This document was written as a contribution to pre-conference discussion in preparation for the Workers World Party Conference coming up on June 1-2.
In previous articles, and also in our book Perestroika: A Marxist Critique, we have attempted to present in the most concrete detail the regressive developments in the USSR. We demonstrated that the projected reforms of Gorbachev and his group of supporters were in fact laying the basis for a capitalist free market which in turn was leading towards the dismantling of the central planning system and was steadily undermining the foundations for a socialist economy, namely, the public ownership of the means of production.
At the moment, the issue is resolving itself into who will own the means of production — that vast industrial and technological equipment second only to that of the U.S. and possibly Japan (remembering that the latter has neither a space industry, like the one developed in the USSR over 30 years, nor a nuclear capability).
How striking is the deterioration of the USSR! It is being hailed all over the capitalist world as the imminent collapse of the entire social system. Such was certainly the view in December 1989, when Eastern Europe was in chaos, the counterrevolution was on in Romania, and the swallowing up of the German Democratic Republic was already regarded as an accomplished fact. Industrialists and financiers everywhere were rubbing their hands in expectation of fabulous profits.
It is now just 18 months later. The great disruption and chaos in the USSR have been accompanied by the incipient reemergence of two class camps — the camp of the bourgeois centrist reformers and the outright capitalist restorationists on one side, and the camp of the workers, peasants and progressive intelligentsia on the other. The latter, however, for the most part remain leaderless and inarticulate. All the earmarks of the reemergence of irreconcilable class struggle are present, except for the one indispensable element — a conscious, willing, able and determined proletarian and truly socialist leadership.
Now, 18 months after the beginning of the debacle and tragedy, the imperialist ruling classes are beginning to worry. Doubt is creeping through the lines in the capitalist press. Dozens of U.S. delegations, undoubtedly packed with CIA agents, are rummaging through the USSR. The U.S. has likewise brought over here dozens and dozens of its pro-imperialist supporters, writers, artists, politicians and most of all economists. Not a single one of these latter shows any affinity to Marxism or any understanding of the vicissitudes and contradictions of the capitalist economy.
As though to humiliate the socialist elements in the USSR, the former foreign minister, Eduard Shevardnadze, is in the United States with a horde of his advisers, getting together a think tank supported financially by the multimillionaire William Garrison.
How could any government which has been under the gun of the imperialists for so many years permit this? It's all in the name of glasnost.
At the moment, virtually all the leading capitalist powers are involved in intense consultation and negotiation regarding their strategy to destabilize and overturn the USSR. Meetings in London of the Group of Seven (the G7 are the U.S., Britain, Canada, France, Germany, Italy and Japan) and in Washington (between Bush and German Chancellor Kohl) are taking on a feverish pace as both currents in the bourgeois camp — the centrists led by Gorbachev and the outright restorationists led by Yeltsin — are making frantic appeals for billions in cash to avert what each calls an impending catastrophe.
As we pointed out last week, the two groupings in the USSR have met in secret and formed what is virtually a coalition government. Both of them have jointly agreed to make immediate appeals to the imperialist financial oligarchy for something in the nature of $20-$30 billion. According to the Financial Times of London (May 17), they addressed a secret letter to both London and Washington offering to put up a substantial part of the USSR's industrial and technological apparatus as collateral security for the money. They also expressed willingness to submit to IMF and World Bank inspection and supervision of the bourgeois restructuring.
These reforms, it is said, are another compromise on the part of the Gorbachev forces, who earlier had rejected the drastic 500-day plan to speed up the remodeling of the USSR along the lines of a capitalist market economy and privatize the publicly owned means of production.
This new compromise is an utterly incredible development. Why then is there no glee in the circles of imperialist finance capital? Why is there growing concern and even skepticism and fear that the U.S. and its imperialist allies are heading into a quagmire of unparalleled proportions?
If the quagmire is drawn out to its logical and inevitable conclusion, it will, in the context of contemporary world imperialist relationships, constitute a veritable Stalingrad for world imperialism. That was the turning point in World War II when the high-tech Nazi armies, having directed their fury against the Soviet Union and driven deep into its territory, met their match in the inexhaustible resistance of the Soviet masses.
In order to explain how this could be the outcome of the present situation, it is absolutely indispensable to put the U.S. adventure in the Middle East, the Gulf War, in its proper perspective.
Elated over their quick military victory and the devastation of Iraq, the U.S. government — the military-industrial complex and the high command of the Pentagon — has embarked upon a plan of world domination the likes of which no one, even in the coldest days of the cold war, thought possible or even desirable.
This plan is not merely the result of the euphoria of the military brass alone. Nor can it be accounted for by the immediate dangers facing the U.S. abroad. After all, the so-called peace dividend should have moderated the tone and even somewhat the substance of Pentagon planning. But this has not been the case.
Nor can it be explained as the running wild of a traditional military expenditure scheme, calculated to fatten the huge corporations which form an integral part of the military-industrial complex.
Of course, it is true that the military is never satisfied, that it has an ever-greater need to modernize as a result of the dizzying development of new technology characterizing the present epoch. The speed of this process grows out of the virulent competition to develop the most sophisticated weaponry.
But there is something more basic, something which surpasses the needs and ambitions of the military and its partners in the military-industrial complex.
It is the emergence of a truly extraordinary economic crisis whose symptoms, evident for over three years since the October 1987 stock market crash, are being muffled, even talked down. Nevertheless, it is of such staggering proportions that sooner or later it must burst through the artificial political restraints binding it.
For a long, long time, many bourgeois writers, politicians, think tank analysts, and the government itself have viewed militarism as a principal stimulant for the economy. The Great Depression, it should be remembered, lasted for a decade (1929-39), interrupted by only a brief upward spiral in the mid-thirties which had begun to peter out by 1939. It was then that the war spending began on a huge scale for the Second World War. Then of course came the Korean War, the Vietnam War, many counterrevolutionary interventions around the globe like Grenada and Panama, and finally the Gulf War.
The Gulf War was welcomed by almost everyone in the ruling circles of capitalism, in virtually the entire business world, as the one bright spot which would provide a substantial dose of artificial stimulation to put the capitalist economy on the high road to prosperity. There were, of course, misgivings and fears by the more sober imperialist strategists regarding the prospects of the war. But the overwhelming sentiment in the bourgeoisie and especially among the arms manufacturers was ecstasy over the prospect of massive war profits.
But what has really happened, which the capitalist press so diligently tries to cover up? The Gulf War has not stopped the decline of the capitalist economy into recession. On the contrary, it has even accelerated it.
Take for instance, the cutting edge of U.S. industry: high technology. Apple Computer, which was experiencing only minimal growth before the war, has recently been forced to cut its work force by about 10% — 1,500 people — and has embarked on a restructuring scheme to slash all its operating expenses in the face of mounting financial pressures.
This is not an isolated phenomenon. The same thing is happening in Compaq, Bitstream, IBM and General Dynamics. It is an indubitable sign of economic retreat.
But there is a still wider indicator, the failure of the housing market to, in the words of the Wall Street Journal (May 21), stage a "broad-based comeback." On the contrary, it seems that, "to the amazement of some of the real estate industry," the one-month recovery quickly fizzled and was only due to "euphoria over the early results of the Persian Gulf war."
While the Wall Street Journal tries to put a good face on it, a study by a private firm, the Holt Advisory, dated May 17, 1991, has this to say about the housing situation:
"According to the Census Bureau's most recent tally, there are 10.3 million vacant houses, townhomes, apartments and condominiums in this country. That's enormous. The Census Bureau also found the highest rate of vacancies in 50 years — a national average of 10% with much higher levels in some areas. For instance, nearly 17% of homes in New Orleans were empty in 1990. In Houston, the vacancy rate is 15% and in the Dallas-Ft. Worth area it is 13%. Yet we've barely begun to see the impact of the big inventories of unsold homes held by the Resolution Trust Corporation, which total hundreds of billions of dollars."
Could there be a bigger scandal than this? Ten million housing units empty when there are estimated to be three million homeless, not only in the metropolises but all over the country, in cities, towns, villages and rural areas!
To the hundreds of billions in debt assumed by the government's Resolution Trust, add the indebtedness of the Federal Deposit Insurance Corporation — and the amount becomes even more staggering.
But these are only two among many important indicators of the true state of the capitalist economy. The crux of the problem, however, lies in a longer and deeper aspect of capitalist crisis — the crisis of the banks. This crisis first of all made itself felt with what is popularly referred to as the S&L scandal — a gross understatement. Nothing has been so covered up as this very ugly phenomenon. Its magnitude is so menacing that neither politicians, industrialists nor bankers are in a position to fully reveal it.
At the beginning it appeared that it would be forgotten after the usual exposure of corruption on the part of a few banking officials and a small though significant number of senators and representatives in the Congress, both Republicans and Democrats.
But as more and more bankruptcies were revealed, it became clear that the charges and countercharges of corruption were not sufficient to cover up the huge abyss that had been opened. There have been failures of big banks in the past — Continental Illinois, Franklin National and Penn Square — but all of them were overcome in time. But what's involved with the S&L debacle is not one or two hundred million dollars, not five billion or ten billion, but a number that is perhaps greater than all of the previous big bank failures put together — and still growing. Indeed, the numbers that have been floated of late top $500 billion.
The financial crisis arising from this is so deep that just to handle it politically now that the national presidential campaign is beginning holds dangers for the social and political system. It will not do, they reckon, to uncover the massive failures and look into the abyss. To open this can of worms up to investigation is to invite charges of malfeasance, robbery and corruption. But even more frightening to them, it can open up the possibility of a social conflict, a true class conflict, especially if at the same time one of the biggest of the banks — Chase Manhattan, Citicorp, Manufacturers Hanover, or Chemical, all of which have suffered losses — collapses.
True, they say there's no danger of a collapse. But the crisis is acute, pushing the Federal Reserve Bank to lower interest rates. It is well known that this mechanism feeds inflation and riles the leading imperialist partners — such as Germany, whose Chancellor Kohl is presently in the U.S. to discuss all this and more. And the meeting of the G7 imperialist countries to deal with all this is turning into one of their longest secret sessions ever.
In the new stage of imperialism ushered in by the scientific-technological revolution, the transfer of funds by the use of electronic technology is swifter and more efficient than was dreamed of just a few years ago. This speeds up the circulation of capital. In this new stage of imperialism, finance capital — the nervous system of the capitalist economy — is more endangered than ever before.
The accumulation of vast oil revenues in the coffers of the big Western banks has failed to stabilize the world imperialist system and has impoverished the millions in the Middle East to boot. Nawal el-Saadawi, the Egyptian author, told the May 11 Commission of Inquiry hearing into U.S. war crimes in the Gulf, held in New York, that 680 billion petrodollars are on deposit in Western banks.
This $680 billion has been loaned out by the big banks to all the four corners of the earth. Huge sums have found their way to Brazil, Argentina, Indonesia, south Korea, Singapore, Norway, Sweden, Yugoslavia, Poland — wherever it was possible to unload them. Yet it has exacerbated and not solved the most fundamental of all the fundamental contradictions of contemporary capitalism — the dizzying growth of the productive forces, which are collectively produced by hundreds of millions of workers but privately owned by a shrinking tiny minority of the super-rich, the multimillionaire and billionaire dynasties and financial conglomerates.
Back on Oct. 19, 1986, the New York Times wrote that the number of billionaires in the U.S. had nearly doubled, from 14 to 26 in just one year, thus claiming an increasing share of the nation's wealth at the expense of the poor. The richest 5% of Americans have more income than the entire bottom 40%. But when assets are considered, the richest 1% of Americans possess greater wealth than the bottom 90%.
But to get back to the most significant, most urgent symptom of this malady — the hundreds of billions of dollars in savings and loan failures and the inability of the capitalist government to hide the growing danger that this poses for them.
This malady of capitalist economic expansion, this symptom of acute crisis, is not related in the press or by the capitalist politicians to the unbridled militarism of the Pentagon. The looming catastrophe is considered independently of the budget crisis, military expenditures and current military policy. They are treated as though one has no relationship to the other.
Instead of showing the intimate connection between military spending and the financial crisis, they dwell instead on every penny the capitalist government spends for the poor, the disabled, the sick, no matter how paltry and insignificant a sum. The mounting financial crisis to prop up the banking system, by perhaps as much as a trillion dollars when we count in the Resolution Trust and the FDIC, is never directly related to the plans for world domination.
The plans for world domination are the result of the financial crisis, which in turn is a symptom of the crisis of the capitalist economy.
Why is this financial crisis so enormous? In order to fully understand it, it is important to grasp the meaning of the regulation of the banking system and of the capitalist economy in general.
There's endless chatter about the free market. The free market, as it developed over the years before the emergence of the epoch of monopoly, meant freedom from any and all restraints by the capitalist government. Buy and sell freely and the devil take the hindmost — that was the motto of the free market, although it's questionable if it ever really existed that way.
The truth of the matter is that no market is truly free, it's only relatively free from government restrictions, either at home or abroad. The freedom to trade was restricted by the navies and armies of opposing feudal and capitalist governments. The development of the capitalist system went hand in hand with restrictions by the capitalist state, because without them the capitalist organism could swallow up all social and political institutions and make impossible capitalist stability for any period.
Tariffs, quotas, customs duties, taxes of all kinds — all are restrictions on the free market. The market is never totally free, and needs the restrictions for its own development. This is a contradiction, but without this contradiction it could not develop.
The relatively free capitalist market existed until about the 1890s. The restriction of competition by each of the capitalist countries thereafter inevitably led to a forceable solution — the first imperialist war. At rock bottom its cause was the continuing restriction of the world market by capitalist England against rising capitalist Germany, which was more efficient technologically and industrially.
The epoch of free trade in the U.S., as in the other capitalist countries, is to a large extent a fiction. The growth of monopoly overtook free trade, which brings us to a consideration of the role of the banks in the U.S. They're supposed to be the freest of all in the firmament of the capitalist economy. Yet since their earliest days, their tendency is to restrict the untrammeled forces of competition in banking and finance.
How did the Federal Reserve system evolve but as a state capitalist instrument for moderating competition in the financial markets? This gives more and more leeway to the largest banks, allowing them to consolidate by swallowing up the small ones. The largest banks have the greatest say in the Federal Reserve, and indeed in the Treasury of the United States.
The capitalist crisis of the 1930s, which followed the stock market crash, made it abundantly clear that the various restrictions and prohibitions calculated to limit the freedom of the banks to borrow were only minimal and were inadequate to prevent a collapse of the banking system as a whole. It was therefore incumbent on the Roosevelt administration to reconstruct the banks and the financial system. Thus began the new epoch of the regulation of the banks and financial institutions. It led to the birth of the FDIC and other instrumentalities of regulation.
This seemed to suffice until the capitalist crisis that began in the late 1970s during the Carter administration. With the very severe recession of 1982-84, there began the epoch of deregulation, of loosening all restrictions, as a means of solving the capitalist economic crisis.
While there has been a great deal of literature on the deregulation and privatization of companies and segments of entire industries, little attention has been paid to the deregulation of the banks. The latter opened wide the doors to anyone and everyone to set up a savings bank. They could, on the basis of the government's guarantee on deposits up to $100,000, garner in millions with only the most minimal amount of capital and legal reserves and the most perfunctory supervision. The individual entrepreneur, with few funds but good connections, could get a loan from the banks to start a bank! This was an immediate cause of the financial catastrophe that is emerging.
A hundred years ago, a banking crisis growing out of such gargantuan S&L bank failures would have resulted in an immediate financial crisis and the closing of banks, the suspension of capitalist production, and unemployment on a mass scale. Despite terrible hardships for the workers and oppressed masses, it would have nevertheless run its course without posing a dangerous class conflict or threatening the existence of the capitalist government.
Only the October 1929 stock market crash, followed by the near-collapse of the capitalist system, posed such a danger. It took several years and extraordinary social improvements, the product of near-revolutionary struggle by the workers, to ease the crisis, which was not really overcome but was diverted by the Second World War.
Such a crisis is now in the making. That's what the ruling class is grappling with. The current recession, while a severe burden on the workers, with homelessness, cutbacks in city services, and so on, is not the crisis as such. It is merely a harbinger of what is in store. Never before has there been such a vast accumulation of problems arising out of the administration of artificial stimulation to the capitalist economy.
Some segments of the financial community have resorted to really desperate measures, as shown by the indictments which came down a few years ago against Bank of America and other big banks for drug-money laundering on a mass scale.
Government inspectors have time and time again demanded that more banks be indicted. But the government has instead tried to cool the general public with the "Just say no to drugs" PR scheme and then by diverting attention to Panama, which meant embarking on a cruel invasion, the destruction of the government and the kidnapping of its leader. The end result is that the banks have free rein to deal in the drug trade.
The capitalist crisis is worldwide in character. This is not adequately conveyed by the capitalist press. However, on April 16 the New York Times finally had this to say: "A year ago as the U.S. was sliding toward recession, many European officials boasted that the European Community, spurred by German unification, would take over as the locomotive of the world economy. Instead, today Western Europe's economy has stalled with the Persian Gulf crisis pushing much of the Continent, already weakened to the brink of recession."
Thus, while many multinationals ran to Europe as a haven from the capitalist crisis in the U.S., they found the opposite was true. Furthermore, the swallowing up of the GDR by imperialist West Germany has placed a heavy financial burden on Germany as a whole and accelerated its economic decline. This has diminished the presumed role of the FRG as a lender of funds to the USSR.
The high hopes and tall promises immediately following the destruction of the GDR as an independent country have fallen on bad times. Now the Bonn government is looking for a way for the World Bank and the IMF to play a role in the unification — all the result of the attempt of German capital to play the role of supreme organizer of Europe.
The money laid out for the Gulf War has further debilitated the German economy. So while U.S. imperialism is trying to make greater demands on Germany, the latter has come to Washington to make demands upon the U.S. It all heightens the contradictions within the imperialist camp.
All of this seems to hinge on the development of the European Economic Community, which is supposed to become the example par excellence of a community organizing a free market. However, it is anything but free from the multinational corporations. At the present moment, it is the site of a ferocious struggle between Ford and General Motors, in which for the first time in years Ford is losing ground to General Motors while the latter is losing its market share in the U.S. as a result of the recession.
Nor is there the least letup in the ferocious competition inside the European Community among the giant corporations, first of all the auto manufacturers of France, Germany, Britain and Italy. This competition will not enhance the purchasing power of the broad mass of the workers of the European Community but will add to the oncoming cutbacks and layoffs.
The only question is whether they can use the EEC to ward off the sharp competition from Japan. Edith Cresson, the new French Prime Minister appointed by Mitterrand, has opened up a racist attack upon Japan of the type prevalent in the U.S. just a few years ago. But this will not diminish the competition.
The widest and deepest impact of the economic crisis on the masses is seen on the Indian subcontinent. The economic devastation has heightened the political struggle and the struggle of the workers and peasants to the highest level since independence. It is the fear that India may be in the midst of a pre-revolutionary crisis that at least in part has impelled the Pentagon to dispatch a military instead of civilian relief mission to Bangladesh. It is also done with a view to sharpen the antagonisms between India and Pakistan. Even more, it is calculated with a view towards eliminating the special relationship which has existed between India and the USSR both as trading partners and as allies in what at least until now has been partially an anti-imperialist alliance.
This growing world crisis has propelled the U.S. military-industrial complex, its politicians and bankers, to extend U.S. dominion on a truly global scale. To do this they have embarked upon a military program which will far, far exceed anything that has been seen before.
Their plans conjure up an Orwellian picture of U.S. domination in every corner of the earth. Instead of retrenching, instead of cutting back the military establishment, they are proceeding in the very opposite direction. They are laying the groundwork for this attempt by fortifying their military capacity. ("Now that we're the only superpower in the world, we can do what we want.")
The result is political pressure to try and extinguish the contradictions which continue to rend asunder the world capitalist economy while forcibly constructing a coordinated, integrated world economy in which the U.S. is the central player and dominant force. That's the new world order, in economic terms.
Where is there any hope that the financial crisis can be ameliorated? Where is there any realistic expectation that the contradictions arising from the search for super-profits can be solved on the basis of establishing a so-called coordinated global economy?
Look at the vague and generally unenforceable agreement arrived at by the General Agreement on Tariffs and Trades after three long years of squabbling. It was finally torpedoed by the U.S. government itself. If there ever was an object lesson in the failure of the bourgeois order to sponsor world economic cooperation, this was it. It was doomed to failure from the beginning.
The new world order scheme is buttressed by a new U.S. military strategy which is shifting to large-scale mobile forces capable of reaching any corner of the earth's surface in the shortest time with the most sophisticated military equipment able to repeat and improve on the kind of devastation caused in Iraq.
This strategy goes back to the days of the rapid deployment force during the Carter administration, and has steadily been updated. It engages the eagerness and the aptitude of the principal arms manufacturers of the U.S., notwithstanding the poisonous competition among them.
They're saying that the cold war is over, that communism has been defeated, that the principal enemy has been vanquished. So why then is it necessary to launch an unprecedented military program? It is of course for military purposes. But for what other purpose? The whole program is to avoid a recession.
Why did the Department of Defense sign a contract for a new plane — the F-22 — to replace the F-15 Eagle, which is the Air Force's primary fighter? It will cost an estimated $95-$100 billion for 650 planes, according to the May 14 Science Section of the New York Times.
The contract is awarded to Lockheed, which will share it with General Dynamics and Boeing and keep in business several hundred subcontractors. Will the losing bidder, the Northrop Corporation, and its team of contractors, which includes General Electric, quietly close their tents and go out of business because they lost a $95-$100 billion contract after years of planning for it?
No one with the slightest knowledge of the military-industrial complex, the poisonous competition for profits, and the enormous clout of these companies within the inner circles of the government will believe that one of these giant pillars of militarism will suddenly go out of business. That is sheer nonsense. A consensus among the giants in the U.S. weapons business will find a way for the losing bidders not to convert to peaceful production but to reengage in the weapons business. It is the most lucrative of all, especially when there's a most eager procurement arm of an even more willing Defense Department and president.
The B-2 stealth bomber, which is now in production, will cost another $70 billion. What are they preparing for? The Defense Department is at wit's end trying to prove there's a need for all this.
Why, for instance, was it so urgently necessary that military forces, without being requested, bring relief to Bangladesh? Wasn't one of its real objectives to show the value of an up-to-date, speedy, most efficient and technologically developed military force? And what about the cynical game the Pentagon always plays when it needs increased expenditures — scaring the wits out of small-town officials with base closings, that raise the specter of ghost towns?
The destructive firepower used by the U.S. military against Iraq, on a magnitude greater than that dropped on Hiroshima and Nagasaki, has given wide currency to the illusion that sophisticated high technology is decisive for military victory. This is just a caricature of the Marxist concept on the role of the productive forces in determining economic, social and political conditions over a period of time. It is the productive forces which ultimately change class relations and lay the basis for a transition from a lower to a higher social system.
But to say that high technology, which is a productive force, is decisive in modern warfare, while leaving out the fact that the masses are the greatest productive force, is not only to accept the braggadoccio of the imperialist military but flies in the face of historical experience.
High technology is decisive where there is a social equilibrium between the warring classes or warring nations and the only fundamental difference lies in a superior weapons system. That is not what happened in the Gulf War. Had the political situation been more favorable for the oppressed, then the military outcome would also have been different.
The Gulf War was carried out by a collective of all the imperialist powers. They knew each and every modern factory, every power plant, every weapons system in Iraq, down to the last nut and bolt. That's one fundamental difference.
The other difference lies of course in the large number of people the imperialists were able to mobilize in the West against a tiny country. The masses in the imperialist metropolitan countries remained passive during the war, while Iraq's urgent appeals to the masses on the Arabian peninsula for revolutionary support and a struggle against the puppet regimes received a limited response. Under these circumstances the vicious blockade, which was as tight as a drum, was decisive.
These factors were not decisive, however, during the imperialist intervention against the Russian Revolution in 1919-21. The 14 invading imperialist powers had infinitely higher technological resources than the new Soviet government. But the adventure proved a failure. The revolutionary workers and peasants were more than a match for the technology and forces gathered by the imperialists.
The Korean War proved the same thing, especially because it got internationalist support from the People's Liberation Army of China and material assistance from the USSR. And of course the Vietnamese struggle was a magnificent demonstration of the efficacy of people's war against a technologically vastly superior imperialist enemy.
The Gulf War provoked a new round of deadly competition in the military-industrial complexes of the imperialist countries in the further development of high technology, particularly in missiles. The competition for a more accurate class of Patriot missiles will cost hundreds of millions of dollars in order to forestall a new generation of SCUD missiles.
The French, whose Exocet missile proved itself in the Malvinas (Falklands) war, and was used in a limited way in the Gulf war, will unquestionably spend more millions of francs to make it the preferred missile in the arms market.
In order to garner public support for a new round of military spending, the capitalist press is reviving the old scare story regarding the USSR, China and the Third World. There may be plenty for them to think about as to whether the capitalist reforms ever will succeed in overturning the socialist basis of the USSR, but in the meantime it is necessary to make sure that it is still seen as the enemy and a continuing threat.
So what do we find at this particular time, when the banking system is moving towards a bankruptcy crisis, possibly evoking the specter of another 1929? We find that Bush, in his search for a new CIA director, has come upon Robert Gates. Gates is one of those real insiders who for long periods of time rarely appears in public. He's a specialist on the Soviet Union best known for his hard line on the USSR and whose merit, says Zbigniew Brzezinski, is that he "had a very skeptical prognosis for Gorbachev when the Reagan administration was plunging into a love affair with him" (New York Times, May 15).
Gates, says the Times, "regarded the East-West competition as a fundamental struggle over the roles of citizens and states." This brings back memories of the cold war at its very worst. In florid language, the struggle was characterized as between the state and the individual. Of course in the West, said these great analysts from their Olympian heights, the individual is primary and the state serves the individual, while in the Soviet Union it is the reverse.
Gates is just the type of man for that philosophical view. In a paper he delivered in 1983, Gates asserted that the struggle between the U.S. and the USSR is not just "over weaponry or markets or a misunderstanding from World War II." What was it about? "The threat posed by the Soviet Union — by Russia — is the lineal descendant of the same threat Western civilizations have faced for three and a half thousand years: It is the threat posed by despotisms against the more or less steadily developing concept that the highest goal of the state is to protect and foster the creative capabilities and the liberties of the individual."
Who are these individuals? The millions who are homeless, who've lost their jobs, who have no health care or hope for a decent education? Does he mean the individual workers, who make up the bulk of the population?
We are now back to the McCarthy period in foreign affairs, for the language is that of the Dulles brothers — John Foster Dulles, the Secretary of State, and his brother Alan, the CIA director — spoken in the same philosophic-religious cant. It evokes the image of the Eastern "hordes," beginning with the invasion of the Mongols. It includes China and all Asia, and by extension Latin America and Africa as well. That is why it is necessary to have a military strategy to shift large-scale mobile forces on a regional basis.
This was the kind of thinking that led the Nazi commanders to believe they could overwhelm the USSR in 1943 at Stalingrad, but instead they were swallowed up by the resistance of the Soviet masses.
What remains elusive for the bourgeoisie is that definitive victory of capitalism over socialism which would bring in its train the huge super-profits they so desperately seek.
Look at what is happening in Congress. They're haggling over a billion and a half dollars in credits to the USSR, so it can purchase grain. And whose grain? Not from Australia or Argentina or Europe, but from the United States. Yet it will take virtually all the arms of the capitalist state to push the grain deal through, if it ever happens. What is the insurmountable obstacle?
Before Gorbachev took over, the USSR was the most credit-worthy nation on the face of the globe. It met the supreme requirements as far as the banks are concerned. It could pay the interest on time and the principal on demand.
All lending transactions boil down to this: Can the debtor make timely payments on the interest and/or principal?
The USSR is now in debt to the tune of some $50 billion. (It's hard to get an accurate figure.) That in itself, however, would not be a big problem for such a vast country blessed with so many natural resources — a super-rich country, as Boris Yeltsin calls it.
What is so remarkable is that it is unable, at the present time, to pay either the principal or — and this is vital — the interest. That is why both Gorbachev and the restorationist grouping are making a desperate plea to the G7 for something in the nature of $30 billion, and are willing to put portions of the industrial, technological-scientific, and maybe even the military establishment in hock as collateral security for the loans. This is insanity. It is the action of a desperate grouping unable to find a way out except through the pawnbroker.
But the pawnbroker, with his vast experience in extortion, must always know where and when to extend the cash. The oligarchy of international capitalist finance is holding back. And this time it's not for political reasons. It's due almost wholly to the ordinary processes of capitalist investment. If the USSR cannot pay the interest after the imperialist banks have loaned them some $50 billion, how could they pay back on another installment of $30 or more billion?
The USSR is not an underdeveloped country. Right now, Soviet astronauts are circling the globe and have taken along a British astronaut (Britain not having a space industry). It's a highly developed country, but it has been vastly mismanaged and wrecked by a bourgeois grouping intent on establishing a capitalist social order.
Now voices are being heard from the USSR saying they cannot institute a capitalist order of society without imperialist financial support and intervention. Originally, the transformation to a capitalist system was to be a do-it-yourself project. The imperialist ruling classes were only to give encouragement, make sure they did not militarily obstruct the progress, and lift the most onerous economic restrictions.
But now the bourgeois grouping is begging, "We need your support." The capitalists, on the other hand, are saying, "We can supply you with some loans, but you must pay back the interest and principal on time."
Imperialist investments have to bring in super-profits, not in the dim future, but on a quarterly basis. Failing all that, the capitalists are having second thoughts, much to their own surprise. The very objective of all the counterrevolutionary activity was to begin a process that would end with maximum super-profits. But this prospect is dimmed by the inability of the bourgeois stratum in the USSR to overturn the system on the strength of its own forces.
What U.S. imperialism and the European capitalists are beginning to realize is that what they would acquire in a new, "free" Russia would be another Brazil, made even more difficult by the fact that it is a highly industrialized country.
From the immediate point of view of super-profit, it's not there. The imperialists would gain a victory only from the point of view of the sociological or geopolitical struggle. But from the point of view of profit and loss, it is another Third World, debt-ridden country. And most of the debt has accumulated just in the past six years, since Gorbachev took over.
How dismayed are the bourgeois economists, like Grigory A. Yavlinsky, one of the authors of the 500-day conversion plan, who is now at Harvard University drafting a program with which he hopes to enlist the support of the Group of Seven. Says the New York Times (May 22), "Mr. Yavlinsky insisted that money was not the critical issue. ... Nonetheless, money was likely to be the sticking point among the Western powers, however sympathetic they might be to the greater goal. With the United States in recession, Germany facing huge bills for its eastern part, and bills from the Persian Gulf war still coming in, the notion of pumping billions into the Soviet Union met with little enthusiasm."
The bourgeois intellectuals and economists in the USSR thought, once their plan for restructuring went through, that they'd be able to put across the capitalist reforms without any negative response from the masses. But once the price increases and unemployment were felt, so was mass resistance.
Their next thought was to get the West to lend them the capital, so they wouldn't have to take on the masses. Hence, Gorbachev's appeal in the United Nations in September 1988 about universal human values, how all trade restrictions should be removed, etc. Some of the big so-called private commercial banks did lend money, about $50 billion, but it didn't help.
So a big struggle is opening up in the USSR. It's a quagmire for the imperialists, especially since it comes in a period of great economic crisis for them.
This gives the working class in the USSR time to reorient itself. It means there is time for a new leadership to emerge. The decisive struggle is still ahead.
Last updated: 19 February 2018