Which way forward for 21st century Socialism?

The Bolivarian populist regime in Venezuela is the flagship of the World Social Forum’s plan to build an alliance of states to fight for ‘globalisation from below’ by negotiating with ‘democratic imperialism’ for better terms of trade to fund 21^st century ‘market socialism’. Is the recent loss of the constitutional referendum also a setback for socialism?

Constitutional Reform defeat

The narrow defeat of Hugo Chavez constitutional reforms last month has forced a 'rethink' within the Bolivarian movement. 3 million former Chavez voters stayed at home giving the anti-Chavez national bourgeoisie a small victory. Chavez accepted responsibility for making a mistake in holding the referendum and has called for a 'pause for reflection' on the road to the Bolivarian Socialism. http://www.venezuelanalysis.com/analysis/3089

Meanwhile the founding Congress of the PSUV is currently meeting with the delegates debating a draft program and reporting back to their 'battalions' for discussion and decision making. The referendum setback has also seen more debate in the movement around the course ahead, and raised distinct tendencies in the PSUV against Chavez earlier expressed wish. He says he is now happy to see the various 'Chavista' parties forming tendencies inside the PSUV!!

One such tendency is the MAREA socialist current of Stalin Borges and Ismael Hernandez of the C-CURA wing of th1e UNT. This was the majority of the C-CURA that joined the PSUV to fight for a working class program against the bureaucracy. It seems that their voice is being heard not only inside the PSUV but in the wider trade union struggle. The MAREA current in the PSUV has publicly condemned the sacking of a prominent C-CURA leader Oswaldo Chirino from his job in the Venezuelan state owned oil company the PDVSA. Chirino is one of the leaders of a minority in the C-CURA that refused to join the PSUV on Chavez terms of liquidating any political tendencies. Instead he called for the formation of an independent workers party. He also called for a no vote on Chavez constitutional referendum.

The sacking of Chirino follows a long struggle in the oil workers unions for a new agreement with the Chavez oil ministry. Chirino is one of the leaders of the largest oil union, Fedepetrol, which has 35,000 of the 60,000 oil workers. The agreement has been in negotiation since April 2007. In September workers were attacked by Anzoátegui state police as they tried to enter the negotiations. The state governor objected only after 4000 workers took to the street to protest. The contract settlement in November did not meet all of Fedepetrol's demands and included a drastic provision inserted by the oil ministry that forced all the unions to amalgamate into the United Confederation of Energy Workers (FUTEV). Around the same time Chirino was told he did not have a job.

In the last issue of Class Struggle 75 we argued for a tactical entry into the PSUV to fight for the right of tendencies so as to split workers from the bourgeois fractions, but with no illusions as to the class character of the PSUV. We said that Borges had a false idea of the PSUV as a potential workers party, whereas the task of revolutionary entry could only be to split the workers out of the popular front party into a workers revolutionary party. It seems on the face of it, that despite these illusions in the character of the PSUV the MAREA current is coming out openly against a Chavista state ministry. Has Borges left behind his illusions in the PSUV?

Not at all. It is good that his faction has supported Chirino in his fight against the oil ministry. But the problem here is not just a bunch of right wing Chavista bureaucrats dominating the oil industry, but a Chavista state bourgeoisie that has to be smashed. The PSUV is not a bureaucratized workers’ party, it is a popular front party. And the Chavista state is not a bureaucratised workers' state, but a bourgeois semi-Bonapartist regime. This will become clearer if the Chirino faction in the oil unions mobilizes a UNT congress for his reinstatement and to repudiate the oil ministry settlement.

This is of course a demand that should be immediately raised by revolutionary Trotskyists who have entered the PSUV, to expose the Borges cover of the left leg of the popular front. It will be difficult when Chavez seeks to discipline the popular front in a confrontation with Exxon Mobil and US, but revolutionaries have to be clear that only a revolutionary working class party with a revolutionary program can win the struggle against US imperialism by taking power at the head of the working class and the poor peasants.

From state capitalism to state socialism?

Such a revolutionary program is necessary to expose the hollow pretence of ‘socialism’ in the draft PSUV program. This is full of talk of socialism, but very vague on how the existing state power that has served the bourgeoisie for centuries can become ‘popular power’. http://www.venezuelanalysis.com/analysis/3095

It seems that the draft program embodies the fundamental misunderstanding of the ‘democratic socialist’ left in Latin America, which is, that the state is the instrument of the class that has the power to take it and use it. This misconception is what lies behind the 'socialist' currents of various kinds inside the PSUV. It is the utopian view that peoples' power can be 'constituent' power, in the sense used by Hardt and Negri, and now very fashionable in the Latin American reformist left. As the draft program puts it:

"Of course, all methods of action lead to an end: the taking and exercising of power. This is because possessing power signifies the possibility - the only concrete one - of directly carrying out in practice the programs for substituting one political structure for another, and for changing a defective society for an ideal society. A political party that does not aspire in some way to take power has no reason to exist."

This will result from a process:

"3. Build Popular Power. Socialise power: The program of the PSUV has as its objective making reality the slogan "in order to end poverty you have to give power to the poor", or better said: the people. That is to say, build a government based on Councils of Popular Power, where workers, campesinos, students and popular masses are direct protagonists in the exercising of political power. The program of the PSUV proposes the socialising of political power, establishing the direct exercising of decision-making power by the masses in their organisations; their unrestricted right to scientific research and the free artistic creation, and the democratisation of access to all cultural policies."

More specifically this is a transition from state capitalism to state socialism:

"4. Planned economy. Communal state: The program of the PSUV proposes to move in the direction of a democratically planned and controlled economy, capable of ending alienated labour and satisfying all the necessities of the masses. Throughout this period of transition, which at this moment marches from a state capitalism dominated by market forces towards a state socialism with a regulated market, the aim is to move towards a communal state socialism, with the strategic objective of totally neutralising the law of value within the functioning of the economy.”

Or as we have argued in Class Struggle for some time, "state socialism" in this sense is really "market socialism" implemented by a bourgeois state, or as the draft program puts it:

"A society with property models that privileges public, indirect and direct social, communal, citizens' and collective property, as well as mixed systems, respecting private property that is of public utility or general interest and which is subjected to contributions, charges, restrictions and obligations."

But how is it possible to “neutralise the law of value” while still “respecting private property”.”Subjecting [private property] to charges, restrictions and obligations” is exactly the definition of the “shared production agreements” of the oil multinationals with the puppet regime in in Iraq, and the “mixed system” in Cuba. By this means does the law of value, and the market, assert its domination.

Yet this program is full of revolutionary rhetoric coming out of the mouths of reformists, including fake Trotskyists, in living contradiction with the state’s ongoing defence of private property. Wherever this contradiction raises itself, inside or outside the PSUV, it is the task of revolutionaries to actively insert the lever of the revolutionary program to win the militant masses to that program.

NZ: Crisis, Free Trade and Socialism

How will US credit crunch hit NZ?

The US credit crunch will impact in the short term on NZ in the relative devaluing of the Kiwi $dollar. For NZ workers this means our labour is revalued as not as worthwhile in the world capitalist market. A chunk of US$ speculative money capital will be eliminated and the US$ we move to revalue on the basis of the actual strength of its productive capacity. NZ is linked to growing Australia and Asian economies and is benefitting from strong commodity export prices. This is despite an overvalued Kiwi $ that results from high demand due to high interest rates.

The Austral/Asian bloc will benefit from the devaluation of the US$ as the Euro and Yuan play a larger role as ' world money'. The US$ has played the role of world money since 1971 when it went off the gold standard. Today most countries hold US$ reserves because they expect to be a store of value which can be exchanged at value for commodities. This means that competition for the US$ as world money holds up its value even when the US is running a huge trade deficit. By printing dollars with a value well in excess of what they can be exchanged for in US commodity production, the US can consume much more than it produces in value and maintains an artificial 'dollar hegemony' over the world economy.

This 'dollar hegemony' is waning as today the US$ had declined from 80% to 40% of world money. The end of US dollar hegemony will force the US domestic economy into line with globalised market values to which NZ has adjusted over the last 20 years. This means that there will be less need to hold US$ reserves and the EU and China can diversify its investments from USA$ bonds. This will bring a major realignment of the world economy from US$ hegemony in which it was able to transfer value from other countries to itself, towards an economy in which the US will have to create value by more productive investment domestically and internationally.

FTAs are really about buying up assets

The only reason that NZ is chasing Free Trade Agreements with nations in the Asia Pacific such as China and the P4, is that it hopes that this will allow more access to NZ exports. NZ has reduced tariff protection to almost nothing so that it has everything to gain from China and the US doing the same. Free trade will benefit NZ because it has already restructured to develop comparative advantage. The prices of US and China goods imported into NZ are likely to fall faster than the price of NZ exports. China is already moving from being a low wage country by increasing investment in high technology. The current crisis in the US will switch productive investments in high technology bringing it into line with its external investments in Asia, Latin America etc.

Of course, from a capitalist standpoint, the objective of free trade and investment in all three countries, as well as other FTA’s (see box on FTA’s and the P4), is to increase the rate of exploitation and cheapen the labour content of the commodities produced, so as to gain greater world market shares and more profits.

However, the US and increasingly China is investing more and more of its surplus capital as Direct Foreign Investment so that it can exploit the productive resources of developing countries and emerging markets. What they are looking for in NZ is a free hand to buy up the remaining private and state assets. From a working class standpoint, the benefits from growth for the capitalist investors, in all three countries, are at the expense of the workers. Therefore, workers in these three countries have very different class interests from the capitalist owners.

Workers answer to FTAs are STAs

In response to FTAs the interests of workers is not to appeal to their own capitalist class to protect their jobs. This leads to the ‘race to the bottom’ as workers sell out their wages, conditions and other workers jobs in the hope that they can keep their own. In every country were workers have tried this protectionist strategy they have been defeated and lost their jobs anyway.

The only way for workers to keep their jobs is to take control of production. This means socializing the means of production i.e. labour and materials. This is the only way to make sure that production is planned for the benefits of workers and is ecologically sustainable.

In order to build up the power to socialize production, workers have to fight now for more control of production. This does not mean joint ventures in which the nation state concedes ownership to multinationals. Capitalists are happy to operated ‘shared production’ as in Iraq or Bolivia, because they extract their super-profits anyway. The local state is the bosses’ state and does not represent workers at all. So ‘joint ventures’ or PPPs (Public-private partnerships) between local states, like the NZ state, are really deals between the national capitalists that manage the state, and imperialist capital that dominates the global market.

Socialism means occupying and expropriating capitalist property, turning that property into workers property, and planning production for need (not profit). Workers in every country need to unite and coordinate internationally to plan Socialist Trade Agreements. This would take the alternative agreements such as ALBA, between Venezuela, Cuba and other Latin American states, and turn them into agreements administered and controlled by workers organizations independent of the local bourgeois states and imperialists.

Observations on the World Situation

The financial crisis in the US has not yet developed into a full recession by devaluing constant and variable capital in the imperialist heartlands. It is a partial devaluation of capital in the most speculative and least productive areas (home financing, high-risk loans etc), which has spread into the banking system. The state banks are meeting this crisis by reducing interest rates and increasing subsidies (cheap loans) to finance capital to stave off recession.

On January 22 cut in the Fed borrowing rate of 0.75% to 3.5% means that interest rates may now be less than inflation. The tax cut package of $150 announced by Bush will barely scratch the surface of household debt. If it proves that the US has already entered recession in the last quarter of 2007, while overall production would be in decline, this will reflect a devaluation of the least productive capital and the cheapening of constant and variable capital in areas of more productive investment. This recession will act to counteract the Tendency of the Rate of Profit to Fall (TRPF). It will lead to concentration and centralization of capital (eg. mergers of the big capitalists) and raise the rate of profit.

This financial crisis in the US takes place against a fundamental upturn in accumulation of the world economy since the early 1990s resulting from the combined impacts of of 'neo-liberalism' on the 'third world' and capitalist restoration on the 'second world'. This had had the effect of a massive devaluation of former state owned assets and privatisation of these assets in the semi-colonies and the destruction and privatisation of assets of the former degenerate workers states. A massive historic defeat of the working class was necessary to allow imperialism to impose this destruction and re-valuation of assets. It enabled the world economy to emerge out of its stagnation of the 1970s and 1980s.

However, the current financial crisis, along with the cyclic crises of the 1990s, shows that as capital goes into a period of accumulation it faces once again the onset of the TRPF and a rising overproduction of capital in the world economy. That 'fictitious' capital cannot be valorised against existing values so seeks to increase its value by speculating on the changes prices of existing values. Thus accumulation necessarily is accompanied by a succession of financial crises or devaluations as fictitious capital is destroyed. e.g. the sub-prime mortgages are written off, Latin America, Asia, DotCom etc. This proves Marx's law of value (total prices = total value) that capital cannot accumulate on the basis of unequal exchange.

It is important to acknowledge the law of value to reject the bullshit ideas of the exchange theorists that explain the growth of the world economy as the result of unequal exchange. For example, Henry Lui writing on the world economy and China in particular, credits the growth over the past period to US 'dollar hegemony'. That is, the US has stolen value produced by its trading partners by printing dollars to pay for the commodities it imports from them. This leads to global dollar reserves, which contribute to the hugely overvalued US dollar. Clearly, this explanation is a variation on unequal exchange theory, where the commodity money, in this case the US dollar, is artificially overvalued and allows the US to pay less for its imports and force its partners to pay more for their imports.

While unequal exchange is undoubtedly a major counter-tendency to the TRPF, US 'dollar hegemony' cannot account for the dominance of US imperialism. Similarly, Petras' more familiar theory of unequal exchange based on US buying commodities cheap and selling then dear is also fundamentally flawed. Imperialism does benefit from 'primitive accumulation' or 'theft' of raw materials and labor power, but cannot sustain a period of renewed accumulation on this basis.

The onset of this period of accumulation in the 1990s can only be explained by Marxist concepts. As Trotsky himself theoretically envisaged, such a new period could arise out of a historic defeat of the world's working class by imperialist globalisation ie capitalist restoration in Eastern Europe and the U.S.S.R. One which had the impact of a 'Third world war' in the destruction of value and the restoration of the rate of profit.

Today, 18 years into this upturn, we are once more facing a massive overproduction of capital that cannot be invested productively without further huge attacks on workers and peasants (by wars, invasions (re-colonization), fascism). The gain for capitalism of this would be to drive down the value of labor and of raw materials –to create a new basis for capital investment and exploitation. As the US recession spreads world wide it will see unemployment rise and commodity prices fall. Because of the real internationalisation of capital, workers and peasants in every country, including those of the imperialist states, are facing renewed massive attacks on their living standards, and are today potentially able to unite as an international class force.

The outcome of this crisis will therefore depend on the international resistance of the working class to these attacks. If this resistance is isolated and contained by the World Social Forum(WSF) in alliance with 'progressive' capitalists and 'democratic' imperialists, then imperialism will succeed in making the workers and peasants pay for its crisis. If the revolutionary Trotskyists can win the workers vanguard from the WSF and unite it in a new communist international, then we can make the imperialists pay for their own crisis.

Stop the Genocide of the Palestinian People of Gaza

Urgent call by the Leninist Trotskyist Fraction to workers’ organizations worldwide

The new and ferocious attack by the genocidal state of Israel, the police for imperialism in the Middle East, is carried out with the complicity of the bourgeoisie Palestinian Fatah that has become the jailers of its own people. On Wednesday, 23 January, the heroic Palestinian masses of the Gaza Strip after weeks without electricity, water, food or medicine, broke down the border wall at Rafah and re-united with their class brothers and sisters in Egypt. On February 3, Mubarak made a pact with Hamas to use the army to close the border. On Monday February 4, the Egyptian army attacked the Palestinian masses leaving two dead and dozens wounded. It is clear that Hamas is just another bourgeois faction that attempts to control the Palestinian masses in Gaza, hoping that imperialism and the Zionist state will pay them to be the jailers in Gaza just as Fatah are their jailers on the West Bank.

Fatah and Hamas are factions of the national bourgeoisie of the Middle East. They are the agents and junior partners of imperialism, who repress and starve their own people, strangle the resistance of the Palestinian people. They made pacts with the Zionist state even while workers & peasants of southern Lebanon and Palestinian masses were defeating them. They back the Anglo/US invasion and occupation of Iraq.

They are also the partners of the Syrian and Iranian bourgeoisie that starves and represses their workers and peasants. They are the partners of the puppet regime in the imperialist protectorate of Iraq.

They collaborate with Egyptian bourgeoisie, which helps Israel to control the southern and western borders of the Gaza Strip, and of the Jordanian bourgeoisie headed by King Hussein which was responsible for the brutal 1970 ‘Black September’ massacre of the Palestinian people in the camps on the right bank of the Jordan river.

In Lebanon, the Hezbollah faction of the bourgeoisie led by Sheikh Nasrallah has made a pact with the Siniora government and agreed to the occupation of the south by imperialist UN troops that protect Israel’s border. Hezbollah collaborates with Fatah and Hamas to isolate and prevent a united struggle of the Palestinian people against the Zionist state of Israel.

The native bourgeoisies, minor partners of imperialism, act in the imerialist interests to exploit the working classes. They negotiate with imperialism for their slice of the profits, but always join forces with imperialism to crush any workers anti-imperialist and revolutionary struggle.

For us, the liberation of the Palestine people must begin with a total break from the bourgeoisie, and their imperialist and Zionist masters, and with a united struggle of the oppressed and exploited people throughout the region, from Egypt, to Afghanistan. The road to this liberation has been opened by the heroic Palestinian masses of the Gaza Strip tearing down the walls and calling on their class brothers and sisters to come to their aid.

The new martyrdom of the Palestinian people exposes yet again, the fate of the workers and masses everywhere at the hands of the leaders of the "Bolivarian revolution" such as Chavez and Fidel Castro, Fatah, Hamas, Hizbollah, and Ahmadinejad. The treacherous World Social Forum sings the praises of Hezbollah, appeals to Spanish imperialism that supports Israel, to send humanitarian aid to Gaza, and begs all the imperialist power to lift its embargoes against Hamas. Defeat the politics of the World Social Forum that betrays the exploited working class to the bourgeoisie in the Middle East and throughout the world!

This is the same World Social Forum that diverted the workers opposition to the war, for the rights of migrant workers etc, into campaigns to vote for the imperialist Democratic Party. Both Hillary Clinton and Obama refused to lead opposition to Bush, and voted for funds to continue with the war and occupation of Iraq and Afghanistan and the brutal attack on the workers in the United States.

In the European powers, the Social Democrats and Stalinists compete, along with the imperialist bourgeoisie, directly to Al Fatah, to pact with Bush and the Zionist state and ensure the imposition of apartheid on the Palestinian people. These same forces, together with other traitorous leaders including the reformist currents of the World Social Forum, which is imposed in France, Italy, Germany and other European powers, have made social pacts to contain and stop the struggle of the proletariat of those countries that began to respond before the brutal attack by the imperialist bourgeoisie.

These are the same forces that in Latin America, with Chavez’ and Castro’s reformist bureaucracy at the head, have mis-lead the revolutionary and anti-imperialist struggle of the masses. These mis-leaders have put the working class, country by country, at the foot of the bourgeois regimes and governments. The "Bolivarian revolution" has today deepened a fierce attack on the masses, redoubling their suffering, overexploitation and the plunder of the nations of the South American subcontinent.

• Down with the pact between Bush and Olmert with Fatah. This betrays the heroic liberation struggle of the Palestinians!
• Down with Hamas pact with Mubarak to return the Palestinian masses to the concentration camp of the Gaza Strip!
• One working class; one revolutionary struggle throughout the Middle East!
• Tear down the Walls! The road forward is the one taken by the heroic Palestinian masses of Gaza: we must tear down all the walls put up by imperialism, the Zionist state and national bourgeoisies and unite the proletariat of the Middle East region!
• For the Destruction of the Zionist state of Israel! Make the Middle East the grave of imperialism and Zionism!
• For a secular, democratic and non-racist state of Palestine under an armed Workers and Peasants Government!
• For the defeat of imperialist troops in Iraq and Afghanistan! Long live the heroic struggle of the working masses against the Anglo/US invader!
• For a Federation of Workers and Peasants’ Socialist Republics of the Middle East!
• End the plunder, oppression and massacres of imperialism and their national bourgeois junior partners!
• Workers of the world take to the streets to support the Palestinian people!