Class Struggle 114

Spring 2015

Class Struggle 114

Spring 2015

Briefs
Abolish Profits AND Prisons!
As Te Rangikaiwhiria Kemara pointed out in his
article The Truth behind the SERCO debate
incarceration, not privatisation, is the problem.
SERCO is a symptom, capitalism is the disease. NZs
high incarceration rate, like that of the US, preceded
prison privatisation by decades. Since the 19th
century Marxists have pointed to crime as necessary
to criminalise workers who break the law. The law
is the law of the capitalist ruling class that defends
private property as the wealth expropriated from the
working class by capitalists. Thats why most of
those in jail are poor workers locked up for minor
offensives while bankers and fraudsters go free.
And when workers organise resistance to state
oppression they are labelled terrorists and become
political prisoners. It is no accident that Rangi
Kemara knows the truth about Spring Hill. He along
with Tame Iti spent over 2 years in that state-run jail
as political prisoners following the Urewera raids in
2007.
Such oppressive laws are part of the class war to
force workers to submit to wage slavery. Prisons are
a by-product of the capitalist profit machine. Only a
society that exploits the working majority denying
them the fruits of their labor needs crime to divide
and rule the wage slaves. The solution is a social
revolution that creates a society of plenty so that the
causes of crime are eliminated. Crime will disappear
with capitalism. We may have to keep the prisons as
long as the bosses need a vacation.

Rip back stolen ChCh assets

More reports of the National and ACT coalition
government (NACT) asset stripping Christchurch.
As we have always said the real disaster in ChCh is
disaster capitalism. An earthquake becomes an
excuse to strip public and private assets by corporate
raiders. Even before the earthquake NACT was
grabbing water rights for their dairy farmer relatives
and political cronies by dissolving Environment
Canterbury (ECAN).
Four years on and the Labour-led Council is about to
agree to the sale of council owned assets to pay for
the rebuild which is being dictated by Cabinet to
enrich their developer mates. Fletchers has become
the No 1 fat cat with its rebuild monopoly. Now

NACT is stripping the state housing assets by not

doing maintenance and running them down to pay a
fat dividend to balance the Government books and
then selling them off to the parasitic developers.
By now it should be obvious that this is not only
because the NACTs are heartless bastards. They are
driven by a growing fear of global depression to
strip all the public assets they can before the
economy hits the fan and the fictitious value of our
parasitic speculator cronies goes poof. Bank
balances, stocks and bonds, and other fictitious
paper assets will disappear into a black hole. That is
why the boss class is grabbing real estate, housing,
infrastructure, even gold, as representing real value!
Just to rub it in. This parasitic ruling class is doing
us a favour as they concentrate their ill-gotten
wealth in tangible, real assets, as monuments to the
stolen past labor value of workers. It makes it easier
for us to rip the lot back into the hands of workers so
we can do something useful with it to rebuild NZ as
part of a global socialist society.

The Zombie Labour Party

The Labour Party had its origins as a progressive
party dedicated to reforming capitalism in the
interests of working people. Its ideological founders
were the Fabian intellectuals within the Liberal
Party. In NZ leading Fabian W P Reeves outlined its
program in State Experiments in Australia and NZ.
Lenin spoke of Labour Parties in Australia (founded
in the1890s) and NZ (1916) as Liberal-labour
parties arising under conditions of settler
colonialism where the state played a key role in
creating the conditions for national economic
development.
Is the Labour Party today still progressive? The
Labour Left intellectuals like to see themselves as
modern day Fabians. The problem is that capitalism
today cannot be progressive. Chronic crises of
falling profits do not allow state experiments in
income equality. The growing gap between rich and
poor cannot legislated away in parliament.
Lets look at the left critique of Labours policy
paper on the Future of Work. This is cart before
the horse stuff. Separating work from wages is not
possible under capitalism. Therefore any UBI
(Unconditional Basic Income) will be paid as an
poverty line income. Trying to create a living
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Class Struggle 114

income for all on the basis of the rotten capitalism

system is like trying to raise the dead. That is why
the Labour Party today is a Zombie party.
We have to start from first principles. Labour power
plus natures bounty is the source of value. Labour
contributes more than its own value as surplus
labour expropriated by the capitalist owners as their
profits. Rising productivity of labour that
simultaneously renders more workers redundant is
appropriated by capitalists. This is the underlying
cause of capitalist income inequality and
unemployment ignored by the nice Mr Piketty.
Labour governments (and social democracy in
general) treat production relations as acts of nature
and pretend to be able to redistribute income. This
has failed and cannot be revived by neo-Keynesians,
neo-Fabians, or queasy Marxists like Varoufakis.
Capitalism is in its terminal crisis and has to be
overthrown. (See Is China Meltdown means the end
of Capitalism? in this issue)
The ownership of the means of production
(distribution and exchange) must be collectivised
and then democratically employed in production to
meet social needs not private profits. This will allow
a rational allocation of necessary work of a few
hours a week, the sustainability of what is left of
nature, and one hell of a lot of time for poetry and
music. Such an allocation of labour time and of
reward will follow as the cart follows the horse.
From each according to their ability; to each
according to their need.

Mana versus Maori Party

We oppose any deal between Mana and the Maori
Party. It is crossing class lines. We do not think that
the MP and the Iwi capitalists it represents stand for
Maori workers. But Mana certainly does. The way
forward is not to pretend that Maoridom is
classless, it is to unite Maori with non-Maori
workers against Maori and non-Maori capitalists.
Thus we do not confuse Treaty settlements that treat
Maori as a people with the interests of Maori as
members of the working class. Semi-colonial
capitalism in a period of global capitalist crisis and
climate collapse cannot fund Maori economic
welfare by enriching a Maori bourgeoisie through
Treaty settlements. Iwi capitalism is no different
from Pakeha capitalism. It treats the working
majority as wage slaves. To ensure that Maori

Spring 2015

workers can benefit from the land stolen by

colonials we need to unite them with Pakeha,
Pacifica and other workers as one class for a
socialist revolution.
The road to revolution is blocked by the Labour
Party which relies heavily on the votes of workers
including the majority of Maori and Pacifica
workers. The leadership of the Labour Party are
petty bourgeoisie that reject its historic class base.
They stabbed Cunliffe in the back when he went to
Maori and Pacifica to rebuild the worker base.
Labour cannot represent both workers and a middle
class aligned to the bosses. We are for a split along
class lines so that the petty bourgeois are left
fighting with the Greens, Maori Party and NZ First
for the middle while the workers unite as a
proletariat conscious of their its destiny.
We are for a mass workers party that puts the rights
of Maori and Pacifica, along with women, migrant
workers and all oppressed groups, at the centre of its
program. Today Mana is only one candidate for that
party and only if it sticks to its class based program
and does not deviate into rotten compromises with
the Maori Party, or with any other capitalist party.
Mana could become the party that unites the
working class as a force that can overthrow the
rotten capitalist system in NZ and join the popular
struggles around the world for a socialist future
where planned production to meet our social needs
takes over from social production for private profits.

Geek Socialism?
Out of the Greek crisis comes the theory of Geek

socialism. Yanis Varoufakis thinks that imperialism

can be a win-win. He also thinks that a new left must
join forces with geeks the generation of high tech
savvy youth who are the new vanguard. Is this a
theory of Geek socialism? Well, Geek something.
Arch Geek Edward Snowden joins the fray with his
view that automation will deprive people of an
income unless a UBI is introduced. So is this the
technical solution to avert social crisis. "As a
technologist, I see the trends, and I see that
automation inevitably is going to mean fewer and
fewer jobs. And if we do not find a way to provide a
basic income for people who have no work, or no
meaningful work, were going to have social unrest
that could get people killed. When we have
increasing production - year after year after year some of that needs to be reinvested in society."
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Class Struggle 114

We can excuse Yanis and Edward for plugging a

sort of high tech distributional socialism, but former
Trotskyist Paul Mason should know better. Sharing
a similar queasy-Marxist standpoint with his mate
Yanis, veteran reporter Paul Mason has written a
book that celebrates Geek socialism except he
doesnt mention socialism. He summarises his new
book, Postcapitalism: a Guide to our Future in this
interview.
Mason argues that automation is supplanting human
labor power and thus reducing value creation to
zero. Capitalists will not survive zero value
production (no profits!) nor will the proletariat (no
wages!) Marx anticipated this trend. Long before
zero value production the destitute proletariat would
rise up and seize the machines and harness them to
produce use values for all.
Michael Roberts has written a critique of Mason as a
utopian thinker. Essentially a re-run of the utopia
that intellectuals (geeks) will find a technical fix that
will make capitalism post. He challenges the
assumptions of technical fixes such as robots and
artificial intelligence (AI).
The main point we take out of this debate is that
technology (which is the past accumulated labor of
workers) under capitalism serves the interests of
capitalists. A techno transition to postcapitalism
without the seizure of power is a dystopia.
Capitalism has to be overthrown so this technology
can b put to social use under socialism.
We say: in this social revolution the geeks
(hackers and whistleblowers unite!) will play a
vital role in the vanguard of the proletariat!

Health & Safety? Not under

crisis-ridden capitalism!
The National led government propaganda machine
spins & twists but cannot hide the reality: it is
completely for bosses profits at the expense of
workers lives (health and safety). Its anti-union
health & safety law is pro-farmer, forestry and small
business. It is a mockery of any sense of health and
safety that some of the most dangerous industries are
exempt from elected safety representatives.
The Labour party is once again ineffectual in
campaigning against this rotten health and safety
law. Since they are not a party of worker activists
they cannot take direct political action against these

Spring 2015

attacks on the working class. The law really gives

license for the bosses to work workers into the
grave.
The bosses fear of unions is a fear of workers
taking control of production. Any possibility of
workers control of health & safety could put limits
on how the bosses screw their profits out of their
workers.
The reality is the bosses want to and need to
maximise profit. The bullshit arguments thrown
around parliament are nonsense when you see
through to the bosses maintaining their right to
screw workers. Injured and dead workers will be
replaced and profit production (labour exploitation)
continues. Without workers there would be no
profits; but with a managed level of unemployment
a reserve army of labour is available to replace
the sick, injured or dead workers.
Unions have led the fight for elected worker
representatives to have power under law - power to
shut down production, until safety is assured. This is
the limit of the previous law, and was shown to not
be enough. The pressure of production in small
workplaces and the lack of strength and solidarity of
unions meant that reps were vulnerable to pressure.
As the Pike River disaster proved, owners and
contractors will push for work to continue in coal
mines in spite of inadequate monitoring equipment,
rescue equipment, etc. Health and safety reps are
under pressure to avoid shutdowns. Workers too
have reasons to avoid good health and safety
practices. Because wages are so low, they need a 6070hour week just to make ends meet, machine
operators and drivers will skip breaks adding to
fatigue and accidents. Workplace drug testing is a
distraction when fatigue (low wages & so long
hours) is a bigger killer.
Even a strong union cannot stop accidents. As the
history of unions proves, they are relatively
powerless against the state backed industrial law.
The reality is that under the capitalist system where
the drive is for profits, workers are expendable in the
process. Short of workers control of production,
lives will continue to be sacrificed. So we need to
get rid of the capitalist system. For effective
workplace health & safety, we need socialism.
Socialism where production is organized to
meet needs. And one of those needs would be
the health and safety of the workers!
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Class Struggle 114

Spring 2015

Is a China meltdown the end of capitalism?

The global ruling classes are beginning to panic about the slowing down of China.
Will a China meltdown mean a new Great Depression and even the end of
capitalism? This question has been debated furiously throughout the history of
capitalism each time crises led to depression and war. Since the early 20th century
capitalism has destroyed the productive forces to survive. Each crisis brought deeper
depressions, more destructive wars, and abortive revolutions. The question posed
again and again was: socialism or barbarism? Today, as we face another Great
depression and the threat of a Third World War, the question is posed again: is this
the end for capitalism? We argue that since WW1 capitalism was ripe for socialist
revolution. But capitalism can always stagger on like a violent drunkard to another
economic crisis and world war, unless there is a Marxist party leading the worlds
workers to its overthrow. This time we know the crisis is terminal because the
survival of capitalism means certain ecological disaster: Socialism or Disaster!
We have been there before!
Marxists know that capitalism was objectively ripe
for revolution at the turn of the 20th century.
Capitalism had ceased to function as national
markets competing with one another. Rival nations
now exported capital to other countries to counter
falling profits. This
led to the epoch of
imperialism
characterised
by
monopoly
state
capitalism
that
competed for the
world market by
means
of
diplomatic,
trade
and military wars.
Not
only
was
monopoly
capitalism
destructive
compared with its progressive 19th century phase, it
was holding back the huge productive potential of
socialism. Objectively capitalism was ripe for
overthrow as its worsening crises sparked
revolutionary
uprisings.
However,
rotten
imperialism would not fall over by itself. It had to be
pushed over by the class conscious proletariat led by
a Marxist vanguard party.
This was proved in the Russian revolution which
ended the First Imperialist War when the warring
imperialist powers buried their differences to invade

the new Soviet Union to smash the revolution. They

were defeated by the Red Army under Trotsky but
the revolution was contained in Russia and failed to
spark a victorious world revolution. In the other
imperialist countries ripe for revolution, the Marxist
parties had degenerated into tame bourgeois tools
bought
off by
colonial
superprofits.
The reason was not
the
objective
factor of backward
workers in every
country who did
not spontaneously
throw out their
treacherous leaders
and
rise
to
revolution. It was
the
missing
subjective factor
of the revolutionary party necessary to break them
away from petty bourgeois misleaders. Only in
Russia had a Marxist vanguard party - the
Bolsheviks - become strong enough to build a
vanguard of the proletariat and win over the
reformist majority in the soviets to form a Workers
Government.
But even after the bosses and their lackeys ganged
up on the Soviet Union and suppressed revolutions
elsewhere, the capitalists hadnt removed the threat
of revolution. To smash the workers movement in
Europe and America they used fascist mobs and
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Class Struggle 114

mercenaries like the Pinkertons to kill the workers

leaders and smash their organisations. Again fascism
failed to destroy the working class in the great
depression and once more the imperialists went to
war driving their workers to the fronts to slaughter
one another.
The defence of the USSR led to victory in the
Second Imperialist war at the cost of 30 million
dead. But once more the worldwide spontaneous
uprisings never led to world revolution. What was
missing was the Marxist international capable of
mobilising the power of the worlds workers. The
post war revolutions were led by Stalinist
bureaucracies on the back of the Soviet Union and
formed a bloc of Soviet states. They were not
Marxist revolutions based on a class conscious
proletariat. They could not create a world revolution,
and under pressure from global imperialism in crisis,
restored capitalism in the late 80s and early 90s.
The return of Russia and China to global capitalism
changes nothing. Because they have become new
capitalist imperialist powers they cannot prevent the
current crisis from deepening. They too are subject
to crises as we explain below. The crisis this time
will be even more destructive as it will go beyond
depression and war and threaten human extinction.
For that reason we can state in advance that this
crisis is terminal. Depressions and wars will not buy
capitalism more time.
Because we have been there before, we know that
the international proletariat cannot overthrow
capitalism unless it becomes conscious that the
alternative is socialism or barbarism. Socialism
means survival. Capitalism means death.

The China Crisis is the key

What is a structural crisis of capitalism? For
Marxists crises are interruptions in capital
accumulation caused by the law of the tendency of
the rate of profit to fall (LTRPF). It assumes the law
of value (LOV) which holds that the value of
commodities is equivalent to the socially necessary
labour time (SNLT) required to produce them. This
includes the commodity labour power that creates
more value than its own value (v) as surplus value
(s). Increasing the rate of surplus value (s/v) has
historically caused an increase in the composition of
capital invested in plant, machinery and raw
materials that do not contribute to new value,
constant capital (c) relative to the value of labor

Spring 2015

power which does create new value, hence variable

capital (v).
Since c increases relative to v, the LTRPF results
from the inability of total capital invested to extract
sufficient surplus value to make a profit (p= s/c+v).
The crisis therefore can only be solved by destroying
sufficient c and v to restore the rate of profit. This is
the market solution of orthodox economists like
Wolf Richter to end the structural recession. Thus
Chinas rising cost of labor i.e. declining rate of
productivity (exploitation) causes a decline in
investment and output. A slowdown in GDP is a
problem because it means China is not producing
enough surplus value to return a profit on its huge
surplus of capital stock. Hence the market solution is
to wipe out much surplus capital and devalue c,
plant, raw materials and v, wages, to increase
productivity to return a profit on capital.
The Left Keynesians on The Daily Blog can see a
Great Depression coming when the China
meltdown hits the red line. The solution is more
state intervention to boost consumption and
stimulate investment in production. Yet since 2008
the major capitalist states have intervened to bailout
the banks rather than boost consumption by creating
jobs and raising productivity. Nevertheless, left
Keynesians all over the world still have illusions in
China as the state capitalist saviour of the global
economy leading the BRICS nations as the
progressive alternative to neo-liberalism.
For Marxist economists like Michael Roberts
capitalist crisis cannot be resolved by state
intervention as that postpones the destruction of
surplus capital. The crisis of falling profits has not
been fixed by the market or state intervention
because workers have refused to submit to greater
exploitation necessary to restore the rate of profit.
The structural crisis since 2008 is therefore a Long
Depression because the conditions for a return to
acceptable profits in production have not been
created. This can only mean that to resolve
capitalisms crisis, further attacks on workers jobs,
wages and living standards must follow. Only by
increasing the rate of exploitation (s/c+v) will
capitalists create the conditions to reinvest in
production to accumulate capital.
Chinas decade-long burst of expansion is
succumbing to a crisis caused by the LTPRF. The
sum of surplus value it can pump out of its workers
at home and in its 'trading partners' is insufficient to
realise a profit on its stock of surplus capital. This
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Class Struggle 114

proves beyond doubt that China is a capitalist

economy. State intervention can only postpone
briefly the need to devalue or destroy surplus capital.
As explained above, the LTRPF results from the law
of value (LOV) which states that socially necessary
labor time determines the value of commodities.
China cannot evade the global LOV or the LTPRF.
Already we see China devaluing the Yuan to boost
its declining exports. It is already well into a
massive restructuring of old inefficient plant and
technology and a drive to cuts wages and conditions.
At the same time it is ramping up its military
spending and alliances.
There is every sign that China too despite its large
state sector must embark on depression and war to
solve its crisis. Chinese imperialism can only
survive at the expense of attacking its workers and
those of its trading partners. This creates the
conditions for international solidarity between the
workers in China and its trading partners including
the BRICS to refuse to pay for capitalisms crisis.
Such class solidarity demands a program and a party
that can lead resistance to the deepening austerity
and open the road to a socialist solution to end
capitalisms terminal crisis.

Transitional Program for workers power

Capitalism can survive only by destroying social
value and the ecology by means of depressions and
wars. This means inter-imperialist rivalry to grab
what is left before the ecology collapses. The
increasing tension between the two big blocs of
imperialist powers led by the US and China are
already causes many proxy wars any of which can
break out into a spiralling Third World War.
The task of the Marxist Party with a Transitional
Program is to guide the working class in struggle
from the urgent immediate demands to stop paying
for the bosses crisis stating clearly in advance that
this will require a struggle for power that must end
in either a workers revolution or capitalist counterrevolution. The program is therefore summed up as
preparing for power.
We must resist being dragged into a proxy wars that
are breaking out everywhere and in a Third World
War. We resist wars by opposing drafts, and calling
for soldiers to refuse to fight. We must resist all
attacks on our jobs, wages and living standards. We
will learn quickly that this means workers taking
control of production through strikes and
occupations.

Spring 2015

To do this we need to organise strike

committees and to defend occupations with
armed pickets. Movements to stop ecological
destruction will also require mass pickets and
strikes.
This will pose the question of who rules the
state and society. Will it be the working
masses or the tiny ruling class and its
mercenaries? The state forces will attempt to
smash strikes, occupations and pickets to
destroy revolution at all costs.
This struggle for power can be resolved only
by a revolutionary seizure of power or a
fascist counter-revolution. We are for the
victorious revolution and a Workers
Government!
A Workers Government based on workers
councils and militias will have the power to
act quickly to stop capitalist destruction of
the world economy and ecology. The market
will be replaced by democratic plans that
uses workers control over production,
distribution and exchange to plan production
for our basic needs including the survival of
species threatened with extinction; replacing
carbon extraction with renewable energy;
closing down nuclear plants; etc.
None of this will be possible unless the
revolution is global. The world-wide
proletariat needs to overcome the divisions
between nations, employed and unemployed,
between ethnicities, cultures and religions
etc., which are all created by the bosses to
divide and rule us.
We need to link local, national and
international struggles to defeat the power of
the imperialist ruling classes. There can be
no such thing as socialism in one country in a
capitalist world!
In every country there needs to be a Marxist
party that is part of a world party of
socialism to raise the red flag of Marxism
and the Transitional Program for world
socialist revolution!

Our best hope is that the Chinese crisis of falling

profits will meet with the resistance of the 1 billion
workers as the vanguard of the multi-billion workers
of the world to lead the fight for an international
socialist revolution to stop the destruction of our
civilisation and ecology and rescue humans and
many other species from imminent extinction.
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Class Struggle 114

Spring 2015

Capitalism on FIRE!
We review Jane Kelseys new book The Fire Economy: New Zealand's Reckoning and
find that it is about neo-liberalism and almost nothing about capitalism. We argue
that capitalism is the problem not neo-liberalism and that what we need is not
reform but revolution.
Its the same theme that Kelsey introduced in her
1995 book The New Zealand Experiment: A World
Model for Structural Adjustment that blamed the
deregulation of the Fourth Labour Government on
the neo-liberal revolution which replaced
Keynesian intervention with the rule of the market.
Neo-liberalism gave rise
to financialization as the
FIRE economy (Finance,
Insurance
and
Real
Estate) became separated
from society and the real
economy. Today neoliberalism and the FIRE
economy are embedded
and difficult to remove.
Yet Kelsey argues that the
Global
Financial
Crisis
(GFC)
exposed
neoliberalism is bankrupt and open to challenge.
Neoliberalism having replaced the epoch of
Keynesian intervention in the 1970s is today facing
a challenge to its existence. Kelsey outlines how the
unique brand of neoliberalism in NZ can be
politically contested and disembedded to reregulate the market to make it serve a more equal
society.
Against Kelsey, we argue that neo-liberalism is a
symptom of capitalism facing a terminal crisis
having long ago reached the limits of its historic role
in advancing human progress. For the last 100 years
or capitalism has gone into decline and is
threatening to destroy not only the social basis of
human freedom but also the extinction of the human
among many other species. We cannot put out the
FIRE economy without replacing capitalism with a
new society that serves the needs of humanity and
nature.
The Neo-liberal counter-revolution
First, we argue that neo-liberalism, like
Keynesianism before it, is a symptom of capitalism
in crisis. These are not sequential epochs. They are
attempts to resolve the fundamental crisis of capital
caused by the contradiction between private property

and social production that manifests itself as a crisis

of falling profits, or the law of the tendency of the
rate of profit to fall (LTRPF). See Michael Roberts
defence of the LTRPF against David Harvey.
The LTRPF causes a shift of surplus capital from
production to speculation.
But such crises cannot be
resolved until sufficient
surplus capital is destroyed
to
restore
profitable
investment in production.
Kelsey recognises that there
was a shift in capital
investment from industry to
finance since the 1970s but
offers
a
Keynesian
explanation for this.
The FIRE economy is a metaphor for the
fundamental shift in global capitalism since the
1970s. Finance has replaced industry as the driver
of wealth creation in affluent countries a
transformation
known
as
financialization.
Neoliberal ideology rules and institutions acted first
as the midwife and then as the guardian of this
economic order...Why did people, companies and
institutions with spare capital become increasingly
reluctant to invest or re-invest in manufacturing
which was plagued by low profits, delay and risks?
What accounted for such poor returns on
productive investment leading to financialisation?
Kelsey
opts
for
the
Keynesian
underconsumptionist explanation of the late Bruce
Jesson, and the US Marxists John Bellamy Foster
and Fred Magdoff. They argue that low wages lead
to falling demand and a move of capital away from
production to finance. Keynesians claim that
capitalist crises are caused by wages being too low
depressing consumption and resulting in the
overproduction of goods and hence a falling rate of
profit on capital invested. Keynes answer to falling
profits was to use the state to create employment,
boost wages and consumption and thus encourage
capitalists to invest in production.
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Class Struggle 114

Marxists proved that the underlying cause of crises

was not low (or high) wages but a fall in surplus
value relative to capital invested. That is, capitalists
could not exploit workers hard enough to get a
satisfactory profit on their investment. The only way
that such a crisis could be resolved for the capitalists
was by the massive destruction of old plant and
machinery and the driving down of workers living
standards by depression and war. This allowed the
modernisation of plant and machinery combined
with low wages to drive up the rate of exploitation
and hence the rate of profit and accumulation of
capital.
Marxists proved that in NZ, like the rest of the
world, low wages were not the cause but an effect of
the Great Depression of the 1930s. Keynesian
intervention before, during and after WW2, did not
result in the post-war boom, nor could it prevent its
collapse in the 1970s. What made the post war boom
possible was the depression and war which
destroyed old technology and replaced it with new,
and defeated the international proletariat driving
down its wages and conditions. And Marxists
proved that the post war boom ran out of steam not
as a result of falling wages but falling profits. Profits
fell because the production of surplus value (the rate
of exploitation) could not keep pace with total
capital expenditure.
The crisis leads to depression and war
The only solution to a structural crisis of falling
profits is to destroy or devalue surplus capital (both
constant and variable) sufficient to increase the rate
of exploitation. These are collectively called
counter-tendencies to the LTRPF. Historically they
mean a pattern of activity by which surplus profits in
the imperialist countries are exported to colonies and
semi-colonies to realise super-profits by exploiting
cheap raw materials and labor power first by means
of trade and then by establishing capitalist
production. To reap the full potential of such superprofits all national barriers to the free movement of
commodities and capital have to be broken down.
During the Great Depression and WW2 many
colonies and semi-colonies began to adopt economic
nationalist barriers to free trade and capital flows in
an attempt to protect their economies from the
dominance of imperialist super-exploitation.
This is what neo-liberalism is the deindustrialisation of old technology in the imperialist
countries and the breaking down of national barriers
to the shift of production to semi-colonies to exploit

Spring 2015

cheap raw materials and labour power. The countries

of the indebted South and East had their assets
stripped and workers living standards destroyed
just like Greece today. This process also included
the SU and China as they opened up to capitalism.
In NZ this is what happened when the Fourth Labour
Government replaced Muldoon in 1984. Muldoon
had attempted to resist IMF structural adjustment
imposing conditions on managing the national
economy. He did this by trying to substitute for
imports such as oil and control the flow of capital,
but the IMF pulled the plug and threatened to
foreclose on NZs debt. The Labour Government got
the message and began to follow the dictates of the
IMF to open the economy to force it to compete on
the global market. This was not an experiment as
Kelsey continues to call it, nor was it a revolution.
Like all capitalist attempted solutions to crises of
overproduction, it was a counter-revolutionary
attack on a sovereign nations ability to manage its
economy through capital controls, import
substitution and the nationalisation of key assets.
Yet on a global scale the forced recolonisation of
capitalist production in the South-East was
insufficient to soak up the trillions of surplus capital
which continued to ramp up speculation in existing
commodities and assets to new heights. This is what
underlies financialization it is not a structural
change in capitalism away from industry, but the
failure of depression and war to create the conditions
for a return to profitable production in industry.
It was the failure to turn Russia and China into semicolonies capable of soaking up these surplus trillions
allowing these countries to harness their own cheap
raw materials and labor power and emerge as new
economic powerhouses. With the bursting of
speculative bubbles in the West in 2007, the
productive growth of the new imperialists in the East
(with their BRICS attachments) temporarily
prevented the GFC from becoming a massive global
depression.
FIRE and the GFC
The FIRE economy therefore is living proof that
capitalism failed to overcome the structural crisis of
overproduction in the West that began in the 1970s.
The return of capitalism to the former Soviet union,
China and Indo China in the 1990s contained the
Asian Crisis and Dotcom collapse but could not
stave off the GFC in 2008. The GFC is the surface
expression of the explosion of the speculative bubble
9

Class Struggle 114

that could not be resolved earlier by the neo-liberal

counter-tendencies to the LTRPF. So the GFC was
not the result of deregulation as agued by the
Keynesians. Kelsey relies heavily on Bellamy Foster
and Magdoff. Lets see what they have to say about
the GFC and then at the Marxist critique.
Bellamy Foster and Magdoff think that the
stagnation of production is behind financial
speculation. The stagnation is caused by falling
consumption which leads to falling profits. They are
wrong on what causes that initial stagnation. The
authors draw on Baran and Sweezy and even claim
to go back to Marx. However, anyone who followed
Baran and Sweezy in the 1940s and 1950s knows
that they junked Marx for Keynes. For them the
crisis of falling profits resulted from monopoly
finance capital squeezing wages and consumption.
Marx treated under-consumption (of commodities
and capital) as due to a deeper cause of crises - the
LTRPF. Michael Roberts shows that the LTRPF
caused the onset of crisis in the 1970s not lack of
consumption. The Keynesian policy of inflating
wages to boost consumption ended in stagflation as
profits were squeezed out of existence. Because the
Keynesian policy only addressed an effect of crisis it
could not counteract the cause of crisis, the LTRPF.
It was the failure of neo-liberalism to cut costs
sufficiently to restore the post-war boom level of
profits is what led to financialization the
speculation of surplus capital in existing assets,
driving up their prices and creating asset bubbles.
The expansion of credit fuelled consumption further
until the speculative bubbles burst in the GFC.
Michael Roberts also shows how the QE
(quantitative easing) since 2008 has led to hoarding
and further speculative investment rather than the
destruction of surplus capital and a return to precrisis capital accumulation.
All this means that there is no way capital can spend
its way out of its crisis. Sooner or later the $trillions
of fictitious capital has to be devalued and destroyed
until the conditions for the return to profits are
restored. We are back at depression and war as the
only solution for capital to temporarily resolve its
crisis.
Reform and Revolution
It becomes clear that Kelseys solution to the FIRE
economy does not go to the roots of the problem.
Because she adopts the Keynesian view that crises

Spring 2015

can be overcome by a policy of redistribution and

state regulation she expects that neo-liberalism and
the FIRE economy can be re-regulated and
disembedded. This raises the question as to how
far the capitalist state can be reformed. Kelsey
agrees that the capitalist state ultimately serves only
capital. But neo-liberalism is a paradigm or
model of capitalism that Kelsey thinks can be
regulated out of existence without the need to
overthrow capitalism. For that reason, and perhaps
for deeper reasons, revolution is off the agenda. So
lets see how revolutionaries prove that reforms such
as Kelsey advocates in Aotearoa/New Zealand can
only be implemented by socialist revolution.
We need to explain the difference between the
parliamentary
political
contest
and
the
revolutionary Transitional Program that advances
immediate demands to empower the proletariat to go
beyond reforms to overthrow capitalism. Parliament
is the democratic facade of the capitalist state. Social
democracy was born to contain the rise of militant
labour movement that threatened to overthrow the
state. Ever since, parliament and its laws, have been
a leg-iron on militant labour. Social reforms have
always taken second place to profits.
Today global capitalism is facing a crisis over its
future existence and can only survive by destroying
all the past social gains won by working class
struggle. There is no room for reform or bourgeois
democracy. Capitalism must be destroyed or
humanity will be destroyed. We can see evidence of
this everywhere where moderate struggles are met
with armed repression driving workers to militant
resistance.
The road to revolution is mapped out by the
Transitional Program that draws on the transitional
method of Marx, Lenin and Trotsky. It starts with
immediate demands for what workers need to live,
such as jobs, a living wage, free housing, health and
education etc. As these demands are met by state
repression at every point workers illusions in a
peaceful, parliamentary road are put to the test,
proving that the struggle for these demands can only
be won by the seizure of state power.
As these struggles develop workers become fully
conscious that to live, even to survive as a species in
the face of global warming, capitalism must die. The
problem is no longer seen as neoliberalism or the
FIRE economy; capitalism is on fire, threatening to
destroy humanity and nature. The fire can only be
put out by an international socialist revolution.
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Class Struggle 114

Spring 2015

For a Workers Socialist Federation of Eurasia!

A Marxist critique of Escobar's 'Eurasian Big Bang'
Pepe Escobar on the occasion of the 7th Summit of the BRICS (Brazil, Russia, India,
China, and South Africa) in Russia has written another excellent analysis of the
development of the Eurasian imperialist bloc emerging as a global challenge to the
US imperialist bloc. Except that he does not call Russia and China imperialist. Rather
for him they are newly emerging great powers that are capable of countering the
dominance of the US and its crony states.
Escobars article first appeared in Tom [Engelhart]
Dispatch and has been widely republished in proRussian leftist sites including Counterpunch, Le
Monde Diplomatique and Russia Insider, showing
his political leanings.
Escobar like most the
official left today sees
Russia and China as the
champions
of
the
oppressed masses in
challenging the world
imperialist domination
of the US.
As we have pointed out
many times there is
nothing
progressive
about the rise of Russia
and China as global
powers. Those who have
illusions in these states
offering a more worker
friendly future to that of
US global dominance are dreaming. They are
offering what some of us on the old left call a
reactionary utopia. That is, a future state that far
from meeting the hopes of workers and all oppressed
people to escape the destructive decline of global
capitalism, offers a future of inter imperialist wars
threatening a Third World Warm not to mention an
uncontrolled climate meltdown.
Permanent Revolution
Rather than fall into this trap we urgently need an
action program to unite workers and oppressed the
world over to oppose and resist imperialism in all of
its shapes and forms East and West, US, EU and
Eurasian, and to fight for a new socialist world
society.

Our program rests on the foundations of the

revolutionary communist history of struggle over the
past two centuries. We can summarise that history as
the history of Permanent
Revolution
of
the
proletariat against the
permanent
counterrevolution
of
the
bourgeoisie.
That is why for us
Trotsky's
Transitional
Program of 1938 still
serves as the best recent
attempt to outline a
program
for
the
proletariat to advance its
class
independence
against the capitalist
ruling class. It condenses
the lessons gained from
past
revolutions and
counter-revolutions and
allows us to make a running balance sheet of the
advance of the proletariat as the only revolutionary
class capable of overthrowing capitalism today.
In summary, capitalism has since the early 20th
century entered into its period of decline in which
capital is concentrated into the hands of ever larger
monopoly firms backed by the imperialist states.
The imperialist epoch represents capitalism's attempt
to prolong its life by dominating the global market
with rival powers super-exploiting and oppressing
workers to extract by force the remaining value it
can from their labour power and the limited
resources of the earth.
The main contradiction therefore in the imperialist
epoch is that of the workers and oppressed against
the concentrated wealth and power of the imperialist
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Class Struggle 114

ruling classes in the dominant states. A secondary

contradiction is that between the national
bourgeoisies that serve imperialism by oppressing
the workers in the dominated states to extract
maximum value from their labour power.
Completing the Permanent Revolution today is the
objective of those proletarian forces that can draw
on past victories to advance the struggle against the
imperialist ruling classes and their national
bourgeois agents. These include the revolutionary
traditions of the four successive revolutionary
internationals before they degenerated.

Spring 2015

Let us begin with those highly contested states

where the US, EU and Sino-Russian interests come
into conflict, notably Iran, Greece and Ukraine. The
main rivalry between the two main imperialist blocs
is complicated by the secondary imperialist powers
caught between the two main blocs. But as Escobar
describes, it is the US and the Russia and China who
are the major players in the "great game" of
controlling "Greater Eurasia" including Europe
itself.
Iran goes with the SCO

The bourgeois counter-revolution consists of all the

attempts by the imperialist rulers and their bourgeois
agents, including the bureaucratic agents inside the
working class, to defeat the revolutionary gains of
the Permanent Revolution by dividing and strangling
the workers movements in popular fronts disarming
them before the fascist counter-revolution
The popular front with Russia and China
The most dangerous popular front that is being built
today to lock workers into alliances with their class
enemy is that between the BRICS, the Bolivarians,
and the fake Trotskyists, who attempt to disguise
this global popular front as an anti-imperialist united
front. This global popular front ties workers in many
countries to the national bourgeois agents of Russian
and Chinese imperialism. Escobar's role in this is as
a gifted journalist who presents Russia and China as
part of a growing multipolar Eurasian bloc limiting
the destructive role of the US bloc and justifying a
global popular front.
Yet far from posing a progressive alternative to the
US hegemony based on mobilising workers
revolutions this global popular front is part of the
counter-revolution. Russia and China are recognised
by the US as new imperialist rivals to its global
interests. As a result, proxy trade, diplomatic and
military wars between the two rival blocs are
blowing up in South Sudan, Yemen, Iraq, and
Ukraine. Therefore the key question today posed for
workers everywhere is that of defending with the
Eurasian bloc against the US bloc, or, opposing both
blocs equally.
To defend the Eurasian bloc is part of the permanent
counter-revolution because it supports Sino-Russian
imperialism in all conflicts with the US bloc. It
disarms tens of millions of workers from forming a
united anti-imperialist front to overthrow the
imperialist ruling classes in the West and the East.

Escobar argues that the US bloc is losing the race for

control of Eurasia. In the same week that it did a
deal with Iran to lift sanctions in exchange for
renouncing nuclear weapons, the BRICS, the SCO
(Shanghai Cooperation Organization) and the EEU
(Eurasian Economic Union) were meeting in Russia
for the 7th annual BRICS summit and the 15th SCO
summit. At that meeting India and Pakistan joined
the SCO and Iran will join as soon as its sanctions
are lifted. Iran will then be a member of the SCO
alongside four nuclear armed powers which are also
the major economic powers in Eurasia.
More important the EEU (Russia, Armenia, Belarus,
Kazakhstan, and Kyrgyzstan) is creating free trade
agreements with Mercosur (Argentina, Brazil,
Paraguay, Uruguay, and Venezuela) and separately
with China, Iran, India and Pakistan. The BRICS
bank to replace the World Bank, the BRICS New
Development Bank (NDB), and the Asian
Infrastructure Investment Bank (AIIB), are investing
in numerous joint ventures to link Europe and Asia
along new transport corridors ('new silk roads')
spanning Asia and right into the heart of Europe.
In the 'great game' the EU is marginalised and torn
between the two big blocs. Germany and France
cannot stop the breakup of the Eurozone as the
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Class Struggle 114

PIIGS and the recently joined EU states become

increasingly divided up between the rival big
powers. The PIIGS and the former Eastern European
members of the Soviet bloc, Serbia, Macedonia and
the Ukraine, are the main prizes in Europe, while
Iran, Turkey, Pakistan, Afghanistan, India and IndoChina are the prizes on the Asia continent.
Greece opens the socialist revolution in Europe
We have seen how the US has been outmanoeuvred
over Iran. Let us look at the cases of the other two
key contested nations caught between the US and
Eurasian bloc, Greece and the Ukraine. Greece is
important because it signals the decline and fall of
former small imperialist powers within the Eurozone
and their reduction to financial colonies or semicolonies of the rival imperialist powers. Ukraine is
important because as an historically divided state
between Europe and Russia, and after a period as a
soviet republic between 1921 and 1991, is once
more reduced to a financial colony fought over by
the US, Germany and Russia.
The EU will break up in much the same way that the
former Yugoslavia broke up and the Soviet Union
itself broke up. Germany (like the US, Russia and
China) doesn't want to bail out bankrupt states, it
wants the cheap assets
and labour power of new
colonies. To maintain its
profits it must destroy
the value of capital and
state assets in the PIIGS
and drive down wages to
starvation levels. Greece
has been bankrupt for
years and is now forced
to sell its public assets to
pay for its debts.
However, it won't end
there because the IMF
and the BRICS bank are also involved in the
scramble to strip Greece's public assets and get
access to its cheap labor.
Revolutionaries must condemn Syriza which
continues to make the workers pay for Germany's
crisis over the dead body of the 'social Europe'.
Similarly the KKE illusion of an independent Greece
bailed out by Russia and China must be destroyed.
Only a break from imperialism can revive the
permanent revolution in Greece. In this situation
workers have to build independent councils and
militias to occupy and defend all state and major

Spring 2015

private assets from asset stripping by Germany, the

US and Russia and China and defeat a fascist coup.
To do this it will be necessary to smash the
bourgeois state and bring a workers' government to
power that can socialise imperialist and capitalist
property and implement a socialist plan.
Ukraine: for an Independent Socialist Republic!
The Ukraine is currently the main flashpoint of the
clash between the major imperialist blocs and
heating up the trade, diplomatic and military
conflicts. Ukraine has long been divided between
European powers and Russia. The victory of the
Russian Revolution was the catalyst for an
independent Soviet Ukraine in the East while the
West was occupied by the Poles. Stalin's invasion of
West Ukraine in 1939 in a deal with Hitler was
defended by Trotsky as it threw out the bourgeoisie
and constituted a buffer for the defence of the
USSR. However Stalin's 'fascist' methods of
oppressing the unified Ukraine during and after the
war were not defended by Trotskyists. It was
necessary for Ukraine to have a political revolution
to throw out its Stalinist caste (as in the rest of the
USSR) and create the conditions the workers rule in
healthy workers states.
Trotsky
defined
the
political revolution with
the slogan "For an
Independent
Soviet
Ukraine". This ultimately
failed with the restoration
of capitalist property in
the USSR in 1991
reviving the split between
West and East Ukraine in
a
new
'independent'
bourgeois Ukraine. The
oligarchs in the West who
grabbed former workers
property wanted to 'return' to European imperialism,
the oligarchs in the East wanted to retain their ties
with capitalist Russia. The Maidan coup engineered
by the US in 2014 brought the pro-EU bourgeoisie
to power backed by extreme right neo-fascists.
Popular opposition to the coup in the East took the
form of defence of a united Ukraine against the EU
and NATO and against annexation by Russia.
The Kiev regime scapegoated the East as proRussian separatists in the manner of the Crimea
which was annexed by Russia. Yet the Russian
speakers of the East wanted only to oppose the Kiev
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Class Struggle 114

coup regime and defend their cultural and political

autonomy which went back to 1921. The puppet US
Kiev regime has constantly dodged this issue and
blamed Russia for intervening in the war in the East
in desperation to get US and EU bailouts to rescue
the bankrupt economy by privatising its assets and
financing a NATO bulwark against Russia.
In reality the US and EU
imperialists as well as
the Russians don't want
to spark a wider war in
the Ukraine. They want
to pull Ukraine out of
the Russian orbit (EEC,
BRICS, SCO) and bring
it firmly into the EU.
Russia wants to maintain
its
influence
over
Ukraine but not at the
expense of a war in
which
Ukrainian
workers
unite
to
overthrow the Kiev regime and destabilise Russia
itself. So the war in the East is now no more than a
pretext to engage in more diplomatic, trade and
military manoeuvring on both sides. The fascist
paramilitaries are used to attack the Donetsk and
Luhansk 'republics' while Russia has its own agents
keeping the lid on the workers armed defence from
breaking out into a revolutionary movement in the
East.
Against the Stalinophobic left that defends the Kiev
regime from the legacy of Russian Stalinism, and the
Stalinophile left that backs the Russian imposed
leadership in the East who are for secession and
annexation by Russia, we take Trotsky's position on
Ukraine. We are for the workers of the East to make
a united front with workers of the West against the
Kiev regime and bring the war to an end. We are
against the direct intervention of the US and NATO
in West Ukraine and against the direct intervention
of Russia in the East. We are for a united Ukraine
workers socialist revolution the removes the
oligarchic pro-fascist regime and puts in place a
Workers and Peasants government able to build an
Independent Soviet Ukraine.

Either an imperialist or a workers

Eurasia!
It's clear from Escobar's very catchy enthusiasm for
a BRICS bloc as an alternative to US hegemony that

Spring 2015

the greatest danger to the world's workers is to

mistakenly tie their revolution to the new great
powers, Russia and China. Russia and China are not
'progressive' in offering workers a peaceful, gradual
transition to market socialism. They form a rising
imperialist bloc that challenges the dominance of the
US, not on behalf of workers, but as the successors
to the US global
dominance. Russia and
China no less than the
US and its allied powers
are in a fight to the death
to grab what remains of
the earth's resources of
land, labour and energy
and to do what is
necessary to extract more
surplus value to return a
profit on their multitrillions of accumulated
capital assets.
As we have seen in the
cases of Iran, Greece and Ukraine, where these two
giant imperialist blocs clash, such dependent nation
states must be being fought over by the rival
imperialist blocs. Despite its nuclear deal, Iran has
been lost to the US. This raises the stakes for a
showdown between Israel and Iran. But as Escobar
says, any attacks by the Israeli/neo-con lobby on
Iran will now be against the SCO. Not as Escobar's
anti-imperialist security organisation of course, but
as the armed forces of the Russia/China bloc (now
including Kazakhstan, Kyrgyzstan, Uzbekistan, and
Tajikistan, India and Pakistan). Greece will be sold
off to the highest imperialist bidders unless the
workers make a revolution and open the road for the
rest of the Euro 'trash' to break free from their
imperialist overlords. Ukraine's ongoing war in the
East is a class war that can turn into a civil war
across the whole of Ukraine to reclaim the
Independent Socialist Ukraine and set an example to
the other states torn between US, EU and Russia and
China.

For Permanent Revolution against

imperialism, West and East!
For a Workers Socialist Federation of
Eurasia!
For a new World Party of Socialism
based on the 1938 Transitional Program!
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Class Struggle 114

Spring 2015

Lets Finish the Permanent Revolution

We defend Lenin and Trotsky on imperialism and permanent revolution against the
centrist tendencies such as the LCFI and RCIT who revise Lenin on imperialism and
Trotsky on Permanent Revolution. If revolutionaries do not understand imperialism
they cannot know the class enemy and so they turn permanent revolution into a
caricature of the socialist revolution and a program for defeat and demoralisation.
Once again the cause of the current crisis of revolutionary leadership can be traced
back to the crisis of Marxism faced by Trotsky in the late 1930s. For a new
revolutionary international based on Trotskys transitional method and program of
1938! Here we summarise our latest response to the RCIT in Permanent Revolution.
As far as we know, the LCFI dont say that capitalist
semi-colonies cannot become imperialist. But they
do argue that today Russia and China are capitalist
semi-colonies that cannot become imperialist
because of the hegemonic power of US imperialism.
We see this as an empiricist position that does not
exclude Russia and China becoming imperialist in
the future. The bankruptcy of this wrong position on
Russia and China is the class betrayal of the AIUF
as a popular front with imperialist Russia and/or
China as countries supposedly oppressed by the US
bloc.
RCIT takes the opposite view that
not only can Russia and China
become imperialist because of their
past history including that of
Degenerate(d) Workers States
(DWS), but also that there is no
reason why capitalist semicolonies cannot do so too, for
example the Republic of Korea
(ROK) and Israel. For the RCIT,
Brazil and India are not yet
imperialist
because
their
economies are not strong enough
to extract more surplus value abroad than is
extracted from them by imperialist powers. For
them, it cannot be excluded that in 'exceptional
circumstances' (itself not a Marxist argument, rather
an empiricist one,) they too can become imperialist
countries. This is not the Marxist method but the
bourgeois empiricist method of evolutionary
Marxism nuanced by contingencies.

Imperialism is a zero-sum game

The problem with the "semi-colony-to-sub-and-notyet-imperialism" scenario that everyone uses from
PTS (not yet") to RCIT (not yet in Brazil, but

already in Russia, China, Israel and ROK) is that it

contradicts Lenin's theory of imperialism. It is an
empiricist concept of transition from semi-colonial
status to imperialism. Where it has been applied to
capitalist semi-colonies, like Brazil, or India, and
now Russia and China, it implies an evolutionary
trajectory of potential new imperialisms redividing a global sum of surplus value and world
power by some relatively peaceful democratic
means. The bankruptcy of this position is that it
fosters illusions that the national bourgeoisies of
oppressed countries have the capacity to develop the
forces of production and become
economically independent of
imperialism short of permanent
revolution.
The inclusion of Russia and
China in this list of actual or
potential new imperialisms as
'transitional from 'semi-colonial'
to 'imperialist' is clearly wrong.
Russia and China made the
transition from 'semi-colonies' to
Degenerate(d) Workers States
re-dividing the imperialist world
by revolutionary wars and developing the forces of
production. It ignores the significance of permanent
revolution in breaking from imperialism and
overthrowing the bourgeoisie through the formation
of workers states. Therefore it also ignores that the
democratic counter-revolutions in the workers states
did not destroy the state control of the economy
which allowed the bureaucracy to change from
parasitical caste to a state capitalist class without
regressing to the status of semi-colonial compradors.
To be clear, we stand with Lenin and all those who
think that semi-colonies cannot break with
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Class Struggle 114

imperialism short of permanent revolution. In the

imperialist epoch the bourgeoisie can no longer
develop the productive forces; on the contrary,
capitalism is destructive. The emergence of new
imperialist powers is not possible because it is
assumed that the bourgeoisie is able to develop the
productive forces to the point where a country can
achieve independence from imperialism peacefully.
In the imperialist epoch the only way to achieve
independence from imperialism is making the
permanent revolution.
Thus countries such as Israel, South Korea and
Australia are not imperialist. No matter how many
global monopolies have arisen in semi-colonies
since the Second Imperialist War, these are
subordinated to the existing imperialist division of
labour of the existing imperialist powers and lack an
independent finance capital or sphere of influence.
We show this with Israel and ROK by arguing that
their 'independent' capitalist production is actually
dependent on their subsidised role as armed outposts
of US imperialism. These countries cannot be
imperialist as understood by Lenin if they are
occupied by imperialism, or are occupiers on behalf
of imperialism, and so lack national economic
independence from existing imperialism.
However, if there is no Leninist law which allows
new imperialisms to emerge in this epoch, we have
to explain that the path of Russia and China to
imperialism is not an exception to Lenins laws of
motion of capitalism in the imperialist epoch. The
emergence of China and Russia as imperialist
countries must be understood as affirming Lenins
theory of imperialism and Trotsky's theory of
Permanent Revolution, not their revision. It affirms
Marx, Lenin and Trotsky because it proves that
permanent revolution threw out the national
bourgeoisie, allowing Russia and China to develop
as degenerate(d) workers states. They could develop
the forces of production beyond that of capitalist
semi-colonies because they had won their economic
as well as political independence from imperialism.
So China and Russia are imperialist countries today
because they won their economic independence and
developed their productive forces through the
permanent revolution.

Completing the Permanent Revolution

This post-capitalist development had its limits,
namely the failure to build healthy workers states
based on workers democracy and planning, and the
isolation of the DWSs from the capitalist world

Spring 2015

economy. Thus the permanent revolution completed

the bourgeois revolution but did not develop the
socialist revolution and internationalise the
revolution. This failure led to the stagnation of the
economy and ultimately the capitalist counterrevolution. However the permanent revolution in
Russia and China was not driven back to the prerevolutionary period before 1917. Russia and China
could re-enter the capitalist world economy without
regressing to the status of oppressed semi-colonies
of the existing imperialisms. State capital
accumulation allowed the formation of a national
bourgeoisie that was then forced by the logic of
Capital to embark on an imperialist course and go
beyond national borders to survive.
Those who argue that China and Russia are semicolonies or "sub-imperialist", do not recognise the
reality of the inter-imperialist struggle, and
objectively take the side of one imperialist bloc
against the other. They suggest that the imperialist
epoch is not destructive of the forces of production
which necessitates the transition to socialism, but
capable of developing the productive forces so that
semi-colonies can make the "transition" to
imperialism. We are asked to believe that the
bourgeois revolution is still progressive provided it
is driven from below, and it is possible that the new
imperialisms can be reformed from below. They
revise Lenin and Trotsky, claiming that in the
imperialist epoch "new powers" such as the BRICS
form a global popular front between the proletariat
and the progressive bourgeoisie and build a
multipolar world" to defeat the hegemonic USA
without inter-imperialist war.
Therefore, only the correct understanding of the
permanent revolution as the strategy of international
socialist revolution from 1850 to the present can
explain why Russia and China could become
imperialist in the epoch of imperialism after the First
Imperialist War, and why no other country has been
able to break into the imperialist club. There is no
bourgeois evolutionary socialist road to a peaceful
multipolar world when the two big imperialist
blocs are driven to a Third Imperialist War in the
struggle to survive. The need for a new
revolutionary international party based on
Trotskys transitional method and program,
dedicated to the strategy of Permanent Revolution,
capable of defeating the bourgeoisie and its agents
in the working class, and opening the road to the
socialist revolution, must be the order of the day.
16

Class Struggle 114

Spring 2015

Greece: No Electoral Solution!

There is no electoral solution because electing parliamentarians will not prevent the
keys to banks, factories, ports and airports being turned over to the privatizers of
the capitalist Troika or to Chinese imperialist firms. The decision to strip Greece of its
assets was not made in a Greek parliament but was made by European central
bankers and any decision to fight them and save these assets will not be made in
any parliament but by the workers themselves armed and organized in the streets
against both the Golden Dawn and NATO. This is the only way these assets can be
saved when our social class is confronted by the fascists and threat of NATO military
intervention combined. And what happens to Greeks today will happen to the other
PIIGS nations (Portugal, Italy, Ireland, and Spain) tomorrow.
The "Popular Unity" is a Greek Tragedy
Reformists always promise their next new model
government power formula will be 'different this
time.' As the world crisis of capitalism stumbles into
its eighth year facing collapsed European Central
Bank (ECB) world growth forecasts through all of
2017, SYRIZA has at
last split, with 25
deputies breaking from
the Tsipras group and
forming
the
new
"Popular Unity Party,"
the LAE. Twenty five
delegates makes LAE
the 3rd largest party and
forces Tsipras to call
Parliamentary elections.
Soon many of these
delegates will be out of
work, of course, and
they deserve this. Fate works that way in politics as
well as in drama.
We think this split was very late and it was only
coincidentally a split from the popular front
SYRIZA had made last January with the ANEL
party nationalists. Late and a lame split too. To
think that a 'last year's SYRIZA' political reconfiguration, consciously sold as such even in the
aftermath of the OXI ("NO!") referendum vote, will
answer the needs of the oppressed and desperate
Greek masses is for Marxists a tragic failure of
imagination.
It was last year's SYRIZA that put the masses up to
staking everything on parliamentary elections and
closed up shop on the Popular Assemblies. This is
the essence of Kautskyism. It sees parliamentarism
as the highest expression of democracy and

suppresses the criticism of this view made by Marx

and Engels themselves. These vanguard
representatives' turned out to be as useless as they
were helpless when called upon to act and stop the
parliamentary betrayal that utterly contradicted the
OXI referendum.
The whole conduct of
the
"left"
players
around
former
government Minister
Lafazanis and the very
name they have taken,
sometimes styled as
the Popular Unity
Front (!), suggests that
they
are
seeking
another popular front
in spite of recent
history and the history
of all popular fronts
including Allende's, from whom they have learned
the wrong lesson, i.e., that this time will be different
and they will find the peaceful road to socialism.
And in fact they have called for a popular front, the
OXI front, to the international cheers of every
Kautskyite and otherwise rotten group on the left!
Promises, Promises from Both Sides of the
Mouth:
Some, such as the International Marxist Tendency
(IMT), were already buried in SYRIZA and will
automatically continue as entrists in the LAE.
Others, like the RCIT, who must seem like our
favorite whipping boys, see the LAE's intention to
form a popular front and advocate revolutionists do
entry work in it anyway! They say struggle to
"...make LAE an activists' party." Just now (9/15)
LAE is polling between 2 and 3%. The RCIT calls
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Class Struggle 114

for a critical support vote for the new-last-year'sSYRIZA, as if the masses experience with these
very delegates does not exist, or matter if it does.
Greece is facing the crisis brought to it by the EU
and the imperialists. The EU and German
imperialism are in trouble and they will impose a
diktat of this kind in each of the PIIGS. The
pressure of history will be felt directly by the
workers to take the struggle outside parliament
because they voted NO and it made no difference.
We are not the sectarians who reject electoral
politics out of hand. But a revolutionary party in
Greece would stand as tribunes of the people on a
transitional program beginning with an action
program; not entry in the LAE, but organizing the
masses into workers councils.

Spring 2015

popular front government massacring striking

miners at Marikana and not a few farm workers in
the strike waves that followed, the PT in Brazil
breaking up land occupations and the PSUV serving
the Bolivarian-Bourgeoisie in Venezuela by
protecting capitalist firms from expropriation by the
masses. Anyone who is not a World Social Forum
sycophant knows these things happen and we warn
that the Greek workers are going to find out soon.
We agree with the dock workers of Piraeus who say
Greece is the experiment and that the ECB and
German imperialism are set to strip all the assets
and swipe all the treasuries of the countries on the
European periphery.

Those who want to give critical support to a handful

of LAE MPs abandon the Leninist method of using
critical support to expose the reformists in front of
their electoral base. The LAE has no more of an
electoral base than ANTARSYA and will
undoubtedly seek out popular front partners and has
said as much.
The RCIT would have you believe that yesterdays
SYRIZA party bureaucrats, reformists to the core,
were the OXI movement vanguard of the working
class, and because these workers still have illusions
in the parliament this justifies calling for critical
support and entry too! But the mass support turns
out not to exist because the masses have seen
through their act.
In the RCIT prescription there is no accounting for
the masses experience in the last year. None of
these ex-SYRIZA parliamentary delegates are guilty
of bringing the masses to this impasse apparently
and none of them will be held accountable. They are
projecting a vanguard which never rejected the
popular front idea and only belatedly broke with
SYRIZA. And then only when it was too late. The
third memorandum was passed over their essentially
toothless objections.
We call for revolutionists to accompany the workers
to the polls to make plain that no electoral solution
can exist. There is not a moment to lose for the
building of workers councils and workers militias to
prepare to defeat the fascist danger.
Transitional Program or 21st Century Socialism?
We say the hallmark of 21st Century Socialism is
when the workers take over the factory the 21st
Century Socialist police come in and give it back to
the boss. Variously, it can be defined as an ANC

In Jacobin of August 21st Stathis Kouvelakis former

member of the central committee of SYRIZA and
Left Platform founding member of LAE stated,
The front will also struggle for an unitary
internationalist struggle around common objectives
at the European and international level and will
support exiting NATO, breaking the existing
agreements between Greece and Israel, and
radically opposing
imperialist
wars
and
interventions. This transitional program is situated
in a perspective of socialism of the 21st century. It
is a novelty unsupportable by history to make any
equation between any known transitional program
and the project of 21 st Century Socialism. These
are known quantities to Marxists and are based on
wholly different methods.
The first task of a transitional program is to stop the
privatizations and to do this with workplace
occupations and armed pickets to prevent the
turning over of the keys and the deeds to the
imperialist bankers and firms.
Out of these
workplace occupations the immediate task will be to
reorganize the Popular Assemblies nationwide and
to organize them to take on ever increasing self18

Class Struggle 114

government tasks.
What LAE opposes is any
transitional program worthy of the name as it would
call for workers to power and a planned economy,
whereas this LAE program calls for a decentralized
economy. And is the LAE preparing the working
class for the conquest of power?
Do these
parliamentarists even contemplate the seizure of
power by the working class per se? We think the
answer is no.
What
are
LAE
deputies likely to do
in a new parliament?
Already it is evident
that it is not just
German imperialism
but also China and
Russia (the Shanghai
Cooperation
Organization,
{SCO})
are
competing to strip
Greeces
assets.
While the LAE and
the KKE want to break from German imperialism
and the EU, they are opening a road to the
Russia/China bloc. Their historical links to the 21st
Century Socialism movement predisposes them to
seeing Russia and China as progressive nations,
not as imperialist rivals to the U.S.-led imperialist
bloc.
Sowing illusions in this bloc as saviors from rapine
European banks is conning the workers with the
program of 21st Century Socialism, which will turn
out to be just as fatal as it is in Venezuela or South
Africa. A different group of capitalists will be
stealing everything the Greek workers make for
generations to come. Already it is obvious that the
record of the Chinese SCO/BRICS partners has
been to insist upon the fulfilment of promises made
by the previous Greek government to give them
ownership and control of the port of Piraeus and this
is proceeding and meeting resistance from the
workers self-activity alone.
We will march with the Greek workers on the 19th
in their mobilizations with the demand that the
workers' organizations initiate workers councils that
defend themselves and fight for a workers
government. Revolutionists must stop by the polls
on the 20th as proof positive that we march into
every battle with our class, if only to warn the
masses of their lemming-like march over the
precipice.

Spring 2015

We make no endorsement, nor do we call for any

critical support vote; this election is the work of and
the result of acquiescence to the Troikas agenda.
This election is held for the bourgeoisie to dispense
with SYRIZA and LAE alike. This is no time for
electoral politics and indeed there is no electoral
solution! We go to the polls and say to the
supporters of the LAE that there is no time to delay
the building of the workers councils and workers
militia because the
lemmings are going
to parliament while
the
fascists
are
preparing the abyss.
The
LAEs
economic program
is
essentially
Keynesian.
State
capitalist
interventions, albeit
presented
with
allusions
to
'workers control,'
and limited nationalizations and plans to renegotiate
part of Greeces debt altogether are nothing more
than another parliamentarian trap. For the workers
the only road to socialism is through their own
action committees, their own councils and defense
guards embracing the refugees, crushing the fascists
and breaking with NATO. Internationalist antifascist unity, anti-imperialist mobilization and
solidarity with immigrants and the revolutionary
upsurge across MENA, and in particular the
Palestinian cause, create an opening for permanent
revolution to unite the workers of MENA and
Europe and turn the tide against the proliferation of
proxy wars between the two imperialist blocs,
against the theocrats, Islamists, Zionists and the
overarching military domination of the US
imperialist bourgeoisie.
There is no anti-imperialist united front possible
with any national bourgeoisie. We must show the
masses that their victory requires a break from
their own national bourgeoisie both in program
and in organization.
Victory is only possible when the workers build
their own revolutionary party and international
based on the method of the 1938 Transitional
Program.
Liaison Committee
09/15/2015

of

Communists

(LCC)

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Class Struggle 114

Spring 2015

What We Fight For

Overthrow Capitalism
Historically, capitalism expanded world-wide to free
much of humanity from the bonds of feudal or tribal
society, and developed the economy, society and culture
to a new higher level. But it could only do this by
exploiting the labour of the productive classes to make
its profits. To survive, capitalism became increasingly
destructive of "nature" and humanity. In the early 20th
century it entered the epoch of imperialism in which
successive crises unleashed wars, revolutions and
counter-revolutions. Today we fight to end capitalisms
wars, famine, oppression and injustice, by mobilising
workers to overthrow their own ruling classes and bring
to an end the rotten, exploitative and oppressive society
that has exceeded its use-by date.

Fight for Socialism

By the 20th century, capitalism had created the preconditions for socialism a world-wide working class
and modern industry capable of meeting all our basic
needs. The potential to eliminate poverty, starvation,
disease and war has long existed. The October
Revolution proved this to be true, bringing peace, bread
and land to millions. But it became the victim of the
combined assault of imperialism and Stalinism. After
1924 the USSR, along with its deformed offspring in
Europe, degenerated back towards capitalism. In the
absence of a workers political revolution, capitalism was
restored between 1990 and 1992. Vietnam and China
then followed. In the 21sst century only Cuba and North
Korea survive as degenerate workers states. We
unconditionally defend these states against capitalism
and fight for political revolution to overthrow the
bureaucracy as part of world socialism.

Defend Marxism
While the economic conditions for socialism exist today,
standing between the working class and socialism are
political, social and cultural barriers. They are the
capitalist state and bourgeois ideology and its agents.
These agents claim that Marxism is dead and capitalism
need not be exploitative. We say that Marxism is a living
science that explains both capitalisms continued
exploitation and its attempts to hide class exploitation
behind the appearance of individual "freedom" and

"equality". It reveals how and why the reformist,

Stalinist and centrist misleaders of the working class tie
workers to bourgeois ideas of nationalism, racism,
sexism and equality. Such false beliefs will be exploded
when the struggle against the inequality, injustice,
anarchy and barbarism of capitalism in crisis, led by a
revolutionary Marxist party, produces a revolutionary
class-consciousness.

For a Revolutionary Party

The bourgeois and its agents condemn the Marxist party
as totalitarian. We say that without a democratic and a
centrally organised party there can be no revolution. We
base our beliefs on the revolutionary tradition of
Bolshevism and Trotskyism. Such a party, armed with a
transitional program, forms a bridge that joins the daily
fight to defend all the past and present gains won from
capitalism, to the victorious socialist revolution.
Defensive struggles for bourgeois rights and freedoms,
for decent wages and conditions, will link up the
struggles of workers of all nationalities, genders,
ethnicities and sexual orientations, bringing about
movements for workers control, political strikes and the
arming of the working class, as necessary steps to
workers' power and the smashing of the bourgeois state.
Along the way, workers will learn that each new step is
one of many in a long march to revolutionise every
barrier put in the path to the victorious revolution.

Fight for Communism

Communism stands for the creation of a classless,
stateless society beyond socialism that is capable of
meeting all human needs. Against the ruling class lies
that capitalism can be made "fair" for all; that nature can
be "conserved"; that socialism and communism are
"dead"; we raise the red flag of communism to keep alive
the revolutionary tradition of the' Communist Manifesto
of 1848, the Bolshevik-led October Revolution; the
Third Communist International until 1924, the
revolutionary Fourth International up to 1940 before its
collapse into centrism. We fight to build a new, Fifth,
Communist International, as a world party of socialism
capable of leading workers to a victorious struggle for
socialism.

For a New World Party of Socialism!

Class Struggle is the bi-Monthly paper of the Communist Workers Group of New Zealand/Aotearoa, in a Liaison
Committee of Communists with Communist Workers Group (USA) and Revolutionary Workers
Group (Zimbabwe)
Class Struggle and most articles are online at http://redrave.blogspot.com
Phone +64 0272800080 Email cwg2007@hotmail.com
Archive of publications before 2006 http://communistworker.blogspot.com/

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