|Harpal Brar’s new book, Imperialism, the Eve of the Social Revolution of the Proletariat, is a detailed analysis of the economic and political situation in the world at the beginning of the 21st century.
Brar demonstrates that, despite the honeyed words of the bourgeois politicians and economists, the entire capitalist system is coming apart at the seams. All the contradictions of imperialism, defined by Lenin nearly a hundred years ago, are still operating today, with more force than ever. The gap between rich and poor continues to grow all the time – an increasingly small handful of monopolies are getting fat while millions die of starvation. The “warring brothers” – the main imperialist blocs – are desperately struggling to redivide the world’s markets, resources and labour, and there is every possibility that the various local wars and ongoing trade wars will lead to another world war. The world has, thus far, been able to avoid an economic depression on the scale of the 1930s; however, the minutely thin threads holding together the international economy are under severe strain, and a full-scale crisis is not far off.
Start of a world economic crisis
The first few chapters of the book deal extensively with the crisis-bound international economy, which has been teetering on the brink of systemic collapse since the downfall of the Asian ‘tiger’ economies in 1997.
In the early nineties, bourgeois economists – still jubilant over the collapse of the Soviet Union and the eastern European people’s democracies – were loudly proclaiming that they had at last found the solution to the ills of capitalism, that the boom-and-bust cycle had been broken, and that we were entering an era of endless prosperity. Marx and Engels had finally been proven wrong, they said. “The end of history” had arrived, according to the arch-reactionary bourgeois political economist Francis Fukuyama; the ‘goldilocks’ economy had been discovered.
This euphoria was cruelly shattered by the collapse of the Southeast Asian ‘tiger’ economies, the ripples of which were felt throughout the world. Brar deals with the cause of the tigers’ crashes (essentially that their economies had grown very quickly (on the basis of massive borrowing), and the vastly expanded production was met with the brick wall of the limited consumptive power of the population) and relates it to Marxist economic theory, which long ago pointed out that economic crises are inevitable under capitalism. The problems faced by (primarily) south Korea, Singapore, Japan and Hong Kong were anticipated with eerie accuracy by Engels in Socialism: Utopian and Scientific, nearly 140 years ago:
“The enormous expansive force of modern industry … appears to us now as a necessity for expansion, both qualitative and quantitative, that laughs at all resistance. Such resistance is offered by consumption, by sales, by the markets for modern industry. But the capacity for extension, extensive and intensive, of markets is primarily governed by quite different laws that work much less energetically. The extension of the markets cannot keep pace with the extension of production. The collision becomes inevitable …
“In these crises, the contradiction between socialised production and capitalist appropriation ends in a violent explosion. The circulation of commodities is, for the time being, stopped. Money, the means of circulation, becomes a hindrance to circulation. All the laws of production and circulation are turned upside down … the mode of production is in rebellion against the mode of exchange.”
This boils down to the following: economic growth leads to high profits; high profits lead to increased competition; increased competition leads to a need to keep prices low in order to capture the market; keeping prices low means lowering wages and putting people out of work whilst simultaneously expanding production at an unsustainable rate in order achieve economies of scale; the result is a glut of products and a shortage of consumers for those products, that is, a crisis of overproduction. As Fourier put it, “poverty is born of superabundance” (Cited in Engels, Socialism: Utopian and Scientific)
Fallout from the Southeast Asian crash
Brar demonstrates that, although the US and Europe were, for a time, able to make a profit from the misery of Southeast Asia (western companies benefited to some degree from the westward flight of capital out of Asia, plus the IMF ‘rescue’ deal ensured that Asian markets were subjected to the onslaught of US products), the tiger crash set the alarm bells ringing in New York, London and Berlin – and for good reason. A chain of debt defaults would hit western banks soon enough.
The crisis did indeed jump continents in July 1998, when Russia was “propelled into the whirlpool of a crash thanks to the combined effects of the declining yen, a fall in the international oil price, fears of a Chinese devaluation and the soon-to-follow slide on Wall Street”. (p41)
The rouble lost 60 percent of its value in one week, and the Russian government imposed a 90-day moratorium on some foreign debt repayments. Brar cites a Sunday Times journalist, who commented: “In the bad old days when Russians were red – which may yet be remembered as the good old days – they used to preach that capitalism contained the seeds of its own destruction. Nobody predicted that the best way to bring about the downfall of the capitalist system might be for Russia to embrace it.” (‘Russia shakes the world once more’ by Mark Franchetti and Peter Millar, 30 August 1998, cited on p45)
The fallout from the crisis in Russia didn’t quite produce international systemic collapse, but it wasn’t far off. Western – in particular German – banks were hit hard, as were technology and telecommunications stocks. The result was a financial market plunge that threatened dire consequences.
With the outlets for productive investment drying up (as is inevitable under capitalism), the wealth of the imperialist countries had for a long time been sustained by extremely high share prices. Brar notes that, “since 1982, while the US economy has grown 2.5 times in nominal terms, the US equity market has risen by a factor of nine. Even bourgeois economists concede that share prices – and the corporate earnings which underpin them – cannot rise faster than the economy as a whole. The extent to which the equity market has been racing ahead of the real economy can be gauged from the fact that whereas in 1982 equity prices were equivalent to 25% of US GDP, in 1998 they were worth 115% of GDP – a level without precedent … The rise in share prices in the US created in just three and a half years $6,000 bn of extra wealth for US investors. In the US, 50 million households, by and large middle class, own shares – twice the number who did so in the 1980s.” (pp59-60)
Asset bubbles occur when the price of stocks and shares rises way above the value of the underlying assets. “The bubbles burst when some event scares the speculators away, creating a stampede towards other assets that likewise become overpriced, until another stampede leaves them in freefall.” (p10)
Precisely such a stampede occurred as a result of the Russian defaults. Only through a combination of interest rate manipulation, the inflow of foreign capital as a result of the tiger economies’ crashes, and an orgy of ‘consolidation’ in the form of mergers and acquisitions, was it possible for the western economies to avoid going under. Almost a decade later, they are still hanging by a thread.
Economic depression cannot be avoided
By virtue of an extraordinary display of economic gymnastics (not to mention a fair amount of plain old good luck), the western countries have thus far been able to avoid a serious economic collapse. The leading bourgeois economists are paid huge sums for their efforts to allay crisis, but the best anyone can do is to postpone the crisis, and each time the crisis is postponed its potential energy increases. The higher the financial bubble floats in the sky, the further it will have to fall when it does, inevitably, burst.
Brar writes: “Of course, the bourgeois economic gurus, the finance ministries of the main imperialist countries, and the institutions of world imperialism such as the IMF, are not lacking in prescriptions which they claim will cure capitalism’s ills, make it healthy and fit to continue forever. These prescriptions range from the requirements of disclosure and greater transparency on the part of the financial institutions to regulation, limits on borrowing (‘leveraging’), introduction of capital controls, better insolvency regimes, and improving ways of responding to crises. None of this tinkering, however, can get rid of the contradiction between the social productive forces and private appropriation – a contradiction which periodically reproduces crises of overproduction, with all the resultant destructive consequences.” (p77)
Interest rates have been kept uncommonly low in an effort to keep people borrowing and hence keep them spending. Indeed, it wouldn’t be an exaggeration to say that US paper wealth and the concomitant spending binge is keeping the world economy afloat. However, with the US domestic debt growing to monstrous proportions, this trend cannot continue for long. A consumer credit crunch is just around the corner. As the overproduction crisis continues to exert downward pressure on the economy as a whole, people will inevitably start to default on their repayments; when this happens, credit will start to dry up, which will lead to a general belt-tightening on the part of the consumer and thus a massive further contraction of the market. The housing market – which has been a major focus of investment since the stock market crashes of the late 1990s and early 2000s – is starting to show signs of slowing down. A housing crash may well lead to a banking crash, and that equals big trouble for capitalism.
As Engels wrote in Anti-Dühring: “Trade comes to a standstill, markets are glutted, products lie around in piles as massive as they are unsaleable, hard cash disappears, credit vanishes, factories are idle, the working masses lack the means of subsistence because they have produced too much of them, bankruptcy follows upon bankruptcy, forced sale upon forced sale. The stagnation lasts for years, and both productive forces and products are squandered and destroyed wholesale, until the accumulated masses of commodities are finally run down at a more or less considerable depreciation and until production and exchange gradually begin to move again. By degrees the pace quickens, it becomes a trot, the industrial trot passes into a gallop, and the gallop in turn passes into the unbridled onrush of a complete industrial, commercial, credit and speculative steeple chase, only to end up again, after the most breakneck jumps – in the ditch of a crash. And so on over and over again.”
The misery of the boom-and-bust cycle – the seeming insanity of the crisis of overproduction, a phenomenon completely unique to capitalism – is felt by all classes, but the worst hit is of course the working class. Economic crises are one of the principal drivers of the social revolution of the proletariat, and, for that reason above all, the capitalist class dearly wishes it could escape them. But capital has a force all of its own, uncontrollable by individual capitalists. There is no escaping economic crises. As long as competition exists; as long as the thirst for profit dominates society; as long as the laws of capitalist economics operate, crises remain inevitable.
From economic crisis to political crisis
Chapter 8 of the book, entitled ‘Imperialism – intensification of the struggle for a new re-division of the world’, details the ongoing struggle between the various imperialist blocs for control of the world’s territory, resources, markets and labour, which, with avenues for productive investment increasingly hard to find, is gaining pace. Brar writes: “[T]he world capitalist economy is headed for a descent into an economic depression of hitherto unknown proportions and a prolonged period of dangerous political convulsions, to the accompaniment of a most acute growth of inter-imperialist contradictions, leading to inter-imperialist conflicts of horrific proportions and bare-knuckle fights to corner the shrinking markets, sources of raw materials and avenues for investment and export of capital.” (p108)
In particular, Brar points to rising discontent with US political domination, which has reached extraordinary proportions. US military expenditure is greater than that of the next 14 highest-spending countries combined. The US has hundreds of military bases around the world. Its domination is vast and shameless. Brar cites Thomas Friedman, writing in the New York Times of 28 March 1999: “For globalisation to work, America can’t be afraid to act like the almighty superpower that it is. The hidden hand of the market will never work without a hidden fist. McDonald’s cannot flourish without McDonnell-Douglas, the designer of the F-15, and the hidden fist that keeps the world safe for silicon valley’s technology is called the United States Army, Air Force, Navy and Marine Corps.” (p174)
The US won effectively unquestioned leadership of the imperialist world in the aftermath of the second world war: “while Japan and Europe lay literally prostrate, with their economies ruined and industry devastated, the US emerged as the strongest imperialist power, accounting single-handedly for 45% of the global GDP. This, combined with the victories of the Red Army, the triumph of the Chinese Revolution, and the emergence of the socialist camp, put the fear of god into the hearts of the European and Japanese bourgeoisie and made them accept without questioning US leadership as the only way to avoid collapse and ward off the spectre of communism.” (p179)
However, the relative decline of the US economy and the demise of the Soviet Union and its allies have brought forth a realignment of forces. Europe and Japan are no longer willing to be dominated by the US, and the disagreements over the war in Iraq are certainly indicative of a growing resentment of the US’s hegemony. Modern Russia provides a crucial piece of the jigsaw, since, despite its relative economic weakness, it is still very much a military superpower, and would be a very important ally for any bloc challenging US dominance.
Brar points to the steps being taken to solidify the European Union as a superpower, one of the most important being the creation of a ‘Rapid Response Force’ (for which 60,000 troops have been available since January this year). Such a unified European military force would pose a strong challenge to the US’s activities in eastern Europe in particular.
There is no length to which capital will not go in order to reproduce itself. This much is easily proven by the genocidal war being waged in Iraq, the chief aim of which is the securing of Iraqi oil. As economic crisis bites, the violent desperation of imperialism will no doubt be expressed in even more futile and wasteful wars waged in a mad struggle for spheres of influence. Such is the outlook for the world as long as imperialism remains in charge.
Along with the vast expansion of poverty and war, another unfortunate result of economic crisis is the systematic destruction of the political rights of the working class, as the bourgeoisie’s hold on power becomes ever weaker. Drawing heavily on Rajani Palme Dutt’s Social Revolution and Fascism, Brar’s chapter on ‘Bourgeois democracy and fascism’ spells out the factors that have historically led to, or towards, the establishment of naked, terroristic bourgeois dictatorship, such as was established in Germany and Italy in the 1930s. They are:
1) economic depression;
2) social democracy becoming widely discredited and hence no longer being of use to the bourgeoisie;
3) the rising influence of communism.
Brar points out that the ground has historically been laid for fascism by social democracy – the representative of the bourgeoisie in the working-class movement. In power, social-democratic parties – acceptable to the bourgeoisie because of their policy and acceptable to the working class (under peaceful conditions, at least) because of their rhetoric – are able to strike at the political rights of the working class, often without the latter noticing until it’s too late. Brar writes: “In each case fascism is nurtured and helped to grow, in some countries to assume power, not against the wishes of the bourgeoisie and the state, but with their tender loving care and assistance. It develops through the forms of bourgeois democracy, through the systematic, methodical and step-by-step strengthening of the coercive state apparatus, the institution of emergency powers, and the restriction of the rights of the working class – this process being greatly accelerated by reformist and constitutional illusions engendered by Social Democracy, which paralyse the will of the working class to resist. When the ground has thus been fully prepared in the conditions of bourgeois democracy, and the workers’ movement disrupted and disorganised, only then is the final blow delivered by the bourgeoisie, with the establishment of fascist dictatorship.” (pp260-1)
The above words cannot but bring a shudder to the British worker, who will recognise the story of “the institution of emergency powers, and the restriction of the rights of the working class” taking place under the careful eye of the biggest British social-democratic party, the Labour party, to which the working-class movement has been bound for nearly a century. Trade-union leaders might (very) occasionally speak out against the growing encroachment on civil liberties and political rights, but it doesn’t occur to any of them to point out why these rights are being taken away at this moment in time. The fact is that the ruling class knows perfectly well that troubled times are knocking at the door. The ruling class is well aware that there will be a devastating drop in the living standards of the working class and the petty bourgeoisie, and that this will assuredly inspire the complete alienation of social democracy and a renewed movement for socialism. The state is busily preparing for this eventuality with ‘anti-terror’ legislation and an onslaught of xenophobic propaganda.
Some may think that there could never be fascism in Britain, so inconsistent is terrorist dictatorship with the tea-and-tweed image of the British ruling class. Brar points out that the genocidal actions of the British state across the world certainly qualify it for implementing naked class dictatorship at home. Furthermore, the British ruling class has a history of supporting fascism in Europe – it was only in the face of a threat to its own empire that it was dragged into the second world war.
Brar cites Winston Churchill himself in an address to the fascists of Rome in January 1927: “If I had been an Italian, I am sure I would have been entirely with you from the beginning to the end of your victorious struggle against the bestial appetites and passions of Leninism.” (pp258-9)
Mussolini and Hitler won wide admiration from the bourgeois statesmen of the world on account of their implacable hostility to communism.
There is no question that the British ruling class will resort to fascism if it feels that is what is required for the suppression of revolution. It is an urgent task of the British working class to fight against the steps that are being taken in this direction. “In view of the fact that the conditions for the institution of fascism are created by the ruling class within the shell of bourgeois ‘democracy’, the fight against fascism cannot be waged by the working class putting its trust in bourgeois ‘democracy’ as a defence against fascism. This fight can only successfully be waged by a united and determined working class against all the attacks of finance capital in the economic and political field – against anti-trade union laws and wage cuts; against the so-called anti-terrorism legislation; against racist immigration and asylum laws which are solely aimed at sowing divisions in the working class by shifting the blame for the ills of capitalism on to the backs of the unfortunate victims of imperialist plunder, brigandage and war; against restrictions on the right to free speech and assembly, and so on and so forth.” (p262)
Eve of revolution
Addressing the Communist International in 1926, Joseph Stalin said: “What would happen if capital succeeded in smashing the Republic of Soviets? There would set in an era of the blackest reaction in all the capitalist and colonial countries. The working class and the oppressed peoples would be seized by the throat; the positions of international communism will be lost.” With hindsight, we must say that Stalin was a thousand times right. Since the collapse of the USSR (the road for which was paved by the onslaught of Khrushchevite revisionism), the working class and oppressed masses worldwide have been in a state of recoil from which they are only just starting to emerge. Imperialism scored a huge, albeit temporary, victory against the working class and the other opponents of imperialism. Veritably we have witnessed “an era of the blackest reaction in all the capitalist and colonial countries”, characterised by the disorganisation of the working class, complete ideological confusion in the working-class movement, brazen attacks by capital on the living standards of the workers, and a new round of devastating neo-colonial wars.
However, any victory of capitalism in the modern era can only be temporary. The current state of affairs in the world in unsustainable. The misery to which the masses are being subjected cannot but produce a massive wave of anti-imperialist action that will surely accelerate the collapse of this moribund system. Brar reproduces a huge array of statistics demonstrating the insufferable poverty in which billions of humans are living, in spite of the tremendous technical and natural resources available to mankind. For example, 1.2 billion people lack access to safe drinking water; meanwhile, $13bn (a fraction of what’s been spent on the war against Iraq) would provide the entire population of the ‘developing world’ with basic healthcare and nutrition. The AIDS epidemic shows no signs of slowing down, and has resulted in a precipitous fall in life expectancy in Africa. The amount spent by the oppressed countries in debt repayments is several times the amount they receive in direct aid. Indeed, third-world debt has risen over 30-fold since 1971 (it now stands at over two trillion dollars). Thirteen million children per year are dying from preventable diseases.
The fate of the populations of the USSR and the former people’s democracies of eastern Europe is described vividly by Brar: “Take the former USSR: production, as well as per capita income, has more than halved; there has been a precipitous fall in living standards; male life expectancy fell by a spectacular six years (from 64 to 58) between 1990 and 1994; a free health service, the education system, with its proliferation of crèches, kindergartens and holiday camps, which were a source of legitimate pride to the Soviet people, have all but disappeared. From being the second largest, the Russian economy has been reduced to the size of the economy of the tiny Netherlands; unemployment, which had not been seen in the USSR since 1932, is rampant, with an estimated 40 million unemployed in the territory of the former USSR. The wealth produced by the honest toil of the Soviet working class has been stolen by a handful of kleptocrats and mafiosi, while the mass of people are reduced to penury; fraternal harmony and friendship have given way to fratricidal warfare; prostitution, alcoholism, drug abuse and drug trafficking, organised and violent street crime, homelessness, and such other concomitants of the 'free market' have assumed epidemic proportions. In summary, a once great and mighty socialist USSR has been reduced to a third-rate capitalist country, burdened with a foreign debt to the tune of nearly $200 billion, on the one hand, and bleeding white through capital flight of approximately $300 billion over the last 10 years, on the other hand.” (pp168-9)
Even in the imperialist countries, the working class – for so long protected by imperialist superprofits – is starting to feel the pinch. Privatisation, liberalisation, political repression and an end to the welfare state: this is what the future holds for the working class in the imperialist countries. Brar cites the following statistics demonstrating the declining living standards of the working class in the imperialist countries: 40 million US citizens have no health insurance; 20 percent of US adults are functionally illiterate; 10 percent of US households are deemed “food insecure” ; 12 million people in Britain live in “relative poverty”. “For the first time since the end of the war, vast layers of the working class are being sucked into the abyss of absolute poverty, hopelessness, misery and despair. The evils of capitalism, and the need for socialism, have never been so obvious.” (p305).
As Lenin pointed out, “Only a proletarian socialist revolution can lead humanity out of the deadlock created by imperialism and imperialist wars. No matter what difficulties the revolution may encounter, and in spite of temporary setbacks or waves of counterrevolution, the final victory of the proletariat is inevitable.” (‘Materials relating to the revision of the party programme’, 1917)
Despite the countless attempts of bourgeois academia to defeat Marxism, it refuses to lie down. In spite of the huge reverses that have been suffered as a result of the treachery of Khrushchevite revisionism, Marxism-Leninism remains the guiding light of the advanced workers around the world. And until capitalism can learn to live without a working class (and it cannot!), Marxism-Leninism will live. A new wave of anti-imperialism is emerging on all corners of the planet. Only the principles of communism can give focus to this activism; only socialist revolution can save humanity from the senseless destruction of modern capitalism. The bourgeoisie is shouting itself hoarse telling the working class that it is defeated; we must prove the bourgeoisie wrong. “The chief endeavour of the bourgeoisie of all countries and of its hangers-on is to kill in the working class faith in its own strength, faith in the possibility and the inevitability of its victory and thus to perpetuate capitalist slavery.” (Stalin, Report to 18th Congress of the CPSU(B) , 1939)
All comrades are urged to obtain a copy of this new book and study it seriously, as it confers an understanding of modern society that is utterly essential and which is not easily stumbled upon. The book is in many ways alarming, in that it prepares the reader for extremely difficult times ahead, but ultimately it is encouraging in its confident re-assertion of Lenin’s dictum that “imperialism is the eve of the social revolution of the proletariat” and that the madness of imperialism will, sooner or later, give way to socialist revolution and the start of a new life.