In January at a meeting of the International Committee of the International Marxist Tendency Alan Woods gave a lead off on World Perspectives, in which he analysed the unfolding class struggle on an international scale, laying special emphasis on the events taking place in Latin America. After a long period of relative lull in the class struggle workers everywhere have started to move once more. The task is to provide this movement with the necessary revolutionary leadership. The present text is based on Alan Woods’ speech.

Politics is the science of perspectives. This is the key to all our work. The present world situation entirely confirms the general line of our perspectives worked out in previous world perspectives documents. It may be necessary to correct this or that detail, but the fundamental analysis of the period through which we are passing has been confirmed by the march of events. This should strengthen our confidence in the ideas of Marxism and in ourselves.

It is a supreme irony that so many have abandoned Marxism – some explicitly, others implicitly – precisely when history has vindicated its main postulates in a laboratory fashion. The bourgeois, the reformists, the Stalinists and the sects, have not the slightest idea of the real processes at work. It is not an accident that all other tendencies are all in a state of utter confusion, pessimistic and sceptical. The strategists of the bourgeoisies – especially in the USA – have no real perspectives. In the words of Trotsky, they are tobogganing towards disaster with their eyes closed.

Lenin once said that politics is concentrated economics. However, it is not possible to reduce politics to mere economics. The economic cycle has considerable importance. Indeed, in the last analysis it is decisive – but only in the last analysis. In his 1924 preface to The First Five Years of Communist International, referring to the situation in Germany, Trotsky explained:

“Today more than ever we are obliged to follow attentively the fluctuations in the commercial and industrial conjuncture in Germany and the way in which they are reflected in the living standards of the German worker.

”It is economics that decides, but only in the last analysis. Of more direct significance are those political-psychological processes which are now taking place within the German proletariat and which likewise have an inner logic of their own.” (The First Five Years of Communist International, vol. 1, p.7).

Marxism has nothing in common with economic determinism which attaches an almost exclusive importance to the question of the economic cycle. What is first necessary to understand is that the nature and effects of the economic cycle varies at different stages of capitalist development. The booms that accompanied the period of capitalism’s historical upswing are not at all similar to those that occur in the period of its senile decay.

There are periods of capitalist upswing during which booms are prolonged and recessions short and shallow. Such a period was the period before the First War and the period that followed the end of the Second World War. These periods are characterized by full (or relatively full) employment, rising living standards and an amelioration of the class struggle. They are the classical periods of reformism.

Such periods transmit a definite psychology that extends from the ruling class and its ideologues through the ranks of the middle class and into the working class itself. There is a general feeling of confidence, that all is for the best in the best of all possible worlds, that today is better than yesterday and tomorrow will be better than today. In such periods the revolutionary tendency will inevitably find itself isolated and weak.

Under such conditions reformism was the dominant trend in the workers’ movement, and the right wing was dominant in the reformist camp. The pressures of capitalism bore down on the labour movement from the tops, setting the seal on the reformist degeneration of the mass workers’ parties (“communist” as well as social democratic). The illusion was created that capitalism had solved its problems and revolution was a thing of the past. Under these conditions the genuine current of Marxism was isolated and reduced to a small minority for a whole historical period.

Now, however, the situation has changed into its opposite. The capitalist system is displaying all the symptoms of senile decay. It has lost its equilibrium and cannot return to it. As we predicted in the last world perspectives document, every attempt to restore economic equilibrium inevitably destroys the political and social equilibrium. This is now a fact that can be observed worldwide. With the exception of China, the rates of growth in the advanced capitalist countries are extremely sluggish. The USA, it is true, has managed a 3% growth rate, but it suffers from serious imbalances, as we shall show, and it is not certain that it can maintain this rate of growth for long. On the other hand, the EU’s rate of growth is only 1.8% (or more likely 1.5%). Italy’s growth is a mere 0.2%. And this is what they call a boom!

The period that followed 1945 showed, perhaps for the last time, what the capitalist system was capable of. This was a colossal fireworks display of economic growth, with full employment and rising living standards at least in the advanced capitalist countries of Europe, Japan and North America. It was a period of reforms and concessions, leading to an amelioration of the conditions of the masses and a lessening of the class struggle in the developed countries (the situation in most of the undeveloped world was completely different).

In the period 1948-73 the annual growth of the world economy (based on fixed dollars of 1990) was five percent. World trade was also expanding rapidly and acting as a stimulus to the development of the productive forces. In the same period the annual increase in world commodity exports was 7.4%, and that of world manufacturing exports 9.8%. This was a prolonged period of capitalist expansion that lasted until the first serious world recession in 1974.

However, since then the capitalist system has not managed to recover anything like the same results. Whether we take growth rates, profitability, productivity, unemployment, or any other index, the results are generally worse. Between 1973 and 1998 the average annual growth rate of the world economy was 2.9%. In the period 1990-98, the most significant period of economic growth since 1973, it was 2.6%. If we consider world trade, the average increase of world commodity exports in 1973-1998 was 4.7%, and that of manufacturing exports 5.9%. In 1990-98 the corresponding figures were 6.5% and 6.7% respectively (figures from the WTO).

In the period after 1945 the growth of world trade was the most important locomotive for the world economy. But in recent years there has been a slowing down of the growth of world trade. World trade in 2000 grew by more than 10%, but in 2001 it was a mere 1,5%, in 2002 2% and in 2003 just over 3%.

Economic cycle and class struggle

The most important question on which we must focus our attention is the political and social effects of the crisis of capitalism – the way in which this is finding a psychological expression among the masses. Even the events of the last two or three months have furnished us with a wealth of information in this respect. A serious political crisis is developing in one country after another. Everywhere there is the beginning of a ferment among the masses. The explosions in France indicate a growing mood of revolt among the youth. In one country after another there have been important strikes. There is an acceleration of the process of radicalisation. We are witnessing the reawakening of the working class on an international scale.

From the point of view of the class struggle a deep slump is not necessarily a good thing. Sudden mass unemployment can cause a temporary paralysis of the class struggle. The workers are traumatized for a time, although this can later lead to factory occupations and the masses will begin to draw far-reaching political conclusions. The present situation, on the other hand, can and does act as a stimulant to the class struggle. There is feeble growth, but accompanied by high, persistent, organic unemployment. This is a boom at the expense of the working class, based on merciless pressure, closures, sackings, unemployment, speedups, attacks on pensions. Everywhere the message is the same: “work until you drop dead.”

In the last few months, to take a few random examples, Telstar, Australia’s leading telecoms firm, has cut 12,000 jobs, while Deutsche Telekom has slashed 19,000 jobs. The pharmaceutical company Merck announced a three-year restructuring plan, with the loss of 7,000 jobs.

This is the only kind of boom you can expect during the present period. The question must be asked: what will happen when there’s a slump? It is clear that a serious slump is being prepared. The timing cannot be established with any degree of certainty. Economics was never an exact science and never will be. At most it can establish general trends. But that isn’t the point. The effects of capitalist crisis are making themselves felt right now. The capitalists attempt to increase their share of the surplus value at the expense of the workers. This can be seen everywhere. In every country the share of the workers in the national wealth is declining, while the share of the capitalists is increasing.

The capitalists have maintained profits, on the one hand by expanding both relative and absolute exploitation and on the other hand by increasing participation on world markets, a greater intensification of the international division of labour (or “globalisation”, as they call it). This has temporarily assisted them. That is why the two world recessions that have occurred since 1987 have been quite mild affairs, compared to the four deeper recessions of the previous 18 years. But in economics, the past is no indication of the future. The fact that the last two recessions were shallow doesn’t mean that this will apply to the next one. On the contrary, everything seems to indicate that enormous contradictions are preparing way for serious slump when it arrives.

The USA

To prevent recession – since they were worried about the political and social effects the US bourgeois have behaved irresponsibly from a capitalist standpoint. The Republicans, who formerly embraced the principles of sound finance, balanced budgets and a strong dollar, have thrown caution to the winds and are acting like a drunken libertine, gambling away the family fortune at the roulette table. The result has been a massive increase in credit, and unprecedented levels of state, business, and personal debt. No other country could get away with this. The IMF would be knocking on the door demanding austerity measures. Only America’s special position as the world’s most powerful nation has saved it. But this situation cannot be continued indefinitely.

Marx long ago explained that the capitalists could avoid a crisis for a time through the use of credit. This serves to extend the market beyond its natural limits. But sooner or later this must turn into its opposite. The debts must be repaid with interest. Thus, the expansion of credit increases the market in the short term only at the cost of reducing it sharply in the longer term. Greenspan, who was responsible for this policy, has retired. The Economist on 15^th October 2005 asked the question: “would any sane man want to take this job?” The reason for this scepticism is that US capitalism is based on unsound foundations. Greenspan has left behind him a nice mess for his unfortunate successor to clear up in the shape of a huge budget deficit (“the Greenspan deficit”).

The US economy is perched on a mountain of debt. Sooner or later, mountains experience avalanches. All serious economists admit that the USA is what is known as a bubble economy. To make matters worse, inflation is beginning to rise again in the USA. This raises the spectre of increased interest rates. But one of the main factors in prolonging the consumer boom in the USA (for which Greenspan was responsible) was the historically low rate of interest. This had the effect of expanding credit (and hence the market) but only at the cost of preparing a painful crisis in the future.

Greenspan created a situation where a series of increases in interest rates have become necessary. The Fed has increased interest rates eight times in the last 12 months. But this was a case of “too little and too late”. It has done nothing to reduce the speculative bubble, or lower inflation, which reached four percent in 2005 – the highest rate since 1991. Short- term interest rates in the USA are therefore higher than in Europe, attracting money in spite of the colossal deficits. Sooner or later, high interest rates will puncture the consumer boom in the USA. This will have serious effects on the world economy. The European capitalists are already talking about increasing interest rates, although the economy of the EU is hardly growing at all.

The sickness of the US economy can be charted by the feverish movements of the dollar. The dollar, as we predicted, has experienced a steep fall. How could it be otherwise when the USA has a current account deficit of approximately $800 billion? What is more surprising is the fact that the dollar has partially recuperated. It has gained 3.5% in relation to a broad basket of world currencies, and even more (14%) against the Euro.

However, this situation cannot be maintained. It does not reflect the strength of the US economy but rather the weakness of the European economy. It can be reversed at any time, with a major outflow of foreign currency and a further steep fall of the dollar. There is now an extreme nervousness on the part of bourgeois. Any shock, such as a sudden increase in oil prices, can spark off a bout of selling on world stock exchanges that can provoke a panic.

In the given circumstances, this will have serious consequences for the real economy. It will puncture the speculative bubble that has led to overvalued share prices. Above all, it will lead to the collapse of the housing and property market. Since building and related activities are the main element behind the boom in the US economy (together with consumption based on credit), it will lead to a sharp downturn in the real economy and a downward spiral that will be difficult to control.

We are already seeing evidence of overproduction in cars and mobile phones both in Europe and the USA. The automobile industry is still a very important industry in the USA. Many other industries depend on it. But all auto firms in the USA are in a deep crisis. General Motors is on the verge of bankruptcy. Ford and Daimler-Chrysler are not in much better shape. Delphi, the largest US suppliers of car parts, has gone bankrupt. All the major US car firms are furiously discounting. This is not a sign of boom, but is a phenomenon we normally associate with a slump. In September 2005 US car sales fell by 20% when compared to September 2004. GM’s sales also fell by 24%. As a result of discounting, car sales are rising again, but profits are declining.

Instead of developing the means of production, the capitalists are engaged in an orgy of destruction on a world scale. We have given some examples, but the reality is that hundreds of thousands of jobs are being destroyed in the productive sector and being replaced in the main by an expansion of parasitic “services”. Those workers who retain their jobs are required to work longer hours in worse conditions and often for less pay. There has been a savage bosses’ offensive aimed at increasing profits at the expense of the workers. It is a universal phenomenon. There are constant attacks on the workforce, which are infuriating the workers. Strikes and protests are on the agenda, as we see already, not only in GM but also with the New York transit workers. The Boeing workers have also struck against proposed changes to benefits. Others will follow.

Marx pointed out that the ideal of the bourgeois is always to “make money from money”, expressed in the formula: M–M1. Whereas in the past the bourgeoisie developed the means of production and therefore played at least a relatively progressive role, this is no longer the case. Increasingly, the capitalists seek to make easy profits through speculative activity, dispensing altogether with the painful necessity of producing. With the exception of China, where there has been an enormous development of the productive forces, the capitalists have not been investing in production to the same extent as they did in the past. The figures for global Foreign Direct Investment (FDI) for the period 1999 to 2003 are as follows:

1999: 1.08 trillion dollars

2000: 1.38 trillion dollars

2001: 817 billon dollars

2002: 678.8 billon dollars

2003: 559.6 billon dollars.

This shows that in 2001 there was an actual fall in FDI of 41%, in 2002 of 17% and in 2003 of about 17%. Furthermore, when we look at the figures for FDI into the United States we find that in 2003, there was a fall of 53% the biggest for 12 years. In Central and Eastern Europe there was a fall in FDI of 30%, in the EU of 20% and in Japan of 35%. (China is the exception, being the country with the biggest inflow of FDI). [Source: UNCTAD 2004 Report]. In its report for September 2005, the IMF warned that “despite the strong increase in business profits, investment performance has been generally weak”, and it called for a change of strategy: “Until now world growth has been sustained by the increase in consumption, but it is now time to shift from growth based on consumption to growth based on investment”.

In their search for easy profits, the capitalists have engaged in a new orgy of takeovers, which almost always end in factory closures, asset stripping and sackings. In the first few months of 2005 there was a 40% increase in takeovers, with a total value of 1,657 trillion dollars. The IMF tries to present this as “economies of scale which permit a reduction of fixed costs”. This is euphemistically known as “creative destruction”. In reality there is nothing creative about it. It amounts to a kind of modern Luddism, except that in the early years it was the workers who wrecked machines, whereas now it is the capitalists themselves.

A lot of the economic activity at the present time is not productive but speculative activity like the stock exchange boom, takeovers and the housing bubble. This does not benefit the economy and does not create an atom of new wealth. It acts as a monstrous bloodsucker, extracting the wealth created by the working class and siphoning it of into the pockets of the parasites. When the last speculative boom collapsed the bourgeois swore they would never repeat the experience. Like a drunk who has over-indulged at a party and wakes up with a bad hangover, they cried: “Never again! I've learned my lesson!” But subsequent events show they've learned nothing.

Of course, there is always a speculative element in every cycle. A speculative boom in real estate played a big role in the boom that preceded the 1929 crash. Before that there was the South Sea bubble in the 18^th century and the Dutch tulips scandal in the 17^th century. But this present bubble is the biggest speculative boom in history, bigger than 1929 and all the others. And the bourgeoisie will live to regret it. They are preparing a serious slump at a certain stage. The figures of the increase in house prices internationally in the period 1997-2005 in percentage terms are as follows:

South Africa: 244

Spain: 145

Britain: 154

Ireland: 192

Italy: 69

France: 57

Belgium: 71

USA: 73

Germany: - 0.2

Although the growth of house prices in the USA has been slower than some other countries, it accounts for something like 80 percent of total US GDP over the last five years. To give an idea of the scale of the problem, the stock exchange bubble in the later 1920s, just before the crash of 1929 was the equivalent of 55 percent of total US GDP. In the last five years in the USA consumer spending and residential construction represented no less than 90 percent of total GDP growth. Over two fifths of all jobs in the private sector since 2001 have been related to housing. This situation is alarming the serious bourgeois economists.

The problem can be simply stated. In the last period there has been an enormous expansion of credit and debt. This is the basis of the consumption boom in the USA. A householder can owe more than what his property is worth. This is the way in which US capitalism has expanded the market far beyond its natural limits. But there is a small problem here: debts must be repaid, and house prices (and stock prices) can rise and fall, but debts are fixed. Sooner or later the gap will have to be filled. The present speculative orgy, like every other bubble in history, will inevitably end in a slump.

A housing market crisis will affect the real economy very seriously. Most economic activity in the USA in the recent period, one way or another, is connected to the construction industry. A sharp fall in the housing market will affect house building directly, and that is the main motor force for the present boom. But the indirect effects will be still greater. As credit becomes squeezed, consumption will be reduced. The high levels of consumer debt, which previously sustained the boom, will have the effect of sharply constricting the market and deepening the slump when it finally arrives. And the longer the moment of truth is delayed, the deeper the slump will be.

As in every slump, all the factors that propelled the economy upwards in the boom will turn into their opposite. Cause becomes effect and vice versa. The effects will soon be felt on the world market, precisely as a result of globalisation. When the US consumer stops spending, where will China sell its goods? And when the Chinese economy slows down, the whole of Asia will be affected immediately because its main market is now China.

Protectionist tendencies

The bourgeois thought globalisation had solved their problems. They imagined that they had discovered something entirely new. In fact, it was not new at all. Marx explained in the third volume of Capital how the development of world trade can temporarily prevent a crisis, but only at the cost of preparing an even bigger crisis in the future. In the last two decades the bourgeoisie has developed the world market on an absolutely unprecedented scale. This has undoubtedly helped the capitalist system to get certain results and explains the shallowness of recessions in the recent period. But the emergence of China as a major economic power is preparing new contradictions on a world scale.

It is certainly not a minor thing that 1,000,000,000 people should enter the capitalist world market, as has happened in the case of China. China has played the role that the capitalists had originally intended for Russia. It provided them with a vast field for the export of capital and commodities, new markets and investment opportunities. In other words, they saw China only as a market, but did not adequately understand the longer term implications (capitalists tend not to think about the long term). By investing massively in China, they have created a mighty industrial rival that is now in a position to challenge them on world markets.

This is already a phenomenal result, but it has its limits. The movement in the direction of capitalism and the abandonment of a planned economy is preparing the way for a massive crisis of overproduction in China. Thus, whereas China has moderated the effects of the last two world recessions, it can now have just the opposite effect.

From a Marxist point of view, the massive development of industry in China is a progressive thing because it develops the power of the proletariat. According to official statistics the number of mass protests in China has risen from 10,000 in 1994, to 74,000 in 2004. This is an indication that revolutionary developments are being prepared in China.

A serious slump – perhaps led by a crisis of overproduction China – is now being prepared in which all the factors that served to propel the world economy forward in an upward and apparently unending cycle, will turn into their opposite. Previously the West saw China as a gigantic market but it does not require much intelligence to see that if you build factories in China, they will start to produce export commodities in massive amounts. This is already happening and the Americans are increasingly alarmed by this.

This economic giant has now overtaken the USA as an exporter of high tech. goods. With cheaper labour costs, modern machinery and high productivity, China has become a formidable force on the world market. In 2004 China exported $180 billion in high tech goods. The result has been a furious outcry particularly from the US capitalists. There is a growing protectionist mood in Congress, fuelled by congressmen whose position is being threatened by unemployment in their own states. Charles Schumer, the most vociferous representative of this group, put forward a bill that threatened to impose a 27.5% tariff on Chinese imports. He did not succeed, but it shows the direction in which the situation is moving.

There is now a ferocious struggle for even the smallest markets. This is threatening the future of world trade and undermining attempts to liberalise it. This explains the failure of every one of the world trade summit meetings: first Seattle, then Cancun. The same protectionist tendencies can be observed in the Doha round of talks on world trade. Here we see the complete hypocrisy of the demagogy about “free trade”. The strong capitalist economies of Europe, Japan and the USA forced the weak countries of Asia, Africa and Latin America to open up their markets under the banner of “free trade”. As a result, the native industries were decimated and whole nations ruined and forced into debt from which they cannot escape. But when the poor countries ask for free trade in agriculture, which would afford them some relief by giving their agricultural exports more access to the lucrative markets of North America, Europe and Japan, the doors are immediately slammed in their faces.

The deadline for the Doha talks is June 2006, at which point the permission of the US Congress for the negotiations expires. Yet no progress has been made. They are haggling like miserly peasants at a medieval horse fair. The main bone of contention is agriculture. Although this only accounts for three percent of total world output and less than ten percent of total world trade, it nevertheless accounts for 60% of the benefits of the Doha round. But the USA, Japan, and particularly the EU are not prepared to make meaningful concessions. They all put the interests of their rich farmers first. The US government subsidises its farmers to the tune of $19.1 billion, while the EU farm subsidies amount to a colossal $75 billion.

Contrary to the prejudices of the bourgeois economists, globalisation is not set in stone. It can be reversed, just as it was reversed in the past. Before the First World War there was major globalisation. In some ways it was even more than now. That was certainly true in terms of immigration and labour markets. However, this tendency was reversed in the interwar period. The slump turned into a prolonged depression, characterized by beggar-my-neighbour protectionist policies, competitive devaluations and so on.

Protectionism is in fact an attempt to export unemployment. In the event of a deep recession, with high unemployment, the main capitalist powers will attempt to solve their problems at the expense of other countries. The tensions between Europe and the USA, between the USA and China, which already exist, will become exacerbated. The whole fragile fabric of world trade will be put under enormous strain, preparing the way for protectionism and trade wars. This is implicit in the present situation.

The growth of protectionism can be seen in the increase in the number of bilateral or regional agreements. In 2004 there were 206 such agreements, compared to only 89 in 1995. These bilateral agreements, which have been pushed hard by the USA, are an attempt to by-pass the WTO, which Washington sees as inimical to its interests. But other countries are following in the footsteps of the USA. The latest involves Asia, where China and ten other countries of South-East Asia are preparing a free trade deal that will affect 1.800 million consumers. The objective, which will probably not be reached, is to reduce tariffs for most products to zero by 2010. From this it is clear that China is laying claim to economic hegemony in Asia, which will inevitably lead to a direct collision with the USA, with not only economic but also military implications.

Europe

European capitalism is in a state of long-term decline, reflected in a low rate of growth and high rates of unemployment. In place of growth there is economic stagnation. The whole European project is starting to become unstuck. The row between Britain and France over the EU budget, and the debacle of the European Constitution, are only two symptoms of this fact.

The ambition of the EU to dominate all Europe up to the borders of the former Soviet Union have created new contradictions. Eastern Europe lags far behind the rest of the EU. Unemployment in Poland is officially 18 percent, and in reality far higher. Entry into the EU will solve nothing for these countries, but will place a severe strain on the EU itself. Countries like Poland and Hungary have a large and backward agricultural sector that cannot be easily integrated into the EU, where the Common Agricultural Policy is already absorbing huge amounts, imposing a severe strain on the budget and exacerbating the conflicts between France and her “partners”.

The conflict between Britain and France over the budget centred on two questions: the British rebate and the CAP, which pays out a generous subsidy to France. The viciousness of the dispute exposed the underlying contradictions between the EU nations and exploded the myth of “European solidarity.” Far from advancing to a European “super-state”, the process towards European unity has been halted and is in the process of being reversed. Of course, the European bourgeois cannot accept the destruction of the EU, and the euro may be maintained. But the original terms of the Maastricht Treaty are as dead as the dodo.

Britain, having lost her status as a world power, has been reduced to a second-rate country off the coast of Europe. Its decline is graphically illustrated by the so-called Special Relationship with the USA. The slavish subordination of Blair to Bush in all matters shows the complete impotence of Britain, which has lost most of its industrial base. Blair and Brown used to boast about Britain’s economic success, based in market economics. But all that has evaporated. Its rate of growth is now no more than 1.5% the lowest for 12 years. The clash with France ended badly. Blair was obliged to make a humiliating retreat over Britain’s contribution to the EU budget, while Chirac conceded nothing at all. With the onset of recession and high rates of unemployment, there will be many more conflicts between the EU states.

The attempt to impose a common currency has, as we predicted in advance, caused an aggravation of the economic crisis. This is particularly clear in the case of Italy. Italy is now the sick man of Europe. The crisis in Italy is extremely serious. In the past, the Italian bourgeois got out of crises by resorting to the devaluation of the lira and increasing budget deficits. Now, with the euro, neither of these options is possible. The Italian ruling class must place all the burden of the economic crisis on the shoulders of the working class. This has led to a whole series of general strikes that have completely undermined the Berlusconi government. The bourgeoisie has no alternative but to send the working class to the school of Prodi. It will be a very hard school.

A few months ago The Economist published an article saying that to solve the problem of the Italian economy they need to lay off 500,000 workers in the industrial sector, and cut wages by 30%. This shows the real plans of the bourgeoisie. It shows how much pressure will be on the Centre-Left government when it comes to power. It will be forced to carry out attacks on the workers. But it will also be under the pressure to carry out policies in the interest of the working class. This will open up a ferment of opposition in the ranks of both the RC and DS, with big possibilities for the Left Wing and the Marxist tendency, which has already made important gains.

Italy is now in the front line of the class struggle in Europe. But Germany and France – two key EU countries – are not far behind. In both countries there is a deep political crisis. The result of the EU constitution referendum in France was a bombshell. It was not just a vote on the EU constitution or even against Chirac. It was a protest against the whole situation, a vote against the whole political Establishment.

The riots in the French banlieues reflected the accumulated contradictions in French society (which have been building up since 1968). It reflects the burning anger of the dispossessed youth which sees no future for itself in the present system. This feeling of alienation has many causes: poverty, discrimination, racism, police violence. But in the last analysis, it is a reflection of the fact that in the present period even in an economic boom, unemployment remains very high. In France, according to the official statistics (which always understate the real position) there is around ten percent unemployment. But for young people the figure is twenty percent, and for young North Africans forty percent.

The burning of cars is a blind protest against inhuman conditions, against unemployment, bad housing and social decay. The bourgeois throw up their hands in horror at the violent manifestations of discontent. But who are responsible for this? In the first place, the capitalists and their hired agents, the politicians and police who preside over appalling conditions of social deprivation, and in the second place the reformist leaders of the workers’ parties and unions, who have been incapable of giving a political and organisational outlet to the discontent of the youth.

The representatives of the ruling class often come to the same conclusions as the Marxists. After the riots and the EU referendum, President Chirac is reported to have said: “There is a profound malaise in France.” That is undoubtedly true, but not only in France. In Germany there are over four million unemployed and a budget deficit of 32 billion Euros. As a result Germany is now passing through its worst crisis since the end of World War II. It is ironic that the CDU has taken over the government just at this time. In the past, the bourgeois parties were in power during a boom and handed power to the Social Democrats when the economy was in trouble. The latter could then do all the dirty work and then could be kicked out and replaced by the open representatives of the bourgeoisie.

Angela Merkel likes to present herself as a “reformist”, by which she means that she stands for a policy of vicious counter-reforms and cuts. The German capitalists are no longer capable of giving reforms and concessions as they did in the past. On the contrary, they cannot tolerate the reforms they have already conceded. But in the last elections the people were precisely voting against “reform”. The stage is therefore set for an explosion of the class struggle in Germany and a growing polarisation to the left and right. An anticipation of this is the left split in the SPD even at this very early stage.

The situation in Germany today already bears certain similarities to the unstable and turbulent days of the Weimar Republic. Everywhere we look, we see the same process. There were two general strikes in Belgium. In Greece there were two important general strikes. In December 2005 there was a general strike in Greece against the right wing ND government. Almost at the same time in Ireland there was a mass demonstration of 100,000 people in Dublin in support of the ferry workers and against attacks on pensions and workers’ conditions.

In Spain the right wing government of Aznar was overthrown by a mass movement that acquired almost insurrectionary characteristics in only a few days. This demonstrated the revolutionary potential of the Spanish working class that is deeply rooted in its past traditions. The bourgeoisie is not reconciled to the Zapatero government and is mobilising the forces of reaction on the streets. The workers and students have staged strikes and demonstrations to press for their demands. The Church and even sections of the army officers have been involved in a reactionary conspiracy to bring down the elected government. There are striking similarities with the 1930s, with a massive polarisation to the right and left. The same symptoms are developing, at different rhythms, in other countries in Europe.

The political crisis is not confined to Europe. We see it also in Israel, Canada, Pakistan, and many other countries, including the USA itself. The immediate cause of the crisis may vary significantly: it may be economic, but also military, a political scandal, a terrorist act, or any number of other causes, but ultimately the real cause is the same. Hegel pointed out that necessity expresses itself through accidents. The slow, almost imperceptible mood of discontent reaches a point where it must find an expression.

In Australia the right wing won a sweeping victory in the last election, which gave them a majority in both the senate and the lower house. This followed a period of economic boom when the Australian economy grew by five percent a year. Yet the Australian ruling class put heavy pressure on the Conservatives to launch an unprecedented brutal attack on living standards. As a result there have been mass demonstrations in all the main cities involving at least half a million people. This happened in a country where there had been no significant movement of the working class for a long time. Yet the workers reacted immediately to the attack on their living standards.

Thus, the crisis is manifesting itself everywhere. If it was a case of one country or another, one could conclude that these were merely accidental phenomena. But that is not the case. These are clearly indications of a general tendency. They indicate that we have entered into an entirely different historical period on a world scale. The period we are entering will be more like the turbulent 1930s than the 1960s or 1950s.

The “war on terror”

Imperialist arrogance, greed for plunder and rabid reaction on the part of Bush and his clique were the motives for the US military adventure in Iraq. This was quite unnecessary and has had the most serious consequences from the standpoint of US imperialism. Who can deny this? With an occupying force of 130,000 troops equipped with the most sophisticated modern weapons, they have not succeeded in pacifying Iraq. It is now no longer a question of if, but when they will leave.

They will leave behind a total mess. Despite all the bragging propaganda, the elections have solved nothing. A recent official Iraqi opinion poll says that more than 50% of Iraqis now consider they were better off under Saddam Hussein. 85% want the Americans to leave. The USA is desperately trying to create an Iraqi army in order to withdraw its troops before the military situation deteriorates any further. But how? In their efforts to get a base, they have split Iraqi society along national and religious lines.

Washington gave concessions to the Shiites, which alienated the Sunnis and also the Kurds. As a result they have allowed Iran to intervene. The tensions between Teheran and Washington have been heightened as a result. Now they are attempting to redress the balance, offering concessions to the Sunnis, including the offer to include former Baathists in the army and security forces that they previously dominated. This has infuriated the Shiites and increased the danger of sectarian conflicts and violence.

The invasion of Iraq is having a profound effect in the USA itself. Recent polls show a sharp increase in opposition to the Iraq war, which 54 % now think was a mistake. Only 34% of Americans now think there will be a positive result. Apart from the large number of US soldiers killed and wounded, the economic costs are enormous. The occupation of Iraq is costing the US Treasury not less than six billion dollars each month. Not even the richest power on earth can stand such a drain of resources indefinitely. Sooner or later they have to withdraw with tail between legs.

Let us recall that the declared aim of Washington was to defeat terrorism. What are the results? On all sides the risk of new terrorist attacks has increased, not diminished, with al Qaeda operating freely not only inside Iraq but in countries like Jordan, a key US ally which was relatively stable, but no more. Saudi Arabia looks increasingly unstable. The Lebanon is on the brink of civil war. In other words, they have succeeded in destabilising the entire Middle East.

As for Bin Laden, he was supposed to have been killed several times but is still alive and active in the tribal areas between Afghanistan and Pakistan, together with his Taliban friends. This was hardly what Bush and Rumsfeld had in mind when they began their adventure.

Israel is also passing through a political crisis that is without precedent since the state was established. The fact that Sharon was unexpectedly laid low by a stroke was an historical accident of the purest kind. But the question must be asked: how does it come about that the entire political life of Israel has been plunged into crisis on the basis of one old diseased man. This is a reflection of a complete impasse – the expression of an unstable system.

This turbulence is not directly caused by economic factors, but at bottom the crisis of Israeli capitalism affects the psychology of the masses in a decisive way. In the past, the Israeli population (like the Australians) enjoyed a privileged standard of living. In the early days, when the Zionist Labour Party was in power, it carried out reforms that benefited the masses and even paid lip service to “socialism”. Now all that has been reversed. The economy is in crisis. There is ten percent unemployment and there are soup kitchens in Israel. Instead of reforms there are counter-reforms.

Under these circumstances, there has been a split in both the Labour Party and the Likud. This places on the agenda the beginnings of a polarisation to the right and left in Israel, which can have a profound effect on the whole situation over a period. The problem consists in the lack of leadership and the national question that constantly serves to distract the attention of the masses from the class questions.

In the Palestinian territories there is also a growing discontent with the corrupt bourgeois leaders of Fatah. Mahmoud Abbas aspires to be an American stooge. But he is not even very successful at this. He cannot control the masses, and Washington has no use for a stooge who cannot keep the masses under control. The manoeuvre in Gaza has led to few benefits for the people who live in the direst poverty with mass unemployment.

The recent elections led to a sweeping victory for Hamas, which reveals the depth of discontent with the corrupt and impotent Palestinian Establishment. But the masses are suffering from exhaustion after years of struggle and hardship. Even the decision of Hamas to participate in the elections was a tacit admission of this fact. In reality there can be no way out for the Palestinian people other than the revolutionary road: the overthrow of both the corrupt and bankrupt leadership and the reactionary Zionist ruling class in Israel. This cannot be achieved without the support of at least the decisive section of the Israeli working class.

The conditions are beginning to exist for forging a genuine unity in struggle of the Palestinian masses and the Israeli working people. But the prior condition is the abandonment of the counterproductive tactics of individual terrorism and the systematic building of contacts between the workers and youth of Palestine and Israel. For this a genuine revolutionary party and leadership are necessary.

Asia

In its ambition to dominate the whole world, US imperialism attempted to surround Russia with a string of puppet states in Central Asia. Having got Poland and other former Soviet Bloc countries in Eastern Europe to join NATO, it then extended the scope of its intrigues to countries like the Ukraine, Georgia, Uzbekistan and Kirghizstan. It has thus caused the destabilization of one country after another, setting the alarm bells ringing in Moscow and Beijing.

Russia and China are now attempting to counter the USA. Moscow is pressurizing Ukraine, using the powerful lever of oil and gas supplies to show the government in Kiev who is boss. It is also applying pressure on Georgia. It has succeeded in getting the Americans ejected from Uzbekistan. Having lost its base in Iraq, it is giving tacit support to both Iran and Syria against the bullying tactics of Washington.

For its part, China is using its economic successes to increase its already considerable military power. It is re-equipping its army. Its space programme is dictated primarily by military considerations (as is that of the USA). It is flexing its muscles in Asia, where it has issued a stern warning that it will never tolerate a declaration of independence by Taiwan, which it regards as a breakaway province of China. This is not a bluff. The rulers of Beijing fear that such a move might encourage breakaway movements in other parts of China. And they have the necessary military means to impose their will. Sooner or later there will be a head-on collision between the USA and China over the Pacific – the most decisive area for the future history of the world.

The Americans have not pacified Afghanistan, as they claimed. The recently elected parliament (loya jirga) consists of a motley assembly of warlords, drug barons and Taliban. Out of 240 members of this parliament, 200 are said to have private armies. The central power has only the American army and its foreign allies to rest on. Karzai only maintains a shaky control over Kabul thanks to the US forces who are (so far) keeping him alive. Outside the capital he controls nothing. Meanwhile, Pakistan and the whole of Central Asia has been destabilized. This is hardly a satisfactory balance sheet from the standpoint of Washington.

In Pakistan, the earthquake was equally an accident – a terrible freak of nature. But it brought to the fore all the accumulated social and political tensions in Pakistan. The system is now so fragile, so inherently unstable, that any external shock can cause a deep crisis. The Pakistan ruling class is so desperate that they have decided to unleash the national question, stoking the fires of national conflicts in Baluchistan and elsewhere. This will have serious repercussions in the North West Frontier (already in a state of turmoil), Sindh and Kashmir itself.

US imperialism, having aggravated the situation by its interference in the region, has tried to prop up its puppet Musharaff, but it is leaning on a broken reed. Musharaff can be overthrown or assassinated at any time. This will open up the floodgates, preparing the way for revolutionary developments that will affect the whole Subcontinent. The tragedy in Kashmir caused a wave of spontaneous sympathy on the part of the masses in India. This does not suit either the reactionary Pakistan ruling class or the equally reactionary Indian bourgeoisie. Neither side is interested in solving the Kashmir question, which they have always used to stir up hatred between the peoples in order to divert attention away from the class struggle.

The crisis in India is also deepening. The defeat of the reactionary BJP at the last elections represented a political earthquake, but the bourgeois Congress has been rapidly discredited. Under the remorseless pressure of the IMF, it has carried out a policy of “reform” (that is, counter reforms). As a result it is in crisis and is stricken by scandals. In fact, both Congress and the BJP are in crisis and splitting. Meanwhile the powerful Indian working class, which prepared the electoral victory of Congress with a general strike, is once again flexing its muscles in a new strike wave. But both the CPI and CPI (m) are tacitly supporting the Congress government. This is causing growing discontent in the ranks. For the first time the unions have struck in Kerala where the CPI (m) is in power.

Crisis of the ruling class

In most of the world, we see a total inability to develop the productive forces as in the past (China is the most important exception). This shows that capitalism is no longer capable of playing a progressive role. There is reaction at all levels, not just in politics, but also in culture. We see the distilled essence of this reaction in the USA. The most advanced country on earth, the most scientifically developed in history, is being run by a degenerate clique of obscurantist religious fundamentalists. Under the slogan of “intelligent design”, they are advancing the ideas of Creationism.

The sickness of the system expresses itself in politics, culture, art, philosophy, economy. In the final analysis, this is an expression of the impasse of a system that is incapable of developing the productive forces any further. It has the stink of decay about it in the same way as the regime of the Bourbons, or of the Roman Empire in the period of its decline.

The Liberals of the 19^th century used to say that the people get the government they deserve. That is not strictly correct, but it is certainly true that the ruling class has got the leaders it deserves. In the past Trotsky said that the real religion of the British ruling class was not Christianity but national arrogance. But at least the national arrogance of Lloyd George, Baldwin and Churchill was accompanied by a degree of intelligence.

It is no coincidence that the period of the senile decay of capitalism produces leaders like Bush, Blair and Merkel. Some might ask what is the point in mentioning the intellectual ability of George Bush, or rather the lack of it? Does not Marxism base itself on the general historical processes, which in turn are determined by the stage of development of the productive forces? The answer to this question was given long ago by Marx and Engels, who explained that men and women make their own history, although, contrary to the belief of the idealists, they are not entirely free agents in the historical process and must function within the range of possibilities that are, in the last analysis, determined by economic factors.

It is not at all correct to say that the personal qualities of the bourgeois leaders play no role. Such a statement is like saying that the personal qualities of the general staff plays no role in warfare. It resembles the barren scholastic caricature of Marxism of those formalists who argue that because socialism is historically inevitable, there is no need to build a revolutionary party and leadership. As a matter of fact, not only do the personal qualities of Bush and Blair play a role in shaping events, they also reflect objective reality. Lenin explained that a man at the edge of a cliff does not reason.

Middle class moralists have a superficial view of the world situation. They wring their hands and lament: “what a terrible world we live in!” They do not understand that all these horrors are only the outward symptoms of a deeper crisis, a crisis of the system itself. Such ugly phenomena have always accompanied every declining system on its way to extinction, as any student of the history of the Roman Empire and the decline of feudalism will be well aware. But just to see the negative side of things is entirely unscientific. It is also useless in practice. These people resemble a bad doctor who limits himself to complaining about the symptoms exhibited by his patient instead of providing a scientific diagnosis of the disease and suggesting a remedy.

Marxists do not adopt a moralistic attitude to the phenomena that we see before us. We understand that these symptoms are the necessary product of a socio economic system that has outlived its historical usefulness and is exhibiting all the signs of a terminal sickness. It is the inevitable result of the death agony of capitalism. To tell the truth, it is a system that ought to have been overthrown long ago. The old society is dying on its feet and the new society is struggling to be born.

The task of the Marxists is to do everything in our power to cut short this convulsive process that is threatening to undermine civilisation and human culture and to develop and help the forces of a new society. That is to say: we must help the working class, starting with its most conscious elements, and the youth, to understand the tasks posed by history and to fulfil its historic mission: the socialist transformation of society.

We must understand the other side of the picture: the revolutionary elements that are beginning to emerge from the general turmoil. Yes, this is a terrible world. But out of this chaos, convulsions, wars, death and suffering, a new force is emerging. We see this in the unprecedented mass demonstrations against the criminal war in Iraq. We see it in the mass strikes in France, Belgium, Italy, in Canada and in Australia, in the strikes and movement of the students in Spain and the developing opposition to the war in the USA. Above all, we see it most clearly in the developing revolution in Latin America.

Latin America

In Latin America the revolutionary wave has gone further than anywhere else. It is a genuinely continental process, in which events in one country affect events in every other country. The Venezuelan Revolution has become the main point of reference. Now Evo Morales has won the elections in Bolivia with 54% of the votes, representing the will of the masses to change society. This represents a major turn in the situation. The might of the USA is being challenged in one country after another.

In the 19^th century, when the young American Republic was still flexing its muscles, the nascent imperialist tendencies of the American bourgeoisie were expressed by the slogan “America for the Americans”. Now, when the USA has been transformed into the leading imperialist world power, its slogan is “the whole world for the Americans.” But this is impossible, even for the USA. In reality, the US imperialists have over-reached themselves.

The reformists and pacifists are hypnotized by the “absolute” power of US imperialism. But the power of the USA, although phenomenal, is not unlimited. This is shown both in Iraq and also in Latin America. Of Latin America we said six years ago that it was the key to the world revolution, and we took the necessary organisational measures to react to this fact. We see here the vital importance of perspectives. They are our key and our compass.

We were the only ones to understand the Venezuelan Revolution. Now everyone is running to catch up. The sects and the Stalinists have finally woken up to what is happening. A few months ago the leader of the French Mandelites, Alain Krivine, said: “It seems that something is happening in Venezuela…” That shows the level of these gentlemen. They have absolutely no idea of what is happening and therefore are powerless to intervene.

Latin America shows the limits of US imperialism. In the past, whatever Washington said was put into practice. But the attempt to foist the Free Trade of the Americas Agreement on Latin America failed miserably. And Bush got a very hot reception in Buenos Aires when he went to the Summit of the OSA. Washington is alarmed. They feel that control of Latin America is slipping out of their hands.

Of course, this does not mean that they will just remain with arms folded. No! They are already intervening, and not only with words. The Colombia Plan, which was supposed to be part of the so-called War on drugs, is in reality a war against the guerrillas. It is also an attempt to create a base for US imperialism in Latin America, from which to launch interventions against other states, in the first place, Venezuela. They have turned Colombia into an armed camp, injecting vast sums of money and also sending arms and so-called advisers to prop up the reactionary regime of Uribe.

The Venezuelan Revolution is what most worries Washington. It has gone quite far, but state and key parts of the economy are still in bourgeois hands. Therefore it can still be reversed, and this is the main aim of US imperialism.

The question of power is posed in Venezuela. In the past, the question of power would have to be settled relatively quickly. One side or the other would triumph: either reaction would take power in a bloody coup or the workers would take power. Chile in 1973 was the clearest example of this. But in Venezuela this hasn’t happened. Events are proceeding in a different fashion. There is still enormous power in the hands of the workers who have not been defeated. On the other hand, we can see the weakness of reaction.

The counterrevolutionary forces have been defeated a number of times when they have attempted to take power. In fact in April 2002 they had power in their hands but the coup was defeated. This was the first time in Latin American history that a successful coup was overthrown by the movement of the masses. Yet, incredibly, the Venezuelan Stalinists and reformists complain about the “low level” of the masses. These wretched petty bourgeois have absolutely no confidence in the masses and no perspective of ever taking power. They represent a completely reactionary and retrograde tendency that, if it had its way, would destroy the Revolution and hand power to the reactionaries. Then they would tour Europe weeping about the tragedy of Venezuela and blame the masses for trying to go too far, too fast.

The masses in Venezuela have in fact shown extraordinary levels of revolutionary maturity. Yet they have not taken power. Why not? The only reason is the absence of the subjective factor: the revolutionary party and leadership. Objectively, there is no reason. The objective conditions could not be more favourable for carrying out the revolution. In the short term, at least, the reaction cannot succeed. The right wing showed its complete impotence when it boycotted the legislative elections. They are split and demoralised.

Given the patent weakness of the forces of internal reaction, Washington is becoming desperate. The petty bourgeois elements are scared of a military intervention from the United States. They continually shout, “The Americans are coming!” like the little boy who never tired of crying “Wolf!” In reality, a direct military intervention by the USA is ruled out at the present time. The US imperialists are trapped in Iraq. Bush can’t open a second front in Venezuela – at least not directly.

It is possible that under certain circumstances they might decide to intervene through Colombia. But even that is very risky option. Revolutions don’t respect frontiers. A war with Venezuela could lead to the overthrow of Uribe, not Chavez. It would be a signal for the Colombian guerrillas to step up their attacks. The Colombian army would find itself fighting on two fronts. Such a war would be deeply unpopular in Colombia. There are at least one million Colombians in Venezuela. Chavez has given them full citizenship rights. They are in contact with their families and friends back home. In addition there would be the effects throughout Latin America and in the USA itself, where the Latinos are now the biggest ethnic minority, overwhelmingly poor and exploited. How would they react?

Will the CIA try to assassinate Chavez? That is a distinct possibility. But that would not solve the problem. The masses in Venezuela would react with fury. The oil supplies to the USA would be cut off the next day. Then a violent reaction on the part of the masses would follow throughout Latin America. Not a single US embassy would be left standing, and there would be a further intensification of the revolutionary process everywhere. So Washington must tread carefully even on this question.

At this point the reaction cannot overthrow Chavez, but this situation cannot continue indefinitely. The fact that Venezuela holds large stocks of oil is undoubtedly another factor that allows it a certain breathing space and room for manoeuvre. This element has given the right wing of the Bolivarian Movement – the pro-bourgeois element – a false sense of security. However, it cannot be assumed that the present favourable class balance of forces will be maintained for any length of time.

The level of abstentions in the legislative elections is an indication that the mood of the masses is changing. They are becoming impatient and frustrated with the slow progress of the Revolution. These are the early danger signs. If the masses lose faith in the Revolution and sink into apathy and indifference, the stage can be set for a new offensive of the counterrevolutionary elements. They can count on the support not only of the US embassy but also of numerous counterrevolutionary sympathisers in the upper reaches of the Bolivarian Movement.

The masses want change. Now that the chavistas have a decisive majority in the National Assembly there is no excuse for not taking decisive measures against the oligarchy. The masses will demand this. They will say: “the leaders must do as we say.” A section of the leadership reflects the pressure of the masses. They want to go further along the line of expropriations and workers’ control. But the right wing is dragging its feet. They express the pressures of the bourgeoisie and imperialism. This is the central contradiction that must be resolved, one way or another, in the next period.

Role of Chavez

Chavez is a peculiar phenomenon. He started out as a bourgeois democrat, but the theory of Permanent Revolution is being manifested in a peculiar way in Venezuela as it was in Cuba and China. Of course, there are many differences, but there are also many similarities. The main point is the impossibility of carrying out the tasks of the bourgeois democratic or, as Lenin called it, the national democratic revolution on the basis of capitalism. Chavez has been met at every step with the ferocious resistance and sabotage of the Venezuelan landlords, bankers and capitalists.

The main thing is the role of the masses, that are playing the role of the main motor force in the Revolution. The bourgeoisie is applying pressure to halt the Revolution, but at each stage they have been pushed aside by the workers and peasants. The alternatives are starkly posed: either Chavez capitulates to the oligarchy and imperialism which does not seem likely – or he must make serious inroads into capitalist private property. So far, he shows no signs of retreating. On the contrary, he is on a direct collision course with Washington and the oligarchy – who also have no intention of retreating.

What happens when the irresistible force, hits the immovable object? Something has to give. The legislative elections were an important turning point. The reactionaries in effect abandoned all efforts to take power by peaceful legal means. The question of power is therefore posed point-blank. Chavez now controls the National Assembly. He has said: “In my next term of office, we must make the Revolution irreversible.” What does that mean? We don’t know. Maybe Chavez does not know either. But events have a logic of their own.

The objective logic of the Revolution poses the need to expropriate the oligarchy. It would be possible for Chavez to lean on the masses to expropriate the oligarchy. But this would signify an immediate split in the Bolivarian movement. The MVR was always a highly heterogeneous and ideologically confused movement. At the top, there must be a large number of counter-revolutionary elements. Imperialism is leaning on the right wing “Chavistas” and organizing intrigues with the corrupt elements who favour capitalism and secretly curse the President and the Revolution.

A struggle must open up, in which one side or another must win. Chavez can only win by leaning on the masses, by appealing to them and arousing them to struggle against the right wing. It is not certain that events will unfold in exactly this way, but if they did, what kind of regime would emerge? Would it be a form of proletarian bonapartism? Stalin came to power in an epoch when the Russian masses were exhausted and politically defeated. This is not the case in Venezuela. The working class is aroused, conscious and very sensitive on the question of democracy, which is a main issue.

Chavez can only lean on the masses by appealing to democratic instincts: to cleanse the state apparatus of bureaucracy and careerism. This is not a recipe for a proletarian bonapartist state like Stalin’s Russia. The masses, and the workers in particular, are coming to the correct conclusions: that the workers must control their leaders and their organisations. We see this in every election, when there are protests against the rigging of the electoral lists. This is the only real safeguard against the usurpation of the Revolution by a privileged caste of bureaucrats.

Within the Bolivarian leadership, opposing tendencies are emerging, reflecting the pressures of different classes. One section wants to go further. The other demands the reintegration of the opposition. They argue that it is dangerous that the counterrevolutionaries are not in parliament (a fairly logical result of boycotting the elections). The right wing Bolivarians demand that the majority must bow to the wishes of the minority. And this is what they call democracy! Fortunately, the masses have other ideas. There have been new expropriations as a result of the workers’ initiative from below. The workers demand that the revolution be carried out to the end.

Chavez received six million votes in the referendum, but in the legislative elections only three million voted. This is a warning. A mood of impatience is growing among the workers and peasants – and particularly the advanced elements – the working class activists in the unions and the Bolivarian organisations: “We’ve had enough of this, we need to finish the Revolution”. Chavez himself has given voice to these aspirations when he talks about socialism and the need for a “Revolution within the Revolution”. He quotes Marx, Rosa Luxemburg and Trotsky. He has raised the question that Trotsky was right against Stalin when he said that socialism cannot succeed in a single country. He has said: we want socialism but not like the USSR, we must have a participatory democracy. He has even called for world socialism, quoting Marx’s slogan: “socialism or barbarism.”

Chavez has become the rallying figure for those across the continent who want to fight imperialism and capitalism. After the OAS meeting in Argentina, he spoke out against secret diplomacy, demanding the publication of the texts. After his trip to the UN, he spoke to poor people in the Bronx, advocating socialism. Chavez is a nightmare not just for the US but also for the reformist governments in Latin America. When people see what is happening in Venezuela, they put pressure on leaders like Lula, Kirchner and Vasquez. That is a serious danger from the standpoint of imperialism.

The Venezuelan revolution has begun, in the same sense that the revolution in Spain began in 1931. If the Venezuelan workers possessed a Bolshevik party of 8,000 members they would have taken power by now. But such a party doe not exist – yet. It has to be built. And how is this to be accomplished? Certainly not by proclaiming it, as the sects imagine.

To build a serious revolutionary party it is necessary to work out the correct tactics, slogans, and methods in order to connect with the mass movement, or else the party will be finished before it has begun. We take our stand on the scientific programme of Bolshevism. But it is not as simple as just repeating a few phrases from “What is to be Done?” With such a mechanical conception, we would never link with the masses.

If you make a theoretical error, it will sooner or later come back and have a practical effect. We were the only ones to call for the nationalisation of VENEPAL. Unfortunately, some comrades in the trade union movement in the region were opposed to this slogan with the following formalistic argument: how can we demand this of a bourgeois government? The workers, however, after some discussion, accepted our slogan against their advice. In a very short time Chavez nationalised the factory.

All the sects attack us for our alleged “capitulation” before Chavez. “You must attack Chavez!” they keep on shouting. Yes, by all means shout to your hearts content, ladies and gentlemen. We have not the slightest intention of following your advice. We offer critical support to Chavez. The sects equate criticism with denunciation. That is not at all our method. You do it in the following way: if the leaders take one step forward, we will say, very good, now take another step! And you explain what is needed in a positive way. That way it is possible to get the ear of the masses.

The imperialists understand a bit more than the “Marxist” sectarians concerning the role of Hugo Chavez – hence their desire to assassinate him! The struggle within the Bolivarian movement is a reflection of the class struggle – workers on one side, imperialists and bourgeois on the other. Our tactic is to aim our fire against the oligarchy, imperialism and the right wing of the Bolivarian movement. And this is what is working.

The ultra-lefts don’t see the opportunities; instead they focus on creating a revolutionary party, which is not going anywhere. Unfortunately, sectarian elements have gained leading positions in the UNT, where they exercise a negative influence. With our small forces, we have won some important points of support, and are beginning to have an impact on the situation, starting with the occupied factories like INVEVAL. We must not exaggerate, but our tendency has had a certain effect in Venezuela. Our ideas have found an echo. Whatever happens, we can be proud of our record. It is not a question of boasting: it is an empirically verifiable fact. This International is the only one that understood the whole process in Venezuela. This is understood and appreciated by serious people. The opinions of those who are not serious are of no interest to us.

In the past, we often discussed in the abstract. Now we are acting as a revolutionary International, not a discussion club. We are active participants in the revolutionary process, not mere observers. We must discuss Venezuela on a much more concrete level. We can raise the level of the entire International on the basis of this subject alone. We must provide support to our Venezuelan section. It is not just a question of Venezuela. It is a question of the developing revolution in all Latin America. This is why Washington is terrified. Ultimately, however, it is not just South America or even North America: it is a question of the developing world revolution.

Mexico

Until recently, Mexico appeared to be a stable country. The right wing PAN was firmly in power, the economy was doing well and was firmly welded to the USA. But in the space of just a few months the whole position has been reversed. There is a serious political crisis. There were massive demonstrations. 1.2 million people came out onto the streets of Mexico City over the issue of Lopez Obrador.

Although he is no Chavez but a reformist, that’s not how the masses see him. And it is not how Washington sees him. Bush is now terrified of a “Chavez” on his own doorstep. And he is right to be terrified – not of Lopez Obrador, but of the masses who stand behind him. Trotsky pointed out that under certain circumstances, reformist leaders can be pushed to go further than they intend. That is what Washington fears.

Economic growth is beginning to slow down. Although in 2005 it was 4.4 % this has signified nothing for the workers: on the contrary, there has been cut after cut. All that sustains the economy is oil, money sent home from Mexican workers abroad, and tourism. The Fox government is in crisis due to the workers’ movement. Never has there been a Mexican government with so many cabinet changes. Every counter-reform imposed by Fox has been stopped by the masses. The PAN itself is a very divided party, despised by the workers. The PRI is also in a major crisis. According to the polls, the PRD has 36%, the PAN 24% and the PRI 22%. The bourgeoisie is running out of options and is now sending trusted people into the PRD to make sure it does not drift to the left.

Under pressure from Washington, Fox attempted to prevent Lopez Obrador from standing in the Presidential elections this year. They accused him of corruption. This is an absurd accusation. Even if it were true, everyone knows that all Mexican politicians take money. The masses know this and they also know why they only picked on Lopez Obrador and that is why they poured out onto the streets to protest. However, the leaders of the PRD appeared to be more afraid of this movement than Fox. They tried to limit it. The PRD bureaucrats went so far as to say “only march on the pavement – you might interrupt the traffic!” But the Mexican workers and poor have revolution in their blood and these appeals had little effect.

Lopez Obrador addressed mass meetings all around the country. This has raised the confidence of the masses, and it will be difficult to demobilise the workers once they are organised. The PRD bureaucracy is trying to put the brakes on the rank and file organisation. It insists that the rank and file organisation is only for the duration of the election, and must be dissolved the day after the results are out.

Faced with such a mass reaction, the ruling class was in a state of panic. Fox had to beat a hasty retreat. If he hadn’t, there could have been an insurrection; such was the mood of popular indignation. Now, however, the movement will be diverted onto the parliamentary front. The masses will try to get rid of Fox by voting for the PRD. This shows the complete correctness of our orientation to the PRD. Naturally, the sects are indignant. They are trying to form a “united front” – against Lopez Obrador! This shows considerable tactical genius. At a time when the masses are uniting around the candidate of the PRD to get rid of the reactionary American puppet Fox, the sects declare war on – the PRD!

The leading role in this ultra-left pantomime is (again naturally) played by the Zapatistas (the EZLN). These hopeless petty bourgeois elements are yet again proudly parading their political bankruptcy in public. It really is an insult to the memory of that great revolutionary Emiliano Zapata that these people should usurp his name. By their actions they are only helping Fox.

The EZLN campaign has a reactionary and sectarian character. Its shrill calls for a boycott, coupled with violent ultra-left attacks on the PRD, are calculated to take votes away from the PRD, dividing and weakening the left. This is serving to undermine the Zapatistas among the workers. In the pages of La Jornada a worker answered Marcos with the following words: “I am a Zapatista, but I do not support your electoral strategy towards the PRD”. He was obviously expressing the views of many others. Hopefully this latest adventure will finally open the eyes of those elements among the students who still entertain illusions in them.

The Mexican ruling class is attempting to control the PRD with its own people. Lopez Obrador is thus surrounded by a clique of ex-PRI people. This is already provoking friction within the party. The rank and file is protesting against the right wing elements that are taking control. The presence of an organised Marxist current is a fundamental element in this equation. We have marvellous comrades in Mexico, who have just celebrated 15 years of their paper, El Militante. The paper and the tendency are well known among worker and youth activists.

After the elections, the pressure from the masses on Lopez Obrador will be redoubled. The workers and peasants will demand that the PRD delivers on its promises. There will be mass mobilisations demanding jobs, land and houses. Through this process Mexico will have entered the Latin American revolution.

Argentina

In Argentina a spontaneous insurrectionary movement of the masses overthrew the de la Rua government, but in the absence of a strong revolutionary party, the initiative passed to the bourgeoisie. Inevitably, there has been some improvement of the economy. In the past three years GDP rose by 27%. This means that the Argentine economy has now reached the same level as before the crisis began. Investors have gradually recovered their nerve.

However, these statistics do not tell the whole story. The conditions of the masses have not improved significantly. Jobs and wages are much worse than before. The levels of poverty are perhaps the highest in the recent history of Argentina, which was formerly the tenth industrial country in the world.

We predicted long ago that if the working class did not take power, a left Peronist government was inevitable. At that time the sects in Argentina were talking about a military coup! Kirchner, in the old tradition of Peronism, balances between the classes and even leans on the masses to strike blows against imperialism and the ruling class, and has even criticised the military, but without changing anything fundamental. He has skilfully made some concessions to the working class and in 2005 wages rose.

This bears some resemblance to the policies carried out by Peron in the past. But the world situation is very different now. When Peron came to power there was an almost unlimited demand for Argentine beef and wheat in post-war Europe. The Argentine capitalists could afford to make concessions. That is not the case today. Now Argentina has a huge external deficit. The IMF will tighten the screws, demanding cuts and austerity. So far Kirchner has managed to manoeuvre. But this cannot be maintained indefinitely.

The most important element in the equation is the movement of the working class. The sects made a fundamental mistake when they tried to base themselves on the piqueteros (the unemployed) instead of the industrial proletariat. The piqueteros movement was very important, but it could only have lasting significance as an auxiliary movement to that of the heavy battalions of the working class. The growth of the economy has created favourable conditions for the development of the economic struggle and a wave of strikes, which has actually occurred.

Faced with an upsurge of the industrial struggle, the bureaucracy of the CGT has been compelled to put itself at the head of the movement. But its motor force is the movement from below. The union militants have shown their instinctive understanding of what is necessary by organizing the Left Trade Union Current. This has succeeded in grouping union militants from sectors like the metro workers, the railway workers, teachers, health workers and others. These are the people we must win.

Uruguay, Brazil, Peru

In Uruguay, we had the election of the Frente Amplio (FA) on the basis of five general strikes, although Tabare Vasquez is a reformist of the Lula type. In the case of Brazil, the opposition to Lula’s policies took two years to materialize. In Uruguay it has appeared even more quickly, after only one year. The Communist Party, which was the main party in the FA has already gone into opposition and there is a ferment of criticism in the ranks of the FA itself.

In Brazil, Lula’s capitulation to imperialism and the IMF has provoked a series of crises and splits in the PT. There is widespread discontent with the right wing leaders of the PT who have been exposed as rotten and corrupt. There is a growing mood of radicalisation among the workers and peasants, expressed in a wave of occupations of land and factories. This must find its expression inside the PT in a mass left tendency at a certain stage. Under these conditions the Left could have taken over the party. Unfortunately, the sects who entered the PT at the beginning organised a premature split. Nevertheless, there are good possibilities for the Brazilian Marxists.

Peru is also heading in a revolutionary direction and we have the first nucleus of the tendency there, which is publishing a newspaper. We have good possibilities in Ecuador, Paraguay and good contacts also in Chile.

Bolivia

Bolivia has lived through a pre-revolutionary situation for the past two years. In reality, the trade unions (the COB) could have taken power on at least two occasions. But they vacillated and the opportunity was lost. Now the movement has been diverted onto the parliamentary plane.

The victory of Evo Morales – which we predicted – represents a major change in the situation. The traditional parties were wiped out. Even in Santa Cruz, the stronghold of the oligarchy, the MAS won 33% of the vote. This shows the extreme weakness of reaction at the present time. In 30 years there has never been an election where the President of Bolivia was elected in the first round. 54% voted for Evo Morales in a massive 84% turnout (about 1.5 million votes). This despite the fact that 1.5 million people, most of whom would have voted for Morales, had been taken off the electoral roles. He got 67% in La Paz, against 18% for the candidate of the ruling class.

Unfortunately, many in the vanguard boycotted the elections. They took an ultra-left position. They failed to understand the process. The masses want to change society. They are filled with a burning indignation against imperialism and the rotten Bolivian ruling class. The workers could and should have taken power. But the leaders vacillated, lost time, lost the initiative. Then the masses said: “OK, the COB didn’t want to take power, so we’ll go to the elections and see what happens with Evo.”

In the revolutionary storm centre of El Alto, between 70 and 80 percent voted for Morales. Yet this was a place where the MAS had no organised basis. The people that participated in the recent insurrection voted overwhelmingly for Evo Morales. This shows how out of touch the leaders of the trade unions and the vanguard were when they advocated abstention.

The attitude of the masses was quite understandable. The masses suffer from terrible problems that do not admit delay. They were not prepared to stand around and wait for the revolutionary vanguard to put its house in order. They saw a chance to hit out at the ruling class and its parties in the elections and they took it. They voted massively for Evo Morales. To be honest, we ourselves were too conservative. We thought he’d win, but underestimated his degree of support. A vote for Morales was a vote to change society. Now the masses will wait to “see what happens”. But they will not wait for long.

What will Moraels do? If we look at his programme and his past actions, we might conclude that he will follow the line of Lula or Gutierrez. But there is an important difference here. Morales was elected after two general strikes and insurrections. These elections are only part of the massive revolutionary mobilisations that have shaken Bolivia in recent years. The masses will demand that the programme of nationalisation be implemented. There is a strong feeling that the leaders must be accountable to the rank and file, and that they must be subordinate to mass assemblies.

Many parliamentarians of the MAS are former activists of the revolutionary movement, like the head of FEJUVE of El Alto, elected with 70% of the vote. Once he was elected, Morales went to Cochabamba to report back to a meeting, to ask for direction for his government. There can be no doubt that the pressure of the masses will be expressed through parliament and in the government itself.

The masses want Evo Morales to take serious measures in their interests – to “nationalise everything”. That is what they are expecting. His radical speeches have created great expectations. Also he is an Amayra Indian, and therefore is seen as “one of us”. Now that he is in power – and with a massive mandate – they will expect him to deliver. They will wait a while and then they will say: “We put you in power – now we want results.”

On the other side, he will be under merciless pressure from the oligarchy and imperialism. Washington is seriously concerned about the effects of Morales’ victory. Their concern will have been heightened after he went to Cuba and Venezuela to form a bloc.

The USA is watching the situation like a hungry vulture. They are massing troops in Paraguay – an implied threat. But they can’t invade. An invasion of revolutionary Bolivia would make Iraq look like an English vicar’s tea party. The working class of Bolivia is undefeated. It has strong organisations and excellent traditions, including Trotskyist traditions. They would fight like tigers. By contrast, the oligarchy is weak. At the height of the revolutionary movement, it threatened to divide the country, hiving off the wealthier eastern parts. This was a direct confession of bankruptcy. They could not even declare a civil war.

The international context is also favourable. Because of the existence of Venezuela and Cuba, there is certain room for a policy that is partially independent of imperialism, at least in the short term. Following the example of Chavez, Evo Morales has called for a Constituent Assembly. He will launch a literacy campaign. These reforms will be welcomed by the masses, who will initially give the government the benefit of the doubt. Morales has made a number of gestures, amounting to a nod to the left wing. He has cut his salary by half. He wears a simple sweater instead of a smart suit. At his inauguration he was escorted by miners instead of by soldiers, and so on.

Morales is therefore presenting himself as a man of the people. The masses are expecting decisive action against imperialism and the oligarchy. But there is nothing decisive about any of this. The main conflicts are yet to come. Morales says he will not confiscate private property, but this has not tranquillised Washington. They still don’t trust him, because of the masses who stand behind him.

However, the options of the imperialists in Bolivia are very limited. They want to pressure him to stay within certain safe limits. But this is not the only pressure he will be under. Morales would like to conciliate. He constantly speaks with two tongues. He says he is for nationalisation but not expropriation. He wants to reassert Bolivia’s rights to energy resources, but will not expropriate foreign property; and talks about re-negotiating contracts and taxes with the foreign transnational companies. In other words, he wants to be all things to all men. How long can all this last? A few months, a year, not too short, but not indefinitely either.

The elections have given the bourgeoisie a breathing space. However, the elections have solved nothing. Evo Morales will be ground between two millstones: imperialism and the oligarchy on the one side, and the masses on the other. The latter will demand nationalisation of the property of the oligarchy. If he does not deliver, there will be crises and splits in the MAS. Manya rae saying, “If Evo lets us down, we’ll throw him out too.”

The Bolivian revolution has begun and can last for some time – months if not years – with ebbs and flows. The problem is that the masses have failed to take power, but the ruling class and imperialism are not in a position – yet – to stage a coup. They are therefore compelled to play a waiting game, to manoeuvre, retreat, intrigue and play for time. That is the reason for the extremely cautious language used by Washington when speaking of Evo Morales. They still hope to buy him off, to neutralise him, to compel him to accept their conditions, and to compromise him in the eyes of the workers and peasants before overthrowing him. The fact that the USA pays ten percent of Bolivia’s budget in “aid” gives Bush a lever he can use to secure this end.

It is quite possible that Evo Morales will bend under pressure The outcome is as yet undecided, as in Venezuela. But in any case it is important not to confuse our own understanding with that of the masses. Morales’ victory will have had the effect of encouraging the workers and peasants, both in Bolivia and the rest of Latin America. In that sense it is yet another link in the chain of the Latin American revolution. The masses will have to go through the school of Evo Morales in order to draw the necessary conclusions and go further. The duty of the Bolivian Marxists is to advance shoulder to shoulder to the masses and to help them understand what is necessary. This process will take some time, but it is the only possible way.

Cuba

In Cuba as well important changes are taking place. After the fall of the Soviet Union, the Cuban revolution was isolated in an internationally hostile environment. It was under the merciless pressure of US imperialism. The cruel economic blockade subjected the masses to intolerable hardship. The fate of the Revolution was in the balance.

In the 1930s Trotsky predicted that the Stalinist bureaucracy would lead the USSR in the direction of capitalist restoration. The bureaucracy would not be satisfied with its privileged position but would demand that the nationalised planned economy be dismantled in order to convert themselves into private proprietors. The right of inheritance – the legal right to pass their wealth and privileges on to their children – played a key role in this. Now, after a long delay, this is what has actually happened.

However, Trotsky thought that capitalist restoration in the USSR could only be accomplished through civil war. He predicted that the bureaucracy would split along class lines, with the emergence of a left faction (the “Reiss faction”) on the one hand, and a right wing pro-capitalist wing (the “Butenko faction”). But events took a different turn. Stalinism in the USSR lasted much longer than Trotsky had imagined possible. The old revolutionary traditions were completely destroyed. The degeneration of the bureaucracy reached unheard-of proportions. Corruption and bureaucracy devoured a colossal part of the wealth produced by the Soviet working class and undermined the successes of the planned economy. As a result, the whole thing collapsed under its own weight. A single push was sufficient to bring down the bureaucratic regimes in Eastern Europe, and the same process in Russia took only a few years longer.

The collapse of the Soviet Union naturally produced a ferment in Cuba, even at the top levels. It is quite clear that, as in Russia, there are elements who would like to return to capitalism. But on the one hand, Fidel Castro remains implacably opposed to capitalist restoration. On the other hand, the masses remain firmly attached to the ideals of the Revolution, socialism and the nationalised planned economy. So far, the attempts of US imperialism to push Cuba back to capitalism have failed. Castro remains popular and the pro-capitalist elements have been kept firmly in check.

The Venezuelan Revolution has undoubtedly given the Cuban Revolution a new boost. Not only has it provided much-needed oil, but it has also given new hope to the people of Cuba that their long isolation will be broken. The fate of the Cuban and Venezuelan Revolutions are indissolubly linked. They will stand or fall together.

Recently, Fidel Castro made a speech in which he warned that the Cuban Revolution is not yet irreversible. Moreover, he stated that the main threat of capitalist restoration is due to internal, not external factors. This is the first time this has been stated so clearly. Castro pointed to examples of bureaucratic corruption, swindling and theft, specifically naming the case of petrol. He called for the setting up of youth brigades to check up on petrol stations.

Capitalist restoration in Cuba would be a disaster, not only for the people of Cuba but for all of Latin America. For the people of Cuba the imposition of a savage, neo-liberal capitalism and market economics would be an appalling reversal. It would signify an economic, social and cultural regression. In a broader sense it would have a depressing effect on the morale of workers and youth everywhere. It would strengthen the hand of imperialism and provide the basis for a new ideological onslaught against socialism on a world scale. It would mean an immediate intensification of imperialist pressure on Venezuela and Bolivia.

The hypocritical western critics of Cuba and the bourgeois opposition in Cuba insistently demand the introduction of “democracy”, by which they mean a bourgeois democracy. They want to introduce a system like that of the USA, where the office of President is sold to the highest bidder (in this case a mentally deficient Texas oil billionaire), where Congress is run by venal politicians who represent the interests of the big corporations that buy and sell congressmen like cheap merchandise and where the newspapers and television companies are owned and controlled by a handful of billionaires. Naturally, the demand for the introduction of such a “democracy” is inseparably linked to the demand for the abolition of the nationalised planned economy.

Fidel Castro and his supporters are attempting to resist capitalism. That is immensely important. But the methods they want to use will not solve the problem. Only a regime of Leninist workers’ democracy can do this. The attacks on the new rich, the corrupt elements, bureaucracy, etc., can only be successful if they are linked to the programme of workers’ democracy, that is, the programme that Lenin advanced in 1917 and was the basis of the 1919 programme of the Russian Communist Party that was abolished by Stalin after Lenin’s death.

What is needed is not the hypocritical caricature of bourgeois democracy, but the encouragement of criticism and debate, open to all tendencies that accept the nationalised planned economy and are prepared to defend the Cuban Revolution and fight capitalist restoration. In this debate the Trotskyists must participate as a legitimate current in the Communist family. They will offer a united front to those Cuban Communists who are fighting capitalist restoration. They will prove in action that they are the best and most loyal defenders of the Cuban Revolution.

The Latin American Revolution

Above all, what is needed is to extend the socialist revolution to the rest of Latin America, breaking the isolation of the Cuban Revolution once and for all. That, after all, was the idea of Che Guevara – an idea for which he gave his life. The conditions are now immeasurably more favourable for the victory of the socialist revolution in one country of Latin America after another. It is not a question of “exporting revolution” (as if revolutions could be exported, like sacks of coffee). The objective conditions for socialist revolution are fast maturing – or have already matured – in a number of countries of Latin America. Only an audacious and courageous leadership is necessary.

The revolutionary ferment finds its initial expression on the electoral plane. After the victory of Chavez and Morales, more left-wing candidates are likely to come to power. This turn to the left on the electoral plane reflects the general situation of the continent. It is a sign of the reawakening of the masses. In Mexico Lopez Obrador is likely to be elected and will find himself immediately under the pressure of the masses. In Peru, the government of Toledo is hanging by a thread.

US imperialism is not sure what to do next. Faced with this wave of opposition, Washington is reacting to events, not dictating them. The policies of US imperialism are being defeated, one after the other. In the past, this would have meant military intervention, but direct military intervention is ruled out in the short term. Instead, they would like to get other countries in the region to act on their behalf and have attempted to use the OAS Democracy Charter to interfere in Venezuela. But this has led nowhere. Leaders like Lula, who Washington sees, to some degree, as allies, do not dare to do its dirty work in Venezuela for fear of the repercussions at home.

Washington has been reduced to manoeuvring, intriguing, attempting to get some kind of a base through corruption and bribery, mixed with pressure and threats. The only places where they have dared to intervene openly are weak countries in the Caribbean: Grenada and Haiti. Even there the results have not been encouraging.

A new revolutionary wave

We are fortunate to live at this time in history. In the 1970s, there was a major wave of class struggle. Beginning with 1968 in France it swept Europe, affecting one country after another: Portugal, Spain, Greece, Italy, Britain. The advanced workers felt that power was within their grasp. They were not mistaken. In Portugal, they had the power. The London Times published an editorial article with the title: Capitalism is dead in Portugal. The workers had the power but they lost it because of the conduct of the leadership of the Socialist Party and Communist Party. The same story was later repeated in Spain and Italy, where power was within the grasp of the working class and it slipped through their fingers.

At that time the ruling class was preparing for civil war, not just in Italy but also in Belgium and even in Britain. There were military conspiracies, like the Gladio conspiracy. This is a warning for the next period. Many workers in the advanced capitalist countries think that democracy is something fixed for all time. But when circumstances demand it, the ruling class can change from democracy to dictatorship with the ease of a man changing compartments on a train. The bourgeoisie can tolerate democracy as long as its rule is not threatened, but not otherwise.

In the coming period, there will be an enormous polarisation of society to the left and to the right. Together with the growth of the revolutionary tendency and the class struggle we will also see the growth of fascist and Bonapartist tendencies. The attacks on democratic rights that are being launched in the name of the so-called “war on terror” is merely an anticipation of this fact. But that does not mean that reaction is an immediate perspective. Long before the ruling class moves to open reaction, the working class will have had the chance to change society many times.

Under these conditions, consciousness can change like lightning. It is a general law that consciousness lags behind events. Human consciousness, contrary to the belief of the idealists, is profoundly conservative and resists change and new ideas. But then at a certain point, it catches up with a bang. That is precisely what a revolution is. The consciousness of the working class has lagged behind events for the last 20 years, especially in Europe and the USA. There is an objective reason for this.

When the workers have the chance to take power and don't take power, it has a profoundly demoralising effect on the class, and especially on its advanced layer. It takes a long time to recover. Part of the problem is that the vanguard of the working class, the people who led the struggle in the decade of the 1970s, the old leadership, has been burnt out and largely destroyed. Even worse, this layer has become an obstacle. They are affected by a mood of depression, pessimism and demoralisation. They have lost hope in the working class and have no perspective.

These reactionary moods were subsequently reinforced by the economic boom in capitalism in the 1980s and 1990s. The workers’ organisations themselves (the unions and the socialist and communist parties) fell even more under the pressure of the bourgeoisie and bourgeois ideology in this period. They become obstacles in the way of changing society. This period set the final seal on the reformist degeneration of the Communist Parties and Social Democrats. Freed from the pressure of the working class, they swung to the right.

For us, these mass parties are not part of the subjective factor but rather part of the objective factor – and a not unimportant part. There was no point of reference for the youth and the most advanced workers. This is a big part of the explanation for the “lag in consciousness”. It has become fashionable in the circles of left intellectual snobs to blame everything on the “low level of consciousness of the workers”. Incredibly, there are even people in Venezuela today who talk like this. But it is entirely wrong to blame the masses for the failures of the leadership.

For the whole of the last period, not one of the leaders was proposing any programme or perspective of socialism, let alone talking of taking power. The unions were doing nothing, while the bosses were destroying hard-won rights and conditions. The left parties were doing nothing, offering no alternative to bourgeois reactionaries like Thatcher. On the contrary, they were imitating the policies of Thatcher, embracing “new realism” (i.e. market economics) and expelling the Left.

Workers are realists. Under these conditions, when they got no lead from their organisations, they began to look for individual solutions to their problems. The boom in the economy permitted them to increase their living standards, albeit on the basis of an enormous increase in absolute and relative surplus value: longer hours of work, speed-ups, greater intensity of labour, increased productivity, etc.

For a temporary period, they were prepared to accept the tyranny of the bosses, to accept impositions of the bosses. Seeing no alternative, they put their heads down and proceeded to kill themselves working, with reduced holidays, work at weekends, and long hours of overtime. The longer working hours and the consequent exhaustion after a hard day’s labour ruled out participation in the unions or workers’ parties. This in turn reinforced the stranglehold of the right wing, which in turn further alienated the workers.

But this search for individual solutions could not last. It has led to the most negative consequences: nervous breakdowns, physical and mental illness, a huge increase in work accidents, etc. The massive increase in absolute and relative surplus value has reached its limits. The capitalists can't squeeze forever. Sooner or later a point is reached when the workers say: enough is enough! Now we see the beginnings of a reaction on the part of the working class, reflected in a wave of strikes internationally.

If you read the letters of Trotsky you frequently come across phrases like: “I am patiently waiting for a change in the situation.” It has now been about 30 years since the last great revolutionary wave. It has been difficult but now the tide is beginning to turn. All this is happening even before there is a deep slump. At the moment there is a feeble boom with slow rates of growth accompanied by decreasing living standards during the boom.

For years and decades, contradiction upon contradiction has been piling up. In the USA, the so-called American Dream – work hard, get rich – has been exposed as nonsense. American capitalism is horror without end. The real face of capitalism was shown by Hurricane Katrina. The existence of an underclass of poverty-stricken people in the richest country in the world was carefully concealed from the world. It took an accident like Katrina to expose the rotten heart of US capitalism. The rest of the world was shocked, but in reality we have a similar situation developing everywhere, as we saw in the French youth riots.

A revolutionary perspective

Lenin once wrote an article entitled Inflammable Material in World Politics. There is now plenty of inflammable material around the world. There is not a sector of the world that isn’t affected. There are constant shocks and instability: war, terrorism, violence, crises. What does this reflect? It expresses a fundamental impasse of a socio-economic system that is reaching its historical limits.

Capitalism has reached an impasse. Everywhere we see the symptoms of a terrible decline. Many people see the negative symptoms: the appalling violence and loss of life, the waste and corruption, the injustice and inequality, the cultural bankruptcy and spiritual emptiness. They see all this and despair. But Marxists have a broad view of history. We approach history not sentimentally or moralistically, but scientifically and dialectically.

We understand the other side. We see that all the horrors that afflict the world are merely the symptoms of a system that has lost its reason for existence and is in conflict with the demands of the human race. Moreover, these manifestations are producing their opposite. Resistance against the system grows stronger by the day. Everywhere there is a new awakening, a movement in the direction of the change of society.

A boom that destroys employment and is not accompanied by increased living standards but rather with cuts and merciless pressure on the workers has led to a revival of the class struggle everywhere. This is the stage we are passing through: a general reawakening of the working class and an increase in class struggle. From the point of view of the class struggle a deep slump accompanied by high unemployment may cause a reduction in strike levels, but there could be a wave of factory occupations, and people will draw political conclusions – revolutionary conclusions.

There are the beginnings of a change in the international situation. For a long time we've been fighting against the stream. This was not easy. The opposing current was very strong. Not everyone was able to resist it. At last we are beginning to swim with the current. And this is only the beginning. Titanic events are being prepared in every single country. We need to be prepared. Our task is not to tell the workers what to think, but to make conscious the unconscious or semi-conscious desire of the working class to change society. But the ideas of our tendency – the ideas of Marx, Engels, Lenin and Trotsky, ideas that were added to and developed by comrade Ted Grant – have been entirely vindicated by history.

We have entered a most convulsive period in world history. The perspective facing us is a period of wars, revolutions and counterrevolutions on a world scale. Of course, it is impossible to be precise about timing, except to say that it will be relatively prolonged. The reason for the protracted nature of the period is, on the one hand, the profound crisis of the system and the weakness of the forces of reaction, on the other hand, the absence of the subjective factor: the crisis of leadership of the proletariat. This means that the situation can drag on for years, with ebbs and flows.

In every country the rhythm of the class struggle is increasing. It will not unfold in a straight line. Periods of advance will be followed by periods of tiredness, apathy, defeats, and even reaction. Every defeat will be only the prelude to new struggles, until there is a final decision one way or another. Time and again the working class will move to change society. This will lead to the emergence of revolutionary or pre-revolutionary situations in one country after another. Inevitably the question of power will be posed. In Latin America we do not need to speak in the future tense. This is a fact already, as we see clearly in Bolivia and Venezuela.

The positive side of the situation is that we will have some time to build the forces of the International. We are entering into contact with the best elements among the revolutionary forces throughout Latin America. This is a tremendously exciting period in history – a period in which it is our privilege to live and fight. But it is an even greater privilege to be members of a Marxist international tendency that is theoretically armed and organisationally prepared to understand the tasks and intervene in the movement of the masses.

Marxist theory is an extraordinarily powerful tool. It alone enables us to create the cadres who can connect with the advanced guard of the workers and youth, who in turn will link us indissolubly to the masses. In this way we are building the forces necessary to carry through the world revolution.

It is the nature of such a period that events unfold with breathtaking speed. In the 18 months or so since our last world congress, we have witnessed a whole series of important events. But as Marxists we have to learn to look at these events, not separately, but as parts of an indissoluble whole: the developing world socialist revolution.

Many workers understand things instinctively, based on their own experience and class-consciousness. Though they have not read a single line of Marx, they have a better grasp of the situation than the ultra-left sects. The workers internationally instinctively sympathise with the Bolivarian Revolution. They see Morales’ victory as a shift to the left, and a blow against imperialism. That is quite correct. The fact that neither in Bolivia nor in Venezuela has the revolution been carried out to the end, the fact that in both cases there are deficiencies, mistakes, confusion and lack of a clear programme and strategy does not change this in the slightest.

It is the duty of the Marxists to provide this clarity, to explain to the workers what is necessary, to correct the mistakes and defend the correct programme and strategy. But this cannot be done by sectarian pontificating from the sidelines. A correct programme is absolutely necessary, but this by no means exhausts the problem. It is necessary to find a road to the masses, to establish links with them, to create the conditions for a fruitful dialogue between the Marxists and the workers, beginning with the most active and conscious elements (the proletarian vanguard). Our method is that of Lenin: “patiently explain”. And it should not be necessary to point out that in order to reach the masses, it is necessary to go wherever the masses are.

We must have the will to succeed in the battle we have before us: the main task is to build the International Marxist Tendency. We must create a dynamic of growth – and this starts from the top. A bold attitude is needed. In a revolutionary tendency there is no room for scepticism. The leadership must set the correct tone; educate the ranks in a revolutionary spirit.

Trotsky once pointed out that there are moments in history when big tasks can loom before even the smallest revolutionary organisation. It is true that the consciousness of the masses always lags behind events, but when it catches up, it leads to revolutionary explosions. In the current period, small events can have an impact far beyond the immediate effects. You can be faced with enormous decisions before you expect it. And it is not the same to confront the new situation with a small group or with a large one. Every comrade must be conscious of the fact that our future success depends on our ability to build and grow now.

Sometimes we see only problems. But if there are problems, there are also solutions. Even in the most unfavourable situation there are always opportunities. The art of leadership is to identify every opportunity, great or small, and exploit it to the full. We must seize every opportunity. The Bible says: “Seek and ye shall find – knock and it shall be opened unto you”. It is not just a question of luck. You must make your own luck under any conditions. We know what we need to do: go to it!