The Challenge of Globalization: Introduction

The working class faces an entirely new international situation since the collapse of the former Stalinist regimes. It has posed many challenges for Marxists concerning the nature of capitalism and the new tasks which the working class has to confront.

One of the most important questions is: “Is capitalism entering a new and higher stage of its development?” The extreme proponents of the ideas of globalization answer this question in the affirmative. They defend the idea that through the development of massive transnational companies the limitations of the nation state have been overcome. This, they argue, will open a new historical period of capitalist development.

The CWI must answer these arguments if we are to be able to offer a correct analysis of the nature of the present epoch. Such ideas have their origin on the one hand in the excess of confidence which gripped the ruling class internationally after the collapse of the old Stalinist regimes in 1989-90, and on the other in important changes in the world economy.

In 1993 the world congress of the CWI characterized the economic phase of capitalism since the mid-1970s as one of depression within which there has/will be particular conjunctures of growth. There have been clear trends which vindicate this analysis. There are four important economic features which have clearly emerged in the recent period.

i) The emergence of structural mass unemployment and social polarization in the industrialized capitalist countries.

ii) Growing social/economic polarization within the industrialized countries.

iii) Increased domination of the former colonial world by the imperialist powers.

iv) Increased social polarization and poverty within the former colonial countries.

The core of the arguments concerning globalization can be summed up as follows. Firstly, the recent period has seen the development of a globalized economy which is now dominated by the emergence of major transnational corporations which have broken free from national boundaries and developed a kind of “super-imperialism”. Secondly, with the development of a more open and integrated market, the perspective is now raised for the former colonial countries to be integrated into the industrialized capitalist economies. Thirdly, the general idea is put forward that the freedom of the labor market will prove to be the great “equalizer” between rich and poor. Fourthly, all this is made possible because of the alleged death of the socialist alternative and the collapse of the majority of the planned economies after 1989. To sum it up, as Business Week commented in one of its editorials a few months ago: “A new and brutally competitive world economic order is emerging with the demise of the Cold War. The fundamental force behind this New Order is the transnational corporations and the integration into the global economy of the new capitalist nations and much of the developing world, representing some 3000 million people.”

It is the acceptance of these ideas which provides the justification for the swing to the right and the acceptance of the market by the leaders of the former workers’ parties. These ideas have been used in the recent period as an ideological weapon against the working class. There has been an attempt to try to sap the confidence of the working class as it has moved into struggle to protect itself against the economic offensive which has been launched on an international scale by capitalism.

Supporters of globalization theories present the 1990s as a decade of the global market place where job relocation is an unstoppable process, rendering futile any resistance by the working class. The CWI has two central tasks before it: the first is to answer these ideas and to clarify exactly what changes have taken place over the recent period. Secondly, the CWI and its sections has a decisive role to play in propagating the ideas of socialism among the most advanced workers and youth. The credibility of socialism as an alternative to the domination of the market needs re-conquering internationally.

If these tasks are to be achieved Marxists must take account of important changes which have taken place in the world economy. There can be no doubt that it has become more internationalized. The flows of capital and development of world trade have reached new levels. With the development and greater monopolization of the multinational corporations there has been a clear tendency to internationalize production. Products can be designed in one continent, assembled in another and sold around the globe. This process has taken place not only amongst the multinationals of the industrialized capitalist countries. It has also affected some of the secondary imperialist powers and some of the emerging capitalist powers as well. South Korean car companies now import and assemble cars in Botswana to sell them in South Africa at 70 percent of the price of other cars assembled there.

The most striking feature of the world today is the increased pressure and the dominance of the world market. This means that it is even less possible for one country to opt out from the world market and the broader political processes which are taking place. It is reflected in a growing uniformity of bourgeois policy and program on a world scale. This has gone side by side with a substantial fragmentation of the political institutions and parties of capitalism. This domination of the world economy has decisive political implications. The influence of the world market currently determines the policies pursued in each country. No country has been able to escape its influence. It has been one factor which has prevented the implementation of reformist policies. This is likely to be the case in the short to medium term.

In recognizing the internationalization of the world economy we must also distinguish between what is fact and what is myth but presented as fact by the proponents of globalization. There are 37,000 multinational companies (MNC’s) at present. They have 170,000 subsidiaries in different countries, controlling just over one-third of the world’s private assets. This marked tendency towards monopolization and internationalization of the world economy, together with the massive development of foreign trade and the expansion of international capital flows, is not a basis from which a new and distinct period of capitalist development can take place. The main features which have recently developed have been manifested at different times in the history of capitalism.

Whilst the world economy has undoubtedly developed and internationalized recently it is not any more “open” today than it was between 1870 and 1914. This then gave way during the 1930’s to a period of protectionism. The introduction of new techniques of production and communication is a quantitative development, rather than a qualitative new stage in the development of capitalism. In some industries it has gone further than in others, particularly in chemicals, communications and car production. But one of the myths that must be shattered is the idea that the world economy is currently dominated by transnational corporations which no longer have a national basis, and that consequently all the limitations of the national state have been overcome. This must be demonstrated by the fact that of the 37,000 MNCs, 70 percent were “home based” in 14 OECD countries.

It is true that some companies have been able to establish genuine transnational enterprises which span the globe. There has been a certain tendency in this direction. This has been mainly concentrated among European firms, especially Dutch companies. However, genuine transnational corporations at this stage are generally the exception rather than the rule. Most have a definite national or at most a regional base. In the USA, the parent organizations of the multinational corporations based there have 78 percent of total assets, 70 percent of total sales and 70 percent of their total employment force at home. Of the top 5000 multinational companies internationally, two-thirds of their sales are either based in the country of origin or in the region where they operate. This clearly points to the fact that the vast majority of the multinational companies, despite the internationalization of production techniques, still tend to be nationally based.

It is more accurate to say that the most dominant tendency has been the development of regionalization, rather than real globalization. This development of regionalization is one factor which is reflected in the emergence of regional trading blocs such as the EU, NAFTA, MERCOSUR, ASEAN, etc.

The one aspect of the economy where it is possible to say that a real process of globalization has taken place is in the financial markets.

However, the decisive feature is the dominance of the world market. This has rendered the application of distinct and separate policies within national boundaries impossible for any length of time. This is especially the case for policies of a reformist or left reformist character. Take, for example, the position of Mitterrand’s government in the 1980s in France. It initially tried to move against the general international trend, adopting a more clearly reformist, or Keynesian based policy, but was forced in a matter of months to abandon it. As the chairman of CitiCorp pointed out: “There are 200,000 monetarists in trading rooms all over the world. They conduct a kind of global plebiscite on monetary and fiscal policies of government. There is no way one nation can opt out.” And referring to Mitterrand, he commented: “The market took one look at his policies and within six months, the flight of capital forced him to reverse course.”

This was dramatically seen in Venezuela which has experienced two attempted coups, mass rioting against the IMF austerity package which left hundreds dead, and the election in 1994 of a populist left -wing coalition led by Caldera. This government has on two occasions attempted to move in the direction of more state intervention, control of oil prices, and other measures based on reformist policies. On both occasions, Caldera was forced to abandon these measures and adopt the neo-liberal measures demanded by the IMF and the World Bank. As the World Bank stated in relation to Caldera’s change in policy, “He does not believe in it, he does not want it, but he has no choice but to implement it.”

These examples illustrate the domination of the world economy and show that the material basis which allowed capitalism to implement lasting reforms in the post Second World War decades no longer exists. Temporary concessions may be given by a government threatened with massive social explosions. However, they will rapidly be taken away again because of the limitations of the resources of capitalism.

In recent years there has been much greater social inequality on a global scale. This can be seen both geographically and socially. The gap between “rich” and “poor” nations has widened. The same process has occurred between the wealthy and the downtrodden within countries. The strangulation of the former colonial world by the imperialist powers has tightened. Any limited development which has resulted from investment due to internationalized production techniques and the introduction of new technology has been concentrated in relatively few areas. As a result it has only benefited a tiny minority of the population. This has taken place in the former colonial world at the same time as greater social polarization, between the rich and poor, in the advanced capitalist world and even the major imperialist powers.

The increase in exploitation in the former colonial countries is one of the most important aspects of the economic processes which have occurred. This is graphically illustrated if we look at world trade. Trade between the industrialized countries was $2044 billion a year in 1994. Among the other countries of the world it was a mere $195 billion during the same period. The expansion of world trade was the main driving force in the boom in the world economy which took place in the post-Second World War period.

Today the increase in Foreign Direct Investment (FDI) is pointed to as the new motor force which will open up a new historical period of capitalist development. It is heralded by right-wing economists as the salvation which will allow the former colonial world (or at least sections of it) to develop. FDI did expand dramatically, especially between 1983 and 1990. (During this period FDI grew by 34 percent per annum compared with global merchandise trade which grew by 9 percent.) This prospect is wholly false. The increase in FDI which has taken place is extremely uneven and not comparable with the massive expansion in world trade which took place during the post war decades. 75 percent of FDI is concentrated into what is called “the triad” of the US, Europe and Japan. This accounts for a mere 14 percent of the world’s population. A closer study of FDI reveals an even more devastating situation. If the quantity of investment into the ten most important developing countries is added together it means that 43 percent of the world population is in receipt of 91.5 percent of FDI flows.

Even this does not reveal the full picture. Included in these figures are FDI flows into China. Most investment there is concentrated into the coastal provinces, particularly in the south. If these eight provinces plus Beijing are separated out and China is “divided into two” (between recipients of FDI and non-recipients) a recalculation shows that 91 percent of total FDI goes into countries and regions which only make up 28 percent of the world’s population! The vast majority of humanity is gaining absolutely nothing from this process.

The nature of FDI also gives an indication of how it will affect long-term economic development. It is largely made up of short/medium-term loans and speculation, and buying up privatized companies. This has particularly been the nature of FDI going into the former colonial world.

The Asian Tigers are used as an example to be followed in the rest of the former colonial world. The impressive growth rates in Singapore, Hong Kong, South Korea, and Taiwan have been presented as an illustration of what is possible. Developments in these countries have been quite exceptional and impressive economic growth has been achieved. In general this has taken place over quite a prolonged period. These countries have been transformed, becoming overwhelmingly urbanized and industrialized. There are two features which stand out. On the one side, the growth and development of these economies has been based on the adoption of precisely the opposite economic policies which are now being applied globally. It has largely been the consequence of state intervention, particularly the use of joint private and public funds together. This was the case in South Korea, where special arrangements were arrived at in relation to trade with the US. Growth has been on the basis of these policies and not the adoption of the open, free market, non-interventionist policies which are currently demanded by the World Bank and the IMF.

However, the very development of these economies has brought its own contradictions. It is one thing to be able to sustain this growth as the economies have been developing. It is an entirely different question to sustain that growth after the economies have passed through a period of development. There has been a lot of publicity referring to wage levels in these countries reaching the lower levels of wages earned by workers in the main imperialist countries. This recent development will mean a loss of the advantage that these countries had in offering cheap labor! The recent upheavals and strikes in South Korea are an indication of how the very development of these countries has also created a much stronger industrial working class. Over the next few years the struggles of workers in these countries will be an important feature of events in that region.

The increased development (economically and socially) of each of these countries together with the emergence of capitalist China will also result in heightened conflicts in this area because of the increased strength of the national bourgeoisie in these countries and the inevitable struggle for markets which is developing.

The economic trends within the Tigers have been the exception rather than the rule when compared with the processes which have taken place in the former colonial world. It is worth noting that in the 60s, Brazil was pointed to as the new model to be followed. There are many differences between the situation in Brazil and South Korea. However, despite any differences both have seen new conflicts and upheavals. The very developments that have taken place will result in heightened regional conflicts and also pose the necessity for the ruling classes in these countries to increase the exploitation of the very young and new working class which is being created.

The emergence of regional trading blocs has demonstrated the two contradictory features present at the moment. On the one side, there has been a clear tendency for the economies within the trading blocs to be pulled together. This reflects the internationalization of the economy which has taken place. At the same time as they have been pulled together, new conflicts have developed within them which have served to pull in the opposite direction. This process has unfolded at differing rhythms and varying degrees in each trading bloc. The European Union has seen the most powerful tendency towards integration. In others such as MERCOSUR or ASEAN it has been much less developed.

In Europe the process has gone a long way but it has also thrown up contradictory tendencies and conflicts between the different European countries. However, one important feature is that the very steps required to fulfill the Maastricht criteria for EMU (reducing the state deficit to 3 percent of GDP) threaten to create new problems. In order to fulfill the criteria, Germany threatens to pull the whole of Europe into recession.

In some of the other trading blocs the same contradictory tendencies are at work as well. NAFTA, at the time when Canada and Mexico joined, was projected as a great success. The perspective originally put forward by the US ruling class was that it would evolve into a trading bloc which covered both North and South America. The developments of NAFTA were paralleled in South America with the formation of MERCOSUR. However, with the establishment of these regional blocs new contradictions rapidly began to emerge and the limitations of these agreements were exposed.

Most dramatically, the crisis in Mexico compelled US imperialism to intervene in 1994 and bail out the Mexican ruling class to the tune of billions of dollars. This has had repercussions throughout the rest of the continent, beyond the immediate shock waves which swept the financial markets. Chile is viewed as the Latin American Tiger, and the next entrant into NAFTA. The Chilean ruling class looked towards NAFTA and the East and spurned MERCOSUR. After the crisis in Mexico, the US has been far more cautious about rapidly expanding NAFTA south of the Mexican border. Whilst Chile continues to negotiate with NAFTA, its membership has been constantly delayed by the USA. Chile itself has become less enthusiastic about immediate entry to NAFTA and has now opted to join MERCOSUR as an associate member.

Problems within NAFTA have been mirrored by heightened frictions within MERCOSUR, which is dominated by the powerful Brazilian economy. A conflict of economic interest has clearly emerged between Argentina and Brazil. The former is threatened with a flood of imports from the latter. At the same time Argentina has a different agenda for MERCOSUR than Brazil. Argentina has viewed it as a step towards eventual entry into NAFTA and a unified trading bloc being established throughout the Americas. Brazil looks to consolidating a South American trading bloc, which it would dominate, existing alongside NAFTA.

The developments in these trading blocs illustrate the tendencies towards internationalization in the world economy and also the new contradictions and conflicts of interest which are arising. Whilst the dominant trend has been in the direction of internationalization of the world economy and the dropping of trade barriers, will this continue indefinitely? Can these recent trends prevent a return to any form of protectionism and state intervention?

Elements of protectionism have continued during this period on a small scale, and in a disguised form. This has usually been done either through currency devaluations or subsidies. A change in the economic situation could force a change in policy and a return to some protectionist measures. This could arise especially in the context of mass social upheavals and explosions and with the onset of a slump in the world economy. It is true that any return to protectionist measures may be more likely to be implemented on a regional basis rather than a national one because of the process of internationalization of the economy which has already taken place.

The regional frictions which have developed have coincided with imperialism having to confront the new world situation which has developed post-1989. In the recent period there have been two main aspects to the policy adopted.

Firstly, despite its relative economic decline over recent years the USA has still tried to assert its international role. It has been extremely cautious in terms of moving towards direct military intervention and where this has been done, it has been done under the auspices of the United Nations.

Secondly, the main offensive by US imperialism has been political or diplomatic rather than military. In this respect it has been quite blatant. In the Middle East Clinton conducted an open campaign to try and secure the re-election of Peres in order to try and keep the “peace process” on track. This policy was then repeated in an even more strident fashion in the Russian Presidential elections. The intervention by all the Western powers to try and secure Yeltsin’s re-election was almost unprecedented in its brazenness.

Since the last international meeting of the CWI all the much-heralded “peace processes” have run into increasing difficulties and problems. This shows the limits of imperialism’s ability to resolve such conflicts. The defeat of Peres in the Israeli elections (in May, 1996) is certain to place increased strains on the “peace agreement” and result in further instability in the region.

Recent US policy has been linked to the forthcoming elections in the US. This has certainly been demonstrated in relation to Cuba, through the introduction of the Helms/Burton bill. (This enables the USA to take sanctions against any company – including non-US firms – which invest in Cuba). This has been directed at trying to bring the regime down and humiliate Castro. It is done with an eye to securing the Cuban exile vote for Clinton in the forthcoming elections. This policy could be reversed and the blockade lifted after the presidential elections have taken place. The policy of the European imperialist powers of investing with a view to carrying through the restoration of capitalism in Cuba, is undoubtedly more farsighted.

Another important feature in world relations has been the tendency towards heightened frictions between the USA and some of the “secondary” imperialist powers. This was reflected in the opposition by French capitalism to the Israeli bombardment of the Lebanon. Reflected in this clash were the aspirations of French imperialism to try to rebuild its influence in the Lebanon and throughout the region.

The strengthened economic grip of imperialism over the former colonial countries has been reinforced as a direct consequence of the privatizations which have taken place. This is a vital aspect of developments in Asia, Africa and Latin America. The consequences have been horrific for the masses. There has been no “trickle-down effect”. Inequality has become greater and poverty more widespread.

The policy of privatization began earlier in Latin America than in other areas of the former colonial world. Together with other aspects of the neo-liberal agenda it has been a catastrophe for the masses. In 1980, 41 percent of the Latin American population (136 million people) was living below the official poverty line. By 1990, the figure had risen to just under 62 percent of the continent’s population – 270 million people. There has been a similar trend in relation to the Indian Sub-Continent and, most horrifically, in Africa. In Africa the “trickle-down effect” has produced a “melt down” as whole countries are threatened with barbarism and even disintegration.

Four countries in Africa have already in effect ceased to exist – Liberia, Rwanda, Somalia and Burundi. The turmoil which is taking place throughout the former colonial world is almost unprecedented. The United Nations estimated that the number of refugees was increasing in 1992 by 10,000 per day as a result of the economic situation and also as a result of wars, policies of ethnic cleansing, etc. Internationally, the UN calculated in 1987 that there were 2.5 million refugees; by 1995, the figure was 45 million. This is a measure of the depth of the crisis confronting humanity.

The character of the period is also reflected in the developments within the advanced capitalist countries. Capitalism is in a historical epoch of economic depression which is interspersed with periods of growth. Over 30 percent of the labor force internationally is now either unemployed or under-employed. Mass unemployment is now a structural part of capitalism in the industrialized world. This does not represent a period of capitalist expansion.

These events have taken place against a background of a certain conjectural economic growth, which has taken place in the economies of the advanced capitalist countries: limited growth in the USA, recently some growth in the Japanese economy, following four years of stagnation, and a slowdown in the European economy. In Japan growth is based on an increase in government spending and the money supply. At one point annualized GDP growth figures for Japan touched 13% this year, but such a rate of growth is unlikely to be sustained and will probably peter out.

It is necessary to be conditional about short-term economic perspectives. The recent sluggish growth which has occurred could continue for a further couple of years, although this is not certain. In Europe, there is the serious possibility that a recession could take hold of the continent. The attempts of the German ruling class to meet the criteria for the Maastricht agreement can drag the rest of the EU into recession.

Moreover, there also exists the prospect of another crash on the financial markets, where there is a marked tendency towards the over-valuing of share prices. The consequences of another crash would not be the same as 1987. Imperialism does not have the same resources it did then to intervene. Another important difference is that prior to 1987 the world economy was in an expanding phase of growth rather than the sluggish state it finds itself in during 1996. Should another financial crash occur the prospect of a slump in the world economy could be posed as a serious or even likely perspective.

The issue of structural mass unemployment is a decisive question for the workers’ movement. The question of job relocation is a central part of the debate on globalization. It particularly raises the threat of the relocation of jobs from the industrialized capitalist nations to the cheap labor economies of Asia, Africa and Latin America. This process also takes place within the trading blocs established in the former colonial world where wage levels can also be quite varied.

There are some very concrete examples, like the experiences at Swiss Air and Lufthansa. They have moved all their accounting operations to India, where labor is much cheaper. Another example is that a software computer programming center in Bangalore services over 30 multinational companies. Some countries such as Germany and Austria have also begun to relocate jobs to Eastern European countries such as the Czech Republic.

The CWI needs to develop more concrete demands and slogans to be fought for in the workers’ movement on this question. From the general process of the internationalization of production, the need for the international organization of workers assumes a more concrete and practical necessity. The CWI should raise the idea of the establishment of international organizations linking workers together, workplace-to-workplace. This proposal is especially relevant for workers within the same multi-national company. The failure of the international trade union bureaucracy to act means it is necessary to also propose that workers by-pass officialdom. Linked to this proposal, the CWI should also explore the possibility of an international struggle to establish maximum differentials within the wage structures of the multi-nationals.

This question of job relocation poses a very real threat and it would be wrong to underestimate it. At the same time, it is also necessary to have a sense of proportion. This issue is being used by the employers as a means of intimidating workers against taking action and to force down wage levels.

However, this threat has also been exaggerated by some economists and employers who have used the ideas of the “extreme globalizationists” to justify it. Job relocation to the former colonial world has not been the primary reason for lay-offs in any of the industrialized countries. It is not a realistic perspective that capitalism is going to undertake a mass transfer of employment in the industrialized capitalist world to the former colonial countries.

Firstly, the immediate social consequences of such a step prevent them from doing this. Secondly, there are also economic factors which mitigate against such a drastic step. Wages and labor costs actually only account for 20 percent of costs for the average multinational company. There are other factors, such as technique and training and securing the easiest possible access to the market itself which need also to be taken into account.

In some industries the issue of job relocation has been more of a threat than in others, partly because of the nature of production. (e.g. textiles) These economic processes are not abstract questions. They have a direct bearing on the struggle between the classes internationally.

In a number of important European countries there has been an important revival of the movement of the proletariat. The huge events in France in December of 1995 had international repercussions. At the world congress of the CWI in 1993 we stated: “In this period, it will be precisely the emergence into the arena of struggle of the working class in Germany, the US and Japan which will be a key element.” In Germany that has been graphically borne out by the recent massive protests of the public sector workers. In Japan, in outline, we can see the beginnings of that process. Even in the US, there are important new features such as the possible development of a new Labour Party. We will have to see how that development progresses. Nevertheless, it reflects the first, tentative steps being taken by the more class-conscious workers in the USA.

Outside of Europe there have been massive struggles by workers and other exploited classes in society. In Sri Lanka in 1996 there was an important strike of electrical workers against privatization. There were also the massive movements of bus workers in both India and Mexico in 1995/6 against privatization.

As a consequence of the neo-liberal policies which have been implemented, Latin America has seen a massive revival of the mass movement. This has taken the form of strikes, general strikes, land occupations, rioting and other protests. These events have occurred from Mexico in the north to the south of Argentina. The Mexican workers and peasants mobilized in their thousands in a battle against privatization of the oil industry. At one stage of the struggle the oil refineries were occupied by workers and peasants. There have been two general strikes in Bolivia over the past 18 months. In Paraguay, where there has not been a general strike in 40 years, two one-day general strikes have been organized in the last year. In Brazil, 12 million workers participated in a 24-hour general strike.

In a similar way, the process of integration has provoked protests in Europe. In Latin America, Paraguayan peasants have marched against MERCOSUR, as their very livelihood has been threatened by cheap imports from Brazil. The uprising in Chiapas in Mexico in 1994 was against NAFTA.

However, there are also important complications in the turmoil unleashed in this period of capitalism. The numerous national conflicts which have erupted are a measure of the impasse of capitalism. This is particularly pronounced in the Middle East. The economic collapse which took place in Nigeria is a further measure of the devastation which the “market” offers the masses of Africa. Despite these social and economic disasters there have been mass movements in important countries and continents in opposition to the neo-liberal policies which have been implemented during recent years.

The increasing tendency of imperialism to economically strangle and tighten its grip over the former colonial world can provoke a powerful backlash. It will inevitably provoke the rise of powerful anti-imperialist moods and movements. The recent policy by the national bourgeoisie in the former colonial world has leant firmly in the direction of prostrating itself before imperialism. The lowering of trade barriers and the process of internationalization of the world economy resulted for a period, in some areas of the former colonial world, in a lowering of anti-imperialist sentiment and anti-imperialist policies. This was partly because sectors of these societies hoped such measures would offer a rapid solution to the problems they faced.

This trend can also be reversed as the consequences of these policies are increasingly felt. In many of the emerging struggles the anti-imperialist content is likely to be the dominant feature. Imperialism will pay a price for the policies that have been inflicted on the masses in the former colonial world.

The outlines of such a development have already been seen in some countries. The elections in Ecuador, and also in Benin, are an indication of this. In July, Ecuador elected a new populist administration. In Benin, a former Stalinist ruler was elected President on a radical populist and anti-imperialist platform. This will be an important feature of the upheavals and struggles which are pending throughout the former colonial world.

This perspective could develop particularly in the context of a new slump or major recession in the world economy. Under the pressure of mass revolts and upheavals by workers and peasants, sections of the national bourgeoisie in some of these countries could be pushed to adopt more populist measures. They could adopt some protectionist measures and even re-nationalize some privatized sectors of the economy, in part to defend their own interests.

A further aspect in relation to the colonial world, is the methods of rule which are being deployed by the bourgeoisie. There has been a phase of massive illusions in democracy, particularly after 1989-90. That was reflected in important upheavals that took place in a number of continents of the former colonial world. They frequently resulted in the collapses and disintegration of the military regimes which existed, particularly in Africa. These military regimes gave way to regimes of bourgeois democracy in a series of African countries, throughout Latin America, and in some important countries in South-East Asia. However, they often have powerful features of parliamentary bonapartism.

The old state machine, in the form of the military, is still in place, and in many countries only a fig leaf of parliamentary democracy has been established. The failure to alleviate the plight of the masses, when combined with corruption and frequent waves of repression can lead to a skeptical and even hostile attitude developing towards the bourgeois institutions which are established. The program of the CWI in these countries must also reflect the aspirations for “real democracy” which can develop under such conditions. These processes have in some respects also begun to affect the industrialized countries.

The first stirrings of the masses have been against the effects of the market and against the effects of privatization/ neo-liberalism. During these movements the consciousness of the masses has centered on opposition to the effects of privatization, or opposition to the idea of privatization. In Europe it has also centered on the idea of defending services, the welfare state etc. The consciousness of these movements will reflect these issues, before moving into a phase where socialism will be accepted as a viable alternative by the mass of workers involved.

It is the absence of socialism being offered or seen as a real alternative which is the main complication at the moment on an international scale. It will re-emerge in the consciousness of workers and youth. This will come about as a result of their experiences in struggle, and through the intervention of Marxists in these events.

One of the features which has clearly emerged in the consciousness of the working class is internationalism. It partly flows from the economic processes, being reflected very practically in the struggle of the Liverpool dockers and some other struggles. It is a by-product of NAFTA that the car workers in the USA tried to establish direct links with the car workers in Mexico and other Latin American countries.

The internationalization of the struggle of the working class offers great scope for the work of the CWI. In this discussion on globalization we have two tasks. Firstly, to recognize the very important changes which have taken place. At the same time we must also see their limitations and explain the real nature of the epoch through which we are passing. That is not one of new or further capitalist development but a period of economic depression.

Secondly, there is the role of the CWI in intervening in these processes. In particular, we have a central role to play in re-conquering the idea of socialism as an alternative to capitalist society.

Within this process of internationalization of the economy are also the germs of the possibilities that socialism would mean. The technical capacity to plan the economy, to organize the distribution of resources, is present in today’s society. It is reflected precisely in the new technology which is utilized in the planning and marketing techniques of some of the multinationals. What is evident is the inability of capitalism to utilize and to harness the potential which exists. It certainly cannot do this from the point of view of the benefiting the mass of humanity. The CWI must demonstrate what socialism is and that it offers the only viable alternative to capitalism.