The molecular process of World Revolution - Part Two

In Part Two we deal with the growing contradictions within the European Union, products of the crisis of capitalism which is pushing the various member states in different directions. It also looks into the polarisation between rich and poor worldwide and how world relations are affected.

(See Part OnePart ThreePart FourPart Five)

In Part Two we deal with the growing contradictions within the European Union, products of the crisis of capitalism which is pushing the various member states in different directions. It also looks into the polarisation between rich and poor worldwide and how world relations are affected.

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The European Union

Even more serious than the conflicts with China are the growing antagonisms between the USA and Europe. The euro continues to rise against the dollar, and this means that these relations will become increasingly embittered. There will be even more trade disputes, to add to the already long list. The WTO has ruled that America’s foreign-sales corporation tax was an illegal export subsidy, and gives the Europeans permission to levy £4 billion in retaliatory tariffs. One British ex-minister has advocated the introduction of tariffs specifically targeted to hit states in the USA where this could adversely affect Bush’s chances for re-election. On the other hand, Europe proposes to introduce new regulations on chemicals that would require manufacturers and users of chemicals to provide detailed information on the health and environmental effects of all their products. Like the regulations on GM foods, this is regarded as a protectionist measure by US producers.

The USA is the strongest imperialist power on earth. The US imperialists are determined to use their economic muscle to serve their own interests, just as they have been prepared to use their military muscle. It is a question of “America first!” Those who stand in their way must be crushed – either by rockets and bombs or by economic pressure and blackmail. This will create massive new contradictions on a world scale. It will lead to a general upswing in the revolt of the masses in Asia, Africa and Latin America. We can already see the beginnings of this in Venezuela and Bolivia. But it will also enormously exacerbate the contradictions between the USA and Europe.

This has far-reaching consequences. The entire world order that was put together so carefully after World War Two is cracking and splintering at the seams. The belligerent behaviour of the clique in the White House is hastening its demise. The USA is preparing to promote its interests at the expense of the WTO by developing a whole network of bilateral trade agreements. This is a dangerous trend from the point of view of free trade. The WTO can be reduced to merely a bureaucratic office for settling secondary disputes – a talking shop, rather like the UN, and just as powerless. This can lead to the fragmentation of world trade, with the consequent increase of protectionism.

There is already plenty of evidence of growing protectionist tensions between the USA and Europe. There have been serious conflicts over steel, textiles and agricultural products. We have already mentioned the case of America’s foreign-sales corporation tax, and the WTO ruling giving Europe permission to levy up to $4billion in retaliatory tariffs. The EU’s proposed regulations on chemicals, which require manufacturers to give detailed information on the health and environmental effects of all their products, will contribute to this new round of protectionism and provoke a response from the US. Given the depth of the crisis, neither the USA nor the EU is in a position to compromise. Although they will make repeated attempts to reach a deal, for fear of the alternative, there will be new disputes all the time, each more serious than the last.

The French and German ruling classes, who between them dominate Europe, fear the power of US imperialism. They see that there is a real clash of interests between them and the USA on a world scale and are preparing for a fight. The war in Iraq, which split Europe into so-called “new” and “old” Europe has long-term consequences for the developments of the European Union. France and Germany have embarked on a so-called “structural cooperation” concerning military and armaments affairs in order to be able to act independently of the USA. The rest of the European states no longer have an independent foreign policy. They are forced to choose between the foreign policy lines of the France-Germany axis on the one hand and those of the United States on the other hand. They are weak capitalist regimes, which vacillate between the main centres of power. The Eastern European countries such as Poland or the Czech Republic are leaning on the United States in order not to become wholly dependent on Germany. The American imperialists are trying to use some of the southeastern and eastern European countries to form a kind of Cordon Sanitaire in an attempt to limit Germany’s “Drang nach Osten” (drive to the East). For that reason the American imperialists are planning to move military bases from Germany to countries like Poland, Bulgaria and Romania. For now Hungary, Slovenia and Croatia on the other hand are gravitating to Germany and Austria. However, the change of government in Spain shows how quickly these alliances can change and how unstable they are. The new situation is particularly dangerous for South-Eastern Europe. If two rival imperialist blocs interfere in the Balkans instead of one relatively united “international community” (of imperialists), the chauvinist revanchists of all nationalities will be enormously strengthened. Unsolved conflicts between the nationalities may develop into proxy wars between the great powers in the future. Sooner or later the tensions within Europe will move beyond the level of diplomacy and onto the level of economic relations. Individual countries with a weak economic base may not be able to stand the pressures involved in abiding strictly by the criteria established to achieve the Euro and may be forced to break away from the monetary union. This would be exploited by US imperialism in its manoeuvres against the main European powers. Thus the dreams of the European bourgeois strategists have proven to be utopian. Instead of one united Europe as a counterweight against the United States, we see the United States manoeuvring against the main European powers through a series of smaller European countries – like so many little Trojan horses in the heart of the European Union.

In two world wars the attempts of the German ruling class to dominate the whole of Europe failed. After the Second World War the French ruling class had the idea that they could dominate Europe through an alliance with Germany. However things turned out differently. Germany emerged as the major power and France was forced to adapt to this new situation. It now realises that on its own it cannot face up to US imperialism and could become like Britain, a puppet of the US. That is the basic reason for the relative stability of the bloc between German and French imperialism, at least until now. However, the Franco-German bloc is nothing more than a cartel of two rival imperialist powers. On the one hand France has to tolerate the economic dominance of Germany, on the other hand Germany turns a blind eye to the state interventionist economic policies of France, which France is trying to use to protect its economy against German capital. The Franco-German military structural cooperation will lack fighting strength because of divergent foreign policy interests. The plans for a European Constitution are once again a desperate attempt on the part of German and French imperialism to unite Europe under their rule after the destabilising effects of the war in Iraq. But even if the European powers are able to reach some kind of compromise agreement, this constitution will not have any real meaning and will not solve the real internal conflicts of Europe. It cannot do so, for the national conflicts between the different European Union member states only allow for a Constitution that does not impinge on the real powers of each national ruling class. Furthermore, the constitution will not reduce the influence of the United States on European politics.

The European bourgeoisie tries to portray the enlargement of the European Union to wards Eastern Europe as a chance for millions of East Europeans to have a better future within a finally united Europe. The picture they present is one of the new members achieving faster growth rates than Western Europe with their living standards catching up within a certain period of time. Reality is looking quite different. The so-called “Baltic tigers” were only able to grow at a rate of 4-6 percent because their economic performance had previously dropped to 59 percent of the level of 1989 as a result of “market reforms”. All the East European countries are extremely dependent on exports to Western Europe and sooner or later they will be hit by the stagnation of demand across the whole of Europe. If we compare the GDP of the East European countries to the GDP of the West European average, we find that, with the exception of Slovenia, all East European countries are worse off than they were in 1989. The South-Eastern European countries experienced a negative average growth of -8 percent between 1991 and 2001. Only in 2002 did they start to recover. But even the moderate growth that we are witnessing now is in danger. It is not only the fall in demand in Western Europe that could lead to trouble. The foreign direct investment in the new member states fell by 50 percent in 2003 and this trend is continuing. The reason for this is the fact that investment in Eastern Europe since the fall of the “iron curtain” has not created new industries but rather it has dismembered the existing ones. Now the market is divided up. That will lead to big problems in the future because until now the trade and budget deficits were financed by money from foreign direct investment. If this source dries up, foreign currency will have to be bought. The East European currencies will come under the pressure of depreciation. But at the same time these currencies are pegged to the Euro and so they are becoming a target for speculation. ‘Financial Times Germany’ has already warned that Eastern Europe, especially Hungary could face a crisis like Argentina in the next few years. Most of these countries are now trying to get new investment by reducing their taxes in an adventurous way. Slovakia has introduced a flat rate tax level of 19 percent and now faces the danger of bankruptcy. Other countries like the Czech Republic are also following this road to ruin. Even the IMF has criticised them for their excessive reduction of tax levels.
The last fifteen years of so-called “market reforms” have lead to a situation, where cities like Bratislava, Prague or Warsaw have indeed reached the levels of West European averages. However this does not show the whole picture. At the same time whole regions, especially the old industrial areas have been reduced to abject poverty. In Poland and Slovakia unemployment has reached 20 percent and is still rising, while in the old industrial regions it stands at 30-60 percent.

In Poland, where more than 20 percent of the population is working in agriculture, membership of the European Union will lead to severe problems. Contrary to the bourgeois propaganda, the Polish small peasants cannot survive within the European market. Despite the transitional laws they will be crushed by the far more technologically advanced industrial farming in the West. Those small peasants who do manage to survive in the market will be finished off by such things as the EU health and safety regulations. The social contradictions will further aggravate the tensions between the member states, and within the states of Eastern Europe the class struggle will be on the order of the day.

The feeble, effete and degenerate British capitalists, having lost the empire, have also lost all possibility of acquiring a leading place in Europe. They have sunk into the role of a parasitic rentier bourgeoisie, based on services, banking and tourism. British industry has fallen into decline. The “workshop of the world” is only a distant memory of the past. On the international arena they content themselves with the humiliating role of the lackey of US imperialism. They are therefore regarded with suspicion in Paris and Berlin. This has pushed France and Germany closer together – at least for the present – and condemned Britain to further isolation on the world stage.

Inside Britain meanwhile, where events appeared to be lagging behind, there has been a dramatic change in the situation. On the surface, Blair appears to have maintained himself. He was carrying out, with little open opposition, a bourgeois policy of attacks on the working class. He had largely succeeded in carrying out a 'counter-revolution' in the Labour Party. Blair, in an alliance with Aznar and Berlusconi, had put himself at the head of the European right wing, which sought to model themselves on the free-market stance of the United States.

However, these policies were preparing a massive backlash. Blair's apparent victory was about to turn to ashes. The groundswell of opposition over policies at home and abroad is already having profound consequences. Blair has faced massive back-bench revolts in parliament that reflected growing opposition from below. Resignations even affected the cabinet. The Labour Party has suffered a series of shattering defeats in local and European elections. This shows a steady accumulation of discontent in Britain.

The two-million strong demonstration against the Iraq war in February 2003 was a watershed. It represented the biggest demonstration in British history and reflected the opposition to the Blair government not only over the war but all the pro-capitalist policies being pursued.

As we explained previously, the opposition to Blair would be reflected in the mass organisations at a certain point. This has already taken place in the trade unions where there has been a massive shift to the left over the past five years. The victory of left candidates in the elections for the union leaderships has mirrored this mounting opposition. There has been an earthquake, which has resulted in serious defeats for the right wing in a series of unions.

This process in turn will be reflected in the Labour Party in the coming period. Blair's days are numbered. The crises that will unfold in Britain will result in a series of splits in the mass organisations and the eventual spewing out of Blair and the right wing. Although this will not be a straight line, the inevitable victory of the left reformists will usher in a new convulsive period in British society and open up enormous possibilities for the Marxist tendency.

The European capitalists find themselves in a particularly difficult position. They need to cut living standards to restore profitability, but are faced with powerful and undefeated workers’ organizations. The crisis of European capitalism, as we predicted, has been exacerbated by the attempt to force different economies into a rigid straitjacket under the so-called “solidarity and growth pact”. The average deficit in the Euro-zone is 2.8per cent, as against a forecast of 1.8per cent. France, Italy and Germany have all broken the agreed limits for deficits. Both France and Germany face huge fines, although it is not likely that they will ever be paid. Chirac has called publicly for a “temporary softening” of the rules, which, if it is carried out, will naturally not be temporary. In reality, the Maastricht Treaty was an excuse to carry out a permanent austerity policy, with deep cuts in social spending. All over Europe there is a concerted policy of cuts, especially in the area of pensions. This is a finished recipe for class struggle. This represents a profound change in the situation.

Like Germany, France has breached the Maastricht limit of 3per cent for budget deficits. The French bourgeois show extreme indifference on this issue, and in fact have announced a 3 percent cut in income tax, which will further increase the deficit. The only way to “balance the books” is by deep cuts in social spending, which means a further intensification of the class struggle in France. The Raffarin government managed to push through its counter-reform on pensions despite mass protests and strikes. The 35-hour week is under attack. Now they propose a reduction in holidays. This is not the result of the bad will of this or that prime minister, but an expression of a deep social crisis. The same policies are being pursued, with variations, by every government in Europe.

The French economy has been slowing down for the last two and a half years. Unemployment is growing. All this is the background for a period of enormous social and political turbulence. There have been big strikes for the last ten years. Of course, this has not taken place in a straight line. The struggle has proceeded in waves. The struggle peaked in Nov-Dec 1995, then again in March 2000, and again in the summer of 2003. On May 13th 2003, there were 600,000 demonstrators on the streets of Paris, and a total of more than 2 million throughout France. The number of days lost in strikes has been increasing. Every layer has been affected. In the summer of 2002 all big arts festivals in France were cancelled as a result of strikes by artists.

The cuts in living standards provoke the working class and the petty bourgeoisie. In Italy in the last 2 years there has been a whole series of strikes, including two general strikes, as well as dozens of local and national demonstrations involving hundreds of thousands of people. This was a real tidal wave that signified the reawakening of the Italian proletariat. But the Italian bourgeoisie is pressing on with its programme of cuts and attacks on workers’ rights and living standards. This inevitably caused a certain perplexity in the ranks of the workers. However, in the present period, every lull in the struggle is merely the prelude to new and even more furious battles. The lull was followed by a further outbreak of strikes and mass demonstrations – of Alitalia, Fiat-Melfi etc.

In fact, this is a general phenomenon that precisely expresses the seriousness of the crisis. It is a new situation to which the workers are not accustomed. In the past the bourgeoisie would usually make some concessions in the face of mass action. But now they are digging in their heels and refusing to compromise. It was therefore only natural that there should be some hesitations on the part of the workers, who are trying to understand what is happening and work out the best way to respond. But hesitancy on the part of the unions encourages the bosses to make new and ever more insolent demands. The weakness of the union leaders encouraged Berlusconi to demand an increase in the retirement age. This was answered by a general strike called by the unions.

In Germany, Schroeder is also pushing through a programme of counter-reforms. He wants Germans to retire at 67 instead of 65, and to accept 40per cent gross earnings instead of the current 48per cent. There is growing opposition in the ranks of the unions and the Social Democracy, but the leadership is hopelessly inadequate for the tasks posed. The leaders of IG Metal halted the struggle for the 35-hour week in the East before it could succeed.

The underlying social and political instability was shown by the violent swings to the left and the right in elections. This is an expression of the general crisis that creates a feverish volatility in the mood of the middle class. The sects, who always draw the wrong conclusions, have been making a lot of noise about the imminent danger of fascism. At a certain stage the crisis of the regime can certainly lead to a violent swing in the direction of open reaction, although this will be characterised by the emergence of Bonapartist tendencies, not the kind of fascist regimes we saw in the 1940s. But at the present time the class balance of forces rules this out.

Despite the hysteria of the sects, the growth in support for Le Pen and similar movements in Holland and Austria was not an indication of a move towards fascism, but a symptom of profound instability and a frantic search of the petty bourgeoisie to find a way out of the crisis. The so-called Fortuyns Bloc in Holland fell to pieces very quickly after the death of its leader. In Austria the People’s Party is split and in crisis. In any case, none of these were fascist parties, despite their repulsive reactionary character.

In every case the rise of these reactionary parties is the result of the failure and bankruptcy of the reformist leaderships. Since the Labour leaders offer no solution to the crisis, the road is left open to the right wing demagogues to argue that the unemployment and bad housing is the fault of immigrants. This we see most clearly in France, where mass discontent with the SP-CP government led to a heavy defeat for Jospin. The hysteria about Le Pen led the Left parties to a disastrous electoral policy, with the enthusiastic backing of the sects. The decision of the leaders of the Left to back Chirac as the “lesser evil” was an act of great stupidity and myopia. The experience of the right wing Chirac-Raffarin government, with its attacks on living standards, will add further grist to the mill of Le Pen, paving the way for an even greater polarization to the right and to the left in France. To a greater or lesser extent, similar processes will open up in every European country. But the main tendency is to the Left, as we see in the latest elections.

The ruling class does not move to reaction lightly. It will only turn to Bonapartist reaction when it feels it is threatened with immediate overthrow, and as a last resort when all other options have been exhausted. It knows that such a move will provoke the working class and is therefore a risky throw. We are still a long way from such a situation. It will require a whole period of class struggle before we reach this stage. And long before the perspective of Bonapartist dictatorships in Europe is posed, the working class will have had many chances to take power. At the present time the pendulum is swinging to the left, not to the right, and much less in the direction of fascist reaction.

The recent mobilizations that have taken place all over Europe – from Spain to Austria, from Italy to Germany, from Portugal to France – represent the reawakening of the masses after a relatively long period of inactivity. And just as an athlete needs a period of warming-up exercises, so the workers need to stretch their limbs and test the ground. The present movement is only an anticipation – a preparation for more serious things to come. In some ways it lacks maturity. The demonstrations have, in part, a cheerful, good-natured atmosphere, like a carnival. That is always the case at the beginning of the revolution, before the masses have grasped the seriousness of the situation. In the future the mood will be altogether different.

In the massive demonstrations at the beginning of the Iraq war, the general idea was: “Look how many of us there are! Surely they cannot ignore this! Something must change!” But ignore it they did, and the war went ahead anyway. This fact led to the speedy demoralization of the petty bourgeois elements, who fell into a state of despondency and passivity. But the working class is slowly coming to understand that things are not so easy, that more serious methods of struggle will be necessary. They are coming to understand that in future, the only way to get concessions is through all-out struggle. Brief strikes and carnival rallies and parades are not enough.

The main problem is the subjective factor. With a half serious leadership the general strikes and demonstrations could have been the starting point for a counter-offensive of the labour movement. This is the only way to compel the bosses to give concessions. The ruling class will always give something if they fear they might lose everything. Serious reforms are usually the by-product of revolutionary struggles. That is why the reformist leaders are weakest precisely where they believe themselves to be strongest – in the fight for reforms.

In their reformist blindness they believe it is possible to gain concessions by negotiating pacts with the employers and showing themselves to be “responsible”. That gives the green light to the bosses to press on with their attacks. That is why the colossal strikes and demonstrations have gained almost nothing. The leaders threw away the possibility of winning even a partial victory. In fact, despite the organic incapacity of the reformist leaders, the impact of the mass movement that has developed in the last year and a half in Europe has been enormous. We have witnessed important changes in the political situation. In the case of Spain we have a very striking example of how the situation can be completely transformed in the space of 24 hours. This shows precisely how sudden and sharp changes are implicit in the situation.

The right wing PP seemed to be in complete control. This situation provoked perplexity and disorientation amongst a layer of activists and especially amongst the leadership of the traditional left-wing organisations who blamed the situation on an alleged “shift to the right of the working class”. In fact they had understood nothing. The inability of these reformist leaders to connect with the aspirations of the masses was in fact the main obstacle to them being able defeat the PP decisively on the electoral plane.

Despite the reformist leadership, the process of political radicalisation and social polarisation was developing beneath the surface. This burst dramatically to the surface after the terrorist attacks on March 11 which killed 200 workers. The working class and the youth correctly understood the political nature of this criminal attack and they blamed the PP for their involvement in the imperialist war. In a sudden change, hundreds of thousands of people came out onto the streets to protest against the terrorist attacks, against the imperialist war and, above all, against the campaign of lies and manoeuvres carried out by the government and the PP in the 48hour period after the terrorist attacks. Aznar tried to blame ETA for the massacre in order to secure an advantage in the elections. But the magnificent movement of the masses led to the electoral defeat of the PP on March 14 and the victory of the PSOE which won 11 million votes, beating the PP by more than one million votes.

The Spanish events demonstrated the colossal strength of the working class. This explains the defeat of the PP government and the withdrawal of Spanish troops from Iraq. The problem is that the working class does not find an adequate vehicle to express their aspirations to change society. The problem is the leadership of the mass organizations. The trade union and Labour leaders are the most conservative force on the planet. They are always looking backwards, not forwards, to the past, not the future. Though they consider themselves to be the greatest realists in the world, in fact they are ignorant and narrow-minded empiricists, completely out of step with reality. They hope that the past period of capitalist upswing will return – the good old days of compromise and class collaboration, which relieved them of the painful necessity of leading a struggle. But this is impossible. Their allegedly “realistic” policies guarantee defeat after defeat under present conditions. For every step back they make, the bosses will demand ten more. Such policies always led in the end to victories for the reaction. But under present conditions the electoral victories of the right wing will not be long lasting and will prepare the way for a further move to the left.

Growing inequality

This is a period of tremendous and growing polarization between rich and poor. There has been an unprecedented increase in inequality. The gap between rich and poor has become an abyss, and the gap between rich and poor countries has also increased dramatically. About half the population of the world lives on $2 a day, while on the other hand there is an obscene concentration of wealth and luxury in a few hands. In a period in which they are discussing the possibility of travelling to Mars, seven million children die each year from diseases linked to the lack of clean drinking water.

The whole planet has been torn apart by the rapacious greed of the multinationals. The living conditions of the masses in the so-called developing countries are not improving but deteriorating. This decline is not even halted by periods of boom. According to a recent report of the United Nations, during the 1990s, income per head fell in 54 “developing countries”. In the 1980s the Human Development Index – a summary of health, longevity, education and living standards – fell in four poor countries. In the 1990s, in the middle of a boom, it fell in 21 countries.

Sub-Saharan Africa is a nightmare in which barbarism is gripping one country after another. Here Lenin’s statement that “capitalism is horror without end” acquires its full force. Sierra Leone, Congo, Rwanda, Liberia – all have been the scene of terrible slaughter, mutilation and cannibalism. These horrible convulsions are an indication of the complete inability of capitalism to solve the problems of these peoples, despite the colossal mineral wealth they possess, or rather because of it. Rival groups of gangsters ally themselves with one or another state to lay their hands on the diamonds or other mineral wealth, and always the hand of one or other imperialist power or multinational company, is to be seen pulling the strings. In the civil war in the Congo alone, at least 4.5 million people have been slaughtered – mostly innocent villagers. A further quarter of a million people were killed in the civil wars in Liberia, Sierra Leone, Guinea and Cote d’Ivoire. Now we have the catastrophe of Darfur, destroying the lives of millions of poor people.

The AIDS epidemic in Africa is causing death and misery on a scale that is comparable with the Black Death in the Europe of the Middle Ages. Medicines exist that could provide considerable relief to these unfortunate people, but the greed of the big pharmaceutical companies prevents these medicines from being made available to the sufferers in poor countries at affordable prices. The bourgeois contemplate this ghastly ocean of human misery with supreme indifference. In any case, even if the medicines were made available at affordable prices, most of these people would die of hunger. Even in countries that have experienced some improvement, growth does not mean increasing living standards for the masses. Uganda’s GDP grew by 6per cent a year for the last ten years, but income per capita is less than $250 a year. However, the revolutionary potential of the working class was shown by the magnificent general strike in Nigeria last year. The working class could easily have taken power, but once again the union leaders acted as a block on the movement. They saved the ruling class, which then expressed its thanks by having them arrested.

The so-called aid provided by the imperialists is a joke in bad taste. It is insignificant, and is usually linked to profitable trade deals, often in arms. But these miserable amounts of “aid” are dwarfed by the vast amount of plunder that the imperialists extract from the so-called developing nations through unequal trade and interest on debts. The “aid” of the USA is barely 0.1per cent of its GDP, which is half the average aid of other countries, and compares to 0.9per cent donated by little Denmark. Even the tiny amount of aid paid by the USA is not really aid. A lot of it is food and is really a disguised subsidy to American farmers.

The polarization between rich and poor is not a geographical phenomenon, as the petit bourgeois groups in the western countries affirm. At the same time as they squeeze the life blood from the hungry millions in Asia, Africa and Latin America, the same giant corporations are intensifying the exploitation of the workers of their own countries. In 1970 the real annual compensation of the top hundred chief executives was (in today’s money) $1.3 million – 39 times the pay of the average worker. But in 2000, the figures had increased to $37.5 million – a thousand times more than the pay of the average worker. Never in history was the gap between workers and bosses so great. Never was so much power and wealth concentrated in the hands of so few.

World relations

The general crisis of capitalism expresses itself in the violent upheavals in world relations. All kinds of cracks and fissures are opening up in the institutions put together so carefully after 1945 to ensure the capitalist world order and the hegemony of the USA over its “allies”. In a few weeks in the run-up to the Iraq war, one after another, these international institutions were in crisis with every sign of breaking up: The UN, NATO, the EU, and G7 – all were rent by splits and dissention. At the same time, relations between Europe and America deteriorated to an all-time low. There was even an open split between the USA and Turkey, which had backed every US invasion since 1945 without question.

These are not secondary matters, not mere “corrections”, but represent a serious crisis in world relations – the most serious crisis since 1945. We may draw upon a geological analogy. Minor adjustments (“corrections”) take place in the earth’s crust all the time in response to the stresses that build up beneath the surface. But under certain circumstances these minor adjustments produce unusual and dramatic results. What began as a minor adjustment ends up as a dramatic change – an earthquake.

The fall of the USSR has produced a sudden and fundamental shift in the balance of forces on a world scale, resembling a seismic shift in the tectonic plates. And as in any such shift, earthquakes result. What we have witnessed in the period following the 11th September is the equivalent in diplomacy of an earthquake in geology. The general picture is one of convulsions and one explosion after another. This reflects the impasse of capitalism on a world scale. It is expressed by a ferocious struggle for markets, raw materials and spheres of influence, resulting in one war and diplomatic crisis after another.

Like the earth’s crust, the fabric of world politics and world economy is quite a fragile mechanism, subject to cataclysms. That is why the method of empiricism that tries to base itself on what is immediately known, or is familiar to us on the basis of previous experience, is hopelessly inadequate to interpret such complex and contradictory phenomena. In order to understand recent events on a world scale, it is not enough to take note of this or that twist or accidental phenomenon. It is necessary to see the underlying processes and to lay bare their inner contradictions and fundamental tendencies.

It is generally assumed that the global situation, economic, diplomatic and military, is more or less fixed, and that it always tends towards equilibrium. There is some truth in this, but this “equilibrium” is constantly being disturbed. The conduct of US imperialism at the present time resembles the period of its first great imperialist expansion at the end of the 19th century, when it first flexed its muscles in the war with Spain over Cuba, the seizure of the Philippines and Puerto Rico etc. This new policy is reminiscent of the imperialism of Theodore Roosevelt and the first period of American expansion, when the USA organised provocations like the sinking of the Maine to justify its armed intervention in Cuba in 1898.

The real intention at that time was to drive Spain out of the western hemisphere and seize its colonies. The difference is that at that time it was a young imperialism, struggling to assert itself on a world scale, challenging the old established powers of Britain, France and Germany. Now US imperialism is doing the same thing all over the terrestrial globe, seizing territory, raw materials and spheres of interest at the expense of its rivals. It is confronting France in particular, but it is also clashing with Germany and challenging Russia. After the collapse of the USSR, the USA has established itself as the dominant world power and the sole super-power. This is a major factor in the general instability.

America is leading the world in the new arms race. US defence spending is expected to increase by nearly $700 billion more than was assumed in Bush’s budget projections. These are truly staggering amounts of money that, if put to productive use, would be enough to transform the lives of the peoples of the world. Instead, they are being used for the purpose of killing large numbers of people and wrecking and destroying the means of production. This is a further expression of the general crisis of capitalism and its terminally sick character.

The contradictions between the imperialist powers have been exacerbated in the extreme. America is intervening everywhere: in Iraq, Afghanistan, Palestine, Iran, North Korea, Colombia, Venezuela and elsewhere. It is challenging France in the Middle East and Africa. Bush went on a tour of Africa, where he visited Senegal – a satellite of France, and Nigeria (where there are large reserves of oil), as well as Botswana and Uganda. Other imperialist powers are interfering in Africa: Britain in Sierra Leone and France in Cote d’Ivoire and the Congo. In a situation of economic crisis, it is necessary to grab even the smallest markets.

In such a situation, organizations like the United Nations can play no role. We have explained many times that the UN, even in the last period, was only a forum where the main imperialist powers and the Moscow bureaucracy could settle secondary matters. All serious matters were settled by the traditional means – that is, war. That was the case with Korea, which ended as a draw, and Vietnam, where the USA suffered its first defeat in a war. Israel has systematically ignored the resolutions of the UN, and so on. The left reformists do not understand this. They imagine it is possible to abolish wars and eliminate national antagonisms through an international organism (a “world parliament”) without abolishing capitalism.

This is an even more absurd illusion than the reformists’ dream of abolishing the class struggle and arriving at a reasonable agreement between workers and capitalists. The problem is, as Hegel explained long ago, that it is not reason that dictates the conduct of nations, but interests. This is as true in foreign policy as in domestic policy, and the one thing is only the continuation of the other. The foreign and domestic policies of the Bush administration are dictated by the voracious and insatiable appetite of the big US corporations for surplus value. The colossal power of US imperialism means that it can, and does, tear up any treaties and agreements that do not suit its interests.

Now even the minor role that was played by the UN in the past is denied to the Security Council. Far from eliminating or lessening the antagonisms between states and thus preventing wars, it is the scene of fierce conflicts between the rival imperialist powers of the USA, Britain, Germany, France, and now also Russia. As if to mock the pathetic appeals of the reformists, the UN displayed its complete impotence over the war in Iraq. The American imperialists and their British puppets merely ignored the Security Council when they were unable to obtain a majority in their favour.

This announces a new and stormy period in world relations. Just as in the relations between the classes the capitalists have thrown aside the veil of reformism and class collaboration to reveal the ugly and rapacious face of class war, so in international relations, they have dispensed with the services of the UN and torn up one pact and agreement after another. In particular, the US imperialists resort to war, not as a last resort, but as an almost automatic reaction. In place of the old, polished diplomacy of the Europeans (which in any case was just a fig-leaf to disguise their own aggressive policies) the Bush administration has adopted a crude and blatant stance that defies world opinion and admits no mediation. Its watchword is: Might is Right.

America has seized control of Russia’s old spheres of influence in Eastern Europe and the Balkans – in the latter case through a war that was deliberately provoked with the intention of removing Milosevic from power. The arguments about democracy, humanitarianism and self-determination for the Kosovar Albanians were only a smoke screen, a fairy story fit only for little children and sectarians who have never been noted for their capacity to think. The result has been endless misery, death and chaos for the people, and the consolidation of the grip of US imperialism in the Balkans. However, here we see already the limits of the power of imperialism.

Nothing has been resolved by the US intervention in the Balkans. As we predicted, there is chaos with the potential for new wars and ethnic conflicts. The reactionary nationalists in Kosovo and Macedonia have embarked on a campaign for a “Greater Albania”. This is a finished recipe for new wars and upheavals in the Balkans. The imperialists now belatedly realise they have burnt their fingers. One British brigadier in Macedonia describes the Aksh [the Albanian National Army active among the Albanian speaking minority in Macedonia, better known by its Albanian-language initials, AKSh] as “criminals flying a political flag of convenience in the hope of finding legitimacy.” This is a fairly accurate description, but it is a little late to lament the results of the imperialist intervention in Yugoslavia, which encouraged and supported these elements. We also recall that these so-called “freedom fighters”, who are linked not only to right wing reaction but also to organized international crime, were enthusiastically backed by the sects.

This is typical of the mess one gets into when one abandons a class position on the national question. The break-up of Yugoslavia was a reactionary development that acted against the interests of all the peoples. It was a crime with not a single atom of progressive content. Yet this crime was defended by the sects, allegedly on the grounds of “self-determination”.

The Russian ruling clique has looked on helplessly as the USA has occupied one country after another that had belonged to the Soviet Bloc. The Russian generals have gritted their teeth while NATO expanded up to the borders of Russia. This weakness is a sign of the rottenness of the Russian bourgeoisie. US forces have even been installed in the Caucuses. In the days of the USSR such a thing would have been inconceivable. Now they are puffed up with arrogance. The so-called “bloodless revolution in Georgia” is yet another example of US imperialism expanding its influence in Russia’s former satellites.

They are behaving in a similar way to the past, when they seized control of parts of the collapsed Chinese empire. After the war in Afghanistan the Americans have been systematically installing themselves in Central Asia, getting control of oil supplies, building pipelines, establishing bases. This will have very far-reaching consequences in the future. The long-term strategic goal of US imperialism has always been to conquer Asia. That was the case ever since they seized the Philippines over a century ago. But the situation is not the same as it was in the past, when China was weak and defenceless. Then the attempt to dominate China led to the Pacific War with Japan. Now China itself has become a major power in Asia, both economically and militarily. The launching of a Chinese space satellite announces to the world that China considers herself to be one of the great powers.

To paraphrase Napoleon, once Asia with its teaming millions and vast resources is shaken out of its age-old slumber, the world will tremble. The Pacific basin, which geographically includes both the West Coast of the USA, Japan and Russia, is clearly destined to emerge as the centre of events in the 21st century. It will play the same role that was played by the Atlantic in the 20th century and the Mediterranean in the ancient world. The productive potential of Asia is immense. We already had a glimpse of this potential with the spectacular advance of the Asian “tigers” in the 1980s and first half of the 1990s. In the future, on the basis of a socialist plan of production that will unite the economies of the whole region on a rational basis, the sky will be the limit.

However, on a capitalist basis, the emergence of powerful economies in Asia will not lead to peace and prosperity but new dangers for humanity. New fault lines will develop, especially in Asia. The coming centre of world history will be the scene of new conflicts and wars. The way in which Bush and the other bandits in the White House have been bullying North Korea, using the excuse of nuclear weapons, is a further indication of its willingness to meddle in Asian affairs, alleging a threat to its national interests. But despite all the puffing and blowing, they do not dare to attack North Korea as they attacked Iraq, since it has a powerful army and missiles capable of delivering a devastating response.

Despite the present apparent détente with China, the USA will inevitably come into collision with China in the future. The present frictions over trade are an anticipation of this. The present situation of a world dominated by a single great power will not last forever. It is leading, paradoxically, to a greater fragmentation of the world, both politically and economically. Out of this chaos will emerge new power blocs and alliances, the main purpose of which will be to contain and confront America. China will play a key role in this, challenging America for the role of the leader of Asia. The logic of events dictates that China and Russia, and possibly India, will come together in the future in a bloc against the USA in Asia.