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We need an anti-war movement built upon solid anti-imperialist foundations

BUAFS banner in Trafalgar Square on May Day 2015

BUAFS banner in Trafalgar Square on May Day 2015

A comrade from Bristol Ukraine Anti Fascist Solidarity (BUAFS) was invited to speak at a recent public meeting in London organised by Solidarity with the Antifascist Resistance in the Ukraine (SARU). We reproduce his remarks below.


We are talking today specifically about the way that the imperialist media serve a vital propaganda role in selling us their agenda of war and austerity. Other speakers have given many telling examples of this manipulation of public opinion.

In Bristol, we try to expose this manipulation by mounting a weekly picket of the BBC in Whiteladies Road. We do this to draw attention to the lies the corporation tells about the conflict in the Ukraine and Donbass, and to point out how this conflicts with the vaunted status of the BBC as a paragon of ‘objective’ and ‘balanced’ journalism. It lays claim to that status, so it’s right that we should demand that it be held to account for failing to live up to it.

However, in reality, we should not be so surprised about the BBC’s behaviour. Its journalists are just doing their job, serving as part of the propaganda machine for the imperialist ruling class. When push comes to shove, that is the basic purpose of every organ of mass media in imperialist society. How could it be other? The capitalist media are bought and paid for, and capitalism gets what it pays for. In that sense, we have nothing to complain about.

But if the real function of the BBC and the rest is not too hard to grasp, what have we to say about the role of some of those in ‘left’, ‘anti-war’ and trade-union circles who help to grease the wheels for war by going along with the reactionary propaganda? I’m thinking about those who in words ‘opposed’ the bombing of Libya, yet rowed in with all the vilification of Muammar Gaddafi by which imperialism sought to justify that bombing.

Or those who went along with the hate campaign against Bashar al-Assad and the progressive leadership of Syria – a hate campaign that acted as a smokescreen for the West’s proxy war of subversion against
an independent Arab state whose secular and progressive character posed a threat to imperialist dominance in the Middle East.

What do we make of those who peer down from a great height upon the inhabitants of the Donbass fighting for their lives against Kiev’s stormtroopers, only to pronounce them to be ‘Putin’s useful idiots’?

In my innocence, I had hoped to come here tonight in a cloud of glory, bearing glad tidings that Bristol Trades Council had decided to cough up £50 and affiliate to SARU. The Bristol branch of Community Unite earlier this year passed a resolution to affiliate, and went on to propose to the trades council that it follow suit.

Sadly, this initiative was ambushed by some very vocal delegates to the trades council, who ‘explained’ that the fascist coup that removed the democratically-elected Yanukovych government was in fact a “popular uprising”, that the subsequent elevation of Poroshenko to the presidency was “legitimate”, that his government was not fascist, that the Donbass resistance were no more than stooges for Putin and that the conflict in the Ukraine was not about anti-fascist resistance but was essentially a turf war between rival oligarchs.

To make this unashamed rehearsal of the standard BBC/Fox News Big Lie more palatable to a trade-union forum, matters were given a workerist twist, appealing for “solidarity with workers throughout the whole of the Ukraine”, carefully ignoring the fact that the fascist aggression dished out by the Kiev junta’s forces is actually the military wing of the IMF-imposed austerity being imposed on all Ukrainian workers.

This stunt recalls the dishonest ‘neither green nor orange’ pose that was assumed in the 1970s and 80s by those who sought to justify their enmity towards the Irish national struggle by making spurious appeals to the “unity of all workers” (all workers, that is, in ‘Northern Ireland’ – ie, the colonised six counties).

Regrettably, these lies about what is really going on in the Ukraine were enough to stampede the trades council away from supporting the resolution, which was formally remitted (kicked into the long grass). Fifty pounds here or there will not break our campaign, but this setback usefully illustrates just how crucial is the role of social democracy in making workers vulnerable to capitalist war propaganda, softening up our resistance.

It is important to challenge the media lies. But it is at least as important to challenge those on the social-democratic ‘left’ who help to give those lies currency in the working class. We can’t get rid of media lies, but we can make a start on challenging the social-democratic politics that rob workers of any ideological defence against those lies.

When the manufactured paranoia about Russia has been so eagerly embraced by many on the ‘left’, for example, it will take no more than one or two well-orchestrated false-flag operations for war fever to sweep the board.

What is the antidote to this war fever? The short answer is: to build an anti-war movement in the working class; a movement that identifies imperialist crisis as the driver of war, which supports all those engaged in resistance against imperialism and which leads a campaign of active non-cooperation with the war effort.

Do we possess such a movement now? Sadly not. The Stop the War Coalition, in the name of ‘broadening the appeal’ of the movement, withheld its support from the Afghan resistance and the Iraqi resistance. It likewise withheld support from the progressive governments of Gaddafi’s Libya and Assad’s Syria. Now it opposes the Russian bombing campaign against Islamic State in Syria.

And, of course, it withholds support from the Donbass resistance – always in the name of ‘broadening the movement’. Yet, far from ‘broadening’ the anti-war movement into the mass of the working class, this approach has narrowed the movement to a dwindling support base consisting mostly of a pacifist-minded middle class.

Our task must be to break down the social-democratic walls that separate workers in Britain from all their oppressed brothers and sisters who are fighting against imperialism – be it in Palestine, Syria, the Donbass or wherever.

The imperialist ruling class that plunges one country after another into war is the self-same imperialist ruling class that imposes austerity at home. By recognising that imperialism is our common enemy and linking arms with those engaged in resistance against imperialist meddling, we can unite in an anti-war movement that stands on solid anti-imperialist foundations.

I believe that this can be done in Britain, and that our support for the struggles of the people’s republics of Donetsk and Lugansk could be a step in the right direction.

It is in that spirit that we continue our solidarity work in Bristol. Let me take this opportunity to invite comrades to come and visit our picket outside the BBC in Whiteladies Road, every Monday from 5.00pm to 6.30pm.

Also, let me remind you about the public meeting we are holding on Saturday 24 October in the Terrace Room of Barton Hill Community Settlement, 43 Ducie Road, Bristol (BS5 0AX), from 2.00pm to 5.00pm, on the subject of imperialist crisis and the drive to war in Europe.

Llanelli: The spirit of 1911

On 15 August, comrades from Swansea, Merthyr, Runcorn and Bristol attended the annual commemoration of the part played by Llanelli workers in the rail strike of 1911.

This national strike raged with particular ferocity in Liverpool, where two workers were shot dead by the military, and in Llanelli, where two workers were likewise shot and another four perished in the subsequent struggle against the police and army.

All 500 of Llanelli’s railmen came out in support of the strike, and an estimated total of about 5,000 workers were involved in the occupation of both the town’s level crossings, bringing all rail transport to a halt.

Our party has supported the commemoration of this event every year since the centenary in 2011, recognising it as a milestone in the history of the British working class.

After the hundred or so participants had marched from the railway station to the town centre, we paused for a rally before climbing the hill to Box Cemetery, where our party comrades took their turn to lay flowers in memory of the workers slain by the army. The socialist choir Cor Cochion sang the International in Welsh.

A number of speeches were made at the rally, with the need for unity a strong common theme, but with differing notions of how this unity is to be forged.

Least appropriate for the occasion was the contribution from the Labour MP for Llanelli, whose feeble excuses for having abstained from the vote against austerity cuts drew some well-deserved barracking. One local shouted that the Labour party had had dominance in Llanelli for over 90 years and they had done very little for the town.

In truth, her eulogy for class compromise could hardly have been less in keeping with the true spirit of 1911 – a spirit of courage, solidarity and revolt.

Our own party’s speaker brought greetings to those gathered from the CPGB-ML, and then continued:

“We meet here today to commemorate the part played by the working class of Llanelli in the national rail strike of 1911, and to mourn the deaths of comrades Leonard Worsell and John John.

“The army acted in panic on that day, driven into frenzy by the success with which Llanelli railway station was shut down and occupied by the workers, who were acting in solidarity with railway workers all over Britain.

“This display of the collective strength of the working class – not only by rail workers but also by tin-plate workers and others – should remind us all that, given the right leadership, workers have the power to shut down capitalism for good. We just need to use it.

“With its Trade Union Bill, the government plans to criminalise any meaningful exercise of the right to strike. For public-service workers, no strike ballot will succeed unless at least 40 percent of the total electorate vote to strike.

“To put this in context, the recent Tory victory at the polls, heralded by the media as a ‘landslide’, was voted for by just 22 percent of the electorate.

“If a strike ballot survives all the obstacles thrown in its path by the new bill, other rules are planned that will conspire to remove the sting from industrial action.

“Two weeks notice of a strike will have to be given – to give the employer ample time to hire in agency workers to break the strike. When it comes to picketing, a member of the union will have to make himself known to the police and be available to them at all times. That person will then be accountable for the way the picket conducts itself.

“It is not hard to see what this will mean in practice, when even the most polite effort to dissuade workers from crossing the picket line can be interpreted as ‘intimidation’. To cap it all, supposed infractions of picketing rules will no longer be treated as civil offences, but as criminal offences.

“Capitalism is in the midst of an overproduction crisis which will be deeper than both of those which resulted in the two great wars of the last century. That is why imperialism is imposing crushing austerity at home and generating criminal wars abroad.

‘And that is why the right to strike, the right to resist against the imposition of austerity, the right to resist against warmongering, will increasingly be criminalised.

“Repressive moves against asylum seekers, so-called ‘benefit scroungers’ and disaffected youth are preparing the way for repressive moves against anyone who says NO to austerity, NO to fascism and NO to war.

“That is why, as well as remembering the fallen comrades John John and Leonard Worsell, we also remember Private Harold Spiers, who, when ordered to turn his weapon on his fellow workers, threw down his gun, preferring to face court martial sooner than commit a crime against humanity.

“Since the Nuremberg Tribunal that followed WW2, it has been established that ‘just following orders’ is no defence. It is time for the organised working class to stop following unjust orders and unjust laws.

“It is time for the unions to organise a movement of non-cooperation with warmongering, non-cooperation with austerity, non-cooperation with capitalism.

“Long live the spirit of 1911!”

Godfrey Cremer and the five Cs - compassion, creativity, communism, craftsmanship and courage

Iris Cremer, a founding comrade of the CPGB-ML, speaks at the memorial meeting for her husband Godfrey Cremer in Saklatvala Hall, Southall on 12 May 2012

Iris Cremer, a founding comrade of the CPGB-ML, speaks at the memorial meeting for her husband Godfrey Cremer in Saklatvala Hall, Southall on 12 May 2012


The following tribute was delivered by Comrade Iris Cremer to the memorial meeting for Godfrey Cremer held on 12 May 2012.


Once again I thank every one of you for the comfort and strength your words have given to all of Godfrey’s extended family, friends and comrades. So many of you here, as well as in messages from across the world from Havana to South Africa to Pyongyang, have expressed respect and thanks for the warm-hearted and articulate way that Godfrey supported their causes.

I have been very privileged to spend over 40 years with a husband, friend and comrade who has worked tirelessly to build a world free from racism and imperialist wars, and for a society in which all peoples could live in peace.

I still want to highlight the three Cs that I dealt with at the funeral – his compassion, his creativity and his communist principles. They are such significant aspects of Godfrey’s world outlook.

He looked after everyone he met – family, friends and passers by – he treated all with respect and kindness – becoming ‘uncle’ to so many young friends. But his compassion extended way beyond individual acts of concern.

He started to look for other ways to solve the problem facing people in the UK, as well as across the world. This became a driving force that saw Godfrey campaign for racial equality – working with the IWA(GB) as well as professionally; and an ardent anti-imperialist.

Right up to the days before his death he was exhorting us to protest against the attempts of imperialism to overthrow the legitimate government of Syria – it is entirely appropriate that on the front page of the latest Lalkar, his picture appears just beside the article on Syria.

He not only grew to have a well-formed political outlook, but he was a proper teacher. With images, analogies, poetry, music and photography he found ways to describe the most complex of historical and scientific ideas.

In studying Marxism, his careful use of words helped so many youngsters, and those not so young, to grasp the meaning of a new world outlook.

It was his experiences in the ’60s and his concern for people that brought him to espouse the ideals of communism. During events in the early ’70s we met Harpal and a few others and began to build an alternative to the existing political parties – a genuine communist party in Britain.

However, to implement this work Godfrey also saw the need for two other Cs – Craftsmanship and Courage

I came to see the need for an alternative to capitalism through an emotional response to the experiences I found in Africa in the 1960s – as a volunteer teacher in Tanzania I, fortunately, learnt both of the devastation that imperialism had caused to the peoples of southern Africa and learnt about the spirit of resistance that Julius Nyerere’s Ujamaa gave a voice to, and saw the support that the Chinese were giving, for instance in building railways, etc.

On the other hand, Godfrey was far more rational. His experiences in the anti-Vietnam war days also drew him to find out about ‘alternatives’ and he pursued it in a thoroughly logical manner – studying Marxism as a science.

He would be first to admit that he did not study sufficiently, but I know for sure that even with him in hospital in those final days was a copy of Fundamental Problems of Marxism by Plekhanov. He studied and thought through all the problems he faced, be it:

  • mastering the printing press – this May (issue 212) was the first Lalkar we have done without his guidance since 1979 – and it was hard – particularly wanting to keep up to his standard, and with his face smiling back at us on the front cover [Katt and I used all our strength to achieve what we knew he expected of us],
  • sorting out how to build literature stalls (transforming a children’s buggy into a mobile stall – using one that he found discarded near a skip! – and then revising it to increase its mobility, cos it was not quite right!), or
  • organising the communist movement – endlessly meeting comrades, discussing with comrades both to organise national and London regional activities.

He was a true craftsman who fine-tuned his knowledge and approach according to the prevailing circumstances and would turn his hand to anything.

His contributions to Marxist study schools and circles will be sorely missed. From study circles in the 1970s in Tottenham with Harpal and Ella and others, to curry and communist study in Southall, to CPGB-ML party schools, Godfrey has been a stalwart who carefully analysed and honestly answered questions with clarity and relevance, along with his jokes and analogies.

It was with immense pride that Godfrey became a founding member of the Communist Party of Great Britain (Marxist-Leninist) in 2004 and could see his hopes and desires of his life’s work beginning to really bear fruit. And he would thus encourage party members to study and be optimistic, adhering to the words of Kim Il Sung, who said in 1962:

“In order to make our party members indomitable fighters who are always optimistic about the future of the revolution, it is necessary to intensify their Marxist-Leninist education. Without a clear understanding of the laws of social development and the inevitability of the triumph of socialism and communism, one can neither have faith in victory nor have the high-toned spirit and combativeness to withstand any difficulty.”

Which bring me to my last C.

Courage/ Combativeness
To have spent four decades with Godfrey, and shared a common world outlook, has indeed been a privilege and a joy. His firm adherence to principles gave him a great confidence and courage, which may seem at variance with his gentle warmth.

In fact, his thorough scientific understanding of dialectics and materialism gave him enormous strength in his convictions. He has not only stood up for many who faced racial discrimination – both in his professional work and in conjunction with the Indian Workers Association GB, but he has always been at the forefront of those challenging the rule of British imperialism at home or abroad – particularly in relation to Ireland in the Troops Out Movement, in the Zimbabwe Solidarity Front, and most recently in the Stop the War Coalition. His work has been exemplary both in terms of arguments won and lessons learnt.

Having worked so closely, pretty much as a double-act, for so long I feel that now, in this difficult period, I have a strength built from my life with Godfrey. I often say to people that I feel like part of his spine is holding me up to ensure that his work goes on.

Katt too has learnt how to be strong from Godfrey’s example – so I feel confident that our political work will continue. We have an expanding party that is mobilising the next generation to carry on the struggle.

However, we will all sorely miss his expertise in science, particularly the biological sciences. From Darwin through to the Soviet biologist Lysenko, Godfrey was at the forefront of a Marxist scientific analysis based on his own scientific training and a Marxist analysis. He controversially defended Darwin’s materialism and the Soviet agronomist Lysenko by making detailed presentations on their work – which few others have done.

But the essence of that biological work is that only the new Soviet state could truly enable resources to be used for the benefit of the vast masses of the people. Godfrey’s research dealt with developments in agriculture, but the lesson is similar for other areas of life.

One hundred years ago, Michurin, a Russian biologist, was struggling to improve fruit plants in pre-revolutionary Russia. Twenty years later he said that the Soviet system “had given me everything I need – everything an experimenter can desire for his work. The dream of my whole life is coming true: the valuable new fruit-plant varieties which I have bred have gone from the experimental plots, not into the possession of a few kulak money-bags [rich farmers], but into the far-flung orchards of the collective and state farms.

He wrote to Stalin thanking him for building a new world in which “the creative energy surging among the millions of workers and peasants of the Soviet Union fills me too, old man that I am, with eagerness to live and work under your leadership for the good of the socialist development of our proletarian state”.

The ‘eagerness’ of this Soviet agronomist reminds me so much of Godfrey’s enthusiasm for building a new society.

Our tribute to Godfrey must be to use the strength that Godfrey has given us to build a powerful communist movement that can lead to a bright future for all humanity.

A Red Salute to Godfrey – my comrade, my friend and my husband.


Tribute to Comrade Godfrey in Lalkar
Photos from the memorial meeting
Photos from Godfrey’s funeral
Video: funeral oration by Harpal Brar
Video: Godfrey recites his poem ‘Uddam Singh and Bhagat Singh’
Video: Godfrey speaks on Darwin, Marx and Materialism


A personal tribute to Comrade Godfrey Cremer

Joti Brar of the CPGB-ML speaks at Godfrey Cremer's memorial meeting in Saklatvala Hall, Southall on 12 May 2012

Joti Brar of the CPGB-ML speaks at Godfrey Cremer's memorial meeting in Saklatvala Hall, Southall on 12 May 2012


The following tribute was delivered by Comrade Joti Brar to the memorial meeting for Godfrey Cremer held on 12 May 2012.


Words I would say to Godfrey if he was still here

I would say thank you for being such a rock in my life. For showing that it is possible to be true to your principles in small as well as big ways.

For offering such a shining example of a life well lived. For showing such warmth, generosity and loyalty in your relationships with friends, family and comrades. For demonstrating such selflessness and humility despite your obvious talents in so many spheres. For setting such a shining example of persistence and of devotion to everything that is most important in this world.

Thank you for magic tricks and shoulder rides. For infant school pick-ups and trips to the zoo. For study classes, spare beds and safe havens. For eternal patience and good humour. For taking me completely into your heart and your family. For giving me the best sister anyone could ask for. For coming to the hospital when our Josef was born, for putting away the cot we couldn’t bear to see, and for remembering our littlest comrade at the last.

I haven’t words to express what your presence has meant in my life. A visit to your house was always an adventure. Just the knowledge that you and Iris were in my world gave so much childhood reassurance.

It was in your home and under your gentle guidance that I took my first steps into the movement. Where I read Lenin and Stalin and learned to take a scientific view of the world. In your home I attended political meetings and took part in my first practical activities. In your home I learned that it was possible to overcome all barriers to political commitment. In your home I learned that no detail is too small to pay attention to in the service of the working class.

In your home I felt loved and secure and free to develop. You and Iris had the knack of treating everyone as special and it made your home the most welcoming I have ever known.

What else would I say?

Only that I hope to do better in following your example. Only that I will not forget the promise I made to you in the hospital: we will finish what you and your comrades have started.

We will build the party that you worked so hard to bring into existence. We will turn it into a real fighting force for revolution. We will do everything we can to bring about the society that you longed for so ardently all your life.

And finally, paraphrasing Bobby Sands, I would say that our final tribute to your inspiring example will be the laughter of our children’s children’s children.

We miss you Godfrey. We wish you hadn’t left us so soon. But we are so glad we had you and we are determined that you will live on in us. We are determined to make you proud.

With love, with respect, and with the reddest of red salutes, I would say what you said to me when we talked about your prognosis: no regrets.


Tribute to Comrade Godfrey in Lalkar
Photos from the memorial meeting
Photos from Godfrey’s funeral
Video: funeral oration by Harpal Brar
Video: Godfrey recites his poem ‘Uddam Singh and Bhagat Singh’
Video: Godfrey speaks on Darwin, Marx and Materialism


Stalin Society pays tribute to Comrade Godfrey Cremer

Wilf Dixon of the Stalin Society speaks at Godfrey Cremer's memorial meeting in Saklatvala Hall, Southall on 12 May 2012

Wilf Dixon of the Stalin Society speaks at Godfrey Cremer's memorial meeting in Saklatvala Hall, Southall on 12 May 2012


The following speech was delivered by Comrade Wilf Dixon to the memorial meeting for Godfrey Cremer held on 12 May 2012.


Comrades and friends, thank you for giving me this chance to make a few remarks from the Stalin Society to this commemoration today. I am proud to do this because I had a profound respect for comrade Godfrey Cremer and believe his political clarity and method of work are things to be emulated.

The abrupt passing of comrade Godfrey Cremer came as a shock to us all and this shows how much we will miss his dedication and clarity of thought in dealing with complex ideological and political issues. Although I found comrade Godfrey a very approachable and friendly person, a quality which has been repeated in many of the tributes that I have heard and read, I knew him primarily through my involvement in the Marxist-Leninist movement and since the foundation of the Stalin Society after the total collapse of the Soviet Union in 1991.

Comrade Godfrey was an internationalist striving to support those peoples and nations at the brunt of western, particularly United States, imperialist hatred and demonisation. That is, those nations and peoples who strive to resist imperialist dictate in order to build their own economy and independence politically or militarily.

As a communist inside the belly of the beast of British imperialism, he understood and was guided by a profound grasp of the importance of struggling against the chauvinism and imperialist mentality as it affects in particular the working class with racist ideas and its would-be leadership or mis-leadership with opportunism.

One of my earliest occasions to have contact with Godfrey was in the Troops Out Movement, whose leadership displayed much the same characteristics as can be witnessed today. Comrade Godfrey’s contribution was guided by the Marxist precept that no nation that oppresses another nation can itself be free.

Further, as a member of the Stalin Society, and I must say that he is not alone in this, he jealously defended Comrade Stalin and the Soviet Union under his leadership from slanderous lies and the attempts to rewrite history. For every one like Comrade Godfrey defending Stalin, it seems there needs to be 100 bourgeois or revisionist scribblers who can so readily find a publisher for the shallowest of lies and distortions. Such is the value to the working class of propagandists like comrade Godfrey.

Apart from his regular contributions in the meetings themselves, I would like to draw attention to his contribution on Darwin in the bicentenary year of his birth on 12 February 1809. In an address to the Stalin Society in commemoration of Charles Darwin and his work culminating in the The Origin of Species, Comrade Cremer, whilst paying tribute to Darwin’s consistent scientific method, showed his own grasp of dialectical and historical materialism. Comrade Godfrey, who I believe had taught and was qualified in the natural sciences, used his knowledge to criticise eugenics and other racist distortions of Darwin’s concept of the ‘survival of the fittest’.

Also, in a different address to the Stalin Society, and in the spirit of swimming against the tide, he fought to rescue from unjust criticism the work of Soviet agro-biologist Lysenko on the effects of the environment on inherited characteristics. In the modern world of science, which neglects the environment in favour of almost exclusive research on genetic manipulation, this is a positive thing to do.

Swimming against the tide, particularly in imperialist Britain, must be the spirit of any communist seeking to make a contribution to building a revolutionary communist party based in the working class and oppressed peoples. The bourgeoisie and its propaganda is powerful in the imperialist heartland.

In this situation, it is particularly necessary to go lower and deeper among the masses. In order to do, this it is important to be of a modest character and be able to listen to the masses and isolate the backward ideas from the progressive.

I believe comrade Godfrey displayed much of these qualities of modesty and readiness to listen. His contributions to society meetings would pick at the subject, drawing attention to facts and revealing the aspects of something from different angles and by so doing win conviction.

Comrade Godfrey paid attention to detail. I thought I might be alone in making this point but I see that this quality has been remarked on by many others. He took on the big and little issue with the same care.

For example, he regularly carried out the, some would think menial, job of ensuring the availability of coffee and refreshments at society meetings. But no job is too menial and life is made up of many small and apparently inconsequential things. Dialectics tells us that qualitative leaps derive from quantitative changes.

It is of no consequence, but I drink decaffeinated coffee and appreciated that Comrade Godfrey made sure it was available. But anecdotes aside, comrade Godfrey will be remembered for his patience and care with his comrades and friends.

As a member of the society, and I am sure I express the feelings of the Stalin Society as a whole, I would like to send condolences to Godfrey’s partner for 40 years and Secretary of the Stalin Society, Comrade Iris, and her daughter Katherine. Comrade Godfrey’s passing has left a great hole in the society which will not be easily filled.

For Iris, Katherine and their family this is also a profound personal loss. But I hope they will take heart from the memories and political legacy he has left behind which will live on in the minds of all those who have known him or come into contact with his political work or writings.

I’m speaking on behalf of the Stalin Society, but I think the following remarks by Comrade Mao Zedong best express how I would like to finish up this short tribute.

“All men must die, but death can vary in its significance. The ancient Chinese writer Sima Qian said, ‘Though death befalls all men alike, it may be weightier than Mount Tai or lighter than a feather.’ To die for the people is weightier than Mount Tai, but to work for the fascists and die for the exploiters and oppressors is lighter than a feather. Comrade Chang Szu-the [The Comrade for whom Mao Zedongng spoke these words. For us here today let us substitute the name of Godfrey Andries Cremer] died for the people, and his death is indeed weightier than Mount Tai.” (‘Serve the People’, 8 September 1944)

Comrade Godfrey’s life is one of a communist serving the working and oppressed people, and his death is indeed heavier than Mount Tai.

In concluding, I would like to state my own determination and make my own appeal to use this occasion of remembering Comrade Godfrey Cremer’s life also an occasion to learn from his qualities and example in deepening the theory and practice of Marx, Engels, Lenin, Stalin and Mao Zedong as applied to the conditions of Britain.

Long live the memory of Comrade Godfrey

The future is bright.

Imperialism and all reactionaries are indeed paper tigers.


Tribute to Comrade Godfrey in Lalkar
Photos from the memorial meeting
Photos from Godfrey’s funeral
Video: funeral oration by Harpal Brar
Video: Godfrey recites his poem ‘Uddam Singh and Bhagat Singh’
Video: Godfrey speaks on Darwin, Marx and Materialism


The decay of the revolutionary leadership in post-Apartheid South Africa

The article below is the text of a speech given by Comrade Khwezi Kadalie, Chairperson of the Marxist Workers School of South Africa, to CPGB-ML meetings in London, Bristol, Birmingham and Leeds during his speaking tour in February.

Or you can watch Comrade Khwezi’s inspiring speech on this video, which includes more detailed discussion on many of the points he raised following questions from the audience.

I would like to thank the Communist Party of Great Britain (Marxist-Leninist) for the opportunity to address this gathering. I would like to take the opportunity to extend to you, and to all the comrades, friends and fellow workers here, the most sincere, heartfelt and revolutionary greeting of the members of the Marxist Workers School of South Africa and, indeed, greetings from the proletariat of South Africa.

The policies of imperialism and our reactionary ruling capitalist classes have always been to divide people, to divide the working class, to set local workers against immigrant workers, to set full-time workers against part-time workers … and, of course, they set workers in the imperialist countries against workers in the so-called ‘third-world’ countries.

Our position is clear: the objective interest of the South African working class and the interest of the British working class are identical. We have a common enemy; we are united in a common struggle against capitalism and imperialism. And therefore we say: together, the working class in South Africa and Britain, and, indeed, all over the world, will struggle for a better world; a world in which there is no exploitation and oppression, a world in which hunger and ignorance are a thing of the past, a world in which those who produce the wealth in society, namely the working class, shall govern and benefit.

Together we shall struggle and together we shall be victorious in this struggle. It is for this reason that we are here to forge a bond of friendship and solidarity between the South African and British working classes; a lasting bond born out of the revolutionary struggle against capitalist exploitation and imperialist domination.

South Africa during and after Apartheid

Comrades, many working-class organisations, revolutionary parties and comrades and friends who joined us internationally in our struggle against Apartheid had very high expectations of the African National Congress. Millions of people knew the political programme of our national-liberation struggle – the Freedom Charter.

The Freedom Charter laid the basis for a free and democratic South Africa, in which black and white, coloureds and Indians would live as equals. The Freedom Charter demanded that the land should be given back to the people, and that the mines and the banks should be nationalised.

Clearly, neither the land issue has been solved nor have the mines and the banks been nationalised.
Instead, the international community are given conflicting information about the economic progress of South Africa, while at the same time being fed with rather sensational information about the president of the ANC, Jacob Zuma, and the president of the ANC Youth organisation, Julius Malema. Reported issues around Aids and crime have also tarnished the image of South Africa internationally.

To understand the present situation, we need to step back and recall our historical struggle against Apartheid, and we need to look at how the economic and social situation has changed under the ANC government.

During the anti-Apartheid struggle, the main contradiction was between the racist apartheid system and the black people of South Africa, namely Africans, Indians and coloureds. Therefore, the anti-Apartheid struggle was led by the national-liberation movement the African National Congress in alliance with the South African Communist Party and Sactu, the South African Congress of Trade Unions.

This alliance, under the leadership of the ANC, fought the apartheid system politically, through armed struggle, and by organising an international movement to isolate and boycott the apartheid system.

This heroic struggle of our people, fought over many decades and with untold sacrifices, cumulated in the 1990 release of all political prisoners, some of whom, like our leaders Nelson Mandela and Walter Sisulu, had been incarcerated for 27 years. The apartheid regime had to legalise all banned political organisations like the ANC, SACP, PAC, AZAPO and others. Within four years of this change, the apartheid system collapsed and a democratically-elected ANC government was ushered in.

This new government took over the old state machinery, with all its structures, complete with the old civil servants who had served the apartheid system. In addition, the new dispensation was based on a bourgeois constitution, which had been negotiated between the rising ANC and the then ruling National Party in 1992/3.

Since 1994, therefore, South Africa has been a bourgeois democracy, in which the property rights of the ruling capitalist class are enshrined in the constitution and upheld through the laws of the country, as enforced by the police and the judiciary. It is precisely for this reason that, since 1994, the main contradiction in South Africa has been between the ruling capitalist class and the working class.

Yet all political parties in South Africa deny this fundamental fact.

From revolutionaries to reformists

During the years of Apartheid, the capitalist class that owned the means of production in South Africa ruled through the racist and fascist apartheid state; it ruled through brute force. Open and direct oppression, torture and killings, arbitrary arrests and mass intimidation of the entire black population was the order of the day in order to exploit cheap black labour, not only for the enrichment of the white capitalist class but for the social and financial benefit of the entire white population.

After 1994, when Apartheid was defeated by the national-liberation struggle, the main contradiction in South Africa became the contradiction between the ruling capitalist class and the working class. The ruling capitalist class started to rule through bourgeois democracy, the same kind of rule that Marx and Engels in the Communist Manifesto described as the dictatorship of the bourgeoisie.

Hand in hand with this transition, the African National Congress, our former liberation movement, has step by step over the years been ideologically transformed into a social-democratic party.
Opportunism has become a material force within the leadership. Indeed, the entire leadership of the African National Congress and the revisionist South African Communist Party has been socially corrupted. It has been bought into the middle class to such an extent that these leaders cannot see their own future and their own interest as being separate from the future and interest of the white bourgeoisie and of the of the emerging black middle class.

To this extent, neither the leadership of the ANC nor that of the SACP are any longer able to represent the objective interest of the rank-and-file members of their organisations. Nor do they represent the basic aspirations of their memberships any more.

The social base of both organisations is made up of ordinary working-class people and their families, who increasingly revolt against the opportunistic leadership. This finds its expression in the increasingly violent infighting at congresses and meetings, and in the emergence of factionalism within these organisations.

All political parties in South Africa deny the fact that the main contradiction in our country today is between labour and capital. It is for this reason that social democracy is flourishing.

The working class is told by its leaders that we all sit in the same boat – together with capital – and that we must all behave ‘patriotically’ to ‘strengthen South Africa together’. Meanwhile, the capitalists are retrenching and shedding millions of jobs. Unemployment has reached 46 percent, and poverty and hunger are spreading like wildfire. Yet the working class is told that the only answer is to hold out for better times and be more patriotic.

As the class contradictions between labour and capital sharpen, millions of workers are expressing their anger and frustration through militant strikes and protest. With falling numbers of workers registering to vote, and falling numbers of those registered bothering to turn out, more than forty percent of the voting-age population are now expressing their disillusionment by staying away from the polls.

All political parties, including the ANC and the SACP, in various ways and with various levels of intensity, are engaged in what Karl Marx described as perfecting the existing capitalist state.

The working class is told that the present stage of the revolution is the national-democratic revolution. In reality, this line is nothing but a call for open class collaboration with the ruling capitalist class, and therefore all policies and programmes, all campaigns that have been developed in South Africa over the past 17 years, are nothing but attempts to perfect the machinery of the capitalist state and increase the efficiency of the capitalist system of exploitation.

Of course, this is sold to the working class and the population at large as: ‘making South Africa internationally competitive’!

Key goals of the Freedom Charter

During Apartheid, 87 percent of the land was allocated to whites. This systematic and barbaric land robbery was the hallmark of colonialism and Apartheid in South Africa. But instead of carrying out a land reform to give land to the landless masses as the Freedom Charter demands, the government passes legislation to regulate the relationship between the white landlords and commercial farms and the farm workers.

South Africa has a race- and class-based education system: government schools for the working class, Model C schools for the middle class, and private schools for the bourgeoisie. Instead of scrapping the race- and class-based education system, which was developed under De Klerk, the last Apartheid President, the new government introduces one education reform after another in order to ‘improve’ the three-tier education system and make it more ‘efficient’.

In the industrial and economical sphere, the Freedom Charter states that the mines and banks should be nationalised. But here too, the government has instead passed legislation to increase the shareholding of black capitalists within the mining industry. And instead of nationalising the banks, the government negotiates with the monopoly capitalists to increase credit to black middle-class people.

In other words: reformism is the order of the day. Despite all the revolutionary rhetoric, which is sometimes voiced at Sunday speeches, reformism has become a material force within the political circles of the ruling ANC-SACP alliance.

Problems for reformists

However, the bourgeois system in South Africa faces one fundamental problem: it does not have the financial or economic potential, nor a coherent political national will, to bribe significant sections of the black working class into collaboration.

During the Apartheid years, the ruling class successfully created an all-white labour aristocracy, which has survived to the present day and is still nourished by the system. The system has failed, however, and indeed it never had any intentions, to create a black labour aristocracy.

Reformism therefore is a material force within state structures; it is the ideology of the middle class, including the emerging black middle class.

But reformism has failed to use its bribed black middle-class placemen to dominate the hearts and minds of the militant working class in South Africa, whose consciousness is being determined by the prevailing conditions of poverty, exploitation and alienation. In other words: the revolutionary spirit of the South African working class has not been broken!

This revolutionary class is struggling daily against capitalist exploitation; this class wants freedom from wage slavery; this class sees socialism as the fulfilment of its aspirations!

Over the years, so-called ‘neo-liberal’ policies have been introduced, such as the privatisation of state assets throughout our country in adherence to IMF and World Bank demands.

As a result, a few people have become filthy rich, and the profits of corporations and international monopoly capitalists have increased significantly. Alongside these gains for the exploiters come the usual burdens on the working classes: unemployment has skyrocketed, and poverty and desperation amongst urban workers and the landless rural masses have reached unprecedented levels.

The social situation of the working class and the landless masses has deteriorated to such an extent that the government has been forced to introduce social benefits in an attempt to take the edge off the people’s anger and desperation. Twelve million people in South Africa have become recipients of these benefits, without which there would be outbreaks of hunger and starvation in South Africa, although it is one of the richest countries on earth. Such are the realities of the so-called ‘free-market economy’!

South African revolutionaries and Marxist Leninists founded the Marxist Workers School of South Africa in order to educate workers about the historical responsibility of the working class, as the most revolutionary class in our society, to organise itself and take up the struggle for a socialist future. We have realised that wage slavery, poverty, crime, ignorance and underdevelopment can only be overcome when the working class has established a socialist system under the dictatorship of the proletariat.

The unfolding class struggle of the South African working class is a struggle against the ruling capitalist class in South Africa. And it is at the same time part and parcel of the struggle of the international proletariat, of which we are a part.

Our struggle is part of the struggle of the international working class and oppressed people against capitalist exploitation and imperialist domination.

- It is for this reason that we support the land redistribution in Zimbabwe and the struggle of the Zimbabwean people under the leadership of ZANU-PF to defend its national sovereignty against British imperialism.

- It is for this reason that we call for the victory of the national-liberation struggle in Iraq and Afghanistan

- It is for this reason that we support the anti-imperialist national-liberation struggle of the Green revolution against the internal counter-revolution and the barbaric bombardment and re-colonisation of Libya by Nato.

- It is for this reason that we support the anti-imperialist Syrian Baath party and the coalition government in Syria, which includes the Syrian Communist Party, in its struggle against internal counter-revolution, destabilisation by reactionary Arab regimes and imperialist aggression.

- It is for this reason that we support the Palestinian national-liberation struggle for a united and democratic Palestine, in which muslims, jews and christians can live side by side in peace, free and liberated from the reactionary and racist ideology of Zionism

- It is for this reason that we support all socialist countries like the Peoples Republic of China, the Democratic Peoples Republic of Korea, the Republic of Cuba and the Socialist Republic of Vietnam.

Each of these socialist countries is at a different stage of development, but nevertheless they are all upholding socialism and developing their countries under extremely difficult conditions of world imperialist domination. Each of these countries is living proof that the working class can be the master of its own destiny.

We fully support the socialist countries in the defence of their hard-won victories and in the defence of their national sovereignty and territorial integrity.

- It is for this reason that we build international relations with revolutionary working-class organisations and parties: parties that are based on Marxism Leninism; parties which understand that without revolutionary theory there can be no revolutionary movement; parties which have consciously broken all ties with opportunism, revisionism, social democracy and Trotskyism.

The Communist Party of Great Britain (Marxist-Leninist) is one such party that tirelessly exposes these petty-bourgeois trends within the working-class leadership; that supports the anti-imperialist struggles of the oppressed people, and that fights for the establishment of a truly revolutionary proletarian party of the British working class.

We would once more like to thank the leadership of the CPGB-ML for the invitation and the opportunity to address this meeting.

Long live the solidarity between the British and South African working classes!
Long live proletarian internationalism!
Workers and oppressed people of the world unite against imperialism!

Defend Iran against imperialist aggression

The following article will be presented to a workshop at Occupy Bristol tomorrow.

Iranian protesters during a demonstration in front of the British Embassy, in Tehran, on Tuesday 29 November.

Iranian protesters during a demonstration in front of the British Embassy, in Tehran, on Tuesday 29 November.

Shock-horror: Iranians invade our embassy!

There was a big splash in the media at the end of November. The headlines were screaming about Iranian government agents attacking the British Embassy in Tehran.

Western governments lined up to say what a terrible affront this was against international law; what uncivilised behaviour this was. Statesmen pointed to a recent report from the IAEA (the UN’s nuclear watchdog) suggesting that there was now evidence that Iran is trying to make a nuclear bomb.

It was clear what capitalism wanted everyone to believe: Iranians are a bunch of wild-eyed Islamist fanatics hell-bent on plunging the world into nuclear war, and the only thing standing in their way is the glorious ‘international community’.

Why do they want us to believe this story? Because our masters want to get rid of the government in Tehran and replace it with another that will do their bidding. Why? Because they need to reinforce their stranglehold on the oil market and their geopolitical power in the region, and an independent, anti-imperialist Iran is getting in their way.

And why is it so urgent to attack Iran right now? Because the capitalist system is in such a deep crisis of overproduction that the only solution is for imperialism to plunge deeper into war – or for imperialism itself to be overthrown.

Some history

Let’s look at some of the reasons why those Iranian students might have been angry enough to want to occupy the British Embassy.

Back in 1953, Iran had an elected, secular government, led by Mohammad Mossadeq. This was overthrown in a coup engineered by British and US imperialism, which then planted in its place the Shah of Iran. Under the Shah’s bloody repression, Iran was plunged back into feudal backwardness, with a government that served the interests of the West.

In 1979, popular revolt ousted the Shah. Early hopes that this would develop in the direction of socialist revolution were dashed, as the mosque benefited from the relative weakness and disarray of the socialist forces. Yet henceforth Iran continued to be a thorn in the side of imperialism.

Least welcome of all to western imperialists has been the advent of the populist Ahmadinejad government in 2005, standing on a broad base of support from the poorest sections of society, supporting the Palestinian struggle against zionism and championing the independence and sovereignty of the Iranian nation.

In particular, President Mahmoud Ahmadinejad has been associated in the western press with the development of Iran’s nuclear industry. Imperialism pretends to have proof that Iran, under the cover of a civil nuclear programme, is really aiming to produce its own bomb. There are two points to make here.

First: the countries with the worst track record of war crimes in the last half century, America, Britain and Israel, have more nuclear weapons than any other nation. Israel alone possesses around 200 ready-to-go nuclear weapons. Under these circumstances, weaker countries might be well-advised to equip themselves with the best defence equipment available.

Iraq and Libya both conceded to imperialist pressure to give up their nuclear weapons. North Korea declined. Which country has yet to be invaded and occupied?

Second: contrary to what is implied in the most recent IAEA report, it remains the case that there is no evidence that Teheran is currently trying to make a bomb – and America knows it. The panic around the imaginary bomb is being whipped up purely and simply to bump public opinion into support for further aggression against Iran.

For years, exhaustive and intrusive inspections have been carried out within Iran, and for years the IAEA itself had the honesty to conclude that there was no proof to back up the allegations, despite enormous pressure from imperialism.

How the US nobbled the nuclear watchdog

In 2009 the former IAEA chief, Mohamed ElBaradei, came to the end of his term of office. Washington never liked ElBaradei, who entertained an inconvenient belief in the neutrality of UN bodies and took his job too seriously for America’s liking.

This time they went to work, lobbying hard to bump a rank outsider, Yukia Amano, into the top position. Secret US diplomatic cables released on WikiLeaks reveal him to be “solidly in the US court on every key strategic decision, from high-level personnel appointments to the handling of Iran’s alleged nuclear weapons programme”, and report that “Amano’s first bilateral review since his election illustrates the very high degree of convergence between his priorities and our own agenda at the IAEA. The coming transition period provides a further window for us to shape Amano’s thinking before his agenda collides with the IAEA Secretariat bureaucracy.”

So having got all their ducks in a line, the White House was able to sit back and wait for a newly tractable IAEA to dish up its ‘dodgy dossier’ on 8 November. On the back of this fiction Washington managed to steam-roller through the IAEA’s board of governors a resolution expressing “deep and increasing concern about the unresolved issues regarding the Iranian nuclear programme, including those which need to be clarified to exclude the existence of possible military dimensions”.

However, Washington had failed to get Iran reported to the Security Council or to impose a deadline for Tehran to comply with the latest demands. Clearly the need was felt to ratchet up the campaign of intimidation another notch. To this end, on 21 November, the US, Britain and Canada announced unilateral sanctions against Iran’s banking and energy sectors. France put in a sly kick too, urging world powers to boycott Iranian oil and freeze (ie, steal) her financial assets. China and Russia have joined Iran in denouncing these new sanctions.

The dirty war

Meanwhile, behind all this fabrication of evidence, diplomatic arm twisting and economic blackmail, imperialism has long been engaging in a brutal campaign of espionage, terrorism, assassination and sabotage against Iran.

Leading Iranian scientists have long been targeted for assassination. Recent examples include the car bombs that claimed the lives of two university professors, Majid Shahriari and Fereydoun Abbasi last year, and the booby-trapped motorcycle that slew another professor, Masoud Ali-Mohammadi.

Now, with rival Republican contenders for the presidency striving to outdo each other in fascist zeal, the ‘secret’ war against Iran is the best-advertised in history. According to AFP, Newt Gingrich “proposed at a 12 November debate that Washington kill Iranian scientists and disrupt Tehran’s suspect nuclear programme – ‘all of it covertly, all of it deniable’.

In that same forum, Santorum said the United States must do ‘whatever it takes to make sure’ Iran does not develop a nuclear programme – then wondered whether Washington may already be heavily involved in doing just that. ‘There have been scientists turning up dead in Russia and in Iran. There have been computer viruses. There have been problems at their facility. I hope that the United States has been involved with that,’ he said. ‘I hope that we have been doing everything we can, covertly, to make sure that that programme doesn’t proceed,’ he said.” (8 December 2011)

There can be no doubt that Washington, London and Tel Aviv are already up to the neck in dirty tricks without the need for further prompting from the Tea Baggers. The ‘computer viruses’ to which Santorum referred clearly has in mind the Stuxnet cyber assault on Iran’s nuclear programme launched last year.

Nor are the attacks confined to cyberspace. In mid-November a missile-testing base near Tehran suffered a blast that reportedly killed over 30 members of the Iran Revolutionary Guard Corps, including a leader of Iran’s missile programme, Major General Hassan Moqqadam. Time Magazine said this was the work of Mossad.

Then at the end of November there was a further blast, this time at a uranium processing plant in Isfahan. Israel’s former director of national security, Major-General Giora Eiland, bragged that the explosion was no accident, adding that “There aren’t many coincidences, and when there are so many events there is probably some sort of guiding hand, though perhaps it’s the hand of God.”

Curiously, none of the dirty tricks practiced by Washington and Tel Aviv excites anything like the manufactured outrage that greeted the B-movie fiction spun around a non-existent Iranian government plot to bump off the Saudi ambassador to the US.

29 November demonstration against the British embassy

So maybe now it’s easier to grasp why Occupy Bristol and Occupy London were joined by Occupy the British Embassy.

The self-appointed guardians of ‘democratic western values’ send saboteurs and death squads into other people’s countries at will, safe in the knowledge that the ‘international community’ will not raise a finger to stop them. But just let some enraged Iranian students lob a few bricks at the British embassy and pitch a portrait of the Queen out of the window and the UN Security Council cannot restrain its righteous indignation, condemning the demo “in the strongest terms”.

William Hague whinged that Iran had “committed a grave breach” of the Vienna convention. Obama declared himself “deeply disturbed” by what had happened, the German foreign minister fulminated against this “violation of international law”, whilst his French counterpart agreed that “the Iranian regime has shown what little consideration it has for international law”.

As for the nonsense that the occupying students were just acting as agents of the government, this hardly squares with the fact that the demonstrators in the end could only be restrained by the government’s own security forces using tear gas to clear the embassy compound! (We need hardly add that, had the demonstrators instead got themselves tear-gassed protesting against Ahmadinejad, they would at once have been hailed by the bourgeois media as peaceful democrats cruelly repressed by a tyrannical regime.)

Iran stands firm

Imperialist aggression against Iran is driven not only by the desire to humble an anti-imperialist force and strengthen and extend the imperialist stranglehold on resources and markets in the Middle East, but also by the strategic goal of containing Russia and China, a fact which is not lost on either country.

China champions Iran’s right to develop its civil nuclear industry, and neither China nor Russia has any interest in collaborating with the West’s sanctions campaign. This position constitutes an unwelcome stumbling block for the warmongers.

This challenge to imperialist world domination, taken together with the courageous anti-colonial resistance being mounted in Afghanistan, Iraq, Libya, Syria and Somalia, all add to the perils awaiting the warmongers should they persist.

Nor should imperialism dismiss lightly Iran’s own ability to defend herself, even without the bomb she is accused of coveting. The recent successful downing of an advanced US RQ-170 drone over the eastern part of the country, one of many drones in routine violation of Iranian airspace, not only exposes US covert operations and demonstrates Tehran’s vigilance but also delivers sensitive military intelligence into anti-imperialist hands.


Iran’s struggle to defend herself demands the warmest support from all those in the anti-imperialist movement, not least those resisting imperialism within the belly of the beast itself.

After all, who better upholds the anti-capitalist aims of the Occupy movement than those brave students who dared to occupy the British embassy in Tehran? The students put it very well themselves, in a letter explaining their actions.

‘We have occupied the British embassy to voice support for the 99 percenters of the world and in opposition to the policies of the world arrogance,” the letter said on Saturday. ‘We as the students who have occupied the British embassy in Tehran announce explicitly that we are standing for our historical decision and will humiliate Britain and make it regret,’ it added.

The Iranian students called on the students, elites and truth-seeking people across the world to attack the interests of Britain in their region and stop London from looting their countries and nations any further.

By giving active solidarity to those who stand in defence of Iran, Syria and other anti-imperialist countries under attack, we the 99 percent will strengthen our hand against the same imperialist enemy that is currently demolishing welfare, looting jobs and driving us into poverty and war.

Victory to the Iranian resistance against the imperialist warmongers!
Victory to the 99 percent!

Current crisis of overproduction – worse than the 1929 crash

A presentation to the International Communist Seminar delivered by Harpal Brar, on behalf of the CPGB-ML, Brussels, 15 May 2009.

Watch a video presentation of this material on YouTube

The world capitalist system is in the midst of a deep recession, threatening to turn into an unprecedented slump, compared with which the 1929 depression, which lasted more than 10 years, would look almost mild.

Unprecedented crisis

All around us is the spectacle of saturated markets, rising unemployment, plunging stock markets, collapsing giants of finance capital, real-estate prices in free fall, cascading corporate bankruptcies, freezing credit, a shrinking world economy, contracting world trade, and ever-increasing misery and destitution heaped upon scores of millions of workers across the globe.

Whatever its appearance, this is, at bottom, a veritable crisis of overproduction. At times like this, one is forcefully reminded of the following never-to-be-forgotten words of Engels:

Commerce is at a standstill, the markets are glutted, products accumulate, as multitudinous as they are unsaleable, hard cash disappears, credit vanishes, factories are closed, the mass of workers are in want of the means of subsistence because they have produced too much of the means of subsistence, bankruptcy follows upon bankruptcy, execution upon execution. (Anti-Dühring, 1877, Foreign Languages Publishing House, Moscow, 1962, p377)

Written 133 years ago, the above observation of Engels’ has a remarkably topical ring to it; it is as though he were writing about the present crisis. The Marxian analysis, encapsulated in succinct form in the preceding words of Engels, alone presents us with the key to an understanding of this crisis, as well as the way out.

Bourgeois economic science has little to offer in the way of an explanation of, let alone a solution to, this crisis - not because bourgeois economists are unintelligent, but because of their narrow outlook, hemmed in as it is by their faith in the eternity of the capitalist system of production, supplemented by the imperialist loot, a portion of which stuffs their wallets by way of bribery, a continuing incentive against recognition of the obvious reality. Even when brutal reality brings them close to grasping the underlying cause of the crisis, they shy away from it, often ending up by confusing symptoms and their causes, appearances and reality. One has to indulge in archaeological exercises, as it were, to dig and drag the truth out into the light of day.

As in 1877, so today, Engels’ concise and clear words contain the secret to an understanding of this, as indeed of every past and future, capitalist crisis: “The workers are in want of the means of subsistence because they have produced too much of the means of subsistence” (our emphasis), ie, these devastating crises are caused by overproduction.

The crisis that presently confronts us is of truly gargantuan proportions; prominent monopoly capitalists, as well as the ideologues of finance capital, openly admit to its ferocity, depth and scale. The economy has fallen off a cliff“, says Warren Buffet, the multibillionaire investor. Bourgeois analysts and commentators routinely and variously characterise this crisis as the world’s deepest economic downturn since the Great Depression, a once-in-a-century tsunami, and a natural disaster. There is no doubting that the world capitalist economy has
stumbled, as it was bound to, over the edge of the ravine with great speed and alarming global synchronicity. [1]

Faith in market shaken

The unfolding crisis has turned all the bourgeois economic dogmas upside down and shaken the faith of even a section of the capitalists and their ideologues in the ability of the market to work miracles. When, over a year ago, Joseph Ackerman, the Chief Executive Officer of Deutsche Bank, said that he no longer believed in “the market’s self-regulating power”, everyone in the world of high finance and industry was startled. Now such assertions are commonplace.

The former chief of the Federal Reserve, Alan Greenspan, a proponent of financial innovation and deregulation, and who played such a crucial role in the creation of the most recent bubble, has confessed that the financial system was flawed. Jack Welch, the former CEO of General Electric, has described the shareholder value movement, which especially characterised Anglo-American finance capital, as “the dumbest idea in the world”. Lawrence Summers, former US Treasury Secretary, and now heading the Obama economic team, says: “The view that the market economy is inherently self-stabilising, always, has been dealt a fatal blow.”

No-one batted an eyelid when, at the recently-held G20 Summit, Gordon Brown, Britain’s prime minister, declared the gathering a requiem for laisser-faire capitalism. The destructive force of this crisis has well and truly rubbished the market fundamentalism of the Davos man, which only recently bestrode the world like a colossus.

State intervention, only yesterday scoffed at, has been restored to respectability. “Paulson [Bush's Treasury Secretary] is the champion nationaliser of all times. He managed more nationalisation than any man on the planet.” So said Fred Bergsten, director of the Peterson Institute for International Economics. Mr Bergsten ‘forgot’ to add that Paulson’s nationalisation was merely the nationalisation of the debt and losses of finance capital for the sole purpose of saving this historically outmoded system at the cost of billions of US taxpayer dollars.

Wouter Bos, Dutch finance minister and leader of the Labour Party, says that the present crisis has killed the myth of “happy globalisation” and called for the “visible fist” of the government to supplement the “invisible hand” of the market in order to maintain support for the open markets and free trade.

Continuation of earlier crises

The present industrial, commercial and banking crisis is actually a continuation, only much more virulent in its intensity, of the crisis of overproduction that appeared in the middle of 1997 in the form of a currency collapse in the Far East, beginning with Thailand and spreading like wildfire to Indonesia, Malaysia, the Philippines and South Korea, before jumping continents a year later to overwhelm Russia, and through it the US and Europe, in the process wreaking havoc, causing big business failures, throwing millions of workers out of work, and helping to sharpen inter-imperialist contradictions.

For a while, as the economies in the Far East suffered under the devastating blows of a thorough and deep recession, and Russian capitalism came close to collapse, strangely the US and European imperialist countries managed to stay out of harm’s way. As a matter of fact, despite an unprecedentedly high US trade deficit, the stock markets of the US and Europe soared ahead. This, however, was only an apparent paradox - not a real one. At the time, we wrote this by way of an explanation of this apparent paradox:

As Marx explained long ago, the fever of speculation is only a measure of the shortage of outlets for productive investment: the depressed state of industry is reflected by an expansion of speculative loans and speculative driving up of share prices. The crisis of overproduction is a reflection of the over-accumulation of capital which, unable to find profitable opportunities for productive investment, seeks a way out in stock market and other speculative activity in an endeavour to make a profit. The tendency for the mass of surplus value to increase at a slower rate, as Marx showed, than the total capital employed is expressed in the tendency of the rate of profit to fall, which only goes to show that production for profit is an inadequate basis for the constant development of society’s material conditions of existence.
(’Indonesia - a harbinger of revolutionary upheavals’, Lalkar, July 1998, reproduced in Harpal Brar, Imperialism - The Eve of the Social Revolution of the Proletariat, London, 2007)

The demand for the products of industry fell in one sector after another owing to overproduction (’too much capacity’, as the bourgeois commentators express it, fearing like the plague the correct Marxist terminology). This shrinkage of demand, combined with the crisis in the Far East, which had temporarily ceased to be a profitable avenue of investment, resulted in the flight of $109bn of capital from the five affected far eastern countries to the centres of imperialism.

All these massive sums and more were pumped into the US and European stock markets, which rose 52 percent between the start of 1997 and the middle of 1998. Since the buoyancy of the stock market bore little relation to the productive base, which continued to limp far behind, it was only a question of time before this speculative bubble burst, with all the inevitable horrendous effects on the economy - from manufacturing to financial institutions.

By the end of August 1998, following the Russian default, and in response to it, events moved with bewildering speed, with the world stock markets taking a pasting. Shares in London experienced their biggest fall since the crash of 1987. On Friday 28 August 1998, the FTSE 100 stood 1,000 points below its all-time high of 6,179, reached only a few weeks earlier. On 2 October, it closed at 4,750 - 23 percent below its peak of 17 July 1998.

The Dow fell dramatically from its peak of 9,337 on 17 July to 7,286 by the end of August - approximately 20 percent below its mid-July peak, losing all the gains it had made since the beginning of 1998.

The Nikkei average fell to a 12-year low. Some European equity markets suffered falls of 20 percent from their July peaks.

On 23 September 1998, Long-Term Capital Management (LTCM), one of the largest hedge funds in the US, with a total market exposure of $200bn, went bust, forcing the Federal Reserve to arrange its rescue, for its failure would have meant a meltdown of the financial system in the US and beyond.

The plunging stock markets, in the wake of the Russian default, and the near-collapse of LTCM, obliged Philip Coggan of the Financial Times to describe their fallout in these colourful military terms:

The market is feeling as battered as wartime Berlin at the hands of the Red Army. At times this week, it has seemed as if the entire Red Army had been marching on the stock market. (’Red Army sings the blues’, Financial Times, 3 October 1998)

The entire global capitalist economy was peering into the abyss. To prevent a plunge to the bottom, the US Treasury, in cooperation with the Federal Reserve, coordinated an international response of cuts in interest rates aimed at sustaining artificially high equity prices, and thus keep US growth and the world capitalist economy afloat - temporarily at least. The Fed’s three interest rate cuts in quick succession, followed by similar cuts by central banks in 22 countries, served as a stimulus to arrest, and then to reverse, the slide in equities in the US, across Europe and other parts of the globe. On 16 March 1999, the Dow broke through the 10,000 barrier, with the FTSE also clocking up significant, and equally unsustainable, rises.

The trick worked for a while because of a remarkable coincidence of events, namely, the recession in the world’s then-largest creditor nation, Japan, and five other Asian economies, on the one hand, and the exuberant expansion in the largest debtor nation, the US, on the other, which served to complement each other perfectly, thus temporarily preventing world capitalism from stepping over the precipice.

In other circumstances, US expansion would have been inflationary enough to undermine the dollar and cause a flight of capital from the US - with all the disastrous consequences resulting from such a flight. Instead, investment flowed into the US, which strengthened the dollar. The strengthened dollar, in turn, enabled the US to play the dual role of an engine of global growth and an importer of last resort for the world economy. US consumers, buoyed by cascading paper wealth, were able to indulge in a spending binge without bothering to save since foreigners were willing to step in with the necessary capital for US investment.

Strong capital inflows helped finance a stock-market and corporate investment boom, enabling US households to spend in excess of their income, and the US economy to grow, despite a growing US trade deficit. While unprecedentedly high stock-market valuations became the driving force behind the spending binge in the US, the latter, in turn, temporarily to be sure, drove equity prices up further still.

The moral hazard factor - the belief that the Federal Reserve was putting a safety net under the market following the 0.75 percent cut in interest rates in 1998, that it would not allow the stock market correction to go so far as to push the US economy into recession, and that it would come to the market’s rescue by opening the monetary sluice gates - helped to sustain high valuations on Wall Street.

The actions of the Fed resulted, as they were bound to, in exacerbating the huge imbalances in the US economy - an unsustainable asset-price bubble, hand in hand with an unsustainable current account deficit. By March 1999, the ratio of the US stock market value to GDP had reached 150 percent.

The US stock market is crucial to the growth of the global economy, furnishing the confidence and collateral for American consumers’ borrowing and spending, which means that US equities cannot stand still. They have to be on a rising trajectory if the US economy is not to come to a grinding halt - and with it, capitalist economies all over the world. But reason suggests that, over time, equities cannot rise at a rate faster than that of the nominal Gross National Product, for the price of shares is based on dividends, which depend on profits; and profits cannot indefinitely increase their share of the economy.

The truth, however, is that the world capitalist economy has for decades been suffering incurably from a crisis of overproduction. No amount of tinkering with interest rates, or any other fine tuning of the economy by the central banks, can get rid of the inherent problem of capitalism. Even bourgeois economists come pretty close to accepting this truth from time to time.

Thus, in February 1999, a whole year before the crazy boom set in motion by the interest rate cuts of 1998 came to a rude halt, Andrew Smith wrote inThe Times: The world has too much industrial capacity, a situation worsened by Asia’s crisis, and it will take years of savage rationalisation [ie, recession] to bring capacity into line with demand.” (’Deflation is a debt trap’, The Times, 14 February 1999)

Logically, if there is a mismatch between demand and capacity, that is, if there is far less demand than capacity, there are only two ways out of the situation: first, reduce capacity and bring on an immediate recession; second, increase demand through the implementation of Keynesian measures, which in turn create even bigger problems, preparing the way for a far more devastating crash and crisis of overproduction.

Within the bounds of capitalism, there is no cure for crises of overproduction, which are merely an expression of the contradiction between social productive forces and private appropriation (see below).

Bursting of the dotcom bubble

Wheels began to come off with the bursting of the dotcom bubble, when the Nasdaq plunged from its peak of more than 5,000 in the spring of 2000 to 2,332 on 20 December, reaching a low of 1,725 on 12 April 2001.

Only a few months prior to the Nasdaq’s downward plunge, the global equity markets were on cloud nine, fully convinced that the US economy was set to grow at an ever-increasing rate, hand in hand with low inflation and low unemployment, thanks to the technological miracle. But, as Mr Philip Coggan, with the benefit of hindsight, was ruefully to remark, “there’s a problem with living on Cloud Nine: it is a long way down if you fall off“. (’A long way to fall’, Financial Times, 2 January 2001)

The Fed’s interest rate cuts had, not unexpectedly, failed to solve the problem, for consumers continued to be heavily indebted as companies grappled with unsold inventories. With a quarter of US production capacity lying idle, companies embarked on a programme of aggressive job cuts.

Global industrial production fell at an annual rate of 6 percent in the first half of 2001, as overproduction overwhelmed one sector after another.
From telecoms to chemicals and engineering, from services to manufacturing, the news was dismal. Faced with this harsh economic reality, theEconomist of 23 August 2001 was obliged to admit the arrival of the first economic recession of the new century with the words: ” Welcome to the first global recession of the 21st century. (’A global game of dominoes’)

In October 2001, US manufacturing output was 7 percent below its peak in June 2000. Production in the 30 richest countries belonging to the OECD grew by a mere 1 percent, compared with 4.2 percent in 2000 - notwithstanding interest rate cuts by the Federal Reserve from 6.5 percent to 1.75 percent in less than 12 months.

In October 2001 alone, US businesses slashed payrolls by 415,000 - the largest one-month drop in 20 years. In the two months of October-November 2001, the increase in the number of unemployed in the US totalled 800,000, taking the increase for the year 2001 as a whole to 2.2 million, the biggest annual increase in the jobless up to that time. The picture in Europe and Japan was similarly bleak. Thus, the three principal centres of monopoly capitalism found themselves in synchronised recession.

On 22 July 2002, the Dow Jones fell 3 percent to 7,785 - a level 33 percent below its January 2000 peak. The FTSE went down as low as 3,600 before closing at 4,051 on 5 October 2001. European stock markets, too, experienced sharp falls.

Climb out of recession

Since the second world war, the recession that set in in the aftermath of the bursting of the dotcom bubble was the longest. After three years of destruction of the productive forces and products alike, the world capitalist economy began its temporary climb out of the recession.

One of the factors that helped recovery was the state of the housing market, which remained buoyant throughout this period. And this for the reason that, while business investment collapsed and equities plunged, investors shifted to the property sector, thus engineering a housing-market bubble.

Rapidly rising house prices enabled consumers in the US to transfer their equity-extracting tactics to the housing market and merrily carry on spending. A crash in the property market, which was certain to arrive, as it did in the summer of 2007, was bound (as it already has), while burying house owners and other investors in real estate under a mountain of debt, to leave many a financial institution badly burnt. A collapse of the property market was only too likely to trigger a banking crisis of systemic proportions - and it has.

Besides, the three years of recession, as always, became the occasion for further concentration of capital, for further intensification of the exploitation of the working class, through savage rationalisation, increased productivity, cuts in healthcare and pension provision, a reduction in wages and the lengthening of working hours.

Thus it was that, according to official data, the profits of US companies rose from 7 in 2001 to 12.2 percent at the start of 2006 - climbing 123 percent over the same period. During that period, the share of national income going to the workers declined from 58.6 percent to 56.2 percent. Such a state of affairs, while affording temporary relief to capitalism, is not sustainable, for profits cannot indefinitely increase their share of the economy.

The continuing impoverishment of the masses, notwithstanding the real-estate bubble, was bound to undermine consumer spending and economic growth, thus bringing to a grinding halt the post-2002 recovery and precipitating yet another recession, only this time more horrendous, for, the ” last cause of real crises always remains the poverty and restricted consumption of the masses as compared to the tendency of capitalist production to develop the productive forces as if only the absolute power of consumption of the entire society would be their limit . (Karl Marx, Capital, Vol III, 1885, p484)

In the middle of March 2007, Harpal Brar published a collection of essays entitled Imperialism - the Eve of the Social Revolution of the Proletariat. In the preface to that collection, while alluding to the recovery following three years of recession, he wrote, ” One does not have to be a prophet to be able to foretell the inevitable and fairly sharp crash that is bound to follow this short period of industrial and commercial prosperity and stock market buoyancy, for the very means which capitalism uses to overcome the barriers inherent to it ‘again place these barriers in its way and on a more formidable scale’ (K Marx, Capital, Vol III, p250). The bourgeoisie gets over these crises through ‘enforced destruction of a mass of productive forces’ … on the one hand, and ‘by the conquest of new markets, and by the more thorough exploitation of the old ones’, on the other - that is by ‘paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented’ (K Marx and F Engels, The Communist Manifesto, p38).”

He also mentioned in the same preface that the stock market was beginning its downward spiral due, inter alia, to concerns over growing problems in the subprime mortgage sector (loans to uncreditworthy persons), unprecedented levels of debt and the likelihood of the US housing market crashing. Between 2000 and 2005, US house prices rose by 60 percent. Many other countries, including the UK, experienced even higher house price inflation. “The end of the US property boom”, continued Harpal Brar, “which is inevitable, will force US households to tighten their belts, start building up their savings, and thereby put an end to the US’s role as the world’s buyer of last resort.

The present crisis

Less than three months after the above lines were written, the present crisis of overproduction broke out with a virulence hitherto unknown, not even in the 1929 crash.

According to the latest analysis from the International Monetary Fund (IMF), world output is expected to shrink by between 0.5-1 percent this year for the first time since the second world war, with the economies of advanced capitalist countries expected to contract by between 3-3.5 percent. (Note on ‘Global economic policies and prospects’, 13-14 March 2009)

This latest forecast by the IMF tears up its earlier forecasts, made only a few weeks previously, in January, and predicts a far more severe slump this year and next. No region or country in the world is expected to emerge unscathed from this slump, according to the IMF. The World Trade Organisation (WTO) forecasts a decline of 9 percent in the volume of world trade. This free fall will take place despite the enormous monetary and fiscal stimuli (see below) already put in place.

The Eurozone economy is forecast to contract by 4 percent, Germany by 5 percent, Japan by a huge 6.6 percent, Italy by 4.3 percent, France by 3.3 percent, and the British economy by 3.7 percent. This contraction of the British economy will be a well-deserved economic lesson for Britain’s former Chancellor of the Exchequer (now Prime Minister), Gordon Brown, who foolishly boasted not so long ago that he had “eliminated boom and bust” and ensured a continuously upward trajectory for the British economy.

The reality is much harsher than the fantasies of a Gordon Brown. Consequent upon the present recession, the financial crunch, the collapse or near-collapse of most of the major British banks, the seizing up of credit, and Britain’s fast-declining GDP, the City of London faces the prospect of losing its status as a major financial centre, with devastating effects on the livelihoods of Londoners, for almost one third of London’s 4.2m jobs are supplied by finance and business services, with a mere 3.7 percent by manufacturing, excluding publishing.

Europe’s economy has been shrinking at a dizzying speed, losing 1.5 percent of production in the last quarter of 2008 alone. (See Financial Times, 11 March 2009)

In the largest European economy, that of Germany, GDP fell by 2.1 percent (an annualised rate of over 8 percent) in the last quarter of 2008 - the worst quarterly result since German reunification in 1990. The first quarter of 2009 is expected to witness an even faster decline. This January’s industrial orders were 37.9 percent lower than a year before, with overseas orders down by 42.5 percent. German exports in January were 20.7 percent below those of January 2008 and 4.4 percent below those of December 2008. Industrial output tumbled by 7 percent in the last two months of 2008.

French industrial production was down 13.8 percent year-on-year in January.

The UK reported a 5.6 percent fall in industrial production in the three months to the end of January 2009, compared with a 4.6 percent decline in the three months to December 2008.

From a peak in October 2007, manufacturing output had fallen in December 2008 by 10 percent in the US and the UK, 13 percent in Germany, nearly 15 percent in France, 17 percent in Italy, and 23 percent in Japan.

According to an IMF report, disclosed on 4 April 2009, in central and eastern Europe (including Turkey), GDP will plunge 2.5 percent, as opposed to the 4.25 percent growth forecast last autumn.

This region must roll over $413bn (€306bn/£279bn) in maturing external debt this year and finance $84bn in current account deficit. As a result, the region’s financing gap could be $123bn in 2009 and $63bn next year - $186bn altogether.

The Japanese economy declined more than 3 percent in the fourth quarter of last year and is forecast to decline a further 6.6 percent this year - the highest for any of the imperialist countries. In January, Japan suffered a 10 percent month-to-month drop in industrial production, with a sharp rise in unemployment to 4.4 percent of the labour force. Japan’s stock market tumbled to a 26-year low on 9 March in response to a record current account deficit of $1.75bn in January - the first such deficit since 1996.

These falling corporate earnings, unprecedented in their ferocity, are clearly indicative of the vulnerability of Japan’s high value-added manufacturing sector to an external demand shock, according to Mr Peter Tasker at Dresdner Kleinwort, a leading German investment bank. Mr Tasker added: “It seems so unfair. Those who partied hardest should get the worst hangovers. Japan stayed in its boom sipping mineral water. Yet it is now suffering from a humdinger of a headache.” (’Something must work’ by Ralph Atkins, David Pilling and Krishna Guha, Financial Times, 7 February 2009)

Japanese exports fell a horrifying 35 percent in December 2008 as compared to a year earlier, as demand for cars, electronics and precision equipment crumbled across the world.

What is true of Japan is equally true of much of Asia. The non-involvement of most Asian banks in the subprime mortgage fiasco has not done much to protect Asia’s economies from a severe downturn, transmitted by trade to a collapse in industrial production and consumer demand. The IMF has halved its 2009 forecast for Asian GDP growth to 2.7 percent from the 4.9 percent it was estimating barely two months ago.

Economies that once seemed have been brought to their knees. Singapore’s economy is expected to shrink by 9 percent this year, and South Korea’s by 3 percent. This is a revised figure after the release of statistics showing that in the first quarter of 2009, Singapore’s trade-dependent economy contracted by 11.5 percent, forcing the government to cut its GDP forecast from -6 percent to -9 percent. This is a sharp deterioration in Singapore’s economy since the last quarter of 2008, during which its economy contracted by 4.2 percent. The country’s manufacturing, which accounts for a quarter of its GDP, was worst affected, suffering a decline of 29 percent from a year ago because of a steep fall in the export of electronics, pharmaceuticals and chemicals. (See ‘Singapore suffers 11 percent contraction’ by John Burton, Financial Times, 15 April 2009)

India, whose economy grew by 9 percent last year, is expected by the IMF to grow this year only 4.3 percent. Even China, with a phenomenal rate of growth over the last three decades, and which grew by 13 percent last year, is forecast by the IMF to grow a mere 6.3 percent. The IMF estimates the whole of Asia’s growth this year to be just 2.7 percent - a fraction of the 9 percent attained in 2007.

The reason for this decline is the increased trade integration of Asia with the rest of the world, and its heavy reliance on external demand. At the time of the previous crisis in the late 1990s, exports accounted for 37 percent of developing Asia’s output; today they account for 47 percent. The ratio of China’s exports to its GDP rose from 38 percent at the beginning of 2002 to 67 percent in 2007. Thus, since the last crisis, Asia has swapped its dependence on external financing for dependence on external demand, 60 percent of which comes from the rich imperialist countries of America and Europe. As the latter themselves are in the grip of deep and enduring crisis, they are buying far less from Asia - and thus are exporting economic contraction via trade.

The global economy is experiencing a dramatic shrinkage and causing world trade flows to evaporate at an even faster rate than the shrinkage in global output. As a result, the hardest-hit are the export powerhouses of Asia. Exports from Japan, Taiwan and the Philippines are barely above half the levels they were at a year ago.

China’s exports fell by a fifth over the last year, its imports by even more. In February this year, China’s exports tumbled by more than a quarter, as it took the full impact of a collapse in global demand for manufactured goods. Weakness in consumer demand all over the world, especially in Europe and America, has fed through the Asian supply chain and is now having its full impact on China. As for Chinese imports, after dropping 43 percent in January, they fell another 24 percent in February.

In addition to problems on the export front, poor countries of Asia and elsewhere are being hit by a decline in revenues from tourism and a fall in the demand for labour in the Gulf region and elsewhere, resulting in a decrease in the remittances sent by workers abroad to their home countries, causing considerable hardship to millions of families.

The car industry

Every sector of the economy - from automobiles to aircraft, electronics to consumer durables, footwear to clothing; in the centres of imperialism as well as in the non-imperialist countries - has become, to a larger or lesser degree, the victim of this crisis of overproduction. We shall illustrate this crisis by reference to the car industry, which is such an important component of the world capitalist economy.

Faced with worsening unemployment and remuneration, car owners everywhere are replacing their vehicles far less frequently. In the US, the average age of trade-ins soared to 75 months at the end of 2008, from 62 months in the final quarter of 2006.

Since October 2008, US car sales have been lower than the annual scrappage rate of 12.4m vehicles; that is, the number of cars on the roads in the world’s largest car market is declining. “Frugalism is the new cool” in the US. Before the credit crunch, in a normal year 16-17m new cars were sold, with some expecting the number of new units sold to reach 20m over the next few years. Now, however, sales are running at an annual rate of little more than 10m - the lowest number since 1982, when the US had a smaller population.

Globally, car production declined to 66.2m units in 2008, from 68.9m in 2007. It is expected to fall further in 2009 to 59.3m - a reduction of nearly 10m units in a matter of two years. This cannot fail to have a depressing effect on the manufacturers and workers alike in the car industry, with wide-ranging ramifications in the many other sectors of the economy that by innumerable threads are linked with, and dependent on, the car industry. (See ‘The thrill has gone’ by John Reed and Bernard Simon, Financial Times, 3 February 2009)

And just the same conditions are staring every other industry in the face. It is clear that industrial production and merchandise exports are in free fall. The reality could be even worse than the forecasts made by the IMF and other bodies, considering the rate at which the figures regarding the deterioration in global output have had to be downgraded.

Crisis reveals the contradictions of capitalism

Like every preceding crisis of overproduction, the current crisis is a damning indictment of capitalism, bringing society as it does “face to face with the absurd contradiction that producers have nothing to consume, because consumers are wanting“. (Engels, Anti-Dühring, p387)

Even the realisation, no matter how vague, of this truth does not prevent the lucratively-rewarded analysts and commentators who write in the economic pages of prestigious organs of finance capital from asserting, in the face of massive contrary evidence, that capitalism, with all its faults, is better than any alternative.

Nothing could be further from the truth. Today, as has been the case for over a century, capitalism alone is responsible for so much misery, starvation and downright degradation, for it alone prevents the means of production functioning unless they have first been converted into capital; into the means of exploiting human labour-power.

In capitalist society, production does not take place unless the capitalist owners of the means of production and subsistence can make a profit, which in turn can only come about if they are successful in selling the commodities they produce. And herein lies the rub. Capitalism, having at its disposal
the modern means of production, is able to expand production in a manner that “laughs at all resistance. (Engels, Anti-Dühring, p377)

However, such resistance is offered by the market. The methods employed by capital (unlimited development of the productive forces of society) for its preservation and self-expansion - the sole raison d’être of production under capitalism - which drive towards unlimited expansion of production, continually come into conflict with the narrow limits within which this self-expansion, resting on the expropriation and pauperisation of the labouring masses, takes place and can alone take place.

Capitalism forces the consumption of the masses to the levels of starvation, and thus destroys the market for the commodities it produces. This conflict between the methods and purpose of capitalist production finds its expression in periodic capitalist crises which ” are always but momentary and forcible solutions of existing contradictions. They are violent eruptions which for a short time restore the disturbed equilibrium.” (Marx, Capital, Vol III, p249)

In the words of Engels, ” The enormous expansive force of modern industry appears to us now as a necessity for expansion, both qualitative and quantitative, that laughs at all resistance. Such resistance is offered by consumption, by sales, by the markets for the products of modern industry. But the capacity for extension, extensive and intensive, of markets, is primarily governed by quite different laws that work much less energetically. The extension of the markets cannot keep pace with the extension of production. The collision becomes inevitable, and as this cannot produce any real solution so long as it does not break in pieces the capitalist mode of production, the collisions become periodic. (Anti-Dühring, p377)

As a matter of fact, continued Engels, ” since 1825, when the first general crisis broke out, the whole industrial and commercial world, production and exchange among all civilised peoples and their more or less barbaric hangers-on, are thrown out of joint every ten years …” During these crises, commerce comes to a grinding halt, the markets are saturated, a multitude of products accumulates, credit and cash vanish, factories are closed, bankruptcies follow in quick succession, the mass of workers are bereft of the means of subsistence - because they have produced too much of the means of subsistence.

There was a time when humanity starved because it did not possess in sufficient quantity the means of subsistence. Under the conditions of the capitalist system of production, the mass of workers starve because they have produced too much of the means of subsistence. We have reached a stage of development at which the capitalist system is an anachronism - an absurd obscenity. And yet we are daily told by the hirelings of capitalism that there is no better alternative to this system; that capitalism is the final destination of humanity, and that Marxism is a failed system.

No, the truth is that, compared with the absurdity of capitalist economics, voodoo magic and a belief in virgin birth represent the highest achievements of scientific thought. The truth is that, as someone remarked a few years ago, bourgeois economics is no more than a modern form of alchemy, with the practitioners of its black arts being nothing more than highly-paid witch doctors.

The stagnation” produced by these periodically recurring breakdowns “lasts for years, during which time ” productive forces and products are wasted and destroyed wholesale until the accumulated mass of commodities finally filters off, more or less depreciated in value, until production and exchange gradually begin to move again. Little by little the pace quickens. It becomes a trot. The industrial trot breaks into a canter, the canter in turn grows into the headlong gallop of a perfect steeplechase of industry, commercial credit and speculation, which finally, after break-neck leaps, ends where it began - in the ditch of crisis. And so over and over again. (Ibid, p382)

Continued Engels: ” In these crises, the contradiction between socialised production and capitalist appropriation ends in a violent explosion. The circulation of commodities is, for the time being, stopped. Money, the means of circulation, becomes a hindrance to circulation. All the laws of production and circulation of commodities are turned upside down. The economic collision has reached its apogee. The mode of production is in rebellion against the mode of exchange, the productive forces are in rebellion against the mode of production which they have outgrown.

During these crises, the ” whole mechanism of the capitalist mode of production breaks down under the pressure of the productive forces, its own creations. It is no longer able to turn this mass of means of production into capital … Means of production, means of subsistence, available labourers, all the elements of production and general wealth, are present in abundance. But ‘abundance becomes a source of distress and want’ (Fourier), because it is the very thing that prevents the transformation of the means of production and subsistence into capital. For in capitalistic society the means of production can only function when they have undergone a preliminary transformation into capital, into the means of exploiting human labour-power. The necessity of this transformation into capital of the means of production and subsistence stands like a ghost between these and the workers. It alone prevents the coming together of the material and personal levers of production; it alone forbids the means of production to function, the workers to work and live .” (Ibid, pp378-9)

Unemployment and misery

The recession is wreaking havoc on working people all over the world. With millions of jobs already lost, unemployment is set to rise inexorably as the recession bites deeper still. In 2008, the figure of global unemployment stood at 190 million. According to the International Labour Organisation (ILO), more than 50 million more are expected join the ranks of these Lazarus layers.

In the EU, 17.5 million people are presently unemployed - 1.6 million more than a year ago. On 30 March, Angel Gurría, the head of the Organisation for Economic Cooperation and Development (OECD), stated that one in ten workers in the advanced economies will be without a job next year (2010) “practically with no exceptions”, warning that the number of the unemployed in the 30 rich OECD countries would swell “by about 25 million people, by far the largest and most rapid increase in OECD unemployment in the postwar period”.

This, he said, would happen as the OECD expected advanced economies to shrink by 4.3 percent in 2009 - with little or no growth expected in 2010. This forecast is far worse that the IMF’s most recent (January 2009) estimate of a 3-3.5 percent contraction for 2009. (See ‘Forecast of 25 million rise in unemployment’, Financial Times, 31 March 2009)

In the US, more than 4 million people have lost their jobs in the past 12 months, nearly half of those in the last three months alone. In February, the US private sector shed 697,000 jobs. This was the third consecutive month in which more than 600,000 jobs had been slashed - a sequence last recorded in 1939.

The US construction industry has cut more than 1 million jobs since January 2007, as construction work shrank at an accelerated pace following the collapse in the housing market. During this recession, the rate of unemployment in the US has nearly doubled from 4.4 percent to 8.5 percent in February this year, the highest since 1992. The US manufacturing sector has experienced three years of consecutive monthly declines in employment, losing 219,000 jobs this February alone. The number of workers out of work in the US now officially stands at 13.2 million.

In addition, the number of part-time workers in the US has risen nearly 80 percent over the last 12 months, to 8.6 million in February - the highest since records began to be kept over half a century ago. If those forced to work part-time, along with those who have given up actively searching for work but are still wanting a job (2.1 million) are included, the real unemployment rate stands at 14.8 percent.

In Germany, the largest European economy, unemployment rose from 7.6 percent last September to 8.1 percent in March this year.

In Britain, the number of people out of work stands at 2.1 million, with unemployment expected to be at 3 million by the end of this year. Presently, official unemployment stands at 6.7 percent of the workforce. In the three months to the end of February 2009, 177,000 British workers lost their jobs. Young people are especially hit by unemployment, with people under the age of 25 accounting for almost 40 percent of the total unemployed in Britain, and an unemployment rate of 15.1 percent in the 18-24 age group - more than twice that in the population generally.

The swelling of this reserve army of labour is, not unexpectedly, accompanied by a dramatic downward impact on the wages of working people, as workers have been compelled to worry about retaining their jobs rather than boosting their wages. As the recession becomes longer and deeper, this downward movement of wages will assume the proportions of a slump.

Unemployment in Spain has risen above 4 million for the first time and stands at 17.4 percent of the workforce - double the average for the EU. Half of the EU jobs lost in this crisis have been in Spain. Spaniards have been losing jobs at the rate of 9,000 a day. Alarmingly, unemployment is likely to top 20 percent and may well reach 5 million. In the past three decades, the rate of unemployment in Spain has only once been below 8 percent, and it exceeded 20 percent in the mid-1980s as well as the mid-1990s.

When the economy was growing, Spain absorbed 5 million immigrants from Latin America, North Africa and eastern Europe, providing employment to a new generation. (See ‘Spain needs to find permanent solutions to its temp problem’ by Victor Mallet, Financial Times, 30 April 2009)

Karl-Theodor zu Guttenberg, economics minister, said on 29 April that close to 1.5 million workers would lose their jobs this year and next in Germany.

In India, more than half a million jobs were lost in the Indian export sectors in the final quarter of 2008, with many more job losses expected this year. In China, a huge 20 million of the 130 million rural migrant workers have lost their jobs and returned to their home towns and villages - representing a 15.3 percent unemployment rate among migrant workers. This is in addition to the 8.86 million officially unemployed, accounting for 4.2 percent of the urban workforce - the highest unemployment rate for at least a decade.

The above figures tell us of hopes destroyed and lives blighted across the world and are a damning indictment of capitalism and the market economy.

Financial meltdown

Just as an opera is not over till the fat lady sings, likewise a capitalist recession does not end before a big banking failure. The present crisis is remarkable for the fact that it is accompanied by the near collapse of the entire banking system in the US, Britain, and a number of other countries. In the words of Chrystia Freeland, ” The global economic crisis has bankrupted centuries-old institutions, brought down once-mighty industrial brands and shattered a generation’s worth of assumptions about how capitalism ought to operate. Now is the time to declare another casualty of the crash - the imperial style of leadership. ” (’Calmer Obama ushers out the age of the imperial chief’, Financial Times, 11 April 2009)

Not only have financial giants in the US and elsewhere bitten the dust, so has US hegemony of the world capitalist economy and politics.

When, back in the summer of 2007, it became clear that the imperialist financial system was in trouble, the authoritative representatives of finance capital, as well as economic commentators, believed that the losses of the big banks from bad loans would total about $100bn - at the time considered a huge sum. However, the bad loan total has been a moving target; as the economy has continued to weaken, and confidence in the banks to crumble, more bad loans have been the result.

In its latest Global Financial Stability Report (GFSR), released on 21 April 2009, the IMF said that financial institutions across the world face losses of $4,400bn as the world recession erodes the value of their loans and other assets. For over a year, the IMF’s estimates of losses facing the financial sector have swollen with each update. Total writedowns on US assets are now estimated to reach $2,700bn (€2,082bn/£1,837bn) according to the IMF report, up from the $2,200bn it forecast in January, almost double its forecast of last October ($1,405bn), and three times the mere $945bn it forecast last April.

Including loans originating in Japan and Europe, the writedowns are now expected to reach $4,054bn. Of the $1,342bn losses facing European and Japanese institutions, $1,193bn will fall to the former and $149bn to the latter, while the writedowns on emerging market assets held by banks in the imperialist countries are forecast at $340bn - bringing the grand total to $4,394bn. Estimated writedowns on US and European assets, mainly held by financial institutions in these regions, account for 13 percent of their aggregate GDP.

Banks will bear two thirds of these losses, while the remaining one third will fall on insurance companies, pension funds, hedge funds and others.

Even with the IMF’s latest forecast of mind-boggling losses facing the financial sector, there is no certainty whatsoever as to the eventual extent of the losses - except that they keep getting worse, with the past year’s gloomy forecasts turning out to have been overly optimistic.

The crisis of overproduction, and the resultant financial crisis, are mutually reinforcing, with the losses and bankruptcies in the non-financial sector compounding the losses of the financial sector and vice versa. Conventional loans, not just toxic subprime securities (now rechristened ‘legacy assets’) account for half of the estimated writedowns. The IMF’s latest report is likely to cause further disarray among investors, even if its estimates are smaller than those of some private economists.

The IMF expects US institutions to write down $550bn in 2009-10, in addition to the $510bn they had already written down by the end of 2008, while the euro area and the UK stand to lose about $750bn and $200bn respectively, in addition to the $154bn and $110bn already respectively written down up to the end of 2008.

US banks have thus far taken approximately half of the writedowns facing them, while European banks have taken merely a fifth. Since the banks in the US and Europe have hitherto recognised less than half their losses, they will collectively have to write off $1,500bn this year and next. If the US and European banks took immediately all the writedowns facing them, the result, says the IMF, would be a complete wipeout of their equity.

Hence the importance of injecting more capital into the banks and other institutions. To restore their balance sheets to the level at which they were before the present crisis (defined by the IMF as a tangible common equity to tangible asset ratio of 4 percent), US banks require $275bn in capital infusion, euro area banks $375bn and UK banks $125bn. And bringing the banking system back to the leverage ratios of the mid-1990s (equity to assets ratio of 6 percent) would need huge recapitalisation: $500bn in the US, $725bn in the euro area and $250bn in the UK, says the IMF.

To achieve this level of recapitalisation, emphasises the IMF, governments would need to take bolder steps, such as converting preference stock into common equity and enforcing debt-to-equity swap - that is, nationalisation of the banks: ” The current inability to attract private money suggests the crisis has deepened to the point where governments need to take bolder steps and not shrink from capital injections in the form of common shares even if it means taking majority, or even complete, control of institutions.

As far as Europe is concerned, it would appear that the worst is still to come. In this regard, the large external financing requirements of the central and eastern European countries, and the exposure of the western European banks to these countries, are of particular concern.

By the end of December 2008, global banks had written off about $1,000bn (€752bn/£699bn) in bad assets, with half those written off in the US. The problem, however, is that, since the onset of the crisis, the provision of new capital has failed to keep up with the writedown of assets.

The US government has already put in place a stimulus package of $787bn (£527bn), the $700bn bank recapitalisation plan, a $70bn housing scheme and additional federal aid to car manufacturers, but, contrary to President Obama’s claims, none of these measures is showing any sign of being effective. Much larger sums than those already earmarked are needed to keep the banks from going under, let alone enabling them to start lending again.

According to Michael Pomerleano of the World Bank, if the rates of default in this crisis are similar to those of the 1982 recession, US banks will require more than $1,500bn of capital just to stay afloat, while new lending will require additional capital. These sums are far in excess of those the US Treasury is presently authorised to spend on bank rescues. With only $32bn left from the $700bn Trouble Assets Relief Program (TARP) funds, the Obama administration is bereft of funds to recapitalise bank balance sheets. It will have no option but to return to Congress with a request for yet further funds, with no guarantee that Congress would be prepared to grant such a request, as most American taxpayers detest bailing out Wall Street.

Reflecting this sentiment, Mr Obama is reported to have warned senior bankers at a private meeting that he was the only thing standing between them and the pitchforks. This being the case, his administration may be forced by politics, as much as by economics, to conclude that nationalisation of the banks is the best of all options.

Since, in the present desperate conditions, the chances of raising the vast sums needed for bank capitalisation are close to zero, it is the governments that are being forced to step in. However, the governments are struggling to keep pace with the daily deterioration in the banks’ balance sheets. So far, governments have provided up to $8,900bn in financing for banks, through lending facilities, asset purchase schemes and guarantees. But all this represents merely a third of their needs, for the IMF estimates that the ” refinancing gap of the banks - the rollover of short-term wholesale funding, plus the maturing long-term debt - will rise from $20,700bn in late 2008 to $25,600bn in late 2011, or just over 60 percent of their total assets .

This will call for a huge shrinkage of balance sheets. The balance sheets of the banks are still far too large. According to estimates by analysts of Morgan Stanley, the 15 largest banks, which have shrunk their balance sheets by a combined $3,600bn since the beginning of the crisis, will shed an additional $2,000bn in assets this year alone. And this does not even take account of the disappearance of securitised lending by the so-called ’shadow banking system’, which played such an important role in the US.

Market capitalisation of the banks

Not surprisingly, the meltdown of the financial system is reflected in the precipitous fall in the market capitalisation of the giants of finance capital in the centres of imperialism during the period between 1 March 2007 and 21 January 2009.

Citigroup, once the largest banking group, valued at $225bn at the beginning of March 2007, saw its market capitalisation dwindle to $17.2bn by the end of January this year, and presently it stands at a derisory $13.7bn. During the same period, the market capitalisation of Bank of America dropped from £225.3bn to $36.7bn; JP Morgan Chase from $170.9bn to $74.8bn; Goldman Sachs from $82.1bn to $25.4bn; HSBC from $200.5bn to $86bn (presently it stands at $78.3bn); Barclays from $91bn to $14.4bn; RBS from $120bn to $7.5bn; Lloyds TSB from $246bn to $14bn; Deutsche Bank from $67.8bn to $13.1bn; UBS from $123bn to $32.8bn; and BNP Paribas from $96.3bn to $28.2bn.

A decade ago, Banc One, Chase Manhattan, JP Morgan and Washington Mutual had a combined value of around $175bn. Today, JP Morgan Chase, which has
absorbed all these banks (as well as many others, such as Bear Stearns) is worth only $94.5bn. [2]

AIG, at one time the world’s largest insurance company, now 80 percent government-owned after suffering the largest-ever loss ($617bn) in corporate history, is worth only $1.2bn (42 cents a share) as against $131bn a year ago, when its shares sold at $46 each. AIG has operations in 130 countries and a customer base of 74 million, insuring financial products to the tune of $2tr, half of these for 12 imperialist banks. Doubtless it was considered too big to fail.

No recovery in sight

According to the latest IMF estimates, the fiscal costs of the government’s rescue efforts will, at the high end, amount to 13 percent of US GDP over the next five years, while the cost to the UK will be 9 percent of GDP over the same period. The efforts to stabilise the financial system could end up costing us taxpayers $6,200 (€4,650/£4,200) per head of population.

Most of the giant financial institutions in the centres of imperialism, especially in the US and Britain, are bankrupt and entirely reliant on the direct or indirect, explicit or implicit, support of governments and central banks for securing financing hitherto provided by institutional investors. A major financial crisis or a deep economic recession on their own would be bad news for capitalism, but the present crisis, characterised as it is by the potent mix of an unprecedented global economic slump with a financial meltdown emanating from the major imperialist countries that constitute the core of the world capitalist economy, is nothing short of catastrophic. It is the harbinger of a deep recession lasting many years followed by a mild recovery at some time in the future.

For the moment, the governments in the imperialist countries have stepped in to bail out the bankers with taxpayers’ money in an effort to restore the financial system, gasping for breath, to health (to resuscitate back to life would be a more apposite expression). But this will by no means prove sufficient for a return to sturdy economic health. Those who, like Chancellor Alistair Darling, are predicting a return to robust growth in the near future are deluding themselves.

In the US, with the deepening of the crisis of overproduction, $50,000bn of perceived wealth in the US (stocks and real estate) has declined to below $30,000bn, leaving the original $25,000bn of private debt stranded. With brutal speed, Americans have been forced to learn that they are not so rich after all. Although the Japanese had to adjust to a loss in perceived wealth of three times Japan’s GDP, all the same the US adjustment, amounting to 1.5 times US GDP, is still by far greater than any in US history. Even the crash of 1929 forced the US to write down only 75 percent of a year’s GDP. (See ‘Rebalancing the books’ by Jeremy Grantham, Financial Times, 11 March 2009)

On 11 March this year, in a Financial Times article entitled ‘If this is the Great Depression we are now in 1938′, John Kay said that, by 1933, US equities had lost three quarters of their 1929 value and the US monetary system reached the point of collapse - a trend only ameliorated by
the onset of the war. “Perhaps the clearest lesson,” remarked Mr Kay ominously, ” is that war is good for output, employment and corporate profits. Yes indeed! For imperialism, war, far from being an aberration, is normal business.

Drawing historical parallels with the 1929 crash, Mr Kay stated that, presently, the world economy is not at the beginning of the crisis but several years into it: the ” analogue of the 1929 Wall Street Crash is not the 2007 credit crunch but the busting of the New Economy bubble in 2000 … The follies of the 1990s resembled those of the 1920s … The underlying structural weaknesses of the world economy - the US budget deficits and trade deficits financed by Asian surplus - re-emerged in 2000 after being disguised by the imaginary wealth of the New Economy.”

All that the expansionary measures taken by the Federal Reserve and other central banks had done was create a wide boom in asset prices, extend credit to ever more unsustainable levels and help further the growth of the basically flawed financial infrastructure on which the 1990s boom had rested.

The last short-lived period of recovery (2003 to June 2007) did nothing, and could do nothing, to solve the fundamental problem of overproduction inherent to capitalism. It merely managed to prepare the ground for a far worse, far more powerful and more enduring crisis than the last one.

The US economy shrank in the fourth quarter of last year at its fastest rate since 1982, with GDP contracting at an annualised rate of 6.3 percent. In the first quarter of 2009, it shrank at an annualised rate of 6.1 percent. In the same quarter, corporate profits were down by 15.6 percent, or $250bn, from the third quarter. According to the IMF, the US economy is forecast to decline by 4 percent during 2009.

US house prices have declined by more than 25 percent (in California by 40 percent) from their peak, with huge numbers of people, saddled with mortgages worth more than their houses, facing foreclosures that appear in self-reinforcing spirals, as repossessed homes sold on the cheap further push down the value of other properties. The US scenario finds its equivalent in Britain and a number of other countries. In Britain, house prices have declined by 18 percent.

Risk dispersion or disaster in waiting

As a result of tumbling assets prices, millions of households are groaning under the burden of unbearable and unrepayable debt, while the financial system, the brain of imperialist economy, encumbered with losses of colossal proportions, is in a state of meltdown and has ceased to function.

What is more, the pillars of faith on which the new financial capitalism was built have crumbled like a house of cards, revealing it to have been nothing but a bubble emanating from the speculative frenzy that arose from the lack of profitable opportunities for investment in the productive sphere.

All those new devices, invented by statistical geeks so that the high rollers of finance capital could make a fast buck, which were supposed, and believed until the summer of 2007 by the bankers, investors and regulators alike, to disperse credit risk, make the world safer and the financial system more robust and resilient, have turned out to be so many toxicants that have contributed to the near-collapse of the financial architecture of monopoly capitalism.

Gillian Tett, writing in the Financial Times of 10 March 2009, described this allegedly risk-free process thus: “Bankers … repackaged loans for sale to outside investors, garnering fees “at almost every stage of the ’slicing and dicing’ chain.” As banks shed credit risk, ” regulators permitted them to make more loans - enabling more credit to be pumped into the economy, creating even more fees“. By turning their mortgages into bonds, banks were able to meet regulatory guidelines in a more ‘efficient’ way.

This was portrayed by the financiers as a step towards “a superior form of free-market capitalism“. These obscure instruments, with their “alphabet soup of abbreviations“, which were as baffling as the products the acronyms represented, produced “in 2006 and early 2007 no less than $450bn worth of ‘CDOs of ABS’ securities“. [3]

Ms Tett added: ”
Instead of being traded, most were sold to the banks’ off-balance-sheet entities such as SIVs [4] - or simply left on the books

, thus “making a mockery of the idea that innovation helped to disperse credit risk, and creating ” an opaque world in which risk was being concentrated” in ways hardly anybody understood. (’Lost through destructive creation’)

The narrative that the new-fangled financial innovations, with their slicing and dicing, served to spread risk around the world to those best able to bear it was promoted by the banks with great assiduity and eagerly accepted by the governments, central banks, regulators and rating agencies. In its (April) 2006 annual report, the IMF made the bold assertion that: ” the dispersion of credit risk by banks to a broader and more diverse set of investors … has helped to make the banking and overall financial system more resilient … improved resilience may be seen in fewer bank failures “.

This foolish assertion has come to haunt the IMF as it bears witness to the catastrophic collapse of the entire financial system of imperialism.

Far from being instruments of risk dispersion, these abstruse devices proved to be lethal explosives. Sliced and diced, insured by monoclines, highly marked by rating agencies, hidden away in SIVs, they were presented as being as safe as houses. “As indeed they were“, to quote the words of Howard Davies, director of the London School of Economics, ” except that the houses concerned were falling sharply in value, and their over-geared occupants were non-status borrowers. Many of the investors, including titans such as Merrill, Citi and UBS, had not understood the risks and lost their shirts (and red braces too). ” (’The architects of financial crisis, a review of Gillian Tett’s book Fool’s Gold‘, Financial Times, 25 April 2009)

By July 2007, as defaults on US subprime mortgages began to pile up, blind faith in the latest products of speculative capitalism began to unravel. Being forced to admit that their models were seriously flawed, rating agencies such as S&P downgraded ratings for mortgage-linked financial instruments, causing shockwaves that led investors (such as money market funds) to stop buying notes issued by shady entities such as SIVs.

As the realisation dawned that the banks were heavily exposed to these shadowy vehicles, panic gripped the robber barons of finance capital. With the rise in subprime defaults, the banks were obliged by their accountants to revalue their instruments. By the spring of 2008, Citigroup, Merrill and UBS had collectively written down $53bn, a horrifying two thirds of which came from the allegedly triple A-rated CDOs, which were, by early 2008, deemed to be worth no more than half of their face value.

Banks attempted to fill the gap by raising new capital in excess of $200bn, but the hole kept getting deeper. As it did so, trust in the ability of regulating authorities to monitor the banks, as well as faith in the banks themselves, collapsed. With the supposedly risk-free new models having been exposed as chimerical, investors walked away from every type of complex financial instrument.

On top of all this came the mother of all shocks last September - the bankruptcy of Lehman Brothers. Hitherto, it had been an article of faith with investors that the US would never allow a large financial institution to go to the wall. But when the US government did nothing to prevent Lehman going bankrupt, it caused distrust, disorientation and terror. Funding markets seized up. Banks and fund managers found to their horror that all their trading and hedging models had crumbled. The capital markets stopped functioning.

Money, the means of circulation“, had become, just as Engels had explained, “a hindrance to circulation“, and all ” the laws of production and circulation … turned upside down” in a dramatic demonstration of the rebellion of the mode of production against the mode of exchange. No wonder, then, that Mervyn King, governor of the Bank of England, was forced to say that the system was “on the precipice”.

By the beginning of this year, the writedowns of the big western banks were running at $1,000bn (€795bn/£725bn), according to the Institute for International Finance. On 9 March, the Asian Development Bank estimated that global financial assets could now have lost more than $50,000bn - the equivalent of a year’s global output.

Part-nationalisation of banks

The present crisis, unprecedented in its depth, scale and devastating effects, has delivered shattering blows to the economic orthodoxies practised during the last three decades in all the imperialist countries and, through the IMF, the World Bank and the WTO, forced on practically all the rest of the world.

Governments have been forced to step in to replace many market functions. Long-held beliefs in such things as prudence and balanced budgets have made way for huge deficits and the pumping of colossal amounts of money into a terminally-ill financial system through quantitative easing (a modern buzz word for printing money), which might even have horrified Keynes. Gone, too, is Europe’s stability and growth pact, which prohibited members of the eurozone from incurring deficits in excess of 3 percent of the national income and national debt above 60 percent of GDP. Huge amounts of public funds are being deployed to purchase and insure billions of dollars’ worth of toxic assets held by the major imperialist banks.

Governments, in particular the US and British, have been compelled to acquire huge stakes in some of the largest banks. The US government, just like the British government, has been transformed into a huge investment bank, robbing the state treasury and the taxpayers to transfer huge funds into private banks. The US government has injected $52bn into Citigroup, $45bn into Bank of America, $25bn into JP Morgan Chase, and $10bn into Goldman Sachs. On top of this, it has taken over the world’s largest insurance company, AIG.

The French government has a stake of $3.9bn in BNP Paribas, while the Swiss government’s stake in UBS is to the tune of $5.3bn.

On 10 February, the US Senate passed a $838bn stimulus package, accounting for 5.9 percent of GDP. Action taken by the German government so far to boost demand is the equivalent of 4.7 percent of German GDP over two years ($130.4bn). Japan has put in place a stimulus package of $104.4bn (2.2 percent of GDP); the UK $40.8bn (1.5 percent); and France $20.5bn (0.7 percent).

Germany has a €500bn ($660bn) bank reserve fund, known as Soffin, to support banks with a mix of guarantees and fresh capital. Of this sum, €210bn has already been tapped by banks. Another scheme, agreed on 21 April 2009 at a meeting between Angela Merkel (the German Chancellor), her Finance Minister, Frank-Walter Steinmeier, and the president of the Bundesbank, Axel Weber, is in the offing to enable German banks to offload toxic assets, which could leave German taxpayers with a bill of up to €1,000bn. German banks have already written down $72bn on their balance sheets.

Monetary loosening and fiscal expansion

All the imperialist countries, and some others, have undertaken monetary loosening and record-breaking fiscal expansions. A year ago, the Federal Reserve started to prime the monetary pump, which is now in full swing. Within a year, it has moved from 3 percent interest rates to quantitative easing.

The Bank of England has pushed through interest-rate cuts of 450 basis points in the last six months and the interest rate stands at an unprecedented 0.5 percent today. The European Central Bank’s interest rate has been brought down to 1 percent.

The Bank of England’s quantitative easing exercise (commenced on 5 March 2009) involves initially the creation of £75bn of new money in an effort to get the economy moving. The idea is to use this amount (representing 5 percent of Britain’s GDP) to purchase assets, especially government bonds, from banks and other financial institutions, in the hope that the sellers of these assets might use the funds thus made available to invest or lend to
households and businesses. If this initial sum proves insufficient, a further £75bn will be provided. [5]

This measure is a last desperate throw of the dice by the authorities and is fraught with dire consequences - not least on the inflation front. All in all, things are not looking too good in the centre of British usury - the City of London - and for the British ruling class, with its heavy reliance on banking and financial services for its profitability.

The resort to this unconventional measure, quantitative easing, came in the aftermath of the near-collapse of several of Britain’s banks in 2008, the exhaustion of monetary policy as a tool of economic management, and the part-nationalisation of the Royal Bank of Scotland and Lloyds TSB Banking Group, whose toxic assets, to the tune of £585bn, have been insured by the government.

Budget deficits and national debts

Consequent upon the recession, and the thousands of billions of dollars spent by governments in the centres of imperialism to douse the financial conflagration that threatened to bring the leading capitalist economies, especially the US and British, to their knees, all these countries are headed for huge rises in budget deficits and national debt.

The US budget deficit for 2009 stands and the frighteningly high figure of $1,750bn - a staggering 12 percent of GDP, while its national debt is forecast to rise from 66 percent at present ($10bn) to 97 percent of GDP in 2012.

The combined budget deficit of the eurozone’s four biggest countries - Germany, France, Italy and Spain - will reach 6.4 percent of their GDP in 2010. Their public debt is forecast to reach 83 percent of GDP from 79 percent this year - all this beyond the limits agreed in the 1990s to guarantee eurozone stability. Greece, Portugal and Ireland are in an even worse condition than that. The eurozone’s collective budget deficit will rise to 5.7 percent of GDP this year and 7.1 percent in 2010. Its collective public debt is expected to reach 75.7 percent of GDP this year and 81.4 percent in 2010.

Japan’s national debt, already very high, will this year be 224 percent of Japanese national output.

Britain’s position is worse than that of all the other imperialist countries, with the possible exception of the US. The British government is set to borrow as much in the next two years as the total borrowing Labour inherited on coming to office in 1997, that is, £348bn - dating back to 1691 (£41bn from 1691 to 1974 and £307bn from 1975 to 1997).

Presenting his budget to the House of Commons on Wednesday 22 April, Chancellor Alistair Darling said that net public borrowing this year will rise to a postwar high of £175bn - 12.4 percent of GDP - before dropping to £173bn next year (11.9 percent of GDP) and £140bn the year after that. The government will contract £700bn of new debt over the coming five years.

As a result, Britain’s debt is on course to smash the £1tr barrier for the first time. Presently, the national debt stands at £717bn (49 percent of GDP). It is set to rise to 59 percent this year, 68 percent next year and 74 percent of GDP the year after (last year, Britain’s GDP was £1.4tr). Although by no means a record, as Britain’s debt was more than 200 percent after the Napoleonic wars, hit 250 percent of income during the second world war, and still stood at 100 percent as late as 1963, it will still be the highest peacetime debt level. The fiscal gap will be larger still if the recession is deeper and longer than envisaged by the present forecasts of the Bank of England and the Chancellor, both of which are optimistic to the point of fantasy.

At the present level of low interest rates, the Treasury can continue to service the huge sums it has borrowed. The risk, however, is that if interest rates move upwards, the government will have to make drastic cuts in its spending or raise taxes, or both. Failing that, the moneylenders will vote with their feet and refuse to buy government securities.

In an editorial on 18 April, entitled ‘Labour pains’, the Financial Times gave this warning: ” The UK is not as rich as it thought it was just a few months ago. It needs to change course. Its golden goose - the financial sector - has been plucked. Public services must be pruned while the tax burden will certainly rise. This will entail painful trade-offs.

Two days later, the Financial Times stated that this crisis would “cost as much as a big war” and that ” while not unprecedented, such debt would leave the country dangerously vulnerable to a loss of confidence [ie, no one will lend it money].” (Editorial, ‘The folly of hoping for the fiscal best’, 20 April 2009)

It added that “Fiscal austerities will be the dominant feature of UK politics for a decade.

In view of the underlying weakness of the UK’s public finances, consequent upon the costs of the recession and the billions doled out in bank rescue packages, economic experts are all agreed that it will take two full parliaments of increasing austerity to get borrowing back under control. The Treasury’s own assessment is that four fifths of the borrowing this year and next will be ’structural’ - that is, impervious to economic recovery.

The chancellor has already announced cuts in capital spending, cuts in other government spending and tax increases to the tune of 1.6 percent of GDP. Whichever government is in office after next year’s election will need to find an additional £45bn a year in today’s money by the end of its parliament to get rid of this deficit.

Even if the authorities somehow manage to avoid a sterling collapse and complete meltdown, the end of the recession will bring in no new dawn, for the overhang of debt is only too likely to result in lower growth, unremittingly higher unemployment, lower house prices and stock-market valuations, savage cuts in public expenditure, higher taxes, higher costs of borrowing, declining living standards, and the destruction of the prosperity of the middle and better-off sections of the working class. Fewer and fewer resources will be available for education and health, while child poverty, homelessness and destitution will spread their tentacles further into the lives of working people.

What is true of Britain is equally true of the US and other leading capitalist countries.

Public anger

The current slump has dealt a devastating blow to market fundamentalism and brought into the open the reason for the political acquiescence of the stagnant middle class. Cheap credit allowed families to consume in excess of their income, as home-equity loans, vendor-financed car deals and credit car purchases served to hide the reality of falling real incomes. Now, the meltdown of the imperialist financial system, the deepening recession,
collapsing equity and house prices, falling employment, have combined to rudely awaken middle America from the dream that ” it too was partaking in the prosperity of the Second Gilded Age“.

As a result, according to Chrystia Freeland of the Financial Times, ” class and redistribution issues are no longer dirty words in American politics“. Ms Freeland goes on to record the visible and rising public anger towards Wall Street as the recession bites deeper, with “late night comedians … calling for public executions” of bankers. This public anger has overnight, as it were, “transformed the Masters of the Universe from heroes to villains. (’The audacity of help’, 12 March 2009)

In the US, it was an article of faith that people were free to succeed or fail, without any assistance. Now, however, in the name of preventing a systemic failure, hundreds of billions of dollars have been injected into failed institutions that made gargantuan profits while the going was good, and which exacerbated the crisis of overproduction with their speculative frenzy.

Since its eruption in the summer of 2007, the crisis has spread from the suburbs of the US to Europe and beyond, presaging a turbulent period of instability which could pose a serious threat to the very existence of the EU, as its member countries resort to nationalism and protectionism in an effort to ward off the devastating effects of the crisis at the cost of fellow members.

Rising unemployment, falls in house prices and in the value of pensions, and pay curbs on the workers, combined with bailouts for the banks costing taxpayers trillions of dollars, are causing seething anger among the masses - who are told that there is no money left to keep them in their jobs and houses. This anger was clearly evident in France, where, in March, a million workers staged western Europe’s biggest protests since the start of the crisis.

Governments have fallen in Iceland and Latvia. Greece, Ireland, France, Germany, Britain, Ukraine, Bulgaria and Lithuania have witnessed strikes and protests. The effects of the crisis have been felt even in far-flung outposts of the continent: the French Caribbean island of Guadeloupe saw violent strikes, while Russia flew riot police into icebound Vladivostock to suppress street protests.

Respectable bourgeois economists and commentators are openly critical of the US treasury’s bailouts, which amount to a huge transfer of wealth from US
taxpayers to the Wall Street bankers. Jeffrey Sachs has called them “a thinly-veiled attempt to transfer hundreds of billions of dollars to the commercial banks. The Obama plan to bail out banks ” amounts to robbery of the American people, said Joseph Stilgitz. Robert Reich, Labour Secretary in the Clinton administration, said that Tim Geithner, the US Treasury Secretary, is “a prisoner of Wall Street“, while Paul Krugman has complained that the US government is giving “cash for trash.

Martin Wolf, writing two days after the US treasury secretary came up with his latest racket - the so-called Public-Private Investment Program (PPIP) - to enable banks to rid themselves of their toxic assets,[6] correctly called it
the ‘Vulture fund relief scheme’, saying said that the scheme was unlikely to work. If, however, it were to work, “a number of fund managers are going to make vast returns, convincing “ordinary Americans that their government is a racket run for the benefit of Wall Street. This, he said, would make it difficult to get US Congress to sanction additional funds for the badly needed recapitalisation of the banks, because the provision of public money to the banks was “unacceptable to an increasingly outraged public“.

The conclusion, alas, is depressing. Nobody can be confident that the US yet has a workable solution to its banking disaster”, stated Mr Wolf, adding: ” On the contrary, with the public enraged, Congress on the war-path, the president timid and a policy that depends on the government’s ability to pour public funds into undercapitalised institutions, the US is at an impasse. ” He concluded that if the US’s ability to find its way through this crisis “is not frightening, I do not know what it is. (’Why a successful US bank rescue is still far away’, Financial Times, 25 March 2009)

Effect on eastern Europe and on Africa

The Washington-based Institute for International Finance has forecasted a steep decline in net private capital flows to emerging countries - from $929bn in 2007 and $466bn in 2008 to a mere $165bn this year, equal to 6 percent of these countries’ GDP - and much worse than the decrease of 3.5 percent that took place during the Asian crisis of 1997-8, with its horrendous social and economic consequences in that region.

$1,440bn-worth of debts of the less developed countries are due in 2009. Central and eastern Europe, owing $1,656bn, principally to western European banks, will experience a GDP decline for the first time in 10 years. Without an injection of international funds, several of these countries could be heading for sovereign defaults.

According to the IMF, central and eastern European countries (excluding Russia, but including Turkey) must roll over $413bn (€311bn/£281bn) in maturing external debt this year and finance $85bn in current account deficits. In the best possible scenario, the region’s financing gap - the money that cannot be accessed through the market - could be $123bn in 2009 and $63bn in 2010 -$186bn in total.

In addition, the region’s banks, largely owned by western European banks, could be sitting on non-performing loans to the tune of 20 percent of total loans. West European parent banks, with a regional exposure totalling $1,600bn, could face losses of $160bn. They might be in need of $100bn in new capital - even $300bn if the crisis deepens further, as is only too likely. Austria, having lent a total of $300bn (£210bn/€235bn) to clients in the region, has an exposure equal to 68 percent of GDP. If Bank Austria, owned by Italy’s Unicredit, is included, Austria’s exposure would rise to 100 percent - the highest of any western European country.

An economic collapse in eastern Europe, which is not that far-fetched a possibility, could bankrupt Austria’s banks and oblige the government to undertake a prohibitively costly bailout. On top of badly mauling hundreds of industrial groups, retail businesses and service companies, ie, those that rely on investment in, and trade with, the region, such a collapse could conceivably bankrupt Austria in the same way as Iceland has been bankrupted. As one bourgeois commentator put it, the governments in eastern Europe at least got one thing right, namely, they made sure their banks were owned by foreigners. If Hungarian households default, it is not Hungary that will go down, but Austria.

What is more, to the horror of imperialism, which not so long ago celebrated the triumph of counter-revolution in central and eastern Europe and the absorption of many of these countries into the warmongering neo-Nazi Nato or the imperialist EU bloc, the stability of this entire region hangs in the balance. Consequent upon the present economic crash, with the resultant rise in unemployment, poverty and debt, there is mounting anger, which is fuelling popular movements with unpredictable consequences. Counter-revolutionary semi-fascistic regimes in the region are increasingly becoming targets of the wrath of the popular masses, who feel duped and betrayed.

At the end of January, Latvia’s government collapsed over its IMF-mandated austerity programme, after pitched battles in the streets of Riga between angry demonstrators and the police. The fear of imperialism and its ideological representatives is that a prolonged crisis could end up totally undermining support for capitalism, the EU and Nato in these countries. Martin Wolf expressed well-founded fears that the crisis would ” undermine confidence in local and global élites, in the market, and even in the possibility of material progress … with potentially devastating social and political consequences “. (’Seeds of its own destruction, Financial Times, 9 March 2007)

Meanwhile, according to UN Educational, Scientific and Cultural Organisation’s (Unesco) forecasts, 390 million of the poorest people in Africa are likely to experience a 20 percent decline in their existing meagre incomes. Declining commodity prices and reduced flow of investments will see to it that sub-Saharan Africa loses $18bn ($46 per person), causing starvation on a large scale.

On 6 May 2009, the UN’s Food and Agriculture Organisation (FAO) revealed that the present crisis will add an additional 100 million to the 900 million people already suffering from hunger, adding that there have never been so many hungry people around the world - and this despite the fact that, over the past year, food prices have come down considerably. With so much surplus food lying in warehouses around the world, there could be no greater indictment of this criminal system, which we are repeatedly told by the defenders of capitalism is the final destination of humanity.

In the run up to the G-20 summit of 2 April this year, the World Bank issued a warning that an avalanche of social and political unrest could be unleashed in the poorest regions of the globe if the leaders at the summit failed to come up with a plan to aid them. There was not much chance of that happening, as the major powers were more concerned with protecting their respective national interests at the expense of everyone else.

The summit merely managed to expose the divide between the US and Europe. While the former advocated yet another large, coordinated stimulus package to boost demand as a way out of the recession, France and Germany, fearing potentially damaging budget deficits with inflationary effects, called for greater regulation of banks, restrictions on executive bonuses and the banning of tax havens.

While talking of free trade and open markets, the principal imperialist powers are resorting to measures of protectionism at an increasing tempo, especially since October 2008.

No wonder, then, that Mr Wolf, drawing parallels with the Great Depression of the 20s and 30s of the last century, should be worried about this crisis undermining free trade, reversing the whole process of globalisation, strengthening the role of government and the credibility of socialism and
communism. No wonder, then, that he should make veiled references to the crisis unleashing civil wars and wars between countries. ” Frightened people, he says, “become tribal: dividing lines open within and between societies.” (Ibid)

As for Britain, its banks have written off only a third of the losses they will eventually face, and they will be compelled to raise at least $125bn (£85bn) in extra capital to rebuild their balance sheets. Although UK banks have already written off $110bn on complex debt securities and other assets on their balance sheets, the IMF estimates that they have another $200bn in losses over the next two years as more loans to companies and consumers go sour.

The government then faces the long-term task of clawing back the scores of billions of pounds that the exchequer has been compelled to dole out to save the rickety banking system from complete collapse - either through spending cuts, or increased taxes, or both.

By 2017/18, the fiscal impact of the crisis will have cost each UK family approximately £2,840, mostly through lost public services and tax increases. Not just the poorest sections of the population, but also the middle class and the better-off sections of the working class are bound to be badly hit. While bringing misery to vast numbers, the crisis presents an opportunity for forging an alliance between the poor and sections of the petty bourgeoisie facing, for them, the dreadful prospect of being thrust into the ranks of the proletariat. The authorities are deeply worried that people rendered homeless and jobless by the crisis might turn to violent protest.

Not for decades has there been such an opportunity to build a truly proletarian, anti-imperialist, revolutionary movement to give direction to the all-too-likely spontaneous movement of the masses against the ravages of capitalism. The time is ripe, for the combination of an unprecedented crisis of overproduction and a near-collapse of the financial system of imperialism have weakened the legitimacy of the market - especially of the Anglo-Saxon variety, with its emphasis on shareholder value.

By contrast, the credibility of Marxism - of socialism and communism - is on the rise. Bourgeois commentators, such as Martin Wolf of theFinancial Times, take comfort in the fact that “unlike in the 1930s, no credible alternative to the market economy exists“. ( Ibid)

Of course, it is too much to expect that people of Mr Wolf’s ilk would understand the movement of history dialectically and grasp that ” in developments of such magnitude twenty years are no more than a day - though later on days may come again in which twenty years are comprised “. (Letter to F Engels from K Marx, 9 April 1863)

Yes, the loss of the Soviet Union and eastern European socialist countries was a tremendous blow to the proletarian and national-liberation movements. Yes, the two decades since then have been a period of unprecedented reaction and stagnation in the working-class movement. But it requires an incurable reactionary to take this period of reaction and stagnation as a guide to the future. We are once again on the threshold of a period in which 20 years may well be embodied in days - provided the revolutionary parties get their act together and work systematically to prepare the working class for the coming conflicts.

Political and ideological representatives of imperialism blame the present crisis on naked greed, excessively lax regulation, loose monetary policy, fraudulent borrowing, high levels of leverage, animal spirits, and managerial failures, the implication being that with better regulation etc, there would be no capitalist crisis.

Nothing could be further from the truth. The truth is that these crises are systemic to capitalism - they recur because of the contradiction inherent to capitalism, namely, the contradiction “between socialised production and capitalist appropriation. It is this contradiction that, during the crises, “ends in a violent explosion“. These are, in other words, crises of overproduction, which capitalism is powerless to prevent.

There is but one cure for these crises - for society to take over the productive forces and use them to organise production on a definite plan to serve the needs of the community.

In the words of Engels: “the solution [to the constant recurrence of economic crises] can only consist in the practical recognition of the social nature of the modern forces of production, and therefore in the harmonising of the modes of production, appropriation, and exchange with the socialised character of the means of production. And this can only come about by society openly and directly taking possession of the productive forces which have outgrown all control except that of society as a whole. The social character of the means of production and of the products today reacts against the producers, periodically disrupts all production and exchange, acts only like a law of Nature working blindly, forcibly, destructively. But with the taking over by society of the productive forces, the social character of the means of production and of the products will be utilised by the producers with a perfect understanding of its nature, and instead of being a source of disturbance and periodical collapse, will become the most powerful lever of production itself. (Anti-Dühring, pp382-3)

In other words, the crises of capitalism can only be got rid of through the proletariat seizing state power, transforming the socialised means of production into public property, and organising production “upon a predetermined plan” for the benefit of society as a whole.

To accomplish this act of universal emancipation is the historical mission of the proletariat,” said Engels, adding: ” To thoroughly comprehend the historical conditions and thus the very nature of this act, to impart to the now oppressed proletarian class a full knowledge of the conditions and meaning of the momentous act it is called upon to accomplish - this is the task of the theoretical expression of the proletarian movement, scientific socialism.” (Ibid, p391)

Our tasks

In the light of the above, the tasks of any party claiming to represent the interests of the proletariat are as follows:

If it is going to succeed at the appropriate time in fighting for the interests of the working class, the following basic understandings must be made to permeate the working-class movement:

1. That capitalism is a transitional stage in the long march of humanity from primitive communism to the higher stage of socialism - communism.

2. That capitalism long ago became a historically outmoded system, owing to the conflict between the productive forces (which are social) and the relations of production (private appropriation); this basic conflict lies at the heart of the recurrent crises of overproduction and the resultant misery of the working class.

3. That under the conditions of monopoly capitalism, capitalism has grown into a monstrous system of domination and exploitation by a handful of monopolist concerns within each of the imperialist countries and on a world scale by a tiny group of imperialist countries, which exploit, dominate and oppress the overwhelming majority of humanity inhabiting the vast continents of Asia, Africa and Latin America.

4. That, for reasons of the conditions peculiar to this stage of capitalism, imperialism cannot but result in incessant warfare waged by imperialist countries against the oppressed peoples (for instance, the current predatory war of Anglo-American imperialism against the people of Iraq) and inter-imperialist wars, which have claimed the lives of 100 million people during the 20th century.

5. That socialism alone offers the way out of the contradictions of capitalism; it alone is able to offer humanity a world without the crises of overproduction, without unemployment, poverty and wars. Socialism alone is able to provide the conditions for a limitless increase in production, unending prosperity, fraternal cooperation and peace among peoples and nations.

6. That capitalism itself creates the power, namely, the proletariat, which alone is capable of putting an end to the anarchy of production and all other horrors of the capitalist system of production, for ” of all classes that stand face to face with the bourgeoisie today, the proletariat alone is a really revolutionary class. The other classes decay and finally disappear in the face of modern industry, the proletariat is its special and essential product.

7. That the struggle of the proletariat for the overthrow of capitalism must be led by a vanguard revolutionary party of the proletariat.

8. That the state is nothing but an instrument in the hands of one class for the suppression of another class; that the proletariat too needs a state of its own; that the struggle of the proletariat for socialism must lead to the establishment of the dictatorship of the proletariat, which lasts for a whole historical period, and is the instrument of the proletariat for suppressing any attempts of the bourgeoisie at the restoration of capitalism, on the one hand, and for creating the material and social conditions for the transition to the next, the higher, stage of communism, in which the state
withers away and society is able to move from the formula “From each according to his ability, to each according to his work” to ” From each according to his ability, to each according to his needs“. (K Marx and F Engels, The Communist Manifesto)

9. In the words of Lenin, ” If we translate the Latin, scientific historical-philosophical term ‘dictatorship of the proletariat’ into more simple language, it means the following: only a definite class, namely that of the urban workers and industrial workers in general, is able to lead the whole mass of the toilers and exploited in the struggle for the overthrow, in the struggle to maintain and consolidate the victory, in the work of creating the new socialist system, in the whole struggle for the complete abolition of classes. (V I Lenin, ‘A great beginning’, June 1919)

10. That commodity production and socialism are incompatible and it is the function of socialism to eliminate commodity production and the market and make way for planned production, which, instead of being regulated by profit, is guided by the principle of the maximum satisfaction of the constantly rising material and spiritual needs of the people.

11. That all bourgeois prejudices against the Soviet Union of the period of J V Stalin’s leadership must be dropped. During that time, the Soviet Union made earthshaking achievements in every field - from socialist construction, through collectivisation, to victory in the anti-fascist war - of which the proletarians and oppressed peoples of the world have every right and duty to be proud. Negating that important period in the history of the international working-class movement has only served to negate the most glorious achievements of the working class to date, to defame the dictatorship of the proletariat and the international communist movement and to sully the banner of Marxism Leninism. Our movement must understand that anti-Stalinism always was, and is now, a cover for attacking Marxism Leninism in general, and the dictatorship of the proletariat in particular, the purpose being ” to kill in the working class the faith in its own strength, faith in the possibility and inevitability of its victory, and thus to perpetuate capitalist slavery “. (J V Stalin, Report to the 18th Congress of the Communist Party of the Soviet Union, 1938)

12. That the guard and fight against all forms of opportunism - social democracy, Trotskyism and revisionism - must never lessen, for “the fight against imperialism is a sham and humbug unless it is inseparably bound up with the fight against opportunism“. (V I Lenin, Imperialism - the Highest Stage of Capitalism)

13. That in its struggle for power, the proletariat in the centres of imperialism must wholeheartedly support the national liberation struggles of the oppressed peoples against imperialism, for the ” revolutionary movement in the advanced countries would actually be a sheer fraud if, in their struggle against capital, the workers of Europe and America were not closely and completely united with hundreds upon hundreds of millions of ‘colonial’ slaves who are oppressed by capital “. (’The Second Congress of the Communist International’ by V I Lenin, 1920)

[1] Synchronicity: the simultaneous occurrence of events with no discernible causal connection.

[2] In the last few weeks, there has been an upward movement in the price of shares of some of these banks. However, in view of their continuing volatility, we have decided not to change these figures.

[3] Collateral Debt Obligations of Asset Based Securities.

[4] Structured Investment Vehicles.

[5] In fact, on 7 May 2009, the Bank of England announced that it was pumping an additional £50bn into the economy through quantitative easing.

[6] Toxic assets are now rechristened ‘legacy assets’ - a polite expression for a “pile of poop” of around $1,000bn sitting on the banks’ balance sheets masquerading as an ‘asset’, as Steve Palmer writing in FRFI of April 2009, wittily and correctly characterised them.

Communism and the youth

A presentation to the International Communist Seminar delivered by Ranjeet Brar, on behalf of the CPGB-ML, Brussels, 17 May 2009.

Men make their own history, but they do not make it just as they please; they do not make it under circumstances chosen by themselves, but under given circumstances directly encountered and inherited from the past. The tradition of all the generations of the dead weighs like a nightmare on the brain of the living.[i]

Historical context

We are born, not onto the world of our choosing, but into that bequeathed us by humanity’s collective history. And at the turn of the 21st century, that means a world mired in all the contradictions of capitalist imperialism; that is, monopoly capitalism at its highest stage – highest, meaning final, and speaking economically.

It would be equally true to say that mankind, despite all advances in technology and the possibilities they offer, has never been brought so low. Lenin was absolutely correct when he characterised finance capitalism as decadent, parasitic and moribund.

In fact, Lenin’s profound analysis of monopoly capitalism, written in 1916, during the first ‘great’ inter-imperialist conflagration, remains entirely accurate in all its principal features. It is, sadly, as fresh and redolent of today’s society as on the day it was published, and must be read and assimilated by all class-conscious workers.

The working-class movement, then, is addressing precisely the same problems as were identified a century ago. In the tumultuous intervening period, our movement has seen stunning advances and painful defeats, but the root causes that brought the working classes of all nations face to face with the question of proletarian revolution, far from ending with the Soviet counter-revolution, have become broader and more profound.

We are living in the era of the proletarian revolution, and our task is to expedite the transition.

If we are to bring the youth to communism, we must first have an idea of communism to bring to the youth. And in this regard, the theses recently adopted by the KKE at its 18th party congress are to be welcomed.[ii]

2009 is fast becoming a year synonymous with capitalist economic crisis on a scale not seen since the Wall Street crash of 1929. Giants of finance capital have collapsed, and in Britain (as in the US and many European countries), our ‘Labour’ government has responded by giving banks hundreds of billions of taxpayers’ money: robbing the poor to pay the rich.

Workers’ outrage is mounting, as shown by recent demonstrations against the G20, and by increasingly militant industrial and political actions (notably, in Europe, in Greece and France). And it is fully justified, but, in truth, not yet broad enough in its scope, for these are but exaggerations of the daily actions and normal workings of capitalism, whose entire system of wage slavery rests on the perpetual looting of the wealth created by the labouring masses.

It is abundantly clear that, as long as capitalism endures, the money borrowed by our governments today will be paid back tomorrow by means of cuts in public spending – workers’ schooling, housing, and health care will pay the bankers’ bill. Truly, their wealth is built upon our poverty, their joy upon our misery! We must insist that bankers pay for their own crisis.

Attitude of the youth

The average youth that one encounters on the street may not yet want communism, but the truth is that he is in desperate need of it. For the youth, as indeed all humanity, are beset on all sides by the problems and contradictions of capitalist economy and society in crisis. Its realities impinge upon them and limit their prospects, regardless of their consciousness of the fact.

As capitalist society becomes ever more historically outmoded, a germ of consciousness grows; the awareness that something is profoundly amiss, and needs change. It is felt keenly by the youth, who have not yet reconciled themselves to the absurd injustices they witness all around.

Poverty, homelessness, helplessness and despair. Environmental degradation and climate change. Colonial and inter-imperialist war (in Iraq, Afghanistan, Palestine, etc) – in which they may be called upon to fight. Famine, malnutrition and malnutrition-related disease. Unemployment, under-employment, and decreasing living standards. These are the benefits of monopoly capitalism in the 21st century. Imperialist cause and anti-social effects are inextricably linked, and the growing opposition to all these social phenomena are, at base, all elements (conscious or not) of the anti-imperialist struggle.

As no solution to these profound social problems can be offered by the capitalist political establishment, a thin gruel of diversionary sub-culture, mixed with a large measure of racism, communalism and misogyny are daily pumped to the masses, in order to divide workers, and to give us self-destructive avenues down which to vent our anger, in a manner that preserves rather than destroys the capitalist system.

And, ever present, behind the honeyed words, are the mailed fists of Anglo-American and EU imperialism: administering police beatings on the streets at home, to workers in general, but to organised and disenfranchised workers in particular; or conducting occupations, colonial wars and punitive expeditions abroad on behalf of an imperialist class desperate to enforce its domination as its economic grip weakens.

The capitalist class, whose future is in the past, clings tenaciously to power and pours scorn on all criticism; particularly on scientific Marxist criticism. Fukuyama’s thesis of capitalism as “the end of history” remains their default position.

But such triumphalism looks increasingly shaky when the crisis of overproduction becomes profound. For capitalism offers four fifths of humanity a wretched existence, and the oppressed nations and particularly the working classes feel keenly their lack of interest in maintaining a system so profoundly at odds with the needs and wishes of the vast masses of humanity.

Figure 1 – ‘The demographic divide’[iii]



2008 population

59.9 million

66.5 million

2025 population

62.0 million

109.7 million

Population < age 15

8.4 million (14%)

31.3 million (47%)

Population age 65+

11.9 million

1.7 million

Annual births


2.9 million

Annual deaths



Annual natural increase (births minus deaths)

- 7,000

2.1 million

Annual infant deaths



Life expectancy at birth

81 years

53 years

Percent of population undernourished

< 2.5%


The youth are not always the most radical element of society, for inexperience can lead to susceptibility to false promises and demagogy, but in as much as they are overwhelmingly working class, and that their lives lie ahead of them and their future is very much jeopardised by the current political order, they are unquestionably our natural ally. The most oppressed and downtrodden populations in the world are also the youngest.

For our part, to be effective, we must find the means to connect our understanding with the vast masses of humanity, not least the youth. Otherwise, we are doomed to play the role of helpless spectators on the recurring capitalist train-wreck, rather than the instigators and shapers of humanity’s bright future.

It is clear that the arm of criticism cannot replace the criticism of arms. Material force can only be overthrown by material force, but theory itself becomes a material force when it has seized the masses.”[iv]

Our tasks: what is to be done?

But the youth must first be drawn to the cause of their own emancipation. They require concrete explanations, understanding of the class interests that perpetuate injustices, and the means to overcome them.

The atomised youth, isolated and oppressed, need to be organised and to gain experience in fighting for meaningful change. To win the youth, just as to win other sections of the population, we need to subject the imperialist order to ruthless criticism, or, as Lenin put it, we need to aim at “the revolutionary elucidation of the whole of the present system or partial manifestations of it.[v]

Our respective organisations must not only have the correct and uncompromising political line, but need to take every opportunity to break the capitalist monopoly on the means of communication in order to win the people to our correct reasoning, galvanise them and draw them as an organised force into political life and action!

The social-democratic [communist][vi] ideal should not be a trade-union secretary, but a tribune of the people, able to react to every manifestation of tyranny and oppression, no matter where it takes place, no matter what stratum or class of the people it affects; he must be able to generalise all these manifestations to produce a single picture of police violence and capitalist exploitation; he must be able to take advantage of every event, however small, in order to explain his socialistic convictions and his democratic demands to all, in order to explain to all and everyone the world-historic significance of the proletariat’s struggle for emancipation.[vii]

Radicalisation of the youth

The youth in Britain are once more – at long last! – becoming radicalised, by their deteriorating employment prospects during the crisis, by the growing burden of unemployment, by their oppression at the hands of the police (especially black, Asian and muslim working-class youth), by ongoing racist discrimination against ‘minority’ communities, or by their principled opposition to imperialist wars and occupations, which in an imperialist country are as much a part of domestic political life as cuts in health and education provision.

We recently saw a wave of protests and occupations in over 20 universities, triggered by our government’s support for Israel’s attacks on Gaza (Dec 2008-Jan 2009), and – a positive development – by the imperialist propaganda machine’s blatant bias, especially the bias of that allegedly ‘impartial’ mouthpiece of British capital, the BBC.

Even in docile Britain, long the home of class-collaborationist, social-democratic politics, workers are learning the methods of more radical and determined struggle, as shown by the sabotage of arms manufacturers Raytheon (during Israel’s assault on Lebanon) and EDO-ITT (during Israel’s assault on Gaza), and the occupation of the Visteon (Ford) works in Enfield.

The British anti-war movement recently adopted resolutions calling on unions to encourage members to do all in their power not to cooperate with British imperialist war crimes, as well as supporting the Smash EDO activists.[viii]

Social-democratic influence

There is strong anti-war, anti-capitalist and pro-Palestinian sentiment among sections of the working population, but the Labour party’s grip over all these movements, direct and indirect, as well as over many of the ‘independent’ (even ‘communist’) political parties involved in these struggles, is an all-pervasive and crippling factor.

Social democracy’s prime aim is always and everywhere to frustrate and curtail the “propaganda of brilliant and complete ideas” and prevent the emergence “of revolutionary opposition that expose[s] the state of affairs in our country, particularly the political state of affairs, in so far as it affects the interests of the most varied strata of the population.” (Ibid)

Our task is to break the hold of social-democratic politics over these groups, to make contact with workers in struggle and to explain the relationships between their concrete grievances and imperialism, and that the proletariat’s struggle for emancipation offers the only alternative path.

Racism – the Achilles’ heel of the European proletariat

Labour is a party with a history of dividing working people by fanning the flames of racism and anti-immigrant sentiment. Today, it is attempting to divert workers’ attention and anger from the true cause of their misery – the capitalist system – towards immigration and ‘foreign’ workers, whom it points to as being ‘the problem’ while mouthing the fascist British National Party (BNP) slogan “British jobs for British workers”. Its hypocritical campaigns to “Vote Labour to keep the BNP out”, cannot disguise the fact that that its own racist and anti-immigrant policy has made all the running for the BNP. We must counter all this with campaigns for real working-class unity and the demand for equal rights and jobs for all workers!

In the field of education, Labour has introduced an increasingly (although ‘voluntarily’) segregated and communalised secondary schooling system. In addition to the huge number of private schools, we have catholic and Church of England, jewish and muslim, sikh and black schools. Far from ‘protecting the heritage’ of minority communities, as is the stated aim, this is a recipe for dividing the working class, of emphasising racial and religious differences, and for peddling all kinds of obscurantism.

Such a system of ‘cultural national autonomy’ was seen under the British in the north of Ireland and the declining Russian empire (among others). British imperialism’s history of fomenting communalist strife and inciting pogroms to divert revolutionary struggle is well known. We must fight for comprehensive secular and high quality education – as we would in the field of health or housing provision.

The greatest threat to peace and stability in Britain and the world is not yet the fringe BNP councillor, but the ‘mainstream’ free-market fundamentalist Gordon Brown and his entire Labour apparatus. As a first step towards real change, the British working class must give up its unrequited love for Labour.


There is no shortcut to building a disciplined, professional, tried and tested party of the proletariat that is capable of taking the initiative and advancing the true interests of the working class, drawing to it all disaffected strands of anti-capitalist resistance. Such a party must have a solid Marxist-Leninist political foundation if it is not to be thrown easily off course in the rapids of revolutionary struggle. It must cultivate and establish deep roots among the masses.

In Britain, our comrades in the CPGB-ML have set about this task in earnest. The militant youth must lend a hand in this process, also.

Urgent as our tasks are, and much as we want to expand our influence by leaps and bounds, losing sight of our revolutionary goals and concentrating instead on petty and often illusory short-term ‘advances’ has led more than one young comrade into lamentable opportunism and careerism.

As we win layers of the most conscious workers, undoubtedly our work will be enhanced by the work of new comrades, who are active in their local communities, unions, schools, youth clubs, music or drama groups, and many other political, organisational and cultural undertakings.

We must have such circles, trade unions and organisations everywhere in as large a number as possible and with the widest variety of functions; but it would be absurd and dangerous to confuse them with the organisation of revolutionaries, to obliterate the border line between them, to dim still more the masses’ already incredibly hazy appreciation of the fact that in order to ‘serve’ the mass movement we must have people who will devote themselves exclusively to social-democratic [communist] activities, and that such people must train themselves patiently and steadfastly to be professional revolutionaries.[ix]

It is not, in our opinion, the job of revolutionary parties, operating still in a capitalist society, to concern themselves, first and foremost, with the tasks of creating youth clubs, after-school clubs, sporting leagues, immigration advice centres, rap groups, etc (as some of our comrades and acquaintances have advocated). This is putting the cart before the horse, and diverting our precious resources from their most urgent political and organisational tasks.

Namely, “We must make it our business to stimulate in the minds of those who are dissatisfied only with conditions at the university, or only with Zemstvo [local government – but equally, the anti-war movement, housing campaigns, Palestine, trade-union struggles, state violence], etc the idea that the whole political system is worthless. We must take upon ourselves the task of organising an all-round political struggle under the leadership of our party in such a manner as to obtain all the support possible of all opposition strata for the struggle and for our party. We must train our social-democratic [communist] practical workers to become political leaders, able to guide all the manifestations of this all-round struggle, able at the right time to ‘dictate a positive programme of action’ for the restless students, the discontented Zemstvo councillors, the incensed religious sects, the offended elementary schoolteachers, etc, etc.”[x]

And further, “[we must arouse] in every section of the population that is at all politically conscious a passion for political exposure. We must not be discouraged by the fact that the voice of political exposure is today so feeble, timid and infrequent. This is not because of a wholesale submission to police despotism, but because those who are able and ready to make exposures have no tribune from which to speak, no eager and encouraging audience, they do not see anywhere among the people that force to which it would be worth while directing their complaint against the ‘omnipotent’” imperialist order.[xi]

Give us an organisation of revolutionaries, and we shall overturn …” Britain and the world! Our prime task is to build such vanguard organisations, broad in their political vision, disciplined, professional and steadfast in carrying out their tasks.

With respect to the youth, our task is to make contact with their spontaneously arising struggles, to broaden their political vision so they can sustain their activity, and to connect them with the wider working-class movement.

Our task is not to champion the degrading of the revolutionary to level of an amateur, but to raise the amateurs to the level of the revolutionaries.[xii]

Lenin’s advice to the youth: Educate yourselves in Marxism

The second congress of the RSDLP issued a resolution welcoming the growing revolutionary initiative of the student youth. It is worth revisiting.

The Second Congress of the Russian Social-Democratic Labour Party welcomes the growing revolutionary initiative among the student youth and calls upon all organisations of the party to give them every possible assistance in their efforts to organise. It recommends that all student groups and study circles should, firstly, make it the prime object of their activities to imbue their members with an integral and consistent socialist world outlook and give them a thorough acquaintance with Marxism, on the one hand, and with Russian Narodism and West-European opportunism, on the other, these being the principal currents among the conflicting advanced trends of today; secondly, that they should beware of those false friends of the youth who divert them from a thorough revolutionary training through recourse to empty revolutionary or idealistic phrase-mongering and philistine complaints about the harm and uselessness of sharp polemics between the revolutionary and the opposition movements [UNITY! At all costs, and at the lowest denominator – let us not discuss divisive politics!], for as a matter of fact these false friends are only spreading an unprincipled and unserious attitude towards revolutionary work; thirdly, that they should endeavour, when undertaking practical activities, to establish prior contact with the social-democratic organisations, so as to have the benefit of their advice and, as far as possible, to avoid serious mistakes at the very outset of their work.[xiii]

Today, alongside a firm grounding in the principles of Marxism Leninism, the trends we must advise our young comrades to familiarise themselves with must surely remain the ever present west-European social-democratic opportunism (the Labour party et al), its ‘ultra-revolutionary’, phrase-mongering Trotskyite wing, and its reformist, ‘communist’, Khrushchevite-revisionist wing (today’s otzovists and liquidationists); and, perhaps, with anarchism.

It is perhaps not the most romantic and exciting undertaking to assign to young comrades, but as Engels remarked profoundly “Socialism, having become a science, must be pursued as a science, that is, it must be studied.[xiv]

Of course, broad masses of workers and youth must be inspired and mobilised – but how, and by whom? They can only be mobilised under a consistently revolutionary and effective programme by a vanguard organisation of relatively advanced and united class-conscious workers. As Lenin so rightly pointed out, in a movement plagued by opportunism and ignorance, to advance any other aim would be the political equivalent of wishing mourners at a funeral “many happy returns of the day”.[xv]

If, a century ago, the capitalists sought to deprive working people of all education, today they seek to drown all real political education, all revolutionary knowledge and all working-class history in a sea of anti-communist and pro-capitalist lies and half truths.

In our ‘history’ classrooms, such tools as the Trotskyite ‘critique of communism from the left’ (Revolution Betrayed) and the fairytales of the semi-Trotskyite British state agent George Orwell (Animal Farm, etc), are systematically peddled to the youth, wrapped with crude bourgeois anti-communist lies. In the working-class movement, the Trotskyite parties join seamlessly with the capitalist state to push anti-communist and anti-national liberation propaganda, and we must point out that the Trotskyites sing from the imperialist hymn-sheet, while ruthlessly exposing the underlying essence of these counter-revolutionary positions.[xvi], [xvii], [xviii]

It is clear to us that such intellectually shabby slanders are merely aimed at undermining the confidence of the working class to take their destiny into their own hands and overturn the exploiting classes’ applecart.

The Gobbelsian art of propaganda has attained a high degree of perfection, and the mass media a high degree of monopolisation, under the current imperialist order, such that our most urgent task is once again – while maintaining the struggle against school cut-backs and closures – to augment the taught bourgeois syllabus with a programme of revolutionary education, both for our own party members and for the wider working class.

We must remember Lenin’s words, directed at the Tsarist autocracy, but applying with equal force to the contemporary capitalist order:

Our minister regards the workers as gunpowder, and knowledge and education as the spark; the minister is convinced that if the spark falls into the gunpowder, the explosion will be directed first and foremost against the government. We cannot deny ourselves the pleasure of noting that in this rare instance, we totally and unconditionally agree …”

Workers, you see how terrified our ministers are at the working people acquiring knowledge! Show everybody, then, that no power will succeed in depriving the workers of class-consciousness! Without knowledge, the workers are defenceless, with knowledge they are a force![xix]

[i] K Marx, The Eighteenth Brumaire of Louis Bonaparte, 1852, Foreign Languages Press, Peking, 1978, p9

[ii] ‘Greek party debates reasons for the collapse of socialism in the USSR’, Lalkar, March 2009 http://www.lalkar.org/issues/contents/mar2009/kke.html

[iii] Carl Haub and Mary Mederios Kent, 2008 World Population Data Sheet

[v] V I Lenin, What Is To Be Done?, 1902, Foreign Languages Press, Peking, 1973, p100

[vi] ‘Social democracy’ was the term adopted by the communist movement in the days of the Second International (1889–1916).

When, at the outbreak of the first inter-imperialist war (1914–18), the majority of these national parties shamefully sided with their own imperialists, betraying proletarian internationalism, Lenin and the Bolsheviks declared social democracy to be “a stinking corpse”, whose hollow preaching of socialism in words was belied by their pro-imperialist deeds. Hence the terms ‘social-chauvinist’ and ‘social-imperialist’ were coined to describe them. In response, the Russian Social Democratic Labour Party (RSDLP) changed its name to the Communist Party.

In 1918, Lenin initiated the founding of a new, Third or Communist International, comprising the truly revolutionary trends and parties from the former social-democratic movement. It is this trend and movement which led to October 1917 and all similar proletarian advances. What Is To Be Done?, written in 1902, predated this split, hence the term ‘social democratic’ should be read ‘communist’, and not confused with the modern-day descendants of the social-imperialists of the second international type, such as the imperialist Labour party in Britain.

[vii] V I Lenin, What Is To Be Done?, p99

[ix] V I Lenin, What Is To Be Done?, p156

[x] V I Lenin, What Is To Be Done?, pp104-5

[xi] ‘Where To Begin?’ by V I Lenin, Iskra, 1901, Collected Works, Vol 4, Foreign Languages Publishing House, Moscow, 1961, pp21-22

[xii] V I Lenin, What Is To Be Done?, p157

[xiii] Draft Resolution on the Attitude Towards the Student Youth, 1903, Minutes of the Second Regular Congress of the RSDLP, Geneva, 1904 http://www.marxists.org/archive/lenin/works/1903/2ndcong/3.htm

[xiv] ‘Preface addendum’, 1874, to F Engels, The Peasant War in Germany, 1850

[xv] V I Lenin, What Is To Be Done?, p28

[xviii] ‘Lies concerning the history of the Soviet Union’ by Mario Sousa, stalinsociety.org, March 1999

[xix] ‘What are our ministers thinking about?’ by V I Lenin, 1895, Collected Works, Vol 2, Progress Publishers, Moscow, 1972, p92

October Revolution rally: speech by Giles Shorter (CPGB-ML)

Comrades and friends, since we are all here tonight to celebrate the Bolshevik revolution of October 1917, it seems like a good moment to look back at the roots of Bolshevism, and the organisational principles which Comrade Lenin and the Bolsheviks espoused.

1898 Founding of the party – Economism – What Is To Be Done

The Russian Social Democratic Labour Party (RSDLP) was founded officially in 1898, but its first stumbling steps were dogged by police suppression, ideological muddle and poor organisation. Things were made worse by the influence of the Russian opportunist trend known as ‘Economism’.

In the name of standing up for the interests of the working class, the Economists insisted on limiting the class struggle to purely ‘bread-and-butter’ industrial issues. They saw Lenin’s plans for a united and centralised political party of the working class as an unnecessary and artificial intrusion upon workers’ spontaneous industrial skirmishes. Their influence helped to perpetuate ideological muddle and lax organisation.

Under these circumstances, Lenin and his comrades – we cannot yet call them Bolsheviks – used the columns of the party paper, Iskra (Spark) to wage a relentless struggle against the disorganising ideas of Economism. By this means, the ground was prepared for the ideological and organisational consolidation of the party.

A key moment in this struggle came in March 1902, with the publication of Lenin’s What Is To Be Done? This work not only delivered a great blow against Economism, it also laid the foundations for the whole future Bolshevik approach to ideology and organisation.

Against the blind worship of spontaneity which characterised the Economists, Lenin asserted the vanguard role of the proletarian party. The party’s role was not to follow but to lead. And key to the development of this leadership role was the central, all-Russian party newspaper.

The purpose of the paper was not simply to comment and analyse but to organise. It was the paper’s job not only to weld the party ideologically, but also to unite local bodies within the party organisationally, as Lenin wrote that such a paper “is not only a collective propagandist and collective agitator, but also a collective organiser”.

These were not just very clever ideas on how to run a political newspaper, but an assertion of the indissoluble bond between the ideological and organisational make-up of the party – the unity of its theory and its practice. And the battle was not just against the Russian Economists, with their exclusive fixation on narrow trade-union struggles. Lenin makes it clear that these gentry were no more than a pale local variant of a virulent strain of opportunism which was international in scope.

There can be no better proof of the continued relevance of the organisational principles advocated by Lenin than the fact that they continue to provoke today’s opportunists just as badly as they did 100 years ago!

Lenin was clear that for the revolutionary movement to hold out, it needed a stable organisation of leaders to maintain continuity; and the bigger the movement grew, the more crucial would such an organisation be. The vanguard organisation would need to consist first and foremost of professional revolutionaries, trained in the art of outfoxing the political police. Far from limiting the scope of the movement, argued Lenin, such an approach to leadership would offer the best prospect of drawing the masses in ever greater numbers into working for the revolution.

It is legitimate for us to ask how much relevance these organisational tactics have for communists today. After all, we are not living in an autocratic state, we do not live under Tsarism, and perhaps we do not require a party leadership that has professional training in the art of combating the political police – yet.

However, as degenerate British imperialist society moves deeper into crisis, the retreat from bourgeois democratic forms is becoming daily more pronounced. Wars of national oppression abroad, erosion of civil liberties at home, cuts in public services, attacks on the pay and pensions of workers, the dismantling of the ‘welfare state’ and the spread of anti-immigrant propaganda – all these combine to create a harsher political climate for dissent of any kind.

The plunge into financial crisis and slump can be expected to intensify this process, precisely in the degree to which the bourgeoisie feel it more urgent to safeguard the exploited workers from the growth of communist influence.

This period of renewed crisis presents the proletariat with an immense historical responsibility, which it cannot hope to shoulder without the guidance and leadership of a party that has learnt to match ideological with organisational strength.

The working class may not yet require a party ‘professionally trained in the art of combating the political police’ – but we certainly do need a party that is no less professional in its approach to organisation than it is in its approach to ideology.

Second Congress of the RSDLP

In 1902, Lenin explained these organisational principles in his work, What Is To Be Done? In July 1903, the ideas advanced were tested out in political struggle at the Second Congress of the RSDLP.

Lenin and his comrades at Iskra submitted a maximum and a minimum programme for the party. The maximum programme dealt with the ultimate goal: socialist revolution and proletarian dictatorship. The minimum programme dealt with the bourgeois democratic phase of the revolution: getting rid of the Tsar, securing a democratic republic, limiting the working day and giving land to the tiller.

Mention of proletarian dictatorship ruffled some opportunist feathers, as did the prospect of an alliance with the peasantry and recognition of the right of nations to self-determination. But on all these issues, the Iskra view prevailed.

However, having failed in a direct assault on the Leninist programme, opportunism now turned its attention to the rules. Having failed to undermine the party’s ideology, opportunism now set its sights on the party’s organisation.

The opportunity for this mischief-making arose around the very basic question: what determines who is a member of the party? Martov could hardly disagree with the common-sense stipulations that party members had to stick to the party line and pay their subs. Where he got cold feet was over Lenin’s insistence that every member should submit to party discipline by working within one of the party’s organisations. The Short History of the CPSU(B) puts it in a nutshell.

Martov regarded the party as something organisationally amorphous, whose members enrol themselves in the party and are therefore not obliged to submit to party discipline, inasmuch as they do not belong to a party organisation.” (Short History, p36)

To the untutored ear, the Martov approach to party building could sound very bold and revolutionary. Why not have done with it and say that every worker who downs tools and goes on strike demonstrates by his actions that he has the right to be in the party? But such phoney rank-and-file fervour conveniently forgets that it takes all sorts to make a strike, including non-socialists and anarchists.

And in any case, the real intended beneficiaries of Martov’s ‘come all ye’ approach to party membership were not workers at all, but unreliable bourgeois intellectuals eager to parade as progressive leaders but not prepared to “join an organisation, submit to party discipline, carry out party tasks and run the accompanying risks”. (Short History, pp36-37)

Even on the Iskra side of the argument, not all were wholeheartedly behind Lenin. Thanks to some of these wavering elements, Martov’s views on party rules were for the moment tolerated, and this was a temporary setback for the party. What was established at the Second Congress, however, was a clear distinction between the Menshevik and the Bolshevik positions on both ideological and organisational questions, a distinction which proved to be of great political value to the Bolshevik cause in the struggles to come.

It was in the elections at the conclusion of this Second Congress, in which Lenin and his followers secured a majority of the votes, that the two trends within the RSDLP started to be identified as Bolshevik (majority) and Menshevik (minority).

One Step Forward, Two Steps Back

In May 1904, the essence of this key struggle over organisational principles was crystallised in Lenin’s work, One Step Forward, Two Steps Back.

1. Lenin insisted that what was required was a vanguard party, arguing that “To forget the distinction between the vanguard and the whole of the masses which gravitate towards it, to forget the constant duty of the vanguard to raise ever wider strata to this most advanced level, means merely to deceive oneself, to shut one’s eyes to the immensity of our tasks, and to narrow down these tasks.” (Short History, p41)

The very word ‘vanguard’ has become anathema within the reformist left, drawing knee-jerk accusations of elitism and arrogance. Yet such accusations are no more than a smokescreen to cover the left’s abdication of responsibility towards the class they purport to champion.

2. Every member had to be working for a specific organisation of the party. “If the party were not an organised detachment of the class, not a system of organisation, but a mere agglomeration of persons who declare themselves to be party members but do not belong to any party organisation and therefore are not organised, hence not obliged to obey party decisions, the party would never have a united will, it could never achieve the united action of its members, and, consequently, it would be unable to direct the struggle of the working class.” (Short History, p41)

3. The party must struggle to guide all other organisations of the working class, not hiding behind a cloak of false modesty like the Mensheviks. To belittle the leading role of the party is, in fact, to weaken and disarm the proletariat.

Comrades here present know from experience that it is not always easy to combat Labour party influence in the unions. It is tempting to declare the struggle unnecessary (because ‘eventually the crisis will in any case loosen the ties that bind organised labour to social democracy’). It is tempting to declare the struggle impossible (because ‘social democracy is so ingrained in the trade unions – why waste the effort?’). It is not so unusual even to hear both optimistic and pessimistic versions expressed in one and the same breath!

But however the issue may be fudged, the fact remains: no matter how weak we may judge communist influence to be at present within the unions, the task remains to build a party that can guide all the other organisations of the working class.

4. The party must multiply and strengthen connections with the non-party masses.

For example, this is the light in which communists should see work with the anti-war and international solidarity movements, as well as with organised labour, however grandiose the term ‘masses’ may sound at this early stage of development.

5. The party will be a party of democratic centralism, with election from below and leadership from the centre. As Lenin puts it, “Now we have become an organised party, and this implies the establishment of authority, the transformation of the power of ideas into the power of authority, the subordination of lower party bodies to higher party bodies.” (Short History, p43)

The working class is not best served by a loose association of study and agitation groups, but by a party of democratic centralism, with a central committee, regions and branches.

6. All the comrades in the party must share a common proletarian discipline, binding upon all. And it is the duty of everyone to make sure this happens. The “class-conscious worker”, says Lenin, “must learn to demand that the duties of a party member be fulfilled not only by the rank-and-filers, but by the ‘people at the top’ as well.” (Short History, p44)

In short, the Mensheviks of yesterday and today want a party as a kind of club for ‘great thinkers’, unburdened with a lot of tiresome rules binding upon all without exception.

The Bolsheviks of yesterday and today demand a party that not only seeks ideological unity but also learns to consolidate that ideological unity by the material unity of organisation of the proletariat.

Lenin rubs this home in the final paragraph of One Step Forward.

In its struggle for power, the proletariat has no other weapon but organisation. Disunited by the rule of anarchic competition in the bourgeois world, ground down by forced labour for capital … the proletariat can become, and inevitably will become, an invincible force only when its ideological unification by the principles of Marxism is consolidated by the material unity of an organisation which will weld millions of toilers into an army of the working class.

1905 and the Third Congress

The eruption of revolution in 1905 created a new situation for the party. The divisions over organisational questions were now supplemented by open splits over questions of political tactics.

Where the Bolsheviks insisted that the bourgeois democratic struggle against Tsarist autocracy must not be left to the gutless bourgeoisie to lead, but must be conducted in a revolutionary manner under the leadership of the advanced proletariat and its party, the Mensheviks took the position that workers should leave leadership in the hands of the liberal bourgeoisie. The revolution was not socialist, so why should the workers get involved in leading it? This left-sounding posture merely served as a cover for the Mensheviks’ own inaction.

If the party was not to betray the trust of the masses, it had to resolve these differences without delay. This required the convening of a Third Congress, but when the Bolsheviks proposed this, the Mensheviks declined, preferring to sit on their hands.

The Bolsheviks then convened the Third Congress unilaterally, in April 1905. Sooner than attend, the Mensheviks responded by calling a congress of their own. The splitters’ congress duly committed the Mensheviks to the tactics of tucking in behind the liberal bourgeoisie, whilst the Third Congress of the RSDLP took on the burden of leadership which the Mensheviks insisted upon shirking.

When the Moscow proletariat began the armed uprising of December 1905, it was no accident that, out of a fighting organisation of about 1,000 combatants, over half were Bolsheviks.

It was not until 1912 that Menshevism was finally so discredited within the party that the Bolsheviks could finally release the party from the sapping influence of their opportunism and indiscipline. However, the lessons learned in those struggles proved invaluable to Bolshevism in the trials that lay ahead, both in making revolution and in defending proletarian dictatorship.

In that crucial year of 1905, when what some had belittled as ‘just’ organisational disagreements erupted into fundamental disagreement as to the whole character of the revolutionary development and the role to be played in it by the proletariat, another influential figure on the revolutionary left was to be found energetically taking the wrong side.

Insofar as he consented to being organised by anybody between 1903 and 1917 (the year which saw him jump ship into the Bolshevik ranks), Leon Trotsky was identified with the Mensheviks. So it was that, whilst the Bolsheviks were leading the Moscow proletariat in revolt in 1905, Trotsky and his fellow-Mensheviks, Khrustalev and Parvus, were using their ascendancy within the St Petersburg Soviet to obstruct plans for the uprising, refusing to arm the workers or bring them into contact with the soldiers of the St Petersburg garrison.

Trotsky and 1917

In fact, one way to gauge the organisational maturity of Bolshevism in finally leading the masses to seize the power in October 1917 is by negative reference to the shallowness of Trotsky’s ‘Lessons of October’. Such is the very revealing approach adopted by Comrade Stalin in his 1924 work, ‘The October Revolution and the tactics of the Russian Bolsheviks’.

Though Trotsky finally joined the Bolsheviks in 1917, it is clear from his analysis of the events of that world-shaking year (in his ‘Lessons of October’) just how poorly he grasped the complex character of Bolshevik leadership.

Having himself, for all those years, resisted being organised within the discipline of a communist party – feeling more at home in the world of cabals, factions and conspiracies – he now proved incapable of understanding how such a party could take on the task of organising the vast revolutionary masses of mother Russia.

Leadership, for Trotsky, was either a question of dazzling an audience with brilliant words, or of issuing military-style orders to the obedient ranks.

Comrade Stalin poured scorn on Trotsky’s ‘explanation’ of Bolshevik tactics as they evolved between April and October 1917. Trotsky talked as if, right from the word go, the Bolsheviks had a ready-made political army – as if it were only a question of conducting a few reconnaissance missions before sending in the masses to bring home the revolutionary victory.

If one were to listen to Trotsky, one would think that there were only two periods in the history of the preparation for October: the period of reconnaissance and the period of uprising, and that all else comes from the evil one. What was the April demonstration of 1917? ‘The April demonstration, which went more to the ‘Left’ than it should have, was a reconnoitring sortie for the purpose of probing the disposition of the masses and the relations between them and the majority in the Soviets.’ And what was the July demonstration of 1917? In Trotsky’s opinion, ‘this, too, was in fact another, more extensive, reconnaissance at a new and higher phase of the movement.’ Needless to say, the June demonstration of 1917, which was organised at the demand of our party, should, according to Trotsky’s idea, all the more be termed a ‘reconnaissance’.

This would seem to imply that as early as March 1917 the Bolsheviks had ready a political army of workers and peasants, and that if they did not bring this army into action for an uprising in April, or in June, or in July, but engaged merely in ‘reconnaissance’, it was because, and only because, ‘the information obtained from the reconnaissance’ at the time was unfavourable.

Needless to say, this oversimplified notion of the political tactics of our party is nothing but a confusion of ordinary military tactics with the revolutionary tactics of the Bolsheviks.

Actually, all these demonstrations were primarily the result of the spontaneous pressure of the masses, the result of the fact that the indignation of the masses against the war had boiled over and sought an outlet in the streets.

Actually, the task of the party at that time was to shape and to guide the spontaneously arising demonstrations of the masses along the line of the revolutionary slogans of the Bolsheviks.

Actually, the Bolsheviks had no political army ready in March 1917, nor could they have had one. The Bolsheviks built up such an army (and had finally built it up by October 1917) only in the course of the struggle and conflicts of the classes between April and October 1917, through the April demonstration, the June and July demonstrations, the elections to the district and city Dumas, the struggle against the Kornilov revolt, and the winning over of the Soviets. A political army is not like a military army. A military command begins a war with an army ready to hand, whereas the party has to create its army in the course of the struggle itself, in the course of class conflicts, as the masses themselves become convinced through their own experience of the correctness of the party’s slogans and policy.


Comrades and friends, how much less is that ‘political army’ of the revolution ‘ready to hand’ in Britain today – to the dismay of all the would-be drill-sergeants of the revisionist and Trotskyite ‘left’? Where is it to be found?

Let us leave it up to these gentry to search for their ready-made army in the dwindling ranks of the imperialist Labour party. We will do better to recall those prophetic words of Lenin, way back in 1904, in One Step Forward.

In its struggle for power, the proletariat has no other weapon but organisation. Disunited by the rule of anarchic competition in the bourgeois world, ground down by forced labour for capital … the proletariat can become, and inevitably will become, an invincible force only when its ideological unification by the principles of Marxism is consolidated by the material unity of an  organisation which will weld millions of toilers into an army of the working class.”

There can be no better way to celebrate the proletarian revolution of October 1917 than to study for ourselves the real lessons of October, the heroism of the revolutionary masses and the revolutionary maturity of the Bolshevik party that led them.

The firmer these lessons are grasped, the surer can we be that our celebration of Bolshevik history tonight is but a foretaste of the communist future for which we struggle.

Long live October 1917!