World Crisis Continues Amid Horrific Consequences
Report of World Perspectives Discussion at the 2015 CWI Summer School
Growing poverty and inequality, unemployment, war and its horrific consequences, economic stagnation and crisis. These were some of the themes touched on by Judy Beishon in her opening comments in the discussion on world relations at the recent CWI Summer School.
Judy explained the massive levels of poverty are an indictment of capitalism with over two thirds of humanity being classified as poor or being on low income. Those who are worth more than $100 million are seeing their wealth grow the most at the expense of the rest of society. Today 60 million are displaced by war or persecution, the biggest number of these are from Syria, Afghanistan and Somalia, while the super-rich are often able to buy their way into residency, again illustrating the grotesque injustice and inequality on our planet caused by the system of capitalism.
The economic situation for world capitalism is an extremely precarious one. The IMF have cut their growth forecast for this year and there is fear of the consequences of a potential decision by the United States to raise interest rates at the end of this year. Other problems facing world capitalism lie in the volatility of oil prices, that will be added to by the phasing out of sanctions on Iran.
Judy highlighted the growing divergence between the “real economy” and asset prices. There has been an enormous growth in fictitious capital as central banks have flooded many economies. The growing debt that this has exacerbated signifies major problems for the world economy.
In reality new bubbles have been created as the value of the stock market has doubled and government bonds have surged. Another example in the capitalist system today of the lack of real wealth creation – via investment – is shown by the fact that companies such as General Electric and Monsanto are using some of their cash piles to buy back their own shares and to hand more dividends to their wealthy share owners.
In his contribution to the discussion, Robin Clapp from England and Wales said there was now a synchronised crisis of capitalism with a very partial economic recovery taking place at the moment. Productivity is falling and there were deflationary pressures everywhere not just in Europe where the highest rate of inflation is in Austria standing at a mere 1%. It is clear that the capitalist class internationally has no confidence in the future, with many simply continuing with more plans for austerity which he said was putting “weed killer on the green shoots” of recovery.
Slowdown in China and its effects
The slowdown in the Chinese economy featured in the discussion as it is faced with the problems of overcapacity and a growing debt problem. In fact the debt of the Chinese economy has quadrupled in the last seven years. Judy said that the Chinese government saw the rising stock market – before the recent ‘correction’ – as a lifeline for a managed economic slowdown, hoping it would put money in peoples’ pockets to spend.
In his contribution Vincent Kolo from Hong Kong/China said that in the 5 weeks running up to the school $3.5 trillion had been lost in paper and electronic wealth, equal to the GDP of Europe’s largest economy, Germany. Despite the various desperate measures including cutting the interest rate and closing the stock market for 90% of companies they have failed to stem the market freefall.
The slowdown in China is clearly having an impact on different economies throughout the world particularly on those economies in Latin America and Australia that had experienced significant levels of growth in recent years as a result of a commodity export boom. Anthony Main from Australia described how the Australian economy was being affected by the situation in China and said that the government there is beginning to implement austerity. Australia had been exporting vast amounts of coal to China.
Felipe from Brazil described how the “Lula Model” based on increased social expenditure during a period of economic expansion has now come to an end. The Dilma Presidency is now faced with a political crisis linked with the economic crisis within the economy. This has led to the emergence of some large protests in the last two years and which more recently has begun to include the workers’ movement. In Chile there has been an explosion of protest against the Bachelet government as young people have taken to the streets again to protest against profit making in the education system.
Trevor from South Africa highlighted the huge discontent that is developing against the ANC government. South Africa is another country that is feeling the effects of economic stagnation. The official rate of unemployment is now over 25% and there have been cuts to electricity and wages. The obscene disparities in wealth can be seen with the fact that the wealth of two people in South Africa is equal to that of the poorest 50% of the population. Today a South African CEO earns in one year what would take a worker 701 years to earn!
Trevor described how the Marikana massacre of two years ago was a turning point in the political situation there. This can be clearly seen by the fact that metal workers’ union NUMSA, Africa’s largest union, has been kicked out of the trade union federation COSATU and is now talking of setting up a new workers’ party in South Africa.
Middle East in turmoil
Judy talked of the horrific crisis facing working people in the Middle East, a by-product of imperialist intervention in the region. Today Iraq is effectively divided into three parts and Libya and Yemen are fragmenting. Syria has been torn apart by civil war. A Sunni axis in the region consisting of Turkey, Saudi Arabia, Qatar and others is supporting Sunni militias that are fighting the Assad regime.
ISIS now controls half of Syria and one third of Iraq as and both national armies have recently fled in fighting against it. The Syrian Kurds based around the YPG and YPJ in Rojava in Northern Syria have been the most successful in fighting ISIS. ISIS is feeding off desperation amongst Sunni Muslims who have been bombed by the Assad regime and in the case of Iraq who have faced a legacy of discrimination under the Shia dominated government that took power in the aftermath of the US-led invasion in 2003.
There are also growing tensions in the region between Iran on the one hand and regimes such as Saudi Arabia on the hand. While the latter publicly welcomes the new nuclear deal with Iran in reality it is opposed to it and now aspires to possess nuclear weapons. The Israeli state is fuming as a result of the deal and it’s possible that Obama will have to use executive privilege in order for it to go through the US Congress.
The discussion on world relations took place on the day after the horrific killing of 32 young members of the Socialist Federation of Youth Associations in the South East Turkish town of Suruc by an ISIS bomb.
Cosku from Turkey explained that this group had been supporting the Kurds in Kobane and the bombing had created massive anger in the country given that the Erdogan government has in effect supported ISIS in its war against the Kurdish PYD and YPG/YPJ fighters. Josh explained the reasons that lay behind this support by the Turkish ruling class. It is clear that they do not want a Kurdish state to be formed on their border in Rojava.
In her opening contribution Judy said the fact that the ruling AKP had lost its parliamentary majority was a real a shock to the Erdogan government. Turkey has experienced a sharp decline in economic growth and there has been a backlash against the authoritarianism of the government. This has resulted in the left leaning HDP making gains in the recent elections.
A key theme in a number of the contributions was the growing rivalries between the different imperialist and capitalist countries. Jacko from Hong Kong said that the rise of China’s economic and military power meant that US imperialism was losing some of its influence over the Asia Pacific region.
The US is seeking support from its Asian allies such as Japan in order to contain China however it is really limited due to economic and political factors. Japan is now getting rid of its pacifist laws which banned it from sending troops to other countries, this has provoked mass protests within Japan itself.
East Asia, Jacko explained, was a key region for world capitalism. It accounts for one quarter of world GDP growth, a portion greater than the US and the EU. As a result of this the US is seeking to expand TTP, also known as the economic NATO, in the region to counteract the influence of Beijing.
On the other hand the Chinese regime is developing the Asian Investment Bank to expand its influence in the region and hopes it can play a role akin to that of the IMF or World Bank. It hopes it can develop infrastructure projects but this may add to the Chinese debt crisis.
Rob from Russia pointed out that you cannot talk about the situation in Russia without talking about the Ukraine and you cannot talk about either without talking about inter-imperialist rivalry. Both the Ukrainian and Russian governments now say that the Minsk agreement that was supposed to bring peace to the region is dead and 100 soldiers have been killed since then.
In his contribution, Chris from England and Wales said that in exchange for loans from the EU the country is experiencing the largest privatisation plan in 20 years with over 300 companies being sold off, including ports and mines.
A key country in the development of world relations is the United States and the events that take place within that country. Jess Spear from the US said that the economic recovery that has taken place there in recent years has been fuelled by chaos and instability as shown by the expansion of fossil fuels. But even this partial recovery is giving workers the space to fight back against low wages.
The $15 an hour demand that Socialist Alternative played a key role in fighting for most notably in Seattle has now gone mainstream. More cities are now debating this question and $15 has already been passed in San Francisco, New York and Los Angeles, where 800,000 workers are due to get a wage rise. Most recently all 10 campuses of the University California system have agreed to pay $15. Another example of the deep discontent with the often racist capitalist American state machine has been the emergence of the Black Lives Matter movement with protests growing with each brutal police murder.
The broader shift to the left within US society is beginning to find a political manifestation with the Presidential bid of Senator Bernie Sanders. Various opinion polls have shown that Sanders is gaining on Hillary Clinton. However Socialist Alternative has argued that he is mistaken to run in the Democratic Primary. As Jess argued, he is “running against the billionaire class using a tool of the billionaire class”. Despite being widely described as a ‘socialist’ Sanders does not have a rounded out socialist programme, including on international issues where, for example, he has failed to oppose the actions of the Israeli state in its oppression of the Palestinian people.
Nonetheless the traction his campaign is gaining is shown by the hundreds of “People for Bernie” groups that are emerging and the big crowds he is drawing. Over 11,000 came to hear him speak in Phoenix, Arizona, just before the School started. While not supporting his campaign to win the Democratic Party nomination, Socialist Alternative is discussing with those mobilised by and in the audience created by the Sanders campaign and arguing for socialist ideas and the need for him to stand independently from the two parties of big business.
In summing up the discussion Robert Bechert from the International Secretariat of the CWI said that economists have explained that rulers won’t be in a position to do as much as before if there is another severe economic downturn. When looking at the current economic crisis it was not just a question of looking at figures but at the real effects the turmoil was having on living standards.
Robert illustrated how the fall in commodity prices in the neo-colonial is having a significantly adverse effect on living standards by the example of one state in Nigeria, where public sector workers have not been paid since October because revenue from oil has dried up. Workers there started an indefinite strike the day that the School started.
Robert argued that the Middle East had gone from being a symbol of revolution to one of counter-revolution as shown by the emergence of ISIS. Defeating ISIS is not just a military question – there is a need to address what feeds the growth of this organisation, that being a real sense of despair amongst sections of Sunni Muslims in the region.
The CWI welcomed the defeat of ISIS in Kobane but it was important to recognise that the victory in a battle does not mean a victory in a war. Forces like the PYD need a programme that is able to win over other nationalities in the region and pose the question of a democratic confederation of the region by breaking with capitalism and landlordism, which would mean the creation of a socialist Middle East.
Struggles and revolutions are inevitable and it is important, Robert argued, that the CWI acts like the “memory of the working class”, meaning we need to draw out the key lessons and experiences of revolutionary struggle in order to politically arm working class people for future battles. This is what our comrades did in the 1970s in the aftermath of the coup in Chile against the Allende government in September 1973, now we have to explain the lessons of Tsipras’s capitulation in Greece. He pointed out that it was because the CWI remembered the lessons of the past that on the day of the revolution that overthrew Hosni Mubarak members of the CWI distributed in Cairo a leaflet warning against illusions in the military and the role the generals would play in the future as a force of counter-revolution. Unfortunately these warnings proved to be correct.
In his concluding remarks Robert said that we are in a period of instability but the question of a how a workers’ movement develops, particularly in countries like China where there is a powerful working class, is a key one. There are two main tasks, the political rearmament of the workers’ movement and organising the unorganised to build the basis for the collective action necessary to challenge and end the capitalist system.