`A kind of economic gloom hangs over the community of Western nations,' Jean Bourbaix wrote in the Belgian journal Pourquoi pas? in September 1974. 'The fall in share prices is only one symptom of it, perhaps premonitory, accompanied with a wave of failures, a general inflationary conflagration, and growth of unemploy- ment.'^^1^^ In 1975 the capitalist world experienced its deepest recession in industrial production in the past forty years. The crisis affected almost all industries, international economic relations, and other spheres of the economy, and spread to many regions and countries of the capitalist world. The overproduction crisis of 1974-5 was interwoven with deep structural crises that continued into 1976 and 1977. The crisis affected not only all aspects of the economy but also the political, ideological, and moral spheres of capitalist society.
The fact of economic and political shocks and upheavals of various kinds in the capitalist world in the 1970s allows us to speak of a far-reaching, all-embracing crisis of capitalist society with serious consequences for all the working people of capitalist countries.
The crisis of the 70s has worsened the position of a substantial part of the working class, the peasantry and small farmers, the intelligentsia, and the urban and rural middle classes. The rise in the cost of living and growth of unemployment, the standstill or even decline in real wages, and the deterioration of the workers' other working and living conditions are all social consequences of the j
crisis witnessing to the anti-people nature of the capitalist mode of production.
_-_-_~^^1^^ Pourquoi pas?, 1974, 2911; 64.
9As Leonid Brezhnev stressed in his report to the 25th Congress of the Communist Party of the Soviet Union:
Now everyone can see that one of the main myths created by reformists and bourgeois ideologists has collapsed- the rriyth that present-day capita]ism is able to avert crises. The instability of capitalism is becoming more and more apparent.^^1^^
Economic crises are not something new in the history of capitalism, hut in the era of imperialism a general crisis of capitalism has developed in addition to them, a crisis that expresses the constant shrinking of the sphere of imperialist domination in connection with the rise and development of socialism, the break-up of the colonial system, and the sharpening of the inner contradictions of the economies of capitalist countries and of the policies and ideology of the big bourgeoisie.
The most characteristic features of today's crisis, namely, the combination of a cyclic overproduction crisis with longer structural economic crises, and with a deep ideological and political crisis, are evidence that the 70s crisis is part of the general crisis of capitalism and marks a qualitative shift in the development of its present stage.
The specific features of the 70s crisis are due to the changes that have taken place in the modern world under the impact of the development of a world system of socialism and the upsurge of class struggle in capitalist countries and of the national liberation movement in developing countries. In addition, the scientific and technical revolution, and the processes caused by it in the development of society's productive forces, the organisation of industry, and the role of science, are having an immense impact on the nature of the crisis itself and the way it is expressed.
The crisis of the 70s struck the highly developed economy of state monopoly capitalism, which is marked by a much closer merging of the state and monopolies than _-_-_
~^^1^^ Documents and Hesolutions. XXVth Congress of the CPSU (Novosti Press Agency Publishing House, Moscow, 1976), p 34.
10 before, and on that basis by development of the regulating activity of the state monopoly machine.The state monopoly system's varied control of the economy could not prevent the long accumulating contradictions of capitalist reproduction from exploding. The inner contradictory character of state monopoly control, furthermore, deepened the crisis shocks of the West's economy, made inflation permanent, and was one of the factors complicating the character of the crisis and its 'multilevel' nature, depth, and duration.
The effect of the scientific and technical revolution was also very complex. The growth rates of separate sectors and industries have been accelerated and the course of the renewing of fixed capital has been given additional stimuli by the impact of scientific and technical progress, which even limited the scale of the recession during the steepest fall in production, and made for a certain stabilising of the economic situation.
On the other hand the structural cracking of the capitalist economy caused by the scientific and technical revolution had already led at the end of the 60s and especially at the beginning of the 70s to a marked acceleration of the squeezing of labour out of production. Unemployment reached particularly high levels during the cyclic crisis of 1974-5, but continued at a very high level in 1976 and 1977, and in some countries even increased, because of the close connection of today's unemployment with the contradictions of capitalist exploitation of scientific and technical progress.
Exploitation of the advances of science and engineering in the interests of monopoly capital also exacerbated the structural crises (ecological, raw material, fuel, etc.), which complicated the picture of the 70s even further.
The evolution of the crisis went hand iu hand with a sharpening of the class struggle; ruling circles in capitalist countries were forced to resort to social manoeuvres and reforms to try and weaken the pressure of the democratic forces and reduce the acuteuess of socio-economic contradictions. At the same time there was an increase in the activity of right-wing and leftist extremists to push Western society onto the road of authoritarian solutions and rejection of democracy.
11In these circumstances the struggle of the working class and democratic forces to defend the working people's interests is becoming particularly important. The progressive political organisations of capitalist countries, trade unions, and other mass organisations are fighting the monopolies' attempts to shift the weight of the crisis onto the workers' shoulders. They are fighting the activity of the state monopoly machine that is sharpening the socio-economic contradictions of capitalism, and are proposing a democratic road to save society from the mounting danger of what Marx called in 1864 'the social pest called a commercial and industrial = crisis'.^^1^^
In the struggle for a democratic way out of the crisis that is developing throughout the capitalist world, a scientific analysis of the nature and consequences of this crisis has a not unimportant role to play. Studies of problems of the crisis of the 70s have been published in recent years in the Soviet Union, the German Democratic Republic, Italy, France, and other = countries.^^2^^
The complexity and new features of this crisis gave rise to a number of discussions among Marxists, many of which have been reported in World Marxist Review and other = periodicals.^^3^^ In this book special attention will be paid to bringing out the special character of the 70s crisis as a crisis of capitalism, and its social consequences, and on describing the struggle being waged by the democratic forces of the West in defence of the working people's interests, democracy, peace, and socialism.
_-_-_~^^1^^ Karl Marx. Inaugural Address of the Working Men's Tutornational Association. Karl Marx and Frederick Engcls, Selected Works, Vol. 2 (Progress Publishers, Moscow), 1977, p 15.
~^^2^^ See in particular such works as Uglublenie obshchego crizisa kapitalisma (The Deepening of the General Crisis of Capitalism), IMEMO AN SSSR, Moscow, 1976; E. Poggio, La Crisi economics italiana (Milan, 1976); L'Imperialisme franfais aujourd'hui ( Editions sociales, Paris, 1977).
~^^3^^ See in particular: World Marxist Review, 1976, 19, 2 and 3; 1977, 20, 1, 2, 4, 5, 6, and 9; = Mirovai/a ekonomika i mezhdunarodnijc otnoshentya, 1977, Nos. 1, 2, 3, 5, 6, 9, etc.
[12] __NUMERIC_LVL1__ PART I __ALPHA_LVL1__ WHAT IS THE CRISIS OF CAPITALISM TODAY? __ALPHA_LVL2__ [introduction]At the turn of the 1960s and 1970s the new trends and processes developing deep in the capitalist world evoked wide discussion among Marxist economists in various countries. While unanimously noting that the acceleration of economic growth of capitalist countries during the early 60s had led to a sharpening of the profound contradictions of capitalism and that state monopoly capitalism was proving incapable of controlling the spontaneous forces of the market, they disagreed in their concrete evaluations of the new period of marked intensification of the economic and political instability of capitalist society.
At the international Marxist discussion on new features of state monopoly capitalism and the class struggle in developed capitalist countries, held in the autumn of 1972, in which representatives of 35 Communist and Workers' Parties took part, various descriptions of the crisis of the 1970s were put forward.»In the view of some it was a cyclic crisis, though not a"simple one. Others characterised it as a deep, diverse structural crisis of the system of state monopoly = capitalism.^^1^^ One of the speakers remarked:
Can we say that we are witnessing a qualitatively new phenomenon in the whole history of capitalism, one unprecedented in its all-emhracing scope? Evidently we = can.^^2^^
The years since have confirmed that a whole aggregate of economic and socio-political crises is characteristic of modern capitalism.
The facts indicate that the crisis of the 1970s was _-_-_
~^^1^^ See: Imperialism in the Seventies: Deepening Crisis of the System. World Marxist Review (British edition), 1973, 16, 2: 3-12.
~^^2^^ Ibid., p 5.
13 a complex, many-sided affair, in which at least threti main, very different, complicated processes merged together.It was a matter, first of all, of a cyclic crisis of the capitalist economy that broke the quite long boom phase in 1974-5 and threw the capitalist world back. Underlying the cyclic crisis were capitalism's traditional contradictions and its domination by private ownership of the means of production, anarchy of production, and competition. But this cyclic crisis had a number of specific features associated with the high level of state monopoly control of the capitalist economy, the developing scientific and technical revolution, and the tension of the class battles in capitalist countries.
The economic structural crises that constituted the 'second level' of the 70s crisis also had an essential effect on both the content and the forms of expression of the cyclic crisis. The most important of these structural crises were the crisis of the monetary and financial system, upheavals in the fuel and energy sphere, in the supply of food and raw materials, the ecological crisis, and the urban crisis and the crisis of state monopoly control of the economy.
These crises affected important elements of the general economic structure of capitalist countries. Their effect, as a rule, went far beyond the limits of the economic cycle of the 70s. Some of them, e.g. the monetary and financial crisis, had begun several decades earlier; others (the energy and urban crises) had arisen in the mid-60s. 13ut in the 70s all these chronic ailments of the capitalist economy were suddenly aggravated.
The interaction of the cyclic and structural crises was very complex and contradictory. On the one hand their coincidence in time intensified the general fall in industrial production, sharpened the contradictions of capitalist accumulation, and made for a dragging on of the crisis. On the other hand, however, the separate phenomena associated with the structural crises, for example the need to develop new energy facilities in connection with the lack of traditional sources of power, or the need for extra outlays to create a new technology enabling industrial wastes to be utilised, operated as factors 14 increasing the interplay of forces in different industries, regions, and countries.
Finally, the 'third level' of the 70s crisis, though also linked with the foregoing, but having its own independent significance, was the ideological and political crisis of capitalism. It is the biggest such crisis of bourgeois society since World War 11 (1939--1945) and is manifested in an extreme sharpening of the class struggle, general weakening of the political and ideological position of the bourgeoisie, and a decline in the influence of its state and social institutions.
The coming together of these crisis processes in one nexus both in the sphere of production and in the field of social policy, ideology, and morality, and in the whole system of intergovernmental capitalist relations, was generated by deep-lying objective factors. (1) The qualitatively new international situation, characterised by the growth of world socialism, by the new balance of power between socialism and imperialism and between capitalist and developing countries, by the deepening of detente and extension of co-operation between the states of the two systems, by a sharpening of interimperialist contradictions, and by the powerful upsurge of the working-class and national liberation movements, had a big effect on the crisis. (2) The complex character of the 70s economic crisis, and the meshing together in it of the cyclic and structural crises, were largely associated with the modification and deepening of capitalism's main contradiction, viz., the contradiction between the social character of production and the private form of appropriation of its results. The further socialisation of production linked with the development of monopolies, state monopoly capitalism, and the scientific and technical revolution, given maintenance of private capitalist appropriation, immensely sharpened all the contradictions of capitalism, and intensified the conflict of opposing class interests.
The cyclic, structural economic, and socio-political crises did not simply coincide in time. Qualitative shifts in the development of the general crisis of capitalism were manifested in their coming together, which gave the 70s crisis an unprecedentedly complex character.
15The general crisis of capitalism, which began during World War I (1914--1918) and the Great October Socialist Revolution of 1917, consists in the dying of capitalism and its replacement by a new, socialist mode of production. As socialism develops and the balance of power between the two socio-economic systems changes, the general crisis of capitalism passes through various stages. In the first stage socialism existed in fact in one country only. In the second stage, in the years after World War II, a world system of socialism took shape. In the middle of the 1950s peaceful social development began more and more to be determined by the co-operation of the socialist countries, and by the degree of development of the international working-class and national liberation movements, and a third stage of the general crisis of capitalism began.
The crisis of the 1970s marks a further development of the general crisis of capitalism, a considerable deepening of it, and a further undermining of the capitalist system's foundations.
[16] __QUESTION__ Move "1" to separate object? __NUMERIC_LVL2__ 1 __ALPHA_LVL2__ The Overproduction Crisis of the 1970s.The present economic crisis of capitalist society marks the 150th anniversary of the explosion of the first general cyclic crisis in history that rocked England, 'the workshop of the world', in 1825.
From 1857 onward capitalist crises took on a world character and began to affect several developed capitalist countries, and sometimes all of them.
In the first half of the nineteenth century crises occurred periodically over a more or less definite interval, which became shorter as capitalism developed. At first they were separated by a period of ten or eleven years (the crises of 1825, 1836, 1847, 1857). In the second half of the century overproduction crises became more frequent and began to occur every seven to nine years (the crisis of 1857 was followed by those of 1866, 1873, 1882, and 1890). In the era of imperialism crises have tended to become even more frequent; before World War I there were those of 1900 and 1907; in the period between the wars there were the crises of 1920--21, 1929--33, and 1937-8, i.e. three in less than 25 = years.^^1^^
The theory of economic crises developed by Karl Marx above all established their inevitability within the _-_-_
~^^1^^ The leasons for, and course ol, the economic crises of capitalism in the nineteenth and twentieth centuries have been analysed, in particular, in the monographs of the Soviet economist L. A. Mendelssohn, Thi-on/ and Jliston/ oj Economic Crises and Cycles, Vol. 1, Moscow, 1950; Vol. 2, Moscow, 1959; Vol. 3, Moscow, 1964; Political Economy, Vol. 1, The Capitalist Mode oj 1> reduction, Moscow, 1977 (all in Russian).
__PRINTERS_P_17_COMMENT__ 2-0372 17 capitalist mode of production, since they were a consequence of the root contradictions of capitalism, especially of its main contradiction, viz., that between the social character of production and the private capitalist form of appropriation. This contradiction reflects the main features of the capitalist mode of production, the existence of two antagonistic classes in bourgeois society, viz., the bourgeoisie, owners of the means of production, and the proletariat exploited by them, whose sole possession is its labour power.The main contradiction of capitalism determines all the class contradictions of bourgeois society and manifests itself in the antagonism between the proletariat and the bourgeoisie and in the contradiction between production and consumption.
The pursuit of profit, which underlies the tendency to expand production constantly, is inherent in capitalism. But the pursuit of profit itself, and capitalists' drive to increase surplus value to the maximum, and the whole system of capitalist exploitation limit the consumption of the masses.
The anarchy of the capitalist economy is also an expression of the contradiction between the social character of production and capitalist appropriation. The constant disturbance of the proportions needed for a smooth course of reproduction, the contradictions of the accumulation of capital, and the class antagonisms all intensify the chaotic character of social production to the extreme in spite of the rising level of organisation of production within individual enterprises.
The contradictions between the social character of production and the private capitalist form of appropriation in capitalist society make crises inevitable because the goal of capitalist production is in irreconcilable contradiction with development of the productive forces. The capitalist system does not provide the productive forces scope for continuous, harmonious development in the interests of society as a whole, as Frederick Engels remarked in 1880:
The necessity of this transformation into capital of the moans of production and subsistence stands like a ghost between them and the workers. It alone prevents the coming 18 together of the material and personal levers of production; it alone forbids the means of production to function, the workers to work and = live.^^1^^
Under capitalism a crisis disrupts the process of production, which is expressed in massive overproduction of commodities compared with the market's capacity to absorb them. But it is only a matter of relative overproduction; and it is precisely because it is relative, i.e., represents a surplus of commodities only in relation to the limited purchasing power of the workers, that it is first felt in the sphere of circulation. Overproduction is signalled by a slowing down of commodity turnover and an accumulation of stocks not finding an outlet. A crisis then breaks out in its most general form of a rupture of the acts of purchase and sale.
The slowing down of the turnover of capital in the sphere of circulation, the difficulties in selling and accumulation of stocks disturb the whole course of social production. The marketing difficulties inevitably lead to a cut-back of production and the dismissal of workers, to inactivity and freezing of fixed capital, i.e. to a farreaching disturbance of the whole process of capitalist reproduction.
__ALPHA_LVL3__ CHANGES IN THE EVOLUTION OF ECONOMIC CRISES IN THEAt the end of the nineteenth century and beginning of the twentieth, with the transition of capitalism to the monopoly stage, the thesis that the rise and development of monopoly would lead to the elimination of crises became common in bourgeois and reformist economic literature. The bourgeois economist Lujo Brentano and the right-opportunist ideologist Eduard Bernstein wrote that the consequence of overproduction, 'the crisis in marketing, would be overcome, like overproduction itself, through the activity of = monopolies'^^2^^ and that cartels _-_-_
~^^1^^ Frederick Engels. Socialism: Utopian and Scientific. In: Karl Marx and Frederick Engels, Selected Works, Vol.~3 ( Progre ress Publishers, Moscow, 1977), p 143.
~^^2^^ See: Lujo Brentano. Ueber die Ur/achen der heutigen socialen Noth (Verlag von Duncker und Humblot, Leipzig, 1889), p 26.
19 would eliminate the `purely economic causes of = crises'.^^1^^Lenin gave a sharp rebuff to these falsifications in 1901, when analysing the reasons for and character of the crisis of 1900.
The crisis sliows how near-sighted were those socialists (who call themselves 'Critics', probably because they borrow uncritically the doctrines of the bourgeois economists) svho two years ago loudly proclaimed that crashes were becoming less and less = probable.^^2^^
The growth of monopoly leads to an intensifying of the anarchy of production and a deepening of crises. The transition from free competition to the dominance of monopolies causes certain changes in the course of crises: the forms, sequence, and character of the separate crises are altered, hut they remain an inevitable component of the capitalist system. As Lenin said:
The statement that cartels can abolish crises is a fable spread by bourgeois economists who at all costs desire to place capitalism in a favourable light. On the contrary, the monopoly created in certain branches of industry increases and intensifies the anarchy inherent in capitalist production as a = whole.^^3^^
In the imperialist era the disruptive power of crises increased. The crisis of 1929--33, which is called the Great Depression even in bourgeois literature, is clear evidence of this = pattern.^^4^^
Another important feature of the crises of our time is the intensification of their international character. Their nature and special features cannot be understood without taking the conditions of world development into account.
A third feature of crises that is important in the _-_-_
~^^1^^ Eduard Bernstein. Die Viirammetzuiigen den Sozialisniux und die Aujgaben der Socialdemokratie (Diet/, Verlag, Stuttgart, 1899). p 82.
~^^2^^ V. I. Lenin. TliO Lessons of the Crisis. Collected Works, Vol. 5 (Progress Publishers, Moscow, '1961), p 92.
~^^3^^ V. 1. Lenin. Imperialism- the Highest Stage of Capitalism. Collected Works, Vol. 22. p 208.
~^^4^^ See in particular Philip A. Klein. Jin.\iness Cycles in the Postwar World (American Enterprise Institute for Public Policy Research, Washington, 1976), pp 2-4; = and L. A. Mendelssohn. Op. cit., Vol. 1, p 204; Vol. 3, p 499.
20 period of monopoly domination, finally, is the complexity of their concrete forms and symptoms. General cyclic overproduction crises are more and more often accompanied with additional, intermediate ones. Structural crises that affect one sector or sphere or another of the capitalist economy are acquiring an immense role.All these features are due to the objective development of the productive forces in the new conditions, in particular to the scientific and technical revolution and the system of state monopoly control of the economy aimed at affecting the trade cycle and softening the impact of overproduction crises. A tendency for the structure and mechanisms of business cycles to become more complicated has been particularly noticeable since World War II, in the second and third stages of the general crisis of capitalism.
__ALPHA_LVL3__ NEW FEATURES OF THE CAPITALIST ECONOMY IN THE 1960s AND 1970sThe world historical achievements of the USSR, the rise in the political, economic, and military power of the world socialist system, the collapse of colonial regimes, and the scope of the working-class movement have all had a mounting effect on social progress throughout the world.
In striving to maintain their position the monopolies are endeavouring to adapt themselves to present-day conditions. Because of the historical antagonism of the two systems, capitalism is being forced, as the socialist community develops, to take steps that contradict its own nature and essence. Marxists see in that the main difference not only between modern imperialism and the old, classical capitalism but also between it and the imperialism of the beginning of the = century.^^1^^ This adaptation in no way, of course, means a change in the essence of imperialism. The nature of imperialism also puts limits to its possible adaptation. Capitalism remains capitalism in its imperialist stage.
_-_-_~^^1^^ See: N. N . I no/.emlscv . Sorreiiieiini/ kii/iiltilizin: nnrii/e i/iirli'iiii/a i /irutirorecl.'ii/a (Modern Capitalism: New Phenomena and Contradictions), Moscow, 1972, p 26.
21The change in the conditions in which the system of imperialism exists and operates is laying a deep impress on all the processes taking place in capitalist countries, including the mechanism of the business cycle and economic crises. An important effect in altering the cycle is exerted, in particular, by such factors as the quickening of industrial growth rates in a number of countries linked with the scientific and technical revolution, the spread of monopolisation of the capitalist economy, the merging of the monopolies and the state and the conversion of monopoly capitalism into state monopoly capitalism, and the rapidly developing internationalisation of production and capital.
Lenin had already noted in 1916 that~
it is undialcctical, unscientific and theoretically wrong to regard the course of world history as smooth and always in a forward direction, without occasional gigantic leaps = back.^^1^^
The evolution of modern capitalism's economic potential has proved Lenin right.
Modern capitalism, disposing of a highly organised industrial apparatus, great natural resources, and reserves of skilled labour, still retains certain possibilities of economic growth. Suffice it to recall the very intensive and protracted phase (in terms of the past 50 years) of the cyclic boom of the 1960s, when the mean annual growth rate of industry in the USA alone was approximately 8 per cent for a short time (1962-6). In 1974 the United States' gross national product was nearly four times that of 1939, and the volume of industrial production six times. Over the period 1950 to 1975 the industrial production of capitalist countries rose by 210 per cent (generation of electricity by 510 per cent, output of machine tools by 930 per cent and of plastics by 2600 per = cent).^^2^^ This expansion was linked primarily with the developing scientific and technical revolution.
The development of the complex 'science-- engineering-industry', the 'industrialisation' of science itself, and the _-_-_
~^^1^^ V. I. Lenin. The Junius Pamphlet. Collected Works, Vol. 22, p 310.
~^^2^^ U. N. Monthly Bulletin <>/ Statistics, 1977, 5; 22--99.
22 `scientisation' of production, and the revolutionary changes being brought about in the instruments and objects of labour are creating an intensive demand for means of production that is encouraging expansion of the home market. An example is the intensive introduction of computers and the rapid growth in the total number of them in use. In the first years after World War II the number of computers was counted in units, but by 1971 there were already around 95 000 in the capitalist world. Another reason for expansion of the home market in several capitalist countries was the growth of personal consumption observed over a number of years, which was largely due to the consequences of the rise in wages, especially in the period of comparatively favourable conditions.A third source is the vast growth of government consumption, primarily associated with militarisation of the economy and the arms race. The official figures of the growth of military spending are indicative. In 1937 military spending per capita in the leading capitalist countries taken together was $25 ($58.80 in fascist Germany); in 1972 per capita expenditure was already $399 in the USA, $121 in France, $124 in the Federal Republic of Germany, $125 in Great Britain, and $90 in Canada. In 1977 an average of $169 was being spent on military purposes for each inhabitant of the European members of NATO. The absolute figures for NATO countries' direct military spending increased from $18.7 billion in 1949 to' $125.2 billion in 1973 and $165.3 billion in = 1977.^^1^^
The sectoral structure and economic proportions of the economy have been altered in developed capitalist countries under the impact of the scientific and technical revolution and other factor?. Many new industries with a promising future ensuring high technical equipping of all spheres of the economy have been greatly developed. The significance of the non-productive sphere has markedly increased and its weight in the gross national product exceeds that of industry in some countries. _-_-_
~^^1^^ L. M. Gromov and R. A. Karamazyan. Voennai/a ekonomika sovremennogo kapitalisma (The Military Economy of Modern Capitalism), Moscow, 1975, p 119; Pravda, 11 December 1977.
23 In the USA, for example, more than 40 per cent of all jobs were concentrated in the non-productive sphere in the mid-70s (in 1950 less than 30 per = cent).^^1^^These structural shifts in the capitalist economy characteristic of the postwar years in no way eliminated its instability. On the contrary, even in favourable market conditions capitalism exhibited an incapacity to use the productive forces to the full, and resorted to squandering a vast part of its productive resources. Many of the factors quickening growth rapidly exhausted their stimulating effect and began to be important causes intensifying modern capitalism's crisis processes.
A very notable change in present-day capitalism's development is the marked increase in the degree of monopolisation. At the beginning of the century monopolies held the key positions in only a few industries in several developed countries; since then they have developed more widely and deeply and have become the decisive force in all spheres of world capitalist economy.
We must note, above all, the increase in the scale of monopoly enterprises. At the beginning of the century firms employing more than 50 persons were considered big in Germany and the USA; now big enterprises are those employing more than 10000 persons. There has also been a steep growth in the number of monopolies with assets of a billion dollars or more. At the beginning of the century there was only one such company—United States Steel; at the beginning of the 1950s there were four—three American (Standard Oil of New Jersey, General Motors, and US Steel) and one Anglo-Dutch (Royal Dutch/Shell). In 1963 the number of billionaire companies had reached 57, arid in 1974 was already 344. Soviet economists estimate that these 344 monopolies, which constitute a tiny fraction of the number of capitalist companies (only 0.002 per cent), have concentrated a gigantic production apparatus in their hands—roughly two-thirds of all the labour force and around 70 per cent of the assets and profits. General Motors alone employs more than 734000 persons in 130 factories, _-_-_
~^^1^^ A. I. Shapiro. The USA in the Spectrum of the Contradictious- of the General Crisis of Capitalism. SShA. Ekorwmika, politika, ideologii/a, 1976, 7, 1 (73): 17.
24 and its annual sales of goods and services exceed $33 billion, which is much more than the gross national product of capitalist counlries like Australia, Denmark, and Norway.^^1^^The sphere of monopoly dominance is expanding, and now prevails not only in heavy industry but also in light industry, transport, and commerce. Monopoly capita] is also penetrating more and more into agriculture. Monopolies operating in the food industry, like Unilever, the Anglo-Dutch trust (margarine) and Nestle (in the dairy industry), and those in light industry like Procter and Gamble and Reynolds Tobacco, whose assets exceed $3 billion, arc well-known. Particularly big changes have taken place in recent years in retail trade. Supermarkets and other forms of big shop are playing the main role in the USA, Japan, and many West European countries.
Faster growth rates have been characteristic of the monopolisation process in recent years. The number of mergers arid takeovers has increased more than tenfold. An example is the steel industry in West Germany, France, Italy, and Belgium, in which two or three monopolistic groups only have a decisive position as a result of mergers. Ten big monopolies control more than half the total output of the capitalist world's chemical industry. The five biggest electrical engineering monopolies alone produce two-thirds of the capitalist world's electrical equipment. And one monopoly, the American International Business Machines (IBM), produces more than 70 per cent of the computers made in the capitalist world.
Under the impact of the structural shifts in capitalist countries' economies, technical progress, and militarisation considerable changes have taken place in the balance of power between the separate monopolies. Estimates for 100 French industrial monopolies indicate a considerable strengthening of those operating primarily in the newest sectors of the chemical and oil and _-_-_
~^^1^^ See: Mli'ornijti t'koninniku I niczlnluinirodniii' otno^ii'iiiijti^ I97(>. i'O. 3: IVi-1,>7; = Fortune. MKi'i, 7: ISO 11(5; 8:151M 55; 1975, 5: 210-- 229; 8: 15(i-l(i1; = Business Week, 18.8, I975: 53--72; = Moody's Industrial Manual. 1975, 1:2.
25 gas industries, radioelectronics, the aerospace industry, and atomic power engineering.Substantial changes have also occurred in the forms of concentration and centralisation of capital and of monopoly firms. The complication of the technological interconnections of the separate sectors is raising the significance of combination. At the same time, however, the process of diversification is becoming more intense and monopolies are including facilities in their structure that have no technological relation to their main operations.
Computers are being widely used in the powerful production complexes of the giant monopolies, and internal management and planning are being perfected, which is encouraging growth of productivity, lowering of production costs, and improvement of the quality of output. In trying to avoid the overproduction that was inherent in capitalism before World War II, the monopolies are giving priority attention to studying the market and market trends, and are developing their investment and production programmes in accordance with demand.
The mechanism of the business cycle has undergone certain modifications in the years since World War II under the impact, as well, of the increasing merging of monopolies and the stale. Under the general crisis of capitalism, especially in its present stage, the growing of monopoly capitalism into state monopoly capitalism is acquiring several new features and is increasing in pace, mainly through the influence of the struggle of the two world systems and the class struggle within capitalist countries. State monopoly capitalism has become the main form of capitalism's adaptation to the new circumstances. The intensification of the economic need for a merging of the monopolies and the state is due to the further deepening of the main contradiction of the capitalist mode of production. State monopoly control is the palliative by which capitalist society is trying to weaken its contradictions.
The current scientific arid technical revolution is playing an immense role in speeding up development of state monopoly capitalism. A single mechanism of the 26 monopolies and the state is becoming a sine qua non of this revolution's further development.
State monopoly capitalism functions as an instrument ensuring high profits for the monopolistic rulers of society through increased exploitation of the working class, peasantry, intelligentsia, and of the peoples of developing countries.
The forms of state monopoly capitalism with probably the greatest effect on the business cycle are public financing through the national budget, the state's activity as entrepreneur, and economic programming. At the beginning of the century the proportion of the budget to the national income was relatively small; now, in the United States, Great Britain, Japan, the Federal Republic of Germany, Italy, and several other countries, the budget absorbs between 30 and 55 per cent of the national income. The weight of taxation has risen steeply. The workers in capitalist countries are being forced to pay up to 40 per cent of their earnings in direct and indirect taxes.
In the early 1970s roughly one-third of the annual increment of the gross national product of the United States went into the federal, state, and local = budgets.^^1^^ These financial resources are a powerful lever of the US state monopoly system. The public sector in investment is also rising. In France, for example, more than 30 per cent of all investment is made by the government as against 5 per cent before the = war.^^2^^
The government exerts a certain influence on demand through the system of orders and through various payments to the public (pensions, grants, and so on). State control over prices and government regulation of credit terms are also of no little importance. Their effect is comparatively high, however, only in the public sector, the activity of which has noticeably increased in most _-_-_
~^^1^^ Cited From SSliA'. gusudarstro i ekunomika. Mekhanism gosudarsti>eiin<>-mf>nupolisticht;skog<> rcgitliroi-a/iii/a ckonorniki (The USA: The State and the Economy. The Machinery of State Monopoly Control of the Economy), Nanka Publishers, Moscow, 1976, p 175.
~^^2^^ L'Imperialisms fra/n'ais aujourd'hui, (Paris, 1977), p 13; Gosudarstvenno-monopolistichesky /capitalism (State Monopoly Capitalism), Nauka Publishers, MOSCOW, 1973, p 425.
27 capitalist countries in recent years. National and mixed enterprises are important in the fuel and power industries, some sectors of engineering and the chemical industry, transport, and hanking and credit.Government involvement in financial and economic control and the development of a public sector have encouraged the institution of systems of programming the capitalist economy. The economic programmes are being developed in circumstances of the dominance of private ownership of the means of production, by virtue of which they have an indicative (or recommending) character and their indicators are not binding on capitalist firms.
Capitalist programming has had a certain success, but it cannot do away with the unevenness of economic development, imbalances between sectors, and competition between firms. While it enables certain elements of planning to be introduced into spontaneously developing industry, on the one hand, the role of these elements is limited, on the other hand, by the very nature of capitalist production.
Changes are being brought about in individual features of capitalism through the development of state monopoly capitalism, especially as regards the growing internationalisation of industry and capital.
Factors like the international division of labour, and various world connections (commercial, scientific and technical, patent and licencing, engineering consultancy, and so on) based on it, have played a much bigger role in the development of capitalism since the war, and especially in the past 15 or 20 years, than they used to do.
In the 1960s 1he mean annual growth rates of the physical volume of commodity exports of a number of capitalist countries, including the United States, were half as fast again as the growth of national income. As a result, the weight of foreign trade in these countries' economic activity increased.
The export of capital grew enormously and became a most important weapon in the struggle for economic redivision of the capitalist world and a means both of ncocolonialist policy in relation to developing countries and of putting pressure on the policies of economically 28 developed countries. The balance of power among countries exporting capital altered (see Table 1).
In the middle of the 1970s the 'club' of capital exporters was joined by several developing oil-exporting countries.
Table I. Growth of the Overseas Investments nj lli.e Main Exporters oj Capital
(in billions of US dollars at current, prices)
Country li)i;i-'i I'.l.'iS ,,/,:, ISMiO li)72 All exporters of capital 44 53 51 123 345 United Stales 3.5 12.0 1C. 8 06.4 180.9 Great Britain 18.0 23.0 14.0 22.5 56.0 West Germany = 5.81 = l.O1 4.0 2:1.0 France !).() 4.0 6.0 5.2 23.6 Japan 2.0 6.8 Others 7.7 13.0 13.2 24.0 48.7 1 All GermanySources: Leninshnifa teurii/n inii'Crinlizmn i sooremennost (Lenin's Theory of Imperialism and Today), Nauka Publishers, Moscow 11)77, p 1^1; T,. Lewis. Dehlor and Creditor Countries: 1<J3K, 1944 (Tho lii-ookiiiKs Institution, Washington), 1945, pp .)0-!)ll; the national statistics of the capital exporting countries.
The present period is marked by a substantial change in the main directions of capital exports. The chief change is the conversion of industrial capitalist countries into an important sphere of investment. Some 70 per cent of all direct foreign investment is now in them. Underlying this change are such phenomena as the breakdown of imperialism's colonial system, growing interimperialist contradictions, and the major shifts brought about by the scientific and technological revolution. Developing countries, however, remain an important source of enrichment for capitalist monopolies.
A clear sign of the growing internalionalisation of capitalist business is the great development of the manysided process of imperialist integration since World War II, which lias taken two main forms, namely, state 29 monopoly integration and private monopoly integration, which are closely interconnected.
The integration of countries, as the example of the European Economic Community (EEC) indicates, can have a stimulating effect on the economic situation and the course of capitalist accumulation at a certain stage. At the same time the integrated groupings do not alter the capitalist economy's inner laws of capitalist economic development, the anarchy of production on the scale of society as a whole, capitalist competition, or interimperialist contradictions. That fully applies also to international monopolies.
Under modern state monopoly capitalism the growth of international monopolies is acquiring a hitherto unprecedented scale. In fact, all the world's biggest monopolies have an international character to one degree or another. They create their own raw material bases in dozens of countries, carry on research and development, and organise the production of goods of one kind or another, adapting it to the conditions of the local market.
The growing internationalisation of economic affairs has given rise, in addition to the factors listed above, to changes in the mechanism of the capitalist trade cycle.
__ALPHA_LVL3__ EVOLUTION OF THE TRADE CYCLEThere have been substantial shifts in the cyclic development of capitalism since World War II. The boom phase has become rather longer and more intensive. The main point, however, is that the postwar crises have been less deep, until that of the 1970s, than between the wars. In many cases the crisis showed itself not in an absolute reduction of the annual volume of production but only in the volume of output for a quarter or a month, and sometimes only in a steep fall in growth rates. In the postwar years, until the crisis of the mid-70s, the fall in annual production was not more than 7 per cent in any one capitalist country (see Table 2).
After World War II, until the crisis of the mid-70s, there was almost no synchronousness of the cycle in the various capitalist countries. In most cases the recession phase in the United States did not coincide with that 30
Table 2. Change in Annual Industrial Production from the Pre-crisis High during the Crises of the 1940s to 19611s
(in percentages)
Knd of the Country End of the, 1 940s-early 1950s (mainly Mid-1960s End of the 1960s 1 95(>s 1957-8) United — 7.0 -6.9 + 1.2 -4.1 States (1948-9) (1957-8) (1966-7) (1969--71) Great Bri-- -2.6 — 1.2 0.0 -0.8 tain (1950--51) (1957-8) (1966-7) (1969--71) France + 1.0 + 1.3 + 1.8 +5.3 (1951-2) (1958-9) (1964-5) (1970--71) West Ger-- +6.0 +2.8 — 1.7 + 1.6 many (1950--51) (1957-8) (1966-7) (1970--71) Japan +8.0 0.0 +3.4 +4.9 (1953-4) (1957-8) (1964-5) (1970--71)Sources: Calculated from The Economic Report of the President, 197-3 (Washington, 1973); OECD. Historical Statistics, 1959--1969 (OECD, Paris, 1969); U. N. Monthly Bulletin of Statistics January issues for 1956--1960; Ibid., 1974, 1; 1975 11; 24; S. M. Mensliikov. Sovremennyi hapitnlizm (Modern Capitalism), Mysl Publishers, Moscow, 1974, pp 140--141.
in Western European countries or Japan. Even in 1957-8 only a standstill in growth was observed, while production rose in West Germany and France, although less than the average for the preceding years. Despite certain modifications of the trade cycle after the war, the pattern of its development continued to hold. Economic instability and waste of productive resources acquired a gigantic scale. General overproduction crises sometimes manifested themselves in partial crises affecting separate industries and economic regions.Finally, we must not forget that crises were more frequent after the war in many countries, primarily in the United States. In the sixty years beginning 1857 there were seven general overproduction crises in the United States, for example, i.e. at an average interval of 8| years. In the 27 years from 1913 to 1940 there were five crises, i.e. one every 5| years on average. And in the 27 years after World War II a crisis occurred every 4~1/2 years.
31The reality of the postwar decades, viz., repeated economic recessions and shocks, and more frequent crises, lime and again refuted Hie myth of capitalism's crisisfree development. But this became particularly evident in the 1970s.
From the early 70s the capitalist world began to experience market fluctuations unprecedented in the postwar years. Their beginning can be taken as the crisis of 1969--71, which developed in a number of countries (the United States, Italy, Canada, Sweden, Finland, Austria, etc.), but uot at the same time and not to the same degree. At the end of 1971 and beginning of 1972 there was a protracted recession in the United States that gave way to a revival and in the autumn of 1972 to a hoom. The boom phase occurred in most developed capitalist countries at the same time, but was shortlived. State monopoly 'injection' of funds made it possible for growth to continue still without surplus capacity, veiling for a time the mounting overaccumulation of capital. But this overaccumulation, which was accompanied with a reduction of utilised productive capacity, a growth of budget deficits, inflation, devaluation, a decline in the public's purchasing power, and a marked exacerbation of difiiculties on the world energy market, was the detonator that set oft a new crisis.
From March 1973 economic growth began 'grinding towards a stop' in the twenty biggest industrially developed countries, as The Economist (London) wrote with alarm in = November.^^1^^ In thefourth'quarter of 1973 industrial growth almost completely ceased in the United States. In Japan and West Germany it fell by 50 per cent compared with the beginning of the year, and in Great Britain there was an absolute fall in production of 1.8 per cent.
The slowdown in industrial output led to a decline in general economic growth rates. In the United Stales, for example, the increment of the gross national product, which had been 5.5 percent in the first half of 1973, fell by 63 per = cent.^^2^^
_-_-_~^^1^^ The Economist, 1973, 249, 6711(1: II.
~^^2^^ See: U. N. Monthly Bulletin i,j Sin Unties, 1!)74, 0: 23--33.
32In most capitalist countries the state of production continued to deteriorate during 1974. The economic committee of the Organisation for Economic Co-operation and Development (OECJJ) reported Ilia I 1974 would be marked by a further slowing, and in some cases by a complete discontinuation of economic growth, a retarding of home consumption, and a substantial deterioration of several financial and economic indicators in = Western countries.^^1^^
__ALPHA_LVL3__ THE SCOURGE OF CRISISFrom the second half of 1974 the capitalist world experienced shocks unprecedented in depth and force since the Great Depression of 1929--33. During 1974-5 the gross national product fell in almost all industrially developed capitalist countries. Industrial output declined steeply while unemployment reached levels unprecedented for the past forty years. The economic crisis was accompanied with a rise in prices, a cut-back in foreign trade, and increase in bankruptcies, a sharpening of interimperialist contradictions, and a growlh of class battles between labour and capital.
The depth and acuteness of the crisis proved so considerable as to evoke serious alarm among bourgeois governments, economists and ideologists about the future of capitalism. Speaking at the end of September 1974 at the first national economic conference of representatives of the Administration, Congress, business, and the trade unions held in the United States, President Ford remarked that the very future of the United States' political and economic institutions and, moreover, the whole American way of life, were literally at stake. In 1975 the Japanese Prime Minister Takeo Miki declared that Japan had never been faced with such a complicated and serious economic situation as then. President discard d'Estaing of France repeated much the same thing, remarking that no recession they had so far experienced had produced such deep changes involving global consequences.
_-_-_~^^1^^ See: Le Monde, 3/4 March 1974.
33The seriousness of the situation was confirmed by the holding of a conference of the leaders of the biggest capitalist powers at Uambouillet in France in November 1975 (the USA, Japan, the Federal Republic of Germany, France, Great Britain, and Italy). For the first time in history the sole subject discussed at a top-level meeting was economic problems, in particular the measures needed/to attenuate the depth of the crisis facing the capitalist world.
The years 1974-5 brought the gloomiest results in all the postwar history of capitalism. Because of the sharp deterioration in the conditions of reproduction the aggregate gross national product, of the developed capitalist countries fell by 1 per cent (in lixcd prices) in 1974, and by a further 3 per cent or so on 1974 during 1975, and as a result was thrown back more or less to the level of 1972 (see Table 3).
Table 3. Gross National Product of the Main Capilalixl
Countries (in billions of US dollars at 1(17.) prices)
C.oiinl ry Von r 11)72 1D7.; 1117/i 1117:. I'ecline in Iil7(i on ll)7/i (poi'i-cnla^e) United Stales 10!!4 .0 1155.7 1131 5 lu%. 4 = 5.21 .la])an KKG 22! 1.3 1'.)(.).6 252.6 210.2 248.0 211.0 251.2 203.2 -1.8' 4.0 France Hi l.'l 171.5 178.2 173.7 2.5 Great Britain I27.:i 134.7 135.2 132.1 2.3 Italy 97.1 103.4 100. 8 102.0 -4.5 C.anada <>2.7 !)().() 101.7 100.7 -1.0 All developed capitalist count vies 2111.3 2242.1 2231.5 21 71). 8 2.3 ( 3.'.) for the seven countries listed) i .l''all in l!)7.i front Iho = I!'?.1! ptv-ciixis liiL'.h. S')iu = re1.;: Ks t itn a los of I ho USS1! Academy of = Si1 loners ' 1 ns 1 i! n Ic of World Ke ono n lies and International Isolations and ui I tic USSli M in is i i y of I-'oi ciun Ti ado's Ma i Kol Kc.sca i ch I us lit.ulo. Sec also: = I.1. I\. MtiiU,ly Jiullctinrf ^lui i.- tlr^ 1977, 5: 193--199; A. C.iochikhin. Tlic Capitalist Kcoimrny in 11)7;). MiroTftiift ''hmioinihu i niczhiiinmrixhiifc otno^hcnit/n, 1H7(J, 20\ :i: 71; tthotwini<'lieKltntin tfdzetd, \^7\'i, 14. 34The crisis was an explosion of the contradictions of capitalist reproduction I hat had been accumulating over a long period. The renewal of fixed capital caused by the scientific and technological revolution, and slate monopoly spurring of the situation could not, eliminate the cyclic character of economic development, underlying which is the main contradiction of capitalism.
The deepening of the crisis was encouraged by the marked weakening of the operation of all the main market-forming factors, especially at the end of 1974 and during 1975, and in several countries also in the second half of 1976. Consumer demand fell drastically, undermined by the continuing rise in the cost of living and mass unemployment. No less important, too, was the cutback in investment in private companies caused in particular by the increase in marketing difficulties, chronic underuse of capacity, lack of certainty in the outlook for economic development, and ever increasing upheavals in Lhc field of credit and world monetary relations.
A factor aggravating the crisis was the inner contradiction of state monopoly control, which was expressed in a clash of contra-inflationary and contra-crisis measures. In trying to gel inflation under control bourgeois governments took steps to limit credit, raise laxes, and remove some financial resources from circulation, but this policy also led lo a further deterioration of the situation. The shifting of the centre of gravity to contracrisis measures in the second half of 1975 did not yield the desired results, because it went hand in hand with a further rise in prices and worsening of the workers' position through cuts in spending on social needs.
The serious disturbances of balance in the reproduction process were a reflection of a crisis in the whole system of state monopoly control of the economy, and were closely linked with the deep changes in international relations, especially in relations between capitalist arid socialist countries and between industrially developed capitalist countries and developing countries.
Among the most important features of the cyclic crisis of 1974-5 we must also include its depth, international scale, and universal affecting of almost all the main sectors of the capitalist world's economy.
35 __ALPHA_LVL3__ THE FALL IN PRODUCTIONDuring the eleven cyclic overproduction crises of the nineteenth century and early twentieth century (up to World War I), the annual fall in production did not, as a rule, exceed 1U per = cent.^^1^^ These crises seemed catastrophic to their contemporaries, hut they did not compare with the even deeper ones typical of the first stage of the general crisis of capitalism, especially that of the 1930s. In the United States, for example, the fall in industrial production was 22.7 per cent in 1920--21, and 21.6 per cent in 1937-8. During the Great Depression of 1929--33, however, American industrial production fell by 46.2 per cent, such being the relation between the maximum boom level in 1929 and the lowest level of the slump in 1932. In Germany this relation between the pre-crisis high and the low of the slump was 46.7 per cent, in France 31.6 per cent, in Great Britain 16.5 per cent, and in Japan 8.4 per cent. In the years since World War II, as we have already said, the decline in production did not, as a rule, exceed 7 per cent.
Now let us look at the picture of today's crisis (see Table 4).
The crisis of the mid-1970s substantially exceeded the indices of all those since World War II and of the nineteenth and early twentieth centuries. In intensity and depth of the slump in industrial production it reached the level of the crises of the first stage of the general crisis of capitalism in 1920--21 arid in 1937-8, and in some countries was even more severe than the Great Depression of 1929--33. This refers, moreover, to countries like Japan, the second industrial power of the capitalist world, and such small but highly developed countries as Sweden and Belgium. On average, however, taking the greater part of the capitalist world as the basis, the crisis of the 70s affected the economy about half as severly as that of 1929--33.
The absolute losses from the 1974-5 crisis either equalled the 'record' of the 1930s or came close to it. According to American estimates, the crisis losses of the United _-_-_
~^^1^^ L. A. Mendelssohn. Op. cit.; S. M. Menshikov. Op, cit.
36 Table 4, ('/inline in Industrial Production in Selected Cii/>ilnlist Countries in 1973--1976 (1070=.- KKl) Country Volume of Industrial Production 1973 1974 1975 l're-<:risis hinli Crisis low Percentage fall United 118 117 107 122 (Sept. '74) 101 (July '75) 17.2 States Japan 129 126 113 139 (March '74) 107 (May '75) 24.0 West Ger-- 113 112 103 123 (June '74) 91 (Aug. '75) 26.0 many Great ' Bri-- 110 106 102 113 (Nov. '74) 101 (June '75) 10.5 ( :n n France 120 123 113 132 (Feb. '74) 112 (May '75) 15.1 Italy 114 120 109 132 (July '74) 105 (May '75) 20.4 Canada 123 126 122 130 (July '74) 109 (July '75) 16.1 Belgium 116 121 108 134 (Oct. '74) 80 (July '75) 40.0 Netherlands 118 121 115 136 (Oct. '74) 108 (June '75) 20.0 Norway 115 122 128 137 (Nov. '74) 115 (May '75) 16.0 Sweden 111 118 115 132 (June '74) 55 (July '75) 58.0 Switzerland 110 111 98 115 (June '74) 90 (March '75) 21.6Sources: Cairn I a I cd from M. N. Mimllilij Ittillrlin of Statistics, 197'i, li; l'.)7.>, !); I'.I7:>, 11; H)7(i, 4: :>;!-.'!;!; I!I7«, 5: 23, .').'(.
States in the first half of 1975, for instance, were $100 billion in 1963 prices.The length of the recession was rather shorter than in the 1930s. The world economic crisis began in the second half of 1974 and reached its low in the middle of 1975. The slump in production lasted 15 months in France, 14 months in Japan and in the Federal Republic of Germany, 13 months in Canada and Sweden, ten months in the United States and Italy, nine months in Belgium and Switzerland, eight months in the Netherlands, seven months in Great Britain, and six months 37 in Norway. From the autumn of 11)75, and especially from early 1970, there was a tendency for industry to pick up, in particular in the United States.
In most capitalist countries the first half of 1976 was marked by moderate industrial growth rates. The revival of business, however, proved short-lived in many cases. In the second half of 1976 what Western economists called 'a pause' began, and then a new decline in production occurred in several countries. The depth of the new recession varied between 20 per cent in Italy and 1.5 per cent in = Sweden.^^1^^ In several countries there was only a reduction in growth rates. As the French economist Gilles Rasselet noted, the tendency for economic growth rates to slow down at the end of 1976 and beginning of 1977 was very strong.^^2^^
As a result, industrial production in several countries did not reach the maximum attained before the 1974-5 crisis either in 1970 or early 1977. In Great Britain, for instance, production was 7.8 per cent lower in 1976 than in 1973; in Japan the gap was around 2 per cent, and in West Germany around 1 per cent in January 1977.^^3^^
The main indicators for the general results of eco nomic activity for the group of developed capitalist countries as a whole were higher than the 1976 crisis level. Industrial production, for instance, was up 8 per cent on 1975. These indicators did not, however, yet mean a substantial advance compared with the procrisis maximum. The 1976 level of production was only 1.6 per cent higher than that of = 1974.^^4^^
All this was evidence of a very protracted restoration of the pre-crisis level, and of the unstable character of the depression and revival phase about which there was much talk in Western countries. The instability of the economic situation was also confirmed by the stagnation _-_-_
~^^1^^ In Italy ill August, 1!M> compared \\illi August 1975, in Sweden in 1!>7(> compared \\illi I97.>. See:! . X. Mmtlhli/ liulletin iif Sltilii-lirx. 11177. .i: = I!!!-.1!!.
~^^2^^ Gille's Rasselet. C.onjonclure dan? le Minndr capiUilislu. 1977: = une annee dil'licilc. l^rninniiir el /nililiijiif. I97(, Li/2: 89--97.
~^^3^^ U. N. Monthli/ Bulletin of Slntiflia;, ' l!)77. 5: 22-'M.
~^^4^^ Idem., 1977, 10: 22--31.
38 in investment in the material production sphere and the growth of mass unemployment in the second half of 1976 and during 1977.In the second half of the 1970s capitalism was overcharged with unresolved contradictions. It was not only a matter of its being impossible to consider the problem of the business cycle fully resolved (bearing in mind the length and instability of the period of depression and revival), but was also a case of deepening structural crises in the sphere of production and exchange (monetary, financial, energy, etc.). High rates of inflation persisted. Interimperialist contradictions intensified, and so did the disagreements between developed capitalist and developing countries.
The economic development of capitalist countries was extremely contradictory in both 1977 and 1978. Their total gross domestic product and volume of industrial production increased by 3.8 and 4.1 per cent respectively in 1977 compared with 1976, and continued to grow in 1978 as well, though at lower rates, but on the whole the dynamics of economic processes was = unstable.^^1^^
The economic situation in 1977-8 was marked by a growing disproportionateness in the most important spheres of capitalist reproduction and an increase in the unevenness of the development of individual countries and groups of countries. Such very important branches of industry as the iron and steel industry, several branches of the engineering industry (in particular shipbuilding) certain branches of the chemical industry, and many textile firms, etc., found themselves in a serious position at this time. The 1977 volume of iron and steel output in the capitalist world, for example, was 2.6 per cent below that of 1976. In Western Europe production of steel fell by 4.6 per cent, in Japan by 4.7 per cent, and in the United States by 2.6 per cent. The biggest drops occurred in Great Britain (8.5 per cent), the Federal Republic of Germany (8 per cent), and Belgium (6.6 per cent). The total production of steel at the beginning of _-_-_
~^^1^^ See: the Supplement. In Mirnrni/n ckoiioniika i mczhdunarodnye iitiiusltrnii/a (1978, 8), survey ing I he economic, situation of capitalist and developing countries in 1977 and the beginning of 1978 (page 4).
39 1978 was still 10 per cent below the pro-crisis level of 1973.^^1^^Production of machine tools, motor vehicles, many kinds of textiles, and other goods was also below the 1973 pre-crisis level in 1977 and 1978, and the order books of capitalist shipyards were the thinnest for the past ten = years.^^2^^
The features of the economic situation's development in 1969--71, 1974-5, and the turn of 1976/7 considered above allow us to suggest that we have here, in fact, a single cyclic crisis, the picture of which is greatly complicated by the effect of state monopoly control of the economy, the contradictory effect of the structural crises, the continuing scientific and technical revolution, and the immense upsurge of the class struggle in capitalist countries.
When we look at the long-term effect of the factors determining the specific features of the crisis of the 70s, we can suggest that the growth curve of the biggest capitalist powers' will creep slowly upward in 1979 and possibly in 1980.
The report of the European Economic Community published in November 1977 stressed the slow economic growth rates of the United States and several other Western countries. In that connection the world capitalist economy 'clearly lack(ed) dynamics', and it was suggested, moreover, that 1978 would not make any substantial = changes.^^3^^
OECD experts estimated that the growth rates of the gross domestic product of its 24 members would fall in the second half of 1978 by 3 per cent in yearly = terms.^^4^^
The protracted character of the economic difficulties is largely linked with the synchronisation of the crisis storms in the mid-70s, which essentially complicated recovery by shifting the burden of the crisis onto neighbours and partners.
_-_-_~^^1^^ Ibid., [i 411.
~^^2^^ Ibid., pp 50, 5lf[.
~^^3^^ See: Revue du Man-he Cummiin, 1977, 12.
~^^4^^ See: The Times, 17 November 1977.
40 __ALPHA_LVL3__ THE INTERNATIONAL CHARACTER OF THE CRISISA very characteristic feature of the 1970s crisis is the curtailment of monopolies' opportunities to manoeuvre at each other's expense with capital, orders, and markets, a curtailment associated with the synchronous character of the current cycle.
The crisis primarily affected the most developed capitalist countries. The U.S. economy suffered heavily. According to the American Marxist economist Victor Perlo, it was worse than all the crises that have hit capitalism in the United States and the world since the 1930s, and in some cases even more serious than the crisis of the 30s. The special depth and length of the 1970s crisis in the United States was due to the strong effect exerted on its maturing and development by inflation and the structural crises of the world capitalist system (in particular the monetary and financial, energy, and ecological crises).
The fall in production in 1973-5 in the United States had no parallel in American postwar history. The economy was thrown back to the level of early 1972. In some industries the fall in production was even deeper than during the 1929--33 crisis. Output of motor cars, for example, was down 30.5 per cent in 1975 compared with 1973, and gross housing starts fell by nearly = half.^^1^^ It was no accident that the highest level of unemployment was recorded in precisely those industries.
The crisis undermined the financial position of many firms. The decline in the flow of orders, dear credit, and fierce competition caused mass bankruptcy. The fall in production strongly affected the workers' financial position. A serious crisis struck the labour market. American business research economists estimated that the 'excess unemployment' projected by the Administration for the next five years would cost the U.S. economy from $320 billion to $350 = billion.^^2^^
In spite of the improvement in the situation in 1976-8 the main sectors of the U.S. economy thai determine _-_-_
~^^1^^ U. N. Monthly liiillctln of Slntittii-s, 1977, 5: <S7, 94.
~^^2^^ Cited by Hobarl Hcnven in the Washington Post, 5 May 1975.
41 its general state continued to suffer from the effects of the crisis. The process of renewing fixed capital was hampered by the considerable underutilisation of industrial capacity. The weak purchasing power of the public held back expansion of consumer production.The economy of Japan ran into serious difficulties in the 1970s. After relatively high growth rates, interrupted periodically by a slowing down (in 1961, 1965, 1968, 1971), there was a suhstantial absolute fall in industrial production in 1974 and 1975. Output of the mining industry, for example, was cut back by 21.5 per cent, production of steel by 13.9 per cent, and output of various branches of the textile industry by 25 to 30 per = cent.^^1^^
Japan was swept by inflation of unprecedented scale. Bankruptcies of small and medium-sized firms increased in number (12 606 during 1975 against 11 681 in 1974). Not only did small and middling firms crash but also big companies. In August 1975, for instance, the Kojin Company, engaged in the production of chemicals and in property deals, failed with liabilities of 150 billion yen. It was the biggest bankruptcy in Japan since World War II. A factor heightening the crisis was sales difficulties on world markets. The critical state of the economies of most of Japan's capitalist customers restricted exports, which are of immense importance for many sectors of the Japanese economy.
In the Federal Republic of Germany the crisis began in the second half of 1973. In 1974-5 it affected all sectors of the economy: industrial output fell, trade turnover and the volume of freights declined, and more and more companies went bankrupt. Productive capacity was used to only 75 per cent in 1975. The depth of the crisis was marked by a very substantial reduction in demand simultaneously on both the home and foreign markets. Investments declined. The steep fall in foreign demand had particularly serious consequences in view of the West German economy's great dependence on the state of world trade (22 to 24 per cent of its output is exported). Exports to the USA, for example, declined by 26 per _-_-_
~^^1^^ U. N. Monthly Bulletin of Statistics, 1977, 5: 32--60.
42 cent compared witli 1974. Only an expansion of trade with socialist and developing countries enabled the fall in exports to be halted. The improvement in the situation in 1976 was again succeeded in 1977 by a tendency for economic growtb to slow down. The growth rates of the gross national product fell by almost 60 per cent compared with 1976, which was the lowest increment in the wltole history of the Federal Republic, not counting years when production = fell.^^1^^ The 1970s finally dispelled the myth of the 'crisis-free' development of the West German economy and the 'West German miracle'.Industrial growth rates had already slowed down markedly in France at the end of 1973 and during 1974, but in 1975 there was an absolute fall in production that went hand in hand with a reduction of private investment and in foreign trade. Serious difficulties were experienced in the development of most industries. Consumption of power declined. Steelworks were operating at only 60 per cent of capacity. Output of steel fell by 20 per cent in 1975, i.e. to the level of 1968-9 (between 2! and 22 million = tonnes).^^2^^ Production and use of capacity fell in the motor car, chemical, and textile industries, and others. After a certain improvement of the economic situation in 1976, the position in France worsened again in the second half of 1977. The steep fall in the growth rates of production led to stagnation. This was due (as the spokesmen of the country's progressive forces noted) to the 'economy' policy of the ruling circles which had led to a reduction of consumer = demand.^^3^^
The crisis was especially long and deep in Great Britain. The British press unanimously reported that the country had experienced nothing like it since the 1930s.
Most economists described the position in Italy in much the same way. Industrial production fell steeply there in 1974-6, investment was substantially curtailed, the cost of living rose, and the employment position deteriorated.
Stagnation of business activity and a fall in production _-_-_
~^^1^^ U. N. Mont/ili/ Hulli'liii o{ SluUslics, l'J78, 4: ,'iO.
~^^2^^ Bulletin mensiicl dc stnlisliquc, 1970, 0: = 19--20.
^^3^^ Economic et politiquc, 1977, 272: 91.
43 also occurred in Spain, Sweden, and many other capitalist countries in 1974-6.The crisis also affected developing countries, where there was a steep fall in their industrial growth rates. The annual increment of industrial production fell from 9.G per cent in 1973 to 8.6 per cent in 1974, and to only 1 per cent in 1975.
__ALPHA_LVL3__ THE GENERAL CHARACTER OF THE CRISIS (ALL SECTORS OF THE ECONOMY)In the second half of the 70s, especially in 1977 and 1978, the differences in the growth rates of industrial production in Latin America increased steeply in the different countries. Difficulties arose in several of the extractive industries producing raw materials for developed capitalist countries.
In Chile the consequences of the anti-national economic policy of the military junta continued to be felt; the 1977 volume of industrial production was 25 per cent below that of 1972 and was even lower than in = 1969.^^1^^
A worsening of the position of almost all the main sectors of the capitalist economy was typical of the cyclic crisis of the 1970s, but industry was affected most of all.
The overproduction crisis did not miss a single industry. The manufacturing industries were primarily affected, especially the steel, metal-working, chemical, oil refining, and motor car industries, i.e. those that determine the state of the whole economy. In 1975, for instance, the percentage fall in total volume of capitalist production was as follows: iron and steel 18.4 per cent, chemicals and oil-refining 18.4, motor vehicles more than 10; only in electricity generation and the gas industry did output rise by 0.8 per cent.
The steel industry of developed capitalist countries was in a sick state in 1974-8. Output fell in the United States, for example, by more than 33 per cent in July 1975 compared with the pro-crisis high, and reached its lowest level. In Great Britain the fall was 43 per cent, in West Germany 34 per = cent.^^2^^ Production of non-ferrous _-_-_
~^^1^^ See: Mirovai/a ckiiiiiiinika i mezhdtinnrodniie otrioyliriiit/u, 1978, 8, Supplement, p 17.
~^^2^^ U. N. Monthly Bulletin of Statistics, 1977, 5: 70--70.
44 metals also fell steeply. The industrial troubles were largely the consequence of a deterioration of the situation in the engineering industry, in which production had fallen on the whole by 8 per cent in 1975, including more than 10 per cent in electrical engineering and machine tools.The deep crisis in manufacturing industry affected the position in most branches of the extractive industries.
A number of branches of the textile, clothing, and shoo industries in West European countries, which had been experiencing chronic difficulties in the pre-crisis years, found themselves in a critical position during the crisis. In Sweden, for instance, where the textile and shoe industries were in danger of complete extinction because of mounting difficulties and foreign competition, the government was forced to impose stiff quantitative restrictions in 1975 on imports of shoes and textiles. Cotton and woollen mills in a number of areas of France hardest hit by the crisis were working at only 50 to 60 per cent of capacity.
Another important sector of the economy that suffered very heavily was building. The decline in the public's income, the serious state of government finance, and the marked deterioration in the outlook for economic development combined to cause a substantial reduction in house building in capitalist countries. It has been estimated that it was the biggest cutback in the whole period since the war. In the United States, for example, investment in housing fell by half in 1975 from the pre-crisis = peak.^^1^^ A serious position arose in the building industry in West Germany, where construction, after a fall of 5 per cent in 1974, fell by another 11 per cent in 1975. The volume of house building in Italy fell by nearly two-thirds.
An indication of the building industry's troubles is also given by the fall in production of building materials. Production of cement in the United States, for example, fell by 14 per cent in 1975 compared with 1974, and by 24 per cent compared with 1973. Its level (59 million tons in 1975) was below that of = 1968.^^2^^ There was also a _-_-_
~^^1^^ U. N. Month/i, llullflin <>j Statistics, 1977, 5: 92--93.
~^^2^^ Ibid., p 7r>.
45 substantial reduction in cement production in Japan, West (iennany, Franco, and = Italy.^^1^^The overproduction crisis, which developed with greatest 1'orce in manufacturing and the building industry, also affected traiisparl. The decline in industrial production and the curtailment of building in many countries and regions lowered the indices of the activity of most sectors of transport. The total freights of the railways, merchant marines, and airlines were down greatly in 1975 on 1974. In the United States, for example, the volume of air freight fell by 35 per cent in 1975 compared with the pre-crisis = peak.^^2^^
The cyclic crisis was deepened by the chronic difficulties engendered by the protracted agrarian crisis. The fall in farm output in many capitalist countries is having an unfavourable effect on the development of industry, especially on those sectors that process farm produce or supply farm machinery and fertilisers.
The crisis also affected the services sphere in most capitalist countries, above all home trade, various household services, and the home and international tourist business. The difficulties of 1974-8 were largely linked with the decline in consumer demand, which found direct reflection in the activity of the services sphere. In almost all capitalist countries the growth rates of retail and wholesale trade lagged behind the rate of price rises, which meant in fact a reduction in the physical volume of trade.
The credit system, too, suffered extraordinary shocks in 1974-8. In 1974 the discount rates of the commercial and central banks were raised substantially. Lack of liquidity became one of the most acute problems for many small and middling companies and caused a vast wave of bankruptcies. The USSR Academy of Sciences Institute of World Economics and International Relations estimated that more than 121 000 firms with a capital of a million dollars or more went bankrupt in ten of the biggest capitalist countries in 1974-5 alone (in the United States, Japan, the Federal Republic of Germany, France, _-_-_
~^^1^^ Ibid., pp 73--75.
~^^2^^ U. N. Monthly Bulletin of Xtatixlics, 1975, 9: 147.
46 Great Britain, Italy, Canada, Spain, Australia, and Sweden). including (>(> 000 in = 1975.^^1^^ Most failures occurred in small and middling eulorprisos. hill even widely known firms and banks proved insolvent during the crisis. In the United States, the Federal Republic of Germany, Great Britain, and Switzerland several big banks wilh assets of billions crashed. __ALPHA_LVL3__ THE STOCK EXCHANGE CRISISShocks on the issue market equal to the immense fluctuations in Ihe sphere of productive capital and the fall in production were registered by capitalism's financial barometer, the stock exchange.
As in the 1930s a deep stock exchange crisis preceded the cyclic overproduction crisis; arid as then this crisis, being an expression of the overaccumulation of loan capital and a symptom of the profound contradictions of capitalist reproduction, was interwoven with the cyclic crisis and encouraged an ever greater deterioration of the economic situation and dragging out of the recession in industry.
The stock exchange crisis showed itself in a steep general fall in share prices that led to a reduction in market capitalisation and a steep decline in business on the exchanges, and made for an increase in the number of bankruptcies and failures of companies. The fall in share prices had begun in 1972 in several countries (Australia, West Germany, Switzerland, Great Britain, and the USA), but acquired special dimensions in 1973 and 1974, as will be seen from Table 5 (see. p. 49).
The low of the stock exchange crisis was thus reached in the fourth quarter of 1974, but the pre-crisis level was not restored in most cases in 1975-7, despite a certain recovery of prices. A state of stagnation existed. A new fall in prices was sometimes even observed, especially in Belgium (in 1976), France, West Germany, Italy, and Great Britain. Many bourgeois economists compared the depth of the 1970s stock exchange crisis with the Great Depression of 1929--33. Evidence for this view is _-_-_
~^^1^^ A. Grochikliin. Art. cil.,
47 provided by the biggest stock exchanges, especially the biggest of them all, the New York Stock Exchange. Jean Pourbaix wrote a propos of it in the Belgian journal I'ourquui pa?? in September 1974:At the end of August I97'i, and leaving aside the passing weakness of May 1970, Wall Street is at the bottom of its deepest slump of the past ten = years.^^1^^
In the fourth quarter of 1974 the general index of share prices on the New York Stock Exchange fell by 48 points (by nearly half compared with the pre-crisis peak of 1972). The position remained very unstable in 1975 and 1976.
Of the capitalist world's second exchange, the London Stock Exchange, Jean Pourbaix remarked:
But the London decline went on in the ensuing months. At the end of 1974 the average of prices had fallen by very nearly two-thirds from 1972.If Wall Street has ceased to be a pleasure resort, what are we to call the Gehenna that the London Stock Kxclumge has become?... tn 27 months (From May 1972 to August 1974.....G. Ch.) the London Exchange has Fallen by 03 pelcent. That is a matter of a worse and steeper slump than the one that sowed despair among investors at the lime of the Great Depression from 1929 to 1932. when the index weakened by 'only' 52 per cent in = 37~months.^^2^^
The situation on the Tokyo Stock Exchange, which has risen to third place in scale of business in recent years, was a little better, but even on it there was a record drop in prices for the whole postwar period, and a greater slump than in the 1930s. (A decline of 37 points in average quotations at the end of 1974 compared with the 1973 high.)
The yearbook of the Paris Bourse, characterising the position on it, wrote at the beginning of 1975 that 1974 was a year of trials... It witnessed a real stock exchange crisis which was manifested above all in the fall of the exchange rates of the shares of most enter- prises.^^3^^
_-_-_^^1^^ I'ourquoi />asi', 12 September 1974.
~^^2^^ Ibid.
^^3^^ See: L'Aimer liniirxicre, 1974 (Paris, 1975), p 6.
48 Table !>. Course of Share Prices of Industrial Companies on Ike Stock Exchanges of Selected Countries in 1972--1975 (1970 ,: Year ~1974~ f \ 197T, L< o u n i r v ~1972~ ~1973~ ~1974~ 1 97 r. 3rd quarter 4th quarter 4th quarter 1976 Nov. 1977 Feb. Australia 100 94 70 65 57 53 73 74 77~~ Belgium 125 149 119 113 110 100 110 94 103~~ Canada 123 138 115 108 107 93 103 100 103~~ Franco 107 130 97 107 88 82 100 78 831~~ Great Britain 150 130 76 96 67 52 112 98 1071~~ Italy 74 96 88 65 79 70 56 47 47~~ Japan 173 223 188 191 186 167 192 212 233~~ Netherlands 114 125 97 90 95 82 91 85 89~~ Switzerland 111 103 78 70 74 63 70 74 79~~ United States 133 132 102 110 93 85 109 124 123~~ West Germany 106 101 84 95 82 79 100 93 95~~Note: 1-December li)7(i
Source: U. N. Monthly Bulletin of Statistics, 1975, 11: 239; 197(5, r>: 241; 1977, li: 243.
Stockbrokers estimated that the average quotation fell by 50 per cent over the year compared with the pre-crisis high. The fall was steep and rapid, the Bourse yearbook stated. The slump in share prices affected 75 per cent of French securities not only on the Paris Bourse but also on all seven French stock exchanges. The market valuation of capital declined steeply (by 26.8 per cent from 169.1 billion francs in 1973 to 123.8 billion francs in 1974).
Comparison of these figures with the picture for past years indicates that the crisis on the French stock exchanges came close in the 1970s to the level of the Great Depression. On the Paris Bourse, for example, the fall in the general share index was a little less than 50 per cent in 1929--33 (from 507 in 1929 to 245 in 1932, taking 1913 as = 100),^^1^^ but the fall in the 1970s has already reached _-_-_
~^^1^^ See: L'Annuairc slulistique d<: la /''ranee, Vol. 02, 1950, Partie retruspectu'i, p 70; = L'Anncc bonrsii-rc, 1970 (Paris, 1971).
__PRINTERS_P_49_COMMENT__ 4-0372 49 50 per cent at the time of writing. True, the decline in the 1930s lasted longer, right until 1935 when it reached its low (180), but in today's circumstances, we must note, one cannot consider the stock exchange crisis over either in France or in the rest of the capitalist world.The stock exchange crisis also affected the other stock markets of the capitalist world. The slump in share prices during 1974, for instance, according to the bourgeois press, was as follows: Montreal 26.6 per cent; Toronto 23.0 per cent; Sydney 48.0 per cent; Johannesburg 32.7 per cent; Frankfurt 22.4 per cent; Diisseldorf 22.2 per cent; Amsterdam 26.8 per cent; Zurich 37.3 per cent; and Brussels 21.0 per = cent.^^1^^ As Jean Pourbaix wrote in Pourquoi pas?:
__ALPHA_LVL3__ STAGFLATION, CAPITALISM'S LATESTEven it' prices have fallen everywhere in proportions that will sooner or later evoke appreciable correctives, we still do not know it rock bottom is about to be touched, from which there will assuredly bo a powerful rebound.
At the moment the only certainty we,have is that a kind of economic gloom hangs over the community of Western nations.... The fall in share prices is only one symptom of it, perhaps premonitory, accompanied with a wave of failures, a general inflationary conflagration, and growth = in unemployment.^^2^^
The 'inflationary conflagration' really is one of the features of capitalism's current economic crisis, in the nineteenth and early twentieth centuries inflation was normally regarded as an obstacle to the occurrence of overproduction. The crises were then accompanied, as a rule, with a fall in prices, and not with price rises. Bui in the period of the general crisis of capitalism the position began to change, already in its first stage.
During the crisis of 1920-1, for example, inflationary issues of money and currency chaos were powerful factors in the growth of overproduction, which was a new phenomenon in the history of crises and business = cycles.^^3^^ The Soviet economist L. A. Mendelssohn suggested _-_-_
~^^1^^ Pourquoi pas?, 1974, 29: 60.
~^^2^^ Ibid., ]> 64.
~^^3^^ See: L. A. Mendelssohn. Op. cit., Vol. 3, pp 479--480.
50 describing this situation as a `war-inflation economic = crisis'.^^1^^ The inflation at that time (mainly in Western Kurope) was closely linked in several capitalist countries with the consequences of World War 1 and the development of wartime state monopoly capitalism.A combination of inflation and a fall in production was first recorded in the peacetime conditions of a peace economy (after World War II) in the United States in 1957-8. The decline in production of goods and services was then accompanied with a rise in prices and not a lowering of them as used to happen before World War II, and as occurred in part during the first two postwar crises. But this phenomenon developed to the highest degree precisely during the economic crisis of the 1970s.
This combination of stagnation and crisis in the economy; with inflation has been called 'stagflation' in the West. It is the result of the sharpening of the deep contradictions of social production associated with the development of monopolies and state monopoly capitalism, intensification of the instability of the capitalist economy, and sharpening of interimperialist contradictions. 'Stagflation' is a symptom of the deep structural monetary arid financial crisis of capitalism that is intensifying the acute conflicts, imbalances, and disturbances of modern capitalism's whole reproduction mechanism.
_-_-_~^^1^^ find., p 473.
[51] __NUMERIC_LVL2__ 2 __ALPHA_LVL2__ Capitalism's Monetary and Financial Crisis __ALPHA_LVL3__ [introduction.]Capitalism's present-day monetary and financial crisis is a component of its general crisis that has been engendered by the growing divergence between the character of its monetary and financial relations and the development needs of the productive forces. One of the deepest grounds of the crisis is the breaking down of commodity production by the development of monopolies and state monopoly capitalism. The monopolies, while subordinating the classical instruments of controlling commoditymoney relations to their interests by means of the bourgeois state, cannot at the same time revoke the objective laws of development of the capitalist economy, in particular the law of value and the law of competition.
The concrete symptoms of the crisis are varied, though they also reflect a single process of the breakdown of commodity production and adaptation of the monetary and financial system to the new conditions of reproduction both in individual countries and in the capitalist world as a whole. Within this variety, however, two main groups of phenomena can be identified.
There is, on the one hand, the derangement of capitalist countries' internal monetary systems, which shows itself in chronic inflation and depreciation of the currency. On the other hand there is the crisis of capitalism's international financial system, the monetary crisis proper, which is expressed in collapse of the whole former system of exchange rates, disruption of the machinery of international settlements, and deepening both of monetary and other interimperialist contradictions, and of the contradictions between capitalist and developing countries.
52Both aspects of the monetary and financial crisis are closely linked with one another. Currency inflation, for example, promotes foreign exchange inflation; conversely the current position in the domestic monetary system of many capitalist countries cannot be properly understood without allowing for 'imported inflation', which is the result of international currency speculation, the flooding of the whole capitalist world with paper dollars, and the operations of multinational concerns.
The sharpening of the monetary and financial crisis in the 1970s, which has coincided with a cyclic overproduction crisis, made the latter particularly acute and contradictory. As L. I. Brezhnev, the General Secretary of the Central Committee of the CPSU, said at the Party's 25th Congress:
__ALPHA_LVL3__ MODERN CAPITALISM'S PROBLEM NO.~1The sharp cutback in production and the growing unemployment in most capitalist countries intertwine with such serious convulsions of the capitalist world as the monetary, energy and raw material crises. Inflation has made the crisis processes especially acute. Impelled by the continuously growing military expenditure, it has attained dimensions unprecedented in = peacetime.^^1^^
_-_-_Inflation is spreading like a poisoned tide over all the West. Unless it is chocked promptly it will inflict heavy damage on social structures__(Jacques Rueft).
(I say with all seriousness) today it is our public Enemy No. One. If long continued, inflation at anything like the present rate would threaten the very foundation of our society (President Ford).
(Inflation is) the enemy of our society, a dry rot destroying our institutions (Shirly Williams, U. K. Secretary of State for Prices and Consumer = Protection).^^2^^
Inflation is now proclaimed the critical problem of industrial society, and probably will become its obsessions (Charles Levin = son).^^3^^
~^^1^^ Documents and Resolutions. XXVlli Congress of the CPSU, p 33.
~^^2^^ Cited from: A. Bolchuk. Capitalist World: Inflation a.'' It Is. International Affairs, 1975, 21, 7: 68.
~^^3^^ Charles Lcvinson. Capital, Inflation and the Multinationals (Allen & Unwin, London, 1971), p 11.
53 These statements by the ideologist of French imperialism, the ex-President of the United States, a British Cabinet minister, and a Canadian trade union official very aptly convey the general atmosphere and the changes that have taken place in recent years in the world of capital in relation to inflation. From a quite legal and even desirable means of stimulating economic activity, on Keynesian lines, it has become one of 'the most alarming phenomena of our = times',^^1^^ and a 'world problem' of capitalism.The change in attitudes toward inflation is explained both by the change in its character and by the vast increase in its scale and the mounting rate at which it is proceeding.
In the past inflation was episodic. With the transformation of free competition capitalism into imperialism the position began to alter. In the era of the general crisis of capitalism, especially in its second and third phases, inflation has become a chronic complaint of the capitalist economy, its alter-ego. Now inflationary processes accompany its development not only in wartime and immediate postwar years but also in peacetime, and not only in the period of comparatively brisk economic activity but also during recessions and crises.
The evolution of prices over the past 150 years, which gives an approximate picture of inflation, is indicative. In France, for instance, taking the price level of 1914 as 100, the wholesale price index was 499 in 1920, 2247 in 1945, and 22 807 in 1965. The retail price index for the same years stood at 357, 2700, and 25756 = respectively.^^2^^ The wholesale price index fluctuated between the wars but was considerably above the 1920 level, and from 1937 onward was rising steadily (except in the period 1952-5). The same can be said of the retail price = index.^^3^^
On the other hand, if we compare the 1914 price level with that of the early nineteenth century, we find that the wholesale price index was 130 in 1820 (with the same _-_-_
~^^1^^ F. W. Scliulthess. I/fi//lnliii/i, /imbU'iiir mondial (('.red it Suissr, Zurich, 11)75), p ,'i.
~^^2^^ INSEE. L'Aitiiuaire slatistique dr la I'ruiice. lietiiinie retros/ icctif, 1966 (Paris, 1907), p 3.
~^^3^^ Ibid.
54 base year, i.e. 1914--100), 94in 1850, and 84 in = 1900.^^1^^ There was thus a movement of prices in the nineteenth century, but not in the direction it has taken in the past 50 years.In the opinion of French Marxists two conclusions follow from analysis of the data given in the official statistics. Essential quantitative changes have taken place since 1914 such as suggest qualitative shifts; and since 1945 there has been a marked trend toward a steady rise of = prices^^2^^.
Similar changes have occurred in many other capitalist countries.
Inflation's assumption of a permanent character in recent decades is due to its very nature. Underlying the process is the state monopoly structure of the contemporary capitalist economy and the contradictory principles of monopoly and competition. Inflation has become a component of the machinery of monopoly price-formation, and has been converted into a most important instrument for redistributing national income in favour of the monopolies.
A basic cause of inflation is the militarisation of capitalist countries' economies and the arms race, the scale of which we have already mentioned in our description of modern capitalism's economic development.
The special features of modern capitalism's credit and monetary system have been of no little significance in the rise and development of inflationary processes: namely, the growing expansion of banks, growth of the national debt, and the chronic budget deficits of capitalist countries. In the past 45 years, the U.S. Federal Budget has had a deficit 36 times, revenue having exceeded expenditure only nine times. An unbalanced budget has been a chronic phenomenon in France in recent decades. Whereas only 20 of the 43 annual budgets of the period 1871--1913 were not balanced (the deficit never exceeding 5 per cent of revenue), only four of the 25 budgets of 1914-- 38 (those of 1924-8) were balanced. And since World War II almost all French budgets have been unbalanced, the _-_-_
^^1^^ Ibid.
~^^2^^ Traite marxisle d'economic politique. Le capitalisms monopnlisle d'Ktat. Vol. 1 (Editions socialos, Paris, 1971), p 380.
55 average deficit in individual years (for 1946--57 for example) being 23 per cent of the total budget = revenue.^^1^^But it is not simply a matter of the permanent character! of modern inflation. The increase in its scale and acceleration of its rate of development are playing no less a role. It is this transformation from more or less 'moderate', 'creeping' inflation in the past to 'galloping' inflation that the main feature of the inflationary crisis of the 1970s consists. The American economist Victor Perlo stresses that the overproduction crisis is the worst that capitalism has experienced since the = war.^^2^^ An idea of the scale of the 'inflationary conflagration' is given in the figures in Table 6.
Table 6. Growth of Prices in Selected Capitalist
Countries, 1951--1977 (average annual percentage increase)
Country l!)f)l-(iO 1901--70 1971-3 1'.)7/, ~1075 Ill/li 1SI77 United States 2.1 2.8 4.0 11.0 !l.4 6.0 0.8 Japan 4.0 5.8 7.5 24.5 12.1 9.2 4.8~~ West Germany 1.9 2.7 6.0 7.0 0.0 5.0 3.5 France 5.8 4.2 6.4 13.7 11.6 0.3 9.0 Great, Britain 4.0 3.!) 8.6 16.0 23.1 16.0 12.1 Italy 2.3 3.!) 7.1 11). 4 10.0 17.0 15.0 Sources: Calculated from: OEC1J. Main Economic Indicators (OECU.
Paris, 11)76). See also: V. Shenaev. Mechanism and Causes
of Modern Inflation, Mirovnya ehnnnmiha i mezlulimnroilra/e
otnosheniya, 1976, 20, 1: 23;
A. Grechikhin. The Capitalist Economy in 11175. Idem.,
1970, 20, 3: 75: U. N. Monthly Bulletin of Sliilistic:;, 1977,
5: 178--187; October 1978.
Thus, whereas prices rose on average by 2 to 4 per cent in developed capitalist countries in the 1950s, the growth rate swelled to around 3 to 5 per cent, in tho l%0s. In the 1970s, however, there was a jump that broke all records of previous years. The growth rate of prices jumped in 1974-6 to 10 or 15 per cent, and in some cases 20 per cent per annum or more.
_-_-_~^^1^^ Louis Trotabas. Acs /i mince /uihlitities t'l Irs ini/iuls (It: In Franca (Librarie Armarid Colin, Paris, 1973).
~^^2^^ See: Victor Pcrlo. U. S. Decline and Fight for Living Standards, World Marxist Review, 1975, 18, 4: 17--20.
56Another indicator of the 'inflation explosion' of the 1970s is the steep increase in the growth rates of money in circulation, which has in fact outstripped both the volume of industrial production and the total output of goods and services. In the United States, for example, the total of bank deposits and cash in circulation rose by 36.2 per cent in the period 1969--74, while the gross national product increased by only 13.2 per cent and total industrial production by 12.7 per cent. The growth rates of money supply in Great Britain were six times as high in the 1970s as the growth rates of the gross national product, in France nearly four times as high, and in Italy more than eight = times.^^1^^
The chronic character, scale, and mounting tempos of inflation are characteristic of all developed capitalist countries. It has struck Japan, of the three centres of imperialism, hardest, and then the countries of Western Europe. It has also engulfed the countries of Latin America. The highest rates have been registered in Chile, where the cost of living rose nearly 700-fold in = 1972-7.^^2^^ Then come Argentina, Uruguay, and Brasil. In the Middle East Israel takes first place for rates of inflation, and in Asia South = Korea.^^3^^
The rapid acceleration of the inflationary processes and extension of their scale are having an adverse effect on the process of capitalist reproduction. Inflation is leading to a rise in the cost of credit, which is hampering investment and making for a general deterioration of the market situation. By provoking a feverish 'scramble for material values' it is adversely affecting the general accumulation of capital. Uncurbed inflation, which superficially operates in the guise of a specific 'money sickness', can disturb and even disrupt the production mechanism, since it upsets normal operation of the currency system.
_-_-_~^^1^^ U. N. Monthly ltiillclin <>j Statistics, 1975, 12: 220--225 1977, 5: MISSING: 222-227
~^^2^^ The retail price index changed UK follows in Chile, according l.o the official figures (1970= 100): 21,''. in 1972, 907 in I97.'i, 5840 in 197'i, 27 752 in 1975, <S6 505 in 1970, 145 250 in 1977 (March). See: U. i\. Monthly Bulletin <>/ Statistics, 1977, 5: 178--179.
~^^3^^ Ibid., pp 178--187.
57 Table 7. Foreign Trade of Leading (in billions Capitalist Countries, 1973--1976 of dollars) 197,'i ~1074 Country Imports Exports Balance Imports Exports Balance United States 68.5 70.2 -I-1.7 107.1 07.1 — 10.0 West Germany Japan 54.4 38.3 67.4 36.0 + 13.0 -1.4 68.0 62.1 80.1 55.5 +20.2 —6.6 France 37.4 36.0 —1.4 52.0 45.8 — 7.1 Great Britain 38.8 30.5 -8.3 54.1 38.6 —15.5 Italy 27.7 22.2 —5.5 41.0 30.4 —10.7 Canada 23.3 25.4 +2.1 32.3 32.0 +0.6 Netherlands 23.9 24.0 +0.1 32.6 38.6 +6.0 t!)7,. l!)7li Imports Exports Balance J mpor ts Exports Ha la rice 102.0 100.1 3.2 128.8 113.3 — 15.5 74.2 00.0 + 15.8 87.7 102.0 -1-14.3 57.8 55.8 —2.0 64.8 67.2 +2.4 54.2 52.2 - -2.0 64.4 55.8 —8.5 53.4 44.1 0.5 55.0 46.2 —9.7 38.3 34.8 -3.5 43.4 36.0 — 6.5 34.3 31.8 —2.5 37.0 38.1 +0.2 34.5 35.0 +0.5 30.6 40.1 +0.5Source: Calculated from: U. N. Monthly Bulletin of Statistics, 1977, :,; 108-1 l.'i; 10: 108.
This is connected, in particular, with its having now become much more 'contagious' than before. The ' vectors' are international capitalist economic relations, above all monetary ties. It is typical that the United States proved to be in only third place as regards rates of inflation in 1974-5, largely because it had managed to 'export' its inflation to other capitalist countries.
__ALPHA_LVL3__ THE CRISIS OF WORLD ECONOMIC RELATIONSConstant rivalry and competition and the monopolies' struggle for markets and spheres of investment and to maintain and extend their domination of other countries and peoples are typical of capitalist countries' international economic relations. This is manifested particularly clearly in the effect of the capitalist economy's cyclic crisis, when competition between capitalist countries and the major monopolies becomes sharper.
L. I. Brezhnev, in characterising the position then, noted at the 25th Congress of the CPSU that:
intorimperialisl rivalries anil discord in tlic Common Mnrkol and NATO have grown sharper. The greater power of the international monopolies has made the competitive struggle still more ruthless. The governments of capitalist countries are making repeated attempts to moderate the 58 contradictions and come to terms on joint anti-crisis measures. But the nature of imperialism is such that each endeavours to gain advantages at the expense of others, to impose his will. Differences surface in now forms, and contradictions erupt with new = force.^^1^^
The present position permits us to speak of a crisis of capitalism's world economic relations that is further aggravating the grave position of industry and other sectors of the capitalist economy. Evidence of this crisis, in addition to the sharpening of competition, is the marked reduction in foreign trade and worsening of the trade and payments balances of developed capitalist countries. The gross foreign trade of the industrialised capitalist countries fell by 10 per cent in 1975 (in fixed prices) from the 1974 level.
There was a decline in the physical volume of foreign trade in almost all the leading capitalist countries in 1975. The reciprocal trade of the developed capitalist countries declined most, while their trade with developing and socialist countries continued to expand.
The trade deficit of the developed capitalist countries reached unprecedented proportions. The total for five _-_-_
~^^1^^ Documents and Resolutions. XXVth Congress oj the CPSU, pp 33--34,
59 countries alone (the USA, Japan, France, Great Britain, and Italy) came to $49.8 billion in 1974. Although the position improved slightly in 1975 (the total deficit of their trade balances being $13.6 billion), this improvement was achieved in the United States, Japan, Great Britain, and Italy through a cutback in trade and a greater reduction of imports than of exports, which was observed in all developed capitalist countries (except the Federal Republic of Germany). In 1976 the deficit again rose and came to $40.2 billion for these four statcs(see Table 7 p.58). As a result of the crisis of world economic relations, many capitalist countries' foreign trade was converted in the 1970s into a channel spreading reduction of production, inflation, unemployment, and other ailments from country to country instead of a factor promoting maintenance of the general economic situation and evening out of cyclic fluctuations, and even stimulating economic growth. The instability of capitalism's monetary and financial sphere is having an adverse effect on the development of world capitalist trade. __ALPHA_LVL3__ COLLAPSE OF THE BRETTON WOODS SYSTEM. DECLINE OF THEThe currency crisis, as an ingredient of the general crisis of capitalism in the sphere of international monetary relations, is a chronic ailment of the capitalist world. Its classic forms are (a) collapse of the gold standard, i.e. ending of the free exchange of banknotes for gold; (b) attempts to use the paper money of leading imperialist countries as international reserve currencies, and the rise of various kinds of closed currency zones and groupings; (c) the existence of all kinds of currency restrictions that complicate normal settlement of international accounts; (d) instability and imbalance of most capitalist countries' balances of payments; (e) frequent changes in the gold content of currencies and market fluctuations in their exchange rates; (f) deepening of the monetary contradictions between capitalist countries, and in recent years between them and developing countries.
A qualitatively new stage in the monetary crisis set in in the 1970s: namely, collapse of the West's whole 60 monetary system built up during World War II and after.
What were the most important principles of the postwar monetary system created at Bretton Woods in 1944? The throe main components of its machinery were the following: (1) adoption of the dollar as a substitute for gold without formal abandonment of gold (gold exchange standard), the link between gold and the dollar being ensured by free convertibility of the latter in international settlements at the official price; (2) stability of the dollar and of its gold content, which were guaranteed by the whole economic and financial strength of the United States; (3) firmly fixed exchange rates with the right to depart from the parity only within a range of 1 per cent; to ensure this stability an International Monetary Fund (IMF) was instituted in which the monopolies of the United States had a dominant position.
The objective basis of this system was American monopolies' domination of the capitalist world economy. In the early postwar years around 60 per cent of the industrial production of all capitalist countries was concentrated in the USA, i.e. more than twice the production of the countries of Western Europe taken together. The American monopolies controlled almost half the total trade of capitalist countries. In their hands were more than 10 000 tons of gold, bought at an artificially low price from other countries. The gold reserves of the United States constituted 75 per cent of those of capitalist countries, and 'dollar hunger' became a very acute problem.
For a long time the Bretton Woods system was successfully employed by U.S. finance capital, because it provided a chance of injecting the paper dollar into the world monetary circulation and so making extensive investment of American capital in other countries feasible and facilitating the financing of U.S. military undertakings abroad (maintenance of military bases, local wars, etc.), and extension of the United States'economic and political positions throughout the world.
A gradual change in the balance of power between the United States and the other capitalist countries came about, however, during the postwar decades. At the beginning of the 1970s its share in all spheres of the 61 Table 8. Weight oj Selected Countries in the Total (in porccn Liquid Heserves oj Developed Capitalist Countries tagcs) All developed capital i.sl conn 1 1'io.s USA Canada \Veslei n Ku rope ( loin IMOII The Six ~1950 (1) Gold 1(10.0 75.0 1.0 22.0 6.0 (2) Reserve position in IMF 100.0 <)0.7 4.7 3.7 3.5 (3) Foreign exchange 100.0 17.7 46.8 18.4 Total 100.0 62.0 4.8 25.0 8.0 7975 (September) (1) Gold 100.0 2!). 6 2.4 65.2 42.8 (2) Reserve position in IMF 100.0 24.8 7.0 55.2 45.5 (3) Foreign exchange 100.0 0.3 3.7 76.5 44.6 (4) Special Drawing Rights 100.0 26.9 6.5 58.6 30.!) Total 100.0 11.4 3.7 70.2 43.0 Market West tiOi'niany Franco Italy Grfial l!i itain Switzerland .lapa n TinNine 15.5 2.2 0.8 0.4 4.8 0.0 3.7 33.5 18.2 2.8 0.5 1.0 2.0 7.2 1.0 8.6 8.0 1.6 4.1 8.0 1.6 45.5 12.7 10. 0 8.0 2.4 0.0 2.3 5 ).0 51 .0 21.2 28.2 7.4 6.7 2.7 3.0 5.1 5.8 0.0 13.2 51.1 ,)i 1.0 10.8 23.1 3.1 7.6 1.5 4.2 0.5 4.2 6.0 6.0 0.5 Sources: V. N. Statistical Yearbook and Monthly Bulletin of Stalls tics, 1970--197:''); IMF International Financial Statistics, 1970--1975; U. N. Monthly Bulletin of Statistics, 1910, 4; 1970, 4; 1977, 10; Mirorayii ekonomi/ia i mezlidnnariiiliii/e olnoxlienii/a, 107(1, 20, 7: 153. capitalist world economy had contracted substantially compared with the early postwar years, and in some cases in comparison with 1929. The weight of the USA in industrial production, for example, had fallen to 41.2 per cent in 1970 (44 per cent in 1929), 39.6 per cent in 1974, and 39.4 per cent in = 1975.^^1^^ In the postwar years West European countries attained 33 per cent of the industrial production of the capitalist world, almost catching up with the United States. Together with Japan they even overtook American production. Even bigger changes took place in international trade. The weight of the United States in capitalist world exports fell to 15 or 16 per cent. As a result of the deterioration of conditions for American exports the U.S. active trade balance gradually diminished, and in the 1970s the United States began to have a deficit on its trading = account.^^2^^ The changes in its _-_-_
~^^1^^ U. N. Monthly Bulletin oj Statistics, 1976. 4; 1077, 5; 1077 10
~^^2^^ Ibid.
62 gold and foreign exchange reserves were particularly marked (see Table~8).The United States continues, however, to incur huge military expenditure abroad and to increase its export of capital. All this is causing a chronic deficit in the American balance of payments. By 1971 U.S. reserves of gold and foreign exchange were only a fifth of total American long- and short-term foreign indebtedness. On the other hand paper dollars had flooded the whole world, and ' dollar hunger' had given way to a 'dollar surfeit'.
By this time the hour of the Bretton Woods system, which had at any rate lost whatever objective basis it had had, struck.
A qualitatively new stage in the development of the monetary crisis can seemingly be taken to have begun on 15 August 1971 when the United States announced its 'temporary' suspension of exchanging dollars for gold, and later, when on 17/18 December 1971, it gave its agreement in principle to a devaluation of the dollar in 63 relation to gold, the first devaluation of the dollar since = 1934.^^1^^ The U. S. Treasury, 'having barged down the cashier's window' converted the dollar into an ordinary capitalist currency inconvertible into gold and liable Lo devaluation. A second devaluation followed already in February 1973. As a result, all the billions of U.S. dollar indebtedness were deprived of gold backing.
The United States and other capitalist countries also abandoned the system of fixed exchange rates either unilaterally or by agreement, passing in practice to ' floating' rates (collectively or individually). In addition, it was decided, at the session of the IMF held in Kingston, Jamaica, in January 1976, to abandon obligatory fixing of exchange rates. The decision was directed toward a spontaneous fixing of exchange rates.
In this way the whole foundation of the Bretton Woods system was liquidated. As Heinz Wuffli, a director of the Credit Suisse, one of the biggest banks of the capitalist world, emphasised at the end of 1975, the . United States, by officially ending convertibility of the dollar, thus de facto abolished the Bretton Woods = system.^^2^^
The crisis of the American dollar, which is a consequence of the United States' gradual loss of its dominant position in the economy of modern capitalism and of growth of the internal contradictions of American society, in no way exhausts the content of the present stage of capitalism's monetary and financial crisis.
__ALPHA_LVL3__ MONETARY HURRICANESAnother symptom of the monetary crisis is the excessive swelling of the cridit superstructure in international accounts, which is to be seen above all in the development _-_-_
~^^1^^ The beginning of the `collapse of tlie Bretton Woods system' (in the view of certain Swiss bankers) should be taken as March 1968, as a result of the approval of the United States, Great Britain, the Federal Republic o!' Germany, Italy, Belgium, the Netherlands, and Switzerland of a free market for gold on which support for the artificial dollar rate for gold would bo dropped. See: Hein/. R. Wulfli. La crise monetaire a la lumiere de. Vhistoire cnntemportiim; (Credit Suisse, Zurich, 1975), pp 30--31.
~^^2^^ Heinz R. Wuffli. Op. cit., p 13.
64 of the Eurodollar market and the operation of the Special Drawing Rights machinery.By the Eurodollar market is usually meant Lhe aggregate of credit operations completed in American dollars outside the United States. The particular character of Eurodollars as a form of international credit is due to the fact that while the American dollar serves as the object of the exercise the credits are granted by non-American banks for which the dollar is a foreign currency.
The bulk of operations in Eurodollars is concentrated in Western Europe (half of them are conducted by 50 London banks, known by bankers as the 'dollar = banks').^^1^^
The Eurodollar market developed through the effect of a variety of factors. Its evolution was encouraged, in particular, by the institution in the second half of the 1950s of full or partial convertibility. But the greatest effect on its development was and is exerted by the aggravated balance of payments crisis of the United States. The flood of paper dollars used to cover the deficit serves as one of the physical foundations of the Eurodollar market, which is being expanded by the effect of the U.S. policy aimed at underpinning the dollar's position as the main international reserve currency.
Through the qualities enumerated here the Eurodollar market became a gigantic source of currency speculation, which promoted its unprecedented growth rates in the 1970s. The volume of Eurodollars being used on the market rose from $7 billion at the end of 1963 (according to the estimates of the Bank for International Settlements in Basle) to $105 billion in 1972, $155 billion in 1973, $170 billion in 1974, and $200 billion in = 1975.^^2^^ Bourgeois bankers said this market had become dangerous because of the scale it had attained, and because, in addition, it contained a constant potential threat of a = major crisis.^^3^^
_-_-_~^^1^^ Christian Goux, Jean-Francois Landean. La />eril amerlcain. Lv fii/>i/nl (iniericiiiii 11 I'i'lrniiger (Cat maim-Levy, Paris, 1971), |) 10(1.
~^^2^^ Bank For International Settlements. 40lli Animal Kc/it>rt, HW1I-70; Ann,ml Jt,-/,orlx. 1971-1 !)7.i; Tribune tie dene re, 12/13 August 1974.
~^^3^^ See: Triliiuir tie Cn/i-ir. 12/13 Augnsl. 1974.
65The events of the 1970s fully confirmed this evaluation. The F;iiromarket has now become a serious factor disorganising the credit system of Western Europe and the whole capitalist world, and an important nexus of interimperialist rivalry. Although it is far from the only sphere in which international currency speculation operates, its significance in this regard can hardly be exaggerated. This could be seen, for example, at the beginning of 1973 when an influx of American dollars triggered off a dollar = crisis.^^1^^ Indicative, too, were the movements on the Euromarket at the beginning of 1976, which were an important ingredient in the frequent speculative operations directed against the French franc and the Italian lira,
Capital looking for the quickest, most profitable application has found broad opportunities through the medium of Eurodollars. Charles Levinson, characterising the operations of this market, wrote:
An internatiomil gulf stream of hot money, billions of dollars long and wide, is coursing around the national money markets of the world in the direction from low to high interest rates, raising and lowering them continuously, usually in a contrary direction to domestic = policy.^^2^^
By increasing chaos and muddle in the monetary sphere and promoting dollar 'saturation' of the capitalist world economy, the Eurodollar market has been objectively furthering, as it evolves, a weakening of the dollar's dominant position as an international reserve currency. In these circumstances state monopoly circles in the United Slates have tried by various measures to maintain the dollar's privileged position and to shift the burden of the monetary crisis onto their partners and developing countries. The institution of a new international payments unit or 'paper gold' was linked with this.
__ALPHA_LVL3__ `PAPER GOLD' AND `GOLD FEVER'This payments unit was introduced by the IMF as Special Drawing Rights (or SDRs), which are an arbitrary currency unit without independent value, entered into the _-_-_
~^^1^^ Tribune de Geneve, 12/13 August 1974.
~^^2^^ Charles Lovinson. Op. cit., p 71.
66 accounts of IMF members, and intended to balance their payment accounts. Under Iho IMF's rules .SDKs were lied to the dollar, and after tlio hitler's second devaluation to the exchange rates of the currencies of twenty developed capitalisl countries.Strictly speaking the institution of SDHs did not make any fundamental change in the capitalist monetary system. (1) This arbitrary currency was computed in depreciated dollars, which in fact deprived it of an objective criterion of real value. (2) Its distribution within the IMF was established in accordance with members' quotas, so that the main benefit of the issue of SDRs went primarily lo the United Slates. In the period from 1 January 1970 through 1972, 9.4 billion units of SDRs were = issued.^^1^^ The introduction of this surrogate currency could not eliminate the main symptoms of the monetary crisis, i.e. the flooding of capitalist countries with depreciated American dollars and the mounting flight from the dollar. After the instilution of SDRs the West's monetary crisis not only did not abate but gained new force. The 'flight from the dollar' took on a particularly broad scale, which was most clearly expressed in attacks of 'gold fever', i.e. mass exchange of dollars and other currencies for gold, so causing the paper price of the latter to rise by leaps and bounds.
The gold problem is one of the most important aspects of modern capitalism's monetary crisis. Many bourgeois economists, in particular a number of American bankers, are trying to prove that gold lias ceased lo bo world money in our day. In fact there is a profound distortion of the mechanism by which Ihis money operates at the present stage of the general crisis of capitalism. An important change, as we have already said, is the outflow of the token money of leading Western countries, above all of Ihe American dollar, onto the capitalist world market as a representative of world money, a direct cause of which is the transformation of foreign trade into normal multilateral commodity circulation.
Another indicator of the trend toward ' demonetisation' of gold is the reduction of its weight in the general _-_-_
^^1^^ See: Ilciti/ K. U'ufl'li. ()/>. cil.. p 'M. 5.
67 total of capitalist countries' gold and currency reserves, which rose from $50.5 billion in 190(1 to $225.7 billion in 1975, the proportion of gold falling from 69.7 per cent to 18.8 per = cent.^^1^^These changes cannot however, in our view, justify denial of gold's role as the money commodity. It continues to function today as world money, and to serve as the measure of the value of paper money, although it performs many of its functions through its = substitutes.^^2^^ The objective evolution of the capitalist market provides evidence of this. In the 1970s there has been a marked tendency for the market price of gold to rise, which has real economic causes (see Table 9).
Table 9. Movement oj the. I'rice of Gold on lite London
International Free Market (in U. S. dollars per Troy ounce)
Year Iligli Low Average Deviation from the official priceOn percentages) ~1968 42.60 36.70 39.85 + 13.9 (April lo Dec.) ~1969 43.825 35.00 41.09 -1-17.4 ~1970 39.19 34.75 35.945 +2.7 ~1971 43.975 37.325 40.805 -1-16.6 ~1972 70.00 43.725 58.14 +53.0 ~1973 130.00 115.50 119.95 + 184.1 ~1974 192.5 +358.3 ~1975 142.0 -1-238.1 ~1976 132.0 +214.2 (Feb.) Notes: a) official price of Hold before 1!>71, $:t.i.OO per Troy ounce (31.1 grammes); 11 om «l ;. per ounce; since Fobruar b) The London market bcua niai'kel, on 1 April J'JGH. Sourer':;: IT. X. MDU Hilt? HuIIetin n Averages for 197-i, M)7i), xfiii/e otnoxlieni mary 1U72 to January 1H7:(, $.'i8.()0 l',)7:;, $ti'1.2'2. pei' oun'ce. to function as Hie international free for he year's nd li)7(i from Mirooiu/a ekonomiha i i, 1U76, 20, 7:156 '(The Monetary Syslem of t'apitalism, Statistics). _-_-_~^^1^^ U. N. Monthly liulletin of .Statistics, 1975, 11: 220--227.
~^^2^^ For example, the functions (a) of means of circulation on the capitalist world market, and (!>) of universal means of purchase anil payment.
68The catastrophic scale of inflation and the instability oi many capitalist currencies have forced capitalists to turn to real value. Hence the origin of 'gold fever' and the striving of owners of funds to find more reliable investments for them, given increasing bank failures, undermining of confidence in capitalist credit, and intensified competition between monopolies.
It is typical that there has been a growth of private hoarding of gold in recent years. Bankers estimate that the volume of gold at the disposal of private persons has risen from 10 000 tonnes in 1955 to 30 000 tonnes in 1974. Almost all newly mined gold is going into private hoards.
The changes faking place in the monetary system of capitalism and the whole process of the monetary and financial crisis can only be properly understood if a very important new factor, namely the rapid development of 'rnultinalional corporations', is taken into account.
__ALPHA_LVL3__ MODERN LEVIATHANSLenin had already noted the rise of international monopolies at the beginning of this century. Sixty years ago he described the development of international economic associations or cartels of monopolies as 'a new stage of world concentration of capital and = production'.^^1^^
In the era of the general crisis of capitalism, especially at its present stage, qualitative changes are to be seen in the evolution of international monopolies, above all the unprecedented scale of their activity and vast extent of their power.
The report of the U. N. Department of Kconornic and Social Affairs Multinational Corporations in World Development, published in 1973, noted that corporations with foreign branches and affiliates in one or more countries numbered 727(i at the beginning of the 1970s. The 200 largest ones operated simultaneously in twenty or more = countries.^^2^^ These corporations had more than 27"()00
_-_-_~^^1^^ V. I. Lenin. Imperialism, t he 11 iyl.esl Slaj^e of C.apilal ism. <'<>II,'fl,;l HV)/7,'.v. Vol. 22 (I'nmivss Publishers. Moscow I!l(i4) p 246.
~^^2^^ Multiiintiu/ii/l Coi-/ior<ili(,iit! in Wurld /leirln/inii-nl (United Nations. New York. 197.')}, pp 7, 138.
69 foreign brandies, three-quarters of which were located in developed capitalist countries, including 9691 belonging to the United States, 7100 to Great Britain, 2916 to the Federal Kepublic of Germany, 2023 to France, 1456 to Switzerland, 1157 to Sweden, 1118 to the Netherlands, and so = on.^^1^^ The largest proportion of affiliates of multinationals in developing countries was concentrated in Latin America (47.9 per cent of the total), with 29.3 per cent in African countries and 22.8 per cent in = Asia.^^2^^Multinationals play an immense role in the capitalist world economy. The total output produced and sold by them has attained 35 per cent of (he value of Ihe gross national product of the capitalist world. More than 50 per cent of the value of commodity exports falls to their share, and 90 per cent of the export of capital from capitalist countries, the overwhelming fraction of these operations being carried on by a few hundred superlarge companies. The economic indicators of many multinationals exceed those of whole countries. Charles Levinson estimates that
The annual turnover of General Motors alone exceeds the gross national product of Norway, Colombia, and NewZealand taken = together.^^4^^on the basis of output, among the lop JOO countries and enterprises with a volume exceeding $2 billion annually, 54 are business enterprises and oiih 'i(> lire = countries.^^3^^
The rates of development of multinationals are extraordinarily high. The economists Ge/a Lauter and Paul Dickie estimate that the following figures are indicative of the scale of activity of multinational corporations and their rates of expansion: for the four years 1967--71 alone the total of foreign direct investment, in the non-socialist world (market economies) rose from $108 billion to an estimated $165 billion; the gross sales of the foreign branches of multinationals based in the United States came to $172 billion in 1971, while U.S. exports in the _-_-_
~^^1^^ Ibid., p i:i,S.
~^^2^^ Ibid., p 147.
~^^3^^ Charles Levinson. Up. cit., p 10-i,
~^^4^^ Prcuivs, 11172, 9: !)'.).
70 same year totalled only $43.5 = billion;^^1^^ all multinationals created added value to an estimated total of over $550 billion in = 1971.^^2^^It needs to bo pointed out, however, (they wrote) that in total, estimated sales from production by foreign subsidiaries exceed world = trade.^^3^^
In undergoing international expansion capitalist enterprises are involved in a gigantic process of centralisation of capital, and reciprocal interweaving and amalgamation of the monopolies of various countries. According to the President of the Compagnie financiere de 1'Union europeenne, `within ten years all the important banks will be = international'.^^4^^
The direct investments of international monopolies are growing two or three times as fast as 1he gross national product of most capitalist countries. Allowing for their faster development rates (compared with other enterprises), their weight in the capitalist world economy should be even higher in the future. Bourgeois writers estimate that around 300 multinationals will control between 80 and 90 per cent of the industry and foreign trade of capitalist countries in = 1990.^^5^^
An important qualitative change in the development of international monopolies in the present phase is the extension of their field of activity. Whereas the first ones arose primarily in the sphere of circulation, now multinationals are 'conquering' industry, acquiring predominant positions above all in those sectors on which the state and prospects of the whole economy depend.
_-_-_~^^1^^ Geza P. Lauter and Paul M. Dickie. Multinational Corporations and East European Socialist Economies (Praegcr Publishers, New York, 1975), p 7.
~^^2^^ Ibid., p 9.
~^^3^^ Ibid., p 8.
~^^4^^ Cited by diaries Lovinson. Op. cit., p 113.
~^^5^^ See, in particular, R. J. Barber. The American Corporation. Its I'owcr, Us Money, its Politics (l)utton & Co., New York, 1970), p. 58; Louis Turner. In risible Empires. Multinational Companies and the Modern World (TIainish Hamilton, London. 1970), p 191; J9S5 Corporate Planning Todiui lor Tomorrow's World Market (Business liesearcb International Corp., Research Paper No.~9, 1977), p 15; K. .1. Koldc. The Multinational Compain/ (Heath & Co., Lexington, 197'i), p 5; Idem., The Multinational Company in Europe (Heatli & Co. Lexington, 1974), p~8.
71The structure of multinational firms is becoming more mature and diversified. From the cartels that predominated in the past, their evolution has moved toward complex multi-sectoral organisations of the type of trusts.
Multinational corporations are a most powerful and dynamic group of monopolies that largely determine the shape of the economic activity and development of the capitalist world's international economic relations. Their significance goes far heyond the confines of the economy.
Multinational corporations, in the view of their defenders, are a source of progress, 'key instruments for maximising world = welfare'.^^1^^
By internationalising scientific and technical progress, international monopolies are, in fact, subordinating it to the selfish interests of the magnates of capital. The operations of multinational corporations, heing based on the law of surplus value, lead to intensification of capitalist exploitation of the working class of capitalist and developing countries.
There is no doubt that the concentration of the productive forces brought about by them is promoting growth of the international division of labour and perfecting of the specialisation and co-operation of social production. These progressive techno-economic trends and the vastly mounting financial, economic, and political power of the international monopolies arc enabling them to exercise a vital influence on the machinery of the capitalist economy and in particular to influence development of the trade cycle. The enterprises of multinationals exhibit great stability in individual countries in the face of a crisis.
At the same time objective analysis of the present position indicates that international monopolies, having become a most important economic and political factor in the development of the capitalist economy, are greatly intensifying its instability. In the conditions of the crisis of capitalism multinationals have become 'reactors' and 'generators' of economic difficulties in certain countries, and have promoted spread of economic difficulties _-_-_
~^^1^^ United Nations. Multinational Ci/r/iuratio/is'in Wurld Dct't' lu'iil, \> 1.
72 from one country to another. The transfer of surplus value associated with their operations often intensifies unemployment and encourages growtli of structural imbalances, especially in capital-importing countries.Multinational corporations have in fact become 'activisers' in the broadest sense of the term, as regards inflation and the monetary instability of the capitalist world. Their development is one of the most important causes of the inflationary explosion of the 1970s, and their activity largely furthers erosion of national currencies. It was the multinationals, for instance, that created and operate the Eurodollar market.
Is the overcoming of 'national limitations' perhaps a merit of multinational corporations? Here again, however, the real position refutes the multinationals' thesis. The French bourgeois journal Le rnonde diplomatique wrote in 1974 that the term 'multinational company' should not create illusions. They were 'multinational' only in name. In fact American monopolies held a dominant position among them, far exceeding the monopolies of other countries. Nearly half of the 344 biggest monopolies of the capitalist world in 1974 (162) were American corporations.
The activity of the monopolies of several Western European countries, Japan, Canada, Australia, and certain other countries, it is true, increased in the mid-7()s. Japanese capital controls 47 of the 344 giant corporations; British capital 30, West German 25, French 22, and Italian six. The growth of companies controlled by the monopolies of Western Europe and Japan alongside the continuing expansion of American capital is leading to a sharpening of interimperialist rivalry that is further intensifying the capitalist economy's instability.
The harm done by the operations of multinationals botli to the workers of the West and the peoples of developing countries comes out particularly clearly in connection with the energy crisis, as will lie seen in the next chapter.
[73] __NUMERIC_LVL2__ 3 __ALPHA_LVL2__ The Energy Crisis in the World of Capital __ALPHA_LVL3__ [introduction.]In recent years energy problems have become some of the most important issues in the political and economic life of the capitalist world. As the American magazine Time remarked (10 December 1973), 'the chilling prospect of an energy crisis has been in the air all autumn'. Very different, often diametrically opposed propositions, reflecting the contradictory interests of their authors, are of course expressed in descriptions of the essence and causes of the energy crisis, and of ways of overcoming it. For all the variety of the statements made, however, the view gradually hardened that energy problems were inextricably linked with features of the socio-economic and political development of the world. The American businessmen's journal Fortune, for example, remarked:
__ALPHA_LVL3__ CAUSES AND CHARACTER OF THE ENERGY CRISISIt is true, that the immediate 'energy crisis' we are hearing about, which may last through the 11170's, has more to do with politics and human management than with dwindling natural = resources.^^1^^
The statements of the Communist Party of the Soviet Union and the international communist movement in recent years have frequently stressed the acuteness of the energy problem for capitalist countries, and the close connection of their energy troubles with the general state of the world capitalist economy. B. N. Ponomarev, alternate member of the Politbureau of the CC CPSU, and a secretary of its Central Committee, has said, in characterising this crisis: _-_-_
~^^1^^ Fortune, 1972, 86. 3: 99.
74The consequences of the rapacious business methods of the jiKinopolics and the deepening of the contradictions between imperialism and the Third World, the speculative machinations of various kinds of finance capital, and interirnperialist rivalry are tangled together in it in a single = snarl.^^1^^
Underlying Hie fuel and energy crisis are the sharpening contradictions of capitalist society, which are manifesting themselves in contradictions in the development of production and disorganisation of other spheres of social reproduction, primarily of circulation. From that aspect the energy crisis can be described as a structural crisis of the capitalist economy engendered by the unevenness of its development, fierce competition, and the basic economic law of capitalism, namely, the law of the production and realisation of surplus value. The causes and essence of the crisis cannot lie properly understood without allowing for the acute aggravation of the contradictions typical of capitalism in the 1970s, which signifies (as the 25th Congress of the CPSU stressed) a further deepening of its general crisis.
The spontaneous development of production and sharpening of its inner contradictions are finding expression in the fuel and energy economy of capitalist countries. The production of fuel and power is developing extremely unevenly.
The general growth rates of energy production have risen through the effect of general shifts in the development of the productive forces. Economists working in the USSR Academy of Sciences' Institute of World Economics and International Relations have estimated that the demand for energy rose by 2 per cent a year in capitalist countries in 1900--38, by 3 per cent a year in 1938--50, and by 5 per cent a year in 1950--73. The growth in demand, it is true, is not linked simply with the increase in the general scale of social production. No small role is also being played by the mounting energy-intensivencss of industry.
The general trend in the increase of energy production, however, masks the deep contradictions of the capitalist power industry, for which a constant imbalance _-_-_
~^^1^^ Komnuntist, 1974, 2: 13.
75 of supply arid demand is typical, an imbalance that is affected by fluctuations of demand caused by the contradictions of the trade cycle and the general state of the market. It also reflects fluctuations in the production of fuel and power caused by technological factors and other very diverse reasons.The imbalances of supply and demand, the deep-lying cause of which is the inner patterns of development of the capitalist economy, create a chronic problem now of overproduction and now of a shortage of energy. By virtue of a number of circumstances in the late 1960s and early 1970s the prevailing tendency in the development of the capitalist world's energy market has been an increasing energy shortage.
At the end of the 1960s production of national primary energy resources was lagging behind the mounting overall volume of power consumption in the United States, which accounts for around 40 per cent of the capitalist world's gross product. The significance of imports of primary energy resources for balancing the expenditure side of the American energy account rose steeply. The role of imports also rose considerably in Western Europe and Japan, where production of energy resources by no means covers consumption.
The lagging of production of primary resources behind consumption in developed capitalist countries coincided with certain measures taken by the Arab oil-producing countries. These steps, namely, a temporary reduction of production in individual countries, a steep rise in the price of crude oil, and a selective boycott of several capitalist countries, complicated the energy situation in the West, and acted as a catalyst of the processes and trends determining the energy crisis.
The energy shortage became a particularly acute matter during the upturn of the economic situation in the early 1970s when a tendency toward a slowing of growth and even a fall in production was already developing in individual countries. The worsening of energy supplies became a cause of a cutback in production, especially in such industries as the automobile, chemical, aircraft, and building industries, and a deterioration of the state of the foreign trade and balances of payments of leading 76 capitalist countries. In the United States, for example, energy difficulties became particularly acute in the winter of 1973/4. Use of motor transport, both private cars and road haulage, was cut by 25 per cent. The air forces of the USA and Western Europe reduced the length of flights by jet aircraft.
Difficulties in power supply also hit most of the other capitalist and developing countries. Mounting expenditure on importing fuel led to a steep increase in the instability of Denmark's balance of payments. The fuel shortage and its increasing cost meant the end of the economic boom in Austria. In Japan the energy crisis put a complete stop to economic growth. In Brasil the price of petrol leaped steeply, and there were serious breakdowns in the supply of fuel to Rio de Janeiro and other cities.
`The present energy crisis,' the biggest Swedish daily Dagens Nyheter said (12 December 1973), 'marks tiie beginning of a new period in the economic development of industrial countries.'
__ALPHA_LVL3__ THE PROBLEM OF THE WORLD'S ENERGY RESOURCESMany bourgeois economists explain the energy shortage by the imminent general exhaustion of the world's fuel and power resources. The experts of the European Economic Community (EEC), for instance, think^tlie existing difficulties are associated with a physical lack of energy in a situation of rapid rise in consumption,'4and declare that difficulties cannot be overcome within the next 20 years, i.e. until man is able to control thermonuclear fusion and begin to use it as a main source of energy.
Is mankind, however, in fact condemned to so long an energy crisis through lack of resources? To answer that let us consider certain statistics (see Table 10).
World consumption of all energy resources was around 9000 million tonnes of standard fuel in 1973. Assuming it to have grown to 25 000 million tonnes by the end of the century (such a figure follows from the long-range forecasts, as Academician Kirillin, of the Soviet Union, has noted) and total demand for energy resources to be met solely by oil, natural gas, and coal, mankind will 77 Table 10. Energy Resources of the Capitalist World and Their Use Coal Oil Natural fias (000 million (000 million (UOO million [on ICS) 1 on ics) cubic inol res) 19(50 ~1972 11) GO ~1972 ~1960 11)72 All capitalist counlrie.fi proven reserves ~300 36 180 ~76780 ~17370 31 280 extraction 1.04 1.06 ~885 ~2156 41(1 !>56 life of reserves at present rales of extraction (years) 2!H)-300 41 36 42 36 United States proven reserves c. 150 4 520 4 !)60 7200 7680 extraction 0.3H 0.53 410 532 360 647 life of reserves at present rates of extraction (years) 280--290 11 9 20 12
Sources: V. N. Monthly Bulletin o/ Slatiftics. 1975, 9; Ehonnmicheshaya gazela, 1973, 43,
have resources at the year 2000's level of consumption for around another 150 = years.^^1^^But there are still vast reserves of fissile nuclear fuel, water power, and possibilities of direct utilisation of solar energy and of the earth's internal heat, etc. According to most experts' estimates, workable natural reserves of uranium and thorium (given only use of fissile fuel in fast reactors) considerably exceed those of all types of chemical fuel in energy = equivalent.^^2^^ We have not yet mentioned solution of such problems as controlled thermonuclear fusion, which in the longer run would completely remove the problem of providing humanity with energy.
_-_-_There are hopes (1'rof. Kirillin says) that practical solutions will have boon found by tlio end of the century and the first industrial thermonuclear reactors = built.^^3^^
~^^1^^ V. Kirillin. Energetics- Problems and Outlook. Koinniunist. 1975,
1: 45.
~^^2^^ Ibid.
^^3^^ Ibid.
78The data cited on reserves of the main modern energy sources, based on official estimates, and lite picture of their use, do not, on the whole, justify inferences about, the depletion of reserves being the cause of today's crisis. Energy reserves, although limited by separate types, are still quite big, the more so that the range of sources is being constantly extended, use of traditional ones improved, and the economic efficiency of using energy rising.
That does not mean, however, that there is no energy reserves problem in capitalist countries. It is particularly acute in the United States, where reserves of oil and gas will last for only around 15 years' development, without even allowing for the inevitable future rise in consumption. The position in Western Europe and Japan, which almost completely lack oil and gas reserves of their own, is very specific.
The situation presents a grave threat to the economic development of a number of capitalist countries.
__ALPHA_LVL3__ EVOLUTION OF THE FUEL AND POWER BALANCEThis threat is increasing substantially in the situation of rapid growth of consumption characteristic of the evolution of the world fuel and power balance in recent decades (See Table 11).
The superceding of coal has not been simply relative but absolute. In most capitalist countries the mining of coal has been falling or stagnating over the past 20 years. In Western Europe, for instance, it declined gradually from 1965, and by 1971 was only 75 per cent of the 1964 level. The same trend continued in 1972-5 in spite of mounting difficulties with energy supplies. In Japan the volume of coal mined fell by 50 per cent in 1968--74 alone, in Great Britain by around 30 per cent, and in France by more than 50 per = cent.^^1^^ In the United States _-_-_
~^^1^^ In France for example, the amount of coal mined was as follows in millions of tonnes: 1962—55.3; 1907—50.7; 1968--45.2; 1969--43,7; 1970--40.6; 1971--36.7; 1972--33.5; 1973--28.0; 1974—26.0; 1975—26.3. See: L'Annuaire stalistique de la France, 1974; Bulletin mensuel de statistique, 1975, 1; 1976, 4: 13, 14.
In Great Britain average monthly mining of coal fell from 14.1 million tons in 1968 to 9.2 million tons in 1974; in Japan __NOTE__ FOOTNOTE SPLIT Remainder of footnote moved here from page 80. the figures were 3.8 million tonnes and 1.6 million tonnes respeclively. U. N. Monlklij Bulletin of Stulixlirx. 1975, 11:~35.
79 Table 11. Evolution of the Fuel and Power llrtlaticr of Ctijiitali.it. Cniiiilrii:i, I9DII HH2 (iK'lTI'llliljjeS 01 I I|C Illlill ill (('['HIS III' standard I'ut'l) Year Type of I'uol or jiovvor 111 III) ] n i :i l'.i::7 I'.i.'iii I '.17 u i 'J7:: Ceal 76.1 78.0 64.5 54.2 31.5 28.3~~ Oil 3.0 4.0 16.9 23.8 43.1 45.7~ Natural <;-as (1.9 1.4 4.4 9.0 17.1 17.7 Water power 1.7 2.9 , > . '\ (i . 5 5.3 5.4 Nuclear energy __ 0.1 0.2 I'eal 0.7 0.1 o.o (i.O 0.3 0.2 Wood 17.6 13.3 8.2 5.9 2.6 2.5~~ Total 1 0! ) . 0 100.0 1 01 ) . 0 1 00 . ( ) 1 (K ) . 0 1 00 . ( ) <? i., i;.. i ;.... 1 (1T T 'II* '\^i . . (Uniled P. Va. Anlropov. Toi'lifnu-cimrHeliclieskiii /intent: in/ :emli (The World's l<Mel and Power Capability). Moscow. IHT'i, York. l!)7.i); (1. S. (indozlmilt. Nanclino-leh/ ioitilsii/u i eholoniclieski/ hrizis (The Scientific Kcolosical Crisis), \alions, Moscow, 107: mining hardly increased during the same = period.^^1^^It is also worth remarking that, the use of water power and development of atomic power engineering have slowed down in the capitalist world, and that production of local primary power resources and scientific and technical development of alternative sources of energy have been retarded. As a result, a marked imbalance has arisen between the structure of reserves and that of the consumption of fuel resources. The structure of the energy balance has become irrational from the standpoint of providing these countries with resources (see Table 12).
This change in the proportion of oil and natural^gas has come about through many factors. The scientific and technical revolution has played a definite role, increasing demand for oil and petroleum products and natural gas. The wide use of oil and gas is linked in part with __NOTE__ FOOTNOTE SPLIT Bottom of footnote text (end of 2nd paragraph, 1st footnote, page 79) moved to previous page. _-_-_
~^^1^^ Ibid., pp 34--35.
80 Table 12. Proportion of the JMosl Ini/iurlant t*'nergi/ Sources in the I'uel ami Pnircr linlanei: iij Selected Countries in 1972 (in percentages) Energy source Unilcd Stales Japan Western Kurope Goal 19.3 19.7 23.0~~ Oil 40.li 7(1.0 03.3 Natural Kiis 33.0 1.2 9.8 \Vator power 1.3 2.2 2.8 Nuclear energy 0.4 0.3 0.5Source: P. Ya. Anlropov. O;>. cit., p 7.
their tochno-economic indices (high calorific value, convenience of transportation, etc.).But the `oil boom' of the 1950s and 1960s cannot be explained solely by technology and techno-economic causes. Its root must also be sought in the sphere of capitalist relations and in the domination of monopolies.
The operation of the oil monopolies, above all of the international oil cartel, has had a major role in changing the structure of capitalist countries' energy balance in recent years, and in aggravating Western countries' energy situation.
__ALPHA_LVL3__ THE ROLE OF THE INTERNATIONAL OIL CARTELThe international oil cartel arose back in the 1933, and was formed by seven oil monopolies of the United States and (Ireat Britain; and eighth one, a French oil company, signed a special agreement with the cartel sharing in the divison of the capitalist world market.
The members of the cartel are among the most powerful industrial monopolies. Suffice it to say that all seven members are among the ten biggest world monopolies. The list of modern supergiants is headed by Exxon, controlled by tlie Rockefeller group. Its turnover in 1975 was more than $48.8 billion ($54.1 billion in 1977), its assets $32.8 billion, and its profits after tax $2.5 = billion.^^1^^ _-_-_
~^^1^^ Fortune, 1975, 8; 1978, 5-8; = Miwdifs Industrial Aianual. 1975, Vol. 1,2; = O. Volkov. Kxxon. Mironu/n ckon<>niil;<: i muzhilunarodinje utiidKheiiii/ii, 1970, ;'«, 8: 119--123.
81 __PRINTERS_P_81_COMMENT__ 6---0372 Second place is taken by the Anglo-Dutch monopoly Hoyal Dutch/Shell, which is slightly behind Exxon on turnover ($33 billion in 1975; $39.7 billion in 1977), assets ($30 billion in 1975), and profits ($2.7 billion in 1975).^^1^^ The other inembers of the cartel possess vast financial, economic, and political power. Texaco ( American) had a turnover of $23.2 billion in 1974 ($27.9 billion in 1977); Mobil Oil (American) had a turnover of $18.9 billion ($32.1 in 1977); British Petroleum had a turnover of $18.2 billion in 1974 and $20.9 billion in 1977, Standard Oil of California (American) had a turnover of $17.2 billion ($20.9 billion in 1977); and Gulf Oil (American) had a turnover of $16.5 billion in 1974 and $17.8 billion in = 1977.^^2^^At the end of the 1960s the cartel controlled around 90 per cent of all the explored oil reserves of the capitalist world and accounted for 70 per cent of the extraction. Its main operations (more than 90 per cent) were concentrated in developing countries.
Exploitation of highly profitable reserves, especially in the Middle East and North Africa, enabled the cartel to capture the fuel markets of Western Europe and Japan. From the 1950s it deliberately lowered the price of oil, having imposed concession royalties on the Middle Eastern and North African countries that did not exceed 50 per cent of the income from exports of crude = oil.^^3^^ The members of the cartel thus bore no loss, since the prices of petroleum end products were quite high. The cartel's activity stimulated rapid growth of consumption of oil and oil products. The oil imports of Western European countries, for instance, increased 18-fold between 1950 and 1974, and Japan's 180-fold. The United States, which was an oil exporter in the early postwar years, was importing 300 million tonnes of oil and oil products in 1973.
The machinery of enrichment built up by the cartel could not, however, last for ever. With the growing significance of the world socialist system, and above all of _-_-_
~^^1^^ Fortune, 1975, 8; = 1978, 5-8; = Moody's Industrial Manual, 1975, vol.~1, 2.
~^^2^^ Ibid.
~^^3^^ Jean-Marie Clieviiliw. l,c nourcl eiifeu peli'olier ( CalinuiinLovy, I'ai-i.s 1973).
82 the Soviet Union, and the advance of the international working-class and national liberation movements, the cartel's position in developing countries became shaky.One of the most important postwar changes was the increase in royalties and `posted prices' for oil (see Table 13).
In order to explain the present-day energy crisis and its causes bourgeois economics and especially bourgeois propaganda widely employ the thesis of the rising cost of fuel, a thesis that is meant (in combination with the proposition about the limited character of reserves) to free capitalism of blame for the crisis, since the culprits of all the troubles, besides nature, are proclaimed to be 'Arab sheiks' and unruly developing countries. This simplified explanation (to put it mildly) of the mounting difficulties of the capitalist economy has a definite political and ideological purpose. Its object is not simply to mask the real reasons for capitalist society's socio-economic difficulties but to try and break the growing unity of today's main revolutionary forces, in particular of the international working-class and the national liberation movements of the peoples of developing countries.
The rising cost of energy cannot, in any case, be explained by the intrigues of developing countries. It is a complex, multilevel process, in which the international monopolies, and the bourgeois states that are defending their interests, are actively involved.
But before speaking about monopoly capital's policy, let us describe certain objective factors of no little influence on the movement of prices on the world fuel and raw material markets.
The cyclic expansion of capitalist production at the beginning of the 1970s caused a steep increase in demand not only for fuel but also for many other types of raw material. The stoop rise in demand was not quite met in many cases.
A main reason for that was the lag of the production base, emerging in recent years, caused in part by exhaustion of some of the cheapest and most conveniently located fields and deposits. In the realm of fuel and power supply this was seen particularly clearly in the need to bring off-shore fields more and more under exploitation. At __PRINTERS_P_83_COMMENT__ 6* 83
Table 13. Evolution of the Prices of the Main Types of Fuel in 1969--1976
Type of fuel and country of origin L'nit of measurement Prices by years 19G9 ~1970 ~1971 ~1972 ~1973 ll*7 * 197') i->7h Crude oil (Saudi Arabia) US $ per barrel 1.80 1.80 2.19 2.47 3.27 11.58 11.53 12.38 Crude oil (Iraq) do. 1.72 1.72 2.16 2.44 3.24 11.60 11.55 12.30 Crude oil (USA) do. 3.oo 3.02 3. 26 3.33 3.60 5.08 7.55 11.37 Oil products (Great Britain) pence per gallon 5.76 6.80 8.43 8.78 9.32 16.35 19.85 25.02 Coal (West Germany) marks per tonne 88-7 110.8 132.5 138-7 143.8 182.8 215.5 230.5 Natural gas (France) francs per 100 cubic metres 0.9 9.0 11.6 12.8 13.3 20.5 24.4 33.8Sources: U.N. Monthly Bulletin of Statistics, 1977, 5: 171--172.
84 least 20 per cent of world oil supplies are now coining from offshore = fields.^^1^^But deteriorating conditions of extraction cannot wholly explain the changes llial have occurred in the capitalist world fuel and raw material markets. A new situation lias developed on them in which the iinal word is not that of the buyer, as before, but of the seller, i.e. of the developing countries.
__ALPHA_LVL3__ THE CRISIS OF NEOCOLONIALISMIn order to understand the changes taking place properly it is necessary to recall the recent past. For many decades capitalist countries have been exploiting the natural wealth of colonial and dependent countries, having converted them into suppliers of cheap raw materials and fuel. For a long time the prices of raw materials and fuel had not, in fact, risen and had remained unjustifiably low, while the prices of capitalist countries' products had risen many time over, which enabled the monopolies in fact to draw a considerable part of their raw materials from developing countries free of charge.
The old system of exploitation of the raw material resources of former colonies, which imperialism had tried to improve by neocolonialist methods, has now collapsed, which became possible through the support given developing countries by the Soviet Union and other members of the socialist community.
The energy crisis, looked at from the angle of the interrelations of developed capitalist and developing countries, can thus be characterised as a crisis of these relations, and as the normal result of the long struggle of the peoples of liberated countries for national and social emancipation. As the General Secretary of the Central Committee of the CPSU, L. I. Brezhnev, said in his report to the 25th Congress of the CPSU:
_-_-_It is quite clear now that with tlie present correlation of world class forces, tlie liberated countries are able to resist imperialist diktat and achieve just---that is, equal--- economic = relations.^^2^^
~^^1^^ Luce Langevin. Le, conquete econoiniqno dos oceans. I/ lfuinaiiitc. 1M) September 197<'(.
~^^2^^ See: Documents and Itesuliiiionx. X X \lh Congress of the CPSU, p 16.
85An important factor in tin's struggle was the setting up of the Organ isaI ion of Pelrolemn Exporting = Countries (OPEC).^^1^^ The USSR and other countries of the socialist community are giving oil-producing countries disinterested assistance in setting up their own national oil companies, developing their economies, and training national personnel.
The start of many OPEC members' independent economic development gave a powerful impulse to their struggle for the right to dispose of their own national natural resources. First Algeria, Iraq, and Libya, and then the majority of OPEC members began to nationalise the oil concessions belonging to members of the oil cartel. On 1 January 1977 the cartel's assets in Iran, Iraq, Kuweit, and Venezuela had been fully nationalised, while Algeria had nationalised more than 80 per cent of the cartel's assets on its territory, Libya more than (if) per cent, and Nigeria 55 per cent. As a result, OPEC members, which had independently produced and exported not more than 1 per cent of their own oil in 1970, had increased their share to between (53 and (>(> per cent in 1975; and 90 to 95 per cent in 197G.
The developing countries are also fighting to end discriminatory world prices for oil and the unfair system of paying for it. As a result, the share of OPEC members in the income derived from their oil in the West rose during 1973-5 from 23 or 25 per cent to 58 or 60 per cent, with a'sirnultancous reduction of the share of the Western monopolies and taxation authorities to between 40 and 42 per cent. The income of OPEC members from oil rose from $12 billion in 1971 to $23 billion in 1973, $00 billion in 1974, and around $100 billion in 1975.
Monopoly'capital, above all the big American monopolies, cannot completely accept the changes that have occurred and consider the limitation of their omnipotence a threat to their direct interests.
_-_-_~^^1^^ The members of OPEC are Algeria, Ecuador, (labon, Indonesia, Iran, Iraq, Kuweit, Libya, Nigeria. Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela.
86 __ALPHA_LVL3__ THE MONOPOLIES' ATTACKThe American monopolies are waging a political campaign to try and divert attention from the real causes deepening the economic crisis in the capitalist world, and to throw all the blame for it onto the oil-producing countries, above all onto the Arab countries. Crude blackmail and threats to use direct military force are combined in the activity of the U.S. oil monopolies and militaryindustrial complex with attempts to split the unity of the oil-producers especially of the Arab and other countries of the Middle East, and to exclude any possibility of their joint action.
Economic ways of affecting the Arab and other oilproducing countries arc also not being neglected. The cartel's managers have largely managed to make good their losses by making certain concessions to OPEC members. It was then that they adopted a line of raising consumer prices for oil and oil products, endeavouring not simply to maintain their profits but also to increase them by throwing the costs involved by the rise of purchasing prices onto the consumers in the importing countries. This was helped by preservation of the cartel's 'empire', within which, in the final analysis, profits are made not through the sale of crude oil but of petroleum products.
This line was also facilitated by the machinations of the cartel and its agencies in regard to the system of government price control and taxation. They strove to weaken the price control machinery and to create an impression of a catastrophic depletion of oil and gas reserves. As the 'oil scandals' that occurred in 1973 and 1974 in the United States, Italy, France, Japan, and other countries showed, the monopolies concealed the size of reserves, reduced exploration, and speculatively held supplies of oil products back from the = market.^^1^^ They thus intensified the market position^ and further _-_-_
~^^1^^ The report of llie French Parliament's special commission on llie activities of oil companies, published in November 1974, caused a sensation. It appeared (bat llie oil companies bad resorted to various tax 'fiddles', raised prices wilbout justification, and so on. Sec: L'lfumanlle, 8 November 1974.
87 aggravated the energy crisis, which became a period of prodigious enrichment of the oil companies (see Table 14).The companies in Hie cartel, primarily the American monopolies, made wide use of the raising of oil prices in their own interests. The fact is that they had already been converted in the 1960s from purely oil companies into general energy corporations, capturing a considerable degree of control over coal-mining, gas production, and the production of uranium concentrate. In 1970, for instance, the five biggest American oil companies, members of the cartel, sold 50 per cent of the coal mined in the USA, had brought 85 per cent of the production of natural gas under their control and nearly half of the USA's explored reserves of uranium and 75 per cent of the capacity of new enterprises for mining and enriching = uranium ores.^^1^^ Whereas the cartel used to be interested in low posted prices for oil, because other energy branches of industry could not then compete with it, the situation has now changed. The former oil corporations have begun trying to ensure the competitiveness also of the other fuel and power industries that are under their control.
The rise of prices for oil products at least tripled the profitability of working old oilfields in the United States. New fields brought even bigger dividends. The American monopolies continue to got rich from deliveries to Western Europe, where their share of the oil market is at least 30 per cent, and to Japan, where they control up to half of the market.
The oil monopolies have firmly entrenched their leading position in the capitalist world. And as the facts indicate, they have no intention of yielding in the fight for profits, which forced the chairman of the joint economiccommittee of the U.S. Congress, William Proxrnire, to say in 1975 that the energy crisis was above all a crisis for the consumer, because the oil companies were soaking him for billions of dollars.
The energy crisis created by the monopolies' policy and employed by them for their own further enrichment, serves as the base for the state monopoly capitalist _-_-_
~^^1^^ See: Aliriirai/a ckonintiika i niezhdun/irud/iui? olnvshciiii/a, 107'i 18, 12: 18; lean-Marie Chevalier. OIL cil., pp 173--192.
88 Table 14. Results of the Main Oil Operations in 1972--1974 Corporation ' Yeni's Produc! ion of oi! I ioftriiiiif Sales of nil product s Not profit in nil I ions of (onnos $ millions Er.ron 1072 1073 1074 307.2 335.0 318.4 257.3 288.0 250.1 285.0 308.0 275.2 1532 2443 3142 Texaco 1072 1073 1074 201. 1) 22(5.7 225.3 147.0 152.6 153.0 160.0 173.0 172.3 880 1202 1580 Standard Oil of California 1072 1073 1074 166.2 186.8 100.7 105.4 112.4 106.7 108.4 112.0 10:).2 547 844 ~070 Gulf Oil 1072 1073 1074 160.7 157.0 135.0 07.3 08.8 07.5 84.3 80.5 83.0 107 800 1065 Mobil Oil 1072 1073 1074 110.0 125.3 123.1 100.7 118.2 107.2 120.4 124.1 113.5 574 840 1047 Royal Dutch/Midi 1072 1073 1074 320.5 337.2 207.0 257 . 7 277 .'7 243.7 271.5 200.4 256.2 282* 730* 1162* /Iritislt Petroleum 1072 1073 1074 242.0 230.0 222.0 114.0 108.0 07.0 115.0 110.0 08.il 71* 320* 487* *In millions of pounds sterling. ; Petroleum Economist, May, 1i)7f>; L. 1. Koinlev. V hor'be s neftt/anymi sprutdrni ( = = I'M^litin.' Llic Oil Octopuses), Mosco\v, 1976, p 34. 89 system to develop a new attack on the broad masses of the working- people in capitalist and developing countries.The energy crisis is part of the general problem of the commodity markets. As a result of long colonial exploitation, most developing countries continue to be the agrarian-raw material periphery of imperialism. Raw materials constitute more than 80 per cent of their exports.
At the beginning of the 1970s very acute outbreaks of a raw materials crisis began, which we have already mentioned when describing the position on the fuel and power market.
But the crisis processes have taken on a much broader character. Essentially it is now a matter of a general agrarian-commodity structural crisis and distortion of the traditional machinery of price formation, which has found expression in feverish fluctuations and a sudden jump in the prices of agrarian commodities and raw materials.
The growing imbalance between supply and demand, and the increased instability of commodity prices struck the interests of developing countries with special force. The 45 per cent rise in the mean price level in 1973, and another 50 per cent rise in 1974, were checked in 1975 and even followed by a fall in the prices of many = commodities.^^1^^ To that we must add that around three-quarters of the increment in receipts from the rise in prices was taken by the developed capitalist countries.
The position of most developing countries has worsened since; while the rise in raw material prices, which brought them some benefit, came to a halt, the prices of the finished goods imported by them from developed capitalist countries continued to rise. Their hopes of ending the 'price scissors' in capitalist world trade, which inflicts enormous damage on them, became more and more transparent.
According to United Nations figures, the price ratio on the capitalist world market again went against the developing countries in 1975. The prices of the finished _-_-_
~^^1^^ U. N. Monthly Bulletin of Stati.ttics, 1975, 12: XVIIT-XlX; 1076, 4: XXIT-XXIII.
90 goods bought by them, mainly from industrially developed countries, more than doubled by the middle of 1975 (above 200 against 100 in 1908). The prices of raw materials exported by them (except fuel) caught up temporarily with the growth rate of the prices of finished goods only in 1973 and 1974; in 1975 the raw materials price index had already fallen to 191 (1908 = 100), i.e. again proved lower than the index for finished = goods.^^1^^The monopolies' policy in regard to raw material resources lias evoked active resistance from developing countries. The USSR and other countries of the socialist community are consistently defending the right of every state (a) to exercise effective control over its natural resources and their exploitation, and (b) to control the operations of foreign corporations.
_-_-_~^^1^^ Ibid.
[91] __NUMERIC_LVL2__ 4 __ALPHA_LVL2__ The Ecological Crisis of Capitalist Society __ALPHA_LVL3__ [introduction.]The rapacious treatment of the environment based on the pursuit of profit is leading capitalist society today lo a very acute ecological crisis.
The word 'ecology' comes from the Greek oikos, house. It was first employed by the German biologist Ernest llaeckel in 18(5(5. lie called il 'the science of the relations between living creatures and their = environment'.^^1^^ Problems of ecology, and of the interaction of man and of society as a whole with the natural environment have become a universal issue of = today.^^2^^
Karl Marx had already written in the nineteenth century that industry based on capital creates 'a system of general exploitation of the natural and human qualit- = ies'^^3^^ and that capitalism
__ALPHA_LVL3__ THE SCALE OF THE DANGERdevelops technology, and the coining together of various processes into a social one, only by sapping the original sources of alt wealth the soil and the = labourers.^^4^^
The application of scientific and technical advances has opened a now stage in the relations between capitalist society and nature. It is not simply that a weapon of mass destruction has been created on their basis that can _-_-_
~^^1^^ On this see, for example, Guy Biolat, !\1 ar.ristne ct eiirironnemei/t (Kditions sociales, Paris, 1973), p 79.
~^^2^^ Ibid., pp 9--10.
~^^3^^ Karl Marx. (Iruiidrissc. I ntroduclimi to the Critique <>j I'oliticiil Economy. Translated by Martin Nicolaus (Penguin Books, Harmondswor
~^^4^^ Karl Marx. Capital, Vol. I. Translated by Samuel Moore and Kdward Aveliiifj (Progress Publishers, Moscow, 1973), p 475.
92 at any moment turn vast areas of the planet to dust and ashes ami make conditions for mankind's future development very difficult, but that peaceful development of the scientilic and technical revolution, given dominance of the capitalist mode of production, is having adverse consequences for humanity. To the systematically developing shortages of various types of raw material has been added, lor the first time, the problem of a lack of ' ecological' resources without which man's very existence is impossible, namely fertile soil, clean water, and even air.Water provides a striking example of the problem. As a result of various kinds of pollution (mechanical, thermal, organic, radioactive, and bacteriological, pollution by synthetic substances, and pollution of surface run-off) /ones of almost complete disruption of the ecological system have developed in many capitalist countries (Lake Erie in North America, the Rhine in West Germany, etc.). At the beginning of 1976 the Italian press was proclaiming the 'death' of Italy's biggest river, the Po. In France many rivers are called 'sewers'. In an article in Le nouvel observaleur in 1973, entitled ' Plagueridden Watercourses', Patrick Sery said:
Twenty thousand tonnes of pollutants are dumped every day into rivers that have become convenient, cheap, open sewers for industrialists. The former living waters collect mercury, cyanide, and manganese, causlic soda, or hydrocarbons, the slops and sconrings of a dairy farm, and the bloody traces of an abattoir. The Arve is perfumed with chlorine, the Marne with phenol. The water of the Defile ('anal is nothing but thick mud; a terrible stench escapes from its gas bubbles, and the people of Lille say, without cracking a smile, that they can use it as lubricating = oil.^^1^^
But it is more than simply pollution. The quantity of clean water is decreasing while the volume of consumption has risen enormously, which is creating a problem of a lack of pure water. And when allowance is made for the fact that many freshwater basins are being polluted by industrial wastes, the water problem is becoming very acute in our time for all the big conurbations of the capitalist world.
_-_-_~^^1^^ Patrick Sery. Les coursd'eau malados do la peste. //<,' imurcl rnili'iir, 197.'!,' 4,'!.'i: li/i.
93The air problem is no less acute. A danger has arisen in these days in capitalist countries of the oxygen balance being upset, affecting one of (lie most important elements for the existence of human life on earth.
According to available data, ten limes as much oxygen is being used up for heating and industrial production as a hundred years ago, or 23 per cent of all the oxygen liberated by surface vegetation. Consumption continues to rise at a gigantic pace. A transatlantic aircraft uses between 50 and 100 tonnes of oxygen on one flight; a motor car, travelling 100 kilometres, uses as much oxygen as a human being does in a year; every tonne of coal burned takes up the annual oxygen reserve of ten persons. The present number of motor vehicles in the United States use up twice as much oxygen as is liberated over its territory. Experts suggest that, if present rates of growth of industry and the infrastructure are maintained, 100 per cent of the annual amount of oxygen liberated by land vegetation will already be being consumed by the year 2000.^^1^^
A more immediate threat already hanging over big capitalist cities is smog. An immense quantity of the most varied pollutants is being poured into the planet's atmosphere. As a result of the accumulation of carbon dioxide, total pollution of the atmosphere lias risen by 20 per cent or more in many cities, compared with the beginning of the = century.^^2^^ In Switzerland, for example, the dust content of mountain air has risen by 80 per cent in recent years.
Vast harm has been done to the biosphere as a whole, especially as regards maintaining the atmosphere's purity, by the destruction of forests, 'mankind's lungs'. Over the past 500 years up to two-thirds of the world's forest cover has been destroyed by man's = activity.^^3^^ The _-_-_
~^^1^^ Biiduxhcliei/c nauki. Mezhdiiitarodtii/ ezhegodnik (The Future of Science. An International Yearbook), Moscow, 1970, p 316; G. S. Gudozhnik. Nauchnu-tckhiiichvskat/a reuoli/utsia i ekolngicheskii krizix (The Scienlilic and Technical Revolution and the Ecological Crisis), Moscow, 1975, p 57.
~^^2^^ I. T. Frolov. I'rogress nauki i budushchi'i/c clielorcka ( Progress of Science and Man's Future), Moscow, 1!)75, p 93.
~^^3^^ George Borgstrom. Too Munij. A Study oj Earth's Biological limitations (Macinillan, New York, London, 1969).
94 progressive annihilation of the planet's animal kingdom it linked with these processes.The destruction of vegetation is also having an adverse effect on the soil cover, promoting an increase of soil erosion and a general reduction of the amount of fertile land. Great harm is being done in this respect by the use of toxic organic compounds to combat farm pests. Spontaneous development of the economy, the clustering together of industrial enterprises, and inadequate defensive measures are all leading to a spread of carcinogens. Even on the west coast of Greenland the sands contain five parts per million of the carcinogenic substance benzopyrene at a depth of 50 centimetres; on the Mediterranean coast of France its incidence has risen to 20--25 parts per million at a depth between one and two metres; and in the Bay of Naples it has risen to the critical level of between 1000 and 3000 parts per million (at a depth of 15 to 45 = metres).^^1^^
The menace of carcinogens is also that they, like certain other chemical compounds, have a mutafional effect on the human organism that may only show in future generations.
A feature of the present stage of the ecological crisis is not simply that the harmful effect of various pollutants of one kind and another is beginning to show on man but that the harmful effect of the whole polluted environment is beginning to fell. All the aspects of the deterioration of the natural environment considered above are affecting the Earth's climate.
Capitalist urbanisation is a serious threat. In 1907 around 50 per cent of the world's population lived in cities, and by 2000 (the Western press estimates) 90 per cent will be townsmen. Huge urban areas, however, are becoming less and less suitable for human life; they are being choked with industrial and household wastes and refuse, while the sky above them is poisoned by smog.
As urbanisation develops in capitalist countries the gap between growth of the urban population and provision of the living conditions required for it is getting bigger and bigger, i.e. there is a lag in the provision of enough _-_-_
~^^1^^ G.~S. Gudozhnik. Op. cit., p~86.
95 flats at acceptable rents, water supply, sewerage, roads, electricity, health protection, and other forms of public service and utilities.That is how conditions in big cities are described in the report of a symposium held in Onaway, Michigan, in 1970, jointly by the United Nations and the International Trade Union of the United Automobile, Aerospace, and Agricultural Implement Workers of America.Crowded living cDinl it.ions, elevators that do not work, unlajniiiar or inadequate refuse-disposal methods, the noise, crowds and anonymity of big-city life can produce a numbing effect of despair and = claustrophobia.^^1^^
The state of the environment in the United States is most alarming. Between 40 and 50 per cent oj the total pollution oj the planet occurs there, according to the estimates of American and other bourgeois = experts.^^2^^ In tiie period from 1940 to 1970 alone, economists and geologists estimate, more minerals were used up than mankind lias consumed in the whole of its previous history.
In Canada, as the Canadian geographer R. Bryan states, the rapid growth of capitalist industry and urban population has put the environment in the front rank of the most important problems of the day. Only 75 per cent of the urban population is served by a sewerage system, and the standard of treatment and purification is not high. `Montreal, with a population of close to 2.5 million, dumps 91.(J per cent of its sewage untreated into the St. = Lawrence.'^^3^^
The progressing pollution of the environment is becoming a matter of concern to the broad public. More and more people in the West understand that the position has reached the critical point at which spontaneous development is no longer capable of making good the losses caused by mounting pollution of the natural _-_-_
~^^1^^ Symposium on the Impact of Urbanization, on Mini's Knririinmeiit. Statement and ('iinrlufioiis (United Nations. New York, 1971), p I'l.
~^^2^^ For those estimates see: Minn'iii/a ekonomika i inezhiluiniri/ilni/e ntnoshenii/ii, 1II7H, 15, 2: 124, and Kl\onomiclicsk<u/<i gazela, 1070, 10: 21.
~^^3^^ R. Bryan. Much is Taken. Much Kemains. Canadian Isnui':' in KiiL'iroiimenlnl Const'i'ratltni (Duxhury Press. 1117.'!), pp 33, 34.
96 environment. The millions of people living in the industrial centres of capitalist countries have been convinced by their own experience that today's ecological crisis is becoming a social evil such as mankind has perhaps never before encountered. __ALPHA_LVL3__ WHO IS TO BLAME?Bourgeois science and propaganda exert great efforts to distort the real picture and to lift historical responsibility for the ecological crisis from the capitalist social system. It is declared to be the inevitable result of human history, allegedly not dependent on socio-economic relations. Its concrete causes are declared to be the ' demographic explosion', or man's supposedly congenital biological inhumanity, or his bad upbringing, and so on.
The theme of the scientific and technical revolution has been brought to the fore in the 1970s to explain the sources of the ecological crisis. Whereas, in the 1950s and 1960s, bourgeois science and propaganda used to have the character of an apologia for technology, of a cult of technology as the panacea ensuring universal harmony and the solution of all modern society's problems, in the 1970s technology has been blamed as the source of all the woes and misfortunes of the age and the cause of the destruction of nature. And on this basis a kind of 'technological pessimism' has arisen.
In studying the concrete facts about pollution of the atmosphere and water basins, depletion of reserves of minerals, soil erosion, population growth, and the negative consequences of urbanisation, bourgeois ecologists extrapolate them for several decades ahead and hurl a picture of a 'world', 'unavoidable' catastrophe at mankind. Given this the great success of the idea of 'zero growth' in Western countries, is not surprising. The idea stems from the Club of Rome, a private international futurology organisation uniting scientists, industrialists, and politicians in a score or more of countries.
Four main reports have been issued by the Club of Rome and published in many capitalist countries, and also a large number of papers whose authors have __PRINTERS_P_97_COMMENT__ 7---0372 97 dcveloped several propositions and conceptions new i'or contemporary Western science and = ideology.^^1^^
The Club became famous in 1972 when its first report The Limits to Growth was published, devoted to studies made under the leadership of Prof. D. II. = Meadows.^^2^^ Its authors endeavoured to survey the problem of the limits to growth from the aspect of global ecology, and employed mathematical and cybernetic modelling. Five main systems interacting on our planet were studied: viz., population, agriculture, natural resources, industry, and the environment. The report concluded from its analysis that the world was heading for catastrophe. If mankind were to live as it now did, achieving endless economic growth and increasing in numbers without restraint, there would inevitably be a 'collapse'—a global ecological catastrophe—in 70 years or so, and not later than the year 2100.
The report's authors rejected the conception of ' technological optimism' by which it is suggested that the threatening catastrophe can be avoided by intensified development of science and technology and other purely technological solutions. The road to salvation, in their view, was to curtail further economic development and maintain only 'zero = growth'.^^3^^
The Club of Rome's second report, published in 1975, pursued the aim of taking the method of global ecological forecasting a step = further.^^4^^ According to its authors they were trying to employ computers and cybernetic modelling even more extensively. Their conclusions, however, were very close to those of Prof. Meadows, but in contrast to his forecasts about the possibility of a simultaneous _-_-_
~^^1^^ See in particular D. II. Meadows, D. L. Meadows, J. Randers, and W. W. Bchrens. The Limits to Growth. A Report for Club of Rome's Project on the Predicament of Mankind (Universe Books, New York, 1972), pp 11--12; M. D. Mesarovic and E. Pestel. Mankind at the Turning Point. The Second Report to the Club of Rome (Button-Reader's Bigcst Press, New York, 1974); J. Tinbergen. Reshaping the International Order. A Report to the Club of Rome (Button, New York, 1976); E. Laszlo et al. Goals for Mankind. A Report to the Club of Rome on the New Horizons of Global Community (Button, New York, 1977).
~^^2^^ D. H. Meadows, et al., Op. cit., pp 11--12, etc.
~^^3^^ Ibid.
~^^4^^ M. Mesarovic and E. Pestel. Op. cit.
98 universal catastrophe within the next hundred years, they considered that catastrophic crises would occur in different regions at different times but would embrace the whole world as a result of their interaction. And this might happen, moreover, even sooner than Prof. Meadows thought.Mesarovic and Pestel suggested that further economic growth in developed countries would lead ('like a malignant tumour') to undesirable consequences. They calculated that all Earth's resources would be exhausted by the end of the next century. Like Prof. Meadows, therefore, they considered maintenance of present growth rates dangerous, but at the same time did not agree with ideas of suppressing all growth ('zero growth'). Instead, they put forward a concept of 'slow' or 'limited' growth.
The concept of 'zero growth' and its variant, the theory of 'limited' growth, have been analysed and subjected to scientific criticism in recent years in Marxist literature in both the Soviet Union and abroad. At the international Marxist discussion seminar on protecting the environment sponsored by the journal World Marxist Review (Problems of Peace and Socialism) speakers from the Soviet Union and other countries noted that the main methodological fault of the Club of Rome reports was their ignoring of the integral properties of the system of human society. They abstracted the socio-economic factors of the ecological problem, in essence, and did not link its solution (the achievement of 'ecological equilibrium' in their terminology) with the abolition of private property relations and transition from capitalism to the socialist system of society. The ignoring of the socio-economic content of the problem, its reduction to its purely technological aspects, and attempts to give it a 'suprasocial' and ' supraclass' character all pursued the aim of proving that capitalism was not to blame for the rise of the ecological crisis.
Marxist scholars stress that the ecological crisis is a social one and not a technological one, because man's relations with nature are relations of society since production has a social = character.^^1^^ The essence of the crisis _-_-_
~^^1^^ See: World Marxist Review (British edition), 1972, 15, 6: 4-14.
__PRINTERS_P_99_COMMENT__ 7* 99 Emacs-File-stamp: "/home/ysverdlov/leninist.biz/en/1980/CCCWP251/20051220/199.tx" __EMACS_LISP__ (progn (lb-ht-force-refresh "en/1980/CCCWP252/") (lb-ht "1980")) __EMAIL__ webmaster@leninist.biz __OCR__ ABBYY 6 Professional (2005.10.22) __WHERE_PAGE_NUMBERS__ bottom __FOOTNOTE_MARKER_STYLE__ [0-9]+ is the acute, profound contradictions between capitalism and the scientific and technical revolution. Pollution of the natural environment is the result of capitalist exploitation of the system science-technology-industry, an exploitation that is more and more revealing its hostility to man. A deeper cause of the contradiction is the dominance of private ownership of the means of production and the basic law of capitalism, i.e. the law of the production of surplus value. The social system that directs the whole course of scientific and technical progress to the making of profit and the exploitation of man and nature is also mainly to blame for the ecological crisis.For the capitalist it is a matter of indifference, iu fact, what is produced in his enterprise, whether the product is useful to man or harmful. Only one thing matters, whether its production will yield an adequate profit. The supreme goal and drive of capitalist industry is profit and, moreover, the maximum profit in the minimum time. The capitalist therefore does not stop producing things harmful to man if there is a market for them and they make a profit, and does not reject any means of reducing his costs, even if it leads to poisoning of water, pollution of the air, or loss of fertile land. Even less is the capitalist interested in the separate effects of his activity for society. Frederick Engels wrote of capitalism that
in relation to nature, as to society, the present mode of production is predominantly concerned only about the immediate, the most tangible result: and then surprise is expressed that the more remote effects directed to this end turn out to be quite different, are mostly quite the opposite in = character.^^1^^
Realisation that the ecological crisis is engendered by the private ownership character of capitalist society is also growing among bourgeois scientists. The American ecologist Barry Commoner says straight out in his The Closing Circle, a propos of the origin of the environmental crisis, that
He says further thatthe crisis is not the outcome of a natural catastrophe or of the misdirected force of human biological activities.... The _-_-_
~^^1^^ Frederick Engels. Dialectics of Nature (Progress Publishers' Moscow, 1976), p 183.
100 fault lies with human society- with the way in which society lias elected to win, distribute, and use the wealth that lias been extracted by human labor from the planet's resources. Once the social origins of the crisis become clear, we can begin to design appropriate social actions to resolve = it.^^1^^
modern technology which is privately owned cannot long survive if it destroys the social good on which it depends— the ecosphere. Hence an economic system which is fundamentally based on private transactions rather than social ones is no longer appropriate and increasingly ineffective in managing this vital social good. The system is therefore in need of = change.^^2^^
The development of such views is symptomatic. It indicates how acute problem the ecological crisis has become in the capitalist world. The masses' struggle to improve the quality of life, protect the natural environment, and end the ecological danger are also having an impact. Certain changes are therefore taking place in the standpoint of the monopolies and the spokesmen of the state monopoly system.
__ALPHA_LVL3__ THE NEW STRATEGY OF STATE MONOPOLY CAPITALISMA broad propaganda campaign has been under way in recent years in all developed capitalist countries around problems of the ecological crisis. Bourgeois ideologists are trying to oppose it to the purposeful work being done by the Communist Parties and progressive forces of capitalist countries to bring out the political meaning of the exploitation of nature and nature conservation. Bourgeois propaganda is particularly irreconcilable toward the demand of Communists and democrats for the struggle to protect the natural environment to be regarded as part of the general fight against the world of private property that is plundering mankind's good—nature.
Various steps have been taken in the past ten or twenty years in capitalist countries to protect nature, or are being taken. Standards are being developed for
_-_-_~^^1^^ Barry Commoner. The Closing Circle. Nature, Man and Technology (Bantom Books and.Alfred Knopf, New York, 1971), p 170.
^^2^^ Ibid., pp 280--287,
101 the quality of several components of the environment, viz. air, water, noise, etc. A whole system for subsidising nature conservancy works has been introduced, viz. tax rebates; changes in the depreciation periods for equipment; grants; government backing for loans for building purification plant, etc., although, at the same time, tax rebates on working deposits that directly stimulate uneconomical development of minerals remain in force. In the United States, for example, industrialists have abandoned oil fields in which at least 75 per cent of the original oil still = remains!^^1^^ The French Marxist writer Guy Biolat says in Marxisme et environnement that various measures of a general and structural kind have been taken in France in recent years. In 1970 a board for nature conservancy was instituted and a Supreme Committee for the Environment, and a minister was appointed, charged with protecting nature and the environ- ment.^^2^^ Several new laws were passed, supplementing those already in = force.^^3^^ As a result of the work of the National Commission for Land Management (GNAT), a special section on protection of the natural environment was drafted, which has been included in the national economic plans of France in recent years. Research has been developed within the system of national scientific centres, in particular on problems of the organisation of waste-free production, the re-cycling of wastes, and the development of new industrial processes so as to reduce or eliminate pollution and improve the productivity of = enterprises.^^4^^In the United States amendments to existing legislation were considered at the end of the 1960s and in the 1970s, and new measures adopted: viz., the Solid Waste Disposal Act of 1965; the National Environmental Policy Act of 1970; the 1970 Clean Air Act; the Noise and _-_-_
~^^1^^ See: Ruben L. Parson. Conserving American Resources ( Prentice-Hall, finglcwood Cliffs, 1904), p 429.
~^^2^^ Guy Biolat. Marxisms ct environnement (Editions sociales, Paris, 1973), p 87.
~^^3^^ The first French laws on nature conservancy date from the early nineteenth century. There is, for example, the decree of 15 February 1810 against industrial nuisances, which has since been brought up to date.
~^^4^^ Guy Bioiat. Op. cit., pp 91--99,
102 Pollulion Abatement Act of 1970; and the Federal Water Pollution Control Act of 1972, = etc.^^1^^The Water Pollution Control Act proclaimed its main object to be to achieve complete suppression of the disposal of pollutants in water by 1985. The 1970 Clean Air Act contained a whole series of measures to preserve and improve the quality of the atmosphere of the USA ( stepping up research to develop methods of preventing atmospheric pollution; technical and financial aid to state and local authorities for practical control over the quality of the atmosphere, and so on). On the basis of the legislation passed, Environmental Protection Agency was instituted, and federal expenditure on various measures to improve the use of natural resources was increased.
A set of measures to protect the natural environment is being implemented in other developed capitalist countries as well, in the Federal Republic of Germany, Great Britain, Belgium, and other countries. In Japan, for example, where the bulk of expenditure on nature protection is borne by the government (as in several other capitalist countries), national spending on the fight for cleanliness of the environment rose from 281.6 billion yen in the 1971 financial year to 703.6 billion = in 1973.^^2^^
This activity cannot, of course, be put down simply to politico-ideological motives, the workers' class struggle, and traditions of the development of material culture and nature exploitation.
As the facts witness, the monopolies often treat nalure conservancy measures as a new means of enrichment and of fighting competitors.
Facts published in 1971 by La vie frangaise, the biggest bourgeois economic weekly in France, are indicative. In an article entitled 'A Future Branch of the Stock Exchange—the Fight against Pollution', it was stated _-_-_
~^^1^^ See: James Hutlilesberger (Ed.) Nii'un and the Kni-ironment. The Politics of Dei-natation (Taurus Communications, New York, 1972).
~^^2^^ See: The Economic Position of Capitalist and Developing Countries. Surret/ for 1973 and the Beginning of 1974 (Appendix to Miroraya ekoiiomika i niezhduiiarodiii/K otiinshenii/a, 1974, 18, 8), p 75. '
103 that representatives of the financial groups of the Banque de Paris et Pays Bas, and of the Lazard, Rothschild, Suez, WcndeL-Sidelor, St. Gobain Pont-a-Mousson, Lafarguc, and other groups were involved to one degree or another in major operations associated with protecting nature, i.e. all the biggest financial groups in = France.^^1^^ The position is similar in the United States, West Germany, Japan, and other developed capitalist countries.Many of the specific measures being taken by bourgeois states in connection with the production of costly technical equipment, the carrying out of major research projects, and the subsidising of individual industries and enterprises are dictated by the interests of these monopolies. Thus the monopolies involved in 1he campaign to protect nature get direct economic benefits on the one hand from selling their 'services' to society, so expanding their opportunities to accumulate capital and increase the rate of profit. The taxation measures of bourgeois states play an immense role, in particular, in this.
On the other hand the monopolies are trying to throw all the unprofitable (from their angle) expenditure on nature protection onto the state, each time redistributing it in their direct interests. The state is assigned the role of the treasurer who is, in fact, subsidising the monopolies at the taxpayers' expense.
The French economist Louis Perceval, writing about the reorientation of the monopolies on matters of the environment and state monopoly capitalism's new strategy in this field, said:
_-_-_It is not a matter of putting the natural resources that are its own collective property at the disposal of the nation but of soiling clean air, pure water, and a bit of space... Big Business... is making the most of nature in the sense of making the most of capital wherever, from its angle, it is profitable__
It is resulting in a policy of land management and the use of natural resources that is not simply segregative (parcel ling out) but also not adapted to social needs ... and is heedless of the effect on the natural = environment.^^2^^
~^^1^^ La vie francaise, 19 February 1971; = see also Nuissances et environticntcnt, March 1973; = Guy Biolat. Op. cit , p 100; = L' Humanite, 6 April 1976.
~^^2^^ Louis Perceval. `L'Enviromiement', noiiveau champ de la bataillc politique. Kconomie ct politigue, 1972, 213: 30,
104It is the capitalist character of environmental protection policy that is making it ineffective from the angle of society, and contradictory and ambivalent in many of its specific manifestations. The measures of the monopolies and the bourgeois state, furthermore, are often the cause of new forms of ecological difficulty developing and of further aggravation of capitalist society's ecological crisis.
__ALPHA_LVL3__ DEEPENING OF THE CRISISIt is a matter, above all, of the fact that the activity of bourgeois states (the passing of legislation, setting up of special institutions, financial expenditure, etc.) on problems of the ecological crisis is far from adequate and docs not produce any appreciable effect from the standpoint of the interests of society as a whole. Their operations are being actively criticised by many bourgeois experts, as well as by spokesmen of the left democratic forces.
As an example let us take the symposium Nixon and the Environment published in the United States in 1972, in which the American environmental protection acts of the 1970s were analysed in = detail.^^1^^ James Miller, author of the essay on air pollution wrote that in spite of the existence of a great many acts and ordinances all the federal activity in the United States in this was without effect. His paper was accompanied with a map of the USA from which it was clear that the level of air pollution over more than two-thirds of the country was above the basic standard established by the Clean Air Act. In David Zwick's essay on water pollution, it is said that although the Administration had spoken of the need to take urgent measures to protect the environment, it had given in to the big monopolies on this matter and begun to delay implementation of these measures. As a result, most of the aims set by the U.S. legislators in the 1960s and 1970s remain unrealised.
The progressive public of capitalist countries stress the inadequacy of the expenditure being undertaken in these countries to deal with the ecological crisis. _-_-_
~^^1^^ James Kalhlesberger (Ed.). Op. cit.
105 American experts estimate that the direct damage from industrial pollution will come to $500 billion by 1990. It is calculated that it would call for a total of $274 billion in the next ten years to make this damage good, while the USA now spends only $3.5 billion a year. According to other estimates it would cost up to $150 billion to convert American industry to waste-free technologies; at present rates of spending that would take up to 50 years or more to = do.^^1^^As another example we may take expenditure on the development of science. It will be recalled that 70 to 80 per cent of this in the USA and other capitalist countries now goes on research connected with military needs, and that research on combating pollution of the environment gets only 2 per cent of the total spending on science in the United States, and 0.4 per cent in = Japan.^^2^^
The monopolies and bourgeois states have been trying to fight pollution more and more in recent years by exporting 'dirty' industries to other countries, mainly in the developing countries, subjecting them to a kind of ecological exploitation. In this way enterprises built by the monopolies on foreign territory become an instrument of exploitation not only of the local populations but also of the whole aggregate of natural conditions of the countries concerned, i.e. of their biosphere. There is a danger, said the survey of industrial development prepared by the Second General Conference of the United Nations Industrial Development Organisation (Peru, March 1975), that the present trend may lead in the main to the export of environmental pollution from developed countries.
It is not just a question, however, simply of developing countries. Multinational concerns operating in developed countries are spending much less on environmental protection in them than in their home countries.
In response to the demands of the working people and their social and political organisations for control to be established over the monopolies as the main culprits in the ecological crisis, bourgeois states are trying all _-_-_
~^^1^^ G. S. Gudozhnik. Op. cit., p 58.
~^^2^^ See: U. N. Industrial Development Organisation Report Id/conf. :{/2 (Id/134), p 184,
106 the time to shift the cost onto the workers' shoulders. The real culprits, the big concerns, meanwhile remain unpunished. The greater the damage caused and the greater a firm's responsibility for it, the lighter is the fine.State monopoly protection measures are being implemented at the expense of the working people and are increasing their exploitation because (1) the building of purification plant and development of new technologies lead to an increase in costs of production and a raising of prices; and (2) state subsidies and other concessions for the monopolies that are particularly polluting the environment lead to a growth of taxes.
It is the broad masses of the people who bear the main burden of the taxation to finance measures to fight the ecological crisis. And it is they who suffer most from pollution, as is evidenced by there having been a huge increase in their direct payments for use of natural resources in recent years. According to the U.S. Bureau of Labor Statistics, charges for water and sewerage rose by 36 per cent in 1971-6 in the USA.
The deepening ecological crisis is generally worsening the economic situation in capitalist countries, and is one of the factors complicating the development of modern capitalism's monetary and financial system, and of international economic relations between capitalist countries.
The inability of the state machinery not only to deal with ecological difficulties but even to mitigate them is a symptom of the crisis of state monopoly control of the capitalist economy, and is an important indicator of qualitative shifts in the evolution of the general crisis of capitalism at the present stage.
[107] __NUMERIC_LVL2__ 5 __ALPHA_LVL2__ The Crisis of State Monopoly ControlIt can be concluded from an analysis of the events of the 1970s that the system of state monopoly capitalism is increasingly displaying an incapacity to ensure continuous development of world capitalism, carry through the scientific and technical revolution, and stabilise capitalism's political position.
The unsoundness of the economic and political measures to adapt capitalism to the changing situation is revealing itself in a variety of forms: the bankruptcy of the state monopoly system of controlling the business cycle, for example, which is aggravating interimperialist contradictions, particularly in realms like monetary and financial relations, the state monopoly system's inability to find a solution to the problems of the scientific and technical revolution and to cope with ecological difficulties.
The crisis of state monopoly control is leading to a deepening of the basic contradiction of capitalism, is encouraging a tightening and intensification of the cyclic crisis' ruinous effects on the working people, and is exacerbating the monetary, financial, and other structural crises of modern capitalism. The crisis of the state monopoly system is developing a complex knot of contradictions embracing not only the economy but also all other spheres of the life of bourgeois society.
__ALPHA_LVL3__ THE BANKRUPTCY OF STATE MONOPOLY CAPITALISM'S COUNTER-CRISIS POLICYThe Great Depression of the 1930s stimulated the general evolution of stale monopoly processes and encouraged the development as well of such an important line of 108 bourgeois state activily as a special counter-crisis policy. This activity held a prominent place in the years after World War II, when a mature state monopoly system was taking shape in many developed capitalist countries. A counter-crisis policy became a general phenomenon then and was made the permanent, single-minded line of state action on reproduction, the market, incomes, and prices, so as to weaken cyclic fluctuations.
The means of state monopoly counter-crisis control of the economy are credit policy, control of prices and incomes, administrative controls, use of the public sector, and national and international programming of the capitalist economy. Credit control has become very common in recent decades (i.e. changes in the discount rate of the emission bank that either makes credit more expensive, which restrains economic activity when the bank rate is raised, or cheapens it to stimulate the business situation when the rate is lowered; and various official operations on the money market). The steps to create a system of long-term economic programming particularly important.
But the entire set of counter-crisis policies was wholly determined, and still is, by the class character of the state monopoly system.
The crisis of the 1970s once more demonstrated the impossibility of eliminating cyclic development and the uneven character of the capitalist economy while the main contradiction of capitalism, which is the prime cause of crises, is preserved. The crisis brought out the restricted character of state monopoly control, the limits of which are determined not simply by the anarchy of production but by the whole aggregate of modern capitalism's economic, social, and political contradictions.
There was more to it than that, however. In the 1970s the inner, contradictory nature of state monopoly control of the economy reached its critical point, which allows us to speak of a crisis of the bourgeois state's counter-crisis policy itself. It is a business of a clash of the two main traditional lines of counter-crisis policy, the essence of one being to stimulate economic growth while the other is a set of measures against 'overheating' of the economy. The first line—to ensure growth of 109 production and employment—is stimulated by a number of measures (cheapening of credit, increase of subsidies, etc.) that inevitably result in inflation. But the counterinflationary line inevitably fosters a deterioration of the economic situation. The modern crisis, in fact, as we have already said, is characterised by a simultaneous combination of inflation, which has now become ' galloping', and a steep fall in activity in all spheres of the economy. In that situation a clash between inflationary and counter-inflationary measures is inevitable.
The contradictory character of state monopoly policy has itself become a factor dragging out the crisis and deepening many of the capitalist economy's difficulties. In the pre-crisis period, for instance, the governments of a number of countries counted on measures aimed at limiting 'overheating' and inflation but, in spite of their pursuing a restraining policy, inflation (as we have said) got out of the state authorities' control. At the same time measures to check the granting of credit, raise taxes, and withdraw funds from the sphere of circulation have largely fostered a decline in production. From the second half of 1974, and particularly in 1975, the centre of gravity of many bourgeois governments' economic policy shifted to stimulating measures in many countries. These, however, did not bring about the expected results because they were accompanied with a rise of prices that 'swallowed up' whatever expansion of the public's effective demand there = was.^^1^^
Another symptom of the crisis of state monopoly control is the very extent of the disorganisation of the capitalist economy in 1974-8, the vast scale of the losses caused by the curtailment of production, growth of unemployment, and marked sharpening of social and class contradictions.
The attempts at state monopoly control of the crisis are subordinated to the interests of the monopolies. That is why the basic social content of governmental counter-crisis programmes consists in limiting the purchasing power of workers' earnings. The `economy' regime _-_-_
~^^1^^ See: Uglublenie obshchego krizisa capitalizma i klassovaya bor'ba (Deepening of the General Crisis of Capitalism and the Class Struggle), Moscow, 1976, p 2.
110 that is being written about in many capitalist countries is, in fact, a regime of saving on social expenditure and at the same time of lavish stimulation of the monopolies, which is leading to ever greater consolidation of the power of Big Business.A typical example of these contradictions is the evolution of counter-crisis policy in the United States.
The main principle of American counter-crisis policy, which began to take shape back in the 1930s, has been to use financial controls. After World War II, and especially in the early 1960s, a 'new economies' system took shape, which has been defined by American economists (Heller, Galbraith, Samuelson, and others) as a policy of governmental priming of the economy so as to overcome its stagnation. 'The Federal government has an overarching responsibility for the nation's economic stability and growth,' Walter Heller has = said.^^1^^
The main means to achieve these aims was budget therapy, i.e. transformation of the Federal budget ( according to the recipes of Keynes and Samuelson) from a passive instrument of government economic policy into an active one. 'Positive counter-crisis programmes' were developed in the USA which envisaged changes in the scale and structure of Federal revenue and expenditure to stimulate private capital. The use of taxation as a lever to affect the process of reproduction was markedly increased.
The policy of active budget financing, however, when the Federal deficit was considered an indicator of 'dynamism', was succeeded in the second half of the 1960s by a policy of fighting 'overheating'.
The unbalanced state of the budget was now considered a 'generator of inflation', and an active counterinflation policy began to be pursued then (at the end of the 1960s and in the early 1970s). The broad set of measures against 'overheating' included the raising of income tax by 10 per cent, a raising of payments into the social security and insurance funds, and an increase in indirect taxation. The discount rate for banks was raised, and Federal expenditure on new building was cut _-_-_
~^^1^^ Walter W. Heller. New Dimensions of Political Economy (Harvard Univ. Press, Cambridge, Mass., I960), p 2.
111 back. The 'counter-inflation economies' in 1969--71 led to a reduction of Federal spending on research not connected with military needs (by $1.1 billion in 1969/70 compared with the preceding = maximum).^^1^^But the fall in production during the crisis of the 70s again led to a sharp new turn in the U.S. Administration's economic policy—from methods of 'cooling off of the overheated economy it went over once more to measures to stimulate economic growth. A most important trend was the very steep increase in arms spending. For the first time in U.S. history the Pentagon's budget exceeded $100 billion in these years. In 1977 the U.S. military budget came to $113 billion. On the other hand the Administration was trying in every way to cut social spending so as to find the vast sums required by the monopolies.
Another example of the crisis of state monopoly control is Japan. In a situation of the deepest economic crisis in the past 40 years, Japan's ruling circles are trying to find a way out by stimulating inflation. Evidence of that, in particular, is the budgets of recent years, which have provided for a substantial increase in appropriations for government contracts for industry and building firms.
The cost of living continues to mount. In 1970, for instance, railway fares were increased by 50 per cent, and charges for telephone calls by the same amount, while the cost of telegrams doubled and trebled. Tuition fees in state colleges nearly trebled, and charges for medical care were increased. The price of bread, salt, dairy products, and other foods rose. The newspaper of the Communist Party of Japan Akahata called the 1976 budget the most swingeing since the war and said that the idea behind the government's policy was to foist the whole load of the crisis onto the shoulders of the people.
The contradictions of state monopoly control of the economy have also revealed themselves in the Federal Republic of Germany. While its ruling circles were trying, _-_-_
~^^1^^ On this point see: Manpower Report oj the President ( Washington, 1971), p 156.
112 in the early 1970s right 1o the beginning of 1974, to 'cool' the economy down by an active counter-inflation policy, there was a marked change in the situation after August 1974. The steady tendency of industrial production to fall encouraged an about-turn in West German state monopoly circles' economic policy. A line of priming the market by 'pumping' money into the economy was taken into their arsenal. A special state investment fund of ten billion marks was instituted by introducing extra taxes, and the volume of government orders was increased. A tax reform was carried out in 1975 with the aim of encouraging private investment and increasing funds for capitalist accumulation.The measures undertaken, however, did not yield the desired results. The West German press compared the economy to a horse that had been brought to water but which refused to drink. Given mounting underutilisation of production capacity, government priming could not ensure expansion. The additional funds injected further intensified inflation in the country.
The same zigzags in counter-crisis policy can be seen in the position in France, Great Britain, and Haly, where a tough economy policy in relation to the workers is combined (as in other capitalist countries) with various measures to encourage the monopolies (tax concessions, subsidies, etc.), increasing the domination of finance capital, and sharpening the contradictions of capitalist reproduction.
__ALPHA_LVL3__ THE STRUGGLE OVER REFORM OF WORLD CAPITALISM'S MONETARY AND FINANCIAL SYSTEMAnother important sphere in which Ihe crisis of state monopoly control of the economy is being manifested is that of world economic links, especially monetary and financial relations. The marked exacerbation of the world capitalist monetary crisis in the 1970s revealed the complete inadequacy of the attempts to control exchange rates and balances of payments.
For many years the objective development of the capitalist economy had already been putting the issue of reforming world capitalism's monetary and financial __PRINTERS_P_113_COMMENT__ 8---0372 113 system on the agenda. Spurred on by the pricks and stings of the monetary crisis the monopolies of various countries have been trying to create some kind of substitute for the Bretton Woods system. But their endeavours have come up against their contradictory interests and have themselves aggravated intcrimperialist contradictions.
American monopolies play the chief role in the fight over monetary reform. Their spokesmen decided to take this matter into their own hands so as to consolidate U.S. finance capital's international position and to counter the growing centrifugal tendencies in the capitalist world. Their theoretical platform is a refusal to return to the gold standard and a proposal to substitute some form of 'paper gold' for gold in international settlements; there is no unanimity among the American experts, however, on the point of the specific substitute.
They originally proposed using their national currency, the paper dollar, as the substitute for, and full equivalent of, gold. We have already mentioned (in Chapter 2) that 'dollar saturation' of the world capitalist economy was one of the reasons aggravating the monetary crisis. Although certain influential circles in the USA continue to call for retention of the dollar's supremacy in international monetary relations, their stand can hardly, therefore, be considered realistic.
One of the directors of the Swiss bank Credit Suisse, Ilein/ R. Wuffli, stated at the end of 1975 that
It would surely be illusory today to suppose one could revive the 'Pax Americana', and consequently the Brelton Woods system. It is impossible to turn the clock hack. Monetary matters are a not negligible part of the problems of power, and it is an established fact that power is shared in little things in the world today as well as in big ones. That amounts to saying that a monetary system based solely on the American dollar is no longer conceivable = today.^^1^^
U.S. spokesmen, allowing for the changes of recent years and the position of their rivals, have put forward several proposals that retain their former position ( rejection of the gold standard) but camouflage the dominance _-_-_
~^^1^^ Heinz H. Wullli. La crise monelaire a la luniii're de Vhistoirc coi/tcniporaine (Credit Suisse, /.urich, ID7T)), p 21.
114 of their financial interests. The machinery of the International Monetary Fund's 'special drawing rights' was worked out, and is being partially operated, on the basis of the proposals of the American economist Robert Triffin, for = example.^^1^^ We have already mentioned, in describing the monetary and financial crisis, that these international currency units not only did not solve the problem of liquidity and of controlling balances of payments but also created a new sphere of interimperialist co-operation and competition.Other specific projects for 'improving the health' of the world monetary system have also been widely discussed among American bankers and economists, and various surrogates of world money suggested as substitutes for gold and the paper dollar.
One of the international financial and credit payment instruments being proposed is that of 'swap' operations, i.e. transactions that consist in the simultaneous buying and selling of currencies for a certain = period,^^2^^ broad use of international payments by order (postal and telegraphic transfers, etc.), and international computermoney transfers.
The introduction of international computer-money transfers is linked with an ever-widening trend toward computerisation of social production in the age of the scientific and technical revolution. In the United States and several other developed capitalist countries computers are being used to keep accounts. Bourgeois economists link the 'computerisation' of money circulation with the development of the tendency in this sphere toward a 'dematerialisalion' of money. The use of computers in money circulation and trade as a technical and organisational means has a progressive significance, but with the predominance of private property and commercial secrecy in capitalist society computerisation will inevitably have a limited character.
_-_-_~^^1^^ On the history of this matter see, in particular: J. Rueff. IS Age de V inflation (Payot, Paris, 1903), p 142.
~^^2^^ See: Christian Coux and J.-F. Landcau. Le peril americain (Calmann-Lcvy, Paris, 1971), pp 90--97; Express (Paris), 25 March 197.'!, dc-
__PRINTERS_P_115_COMMENT__ 8* 115The spokesmen of Western European and Japanese financial circles have more than once in recent years criticised U.S. proposals for one form or another of 'paper gold' and other specific forms of repudiating the gold standard, viewing them as attempts to impose dollar hegemony on the capitalist world in camouflaged form.
It is necessary to revert to the idea that it is indispensable to tie currencies to a neutral standard recognised by all (a director of Credit Suissc said in 1975)__ One can therefore hardly conceive of anything else than a system based on gold.^^1^^
The supporters of some form of return to a gold standard have been growing in numbers in France and other capitalist countries of late, especially in Switzerland, and also in West Germany, Australia, etc.
The United States resolutely opposes plans for a return to a gold standard, considering them a blow to hegemony of the dollar. American spokesmen say that only gold producers would gain from a universal raising of the price of gold (i.e. South Africa and Australia) and countries that have been accumulating gold in recent years at the expense of the United States (vi/., West Germany, France, Switzerland, etc.).
Considering the acuteness of interimpcrialist contradictions and the real balance of power there is little chance of there being a return to a gold standard in the near future. Evidence for that is provided, in particular, by the common practice of what is called 'currency pluralism', by which is meant the rise in the capitalist world of 'zones of influence' of a sort of the currencies of several capitalist countries (the Japanese yen, West German mark, French franc, Italian lira, Swiss franc, etc.). This fact is being noted by bourgeois experts; The Economist, for instance, wrote at the end of 1973 of the rise of a 'Euromark zone' in which nine billion West German marks were circulating. According to it, many Arab sheikhs had been preferring for some time to settle accounts with Western countries in marks rather than American = dollars.^^2^^
_-_-_~^^1^^ Heinz R. Wuffli. Op. cit., p 21.
~^^2^^ The Vcoiior/list, September 1973, No.~1.
116The spokesmen of influential Western European business circles have been trying to knock together a currency union in recent years with a currency unit tied to gold as a moans of strengthening their position against American and Japanese = rivals.^^1^^ It must be said, of course, that there are serious disagreements and contradictions among the Western European countries themselves on both monetary problems and the question of creating a currency union. The measures being taken by them, however, are an indicator of Western Europe's growing resistance to U.S. monetary policy.
'Currency pluralism' has been engendered by the changes in the balance of power among capitalist counries and the growing expansion of imperialist groupings, and is evidence of sharpening competition and the collapse of attempts at state regulation of the currency crisis.
In April 1978 the decision of the Interim Committee of the International Monetary Fund, set up at the beginning of the 70s to draft reforms of the capitalist monetary system, by which the principle of 'floating' exchange rates would be adopted, the role of gold reduced, and the reserves of the Fund increased, was brought into operation under U.S. pressure. These measures, however, cannot lead to stabilisation of exchange rates in the capitalist world.
The bankruptcy of state control is a generally recognised fact today not simply in the fight against the cyclic crisis or in dealing with currency difficulties. Wo have already mentioned state monopoly capitalism's unsuccessful attempts to cope with the energy and raw material crises and the ecological problem.
__ALPHA_LVL3__ THE URBAN CRISIS, A NEW SYMPTOM OF THE CRISIS OF STATEThe crisis of state control can be seen very clearly in the development of capitalist cities today. In capitalist society the city has always been a concentration of polos of wealth and poverty and hence a source of deep _-_-_
~^^1^^ Sec: Heinz H. Wul'fli. Op. cit., p 28.
117 socioeconomic and political contradictions. But in today's conditions these contradictions have taken on a really profound and acute character which makes it possible to speak of the crisis of the city in capitalist countries.One of the most striking examples of this is the financial and budget crisis of American = cities.^^1^^ The world press has written much in recent years about the catastrophic financial position of New York, the richest city in the United States and the economic capital of the whole capitalist world.
U.S. propaganda tries to picture New York's crisis as 'unique', allegedly due to the bad management, incompetence, and extravagance of one mayor or another, of some or other members of the city administration, but it is enough to refer to the statements of the mayors of other American cities to see the injustice of the accusation. 'There is no choice in Detroit,' Mayor Coleman A. Young told the Joint Economic Committee of the U.S. Congress in June 1975. 'We instituted a hiring freeze. Then we laid off needed city workers in the sanitation department. We shut down the city's recreation centres, we laid off rat exterminators and dog catchers,... we closed the city's immunisations = clinics.'^^2^^
In an interview with U.S. News &. World Report Mayor Kenneth A. Gibson of Newark, New Jersey, said that he was 'constantly ... asked to rank Newark's problems in order of importance: housing, education, employment, health care, public safety, sanitation, environment, child care, recreation, senior citizens' programs.... If I could have any one problem solved immediately it would be the financing and improvement of education ... all cutbacks in services in Newark are a direct result of the high cost of education—a cost the city of Newark can bear no = longer.'^^3^^
The Mayor of St. Paul, Minnesota, Lawrence D. Cohen, told the same journal that his city, 'with already _-_-_
~^^1^^ See: Gus Hall's Report to the 21st Convention of the Communist Party of the USA, The Crisis of U. S. Capitalism and the Fight Back (International Publishers, New York, 1975), pp 13--20,
~^^2^^ Cited from International Affairs, 1976, 5: 75.
~^^3^^ U.S. News and World Report, 1975, 78, 14; 43,
118 overstrained ... revenue sources', 'can no longer Finance the ever-increasing cost of essential municipal = services'.^^1^^One could easily continue with statements of that kind. The majority of cities in many other countries, as well as in the United States, have been in a state of permanent budget crisis in recent years. Given all their mounting financial difficulties the city authorities are forced to cut and curtail programmes of public and social services and dismiss city employees, with the consequence that urban life is becoming increasingly unattractive, tense, and dangerous. Taxes are rising, which is worsening the position of the workers.
In spite of harsh economies in public and social spending, however, and in spite of the huge rise in taxes, the financial position of most capitalist cities continues to deteriorate.
One reason for this state of affairs is the steep increase in spending on various parasitic needs caused by the bureaucratisation of business and public life due to the development of state monopoly capitalism, and to the growth of crime and increase in corruption and various forms of misappropriation of materials and funds.
Bureaucratisation means a substantial increase in the size of various administrative bodies. (1) This ' proliferation' of management by cities creates unnecessary rivalry between the various authorities governing one and the same area, the vital object of competition being every dollar received from the taxpayers. (2) It increasingly disrupts general co-ordination of the activities of the various administrative bodies, which naturally impedes the introduction of modern equipment and progressive methods of management and servicing. (3) Each administrative unit operates, in fact, independently, without considering its neighbours or society as a whole, and sometimes even to the detriment of their interests.
The crisis of the cities and attempts at state control of it are symptoms of the sharpening of the general contradictions of the capitalist mode of production af its present stage of development.
_-_-_~^^1^^ Ibid., p 46.
119 __ALPHA_LVL3__ THE CRISIS OF STATE MONOPOLY CAPITALISMAnalysis of the bourgeois slate's actual lines of activity indicates that state monopoly control, to which no small hopes of stabilising capitalism were attached, is not at present mitigating capitalism's contradictions but is deepening and sharpening them.
It is not simply a case of reactionary groupings' drive to use the arms race as a counter-crisis stabiliser or of their striving to put the whole burden of the crisis onto the masses of the working people so as to enrich the monopolies; what is new is that the whole system of state monopoly control is unable to provide the traditional counter-crisis measures and to curb the anarchic, antagonistic character of the world capitalist economy. The broad, 'all-pervading' character of this phenomenon permits us to speak today of a crisis of state monopoly capitalism as an integral economic system.
The concept of the crisis of state monopoly capitalism is employed by many present-day Marxist economists. As the international theoretical conference on 'Lenin's Doctrine of Imperialism and the Contemporary Stage of the General Crisis of Capitalism', organised by World Marxist Review in 1975 in collaboration with the Central Committee of the Communist Party of Czechoslovakia, and attended by representatives of the Communist and Workers' Parties of 46 countries, it was stressed that the present economic crisis of capitalism was an expression of the crisis of the whole system of state monopoly control based on the Keynesian and other theories previously inscribed on its = banner.^^1^^
The all-embracing character of the crisis tendencies in developed capitalist countries, said John Pittman, member of the Political Committee of the CPUSA, makes nonsense of bourgeois-reformist contention that state monopoly economic regulation assure material affluence and social stability for all members of society, and make the class struggle and, consequently, socialist revolutions = 'superfluous'.^^2^^
_-_-_~^^1^^ See: Contemporary Imperialism in the Light of Lenin's Doctrine. World Mar.Hsl llcriew (British edition), 1',)7(i, 19, .'-); 12--22.
~^^2^^ Ibid., p 10,
120Some of those taking part in the discussion, in emphasising the fact of a crisis of state monopoly capitalism, spoke of the beginning of a new phase of its general crisis, but most speakers considered it more correct today to talk of shifts and changes within the old stage of the general crisis of = capitalism.^^1^^
French Marxists have devoted much attention to the point of the crisis of stale monopoly capitalism in recent years. The thesis of such a crisis was lirst advanced in France by Paul Boccara during the week of Marxist thought in Paris at the end of = 1967.^^2^^ His first major article on it appeared at the end of 1969 and beginning of = 1970.^^3^^ The proposition of a crisis of state monopoly capitalism was subsequently developed and substantiated in a number of individual and collective works by French Marxists, in which this crisis was treated as a component of the general crisis of = capitalism.^^4^^ It should not, however, in their view, be considered simply as a manifestation of the latter, or rather simply as an expression only of the capitalist economy's cyclic difficulties. It is a matter of deep, specific contradictions, the most important of which is the tendency to protracted overaccumulation of capital. The crisis of state monopoly capitalism is becoming a convergence of mounting contradictions in various spheres of social life and in the economic = field.^^5^^
_-_-_~^^1^^ Ibid.
~^^2^^ A propos of this see: Paul Boccara. Etudes sur le capitalisme monopoliste d'Etat, sa crise et sun, issue (Editions sociales, Paris. 1973), p 314.
~^^3^^ Paul Boccara. La crise du capilalismc mouopoliste d'Etat et les luttes des travailleurs. Economic et politique, 1969, 185; 1970, 180--187.
~^^4^^ The most important of these works is the collective twovolume study of state monopoly capitalism published in 1971 Traits d'econoniie politique. Le capitalisme monopoliste d'Etat (Editions sociales, Paris), in particular pages 90--97 of Volume I; the proceedings of the French Communist Party's theoretical conference at Nantcrre in May 1975 (see: La Crise. Economie et politique, 1975, 251, 252, 253); and Paul Boccara's collection of papers mentioned above on problems of tbe development of state monopoly capitalism and its crisis (Paul Boccara. Op. cit., 1973, pp 52, 109, 240, 319. 400--407, etc.).
~^^5^^ See in particular: Tr/iile nmr.iisle d'economic politique, Vol. I, pp 90--97; La Crise (ftcoiwmie et politique, 251, 252, 253); Paul Boccara. Op. cit., 1973, pp 230, 239.
121In evaluating the present crisis and its special features, we must not forget the efforts being made by the bourgeoisie and opportunist ideologists to distort the content of the phenomena and to try and disorient the masses of the workers so as to weaken their fight against those guilty of the crisis. Many bourgeois and opportunist ideologists and politicians, as was noted at the 197f) conference in Prague, are trying to picture the contemporary crisis as purely or mainly cyclical and consequently temporary, transient, and surmountable on the basis of the capitalist cycle = itself.^^1^^ It follows from this evaluation that the crisis does not provide additional grounds for activising the anti-monopoly struggle so as to curb the monopolies' power and end the economic system based on it.
The existence of an opposite view was also noted by speakers at the Prague = conference.^^2^^ Its adherents consider that there is a complete collapse of modern bourgeois society's machinery and that there cannot be any question therefore of a cyclicity of production peculiar to modern capitalism. This conception suggested the conclusion that the present recession in the capitalist economy was not surmountable, and that imperialism had used up its potential for survival and development. The next step from that would be either the opportunist notion of an automatic collapse or inevitable self-- transformation of capitalism, or the ultra-left notion that it did not require much effort to destroy monopoly = rule.^^3^^
In the words of K. I. Zadorov, the Editor-in-chief of World Marxist Review, however,
the present situation in the capitalist world cannot bo adequately assessed and understood unless wo take into account the natural deepening of the general crisis of capitalism and the operation of the universal economic laws of bourgeois society.
This leads to the right conclusions concerning the strategy and tactics of the Communists' political struggle. Firstly, it obliges us to consider the novelty of the situation, the qualitative change in the general crisis of capitalism and, _-_-_
~^^1^^ See: World Marxist Review (British edition), 1976, 19, 3: 22,
~^^2^^ Ibid.
~^^3^^ Ibid.
122 secondly, it warns us against underestimating the still available strength of monopoly capital, and its economic and political = possibilities.^^1^^
L. I. Brezhnev, characterising the crisis of the 1970s in the Central Committee's report to the 25th Congress of the CPSU, stressed that
_-_-_it is farthest from the Communists' minds to predict an 'automatic collapse' of capitalism. It still has considerable reserves. Yet the developments of recent years forcefully confirm that capitalism is a society without a = future.^^2^^
~^^1^^ World Marxist Review (British edition), 1976, 19, 3: 22.
~^^2^^ Documents and Resolutions. XXVth Congress of the CPSU, p 34,
[123] __NUMERIC_LVL2__ 6 __ALPHA_LVL2__ The Ideological and Political Crisis in Bourgeois Society __ALPHA_LVL3__ [introduction.]Underlying the ideological and political crisis are processes taking place in the realm of production and the economic foundation of capitalism, the weakening of its position in connection with the world-significant achievements of socialism in the USSR and countries of the socialist community. It would bo wrong, however, to identify the political crisis with the economic one.
The ideological and political crisis has a certain autonomy. Today's political crisis affects the whole aggregate of capitalist society's social relations. It is a crisis of its political structure, displayed in an unprecedented sharpening of the class struggle.
__ALPHA_LVL3__ THE CRISIS OF CAPITALISM'S STATE AND PARTY POLITICALThe evolution of the bourgeois state and of the other machinery of authority in bourgeois society has a prominent place in the multilevel content of this crisis. In our description of economic development in the 1970s we already drew attention to this feature of it as the crisis of state monopoly control of the economy.
The General Secretary of the Communist Party of Great Britain, Gordon McLennan, described this crisis thus in 1976:
Capitalism's crisis has ID ore than economic consequences for Britain. It is ahove all a political crisis seen partly in the ever-deepening crisis in British consl itutional arrangements. This is seen at ils sharpest point in Northern Ireland where the 55-year-old constitutional 'settlement' lias collapsed. It is now also seen in relation to the growing and insistent
124 demand for devolution of govormnenlal powers to Scotland and Wales, and as a consequence 1he need to devolve equal powers to = England.^^1^^
The problems of regional autonomy and dissatisfaction with the extreme centralisation of governmental powers are hence not a local episode typical of one separate capitalist country or another, but are a general phenomenon reflecting the fcalures of contemporary slate monopoly capitalism.
The fusing of the monopolies and the bourgeois state has markedly intensified the development of bureaucracy in the economy and the whole social life of capitalist countries. There has been a huge expansion of the governmental apparatus in Western countries. In the United States, for example, the rale of development of new Federal administrative agencies has been 40 times or more as fast in the past 15 or 20 years as in the first century of the USA's existence. In 1961-3 alone 46 new Federal bodies were set up, exactly as many as had been instituted in the preceding 124 years.
In the 20 years from 1956 to 1975 inclusive the army of civil servants increased six times over in Japan, 4.5 times in the United States, quadrupled in Great Britain and France, and more than doubled in Italy. The proportion of persons employed in governmental institutions is 26.1 per cent of the total working population of the United Stales, 25.2 per cent of that of Great Britain, 23.4 per cent of the French working population, and 20.5 per cent of the Italian. When account is taken not only of public services and enterprises but also of work performed for the government and paid for out of Ihe budget, one person in five is employed on national work in Japan arid West Germany, one in four in Italy, one in three in the United Stales, Great Britain, and France. The numbers of purely administrative civil servants are increasing particularly rapidly. In Italy, for example, there are 13 times as many as eighty years ago, in the United Stales 21 times as many as seventy-six years ago, and in Japan more than 45 times as many as _-_-_
~^^1^^ Gordon McLennan. Pressing Problems of Britain. World Marxist llcricw (British edition), 107C), 7.9, 4: 1'i.
125 eighty years ago. American economists estimate that 75 000 civil servants are already occupied in carrying out various forms of Federal control over the operations of private enterprise in the United States at a cost to the taxpayer of some $,'i billion a year.Bureaucracy, which (in the words of Karl Marx) `takes itself to be the ultimate purpose of the = state',^^1^^ has merged with the financial upper crust and become part of the state monopoly system, which cannot ensure normal development of contemporary bourgeois society.
A typical example is the situation in modern Italy. In the middle of 197(>, in the words of Enrico Bcrlinguer, General Secretary of the Communist Parly of Italy,
the major political aspect of the Italian crises—which is the gravest one, most seriously affecting all the others—is that Italy more and more needs the coming of an Executive that would function as leader and settler of the Government's aims and objectives and activity. For some years the country has not been governed in the true sense of the word. Governments have lived behind the country's back, exhausting themselves in tiring negotiations to patch up and maintain an ever crumbling majority, arid to compose as best they can the differences and rivalry of the parties, groups, currents, and individuals. And this has resulted in progressive paralysis of the = Executive.^^2^^
The crisis of the state monopoly structures, as was noted at the 22nd Congress of the French Communist Party, is an important ingredient of the 'global crisis' that now exists in France. Georges Marchais, the General Secretary of the Party, said in the Central Committee's report to the Congress:
The contradictions of the system are sharpening to the point of disorganising it and disrupting its functioning__
The crisis is political because the stale at the service of Big Business is involved in every problem today, and because of that the struggling masses are turning more and more against it....
The crisis is ideological and moral, because the law of profit, the most powerful law governing the conduct of those _-_-_
~^^1^^ Karl Marx. Contribution to the Critique of Hegel's Philosophy of Law. In: Karl Marx and Frederick Engels. Collected Works, Vol. 3 (Progress Publishers, Moscow, 1975), p 46.
~^^2^^ See: Unita, 14 May 1976.
126 who art: at the lop of the ladder, spares no realm of social life and nourishes the development of crime, corruption, and = lies.^^1^^
The current political system in the United States, built up under the impact of the development of state monopoly capitalism, the scientific and technical revolution, and the expansion of U.S. monopolies, had a certain effectiveness for some years. By a combination of methods of compulsion and concessions, suppression of social unrest and switching of it into 'safe' channels, the ruling class managed for a time to achieve a lessening of the tension of the class struggle and a certain weakening of the position of the progressive forces, and to spread conformist moods among the masses.
The U.S. political system had already entered upon a crisis that became particularly acute in 1974-8. One of its most striking symptoms was the weakening of the authority of the Presidency, which plays an enormous role in the governmental apparatus of the United States. Watergate, and the unprecedented resignation of the President, re-elected by a majority only two years previously, and the sharpening of the contradictions between the Presidency and Congress were all evidence of the growth of disagreements among the ruling elite, of an undermining of the machinery for adopting and implementing governmental decisions in a situation of sharpening of capitalist society's antagonisms.
The disorganisation of the U.S. political system is also manifested in a deepening of the crisis of the twoparty machinery. The position of the Republican Party, closely linked with the monopolies, vis-a-vis the Democratic Party has been greatly undermined. While the Republicans held the Presidency since 19f>8, their position in Congress, and among governors and state legislatures, was substantially eroded during recent years.
As for the Democrats, this party, as a result of sharpening of its inner contradictions between the right wing and liberals, cannot provide society with effective ways and means of dealing with the mounting economic and _-_-_
~^^1^^ 22° Corigres du Parti Comimmislc Franfais, 3-8 fevricr 1970. Colliers du Communisine, 197C, February/March, pp 23--24.
127 social problems. Independents have become the biggest of the three main contingents of the American electorate, and constituted 35 per cent of all voters in = 1975.^^1^^ Only 55 per cent of those with the franchise went to the polls in the presidential election of 1972, and only 45 per cent in the congressional and local elections of = 1974.^^2^^ U.S. voters are losing confidence in their ability to influence state policy through the traditional political channels. __ALPHA_LVL3__ CORRUPTION--THE `~SECOND LAW OF VALUE~' OF THE WESTThe crisis of capitalist society's state institutions is to be seen with special clarily in the demoralisation and corruption of its top people. The growth of government bureaucracy has become a gigantic source of corruption for political and commercial ends. Never in all the history of capitalist society have the United Stales and other capitalist countries known bribery, corruption, and other machinations of Big Business on such a scale as today. That is the conclusion reached in January 1976 in the joint report of the Office of Management and Budget (the auditing body of the U.S. Congress) and the Prices and Consumer Protection = Organisation.^^3^^
Corruption has now actually become a kind of 'second law of value' of capitalism, because the leading monopolies obtain the lion's share of their profits through favourable prices and other terms for government purchases. The state treasury serves as a quite legal and decorous way of robbing the mass of the taxpayers. It is not without reason that the share of small and medium-siml businesses in government orders does not exceed 17 to 20 per cent in the USA, and even 5 per cent in France.
Another source of enrichment of the monopolies is capitalists' tax evasion, which monopolies like the members of the notorious international oil cartel have _-_-_
~^^1^^ Mlrovaya ekonomika i mezhdunarodnye otnosheniya, 11)70, 19, 4: 21.
~^^2^^ Facts on File Yearbook, 1973, p 61; idem, 1975, p 55.
~^^3^^ International Affairs, 1970, 23, 4: 127.
128 brought to a kind of perfection. The monopolies and their agencies make huge profits through the stock exchange and other forms of speculation.But all these forms of pressure do not usually attract the wide attention of the bourgeois press; much more space is given to various examples of bureaucratic corruption in which private enterprise figures either as the victim or at least as only an unwilling associate of illegal operations.
At present, with a veritable avalanche of exposures of bribery of officials and illegal political 'contributions' in the United States and abroad, corruption has become a banal, quite normal = affair.^^1^^
The classic example of contemporary bribery, a kind of symbol of the corruption of the top state monopoly executives of capitalist society, is the affair of Lockheed, one of the biggest American aircraft companies. This example is particularly scandalous because this corporation is a main supplier of the Pentagon, taking first place in the United States for total military orders.
A congressional commission reported that more than 200 retired officers of various rank were working for Lockheed at the beginning of the 1970s. The Pentagon, while a monopoly buyer of Lockheed's products, is at the same time a monopoly seller of Lockheed military equipment in other countries. New types of military aircraft are developed by Lockheed's designers and constructors, but on the Pentagon's money. In other words, it is impossible to say where Lockheed ends and the Pentagon begins.
The flood of exposures of Lockheed's illegal operations was initially released by the Senate Subcommittee on the affairs of multinational corporations, which gave publicity to the text of certain secret correspondence and memoranda of the company's executives, from which it came out that the firm had paid $ 22 million in bribes and 'payoffs' in the preceding live years alone in order to ensure sales of military planes and equipment and of transport and passenger aircraft. Bribery was widely practised in Western Europe, Latin America, Asia, and _-_-_
~^^1^^ See, for example, Time, 1976, 107, 8: 6.
__PRINTERS_P_129_COMMENT__ 9---0372 129 the Middle East. Many politicians and businessmen in Greece, Spain, South Africa, Sweden, Bolivia, Vene/uela, and a whole number of other countries received fat `payoffs'.In Japan, for example, Lockheed paid out $ 12 800 000 to ensure orders for fighter planes and transports. The political scandal that developed there in connection with the bribery affair shook the position of the ruling Liberal Democratic Party and sharpened the factional struggles within it.
The Lockheed story, in spite of its sensational character, is typical of Big Business in the United States and other capitalist countries. As the investigation of it brought out, it was only the tip of the iceberg; the invisible part is immense; more than a hundred of the biggest U.S. concerns at least have been implicated in the major bribery and 'fiddles' connected with this affair.
The system of 'payoffs' misappropriation, and other forms of corruption that has been spreading in recent years in all capitalist countries only reflects the deeply ingrained practice of Big Business's intrusion into the political life of these countries.
__NOTE__ "1" missing from "130" __ALPHA_LVL3__ THE GROWTH OF CRIME AND DRUG-ADDICTIONThe capitalist system, under which social inequality is legalised, does not ensure the most important human right, the right to work, and is unable to provide the conditions for harmonious development of the individual.
Mounting unemployment, a feeling of dissatisfaction, and a lack of prospects push many people onto the road of crime, and reinforce the ranks of the lumpen-- proletariat. The decline in the morals of bourgeois society is particularly marked in periods of socio-economic and political upheavals, when thousands of small businessmen are ruined and tens of thousands of people are thrown to the lower depths of capitalist society. In such conditions crime flourishes. According to the American press, shoplifting has become a veritable calamity. The number of customers detained in the act of this crime in the United States is four million a year. According to the 130 police, however, they catch only one thief in 35, the rest getting away with their loot. Everything is stolen, from little bars of chocolate to fur coats and jewels. An interesting poll was taken in the University of Massachusetts; 77 out of 100 students questioned said they had committed at least one theft, and half of them said they did so systematically. A 'test' of sorts was carried out in a New York department store: 500 customers were followed; it was discovered that one in twelve tried to filch something.
There has been a steep increase in the number of serious crimes in recent years. Every year a vast number of robberies are committed in the United States, many of them ending in grievous bodily harm or death. It has become a national problem in America to ensure people's safety in the streets and within their own homes. The streets of many cities, especially in badly lit districts, empty as darkness falls. A report published in the Wall Street Journal at the beginning of 1976 is typical; it observed ironically that 'contrary to the general trend, the one business that climbed steadily was the lock business.'^^1^^
The number of bank robberies in France in 1976 was twenty times higher than in 1967, and the number of robberies with violence five times as high.
American sociologists think the main reason for the rapid rise of crime to be the deteriorating economic situation, but many also link it with the use of drugs. Drug addiction has become an integral part of the 'American way of life' and is becoming a dangerous social problem. The U.S. governmental institutions formally responsible for fighting the drug traffic, put the number of heroin addicts at 600 000 and of marijuana smokers at millions.
Drug addiction is also growing in many other capitalist countries; in West Germany, for example, 2036 persons were detained by the police for illegal trafficking in drugs, and in the iirst half of 1975 nearly 1800 persons.
It is thought that addicts need to spend $60 a day to meet their craving for their drug; the source of the money is often becoming theft, robbery, and murder.
_-_-_~^^1^^ George Morris. USA: The Time of Discontent. International Affairs, 1976, 6: 108.
131 __ALPHA_LVL3__ THE DECLINE OF BOURGEOIS CULTUREThe ideology and culture of capitalism as a system based on the exploitation of man by man are more and more demonstrating its hostility to the vital interests and progressive aspirations of all mankind.
The 'mass culture' of modern bourgeois society expresses a deep crisis of spirituality, the repudiation in fact of the progressive traditions of bourgeois culture of the time of the bourgeoisie's accession to power. 'Mass culture' is considered today, in the West, as a most important means of maintaining and strengthening the monopolies' domination through ideological manipulation. Its main function is to ensure the general conformability of mass consciousness.
For that reason 'mass culture' is replacing the ideal of the elite-culture, creative individual characteristic of the Renaissance, the period of bourgeois society's first strides, by the ideal of 'consumer man', whose sphere of life and cultural interests is more and more closed in on a certain circle of things, services, and elementary physiological needs and psychological wants.
That is why the dissemination of licentious pornography, cruelty, and violence, the cult of things, complete neglect of human reason and man's real capabilities, and even worse, every kind of belittling and disparaging of them, have become so typical of modern bourgeois culture in all its diverse forms. In that sense 'mass culture' is anti-humanist in essence, denying man as a creative individual whose development is the supreme aim and condition of the development of society as a whole.
At this point one must stress that Communists do not consider themselves the sole exponents of humanism. They respect those spokesmen of non-Marxian humanism who defend peace and are fighting against imperialist aggression and violation of democratic human rights, national oppression, and colonialism. For the fact is that this kind of general democratic humanism is the natural ally of Marxism-Leninism, and at the same time is rejected by the 'mass culture' of bourgeois society.
Anyone acquainted with the contemporary Western 132 `hits' of cinema and television, and bestsellers, is struck by the mediocrity of the spiritual world of their characters. The authors often seem to be competing with one another in amorality, in a desire to shock readers and viewers, divert them from pondering on the meaning of life, and substitute aggressiveness, irrationality, and individualism for the will to rational deeds for the general good. This type of 'art' trains man in distrust of other people, and is becoming a kind of 'school of violence'.
Violence is propagated from the television screen. Every American child can see, at any moment on one of the twelve TV channels, a scene of murder, rape, robbery, or fighting. By the time he or she is ten his or her memory already contains 18 000 TV murders. The constant showing of violence on television blunts the feelings of viewers, especially of children. As a result many of them develop an inner aggressiveness and on occasion they may, without thinking, do everything they have seen on the TV screen. Another phenomenon of the decay of modern bourgeois society's spiritual life is the psychology of pessimism that literally permeates bourgeois art and literature. Pessimism is closely allied with the alienation of members of Western society from their work and its results, and from one another. The capitalist system of business and bourgeois culture force the worker not to take pride in his work and only value the job.
During economic crises the labour process more and more takes on a character alien to the worker that gives him neither moral nor intellectual satisfaction. From this angle the 'mass culture' of bourgeois society with its conceptions of society as a single consumers' club with common rules of play suffers double fiasco during crises. First, the illusion of the 'universality' of the procedures of the consumer society is shattered with mounting unemployment, fall in real incomes, and deterioration of the workers' life. On the other hand, the inadequacy of the 'consumer' psychology becomes particularly clear, and the need for every member of society to take an active stand in defence of his or her interests and to fight to change the very organisational foundations of social life.
133When wo call the preaching of individualism a characteristic of the 'mass culture' of present-day bourgeois society we need to make a few points about it.
State monopoly capitalism is now giving rise to numerous, varied forms of 'collective' consciousness in bourgeois society that outwardly operate as a negation of the former individualism. Man is more and more losing his independence in the realm of spiritual life. A ramified, skilfully directed system of 'social opiates' is converting the individual's spiritual world into an object of ideological manipulation planned in advance.
The changing social relations in which people find themselves in daily dependence on the powerful forces of state monopoly capitalism and the complicated bureaucratic system are inevitably finding reflection in the sphere of ideology and leading to a conflict between traditional individualist ideals and the 'external' frameworks that the bureaucratic system imposes on man.
The 'levelling down' of the individual caused by state monopoly bureaucratisation is closely linked inwardly with the traditional individualism of bourgeois society. In the last analysis it is based on the interests of private property to which, from the angle of the top financial oligarchy of society, the functioning of the state monopoly system is also subordinated.
The decay of spiritual culture, the cult of philistinism, the decline in morals, and the orgy of speculation, corruption, and crime are demoralising both society and man.
An equally important ingredient of capitalism's ideological and political crisis in the 1970s is an intensification of the monopolies' attempts to impose reactionary regimes on society and the resuscitating of various right extremist, neofascist trends.
__ALPHA_LVL3__ THE GROWTH OF REACTION AND MILITARISMThis is a matter, above all, of dangerous trends opposed to the process of detente, and an intensification of the activity of the most reactionary circles in a number of countries. L. I. Brezhnev, addressing the Berlin __NOTE__ Missing "1" in "134" 134 Conference of European Communist and Workers' Parties in June 1976, said:
The success of international detente has inspired and strengthened the forces of peace and progress, and has heightened their prestige and influence among the people. Tt has shown that the positions of the realistically thinking representatives of the ruling circles in the bourgeois countries rest on solid ground. But it has also alerted and activated the forces of reaction and militarism, who would like to drag Europe and the entire world hack to the 'cold war' and the time of nuclear brinkmanship. It has alarmed those who wax fat on the production of weapons of death and destruction, who cannot envisage any other political career except that of launching 'crusades' against socialist countries, against Communists, and those who openly call for ' preparing for a new war', as the Maoist leaders in China are doing in the hope of benefiting from the setting of countries and peoples against one another.
These different forces oppose detente in different ways. However, their main objective is to further accelerate the arms race which is already of an unprecedented = scope.^^1^^
Militarism has always been an integral feature of imperialism, but its consequences are truly catastrophic today. Statisticians calculate that while 5 200 000 persons were killed in the wars of the eighteenth century and 5 500 000 in those of the nineteenth century, World War I (1914--1918) already cost mankind ten million lives and twenty million wounded and crippled. The total damage caused by it is estimated at $338 billion. During World War II (1939--1945) more than fifty million people were killed and more than ninety million wounded. The total damage caused by it exceeded $4000 billion.^^2^^
What can one say of the new world war to which the most reactionary circles of imperialism are pushing the world, this time using nuclear missiles? Such a war would lead to the death of hundreds of millions of people. It would be fraught with the destruction of whole _-_-_
~^^1^^ For Peace, Security, Cooperation and Social Progress in Europe (Novosti Press Agency Publishing House, Moscow, 1076), pp 6-7.
~^^2^^ See: L. M. Tsyrlin. Voi/enizatsit/a ekoitomiki i nauki vstranakh kapilala. Kkonomiko-statislichesskii/ analiz (Militarisation of the Economy and Science in Capitalist Countries. An Economic, and Slafistical Analysis), Nauka Publishers, Moscow, 1970, p 3.
135 countries and nations, destruction of the biggest historical and cultural centres on all continents, and an increase in radiation such as would lead to fatal genetic consequences for both the present and for coming = generations.^^1^^ Norbert Wiener, one of the founders of cybernetics, said in his God and Golem, Inc.:As the Soviet economist N. N. Inozemtsev, member of the USSR Academy of Sciences, has written, imperialism's preparation of a new war is not simply a sword of Damocles hanging over nations' future, but a criminal waste of colossal material resources that could multiply the national wealth of all countries without = exception.^^3^^There is a sin, which consists of using the magic of modern automatisation to further personal profit and let loose the apocalyptic terrors of nuclear = warfare.^^2^^
In the fifty years 1921--1970 the gross national product of the capitalist world quintupled, according to official figures; and the direct military spending of capitalist countries alone increased more than = tenfold.^^4^^ Bourgeois propagandists' references to the alleged stabilising character of military spending for the capitalist economy have been completely refuted by the economic crisis of the 1970s, which showed that the arms race cannot provide normal conditions for systematic, long-term, extended reproduction. It leads to an intensifying of contradictions that flare up in periods of a general deterioration of the market situation.
But the negative effects of militarism are not limited to that. It has a political tendency of a very dangerous kind, as well as economic and military ones. With militarisation of the economy and the arms race, a 'military-industrial complex' has been built up in many capitalist countries. This alliance of monopolies involved in war production with the military and top _-_-_
~^^1^^ On this point see in particular: N. N. Inozemtsev. Contemporary Capitalism: New Development and Contradictions. Progress Publishers, Moscow, 1974, pp 56ff.
~^^2^^ Norbert Wiener. God and Golem, Inc. (MIT Press, Cambridge, Mass., 1964), p 52.
~^^3^^ N. N. Inozemtsev. Op. cit., p 56.
~^^4^^ See: L. M. Tsyrlin. Op. cit., p 6.
136 echelon of the state machinery is becoming the task force of modern monopoly capital.During the economic crisis of the 70s there was an intensifying of the activity of the military-industrial complex in many countries. It is playing an increasingly sinister role in both foreign and home policy, operating as one of the most influential reactionary forces, exerting a very negative effect in the field of ideology and propaganda, preaching amorality, and spreading the cult of violence, racism, and chauvinism. Its activity is strengthening the tendency organically inherent in monopoly capital to set up right-wing authoritarian regimes and dictatorships. In today's conditions fascism is assuming the most varied faces, including disguises. The term 'neofascism' is being used more and more often, but that does not alter the heart of the matter.
The shifts in the social structure of bourgeois society under the impact of the economic crisis deserve consideration. The worsening of the position of the urban petty bourgeoisie, for example, unable to hold out against the competition and onslaught of the big monopolies, and the spreading ruin and deterioration of the living conditions of comparatively broad strata of the peasantry and small farmers are giving rise, in view of their ambivalent position, not only to anti-monopolistic moods that make them objectively allies of the working class, but also to illusions about the possibility of returning to the old, pre-monopoly conditions of 'free competition' and are impelling them to seek another 'defender'. Such moods make this social group very susceptible to neofascist demagogy in certain circumstances, all the more so that neofascists cunningly appeal to the urgent needs and aspirations of the masses not disdaining to criticise the policies of bourgeois governments and monopolies, and pretending to be the true friends of the = people.^^1^^
One also needs to allow for philistines' psychological reaction to capitalism's inability to solve society's chief social problems. The growth of crime and progressing moral deterioration, corruption, and venality are giving _-_-_
~^^1^^ See: International Marxist Discussion. The Reality of the Fascist Menace. World Marxist Kerirw (British edition), 1973, 16, 4: 11, 12.
137 rise lo a constant feeling of disquiet, watchfulness, and fear for their property, for their future, and for the life of their near ones in the citizens of capitalist countries. An oppressive psychological stress is being created, and under its impact philistines fall for propaganda about the need for a 'strong authority' that would put an end to all 'democratic nonsense' and establish `law and order'.^^1^^As state monopoly capitalism develops the various links of the apparatus of modern capitalism's state machine have been functioning as vehicles of ultrareactionary trends. The drive to reactionary autocracy of the state bureaucracy has been intensifying; limitations have been put on bourgeois democracy, and at the same time an increase in the executive's uncontrolled interference in the processes of society's business, social, and cultural life.
It is important to stress that fascism, as history has shown, raises its head and takes the offensive in periods of political crisis.
__ALPHA_LVL3__ ANTI-COMMUNISM AND ANTI-SOVIETISM: A THREAT TO PEACEThe clearest expression of bourgeois society's ideological and political crisis is perhaps the development of anticommunism and anti-Sovietism. As the Programme of the CPSU stresses, anti-communism is imperialism's main ideological and political weapon; its essence is slander of the socialist system and falsification of the policies and aims of llie Communist Parties and of the teaching of Marxism-Leninism.
_-_-_Under the 1'also slogans of anti-Communism, imperialist reaction persecutes and hounds all that is progressive and revolutionary: it seeks to split the ranks of the working people and to paralyse the proletarians' will to light. Rallied to this black banner today are all the enemies of social progress: the linance oligarchy and the military, the fascists and reactionary clericals, the colonialists and landlords and all the ideological and political supporters of = imperialist reaction.^^2^^
~^^1^^ Ibid., p 12.
~^^2^^ I'rngranniie oj tlir Communist 1'arli/ <>/ the Soviet Union, Novosti Press Agency Publishing House, Moscow, 1!l(>2, pp 49--50.
138Thomas Mann called anti-communism the greatest stupidity of the age because it was directed against the main pattern of development of all society in our time, i.e. the transition from capitalism to socialism on a world scale, and against the chief humanistic and democratic aspirations of all mankind. That is why anti-communism, and its most dangerous form, anti-Sovietism, express a deep crisis of bourgeois ideology and politics.
The progressive forces of the whole world stress the great danger involved in the ideology and policy of anticommunism and anti-Sovietism. Much attention was paid to this problem at the Berlin Conference of European Communist and Workers' parties in June 1976. In its final resolution the representatives of 29 European Communist Parlies unanimously stated that they considered it their duty lo direct the attention of all popular forces to the damage done by aggressive anti-communism to the development of the movement for peace and progress.^^1^^
Communist Parties, the resolution said, do not consider all those who are not in agreement with their policies or who hold a critical attitude towards their activity as lioing anti-Communist. Anti-Communism was and remains an instrument which imperialist and reactionary forces use not only against Communists but also against other democrats and against democratic freedoms. These forces are conducting campaigns against the Communist Parties, the socialist countries, beginning with the Soviet tnion, against the forces of socialism and progress, campaigns which aim to discredit the policy and the ideals of Communists among the mass of the people and to prevent unity within the working-class movement and cooperation among the democratic and popular forces. It is in the interests of the aspirations of the popular forces for progress and for democratic development to isolate and overcome = anti-Communism.^^2^^
Bourgeois society's ideological and political crisis, the signs of which were described above, just like the difficulties being experienced by imperialism in the realm of social and economic relations, is a result of the further deepening of the general crisis of the capitalist system.
_-_-_~^^1^^ For Peace, Security, Co-operation and Social Progress in Europe, pp 41--42.
~^^2^^ Ibid,
139This general crisis embraces all spheres of the life of capitalist society—economic, social, political, and moral. Its deepening is having serious consequences for the working class, peasantry, and all non-monopoly strata in developed capitalist countries, and for the peoples of developing countries. New conditions are thereby being created for the struggle of the working class and all the democratic forces of the world.
[140] __NUMERIC_LVL1__ PART II __ALPHA_LVL1__ THE SOCIAL CONSEQUENCESThe main social consequences of the economic crisis of 1974-5, and of past crises, are the worsening of the position of the working class, peasants, small farmers, working intelligentsia, and urban and rural middle strata. Economic crisis lays a heavy burden on the shoulders of the working people.
Capitalism is forced, today, to reckon with the rise in influence of the socialist countries, the growing organisational capacity of the international working class, and the advance of the liberation movement in capitalist and developing countries. It is therefore looking for compromises and making certain concessions to the working class.
The social gains of the working class of capitalist countries, won in stubborn struggle with the monopolies, have to some extent retarded the tendency toward an absolute deterioration of the working people's material position.
But the very nature of state monopoly capitalism imposes limits on its social manoeuvring, and in the final analysis renders the bourgeois state's attempts to attenuate the contradictions of capitalist society ineffective. Evidence for that is the vast growth of unemployment in the 1970s, which is one of the most important social consequences and symptoms of the economic crisis. During the crisis, too, the cost of living has been rising, and the other conditions of working people's life deteriorating. The economic difficulties have made for a further deepening of bourgeois society's ideological and political crisis.
141 __NUMERIC_LVL2__ 7 __ALPHA_LVL2__ Unemployment in Capitalist Countries __ALPHA_LVL3__ [introduction.]Mass unemployment is a constant companion of the capitalist system. Capitalism cannot exist without a reserve army of labour. For some years after World War II, it is true, there was a relative reduction of unemployment in developed capitalist countries through the effect of several factors (the prevalence of a seller's market, etc.). Bourgeois propagandists spared no efforts then to demonstrate that unemployment had been eliminated in the West; the falseness of their assertions became particularly clear during the economic crisis of the 1970s.
__ALPHA_LVL3__ THE SCALE OF UNEMPLOYMENTThe total number of officially registered wholly unemployed workers in developed capitalist countries rose from 6 600 000 in 1965 to 17 100 000 in December 1975 (i.e. nearly tripled), according to the figures of national statistical departments and the International = Labour Organisation^^1^^. As the ILO's economists have stated, seventeen million persons is the biggest number of registered unemployed in industrial capitalist countries in the past forty years.
The United States of America, which has nearly half of all the unemployed of developed capitalist countries, is a striking example of the dynamics and scale of unemployment today (see Table~15).
The official figures show (1) the immense growth in unemployment during the crisis of the 70s compared with the 50s and 60s, which nearly trebled in absolute _-_-_
~^^1^^ U. N. Monthly Bulletin oj Statistics, 1976, 4; OECD. Main Economic Indicators, 1970, 4.
142 Table 15. Dynamics of Unemployment in the USA in 1929--1977 Year Numbers of official 1 y registered, wholly unemployed Proportion of the wholly unemployed to Ihn working (millions) population (percentage) ~1929 1.55 3.2 ~1930 4.34 8.7 ~1931 8.02 15.9 ~1932 12.06 23.6 ~1933 12.83 24.3 ~1937 7.7 14.3 ~1938 9.48 18.2 = 1950s1 2.94 4.5 = 1960s2 3.52 4.8 = 1970-33 4.56 5.3 ~1974 5.08 5.6 ~1975 7.8 8.5 1975 (June) 8.5 9.2 ~1976 7.3 7.7 ~1977 7.5 7.9Notes: 1) yearly average for 1IHIJ-1U59;
2) yearly average for lilGU-li'J;
3) yearly averages.
Sources: Economic Report of the President (Washington, 1970); U. N. Monthly Bulletin of Statistics. April 1976, 4: 20; idem, 1977, !>: 20.
terms, while the ratio of the unemployed to the working population more than doubled.(2) It is indicative that the figures also compare with those of prewar crises, in particular with the picture of the Great Depression of the 1930s. Although the ratio of the unemployed to the working population in the 1970s has been 40 to 50 per cent of the maximum level of the 30s crisis, unemployment came close in 1974-6 in absolute terms to the figures of the Great Depression: 1975 unemployment in the USA considerably exceeded the level of 1929, 1930, and 1931; only in 1932 and 1933 was it higher than in 1975. In this connection we must remember that the official statistics paint a far from complete picture; the real scale of U.S. unemployment is substantially higher than the official figures.
How is the average number of unemployed calculated in the USA? Once a month, during a certain week, the 143 number of the unemployed is recorded; the monthly totals are then added together and the sum divided by 12. The unemployed who are registered in December, for example, are not, however, the same as those registered in January: the average length of unemployment in the United States in 1975, it is estimated, was around 13 weeks. That means that the army of unemployed was renewed at least four times over again in the course of the year, and that the total number who were without work at some time or another during the year was more than thirty million, or around one worker in three.
American statistics, moreover, like those of other capitalist countries, do not consider short-time working due to economic causes. And partial unemployment during the crisis of the 1970s increased particularly steeply because of the growing instability of the capitalist economy and the bigger impact of the structural crises. In the middle of 1975 the number of people on short time in the USA was 3 900 000. In all developed capitalist countries around ten million people were put onto a short working week.
The official statistics do not consider the whole number of persons who despair of rinding work and .no longer register at the labour exchanges. These are mainly elderly people and women. In the middle of 1975 the number of people who had ceased to look actively for work in the USA was more than a = million^^1^^.
The actual scale of unemployment in the USA and other capitalist countries was thus vastly above the official statistics.
In the course of 1976 and 1977, it is true, American statistics began to publish figures on a reduction of unemployment. The Administration's economists determined the level of unemployment in March 1977 as 7.5 per = cent^^2^^, which meant that more than seven million Americans were looking for work.
_-_-_~^^1^^ N.~Gauzer. Unemployment: Problems and Outlook. Mirovaya ekonomika i inezhduiiarodnt/i' otnoshenii/a, 1975, 19, 11: 50.
~^^2^^ U.S. News& World Report, 2 June 1975, p 10. Cited from N. Gauzcr, Art. cit., p 50, U.N. Monthly Bulletin of Statistics, 1977, 5.
144Today's unemployment has other features besides its vast scale, features that are aggravating the position on the capitalist labour market.
__ALPHA_LVL3__ THE WORLD CHARACTER OF UNEMPLOYMENTThe reserve army of labour is growing in all capitalist countries, as is evidenced in particular by the position in such major countries as Japan, West Germany, France, Great Britain, and Italy (see Table~16).
Table 16. Officially Registered Wholly Unemployed in Selected Countries in 1965--1977 (in thousands) Year Japan West Germany France Great Britain Italy 1965 390 139 142.0 360 609 1970 590 149 262.1 618 609 1973 670 273 393.9 630 668 1974 720 582 497.7 714 560 1975 1000 1074 839.7 978 654 1976 1080 1060 993.5 1359 732 1977~(March) 1140 1249 1068.4 1448 777Sources: V. N. Monthly Bulletin of Statistics, 1975, 4; = 1976; = 1976 ,>: 17--20; = OECD. Main Economic Indicators. 1975, 4; = 1976, 4.
As will be seen from the table the rates of growth of unemployment in Western Europe and Japan in many cases even exceed the indicators for the United States.
Let us look at the position in the separate countries.
According to the official figures, unemployment nearly quadrupled in Japan in 1965--77. In this connection it should be remembered that unemployed women are not registered at Japanese government labour exchangesThere are also other limitations on the official statistical count. To get a proper picture of unemployment in Japan, therefore, one must (in the view of experts) at least triple the official figures.
Unemployment grew at an immense pace in West Germany, increasing tenfold between 1965 and 1976. The __PRINTERS_P_145_COMMENT__ 10---0372 145 number of semi-employed also steeply increased; the total working a short week, mainly in llio automobile industry, was 850~000 at the end of = 1975^^1^^, which was the iirst lime since World War II that there had been such unemployment there.
The official figures for France (as Ullumanite has commented) do not bring out either the real scale or the dynamics of = unemployment^^2^^. Thus, while there were officially 740000 unemployed in January 1975, for example, according to the workers' organisations there were = 1~200~000^^3^^. It was estimated in 197t> that there were between 1.5 and two million unemployed in = France^^4^^. Unemployment continued to increase in 1977 in many industries and industrial = areas.~^^5^^
In Great Britain unemployment reached its highest postwar level in the 1970s. In the winter of 1970/71 it has already doubled compared with the mid-GOs, and continued to rise after that. The total number of persons unemployed in 1976 was 1 359 000; it increased to 1 484 000 in 1977 and was higher than 1 500 000 in 1978.
In Italy unemployment is growing. The number of wholly unemployed was 654 000 in 1975, 732 000 in 1976, 1 545 000 in 1977, and 1 658 000 in July = 1978^^6^^. To this must be added the huge number of partially unemployed (by some estimates around a million persons).
In the developing countries unemployment has reached gigantic proportions. There it is the result not only of the crisis but also of the general conditions of development of production, and above all of the economic backwardness of these countries and their dependence on international monopolies. The ILO and International Labour Conference estimated that there were 283 million wholly or partially unemployed in developing countries in the middle of = 1976.^^7^^ The unemployment problem in _-_-_
~^^1^^ Wirtschajlswoche, 5 December 1075, p 15.
~^^2^^ L'lluiiiatiile, 23 September 1974.
~^^3^^ L'llumanite, 2 February 1075.
~^^4^^ iSllunmnite, 5 April 1970; 12 Juno ~1970.
~^^5^^ See Econiimic el politiquc, '1977, 2 (275): 45--48.
~^^6^^ U. N. Mouthli/ llulli'tin of Statistics, 1978, 12: pp 18, 20.
~^^7^^ Trud, 28 May 1970.
146 developing countries is chronically acute; its solution is blocked by the neocolonialist policies of the international monopolies. __ALPHA_LVL3__ COMPOSITION OF THE UNEMPLOYEDThe unemployment in capitalist countries boars the stamp of the features of the current economic crisis. This concerns not only its scale, which is due primarily to the cut-back in production during the 70s crisis, and its international character, which is a direct consequence of the synchronisation of the business cycle and the international scale of the crisis itself, but also the composition of the unemployed.
The fact that the current crisis is one of the state monopoly system, and that one of its causes is the marked sharpening of the contradiction between the need to carry through the scientific and technical revolution and the conditions for doing so under capitalism, is having a substantial effect on social and professional composition of the unemployed and the way it is developing.
Unemployment is acquiring a global character, and is embracing all sectors of the economy without exception, especially industry, and the most varied strata of wage workers.
The crisis of state monopoly control of the labour market is evinced above all in mass unemployment of young people. This time, too, the problem of unemployment among women has become no less acute. The deepening of the contradictions of scientific and technical progress in the world of capital has fostered the rise of an unprecedented phenomenon, namely, 'white overall' unemployment. And finally the growing internationalisation of economic life and the international character of the 70s crisis have encouraged an increase in the migration of labour and brought about an immense sharpening of the contradictions in this field, intensified exploitation of foreign workers, and an increase in unemployment among them.
Let us examine the special features of the make-up of the unemployed in capitalist, countries.
__PRINTERS_P_147_COMMENT__ 10* 147One of the most essential features of today's unemployment, perhaps, is its wide incidence among the youth. The statistics indicate dispassionately that young people under 25 years of age predominate in the ranks of the army of unemployed. Youth constitute the following percentages of those who officially are out of work: in France 45.8, Denmark 47.2, the Netherlands 37.6, Italy 32.7, West Germany = 28.4^^1^^.
The problem of unemployment among the youth is particularly acute in France, where young people ( under 25) constituted around a third of all those in receipt of unemployment assistance in = 1977^^2^^. According to the French press, their numbers continued to increase in the years that followed. In 1978 one French youth or girl in seven under 25 years of age was out of = work^^3^^.
In Great Britain the chief impact of mounting unemployment falls on school-leavers. In 1975 one unemployed person in five was under 25 years of age, and a substantial number of them were school-leavers and = graduates.^^4^^ According to the Ministry of Employment 165 000 schoolleavers, or twice as many as in 1974, could not find work immediately after leaving school and were forced to join the ranks of the army of unemployed.
Unemployment among the youth of the United States rose steeply in the 70s. The official level of unemployment among males aged 20 to 24 in 1975 was 14.2 per cent, which was nearly double the level of 1973 and three times as high as at the end of the = 60s^^5^^. Among Black youth and young people of Latin American origin unemployment was officially 34.7 per cent. Many economists, however, suggest that it is actually 50 to 60 per cent.
Another important feature of the current position on the labour market in capitalist countries is the marked exacerbation of the problem of female labour. The work of girls and women has become increasingly important for the economic development of capitalist countries in _-_-_
~^^1^^ At the beginning of 1976. See: OECD Main Economic Indicators, j»(o, 4.
~^^2^^ Bulletin mensuel de statislique (Paris), September 1978, p 10.
~^^3^^ Economic et politique, 1978, 20: 5.
~^^4^^ The Economist, 1975, 256, 6887: 55.
~^^5^^ OECD. Main Economic Indicators, 1976, April.
148 the postwar years. West Germany is a striking example; in the past the level of employment of female labour was comparatively low there, but since World War II, especially in recent years, the position has altered markedly. The rise in female employment and the continuing restrictions on the rights of women in various fields (unequal Table 17. Number of Unemployed Women in the Federal Republic of German;/ in 1960--1973 Year Numbers (thousands) As a percentage of all unemployed 1966 44.5 27.6 1967 124.4 27.1 1968 88.3 27.3 1969 59.0 30.2 1970 55.9 37.6 1971 84.2 45.5 1972 108.8 44.2 1973 123.5 45.1Source: M.~Goryacheva, 'Female Labour In the West German Economy', Mirovaya ehonomikti i mezlidunarodniye otnoslienii/a, 1976, 20, 3: 124; compiled from Wirtschaft und Statistik, 1965, 12: 820; 1967, 12: 842; 1971, 7: 374; 1974, 11: 672.
pay for equal work; a lower scale of pensions than for men, etc.) have been accompanied with increasing unemployment (see Table 17). From January 1974 to July 1975 alone unemployment among women at least quadrupled in absolute terms in West = Germany^^1^^.Unemployment is very heavy in industries producing consumer goods, in which females constitute the main work force (e.g. textiles, clothing) and certain other industries, like iron and steel and the production of electrical appliances, in which many women are also employed.
Women do not always work a full day, and are often only offered temporary work, all of which are various forms of unemployment. The proportion of women _-_-_
~^^1^^ Estimate based on: M. Goryaclieva, Female Labour in the West German Economy. Miroraya ekonomika i mezhdunarodnvje otnosheniya, 1976, 20, 3: 123; and U.N. Monthly Bulletin of Statistics, 1976, 4.
149 working a short week is almost 50 per cent of the total employed female population.The situation in the Federal Republic of Germany is not exceptional. The survey published by the ILO statistical department in August 1976 noted that seven million women had lost their jobs in 23 industrial capitalist countries as a result of the economic crisis.
A new phenomenon on the capitalist labour market that was already making itself felt at the end of the 1960s, but which has become particularly marked during the 1970s crisis, is the steep increase of unemployment among non-manual workers, viz., technicians, engineers, and scientific workers (so-called 'white overall' workers).
__ALPHA_LVL3__ HARD TIMES FOR WHITE OVERALLSThe crisis of the 1970s slowed down growth of social production and scientific and technical progress and thereby reduced the creation of new professions and new jobs. The new contradictions of the scientific and technical revolution have led, in crisis conditions, to qualitative changes in the labour market for 'white overall' workers.
The deepening of the economic crisis exploded the dogma that unemployment is allegedly the face of the uneducated alone. Today there are hundreds of thousands of designers and constructors, engineers, architects, production organisers, college teachers, and scientific workers among the crowds of unemployed. Before the beginning of the 70s crisis the number of unemployed technicians, engineers, and scientific intelligentsia in the United States was around 100 000; during the crisis years their absolute numbers doubled or tripled.
According to the official statistics, the average level of unemployment among scientists and specialists in capitalist countries was 2.9 per cent in 1971 but reached 4.2 per cent in = 1975^^1^^. It is typical that the number of unemployed is being increased in today's circumstances by scientists with higher degrees (M.Sc. and Ph.D.). Universities and colleges have begun to reduce the intake and training of postgraduates for these degrees. But that has _-_-_
~^^1^^ Employment and Earnings, 1973, 1; 129; idem., 1975, 8: 26.
150 not improved the slate of affairs. At the beginning of 1976 nearly 4000 scientists with Ph.D.s were unemployed in the United States. According to a study made by the 'Centre for Study of Social Problems in Italy there were 350~000 specialists with higher or intermediate education out of work there.Alongside this unemployment among 'white overall' workers, of course, there is also a shortage of certain professions and specialists connected, in particular, with the continuing growth of war production and certain other factors. An imbalance between the number of trained specialists and the demand for them has always been characteristic of the capitalist economy, hut it markedly increased in the conditions of the 1970s crisis and took on a mass scale.
The mass scale of unemployment among 'white overall' workers is an important symptom of the crisis of state monopoly control of the economy, and in particular of the national systems of training personnel that now exist in most developed capitalist countries.
In trying to find a way out of the impasse into which tens of thousands (even hundreds of thousands) of highly qualified experts have fallen, the ruling circles of capitalist countries have taken certain steps in recent years to ease the existing situation. The West German government, for example, is trying lo resolve the problem to some extent by instituting or expanding special vocational courses. People without work are being persuaded that improvement of their professional qualifications will help them fight more successfully for a job in works and factories suffering from the economic crisis. In the United States legislative and administrative bodies have adopted a whole series of measures to ease the situation in the labour market for engineers, technicians and scientists.
__ALPHA_LVL3__ UNEMPLOYMENT AMONG FOREIGN WORKERSThe crisis of the 1970s, which has painfully affected the interests of the working people of capitalist countries, would have led to even higher unemployment if the monopolies had not used foreign labour as a kind of 'buffer'.
151International migration of labour has always been a feature of the capitalist economy. Underlying it have been, and arc, the development needs of capital, the accumulation of capital, and capitalists' attempts to surmount the narrow limits of natural population growth by drawing all reserves of free labour into the sphere of exploitation and intensive employment.
Migration has been on a considerable scale in recent decades. According to United Nations figures, between 50 000 and 140 000 workers left Italy every year between 1960 and 1970; between 50 000 and 160 000 left Spain annually, and between 10 000 and 50 000 a year left Greece. In the second half of the 1960s Turkey became a main supplier of cheap working hands, with the result that there were twice as many Turkish workers abroad in 1973 as in Turkey itself. A large number of people also left North African countries, developing African countries south of the Sahara, and certain Asian countries in these years.^^1^^
The biggest centre of the employment of foreign labour was Western Europe (see Table~18).
Table 18. Foreign Workers in Western Europe in 1973 As a percentage of Country Number of foreign workers (thousands) the total employed population of the country concerned Switzerland 861 28.2 West Germany 2520 9.4 France 1930 9.0 Austria 236 7.9 Great Britain 1835 7.3 Belgium 265 6.8 Sweden 220 5.7 Netherlands 160 3.4Source: New Times, 197G, 15: 22.
The figures in the table reflect only 'legal' migration. They do not, moreover, include members of the _-_-_
~^^1^^ U.N. Statistical Annual, 1973, United Nations, New York, 1974.
152 immigrants' families; taking them into account the number of foreign workers in Western Europe is not around eight million, as the official statistics indicate, but between eleven and thirteen million. The French Communist A. Vieuguet estimates that there were fourteen million immigrants and members of their families in Common Market countries at the beginning of the = 70s.^^1^^ Most migrants are unskilled workers (around two-thirds of the total), former peasants, or artisans.Their lot is work in the heaviest sectors of industry. Their working week, as a rule, is longer and their pay lower than that of local workers doing the same jobs. They are cooped up in temporary accomodation and the slum areas of big cities. They are limited in social rights, and it is difficult for them to get an education or improve their skill. They live under the constant threat of deportation or expulsion from the countries where they are working.^^2^^
The crisis of the 1970s turned this threat into hard reality for many immigrant workers. Unemployment rose steeply among them in all Western European countries in those years. The monopolists sacked them, endeavouring to localise the processes of a further increase of the reserve army of labour among local workers.
In many capitalist countries steps were taken to limit the entry of migrants, and their living and working conditions have deteriorated.
In West Germany since November 1973 the hiring of foreign workers has been markedly = reduced.^^3^^
France imposed restrictions on immigration in 1972, then stopped it from July 1974, initially for three months and subsequently permanently. Foreign workers arriving illegally were deprived of the rights previously granted to them on legalisation.
_-_-_~^^1^^ A. Vieuguet. Fran$ais et immigres (Editions sociales, Paris, 1975), p 72.
~^^2^^ For a description of the position of migrant workers, see, in particular: T. Nielson. Les ilotes do 1'Europe des travailleurs immigres. Trente jours d'Europe, 1973, 183 (October); L'llumainte, 12 January 1974.
~^^3^^ International Labour Review, 1975, 4: 336; The Economist, 1975, 256, 6885: 17; cited from V. Lyubimova. Art. cit., p~78.
153In August, 1974 entry of foreign workers into Belgium was banned, and strict regulations were introduced in the Netherlands. A ban on immigration into Denmark— mainly from other Scandinavian countries—had been imposed in 1970 but later eased; it was again stiffened in November 1973. As a result the total number of migrant workers in Western European countries was sharply reduced, many of them being forced to return home.
In West Germany, for example, the number of foreign workers had risen by 1973 by nearly 25 times on 1957 (from 108 000 to 2 520 000); during economic upheavals, however, it fell steadily, operating as a kind of safetyvalve letting 'steam' out of the labour market. During the 1967 crisis, for example, the number of migrant workers fell from 1 243 000 in 1960 to 1 014 000 in 19G7. The decline was particularly marked during the crisis of the 70s, the number of migrants in West Germany falling from 2 520 000 in 1973 to 1 678 000 at the beginning of 1975, which meant that more than 800 000 migrant workers (or one foreigner in three) loft West Germany in the two crisis years.
Capitalist propaganda organs try to picture the mounting unemployment in capitalist count Ties as a chance, transient phenomenon. And attempts have been made more and more often in recent times, moreover, to embellish the position of the unemployed and to prove that they do not suffer any deprivations because of the unemployment benefits paid to = them.^^1^^
__ALPHA_LVL3__ THE POSITION OF THE UNEMPLOYEDDaily life provides thousands of examples refuting the optimistic statements of the capitalist press. The unemployed workers thrown out of the social production process are deprived of the means of existence. The person who is out of work suffers discrimination, because the very fact of being registered as unemployed is fraught with consequences for further work, which is why many people who have lost their jobs try to delay signing on officially as unemployed.
_-_-_~^^1^^ A.~Viouguot. Art. cit., p 70.
154The governments of capitalist countries, fearing a sharpening of the class struggle, arc forced to take measures to extend the system of unemployment benefits and to retrain workers. The true sense of social manoeuvring of this kind, however, is not any wish to end the workers' calamitous position but to consolidate the position of the ruling class.
The system of unemployment insurance operating in several capitalist countries is a result of the workingclass's persistent struggle over a long period. The example of the countries of the socialist community, where the right to work is guaranteed by their constitutions and is made reality by the whole aggregate of the socio-economic and political conditions of socialist society, is playing a big role in activising the fight for the right to work. The Constitution of the USSR states:
Citizens of the USSR have the right to work (that is, to guaranteed employment and pay in accordance with the quantity and quality of their work, and not below the stateestablished minimum), including the right to chose ttieir trade or profession, typo of job and work in accordance with their inclinations, abilities, training and education, with duo account of the needs of society.
This right is ensured by the socialist economic system, steady growth of the productive forces, free vocational and professional training, improvement of skills, training in new trades or professions, and development of the systems of vocational guidance and job = placement.^^1^^
In order to evaluate the real significance of the system of unemployment insurance it is important to say from what sources the assistance funds are formed in capitalist countries, who has the right to draw on them, what is the scale of benefit received, and for how long benefits are available.
Unemployment assistance funds are created in capitalist countries according to the concrete local conditions in the various countries, but in all cases the workers themselves contribute in one way or another to them. _-_-_
~^^1^^ Constitution (Fundamental Law) of the Union of Soviet Socialist Republics (Novosti Press Agency Publishing House, Moscow, 1977), p 41.
155 In West Germany, France, Japan, and several other countries, for example, the funds are built up from regular contributions by the owners of enterprises and the workers employed in them. The unemployment assistance fund in West Germany is formed half by employers' contributions and half by workers'. The workers have to make a monthly contribution of a fixed percentage of their earnings. In addition, it must be remembered that the employers include their contributions in the wholesale price of their product, forcing the consumers of it to pay, i.e., in the final analysis, the workers themselves.Unemployment insurance is not even formally available for all workers. It usually does not apply to agricultural workers, domestic servants, persons working in small firms, and seasonal workers. In some countries foreign workers do not have the right to receive unemployment benefit.
Only those can count on unemployment benefit who have been working for a certain period, which varies in different countries from six months to two years. There is often, too, a requirement to have a certain level of pay, and to have paid contributions for a certain period of time. There conditions deprive a considerable part of the low-paid of benefit.
The fact that benefits are not paid to those who have left work of their own accord, or have been dismissed for taking part in a strike or stoppage of work, or for open expression of dissatisfaction with the firm's arrangements (labelled 'bad behaviour'), is of great significance. As a result, more than eleven million workers in the United States, or 20 per cent of the total labour force, are still not covered by unemployment insurance and cannot claim benefit.
The position of workers in Italy and France is worse still; 51 and 61 per cent respectively there are not covered because of the high requirements as regards previous length of work and the structure of the labour force, in which there are many young people not previously employed, and so-called self-employed workers (i.e. peasants, artisans, petty traders, etc.). The best insured workers are those in Great Britain and West Germany, where more than 80 and 93 per cent respectively of all 156 employees have the formal right to draw = benefit.^^1^^ The scale of benefit varies in the different countries, arid often does not exceed half the previous earnings. In the United States, for example, the average benefit at the beginning of 1976 was 25 to 33 per cent of earnings. For the ordinary American family, which lives largely on credit and spends around a quarter of its income on paying off debts, protracted loss of earnings often ends in ruin. Although the bourgeoisie in certain countries, like France, have been forced by working class pressure, and in circumstances of a sharpening of social conflicts, to raise the maximum rate of benefit, the average has not increased very much; benefit is now around 40 per cent of previous = earnings.^^2^^
It is also necessary, furthermore, to allow for the fact that the unemployed draw benefit only for a strictly fixed period. In the United States, Italy, and Japan, for example, it averages 26 weeks; in West Germany and France it varies between 13 and 52 weeks. After expiry of the fixed period payment of benefit ceases, whether or not the unemployed person has managed to find a new job. In Italy benefit is granted for a maximum of not more than 180 days a year, in the Netherlands for 130 days in one year, in Luxemburg for not more than 26 weeks a = year.^^3^^
More than a third of the total number of officially registered unemployed in West Germany were wholly deprived of the means of existence at the end of 1975. According to the Federal Labour Board nearly 365 000 of the then 1 115 000 unemployed had ceased to receive any kind of unemployment benefit.
According to the U.S. Labour Department 63 000 unemployed Americans were not getting unemployment assistance in January 1975; the figure later began to snowball and was already 600 000 in August. In _-_-_
~^^1^^ OECD. Economic Outlook, OECD Occasional Studies, July 1975, p 5; V. Lyubimova, Art. cit., p 73.
~^^2^^ V. Lyubirnova. Art. cit., p 74; Jean Fabre. La crise dans le monde capitaliste. Economic et politique, 1975, Nos. 251, 252, 253.
~^^3^^ The Economist, 1975, 25(1, 6891: 51; V. Lyubimova. Art. cit., p 74.
157 January l!)7(i, judging by the estimates of tl.S. Neirs &. World Hcpai'l, substantially more than a million unemployed U.S. citizens were not receiving assistance. And in March 1976 the officially registered unemployed who had neither work nor assistance already numbered two million. Many unemployed in the USA and other capitalist countries, being left without earnings, lost their homes and furniture bought on credit.Life on unemployment benefit, or completely lacking means of existence, does not simply mean a fall in standard of living but much more which cannot be measured in pounds sterling, dollars, or marks. Edward 15. Furey, llio father of nine, four of whom are still at home, said in an interview with one of the biggest American newspapers:
Brightwaters, N. J.— Let me tell you what it's like for one guy to be 52 years old and jobless in America in 1975.
As a recently tired middle-management executive of a division of one of America's top 500 companies, 1 have sent out over 150 resumes. Less than 10 per cent have drawn a response of any kind. Five per cent drew requests for additional information, while less than 4 per cent resulted in a personal interview. None resulted in a job.
As an infantry veteran of World War 11 in the South Pacific, I've had some experience with fear, and how men deal with it. 1 like to feel that I don't scare any easier than the next guy, but to be 52 years old and jobless is to bo frightened — frightened to the marrow of your bones. Your days start with it, and end with it. It's all pervasive. It's numbing. It's mind-boggling.
Things you've always taken for granted fall apart. You can no longer maintain your hospitalization insurance, and for tlie fust time in 28 years you and your family are unprotected against a medical emergency. You are unable to meet the payments on your life insurance. The bank holding your mortgage warns that foreclosure is being considered. Bills to the utilities are overdue and you're keeping vital services only through partial payments, aware of the fact that time is running out.
It's to tell a fine 14-year old son that you haven't got the live bucks you owe him for the great report card he brought home.
It's to pass local merchants on the street and feel embarrassment, wondering when you'll he able to pay them what you owe them.
To feel the disintegration of your confidence as a man, and your ability to protect your family from economic disaster.
It's to envy just about everybody who has a job, any job.
158It's to see the doubt on the laces of your children about what s going on in (heir house, when so many of their friends are unaffected.
It's to add a crushing dimension to the natural self-doubts (l;at are pail of the process of growing older.
It's to stand silently on unemployment lines with other surplus members of America's work force, waiting to sign for your unemployment check.
It's to see the neighborhood looks like at 10 : 30 on Tuesday morning.
It's to feel embarrassed to answer the ring of the telephone at the same hour.
It's to watch assorted politicians in dialogues with fat-cat television interviewers in an atmosphere replete with camaraderie, purporting to discuss America's problems, where the right questions are not asked, and the unchallenged responses consist mostly of noncommittal and vacuous banalities.
It's to realise the simple stunning fact that you are without meaningful representation in this society.
And in the late evening when your household is quiet and you switch off the bedroom light it's to be alone, alone like you've never been before. To lie there looking at the darkness and wonder if you're going to lose the home that you've worked all your life for, the home that represents the only equity you've been able to accumulate in 30 years of working and raising a family.
It's to realize that formany Americans the problem you are facing for the first time has become a way of life.
The carnage is strewn about America for anyone with eyes to see. In our mental hospitals, in our drug-abuse centers, in the alcoholic wards of our hospitals, in our juvenile shelters, in our prisons, and on the streets of our cities.
And finally, it's to lie sleepless in bed waiting for the dawn of a new day and realize that something is terribly wrong in = America.^^1^^
Poverty, in combination with moral collapse, and despair accentuated by hopelessness—such is the lot of today's unemployed in the capitalist world.
The world of exploitation and private ownership of the means of production is depriving millions of people of one of the most elementary human rights—the right to work.
_-_-_~^^1^^ The Fear, the Numbing Fear. The A'eir York Times, 1 April 1975, p 35.
[159] __NUMERIC_LVL2__ 8 __ALPHA_LVL2__ The Rise in the Cost of LivingCapitalist economists and propaganda, and opportunists of every hue, have done much to falsify the position of Marxist-Leninists on the proletariat's material position under capitalism. The Marxist-Leninist theory of the accumulation of capital has been and is being depicted in simplified form and even caricatured as an automatic continuous impoverishment of the working class.
Lenin, exposing Eduard Bernstein's distortion of Marx's actual views, wrote:
He spoke of the growth of poverty, degradation, etc., indicating at the same time the counteracting tendency and the real social forces that alone could give rise to this tendency. Marx's words on the growth of poverty are fully justified by reality: first, we actually see that capitalism has a tendency to engender and increase poverty, which acquires tremendous proportions when the above-mentioned counteracting tendency is absent. Secondly, poverty grows, not in the physical hut in the social sense, i.e. in the sense of the disparity between the increasing level of consumption by the bourgeoisie and consumption by society as a whole, and the level of the living standards of the working = people.^^1^^
During the rise of capitalism, as we know, the capitalists' exploitation of the working class was marked by its particularly naked character and frank cynicism. The prevalence of the crudest, open forms of exploitation caused a growth of poverty in the physical sense of the term, i.e. the workers were `actually becoming poorer' _-_-_
~^^1^^ V.~I. Lenin. Review of Kautsky's Bernstein und das socialdemokratische Prograrnm. Elite Antikritik, In: Collected Works, Vol.~4 (Progress Publishers, Moscow, 1964), p~201.
160 and were compelled 'to live worse, to cat worse, to suffer hunger more, and to live in basements and = attics'.^^1^^The powerful revolutionary process begun by the October Socialist Revolution slrengfliened the workingclass movement in capitalist countries and led to a radical change in the balance of forces between the bourgeoisie and the working class. The immense social and economic gains of the society of existing socialism in the USSR and countries of the socialist community, and the advance of the working-class movement in capitalist countries and of the national liberation movement are forcing the bourgeoisie to make substantial concessions to the workers and to look for subtler, camouflaged forms of exploitation. In this way monopoly capitalism is trying to avert socio-economic upheavals highly dangerous to the bourgeois system.
The trend operating against the process of impoverishment is also linked with the law of rising requirements discovered by Lenin:
AndThe development of capitalism inevitably entails a rising level of requirements for the entire population, including the industrial = proletariat.^^2^^
the more rapid the growth of wealth, the fuller the development of the productive forces of labour and its specialisation, and the better the position of the worker, or as much better as it can bo under the present system of social = economy.^^3^^
This law also operates in present-day conditions. The needs of the American worker of the last third of the twentieth century differ substantially from those of the workers of the beginning of the ^century. They are objectively due to the requirements of vastly expanded social production, the evolving process of the scientific and technical revolution, the new conditions of world _-_-_
~^^1^^ V.~I. Lenin. Impoverishment in Capitalist Society. Collected Works, Vol. 18, p 208.
~^^2^^ V.~I. Lenin. On the So-called Market Question. Collected Works, Vol. 1, p 106.
~^^3^^ V.~I. Lenin. A Characterisation of Kconomic Romanticism (Sismondi and Our Native Sismondists). Collected Works. Vol. 2, p 148.
__PRINTERS_P_161_COMMENT__ 11--0372 161 developmcnt, fealuL-cs of the class struggle, and many other factors, including general cultural and intellectual ones.Under the impact of the working class's persistent struggle the bourgeosie have had to make a number of concessions. The length of the working week, for example, was shortened in developed capitalist countries from between 70 and 90 hours in the middle of the nineteenth century to GO or 70 hours at the beginning of the twentieth century, and to between 41 and 47 hours in the 1'JTOs. By 1967 a system of industrial accident insurance has been introduced in 74 capitalist countries, and in 38 countries a comparatively developed system of social security that includes both insurance for old age and against disability, and loss of the breadwinner, and provides for family allowances.
It would be stupid to deny that the social gains achieved (for example, a national system of social insurance or legal fixing of the length of the working week) are really valuable to the working class. On the other hand, however, one must not ignore the fact that the nature of capitalism as a system founded on exploitation of the working people has not been changed by these concessions.
This comes out with special force during socio-- economic upheavals, and example of which is the economic crisis of the 1970s.
__ALPHA_LVL3__ THE RISING COST OF LIVINGThe 'galloping inflation' of the 1970s has severely hit the public's purchasing power, and above all the standard of living of the masses of the working people. The statistics on the movement of retail prices in developed capitalist countries give an idea of the scale and rate of the rise in the cost of living (see Table 19).
From 1970 to the beginning of 1970 prices of consumer goods rose by 81.2 per cent in Australia, 49.3 per cent in Austria, 63.2 per cent in Belgium, 58.9 per cent in Denmark, 66.9 per cent in France, 114.9 per cent in Great Britain, 99.4 per cent in Italy, 64.6 per cent in the Netherlands, 61.7 per cent in Sweden, 47.3 per cent 162 Table 19. Movement of Retail Prices in Selected Capitalist Countries (as a percentage of the preceding year) Year Average Country for 1965-9 1069 1970 1971 1972 1973 1974 1975 Franco 3.7 6.4 5.3 5.5 6.2 7.3 14.9 11.75 Great Bri-- tain 4.3 5.4 6.4 9.4 7.1 9.2 18.3 24.3 Italy 2.9 2.7 4.9 4.8 5.7 10.8 24.7 17.0 Japan 5.2 5.2 7.6 6.1 4.5 11.7 25.8 12.25 USA 3.4 5.4 5.9 4.3 3.3 6.2 12.1 9.0 West Ger-- many 2.4 1.9 3.4 5.3 5.5 6.9 7.4 5.75
Sources: TJ. N. Monthly Bulletin of Statistics, 1976, 4; JILO. Bulletin of Labour Statistics, 1974, 4th quarter; OECD. Main Economic Indicators, 1975, 1.
in Switzerland, 57.4 per cent in the United States, and 40.8 per cent in West = Germany.^^1^^Comparison of the mean annual rise of consumer prices shows that it has been accelerating in the 1970s. The rate has frequently risen five or ten times on that of the 1950s and 1960s. In Belgium, for example, it was between 7.3 and 12.7 per cent during the 1974-6 crisis; earlier it had not exceeded 1.2 per cent in 1953-8, 1.8 per cent in 1959--64, and 3.5 per cent in 1965--70. In the Netherlands the rate was 8 to 9.6 per cent in 1974-6, but had fluctuated between 2 and 5.2 per cent in the 1950s and 1960s. In Luxemburg the rate of price rises reached 10.4 per cent in the 1970s, whereas it had not exceeded 1.4 per cent in 1953-8, 1.3 per cent in 1959--64, 2.9 per cent in 1965-7, and 3.2 per cent in = 1968--70.^^2^^
_-_-_~^^1^^ U.N. Monthly Bulletin of Statistics, 1976, 4: 176--185' idem, 1977, 5: 178--187.
~^^2^^ ILO. Yearbook of Labour Statistics, 1901, p 426; 1966, p 630; 1972, pp 699--700; U.N. Monthly Bulletin of Statistics, 1976, 4: 176--185; 1977, 10: 178--187; Yu. A. Borko, Zapadnaya E crop a: sotsialnye posledstviya kapilalisticheskoi integratsii (Western Europe: Social Consequences of Capitalist Integration), Moscow, 1975, p 172.
__PRINTERS_P_163_COMMENT__ 11* 163Prices of prime necessities—food, clothing, urban fares, fuel for heating, etc. — rose particularly sleep]y. In Great Britain, for example, food prices went up by 129.4 per cent in = 1971-6.^^1^^ In France food prices rose by 64.3 per cent in the same period, according to the official figures, in West Germany by 35 per cent, and in the United States by 57.4 per = cent.^^2^^ The price of sugar nearly tripled in the USA in those years, more than doubled Table 20. Movement of Retail Prices in Selected Latin American Countries (as a percentage of the preceding your) Country 1969 1970 1971 1972 1973 1974 1975 Argentina (JJueiios Ai-- res) 7.5 13.0 34.7 58.5 00.2 40.1 288.7 Chile (Santiago) 30.0 32.5 20.1 77.8 352.8 014.0 459.7 Colombia (Bogota) 10. 1 6.8 9.0 10.0 22.8 20.9 31.3 Mexico ( Mexico) 2.8 5.0 3.2 6.3 10.4 31.4 12.1 Uruguay (Montevideo) 20.8 10.0 23.9 70.5 20.9 103.0 171.1
Note: retail price indexes are calculated only for the capitals or biggest cities in developing countries.
Sources: U.N. Monthly Ilulletin of Statistics, 197G, 4: 174--182; 1977, 5: 178-1H7; OEC.I). Minn Economic Indicators, 1975, 1.
in Great Britain, and rose by 50 per cent in Franco. Paris workers paid 2.30 francs for a kilogram of bread at the beginning of 1971, and were already paying 3.40 francs by the middle of 1975; the price of meat rose from 18.50 francs a kilogram in 1971 to between 31.60 and 48.29 francs in August 1975, and so = on.^^3^^ In Japan retail prices of prime necessities and public utility charges (rent, light, heat, etc.) rose by 11.9 per cent in 1975; economists estimated that all consumer prices practically doubled between 1970 and = 197G.^^4^^ _-_-_~^^1^^ U.N. Monthly Bulletin of Statistics, 1970, 4: 184--185.
~^^2^^ Ibid.
~^^3^^ Bulletin niensuel de slatistique, Paris, 1975, 9: 47--50.
~^^4^^ U.N. Monthly Bulletin o] Statistics, 1977, 5: 183.
164The cost of living is rising in all regions of the world capitalist system as well as in the developed capitalist countries. It is very high, for example, in several countries in Latin America. This applies, above all, to countries with reactionary, military-political regimes like Chile and Uruguay (See Table~20).
The rapid rise of prices is leading to a marked deterioration of the masses' position, especially of the lowpaid workers.
__ALPHA_LVL3__ THE MOVEMENT OF REAL WAGESAs a result of the uncontrolled rise in the cost of living in conjunction wilh mass unemployment and growth of taxes, there has been an absolute fall in the real incomes of workers in the United States, Great Britain, Japan, and several other countries. This in turn caused an unprecedented fall (for the postwar period) in per capita consumption of many important foodstuffs and manufactured items, especially of consumer durables. The data on changes in the volume of retail trade and level of retail prices, in particular, witness to this. In most capitalist countries, even according to the official figures, prices outstripped the movement of turnover during the crisis of the 1970s, and of leu very substantially, which meant that homo trade and the total volume of consumption declined. In 1975, for instance, according to United Nations figures, the volume of domestic trade in Italy rose by only 1.8 per cent on 1974, while the general index of retail prices rose by 17.0 per = cent^^1^^. Such a faster rise in the cost of living (by nearly a factor of ten) comhined with growth of the population, meant that there was a fall in both the absolute and the per capita scale of consumption. In Japan domestic turnover rose by 3 per cent in 1975 on 1974, and prices by more than 12 per = cent.^^2^^ In Great Britain the corresponding figures were 19 and 24.3 per cent, in Australia 13.3 and 14.4 per cent, in the USA 8 and 9 per cent, in France 8.3 _-_-_
~^^1^^ U.N. Monthly lli/llrtin of Statistics. 1970, 4: 103--107, 170-- 185; 1977, 10: 178-1^7
~^^2^^ Ibid.
165 Table 21. Movement of Money Wages and Retail Prices in Developed Capitalist Countries 1969--1976 (wages in manufacturing industry) Country Indicator 1969 1972 1973 1974 1975 1976 In percentages 1976/1975 1976/1974 1976/1969 Australia = wages1 (A$) 1.22 1.56 1.76 2.25 2.53 2.77 +9.4 +23.1 + 126.2 retail price = index2 96.2 112.3 122.9 141.5 162.8 171.6 +5.0 +21.2 +78.3 Austria wages = (schillings)8 4263 5912 6662 7710 = 78695 ~10778~ +37.0 +40.0 + 153.D retail price = index2 95.8 111.3 119.7 131.1 142.2 149.3 s +5.0 + 14.0 +55.6 Belgium wages = (francs)1 64.79 93.35 108.51 136.00 147. = 4610 = +8.411 +36. = 912 + 127. = 613 = +6.011 +19. = 712 +64.1'3 retail price = index2 96.2 110.0 117.7 132.6 149.5 157.9 + 12.7 +26.9 +55.3 Canada wages (Can $)* 2.79 3.54 3.85 4.37 = 4.775 = 5.2914 + 10.8 +21.1 +89.8 food price = index2 97.8 108.8 124.6 144.9 155. = 65 = 110.29 +0.4 + 17.4 +74.1 Denmark wages = (kroner)4 15.10 21.48 24.86 29.68 33.1515 35.36 s +6.6 + 16.1 + 133.6 retail price = index2 93.9 112.8 123.3 142.1 155.8 158. = 914 +2.0 + 11.1 +69.2 France wages = (francs)4 4.21 5.82 7.05 8.39 = 9.4415 10. 16" +18.2 +22.1 +141.3 food price = index2 94.4 114.8 125.6 141.4 155.7 164. = 314 +5.5 +16.2 +74.0 Great = = wages1.2 90.9 127.8 144.4 168.9 218.6 248. = 614 + 13 7 +47.0 + 174.8 Britain retail price = index2 94.0 117.2 128.0 148.4 184.4 202. = 314 +9.7 +36.6 +115.2 Italy wages = (lira)3 489 788 966 1213 retail price = index2 95.3 110.6 123.9 145.9 172.2 180.4' +10.5 +23.6 +99.9 Japan wages (000 = yen)3 61.8 93.6 116.3 146.5 164.1 +12. = 011 +40. = 112 + 165. 5" 166 food price = index2 91.7 110.1 124.4 148.9 179.5 +13.0 +44.3 +95.7 Nether- wages = (index)2 90.8 127.8 146.1 173.3 190.65 205. = 816 +7.9 +18.7 + 126.6 lands retail price = index2 95.8 116.0 125.2 137.3 151.3 157. = 514 +4.4 +14.6 +64.4 Sweden wages (kroner) 12.15 16.76 18.19 20.30 22. = 129 retail price = index2 93.4 113.8 121.5 133.5 146.6 155. = 314 +6.0 +16.3 +66.2 Switzer- wages = (francs)1 6.44 8.72 9.07 10.23 land retail price = index2 96.5 113.7 123.6 135.7 144.8 147. = I8 -1.6 +8.4 +52.4 USA wages (US = $)4 3.19 3.81 4.07 4.41 4.80 5.02 -4.5 +14.0 ^57.6 food price = index2 94.8 107.5 123.1 140.7 152.7 157. = 414 --4.3 + 11.6 +66.0 West wages = (marks)1 5.72 7.82 8.69 9.64 9.96 s 10. = 521' _ 5_2 +9.1 +84.0 Germany retail price = index2 96.7 111.1 118.8 127.4 134.7 139. = 28 +33 + 9.2 +44.0 131. = 35 135. = 417Notes
1 hourly male wage rates
3 average monthly earnings
* hourly wage rates for men and women
5 January 1975
6 September 1975 ' December = 1975
8 February 1976
8 November 1975
10 April 1975
11 1975/1974
12 1975/1973
13 1975/1969
14 January 1976
15 March 1975 is October 1975 i' July 1975
Source: U.N, Monthly Bulletin of Statistics, 1976, 4: HS-151, 176--185.
167 and nearly 12 per = cent^^1^^. By reducing the volume of home consumption through uncontrolled inflation and rise in the cost of living, bourgeois governments and the monopolies arc shifting the burden of the economic crisis onto the shoulders of the working people.The monopolies, fearing very strong social repercussions, have been forced to make certain concessions to the workers. In many cases they have preferred to avoid open attacks on pay. The tempo of pay rises increased a little, but that did not improve the workers' position, as the figures in Table 21 show.
Analysis of the official figures on the movement of money wages and retail prices in developed capitalist countries during the economic crisis allows us to draw the following conclusions.
In spite of a certain increase in money pay forced out of the bourgeoisie in a number of countries by working-class pressure, in conditions of an immense growth of capitalist society's social and economic contradictions, there was a turn during the 70s crisis from the growth of real wages that had been a feature of the preceding stage of development to stagnation. The increase in money wages in 1975 and 1976, for instance, compared with 1974, in such countries as Australia, Canada, Denmark, France, Great Britain, the Netherlands, and the United States, was almost completely swallowed up by the rise in retail prices. In the United States, for example, the hourly wage rate of a worker in manufacturing industry was 4.5 per cent higher in January/February 1976 than in 1975, while the food price index rose in the same period by 4.3 per cent.
Even according to the official figures there was a fall in real wages in several capitalist countries during the crisis. In Belgium, for example, the hourly rate of male workers in manufacturing industry rose by 8.4 per cent in 1975 while the retail price index rose by 12.7 per cent. An even more striking example is that of the No.~2 power of the capitalist world, Japan, where there was a faster rise in the cost of living than of money wages even in 1974. The same happened in West Germany in _-_-_
~^^1^^ &whatthe;.N. Monthly bulletin of Statistics, 1976, 4:103--107, 176-- 185, 10: 178--187.
168 1975 and the beginning of 1976, and in Great Britain where, according to the official figures, the retail price index, and especially food prices, had already outstripped the rise in money wages in August 1975.Taking the growth of unemployment into consideration, the rise in taxes and rents, and the deterioration of social security, and a number of other factors, this situation meant, an absolute worsening of the position of the greater part of the working class of capitalist countries.
The workers' position in developing countries is serious; especially in those where there are reactionary dictatorships. In the middle of 197G, for example, the real wages of Uruguayan workers were only 45 per cent of the level existing there in January 1968. In Chile the official price index rose by a factor of 1752.8 = on 1970^^1^^. The situation of the workers in the Republic of South Africa and other countries has markedly deteriorated.
We must stress that the figures in the U.N. Monthly Bulletin of Statistics relate only to separate indexes of the money wages of workers in manufacturing industry. Many categories are left of our account, e.g. miners, transport workers, agricultural workers, people in the services sphere, and so on. The pay conditions of most of them are much worse than in manufacturing industry. The United Nations figures almost wholly leave out of account the differences existing in the pay of migrant workers, women, adolescents, and the unskilled. And of course the situation of the unemployed, and several other factors characterising the real material position of the working people, are not taken into account (i.e. taxes, rents, charges for communal services and public utilities, etc.).
In most cases, moreover, retail price indexes far from fully reflect the real extent of the rise in the cost of living, since the set ('package') of goods is frequently so selected as to hide the true picture and make the index unrepresentative. There are also objective difficulties connected with 'commercial secrets' and competition _-_-_
~^^1^^ U.N. Monthly Bulletin of Statistics, 1977, 10: 187--197.
169 that do not permit statisticians to reflect the actual movement of prices.The figures of official bourgeois statistics therefore need to be supplemented and substantially adjusted, on the basis of the data gathered by the economists of progressive trade unions and other social and political organisations defending the working people's interests.
A typical example is France. According to the figures of the General Confederation of Labour (CGT) and other French trade unions cited at the 22nd Congress of the French Communist Party (February 197G), more than 16 million French working men and women were then unable to provide 'the basic necessities for their families, were living in poverty'. Between July 1974 and July 1975 alone the purchasing power of the workers fell by 2.67 to 3.71 per cent. The real incomes of farming folk fell by 20 per cent in the two years 1974--5.
The system of social security also deteriorated. The real value of family allowances, for example, fell by 35 per cent compared with = 1968^^2^^.To judge the real situation of families, one must also allow for the galloping rise of prices, the high rents and rates, the cost of transport, and the crushing burden of = taxation.^^1^^
The case of West Germany is no less striking. The report of the Board of the German Communist Party to its Bonn Congress in 1970 noted:
Families are dominated by fear of the morrow. Thousands of young people are deprived of even the opportunity to get vocational training. This position refutes all the statements about 'changing' capitalism and its 'freedom from crisis'. It shows that this exploiter system remains essentially as before. It witnesses to the inability of the _-_-_As for the home development of our country in the year on which we are reporting, it is stamped and overshadowed by the capitalist economic crisis, and by the outbreak of various crisis phenomena in all spheres of social = life.^^3^^
~^^1^^ Georges Marchais. Report of the Central Committee to the 22nd Congress of the French Communist Party. Cahiers du Communisme, 197ti, 1-2 (Feb./March): 14, 15, 17.'
~^^2^^ Ibid.
~^^3^^ Unsere Zeit, 20 March 1970.
170 capitalist social system to give the working people genuine social security and freedom.The resolution of the 37th Congress of the Communist Party of Great Britain (December 1975) stressed that 'the worst recession in the capitalist world economy since the war' had aggravated 'the longer-run structural crisis of Britain's monopoly-dominated economy', resulting in massive unemployment (especially affecting the youth), 'closures and cuts in all industries, general insecurity and savage reductions in social = services'.^^1^^
The crisis of the 1970s made unreal even implementation of the very modest social programmes adopted in capitalist countries as a result of the long struggle of the proletariat and all progressive forces. This was clue to an enormous extent to the policy of slate monopoly circles, which were and still are trying to shift the whole burden of the crisis onto the shoulders of the working people.
__ALPHA_LVL3__ THE STATE MONOPOLY POLICY OF SHIFTING THE BURDEN OFThe bourgeois governments in all capitalist countries have been trying to weaken capitalism's contradictions and assist the monopolies during the crisis, and still are, utilising the many means of the state monopoly system. Their help for the monopolies is mainly expressed in stimulating capitalist accumulation. Therefore, although state monopoly circles are forced by the pressure of the working class's struggle to make certain concessions to the workers (a certain rise in money wages, and increase in unemployment benefits), the class nature of the bourgeois state sets limits to social manoeuvring.
In most capitalist countries the 1970s have been a period of steep increase in the weight of taxation. According to the statistical office of the United Nations, the total taxes paid by the public have risen more than 270 per cent since = 1950^^2^^. The total number of _-_-_
~^^1^^ Comment, 1975, 13, 24/25; 392.
~^^2^^ Cited from E.G. Boldyrov et al. Finansy kapitalisticheskikh gosudarstv (Finances of Capitalist Countries), Finance Publishers, Moscow, 1975, p 51.
171 income-tax payers in the United States, Groat Britain, France, and Japan, which was less than 20 million hefore World War II, had risen to 100 million in = 1975.^^1^^At the beginning of the 70s the six members of the EEC finally went over to a single system of turnover tax, introducing the so-called added-valuc tax, which while formally replacing other types of indirect taxation, has not led to their complete abolition. As a result, the attempts at 'harmonising' fiscal legislation have.led everywhere to a growth of indirect taxation, which bears heavily on the family budgets of working people.
Between 1950 and 1974 total taxation rose by 150 per cent in the British budget and quintupled in the West German = budget~^^2^^. In the French budget receipts from income taxes, paid primarily by individuals, increased by 850 per cent between 19(50 and = 1975^^3^^.
Taxation has also risen in the United States where the total of taxes in the Federal budget more than tripled in the mid-70s compared with = 1950^^4^^. The weight of taxation bears increasingly on the working people. Whereas persons with low or medium incomes paid 48 per cent of all Federal taxes in 1939 they were paying at least G5 per cent in 1975. Indirect taxation has also increased in the USA together with direct taxation.
In spite of the fact that the U. S. Congress decided to reduce taxes in March 1975, considering this a measure to limit the recession in industry, the general level of taxation remained very high, mainly because the chief reduction was in corporation = taxes^^5^^. As a result there was a steep increase in the Federal deficit. Where this had been $3~1/2 billion in the 1974 financial year, it rose to $34.7 billion in 1975 and $51.9 billion in 197(5, which increased the Federal debt to banking capital to $606 billion^^6^^. Payments of interest and retirement of debt _-_-_
~^^1^^ Ibid., p 305.
~^^2^^ Boldyrev el al. Op. cit., p SCO.
~^^3^^ Le Monde, 8 July 1977.
~^^4^^ Boldyrev et al. 0/>. cit., p 300.
~^^5^^ The Budget of the fl.S. Goieminent. Financial Year 1977 (Washington, 1976), p 25. Cited from SShA: jtolitika, ekonomika, ideologiya, 1970, 5: 93--94.
~^^6^^ Ibid.
172 to the banks come to an ever more imposing sum, and constituted around 5 per cent of Federal expenditure in = 1976^^1^^.The finding of means to pay off domestic debts is again leading bourgeois governments to the need to increase lax revenue, so there is a vicious circle, the general result of which is an almost continuous increase in the tax burden, which is proving particularly painful for the masses of the people during economic crisis, growth of unemployment, and rise in the cost of living.
In crisis years there is also a substantial deterioration in the social security system in all capitalist countries. We have already mentioned that these benefits are a delinite gain of the working class. At the end of the 1960s, for example, their proportion in family incomes was 25.4 per cent in the Netherlands, 24.3 per cent in Luxemburg, 22.3 per cent in West Germany, 21.6 per cent in France, 21.1 per cent in Belgium, and 20 per cent in = Italy^^2^^. The biggest part consists of old-age pensions, although their weight in total expenditure on social security varies widely: from a third in Denmark, Ireland, Italy, and Belgium to nearly half and more in Great Britain and Luxemburg. Sickness benefits constitute between a quarter and a third of all social secu 'ity expenditure.
During the crisis Big Business launched an outright attack on the social security system. The worsening of the economic situation intensified the monopolies' dissatisfaction with (in their view) 'excessive' payments into social security funds, which led to a reduction in the proportion of employers' contributions in several countries: this naturally caused an increase in the proportion of the workers' contributions, which had already been a considerable percentage of the total. In 1975, for example, workers' contributions were 35.9 per cent of the total of social security funds in the Netherlands, 25.1 per cent in Luxemburg, 24.5 per cent in West Germany, 20 per cent in France, 20.(5 per cent in Belgium, 17.1 per cent in Great Britain, and 15.5 per cent in = Italy^^3^^. _-_-_
~^^1^^ Ibid.
~^^2^^ CNFF. 1'atronat, No.~323, January 1972, p 29.
~^^3^^ CNFF. Patronat, No.~301, July 1975, p~39.
173 Workers' contributions arc 5 to 10 per cent of their earnings and a direct deduction that is not always compensated by actual opportunities for everyone to receive benefit. In addition, there is a direct reduction in state iinancing of the social security system.The limitation of government spending on social needs, made on the pretext of 'economy', 'stimulating business', etc., is being accompanied in many cases with continuing growth of militarisation.
__ALPHA_LVL3__ GROWTH OF INSECURITYThe `economies' in social spending made by the governments of capitalist countries in crisis years worsen the working conditions of the working class. Evidence for this is the rise in industrial accidents and occupational diseases. According to U.S. official figures, for example, more than two million cases of disability through industrial accidents were registered annually during the 1970s. Employers' saving on social security expenditure is leading to a steady rise in the number of accidents in French industry. In this respect the crisis years beat preceding records. In 1974-5, 4000 persons were killed in each of the two years and 125 000 seriously injured. There were altogether a million accidents, as a result of which more than 29 million working days were lost (i.e. the equivalent of the work of 100 000 workers for a whole year)^^1^^.
In order to foist the consequences of the crisis onto the workers employers resort to every kind of trick and device. In Denmark, for example, many employers are throwing elderly skilled workers onto the street in order to 'save' on wages (workers who arc entitled to substantial additional pay because of their experience and years of service), and are replacing them with less skilled or lower paid workers.
Another 'profitable' method is underpayment of young workers and discrimination against them. At the beginning of 1976, for example, the trade unions in Odense, Denmark, reported that young workers in several of the _-_-_
~^^1^^ Georges Marehais. Op. cit., p~15.
174 city's enterprises were being paid only 58 per cent of the rate established by wage agreements.The position of women is even worse. At a conference of women Communists held in Copenhagen at the beginning of February 1970 it was said that women's working and living conditions had particularly deteriorated as a result of the crisis. The demand for 'equal pay for equal work' put forward 90 years ago and granted in Denmark in 1973 had not yet been implemented. Skilled women workers still receive only 75 per cent of the rate paid to men for the same work.
A relatively new phenomenon on the capitalist labour market during the crisis was a worsening of the working and living conditions of skilled workers and white collar employees as well as of manual workers.
We have already spoken of the growth of unemployment among 'white overall' workers as typical of the present crisis, but the fact is that the process is much wider than a deterioration in this group's conditions of employment. Under the impact of the growth in numbers and concentration of office workers, and a convergence in the working conditions in establishments with those of production workers, there have been substantial changes in the position of non-manual workers. Their exploitation has been intensified by the monopolies and state monopoly system while the depersonalisation of these workers and alienation from their work and its results have increased. This means above all that the 'personal relations' between employers and clerical staff that were long a 'privilege' of the latter and not available to production workers, are giving way to formal relations in present-day large-scale capitalist industry.
The intensification of the exploitation of non-manual workers is connected with the 'rationalisation' of their work through the ever wider introduction of computers. The 'technical' requirements of data processing by computer, and capitalism's economic need for maximum exploitation of expensive equipment, are increasing the intensity of clerical work, which is more and more becoming like that of workers.
The reduction of production during a crisis, and capitalists' saving on total labour costs, are now having 175 a tremendous impact on the position of 'white collar' workers. Some are simply thrown onto the street, reinforcing the army of the unemployed, while the rest are being more and more subjected to refined industrial methods of exploitation.
The insecurity of other strata of the working people, in particular of the peasantry and small farmers, but also of the intermediate urban and rural groups, is being greatly increased by the crisis.
In 1974-6, for example, the incomes of persons employed in agriculture fell markedly. In the United State farmers' incomes fell by 25 per cent in 1975 compared with the year before. The ruination of small and mediumsized farms has intensified.
This process has also been stimulated in Common Market countries by the 'common agricultural policy', which subsidises the big farming enterprises of the monopolies that have a dominant position in agriculture. The peasantry of developing countries proved to be in a very difficult position during the crisis, suffering as they do from landlessness, mounting exploitation by latifundians and the operations of multinational corporations, which take advantage of the market situation to buy up farm produce for a song. In Latin America, for example, 85 per cent of all the land belongs to fewer than 8 per cent of the owners, i.e. to big latifundians; 15 million land-hungry peasants are forced to work the landowners' fields for a pittance often not more than $ 50 a year. Multinational corporations, controlled mainly by American capital, appropriate a fifth of the gross national product of Latin America and a third of its export revenue; their profits were more than $2 billion a year in the 1970s.
The instability of the position of the urban and rural intermediate strata, artisans and craftsmen, and small businessmen and traders has become a feature of all capitalist countries. The crisis led to acceleration of the process of capitalist concentration, and an increase in the number of bankruptcies, especially of small and medium-sized firms.
The total number of trade outlets is falling in all capitalist countries. In France, for example, the number 176 of failures among small shopkeepers was 24 per cent higher in 1974 alone than in the preceding = year.^^1^^ Many formerly independent shopkeepers and traders have bocome wage workers in big capitalist trading firms. And even when the small man retains his independence it has often become a formality completely masking his dependence on Big Business.
Evidence of the growing insecurity of the majority of the members of capitalist society during the crisis of the 1970s is the position of pensioners. The average old-age pension in the United States, for example, is only 25 to 30 per cent of the pensioners' average previous earnings, which (with constantly mounting inflation) dooms them to a beggarly = existence.^^2^^ In 1976 around 40 per cent of those aged 65 and over in the USA receiving government pensions were living in = poverty.^^3^^ The elderly form a considerable part of the 26 million people who are officially living below the poverty line in the United States. The position is similar in other capitalist countries.
The crisis is also affecting the provision of workers' housing. Many writers in the West now speak of a housing crisis, which is showing itself in many ways. Building is being curtailed. In the United States, for example, investment in house building fell by half in 1975 from the pre-crisis high. The cost of housing is rising rapidly. The cost of building has increased, rents have risen steeply, and so too have the prices of available houses and flats. Before the crisis rents were 25 to 30 per cent of workers' family incomes in many countries, but in 1974-6 the rate of increase in the cost of housing broke all records of previous years. In the United Slates, for instance, the cost of a single-family home or apartment rose on average by more than 40 per cent in 1974-5. The price of a house or flat also rose by 50 or 60 per cent in the same period in Great Britain, Italy, and many other countries.
_-_-_~^^1^^ Georges Marchais. O\>. cit., p 17.
~^^2^^ I. T. Nazarcnko. SShA: antirab»chat/a pulitika monopolyi i proizi:<>(ii<tvKitin>i/<! straklwuaniye rubocliikli (The USA: the AntiLabour Policy ol the Monopolies and Workers' Industrial = Insurance) Moscow, 1975, j) 19.
~^^3^^ A. A. JN'ikilorova. Workers' Industrial Insurance—a Weapon in the Hands of tlio Monopolies. SS/iA: politika, ckonomika, idealogit/a, 1970, 5: 97.
__PRINTERS_P_177_COMMENT__ 12--0372 177Because of the rise in rents and of charges for electricity, gas, and other public utility services, payments have been getting into arrears. On certain big French housing estates 30 to 35 per cent of the tenants were in arrears for electricity and gas bills, rent, and various rates and taxes in = 1975.^^1^^ Gas and electricity were cut off from 500 000 = flats.^^2^^ 'In the atomic age,' Georges Marchais said at the 22nd Congress of the French Communist Party, in February 1976, 'families have gone back to using = candles'.^^3^^
A very specific feature of the housing crisis is that, in spite of the shortage of homes, a considerable number of newly-built houses remain unoccupied because of their high rentals. According to the Western press, there are many such houses in Paris, Bonn, and other = big cities^^4^^. At the same time bidonvilles are spreading in many of them, very overcrowded areas whose residents lack elementary conveniences.
The cost of treatment in an American^hospital was $ 30 to $ 40 a day at the beginning of the 1960s, rose to $70 or $100 in 1971, and was already $ 130 to $ 140 a day in 1974-5. The cost of treatment rose twice as fast in the USA after 1960 as prices of consumer goods and services, while the charge for in-treatment rose even five times as fast.
In France the cost of hospitalisation rose by 70 per cent in 1974-5; and in December 1975 alone an increase of 27 per cent was announced in Paris. Georges Marchais said at the 22nd Congress of the French Communist Party:
What are wo to say about all those for whom accident, sickness, disability, and old age are inhuman sources of agonising financial distress in capitalist society? There are six or seven million in France who suffer = this.^^5^^
One of the most obvious signs of the worsening of workers' life during the 70s crisis was the growing cost of _-_-_
~^^1^^ Georges Marchais. Op. cit., p 16.
~^^2^^ Ibid.
^^3^^ Ibid.
~^^4^^ Claude Pottier. La 'reforme' du logcment. Economie tit politique, 1977, 272: 99.
~^^5^^ Georges Marchais. Op. cit., p 15.
178 education. The main reasons for the rise in fees in secondary schools, and especially of tuition fees in higher schools, were the cuts in government spending on social needs, and inflation. In the USA the cost of a year's study at college averaged $4000 in 1975-6, and was much more in the major colleges and universities, in some of which the full cost of the four-year course of studies in mid-1976 soared to $50000. Even in most residential colleges the cost of four years' degree plus maintenance costs in the neighbourhood came to = $30~000.^^1^^The deterioration of the indicators of capitalist economies, the growth] of unemployment, the high cost of living, the fall in real incomes, and the increased insecurity of the overwhelming majority of the population are having an extremely unfavourable impact on all other aspects of social life in capitalist countries.
_-_-_~^^1^^ Georges Morris. USA: The Time of Discontent, Iiilen/ulional Affairs, 1970, 6: 107.
__PRINTERS_P_179_COMMENT__ 12* 179 __NUMERIC_LVL2__ 9 __ALPHA_LVL2__ The Progressive Forces' Fight for a Democratic Way Out of the Crisis __ALPHA_LVL3__ [introduction.]The economic crisis of the 1970s has led to a deepening of the class antagonisms in bourgeois society, above all of the antagonistic contradiction between labour and capital. ... MISSING __ALPHA_LVL3__ INTENSIFICATION OF THE CLASS STRUGGLE DURING THE CRISIS OF THE 70S 180
Table 22. Dynamics of the Strike Struggle and Mass Economic and Political Actions of the Working
People in Capitalist Countries
Year Numbers involved (in millions) Total in all actions in strikes in industrialised countries in developing countries numbers percentage of total in all actions in strikes percentage of total in all actions in strikes percentage of total 1966 44 13.7 31.1 27 10.7 ?0.6 17 3.0 '17.6 1967 47 13.3 28.2 3.) 10.7 35.6 17 2.6 15.3 1968 57 15.0 26.3 43 12.3 28.6 14 2.8 20.0 1969 60 10.0 33.1 44 16.8 38.1 16 3.1 10.4 1970 65 18.2 28.0 45 14.7 32.6 2.) 3.5 17.5 1971 70 10.6 28.0 48 16.6 34.5 22 3.0 13.6 1972 60 17.8 20.6 43 14.7 34.1 17 3.0 17.6 1973 60 21.5 35.8 45 17.5 38.8 15 3.0 26.0 1974 62 23.0 37.1 48 10.0 30.6 14 4.0 28.6 1975 63 24.5 38.8 50 20.0 4o.o 13 4.5 34.6 1966--1970 273 8>.l 29.3 189 65.2 34.5 84 15.n 17.8 1971--1975 315 106.4 33.8 234 87.8 37.5 81 18.4 22.7 Change in 1075 on 1066--70 (in millions) +42 +26.3 +45 +22.2 —3 +3.4 Percentage change +54 +32.8 +24 +16.8 —3.6 +22.7 OOSource: compiled from official statistics and the trade union and communist press by the USSR Academy of Sciences' Institute of the International Working-Class Movement.
181 movement, strengthening of its anti-imperialist trend, and the unusually broad scope of the strike struggle are the main features characterising the social atmosphere of modern capitalist society (sec Table~22).The total number of workers involved in strikes in 1971-5 increased by 26 300 000, or 32.8 per cent, on the preceding quinquennium (1966--70). If wo compare these years with earlier periods still, the difference is even greater. Compared with the early 1960s, for example, the numbers involved in strikes about doubled in 1971-5; and whereas the average yearly number of strikers was 42 million in the 1960s, it had risen to between 62 and 63 million in the mid-70s.
Evidence of the scope of the working-class movement in 1976 and 1977 is the mass national strikes in France, Italy, and Japan, the workers' actions in Portugal and Spain, the activisation of the anti-war movement in West Germany, the strengthening of the position of the democratic forces in the USA, Denmark, Canada, and many countries in Asia, Africa, and Latin America.
An important feature of the class struggle at the present stage is the broadening of its geography. Not so long ago there were countries in the West that the bourgeoisie considered centres of 'social peace'; now there are none.
The strike movement became particularly strong in developed capitalist countries, whore the contradictions between the social character of production and the private capitalist mode of appropriating and distributing wealth became particularly acute during the economic crisis of the 1970s (see Table 23).
The working class of developed capitalist countries, which numbers around 220 million, is in the vanguard of the class battles, and is doggedly fighting intensification of capitalist exploitation. It is fighting persistently to achieve an end of unemployment, a rise in wages, improvement of working conditions, and the carrying out of radical social reforms.
In January-September 1977 38 million persons took part in the strikes, mass actions, and political demonstrations held in developed capitalist = countries.^^1^^
_-_-_~^^1^^ Ekonomicheskaya gazeta, 1977, 45: 21.
182 Table 23. The Strike Movement In Developed Capitalist Countries (averages for the triennial periods shown) Country Number or strikes Numbers involved (OOOs) Number of man days involved (OOOs) (region) 1971-- 197/1-- 1971-- 1974-- 1971-- 1974-- 1973 1976 1U73 1976 1973 1976 USA 5167 5568 2415 2341 34 201 39076 Western Europe 13 180 15354 10 280 16076 45615 41425 Japan 2784 4034 1892 3118 5260 8726 Total 21131 24956 14587 21535 85076 89227Source: calculated froin data in —OKCD. Main Economic Indicators, 1977, 8, 9, 10.
The most powerful actions as regards both numbers and intensity occurred in the USA, Italy, France, Great Britain, West Germany, and Japan.
The deterioration of the workers' economic position, lowering of standards of living, and a rise in unemployment unprecedented for all the postwar years caused a marked intensification of the class struggle in the United States of America. No quinquennium in the whole postwar fight of the American working class other than the 1970--74 period was so full of strikes. The largest number occurred in 1974; not a single industry or sphere of the capitalist economy was free of them. The biggest strikes were fought by the electricians, lorry drivers (teamsters), workers and employees in the copper and other industries, airline pilots and employees, teachers, and local government employees. One of the most massive strike actions of 1974 was the miners' national strike (affecting 25 states and 120 000 miners). The miners won; the broad solidarity movement that developed throughout the country played a major role in their = victory.^^1^^
The whole of 1975 was also full of strikes, demonstrations, meetings, and conferences. The trade unions of the _-_-_
~^^1^^ See the survey of the 1974 strike struggle of the workers of capitalist countries made by the USSR Academy of Sciences' Institute of the International Working-Class Movement, and published in Itabochy Iclass i sovremennyi mir, 1975, 3: 59--60.
183 automobile, steel industry and teachers were particularly active. In April 1975 there was a march on Washington, one of the main organisers of which was the National Coalition to Fight Inflation and Unemployment: 75 000 people took part in the meeting held in Kennedy Stadium under the slogans 'We Want Jobs', 'Jobs Now!', 'Black and White Unity—Bar Racism—Jobs for All Now', 'Black and White, Unite and Fight!', 'One, Two, Three, Four—Money for Jobs not War!', 'For Jobs, Expand East-West Trade', 'Full Employment, More = Schools'.^^1^^The unity and solidarity of the various contingents of the U.S. working class, and support for the strikers of one industry by workers in other industries, were strengthened during the strike struggle in 1976 and 1977.
In a situation of economic difficulties and the existence of a millions-strong army of unemployed, the American working class is fighting for a guaranteed right to work, as was evidenced by the automobile workers' strike in 1977, and the fight for laws on full employment. The Daily World reported at the end of 1977 that the strike movement in defence of the right to work had affected plants (firms) along the whole Atlantic seaboard of the USA from Maine to = Texas.^^2^^
The 1970s finally ended the myth of the 'class peace' alleged to exist in West Germany. Bitter labour conflicts are becoming more and more frequent. In evaluating the West German strike movement, one must allow for its specific features; there, more than anywhere else, legal obstacles have been put in the way of strikers. Under the wage agreements signed by the unions with employers for a certain period, workers and employees are obliged to 'observe peace' for that time and not to resort to strike action. In recent years, however, there have been 'wildcat' strikes in West German enterprises not sanctioned by the unions.
The fight against dismissals and redundancy is taking a bigger and bigger place in the actions of West German workers. The trade unions are fighting for the right to control all decisions about reducing staff or transferring _-_-_
~^^1^^ Daily World, 27 May 1975.
~^^2^^ Ibid., 12 December 1977.
184 personnel, and plans for reorganising plants. The West German working class is trying to get social defence for every person seeking work and is demanding repeal of the anti-democratic ban on professional employment for political motives (Bernjsverbot).The strikes of May and June 1968 in France were not only one of the French working class's biggest battles but they opened a new stage of sharpening of the class struggle in capitalist countries. There was no weakening of the French workers' struggle against the shrinking purchasing power of wages, allowances and pensions, worsening of working conditions, and growth of unemployment in the 1970s. In continuing to fight stubbornly against the monopolies' domination, French workers have made an important contribution to strengthening the alliance of left forces within the country.
In 1976 railwaymen, steelworkers, communications, electrical, and gas workers struck work, and also the civil servants of many government departments, teachers, and students. Many engineers and technicians took part in the strikes along with the = workers.^^1^^
In May 1977 there was a huge national protest strike against the 'strict economy' policy. Thousands of works and factories were brought to a standstill, and many government departments, the Post Office, and transport did not work.
This struggle continued into the autumn of 1977, when mass actions not only of workers but also of small shopkeepers and artisans were organised in the Paris district and a number of other areas of France, protesting against the deterioration of the economic situation, rise of prices, and increase in financial and economic instabil- ity.^^2^^
The example of Great Britain too, where the class struggle has become particularly sharp, is indicative. The Conservative government tried to solve the country's economic problems at the expense of the working people's vital interests, 'froze' wages, and used the courts against workers' leaders. The workers replied to these measures _-_-_
~^^1^^ See: L'Humanite, 15 July 1976.
~^^2^^ Ibid., 10 November 1977.
185 by intensifying the strike struggle. The successful strike of 270 000 miners in 1974 was one of the most outstanding actions in the whole history of the British working class. It can be said, without exaggeration, that the mounting strike wave brought down the Tory government that was zealously defending the interests of the monopolies. British workers continued to fight stubbornly against the monopolies in 1975 and 1976 and their attempts to use the crisis situation for new attacks on the working class's interests. In 1976, for instance, the labour dispute in the plants of the British Steel Corporation had wide publicity. The Morning Star, the newspaper of British Communists, reported that thousands of workers in the Corporation's works in South Wales and other areas went on strike at the beginning of 1976 against the management's intention to resort to mass = dismissals.^^1^^The strike struggle took on an even broader scale in 1977. According to the British Department of Employment there were twice as many strikes in the first nine months of that year alone as in the same period in = 1976.^^2^^ The class struggle has also become very acute in Italy. The strike movement in 1974 and 1975 was without parallel in the postwar period. It culminated in the general strikes of 17 October 1974, 4 December 1974, 23 January 1975, and 22 April 1975, in each of which up to 14 million people took part.
In reply to employers' intimidation and manoeuvres, Italian workers intensified their activity in 1976 and 1977. Serious disputes affected the motor car, building, chemical, food, and textile industries, and also transport and agriculture. The upsurge of the strike movement affected the outcome of the parliamentary elections in June 1976, which ended in a major advance of the country's democratic forces, led by the Italian Communist Party.
In November 1977 eight million industrial workers answered the trade unions' call for a national general strike. Those taking part called on the government to take effective measures to overcome the economic crisis. _-_-_
~^^1^^ Morning Star, 5 January 1976, and subsequent issues.
~^^2^^ Ibid., 15 November 1977.
186 Their strike was joined by urban transport workers and by farm labourers and agricultural workers, who demanded steps against the crisis in = agriculture.^^1^^Striking examples of the illusory nature of ideas about the existence of oases of 'social peace' are provided by modern Denmark, which was swept in the mid-70s by a broad strike movement whose intensity did not slacken. According to press reports, the country had not known such an upsurge of class battles since 1936.
In the countries of Latin America, Asia, and Africa, the class struggle has its own specific features. The combination of a relatively high level of development of certain sectors of the economy in Latin America with backwardness of others, and strong dependence on foreign capital, is sharpening social and economic contradictions, which is stimulating growth of a mass strike movement.
Class contradictions are also sharpening in Asia and Africa. Development of the revolutionary process is being stimulated in the countries of these regions by internal factors like the exacerbation of social contradictions, the continuing process of class and political differentiation of social forces, and strengthening of revolutionary-democratic and anti-feudal trends.
The intensity of the class battles witnesses to the significance of the working class as the main and strongest opponent of the monopolies' power. The proletariat is maintaining its role of fighting vanguard of today's revolutionary forces.
__ALPHA_LVL3__ LENIN ON THE CONTENT AND ROLE OF THE WORKINGMarxism-Leninism has always attached great importance to the proletariat's economic struggle. As Engels wrote, the working class's struggle against the bourgeoisie 'has three sides—the theoretical, the political, and the practical-economic (resistance to the = capitalists)'.^^2^^ It was in the unity of all forms of struggle, in this, as it were, 'concentric attack' of the proletariat, Lenin stressed, _-_-_
~^^1^^ Unit\`a, 15 November 1077.
~^^2^^ Quoted from V. I. Lenin. What Is to Be Done? Collected Works, Vol. 5, p 372.
187 citing Engels' words, that 'the strength and invincibility of the German movement = lies'.^^1^^Lenin attributed the decisive role in this to political struggle, which alone could ensure 'the winning of political liberty', i.e. power for the proletariat, without which it was impossible to realise all the economic aims and final goals of the working-class = movement.^^2^^
One of Lenin's important historical services was bis fundamental disclosure of the essence of the economic struggle and its various forms, and of the dialectical interconnection of the economic and political struggles.
The working class's economic struggle is a necessary and inevitable result of the very existence of capitalist exploitation. It is the workers' 'self-defence'. Lenin said many times that the working class must light constantly for its economic interests, considering Ibis struggle a condition of the proletariat's existence and maintenance of its human dignity. Economic interests play an important part in developing the working class's class consciousness. Historical experience has time and again confirmed Lenin's conclusion that only the masses driven by deep economic necessity can make the revolution. Economic interests have always been, and still are today, an important source of revolutionary spirit, although any idea of this being the direct result of hunger and poverty is foreign to Marxism-Leninism.
It is particularly important to stress Lenin's analysis of the various forms of economic struggle. In several of his works he drew a distinction between lower and higher forms of economic struggle. The lower form, in his view, is economic struggle in the strict sense of the term, as the workers' fight against individual capitalists. It is resistance to the capitalists that does not end the sale of labour power as such but gets better terms for its sale, i.e. the lower form is a purely commercial deal, the essence of which is better terms for the sale of labour = power.^^3^^
_-_-_~^^1^^ V. I. Lenin. What Is to Be Dine? Collected Works, Vol. 5, p 372.
~^^2^^ V. I. Lenin. A Draft Programme of Our Party. Collected Works, Vol. 4, pp 235, 253.
~^^3^^ See: V.~I. Lenin. What Is to Be Done? Collected Works, Vol.~5, p.~398.
188Lenin stressed the importance of the higher forms of economic struggle, which consist in limiting the economic domination of tbe monopolies in society as a whole. In this case it is a matter of fighting for economic rebirth of society, so as to save it from the calamities that the capitalist system brings with it, and from domination by monopolies. In his work The Impending Catastrophe and How to Combat It, he wrote of the need to carry on an economic struggle aimed at limiting the omnipotence of tbe monopolies and to encroach on the supremacy of the landowners and = capitalists.^^1^^
A feature of Lenin's posing of the question of economic struggle was his considering it in close connection with the political struggle. The economic struggle, he said time and again, cannot bring success if the workers have not won political rights and are not fighting against the government to establish the proletariat's rule.
Any economic struggle (he wrote) necessarily becom.-s a political struggle, and = Social-Democracy^^2^^ must indissoluhly combine the one with the other into a single class struggle of the = proletariat.^^3^^
Lenin's detailed analysis of the essence and forms of economic struggle led him to conclude that there was a form of political struggle corresponding to each of them. Limiting of the proletariat's outlook to a 'narrowly practical' economic struggle went hand in hand, as a rule, with the development of trade union politics, which essentially applied only to the relations of the workers of a given trade and did not affect matters of the foundations of the bourgeoisie's power. Trade unionism meant, as a result (he wrote), 'ideological enslavement of the workers by the = bourgeoisie'^^4^^.
The higher forms of economic struggle, which have a general democratic, anti-monopoly content, _-_-_
~^^1^^ See: V. I. Lenin, Collected Works, Vol. 25, p 324.
~^^2^^ The Marxist party in Russia was originally called the Russian Social Democratic Labour Party (from 1898 to 1918). In 1918 it was renamed the Russian Communist Party (Bolsheviks). Since 1952 it has been called the Communist Party of the Soviet Union.
~^^3^^ V. I. Lenin. Our Programme. Collected Works, Vol. 4, p 213.
~^^4^^ V. I. Lenin. The Immediate Tasks of the Soviet Government. Collected Works, Vol. 27, p 216.
189 corresponded to revolutionary political activity. They are in fact already the result of the inculcation of a revolutionary consciousness in the working class rather than a trade union one. But, as Lenin remarked, there is also a danger here of the goals being limited, which can ultimately lead to rejection of revolutionary struggle.This last circumstance is linked with the fact that all forms of economic struggle, like all other directions of the working class's activity, incidentally, can have either a revolutionary character or a reformist one. Everything depends on their aims.
While capitalism existed the political and economic activity of the working class was marked by two tendencies. On the one hand, there was the tendency to settle down fairly comfortably under capitalism, which was feasible only for a small upper stratum of the proletariat. On the other hand, there was the tendency to lead the whole mass of working and exploited people towards the revolutionary overthrow of capital in = general.^^1^^
Marxism-Leninism has never opposed economic struggle of a reformist character.
The tactics of the politicians' and revolutionaries not only do not ignore the trade-union tasks of Social-Democracy, but... on the contrary, they alone can secure their = consistent fulfilment.^^2^^
Lenin stressed that
the Social-Democrats are fighting for all improvements in the conditions of the workers and peasants which can be introduced immediately, when we have not yet destroyed the rule of the bourgeoisie, and which will help them in the struggle against the = bourgeoisie.^^3^^
At the same time he warned against the danger of being drawn by partial aims into sacrificing the main ones.
He, who goes all out, who fights for complete victory, must alert himself to the danger of having his hands tied by _-_-_
~^^1^^ V. I. Lenin. What Is to Be Done? Collected Works, Vol. 5, p 402.
~^^2^^ V. I. Lenin. Ibid., p 402.
~^^3^^ V. I. Lenin. To the Rural Poor. Collected Works, Vol. 6, p~395.
190 minor gains, of being led astray and made to forget that which is still comparatively remote, hut without which all minor gains are hollow = vanities.^^1^^
That is why he attached particular importance to the higher forms of economic struggle that were more closely linked with the tasks of restructuring society politically. He rioted the need for variety in activity directed to making economic and socio-economic reforms. Their essence should not be limited simply to partial improvements in the material position of one group of the working class or another. The aggregate of sucli reforms is a step on the road of all society toward socialism, a means of saving society from the 'impending catastrophe' created by the domination of capitalism.
Lenin's working out of a system of measures to be implemented by the democratic forces led by Communists in their struggle for democracy and socialism was one of his important contributions to the theory of MarxismLeninism and the strategy and tactics of the revolutionary movement. Among the socio-economic reforms of a general democratic character limiting the power of monopolies he included the exercise of control over capitalists' activity, nationalisation of the banks and enterprises of the biggest monopolies, the abolition of commercial secrets, rendering of aid to small and middling firms, extension of co-operatives, and of economic democracy.
Lenin understood the process of democratic reform as a means of building a broad, general democratic, antimonopoly alliance, and of preparation for the final ending of capitalist domination. By fighting for these reforms Communists thereby exposed the anti-democratic character of this domination, and undertook the mission of defending society against the harmful consequences of capitalist exploitation.
_-_-_The Bolsheviks are acting ... as the representatives of the interests of the whole people, which are to ensure food distribution and supply and meet the most urgent needs of the workers and = peasants.^^2^^
~^^1^^ V. I. Lenin. Political Sophisms. Collected Works, Vol. 8, p 427.
~^^2^^ V. I. Lenin. The Impending Catastrophe and How to Combat It. Collected Works, Vol. 25, p 357.
191The carrying out of socio-economic reforms of a really revolutionary character, Lenin stressed,
The genius of Lenin's idea of the essence, forms, and role of economic struggle in the proletariat's general class struggle is of tremendous significance for the activity of the progressive forces of capitalist countries today. __ALPHA_LVL3__ TODAY'S FEATURES OF THE ECONOMIC STRUGGLEwill not yet bo socialism, but it will no longer bo capitalism. It will be a tremendous stride toward socialism, one from which—if full democracy is maintained —it will be impossible to return to capitalism without unparalleled violence against the = masses.^^1^^
In the situation of sharpening of the contradictions of capitalism during the crisis of the 1970s, and the further upsurge of class struggle, the significance of the proletariat's economic struggle has been growing, and in many ways its content has been altered.
The role of the economic sphere in the class struggle is being raised, above all, by the elect of the objective development of the productive forces. The scientific and technical revolution is increasing the interdependence of the various sectors of the economy, industries, and economic areas. The dependence of each individual on the general results of economic activity is growing. The economic struggle to improve the position of the working people is now taking on a deeper character. Matters like the provision of employment and vocational training and general education for the working people, and their involvement in control of production, are now on the agenda; the workers are putting forward demands against the intensification, monotony, and routine character of work, and for an improvement of social insurance.
A rise in the significance of the economic struggle is also being encouraged by the inability of the bourgeoisie today to cope with the cardinal problems of society's _-_-_
~^^1^^ V. I. Lenin. The Impending Catastrophe and How to Combat It. Collected Works, vol. 25, p 364.
192 economic development. The economic crisis of the 1970s is evidence thai monopoly domination and the state monopoly system arc preventing all-round employment of Ihe advances of the scientific and technical revolution in the interests of society. Subordination of the productive forces' development to the military-industrial complex is creating a threat, to the very existence of human society. The contradictions of socio-economic development are getting sharper, and likewise inter-sectoral and regional imbalances, while the general instability of the capitalist economy is increasing. As the contradictions deepen, the economic struggle is becoming more and more intertwined with (lie political fight, which manifests an objective trend in the development of the mass movements of our day.The development of joint action on an international scale as well as nationally is an important feature of the present stage of the class struggle, connected with the developing process of internationalisation. The workers' progressive organisations are for co-ordinated joint actions by the workers of capitalist and developing countries against multinational companies so as to strengthen international solidarity with the people's struggle for full political and economic independence and the sovereign right to dispose of their own natural resources, and so as to settle the complex problems of the migration of workers in the interests of the working people.
The considerable broadening of involvement in strikes is no less important. Members of national minorities, working women, youth, and the unemployed are becoming more and more actively involved in strikes, i.e. all those strata of the population who first suffer the grave consequences of economic crisis. In the sphere of material production the crisis led to an activising both of the traditional sections of the industrial proletariat, who had been greatly demoralised by redundancy in the preceding years (miners, railwaymen, etc.), and of the working class of the new sectors of the economy, who had hitherto not experienced serious difficulties. The activity of the working peasantry and farmers also increased enormously in these years.
__PRINTERS_P_193_COMMENT__ 13--0372 193Another important feature of the proletariat's struggle today, and, moreover, a fundamentally important one, as the 1970s crisis has] brought out, is connected with the growing involvement of workers by brain and of employees in the services sphere. In the USA, for example, the proportion of services personnel taking part in strikes rose from 21.6 per cent in 1960 to 48.2 per cent at the beginning of the 1970s, and in Japan from 34.5 per cent in 1965 to 66 per cent. The growth of the strike movement in the services sphere is a result of the activisation of public servants, in particular of local government employees and teachers, and has been seen most strongly in countries where the scientific and technical revolution is developing rapidly (viz. the USA, West Germany, Japan, and France). The mounting strike movement in the services sphere is of great political significance. (1) The transition of this section of white collar workers and the intelligentsia to proletarian forms of class struggle is an indication of their acquiring a proletarian class consciousness. The problem of consolidating the alliance of workers by hand and by brain is coming onto the agenda. (2) Their direct opponent is the bourgeois state, which is forced to throw off the mask of 'arbiter' and to put itself openly on the opposite side of the class barricades.
The economic struggle of the working class and other non-monopoly strata of the population of capitalist countries is making an increasingly weighty contribution to the general anti-imperialist struggle of the world's progressive forces. The big strikes of the 1970s became an important indicator of the political instability of bourgeois society, and to some extent led to a change of governments in Great Britain, Italy, West Germany, and Japan, and had an enormous moral and political effect on the whole working class and all bourgeois society.
The economy is thus a key sphere of the class struggle of the proletariat of capitalist countries. In today's situation not only is its role increasing but there is also an ever greater growing over of lower forms of economic struggle into higher ones, and a posing of ever broader and more complex social aims in them.
194 __ALPHA_LVL3__ THE WAY OUT OF THE CRISIS IN THE INTERESTS OF THEThe upheavals affecting various spheres of the economy, politics, and ideology of capitalist society, and the serious consequences of the ecological crisis for the working people, and for whole nations and continents, have faced the capitalist world with an issue of immense importance, namely, what is the way out.
The statement For Peace, Security, Cooperation and Social Progress in Europe adopted by the Berlin Conference of European Communist and Workers' Parties on 30 June 1976 noted that:
In this situation the action of Communists, as the most consistent fighters for the workers' vital interests, and the political vanguard of this struggle, are acquiring special importance.The reactionary circles of Big Business are trying to find a way out of this situation by restricting the democratic and social rights of the masses of the people and shifting the burden of the crisis onto their shoulders__ The working class and all working people in the capitalist-dominated part of Europe are struggling for a democratic way out of the crisis that would correspond to the interests of the broad masses of the people and open the way for a socialist transformation of = society.^^1^^
Communists are putting forward a realistic, peaceful, humane programme, the essence of which is to defend the immediate interests of the working class and broad, nonmonopoly strata of modern society, and to carry out a set of radical socio-economic reforms, and on the international plane to consolidate peace, and further relaxation of tension, and to develop mutually^ beneficial, equal cooperation of all countries.
Let us consider the concrete content of the Communists' counter-crisis programme.
Whereas the state monopoly programmes that are officially supposed to weaken the crisis and resolve certain social difficulties in fact serve the interests of Big Business, and will ultimately worsen the position of the _-_-_
~^^1^^ For Peace, Security, Cooperation and Social Progress in Europe, p 38.
__PRINTERS_P_195_COMMENT__ 13* 195 working people, the basis of the Communists' countercrisis programme is concern for the working people.The inner logic of Communists' proposals is not a worsening of the workers' position but a substantial improvement in it, and so an increase in society's purchasing power. Concern for the development of society's main productive force, the working people, figures in Communists' proposals as a means of ensuring steady, stable growth of the economy. In fighting to defend the working people's immediate interests and against unemployment, the rise in the cost of living, and the deterioration of other living conditions, Communists are endeavouring, on the one hand, to eliminate the disastrous consequences of capitalist exploitation (which became particularly clear during the crisis) and on the other hand to create the conditions for normal development of the national economy and for curbing the power of Big Business.
The last point is particularly important because any raising of wages, lowering of prices, or increase in unemployment assistance cannot yet lead society out of its state of crisis, which arises from the laws of the capitalist economy, monopoly domination, and the state monopoly system that defends the monopolieso' interests.
The demand to defend the working people's immediate interests is therefore combined in Communists' countercrisis programmes with another one, for radical social and economic reforms that would lay the economic foundation for transforming modern bourgeois society. As the programmes of many Communist Parties stress, the carrying out of such anti-monopoly reforms would make it possible to advance to the socialist revolution and thus to an ending both of the crisis and of the very grounds for the occurrence and development of economic crises.
In today's conditions of a crisis of the state monopoly structures themselves, the democratic alternative proposed by Communists as a way out of the crisis is based largely on a restructuring of the state machinery and a qualitative change in the essence of its activity through democrat isation.
Communists consider that democratisation of the state would make it possible to carry out a structural __NOTE__ "1" missing from "196" 196 reconstruction of the economy to give it healthier inner proportions and external relations. Anti-monopoly demands thus serve as a means of defending the national interest arid of saving society from the 'impending catastrophe' of crisis, uncurbed inflation, and unemployment.
The democratic alternative to the economic crisis, worked out by Communists, develops Lenin's idea on the role and content of the working class's economic struggle, and its fight for democracy and socialism.
The fight to raise workers' real wages is a most important concrete aspect of the left forces' activity within the counter-crisis programme.
__ALPHA_LVL3__ AGAINST THE RISING COST OF LIVING AND INFLATION, FORIn exposing the mechanism of capitalist exploitation— the rise of prices and restriction of wages, Communists stress that the monopolies are using inflation to shift their economic difficulties onto the working people. Communists propose, first, to limit the rise in prices, and then to stop it, and so help raise workers' real wages; to abolish the restrictions imposed by bourgeois governments on pay increases; to establish a sliding wage scale and, where such exists, to ensure that it operates in the interests of the workers. The money to raise wages should come from restrictions on capitalists' profits, which would completely exclude the 'automatic' rise of prices by which the monopolies justify inflation, arguing the inevitability of price rises.
Given exercise of workers' and general democratic control over price-fixing and the activity of the institutions of the state machinery and monopolies concerned, and broad democratic control over the marketing of the monopolies' output, it would become possible to pursue a new wages and prices policy.
The report of Franz Muhri, Chairman of the Communist Party of Austria, to a Party economic policy conference on 13 March 1976 said:
Big Business and the Government arc seeking in various ways to shift the burden of the crisis onto the workers... Big 197 Business and the Government are striving for a way out of the crisis at the expense of the working man and through maximum protection of profits....
We demand legal restrictions on wholesale trade margins, guarantees that price and tariff cuts on imported goods will be passed on to the consumer, legal measures to force multinational concerns to sell goods in Austria no dearer than the lowest price they are selling them at in other = countries.^^1^^
The statements of the Communist Party of Great Britain (especially the resolutions of its 34th and 35th congresses, held in 1975 and 1977) have paid much attention in recent years to the fight against inflation and the rising cost of living. The programme drafted by British Communists envisages, in particular, demands for an increase in wages, pensions, and benefits, immediate freezing of rents and prices (except of luxury goods), establishment of strict price controls, expand the economy and end unemployment, stop the cuts—improve education, health, housing and other social = services.^^2^^
The General Secretary of the French Communist Party Georges Marchais, replying at a press conference in 1975 to questions about the concrete economic demands being made by the Party, named three main groups of measures. The first group concerned sharp restrictions on monopolies' profits, in particular by imposing extra taxes on the superprofits of the 500 biggest French companies, an emergency tax on the 1974' turnover of oil companies, abolition of the tax privileges of trusts, democratic control over the use of public funds, and movements of private capital. The second group concerned the need to stimulate economic activity in sectors meeting national requirements. The third group of measures needing to be adopted concerned raising home consumption arid creating jobs (reduction of the working week), lowering of the pension age (to 60 for men and 55 for women), the freezing of rents and public utility charges, = etc.^^3^^
_-_-_~^^1^^ Weg and Zie.l, 1970, '\: i-viii.
~^^2^^ See: Comment, 1975, 13, 24/25: 392--398
~^^3^^ L'Humanite, 19 March 1975.
198 __ALPHA_LVL3__ AGAINST UNEMPLOYMENT, FOR GUARANTEED WORKThe ending of unemployment has a major place in the demands of the progressive forces of capitalist countries. For this purpose far-reaching reforms at national and international level are proposed. The working class is developing new tactics in fighting mass redundancy and a further rise in unemployment in accordance with the specific features of the economic and political situation in each country.
To fight unemployment the left forces call for the development of a broad economic programme to provide effective co-ordinated use of human, material, and financial resources. It is a question of an all-round re-- orientation of the development of social production, in particular the switching of the military sectors of the economy to production of civilian goods, the carrying out of big public works to protect the environment, the tackling of transport, housing, and food problems, and the development problems of big cities. Development of the most progressive, science-intensive and labour-intensive industries, and the creation of mass markets for their output should have a central place in this = programme.^^1^^ The progressive forces are not simply demanding the creation of new jobs suitable for unskilled manual workers, but are also calling for trade training and vocational education for workers.
In this connection a set of proposals is being put forward concerned with improving the general educational and vocational training of workers, in particular through lengthening the period of study in schools of all levels, improving the curricula, and promoting culture and science. Implementation of such measures would ultimately be of benefit to all society.
The progressive forces' spokesmen emphasise that never before have the worker's educational and cultural standards, and his ability to assimilate new knowledge and spiritual values, played such an immense role. This circumstance, dictated by the scientific and technical _-_-_
~^^1^^ See: Unemployment Problems in Developed Capitalist Countries. Rabochy klass i sovremennyi mir (The Working Class and Contemporary World), No.~3, May/June 1975
199 Emacs-File-stamp: "/home/ysverdlov/leninist.biz/en/1980/CCCWP251/20051220/252.tx" __EMACS_LISP__ (progn (lb-ht-force-refresh "en/1980/CCCWP252/") (lb-ht "1980")) __EMAIL__ webmaster@leninist.biz __OCR__ ABBYY 6 Professional (2005.10.22) __WHERE_PAGE_NUMBERS__ bottom __FOOTNOTE_MARKER_STYLE__ [0-9]+ revolution is giving an objective basis to the proletariat's demand for an improvement of education, extension of vocational training, and reduction of working hours. The working people are demanding, as urgent measures, improvement of the position of the unemployed, an increase in unemployment assistance, and the ending of political and other discrimination, in the determination and payment of benefits. Special attention is being paid to helping provide work for young people, women, and members of national minorities.The General Secretary of the Italian Communist Party, Enrico Berlinguer, said in his report to the Party's 14th Congress (March 1975) that it was necessary to take counter-measures in the economic sphere for a way out of the crisis, and to check the fall in production, defend the interests of the underprivileged strata of the population, expand employment, and make new investments in the country's economy. A paramount national aim now was not simply to prevent any further deepening of the crisis but to begin a gradual advance and regeneration of the countiy, to do which would need the united efforts of the whole = people.^^1^^
American Communists arc paying much attention to the fight against unemployment as will be seen from the resolutions of the 20th and 21st National Conventions in 1972 and 1975, and from the statements of Parly leaders in recent years. Unemployment was a central issue in the Communist Party's 1976 presidential election campaign, which put a programme to American voters aimed at meeting the needs and hopes of ordinary Americans. Modern America's shame—vast unemployment— must be ended, and the workers ensured full employment, the Communists say; and for that they demand, in particular, reduction of the Pentagon's vastly swollen budget and spending of the funds released on social needs, radical reform of the fiscal system so as to plug the holes that let the rich and the corporations shift a backbreaking burden onto the working people, the ending of race discrimination, especially in matters of l.he payment of unemployment benefits, the introduction of five education _-_-_
~^^1^^ Unita, 19 March 1975,
200 for the youth, and a thorough restructuring of the U.S. economy.^^1^^The Communist Party of Denmark takes a consistent stand in defence of the workers' vital interests and for the provision of jobs. It has put forward a serious, constructive alternative to the bourgeois government's policy, for ending unemployment, price restraint, and improving the workers' material = position.^^2^^
The progressive forces' spokesmen correctly link tackling of the cost of living and employment with many other issues making for growth of insecurity in workers' lives and deterioration not only of the economic conditions of existence of the overwhelming majority of the members of modern bourgeois society, but also of their social, political, and moral conditions of existence.
__ALPHA_LVL3__ AGAINST THE INCREASING INSECURITY OF WORKERS' LIVESIn fighting for a democratic way out of the crisis the left forces are putting forward a number of demands which, if implemented, would help improve the working people's general standard of living. In doing so they stress that full emancipation from exploitation will only become possible when its economic basis, private ownership of the means of production, and the political power of the monopolies, have been ended.
The progressive forces' spokesmen in capitalist countries have been paying much attention of late to developing social programmes, resolutely opposing state monopoly activity in this field. They are exposing the class character of state monopoly circles' social policy and showing that the notorious 'economy' on social expenditure being made by the ruling circles of capitalist countries in no way helps ease the crisis difficulties but, on the contrary, makes for a further deepening of the economic crisis and a worsening of the masses' position. The progressive forces' social policy is a programme in the interests of the overwhelming majority of the members of society aimed at improving the working people's _-_-_
~^^1^^ Daily World, 11 June 1976.
~^^2^^ Land og Folk, 19 December 1974; 30 May 1970.
201 life and at a general revival of the economic situation in capitalist countries.The money to finance the proposed measures would come (1) from increased corporation taxes, (2) from the funds released by cutting a substantial part of military spending, and (3) from the monies now being spent by the bourgeoisie on personal consumption, excessive advertising, etc.
An example of Communists' activity in this field is the programme of the Swiss Party of Labour, adopted by its National Conference in 1971, and the resolutions of its 10th Congress, held in June 1974. Much attention was paid in them to the granting of federal pensions for all old people and disabled, the pension fund to be financed by a special levy on the profits of Big Business; defence of tenants' rights and immediate introduction of a plan of effective help for building workers' housing; a fight against speculation of all forms, and in particular against land speculation; the introduction of a uniform, general scheme of social insurance against sickness, disability, and industrial accidents and to provide maternity insurance and payment of allowances to big families; the establishment of equal pay for men and women; reduction of the working day and lengthening of paid = holidays.^^1^^
By their struggle Communists are resolutely defending the interests of the working class, which is the main opponent of the monopolies' power and the main force in the fight for peace, democracy and socialism.
At the same time Communist Parties understand the need to build an alliance of the working class and all the other non-monopoly strata of bourgeois society. The economic basis of this alliance is the unity of the interests of the overwhelming majority of society in face of the monopoly bourgeoisie, who are exploiting the working class, peasantry and small farmers, and the urban and rural middle strata by means of the bourgeois state.
From the class angle the social milieu in which the working class of developed capitalist countries finds its allies is not uniform. It includes the scientific and _-_-_
~^^1^^ Parti Suisse du travail. Rapport du Cornite central an Congres national, Bale, 1-or juin 1974 (Geneva, 1974), pp 24--33.
202 technical and creative intelligentsia (which, in turn, is a complex social conglomerate), and the working peasantry and farmers, artisans and craftsmen, and the urban and rural petty bourgeoisie. In the current literature these are often called, in the aggregate, 'middle strata or classes'. Some of them are disappearing in the course of the objective development of capitalist industry and growth of monopoly. Another section is being continually reproduced but in the context of its increasing dependence on the state monopoly system. Both these processes are greatly intensified during economic crises, when the general instability of small businesses increases and the standard of living of peasants and small farmers, office workers, and a large part of the intelligentsia deteriorates. That is why the Communist Parties of capitalist countries call for the establishment and development of broad social alliances, and the adoption of concrete economic programmes, in particular as regards the urban and rural middle strata.This programme is based on the idea of the unity of interests of the working class and the middle strata not only in the democratic struggle for a way out of the crisis and the democratising of bourgeois society, but also during the fight to carry through the socialist revolution. The progressive forces' spokesmen stress that the working class of capitalist countries not only does not intend to confiscate the property of small owners but will try and provide them with the necessary conditions for free development and voluntary decision of their attitude to socialism. Today, as before, Lenin's words are apposite:
To break the resistance ol a few hundred millionaires- that is the sole joh ... even for the purpose of a socialist revolution there is no need at all for the 'tens of millions of citizens to abdicate their properly rights' —
No socialist has ever proposed that the 'tens of millions', i.e. the small and middle peasants, should be deprived of their property__
Nothing of the kind.Socialists everywhere have always denied such = nonsense.^^1^^
When working out the current demands of a countercrisis programme, Communists pay great attention to _-_-_
~^^1^^ V. I. Lenin. How the Capitalists Are Trying to Scare the People. Collected Works, Vol. 24, p 440.
203 defence of the interests of the urban middle strata, emphasising that office workers and the intelligentsia, who constitute the hulk of them, are suffering from devaluation of the social status of occupations of mental work, and are more and more coming up against willful, bureaucratic attitude of the top echelon of the state monopoly machinery and its incompetent interference in their activity, and are falling into humiliating dependence on capitalist magnates. The job of the progressive forces is to end this dependence, to provide conditions for the intelligentsia's creative activity that would not be subject to financial magnate's pressure but would be subordinated to the interests of the people and society as a whole.The left forces' spokesmen also propose a programme to defend the interests of the rural middle strata, the small and middling farmers who are being more and more exploited by the monopolies, in particular by the big agrobusinesses and the bourgeois state.
A specific example of Communists' activity in this field is the programme for co-operation of the democratic forces of Finland adopted by the 17th Congress of the Communist Party of Finland in May = 1975.^^1^^ In addition to defence of the working class's interests (higher incomes, better working conditions, jobs, etc.), this programme devotes much attention to improving the position of small holders and small businessmen. It includes a demand for an increase in government subsidies, reduction of the middleman's cut, reduction of prices of goods needed in agriculture, and the ending of discrimination against small businesses in credit, finance, and taxation.
This programme assigns an important place to defence of the interests of the intelligentsia, office workers, and other members of the urban middle strata. It provides, in particular', for support of every kind for progressive culture. Finnish Communists propose ending subordination to the monopolies in the field of culture, and increasing society's role in the activity of the scientific, technical, and creative intelligentsia. The government should _-_-_
~^^1^^ See: Sun men Kummunistisch /tuolcen esiti/s demiihraaliistcn boimien Yhteislijoolijelinaksi (Helsinki, 1975),
204 actively assist the publication of literary works and give support of various kinds to the arts.Finnish Communists also devote much attention in their programme to improvement of the educational system, the aim of which should be to provide equal opportunities for all and full development of the capacities of the working people. They stress that science and research should serve the interests of the majority of the people; to this end they suggest the passing of a law on the development of research, and the financing of research on that basis, so as to provide scientific workers with the conditions necessary for their work, and giving them the right to democratic control without political or other discrimination.
The most important tasks of Communists are their active involvement in the fight to end the crisis, and their efforts to mobilise the masses and unite all democratic forces so as to defend the interests of the working people, curb inflation, reduce unemployment, and extend social security.
Communists understand, however, that a way out of the crisis cannot be found simply in defending workers' immediate demands. History provides many examples of when Big Business, forced by pressure of circumstances to make concessions to the democratic forces, soon intensities exploitation once more, and restricts the people's democratic rights. Defence of the workers' immediate interests can only be effective when radical social, economic, and political reforms are carried out.
__ALPHA_LVL3__ RADICAL SOCIAL AND ECONOMIC REFORM OF BOURGEOISDemands for a curbing and weakening of the monopolies' power constitute, in the aggregate, a kind of second part of the general programme for a way out of the crisis being proposed and fought for by the progressive forces of capitalist countries. From the angle of their class content they have a transitional character. Their implementation will not mean victory of socialism, at the same time it will, however, strike a blow at the heart 205 of contemporary capitalism, i.e. monopoly property and the state monopoly system.
The social and economic reforms that the progressive forces are fighting for are aimed at restricting and undermining the cco7iomic foundations of slate monopoly capitalism, i.e. monopoly property, through democratic nationalisation and the establishing of democratic control over industry, and on that basis to plan and control the economy democratically in the interests of society.
Communists understand that the working class can only achieve full implementation of such radical socioeconomic reforms in alliance with the other non-monopoly strata of society, and by ending the monopolies' political power. The specific reform programmes will be a firm basis for joint action of broad alliances of the democratic forces aimed at breaking the power of the monopolies.
Many fraternal parties are contributing to the tackling of these issues, among them the German Communist Party, which can be taken as an example for a survey of the general posing of the content, role, and place of radical social/economic and political reform of capitalist society.
The revolutionary strategy and tactics of West German Communists in the current stage were defined and developed in their Party's programmes adopted by its Essen (1969), Diisseldorf (1971), Hamburg (1973), and Bonn (1976) congresses. These programmes analysed state monopoly capitalism in the Federal Republic of Germany and described the effect of the changes in the international situation of the country's social and political development.
West German Communists consider it necessary, in order to overcome the economic crisis, to fight the main causes giving rise to it, i.e. the system of monopoly domination. Realisation of this historic task will call for the implementing of radical socio-economic reforms aimed at curbing and ending the monopolies' power and establishing a democratic = order.^^1^^
_-_-_~^^1^^ See: W. Gems and R. Sreigerwald. Problems der Strategic dcs anti-monopolistischen Kampfes (Frankfurt on Main, 1973), pp 5, 33.
206The essence of anti-monopoly reform, the German Communist Party's resolutions say. is that there must be fundamental changes in the balance of power on the political arena. State power should be exercised by the working class in a broad coalition of anti-monopoly forces. In the economic field the most important means of production must be transferred to public ownership by nationalising the monopolies and introducing workers' control over them by the working class. The carrying out of these anti-monopoly reforms would have a transitional character; final ending of economic crises depends on resolving the issue of the existence of the system of capitalist domination. The most favourable conditions for the advance to socialism would be ensured by transitional measures, by consolidating the working class's political power in alliance with other strata of the working people, and by further development of the class struggle.
__ALPHA_LVL3__ DEMOCRATIC NATIONALISATIONLet us consider in more detail the main demands put forward by Communist Parties in their programmes for radical social and economic reforms. The main point in them is the demand for democratic nationalisation of the economy.
Nationalisation is not yet a socialist measure. Its character depends ultimately on how it is done and who does it, and in what balance of the struggling class forces the nationalised enterprises operate. If nationalisation is carried out under the working class's control, that provides conditions for weakening the monopolies' economic and political domination and_so opens the way to a radical turn in society's economic and political development.
Analysis of Communist Parties' programmes indicate that the concrete content of the slogan of democratic control over the economy as a whole and over democratic nationalisation in particular varies in the different countries. A common feature is the demand to curb the monopolies' power and lay the economic basis for a fundamentally new regime of political democracy. But the methods for realising this aim are not the same, owing to the specific national forms of state monopoly 207 capitalism, the character of the working-class movement's traditions, the consciousness of the main masses of the working class, the balance of forces in the country concerned, and other factors.
The Communist Parties of the USA and Canada, for example, give priority in their programmes for democratic control to the demand to curb the private monopolies' power and alter the way the public economic machinery operates, and not to the demand for an extension of the public sector. Similar points are a feature of the situation in Italy.
The main problem for Italy__ in contrast to other capitalist countries, is not a further extension of the public sector of the economy.
In Italy the process of concentration of capital is quite far advanced; and the public power has acquired gradually decisive position in this process. It is a matter of using these positions in a new = way.^^1^^
While considering the main issue to be democratisation of the management of the nationalised sector, the Italian Communist Party at the same time does not exclude the possibility of a need arising for new nationalisation measures. During the energy crisis, for example, the Italian Communist Party, the Communist Party of the USA, and the Communists of several other countries, put forward a demand for nationalisation of the oil companies and other power monopolies, considering this to be an important way of overcoming the difficulties in fuel and power supply.
The slogan of democratic nationalisation is aimed against both private monopolies and the whole system of state monopoly capitalism. Communists, as advocates of democratic nationalisation, have always stressed the integral unity between nationalisation and the authorities who carry it out. In combination with other democratic reforms and curbing of the monopolies' political power, nationalisation can serve as an important means of mobilising the working class and masses of the people against the monopolies. Democratic nationalisation can _-_-_
~^^1^^ XIII Congresso del Partito comnnista italiano (Editor! Riuniti, Roma, 1972), pp 41--42.
[208] also have no little significance as a means of defending the national economy against foreign capital.In several countries where militarisation is especially marked the progressive forces consider democratic nationalisation a measure for lighting it and limiting the power of the military-industrial complex.
Exposure of the monopoly character of public ownership in present-day conditions is an important point in programmes of democratic nationalisation. The left forces' spokesmen are showing how the monopolies that dominate the economies and policies of capitalist countries are using national enterprises for their own additional enrichment through redistribution of the surplus value created in the public sector; they are therefore demanding the establishing of democratic control over the public sector, and decisive involvement of the working class in the management of public enterprises.
The French Communist Party attaches great importance to the slogan of democratic nationalisation and has developed broad proposals for nationalising capitalist monopolies and democratising the public sector. Addressing the Berlin Conference of European Communist and Workers' Parties in June 1976, its General Secretary, Georges Marchais said:
We consider that the issue on the agenda of the class struggle in France is the need for far-reaching democratic reforms aimed at giving the nation itself control of its economic and social development through nationalisation of the big monopolies, and at ensuring the workers', involvement in the conduct and management of the country's affairs at all levels, including = government.^^1^^
Proposals for democratic nationalisation have been formulated in the programmes of Communist and Workers' Parties in many other countries (West Germany, Great Britain, Belgium, Denmark, Austria, Switzerland, Luxemburg, etc.). In developing it they are carefully analysing current experience of the class struggle. The task of the progressive forces is to develop the struggle for a democratic nationalisation that would make it _-_-_
~^^1^^ L'Humaitite, 1 August 1970.
__PRINTERS_P_209_COMMENT__ 14--0372 209 possible to limit the power of the monopoly bourgeoisie. This fight could be an important stimulus for broadening the activity and political education of the masses.By basing themselves on the firm ground of fundamental main principles and taking the concrete conditions of the struggle for democratic reforms in each country into account, Communist Parties envisage the gradual carrying out of all measures to establish democratic control over the economy. The sphere of nationalisation is limited to monopoly property, or even part of it; and in certain circumstances the possibility of some form of compensation or another being employed is not rejected.
__ALPHA_LVL3__ DEMOCRATIC ECONOMIC PLANNINGCommunist and Workers' Parties are counterposing their own constructive democratic programmes of economic development to the economic policy of the monopolies and bourgeois state that has led capitalist coimtries into serious difficulties. The resolutions of their congresses and plenary meetings of their Central Committees, and the speeches and statements of the leaders of the Communist and Workers' Parties of Austria, Belgium, Canada, Finland, France, Great Britain, Italy, Switzerland, the United States, West Germany, and many other countries, stress the great significance of planning the economy under the direction of the workers' political organisations and with the direct involvement of the workers themselves. Such planning would ensure development of the productive forces in the interests of the working class, peasantry and small farmers, and intermediate strata. The demand for democratic planning includes several basic proposals.
(1) Communist Parties do not pose the question of public control of the economy as such, but rather of the character and direction both of this control and of economic planning.
(2) It is a matter of exposing the class character of state monopoly programming. Communists point out that it is an inevitable consequence of the sharpening of all capitalist society's socio-economic contradictions, that
210 it cannot alter the inner laws of development of the capitalist mode of production, and that the monopolies are employing the planning machinery in their own class interests. The job, consequently, is to make planning servo the working people and to direct it against the monopolies.(3) In addition, Communists realise that a constructive programme of economic development is needed for successful struggle against the monopolies such as would meet the interests of all society's democratic forces.
The economic programmes proposed by Communists envisage a whole system of measures to limit the economic and political power of the big monopolies, especially the military-industrial ones.
Proposals for stimulating economic growth and raising the standard of living of the working people are an important aspect of these programmes. Communists start from the premise that limiting the monopolies' power would open up broad opportunities for applying the advances of scientific and technical progress, which would help increase production and improve productivity. That in turn would lead to economic development and a raising of the standard of living of the whole population.
In many cases Communist and Workers' Parties' programmes are detailed, technically and economically grounded plans, realisation of whicli would have positive significance not simply for the proletariat but also for the overwhelming majority of the population of capitalist countries, including the owners of small and middling businesses, whicli would be protected against the monopolies' tyranny. The working class, in the person of its political vanguard, is thus proposing a solution of the acute national problems that capitalism cannot cope with, as the crisis of the mid-70s has shown.
Democratic economic planning, by utilising the public sector, would make it possible to reconstruct the whole economy. In striving for this the working class is thereby demanding the right to direct society's economic life. Communists, leading the working class's fight to achieve these demands, realise that only active class struggle will enable the democratic forces to attain their goals.
211 __ALPHA_LVL3__ THE STRUGGLE FOR A DEMOCRATIC WAY OUT OF THEThe struggle for Communist Parties' counter-crisis programmes, which would make for radical social economic reforms, is an important ingredient in the international communist movement's strategy. The Communists' line on radical social and economic reforms as a condition for the transition to socialist revolution is evoking fierce criticism from both right and 'left' opportunists. At the 1969 International Meeting of Communist and Workers' Parties it was noted, in particular, that the danger of right-wing reformism in capitalist countries was largely linked with opportunists' gambling on the idea of the possibility of a peaceful road to socialism. Rodney Arismendi, the First Secretary of the Communist Party of Uruguay, drew attention to the fact that
many of the defeats and retreats in various sectors have... to some extent been the result ol idyllic assessments of world development and was perhaps the consequence of the fact that sight was lost of the dialectics of processes, the inevitable sternness of the class struggle on a national and an international scale, which sometimes leads to an obliteration of the qualitative borderline between bourgeois democracy and = socialism.^^1^^
Right-wing opportunists limit the economic struggle to a narrow, practical framework of reformist activity, depriving it of a socialist perspective. Underlying their stand is an absolutising of the democratic struggle and a converting of reforms into an end in themselves.
The publications of several Communist Parties in recent years have noted the need to fight the right-- opportunist distortions and reformist illusions that can arise in part of the working class, given relatively peaceful development of the revolutionary process. The report of the Italian Communist Party's Central Committee to its 13th Congress stressed the need
to overcome all the economic and corporative limits still existing, and all the tendencies to restrict the light for reforms to legislative measures... _-_-_
~^^1^^ International Meeting of Communist and Workers' I'arlief Moscow, 19fi9 (Peace and Socialism Publishers, Prague, 1960), p 202.
212
...to give priority to politics, to test the efficacy of the objects of the reform by the broadening of alliances and the development of democracy and political = consciousness.^^1^^
The proceedings of the Hamburg Congress of the German Communist Party said:
The German Communist Party differentiates itself from reformism. For the leaders of the Social Democratic Parly everything is solved by reforming capitalism. They rejected socialism as the goal a long time ago, even though the growing impact of world socialism and the work of our Party are forcing them of late to talk about a 'democratic socialism'. What is behind this curious socialism? It will not touch private capitalist property. It rejects workers' power... It is obviously nothing but the 'bourgeois socialism that Marx and Engels tore to pieces so well in the Communist Manifesto as a social veiling of = capitalism.^^2^^
`Left' opportunism is no less dangerous. All the various forms of leftist adventurism are marked by extreme subjectivism and ignoring of the real development of society. The spokesmen of 'left' trends oppose the need to fight for intermediate goals, and depict the struggle for democracy as a patching over of the capitalist system's shortcomings and not as an important element in the fight for socialism in today's circumstances.
In fact the fight for democracy in defence of the workers' interests and to carry out social and economic reforms is an integral part of the revolutionary struggle and of the attack on the financial oligarchy and state monopoly system. From the economic aspect, reforms of this kind, as the statements of Communist and Workers' Parties note, can" wrench an enormous part of the economic capability away from the monopolies, which would undermine the very foundations of the oligarchy's domination and make it possible to direct economic development in the interests of society.
From the] social, anti-monopoly angle, reforms would vastly help improve the standard of living of the working class, office workers, the intelligentsia, and peasants and _-_-_
~^^1^^ XIII Congresso del Parti to comnnisla ilaliano (Editori Hiiinili, Roma, 1972), pp 37--38.
~^^2^^ Protakoll d<:s llttmbnrgi'r 1'urtcilngs der Dciilsrhcti Kommunistischeii I'arlei, Hamburg 1977 (YVenzel-Vorlag, Diissehloii, 1973), p 57.
213 small farmers, emancipate society as a whole from the monopolies' tyranny, militarism, and fascism, and would foster a strengthening of international co-operation, friendship of nations, and peace throughout the world.Finally, from the political angle, anti-monopoly reforms would encourage growth of the progressive forces' influence, above all that of Communist and Workers' Parties.
That is why the fight to end the ruinous consequences of the economic crisis, to improve the workers' position, and to carry out radical social and economic reforms, is not a defensive operation, or a retreat from a socialist outlook, but a most important line of broad attack on the monopoly bourgeoisie, in the course of which working-class unity would be reinforced and the working class's alliance with other contingents of the working people consolidated, and the positions of the progressive forces strengthened.
[214] __NUMERIC_LVL2__ 10 __ALPHA_LVL2__ Peace, Detente, and Co-operation of All Countries __ALPHA_LVL3__ [introduction.]Issues of international economic relations occupy an important place in the economic programmes of Communist Parties aimed at improving the masses' position and finding a way out of the economic crisis.
In October 1864, in the Inaugural Address of the Working Men's International Association, Karl Marx spoke of the working class's
duty to master themselves the mysteries of international politics; to watch the diplomatic acts of their respective Governments; to counteract them, if necessary, by all means in their power; when unable to prevent, to combine in simultaneous denunciations, and to vindicate the simple laws of morals and justice, which ought to govern the relations of private individuals, as the rules paramount of the intercourse of = nations.^^1^^
The fight for such a foreign policy, he emphasised, forms part of the general struggle for the emancipation of the working class. His ideas retain their force today when all the socio-economic and political contradictions of capitalist society are getting deeper.
Modern capitalism is pursuing a policy in international relations in general, and in international economic relations in particular, such as contradicts the 'laws of morals and justice'. The monopolies' policy, as the facts indicate, is encountering greater and greater resistance from the working class and all democratic forces; and growth of the influence of world socialism is playing an immense role.
_-_-_~^^1^^ See: Karl Marx and Frederick Engels. Selected Works, Vol. 2 (Progress Publishers, Moscow, 1970), p 18.
215As a result, capitalism's international policy is suffering a deep crisis. Capitalist relations of production can no longer ensure normal international economic intercourse.
Communists see the way out of the difficulties of the 1970s in international relations in the ending of capital's domination and the establishing of equal co-operation and fraternal collaboration among nations emancipated from the monopolies' power. The countries of the socialist community provide an example of such international relations of a new type. Communists are also [tutting forward a democratic alternative to normalising the sphere of international relations, the kernel of which is lasting peace, consolidation of detente, curbing of the monopolies' power, and extension of international cooperation on a basis of equality and mutual benefit.
__ALPHA_LVL3__ THE FIGHT FOR PEACE AND DETENTEThe main condition for successful normalisation of international economic relations is the preservation of lasting, just peace. Communist and Workers' Parties consider the fight for peace and peaceful coexistence a form of anti-imperialist, anti-monopoly struggle. The Conference of Western European Communist pni ties held in 1974, for example, said:
Major changes have taken place in the world arena [in the first half of the 1970s]. They are the results of the achievements of the Soviet Union and other socialist countries and their foreign policy, of the activity of the international Communist and Workers' movement, of the struggles waged by the national liberation movement and the forces for democracy and peace.
These changes are manifestation of the new relationship of forces at the world level in favour of peace, democracy, national independence and socialism. Imperialism, and especially its loading force U. S. imperialism, has suffered heavy defeats and is no longer able to impose its rule of violence, oppression and conquest on the world [with] impunity.^^1^^
The objective historical basis for the turn in world politics was the radical change in the balance of power in _-_-_
~^^1^^ Comment. 1974, 12, 5:~71.
216 the world arena in favour of socialism. Growth of the economic and defence capability of the USSR and countries of the socialist community, and the strengthening of their influence on the course of events throughout the world, have become a powerful support for the relaxing of international tension. The transition from a policy of tension and confrontation to affirmation of a course toward detente is also a result of the intensification of the struggle of the masses of the people and of the broad political and social forces of capitalist and developing countries.The more than a hundred speeches of members and guests at the joint Jubilee meeting of the Central Committee of the CPSU and the Supreme Soviets of the USSR and RSFSR held in Moscow in November 1977 on the occasion of the 60th anniversary of the Great October Socialist Revolution, affirmed that the Soviet Union is a powerful bastion of peace. The leaders of socialist countries, Communist Parties, and new independent states and the envoys of the national liberation movement spoke of how the USSR's very existence and policy create obstacles, to the activity of the forces of militarism, exert a constructive influence on the whole system of international relations, and promote consolidation of peace and detente.
From the first, principled document of Soviet power — the Decree on Peace—to the new Constitution of the USSR, the whole 60 years' history of the Soviet Union indicates, L. I. Brezhnev said, that
Soviet power was established under the sign of Lenin's Decree on Peace, and ever since our country's entire foreign policy has been one of peace. Objective historical conditions Iiavcj dictated its concrete expression as the peaceful coexistence of slates with different social = systems.^^1^^
The CPSU and the Soviet Government consistently and unwaveringly pursue a line of banishing world war from the life of society, a line that has now been _-_-_
~^^1^^ L. I. Brezhnev. The Great October IteuoLutiun and Mankind's I'rugress (Novosti Pi-ess Agency Publishing House, Moscow. 1(177), p~26.
217 consolidaled in the Fundamental Law of the Soviet Union. The Constitution of the USSR solemnly affirms to all mankind that the Soviet Union is a state of friendship and peace among = nations.^^1^^The spokesmen of the peace forces of the whole world point out the immense significance of the settlement of important international issues, and the great role of the treaties and agreements concluded between the USSR, the countries of the socialist community, and capitalist countries that promote normalisation of the situation in Europe and throughout the world.
Herbert Mies, for example, said in his report to the Hamburg Congress of the German Communist Party in 1974 that the warming up of the political climate in Europe and the positive changes in international relations were above all due to the Soviet Union, the CPSU, and L. I. Brezhnev personally. They were the result of the agreed, purposeful policy of the socialist community and of the change in the balance of forces in favour of socialism and peace.
The Peace Programme adopted by the 24th Congress of the CPSU has played a special role in the fight for detente. It has been broadly supported by the peace forces and has become an important factor in reconstructing international relations on the principles of peaceful coexistence.
At the present time the CPSU and the Soviet Government are implementing the programme for furthering peace and international co-operation, freedom, and the independence of nations adopted by the 25th Congress of the CPSU, in which the central point for consolidating and furthering detente is to end the arms race and pass on in practice to disarmament.
The Soviet Union and the countries of the socialist community have taken their stand on a platform covering the whole gamut of the problems of disarmament (from readiness to implement general, complete disarmament to urgent, immediate, concrete measures to lessen the danger of military clashes).
_-_-_~^^1^^ See: Constitution (Fundamental Law) of the USSR, pp 31--33.
218In his report to the Jubilee meeting referred to above, L. I. Brezhnev proposed that the following radical steps should be taken: 'agreement on a simultaneous halt in the production of nuclear weapons by all states, and a beginning of the gradual reduction of stocks already existing.'^^1^^ At the same time he declared that the USSR was ready to lead agreement on a moratorium covering nuclear explosions for peaceful purposes together with a ban on all nuclear weapons tests for a definite = period.'^^2^^
Adoption of these proposals would be an immense advance toward settling the problem of preventing nuclear war, the problem of problems of our times.
Rodney Arismendi, First Secretary of the Communist Party of Uruguay, and a prominent figure in the international Communist movement, said, in evaluating the role of the Soviet Union in strengthening peace, that if we can say today that war is not inevitable and that we are succeeding in carrying out a policy of peace and detente, we owe all that to the sixty years of the October Revolution.^^3^^
The General Secretary of the National Council of the Communist Party of India, Chandra Rajeswara Rao, said on 2 November 1977:
In the last 60 turbulent years since the historic revolution, the I'aee of the whole world was changed. A world socialist system embracing over one-third of humanity has emerged. The world colonial system is in shambles. The world capitalist system is enmeshed in economic, political, and moral crisis Irom which it is unable to come out. People all over the world are realising that the only way out of the evils of capitalism is the establishment of socialism. World forces of socialism, democracy and peace are marching forward headed by the mighty Soviet Union and other socialist countries despite some setbacks here and = there.^^4^^
In the words of the Vice-Chairman of the Communist Party of Belgium, Claude Renard:
The Soviet Union exercises a mounting influence on international affairs. This influence is the strongest guarantee of peaceful coexistence... this influence is the best guarantee
_-_-_~^^1^^ See: L.~I. Brezhnev. Op. cit., p~29.
~^^2^^ Ibid., p~30.
~^^3^^ See: Pravda, 3, November 1977.
^^4^^ The 60th Anniversary of the Great October Socialist Revolution (Progress Publishers, Moscow, 1978), p~104.
219 of the favourable development of llio liberation movement of oppressed peoples... Lastly, the question of llie possibility of a peaceful transition to socialism and of new democratic gains would not have arisen in Western Europe bad it not been for le far-reaching changes that have taken place in the correlation of forces between imperialism and progressive mankind through the efforts of the Soviet Union and other socialist = countries.^^1^^
As L. I. Brezhnev said at the Jubilee meeting on 2 November 1977:
The changes for the better in the world, which have become especially appreciable in the 1970s, we refer to as international detente... The changes for the better are most conspicuous in Europe, where good-neighbourly relations, mutual understanding and the nations' mutual interest in, and respect for, one another are gaining in strength. We prize this achievement, aud consider it to bo our duty to safeguard and consolidate it in every way. We therefore attach great importance to co-operation with such countries as France, the Federal Republic of Germany, Britain and Italy —with all the European states, big and small, of a different social system.^^2^^
The changes that have taken place in the world were reflected at the Conference on Security and Co-operation in Europe held in Helsinki in 1975.
The Helsinki Conference confirmed the possibility and real benefit of considering and deciding complicated international issues with the participation of all interested countries on a basis of full equality. It opened up new perspectives for the further consolidation of peace and co-operation among all countries. At the same time, as the Berlin Conference of European Communist and Workers' Parties noted in June 1976, world peace was by no means yet guaranteed, detente had not yet been stabilised and serious obstacles still had to be surmounted on the road leading to lasting security and = co-operation.^^3^^
The policy of detente is a fundamental political line of Communists not affected by the changing state of the world. The principles of peaceful coexistence of states with different social systems leads to one being affirmed in tense struggle with the opponents of detente. Communists are rebuffing the spokesmen of the most reactionary imperialist circles of the USA and other capitalist countries who talk 'from strength' and put their own interests above those of the people.The nations of the world (L. 1. Brezhnev said on 14 February 1075) expect international detente to be quickly materialised in concrete deeds helping to improve the lives of millions _-_-_
~^^1^^ The 60th Anniversary of \he Clreal October Socialist lievoluiion, pp 200--201.
~^^2^^ L. I. Brezhnev. Up. cit., p 27.
~^^3^^ See: For Peace-, Security, Cooperation and Social Progress in Europe, p~36.
220 of people. These acts include curbing of the arms race, reduction of the scale of countries' military preparations and spending, and extension of peaceful economic co-- operalion, etc.. among them. One would think dial now, given the grave economic difficulties being experienced by many Western countries, an advance in these matters bad become an ever more urgent task in the eyes of the = public.^^1^^
Communists consider a deepening of detente to be a means of mitigating the social consequences of the economic crisis and improving the position of the masses of the working people.
Enrico Berlinguer said at the 14th Congress of the Italian Communist Party:
It is clear that the system of co-operation on such a wide scale would give a vigorous impulse tojan advance and development of backward regions and at the same time crcats new foundations and opportunities for a further economic and scientific development of industrial countries.
Every country, large or small, must actively contribute towards creating a broad system of international co-operation. This will give advantage to = all.^^2^^
American Communists have often pointed out the close connection between the fight for detente and the immediate interests of the workers. The Central Committee's report to the 21st Convention of the CPUSA in July 1975 noted that reaction was trying to use economic difficulties both to attack the basis social and economic rights of the workers and to smash the policy of international detente and peaceful coexistence. The Convention denounced the opponents of detente (the military-- _-_-_
~^^1^^ Prarda, 15 February 1975.
~^^2^^ XIV Congresso del Partito comunisla ilaliano (Editori Riuniti, Roma, 1075) p~27.
221 industrial complex, reactionary trade union leaders, and Zionist circles) for trying to block it on various pre- texts.^^1^^The integral link between the guaranteeing of peace and broadening of detente and the cause of social progress was stressed by the Berlin Conference of European Communist and Workers' Parties in June 1976. Both the speeches of the participants and the final resolution clearly recorded that the policy of peaceful coexistence, active co-operation between states with different social systems, and detente were providing optimum conditions for the fight of the working class and all democratic forces to ensure every nation's inalienable right to free choice of its path of development and to follow that road in order to fight for socialism and oppose monopoly domination.
The conference resolution stressed that there is a close connection between the fight for peace, detente, security and implementation of the principles of peaceful coexistence, and strengthening of mutual confidence among peoples and countries, on the one hand, and the struggle for new economic and political gains by the working people and social progress, on the other hand. Those taking part in the conference assumed that these aims could be the more quickly attained the more effective were the efforts being undertaken to block all trends of a reactionary and authoritarian character, to end the arms race and disarm, and to limit and overcome the power of the monopolies both in the affairs of individual countries and internationally. They consider the fight for detente to be an important contribution to the creation of international conditions favouring social = progress.^^2^^
An important step toward consolidating peace and the security of nations is to develop the mutually beneficial co-operation of all countries and peoples on a basis of respect for the right of the people of each country to decide its political, economic, social, and legal system independently, without outside interference, and to preserve and augment its historical and cultural values.
_-_-_~^^1^^ See: Daily World, 20 June 1975.
~^^2^^ See: For Peace, Security, Co(ii>eratit>n and Social I'rogrmt in Europe, p 39).
222 __ALPHA_LVL3__ FOR DEMOCRATISATION OF INTERNATIONAL RELATIONSDemocratisation of international relations is the democratic alternative to state monopoly control of them. The progressive forces of the world are appealing to the working class, peasants and small farmers, intelligentsia, and all the working people and nations of the world to support deepening of the democratic content of international co-operation and real, active involvement of the workers' mass organisations and all today's democratic forces in them.
The development of co-operation in the fields of the economy, culture, the pure and applied sciences, education, and information has a major place in the programme of democratic international relations and so contacts between people aimed at better mutual understanding, strengthening of confidence, further rapprochement of countries and nations, spiritual enrichment of men's lives, with full respect for the equality of every nation and every individual and observance of sovereignty and the principle of non-interference in the internal affairs of every country.
The concept of a 'new international economic order' was put forward by the liberated countries after World War II as a weapon for fighting their fleecing by the monopolies of developed capitalist countries. As the statement of the Soviet Government of 4 October 1976 said, the Soviet Union has an understanding attitude toward the programme put forward by developing countries for the establishment of a 'new international economic order', and supports its fundamental, anti-imperialist = line.^^1^^
From its very inception the Soviet state has stood for the creation of new international relations. The young Land of Soviets got down immediately, in its very first measures in foreign affairs, to implementing the principles of full equality, sovereignty, altruistic assistance, and performance of international duty in relation to the workers and oppressed peoples of the whole world.
In implementing the principles of new international economic relations in its practical contacts with other _-_-_
~^^1^^ Pravda, 5~October 1976.
223 countries, the Soviet Union fought for their conversion into standards of international relations. In 11)22, in a programme for the work of (he Soviet delegation at the Genoa Conference, set out in a letter to Lenin from (J. V. Chicherin, if was said:The novelty of our international scheme must be that the i\egro and other colonial peoples /nirticipate on an equal looting with the European peoples in conferences and commissions and have the right to prevent interference in their internal = affairs.^^1^^
The programme contained proposals for the radical revision of the Versailles secret treaty, the annulment of all dehts, and measures to combat inflation and depreciation of money, and measures to cope with the fuef crisis on the basis of unified, planned electrification and to reorganise and improve international = transport.^^2^^ Summarising Lenin's ideas Chicherin said:
All these points, taken together, provide a picture of what is theoretically possible under the bourgeois system, but which in historically conditioned reality will come up against national egoism and the predatory acts of the capitalist = oligarchy.^^3^^
For a long time the Soviet proposals could not be implemented, in spite of their attractiveness for the oppressed countries and workers of the world, but the situation changed as socialism and the national liberation movement developed and the struggle of the workers and democratic forces in the citadels of capitalism grew.
The rise of a world system of socialism has meant the inception of new relations characterised by an alliance, friendship, and co-operation of sovereign, equal states, united by common aims and interests and tics of comradely solidarity and mutual assistance. The countries of the socialist community are marching forward together, _-_-_
~^^1^^ V. I. Lenin. Marginal Notes on a letter from G. V. Chicherin of March 10, 1022. Collected Works, Vol. 45, p 509 (Lenin's emphasis).
~^^2^^ See: V. I. Lenin. Draft Directives of the C.C., R.C.P.(B.) for the Soviet Delegation to the Genoa Conference. Collected Works, Vol. 42, p 397.
~^^3^^ V. I. Lenin. Marginal Notes on a letter From G. V. Chicherin March 10, 1922. Collected Works, Vol. 45, p 512.
224 helping eacli other, pooling their efforts, knowledge, and resources for rapid progress, and demonstrating the attractive power of the new international relations.The victory of the October Revolution and progress in building socialism have stirred the consciousness of colonial peoples, helped them gain enormous successes in the light for emancipation from imperialist oppression. After World War 11 and the defeat of fascism more than 2000 million people threw off the colonisers' yoke and won national independence. Many of the liberated countries are setting their own goals of building a society free of exploitation and oriented on socialism.
All that is providing new conditions for the development of international relations and lessening the imperialist powers' chances of military intervention and direct economic pillage.
More and more countries, and ever broader social strata in both capitalist and developing countries, are becoming involved in the fight to restructure international economic relations. The Soviet Union and members of the socialist community and the countries of a socialist orientation have a decisive role in this struggle. The decisions of the 25th Congress of the CPSU were an important stage on the road. One of the chief tasks posed in the programme for furthering peace and international co-- operation put forward by L. I. Brezhnev in the Central Committee's report was:
Work for eliminating discrimination and all artificial barriers in international trade, and all manifestations of inequality, diktat and exploitation in international economic relations.^^1^^
The 6th Special Session of the United Nations General Assembly in 1974, in a situation of exacerbation of capitalism's social and economic difficulties and contradictions, and under the pressure of broad circles of international democratic opinion, adopted a declaration on the establishment of a new international economic order, which said in part:
We, the Members of the United Nations, ...solemnly proclaim our united determination to work urgently for THE _-_-_
~^^1^^ Documents and Jiesolutians. XXVth Congress of the CPSU, p~32.
__PRINTERS_P_225_COMMENT__ 15--0372 225 ESTABLISHMENT OF A NEW INTERNATIONAL ECONOMIC ORDER based on equity, sovereign equality, interdependence, common interest and co-operation among all States, irrespective of their economic and social systems which shall correct inequalities and redress existing injustices, make it possible to eliminate the widening gap between the developed and the developing countries and ensure steadily accelerating economic and social development and peace and justice 1'or present and future = generations...^^1^^
This solemn pledge was reinforced by a statement of the principles that should constitute the basis of the new international economic order, among which the following deserve notice: the sovereign equality of states and selfdetermination of all nations; the inadmissibility of seizures of territory; territorial integrity and non-- interference in the internal affairs of other countries; the right of every nation to adopt the socio-economic system that seems to it most suitable for its development; the full, permanent sovereignty of every nation over its natural resources and all economic dealings, including nationalisation; the right of all states, territories, and nations finding themselves under the heel of foreign occupation, colonial domination, or apartheid, to restitution and full compensation for all harm done to their natural and other resources; control over the operations of international companies through the adoption of measures in the interests of the national economy on the basis of the full sovereignty of every country; the granting of assistance without political or military conditions of any kind.
Several principles were devoted to the special problems of foreign trade, including a just ratio between the prices of raw materials and those of finished manufactured go.ods; preferential treatment for developing countries in all fields of international economic co-operation; restructuring of the international monetary system in such a way as to promote the development of developing countries and a flow of money to them; guaranteed access for developing countries to the advances of modern science and technology.
_-_-_~^^1^^ U.N. General Assembly. Sixth special session. Agenda item 7. 9 May 1974, A/Rcs/320/(S--VI).
226Certain other documents have since been adopted by the United Nations and other international organisations, that once more confirm the need to reconstruct international economic relations and proclaim the principles of international social justice and the inadmissibility of attempts at hegemony or the creation of spheres of influence.
But as the facts demonstrate, the interests of the capitalist world's imperialist rulers are preventing real implementation of the good intentions of the new international economic order. It is a matter above all of the international monopolies, which now function as the most powerful bastion of neocolonialism, exploitation, and political reaction.
That is why Communists have paid so much attention in recent years to analysing the operations of international monopolies, and have come forward as active members of the world fight against international finance capital.
The conference of Communist Parties of European capitalist countries held in London in 1971 was devoted to discussion of these matters. The political declaration of the Brussels Conference of Western European Communist Parties in 1974 contained an analysis of various aspects of the international monopolies' activity; so, too, did the resolutions of the Berlin Conference of European Communist Parties in 1976, and also the resolutions and proceedings of Communist Parties' congresses and central committee meetings.
These documents note that domination by international monopolies, in which, in the main, U.S. capital predominates, has become a typical feature of the capitalist economy. Their operations directly or indirectly affect the interests of the working class of capitalist countries and of all the peoples of developing countries, which is necessitating co-operation of the working people of various countries in the fight against them.
The progressive forces are counterposing a united, anti-monopoly front, and the international solidarity of the working class, to the united front of the monopolies.
The fight against international monopolies is __PRINTERS_P_225_COMMENT__ 15* 227 becoming an important link in the anti-monopoly movement. The working class has become the vanguard of this struggle, and other strata of (lie public in capitalist countries are rallying to it. As L. 1. Brezhnev noted in 1969:
The unnatural character of llie situation in which production complexes, some of which serve more than one country, remain the private property of millionaires and billionaires is becoming increasingly evident to the = peoples.^^1^^
The struggle against the international monopolies originally took the form of isolated strikes in separate plants located in different countries; the multinationals, however, struck back at the working-class movement by switching orders from one country to another and cutting back production in those countries where the strikes were occurring.
The workers looked for effective ways and means of fighting the international monopolies. By the middle of the 1960s, co-ordinating committees had been set up, for example, in the enterprises of many motor car iirms, which included representatives of employees of plants of one and the same concern in various countries.
The need to strengthen direct international links by setting up such liaison committees was gradually realised by wider and wider groups of workers. By 1969--1970 liaison committees had been formed in the glass and chemical industries, and other sectors. Difficulties often arose in this because one multinational company sometimes owns enterprises in different sectors of the economy, and also because of the isolation of trade unions of different tendencies (World Federation of Trade Unions, International Confederation of Free Trade Unions, the World Confederation of Labour). But in spite of the difficulties liaison committees had been set up in the plants of the majority of multinational companies by the middle of the = 1970s.^^2^^
_-_-_~^^1^^ L.~I. Brezhnev. Following Lenin's Course (Progress Publishers, Moscow, 1972), p~159.
~^^2^^ Kommunisticheskiye partii v avangarde bor'by trudyashchikhsi/a protiv mnogonatsionalnykh monopolyi (Communist Parties in the Vanguard of the Struggle against Multinational Monopolies) Moscow, 1977, p 30.
228The working out of common programmes, slogans, and demands that could serve as a platform for the fight against international capital has had an important place in the work of liaison committees and conferences since their inception. Analysis of the programmes adopted shows that they primarily contain demands for trade union recognition and the signing of international collective agreements by representatives of the workers and of the management of the international monopoly concerned. As a rule, they contain demands for the abolition of differences in pay and conditions, and the establishment everywhere of the best conditions prevailing in the multinational's enterprises.
Demands are also being put forward for guaranteed jobs, improvement of social security, lowering of the pension age, longer holidays, reduction of the working week without loss of pay, raising of wages, standardisation of trade training in all the international monopoly's plants, etc.
The liaison committees and conferences have initiated the drafting of industry programmes. In 1972, for example, the second conference of delegates of workers employed in international monopolies' plants in the electrical engineering and electronics industries, in which 65 representatives of 21 countries took part, adopted a joint action programme that put the stress on the provision of work, defence of union rights, a substantial improvement in working conditions, and the ending of discrimination against women, adolescents, and migrant workers. Specific measures to realise these demands were = suggested.^^1^^
Strikes of a new kind have been carried out on the initiative of liaison committees, namely international strikes of the workers in an international monopoly's plants.^^2^^
The increasingly massive actions of the workers of Western European countries and other capitalist lands at the height of the economic crisis of the 1970s became _-_-_
~^^1^^ IMF News, 1973, 1: 1-2; idem. Annoxo 2-3; cited from E. P. Pletncv. pp 123--12/1.
~^^2^^ E. P. Pletnev. Op. cit., p 121. Knsmopolitism hapilala i interno tsionalizni proletariate (Cosmopolitism of Capital and Internationalism of the Proletariat), Moscow, 1974.
229 an important indicator of the heightened effectiveness of their solidarity in their fight against the international monopolies.Unity of the ranks of the international working class and of the peoples of developing countries is being forged in the fight against the monopolies' plans. 'The fact is,' Pierre Gensous, General Secretary of the World Federation of Trade Unions, wrote in 1974, 'that working-class resistance has foiled, at least partially, a broadly conceived capitalist = manoeuvre.'^^1^^
Communist Parties have come out most resolutely and consistently against the international monopolies. At the London conference of representatives of 16 Western European Communist Parties in 1971 the main lines of joint actions against international monopoly firms were planned (viz., strengthening of the specific solidarity of the workers; resistance to breaches of laws on workers' social rights and democratic freedoms; the fight to nationalise international companies). The conference posed the question of establishing contacts between the Communist Party branches in all enterprises of international monopolies and the need for joint sharing of experience of the struggle and for unity of action. The fight against international monopolies was considered important support for the movement of the peoples of liberated countries for equal international economic relations. Radical socioeconomic reforms of capitalist society and the victory of socialism were put forward as the alternative to domination by international finance = capital.^^2^^
The 1976 Berlin Conference of European Communist and Workers' Parties was enormously important for further development of the fight against the international monopolies. It unanimously and decisively called on Communists:
to intensify, and extend solidarity and support to, the struggle against the policies of multinational monopolies, which have a negative effect on the working and living _-_-_
~^^1^^ Pierre Gensous. Charier of Trade Union flights and Social and Economic Demands of the Working People of Capitalist Countries at the Present Stage. Cited from World Afarrist Review (Canadian edition), 1974, 17, 7: 23.
~^^2^^ Comment, 1971, 9, 5: 9, 10, 17, 23,
230 conditions of the working people and flagrantly violate the national interests of peoples and the sovereignty = of states.^^1^^
The whole capitalist world has become the workers' battlefield against the international monopolies.
Communist Parties are paying enormous attention to the problems of developing countries because, until they are resolved, no real normalisation of international relations can be achieved.
Communist Parties have always defended the interests of the peoples of Asia, Africa, and Latin America exploited now and in the past by imperialism. Their many resolutions and statements note that there are no crimes to which imperialists have not stooped in order to maintain or restore their domination of the peoples of former colonies and other countries breaking away from the toils of capitalist exploitation.
A fight for the social emancipation of developing countries is being waged against the exploiter activity of imperialist monopolies and for a restructuring of the whole system of international economic relations.
The spokesmen of the progressive forces of developing countries, while striving to achieve economic independence, emphasise at the same time that this by no means implies economic autarchy. On the contrary, it is a matter of establishing an equal, mutually beneficial, and just international division of labour that would ensure harmonious economic development of former colonies and semi-colonies and progressive reconstruction of their economies, and disinterested assistance in this from countries that have the possibility to render it. This is the system of international economic relations for which the Soviet Union stands; it is steadily developing economic co-operation with the new countries on the principles of full equality, mutual benefit, and non-- intervention in internal affairs. As L. I. Brezhnev declared at the 25th Congress of the CPSU, the USSR intends to follow this course in the future as well.
_-_-_~^^1^^ For Peace, Security, Cooperation and Social Progress in Europe, p~54
231The turn toward detente, the improvement in the world political climate, and the consistent struggle of Communist and Workers' Parties and all democratic forces have made it possible for there to be broad international discussion of the economic problems of developing countries and for the Sixth and Seventh Special Sessions of the U.N. General Assembly and a number of other representative international forums to be convened. The course of the discussions at them, and the resolutions passed, bear witness to a definite strengthening of the unity of the national liberation movement on the basis of a general democratic programme of foreign trade demands of a progressive, anti-imperialist character.
Alternative forms of economic relations to private monopolistic business practices are being more and more actively introduced these days into world trade, alternatives inherent in socialism and based on equality, mutual benefit, and respect for the national sovereignty of the parties. Under the impact of the shifts taking place, the international monopolies have been forced to take the development plans of new countries into consideration and to set up mixed companies with the participation of national capital and even of the public sector.
These concessions are mainly made to the national bourgeoisie, of course. The international monopolies, for example, export the capitalist mode of production and organisation to developing countries, hoping thereby to cultivate a mass stratum of local bourgeois as a guarantee of keeping these countries within capitalism's orbit.
It is thus becoming more urgent today for new countries to work out a clear national policy in regard to imperialism and international monopolies. Interest in socialist countries' experience in dealing with international monopolies is rising in developing countries. Socialist property and a state monopoly of foreign trade reliably guarantee the national interest of socialist countries and exclude the possibility of the monopolies' having a negative effect on either the economy or the social gains of socialism.
As an example of the unity of interests of the working people of capitalist and developing countries wo can take the need for a joint solution of the energy and raw 232 materials crisis. From its very inception Communists have been exposing the Western propaganda campaign aimed at throwing the blame for the difficulties being created in capitalist countries onto the oil-producing countries, and so to split today's progressive forces and isolate the national liberation movement from the international working class. Communists have stressed that the energy crisis is not at all the cause but the consequence of capitalism's economic crisis, and a component of it, and that the real causes are to be found in the very foundations of the capitalist economy and in the hegemony of monopoly. At the same time spokesmen of the West's progressive forces are supporting the calls of socialist and developing countries for a peaceful dialogue to be started between the producers of raw materials, the industrially developed countries, and all other parties to international exchange, in order to establish genuine international co-operation on a just basis. Such co-operation, the Berlin Conference of European Communist Parties said,
In the Communists' view this will require the ending of colonialism and neocolonialism, the building of a new international economic order, the provision of conditions for the economic and social development of all countries and above all of the economically least developed ones, the organisation of broad international co-operation to back up the efforts of the peoples of developing countries aimed at closing the gap between them and developed countries, access of all countries to the advances of modern science and engineering, the establishment of a just ratio between the prices of raw materials and farm produce on the one hand and those of industrial goods on the other, and the development of trade relations without artificial barriers or discrimination of any kind. _-_-_would also contribute to solving such complicated and fundamental problems as hunger in the world, illiteracy, environmental protection, pollution of the atmosphere and the seas, and those involved in developing and utilizing new sources of energy, averting natural calamities, and preventing and curing the most harmful = diseases.^^1^^
~^^1^^ For Peace, Security, Cooperation and Social Progress in Europe, p~57.
233The socialist countries, the movement of non-aligned countries, the revolutionary and progressive forces in the developing countries and the working-class and democratic movements are fighting for the establishment of new international political and economic relations on the basis of justice arid equality. Ever wider political and economic circles in the capitalist countries are also contributing to the realisation of this demand of our time. Such relations serve the cause of peace, detente and social progress throughout the world and meet fully the interests of the working class and the mass of the people in = Europe.^^1^^
An improvement in relations between capitalist and socialist countries can play an enormous role in providing this co-operation.
__ALPHA_LVL3__ CO-OPERATION WITH SOCIALIST COUNTRIES---A DICTATE OF THE TIMESThe Communists of capitalist countries have always stood for the development of mutually beneficial economic, political and cultural co-operation with the USSR and other socialist countries. The correctness of the stand, and its harmony not only with the international interests of the working people of all countries but also with their national interests became particularly clear during the economic crisis of the mid-70s.
In fighting for unity of the working people and for curbing the power of the capitalist monopolies Communists demonstrate above all the great political importance of extending co-operation between capitalist and socialist countries, since this fosters a relaxation of international tension. Co-operation with socialist countries is also a factor of no little importance improving the business situation in the capitalist countries.
In the words of L. I. Brezhnev,
_-_-_the fabric of peaceful cooperation in Europe, the fabric that would strengthen relations among European peoples and states and ... [preserve] peace for many years to come... [is] the different forms of mutually advantageous cooperation—trade, production cooperatives and scientific and technological = relations.^^2^^
~^^1^^ For Peace, Security, Cooperation and Social Progress in Europe, p 58.
~^^2^^ Ibid., p 12.
234The USSR's foreign trade rose from 500 million roubles to 56.8 billion roubles between 1938 and = 1976.^^1^^ It maintains trade relations today with 115 countries (13 socialist, 76 developing, and 26 developed capitalist coun- tries).^^2^^ Its trade and commercial relations with capitalist countries have acquired several qualitatively new features in recent years. The practice of concluding longterm agreements on commercial, industrial, scientific and technical co-operation is becoming more and more common. Long-term contracts between Soviet trade organisations and firms in capitalist countries for five, ten, or more years have become normal practice. Commercial relations are thus, as it were, cementing the foundations of peaceful coexistence.
New forms of co-operation are being developed such as the carrying out of projects on a compensation basis, under which payment for equipment delivered from abroad on long-term credits for projects being built in the USSR is provided from the proceeds of selling part of the output produced by the completed plant. Several capitalist countries interested in increasing their exports of equipment, increasing employment, and obtaining various goods and materials from the USSR on a long-term basis, are expanding credits for it. In 1974-5 alone the USSR was granted bank credits totalling over $10 bil- lion.^^3^^ Soviet trade organisations have placed orders in Austria, France, Great Britain, Italy, Japan, the Federal Republic of Germany, and other countries, which has helped improve the business situation in them and increase employment.
Scientific and technical co-operation is also gathering pace. The USSR now has inter-governmental agreements on this with more than 14 industrially developed capitalist = countries.^^4^^
_-_-_~^^1^^ Vneshmjaija torgovlya SSSR v 1976 g. (The USSR's Foreign Trade in 1976. A Statistical Handbook), Statistika Publishers, Moscow, 1977, p 6.
~^^2^^ Vneshneekonomicheskiye svyazi Sovetskogo Soyuza no. novom etape (The Soviet Union's Foreign Trade Relations in the New Stage), International Relations Publishers, Moscow, 1977, p 17.
~^^3^^ Ibid., p 22.
~^^4^^ Ibid., pp 22--23.
235Not all the problems in the field of the international economic relations of socialist and capitalist countries have yet been resolved, in particular certain artificial barriers to trade have not yet been removed, most of them stemming from the cold war years, but some erected today as a result of the activities of conservative forces that do not consider the interests of their own people or the canse of peace and international co-operation.
Relations between the United States and the Soviet Union have a particularly important place in the set of relations between capitalist and socialist countries. American Communists and all the progressive forces of the USA have made a big contribution to the strengthening of Soviet-American relations. The 70s became a time when there was a turn in relations between the USA and the USSR from cold war to detente, from confrontation to mutually beneficial co-operation on the principles of peaceful coexistence of states with different social systems. The spokesmen of U.S. progressive forces say that these changes correspond to the national interests of the American people and help, in particular, to improve the country's economic situation. They are fighting persistently against the reactionary circles that are trying to undo detente.
U.S. progressive forces condemn Congress's placing of discriminatory limitations on trade with the Soviet Union and other socialist countries. If Congress would rescind these measures, many Americans say, it would bring great commercial benefit to the United States itself.
As the 25th Congress of the CPSU noted, there had been a big shift in Soviet-West German relations on the basis of the 1970 = treaty.^^1^^ The Federal Republic of Germany is now one of the USSR's major partners in reciprocally beneficial co-operation with the West. Their trade was more than three billion roubles in 197fi, which was 5.3 per cent of the Soviet Union's total foreign trade. West Germany now occupies first place among the capitalist countries doing business with the Soviet = Union.^^2^^ _-_-_
~^^1^^ See: Documents and Resolutions. XXVth Congress of the CPSU, p 21.
~^^2^^ See: The USSR's Foreign Trade in 1976, pp 8, 15--16.
236 A considerable number of large-scale projects for industrial, scientific, and technical co-operation have fallen to it, the biggesl being an agreement on the building of an electric steelworks based on the Kursk iron-ore field with an annual rated capacity of live million tonnes of metallised pellets by direct reduction of iron, and around 2 700 000 tonnes ol high-quality sheet and high-grade rolled = metal.^^1^^West German Communists are making a big contribution to consolidating these relations. Chairman of the German Communist Party, Herbert Mies, said in his report to its Bonn Congress:
It was said at the Congress that it was necessary, in order to defend the vital interests of the working people successfully against the grave consequences of the economic crisis, to develop the struggle for lasting peace and for good-neighbourly relations and reciprocally profitable co-operation with socialist countries.The- political compass, by which the German Communist Party has always oriented itself, points neither today nor tomorrow to the distance from real socialism but has always remained pointing to a firm alliance with the socialist world and above all with the Soviet Union and the German Democratic Republic. Our Party remains true to Thaelman s slogan 'The touch stone for any Communist is his attachment to the Soviet Union' and considers it its greatest class duty continually to spread the truth in our country about real socialism and resolutely to oppose all attacks on the Soviet Union and other socialist countries—whatever form they take. That complies with our historical experience and our national = interests.^^2^^
Co-operation of the Soviet Union and other socialist countries has been developing well with France in recent years, which is supported by the French people and the majority of French political parties. 'We highly value our relations with France and are prepared to extend the areas of accord and co-operation,' L. I. Brezhnev said at the 25th Congress of the = CPSU.^^3^^
_-_-_~^^1^^ See: The Soviet Unions Foreign Trade Relations in the New Stage, p 114.
~^^2^^ Protokoll des Banner Parteitages der Deutschen Kommunistischen Partei (DKP Parteivorstand, Bonn, 1976), p 26.
~^^3^^ See: Documents and Resolutions. XXVth Congress of the CPS U, p 21.
237The French Communist Tarty lias always stood for the strengthening of Franco-Soviet co-operation and extension of relations and ever firmer friendship between the two peoples and countries. This struggle is in no way subordinated to 'foreign interests' as opponents of Franco-Soviet co-operation assert; friendship between France and the USSH, and the development of all-round co-- operation between them, corresponds to the highest interests of the French nation.
In fighting to consolidate Franco-Soviet friendship Communists are at once internationalists and patriots. There is no other issue, probably, that so clearly mirrors the integral, profound unity of internationalism and patriotism.
At the 22nd Congress of the French Communist Parly, in February 1976, its General Secretary Georges Marchais stressed the significance of the progress of the socialist countries and pointed out the historical achievements of the Soviet Union:We have been on the side of the October Socialist Revolution from the very beginning (Maurice Thorez said at the 12th Congress of the French Communist Party in 1950). We defended it when it was weak, when it was faced with internal conspiracies and foreign intervention, and when [our sailors] in the Black Sea saved the honour of France, when famine raged there because of the criminal blockade and prolonged drought. That was thirty years and more ago...
How could we be loss affirmative, less warm in the expression of our feelings of affection and solidarity for our Soviet brethren after thirty years of common trials, when the Soviet Union, over stronger, is showing all peoples the road to socialism, the road to happiness and = peace?^^1^^
_-_-_Don't let reaction count on seeing us break this solidarity [with the countries of socialism]! On the contrary we shall take care to develop it and to fight with determination against anti-Sovietism, whoever its instigators and carriers are, and against the lies and slanders that are constantly directed at the socialist = countries.^^2^^
~^^1^^ Maurice Thorez. Ouevres choisies, Vol. 7 (Editions socialcs, Paris, 1966), p 513.
~^^2^^ George Marchais. Le socialisme pour la France. Cahiers du Communisme, 1976, Feb.-March, p~63.
238In the opinion of spokesmen of the West's progressive press economic co-operation with the Soviet Union and other socialist countries becomes particularly important in years of economic crisis, a steep increase in underutilisation of industrial capacity, and growth of unemployment.
The Communists of ftaly are consistent adherents of an extension of co-operation with socialist countries.
While supporting a policy of co-operation with socialist countries, Communist Parties at the same time refute the inventions of bourgeois propaganda and of right and 'left' opportunism about the meaning of this co-operation and its impact on the class struggle in capitalist countries. They stress that economic co-operation of socialist and capitalist countries fully corresponds to the class interests and of the international working class and to the principles of internationalist, fraternal solidarity of the working class and working people of all lands.
__ALPHA_LVL3__ THE EXPOSURE OF LIES AND INVENTIONSOne of the commonest techniques for falsifying the meaning of co-operation between capitalist and socialist countries is for bourgeois writers to allege that it does not do the Western economy any good or the masses of the working people in capitalist countries.
Capitalist countries' links with socialist ones in fact have marked a positive effect on the economic situation in Western countries and help reduce unemployment and raise the income of part of the working class, which is especially important in a situation of economic crisis.
Finland is a typical example. The Finnish press and politicians of various trends have often stressed that the country's economy would have suffered greater difficulties if Finland had not had broad business ties with the Soviet Union and other socialist countries. The volume of Soviet-Finnish trade has attained a very impressive scale. Finland comes second after West Germany, in the Soviet Union's trade with European capitalist countries. The Soviet Union, in turn, as the Finnish press has noted, occupies first place in Finland's foreign trade, the gross 239 volume of which was two billion roubles in 1976.^^1^^ The USSR supplies the bulk of Finland's imports of crude oil, petroleum products, solid fuel, cotton, light raw materials, and fertilisers. The southern areas of Finland receive Soviet natural gas.
The Soviet Union's trade wilh Finland has a deimite value for its economy as well. It places orders there for various types of ship (diesel-electric passenger vessels, icebreakers, tankers, timber carriers, etc.). Soviet orders have a favourable effect on employment in Finland and guarantee enterprises a stable rhythm of operation.
The chairman of the Finnish side of the Standing Soviet-Finnish Intergovernmental Commission on Economic Co-operation, Dr. Aahti Karialeinen, evaluating SovietFinnish trade in 1976, remarked first of all on its stable character. Business relations, he said, had now been based on 'five-year trade plans' for more than 25 years, and were now entering on the sixth five-year agreement. The plans determined in advance the road by which trade would be developed on the basis of yearly agreements. The new five-year agreement envisaged a doubling of trade.
Another positive aspect of Soviet-Finnish business relations, apart from their stability, is the variety of the forms of co-operation. In addition to traditional exchanges of goods, there has been ever widening scientific, technical, industrial, and cultural co-operation in the postwar period, and the joint building of industrial projects in both the Soviet Union and Finland. The Soviet Union, for example, took part in building the Rautaruukki Co.'s steelworks in Raha, a gas pipeline, and the atomic power station in Loviisa.
The Soviet-Finnish agreement signed in Moscow on 18 May 1977 is particularly important, as it contains a long-term programme for the development and deepening of commercial and economic, industrial, and scientific and technical] co-operation until 1990. This is the first time that countries with different social and economic system have defined the directions of their co-operation for so long a period and over such a broad range; it will _-_-_
~^^1^^ See: The USSR's Foreign Trade in J97C, p 11.
240 undoubtedly help improve the economic situation in Finland.This (lorunicjil (J/. 1. Urezhuov said at the signing ceremony) can quite justly be taken as an asset in the wider European policy and included among the notable steps to implement the Final Act of the Helsinki European = Conference.^^1^^
Such long-term agreements (President Kckkoncn of Finland said) are evidence that both sides consider co-operation a natural, and even more, an important part of their longterm development = plans.^^2^^
Another example of the reciprocal character of economic relations is Soviet-Japanese economic co-operation. A marked increase in trade has been typical of recent years (it came to more than 2.1 billion roubles in 1976, and Japan rose to third place in the USSR's trade with capitalist = countries^^3^^ and also an extension of industrial, and scientific and technical co-operation. The first general agreement on credit deliveries of equipment, machinery, materials, and oilier commodities for the development of limber resources in the Soviel Far East, and on deliveries of limber from the USSR to Japan, has been successfully completed. A second agreement has now been concluded, under which Ihe volume of reciprocal deliveries is expected to triple.
Soviet-Japanese co-operation to develop the reserves of Ihe South Yakulia coal basin is also very important. An interesting and promising field of collaboration is joint geological exploration for oil and natural gas on the continental shelf. As a result of the work already done, the two countries have signed an agreement that is a programme for carrying out comprehensive, large-scale work on certain areas of the shelf off Sakhalin on a longterm basis. The programme includes, in particular, geological exploration, the development and exploitation of oilfields, the extraction*^)!' oil and gas, delivery of the equipment, needed, transportation of the oil and gas l.o loading points and its delivery to Japan, and _-_-_
~^^1^^ Pravda, 18 May 1977.
~^^2^^ Ibid.
~^^3^^ See: The USSR's Foreign Trade in 1976, pp 13, 15.
__PRINTERS_P_241_COMMENT__ 16---0372 241 organisation of the financing of the whole complex of work.^^1^^These and other forms of Soviet-Japanese co-operation are clear evidence of the reciprocal advantage and stability of the business relations between Soviet trade organisations and Japanese firms that are being developed on a basis of confidence between the parties. As L. I. Brezhnev said in his interview on Japanese television on 7 November 1977:
Wo want to live as good neighbours with the Japanese people. There arc objective opportunities for doing so —quite a few of lliem. They exist in all fields of Soviet-Japanese relations without exception: politics, trade and economy, culture, science arid technology, and so on. It is often said in Japan that the Japanese and Soviet economies could reciprocally complement each other. And in a certain sense that is so__ In particular the USSR disposes of raw materials needed by Japanese industry, and other goods that could interest Japan. Japanese goods in turn have already won a good name in the USSR. Positive experience has also been gained in building large-scale economic co-operation. This surely creates the grounds for putting our countries' business relations on a firm, long-term basis. Both sides, I think, would only gain from that. And what is very important is that the cause of lasting peace and security on the great Asian continent would also = gain.^^2^^
At a time when the economies of Western countries are experiencing serious difficulties, the benefit of cooperation is becoming particularly obvious, but bourgeois propaganda is more and more employing fabrications of a 'leftist' colour distorting the essence of the matter. One often meets statements in the Western press that the Soviet Union's trade with capitalist countries is a ' betrayal' of the interests of the working class of the West, a 'renunciation of the ideals of socialism in favour of capitalist concerns'.
Economic co-operation with the Soviet Union of course benefits the capitalist firms involved in it. But even from the narrowly economic angle, and from the broader political approach, the co-operation of socialist _-_-_
~^^1^^ See: The Soviet Union's Foreign Trade Halations in the New Stage, pp 115--116.
~^^2^^ Pravda, 10 November 1977.
242 and capitalist countries meets Ihe interests of the workers of the West equally with all other members of Western society, with the exception of the monopolists and militarist top brass who proiit from war and preparations for war.There is no question, liowever. of any kind of interference in the internal affairs of socialist countries by capitalist enterprises. Capitalist iirnis do not obtain property rights in socialist countries. The socialist states, with their state monopolies of foreign trade and currency relations, and socialist property belonging to all the people, reliably protect the world of socialism from expansion by capitalist monopolies. The commercial co-- operation of the Soviet Union and other socialist countries with Western linns is being developed 011 the basis of mutual interest, the principles of the sovereignty of both parties being observed.
Then who gains from this co-operation? Peace throughout the world, and the working people of both capitalist and socialist countries.
Co-operation between socialist and capitalist countries cannot, of course, alter the capitalist mode of production qualitatively, by ending for example the inevitable character of overproduction crises in the latter.
The Western press is trying to stuff people's heads with stupid tales about the 'immanent weakness of socialism', the Soviet Union's 'incapacity' to develop its economy on its own without 'outside help'.
The whole sixty years of the Soviet Union's history, which have transformed it from a poverty-stricken, backward country into a powerful state standing in the forefront of the progress of modern science and technology, and the present development of the Soviet economy demonstrate the absurdity of certain Western propagandists' statements.
For such a big economic complex as the Soviet economy economic links with the West can only be supplementary, by virtue of its scale and unique character, and not a decisive factor of development. The USSR, as is known, is the only country in the world that disposes of practically all the natural resources needed for the development of an economy in modern conditions. It __PRINTERS_P_243_COMMENT__ 10* 243 has a developed industry, transport,, and other sectors. The bulk of the goods it needs it, produces itself, which also explains the relatively low weight of imports in relation to its national income (6.3 per cent in = = 1975).^^1^^ Even if the growth rate of the Soviet Union's trade with capitalist countries were 12 to 14 per cent a year, its imports from them in the next few years would not exceed 2 or 3 per cent of its national = income.^^2^^
The Soviet Union, though having built up its own powerful economic capability by the labour of the people, utilising its own internal means and resources, has never been an advocate of a policy of economic autarchy. It has always stood for broad international co-operation in all spheres of the economy and politics, considering it a means of accelerating economic development and consolidating peace and the security of nations.
The position of many capitalist firms in regard to cooperation with socialist countries is changing essentially, given serious economic difficulties, inflation, and acute monetary upheavals. They are seeking to extend it, in particular, in the field of credits as well. The socialist countries, which do not suffer from economic crises, are utilising co-operation so as to cope with their economic plans more quickly. Extension of co-operation in crisis conditions also has a positive effect on the situation of part of the working class and working people in the West, helps consolidate detente, and provides optimum conditions for the activity of the West's democratic forces.
In expanding its economic co-operation with capitalist and developing countries, it should be stressed, the Soviet Union does not demand political or ideological concessions of any kind. The principles inherent in the world socialist community of respect for sovereignty, full equality of the parties, and mutually advantageous relations, are built unaltered into the socialist countries' economic relations with any country, including developed capitalist ones.
_-_-_~^^1^^ See: The USSIVs Foreign Trade Relations in the New Stagr, p~15.
~^^2^^ Ibid., pp 16(1-1(17.
244 __*_*_*__The complex, grave conditions in which the economies of many capitalist countries now iind themselves are calling for an increasingly active struggle by all progressive forces to defend the interests of the working people and for the ideals of democracy, peace, and social progress. Communists are leading a broad democratic movement aimed at securing irreversible detente and an extension of diverse, equal co-operation with all countries, and are thereby striving to consolidate the unity of action and solidarity of all working people and of all the nations of the world in the fight against those who are really guilty o! I lie economic crisis, so as to eliminate its consequences.
[245] __ALPHA_LVL1__ ConclusionThe deep economic crisis that affected all spheres of the economies, politics, and ideology of capitalist countries in the mid-1970s, and the heightened instability of the capitalist system, have posed mankind the question of where is the way out. Along what road should society develop in order to escape the 'social pest called a commercial and economic crisis'? How can the disastrous consequences of economic crisis for the working people he ended and harmonious development of society secured in the interests of all its members? How is a society based on peace, friendship, and the co-operation of all people to be built?
Capitalism cannot provide harmonious development of society; the deepening of its general crisis is evidence of that.
The crisis of the 1970s has once more witnessed to the fact that private ownership of the means of production, capitalist exploitation, anarchy, and competition make economic crises inevitable and prevent economic progress. During crises the working people's position deteriorates and social inequality becomes greater. The lot of the workers under "capitalism is either to labour fo enrich capitalists or to swell the army of the unemployed. Capital is ruining"the working people, peasants and small farmers, and the petty'bourgeoisie and middle strata of town and country.
In the field of international relations capitalism maintains principles of force and exploitation which are causing growing instability of the world capitalist economy. The upheavals in its monetary and financial system, and the energy crisis, reflect the growth of interimporialist 246 contradictions and the crisis of the system of colonial exploitation of peoples by imperialist monopolies.
In its drive for profit capitalism is undermining the very basis of existence of life on Earth, is doing irreparable harm to the natural environment, and is causing a profound ecological crisis.
In trying to prolong the existence of the capitalist system its defenders are resorting to militarisation of the economy and support of reactionary regimes, which is creating a danger of thermonuclear catastrophe.
In order to weaken the economic, social, and political contradictions the monopolies are trying to use the bourgeois state, but development of state monopoly capitalism cannot achieve this end. State monopoly control of I lie economy is itself suffering a profound crisis, intensifying the contradictions of capitalist society.
The progressive forces of capitalist countries, above all the Communist and Workers' Parties, are providing an answer: the way out is through struggle against the monopolies to defend the interests of the masses of the people and of all society, exploited by a handful of monopolies; it lies through carrying out radical social, economic, and political reforms that would make it possible to end the power of the monopolies and ensure society's advance along the road of democracy, social progress, and socialism.
In the view of Communists socialism can solve all the root problems of social development, because socialism is the people's road to freedom and happiness.
Socialism above all ensures rapid growth of the economy and culture in the interests of the working people. It can transform a backward country into an industrial one, not in a century but in the lifetime of a single generation. A planned socialist economy, by its very nature, excludes economic crises and other upsets. The proofs of that are the main indicators of the growth of the USSR's economy in the sixty years since victory of the Great October Socialist Revolution. In the years from 1917 to 1977 the national income of the Soviet Union increased 103 times over, industrial output rose by a factor of 225 (output of means of production by a factor of 497 and of consumer goods by a factor of 73).
247Evidence of the strength of the Soviet system and of ils capacity to solve complicated economic and scientific and technical problems is the fact that in the years 1971 to 11)75 alone its volume of industrial production rose by 50 per cent, and now constitutes more than 20 per cent of world output. In absolute terms this is more than the whole world produced in 1950. In 1975 the growth rate of the USSR's industry was more than 7.5 per cent at a time when industrial production fell by more than 10 per cent (as we have already said) in Western Europe, the USA, and Japan. As L. I. Brezhnev said at the 25th Congress of the CPSU in 1976:
Wo have achieved a higher growth of industrial output, capital investments and state appropriations for now measures to raise the people's living standard than in any other preceding five-year plan. The list of major products of which the Soviet Union is the world's biggest producer has hocome even more impressive. In recent years steel, petroleum and mineral fertilisers have hecn added to the list, which includes coal, iron ore, cement, and some other = items.^^1^^
The very fact that socialism provides regular, uninterrupted, crisis-free, unfluctuating economic growth is already a convincing argument in favour of development along the socialist road.
From the angle of proof of the superiority of socialism, the social advances of the Soviet Union and other conntries of the socialist community are no less impressive than the growth rates of their economics.
In everything that concerns the advantages of socialism as a system, and everything that stems directly from the objective patterns of its development, socialism has already demonstrated its complete superiority to capitalism. Everyone's confidence in the morrow, absence of unemployment, steady rise in the working people's living and cultural standards, their right of access to the good things of culture, science, and education, the country's concern for their health, and a longer expectation of life are all facts typical of all socialist countries. The exceptions, perhaps, arc China and Albania, but that is not because of the nature of the socialist system but of _-_-_
~^^1^^ Documents and Renolutidus. XXVth Congress of ihe. CPSU, p~43.
248 the departures from the principles of socialism that have been permitted there.The USSR and countries of the socialist community have not, as yet of course, surpassed the economically developed capitalist countries in standard of living, i.e. in the quantity and quality of material goods produced per head of population. That is because most of the countries of socialism had to begin their development at a very low level and because they were forced to endure serious difficulties connected with war and restoration of the economy. But in recent decades the standard of living has been rising very fast in these countries.
The 25th Congress of the CPSU stressed that growth of social production and the development of science and technology in every way possible is subordinated under socialism to one single aim, that of making the life of the people better and spiritually richer, of bringing out the potentialities of every nationality, every collective and work group, and every individual.
That is why the development plans of the Soviet economy are subordinated to the tasks of consistently increasing the prosperity of the Soviet people, improving their working and living conditions, and making substantial progress in the sphere of health care, education, and culture.
In the sixty years of Soviet government rule the per capita real incomes of industrial and building workers have risen on average by a factor of nearly ten (9.7), taking into account the abolition of unemployment and the shortening of the working day, and the incomes of peasants by a factor of over 14, and this growth is continuing steadily.
The radical changes in the mode of life of all Soviet people are expressed above all in the fact that the exploitation of man by man has been abolished as a result of historic transformations, and an end has been put to social inequality. Unemployment has been completely banished from the Soviet Union and other socialist countries, one of the shortest working weeks in the world has been instituted, and measures have been taken to improve working conditions. The USSH is one of the countries with the lowest level of industrial accidents. The incomes 249 of workers, peasants, and all working people are rising and prices kept stable. The USSR has the lowest rents in the world, free medical care, and social security wholly financed by the state.
A real revolution has been made in the building of housing in the Soviet Union.
By providing the working man with the good things of life, socialism fosters all-round flourishing of the individual, ever more active involvement of all members of society in its management and direction, and constant perfecting of socialist democracy.
Anti-communists try, in their attacks on socialism, to prove that economic and social progress are allegedly achieved under socialism without development of democracy, and even at the price of a limitation of political freedoms. But how could the Soviet Union really have made such progress in its economy, culture, and other fields without the active, conscious, creative effort of the masses of the people, and without their direct involvement in the conduct of public affairs?
Genuine democracy is unthinkable without socialism, just as socialism is impossible without the constant development of democracy. Only socialism has given the working people the chance to attain human dignity and to become citizens with full rights. Socialism has freed man from exploitation, provided the conditions for spiritual and intellectual development of the human personality, and ended alienation and separation among people by providing an atmosphere of goodwill and comradely mutual help.
The progress made by the Soviet Union in the building of communism is an integral, organic part of the achievements of the whole community of socialist nations. It is inseparable from the development of fraternal] cooperation of all members of the family ofj peoples emancipated from capitalist oppression. The formation of this family is the greatest historical service of socialism.
International co-operation within the world system of socialism is demonstrating international relations of a new kind to the whole world. The political and economic solidarity of socialist countries is multiplying the strength and power of each of them and making it possible to make 250 fuller use of the advantages of the socialist organisation of social life.
Relations between socialist countries are characterised by a community of basic interests. The fraternal countries arc united by the ideology of Marxism-Leninism and the common aims of building socialism and communism. And they have the same goals in the fight against capitalism and its imperialist policy.
Life itself is making closer economic and political convergence of the fraternal countries necessary. The point to the development of socialist integration is successful solution of this matter. Socialist integration is based on defence of the interests of all those involved in it, and its goal is the levelling up of economic development, mutual assistance, and more successful development of all socialist countries.
The forming of the world socialist system has been a complicated, many-sided process associated with overcoming difficulties of an objective and subjective order. Fraternal relations and co-operation exist between countries with far from identical levels of economic development, historical and cultural traditions and relations, arid social structures. But in spite of the existing difficulties and problems, relations between socialist countries are developing successfully, given the existence of a correct policy of Communist and Workers' Parties on the principles of Marxism-Leninism.
The world of socialism provides example of the solution of many issues that have become stumbling-blocks for capitalist countries, such as, in particular, monetary and financial co-operation, and collaboration in the field of fuel and power.
The fact that the world system of socialism presents all mankind with the means to deal with ecological problems is especially important. It is the socialist countries that are coming forward as the initiators of an active policy of nature conservation. Protection of the environment has become an indispensable ingredient of the activity of countries of the socialist community.
Being concerned for the fate of mankind these countries are putting forward concrete proposals on the international level on matters of environmental protection. The 251 main tiling is to slop destruction of the environment and to begin its restoration. It is not by chance that attitude to nature lias become a field of rivalry between socialism and capitalism. This rivalry is naturally suggesting forms of co-operation on matters of importance to all countries.
A most important precondition for dealing with the major problems of modern civilisation, linked with the very future of mankind, is to ensure just peace. In this held socialism is demonstrating its decisive superiority to capitalism. Socialism and peace are inseparable, as witness the active international efforts of the CPSU and the Soviet Government to consolidate peace and the security of nations.
In contrast to what is happening in the capitalist world the social, economic, and political development of socialism is opening up new horizons for the working people of the whole world.
The economic crisis of the 1970s has faced the progressive forces of capitalist countries with an important issue, that of giving an international rebuff to the monopolies' infringements of the vital interests and rights of the working people and all nations. The working class and its staunchest, most courageous spokesmen, the Communists, are marching in the vanguard of this struggle.
New horizons are opening before the communist, working-class, and national liberation movements; at the same time, however, the conditions of the struggle are becoming more and more complicated and new difficulties are arising. But whatever the difficulties there is no doubt of the final victory of the forces of peace and progress for a just social order on our planet, complete elimination of economic crises, and the victory of socialism. Socialism meets the basic interests of all nations,and the future belongs to it.
[252] __ALPHA_LVL0__ The End. [END] REQUEST TO READERSProgress Publishers would be glad to have your opinion of this book, its translation and design and any suggestions you may have for future publications.
Please send all your comments to 17, Zubovsky Boulevard, Moscow, USSR.
[253]Progress Publishers
Put out recently
52. BUIS'KINAM. The USA —Wostorn Europe: Now Trends in Kivalry ~
This is a study of the new forms of inter-- imperialist conflicts between the USA and 1he West European countries, such as foreign trade competition, currency rivalry, and struggle in the sphere of international enterprise. The book will be very useful both to international relations experts and to a wide circle of readers wishing to understand the intricate pattern of international developments in the world capitalist economy in the seventies.
[254]Progress Publishers
Put out recently
54. KOSTYUKHIN D. World Market Today ~
The book provides a comprehensive analysis of the present-day situation, trends and problems in the world capitalist market. It dwells on the new phenomena in the development of the capitalist economy, the impact produced on it by the scientific and technological revolution, the state's influence on economic development, and the role of multinational monopolies on the world capitalist market.
A special section is devoted to the world socialist market and economic cooperation between the socialist and capitalist countries.
[255]