1. World Perspectives 2004 (draft document)
2. The whole of history is a process in which contradictions accumulate slowly, until they finally reach a critical point in which quantity becomes transformed into quality. The task of dialectics is to establish when such critical points emerge. For the last 10 or 20 years all the contradictions have been accumulating on a world scale. Now we see the results. Never in history have we seen such tremendous convulsions at all levels: economic, social, diplomatic and political. Never have the contradictions of the capitalist system been so clearly expressed in every part of the globe.
3. The whole situation on a world scale resembles what is called a critical state in physics, where particles are subject to the wildest fluctuations. This creates certain difficulties for perspectives, which in the previous period were more predictable. Just as it is relatively easy to predict the laminar flow of a liquid, but difficult to predict the outcome of turbulence, so the world situation, balanced on the edge of chaos, can produce all kinds of surprises, both for the ruling class and for the Marxists.
4. The critical state in physics can be expressed by a simple experiment, in which the addition of a single grain to a heap of sand triggers a landslide. At the critical point, any accidental factor can trigger a serious crisis. This is known in modern physics as a “non-equilibrium system”. This phrase describes very well the present situation on a world scale. It is the fundamental characterisation of the historical epoch through which we are passing. This is what determines our analysis – not this or that event. It is necessary to look beyond the immediate particulars and look for the deeper historical processes.
5. There are certain historical periods in which nothing much seems to happen. For a long time after the end of the Second World War, the capitalist system succeeded in establishing a relative and temporary equilibrium. The division of the world between mighty Stalinist Russia and US imperialism led to the freezing of international relations for a whole historical period. At the same time, the long period of capitalist upswing led to a reduction of the tensions between the classes, at least in the advanced capitalist countries. Revolution was off the agenda for decades, although even at this stage there was the revolution of May 1968 in France. But now the whole process has been thrown into reverse.
6. These remarks refer, of course, to the advanced capitalist countries of Europe, Japan and the USA. For two-thirds of the world’s population living in the undeveloped countries, there was no respite. This was a period of almost continual upheavals, wars, revolutions and counterrevolutions. But for the developed capitalist countries, this was not the case. For a long time the conflicts and tensions were hidden beneath the surface. The working class was checked by the force of inertia. But now all the old equilibriums have been disrupted. The unseen forces have begun to assert themselves.
7. What is the main characteristic of the world situation? It is precisely the breakdown of the old stability, the violent disruption of the old equilibrium everywhere. Instead, wherever we look we see colossal and unprecedented instability and volatility at all levels. This is the most unstable period since 1945. Instead of boom, full employment and prosperity, there is crisis, growing unemployment and cuts in living standards, even in the most prosperous countries. The gap between rich and poor is constantly increasing and economic power is concentrated into fewer and fewer hands.
8. Gone are the old certainties, the “American dream”, the conviction that tomorrow will be better than today, just as today was better than yesterday. In the advanced capitalist countries the present generation will be the first generation since 1945 whose living standards and working conditions will be worse than those of their parents. The relations between the classes are increasingly tense and unstable. To the degree that the real situation impresses itself on the consciousness of the masses, the stage will be set for an explosion of the class struggle everywhere. It is true that consciousness lags behind events, but it will catch up with a bang. That is the essence of a revolution.
9. The old equilibrium has been destroyed, not only between the classes but also between the nations. Not since 1945 has the world situation been so disturbed and chaotic. The relations between the powers are increasingly tense, and the USA’s ambitions to world hegemony are leading to one war after another. Thus, the war in Iraq was not an accident but expressed a general tendency. It has all kinds of implications for the general situation in the Middle East and on a world scale.
10. We explained this a long time ago, when all other tendencies were plunged into despair by the apparent apathy of the masses. We explained that beneath the apparent surface of tranquillity there was a silent accumulation of bitterness, anger, frustration and despair. This is what Trotsky meant when he referred to the molecular process of the socialist revolution. When the situation reaches the critical point, there is a tendency to growing instability and turbulence, which can be set in motion by even the smallest change.
11. Instability is rooted in the situation itself. Thus, changes that in a different situation would have no effect, or an insignificant result, now set off colossal transformations. The nature of these changes can be economic, political or military. But in every case, the effects are always disproportionate to the causes. Non-dialectical thought, which always skates over the surface of events without ever suspecting the existence of a deeper lawfulness, seeks the explanation in this or that incidental factor – the actions of George Bush, the lunacy of bin Laden etc. These individual factors undoubtedly play a role, but the deeper cause is the fact that the capitalist system on a global plane is coming up against its limits and foundering on its inherent contradictions of private property and the nation state.
12. The fundamental contradictions express themselves most graphically in the outbreak of wars like the war in Iraq and the invasion of Afghanistan. Here we see how a military event immediately set off a chain of reactions that were not foreseen by its authors. Even before the first shots were fired in Iraq there were huge demonstrations of protest in London, Washington, Rome and Madrid. In London alone there were 2 million, and in Spain 6 million. How do we explain this? Certainly not by the skills of the organisers, who were more surprised than anyone else by the results. The only possible explanation was the existence of a deep and widespread discontent among the mass of the population that was waiting for an outlet through which to express itself.
13. The convulsive character of the present period is no accident. It is merely an expression of the fact that on a world scale the capitalist system has exhausted its potential as a historically progressive force. The development of the productive forces, which achieved impressive results in the period 1945-74, is now being held back by the limitations of private property and the nation state. These now constitute the main barriers in the way of human progress. The future development of the human race depends on the sweeping away of these monstrous barriers and the achievement of a harmonious and rational economic system on the basis of world socialism.
14. Sudden and sharp turns are rooted in the situation. If ever there was a time when routinism was out of the question, this is it. In such periods it is necessary to expect the unexpected! The events of September 11 were an example of the inevitability of such sudden and sharp changes. The results of this particular action were, as we predicted, reactionary. But the seeds of future revolutionary developments are also being prepared, even by events like this. The pendulum can swing rapidly from left to right and back again, opening up great possibilities for the revolutionary tendency on a world scale, provided we are able to grasp them. This is no time for scepticism and waiting upon events. We must be prepared, and prepare others, for the great events that impend.
15. World economy
16. Lenin said that politics is concentrated economics. The vagaries of the world economy find their expression in the psychology of all classes, beginning with the ruling class. The mood of the spokespersons of capital swings between the wildest optimism and the deepest depression. These mood swings are themselves an expression of the general instability. At the moment, the bourgeoisie and its economic spokespersons speak optimistically about an imminent recovery of the world economy. There can, of course, be no doubt that at a certain point, some recovery will take place. There can be no such thing as a final crisis of capitalism. History shows that capitalism can always get out of even the deepest slumps. It will not collapse of its own accord, but must be overthrown by the conscious movement of the working class.
17. However, in the optimistic declarations of the bourgeois there is a large amount of wishful thinking. They cannot disguise the fact that all the beautiful dreams they had in the 1990s of the elimination of the boom-slump cycle have evaporated, leaving a bad hangover behind. On a world scale the productive forces are not growing but stagnating and even declining. The key to any real recovery is profits, but total US profits as measured in the National Accounts rose only 4% in the first quarter of 2003.
18. What growth there is is concentrated mainly in one country – the USA, and even there is confined mainly to the sphere of consumption. Even in the USA, where there were signs of recovery in the third quarter of 2003, the symptoms are contradictory. The evidence for a significant recovery of productive investment – the real motor-force of any boom – is as yet inconclusive. This is closely linked to the question of profitability. The capitalists are desperately trying to restore the rate of profit at the expense of the working class. The present “recovery” in the USA is accompanied by a growth in unemployment, with further retrenchment, factory closures, sackings, downsizing and cuts. To the great majority of Americans this does not feel like a boom at all.
19. In order to appreciate the real state of affairs, it is necessary to resort to an historical analogy. Nowadays the bourgeois begins to cheer wildly if it gets a growth rate of three percent. Yet historically, this is extremely low. Let us consider the figures for the growth of the GDP of the advanced capitalist countries in the ten years prior to the year of the first post-War recession – 1973:
20. Japan 146%
Canada 69%
France 69%
Italy 58%
West Germany 54%
USA 48%
OECD 63%21. From these figures we see that in the period of upswing, the average annual growth of the OECD countries (6.3%) was more than double the figure that they now aspire to (without much success), while Japan actually achieved an annual growth rate of over 14 percent.
22. Just compare these figures to the present situation. In 2002 the USA (which was supposed to be in a recovery) grew by just 2,5%, and the Euro zone economies by a miserable 0.2%. Japan was supposed to have grown officially by 3%, but in reality, if we take into consideration the factor of deflation (falling prices) its nominal rate of growth was actually negative. Money values in Japan are still falling and that is important for the rate of profit. In any case, even the figure of 3% for Japan is very poor when compared to the past record.
23. All the measures adopted by the Japanese capitalists under pressure from Washington have failed to produce the desired effect. This is a clear answer to the Keynesians in the Labour Movement who believe that the way to get out of the crisis is to stimulate the economy by public spending. Japan has, in effect, pursued Keynesian policies for most of the last period. It launched the biggest programme of public spending since 1945. The Japanese bourgeois threw caution to the wind. What was the result? They plunged the Japanese economy into debt, turning a budget surplus of 1.4% of GDP in 2000 to an estimated deficit of 4.6% of GDP in 2003. Long-term bond yields have slumped, and despite everything, the economy remains stalled.
24. Japan can no longer act as a motor force of the world economy. Its GDP grew officially by 2.6% in the first quarter of 2003, to a chorus of approval, but if we take deflation into account, the picture is not so rosy. Prices (as measured by the GDP deflator) fell 3.3% at the same time, so that the Japanese economy continues to shrink in nominal terms. The rise of the Yen further harms the Japanese economy by making its exports less competitive, while deflation makes it harder to pay off accumulated debts.
25. The sickliness of the world economy is shown by the global tendency towards deflation. In the first two quarters of 2003, the nominal GDP growth of the G7 nations was only 2% (on an annualised basis). Even this growth is only sustained by US consumer spending, which is increasing at an annual rate of 3%, as opposed to 1.8% in Japan and 0.8% in Germany. Growth in the EU has been even slower than in Japan for the last three years. Consumer confidence in Italy and Belgium has fallen to a nine and ten year low respectively. In Holland it stands at the lowest level since 1958. The forecasted growth for the EU is 0.75%. The EU is, in fact, on the brink of a recession.