Class Struggle 114 Spring 2015

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Class Struggle 114 Spring 2015

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Briefs Abolish Profits AND Prisons! As Te Rangikaiwhiria Kemara pointed out in his

article “The Truth behind the SERCO debate”

incarceration, not privatisation, is the problem.

SERCO is a symptom, capitalism is the disease. NZs

high incarceration rate, like that of the US, preceded

prison privatisation by decades. Since the 19th

century Marxists have pointed to crime as necessary

to criminalise workers who ‘break the law’. The law

is the law of the capitalist ruling class that defends

private property as the wealth expropriated from the

working class by capitalists. That’s why most of

those in jail are poor workers locked up for minor

offensives while bankers and fraudsters go free.

And when workers organise resistance to state

oppression they are labelled ‘terrorists’ and become

political prisoners. It is no accident that Rangi

Kemara knows the truth about Spring Hill. He along

with Tame Iti spent over 2 years in that state-run jail

as political prisoners following the Urewera raids in

2007.

Such oppressive laws are part of the class war to

force workers to submit to wage slavery. Prisons are

a by-product of the capitalist profit machine. Only a

society that exploits the working majority denying

them the fruits of their labor needs crime to divide

and rule the wage slaves. The solution is a social

revolution that creates a society of plenty so that the

causes of crime are eliminated. Crime will disappear

with capitalism. We may have to keep the prisons as

long as the bosses need a vacation.

Rip back stolen ChCh assets More reports of the National and ACT coalition

government (NACT) asset stripping Christchurch.

As we have always said the real disaster in ChCh is

‘disaster capitalism’. An earthquake becomes an

excuse to strip public and private assets by corporate

raiders. Even before the earthquake NACT was

grabbing water rights for their dairy farmer relatives

and political cronies by dissolving Environment

Canterbury (ECAN).

Four years on and the Labour-led Council is about to

agree to the sale of council owned assets to pay for

the rebuild which is being dictated by Cabinet to

enrich their developer mates. Fletchers has become

the No 1 fat cat with its rebuild monopoly. Now

NACT is stripping the state housing assets by not

doing maintenance and running them down to pay a

fat dividend to balance the Government books and

then selling them off to the parasitic developers.

By now it should be obvious that this is not only

because the NACTs are heartless bastards. They are

driven by a growing fear of global depression to

strip all the public assets they can before the

economy hits the fan and the fictitious value of our

parasitic speculator cronies goes poof. Bank

balances, stocks and bonds, and other fictitious

paper assets will disappear into a black hole. That is

why the boss class is grabbing real estate, housing,

infrastructure, even gold, as representing real value!

Just to rub it in. This parasitic ruling class is doing

us a favour as they concentrate their ill-gotten

‘wealth’ in tangible, real assets, as monuments to the

stolen past labor value of workers. It makes it easier

for us to rip the lot back into the hands of workers so

we can do something useful with it to rebuild NZ as

part of a global socialist society.

The Zombie Labour Party The Labour Party had its origins as a “progressive”

party dedicated to reforming capitalism in the

interests of working people. Its ideological founders

were the Fabian intellectuals within the Liberal

Party. In NZ leading Fabian W P Reeves outlined its

program in State Experiments in Australia and NZ.

Lenin spoke of Labour Parties in Australia (founded

in the1890s) and NZ (1916) as ‘Liberal-labour’

parties arising under conditions of settler

colonialism where the state played a key role in

creating the conditions for national economic

development.

Is the Labour Party today still ‘progressive’? The

Labour Left intellectuals like to see themselves as

modern day Fabians. The problem is that capitalism

today cannot be “progressive”. Chronic crises of

falling profits do not allow state experiments in

income equality. The growing gap between rich and

poor cannot legislated away in parliament.

Let’s look at the left critique of Labour’s policy

paper on the “Future of Work”. This is cart before

the horse stuff. Separating work from wages is not

possible under capitalism. Therefore any UBI

(Unconditional Basic Income) will be paid as an

poverty line income. Trying to create a living

Class Struggle 114 Spring 2015

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income for all on the basis of the rotten capitalism

system is like trying to raise the dead. That is why

the Labour Party today is a Zombie party.

We have to start from first principles. Labour power

plus nature’s bounty is the source of value. Labour

contributes more than its own value as surplus

labour expropriated by the capitalist owners as their

profits. Rising productivity of labour that

simultaneously renders more workers redundant is

appropriated by capitalists. This is the underlying

cause of capitalist income inequality and

unemployment ignored by the nice Mr Piketty.

Labour governments (and social democracy in

general) treat production relations as acts of nature

and pretend to be able to redistribute income. This

has failed and cannot be revived by neo-Keynesians,

neo-Fabians, or queasy Marxists like Varoufakis.

Capitalism is in its terminal crisis and has to be

overthrown. (See Is China Meltdown means the end

of Capitalism? in this issue)

The ownership of the means of production

(distribution and exchange) must be collectivised

and then democratically employed in production to

meet social needs not private profits. This will allow

a rational allocation of necessary work of a few

hours a week, the sustainability of what is left of

nature, and one hell of a lot of time for poetry and

music. Such an allocation of labour time and of

reward will follow as the cart follows the horse.

“From each according to their ability; to each according to their need.”

Mana versus Maori Party We oppose any deal between Mana and the Maori

Party. It is crossing class lines. We do not think that

the MP and the Iwi capitalists it represents stand for

Maori workers. But Mana certainly does. The way

forward is not to pretend that ‘Maoridom’ is

classless, it is to unite Maori with non-Maori

workers against Maori and non-Maori capitalists.

Thus we do not confuse Treaty settlements that treat

Maori as a ‘people’ with the interests of Maori as

members of the working class. Semi-colonial

capitalism in a period of global capitalist crisis and

climate collapse cannot fund Maori economic

welfare by enriching a Maori bourgeoisie through

Treaty settlements. Iwi capitalism is no different

from Pakeha capitalism. It treats the working

majority as wage slaves. To ensure that Maori

workers can benefit from the land stolen by

colonials we need to unite them with Pakeha,

Pacifica and other workers as one class for a

socialist revolution.

The road to revolution is blocked by the Labour

Party which relies heavily on the votes of workers

including the majority of Maori and Pacifica

workers. The leadership of the Labour Party are

petty bourgeoisie that reject its historic class base.

They stabbed Cunliffe in the back when he went to

Maori and Pacifica to rebuild the worker base.

Labour cannot represent both workers and a middle

class aligned to the bosses. We are for a split along

class lines so that the petty bourgeois are left

fighting with the Greens, Maori Party and NZ First

for the ‘middle’ while the workers unite as a

proletariat conscious of their its destiny.

We are for a mass workers party that puts the rights

of Maori and Pacifica, along with women, migrant

workers and all oppressed groups, at the centre of its

program. Today Mana is only one candidate for that

party and only if it sticks to its class based program

and does not deviate into rotten compromises with

the Maori Party, or with any other capitalist party.

Mana could become the party that unites the

working class as a force that can overthrow the

rotten capitalist system in NZ and join the popular

struggles around the world for a socialist future

where planned production to meet our social needs

takes over from social production for private profits.

Geek Socialism? Out of the Greek crisis comes the theory of Geek

socialism. Yanis Varoufakis thinks that imperialism

can be a win-win. He also thinks that a new left must

join forces with ‘geeks’ – the generation of high tech

savvy youth who are the ‘new vanguard’. Is this a

theory of Geek socialism? Well, Geek something.

Arch Geek Edward Snowden joins the fray with his

view that automation will deprive people of an

income unless a UBI is introduced. So is this the

technical solution to avert social crisis. "As a

technologist, I see the trends, and I see that

automation inevitably is going to mean fewer and

fewer jobs. And if we do not find a way to provide a

basic income for people who have no work, or no

meaningful work, we’re going to have social unrest

that could get people killed. When we have

increasing production - year after year after year -

some of that needs to be reinvested in society."

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We can excuse Yanis and Edward for plugging a

sort of high tech distributional socialism, but former

Trotskyist Paul Mason should know better. Sharing

a similar queasy-Marxist standpoint with his mate

Yanis, veteran reporter Paul Mason has written a

book that celebrates Geek socialism – except he

doesn’t mention socialism. He summarises his new

book, Postcapitalism: a Guide to our Future in this

interview.

Mason argues that automation is supplanting human

labor power and thus reducing value creation to

zero. Capitalists will not survive zero value

production (no profits!) nor will the proletariat (no

wages!) Marx anticipated this trend. Long before

zero value production the destitute proletariat would

rise up and seize the machines and harness them to

produce use values for all.

Michael Roberts has written a critique of Mason as a

utopian thinker. Essentially a re-run of the utopia

that intellectuals (geeks) will find a technical fix that

will make capitalism ‘post’. He challenges the

assumptions of technical fixes such as robots and

artificial intelligence (AI).

The main point we take out of this debate is that

technology (which is the past accumulated labor of

workers) under capitalism serves the interests of

capitalists. A techno transition to postcapitalism

without the seizure of power is a dystopia.

Capitalism has to be overthrown so this technology

can b put to social use under socialism.

We say: in this social revolution the geeks (hackers and whistleblowers unite!) will play a vital role in the vanguard of the proletariat!

Health & Safety? Not under crisis-ridden capitalism!

The National led government propaganda machine

spins & twists but cannot hide the reality: it is

completely for bosses profits at the expense of

workers lives (health and safety). Its anti-union

health & safety law is pro-farmer, forestry and small

business. It is a mockery of any sense of health and

safety that some of the most dangerous industries are

exempt from elected safety representatives.

The Labour party is once again ineffectual in

campaigning against this rotten ‘health and safety”

law. Since they are not a party of worker activists

they cannot take direct political action against these

attacks on the working class. The law really gives

license for the bosses to work workers into the

grave.

The bosses’ fear of unions is a fear of workers

taking control of production. Any possibility of

workers control of health & safety could put limits

on how the bosses screw their profits out of their

workers.

The reality is the bosses want to and need to

maximise profit. The bullshit arguments thrown

around parliament are nonsense when you see

through to the bosses maintaining their “right” to

screw workers. Injured and dead workers will be

replaced and profit production (labour exploitation)

continues. Without workers there would be no

profits; but with a managed level of unemployment

– a “reserve army of labour” is available to replace

the sick, injured or dead workers.

Unions have led the fight for elected worker

representatives to have power under law - power to

shut down production, until safety is assured. This is

the limit of the previous law, and was shown to not

be enough. The pressure of production in small

workplaces and the lack of strength and solidarity of

unions meant that reps were vulnerable to pressure.

As the Pike River disaster proved, owners and

contractors will push for work to continue in coal

mines in spite of inadequate monitoring equipment,

rescue equipment, etc. Health and safety reps are

under pressure to avoid shutdowns. Workers too

have reasons to avoid good health and safety

practices. Because wages are so low, they need a 60-

70hour week just to make ends meet, machine

operators and drivers will skip breaks adding to

fatigue and accidents. Workplace drug testing is a

distraction when fatigue (low wages & so long

hours) is a bigger killer.

Even a strong union cannot stop accidents. As the

history of unions proves, they are relatively

powerless against the state backed industrial law.

The reality is that under the capitalist system where

the drive is for profits, workers are expendable in the

process. Short of workers control of production,

lives will continue to be sacrificed. So we need to

get rid of the capitalist system. For effective

workplace health & safety, we need socialism.

Socialism – where production is organized to meet needs. And one of those needs would be the health and safety of the workers!

Class Struggle 114 Spring 2015

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Is a China meltdown the end of capitalism? The global ruling classes are beginning to panic about the slowing down of China. Will a China ‘meltdown’ mean a new ‘Great Depression’ and even the end of capitalism? This question has been debated furiously throughout the history of capitalism each time crises led to depression and war. Since the early 20th century capitalism has destroyed the productive forces to survive. Each crisis brought deeper depressions, more destructive wars, and abortive revolutions. The question posed again and again was: socialism or barbarism? Today, as we face another ‘Great’ depression and the threat of a Third World War, the question is posed again: is this the end for capitalism? We argue that since WW1 capitalism was ripe for socialist revolution. But capitalism can always stagger on like a violent drunkard to another economic crisis and world war, unless there is a Marxist party leading the world’s workers to its overthrow. This time we know the crisis is terminal because the survival of capitalism means certain ecological disaster: Socialism or Disaster!

We have been there before!

Marxists know that capitalism was objectively ripe

for revolution at the turn of the 20th century.

Capitalism had ceased to function as national

markets competing with one another. Rival nations

now exported capital to other countries to counter

falling profits. This

led to the epoch of

imperialism

characterised by

monopoly state

capitalism that

competed for the

world market by

means of

diplomatic, trade

and military wars.

Not only was

monopoly

capitalism

destructive

compared with its progressive 19th century phase, it

was holding back the huge productive potential of

socialism. Objectively capitalism was ripe for

overthrow as its worsening crises sparked

revolutionary uprisings. However, rotten

imperialism would not fall over by itself. It had to be

pushed over by the class conscious proletariat led by

a Marxist vanguard party.

This was proved in the Russian revolution which

ended the First Imperialist War when the warring

imperialist powers buried their differences to invade

the new Soviet Union to smash the revolution. They

were defeated by the Red Army under Trotsky but

the revolution was contained in Russia and failed to

spark a victorious world revolution. In the other

imperialist countries ripe for revolution, the Marxist

parties had degenerated into tame bourgeois tools

bought off by

colonial super-

profits.

The reason was not

the ‘objective’

factor of backward

workers in every

country who did

not spontaneously

throw out their

treacherous leaders

and rise to

revolution. It was

the missing

‘subjective’ factor

of the revolutionary party necessary to break them

away from petty bourgeois misleaders. Only in

Russia had a Marxist vanguard party - the

Bolsheviks - become strong enough to build a

vanguard of the proletariat and win over the

reformist majority in the soviets to form a Workers

Government.

But even after the bosses and their lackeys ganged

up on the Soviet Union and suppressed revolutions

elsewhere, the capitalists hadn’t removed the threat

of revolution. To smash the workers movement in

Europe and America they used fascist mobs and

Class Struggle 114 Spring 2015

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mercenaries like the Pinkertons to kill the workers

leaders and smash their organisations. Again fascism

failed to destroy the working class in the great

depression and once more the imperialists went to

war driving their workers to the fronts to slaughter

one another.

The defence of the USSR led to victory in the

Second Imperialist war at the cost of 30 million

dead. But once more the worldwide spontaneous

uprisings never led to world revolution. What was

missing was the Marxist international capable of

mobilising the power of the world’s workers. The

post war revolutions were led by Stalinist

bureaucracies on the back of the Soviet Union and

formed a bloc of Soviet states. They were not

Marxist revolutions based on a class conscious

proletariat. They could not create a world revolution,

and under pressure from global imperialism in crisis,

restored capitalism in the late 80s and early 90s.

The return of Russia and China to global capitalism

changes nothing. Because they have become new

capitalist imperialist powers they cannot prevent the

current crisis from deepening. They too are subject

to crises as we explain below. The crisis this time

will be even more destructive as it will go beyond

depression and war and threaten human extinction.

For that reason we can state in advance that this

crisis is terminal. Depressions and wars will not buy

capitalism more time.

Because we have been there before, we know that

the international proletariat cannot overthrow

capitalism unless it becomes conscious that the

alternative is socialism or barbarism. Socialism

means survival. Capitalism means death.

The China Crisis is the key

What is a structural crisis of capitalism? For

Marxists crises are interruptions in capital

accumulation caused by the law of the tendency of

the rate of profit to fall (LTRPF). It assumes the law

of value (LOV) which holds that the value of

commodities is equivalent to the socially necessary

labour time (SNLT) required to produce them. This

includes the commodity labour power that creates

more value than its own value (v) as surplus value

(s). Increasing the rate of surplus value (s/v) has

historically caused an increase in the composition of

capital invested in plant, machinery and raw

materials that do not contribute to new value,

constant capital (c) relative to the value of labor

power which does create new value, hence variable

capital (v).

Since c increases relative to v, the LTRPF results

from the inability of total capital invested to extract

sufficient surplus value to make a profit (p= s/c+v).

The crisis therefore can only be solved by destroying

sufficient c and v to restore the rate of profit. This is

the market solution of orthodox economists like

Wolf Richter to end the structural recession. Thus

China’s rising cost of labor i.e. declining rate of

productivity (exploitation) causes a decline in

investment and output. A slowdown in GDP is a

problem because it means China is not producing

enough surplus value to return a profit on its huge

surplus of capital stock. Hence the market solution is

to wipe out much surplus capital and devalue c,

plant, raw materials and v, wages, to increase

productivity to return a profit on capital.

The Left Keynesians on The Daily Blog can see a

‘Great Depression’ coming when the China

‘meltdown’ hits the red line. The solution is more

state intervention to boost consumption and

stimulate investment in production. Yet since 2008

the major capitalist states have intervened to bailout

the banks rather than boost consumption by creating

jobs and raising productivity. Nevertheless, left

Keynesians all over the world still have illusions in

China as the state capitalist saviour of the global

economy leading the BRICS nations as the

‘progressive alternative’ to ‘neo-liberalism’.

For Marxist economists like Michael Roberts

capitalist crisis cannot be resolved by state

intervention as that postpones the destruction of

surplus capital. The crisis of falling profits has not

been fixed by the market or state intervention

because workers have refused to submit to greater

exploitation necessary to restore the rate of profit.

The structural crisis since 2008 is therefore a Long

Depression because the conditions for a return to

acceptable profits in production have not been

created. This can only mean that to resolve

capitalism’s crisis, further attacks on workers jobs,

wages and living standards must follow. Only by

increasing the rate of exploitation (s/c+v) will

capitalists create the conditions to reinvest in

production to accumulate capital.

China’s decade-long burst of expansion is

succumbing to a crisis caused by the LTPRF. The

sum of surplus value it can pump out of its workers

at home and in its 'trading partners' is insufficient to

realise a profit on its stock of surplus capital. This

Class Struggle 114 Spring 2015

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proves beyond doubt that China is a capitalist

economy. State intervention can only postpone

briefly the need to devalue or destroy surplus capital.

As explained above, the LTRPF results from the law

of value (LOV) which states that ‘socially necessary

labor time’ determines the value of commodities.

China cannot evade the global LOV or the LTPRF.

Already we see China devaluing the Yuan to boost

its declining exports. It is already well into a

massive restructuring of old inefficient plant and

technology and a drive to cuts wages and conditions.

At the same time it is ramping up its military

spending and alliances.

There is every sign that China too despite its large

state sector must embark on depression and war to

solve its crisis. Chinese imperialism can only

survive at the expense of attacking its workers and

those of its trading partners. This creates the

conditions for international solidarity between the

workers in China and its trading partners including

the BRICS to refuse to pay for capitalism’s crisis.

Such class solidarity demands a program and a party

that can lead resistance to the deepening austerity

and open the road to a socialist solution to end

capitalism’s terminal crisis.

Transitional Program for workers power

Capitalism can survive only by destroying social

value and the ecology by means of depressions and

wars. This means inter-imperialist rivalry to grab

what is left before the ecology collapses. The

increasing tension between the two big blocs of

imperialist powers led by the US and China are

already causes many proxy wars any of which can

break out into a spiralling Third World War.

The task of the Marxist Party with a Transitional

Program is to guide the working class in struggle

from the urgent immediate demands to stop paying

for the bosses’ crisis stating clearly in advance that

this will require a struggle for power that must end

in either a workers revolution or capitalist counter-

revolution. The program is therefore summed up as

‘preparing for power’.

We must resist being dragged into a proxy wars that

are breaking out everywhere and in a Third World

War. We resist wars by opposing drafts, and calling

for soldiers to refuse to fight. We must resist all

attacks on our jobs, wages and living standards. We

will learn quickly that this means workers taking

control of production through strikes and

occupations.

To do this we need to organise strike

committees and to defend occupations with

armed pickets. Movements to stop ecological

destruction will also require mass pickets and

strikes.

This will pose the question of who rules the

state and society. Will it be the working

masses or the tiny ruling class and its

mercenaries? The state forces will attempt to

smash strikes, occupations and pickets to

destroy revolution at all costs.

This struggle for power can be resolved only

by a revolutionary seizure of power or a

fascist counter-revolution. We are for the

victorious revolution and a Workers

Government!

A Workers Government based on workers

councils and militias will have the power to

act quickly to stop capitalist destruction of

the world economy and ecology. The market

will be replaced by democratic plans that

uses workers control over production,

distribution and exchange to plan production

for our basic needs including the survival of

species threatened with extinction; replacing

carbon extraction with renewable energy;

closing down nuclear plants; etc.

None of this will be possible unless the

revolution is global. The world-wide

proletariat needs to overcome the divisions

between nations, employed and unemployed,

between ethnicities, cultures and religions

etc., which are all created by the bosses to

divide and rule us.

We need to link local, national and

international struggles to defeat the power of

the imperialist ruling classes. There can be

no such thing as socialism in one country in a

capitalist world!

In every country there needs to be a Marxist

party that is part of a world party of

socialism to raise the red flag of Marxism

and the Transitional Program for world

socialist revolution!

Our best hope is that the Chinese crisis of falling

profits will meet with the resistance of the 1 billion

workers as the vanguard of the multi-billion workers

of the world to lead the fight for an international

socialist revolution to stop the destruction of our

civilisation and ecology and rescue humans and

many other species from imminent extinction.

Class Struggle 114 Spring 2015

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Capitalism on FIRE! We review Jane Kelsey’s new book The Fire Economy: New Zealand's Reckoning and find that it is about ‘neo-liberalism’ and almost nothing about capitalism. We argue that capitalism is the problem not neo-liberalism and that what we need is not reform but revolution.

It’s the same theme that Kelsey introduced in her

1995 book The New Zealand Experiment: A World

Model for Structural Adjustment that blamed the

deregulation of the Fourth Labour Government on

the ‘neo-liberal revolution’ which replaced

Keynesian ‘intervention’ with the rule of the market.

Neo-liberalism gave rise

to ‘financialization’ as the

FIRE economy (Finance,

Insurance and Real

Estate) became separated

from society and the ‘real’

economy. Today neo-

liberalism and the FIRE

economy are ‘embedded’

and difficult to remove.

Yet Kelsey argues that the

Global Financial Crisis (GFC) exposed

neoliberalism is bankrupt and open to challenge.

Neoliberalism having replaced the ‘epoch’ of

Keynesian intervention in the 1970s is today facing

a challenge to its existence. Kelsey outlines how the

unique brand of neoliberalism in NZ can be

politically contested and ‘disembedded’ to re-

regulate the market to make it serve a more equal

society.

Against Kelsey, we argue that neo-liberalism is a

symptom of capitalism facing a terminal crisis

having long ago reached the limits of its historic role

in advancing human progress. For the last 100 years

or capitalism has gone into decline and is

threatening to destroy not only the social basis of

human freedom but also the extinction of the human

among many other species. We cannot put out the

FIRE economy without replacing capitalism with a

new society that serves the needs of humanity and

nature.

The Neo-liberal counter-revolution

First, we argue that neo-liberalism, like

Keynesianism before it, is a symptom of capitalism

in crisis. These are not sequential ‘epochs’. They are

attempts to resolve the fundamental crisis of capital

caused by the contradiction between private property

and social production that manifests itself as a crisis

of falling profits, or the law of the tendency of the

rate of profit to fall (LTRPF). See Michael Roberts

defence of the LTRPF against David Harvey.

The LTRPF causes a shift of surplus capital from

production to speculation.

But such crises cannot be

resolved until sufficient

surplus capital is destroyed

to restore profitable

investment in production.

Kelsey recognises that there

was a shift in capital

investment from industry to

finance since the 1970s but

offers a Keynesian

explanation for this.

“The FIRE economy is a metaphor for the

fundamental shift in global capitalism since the

1970s. Finance has replaced industry as the driver

of wealth creation in affluent countries –a

transformation known as financialization.

Neoliberal ideology rules and institutions acted first

as the midwife and then as the guardian of this

economic order...Why did people, companies and

institutions with spare capital become increasingly

reluctant to invest or re-invest in manufacturing

which was plagued by low profits, delay and risks?”

What accounted for such “poor returns on

productive investment” leading to ‘financialisation’?

Kelsey opts for the Keynesian

‘underconsumptionist’ explanation of the late Bruce

Jesson, and the US ‘Marxists’ John Bellamy Foster

and Fred Magdoff. They argue that low wages lead

to falling demand and a move of capital away from

production to finance. Keynesians claim that

capitalist crises are caused by wages being too low

depressing consumption and resulting in the

overproduction of goods and hence a falling rate of

profit on capital invested. Keynes answer to falling

profits was to use the state to create employment,

boost wages and consumption and thus encourage

capitalists to invest in production.

Class Struggle 114 Spring 2015

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Marxists proved that the underlying cause of crises

was not low (or high) wages but a fall in surplus

value relative to capital invested. That is, capitalists

could not exploit workers hard enough to get a

satisfactory profit on their investment. The only way

that such a crisis could be resolved for the capitalists

was by the massive destruction of old plant and

machinery and the driving down of workers living

standards by depression and war. This allowed the

modernisation of plant and machinery combined

with low wages to drive up the rate of exploitation

and hence the rate of profit and accumulation of

capital.

Marxists proved that in NZ, like the rest of the

world, low wages were not the cause but an effect of

the Great Depression of the 1930s. Keynesian

intervention before, during and after WW2, did not

result in the post-war boom, nor could it prevent its

collapse in the 1970s. What made the post war boom

possible was the depression and war which

destroyed old technology and replaced it with new,

and defeated the international proletariat driving

down its wages and conditions. And Marxists

proved that the post war boom ran out of steam not

as a result of falling wages but falling profits. Profits

fell because the production of surplus value (the rate

of exploitation) could not keep pace with total

capital expenditure.

The crisis leads to depression and war

The only solution to a structural crisis of falling

profits is to destroy or devalue surplus capital (both

constant and variable) sufficient to increase the rate

of exploitation. These are collectively called

‘counter-tendencies’ to the LTRPF. Historically they

mean a pattern of activity by which surplus profits in

the imperialist countries are exported to colonies and

semi-colonies to realise super-profits by exploiting

cheap raw materials and labor power first by means

of trade and then by establishing capitalist

production. To reap the full potential of such super-

profits all national barriers to the free movement of

commodities and capital have to be broken down.

During the Great Depression and WW2 many

colonies and semi-colonies began to adopt economic

nationalist barriers to free trade and capital flows in

an attempt to ‘protect’ their economies from the

dominance of imperialist super-exploitation.

This is what neo-liberalism is – the de-

industrialisation of old technology in the imperialist

countries and the breaking down of national barriers

to the shift of production to semi-colonies to exploit

cheap raw materials and labour power. The countries

of the indebted ‘South’ and ‘East’ had their assets

stripped and workers living standards destroyed –

just like Greece today. This process also included

the SU and China as they opened up to capitalism.

In NZ this is what happened when the Fourth Labour

Government replaced Muldoon in 1984. Muldoon

had attempted to resist IMF ‘structural adjustment’

imposing conditions on managing the national

economy. He did this by trying to substitute for

imports such as oil and control the flow of capital,

but the IMF pulled the plug and threatened to

foreclose on NZs debt. The Labour Government got

the message and began to follow the dictates of the

IMF to open the economy to force it to compete on

the global market. This was not an ‘experiment’ as

Kelsey continues to call it, nor was it a ‘revolution’.

Like all capitalist attempted solutions to crises of

overproduction, it was a counter-revolutionary

attack on a sovereign nation’s ability to manage its

economy through capital controls, import

substitution and the nationalisation of key assets.

Yet on a global scale the forced ‘recolonisation’ of

capitalist production in the ‘South-East’ was

insufficient to soak up the trillions of surplus capital

which continued to ramp up speculation in existing

commodities and assets to new heights. This is what

underlies ‘financialization’ – it is not a structural

change in capitalism away from industry, but the

failure of depression and war to create the conditions

for a return to profitable production in industry.

It was the failure to turn Russia and China into semi-

colonies capable of soaking up these surplus trillions

allowing these countries to harness their own cheap

raw materials and labor power and emerge as new

economic powerhouses. With the bursting of

speculative bubbles in the West in 2007, the

productive growth of the new imperialists in the East

(with their BRICS attachments) temporarily

prevented the GFC from becoming a massive global

depression.

FIRE and the GFC

The FIRE economy therefore is living proof that

capitalism failed to overcome the structural crisis of

overproduction in the West that began in the 1970s.

The return of capitalism to the former Soviet union,

China and Indo China in the 1990s contained the

Asian Crisis and Dotcom collapse but could not

stave off the GFC in 2008. The GFC is the surface

expression of the explosion of the speculative bubble

Class Struggle 114 Spring 2015

10

that could not be resolved earlier by the ‘neo-liberal’

counter-tendencies to the LTRPF. So the GFC was

not the result of ‘deregulation’ as agued by the

Keynesians. Kelsey relies heavily on Bellamy Foster

and Magdoff. Let’s see what they have to say about

the GFC and then at the Marxist critique.

Bellamy Foster and Magdoff think that the

stagnation of production is behind financial

speculation. The stagnation is caused by falling

consumption which leads to falling profits. They are

wrong on what causes that initial stagnation. The

authors draw on Baran and Sweezy and even claim

to go back to Marx. However, anyone who followed

Baran and Sweezy in the 1940s and 1950s knows

that they junked Marx for Keynes. For them the

crisis of falling profits resulted from monopoly

finance capital squeezing wages and consumption.

Marx treated under-consumption (of commodities

and capital) as due to a deeper cause of crises - the

LTRPF. Michael Robert’s shows that the LTRPF

caused the onset of crisis in the 1970s not lack of

consumption. The Keynesian policy of inflating

wages to boost consumption ended in stagflation as

profits were squeezed out of existence. Because the

Keynesian policy only addressed an effect of crisis it

could not counteract the cause of crisis, the LTRPF.

It was the failure of neo-liberalism to cut costs

sufficiently to restore the post-war boom level of

profits is what led to ‘financialization’ – the

speculation of surplus capital in existing assets,

driving up their prices and creating asset bubbles.

The expansion of credit fuelled consumption further

until the speculative bubbles burst in the GFC.

Michael Roberts also shows how the QE

(quantitative easing) since 2008 has led to hoarding

and further speculative investment rather than the

destruction of surplus capital and a return to pre-

crisis capital accumulation.

All this means that there is no way capital can spend

its way out of its crisis. Sooner or later the $trillions

of fictitious capital has to be devalued and destroyed

until the conditions for the return to profits are

restored. We are back at depression and war as the

only solution for capital to temporarily resolve its

crisis.

Reform and Revolution

It becomes clear that Kelsey’s solution to the FIRE

economy does not go to the roots of the problem.

Because she adopts the Keynesian view that crises

can be overcome by a policy of redistribution and

state regulation she expects that neo-liberalism and

the FIRE economy can be re-regulated and

‘disembedded’. This raises the question as to how

far the capitalist state can be reformed. Kelsey

agrees that the capitalist state ultimately serves only

capital. But neo-liberalism is a ‘paradigm’ or

‘model’ of capitalism that Kelsey thinks can be

regulated out of existence without the need to

overthrow capitalism. For that reason, and perhaps

for deeper reasons, revolution is off the agenda. So

let’s see how revolutionaries prove that reforms such

as Kelsey advocates in Aotearoa/New Zealand can

only be implemented by socialist revolution.

We need to explain the difference between the

parliamentary ‘political contest’ and the

revolutionary Transitional Program that advances

immediate demands to empower the proletariat to go

beyond reforms to overthrow capitalism. Parliament

is the democratic facade of the capitalist state. Social

democracy was born to contain the rise of militant

labour movement that threatened to overthrow the

state. Ever since, parliament and its laws, have been

a leg-iron on militant labour. Social reforms have

always taken second place to profits.

Today global capitalism is facing a crisis over its

future existence and can only survive by destroying

all the past social gains won by working class

struggle. There is no room for reform or bourgeois

democracy. Capitalism must be destroyed or

humanity will be destroyed. We can see evidence of

this everywhere where moderate struggles are met

with armed repression driving workers to militant

resistance.

The road to revolution is mapped out by the

Transitional Program that draws on the transitional

method of Marx, Lenin and Trotsky. It starts with

immediate demands for what workers need to live,

such as jobs, a living wage, free housing, health and

education etc. As these demands are met by state

repression at every point workers illusions in a

peaceful, parliamentary road are put to the test,

proving that the struggle for these demands can only

be won by the seizure of state power.

As these struggles develop workers become fully

conscious that to live, even to survive as a species in

the face of global warming, capitalism must die. The

problem is no longer seen as neoliberalism or the

FIRE economy; capitalism is on fire, threatening to

destroy humanity and nature. The fire can only be

put out by an international socialist revolution.

Class Struggle 114 Spring 2015

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For a Workers Socialist Federation of Eurasia! A Marxist critique of Escobar's 'Eurasian Big Bang'

Pepe Escobar on the occasion of the 7th Summit of the BRICS (Brazil, Russia, India, China, and South Africa) in Russia has written another excellent analysis of the development of the Eurasian imperialist bloc emerging as a global challenge to the US imperialist bloc. Except that he does not call Russia and China imperialist. Rather for him they are newly emerging great powers that are capable of countering the dominance of the US and its crony states.

Escobar’s article first appeared in Tom [Engelhart]

Dispatch and has been widely republished in pro-

Russian leftist sites including Counterpunch, Le

Monde Diplomatique and Russia Insider, showing

his political leanings.

Escobar like most the

official left today sees

Russia and China as the

champions of the

oppressed masses in

challenging the world

imperialist domination

of the US.

As we have pointed out

many times there is

nothing progressive

about the rise of Russia

and China as global

powers. Those who have

illusions in these states

offering a more worker

friendly future to that of

US global dominance are dreaming. They are

offering what some of us on the old left call a

reactionary utopia. That is, a future state that far

from meeting the hopes of workers and all oppressed

people to escape the destructive decline of global

capitalism, offers a future of inter imperialist wars

threatening a Third World Warm not to mention an

uncontrolled climate meltdown.

Permanent Revolution

Rather than fall into this trap we urgently need an

action program to unite workers and oppressed the

world over to oppose and resist imperialism in all of

its shapes and forms East and West, US, EU and

Eurasian, and to fight for a new socialist world

society.

Our program rests on the foundations of the

revolutionary communist history of struggle over the

past two centuries. We can summarise that history as

the history of Permanent

Revolution of the

proletariat against the

permanent counter-

revolution of the

bourgeoisie.

That is why for us

Trotsky's Transitional

Program of 1938 still

serves as the best recent

attempt to outline a

program for the

proletariat to advance its

class independence

against the capitalist

ruling class. It condenses

the lessons gained from

past revolutions and

counter-revolutions and

allows us to make a running balance sheet of the

advance of the proletariat as the only revolutionary

class capable of overthrowing capitalism today.

In summary, capitalism has since the early 20th

century entered into its period of decline in which

capital is concentrated into the hands of ever larger

monopoly firms backed by the imperialist states.

The imperialist epoch represents capitalism's attempt

to prolong its life by dominating the global market

with rival powers super-exploiting and oppressing

workers to extract by force the remaining value it

can from their labour power and the limited

resources of the earth.

The main contradiction therefore in the imperialist

epoch is that of the workers and oppressed against

the concentrated wealth and power of the imperialist

Class Struggle 114 Spring 2015

12

ruling classes in the dominant states. A secondary

contradiction is that between the national

bourgeoisies that serve imperialism by oppressing

the workers in the dominated states to extract

maximum value from their labour power.

Completing the Permanent Revolution today is the

objective of those proletarian forces that can draw

on past victories to advance the struggle against the

imperialist ruling classes and their national

bourgeois agents. These include the revolutionary

traditions of the four successive revolutionary

internationals before they degenerated.

The bourgeois counter-revolution consists of all the

attempts by the imperialist rulers and their bourgeois

agents, including the bureaucratic agents inside the

working class, to defeat the revolutionary gains of

the Permanent Revolution by dividing and strangling

the workers movements in popular fronts disarming

them before the fascist counter-revolution

The popular front with Russia and China

The most dangerous popular front that is being built

today to lock workers into alliances with their class

enemy is that between the BRICS, the Bolivarians,

and the fake Trotskyists, who attempt to disguise

this global popular front as an anti-imperialist united

front. This global popular front ties workers in many

countries to the national bourgeois agents of Russian

and Chinese imperialism. Escobar's role in this is as

a gifted journalist who presents Russia and China as

part of a growing multipolar Eurasian bloc limiting

the destructive role of the US bloc and justifying a

global popular front.

Yet far from posing a progressive alternative to the

US hegemony based on mobilising workers

revolutions this global popular front is part of the

counter-revolution. Russia and China are recognised

by the US as new imperialist rivals to its global

interests. As a result, proxy trade, diplomatic and

military wars between the two rival blocs are

blowing up in South Sudan, Yemen, Iraq, and

Ukraine. Therefore the key question today posed for

workers everywhere is that of defending with the

Eurasian bloc against the US bloc, or, opposing both

blocs equally.

To defend the Eurasian bloc is part of the permanent

counter-revolution because it supports Sino-Russian

imperialism in all conflicts with the US bloc. It

disarms tens of millions of workers from forming a

united anti-imperialist front to overthrow the

imperialist ruling classes in the West and the East.

Let us begin with those highly contested states

where the US, EU and Sino-Russian interests come

into conflict, notably Iran, Greece and Ukraine. The

main rivalry between the two main imperialist blocs

is complicated by the secondary imperialist powers

caught between the two main blocs. But as Escobar

describes, it is the US and the Russia and China who

are the major players in the "great game" of

controlling "Greater Eurasia" including Europe

itself.

Iran goes with the SCO

Escobar argues that the US bloc is losing the race for

control of Eurasia. In the same week that it did a

deal with Iran to lift sanctions in exchange for

renouncing nuclear weapons, the BRICS, the SCO

(Shanghai Cooperation Organization) and the EEU

(Eurasian Economic Union) were meeting in Russia

for the 7th annual BRICS summit and the 15th SCO

summit. At that meeting India and Pakistan joined

the SCO and Iran will join as soon as its sanctions

are lifted. Iran will then be a member of the SCO

alongside four nuclear armed powers which are also

the major economic powers in Eurasia.

More important the EEU (Russia, Armenia, Belarus,

Kazakhstan, and Kyrgyzstan) is creating free trade

agreements with Mercosur (Argentina, Brazil,

Paraguay, Uruguay, and Venezuela) and separately

with China, Iran, India and Pakistan. The BRICS

bank to replace the World Bank, the BRICS New

Development Bank (NDB), and the Asian

Infrastructure Investment Bank (AIIB), are investing

in numerous joint ventures to link Europe and Asia

along new transport corridors ('new silk roads')

spanning Asia and right into the heart of Europe.

In the 'great game' the EU is marginalised and torn

between the two big blocs. Germany and France

cannot stop the breakup of the Eurozone as the

Class Struggle 114 Spring 2015

13

PIIGS and the recently joined EU states become

increasingly divided up between the rival big

powers. The PIIGS and the former Eastern European

members of the Soviet bloc, Serbia, Macedonia and

the Ukraine, are the main prizes in Europe, while

Iran, Turkey, Pakistan, Afghanistan, India and Indo-

China are the prizes on the Asia continent.

Greece opens the socialist revolution in Europe

We have seen how the US has been outmanoeuvred

over Iran. Let us look at the cases of the other two

key contested nations caught between the US and

Eurasian bloc, Greece and the Ukraine. Greece is

important because it signals the decline and fall of

former small imperialist powers within the Eurozone

and their reduction to financial colonies or semi-

colonies of the rival imperialist powers. Ukraine is

important because as an historically divided state

between Europe and Russia, and after a period as a

soviet republic between 1921 and 1991, is once

more reduced to a financial colony fought over by

the US, Germany and Russia.

The EU will break up in much the same way that the

former Yugoslavia broke up and the Soviet Union

itself broke up. Germany (like the US, Russia and

China) doesn't want to bail out bankrupt states, it

wants the cheap assets

and labour power of new

colonies. To maintain its

profits it must destroy

the value of capital and

state assets in the PIIGS

and drive down wages to

starvation levels. Greece

has been bankrupt for

years and is now forced

to sell its public assets to

pay for its debts.

However, it won't end

there because the IMF

and the BRICS bank are also involved in the

scramble to strip Greece's public assets and get

access to its cheap labor.

Revolutionaries must condemn Syriza which

continues to make the workers pay for Germany's

crisis over the dead body of the 'social Europe'.

Similarly the KKE illusion of an independent Greece

bailed out by Russia and China must be destroyed.

Only a break from imperialism can revive the

permanent revolution in Greece. In this situation

workers have to build independent councils and

militias to occupy and defend all state and major

private assets from asset stripping by Germany, the

US and Russia and China and defeat a fascist coup.

To do this it will be necessary to smash the

bourgeois state and bring a workers' government to

power that can socialise imperialist and capitalist

property and implement a socialist plan.

Ukraine: for an Independent Socialist Republic!

The Ukraine is currently the main flashpoint of the

clash between the major imperialist blocs and

heating up the trade, diplomatic and military

conflicts. Ukraine has long been divided between

European powers and Russia. The victory of the

Russian Revolution was the catalyst for an

independent Soviet Ukraine in the East while the

West was occupied by the Poles. Stalin's invasion of

West Ukraine in 1939 in a deal with Hitler was

defended by Trotsky as it threw out the bourgeoisie

and constituted a buffer for the defence of the

USSR. However Stalin's 'fascist' methods of

oppressing the ‘unified’ Ukraine during and after the

war were not defended by Trotskyists. It was

necessary for Ukraine to have a political revolution

to throw out its Stalinist caste (as in the rest of the

USSR) and create the conditions the workers rule in

healthy workers states.

Trotsky defined the

political revolution with

the slogan "For an

Independent Soviet

Ukraine". This ultimately

failed with the restoration

of capitalist property in

the USSR in 1991

reviving the split between

West and East Ukraine in

a new 'independent'

bourgeois Ukraine. The

oligarchs in the West who

grabbed former workers

property wanted to 'return' to European imperialism,

the oligarchs in the East wanted to retain their ties

with capitalist Russia. The Maidan coup engineered

by the US in 2014 brought the pro-EU bourgeoisie

to power backed by extreme right neo-fascists.

Popular opposition to the coup in the East took the

form of defence of a united Ukraine against the EU

and NATO and against annexation by Russia.

The Kiev regime scapegoated the East as pro-

Russian separatists in the manner of the Crimea

which was annexed by Russia. Yet the Russian

speakers of the East wanted only to oppose the Kiev

Class Struggle 114 Spring 2015

14

coup regime and defend their cultural and political

autonomy which went back to 1921. The puppet US

Kiev regime has constantly dodged this issue and

blamed Russia for intervening in the war in the East

in desperation to get US and EU bailouts to rescue

the bankrupt economy by privatising its assets and

financing a NATO bulwark against Russia.

In reality the US and EU

imperialists as well as

the Russians don't want

to spark a wider war in

the Ukraine. They want

to pull Ukraine out of

the Russian orbit (EEC,

BRICS, SCO) and bring

it firmly into the EU.

Russia wants to maintain

its influence over

Ukraine but not at the

expense of a war in

which Ukrainian

workers unite to

overthrow the Kiev regime and destabilise Russia

itself. So the war in the East is now no more than a

pretext to engage in more diplomatic, trade and

military manoeuvring on both sides. The fascist

paramilitaries are used to attack the Donetsk and

Luhansk 'republics' while Russia has its own agents

keeping the lid on the workers armed defence from

breaking out into a revolutionary movement in the

East.

Against the Stalinophobic left that defends the Kiev

regime from the legacy of Russian Stalinism, and the

Stalinophile left that backs the Russian imposed

leadership in the East who are for secession and

annexation by Russia, we take Trotsky's position on

Ukraine. We are for the workers of the East to make

a united front with workers of the West against the

Kiev regime and bring the war to an end. We are

against the direct intervention of the US and NATO

in West Ukraine and against the direct intervention

of Russia in the East. We are for a united Ukraine

workers socialist revolution the removes the

oligarchic pro-fascist regime and puts in place a

Workers and Peasants government able to build an

Independent Soviet Ukraine.

Either an imperialist or a workers Eurasia!

It's clear from Escobar's very catchy enthusiasm for

a BRICS bloc as an alternative to US hegemony that

the greatest danger to the world's workers is to

mistakenly tie their revolution to the new great

powers, Russia and China. Russia and China are not

'progressive' in offering workers a peaceful, gradual

transition to market socialism. They form a rising

imperialist bloc that challenges the dominance of the

US, not on behalf of workers, but as the successors

to the US global

dominance. Russia and

China no less than the

US and its allied powers

are in a fight to the death

to grab what remains of

the earth's resources of

land, labour and energy

and to do what is

necessary to extract more

surplus value to return a

profit on their multi-

trillions of accumulated

capital assets.

As we have seen in the

cases of Iran, Greece and Ukraine, where these two

giant imperialist blocs clash, such dependent nation

states must be being fought over by the rival

imperialist blocs. Despite its nuclear deal, Iran has

been lost to the US. This raises the stakes for a

showdown between Israel and Iran. But as Escobar

says, any attacks by the Israeli/neo-con lobby on

Iran will now be against the SCO. Not as Escobar's

anti-imperialist security organisation of course, but

as the armed forces of the Russia/China bloc (now

including Kazakhstan, Kyrgyzstan, Uzbekistan, and

Tajikistan, India and Pakistan). Greece will be sold

off to the highest imperialist bidders unless the

workers make a revolution and open the road for the

rest of the Euro 'trash' to break free from their

imperialist overlords. Ukraine's ongoing war in the

East is a class war that can turn into a civil war

across the whole of Ukraine to reclaim the

Independent Socialist Ukraine and set an example to

the other states torn between US, EU and Russia and

China.

For Permanent Revolution against imperialism, West and East! For a Workers Socialist Federation of Eurasia! For a new World Party of Socialism based on the 1938 Transitional Program!

Class Struggle 114 Spring 2015

15

Let’s Finish the Permanent Revolution

We defend Lenin and Trotsky on imperialism and permanent revolution against the centrist tendencies such as the LCFI and RCIT who revise Lenin on imperialism and Trotsky on Permanent Revolution. If revolutionaries do not understand imperialism they cannot know the class enemy and so they turn permanent revolution into a caricature of the socialist revolution and a program for defeat and demoralisation. Once again the cause of the current crisis of revolutionary leadership can be traced back to the crisis of Marxism faced by Trotsky in the late 1930s. For a new revolutionary international based on Trotsky’s transitional method and program of 1938! Here we summarise our latest response to the RCIT in Permanent Revolution.

As far as we know, the LCFI don’t say that capitalist

semi-colonies cannot become imperialist. But they

do argue that today Russia and China are capitalist

semi-colonies that cannot become imperialist

because of the hegemonic power of US imperialism.

We see this as an empiricist position that does not

exclude Russia and China becoming imperialist in

the future. The bankruptcy of this wrong position on

Russia and China is the class betrayal of the AIUF

as a popular front with imperialist Russia and/or

China as countries supposedly oppressed by the US

bloc.

RCIT takes the opposite view that

not only can Russia and China

become imperialist because of their

past history including that of

Degenerate(d) Workers States

(DWS), but also that there is no

reason why capitalist semi-

colonies cannot do so too, for

example the Republic of Korea

(ROK) and Israel. For the RCIT,

Brazil and India are not yet

imperialist because their

economies are not strong enough

to extract more surplus value abroad than is

extracted from them by imperialist powers. For

them, it cannot be excluded that in 'exceptional

circumstances' (itself not a Marxist argument, rather

an empiricist one,) they too can become imperialist

countries. This is not the Marxist method but the

bourgeois empiricist method of evolutionary

‘Marxism’ nuanced by ‘contingencies’.

Imperialism is a zero-sum game

The problem with the "semi-colony-to-sub-and-not-

yet-imperialism" scenario that everyone uses from

PTS (“not yet") to RCIT (‘not yet in Brazil, but

already in Russia, China, Israel and ROK’) is that it

contradicts Lenin's theory of imperialism. It is an

empiricist concept of transition from semi-colonial

status to imperialism. Where it has been applied to

capitalist semi-colonies, like Brazil, or India, and

now Russia and China, it implies an evolutionary

trajectory of potential “new imperialisms” re-

dividing a global sum of surplus value and world

power by some relatively peaceful democratic

means. The bankruptcy of this position is that it

fosters illusions that the national bourgeoisies of

oppressed countries have the capacity to develop the

forces of production and become

economically independent of

imperialism short of permanent

revolution.

The inclusion of Russia and

China in this list of actual or

potential ‘new imperialisms’ as

'transitional’ from 'semi-colonial'

to 'imperialist' is clearly wrong.

Russia and China made the

transition from 'semi-colonies' to

Degenerate(d) Workers States

‘re-dividing’ the imperialist world

by revolutionary wars and developing the forces of

production. It ignores the significance of permanent

revolution in breaking from imperialism and

overthrowing the bourgeoisie through the formation

of workers states. Therefore it also ignores that the

democratic counter-revolutions in the workers states

did not destroy the state control of the economy

which allowed the bureaucracy to change from

parasitical caste to a state capitalist class without

regressing to the status of semi-colonial compradors.

To be clear, we stand with Lenin and all those who

think that semi-colonies cannot break with

Class Struggle 114 Spring 2015

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imperialism short of permanent revolution. In the

imperialist epoch the bourgeoisie can no longer

develop the productive forces; on the contrary,

capitalism is destructive. The emergence of new

imperialist powers is not possible because it is

assumed that the bourgeoisie is able to develop the

productive forces to the point where a country can

achieve independence from imperialism peacefully.

In the imperialist epoch the only way to achieve

independence from imperialism is making the

permanent revolution.

Thus countries such as Israel, South Korea and

Australia are not imperialist. No matter how many

global monopolies have arisen in semi-colonies

since the Second Imperialist War, these are

subordinated to the existing imperialist division of

labour of the existing imperialist powers and lack an

independent finance capital or sphere of influence.

We show this with Israel and ROK by arguing that

their 'independent' capitalist production is actually

dependent on their subsidised role as armed outposts

of US imperialism. These countries cannot be

imperialist as understood by Lenin if they are

occupied by imperialism, or are occupiers on behalf

of imperialism, and so lack national economic

independence from existing imperialism.

However, if there is no Leninist law which allows

new imperialisms to emerge in this epoch, we have

to explain that the path of Russia and China to

imperialism is not an exception to Lenin’s laws of

motion of capitalism in the imperialist epoch. The

emergence of China and Russia as imperialist

countries must be understood as affirming Lenin’s

theory of imperialism and Trotsky's theory of

Permanent Revolution, not their revision. It affirms

Marx, Lenin and Trotsky because it proves that

permanent revolution threw out the national

bourgeoisie, allowing Russia and China to develop

as degenerate(d) workers states. They could develop

the forces of production beyond that of capitalist

semi-colonies because they had won their economic

as well as political independence from imperialism.

So China and Russia are imperialist countries today

because they won their economic independence and

developed their productive forces through the

permanent revolution.

Completing the Permanent Revolution

This ‘post-capitalist’ development had its limits,

namely the failure to build healthy workers states

based on workers democracy and planning, and the

isolation of the DWSs from the capitalist world

economy. Thus the permanent revolution completed

the bourgeois revolution but did not develop the

socialist revolution and internationalise the

revolution. This failure led to the stagnation of the

economy and ultimately the capitalist counter-

revolution. However the permanent revolution in

Russia and China was not driven back to the pre-

revolutionary period before 1917. Russia and China

could re-enter the capitalist world economy without

regressing to the status of oppressed semi-colonies

of the existing imperialisms. State capital

accumulation allowed the formation of a national

bourgeoisie that was then forced by the logic of

Capital to embark on an imperialist course and go

beyond national borders to survive.

Those who argue that China and Russia are semi-

colonies or "sub-imperialist", do not recognise the

reality of the inter-imperialist struggle, and

objectively take the side of one imperialist bloc

against the other. They suggest that the imperialist

epoch is not destructive of the forces of production

which necessitates the transition to socialism, but

capable of developing the productive forces so that

semi-colonies can make the "transition" to

imperialism. We are asked to believe that the

bourgeois revolution is still ‘progressive’ provided it

is driven from below, and it is possible that the ‘new

imperialisms’ can be reformed from below. They

revise Lenin and Trotsky, claiming that in the

imperialist epoch "new powers" such as the BRICS

form a global popular front between the proletariat

and the ‘progressive’ bourgeoisie and build a

“multipolar world" to defeat the hegemonic USA

without inter-imperialist war.

Therefore, only the correct understanding of the

permanent revolution as the strategy of international

socialist revolution from 1850 to the present can

explain why Russia and China could become

imperialist in the epoch of imperialism after the First

Imperialist War, and why no other country has been

able to break into the imperialist club. There is no

bourgeois evolutionary socialist road to a peaceful

‘multipolar’ world when the two big imperialist

blocs are driven to a Third Imperialist War in the

struggle to survive. The need for a new

revolutionary international party based on

Trotsky’s transitional method and program,

dedicated to the strategy of Permanent Revolution,

capable of defeating the bourgeoisie and its agents

in the working class, and opening the road to the

socialist revolution, must be the order of the day.

Class Struggle 114 Spring 2015

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Greece: No Electoral Solution! There is no electoral solution because electing parliamentarians will not prevent the keys to banks, factories, ports and airports being turned over to the privatizers of the capitalist Troika or to Chinese imperialist firms. The decision to strip Greece of its assets was not made in a Greek parliament but was made by European central bankers and any decision to fight them and save these assets will not be made in any parliament but by the workers themselves armed and organized in the streets against both the Golden Dawn and NATO. This is the only way these assets can be saved when our social class is confronted by the fascists and threat of NATO military intervention combined. And what happens to Greeks today will happen to the other PIIGS nations (Portugal, Italy, Ireland, and Spain) tomorrow.

The "Popular Unity" is a Greek Tragedy

Reformists always promise their next new model

government power formula will be 'different this

time.' As the world crisis of capitalism stumbles into

its eighth year facing collapsed European Central

Bank (ECB) world growth forecasts through all of

2017, SYRIZA has at

last split, with 25

deputies breaking from

the Tsipras group and

forming the new

"Popular Unity Party,"

the LAE. Twenty five

delegates makes LAE

the 3rd largest party and

forces Tsipras to call

Parliamentary elections.

Soon many of these

delegates will be out of

work, of course, and

they deserve this. Fate works that way in politics as

well as in drama.

We think this split was very late and it was only

coincidentally a split from the popular front

SYRIZA had made last January with the ANEL

party nationalists. Late and a lame split too. To

think that a 'last year's SYRIZA' political re-

configuration, consciously sold as such even in the

aftermath of the OXI ("NO!") referendum vote, will

answer the needs of the oppressed and desperate

Greek masses is for Marxists a tragic failure of

imagination.

It was last year's SYRIZA that put the masses up to

staking everything on parliamentary elections and

closed up shop on the Popular Assemblies. This is

the essence of Kautskyism. It sees parliamentarism

as the highest expression of democracy and

suppresses the criticism of this view made by Marx

and Engels themselves. These ‘vanguard

representatives' turned out to be as useless as they

were helpless when called upon to act and stop the

parliamentary betrayal that utterly contradicted the

OXI referendum.

The whole conduct of

the "left" players

around former

government Minister

Lafazanis and the very

name they have taken,

sometimes styled as

the Popular Unity

Front (!), suggests that

they are seeking

another popular front

in spite of recent

history and the history

of all popular fronts

including Allende's, from whom they have learned

the wrong lesson, i.e., that this time will be different

and they will find the ‘peaceful road to socialism.’

And in fact they have called for a popular front, the

‘OXI front’, to the international cheers of every

Kautskyite and otherwise rotten group on the left!

Promises, Promises from Both Sides of the Mouth:

Some, such as the International Marxist Tendency

(IMT), were already buried in SYRIZA and will

automatically continue as entrists in the LAE.

Others, like the RCIT, who must seem like our

favorite whipping boys, see the LAE's intention to

form a popular front and advocate revolutionists do

entry work in it anyway! They say struggle to

"...make LAE an activists' party." Just now (9/15)

LAE is polling between 2 and 3%. The RCIT calls

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for a critical support vote for the new-last-year's-

SYRIZA, as if the masses experience with these

very delegates does not exist, or matter if it does.

Greece is facing the crisis brought to it by the EU

and the imperialists. The EU and German

imperialism are in trouble and they will impose a

diktat of this kind in each of the PIIGS. The

pressure of history will be felt directly by the

workers to take the struggle outside parliament

because they voted NO and it made no difference.

We are not the sectarians who reject electoral

politics out of hand. But a revolutionary party in

Greece would stand as tribunes of the people on a

transitional program beginning with an action

program; not entry in the LAE, but organizing the

masses into workers councils.

Those who want to give critical support to a handful

of LAE MP’s abandon the Leninist method of using

critical support to expose the reformists in front of

their electoral base. The LAE has no more of an

electoral base than ANTARSYA and will

undoubtedly seek out popular front partners and has

said as much.

The RCIT would have you believe that yesterday’s

SYRIZA party bureaucrats, reformists to the core,

were the OXI movement vanguard of the working

class, and because these workers still have illusions

in the parliament this justifies calling for critical

support and entry too! But the mass support turns

out not to exist because the masses have seen

through their act.

In the RCIT prescription there is no accounting for

the masses’ experience in the last year. None of

these ex-SYRIZA parliamentary delegates are guilty

of bringing the masses to this impasse apparently

and none of them will be held accountable. They are

projecting a ‘vanguard’ which never rejected the

popular front idea and only belatedly broke with

SYRIZA. And then only when it was too late. The

third memorandum was passed over their essentially

toothless objections.

We call for revolutionists to accompany the workers

to the polls to make plain that no electoral solution

can exist. There is not a moment to lose for the

building of workers councils and workers militias to

prepare to defeat the fascist danger.

Transitional Program or 21st Century Socialism?

We say the hallmark of 21st Century Socialism is

when the workers take over the factory the 21st

Century Socialist police come in and give it back to

the boss. Variously, it can be defined as an ANC

popular front government massacring striking

miners at Marikana and not a few farm workers in

the strike waves that followed, the PT in Brazil

breaking up land occupations and the PSUV serving

the Bolivarian-Bourgeoisie in Venezuela by

protecting capitalist firms from expropriation by the

masses. Anyone who is not a World Social Forum

sycophant knows these things happen and we warn

that the Greek workers are going to find out soon.

We agree with the dock workers of Piraeus who say

Greece is the experiment and that the ECB and

German imperialism are set to strip all the assets

and swipe all the treasuries of the countries on the

European periphery.

In Jacobin of August 21st Stathis Kouvelakis former

member of the central committee of SYRIZA and

Left Platform founding member of LAE stated,

“…The front will also struggle for an unitary

internationalist struggle around common objectives

at the European and international level and will

support exiting NATO, breaking the existing

agreements between Greece and Israel, and

radically opposing imperialist wars and

interventions. This transitional program is situated

in a perspective of socialism of the 21st

century.” It

is a novelty unsupportable by history to make any

equation between any known transitional program

and the project of “21st Century Socialism.” These

are known quantities to Marxists and are based on

wholly different methods.

The first task of a transitional program is to stop the

privatizations and to do this with workplace

occupations and armed pickets to prevent the

turning over of the keys and the deeds to the

imperialist bankers and firms. Out of these

workplace occupations the immediate task will be to

reorganize the Popular Assemblies nationwide and

to organize them to take on ever increasing self-

Class Struggle 114 Spring 2015

19

government tasks. What LAE opposes is any

transitional program worthy of the name as it would

call for workers to power and a planned economy,

whereas this LAE program calls for a decentralized

economy. And is the LAE preparing the working

class for the conquest of power? Do these

parliamentarists even contemplate the seizure of

power by the working class per se? We think the

answer is no.

What are LAE

deputies likely to do

in a new parliament?

Already it is evident

that it is not just

German imperialism

but also China and

Russia (the Shanghai

Cooperation

Organization,

{SCO}) are

competing to strip

Greece’s assets.

While the LAE and

the KKE want to break from German imperialism

and the EU, they are opening a road to the

Russia/China bloc. Their historical links to the 21st

Century Socialism movement predisposes them to

seeing Russia and China as “progressive nations,”

not as imperialist rivals to the U.S.-led imperialist

bloc.

Sowing illusions in this bloc as saviors from rapine

European banks is conning the workers with the

program of 21st Century Socialism, which will turn

out to be just as fatal as it is in Venezuela or South

Africa. A different group of capitalists will be

stealing everything the Greek workers make for

generations to come. Already it is obvious that the

record of the Chinese SCO/BRICS partners has

been to insist upon the fulfilment of promises made

by the previous Greek government to give them

ownership and control of the port of Piraeus and this

is proceeding and meeting resistance from the

workers self-activity alone.

We will march with the Greek workers on the 19th

in their mobilizations with the demand that the

workers' organizations initiate workers councils that

defend themselves and fight for a workers’

government. Revolutionists must stop by the polls

on the 20th as proof positive that we march into

every battle with our class, if only to warn the

masses of their lemming-like march over the

precipice.

We make no endorsement, nor do we call for any

critical support vote; this election is the work of and

the result of acquiescence to the Troika’s agenda.

This election is held for the bourgeoisie to dispense

with SYRIZA and LAE alike. This is no time for

electoral politics and indeed there is no electoral

solution! We go to the polls and say to the

supporters of the LAE that there is no time to delay

the building of the workers councils and workers

militia because the

lemmings are going

to parliament while

the fascists are

preparing the abyss.

The LAE’s

economic program

is essentially

Keynesian. State

capitalist

interventions, albeit

presented with

allusions to

'workers’ control,'

and limited nationalizations and plans to renegotiate

part of Greece’s debt altogether are nothing more

than another parliamentarian trap. For the workers

the only road to socialism is through their own

action committees, their own councils and defense

guards embracing the refugees, crushing the fascists

and breaking with NATO. Internationalist anti-

fascist unity, anti-imperialist mobilization and

solidarity with immigrants and the revolutionary

upsurge across MENA, and in particular the

Palestinian cause, create an opening for permanent

revolution to unite the workers of MENA and

Europe and turn the tide against the proliferation of

proxy wars between the two imperialist blocs,

against the theocrats, Islamists, Zionists and the

overarching military domination of the US

imperialist bourgeoisie.

There is no anti-imperialist united front possible

with any national bourgeoisie. We must show the

masses that their victory requires a break from

their own national bourgeoisie both in program

and in organization.

Victory is only possible when the workers build

their own revolutionary party and international

based on the method of the 1938 Transitional

Program.

Liaison Committee of Communists (LCC)

09/15/2015

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What We Fight For

Overthrow Capitalism Historically, capitalism expanded world-wide to free

much of humanity from the bonds of feudal or tribal society, and developed the economy, society and culture

to a new higher level. But it could only do this by

exploiting the labour of the productive classes to make

its profits. To survive, capitalism became increasingly destructive of "nature" and humanity. In the early 20th

century it entered the epoch of imperialism in which

successive crises unleashed wars, revolutions and counter-revolutions. Today we fight to end capitalism’s

wars, famine, oppression and injustice, by mobilising

workers to overthrow their own ruling classes and bring to an end the rotten, exploitative and oppressive society

that has exceeded its use-by date.

Fight for Socialism By the 20th century, capitalism had created the pre-conditions for socialism –a world-wide working class

and modern industry capable of meeting all our basic

needs. The potential to eliminate poverty, starvation,

disease and war has long existed. The October Revolution proved this to be true, bringing peace, bread

and land to millions. But it became the victim of the

combined assault of imperialism and Stalinism. After 1924 the USSR, along with its deformed offspring in

Europe, degenerated back towards capitalism. In the

absence of a workers political revolution, capitalism was restored between 1990 and 1992. Vietnam and China

then followed. In the 21sst century only Cuba and North

Korea survive as degenerate workers states. We

unconditionally defend these states against capitalism and fight for political revolution to overthrow the

bureaucracy as part of world socialism.

Defend Marxism While the economic conditions for socialism exist today, standing between the working class and socialism are

political, social and cultural barriers. They are the

capitalist state and bourgeois ideology and its agents. These agents claim that Marxism is dead and capitalism

need not be exploitative. We say that Marxism is a living

science that explains both capitalism’s continued exploitation and its attempts to hide class exploitation

behind the appearance of individual "freedom" and

"equality". It reveals how and why the reformist,

Stalinist and centrist misleaders of the working class tie

workers to bourgeois ideas of nationalism, racism, sexism and equality. Such false beliefs will be exploded

when the struggle against the inequality, injustice,

anarchy and barbarism of capitalism in crisis, led by a revolutionary Marxist party, produces a revolutionary

class-consciousness.

For a Revolutionary Party The bourgeois and its agents condemn the Marxist party as totalitarian. We say that without a democratic and a

centrally organised party there can be no revolution. We

base our beliefs on the revolutionary tradition of Bolshevism and Trotskyism. Such a party, armed with a

transitional program, forms a bridge that joins the daily

fight to defend all the past and present gains won from

capitalism, to the victorious socialist revolution. Defensive struggles for bourgeois rights and freedoms,

for decent wages and conditions, will link up the

struggles of workers of all nationalities, genders, ethnicities and sexual orientations, bringing about

movements for workers control, political strikes and the

arming of the working class, as necessary steps to

workers' power and the smashing of the bourgeois state. Along the way, workers will learn that each new step is

one of many in a long march to revolutionise every

barrier put in the path to the victorious revolution.

Fight for Communism Communism stands for the creation of a classless,

stateless society beyond socialism that is capable of

meeting all human needs. Against the ruling class lies that capitalism can be made "fair" for all; that nature can

be "conserved"; that socialism and communism are

"dead"; we raise the red flag of communism to keep alive the revolutionary tradition of the' Communist Manifesto

of 1848, the Bolshevik-led October Revolution; the

Third Communist International until 1924, the

revolutionary Fourth International up to 1940 before its collapse into centrism. We fight to build a new, Fifth,

Communist International, as a world party of socialism

capable of leading workers to a victorious struggle for socialism.

For a New World Party of Socialism!

Class Struggle is the bi-Monthly paper of the Communist Workers’ Group of New Zealand/Aotearoa, in a Liaison Committee of Communists with Communist Workers’ Group (USA) and Revolutionary Workers’ Group (Zimbabwe) Class Struggle and most articles are online at http://redrave.blogspot.com Phone +64 0272800080 Email cwg2007@hotmail.com Archive of publications before 2006 http://communistworker.blogspot.com/