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Samir Amin: Popular Movements Toward Socialism

The article below by Samir Amin is well worth reading by all interested in a political economy of transformation to socialism. It was published in June’s issue of Monthly Review. Popular Movements Toward Socialism: Their Unity and Diversity The following reflections deal with a permanent and fundamental challenge that has confronted, and continues to confront,

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Samir Amin: Popular Movements Toward Socialism

The article below by Samir Amin is well worth reading by all interested in a political economy of transformation to socialism. It was published in June’s issue of Monthly Review.

Popular Movements Toward Socialism: Their Unity and Diversity

The following reflections deal with a permanent and fundamental challenge that has confronted, and continues to confront, all popular movements struggling against capitalism. By this I mean both those of movements whose explicit radical aim is to abolish the system based on private proprietorship over the modern means of production (capital) in order to replace it with a system based on workers’ social proprietorship, and those of movements which, without going so far, involve mobilization aimed at real and significant transformation of the relations between labor (“employed by capital”) and capital (“which employs the workers”). Both sorts of movements can contribute, in varying degree, to calling capitalism into question; but they also might merely create the illusion of movement in that direction, although in fact only forcing capital to make the transformations it would need to co-opt a given set of working-class demands. We are well aware that it is not always easy to draw the boundary between efficacy and impotence in regard to the strategies resorted to by these movements, no more so than to determine whether their strategic aims are clashing with their tactical situation.

Taken as a whole, many of these movements can be termed “movements toward socialism.” I borrow this phrase from the terminology introduced during recent decades by some South American parties (Chilean, Bolivian, and others). These parties have given up the traditional aim of Communist parties (“take and hold power to build socialism”), substituting for it the apparently more modest aim of patiently constructing social and political conditions which allow an advance toward socialism. The difference derives from the fact that the building of socialism as proposed by those Communist parties stemmed from a preconceived definition of socialism, derived from the Soviet experience, which can be summed up in two terms: nationalization and state planning. Those parties choosing the label “movement toward socialism” leave as an open question the specification of the methods to be used in socializing the management of a modern economy.

Some, but not all, of these organizations and parties that portray themselves as socialist, or even communist, claim to be the heirs of Marx and even sometimes of the versions of Marxism inherited from Sovietism and/or Maoism.

In fact the triumph of capitalism since the industrial revolution, and its globalization through imperialist expansion, have simultaneously created the conditions for the projected emergence of a higher universal socialist/communist form of civilization. Many streams came together in this invention. Engels, and Lenin after him, gave a well-known classification of its Marxist variant: English classical political economy, French utopian socialism, and German Hegelian philosophy. But this classification simplifies the reality and leaves aside many pre-and post-Marxian contributions.

Of course, Marx’s contribution to formulating the socialist/communist project was the critical breakthrough in its elaboration. Marx’s thought, in fact, was elaborated on the basis of a rigorous scientific critical analysis of capitalism taking into account all aspects of its historical reality. This had not been the case with previous socialist formulations or later ones that disregarded Marx. The formulation of capitalism’s own law of value; the specification of the long-run tendencies of capital accumulation and of their contradictions; the analysis of the relationship between class struggles and international conflicts and likewise of the transformations in methods for managing accumulation and governance; and analysis of the alienated forms of social consciousness—these together define the thoughts of Marx that initiated the unfolding of historic Marxisms, especially those of the Second and Third Internationals, of Sovietism and of Maoism.

The Central Place of the French Revolution in Forming the Modern World

In my understanding of the modern world’s construction, the French Revolution takes a central place. It defined a system of values—Liberty, Equality, Fraternity (in present-day terms, Solidarity)—that founded modernity on its fundamental contradiction. In the last analysis these values are much more the values of the still-to-be-invented higher socialist civilization than they are values whose real and full actualization could be acceptable to capitalism. In this sense the French Revolution was more than a “bourgeois revolution” (such as the 1688 English “Glorious Revolution”); it proclaimed—with the Jacobin ascendancy—the need to go beyond.

Capitalist values—those which are useful to its spread—are those that inspired the American Non-Revolution: Liberty and Property. Together they define “free enterprise”: whether in the form of a small family farming business, as was the case in the New England colonies; or of the slave-labor-based farms of the Southern colonies; or, in later periods, of industrial Big Business and then of financialized monopolies. Linked together, these two values exclude any aspirations for an equality going beyond universal equality of legal rights. “Equality of opportunity” is the ideological phraseology that finesses the starting-point inequalities which distinguish the property-owning classes from the proletarians who have only their labor-power to sell. Liberty and Property together make inequality seem legitimate: inequality is made to seem the result of individuals’ talent and hard work. They lead people to ignore the virtues of solidarity and recognize only their opposites: competition among individuals and among businesses.

By their very nature Liberty and Equality are conflicting values that can be reconciled only when bourgeois property, as the property only of a minority, has been suppressed. The French Revolution, even at its most radical Jacobin phase, did not go that far: it remained protective of property rights and held them sacred, imagining them to be generalizable in the form of small family farms and artisanal enterprises. It had no way to grasp how capitalism would develop, how it would put such emphasis on the inevitably ongoing concentration of modern capitalist property.

The socialist/communist idea, understood as a stage of civilization superior to the capitalist stage, takes form precisely through the gradually growing consciousness of what is implied in a sincere effectuation of the slogan “liberty, equality, solidarity”: the substitution of collective workers’ property in place of the bourgeois-minority property form.

Diverse Lines of Descent in the Formation of Socialist Thought and Action

At the origin of modern peoples’ struggle movements is the challenge posed by capitalist social relations and concomitant exploitation of the workers. These movements, in some instances, arose spontaneously; in others, they were prompted, with varying degrees of success, by groups that endeavored to mobilize and organize the workers for that purpose.

Such movements appeared very early in the new Industrial Revolution Europe, especially in England, France, and Belgium; a little later in Germany and elsewhere in Europe; and in the New England region of the United States. They expanded throughout the nineteenth century and took varying directions (termed “revolutionary” and “reformist”) in the twentieth.

Other movements sprang up in the peripheral capitalist societies, i.e., in those countries integrated into the globalized capitalist system as regions subjected to the accumulation requirements of the dominant centers. As it extended itself worldwide historical capitalism was polarizing, in the sense that dominant centers and dominated peripheries took shape simultaneously in an asymmetric relationship steadily reproduced and deepened by the logic of the system. Capitalism and imperialism constituted the inseparable two sides of a single reality. In those conditions the movements of struggle against the established system were broadly anti-imperialist, the forces initiating them seeking not to build a post-capitalist society but to “copy in order to catch up” with the opulent societies of the centers. Nevertheless, because the bourgeoisies of those countries, formed at their births by a relationship of dependency (and by that very fact naturally “compradore,” the term originally used by Chinese Communism to characterize them), were in no state to remake themselves into national bourgeoisies able to carry out a true bourgeois revolution (“anti-feudal,” in the terminology of Third International Communism). Because of this, the combat against imperialism, undertaken by a broad anti-imperialist and anti-feudal social alliance led by a party proclaiming its perspective as socialist/communist, became potentially an anti-capitalist one.

These peoples’ and national emancipation movements took as their aim to pass through the stage of anti-imperialist/anti-feudal/peoples’ (and not bourgeois)/democratic revolution. So they are to be counted in the movement toward socialism.

We thus have to examine more closely two sorts of movement toward socialism: those arising and spreading in the imperialist centers, and those developing in their dominated peripheries. These two sorts of movements never bear a union label saying “movement toward socialism,” but some of them might potentially become such. What then are the conditions and criteria allowing us so to classify them?

The Lineages of Movements Toward Socialism in the Centers of the World Capitalist System

In the nineteenth century, more so than elsewhere in Europe or in the United States, it was in France that a newborn awareness of the need to abolish capitalism and replace it with a socialist organization of society took its first steps. The carrier for this progression was provided by the heirs of Jacobinism, major actors in 1848 and then in the 1871 Paris Commune—most notably Auguste Blanqui, whose theories were the inspiration for French revolutionary syndicalism. Self-governing production cooperatives, according to these initial formulations, were to provide the institutional and legal framework for the socialization of property.

“French socialism”—if that is what it is to be called—was distinguished by its idealist character from the socialism inspired by Marx. It derived, rather, from the heritage of eighteenth-century Enlightenment philosophy—to whose ethical values like justice, citizenship, equality, liberty, and solidarity it gave the most socially radical interpretation. But it remained unaware of any scientific analysis of how the process of capital accumulation is produced and reproduced, the process that provided Marx with the first and only analytic understanding of the rationale and nature of the aspiration for socialism.

It is thus understandable that Marx, and then the historical Second and Third Internationals’ varieties of Marxism, were critical of this “French socialism’s” theory and practice. Blanquism is criticized for substituting a strategy of conspiracy and coup d’État for strategies based on struggle by a self-organized proletariat over the long haul; Proudhon was subjected to as harsh a critique; and revolutionary syndicalism was criticized for its “elitist” organizational conception. We will come back to this question of French-style “revolutionary syndicalism,” whose living traces can still be discerned in modern-day France, in distinction from the “mass” or “consensus” trade unionism of the other European countries. Of course there are other traditions beyond the French, especially the English, that in Europe helped to form the movement or movements, effective or illusory, toward socialism. But I will not discuss them here.

It was those streams that were to merge, during Marx’s lifetime and with his active participation, into the International Workingmen’s Association (“First International”). In this connection, the founding resolution of the First International, written by Marx, stated: “The task of the International is to generalize and unify the working class’s spontaneous movements, but not to prescribe for or impose upon them any doctrinal system whatsoever.”

The First International grouped certain organizations—parties and unions in an embryonic stage, associations of various sorts—which subscribed to differing “doctrinal systems”; that of Marx but also those of Proudhon and Bakunin. Within the International, Marx carried on a political and ideological combat against doctrines that he regarded as scientifically unfounded and thereby likely to spread illusions and render the working-class movement ineffective. But, in the quoted sentence, he propounded the fundamental principle (to which I adhere): accept and recognize diversity, act to reinforce unity in struggle.

But what in Europe was to develop in the last third of the nineteenth century, especially after Marx’s death but while Engels was still alive, was precisely an evolution away from that principle on the part of its movements toward socialism.

The Second International was founded by a meeting among “parties” that had become, at least relatively, “mass workers’ parties,” in practice one for each country. This evolution went along with the formation of mass trade unions, vastly bigger than those in the Europe that Marx had known: to each country, “its” party. Differing from one country to the other, all still shared the ideal of being its country’s “only workers’ party.” They considered themselves such since their establishment was based on fusion among movements with different traditions. The German Social Democratic Party (SPD) grouped Lassalians and Marxists, the French Socialist Party united Jaurèsians (heirs of the “French socialism” tradition), Guesdists (Marxists), and Blanquists. The British party was indistinguishable from the Trade Unions, federated in the Labor Party. To many, at the time, this evolution seemed positive and solid. But history was to show it to be more fragile than was thought. Nevertheless “unity,” realized in form on the organizational level, was thenceforward to be taken not as complementary to diversity—whose very existence was denied by many—but as incompatible with it. The apparent unity of the workers’ party seemed strengthened by the emergence of similarly unified trade unions. “Mass unionism” cleared its own pathway—its chosen aim was that all the workers in each line of industry or trade were to be organized in and belong to a the same union. France remained an exception to this general tendency. Each union, in the tradition of revolutionary syndicalism, recruited only a politicized vanguard and endeavored to lead the masses of wage-workers, to organize their struggles, and/or to support spontaneous movements. The Union would see itself as a quasi-party, an ally or a competitor to the workers’ parties. Mass unionism, in contrast, does not favor the politicization of its rank and file but actually favors their passive obedience, their depoliticization. The mass union sticks with its lowest common denominator—purely economic demands and, possibly, electoral support to its ally, the social-democratic party.

The 1914 war was to expose, for all to see, the impotence of the Second International’s parties and trade unions. Lenin himself was surprised by Kautsky’s “betrayal.” Nevertheless, the “revisionist” deviation initiated by Eduard Bernstein—and its success—ought to have produced an understanding that those parties and trade unions no longer constituted a “movement toward socialism.” The principal cause of this deviation, nevertheless, was not to be found in a “betrayal by the leaders,” nor in the corruption of the small layer of labor-aristocrats, nor in the careerism of those organizations’ bureaucrats. It originated from an objective fact: the opulence of a society based on imperialist plunder. The deviation kept going during the interwar period (1920–1939) and even after the Second World War in the thirty-year postwar boom (1945–1975). The “reformist” parties and trade-unions—who had given up on calling capitalism into question—retained the confidence of the majority of the working class, reducing the Leninist-communists to minority status.

Of course, in writing these lines I am aware that they should be read in a nuanced way. At certain times in the interwar period, struggles to preserve (bourgeois) democracy from the Nazi and other fascist threats combined with struggles to improve the workers’ living conditions. At that instant the Popular Fronts offered a hope of possibly reconverting themselves into movements toward socialism. In the immediate postwar years, because the class-collaboration of the European bourgeoisies with triumphant Nazi Germany had coincided with the decisive role of the working classes in the resistance movements and the prestige of the Red Army which had routed the Nazis, it once more became possible to hope for a rebirth of movements toward socialism, especially in France and Italy. The conquests of the working classes in Great Britain, Western Europe, and even the United States—social security, full-employment policies, annual wage increases in pace with increases in the average productivity of social labor—can in no case be viewed with contempt. They transformed, for the better, the face of those societies. But at the same time one is forced to recognize that those workers’ gains were made possible—for capital—by the intensification of imperialist plunder. During the whole thirty-year postwar boom energy (petroleum) had become practically costless.

Thus there was, in the imperialist centers, no serious obstacle to the victory of capital’s counter-offensive that began in 1975 and put an end both to the long boom and to further workers’ gains—nor, likewise, to continued deviation by the former Second International’s parties and trade-unions, which thenceforward were merely social-liberal. So we reached the end of the road: a “consensus” society accepting “eternal capitalism”; depoliticization; and, in place of worker/citizens a populace of spectators and consumers.

Nevertheless, this victory of capital and the disappearance of any movement toward socialism from the imperialist centers are not as solid as one might believe, or pretend to believe. The renewal of struggles against the social devastations concomitant to the dictatorship of triumphant capital signify the possible renewal of a movement toward socialism. This will be discussed further on.

The Leninist Lineages of the Movement Toward Socialism

The first victorious revolution to be carried out in the name of socialism was that of Russia, a semi-peripheral country. And this was not fortuitous. The Russian Social Democratic Labor Party, established at the close of the nineteenth century, regarded itself as part of the European Marxist family, whose mentor was Karl Kautsky. But in fact the RSDLP was not European; it signified the shift in the center of gravity of movements to socialism from the imperialist centers to their peripheries. That shift was to shape the whole twentieth century. So it was not by chance that its radical tendency (the Bolsheviks) gained the upper hand over, and put on the defensive, the conciliating tendency (the Mensheviks), while the inverse of that relationship prevailed in all the European parties.

Nevertheless, Lenin always stayed faithful to Second International thinking in regards to the relationship between necessary unity and the diversity of the currents comprising the movement toward socialism. He even emphasized its view on two important questions. In the first place he believed there to be no place for multiple working-class parties—“one class/one party.” No parties except those recognized by the Third International could be participants in the movement toward socialism. The other parties were nothing but traitors, and the task was to win the masses they were deceiving. He thought that possible until the—completely foreseeable—defeat of the 1918–1919 German revolution. Secondly, he refused to allow for trade-unions independent of the Party. For, without guidance from the Party, they could never think beyond reformist struggle for immediate economic demands. It was therefore necessary to integrate them into the system of the movement toward socialism by making them submit to the status of a transmission belt for the revolutionary strategy of the revolutionary Party. Nevertheless, the real history of labor struggles in Europe itself was to refute both Lenin’s and the Second International’s conceptualizations of the role of trade unions. At the present moment the “big mass unions” (as in Germany), consensus-based and firmly allied to the “big parliamentary parties of the left” (like the German SPD), have posed no obstacle to the unfolding offensive by capital of the financialized monopolies; on the contrary, they helped it to reach its objectives. Contrariwise, the remnant of the revolutionary syndicalist tradition in France (ironically called “elitist” and “minoritarian”), because it leaves a large measure of autonomy to grassroot initiatives, has proved to be more effective in resisting capital’s offensive—a state of affairs deplored by the French bosses, who reserve their praise for the “German model.”

Leninism, defined like that, was to inspire the dominant lineages of the twentieth century’s movement toward socialism while the European lineages were, as I pointed out above, to slide more and more openly toward opportunist positions. At best they advance merely trade-union demands—signing up for permanent maintenance of fundamental capitalist relationships and thereby taking their leave from anything that might be considered the movement toward socialism.

Was Lenin personally responsible for the “Leninism” of his successors, in the USSR and throughout the world? Yes and no. Yes, in the sense that all his successors, including Stalin, adhered to Leninist dogmas on management of the unity/diversity relationship. No, of course, insofar as Lenin lived through only the first years of the Russian Revolution and so bears no personal responsibility for whatever ensued.

And that which ensued had a positive aspect, one of decisive importance for the future of the world movement toward socialism. Leninism broke with the Eurocentric dogma that socialist revolution was on the agenda only in advanced (i.e., imperialist) capitalist countries. He takes account of the transfer, from the centers to the peripheries, of the combat for socialism’s center of gravity. This was proclaimed, Lenin present, in 1920 at the Congress of the Peoples of the East in Baku. And the Third International was to be present throughout the world while the Second had existed only in Europe.

In regard to Soviet society the movement toward socialism led by Leninist bolshevism was constrained by the objective conditions of the country (its backwardness; its semi-peripheral-capitalist nature) to reduce “building socialism” (its professed aim) to the building of state socialism. I insist here that state socialism is different from state capitalism. State capitalism (like that of France under de Gaulle) remains a system in service to monopoly capital (even when making major concessions benefiting the workers), state socialism involves two aspects of a quite different nature: (1) its obligation to pose as equivalent to worker-power at least by legitimating itself through bold social policies; and (2) its independent posture in relations with the world capitalist system.

This state socialism, the defining characteristic of Stalinism, which, consequently, makes it correct to call it Stalinist-Leninist [in preference to Marxist-Leninist—Ed.] was pregnant with the possibility of gradual leftward evolution. (That is to say, the potential remained for the socialization of economic management ) through effective participation of the workers in the exercise of power—progressively more advanced, more in keeping with socialist values, forms. But it also was pregnant with the risk of stagnation with a final fall to the right by way of capitalist restoration. Which is what happened in Eastern Europe and the USSR with Yeltsin and Gorbachev. Would Trotsky have done better? I doubt that very much. Which is why the Fourth International (in reality the Third International, second edition) never amounted to more than a springboard for orators reproducing ad nauseam the principles of Leninism without going beyond them.

The Stalinist and post-Stalinist systems never were able even to begin going beyond the state socialism (economic stratification and central planning) stage. A start to such a going beyond was made by Titoist Yugoslavia. It is not by chance that this attempt was ostracized by Moscow. For at the level of its actions on the world stage, Third International (and then Cominform) Communism had gradually come to subordinate all strategies of the movements toward socialism to the tactical needs of the Soviet state, whose sole concern was with the requirements of resistance to capitalist encirclement. The theory of the “non-capitalist path,” imposed on its Bandung-period nonaligned partner countries—especially the radicalized anti-imperialist Egypt of Nasser—which I criticized as soon as it was formulated (while I was attached to the Planning bodies of the Nasser regime and shortly thereafter), constituted the abandonment of any strategic perspective in favor of mere tactics.

It was left for Chinese Communism and Mao to introduce a different conception of the movement toward socialism in world capitalism’s peripheries, not by breaking with the heritage of Leninism but by going beyond it. That makes up the subject of another lineage of the movement toward socialism, which we will take up below.

Lineages of the Movement Toward Socialism in World Capitalism’s Peripheries

I will begin by taking a look at the Chinese experience.

The March–May 1871 Paris Commune and the 1851–1864 Taiping Revolution (and I do mean to say Revolution, not Revolt) initiated the entrance of the human race into the contemporary phase of its history. They put a end to the illusive belief that capitalism was progressive, they proclaimed the end of its summer.

Judged by their long-term significance, these were two gigantic revolutions. One of them (the Commune) unfolded in a developed capitalist metropolis, at the time second only to England in economic stature; the other broke out in a region of the world that had just been integrated into globalized imperialist capitalism with the status of a dominated periphery.

The Taiping Revolution overthrew the despotic imperial autocracy of the Ching dynasty, it abolished the regime of peasant exploitation by the ruling class of that mode of social production which I have termed “tributary” (the Chinese Communists called it “feudal,” a difference in terminology that is secondary). But at the same time the Taiping Revolution rejected the forms of capitalism which had infiltrated themselves into the interstices of the tributary system; it abolished private commerce. It rejected just as strongly foreign domination by imperialist capital. And it did so extremely early, since the first imperialist aggressions foreshadowing the reduction of China to the status of a dominated periphery in imperialist capitalist globalization—the 1840 Opium War—had taken place a mere decade earlier. And, in advance of their time, the Taipings abolished polygamy, concubinage, and prostitution.

The Taiping Revolution—they also were “sons of heaven,” i.e., it had a messianic aspect “linked” to Christianity—laid the foundation-stones for socialism/higher stage of human civilization by formulating the first revolutionary strategy of global imperialist capitalism’s peripheral peoples. The Taiping Revolution is the ancestor of (to use the later terminology of the Chinese Communists) “the people’s anti-feudal/anti-imperialist revolution.” It proclaimed the awakening of the peoples of the South (of Asia, Africa, and Latin America) that was to shape the twentieth century. It was an inspiration to Mao. It showed the pathway to revolution for all the peoples of the modern global capitalist system’s peripheries, the path that allowed them to enter into the long socialist transition.

The Paris Commune is not just a chapter in French history, nor are the Taipings just a chapter in Chinese history. These two revolutions had universal significance. The Paris Commune gave substance to the “proletarian” internationalism that the First International invoked as an alternative to chauvinist nationalisms, to capitalist cosmopolitanism, to past racial, linguistic, and confessional identities. The universalism of the Taipings’ call was symbolized by their (said to be “curious”) adoption of the figure of Christ, who nevertheless was a figure alien to Chinese history. How could a human being defeated by his adversaries—the ruling power—be a supposedly invincible “God?” For the Taipings their Christ was not the one held up by the missionaries who had tried to introduce their submissive Christianity into China. Rather, he was the exemplary example of what the struggle for human liberation had to be: courageous unto death and by that very fact proving the secret of success to be solidarity in struggle.

The Paris Commune and the Taiping Revolution elsewhere proved capitalism to be a mere parenthesis in history. A short parenthesis, moreover. Capitalism has merely fulfilled the (honorable) role of creating—in an historically short space of time—the conditions that made its surpassing/abolition necessary in order to allow the construction of a more advanced stage of human civilization. The Paris Commune and the Taiping Revolution, by that very fact, opened history’s current chapter—that which was to develop in the twentieth century and be continued in the twenty-first. They opened the succeeding chapters of the springtime of peoples, parallel to capitalism’s autumn.

China, at the far end of the continent, likewise showed characteristics particularly favorable to precocious political maturation. China had very early, even before Europe, begun to go beyond its (“advanced,” solidly formed) socio-economic tributary mode. In its invention of modernity it was ahead by five centuries in its abandonment of a religion of individual salvation—Buddhism—in favor of a sort of unreligious secularism before that word existed; and bold development of commercial relationships based on the internal market. Moreover, China (unlike India and the Ottoman Empire) long resisted the assaults of European imperialist capitalism. It thus was not until 1840 that British gunboats broke open the doors to the Celestial Empire. In combination, this aggression together with the earlier advancements of Chinese capitalism had prodigious accelerating effects: inequalities in landownership (to which the logic of the tributary system posed declining resistance) grew faster, and the “betrayal” of the ruling class (the Emperor and the landed aristocracy) quickly replaced their earlier attempts at “national” resistance. So this is how we understand the precociousness of the Taiping Revolution and its “anti-feudal/anti-imperialist” nature.

So two great revolutions, but two revolutions at work on each of the two complementary fields of globalized imperialist capitalism—at the center and at the periphery—in the two “weak links” of this worldwide system.

Were Marx and historic Marxism(s) up to the analytic demands of this reality of globalized capitalism and thus able to form effective strategies to “change the world,” i.e., to abolish capitalism? Yes and no. Marx yielded to the temptation of seeing in the worldwide expansion of capitalism a force that would homogenize economic and social conditions, reducing the workers of the whole world to the sole status of employees exploited by capital in the same way and to the same intensity everywhere. On this basis it justified, as progressive in the last analysis, colonialism. There is no lack of supporting citations to be found in Marx’s writings, spotlighting the progressive consequences, however unintentional, of colonialism—i.e., despite its odious practices (denounced by Marx) in India, Algeria, South Africa, Eritrea—as well as “Yankee” annexation of Texas and California (“industrious,” as distinguished from the “lazy” Mexicans.)*

By this logic Marx condemned the Taipings—about whom he knew nothing at all! Nevertheless, whenever he dealt with countries of which he was not totally ignorant, Marx sketched out a quite different vision of capitalist expansion. Marx saw nothing positive in the colonization of Ireland by England; on the contrary, he unreservedly denounced its destructive effects upon the English working class itself. In regard to Russia—which was less foreign to him than China was—Marx had an intuition that it was a “weak link” (to use a term coined by Lenin) in the worldwide capitalist chain and that, by that very fact, an anti-capitalist revolution which would clear the way for socialist advance was possible. Marx’s correspondence with Vera Zasulitch is evidence of this.1 He saw the possibility of a revolution with a strong peasant dimension, based on the resistance of peasant communities (organized as a mir)—if they could free themselves from feudalism through the real abolition of serfdom. Even though the peasants would themselves be threatened by expropriation to the gain of both some newly rich peasants and of the new latifundiary landlords (former feudal lords), a revolution that might be able to clear an original path for the socialist advance.

Lenin, and so the historic “Leninist” Marxism, made a great stride forward. Lenin denounced “imperialism.” It does not matter at all that, probably because of his respect for Marx, he called it a new and recent stage of capitalism. He drew the two obligatory and conjoined consequences: “revolution” was no longer on the agenda in the “West”; contrariwise, “revolution,” was on the agenda in the “East.” Lenin did not come to this conclusion right away. He wavered. He still hoped, for example, that the revolution which had started in the “weak link of the system” (Russia) would carry in its wake that of the workers in the developed centers (Germany, first of all). His reading of capitalism’s first great systemic crisis (which began in the 1870s and led to the First World War) saw it also as the “final” crisis of moribund capitalism. But Lenin quickly drew a different conclusion from the facts: he had been fooling himself; the revolution had been defeated in Europe (in Germany); those to come were starting to sprout in the East (in China, in Iran, in the former Ottoman Empire, in the colonies and semi-colonies). Nevertheless, Lenin failed to relate his new reading of Marxism to a deepening of his thought regarding the place of Russia in the global capitalist system, that of a periphery (or semi-periphery). He saw in that position—“semi-Asiatic” Russia—an obstacle rather than a trump card. No more did Lenin see the “peasant question” as central to the new “revolution” on the agenda. He thought, rightly or wrongly, that the possibilities inherent in the mir had been wiped out by the development of capitalism in Russia (The Development of Capitalism in Russia was the title of one of his earliest books.) He drew the consequence: the Russian revolution would give the land to the peasants, but only to make them owners of their land.

So it was for Mao, the heir of the Taipings, to master absolutely all the teachings of this story. Mao formulated the strategy and the aims of the long transition to socialism starting with an anti-imperialist/anti-“feudal” revolution to be carried out in the given conditions of the global system’s peripheral societies. His definition of the tasks of this “anti-feudal” revolution expressed Mao’s absolute rejection of the backward-looking illusion in any form whatsoever. The revolution of the peoples of the periphery would of necessity sign up for the universalist perspective of socialism.

So Mao’s Chinese Communism was to put in operation a coherent strategy of movement toward socialism for China, whose teachings carry great importance for all the peoples of the peripheries (Asia, Africa, and Latin America). Here we are, come back to our fundamental question: the relationship between unity and diversity.

The anti-imperialist/anti-feudal/popular and democratic (but not bourgeois democratic) revolution links diverse social, ideological, and cultural forces. It cannot be a “proletarian revolution.” Indeed, to this day the proletariat is scarcely better than a feeble, embryonic, presence in any of the modern societies of the peripheries. This revolution has to be, just as much, that of the majority of oppressed and exploited peasants. It has to be that of large portions of the educated middle classes who find their expression in the revolutionary intelligentsia. It can neutralize (without suppressing) political intervention, seeking to restrain the movement toward socialism, by the local bourgeoisie. It can even grease the slide of that bourgeoisie from its natural compradore behavior to a pro-national outlook.

The fact remains that Chinese objective conditions, at that stage, scarcely allowed anything but the establishment of a state socialism. Which was done. But this state socialism, which began as an imitation of the Soviet model, quickly diverged from it on diverse and important questions. Among these were questions indissociable from governance over the rural population and democratization of the socialization of economic and political life.

According to Mao, maintenance and reinforcement of the unity of the people that had been sealed in the course of the liberation war implied management of urban/rural relations emphasizing equality of living standards among industrial and agricultural workers and consequently rejecting the option of “the primitive socialist accumulation” which puts all the burden of development and industrial modernization onto the peasantry. That choice having been made, the conditions were then ripe for advancing in a possible democratization of the society. The Maoist formula for this was that of the “mass line.” As for everything to do with the evolution of the Chinese system of movement toward socialism, its advances and (post-Maoist) steps backward, and differing future alternatives, were opened up (transformation of state socialism into state capitalism).

The major lesson that I draw from this reading of China’s evolution from 1950 to today is that until now its treatment of the relationship between the unity (of the nation, of the people) and the diversity (of the social components of that nation) has been correct enough to give some legitimacy to the Beijing power structure and consequently to guarantee social stability. The unparalleled success of the emergence of China, in comparison with that of other countries of the contemporary South (Brazil and India, for example), is the result of this better (or less bad!) management of the unity/diversity relationship.

Other examples of movement toward socialism in countries of the periphery have successfully gone past several fine stages, having, among other things, known how to manage correctly the unity/diversity relationship and thus have eased the evolution of the originally anti-imperialist struggle toward the implementation of policies that, having gone outside the framework of the logics of capitalism, write themselves onto the long road to socialism. We refer, of course, to Vietnam and Cuba.

We might likewise refer to the advances realized in South America during the previous decades in Venezuela, Brazil, Bolivia, and Ecuador. Starting from powerful revolts of the popular classes, these movements have won elections (exceptionally, for these times) and have passed a first stage. But, to go forward and become real movements toward socialism establishing facts and not merely expressions of hopes, they need to find more effective answers to the challenge of the unity/diversity contradiction.

We cannot, however, ignore the examples of swingeing [i.e., scathing] failure that characterized the broad popular movements that during recent decades overthrew bloody dictatorships but were unable to impose themselves as movements toward socialism. We are thinking here of the movements that overthrew the dictatorships of Moussa Traoré in Mali, Marcos in the Philippines, and Suharto in Indonesia. None of these movements were able to formulate and impose a common program based on unity in diversity. The same nonexistent or even deplorable management of this contradiction is characteristic of the movements in Arab societies since 2011 (Egypt, Tunisia, Syria). So there is no movement toward socialism in any of these countries, despite the fact that objective conditions for its possible emergence do exist.

Looking backward in time, the Bandung epoch (1955–1975/1980) was that of a victorious takeoff for national liberation movements in Africa and Asia. For basic reasons, which I have invoked in my analysis, they were pregnant with the possibility of becoming movements toward socialism. But in reality what happened to their unfolding, to their victories, to their tomorrows?

This question needs a nuanced answer. Yes, at certain moments in the expansion of popular movements that were relatively more advanced, the movement toward socialism seemed, in outline, possible. This, for example was the case in “Communist” (actually advanced national popular) South Yemen or, very sketchily, in Sudan. In many African instances the state powers issuing from parties that had organized and directed the national liberation were professedly socialist, sometimes even Marxist-Leninist, more often professing a tradition, more imaginary than real, that they termed socialist. And this posture was not demagogic; it expressed the ambitions of leading progressive groups and of their real popular bases. Nevertheless, all these regimes emphasized “the unity of the people” (behind their leaders!) and most often denied the extent, even the reality, of the diversity of social interests competing within the broad national alliance or of other sorts of diversity among the components (ethnic, religious, linguistic) of the nation. This mediocre, at best, management of the fundamental contradiction of the movement toward socialism is at the bottom of their incapacity to progress at a sustained pace, of their rapid decrepitude once the limits of what they could achieve had been reached, of the erosion of their legitimacy—and thus of their sliding toward a return to the sheepfold managed by contemporary imperialism and its partners the compradorized bourgeoisie or, if need be, the compradore state.

Only a concrete, country by country, examination would let us say more. I have put forward some concrete analyses of this obstructed emergence of the movement for socialism for some countries of Asia, Africa, and the Arab world—obviously and especially for Nasserist Egypt.

In this tumultuous history, the parties professing Marxism-Leninism—when they existed—were unable to bend the course of events in the direction of the movement toward socialism. There are various reasons for their weakness; but undoubtedly their adhesion to the Moscow camp within international Communism sometimes played a decisive role in the annihilation of the hopes placed upon them. That they went over to the “non-capitalist path” propounded by Moscow provides the most dramatic example of this: these parties thus became the “left wing” of a power system that was sliding rightward.

In the case of India the breakup of the former Communist Party of India, aligning itself de facto with the Congress, and the formation of the Communist Party of India-Marxist (CPI-M), of Maoist inspiration, did not result in the qualitative leap that would have been needed to make of the CPI-M a replica of what the Chinese Communist Party had been. There are many and various reasons that explain this failure, such as the sacred nature of the caste system with its alienating effects on the spread of class struggles, and the diversity of the nations comprising the Indian Union. Having entered governments (by way of elections) in West Bengal and Kerala, the CPI-M had to the credit side of its balance sheet the realization of non-negligible progressive measures. But it did not succeed in reversing the balance of forces on the scale of the Indian Union in favor of a movement toward socialism. Unable to go beyond the limits of what could be realized by it in those two states, it then was gradually “absorbed” by the system. A radicalization of Maoist Indian Communism then was outlined in the formation of the Communist Party of India-Marxist-Leninist (CPI-ML) and the peasant/tribal war that it undertook. We have no choice but to recognize its failure, and then the breakup of the Party. It must nevertheless by noted that the same line of action produced some results in Nepal and outlined, sketchily, a possible movement toward socialism.

I have termed as “national-popular” regimes the family of these advances of the “first awakening of the South” (the Bandung decades), within which the movement toward socialism was only sketchily inscribed, impeded in its possible development by the tendency of the ruling political classes to maintain their exclusive power, even at the price of a return to the compradore fold.

The Challenge Before the Movement Toward Socialism: Socialization of the Management of A Modern Economy

The central question posed by revolutionary and/or authentic socialism (or communism or Marxism, or Marxist-Leninism, or Maoism) professing reformist advances was and remains that of socialization of the management of a “modern” economy, whose foundations were laid by the spread of historic capitalism as much in its dominant centers as in its dominated peripheries. In the centers the deviation of reformist socialism and then its later abandonment of its references to Marx led logically to giving up on posing the “post-capitalism” question. Contrariwise, in the peripheries that make up the stage for enactment of revolutions carried out in the perspective of building socialism, the question of socialization of the management of economic life has remained at the heart of the debates and conflicts that have unfolded among the revolutionary vanguards and the holders of state power. Of course the specific objective conditions of the revolution in the peripheries of globalized capitalism have weighed heavily on the scale: it was simultaneously necessary to “catch up” (develop the productive forces and in order to do so, to “copy” and reproduce capitalist forms of organizing production) and “to do something else” (to build socialism). The answer given to that question has been the construction of “state socialisms” or “state capitalisms,” the line between these two forms being itself vague and shifting. The fact remains that in the theoretical elaborations, as in the programs, of the parties professing socialism, advances in socialization of economic management and advances in democratization of society’s political management have always been thought of as inseparable. Affirmation of this central principle in formulating the project for a future socialism/communism is worthy of recall, the more so because it was exactly the state socialisms/state capitalisms of the Chinese, Soviet, and others’ experiments which, in their practices, have on a broad scale separated these two dimensions of a single challenge.

Autumn of Capitalism, Springtime of the Peoples?

Although susceptible to forming the head and tail of a single coin, the autumn of capitalism and the springtime of peoples are not the same thing.

The emergence at the end of the nineteenth century of the new form of capitalism, monopoly capitalism, was the autumnal equinox of that system—of that historical parenthesis, as I have said. Capitalism had “done its time,” the short period (limited to the nineteenth century) during which it still accomplished progressive functions was over. By this I mean that, in the nineteenth century, the “creative” dimension of capitalist accumulation (fantastic acceleration, in comparison with previous periods throughout human history; technological progress; the emancipation of the individual, even though this mainly benefited the privileged but was limited and deformed for everyone else) still outweighed the destructive consequences of that accumulation. The latter were primarily the effects of destruction of societies of the peripheries incorporated by imperialist expansion inseparable from historic capitalism. But with the emergence of monopoly capitalism the relationship of creative destruction in all of these respects was reversed to the detriment of the “creative” one.

It is in the framework of this long-run perspective that I have analyzed the two long systemic crises of “obsolete” (“senile”) capitalism: the first long crisis which extended from 1871–1873 up to 1945–1955, the second, still underway, which began a century later, starting with 1971–1973. I have emphasized in this analysis the central means mobilized by capital to overcome its permanent crisis: the construction and vertiginous growth of a Department III (complementing the two departments—production of means of consumption and production of means of production—dealt with by Marx) for absorption of the surplus linked to conjoined monopoly rents and imperialist rents.2

Lenin was the first to take notice of this qualitative change in the nature of capitalism. His sole sin was optimism, the belief that this first crisis of capitalism would be the last one. He underestimated the perverse and destructive effects of the imperialist unfolding in the central societies of the system. Having drawn the consequences of a precise estimate of those effects, Mao chose patience: the socialist road would be very long and strewn with ambushes.

The twentieth century was indeed that of a first time “awakening of the South,” more exactly an awakening of the peoples, the nations, and the states of the peripheries of the system: starting with Russia (a “semi-periphery”), then engulfing China, Asia, Africa, and Latin America. In this sense the twentieth century was that of the first springtime of the peoples involved. I have pointed out the series of major events which, right from the outset of the century, proclaimed those springtimes—the Russian (1905–1917), Chinese (from 1911), Mexican (1910–1920), and other revolutions. I have put the Bandung period for contemporary Asia and Africa, which was both the crown and the end of that great moment in universal history, back into this framework. Thus, in some way we can read this response of the peoples dominated by the imperialist unfolding as a continuation of the task undertaken by the Taiping Revolution and as its generalization across three continents.

In contrast, the Paris Commune had no successors in the developed West. Despite their courageous attempts, the Third International Communists did not succeed in building a historic camp alternative to the camp aligned upon rule of society by the imperialist monopolies. It is here that lies the true tragedy of the twentieth century, not in the inadequacies of the peripheries’ awakening but in its absence in the centers. The inadequacies—then the fatal deviations—of the peripheries’ nations might well have been overcome if the peoples of the centers had broken with their own pro-imperialist alignment.

The springtimes of peoples that unfolded during the twentieth century have worn out their effects. From deviation to deviation, they ended by collapsing and falling rightward before capital’s counter-offensive. During the 1990s this collapse was expressed through the series of triumphant counter-revolutions in that decade. Those possibilities that had existed, whether a leftward evolution of these exhausted systems or, in crisis, their stabilization around center-left formulae keeping open the future, were broken by the triple conjunction linking: (1) the inadequacies of popular protest limited to democratic demands unrelated to social or geopolitical questions; (2) the exclusively repressive responses of the power structures; (3) interventions by the imperialist West. In these conditions it is just farcical to treat the “revolutions” of the USSR and the countries of the European East (1989–1991) as “springtimes of peoples.” Built on huge illusions about capitalist reality, these movements ended with nothing that might be considered positive. The peoples involved are still waiting for their springtime, which perhaps might yet come.

Throughout the course of the twentieth century and right up to today the autumn of capitalism and the springtime of the peoples (itself confined to the peoples of the peripheries) have been entirely separate. For that reason the autumn of capitalism has provided the major motive force of evolution. Which it has switched onto the rails of increasing barbarism, the only logical answer that conforms to the requirements for maintaining the dominion of capital. In the first instance, imperialist barbarism, redoubled by putting into effect military control of the planet by the armed forces of the United States and their subaltern European allies of NATO to the sole profit of the monopolies of the collective imperialism of the triad United States–Europe–Japan. But also in response to this the sliding of the responses of their victims—the peoples of the South—toward backward-looking illusions which themselves are pregnant with barbarity.

That risk, which at present is the dominant reality, will not diminish until advances toward the conjunction between the autumn of capitalism and the springtime of peoples—of all the peoples, those both of the peripheries and of the centers—will be decisive enough to open the universalist socialist perspective. Will the twenty-first century be a “remake” of the twentieth, with the liberation attempts of the peoples of the South coinciding with maintenance of the pro-imperialist alignment of the peoples of the North?

To Build Unity Within Recognition of Diversity

There is no possible revolutionary advance of the movement toward socialism without construction of strategic unity of action linking together the needed critical mass of diverse social forces in conflict with the dominant capitalist system. It yet remains to identify correctly the nature of the social diversity at issue: distinguishing between those differences that count more and those that count less. The sources and forms of diversity are themselves innumerable. To describe them would take many pages of statistical tables: there are the men and the women, the young and the old, the natives and the immigrants, in some countries the human beings with different shades of skin color, those belonging to this or that religion or linguistic group, those who own property and those who do not, skilled and unskilled workers, etc.

A non-simplifying class analysis permits deeper comprehension of the problems. At bottom, there is certainly in capitalism the contrast between the bourgeois (owners of the means of production and/or the managers of that property) and the proletarians (who have only their labor power to sell). But this contrast is expressed through a great diversity in the spectrum of concrete social situations. There are wage-earners (sellers of labor power) whose possession of unusual skills lets them benefit from a certain degree of stability, and there are those relegated to permanent instability. There are the capitalists—owners—small, medium, or large-scale entrepreneurs, and there are the managing executives of the big capital of the financialized monopolies, etc.

This great differentiation of the basic classes is likewise extremely varied depending on whether the society in question is that of a dominant capitalist/imperialist country or that of a dominated peripheral capitalism. The social situation of a proletarian in an opulent country is different from that of his alter ego in a poor society. The rural and peasant mass, reduced to numerical insignificance in today’s centers, remains a strong presence in the peripheries, etc.

There is certainly a weighty tendency toward simplification of social structures resulting from the logic of capital accumulation (concentration of property and/or concentration of control) but there are several false notions about the simplification of social structure resulting from capitalism: (1) the idea that the bourgeois/proletarian contrast would wipe out expression of the presence of other social forces from the field of politics; (2) the idea that the bourgeoisie, on the one hand, and the proletariat, on the other, would become homogeneous camps with little internal differentiation; (3) the idea that the globalized expansion of capitalism would bring closer together the social structures of the advanced countries and those of the backward countries pursuing the path of “catching up” (“developing,” as they say).

Let us take, for example, the expansion of industrial capitalism in nineteenth-century Europe. In no country of that continent did the bourgeoisie, the new dominant class, wipe out the aristocratic classes from the ancien régime. Everywhere it reached political compromises with them that preserved their control over important segments of the power-structure (like the officer corps). And though the 1914 war was an inter-imperialist war, it was also a war belonging to the crowned heads of Europe; until the entry of the United States, France was the only republic at war.

The bourgeoisie is not a class composed of all those with formal ownership of the means of production. That property could, once limited-liability corporations had been invented, be spread around even though control over it was not. The bourgeoisie is not a homogeneous class organized as a pyramid of wealth rising from small, through middle, to great capitalists. An integral part of it is provided by segments of the middle classes (middle as measured by quantity of income formally derived from wage labor) involved in economic and political management of society. The bourgeoisie is likewise differentiated by business-sector positioning and/or location in advancing or declining regions, etc.

In the peripheries the bourgeoisie is not simply a late-born bourgeoisie growing up comfortably, living a lavish, if even more parasitic, lifestyle akin to that of its counterparts in the center. No more is it divided into two segments, one compradore (bad bourgeoisie) the other national (good bourgeoisie). Having entered the world within the framework of the worldwide expansion of imperialism, the bourgeoisie of the periphery is compradore by nature. Nevertheless, it might behave like a national bourgeoisie when the circumstances offer it some room for maneuver. I insist on the importance of this Maoist interpretation about the nature of the bourgeoisies of the periphery.

The structure of the classes making up a people in the countries of the periphery is likewise very different from that in the centers. The peasant classes in the South are themselves differently differentiated from one country to the other, with structurings partly inherited from specific precapitalist pasts—and themselves reshaped in turn by the particular ways in which they were integrated/subordinated into modern capitalism. The pauperization processes resulting from global capitalist accumulation have created there, in the peripheries, a growing mass of the dispossessed who survive only through “informal” economic activity.

Under the deceptive label of “neoliberalism,” during the past three decades weighty tendencies have been at work in the framework of the spread of globalized, financialized, and generalized monopoly capitalism.3 These weighty tendencies have produced: (1) a general, but extremely segmented, proletarianization (80 percent of the population, at least in the centers, comprising waged and salaried sellers of labor power); (2) forms of subordination established everywhere, in the centers as in the peripheries, reducing economic activities seemingly independent of the monopolies (especially those of the peripheries’ peasants but also of their industries) to the de jure or de facto status of subcontractors—thus enabling the transformation of a growing fraction of surplus value into monopoly rents; (3) replacement of historic forms of capitalist organization as embodied in concrete bourgeoisies with a new form of domination by abstract capital (“incarnate in the market,” specifically in the “financial market”). Thenceforward the bourgeoisie had become a class composed of—very well paid!—wage-workers employed by the financial oligarchy (the 1% of Occupy Wall Street and of the Spanish Indignados).

The unfolding of this new structure of generalized-monopoly capitalism did not (and could not) result in relative social stabilization—it resulted in social degradation pregnant with popular revolts. Neither did it (nor could it) result in relative stabilization of the new center/periphery relationships—on the contrary, it resulted in aggravation of the contradictions and conflicts between them. The historic imperialist centers (the United States–Europe–Japan triad) could no longer maintain their global dominance other than through military control over the whole world. In the face of this geostrategic deployment by Washington and its subaltern allies, some “emerging” states and peoples of the South resist by affirming—to various degrees—“sovereign projects,” leading to growing North–South conflicts. In other countries of the periphery the domination system of globalized-monopoly capitalism works through its alliance with compradore state power structures lacking national and popular legitimacy. This is a second motive for revolts of the peoples.

Under our eyes, generalized-monopoly capitalism is imploding in the various forms here recalled. By that very fact a new period of revolutionary situations is opening to us. How are we to act, in these circumstances, to make of the possible a reality: advances of the movement toward socialism? To answer we must take up again our reflection on the relationship: strategic unity of action/diversity of the social and political components of the movement of the peoples.

In the past, revolutionary situations allowed revolutionary advances (towards socialism) whenever concrete responses were given to this unity/diversity dialectical contradiction.

I speak here of dialectical contradiction. In effect, its solution does not proceed through negation of one of its two terms but through the transformation of their contrast into their active complementarity. A metaphysical view of contradiction cannot understand the nature of this challenge and the way to respond to it. Now, that view has often been, and still is, prevalent because it offers easy answers that, according to immediate appearances, might seem to be the only ones possible.

For example: the absolute priority of “unity” (of the people) is affirmed and the real effects of diversity, which make implementation of that unity impossible or pernicious, are denied. Or contrariwise, the unavoidable need for unity (identification of common staged strategic objectives and organization of a united front taking responsibility for their realization) is denied in favor of the affirmation that diverse struggles (those of various fractions of the people in revolt) will all by themselves provide a solution of the problem. The unavoidable question of power is then avoided. This metaphysical response to the contradiction still prevails on the contemporary scene everywhere in the South and the North. It reduces the movements in struggle to maintenance of defensive positions leaving the initiative to the enemy—monopoly capitalism and its state political instruments in North and South. So it is a strategy powerless to push forward the movement toward socialism.

As I have said, in the past correct dialectical responses have sometimes been applied with success. In Russia in 1917, Lenin grasped the way to maximize the power of unity by proposing, to the diverse components of the people in revolt, shared strategic objectives: peace and land. By offering land to the soldier-peasants he founded an alliance that allowed the new Bolshevik party to escape its isolation. For that party, until then, had no real audience among peasants. In China, as early as the 1930s, Mao refounded the Communist Party on the base of a firm and lasting alliance with the poor and exploited peasantry. That is the secret of the 1949 victory. What happened to it afterwards in regard to management of the unity/diversity relationship (i.e., the question of alliances making up the historic coalition of the movement toward socialism) constitutes a different problem, one that I will not take up in this essay.

In both cases there was a concrete response to the challenge. It stemmed from a concrete analysis, which turned out to be right, of what were the diversities: those that are crucial (in the sense that taking them into account enables working the lever of revolutionary advance) and those that were not. In this domain there are no worthwhile general formulae that could be substituted for concrete analysis. The crucial contemporary diversities cannot be the same in France as in the United States, in China as in India, in Peru as in Congo.

Whatever “generality” can be expressed in this connection I have already formulated in my propositions about the necessary “audacity” which alone enables the radical lefts of our epoch to respond properly to the challenge.4 I will sum up the meaning of these propositions in the next two paragraphs:

  1. In the imperialist centers the radical left must dare to advocate the pure and simple expropriation of the monopolies through nationalization/statification (a first stage), together with plans concerning the organization of advances toward the democratic socialization of their management. It is then a matter of identifying the crucial diversities that are to be linked together through constructing a unity of action based on the identification at each stage of their common partial goals.
  2. In the peripheries the radical left must be able to identify the diverse components of a hegemonic social alliance that is an alternative to the one on which the compradore coalition in power finds support. Only if it becomes capable, at each stage, of identifying strategically the common partial goals crucial to the anti-compradore alliance, can it achieve this result.

It is only when these conditions will have been fulfilled that the movement toward socialism can be seen to be affirmed through advances in the real, albeit progressive, transformation of contemporary societies.

Communism, Higher Stage of Human Civilization

Toward a second wave of emergence for the states, peoples, and nations of the peripheries.

The ambition of the movement toward socialism is to refound human society on other foundations than those that are fundamentally characteristic of capitalism. This future is conceived as realizing a higher stage of universal human civilization, not simply as realizing a more “just,” or even more “efficacious,” model of our familiar civilization (“modern” capitalist civilization).

Well, preparation of the future, even of the distant future, begins today. It is good to know what one wants. What social model? Based on what principles: Destructive competition among individuals or affirmation of the benefits of solidarity? A liberty that legitimizes inequality or a liberty tied to equality? Exploitation of the planet’s resources with no concern for the future or an exact accounting of the requirements for reproduction of the planet’s conditions of life?

Socialism will be democratic or it will not exist at all. On condition of understanding the democratization of society as an unending process that cannot be reduced to the formula of electoral multiparty representative as the definition of “real democracy.” The dominant Western media propounds “democracy first” for the countries of the South, which it understands as the immediate holding of multiparty elections; and many civil society organizations in the South have gone over to that proposition. Nevertheless, repeated experiments prove that this is merely a miserable farce which the imperialists and their local allies have no trouble manipulating to their own gain. In the centers, representative electoral democracy had always constituted the effective means for blocking any threats that labor struggles would become radicalized. Class struggles, which unfold on a basis of the extreme diversity of living conditions and segmentation within the laboring classes, articulated in these conditions to electoral settlement of political conflicts, had always been effective means for blocking the radicalization of popular movements. Electoralism (which Lenin called parliamentary cretinism) reinforces the negative effects of the segmentation of classes within the people and deprives of all effectiveness any strategy for building their unity. Western public opinion, alas, envisages no alternative to this system of political management, to which even the Communists have now gone over. Nevertheless, with the establishment of generalized-monopoly capitalism the electoral farce becomes totally visible, effacing the former right/left contrast.

The movement toward socialism has the duty of opening new fields for the invention of more advanced ways to manage political democracy.

John Bellamy Foster has argued convincingly that socialism, as understood by Marx, is ecological by its very nature. I add that green capitalism is still an impossible utopia because respect for the requirements of a political environmentalism worthy of the name is incompatible with respect for the basic laws governing capitalist accumulation. Here also the movement toward socialism has the duty of opening new fields for the invention of procedures of economic management that integrate the long run, that link democratic socialization of social relationships to the requirements for reproduction of life-spaces on the planet, which, in its turn, is the condition for transmitting the heritage of these common properties from one generation to another.

In its answers to these questions, the movement toward socialism cannot restrict itself to expressing pious vows, to propounding a remake of the nineteenth century’s utopian socialisms. To avoid that fate it must answer the following questions: (1) Today, what is our scientific knowledge in the fields of anthropology and sociology that calls into question the “utopias” formulated in the past? (2) What is our new scientific knowledge about reproduction conditions of life on the planet? (3) Can this knowledge be integrated into an open Marxist thought?

In this general framework, we must give full treatment to the emergence projects of the states and peoples of Asia, Africa, and Latin America. The first wave of emergings, which extended successfully between 1950 and 1980, is exhausted. That page having been turned, the imperialist powers were able to retake the initiative and to impose the “diktat” (and not the supposed “consensus”) of Washington. In its turn, this project of wildcat globalization is in implosion, offering to the peoples of the peripheries a chance to undertake a second wave of liberation and progress. What might be the goals of that second wave? There is a confrontation here among different political and cultural visions (reactionary, or illusory, or progressive) whose likelihoods will need to be studied.

To Exit From the Framework of Established Globalization

Within the framework of the established globalization model, there is no space available for the movement toward socialism to begin its deployment onto the field of reality. So it has to write into its program both immediate and more distant strategic objectives that allow an exit from that framework. If not, there will be no exit from the model of “lumpen development” based on subcontracting and resource pillage, resulting in an indescribable pauperization of all the countries that accept their submission to the extension requirements of liberal globalization.

One often hears: “The problem is worldwide; its solution must be worldwide.” The first proposition is correct, but the second does not flow from it. A transformation of globalization from above, for example by international negotiations in a UN framework, has absolutely no chance of permitting even the least progress. The long series of UN international conferences, from which nothing (as was foreseeable) has ever emerged, is evidence of that. The global system has never been transformed from above, but always starting from below, i.e., from initial changes of the line of development that at first became possible at local levels (or else national levels, in the framework of states/nations, which are the centers of crucial political struggles). Then conditions might eventually be formed to open possibilities for transformation of globalized relationships. Deconstruction must always be preliminary to the possibility of reconstructing differently. The example of Europe in crisis is testimony to that. The European structures will never undergo transformation from above by Brussels. Only disobedience by some European state, and then by another one, would make it possible to envisage the reconstruction of “another Europe.”

The strategy of starting transformations by action at national levels can be summed up in the following sentence: one must refuse to adjust unilaterally to the requirements for extension of the established globalization, replace it by prioritizing getting to work on “sovereign projects,” and force the global system to adjust to the requirements for the unfolding of these national projects.

But what then is meant by “sovereign projects”?

In certain conditions, getting to work on sovereign projects opens a space for advances of the movement toward socialism. Of course, the very notion of “sovereign project” is open to discussion. Given the degree of penetration of transnational investments in all domains and all countries we cannot avoid the question: What sort of sovereignty are you talking about?

The dynamics of contemporary capitalism are in many ways determined by the global conflict over natural resources. The matter is a special question whose examination is not to be drowned in other general considerations. The United State’s dependence for many of those resources and the growing demand from China are a challenge to South America, Africa, and the Middle East, which are particularly well endowed with resources and have been shaped by the history of their pillage. Can one develop, in these domains, national and regional policies that initiate rational and equitable planetary management, benefitting all the peoples? Can one develop, written into that perspective, new relationships between China and the countries of the South at issue? Will they link China’s access to those resources to support for the industrialization of the countries involved (something the supposed “donors” of the OECD refuse to do)?

The framework for the unfolding of an effective sovereign project is not limited to the field of international action. An independent national policy remains fragile and vulnerable so long as it does not enjoy real national and popular support, which requires that it be based on economic and social policies enabling the popular classes to benefit from “development.” Social stability, which is the condition for success of a sovereign project confronted by the destabilization policies of the imperialists, is at that price. We therefore have to examine the nature of the relationships among different established or possible sovereign projects and the bases of the power systems: national, democratic, and popular project, or (illusory?) project for national capitalism?

We can then, in this framework, draw up the “balance sheet” of the “sovereign projects” currently being put into effect by the “emerging” countries.

(1) China is the only country truly engaged on the path of a sovereign project, and is the only one for which this is the case. This is a coherent project: it articulates the planned establishment of a self-centered (although simultaneously and aggressively open toward exporting) modern and complete industrial system to a mode of agricultural development based on the modernization of small farms not owned by the farmers—thus guaranteeing access to the land for everyone. But what is the nature of the objective of sovereignty being pursued? Is it a matter of national bourgeois sovereignty (whose success, in my opinion, remains based on illusions), or of national/popular sovereignty? Is it a matter of a state capitalism based on the illusion of the governing role of a new national bourgeoisie (part of which is made up of a state bourgeoisie)? Or of a state capitalism with a social dimension, evolving toward a possible “state socialism” that would itself be a stage on the long road to socialism? The answer to that question has not yet been given by the facts. Here I refer the reader to my argument about the future alternatives on offer to contemporary China.5

(2) Russia has returned to the international political stage, posing itself as the adversary of Washington. For all that, is it engaged on the path of a sovereign project? Yes, perhaps, in the intentions of the power-holders to rebuild a state capitalism independent of the diktats of the globalized monopolies? But the economic management of the country remains liberal, controlled by the oligarchy of private monopolies established by Yeltsin on the Western model. This policy, then, remains without any social dimension that would enable it to rally its people behind it.

(3) Elements of a sovereign policy exist in India, notably state-supported industrial policies of private national industrial monopolies. But nothing more than that: its general economic policies remain liberal, tragically speeding up the pauperization of the majority of peasants.

(4) In the same fashion elements of a sovereign policy exist in Brazil, carried out by big private Brazilian financial and industrial capital and big capitalist agricultural estates. But here as in India the general economic policies remain liberal, bringing no solution to the problems of poverty in a country that has become 90 percent urbanized—except that poverty has been lessened through redistributive public welfare measures. In Brazil, as in India, the power-holders’ reluctance to go further favors the ambiguous behavior of big capital, tempted to seek compromises with international capital. The fabulous natural riches of Brazil, and their exploitation under deplorable conditions (destruction of the Amazonian rainforest), further strengthen their efforts to insert the country in the established globalization system.

(5) There exists no sovereign project in South Africa, whose system remains under Anglo-American imperial control. What then are the conditions for emergence of a sovereign project in that country? What new relationships with Africa would be implied by such emergence?

(6) Can non-continent-size countries develop sovereign projects? Within what limits? What forms of regional association might facilitate their advancement?

Where to start?

With regard to the sovereign projects which the movement toward socialism ought to promote, I propose to start by identifying the priorities of action on the economic level and on the political level.

In regard to the economic level:

I suggest identifying the initial priorities with an exit from financial globalization. But take note: this involves only the financial aspect of globalization, not globalization in all its dimensions, notably the commercial ones.

We start from the hypothesis that we are dealing with the weak link of the established globalized neoliberal system. With this in mind we will examine:

  • the question of the dollar as universal money, of its future, taking into account the United States’ increasing foreign indebtedness;
  • questions in relation to the prospective adoption of the principle of “total convertibility” of the yuan, the ruble, and the rupee;6
  • the question of “exit from convertibility” of certain emerging-country currencies (Brazil, South Africa);
  • the measures that might be taken in regard to management of their national currencies by the fragile countries (especially the African ones).

Some initiatives, whose scope, however, remains modest, have been taken towards a deconstruction of the integrated globalized financial system. We here mention the establishment of the Shanghai Conference, the agreements between China and ASEAN, ALBA, the Bank of the South, the “Sucre” project, and the BRICS Bank.

In regard to the political level:

I will suggest prioritizing the implementation of strategies capable of holding in check the geopolitics and geostrategics developed by the United States and its subaltern allies within the triad.

Our starting point is the following: the capitalist monopolies of the historic imperialist (United States, Europe, Japan) powers’ pursuit of worldwide dominion is threatened by growing conflicts between: (1) on the one hand the goals of the triad (to maintain its dominion); and (2) on the other the aspirations of the emerging countries and those of the peoples victimized by and in revolt against “neoliberalism.” In these conditions the United States and its subaltern allies (linked together in “the triad’s collective imperialism”) have chosen to add to their risks by taking recourse to violence and military interventions. Testifying to this are: (a) the deployment and reinforcement of U.S. military bases (Africom and others); (b) military interventions in the Middle East (Iraq, Syria, tomorrow Iran?); and (c) measures taken by the triad to encircle China militarily, including Japanese provocations, and manipulations involving China/India and China/Southeast Asia conflicts.

But it appears that, while the violence of imperialist powers’ interventions remains in fact on the agenda, these powers find it ever harder to respond to the requirements for the coherent strategy that is the condition for possible success. Is the United States at bay? Is its decline a passing one, or is it definitive? Washington’s responses, though made in a day-to-day fashion, remain no less dangerously criminal.

In confrontation with these major challenges, what strategies of international political (or even military) alliance might force a withdrawal on the U.S. project of military control over the whole planet? The importance of possible advances on this terrain is obvious. It is not by chance that the BRICS, and behind them many countries of the South—some having to various degrees entered on the path of sovereign projects, others still mired in the ruts of lumpen development—still express refusal to support the U.S. military adventures and dare to take initiatives contradicting Washington (like the use of the veto by Russia and China)? It is necessary to go further in these directions, in a broader and more systematic fashion.


  1. *Editors’ Note: For references to this see Howard B. Davis, Nationalism and Socialism (New York: Monthly Review Press, 1967), 61–63. Davis points out that such comments were confined to Marx and Engels’s earlier works, roughly before 1860.


  1. Teodor Shanin, ed., Late Marx and the Russian Road (New York: Monthly Review Press, 1983), 97–126.
  2. Samir Amin, Three Essays on Marx’s Value Theory (New York: Monthly Review Press, 2013), 67–76.
  3. See in particular my discussion of this in The Implosion of Contemporary Capitalism (New York: Monthly Review Press, 2013).
  4. Ibid, 133–47.
  5. See Samir Amin, “China 2013,” Monthly Review 64, no. 10 (March 2013): 14–33.
  6. Samir Amin, “The Chinese Yuan and HSBC Bank,” Pambazuka no. 643, August 13, 2013, http://pambazuka.org/.

The US and tax havens like Ireland

There is a growing campaign in the US backed by US President Obama to restrict the increasing use of tax havens like Ireland by US TNC’s. The campaign is gathering traction as the administration seeks popular issues ahead of the next elections. This issue may also feature in the ongoing TTIP negotiations between the US and EU.

Below is a recent article from the NYT that give a sense of the issue.


White House Weighs Actions to Deter Overseas Tax Flight

WASHINGTON — The Obama administration is weighing plans to circumvent Congress and act on its own to curtail tax benefits for United States companies that relocate overseas to lower their tax bills, seeking to stanch a recent wave of so-called corporate inversions, Treasury Secretary Jacob J. Lew said on Tuesday.

Treasury Department officials are rushing to assemble an array of options that would essentially wipe out the economic incentive for the deals, Mr. Lew said. No final decision has been made.

“The question is, Can we do enough that it will materially change the economics of inversions so that companies will make different decisions?” Mr. Lew said in an interview. “The things we are looking at look to me like they could very materially change the economics of inversions.”



The action comes in the face of a recent increase in United States companies reaching deals to reorganize overseas, creating an explosive political issue that Mr. Obama has called a lack of “economic patriotism.” Investment banks have been counseling companies to pursue such transactions because of the potential tax benefits. Two large United States pharmaceutical companies — the drug giant AbbVie, based in Illinois, and the generic manufacturer Mylan, based in Pennsylvania — agreed to such deals last month. The Walgreen Company, owner of the drugstore chain, considered using an inversion but was unable to follow through.

“Time is of the essence,” Mr. Lew said. “We are looking at a very long list of possible ways to address the issue.”

It would be the latest move by the Obama administration to use its authority to act where Congress will not. A provision in the president’s budget would have effectively banned inversions, and Democratic lawmakers have introduced legislation to halt or suspend them. Still, while some Republicans say they want to address the issue, there has been little bipartisan agreement on how to do so.

While Mr. Lew said legislation was the “best solution” to addressing the issue, the recent flood of inversions has persuaded Mr. Obama’s team that a quicker response may be necessary. A Bloomberg analysis estimated American companies are parking as much as $2 trillion in cash overseas.

“If Congress doesn’t act, we can’t wait for months or years to go by and just watch companies make decisions as if nothing will change,” Mr. Lew said. Josh Earnest, the White House press secretary, told reporters on Tuesday that Congress should “take action on this quickly,” sidestepping questions on whether the administration would act unilaterally if Congress did not.

Mr. Lew said his “goal is actually to change what’s happening out there.”

“Putting companies on notice is, I think, part of it,” he said.

Tuesday morning, a group of Democratic senators called on President Obama to act on his own authority. “The coming flood of corporate inversions justifies immediate executive action,” they said in a letter, spearheaded by Senator Richard J. Durbin of Illinois, the No. 2 Democrat, and signed by Elizabeth Warren of Massachusetts and Jack Reed of Rhode Island.

If Treasury pursued unilateral action, there could be at least some retroactive effect because new limits would be placed on the transactions of inverted companies. Inversions could still go through, but depending on when new rules were issued, the tax strategies that made the mergers seem lucrative might be severely limited.

Mr. Lew said last month that he did not think he had power to act alone to stop the practice, but administration officials say they believe they have many more options to limit the kinds of transactions inverted companies typically use.

“They want to do it,” Senator Charles E. Schumer, Democrat of New York, said in an interview last week. “The president really dislikes the inversions, and if they feel they have a strong legal ability to do it, they will.”

With the size and pace of deals accelerating, policy makers have intensified their efforts to find ways of countering the practice, spurred in part by the fact that Walgreen had discussed it as part of a buyout of the British chain Alliance Boots.

Walgreen’s consideration of an inversion “tipped the scales to show that this is a slippery slope of inversion deals continuing and increasing in size and number,” said Nell Geiser, the associate director of retail initiatives at Change to Win, the organized labor-backed consumer advocacy group. She said the company would have faced “extreme consumer backlash” if it had made the move overseas.

It’s also a politically opportune time for the president to focus on the issue, as he works to contrast his economic vision with that of Republicans in advance of the midterm congressional elections.

The president highlighted the issue in a recent speech in Los Angeles in which he questioned the patriotism of companies that inverted for tax purposes.

“I don’t care if it’s legal. It’s wrong,” the president said. “You shouldn’t get to call yourself an American company only when you want a handout from the American taxpayers.”

Just days after the president’s speech, Stephen E. Shay, a former Obama administration Treasury Department official who now teaches at Harvard Law School, suggested in an article in the trade journal Tax Notes that it was within Mr. Obama’s power to act alone.

“I’m really concerned that we are losing a significant portion of our corporate tax base that you’re not going to get back,” Mr. Shay said.

His article referred to a section of the tax code that allows the Treasury secretary to issue rules for determining whether a given financial instrument should be treated as debt or equity. The idea would be to limit the degree to which a foreign parent company could load up a United States subsidiary with debt, which can be deducted for tax purposes, and require that any excess be designated as equity, which is not eligible for deductions.

Mr. Shay also proposed other administrative moves to reduce the use of offshore earnings without paying United States tax.

“They have the authority to go after those two incentives to do the deals under existing law,” Mr. Shay said of Mr. Obama’s team.

A person involved in the deals told Mr. Shay that without those two prospective benefits, 75 percent of the inversions underway would not occur.


Stop the TTIP!!!!

Stop the TTIP – People’s Movement

Read the above pamphlet to get a good understanding of how an EU-US trade and investment treaty threatens democracy, would attack workers’ rights, erode social standards and environmental regulations, dilute food safety rules, undermine regulations on the use of toxic chemicals, rubbish digital privacy laws, and strangle developing economies.

And check out the website http://www.people.ie/english1.html

State and Finance in Financialised Capitalism

Costas Lapavitsas: Reversing privatisation and re-establishing public ownership over key areas of the economy would directly reduce the room for financialisation. It would also provide a broader basis for public investment and the systematic creation of employment.

The structural problems within the UK and other mature economies were brought to the surface during and after the crisis of 2007-9. This paper argues that these problems are inherent to contemporary mature capitalism and have to do, primarily, with financialisation. The exceptional rise of finance in terms of size and penetration across society, the economy and the policy process, is apparent to all. The rise of finance is a sign of a fundamental transformation of mature capitalism within commercial and industrial enterprises, but also banks and perhaps most strikingly, within households.

The period of financialisation, lasting from the 1970s to the present day, has also wrought profound changes to the social structure of contemporary capitalism. It has been a period of extraordinary income inequality, wiping out all of the gains that came in the period following the Second World War. This paper notes that the ability of the rich to extract enormous incomes has been associated with the financial system. Inequality is a characteristic feature of financialisation.

Financialisation has been marked by the ideology of neoliberalism, promoted by universities, think-tanks and a variety of other institutions. Neoliberal ideology ostensibly treats state intervention in the economy with extreme suspicion, but the reality has been very different. The financialisation of mature economies would have been inconceivable without the facilitating and enabling role of the state.

The full paper can be read at http://www.researchonmoneyandfinance.org/images/uncategorized/Lapavitsas_state_finance.pdf

How capitalists learned to stop worrying and love the crisis

This is a great article on how capitalists have taken advantage of the crisis they helped create to make more money at our expense while also prolonging and deepening stagnation in the system. But more important than money is the power that they are accumulating throughout this crisis which maintains their position of dominance at all levels of society.

The ultimate goal of modern capitalists – and perhaps of all capitalists since the very beginning of their system – is not utility, but power. They are driven not to maximize hedonic pleasure, but to ‘beat the average’. This aim is not a subjective preference. It is a rigid rule, dictated and enforced by the conflictual nature of the capitalist mode of power. Capitalism pits capitalists against other groups in society, as well as against each other

Read the full paper at http://www.paecon.net/PAEReview/issue66/BichlerNitzan66.pdf




Steve Keen on Secular Stagnation

 The crisis of 2007/08 has generated many anomalies for conventional economic theory, not the least that it happened in the first place. Though mainstream economic thought has many channels, the common belief before this crisis was that either crises cannot occur (Edward C. Prescott, 1999), or that the odds of such events had either been reduced (Ben Bernanke, 2002) or eliminated (Robert E. Lucas, Jr., 2003) courtesy of the scientific understanding of the economy that mainstream theory had developed.

Read the full article at http://www.paecon.net/PAEReview/issue66/Keen66.pdf

Argentina’s default: finance decides, the population abides

By Ronan Burtenshaw

Taken from http://concreteradicality.wordpress.com/2014/07/31/argentinas-default-finance-decides-the-population-abides/

Today a vulture fund based in the Cayman Islands representing a tiny, super-wealthy élite has thrown an economy serving 43 million people into chaos.

In 2001, with the country in crisis, NML fund bought bonds from Argentina. Their strategy was to acquire defaulted sovereign debt issues at a very low price, only to later demand the totality of the payment via a judicial process. Their mark-up today would be 1,608%.

In the period since, between 2005 and 2010, over 92% of bondholders with this debt restructured. But the vulture funds held out. As Argentine Economy Minister Axel Kicillof said, “the vulture funds don’t negotiate: that’s what makes them vultures.”

The case went to the US Supreme Court, with Argentina arguing that a pari passu clause meant that they could not advantage certain bondholders over others. Unsurprisingly, because it is a den of financial interests, the US Supreme Court ruled in favour of NML and ordered Argentina to repay the full $1.3billion. This created a precedent that opened Argentina up to a further $15billion in debt repayments, which would have wiped out most of the state’s dollar reserves.

As the European Nordic and Green Left statement this week said, “The recent decision of the Supreme Court of the US not only creates difficulties – or perhaps makes it impossible – for Argentina to continue servicing its restructured debt, it also strikes at the stability of the international financial system in as much as it constitutes a precedent that can hinder other sovereign debt restructuring processes in the future. Because, if during a voluntary negotiation such as the one Argentina carried out, in which more than 92% of its creditors agreed to swap their defaulted debt (for new bonds with a considerable haircut), any creditor can demand and charge the total owed on that debt, what are the incentives to enter into a similar restructuring in the future?”

This forms part of an international régime, from the US to Europe and beyond, where the interests of private finance are placed above all others in the economic sphere. The refusal to create any sensible mechanisms for resolution or negotiation at an international level – let alone a collective action clause that might force holdout minorities to accept widely negotiated terms – is a symptom of the dictatorship of the markets over our societies. As was the case when Ireland was warned that “a bomb would go off in Dublin” if senior Anglo-Irish bondholders were not repaid. We are living in an era of gunboat democracy – where finance decides and the population abides.

There may soon be a challenge to this régime in Greece, where Syriza are favourites to win the next general election and promise to fight for a renegotiation of the EU-IMF memorandum and a restructuring of sovereign debt. There had been hope that the risk of contagion from a Greek unilateral default would force European Union policymakers into accepting a deal – but this Argentine situation is a bad omen. International financial interests, with the connivance of complicit states and transnational bodies, have threatened an entire region with a lost decade. They have done this for the sake of a principle, that the interests of private finance must come first. And for a sum of $1.3billion. Greece’s sovereign debt is around $480billion.

After the US Supreme Court’s decision Argentine President Cristina Kirchner made a speech discussing the state’s history with debts imposed by international finance and enforced by the west – it could be translated to most Latin American states. She said that debt had been “without a doubt the most powerful trap we had been in keeping us from growth, the development of Argentina, it created poverty, backwardness, homelessness, a lack of infrastructural development, investment in education, in science.” She detailed the cycles of debt crises which have plagued the country since the 1970s, finishing each with an explanation of how it led to the next and the words, “but that wasn’t the end”.

The states of peripheral Europe are now in a similar cycle. As Oscar Guardiola-Rivera remarked in 2011, Europe has colonised itself. These same processes of debt penury, austerity, financial crisis and forced under-development that Europe once imposed on Latin America and South-East Asia have, since 2008, returned closer to the core – to Greece, to Italy, to Spain, to Portugal, to Ireland.

There are examples in states like Ecuador of how to break free from this cycle, but it requires negotiation. By forcing a default international finance is now delivering a message to Latin America through Argentina: sovereignty will not be allowed. With the Greek situation lurking around the corner, the states of the European periphery should take note.

Insights into FDI in Ireland

The most recent IDA Annual Report 2013 provides a number of valuable insights into the nature of FDI in Ireland. Where is it from, in what sectors is it, how much tax does these companies contribute, how much does the State subsidies each job, how much do the companies contribute to the national economy and much more. Some highlight stats below but the report is worth checking out.


The Recovery? Latest CSO Stats Q1 2014

The CSO’s latest figures show GDP is up 2.7% for the first quarter in 2014, compared to the last quarter of 2013, while GNP is up a mere 0.5%. GNP, the more accurate reflection of the Irish economy, shows the continued stagnation that reflects personal expenditure being down 0.1% and capital investment down a whopping 8.1% and Government expenditure down 2.1%.

But the bigger news is that the CSO from June on will include illegal black market activity, like drugs money, in GDP figures. This follows changes elsewhere in Europe as countries desperately seek to create the impression of a recovery and meet their EU imposed targets.

Is this really the recovery working people need? And do the State think they can con their way into meaningful growth? Of more importance, however, is that while GDO slowly picks up reflecting the profits of MNC’s and capital transfers in and out of the country, GNP remains poor.


The economic philosophy behind the euro

In 1979 Margaret Thatcher was the first European prime minister to introduce the neo-liberal agenda. She was soon followed by Ronald Reagan in the United States, and the European Union formally adopted the neo-liberal ideology in the Maastricht Treaty in 1992.
The agenda emphasised the free-market monetarist policies espoused by right-wing think-tanks such as the Libertas in Ireland, the Cato Institute in America, the Adam Smith Institute in Britain, and the Copenhagen Institute in Denmark. These are all funded by millionaires to promote the interests of rich people. The Republican Party in the United States and the Tea Party (where the Taoiseach attended a fund-raising function during his visit for St Patrick’s Day) also support these policies.
Milton Friedman implemented these policies in Chile when the dictator Pinochet was in power, arguing that inflation is always linked with excessive monetary policies. To offset this he advocated cutting public expenditure and privatising public utilities.
These policies became known as the Washington Consensus in 1990, from the multilateral agencies based in Washington. Robert Gwynne, cited by Peadar Kirby in his book Introduction to Latin America(2003), described these objectives as follows:

. . . trade liberalisation and easier foreign direct investment . . . Reduce direct government intervention in the economy through privatisation, introducing fiscal discipline, balanced budgets, and tax reform . . . Increase the significance of the market in the allocation of resources and make the private sector the main instrument of economic growth through deregulation, secure property rights and financial liberalisation.
      The agenda advocates free trade, and the euro is an extension of free trade. But free trade, or the euro, gives access for transnationals from the larger states to the markets of the smaller states. For example, Lidl and Aldi are grabbing a growing share of the Irish grocery market, and they are doing the same throughout the euro area.
The underlying assumption of this economic ideology (an assertion that is more like a mantra than reality) is that the public sector is inefficient and the private sector (the market sector) is more efficient. It is argued by the proponents of these policies that the state sector should be reduced. Yet the state-controlled French railway system SNCF is far more efficient than the privatised British railway system.
With the reduction in the role of the state, more of the economy would be controlled by monopoly capital. Nowadays most branches of the economy are controlled by a small number of firms (oligopolies), which make excess profits for their rich shareholders by charging high prices. These firms do not compete on price, because it would reduce their profits and consumers would be the winner: they use advertising and other non-price competition to gain a larger share of the market. They act, to all intents and purposes, as monopolies.
This ideology was written into the Maastricht Treaty in the form of the “fiscal rules”:
1. The excessive government deficit (excess of government spending over revenue) should not exceed 3 per cent of gross domestic product (GDP).
2. Government debt should not exceed 60 per cent of GDP.
These rules were reinforced by a change in the German constitution that made it compulsory to balance the state budget. Germany got the other countries that use the euro to adopt the Fiscal Stability Treaty. Under these new rules
(1) the deficit has to be reduced to 0.5 per cent of structural GDP (i.e., the budget must be balanced);
(2) if the ratio of debt to GDP exceeds 60 per cent it must be reduced to 60 per cent over twenty years.
These rules were set up to protect the interests of investors who buy government bonds. These people are shareholders in banks that hold bonds—very wealthy people and hedge funds that manage the funds of wealthy people. The last thing the neo-liberals want is for a government in the euro zone to default.
Mario Draghi, president of the European Central Bank, formerly worked as an economist for Goldman Sachs. This is a bank that looks after the interests of wealthy people. Draghi is independent of national governments but is not independent of the ideology of his former employer.
Over time, these rules will reduce taxes and the role of government. The rich pay less tax so they will be better off, while the less well off, who use government services, will be worse off. This will cause a transfer from the poor to the rich.

The fiscal deficits, 2009–15

Following the worldwide recession that occurred in 2008, caused by the failure of an American bank, Lehman Brothers, all twelve countries that we are analysing had a fiscal deficit in 2009.
The roots of the collapse of this bank go back to 1985, when Margaret Thatcher deregulated the banking system. The chancellor of the exchequer (minister for finance), Nigel Lawson, who introduced deregulation (the “big bang”), put forward the view that this was the cause of the crash in 2008.
The EU followed suit and deregulated the banks as part of the Single European Act in 1987, and the United States deregulated in early 2000s. The American deregulation was to lead to a massive expansion of mortgage credit, which was used to finance speculative house-buying and “sub-prime” (more risky) lending. This ended in a housing bubble that collapsed and caused the great recession. A similar bubble happened in Ireland and Spain.
We divide the countries into three groups, but this time the debtor-countries are taken first.

Fiscal deficits, 2009 and 2015 (forecast)

In a recession such as the one that began in 2008, output falls; then spending, incomes and employment fall. As a consequence, unemployment increases, so government spending on the unemployed increases, and tax revenue decreases. This increases the fiscal deficit.
Before the Maastricht Treaty (1992), European governments would increase their spending and cut taxes. The tax cuts would increase take-home pay, and this would increase consumer spending, so leading to increased output (growth) and lower unemployment. This would counteract some of the effects of the deficit; but it would lead to an increase in the deficit.
The neo-liberals at the heart of the IMF, the EU Commission, the European Central Bank and Germany are horrified by this, as it might put the funds of lenders (rich people) in danger. Mario Draghi, in an interview with the Wall Street Journal (24 February 2012), “warned beleaguered euro-zone countries that there is no escape from tough austerity measures and that the Continent’s traditional social contract is obsolete.” The social contract means full-time jobs, which he wants to be replaced with part-time, temporary and contract jobs. This is the agenda of Merkel and of ISME and IBEC.
In table 1 the deficits of the debtor-countries are shown.

Table 1: Debtor-countries

Fiscal deficit as percentage of GDP, 2009 Forecast fiscal deficit as percentage of GDP, 2015 Change as percentage of GDP
Italy –5.5% –2.5% 3%
Spain* –11.1% –6.6% 4.5%
Greece† –15.7% –1.1% 14.6%
Portugal† –10.2% –2.5% 7.7%
Ireland†(1) –13.7% –3% 10.7%
Average population weights, 2012 –9% –3.8% 5.2%
*The EU Commission has given Spain an extension to 2016 to meet its deficit target.
†Programme (1) Includes interest (about €2.7 billion) on the €64 billion bank debt foisted on Ireland by the Troika.
      The EU Commission forced these governments to reduce their deficit towards 3 per cent of GDP (output) by 2015, causing austerity. Ireland, Portugal and Greece were put into “bail-out” schemes, and the Troika (ECB, EU Commission and IMF) took over their budgets and cut the deficit year by year to reach 3 per cent. The other countries operated under country-specific recommendations made by the EU Commission.
The achievement of the 3 per cent ratio took precedence over any services provided by governments. This forced them to increase taxes. Expenditure on health, education and social welfare was cut. This reduced spending in the economies, reduced growth, and increased unemployment.
In Ireland’s case, tax increases and cuts in expenditure of $31 billion were taken out of the economy in budget cuts between July 2008 and 2014. The cuts in expenditure hit low and middle-income earners most, and the increases in taxes were regressive, again hitting those on low and middle incomes. The rich got away unscathed.
Each of the countries had a massive increase in unemployment and a substantial fall in their standard of living. All this was to keep the “markets”—the seriously rich people—happy.

Table 2: France

Deficit as percentage of GDP, 2009 Forecast deficit as percentage of GDP, 2015 Change as percentage of GDP
–7.5% –3%* 4.5%
*Revised according to information from EU Commission, March 2014.
      France will have reduced its deficit by 4½ per cent of GDP by 2015. It will have to reduce government spending or increase taxes. Its deficit will have fallen nearly as much as the debtor-countries: 4.5 per cent, compared with 5.2 per cent between 2009 and 2015. This has a major effect (reduction) on growth and on unemployment (increase) over the period.


Half the creditor-countries—the Netherlands, Belgium, and Austria—had a deficit of more than 3 per cent in 2009; the rest were at or below 3 per cent. (Germany was at 3.1 per cent.) Yet the governments in most of these countries introduced “austerity” under the neo-liberal agenda of the EU Commission. The average drop in the deficit would be 2.6 per cent of GDP if the forecasts are correct. These governments, especially Germany, either cut spending or increased taxes when there was no need to do so; and Germany went so far as to amend its constitution to make it compulsory that it balance the state budget.

Table 3: Creditor-countries

Deficit as percentage of GDP, 2009 Forecast deficit as percentage of GDP, 2015 Change
Germany –3.1% –0.2% 2.9%
Netherlands –5.1% –3% 2.1%
Belgium –5.6% –2.5% 3.1%
Austria –4.1% –1.5% 2.6%
Finland –2.5% –2% 0.5%
Luxembourg –0.7% –2.7% –2%
Average population weights, 2012 –3.6% –1% 2.6%
      The debtor-countries suffered twice as much austerity as the creditor-countries, because 5.2 per cent on average is being taken out of their economies, compared with 2.6 per cent in the creditor-countries. So Draghi intended that his medicine was mainly for the peripheral (debtor) countries; but it also affected the core (creditor) countries, because they had right-wing governments.

Growth in the euro area

The twelve countries of the euro area had two periods of recession between 2008 and 2013. The first was caused by the collapse of Lehman Brothers in 2008, when output in these countries fell by 4.4 per cent (Eurostat calculation).
A second recession occurred in 2012 with a fall of 0.7 per cent and in 2013 with a fall of 0.4 per cent. This was caused by the policy of reducing the deficit to 3 per cent of GDP adopted by the Troika in the programme countries and by the country-specific recommendations coming from the EU Commission. The Commission showed at this point that the only thing that was important was adherence to the Maastricht rules. Growth in GDP and employment are no longer a priority. Now 2 per cent inflation is at the top of the agenda.
These policies caused a double-dip recession in the euro countries in 2012 and 2013. Altogether, GDP in the area fell by 1.9 per cent between 2008 and 3013.

Growth, debtor-countries

The debtor-countries experienced a fall in output in most of the years between 2008 and 2013. Italy had a drop in output in four of the six years. Spain’s and Portugal’s experiences were similar.
Greece experienced a fall in each of the years, and Ireland experienced a fall in three years. Between 2008 and 2013 output fell by 8.6 per cent in Italy, 3.7 per cent in Spain, 23.2 per cent in Greece, 7.2 per cent in Portugal, and 9.2 per cent in Ireland.
The decrease of 23.4 per cent in Greece between 2008 and 2013 was the highest in living memory in western Europe. The average fall in this period for the debtor-countries, 8 per cent, was more than four times the average fall for the twelve countries of the euro area (1.9 per cent), as calculated by Eurostat. In the same period the economies of the creditor-countries grew by 2.7 per cent.
Each of these countries, except Ireland, suffered a double-dip recession in 2012 and 2013. (See note with table.)

Table 4: Annual change in output (GDP), debtor-countries

2008 2009 2010 2011 2012 2013 2008–2013
Italy –1.2% –5.5% 1.7% 0.5% –2.5% –1.8% –8.6%
Spain 2.9% –3.5% –0.2% 0.1% –1.6% –1.3% –3.7%
Greece –0.2% –3.1% –4.9% –7.1% –6.4% –4.0% –23.2%
Portugal 0 –2.9% 1.9% –1.3% –3.2% –1.8% –7.2%
Ireland* –5.5% –5.4% –1.1% 2.2% 0.2% 0.3% –9.2%
Average population weights, 2012 0.6% –4.4% 0.4% –0.4% –5.5% –1.7% –8.0%
Falls in GDP are highlighted.
*Growth in Ireland is measured in terms of gross domestic product (GDP), which includes the profits of transnational corporations. The size of GDP goes up and down as profits are moved into and through Ireland for tax purposes. This makes the GDP figures unreliable as a measure of Ireland’s output.


The French economy experienced only two years of falls in GDP and grew by 1.6 per cent over the period 2008–13. France’s experience was more like that of the creditor-countries, but there was slow growth in the years in which it had growth.

Table 5: Annual change in output (GDP), France

2008 2009 2010 2011 2012 2013 2008–2013
–0.1% –3.1% 1.7% 2.0% 0.7% 0.5% 1.6%


The creditor-countries only experienced on average a fall in GDP in one year,:2009. Germany and Austria had a fall only in 2009. Belgium and Luxembourg had a fall in two years: 2009 and 2012. The Netherlands and Finland had a fall in three years: 2009, 2012, and 2013.
In the debtor-countries GDP fell in more years than in the creditor-countries. Germany’s GDP grew by 4.1 per cent between 2009 and 2012 on the back of massive trade surpluses. This growth was greater than all the other countries in the euro area. These surpluses and exports give rise to increased output and lower unemployment in Germany; but they cause lower growth and higher unemployment in the countries that import from Germany.

Growth in output (percentage of GDP), creditor-countries

Table 6: Annual change in output (GDP), creditor-countries
2008 2009 2010 2011 2012 2013 2008–2013
Germany 0.9% –5.1% 4% 3.3% 0.7% 0.5% 4.1%
Netherlands 1.8% –3.7% 1.5% 0.9% –1.2% –1.0% –1.8%
Belgium 1.0% –2.8% 2.3% 1.8% –0.1% 0.1% 2.2%
Austria 1.4% –3.8% 1.8% 2.8% 0.9% 0.4% 3.4%
Finland 0.3% –8.5% 3.4% 2.7% –0.8% –0.6% –3.9%
Luxembourg –0.7% –5.5% 3.1% 1.9% –0.2% 1.9% 0.3%
Average population weights, 2012 1.0% –4.8% 3.3% 2.8% 0.3% 0.2% 2.7%
Average growth for debtor-countries 0.6% –4.4% 0.4% –0.4% –5.5% –1.7% –8.0%

Unemployment rate, debtor-countries

In table 7 the unemployment rates of the debtor-countries are shown. The average unemployment rate increased from 7.2 per cent to 18.9 per cent between 2007 and 2013.
While in 2007 all the countries were close to the average, by 2013 there were massive variations between the countries. Spain and Greece have more than a quarter of their work force unemployed. Italy’s and Portugal’s rates doubled, to 12.2 per cent and 17.4 per cent, respectively. Ireland’s rate trebled, despite the fact that about 100,000 people have emigrated since the crisis, and the Government has more than six schemes, including Job Bridge, for getting people off the dole and so reducing unemployment figures artificially.
But the real sufferers in this crisis are young people, as a consequence of the policies adopted by the Troika in Ireland, Portugal and Greece and those adopted by the EU Commission in Italy and Spain. In 2012 nearly half of all young people in the EU (45 per cent) were unemployed. Of these, Spain and Greece had over 50 per cent, Italy and Portugal had over 35 per cent, and Ireland had nearly 30 per cent.

Table 7: Unemployment rate, debtor-countries

2007 2013 Youth unemployment rate,
fourth quarter 2012*
Italy 6.1% 12.2% 36.9%
Spain 8.3% 26.6% 55.2%
Greece 8.3% 27.0% 57.9%
Portugal 8.9% 17.4% 38.4%
Ireland* 4.7% 13.3% 29.4%
Average rate population weights, 2012 7.2% 18.9% 44.9%
*Source: Eurostat.


Unemployment in France rose from 8.4 per cent in 2007 to 11 per cent in 2013, but youth unemployment in 2012 rose to 26.4 per cent in 2012. This increase in youth unemployment is a damning indictment of EU policies.

Table 8: unemployment rate, France

2007 2013 Youth unemployment rate,
fourth quarter 2012
8.4% 11% 26.4%


Average unemployment in the creditor-countries actually fell over the period. Average youth unemployment was 10 per cent; in Germany it was 7.9 per cent, and only Belgium, at 22 per cent, exceeded 20 per cent.

Table 9: Unemployment rate, creditor-countries

Unemployment rate, 2007 Unemployment rate, 2013 Youth un­employ­ment rate, fourth quarter 2012
Germany 8.7% 5.4% 7.9%
Netherlands 3.6% 7.0% 9.8%
Belgium 7.5% 8.6% 22.0%
Austria 4.4% 5.1% 8.7%
Finland 6.9% 8.2% 19.3%
Luxembourg 4.2% 5.7% 18.5%


Table 10: Average rates of unemployment (using 2012 weights)

Creditor-countries 7.5% 6.0% 10.0%
Euro-area average weights (Eurostat) 7.6% 12.3% 27.2%
Debtor-countries 7.2% 18.9% 44.9%

Summary of unemployment data

Unemployment rates were around 7½ per cent in the twelve countries of the euro zone in 2007, but there was a massive divergence by 2012 and 2013. The average total unemployment rate in the debtor-countries was three times the rate in the creditor-countries in 2013, while youth unemployment in the debtor-countries was more than four times the rate in the creditor-countries. This is a scandal.


This article shows that ordinary people in the peripheral countries had to endure massive hardship in recent years. In Ireland there were cuts to government services, such as education, health, and social welfare, and increased taxes, such as the universal social charge, property tax, and water tax. Workers’ wages were cut throughout the periphery.
Output fell and unemployment rose dramatically, especially for young people. At this point the EU Commission is offering a “youth guarantee” of training, whereas it was responsible for destroying millions of jobs in Europe since 2007.
The crisis in 2008 was a crisis of financial capital, which occurred because of the deregulation of banks in Britain in 1985, followed by the deregulation of banks in Europe under the Single European Act and then in the United States in the early 2000s. Deregulation meant that retail banks became casino banks, and this led to the crash.
The EU was partly responsible for the crisis in 2008. It imposed “austerity” after 2008, and ordinary people have had to bear the burden of its mistakes.
And the crisis is not over in Ireland, as the Government still has to reduce the deficit by approximately €4 billion between 2016 and 2018. So austerity will continue until then.