Socialist Action’s World Resolution: A Contribution to a Discussion – Ex-USSR & China

Ex-USSR & China

The road to capitalist restoration in the degenerating workers’ states of Europe and Asia is more difficult than anyone expected. The world’s capitalists acknowledge that these states have a long way to go before their economies are truly market-driven; that is, capitalist.

While they have all made varying degrees of “progress” toward privatization, the productive forces of these societies remain essentially stagnant, and in most cases-except for a narrow layer of entrepreneurs, bureaucrats, and petty bourgeoisie-mass living standards have gone into serious decline.

Even where there has been an expansion in certain sectors of these economies, it tends to be restricted to the commercial and financial areas of the economy and to light fabricating industry.

Heavy industry, however, remains resistant to privatization since to meet competition in the world market, modernization would be indispensable. But modernizing the ancient Soviet-style industrial dinosaurs would be hopelessly expensive.

Imperialism seeks to dismantle basic industry in these countries. Privatizing and modernizing them could not be justified in today’s shrinking and highly competitive world market. And even if they were to build new, state-of-the-art steel, auto, and other basic industrial plants, all too few of the dismissed workers in the plants shut down would be re-employed, since today’s computerized industrial plants require only a fraction of the former work force.

Making bad things worse, profits from the still essentially state-owned heavy industries end up in the foreign bank accounts of the growing class of entrepreneurs, metamorphosing bureaucrats, and imperialist capitalists.

But the lion’s share of the loot goes into the accounts of their imperialist partners. Little, if any, of these ill-gotten gains is reinvested in development of industry, which is the only real source of industrial development and thus a base for more adequately meeting the needs of the masses.

Meanwhile, when industrial workers actually receive paychecks, their wages tend to be below the level of those earned by their counterparts in the so-called developing countries of Southeast Asia, not to mention the advanced countries of Western Europe, Japan, and the United States.

Moreover, the competitive pricing of exported commodities produced in the degenerating workers’ states is in effect subsidized by the state for the benefit of bureaucrats and indigenous and foreign capitalists.

Ironically, it is the remaining social conquests of these societies that is the source of this subsidization. That is, such benefits as very low-cost housing and utilities, free health care, cheap transit-and even payment-in-kind, in lieu of wages-are hidden costs of production not added to the prices of goods sold on the world market!

Agriculture in degenerating workers states

The agricultural sectors in these countries continue to operate essentially on the basis of state-owned collective farms.

Agriculture in these countries has proven to be even more resistant to privatization than industry has-since even with tractors, small family-operated plots of land would be far less efficient than the giant mechanized collective farms.

Moreover, small privately-owned family farms would quickly be forced into bankruptcy if land was reverted to a commodity to be mortgaged, bought and sold.

And if modern capitalist-style, large-scale factory farms were to begin gobbling up displaced family farmers, mass unemployment would take a quantum leap. We would then see millions of what were relatively well-off collective farm workers (that’s what they still are in the former Soviet bloc countries) falling into the kind of mass impoverishment we see today in China.

Even so, despite the survival of collective agriculture, much of its surplus product winds up, one way or another, in the hands of bureaucrats and other parasites. These products are also sold on the world market below the cost of production.

Thus, the socio-economic conquests of these anti-capitalist revolutions also serve to subsidize agricultural exports, enabling them to be priced competitively on the world market.

The former Soviet bloc is being transformed, economically and socially, into dependent countries. Thus, were the restorationists to succeed in making the transition to market-driven economies, they would become semi-colonies under the thumb of imperialist capital- not advanced capitalist societies.




Ever since the collapse of Stalinism and the disintegration of the Soviet Union, the capitalist world has been in an euphoric state. But like everything in this world, appearances are often deceiving.

Now it is beginning to dawn on American and world imperialism that rather than expanding its world markets, the Stalinist bureaucracies’ attempts to reintroduce market-driven economic systems have, on balance, contributed-directly and indirectly-to the intrinsic tendency of the capitalist world market to shrink.

The euphoria that followed imperialism’s Cold War victory has already turned into its opposite.

First, the collapse of the Soviet Union and the end of the Cold War unleashed pent-up sharpened competition among the world’s capitalists for a larger share of a shrinking world market.

And second, the transformation from a planned economy to a market-driven economic system has been running into increasing resistance from the remaining anti-capitalist institutions of the degenerating workers’ states, as well as from the rising resistance of the industrial and agricultural working class to their collapsing living standards.

While China’s trend toward capitalist restoration has been proceeding apace and (unlike Russia) its economy has been undergoing expansion, its development is highly distorted and subject to sudden contraction such as is happening in Southeast Asia and Japan.

Moreover, like the countries of the former Soviet bloc, China’s development is chiefly in commerce and commercial construction, development of up-to-date systems of communication, the extraction and export of raw materials and energy, the expansion of light industrial production, and the construction of supermarkets, boutiques, and luxury shopping malls for the old and new elite and the newly created middle classes.

But in exchange for China’s dubious opening to capitalist penetration, its basic industrial infrastructure-such as steel, electrical, auto, truck, tractor, and metal fabrication plants-is being strangled and starved for the capital needed to merely maintain its obsolete industrial infrastructure.

(Modernization of these industries is out of the question. That would only further glut the world marketplace. Therefore, world capitalism won’t allow its capital to be used for that purpose.)

Without modernization of its industrial foundation, China and the other degenerating workers states can only become semi-colonial societies economically subordinate to the imperialist world.

Meanwhile, scores of millions of China’s workers formerly employed in massive state-owned industries and many more millions of rural farm workers and peasants are being dumped from factories and collective farms into the streets, and from the countryside into the cities, to vainly search for jobs that are not there and which are not about to be created.

But in China, as in all these degenerating workers states, the state-owned industrial infrastructure, although being steadily eroded, remains as a stubborn obstacle to capitalist development of the productive forces in these countries-a development, which at this moment in the evolution of world capitalist imperialism, is impossible!

China’s transition to capitalism too slow for U.S.

President Clinton went to China at the end of June 1998 to lay down his conditions for China’s entry into the World Trade Organization. The Clinton Administration has been demanding that China more speedily remove any and all barriers to American capitalist investment in the Chinese economy.

Current American imperialist demands boil down to two: First; a more rapid dismantling of its state-owned basic industry. And second; China must end its still largely intact central state control over foreign and domestic imports as well as over American and world imperialist investment inside China.

While the Stalinist government is prepared to gradually meet these demands, Clinton desperately wants it to go a whole lot faster-and, to be sure, with first place in line reserved for corporate America in the projected imperialist takeover of the lion’s share of the Chinese economy.

(That’s what all the hypocritical baloney in the capitalist media monopoly about America’s demands for “an end to human rights violations in China” is all about. American imperialism is only too well known to be a violator of human rights in Vietnam, Cuba, and Iraq, to name only three of all too many victimized nations, for any serious person to take seriously their “defense” of human rights in China.)

(American capitalism is also well known as the chief defender of the world’s worst and bloodiest violators of human rights from Israel, to Africa, to Asia, to the Americas, and finally in the homeland of the American imperialist beast, as well.)

And to top off the precarious position of the Chinese ruling group, they are observing with great trepidation the collapsing economies of Asia. They see falling currency values and cheaper exports from Japan and the Pacific rim countries destabilizing the entire world marketplace and undercutting their own exports.

(China’s threat to devalue its own currency forced the United States and Japan to support the yen, at least until after Clinton’s trip to China.)

Moreover, China’s government views with grave forebodings how imperialism through its international trade and lending institutions imposes “austerity” on the world’s dependent countries.

It saw how the International Monetary Fund recklessly forced Indonesia to impose draconian austerity measures on the great majority of the country’s workers, peasants and lower middle classes. It saw how that led to a degree of “social unrest” that forced the abdication of the murderously repressive Suharto dictatorship.

And finally, China’s ruling group knows that the “social unrest” in Indonesia has merely paused, so that the masses, after having gained a measure of freedom, can appraise the new situation. Another, more massive uprising is sure to come when it becomes clear that the “new” government cannot and will not end their suffering.

Thus, much as it would like to come to terms, the Chinese Stalinist restorationist regime is deathly afraid of casting too many more tens of millions out from their jobs too soon. They are fully aware that what the capitalist media prefers to call “social unrest” is simmering and is building up pressure under the lid of their own brutally repressive regime.

The June 21, 1998, edition of The New York Times lays out the thinking of America’s ruling class:

China is not ready to make the economic changes necessary to join the World Trade Organization. Though membership in the global trade body has been a political goal of China’s leaders.

Some ministries and industries in what remains a largely state-run, bureaucratic economy have worried about the rapid exposure of ailing domestic industries to foreign competition, and an end to the monopoly positions of state-run commodity traders2 as well as banks, insurance companies, and other service sectors.

An earlier report in that newspaper’s June 17 edition covering the impact of Japan’s falling currency-which makes its exports cheaper, hurting Chinese exports-reports that “slowing growth [of China’s economy], means mushrooming unemployment, and with it, the possibility of social unrest.”

This voice of American capitalism complains that a “key difference between China and most other Asian countries is that its currency is not fully convertible and is therefore not vulnerable to speculative attacks.”3

Consequently, whether or not China’s currency is devalued does not depend on speculators, but on a decision by its government. Therefore, China has leverage on its side as well, and Clinton must make concessions too.

Thus, it was reported that Clinton must try to convince China during his visit to “resist temptations to devalue its currency.”

The June 24, 1998, Times quotes C. Fred Bergsten, president of the Institute for International Economics as warning: “China’s got to hold the fort; if not, if the strong center [holding back global monetary chaos] buckles, all hell breaks loose.”

We can be sure that China’s remaining control over its currency, as well as its economy as a whole, and ultimately its political control of all its internal affairs, will either give way to the demands of imperialism, or to the revolutionary demands of Chinese workers and farmers.

Combined revolution in degenerating workers’ states

Whatever “progress” toward capitalism has been made, the coming global economic crisis will wreck these hybrid societies. The state-owned industries and collective farms would be least affected by the crisis and would be far better able to maintain production-thereby showing their inherent superiority over capitalist production.

Bureaucratic management and its aristocracy, already so highly discredited, would begin to fall of its own weight and thus be relatively easily toppled. Stolen state property will tend to invite its re-expropriation by the suffering rural and industrial workers.

A bailout of these economies is beyond the means of the capitalist world even now. And in the context of a global capitalist collapse, an imperialist bailout of these or any other states is unthinkable.

The only force capable of blocking a combined revolution against the hybrid regimes of double-breasted bureaucrat-capitalists and those originating from the educated petty bourgeoisie would be the armies of imperialism.

But the necessary extent of counter-revolutionary imperialist armies of intervention would be on a scale difficult to imagine-orders of magnitude greater than was required in Vietnam and other colonial countries or in the former Yugoslavia.

Nonetheless, as indicated earlier, world imperialism’s extension of NATO deep into the former Soviet bloc bordering on Russia is designed to have its military forces on the ready to suppress the inevitable rise of a combined social and political revolution.

But American and European military forces attempting to reestablish any semblance of order in insurgent, formerly Soviet bloc countries would be faced by a potentially revolutionary force of awesome proportions. Moreover, the mere dispatching of troops to suppress revolutionary uprisings would in the first instance evoke a virtual global anti-interventionist movement, perhaps even before any shooting would begin.

And to carry the logic of Permanent Revolution to its ultimate conclusion, NATO armies might ultimately be sent to suppress insurgencies in the home countries of world imperialism.

Fraternization between revolutionary workers and invading troops would be difficult to prevent throughout the imperialist world since the language and cultural barriers are far lower than in Asia and Africa, not to mention the revolutionary impact of the social instinct of class solidarity.

The future of world capitalism, in the final analysis, looks no less bleak in the imperialist heartland than it does in eastern Europe, Asia, and Africa. It’s only a matter of time before the developing crisis breaks out of control.

But without solving the crisis of proletarian leadership, the most ideal revolutionary opportunities will be missed. And if that happens, history will enter a dreadful period of capitalist barbarism, if it is not burnt to nuclear cinders or destroyed by radioactive fallout.

But there is another road that history can take: The road of world socialist revolution.

The Fourth International was founded in 1938 by Leon Trotsky to carry out the struggle begun by Karl Marx and Frederick Engels nearly a century earlier to construct the world party of socialist revolution. Its founding programmatic document, “The Transitional Program for World Socialist Revolution,” laid out the dynamic between the objective and subjective factors required for socialist revolution. This was succinctly summed up in the “Transitional Program’s” opening sentences:

The world political situation as a whole is chiefly characterized by a historical crisis of the leadership of the proletariat.

The economic prerequisite for the proletarian revolution has already in general achieved the highest point of fruition that can be reached under capitalism. Mankind’s productive forces stagnate. Already new inventions and improvements fail to raise the level of material wealth.

Conjunctural crises under the conditions of the social crisis of the whole capitalist system afflict ever heavier deprivations and sufferings upon the masses. Growing unemployment, in its turn, deepens the financial crisis of the state and undermines the unstable monetary systems. Democratic regimes, as well as fascist, stagger on from one bankruptcy to another.

Without a mass world revolutionary workers’ party, socialist revolution and its full flowering is impossible. Only the world party of socialist revolution can save the human race.


1 See Walnut publisher’s pamphlet of Castro’s March 26, 1962 speech, “Fidel Castro Denounces Bureaucracy and Sectarianism.”

2 “State-run commodity traders,” refers to one of the remaining, although attenuated, conquests of their socialist revolution-a state monopoly over foreign trade.

This represents another of the remaining conquests of their anti-capitalist revolution.

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