A PRE-REVOLUTIONARY SITUATION IN RUSSIA?

The ongoing debate between Zaschita and Stachkom over how to mobilise wokers in Russia today highlights the need for clarity of theory and practice united in a revolutionary program. What is needed is a Transitional Program for Russia based on the theory and method of Lenin and Trotsky. We outline here what we think are the essential elements of such a program.

First, in order to decide this question we need clarity on the character of Russia in relation to the global imperialist economy. Lenin regarded Russia as imperialist before the October revolution. It plundered its colonies no less than the Western powers. Today those who take the view that the SU succumbed to either state capitalism or semi-feudalism in the first decades after the revolution are inclined to see Russia as imperialist today.

Trotskyists however viewed the SU as a degenerate workers’ state until its downfall at the hands of the bourgeoisie after 1991. The restoration of capitalism was not driven by a national bourgeoisie, but by Western imperialism. So Russia today is a semi-colony of Western imperialism. Its weak national bourgeoisie dreams of a reborn Greater Russian imperialism but the re-emergence of capitalism in Russia is too late and too backward to compete with the US, the EU or Japan other than by building a fascist empire like the Nazis.

Russia’s character says a lot about its current situation. Russia is super- exploited by imperialism and this is the ultimate cause of its economic collapse, the smashing of industry and the loss of jobs and wages. Russia is therefore oppressed by Western imperialism 100 times more than it oppresses the Chechens or other nationalities. Of course a big oppression does not excuse a small oppression. But this imperialist oppression is a material reality that makes the appeals of Great Russian chauvinism influential within the working class.

The second point is that Russia’s relation to the imperialist economy is compounded by a global structural crisis of capital. Therefore the economic ‘shock therapy’ after 1991 was not an optional extra imposed by the IMF (US imperialism) but a necessary application of the law of value (structural adjustment) to restructure Russia’s economy as a source of imperialist super profits to boost flagging profits. The crisis in Russia became intensified as a result and can only be resolved in imperialism's favour at the expense of further severe attacks on workers' jobs and living standards.

Since the Russian masses are superexploited and oppressed by imperialism at a time of global structural crisis, can it be said that Russia faces a pre-revolutionary situation? Of course, such a situation does not follow mechanically from even the most severe economic collapse or hardship. It requires also a working class mobilised as a threat to the class rule of the bourgeoisie. Without that threat to the bosses class rule, the bosses can go on ruling in the ‘old way’ and can hide behind the 'fig leaf' of parliament without openly declaring a naked struggle of force. In Russia today, the workers are not yet mobilised as a force capable of beginning to pose that threat.

In this situation it is normal that the class struggle should take the form of a struggle against national oppression, and that external and internal enemies of the 'people' become the target of ‘red-brown’ politics. This means that Russia’s semi-colonial economic crisis is being resolved in a reactionary way on the basis of the patriotic front which unites all Russian ‘people’ against ‘foreign’ and ‘alien’ influences. If workers do not break out of the patriotic front then no pre-revolutionary threat is posed and Putin’s regime need not resort to open class violence. If they do begin to break out then events can quickly create a revolutionary situation.

If we learn the lessons of the interwar years in Europe about the causes of the rise of Fascism it is clear that a mass workers movement organised by Communists and by social democrats posed a challenge to the weak ruling class. It made it necessary for the ruling class to embark on a fascist front to smash the working class. We had a revolutionary situation in which the power bases of both classes were balanced on a fulcrum. It was only necessary for the Communists to bloc with the social democrats against Hitler to tip the balance of power in the workers' favour.

Had the Stalinists taken Trotsky's advice a revolutionary outcome would have been possible (see Class Struggles in Germany). Instead the Stalinists divided the workers and Hitler captured the vacillating petty bourgeois and the more backward sections of the workers. A revolutionary situation ended in counter-revolution.

What of Russia today? While the economic crisis propels workers into struggle, this struggle is largely coopted by the patriotic front. Before a pre-revolutionary crisis can emerge fully it is necessary to break the best workers from the patriotic front into a workers united front lead by revolutionary communists. As the threat posed by the united front forces the bourgeois regime towards fascism it will be necessary for revolutionaries to counter this mortal danger by manoevering to bloc with all anti-fascist forces, at the same time building an independent revolutionary workers movement.

In Russia today the workers forces are divided between first, those who neutralised and remain part of the patriotic front; second, those like Zaschita that are struggling to form an independent union movement and who bloc defensively with democratic forces; and third, those like Stachkom that call today for an offensive movement based on workers' occupations.

Only a revolutionary party with a Transitional Program based on the theory and method of Marx, Lenin and Trotsky can unite these tendencies around demands that combine immediate and democratic demands with organisational methods that break workers from the patriotic front into the united front, and which direct this movement towards workers control of industry and ultimately the seizure of power.

Down with Putin’s Labor Code!
Down with Great Russian Chauvinism!
For an All-Russian Democratic Fighting Union!
Defend Jobs and Wages by Occupations!
Build Workers’ Factory and Self-Defence Committees!
For a new Leninist-Trotskyist Party!
For a Workers’ and small Farmers’ Government!

From Class Struggle No 36 December 2000-January 2001

Workers answer to APEC [June 1999]

In the last issue we covered some of the history and background of the APEC forum now we look closely at the imperialist character and further develop a workers approach to such international groupings.

The APEC (Asia Pacific Economic Co-operation) forum is dominated by the imperialist interests of the U.S. and Japan. These are both competing for access to resources (raw materials, cheap labour) in the member countries.

Meanwhile the big union 'worker' leaderships try to get a social clause into APEC. A social clause means some minimal labour rights, 'justice', and doesn't exploit the workers too obviously.

CTU begs at the APEC table

The CTU (Council of Trade Unions) has further revealed just how rotten it is. Angela Foulkes (CTU secretary) has lined up for the Prime Minister's promotions team to hype APEC. The media over-kill is business as usual. They paid Sean Fitzpatrick to "hock the family silver" (in the promotion of the sale of the Auckland International Airport).

The CTU obviously thinks that it can 'reform' APEC with these proposals so that it is not hostile to workers interests. But it is naive of the CTU to think it can tame capitalism by participating in APEC. However, it is not surprising given the rightward drift of the whole traditional Labour leadership. For example, just remember the so-called "Labour" Party showed itself as a bosses' party between 1984 to 1990. Another example was the CTU's refusal to lead a fight against the Employment Contracts Act.

However as workers we remain tied into these rotten leaderships, and one of our first tasks has to be to show up these mis-leaders so they can be removed and replaced by accountable representatives. Then workers will be able to strike out in a progressive direction.

For democratic fighting unions: Unions that are run by the members and fighting to defend wages and conditions, in the first instance.

We also need a party of communist workers to provide a lead to militant workers. Otherwise, the union movement will remain tied by the "labour bureaucracy" to the capitalist class. The labour bureaucrats are the paid workers of a union. Their interests are to protect and preserve their own wages and privileges. Therefore, they do not raise a challenge to capitalism; their role invites them to negotiate with capitalism.

TUF oppose APEC

The Trade Union Federation (TUF) is working in opposition to APEC under the slogan; "Fair trade before free trade". TUF have a set of demands, some of which are worth supporting, and are part of the opposition to APEC.

The Trade Union Federation says:

APEC does not represent the interests of democratic governments in the region but of Trans-National Corporations. The lack of democratic structure and process in APEC supports the dominance of a narrow and destructive business agenda.

1) Aotearoa/New Zealand should withdraw immediately from APEC.

2) Aotearoa/New Zealand should call for the dissolution of APEC.

3) The Government should provide a full and objective National Interest Analysis of existing trade and investment policy, to be subject to further submissions before the select committee and full parliamentary and public debate.

4) Aotearoa/New Zealand should advocate the establishment of a properly constituted forum on regional economic co-operation and development comprised of member nations. This forum would produce a constitution based on the promotion of democratic control, social justice and self-determination amongst member states. It would consider the impact of globalisation and World Trade Organisation initiatives on member states in the light of these principles, including such questions as the relationship between investment flows and trade barriers, the equitable distribution of income both between and within member states and the role of trade in the national development of member states. Its first priority would be to commission a comprehensive empirical study of the impact of trade liberalisation over the last twenty years in the Asia Pacific region and assess the evidence of this study in terms of a wide range of social and economic criteria.

5) That the Government immediately adopts a policy of national economic development. That should include the specific goal of moving the Gross National Product to the level of the Gross Domestic Product within the next three years.

6) That the Government immediately announces the freezing of 1998 tariff levels until the year 2005 and a review of all other APEC "commitments

However, "fair trade" like the promise of a "level playing field" is bullshit and the TUF won't get "fair" trade under capitalism. Trade is based on the sale of commodities produced by labour and unless all the value of the commodity goes to the labourer or producer there can be no "fair trade" any more than exploitation can be "fair".

So what is wrong with "free trade" is not hat it is unfair but is based on the same lie as the "free market" under global capitalism. There is nothing "free" about the market when one group of sellers, wageworkers are forced to sell their labour to be exploited or else starve. TUF's position on "fair trade" implies that it thinks that exploitation results from "unfair" wages that can be corrected by state legislation.

The overall character of the TUF opposition is liberal. In effect it wants an international body (global government?) to set the rules for capitalism. They only want it to be a little easier for working people. They have the classic liberal mission before them; to humanise the capitalist system (eg they call for "social justice" and "self-determination"). We say that is impossible under capitalism. Capitalism is an economic system that reduces humans to the profits it wants to extract from us. There is no true "free trade" under Imperialism, and "fair trade" is impossible while the capitalist system of exploitation remains. We need to overthrow capitalism and build a new system.

Build a workers fightback

Workers cannot deny the realities of capitalism eg. concentration and centralisation of capital in giant Transnational Corporations. We know this because it hits out at workers. Whole industries have been shifted offshore, and workers have had to travel to gain a job. In other industries (eg. wood) workplaces have closed or been "restructured" and workers laid off.

Another reality of "free" trade under capitalism is that capital can move more freely (than workers). The TNCs can ship entire plants to whichever economy they wish to site it in, eg. Kenson industries shipped machinery out within days of shutting the workers out.

Against this capitalist programme we say workers need to occupy factories or plants threatened with closure. That forces the question to be asked; is the plant the boss's machines or the workers? It is built and operated and practically lived-in by workers. Or, is it machines, the capitalists' property" which produces value? We would expect that capitalists will defend their property rights with all their might - i.e. the state forces. Then we would need workers self-defence militia.

We also fight for open all borders for all working people: No bars on workers migration. As capital is mobile and does not have to obey immigration laws, so should workers be free to go where there are jobs. We fight for the rights of migrant workers to equal conditions and citizenship. This gives effect to the reality that workers have no country and are part of an international labour force and cannot defend their interests by lining up behind their nationalist bosses to fight trade wars and military wars.

The Struggle against Imperialism

The imperialist powers can trade more freely than smaller (semi-colonial) nations. The size of their companies means they have an advantage, and can reap a super-profit. We describe weak economies as semi-colonies where they are controlled, owned, or otherwise dominated by international capital.

We say that NZ is a semi-colony as the economy is super-exploited by imperialism. Apart from the already high and growing level of direct foreign investment in the privatised state assets in energy (see article on Power to the Powerful), resources (e.g. Timber - International Paper) services (TELECOM, NZ RAIL etc) media (Murdoch and O'Reilly etc) which allows super-profits to be repatriated overseas, NZ is faced with high trade barriers.

A good example is the barrier to NZ lamb going to the US. The US has force NZ to totally remove subsidies from farming, yet it subsidises its own farming industry which is inefficient to buy farmers politically conservative (land-owners often are) votes. Farmers are therefore quite a significant support for the ruling class' so-called democracy.

A second example is the barriers put up against NZ timber going into Japan. When the Asian markets crashed, and the commodity price for timber fell the Japanese protected their own timber plantations by putting a tariff on any imported timber. This clearly shows the major economies of APEC protecting their own inefficient primary production at the cost of a weak semi-colony.

A more recent development is the push by US based TNCs to break up of the NZ Dairy Board. The object is to bring key primary produce export industries to even more under their direct ownership and control (as is already the case in the ownership of Meat and Timber industries).

Dairy industry

Dairy cooperatives are under pressure from world capitalism. The interests of international capital would like to reap a super-profit from this highly efficient industry. They want to buy up sections of the dairy cooperatives and turn them into fully capitalist enterprises. That means they will run them for the TNC owners profits and not for the working farmers shareholders who get a return on the value produced by their own labour.

The industry in NZ has been undergoing a process of concentration of capital into larger and larger cooperatives. We call for a defence of the "cooperative" ownership structure in the dairy industry. Where the cooperatives are growing, working farmers need to fight for the democratising of the cooperatives. The interests of the (smaller) working farmers are being overtaken by those of the larger scale corporate capitalist owners. This means farm managers, share-milkers and labourers are set up to become exploited as cheap labour.

Nationalism

Some of the capitalist class of semi-colonies like NZ may be under threat from foreign capitalists. This may appear to temporarily align their interests with the interests of workers in opposing imperialism. Some layers of workers and capitalists are attracted to a strategy of economic nationalism or protectionism especially as this appeared to work in the interests of workers during the post-war boom.

But this is a deadly trap as national capitalists are unable to survive in the globalised economy without super-exploiting their workers also.

Therefore, despite an apparent common interest in opposing imperialism especially against trade barriers and military attacks, workers need to organise separately, because even while our immediate interests may temporarily coincide, our class interests demand the overthrow of capitalist property relations at home.

Some layers of workers have interests that coincide with the interests of national capitalists in a destructive way. For example, the workers who supply the US and its allies with arms and weapons. Their immediate interests are with the US as global "police" / war-mongers. However their long-term class interests are not.

A recent local (NZ) example of this was the Engineers Union. The executive (bureaucratised leaders) of the Engineers Union wanted the "ANZAC" frigates project. Why? - because they wanted their members to build the frigates. As long as they are paid, and collect union dues, nothing else really matters. They don't mind wasting labour, on building floating targets/tombs for the NZ state forces to sit in. The last edition of "Metal" celebrated the growth of jobs (from 120 to 300+) at "Safe Air", a branch of Air New Zealand. The EU proudly (on the front page) declares that the company as taken over the NZ Air Force maintenance team and contracts. They are proud to be servicing the military of the Asia-Pacific region, Philippines and Australia.

Many workers would be happier if they were building anything other than weapons, but work because they need a wage to survive. Other privileged workers would fight for their owners, to defend their wage-slavery and privilege. At the core of the issue is class. The working class is made up of workers because we need to work in order to survive. If we happened to live in a privileged nation state, our lifestyle may be more comfortable. However privilege cannot stop the capitalist economic crisis hurting us also.

Workers internationalism

We are for the construction of international trade unions. Not just at the level of agreements between union leaders, but also at the membership level. Members would need to fight in their unions for the programme of international unions to take up a progressive struggle.

This will be seen to differ from the programmes drawn up by bureaucratic leaders. The bureaucrats only motive is to try to defend the jobs of their current members, since these members are the source of their salary.

Current international agreements are often based in an imperialist nation or on a privileged (comparatively) workforce. Union leaders are too slow in considering expanding to cover other nations who could be a source of either cheaper labour, or if it came down to class struggle with the bosses, a source of scab labour for the bosses. Workers need to recruit these workers to unionism before the bosses can divide workers and continue to rule with ease.

Trade unions members have an interest in recruiting workers to unions, and building their awareness that our only strength as workers is our ability to take united action. Through truly international unions we can build workers solidarity.

International unions could defend workers jobs by fighting for equal wages and conditions across international borders. This could organise workers in semi-colonies, against super-exploitation by international capitalists. This would begin to improve the wages and conditions of workers in the semi-colonies. At the same time as proving the strength of workers united organisation.

Following from the above progressive moves, it becomes clear why we need to fight against barriers to workers migration. Since international unions would create the opportunities for workers to travel and work with much more protection than migrant workers get at present. This would also allow the spread of workers education in union principles across an international workforce.

The whole thrust would be for the building of worker solidarity, raising labour rights, organising non-union workers and the growth of healthy international trade unionism.

An example is the Seafarers Union. The Seafarers response to the threat of international competition on the seas was to align their interests with the nation state and the stronger Australian union. In NZ they were protected against competition on internal shipping routes through NZ state law. Internationally they had signed an agreement with their Australian counterparts (the MUA- Maritime Union of Australia) protecting trans -Tasman shipping routes.

The above were defensive, protective deals. They show that the trade unions are at most "reformist", trying to reform capitalism for their self-protection. This puts them onto the parliamentary reformist path, where they place their hopes in a new (Labour oriented) government changing the shipping rules.

Protectionist deals are no match for the already global capitalist organisations (the bosses class). What is needed is an international view, which only a truly international organisation can build, and even this would need the revolutionary communist method of Marx.

Fletchers paper mills

Lets take a look at how workers might collaborate internationally within a TNC. Fletcher Challenge was seen as NZ's main TNC (it is now half-owned offshore). Fletchers has had major strikes and lockouts of paper mill workers in a number of countries. However they have been able to continue production by isolating the industrial dispute to one country. For example the mills in Canada were out but the NZ mills carried on running. Internationally pulp and paper workers were not organised beyond appeals for financial support. If they had taken strike action at the same time, in solidarity, them they would have shown their united strength.

For workers control of all branches of TNCs!

From Class Struggle No 27 May-June 1999

What's wrong with APEC? [February 1999]

The recent APEC meeting in Malaysia was notable for its failure to push free trade in the face of the so-called Asian crisis. Instead it got into a spat about "Asian values" and "human rights". NZ’s Jenny Shipley joined with the US vice president Al Gore to attack Dr Mahathir’s jailing and prosecution of his former deputy Anwar Ibrahim. Since the US is the world’s worst offender on human rights, what really motivates Gore’s attack is Dr Mahathir’s retreat to economic nationalism to protect the Malaysian economy from the harmful effects of economic liberalisation. Yet neither free trade nor economic nationalism in any combination can end human rights abuses. Both are against the interests of workers. We explain why.

APEC (Asian Pacific Economic Council) is widely seen to be a threat to workers everywhere. This is because APEC is designed to extend 'free trade' among the Asia Pacific states. Free trade is seen to be in the interest of the major powers and against the interests of the 'developing' states because it will drive down prices and wages in these states. It is also feared that APEC will reinforce regulations like the MAI that put severe limits on the ability of weaker states to protect and benefit from their own resources.

The alternative is posed as economic nationalism – i.e. to reject ‘free trade’ and to regulate trade and capital flows for the national benefit. This means breaking from the model of APEC and following the example of China in tightly regulating Direct Foreign Investment (DFI). Malaysia is today seen as opting for this alternative after having its economy destabilised by volatile capital flows. Japan too has turned its back on demands to free up trade in timber and fish. In a recent article in the New Left Review #231, Robert Wade and Frank Veneroso argue that the Chinese model is now seen as the solution to the so-called "Asian Crisis" by insulating the region from the worst ravages of chaotic world capitalism. The Asian economies provide half of the world's savings so they don't need to agree to the destructive free trade policies of the IMF or World Bank in order to get funds.

Like the Korean students we call for the IMF to get out! We are against IMF austerity and debt for equity measures as the means by which US capital gains control of semi-colonial and weaker imperialist economies. However, we do not see a retreat to economic nationalism as the real answer because it does not change the root cause of the problem - capitalism. We argue here that both free trade and protection are merely different ways of managing capitalism and that neither of these 'alternatives' is in the interests of workers. What we want is workers control and a planned economy that is integrated into an international socialist economy where production is for need and not profits.

What's wrong with free trade?

The fear of free trade is well founded. The large protests that have met APEC meetings since its start, sure to continue in New Zealand in 1999 testify to this real fear. (See article on 'APEC Security threatens democratic rights'). 'Globalisation' is the swear word that expresses this fear. Under the capitalist world economy, NAFTA, the WTO, MAI and APEC, are all designed to regulate super-exploitation and unequal exchange between the imperialist powers and the poor colonies and semi-colonies. Free trade under these rules disadvantages the poorer commodity producers who have almost no control over prices of exports or imports.

What is produced is determined by competitive advantage under the ownership and control of MNCs. If costs are competitive DFI will flow in and super-profits will flow out. While this arrangement has the advantage of cutting costs of production, it also depresses living standards and expands the surplus population of unemployed or under-employed. Any attempt to deregulate or interfere with these arrangements will lead to punitive law suits for breach of contract, and/or economic sanctions, and ultimately political and military intervention. The fate of Iraq during and after the Gulf War is a good example.

Is Economic Nationalism any better?

Most of the left, especially the eco-left and the Maoist left, advocates national economic controls against free trade. That is, instead of the free reign of MNCs, nation states must impose social constraints on DFI and the extraction of profits. Usually this means some form of tax on DFI that can fund a social dividend to subsidise the social downside of globalisation.

Despite its apparent progressive thrust, there are some clearly reactionary political aspects to this. Any attempt to appeal to nationalism against globalisation runs the risk of subordinating the working class to the national bourgeoisie. That is, it isolates workers in each country, separates and alienates them from their working class brothers and sisters in other countries, and gives priority to an alliance between workers and bosses in which bosses are dominant.

Logically the downside of globalisation cannot be defeated by national solutions without reimposing trade and capital barriers that lead to trade wars and ultimately military confrontations in which workers kill workers.

Second, this 'solution', unless it breaks free of the capitalist world economy, can be easily sucked back into the 'new' state form widely promoted as the 'new middle' (see ‘Who Runs the German Economy? Economist, November 21), the 'third way' or the 'radical centre' (See article on the 'Smart, Wired, Zero Sum State’ in Class Struggle #24).

Under this model the local state becomes a direct agent of globalisation, as the manager of investment, and of social control. Yet because the social fund available to correct the social downside cannot be more than a token contribution without raising taxes and driving out DFI, there is no real counter to the harmful effects of globalisation upon society.

Workers internationalism

So it seems that neither alternative can escape the effects of globalisation upon the masses of workers and peasants in the 'less developed countries' or those impoverished sections of society in the 'developed' world. The answer then must be to transform those progressive struggles to limit the negative impact of globalisation on local populations, into a successful transition to socialism.

How to do this? First, we have to recognise that free trade is contradictory. It has both progressive and destructive aspects. The trick is to neutralise the destructive aspects by advancing the progressive aspects. Under the free reign of the MNCs, ownership and control is rapidly concentrated into the hands of a few powerful MNCs and their imperialist states. This amounts to a progressive 'socialising' of the means of production as the world economy becomes increasingly interdependent.

In that sense the world economy becomes internationalised, and along with it, the working class. So while on the one hand MNCs that span a number of countries can attempt to evade attempts at nationalisation in any one country by capital flight, on the other, MNCs cannot evade a potentially powerful international labour movement if it is organised and united.

Therefore instead of trying to break up MNCs by nationalising them in any one country, which can only lead to isolated struggles and defeats at the hands of sanctions and military offensives, it is important for the international labour movement to 'socialise' them further. This means giving up on the reformist idea that the capitalist state can be used in the transition to socialism, and taking up the idea that workers integrated into the global division of labour unite internationally to progressively 'socialise' these massive combines. By this we mean imposing the interests of labour onto the owners by extending workers control over production and planning. The solidarity that has emerged around the recent struggles of Korean workers and the Australian 'wharfies' is a sign of what could be possible once workers recognise that their strength in unity is must be turned into international solidarity.

Progressive nationalism?

This does not mean that some of the more progressive demands of economic nationalism should be junked. Privatised assets should be re-nationalised without compensation, and all state assets put under workers control. Similarly, progressive taxes on profits and speculation should be increased to fund social spending. Taxes on profitable industry rather than subsidies to unprofitable industry should be the basis for funding social spending. Where these social costs drive capital out of the country, capitalist property should be socialised and put under workers control.

Such demands upon the capitalist nation state would meet with rejection by the capitalists on the grounds that they would destabilise the economy by threatening the rights of private property. That’s why to be successful these measures would require a much higher level of political organisation of workers capable of supporting a Workers' Government based on workers militia. Moreover, the success of a Workers' Government in any given country to resist attempts by imperialist states to smash it would depend upon the strength of the international workers movement and the capacity of workers in the imperialist countries to put a halt to such armed interventions.

So whichever way you look at it, there can be no successful transition to socialism without overcoming the reactionary nationalisms that divide and rule the international working class, and putting the development of the progressive socialisation of the world economy that is rapidly occurring under globalisation, under workers' control.

NZ out of APEC!

For Workers Internationalism!

From Class Struggle, No 25, Dec 1998-Feb 1999

It's Not an Asian Crisis, it’s a Capitalist Crisis [March 1998]

The current so-called "Asian Contagion" is pictured much like the "Asian Invasion" as some disease that originates in Asia and spreads around the world. This racist picture of Asian "Values" becomes the convenient scapegoat for international capitalism to hide behind and to justify draconian IMF medicine at the expense of Asian workers and poor peasants. Class Struggle argues that the so-called Asian "crisis" is not the result of anything unique to Asia, but the necessary outcome of imperialist Globalisation, and should be opposed by workers and poor peasants everywhere.

The Asian Tiger "cubs" Grow Up.

The Asian Tiger "cubs", South Korea, Thailand, Malaysia and Indonesia, are experiencing big economic problems. The standard Western view has been to wheel-out racist arguments about "Asian values", corruption and cronyism. A version of this view is that held by the `Economist' and Paul Krugman, a prominent economist at MIT. They say that the Asian `crisis' was caused by short-term, high-risk speculation in assets such as company shares and land by local and foreign banks which assumed that their loans were backed by governments, something like the "soft credit" in the former Soviet Union. According to the Economist this creates a "moral hazard" as bankers do not have to risk losses from bad investments, since they can rely on getting bailed out by the state.

If correct, this is a supreme irony. It seems that the "moral hazard" can’t really be blamed on Asian values at all. It was the large multinational banks, which are the international arm of finance capital, that allowed themselves to speculate for super-profits in countries where there were no effective checks on company profitability! Something to do with "western values" perhaps? Not really. Speculation is endemic under late 20^th century capitalism as excess finance capital scours the globe for the biggest bucks. So it is with state intervention! This is not some nasty Asian family nepotism after all, but the state of the art. Despite the protests of some extreme right-wingers like Milton Friedman who wants the IMF junked, the imperialist states are using the IMF to protect their investments in the "tigers". So it is the Western banks and not the Tiger companies that are being baled out by the IMF. Not only will the IMF loan billions to cover the most immediate debt to Western banks, on the pretext that they are bankrupt, the Tiger economies will be radically restructured so their devalued assets can be bought up cheap by US, Japanese and EU multinationals. Who’s bailing out who?

How cynical can you get? It seems that the Asian crisis, far from something originating in Asia, or even the Pacific, is part of the process of global concentration of financial and industrial assets into the hands of the major imperialists powers. This in itself is a process which has been going on for the whole 20th century as the world's economic resources have been increasingly concentrated and centralised into the hands of a group of giant Trans-National Corporations -TNC’s. So it is the height of hypocrisy for the IMF to come to the "rescue" of the Tigers when its purpose is to oversee a bonanza of takeovers by imperialist powers. But then this is nothing new, in the march of imperialism the super-exploitation of the colonies and semi-colonies has always been justified ideologically as "saving them" from barbarism and for the cause of civilisation!

History of colonialism.

All of these countries started off as colonies. South Korea was a colony of Japan. Thailand and Malaysia were colonies of Britain, and Indonesia a colony of the Dutch. They were raw material colonies where the mother countries extracted rubber, timber, minerals and so on by super-exploiting cheap labour. When they gained their political independence they had to insulate their economies to achieve any economic independence. This meant putting up barriers to foreign ownership and foreign goods so as local industry could get off the ground. Otherwise they would have remained just like colonies with their raw materials extracted and shipped off to the mother country.

This wasn't something unique to Asia. It is something that all new capitalists states have to do. The US did it when it became independent from Britain. Japan did it by rejecting all attempted imperialist takeovers. So in Korea a group of wealthy merchant banking families diversified into all sorts of industry to form the chaebols after the model of the Japanese cartels. In Thailand and Malaysia a group of prominent families ran the economies and the military. In Indonesia the ruling family of General Suharto, pretty much came to dominate the economy.

Protectionism creates a national capitalist class which owns and controls most of the economy and runs the state including the military machine. While production is for the local market, it doesn't matter a lot that production is inefficient based on cheap labour and inferior technology. The political ideology which accompanies protectionism is called "economic nationalism". The national capitalists get rich, but rising living standards also creates a middle class and a strong working class which become committed to a "national consensus" around the policies of economic nationalism. Dissent is eliminated by appealing to nationalism, as was the case when Suharto killed millions of communists in 1965.

Read On:

From Class Struggle, no 20 Feb/March, 1998