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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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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.

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Which class will organise an international economy?

1st January 1995 Socialist Action 0

First published: January 1995

The most important strategic debate in the international labour movement since Marx and Engels was that which took place between Stalin, Bukharin and Trotsky in the Soviet Union in the 1920s. The fundamental issue at the core of that debate was Stalin and Bukharin’s strategy of ‘socialism in one country’. Although Stalin resolved the debate by liquidating his opponents, he could not liquidate the real contradictions which gave rise to the conflict. Those remain the fundamental driving forces of the crisis which has unfolded in Russia since Yeltsin came to power in August 1991. As the Russian working class faces a struggle with capital today as desperate as 1917 and 1941, the starting point for a theoretical understanding of that struggle remains the issue of socialism in one country.

The issue of ‘socialism in one country’ is the most fundamental question of socialist strategy in the twentieth century. Trotsky regarded this issue – not, for example, democracy or the popular front – as the fundamental point of divide between Stalin and Bukharin; between what he called ‘national reformism’ and Marxism.

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How the United States, Japan and Germany are crushing the EEC

1st May 1993 Socialist Action 0

First published: Spring 1993

The electoral collapse of the French and Italian Socialist Parties signals the demise of Euro-socialism, the dominant current in the West European labour movement for the last decade. This is simply the latest symptom of the crisis of the European Community. The EEC is being ground between the external competitive pressure of the United States and Japan, and the internal dominance of the unified Germany. Rather than offering reforms, Maastricht proposes to dismantle the welfare state in Western Europe. The rise of the extreme right and the collapse of Euro-socialism are logical results.

In Europe imperialism is suffering its first substantial reverses since Gorbachev came to power in the Soviet Union. At the beginning of 1992 imperialism recorded an historic triumph with the installation of a capitalist government under Yeltsin in Russia. But a year later Yeltsin had lost his majority in the Congress of People’s Deputies. George Bush failed to secure re-election in the United States, Japan faced financial crisis and the European Monetary System came apart at the seams. Thus the re-charged imperialist system, which delivered Washington’s triumphs at the end of the 1980s, has started to exhaust itself.