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 The dominant theme in world politics in 2011 is the generalised crisis of world capitalism. The economic crisis has contributed to two major developments: first, the deepening of the crises of US and EU imperialism, processes that were already under way even before the collapse of Lehman Brothers; and, second, the intensification of class struggle and popular resistance both in the imperialist core and the countries of the Middle East and North Africa.
In relation to the first, the economic crisis has only accelerated the reordering of the world system, with the US suffering and China rising from the margins of the system to its centre. In relation to the second, the economic crisis has both encouraged the ruling classes of the world to ratchet up their attacks on workers and the poor and sparked off the most impressive mass resistance since the mid-1970s.
In the Middle East, North Africa and Southern Europe ruling class attacks and repression have met with mass action ranging from huge strikes, street demonstration and university occupations to revolutions which have toppled longstanding dictatorships. There are limits to the weakening of US imperialism and also to the popular resistance, and it is certainly too early to predict that the working class upsurge of the past 12-18 months will be sustained, broadened and generalised, but regardless, the crisis is shaking up the world system and class relations in ways not seen for many years.
Contending imperialist projects for the 21st century
It is worth contrasting the fortunes of the dominant imperialist powers now with their plans ten years ago at the time of the 9/11 attacks. In 2001, although in a brief but deep recession, the United States had begun to recover from the nadir of its fortunes in the 1970s when a combination of military defeat and economic crisis had severely shaken ruling class confidence. Twenty years of attacks on the working class and serious restructuring of its industrial base had done much to revive the rate of profit by the end of the century.
Under the Clinton administrations of 1993-2000, the budget had been put back into surplus. US corporations were at the forefront of some of the key global industries, including aerospace, IT and financial services, and were benefiting from the emergence of China as the new manufacturing workshop of the world, putting downward pressure on US wages and providing a platform to offshore some elements of US manufacturing industry. US capitalism survived the dot com crash of 2000, just as it had survived the effects of the earlier Asian economic crisis of 1997-98, because the Fed injected liquidity and pushed interest rates down to rock bottom lows. These were enough to end the recession by 2002 and started a debt-fuelled housing boom which had both speculative and real components to it.
The US ruling class was helped considerably by the prevailing state of defeatism amongst the working class. Unions suffered severe setbacks in key battles in the Mid-West in the mid-1990s and the Los Angeles rebellion of 1992 turned out to be a false dawn in relation to a fight-back amongst African Americans. There were a few bright spots, such as the 1997 victory at UPS and the Seattle protest against the WTO in 1999, but these were the exception. Taken as a whole, the retreat of the US labour movement, which had begun in the latter half of the 1970s, only got worse in the 1990s and the capitalists were for the most part able to ride roughshod over the unions.
Although the US began to rack up big trade deficits in the late 1990s, largely as a result of its decision to open its markets to Asian economies recovering from the crisis of 1997-98, this did not precipitate a balance of payments or foreign exchange crisis as its creditors were happy to hold US dollars. And while the 1990s had been a period of recovery for US capitalism, they were a decade of stagnation for its feared competitor of the 1980s, Japan, which having already experienced one lost decade was about to undergo another. On the global stage, the rules of the world economy were written in the United States - the “Washington Consensus” - which was enforced through US-dominated organisations such as the World Trade Organisation and World Bank.
Militarily, the US reigned supreme in 2001. It was the world hegemon, the USSR having collapsed ten years previously. In the absence of competition from Russia, the US successfully incorporated former Russian allies into NATO. It spent as much on arms as the rest of the world added together and its domestic IT industry gave it a technological edge in weapons systems. The US had also begun to overcome the “Vietnam Syndrome” through a series of “humanitarian” interventions, most notably in Bosnia and Kosovo, and many former liberal opponents of war were now fervent supporters of US adventures.
And although the US had lost one or two allies such as Indonesia’s President Suharto, their replacements were as enthusiastically pro US. In the cockpit of world imperialist competition, the Middle East, Iraq had been neutralised as a threat to US interests following its defeat in the 1991 Gulf War followed by a decade of sanctions and the imposition of a no-fly zone backed by the UN. The US could count on loyal allies in Saudi Arabia and the Gulf States, Jordan, Israel, Turkey and Egypt. The “Arab street” appeared quiescent. In Europe, the US could rely on the Blair government to promote US influence in the EU.
In a situation where the US had managed to establish some breathing space in its competition with its rivals old and new, the 9/11 attacks were a perfect opportunity for the Bush administration to use its military edge to press home its advantage. The “War on Terror” and the fight against the “Axis of Evil” were meant to give the US the chance to assert its power against the European Union and, with a view to the future, China, in the one area which was crucial to their fortunes – Central Asia and the Middle East. Control the oil, and the US could control its rivals. A new era of US domination beckoned. The War on Terror was also used with ruthless effect domestically, justifying the massive expansion of the repressive apparatus and whipping up a tide of Islamaphobia to sow division and fear within the US working class. The global justice movement kicked off by Seattle pretty much collapsed as soon as the planes hit the Twin Towers, as it was incapable of withstanding the right wing ideological onslaught that followed.
The revival of US imperialism was a challenge to the EU which, after gaining ground on the US in the 1980s, fell back in the 1990s into what right wing commentators called “Eurosclerosis”. This consisted of slow economic growth and low productivity compared to the United States and a high cost structure compared to China and other emerging industrial economies. European governments attributed Eurosclerosis to excessive business regulation, welfare spending and union power. They looked with envy at the US free market system and were determined to emulate it. Militarily, the unfolding crisis in Yugoslavia had shown the disarray in their ranks and their continued reliance on the United States for leadership when faced with an emergency on their own doorstep. Their favoured solution to their woes was a widening and deepening of the European Union, a process which had been foreshadowed in the 1993 Maastricht Treaty but which had been held back by internal bickering in the intervening years.
Deepening European integration involved a much more rapid implementation of neoliberal economic measures to hasten cross border concentration and centralisation of capital and to reduce working class living standards. The establishment of the European Central Bank in 1998 and the introduction of the euro in 1999 were two important components of this process. To meet the strict financial criteria associated with euro membership, national governments, both social democratic and conservative, embarked on wholesale attacks on wages, welfare rights and trade unionism, with the German SPD’s Agenda 2010 the most important.
Forcing through the EU neoliberal agenda required greater political centralisation and curtailment of democratic accountability; hence the 2001 Treaty of Nice and the move in 2004 towards adoption of an EU Constitution. Widening the EU meant incorporation of many former Soviet bloc states, accomplished in 2004 with the incorporation of 10 new member states, most led by enthusiastic neoliberal pro-Western governments. Germany and France drove the agenda, both being keen for greater European integration. German capital in particular believed that it could use what was for it a relatively weak euro (and wage cuts at home) to penetrate weaker southern and eastern European economies and to establish new markets and investment opportunities for the big German companies.
From dreams to reality
These, then, were the rival agendas of the two dominant imperialist blocs at the time of the 9/11 attacks. Today, these imperialist hopes and dreams lie in tatters thanks mainly to the economic crisis. The US ruling class is tearing itself apart over its enormous $14 trillion government debt and has suffered the humiliation of seeing Treasury bonds downgraded by Standard and Poor’s. Over the summer, the unthinkable, US Government default, was only one day away from being realised and the statistics bureau released revised figures demonstrating that the modest recovery in 2010 had been mostly a statistical phantom and that the meagre growth that had occurred had now ground to a halt.
The financial system, courtesy of trillions of dollars of government and central bank injections of funds and guarantees, is flush with money but refuses to lend to productive business. Bank balance sheets are still weighed down with toxic assets – paper assets based on a housing market that is still in the doldrums (tens of millions of Americans are suffering negative equity in their homes). The bosses have used the crisis to slash jobs and conditions and this has boosted profits by 40 per cent and the stock market by 80 per cent since the nadir of the GFC in early 2009, but the attacks on the working class have come with a cost – with 25 million either unemployed or underemployed, with tens of millions of Americans suffering wage cuts, and with median household income down 10 per cent on 2001, consumer markets are flat.
Economic crisis is also responsible for the rapid drop in credibility of the Obama administration, elected with support from the African-American community, white workers and Wall Street alike. From the perspective of the American working class, the Obama administration has continued the same agenda as George W. Bush, shovelling money to the rich, stealing from the poor. Unemployment is stuck above 9 per cent and amongst African American youth aged 16-24 at 31 per cent, but Obama has done nothing to tackle unemployment. His proposed American Jobs Act is little more than trickle-down economics, offering concessions to business, paid for by cuts in spending on social programs, in the faint hope that the bosses take on more workers.
The majority of Americans disapprove of Obama’s job performance, especially on issues related to the economy. Obama has failed to deliver for the unions as well, scuttling his promised Employee Free Choice Act. He has continued to waste working class lives and taxes on overseas wars. American socialist Mike Davis argues that “Obama, who was elected to bring the troops home, close the gulags and restore the Bill of Rights, has in fact become the chief curator of the Bush legacy”. There are tentative signs that the US working class is beginning to resist, most obviously in Wisconsin in April but more recently at Verizon, on the Seattle waterfront and in the Californian health care system, but it is still too early to tell if this will be sustained and broaden into a movement that can begin to end the process of working class retreat.
If Obama is increasingly mistrusted by the US working class, he has also lost the early support that he enjoyed from Wall Street, as he is held responsible for both too much (healthcare reform) and too little (failure to get the US economy moving again). The economic crisis destroyed the Bush presidency and has the clear potential to destroy Obama’s too.
The crisis has also had an impact on America’s standing abroad. Its financial and economic system, far from being regarded as a wonder of the world, is now widely seen by rival capitalist states as a criminal and irresponsible enterprise. Economic stagnation has allowed China to begin to catch up with and challenge the US. While Bush’s 2002 National Security Strategy spoke of China as a “strategic competitor”, any actual threat from China was thought to be 20 years or more away. Instead, China became a major irritant even before the decade was out, challenging US export markets around the world and increasingly confronting US military and diplomatic influence.[1]
This year marked China’s “arrival” as a new world power with two key episodes. One was the news that it was preparing for the launch of its first aircraft carrier and the introduction of ballistic missiles capable of threatening the US Pacific fleet. The other was its lecture to the American government following the downgrading of US debt on 5 August. The Chinese Government chastised the US for its financial irresponsibility and instructed it to cut social security, wind back its military spending and stop destroying the world financial system through successive rounds of printing money.
That the Chinese felt sufficiently confident to lecture the US in this way tells us that the tables have well and truly turned – no longer can the US deliver sermons to the rest of the world on the need to adopt US-style neoliberal policies. The Guardian’s Larry Elliott records that “Whatever it means for financial markets this week, 5 August 2011 will be remembered as the day when US hegemony was lost”.[2] Although, as we shall see, this obituary is probably premature, there is little doubt that it is a marker in the process of American decline.
If the economic crisis is the main factor undermining US imperialism, it is not faring well militarily either. Quick early successes In Iraq and Afghanistan have given way to frustration. In Iraq several of the major parties owe their loyalty more to Iran than the US, and in Afghanistan, where there are now more US troops than at any time in Bush’s presidency, the occupation is hindered by an increasingly unreliable Karzai and an ongoing offensive by the Taliban which continues to penetrate US defences and grind down the US army. Relations with Pakistan go from bad to worse.
The US is in no position to occupy any other countries, and its 2001 threat to take out the “Axis of Evil” now looks laughable. The US could not even successfully defend its proxy government in Georgia in the Caucasus after it egged it on to invade the Russian-speaking autonomous enclave of South Ossetia in the summer of 2008. The US was forced to look on helplessly as, within a matter of five days, the Russian army crossed the Georgian border, chased the Georgians out of South Ossetia, occupied Georgian cities and began to threaten the capital of Tbilisi. This was a major setback for US power in the region.
Russia, like China, has taken advantage of US travails, re-equipping its armed forces, pushing back against NATO in Eastern Europe and successfully forcing the US to suspend its missile defence shield in Poland and the Czech Republic in 2009. Russia and China have struck up closer economic and diplomatic relations as part of the Shanghai Cooperation Group, together with a number of energy-rich Central Asian republics, thereby making China less dependent on the Middle East, and thus the US, for its energy needs.
The failed attempt to boost the fortunes of US imperialism by military means has intersected with the economic crisis. Ten years of military expansionism have had a serious impact on the US budget, with trillions of dollars spent on war and occupation, undermining the ability of the federal government to fix up its creaking domestic infrastructure, whose deficiencies were so starkly revealed when Hurricane Katrina struck New Orleans in 2005. While China is spending hundreds of billions of dollars on new airports, railway lines, docks and highways, furthering its ability to compete on a world scale, the US is undertaking massive cuts to spending on basic infrastructure, undermining its long term economic competitiveness.
The Arab Spring, itself at least partly the product of the impoverishment of the Arab masses at the hands of neoliberalism, has dealt the US another severe blow. It has unseated loyal pro US dictators and shaken key US allies. The failure of the US to protect Mubarak in particular spoke volumes about the limits of US power in the region and stunned Israel, Saudi Arabia and the Gulf states.
It is unlikely that any new regime in Egypt will be hostile to the United States, but to the extent that it will be subject to more democratic pressure from below, it will not be quite as craven as Mubarak in its support for US interests in the region. This has already been demonstrated by its opening of the Rafah Crossing to Gaza and its limits on gas sales to Israel. The US attempt to roll back the Arab revolutionary wave with its intervention in Libya in April has had mixed results. With Gaddafi gone and the National Transitional Council (NTC) in power, it is an open question whether the US and the NTC will get their own way. Some rebels are saying they will not accept the authority of the NTC and the West may well not find the country as pliable as they hope. The future of the Libyan revolution is quite open.[3]
The Arab Spring has also done tremendous damage to the ideological narrative constructed by the US – that the Arab world was faced with a choice between pro-Western, neoliberal autocrats or radical Islamism. The Arab Spring has instead presented a democratic alternative. It has shown the Arab masses that mass working class and popular mobilisation can win gains on economic and political fronts. This emboldening of the Arab masses is the most significant gain of the revolts.
In Egypt, in particular, the overthrow of the dictator has been followed by waves of strikes and the formation of independent trade unions. At every moment that SCAF or some arm of the counter-revolution appears to have been successful in rolling back the revolutionary momentum, the Egyptian working class answers with a fresh wave of struggle. Little wonder, then, that the US is reluctant to take serious action against the Assad regime in Syria which, as one of the chief sponsors of Hezbollah, is nominally an enemy of Washington. The US fears that the revolutionary overthrow of the Syrian government would destabilise Israel while bringing the winds of change one country closer to its key assets - Saudi Arabia and the Gulf states. As it is, even six months into their struggle and after close to 3,000 deaths at the hands of Assad, the Syrian revolutionaries press on and most reject any notion of foreign intervention.
The economic crisis is limiting the options of the US in the Arab world as it is severely restricting its ability to stabilise the dictatorships with generous infusions of cash which could be used to buy off discontent. Very little of the funds that were promised to the governments of Egypt and Tunisia by the EU and US in the aftermath of the revolutions in January and February have actually been delivered. The US simply cannot afford a Middle Eastern Marshall Plan such as it used to head off a wave of radicalism in Western Europe after World War II when it was at the peak of its power.
The weakening of Israel is the final piece in the story of a damaged United States. Israel’s position was undermined in 2006 when it was forced out of Southern Lebanon by a Hezbollah-organised mass uprising. Its attack on Gaza in December 2008 and the raid on the Mavi Marmara in May 2010 were meant to re-establish its military credibility. While these were undeniable military successes, they were highly damaging to Israel’s reputation and by extension that of the US which gave cover for these atrocities. In 2011, Israel has been further hit by the Egyptian revolution, not just by measures imposed by the military junta but, more importantly, by the shutting down of its embassy by mass protests - little could Israel or the US have dreamt at the start of 2011 that within 9 months the Israeli ambassador and his staff would be forced to flee by a crowd of thousands besieging the Cairo embassy.
The two allies have also been hit by the repositioning of Turkey in recent years. With its attempt to position itself as a more influential political and economic power in the Arab world, further stoked by its rage at the killing of its citizens on board the Mavi Marmara, the Ankara government is no longer a staunch ally of the US and Israel. This became alarmingly clear in September when Turkey kicked out the Israeli ambassador in protest at his government’s refusal to apologise for the killing of Turkish citizens on the Gaza flotilla. Turkey is also deploying its navy to hamper Israeli and Cypriot efforts to extract gas in the Eastern Mediterranean. Israel has rarely been so exposed in its immediate neighbourhood.
In sum, in stark contrast to the hyperbole of the neo-cons ten years ago, the 21st century is most certainly not going to be “America’s Century”. Instead, the economic crisis, military setbacks and popular resistance have challenged its power from both within and without.
The EU in a mess
If the economic crisis has dealt a blow to US imperialism, its impact on the EU has been, if anything, even more severe. The entire project of European economic integration, the prerequisite of the EU advancing its power on the world stage, is now in question as a result of the crisis. While in 2008, the EU economies appeared to be collateral damage of the toxic US banking system going into meltdown, in 2011 it is EU public debt and austerity measures launched by the EU governments that are destabilising the world economy. Insofar as it was incurred in trying to save the European financial system at the height of the GFC (along with the collapse of tax receipts and the increase in social spending as unemployment soared in early 2009), European public debt has been both the product of the original GFC and has also contributed to its extension into 2011.
The illusions of European integration and “harmonisation” have been thoroughly exposed by the economic crisis. The crisis has demonstrated that when their interests are threatened, the big powers will crush the small. Greece, Ireland and Portugal have all been forced into austerity budgets at the point of a gun held at their heads by their stronger European “partners” acting on behalf of their banks which hold hundreds of billions of euros in PIIGS bonds and loans. Greece is now effectively under German, French and US administration.
The austerity measures are doing nothing to solve the European economic crisis but are only prolonging it by destroying spending power. Sections of financial capital associated with the bond market are using their dominant position within the ranks of the capitalist class as a whole to impose solutions which save their hides, even if this be at the expense of companies selling goods and services who are suffering from poor retail spending. But all sections of capital benefit from the general lowering of working class living standards, directly boosting profits and positioning them to fight for markets internationally at the expense of their rivals.
Precisely because the austerity measures are only driving the PIIGS economies backwards, they have only put back the day of reckoning. The EU/IMF bailouts may have prevented defaults in 2010 and the first half of 2011 but they have only made default more likely in the coming period, starting with Greece but potentially involving countries as large as Italy and Spain. With default will come the potential for an unravelling of the euro.
The debt crisis has created both opportunities and dangers for the ruling classes of Europe. Opportunities, in giving them the political opportunity to attack welfare states at home. Dangers, in that the attempt by each national government to avoid bearing the cost of default and financial collapse has led to bitter acrimony between them and a souring of the whole EU project. In an attempt to press-gang Germany into making ongoing transfers to the weaker European states, thereby forestalling default or exits from the euro, EU President Barroso is demanding that EU members pool their resources and create a fiscal union, complete with euro bonds, in a radical extension of European integration.
The German government, facing increasing hostility to further bailouts by German capitalists, rejects this proposal out of hand. Ruling class hostility in Germany to open-ended bailouts has been registered by the German Constitutional Court which ruled in September that the federal government could not participate in an ongoing system of fiscal transfers to debtor states. And in the same month, the ECB’s chief economist, Jürgen Stark, quit in disgust at the decision by the Bank to pile up more Italian and Spanish debt.
The German ruling class supported the establishment of the euro and the ECB only on the grounds that it would be a redoubt of Teutonic monetary orthodoxy. With this now abandoned, German scepticism towards the EU is rapidly escalating. This spells big trouble for the EU for without Germany picking up the tab, the entire project of integration will become increasingly likely to fail. In these circumstances, the prospect of EU member states agreeing to quadruple the financial rescue package from €440 billion to €2 trillion, a proposal circulating around EU capitals in late September, is very slim.
Mass resistance to the EU neoliberal agenda has been the other major factor bringing it undone. The first major setback was the defeat in 2005 of the proposed EU Constitution at the hands of big “no” votes in referenda in France and Holland, followed in 2008 by Ireland. Millions of European voters understood that the EU project involved not just further limiting democratic accountability of governing institutions but also the further “marketisation” of the national economies.
Since the turn to much more drastic austerity measures in May 2010 popular hostility to neoliberalism has only grown as workers and youth have gone to the streets in huge numbers. General strikes have raged across Southern Europe on virtually a monthly basis. While the North African revolutionaries were inspired by developments in Southern Europe in 2010, during the summer of 2011 Tahrir Square crossed the Mediterranean, as hundreds of thousands of mostly young people in Spain, Portugal, and Greece demonstrated and occupied central city squares in protest at cuts to education, social services and the prospect of a lifetime of shoddy jobs on low pay.
Austerity measures are only feeding into a widespread sentiment of disgust with the entire political establishment which is revealed every time a key piece of the neoliberal agenda is put to the popular vote. In June, 95 per cent of Italians registered their opposition to privatisation of water and the introduction of nuclear energy in a big national referendum. The same proportion voted to lift the legal immunity enjoyed by President Berlusconi. Earlier in the year two successive referendums in Iceland returned big majorities voting strongly against government efforts to force Icelanders to pay the bill for bailing out the banks in 2008
Even in Britain, where austerity measures are only just beginning to kick in, mass protests have rippled across the country, starting with the biggest student protests since 1968 in late 2010, followed by the half-million strong TUC march in London in March and the big public sector strike in June. Plans are afoot for another national strike and demonstration on 30 November with 11 unions balloting for action. The riots in early August were another manifestation of disenchantment with the political system. The banking crisis of 2008 and huge bailouts that followed, the parliamentary expenses scandal in 2009 and then the phone hacking scandal have all contributed to a widespread sense that the British establishment is rotten from top to bottom. Draconian sentences imposed on young people following the riots will only add to the bitterness that many working class communities feel towards a system that rewards the real criminals while penalising the poor.
Electoral backlashes have been the other face of resistance to the neoliberal attacks in Europe, hurting governments whether of the reformist left or the right. In Ireland, the Fianna Fail Government was smashed to bits at the February elections. In Britain, the Liberal Democrats suffered humiliating losses in council elections in in May. In Germany Angela Merkel’s CDU has been hurt by several defeats in regional elections, recording historic low votes, and in Portugal the Socialist Party government was thrashed at national elections in June. In France, President Sarkozy will be hard pressed to win re-election in 2012, in Italy disgust with Berlusconi’s corrupt business and political links is profound and in Spain it is likely that the incumbent Socialist Government will be trounced by the conservative Popular Party at November’s elections. PASOK will most likely lose office to New Democracy in Greece when elections are called any time before 2013.
Both the US and the EU, therefore, are in the midst of serious economic and political crises. This necessarily has an effect on relations between them, and with the emerging economic powers, China in particular. After early attempts at concerted action at the height of the GFC, it’s now a case of every country for itself and devil take the hindmost. Currency wars, incipient protectionism, rows over rescue packages and quantitative easing are all manifestations of attempts by national governments to get out of the crisis with least damage and to impose as much as they can on their rivals. The G20 came into its own during the GFC, replacing the G7 in one indication of the changing balance of power, but today its summits, along with those of the EU, are exercises in futility as each country scolds another for its role in undermining the world economy and nothing is resolved that is capable of ending the crisis.
It is important, then, to understand that although the focus of this document has been on the two major imperialist blocs, the current period is a generalised crisis of world capitalism. China and Russia may have advanced their position relative to the US, but neither can escape indefinitely the systemic crisis of world capitalism. Their vulnerability to the broader world economy was demonstrated in late 2008 and early 2009 when their growth rates fell sharply, tens of thousands of factories shut down and unemployment soared. As it is, China is already experiencing a surge of struggle by workers, peasants and national minorities even with growth running at nearly 10 per cent because of dissatisfaction with rampant corruption, theft of land and soaring inequality. In Russia there are still many workers and small farmers who are worse off than they were in the 1980s and the population has fallen by a staggering six million in just 15 years due to a sharp decline in the birth rate and a spike in the death rate. A significant economic slowdown would only amplify social tensions inside both countries.
Countervailing factors
The picture of the world system at the end of 2011 would not be complete without also registering some limits to the collapse of US credibility and the potential for a working class breakthrough against austerity and repression. The first countervailing factor is that, regardless of its many weaknesses, the US is still what President Clinton’s former Secretary of State Madeleine Albright called the “indispensable nation” in terms of the world imperialist set-up. This is demonstrated vividly by the fact that the bigger the US government debt and the more discredited the US banking system, the more money floods into US Treasury bonds in the “flight to security” – the threat of the US actually defaulting is regarded by markets as nil.
While China and other big “surplus” countries are seeking to diversify their foreign exchange holdings, the US dollar is still under no immediate threat as the world reserve currency. To the extent that Chinese central bank is shifting its holdings, it is now looking at buying US equities – it wants shares in Boeing, Microsoft and so forth. This may be a long term threat to US interests as key components of its military-industrial complex fall into the hands of its rival, and it is on this basis that this possibility is raising hackles in the US, but it is also an indicator that the Chinese ruling class has faith in the future of US capitalism, or at least that some belief it will be the last boat to go down in a financial collapse.
If the US still stands at the centre of the world’s financial system, it is also dominant militarily. It is substantially ahead of China in both spending and technological capability. China does not yet even approach the military capacity in the 1970s of the USSR relative to the USA.
Further, all of the US’s rivals need it to stay strong. China will not pull out of US bonds overnight, not just because it does not want to see the dollar value of its US assets slump, and not just because such a step would lead to a sharp rise in the yuan and thus a sudden drop in its export competitiveness, but because US financial and military power underpins the entire world system from which China benefits. If the US turned inwards economically or slashed public spending by 30 or 40 per cent – which would be required if China pulled out of the US bond market - every major imperialist power would suffer from the impact on world trade and investment. If the US suffered a major military defeat in Central Asia and the Middle East, this would undermine the geostrategic “stability” that enables both the EU and China to continue to extract resources from the region reliably and cheaply.
While the US may be in trouble in both Iraq and Afghanistan it has not suffered a defeat of Vietnam proportions and it has used the War on Terror to extend Special Operations force deployments to 75 countries, up from 60 countries at the end of the Bush presidency.[4] And even if Egypt and Turkey can no longer be taken for granted, Saudi Arabia and the Gulf States remain key anchors of US power in the Middle East, keen partners in its counter-revolutionary strategy and at present under no significant internal threat. In terms of its sheer weight in the world system and its capacity to project its power globally, the US is still unmatched. This explains why China is not willing to engage in any provocative action towards the US for the time being, whether around Taiwan or by backing US enemies in Central Asia, the Middle East or Latin America.
If continuing, albeit diminished, US power is one factor giving the US and the broader Western-dominated imperialist set-up some room to manoeuvre, the second is the political weaknesses of the resistance to austerity, dictatorship and war. The genuine left is far too small to play a leadership role for the millions who have been drawn into struggle. In Egypt the left played an important role in the 25 January revolution and is active today in the strike movement and on the campuses but is still far smaller than the Islamists and the liberals and there are no signs that it is growing quickly. The left will have to undertake some years of patient work in the trade unions before it can make a qualitative breakthrough. And yet it is in Egypt (along with Tunisia) that the left and the workers movement are most advanced; nowhere else in the Arab world has the workers movement played an important role in the uprisings and this is reducing the chances of any further significant advances. Without workers moving decisively into action, the dictatorships can eventually bash the movements into submission if they hold their nerve.
In Europe and the US, the weakness of the radical left is also an important limiting factor. The legacy of Stalinism and betrayals by reformist parties means that young activists in the city square occupations are not attracted to the socialist left for the most part, and there is a strong current of spontaneism and hostility to the organised left, even towards the trade union movement as a whole. In the trade unions themselves, there are some cases, such as Greece, where the union bureaucrats have been forced to call action by pressure from below[5] but in others, such as Britain and the US, the bureaucrats have been under no serious pressure from below. And in all cases, once involved the bureaucrats have tried to contain the movement to set-piece actions rather than building into a serious movement of strikes that could bring the government down.
There has not yet been a fundamental breakthrough in Europe such as we have seen in Egypt. Rather, the struggle is undergoing waves of advance and then retreat without a smashing victory: after facing 13 general strikes, the Greek government was still able to pass yet another austerity budget in late September. In the US, the labour movement is still very weak and for every Wisconsin there have been a dozen more states where savage attacks have been passed without significant resistance.
The failure of the left to grow more than very modestly in any region relates, as already mentioned, to the failure and betrayals by the social democrats and Stalinists but also to the fact that there is no significant voice anywhere in the world projecting a systemic alternative to capitalism. Before they capitulated in 1914, the parties of the Second International were at least rhetorically committed to socialism and built mass memberships on this basis. The Stalinists in the middle of the 20th century could point to the USSR or China as “actually existing socialism”. Today, there is no sense that a complete break with capitalism is possible. The anti-capitalist movement of the early 2000s was politically heterogeneous and so riddled with political confusions that it could not withstand the right wing offensive associated with the War on Terror. The much vaunted Latin American “Pink Tide”, on which so many on the left had rested their hopes in the early to mid-2000s, has turned out to be rather less antagonistic to capitalism than the left hoped for and the US had feared.
Splits in reformist forces and fusions with remnants of the old left helped build organisations such as Rifondazione and Die Linke which have attained electoral breakthroughs in several countries. However, in doing so they have usually succumbed to the blandishments of office and rotten blocs with right wing reformists. And the working class upsurge of 2010-11 is far too new and too modest in size in the core regions of northern Europe and North America to create an ideological climate that systematically challenges the decades of anti-Marxist, anti working class political fads that have dominated “progressive” political circles since the end of the last working class upsurge of the 1970s. The result is that political fatalism – the belief that the best we can hope for is a slightly nicer capitalism – is widespread, even amongst those involved in mass protests and occupations. This ideological myopia is a crucial prop for the capitalist system as it limits the potential for the far left to grow and to build a base in the working class.
In the absence of an active, vibrant and growing left, the right has been able to build support in places on the basis of anti-immigrant, anti Roma and anti-Muslim racism. The British Tories, the French Gaullists and the German CDU have all denounced multiculturalism and taken up (or accelerated) migrant bashing in the past year, while Italy’s President Berlusconi has deported thousands of Roma. We have also seen the formation or rapid growth of newer organisations, whether the semi-respectable (the Tea Party, the UK Independence Party) or the fascist or semi-fascist (Jobbik in Hungary; Geert Wilders in Holland, the BNP etc.). In many countries such parties now regularly register 20 per cent or more of the vote. The only small consolation was the setback suffered by the BNP in council elections in Britain in May. In Northern Europe conservative governments have also been able to shore up support for themselves by attacking the “mendicant” PIIGS, trying with some success to divert hatred of themselves to the workers and governments of the Mediterranean countries.
Conclusion
The economic crisis has led to a fundamental weakening of the two major imperialist blocs. It has undermined the confidence and internal cohesion of the ruling classes and has done much to discredit them in the eyes of hundreds of millions of workers and the poor. And while US imperialism and its allies retain several advantages which means that they are certainly not about to collapse from their own internal contradictions or opposition from below, 2011 made obvious two main facts: that the economic crisis is not going away and that the working class has the capacity to resist and rebel.
The stakes in the international class struggle have been raised. The working class goes into combat seriously weakened by several decades of retreat, if not outright defeat. But the victories of the Egyptian masses, the stubborn persistence of the Syrian revolutionaries, and the ongoing struggles in Southern Europe and China suggest that a whole new historical period of crisis and resistance has opened up with all the opportunities (and dangers) that this will entail. The question to which we do not yet know the answer is whether a genuine left will be able to build a leadership in the workers’ movement that the new period demands and which will be essential to take advantage of the opportunities that have now opened up.
[1] For more on US-China relations, see Tom Bramble, “Australian imperialism and the rise of China”, Marxist Left Review, 3, 2011.
[2] Larry Elliott, “Global financial crisis: five key stages 2007-2011”, The Guardian, 8 August 2011.
[3] “A thoroughgoing popular revolution”, http://www.www.socialistworker.org/2011/09/20/a-popular-revolution, 20 September 2011.
[4] Anthony Arnove, “The ‘War of Terror’ Decade”, ZNet, 13 September 2011.
[5] “Greece: Austerity and workers’ resistance”, Interview with Nikos Loudos, Socialist Review (London), July-August 2011.
By Tom Bramble First published at www.sa.org.au |
