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Capital’s global crisis

1st October 1998 Socialist Action 0

First published: October 1998

The post-1989 triumphalism of the international imperialist system suffered two shuddering blows at the end of August. First, on the economic plane, it became clear that all of the efforts to contain the 1929-scale slump which has afflicted east Asia since last summer have failed – its fall-out is progressively extending its effects to the entire world economy. Second, the chain of the international capitalist economy broke at its weakest link – Russia – and this posed the most serious political challenge to imperialism since 1989, namely, the realistic possibility that the capitalist course imposed on that country since the end of 1991 might be over-turned. The shudder of doubt which passed through the world of capital manifested itself in stock market prices, innumerable articles on the ‘backlash against the free market’, through to the farcical powerlessness of the Clinton/Yeltsin summit.

The driving force of this crisis was the realisation that the east Asian economic crisis had not been confined to that region. But its political punch was delivered by the palpable risk that capitalism could yet be overturned in a country, Russia, whose nuclear weapons rule out the direct Western military intervention which would otherwise be used in such circumstances. The latter political reality was reinforced by the inevitability of rising social and political opposition to imperialism’s prescriptions for east Asia.

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Capitalism hits a brick wall in Russia

1st October 1998 Socialist Action 0

First published: October 1998

In one of the most spectacular financial explosions in history, on 17 August, in the space of one day, Russia’s entire financial system collapsed. Stock markets around the world were sent reeling, not because of Russia’s weight in the world economy, nor the big losses incurred by Western banks speculating on the Russian bond market, but because Russian capitalism had run into a dead-end from which there appeared to be no way out. What really rattled the markets was the possibility that, faced with destitution this winter, the Russian people might call a halt to the re-introduction of capitalism, which having already resulted in the greatest peacetime industrial collapse in history, now promises worse. As one commentator said, it began to dawn on the markets that capitalism’s victory over socialism might turn out to be only a short episode at the end of the 20th century. Even the financial press, and people like George Soros, echoed this sentiment.

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Hegel and Marx

1st October 1998 Socialist Action 0

First published: October 1998

The philosophical works of Hegel were central to the development of Marx’s thought. A consideration of this philosophical background illuminates why Marx was concerned with some particular problems and why Hegel had such an influence on his thought.

The immediate political background to the development of Hegel’s thought was the French revolution – the founding work of Hegel’s philosophy, the Phenomenology of Mind, was written in Jena, site of the battle between Napoleon and the feudal German monarchies. This context led Hegel to be particularly concerned with the question of change!

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Eastern and Western Europe today

1st May 1998 Socialist Action 0

First published: May 1989

Europe is today undergoing its greatest changes since World War II. This is obvious in Eastern Europe which has seen the greatest political shifts since 1945. In Western Europe structural shifts on a less dramatic scale, but still the greatest since World War II, have marked the two last decades. How are these developments linked, and what are their driving forces?

The first issue to be clarified in examining European trends, and the development of European politics, is the relation between the uniqueness of each state and the overall situation. There are no two countries in Europe in which the organisation of capital, the structure of the state, or the relations in the labour movement are duplicated or in which political tactics can be the same. Nevertheless this does not prevent there being a clear general European development. If we are to understand the individual process in each country in Europe we must first examine the international reality in which it develops. The aim of this article is to consider these broad trends of European development in their full scope. Within that framework the specific situation in each country can then be situated.

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Behind the world financial crisis

1st March 1998 Socialist Action 0

First published: February/March 1998

The financial crises which began in east Asia and Japan in the latter half of 1997 hit what had been the most dynamic part of the world economy – cross-Pacific trade overtook trans-Atlantic trade a decade ago. Together with the gyrations they produced on world financial markets, these events showed that the world capitalist economy is nowhere near the new ‘golden age’ of prolonged economic growth predicted by some bourgeois economists in the United States. On the contrary, the chain of economic events which started in October 1997, with the greatest stock market crash since 1929, is continuing to work its way through the international capitalist economy. The crash of 1987 was followed by the 1990 collapse of the Japanese stock market, the crash of world bond markets in 1994, the Mexican crash in the same year, prolonged stagnation in the early 1990s in Japan and most of the European Union and, now, the crises of the Asian ‘tigers’, recession in Japan and consequent turbulence on world stock markets, with severe knock-on effects in Latin America, eastern Europe and Russia.

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Fixing up the world – GATT and the World Trade Organisation

1st March 1998 Socialist Action 0

First published: March 1998

By Alan Freeman

Think of the world economy, and two household words come to mind: the International Monetary Fund and the World Bank, the two supranational bodies created by the Bretton Woods Treaty of 1947 when the allied powers constructed the post-war economic world order. It is less well-known that these two have been joined by another. The World Trade Organisation (WTO), formed in 1994 as a result of the 1986 ‘Uruguay Round’ of negotiations under the General Agreement on Tariffs and Trade (GATT), has emerged as the third pillar of the post-war economic order. Although generally presented as a simple continuation of GATT, it has in fact inaugurated a fundamental change in the organisation of world trade.

The GATT has been transformed from an ineffectual chamber of commerce into a powerful device for restructuring the world market in the commercial and financial interests of the leading powers, the core requirement being to maintain the supremacy of the US economy in the face of the largest trade deficit in world history.