The socialist answer to capitalist crisis

We present below the first of a series of resolutions on key issues in U.S. and world politics that were approved by the elected delegates to the 15th National Convention of Socialist Action, held in Minneapolis last Aug. 16-19. Socialist Action is the fraternal U.S. section of the Fourth International, founded by Leon Trotsky and his collaborators in 1938.

The National Convention was preceded by a lively three-month internal discussion period, in which Socialist Action members in branches and at-large members in some 25 cities engaged in written and oral discussion and debate. Some 120 written contributions were offered for membership consideration. International guests from Fourth International groups and friends attended from Greece, Ireland, and Canada.

We begin this first installment of a multi-part series with Part I of an edited version of the approved Draft Political Resolution (DPR), the document that represents Socialist Action’s assessment of the decisive international and national developments upon which the party’s politics and practice are based. The remaining sections of the DPR dealing with additional key national and international developments will be published in separate installments.

In coming issues we will reprint major excerpts from a number of the adopted resolutions dealing with the U.S. antiwar movement, the ecological crisis, women’s liberation, LGBT freedom, and Socialist Action’s views on current debates in the Fourth International. Space considerations require that each resolution be abridged. Those interested in receiving the full text should email


The Draft Political Resolutions adopted by Socialist Action’s 2008 and 2010 National Conventions explained at length the underlying causes of the worldwide capitalist economic crisis, now in its fourth year. The documents outlined several causal factors, including the long-term decline in the average rate of profit and the associated crisis of overproduction, the intensification of international competition, the financialization of capital and the associated bursting of the speculative bubbles, and the de-industrialization of the major capitalist countries.

These factors compelled world capitalism to attempt to resolve its inherent contradictions at the expense of the world’s working class and with total disregard of the consequences of the blows inflicted on the earth’s physical environment.

We cited numerous indices demonstrating the growing and increasingly unpayable debt of the major capitalist powers, enormous deficit budgets, deepening across-the-board austerity measures, continued weakening of the dollar as the only world currency, the ongoing shift in industrial production from the “central” imperialist nations to the low-wage “periphery,” mounting unemployment, stagnant or regressive GDP “growth,” and more. These dilemmas continue to plague the world capitalist system, with no exceptions.

And these, in turn, give rise to increased imperialist rivalry; militarization of all the major powers; never-ending wars; and the re-colonization of continents in the Middle East, Africa, and beyond. They also lie at the root of government and corporate efforts to provide a worldwide, mobile, near slave-labor or super-exploited “migrant work force” at the service of world capitalism. In order to achieve this, we see government-promoted scapegoating—the “war on terror,” anti-immigrant prejudice, sexism, homophobia, racism, Islamophobia, broad-ranging attacks on civil liberties, and unprecedented and massive global attacks on women.

There are no exceptions to the horrors underway today. Germany, the most economically powerful European nation, has experienced a steady decline in wages. The U.S. debt, $16 trillion, for the first time exceeds the GDP. China’s double-digit growth rate—which lasted many years—has today declined to some 5 percent, while the real U.S. growth rate over the past four years has been close to zero.

The rise in the GDP of the BRICS nations—Brazil, Russia, India, China and South Africa—masks the impoverishment of the great majority of the populations of all these countries. That is, the capitalist-created small layer of “middle class” or higher-paid worker/consumers, usually in the range of 10-15 percent, promoted to create the semblance of an internal market, has been more than offset by the immiserization of the vast majority.

China’s new generation of  “middle-class” consumers, touted by the bourgeois press, is countered by hundreds of millions pressed into a government-controlled transient internal migrant workforce, with virtually no rights. Eighty percent of Beijing’s industrial workers, for example, are migrants, mostly young women from the countryside, who labor at sub-minimum wages aimed at satisfying the competitive needs of Chinese and world capitalism. Half of China’s multi-national corporations are U.S.-owned.

The recent exposure of Apple Computer’s super-profits from the exploitation of Chinese workers, on a scale unimagined in the past, shocked more than a few. Apple’s China-based IPhone and IPad factories, employing some 1.2 million workers, were recently exposed as classic super-low-wage sweatshops, with workers forced to labor endless hours on demand under unsafe conditions, including breathing in poisonous chemicals.

Apple is a perfect example of what world capitalism has in store for all workers in poor countries, not to mention the United States. It has amassed the largest cash reserves in the world—some $100 billion—and plans to keep the great majority of it abroad until the U.S. Congress “decides” to change U.S. tax laws to allow Apple to repatriate its blood money under conditions as close as possible to tax free. Apple’s policy is matched by virtually every U.S. multi-national, not to mention the ever-declining number of powerful U.S. corporations that have absorbed their weaker competitors in the ongoing process of the concentration of capital. All pay less and less taxes, if any, while the burden is ever more shifted to a working class less and less able to pay.

We live in a time of great contradictions. The hammer blows struck against workers everywhere have not yet been matched by an equivalent working-class response. Working people increasingly understand from direct experience that they are the victims of a failing system. Yet they retain illusions, in decreasing but still significant numbers, that the system will, as before, turn around eventually and restore much of what has been lost.

Serious and massive mobilizations have been on the order of the day in some nations, but they have been far from adequate to reverse the unrelenting capitalist austerity drive.

Greece is Europe’s future

In attempting to understand the effects of the capitalist economic crisis on the world’s working class, it is useful to look at the dire situation that confronts the Greek masses. Greece, as with all the weaker industrialized capitalist nations—including Portugal, Spain, Ireland, and now Italy—lacks the imperial resources to effectively compete on world markets. This said, the same observation holds for the rest of Europe and indeed the entire world. Never-ending capitalist competition—driven by generalized declining profit rates, shrinking markets, and scarcity of raw materials—drives all to seek solutions against the others, with the first victims being the weak nations of the underdeveloped world, followed by all the others.

The Greek ruling class has imposed an austerity program that has cut deeper into the standard of living of working people than anywhere in Europe, although as the Greek Fourth International comrades aptly note, “Greece is Europe’s future.” Some estimates put the decline, including massive cuts in social services, a series of new and heinous taxes, and wage cuts, all in a myriad of forms, at close to 40 percent.

This has generated some 17 general strikes since the crisis began some four years ago. However, from the vantage point of the world’s ruling classes, there is no room for any concessions to workers. Few, if any, have been recorded despite unprecedented massive mobilizations. The need to impose even greater cuts at every level of the economy is capitalism’s prime directive and only solution.

Most of the Greek general strikes were pro-forma, merely for the record, but they nevertheless resulted in massive outpourings with huge popular support. They were organized by a trade-union bureaucracy whose intentions were qualitatively more to release pent-up working-class anger and to pose as defenders of workers’ interests than to mount serious efforts to compel a ruling-class retreat. This parasitic layer’s worldview accepts capitalist rule without question; their vision is limited to making the existing capitalist system work.

Greece’s future, as with all other nations, lies not with a pro-capitalist variant of social reform, however left sounding, but rather in a challenge to the capitalist system itself. This requires the building of a Leninist revolutionary socialist party in Greece and everywhere else, as well as mass independent and class-struggle working-class formations.

The various “anti-capitalist parties” and “left fronts” that have emerged in Europe reflect the view that new vaguely defined political formations can become mass organizing vehicles as “left” alternatives to the increasingly bourgeois social democratic parties. Socialist Action strongly disagrees with any policy of subordinating the building of Leninist parties, with explicit revolutionary socialist programs, to politically indistinct “anti-capitalist” formations. We discuss these questionable assumptions in various resolutions that Socialist Action has submitted in our fraternal capacity to the Fourth International.

Can China save the world?

By all accounts China’s capitalist economy, inevitably subject to the same contradictions as all the others, is in decline. Chinese imports in April 2012, for example, rose just 0.3 percent as compared to 11 percent for the same period last year.

China’s export power, the result of low-wage labor and increasingly high technology, the motor forces of its economy, grew 4.9 percent in April, half of the April growth rate the previous year. Other indices demonstrate the same regression. The almost 50 percent reduction in China’s GDP growth, if continued, can have drastic consequences for Chinese and multi-national corporations. That China’s capitalist economy could continue to prosper in the context of a world economy in crisis is problematic at best.

China’s advance, to be sure, has nothing to do with any special Chinese variant of capitalist production, other than its super-low-wage and benefit levels and horrific working conditions, including excessive hours worked under hazardous health and safety conditions. These, of course, are key factors that attract the advanced capitalist world’s investment.

It is increasingly obvious to workers everywhere that the only way for capitalists to compete on world markets is to adopt the Chinese “model.” In the U.S. this means the classic race to the bottom—the off-shoring of jobs and the use of low-wage immigrant and near slave-wage prison labor.

Changing face of world working class

The de-industrialization of the major capitalist nations has become a permanent feature of capitalist development. Even the most powerful economies are compelled to take all measures required to maintain competitiveness in increasingly saturated world markets. Germany, Europe’s strongest economy, has lost 20 percent of its factory jobs from 1991 to 2007. That equals the percentage of manufacturing jobs lost in the U.S. Japan, the manufacturing behemoth of the 1980s, lost 30 percent during the same period. In the U.S., job losses, mostly in better-paid manufacturing industries have exceeded one million per year since 2007.

Workers nevertheless retain enormous power in the major sectors of the economy and can still—if the leadership, will, and unity of purpose are present—shut down their entire country and pose the question of power.

The ruling rich are not lacking in the crudest schemes to lower production costs in the U.S. as well, including the criminalization of a generation of youth, the majority Black and Latino. Virtually every comparison between Blacks and Latinos on the one hand and whites on the other demonstrates that the gap is widening, with unemployment rates among oppressed nationalities close to double the rate of whites. In some predominantly Black and/or Latino cities the unemployment approaches 50 percent.

A corrupt and racist criminal “justice” system, combined with some of the most racist legislation on the books—“stop and frisk” and “three strikes”—helps fill increasingly privatized “for profit” U.S. jails to capacity. Here the ruling rich have found a way to secure triple profits—new prison construction, government payments for prisoner “maintenance” and a near slave-labor wage system (averaging 50 cents per hour nationally).

Today’s prisoners are “employed” by Fortune 500 corporations to produce state of the art commodities for the world market, and now in the agricultural sector in some cases replacing undocumented immigrants at even lower wages!

The U.S. incarcerates the largest number and percentage of its population in the world; 7.1 million are under the jurisdiction of the prison industrial complex. These include workers on probation. Some 3.5 million are in prison today and 3500 are on death row; in both cases, the majority are Black, Latino, and Native American. The nation with the highest GDP and the greatest wealth incarcerates and executes the greatest numbers!

Similarly, women are increasingly victimized as super-exploited workers or as sex slaves around the world. The proletarianization of labor in poor nations in this modern era takes on the most despicable forms, reminiscent of capitalism’s earliest periods when it came into being, as Marx explains, “dripping with blood.”   (To be continued)

 Photo: Tony Savino / Socialist Action

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