Speech given by Alan Woods at the August 2004 international gathering of the international revolutionary Marxist tendency
Comrades, this conference is meeting at the most turbulent time in recent history. When they look at the world situation, most ordinary men and women are perplexed. The ruling class is also perplexed. They have no conception of what is happening and they are stumbling from one crisis to another. To use the expression of Leon Trotsky, they are tobogganing to disaster with their eyes closed.
Comrade Eloy pointed out to me recently that there was an article in the Spanish newspaper El Pais which said that the ruling classes of the world, the governments of the world, were like a high-speed train without a driver. That is exactly what Trotsky said in 1938. The world is suffering from one crisis after another, from one shock after another.
The only way that one can understand what is happening is by adopting the scientific standpoint of Marxism. The ideas of dialectical materialism have never been more important than at the present time. Marxism explains how contradictions accumulate gradually and slowly until they reach a point – known in physics as the critical point – where the accumulations reach an explosive state.
There is a branch of physics which deals with turbulence, which is precisely a critical point in physics. And what we see on a world scale at the present time is turbulence.
If one was to use one word that describes the present world situation, that word is instability – the most colossal and unprecedented instability at all levels – economic instability, colossal instability on the stock exchanges, which reflects a general nervousness, and a feeling of uncertainty about what is going to happen.
There is political instability and also diplomatic instability. All the institutions that were painfully built up by the bourgeoisie after 1945 are in crisis. NATO is split down the middle. The European Union is in crisis. They cannot even agree on a constitution. And the so-called United Nations (or rather, the dis-United Nations) is in a complete crisis as we saw in the splits in the Security Council over the question of Iraq. Diplomatic crisis, political crisis, social crisis, and military crisis occur regularly and there is one war after another. Then there this monstrous epidemic of terrorism which is spreading rapidly from one country to another, which is registering one shock after another.
All of these things are symptoms. The average person sees these things, but sees them in an isolated way. It seems to the average man and woman that the world has suddenly gone mad, and in a sense that is true. This insanity in the world is called capitalism – which is now in a state of global crisis. These things are not little “corrections”, as they like to call them, but symptoms of an organic crisis of the system.
At bottom, as Marxism explains, the crisis of capitalism flows from its inability to develop the productive forces. That, however, is not an absolute assertion. It does not signify that the capitalist system cannot develop production at all. That is nonsense. There is always some development of production; as a matter of fact there was even some development of production in the 1930s. But it is blatantly obvious on a world scale that capitalism is not capable of getting the same results as they got in the past – for example from 1945 to 1974.
Lenin said that politics is concentrated economics. And I will deal with the economic figures in a moment. But Marx and Engels never said that you could reduce everything to economics. That is a vulgarisation of Marxism. The fundamental crisis of capitalism has many manifestations – many painful manifestations. But not all of them are of an economic character. For example you get the enormous and violent intensification of national and racial antagonisms – so-called ethnic conflicts, religious mania, fundamentalism, superstition, mysticism, crime, violence, indifference to human suffering. These things are an expression of a period of reaction. But all of these things are merely symptoms of the fundamental crisis.
Its quite amusing, in the last 10 years the defenders of capitalism were boasting and bragging about globalisation. This was supposed to solve all the problems of the capitalist system on a world scale. They spoke about globalisation as if it were an innovation. Actually, Marx and Engels explained this in the Communist Manifesto over 150 years ago. They explained that the capitalist system inevitably develops as a global system, as a world system. And the most important manifestation of the epoch in which we live is precisely the unprecedented development of world economy. This makes it impossible to think and talk in terms of national limitedness. It cuts the ground from under the feet of the nationalists and chauvinists.
For the first time (and it is a marvellous thing if you think about it) we can say that, objectively, the material conditions have now matured for world socialism. That is a fact. The whole world is now bound indissolubly into one single, united, interdependent unit. And yet we have a dialectical paradox, that precisely in this period, national antagonisms have never been greater – leading to ethnic conflict, “ethic cleansing”, bloody conflict and wars, which reflect the impasse of capitalism on a world scale.
In recent months the bourgeois economists have been talking about an economic recovery. And there is an economic recovery of sorts. But it is a very peculiar recovery; and it is not a sound recovery. Really speaking, it is confined to one or two countries: the United States of America and to some extent China. In the recent period the US economy has grown at an average rate of approximately 4.2%. It is mainly a consumer boom. I think consumption in the last 12 months rose by about 9% in the United States. But there are contradictions involved in this spending boom.
This spending boom in the US is sustaining the whole world economy. This is an unprecedented state of affairs. There has never been a case in the past where the whole world economy was based on one country. Moreover, this consumer boom is based upon debt. There is colossal and unprecedented indebtedness – not only personal (household) indebtedness, but also company indebtedness, and government indebtedness.
In the past the United States was the world’s biggest creditor nation. America lent money to other nations and the whole world was in debt to America. That was the position after 1945, but now it is not the case. It is an astonishing fact that the wealthiest country in the world is the world’s biggest debtor. The total national debt of the United States of America is an astonishing 7 trillion dollars (that is 7 million million dollars). The USA is in fact technically bankrupt, as France was bankrupt on the eve of the French revolution.
This figure of 7 trillion dollars is three times the gross domestic product in America.
This position cannot be sustained. Why can it not be sustained? George Bush and Cheney think that it can be sustained – because so far nothing has happened. This shows the short sightedness of the leaders of the world’s most powerful nation.
I was quite amused recently on the anniversary of President Reagan’s death. Do you remember President Reagan? There was an outpouring of tributes to this “great genius”. The fact that they could celebrate President Reagan as a great man says a lot about the political qualities of the present leadership of the United States. In fact, this “genius” had a brain about the size of a pea – a very small pea. In fact there was a satirical programme on British television about Reagan called “The President’s Brain is Missing” [laughter]. Now they celebrate him as a great man and a great President – the man who “defeated communism”.
I suppose it is partly because George Bush’s brain is even smaller so he feels quite comfortable with the comparison. But George Bush’s fellow politicians are even worse than him – and that is saying something. Take the Vice President, Dick Cheney. [Somebody says, “You take him”]. No thank you [laughter]. You know what Dick Cheney said? He said that President Reagan proved that deficits were not important. This shows that the Vice President’s brain is also missing.
So deficits are not important? It is astonishing that a Republican leader would make a statement like that. In the past the Republican Party of America was based on “sound budgets” and a “sound dollar”. What this shows is that the American bourgeois have become completely irresponsible in their period of senility. They are like gamblers: in fact, drunken gamblers. Cheney says “Don’t worry, deficits are not important”. To show you how important the deficit is, I will give the figures. Do you know how much interest they are paying on this little debt? Not very much – a mere 318 billion dollars. This is what it is costing them in interest alone. But Cheney says: “it doesn’t matter”. This cannot be sustained.
The conduct of this Administration is quite incredible. President Bush, of course, is a genius. He is a genius in international politics, that’s why he has caused a big row between the US and almost all its old “allies” in the world. He is also a military genius – that’s why they are in a mess in Iraq. And so logically he is also an economic genius.
Now if a country has a deficit what would you normally do? Logically you would increase taxes or decrease spending, or both. So what does President Bush do? He massively increases public expenditure – arms expenditure, that is. I’ll give the figures for that in a moment. At the same time he is cutting pensions and Medicare – he says there is no money for pensions. He cuts the taxes of the rich at the same time. So of course the deficit is getting out of control. And it is incredible that a Republican president has increased expenditure more than any other US president in the last 50 years.
This has already led to a sharp fall in the dollar. They don’t care about that either. They are using the fall of the dollar to try to increase the US share of world trade at the expense of their rivals. In reality, there is a ferocious struggle for markets on a world scale. They are fighting like dogs over a bone over even the smallest markets. That is the fundamental reason for the enormous intensification of national conflicts and the massive revival of imperialism and militarism on a world scale.
They claim it is really a struggle for democracy and human rights. We see what that means in Iraq. It is a struggle for freedom – for free enterprise anyway. Imperialism in its essence is a struggle for markets, raw materials and spheres of influence. Therefore there has been an enormous increase in imperialism, as we see in the seizure and attempted plunder of Iraq.
There is an enormous increase in the conflicts between nations particularly between Europe and America. The antagonisms between them have probably never been more intense in history. But what you must also see is the enormous potential for the explosion of the class struggle that arises from this. Such is the intense nature of the contradictions between the classes that any external shock can spark off a revolutionary chain of events.
This does not necessarily signify an economic shock, although it may be an economic shock, as in Argentina four years ago. In that case a sudden economic shock caused the biggest economic default of any sovereign nation in history. Immediately, with the speed of lightning, that crisis led to revolutionary consequences. The masses came out onto the streets – not just the workers and the unemployed, but middle class people, who were being ruined. Without a party, without a programme, without a leadership, without any clear ideas, they came onto the streets of Buenos Aires and President De La Rua had to flee from the roof of the presidential palace in a helicopter.
There was a time during the decline of the Roman Empire where they had three Emperors in one year. That was an indication of a profound crisis. But Argentina had four presidents in two weeks. We said at the time that it was the beginning of the Argentine revolution and that was correct. Nothing has been solved. There will be further revolutionary movements in Argentina in the next period.
Inevitability of explosions
What you must understand is that sharp and sudden turns are implicit in the situation in all countries – even countries where it seems that reaction is in the saddle, where the situation seems hopeless, where it seems that the workers will not move, explosions are inevitable.
Globalisation now manifests itself as a global crisis of the capitalist system that affects all countries – as we saw in Spain. In this case it was the shock of terrorism. I believe that we should profoundly meditate on the events in this country. This was not an economic crisis, but it was a powerful external shock, which acted as a catalyst, which brought to a head all the contradictions, which had been accumulating for years and decades in the depths of society.
The boom of the 1990s was qualitatively different from the economic upswing of the 1950s and 1960s. It is a different question altogether. The truth of the matter is that it was a boom at the expense of the working class in all countries. There was remorseless pressure on the people at work through the increase in the hours of labour. In America the working week increased from 40 hours a week to 50 hours a week. That’s according to the official figures; in fact they work a lot more than that. People are working long hours of overtime, weekends, with no holidays and no breaks.
The abolition of proper full time jobs through casualisation is accompanied by the wholesale destruction of trade union rights. There is remorseless pressure on the working class – even on those who retain their jobs. This remorseless tyranny on the shop floor is the result of the lack of leadership and the disgraceful role of the trade union leaders. Given the absence of leadership, the workers have accepted this. They have gritted their teeth, bowed their heads and got on with the job, in the hope that things would improve. But that has a definite limit. And that limit is now being reached in many countries.
Beneath the surface of apparent calm and tranquillity, there is an enormous increase of unbearable tension and antagonisms, contradictions, discontent, frustration – above all frustration, because the discontent of the masses does not find a vehicle. It cannot find an organized expression. But the mood of seething anger exists everywhere, and this was shown by the dramatic events in Spain. On the surface everything was fine and dandy. Spain had a high rate of growth, and, if one can believe the official figures, living standards had increased, although actually in Spain there was the same remorseless pressure on the workers as elsewhere.
The right wing was in power. Everything seemed to be under control. The leader of the Peoples Party (PP), Aznar, was so confident he sent troops to Iraq. He was a great admirer of General Franco. Before he died Franco said everything in Spain was “tied up and well tied up” (“atado y bien atado”). That’s what Aznar thought – just a few months ago.
Yes, comrades, just a few months ago there was a right-wing government in this country – full of confidence, puffed up with arrogance. By the way it wasn’t just Aznar who was sure of himself. All the opinion polls predicted an easy victory for the PP. The Socialist and Communist leaders accepted this without question. As a matter of fact, they were largely responsible for this situation, because of their capitulation and their cowardice.
The truth is that many activists on the Left and many workers were demoralised and disappointed. They thought that nothing could be done, that everything was lost and there was no hope. In turn this disappointment and pessimism itself becomes a factor paralysing the working class. And yet the whole situation was transformed in 24 hours and turned into its opposite.
As this monstrosity of March 11 unfolded – this terrible bomb attack which killed ordinary workers in the centre of Madrid – everything changed into its opposite. Here we see how a powerful external shock can transform the whole situation and transform the whole psychology. But it was not this shock on March 11 that created the situation in Spain. It only brought to the surface tendencies that were already there.
What occurred in this country is an object lesson in Marxist dialectics, which teaches us that at a certain critical point things turn into their opposite. In just two days the psychology of the masses in Spain passed through a series of lightning changes. All the most powerful human passions were unleashed – first shock, then intense grief, then a mood of questioning and finally absolute fury.
Despite the complete absence of leadership, the Spanish working class and the youth, came onto the streets, in the best traditions of this country. There was a mass demonstration outside the headquarters of the People’s Party. The state considered repression and there were indications that there was going to be a confrontation. But they soon dropped that idea, because if there had been one single bloody encounter with the police, there would have been a revolutionary situation in Spain.
The following day in the elections, the masses demonstrated their opposition and their true feelings, inflicting a massive defeat on the PP. Incidentally, the most astonished people in Spain were the leaders of the Socialist Party. They played no role in these events, or if they played any role, it was a reactionary one. Nevertheless, the workers and youth voted overwhelmingly for the Socialist Party. And this is a complete demonstration of the correctness of the ideas of this tendency.
There is an important sociological law, which is as absolute as a law of physics. This law states that when the masses begin to move into action, when they begin to seek a revolutionary way out, they will always tend to express themselves through the existing mass organisations of the working class, no matter how bankrupt they are. Despite the illusions of the sects, the masses cannot express themselves through small revolutionary organisations. That is a stupid idea. So the workers and the youth of Spain took Zapatero, the Socialist leader, by the scruff of the neck and they pushed him into power.
All the processes are crystal clear here. But the process is not finished in Spain. It’s only just begun. And the same process we saw in Spain can be seen in future in every single country represented in this hall – in Denmark, in Britain, in Ireland, even in Israel. You will see rapid changes in the situation, which can take even revolutionaries by surprise. It is a very volatile situation, it’s very unstable, and very unpredictable everywhere. Everywhere there is an extreme volatility in the relations between the classes, and extreme volatility in relations between the nations. That is the most striking thing.
Recovery solves nothing
The so-called boom in America has solved absolutely nothing. Unemployment remains high in America and all other countries. If my memory serves me correctly they have created one million jobs in the last 12 months in the United States. That indicates that there is a bit of a recovery also in industry now. But what you have to bear in mind is that so far under Bush, overall they have lost almost three million jobs. The conditions of the masses have not improved in the slightest. There has been no increase in real wages, while the profits of the super rich have increased enormously.
I remember during the Clinton administration they said they created a million jobs, and there is a story about that. I cannot demonstrate it scientifically, but it has got the ring of truth about it. President Clinton is sitting in an expensive restaurant in New York, with some multi-millionaire friends of his. He boasts: “I have created one million jobs.” And the waiter (probably a poor Hispanic) who overheard the conversation, says, “I know Mr President I’ve got three of them” [laughter].
For the first time in history, as I have said, the whole world is dependent on one country – America. They are all happily exporting to the USA, so American imports are rising steeply, but the exports are not rising very much. This relationship is very graphically reflected in US current account deficit, which in the first quarter of 2004 amounted to 114.9 billion dollars. That is in excess of 5 percent of the gross domestic product. This also cannot be sustained.
US household debt, which I mentioned earlier, amounts to 84 percent of the gross domestic product, which is colossal. In the Euro zone it stands at 50 percent, which is also colossally high. And now inflation is beginning to rise. We have a paradox here. On the one hand, they complain about deflation all the time, yet at the same time they are worried about inflation. It is a very strange state of affairs. And these contradictions must be resolved.
Protectionism and the fall of the dollar
In effect, American capitalism is at war with the rest of the world on the economic plane. The steep fall of the dollar is a protectionist measure. They talk about free trade, and liberalism, but in practice in one way or another they are all pursuing protectionist measures, which of course hurt the poorest countries most. The poor countries of Africa and Latin America are being shamelessly plundered.
Brazil recently took the United States to the World Trade Organisation, because the American government was subsidising cotton – which they do subsidise. The Brazilians proved that the US government were putting 4 billion dollars into cotton crops worth 3 billion dollars. That is a colossal subsidy, and there are many such subsidies. The Brazilian government won the case. So what? The Americans say, “we are very concerned about this, and we are going to appeal”. And they will appeal.
It is an absurdity and shows that the World Trade Organisation solves nothing. Solon the Great, who knew a few things about constitutions and laws, (he wrote the Athenian constitution) once said: “the law is like a spider’s web, the small are caught, and the great tear it up.” And that is what the Americans will do – they will tear up the decisions of the WTO if it goes against them.
By the way it is a mistake to say, as some comrades have said, that globalisation is now fixed and permanent. That is quite wrong, because it overlooks the underlying national tensions between the imperialist powers. As a matter of fact, there was globalisation even before 1914. There was an enormous increase in world trade at that time, and in some respects there was more globalisation than what there is now. It is an actual fact that at that time you could travel all through Europe and through the world without a passport. So as far as the movement of human beings and the free movement of labour is concerned, there was more integration than what there is now.
Do you know what is written on the Statue of Liberty? They say something like: “Give me your poor and huddled masses”. That was before 1914, when they were inviting people to come from Europe to expand the labour force and develop the productive forces. But now we see the exact opposite. Everywhere monstrous barriers are being created against the movement of human beings. I think Comrade Celia Hart quoted a phrase in her document, which I found quite amusing. Somebody said that nowadays the Statue of Liberty itself would be considered an illegal French immigrant [laughter].
No difference between Bush and Kerry
This unstable and unbalanced situation cannot continue to exist. In the United States they will have to increase interest rates in the next few months substantially. They should have done this before – a long time before. But President Bush does not want to increase interest rates now because the elections are coming. After the elections it will be a different matter. And a sharp increase in interest rates in America must produce a severe crisis, because of these colossal accumulated debts, which affect every family in America. There will be a sharp decrease in spending which will hit the whole of the world. So the real perspective is that they will enter into a crisis before the boom has taken off. That is the most likely development.
Now what effect will this have in America? The result of the election in the United States is not clear. In principle the Democrats should win easily. But the fact of the matter is that there is no difference between the Democrats and the Republicans – none whatever. It would help if the Democrats had a human being for a candidate, instead of a trained monkey. I really don’t know how to describe him!
However, in fact, it makes absolutely no difference – especially on foreign policy, where they have no real differences. In fact, in some respects this scoundrel Kerry has got an even worse position than Bush. On Venezuela, for example, he has a more aggressive position. He would try to be a little bit nicer to the French and the Germans, because they need the French and Germans to get them out of the mess in Iraq. The French and the Germans are naturally not very enthusiastic about this prospect, especially as they have not been given any of the contracts. They have all gone to the American companies. Yes, Kerry will be nicer to the Europeans, but on Iraq he had the basically the same policy. To think any differently would just be stupidity.
You might say that everything is hopeless in America. But that is a fundamental mistake. Something is changing in America. That’s why there is enormous scepticism and cynicism about all of the political parties. But that does not mean to say that the American people are not looking around for an alternative. There is an enormous and unprecedented ferment in America. There are doubts and questioning which weren’t there before.
Here again you see the effects of the external shocks. What greater shock could there be than the September 11th? Part of the problem in America is that people are politically less aware than in Europe. That is true in general. They tend to be very provincial in their outlook, and that goes for the bourgeois in the first place. The American ruling class is very provincial.
The quality of the leaders of the bourgeoisie also reflects the crisis of capitalism. Trotsky, writing about maybe 80 years ago, said that the British ruling class was the most farsighted ruling class in the whole world. They were also the biggest scoundrels in the world, but that is another matter. Trotsky said the British ruling class did not think in years, they thought in centuries.
As a matter of fact the political life of Great Britain in the past was not in the hands of the bourgeoisie, it was in the hands of the aristocracy. The Conservative Party was historically the result of a compromise in the good old British tradition. The aristocrats did a deal with the capitalists whereby the economic power was in the hand of the capitalists, the industrialists, but the political leadership was in the hands of the lords, the aristocrats, who were not particularly worried about pounds, shillings, and pence, about short term economic gain, and therefore they could think in longer terms, in a broad sense, on a global scale.
That was then, but look at the situation now! Who has been running Britain? People like Margaret Thatcher, John Major, and the Reverend Tony Blair. Napoleon once said that Britain was a nation of shopkeepers, but that was a bit unfair. But nowadays the British establishment is an establishment of the most ignorant, narrow-minded, petty bourgeois shopkeepers you can come across.
There is a similar situation in America. In the past, they had some intelligent leaders in America. F. D. Roosevelt was quite intelligent. The political power in America was in the hands of the patricians (the American equivalent of aristocrats) on the East Coast. But now the political power has moved West and South – to the country bumpkins, to the nouveau riche from the Bible belt. They represent all that is most backward in American society. The quality of these people is incredible – incredibly low. Some of them are also a little bit mad. As an actual fact they have prayer sessions in the cabinet, before they start the meetings.
Role of the subjective factor
I know that some comrades think it does not matter, since all the fundamental processes are determined by the productive forces. In a general sense that is correct. We are Marxists and we understand the limited role of the individual. We understand that individuals cannot change the whole historical process. But in the short term, they can certainly complicate things.
As a matter of fact, it is just as incorrect to say that the quality of the bourgeois leaders does not matter, as it is to say that the quality of the workers’ leaders does not matter. It is stupid to make such a statement. Bush, Cheney, Rumsfeld and Blair have not created the world crisis. That is of course clear. But by their blundering, by their reactionary blunders they make things worse from the capitalist point of view.
In the English language we say “like a bull in a china shop”. But the conduct of the reactionary Bush clique in world affairs is not like a bull in a china shop, but it is more like an elephant in a china shop. I think that George Bush has seen too many John Wayne films. You know, where they send in the seventh cavalry. They thought they could just walk into Iraq, take it over and plunder the place. Of course it didn’t work out like that.
Now they are in a mess in Iraq, and they cannot extricate themselves from the mess. And this will have profound effects inside the United States itself as night follows day. The truth is that there is a ferment in America. And there must be enormous discontent among the working class. The Economist on June 12th wrote something interesting about America: It explained that there was a recovery in America, but it added that for many Americans (we might add for most Americans), and I quote: “the economy does not seem so wonderful. The fruits of the recovery, thus far, have been more evident in firm’s profits, than in workers’ wages. As a share of Gross Domestic Product wages are at their lowest levels in decades. By several measures, the job market is still weak, the average spell of unemployment for example is still rising, but most important, for many Americans, improved job news has been offset by bad news in rising petrol prices and soaring medical costs.”
The ferment in America can be seen even in small things. For example, there is this new film by Michael Moore, Fahrenheit 9/11. I’ve not seen it. But this film in the first few days broke all the box office records from people going to see it. Comrades, this little detail must tell us something. As a matter of fact there is a growing industry in America, in anti-Bush books. If you want to make an instant literary success, write a book against Bush. I am going to tell you all how to get rich easily. In the next slump, which will not be too long delayed probably, you should buy shares in two things: gold, because gold will increase, gold will go up, gold always goes up when the bourgeoisie is not sure what is going to happen, and in books and films against George Bush.
You see, the extremely reactionary character of the present leadership of the US is expressed in all kinds of things – not just in economics, not just in taxes, not just in Iraq, but on many other matters. They want to put the clock back 200 years. They want to break the constitution. They want to introduce religious teaching in the schools. They are religious maniacs, crazy people. Instead of Darwin, they want to teach the first book of Genesis, the part that that says: “in the beginning God created the heavens and the earth…” That shows their intellectual level.
They also want to restrict the right of abortion. The response of the people to this attempt to restrict the right of abortion was quite staggering. This was not directly an economic question. But one million people were demonstrating in America over this question. And that is a very striking fact. It is a symptom, like many other symptoms that we are seeing.
Among those who demonstrated, there were workers of course, but they were mainly middle class people – students and so on. That is always the case. The first sign of social radicalisation – the first sign of revolution – is always a ferment in the middle class, the young people and the students and so on. That is the first sign, like the tremendous, unprecedented anti-war demonstrations in Europe. It is the same phenomenon.
Before the war had even started, two million people demonstrated on the streets of London. It was the largest demonstration in the whole of British history. Is this a small detail we are talking about? It is not a small thing at all. It is an extremely significant development. On the same day in Spain there were six million demonstrating, and if I am not mistaken there were three million in Italy. This shows something!
Trotsky once said, “when all else fails, and there is no other alternative, start to think”. It is not a bad thing to do occasionally. These are highly significant developments. And they unquestionably demonstrate that even at this early stage, because it is early days yet, there is an enormous ferment everywhere. The movement of the middle class today will prepare the way for an explosion of the proletariat tomorrow. That is always the case.