A New Stage in the International Monetary Crisis

[p055] A NEW STAGE IN THE INTERNATIONAL MONETARY GRISIS In every capitalist coun- try, the struggle of the working class now goes forward in conditions where the preparations for taking state power are beginning to _pre- dominate. , The effects of the inter- national economic crisis are now being réflected directly in politics; and the political effects of the class struggle are having immediate reactions on the development of the economic contradictions. This combined character of the contradictions, this revo- lutionary process, has been accelerating ever since the decisions of US President Nixon on August 15, 1971: non-convertibility of the dollar for gold; ending of the Bretton Woods system of fixed parities and international support to capitalist powers, 10 per cent import tariff into the US. Since that day, revolution- ary leadership of the working class could be fought for only on the basis of understanding that the whole foundation of adjustment of class relations since World War II was removed. Henceforth, the bourgeoisie of each capitalist country, in order to survive in the trade war unleashed by Nixon, must New stage in monetary crisis break the old relationships of trade union pressure, Key- nesian policies of concessions and parliamentary democracy, in order to impose Bonapartist forms of rule. The political stryggles which result from this necessity to break the old forms of rule, a necessity which clashes with the working class’s trade union strength built up in the boom, are the furnace within which the working class will be broken from reformism and won to revolutionary politics. This was and is the perspec- tive of the International Com- mittee, against all those revi- sionists who started from the theory of ‘neo-capitalism’, a New capitalism which could overcome its contradictions. Since August 1971, these Opposed perspectives have been put to the test. At this moment, the spectre of un- controllable inflation threatens the jnternal stability of every capitalist country, as well as the whole range of inter- national relations. One year after Nixon's measures. the price of gold on the free market rocketed to over $70 per fine ounce, more than twice the official price in the Bretton Woods period. before settling temporarily at some $65. The reality of the inflation caused by the 25-years outflow of paper dollars suddenly burst through the surface. This in- flation means that the living standards of the masses must be brought into line with the real value of money, and this can be*’done only by crushing the working class. Every capitalist publicist is uttering warnings that there is an inseparable connection be- tween uncontrolled inflation and the growth of authori- tarian and fascist regimes. The treacherous social-democratic and Stalinist leaders,. instead of fighting for the overthrow of the capitalist governments, collabotate in the ‘fight against ' inflation’, thus granting valu- able time to the capitalist class to prepare its repressions and disarming the working class in the name of ‘defending democracy’. Disarray Not only has the gold price rocketed. The December 18, 1971, Smithsonian agreement on parities, far from staving off the monetary crisis, has been followed by a period of further uncertainty and specu- lation against weak currencies. Every meeting of bankers and ministers has ended in dis- array. Step by step the capi- talist class is forced to the basic problem: settle accounts with your own working class! The European powers, and sv ee

[p056] particularly Britain, are now the centre of this crisis. Summit meetings of ministers and bankers’ together are called to discuss measures against inflation, i.e. against the working class. The US Treasury sets up a commission to study the im- . plications of sterling’s weak-- ness; Nixon’s aides are ‘study- ing the implications of more intensive trade war’. - So hopeless has been the search for a new monetary agreement, and so clear has become the prospect of bitter trade war, massive concentra- tion of capital, wiping out of competitors, massive shut- downs and unemployment, that the point has now been reached where the factor of confidence, a vital one at a certain stage of capitalist crisis, is now verging on collapse. This was the warning con- tained in the rush for gold and out of dollars, it explains the periodic rounds of specula- tion against weak currencies, especially the pound sterling at this time. Share markets drift down in a state of ner- vousness, and unit trust values are collapsing. Speculation is rife. The rate of industrial - investment is declining, while property speculation goes on unchecked. These are un- mistakable signs. The British capitalists are set to follow their European counterparts into the EEC, with the aim of merging their economic and political power against the working class. The renewed pressure for rapid political union and for joint European wage controls reflects this strategy of trying to overcome the contradiction between the nation state and. the development of produc- tive forces. But this cannot be done. Ever since 1969, the mass strikes of the Italian workers have forced the EEC powers to support and tolerate a con- stantly weakening Italian eco- nomy. Pirelli, Montedison and other Italian monopolies, as well as the massive state enterprises IRI and ENI, have just recorded runaway losses. Once again, the ability of the bourgeoisie to settle affairs with the working class, or of the working class to take the power, intervenes immedi- ately in the development of the economic crisis and the proposed solutions to it. Inflation, resulting in the first place from the use of the dominant dollar to back domestic policies of containing rather than confronting the working class, now faces the capitalist class in every coun- try as the very incarnation of the basic character cf the capitalist system: a mode of production which raises itself as an independent power against the producers. It is the latest, uncontroll- able expression of the insol- uble contradiction between the development of the pro- ductive forces and the main- tenance of capitalist private property and the nation-state. The capitalists. in the metropolitan countries cannot have their hands free to deal with their own working classes. The colonial masses are intensifying their revolu- tionary struggles even after nearly 30 years of continuous battle. Deals - Behind this coming to- gether of the metropolitan and colonial revolutions is the same world economic crisis. For years the imperialists have staved off the approaching crisis in Europe and America by intensifying colonia! exploitation. The point has beer’ reached where repayment of colonial countries’ debts to the World Bank actually exceeds the total amount of new ‘aid’. Just as the Stalinist bureau- cracy collaborates with the bourgeoisie in the advanced countries to divert the pro- letariat from its revolutionary tasks, so it now seeks to break the colonial peoples. The pressure of Moscow’ and Peking on North Vietnam for a deal with the American im- perialists contains the greatest dangers to the people of Indo- China and of all the world. It follows the treacherous role of Moscow and Peking in Bangladesh and in support of the repression of the revolu- tionary youth in Ceylon. All these betrayals are part of the new trade agreements and proposed security and _ military agreements between the Stalinist bureaucracy and US imperialism. The wave of repressions in Czechoslovakia and the USSR is the bureau- cracy’s internal preparation of these betrayals. Here is Stalin- ism in its counter-revolution- ary role. All those revisionists who capitulate to Stalinism share the criminal respon- sibility. In August 1971 there were those who prepared an oppor- tunist adaptation by surmizing that Nixon’s measures, while seriously affecting some coun- tries, would only marginally damige others. This com- pletely missed the universal nature of the crisis. The inflation problem con- fronts countries like the US with high unemployment, as well as those like Germany with a serious labour shortage and internal boom. The con- tinued capitalist expansion in Japan and Germany, far from representing an alleviation or moderation of the world crisis, on the contrary aggravates it enormously, because the strength of the yen and the Deutsche-mark threaten afresh the stability of international payments and currency mar- kets. Yet for Japan or Ger- many to revalue would mean an immediate slump, so dependent are these _ bour- geoisies on export of ‘manu- factured goods. To make any ‘contribution’ to international stability would mean for them immediate sacrifice of profits and an onslaught on the work- ing class. In the weaker capitalist powers, this immediate sen- sitivity of the international Fourth International Spring 1973

[p057] economy to the internal class struggle is even more serious and is now the crux of the political and economic con- tradictions. The British capi- talists’ strategy of European entry, helped at every turn by the Labour and trade union leaders, has foundered on the rock of the strength of resist- ance of the working class. Now the surge of inflation in Europe in the last weeks has forced the decision of the British bankers to turn and use the inflation directly as the instrument to beat the working class. They hope to drive down the standard of living as well as creating the panic conditions in the ‘fixed income’ middle class which can turn them against the working class, giving backing to the introduction of author- itarian measures. This is the pattern for all Europe. And it has already resulted in severe constitu- tional crisis in Holland. The outbreak of struggles in any one of these countries will be a spur to the next stage of the European revolution. In these circumstances’ the French franc will be forced to devalue and a round of competitive devaluations could follow. In the case of Italy a whole collapse of the economy is in prospect. Even in fascist Spain, the police have clashed with housewives over rising prices and new economic controls have been instituted. The bourgeoisie turns more and more to the Bonapartist solutions necessitated by in- flation. Its organ in Britain, ‘The Times’, is clear: ‘If there is no agreement it follows that there will be conflict. The dispute will concern the cen- tral issue of the authority of the state. In such a dispute the »ventual victor is always the state, because trade unions cannot govern. Such a colli- sion will of course leave scars and divide further a divided nation. It will also produce new impositions of _ state authority.’ Training This is certainly the mean- ing of uncontrollable inflation, the latest stage of the crisis: either Bonapartist rule, with the state standing with brute force ‘above’ the classes, as a short transitional phase to fascism; or the building of revolutionary political leader- ship in the working class for the breaking of bourgeois state power. In every country, the sec- tions of the Fourth Inter- national are called upon to intervene in every mass struggle provoked by the new stage of crisis, training, on the basis of Marxist theory, the cadre which can build for the decisive struggle for working- class power. In the conditions of mass struggle forced by the inter- national inflation, the pro- gramme of demands by the working class must start from the fact that there is no way . out whatsoever within the framework of continuation of capitalist economy. Defence against inflation by the most - determined struggle for wages, resisting all attempts at state control; but this struggle can be successful only insofar as it is turned politically against the capitalist governments, and linked with the fight for alternative leadership. The fight for the right to work must start from rejec- tion of all sackings and closures: through strikes, fac- tory occupations and political mobilizations against the governments, the demand of expropriation of the bour- geoisie, nationalization with- out compensation and under workers’ control, the fight against unemployment must become a central part of the working class’s struggle for power. At every point, the inde- pendence of the trade unions from the capitalist state must be fought for. But this can be done only in the fight for a revolutionary leadership which will mobilize the unions against the whole enemy class and its government. Against the capitalist Com- mon Market, we fight for the United Socialist States of Europe. The core of every one of these struggles is the building of sections of the Fourth International in every country. Qctober 30, 1972 The Dollar Crisis A collection of articles reprinted from Workers Press, daily paper of the Socialist Labour League, British section of the International Committee. Essen- tial reading for gaining an understand- ing of the world monetary crisis and the development of capitalism since World War Two. 95° ‘Labor Publications a a 135 West 14th Sf. New York, N.Y. 10011 New stage in monetary crisis 53

[p058] Statement by the International (onenith . of th: $th Pnternational