The collapse of the planned economies was undoubtedly a defeat for the world proletariat. Without in any way diminishing its effects, particularly its ideological effects, on the workers' movement internationally, we recognized that this development does not signify a great historic setback on the scale, for instance, of the triumph of fascism in Germany, Italy and Spain in the inter-war period.

The strength of the proletariat and its organizations remains largely intact. The bourgeois have undoubtedly scored an ideological victory. But with the onset of a world capitalist economic slowdown and recession this victory has been short-lived. Ironically the collapse of Stalinism, rather than strengthening world capitalism economically, has had the opposite result. The collapse and chaos of East Germany has, as we predicted, built instability into the very foundations of German capitalism. The need to underwrite the East has resulted in the huge German budget deficit, which has in turn been a key factor in the currency chaos and the virtual collapse of the ERM.

Eastern Europe and the former Soviet Union are experiencing, in different degrees, unprecedented social repression, leading in certain countries to mass pauperization. The former Yugoslavia broke up along national religious lines. The conditions exist for the outbreak of similar conflicts in other countries. The present localized wars and the tensions between the republics in the former USSR can in certain circumstances lead to wider conflicts.

Faced with this instability, capitalist spokesmen stand by writing their hands, occasionally making futile gestures but utterly impotent to prevent the disintegration of societies that were promised such a dazzling future on the basis of returning to capitalism. The bourgeois strategists, particularly those of US imperialism, envisaged a "uni-polar" post-Stalinist world with the untrammeled rule of capitalism led by one great power (its own), able to impose "order" throughout the globe. Instead the most disturbed period in world relations, comparable only to that which followed the Versailles treaty after the First World War, has been ushered in. As one bourgeois commentator put it "The world could drift to a cold peace like the troubled years following the First World War".

Stalinism was the common enemy and the glue that bound world imperialism together. It acted as a check on inter-imperialist rivalries. There is no one power, like US imperialism in the immediate post-war situation, capable of imposing its will on world capitalism.

In 1945, US imperialism accounted for more than half of world industrial output. While it is still the dominant economic power it now accounts for a quarter of world output. It is now economically challenged by Japan and Europe. (Russia, which for the moment is economically prostrate and enfeebled, nevertheless still remains a colossal military machine). On the horizon in the not too distant future is the emerging power of what will probable become capitalist China. The Independent newspaper in Britain recently pointed out that in absolute terms, but not of course in productivity, China now has more industry than either Japan or Germany and is second only to the USA.

The limits of this power were further underlined by the Bosnian events. Clinton probably imagined, before coming to power, that he would be allowed to reassert the untrammeled weight of US imperialism on the world arena. The intervention in Somalia appeared, in this respect, to be a favorable portent for action, above all in the colonial and semi-colonial world.

It is an irony that it was precisely the military wing of the US bourgeoisie which has more easily grasped the realities confronting Bosnia than Clinton and his entourage. Armed Forces Chief of Staff Colin Powell opposed the use of US military might. It would, he argued, take at least 200,000 ground troops to back up a policy of air strikes against Serbia. To have confronted head-on the Serbs in Bosnia, Powell conservatively estimated, would take the deployment of half a million troops.

The fear of being drawn into a "quagmire", the open split on the issue between the European and US bourgeoisie, resulted in months of prevarication, the shipwrecking of the Vance-Owen plan, and the shattering of any idea of a "new world order".

Moreover, the divisions between the European powers themselves, the fact that the European and US bourgeoisie shouted at one another across the Atlantic, are all an indication of future relations between the powers. Rather than an era of "co-operation and harmony", of tranquility and peace, we will see an unprecedented jostling between the different imperialist powers.

The contest between the three blocs takes the form, at this stage, of gripes, complaints against one another, and occasionally into open trade restrictions, as with the recent "anti-dumping" measures introduced into the USA against foreign steel imports.

Japan has on the one side sought to consolidate its position in the Pacific Rim, an area in which they are conducting a bitter battle for supremacy with US imperialism. Trade between Japan and the six nation-states of South East Asia has expanded at a phenomenal rate of 20 percent each year. Japan's trade in the Asian markets now accounts for 40 percent of its total trade, while North America accounts for 30 percent.

Five years ago, both regions accounted for 35 percent of Japan's foreign trade. The fear of being shut out of the American market, indicated by the formation of NAFTA, has prompted Japan and its Asian satellites to group together in the "yen bloc". Japan's trading surplus continues to spiral upwards and could reach $120 billion this year. This results, not primarily from a dramatically increased export performance: because of the rise in the value of the yen against the dollar (and also because of the drop in oil prices), export prices have gone up and the volume of imports has dropped because of the recession as well as their cost.

Japanese capitalism also seeks to use Britain as a backdoor into Europe. 41 percent of its total investment in Europe is concentrated in Britain. The building of Japanese car factories, with their increased output and higher technology, has resulted in the situation where Britain now has become a net exporter of cars. Japanese cars are produced in Britain largely for the European market. The new Japanese Prime Minister, Miyazawa, has proclaimed "Asia will be the brightest spot over the next century". He perceives this glowing future for the region under the tutelage of Japanese imperialism. The Japanese bourgeoisie deny any military ambitions - according to Miyazawa, "Never again will Japan become a military power".

However, the recent controversy over the strengthening of the Japanese defense forces, as part of a general strengthening of "international order", indicates a future potentially powerful military role for a rearmed Japanese imperialism. The scale of the tension between America and Japan, in the past would have resulted in increased clashes, laying the basis for a war at a certain stage. Japan is seeking to supplant the US in relations with Chine. At the same time it has recognized Hanoi which is a precondition for investments in Vietnam, an area of cheap technically-skilled labor.

The conflict assumes the form at this stage of an intensified economic war. The "victims" of this war, particularly if a slump should be the result, will be continued in the millions of unemployed, the poor and starving, who will mushroom throughout the planet.

"MAD" - Mutually Assured Destruction - was the main doctrine which governed the military relationship between imperialism and Stalinism. The same concept, that the nuclear powers can wipe themselves out in the event of war, also limits and controls the antagonism which now exists between the three capitalist blocs. War is conducted by the capitalists not for its own sake. It is for markets, raw materials, for political and strategic purposes. The existence of nuclear weapons ensures that in the event of a war mutual destruction would follow. It would also mean the destruction of the productive forces and above all the most important productive force, the working class.

Only if the working class suffers a decisive defeat, and military dictatorships in the main capitalist countries ensue, could the conditions be created for a nuclear war. Long before this the working class will have many opportunities to take power. A "limited nuclear war" is a contradiction in terms and moreover would result in mass opposition, uprisings and revolutions.

In the "Third World", however, the position is different. War between unstable and increasingly militarized regimes is not only possible but inevitable. A military conflict for instance looms between India and Pakistan, both of whom are arming themselves to the teeth. Besides this looming clash, the two previous wars will also see a spiraling upwards of military clashes.

However, the future is one of intensified competition and conflict in the economic sphere which could result in outright sanctions being taken y one against the other. Europe will be drawn into this economic vortex, the consequence at a certain stage being a contraction of world trade, economic stagnation and slump.

The process of unification did go further than we had earlier anticipated, propelled forward by the economic engine of German capitalism and the 1980s boom.

However, the goal of a speedy establishment of economic unification (EMU), let alone the creation of a supra-European State, has been shattered by the virtual disintegration of the ERM and with it of the Maastricht Treaty. Britain has left the ERM while Spain, Italy and Ireland have been compelled to devalue. They could be joined by the French franc which could be devalued soon after the forthcoming elections. A "two-tier" Europe of "convergence" of all the states of the EC has resulted from the ERM wreckage. German capitalism with a constellation of lesser states grouped around it - France, Belgium, Holland, Austria - could push on to greater integration. The rest would be confined to the "slow lane".

The bare bones of Maastricht may still remain as a "goal" along with EMU but the underlying reality is that the national interests of each EC member state will be reasserted again and again when their fundamental interests are at stake.

This does not mean that the ED will immediately shatter into its national component parts. The intensified competition with Japan and US imperialism, and the tendency for the productive forces to integrate across national boundaries, compels the European capitalists to lean on one another while at the same time striking blows at each other like so many criminals chained to a single cart. They will oscillate between co-operation and competition. A shattering of the EC is only likely in the event of deep slump when it would be a question of each man for himself and the devil take the hindmost.

The same tendency of swinging between co-operation at one stage and bitter conflict at another will also develop between the three blocs on a world scale.

However, the major internal problems of Turkey, very quickly revealed the limits to the Turkish bourgeoisie's aspirations. Faced with major economic problems, and political instability due to the Kurdish question and the increasing weight of Islamic fundamentalism and Erbakan'a party, combined with the decreased weight of Turkey for imperialism after the collapse of the USSR, the Turkish bourgeoisie discovered that it had to lower its "expectations". Especially as Russia directly threatened war in case Turkey intervened in her spheres of influence, the Turkish bourgeoisie was forced to restrict its role to one of more limited economic and cultural intervention.

These factors do not cancel but restrict for the time being the imperialist aims off Turkey as regards the ex-Soviet republics of Central Asia.

While proclaiming itself a champion of Muslim human rights, a ruthless, repressive policy is pursued against the Kurds in Turkey. And as the Gulf War demonstrated, Turkey would not be averse to using Iraq's difficulties to grab territory formerly under the sway of the Ottoman Empire.

Compared to the euphoria of three years ago - "We have won" declared the Wall Street Journal - the world bourgeoisie now stands utterly perplexed and impotent before world political and economic developments. The meetings of the G7, the seven largest industrial countries, as the Financial Times commented recently, remains incapable of even solving "small issues", such as making "safe" the nuclear stations in Russia, let alone implementing a "Marshall Plan" for the former Stalinist states.

However, the OECD's chief economist has recently not ruled out that the current period could turn into a 1930s-style slump. An open trade war, a "hot war" could precisely plunge world capitalism from a growth slow-down/recession into a slump.

The bourgeoisie, already terrified at the social consequences of a drop in the rate of production, would in the short run seek to avert a serious economic crash, particularly by attempting to bail out the banks. At the same time, with or without GATT, a "cold war" in the form of disguised trade sanctions is increasingly resorted to by each of the capitalist powers against its main rivals. This has prompted one bourgeois economist to comment: "anti-dumping actions are Smoot-Hawley in slow motion".

Clinton's actions on the domestic and international front will be severely circumscribed by the serious economic problems he confronts.

He has already set a new world record in the number of promises dropped even before he took power. The consequences of the Reagan-Bush years are set to haunt Clinton. The national debt has ballooned to $4,000 billion, $65,000 for every family in the US. This forces the federal government to pay $900 million a day just to meet the interest payments on this massive debt. Clinton has pledged to cut the federal budget deficit, expected to be $300 billion in the next year, which necessarily means a slashing of spending on health, social services and at the same time attacks on the living standards of the American working class.

The Washington Post recently estimated that to restore the national debt to the level Reagan inherited, income tax payers would have to pay 145 percent of the present federal rates for the next 12 years.

The huge budget deficit as well as the bleak international economic climate, despite Clinton's promises, will mean that any economic recovery in the US will be feeble. At the same time, unemployment will remain high or could even increase.

This is also the picture for the capitalist world as a whole. It is estimated that 34 million will be unemployed in the countries that make up the OECD by the end of 1993. This will be 10 million more unemployed than 3 years previously.

The dream of a new period of capitalist prosperity where conflict would be muted or even eliminated is ruled out, as the World Economic Perspectives document demonstrates. Bush's New World Order and its necessary adjunct of bourgeois triumphalism was firstly put forward enthusiastically, then withdrawn, only then for a tarnished version to be served up later. In fact the world picture is one of disorder and unbearable economic, social and political tensions. In the absence of a mass Marxist force able to offer an alternative, this can result in vicious racial, ethnic and national conflict, the virtual disintegrations of whole societies and "nations".

In Britain, the Major government, within months of coming to power, was compelled to undertake one retreat after another. The near contempt in which all "politicians" are held, both in Europe and in America (as indicated by the 19 percent protest vote for Perot in the presidential elections) is the first outward expression of what will become in the future a huge revolutionary wave.

This process finds its most extreme expression in Eastern Europe and in the former Soviet Union. The promises of a capitalist El Dorado have turned to ashes. The drop in production in Russia far outstripped that which took place in America at the time of the 1929-33 crash. What we have in fact is a combination of a 1929-33, a massive drop in production, combined with the elements of Germany 1923, that is hyperinflation. The majority of the population have been pauperized.

The countries of Eastern Europe, although not yet having experienced a drop on the scale of Russia, have also experienced a significant drop in the standard of living of the population. The proletariat is in a stunned and semi-demoralized state. Nevertheless a recoil will take place once the masses perceive that their sufferings are not at all "temporary" but will become their normal state on the basis of capitalism.

The strikes of the Polish miners and the Kiev arsenal workers are an anticipation of what is likely to happen in the coming period. In the latter case the workers marched on the Ukraine parliament after a 300 percent hike in prices. The government, obviously afraid that the arms workers could be a trigger for a more general uprising of the proletariat, hastily retreated and doubled the minimum wage.

Profound disillusionment with the consequences of the market, if not completely with the concept of "the market", has set in. It is those who were first in the queue for capitalism who express the greatest disenchantment. Thus, a bare 6 percent of Hungarians - the fat-cats who creamed off and plundered state property - say that conditions have improved since the "demise of communism"; 73 percent think that the system they now have is completely "misconceived".

An even greater disenchantment exists in Poland. The model for the "fast-track" towards the market sees the government retreating in the face of mass indignation at the consequence of this. 70 percent of industry still remains in state hands in Poland. This is moreover the most dynamic sector of the economy, which has led to a certain, partial growth in the past period. The government is compelled to promise "more socialized" measures, involving "efforts" to offer greater shares for workers in privatized industry. The seeming deadlock in society - in Poland a myriad of small parties, the largest having no more than 10 percent of the seats, compete for power - the unbearable social tensions, the resulting weak government, all seemed to have put the specter of authoritarianism, of coups, or Bonapartist regimes, onto the agenda. However, as explained in the IS statement on Racism and Fascism, it is difficult in the immediate period ahead for the bourgeois forces to go over to a dictatorial regime. In fact the process is moving in the opposite direction. This was shown in both the September 1003 election results which marked a shift to the left and the growing popular opposition to the Church hierarchy.

In Poland 50 percent of Polish adults declared democracy only useful if it guaranteed wealth, while a mere 18 percent described its benefits in categories of freedom and human rights. Alongside of this is the first signs that the masses' rejection of "wild capitalism" has taken the form of looking back to some of the "certainties" of the past. A mood of rejection of the most open and brutal representatives of renascent capitalism has also emerged.

Thus, in Lithuania, which probably went further down the road to the market than any of the states of the former Soviet Union, a plummeting of production and with it the living standards of the masses, has resulted in the rejection of the bourgeois Sajudis leadership of Landsbergis in the November 1991 parliamentary elections and the coming to power of the former Communist Party, now re-christened the "Democratic Labor Party". This has been followed by the overwhelming victory of the DLPs candidate for President, Brazauskas.

A similar process has taken place in Bulgaria, while in Romania the victory of Iliescu signifies the rejection of the majority of a return to the brutal, capitalist landlord regime that dominated Romania in the inter-war period.

These developments do not indicate a return to Stalinism. The victors in Lithuania, Romania and Bulgaria promise a slower, more "humane", progress to the "market". They nevertheless anticipate a future class polarization in all the societies of Eastern Europe and the former Soviet Union. This will ineluctably lead to the creation of separate, class-based parties of the proletariat.

It will take a further period of painful experiences before first of all the advanced workers, and through them the masses, begin to reject the idea of capitalism and the gross inequalities, poverty and unemployment, which is its consequence today. In the course of such a movement a new generation will arise, not yet even involved or contemplating political involvement, who will return to the ideas of genuine Marxism, purged of its Stalinist excrescence. Our task in these societies, a heroic and painful one pursued by our small groups and cadres, is to build a bridgehead, by stubbornly defending and developing our ideas, to the new generation who will inevitably move into struggle.

The collapse of former multinational states, a little taste which we have been given in the bloody conflagration in Yugoslavia, on a capitalist basis necessarily involves a nightmare scenario for the masses. The processes are indicated by the military picture which followed the collapse of the Warsaw Pact in the area.

In 1989 six members adhered to the pact. Following the recent split in Czechoslovakia between the Czech lands and Slovakia, there are now 21 states in the former Warsaw Pact area, all with their own separate armies. Moreover, ancient ethnic and national tensions which lay dormant or were suppressed under Stalinism have been resurrected.

The "little entente", the agreement between Romania and Czechoslovakia against Hungary, has once more been floated, this time involving Romania and Slovakia. Hungary, on the other hand, leaning on the Ukraine, is arming to the teeth, with weapons it has bartered with Russia in payment for debts outstanding from the latter. Hungarian minorities exist in both Romania and Slovakia as well as Yugoslavia. They will be a bone of contention between the new capitalist states which at a certain stage could result in armed clashes.

German imperialism has sought to support first of all Slovenia, then Croatia and other nationalities opposed to the Serbs. US imperialism, on the other hand, has oscillated between sympathy for the other nationalities, condemning Milosevic and other Serbian leaders as "war criminals", whilst secretly courting the Belgrade regime.

France, on the other hand, and Britain have each tried to seek advantages for themselves at the cost of their erstwhile EC partners. The utopian aim of a common Europe, with a common foreign policy, has once more been underlined in the European powers' intervention in Yugoslavia.

Having already shown itself to be incapable, for reasons already given, of intervening in Bosnia, American imperialism, which is still worries about the danger of an extension of the war to other Balkan countries, notably Turkey, Greece and Albania, is seeking ways to preventing explosions in Kosovo and in Macedonia. But it is likely to come up against the same obstacles which made an effective intervention in Bosnia impossible.

On the fringes of the former Soviet Union war or armed conflicts already affect Georgia, Moldavia, Armenia, Azerbaijan and Tajikistan. The former Secretary of State to the Bush regime, James Baker, warned of national clashes and even armed conflict between states that would dwarf the present Yugoslav tragedy.

Enormously weakened economically, Russia still possesses a formidable military machine, whose specific weight within the population is undiminished. The power of the generals was revealed in their virtual public countermanding of Yeltsin's offer to cut down Russia's nuclear arsenal. Twenty-four percent of all industrial employees work in factories controlled by the Soviet Union's military industrial commission. When factories are included which are still outside this sector officially, but which are still militarily related, a total of 36 million people, one quarter of the entire population, live off arms production. Despite the recent reductions, Russia will have an army of 1.5 million and, notwithstanding the recent offer of Yeltsin to reduce the stockpile of weapons, has enough long range nuclear weapons, 3,000 by the last count, to destroy the whole planet many times over.

Only twelve of the 5,000 arms plants have actually stopped producing arms, despite Yeltsin's many pledges to convert from arms production to peaceful, useful production. Even the recently independent state of Belarus has twice as many tanks as Britain, more guns than France, and more combat aircraft than Germany.

The Ukraine, on the other hand, has 700,000 troops, including the forces withdrawn by Moscow from Germany, Hungary and Czechoslovakia. Even with big reductions, promised by Kravchuk, the Ukraine now has more tanks, armored vehicles and combat aircraft than any other country in Europe after Russia.

The seeds of a future conflict, which could result in devastating armed clashes between both states, was shown in the squabble over the Crimea. Economic collapse which would bring along with it the threat of a mass uprising of the discontented masses, means that the fledgling capitalist classes in these states are already edging towards a form of Bonapartism, in the case of Yeltsin of parliamentary Bonapartism.

In Uzbekistan we have seen the outlawing of demonstrations, threats against potential strikers and almost as repressive a regime as existed under Stalinism.

We could not yet characterize China as having completed the capitalist counter-revolution. The state still exercises considerable leverage. Thus, private farmers must agree to state contracts before they acquire farmland. There are significant unalloyed capitalist sectors of the economy and whole areas like Guangdong province, close to Hong Kong, which are run strictly on capitalist lines.

China has not, as yet, either in its state forms or in the economy completed the capitalist counter-revolution. However, the direction in which it is moving is clear: towards the market and the restoration of capitalism.

It is clear that even the Stalinist "hardliners" have concluded that there is no alternative but to proceed in this direction if China is to acquire the technological know-how to become a strong economic power capable of standing up to its imperialist rivals, above all, to Japanese imperialism.

They are, however, determined to avoid what they perceive as the mistakes of Gorbachev and Yeltsin. They will ignore the advice to proceed on the "fast track" towards the market. In looking at the progress of the "Asian tigers" they have noticed the significant role of the state as a handmaiden in their economic state sector even if capitalism is restored in China.

Above all, they are determined to avoid the dislocation and upheaval which plagues Russia, which they perceive arises from Gorbachev's "democratic reforms". Therefore, their perspective is to retain the Stalinist state apparatus, with only a loosening of some of its controls, grafted on to a capitalist China.

Therefore, the Chinese model, invoked by the Russian Civic Union and probably looked towards by the other regimes of Easter Europe, is a short term expedient which cannot for long still a movement of the masses, nor prevent the centrifugal tendencies which flow from the process of restoration of capitalism.

The collapse of Stalinism has had a more profound effect in the colonial and semi-colonial world than in the advanced industrial countries.

The colonial bourgeoisie has increasingly abandoned any pretence to independence with the loss of its ability to maneuver between the great powers. At the same time the allure of the market, with its attendant policies of mass privatization and "deregulation", seemed to be reinforced by the Reagan-Thatcher boom. Here was a quick escape route from the cycle of economic dependency, deprivation and pauperization. Privatization, adopted by former pro-Stalinist and ex-Stalinist regimes as well as by pro-bourgeois governments, merely resulted in the gobbling up of whole sectors of industry by imperialist monopolies.

The siphoning of funds out of some of the areas of the colonial world, such as Latin America, has now gone into reverse. Western capitalist monopolies seek to exploit cheap labor, not only in manufacturing and semi-manufacturing areas but in the fields of new technology. The globalization of finance and knowledge, together with the existence of a relatively skilled layer in the colonial and semi-colonial world, has allowed the rapid transfer of resources to some sections of the colonial world. This has allowed imperialism to increase its exploitation and to cream off the wealth and talent in these societies.

At the same time the unfavorable terms of trade, which have worsened in the 1980s, have will nigh cancelled out any of the post-war benefits that some of these societies accomplished in the 1950-75 boom. The drop in the prices of primary products - 25 million coffee producers face absolute destitution because of the collapse in the coffee price in the recent period - has severely cut the income of most of the societies in Africa, Asia and Latin America.

The plummeting in the price of oil has savagely cut the income of the oil-producing states both in the Middle East, in Nigeria, Iran and elsewhere. With economic collapse has come intensified racial, religious and tribal divisions, which in the case of parts of Africa, have all but obscured or wiped out the very concept of the "nation".

Imperialism has undoubtedly been given, by the collapse of Stalinism, a freer hand to intervene and subdue the colonial masses. Without the support of Gorbachev and the former Stalinist states, Bush's deployment of such massive military might in the Gulf War, would have been extremely difficult.

At the same time, this intervention starkly revealed the severe limitations imposed on even the strongest imperialist power. It showed the difficulty of any long-term intervention or occupation of decisive areas of the colonial and semi-colonial world.

This lesson has been underscored by events in Yugoslavia and will be further demonstrated by the experience of US imperialism in Somalia. It is above all the class balance of forces, particularly in its own domestic sphere, that conditions the limited character of US imperialism's incursions abroad.

It was one thing to bomb and strafe an already defeated and retreating army out in the desert. It was another thing to become embroiled in occupying the urban and industrial areas of Iraq.

Even in a largely rural environment, Somolia, US imperialism could suffer heavy losses with the inevitable rejection of the Somali workers and peasants for their "liberators". Already a significant support for Islamic fundamentalism, taking the place, temporarily, of the "Somali nation", has been witnessed. The UN chief, Boutros Ghali, has declared that US imperialism will stay no more than 6 months.

In an attempt to screen its imperialist ambitions US imperialism prefers to act under the flag of the UN. The collapse of Stalinism makes this easier. At the same time, fearing its own capacity to act as the world's policeman severely limited, it wishes to draw in the other major powers, particularly Japan and Germany. Hence Clinton's proposal to extend the present membership of the veto-wielding membership of the UN security council (presently comprising the US, Britain, France, China and Russia) to include Japan and Germany. This has provoked squeals of outrage from British imperialism, but Clinton's proposal merely reflects the changed relationship of forces. It recognizes the collapse of Britain and the increase in power of both Japan and Germany, both of whom are presently declared to be "enemy states" under the UN charter. The inclusion of both in the Security Council will be the prelude to pressure being exerted for them to eventually play a military role.

The policy of US imperialism under Bush, and probably under Clinton, was to wound but not to kill. Hence the very limited "no fly zones" in the north and in the south, ostensibly to protect the Kurds and the Shiites respectively. It has not escaped the notice of the strategists of US imperialism that the majority of the population, 55 percent, are Shia Muslims, largely concentrated in the south.

The Saddam regime is based on the Sunni minority in the central area around Baghdad. Any new regime following Saddam which was to occupy a similarly narrow social base would be inherently unstable and most likely another military dictatorship. Moreover, on the basis of bourgeois democracy it would be some kind of regime based on the Shiites that would come to power.

It is true that the Iran-Iraq war demonstrated that it was the concept of belonging to the Iraqi or Iranian nation which was primary rather than religious allegiances. However, Iranian Islamic fundamentalism still exercises a powerful and attractive force for the dispossessed and impoverished Iraqi masses, as it does throughout the whole of the Middle East.

Therefore, an Islamic fundamentalist regime is a real possibility in a post-Saddam Iraq. Imperialism would prefer a regime other than Saddam's but in the final analysis would tolerate and even support a Saddam-dominated Iraq rather than an Islamic fundamentalist regime.

So rotten is the former alleged "socialist" regime of the FLN in Algeria that a real possibility of an Islamic fundamentalist regime taking power in the next few years is posed. It is this which has compelled imperialism to turn a blind eye towards its authoritarian measures in the region, just as "anti-communist" despots were tolerated in the past. Thus the suspension of elections and increased repression against the FSI, the main fundamentalist organization, evoked not a peep of protest from the spokesmen of the capitalist powers.

Thus, Argentina and Chile have experienced recent growth rates of 7 percent. This is quite spectacular, when compared to the record of the advanced industrialized countries, never mind the other states of Latin America. But this is not the general picture throughout Latin America as a whole. Two out of five Latin Americans live in poverty - 180 million people compared to 130 million in 1980. The wealthiest fifth of the population earns 20 times that earned by the poorest fifth, compared with less than 10 times in Asia. The impoverishment of the formerly oil-rich Venezuela, for instance, has provoked a number of recent attempts at coups. A section of the masses in desperation have supported the efforts of a radicalized petit-bourgeois officer caste to put a "firm hand" at the helm of the nation.

Fujimori in Peru first of all carried through a "constitutional coup", suspending parliament and with the support of the army giving himself dictatorial powers. He was able to declare a state of emergency because of the social breakdown and the successes of Sendero Luminoso. The recent capture, trial and imprisonment of its leader, Guzman, has temporarily dislocated and weakened the guerilla movement. This in turn has allowed Fujimori and Peruvian capitalism a certain breathing space.

But this also shows the limitations imposed on Peruvian capitalism in moving in the direction of new dictatorships. These limitations affect the ruling classes of Latin America as a whole. The reign of the generals is still too fresh in the minds of the masses. Attempts at coups cannot be ruled out. And in the long term, given the perspective for a worsening of the economic conditions and social situation of the masses in Latin America, a new chapter of threatened military dictatorships will undoubtedly be posed. Before then, however, new revolutionary storms will sweep the continent.

To the workers and peasants of the colonial world the regimes of Eastern Europe and the Soviet Union did provide a "model" of how to escape from imperialist domination and its attendant poverty and deprivation. They did at least provide the basics of food, shelter, social services etc. despite their authoritarian one-party regimes. The collapse of these regimes has undoubtedly exercised a more disorientating effect ideologically than amongst the more culturally developed societies of the west.

In 1991 output in Africa grew by 1.9 percent and in 1992 the economy grew by no more than 2.4 percent. When taken against a background of a population growth of 3.1 percent in these two years, income per head has been declining by nearly 1 percent annually. This is a continuation of the disastrous trend of the 1980s.

Africa's trade deficits have consistently worsened throughout the 1980s and are destined to plunge even further in this decade. The general stagnation in the world economy will cripple all attempts of the continent to escape from the crushing poverty which scars the continent.

Many countries are unable to provide the bare necessities to feed their population. Zimbabwe, for instance, a potentially rich country along with many other African countries, was forced to import 6 million tons of cereal last year, a three-fold increase on the "norm". The ratio of debts to the total value of annual exports rises inexorably, from 230 percent to 237 percent in the year 1991-92, with 31 percent of exports having to be used for debt servicing.

The continent has the highest infant mortality rate in the world, 108 per 1,000, compared with the world average of 63 per 1,000 and 12 per 1,000 in the industrialized world. And while the trend for an outflow of capital from the colonial to the industrialized countries has been reversed in the third world as a whole ($23 billion yearly left the backward countries for the industrialized countries in the 1980s. By 1991 this had turned into a $32.5 billion inflow) Africa saw its resources drained away even more.

In 1988 the continent received inward investment of $4 billion, in 1990 of $1.1 billion and in 1991 a mere $900 million. The disastrous "experiment" in aping the dash to the markets in the capitalist west will have even worse consequences for Africa. The pendulum will swing in the opposite direction, towards a reassertion of state intervention and state control of industries. This will probably be seen, first in the semi-colonial world in the period that we are going into. Africa could be to the fore in this process.

World relations encompasses the class balance of world forces. The collapse of Stalinism, it is necessary to repeat, does represent an ideological victory for the bourgeois. Taken together with the shift to the right at the tops of the workers' organizations, and the emptying of the workers' organizations, during the 1980s boom, it complicates the working class's ability to draw clear socialist and Marxist conclusions.

It would be entirely wrong for us to brush aside the effects on workers' consciousness of the collapse of Stalinism and the shift to the right of workers' organizations. Equally it would leave our organization and cadres entirely unprepared for the sharp, abrupt changes that could develop in the immediate period ahead.

The collapse of Stalinism was most keenly felt in 1989 and to some extent in 1990 before the onset of the world economic slowdown and recession. It was possible then for the strategists of capital to point to the alleged "successes" of the market in contrast to the slothful, dislocated Stalinist economies and societies.

However, events since then have worked against this ideological offensive. The economic slowdown of western capitalism, when taken together with the devastation wreaked by the attempt to return to the market in Eastern Europe and the Soviet Union, has undermined this ideological offensive.

He suggests not only the abandonment of any notion of socialism, or of social democracy, but even "liberal principles". All that is necessary to do now in the face of triumphant capitalism is to adopt the standpoint of "constructive pragmatism".

This is the guiding philosophy, not just of those like Galbraith, but also of the right and also at the present time, of the majority of the "lefts" in the workers' organizations. They are quite unprepared for the sharp turns in economics, in social relations and in politics which will be the hallmark of the coming decade.

The outlook of the proletariat is, however, entirely different to this layer. In a period of upswing the failure of "socialism" - the planned economies of Eastern Europe and the Soviet Union - can be primary, at least in the consciousness of the older layers of the proletariat. The youth, the new layers, as shown by the Poll Tax struggle in Britain, drew the conclusion that mass movements along the lines of those in Eastern Europe and the Soviet Union could overthrow despotic governments. However, even amongst a layer of the youth, the attraction of "socialism" was dimmed by the collapse of the regimes of Eastern Europe and the Soviet Union.

The proletariat can be compelled to go into action, indeed will be forced to go into action in the next period, conscious of what it does not want but not clearly comprehending the alternative. Nevertheless, events would teach the advanced workers, who will seek out the necessary historical precedents to develop the outline of an alternative, even if our tendency did not exist.

We should never forget that the basic ideas of socialism existed in a rudimentary form in the proletariat, (in the French working class soon after the French revolution, in the English workers summed up in the Chartist movement and in the socialist sects in Germany), even before Marx or Engels came onto the scene.

Marxism generalized the experience of the proletariat, summing this up in the ideas of scientific socialism. Time and experience, the big events that loom, will be a great teacher of the working class. Without a conscious Marxist organization and leadership it will undoubtedly take longer for the proletariat to draw all the necessary conclusions from its experience. It can take a circuitous route. The development of our International and our national sections, therefore, can enormously speed up this process. It is already clear that the pendulum which swung towards the right, primarily at the top of the labor and trade union movement, is already beginning to swing back under the pressure of events in the opposite direction.

However, because of the absence of an authoritative Marxist leadership and mass organizations, this will not be an even process. In the general swing towards the left, which is now beginning in the advanced industrial countries of Western Europe and of the USA, there will still be a reservoir of backwardness. Racist feelings can grow in the absence of a conscious Marxist leadership. But the movement will be inexorably towards the left. Big opportunities will be presented for the growth of our International. The time scale is the most difficult to predict, in the present complicated international situation.

Yet such is the accumulated bitterness, indeed the rage, of a broad swathe of the population in the advanced industrial countries, stoked up during the 1980s boom, that mass social eruptions on the scale of Italy in the late 1960s and early 1970s, possibly similar to May 1968 in France, are nor only possible but inevitable.

In the teeth of an international split, and partly because we have shed our conservative tail in the form of the small ex-minority, out International, with smaller forces than in the previous period, now occupies a greater specific weight in the life of the workers' movement in many of the countries of Western Europe. Our cadres have gained invaluable lessons in intervening in mass struggles, particularly on the issue of racism, the struggle against cuts in public expenditure in Sweden, in mass battles in Britain and elsewhere.

Resolution from the IEC
Adopted by the Congress

First Draft Written in January 1993