economics

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.

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.

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.

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.