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World economy heads for slump We are now nearing a new turning point in the development of capitalism, a qualitative change in economic and political perspectives. On the surface, Britain is in a period of boom. The same is true for America, and for Western Europe.
But the basic crisis of capitalism, which has been spoken about by Marxists for three generations now, means that the capitalist system has reached its limits. Rather than develop the productive forces, because of the restrictions of the nation state on the one hand and private ownership of the means of production on the other, it has become an absolute fetter on the development of production. Of course this does not mean that there will be no further increases, and then falls, in production, but that the rhythm of slumps and booms will be ever more convulsive.
The enormous economic upswing of world production between 1950 and 1975 seemed to have cancelled out the laws of capitalism. Capitalism partially succeeded in this period in overcoming the organic crisis of capitalism, which has existed now for about 60 or 70 years, by an enormous development of world trade of about 12.5 per cent a year. This in its turn gave a huge impetus to the development of the productive forces, to a greater extent than ever before in history. In addition, the organic crisis of capitalism has been disguised to a certain extent by the simultaneous crisis of Stalinism in Russia and Eastern Europe, shown by the recent reforms of Gorbachov.
All the major journals of capitalism, the Financial Times, Economist, The Banker etc hammer home the point that centralised planning does not work. Of course, bureaucratic planning does not work once you have a sophisticated, developed economy. But democratic workers management of industry and the state would work. Undoubtedly, this crisis in the East has had an effect on the intellectuals, the ideologues of capital, who say 'that is not the way out'. The fact that the 'mixed economy' was not able to prevent the development of the capitalist crisis meant that it too has been abandoned. The bureaucratic nationalisations in Britain, France, Germany and even in America, measures which in reality are not socialism but state capitalism, do not work for the same reason that bureaucratic centralised planning does not work in the Stalinist states, but with the additional fact that the major part of the economy is in the hands of monopoly capital which determines the development of the economy. Because the mix- By Ted Grant ed economy does not work and toes not prevent the possibility of slump there has been a big swing against state ownership, not only in the countries where the Tories are in power but also where the so-called Socialists are in office.
Thus, in Spain and in Sweden there has been denationalisations and in France the Socialist Party is not putting up a vigorous struggle against the denationalisation that Chirac wants to carry out. To a certain extent 'Socialism' has been discredited and under these conditions the idea has developed that 'untramelled capitalism' is the means to develop the economy. The capitalist countries will suffer all the consequences of this in the next slump.
For the process whereby capitalism was able to partially overcome the organic crisis of capitalism in the period between 1950 and 1975 has now reached its limits. This is proved by the nature of the 'boom' that capitalism has experienced from 1981-87. This has dragged on for 6 years, but in the language of the bourgeois economists it has not been a boom but a 'growth recession', in the sense that production has only crawled ahead at the rate of just 2-3 per cent overall. This compares to the period of economic upswing when growth in output of 6-8 per cent was quite normal in the countries of Western Europe, and when American output too grew in some years by 8 per cent. In Japan, there was sometimes i. 12 per cent or even 17 per cent annual growth. 'Boom' prolonged This latest 'boom' should have collapsed long ago. We thought that it had reached its limits and predicted its end 2 or 3 years ago. In fact, the boom would have reached its end before now if it had not been for the massive armaments programme of the United reaching $375 billion a year, and the budget and trade deficits built up by the This colossal arms expenditure puts into shade Hitler's re-armanent programme prior to 1939 which absorbed 7 million unemployed. In the US the capitalists claim to have created 30 million new jobs in the last 20 years. But 9 out of 10 of these new jobs are in the service industries, completely dependent, in reality, on the development of industrial Germany reached the limits of its armaments boom in 1939 and with a choice of either going to war, and Hitler had always intended going to war, or a collapse of the economy. Now the enormous armaments boom in the US, which is principally for the benefit of the military-industrial monopolies in America but is also a means of American imperialism against the colonial revolution and of course against the mortal enemy of Stalinism, has also reached The armaments boom of Hitler prepared the way for either war or a devastating slump in Germany and in the West. In fact, at that time America was not spending much on armaments, about 1 or 2% of GNP. But in 1938 they had a slump which threatened to rival the slump of 1929-1933 and therefore they saw in war a solution to their problems. But today the capitalist powers cannot find a way out through world war as they could have in a different period—not while the trade unions and political parties of the working class continue to exist and the democratic rights which go with them-although there will be little' wars perhaps, like the Vietnam war. America's armament boom was a form of 'negative Keynesianism', 'guns instead of butter'. Reagan's deficit financing, spending more than the state income, has not gone to improve the infrastructure, social services, pensions etc. On the contrary, growth has been partly at the expense of those sectors and partly at the expense of the working class in America where real wages have fallen y 14 per cent in the last ten years.
Nonetheless, a by product of the American armaments boom and the budget and trade deficits was an expansion of the world economy, of Western Europe and particularly Japan, by expanding the market in the USA. The US Government's spending sucked in goods from other countries and created a huge trade deficit for American capitalism. Japan and Western Europe have had their market increased by at least 1% as a result of the expansion of the American market. To finance the massive budget deficit, America sucked in enormous amounts of capital from her rivals and even the under developed world, but predominately from the developed world and especially Japan, by paying sky-high interest rates. That in its turn drove up the value of the dollar to the highest level it had reached for decades, in comparison to the currencies of the other developed countries, thereby further weakening America's trading position and building up enormous contradictions for the future.
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MIR Summer 1987: World Economic Perspectives
Another reason for the continuation of the boom in the last few years, has been the fall in the prices of raw materials, oil and foodstuffs. The advanced capitalist countries have prolonged the boom by shifting the burden onto the back of the colonial world, by worsening the terms of trade with the advanced industrial countries. This has meant an enormous increase in the foreign debts of the colonial countries. One thousand billion dollars worth of debt has been incurred in Latin America, Africa and Asia. Now the real average per capita income in 1984-87 is 14 times higher in the developed world than in the underdeveloped world, the same ratio as 25 years ago. This is the result of the growth of the developed world and an actual decline in growth in Latin America and Africa and in some of the countries of Asia. In the underdeveloped world people and countries actually became worse off in absolute terms, in Africa, Latin America and in most of the countries of Asia, apart from Hong Kong, Singapore, Taiwan and of course South Korea.
These factors, the US armaments programme and the shift in the terms of trade in favour of the advanced capitalist countries, gave an initial impetus to the socalled 'boom'. But even with all these factors production has crept forward. There has been nothing like the growth reached during the world economic upswing of 1950 to 1975.
End of US 'hegemony'
At the same time, as an indication of the complete sickness of capitalism, in this period of boom only 80 per cent of productive capacity in all the advanced capitalist countries has been used. That means, in reality, that capitalism is in a crisis of over-production which reveals itself, because of the monopolisation of production, not in the actual overproduction of goods but in over capacity. For example, only 68 per cent of steel capacity in all the capitalist countries is being used, and this in a boom. What is it going to be like in the slump that is coming?
This overcapacity has continued despite the capitalists' policy of 'Luddism' that developed at the time of the last slump, ie the destruction of ship building, textiles, steel etc. During this boom, the EEC has reduced steel capacity by 31 million tons. Now the EEC is demanding that another 20 million tons of steel capacity be destroyed.
All the factors are being gathered together for a slump within the next one, or, more likely, two or three years, a slump much deeper than anything experienced in the post war period.
With the armaments boom reaching its limits, America has become the biggest 18
net debtor in the world, with a foreign debt of $410 billion, 4 per cent of GNP. In 1986 the US had a budget deficit of $200 billion and a trade deficit of $170 billion. In 1986 the total US debt, federal and private, topped 7 trillion dollars, a trillion dollar rise in a year. The total debt is 1.7 times the Gross National Product, the highest ratio since the depression of 1929-33. This is a time bomb ticking away under US capitalism.
America's accumulated trade deficit for the 1980s totals $630 billion. Manufactured goods account for 68 per cent of US exports and 75 per cent of US imports. The US trading balance in manufactures is 84% of the deficit. Now in the USA, service industry employs 75 per cent of the workers with only 25 per cent in manufacturing industry although, incorrectly, they include transport and building in the service sector.
All these figures show the complete change in the situation that has taken place in the world economy. The Wall Street Journal recently spoke of the disintegration of the world economy. It tried to find analogies with what happened with the collapse of the hegemony of the British empire in the 1870s and 1880s, which prepared the way for the First World War and the slump of 1929-33. It identified three fundamental factors which it said were the disintegrating forces of the world economy then, which are present today: rapid changes in the world economy producing protectionist pressures; the stagnation of domestic economy; and the end of the 'hegemonic' position of any one power.
Japan today challenges America on a world scale. Japan's Gross National Product per head of population, its per capita GNP, is higher than the USA. Japan now has a $50 billion surplus of trade with the USA and the dollar has plunged by over 40 per cent against the Japanese yen.
Japan has also become the worids leading exporter of finance capital, $650 billion in 1985 compared to the USA's $600 billion. In 1986 Japan invested $50 billion in US government bonds and $IS to $20 billion in Eurobonds to become the world's largest creditor.
Japanese capitalism is a peculiar capitalism. The Japanese capitalists have succeeded partly because they refuse to waste resources on arms spending, which is still only just over 1% of GNP, and also because Japanese capitalism is a highly monopolised capitalism which is intimately connected with the state. Despite all the bleatings of Thatcher, Chirac, Reagan and so on about the 'free economy' , it was with the help of the state that Japan produced the cars, motor bikes and electrical equipment etc, which took away the market from their competitors.
At the same time, Japan has protected its home market by having more real bar-
riers to trade than other countries. While the average tariff rate in Japan has been reduced to 3 per cent, compared to 4 per cent in the USA and 4.9 per cent in the EEC, the real barriers are the non-tariff trade barriers.
All the contradictions that make for a devastating slump are piling up. The price of stocks and shares is not in proportion to the economy. It is fictitious capital. Enormous quantities of fictitious capital are being piled up. The bankers and the stock brokers are under the illusion that the increase in prices in stocks and shares will lead to an increase in production to match it. In fact they will have to come down with a bump as they came down in the past. Stocks and shares will have to come into line with the real economy.
Inevitably when capitalism goes beyond the limits of the capitalist system the pendulum swings back. Marx already explained in relation to credit that it results in production developing beyond the limits of the capitalist system. Expanding consumer credit to unprecedented levels initially increases the market but then inevitably limits it. You can't spend your money twice. If you spend your money on mortgages, hire purchase and so on, you can't spend it again.
Financial collapse
At the same time, the US government's budget deficit and the debt being piled up by the colonial countries threatens a financial collapse. In the US, in this period of alleged boom, 135 banks failed in 1986 and 1,486 were in difficulties. Two Canadian banks failed, the first failures in Canada since 1923. Japan's 6th largest bank was rescued from failure. In Hongkong there has been a collapse of banks, and this is one of the worlds financial centres.
The US banks have loaned out $1,400 billion, the seven biggest banks $550 billion, much of it to the colonial countries which will never be able to repay. $375 billion was added to the debts of the Latin American countries between 1975 and 1985. Ironically, nearly half of that disappeared in investments by Latin America into the US and the other developed countries of the world!
All these events are the first heat lighting of the coming storm. New contradictions have been generated over the last 6 to 7 years especially. Japan's comparative advantages are becoming disadvantages. There is not only a surplus of capacity but also a surplus of capital piling up in Japan. What we have seen in regard to GEC in Britain, one of the biggest manufacturers which has over £1,000 million in the banks collecting interest rather than being invested in industry, we now see in regard to the big monopolies in Japan. They have a colossal surplus of
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LO
ictia
00)
8
120
Sep
Jan.
115 110
USA
105
100
Japan
West Germany
France
Italy
UK
3
2
USA
Japan
Even during the present 'boom', as these graphs illustrate, production in all ahead, or even weakened further. NOTE: The index for Industrial Production compared with previous levels in that same country (the 1980 level is taken as 1 in the different countries with each other
the majc shows tr 00). It doe
capital lying idle in the banks. There is nowhere they can invest it in Japan and nowhere they can invest it abroad. While in the US we see the same phenomenon as in Britain with feverish speculation in takeovers and mergers, because there is no profitable investment possible in new industry. There has been $88 billion worth of mergers in 1986 and they expect there will be $135 billions worth in 1987.
Another condition of slump appearing at the present time is the cut in the top rates of taxes. This is something that Thatcher and Reagan think they invented but in fact is nothing new. In 1926 the reactionary Premier Poincare cut taxes by 50 per cent in France and in the USA President Coolidge slashed the top rates by half allegedly in order to encourage production. That is not a nice augury for what happened three years later in 1929! Yet that was in a real boom, from 1924 to 1929 when there was a genuine boom in production. In other words tax cuts will not solve any of the problems of capitalism.
The organic nature of the crisis is revealed by the fact that even in this alleg- =1 boom there has been an increase in _nemployment. There has not been a fall = unemployment in any of the developed • 'untries, except in the US in service sec- ::: jobs. This level of unemployment is -*: the mormal' reserve army of labour :: capitalism in its heyday which would = uppear in a boom, but a permanent :'=: sa ihe economy and society.
* exame time wages have been
down, further cutting the market for the capitalists. They are faced with the insoluable problem of capitalism that they want to increase their profits and therefore they hold down the wages of the workers. But as a consequence they cut the market on a world scale. In 1986, overall growth in world manufacturing trade was only 3 per cent in volume terms-the lowest for 30 years despite the US trade deficit of $170 billion. And it is expected to slow down further to 2.5 per cent in 1987.
Capitalists' dilemma
The capitalists are faced with an insoluble dilemma. Reagan's armaments boom, which in accord with the unplanned nature of capitalism was a sheer accident and not planned at all, did result in a 'boom' throughout the developed world, providing an enormous market in the USA. But, as explained, this only built up enormous contradictions for US capitalism, weakening America's trading position. So the dollar was allowed to devalue with the intention of increasing US exports by making them cheaper.
But all the capitalist nations have massive surplus capacity and they are all clamouring for markets. The dilemma is this: if the falling dollar increases US exports, it must mean an increase in imports in Japan, West Germany, Britain and other countries, and decreased exports ive these countries. Thus the US is demanding a 20% share of Japan's market in
produ
tio
100.
tons
Jarter
uarter
West
Germany capitalist countries has only inched : level of production in each country not compare the levels of production
France
Italy
UK
semi-conductors by 1991 even though Japan's share in the US market is only 15%. But Japan cannot provide a market for further substantial US imports. Total imports presentiy only take 5% of Japan's home market.
Similarly, all the other capitalist countries can not allow their exports to decline or their own home markets to be taken over by further US imports. They will not be able to accept that. And therefore there is an undeclared trade war, with competitive devaluations of each country's currency, just as happened from 1929 to 1939.
The dollar has fallen 35 per cent in two years: against the Yen, 42 per cent, and 48 per cent against the Deutschmark. Out of 52 countries' currencies, 20 manufacturing nations' have risen against the dollar since 1985.
The trade war has begun with devaluation. But as a first tremor of what will come in the future we have the dispute over semi-conductors between the US and Japan. There is an enormous overproduction in computers and semi-conductors in Europe, the US and Japan.
As a sideshow we had the dispute between Britain and Japan. But the British capitalists are too weak to imagine that they could take on Japan and therefore they were forced to compromise. They did not even get backing from the EEC. They ran to their brothers and partners in the EEC, or their alleged brothers and partners, who just pushed them off to officals to 'discuss' the question. In other
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MIR Summer 1987: World Economic Perspectives words they were not backing Britain at all because they are afraid of an open trade war.
The dilemma that they face is that unilateral action in relation to tariffs always triggers off retailiatory actions. That is why the idea that is still being put forward by the Labour leaders, especially the Stalinists, that through import controls capitalism can solve its problems, is false.
Trade wars put the burden on the weaker nations. The United States has 25 per cent of world imports, but the exports of America are only 6 per cent of the Gross National Product. So if it comes to a trade war, America will be affected, but not as much as the other capitalist economies- Britain exports about 33 per cent of her GNP, West Germany the same, Holland, Sweden and Belgium 50 per cent. They will be hit harder by a American imperialism, than slump although the latter will be hit hard. Trade war The bourgeois economists point out that the US trade balance will improve this year, not because of the fall of the dollar, but because of slower domestic growth. Protectionist pressures in the USA will mount and attacks on the EEC's Common Agricultural Policy are likely to become more violent. Trotsky, during the inter-war period, spoke about agriculture as the 'kept whore' of industry in Germany. What he meant by that is the capitalists deliberately subsidised agriculture for social reasons, in order to subsidise the peasantry. There is very little peasantry now but in Germany, France, Britain and other countries, the farmers have been subsidised throughout this period, on the one hand as a market but also for social reasons to balance the rural areas against the industrial areas. Inevitably, the moment it comes to a slump, those countries which have currenthat have appreciated will then devalue. The Japanese will depreciate the Yen, the Germans the Deutschmark or, if they do not do that, they will turn to open trade protection to keep out the goods of the other countries.
Some of the serious capitalist commentators are really worried. They say that the 'liberal economic order' is now at stake. 'Free trade' is only possible when world production and trade are expanding. When it is a question of a general crisis of capitalism the law that operates is 'every man for himself and the devil take the hindmost'.
The industrial countries' imports are the major part of world trade: the proportion actually rose in the 1980s. Imports from the underdeveloped world fell from 20% to 13% of the world total. That is a programme for revolution in the underdeveloped world. The smaller countries in Asia, South Korea, Singapore and Taiwan, which were given a privileged position in the US market in the post war period to head off the threat of revolution, and which are therefore largely dependent on the US market, will suffer greatly once tariff barriers are mounted against their goods.
Moreover, with a trade war, Japan will become one of the weakest countries, because she has built up an enormous productive apparatus that is completely dependent on foreign markets. Therefore Japan will be effected worst of all. They already have 3.5% unemployment. With 30 million jobs in services a slump would be an absolute catastrophe in Japan. If it were not for the threat to the capitalist system presented by the planned economies of Eastern Europe and Russia, the second most powerful country in the world, then undoubtedly the world would be on the road to war, between Japan and the EEC, between Japan and the US, or possibly a war between the European powers and the USA.
There is no 'collective imperialism' as is sometimes imagined. The contradictions now between the US, the EEC and Japan are greater than the contradictions which lead to war in 1914-1918 and 1939-45. The reason for the drive to war in the 1930s was that world trade in industrial products by the eve of World War Two was less than at the eve of World War One. The world output in industrial products had doubled in the interwar period but trade had actually dropped. But now there is Russia and Eastern Europe and war is impossible under present conditions.
The contradiction between capitalism and the planned economies of the Stalinist states represents the basic contradiction of this epoch. However, an actual war between the capitalist powers and the USSR could only take place in the event of the physical destruction of the organisations of the labour and trade union movement in the US, Western Europe and Japan by the capitalists. This could only be achieved through civil war and the installation of military police dictatorships in the major capitalist Full-scale war between the capitalist powers and the USSR is ruled out at present. First of all nobody could win the war. If there was a nuclear war then there could be no winner, as everyone would be dead. The 'victors' would not add to the market or gain any loot. But a conventional war is also ruled out as the Russians, because of the balance of forces, would win easily. Therefore there will not be a new world war in the next period. But at the same time international competition is greater than it was in the period before 1939. A trade war will undoubtedly break out, probably next year. Because there is no way out, with war ruled out, there will be a slump. A slump is absolutely inevitable in the period that lies ahead, prepared for by a trade war.
This year and possibly next year they will avoid a slump, a slump being an actual fall in production. Production will probably crawl along as it has done at the rate of 2-3 per cent. In Britain it is projected to be 3 per cent, France 2 per cent, the US 2.5, Japan from 2.S to 3 per cent, and West Germany 2 per cent. Next year, in 1988, they may also avoid a slump. But if they do then in 1989-90 there will probably be even bigger falls in production. In the last slump of 1979-81 there was only a fall of half a per cent in production. In the next one there will be falls in production of 2, 3 or 4 per cent, if it is a 'normal' slump. This is compared to 1929-33 when production in America fell by 40 per cent and by 11 per cent in Britain. Can slump be deferred?
It is correct to raise the possibility, not the certainty, of another 1929. All the factors that made 1929 are there at the present time: the undeclared trade war through competative devaluations; the stock market speculation; the consumer credit explosion; the massive debts; the advanced overcapacity, which never happened in the pre-war period in the same way. There was overcapacity for a time, but the constant, continual overcapacity means that capitalism really has reached its limits and which ever way they turn, there might be another 1929. What is likely, is that there will be a deeper slump in one to three years time than any slump in the post war period.
But at all times we must make a caveat. We must take into account the enormous resources that have been created by the labour of the working class, by science and technique, in the course of the last 50 years. Under conditions of slump capitalism may have to use up much of these resources.
Can they deferr the onset of a fresh recession, given the accumulation of the US budget and trade deficits? It is possible, temporarily, but it would depend on a whole series of circumstances. Are the capitalists prepared to waste the resources accumlated in the course of the last 50 years? They will do, but only under the impact of a political movement of the working class. In The First Five Years of the Comintern, Trotsky makes that position quite clear—when there was an enormous offensive of the workers of Germany, France, Italy, or Spain, the bourgeoisie drew back for a time and gave concessions in hours, wages, conditions and so on. Then within a matter of months or years as the case might be, once the movement had receded, they
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then took back what they had given and a bit extra as well.
That is the situation that they could face-and faced with revolutionary developments it is possible that they would carry through Keynesian measures. We must remember that there will be a complete transformation of the Labour Party and of the Socialist parties in Europe, possibly even the 'Communist' Party in France. There will be upheavals in the Italian 'Communist' Party. The 'left' leaders will Socialism, about revolution, and will remember all the things of the past once the crisis assumes an organic form. Could America force Japan and Germany to reflate? Of course they tried it and got a dusty answer, just as when Europe and Japan asked the Americans to reflate about ten years ago. America refused and took no notice of what the Europeans were saying. Now Japan and West Germany aren't going to pull the chestnuts out of the fire for American imperialism at the cost of their economies. Therefore, at this point in time, they are not prepared to reflate, which would result in an explosion of inflation and stimulate again the class struggle in those countries.
However, circumstances might arise where Japan might go for arms expenditure as a means, of course, of boosting the economy rather than as a means of fighting with other countries. What gave Japan an enormous advantage over the last forty years was the 1 per cent that she spent on armaments in comparison with the 6-7 per cent that the other capitalist economies spend on arms. Even now she hasn't allowed herself to be cajoled into spending much. It is a fraction over 1 per cent now of GNP that they spend on arms. Therefore it is possible that the military industrial complex in Japan might go for arms expenditure. If they did build up the arms economy, it could have the same effect as in America, although under the present conditions and with the present world situation, the result would be an enormous infiation in Japan. The capitalist countries will increase trade with Russia. Even the Americans have now done an 180 degree somersault from when they were deliberately trying to limit trade with Russia by threatening all sorts of reprisals against the economies of Western Europe and Japan if they traded in goods that were allegedly of defence significance. Now they are hurriedly scrapping the list and will trade with Russia. That happened at the time of the 1929 slump when the capitalist powers saw a market in Russia. But this will not solve the problem. All it indicates is that the capitalist countries are in a desperate position for markets. At all events, the economic policies of the different capitalist powers aimed at avoiding a slump will only exacerbate the problems in the long run and will only serve to make the slump deeper when it All this indicates the background to the situation which is developing in Europe and in the world. Capitalism is at an impasse. From a period of developing relatively the productive forces, it is now a reactionary brake against their development. This is the eve of great movements developments everywhere. The working class is fresh, there have been no really serious defeats in any industrial country, nothing like the defeats that there were in the inter-war period in Germany, Spain, Italy, France and other countries. There will be an enormous change in the political situation, enormous movements of the working class.
Already, as a portent of the storm and stress ahead, we have had the movements in Scandinavia, Spain, France, Germany, Holland, Belgium, Canada, the US, Australia and so on-movements which, are not reflected in the capitalist press. All these are a dress rehearsal for the future. Capitalism has held down the wages of the workers, but it will pay the price in future political and social upheavals. Even the reaction in France has failed to stem the tide. After eight months, faced with a movement of the students and workers, Chirac had to capitulate and make concessions temporarily to the students for fear of what would happen. Now in Spain, in reality, the socialist revolution has begun. Great struggles ahead Of course, when these events unfold, always belatedly, the left reformists and possibly even the right reformists, will come forward and try to out-bid Marxism in their attacks on capitalism. In the last period there has been a virtual collaspe in all the capitalist countries of left reformism. At the same time we have the collapse of the 'Communist' Party reformists which are splitting in all directions In fact, the crisis of capitalism has had peculiar consequences. Under 'normal' circumstances we would expect that with the crisis of capitalism there would have been a more organic development of reformism, including the development of the Stalinist partics where they are important, such as in Italy and France. Instead we have the peculiar fact, dialectically, that the crisis of capitalism is a real crisis of reformism, and above all a crisis of left reformism.
Of course, this is also in accord with the laws of history. The bourgeoisie as a whole jeered at the Marxists in the period of economic upswing. The Great God Keynes had solved all the problems, there would never again be difficulties under capitalism, never again unemployment, poverty and all those horrors of capitalism that we have seen during the course of the last 10 or 15 years. The reformists in particular based themselves on that programme. But with the complete collaspe of Keynesianism, with the return with a vengence of the problems that Keynesianism claimed to have solved, they are incapable of facing up to the issues.
That is one of the reasons why there is a complete rout of the left in all the main advanced capitalist countries. But, on the basis of future events, left reformism will arise again from all sorts of intellectuals, and workers leaders as well, with demagogic appeals for socialism and so on.
There will be revolutions in the underdeveloped world and revolutions in the West, that is inevitable. Every active worker must understand the situation in which they find themselves, understand the processes taking place in the world, not to be put off by a victory of Thatcher, of Chirac or whoever else it might be in Europe, not to be put off by a conservative reaction, because that will prepare an even greater reaction on the part of the working class. In fact, this analysis shows that there is a world revolutionary process taking place simultaneously—a crisis in the underdeveloped world, a crisis in the Stalinist countries, and a crisis in the developed world also--an unprecedented situation in history which will prepare changes in the consciousness of the working class across the globe.
won revolertan By Ted Grant 30p A Militant pamphlet Written in 1984 Ted Grant's pamphlet unveils the processes at work in every sphere of the world revolution. Many of these have been brilliantly confirmed and illuminated by subsequent events. Every socialist should have a copy of this pamphlet. Available from World Socialist Books, 3/13 Hepscott Road, London E9 5HB. 50p including postage. Cheques to World Socialist books.
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