The bigger picture.

national | anti-capitalism | opinion/analysis Thursday November 27, 2003 20:16 by john throne - labors militant voice loughfinn at aol dot com

Has US capitalism already passed its peak as the dominant world power? Is it in decline? If so what will fill the vacuum? Can Chinese capitalism develop its home market and become a major, or the major, world power? What all these issues and more mean for the anti capitalist movement.

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Labors Militant Voice recently sponsored a weekend of discussions in California. The following issues were amongst those considered: The prospects for China, Central Asia, Russia and Eastern Europe, that is the former Stalinist world. And the prospects for US Imperialism and the world economy.

Thinking back on this discussion I am becoming more convinced that it is a very real possibility that US Imperialism, without noticing it, has already passed its peak in its drive towards “full spectrum domination” of the world. A drive on which it started out so confidently after the collapse of Stalinism over a decade ago and on which it continues today. At home and abroad the Bush regime is increasingly being seen to be unable to solve the problems with which it is faced.

It seems clear that the US is sinking deeper and deeper into a military quagmire in Iraq. It is very hard to see how it can avoid a military defeat in this country and how it can get out without it being obvious to the world that it has been defeated. Part of this process is very likely to be the opposition of the mass of the US population to the war and more US military offensives abroad, plus a crisis in, and weakening of, the US armed forces.

The result of a defeat for US Imperialism in Iraq would be that rather than the rest of the world seeing the US as the unbeatable world super power as has been the case in the post Stalinist era and is still the case today, it would be seen as having been defeated and unable to enforce its will on the world. This would affect a major shift in world consciousness and the world balance of forces. The essence of this would be an internal crisis for US Imperialism and the rise of new forces to fill the vacuum left internationally by the US defeat. In the Middle East the likelihood would be the further rise of militant Islam into this vacuum.

Along with this process of US defeat and military crisis would come US economic and political crisis. US Imperialism would be faced with the falling value of the Dollar, the increasing trade and current account deficits and increasing reliance on imports in many areas of the economy. Along with this would be the huge indebtedness of the US working and middle class, the deficits in the budget and cuts in spending, and these would be increasingly contrasted with the super wealth of the top elite. A rising class struggle would be likely to develop in the US with this in turn further weakening US imperialism’s global reach.

If this is the perspective then it means that on a world stage a huge vacuum is already on the verge of opening up. This is not to forget the huge military power of the US. However this alone cannot maintain the US as the dominant world super power. If this process of US defeat and decline has already begun then rapid changes in the world situation are on the cards. But even if it has not already begun then this seems to be the inevitable shape of things to come in the near future. And if this is so a major issue for all activists is what will fill this vacuum and against what world economic background will this process unfold.

It is of course the case that if the international working class had organizations with policies and leaderships dedicated to uniting and mobilizing the working class worldwide into one giant anti capitalist force then this would be the force that would fill this vacuum. However in spite of the important struggles of the working class that are taking place it is not likely, given this crisis of organization, policy and leadership, that the working class will be able to fill this vacuum in the short term. While fighting to build an anti capitalist working class movement we have to also try and face up to reality. In particular we have to try and deal with the issue of the perspectives for world capitalism in this period when capitalism has once again re-estabished itself in practically every area of the world.

This in turn poses the question of perspectives for the former Stalinist world, Russia, Eastern Europe, former Soviet Union countries, and even more so, China. Is it possible that these economies can develop a sufficient home market to make a major impact on the world economy and open up a process of world economic growth perhaps similar to the decades of the post world war two upswing. This would not postpone any chance of revolution, on the contrary it would be likely to see a huge offensive of the working class especially in the major countries of China and Russia as the working class moved to get its share of the growth. After all France 1968 happened in the period of the post war economic upswing. However if such economic development were to take place it would have a major influence on the way in which the vacuum in world power and relations would be filled. It could also give the bourgeois more room for maneuver for a period.

The Chinese economy. This is not just some bubble. To mention a couple of facts that made me personally sit up and pay more attention to what is happening there. Half of all the building cranes which were working in in the world in 2001 were working in Shanghai. Think about this. In one city in one country, half the worlds building cranes. This is some construction that was taking place. Then on this years Chinese New Year holiday 460 million people went home for the holiday to visit their relatives in the country side. Yes 460 million. This means that a gigantic movement of the population has taken place to the cities and to industry in the past decades. 36% of China’s 1.28 billion people now live in the cities.

China’s output quadrupled in the period 1978 to 2000. According to one report on a purchasing power parity basis China's economy is second only to the US. $1.2 trillion dollars in personal savings sit in China’s banks. As the Wall Street Journal says in relation to this sum: ”China certainly has the capital to fund growth”. In other words this is not some little burst of growth totally dependent on foreign capital. This is not to deny that foreign capital is an important player in China. 50 million Chinese are now “consumers’ in the western sense. The most important market today for the most expensive BMW, the 12 cylinder 760 sedan, is not Germany or the US. It is China.

Now I know all the problems that exist and stand in the way of China developing into a modern capitalist power with a developed home market. Financial crisis, rising class struggle, rising conflict between the countryside and the cities, pollution etc.,. But of course all the major capitalist powers experienced such developments in their rise to advanced capitalist country status. Such crises do not mean that China cannot develop in the direction of becoming a major capitalist power with a developed home market and maybe even the major capitalist power in the world.

Any activist group which is not discussing such a possibility at this time is not dealing with the real world. I would like to pose this question: What theoretical reasons stand in the way of this development, that is of China moving in the direction of becoming a major capitalist power with a developed home market and even in the direction of becoming the major capitalist power in the world?

The theory of the permanent revolution explains the reasons the former colonial countries in the age of imperialism cannot in general develop into advanced capitalist countries. As far as I can see these factors do not exist in the former Stalinist countries which are now emerging as capitalist economies. So what is to prevent these major sectors of the world developing their home markets and developing in the direction of becoming major world capitalist powers.

Combined and uneven development was a term used to describe the world 100 years ago. From this Trotsky developed his theory of the permanent or uninterrupted revolution. This term, combined and uneven development, was used to describe how the advanced capitalist powers, the imperialist powers on the one hand, and the rest of the world which had not experienced their bourgeois revolutions, the former colonial countries, were bound together in a process of combined and uneven development.

Today there is still combined and uneven development but the overall content is different. There are still the major imperialist powers, there are still the countries with colonial pasts and partly feudal systems which cannot develop into advanced capitalist powers. But today, along with this, there are the former Stalinist countries, now capitalist countries, with huge educated work forces, with no feudal landlord class, and with educated elites with ambitions to join the advanced capitalist world.

And in the case of China and Russia to be a, or maybe the, major power within the capitalist world. Putin’s move against the billionaire Khodorovsky was not a move back towards the Stalinist planned economy but a move to strengthen Russian capitalism in its dealing with the rest of the world. The leaders of these two major emerging capitalist powers have ambitions which are based in the powerful resources that they have in their countries and in the history and tradition of these countries as great powers. These are not petty ambitions.

So the questions I have are these:

#Is it the case that the period since the collapse of Stalinism when the US seemed the only and the unbeatable power on the world stage is already over? Is it the case that the immediate period ahead, that is a year or two or three, will see the mass consciousness on a world stage change as it takes in the reality of US defeat and weakness, not its strength? If so this will result in a major vacuum on a world scale and the process of filling this vacuum, and what will fill this vacuum will be a major element in world developments. .

#In such a situation what is the prospect for Russian and Chinese capitalism to strengthen themselves and to move out on the world stage to try and fill this vacuum and to succeed in making significant strides in this direction. And what are the prospects for European capitalism to further strengthen and unify itself and try to challenge also for a major place in the new unfolding world situation. Is the recent German/French courtship motivated by this race.

#And as part of this what are the prospects for Chinese capitalism and to an extent Russian capitalism and capitalism in eastern Europe and the former countries of the Soviet Union to develop home markets sufficient to have a major impact on the world economy, and thus opening up the prospect of a new period of increased growth in the world capitalist economy. That is a period when the curve of capitalist development would be upwards.

#And within this process what conclusions should be drawn in relation to the productivity gains that are inherent in the new technology that has been developed. It seems now definite that the US economy has moved to a higher rate of productivity growth over the past ten years. To what extent can these gains become a factor internationally and affect the world economy.




In trying to answer my own questions: I do believe that the direction of world events are towards the rise of Chinese capitalism, Russian capitalism, and the retreat of US capitalism from its world domination. I also believe that we will see the process of the development of Chinese and to a lesser extent Russian capitalism towards developing their home markets and having an important and significant affect on the world economy. And therefore I believe that it is very possible that the tendency that we will see will very possibly be towards an expansion of world capitalism for a time with Chinese capitalism increasingly central to this development. The extent to which this tendency can realize itself is not clear to me and is of course very problematic and like all periods of capitalism will be filled with crisis, conflict, revolution and counter revolution.


In this process the struggle for resources will become ferocious. I think that part of the reason for the the invasion of Iraq was US imperialisms ambition not only to control more decisively the Middle East, but also to dominate Kazakhstan and the entire Caspian Sea region and to try and put a ring of bases around China. With the decline of the US as the dominant force, with the rise of the new capitalist powers, the world will be thrown much more into a situation of brutal unrestrained capitalism, and this means increased capitalist rivalry and competition. With Stalinism gone as a restraining force, and the working class held back by their leadership and the confusion caused by the disastrous experience of Stalinism, capitalism will be less restrained than it has been over the past half century and therefore the tendency towards conflict and wars and catastrophe will be strengthened.

However I do believe there is one very important factor that does stand as an insurmountable obstacle to the development of China and Russia into major capitalist economies with mass consumption such as the US and Western European and Japanese economies are today, and which stands in the way of a new prolonged era of sustained economic upswing of capitalism . This obstacle is the environmental crisis. The more these new capitalist economies develop towards the model of the advanced capitalist powers the more the catastrophic environmental consequences will become apparent. Life on earth as we know it will be seen to be threatened. This will have a major impact on consciousness leading to an increased demand for an alternative to capitalism.

I have not dealt here to any extent with the role of the international working class. This is not because I think it will play no role. But it is because I want to focus on the possible developments in the immediate years ahead within the various capitalist economies and powers. It is also partly because I do not see it likely that in the immediate years ahead the working class will be in a position, from the point of view of organization and policy and leadership, to offer an alternative to world capitalism which will appear realistic to the mass of the working class internationally. I hope that I am wrong. However when the world capitalist system enters clearly into the disastrous mess that lies ahead this situation can change very quickly. It is that we are working for, and this work will be more successful if we have a realistic view of the various possibilities for world capitalism.

Sean O’T.