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Bread and Circuses: The US ‘show’ elections

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Most workers in the US vote for one or other of the bosses’ parties. Why when the whole electoral machine is corrupted by bosses’ money and fraudulent practices should we take it seriously? Even if workers are allowed to vote what do we gain? After all an election, as Lenin said, is the right to vote every few years for our oppressors? So what’s the point? There is a point, but only if revolutionaries use the elections as a platform to raise their revolutionary program! Otherwise elections are no more than ‘bread and circuses’.

Bush exploits fear

The fact is that many workers are deluded into believing that the US is the great benefactor of the world, the defender of democracy and human rights. The bosses’ media has scared them into voting for Bush to defend their country from the threat of ‘terrorism’. The ‘alternative’ media that produces critical views of the Bush administration and its economic interests, like Fahrenheit 9-11, Outfoxed and The Corporation, still reach only a minority audience.

Many of these workers are the better paid ‘labour aristocracy’ who have benefited from decades of US domination of the world market. There are also lower paid migrant workers who put their hopes in a strong US to protect their jobs. The US economic crisis is cutting the wages and conditions of well paid as well as poorly paid workers to restore the bosses’ profits. The bosses’ shift the responsibility for the crisis by inciting workers to blame migrants or workers in other countries for stealing their jobs. This economic insecurity is manipulated by the bosses into support for aggressive US policies against other countries such as Iraq. In this way the ‘war in terror’ becomes a test of the patriotism of US workers in support of the US ruling class to dominate the world economy.

We say to these workers that Bush is not defending your interests. Patriotism is the last refuge of the scoundrel. Bush is making you pay for these wars with your jobs, your wages, your rights and the lives of your children, draft or no draft. The ‘terrorists’ in Iraq or Colombia are largely the poor and oppressed people of those countries invaded and plundered by US imperialism over generations who are now fighting back with whatever means available.

Bush is using the ‘war on terror’ to fight a never-ending terrorist war against the poor workers and peasants of this world to re-colonise their countries to ‘smash and grab’ the oil, gas, and other vital resources. Now he is making war against the poor inside the USA. Voting for Bush will bring more ‘terror’ at home not less. Bush’s ‘homeland security’ will take away all your union and civil rights, including your right to vote for anybody but Republican. Siding with Bush puts you offside with the vast majority of the poor workers and farmers of the world!

Bush lite

But will voting for Kerry make a difference? The democratic party presents itself as a more liberal bosses’ party. Yet it drew on racist southern democratic support for years. Under Clinton the Democrats introduced policies of workfare taking away the welfare rights of millions. It is supported by the main union organisation the AFL-CIO –the same organisation that supported Bush’s invasion of Iraq and of Haiti.

Kerry claims he does not endorse the extreme militarism of the New American Century faction of the US ruling class which calls for the US to invade any country where it has a vital interest. ( But this policy was already the hallmark of US foreign policy in the 19th century and continued in the 20th century under Democrat leaders like Roosevelt and Kennedy. Kerry pretends that the US can continue to rule the world without ‘going it alone’ and splitting with the other major powers. He may not have invaded Iraq knowing that Saddam did not have WMDs or connections to al Queda. But like the last Democrat president, Clinton, he would have bombed Iraq and Kosovo to enforce UN resolutions.

Leftists for Kerry

Many prominent ‘left’ intellectuals are supporting a Kerry vote as the only way to get rid of Bush. Some, like Noam Chomsky, say that this is necessary in the ‘swing’ states were a few hundred votes may make the difference. Yet it seems that it will be the lawyers hired by the Democrats that make the difference, not the followers of Chomsky et al.

The leftists for Kerry use a ‘lesser evil’ argument that says that US imperialism can be more humane and democratic under Kerry. It is a view echoed by prominent ‘Eurocommunists’ like Tony Negri who says that Bush’s leadership is a retreat from a multilateral world Empire back to a unilateral US imperialism. Others, like former right-winger Chalmers Johnson in his book the ‘Sorrows of Empire’, say that the rise of US militarism is because the Pentagon now controls the state.

Return to ‘ultra imperialism’?

All of these ‘lesser evil’ arguments promote the belief that the US can conduct itself without going to war to defend its leading role in the world economy. This is a return to Kautsky’s theory of ‘ultra-imperialism’ at the time of WW 1. Kautsky claimed that the big corporations and big banks no longer had an interest in fighting wars since their assets were now distributed across many countries and would be damaged by war. Today, with the rise of the global economy, the power of finance capital and trans-nationals spanning the world market, these Kautskyites claim that national rivalries are even more anachronistic.

What these apologists for the big corporations overlook is the fact that the current crisis of world capitalism does not allow the US and its imperialist rivals the luxury of collaborating peacefully. They are each driven to compete to win larger shares of trade and control of vital resources at each other’s expense. Whatever the minor policy differences between Bush and Kerry these will quickly disappear. Under the impact of the deepening economic crisis it is impossible for US imperialism to collaborate with its main rivals in the scramble for scarce resources such as oil and gas.

Therefore we say to all those who call for a vote for Kerry to get rid of Bush, that this is promoting the illusion that Kerry will be better for workers than Bush. We say that this election is a ‘show’ election where the victor will be whoever has the biggest budget, the dirtiest tricks, and the power to delude the masses that they can be secure from the threat of ‘terrorism’. Voting for Kerry will only contribute to these illusions and delusions, rather than challenging workers to organise against the interests of an imperialist ruling class that hides behind the ‘bread and circus’ elections. A good example of this is the AFL-CIO sabotage of the recent Million Man March as a ‘diversion’ from the Kerry election campaign.

Million (50,000) Man March

According to Martin Schreader, editor of Appeal to Reason:: “On October 17, the Million Worker March was held in Washington, DC. The International Longshore and Warehouse Union, the main dockworkers’ union on the west coast, initiated the event, and organised it with the assistance of local unions and leftwing organisations across the country. The march put forward a series of concrete demands ranging from universal healthcare and abolition of restrictive anti-labour laws to democratic control of the media and the economy.

The immediate goal of the MWM, according to organisers, was to “gauge where workers are” – to see how many workers were open to a radical-democratic and socialist platform. The ultimate goal would have been to use the march as the basis for beginning to build a new political party of working people.” (Weekly Worker 549 Thursday October 21 2004).

But this rally was sabotaged by the AFL-CIO now so attached to the Democratic Party that not only did it refuse to allow its member unions to participate in a march against the administration in Washington, but it collaborated with the Homeland Security authorities to have busloads of workers stopped and questioned on the way to the rally. Many buses were turned around and only 50,000 rallied to the march. This open betrayal can only add fuel to the rallying call for independent unions and a mass Workers’ Party.

Nader is a left Democrat

Against the open collaboration of left intellectuals and the labour bureaucrats of the AFL-CIO with the Democrats, several small left reformist parties are putting up their own candidates. Do these parties offer an alternative for the workers’ vote? Nader, the Greens, the Socialist Workers Party, Workers World Party, among others, stand on platforms opposing both Republicans and Democrats.

Nader would replace the US ‘coalition’ troops in Iraq with UN troops. He demands more state spending on education, welfare etc. But his real position is to provoke the Democrats to offer a more left alternative to the Republicans. His agenda is a return to some ideal concept of a democratic, humane, welfarist, but still social-imperialist, USA. That is, his reforms for US workers would be paid out of the super-profits extracted by US imperialism in its colonies and semi-colonies. This is a left bosses’ program not very different from the Labour parties and Social Democrat parties in Europe, where sometimes revolutionaries give critical support to get these parties elected and exposed as anti-worker. Does Nader quality for critical support? No way!

The difference between Nader and social democracy is that Nader has no backing in the organised working class which sees in him a party that represents its interests. Therefore to call for a critical vote for Nader would be to sow illusions in the possibility of the Democrats reforming themselves into a social democratic alternative to the Republicans. For the same reasons that workers should not vote for Kerry, they should not vote for Nader or the Greens who also promote reformist illusions about ‘greening’ and ‘humanising’ capitalism. Nevertheless, this has not stopped many small so-called Trotskyist groups from endorsing Nader-Camejo, e.g. International Socialist Organisation (ex-Cliffite-or SWP (UK) and SWO (NZ); Socialist Alternative (CWI or Socialist Party (UK) Left Party/Solidarity etc.

Socialist alternatives?

A number of socialist groups today see the US under any fraction of the ruling class –left, right or center –as incapable of delivering real democracy. Martin Schreader of the Debs faction in the Socialist Party sees the victory of Bush in 2000 as marking the end of the 2nd Republic (which began with the victory of the northern bourgeoisie against the southern slaveowners in the civil war of the 1860s). Similarly, a leader of the Communist Party of Great Britain says that because the elections are rigged by those with wealth and power, the US needs a ‘third’ democratic revolution. The CPGB would join with Schreader in voting for the Socialist Party (US) candidates.

For all of these groups this proposed democratic revolution will require the mobilisation of the working masses to replace those with wealth and power with a genuinely democratic republic. Their programs are therefore limited to immediate and democratic demands for civil rights, union rights and economic welfare such as jobs, health, education, welfare rights, women’s and migrants rights, repeal of homeland security, opposition to the war on Iraq war etc.

Good as far as they go, but not nearly far enough! All of these demands are raised on the premise that workers can build an electoral majority and return a workers’ party to Congress and the White House to complete the national revolution.

But standing candidates on such reformist programs creates a trap for workers because it reinforces the illusion that a parliamentary majority can make capitalism democratic, when every historical example of such programs have been defeated by reactionary anti-democratic counter-revolutions, from Germany in 1919 to Chile in 1973. As we will see below the Bolsheviks avoided this trap only because they rejected the Menshevik theory that the workers led by progressive bourgeois intellectuals can force capitalism to deliver democratic demands and economic welfare.

Unlike most of the other US left parties which evolved out of Stalinism or social democracy, the Socialist Workers Party (US) is standing candidates on this Menshevik policy as a result of consciously rejecting the Leninist/Trotskyist ideological weapon used to destroy the argument of the Mensheviks in 1917 –the concept of ‘permanent revolution’.

Socialist Workers Party and Cuban ‘socialism’

The SWP candidates take a position very similar to others on the socialist left – calling for workers to complete the bourgeois revolution in the US. But their program is more credible to militant workers because of their past association with Trotsky. The SWP are the party strong influenced by Trotsky when he was in exile in Mexico in the 1930’s. Today, having broken with Trotskyism the SWP has the dubious distinction of holding up the Cuban revolution as a model of how the democratic revolution can be completed in the US.

Castro defeated the colonial power (US) and its landowning agents (Bastista etc) and put revolutionary nationalist intellectuals into power in 1959. This was a democratic national revolution in which the workers and peasants backed a left bourgeois leadership. It went beyond a national revolution only when the counter-revolution of the US and its local agents forced Castro to expropriate capitalist property. The SWP does not recognise that Castro is part of a Stalinist bureaucracy that controls the economy, which has to be removed by a ‘political revolution’ to open the road to socialism.

According to the SWP, the Cuban revolution proves that it is possible for petty bourgeois intellectuals to complete the stage of a national revolution, and then go on to make a socialist revolution. Instead of recognising that Cuba is a bureaucratic workers state where the Castroite leadership must be overthrown, the SWP elevates the Castroites to the role of the vanguard of the Menshevik two-stage transition to socialism.

Translated to the US election today, the SWP presidential candidates, like the other left reformist candidates, call for the first stage of this transition, the ‘democratic dictatorship’ of the workers and farmers i.e. a radical democratic bourgeois republic. The second, socialist, stage will only become possible when further conditions are present, in particular, mass support for the expropriation of capitalist property.

But to suggest that it will be possible for US workers to complete the bourgeois revolution short of socialism is to reject the revolutionary program of Lenin and Trotsky that made the Russian revolution possible. In taking this position the SWP rejects Trotsky’s program of Permanent Revolution and substitutes the Menshevik program of 1917 and of the Cuban revolution.

Permanent Revolution

Revolutionaries cannot call for workers to vote for any of the reformists left candidates because they delude workers into thinking that a mass workers movement can make capitalist democracy work. This was a theory rejected by Lenin in his April Theses of 1917. Until that time he and the rest of the Bolsheviks thought that Russia was not ripe for socialist revolution. Russia needed a bourgeois revolution to prepare the conditions for a socialist revolution. But the Russian bourgeoisie were too weak to overthrow the Tsar. It would be necessary for the workers and the peasantry to join forces to do what the bourgeoisie could not do. This was called the ‘democratic dictatorship of the proletariat and the peasantry’.

But it became increasingly obvious that to prevent the return of the Tsarist regime workers and peasants would have to take power from the bourgeoisie who would rather ally with Tsarism and imperialism than allow workers to take power. And once workers took power, what would be the point of limiting their program to the bourgeois constitution in defence of private property. After Lenin returned to Russia, he and Trotsky joined forces to win over the Bolsheviks to their position of ‘permanent’ or ‘uninterrupted’ revolution.

It proved to be the case that only the Bolsheviks could muster the workers, peasants and soldiers to defeat the Tsar, the Russian bourgeoisie and the imperialist forces. In doing this they created a workers state, expropriated capitalist property and defended the revolution from counter-revolution. In Germany, where a Bolshevik party did not exist, the revolution failed to break from the bourgeoisie and was disarmed by the reformists’ promise of a ‘democratic’ republic. The new Weimar republic contained the revolutionary upturn of the masses and paved the way for the rise of fascism in Germany to smash the working class.

A Trotskyist program for the US election

Working class history written in blood reveals why revolutionaries do not give political support to any bourgeois parties but must call instead for the independent political organisation of the workers. The only program that revolutionaries can raise in the US elections is a revolutionary program. By definition such a program cannot be realised by completing the democratic revolution. On the contrary, the democratic revolution can only be completed as part of a socialist revolution.

Therefore an electoral program must be a transitional program that includes not only the most basic immediate and democratic demands but also socialist demands such as the formation of independent working class organisations like parties, councils and militias, capable of seizing power and creating a workers’ and small farmers’ state.

For the formation of a mass Workers’ or Labour Party!

For rank and file control of the unions independent of the state!

For a 30 hour working week on a living wage to combat unemployment!

For a program of public works, state-funded health, education and housing, all paid for by taxes on the rich!

For civil rights and citizenship rights for all minorities and migrants!

For the nationalisation of all capitalist property, including the banks, without compensation and under workers control!

A mass workers party based upon independent unions raising such demands will quickly come up against the reactionary state forces and propel workers to form soviets, militias, and national organs of workers power preparatory to the seizure of state power and the creation of a Workers and small farmers State as part of a federation of socialist republics of the Americas!

From Class Struggle 58 October-November 2004


Written by raved

January 8, 2010 at 3:50 pm

Imperialism: policy option or death drive?

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When anti-war activists blame US imperialism or ‘globalisation’ as the cause of wars they usually mean the ‘power elite’ – the ‘neo-cons’ etc who are backed by the oil and arms industry. Imperialism and its wars are ‘bad’ policy options on the part of the US as a ‘world power’ which can be countered by world public opinion – the ‘second world power’’, or the ‘movement of movements’ as the World Social Forum has been called. For Marxists this conception of imperialism as ‘bad policy’ open to reform by an electoral alliance of workers, peasants and ‘good’ capitalists is a reactionary utopia. It is a utopia because imperialism needs wars to survive. It’s on a death drive and cannot be pacified. It is reactionary because it disarms the masses in the face of inevitable destruction and dooms the struggle for socialism. Real anti-imperialism for us does not mean making ‘good’ ‘bad policy’, but terminating the terminator.

There are a number of theories that have arisen in recent years claiming that the Marxist/Leninist concept of imperialism as the highest and final stage of capitalism is wrong.

They argue that the main forces that Lenin saw as driving imperialism to inevitable wars, revolutions and counter-revolutions, do not exist. The rise of finance capital, capital export, the growth of monopolies etc that doomed capitalism to destruction, have been surpassed by new developments such as the new economy that have rescued capitalism and made unlimited growth and the sharing of wealth possible. If this were true, then Marxism would cease to be relevant. Lenin’s theory that class politics is the extension of class economics would be empty phrases. Social classes would not longer exist and socialism as a post-capitalist dream would be made redundant by a just and benign capitalism.

These theorists say that globalisation has replaced imperialist contest between rival capitalist powers. Multilateral agreements between imperialist powers subordinate national interests to the global market and make national conflicts a thing of the past. It was easier to argue this during the 1980’s when the major powers were all allied to the US led ‘cold-war’, and the 1990’s when the UN and NATO officially fronted the wars against Iraq and Serbia. Whatever word is used to describe this ‘consensus’, national differences are now all accommodated under a US global hegemony where all states, including the US as the world’s biggest debtor, are dependent upon one another. Indeed some radicals, like Hardt and Negri in their book Empire published in 2000, say that the US is now so economically weak that it is no longer ‘hegemonic’.[1]

But what if the underlying strength of the US economy is in terminal decline?

What if to survive the US needs to turn its back on international agreements and attack its former allies? What if the US economy is in such a deep crisis that it is forced to revert to naked imperialist aggression on any state that threatens its ‘national interests’. A reversion to unilateral aggression is exactly what has happened since 9-11 under the Bush regime when the ‘world changed’. So the question must be asked: is this reversion an aberration? An aggressive militarist policy option driven by the narrow interests of one section of the US ruling class, the oil barons and arms industries? Or is this return to military occupations and recolonisations driven by a more deep-seated desperation on the part of US capital to survive at all costs? The answer to this question is critical because the solutions offered to this post 9-11 crisis depends on the perceived causes.

The globalisation theorists explain post-9-11 as an aberration. Already they say, the world has passed on. The new knowledge economy has created more wealth across national borders that can be redistributed in rising living standards in the developing world. The new capitalism in the US, Japan and EU does not need wars to make profits, but rather new technology and increasing labour productivity. The dynamic growth areas of the world economy are driven by multinational firms that invest, produce and sell in an integrated world market.

This ‘aberration’ must therefore be caused by a rogue element of the US ruling class that has taken power and used the military to grab scarce resources such as oil and natural gas to make big profits. For example, Chalmers Johnson’s recent book the Sorrows of Empire argues that the military have taken over the US state for this purpose. Chomsky’s analysis of US power is similar; the power elite uses its control of the media to manipulate public opinion to accept an aggressive foreign policy. If these arguments about the US as a ‘rogue state’ are correct, then mass mobilisations that reclaim control of the media and democratic institutions can theoretically regain control of the state for the people. But what if these arguments are not correct and imperialism is not a policy option but a death drive.

The reality is that imperialism is in a life or death crisis.

In the 1970s the world economy experienced a classic crisis of overproduction due to falling profits. Profits fell not because they were squeezed by rising wages but because the corporates could not increase the rate of exploitation fast enough to return a profit on the massive investments that went into plant, machinery and raw materials.[2] To restore profits it was necessary to drastically cut the price of wages (variable capital) and raw materials and machines (constant capital) by whatever means. In the 1890s and 1930s the world economy revived only because depressions and wars drastically cut the costs of plant and machinery and of labour.[3]

In the years since the 1970s ‘crash’, the US economy has failed to revive its economy to outcompete its rivals. The new economy has seen some increases in output and profits, but not sufficient to outperform Japan in cars and China in consumer goods. The recent ‘jobless’ upturn is less to do with new technology replacing jobs than with fewer workers working harder and longer (i.e. increased hours and intensity of work). There has been no massive reduction in the costs of wages or raw materials and the economy has been kept afloat by state borrowing and spending. The money borrowed from its rivals, particularly Japan, means that the US is now heavily in debt. Therefore the US economy is experiencing a deepening crisis of insufficient profits from which it can only survive by embarking on open imperialist wars to recolonise other nations, plundering their raw materials and attacking workers wages and rights at home and abroad to reduce labour costs. As Marxists say, the bosses’ crisis is being solved on the backs of the world’s workers.

It is not the policy of a militarist fraction of the US ruling class that causes war, but that of the whole US ruling class. Imperialism is not an aberration but a necessary result of capitalist crisis today.

So how does the whole ruling class benefit from war? Some corporates benefit directly, while others benefit from the flow-on effects. Of course the military and war industries do gain directly from imperialist wars, but production of arms and munitions is consumed unproductively (apart from R&D spin-offs in other sectors e.g. satellites, jeeps etc) and cannot revive the US economy as a whole. The Bush family and prominent members of the cabinet like Dick Cheney and Condoleeza Rice profit as shareholders of corporations that supply the military, and the workers in the arms industry earn wages that enter into the GDP – a sort of ‘military Keynesianism’.[4] But military expenditure does not otherwise add value to the economy. A good analogy would be to say that war benefits some bosses like the production of luxury items such as fast cars and jewelry. Theories such as the Permanent Arms Economy promoted by the Cliffites to account for the post-war long boom are fundamentally flawed in failing to recognise this fact.[5]

However unlike luxury cars, planes and tanks can be used to invade and occupy other countries and expropriate their resources and labour supply. The US has seized Iraq’s oil wealth and created hundreds of military bases in the Middle East and central Asia to oversee the plunder of natural resources. In its own poodle-like fashion, the UK has rechristened Gaddafi the former ‘terrorist fiend’ as the west’s ‘loyal friend’ in order to get access to Libya’s oil and gas fields.[6] While the military and oil magnates get the biggest share of this colonial bounty, the flow on effect of the war to the whole US and UK economies will be a vital supply of oil and gas at cheap prices that will lower the price of constant capital (fuel for industry) as well as variable capital (gas for workers cars) not available to their EU and Japanese rivals.[7] At the same time the US can create client states like Bolivia, or protectorates like Bosnia, Kosovo[8] and Iraq, impose the US dollar as the main currency, and threaten to bomb any state that wants to switch from the dollar to the Euro or yen as a rival to the ‘petrodollar’.[9]

We see that the imperialist states’ militarist policies are dictated by the interests of all capitalists.

The big banks and corporations all benefit from imperialist wars and plunder. What Lenin identified as finance capital was the big banks fusing their interests with the big corporations, and becoming monopolies, that is, combines or cartels that dominated whole industries. The monopolies were vertical (like Rockefellers Standard Oil or Carnegie’s Steel Corporation in the US) or horizontal (like the big German cartels) conglomerates that bought up their rivals and set the prices of production in that industry. Because they were national monopolies they had to compete with their rivals in other nations backed by their states. It was this rivalry that led to the export of capital to colonies to gain cheap raw materials and labour and the inevitable wars to divide and rule the whole world market. In what sense do today’s multinational corporations remain monopolies dominated by finance capital which look to their nation states to go to war in their interests as the ‘national interest’?

Monopoly finance capital is now centralised mainly in the hegemonic imperialist power, the USA.

First to the question of finance capital, then that of monopoly, then the question of national interest to show that state monopoly capitalism is alive, but not well.

At the heart of monopoly is finance capital. After Lenin’s death 20th imperialism created state capitalism to survive. Private banks became regulated by the central banks which took over the management of money capital to rescue the corporate sector. Without massive state intervention and ‘military Keynesianism’ after WW1, the big US corporations would have collapsed. The ‘new deal’ like the Keynesian welfare state’ was mainly about benefits to business.[10] Therefore we can say that far from being outdated, finance capital is even more concentrated and centralised today than it was in Lenin’s day.

Today the giant US Federal Bank along with World Bank and International Monetary Fund monopolises global finance capital through the bond market and international credit. The ‘Fed’ creates dollars which are pumped into US business which it then borrows from its rival EU and Japanese money markets in the form of US bonds. But the cost of its debt is offset by the advantages of the dollar as the main international currency. Private monopoly banks, such as Morgan/Chase, BOA and Citibank, are the biggest shareholders in the World Bank and IMF and dominate the loans made to the ‘‘third world’. But such is the crisis of overproduction, most ‘capital’ today is not invested in production but in speculation as ‘fictitious capital. Not only is finance capital concentrated into giant monopolies in the form of central banks and a few giant corporate banks they are all centralised in heart of the US imperialist state. Therefore what became known as ‘state monopoly capitalism’ in Lenin’s day is still the dominant reality in the global economy.

The crisis of overproduction manifests itself as the ‘risks’ associated with anarchic capitalism destroying the forces of production. Capitalism’s quest to plunder the third world is now in its final phase of world domination –exhausting the resources of the former soviet bloc. The end of the Soviet Union has opened up central Asia. There and elsewhere, the race for scarce resources is hotting up the competition between the imperialist powers.

Today capitalist production is highly dependent on non-renewable resources, notably oil, whose supply is rapidly running out. The big corporations are oil pushers, enforcers, or oil junkies.[11] Those who control these scarce resources benefit from ‘rent’ i.e. that is the premium that can be extracted from those who do not own this resource. Capitalism today is an asset-stripping death machine. The risks associated with this drive to survive explains the behavior of all the players.

The US finances its military machine and arms industry to win control in the rent-seeking war game. This is the case in Iraq, Central Asia and Latin America. These are all military fronts in the war for oil, gas or other vital resources. But even such looting of vital resources and the massive military subsidies of the imperialist states, does not make them cheap enough to restore rising rates of surplus value and return acceptable profits on the vast capital stockpile awaiting investment in production. As capitalism drives down its path of destruction it cannot save itself.

There are inherent limits to the gains from capitalist production which is simultaneously destroying the forces of production.

The recent controversy about the US ‘jobless recovery’ illustrates this point. While thousands of migrants flood into the US to fill menial service jobs, productive industry shifts over to ‘lean production’ by exporting jobs to cheap labour countries. In Mexico or China, wage goods (clothes, white goods, electronic goods, cars etc) are produced more cheaply because of low wage costs combined with global lean production methods (cast-off production lines e.g. Korean or Indian cars). This is the same export of capital recognised by Lenin. But now it is up against more fundamental limits set by rock bottom wages as well as productivity caps.

The crisis of the period from 1914 to 1945 was hugely destructive in terms of the devaluation of variable and constant capital. Only out of such a destructive firestorm could the post-war boom emerge. But that boom was limited to the imperialist world and did not extend to the third world and the gap between ‘north and south’ widened dramatically. The accumulation of capital at the centre is now so huge that only a massive destruction of capital on a world scale will restore a return to profitable production. Windfalls like the collapse of the Soviet world extended the capitalist market to its full global reach. But while it created huge chunks of ‘new capital’ to add the world supply, it did not create sufficient means of making sufficient profits on that capital.

Thus early 21st century imperialism is unable to generate enough super-profits to keep pace with its rising capital stock. All the ‘t-shirts in China’ cannot sustain sufficient profits in the US let alone rising living standards of labour in the US. With the decline in new surplus-value from production, potential money capital becomes merely footloose money that devalues unless new sources of ‘value’ can be found. Increasingly finance capital ceases to be the productive investment that drives the development of industry and instead becomes ‘fictitious’ capital which is valueless because it cannot exchanged for commodities and must be gambled away on the prices of commodities. Take the derivatives market of ‘casino capitalism’.
Morgan/Chase the biggest international bank now has 84 times its real capital assets (stockholders funds) gambled on ‘derivatives’.

‘Derivatives’ are bets on future prices. Derivatives are a form of insurance to cover risks of production in a high-risk, unstable, crisis-prone anarchic market. That’s why 80% of such bets are on future interest rates (the price of money). For example futures brokers ‘borrow’ company shares for a fee, sell them to create cash and agree to sell the shares back at a given price. They use the money to speculate on currencies etc, and hope that the shares will be worth less when they buy them back so they can make a profit. This creates huge amounts of debt with no share asset backing. The instability in the market is itself greatly increased by the billions of hot money gambled on future prices every day.

Moreover it is workers that stand to lose most in the casino economy. For every George Soros who may lose billions of fictitious capital there are millions who lose their life savings. The finance mafia bets the savings of the ‘new middle class’ held in pension funds and bank shares. Marx talked about joint stock companies borrowing from small savers as a form of ‘socialising the costs’ of capital. Small savers would always be wiped out in any credit crash. Soros lost millions in 1998 when Russia defaulted on its debt. Morgan/Chase was similarly exposed to the Argentina collapse in 2001 even though the government froze the accounts of small savers (ahoristas) while at the same time allowed the big banks to take their money out of the country.

Such financial crashes destroy the jobs and savings of those workers who have savings. 19th and 20th century imperialist powers justified their smash and grab expansionism by selling it to their working class as a defence of the national interest. Britain had its ‘civilising mission’ and the US had its defence of the ‘free world’. All used ‘international relations’ to pacify and buy off the rising working class challenge to the power of capital. Marx, Engels and Lenin recognised the importance of colonial super-profits, which when trickled down to the ‘new middle class’ bribed it to support imperialism and to turn organised labour into cheerleaders for imperialist wars. Now 21st century imperialism cannot afford to buy off its workers and runs the ultimate risk of eliminating its support base in the ‘labour aristocracy’.

21st century imperialism cannot afford political buyouts so funds patriotic panics.

While it can’t afford to buy patriotism anymore imperialist states appeal to ‘national values’. Foreigners are blamed for taking jobs and cutting wages so that the labour movement becomes geared up to support wars against enemy aliens at home and abroad. As imperialist rivalry hots up trade protection becomes national protectionism in which workers are enlisted to fight the ‘enemy’. But as the costs of imperialist crises and wars become thrust onto the backs of workers (workers welfare axed while corporate welfare – especially oil and war industries – climbs, jobs and wages lost, workers in uniform lose their lives in the war for oil etc) the political class consensus that drove the post-war boom and which has been kept intact from the victory of capitalism over ‘communism, now becomes fractured at home and abroad. Workers and peasants see themselves as pawns in a US corporate war game for world domination. The level of anti-US sentiment outside the US is rising to massive proportions. And the class conflicts in the outside world are now being reproduced inside the US and the other imperialist powers.

This means that resistance in many forms is beginning to emerge. The WSF is a sort of ‘good cop’ imperialism that promotes the illusion that imperialism as a bad policy option that can be globally challenged and reformed. Hardt and Negri’s concept of Empire provides a popular version of this ideological position. There is a reformist labour international around Castro, including Chavez and Lula that promotes social democratic regimes coming together as an international counter-weight to US rogue imperialism. But the severity of the crisis imposed on the masses is rapidly surpassing the capacity of the reformists and their leftwing cheerleaders in the WSF to strangle the exploding resistance movements. Castro, Lula and Chavez attempts to negotiate with imperialism can only be at the expense of their worker and peasant supporters. Once we can see that 21st century imperialism is on the road to destruction, then we understand that only a world working class mobilisation for a global socialist society can offer an alternative. The cost of anarchic date-expired capitalism in the 21st century will be more wars and destruction unless it is replaced by socialism! 

From Class Struggle 55 April-May 2004

Written by raved

January 6, 2010 at 8:06 pm