Is Marxism Relevant today

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CAPITALIST CRISIS MAKES SOCIALISM NECESSARY

Statement on the 20th Anniversary of the Fall of the Berlin Wall
By Prof. Jose Maria Sison
Chairperson, International Coordinating Committee
International League of Peoples' Struggle
9 November 2009

Since the fall of the Berlin wall on 9 November 1989, the world capitalist system has sunk deeper into crisis. It is now undergoing its most severe crisis since the Great Depression of the 1930s, with some commentators calling the present crisis “the Greater Depression” in terms of its effects on the jobs and livelihood of the workers and peoples of the world.

After emerging as the world’s sole superpower in the wake of the collapse of the former Soviet Union, the US itself is wracked by a severe crisis and is further plunging the world with it. The imperialists and its propagandists perorate on how value and value-creation in the economies of the socialist states and then the modern revisionist regimes were distorted by the state bureaucracy.

Now all the countries of the world in varying degrees are reeling from a crisis driven by unbridled private greed under the slogan of “free market globalization” involving the fantastic accumulation of immense wealth by the financial oligarchy and monopoly capitalists through unrelenting super-exploitation of the working people, financial manipulation and the berserk generation of fictitious capital.

Since the fall of the Berlin Wall, the social conditions of the workers and peoples of Eastern Europe and the former Soviet Union have plummeted under the conditions of unbridled capitalist exploitation, oppression and violence. Poverty levels have risen due to massive unemployment and depressed incomes. Inflation has been cutting down the value of wages, pensions and savings.

State investment in production and job creation has been significantly reduced. Public allotment to education and other social services has plummeted. The educated have difficulties finding work and illiteracy is spreading. The workers’ and peoples’ health have taken a beating, causing severe malnutrition, stunting growth among the youth and shortening the average life span of people.

The number of children living in the streets and left to fend for themselves in these very cold countries has multiplied. The suicide rate has grown among them by significant percentages. The situation of the street children and society at large is being further aggravated by the current financial and economic crisis.

The anger and discontent of the workers and peoples of Eastern Europe and the former Soviet Union are becoming manifest in different ways. Parties of the Left are becoming popular and are gaining strength in national elections. The workers and people are speaking out against the accelerated escalation of exploitation, oppression and violence of the big bourgeoisie.

Survey after survey shows that the people feel they are plunging deeper into poverty and that they are increasingly disillusioned and angry with capitalism and its unfulfilled promises. With the onslaught of the current economic and financial crisis, there is rising interest in and study of Marxist and progressive writings. The imperialists and the local ruling classes are responding to this by deflecting the workers and peoples from the class struggle and anti-imperialist solidarity by promoting divisions and hatred based on chauvinism, racism, ethnocentrism and religious bigotry.

The Comecon is gone. But all the former revisionist-ruled countries are now in the tight grip of the US-controlled world capitalist system and are caught up in the turmoil of the gravest economic crisis since the Great Depression. The crisis is whipping up fascism and aggressive wars. The room for inter-imperialist competition has become more cramped and more intense, with Russia and China joining in as big power players.

The Warsaw Pact is gone. But the NATO has been expanded as to include the former revisionist-ruled countries in Eastern Europe, reaching the borders of Russia. Most of the former revisionist-ruled countries are potential hotbeds of fascist repression and aggressive wars as already indicated by the violent disintegration of Yugoslavia by a series of wars instigated by the imperialists and by wars involving Chechnya and Georgia. Mercenary forces from the former revisionist-ruled countries have been deployed by the NATO to distant lands like Iraq and Afghanistan.

The crisis of monopoly capitalism has brought ever-greater suffering among the workers and peoples of the world. The imperialist-controlled multilateral agencies underestimate world hunger when they report that only 1 billion people go hungry out of the more than six billion human population. They say that this is the largest number of people going hungry in history, and the same number of people suffer from malnutrition.

This situation is bound to get worse, as world economic output is predicted to decrease this year, the first time since World War II. The contraction of employment is estimated to last for another eight years. The number of people living on less than $2 per day will increase by hundreds of millions. Decreasing demand for consumer goods, semi-manufactures and raw materials impacts heavily on millions of workers and peasants in neocolonial economies.

The workers and peoples of the world are waging various legal and illegal forms of organized action to protest the anti-people policies of imperialism. International gatherings of the monopoly capitalists, the finance oligarchy, and heads of imperialist states have become occasions for mass protests by indignant workers and peoples in the meeting areas and in various countries. Countries assertive of national independence are exposing and lambasting the dictates and impositions of imperialism.

Armed revolutions for national liberation and democracy are continuing and gaining strength in the Philippines, Colombia, India, Peru and Turkey. The people of Iraq and Afghanistan are waging armed resistance against the occupation and colonization of their countries by the US. The armed forms of struggle are bound to grow in strength and advance as a result of the intensification of the crisis of monopoly capitalism.

Since the fall of the Berlin Wall, the workers and peoples of Eastern Europe, the former Soviet Union and the world have undergone ever worsening economic and social conditions. They see monopoly capitalism as an evil and bankrupt system that is destroying the world’s productive forces and is inflicting immense suffering on the people.

Monopoly capitalism is igniting the people’s desire for socialism. So long as imperialist oppression and exploitation persist, the people fight for national and social liberation. It is farthest from the truth that monopoly capitalism is the end of history. The utter bankruptcy of monopoly capitalism and its descent to ever more barbarous forms of plunder and aggression drive the people to fight for their rights and for a bright socialist future.

The workers and peoples of the world are called upon to persevere in the struggle for genuine socialism, against monopoly capitalism that is now in the throes of its worst crisis since the Great Depression of the 1930s. The crisis of the world capitalist system makes socialism necessary for humankind.

Contrary to the claims of the imperialists and their propagandists that socialism fell in 1989, the fall of the Berlin Wall has actually meant the collapse of the modern revisionist regimes in the former Soviet Union and Eastern Europe and the completion of the restoration of capitalism. It is the end result of the revisionist betrayal of socialism started by Khruschov in 1956 and completed by Gorbachov in the years of 1989-91.

The history of socialist countries from the Bolshevik victory of 1917 up to 1956, and from the founding of the People’s Republic of China up to 1976 shows great leaps in the advancement of the social, economic, political, cultural and defense situations of the workers and peoples of those countries. The poverty, hunger, joblessness, and the cruelties of exploitation and oppression before the victory of the socialist revolution were overcome. The great victories in socialist construction and revolution were achieved despite imperialist wars of aggression and economic and military blockades and subversion.

The rise of modern revisionism in socialist countries and elsewhere reversed all the great achievements of socialism. Advances in the situation of the workers and peoples were slowly but surely eroded, and pre-revolutionary forms of exploitation, oppression and violence were restored. Together with criminal syndicates in the so-called free market, the modern revisionist big bourgeoisie grew fat on bureaucratic corruption and enjoyed the lifestyles of the rich and famous, while the workers and peoples suffered from the decrease in food, jobs, savings and social services.



As workers and peoples grew restive and began clamoring for reforms, the ruling revisionist regimes imposed severe political repression. In Eastern Europe, and in East Germany especially, this condition fueled the mass protests that brought about the fall of the Berlin Wall in 1989. The revisionist regimes in Eastern Europe and the former Soviet Union peacefully gave up power and gave way to the legalization of their bureaucratic loot, the barefaced restoration of capitalism and the blatant privatization of state assets.

Since Nikita Khrushchov’s reign in the Soviet Union, genuine proletarian revolutionaries the world over have called the ruling regimes in the Soviet Union and its satellite states in Eastern Europe as modern revisionists, who mouth socialism but practice capitalism. They have predicted that it will not take long before capitalism reveals itself bare-faced in these countries.

The fall of the Wall has shown how accurate their predictions are. The modern revisionists in these countries have since exposed themselves as pseudo-communists and anti-communists. It is modern revisionism, not socialism, which fell with the Berlin Wall and delivered the workers and peoples of the former Soviet Union and Eastern Europe into the even more predatory and violent rule of barefaced capitalism. The revisionists had earlier undermined, eroded and destroyed socialism.

Since 1989 up to the present, imperialism and its well-paid propagandists in the mass media and academe have tirelessly repeated their line on the fall of the Berlin Wall. They have misrepresented the revisionist regimes as socialist and boasted that their fall meant the futility of socialism and the end of history with capitalism and liberal democracy.

They have touted the jump from the frying pan of revisionist-ruled state monopoly capitalism to the flames of barefaced capitalism as the beginning of development and democracy. But the imperialist powers are incomparable in discrediting monopoly capitalism through their unbridled plunder and wars of aggression and the recurrent and increasingly severe crisis.

The workers and peoples of the world are subjected to ever-increasing exploitation, oppression and violence and are impelled to wage resistance, seek national and social liberation and aim for the attainment of socialism. The present crisis, which has been generated by the US-directed policy of neoliberal “globalization” in the last three decades, incites the people to struggle for socialism.

The world capitalist system continues to sink deeper into crisis. It is devastating jobs and livelihood of the workers and peoples of the world. The profuse use of public funds to bail out the big banks and corporations in the military industrial complex is building bigger bubbles than ever before. These are bound to burst and cause a steeper fall in the crisis.

The US and its imperialist allies have generated the global financial and economic crisis, have plunged the world into a state of economic depression and have aggravated and deepened the conditions for state terrorism and aggressive wars.


The combination of state monopoly capitalism and monopoly capitalism in imperialist countries is responsible for the unprecedentedly greatest devastation of productive forces through the most rapacious forms of private profit-taking and private accumulation, including the wanton creation of fictitious capital.

We are in the era of modern imperialism and proletarian revolution. Further economic crisis, social disorder, state terrorism and imperialist wars of aggression are in prospect. These are the objective conditions for the rise of revolutionary movements for national and social liberation led by the working class.

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Iceland’s debt repayment limits will spread

By Michael Hudson

Published: August 16 2009 18:56 | Last updated: August 16 2009 18:56

Can Iceland and Latvia pay the foreign debts run up by a fairly narrow layer of their population? The European Union and International Monetary Fund have told them to replace private debts with public obligations, and to pay by raising taxes, slashing public spending and obliging citizens to deplete their savings.

Resentment is growing not only towards those who ran up the debts – Iceland’s bankrupt Kaupthing and Landsbanki, with its Icesave accounts, and heavily geared property owners in the Baltics and central Europe – but also towards the foreign advisers and creditors who put pressure on these governments to sell off the banks and public companies to insiders. Support in Iceland for joining the EU has fallen to just over a third of the population, while Latvia’s Harmony Centre party, the first since independence to include a large segment of the Russian-speaking population, has gained a majority in Riga and is becoming the most popular national party. Popular protests in both countries have triggered rising political pressure to limit the debt burden to a reasonable ability to pay.

This political pressure came to a head over the weekend in Reykjavik’s parliament. The Althing agreed a deal, expected to be formalised on Monday, which would severely restrict payments to the UK and Netherlands in compensation for the cost of bailing out their Icesave depositors.

This agreement is, so far as I am aware, the first since the 1920s to subordinate foreign debt to the country’s ability to pay. Iceland’s payments will be limited to 6 per cent of growth above 2008’s gross domestic product. If creditors thrust austerity on the Icelandic economy there will be no growth and they will not get paid.

A similar problem was debated 80 years ago over Germany’s first world war reparations. But many policymakers remain confused over the distinction between squeezing out a domestic fiscal surplus and the ability to pay foreign debts. No matter how much a government may tax its economy, there is a problem turning the money into foreign currency. As John Maynard Keynes explained, unless debtor countries can export more, they must pay either by borrowing or by selling off domestic assets. Iceland today has rejected these self-destructive policies.

There is a limit to how much foreign payment an economy can make. Higher domestic taxes do not mean a government can translate this revenue into foreign exchange. This reality is reflected in Iceland’s position on its Icesave debt – estimated to amount to half its entire GDP.

In taking this stand, Iceland promises to lead the pendulum swing away from the ideology that debt repayments are sacred.

In the post-Soviet economies the problem is that independence in 1991 did not bring the hoped-for western living standards. Like Iceland, they remain dependent on imports. Their trade deficits have been financed by the global property bubble – borrowing in foreign currency against property that was free of debt at independence. Now the bubble has burst and it is payback time. No more credit is flowing to the Baltics from Swedish banks, to Hungary from Austrian banks or to Iceland from Britain and the Netherlands. Unemployment is rising and governments are slashing healthcare and education budgets. The resulting economic shrinkage is leaving large swathes of property in negative equity.

Austerity programmes were common in developing countries from the 1970s to the 1990s, but European democracies have little tolerance for such an approach. As matters stand, families are losing their homes and emigration is accelerating. This is not what capitalism promised.

Populations are asking not only whether debts should be paid, but – as in Iceland – whether they can be paid. If they cannot be, then trying to pay will only shrink economies further, stopping them becoming viable.

Will Britain and the Netherlands accept Iceland’s condition? Trying to squeeze out more debt service than a country could pay requires an oppressive and extractive fiscal and financial regime, Keynes warned, which in turn would inspire a nationalistic political reaction to break free of creditor-nation demands. This is what happened in the 1920s when Germany’s economy was wrecked by the rigid ideology of the sanctity of debt.

A pragmatic economic principle is at work: a debt that cannot be paid, will not be. What remains an open question is just how these debts will not be paid. Will many be written off? Or will Iceland, Latvia and other debtors be plunged into austerity in an attempt to squeeze out an economic surplus to avoid default?

The latter option may drive debt-laden countries in a new direction. Eva Joly, the French prosecutor brought in to sort out Iceland’s banking crisis, warned this month that Iceland would have little left but its natural resources and strategic position: “Russia, for example, might well find it attractive.” The post-Soviet countries are already seeing voters shift away from Europe in reaction to the destructive policies the EU supported.

Something has to give. Will rigid ideology give way to economic reality, or the other way round?

The writer is professor of economics at the University of Missouri

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