Without correct perspectives it is impossible to conduct fruitful revolutionary work. This document makes the case that we have entered the most turbulent period in world history. One shock after another is shaking the system to its foundations. The world situation is characterised by extreme instability, which is a reflection of the impasse of the capitalist system on a world scale.

[Editor's Note: This document was discussed, amended and voted in July by the 2006 World Congress of the International Marxist Tendency. Most of the text was originally written as a draft in October 2005 in preparation for the Congress. In the process of discussion it was redrafted in February and then amended in July. This has to be taken into account when reading it. For example the section of the document on Mexico was written long before the great revolutionary events that have been unfolding over the past couple of months. The document actually predicted that such a movement would break out if the ruling class attempted electoral fraud. September 2006]

Introduction

Politics is the science of perspectives. Without correct perspectives it is impossible to conduct fruitful revolutionary work. The present world situation entirely confirms the general line of our perspectives worked out in previous world perspectives documents. It may be necessary to correct this or that detail, but the fundamental analysis of the period through which we are passing has been confirmed by the march of events. This should strengthen our confidence in the ideas of Marxism and in ourselves.

It is a supreme irony that so many have abandoned Marxism - some explicitly, others implicitly - precisely when history has vindicated its main postulates in a laboratory fashion. The bourgeois, the reformists, the Stalinists and the sects, have not the slightest idea of the real processes at work on a world scale. It is not an accident that most other tendencies are in a state of utter confusion, pessimistic and sceptical. The strategists of the bourgeoisie - especially in the USA - have no real perspectives. In the words of Trotsky, they are tobogganing towards disaster with their eyes closed.

We have entered the most turbulent period in world history. One shock after another is shaking the system to its foundations. The world situation is characterised by extreme instability, which is a reflection of the impasse of the capitalist system on a world scale. The world has been plunged into a maelstrom of conflicts, wars and terrorism. The counter-revolutionary tendencies in the present world situation are obvious. They are an expression of the fact that a socio-economic system that has outlived its historical usefulness and become a barrier to human progress is struggling to maintain itself. The old system is hopelessly diseased but refuses to die. This is a common phenomenon to students of history, especially the period of the decline of the Roman Empire, which furnishes many analogies to the present period.

However, the death agony of capitalism inevitably gives rise to its opposite. Beneath the surface, revolutionary tendencies are maturing. Revolutionary developments are implicit in the whole world situation. Everywhere we look we see an enormous ferment. At different rates, and in different ways, this will find its expression in the consciousness of the masses and be manifested in all kinds of social and political crises and explosions.

If there were mass organisations with a clear revolutionary policy and with authority in the eyes of the working class or at least its vanguard, the process would be shorter and less convulsive than it is. The price paid by the human race would be immeasurably less in terms of death and suffering. But there is nothing similar to the Communist International in the days when it was a genuine revolutionary instrument under the leadership of Lenin and Trotsky. The central problem is that those mass organisations - communist, socialist and trade union - that were created by the working class to change society have been converted into powerful obstacles in its path. In the words of Leon Trotsky, the crisis of humanity can be reduced to the crisis of leadership of the proletariat.

The absence of the subjective factor, the revolutionary party and its leadership, does not signify that revolution is off the agenda. It only means that the crisis will be long drawn out and extremely convulsive. The capitalist class may succeed in "solving" the crisis temporarily, at the cost of imposing further intolerable burdens on the shoulders of the masses, intensifying exploitation and plundering the planet. There will be temporary lulls in the class struggle, resembling periods of uneasy truce in a war, but no genuine and lasting equilibrium can be restored. Every lull in the class struggle will only be the prelude to new explosions.

This instability exists at every level: economic, social, political, diplomatic and military. It is expressed in the volatility and nervousness of the bourgeoisie internationally. There is enormous volatility in the world economy. The violent oscillations in price of oil is a symptom of this instability, which in part is an expression of the political and military convulsions in the Middle East following Bush's Iraq adventure. Three years after the invasion of Iraq, the insurgency is increasing in scope and intensity. But the nervousness of the bourgeoisie is based on other, and more serious, calculations.

Different historical periods

Lenin once said that politics is concentrated economics. However, it is not possible to reduce politics to mere economics. The economic cycle has considerable importance. Indeed, in the last analysis it is decisive - but only in the last analysis. In his 1924 preface to The First Five Years of Communist International, referring to the situation in Germany, Trotsky explained:

"Today more than ever we are obliged to follow attentively the fluctuations in the commercial and industrial conjuncture in Germany and the way in which they are reflected in the living standards of the German worker.

"It is economics that decides, but only in the last analysis. Of more direct significance are those political-psychological processes which are now taking place within the German proletariat and which likewise have an inner logic of their own." (The First Five Years of Communist International, vol. 1, p.7).

Marxism has nothing in common with economic determinism, which attaches an almost exclusive importance to the question of the economic cycle. What is first necessary to understand is that the nature and effects of the economic cycle vary at different stages of capitalist development. The booms that accompanied the period of capitalism's historical upswing are not at all similar to those that occur in the period of its senile decay.

There are periods of capitalist upswing during which booms are prolonged and recessions short and shallow. Such a period was the period of twenty years or so before the First World War and the period that followed the end of the Second World War. These periods are characterised by full (or relatively full) employment, rising living standards and a softening of the class struggle. They are the classical periods of reformism. Such periods transmit a definite type of bourgeois ideology that extends from the ruling class and its ideologues through the ranks of the middle class and into the working class itself. There is a general feeling of confidence, that all is for the best in the best of all possible worlds, that today is better than yesterday and tomorrow will be better than today. In such periods the revolutionary tendency will inevitably find itself isolated and weak.

The period that followed 1945 showed, perhaps for the last time, what the capitalist system was capable of. This was a colossal fireworks display of economic growth, with full employment and rising living standards at least in the advanced capitalist countries of Europe, Japan and North America. It was a period of reforms and concessions, leading to an amelioration of the conditions of the masses and a lessening of the class struggle in the developed countries, although the situation in most of the undeveloped world was completely different.

In the period 1948-73 the annual rate of growth of the world economy (based on fixed dollars of 1990) was five percent. World trade was also expanding rapidly and acting as a stimulus to the development of the productive forces. In the same period the annual increase in world commodity exports was 7.4%, and that of world manufacturing exports 9.8%. This was a prolonged period of capitalist expansion that lasted until the first serious world recession in 1974.

However, since then the capitalist system has not managed to recover anything like the same results. Whether we take growth rates, profitability, productivity, unemployment, or any other index, the results are generally worse. Between 1973 and 1998 the average annual growth rate of the world economy was 2.9%. In the period 1990-98, the most significant period of economic growth since 1973, it was 2.6%. If we consider world trade, the average increase of world commodity exports in 1973-1998 was 4.7%, and that of manufacturing exports 5.9%. In 1990-98 the corresponding figures were 6.5% and 6.7% respectively (figures from the WTO).

But we must also recognise that during both periods the main beneficiary of this growth has been the ruling class, which has increased its economic strength at the expense of the working class, whose situation has become increasingly precarious, as the following figures demonstrate:

Annual rate of wage rises, in real terms, in the USA

1959-1973: 2.9%

1973-1999: 1.7%

Annual growth in profits, in real terms, of the 500 companies of the S&P (USA)

1961-1968: 6.7%

1991-1999: 15.9%

These figures demonstrate that this process of polarisation has deepened in the period following 1973, and this weakens the social reserves of the capitalist system even more

In the period after 1945 the growth of world trade was the most important locomotive for the world economy. But in recent years there has been a slowing down of the growth of world trade. World trade in 2000 grew by more than 10%, but in 2001 it was a mere 1,5%, in 2002 2% and in 2003 just over 3%. In the past two years the rate of growth has recovered (5% in 2004 and 8% in 2005), fuelled by the impetus of the Chinese economy. However, the role of world trade at the present time is very different from the role it played in the 1980s and 1990s, when annual rates of growth reached 12, 13 and even 15 per cent, reflecting the alarming underlying crisis of overproduction within the world economy.

Pressures of capitalism

Under conditions of capitalist upswing, reformism was the dominant trend in the workers' movement, and the right wing was dominant in the reformist camp. The pressures of capitalism bore down on the labour movement from the tops, setting the seal on the reformist degeneration of the mass workers' parties ("communist" as well as social democratic). The illusion was created that capitalism had solved its problems and revolution was a thing of the past. Under these conditions the genuine current of Marxism was isolated and reduced to a small minority for a whole historical period.

Now, however, the situation has changed into its opposite. The capitalist system is displaying all the symptoms of senile decay. It has lost its equilibrium and cannot return to it. As we predicted in the last world perspectives document, every attempt to restore economic equilibrium inevitably destroys the political and social equilibrium. This is now a fact that can be observed worldwide.

The present boom is based on unsound foundations. The whole world is dependent on the USA and now, to a lesser extent, on China. But the present feverish rate of growth in China is unsustainable and prepares the way for a serious crisis of overproduction. The US economy is characterised by unprecedented indebtedness at all levels. Such a situation in any other country would long ago have led to a slump. Only the fact that the USA is the world's mightiest and wealthiest economy allows it to continue on this road. But this cannot last indefinitely.

The character of the present boom bears no relation to the booms of the past. It has not led to an improvement in living standards. On the contrary, it is based on a general intensification of exploitation, longer hours of work, speed-ups and cuts. That is the position even in the advanced capitalist countries. In the United States, the present generation will be the first since the end of the Second World War which cannot expect an improved living standard. The attack on pensions is a general phenomenon. They are saying, in effect: work until you drop dead. It is a return to the mentality of 19^th century capitalism. The smiling mask of reformism has been discarded to reveal the ugly face of capitalism, the law of the jungle that is known as "free market economics".

Everywhere there is an enormous increase in inequality. The rich are obscenely rich, while a growing layer of society, even in the richest countries, are sinking into absolute poverty. This is a consequence of the process of the concentration of capital predicted by Marx. The reformists claimed that this was a thing of the past. But the monopolisation and concentration of power and wealth in a few hands has never been so extreme as now. The predictions of Marx have come into existence in what can be described as laboratory conditions.

This is gradually producing a mood of discontent and a growing questioning of the system, especially among the youth. This is true both in the USA and in Europe and is reflected in the mass so-called anti-globalisation protests and the huge demonstrations against the war in Iraq. These are the first symptoms of a growing revolutionary tendency among the youth. And hanging over the situation is the threat of a new world recession.

With the exception of China, the rates of growth in the advanced capitalist countries are extremely sluggish. The USA, it is true, has managed a 3% growth rate, but it suffers from serious imbalances, as we shall show, and it is not certain that it can maintain this rate of growth for long. On the other hand, the EU's rate of growth is only 1.8% (or more likely 1.5%). Italy's growth is a mere 0.2%. And this is what they call a boom!

Parasitism of the bourgeois

Marx pointed out that the ideal of the bourgeois is always to "make money from money", expressed in the formula: M-M1. Whereas in the past the bourgeoisie developed the means of production and therefore played at least a relatively progressive role, this is no longer the case. Increasingly, the capitalists seek to make easy profits through speculative activity, dispensing altogether with the painful necessity of producing. With the exception of China, where there has been an enormous development of the productive forces, the capitalists have not been investing in production to the same extent as they did in the past. The figures for global Foreign Direct Investment (FDI) for the period 1999 to 2003 are as follows:

1999: 1.08 trillion dollars

2000: 1.38 trillion dollars

2001: 817 billion dollars

2002: 678.8 billion dollars

2003: 559.6 billion dollars.

This shows that in 2001 there was an actual fall in FDI of 41%, in 2002 of 17% and in 2003 of about 17%. Furthermore, when we look at the figures for FDI into the United States we find that in 2003, there was a fall of 53% - the biggest for 12 years. In Central and Eastern Europe there was a fall in FDI of 30%, in the EU of 20% and in Japan of 35%. China is the exception, being the country with the biggest inflow of FDI. [Source: UNCTAD 2004 Report] In its report for September 2005, the IMF warned that "despite the strong increase in business profits, investment performance has been generally weak", and it called for a change of strategy: "Until now world growth has been sustained by the increase in consumption, but it is now time to shift from growth based on consumption to growth based on investment".

In their search for easy profits, the capitalists have engaged in a new orgy of takeovers, which almost always end in factory closures, asset stripping and sackings. In the first few months of 2005 there was a 40% increase in takeovers, with a total value of 1,657 trillion dollars. The IMF tries to present this as "economies of scale which permit a reduction of fixed costs". This is euphemistically known as "creative destruction". In reality there is nothing creative about it. It amounts to a kind of modern Luddism, except that in the early years of industrial capitalism it was the workers who wrecked machines, whereas now it is the capitalists themselves.

Even where the capitalists are making big profits they do not invest in developing the productive forces in their own countries. In an article safely hidden away in its back pages, The Economist (25th February, 2006) commented: "Today, however, corporate profits are booming in economies, such as Germany, which have been stagnating. And, virtually everywhere, even as profits surge, workers' real incomes have been flat or even falling. [...] Firms in Europe are delivering handsome profits [...]. In the past two years, the earnings per share of big listed companies have climbed by over 100% in Germany, 50% in France, 70% in Japan and 35% in America despite the latter's faster GDP growth. [...]

"Secondly, and more worrying, the success of companies no longer guarantees the prosperity of domestic economies or, more particularly, of domestic workers. Fatter profits are supposed to encourage firms to invest more, to offer higher wages [!] and to hire more workers. Yet even though profit's share of national income in the G7 economies is close to an all-time high, corporate investment has been unusually weak in recent years. Companies have been reluctant to increase hiring or wages by as much as in previous recoveries. In America, a bigger slice of the increase in national income has gone to profits than in any recovery since 1945." (Our emphasis)

Instead of developing the means of production, the capitalists are engaged in a carnival of destruction on a world scale. We have given some examples, but the reality is that hundreds of thousands of jobs are being destroyed in the productive sector and being replaced in the main by an expansion of parasitic "services". Those workers who retain their jobs are required to work longer hours in worse conditions and often for less pay. There has been a savage bosses' offensive aimed at increasing profits at the expense of the workers. It is a universal phenomenon.

Let us take a few random examples. In the last few months Telstar, Australia's leading telecoms firm, has cut 12,000 jobs, while Deutsche Telekom has slashed 19,000 jobs. The pharmaceutical company Merck announced a three-year restructuring plan, with the loss of 7,000 jobs. Volkswagen has warned that 20,000 jobs could be affected by its restructuring plans. France Telecom announced the loss of 17,000 jobs over the next three years. There are many more examples. There are constant attacks on the workforce, which are infuriating the workers. Strikes and protests are on the agenda, as we see already, not only in GM but also with the New York transit workers. The Boeing workers have also struck against proposed changes to benefits. Others will follow.

This is the only kind of boom you can expect during the present period. The question must be asked: what will happen when there is a slump? It is clear that a serious slump is being prepared. The timing cannot be established with any degree of certainty. Economics was never an exact science and never will be. At most it can establish general trends. But that is not the point. The effects of capitalist crisis are making themselves felt right now. The capitalists attempt to increase their share of the surplus value at the expense of the workers. This can be seen everywhere. In every country the share of the workers in the national wealth is declining, while the share of the capitalists is increasing.

The capitalists have maintained profits, on the one hand by expanding both relative and absolute exploitation and on the other hand by increasing participation on world markets, a greater intensification of the international division of labour (or "globalisation", as they call it). This has temporarily assisted them. That is why the two world recessions that have occurred since 1987 have been quite mild affairs, compared to the four deeper recessions of the previous 18 years. But in economics, the past is no indication of the future. The fact that the last two recessions were shallow does not mean that this will apply to the next one. On the contrary, everything seems to indicate that enormous contradictions are preparing way for a serious slump when it arrives.

The serious bourgeois economists are drawing parallels with this situation and the early 1970s, when the soaring price of oil (also as a result of a military adventure in the Middle East) provoked the first real world slump since the Second World War. The increased price of oil was not (as vulgar economists claimed) the cause of the slump, only the "last straw", or the catalyst, to use a term from chemistry, that brought to a critical point tendencies that had already been prepared in advance.

Sickness of US economy

For years and decades, contradiction upon contradiction has been piling up. In the USA, the so-called American Dream - work hard, get rich - has been exposed as nonsense. In the first decade of the 21^st century, American capitalism is not a dream but a nightmare for millions of people. The real face of US capitalism was shown by Hurricane Katrina. The existence of an underclass of poverty-stricken people in the richest country in the world was carefully concealed from the world. It took an accident like Katrina to expose the rotten heart of US capitalism. The rest of the world was shocked, but in reality we have a similar situation developing everywhere, as we saw in the French youth riots.

One of the most significant countries where we can see the outbreak of class struggle is the very heart of world capitalism: the USA. After decades of attacks on the rights and working conditions of the working class, and after the initial uproar provoked by the terrible attacks of September 11th, the US working class is beginning to awaken. In the past few years we have seen very important struggles: the dockers, the hotel workers' strike in San Francisco, Wal Mart, American Airlines, the New York subway, the car industry... These have been long and hard strikes, and demonstrate the enormous discontent and the accumulation of combustible material preparing the way for an explosion of class struggle.

The nature of this new period has been brilliantly shown in the magnificent struggle of immigrants, mainly Hispanics, which has rung serious alarm bells for the US ruling class. Immigrant workers are a very important section of the US working class. They are the majority in sectors such as transport, agriculture and the hospitality industry. The historic demonstrations of millions of workers at the end of April, and the ‘general stoppage' of 1st May are having an important effect on the entire US working class. To this we must add the psychological effects of the war in Iraq and which Hurricane Katrina had at the time. The outbreak of class struggle in the US will have tremendous repercussion, above all in Latin America, just as the revolutionary events in Latin America are having a profound effect in the US. Just as in the 1970s with the Vietnam war, once again the biggest enemy of the US is not outside its borders, but within them.

To prevent recession - since they were worried about the political and social effects - the US bourgeois have behaved irresponsibly from a capitalist standpoint. The Republicans, who formerly embraced the principles of sound finance, balanced budgets and a strong dollar, have thrown caution to the winds and are acting like a drunken libertine, gambling away the family fortune at the roulette table. The result has been a massive increase in credit, and unprecedented levels of state, business, and personal debt. No other country could get away with this. The IMF would be knocking on the door demanding austerity measures. Only America's special position as the world's most powerful nation has saved it. But this situation cannot be continued indefinitely.

Marx long ago explained that the capitalists could avoid a crisis for a time through the use of credit. This serves to extend the market beyond its natural limits. But sooner or later this must turn into its opposite. The debts must be repaid with interest. Thus, the expansion of credit increases the market in the short term only at the cost of reducing it sharply in the longer term. Greenspan, who was presided over this policy, has retired. The Economist on 15^th October 2005 asked the question: "would any sane man want to take this job?" The reason for this scepticism is that US capitalism is based on unsound foundations. Greenspan has left behind him a nice mess for his unfortunate successor to clear up in the shape of a huge budget deficit ("the Greenspan deficit").

The US economy is perched on a mountain of debt. Sooner or later, mountains experience avalanches. All serious economists admit that the USA is what is known as a bubble economy. To make matters worse, inflation is beginning to rise again in the USA. This raises the spectre of increased interest rates. But one of the main factors in prolonging the consumer boom in the USA (for which Greenspan was partly responsible) was the historically low rate of interest. This had the effect of expanding credit (and hence the market) but only at the cost of preparing a painful crisis in the future.

Greenspan created a situation where a series of increases in interest rates have become necessary. The Fed has increased interest rates eight times in the last 12 months. But this was a case of "too little and too late". It has done nothing to reduce the speculative bubble, or lower inflation, which reached four percent in 2005 - the highest rate since 1991. Short- term interest rates in the USA are therefore higher than in Europe, attracting money in spite of the colossal deficits. Sooner or later, high interest rates will puncture the consumer boom in the USA. This will have serious effects on the world economy. The European capitalists are already talking about increasing interest rates, although the economy of the EU is hardly growing at all.

The sickness of the US economy can be charted by the wide fluctuations of the dollar. The dollar, as we predicted, has experienced a steep fall. How could it be otherwise when the USA has a current account deficit of approximately $800 billion? What is more surprising is the fact that the dollar has partially recuperated. In the last few months it has gained 3.5% in relation to a broad basket of world currencies, and even more (14%) against the Euro. However, this situation cannot be maintained. It does not reflect the strength of the US economy but rather the weakness of the European economy. It can be reversed at any time, with a major outflow of foreign currency and a further steep fall of the dollar. There is now an extreme nervousness on the part of the bourgeois. Any shock, such as a sudden increase in oil prices, can spark off a bout of selling on world stock exchanges that can provoke a panic.

Sooner or later real life imposes itself over the speculative fantasies, puncturing the speculative bubble that finds its expression in overvalued property and share prices. In the given circumstances, a collapse of the speculative boom will have serious consequences for the real economy. Above all, it will lead to a severe slump in the housing and property market. Since building and related activities are the main element behind the boom in the US economy (together with consumption based on credit), this must lead to a sharp downturn in the real economy and a downward spiral that will be difficult to control.

We are already seeing evidence of overproduction in cars and mobile phones both in Europe and the USA. The automobile industry is still a very important industry in the USA. Many other industries depend on it. But all auto firms in the USA are in a deep crisis. General Motors is on the verge of bankruptcy. Ford and Daimler-Chrysler are not in much better shape. Delphi, the largest US suppliers of car parts, has gone bankrupt. All the major US car firms are furiously discounting. In September 2005 US car sales fell by 20% when compared to September 2004. GM's sales also fell by 24%. As a result of discounting, car sales are rising again, but profits are declining. This is not a sign of boom. Rather these are phenomena we normally associate with a slump.

A lot of the economic activity at the present time is not productive but speculative activity like the stock exchange boom, takeovers and the housing bubble. This does not benefit the economy and does not create an atom of new wealth. It acts as a monstrous bloodsucker, extracting the wealth created by the working class and siphoning it off into the pockets of the parasites. When the last speculative boom collapsed the bourgeois swore they would never repeat the experience. Like a drunk who has over-indulged at a party and wakes up with a bad hangover, they cried: "Never again! I've learned my lesson!" But the inherent laws of the system compel them to repeat these boom and bust cycles.

Of course, there is always a speculative element in every cycle. A speculative boom in real estate played a big role in the boom that preceded the 1929 crash. Before that there was the South Sea bubble in the 18^th century and the Dutch tulips scandal in the 17^th century. But this present bubble is the biggest speculative boom in history, bigger than 1929 and all the others. And the bourgeoisie will live to regret it. They are preparing a serious slump at a certain stage. The figures of the increase in house prices internationally in the period 1997-2005 in percentage terms are as follows:

South Africa: 244

Spain: 145

Britain: 154

Ireland: 192

Italy: 69

France: 57

Belgium: 71

USA: 73

Germany: - 0.2

Although the growth of house prices in the USA has been slower than some other countries, it accounts for a large part of the growth of US GDP over the last five years. To give an idea of the scale of the problem, the stock exchange bubble in the later 1920s, just before the crash of 1929 was the equivalent of 55 percent of total US GDP. In the last five years in the USA consumer spending and residential construction represented no less than 90 percent of total GDP growth. Over two fifths of all jobs in the private sector since 2001 have been related to housing. This situation is alarming the serious bourgeois economists.

The problem can be simply stated. In the last period there has been an enormous expansion of credit and debt. This is the basis of the consumption boom in the USA. A householder can owe more than what his property is worth. This is the way in which US capitalism has expanded the market far beyond its natural limits. But there is a small problem here: debts must be repaid, and house prices (and stock prices) can rise and fall, but debts are fixed. Sooner or later the gap will have to be filled. The present speculative orgy, like every other bubble in history, will inevitably end in a slump.

A housing market crisis will affect the real economy very seriously. Most economic activity in the USA in the recent period, one way or another, is connected to the construction industry. A sharp fall in the housing market will affect house building directly, and that is the main motor force for the present boom. But the indirect effects will be still greater. As credit becomes squeezed, consumption will be reduced. The high levels of consumer debt, which previously sustained the boom, will have the effect of sharply constricting the market and deepening the slump when it finally arrives. And the longer the moment of truth is delayed, the deeper the slump will be.

As in every slump, all the factors that propelled the economy upwards in the boom will turn into their opposite. Cause becomes effect and vice versa. The effects will soon be felt on the world market, precisely as a result of globalisation. When the US consumer stops spending, where will China sell its goods? And when the Chinese economy slows down, the whole of Asia will be affected immediately because its main market is now China.

Protectionist tendencies

Contrary to the prejudices of the bourgeois economists, globalisation is not set in stone. It can be reversed, just as it was reversed in the past. Before the First World War there was major globalisation. In some ways it was even more important than now. That was certainly true in terms of immigration and labour markets. However, this tendency was reversed in the interwar period. The slump turned into a prolonged depression, characterised by beggar-my-neighbour protectionist policies, competitive devaluations and so on.

Protectionism is in fact an attempt to export unemployment. In the event of a deep recession, with high unemployment, the main capitalist powers will attempt to solve their problems at the expense of other countries. The tensions between Europe and the USA, between the USA and China, which already exist, will become exacerbated. The whole fragile fabric of world trade will be put under enormous strain, preparing the way for protectionism and trade wars. This is implicit in the present situation.

The bourgeois thought globalisation had solved their problems. They imagined that they had discovered something entirely new. In fact, it was not new at all. Marx explained in the third volume of Capital how the development of world trade could temporarily prevent a crisis, but only at the cost of preparing an even bigger crisis in the future. In the last two decades the bourgeoisie has developed the world market on an absolutely unprecedented scale. This has undoubtedly helped the capitalist system to get certain results and explains the shallowness of recessions in the recent period. But the emergence of China as a major economic power is preparing new contradictions on a world scale.

It is certainly not a minor thing that 1,000,000,000 people should enter the capitalist world market, as has happened in the case of China. China has played the role that the capitalists had originally intended for Russia. It provided them with a vast field for the export of capital and commodities, new markets and investment opportunities. In other words, they saw China only as a market, but did not adequately understand the longer-term implications (capitalists tend not to think about the long term). By investing massively in China, they have created a mighty industrial rival that is now in a position to challenge them on world markets.

With cheaper labour costs, modern machinery and high productivity, China has become a formidable force on the world market. The enormous increase in Chinese exports of textiles to Europe caused a serious clash between the EU and China. Eventually, an uneasy compromise was arrived at. But the problem will not disappear. Shoe imports to the EU from China rose by 300% in the nine months from ending October 2005 compared with the same period of 2004. The demand for import quotas, especially from Italy, will become ever more persistent. Nor is the problem confined to cheap textiles and clothes. This economic giant has now overtaken the USA as an exporter of high tech. goods. In 2004 China exported $180 billion in high tech goods. The result has been a furious outcry particularly from the US capitalists. There is a growing protectionist mood in Congress, fuelled by congressmen whose position is being threatened by unemployment in their own states. Charles Schumer, the most vociferous representative of this group, put forward a bill that threatened to impose a 27.5% tariff on Chinese imports. He did not succeed, but it shows the direction in which the situation is moving.

From a Marxist point of view, the massive development of industry in China is a progressive thing because it develops the power of the proletariat. As long as the economy continues to grow, offering at least the perspective of future improvement, the masses will be prepared to tolerate the heavy sacrifices imposed upon them. But even an economic slowdown will be sufficient to bring all the hidden contradictions to the surface. According to official statistics the number of mass protests in China has risen from 10,000 in 1994, to 74,000 in 2004. These figures are still minuscule, but they are an indication that revolutionary developments are maturing in China. The class struggle in China can burst to the surface when the world least expects it.

The phenomenal growth of the Chinese economy has limits. A serious slump led by a crisis of overproduction China is now being prepared in which all the factors that served to propel the world economy forward in an upward and apparently unending cycle, will turn into their opposite. The movement in the direction of capitalism and the abandonment of a planned economy is preparing the way for a massive crisis of overproduction in China. Thus, whereas China has moderated the effects of the last two world recessions, it can now have just the opposite effect. Previously the West saw China as a gigantic market but it does not require much intelligence to see that if you build factories in China, they will start to produce export commodities in massive amounts. This is already happening and the Americans are increasingly alarmed by this.

There is now a ferocious struggle for even the smallest markets. This is threatening the future of world trade and undermining attempts to liberalise it. This explains the failure of every one of the world trade summit meetings: first Seattle, then Cancun. The same protectionist tendencies can be observed in the Doha round of talks on world trade. Here we see the complete hypocrisy of the demagogy about "free trade". The strong capitalist economies of Europe, Japan and the USA forced the weak countries of Asia, Africa and Latin America to open up their markets under the banner of "free trade". As a result, the native industries were decimated and whole nations ruined and forced into debt from which they cannot escape. But when the poor countries ask for free trade in agriculture, which would afford them some relief by giving their agricultural exports more access to the lucrative markets of North America, Europe and Japan, the doors are immediately slammed in their faces.

The deadline for the Doha talks is June 2006, at which point the permission of the US Congress for the negotiations expires. Yet no progress has been made. They are haggling like miserly peasants at a medieval horse fair. The main bone of contention is agriculture. Although this only accounts for three percent of total world output and less than ten percent of total world trade, it nevertheless accounts for 60% of the benefits of the Doha round. But the USA, Japan, and particularly the EU are not prepared to make meaningful concessions. They all put the interests of their rich farmers first. The US government subsidises its farmers to the tune of $19.1 billion, while the EU farm subsidies amount to a colossal $75 billion.

The growth of protectionism can be seen in the increase in the number of bilateral or regional agreements. In 2004 there were 206 such agreements, compared to only 89 in 1995. These bilateral agreements, which have been pushed hard by the USA, are an attempt to by-pass the WTO, which Washington sees as inimical to its interests. But other countries are following in the footsteps of the USA. The latest involves Asia, where China and ten other countries of South-East Asia are preparing a free trade deal that will affect 1,800 million consumers. The objective, which will probably not be reached, is to reduce tariffs for most products to zero by 2010. From this it is clear that China is laying claim to economic hegemony in Asia, which will inevitably lead to a direct collision with the USA, with not only economic but also military implications.

Europe

The most important question on which we must focus our attention is the political and social effects of the crisis of capitalism - the way in which this is finding a psychological expression among the masses. The events of the last twelve months alone have furnished us with a wealth of information in this respect. A serious political crisis is developing in one country after another. Everywhere there is the beginning of a ferment among the masses. In addition to the explosions of the youth in France there have been important strikes in one country after another. There is an acceleration of the process of radicalisation. We are witnessing the reawakening of the working class on an international scale.

From the point of view of the class struggle a deep slump is not necessarily a good thing. Sudden mass unemployment can cause a temporary paralysis of the class struggle. The workers are traumatised for a time, although this can later lead to factory occupations and the masses will begin to draw far-reaching political conclusions. The present situation, on the other hand, can and does act as a stimulant to the class struggle. There is feeble growth, but accompanied by high, persistent, organic unemployment. This is a boom at the expense of the working class, based on merciless pressure, closures, sackings, unemployment, speed-ups, and attacks on pensions. Everywhere the message is the same: "work until you drop dead."

The revival of the class struggle is seen most clearly in Europe. European capitalism is in a state of long-term decline, reflected in a low rate of growth and high rates of unemployment. In place of growth there is economic stagnation. The whole European project is starting to become unstuck. The row between Britain and France over the EU budget, and the debacle of the European Constitution, are only two symptoms of this fact.

The ambition of the EU to dominate all Europe up to the borders of the former Soviet Union has created new contradictions. Eastern Europe lags far behind the rest of the EU. Unemployment in Poland is officially 18 percent, and in reality far higher. Entry into the EU will solve nothing for these countries, but will place a severe strain on the EU itself. Countries like Poland and Hungary have a large and backward agricultural sector that cannot be easily integrated into the EU, where the Common Agricultural Policy is already absorbing huge amounts, imposing a severe strain on the budget and exacerbating the conflicts between France and her "partners".

The conflict between Britain and France over the budget centred on two questions: the British rebate and the CAP, which pays out a generous subsidy to France. The viciousness of the dispute exposed the underlying contradictions between the EU nations and exploded the myth of "European solidarity." Far from advancing to a European "super-state", the process towards European unity has been halted and is in the process of being reversed. Of course, the European bourgeois cannot accept the destruction of the EU, and the Euro may be maintained. But the original terms of the Maastricht Treaty are as dead as the dodo.

Britain, having lost her status as a world power, has been reduced to a second-rate country off the coast of Europe. Its decline is graphically illustrated by the so-called Special Relationship with the USA. The slavish subordination of Blair to Bush in all matters shows the complete impotence of Britain, which has lost most of its industrial base. Blair and Brown used to boast about Britain's economic success, based in market economics. But all that has evaporated. Its rate of growth is now no more than 1.5% - the lowest for 12 years. The clash with France ended badly. Blair was obliged to make a humiliating retreat over Britain's contribution to the EU budget, while Chirac conceded nothing at all. With the onset of recession and high rates of unemployment, there will be many more conflicts between the EU states.

The attempt to impose a common currency has, as we predicted in advance, caused an aggravation of the economic crisis. This is particularly clear in the case of Italy. Italy is now the sick man of Europe. The crisis in Italy is extremely serious. In the past, the Italian bourgeois got out of crises by resorting to the devaluation of the lira and increasing budget deficits. Now, with the Euro, neither of these options is possible. The Italian ruling class must place all the burden of the economic crisis on the shoulders of the working class. This has led to a whole series of general strikes that have completely undermined the Berlusconi government. The bourgeoisie has no alternative but to send the working class to the school of Prodi. It will be a very hard school.

A few months ago The Economist published an article saying that to solve the problem of the Italian economy they need to lay off 500,000 workers in the industrial sector, and cut wages by 30%. This shows the real plans of the bourgeoisie. It shows how much pressure will be on the Centre-Left government when it comes to power. It will be forced to carry out attacks on the workers. But it will also be under the pressure to carry out policies in the interest of the working class. This will open up a ferment of opposition in the ranks of both the RC and DS, with big possibilities for the Left Wing and the Marxist tendency, which has already made important gains.

Italy is now in the front line of the class struggle in Europe. But Germany and France - two key EU countries - are not far behind. In both countries there is a deep political crisis. The result of the EU constitution referendum in France was a bombshell. It was not just a vote on the EU constitution or even against Chirac. It was a protest against the whole situation, a vote against the whole political establishment.

The French banlieues riots reflected the accumulated contradictions in French society, which have been building up over a long period. It reflects the burning anger of the dispossessed youth, which sees no future for itself in the present system. This feeling of alienation has many causes: poverty, discrimination, racism, and police violence. But in the last analysis, it is a reflection of the fact that in the present period even in an economic boom, unemployment remains very high. In France, according to the official statistics (which always understate the real position) there is around ten percent unemployment. But for young people the figure is twenty percent, and for young North Africans forty percent.

The burning of cars was a blind protest against inhuman conditions, against unemployment, bad housing and social decay. The bourgeois throw up their hands in horror at the violent manifestations of discontent. But who are responsible for this? In the first place, the capitalists and their hired agents, the politicians and police who preside over appalling conditions of social deprivation, and in the second place the reformist leaders of the workers' parties and unions, who have been incapable of giving a political and organisational outlet to the discontent of the youth.

The representatives of the ruling class often come to the same conclusions as the Marxists. After the riots and the EU referendum, President Chirac is reported to have said: "There is a profound malaise in France." That is undoubtedly true, but not only in France. In Germany there are over four million unemployed and a budget deficit of 32 billion Euros. As a result Germany is now passing through its worst crisis since the end of World War II. It is ironic that the CDU has entered a coalition government with the Social Democracy just at this time. Angela Merkel was very pleased she was made Chancellor but will live to regret it.

Merkel likes to present herself as a "reformist", by which she means that she stands for a policy of vicious counter-reforms and cuts. The German capitalists are no longer capable of giving reforms and concessions as they did in the past. On the contrary, they cannot tolerate the reforms they have already conceded. But in the last elections the people were precisely voting against "reform". The stage is therefore set for an intensification of the class struggle in Germany and a growing polarisation to the left and right. An anticipation of this is the left split in the SPD even at this very early stage.

The situation in Germany today already bears certain similarities to the turbulent days of the Weimar Republic. Everywhere we look, we see the same process. In the recent period, there were two general strikes in Belgium. In Greece there were two important general strikes. In December 2005 there was a general strike in Greece against the right wing ND government. Almost at the same time in Ireland there was a mass demonstration of 100,000 people in Dublin in support of the ferry workers and against attacks on pensions and workers' conditions.

In Spain, the right-wing Aznar government suffered a humiliating defeat on March 14th, 2004. The seeds of this defeat were sown during the previous three years: an escalation of the class struggle which brought about movements of millions of youth and workers throughout the length and breadth of the country. The general strike in Galicia in 2001, mass mobilisations of student youth against the right-wing education counter-reforms, the great general strike of 20th June 2002, the movements of hundreds of thousands against the Prestige disaster, and the anti-war demonstrations, which brought millions of workers onto the streets, all produced a general convulsion in society, heightening the political polarisation to a degree which can only be compared to the situation in the 1970s. This political polarisation, which reflected a qualitative leap in the consciousness of millions of workers and youth, reached its peak in the days following the Islamic fundamentalist bomb attacks in Madrid on 11th March 2004, when a mass movement - which was of an almost insurrectionary character - challenged bourgeois legality on 13th March with demonstrations surrounding PP offices in several towns and cities. The movements of these days showed more clearly than previous movements the characteristics of the inevitable future revolutionary process in Spain. At that time, the right-wing government seriously discussed the possibility of postponing the elections, although this was finally rejected due to the fact it could have provoked a response from the population which, without doubt, would have gone beyond the limits set by the workers' leadership, creating an untenable situation. If a Marxist organisation with real influence among the masses had existed at the head of this movement, there is no doubt that a crisis with pre-revolutionary consequences would have opened up.

These events showed the revolutionary potential of the Spanish working class, which is deeply rooted in the its past traditions.

During these two years of the Zapatero government, the right wing has mobilised its social base time and again in an attempt to undermine the government. In doing so it has resorted to systematically unleashing the same ideas that the forces of reaction used in the 1930s, whipping up hysteria about separatism and the break-up of Spain, the defence of the privileges of the Church and an all-out opposition to any possibility of negotiations with ETA. Within this strategy, the right wing and an important section of the bourgeoisie that identifies with these positions have used all their points of support within the State, including the army, to virulently attack the PSOE government. Lamentably, the leadership of the PSOE and the trade unions have not responded by mobilising their social base in the streets against this furious attack from the Right. Their aim is to try to calm the situation while carrying out the economic policies of the bourgeoisie. Obviously, these attempts to throw cold water on the class struggle, while introducing a degree of confusion, are not preventing political polarisation from continuing to develop and express itself in all fields.

This situation, which contains a number of similarities with the events of the 1930s, is a foretaste of the processes that will take place in Spain in the coming period. The same symptoms, with differing tempos, are developing in other European countries.

The political crisis is not confined to Europe. We see it also in Israel, Canada, Pakistan, Nigeria, Thailand, the Philippines and many other countries, including the USA itself. The immediate cause of the crisis may vary significantly: it may be economic, but also military, a political scandal, a terrorist act, or any number of other causes, but ultimately the real cause is the same. Hegel pointed out that necessity expresses itself through accidents. The slow, almost imperceptible mood of discontent reaches a point where it must find an expression.

In Australia the right wing won a sweeping victory in the last election, which gave them a majority in both the senate and the lower house. This followed a period of economic boom when the Australian economy grew by five percent a year. Yet the Australian ruling class put heavy pressure on the Conservatives to launch an unprecedented brutal attack on living standards. As a result there have been mass demonstrations in all the main cities involving at least half a million people. This happened in a country where there had been no significant movement of the working class for a long time. Yet the workers reacted immediately to the attack on their living standards.

Thus, the crisis is manifesting itself everywhere. If it was a case of one country or another, one could conclude that these were merely accidental phenomena. But that is not the case. These are clearly indications of a general tendency. They indicate that we have entered into an entirely different historical period on a world scale. The period we are entering will not be like the 1960s or 1950s but will be far more similar to the turbulent 1930s: a period of wars, revolution and counter-revolution.

World relations

After the fall of the USSR, there is extreme military and diplomatic instability. In the past there were always two, three or more Great Powers, competing with each other for world domination. Now there is only one. The USA has emerged as the most powerful imperialist power in history, spending 500,000 million dollars each year on arms. This is more than the military budgets of Russia, China, Japan, Britain, France, Germany, Italy, Saudi Arabia, South Korea and India combined.

In the 19^th century the young US bourgeoisie expressed its ambition in the Monroe Doctrine which staked the US's claim to exclusive domination of the Americas. Now they have a peculiar variation of this doctrine. Now the whole world is considered their domain. Instead of the old slogan: "America for the Americans" we have the new slogan "The whole world for the USA". This has led to consequences that were unforeseen or insufficiently appreciated by the strategists of US imperialism.

There is a serious and growing split between the USA and Europe. This is reflected partly in numerous and acrimonious trade disputes and partly in open clashes over diplomacy. The European bourgeoisie has its own interests in places like the Middle East, Iran, China, Africa and the Caribbean and cannot passively accept the domination of Washington in world affairs. As a result NATO is split down the middle, and there are growing divisions in Europe generally, reflected in the crisis over the European constitution. Blair is the faithful lackey of Bush, reflecting the collapse of British power and London's inability to play an independent role in world affairs. This led to a sharp clash between British and French imperialism that threatened to destabilise the EU.

In reality, however, Europe's role in world affairs is declining rapidly. The whole future of the world will be decided in Asia and the Pacific, with its teeming populations and energetic economies. The USA makes no secret of its desire to dominate Asia and the Indian sub-continent. Sooner or later the US will come to blows with China over the Pacific. China has already established itself as a leading world power. Its economic might is now universally recognised and it will not be long before China asserts this might in both military and political terms.

Washington seeks to dominate the Middle East - a key area for US imperialism for both economic and strategic reasons. In their delirium, the ruling clique in the USA imagined that the power of the USA was unlimited. But the real limits of US power have been cruelly exposed in Iraq. With 130,000 US troops on Iraqi soil, they have been unable to control the situation. The insurrection continues unabated. The most powerful nation on earth finds itself trapped in an unwinnable conflict that has already cost over 2,000 US dead (the figures of Iraqi deaths are not recorded but are enormous), and at least 16,000 wounded. The war is costing at least six billion dollars a month.

Not even the wealthiest nation on earth can sustain this haemorrhage of blood and gold indefinitely. It is not a question of whether the USA will be forced to leave Iraq, but how soon. And it is clear that whatever regime is left behind, it is unthinkable that it would be sympathetic to Washington. In retrospect, the whole Iraq affair will be seen as a fiasco and an adventure. The psychological consequences in the USA will be similar to that of Vietnam. It will open the door to a new period of radicalisation in the USA. This will be directly connected to events that are being prepared in Latin America, and will affect the attitude of Washington to the latter.

In its ambition to dominate the whole world, US imperialism attempted to surround Russia with a string of puppet states in Central Asia. Having got Poland and other former Soviet Bloc countries in Eastern Europe to join NATO, it then extended the scope of its intrigues to countries like the Ukraine, Georgia, Uzbekistan and Kyrgyzstan. The collapse of the Soviet Union has brought no positive results for the peoples of Central Asia. The so-called independent republics are weak and vicious regimes that combine all the worst aspects of totalitarian Stalinism with capitalist gangsterism and a brutality worthy of Genghis Khan. Moscow and Washington compete with each other to get control of these states with their big reserves of oil and natural gas, alternately supporting or undermining the existing government according to their convenience.

The actions of US imperialism have thus caused the destabilisation of one country after another. They have unleashed insurrectionary movements of the masses, which, in the absence of a genuine revolutionary leadership, are manipulated by unscrupulous bourgeois elements. There has been one uprising after another. In the space of a few months in 2005, there were insurrections in Kyrgyzstan and Uzbekistan, but the bourgeois opposition offers no way out for the masses. This means that the instability will continue for the foreseeable future.

US efforts to exert control over the Central Asian states and the Caucasus have infuriated the Russians and brought it into conflict with Moscow and Beijing. Russia and China are now attempting to counter the USA. Moscow is pressurising the Ukraine, using the powerful lever of oil and gas supplies to show the government in Kiev who is boss. It is also applying pressure on Georgia. It has succeeded in getting the Americans ejected from Uzbekistan. Having lost its base in Iraq, it is giving tacit support to both Iran and Syria against the bullying tactics of Washington.

The Americans have not pacified Afghanistan, as they claimed. The recently elected parliament (loya jirga) consists of a motley assembly of warlords, drug barons and Taliban. Out of 240 members of this parliament, 200 are said to have private armies. The central power has only the American army and its foreign allies to rest on. Karzai only maintains a shaky control over Kabul thanks to the US forces that are (so far) keeping him alive. Outside the capital he controls nothing. Meanwhile, Pakistan and the whole of Central Asia have been destabilised.

Bush's visit to India shows that US imperialism is trying to establish itself as the dominant power in Asia. It would like to establish closer ties with India as the biggest country in the region with the fastest expanding market. But it is forced to maintain a delicate balancing act in order not to alienate Pakistan, which is important as an ally in its war in Afghanistan. But both India and Pakistan are in crisis.

In Pakistan, the earthquake was an accident of nature. But it brought to the fore all the accumulated social and political tensions in Pakistan. The system is now so fragile, so inherently unstable, that any external shock can cause a deep crisis. The Pakistan ruling class is so desperate that they have decided to unleash the national question, stoking the fires of national conflicts in Baluchistan and elsewhere. This will have serious repercussions in the North West Frontier (already in a state of turmoil), Sindh and Kashmir itself.

US imperialism, having aggravated the situation by its interference in the region, has tried to prop up its puppet Musharaff, but it is leaning on a broken reed. Musharaff can be overthrown or assassinated at any time. This will open up the floodgates, preparing the way for revolutionary developments that will affect the whole Subcontinent. The tragedy in Kashmir caused a wave of spontaneous sympathy on the part of the masses in India. This does not suit either the reactionary Pakistan ruling class or the equally reactionary Indian bourgeoisie. Neither side is interested in solving the Kashmir question, which they have always used to stir up hatred between the peoples in order to divert attention away from the class struggle.

The crisis in India is also deepening. The defeat of the reactionary BJP at the last elections represented a political earthquake, but the bourgeois Congress has been rapidly discredited. Under the remorseless pressure of the IMF, it has carried out a policy of "reform" (that is, counter reforms). As a result it is in crisis and is stricken by scandals. In fact, both Congress and the BJP are in crisis and splitting. Meanwhile the powerful Indian working class, which prepared the electoral victory of Congress with a general strike, is once again flexing its muscles in a new strike wave. But both the CPI and CPI (m) are tacitly supporting the Congress government. This is causing growing discontent in the ranks. For the first time the unions have struck in Kerala where the CPI (m) is in power.

For its part, China is using its economic successes to increase its already considerable military power. It is re-equipping its army. Its space programme is dictated primarily by military considerations (as is that of the USA). It is flexing its muscles in Asia, where it has issued a stern warning that it will never tolerate a declaration of independence by Taiwan, which it regards as a breakaway province of China. This is not a bluff. The rulers of Beijing fear that such a move might encourage breakaway movements in other parts of China. And they have the necessary military means to impose their will. Sooner or later there will be a head-on collision between the USA and China over the Pacific - the most decisive area for the future history of the world.

The "Third World"

The impasse of capitalism is revealed in its crudest forms in the crisis of Asia, Africa, the Middle East and Latin America. Here the permanent instability and turbulence reflects the fact that there is no way out under capitalism. The situation in the so-called Third World countries is horror without end. Here the crisis of capitalism spells misery, disease, wars and death for millions. According to the World Bank, a total of 1.2 billion people are living on the brink of starvation, out of which eight million die each year because they do not possess sufficient money to keep them alive. The Human Development Index, a summary of health, longevity, education and living standards, fell last year in 21 countries. In 1980, it only fell in four. This is incontrovertible proof that in the present boom conditions for the masses have not improved but declined.

This is the case even in countries with high rates of growth. The figures of economic growth in no way reflect the real position of the masses. The GDP of Uganda grew six percent a year for the last decade. But income per capita remained at less than 250 dollars a year. The position of Africa is critical. In the civil war in the Congo at least 4.5 million people were killed. The whole of western Africa is in chaos. Half a million people have been killed in civil wars in Liberia, Sierra Leone, Guinea and Cote d'Ivoire. Elements of barbarism are appearing in one country after another.

Yet a series of general strikes in Nigeria shows the revolutionary potential of the working class. President Obasanjo is now in his second term in office. Initially the masses gave him some credit as they were expecting concrete material improvements in their living conditions from "democracy". Instead what they have had has been a constant barrage of attacks. The issue of the price of fuel has been a key one. Under pressure from imperialism the regime has massively increased the price of fuel, it has proceeded with its plans for privatisations, it has attacked pensioners, enormously increased school fees and so on.

Until recently the leadership of the trade unions was able to hold the situation for the ruling class. They have called a whole series of general strikes, only to compromise at the end. This is now provoking opposition within the ranks of the unions, as the workers begin to draw conclusions from their past experience. In the next period the struggle of the working class will move onto a higher plain. The Nigerian working class is destined to play a key role in the African revolution. Either it leads the masses to victory or the prospect of terrible ethnic conflict could become a real one. There are already signs of this. Here the words of Luxemburg are absolutely confirmed: the choice before humanity is socialism or barbarism.

Because of the absence of the subjective factor, the discontent of the masses, and in particular, sections of the dispossessed youth, manifests itself in distorted forms: fundamentalism, terrorism, suicide bombings, etc. Trotsky explained long ago that in any society where terrorism was endemic, this was a symptom of a fundamental impasse and a revolutionary ferment. The imperialists hypocritically denounce the desperate acts of oppressed people as terrorism, while they themselves conduct a policy of unbridled terrorism on a global scale.

Let us recall that the declared aim of Washington in attacking Iraq and Afghanistan was to defeat terrorism. What are the results? On all sides the risk of new terrorist attacks has increased, not diminished, with al Qaeda operating freely not only inside Iraq but in countries like Jordan, a key US ally which was relatively stable, but no more. Saudi Arabia looks increasingly unstable. The Lebanon is on the brink of civil war. In other words, they have succeeded in destabilising the entire Middle East. As for Bin Laden, he was supposed to have been killed several times but is still alive and active in the tribal areas between Afghanistan and Pakistan, together with his Taliban friends. This was hardly what Bush and Rumsfeld had in mind when they began their adventure.

In the citadel of world imperialism, the USA, there are also elements of a crisis that increasingly resembles a crisis of the regime itself, like the Watergate scandal that brought down President Nixon. When Bush won his second term we said that he would regret his victory, and that he would end up as the most unpopular President in US history. Both predictions are rapidly being confirmed by events. Bush already had the lowest approval ratings for a newly elected President in recent history, and his support has plummeted since. The big majority of US public opinion is now opposed to the occupation of Iraq.

Iraq and the ‘war on terror'

Imperialist arrogance, greed for plunder and rabid reaction on the part of Bush and his clique were the motives for the US military adventure in Iraq. Saddam Hussein represented no military threat to the USA. The CIA was well aware that he possessed no weapons of mass destruction. The decision to invade had nothing to do with 9/11. It was taken long before by the clique of right wing Republicans and fundamentalists that control policy in the Bush White House. They merely seized upon the destruction of the Twin Towers as a convenient pretext, as everyone now knows, to execute a plan they had drawn up within weeks of Bush taking office in 2001.

This was quite unnecessary and has had the most serious consequences from the standpoint of US imperialism. With an occupying force of 130,000 troops equipped with the most sophisticated modern weapons, they have not succeeded in pacifying Iraq. The invasion of Iraq is having a profound effect in the USA itself. Recent polls show a sharp increase in opposition to the Iraq war, which 54 % now think was a mistake. Only 34% of Americans now think there will be a positive result. Apart from the large number of US soldiers killed and wounded, the economic costs are enormous. The occupation of Iraq is costing the US Treasury not less than six billion dollars each month. Not even the richest power on earth can stand such a drain of resources indefinitely.

The Bush administration has its head in the sand. Bush has publicly stated that he doesn't "buy the premise that there is going to be a civil war". A civil war in Iraq is of course not written in stone, but it is a distinct possibility. Bush was asked in an interview if US troops would play a larger role in stopping the spread of sectarian violence in Iraq. His answer was "no", adding that US soldiers would simply continue to train Iraqis to deal with the violence.

It seems impossible that if the violence continues to escalate, and that if a civil war does break out in Iraq, that US soldiers will not be dragged into the conflict. The current Iraqi regime relies solely on US military power for support. If the violence continues the US will be dragged into the conflict, even kicking and screaming if that has to be the case, and the body bags of US soldiers will continue to pile up.

However, Bush is in a precarious situation. He has to publicly state that the US will not get involved in a civil war. The morale in the army is low. A recent poll was conducted amongst US soldiers in Iraq, which revealed that 72 percent of US troops serving in Iraq believe the United States should exit within the next year. Nearly 25 percent said the troops should leave immediately. A poll done last March by The San Francisco Chronicle also revealed that 70 percent of troops in Iraq characterize their morale as low or very low. 75 percent of soldiers said that the leadership of their battalion was poor or showed a lack of concern for the well being of the soldiers. These figures are astounding. Given these figures, it is questionable whether the US army could even be used in the event of a civil war in Iraq.

Better than anyone, the soldiers know that they are not in Iraq for the reasons they were told. They see no reason to be there. They face attacks, the threat of death, and a hostile population daily. Many are reservists who just want to go home. Facing the prospect of a growing conflict in which many more US soldiers will die, it is entirely possible that the tensions in the army will break. The US military could collapse in Iraq. The US have forgotten the lessons of the past and walked right into a situation which is strikingly similar to what they faced 40 years ago in Vietnam - a demoralized army that simply wants to go home, fighting a war they cannot win, and facing a serious

defeat on the home front.

Sooner or later they will have to withdraw with their tails between their legs. When they go, they will leave behind a total mess. Despite all the bragging propaganda, the elections have solved nothing. A recent official Iraqi opinion poll says that more than 50% of Iraqis now consider they were better off under Saddam Hussein. 85% want the Americans to leave. The USA is desperately trying to create an Iraqi army in order to withdraw its troops before the military situation deteriorates any further. But how? In their efforts to get a base, they have split Iraqi society along national and religious lines.

Washington gave concessions to the Shiites, which alienated the Sunnis and also the Kurds. As a result they have allowed Iran to intervene. The tensions between Tehran and Washington have been heightened as a result. Now they are attempting to redress the balance, offering concessions to the Sunnis, including the offer to include former Baathists in the army and security forces that they previously dominated. This has infuriated the Shiites and increased the fatal tendency towards sectarian conflicts and violence. These can degenerate into a bloody civil war, with incalculable consequences. Thus, a military action that was allegedly aimed at establishing peace, stability and democracy is collapsing into a bloody mess. The conflict between Iran and the USA is thus already being played out inside Iraq though a low intensity "proxy war". Only the development of a unified national Iraqi resistance will be able to avoid the spectre of an all-out civil war.

Their adventure in Iraq has placed the US imperialists in a difficult position when dealing with other so-called "rogue" regimes. Next door to Iraq the Islamic fundamentalist regime in Iran finds itself in a contradictory position. Internally it is facing growing worker unrest. A series of key strikes has taken place, underlying the class contradictions in Iranian society. In recent years we have also seen magnificent movements of the youth.

In the early stages this was expressed in illusions in the so-called "reformist" wing of the Islamic regime, but having served in office these have been discredited. Now the new "hard-line" president has come to power and is trying to hold the situation together by turning the attention of the masses towards the "external enemy". Mahmoud Ahmadinejad is using populist, "anti-imperialist" rhetoric to appeal to the masses while at the same time making a whole series of deals, particularly with European capitalists, to get more investment into the country.

The regime is clearly in a dilemma. It desperately needs investment to develop its industrial base, to create jobs and give the masses some concrete material gains if it wishes to stabilise the situation. At the same time it is in conflict with imperialism, particularly US imperialism, over its development of nuclear capability. They claim it is only for "peaceful purposes", but this fools no one. The leaders of the regime have drawn one important conclusion from the US invasion of Iraq: if you don't have "weapons of mass destruction" you get invaded, if you do you don't!

US imperialism is terrified of the prospect of Iran becoming a nuclear power. So far they have used diplomatic pressure, UN resolutions and so on to try and curb Iran's nuclear aspirations. However, US strategists are divided over how to move further. Some are hoping the regime can be gradually weakened and eventually overthrown from within, and they are spending millions of dollars with this aim in mind. Others believe that some form of armed conflict is inevitable. This is the thinking of the Bush administration. The problem is they are presently bogged down in the Iraqi quagmire. This however, does not exclude a possible US missile strike on the nuclear research centres, or an Israeli strike backed tacitly by the US. Even such a limited conflict, however, would only serve to further enrage the masses in the Middle East and would solve nothing in the long run.

The greatest threat to the regime, however, does not come from US imperialism: it comes from the working class and other mass movements. The total collapse of support for the so-called "reformist" wing of the Islamic regime has resulted in a huge shift in consciousness and combativity of the working class, the youth, women, national minorities and other exploited and oppressed layers in society. Until a year ago the most alarming development for the regime had been the crumbling of its social base, and hence its ability to use that base in cracking down on labour strikes and other movements. That was the logic of installing Ahmadinejad as "president" and then doling out money to the Hezbollah, Basij and so on.

Since then two semi-state bodies that have been crucial in controlling the students' and workers' movements have undergone major developments. The Office for Consolidating Unity, the student organisation responsible for the seizure of the US embassy, now has elements in its leadership who openly call themselves socialists and are being prosecuted by regime for being "Marxists". The Labour House, which until little over a year ago was openly attacking genuine trade unionists like the Vahed bus drivers, has sacked the editor of its daily newspaper, Kar-o Kargar (Labour and the Labourer). Since then Kar-o Kargar, which has a circulation of around 200,000, has published Lenin's 1899 article "On strikes" and a photograph of him. The similar pressures and fissures in other semi-state organisations.

The growth of various social movements has been unprecedented. Two years ago, labour activists were arrested before they had even managed to take part in the May Day rally in Saghez. Last year, the Labour House's May Day celebrations, which were supposed to endorse Rafsanjani's presidential campaign, were wrecked by the workers. In this year's massive May Day rally the Labour House totally lost control and the workers put their own slogans forward: "Strike, strike", "Jailed workers must be freed", "Look at France, do something for us" and so on. As the recent events in Tabriz and various universities have shown the change in the national and youth movements has been almost as dramatic. This type of growth, even despite the shortcomings of its leadership, is beginning to have its effects on the stability and unity of the bourgeois state itself. The repressive apparatus has been witnessing divisions. The uniformed police and security forces have on a number of occasions sided with protesters against the plain-clothed officers. This was particularly noticed on May Day 2006 in Tehran.

One thing is certain; the opposition of the working class is growing. The workers are becoming bolder; their fear of the regime is not what it was. At a certain stage the Iranian workers will move in a decisive way. It was the movement of the working class, in particular the oil workers, that finally brought down the hated Shah. The same will happen with this regime. Our Iranian comrades are already in touch with the best workers and youth and on this basis over the coming period we can build a strong Marxist tendency.

Palestine and Israel

At the heart of Middle Eastern politics is the Palestinian problem, which has been a source of instability in the region for decades. Bush, and particularly Blair, would like to encourage the "moderate (i.e. bourgeois) wing" of the Palestinian Establishment. But all the promises of Bush and Blair to bring about the foundation of an independent Palestinian state stand exposed as hollow hypocrisy. With its calculations in Iraq reduced to rubble, and the situation in Saudi Arabia ever more uncertain, the USA is compelled to rely even more than previously on its only firm ally in the Middle East, Israel. Bush cannot afford to alienate Israel.

More than ever the policies of US imperialism on this question are determined by the most reactionary circles in Tel Aviv, who moreover enjoy excellent relations with the hardliners of the religious right in the Republican Party. However, Israel itself is also passing through a political crisis that is without precedent since the state was established. The fact that Sharon was unexpectedly laid low by a stroke was an historical accident of the purest kind. But the question must be asked: how does it come about that the entire political life of Israel has been plunged into crisis on the basis of one old diseased man. This is a reflection of a complete impasse - the expression of an unstable system.

This turbulence is not directly caused by economic factors, but at bottom the crisis of Israeli capitalism affects the psychology of the masses in a decisive way. In the past, the Israeli population (like the Australians) enjoyed a privileged standard of living. In the early days, when the Zionist Labour Party was in power, it carried out reforms that benefited the masses and even paid lip service to "socialism". Now all that has been reversed. The economy is in crisis. There is ten percent unemployment and there are soup kitchens in Israel. Instead of reforms there are counter-reforms.

Under these circumstances, there has been a split in both the Labour Party and the Likud. This places on the agenda the beginnings of a polarisation to the right and left in Israel, which can have a profound effect on the whole situation over a period. The problem consists in the lack of leadership and the national question that constantly serves to distract the attention of the masses from the class questions.

In the Palestinian territories there is also a growing discontent with the corrupt bourgeois leaders of Fatah. Mahmoud Abbas aspires to be an American stooge. But he is not even very successful at this. He cannot control the masses, and Washington has no use for a stooge who cannot keep the masses under control. The handing over of Gaza was intended by Tel Aviv as a manoeuvre to justify holding onto Jerusalem and most of the West Bank. It has led to few benefits for the people of Gaza who live in the direst poverty with mass unemployment and the dream of a Palestinian state remains as illusive as a desert mirage. The recent elections led to a sweeping victory for Hamas, which reveals the depth of discontent with the corrupt and impotent Palestinian Establishment. But the masses are suffering from exhaustion after years of struggle and hardship. Even the decision of Hamas to participate in the elections was a tacit admission of this fact.

In reality there can be no way out for the Palestinian people other than the revolutionary road: the overthrow of both the corrupt and bankrupt leadership and the reactionary Zionist ruling class in Israel. This cannot be achieved without the support of at least the decisive section of the Israeli working class. The conditions are beginning to exist for forging a genuine unity in struggle of the Palestinian masses and the Israeli working people. But the prior condition is the abandonment of the counterproductive tactics of individual terrorism and the systematic building of contacts between the workers and youth of Palestine and Israel. For this a genuine revolutionary party and leadership are necessary.

The crisis in the Middle East is part of the general world turbulence that is spreading uncontrollably. The intervention of imperialism cannot stop it. On the contrary, it makes things worse, and sooner or later this has its effects in the metropolitan countries. The terrorist attacks in London showed that the chaos in the Middle East and the criminal occupation in Iraq are having repercussions in the political life of Europe. This was also the case with the overthrow of the Aznar government. This was the direct consequence of a terrorist atrocity linked to the war in Iraq. In the next period we can see similar developments in Italy, and even the United States itself.

Crisis of the ruling class

The sickness of the system expresses itself in politics, culture, art, philosophy, and economy. In the final analysis, this is an expression of the impasse of a system that is incapable of developing the productive forces any further. It has the stink of decay about it in the same way as the regime of the Bourbons, or of the Roman Empire in the period of its decline.

The Liberals of the 19^th century used to say that the people get the government they deserve. That is not strictly correct, but it is certainly true that the ruling class has got the leaders it deserves. In the past Trotsky said that the real religion of the British ruling class was not Christianity but national arrogance. But at least the national arrogance of Lloyd George, Baldwin and Churchill was accompanied by a degree of intelligence.

It is no coincidence that the period of the senile decay of capitalism produces leaders like Bush, Blair and Merkel. Some might ask what is the point in mentioning the intellectual ability of George Bush, or rather the lack of it? Does not Marxism base itself on the general historical processes, which in turn are determined by the stage of development of the productive forces? The answer to this question was given long ago by Marx and Engels, who explained that men and women make their own history, although, contrary to the belief of the idealists, they are not entirely free agents in the historical process and must function within the range of possibilities that are, in the last analysis, determined by economic factors.

It is not at all correct to say that the personal qualities of the bourgeois leaders play no role. Such a statement is like saying that the personal qualities of the general staff play no role in warfare. It resembles the barren scholastic caricature of Marxism of those formalists who argue that because socialism is historically inevitable, there is no need to build a revolutionary party and leadership. As a matter of fact, not only do the personal qualities of Bush and Blair play a role in shaping events, they also reflect objective reality. Lenin explained that a man at the edge of a cliff does not reason.

The immense power of the USA has gone to the head of the ruling circles in Washington. Their conduct resembles the gunboat diplomacy of British imperialism in the past. George Bush and the clique of rabid right wing reactionaries that now dominates the White House took advantage of the terrorist actions of September 11 to launch military adventures in Afghanistan and Iraq. The actions of US imperialism have provoked a wave of anti-Americanism everywhere and opened up a whole series of contradictions that will have the most serious repercussions within the USA in the next period.

In most of the world, we see a total inability to develop the productive forces as in the past (China is the most important exception). This shows that capitalism is no longer capable of playing a progressive role. There is reaction at all levels, not just in politics, but also in culture. We see the distilled essence of this reaction in the USA. A degenerate clique of obscurantist religious fundamentalists is running the most advanced country on earth, the most scientifically developed in history. Under the slogan of "intelligent design", they are advancing the ideas of Creationism.

Middle class moralists have a superficial view of the world situation. They wring their hands and lament: "what a terrible world we live in!" They do not understand that all these horrors are only the outward symptoms of a deeper crisis, a crisis of the system itself. Such ugly phenomena have always accompanied every declining system on its way to extinction, as any student of the history of the Roman Empire and the decline of feudalism will be well aware. But just to see the negative side of things is entirely unscientific. It is also useless in practice. These people resemble a bad doctor who limits himself to complaining about the symptoms exhibited by his patient instead of providing a scientific diagnosis of the disease and suggesting a remedy.

Marxists do not adopt a moralistic attitude to the phenomena that we see before us. We understand that these symptoms are the necessary product of a socio-economic system that has outlived its historical usefulness and is exhibiting all the signs of a terminal sickness. It is the inevitable result of the death agony of capitalism. To tell the truth, it is a system that ought to have been overthrown long ago. The old society is dying on its feet and the new society is struggling to be born.

The task of the Marxists is to do everything in our power to cut short this convulsive process that is threatening to undermine civilisation and human culture and to develop and help the forces of a new society. That is to say: we must help the working class, starting with its most conscious elements, and the youth, to understand the tasks posed by history and to fulfil its historic mission, the conquest of power and the socialist transformation of society.

Latin America - the key to the world revolution

Within the general context of world capitalist crisis we have the particular crisis of Latin America. This is at present the continent where the revolutionary process has gone furthest and has practically acquired a general character. This reflects the impasse of capitalism in Latin America. Its vast resources, which are more than sufficient to solve all the problems of its people, have been plundered by imperialism with the connivance of the local oligarchies.

The total foreign debt of Latin America rose from 37 percent of GDP in 1997 to 51 percent in 2002. In one year alone (2003) the foreign debt was the equivalent of 186.6 percent of the total export earnings of the entire continent. In this way a potentially prosperous area of the globe is being bled white by imperialism. Millions of men, women and children are being reduced to poverty, degradation and hunger. The figures for economic growth are increasing. But the masses see no benefit from this growth. This is the objective basis for the rapid upsurge of the revolutionary movement that is spreading like a forest fire from one country to the next.

The reformists and pacifists are hypnotised by the "absolute" power of US imperialism. But the power of the USA, although phenomenal, is not unlimited. This is shown both in Iraq and also in Latin America. Of Latin America we said six years ago that it was the key to the world revolution, and we took the necessary organisational measures to react to this fact. We see here the vital importance of perspectives. Latin America clearly shows the limits of US imperialism. In the past, whatever Washington said was put into practice. But the attempt to foist the Free Trade of the Americas Agreement on Latin America failed miserably. And Bush got a very hot reception in Buenos Aires when he went to the Summit of the OAS. Washington is alarmed. They feel that control of Latin America is slipping out of their hands.

Of course, this does not mean that the imperialists will just remain with arms folded. They are already intervening, and not only with words. The Colombia Plan, which was supposed to be part of the so-called War on drugs, is in reality a war against the guerrillas. It is also an attempt to create a base for US imperialism in Latin America, from which to launch interventions against other states, in the first place, Venezuela. They have turned Colombia into an armed camp, injecting vast sums of money and also sending arms and so-called advisers to prop up the reactionary regime of Uribe. The Venezuelan Revolution is what most worries Washington. It has gone quite far, but state and key parts of the economy are still in bourgeois hands. Therefore it can still be reversed, and this is the main aim of US imperialism.

A continental revolution

A characteristic common to every country in Latin America is the enormous acceleration in the pace of events. The whole continent is moving in the direction of revolution, and this movement is unfolding at a quickening pace. In the space of just six months we have seen important events in Ecuador, Bolivia, and Mexico, and important developments in Venezuela.

If nature abhors a vacuum, this also is true in politics. In the absence of leadership from the old traditional parties of the working class, all kinds of peculiar aberrations can occur, particularly in the less developed ex-colonial countries, where the tasks of the bourgeois democratic revolution are incomplete. The problems of the masses are too excruciating to permit delay. On the other hand, the configuration of class forces is more complicated than in the older, more developed capitalist nations of Europe and North America. Thus, all kinds of peculiar variants are possible.

These variants appear to cut across the established patterns and depart from the well-worn paths of history. The illusion is created of something absolutely new and original. But in reality this is not so. All the attempts to discover a "third way" between capitalism and socialism have failed and must necessarily fail. Either the proletariat takes power into its hands and sets about the radical reconstruction of society, or sooner or later, capitalist reaction will strangle the revolution. There are no exceptions to this iron law of history.

In Latin America the revolutionary wave has gone further than anywhere else. It is a genuinely continental process, in which events in one country affect events in every other country. The Venezuelan Revolution has become the main point of reference. Now Evo Morales has won the elections in Bolivia with 54% of the votes, representing the will of the masses to change society. This represents a major turn in the situation. The might of the USA is being challenged in one country after another.

However, in the absence of powerful Marxist-Leninist parties, the masses must try to find a way out, seeking an alternative to the present impasse that condemns them to servitude and misery. They turn to parties like the PRD in Mexico, the Frente Amplio in Uruguay and the Bolivarian Movement in Venezuela. The masses demand solutions to their problems. They will test these parties, leaders and movements. Only on the basis of experience can they arrive at the necessary conclusions.

The attitude of genuine Marxists towards the masses is not that of haughty condescension. We do not issue ultimatums to the masses but proceed shoulder to shoulder with them, explaining what is necessary at each stage and helping them to draw correct conclusions, while simultaneously striving to push the movement forward. Our slogan is that of Lenin in 1917: "patiently explain". Only in this way can we overcome our weakness and find a road to the masses.

In Uruguay, we had the election of the Frente Amplio (FA) on the basis of five general strikes, although Tabare Vasquez is a reformist of the Lula type. In the case of Brazil, the opposition to Lula's policies took two years to materialise. In Uruguay it has appeared even more quickly, after only one year. The Communist Party, which is the main party in the FA, has opposed, publicly and in Congress, some of the actions taken by the government and there is a ferment of criticism in the ranks of the FA itself. Peru is also heading in a revolutionary direction. We have seen an insurrection in Ecuador, which overthrew the government and an insurrectionary movement in Bolivia, in which the only thing that prevented the seizure of power by the working class was the absence of leadership.

In Ecuador, a small and impoverished country, we see the enormous revolutionary potential of the masses. In 2000, the revolutionary movement in Ecuador first alerted us to the developing revolutionary situation in South America. (See our articles and documents from that period.)

It would have been possible to carry out a peaceful revolution in Ecuador at that time. The workers and peasants had the power in their hands but they did not know they had the power. It slipped through their fingers. But the masses had not been defeated and the ruling class was forced to free Lucio Gutierrez, the army colonel who had joined the masses during the insurrection. He then went on to win the elections at the end of 2002. However, for the masses nothing changed. The power of the ruling elite remained intact. The richest 20 percent controls 60 percent of the GDP, while the poorest 25 percent accounts for just 4 percent. Forty-six percent of the active population is either unemployed or underemployed. A similar number have no access to running water.

Now a mass insurrectionary movement after just two years has ejected Gutierrez. He was discredited when he accepted the policies dictated by the IMF and the World Bank. This was inevitable. Whoever comes to power is faced with a clear choice: either act in the interests of the masses, which means confronting the bankers and capitalists, or capitulate to the capitalists and attack the living standards of the masses. Gutierrez chose the latter and that was the cause of his downfall.

Gutierrez's declaration of a state of emergency did not prevent 50,000 people from coming out onto the streets. In the moment of truth the power of the state could not prevent his overthrow by the masses. He was hastily replaced by the vice-president, Alfredo Palacio. This will solve nothing. There is a questioning not just of this or that government, but also of the capitalist system and the bourgeois democratic regime. But in the absence of a revolutionary party, nothing has been resolved. Since 1994, three presidents have been removed by mass actions. This fact alone expresses the impossibility of achieving real or lasting stability on a capitalist basis. New movements are inevitable, which will again pose the question of power.

Peru is also in a deep crisis. The judiciary, the congress, and all of the other official institutions of the bourgeois State are unpopular and are discredited. The public debt is equal to 47% of GDP. The levels of poverty are similar to those in Bolivia, and Peru could be the next to follow in Bolivia's footsteps at any moment.

The presidential elections reflected the discrediting of the traditional parties, when in the first round, the indigenous candidate, Humala, obtained first place ahead of the candidate of the right, Lourdes Flores, and ahead of APRA, who remained in second place.

Imperialism and the Peruvian bourgeoisie panicked and launched a dirty campaign against Humala to guarantee Alan García's victory. Certainly, they did not fear Humala, who made every effort to moderate his tone to reassure the ruling class that he wasn't a dangerous adventurer. However, they knew that if Humala had won the election, the masses would have seen things differently.

There exists the increasingly widespread sentiment that things cannot continue as they have before. The support for Humala is an expression of this. That is why patience with the government of Alan García will not last long. The idea that "we must do the same as in Bolivia" will become the dominant idea among the masses.

Brazil and Chile

Brazil is a geographical and economic giant and a regional superpower, a continent inside a continent. Developments in Brazil are followed with interest in the rest of the continent and also in the Left throughout the world. The electoral victory of Lula aroused enormous enthusiasm in the masses. But Lula has carried out pro-capitalist policies. His capitulation to imperialism and the IMF has provoked a mood of discontent and criticism in the working class movement and that of the landless peasants, especially the advanced layer of activists. This is leading to a growing process of inner differentiation.

There is a growing mood of radicalisation among the workers and peasants, expressed in a wave of occupations of land and factories. There have been a series of crises and splits. The recent scandals have exposed the corruption of the right wing reformist PT leaders. This has deepened even further the internal crisis of the PT. A section of the activists are bitterly disillusioned with Lula and his capitulation to the pressure of imperialism and big business. Nevertheless, the mass of workers and peasants see things differently. They see no alternative to Lula and the PT. Therefore all the left splits are condemned to impotence.

If there had been a strong Marxist opposition current, they would have gained big support and would by now possibly be in a position to win a majority of the Party. Unfortunately, the ultra left sects that entered the PT early on have thrown away this opportunity by provoking a series of premature splits. But the process is not over. There is a movement to occupy factories and land. And there are still big possibilities inside the PT for a tendency that has clear ideas and knows what it is doing.

For the last few years Chile has been presented by the apologists of capitalism - and even by a section of reformist leaders - as the most stable and prosperous country in Latin America and as a model to imitate. However, like in Argentina in the 1990, the alleged "Chilean miracle" in reality hides one of the most unequal distributions of wealth in the continent and the limitless exploitation of the workers and the people. Everything has been privatised and the country's wealth (particularly copper) has been handed over to the imperialist multinationals on a silver plate.

For the last two decades, the leaders of the right wing of the SP have imposed on the working class rank and file of the Party a policy of class collaboration with parties of the bourgeoisie, like the Christian Democrats (DC) in the "Concertacion". The policies of Lagos and the right wing leaders of the PS divided the left, helped the ruling class to keep control and have been an obstacle to a more speedy recovery of the Chilean working class. However, the social contradictions are accumulating in an unbearable way and sooner rather than later will come to the surface. The memory of the revolutionary traditions of the 70s has not died and will reemerge with redoubled strength.

The results of the parliamentary elections and the first round of the presidential elections (at the moment of writing the second round has not yet taken place) reflect the clear tendency towards social polarisation. The socialist candidate added to the candidate of Juntos Podemos, a front set up by the CP, the MIR and other small left groups, got more than 50% of the votes, and the sum of the votes of the two right wing candidates is around 48%. Within the ranks of the Christian Democracy (DC), a bourgeois party that historically has tried, through demagogy, to maintain a certain social basis amongst the people, there are clear signs of a right-left split.

Michelle Bachelet, the new SP leader, was a minister under Lagos and has not challenged his policies, although she has been forced to use a more left wing language on certain occasions. Discontent with the right wing reformist leadership of the SP has been expressed in their defeat on a number of votes in the last Congress and the growth of those currents, such as Socialists like Allende, that advocate a more left wing programme. These currents reached 47% of the votes at the last party Congress, though the composition and leadership of these currents is heterogeneous. Within some sections of the Communist rank and file, the idea of a united front with the SP left wing is winning ground and this could change the whole situation. But what is needed above all is for the rank and file of the SP and CP to fight for a clear and unambiguous Marxist programme and policy.

Mexico

Mexico was the one country that seemed immune from the dynamic of the rest of Latin America - mass mobilisations were not on the agenda. The right wing PAN was firmly in power, the economy was doing well and was firmly welded to the USA. But in the space of just a few months the whole position has been reversed. The mass movement against the "desafuero" completely transformed the situation. 1.2 million people came out onto the streets of Mexico City in support of the PRD leader Lopez Obrador.

What happened in Mexico shows the incorrectness of the idea that only economic factors can lead to revolutionary movements. In fact, the shocks that spark off an insurrection can come from a number of different sources. Here the movement began as a political and legal scandal, like the Dreyfuss case in France. The attempt of Fox and the ruling class to block the candidature of Lopez Obrador and put him on trial for corruption brought the masses out onto the streets.

Washington fears the coming to power of a "Mexican Chavez". In reality, the comparison is not accurate. Lopez Obrador is no Chavez, and is striving to prove his loyalty to Washington. Yet the fears of Washington are well founded. Bush is right to be terrified - not of Lopez Obrador, but of the masses that stand behind him. Trotsky pointed out that under certain circumstances, reformist leaders could be pushed to go further than they intend. That is what Washington fears. Despite his subjective intentions, Lopez Obrador is under the pressure of the masses to improve their conditions. Washington understands only too well that the masses can push Lopez Obrador to go beyond what he intends.

Under pressure from Washington, Fox attempted to prevent Lopez Obrador from standing in the Presidential elections this year. They accused him of corruption. This is an absurd accusation. Even if it were true, everyone knows that all Mexican politicians take money. The masses know this and they also know why they only picked on Lopez Obrador and that is why they poured out onto the streets to protest.

After 20 years of brutalisation, mass poverty and unemployment in the embraces of its northern neighbour (NAFTA, etc.) the masses are seeking an alternative. Between 1994 and 2002 10.7 million have left to look for work in the USA. That is over one million a year. From 1994 to the present, accumulated unemployment in Mexico has reached 9.4 million. Over the past 12 years, wages have fallen 65 percent. Therefore, they immediately rallied to the side of Lopez Obrador in the biggest mass demonstrations since the 1930s.

There were spontaneous mass meetings in plazas, often without anyone in the PRD calling them. There were banners in the poorest neighbourhoods against the "desafuero". Lopez Obrador addressed mass meetings all around the country. In the end Fox was forced to beat a hasty retreat. If he had not done so, the movement could have acquired insurrectionary dimensions. This was an important defeat for Fox and the Mexican bourgeoisie. It represents a major change in the situation. This has raised the confidence of the masses, and it will be difficult to demobilise the workers once they are organised. People in Mexico are talking about politics - in the markets, on the metro, etc. This is a symptom of the beginnings of a revolution. Consciousness is being rapidly transformed.

Thanks to the PRD bureaucracy Fox remained in office. Since they were prevented from overthrowing Fox by direct action on the streets, the masses proceeded to move onto the electoral plane. This document is being written before the Presidential elections, but unless there is massive electoral fraud, or Lopez Obrador does something very foolish, he ought to win by a decisive majority. The bourgeois parties are now in crisis - not only the PAN but also the PRI.

The Fox government is in crisis. Never has there been a Mexican government with so many cabinet changes. As a result of the resistance of the workers' movement, every counter-reform imposed by Fox has been stopped by the masses. The PAN itself is a very divided party, hated by the workers. The PRI is also in a deep crisis. According to the polls, the PRD has 36%, the PAN 24% and the PRI 22%. The bourgeoisie is running out of options and is now sending trusted people into the PRD to make sure it does not drift to the left.

In these conditions the ultra left sects are, as usual, playing a pernicious role. At a time when the masses are attempting to unite to kick out the hated Fox government, the sects are uniting - against Lopez Obrador! This sectarian madness is being enthusiastically supported by the Zapatistas. Together they have organised the so-called Other Campaign to sow confusion amongst the students and middle-class elements. This campaign can only benefit Fox, whom the mass of workers and peasants are fighting to defeat. These ultra-left policies and methods will only serve to isolate the Zapatistas from the masses even more, totally discrediting them in the eyes of the workers and peasants.

An electoral victory of the PRD would impel the whole movement forward. It would represent a break in the situation. It would also enable the masses to see in practice how unworkable reformist policies are. They would be able to compare words with deeds. Therefore the only permissible policy for the Mexican Marxists is to fight against Fox, for a PRD government, but to demand that a government elected by the votes of the workers and peasants must break with capitalism and imperialism and carry out a socialist policy.

Under conditions of crisis and with an aroused working class, a sharp polarisation will take place to the right and left. This will inevitably be reflected in the ranks of the PRD. The Mexican ruling class is attempting to control the PRD with its own people. Lopez Obrador has been surrounded by a clique of ex-PRI people. This is already provoking friction within the party. The rank and file is protesting against the right wing elements that are taking control. In the front line of this struggle is the Marxist tendency represented in Mexico by El Militante, which is a revolutionary point of reference for worker and youth activists. The presence of an organised Marxist current is a fundamental element in this equation.

It is not impossible that the bourgeoisie, in order to keep Lopez Obrador out, may resort to a manoeuvre. They may corrupt some of the PRD leaders and provoke splits at regional level. They can also resort to electoral fraud. But if they do, and the masses conclude that they have been cheated, the way will then be open to an unprecedented upsurge in mass actions that will make the country ungovernable. Sooner or later, they will have to hand power to the PRD. That will be the beginning of an entirely new situation in Mexico.

If, as seems most likely, Lopez Obrador wins the presidency he will be confronted with an economic crisis that will force him to choose. The crisis was postponed due to a brief respite based on the US recovery, but it will aggravate the conditions of the masses that are already desperate. It will be similar to the situation in Spain after the declaration of the Republic in 1931 and will usher in dramatic developments in the same way.

Argentina

Revolutions can be sparked off by any number of things: a stock market crisis, a financial collapse, a war, a serious political scandal, a terrorist act. The insurrection of December 2001 was the result of financial collapse. President de la Rua was compelled to flee in a helicopter from the roof of his presidential palace. But these events immediately brought to the surface all the contradictions that had been accumulating beneath the surface of Argentinean society for decades.

Argentina shows the way in which an apparently stable situation can be transformed in the space of 24 hours. This was supposed to be a model country from the standpoint of capitalism and imperialism. The Argentine bourgeoisie followed slavishly all the recipes of the IMF and the World Bank. It was hailed as a success story. But the whole thing collapsed like a house of cards at the first gust of cold wind of the world economy.

The origins of the collapse in Argentina must be sought, not within its national frontiers but in the world market. This is the other face of globalisation. The shock waves from the Asian collapse first affected Russia, provoking the collapse of the rouble in late 1998. Then it affected other weak currencies, like the Polish zloty and finally forced Brazil to devalue its currency. This placed unbearable strains on the Argentinean peso, which was tied to the US dollar. Since Brazil was Argentina's main export market, this spelled ruin. The result was a financial collapse that overnight signified bankruptcy for a large number of Argentinean citizens.

The collapse of the government opened the floodgates, preparing the way for the active intervention of the masses. We said it was the beginning of the Argentinean revolution. We explained that the ruling class was too weak to move towards reaction at that stage, and that the revolution would be prolonged for a number of years, with ebbs and flows, before a final solution could be imposed one way or another.

In December 2001 a spontaneous insurrectionary movement of the masses overthrew the de la Rua government, but in the absence of a strong revolutionary party, the initiative passed to the bourgeoisie. But we warned from the beginning that unless the workers moved to take power, the bourgeoisie could succeed in diverting the movement along parliamentary lines, and that the calling of elections would mean the victory of a "left" Peronist, which, at that time, appeared to represent someone like Saá. In the event, it was not Saa but Kirchner, who was elected. But the prognosis was absolutely correct and confirmed in practice.

Kirchnerism is an extremely unstable phenomenon, riddled with internal contradictions. Despite his nationalist gestures, Kirchner is unable to break decisively with US imperialism, which holds all the cards in its hands. He has attempted to manoeuvre between the classes and between imperialism and the Argentine masses.

Washington, fearful of the revolutionary potential of the Argentine masses, originally opted for a wait-and-see attitude. But now Bush is tightening the screws. Argentina is subject to heavy pressure to pay its debts. This it cannot do. According to the official statistics, 38.5 per cent of the population are still living in poverty in what was once the tenth industrial nation on earth. The recent mass demonstrations against Bush's visit to Argentina is a warning of what will happen if Kirchner tries to pay the imperialists by placing new burdens on the masses. The stage is set for new revolutionary upheavals and a further polarisation between right and left.

Inevitably, following the crash, there has been some improvement of the economy, just as a stone dropped from a great height will inevitably bounce. In the past three years GDP rose by 27%. This means that the Argentine economy has now reached the same level as before the crisis began. Investors have gradually recovered their nerve. The partial revival of the economy has created favourable conditions for an upswing of the economic struggle. However, these statistics do not tell the whole story. The conditions of the masses have not improved significantly. Jobs and wages are much worse than before. The levels of poverty are perhaps the highest in the recent history of Argentina. With inflation again increasing and eroding wages, the role of the unions acquires supreme importance.

Kirchner, in the old tradition of Peronism, balances between the classes and even leans on the masses to strike blows against imperialism and the ruling class, and has even criticised the military, but without changing anything fundamental. He has skilfully made some concessions to the working class and in 2005 wages rose. This is only a pale caricature of the policies carried out by Peron in the past. But the world situation is very different now. When Peron came to power there was an almost unlimited demand for Argentine beef and wheat in post-war Europe. The Argentine capitalists could afford to make concessions. That is not the case today. Now Argentina has a huge external deficit. The IMF will tighten the screws, demanding cuts and austerity. So far Kirchner has managed to manoeuvre. But this cannot be maintained indefinitely.

The working class, having passed through the school of Kirchnerism, is now entering the stage as an independent force. Our Argentinean comrades put forward the slogan of a left trade union tendency, which has found an echo among the advanced workers. Faced with an upsurge of the industrial struggle, the bureaucracy of the CGT has been compelled to put itself at the head of the movement. But its motor force is the movement from below. The union militants have shown their instinctive understanding of what is necessary by organising the Left Trade Union Current. This has succeeded in grouping union militants from sectors like the metro workers, the railway workers, teachers, health workers and others. These are the people who must be won to Marxism if the Argentinean Revolution is to triumph.

Bolivia

Bolivia has been living through a revolutionary situation since October 2003. Time after time the masses have moved to take power into their hands but were frustrated by the lack of a revolutionary leadership. This was admitted in so many words by one of the leaders of the COB trade union confederation, who said: we did not take power because we did not have a revolutionary party.

The events in Bolivia in May/June 2005 are extremely rich in lessons. There are several important characteristics we must take into account. As in other countries, petty bourgeois intellectuals in Bolivia wrote off the working class as a force in society, focusing instead on the coca growers, peasants, and other layers. But it was the workers' organisations that played the key role - the COB and the miners organised what amounted to a national insurrectionary movement twice in the space of 18 months, overthrowing two governments: Losada and Mesa.

The marvellous Bolivian proletariat played the leading role, placing itself at the head of the nation and mobilising all the other oppressed and dispossessed masses behind it. The workers staged mass demonstrations, centred on El Alto, calling for an indefinite general strike. All the elements of workers' power were present. The miners marched on the capital armed with sticks of dynamite. The "cabildo abierto" was in effect, a soviet. This movement directly posed the question of power.

In reality power was in the hands of the workers in the summer of 2005. In its colossal sweep, the movement went far beyond the initial demands for the nationalisation of gas. What they were striving for was a workers' and peasants' government. They threw down the gauntlet before a terrified ruling class, which was unable to respond. The rank and file of the MAS was deeply affected and radicalised. The leadership was losing control.

The unspeakably reactionary, corrupt and rotten Bolivian ruling class was not even able to launch a civil war against the revolution. They lacked a sufficient base in society and the armed forces to do so. Instead, they threatened to secede, to divide the living body of Bolivia, that is: to destroy Bolivia as a nation. That is the real meaning of the "patriotism" of the Bolivian landlords and capitalists. However, this would be intolerable even for the Bolivian general staff. It was an astonishing confession of moral and political bankruptcy. By this action alone, the Bolivian bourgeoisie publicly declared its unfitness to rule.

It would have been a relatively easy matter for the leaders of the COB to take power out of the trembling hands of the bourgeoisie. It would have been sufficient to form a national committee elected by the popular assemblies or cabildos, and to declare it the national government, placing the old government under arrest. In the given conditions, this could have been accomplished without bloodshed or civil war. Any attempt on the part of the Bolivian bourgeoisie to break away would have easily been suppressed. The way would be open to carrying out a successful socialist revolution in Bolivia, which would have been the starting point for a socialist revolution throughout the Andes region and Latin America as a whole. Unfortunately, yet again the COB leaders showed that they were unprepared. They backed away from the seizure of power.

As a result of the failure of the leadership, this magnificent movement was finally diverted onto the electoral plane, as we predicted. The bourgeoisie cannot continue to rule as in the past. It has suffered a rude shock and is still reeling from it. It has two black eyes but it has not yet been decisively defeated. It has taken a step back in order to regroup its forces, preparing to launch a counter-offensive in the future when the mass movement ebbs. And the masses, when they saw that the leaders had no intention of taking power, shrugged their shoulders and proceeded to vote for Morales as the next best thing.

Unfortunately, many in the vanguard took an ultra-left position and boycotted the elections. They failed to understand the process. The masses want to change society. They are filled with a burning indignation against imperialism and the rotten Bolivian ruling class. The workers' leaders could and should have taken power. But they vacillated, lost time, lost the initiative. Then the masses said: "OK, the COB didn't want to take power, so we'll go to the elections and see what happens with Evo."

The election result shows how out of touch the leaders of the trade unions and the vanguard were when they advocated abstention. 54% voted for Evo Morales (about 1.5 million votes) in a massive 84% turnout. This despite the fact that 1.5 million people, most of whom would have voted for Morales, had been taken off the electoral roles. He got 67% in La Paz, against 18% for the candidate of the ruling class. In the revolutionary storm centre of El Alto, between 70 and 80 percent voted for Morales. Yet this was a place where the MAS had no organised basis. The people that participated in the recent insurrection voted overwhelmingly for Evo Morales.

The attitude of the masses was quite understandable. The masses suffer from terrible problems that do not admit delay. They were not prepared to stand around and wait for the revolutionary vanguard to put its house in order. They saw a chance to hit out at the ruling class and its parties in the elections and they took it. They voted massively for Evo Morales. The victory of Evo Morales represents a major change in the situation. It was a shattering blow against the oligarchy and imperialism. The traditional parties were wiped out. Even in Santa Cruz, the stronghold of the oligarchy, the MAS won 33% of the vote. This shows the extreme weakness of reaction at the present time. In 30 years there has never been an election where the President of Bolivia was elected in the first round.

A vote for Morales was a vote to change society. Now the masses will wait to "see what happens". But they will not wait for long. What will Morales do? The diez medidas, i.e. his programme, express the idea of the petit bourgeois democratic revolution. Morales was elected after two general strikes and insurrections and he himself comes from the peasant and indigenous movements, which erupted in Bolivia in the second half of the 1990s. Other representatives of those movements are seated in the government, together with representatives of petit-bourgeois nationalism. This explains the growing confidence of the masses in the government, which has only been partially shaken by the crises of its first hundred days, such as the crisis of the LAB, the national airline.

The Morales government will be ground between two millstones. The masses want Evo Morales to take serious measures in their interests - to "nationalise everything". That is what they are expecting, and will continue to put pressure on the government to take the revolution beyond the bourgeois democratic limits. On the other side, he will be under merciless pressure from the oligarchy and imperialism. Washington is seriously concerned about the effects of Morales' victory, the alliance that Bolivia is building with Cuba and Venezuela, the effect that the initial measures of the La Paz government may have on the whole region. The nationalisation of the gas - albeit a partial one - stands out as an example and encouragement to the mobilised masses of Ecuador, for the turbulent situation in Peru, and it will not fail to have an effect also on the political future of Brazil, whose economy depends heavily on Bolivian gas. As we predicted some time ago, Bolivia is becoming ever more "the key to the Andean revolution".

Morales would have liked to conciliate, but the relationship with the masses is the only lever that his government has. His position is aimed at keeping the masses mobilised to defend the reforms against the attacks of imperialism and of the bourgeoisie, which still holds in its hands not only key sectors of the economy but also some important political positions. That is why his programme has already gone beyond his initial intentions, and also explains why Morales is promising to nationalise the mines, a demand that up until now had not been raised openly, also due to the divisions between the cooperative movement and the miners of the COMIBOL (the state mining company). The contradictions that are implicit in his programme will tend to become even sharper once the "battle for the land" begins, which within the context of the social make up of Bolivia remains the field where the conflict with the national bourgeoisie is the most direct.

The Bolivian revolution has begun and can last for some time - months if not years - with ebbs and flows. The problem is that the masses have failed to take power, but the ruling class and imperialism are not in a position - yet - to stage a coup. They are therefore compelled to play a waiting game, to manoeuvre, retreat, intrigue and play for time. That is the reason for the extremely cautious language used by Washington when speaking of Evo Morales. They still hope to buy him off, to neutralise him, to compel him to accept their conditions, and to compromise him in the eyes of the workers and peasants before overthrowing him. The fact that the USA pays ten percent of Bolivia's budget in "aid" gives Bush a lever he can use to secure this end.

The Bolivian revolution will unfold over some years during which periods of mass upheaval will be followed by periods of lull, when the masses are tired and disappointed. There can even be periods of reaction like the Bienio Negro in 1934-36 in Spain. But every lull will be followed by even greater and stormier upheavals. In the end, matters will have to be decided by a decisive victory of one class over another.

The Venezuelan revolution

Every revolution passes through certain stages. This can be seen in the French Revolution, the Russian Revolution, and even the English Revolution of the 17^th century. Perhaps the best comparison for Venezuela, however, is the Spanish revolution of 1931-37. There is always an initial phase of euphoria, when the masses are aroused and get a feeling of their own power. It is like an enormous street carnival, a festival of universal joy and brotherhood. But then comes the second phase when the masses, starting with the most advanced and active layer, begin to realise that the fundamental problems have not been solved, that in essence nothing has changed.

The roots of the Venezuelan Revolution go back to February 1989- the Caracazo uprising, when the bourgeois "democrat" Carlos Andres Perez, the faithful servant of Washington, did not hesitate to massacre his own people in cold blood. That defeat produced a ferment in society that found an expression in a sector of the army officers. The unsuccessful coup organised by Hugo Chavez in 1992 ended in a new defeat and imprisonment. But, as Marx explained, the revolution needs the whip of counter-revolution. An enormous movement rose around the figure of Chavez - a peculiar movement, the result of the events of 1989. The masses flocked to the banner of "chavismo", in which they saw a new and untainted banner.

The victory of Chavez in the 1998 election was an historic rupture. The masses took their revenge on the ruling class for the defeat of the Caracazo. It was an event equivalent to the February revolution in Russia, or, more accurately, to the declaration of the Republic in Spain in 1931. After the victory of Chavez there was the sense of euphoria that always accompanies the first stage of the revolution. But there was soon a rude awakening with the coup of April 2002. From the very beginning the Bolivarian revolution met the hostility, resistance and sabotage of the oligarchy, with US imperialism behind it. The events of April 2002 were unprecedented. For the first time in the history of Latin America, the masses, without a party or a leadership, defeated the counter-revolution, which was already in power. Since then there has been a constant struggle between the revolutionary and counter-revolutionary forces.

The real motor force of the revolution is the masses. On three occasions they have defeated counter-revolution. The last time was the recall referendum of August 2004. We saw the marvellous instincts of the masses to defeat the oligarchy in the referendum, though they didn't want it in the first place. That victory took the movement to a higher stage. Beginning with the most advanced layer, particularly the working class activists, the realisation began to dawn that, despite some welcome improvements, nothing fundamental had changed, and that the greatest battles lay in the future. In particular after the recall referendum a ferment began to develop, and continues to the present time.

After the August 2004 referendum, things have moved to a higher plane. The balance of forces in society is favourable to the working class. The workers' confidence is on the rise. The debate around "cogestion" (co-management) is pushing things forward. What this confused formulation expresses is the striving of the workers for workers' control - and that can only have a lasting significance if it leads directly to expropriation and a socialist planned economy. This meets with the ferocious resistance of the bureaucracy and the pro-capitalist wing of the Bolivarian Movement. There is an increasingly critical attitude among the masses towards the Bolivarian bureaucracy (though not towards Chavez). The working class is now emerging as an independent force. The first expropriations have already begun. In Venepal and CNV the CMR played a leading role - a fact that is known to the workers.

At first Chavez said Venepal was an exception. Now he talks about hundreds of enterprises that should be nationalised under "cogestion". He has presented a list of 1,149 factories that have been closed by the bosses. He said they had to either re-open them under workers' control, or they would be expropriated. There have been numerous declarations in favour of socialism, and there is tremendous pressure from below to continue along this line. In fact, if the movement of factory occupations and workers' control in public sector companies has not gone further this has been mainly due to the weakness of the leadership of the workers' movement, in particular the UNT.

As on every other level there is a ferocious struggle between the workers and bureaucrats that is in essence a class struggle - between revolution and counter-revolution, the working class and the bourgeoisie, which has infiltrated the Bolivarian revolution and is trying to destroy it from within. This struggle is even reflected at the level of the Cabinet, where the split between the left wing and the right wing is becoming wider and sharper.

The question of power

The question of power is posed in Venezuela. In the past, the question of power would have to be settled relatively quickly. One side or the other would triumph: either reaction would take power in a bloody coup or the workers would take power. Chile in 1973 was the clearest example of this. But in Venezuela this has not happened. Events are proceeding in a different fashion. This reflects the class balance of forces: there is still enormous power in the hands of the workers who have not been defeated. On the other hand, we can see the weakness of the forces of reaction that are incapable of seizing power - at least for the present.

The counter-revolutionary forces have been defeated a number of times when they have attempted to take power. In April 2002 they had power in their hands but the coup was defeated. This was the first time in Latin American history that a successful coup was overthrown by the movement of the masses. Yet, incredibly, the Venezuelan Stalinists and reformists complain about the "low level" of the masses. These wretched petty bourgeois have absolutely no confidence in the masses and no perspective of ever taking power. They represent a completely reactionary and retrograde tendency that, if it had its way, would destroy the Revolution and hand power to the reactionaries. Then they would tour Europe weeping about the tragedy of Venezuela and blame the masses for "trying to go too far, too fast".

The masses in Venezuela have in fact shown extraordinary levels of revolutionary maturity. Yet they have not taken power. Why not? The only reason is the absence of the subjective factor: the revolutionary party and leadership. Objectively, there is no reason. The objective conditions could not be more favourable for carrying out the revolution. In the short term, at least, the reaction cannot succeed. The right wing showed its complete impotence when it boycotted the legislative elections. They are split and demoralised.

Given the patent weakness of the forces of internal reaction, Washington is becoming desperate. The petty bourgeois elements are scared of a military intervention from the United States. They continually shout, "The Americans are coming!" like the little boy who never tired of crying, "Wolf!" In reality, a direct military intervention by the USA is ruled out at the present time. The US imperialists are trapped in Iraq. Bush can't open a second front in Venezuela - at least not directly.

At this point the reaction cannot overthrow Chavez, but this situation cannot continue indefinitely. The fact that Venezuela holds large stocks of oil is undoubtedly another factor that allows it a certain breathing space and room for manoeuvre. This element has given the right wing of the Bolivarian Movement - the pro-bourgeois element - a false sense of security. However, it cannot be assumed that the present favourable class balance of forces will be maintained for any length of time.

The masses want change. Now that the chavistas have a decisive majority in the National Assembly there is no excuse for not taking decisive measures against the oligarchy. The masses will demand this. They will say: "the leaders must do as we say." A section of the leadership reflects the pressure of the masses. They want to go further along the line of expropriations and workers' control. But the right wing is dragging its feet. They express the pressures of the bourgeoisie and imperialism. This is the central contradiction that must be resolved, one way or another, in the next period.

The main feature in Venezuela is the enormous polarisation of left and right. One might expect a quick development to resolve this unbearable contradiction through the victory of either revolution or counter-revolution. In Russia in 1917, the entire process had run its course in just nine months - from February to October. By comparison, events in Venezuela seem to be far slower and long drawn-out. Someone has described it as "a revolution in slow motion." But there is a reason for this.

In Russia in 1917 there were two very clear options: either the victory of Kornilovite reaction or proletarian revolution under the leadership of the Bolshevik Party. But in Venezuela things are not so clear. The counter-revolutionary forces are demoralised, split and increasingly desperate. The opposition is very weak, there is no chance of them taking power at the present time. On the other hand, the working class is hindered by a lack of leadership: there is no Bolshevik Party, no Lenin and Trotsky. There is therefore no possibility of a rapid solution one way or the other.

After the sharp decline provoked by the bosses' sabotage, the economy has rebounded and gone forward rapidly. In the recent period, 150,000 jobs have been created in Venezuela's public sector (as a result of the government "missions", etc.). However, only 40,000 have been created in the private sector. This shows the real attitude of the Venezuelan bourgeois to the revolution and Chavez. They are implacably hostile and cannot be reconciled by fine speeches. They do not trust the Bolivarians and do not invest.

In the end one class or another must triumph. The present situation, which can be characterised as an uneasy truce, can last for months, maybe years, with ebbs and flows. But sooner or later (it is impossible to be precise about the tempo) a showdown must take place.

The role of leadership

Marxism has never denied the role of the individual in history. There can be no doubt that Hugo Chavez has played an enormous role in the Venezuelan revolution, and that he has drawn some very advanced conclusions. That he has declared in favour of socialism is to be welcomed with every possible enthusiasm. But this socialism needs to be clearly defined. The task of the Marxists is to provide the necessary clarity: to dot the "Is" and cross the "Ts", and above all to spread and popularise the ideas of socialism among the workers and youth.

Having stated our support for Chavez against imperialism and the counter-revolutionary oligarchy, we have to add that our support cannot be unconditional. We do not give a blank cheque to any individual. Our attitude towards Chavez must be one of critical support. We support all the progressive measures he is carrying out, and urge him to go further, attacking the basis of bourgeois property, expropriating the landlords and capitalists. We energetically intervene in the debate on the nature of socialism, advocating Marxism and combating the confused and opportunist ideas of the reformists, who are striving to influence the President and push him in the direction of compromise with imperialism and the opposition.

At the same time, we insist on the independent role of the working class in the revolution. We support every action that tends to increase this role: factory occupations, workers' control, etc. We direct our fire against the enemies of the revolution: the landlords, capitalists and imperialists. Above all we direct our fire against the corrupt pro-bourgeois elements of the Bolivarian bureaucracy who are sabotaging the revolution and undermining it from within.

Within the Bolivarian leadership, opposing tendencies are emerging, reflecting the pressures of different classes. One section wants to go further. The other demands the reintegration of the opposition. They argue that it is dangerous that the counter-revolutionaries are not in parliament (a fairly logical result of boycotting the elections). The right wing Bolivarians demand that the majority must bow to the wishes of the minority. And this is what they call democracy! Fortunately, the masses have other ideas. There have been new expropriations as a result of the workers' initiative from below. The workers demand that the revolution be carried out to the end.

The reformist wing is striving to slow down and distort the different revolutionary measures that are attempted and to - through dialogue and negotiations with businesses - introduce within the government policies a whole series of proposals aimed at defending the economic power that is still in the hands of the bourgeoisie. They want a number of measures demanded by the employers to be implemented: price increases, grants to businesses, guarantees for private property, etc. This economic power in the hands of private businesses represents, in the current context of class struggle, the main weapon in the hands of the ruling class in order to undermine the social basis of the revolution and to create a balance of forces more favorable to them in the future which would allow them to implement their counter-revolutionary plans.

For these elements any idea of socialism and expropriations is anathema. Increasingly Chavez is coming into collision with the right wing elements in the Bolivarian bureaucracy. Right wing ministers mutter in corners against the President's "madness". They fear the masses and long to call a halt to the revolution. More than a few of them are in contact with the enemies of the revolution - the escualidos and the US embassy. Here lies the greatest danger to the Bolivarian revolution.

The reformists are like a man sawing the branch of a tree he is sitting on. Their policies will not soften the opposition of the imperialists and the oligarchy. On the contrary, they will encourage them to intensify their counter-revolutionary activity. At the same time they are discouraging the masses and creating dangerous moods of apathy and indifference. If this is allowed to continue, it can undermine the revolution completely. The bureaucracy acts like a Fifth Column. It sabotages the revolution from inside. This has led to sharp clashes at the top level. It is no accident Chavez has changed the composition of his cabinet and advisers.

The objective logic of the Revolution poses the need to expropriate the oligarchy. It would be possible for Chavez to lean on the masses to expropriate the oligarchy. But this would signify a split in the Bolivarian movement. This is something the President would like to avoid, but it is unavoidable. The MVR was always a highly heterogeneous and ideologically confused movement. At the top, there must be a large number of counter-revolutionary elements. Imperialism is leaning on the right wing "Chavistas" and organising intrigues with the corrupt elements that favour capitalism and secretly curse the President and the Revolution.

A struggle must open up, in which one side or another must win. Chavez can only win by leaning on the masses, by appealing to them and arousing them to struggle against the right wing. The masses, and the workers in particular, are coming to the correct conclusions: that the workers must control their leaders and their organisations. We see this in every election, when there are protests against the rigging of the electoral lists. This is the only real safeguard against the usurpation of the Revolution by a privileged caste of bureaucrats.

We base ourselves, not on individual leaders, but on the healthy class instincts of the workers and peasants, who are drawing revolutionary conclusions. The greatest danger to the revolution is that the masses will get tired of speeches and slogans while nothing is done to deal with the fundamental task of breaking the power of the oligarchy and driving out the corrupt careerists and bureaucrats who are sabotaging the revolution from within. The legislative elections of December 2005 already served notice on the government that the patience of the masses is not unlimited.

There has been an increase in the dissatisfaction of the masses, which at present is accumulating under the surface. There is a critical mood towards the overwhelming majority of the leaders (with the only exception of Chavez and very few others), although the dominant mood at present amongst the masses is the expectation that the shift to the left proposed by Chavez will soon mean profound changes in their living conditions. The recent victory in the National Assembly elections, the withdrawal of the opposition and the election of a new NA composed only of Bolivarian MPs, has made these expectations grow even further. "Now there is no excuse not to complete the revolution" - that is now the idea most Bolivarians.

Chavez received six million votes in the referendum, but in the legislative elections only three million voted. This was a warning. A mood of impatience is growing among the workers and peasants - and particularly the advanced elements - the working class activists in the unions and the Bolivarian organisations: "We've had enough of this, we need to finish the Revolution". This is absolutely correct, but insufficient. In order to turn the revolutionary aspirations of the masses into reality, they must be given an organised and conscious expression.

The level of abstentions in the legislative elections is an indication that the mood of the masses is changing. They are becoming impatient and frustrated with the slow progress of the Revolution. These are the early danger signs. If the masses lose faith in the Revolution and sink into apathy and indifference, the stage can be set for a new offensive of the counter-revolutionary elements. They can count on the support not only of the US embassy but also of numerous counter-revolutionary sympathisers in the upper reaches of the Bolivarian Movement.

The Venezuelan revolution has begun, in the same sense that the revolution in Spain began in 1931. If the Venezuelan workers possessed a Bolshevik party of 8,000 members they would have taken power by now. In the last analysis, however, the only guarantee for the success of the revolution is the existence of a revolutionary party with authority in the eyes of the masses. The party does not exist - yet. It has to be built. And how is this to be accomplished? Certainly not by proclaiming it, as the sectarians imagine. To build a serious revolutionary party it is necessary to work out the correct tactics, slogans, and methods in order to connect with the mass movement, or else the party will be finished before it has begun.

What is required is the construction of a powerful Marxist tendency with roots in the working class and in the Bolivarian Movement. The masses, whether in Russia, Venezuela or anywhere else, can only learn through their collective experience. The task of the Marxists is to fight shoulder to shoulder with the masses, going through the experiences with them and at each stage explaining and helping them to draw the correct conclusions. Only in this way can the Marxists win the confidence of the masses, starting with the most advanced elements, and win them for the programme of the socialist revolution.

The permanent revolution

The initial objectives of the Bolivarian Revolution were very moderate. They did not mention socialism. They did not threaten private property. What did they propose? A genuinely democratic constitution and reforms to improve the lives of the masses, in health, education, etc., an agrarian reform and national sovereignty. That is to say, the programme of the national-democratic revolution.

The very fact that the Bolivarian Revolution had to inscribe these things on its banner almost 200 years after Bolivar is in itself a striking demonstration of the failure of capitalism and the utter bankruptcy of the Venezuelan bourgeoisie. 200 years later, the bourgeois has failed to carry out a single one of the tasks of the bourgeois democratic revolution. This is not only true of Venezuela. It is the case in all the countries of the so-called Third World. Under modern conditions the tasks of the national-democratic revolution can only be carried out by the working class in alliance with its natural allies, the peasantry and the urban poor. This was pointed out by Leon Trotsky as early as 1904 in his famous theory of the Permanent Revolution:

"The perspective of the permanent revolution may be summed up in these words: The complete victory of the democratic revolution in Russia is inconceivable otherwise than in the form of the dictatorship of the proletariat basing itself on the peasantry. The dictatorship of the proletariat, which will inescapably place on the order of the day not only democratic but also socialist tasks, will at the same time provide a mighty impulse to the international socialist revolution. Only the victory of the proletariat in the West will shield Russia from bourgeois restoration and secure for her the possibility of bringing the socialist construction to its conclusion." (Trotsky, Appendix to Stalin)

These words remain completely true today. In order to sweep aside all the old barriers to progress, it is necessary to eradicate the power of the oligarchy. In order to carry out an agrarian reform that is worthy of the name, it is necessary to break the power of the big landowners, to nationalise the land and confiscate the big estates. A start has been made, but much more needs to be done so that the peasant will believe that the slogan of the agrarian reform is not just an empty phrase.

In the Russian revolution, the basic disagreement between Bolshevism and Menshevism was on this very point: the attitude to the bourgeoisie. Lenin absolutely refused to recognise that the Russian bourgeoisie was capable of leading its own revolution to the end, and history proved that he was right. The arguments of the opportunists and pro-bourgeois elements in Venezuela are not new. They merely paraphrase the arguments of the Russian Mensheviks when they argue that the Revolution must be careful not to alienate the middle class.

Trotsky continues: "‘we must cherish the support of non-proletarian parties,' repeated Plekhanov during the years of the first revolution, ‘and not repel them from us by tactless actions.' By monotonous preachments of this sort, the philosopher of Marxism indicated that the living dynamics of society was unattainable to him. ‘Tactlessness' can repel an individual sensitive intellectual. Classes and parties are attracted or repelled by social interests. ‘It can be stated with certainty,' replied Lenin to Plekhanov, ‘that the liberals and landlords will forgive you millions of ‘tactless acts' but will not forgive you a summons to take away the land.' And not only the landlords. The tops of the bourgeoisie are bound up with the landowners by the unity of property interests, and more narrowly by the system of banks.

The tops of the petty bourgeoisie and the intelligentsia are materially and morally dependent upon the big and middle proprietors - they are all afraid of the independent mass movement. Meanwhile, in order to overthrow tsarism, it was necessary to rouse tens upon tens of millions of oppressed to a heroic, self-renouncing, unfettered revolutionary assault that would halt at nothing. The masses can rise to an insurrection only under the banner of their own interests and consequently in the spirit of irreconcilable hostility toward the exploiting classes beginning with the landlords. The ‘repulsion' of the oppositional bourgeoisie away from the revolutionary workers and peasants was therefore the immanent law of the revolution itself and could not be avoided by means of diplomacy or ‘tact'." (Ibid.)

Marxists stand for socialism - for workers' power. But we are definitely interested in supporting the struggle against imperialism, and are willing to combine in action with the revolutionary democracy on one condition - that they actually do fight for the programme of the national democratic revolution and do not surrender and compromise with imperialism and the oligarchy. A section of the revolutionary democrats wish to carry the fight forward, and we will fight shoulder to shoulder with them, encouraging them to move forward. But there are other sections who do not want to go forward, who are afraid of the reaction of imperialism and the oligarchy, who are constantly seeking deals with the enemy, who call for moderation and so on. These are not really revolutionary democrats at all but only bourgeois liberals.

It is absolutely necessary to understand that the Venezuelan Revolution is not an isolated act but part of a revolutionary chain that extends right across Latin America. Ultimately, this chain leads to the USA itself. Every revolution is linked to every other. The allegation from Washington that behind every revolutionary disturbance in Latin America is the hand of Hugo Chavez is false and absurd. But what is undeniably true is that the example of the Bolivarian Revolution provides a point of reference and acts as a powerful magnet attracting millions of poor workers and peasants who are seeking a way out on the revolutionary road. This is a fact of tremendous potential historical significance!

We must add the word "potential" for the simple fact that the Bolivarian Revolution has as yet not revealed its full potential. An acorn is not yet an oak tree. An embryo is not yet a human being. They are such only as a bare potentiality. Whether or not that potential will ever become actual depends on a number of factors. The fact is that the Venezuelan Revolution has begun, but it has not yet passed the line of no return, and it cannot do so unless it takes decisive action to break the power of the oligarchy once and for all.

The Bolivarian revolution has taken a number of steps to improve the conditions of the masses. It has introduced a democratic constitution. It has stood up to imperialism. It has begun an agrarian reform and nationalised some firms. These developments are progressive but not yet socialism. The majority of the capitalists have not been expropriated. The landlords still hold the majority of the land. The old bourgeois state has been partially purged and is riddled in a way that is increasingly more clear by class contradictions which to a large extent make it difficult for the bourgeoisie to use at present against the revolutionary process. There are even important elements of decomposition.

However, one of the main weaknesses of the revolutionary process is that this has not been replaced by a new state apparatus controlled by the working class and other sections of the people, which could be used as a basis for the further development of the revolution until the end. Some parts of the old state apparatus, particularly the structure and chain of command of the police forces and the Army itself are basically intact. The longer this contradiction within the state situation remains and is combined with the maintenance of capitalist forms of property and production relations in the economic field, the bigger the risk that the bourgeoisie might be able to recover complete and direct control of the state apparatus and use it for its counter-revolutionary aims.

As long as these tasks are not carried out, the revolution will always be in danger. With the oligarchy and its political representatives no deals are possible. No negotiation will yield any positive results, no amount of reasonableness, kind words, concessions or compromises will lessen their fanatical hostility to the Revolution. On the contrary, experience has shown that they interpret moderation as weakness - and weakness always invites aggression. Consequently, those "realists" - reformists, social democrats, etc. - who argue for moderation will only achieve the opposite of what they intended.

It is a very serious mistake to think that the hostility of the imperialists can be lessened by slowing down the revolution or by adopting more "moderate" policies. Imperialism and the Venezuelan oligarchy cannot permit the revolution to advance or even to exist. There can be no question of reconciling tendencies that are mutually exclusive. Those who advise Chavez to adopt a more moderate stance in order to save the revolution may do so from sincere motives, but they are harming the cause of the revolution and placing it in grave danger.

A military intervention?

The reformists constantly try to frighten the workers and peasants with the spectre of a US intervention. As a matter of fact, the US has already intervened and continues to intervene in Venezuela. On each occasion it has failed. And while it would be irresponsible to underestimate the power of US imperialism, it would be even more irresponsible to overestimate it, and to imagine that the power of the USA is unlimited.

Under present conditions the USA would find it difficult to intervene directly in Venezuela, at least in the sense of a military invasion. They have their hands full in Iraq. Moreover, they know very well that they would encounter ferocious resistance on the part of the whole people. A US invasion of Venezuela would make Iraq look like a tea party by comparison. Chavez is a military man and is not afraid of war or weapons. He is organising 2,000,000 reserves, which means effectively arming the population. And one has to take into consideration the effects internationally. There would be an explosive situation throughout Latin America, where not a single US embassy would be left standing. Last but not least there is the question of the effects in the USA itself, where the Latinos now represent the largest minority group, consisting mainly of poor exploited people.

Of course, Washington has other weapons in its armoury. It is working feverishly to isolate Venezuela economically and politically. But here too they have not had much luck. They tried to intervene against Venezuela through the organisation of American States (OAS). But the other bourgeois regimes in Latin America are afraid to intervene in Venezuela because of effect it would have in their own countries. The US, for all its might, was not even able to get the FTAA signed. Rice and Rumsfeld could find no support against Venezuela. They were politically defeated at the OAS meeting in Fort Lauderdale, Florida. Instead of having firm control over the situation, they are on the defensive. This was clearly shown by Bush's visit to Argentina.

Despite these setbacks, American imperialism cannot tolerate Chavez and his revolution because of the effects he is having in the whole of Latin America. Further acts of aggression are inevitable, even if they do not include direct military intervention. The strategists of imperialism understand the South American revolution as the Marxists do. They have a long-term plan for combating revolution in Latin America. They are intervening indirectly and increasingly in Colombia. The Colombia Plan is supposed to be a "war against drugs". In reality it is an anti-insurgency plan. By arming Colombia, they have transformed the whole military balance of forces in the region. The Colombian armed forces are now among the strongest in Latin America. US imperialists have turned the country into a gigantic armed camp.

They are using methods that they used in Vietnam, including dropping large quantities of defoliants on forests and farmland. These poisonous chemicals - akin to the notorious Agent Orange - are really weapons of mass destruction. They have sent "advisers" - as in the early days of Vietnam - to boost the armed forces of the "democrat" Uribe. The latter leans on the fascist paramilitaries who are also active within Venezuela. It is evident that they plan to assassinate Chavez with the active assistance of the CIA. George Bush and his partners in crime are not against this kind of terrorism. They are training special assassination squads in secret installations in Florida. If all else fails, they will engineer a border incident and push Colombia into a war with Venezuela.

Here we see the insolence of the US imperialists: Chavez buys 100,000 AK-47s from Russia and the US protests that this is a threat to its interests. Washington has pumped billions of dollars worth of arms into Colombia, but this is not supposed to represent a threat to Venezuela! They say Chavez will give these weapons to the FARC guerrillas in Colombia. This is not true. They will be used for modernising the weaponry of the Venezuelan military and the old weapons will be given to the Reserve. Chavez is preparing for war - quite correctly. The difference is that the arming of Venezuela is a defensive act of a weak country threatened by a mighty enemy, whereas the arming of Colombia is a monstrous act of aggression of a powerful country against a whole continent.

It is possible that under certain circumstances they might decide to intervene through Colombia. But even that is very risky option. Revolutions do not respect frontiers. A war with Venezuela could lead to the overthrow of Uribe, not Chavez. It would be a signal for the Colombian guerrillas to step up their attacks. The Colombian army would find itself fighting on two fronts. Such a war would be deeply unpopular in Colombia. There are at least one million Colombians in Venezuela. Chavez has given them full citizenship rights. They are in contact with their families and friends back home. In addition there would be the effects throughout Latin America and in the USA itself, where the Latinos are now the biggest ethnic minority, overwhelmingly poor and exploited. How would they react?

Even the assassination of Chavez poses real risks for Washington. To say the least, it is a problematic option. It would unleash revolutionary forces throughout the whole of Latin America and lead immediately to the cutting off of all Venezuelan oil to the US (15 percent of the US supply). Even in Colombia, despite terrible repression against the workers movement, there have been general strikes and factory occupations. The Left Bloc won the local elections in Bogotá. On the other hand, the guerrilla war continues, despite all Uribe's attempts to end it. If the USA pushes Colombia into war with Venezuela, it will merely aggravate all the internal contradictions in Colombia, where Uribe's control on power is not as firm as it appears.

Lessons of Haiti

US imperialism is not sure what to do next. Faced with this wave of opposition, Washington is reacting to events, not dictating them. The policies of US imperialism are being defeated, one after the other. In the past, the situation in Venezuela would have meant military intervention, but direct military intervention is ruled out in the short term. Instead, as we just pointed out, they would like to get other countries in the region to act on their behalf and have attempted to use the OAS Democracy Charter to interfere in Venezuela. But this has led nowhere. Leaders like Lula, who Washington sees, to some degree, as allies, do not dare to do its dirty work in Venezuela for fear of the repercussions at home.

Washington has been reduced to manoeuvring, intriguing, attempting to get some kind of a base through corruption and bribery, mixed with pressure and threats. The only places where they have dared to intervene openly are weak countries in the Caribbean: Grenada and Haiti. Even there the results have not been encouraging. Anyone looking for the true intentions of imperialism need only look to the small island nation of Haiti.

In February 2004, US forces kidnapped the Haitian president Jean-Bertrand Aristide before sending in an occupation force with the help of the French and Canadian imperialists. Aristide was never a genuine revolutionary, and even allowed himself to be used by US imperialism, which tried to use him as a puppet. However, he proved to be an unreliable ally, and so Washington unceremoniously dumped him and instead based itself on the most depraved and vicious gangster elements to overthrow him.

The Haitian events show a similar modus operandi to imperialist actions throughout the hemisphere. Prior to the coup, the western powers redirected aid to anti-Aristide NGOs while the CIA armed, trained, and financed right-wing paramilitary groups. Before the paramilitaries could reach the capital, US and Canadian troops flew in, filled the "power vacuum", and prepared the way for a UN occupation.

Despite the presence of 9000 UN troops and police, the imperialists were unable to stabilise the situation in Haiti. 76 percent of the population lives on less than $2 per day and life expectancy is only 51 years. The poor in the slums still massively support Aristide's Lavalas party despite frequent raids by government backed death squads, backed up by UN troops. There are an estimated 700 political prisoners in Haitian jails, including the leadership of Lavalas.

The imperialist "democrats" pinned their hopes on a rigged election that was repeatedly postponed. But when it was finally held, despite blatant rigging, mass demonstrations forced the Provisional Electoral Council of Haiti to accept René Préval as the next president of Haiti. The mass demonstrations paralysed Port-au-Prince for four straight days, terrified the imperialists. After two long and dark years, the Haitian people have defeated the coup that overthrew Aristide through revolutionary mass action. This was a crushing blow to imperialism and to the forces of reaction on the island.

In the past if there was a problem in any part of the Western Hemisphere Washington would simply send in the Marines. The next day the newspapers would carry the headline: "The Marines have landed and the situation is under control". But now things have changed. The mightiest power in the world finds it difficult to maintain control over even a small and poverty-stricken island with no army. This is a clear reflection of the limits of the power of US imperialism at the present time.

Cuba

In Cuba as well important changes are taking place. The analysis of perspectives for the Cuban revolution demand a specific document, but if one thing is clear it is that its fate is inextricably linked to that of the revolution in the rest of Latin America. The development of the Venezuelan revolution has already meant a respite for Cuba and as the revolution in Venezuela and in the rest of the continent develops, its influence could be bigger. This is something that adds to the worries of imperialism.

After the fall of the Soviet Union, the Cuban revolution was isolated in an internationally hostile environment. It was under the merciless pressure of US imperialism. The cruel economic blockade subjected the masses to intolerable hardship. The fate of the Revolution was in the balance. The collapse of the Soviet Union naturally produced a ferment in Cuba, even at the top levels. It is quite clear that, as in Russia, there are elements that would like to return to capitalism. But on the one hand, Fidel Castro remains implacably opposed to capitalist restoration. On the other hand, there is a huge reserve of support among the masses for the ideals of the revolution, socialism and the nationalised planned economy. So far, the attempts of US imperialism to push Cuba back to capitalism have failed. Castro remains popular and the pro-capitalist elements have been kept firmly in check.

The Venezuelan Revolution has undoubtedly given the Cuban Revolution a new boost. Not only has it provided much-needed oil, but it has also given new hope to the people of Cuba that their long isolation will be broken. The fate of the Cuban and Venezuelan Revolutions are indissolubly linked. They will stand or fall together. A step towards a nationalised planned economy in Venezuela would not only help weaken the pro-capitalist tendencies that exist within the state bureaucracy in Cuba and strengthen those sections which favor the maintenance of the planned economy but could also have an influence on sections of the masses and those sections of the Cuban state apparatus more closely linked to them and with more left wing positions.

Recently, Fidel Castro made a speech in which he warned that the Cuban Revolution is not yet irreversible. Moreover, he stated that the main threat of capitalist restoration is due to internal, not external factors. This is the first time this has been stated so clearly. Castro pointed to examples of bureaucratic corruption, swindling and theft, specifically naming the case of petrol. He called for the setting up of youth brigades to check up on petrol stations.

Capitalist restoration in Cuba would be a disaster, not only for the people of Cuba but for all of Latin America. For the people of Cuba the imposition of a savage, neo-liberal capitalism and market economics would be an appalling reversal. It would signify an economic, social and cultural regression. In a broader sense it would have a depressing effect on the morale of workers and youth everywhere. It would strengthen the hand of imperialism and provide the basis for a new ideological onslaught against socialism on a world scale. It would mean an immediate intensification of imperialist pressure on Venezuela and Bolivia.

The hypocritical western critics of Cuba and the bourgeois opposition in Cuba insistently demand the introduction of "democracy", by which they mean a bourgeois democracy. They want to introduce a system like that of the USA, where the office of President is sold to the highest bidder (in this case a mentally deficient Texas oil billionaire), where Congress is run by venal politicians who represent the interests of the big corporations that buy and sell congressmen like cheap merchandise and where the newspapers and television companies are owned and controlled by a handful of billionaires. Naturally, the demand for the introduction of such a "democracy" is inseparably linked to the demand for the abolition of the nationalised planned economy.

In the 1930s Trotsky predicted that the Stalinist bureaucracy would lead the USSR in the direction of capitalist restoration. The bureaucracy would not be satisfied with its privileged position but would demand that the nationalised planned economy be dismantled in order to convert themselves into private proprietors. The right of inheritance - the legal right to pass their wealth and privileges on to their children - played a key role in this. Now, after a long delay, this is what has actually happened.

However, Trotsky thought that capitalist restoration in the USSR could only be accomplished through civil war. He predicted that the bureaucracy would split along class lines, with the emergence of a left faction (the "Reiss faction") on the one hand, and a right wing pro-capitalist wing (the "Butenko faction"). But events took a different turn. Stalinism in the USSR lasted much longer than Trotsky had imagined possible. The old revolutionary traditions were completely destroyed. The degeneration of the bureaucracy reached unheard-of proportions. Corruption and bureaucracy devoured a colossal part of the wealth produced by the Soviet working class and undermined the successes of the planned economy. As a result, the whole thing collapsed under its own weight. A single push was sufficient to bring down the bureaucratic regimes in Eastern Europe, and the same process in Russia took only a few years longer.

In Cuba there are important differences with what happened in Russia. In Russia the memories of the traditions of October were blunted and destroyed. This facilitated the task of the counter-revolution. By contrast, the Cuban Revolution took place within living memory and many of the old guard are prepared to fight capitalist restoration. A large part of the masses are also prepared to defend the gains of the Revolution. This means that a "cold" transition to capitalism is far less likely than in Russia and Eastern Europe.

Fidel Castro and his supporters are attempting to resist capitalism and defend the nationalised planned economy. That is immensely important. But the methods they want to use will not solve the problem. Only a regime of Leninist workers' democracy can do this. The attacks on the new rich, the corrupt elements, bureaucracy, etc., can only be successful if they are linked to the programme of workers' democracy, that is, the programme that Lenin advanced in 1917 and was the basis of the 1919 programme of the Russian Communist Party that was abolished by Stalin after Lenin's death.

What is needed is not the hypocritical caricature of bourgeois democracy, but the encouragement of criticism and debate, open to all tendencies that accept the nationalised planned economy and are prepared to defend the Cuban Revolution and fight capitalist restoration. In this debate the Trotskyists must participate as a legitimate current in the Communist family. They will offer a united front to those Cuban Communists who are fighting capitalist restoration. They will prove in action that they are the best and most loyal defenders of the Cuban Revolution.

Above all, what is needed is to extend the socialist revolution to the rest of Latin America, breaking the isolation of the Cuban Revolution once and for all. That, after all, was the idea of Che Guevara - an idea for which he gave his life. The conditions are now immeasurably more favourable for the victory of the socialist revolution in one country of Latin America after another. It is not a question of "exporting revolution" (as if revolutions could be exported, like sacks of coffee). The objective conditions for socialist revolution are fast maturing - or have already matured - in a number of countries of Latin America. For this an audacious and courageous leadership is necessary: a leadership in the spirit of Bolivar and Guevara, not of cowardly reformists.

The indigenous movement in Latin America

We must pay closer attention to the indigenous movement, which has existed in an organized form for years, and which plays an increasingly more relevant role in several Latin American countries. The indigenous movement in Latin America poses challenges to Marxists as a particular variant of the national question combined with the agrarian revolution. The indigenous peoples of the Americas have been oppressed since the arrival of European colonists over 500 years ago. Now, a significant proportion of the indigenous peoples are to be found amongst the poor peasantry. However, the same as within any national grouping, there are also class divisions within the community; indigenous people are to be found amongst the urban poor and there are also rich peasants and even bourgeois.

We are in favour of defending the social and political rights of all of the oppressed layers in society, and particularly the indigenous population. We also give full support to the agrarian revolution of the poor peasantry. The expropriation of the landowners, access to the land and its common use by the indigenous communities, are all part of the revolutionary socialist programme. In reality, the landowners and capitalists in the cities make up one and the same class. The poor indigenous peasants in the countryside, and the working class in the cities, face the same enemy. Therefore, any attempt to counterpoise the aims of the workers and those of the indigenous, (without also recognizing the class divide within the indigenous community), has reactionary consequences. Only the united revolutionary struggle of the workers, the poor peasantry, and all oppressed layers in society can successfully defeat the landlords and the capitalists.

Unfortunately, some of the leaders of the indigenous movement have fallen into the separatist trap of dividing the indigenous people from the working class and the fight for socialism. Whether they come from a bourgeois or ultra-left perspective, they see the indigenous peoples as a homogenous classless mass. We reject any tendencies that work to divide and set the workers and peasants of the same country against each other, and thus objectively strengthen the counterrevolutionary plans of the national bourgeoisie and imperialism, especially in a revolutionary situation.

Only within the framework of a socialist federation of Latin America can the indigenous people of the continent, with their rich and ancient culture, make up for centuries of oppression, discrimination and genocide, and flourish and reach all their potential development.

MERCOSUR, Free Trade Agreements, and ALBA

The failure of the US government at the Mar del Plata summit, where they could not impose an agreement on the FTAA, together with the announcement of Venezuela's entry into MERCOSUR, appear to have given new life to the idea of Latin American integration side by side with the large imperialist trade blocs of the United States and Europe.

MERCOSUR (Brazil, Argentina, Uruguay, and Paraguay) is an economic bloc created as a customs union, based on the idea of common external tariffs on goods imported from outside the MERCOSUR. However, after the economic crisis which plagued the region at the end of the 1990s, MERCOSUR entered into crisis. And this continues to be the situation in spite of the present economic recovery.

The underlying problem is the trade conflict that sees Brazil and Argentina pitted against each other, and which prompted the latter to impose numerous safeguards and tariffs to limit Brazilian imports into the country. This is in addition to the threats by the Uruguayan and Paraguayan governments to abandon MERCOSUR and to sign their own Free Trade Agreements with the United States, reflecting the scant benefits that the weak Uruguayan and Paraguayan bourgeoisies have been able to obtain from this body. However, the manoeuvres of the US also play a part in all this as it attempts to put a wedge into the MERCOSUR with the aim of breaking it up, to weaken Brazil and hinder its ability to play a leading role in the region.

If MERCOSUR still survives, it is due to two factors. Firstly, it benefits the multinationals operating on both sides of the Brazilian and Argentine border, for they pay lower tariffs when they exchange parts and supplies. Secondly, it is politically useful to the Brazilian bourgeoisie who use MERCOSUR as an economic-political bloc with themselves as the leading power within the region, thus enhancing their political prestige, which they use to demand a role in world diplomacy.

In the long run, the perspectives for MERCOSUR are quite bleak. In the event of a deep global economic recession, which is inevitable - which would have a special impact on the Southern Cone ‑ the present economic and commercial contradictions between Argentina and Brazil will be multiplied a thousandfold, as the market would be drastically cut back, forcing each national bourgeoisie to save itself at the cost of all the others. These tensions, which today have already assumed almost the character of a trade war, would reach unbearable proportions. In such conditions, a very likely outcome would be the break up and disappearance of MERCOSUR.

Venezuela's entry into MERCOSUR will not change this perspective. It must be made clear, that rather than simply seeking economic benefits, Chavez's government is trying to use entry into MERCOSUR as a diplomatic weapon against the manoeuvres of US imperialism to isolate Venezuela internationally.

Another factor associated with the crisis of MERCOSUR is the increase in the inter-capitalist contradictions between Brazil and US imperialism, which reached their maximum expression in Brazil's opposition to the FTAA. Brazil is the economic and military power of Latin America, and is trying to establish itself as a regional imperialist power, and for this it needs to maintain a degree of independence from US imperialism, balancing between it, European imperialism, and China. By opposing the FTAA, it is trying to safeguard the interests of the large Brazilian landowners and direct State contracts to its own national bourgeoisie. The "anti-FTAA" position of the Kirchner government is very similar to this.

In response to this, the United States is forcing the other Latin American countries to sign bilateral Free Trade Agreements. Through these agreements the US is trying to strengthen its own position in the region and put up obstacles to the penetration of European imperialism and nascent Chinese imperialism; and also curtail the hegemonic political and economic aspirations of Brazil within the region. They have already signed bilateral Free Trade Agreements with Peru and Colombia (in addition to those already signed with Mexico, Central America, and Chile), and they are also negotiating one with Ecuador. All this is already provoking numerous mass protests in all of these countries, creating more political and social unrest in the region.

Faced with the predatory character of these imperialist economic treaties, such as the FTAA or the Free Trade Agreements, as an alternative the Chávez government is proposing a mechanism of integration, aid, and solidarity between Latin American countries (ALBA), exchanging oil and other natural resources for food, education services, and healthcare. Some steps forward, with very positive results, have already been made in this in Venezuela and Cuba, and now also in Bolivia. But all this is only a pale reflection of the enormous potential that would open up for the poor masses of Latin America if the resources and economies of these countries were integrated and brought together under a centralized democratically controlled plan. It would be naïve, however, to think that the other Latin American countries, governed by direct or indirect agents of the local bourgeoisie and imperialism, would be interested in agreements of this type.

On a capitalist basis, it is impossible to achieve a genuine union and economic integration of Latin America because of the antagonistic national interests of the local bourgeoisies and of the pressure of imperialism.

The Latin American Revolution

The most advanced region in the world from a revolutionary point of view at the present time is Latin America. There are revolutionary movements developing across the continent. What we are faced with is not the Venezuelan revolution but the Latin American Revolution, an essential link in the chain of the World Revolution. The situations in Ecuador and Bolivia are not unconnected with Venezuela. The American imperialists do not think that, and neither do we. The whole revolutionary process is organically interconnected. The objective conditions for revolution are maturing rapidly everywhere in Latin America. The subjective factor is another matter.

Latin America is therefore the key to the world revolution, and the Venezuelan revolution is the key to the Latin American revolution. That is why US imperialism is determined to crush the Venezuelan revolution before it spreads to other countries. Hugo Chavez has said publicly that Trotsky was right against Stalin when he said that the socialist revolution could not succeed if it remained isolated in one country. The Bolivarian revolution, if it is to succeed, must not halt halfway. It can only succeed by expropriating the landlords and capitalists and then appealing to the workers and peasants of the whole of Latin America and the rest of the world to follow the example of Venezuela.

The Bolivarian revolution, despite its incompleteness, its confusions, its internal contradictions, serves as an example to the rest of Latin America. Chavez has launched a television service, Telesur, which is capable of reaching all of Latin America and even parts of the United States. Washington protests loudly about "interference in the affairs of other countries", while conveniently forgetting that CNN broadcasts its propaganda to the whole world, not to mention other, more direct forms of interference practiced by the CIA all over the world.

The slogan "For a Socialist Federation of Latin America" now acquires a vital importance. The revival of interest on Bolivar's ideas has placed the question of Latin American unity firmly on the agenda. The struggle against the FTAA and the idea of Latin American integration are examples of this and they are generating great expectations amongst the masses in Latin America. The striving for unity on the part of the masses has a revolutionary and anti-imperialist character. The workers and peasants, the revolutionary youth and progressive intelligentsia, rightly conclude that the Balkanisation of Latin America renders it weak and places it at the mercy of US imperialism.

The question that must be asked is: how does it come about that this mighty continent, which is overflowing with minerals, oil, cattle and wheat, and where all the necessary conditions exist for creating a paradise on earth - how does it come about that it has been reduced to a living hell for millions of men and women? For almost two centuries the countries of Latin America have been formally independent. But this so-called independence is merely a fig leaf to cover a slavish dependence on the United States and its giant transnational corporations that have drained the lifeblood of the continent more effectively than a vampire bat.

What is the reason for the prostration of a mighty continent? Only this: that after the death of Simon Bolivar, the oligarchies - the landlords, bankers and capitalists - of Latin America betrayed his dream of a united Latin America and Caribbean and instead divided the living body of the continent into a series of mini-states that had no real reason to exist. The real basis for the slavery of Latin America is its Balkanisation. And the real basis for this Balkanisation is the rule of the oligarchies. No advance is possible unless this situation is abolished. This can only achieved by decisive revolutionary action.

In the theses of the Fourth International "War and the Fourth International" (June 1934) Trotsky wrote:

"South and Central America will be able to tear themselves out of backwardness and enslavement only by uniting all their states into one powerful federation. But it is not the belated South American bourgeoisie, a thoroughly venal agency of foreign imperialism, who will be called upon to solve this task, but the young South American proletariat, the chosen leader of the oppressed masses. The slogan in the struggle against the violence and intrigues of world imperialism and against the bloody work of native comprador cliques is therefore: the United States of South and Central America."

The Marxists are unconditionally in favour of the unification of Latin America, but we propose one amendment to the idea of Bolivar. The last 200 years have proved conclusively that under capitalism there is no possibility of uniting Latin America. Since the death of Simon Bolivar, the corrupt and degenerate bourgeoisie of Latin America have sold their heritage for a mess of pottage. The landlords, bankers and capitalists of Latin America are merely the local office boys of imperialism. They are incapable of playing the same role that was played by the French and English bourgeoisie on the past. They represent a barrier to progress everywhere. This is clearly shown by the conduct of the rotten counter-revolutionary bourgeoisie in Venezuela and their cousins in Bolivia. No progress is possible while economic power remains in the hands of the landlords and capitalists. This power must be broken. The only class that can do this and achieve the goal of Bolivar is the working class. Only when power is in the hands of the workers can the monstrous artificial barriers be torn down and Latin America united - as a Socialist Federation.

A new revolutionary wave

Shakespeare wrote: there is a tide in the affairs of men. These words are equally applicable to the class struggle, which proceeds in ebbs and flows over long historical periods. In the 1970s, there was a major wave of class struggle internationally. Beginning with 1968 in France it swept Europe, affecting one country after another: Portugal, Spain, Greece, Italy, and Britain. There was a revolution in Pakistan where the working class played the leading role, as in Russia in 1917. There was a revolutionary situation in Chile and Argentina.

In all these countries, the advanced workers felt that power was within their grasp. They were not mistaken. In Portugal, they had the power. The London Times published an editorial article with the title: Capitalism is dead in Portugal. The workers had the power but they lost it because of the conduct of the leadership of the Socialist Party and Communist Party. The same story was later repeated in Spain and Italy, where power was within the grasp of the working class and it slipped through their fingers.

In Pakistan, Bhutto's policies undermined the revolution and led to his own murder and the coming to power of the brutal dictatorship of Zia al Huq. The revolutionary wave in Latin America was derailed in part by reformism, in part by the incorrect tactics of urban guerrillaism. The result was the installation of vicious military dictatorships in Chile, Argentina and Uruguay. He movement was thrown back for decades.

At that time the ruling class in "democratic" Europe was preparing for civil war and military dictatorship, not just in Italy but also in Belgium and even in Britain. There were military conspiracies, like the Gladio conspiracy. This is a warning for the next period. Many workers in the advanced capitalist countries think that democracy is something fixed for all time. But when circumstances demand it, the ruling class can change from democracy to dictatorship with the ease of a man changing compartments on a train. The bourgeoisie can tolerate democracy as long as its rule is not threatened, but not otherwise.

In the coming period, there will be an enormous polarisation of society to the left and to the right. Together with the growth of the revolutionary tendency and the class struggle we will also see the growth of fascist and Bonapartist tendencies. The attacks on democratic rights that are being launched in the name of the so-called "war on terror" are merely an anticipation of this fact. But that does not mean that reaction is an immediate perspective. Long before the ruling class moves to open reaction, the working class will have had the chance to change society many times.

Under these conditions, consciousness can change like lightning. It is a general law that consciousness lags behind events. Human consciousness, contrary to the belief of the idealists, is profoundly conservative and resists change and new ideas. But then at a certain point, it catches up with a bang. That is precisely what a revolution is. The consciousness of the working class has lagged behind events for the last 20 years, especially in Europe and the USA. There is an objective reason for this.

When the workers have the chance to take power and fail to take power, it has a profoundly demoralising effect on the class, and especially on its advanced layer. It takes a long time to recover. Part of the problem is that the vanguard of the working class, the people who led the struggle in the decade of the 1970s, the old leadership, has been burnt out and largely destroyed. Even worse, this layer has become an obstacle. They are affected by a mood of depression, pessimism and demoralisation. They have lost hope in the working class and have no perspective.

The economic boom subsequently reinforced these reactionary moods in capitalism in the 1980s and 1990s. The workers' organisations themselves (the unions and the socialist and communist parties) fell even more under the pressure of the bourgeoisie and bourgeois ideology in this period. They become obstacles in the way of changing society. This period set the final seal on the reformist degeneration of the Communist Parties and Social Democrats. Freed from the pressure of the working class, they swung to the right.

For us, these mass parties are not part of the subjective factor but rather part of the objective factor - and a not unimportant part. There was no point of reference for the youth and the most advanced workers. This is a big part of the explanation for the "lag in consciousness". It has become fashionable in the circles of left intellectual snobs to blame everything on the "low level of consciousness of the workers". Incredibly, there are even people in Venezuela today who talk like this. But it is entirely wrong to blame the masses for the failures of the leadership.

For the whole of the last period, not one of the leaders was proposing any programme or perspective of socialism, let alone talking of taking power. The unions were doing nothing, while the bosses were destroying hard-won rights and conditions. The left parties were offering no alternative to bourgeois reactionaries like Thatcher. On the contrary, they were imitating the policies of Thatcher, embracing "new realism" (i.e. market economics) and expelling the Left.

Workers are realists. Under these conditions, when they got no lead from their organisations, they began to look for individual solutions to their problems. The boom in the economy permitted them to increase their living standards, albeit on the basis of an enormous increase in absolute and relative surplus value: longer hours of work, speed-ups, greater intensity of labour, increased productivity, etc.

For a temporary period, they were prepared to accept the tyranny of the bosses, to accept all the impositions: sped-ups, sackings, compulsory overtime, attacks on trade union rights, etc. Seeing no alternative, they put their heads down and proceeded to kill themselves working, with reduced holidays, work at weekends, and long hours of overtime. The longer working hours and the consequent exhaustion after a hard day's labour ruled out participation in the unions or workers' parties. This in turn reinforced the stranglehold of the right wing, which in turn further alienated the workers.

But this search for individual solutions could not last. It has led to the most negative consequences: nervous breakdowns, physical and mental illness, a huge increase in work accidents, etc. The massive increase in absolute and relative surplus value has reached its limits. The capitalists can't squeeze forever. Sooner or later a point is reached when the workers say: enough is enough! Now we see the beginnings of a reaction on the part of the working class, reflected in a wave of strikes internationally. The whole process will turn into its opposite.

A revolutionary perspective

Lenin once wrote an article entitled Inflammable Material in World Politics. There is now plenty of inflammable material around the world. There is not a sector of the world that isn't affected. There are constant shocks and instability: war, terrorism, violence, and crises. What does this reflect? It expresses a fundamental impasse of a socio-economic system that is reaching its historical limits.

Capitalism has reached an impasse. Everywhere we see the symptoms of a terrible decline. Many people see the negative symptoms: the appalling violence and loss of life, the waste and corruption, the injustice and inequality, the cultural bankruptcy and spiritual emptiness. They see all this and despair. But Marxists approach history not sentimentally or moralistically, but scientifically and dialectically.

A boom that destroys employment and is not accompanied by increased living standards but rather with cuts and merciless pressure on the workers has led to a revival of the class struggle everywhere. This is the stage we are passing through: a general reawakening of the working class and an increase in class struggle. From the point of view of the class struggle a deep slump accompanied by high unemployment may cause a reduction in strike levels, but there could be a wave of factory occupations, and people will draw political conclusions - revolutionary conclusions. This is a finished recipe for the class struggle, which at a certain stage must find its reflection within the mass organisations of the class - both the trade unions and the political parties. It opens new and unprecedented opportunities for the Marxist tendency everywhere, provided we work correctly and do not make too many mistakes.

Taken together, all the factors mentioned above offer powerful evidence that we have reached a major turning point in the world situation. The general instability is reflected in sudden and sharp changes in the consciousness of the masses. There is a growing awareness that the present crisis is not something minor or conjunctural, but permanent and deep-seated. The idea gains ground that "something is seriously wrong with the world". What this reflects, in a confused way, is a questioning of the capitalist system itself. The task of the Marxists, the most conscious and resolute section of the class, is to make conscious the unconscious or semi-conscious strivings of the workers to change society.

This idea naturally first expressed itself in a revolt of the mainly middle class youth. It reflected itself in such developments as the anti-globalisation demonstrations, the anti-war demonstrations and movements like the WSF. These movements did not possess any independent significance, but were merely symptoms of the growing crisis of world capitalism. The political confusion of the ideas expressed by these movements, their amorphous character and lack of clarity, perfectly expressed the characteristics of the first stage of the revolution. But now they are being replaced by a far more serious movement, which corresponds to the early awakening of the working class.

The main reason for the delay in the movement of the proletariat is the complete bankruptcy of the leadership of the traditional mass organisations: the Stalinists and Social Democrats. It is the supreme irony of history that, precisely at the moment when the pendulum is swinging sharply to the left, all these people have decided to abandon socialism and embrace class collaboration and "moderation". Blair is only the most obvious example of this. But to a greater or lesser degree, all the other "socialist" and "communist" leaders are rushing down the same road. This at a time when the workers and youth are demanding a radical solution to their problems.

There are the beginnings of a change in the international situation. Of course, it is impossible to be precise about timing, except to say that it will be relatively prolonged. The reason for the protracted nature of the period is, on the one hand, the profound crisis of the system and the weakness of the forces of reaction, on the other hand, the absence of the subjective factor: the crisis of leadership of the proletariat. This means that the situation can be prolonged for years, with ebbs and flows.

In every country the rhythm of the class struggle is accelerating. It will not unfold in a straight line. Periods of advance will be followed by periods of tiredness, apathy, defeats, and even reaction. Every defeat will be only the prelude to new struggles, until there is a final decision one way or another. Time and again the working class will move to change society. This will lead to the emergence of revolutionary or pre-revolutionary situations in one country after another. Inevitably the question of power will be posed. In Latin America it is a fact already.

It is the duty of the Marxists to provide this clarity, to explain to the workers what is necessary, to correct the mistakes and defend the correct programme and strategy. But this cannot be done by sectarian pontificating from the sidelines. A correct programme is absolutely necessary, but this by no means exhausts the problem. It is necessary to find a road to the masses, to establish links with them, to create the conditions for a fruitful dialogue between the Marxists and the workers, beginning with the most active and conscious elements (the proletarian vanguard). And it should not be necessary to point out that in order to reach the masses, it is necessary to go wherever the masses are.

The reason for our successes is the power of our ideas: the ideas of Marxism. Marxist theory is an extraordinarily powerful tool. It alone enables us to create the cadres who can connect with the advanced guard of the workers and youth, who in turn will link us indissolubly to the masses. In this way we are building the forces necessary to carry through the world revolution. However, ideas in themselves are not enough. We must have the will to succeed in the battle we have before us: the main task is to build the International Marxist Tendency.

We must recruit and educate the cadres from the revolutionary youth, the militant workers and the best of the older generation of fighters who have retained their fighting spirit and class-consciousness. In order to build the revolutionary current a bold attitude is needed. In a revolutionary tendency there is no room for scepticism. The leadership must set the correct tone; we must educate the ranks in the spirit of revolutionary optimism. We must build the forces of Marxism on a world scale. This work will eventually be crowned with success. Sooner or later the working class will come to power in one country or another. The victory of the proletariat in just one country will transform the whole situation on a world scale.