CAPITALIST CRISIS -- THE COMMUNIST ANSWER

by Eric Trevett
President of the New Communist Party

LOOKING BACK at the last century we see that it was an epoch of imperialist
war and revolution. But the characteristics of the two world wars and the
economic developments following them were quite different. In the First
World War, the majority of casualties (killed and wounded) were actual
combatants themselves.

It was a war of position and comparatively little damage was unleashed on
towns and cities outside the immediate war zone.

The Second World War was highly mobile. It ranged over vast territories and
civilian casualties as well as military casualties were colossal.

The First World War was an imperialist war which brought Czarist Russia to
its knees and led to the Great October Revolution. The Second World War
started as an imperialist war but soon developed into a fascist onslaught
against the Soviet Union and ended with a new revolutionary upsurge in
Europe and Asia.

During that war the imperialist powers all included the bombing of civilian
centres in their battle plans.

The Second World War therefore inflicted massive damage and destruction on
cities and towns.

Factories and plants, housing and furnishings, railway stock and roads had
to be replaced after the war.

Following the First World War the economy quickly moved to a recession.
Then after the Wall Street crash there was no improvement in the economy
until the Second World War had broken out.

The ruling class following the Second World war had to contend with the
tremendous advances of the working class which identified capitalism as
being the cause of the war and the suffering and the rise of fascism, of
which it was essential to defeat.

Socialism was extended to the Eastern Europe and the Baltic, and the
working class was on the move in Asia, led by militant communist parties.

In Western Europe, the workers were determined not to tolerate the pre-war
conditions of mass unemployment and poverty.

Social Democratic governments were swept into office, often with huge
majorities.

These governments and the ruling class of the capitalist countries,
realised that concessions had to be made, if revolution was to be averted.

Capitalism in the post war period therefore emerged politically weaker but
with the basis for an expanding economy and with the major industrial power
of the world, the United States of America, unscathed by a single bomb on
its mainland. The basis for a growing capitalist economy with rising
productivity was partly due to the Americans ability to export a mass of
tools of production coupled with the struggle of the working class to win
concessions from the capitalists by militant struggle, especially in the
fight for higher wages.

The strategy of the ruling class from then to now, has been to maintain and
expand the economy, nationally and internationally in order to ensure the
political stability of the capitalist system. The social democrats opposing
the concept of class struggle helped popularise the idea that capitalism
was now crisis free.

The problem for them and the ruling class was how to sustain and achieve a
constantly expanding economy whilst holding down the purchasing power of
wages and undermining pensions and student grants.

Over the years, the way forward for capitalism has been to take advantage
of certain objective circumstances and to take administrative measures
designed to boost investments in the economy.

The use of the bank rate in order to fine tune the economy could not in
itself ensure such economic expansion. Therefore, the first measure
introduced was to popularise the virtues of investing on the stock
exchange. Increasing emphasis was put on this and many people including
workers, started to invest some of their income and savings on stocks and
shares.

This had the political advantage for capitalism of making people feel they
had a stake in society. For a period they did enjoy a good return on their
investments, but now that happy state of affairs has clearly come to an
abrupt end.

The next major ploy was to get rid of the policy of thrift in favour of
buying now with future earnings. This too proved to be popular. In the
short term it ensured a continuation of growth but it stored up greater
problems for the future as many countries, corporations and individuals
built up huge debts.

These debts have proved to be a significant cut in earnings. Since they not
only have to be paid back, they also have to be serviced by interest charges.
In the case of individual debts, which many people are being tempted to
take out against the surety of their homes, they run the risk of having
their property confiscated.

The most recent effort to sustain and expand the economy shows a measure of
even greater desperation. It is the mass privatisation that is taking place
in virtually every sector of the economy, including the National Health
Service and Education.

This measure is to try and soak up the mass of capital and is desperately
seeking a safe haven for investments now that the Stock Exchange has
recorded crippling losses in share prices.

The aim of sustaining and expanding the economy has been accompanied by the
effort to derive maximum profits on capitalist investments, which have
focused on holding down wages and cutting the purchasing power of pensions
and student grants. Part of the rising productivity being achieved by the
slimming down of the work force and the intensifying the pressure under
which the employed have been subjected. The ruling class, helped by
successive governments, has consistently done their utmost to hold wages
down and cut their purchasing power as price inflation affects goods and
services.

As part of this effort, the bourgeoisie has worked to divide the working
class movement and it must be said, they have had considerable success.

The tenants movement was a number one target and became much less effective
when the government introduce a differential rent scheme.

This was not developed to help the poor and needy tenants, but to sow
discord and create division amongst the tenants themselves. The lack of
consequent unity and militancy of the tenants' movement undermined the
consequent policy, which was to sell off the bulk of council housing.

The second divisive measure preparatory to the assault on the industrial
working class was to introduce the Redundancy Payments Act.

This was another divisive measure which undermined the militant resistance
to job cuts. Alongside of this was claptrap about "partnerships" between
employers and workers, with governments declaring that the class struggle,
which they have never recognised, was now in any case finished and over.

But in this so-called partnership, surprise, bosses have retained the right
to hire and fire, and to back up their powers still more with a range of
anti- trade union legislation. Introduced by the Tories, it is still mainly
intact after six years of Labour government.

A further step encouraging division amongst the workers, had been the
adoption of the percentage increase as opposed to the monetary across the
board claim.

Percentage increases are divisive because they widen the gap between the
higher paid and lower paid workers, who should be completely united in
pursuit of the claim which benefits all to the same extent. People also
lose sight of the fact that a high percentage claim based on a small amount
does not amount to a great deal.

We shouldn't believe that the world economy or national economy has
expanded consistently. Downturns have occurred.

Unequal competition and the divisions between poor and rich countries meant
an uneven development in terms of economic growth and degrees of poverty.

Not surprisingly, individual countries from the developing sector were the
first to get into difficulties. However since then, whole regions have been
affected by falling production and continuing crisis, as is the case within
South East Asia.

We hear nothing now of the economic miracle of Japan.

As for Europe, irrespective of whether countries are included in the
European Union or not, all are now experiencing the symptoms of a major
crisis. Germany, which was once held up as an example to us all by the
capitalist class, is now facing an economic crisis of such proportions that
is has decided to cut its military budget.

This is a step to be welcomed but it should be noted that it has caused
dismay in the ruling circles of Britain and America.

Here in Britain, having crippled the manufacturing industry and decimated
its labour force, the slimming down process has now moved to affect the
banks, insurance travel and communication sectors. The huge numbers of
redundancies taking place now, include many numbers of highly paid
white-collar workers who never dreamt that they would be affected by the
threat of job losses.

Many of these have got alternative employment, but in the main, are
accepting considerably reduced wages, giving rise to a growing insecurity.
This is one of the reasons for the rising militancy in the trade union
movements and opposition to US-British plans to wage a full-scale war
against Iraq. There has been a healthy growth of anti-capitalist sentiment
by working class youth, with massive demonstrations taking place in Europe
and elsewhere.

As yet there is not so much clarity that the only answer to capitalism in
crisis that serves the interests of the working class is socialism.

State intervention against the working class is being swept up with the
Establishment using the excuse that it is defending the country against
terrorism. The use of state intervention is also having the effect of
turning strikes over wage demands and safety procedures into a political
confrontation between the workers on one hand, and the ruling class aided
and abetted by the governments of the day on the other.

The crisis of capitalism is also a crisis of social democracy. The priority
of this Labour government, and indeed of all Labour governments, has been
to perpetuate capitalism. This is why the present Labour government has
adopted Tory policies in respect of privatisation, tax concessions to the
rich, and is slavishly following the interests of big business by backing
US imperialism for a war on Iraq.

The so-called global economy of capitalism benefits the imperialist powers
at the expense of the former colonial countries. With the ruling class
exploiting the working class in every country where it holds power, the
so-called global economy is shot through with contradictions such as the
one relating to farming. With millions starving in Africa, we are paying
our farmers to cut down the production of food. Presumably we should go
down on our knees and pray for bad harvests so that world prices can be
kept high, even though millions suffer from malnutrition and famine.

When the overall situation is looked at in this way, the need for communist
and revolutionary leadership is clearly proven. The working class does not
just need a communist leadership in times of revolutionary upsurge. It also
needs it in its day to day struggles to defend and extend its interests.

In the struggle for communist co-operation, development of the relations
between the Revolutionary Communist Party of Britain (Marxist-Leninist) and
the New Communist Party has been very encouraging. We can see no reason why
this practice should not be developed further, with the inclusion of other
communist parties in Britain.

Our proposals are on the table. We are in favour of round table discussions
on the basis of complete equality.

On a number of crucial national and international issues, there is a common
position between the parties. The question of organisational unity is not
an immediate issue, since such a development requires agreement on an
overall strategy for achieving working class state power.

There is currently a wide divergence of opinion on such a strategy, with
some emphasising the role of parliamentary democracy. Socialism has never
been achieved through legislation by bourgeois parliaments. Nor has it the
remotest possibility of happening here in Britain. The lesson of Chile,
with the shooting down of president Allende, and the US backed atrocities
on the militants and people of Chile should not be forgotten.

The present crisis is the most serious to have faced capitalism since World
War Two. It cannot yet be described as a slump, but all capitalist
countries in the world have been affected by it. It is doubtful whether the
United States can kick-start the global economy to maintain its necessary
expansion. Without that there is no way that capitalism can shore up its
political stability.

Inter-imperialist rivalries are already significant and sharpening. The
national, corporate and personal debts account for substantial future
earnings and incomes. Banks and other companies are having to put huge sums
aside to cover bad debts. Pension funds are increasingly at risk,
redundancies affect every sector of the economy, the purchasing power of
wages, pensions and student grants are being undermined - and this
undermines the market capacity still further.

We are aware that there has been a tendency to cry wolf many times in the
past half century. But it really does look as if capitalism has worn out
its options for growth.

This is why the attack on the working class is being pursued so ruthlessly.
It is a measure of desperation, not of confidence.

For the working class, the day-to-day struggles must become consciously
linked to the fight for fundamental change, and that means revolution and
socialism.

To give greater input to the struggle for socialism we invite readers of
our paper, The New Worker, to take extra copies of the paper and consider
becoming members of our party.

new worker

20th December 2002

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