Monday, October 23, 2017

Statement: Syrian Political Prisoners on Hunger Strike

We reprint this statement from the website of the Alliance of Syrian and Iranian Socialists for our readers interests.

Statement From Detainees in Homs Central Prison

More than 500 political prisoners in Homs Central Prison, detained by the Syrian regime for participating in the Syrian revolution,   have issued a statement announcing that they have launched a hunger strike.  There are currently over 100,000 political prisoners in Syria,  mostly in the Assad regime’s dungeons.

October 17, 2017

“We are detainees in Homs Central Prison who have been arrested for participating in the revolution in our beloved country.
We declare that we will refuse food and drink and declare a hunger strike

1. Because we have suffered, as the great Syrian people have suffered, from oppression, injustice and tyranny.

2. Because we were always treated as the weakest link in any negotiations, and we were the last item to be considered in any local or international meeting.

3. Because we are abused in the prison and cannot bear this suffering, and the pain of our parents, spouses, children and loved ones.

4. Because all the promises made by all the parties to the conflict and crisis in Syria have been in vain.

This is a distress call on all humanitarian organizations requesting immediate intervention to prevent any prison break-in.

Our peaceful hunger strike is our legitimate right and is the only way left to us to raise our voice to all the world’s free peoples.

We demand that we be immediately evacuated from prison prior to any negotiation, as with those areas, towns and villages evacuated within hours under the auspices of international observers.

We only want our freedom, our dignity and the release of ourselves and our families, so that we may return to our parents, our children and our other loved ones.

From: The Detainees of Homs Central Prison
Tuesday October 17, 2017
معتقلو سجن حمص المركزي يطلقون نداء استغاثة إلی جميع المنظمات الدولية والأممية والانسانية وحقوق الانسان خاصة والمجتمع الدولي والی كل حر في العالم ..
“نحن معتقلي سجن حمص المركزي و عددنا خمسمائة و خمسون معتقلا موقوفون علی خلفية الثورة التي قامت في بلدنا الحبيب نعلن اضرابنا التام عن الطعام و الشراب و نعلن اضراب البطون الخاوية
.1 لأننا عانينا ما عاناه هذا الشعب العظيم من قهر و ظلم و استبداد
.2 لقد كنا الحلقة الأضعف دائما في اي تفاوض وكنا البند الأخير في اي اجتماع دولي او محلي
.3 لقد ضاقت ظلمات السجن بنا ولم نعد نستطع ان نصبر علی آلامنا و آلام اهلنا و اولادنا
.4 ان الوعود التي وعدنا بها من كافة الاطراف التي تباحثت ملف الأزمة في سوريا كانت هباء” منثورا و وعود واهية .
1 هذا نداء استغاثه الی جميع المنظمات الانسانية للتدخل الفوري لمنع اي اقتحام السجن علينا
.2 اضرابنا السلمي عن الطعام هو حقنا المشروع و إيصال صوتنا لجميع احرار العالم
.3 خروجنا الفوري من السجن قبل اي تفاوض اسوة بأي منطقة او مدينة اخليت من سكانها خلال ساعات برعاية دولية
.4 نحن نريد فقط حريتنا وكرامتنا و فك اسرنا بشكل فوري و عودتنا الی اهلنا و اولادنا .

**معتقلو سجن حمص المركزي.
الثلاثاء17 10 2017 الساعة الثانية صباحا

Sunday, October 22, 2017

Class Solidarity: Presidential Appeal for US Workers to Cough up More Cash.

Does anyone really believe the hands over hearts is sincere? Aren't they all draft dodges anyway?

By Richard Mellor
Afscme Local 444, retired

So four out of the five living US presidents turned up at a benefit concert in Austin Texas for hurricane victims, in Florida, Texas and Puerto Rico.  This is part of the America is One tour that has raised $31 million so far. The present Predator in Chief is richer than all of them worth some $3.1 billion. Carter is the poorest it seems with the Obama’s a close second. Obama’s net worth has skyrocketed since leaving the White House. He received $400,000 for one 90-minute speech. Bill Clinton, of the famous cigar placing fame, is worth about $80 million. Bill and Hillary earned $240 million the last 15 years according to Forbes and poor little Chelsea has to live in a $10 million flat. Of course, by Gates, Buffet, Soros, and Oprah’s standards they are modest earners.

As much as they hate each other they are putting their personal differences aside and class solidarity first.  They want the American working class to cough up some money to help people that have suffered in the recent market driven disasters, but most importantly to push the idea that we are all in this together, there is no rich and poor, no haves and have nots, no capitalists and workers. We are all just Americans dammit.

I was in a burger place the other night and some of you might be aware, I am not shy; I do tend to talk to people. As I was ordering my fish sandwich (meat makes me too aggressive) I noticed a name tattooed on the young Latina’s arm.

“Is that your name?” I asked.
“No.” She replied, “It’s my little girl”

We talked a bit more, she was very friendly which is always good as we can learn about other people’s lives, what they’re thinking about the world, how it treats them.  It’s also a credit to working class people that we can work in the most oppressive conditions for low wages and still be polite and humane. She was married and told me her age, I think it was 24.

I said a few words about how difficult it is to survive, how one is never sure what might come up next. She lived in town and I commented on the state of the rents. A damn closet can cost $1000 a month here. The average two bedroom apartment is around $2000 or so.

Her response to the cost of accommodation was “Yes it’s a calamity.”  

I was a bit surprised at the use of that term calamity, I don’t hear it too often and she said it so matter-of-factly. I thought about it afterwards as I talked with the friend with me.  If you look up calamity you will find definitions like, “A state of deep distress or misery caused by major misfortune or loss.” You will also find “Catastrophe” “Misfortune”  “Tragedy”. Earning 400,000 for a 90-minute speech is not a calamity. Being in a family whose net worth is half a billion dollars is not a calamity---for them. There are millions of us here in the US who are facing calamity and homelessness daily, even when there are no hurricanes.

Housing is a tragedy in the US. Not because we can’t build decent housing, but like medical care, education or any other major social need housing is a business----that’s a calamity. There are daily tragedies like the mass shootings that are so common and indeed environmental and other such catastrophes caused by capitalism-----system calamities.  We call the people that legislators in the capitalist parties have build our housing “developers”, that’s a calamity too.

At the moment, the media is fairly silent on the conditions on the ground in Texas, Florida and Puerto Rico except to talk of how people stuck together and helped each other. This only goes so far as they don’t want people getting carried away and collectively, and in an organized way, directing the anger at such tragedies at the cause of them, the capitalist system and those whose policies make the tragedies inevitable. We pointed out some of the culprits in a previous commentary; the home builders in Texas who bribed politicians in order to ensure that no regulations were passed that hindered their projects and profits. This increased the savagery and destruction that hurricane Harvey wreaked in Texas and Louisiana.We even found pictures of them.

So the present and former presidents turn up at a concert not to point to these culprits, but to cover for them, to ensure we don't think about them as legislators and people whose policies are to blame. They can't as they're in with them aren't they and have to convince us we are all in this together. In calamities like those we are experiencing due to climate change and the lack of regulation of any kind, our collective humanity always arises and we help each other, we also tend to self organize and construct some form of public safety. This occurred in New Orleans in the aftermath of Katrina.

Another fear that has driven these nasty characters in the video above to stand together, is that the aftermath of these hurricanes are equally as destructive. The amount of pollution, sewage and chemicals that are released in to the air and water is staggering. This is especially the case in Texas where toxic chemicals were released in to water and air after chemical plants were damaged and shut down. The environmental devastation of the BP disaster in the gulf is also unknown and certainly not talked about.

All he nationalistic propaganda about “one America” from a bunch of millionaires is an attempt to soften the mood, head off the rage that can build up as the long term affects of these disasters are felt. Part of it is our fault. Passivity and blind trust are not virtues in these situations.

What hypocrites and liars they are when you think about it. Not only have they all participated in the attacks on our living standards, they have taken the lives of working class youth under the false claims that they are defending our freedoms and material conditions that these very people are undermining.  The child of the young worker I reference above will be a target for the military recruiter. Smiling Jimmy Carter used the Taft Hartley against the miners in 1978 and began the de-regulation that Reagan expanded. They are all war criminals. Bush is responsible for millions of dead and displaced persons and Obama, increased Bush’s drone wars and also aggressively supported and armed the Saudi’s in the slaughter of the people of Yemen. Bush the father is the same.

Remember the factory in Sudan that Clinton bombed to the ground claiming it was some sort of al Qaeda bomb factory? It turned out to be a major producer of medicines for the people in the area. Christopher Hitchens said of the bombing, "....what was the hurry? A hurry that was panicky enough for the president and his advisors to pick the wrong objective and then, stained with embarrassment and retraction, to refuse the open inquiry that could have settled the question in the first place? There is really only one possible answer to that question. Clinton needed to look "presidential" for a day."

And Clinton bombed and broke up Serbia.  I remember flying by prop plane from Vienna to Skopje in 1999 and seeing all the bridges on the Danube destroyed by US bombs. We don't get to vote on this stuff.

Joseph Stiglitz and Linda Blimes claimed that the cost of the Iraq War on the US at more than $3 trillion what they described as a “conservative” estimate and a 2013 study pointed out that U.S. medical and disability claims for veterans after a decade of war had risen to $134.7 billion from $33 billion two years earlier.”

So there is plenty of money available, we do not have to dig deeper, hand over more cash than we have already. A $20 an hour minimum wage is easily affordable it's allocation of money in society that's a problem not a lack of it. We have all paid dearly for the decisions these five made and make as presidents, all of us through financial sacrifice, and some of us through the loss of loved ones. Recognize this stuff for what it really is, propaganda.

We commented in an earlier post on this blog about what workers and our organizations could be doing as a response to these tragedies.  What is clear, or should be, is that the five people in the video are no friends of working class people. They have collectively driven the US working class backwards, and Trump will apply the whip with a vengeance. Do not be fooled by the Drone King Obama’s sharp wit and slick style, he is no fool and a consummate bourgeois politician.  He didn’t become head of the Harvard Law Review without being a trusted member of the team.

Their efforts to convince us that they are on our side; that we are all one as Americans in a classless, egalitarian state is insulting, surely most American workers don’t believe it. The consequence of believing it and tolerating it is a working class family, in full time jobs barely able to keep a roof over their heads.

We should be proud of the NFL players protesting today rather than have any reverence for the guys in this video. It’s time to put a stop to this charade.

Facts For Working People (FFWP): Conference Call. October 21st. 2017.

Migrant workers on the 4th day of their strike in a garment factory fighting for pension benefits in Shenzhen, Guangdong province, Dec. 13, 2014. Source
FFWP Conference call covered a number of issues. 

The crises of US imperialism, and imperialism in general is reflected on a number of fronts: Economic, political, military, and environmental.  We discussed how the world economy was still going ahead but at a slow speed. How a new recession, possibly even a slump would strike in the years ahead, with the plunging of stock markets, failures of banks, soaring unemployment, increasing attacks on wages and conditions. How when such a development took place in the future this would dramatically exacerbate the crises on all the other fronts. This was important to be kept in mind. US and world imperialism were already in crisis and this when the world economy was still growing. A new recession or slump would make all crises worse, would exacerbate all existing tensions, would further increase fragmentation. (See Michael Roberts’ The Global Debt Mountain)

The political crisis especially of US imperialism worsens by the day. Trump in the White House staggers from one blunder to the other. Weakening the institutions of US imperialism, undermining its influence abroad.  The more strategic sections of the US capitalist class want rid of him but they cannot see how to do this without further weakening their institutions and political parties especially the Republican Party. However it is possible that things will get so bad they may decide to get rid of him and ride out the weakening of their institutions. The decades when US capitalism was relatively politically stable with its two capitalist party monopoly is ending. New splits, new parties, new formations, new crises, new instability lies ahead. 

If the trade union leaders would lead and build a Labor Party this could fill the vacuum that is opening up. But they will not do so until they have no choice in the sense of their positions being threatened. The beginnings of serious tensions in the trade union bureaucracy are just beginning to be slightly apparent at the moment. No politicians of either capitalist party are being invited to the coming AFL-CIO conference in an effort to postpone conflict. Breaking from tradition by not inviting political figures from one of the two capitalist parties is not a shift to the left but a move to put off any debate and to try to maintain the present status quo. Leaders of some unions such as most of the building trades are with Trump while others especially the public sector unions are very opposed to Trump. But union members, whether they voted for trump or not, are very volatile politically, and the union leadership will go to great lengths to avoid any open debate. These tensions will only worsen and at some stage the trade union bureaucracy or a section of the trade union bureaucracy, will have to take some independent political action.  

The political crisis in the White House is spilling over into US imperialism’s military. Trumps insulting behavior when he called the widow of the soldier killed in Niger has blown up. He could not remember the soldier’s name and would not even say to the bereaved widow that “your husband’ has been killed. Just kept repeating “your guy”. Then he has his general Kelly come out and justify his remarks and insult the African American congresswoman with the whiff of racism in his words and this has made things even worse. This will reverberate back into the military where 40% are now either minorities or women. And of course it will also increase the knowledge that Trump is a serial sexual predator. This will not be good for morale in the military rank and file with its large proportion of minorities and women. The issues of why US imperialism has soldiers and some 800 military installations in over 140 countries will also increasingly come up. (See: America’s War-Fighting Footprint in Africa)

On the environmental front US imperialism gets further into trouble, gets the planet further into trouble. Puerto Rico is in a catastrophic crisis. The full effects of Harvey are still to be felt in Texas where where many toxins were spread in the floods. Then there have been the fires in California. Puerto Rico is being treated very differently from Texas. Trump goes and throws paper towels at people in Puerto Rico. Less people have electricity on the island today than yesterday. A fraction of the number of people has gone to Puerto Rico to get electricity going again as went to Texas. On top of this the affects of climate change increase throughout the planet. The recent huge storm in Ireland coming on top of Harvey, Irma, and Maria is an example. This further undermines Trump and his climate change deniers and will weaken them politically. .

There are a few things that help Trump cling on in the White House as well as the fear of the more strategic section of the capitalist class that bringing him down will damage their institutions. He is filling cabinet posts with the most backward elements that help the bottom line of the various industrial sectors by deregulating. And along with that the super rich want their tax cut. But things cannot go on as they are. At some stage there will be a break in the situation. 

The conference call discussed China where the so-called Communist Party is presently having its conference. The Chinese leader Xi stressed strengthening the state sector. It seems he is worried that the private sector, which includes over one third of the world’s billionaires, can get too much power and increasingly create instability.  In his opening speech he stressed again and again “safety” and “security.” This is in line with the regimes increasing clamping down on protest. But this will not stop opposition to the regime. In 1993 there were 8,700 what are described as “mass group incidents” that is demonstrations of one kind or another. In 2010 there was a huge increase to 180,000. The new and huge and relatively new Chinese working class will rise to its feet in the future. This will be an event of world significance. There was also more talk than at any other Party conference about the environment. On this issue also the regime fears serious opposition. 

There was a discussion on the conference call on the nature of the Chinese regime and economy That is now the worlds largest and most profitable auto market. It was raised was the economy any different from when the US economy had a large state sector in the past which served the private capitalist sector. It was also raised was it the case that the economy had gone some way towards a large capitalist sector but that was it the state sector that still not dominant. This issue was left for further discussion. It was agreed that whatever about the actual nature of the economy that China was imperialist as is shown by it expanding of its reach out into Africa, Central Asia, South East Asia and the South China Sea.  It was also raised that Xi and those at the top of the regime did not want events, either economic or political and especially in terms of class struggle to get out of their control. They were trying to control the Internet with its 100’s of millions of participants in China.  

There was a brief mention of North Korea and it was felt that it was unlikely that US imperialism would go to war against that regime. China has said that if North Korea starts a war it will stand aside but that if US imperialism starts a war it will not stand aside. This as well as the destruction that would result in the entire region not to mention the possibility of a nuclear conflict and its effects world wide would it was felt stop a war at least at this stage. But our conference call was cautious as there are times when accidental factors such as the moron in the White House can get out of control.

The Conference Call then discussed Syria. It was agreed that Comrades should oppose the regime. There was then some discussion about the various forces fighting the regime. It was agreed that that we should not support oppositions that were supported by US Imperialism, Russian imperialism, Iranian imperialism. One Comrade spoke of there being other organizations, which opposed the regime and were not supported by or collaborated with imperialism. It was agreed that more information should be sought and more discussion should be held on such groups. It was also raised that there are times with regard to crises within a nation state that the working class has been decimated or weakened to the point that it is unable to play any significant  role and that the situation will not be remedied to any degree without the intervention of the regional or international working class. It was also mentioned that given the record of the left in general where it had paid insufficient attention to the special oppression of women that any support for any group would have to consider the approach of any such group to women and gender oppression. 

It was raised that there will be many such conflicts as in Syria, There are many conflicts such as Syria as the old world order of the cold war and after the end of the cold war recedes into the past. And that more thought should be directed to what positions should be taken in such cases. It was pointed out that Lenin had written material on the repression of Islamic groups under Tsarism and these writings could be helpful. 

There was mention of the recent events related to the special oppression of women. How over the course of the conference calls it had been stressed that on every call we discuss events concerning the special oppression of women. Also related to this the idea of the whip of the counter-revolution. As the special oppression of women increases with the war especially of Trump and the Republican Party against women but also as the vicious behavior of such people as  the Hollywood capitalist Weinstein and other people in power become exposed then this is being responded to by greater struggles of women and others against this oppression. The size of the women's marches against Trump at the time of his inauguration was mentioned. It was also mentioned that in the past, insufficient attention had been paid by left forces to fight against the special oppression of women and this had to change. FFWP conference calls have made this a permanent topic for discussion on all FFWP conference calls.    

Finally there was a short discussion on the nature of the self styled revolutionary socialist groups. How FFWP saw itself as a working peoples' Think Tank which seeks to help build a revolutionary socialist current with a healthy internal culture. An essential part of this was looking at past work and past mistakes and this especially included looking at and openly explaining our own past mistakes. That unless people were prepared to openly and honestly admit to mistakes, including their own mistakes, it would be hard to see anything fruitful coming out of discussions with such groups or individuals..   

We appeal to all Comrades who agree on the need to be part of the organizing of a mass international movement of the working class to overthrow capitalism to contact us. We believe that an international organization of tens of millions will be needed to end US capitalism. We believe that an international organization of hundreds of millions will be needed to overthrow world capitalism and open up the road to the collective power and the collective brain of the working class building a new society. None of the present self styled revolutionary groups with their left sectarianism, their ultra leftism their at times opportunism and especially with their internal culture can bring together such forces. FFWP seeks be part of such mass international organizations and also to work with others to build within such forces an international revolutionary current with a healthy democratic internal culture, a culture that includes the right to, the inevitability of, in fact where different views exist, the desirability of, factions and factional rights so that issues can be clarified.  

Please contact FFWP at: if this approach appears reasonable. FFWP is a current, a Think Tank within which revolutionary socialist ideas and work can be discussed and which seeks to build a revolutionary current with a healthy democratic approach to clarifying ideas and acting against capitalism. 

Saturday, October 21, 2017

The global debt mountain: a Minsky moment or Carchedi crunch?

by Michael Roberts

During the current Chinese Communist party congress, Zhou Xiaochuan, governor of the People’s Bank of China, commented on the state of the Chinese economy.  “When there are too many pro-cyclical factors in an economy, cyclical fluctuations will be amplified…If we are too optimistic when things go smoothly, tensions build up, which could lead to a sharp correction, what we call a ‘Minsky Moment’. That’s what we should particularly defend against.” 

Here Zhou was referring to the idea of Hyman Minsky, the left Keynesian economist of the 1980s, who once put it: “Stability leads to instability. The more stable things become and the longer things are stable, the more unstable they will be when the crisis hits.”  China’s central banker was referring to the huge rise in debt in China, particularly in the corporate sector.  As a follower of Keynesian Minsky, he thinks that too much debt will cause a financial crash and an economic slump.

Now readers of this blog will know that I do not consider a Minsky moment as the ultimate or main cause of crises – and that includes the global financial crash of 2008 that was followed by the Great Recession, which many have argued was a Minsky moment.

Indeed, as G Carchedi has shown in a new paper recently presented to the Capital.150 conference in London, when both financial profits and profits in the productive sector start to fall, an economic slump ensues.  That’s the evidence of post-war slumps in the US.  But a financial crisis on its own (falling financial profits) does not lead to a slump if productive sector profits are still rising.

Nevertheless, a financial sector crash in some form (stock market, banks, or property) is usually the trigger for crises, if not the underlying cause.  So the level of debt and the ability to service it and meet obligations in the circuit of credit does matter.

That brings me to the evidence of the latest IMF report on Global Financial Stability. It makes sober reasoning.

The world economy has showed signs of a mild recovery in the last year, led by an ever-rising value of financial assets, with new stock price highs.  President Trump plans to cut corporate taxes in the US; the Eurozone economies are moving out of slump conditions, Japan is also making a modest upturn and China is still motoring on.  So all seems well, comparatively at least.  The Long Depression may be over.

However, the IMF report discerns some serious frailties in this rose-tinted view of the world economy.  The huge expansion of credit, fuelled by major central banks ‘printing’ money, has led to a financial asset bubble that could burst within the next few years, derailing the global recovery.  As the IMF puts it: “Investors’ concern about debt sustainability could eventually materialize and prompt a reappraisal of risks. In such a downside scenario, a shock to individual credit and financial markets …..could stall and reverse the normalization of monetary policies and put growth at risk.”

What first concerns the IMF economists is that the financial boom has led to even greater concentration of financial assets in just a few ‘systemic banks’.  Just 30 banks hold more than $47 trillion in assets and more than one-third of the total assets and loans of thousands of banks globally. And they comprise 70 percent or more of international credit markets.  The global credit crunch and financial crash was the worst ever because toxic debt was concentrated in just a few top banks.  Now ten years later, the concentration is even greater.

Then there is the huge bubble that central banks have created over the last ten years through their ‘unconventional’ monetary policies (quantitative easing, negative interest rates and huge purchases of financial assets like government and corporate bonds and even corporate shares).  The major central banks increased their holdings of government securities to 37 percent of GDP, up from 10 percent before the global financial crisis.  About $260 billion in portfolio inflows into emerging economies since 2010 can be attributed to the push of unconventional policies by the Federal Reserve alone.  Interest rates have fallen and the banks and other institutions have been desperately looking for higher return on their assets by investing globally in stocks, bonds, property and even bitcoins.
But now the central banks are ending their purchase programmes and trying to raise interest rates.

This poses a risk to the world economy, fuelled on cheap credit up to now.  As the IMF puts it: “Too quick an adjustment could cause unwanted turbulence in financial markets and international spillovers … Managing the gradual normalization of monetary policies presents a delicate balancing act. The pace of normalization cannot be too fast or it will remove needed support for sustained recovery”.  The IMF reckons portfolio flows to the emerging economies will fall by $35bn a year and “a rapid increase in investor risk aversion would have a more severe impact on portfolio inflows and prove more challenging, particularly for countries with greater dependence on external financing.”
What worries the IMF is that this this borrowing has been accompanied by an underlying deterioration in debt burdens.  So “Low-income countries would be most at risk if adverse external conditions coincided with spikes in their external refinancing needs.”

But it is what might happen in the advanced capital economies on debt that is more dangerous, in my view.  As the IMF puts it: “Low yields, compressed spreads, abundant financing, and the relatively high cost of equity capital have encouraged a build-up of financial balance sheet leverage as corporations have bought back their equity and raised debt levels.”  Many companies with poor profitability have been able to borrow at cheap rates.  As a result, the estimated default risk for high-yield and emerging market bonds has remained elevated.

The IMF points out that debt in the nonfinancial sector (households, corporations and governments) has increased significantly since 2006 in many G20 economies.  So far from the global credit crunch and financial crash leading to a reduction in debt (or fictitious capital as Marx called it), easy financing conditions have led to even more borrowing by households and companies, while government debt has risen to fund the previous burst bubble.

The IMF comments “Private sector debt service burdens have increased in several major economies as leverage has risen, despite declining borrowing costs. Debt servicing pressure could mount further if leverage continues to grow and could lead to greater credit risk in the financial system.”

Among G20 economies, total nonfinancial sector debt has risen to more than $135 trillion, or about 235 percent of aggregate GDP.

In G20 advanced economies, the debt-to-GDP ratio has grown steadily over the past decade and now amounts to more than 260 percent of GDP. In G20 emerging market economies, leverage growth has accelerated in recent years. This was driven largely by a huge increase in Chinese debt since 2007, though debt-to-GDP levels also increased in other G20 emerging market economies.

Overall, about 80 percent of the $60 trillion increase in G20 nonfinancial sector debt since 2006 has been in the sovereign and nonfinancial corporate sectors. Much of this increase has been in China (largely in nonfinancial companies) and the United States (mostly from the rise in general government debt). Each country accounts for about one-third of the G20’s increase. Average debt-to-GDP ratios across G20 economies have increased in all three parts of the nonfinancial sector.

The IMF comments: “While debt accumulation is not necessarily a problem, one lesson from the global financial crisis is that excessive debt that creates debt servicing problems can lead to financial strains. Another lesson is that gross liabilities matter. In a period of stress, it is unlikely that the whole stock of financial assets can be sold at current market values— and some assets may be unsellable in illiquid conditions.”

And even though there some large corporations that are flush with cash, the IMF warns: “Although cash holdings may be netted from gross debt at an individual company—because that firm has the option to pay back debt from its stock of cash—it could be misleading”.  This is because the distribution of debt and cash holdings differs between companies and those with higher debt also tend to have lower cash holdings and vice versa.

So “if there are adverse shocks, a feedback loop could develop, which would tighten financial conditions and increase the probability of default, as happened during the global financial crisis.”
Although lower interest rates have helped lower sovereign borrowing costs, in most of the G20 economies where companies and households increased leverage, nonfinancial private sector debt service ratios also increased.  And there are now several economies where debt service ratios for the private nonfinancial sectors are higher than average and where debt levels are also high.  Moreover, a build-up in leverage associated with a run-up in house price valuations can develop to a point that they create strains in the nonfinancial sector that, in the event of a sharp fall in asset prices, can spill over into the wider economy.

The IMF sums up the risk.  “A continuing build-up in debt loads and overstretched asset valuations could have global economic repercussions. … a repricing of risks could lead to a rise in credit spreads and a fall in capital market and housing prices, derailing the economic recovery and undermining financial stability.”

Yes, banks are in better shape than in 2007, but they are still at risk.  Yes, central banks are ready to reduce interest rates if necessary, but as they are near zero anyway, there is little “scope for monetary stimulus. Indeed, monetary policy normalization would be stalled in its tracks and reversed in some cases.”

The IMF poses a nasty scenario for the world economy in 2020.  The current ‘boom’ phase can carry on.  Equity and housing prices continue to climb in overheated markets.  This leads to investors to drift beyond their traditional risk limits as the search for yield intensifies despite increases in policy rates by central banks.

Then there is a Minsky moment.  There is a bust, with declines of up to 15 and 9 percent in stock market and house prices, respectively, starting at the beginning of 2020.  Interest rates rise and debt servicing pressures are revealed as high debt-to-income ratios make borrowers more vulnerable to shocks. “Underlying vulnerabilities are exposed and the global recovery is interrupted.”

The IMF estimates that the global economy could have a slump equivalent to about one-third as severe as the global financial crisis of 2008-9 with global output falling by 1.7 percent from 2020 to 2022, relative to trend growth.  Capital flows to emerging economies will plunge by about $65 billion in one year.

Of course, this is not the IMF’s ‘base case’; it is only a risk.  But it is a risk that has increasing validity as stock and bond markets rocket, driven by cheap money and speculation.  If we follow the Carchedi thesis, the driver of the bust would be when profits in the productive sectors of the economy fall.  If they were to turn down along with financial profits, that would make it difficult for many companies to service the burgeoning debts, especially if central banks were pushing up interest rates at the same time.  Any such downturn would hit emerging economies severely as capital flows dry up.  The Carchedi crunch briefly appeared in the US in early 2016, but recovered after.

Zhou is probably wrong about China having a Minsky moment, but the advanced capitalist economies may have a Carchedi crunch in 2020, if the IMF report is on the button.

Friday, October 20, 2017

The Russian Revolution 100 Years Later.

2017 marks the 100th anniversary of the Russian Revolution, the first and only time the working class took political power and control of society. Like working class history in the US, this revolution under the leadership of the Bolshevik Party  has been maligned and demonized by the capitalist media. This has been made easier as the revolution, isolated and occurring in a non developed country as vast as Russia, was thrown back and the workers lost political power to the bureaucratic monstrosity of Stalinism. The collapse of the Stalinist bureaucracy has pushed those early gains back further as capitalism has returned to Russia under the leadership of the former KGB thug, Vladimir Putin. History took a step forward with the 1917 revolution. It took half a step back as the working class lost power to the Stalinist bureaucracy. It has now taken a full step back with the restoration of capitalism.  The following is an excellent article describing these processes. We encourage all thinking workers and youth to read this account.

International Women's Day Protest March 1917

by Roger Silverman

7th November 2017 marks the centenary of an event whose impact still today reverberates throughout the world. The Russian revolution remains a constant spectre at the feast of the rich, its shadow falling across all subsequent history. Since its lessons lie buried in a century of sludge by all those determined to malign its meaning, it is the duty of socialists to unearth them and bring them back to light.

There will be no shortage of articles and speeches commemorating it: some dismissing it as a wicked conspiratorial putsch, some ascribing to it all the subsequent horrors of the twentieth century, others still painting gaudy anniversary chocolate-box extravaganzas in its honour. What matters is that this was one of those rare moments when ordinary people took control of their own lives. People humbled over generations to eke out a miserable anonymous existence of hardship and submission suddenly rose up and stormed the stage, determined for once to grasp hold of their destiny and shape history to their needs.

A paradox

Russia entered the twentieth century as a vast empire spanning one-sixth of the earth's surface - a land of savage despotism ruled by the Tsars. Its most notorious contributions to the world's vocabulary had been words like knout (the instrument of torture by which prisoners were whipped, often to death) and pogrom (the frenzied mob massacre of a terrorised minority community). By 1917, Russia was further crippled by years of slaughter on the eastern front of the first world war, in which some three million Russians perished.

Organised into democratic councils of workers', soldiers' and peasants' deputies elected at every unit of labour with direct right of recall, working people briefly held the power in their own hands. Tsars and landowners, racists and bureaucrats, generals and executioners, capitalists and renegades were swept into oblivion. Production was for the first time in history to be rationally planned rather than subordinated to private profiteering and the blind forces of the market.

And yet the October revolution (so named in accordance with the then current calendar) remains a gigantic paradox. It was greeted worldwide as the first step towards a new era in history: a socialist civilisation. And yet the regime which was soon to emerge from it became one of history's most bloodthirsty tyrannies. Its ideals were soon to be perverted into a hideous mockery of socialism. Millions of workers were to perish in the torture chambers and slave camps of Stalin's police state. And in 1991 the crumbling relic of the "Soviet Union" finally collapsed in ruins.

Apologists for capitalism are fond of crowing that Russia's current economic devastation is an indictment of decades of "socialism". The truth is exactly the opposite. On the contrary: it was the downfall of the prevailing system of state ownership, by then rusting and creaking under the deadweight of bureaucratic mismanagement, that saw Russia transformed into a wasteland ravaged by adventurers and cowboy gangsters, largely former bureaucrats. It was with the restoration of a raw and primitive capitalism that Russia was brought to the brink of catastrophe, devastated by what was probably the sharpest drop in production and living standards that any country has ever endured. Real gross domestic product fell by more than 40%, bringing hyperinflation, lawlessness, destitution and despair. If Russia's economy later gained a very marginal and temporary respite, it was only due to a short-lived boost in world oil prices.

What a contrast with the formative years of the planned economy! Even in the thieving hands of a greedy and wasteful parasitic elite, the very survival over three quarters of a century of the nationalised economy - not to mention its later extension to swathes of Eastern Europe, Asia and beyond - fatally belies the capitalists' triumphalist sneers.

It is worth remembering that in earlier days, for all its devastating burdens, the planned economy had boasted miracles of economic transformation. To take a measure of what was then achieved, in the fifty years starting from 1913 (the highest point of the Russian pre-revolutionary economy), Russia's share of total world industrial output had soared from 3% to 20%, and total industrial output had risen more than 52 times over. (The corresponding figure for the USA was less than six times.) In the same period, industrial productivity of labour had risen by 1,310%, compared to 332% in the USA, and steel production from 4.3 million tons in 1928 (at the start of the first Five Year Plan) to 100 million tons. Life expectancy had more than doubled and child mortality dropped nine times. Soviet Russia in its heyday produced more scientists, technicians and engineers every year than the rest of the world put together.

These spectacular achievements have no parallel. They are even more startling than they seem, in that in this same period Russia had endured two world wars in which up to 25 million lives were lost, one civil war, one defensive war against 21 armies of foreign intervention, two devastating famines, the paralysing convulsions of the Stalinist purges and the constant deadweight of heavy-handed dictatorship. Steady growth had been confined to the period between the start of the first Five Year Plan in 1928 and the beginning of the Stalinist terror in 1937, followed by the outbreak of war in 1941, and then, after post-war reconstruction, from 1950 onwards - hardly a quarter of a century in all. And all this had been achieved in the teeth of Russia's terrible handicaps - a heritage of backwardness and illiteracy, a hostile capitalist encirclement and a vast murderous parasitic bureaucracy clinging on to its back.

The weakest link

It was at its weakest link that the chain of capitalism had first snapped. Russia in 1917 was a semi-colony. For every hundred square kilometres of land, there were only 0.4 kilometres of railway track. 80% of the population scratched a bare existence out of their tiny strips of land, using the most primitive tools and methods. Agriculture was fragmented into nearly 24 million smallholdings. Over 70% of Russian subjects were totally illiterate, and what reactionary priest-ridden education there was focused only on rearing a new generation of bureaucrats within the elite. Heavy industry was dependent on foreign finance capital; French, British, Belgian and other Western investors owned shares amounting to 90% of Russia's mines, 50% of her chemical industry, over 40% of her engineering plant, and 42% of her banking stock.

Russia had experienced no bourgeois revolution clearing away feudal restrictions, as in the West. With its vast under-populated territory overrun throughout the centuries by nomadic hordes, Russia had a very weak, sluggish economic development. Capitalism had been too weak to achieve political power through the peasant revolt of the eighteenth century or the abortive coup d'etat of 1825, and had arrived on the scene too late to hope to compete with the modern Western monopolies on the world market or pursue an independent historic role. It was bound hand and foot to the Tsarist autocracy at home and the big financiers abroad. A belated spurt of development only came following the emancipation of the serfs in 1861, whereby the absolutist monarchy began to balance more heavily on liberal landowners, nascent capitalists and foreign bankers, releasing reserves of manpower for industry. Thus, capitalism in Russia did not evolve in such a way as to rest securely on a wide stratum of intermediate small business entrepreneurs, stable capitalist farmers, etc.; lacking any solid social foundation, it hung precariously suspended over society by world imperialism on the strings of the Holy Tsar.

Thriving on substantial foreign investment, industrial enterprises now sprang up using the most sophisticated machinery and production techniques. Russia's belated growth prepared the rapid development of a concentrated industrial working class, and with it a welcome new culture of solidarity and militancy. In 1914, while 17.8% of American industrial workers were employed in factories with over 1,000 workers, the corresponding figure in Russia was as high as 41.4%, and higher still in Moscow and Petrograd. Young peasants streaming off the land found themselves suddenly plunged into great mechanical sweatshops of the most intensive exploitation, and they came fresh to the realities of industrial class struggle and militant organisation more rapidly than their counterparts in the West, with their gradual evolution through intermediate stages of handicraft and manufacture.

The early Russian socialists had been "populists" who believed that the Russian peasantry could jump straight into a peculiarly Russian rural form of "communism". Paralysed by the inertia of the masses, they sought short cuts to utopia through evangelism and terrorism alternately. First they descended on the villages preaching revolution, only to find themselves indignantly turned over to the police. Then, after twelve years' efforts, they managed to assassinate a Tsar; the ruling caste having had no difficulty finding a new one, the outcome was a wave of executions and renewed repression.
Workers Meeting at the Putilov Factory 1917

It was the stirrings of the Petrograd workers in the stormy strikes of the 1890s that first established Marxism in Russia. Soon came the revolution of 1905 - the biggest upheaval in Europe since the Paris Commune of 1871. Independently of any theorist or "agitator", the workers spontaneously formed the first soviets (democratically elected workers' councils). In face of the workers' radicalisation, the capitalist politicians hastily abandoned their tentative liberal demands for a measure of control over the monarchy. It was becoming clear that any effective challenge to the tottering regime could only come from the workers.

Prior to the outbreak of the revolution, the Russian Social-Democratic Labour Party (the Socialist International's Russian affiliate) found itself split over the nature and goals of the coming revolution. Confining its outlook within the boundaries of Russia, the "moderate" Menshevik wing of the RSDLP could envisage no bolder aspiration than the installation of a liberal-democratic government which would then mechanically retread the path of Western capitalism. According to their sterile formula, until the entire historic mission of capitalism had been fulfilled and the economy had attained Western levels the role of the workers' parties would be to serve indefinitely as a loyal opposition.

The Bolshevik wing considered this theory narrow and pedantic. They placed no reliance on a weak capitalist class inextricably entangled with foreign imperialism and hopelessly compromised by its collaboration with the despotic Tsarist state machine. Placing the role of the Russian revolution firmly within internationalist horizons, they predicted that the victory of a democratic agrarian revolution in Russia led by the workers and peasants would act as an explosive catalyst precipitating socialist revolution throughout Europe.

Along with the Bolsheviks, Leon Trotsky (at that time independent of both wings) also envisaged the coming revolution in Russia as the first breakthrough of the workers of the world into the future, while also arguing that the Russian workers, supported by millions of poor peasants and allied to the workers of the metropolitan countries, could be the first to overthrow capitalism, in alliance with the workers of Europe, leading the revolution inexorably onward to socialist measures. While a capitalist Russia could only remain a semi-colony of Western imperialism, socialism could only be built hand in hand with the workers of the advanced countries.

The events of 1917 quickly settled the argument. In February, against a background of famine and starvation, riots on the bread lines, a bloodbath on the battlefields, scandal in the palace, mutinies by soldiers and even by the elite Cossack forces… it took just eight brisk days of street protests, led above all by the defiant women of Petrograd, to bring the 300-year-old Romanov dynasty crashing to its downfall.

A coup?

Five times in the course of the next nine months the people poured on to the streets in defence of their gains. In April, demonstrations led by the Bolsheviks forced the direct agents of capitalism out of the "Provisional Government", and by their simple slogans and skilful propaganda the Bolsheviks exposed the impotence of the hand-wringing apologists for compromise with the liberals. Far from the stock caricature of the Bolsheviks as irresponsible rabble-rousers, when in July the workers of Petrograd and the soldiers of the local garrison took to the streets again, impatient for a quick resolution of the impasse, it was the Bolsheviks who had to urge restraint until the provinces had caught up with them. Then, in August Petrograd was threatened with a bloody defeat at the hands of the advancing troops of the fascist General Kornilov. The Kerensky Government found itself helpless, paralysed by its subservience to a ruling clique which feared the Bolsheviks a thousand times worse than the relics of Tsardom, and it was the Bolsheviks who organised the workers and soldiers of Petrograd in a united front with Kerensky to repel Kornilov. Months of patient explanation against a dramatic background of events won an overwhelming majority to the side of the Bolsheviks, and the insurrection of 25th October (7th November in the new calendar) in the name of the assembling congress of Soviets met with negligible resistance.

The lazy hackneyed argument of most pro-capitalist historians is that the October revolution was a conspiracy organised behind the scenes by a secretive Bolshevik cabal: a "coup".

The truth is that at the time of the collapse of the Tsarist regime the Bolsheviks had numbered no more than 8,000 throughout the length and breadth of Russia, with its population of more than 150 million. Once the Tsarist regime had fallen, the so-called "Provisional Government" which had stepped uninvited into the vacuum had no following in the Soviets of Workers, Soldiers and Peasants which had sprung up overnight as a true parliament of the masses. Caught unawares and overcome with confusion, the local Bolshevik leaders on the spot (among them Stalin) prepared to join forces with the Mensheviks. Lenin returned to Russia in April to find the Bolshevik party thrown into confusion by the unexpected fall of Tsarism and the assumption of power by liberal politicians. Greeted on his return with bouquets and flowery speeches by Menshevik leaders, Lenin spoke over their heads to the crowds, welcoming the "advance guard of the world proletarian army", condemning the capitalist government and calling for the victory of Soviet power. On this basis, Trotsky's group promptly joined the Bolsheviks.

Within five months their membership had grown more than twenty-fold, to 177,000. And by September, on the eve of the revolution, in the words of Sukhanov (a Menshevik, by the way, and a bitter enemy of Bolshevism): "for the masses, [the Bolsheviks] had become their own people… They had become the sole hope… The mass lived and breathed together with the Bolsheviks." 

The overthrow of the capitalist government had been a simple matter of hours, with practically no fighting in the capital and only a short burst of gunfire in Moscow. The Russian ruling class had forfeited all authority, and the "socialist" stooges in the "Provisional Government", behind whom they had been forced to shelter after April, had lost all trace of credibility. The people were clamouring for "peace, bread and land". Kerensky had led a million more to the slaughter on the front, halved the bread ration, and turned his guns on to peasants spontaneously taking over the great landed estates. No one respected theory more than Lenin, but he summed up very simply what had happened: "The masses learn more in a day of social revolution than in decades of socialist theory…An ounce of experience is worth a ton of theory."

There is another variant of the same argument: was the October revolution perhaps a mistake? As if we could construct our own historical context…

The insurrection was conceived by an entire generation of militant Russian workers as merely a preliminary step towards a European-wide socialist revolution. If they had let slip the opportunity, the alternative could only have been a bloody defeat at the hands of General Kornilov, the contemporary Franco or a Pinochet, from which it would have taken one or two generations to recover. It was taken for granted that unless it were to spread westwards, the Russian revolution would inevitably be crushed. No one at the time could have conceived of the possibility that the Soviet state could survive in isolation for decades, even as a grotesquely mangled bureaucratically deformed monstrosity.

Driven beyond breaking-point by slaughter at the front and hunger at home, the Russian workers, soldiers and peasants had overthrown their oppressors. If they had foreseen the tribulations ahead of them in 1917, would they have launched their revolution? Who can say? History had not granted them the luxury of contemplation. They were impelled by the immediate duress of slaughter at the front and hunger at home. It was not their revolution but its isolation in conditions of virtual barbarism - the failure of the revolution elsewhere, not their victory at home - that doomed them to the privations ahead.

In the hour of danger that was approaching, with the brutal intervention of no less than twenty-one armies of foreign capitalism, it was the active support of working people throughout Europe that was the crucial factor in saving the revolution from defeat.


Power was at last concentrated in the hands of democratically elected representatives of the urban workers and of soldiers recruited from the peasantry. But for how long could they hold it?
It was not at all fanciful for the Russian workers to rely on their counterparts throughout Europe to come to their aid. It was an absolutely reasonable, practical and almost commonplace assumption that had led them to place their struggle firmly in the context of a Europe-wide revolution. After all, as late as in November 1912, meeting at an Extraordinary International Socialist Congress at Basel, the Socialist International – not a fringe sect but the established voice of millions of organised workers throughout Europe and beyond – had unanimously warned the ruling classes of Europe:

Let the governments remember that… they cannot unleash a war without danger to themselves. Let them remember that the Franco-German War was followed by the revolutionary outbreak of the Commune, that the Russo-Japanese War set into motion the revolutionary energies of the peoples of the Russian Empire, that the competition in military and naval armaments gave the class conflicts in England and on the Continent an unheard-of sharpness, and unleashed an enormous wave of strikes. It would be insanity for the governments not to realize that the very idea of the monstrosity of a world war would inevitably call forth the indignation and the revolt of the working class. The proletarians consider it a crime to fire at each other for the profits of the capitalists, the ambitions of dynasties, or the greater glory of secret diplomatic treaties.
Armed German Workers 1918

And in actual fact, within months of their own uprising, revolution really was raging throughout Germany, Austria, Hungary, Poland, Italy, France and elsewhere. As the British prime minister Lloyd George wrote in a confidential memorandum: "The whole of Europe is filled with the spirit of revolution." The royal dynasties of Europe were rudely dethroned, as the Hohenzollerns and Habsburgs followed the Romanovs into oblivion. In Britain, growing militancy was displayed in the general strike on the Clyde, the great mutinies among the British forces in France, the Triple Alliance of trade unions, the adoption by the young Labour Party of a socialist programme (the famous Clause Four which was to define the party’s socialist aspirations for the next eighty years) and the mass Councils of Action which sprang up expressly to defend the Russian revolution and impede the intervention; councils which Lenin called "Soviets, in essence if not in name".

The mass of participants in the Russian revolution understood that they were part of an international tidal wave. On the very day of the October revolution, the resolution of the Petrograd Soviet affirmed its conviction that “the proletariat of the countries of Western Europe will aid us in conducting the cause of socialism to a real and lasting victory”. In his classic eye-witness account, the American journalist John Reed recorded the common thoughts of working-class Petrograd insurgents on the streets: “Now there was all great Russia to win – and then the world!

The historic proclamation made the next day to the Congress of Soviets ended with an explicit call to the workers of Britain, France and Germany to “help us to bring to a successful conclusion… the cause of the liberation of the exploited working masses from all slavery and exploitation”. Lenin addressed the delegates with the hope that “revolution will soon break out in all the belligerent countries”, and Trotsky warned that “if Europe continues to be ruled by the imperialist bourgeoisie, revolutionary Russia will inevitably be lost… Either the Russian revolution will create a revolutionary moment in Europe, or the European powers will destroy the Russian revolution.” Reed reports that “they greeted him with an immense crusading acclaim”.

He gives ample evidence of the extent to which these internationalist ideas had percolated through to the working population. He quotes a Red Guard who “plied me with questions about America… Are the American workers ready to throw over the capitalists?” He also quotes a soldier fresh from the front: “We will hold the fort with all our strength until the peoples of the world arise”, who then addresses Reed directly: “Tell the American workers to rise and fight for the social revolution!

Reed continued:

Something was kindled in these men. One spoke of ‘the coming world revolution, of which we are the advance guard’; another of ‘the new age of brotherhood, when all the peoples will become one great family’.

Even the peasants – illiterate, superstitious, steeped for centuries in veneration of Tsarism and Russian orthodoxy – became inspired. Their heroine Maria Spiridonova addressed their congress days after the October revolution:
The present movement is international, and that is why it is invincible. There is no force in the world which can put out the fire of the revolution. The old world crumbles down, the new world begins.

The Bolsheviks knew that ultimately their only strength lay in the common class interest of workers everywhere. They granted autonomy and the rights of secession to all the nations of the former Great Russian Empire. They chose to suffer the humiliating terms of the Brest-Litovsk peace treaty with Germany, ceding large areas of territory and provoking crisis within the party and a government split with their Left SR allies, rather than break the faith of the people and allow them to drift into the clutches of the White terror. They made open appeals for peace, renounced all claim to booty and annexations and published the secret treaties, to expose to the workers the real interests of the capitalist governments. Their supreme task was the foundation in 1919 of the Communist International, the world party of socialist revolution.

No one reading Lenin's writings and speeches at the time could doubt the spirit of international solidarity pulsing through his veins and embodied in his every word. He emphasised that "without aid from the international world revolution, a victory of the proletarian revolution is impossible…We did our utmost to preserve the Soviet system under any circumstances and at all costs, because we knew that we are working not only for ourselves, but also for the international revolution." In March 1918, he wrote that there could be "no hope of the ultimate victory of our revolution if it were to remain alone… If the German revolution does not come, we are doomed."

He was even prepared to sacrifice the accomplished victory in backward Russia if that was the price to be paid for a successful revolution in industrial Germany. In an emergency debate in 1918 over whether or not to seek a peace treaty with Germany, Lenin had even said:

If the German movement is capable of developing at once in the event of peace negotiations… we ought to sacrifice ourselves, since the German revolution will be far more powerful than ours… It is not open to the slightest doubt that the final victory of our revolution if it were to remain alone, if there were no revolutionary movements in other countries, would be hopeless… Our salvation from all these difficulties… is an all-European revolution.

Civil war

Just as the Russian workers, soldiers and peasants understood that their revolution was doomed without international support, so too the world’s capitalists understood that the October revolution constituted a mortal threat to their own survival. Suddenly the rival powers that had spilt the blood of millions for the previous four years in the scramble for markets joined together in combined attack on their common enemy. Early in 1918, British naval forces landed in Murmansk on the flimsy pretext of "helping to defend the gains of freedom won by the revolution against the iron hand of Germany." Within days they were in fact marching South on Petrograd, disarming the workers and shooting local Bolsheviks. In April the Japanese landed at Vladivostok, and an "Omsk All Russian Government" was set up - an alliance of Cadets, Mensheviks and SRs which, having no forces to rely upon other than Tsarist officers, was shattered after two months by a coup installing Admiral Kolchak as dictator. Meanwhile, Germany occupied the Ukraine in collusion with White Guard Generals Krasnov and Wrangel. While the Allies screamed that Lenin and Trotsky were "German agents", Germany countered that "in the Bolshevist movement…the hand of England is seen. By these movements England has gained much, since owing to Bolshevik phrases and money the strike movement was called forth in the Central Empire." The police mentality sees in social clashes only the malevolent plots of conspirators. Every major capitalist power, and many minor ones too, joined in the rush to smash the revolution. It was officially admitted, for instance, that "the North Western (Baltic) Government was organised by General Marsh in 45 minutes' time."

Soon the occupying forces had replaced their initial claims with the hackneyed pretext that they were assisting the "vast portions of the population struggling against Bolshevik tyranny." Respectable British diplomats and officers on the spot, however, more sensitive to the mood of their subordinates, revealed the true situation. Colonel Robins of the British Embassy in Moscow telegraphed home in March 1918: "Know of no organised opposition to Soviet Government." Kerensky's revolt had been crushed in hours and in April the Don Cossacks mutinied, murdering the hated General Kornilov and driving their Hetman (Chieftain) Kaledin to suicide. Colonel Robins wrote: "Death Kornilov verified, this final blow organised internal force against Soviet Government." The British secret agent Bruce Lockhart admitted: "I had little faith in the strength of the anti-Bolshevik Russian forces…The one aim of every Russian bourgeois - and 99% of the so-called 'loyal' Russians were bourgeois - was to secure the intervention of British troops (and failing British, of German troops) to establish order in Russia, suppress Bolshevism and restore to the bourgeois his property." Colonel Sherwood-Kelly of the Siberian forces said, "I formed the opinion that the puppet government set up by us in Archangel rested on no basis of public confidence and support, and would fall to pieces the moment the protection of British bayonets was withdrawn." General Gough recognised that "the Russians are determined to prevent the return to power of the old official classes, and if forced to a choice, which is what is actually happening at the moment, they prefer the Bolshevik Government." Count Kokutsev, for the Whites, put it even more delicately: "Without intervention, we cannot get through, for, while the moderate element exists, it is not concentrated…" Meanwhile, the counter-revolution could hardly offer the people of Russia a very alluring programme programme; in the words of Count Kidovstev: "To start with, it is clear that you must have a military dictatorship, and afterwards that might be combined with a business element…"

The unspeakable atrocities of White Guards Denikin, Kolchak, Yudenich, Wrangel, etc., reflected the panic of a doomed elite. Wrangel boasted that, after shooting one red prisoner in ten, he would give the others the chance to prove their "patriotism" and "atone for their sins" in battle. Thus, most White soldiers were actually press-ganged Red prisoners. What crushed the White generals was not superior force of arms, but mass desertion, mutinies and constant risings in occupied areas (in Archangel, Ukraine, Kuban and elsewhere). The Red Army grew to become a militia of five million workers and peasants.

However, the Bolsheviks understood that their ultimate strength lay in the power of workers' solidarity. The Socialist International had to its eternal shame betrayed its ringing call in 1912 for a European-wide general strike in the event of war. On the contrary: the members of its constituent parties found themselves instead in army uniforms, shooting at one another across the battlefields. Following the collapse of the international at its moment of greatest need, the supreme task was the urgent foundation of a new international: a world party of socialist revolution.

The revolutionary government granted autonomy and the right of self-determination, up to and including secession, to all the nations of the former Great Russian Empire. They made open appeals for peace, renounced all claim to booty and annexations and by publishing the Tsarist regime's secret treaties exposed the real interests of the capitalist governments.

Once the intervention had begun, they greeted the soldiers of the invading armies - working-class conscripts exhausted by years of war - with leaflets published in all their languages, explaining that they had been sent by their bosses to crush a workers' republic, reporting news of the revolution raging throughout Europe and appealing for active support. This had an immediate effect. Russia was starved of arms. At one point, only a small area surrounding Moscow and extending barely to Petrograd had been in the hands of the Red Army. But mutinies broke out in the British, German, Czechoslovak and other armies, and in the French fleet stationed off Odessa.
US Troops in Siberia 1917

In Britain, the main contributor to the intervention, General Golovin reported on his negotiations with Winston Churchill in May 1919: "The question of giving armed support was for him the most difficult one; the reason for this was the opposition of the British working class to armed intervention." The Trade Union Congress condemned the Siberian occupation in September 1919 - and Siberia was evacuated within days. In May 1920 workers on London's East India Docks refused to load the "Jolly George" ship with hidden cachements of arms for Poland. Mass demonstrations were held throughout the country, and a joint meeting of the TUC, the Labour Party NEC and the Parliamentary Labour Party threatened a general strike unless the intervention was called off. The intervention stopped most abruptly, and the Red Army had no difficulty in clearing up the native Tsarist relics within a few weeks. At indescribable cost, for the moment the revolution survived. The capitalist chain around the globe had been broken; the world revolution had begun.

Retreat and Reaction

It was at its weakest link that the imperialist chain had snapped. The most revolutionary working class in the world had taken power earliest in a country of age-old backwardness, with little industry, low productivity, long hours, mass illiteracy and a per capita income about one tenth of that of the USA. Less than 10% of the population were wage earners, and a far smaller proportion of heavy industrial workers.

Three years of savage civil war had aggravated conditions still further. In 1921 industrial production was down to one-ninth of the 1913 figure, and agricultural produce had slipped below the pre-1900 level. Seven million homeless waifs roamed the country, the people were starving and the peasants, thirsting for private land and fair prices, were becoming restive once the immediate danger of Tsarist restoration had been removed. The country had been forced to the stark emergency restrictions of War Communism - "Communism in a besieged fortress", as Trotsky described it. Grain requisitioning at bayonet point, famine which brought in its wake cases even of cannibalism, malaria, over-hasty nationalisation, payment in kind, militarisation of labour, and the scarcity of finance, technical expertise and spare parts - this was the terrible price paid to save the Soviet republic. Their country was already steeped in age-old backwardness, with only pockets of industry, low productivity, long hours, mass illiteracy and a per-capita income about one tenth of that of the USA; but by the time they emerged from three years of civil war and foreign armed intervention, Russia was plagued with mass starvation, deadly epidemics, a desperate scarcity of finance, technical expertise and spare parts. Years of civil war and unremitting hardship had sapped the energies of the generation of October.

In such barbaric conditions, what prospect could possibly exist for the flowering of a democratic socialist civilisation? What is surprising is not that the revolution suffered gross, hideous, monstrous distortions, and survived as a grossly mangled caricature under the jackboot of a vile ruling clique… but that it was not immediately overrun and crushed underfoot by a victorious imperialism.

As soon as the exigencies of the civil war had ended, the hard-pressed peasantry revolted. At Kronstadt - formerly the rock-solid proletarian fortress of the revolutionary sailors - a disaffected body of newly conscripted peasants drafted from the rear mutinied. Riots broke out. So critical was the danger to the revolution that the tenth party congress in March 1921 was compelled to resort to the emergency expedient of temporarily forbidding factions within the Party - a measure quite unprecedented, even at the crucial moment of the October Revolution itself, when even dissident members of the Bolshevik central committee were able with complete impunity to campaign openly against its decision to call the insurrection.

Lacking a Bolshevik leadership steeled in struggle, the revolutionary wave which swept Europe finally subsided. The failure of the German Revolution in 1923 marked a decisive turning point. Victory in a socially and industrially developed country could have come to Russia's rescue. In a state of retreat, isolation and hostile encirclement, bitter concessions to foreign companies, native entrepreneurs and a privileged intelligentsia became unavoidable.

Bolshevism and Stalinism

Another stock vilification of the revolution is the insinuation that it was Lenin, Trotsky and the Bolsheviks who had paved the way to the monstrous excesses of Stalinism. Once again, this is standing the truth on its head.

It was a fundamental principle of Marxism that the state itself was a barbaric relic, an instrument of class oppression which would begin to wither away from the very inception of the workers' dictatorship. "Government over people" would be superseded by the mere "administration of things".

Once the revolution found itself stranded within the confines of a backward semi-feudal Russia, how was this principle to be applied? In such conditions a smooth transition to a classless and stateless society was inconceivable. That's precisely why Lenin and Trotsky placed the utmost priority on the urgent spread of the revolution to the more developed Western countries. But even in Russia, until foreign intervention had imposed the exigencies of "war communism", the Bolsheviks enforced the strictest measures to stand guard against bureaucratic encroachments, including all those principles of workers' democracy enacted by the workers of the Paris commune in 1871 and subsequently underlined by Marx. These were:

*          no standing army, but the armed people;
*          election of all officials by the workers' organisations with direct right of recall;
*          no official to receive a wage above that of a skilled worker;
*          popular participation in all administrative duties;
*          direct management and control by soviets ("When everybody is a bureaucrat, nobody is a bureaucrat.")

It is significant that when a communist regime briefly held power in Bavaria, Lenin's first piece of advice was to introduce a seven-hour working day, to give every worker the opportunity to participate in administrative duties and check incipient bureaucratism.

But didn't the Bolsheviks suppress rival parties? No! The first government established by the October revolution was actually itself a coalition of two parties: the Bolsheviks and the Left Social Revolutionaries (representing the poor peasants). At first even the capitalist parties (apart from the fascist Black Hundreds) were left free to organise. It was only under conditions of civil war and armed attacks by saboteurs and counter-revolutionaries that the Bolsheviks were compelled to impose an emergency temporary ban on other parties.

However, the working class was ruling in conditions of weakness and exhaustion. Already a tiny section of the population, it had been decimated by the civil war, the intervention and the famine, in which another five million people had died. It had to work long hours in excruciating conditions in the effort to reconstruct a devastated economy. Vile elements were crawling out of the crevices once the harsh regime of "war communism" had been replaced by a New Economic Policy, under which painful concessions had been wrung out of the government permitting a limited licence to private entrepreneurs. Worse still, in the extreme conditions of a backward and isolated Russia, there was no alternative but to enlist the services of the administrative personnel of the old Tsarist regime, luring them back by conceding to them a relaxation on the limit to their payment to allow a maximum wage differential of four to one; a concession frankly admitted by Lenin to be "a capitalist differential". That is what Lenin meant when he complained that "we still have the same old Tsarist state machine today, with a thin veneer of socialism spread on top."

Demoralised at the isolation of their revolution, nauseated by the antics of the "NEPmen" - speculators, kulaks (rich peasants), profiteers and black marketeers - and taunted by the return of a triumphant bureaucracy, it is hardly surprising that the Russian working class fell under the darkening shadow of a new form of despotism.

In such conditions, the party drowned in a cesspool of careerism. It was the sly and ambitious mediocrity Stalin (previously described as a "grey blur") - a perfect personification of the resurgent bureaucracy - who surreptitiously accumulated more and more administrative power into his own hands.

Speechless on his deathbed after an unsuccessful assassination attempt and subsequent strokes, Lenin conducted a desperate struggle to the last against Stalin and the emboldened bureaucracy he represented. Increasingly aware of the powerful machine he was constructing, the blatant growth of careerism and corruption, and even the deception and intrigue he personally suffered at Stalin's hands, Lenin broke off all relations with Stalin, formed a "bloc against bureaucracy" with Trotsky and sent a testament to the Party Congress urging Stalin's removal from his post, which was suppressed. Lenin's widow Krupskaya commented as early as 1927: "If Vladimir Ilyich had been alive today, he'd be in one of Stalin's jails."

Stalin did not create the reaction - he was its most lethal expression, and once created, he prolonged it. Bureaucratic degeneration was inevitable, given the isolation of the revolution and the weakness of the working class. It led Stalin inexorably along the road to the murder of all his comrades, the enslavement of the Russian working class, and the outright betrayal of the world revolution. The shrewd Georgian proceeded pragmatically, taking the line of least resistance at every turn; and this made him as ideal a focus for the Soviet bureaucracy as Lenin and Trotsky had been outstanding leaders of the revolutionary working class. The nonentity who had hypocritically donned the mantle of Lenin was to transform himself not into a revolutionary leader but into an Oriental despot.

To create a society founded on the principle "from each according to their ability, to each according to their need," it must have at its disposal highly developed technological resources capable of providing for the needs of all. Where there is shortage there is inequality. Marx had said: "A development of the productive forces is the absolutely necessary practical premise [of socialism] because without it want is generalised and with want the struggle for necessities begins again, and that means that all the old crap must revive." When a policeman is needed to control a food queue, as Trotsky explained, he will always see to it that he eats first and best. In the peculiar circumstances in which the revolution was isolated for a whole period to backward Russia, the state, far from withering away, rose to domination over the masses. For the workers, the only solution was the world revolution. For bureaucrats with a stake in the status quo, it was "socialism in one country." Their privileges and power were after all secure.

Its relevance today

History has seen countless working-class uprisings: the Paris Commune in 1871, Germany in 1918-23, Barcelona in 1937, France in 1968 and many more. Russia in 1917 remains an inspiration, irrespective of the deformities which ultimately crippled it. It remains a historical testament to the truth that another world is possible.

And now more than ever, another world is necessary. In every continent today, a new generation is waking up to the reality that the only future it faces under capitalism is one of poverty, homelessness, hopelessness, discrimination, environmental destruction and war. Millions of people are in revolt, casting around for alternatives, sometimes seduced by false demagogues, but increasingly determined to find a road to change. Those commentators who used to scoff at the idea of revolution are today falling silent. In a recent Greek opinion poll, 33% called for "revolution". And last year in the USA, 54% of respondents voted yes to the idea of a "political revolution to redistribute money from the wealthiest Americans". That included 68% of Afro-Americans, 65% of Hispanics, and 68% of 18-29 year-olds.

It's time to rescue the Russian revolution from the history books and return it to its rightful place as a guide to action.

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