Prospects for the world revolution - Part Three

(See part one - two - four)

Introduction

In the third part of the document we deal with some of the problems peculiar to the ex-colonial world. Because of the delay in the proletarian revolution in the west and the absense of a genuine Leninist party and leadership, the revolution in the ex-colonial world has in the past assumed a distorted form (proletarian Bonapartism). However, with the developing Revolution in Argentina, Venezuela and other countries, the leading role of the proletariat is on the order of the day.

The Revolution in Asia, Africa and Latin America

The last period saw the crisis of proletarian Bonapartist regimes. Mozambique and Angola were wrecked by South Africa which backed and armed bandits. Afghanistan did not even succeed in establishing a stable state before it was engulfed in a reactionary guerrilla war. In Ethiopia, the regime was destroyed by its failure to solve the national question. Now Cuba, deprived of Russian subsidies, is hanging by a thread.

The struggle against imperialism cannot be understood unless it is linked to the processes in the advanced capitalist countries. It is the delay in the revolution in the West which has created the strange aberrations in the ex-colonial countries - such as fundamentalism and proletarian Bonapartism (deformed workers' states). A deep crisis is being prepared everywhere, which will have revolutionary consequences. However, the central question is the subjective factor. If the working class does not succeed in taking power under the leadership of a Marxist party, all kinds of peculiar and monstrous distortions are possible.

Is it possible that there can be new regimes of proletarian Bonapartism? After the fall of the Soviet Union there is no model in the old sense. That is an important point, but in itself it is not decisive. The model is the past experience of "socialism" in the USSR and China, which can still be attractive for the leaders of guerrilla movements in Latin America, for example. More importantly, there is Cuba, China and Vietnam.

Theoretically, it could not be excluded that new proletarian bonapartist states will emerge in the next period. It depends on circumstances. Especially in the event of a slump, there can be a movement in the direction of proletarian Bonapartism in certain countries. The American imperialists are concerned about this, and they are right. Of course, we are not talking about countries like Argentina and Brazil, where there is a powerful working class. But in more backward countries like Colombia it is a possibility.

In the case of Venezuela, if a genuine revolutionary party and leadership had existed, the working class could have taken power after the movement towards reaction had been defeated by the uprising of the masses. But such a leadership did not exist. If Chavez had been a Marxist, and not a utopian reformist, power would have passed painlessly into the hands of the workers, without a civil war. But the opportunity has been lost: the initiative has passed to the bourgeois counterrevolution, aided and encouraged by US imperialism. New coup attempts are inevitable, which may end in bourgeois Bonapartism with an extremely repressive character. This perspective depends on the outcome of the class struggle, which is difficult to predict in advance. The masses are roused and ready to fight. But the subjective factor remains decisive. Although Chavez is an admirer of Castro, he did not do what the latter did in 1960, when he leaned on the working class to strike blows against imperialism and capitalism, expropriating the Cuban capitalists and establishing a regime of proletarian Bonapartism.

However, such a development was entirely possible and may take place in the future in countries like Venezuela, Colombia, Peru or Ecuador. We must be prepared for such developments, which arise, on the one hand, from the impasse of the capitalist system, which assumes a particularly acute form in the underdeveloped capitalist countries, and on the other hand, from the weakness or the absence of the subjective factor (the party and the leadership) and the delay of the socialist revolution in the advanced capitalist countries.

This would not be socialism, but a deformed workers' state, a regime of proletarian Bonapartism. We would have to give it critical support against imperialism, since it would be progressive in relation to capitalism - as China and Cuba were. But we would have to explain that it had nothing in common with socialism. Our main task is to explain the leading role of the proletariat, as the only class that can bring about the socialist transformation of society.

One of the main weaknesses of the Stalinist and other petty bourgeois guerrillaist movements is their national limitedness and lack of an internationalist perspective. The idea of socialism in one country is now exposed as a reactionary utopia. The Stalinist bureaucracy in Russia had the delusion of “building socialism” in a backward country, cut off from the world economy. This led to the monstrous totalitarian degeneration of the regime, and in the end to capitalist restoration. The same was true of China. If gigantic countries like Russia And China could not solve their problems in this way, how could small and weak economies like Colombia or Venezuela, or even Argentina or Brazil?

The revolutions in El Salvador and Nicaragua had the potential to end as healthy workers' states, but they were hijacked by the guerrillaists who led them into a blind alley. But even if they had ended as healthy workers' states, they could never have succeeded in solving the problems of the masses within their own frontiers. Only by spreading the revolution, first to the whole of Central America and then to the rest of Latin America, could they have begun to solve the problem.

It is impossible to solve the problems of Latin America, or even Central America, without an internationalist perspective. Even if the guerrillas take power and establish new proletarian bonapartist states, it would solve very little. The crushing weight of the world economy in the present epoch rules this out. The narrow nationalism of the petty bourgeois guerrilla leaders runs counter to the objective demands of the economies of these countries which are too weak to offer a solution.

Because of the weakness of the forces of Marxism, it is possible that there will be a revival of the ideas of guerrillaism. This is inevitable if the guerrillas come to power in Colombia. The sects with their usual empiricism and lack of principle, will give uncritical support and spread illusions among the students. This can do a lot of damage especially in Latin America. This is a bad thing and will complicate matters for a time.

If the revolution in Latin America had developed on a Marxist basis, the process would have taken an entirely different road. Instead, it was diverted along the road of guerrillaism, thanks to the influence of petty bourgeois elements, aided and abetted by the so-called Trotskyists like Mandel. Therefore it is essential that genuine Marxists take an implacable stand on guerrillaism and terrorism or "urban guerrillaism" - which is a contradiction in terms and means individual terrorism under a different name. An indication of the potential for a classical revolutionary process even in countries where the peasantry represents a big percentage of the population was the Ecuadorean revolution.

We must be prepared for a new resurgence of guerrillaist tendencies in Latin America and other parts of the world. We must explain the limitations of these petty bourgeois movements and counterpose the revolutionary movement of the proletariat and the goal of a workers' democracy and a socialist federation of Central and South America, as a first step towards the socialist world federation as the only solution. The Mexican comrades have done excellent work in this respect, combating the nonsensical ideas of the Zapatistas. It is necessary to draw out the real lessons of history which are a closed book for these people.

The revolution in the former colonial countries can give a tremendous impetus to the socialist revolution in Europe, north America and Japan, especially if it takes a classical form, under the leadership of the working class and the proletariat. This is entirely possible in countries like Argentina and Brazil with their powerful proletariat. Given proper leadership, there is no reason why the working class of these countries should not take power into its hands on the lines of 1917. This would transform the entire situation.

The main factor is the colossal degeneration of Stalinism and the weakness of the subjective factor. The real reason is the weakness of genuine Marxism, and the absence of a model in the form of a classical proletarian revolution like the October revolution. The Stalinist theory of two stages has failed everywhere, and led to terrible disasters. However, just one success would transform the whole situation. A healthy workers' revolution in Pakistan, for example, would cut across the tendency towards proletarian Bonapartism. Above all, the marvellous movement of the Argentine workers places on the agenda the possibility of a classical proletarian revolution in a developed country which would transform the entire situation in South and North America and on a world scale.

A global crisis of capitalism

The main fear of the bourgeois is that the crisis is unfolding simultaneously in every sector of the world economy. The word "contagion" is being used to describe this phenomenon. This is the other face of globalisation. In economics, as in politics, US imperialism is faced with the equivalent of bushfires everywhere. No sooner do they put out one fire, than another one flares up with even greater intensity. This is in itself a graphic expression of the nature of the present epoch.

The crisis in Argentina did not originate there. It reflects the global instability of world capitalism. The collapse in Turkey at the start of 2001 immediately affected the Polish zloty and the Brazilian real, which suffered a devaluation of about 30 percent in the course of the year. This placed unbearable pressure on Argentina, its most important trading partner, whose exports were rendered completely uncompetitive.

Since the Argentinean peso was tied to the US dollar, devaluation was (theoretically) ruled out. Thus, the whole weight of the crisis was placed firmly on the shoulders of the Argentinean workers and the middle class. This had serious social and political repercussions. There had already been a number of militant general strikes in the course of 2001. There was a massive protest vote in the general elections, and even an insurrection in the northern town of General Mosconi where the unemployed and the workers took the running of all public affairs into their own hands.

This was causing concern in Washington, where the IMF initially provided funds to help to prop up the Argentinean economy. But now events have moved far beyond that. The decision to introduce dramatic bank controls led to a run on the banks. In one day the country's banks lost $1.3 billion. The central bank's net reserves slumped by $1.7 billion. Overnight, the country, which was one of the richest in the world, was bankrupted. Finance minister Domingo Cavallo once more went with his begging bowl to the IMF but was received in Washington with stony faces. The IMF, having already provided Argentina loan arrangements amounting to $48 billion in the last year, had no intention of throwing good money after bad. Argentina was left to sink under the weight of its own debts.

The Argentine revolution can have serious effects throughout Latin America, and on a world scale. The crisis in Argentina has already sent tremors through the international markets. Markets across the world are watching to see whether the crisis would have a domino effect in other economies in Latin America and further afield.

This can be seen clearly in the mass revolutionary movements which have already taken place in a number of countries in the last few years, for example: Indonesia 1998, the Ecuadorian revolutions of 2000 and 2001, the movement against water privatisation in Cochabamba, Bolivia, in 2000, the uprising in General Mosconi, Argentina, in 2001, and the heroic Algerian insurrection. A common feature in most of these movements have been the setting up of popular committees representing the different sections of the oppressed which have challenged state power and started to replace it.

In the case of the Ecuadorian revolution, the People's Parliaments won over a section of the Army to their side (including some officers) and actually took power for a few hours. Only the lack of leadership prevented the extension and generalisation of this movement and thus frustrated the revolution. Now the revolution has burst out again - but this time in the second biggest economy in Latin America. The size of the Argentine proletariat and its militant traditions means that the class balance of forces is qualitatively different to that in Ecuador or Peru. Argentina is now the key to the revolution in all Latin America.

The Argentinean working class is the most powerful in Latin America after the Brazilian working class. It has a tremendous revolutionary tradition. Armed with a real revolutionary programme, it could easily take power and commence the socialist transformation of society. Such a development would instantly transform the situation in the whole of Latin America. It would have an even greater effect than the Bolshevik revolution in 1917. Its repercussions would be felt in the USA, and on a world scale. Instead of preparing new military interventions against the peoples of Asia, Africa and Latin America, but would be faced with revolutions everywhere. Only a radical reconstruction of society from top to bottom can show a way out of the impasse.

Argentina - The revolution has begun

The events of last December are a warning of what will happen in one country after another in the coming period. The Argentine revolution is a complete answer to all the faint-hearts, cowards, sceptics and cynics who doubted the ability of the working people to change society. It deserves the most careful study by all workers. It is a laboratory of revolution - or of counter-revolution.

The revolution began with the overthrow of the government of Fernando de la Rua was forced to resign after thousands of angry and impoverished protesters took to the streets of Buenos Aires. This was the first stage of the revolution. It reflects the deep crisis that has engulfed Argentina, but which affects the whole of Latin America.

At bottom, the problem of the Argentinean ruling class is the colossal power of the proletariat, which prevents them from carrying out the vicious austerity policies dictated by the IMF to the end. The potential power of the masses was immediately revealed in the December days. Neither the declaration of a state of emergency, nor the bullets and tear gas of the police served to intimidate the masses. United in action, they developed a sense of their own collective might. Power was slipping out of the hands of the state and passing to the streets.

This was a movement that included every section of the oppressed layers of society: not just the workers, but the unemployed and the middle class also. This fact has led some to question the class basis of the movement and to deny the role of the proletariat. But this is to misunderstand the dynamics of the Argentine revolution. The seriousness of the crisis - which has ruined large numbers of small business people and pensioners - has aroused the broadest layers of the masses to struggle and awakened even the most backward and formerly inert layers. This is both a strength and a weakness. The presence of other classes in the movement obscures its real character. But only under the leadership of the proletariat can the movement triumph.

The revolution that began with the popular uprising last December is continuing. All the efforts of the ruling class and the regime to control it have failed. With every passing day the mass movement grows in strength and sweep. Argentina has decisively entered the road of revolution. Over the next months and years, the central contradiction will have to be resolved. The present "transitional" regime will solve none of the fundamental problems, but only lend them a more feverish and explosive character.

The masses are seeking a way out of the crisis through direct action. Strikes, demonstrations, "cacerolazos", factory occupations and road blocks are occurring on an almost daily bases. In the school of direct action the masses are discovering their strength and the power of collective action. It is like the warming-up exercises of an athlete who is summoning up all his strength for the final test of strength and will power. However, the decisive test has not yet arrived.

The highest expression of the movement is the popular assemblies, the local and factory committees, the organisations of the "piqueteros" and other forms of the self-organisation of the masses. An important step forward was the convening of the national assembly of workers in February. This gave an opportunity for the representatives of different regions, districts and factories to understand the need for co-ordinated action on a national scale, and to debate the slogans and tactics of the struggle and lay down the priorities for the immediate period. The ruling class have grasped the real significance of the popular assemblies and the other forms of popular power. They are embryonic soviets.

The depth of the crisis, which threatens a large section of the middle class with ruin, has given the movement its massive character. This is at the same time both a strength and a weakness. The explosion of anger among the middle class and other non-proletarian elements deprives the ruling class of its mass base and cuts the ground from beneath the feet of the reaction, which TEMPORARILY has been taken off balance and paralysed. This creates an exceptionally favourable class balance of forces. But this situation cannot last. If the working class does not take power into its hands and show the middle class a way out along revolutionary lines, the mood of the middle class can change and the initiative can pas to the reaction.

The main weakness of the situation is the lack of a generalised movement of the working class. The majority of the organised workers are under the control of the official (Peronist) CGT. The union bureaucracy is doing everything in its power to hold the workers back. The CGT apparatus has considerable power and huge resources. It has the backing of the bourgeoisie and the state. In fact, the Argentine bourgeoisie could not maintain its rule for 24 hours without their support.

The class struggle in Argentina is posed in the starkest terms. Already there are rumours of a conspiracy and coups in the ruling class. There can be absolutely no doubt that this is the case. The representatives of big business, the bankers, the tops of the army, the reactionary circles of the Church - all will be conspiring to destroy the revolution.

But the problem for the ruling class is that conditions do not favour such a move - yet. The movement is still in the ascent. Its forces are intact and undefeated. The middle class is full of hatred and resentment against the big bankers and capitalists and their backers in Washington. Any attempt to use violence to crush the movement at this stage would have the opposite effect. Just one bloody clash, and the whole country would erupt.

The ruling class is therefore obliged to play a waiting game. They will wait until the movement begins to show signs of exhaustion. This is inevitable at a certain stage, if the masses do not see a clear perspective of a way out of the present mess. The crisis is getting deeper every day, with more sackings, factory closures, rising prices and falling living standards. The political crisis is only a superficial and tardy reflection of the depth of the economic crisis - a crisis that cannot be solved on a capitalist basis, unless by an even more savage reduction of living standards. But this can only be achieved by first breaking the resistance of the working class. In the Argentine context, that means all-out class war, which must be fought to the finish.

The revolution in Argentina can develop over a period of months, if not years, before a decisive settlement is reached - one way or the other. There will be periods of ebbs and flows, of tiredness, of defeats, and even reaction, which can provoke new outbreaks. But sooner or later, the question of power will be posed, and must be solved. Either a dictatorship of Capital or the dictatorship of the proletariat. There can be no third way.

Russia

Russia remains a key country for the world revolution. The prolongation of the world boom and the delay of the movement of the Russian proletariat have meant that market relations have crystallised and the restoration of capitalism has taken place.

We have to admit that things have not turned out as we expected a few years ago. We did not expect that the crisis of world capitalism would be postponed for as long as it has been. This has given Russian capitalism sufficient time to establish itself. The movement towards capitalism has lasted for ten years. The new productive system and its property relations have had time to penetrate the consciousness of the masses. This process has lasted much longer than we expected. The main responsibility lies with the Stalinists who have capitulated on everything.

Six years ago the process of privatisation was not yet complete, and it was still possible for it to be reversed. This is now no longer the case. The decisive sectors of the economy are in private hands. Large sections of the former nomenclature have a vested interest in maintaining this position. Moreover, it has created a mass base in the petty bourgeois layers of the population, especially in Moscow and Saint Petersburg. Therefore, to undo the situation will require a social revolution.

Ten years is sufficient time to judge. We have to say that the Rubicon has now been passed. The movement towards capitalism has been contradictory, with many cross-currents, but after every crisis the process has continued with renewed force. The last crisis was in 1998, when the economy collapsed. This was a decisive turning-point. Up to this point, Russian capitalism had proved incapable of developing the productive forces. The economy experienced the biggest collapse of any economy in peacetime. As we predicted, the abolition of the state monopoly of foreign trade was a disaster for Russia. Russian industry was decimated by a flood of cheap foreign imports. The result was the collapse of the Summer of 1998.

The economic situation - especially since the crisis of 1998 - has played a very important role. The collapse of the Russian economy at that time was the last possibility to turn the clock back. There was a strong reaction against the market economy, and even large sections of the petty bourgeoisie in Moscow and Saint Petersburg had lost their jobs and were criticising the system. The "reformers" were demoralised and on the defensive. But the subjective factor was decisive. The so-called Communist Party made no attempt to support re-nationalisation. We over-estimated the strength of the wing of the bureaucracy which wanted to return to a centralised, nationalised economy and underestimated the rottenness and degeneration of the Stalinists.

If the “Communist Party” had wanted to lead a movement back to a nationalised planned economy, this was the moment to do so. But the ex-Stalinist leaders of the CPRF are terrified of any movement of the working class. They have shown themselves to be incapable even of fighting for a return to the system of Brezhnev, which most of their supporters would probably support. They have made their peace with capitalism.

The other decisive element in the situation has been the absence of a movement of the masses. Three generations of Stalinism has had an effect on the consciousness of the working class. The composition of the class has also changed. Millions of peasants entered the factories in the 1930s and 40s. The old generation which had experienced the October revolution was diluted to some extent. The active layer was entirely decimated. Those who survived the years of war, revolution and civil war, were exterminated by Stalin.

Stalin succeeded better than he could have expected in destroying the last vestiges of the real tradition of Bolshevism. The new generation has no understanding of the ideas of Lenin. There is general disorientation. The masses are discontented but lack a revolutionary perspective. This has enabled the nascent bourgeoisie to consolidate its hold on power. The process of privatisation has been completed. We must now take stock of the position and draw the necessary conclusions.

As long as the economy was in a state of collapse, the future of the system was not guaranteed. But no economy can be in a permanent state of collapse. Either the capitalist property relations would be overthrown, or else, at a certain point, the economy would eventually find a point of equilibrium and begin to grow. This occurred in a very peculiar way, as the result of a crisis. The steep devaluation of the rouble and the rising price of oil created the conditions for a partial revival of the Russian economy. The initiative passed again to the "reformers".

The transition towards capitalism has been developing at different tempos and with different success rates throughout Eastern Europe and the other ex-Soviet Republics. Countries such as Poland and Hungary had obviously achieved a successful transition earlier than most of the other ex-Stalinist regimes. This was aided both by their geographic position (proximity to Germany and the EU) and by the extension of the boom in the West. However, other regimes such as the Serbian and Romanian, have not had the same degree of success in developing a viable capitalist economy. The fate of these regimes is inextricably linked to developments on a world scale, and especially to what happens in Russia. A reversal of the process in Russia would have had an immediate effect in slowing down the transition and even in reversing it in these countries. The consolidation of capitalism in Russia will have the effect of strengthening the hold of the pro-capitalists in these countries also.

The decisive sections of the bureaucracy in Russia and Eastern Europe have gone over to capitalism. That includes not just the managerial section and those who have become billionaires, but also the majority of the tops of the army, the police and the state bureaucracy. This is a devastating comment on the rottenness of the Stalinist bureaucracy. Compared to this, the betrayal of the leaders of the Social Democracy in 1914 was child's play.

Putin, a bourgeois bonapartist

Despite everything, the roots of Russian capitalism remain shallow. The Russian bourgeoisie is corrupt and rotten. The relative stability which has been established as a result of the relative economic stabilisation in the last two years, is still fragile and will not last long. The reduction of unemployment will strengthen the working class. It will halt the process of lumpenisation that had affected a layer of the youth. This is a positive development from our point of view.

The regime is based on the temporary inertia of the masses. But this cannot last. A new outbreak of the class struggle in Russia is inevitable at a certain stage. The economic growth has not meant that the problems of the working class are solved. There has been an increase in inflation as a result of devaluation. The government is introducing new legislation to attack living standards, for example in relation to housing and taxation. This has set the stage for a revival of the working class, in the form of the economic struggle.

Putin is a bourgeois bonapartist who seeks to consolidate the market economy. He has acted against individual tycoons (Guzinsky, Berezovsky), but only in order to strengthen capitalism by limiting the unbridled looting and corruption of the Yeltsin period, and at the same time to eliminate all opposition and strengthen his own position.

Putin has restricted democratic rights through the law on trade unions (Kzot) and the law on political parties. He has brought the media under his control, and concentrated power into his own hands to an even greater degree than Yeltsin. He would like to rule by decree, but has not yet reached that stage. He still has to conciliate different groups within the bureaucracy and the bourgeoisie. More importantly, he could come into collision with the working class.

In order to institute a real bourgeois bonapartist regime, Putin would need the backing of the army. But this is not so simple. The upper layers of the army are pro-bourgeois and just as corrupt as the bourgeoisie itself. But the lower echelons are discontented and badly organised. The Russian army would not be a reliable instrument of repression against the workers. a serious clash could end in an Albanian variant. But Russia is not Albania. Such a situation could easily end in the working class taking power. Therefore, Putin has to proceed cautiously.

Despite the economic recovery - which will not last - most of Russia remains a picture of sordidness and misery. This is especially the case in the provinces. The rising inflation will make things worse still for millions of people. Now Putin is moving to privatise the land. If he succeeds, he will press on with the reform of state-owned housing and heating. But this can provoke massive opposition.

Russia and America

Putin appears as the Russian strong man, but in reality he is a pigmy, just as short-sighted as Yeltsin, if not more so. This is shown clearly in the field of foreign policy. Russia is still a superpower. In absolute terms she has overtaken Germany. Yet the Russians do not appear as an independent force on a world scale. In international affairs, Putin is attempting to conciliate the American imperialists, in the hope of getting economic concessions, which he may or may not succeed in doing. Sooner or later, however, Russia will come into conflict with America because their interests are antagonistic, above all in Central Asia and the Caucasus, where both sides want to control the oil and natural gas.

Bush and Putin now appear as "good friends" - which is very short-sighted from Russia's point of view because in practice there is a sharp division of interests between Russia and America on a world scale. Despite all the nice words, the Americans will not hesitate to undermine Russia in Eastern Europe and in Asia. Russia had an interest in helping America to overthrow the Taliban, but no interest in letting US imperialism dominate Afghanistan or strengthen its position in Central Asia. Sooner or later, this trend will have to be reversed. Behind all the smiles and handshakes, there are powerful conflicts of interest between Russia and America on a world scale which must come to the surface. Putin's conciliatory policy will be discredited, and may even lead to his removal at a certain stage.

In Chechnya, Russia continues to pursue an imperialist war, with no end in sight. The lamentable showing of the Russian army is a symptom of the shocking corruption and degeneration of Russian capitalism. Trotsky explains that the army is always a reflection of society. The Soviet army was able to defeat Hitler and conquer a quarter of Europe. Now the Russian army cannot even subdue the Chechens.

An unstable regime

Despite its apparent successes, the present regime is quite unstable. Its successes are the result, not of internal strength, but of the lack of a serious opposition. The future for Russian capitalism is not rosy. Russian capitalism begins as monopoly capitalism, and monopolies always have a tendency to fix prices. But these big monopoly groups are an argument in favour of nationalisation. The rule of capital will become intolerable to the people.

Around 40 percent of Russian businesses make a loss (The Economist, 1/12/01). This is after the two best years in the history of the last two decades. Imports are again rising rapidly, as the effects of the devaluation wear off. If we leave aside raw materials like oil and gas, exports are still very few. Most Russian industry is not capable of competing on world markets. Machinery is on average 16 years old and wearing out. Management is mostly primitive and corrupt. Billions of dollars have been stolen.

The decisive question is Russia's relation to the world economy. It was the development of the world market that spelled doom for the Russian Bureaucracy. Now Russia is participating on world markets to an unparalleled degree. But this means that it will be hit hard by the next slump. This will throw everything back into the melting pot. Particularly a fall in the price of oil on world markets will have a serious effect. By meshing Russia ever more firmly to the world economy, they are preparing new disasters. The world crisis of capitalism will have a big effect on Russia, which will shake everything up again. In the long run, it will become clear that some kind of a plan will be necessary to hold Russia together. The demand for a return to a planned economy will gather strength to the degree that the crisis bites and reduces Russia once more to chaos.

Already there are clear indications that the growth of the economy as a result of devaluation and high oil prices has reached its limits. Analysts predict growth of between 3 and 4 per cent in 2002, down from 5.1 per cent in 2001 and 9 per cent in 2000. This is partly because high inflation - 18.6 per cent last year - has pushed up the exchange rate of the rouble. The effects of the 1998 devaluation are now wearing off. By the spring of 2002 that Russian industry had already lost about three-quarters of the cost advantages it had gained from the crash of the currency. On the other hand, capital investment - the real lifeblood of the capitalist economy - remains stubbornly low. The figures for recent months have shown investment to be weakening sharply - from 10.5 per cent year-on-year growth in December 2001 to 7 per cent in January and 4 per cent in February 2002. This is the Achilles' heel of Russian capitalism. On the other hand, inflation is rising. The conditions are beginning to mature for an upswing of the economic struggle.

At present, the masses seem apathetic and indifferent to politics. This is hardly surprising. Decades of Stalinist totalitarianism has thrown the consciousness of the working class back. At present the workers see no alternative. The youth are confused and alienated. The heritage of Stalinism has had a profound psychological effect, especially in the younger generation. The CPRF has a pro-capitalist policy. It has capitulated all along the line. The same is true of the leadership of the FNPR. Thus, there is no real opposition. But this will not last. The unbearable contradictions produced by capitalism will force the working class into struggle time and time again. Ten years ago there were some illusions in capitalism even among workers. No more. On the basis of experience, the workers have understood that privatisation is theft and on the basis of so-called market economics, no way out is possible. Eventually, the working class will begin to draw revolutionary conclusions. In the course of the class struggle, the young generation will rediscover the real traditions of the Russian working class - the traditions of 1905 and 1917, the soviets, Bolshevism.

Because of the weakness of the subjective factor, this will take time. A swift resolution of the contradictions is not possible. The struggle will proceed over a number of years, with ebbs and flows. But the situation remains potentially explosive. We must be prepared for sudden and sharp changes also in Russia. The main problem is the lack of perspectives and preparedness of the Russian working class. But that can change quickly. Once the log-jam is removed, things can move quickly. Within the next ten years we could be facing a new Russian October that will transform the world.

The Russian working class has a different history and tradition to that of the proletariat in the West. Its consciousness has been shaped by the experience of the October revolution and a nationalised planned economy. It therefore considers privatisation to be theft, and the nationalised means of production as a natural alternative.

The main thing is to build the subjective factor. At present the forces of Marxism are weak. But there are possibilities. All the Stalinist parties are in crisis. The ideas of Trotskyism are arousing a growing interest in the ranks of the CPs and in the youth. Our paper is well known among the activists. Our web site has been a big success. These are important conquests which we can build on.

The task of Marxists is, as Lenin said, to "patiently explain". We must patiently explain the programme, policies and theory of genuine Marxism-Leninism (Trotskyism). We must win over the advanced guard of the workers' and Communist movement to the programme of genuine Marxism. In all the Communist Parties, there is discontent with the Stalinist leadership, and the best elements are looking for an alternative. There is a growing interest in the ideas of Trotskyism.

Eastern Europe

Eastern Europe - or at least the most developed parts of it - Poland, Hungary and the Czech Republic - moved towards capitalism faster than Russia. East Germany was a special case, since here the counter-revolution was carried out by means of its absorption into West Germany. In effect, the others have also become satellites of Germany. No fewer than 27 countries (28 if Montenegro splits away from Yugoslavia; 29 or 30 if Kosovo and Chechnya are included) have emerged out of the eight that previously existed.

The imperialists have encouraged this tendency in order to facilitate their control over Eastern Europe. German imperialism has led the way in pursuing the Balkanisation of Eastern Europe. The splitting of Czechoslovakia was a reactionary act, which benefited neither Czechs nor Slovaks. The people were not consulted. This was a manoeuvre on the part of German imperialism, of which Klaus was an agent. The worst results of this policy was the brutal dismemberment of Yugoslavia which has led to wars and unprecedented mayhem.

The experience of "market economics" has had an effect on the psychology of the masses. In areas like east Poland, unemployment is already over 20 per cent and the economy is slowing. There is huge and growing inequality. Entry in the EU - if it happens - will solve nothing. At least one fifth of the population earn at least part of their living from the land. The EU proposes to give Polish farmers only 25 per cent of the level of subsidy given to western farmers in the transition period. This will mean that Polish agriculture will be decimated by heavily subsidised western imports. To make matters worse, the imposition of EU quotas on the production of milk and other items will make it even harder for Polish farmers to make a living.

There is a ferment in the population. Many people now look back to the "Communist" era with nostalgia. At the last elections in Poland, the ex-"Communist" Party swept the board, while Solidarity and the other bourgeois parties were virtually wiped out. This was a decisive vote of no confidence in the market and all its works. But the discontent of the masses has been blocked by the ex-Stalinists who have diverted it into safe channels. The leaders of the former "Communist" Party have completely capitulated to capitalism. And not only in Poland. Everywhere when they come to power, they act exactly in the same way as the bourgeois parties.

The "Communists" thus offer no solutions. We spoke of the counter-revolutionary role of the Stalinists in the past, but that was nothing compared to this. By refusing to take action to re-nationalise the economy, they will provoke the disillusionment of the masses, and drive sections of the population into the arms of the counter-revolutionary forces. The defeat of the Socialist Party in Hungary in 1998 was caused by a wave of popular anger against its pro-market austerity policies. The right wing government of Viktor Orban was the result. In this way they are preparing the way for open reaction in the future.

However, the victory of the right wing bourgeois parties can itself only be a passing phase. The extreme weakness of capitalism in all these countries will be cruelly exposed by the next world slump, preparing the way for a general upswing in the class struggle throughout Eastern Europe. In countries like Romania, Bulgaria and Serbia, the roots of capitalism are even more shallow, the bourgeoisie even more corrupt, rotten and criminal, than in Poland, Hungary and the Czech Republic. Here the crisis is deeper and the regimes even more unstable.

In Bulgaria, the desperation of the masses and the lack of an alternative on the part of the ex-Stalinists of the BSP led to the victory of ex-King Simeon. But this is a temporary aberration. Unemployment stands officially at 18 per cent, living standards have plummeted and corruption universal. The illusions in the King will not be long-lasting. They reflect a growing desperation and a frantic search for a way out of the crisis. But Simeon is an emperor with no clothes. The illusions will rapidly turn into disillusionment - and then fury. Bulgaria and in the neighbouring states face a turbulent future. A deep slump will start a chain reaction of crises, which can place revolutionary developments on the order of the day in one country after another.

The Balkans

Since the break-up of Yugoslavia there has not been a single day of stability in the Balkans. The crisis moves like a black wave from one country to another. The fate of every state is intimately linked to every other state. All of them are weak and fragile, and many are completely unviable.

The dismemberment of Yugoslavia was a criminal act with not an atom of progressive content. We explained this at the time - unlike the degenerate pseudo-Trotskyist sects who monstrously supported it on the grounds of "self-determination". Actually, by further deepening the Balkanisation of the region, the control of the peoples over their own lives and destinies has not increased but decreased, while the imperialists have intervened brutally to extend their power and influence. The fact that the Euro (previously the D-mark) is virtually a common currency is an indication of the real state of affairs that masquerades behind the façade of "self-determination" and "independence".

The failure to carry through the revolution in Albania after the fall of Berisha led to a catastrophe of misery and ultimately to the war in Kosovo. Here too nothing has been solved. All the promises of the imperialists turned out to be empty. The high rate of growth (7 per cent) is deceptive because it sets out from a very low base. The infrastructure is crumbling, especially the roads and electricity supply. There are daily power cuts of up to 18 hours, which also affects water supplies. The regime is thoroughly corrupt and the country is a haven for illegal immigrants, drug and arms smuggling and prostitution. The "Socialist" government is carrying out privatisations, which means that the country is once more being handed over to foreign owners. But there is a ferment of discontent inside the Party, which may even split.

The intervention of imperialism has greatly increased the instability of the whole region and sowed the seeds for new and even more bloody conflicts and wars in the future. The Kosovo war solved absolutely nothing but only exacerbated all the contradictions. After Kosovo, it was the turn of Macedonia, which still remains in a very explosive situation. Only the presence of foreign troops prevents a blow-up. The collection of arms by NATO forces has, as predicted, proved to be a meaningless exercise. The rebels merely hide and bury most of their weapons and wait for a favourable moment to use them.

The provocations of chauvinist and fascist elements on both sides are rapidly undermining the attempts of NATO to shore up the Trajanovsky government. Sooner or later, a new conflict will flare up, which can easily spread with unforeseen consequences. Yet the American imperialists in their blindness have not only got themselves embroiled in Afghanistan but are preparing to attack Iraq! While their gaze is averted, they can be faced with a nasty surprise in the Balkans.

There cannot be a solution for the national question in the Balkans on a capitalist basis. The only way to halt the madness of expansionist wars and ethnic cleansing is by turning the war into a socialist revolution, which was possible on at least occasions in the last period - in Albania and in Serbia. We saw the revolutionary potential of the masses in Serbia after the end of the Kosovo war. But because of the absence of the subjective factor, the exertions of the masses at that time led to the coming to power of the pro-bourgeois elements. But these people are now being put to the test. The next offensive of the masses will be directed against them. The working people must take power into their own hands, and expropriate the corrupt and reactionary oligarchies that enslave them. On the basis of a Socialist Federation of the Balkans the working people could easily settle the problems in a fraternal manner, within the framework of a workers' democracy and the widest possible autonomy for all nationalities.

China

China has had greater success than Russia in developing the productive forces, while moving towards capitalism, but the bureaucracy has maintained firm control of the state. The Chinese leadership was alarmed by the fate of Russia and Eastern Europe and determined not to go the same way. Although the Chinese bureaucracy has gone a long way in moving towards capitalism, the nature of the regime has not yet been resolved in a decisive way. Important elements of a nationalised planned economy co-exist uneasily with the rising capitalist sector. Even though a large part of the economy is now privately owned, there is still a large section of the bureaucracy which is linked to the state owned sector. (In Vietnam, the process of capitalist restoration is still in an embryonic state).

If the perspective on a world scale were one of sustained economic growth over a long period, then, at a certain stage, capitalism would eventually triumph. But that is not at all certain. In order to maintain a stable regime, China must achieve growth rates of at least 8 percent per year. With the slowdown on a world scale this will prove impossible to maintain. This opens up the prospect of social conflicts on a massive scale, which sooner or later must produce splits within the bureaucracy. Some sections have already successfully transformed themselves into capitalists, i.e. the owners of the means of production. But there is also a large layer whose power and privileges are still based on their position in the state owned sector. Thus, in spite of the fact that the Chinese bureaucracy has been more successful in introducing market methods, the potential for a major conflict within the state apparatus is even greater than in Russia.

For a time the policy of a "controlled" movement in the direction of capitalism ("market socialism") achieved good results. China's growth rates were among the highest in the world. In effect, China occupied the position which western investors originally had envisaged for Russia. But now the perspective of a world slump places a big question mark on the future of China. The abandonment of Mao's policy of autarchy and the integration of China into the world economy have merely created new and insoluble contradictions. China is tied to the world market in a way that was not the case in the past. The destiny of China depends upon the vagaries of the world economy.

The present crisis has been accompanied by a big contraction of demand in both America and Asia - China's main markets. And the domestic market is insufficient to absorb the vast quantity of commodities being produced by China's industries. Thus, the very successes of the Chinese economy are preparing a serious crisis.

If it wishes to continue to move towards the consolidation of capitalism, the Beijing government will have to close down a large part of state-owned factories. But this would produce the risk of a social explosion which terrifies a bureaucracy which is well aware of the revolutionary traditions of the Chinese workers and peasants. The bureaucracy is therefore moving very cautiously.

China has combined the worst features of a Stalinist regime with the worst features of Asian capitalism. Although the economy has grown rapidly, it has created an economic and social disaster of huge proportions. There are at least 120 million urban unemployed, and a similar number in the countryside. The cities cannot absorb such huge numbers without creating explosive conditions like those that existed in tsarist Russia on the eve of the 1905 revolution.

As long as the bureaucracy is able to deliver good economic growth, and therefore hold out the prospect of better living conditions in the future, the masses are prepared to tolerate its rule. But there is increasing discontent with the growing corruption, inequality and misuse of power by the privileged caste of officials. Already there has been a spate of workers' strikes and peasant disturbances. The persecution of the Falun Gong sect is a symptom of the unease of the ruling elite, which is bracing itself for the inevitable social consequences of economic depression. In such a situation even innocuous cults can quickly get out of hand. Therefore the bureaucracy wants to assert its control. The attacks on this strange sect can only be explained as a manifestation of extreme nervousness. The bureaucracy, terrified of the prospect of social explosion, cannot tolerate the existence of any movement that is not under its control.

The Chinese working class is one of the biggest in the world. Marxists must follow events in China carefully and make every effort to establish links with those elements who are drawing revolutionary conclusions. There is growing interest in our ideas and the web site. We have plans to translate our books into Chinese. In the next period, China will assume a burning importance.