Tag Archives: Hillel Ticktin

Most successful school yet

Peter Manson reports on a week of debate, learning and comradeship

Communist University 2009, the CPGB’s annual week-long school, was the most successful ever in terms of attendance and quality of debate. That was the virtually unanimous opinion of all CU veterans.

Of course, we cannot match the Socialist Workers Party’s Marxism event when it comes to numbers – of either sessions or comrades attending – but, as we never cease to point out, Communist University is something qualitatively different. Whereas the SWP fears genuine debate between Marxists, and never invites other revolutionary trends to hammer out their differences or permits anything more than three-minute soundbites from the floor, the CPGB consciously seeks out areas of controversy. Not for its own sake, of course, but precisely in order to clarify what divides us in order to strive for the truth.

This year’s CU, held in Brockley, south London, featured 22 stimulating sessions attended by something approaching 200 comrades overall. While many of those came to just a few meetings, there was a hard core of around 40 who were there throughout – the overnight accommodation at the venue was oversubscribed, with comrades having to improvise in shared rooms. Attendance at the sessions never dropped below 35, while more than 50 came to some of the weekend meetings.

Sessions

What of the content? While we were pleased to welcome back CU regulars who are renowned in their own field – not least Critique editor Hillel Ticktin, Russian Marxist Boris Kagarlitsky and the comrades from the Radical Anthropology Group – the presence throughout the week of Lars T Lih, author of Lenin rediscovered, undoubtedly gave this year’s school something new and original in terms of the historical knowledge that we need.

Were the German Social Democratic Party and the Russian Bolshevik Party completely different animals? Did Vladimir Lenin discover long-held differences with SPD leader Karl Kautsky after the latter’s betrayal in 1914? Did Lenin discard his entire previous strategy in April 1917 and finally become a fully-fledged revolutionary communist? The answers to those questions are no, no and no again, according to comrade Lih’s painstaking research. In fact what stands out is continuity in relation to all of them.

Why is this important? Because the economistic left, having mythologised a non-existent break in 1917, has in the process moved away from a fully Marxist approach. An approach which puts the fight for democracy – in our own movement as well as in relation to society as a whole – at the very centre of our work. We need not only a mass democratic party like Kautsky’s SPD, but a strategy for revolution based on the direct rule of the majority, not the dictatorship of a minority elite ruling in the masses’ name.

That is why comrade Lih’s three talks – on Lenin’s relationship with Kautsky, their strategy for revolution, and the Bolsheviks’ 1917 “wager”, or gamble, on revolution in Russia as a spark for workers’ power in the west – were so invaluable, as were his interventions during other sessions.

Comrade Ticktin’s three openings on the economic crisis – the underlying theory, the particularities of the current crisis, and the prospects for capitalism and class struggle – were also insightful, while comrade Kagarlitsky dealt with the crisis as it affected Russia.

The particular contribution to the workers’ movement of the Radical Anthropology Group was once again highlighted – not least that of their three main theorists and CU speakers, Chris Knight, Camilla Power and Lionel Sims. Comrade Knight – recently sacked by the University of East London for organising the Alternative G20 Summit in April – looked at the theory of primitive communism and its implications for 21st century class struggle, while comrade Power focussed on the not insignificant aspect of human evolution that is religion. SWP member Lionel Sims showed once more how the archaeologists have got it wrong – this time in relation to the prehistoric Avebury monuments. Comrade Sims’ theory explains the significance of Avebury and Stonehenge in relation to the counterrevolution ushered in by the beginnings of class society.

For the second year running, CU was pleased to welcome comrades active in France’s New Anti-capitalist Party (NPA). Jean-Michel Edwin described how the NPA is developing and talked about both the potential and the dangers. Continuing the internationalist theme, CPGB member and chair of Hands Off the People of Iran Yassamine Mather gave a detailed analysis of the Islamic Republic and the Iranian mass movement.

Other CPGB speakers were Jack Conrad, Mike Macnair, Mark Fischer and James Turley. Comrade Conrad, author of the Marxist study of religion, Fantastic reality, looked at the historical context and significance of the Dead Sea scrolls. In an earlier talk he spoke about the origins 30 years ago of what is now the Provisional Central Committee of the CPGB. He outlined the centrality of the communist programme and the progress made in redrafting the CPGB Draft programme.

Comrade Macnair introduced a topic that has been the cause of controversy within the CPGB: ‘The Labour Party – still a bourgeois workers’ party?’ He answers that question firmly in the affirmative and spoke very much along the lines of his important Weekly Worker article on the question (‘Making and unmaking Labour’, July 30). Strangely, however, there was little by way of controversy in the ensuing debate, even though the analysis of Labour as a bourgeois workers’ party was central in our decision to urge a Labour vote in the June 4 European Union elections – a decision that was met with strong opposition within our ranks.

The debate on the British National Party and the left’s response was also largely uncontroversial, although this too has seen disagreements in the CPGB, particularly in relation to the nature of the BNP – is it fascist or not? But comrade Turley chose not to focus particularly on that aspect in his opening – although it has to be said that, irrespective of this theoretical question, we are in any case solidly united around the kind of response that is needed and in our opposition to the no-platforming, ‘Smash the Nazis’ approach of most of the left, whether or not it merges with popular frontism.

Comrade Fischer, along with former National Union of Mineworkers militant and author David Douglass, recalled the miners’ Great Strike of a quarter of a century ago – an episode replete with lessons for today, not least when it comes to the absence of a single revolutionary party of the working class.

A lesson, it has to be said, that has not been learnt by Stuart King of Permanent Revolution. Invited to speak ‘On unity’, comrade King expressed some surprise when CPGB comrades criticised his failure to mention the unity that really matters – organisational unity for the class in precisely such a single party. Comrade King viewed this as beyond his remit – common, non-sectarian work in, for example, single-issue campaigns was the key for him.

Other sessions were introduced by Sandy McBurney, former member of the Scottish Socialist Party, who recalled how the potential unity of our class across Britain was deliberately sabotaged by the SSP – its leaders seemingly prefer the cross-class unity of Scots in the separatist fight for independence; and by Israeli anti-Zionist Moshé Machover, who looked at the role and potential of the Hebrew working class.

The remaining two sessions featured debates from the platform. The first was a rather confused affair, with comrades Kagarlitsky, Ticktin and Macnair addressing the question of Asiatic social formations particularly in relation to Russia. There seemed to be some misunderstanding as to what the differences actually were, making this perhaps the least satisfactory session of all, although it was certainly not without interest.

By contrast, the closing roundtable between comrades Ticktin, Knight, Machover and Ben Lewis of the CPGB was controversial and very pertinent: ‘Capitalism’s crisis: how should we organise?’ While all four comrades are agreed on the need for a Marxist party, they have very different views on how it can be won and what we ought to do in the meantime. See here for the comrades’ speeches.

Confident

One of the characteristics of an educational event like CU is, of course, the unevenness of those attending in terms of political experience and theoretical understanding. The fact that we aim for the very highest standards of debate means that the more inexperienced, often younger, comrades do not follow everything that is being argued in the main sessions. Many do not feel confident enough to contribute their own point of view or even ask a question.

That is why there were additional informal lunchtime sessions – held in the large, pleasant garden outside the conference room – where Jack Conrad led discussion on questions that arose not only out of the main meetings, but also out of comrades’ own experiences.

During the course of the week the basics of Marxism are touched upon during these lunchtime gatherings, but there is no doubt that the bourgeois education system does not equip students with any real means of understanding the workings of society. For example, most A-level history courses do not go back before the 19th century, so how can new comrades be expected to know anything at all about feudalism or the Asiatic mode of production?

Clearly we have a job to do in organising ongoing, year-round education for those new to communist politics – in parallel to the approach that aims to enrich our theoretical understanding to the highest level possible.

Not all the ‘fringe’ meetings planned for the evening actually took place, although the one I held – on the role of the Weekly Worker and how we should approach the duty to write for it – was well attended. However, just as important as all the organised sessions, formal and informal, was the social aspect of the week.

We organised our own catering and our own bar, so many comrades stayed at the venue to socialise, watch a film or just chat. And it goes without saying that the debates begun during the day often raged on into the evening and even the early hours. The use of the garden on a balmy August evening was very much appreciated.

Comradeship

It was also used, weather permitting, for the serving of lunch and afternoon tea. Which leads me to a key aspect of CU – the comradeship and cohesion that develops from organising, working and cooperating around a common project.

CPGB comrades each took a turn at providing lunch and supper, and most of the food served, while hardly cordon bleu, was well presented and appetising. And at £2 a meal it was certainly good value. (Come to think of it, where else could you get a full week’s conference, including accommodation, for just £160?)

While the big attendance meant that there were more comrades to share the work, in my opinion in the future we should ask non-CPGB comrades to help out if they wish. Collective self-catering should not, and generally was not, regarded as just a chore, but an integral part of uniting our ranks – politically, socially and organisationally. In that sense, CU can be viewed, in its own small way, as an example of the way common ‘work’ and ‘play’ will be reconciled in the kind of society we are aiming for.

Many of the comrades belonging to other groups and to none appreciated the spirit engendered. In this context particular mention to the two members of the International Bolshevik Tendency must be made. While they strongly disagreed with many aspects of CPGB politics, and with many of the conclusions reached by comrade Lih, for example, the fact that they stayed for several days and contributed to every session meant that after a while what they said went beyond the dogma that we have come to expect from the IBT.

The two comrades ended up playing a more than worthwhile role – Alan Davies even chaired one of the sessions for us! It goes without saying that the IBT, as well as other groups that attended, were able to have a stall in the conference hall and distribute their material freely.

In addition to the organisations already mentioned, there were comrades in attendance from the Labour Party, SWP, Alliance for Workers’ Liberty, Revolutionary History, Revolutionary Democratic Group and I am sure others too.

Communist University is more and more an event not to be missed. The question is, for how much longer will the excellent Goldsmiths College venue be large enough?

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Hillel Ticktin on the capitalist crisis (videos)

Here are three videos of a series of talks given by Hillel Ticktin (editor of the journal, Critique) at this year’s Communist University. We will be uploading further videos from this event soon. You can also find them at the CPGB’s Vimeo video channel here: http://vimeo.com/cpgb/videos

[CU09]Marxism and crisis theory from Communist Party of Great Britain on Vimeo.

[CU09]What is different about this crisis? from Communist Party of Great Britain on Vimeo.

[CU09]What sort of future for capitalism? from Communist Party of Great Britain on Vimeo.

Anglo-American solutions and imposing discipline

Hillel Ticktin

Hillel Ticktin

Weekly Worker editor Peter Manson spoke to Hillel Ticktin of Critique about the economic crisis…

There is currently much speculation about the ‘bottoming out’ of the recession. What is your view?

It is a question of ideology and a question of confidence. Last year there was a major fear that the system itself would break down. The meltdown of the financial system was acknowledged, but it was possible that things could go further than that. These fears were not elaborated, but they were real enough.

However, once it was realised that the monetary crisis had been overcome, confidence rose, as did the stock exchange. Now the banking system has more or less stabilised through nationalisation and so on – not very well or on a permanent basis – but there is no longer talk of a meltdown. It is true that so-called toxic debts are still hanging over the banks, but control has been re-established.

The treasury select committee says that financial regulation is still in “a muddle”.

That is true, but it is a completely different point. There is the issue of how to avoid the same thing occurring again. That is not so much about the downturn, but about the growth of credit and derivatives.

What is going on is a conflict between finance capital and capital as a whole. Finance capital cannot really be finance capital unless it is dominant, but because of the crisis capital as a whole cannot allow this. That means that countries where finance capital is less important – France, Italy, Germany and so on – are opposed to Anglo-American solutions and are demanding a much greater degree of regulation.

However, because Britain is so dependent upon finance capital, it is not prepared to go down that road. So the fight over control of the banking system is on one level between the US-Britain and the continent, but on another level it is between different sections of capital, and it is one that might take some years to resolve. It is unlikely that finance capital will be able to hold its own, since it has failed so spectacularly. On the other hand, there is no alternative form.

As to the so-called ‘green shoots’, there really is not a lot to go on. This has been played up by some of the more reactionary sections of the press, as far as I can see. But, as the Financial Times points out, what has transpired is really not very much – US figures show that production is 13.6% down on this time last year, which does not really demonstrate that the recession is ending.

In fact in Britain the downturn has been tracking the same path as in the great depression. In this context one really has to make a distinction between a cycle and a crisis. Capitalism has always had cycles, but not every cycle becomes a crisis. Following a downturn, companies eventually begin to make a profit once more and are able to reinvest. However, in the great depression that did not happen, which was a reflection of the fact that there was a general capitalist crisis.

It is not openly stated in the press, but this is also the case today – we are in a genuine medium to long-term crisis. What that means is that in cyclical terms there will be a tendency over time for the economy to expand. That is almost automatic, because in the first period (eg, last year) industrial production falls very sharply and firms cut their prices and sell off stock very quickly. Industrial production falls sharply. Prices also fall, but there is still demand, albeit at a lower level, so there will be a rise in production once old stock has been sold. This does not indicate very much other than a continuation of the cycle. The sharp fall in production has now been succeeded by a more gradual fall …

It is now claimed that the fall in production has come to an end.

What they are actually talking about is the fact that the drop in production has slowed. In America, for example, new orders for what are called durable goods have declined by 2.5%. However, in April and May there was a rise within that overall fall. In other words, one cannot really derive a trend from one or two months – quite a lot depends on particular items. It is true, for example, that industrial output in Japan went up by 2.4% in June and that was the fourth monthly rise. But you would expect a certain rise after the previous very sharp falls.

The first phase of the crisis is the monetary one, but the most important is the change in industrial production. That is only now really showing itself, with mass unemployment and continuing cuts in wages. It is difficult to believe that there can be a sustained increase in output alongside an increase in unemployment and ever lower wages. So it is obvious that whatever ‘green shoots’ there are will be cut back.

In both Britain and America unemployment has risen very sharply even according to official figures and will continue to rise. In the UK, when one adds those on incapacity benefit and part-time workers, it is probably around 20% or six to seven million people. It is quite obvious that unemployed people cannot buy very much with the benefit they receive.

There will, of course, be an upturn in the cycle, but the overall projection is that it will be relatively weak. Finance capital cannot act as before and the previous strategies cannot operate either. There is a long-term crisis and that means low levels of growth and high unemployment.

The second point to make is that in Britain it will be made a whole lot worse by cuts in the public sector. While Labour’s cuts are bad enough, they go nowhere near as far as the Conservatives’ would. Only a lemming would vote Tory today.

There will be quite a lot of lemmings at the next election.

Well, yes. It is a real issue that the left ought to discuss – why would anyone vote for the Conservative Party today? I can see why you would not want to vote Labour, but that is not the same thing.

The public sector accounts for roughly 30% of GDP. Anybody who works in that sector would be an idiot to vote for a party that promises to cut and cut (except those well paid top managers, whose jobs seem secure). The Conservatives also say they will cut benefits and pensions, so the same applies to those people too. Labour will also make cuts, of course.

What alternative have either Labour or the Conservatives got if they want to reduce government debt?

They do have the alternative of continued high borrowing – nothing terrible would happen if they pursued that policy.

It is often said that one has to cut in order to avoid inflation. But at present the conditions are those of deflation. The point is, while we are in a deflationary period, inflation is hardly a major worry. A rapid rise in prices is highly unlikely. But even if inflation did result, so what?

People like Sam Brittan of the Financial Times – not a friend of the left, of course – have explained why there is no reason why public sector debt should not be allowed to rise. Brittan has pointed out that in the past it has risen much higher than it is set to rise today – in wartime, for instance.

Isn’t the problem that both parties have to go through the motions of planning to balance the books?

It is not necessary to do that. A large public sector debt is perfectly sustainable if a slump is to be avoided, and the debt will start to be paid off as the situation improves. The government starts to buy back the securities it has sold. That is to be anticipated and there is no reason why it cannot be pursued.

Quite a lot of the current debt has, of course, been incurred as a result of the bail-out of the banks. It is said that a high level of public debt means huge interest payments, which eat into other elements of the budget. But if the rate of interest is low, as it is today, then that is not a significant factor.

But once the recession ends, not only will the tax base increase: the banks will become more firmly stabilised and will start to repay the government bail-out. So the end result is not what it has been painted to be. This debate is being conducted among certain sections of the establishment.

In fact the desire to make cuts in the public sector is an indication of something else: the downturn is being used as an opportunity to discipline labour. It is also an opportunity to introduce so-called private enterprise into the public sector. Taken together, it is an attempt to impose an historic defeat on the working class. That is not just the position of the Conservative Party in Britain, but of the Republicans in the United States too. But both Labour and the Democrats have been very strongly affected by this agenda.

As a result Obama has been unable to put nearly enough money into the US economy to allow it to reflate. One of the casualties of this has been his health programme, which was very weak in the first place.

So there is a contradiction between the need of capital to stimulate the economy and its need to discipline the working class?

Yes, that is true. If capital was not conscious of the struggle with labour, then it could allow the public sector to expand and wait for the economy to recover. But a very firm line is being taken, which can only extend the length of the downturn.

Do you think that the majority of the ruling class is really so conscious of this latent threat from labour?

I think they have been very frightened for the last two years. It is not that they necessarily believe capitalism will be succeeded by socialism, but they fear breakdown, disintegration and working class resistance. But one of the failures of academia is that it never discusses ruling class options in those terms.

Of course, there is a contradiction between big capital on the one hand and the petty bourgeoisie and small companies on the other. The latter do want a smaller public sector and lower taxation. Adair Turner, former director-general of the Confederation of British Industry and now head of the Financial Services Authority, once said that Labour is now the party that represents big companies, while the Conservatives are for small business.

It seemed that way under Blair.

But it is not surprising, in view of the fact that so much of what was British industry is now multinational, that a nationalist party like the Conservatives should represent beleaguered small capital much more than in the past.

Come to Communist University 2009!

communistuniversity

August 8-15, South London. Book Now!

Global economic crisis and Marx back in the mainstream press. Huge nationalisations and bailouts for the financial system. Millions in Europe and the US face layoffs, repossessions and poverty. Countries like Pakistan face total societal breakdown. Whatever the immediate dynamics of the global economic crisis, the type of capitalism we will face when the dust settles will be very different. Revolutionaries need to both think afresh as well as rediscover the healthy traditions of our movement. That’s what Communist University 2009 is all about – big answers for the big questions. Confirmed speakers thus far include:

  • Lars T Lih – Author of the excellent Lenin Rediscovered: What is to be done? in context
  • Hillel Ticktin – Editor of Critique
  • Boris Kargalitsky – Russian Marxist, author of Empire of the periphery: Russia and the world system
  • Moshe Machover – Israeli anti-Zionist and Matzpen founder
  • Lionel Sims – Author and member of the Radical Anthropology Group
  • Yassamine Mather – CPGB, exiled Iranian revolutionary
  • Mike Macnair – CPGB, author of Revolutionary Strategy
  • Jack Conrad – CPGB, author of Fantastic Reality: Marxism and the politics of religion
  • Jean-Michel Edwin – Marxist involved in the NPA in France

Click here for more information.

Head-in-the-sand capitalism and the tasks of the left – interview with Hillel Ticktin

The current downturn has been compared to the great depression. Peter Manson spoke to Hillel Ticktin, editor of the journal Critique, about the prospects for the left and what can be expected from the G20:

head-in-sandHow do you see the current situation? Will the measures taken by Obama and Brown have the desired effect?

No. Not many people believe they will. Obviously it depends on the United States much more than Britain. The problem with the measures taken – the $800 billion stimulus, etc – is that, although this sounds enormous, it is not enough. The second problem is that it is not a financial crisis any more – there is an underlying structural crisis of capitalism, which the ruling class is not prepared to face.

It is true that there is a widespread attitude, including in the US, that in some sense capitalism itself is failing. Now obviously they do not really believe that capitalism has collapsed, but the ruling class and the economic operators are extremely worried and they do realise that it is more than a technical/financial failure.

They need to put much more money in to halt the downturn, but part of the problem they have is that the Republicans are against it – they voted practically 100% in Congress against Bush’s stimulus package, with just a few Democrats joining them in the lower house.

Why is this the case? The Republicans wanted more funds to be provided through tax cuts and less to measures that would actually stimulate the economy – resources for the individual states and for infrastructure, for example. In a way the Republicans are reflecting a more general fear among the capitalist class – if too much money is spent, inflation will result.

But it is not as simple as that. It is pretty obvious that despite the huge sums of money injected, deflationary forces are dominant – we actually have deflation in Britain as well. One has to ask, then, whether there will be an upturn. The International Monetary Fund is actually expressing a consensus when it predicts a weak recovery. Nobody expects a rapid, genuine upturn. So why will there then be inflation? There will continue to be mass unemployment.

The second point is that, although in both Britain and the US huge amounts of money are going into the economy through quantitative easing, or ‘printing money’, a very large amount has left the economy. In the case of Britain, half of all credit that was formerly supplied has been withdrawn. This far exceeds what is being pumped in. For example, the Royal Bank of Scotland, which was technically bankrupt, had something like $1.2 trillion in outstanding derivatives. So we are talking about some multiple of that, compared to around £150 billion put in by the government.

It is quite clear that Britain cannot afford much more. Because the sums that banks may be forced to pay out are very great, it is no exaggeration to say that Britain as a country may be bankrupted. That is one of the reasons why money is flowing out of the country and the balance of payments has deteriorated.

There has been a whole debate, by the way, over whether Britain will end up going the same way as Iceland. It is my view that this will not happen – not because it cannot happen, but because the United States will not permit it. For the US ruling class it would be too dangerous politically and economically. Presumably it has already been agreed that the US will help Britain if necessary.

Anyway, at the moment inflation is just not on the cards – unless, of course, Britain did go completely under, in which case the pound would fall dramatically, with the result that imports would become extremely expensive. Assuming that does not happen, it is a question of deflation rather than inflation.

That is why the fears of the Republicans and Conservatives about future inflation are simply wrong in technical terms. Once there is an upturn, there is nothing to stop the government withdrawing money from the economy – that is what it has already said it will do and what is incorporated in its budget plans. There is no reason why the Bank of England cannot do what it is now doing in reverse. Inflation is not quite so real as the Republicans and Conservatives seem to assume, so the question is, why are they so worried about it?

Assuming you are discounting the possibility that they are plain stupid.

You are right – there is that possibility! They do not understand what is going on. But what lies behind it is the fear that the working class will be strengthened by reflationary policies.

I can understand that bourgeois economists may fear that. But do Republican and Conservative opponents of current policies really think in those terms?

I agree with the implication of what you are saying. The ‘ordinary’ politician does not understand things in that way, but a number of others do. For example, longstanding members of the Senate who have played an important role in government over a considerable time are closely interrelated with the ruling class itself. Such people do think more long-term.

It is perfectly true that there is a level of irrationality within the capitalist class and politicians may not understand what the code words actually mean – ‘inflation’ is a code for increased working class power. Although there is the possibility of going the same way as Germany in 1923, that is rather unlikely. Annual 5% inflation of the type we have been used to poses no danger to anybody, although some politicians seem to think it does.

They also appear to be worried about the budget deficit increasing above 40% of GDP. This does not make any sense. There is no reason why the deficit should not be at around 60%-70%. That is the current level in Germany today.

If the downturn continues, as it will for some time, and the upturn is relatively weak, then in some sense we are in the territory of the great depression. In that case they will be worried that the government might be forced to the left and the working class might begin to act.

It could be said that the turn to Keynesianism is itself a move to the left.

Yes, that is true. Only a year ago Keynesianism was despised in the US as a kind of crypto-leftism.

If the underlying problem is the overproduction of capital, how can a lasting upturn be achieved without the destruction of capital?

I do not think it can. The fundamental contradictions of capitalism are all operating. There is no obvious way of bringing the current situation to an end. There is a huge amount of surplus capital, and this is being blamed on China and other countries. But that is absurd: the amount of surplus held by China is something like $2 trillion, which is a fraction of the surplus capital within the system as a whole.

Much of the surplus ended up in derivatives. The only solution is for surplus capital to be wiped out – and with it a section of the capitalist class. But to a certain extent excess capital is extinguished, otherwise there would not be capitalism, and this is happening now. To the extent it happens the downturn will be limited and come to an end, which is likely to occur within the next two to three years.

But can there be a return to a vibrant capitalism? The answer is no. The real question is not so much ‘Why has this happened?’, but ‘Why didn’t it happen before?’ A Marxist cannot simply argue that capitalism will come to an end when the majority are persuaded it must be overthrown. We are opposed to capitalism because it is inferior to socialism – it is inconsistent even in its own terms. It is structurally incapable of continuing to develop the forces of production to the extent that they can be developed. Capitalism’s internal contradictions make it malfunction, which is what has actually been happening.

Why was it able to do so well after the war? The answer has everything to do with the cold war and Stalinism. But once the cold war was over, it turned to finance capital, which for a time worked. Finance capital was associated with what is called neoliberalism, but that has now blown up. The cold war and Stalinism have come to an end; finance capital has come to an end. So one has to ask, what is the alternative strategy? It is very hard to see it.

What is more, they know they have no alternative strategy. Obviously there are ideological statements that can be made and piecemeal measures taken. And at the present time the working class is demoralised, so they are not in dire straits. But over the middle to long term capitalism is in considerable trouble.

Is it possible theoretically for capitalism to enter a new boom?

I cannot see it. We do not live under a system of spontaneous capitalist development. Governments have been playing a crucial role for a century now and the capitalist class wants and depends on government intervention. In fact they would prefer for the economy to expand at a fairly low rate of growth, which is what happened after 1995. They fear the possibility of inflation.

So a boom is technically possible, but very unlikely. If expansion were to be accelerated, it would lead to increased power for the working class, directly or indirectly. The capitalist class will not go there unless they are forced to. It would be better from their point of view to continue with a steady, safe capitalism than to have no capitalism at all.

Would it be reasonable to say that capitalism’s secular decline is now dominant compared to its cyclical tendencies?

It is more complicated than that. What we are actually talking about is a period from World War II until March 2000, in which the downturns were in fact quite weak. They were largely defined by governments raising interest rates and taking fiscal measures – deliberately reducing growth in order to control the working class.

Those cycles were relatively weak, even if it did not always look quite like that. What is happening now is entirely different. It is very similar to the great depression. The only reason it will not become another great depression is that governments will intervene to prevent it, which they did not do last time.

Is it possible or desirable for the US to offload the downturn onto other countries?

I am not certain about that thesis at all. It depends what one is actually saying. It is obviously true that the industrial downturn is experienced much more strongly in China than in the United States. You would expect that, because the US has exported a good deal of its industry to China – it has to a degree externalised its working class.

The effect of the downturn on countries that are not industrialising through American capital is not the same. In third world countries the effect can be far worse, but that is to a considerable degree because the standard of living is very low in the first place. Their exports are hit and their rate of exchange declines – that will be the case in South Africa, for example.

But whether this is the same as exporting the downturn is another question. After all in the US and Britain we are talking about rising levels of unemployment and a downturn of considerable severity. If it is suggested that they can somehow continue to expand and not experience a downturn compared to third world countries, that is untrue.

In the case of Britain, because of the dominance of finance capital, which reached 40% of GDP, clearly the industrial downturn, while real, is of less importance. But in Germany the downturn in industry has been very substantial. It simply cannot export its goods. Volkswagen, the biggest car producer in Europe, is about to report a loss. The automobile industry is crucial and if a major car manufacturer goes down, then the economy is in very big trouble.

Do you think the G20 will be able to come up with a united response to the crisis?

Well, the finance ministers have just met and it is reported that they could not decide on anything. That is really a commentary on where they are – they are unable to come to any agreement.

There are three aspects worth looking at in relation to the G20. The United States and United Kingdom want the world economy to expand by around 2% of GDP in monetary terms. In other words, they want to pump in that additional amount of money. But the Europeans, led by the Germans and French, are resisting this.

It is a split within the capitalist class between, if you like, the Anglo-Saxons and the continentals. America and Britain are very much finance capital powers – one finance capital power really. But the French and Germans are not in that position and are not prepared to go along with it. They do not wish to be controlled by finance capital. In a sense it is an expression of their independence.

The second aspect goes back to what we were talking about earlier. France and Germany do have a powerful working class and they are afraid if the economy expands too fast workers will start to act.

But, on the other hand, they are seeing the destruction of their industries.

Yes, that is true. But it is not that they are taking no measures – the Germans have pumped in $500 billion. It is just that they do not want to go so far, even though 2% is not that much in fact.

No doubt they will draw up a statement about agreeing to expand, but the details are likely to be fudged. They will have to have some agreement, because there would be no point in Britain and America expanding while the rest of the world does not. However, it is an expression of the comparative decline of the United States that they can no longer force everything through.

The third question relates to the IMF. It seems certain that increased funding will be agreed, but some countries will be pushing for an increased say in the IMF, which is effectively controlled by the United States. The question is how far it can be reformed.

But the main reason they will agree to extra funding is because eastern Europe is going down the plughole very fast. The IMF has already bailed out Hungary, Latvia and Ukraine. But these bailouts are insufficient and the funds held by the IMF are trivial compared to what is required.The intention is to increase it to $750 trillion, which does not look that great in terms of the US, but for smaller countries like those in eastern Europe it is significant. And they will have to be bailed out for political reasons.

Of course, the countries of eastern Europe were formerly Stalinist and they have not all made it yet to classic capitalism. Consequently under current circumstances their economies are very susceptible and living standards will go down very rapidly. Russia itself is in a precarious position, in that it is much further away from classic capitalism than the rest of eastern Europe. There is a tendency to revert to increased state control. If oil prices remain low, which looks likely, the balance of payments will continue to decline. In any case debts on a private basis are over $200 billion – Russia originally had $400 billion in reserves. It will almost certainly be in deep trouble before too long. Russia’s economy is highly dependent on the export of raw materials and its industry has been targeted for asset-stripping. The result is that it is moving towards a really critical situation.

This is what is starting to happen and there is a big danger for the capitalist class that large sections of the population will turn against the market – if not today, then tomorrow.

Not that the words ‘socialism’ and ‘communism’ have much attraction for the mass of workers in those countries.

That is true. In fact a swing to the right – the far right – is probable. An example is Hungary, where the ex-Stalinist social democrats in the government are getting very low support in the opinion polls – as low as 15% – and are likely to be wiped out in the forthcoming elections. The rightwing opposition – associated with anti-semitism – is likely to win by a substantial majority.

The Hungarian case shows that at this stage the reaction to a failing capitalism will be a turn to the far right rather than the left. But that cannot provide a solution and will result in even worse conditions. So the result is, people will be forced to reconsider. Nobody would ever want a return to Stalinism, but there is a real socialist alternative. And there are genuine socialists around in eastern Europe.

We await the point where capitalism is seen in all its immorality, inefficiency and cruelty, and where socialism is regarded as the alternative – not just by workers in eastern Europe, but in all the world.