Sep 4, 2018
Translated from an article by Lutte Ouvrière, the French Trotskyist organization; it appeared in LO’s journal, Lutte de Classe 194, September-October 2018
There is an underlying organic link among the different events in a chaotic world situation. The economy, international relations and the political evolution of imperialist powers, as well as the inability of humanity to face the environmental consequences of its own activity, from global warming to the transformation of the oceans into a garbage bin – all these things are profoundly related.
All these multi-faceted events are expressions of the current crisis of the world capitalist economy. We are referring to the current crisis because crises have been part of the capitalist economy since its beginnings and constitute a sort of normal regulator.
In June 1921, during the Third Congress of the Communist International, talking about the “ordinary” crises of capitalism, Trotsky declared: “As long as capitalism is not broken by a proletarian revolution, it will experience the same ups and downs, the same cycles. Crises and recoveries have been proper to capitalism from the day of its birth and they will accompany it to its grave.”
But he also noted that “during the phases of rapid development of capitalism, crises do not last long and they are superficial.... During the phases of decline, crises last long and the recoveries are momentary, superficial and based on speculation.”
The underlying evolution, the deciding weight of finance, the “transformation of shareholders into social parasites” (Trotsky, Marxism in Our Time, 1939), and the disintegration of the capitalist economy are nothing new. Nor is the financialization of the economy, even if the current crisis is markedly underlining its damage.
This analysis had already led Lenin, a century ago, to describe imperialism as the “senile phase” of capitalism and Trotsky, in the Transitional Program, to speak of the “agony of capitalism.”
This agony is lasting much longer than Lenin and Trotsky had hoped for. But the lifetime of a social and economic organization of society cannot be measured on the same scale as human life. Humanity has paid the costly price of two World Wars for the enduring agony of the capitalist organization of society.
In the aftermath of World War II, the decline of capitalism seemed to have been overcome. But the remission was both limited and superficial. It lasted not much longer than two decades, less than the time spent since the successive crises that started in the early 1970s. The collapse of the international monetary system launched a long period of more or less violent financial convulsions, against a background of overall stagnation in production and of mass unemployment from which the capitalist economy hasn’t been able to recover.
What does it mean? It means that the market, that is to say, the purchasing power of a great portion of the people, of the laboring population and especially wage-earners, is not expanding. In fact, it is even decreasing to the point that companies cannot count on increasing sales to increase the profits of their owners and shareholders.
Science and technology continue to make progress despite all the obstacles created by private property in the means of production and despite competition between monopolies. But this progress further exacerbates one of the fundamental contradictions of the capitalist economy, that is, the contradiction between the unlimited possibilities of production and the limits of the markets.
The overall growth of production isn’t enough to ensure a steady increase in the total surplus value which is extracted through the exploitation of workers involved in the production process and which the capitalists appropriate for themselves.
In an economy based on private profit, the struggle among the capitalists – each trying to get their own hands on a bigger share of the surplus value – becomes more ferocious and more brutal.
This war among capitalists, where the strongest crush the weakest, weighs down on production. The individual interests of each capitalist are opposed not only to the collective interests of society, but also to the interests of the capitalists as a social class.
In their dealings with the exploited class, the capitalists behave as a class sharing collective interests. But at the same time, the law of the jungle is the basis of the relationships among capitalists. These are two aspects of the same reality.
This dialectical opposition between the overall interests of the capitalist class and the individual interests of each capitalist is exacerbated by the financialization of the economy.
The bourgeoisie has many sorts of revenues but the most attractive today are financial revenues. Production provides a smaller return to the owners of big capital than do financial operations. This is why big capital invests more and more in financial products and less and less in the production of goods.
The development of finance means that finance extracts an ever larger share of the total mass of profit generated.
When the media talk about economic “growth” they usually mean the growth of the financial profits and of the profits made by the strongest enterprises, which guarantee the wealth of their owners and shareholders. Financial capital has commanded the capitalist economy since the early years of its imperialist phase. The more the economy is financialized, the more finance becomes a parasite living off all the forms of concrete economic activity.
The fact that the same capital, monopolized by the big bourgeoisie, is behind all forms of economic activity changes nothing – the entire economy must pay dues to finance. The parasite of finance eats away at the whole capitalist economy from the inside.
The competition between capitalist groups for the division of global surplus value is carried out based on their class war against the working class in order to increase the total surplus value.
Because they are exploited, workers suffer from the aggravation of exploitation (if they have a job) or from the curse of unemployment (if they don't have a job).
As customers of public services, hospitals, nursing homes, schools and public transport, they suffer the consequences of a deteriorating system due to the state’s budget cuts to feed finance.
Financialization takes the anarchy of the capitalist economic system to an extreme and increases competition between capitalist companies and between capitalist nations.
When the pile of bones isn’t big enough, dogs will rip each other to shreds. And the winners will be the most brutal, the most cunning and strongest dogs against the smallest and the weakest!
It is this economic situation that, in the last resort, controls the whole current political situation, both nationally and internationally.
In all countries, no matter what the situation or political labels of those in power, there are anti-working-class measures and austerity policies. Political labels may change, but the objective is the same: increasing the bourgeoisie’s share of national revenue. The highest and richest spheres of the bourgeoisie seek to increase their share by crushing working-class conditions but also by reducing the revenues of the small and middle bourgeoisie.
Internationally, this crisis encourages the rise of protectionism or, in other words, state intervention on a national level where each country protects their own capitalist class from their competitors. Take for example the commercial wars waged by the United States against China and against Europe, the more discreet wars between European states, including states within the European Union (EU), or the commercial wars of all the imperialist powers against poorer countries – for which the word war itself is not even appropriate because it is a one-way war, arms being so unequally distributed. It is true that in the matter of war even the imperialist powers of second rank in Europe do not measure up against American imperialism, in particular because of their divisions. Suffice it to look at the miserable lamentations by European leaders in front of the American juggernaut imposing its total or partial boycott of Iran and Russia, not to speak of Cuba or many others.
These commercial wars are all the more complicated—all the more absurd maybe, if absurdity on this matter was not an aspect of capitalism itself—considering that their economies are so interdependent that many protectionist measures of one country against another are turning against their own capitalists whose capital is invested in the rival country. It is no doubt for this reason that Trump talks more than he acts and that his protectionist threats are in many areas more verbal threats than actual deeds. But in a financialized world economy in which assets are transferred to a large extent for speculative purposes, virtual threats have unpredictable, real consequences.
Military conflicts, which are localized for the moment, are a direct or indirect expression of economic wars. This is particularly true in the Middle East where competition between great powers has always been sharp because of the oil resources and where it is exacerbated even more in periods of crisis. Those who are dying under the bombs in Idlib in Syria or those who were dying not long ago in Mosul or Aleppo are dying for this war of capitalist interests. Political leaders cannot even pretend they are dying for the motherland. The ones fleeing the bombs and joining the flow of migrants and trying to escape destitution or dictatorship are also victims of this war.
The chaotic situation of the economy is reflected in international relations as well as in the political life of every capitalist nation.
But at the same time politics interferes in the financialized economy where assets are transferred from one end of the planet to the other at the speed of light in order to obtain a profitable investment. The distinction between an investment in the means of production and a pure speculative short-term investment is being erased.
Imperialism imposed its domination through the blood and suffering of the peoples who were plundered by big capital from the colonizing countries. But to ensure the systematic and lasting plunder of goods and resources it was necessary to build roads, harbors and railways, etc. Plunder by financialized imperialism doesn’t even do that. Movements of capital are more unpredictable and more chaotic. Assets which are being transferred for speculative purposes go not only to shares, to monetary variations, or mineral resources like iron, copper, zinc, or agricultural resources like wood, wheat or wine. Speculative capital also gambles on states, their solvency, on entire countries and on the profitability of their economies. It races to a particular country at one point, takes as much money as it can and departs faster than it got there, leaving the country in ruins.
A governmental crisis, a political decision like Brexit (the UK’s departure from the EU), a protectionist measure by Trump, or the coming to power of the far right in Italy have caused speculative convulsions which are further exacerbating the economic situation. Political chaos is a reflection of economic chaos and vice-versa.
The bourgeoisie itself fears a catastrophic financial collapse, which bourgeois economists sometimes refer to as a systemic crisis. There is no point in discussing this eventuality, let alone when it might happen. Nobody can say that – not even the rulers of the economy, who do not rule anything.
The September 7 issue of the newspaper Le Monde noted, “it is not a real storm yet, but this autumn emerging markets are rocking dangerously.” Monetary jolts occurred in virtually identical terms in countries scattered around the globe: “On Wednesday 5 September, the Indonesian rupee fell to its lowest level since 1988, at the time of the Asian crisis. After the Turkish pound and the Argentinian peso in August, the South-African rand, the Russian ruble, the Brazilian real, and the Mexican peso have suffered a lot lately. The volatility of the currencies of emerging markets is close to the record highs reached in the wake of the financial crisis in 2008.” It was one more sign that the global economy is chaotic and at the same time interconnected.
These are not the first shocks since the crisis of the financial system broke out in 2008. They were yet another warning. How is it possible not to be reminded of Trotsky’s diagnosis on the world situation in his time, in 1938: “Growing unemployment ... deepens the financial crisis of the state and undermines the unstable monetary systems.... The bourgeoisie itself can see no way out.... Under the constant pressure of capitalist disintegration, imperialist antagonisms have reached a point beyond which separate clashes and bloody local disturbances (Ethiopia, Spain, the Far-East, Central Europe) must inevitably coalesce into a conflagration of world dimensions.”
The similarity between the situation described by Trotsky in his time and the situation today is not fortuitous. In spite of the distance in time and the differences between those situations, the convulsions of decaying capitalism are similar. So are the programs for the working class, which are necessary to confront the situation.
Whatever its further development, the current crisis of the capitalist economy has already thrown the living conditions of the working class backward by several years. The current crisis has affected all areas of social life, both directly and indirectly, just like the last major crisis did, beginning in 1929 and leading all of humanity into the barbarity of World War II.
The current crisis, which began in the 1970s, did not begin with a stock market crash as brutal as the one of Black Thursday in 1929. The current crisis has developed slowly over time, even with the serious financial crisis in 2008. However, the effects of this crisis threaten to be similar for all of humanity.
In the 1930s, the fundamental question of the time was: which social class will run society? The bourgeoisie leads society towards a collapse. The objective situation raises once again, in sharper fashion, the question of social revolution – a revolution which will destroy the power of the bourgeoisie and will lead to the taking of power by the workers organized as a powerful class, expropriating the bourgeoisie and starting to completely transform society, putting an end to both private ownership in the means of production and to an economy based on profit and competition.
The only social class capable of accomplishing this social revolution is the working class.
On several occasions in the past, the working class was able to build a party for itself with the aim of overthrowing the bourgeoisie.
In France, the first major party to have set itself such a goal was the Parti Socialiste (Socialist Party) but it has been in the camp of the bourgeoisie for a long time now. During Trotsky’s lifetime, it had already become a governmental party, but it still had roots in the working class. That’s no longer the case. The Parti Socialiste has become a reservoir of politicians devoted to the bourgeoisie and the capitalist order and it has declined drastically even though it used to be the bourgeoisie’s main left-wing party.
The Parti Communiste Français (French Communist Party), created with the aim of replacing the failing Socialist Party, nonetheless soon followed the same path. Historically, the only difference between them was that the Communist Party started first by serving the bureaucratic caste of the now defunct Soviet Union, before putting itself in service to the bourgeoisie. The path was different, but the end result is the same.
Trade unions, too, became more and more integrated into the state apparatus and evolved in the same way.
Confronted with the crisis, its consequences and the approaching war, Trotsky summed up the situation in 1938. He wrote: “The historical crisis of humanity is reduced to the crisis of the revolutionary leadership.” This idea was so fundamental that he repeated it three times in different ways in the Transitional Program.
Since Trotsky’s death, the pernicious effects of capitalist society have continued their destructive work. The former working-class parties have become the very instruments used to disarm the only social class capable of threatening the power of the capitalists by masking the very idea of class struggle and especially a class struggle consciously led by the working class, which cannot stop before overthrowing capitalist order.
But the struggle between social classes is not simply an idea – it is a reality that is rooted in the very social relations of capitalism. As the crisis worsens, the reality of the class struggle can only resurge.
The real issue today is to give the deep-rooted reality of class struggle a conscious political expression. This is the fundamental task of our time, the one that conditions all the rest.
Faced with the crisis and its consequences, the working class will necessarily raise its head. But it must do it under the banner of social revolution. It’s necessary that the working class give itself a program and build a party to embody it. This task is just as necessary now as it was in Trotsky’s days, despite the passage of time. That’s why the Transitional Program remains the best guide for revolutionary communists today.
We won’t go over here its different aspects nor on the way today to formulate what Trotsky called “transitional demands.”
Trotsky’s Transitional Program is not a set of recipes.
It is a program for the working class in action. As Marx already had said, “Ideas don’t become a material force until they have gripped the masses.” But revolutionary communists should not simply wait for things to happen. It is their duty to campaign for such a program – and to actively campaign for it even when it seems disconnected from reality and far from the consciousness of the working class.
In 1938, workers could no longer rejoice in the gains they had obtained with the 1936 General Strike. The war had started in China and Ethiopia, and the defeat of the Spanish Revolution announced the onset of World War II, a war which would not only annihilate all the previous gains made by the working class, but also plunge the entire society into barbarism.
In the mid-1930s, there was a mechanism which divided the world in two opposing sides that were to confront each other in World War II. There is no such mechanism at work today. History never repeats itself in an identical way. However, the many local wars that have never really ceased might spread and lead to war on a global scale.
Objectively, the level of consciousness of the working class is far from what is required by the objective situation of capitalism. But as Trotsky explained in a discussion of the Transitional Program in 1938: “The scientific nature of our activity resides in the fact that we adapt our program not to political circumstances nor to the current mood of the masses but to the objective situation represented by the class-based economic structure of society.”
It is this objective situation that will eventually make demands based on workers’ class interests a necessity, provided that these demands be put forward inside the working class and be opposed to the illusions spread among the workers by the bourgeoisie and its advocates.
The only way to effectively fight unemployment from the viewpoint of the political interests of the workers and of their mobilization is to impose the sharing out of work among everybody, without a loss in wages, starting with a ban on layoffs. Agitation around this issue is as simple as it is indispensable.
The demand to guarantee the purchasing power of wages and pensions by automatically increasing them as prices go up may have seemed out of place while inflation was moderate. But it can become quickly very relevant as it did in Turkey where workers recently saw their purchasing power drop brutally when the value of the Turkish lira plummeted compared to the dollar. In some circles of the bourgeoisie, a return to higher inflation has not only been forecast, but hoped for.
The need to establish workers’ defense groups may seem a long way off from workers’ concerns, but it could quickly become a burning issue for workers if they don’t want to suffer what workers suffered in the past, whether it be in Italy under Mussolini or in Germany under Hitler, even before the Fascist or Nazi parties came to power.
The rise of an active and violent far right in Germany represents an immediate danger for immigrants and for those who stand in solidarity with them. This is a threat to all workers, to their organizations, to the few democratic freedoms that remain in imperialistic democracies. If the tracking down of immigrant workers isn’t stopped soon it will inevitably be turned into the tracking down of workers in general. Workers in Germany, whatever their origins, may be forced to set up means to defend themselves and their trade unions even though the unions have been completely integrated into the bourgeoisie’s political system.
Recently, there have been more and more reactions to decisions made by large companies that seek to establish themselves in areas without taking into consideration the environment of the region or the lives of the people who live there, for example against the huge multinational La Montagne d’or (Mountain of Gold) in French Guiana. The building of new infrastructures like highways, airports and railroads by the state also causes controversy because it’s questionable how useful they really are. More generally, decisions that are based solely on private interests, damaging the interests of the community, give rise to reactions coming from society. Sometimes such reactions take the form of protests against the harmful nature of an industrial complex or other infrastructure project.
New associations and organizations are sprouting. Some incarnate such protests while others seek to popularize ideas concerning transparency and traceability in a bunch of different areas including nutrition.
These preoccupations, like the associations that embody them, originate from the petty bourgeoisie. In both substance and form, they bear the mark of this social class, its narrow vision of the evils of society and its incapacity to attack the root of the evil and to call capitalism into question. Because the petty bourgeoisie is incapable of attacking capitalism, it tends to formulate its demands morally in terms of good and evil. Ultimately, the prospects of the petty bourgeoisie are limited to making capitalism better and more in tune with humanity and nature. This is both utopian and reactionary. Demonstrations inspired by the political aspirations of the petty bourgeoisie can sometimes lead to partial successes or make the government back down on a particular project depending on the degree of mobilization. However, such successes can only be, at best, partial and leading into a dead end, and, at worst, skewed towards individualistic, conservative or reactionary demands. The adventures and dead-ends of “political ecology” illustrate the profound incapacity of the petty bourgeoisie as a social class to rise up against the general problems facing humanity, be it climate change or the deterioration of the oceans and atmosphere.
The working class, in all its diversity, is the only class capable of transforming the mushy idea of transparency into a real, genuine control over the actions of the capitalist class. It can do so only by leading to its very end the fight for its vital demands based on its class interests. The working class is the only social force at the heart of production, transportation and distribution of material goods. It is present through a whole armada of employees in banks, multinationals and insurance companies, etc., right in the heart of the financial institutions. Only the working class can really control the capitalist class right where its economic power lies. Workers’ control over capitalist enterprises is a first step towards the expropriation of the big bourgeoisie.
The lifting of business confidentiality and trade secrets and workers’ control over production and banks may seem farfetched today, but they are as inscribed in the logic of workers’ demands as are the sharing out of work among all and the sliding scale of wages and pensions. Workers’ control gives these demands full meaning and also makes them possible. That’s why it’s necessary to formulate these demands, to consider them as the base of a working-class program for current and future struggles. To paraphrase Trotsky, even if this program does not correspond to the current state of mind of the workers, it corresponds to what is objectively necessary.
It goes without saying that revolutionary communists must find ways of clearly expressing these demands and making them understandable. They must take into consideration the prevailing concerns of the day, whether they be political or economic, in order to anticipate the future when the working class will mobilize.
Revolutionary communists must learn to use current affairs and all the damage caused by decaying capitalism not to remain confined to partial solutions or, worse, offer dead ends.
The only thing that must guide us is the profound conviction that the proletariat is the only force capable of overthrowing the power of the bourgeoisie and sparing humanity from heading backwards, either slowly or brutally, into barbarism.