate the economy and tended to
strengthen the resistance of sectors of the bourgeoisie to plans for
further nationalizations and for possible losses of other colonies;

--
the successful containment of the workers by the Labor government had
removed the fear of major social upheaval from the bourgeoisie as a
whole;

--
resistance to the US’ economic policies towards Britain was
growing. This acted against the Atlee administration which was
associated with their implementation.

13.
The next thirteen years in which the Conservative Party remained in
power corresponded
to the years of major economic benefit from the post-war
reconstruction -- although there was a need for a succession of
deflationary and inflationary measures to maintain economic
equilibrium. In addition, there was a general
quiescence of the proletariat: the class struggle was dampened by the
new-found capacity of the bourgeoisie to draw palliatives from the
relative health of the economy. The policies of the Conservatives
towards the economy had become more appropriate to the period because
of the shift in the party towards a more realistic acceptance
of a higher level of state capitalism, marked by the adoption of the
‘Industrial Charter’ in 1947. Sections of the party who had drawn
up this document were by
this time prominent in the party, first under Churchill, then under
Eden, and finally under Macmillan who had most clearly represented
the state capitalist tendency inside the party as far back as the
thirties.

Macmillan
also represented the tendency in the party which saw that the Empire
could not be maintained in the same old way, and had argued for a
reassessment of the measures needed to keep the former colonies under
British economic domination. This tendency was therefore brought to
power after Eden’s Suez intervention demonstra­ted the
impossibility of holding on to the colo­nies. One of the main
tasks was to draw up a program for colonial independence, and this
goal was underlined in Macmillan’s 1961 Cape Town speech on the
‘wind of change’ blowing through Africa.

On
the question of ‘Europe or the Commonwealth’, the bourgeoisie
still tried to have it both ways, attempting to get access to
the markets being built up in Europe while maintaining the system of
Commonwealth preferences. Though the Conser­vative government
favored staying outside the European Economic Community at the time
of its formation in 1957, by the sixties it was opening negotiations
to join since the benefits of the old Commonwealth trade were
disappearing before its eyes. But it was not until the seventies that
leading factions of the bourgeoisie felt that Britain’s economic
position had weakened to the extent that it had to join the EEC, an
essential tool for the organization of a substan­tial proportion
of the western bloc’s economic activity.

By
the early sixties, it was clear that the Tor­ies had no further
policy to stimulate the economy and make it more productive,
something which was becoming more urgent in the face of growing
German and Japanese competition. There was also, in the second half
of the 1950s, a growing resis­tance by workers to government
attempts to impose ‘wage restraints’ and increase exploitation.

Though
the level of class struggle was generally far lower than in the late
sixties/early seventies,
the bourgeoisie was becoming alarmed at the increase in wildcat
strikes.

14.
A Labor government under Wilson was brought to power in 1964 to deal
with these problems. It aimed to pursue a far more rigorous state
intervention towards the economy than the Cons­ervative
government. It had limited goals in regard to outright
nationalization (mainly a re-nationalization of the steel industry)
but a greater commitment towards overall state planning and direction
of economic resources to build up the productivity of British
capital. It also aimed to tighten control over the national wage bill
by pulling unions and employers’ organiza­tions under a state
planning umbrella, and to deal with the rising tide of wildcat
strikes through legislation on the trade unions.

To
take part of the burden of military expendi­ture off the economy,
Wilson ended the maintenance of most of the British military
capabilities east of Suez. Like the previous Attlee govern­ment,
Wilson had a positive orientation towards the US, shown in his
support for the US’ inter­vention in South-East Asia.

The
grandiose plans of this administration for the regeneration of the
British economy crashed in the face of two major problems:

--
the runs on sterling, which had been a regular feature of British
economic life since the war, culminated in a massive onslaught which
the bour­geoisie could not withstand. This resulted in the
sterling devaluation of 1967 which not only ended sterling’s role
as a major reserve currency, but in fact heralded the new period of
open crisis for world capital;

• the
  eruption of a wave of proletarian militancy not seen for over forty
  years and which signified a qualitative change in the nature of the
  period.

The
years which followed saw a profound disruption inside the Labor
government, the Labor Party, between the government and the unions,
etc. Consequently, at the time when the bourgeoisie most needed this
apparatus to work together to contain the intensifying struggle of
the workers, they were in disarray. The Labor government fell in 1970
only to be replaced by the Heath administration which was even more
inept.

To
explain how this disarray came about, and how the Labor Party and the
unions regrouped their forces between 1970 and 1974 in order to again
confront the class, it is necessary to examine the major tendencies
inside the party and the union apparatus.

15.
Because of its historical origins the Labor Party ‘system’ is a
complex amalgam of institu­tions tied together at different
levels with links of various strengths. At the annual conferences the
main organizations represented are the constituency parties and the
trade unions, and they and the Parliamentary Labor Party (PIP) have
places on the National Executive Committee (NEC). Outside this
framework, in Parliament, the Labor MPs elect the leader and certain
others, with the composition of the cabi­net (or Shadow cabinet)
being determined by the leader. Direct links also exist between the
NEC and the PLP and, since the early 1970s, between the government
and the TUC through a liaison committee. (Of the Labor MPs a
significant proportion
are in fact sponsored by trade unions).

On
the ideological level we can broadly split the Labor Party into two
major groupings -- the left and the right - although in reality
neither of these is constant nor homogeneous. Though subject to
variation the major differences in orientation between the two can be
outlined as follows:

--
regarding the economy, the left has tended to push for the
acceleration of statification in the most direct ways -- through
outright nationaliza­tions and for more direct and physical
controls. The right on the other hand has put more emphasis on the
mixture of the state and individual com­ponents of the economy,
with overall state cont­rol being accomplished through less
direct means;

--
although the Labor Party as a whole accepts US domination of the
western bloc the right wing has always been more compliant than the
left which has stood for a more ‘independent’ line -- during the
immediate post-war period a section of the left vigorously fought US
policy and argued for the creation of a ‘third force’ to counter
Russia on the one hand and the dictator­ship of the US over
Britain on the other;

--
in front of the workers the left has tended to emphasize the class
nature of society far more than the right. For example, they argue
far more for ‘industrial democracy’ and workers’ control --
ideas from which the right has tended to shrink.

These
ideological currents distributed through the entire Labor Party and
trade union apparatus with their relative strengths and
concentra­tion being determined by a combination of factors.
These include:

--
in a general way, the objective situation reg­arding the economic
and military problems confron­ting British capital and the
pressure from the working class;

--
the relative proximities of different sections of this apparatus to
the centre of the state machine;

--
the specific functions served by different parts of the apparatus --
for example, while both the constituency Labor Parties and the trade
unions exist for the service of British capital, the tasks they have
to perform are not identical;

--
the vulnerability of different parts of the apparatus to electoral
pressures.

With
these differences between the major ideolo­gical currents
existing throughout this apparatus we can understand why different
factions have dom­inated the party and the unions at different
times and what the arguments between them have meant.

16.
The composition of the post-war Labor gov­ernment was determined
by the needs to comply with the severe economic and military dictates
of the US, to ensure that strong mechanisms of state control over the
economy were maintained, and to impose an austerity program on the
working class. The party and the unions were dominated by the right
wing, a coloring which had come about not least because of the fact
that the British bourgeoisie dominated a crushed working
class through the thirties and during the war. The Attlee
administration therefore corresponded well to the situation:

--
it consolidated the state control achieved in the war years in a way
which avoided too much resistance from the still-powerful sections of
the private bourgeoisie. In this respect the government also had to
restrict the nationaliza­tion program to an extent tolerable to
the US. The US bourgeoisie put restrictions on the natio­nalization
process through the conditions for the receipt of Marshall Aid, as
they perceived such British state moves as a possible source of
restraint on their own export program:

--
in a period of acute rivalry with Russia, the Attlee government
agreed to the maintenance of strong military capacities in Europe,
particularly in Germany;

--
although the balance of class forces was well in the favor of the
bourgeoisie the government still saw the need to mystify the workers
by sell­ing austerity with the idea that the country was being
rebuilt with a clear goal of raising work­ers’ living
standards. To manage the ‘welfare state’ a representative of the
left, Bevan, was chosen as Minister of Health. This use of the left
was strengthened further after a few years when one of its main
spokesmen, Bevan, was made Minister of Labor.

17.
In the period of opposition during the fifties and early sixties a
redistribution of forces took place within the Labor Party and the
union apparatus. In the early fifties there was a strengthening of
the left in the constit­uency parties, largely over the question
of foreign policy and rearmament. As the threat of the third world
war receded, the left had argued against the continuation of high
military expen­diture (exacerbated by Germany’s reduced support
to the British forces based there) and the con­sequences of US
military policy in the Far East. There, expenditures were too onerous
for the economy and the left’s resistance to the US’ strictures
on Britain was growing. However, in the leadership of the trade union
apparatus the strength of the right remained as the low level of
class struggle provided little basis for the left to develop.

In
the middle and late fifties the picture began to change. The gradual
improvement in the econo­mic situation produced a general
electoral swing to the right which put enormous pressures on the PLP
to shift in the same direction in order to maintain its electoral
appeal. The response to these pressures was best expressed through
the Gaitskell faction of the party, which by 1960 was arguing at the
party conference for a re­writing of the party program. The
Gaitskell faction wanted to discard Clause 4 -- ie the party’s
theoretical commitment to the nationaliza­tions of the whole
means of production. This, of course, met with intense opposition
from the left, not only in the constituency parties but also in the
unions, in which had been developing; a shift to the left throughout
the latter half of the fifties. In contrast to the early years of the
decade a higher level of class struggle was developing. This was
expressed through a substantial growth in unofficial strikes against
which the entrenched right wing of the union machine could not really
make the most effective stand.
The left therefore began to make more headway. The first major
landmark in its progress was with the election of Cousins in 1956 of
the TGWU (Transport and General Workers’ Union) after the death of
Deakin. This leftward movement in the leadership of the major unions
continued into the sixties as Scanlon, Jones and others came to
prominence, replacing those such as Deakin, Lowther and Williamson.

The
late fifties and early sixties was a period of intense turbulence
inside the Labor Party. The left in the party and the unions were
strong enough to defeat the efforts of Gaitskell to abandon Clause 4
at the 1960 conference. At the same conference the left also managed
to push through a resolution calling for British unilat­eral
nuclear disarmament, though this decision was reversed the following
year. Although the right still dominated the party, the left had
nonetheless strengthened its position substan­tially. It was with
this mixture of forces active in the party that Wilson (who took the
leadership after Gaitskell’s death) came to power in 1964.

18.
The general goals of the Wilson administra­tion have already been
outlined, including those which focused on the working class.
Economic difficulties, particularly relating to the strength of
sterling, confronted this government almost immediately, and
therefore made it feel the need to draw up a program to attack the
working class. This was to be achieved by the imposition of a
concerted policy to control wages and to deal with the unofficial
strikes through legislation. It was hoped that strikes could be
better controlled more closely by legally binding the unions to the
government. To this end, the Donovan Commission was set up in 1965 to
provide the justification for the proposals which appeared in In
Place of Strife in 1969. This approach was a direct reflection of
the strong Gaitskellite presence in the govern­ment, and shows
just how out-of-tune this adminis­tration was with the needs of
the unions, which actually had to deal with the workers’ struggle.
Consequently, the Seamens’ strike of 1966, rather than being seen
as a warning about the need for a more flexible approach to the
unions, merely stiffened the government’s resolve to act in a more
rigid way towards the unions. Under the pressure of the workers’
militancy a break took place between the unions and the government
across the ideological ‘fault line’. In the event the government
had to back down and accept ‘voluntary’ restraint by the unions.
Unable to deal with the workers’ struggle and split by the whole
argument with the unions, the govern­ment fell in the 1970
General Election.

19.
The main concern of the whole bourgeoisie in the subsequent period of
the Heath government was the struggle of the workers. This
government’s ability to deal with the situation was no better than
that of the previous Labor team -- yet it was the best the Tories
could find as it followed policies of the left-wing of the party.
Making the same mistakes as the previous Labor govern­ment, it
passed an Industrial Relations Act which the unions fought.

In
opposition, the Labor Party and the union machine regrouped their
forces, with two major accomplishments:

--
a
significant strengthening of the left wing took place;

--
formal organizational links were made between the TUC and the Labor
Party through a Liaison Committee in an effort to avoid a repeat
perfor­mance of the previous years’ events where they did not
function in concert.

Heath’s
collapse in front of the unyielding mili­tancy of the miners in
1974 brought Labor back to power, albeit narrowly. But in the course
of the election the unions and the Labor Party were able to function
together and dragoon the workers to the ballot box.

20.
Under the new Labor government the consoli­dation of the previous
year’s work continued and produced:

--
a government with stronger representation for the left;

--
a ‘social contract’ which enabled the govern­ment and the
unions to face the workers together in order to impose the austerity
and discipline which the crisis-ridden economy demanded.

Because
of their inexperience at these levels of militancy, the workers’
perspectives for the struggle were very limited, and together with
the fact that the government and unions were again working together
against them, the workers’ struggle ebbed, as it had begun to ebb
in other advanced capitals. In the subsequent phase of quiescence of
class struggle austerity was imposed harder and harder.

Though
there was a shift to the left in the new Wilson government and even
more so under Callag­han, it was tempered by the need both to pay
attention to those interests among the British bourgeoisie who feared
too far a movement to the left and to allay fears of the US
bourgeoisie. In addition, the drive for a further move to the left
was rendered unnecessary by the reflux in the struggle of the
workers.

However,
in the context of the resurgence of class struggle since the end of
1978, the pressures have again built up for a leftward shift in the
policies and membership of the PLP. Thrown out of office in May 1979
because of their inability to maintain their austerity program on an
increasingly militant working class, Labor is once again in the role
of the opposition party and once again in the throes of a faction
fight to equip itself for the coming turmoil by contin­uing its
leftward shift.

21.
The major conclusions we can draw concerning the roles of the Labor
and Conservative Parties are:

--
the Labor Party is the most appropriate party for the overall defense
of the interests of British capital -- not only for the present
con­juncture, but for the historical period;

--
the maneuvers of the Labor Party in the face of the problems of
British capital must be considered in conjunction with those of the
trade unions. Over the past two decades we can see that the
indispensable ideological and organiza­tional links between the
different parts of the ‘Labor movement’ have been greatly
strengthened;

--
the manner in which the Labor Party and the unions carry out their
tasks is determined to a great extent by the parliamentary framework
which the British bourgeoisie has evolved over the years.
Consequently, they do not have a perman­ent position in
government and their attack on the proletariat is geared according to
whether they are in power or in opposition. Either way, this part of
the state apparatus is the most deadly for the workers because it has
evolved in the recognition of the proletariat as capital’s
gravedigger.

The
balance of class forces

22.
The change in the relative strengths of the two major classes in
society since World War II has been of historic proportions. That
event marked the apex of the bourgeoisie’s class power, and the
nadir of the proletariat’s. Yet today the proletariat does not
merely stand in the way of further world war but is showing through
its defiance and resistance to austerity that the historic course is
once more towards revolution.

The
fact that World War II was not followed almost immediately by a third
between Russia and the US was because the controlled reconstruction
of the world economy attenuated the inter-imperialist rivalries
sufficiently to create a pause in the ever-present tendency towards
war in the epoch of capitalist decadence. As the reconstruction of
the economy took place at such a global level it provided a far
longer period of economic stimulation than had been possible after
World War I. This extended period -- which lasted more than a
generation -- has allowed the working class to recover from the
prostrating effects of the long period of counter-revolution.

While
these assessments about the historical course come from a global
perspective on the balance of class forces, it is nonetheless
possi­ble, and necessary, to examine the actual experience of the
change of course in specific countries.

23.
During the whole period of counter-revolution the workers never
stopped struggling. For all the weakness of the class its militancy
never died, not even during the war. In Britain, despite the fact
that all strike action was declared illegal by Order 1305 there were
many wildcats, especially by miners and engineers who were among the
most brutally exploited during the war. Vicious propaganda was
leveled against them; on the eve of the apprentice engineers’
strike they were threatened with conscription if they didn’t go
back to work; the Betteshanger miners were imprisoned -- although the
strike was so militant the state bureaucrats had to contin­ue to
negotiate with the strikers in gaol. None­theless, the
overwhelming advantage was of course with the bourgeoisie, which
achieved a total mobilization of the population for the war effort,
especially at the point of production where the union apparatus and
the now-flourishing shop stewards’ movement attained levels of
exploita­tion which were the envy of the rest of the world’s
bourgeoisie.

In
the period following the war -- under the Labor government -- these
conditions of brutal austerity were maintained. (Rationing, for
example, did not end until the mid-fifties.) The workers’ response
was still fragmented but there were pockets of strong resistance such
as the miners and dockers whose strikes led to more failings and
prosecutions by the government using the
wartime laws. Still the weight of the bour­geoisie was enormously
strong.

During
the early fifties the class struggle tend­ed to remain at a low
intensity as the austerity measures were steadily relaxed and some
portion of the ‘benefits’ were won by the workers, inclu­ding
the maintenance of full employment. All the same, the trade unions
continued to support the Labor and Conservative governments’
policies of ‘wage restraint’, it was not until 1956 that the TUC
withdrew its formal support for such policies, thereby giving an
indication of the growing resistance developing among the workers.

24.
The latter half of the fifties brought a substantial rise in strikes
which particularly concerned the bourgeoisie because they tended to
be concentrated in key sectors with dockers, electricians and car
workers in the lead. The bourgeoisie used several tactics to deal
with the wage claims and strikes:

--
prolonging the ‘negotiations’ between the unions and the
employers to delay strikes for wage claims;

--
channeling these struggles into the inter-union rivalries over
demarcation which were endemic in the late fifties (and were related
to the process of concentration going on in the apparatus of the
unions at the time);

--
the granting of higher wages which the expansion of the economy still
permitted with only a slow erosion through the relatively low
inflation rate of the time.

Through
the sixties the pressure on the workers increased and palliatives
could only be found in return for more and more productivity,
heightening the rate of exploitation to levels which later became
explosive. At the same time, there were several, industries which
underwent enormous run­downs in manning levels caused by the
introduc­tion elf new technology. Where these factors were most
prominent, so were the highest levels of militancy to appear -- in
the mines, car plants, docks, railways, steel, etc.

Thus
by the mid-sixties, just prior to the onset of the open crisis, there
were certain conditions which were to affect the conduct of the
coming battles between the major classes. The working class had been
given time by the reconstruction to recover from its past horrendous
defeats but had experienced only low levels of class struggle which
could be contained within a framework of economic expansion. The
bourgeoisie too had little recent experience of high levels of class
struggle, and in addition, its primary apparatus for mystification
and control of the workers -- the
Labor Party and trade union apparatus were not fully synchronized,
and had pronounced ideological differences.

25.
With the onset of the crisis and its intensification of class
struggle, the economic, political and social equilibrium were all
destroyed. The first wave of proletarian militancy in Britain had
several noteworthy characteristics:

--
it lasted for a long time – from 1968-74 – with the phases of
rise and dissipation being quite slow;

--
it drew into itself, at one level or another, the whole of the class
and contrasted dramatically in this respect with the struggles of the
forties, fifties and early sixties;

--
despite the convulsions into which society was thrown by these
strikes, the struggle never expressed itself on the political level.

The
reaction of the bourgeoisie was first to retreat, to regroup its
strongest forces; and then, when the struggle was ebbing, to
counter­attack:

--
the ‘retreat’ was a stepping back from the direct confrontation
against the workers as their upsurge continued. Recognizing the
dangers, the bourgeoisie limited the use of the repressive arms of
the state against the workers. The trade union leaders had to back
off too, as in the early phase they became less and less able to hold
the workers at bay. The most dramatic example of this was the 1970
picketing of the NUM (National Union of Mineworkers) headquarters
(guarded by police) by furious miners against the union bosses who
were trying to break their wildcat. Such warnings were clear and the
unions were forced to allow the class to ‘let off steam’ for a
while. It was in this period that the Wilson government fell.

--
the Heath government recognized many of the dangers, but not as
clearly as the left of the bourgeoisie; it drifted down the path of
confron­tation and in so doing put itself forward as the
personification of the anti-working class move­ment in society,
to the benefit of the Labor Party and the unions which were thus able
to organize the biggest mobilization of workers since the twenties in
the fight against the Industrial Relations Act. During this period
there was the regroupment of forces in the Labor Party and the trade
unions that we described earlier. In the meantime the task was given
to the shop stewards to ‘go with the class’ so that they could
later grasp the reins and slow the struggle down. They concentrated
on keeping strikes isolated from each other, and from other sections
of the class not on strike -- a strategy epitomized by the wave of
factory occupations in 1971 and 1972. The use of the 3-day week and
the General. Election in February 1974 to break the miners’ strike
permitted a now-strengthened Labor Government to face the class
again;

--
the counter--attack began in earnest after the Election, against a
now-ebbing wave of militancy. Working far more closely together than
they had been able to do in the sixties, the Labor gov­ernment
and the unions built up to a crescendo the campaign for the social
contract, sealing it in July 1975. After conceding relatively high
percentage wage settlements for a time, the Labor government once
more returned to its natural role: covering itself with sanctimonious
concern for the national interest, it became again the party of
austerity.

26.
The austerity measures held fast in Britain and were a model for the
bourgeoisie of the west­ern world. As the reflux settled,
austerity became tougher. The repercussion at the ideological level
was that the formal rules no longer had to be agreed to -- in 1977,
after two years of the social contract, the pretence of the ending of
an agreement was put forward by the unions with great gusto. Instead,
‘guidelines’ were adhered to -- with the objective being to
maintain austerity and to reduce the association between the unions
and the measures of austerity.

However,
while this has been the intention, it is also true that the austerity
program has eroded the credibility of the unions and the left.
Consequently, the bourgeoisie is faced with the problem that the use
of its left face today undermines further shifts to the left in
future. This has already been seen throughout 1979 with stronger
challenges being made to the authority of the unions and shop
stewards, and with a widespread indifference to the maneuver­ings
of the Labor Party being exhibited by the workers.

27.
The current strike wave, which erupted during the 1978-79 winter,
shows that the working class is beginning to emerge from these past
years of reflux and reassert itself on its own class terrain. And if
the major left fac­tions of the bourgeoisie, the Labor Party, has
been removed to the position of ‘loyal opposit­ion’ the
better to refurbish itself then this is not because of a
strengthening but because of a weakening of the ruling class in the
face of an increasingly combative proletariat. Truly, the workers’
struggle exacerbates the political crisis of the ruling class.

Once
more the struggle of the proletariat has become the axis of the
entire social situation.

***********************

This
text has traced only the general lines of the evolution of the
situation in Britain since World War II. It has covered a period in
which the balance of class forces has been predominantly in favor of
the bourgeoisie, and has outlined the general context from which the
future, titanic movements of the proletariat will emerge. The
specific way in which the current, second wave of class struggle
since the onset of the open crisis in 1968 is developing is described
in ‘The Report of the British Situation’ in World Revolution,
no.26.

Marlowe