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Globalization and the International Working Class: A Marxist Assessment

Mehring Books is pleased to announce the publication of Globalization and the International Working Class: A Marxist Assessment. This volume is a comprehensive reply to the Spartacist League and other so-called left and radical groups which claim that the global integration of capitalist production is simply a myth invented by the bourgeoisie. The statement not only answers, but exposes the class basis of Spartacist's claims that the technical revolution in computers, communications and transportation over the last 20 years has not fundamentally changed the structure of world capitalism. According to Spartacist, the economic and political power of the nation-state remains undiminished. On this basis, it maintains that organizations based on a national perspective, including the trade unions and the national movements, provide the only viable perspective for the working class. The International Committee's statement painstakingly evaluates the bitter historical experiences of the working class with the trade unions and national liberation movements and with Stalinism as practiced in the former Soviet Union and China. It also relates the nationalist perspective of the Spartacist League to the group's origins in the 1960s and its subsequent political evolution. In the form of a polemic, Globalization and the International Working Class: A Marxist Assessment provides a detailed Marxist analysis of the significance and the profoundly revolutionary implications of globalized production. It defines the essential programmatic and political tasks facing the international working class. Globalization and the International Working Class: A Marxist Assessment Statement of the International Committee of the Fourth International http://www.wsws.org/exhibits/slreply/index.htm ISBN 1 875639 27 6 168 pages, index Price: US: $14.95 Australia: $14.95 Britain: 8.75

Table of Contents Introduction Part One Globalization and the dynamics of capitalist development Global economy versus the nation-state system A qualitative change in the structure of world capitalism

Globalized production and the trade unions Capitalism and the origins of the nation-state Spartacist and the "stockholders who care" International finance vs. the capitalist state The rise and fall of the Bretton Woods system Part Two Marx and the "iron law of wages" The rejection of a revolutionary perspective A separation of immediate demands from the struggle for socialism Spartacist denies the fall in living standards Economic nationalism and American chauvinism Globalized production and proletarian internationalism Part Three Transnational production, the nation-state and the origins of war Capitalism strains against the confines of the nation-state Karl Kautsky and "ultra-imperialism" Spartacism and Kautskyism Fear of globalization's revolutionary implications Part Four The Spartacist League and the trade unions Marxism and the trade union question The antagonism between the unions and revolutionary Marxism Engels and the English unions The lessons of German social democracy

The historic degeneration of trade unionism Part Five Mythologizing the CIO Spartacist's defense of the AFL-CIO The degeneration of the unions -- an international phenomenon A wave of defeats and betrayals Strategy and tactics, Marxism vs. opportunism A crude apology for bureaucracy Part Six On the national question Globalization and the "new nationalism" Lenin's conditional attitude toward self-determination Where Spartacist champions self-determination Promoting Quebeois nationalism Sri Lanka and the Tamil question The Mexican crisis: Marxism vs. petty-bourgeois nationalism The perspective of permanent revolution Part Seven Spartacist and Stalinism The USSR's dissolution and the crisis of capitalism National state socialism The Chinese "workers state" Part Eight Conclusion

Introduction At the end of the 20th century, world capitalism is undergoing structural changes as fundamental and far-reaching as those associated with the industrial revolution at the end of the 18th century and the rise of monopoly capital in the final years of the 19th. The advent of transnational corporations, which operate on a world scale and produce directly for the world market, is the central feature of a new and higher international division of labor, based on an unprecedented global integration of production. The world economy today is characterized by the daily movement of vast quantities of capital across national borders, as international financial institutions scour stock and bond markets for the highest return on their investments. These sums dwarf the capital at the disposal of any national government or central bank. Transnational corporations coordinate production, design, marketing and management facilities on many continents and exploit a labor market that is increasingly global in character. Just as the invention of the steam engine fueled the industrial revolution, revolutionary advances in technology, associated with the microchip and the integrated circuit have facilitated the globalization of production and led to an explosive development of computers and telecommunications. Combined with a dramatic lowering of transportation costs, the new technology has enabled corporations to organize the production of commodities across national, and even continental divides. Unlike the multi-national corporation, whose foreign outposts produced almost entirely for the national markets in which they were located, the far-flung facilities of the modern transnational corporation produce for the world market. Far from opening up new historical vistas for the profit system, these economic and technological developments have raised, to an unprecedented level, the basic contradictions that have afflicted world capitalism throughout the 20th century. They have greatly intensified the conflicts between world economy and the capitalist nation-state system, and between social production and private ownership. During the post-war economic boom, a series of regulatory mechanisms allowed the containment of these conflicts. But the vast changes in production processes, communications and international finance over the past 20 years have rendered the nation-state increasingly obsolete, so far as the organization of production is concerned. This signifies the emergence of a new period of mass revolutionary struggles by the working class. As Marx explained almost 150 years ago, the origin of revolutions lie not, in the first instance, in changes in consciousness, but rather in objective social processes. It is these that constitute the driving forces behind those shifts in the political orientation and consciousness of broad masses that characterize a revolutionary period: "At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production, or this merely expresses the same thing in legal terms with the property relations within the framework of which they have operated hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an era of social revolution." 1

To the short-sighted observer, who cannot see beyond the disorientation afflicting the workers' movement in the wake of the collapse of the Soviet Union and the breakdown of the old parties and trade union organizations, the perspective of socialist revolution appears totally unrealistic, or, at best, consigned to the indefinite future. But, as Marx further elaborated: "Just as one does not judge an individual by what he thinks about himself, so one cannot judge such a period of transformation by its consciousness, but, on the contrary, this consciousness must be explained from the contradictions of material life, from the conflict existing between the social forces of production and the relations of production."2 The disintegration of the Stalinist regimes and the collapse of the traditional workers' organizations have given rise to confusion in the workers' movement. But closer examination reveals that its origins lie in the deep-going crisis of the nation-state itself, resulting from the globalization of production. In other words, the collapse of the old organizations and the perplexity this has produced in the workers' movement are, in the final analysis, the outcome of historical processes that are preparing the way for revolutionary struggles. It is not the perspective of socialism that has collapsed, but the nationalist programs to which the working class was confined for a whole historical period. The breakdown of the Stalinist regimes has demonstrated the unviability of the program of national autarky pursued by the bureaucracy under the banner of "socialism in one country," while the reformist programs of the trade unions and labor parties, based on an expanding and protected national economy, have been shattered by the sweeping changes in the organization of capitalist production. The International Committee of the Fourth International has, during the past decade, developed an analysis of the globalization of capitalist production and its implications for the working class and the revolutionary socialist movement. The World Capitalist Crisis and the Tasks of the Fourth International, the perspectives resolution adopted by the International Committee of the Fourth International in August 1988, stated: "It has long been an elementary proposition of Marxism that the class struggle is national only as to form, but that it is, in essence, an international struggle. However, given the new features of capitalist development, even the form of the class struggle must assume an international character. Even the most elementary struggles of the working class pose the necessity for coordinating its actions on an international scale. It is a basic fact of economic life that transnational corporations exploit the labor power of workers in several countries to produce a finished commodity, and that they distribute and shift production between their plants in different countries and on different continents in search of the highest rate of profit... Thus, the unprecedented mobility of capital has rendered all nationalist programs for the labor movement of different countries obsolete and reactionary. Such national programs are invariably based on the voluntary collaboration of the labor bureaucracies with 'their' ruling classes in the systematic lowering of workers' living standards to strengthen the position of 'their' capitalist country in the world market."3 This analysis, pioneered by the ICFI, has been verified in the bitter experiences of the working class, as well as by innumerable empirical studies of the workings of global capitalism.

Even as these words are being written, the financial collapse of the East Asian "tiger" nations is sending shock waves through every part of the world economy, triggering banking and industrial failures in Japan and calling into question the stability of stock markets in Europe and the US. Western bankers and political figures are issuing dire warnings that the anarchic workings of the market, in today's globalized economy, threaten to plunge the world into a deflationary spiral similar to the Great Depression of the 1930s. However, within what is generally defined as the "left" or "radical" movement specifically those organizations which originated as part of the radicalization of middle class layers in the 1960s the overwhelming consensus is that nothing fundamental has changed in the nature of capitalism and globalization is merely a myth invented by the bourgeoisie. (Here it is necessary to insert a note on political terminology. While making use of terms such as "left" and "radical" in reference to these organizations, we do so with the understanding that there is nothing genuinely radical, let alone Marxist, in their politics. Their evolution has brought them to very right-wing political positions. Their embrace of the labor and trade union bureaucracies, and their orientation to the capitalist state itself, is an expression of the movement to the right, over an entire period, of a definite social element, perhaps more accurately described as the milieu of petty-bourgeois ex-radicals.) The evaluation of the significance of the globalization of production, and its implications for the struggles of the working class, has become the dividing line between Marxism and all forms of middle class radicalism. Whatever the particular differences among them, the defining feature of all the radical tendencies has been their inherent nationalism. This has received its most concrete expression in their deep-seated hostility to the development of an international strategy, based on the independent role of the working class. Denouncing such a perspective as "unrealistic" and "sectarian," the left petty-bourgeois tendencies adapted themselves to the Stalinist and social democratic bureaucracies that dominated the labor movement in the advanced capitalist countries, while hailing the petty bourgeois nationalist movements in the oppressed countries as leaders of the struggle for socialism. These groups had their heyday in the post-war boom when a nationalist perspective appeared to bring certain immediate gains. It seemed far more "realistic" than the fight for a program based on the long-term historical interests of the working class. But, once again, the contradictions of capitalism have proven more powerful than the perspectives of the opportunists. With the disintegration of the traditional parties and "left" labor and trade union leaderships, under the impact of globalization, these radical tendencies have been waging a desperate campaign in support of the viability of the national state, and their program of applying pressure to it. They claim that globalization was conjured up to deceive workers and discourage them from pursuing a policy of trade unionist pressure on the national state, which, they insist, is the only possible strategy for the working class. A central and universal feature of their rejection of internationalism is a fetishistic attitude toward the trade unions. They demand that the working

class accept the authority of the unions and denounce any struggle to break the grip of the trade union bureaucracy. By virtue of its origins and development, the Spartacist League, headed by James Robertson, is the quintessential representative of American middle class radicalism. Writing on behalf of the left fraternity as a whole, this organization last year published a series of four articles attacking the ICFI, the Socialist Equality Party in the US and its national secretary David North. Entitled The 'Global Economy' and Labor Reformism, How David North Embraces Karl Kautsky , these articles amount to a virtual manifesto, issued on behalf of the entire radical milieu. The central propositions advanced by the Spartacists are as follows: 1) Globalization does not represent a qualitative change in the structure of world capitalism. The economic and political power of the nation-state remains intact and globalization is a myth, a propaganda campaign initiated by the bourgeoisie to convince the working class that resistance to attacks on wages and conditions is futile. 2) Consequently, the program of trade unionism aimed at securing reforms through the application of pressure to the national state remains viable. 3) The betrayals of the unions are not the outcome of objective processes rooted in world economy and the nature of the unions themselves, but are simply the product of subjective decisions taken by the trade union leaderships. 4) The petty-bourgeois nationalist forces in the former colonial countries are the real revolutionary forces, and the perspective of mobilizing the working class on a program of socialist internationalism is an abstract and unrealizable utopia. Underpinning all of these political positions is the repudiation of the Marxist method of historical materialism, which continually seeks to uncover the objective processes which lie at the base of political changes. Rather, the Spartacists proceed with a subjectivist method in which politics is reduced to the outcome of the motives and decisions of individual leaders. An examination of the Spartacist articles, therefore, will make clear the class chasm between the program of Marxism and the outlook of petty-bourgeois radicalism, and in that way contribute to the education of a new generation of revolutionists.

Part One I. Globalization and the dynamics of capitalist development The Spartacists' central assertion is that globalization is nothing more than a propaganda campaign aimed at intimidating the working class. Accordingly, they maintain that, insofar as changes have taken place within the world economy, these do not represent a qualitative transformation. The internationalization of finance capital is "hardly new," and in many respects, the world economy was more "globalized" in the period prior to World War I than it is today. "For the past few decades ... the world capitalist economy has been returning to the norms of the pre-1914 imperialist order. To maintain a sense of perspective, one should understand that only in the early 1970s did the ratio of world trade to global production once again reach the level attained in 1914, on the eve of the first imperialist war."1 The Spartacists argue that the pre-1914 gold standard, and the rapid growth of international trade, brought about such an integration of the world economy that the idea that "the internationalization of finance capital is a dominant feature of the contemporary profit system, is hardly new."2 The operation of the gold standard, they insist, ensured a "degree of financial integration among the advanced capitalist countries that has never been matched since."3 At one level the Spartacists' arguments are simply ridiculous. It is hardly possible to assert that an economy in which international telephone calls were only just beginning to be made and then with great difficulty is, in any meaningful sense, more globally integrated than one where telecommunications systems are used to operate production processes across national borders and instantaneously transfer billions of dollars of capital from one end of the world to the other. Moreover, to claim that the pre-1914 economy was more internationalized than today, based on the fact that international trade or investment flows formed a higher proportion of Gross Domestic Product (GDP), is to ignore the fact that large portions of the globe were only just beginning to be integrated into the capitalist economy at the turn of the century. There is a sense in which the present phase of capitalist globalization represents a return to the past. However, as a review of the economic history of the 20th century will show, this does not confirm the Spartacist League's arguments concerning the viability of the nation-state and the trade union form of organization. On the contrary, it demolishes them. Nothing much can be learned with the Spartacist method of ripping statistics out of their historical context and mechanically comparing one period with another. It is necessary to examine the dynamics of capitalist development. Such an examination

does not show that world capitalism was more globally integrated in the pre-World War I period. Rather, it reveals that, in a fundamental sense, world capitalism is returning, at a higher level, to the path of development which it began in that period. A recent report by the International Monetary Fund underscores the dynamic growth of the world economy prior to World War I: "The period from the mid-nineteenth century to World War I exhibited relatively rapid growth in world trade, as the expansion of exports (3.5 percent a year) significantly outpaced that of real output (2.7 percent a year). The share of exports in world output reached a peak in 1913 not surpassed until 1970. Growth in trade occurred partly as a consequence of reduced tariffs and greatly reduced transportation costs, reflecting the proliferation of railroads and steamships. The period also witnessed a marked convergence of commodity prices across countries... "In the 50 years before World War I, there was a massive flow of capital from the core countries of western Europe to the rapidly developing economies of the Americas, Australia, and elsewhere. At its peak, the net capital outflow from Britain represented 9 percent of GNP (Gross National Product) and was almost as high from France, Germany, and the Netherlands. This compares with the peaks in Japan's and Germany's current account surpluses in the mid- and late 1980s of 4-5 percent of GDP. Before World War I, private capital moved without restrictions. Much of it flowed into bonds, financing railroads and other infrastructure in the new world and into long-term government debt, although there also was substantial foreign direct investment."4 But this process of internationalization did not lead to a harmonious development of the productive forces. On the contrary, it brought about the breakdown of world capitalism and the eruption of World War I. And this had far-reaching political consequences. With the outbreak of war, the real content of the national-reformist perspective of the parties of the Second International and the trade unions, which had dominated the movement of the working class prior to the war, was laid bare, as these organizations lined up to support their own ruling classes. Furthermore the eruption of the historic crisis of capitalism, produced by the internationalization of economic processes and taking the form of war between the imperialist powers, gave rise to explosive social convulsions. These changed the balance of forces between nationalist opportunism and socialist internationalism in the workers' movement. The internationalist tendency, led by Lenin and Trotsky, a seemingly isolated minority at the start of the war, came to the head of an insurgent working class in Russia and led the first successful socialist revolution. It founded a new international, the Third International, which, in the space of a few years, commanded the political allegiance of the most class conscious and revolutionary-minded workers all over the world. The 1920s and 1930s were marked on the one hand by the inability of the bourgeoisie to restore the pre-war equilibrium of the world capitalist system and reconstruct the economic order and, on the other, by the inability of the working class, due to the betrayals of its leadership first social democracy and then Stalinism to overthrow the

international bourgeoisie. The attempts to reconstruct the pre-war regime through the gold standard collapsed. Britain no longer had the capacity to support the world financial system as it had in the past, and the US was not yet able to do so. International trade collapsed, contracting by two thirds in the years between 1929 and 1932, while international capital flows all but stopped. The world was plunged into economic depression and then another war. The process of economic reconstruction, which began after World War II, was not aimed at restoring the pre-war integrated structure of the world capitalist economy. In many ways, it was an attempt to use the national state to hold back the operation of the very international tendencies which had led to the breakdown of world capitalism some three decades earlier. Under the direction of the United States, the pre-war trade blocs were progressively dismantled and the European market, formerly divided by cartels and tariffs, was integrated. International trade, which had come to a virtual standstill in the 1930s, began to expand once again. The Bretton Woods system, to which we will return in greater detail, led to the expansion of trade and ensured that currencies could be exchanged at fixed rates, removing the threat of destructive currency devaluation wars. However, the international mobility of capital that had characterized the pre-1914 period was not restored. In fact, in the opinion of the architects of the new system, in particular Harry Dexter White and John Maynard Keynes, it was the international movement of capital had led directly to the collapse of the 1930s. They maintained that the program of social welfare measures and stimulation of demand by government spending, which were necessary to prevent the return of mass unemployment, would be undermined if capital were free to move from one country to another. As Keynes had insisted when first expounding his theories in the 1930s, while goods and ideas could move internationally, it was essential that capital remain "homespun." At the heart of the post-war reconstruction of world capitalism was the revival of the national economy as the focus for the accumulation of capital. And this led, in turn, to the incorporation of the social democratic parties and unions into the running of the state. They became the administrators of the Keynesian programs of social reform and national economic regulation. While the Bretton Woods system was an attempt to block the economic forces that had led to the breakdown of capitalism in 1914, it could not overcome the contradictions of the world capitalist economy. In 1971, the foundations of the Bretton Woods system were shattered with the removal of the gold backing from the US dollar, and, in 1973, floating exchange rates were adopted. Once the wall of national regulation was breached, with the demise of fixed currency exchange rates, other changes quickly followed. All of the major capitalist countries dropped their controls on capital movements the United States and Germany in 197475, Britain by 1979, Japan by 1980 and the rest of Europe by the 1980s. The so-called

developing countries followed suit by progressively ending capital controls and scrapping their national regulatory mechanisms. Since the breakdown of the Bretton Woods system in 1971-73, international capital flows which Keynes and others saw as so dangerous for the stability of the capitalist order have increased at a rapid rate. Cross-border transactions in bonds and equities, which were less than 10 percent of GDP for most advanced capitalist countries in 1980, were more than 100 percent by 1995. Gross flows of portfolio investment and foreign investment in the advanced countries more than tripled in the last half of the 1980s and the first half of the 1990s, while the flow of direct foreign investment from the major industrial countries quadrupled between 1984 and 1990. This brief review of the economic history of this century demonstrates the significance of the global transformation now taking place: After several decades in which its internationalizing tendencies were blocked by a series of economic and political factors, world capital over the past two decades has resumed, at an even more rapid pace, the path of development it had begun prior to 1914. The consequences will prove to be even more explosive. II. Global economy versus the nation-state system The vast changes in capitalist production over the past two decades associated with the development of computer technology have fundamentally transformed the world capitalist economy. The emergence of the transnational corporation and the organization of production on a global scale have once again brought to a head the central contradiction of capitalism in the 20th century: that between the world economy, expressing the inherent growth and spread of the productive forces, and the nation-state system, the basis of bourgeois rule and private property. This is most strikingly expressed in the collapse of all those organizations based on a nationalist perspective. The downfall of the Stalinist regimes in the Soviet Union and Eastern Europe was, in the final analysis, an expression of the bankruptcy of the nationalist program of socialism in one country. Likewise, the organic incapacity of the trade unions in the advanced capitalist countries to defend the social position of the working class, and their outright collaboration in the imposition of the dictates of capital, signify the collapse of the program of social reform based on an expanding national economy. This historical crisis of the capitalist mode of production is the root of the crisis of perspective in the workers movement. But this very crisis confirms another important prediction of Marx: no problem ever arises without the material conditions for its resolution emerging, or being in the process of formation. The globalization of production has brought about a vast expansion of the international working class. The penetration of capitalist production into new regions of the world

where, until recently, there was only peasant-based agriculture, has transformed millions of people into wage workers. In the advanced capitalist countries, ruthless downsizing carried out by major corporations in the struggle to slash costs and boost profits, has ended the relatively privileged status of what were once considered sections of the middle class. It is only in the past two decades that the proletariat has become the numerically predominant social class on an international scale. The same processes which have brought about the proletarianization of an ever-greater proportion of the world's people have produced common conditions of exploitation. Thus the globalization of production has laid the foundations, as never before, for the international unification of the working class in a common struggle against the transnational corporations and international capital. At the same time, globalized production, undermining the national basis for the organization of economic life, has laid the objective foundations for the development of a planned world socialist economy. The program of Marxism has always been based on the understanding that the nation state, like the bourgeois property forms it upholds, is a product of historical processes, destined to pass into history along with other outmoded forms of social organization, such as slavery and feudalism. But if the assertions of the Spartacists are true, then the nation state has a permanence unforeseen by the founders of scientific socialism. Consequently, the abolition of the nation state system, and the entire framework of bourgeois property, is a utopian perspective, for no matter how extensive the development of the productive forces, the nation state remains the preeminent economic entity. Marx himself put the issue very clearly: "If we did not find concealed in society as it is the material conditions of production and the corresponding relations of exchange prerequisite for a classless society, then all attempts to explode it would be quixotic."5 If, as the Spartacists maintain, the growth of the productive forces is not undermining the nation state system, then we must conclude that the entire Marxist perspective is nothing more than a moral or ethical ideal. Indeed, the perspective of a planned socialist economy, in which production is organized by the "associated producers", is not only an idealist utopia, but a downright harmful program, given the timeless economic viability of the national state. Moreover, the perspective for the international unification of the working class the rallying call of the socialist movement since the publication of the Communist Manifesto 150 years ago is rendered no less utopian. If the national state retains its viability as the basic economic unit of capitalist production, then the bourgeoisie and its agencies in the workers movement will always have an unshakable material basis for their program of nationalism. Before taking up the specific arguments of the Spartacists, it is necessary to outline some basic features of capitalist production, so as to focus on the qualitative

transformation in the structure of the world economy signified by globalization. Capital, Marx explained, exists in three forms: money capital, productive capital and commodity capital. The process of capitalist production, and the accumulation of surplus value which is its driving force, involves the continuous transformation of these three forms of capital into one another. In the first stage, capital appears on the market in the form of money. This money capital is used to purchase the means of production (raw materials and machinery) together with labor power. In these transactions, money capital is transformed into productive capital. In the second stage, productive capital is transformed, in the process of production, back into commodity capital, with a higher value. The source of this additional, or surplus, value arises from the difference between the value of the labor power that the capitalist purchased in the market, and the value that is added by the workers in the course of the working day. In the third stage, the newly produced commodities are taken back to the market, where they are transformed once again into money capital (realizing the surplus value embodied in them), whereupon the process of accumulation resumes. It is through this continuous metamorphosis from money capital to productive capital to commodity capital and then back to money capital that capital accumulation, or selfexpansion, takes place, the source of this expansion being the surplus value extracted from the working class in the process of production. The history of capitalism involves the globalization or internationalization of these three forms of capital. The expansion of capitalist production in the 19th century saw the globalization of capital in the commodity form, as the commodities produced by the factory system and capitalist farms were sold on the expanding world market. By the end of the 19th century, the rise of industrial capitalism brought in its wake an expansion of banking and finance capital, which increasingly became globalized through the development of international investments. However, while both commodity capital and money capital became increasingly globalized, productive capital still remained confined, to a great extent, within the framework of the national state. While the surplus value extracted from the working class, and embodied in commodities, was increasingly realized on the world market, and the money capital derived from this process reinvested by the banks and finance houses on an international scale, the actual process of surplus value extraction the heart of the accumulation process still took place within a given national state. This is no longer the case. The Spartacists begin their denunciation of the International Committee by disputing the supposed claim that "the transfer of production by 'multinational' corporations from North America, West Europe and Japan to the so-called 'Third World' in recent

years represents a profound, structural change in the world capitalist system." Furthermore, they insist, "the idea that the capitalist market is 'global', that banks and corporations seek out those (low wage) countries where they can get the highest return on their investments, that, indeed, the internationalization of finance capital is a dominant feature of the contemporary profit system, is hardly new."6 Everything here is jumbled and confused in order to try to obscure the essential processes and assert that nothing fundamental has changed in the structure of world capitalism, at least since 1914. In the first place, globalization of production does not merely refer to the transfer of production to so-called "Third World" countries, or simply to a "large-scale shift in production by 'multinational' corporations to the Third World." These processes, which in themselves are expressions of decisive changes in the structure of world capitalist production, are only one aspect of the globalization process. Globalization of production refers to the mobility of productive capital, engaged in the extraction of surplus value, on an international scale. It signifies not merely a quantitative increase in the international activity of capitalist firms, but marks a qualitative transformation in the capitalist mode of production. For the first time in history productive capital, like commodity capital and money capital before it, is able to move around the world. III. A qualitative change in the structure of world capitalism The process of globalization does not signify merely the transfer of production as such. It is rather the disaggregation of previously unified production processes, the dispersal of these processes to different parts of the world either to advanced capitalist or backward countries in order to minimize costs and increase profits, and the integration of these disaggregated processes across national borders and whole continents. That is, for the first time in history, the process of surplus value extraction the essence of capitalist accumulation has been internationalized. This is the qualitative change in the structure of world capitalism signified by globalization. What is distinctive about globalized production is that a given production process takes place simultaneously on a planetary scale. This could only arise on the basis of a new infrastructure, made possible by new communication technologies and more efficient forms of transport. The Spartacists argue that since finance capital has always been invested internationally, there is nothing new in the present situation. This is to ignore the vast quantitative increase of international capital flows and the myriad new forms it has assumed. The instant transfer of funds, the abolition of exchange controls, the development of global share and bond markets and international futures markets, to name just a few processes, represent, in their totality, a qualitative change.

One measure of this transformation is given by the fact that transborder financial flows for the major capitalist countries of the G-7 increased by a factor of 10 for the period 1980-92, as capital was transferred around the globe. Nationally insulated stock markets have all but disappeared. In the decade 1980-90, the volume of cross-border transactions in equities grew at a compound rate of 28 percent a year, from $120 billion to $1.4 trillion. Over the same period, international bank lending rose from $324 billion to $7.5 trillion and the international bond market increased in size from $295 billion to $1.6 trillion. The Spartacists maintain that since trade levels, measured as a proportion of GDP, only reached their 1913 levels in 1970, the international economy was more globalized 80 years ago. They conveniently ignore one salient fact: a considerable proportion of international trade has been replaced by the international production activities of transnational companies. Figures collected by the United Nations illustrate this process. In 1993, the production of the 170,000 subsidiaries of companies operating outside of their country of origin exceeded by 37 percent the total volume of world trade. In that year, world trade totaled $4 trillion, while the total of local sales of these transnational companies was $5.5 trillion. The absurdity of the Spartacists' claims becomes even more apparent when the changes in the nature of international trade are taken into account. In the previous period, trade involved the purchase and sale of raw materials or finished goods. Today, an increasing amount of world trade consists of transfers of commodities or semi-finished articles within a single transnational company. At least one-third of world trade consists of such transfers. Around one half of world trade is produced by transnational companies, and some two-thirds of transactions in goods and services combined are dependent on the operations of these companies. Every statistic points to the growing integration of the world economy under the aegis of transnational companies. While the current value of exports increased 3.5 times between 1975 and 1989, the outflow of foreign direct investment (FDI) over the same period rose seven fold.7 Overall, the annual FDI outflow and inflow almost doubled every five years for the period between 1970 and 1988. In the 1970s, FDI, domestic output and domestic investment grew at similar rates. From the early 1980s onwards, the rate of growth of FDI began to significantly outpace the other two, and in the period 1985-90, global FDI grew almost four times faster than domestic output and more than twice as fast as domestic investment. The rapid increase in foreign direct investment is the statistical expression of a qualitative change in the organization of production by transnational companies a system in which planning processes within the global corporation are developed in an attempt to counteract the unplanned operation of the market. In the words of a United Nations report: "Elements of ... an extended international production system are

gradually emerging as a result of the strategies of TNCS. In that sense, international production can be thought of as performing a wider role than trade, that is, one of moving not only goods and services across borders, but also moving factors of production and organizational methods, skills and technologies under a unified management structure. ... As a result of that organizational effort, the world economy is being transformed qualitatively: trading and other linkages are being complemented, if not supplanted, by linkages at the production level. In an international production system for goods and services, it is increasingly firms transnational corporations that play this coordinating role and that determine participation in the international division of labor, rather than arms-length transactions."8 Different components of a production process can now be located in different parts of the world in different countries and continents so that costs are minimized. This was not possible previously for two reasons. First, the cost of transportation was prohibitive. That barrier has been greatly reduced by the lowered costs of both sea and air transport. Second, the requirements of supervision and the enforcement of standards required that a particular production process be organized within a single factory, or at least in plants in close proximity to each other. Today, different components of a production process can be sub-contracted out to firms all over the globe. Rapid and relatively cheap transport, together with computer-based information systems, make possible the separation of what once were necessarily unified processes. In the past, design had to be in close proximity to production. This is no longer the case; designs can be transferred around the world just as easily as they can be shifted from one room to another. IV. Globalized production and the trade unions One of the central political motivations behind the Spartacists' attempts to deny the farreaching historical significance of globalized production is their defense of the trade union form of organization. The Spartacists center their attack on a passage from a report delivered by Socialist Equality Party [US] national secretary David North in 1992: "The collapse of the old organizations of the working class is, fundamentally, the product of specific historic and economic conditions. Understanding these conditions does not mean we absolve the leaders of these organizations of responsibility for what has happened. Rather, it enables us to recognize that the rottenness of the leaders is itself only a subjective manifestation of an objective process... The global integration of capitalist production under the aegis of massive transnational corporations and the terminal crisis of the nation-state system have shattered the basic geo-economic foundation upon which the activities of the old organizations of the working class have been based. Nationally-based labor organizations are simply incapable of seriously challenging internationally-organized corporations."9 The chief indictment the Spartacists hurl against the International Committee and North is that "he asserts that the trade unions as such have been made impotent by objective changes in world economy." According to the Spartacists, the betrayals of the working class by the unions are entirely attributable to the union bureaucracy, which has simply

capitulated to the bourgeoisie and refuses to organize the union membership to "play hardball." "The decline of the American labor movement," they declare, "is not fundamentally caused by the objective effects of 'globalization' but by the defeatist and treacherous policies of the AFL-CIO misleaders."10 The International Committee is the last to deny the treacherous role of the union bureaucrats or absolve them of responsibility for the deterioration in the social position of the working class. But it insists that, in the final analysis, the role of the trade union bureaucracy is the expression of deep-seated objective tendencies bound up, on the one hand, with changes in the structure of the world capitalist economy, and, on the other, with inherent features of the trade union form of organization itself. We shall go further into these questions at a later point. At this stage, let us merely note that, like all subjective explanations, the Spartacists' claim that the betrayals of the unions are due simply to the rotten nature of the bureaucracy can, in the end, explain nothing. What is to account for the fact that all sections of the trade union bureaucracy, in all countries, have adopted the same policies at the same time? How is it that in the past the working class was able to win certain limited material gains through the unions, but is now continually pushed backwards? Does this mean that the vicious anti-communists of the 1950s were less rotten than the union bureaucrats of today? And what is to account for the fact that, whatever their political affiliations, the union bureaucrats play the same role. In an attempt to back up their assertion that the International Committee is preaching defeatism and capitulation before the propaganda campaign of the corporations and their political spokesmen, and providing a rationalization for the betrayals of the trade union bureaucracy, the Spartacists cite the following passage from a report delivered by Socialist Equality Party (Australia) national secretary Nick Beams: "To the extent that the extraction of surplus value still took place within the confines of a given state, it was possible to apply pressure to capital via the national state for reforms and concessions to the working class. This was the program of the trade union and labor bureaucracies. This is no longer possible." Commenting on this passage, the Spartacists reveal the nationalist orientation which forms the basis of their attack on the International Committee. "In other words, the Northites maintain it is no longer possible for the working class to defend itself against the predations of capital through strikes or other actions, regardless of the tactics and policies pursued."11 Here we have one of the axioms of the politics of all forms of petty-bourgeois radicalism: the identification of the class struggle with the national-based trade union

forms that it assumed in the post-war period. The International Committee has explained that the era of national reformism, in which the working class sought to maintain and improve its social position through the application of industrial and political pressure on nationally-based employers and the national state, is over. According to the Spartacists, however, this is equivalent to denying that the working class has any means for defending its interests. In other words, the working class equals the trade unions, the class struggle is the trade union struggle, and to maintain that the economic power of the nation-state has been undermined is to say that the class struggle is over. Having equated the class struggle with the specific, highly-constricted national forms it assumed during the post-war boom, the Spartacists must try and "prove" that it is possible for such struggles to continue. In an attempt to show that globalization of production has nothing to do with the decline of the trade unions, the Spartacists declare: "In none of the major strikes which marked the decline and the defeat of the American labor movement in the 1980s the PATCO air traffic controllers, Greyhound bus drivers, Phelps-Dodge copper miners, Eastern Airline machinists, Hormel meatpackers did foreign competition or the operations of multinationals abroad play any significant role. Greyhound, Eastern Airlines and Hormel extract almost all of their surplus value from labor within the confines of the American state."12 There could hardly be a greater display of intellectual bankruptcy than this. In the first place, it should be recalled that the smashing of PATCO in 1981, which set the scene for the onslaught that followed, was organized and carried out by the United States government, the political leadership of world capitalism. It followed in the wake of the change in international economic policy organized by US finance capital, and initiated by US Federal Reserve chairman Paul Volcker in 1979, who raised interest rates to their highest ever levels and brought about the deepest recession in the post-war period. Even setting aside this extremely important political fact, the Spartacists' analysis displays an ignorance of the workings of the capitalist system, not to speak of Marxist political economy. In Volume III of Capital, in the section entitled "Equalization of the General Rate of Profit Through Competition," Marx demonstrated that the profit levels of an individual firm are not determined by how much surplus value that particular corporation extracts from the workers it directly exploits. Rather, each firm receives a portion of the total surplus value extracted from the working class, according to its share of the total capital used to extract it. This division of surplus value, in the form of profit, is a social process, which takes place through the competitive struggle between the different sections of capital. Those sections of capital that produce at below average cost will receive greater than average profits; those whose costs are higher than the average will receive profits at a rate below the social average.

These averages are themselves subject to change, as new production processes and techniques are developed. A production process that resulted in average or below average costs at one point in time will, as new methods are developed, result in higher than average costs in another period. In the past, when firms operated to a great extent within national markets, the struggle over the appropriation of surplus value took place primarily within the confines of a given national state. The globalization of production has produced a new situation. Regardless of the percentages of their revenues that firms derive from the national market, costs, efficiency, productivity of labor, the rate of profit are today all determined on an international scale. It is irrelevant if a particular firm operates on a global, national or even only on a regional or city-wide basis. The cost structure it confronts is the outcome of world economic processes that operate quite independently of it. Even where goods and services are produced and sold within a national market, they have to meet standards and costs which are set globally. It has been calculated that in the largest domestic market, the United States, whereas in the 1960s only 4 percent of domestic production was subject to international competition, today that figure stands at more than 70 percent. Furthermore, whatever the market for their goods or services, all companies are subject to the dictates of international capital and financial markets. Those firms which do not meet international cost standards, that is, internationally determined profit rates, will find that capital is more expensive. V. Capitalism and the origins of the nation-state The Spartacists advance a militaristic and ultimately subjectivist view of the nationstate. According to their conception, the nation-state is not the political expression of a definite stage in the historical development of the productive forces, but merely a political-military apparatus developed by the bourgeoisie to maintain its economic domination. The capitalist nation-state was by no means simply the product of military conflicts It arose out of profound economic changes, bound up with trade and the increasing use of money, which undermined the feudal regimes. Military force was not the primary factor. As Engels explained: "Long before the new field-pieces shot breaches into the knightly castle walls, these had already been undermined by money; indeed, gunpowder was, so to say, only an executor in the service of money. Money was the great political leveller in the hands of the burgherdom."13 The principal driving force behind the formation of the nation-state was economic. The growth of capitalist production and the accumulation of capital required the development of a national market and the breaking down of guild privileges, political restrictions, local customs barriers and tariffs, which hemmed in production on all sides.

The development of capitalist production drew together backward villages and provinces; it linked the provinces with the cities and created a national market, bound together with a common language, laws and a common currency. However, the development of the productive forces did not cease with the formation of the national state and national markets. In its further development, capitalist production began to transcend the nation-state framework. The whole history of the 20th century, beginning with the intensification of imperialist rivalries and the outbreak of world war in 1914, is bound up with this developing contradiction. World War I, as all the Marxists of the time explained, signified that the productive forces had outgrown the limits of the nation state. "The present war," Trotsky wrote in 1915, " is at bottom a revolt of the forces of production against the political form of nation and state. It means the collapse of the national state as an independent economic unit. ... the real, objective significance of the War is the breakdown of the present national economic centers, and the substitution of a world economy in its stead."14 This contradiction has been raised to a new peak of intensity by the development of globalized production. The national state continues to play a political and military role, just as did the feudal-absolutist state at the dawn of capitalist development. But, like its forerunner, its economic significance has been undermined and it is precisely this economic decline that creates the conditions for its overthrow. In their apotheosis of the nation-state, the Spartacists base their politics not on Lenin, but rather harken back to an earlier figure the petty-bourgeois radical Eugen Duhring, who likewise insisted on the primacy of political and military force over economic conditions. Engels' remarks directed against the petty-bourgeois conceptions of Duhring, and his fascination with the military apparatus of the bourgeoisie, apply with no less force to the Spartacists: "And if the bourgeoisie now make their appeal to force in order to save the collapsing 'economic situation' from the final crash, this only shows that they are laboring under the same delusion as Herr Duhring: the delusion that the 'political conditions are the decisive cause of the economic situation'; this only shows that they imagine, just as Herr Duhring does, that by making use of 'the primary', 'the direct political force,' they can remodel those 'facts of the second order,' the economic situation and its inevitable development; and that therefore the economic consequences of the steam-engine and modern industry driven by it, of world trade and the banking and credit developments of the present day, can be blown out of existence by them with Krupp guns and Mauser rifles."15 In their insistence on the historical viability of the nation-state, the Spartacists undertake a rewriting of the history of capitalist development. "North's view of the capitalists as an international class," they write, "flies in the face of the Marxist understanding that the bourgeoisie cannot transcend national interests."16

Behind this proposition lies a total falsification of the history of capitalism. The Spartacists' mechanical conception is that the bourgeoisie was a product of the national state, while the world market was developed through the aggregation of various national markets, like a set of building blocks. The real course of historical development bears no resemblance to this. The bourgeoisie arose in Europe before the formation of the nation-state and in its trade, banking and other commercial activities, including manufacturing, functioned as an international class, within a framework of the absolutist-feudal regimes. Historically, the international market arose prior to the development of national markets, and indeed, was one of the factors leading to the breakdown of localized production based on feudal relations, and the development of commodity production for the market. The capitalist nation-state arose out of a complex historical process in which the bourgeoisie sought to develop the political structures necessary to defend its property and economic interests wealth which in turn was a product of the growth of the world market. In other words, the bourgeoisie is, at the same time, the creator of the world market and the creator of the nation-state system. The logic of capital is universal. Its inherent drive to accumulate brings it into conflict with all previous forms of production. Capital strives to break down every barrier and cross every border in the relentless drive for accumulation. The nation-state form, however, is based on the erection of borders and barriers, for they define its authority and jurisdiction. The capitalist system is founded on this objective contradiction between the striving of capital to expand globally on the one hand, and the limitations imposed by the nation-state on the other. This contradiction, which has been inherent in capitalism since its birth, has reached explosive proportions in the 20th century, giving rise to two world wars. The bourgeoisie cannot resolve this contradiction. It cannot do away with the nationstate system in which its property is rooted. Neither can it confine the productive forces to the limits imposed by national boundaries. The bourgeoisie is driven by the objective logic of capital itself. Therefore, in its economic activity, it has to continuously transcend the nation-state framework and undermine it. It is not the analysis of the International Committee, but rather the drivel produced by the Spartacists which "flies in the face of the Marxist understanding." Those not unknown Marxists, Karl Marx and Friedrich Engels, wrote the following in the Communist Manifesto: "The need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connections everywhere. "The bourgeoisie has, through its exploitation of the world market, given a cosmopolitan character to production and consumption in every country. To the great

chagrin of Reactionists, it has drawn from under the feet of industry the national ground on which it stood. All the old-established national industries have been destroyed or are daily being destroyed. They are dislodged by new industries whose introduction becomes a life and death question for all civilized nations, by industries that no longer work up indigenous raw materials, but raw materials drawn from the remotest zones; industries whose products are consumed, not only at home, but in every quarter of the globe. In place of the old wants, satisfied by the productions of the country, we find new wants, requiring for their satisfaction the products of distant lands and climes. In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal interdependence of nations. As in material, so in intellectual production. The intellectual creations of individual nations become common property. National one-sidedness and narrow-mindedness becomes more and more impossible, and from the numerous national and local literatures, there arises a world literature."17 VI. Spartacist and the "stockholders who care" Because they assert the primacy of political and military considerations over the basic economic driving forces of the process of capital accumulation, the Spartacists present a completely subjective view of the workings of the capitalist economy. Thus they write that, according to the International Committee's perspective: "...corporations like IBM, Siemens and Toshiba are devoted solely to maximizing their profits on a global scale; their directors and stockholders supposedly don't care whether their actions strengthen the American, German and Japanese bourgeois states."18 It is not a question of whether the stockholders and directors "care" about the strength of the national state, or any other question. The process of capitalist production, as Marx demonstrated, is not driven forward by the subjective wishes or intentions of the owners of capital, but by the objective logic of the process of capital accumulation itself. This is not some "aspect" of Marxism, but is central to Marx's analysis of commodity fetishism, which forms the core of Capital. "The functions fulfilled by the capitalist," Marx wrote, "are no more than the functions of capital viz the valorization of value by living labor executed consciously and willingly. The capitalist functions only as personified capital ..."19 Major corporations are forced to maximize their profits, without regard to the impact on their "own" national state, or risk being put out of business by more competitive rivals. This regime is enforced by the continuous movement of finance capital. The shareholders' funds of major corporations are no longer dominated by the holdings of individual capitalists, but are comprised of investments by banks, life insurance funds, pension and superannuation funds, mutual funds and other forms of accumulated savings. These funds scour the globe in search of the best rate of return, forcing corporations, whatever may be the wishes of their directors, to continuously develop their production methods to secure a competitive rate of return on shareholders' funds. Those firms which fail to do this that is, maximize their profits on an international scale,

irrespective of the consequences for the national state in which they originated will find that their share price declines as the funds of the leading savings institutions move out to seek higher rates of return elsewhere. Consequently, the corporation will find that it has to pay a higher premium on capital to attract funds, or higher interest rates to the banks, as its assets are devalued, and it will become a target for a takeover or merger, if it is not forced out of business altogether by its more profitable rivals. The analysis of the objective logic of capitalist production has formed the core of the Marxist critique of all those social reformist nostrums that have maintained that the worst excesses of capitalist production can be eliminated, and its socially destructive character modified, through workers' buyouts or the placing of more "socially responsible" directors on the boards. While the Spartacists' positions are nonsense from the standpoint of a scientific analysis of the workings of the capitalist economy, they do have a very definite class logic. If boards of directors can be made to "care" about the fate of their "own" nation-state, irrespective of the consequences for profit maximization, then they can be made to "care" about other issues as well, including the provision of rising wages for the working class, or increased social welfare provisions. Indeed, a whole social reformist agenda can be advanced. Herein lies the Spartacists' political perspective. Rejecting the primacy of global economic forces and stressing the attachment of corporations to their home base, they are oriented to sections of the bourgeoisie who "care" about the nation. Spartacist is not alone in this regard. Some of their cohorts in the radical milieu have marked out even more clearly the direction in which they are heading. The perspective of all of them is summed up in a recent book by Paul Hirst and Grahame Thompson, two representatives of the British middle class left. Their Globalization in Question has become something of a Bible for these tendencies. The authors describe their perspective as a "mixture of skepticism about global economic processes and optimism about the possibilities of control of the international economy and of the viability of national political strategies." They acknowledge that social goals, such as full employment, have become "problematic", but contend that: "..this should not lead us to dismiss or ignore the forms of control and social improvement that could be achieved relatively rapidly with a modest change in attitudes on the part of key elites. It is thus essential to persuade reformers on the left and conservatives who care for the fabric of their societies that we are not helpless before uncontrollable global processes."20 In Britain, where Hirst and Thompson write, this perspective would mean an orientation to sections of the Euro-skeptic Tory Party, anti-EU figures such as the late billionaire Sir James Goldsmith and his Referendum Party, as well as sections of the Labour Party, the trade union bureaucracy and the nationalists of Arthur Scargill's

Socialist Labour Party. In the United States, the Spartacists have already taken part in a similar front during the anti-NAFTA campaign, which saw the formation of a de facto alliance embracing the AFL-CIO bureaucracy, the neo-fascist demagogue Pat Buchanan, billionaire Ross Perot, the consumer campaigner Ralph Nader and the petty-bourgeois radical "left." The Spartacists sought to integrate themselves into this alliance and curry favor with sections of the bureaucracy and the bourgeoisie by adapting to their economic nationalism. This gravitation to the extreme right-wing is neither accidental nor unique. The middle class left long ago rejected the working class as a revolutionary force. It relied on the labor bureaucracies, Stalinism and the nationalist movements to restrain imperialism internationally and pressure the ruling class for reforms at home. With the decline of these old leaderships, the left groups cast about for new social forces with which to pressure the state. Their nationalist outlook brings them into alignment with the most backward and provincial sections of the bourgeoisie, whose reactionary political spokesmen, from Le Pen in France to Buchanan in the US, likewise denounce globalization. We have seen how the Spartacists explain the decline of the trade unions as a result of the subjective motivation of the union officials and their refusal to play "hardball". Now the circle is completed. The major corporations are not driven by global economic forces, but by the subjective attachments of their directors and stockholders to their home base. Consequently, the two can come together on the national soil as the trade unions apply pressure to the major corporations for reforms and concessions. An alliance of the trade union bureaucracy with sections of the bourgeoisie who "care" about the nation and are concerned to ensure that its strength is maintained: that is what the political program of the Spartacists amounts to. It shares much in common with that of the modern-day fascist and ultranationalist movements, which have sprung up in response to the globalization of production. VII. International finance vs. the capitalist state The same subjectivist outlook, combined with a petty-bourgeois fascination with the military apparatus of the nation-state, is exemplified when the Spartacists turn to the question of finance capital. They begin by citing a speech by David North, in which he referred to the increased power of finance capital as follows: "Not even at the height of its glory did the British Empire possess even a fraction of the power over its colonial subjects that the modern institutions of world imperialism such as the World Bank, the IMF, GATT and the EC routinely exercise over the supposedly independent states of Latin America, Asia, Africa and the Middle East."21 This presentation of an undeniable fact of economic life, expressed in a whole series of statistics, evoked a furious response from the Spartacists.

"The idea that the World Bank and IMF exercise greater power over the workers and peasants of India than did the British colonial army and police is pacifistic nonsense."22 Here again the Spartacists reduce all historical processes to the exercise of military force. The plundering of the wealth of India did not take place primarily through military, but rather economic, means. The chief instruments for the destruction of the Indian economy and its subordination to the British Empire were not guns, but cheap cotton textiles and the railways. The life-blood of capitalist productive activity is not military power, but international finance. To secure the means to finance investments, build infrastructure and operate basic facilities, the governments of the semicolonial countries have to implement the socalled "structural adjustment" programs of the International Monetary Fund and the World Bank. These programs, initiated in the mid-1980s, following the Mexican debt crisis, have proven to be the most effective method for sucking the life-blood out of whole regions of the globe and transferring vast amounts of wealth through the automatic workings of the financial markets, into the coffers of the major banks and transnational corporations. The extent of this financial transfer can be seen from the following statistics for just a single year. In 1992, the interest on debt due from the poorer nations to the banks and international lending institutions was $125 billion, while the estimated return on the investment of the transnationals (calculated at 15 percent of the capital stock of $420 billion) was $64 billion, making a total transfer of $189 billion. Even after deducting the $59 billion granted in so-called aid, the total transfer was $130 billion. Even this staggering figure fails to give the full picture. Added to this must be the effect of declining raw material prices, the impact of transfer pricing policies of the transnational companies and the charges for the use of technology and "intellectual property rights." Recent events have rendered their own judgement on the profundities of Spartacist in relation to the ability of finance capital and its institutions to impose their will not only on colonies, but on nominally independent states. Presidents and prime ministers from Thailand to South Korea and even Japan the second largest national economy in the world have, over the past several months, received object lessons in the relative power of the International Monetary Fund and national states. The photograph published in newspapers from Jakarta to Washington, showing Indonesian strongman Suharto putting his signature to the IMF bailout terms, while IMF Managing Director Camdessus looks over his shoulder, is worth, as the saying goes, a thousand words. The Spartacists' glorification of the nation-state is summed up in their attitude to the role of international agencies of finance capital, such as the World Bank and the International Monetary Fund. "The view that 'transnational' corporations," they write, "transcend the nation-state system leads to the notion that certain international economic agencies, like the World Bank and the International Monetary Fund (IMF), have now become a kind of world capitalist government."

"No less absurd," they continue, "is the idea that these institutions are powers unto themselves, independent of the imperialist nation-states ... these international agencies act at the behest and in the interests of the major capitalist powers, not autonomously of them and certainly not above them."23 For the Spartacists, there is no reality higher than the national market and the national bourgeois state, and insofar as the global financial system and international financial institutions are considered, they are treated as the sum of national markets or the instrument of the domination of national states. This fixation on the nation-state, for all its superficial radicalism, has nothing in common with Marxism, which, as Trotsky explained, "takes its point of departure from world economy, not as a sum of national parts but as a mighty and independent reality which has been created by the international division of labor."24 The Spartacists continually invoke Lenin and his work Imperialism in their attack on the International Committee. But Lenin's work cannot be employed to defend the dominant role of the national state. On the contrary, he was explaining the dominant and global role of finance capital in the imperialist epoch. Far from the national state playing the dominant role, Lenin maintained the exact opposite: "Finance capital is such a great, such a decisive, you might say, force in all economic and in all international relations, that it is capable of subjecting, and actually does subject, to itself even states enjoying the fullest political independence..."25 Lenin was examining world capitalism at the beginning of this process and the trends he identified have since developed on an enormous scale. The national state and the banks are both creations of the bourgeoisie, and their history is, to a great extent, intertwined. However the power of the banks is not derived from the nation-state, but from the control of credit and finance, the lifeblood of the capitalist economy. Far from the one-way relationship that the Spartacists present the banks as the subservient instruments of the national state the real relationship has been far stormier. The history of the banking and financial system in the post-war period can be said to be one of a continual struggle by the banks to free themselves from control by the national state. And the rise of international finance capital and global financial markets has taken place in direct opposition to the state. The growth of the international financial system in the post-war period is inseparably bound up with the history of the international monetary system established at the Bretton Woods conference in 1944. From almost the day the United States entered the war, leading officials in the Roosevelt administration were concerned with the development of a viable, post-war financial structure. There was a realization, borne of the bitter experiences of the preceding two decades, that unless the conditions for an expanding world market were established, tariff and import controls dismantled and a stable international system of payments established, the world economy would rapidly plunge back into depression, giving rise to the threat of social revolution.

VIII. The rise and fall of the Bretton Woods system The Bretton Woods conference established a highly regulated international currency system. The United States dollar was established as the international currency fixed at the rate of $35 per ounce of gold. The cornerstone of the system was the establishment of fixed exchange rates between the major currencies. In order to prevent the type of competitive devaluations and disruptive currency fluctuations which had caused such devastation in the 1930s, the International Monetary Fund was established to provide funds for those countries experiencing difficulties in their balance of payments. The International Bank for Reconstruction and Development (the World Bank) was set up to provide funds for long-term loans for the reconstruction of the economies of Western Europe. The establishment of a system of fixed currency rates necessarily presupposed the regulation of international capital movements by the central banks and the political authorities of the national state. The history of the demise of the post-war monetary order is also the history of the breakdown of this national control over finance capital and the rise of an international financial system. For the Bretton Woods system to function, the United States had to supply dollar liquidity to the rest of the world, through the financing of private capital investment by US corporations and government loans and aid. These dollars were utilized, in turn, to finance the balance of trade surplus of the United States with the rest of the world. Embodied in this arrangement was a fundamental contradiction: it was based on the economic supremacy of the United States over its rival capitalist powers, on the one hand, while on the other, the consequences of its operation were to strengthen the rest of the advanced capitalist nations and relatively weaken the position of the United States. These contradictions first began to emerge towards the end of the 1960s in the form of a gold crisis. Underpinning the entire system was the guarantee by the United States that dollars would be redeemed out of the gold stock at Fort Knox at the rate of $35 per ounce. In the first years of the 1950s, the amount of gold leaving Fort Knox was negligible, as dollars were always in demand to pay for much-needed exports from the US. But as European and Japanese industry began to revive and then expand, there was a diminishing relative demand for US exports and the stock of dollars outside the US began to grow relative to the gold that backed them. In 1958, for the first time, the dollars held by foreigners exceeded the US gold stock. The decade of the 1960s was marked by a deepening crisis of the Bretton Woods system. American gold stocks, which stood at $18 billion in the 1960s, were declining at a rate of between $0.5 billion and $1 billion per annum. But in the year 1964-65 gold stocks fell by $1.5 billion, as the de Gaulle administration in France opened a war against the US dollar. By 1968 the gold stock had fallen perilously close to the level of $10 billion, considered the minimum necessary for the functioning of the Bretton Woods system. US gold stocks were now around half what they had been in 1950.

In response to the mounting gold crisis, President Johnson attempted to impose a series of restrictions on the outflow of American capital in 1968. But the very imposition of these measures led the US banks to discover ways to evade exchange controls. Their actions laid the foundations for what has now become an international financial system operating outside of the control of any national state or group of central banks. The origins of this new system lie in the emergence of the so-called Eurodollar market in the 1950s. This consisted of initially small amounts of dollars held in the European banks and the European branches of American banks. So long as the Bretton Woods system operated relatively smoothly, the bulk of these dollars were used to purchase exports from the United States. But towards the end of the 1950s, as the demand for US exports declined relatively, the pool of Eurodollars began to grow. This development led to the emergence of a Eurodollar lending market the floating of loans by banks from their holdings of dollars outside the US. The Eurodollar market was to expand rapidly in the latter part of the 1960s, as the US administration sought to control the outflow of dollars from America, and multinational companies, eager to acquire funds to invest in Europe, and banks, equally eager to accommodate their demands, sought ways to escape these controls. With the final breakdown of the Bretton Woods system in the period 1971-73, the socalled Eurocurrency markets soon comprised a world financial market dealing in currencies outside the nation-state that had issued that currency. And the greatest single force bringing this about was the US multinational corporations and banks which sought ways to undermine the attempted controls of the most powerful imperialist state. There are many examples from recent history showing how the national state has had to submit to the pressure placed upon it by international financial markets the Callaghan government in 1975-76, the Mitterrand government in 1982-83, Brazil and Mexico in the 1980s. One of the most recent experiences was the withdrawal of Britain from the European currency arrangements in 1992, in which British banks played a key role in the selloff of the pound. The Spartacists' insistence that international financial institutions are merely the agencies of the imperialist states flies in the face of one of the central features of the capitalist economy: the basic conflict between the unbounded geography of profit accumulation and the bounded political geography of national states. Like the rest of the middle class radical fraternity who were fascinated by Mao's slogan "all power grows out of the barrel of a gun," the Spartacists are dismissive of the financial power exercised by the IMF and other financial institutions, because they do not possess weapons and an army.

Part Two: I.Marx and the "iron law of wages" One of the key propositions advanced by the Spartacists, in their defense of the trade union form of organization, is that any examination of the objective effects of the globalization of capitalist production in driving down the wages and social conditions of the working class is tantamount to adopting a "present-day version of what in the 19th century was called the 'iron law of wages.'"1 Because this forms such a vital component of their political perspective it is necessary to reveal, in some detail, the distortions and outright falsifications that they make. The underlying thesis of the "iron law" was that any attempt by workers to increase wages by trade union or other forms of action would result in a general rise in the prices of commodities, thereby wiping out the effect of the increase in wages. Marx took up this conception in his pamphlet Wages, Price and Profit, written in 1865 in reply to George Weston, a member of the General Council of the First International. The Spartacists never review what Marx actually wrote, nor the social and economic context in which he examined this question. Nonetheless, they charge that in analyzing the objective impact of globalized production on living standards, and the incapacity of the trade unions to sustain even the most basic interests of the working class, the International Committee has reverted to the "iron law of wages" and abandoned a "basic Marxist position." In his address to the First International, Marx showed that the "iron law", as advanced by Weston, was based on the fallacious conception that the prices of commodities were determined and regulated by wages. While Weston's propositions were the immediate subject of Marx's analysis, his real target was the followers of Proudhon, whose politics exerted considerable influence in the French and other sections of the International. The social base of Proudhonism consisted of the petty-bourgeois artisans and craftsmen, especially in Paris, who still worked outside the major industrial factories. The narrow outlook of this social layer was reflected in the main planks of the Proudhonist program: opposition to trade union action, opposition to political action to secure regulation by the state of working conditions, opposition to women entering the workforce, and the establishment of a people's bank. The basic program of Proudhonism, reflecting the interests of its petty-bourgeois artisanal social base, was not the overthrow of the social relations of capitalism, but rather the removal of monopolistic constrictions on the operation of the free market, together with the provision of large amounts of cheap credit to small producers through the people's bank. Marx regarded the defeat of the petty-bourgeois anarchist conceptions of Proudhonism as essential for the development of the workers' movement, which was being brought

into being by the growth of capitalist industrialization. The Proudhonists were the political spokesmen for social forces that were being pushed back by changes in the capitalist economy. Here there is a direct parallel with the role of the Spartacists. Like the Proudhonists, they speak for petty-bourgeois layers whose social existence is bound up with economic, social and political relations that are being undermined by vast changes in the capitalist economy. Marx had conducted a continuous exposure of the petty-bourgeois illusions of Proudhonism since writing the Poverty of Philosophy in 1847. At the time of his reply to the Proudhonist conceptions of Weston, he had made one of his most important discoveries: the origins of surplus value, which revealed how it was that the exploitation of the working class necessarily arose out of the very operation of the market. The value of any commodity, he explained, was determined by the amount of socially necessary labor contained within it, that is, by the time taken on average to produce it. What was commonly considered the value of labor was, in fact, the value of labor power, the capacity of the laborer to work. Like any other commodity, its value was determined by the quantity of labor needed to reproduce it. In other words, the value of labor power was the value of the commodities needed to sustain the worker and his family. The origin of surplus value, Marx explained, lay in the fact that the value of labor power was vastly different from the value which the worker added in the course of the working day. Whereas the average amount of necessaries to sustain the laborer and his family might require six hours for their production, the laborer engaged in 12 hours of work for the capitalist. This difference formed the basis of the unpaid labor or surplus value extracted from the worker in the course of the working day. On the basis of this analysis, Marx explained that an increase in wages would not bring about a general increase in commodity prices. Rather, it would alter the distribution of the social produce between profits and wages. Consequently, between the maximum level of profits (determined by the minimum wage level) and the minimum level of profits "an immense scale of variations is possible". The actual level of wages at any point in time is determined by the continuous struggle between capital and labor, with the matter resolving itself "into a question of the respective powers of the combatants." This is the point at which the Spartacists leave off their presentation of the issue, in order to introduce their falsifications. Having presented the iron law of wages as "a doctrine that wages could not be permanently raised above a fixed level regardless of the actions -- economic and/or political -- taken by the working class", the Spartacists imply that Marx stated the opposite. In fact, as Marx makes clear at the outset, he hopes that Weston "will find me agreeing with what appears to me the just idea lying at the bottom of his theses". This "just idea" is that, in the long run, the economic and political action of the working class cannot

permanently raise the level of wages, irrespective of objective economic conditions. Having shown that the struggle over wages comes down to a question of the strength of the combatants, Marx then points to the processes which determine its outcome. He points out, in opposition to Weston, that farmers, for example, faced with an increase in the wages of agricultural laborers, were not able to increase the price of corn and had to submit to its fall. They countered the rise in wages not by increasing prices, but through the introduction of machinery and more scientific methods. They thereby diminished the demand for labor by increasing its productive power, and made the agricultural population again "relatively redundant." "This is the general method in which a reaction, quicker or slower, of capital against a rise of wages takes place in the old settled countries. Ricardo has justly remarked that machinery is in constant competition with labor, and can often be only introduced when the price of labor has reached a certain height, but the appliance of machinery is but one of the many methods for increasing the productive powers of labor. This very same development which makes common labor relatively redundant simplifies on the other hand skilled labor and thus depreciates it."2 Marx went on to explain that, in the course of development of industry, the growth of capital far outpaced the growth of demand for labor and that, while the demand for labor increases, it will only "increase in a constantly diminishing ratio as compared with the increase of capital." The Spartacists attempt to invoke Marx as a supporter of their reformist thesis that through trade union action the working class is able to secure a permanent increase in wages and living standards. In fact, Marx draws the opposite conclusions. Having pointed to the reaction of capital to an increase in wages, he writes: "These few hints will suffice to show that the very development of modern industry must progressively turn the scale in favor of the capitalist against the working man, and consequently the general tendency of capitalist production is not to raise but to sink the average standard of wages, or push the value of labor more or less to its minimum limit."3 Having drawn out the main tendency of development, Marx then made clear that this by no means implied that workers should renounce resistance against the encroachments of capital or "abandon their attempts at making the best of the occasional chances for their temporary improvement." But, Marx insisted: "[T]he working class ought not to exaggerate to themselves the ultimate working of these everyday struggles. They ought not to forget that they are fighting with effects, but not with the causes of those effects; that they are retarding the downward movement, but not changing its direction; that they are applying palliatives, not curing the malady. They ought, therefore, not to be exclusively absorbed in these unavoidable guerrilla fights incessantly springing up from the never-ceasing encroachments of capital or changes of the market. They ought to understand that, with

all the miseries it imposes upon them, the present system simultaneously engenders the material conditions and the social forms necessary for an economical reconstruction of society. Instead of the conservative motto, 'A fair day's wage for a fair day's work!' they ought to inscribe on their banner the revolutionary watchword, 'Abolition of the wages system!'"4 The Spartacists attempt to base their indictment of the International Committee on one of the conclusions drawn by Marx from his analysis. "Trade unions work well as centers of resistance against the encroachments of capital ... They fail generally from limiting themselves to a guerrilla war against the effects of the existing system, instead of trying to change it, instead of using their organized forces as a lever for the final emancipation of the working class, that is to say, the ultimate abolition of the wages system." According to the Spartacists: "The Northites now openly repudiate this basic Marxist position. They maintain that trade unions can no longer function as centers of resistance to the predations of capital, and they counterpose a socialist transformation to the defense of workers' interests within capitalism."5 The thesis that "trade unions work well as centers of resistance against the encroachments of capital" is not some kind of "basic Marxist proposition." It was a conditional assessment by Marx at a definite point in time -- the mid 1860s -- when trade unions were only just beginning to make their appearance in a number of countries. It was an assessment made at a definite historical stage in the development of capitalism, not some kind of absolute pronouncement. But even as he emphasized the importance of the unions, Marx pointed to their inherent limitations. Already, by the end of the 19th century, those limitations were coming to the fore and were being analyzed by the most prominent Marxists of the day, while by the end of the 1930s, Trotsky pointed to the growing tendency of the unions to become incorporated into the apparatus of the capitalist state -- a tendency that accelerated greatly during World War II and during the post-war boom, when the trade unions functioned as coadministrators of the social welfare state. However, when the postwar boom came to an end in the mid-1970s, and capital changed its orientation from one of limited concessions to the working class to neverending reductions in real wages and working conditions, the trade unions, far from "working well", proved completely incapable of resisting capital's encroachments. The record in all the major capitalist countries is the same over the past two decades: real wages have declined, the working class has suffered a series of defeats, and conditions won in an earlier period have been severely cut back. Not only have real wages been reduced, but social welfare provisions are being cut back in all the major capitalist countries as a direct consequence of the globalization of production. The bourgeoisie is now able to relocate different sections of the production process, not only to take advantage of lower wages, but to minimize taxation payments.

The capitalist nation states are consequently in a competition with one another to attract transnational corporations to their territory by reducing tax and other payments. Furthermore, the globalization of finance means that even where corporations are required to pay tax, they can avoid most of it. A recent report by the Australian Tax Office, for example, concluded that multinational companies, both domestic and foreign-based, paid virtually no company tax at all. The pressure for lower wages comes not only from traditional low-cost areas. As one recent study concludes: " ... the alignment of labor conditions across countries does not take place only because of competition from low-cost areas: it also forces Europe, America and Japan to converge. The pressures towards greater flexibility of the labor market and toward the reversal of the welfare state in Western Europe come less from the pressures derived from East Asia than from competition with the United States. It will become increasingly difficult for Japanese firms to continue life employment practices for the privileged 30 percent of its labor force if they have to compete in an open economy with American competitors practicing flexible employment."6 II. The rejection of a revolutionary perspective Apart from being refuted by empirical facts, the Spartacist thesis that trade unions "work well" as centers of resistance to the demands of capital raises issues of long-term historical perspective. If, as the Spartacists maintain, there is no objective reason why the trade unions cannot continuously carry forward the interests of the working class against the predations of capitalism and maintain the "defense of the workers' interests within capitalism", then there is clearly no objective necessity for the overthrow of capitalism. There is no material necessity for the working class to advance the struggle for socialism, because its material interests can be met within the framework of the profit system by trade unions that "work well" provided their leadership is sufficiently militant. Consequently, the socialist revolution is not an objective material necessity, but merely an idea or a utopia. The revolutionary party is not the necessary instrument through which the working class emancipates itself; it is, at most, a propaganda society for this utopia. In other words, the Spartacist denunciation of the International Committee is a regurgitation of the same arguments thrown forward by every union bureaucrat since the formation of the unions: the defense of the immediate material interests of the working class requires nothing more than the trade unions. The deep-seated hostility of the Spartacists to the socialist revolution emerges clearly in their objections to the following passage from an article by Nick Beams, which explained the connection between the immediate struggles of the working class and the socialist program: "In order to defend even the most minimal conditions -- the simple and most ordinary

demands -- the working class is confronted with the necessity of overthrowing the social relations based on capital and wage labor determined by the capitalist market through which the appropriation of surplus value takes place." The Spartacists object: "At first glance, this may seem like a terribly revolutionary position. In fact, it indicates a defeatist and abstentionist attitude toward the actual struggles of the working class, without which all talk of overthrowing the social relations based on capital and wage labor is empty rhetoric."7 This counterposing of the "actual struggles" of the working class to the struggle for a socialist perspective is the hallmark of every opportunist tendency and has been the stock-in-trade of the reformist and trade union bureaucracy throughout this century, and well before. The position advanced by Beams -- that the defense of the most minimal conditions of the working class raises the necessity for the struggle for a program aimed at the conquest of political power -- does not imply an abstention from the struggles erupting in the working class. Rather it indicates, and this is where the objections of the Spartacists arise, what must be the attitude of Marxists towards those struggles -- the necessity for the working class to break out of the stranglehold of the trade union bureaucracy, which seeks to subordinate it to the rule of capital. The International Committee raises before the working class the new tasks with which it is confronted as the result of changed objective conditions. The real practitioners of abstentionism and capitulation are those who maintain that the working class can simply continue as before, when clearly the entire situation has been transformed. Not only are there no further concessions, the bourgeoisie is striving to claw back all the concessions it was forced to make in the past. This means that there can be no actual struggle to defend the conditions of the working class outside of a political struggle, which aims at the conquest of political power. The working class cannot defend anything unless it challenges everything, that is, the domination of capital and its drive for profit over the whole of society. The attitude of the International Committee to the "actual struggles" of the working class is based on the program of Marxists throughout this century. When the opportunists of the Bernstein school sought to separate the "actual struggles" of the working class for improved wages and working conditions from the overthrow of capitalism and the socialist revolution, Luxemburg replied that reforms were, in every sense, a by-product of revolution, either of past revolutionary struggles, or of an ongoing revolutionary movement. In the 1930s, in his critique of the program of the French Communist Party, Trotsky directly addressed the separation of the immediate demands of the working class from the struggle for political power. The program was crowned, he pointed out, by the following statement: "While fighting every day in order to relieve the toiling masses from the misery which the capitalist

regime imposes on them, the Communists emphasize that final emancipation can be gained only by the abolition of the capitalist regime and the setting up of the Dictatorship of the Proletariat."8 This formula, which was invoked by the Social Democracy half a century before, had become obsolete by the time of World War I, but was now being employed by the Stalinists in the name of Marx and Lenin. "When they 'emphasize' that 'the final emancipation' can be obtained only by the abolition of the capitalist regime, they manipulate this elementary truth in order to deceive the workers. For they give the workers the idea that a certain alleviation, even an important alleviation in their condition, can be obtained within the framework of the present regime."9 The present-day Spartacists repeat almost word for word the positions of the Stalinists more than 60 years ago. They admit that, of course, the final emancipation of the working class requires the overthrow of capitalism, and that a revolutionary party, not a trade union, is necessary for that task. But the socialist program is consigned to the indefinite and cloudy future and has no bearing on the "actual struggles" of the working class, for these involve "the defense of the workers' interests within capitalism" by means of the trade unions. In opposition to the Stalinists, Trotsky explained: "The Marxist political thesis must be the following: 'While explaining constantly to the masses that rotting capitalism has no place either for the alleviation of their situation or even for the maintenance of their customary level of misery, while putting openly before the masses the task of the social revolution as the immediate task of our day, while mobilizing the workers for the conquest of power, while defending the workers' organizations with the help of the workers' militia -- the communists (or the socialists) will at the same time lose no opportunity to snatch this or that partial concession from the enemy, or at least to prevent the further lowering of the living standard of the workers.'"10 This approach was further developed by Trotsky in the Transitional Program , the founding document of the Fourth International, written in 1938. "The Fourth International," Trotsky explained, "does not discard the program of the old 'minimal' demands to the degree to which these have preserved at least part of their forcefulness. Indefatigably, it defends the democratic rights and social conquests of the workers. But it carries on this day-to-day work within the framework of the correct actual, that is, revolutionary perspective. Insofar as the old partial, 'minimal' demands of the masses clash with the destructive and degrading tendencies of decadent capitalism -- and this occurs at each step -- the Fourth International advances a system of transitional demands, the essence of which is contained in the fact that ever more openly and decisively they will be directed against the very bases of the bourgeois regime. The old 'minimal' program' is superseded by the transitional program, the task of which lies in the systematic mobilization of the masses for the proletarian

revolution."11 III. A separation of immediate demands from the struggle for socialism With the restabilization of world capitalism in the immediate postwar period and the subsequent 25-year boom, the defense of the past gains of the working class, and the advancement of new ones, was, to a great extent, separated from the struggle for political power. Capitalist expansion saw a revival of the discredited thesis of social reformism and opportunism, and their insistence that the "actual struggles" of the working class could never transcend the framework of capitalism. The expansion of capitalism in the postwar boom meant that there was, so to speak, an objective gap between the immediate demands of the working class and the political struggle for its long-term interests. The International Committee and its sections fought, throughout this period, to bridge this gap through the struggle to mobilize the working class around the demand that its leadership break its ties with the bourgeoisie and undertake the fight for a socialist program. Under conditions in which material gains could be made through trade union struggles, masses of workers gave their allegiance to the social democratic and trade union leaders. The International Committee fought to break the misplaced confidence in these leaderships by bringing the working class into a political struggle against them. Large sections of the petty-bourgeois radicals denounced this tactical initiative, none more vociferously than the Spartacists. Their opposition then, as now, was to the mobilization of the working class on an independent program against the labor bureaucracy. While the working class was able to make certain material gains on the basis of militant trade union struggles, the post-war experience by no means refutes the Marxist thesis on the relationship between reform and revolution. It has been vindicated both positively and negatively. The immediate advances in the social position of the working class, in the aftermath of the war, were a direct expression of the fear of the bourgeoisie that if concessions were not made, they would face revolutionary struggles. To be sure, the bourgeoisie was able to rely directly upon the social democratic and Stalinist leaderships, who were committed to the post-war restoration of capitalist order. But had the conditions of the 1930s returned, there would have been a significant and rapid shift of the masses to the left. The other period of major social advance -- from the end of the 1960s to the first years of the 1970s -- was likewise the outcome of the potentially revolutionary struggles, stretching from the May-June 1968 events in France, to the bringing down of the Heath Tory government by the British miners in 1974. And the Marxist thesis has received a no less powerful negative confirmation. It was precisely the separation of the struggles for its immediate interests from a socialist political perspective that left the working class unprepared for the global offensive

undertaken by the bourgeoisie over the past two decades. The essential argument that the Spartacists advance against the International Committee is one of the standard refrains of social democrats, Stalinists and opportunists of every stripe, i.e., that to tell the working class it can defend its interests only on the basis of a revolutionary program is to sow defeatism. The unspoken assumption behind this argument is the demoralized view that the working class can never achieve the degree of political consciousness and organization necessary to overthrow capitalism, thus the perspective of socialist revolution is unviable. Spartacist's position can be reduced to the following line of argument: The trade unions are the only legitimate form of working class organization. Their traditional program of applying pressure on the bourgeoisie is the only viable program. If these organizations and this program are no longer capable of defending the working class, then all is lost. Either one accepts the present, reformist level of political consciousness in the working class, and the organizations that uphold that consciousness, or one abandons any form of struggle. IV. Spartacist denies the fall in living standards In their defense of the viability of trade unionism, the Spartacists go to the most absurd lengths, denying the social reality of declining living standards. The 1993 perspectives resolution of the Workers League, The Globalization of Capitalist Production and the International Tasks of the Working Class, explained that, with the shifting of production to countries with wages a fraction of those in the advanced capitalist nations, there was an inexorable "downward leveling of wages and living standards and a relentless assault on past social reforms and legal limitations on the exploitation of labor by capital in the imperialist centers." According to the Spartacists, however, merely by pointing to this undeniable process "the Northites are here advancing, with a thin veneer of Marxist rhetoric, an argument propounded by a wide range of bourgeois and petty-bourgeois liberals." In other words, because this tendency has been noted by a number of bourgeois economists and journalists motivated by concerns for the stability of capitalist rule, its existence must be denied. On the basis of this ridiculous argument one might just as well conclude that the whole of Lenin's work Imperialism should be discarded because he drew heavily on the work of the social liberal Hobson, not to speak of other bourgeois economists and journalists of his day. The passage to which the Spartacists object is not, of itself, a political perspective, but simply a statement of economic fact based on the operations of the capitalist market. If capital is able to purchase commodities in one market more cheaply than in others -and the labor power of the working class, skilled and unskilled, is most assuredly a

commodity -- then the price of that commodity in all other markets will tend to fall. In essence, the Spartacists' denunciation of the International Committee amounts to a denial of the most basic historical tendencies of the capitalist mode of production. As Marx revealed, what distinguished capitalism from all previous modes of social production was its tendency to become all-embracing, to extend to every corner of the globe, and to create a world market. This inherent tendency is bound up with the incessant striving by capital to increase the extraction of surplus value from the working class. The Spartacists' thesis now emerges clearly: while there is a general tendency for capital to create a world market, this applies to every commodity save one, labor power. Capital strives to break down every barrier and remove every limitation on its activity -the accumulation of surplus value -- but stops at one: the market for labor power remains constricted within the nation-state. The process of globalized production has been characterized by two interconnected tendencies in the labor market: the increasing ability of capital to purchase labor power in any part of the globe, and the vast increase in the global supply of labor power. It is estimated that the world supply of labor will increase by around 1 billion over the next decade. The massive destruction of the peasantry through the operations of global capital has created an unprecedented situation: for the first time in human history the proletariat, the class with nothing to sell but its labor power, constitutes the majority of the world's population. While opposing the advocates of the "iron law of wages", Marx pointed to inexorable tendencies, within the process of capitalist production, which worked to drive down the price of labor power, i.e., wages. Above all, the continuous advancement of the productive forces and the development of new technologies worsened the position of the working class by reducing the demand for labor and increasing its supply. This has been precisely the impact of computerization and the automation of production processes over the past two decades. The technological transformation of entire production processes has made possible the elimination of vast amounts of labor, while at the same time enabling production processes to be integrated across vast distances, thereby allowing capital to shift high-labor operations to low-wage regions. According to the Spartacists, however, these processes, which have transformed production and the lives of millions of people, are nothing more than the illusory products of a propaganda campaign. "'Globalization'", they write, " is but a new variation on an old theme. In the 1950s and early '60s, the term 'automation' was invested with the same apocalyptic, earth-shaking consequences. Liberal intellectuals predicted that the industrial working class would in large part be replaced by robots and other machinery. One conclusion was that trade unions were becoming or would become obsolete."12

It would be difficult to find a clearer expression of the indifference of the middle class radicals to the fate of millions of working people. Over the past two decades, the lives of hundreds of millions of workers -- blue collar and white collar alike -- have been transformed by the introduction of computerized, automated methods of production and information processing, leading to a vast destruction of jobs. One does not have to subscribe to the predictions of bourgeois commentators that robots will replace the working class to recognize the far-reaching changes automation has introduced into the work place, and the abject failure of the unions to defend workers against its short-term impact, or provide the working class with a means for harnessing these changes to its longer-term benefit. It is an undeniable fact that young unskilled and semi-skilled workers today have far less chance of obtaining a secure, decent-paying job in auto, the mines and many other industries than did their fathers or grandfathers, and that this is due, in large measure, to the introduction of robotics and other automated techniques. Spartacist dismisses automation, just as it discounts globalization, in order to boost illusions in the trade unions, which are incapable of confronting either phenomenon in a way that accords with the interests of the working class. V. Economic nationalism and American chauvinism According to the Spartacists: "Wages in the advanced capitalist countries are not going to be driven down to anything close to Third World levels for two reasons: one political, the other economic."13 The political reason centers on the claim that the various imperialist powers will not permit the shift of capital to take place to such an extent that military capacities are endangered and that at a certain point they will impose tariff and other restrictions on the movement of capital. "In the next few years, the US, Germany and Japan may well impose -- against the immediate interests and desires of sections of their own capitalist classes -- high levels of trade protectionism, controls of foreign exchange transactions and strict limits on the inflow and outflow of capital."14 Let us for a moment take the Spartacists' assertions at face value. There is an ultimate floor on wage levels in the advanced capitalist countries, they argue, because at a certain point the imperialist powers will invoke measures to restrict the movement of capital around the world. Consequently, it will be possible for the trade unions to exert pressure (provided their leadership is sufficiently willing to play "hardball") on the national bourgeoisie and carry out their designated task of the "defense of the workers' interests within capitalism." Once again, all will be for the best, and the necessity for social revolution will have been averted. Now let us come back to reality and consider for a moment the consequences of the actions the Spartacists maintain will protect real wages. Such is the integration of the

world economy that tariff and other protective measures would not only disrupt world trade, with a repeat of the disastrous consequences of the 1930s. They would also bring about a severe dislocation of the production processes of major corporations, which no longer operate national-based factories and processes, but integrate different aspects of production on a world scale. The introduction of such tariffs, combined with restrictions on the flow of capital, would bring about a financial and industrial collapse of staggering proportions. This is not a matter of conjecture. Its outlines have already been made clearly visible. In 1995, for example, the trade war between the US and Japan, in which the Clinton administration threatened restrictive tariffs on imports of cars, resulted in a truce when the Japanese authorities threatened that such measures would provoke a withdrawal of the financial inflows holding up the American stock and bond markets. Not only would the measures envisaged by the Spartacists bring about a financial collapse, they would create the conditions for a new inter-imperialist war, as each imperialist power sought to expand its position at the expense of its rivals. In other words, the very political measures that the Spartacists insist will ensure the maintenance of relatively high wages in the advanced capitalist countries would, if enacted, bring about a breakdown of the world capitalist economy, leading inexorably to another war. While the Spartacists' arguments might appear at first sight to be a kind of madness, they reveal a social logic and method. As Lenin and other Marxists explained in the first part of this century, the material basis for the formation of a privileged labor aristocracy and trade union bureaucracy in the advanced capitalist countries lay in the superprofits extracted by the imperialist powers from the colonies and backward capitalist nations. This is the social layer for whom the Spartacists speak -- a layer that will demand tariff protection, financial regulation by the national state and ultimately military action with the claim that this is necessary to protect wages, living standards and "our way of life." The same social outlook is revealed in the economic arguments advanced by the Spartacists in support of their "wages floor" thesis. Major firms, they insist, will continue to use more expensive labor in the advanced capitalist countries "because 15 unskilled workers in Indonesia (earning well under a dollar an hour) cannot replace a skilled machinist in the US (earning $15 an hour) or Germany (earning $25 an hour) in the process of industrial production."15 Once again the unrestrained chauvinism, so characteristic of the bureaucratic layers for whom the Spartacists speak, comes bursting forth. It never occurs to them that there are skilled workers in Indonesia, India, China and elsewhere. Skilled workers only inhabit the advanced capitalist countries. The issue is not the replacement of a $15 per hour machinist in the US with 15 workers in Indonesia paid $1 per hour or less, but the replacement of a machinist in the US with

one in China or Indonesia, or in the case of Germany, with a machinist in Czechoslovakia or Poland, Spain or Russia, paid at a much lower rate. In the past, when technical considerations required that entire production processes had to be carried out in one center, the location of these industries, was to a great extent, determined by the location of skilled labor and backup facilities for capital equipment. But skilled labor can be developed in any part of the globe. There is now an international market not only for unskilled labor, but skilled workers as well. A computer programmer in the US is thrown into competition with a computer programmer in Bangalore, an American machinist with a machinist in China or India. Apart from revealing their utterly chauvinist outlook, the economic arguments of the Spartacists make clear their indifference to the vast mass of workers in the advanced capitalist countries who are earning nothing like $15 and $25 per hour. In fact, wages have fallen so low that manufacturers in the advanced capitalist countries have found that they no longer have to venture overseas to find "Third World" conditions -- they exist at home. VI. Globalized production and proletarian internationalism The eagerness with which the Spartacists advance both their political and economic arguments for a wages floor, expresses their ingrained hostility to a revolutionary perspective. In sum, the arguments of the Spartacists amount to nothing less than a call for the maintenance of the social and economic conditions that have formed such a crucial prop for the bourgeoisie. In the past, under the previous regime of national, as opposed to globalized production, the wages and living standards of workers were determined, not merely by the type of labor they performed, but also by the country in which they lived. That is, living standards and social conditions were determined not only by class, but by nationality, and it was this material factor which played such a crucial role in enabling the bourgeoisie, in collaboration with the reformist and Stalinist parties, to block the development of a genuine socialist and internationalist outlook in the working class. There was some basis, from the standpoint of the short-term, immediate interests of workers, for the claim that what was good for General Motors was good for the American worker, or the Holden worker in Australia, or the Opel worker in Germany, and consequently a material foundation for an appeal to nationalism. This situation has changed irrevocably. The conditions of the working class in one country are now more and more directly connected to the social position of the working class throughout the world. The globalization of production has created unprecedented material conditions for the development of genuine internationalism, not as some kind of external solidarity between nationally-based working classes, but as the mode of struggle of one global working class. This is the objective basis for the perspective of the International Committee -- the construction of the world party of socialist revolution as

the organizing center of the world proletariat. If the Spartacists and other petty-bourgeois radicals are so desperate to maintain the fiction that globalization has changed nothing, it is because they instinctively recognize that it has shattered the foundations of their own nationalist and opportunist politics. The Spartacist League's chauvinist arguments on wages are crowned by an attempt to provide a theoretical rationale for the whole exercise, by referring to Trotsky's theory of permanent revolution. "The Northite notion of 'globalization'," they write, "is in its theoretical essence a repudiation of the Trotskyist understanding of permanent revolution because it posits a tendency to equalize economic conditions throughout the world by leveling up productivity in the backward countries and leveling down productivity in the advanced ones."16 In the first place there is a complete jumbling of the processes involved in the global movement of productive capital. According to the Spartacists, to point to the tendency for the equalization of wages is to make an assertion that productivity is falling in the advanced capitalist countries and rising in the backward countries. The reality is that wage rates are not directly and mechanically related to productivity, as anyone who has the slightest familiarity with Marxist political economy can demonstrate. The wage rates paid to workers in any section of industry, whether skilled or unskilled, are not determined by their output, but by the value of their labor power. If skilled workers are more highly paid than unskilled workers, it is not because they are more productive, but because it takes longer to produce them -- considerable time is spent in training and education -- and the value of the labor power, around which their wage levels fluctuate in the market, is higher. The tendency for the equalization of wages does not arise because of movements in productivity -- in both the advanced capitalist countries and the backward countries alike the productivity of labor is rising -- but from the increased supply of labor. Productive capital now has at its disposal vast quantities of labor which previously, for all practical purposes, were beyond its reach. The claim that globalization implies a tendency to equalize economic conditions and thereby contradicts the theory of permanent revolution is answered quite clearly by Trotsky himself. "In contrast to the economic systems which preceded it, capitalism inherently and constantly aims at economic expansion, at the penetration of new territories, the surmounting of economic differences, the conversion of self-sufficient and provincial national economies into a system of financial interrelationships. Thereby it brings about their rapprochement and equalizes the economic and cultural levels of the most progressive and the most backward countries. Without this main process, it would be impossible to conceive of the relative leveling out, first, of Europe with Great Britain, and then, of America with Europe; the industrialization of the colonies, the diminishing

gap between India and Great Britain, and all the consequences arising from the enumerated processes upon which is based not only the program of the Communist International but also its very existence."17 These lines were written against the Stalinists who invoked "uneven development" to bolster their nationalist perspective of "socialism in one country." They apply no less forcefully to the Spartacists, who invoke "uneven development" in order to justify their assertion that the working class can still advance its interests within the framework of capitalism, provided its leadership is sufficiently militant. In other words, uneven development is now invoked as the basis for a theory of social reformism in one country, or group of countries, or, more accurately, for a particular and increasingly narrow and privileged section of the working class in one country or group of countries.

Part Three

Part Three: I.Transnational production, the nation-state and the origins of war The Spartacists' defense of the nation-state is revealed most clearly in the concluding sections of their four-part series. Here they explicitly defend the "progressive" role of the nation-state system and absolve it of any responsibility for imperialist wars. The Spartacists take violent exception to the following passage from the speech delivered by David North in 1992 entitled Capital, Labor and the Nation-State: "Under the aegis of imperialism, the globalization of production collides against the nation-state form within which capitalist rule is rooted. The efforts of the imperialists to overcome the restraints placed by the nation-state system upon their global economic ambitions lead to war. "The web of alliances being formed by various transnational corporations, such as Toshiba, IBM and Siemens, expresses the organic drive of the productive forces to organize themselves on a world scale. But the other side of this same process is the growing antagonism among nation-states and the eruption of various forms of national and communal conflict." For reasons bound up with their defense of the nation-state system, and, as we shall see, with their efforts to deny that it leads to war, the Spartacists chose to omit the italicized passage in their citation. They comment on the passage as follows: "Transnational corporations are here counterposed to imperialist nation-states. Moreover, the former are presented as (relatively) progressive, since they serve as agents of global economic integration, while the latter are viewed as reactionary and obsolete. North's statement is diametrically counterposed to what Lenin argues in his Imperialism."1 The class foundation of all the political positions of the Spartacists is summed up in these sentences. They denounce the International Committee for upholding and advancing the central thesis of Marxism that the nation-state system is reactionary and obsolete, because it cuts across the global development of the productive forces, and that the conflict between the global development of the productive forces and the system of national states is the source of imperialist wars. This is no mere theoretical debating point. Since 1914 and the outbreak of World War I, the attitude to the nation-state system has formed the dividing line between the program of Marxism, which fights for the unification of the international working class in the struggle for socialism, and opportunism, which defends its "own" bourgeoisie and its national state. In his Imperialism, Lenin demonstrated that the war signified the end of the progressive role of capitalism and its system of nation-states, and the objective necessity for the

socialist transformation. Either the international working class overthrew the capitalist order, or it would be plunged into a series of wars, as the bourgeoisie sought to divide and redivide the world in an endless struggle for resources, markets and profits. This was the essential meaning of Lenin's strategical perspective to transform the imperialist war into a civil war. This perspective was based upon a profound study of the new forms of capitalist production and finance. An examination of this is enough to demolish the claims by the Spartacists that the analysis of the International Committee is "diametrically counterposed to what Lenin argues in his Imperialism." In the passage from North's speech cited by the Spartacists, the significance of transnational production is explained as expressing "the organic drive of the productive forces to organize themselves on a world scale" -- a tendency that comes into direct conflict with the nation-state system. It is precisely this contradiction which Lenin underscored in his analysis of the initial development, at the beginning of the century, of multinational corporations and the formation of alliances between them. Replying to bourgeois claims that, while the capitalist system was characterized by the "interlocking" of different enterprises, the Marxist prediction of "socialization" of production had not come about, Lenin wrote: "What then does this catchword 'interlocking' express? It merely expresses the most striking feature of the process going on before our eyes... Ownership of shares, the relations between owners of private property 'interlock in a haphazard way.' But underlying this interlocking, its very base, are the changing social relations of production. "When a big enterprise assumes gigantic proportions, and, on the basis of an exact computation of mass data, organizes according to plan the supply of primary raw materials to the extent of two-thirds, or three-fourths, of all that is necessary for tens of millions of people; when the raw materials are transported in a systematic and organized manner to the most suitable places of production, sometimes situated hundreds or thousands of miles from each other; when a single center directs all the consecutive stages of processing the material right up to the manufacture of finished articles; when these products are distributed according to a single plan among tens and hundreds of millions of consumers (the marketing of oil in America and Germany by the American oil trust) -- then it becomes evident that we have socialization of production, and not mere 'interlocking;' that private economic and private property relations constitute a shell which no longer fits its contents, a shell which must inevitably decay if its removal is artificially delayed, a shell which may remain in a state of decay for a fairly long period (if, at the worst, the cure of the opportunist abscess is protracted), but which will inevitably be removed."2 Lenin's language in this passage is somewhat less direct than it otherwise would have been, because Imperialism was written with an eye to wartime censorship, but the political perspective he enunciates is none the less clear. The crucial task is the

overthrow of the private property nation-state system, which has become a shell that no longer fits its contents (socialized production) and must be removed. The key to the accomplishment of this task, he emphasizes, is the removal of the opportunist leaderships of the working class, who rallied to the national state as they took up the call for "defense of the fatherland" with the outbreak of World War I. The socialization of production, the beginnings of which were seen by Lenin in the oil industry, now extends to every sector of the economy. Transnational corporations, either alone or in alliances, dominate production in every sphere, organizing the manufacture and distribution of commodities world-wide. But at every point, this socialization of production conflicts with the private profit system and the division of the globe into rival national states. What is at stake in the Spartacists' denial of the "reactionary and obsolete" character of the nation-state system is the denial of the entire socialist perspective. If the nationstate system is still progressive, as the Spartacists clearly maintain, then there is no basis for its overthrow. The Marxist analysis of the reactionary character of the nation-state system is not a subjective denunciation, based on the ethical ideal of the unification of the working class, but rests upon objective foundations. Like the feudal state system before it, the bourgeois nation-state system has become historically obsolete, because it cuts across the development of the productive forces and the international division of labor. II. Capitalism strains against the confines of the nation-state The historical significance of transnational production lies in the fact that it represents the striving of the productive forces themselves to overcome the constrictions of the nation-state system. It is the further development of a process that Marx began to analyze through an examination of the significance of the rise of joint stock companies and the expansion of the credit system. Turning to the formation of joint stock companies, he wrote: "The capital, which in itself rests on a social mode of production and presupposes a social concentration of means of production and labor-power, is here directly endowed with the form of social capital ... as distinct from private capital, and its undertakings assume the form of social undertakings as distinct from private undertakings. It is the abolition of capital as private property within the framework of capitalist production itself."3 This "abolition of the capitalist mode of production within the capitalist mode of production itself" underlined the significance of the joint stock company as a "mere phase of transition to a new form of production."4 In the same way, transnational production represents the abolition of the nation-state system within the framework of the nation-state system itself, and, in that sense, signifies the transition to a higher social order. That is, transnational production begins to lay the objective foundations for the development of the planned world socialist

economy. But the development of transnational production within the framework of capitalism cannot eliminate the national state system. Hence, it reproduces all the contradictions of the capitalist mode of production in even more acute form. So long as the nation-state system remains, then the drive of the productive forces to overcome it leads to the intensification of inter-imperialist antagonisms and the threat of world war. In other words, so long as the nation-state system remains, the very development of the productive forces threatens to plunge mankind into new forms of barbarism. However, according to the Spartacists, these basic foundations of the Marxist program and perspective are no longer valid. "To be sure, North & Co do not deny a tendency toward imperialist war. But they do so by counterposing 'transnational' corporations to reactionary nation-states. Corporations like IBM are supposedly striving for a transnational capitalist order but are obstructed by the bad, old, obsolete nation-state system. On the contrary, the root cause of imperialist wars does not lie in the nation-state system as such, much less on nationalist and chauvinist ideology and demagogy."5 Spartacist's argument here is not with some theoretical innovation introduced by the International Committee, but with the long-established analysis of the Marxist movement. In his pamphlet Socialism and War, published in August 1915, Lenin wrote: "It is almost universally admitted that this war is an imperialist war. In most cases, however, this term is distorted or applied to one side, or else a loophole is left for the assertion that this war may, after all, be bourgeois-progressive, and of significance to the national-liberation movement. Imperialism is the highest stage in the development of capitalism, reached only in the twentieth century. Capitalism now finds that the old national states, without whose formation it could not have overthrown feudalism, are too cramped for it."6 In his famous pamphlet The War and the International, published in November 1914, Trotsky wrote: "What the politics of imperialism has demonstrated more than anything else is that the old national state that was created in the revolutions and the wars of 1789-1815, 1848-1859, 1864-1866, and 1870 has outlived itself, and is now an intolerable hindrance to economic development. The present war is at bottom a revolt of the forces of production against the political form of nation and state. It means the collapse of the national state as an independent economic unit."7 Countless other citations could be produced to show that the analysis of the International Committee on the origins of imperialist war are based on the theoretical foundations laid down by the Marxist movement over decades. The question that arises from the Spartacists' repudiation of this analysis is the following: if the origins of imperialist war do not lie in the contradiction between the development of the productive forces and the political form of the nation-state, then wherein do they lie? The Spartacists do not care to elaborate. But the logic of their politics is clear. If the national state system is not the cause of imperialist war -- as the Marxist movement has

insisted -- then it is perfectly permissible for "socialists" to support the strengthening of their own national state. While the Spartacists do not elaborate on the origins of war, their political trajectory is nonetheless clearly discernible, and forms part of a broader movement by the entire middle class radical milieu. One of the most politically-significant features of the civil war in the Balkans, following the break-up of Yugoslavia, has been the response of the petty-bourgeois radical tendencies. In one form or another they have demanded imperialist intervention, either directly, or in the form of the United Nations. The most egregious examples of this tendency have been the German Greens and the British Workers Revolutionary Party under the leadership of Cliff Slaughter. The Greens have been in the forefront of the campaign to demand direct intervention by the German military on the grounds of "humanitarianism," while the WRP campaigned for intervention by British imperialism, conducted discussions with representatives of the Croatian regime of Franjo Tudjman and applauded the activities of fascist militias. In the case of the WRP, the turn directly into the camp of imperialism was accompanied by the continuous assertion that the historical analysis of the Marxist movement on this complex question was no longer applicable. More than three years ago, the International Committee explained the broader significance of the evolution of the WRP as a "harbinger of momentous shifts in class relations on a world scale", which are always preceded by rapid changes in the positions of the petty-bourgeois radical tendencies, as they prepare themselves for their new role as direct servants of imperialism. Just as the Greens renounced their former pacifism to demand German military intervention, and the WRP applauded NATO intervention in the Balkans, so the open repudiation by the Spartacists of the reactionary character of the imperialist nationstate is the clearest sign of their preparation to directly enter into its service. III. Karl Kautsky and "ultra-imperialism" The central accusation of the Spartacists' four-part attack -- the subtitle of the series -is that the International Committee's analysis of globalization constitutes an "embrace" of the theory of ultra-imperialism developed by Karl Kautsky, the theoretical leader of the German Social Democracy, at the outbreak of World War I. Kautsky's thesis provided the main theoretical rationale for the support which the German social democratic leaders gave to their own bourgeoisie in its prosecution of the war, and for their virulent opposition to the Bolshevik Revolution of October 1917. While the accusation of "Kautskyism" forms the core of the Spartacists' denunciation, nowhere do they set out Kautsky's positions, nor do they demonstrate how these positions are reproduced in the International Committee's analysis of globalization. In fact, as we will show, it is the Spartacists who follow in the footsteps of Kautsky.

Before proceeding to Spartacist, let us review Kautsky's essential propositions, and the rationale they provided for the betrayals of the leaders of the German social democracy. Just as the war was breaking out, Kautsky unveiled his theory of ultra-imperialism in an article published in Neue Zeit, the theoretical journal of the SPD, which he edited. The Marxist movement had continuously warned of the approach of war, arising from the increasingly tense struggle between the major capitalist powers for the control of markets and access to raw materials. At the Stuttgart Congress in 1907, and again at Basle in 1912, the Second International carried resolutions calling upon the workers of the different capitalist countries to unite in the struggle against war and warning that should war break out, the working classes and their parliamentary representatives would "utilize the economic and political crisis created by the war to rouse the masses and thereby hasten the downfall of capitalist rule."8 The resolutions of the Second International explained that wars were inherent in the capitalist system and arose out of the struggle for markets and profits, and would only cease when capitalism was abolished. In his theory of ultra-imperialism, Kautsky advanced a new perspective -- the peaceful development of capitalism under the domination of a single world trust formed out of an agreement between the major financial powers to jointly exploit the globe. According to Kautsky: "What Marx said of capitalism can also be applied to imperialism: monopoly creates competition and competition monopoly. The frantic competition of giant firms, giant banks and multi-millionaires obliged the great financial groups, who were absorbing the small ones, to think up the notion of the cartel. In the same way, the result of the World War between the great imperialist powers may be a federation of the strongest who renounce the arms race. "Hence from the purely economic standpoint it is not impossible that capitalism may still live through another phase, the translation of cartellization into foreign policy: a phase of ultra-imperialism, which of course we must struggle against as energetically as we do against imperialism, but whose perils lie in another direction, not in that of the arms race and the threat to world peace."9 In a further article published in Neue Zeit in April 1915, Kautsky set out his position as follows: "The subsiding of the Protectionist movement in Britain; the lowering of tariffs in America; the trend towards disarmament; the rapid decline in the export of capital from France and Germany in the years preceding the war; finally, the growing international interweaving between the various cliques of finance capital -- all this has caused me to consider whether the present imperialist policy cannot be supplanted by a new, ultra-imperialist policy, which will introduce the joint exploitation of the world by internationally united finance capital in place of the mutual rivalries of national finance capital. Such a new phase of capitalism is at any rate conceivable. Can it be achieved? Sufficient premises are still lacking to enable us to answer this question ..."10 As Lenin demonstrated, Kautsky's speculations on the possibility of the development of ultra-imperialism were the basis of his defense of social chauvinism and the social democratic and trade union bureaucracies who provided the central prop for the

imperialist war effort. According to Kautsky, "the extreme Lefts" sought to "contrapose" socialism to inevitable imperialism, i.e., "not only the propaganda for socialism that we have been carrying out for half a century in contraposition to all forms of capitalist domination, but the immediate achievement of socialism. This seems very radical, but it can only serve to drive into the camp of imperialism anyone who does not believe in the immediate practical achievement of socialism."11 Lenin explained that the issue was never the "immediate" achievement of socialism, but the perspective on which the party had to fight -- the development of immediate propaganda against the war, to carry forward the independent struggle of the working class. Kautsky's position was that the war did not signify a fundamental turn in the historical development of capitalism. It could have been an interlude opening up a whole new phase of capitalist development. There was no necessity for the party to actively pose the task of taking political power; it could continue as before, carrying out general propaganda in favor of socialism, combined with the struggle for immediate reforms. The differences between Lenin and Kautsky were rooted in opposed assessments of the development of capitalism. For Lenin, the war signified a far-reaching crisis of capitalism -- the essence of which lay in the transformation of competitive capitalism into monopoly capitalism -- posing the necessity for the taking of power in the socialist revolution. For Kautsky, the war merely opened up several possibilities, including that of a further stage, ultra-imperialism. Hence the issue was not imperialism or the socialist revolution. The party, therefore, could not undertake the struggle for power, but had to continue along the lines established before the war. Kautsky's positions on the significance of the war, and his denunciation of "the Left", were guided by one central political objective: to provide the theoretical rationale whereby the party could resume its pre-war activities once hostilities ceased. In other words, Kautsky's theories were rooted in the defense of a definite social and political practice, and the defense of a social layer -- above all, the labor and trade union bureaucracies and sections of the petty-bourgeoisie aligned with them. IV. Spartacism and Kautskyism The social forces motivating the politics of the Spartacists are the same. Just as Kautsky sought to deny that the outbreak of the war represented a fundamental turning point in the development of capitalism, so the Spartacists maintain that the globalization of production does not represent a qualitative change in the structure of world capitalism. Consequently, the political arrangements of the post-World War II period can continue. Those politics were based on three foundations: the central role of the national state, the domination of the labor and trade union bureaucracies over the working class, and the possibility of achieving reforms within the framework of capitalism. All of Kautsky's theoretical positions were motivated by one over-riding concern: to deny that the struggle for socialism was now placed before the working class as a life-

and-death necessity, for which it had to organize and prepare, and the assertion that pre-war forms of struggles -- the fight for reforms separated from the final goal of the conquest of power -- could continue. The Spartacists share this platform. Kautsky asserted, against Lenin and the Left in the German Social Democracy that the alternative of imperialism or socialism would drive those who did not believe in the necessity of socialism into the camp of imperialism. In the same way, when the International Committee explained that, in the defense of even its most basic interests, the working class is confronted with the necessity of overthrowing the social relations of capitalism, the Spartacists attacked this as "a defeatist and abstentionist position toward the actual struggles of the working class." The Spartacists employ the same subjectivist method with regard to globalization as did Kautsky in regard to the war. According to Kautsky, even before the opening of the war, the arms race and the costs of colonial expansion had reached such a level that they were threatening the very bases of capital accumulation. Consequently "economic bankruptcy would occur prematurely as a result of continuing the present policy of imperialism. This policy of imperialism therefore cannot be continued much longer." That is, the arms race and the eruption of the war were not the outcome of objective tendencies within capitalism, but merely a question of particular policy options chosen by the bourgeoisie. Consequently, when the dangers of those policies became clear, the bourgeoisie would move to implement new ones. In exactly the same way, the Spartacists insist that globalization is not the outcome of inherent contradictions within the capitalist mode of production, but is simply a policy pursued by the bourgeoisie. At a certain stage, the bourgeoisie will recognize the dangers of this policy to the stability of the nation-state and implement other policies. Just as Kautsky suggested that the imperialists would assess the damage to their interests by the war and come to an agreement for the joint domination of the globe, so, according to the Spartacists, the imperialist powers will recognize the dangers posed by globalization and take action to reverse it. As for the Spartacists' accusation that the International Committee has advanced the possibility of some peaceful "ultra-imperialist" development of capitalism arising from the globalization of production, this is easily refuted by an examination of the record. In addition to the programmatic statements previously cited, one need only turn to the ICFI manifesto Oppose Imperialist War and Colonialism, published for the World Conference of Workers Against Imperialist War and Colonialism, held in Berlin on November 16 and 17, 1991. The resolution explained that the Gulf War and the virtual destruction of the industrial infrastructure of Iraq marked the beginning of a new eruption of imperialist barbarism. It warned that capitalism, after twice this century plunging mankind into world wars, was preparing an even greater world conflagration. In the words of the resolution: "These contradictions -- between social production and

private ownership, between the world character of production and the national-state system -- are the basic source of the economic breakdowns and violent political eruptions that have repeatedly shaken the planet in the course of the 20th century. Despite all the efforts to suppress them, they are once again building toward an explosion. There is no way to prevent a Third World War except through a victorious international proletarian revolution and the overthrow of capitalism. All other proposals for preventing war -- from calls for nuclear 'nonproliferation' treaties and proposals for disarmament, to pacifist appeals to the bourgeoisie, conscientious objection and prayer vigils -- are little more than exercises in cynicism or selfdeception."12 The resolution explained that, far from lessening inter-imperialist conflicts and tensions, the globalization of economic processes led to their intensification: "The modern transnational corporation has, from an economic standpoint, completely outgrown the old puny parameters of the national state. Its directors are compelled to think and act in terms of world production, world markets, world finance and world resources. The old distinctions between the home market and world market are in the process of being entirely effaced. The modern transnational corporation, regardless of the geographical location of its home base, is involved in a life-and-death struggle for dominance in the world market. But even as the national state loses its objective economic significance, its role as the political-military instrument of the competing national cliques of capitalists, in the struggle for world domination, grows enormously. This fact finds its most powerful expression in the accelerating preparations for a new world conflagration."13 V. Fear of globalization's revolutionary implications Spartacist expresses the fear of a layer of petty-bourgeois radicals over the revolutionary implications of globalization. They are terrified that the familiar world they have known and the political relations they have established over decades are being torn apart. Lenin never denied the tendencies pointed to by Kautsky -- the growing internationalization of finance capital, the intertwining of different national capitals and the subordination of national states to the domination of global financial interests. Rather, he sought to uncover their historical and revolutionary significance. His disagreement with Kautsky was not over whether objective economic tendencies within world capitalism were leading to the growth of internationally integrated finance capital, which transcended nationally limited finance capital. Rather, he disputed the conclusions Kautsky drew from this economic fact. In The Collapse of the Second International, Lenin wrote, referring to Kautsky: "'The growing international interweaving between the cliques of finance capital' is the only really general and indubitable tendency, not during the last few years and in two countries, but throughout the whole capitalist world. But why should this trend engender a striving towards disarmament, not armaments, as hitherto? ... To think that

the fact of capital in individual states combining and intertwining on an international scale must of necessity produce an economic trend towards disarmament means, in effect, allowing well-meaning philistine expectations of an easing of class contradictions to take the place of the actual intensification of those contradictions."14 In another comment on the economic processes cited by Kautsky, Lenin wrote: "There is no doubt that the trend of development is towards a single world trust absorbing all enterprises without exception and all states without exception."15 But, in opposition to Kautsky, Lenin insisted that this development "proceeds in such circumstances and at such a pace, through such contradictions and conflicts and upheavals -- not only economic but political, national, etc. -- that inevitably imperialism will burst and capitalism will be transformed into its opposite long before one world trust materializes, before the 'ultra-imperialist,' world-wide amalgamation of national finance capitals takes place."16 The Spartacists maintain, however, that to point to the interweaving of finance capital -- and the creation of new institutions to manage its common interests -- is to take the position of Kautsky. They operate according to the bourgeois logic of common sense, based on the exclusion of contradiction. According to this logic the international interweaving of capital means the lessening of inter-imperialist conflicts. Lenin insisted that the very trend of development to which Kautsky had pointed was the driving force of the war, and also of the world socialist revolution. The integration of finance capital and the transition from competitive to monopoly capitalism laid the foundation for the development of a socialist economy. "Capitalism in its imperialist stage leads directly to the most comprehensive socialization of production: it, so to speak, drags the capitalists, against their will and consciousness into some sort of new social order, a transitional one from complete free competition to complete socialization."17 Lenin insisted that imperialism was not a policy of finance capital, but an objective process, operating independently of the will and the consciousness of the capitalists themselves. They were not able to reverse it, even though it threatened the basis of their rule. For Kautsky, on the other hand, imperialism was a policy, which may or may not be reversed, but not an objective tendency of capitalist development. The modernday continuators of this tendency are the Spartacists, with their insistence that globalization is nothing more than a political campaign waged by the bourgeoisie, which can be reversed if it endangers the national states of the major imperialist powers. Against this subjective method, the International Committee has shown that globalization is an objective tendency of world economy -- the deepening and intensification of processes first analyzed by Lenin and other Marxists at the beginning of this century -- driving towards war and socialist revolution.

Part Four: I.The Spartacist League and the trade unions Spartacist's first political priority in attacking the International Committee's analysis of globalization is to uphold the perspective of trade unionism and, in particular, the authority of the AFL-CIO in the US. This is of a piece with its defense of a national program for the working class. The trade union form of organization arose historically on the soil of the national economy and the growing power of the national state. In the most diverse circumstances, whether the unions were the creation of a mass socialist party, as in Germany in the late 1800s, or whether they emerged as purely economic organizations with political ties to the liberal bourgeoisie, as in England, they based themselves on the success of the national economy and national industry. The politics of the unions focused on pressuring the state to protect national industry by means of tariffs, etc. This historical development gave rise to strong and ultimately dominant tendencies of national opportunism and reformism. The basic evolution of the trade unions was not only in opposition to socialist revolution, but to the class struggle itself. As the economic life of the nation states of Europe and America increasingly expanded beyond the national sphere and onto the world stage, with the emergence of imperialism, the nationalist politics of the unions became the imperialist politics of the unions. Thus the unions' tendency to embrace nationalism and integrate themselves into the state has very real material foundations. The development of globalized economy has undermined the viability of trade unions as nationally-based defensive organizations of the working class. This process is expressed in the decay of these organizations and their transformation into appendages of the employers and the state. What is Spartacist's basic argument? Globalization is not real. There has been no fundamental economic change in capitalism since the beginning of the century. There is no objective cause for the wave of defeats suffered by the labor movement over the past two decades and the general decline in wage levels, benefits and working conditions. There has been no qualitative change in the role of the official unions. Rather this process is to be explained simply by the subjective cowardice and treachery of the union leaders. Spartacist attacks the Socialist Equality Party for insisting that the decline of the unions cannot be simply, or even primarily, ascribed to the subjective qualities of the union leaders, but that the corrupt and reactionary character of the leaders must rather be understood, in the final analysis, as the subjective expression of more fundamental objective processes. The effort to establish the link between political processes and more essential changes and developments in the mode of production has always been the hallmark of Marxism. This scientific approach flows from the philosophical premises and world conception of historical materialism. Certainly, this was the method of the towering figures of the

Marxist movement, including Marx and Engels, Lenin, Trotsky and Luxemburg, and they applied it to the study of the evolution of the trade unions and their assessment of the limitations of this form of working class organization. This historical and materialist approach has always distinguished Marxism from revisionism. For Lenin, the objective connection between the development of imperialism and the degeneration of Social Democracy was the central point of his entire analysis of the betrayal of the Second International. In his preface to the 1920 edition of Imperialism, he insisted that understanding the objective basis of the betrayals of the leadership of the Second International was the key question in the political reorientation of the international proletariat. "Unless the economic roots of this phenomenon are understood and its political and social significance is appreciated, not a step can be taken toward the solution of the practical problems of the communist movement and the impending social revolution."1 Nothing less is required today. The betrayals, degeneration and collapse of all the old organizations of the working class must be grasped in connection with the economic processes that underlie them. Spartacist rejects this Marxist approach. They refuse at any point to make a historical evaluation of the trade unions. Instead they adopt an entirely subjectivist standpoint, which is summed up in their declaration, "The decline of the American labor movement is not fundamentally caused by the objective effects of 'globalization' but by the defeatist and treacherous policies of the AFL-CIO misleaders."2 To underscore their insistence that the official unions remain viable instruments of working class struggle, and that they simply need more militant leaders and policies, the Spartacists quote their 1984 statement entitled "Labor's Gotta Play Hardball to Win." There follows a bit of fantasizing, which only demonstrates the prostration of Spartacist before the trade union bureaucracy and the essentially reformist orientation that, of necessity, accompanies their nationalist politics. They offer the example of a building strike that occurred the previous winter in New York City, where 15,000 strikebreakers were used to replace the workers. The office buildings operated more or less as usual. Workers Vanguard explains that this struggle could have had a happy ending if only the union leaders had decided to do the right thing. Spartacist writes: "But let us imagine what would have happened if organized labor had sought to organize New York City's working people and appealed to the dispossessed population of New York's ghettos and barrios to actively support the heavily minority and immigrant building workers". In a further flight of fancy, they continue: "Dozens and hundreds of strikers and other workers, union and non-union -- along with black and Hispanic youth -- could have

surrounded every major office building in New York City and prevented anyone from entering." This, supposedly, would have been sufficient to bring Wall Street to its knees. "David North to the contrary, the CEOs of American multinationals would not have responded by closing their New York headquarters and running their operations out of New Delhi or Mexico City. Rather the cops would have attacked and tried to break the picket lines, arresting militant workers and their supporters. The outcome would then have been determined by the ability of the New York City labor movement to organize effective actions backed by popular support, especially in the black and Hispanic communities." Then comes the climax: "A one-day transit strike, for example, might have convinced the powers that be in the world's financial capital to impose a deal on the real estate barons favorable to the building workers."3 Here we see the cringing before the bureaucracy and the petty-minded reformism that arise from the subjective and nationalist politics of the Spartacist League. It is a pathetic scenario: First, the union bureaucrats change their minds -- and abandon their organic aversion to the class struggle -- and mobilize the masses. They even call a transit strike. (Not an indefinite strike; just a one-day strike. Even the fantasies of the Spartacist League conform to the small change of their politics.) This, however, is sufficient to unnerve the bankers. They change their minds and, in turn, change the minds of the building owners. The circle of subjective decision-making is completed. Everyone has changed his mind and all the problems are solved. The building workers win, and labor and capital are reconciled. Hence, according to the Spartacist League, there is no reason why the bitter experiences of workers with the AFL-CIO should become the starting point for drawing fundamental conclusions about the class nature and political role of the official unions, or the viability of national-based forms of organization and nationalist programs in general. The only permissible conclusion is that the AFL-CIO must somehow be made to adopt more militant tactics -- bigger picket lines and more aggressive forms of pressure on the employers and the government. It is forbidden to challenge the authority of the established trade union organizations. In all their struggles, American workers must seek the sanction of the AFL-CIO. In its 1994 perspectives document, the Spartacist League takes note of the growing disaffection of workers, especially the younger, more militant and more socialistically inclined sections, from the AFL-CIO unions. It notes further that the same younger workers who evince a concern for "broad political and social issues" have little interest in the external horse trading and internal machinations of their unions. Far from viewing as a positive development these signs of growing political interest and a striving to break the grip of the bureaucratic apparatus, Spartacists' reaction is to drag such workers backwards and keep them in the thrall of the AFL-CIO.

They write: "Given the succession of defeated strikes from PATCO to Caterpillar, many workers, especially the younger generation, do not view their union as a potential combat organization against the boss but at best as an agency to service their particular grievances. Consequently, we are now encountering young workers interested in broad political and social questions, who are not involved or concerned with intra-union affairs. We are also encountering immigrant workers whose experience in the more class-conscious labor movements of their homelands makes them open to revolutionary politics. It is necessary to convince such workers, who may be sympathetic to a socialist perspective, that the union movement can and must be transformed into an instrument of militant struggle against the bourgeois order." One could hardly find a more categorical attempt to promote trade unionism as a political antidote to the growth of socialist political consciousness within the working class. This paragraph reveals the diametrically opposed social and political tendencies embodied in the Spartacist League, on the one hand, and, on the other, the International Committee and the Socialist Equality Party in the United States. The SEP seeks to give conscious expression to the instinctive striving of the working class, in the first instance its more conscious and militant layers, to find a way out of the impasse resulting from the influence of the trade union apparatus. It seeks to reveal the connection between the failure of the AFL-CIO and the inherent limitations of trade unionism, and explain the need for the working class to take the road of political struggle, on the basis of a revolutionary, socialist and internationalist strategy. It encourages the development of a rebellion against the labor bureaucracy, and sees in the growing conflict between the working class and the AFL-CIO the basis for new, more militant and revolutionary forms of working class organization. The Spartacist League reacts to the signs of a collision between the working class and the trade union apparatus with alarm and hostility. It seeks to defend the apparatus and hold back the working class. It is well aware that the very workers who are hostile to the union apparatus and are looking for a more revolutionary alternative will be attracted to the political program of the Socialist Equality Party. That is why the Spartacists so deeply hate the SEP. Their antipathy for the Marxist party reflects the fear and hatred of the trade union bureaucracy itself. II. Marxism and the trade union question The Marxist movement has a long and rich record of theoretical and political discussion on the trade unions, and their inherent limitations. The Spartacist League makes no study of this record. Instead, it attributes to Marxism a rosy assessment of trade unions and their supposed revolutionary potential, which is entirely unwarranted from the standpoint of Marxist doctrine and, moreover, flies in the face of the long and bitter practical experience of the working class with the unions. The Spartacist League summed up its conception of the relation of the Marxist movement to the trade unions in an article published in Workers Vanguard in July 1993

entitled "Workers League vs. the Unions." They declared that "for communists," the "fundamental aim in the labor movement" is "to transform the unions into a tool of the revolutionary will of the proletariat." Spartacist's claim is radically false. Revolutionary Marxists have never considered their "fundamental aim" to be turning the unions into instruments of the revolutionary struggle of the working class. On the contrary, the greatest Marxist leaders and theoreticians have insisted that the unions, by their very nature, can at best serve as defensive organizations of the working class, seeking to obtain the best possible wages and working conditions within the framework of the capitalist system. Whatever tactics revolutionary Marxists advocated for intervening in the unions, they emphasized, as a matter of principle and revolutionary strategy, the narrow and limited scope of trade union struggle. They sought to educate workers on the need to construct independent political parties, based on the perspective of socialist internationalism, to fight for political power and the abolition of the wages system. The Spartacists' attempt to cut Marx down to their own size produces laughable results. At one point they counterpose to "parochial, nationally limited trade unionism" the need for "an internationalist class-struggle perspective." (Emphasis in the original). According to Spartacist, the vehicle for carrying out such a perspective is not a socialist political party of the working class, but rather the trade unions, somehow transformed from organizations that have historically embraced nationalism and class collaboration into their internationalist and revolutionary opposite. Next comes the following astounding sentence: "Indeed, one of the reasons for the establishment of the First International founded by Karl Marx was to organize tradeunion solidarity between workers in Britain and continental Europe." In other words, Marx founded the First International, not as the international revolutionary party of the working class, to which the unions would be entirely subordinate, but rather as a means for building the unions and coordinating their activities on a European-wide scale. Thus Spartacist recasts Marx in its own image, reducing him to a trade union administrator. We have already seen the theoretical blunders of Spartacist on the question of the wages struggle. It is also necessary to note the essentially ahistorical method which they employ in citing the "iron law of wages" controversy from the 1860s, in order to attack the IC's analysis some 140 years later. It is an example of the failure to consider political questions from the standpoint of their historical context and evolution that is so characteristic of the formal and anti-Marxist method of Spartacist, and pettybourgeois "leftism" in general. After all, Marx and Engels were writing about the economic struggle in the period of the first flush of trade unionism, when capitalist industry was growing rapidly in England, and was just beginning to develop on the Continent. The modern nation state structure of Europe and North America was still in the process of formation, and the mass socialist parties of the Second International were still the music of the future. The

working class was just beginning, in a mass way, to make its experience with the trade unions, and while their essential limitations could be grasped from a scientific understanding of the class relations of capitalist society, the future evolution of the unions could not be predicted with complete precision. An entire historical epoch has passed since then. Capitalism has evolved from free competition to monopoly capitalism and imperialism. Two world wars, the Russian revolution, the rise of Stalinism, the triumph of fascism in Europe, the collapse of the Soviet Union and decades of trade union reformism and corporatism have transpired. One would have to be a hopeless doctrinaire, a la Spartacist, without an inkling of the historical materialist method, to proceed as if these great historical events and experiences had no bearing on Marxism's assessment of trade unionism today. Indeed, even within their own lifetimes, Marx and Engels became increasingly scathing in their estimation of trade unionism and categorical as to its organic opposition to revolutionary socialism. As a serious review of the writings of the most important Marxist theoreticians makes clear, Spartacist's notion that the basic task of socialists is to transform the unions into instruments of revolutionary struggle is a wild departure from Marxist doctrine. Indeed, Marx and Engels stressed that the unions, by virtue of their essential economic function, did not oppose the wages system, but rather helped enforce it. What is this economic function? By means of the trade union form of organization, workers in a particular branch of industry combine their forces in order to obtain the most favorable possible terms for the sale of their labor power to the capitalists. On the one hand, this is an attempt by the workers to defend their position vis a vis the employers. But at the same time, resting as it does on the foundation of the wages system, it is a means of enforcing the capitalist law of wages, i.e., affecting the labor market so as to keep wages, at any given time, at approximately the full market value of labor power. Thus Marx wrote in Volume One of Capital: "The trade unions aim at nothing less than to prevent the reduction of wages below the level that is traditionally maintained in the various branches of industry. That is to say, they wish to prevent the price of laborpower from falling below its value..."4 Engels, in an article entitled "The Wages System"(1881), wrote: "The law of wages is not upset by the struggles of the trades unions. On the contrary, it is enforced by them."5 The same idea was elaborated in greater detail by Rosa Luxemburg in her 1899 polemic against Bernsteinian revisionism, Reform or Revolution: "But the fact is that the principal function of trade unions...consists in providing the workers with a means of realizing the capitalist law of wages, that is to say, the sale of their labor power at current market prices. Trade unions enable the proletariat to utilize, at each instant, the conjuncture of the market. But these conjunctures....remain

outside the sphere of influence of the trade unions. Trade unions cannot suppress the law of wages. Under the most favorable circumstances, the best they can do is to impose on capitalist exploitation the 'normal' limits of the moment. They have not, however, the power to suppress exploitation itself, not even gradually... "This much may be said about the purely economic side of the 'struggle of the rate of wages against the rate of profit,' as Bernstein labels the activity of the trade union. It does not take place in the blue of the sky. It takes place within the well defined framework of the law of wages. The law of wages is not shattered but applied by trade union activity."6 By ignoring and implicitly denying the law of wages under capitalism, and attributing to the trade unions unlimited possibilities for improving wages, the Spartacists, notwithstanding their indulgence in revolutionary-sounding rhetoric, deny the objective necessity for socialist revolution and the building of a political party of the working class based on Marxism. For if workers, by means of trade union struggle, can drive their wages ever higher, why should they embark on the struggle for power and the abolition of capitalism? At best, socialism becomes a moral desideratum, and scientific socialism is replaced by a new version of utopianism. The Spartacist League is not entirely oblivious to the reformist logic of its position. Thus, in the manner of all eclectic pretenders to Marxism, it includes a passage in its attack on the Socialist Equality Party and the ICFI aimed at providing itself with a theoretical cover. "There are, of course," the Spartacists write, "limits to what can be gained through trade-union struggle, however militant. As their labor costs rise beyond a certain point, capitalists will respond by retrenching (i.e., shutting down less profitable operations), introducing new labor-saving technology as well as shifting some operations to low-wage countries."7 In fact, this allusion to the law of wages is theoretically flawed. It suggests that the introduction of new technology to reduce the proportion of labor power to fixed capital is simply a contingent aspect of capitalist production, merely a defensive response to rising wages. While it is true that capitalists employ new technology for the specific and conscious purpose of undermining the wages struggle of workers, that is only one aspect of the matter. As Marx and Engels explained, as early as the Communist Manifesto, the constant revolutionizing of the production process is an inherent feature of capitalism, dictated not only by the pressure of the working class, but by the competition between rival capitalists which is an essential feature of the capitalist market. But even more illuminating of the basic method of Spartacist -- that is, subjectivism -- is what immediately follows the above quoted sentence: "The labor bureaucracy points to the ability of the capitalists to counter union gains by such means in order to argue that the workers must accept existing, or even worse, conditions without a fight, while laying the blame on workers in other countries for 'stealing American jobs.'"

Thus, having alluded to a fundamental and objective feature of trade unionism, which renders it incapable of permanently raising the wages of the working class, Spartacist rushes to place the blame, not on trade unionism as such, but rather on the nefarious motives of trade union officials. The SEP would be the last to dispute the rotten character and base motives of the union leaders, but the fact remains that workers' struggles, in so far as they remain restricted to the form of trade unionism, can find no means of overcoming the basic tendency of capitalist production to drive down workers' wages and working conditions. This is what Spartacist seeks to obscure. The theoretical insight into trade unionism provided by the Marxist analysis of capitalist production relations, and the scientific conclusions drawn from decades of historical experience, demonstrate that the trade union form of organization organically evolves in a manner hostile to the class struggle. The fact that trade unions arose historically out of the class struggle does not mean that they provide an adequate means for prosecuting that struggle. On the contrary, their essential role as instruments through which workers collectively bargain to sell their labor power, and the forms of organization attendant to that role, inexorably drive them to adopt a standpoint of class collaboration and conciliation. III. The antagonism between the unions and revolutionary Marxism Thus, the historically antagonistic relationship between the revolutionary Marxist party and the trade unions -- a phenomenon that has emerged wherever industrial capitalism has developed -- is rooted in the objective characteristics of the trade union form. The Marxist party represents the working class in its historical capacity as the revolutionary antithesis to the production relations of capitalism. The trade unions ultimately base themselves on these very production relations. What are some of the essential characteristics of the trade union form? In the first place, the trade unions organize workers according to particular crafts or branches of industry, that is, according to the requirements of the capitalist market for labor power. Thus, by their very nature, they do not represent the working class as a unified social and revolutionary force. Instead, they divide workers into various sectional interests, defined by the operation of the capitalist market, not the historical imperative to overcome that market. The unions, in essence, embody the working class in its aspect as an oppressed and exploited part of society, not as a revolutionary class. For precisely this reason, the unions respond to technological progress in a reactionary manner. Either they seek to block it, in order to maintain existing employment and wage levels, or they abandon any defense of jobs and wages and collaborate in imposing new forms of production at the expense of their members. The unions cannot embrace technological progress, which serves the long-term historical interests of the working class, and at the same time defend the immediate conditions of workers, which are threatened by such progress, because this task can be accomplished only on the basis of a revolutionary socialist orientation. Such an orientation strives to mobilize the working class in defense of its immediate needs, while demonstrating to the workers at every point the need to abolish private ownership of the means of production and

establish common ownership of technology and all the basic levers of economic life, so as to reorganize production in accord with human need, rather than profit. Luxemburg, in Reform or Revolution, sums up the attitude of the unions to technological development as follows: "Insofar as trade unions can intervene in the technical department of production, they can only oppose technical innovation. But here they do not act in the interest of the entire working class and its emancipation, which accord rather with technical progress and, therefore, with the interest of the isolated capitalist. They act here in a reactionary direction."8 The unions must, moreover, seek to establish legal and binding agreements with the employers for the terms of the sale of labor power. In so far as they enforce these contracts, they enforce the principle of bourgeois legality, and seek to ensure stable and peaceful relations between employer and worker. Any insurgent movement of workers threatens these relations, and social revolution means the eradication of the very economic and social foundations upon which the unions are based. What are the further implications of the acceptance of the status of workers as sellers of labor power? Inevitably it compels the unions to adapt themselves to the changing needs of capital for new forms of labor, based on higher levels of exploitation. When new methods and forms of capitalist production demand a new type of worker, without the safeguards of relatively secure employment, the eight hour day, firm job classifications, seniority, pensions, health benefits, etc.; when, instead, they demand flexible, part-time and temporary labor, where workers' hours are dictated by the immediate needs of the employer, and wages and benefits remain at poverty levels, the unions must either supply these requirements of the market, or go out of business. Historical experience has demonstrated, in practice, the organic antagonism of the trade unions to the class struggle and to social revolution. In this respect, the examples of Britain and Germany are most revealing, since the two countries provide the classical models of trade unionism. In Britain, the unions grew and flourished in the aftermath of the collapse of a revolutionary political movement of the working class, Chartism. They emerged as purely economic organizations and rapidly came under the political wing of the Liberal Party, the party of the manufacturing bourgeoisie. In Germany, the mass unions were founded by the Social Democracy. They officially adhered to the program of Marxism and emerged as instruments on the economic front of the mass socialist party. Yet, in both countries, the unions evolved as conservative defenders of the capitalist status quo. IV. Engels and the English unions Engels, in his writings on the English working class from the 1840s, evinced considerable enthusiasm over the growth of strike struggles and trade unions. But even at this early stage, he criticized the narrowness of the unions and considered Chartism to be a superior and more advanced form of struggle. In his later writings, he associated

the rise of the unions with a political decline in the labor movement, following the breakup of the Chartist movement after 1848. He became increasingly contemptuous of the unions, describing their transformation from instruments of working class insurgency into well-established institutions of the official status quo. In an 1879 letter to Bernstein, Engels did not mince words as to the state of the English labor movement: "For a number of years past the English working-class movement has been hopelessly describing a narrow circle of strikes for higher wages and shorter hours, not, however, as an expedient or means of propaganda and organization but as the ultimate aim. The Trades Unions even bar all political action on principle and in their charters, and thereby also ban participation in any general activity of the working class as a class... "One can speak here of a labour movement only in so far as strikes take place here which, whether they are won or not, do not get the movement one step further. To inflate such strikes -- which often enough have been brought about purposely during the last few years of bad business by the capitalists to have a pretext for closing down their factories and mills, strikes in which the working-class movement does not make the slightest headway -- into struggles of world importance, as is done, for instance, in the Freiheit, published here, can, in my opinion, only do harm. No attempt should be made to conceal the fact that at present no real labour movement in the Continental sense exists here, and I therefore believe you will not lose much if for the time being you do not receive any reports on the doings of the Trades Unions here."9 In 1881 he wrote: "Trades Unions have now become acknowledged institutions, and their action as one of the regulators of wages is recognized quite as much as the action of the Factories and Workshops Acts as regulators of hours of work."10 In the same article he anticipated the emergence of new, political forms of struggle that would overcome the stifling influence of the unions on the working class: "More than this, there are plenty of symptoms that the working class of this country is awakening to the consciousness that it has for some time been moving in the wrong groove; that the present movements for higher wages and shorter hours exclusively, keep it in a vicious circle out of which there is no issue; that it is not the lowness of wages which forms the fundamental evil, but the wages system itself. This knowledge, once generally spread amongst the working class, the position of the Trades Unions must change considerably. They will no longer enjoy the privilege of being the only organizations of the working class. At the side of, or above, the Unions of special trades there must spring up a general Union, a political organization of the working class as a whole."11 In a famous article entitled "England in 1845 and 1885," Engels described the shift in the attitude of the manufacturing bourgeoisie toward the unions following the rapid growth of British industry in the decades that followed the repeal of the Corn Laws (1846):

"Thus a gradual change came over the relations between both classes. The Factory Acts, once the bugbear of all manufacturers, were not only willingly submitted to, but their expansion into acts regulating almost all trades, was tolerated. Trades Unions, lately considered inventions of the devil himself, were now petted and patronized as perfectly legitimate institutions and as useful means of spreading sound economic doctrines amongst the workers. Even strikes, than which nothing had been more nefarious up to 1848, were now gradually found out to be occasionally very useful, especially when provoked by the masters themselves, at their own time."12 Of the "great Trades Unions," he wrote: "They form an aristocracy among the working class; they have succeeded in enforcing for themselves a relatively comfortable position, and they accept it as final. They are the model working men of Messrs. Leone Levi and Giffen, and they are very nice people indeed nowadays to deal with, for any sensible capitalist in particular and for the whole capitalist class in general. "But as to the great mass of the working people, the state of misery and insecurity in which they live now is as low as ever, if not lower."13 As for the relations between the First International and the trade unions, they were, contrary to Spartacists' depiction, essentially antagonistic. In a letter of 1871 to Carlo Cafiero, an Italian socialist who helped organize a section of the International in Naples, Engels wrote, "The trade-union movement, among all the big, strong and rich trade unions, has become more an obstacle to the general movement than an instrument of its progress..."14 In a letter of 1887 to John Mahon, a Scottish socialist, he said, "What you say about the leaders of the Trades Unions is quite true. We have had to fight them from the beginning of the International. From them have sprung the Macdonalds, Burts, Cremers and Howells, and their success in the parliamentary line encourages the minor leaders to imitate their conduct."15 During the life of the First International, Marx paid considerable attention to the development of trade union and strike struggles, and he held open the possibility that the unions could contribute to the revolutionary liberation of the working class. However, he had no illusions that they could serve as a substitute for the independent political organization of the working class. Thus, for example, at the Basle conference of the International, Marx spoke in opposition to a resolution submitted by a French delegate proposing the establishment of an international federation of trade unions. Such an association, the delegate declared, would be "the true commune of the future." According to a report of Marx's speech, "He [Marx] denies that it is the commune of the future because [this] project rest on the division of labor, principal cause of the slavery of the workers. It may ameliorate the lot of the workers a little, but it cannot be offered as an ideal."16 Another report quotes Marx as follows: "The trade unions by standing alone are powerless -- they will remain a minority. They do not have the mass of proletarians

behind them, while the International influences these people directly; the International doesn't need the organization of trade unions in order to win the workers -- the ideas of the International inspire them at once. It is the only union which inspires full confidence among the workers."17 In the final years of his life, Engels hoped that the emergence of unions among the more oppressed sections of workers, particularly the impoverished laborers of London's East End, and struggles such as the great dock workers' strike of 1889, signaled a new, militant brand of trade unionism that would contribute to the development of a mass socialist movement of British workers. Marx's daughter, Eleanor, played a leading role in the early struggles of one of these unions, the gas workers, as well as the political agitation that led to the formation of the Labour Party. But by the time of his death in 1895, Engels was writing with bitterness of the inclination of the leaders of the "new unionism" to follow the same conservative path as their predecessors. V. The lessons of German social democracy Within the German social democracy, the British unions were commonly referred to as bourgeois unions. It was felt that the German unions, founded by the socialist movement and officially part of the revolutionary camp, would play a different role. But as German industry developed rapidly, particularly in the latter half of the 1890s, and the membership and treasuries of the unions grew apace, they quickly began to evince the same reactionary tendencies that characterized their British counterparts. Eduard Bernstein, who lived for some two decades in exile in England, based his revisionist theories to a large extent on the "success" of the British unions. He claimed that the English unions demonstrated the capacity of trade union reformism, combined with parliamentary activity, to progressively overcome the exploitative tendencies of capitalism, leading eventually to a peaceful transition to socialism. While the leadership of the Social Democracy, including initially the trade union leaders, officially opposed Bernstein's attack on Marxist orthodoxy, his opportunist program articulated the social interests and political inclination of the German unions. The latter soon became the most important base for the opportunist tendency within the Social Democracy. In the first decade of the 20 th century, the party leadership increasingly adapted itself to the right-wing politics of the unions, and this process was very much at the heart of the political degeneration that led to the collapse of the German Social Democracy in 1914. Rosa Luxemburg was in the forefront of the political and theoretical struggle of the Marxist wing of the party against the national opportunist tendency, directing much of her fire against its exponents in the trade union apparatus. Her brilliant polemic against Bernstein, Reform or Revolution, was in large measure a refutation of the attempt to endow trade unionism with a revolutionary dynamic. While acknowledging their necessity, she called the efforts of the unions a "labor of Sisyphus," explaining that their successes were, in the end, determined by the economic and trade conjuncture, and that gains won in one period would be lost in another. Moreover, she declared, the more the

economy developed on an international scale, the less viable the national orientation of the unions. As the membership of the unions grew, alongside the growth of German national industry, the union leadership began to agitate for autonomy, arguing that their role as organizers of the day-to-day struggle required that they be independent of the decisions of the party. Luxemburg led the fight against this conception. In the first decade of the 20 th century, this conflict became more intense, particularly in the aftermath of the Russian revolution of 1905. Luxemburg embraced the revolution and insisted that it signified the emergence of proletarian revolution not only in Russia, but on a European-wide scale. The unions, on the contrary, reacted with horror to the events in Russia, recognizing in them a direct threat to their perspective of peaceful and gradual growth within the framework of German capitalism. When Luxemburg declared that the mass political strikes that had rocked the Tsarist autocracy represented the form of working class revolutionary struggle, and insisted that the Social Democracy had to prepare consciously for the outbreak of mass strikes in Germany, the unions responded with frenzied denunciations. At one trade union congress they passed a resolution banning any discussion of the mass strike tactic. In The Mass Strike, the Political Party and the Trade Unions, written in 1906, Luxemburg deepened her critique of the unions, warning of their opportunist trajectory, their tendency to exclude the most oppressed sections of the working class, and the growth of bureaucratism within them. Insisting on the hegemony of the revolutionary party over the trade unions, she directly linked the demand of the unions for autonomy with the opportunist tendency spearheaded by Bernstein. "The trade unions represent only the group interests and only one stage of development of the labor movement," she wrote. "Social democracy represents the working class and the cause of its liberation as a whole. The relation of the trade unions to social democracy is therefore a part of the whole, and when, amongst the trade-union leaders, the theory of 'equal authority' of trade unions and social democracy finds so much favor, it rests upon a fundamental misconception of the essence of trade unionism itself and of its role in the general struggle for freedom of the working class... "The theory of the 'equal authority' of trade unions and social democracy is likewise not a mere theoretical misunderstanding, not a mere case of confusion, but an expression of the well-known tendency of that opportunist wing of social democracy which reduces the political struggle of the working class to the parliamentary contest, and desires to change social democracy from a revolutionary proletarian party into a petty-bourgeois reform one. If social democracy should accept the theory of the 'equal authority' of the trade unions, it would thereby accept, indirectly and tacitly, that transformation which has long been striven for by the representatives of the opportunist tendency."18 In ringing passages that provide a concise and passionate summation of the political responsibility of Marxists to combat trade union fetishism, Luxemburg penned a

brilliant refutation not only of Bernstein, but of his present-day political offspring as well. As the following paragraphs show, the opportunists of Luxemburg's day employed the same demagogic arguments against the Marxists of that era as do the Spartacists against the International Committee today. What is the greatest crime of the IC, according to the Spartacist League? By rejecting the claim that the existing trade unions can be revived and turned into militant, indeed revolutionary, organizations of the working class, the IC is supposedly spreading defeatism among the workers. Here is how Luxemburg addressed such charges: "And finally, from the concealment of the objective limits drawn by the bourgeois social order to the trade union struggle, there arises a hostility to every theoretical criticism which refers to these limits in connection with the ultimate aims of the labor movement. Fulsome flattery and boundless optimism are considered to be the duty of every 'friend of the trade-union movement.' But as the social democratic standpoint consists precisely in fighting against uncritical trade-union optimism, as in fighting against uncritical parliamentary optimism, a front is at last made against the social democratic theory; men grope for a 'new trade-union theory,' that is, a theory which would open an illimitable vista of economic progress to the trade-union struggle within the capitalist system, in opposition to the social democratic doctrine."19 Luxemburg proceeded to show how the ostensible optimism of the opportunists masked a profound skepticism toward the revolutionary capacities of the working class and a hostility to the fundamental political task of Marxists, i.e., that of equipping workers with the theoretical means to critically evaluate their own experiences and thereby gain scientific insight into the social relations of capitalism, and the necessity for its revolutionary overthrow. In a passage that stands as a devastating indictment of Spartacist's contempt for any serious theoretical and historical assessment of trade unionism (or any other basic issue, whether it be the nature of world economy, Stalinism, or the national question), and their attempt, instead, to block workers from drawing any fundamental lessons from their own experiences, Luxemburg wrote: "In contradistinction to social democracy, which bases its influence on the unity of the masses amidst the contradictions of the existing order and in the complicated character of its development, and on the critical attitude of the masses to all factors and stages of their own class struggle , the influence and power of the trade unions are founded upon the upside down theory of the incapacity of the masses for criticism and decision. 'The faith of the people must be maintained' -- that is the fundamental principle, acting upon which many trade-union officials stamp as attempts on the life of this movement all criticisms of the objective inadequacy of trade unionism." (Emphasis added).20 That Lenin was in fundamental agreement with Luxemburg on the question of the unions is evident from his struggle at the turn of the century against Russian economism, which he characterized as a variety of Bernsteinian revisionism. What Is To Be Done was an extended polemic against the attempt to degrade Marxism to the level of trade unionism, which, as is well known, Lenin called "the bourgeois consciousness of

the working class." It is worth noting that the Russian unions played no appreciable role in the October Revolution. Indeed, the large rail workers union, which was dominated by the Mensheviks, worked actively against the socialist overthrow. Trotsky, in The War and the International, written in 1915, made a major contribution to the Marxist analysis of the unions, stressing their historical subordination to the national economy and the national state. He wrote: "The great centralized trade unions of Germany developed in direct dependence upon the development of national industry, adapting themselves to its successes in the home and the foreign markets, and controlling the prices of raw materials and manufactured products... "For all the undisputed superiority of the German organization, the tactics of the unions were very much the same in Berlin and London. Their chief achievement was the system of tariff treaties."21 As this brief historical review shows, the unions evolved in an opportunist direction, regardless of whether they were established independently of the Marxist party, or as the offspring of the party. Moreover, as the "new unionism" in England revealed, even where they embraced the more oppressed layers of the working class, they rapidly adopted a standpoint of hostility to the class struggle and the socialist revolution. History has moreover shown that the trade unions are most successful precisely when the national market is most secure and the national bourgeoisie enjoys an exceptionally favorable position on the world market. These are periods when, in general, the class struggle is at a low ebb and the political consciousness and initiative of the working class are in decline. Such was the case of England at the height of its industrial monopoly in the 19 th century, Germany in the period of its explosive industrial growth at the turn of the century, and the US in the period of its economic hegemony after World War II. Indeed, the more the class struggle has moved in the direction of a revolutionary confrontation with the bourgeoisie, the more the workers have come into conflict with the unions. Thus in Germany, in the period leading up to the outbreak of the world war, workers began to move independently of the unions, throwing up new forms of struggle such as workers' councils. And when proletarian revolution erupted in Germany at the end of the war, the unions played a crucial role in the Social Democracy's counterrevolutionary suppression of the mass movement. It is no accident that Friedrich Ebert, a top Social Democratic union leader and first president of the Weimar Republic, oversaw the assassination of Luxemburg and Karl Liebknecht in January of 1919. VI. The historic degeneration of trade unionism It is necessary to bear in mind that the great Marxists of the late 19th and first decades of the 20th century were writing about unions which, notwithstanding their severe

limitations, played a far greater role in the daily life of the working class than the moribund trade union organizations of today. The pre-World War I German unions, in particular, provided many social services and served as a center of the cultural life of the workers. Officially, at least, they championed the socialist aspirations of the working class, and masses of workers looked to them for leadership and participated in their activities. Those who led the mass German unions had been initially educated and trained by the party and claimed the mantle of Marxism. Even in the first decades following the Second World War, the major unions in Europe claimed some form of allegiance to socialism, and the AFL-CIO in the US remained, to some extent, a focus of the militant resistance of workers to the encroachments of big business. It was one thing, under these conditions, for the revolutionary party to employ as a central tactic the placing of demands on the union leadership, as a means of exposing the trade union bureaucracy before the workers. It is an entirely different matter today, after two decades during which the unions have essentially completed their degeneration, betraying the most elementary interests of the working class and transforming themselves into outright corporatist extensions of the employers and the state. In an article written in 1937 entitled "Not a Workers' and Not a Bourgeois State?" Trotsky answered those who argued that the crimes of the Stalinist bureaucracy and its totalitarian methods rendered the Fourth International's characterization of the Soviet Union as a degenerated workers' state obsolete. "The class character of the state is determined by its relation to the forms of property in the means of production," he wrote. Insofar, therefore, that the Soviet regime continued to base itself on the nationalized property forms established by the October Revolution, it remained a workers' state. At the same time Trotsky insisted that this assessment was not timeless. Unless the horrific degeneration of the Soviet state was halted, through a political revolution of the Soviet working class and the overthrow of the Stalin regime, and the Kremlin's nationalist program was replaced by the international revolutionary program of Bolshevism, the bureaucracy would inevitably complete its counterrevolutionary role and usher in the restoration of capitalism. To illustrate his basic point, Trotsky made an analogy to the trade unions. "The character of a workers' organization such as a trade union is determined by its relation to the distribution of national income. The fact that [AFL President] Green and Company defend private property in the means of production characterizes them as bourgeois. Should these gentlemen in addition defend the income of the bourgeoisie from attacks on the part of the workers; should they conduct a struggle against strikes, against the raising of wages, against help to the unemployed, then we would have an organization of scabs, and not a trade union."22 If one considers the role of the AFL-CIO and its international counterparts in the more recent period, in light of Trotsky's stipulation that a trade union is a workers' organization insofar as it seeks to defend the workers' share of the national income, then it is clear these organizations have, for some time, failed to meet this criterion. For an extended period, the AFL-CIO has actively collaborated with the bourgeoisie in

lowering the living standards of the working class, sabotaging strikes, framing up workers and throwing workers onto the unemployment lines. More recently, it has embraced the government's forced-work welfare "reform," by which the ruling class seeks to turn millions of unemployed into a new source of super-exploited cheap labor. Workers are trapped inside "trade union" organizations, which have assumed the character of corporatist syndicates, controlled by petty-bourgeois bureaucracies, whose own interests are in no way connected to even a residual defense of the rank and file's share of the national income.

Part Five: I.Mythologizing the CIO In asserting that the answer to the crisis facing the workers' movement is for the AFLCIO to "play hardball," Spartacist hearkens back to a mythical past of the American unions. This is based on an extremely one-sided and, therefore, false presentation of the origins and early evolution of the CIO. In reality, the seeds of the subsequent degeneration of the unions were already present in the political foundations upon which the CIO was established. It is certainly the case that the Congress of Industrial Organizations emerged in the second half of the 1930s as the product of a mass upsurge of the industrial working class. The Depression fueled a social movement with revolutionary implications. The socio-economic catastrophe generated not only explosive discontent, it undermined the confidence of tens of millions in the capitalist system itself. But it was by no means foreordained that this movement would be restricted to a struggle for industrial unions, rather than developing into a revolutionary, political movement, directed consciously against the capitalist system. That the upsurge never went beyond a narrow trade union form, institutionalized moreover in a labor movement based on the defense of the profit system and the political subordination of the working class to the capitalist parties, was the result, in the first instance, of the calculated actions of the CIO leadership, working in tandem with the Roosevelt administration and utilizing the political support of the Stalinist Communist Party. Those within the top leadership of the old American Federation of Labor who broke with their fellow bureaucrats in 1935 to establish the CIO -- John L. Lewis, Sidney Hillman and others -- set out to channel the rising militancy of mass production workers into an industrial union organization that would be loyal to the profit system and would obtain the official sanction of the capitalist state. They acted in response to unmistakable signs that the working class was beginning to move along a revolutionary trajectory, and that socialist forces were beginning to win a mass audience. The year before, general strike movements had rocked three major cities -- San Francisco, Toledo and Minneapolis, and in each case socialists, Stalinists and Trotskyists had played leading roles. Roosevelt responded by pushing through the Wagner Act, providing legal sanction for the formation of unions and establishing the National Labor Relations Board to regulate the establishment of industrial unions and bring the force of the state to bear on their political character. There is no question that his administration encouraged Lewis and company in their effort to establish an industrial union movement that would be subservient to the basic interests of American capitalism. This was of a piece with his New Deal reforms, which represented a more far-sighted defense of the profit system, against the threat of socialist revolution, than many leading American capitalists at the time were capable of conceiving or accepting. The top CIO leaders shared this basic aim, and their ability to consolidate the CIO was ultimately dependent on the sympathy of

the federal government under Roosevelt. A detailed analysis of the early years of the CIO is beyond the scope of this statement, but the most salient facts demonstrate the degree to which the consolidation of the industrial unions in America depended on the support of the federal government. Following the victory of the sit-down strike against General Motors in early 1937 -which erupted largely behind the backs of the top CIO leaders and was, to a great extent, led by local militants and socialists -- most of the major organizing struggles of the CIO met with defeat. The only significant breakthrough the CIO achieved in steel prior to 1941, was US Steel's agreement to recognize the Steel Workers Organizing Committee (SWOC) in March of 1937, just a few weeks after the auto workers' victory at GM. And this came not as the result of a struggle, but rather a corporate decision made by US Steel executives, who concluded that SWOC would serve as a stabilizing force in the mills. The drive to organize the second tier of major steel manufacturers, the so-called "Little Steel" firms such as Bethlehem, Republic and Inland, met with violent resistance from the employers and collapsed in the summer of 1937. By that point the CIO as a whole was foundering. The fundamental incompatibility of the right-wing political perspective and class collaborationist orientation of the CIO leadership with the aspirations and needs of the working class was already evident. In 1938, Leon Trotsky urged the Socialist Workers Party, then the Trotskyist movement in the US, to adopt the demand for the CIO to break from Roosevelt and establish a labor party, and to elaborate a socialist program of transitional demands for such a party. He did so precisely to give the SWP a tactical lever for freeing the mass movement from the stifling framework of reformist trade unionism. The new union movement had reached an impasse, he explained, and the upsurge of the working class would either take an independent political form, or it would be driven back and demoralized. Two years later he wrote: "The rise of the CIO is incontrovertible evidence of the revolutionary tendencies within the working masses. Indicative and noteworthy in the highest degree, however, is the fact that the new 'leftist' trade union organization was no sooner founded than it fell into the steel embrace of the imperialist state. The struggle among the tops between the old federation and the new is reducible in large measure to the struggle for the sympathy and support of Roosevelt and his cabinet."1 Prior to 1941, the real membership of the CIO never reached the 2 million mark. At the beginning of that year the United Mine Workers and the Amalgamated Clothing Workers, the two previously established unions that had formed the backbone of the CIO at its founding, accounted for some 40 percent of dues-paying members. The total number of workers actually brought into unions under the auspices of the CIO had rarely reached a million. The United Auto Workers, SWOC and the United Rubber Workers had a combined dues-paying membership of under 200,000, fewer than the Amalgamated Clothing Workers alone.

The year 1941 saw the real consolidation of the CIO. The labor federation and its affiliates won union contracts at Ford, the Little Steel companies, the major electronics manufacturers and other vital sectors of industry. Union security provisions, such as the automatic dues checkoff, made their appearance, as did no-strike clauses, binding grievance procedures and other measures designed to contain the militancy of the rank-and-file. But this growth and consolidation underscored the reliance of the CIO on the support of the government, and further institutionalized the statist character of the new unions, because it was directly bound up with the preparations of American imperialism to enter World War II. The Roosevelt administration supported the union victories in early 1941 and cultivated the CIO leadership, because it saw the CIO as a necessary and critical force for mobilizing the industrial working class behind the war and imposing the labor discipline which the war would require. The CIO leadership, for its part, eagerly sought and gratefully accepted the more aggressive backing of the federal government. It argued that union recognition and the establishment of contracts were vital to stabilizing the home front and securing the interests of American capitalism in the global conflict. Already in 1940, the UAW's Walter Reuther presented a plan for union collaboration with management and the government in the expansion and coordination of war production and in May of that year, Roosevelt appointed Hillman to the National Defense Advisory Commission. Throughout the war the CIO's basic role was to enforce labor discipline. Immediately following Pearl Harbor, both the CIO and the AFL voluntarily adopted no-strike pledges and agreed to enforce wage controls. The CIO, through its participation in the National War Labor Board, collaborated with big business and the government to police the working class, whose militancy remained at a high level, as reflected in the scores of strikes that erupted in defiance of the no-strike pledge. The CIO presented itself as the epitome of patriotic support for the war effort and, more generally, the "American way of life." President Phillip Murray and other CIO leaders published tracts calling for the permanent establishment of corporatist relations between the unions, the employers and the state, including the formation of industrial councils and other joint labor-management structures. In return for its role in suppressing the class struggle, the CIO demanded the extension and institutionalization of union security measures, such as the closed shop, firm contracts and, above all, the dues checkoff. It argued that these were necessary to strengthen the union apparatus in holding the workers in check. "The union," declared one CIO tract of the period, "assumes the responsibility to see that no stoppages of work occur, that all workers adhere to the contract machinery to settle grievances peacefully, and that wages and other vital cost factors are pegged generally for the life of the contracts."2 Without a union shop and the dues checkoff, the argument continued, union officials would be forced to accommodate themselves to dissident workers, whose withholding of dues would serve as a form of blackmail.

On this corporatist foundation CIO membership rose dramatically in the course of the war, as did the treasuries of the CIO and its affiliated unions. The bureaucracy consolidated its grip over the mass of workers on the basis of its newfound wealth and the official sanction of the state. With the emergence of the Cold War, the CIO threw off its lingering radical pretensions and aligned itself firmly behind the anti-communist crusade of American capitalism. The purge of left-wing and socialist elements, on the one hand, and the participation in US efforts to subvert radical and pro-Soviet labor organizations around the world, on the other, were the logical outcome of the political orientation of the CIO from its formation. II. Spartacist's defense of the AFL-CIO In an attempt to sustain their position, the Spartacists must gloss over the actual record of the AFL-CIO, especially in the course of the past two decades -- an entire historical period during which the unions have collaborated with the ruling class to impose huge setbacks on the working class. It must ignore the many expressions of a change in the relationship of the trade union bureaucracy to the working class on the one side, and the bourgeoisie on the other. It must overlook the empirical indices of the decline of the AFL-CIO, and it must disregard the fact that the decay of the trade unions is not a purely American, but rather a universal, international phenomenon. It must further grossly distort the historical attitude of Marxism toward trade unionism. The Spartacist League's nationalist politics impel it to give political support to the American trade union bureaucracy, the most backward and openly reactionary of any labor bureaucracy in the world. In the AFL-CIO the universal tendencies of the trade unions toward bureaucratism, class collaboration and integration into the structure of the capitalist state find their crudest expression. As a social layer, the AFL-CIO bureaucracy is distinguished by its narrowness of vision, unscrupulousness in pursuit of personal gain, parasitism, cringing before the bourgeoisie, fear and hatred of the working class, and outright criminality. The unions are led by aspiring petty-bourgeois elements who have an aversion to honest labor and latch onto the union apparatus as a means of obtaining a level of wealth and status otherwise beyond the reach of their limited talents and intelligence. In its totality, the bureaucracy embodies a social element similar to that which finds its natural abode in the ranks of organized crime, and it is by no means an accident that the American unions have been so closely linked to the Mafia. Despite its miserable record in upholding the interests of the union rank-and-file, the basic personnel of the bureaucracy remains the same year after year. Corporate CEOs are routinely tossed aside when their performance fails to meet the expectations of their major shareholders, but the leaders of the AFL-CIO survive one debacle after another. No serious, middle-sized business would tolerate the ineptitude shown by the

AFL-CIO leadership. The fact that within the unions such incompetence goes unpunished is a testament to the sclerotic character of these organizations. In the first place, they are devoid of any real democracy. Workers who attempt to oppose the policies of the leadership are routinely intimidated and not infrequently attacked. In no area of American life are working people so bereft of democratic rights as in the unions. The immovable character of the AFL-CIO leadership is, in the second place, an expression of the deep-seated alienation of rank-and-file workers from the entire union apparatus. The chasm that separates the bureaucracy from the membership, let alone the far larger sections of the working class that stand outside the unions, is expressed in the general distrust and even disgust which workers feel for these organizations. In their attempt to deny any objective basis for the decay of the unions, the Spartacists pile up contradictions and anomalies they cannot answer. They demand that the AFLCIO do all sorts of militant things, including mass picketing, mass strikes, international strike action, etc. But why should anyone believe that the AFL-CIO is either willing or able to undertake such measures when it has increasingly repudiated even the most limited forms of class struggle? Why is the actual trajectory of the AFL-CIO in precisely the opposite direction? Before telling workers they should devote their energies to forcing the AFL-CIO to carry out mass strikes, is not one obliged to give serious thought to the fact that the actual level of official strike action has been plummeting for years, reaching a historic low of 37 major strikes in 1996? In its perspectives document, the Spartacist League advances as the center of its strategy for the unions, the demand that the AFL-CIO launch a massive drive to organize the South. This, they claim, will enable the unions to recover their lost prestige within the working class. But they never consider an obvious problem. Shortly after World War II the CIO announced with great fanfare a drive to organize the South. It was a miserable failure. And that was in the immediate aftermath of the strike wave of 1945-46, the most massive in US history. It was, moreover, at a time when some 70 percent of the workers in basic industry were unionized, the CIO bureaucracy had yet to carry out its anticommunist purge of radical and socialist elements, and the spirit of shop-floor militancy stemming from the sit-down strikes of the late 1930s was still alive. How is one to explain the inability of the CIO of the mid-to-late 1940s to organize the South? And if the official labor movement of that period was unable to carry out this task, why should any thinking worker harbor illusions that its present, much decayed offspring is up to the challenge? To declare that it is simply a matter of bad leaders answers nothing. If the explanation for the past two decades of betrayed and defeated strikes, broken unions, contract concessions and declining membership rolls is the subjective qualities of the union tops,

then that must mean the previous lot of union leaders -- George Meany, Walter Reuther, I W Abel, etc. -- who presided over generally rising wages and benefits and a much larger dues base, were "good." Or if one does not wish to make such a distinction in the leading personnel of the unions, then how does one account for the sharp decline? Why did the union leadership universally adopt such treacherous policies? III. The degeneration of the unions -- an international phenomenon Why, moreover, are unions all over the world carrying out similar policies? Why are they embracing labor-management corporatism and handing back to the employers gains won by previous generations of the working class? In the opening article of its series on globalization, the Spartacist League acknowledges in passing the universal character of this process. It states: "From the American Midwest to the German Ruhr, labor officials are telling their workers: 'If you don't accept a wage freeze or even a cut in wages and benefits, the bosses will close down your plant and shift production to India or Mexico.'"3 The decline in the membership and power of trade unions is clearly a global development. The American unions have seen the most spectacular decline, falling from their high of 35 percent of the labor force in the post-World War II period to 14.8 percent in 1996. If one considers only the private sector, the collapse is even more dramatic. In 1996 a mere 10.2 percent of private sector workers were union members. This is an even lower percentage than that attained by the old American Federation of Labor. The same trend is to be seen in Europe, Japan and Australia. Between 1980 and 1990 union membership in Great Britain fell from 47 percent to 34 percent of the work force. By 1996 that figure had fallen to 25 percent. In the course of the 1980s, union membership in France declined from 17.5 percent to 9.8 percent. The total membership of the German Federation of Unions fell from 11,800,000 in 1991, the year of east-west unification, to 8,973,000 in 1996, a decline of 24 percent. In Japan unionization fell from 1980 to 1990 from 31.1 percent to 25.4 percent. By 1996, the figure in Japan had dropped to 23.2 percent. From 1986 to 1996 the percentage of workers in Australia who were union members fell from 46 percent to 31 percent. But if this is an international phenomenon, is it not then clearly more than a matter of the subjective motives of individuals? The American trade unions, with their crude anticommunism and chauvinism, and their gangster-ridden bureaucracies, may be an extreme example, but they nevertheless embody universal characteristics of contemporary trade unions and typify the reactionary evolution of trade unionism internationally. The Spartacists never asks themselves what accounts for this remarkable uniformity. The driving forces that have accelerated and deepened the degeneration of the unions, and brought to the fore, in their fullest development, the reactionary tendencies inherent in the trade union form of organization, are to be found not, in the subjective

motives of trade union leaders, but rather in the vast changes in world economy associated with the globalization of production, the international mobility of capital and the unfettered sway of the world market over every national economy. The Spartacist League condemns the assessment of the AFL-CIO made by the Socialist Equality Party in the US. It rejects the SEP's analysis of the enormous decline of the US labor movement over the past two decades without making any serious analysis of its own. This in itself exposes the Spartacist League's pretensions to being a Marxist organization. The bitter defeats suffered by the working class during this period represent a strategic experience whose causes and lessons must be assimilated, if the workers' movement is to be revived on viable political and organizational foundations. A review of this record shows that the AFL-CIO's collaboration in the destruction of the past gains of the working class was the response of the trade union bureaucracy to the deepening crisis of American capitalism and the growing threat to its markets and profits from increasingly powerful international rivals. Indeed, within a few years of the breakdown of the Bretton Woods monetary system in 1971, which signaled the end of the hegemonic economic position the US had enjoyed after World War II, the United Auto Workers and other unions made a marked turn toward the establishment of new, corporatist relations with big business. In the early 1970s, the American Big Three automakers' share of the world market was in decline. Even worse, from the standpoint of American capitalism, a large and growing portion of the domestic market was being captured by foreign companies, especially those in Germany and Japan. Similar tendencies were emerging in steel and other basic industries. The initial attempt of US capital to confront this threat, by attacking the wages and conditions of American workers, exemplified by Nixon's wage controls of 1971-72, provoked an eruption of militant resistance. AFL-CIO President George Meany was forced to withdraw from Nixon's wage board in 1972, amid resolutions for general strike action and public calls from a number of union bodies for the launching of a labor party. In auto, a wave of local strikes broke out against the drive to cut costs by imposing speedup. Once this upsurge had been contained, General Motors, at the initiative of the UAW, instituted the first of its joint labor-management programs, called Quality of Work Life. In 1975, the New York City unions accepted sweeping concessions and job cuts as part of a plan drawn up by Wall Street and backed by the Ford administration to avert municipal bankruptcy. This set the pattern of union give-backs that was to be initiated on a national scale a few years later. With Carter's appointment of Paul Volcker to head the Federal Reserve Board in 1979, the ruling class initiated a deliberate policy of deflation and mass unemployment. It used the threat of plant closures and joblessness as a bludgeon against the resistance of the working class. The AFL-CIO and the UAW entered into an alliance with big business

and the government to drive down the wages and conditions of the working class, so that American corporations could cut costs and intensify their exploitation of American workers, thereby improving their ability to compete with their foreign rivals. This was signaled in 1979-80 by the UAW's acceptance of contract concessions and Chrysler's agreement to bring UAW President Douglas Fraser onto the corporate board of directors, as part of the government-backed bailout of the automaker. Thus, the nationalist and pro-capitalist policies of the unions led directly to their collusion with big business, in the corporate offensive against the working class that continues to the present. IV. A wave of defeats and betrayals But American capitalism demanded still more from its labor lieutenants. When Reagan fired the PATCO air traffic controllers in 1981, signaling a turn on the part of the ruling class to outright unionbusting, the AFL-CIO isolated the strikers and allowed them to be smashed. Under no conditions would the bureaucracy sanction a struggle against the capitalist state. It sought to demonstrate its loyalty to the ruling class and its readiness to countenance any depredations against the working class, so long as its own position was preserved. PATCO set the stage for the wave of defeated and betrayed strikes which continues to this day. Big and small, they number in the hundreds. The 1980s, in particular, saw some of the most bitter labor struggles since the 1920s and 30s, as workers sought to resist the assault on their wages, benefits and working conditions. But while the employers, with the backing of the government, revived the use of strikebreakers and private paramilitary forces, resulting in the deaths of strikers in a number of major struggles and the injury of hundreds more, the trade union bureaucracy isolated and sabotaged one strike after another. Scores of strikers were railroaded to long prison terms in labor frameups, under conditions in which the unions refused to publicize their cases and abandoned the victimized workers to their fate. In this way, the AFL-CIO unions systematically worked to break the militancy of the working class and help impose the demands of big business. As it oversaw the smashing of strikes and breaking of unions, the AFL-CIO handed back to the corporations previous gains in wages and working conditions won over generations of struggle. The wages and benefits of American workers, once the highest in the world, fell below those of workers in most of Europe and Japan. With the aid of the AFL-CIO, the American ruling class transformed the US into a cheap labor haven for international capital. The prolonged boom in American corporate profits and stocks of the 1990s has been based on this erosion of working class living standards. As union rolls declined, the combined result of corporate downsizing, unionbusting and the growing disillusionment of masses of workers with the AFL-CIO, the bureaucracy sought to establish a new, even more collusive relationship with the employers. It adopted the program of corporatism, denying any fundamental conflict between the interests of workers and employers. By means of joint union-management programs and structures, the AFL-CIO placed the union apparatus at the disposal of the capitalists

and their drive to intensify the exploitation of the work-force. The basic political framework for this renunciation of any form of independent working class struggle was economic nationalism, i.e., the call for American workers to unite with their American employers against foreign competition. The AFL-CIO indulged in flag-waving chauvinism and racist demagogy against workers of other countries, who were accused of stealing American jobs. The trade union bureaucracy sought to insulate its economic and social interests from the impact of the economic crisis and its own treacherous policies, including the narrowing of its membership and dues base. It established new financial relations with corporate employers and investment bankers, in the form of profit-sharing arrangements, representation on corporate boards, "workers' buyouts" and "employee stock ownership plans," union-management funds and joint business ventures, and other devices. It increasingly functioned more as a labor contractor than a representative of the workers, using the jobs, wages and working conditions of union members as bargaining chips, as it negotiated for its own interests with corporate CEOs, offering wage and benefit concessions in return for shares of stock and positions on corporate boards. A study published at the end of 1991 showed that, between 1970 and 1987, private sector union membership fell 36 percent. But the total income of the unions from all sources rose by 16 percent. This is partly explained by a sharp rise in the per capita income of the unions taken directly from the membership in the form of dues, fees and other membership payments. The bureaucracy has further compensated for the loss of membership through an increase in direct subsidies from the government. When all government funds to the unions are added up, they amount to nearly $1 billion a year. In addition, the bureaucracy receives considerable returns on its billions of dollars in assets, in the form of interest, dividends and rental income. On these economic and political foundations -- financial investments and direct subsidies from the capitalist state -- rests a very privileged petty-bourgeois layer, constituting the bureaucracy of the official unions. Thus the past two decades have witnessed a whole series of related quantitative changes -- the level of union membership, the organizational and financial intertwining of union and management interests, the widening gap between the conditions of the workers and the privileges of the officials, the growing financial independence of the bureaucracy from the fate of the membership -- which in their sum have produced a qualitative transformation. In the AFL-CIO apparatus, workers today confront a hostile force, whose well-being is contingent on ever worsening conditions for the working class, including the vast bulk of union members. When Spartacist defends the AFL-CIO as "the mass organization of the working class" it never ventures outside the realm of empty abstraction. But any objective, historical review of this organization demonstrates that it has become an instrument of the trade

union bureaucracy, not the working class. Indeed, on more than one occasion over the past 15 years, the AFL-CIO has worked openly to break strikes. It is only necessary to recall one of the pivotal struggles of the 1980s to grasp the actual relationship between the AFL-CIO and the working class. When in 1985-86 striking Hormel workers in Austin, Minnesota rejected a concessionary wage agreement negotiated by the national union and sought to spread their strike to other meatpacking plants, the national union, with the full support of the AFL-CIO, publicly denounced the strikers, ordered workers to cross their picket lines, ousted the local leadership and seized control of the local, negotiated a sweetheart contract and reconstituted the local with a new membership consisting of Hormel workers who had crossed the picket line and returned to work. This betrayal exemplified not simply the subjective rottenness of the union leadership, but rather the objective transformation of the AFL-CIO into an instrument of the corporations and the capitalist state. V. Strategy and tactics, Marxism vs. opportunism Alongside the charge of defeatism, Spartacist marshals against the SEP and the ICFI the allegation of abstentionism in relation to the struggles of workers in the unions. This is a red herring. As any reader of The International Workers Bulletin in the US and the press of the IC sections around the world knows, our movement has never failed to intervene aggressively in the trade unions, defending the interests of the workers against the attacks of the employers and the treachery of the union bureaucracy. What Spartacist really means by abstentionism is the SEP's refusal to base its interventions in the unions on the tactic of placing demands on the union leadership. If we fail to direct the workers along this path, they declare, we are guilty of capitulation by default to the union officialdom. This charge highlights a fundamental and principled issue that distinguishes Marxism from the Spartacists and all other varieties of petty-bourgeois opportunism. Marxists proceed at every point from a revolutionary strategy that is derived from a historical perspective and a scientific analysis of the development of world economy and the international class struggle. The principal consideration in the elaboration of this strategy is the education of the working class, that is, the struggle to raise the political consciousness of workers to the level of the objective tasks placed before the proletariat by the crisis of capitalism. Transformations in economic, social and political relations, from the most basic forms of production to the institutions of the bourgeoisie and the forms of organization of the working class, must be taken into account. The elaboration of such a perspective can only be based on the historical and dialectical materialist method of Marxism. The mere citation of precedent and amassing of quotations settles nothing. Tactics, as important as they are, must be worked out on the basis of such a scientifically grounded revolutionary strategy. They must be consistent with this strategy and serve its ends.

This conception is entirely foreign to the petty-bourgeois "radicals". Their politics are of an entirely conjunctural character. For them, nothing is higher than the immediate tactic, whose raison d'etre is political expediency. To the extent that they seek a Marxist coloration for their opportunist practice, it is based on an eclectic and ahistorical approach, which treats Marxism as a dogma -- an approach entirely alien to the method and spirit of Marxism. A prime example is the uncritical and politically reactionary orientation of Spartacist toward the trade unions, or, to be more precise, toward the trade union bureaucracy. There may be times and conditions, even in the present period, when it becomes necessary for the party to place demands on the trade unions. But to elevate this provisional and limited tactic to the status of a strategy, far from educating and strengthening the working class, is to spread the most harmful illusions among workers and bolster the most reactionary forces. To tell workers that they must place demands on the unions to do things that these organizations are neither willing nor able to do, is not to enlighten, but rather to confuse, miseducate and, ultimately, demoralize the masses. On the contrary, the task of Marxists is to elucidate clearly to the workers the nature of the organizations that falsely claim to represent them, and to explain the inevitability of a collision between the working class and the trade unions. The political and theoretical work of the SEP is aimed at preparing the working class for this collision and laying the basis for the emergence of new and higher forms of working class struggle. Certainly, the working class requires organizations to prosecute the day-to-day defense of its economic and social interests. But trade unions are not the only possible form of organization geared to the defense of workers' immediate conditions. History has seen the emergence of more broad, democratic and militant types of organization, such as factory committees and workers councils, which transcend the limited realm of struggle over wages and hours and aspire to establish workers' control over the production process. More than a century of historical experience has demonstrated that trade unions in and of themselves cannot provide the means for the working class to organize a struggle against the capitalist system. For this, the working class requires, above all, a mass socialist party, organized on an international scale, whose strategy and tactics are guided by Marxist theory. Spartacist's perspective leads inevitably to the politics of the popular front, i.e., a political alliance between the working class and "left" or liberal sections of the bourgeoisie. In the course of their polemic against the ICFI, the Spartacists all but openly embrace this type of orientation. Thus they quote Dan Gallin, the general secretary of the International Union of Food and Allied Workers' Associations, who complains that the global mobility of capital "weakens the power of national democratic pressures from labour parties and trade unions." Spartacist comments: "Gallin, who is at least more intellectually honest than North,

openly argues for a popular-frontist perspective of 'building a broad-based people's movement' to counter the effects of 'globalization.' "But neither does North denounce the union misleaders for not mobilizing the economic power of the workers' movement and popular political support against the capitalist offensive."4 These lines from the Spartacist League raise the obvious question: what is the difference between its perspective of the trade unions "mobilizing the economic power of the workers movement and popular political support against the capitalist offensive" and the "broad-based people's movement" against globalization advocated by Gallin? In fact, there is no essential difference. The political perspective of the Spartacist League is fundamentally the same as Gallin's. VI. A crude apology for bureaucracy Not only do the Spartacists echo the reformist and nationalist politics of the trade union officialdom, they quite consciously seek to defend the bureaucratic apparatus against the growing anger of the rank and file. They give voice to the bureaucracy's fear that the Marxist movement will gain an ever-wider hearing among disaffected workers. One characteristic passage in the Spartacists' polemic reflects the consternation of the more conscious representatives of the trade union bureaucracy. Spartacist complains: "On the one side, they [the ICFI ] denounce the unions as 'failed organizations,' thereby seeking to appeal to workers fed up with the bureaucracy's endless sellouts and angry and frustrated over falling living standards. On the other side, they try to make themselves look good by posing as sympathetic to workers engaged in struggle."5 In the end, Spartacist's attack on the ICFI reveals itself to be a rather long-winded attempt to justify the crudest of apologetics for the trade union bureaucracy. In the course of their articles, they rally behind the United Auto Workers bureaucracy and denounce The International Workers Bulletin for characterizing UAW President Stephen Yokich and the local UAW leaders as the real scabs in the union's surrender to Caterpillar in December of 1995. They attack the British section of the ICFI for exposing the bogus "international solidarity campaign" mounted by Stalinist shop stewards and union bureaucrats to cover their betrayal of the Liverpool dockers. And they fawn on Arthur Scargill, the pro-Stalinist leader of the British National Union of Mineworkers, who played the central role in the defeat of the 1984-85 miners' strike, and has since presided over the decimation of the union, from 183,000 members to less than 10,000 today. Finally, they denounce the Workers League, the forerunner of the Socialist Equality Party in the US, for refusing to line up behind the AFL-CIO's chauvinist campaign in 1993-94 against the North American Free Trade Agreement (NAFTA). The Workers League opposed the NAFTA agreement, characterizing it as an imperialist scheme to completely subordinate the Mexican economy to the needs of the US transnationals and

Wall Street financial institutions. But the Workers League gave no support to the AFLCIO's anti-NAFTA crusade, which was based on economic nationalism and the promotion of right-wing demagogues like Ross Perot and Patrick Buchanan. As the Workers League explained, the campaign of the AFL-CIO expressed the interests of neither American nor Mexican workers, but rather the reactionary standpoint of the trade union bureaucracy and more backward sections of capitalist industry, which feel threatened by the increasing globalization of the economy. Instead, the Workers League advanced the perspective of a united struggle of American, Canadian and Mexican workers against the North American bourgeoisie. In The International Workers Bulletin of September 20, 1993, we wrote: "American workers must join forces with workers in Mexico and Canada to combat the North American-wide organization of capital expressed in the North American Free Trade Agreement. Workers throughout North America must join forces with workers in Asia, Africa, Latin America and Europe in the struggle against transnational corporations that operate on every continent... "Joint action among the workers of the US, Canada and Mexico, many of them employed by the same multinational corporations, requires first of all an insurrection against the official labor organizations, the AFL-CIO, the Canadian Labour Congress, the Mexican CTM, and the establishment of direct links and coordination among the workers in all three countries, ranging from common strike action to broader, united political struggles." The Spartacist League singles out this article for attack. Significantly, it concentrates its fire on the opening sentence: "American workers must not line up behind either side in the capitalist debate over NAFTA, but must adopt an independent class standpoint which is based on the genuine, i.e., international, interests of the working class." Spartacist dismisses the notion of a working class opposition to NAFTA which is independent of the AFL-CIO and opposed to its chauvinist politics as "neutrality" toward US imperialist domination of Mexico. In other words, no working class struggle is conceivable -- or permissible -- outside of the framework of the trade union apparatus. This, of course, is precisely the standpoint of the labor bureaucracy and its sponsors in the bourgeoisie. In Spartacist's denunciation of the independent standpoint of the working class and the perspective of internationalism is concentrated the twin pillars of its politics: nationalism and support for the trade union bureaucracy. One final aspect of Spartacist's promotion of trade unionism and the AFL-CIO bureaucracy merits consideration. In common with all of the other middle-class organizations that emerged from the student protest milieu of the 1960s, it exhibits a curious evolution in relation to the AFL-CIO. In the 1960s and 1970s, when the unions,

despite their reactionary leadership and political orientation, still retained a significant element of the shop floor militancy inherited from the past, the Spartacist League, and the radical "left" in general, virtually ignored the struggles inside the labor movement. The late 1960s and early '70s, in particular, saw a series of massive strikes and insurgent movements inside the factories and work locations. In the aftermath of Nixon's wage freeze of August 1971, strikes broke out in auto, on the docks and in other industries, and rank-and-file opposition to union participation on Nixon's wage panel began to assume nationwide proportions, eventually forcing AFL-CIO President George Meany to leave the board. But the general attitude of Spartacist and the rest of the middle-class "left" was to denounce the industrial working class as racist, and characterize the unions as "white job trusts." At a time, therefore, when the working class inside the unions was being politically radicalized and moving in opposition to the bureaucracy, and the latter was in deep crisis, the Spartacist League took the position that to place political demands on the unions was to support Meany and the bureaucracy. They bitterly attacked the Workers League for raising the demand that the unions break from the Democratic Party and establish a labor party based on a socialist program. For its part, the Workers League fought for this demand in the unions as a means of exposing the bureaucracy and educating workers on the need to establish their political independence. In 1971, 1972 and 1973 the Workers League held well-attended conferences of workers and young people to develop the fight for an independent party of the working class based on socialist policies. Spartacist adapted itself to the McGovern campaign and those layers within the petty-bourgeois protest movement that were backing the South Dakota Democrat. But as the degeneration of the unions assumed an increasingly finished form, Spartacist became ever more infatuated with the AFL-CIO. Precisely at the point where the bureaucracy had extinguished the last traces of rank-and-file control and embraced the program of corporatism, and the moribund character of the unions was expressed both in their shrinking dues base and their systematic betrayal of workers' struggles, Spartacist and the rest of the middle-class ex-radicals became the most stalwart defenders of the hegemony of the AFL-CIO over the working class. This convergence of the trade union bureaucracy and the " radical left" expresses the movement of class forces, i.e., the coming together of specific petty-bourgeois layers in opposition to an independent movement of the working class.

Part Six: I.On the national question Nationalism is the cornerstone of Spartacist's attitude toward the backward countries, just as it is in relation to the class struggle in the advanced capitalist ones. And, just as in the US it extols the supposed revolutionary capacities of the trade unions, in those nations historically oppressed by imperialism it attributes similar potential to bourgeois nationalism and petty-bourgeois guerrillaism. Before dealing with the arguments made in its attack on the perspective of the International Committee, it is worth noting that, as with trade unionism, Spartacist has made an apparent political about-face on the national question. For decades the Spartacist League was distinguished by its indifference toward the masses in the oppressed countries, and it repeatedly adopted positions which, despite their ultra-left verbiage, lined the organization up with the US State Department. In 1967, when Israel seized the West Bank, Gaza Strip, Sinai and the Golan Heights in the Six-Day War, the Spartacists described the assault by the US-backed Israeli military against the semi-colonial Arab states of Egypt, Jordan and Syria as a "futile and reactionary conflict of rival nationalisms and their mystical ideologies." Nearly a decade later, when the Lebanese civil war broke out, it adopted a similar "plague on both your houses" position in relation to the conflict which pitted the Palestine Liberation Organization and its allies in the Lebanese National Movement against the Maronite ruling class and its fascist Phalange militia. Spartacist described the struggle as "mutual communal terror." With the outbreak of war between Britain and Argentina over the Malvinas islands in 1982, Spartacist once again saw no reason to defend an oppressed nation confronting the onslaught of imperialism. The group declared that it could "only look forward to the spectacle of these two hated right-wing regimes sinking each others' fleets on the high seas," adding, "it's a good thing if they grind up their respective military machines." Spartacist did not have long to wait. In the onesided conflict which followed, hundreds of Argentine sailors went to their deaths in the sinking of the Belgrano and many more ill-equipped and untrained conscripts were massacred by British commandos. Now, in their attack on the perspective of the International Committee of the Fourth International, the Spartacists present themselves as the champion of national liberation and "self-determination". Curiously, their line on the national movements has shifted precisely under conditions in which the inability of these movements to give any expression to the aspirations of the oppressed masses has been demonstrated by a whole series of world historical events. For good reason, Spartacist makes no concrete evaluation of any of these

movements. As with its fantasy about the AFL-CIO calling a general strike in support of the New York City building workers, the group is reduced to imagining "what if." In the course of its argument that the national state stands as the omnipotent power in the affairs of world capitalism, it declares the following: "Let us imagine that a left-nationalist government comes to power in Mexico and repudiates the country's foreign debt. Will the IMF's army invade Mexico and install a puppet regime? Will the IMF's navy blockade Mexico's ports? Will the IMF agents confiscate the assets of the Mexican government?"1 The simplest answer to these musings is of course, no; it doesn't have to do any of those things. It would simply cut off Mexico's access to credit. More fundamentally, however, this passage demonstrates how Spartacist's false theoretical conceptions are bound up with a politically bankrupt orientation. It never occurs to this organization to ask itself why such a "left-nationalist government" exists nowhere in the world today. Indeed all of the old bourgeois nationalist governments have jettisoned their economic nationalism. Policies based on import substitution and the development of national industry have long since given way to IMF-supervised "structural adjustment" programs aimed at attracting globally mobile capital to invest in the given backward country. In Mexico, the ruling Institutional Revolutionary Party, or PRI, the longest-reigning bourgeois nationalist movement in the world, is one of the best examples of this fundamental shift. But the same essential path has been pursued by every one of the old nationalist movements, from the Peronists in Argentina, to the Congress Party in India, the Nasserites in Egypt and the various states created through the decolonization of Africa. A similar though even starker evolution is to be found within the second wave of national liberation movements, those which espoused the "armed struggle" and relied on the aid of the Soviet Stalinist bureaucracy from the 1960s to the 1980s. Every single one of them -- the Palestine Liberation Organization, the African National Congress, the Nicaraguan Sandinistas, the FMLN in El Salvador -- has abandoned the radical anti-imperialist rhetoric which they put forward as recently as a decade ago. All of them have accepted imperialist-imposed settlements and embraced the policies of "free market" capitalism, abandoning in the process the most basic rights of the masses that they purported to represent. How does Spartacist explain this phenomenon? As with its approach to everything else in political life, it is not a matter of finding an objective basis, rooted in the process of production, but rather attributing this evolution of the nationalist movements to the subjective failings and "betrayals" of their leaderships. Yet, the very universality of this turn makes clear that it is the outcome of the objective character of the national movements and their relations with global capital. The role of opportunist organizations like Spartacist is to cover up the class nature of these movements and the inevitable catastrophes that their policies

produce. The transformation of the bourgeois nationalist regimes and movements is bound up with the development of capitalism. The great national movements of the 18th and 19th centuries broke down feudal particularism, creating broader economic and social entities, which corresponded to the essential needs of capitalist production. In particular they established national markets, bound together by common law and language. In an earlier period, the national liberation struggles in the oppressed countries had a similar economic imperative. As long as productive capital remained organized largely within the nation-state framework, there existed a significant objective basis for the conflict between the national bourgeoisie in these countries and imperialism. The national bourgeoisie sought to cast off imperialist domination in order to gain control of the national market and undertake the exploitation of its "own" working class. With this aim it sought to mobilize the popular masses behind it -- India and China providing the classic examples of such struggles. It found itself compelled to raise democratic demands and even adopt a socialist coloration, all the while working to prevent the struggle from challenging capitalist private property. II. Globalization and the "new nationalism" The unprecedented global integration of capitalist production has vastly diminished the significance of these national markets in comparison to the global market to which production is more and more directed. Instead of seeking the expulsion of imperialist capital and the development of national industries, the old bourgeois nationalist regimes are carrying out austerity and privatization programs aimed at attracting globally mobile capital with cheap labor and conditions of unrestricted exploitation. At the same time, the national bourgeoisie have linked their fate directly to the world markets, exporting ever-increasing amounts of their own capital to global financial centers like Wall Street. The new global economic relations have also provided an objective impulse for a new type of nationalist movement, seeking the dismemberment of existing states. Globally-mobile capital has given smaller territories the ability to link themselves directly to the world market. Hong Kong, Singapore and Taiwan have become the new models of development. A small coastal enclave, possessing adequate transportation links, infrastructure and a supply of cheap labor may prove a more attractive base for multinational capital than a larger country with a less productive hinterland. At the same time IMF austerity programs which mandate the dismantling of national development schemes and destruction of limited social welfare programs have turned central governments in the oppressed countries into bill collectors for the foreign banks. Rival ruling cliques in regions possessing natural resources or

industries which are being siphoned off to pay the foreign debt see in separatism the possibility of eliminating the middle man and striking a more profitable arrangement by dealing directly with foreign capital themselves. In India and China, the national movement posed the progressive task of unifying disparate peoples in a common struggle against imperialism-- a task which proved unrealizable under the leadership of the national bourgeoisie. This new form of nationalism promotes separatism along ethnic, linguistic and religious lines, with the aim of dividing up existing states for the benefit of local exploiters. Such movements have nothing to do with a struggle against imperialism, nor do they in any sense embody the democratic aspirations of the masses of oppressed. They serve to divide the working class and divert the class struggle into ethnocommunal warfare. The International Committee opposes this type of bourgeois separatism. For this reason Spartacist has accused it of "social chauvinism" as well as "passive acceptance of imperialist oppression and exploitation of backward countries." Most of its charges are repeated from a series of articles which appeared in Workers Vanguard in 1995, under the headline "David North 'abolishes' the right to self-determination." Contrary to Spartacist's hysterical assertions, the national secretary of the SEP in the US has no more "abolished" the rights of oppressed peoples than he has "embraced" the long dead Karl Kautsky. The International Committee's real crime, in the eyes of Spartacist, is to make a fresh examination of the Marxist attitude toward the national question in general, and the formula "right of selfdetermination" in particular, in light of the changes in the forms of capitalist production and the concrete experience of the working class and the oppressed masses over the course of the 20th century. This, Spartacist maintains, is impermissible. It rejects a dialectical materialist analysis in favor of a purely scholastic approach, searching through the writings of Lenin and Trotsky to find quotations, ripped out of context, to justify its ongoing adaptation to bourgeois nationalism. In this, as in many other respects, the Spartacist League only apes the retrograde methods pioneered by Stalinism. The thrust of Spartacist's indictment is that the Socialist Equality Party fails to ritualistically repeat the formulations put forward by Lenin in 1913. In Lenin's defense, however, it should first be stated that even 80 years ago his position had nothing to do with the support for national separatism now espoused by Spartacist and so many other groups representing the middle class left. For Lenin, the right to national self-determination had one meaning and one meaning only -- the right to form a separate, independent state. He repeatedly insisted that this right had for the Bolshevik Party a "negative" connotation. That is, in recognizing this right, the Bolsheviks did not advocate national separatism as a preferred course of action. Rather, the right was inserted into the program to

make it clear that the party opposed the Tsarist regime's use of military force to compel an oppressed nationality to remain within the borders of the Russian empire. Lenin insisted that it was necessary to recognize the right of self-determination in order to win the confidence of the oppressed nationalities in the leadership of the working class. At the same time, he fought all manifestations of national separatist influence on the working class itself, insisting on the political independence and unity of the workers throughout the Russian empire under the leadership of a common all-Russian party. Spartacist and other middle class leftists who espouse national separatism today start from a diametrically opposed perspective. Their aim is not to win the confidence of the oppressed in the working class and a socialist solution to the conditions created by capitalism. To the extent that these groups themselves ever had any confidence in the working class and socialism, they abandoned it long ago. They promote national separatism as a more "realistic" means of opposing imperialism. They try to invest it with a non-existent revolutionary potential in order to better subordinate the working class politically to the nationalist movements. III. Lenin's conditional attitude toward self-determination The extremely conditional form in which Lenin invoked the right to selfdetermination was spelled out in his 1913 work on the subject. The fact that he did not endow this right with some eternal or universal significance was made clear by the way in which he distinguished between three different categories of countries. "First," he wrote, were: "the advanced capitalist countries of Western Europe and the United States. In these countries progressive bourgeois national movements came to an end long ago."2 When Lenin wrote "long ago", he was referring to the period, less than half a century since the unification of Germany and the defeat of the Confederacy in the American Civil War, that had brought an end to the era of bourgeois revolution, and consequently to the applicability of the right of nations to self-determination, in these areas of the globe. Nearly twice as many years divide our own period from that of Lenin, and the changes relating to the national question have been even more sweeping and worldwide in their scope. One only has to consider the second and third categories of nations, those in which Lenin said that the slogan of self-determination still had validity in 1913. The second category, Lenin wrote, consisted of "Eastern Europe: Austria, the Balkans and particularly Russia. Here it was the twentieth century that particularly developed the bourgeois-democratic national movements and intensified the

national struggle. The task of the proletariat in these countries, both in completing their bourgeois-democratic reforms, and rendering assistance to the socialist revolution in other countries, cannot be carried out without championing the right of nations to self-determination."3 This area of the globe has seen perhaps the greatest revolutionary upheavals of the 20th century, including the October Revolution in Russia. The rise of new national separatist movements in the former Soviet Union, the Balkans and Eastern Europe is bound up with the drive to restore capitalism throughout the region. It cannot be claimed that the ethno-nationalist movements that have arisen in these countries are "bourgeois-democratic national movements". or are somehow related to the task of completing "bourgeois-democratic reforms." Promoted and led in large part by former Stalinist bureaucrats, these movements seek to carve out ethnically homogeneous territories by means of persecution, mass expulsions and slaughter. They express the social interests of unscrupulous cliques of aspiring native capitalists who desire their own direct link with world finance capital. In a third category Lenin placed "the semi-colonial countries, such as China, Persia and Turkey, and all the colonies, which have a combined population of 1,000 million." In these areas, he stated, "the bourgeois-democratic movements either have hardly begun, or have still a long way to go." He stressed the obligation of socialists to demand "the unconditional and immediate liberation of the colonies without compensation", a demand which he said, "signifies nothing else than the right to self-determination."4 Especially in this third category, the post-World War II period has seen vast changes. Africa, Asia and the Middle East, which in Lenin's day were under colonial rule, have, with the exception of a handful of territories, long since gained political independence. Nationalist movements have ruled in many of these countries for up to half a century. Indeed, it is the disintegration of the original nationalist projects which has spawned the new separatist movements seeking to divide up existing states in the former colonial countries. It has often been the case in the history of the Marxist movement that formulations and slogans which had a progressive and revolutionary content in one period take on an entirely different meaning in another. National self-determination presents just such a case. The right to self-determination has come to mean something very different from the way in which Lenin defined it more than eighty years ago. It is not only the Marxists who have advanced the right to self-determination, but the national bourgeoisie in the backward countries and the imperialists themselves. From the end of World War I on, this "right" has been invoked by one or another imperialist power to justify schemes aimed at the partition of existing territories. Invoking the "right to self-determination" today is universally understood as the

advocacy of national separation and the creation of a new state. The "negative" sense given to this right by Lenin and the Bolsheviks, who opposed bourgeois separatism, has been obscured by the widespread utilization of this slogan by imperialism, the bourgeois nationalists and their advocates within the middle class left. As we shall see, Spartacist itself equates this "right" with support for national separatism. IV. Where Spartacist champions self-determination The Workers Vanguard articles denounced the International Committee specifically for failing to invoke this right in four separate areas: Bosnia, the Indian states of Kashmir and Punjab, Quebec and Sri Lanka. Let us consider the content of this demand in each of these concrete cases. What are the consequences of proclaiming the right of "self-determination" in Bosnia? That should by now be abundantly clear. Such a demand serves not to win the confidence of the working class in a socialist perspective, but only legitimizes the bloody activities of the rival ethnic nationalist leaderships. Spartacist fails to make clear to whose self-determination it is precisely referring. Is it Bosnia as a whole, or the Moslems, Croats and Serbs who live in this territory? And, if one takes the Marxist conception of the right to self-determination seriously, i.e. the right to establish an independent state, how is this to be realized in Bosnia? History has already provided the answer. The formation of separate independent states based on ethnic or religious identity in the former Yugoslavia can be achieved only through the extermination or expulsion of entire populations. This was why the Marxist movement, beginning in the late 19th century, developed the demand for a socialist federation of the Balkans as a means not of carving out new territories, but rather, overcoming the national divisions which mired the region in backwardness and violence. Together with the rest of the middle class left, Spartacist rejects such a socialist and working class solution to the crisis in the region. Spartacist goes on to state that the SEP is "against the right of self-determination for Kashmir, the Punjab and other nations locked into the prison house of peoples that is the Indian bourgeois state." This use of the term "prison house of nations" in regard to India is dubious to say the least. The phrase is appropriated from an earlier epoch when it was used to describe the old Tsarist empire in which conquered nationalities were repressed and denied basic rights. India, however, emerged as the abortive outcome of the national struggle. There was in fact no Indian nationality, language or ethnic identity. The struggle for independence from Britain involved the progressive goal of uniting the vast territory and its inhabitants, breaking down their division into some 500 princely

states. This task, however, could not be completed under the leadership of the national bourgeoisie and its political instrument the Indian Congress. The result was India's partition along religious lines, with the creation of Muslim Pakistan and the vast pogroms and expulsions that accompanied it. Marxists indicted the Indian Congress not for having failed to create scores of separate ethnically-based nation states, but rather for its inability to carry through the struggle against colonialism and effect a genuinely democratic unification. Fifty years after independence, the whole nationalist project in India is in an advanced state of disintegration. The Congress Party and every section of the Indian bourgeoisie has renounced the old national development programs in favor of integration into the world market. Barriers to foreign capital are being thrown down and industries denationalized. The result is growing social inequality and regional economic disparities. These are the driving forces both of the new national separatist movements that have broken out throughout the subcontinent as well as the growth of Hindu chauvinism expressed in the rise of the BJP movement. In both Kashmir and the Punjab, the national separatist movements are based upon religion. In Punjab the national separatists demand the creation of Khalistan, a state which would exclude the large non-Sikh population that inhabits the region. In Kashmir it is the demand for Moslem rule. Kashmiri nationalism is closely bound up with the continuing conflict between India and Pakistan. Pakistani military intelligence exercises a considerable control over the most active of the armed groups in the area which call for a jihad, or holy war, aimed at joining Kashmir with Pakistan. As with all of these movements, the Kashmiri separatist agitation has won popular support by diverting social unrest and demands along religious and ethnochauvinist lines. The rise of Kashmiri separatism was fueled by the growth of an educated middle class in the region, with no corresponding growth in employment. The result has been an increasingly intense competition for posts in government, education, etc. The demand that these positions should go to the majority Moslem population has been coupled with anti-Pandit (Hindu) agitation resulting in the expulsion of nearly a quarter million Hindus from the region. The cycle of armed guerrilla actions and government repression has subjected wide layers of the population to state violence, further fueling separatist sentiments. Even in Lenin's day, the Marxist movement drew a sharp distinction between what it saw as legitimate nationalist movements and those which based themselves on religion. The Communist International specifically opposed the Pan-Islamic movements of the day as reactionary and warned against imperialism's fomenting of conflicts between "national-religious sects." For Spartacist and other petty-

bourgeois ex-radicals, this distinction no longer applies. By endorsing Kashmiri and Punjabi self-determination, it is endowing a national-religious conflict with a supposedly democratic and revolutionary content. The central question here is, how does the revolutionary party of the working class respond to the breakup of the old bourgeois nationalist movements? Are the masses in these countries to advance their interests through new separatist movements based on fragments of the states created through decolonization and founded on religious particularism? We categorically reject such a perspective. Such statelets will provide no way forward for the working class and the oppressed masses in India or anywhere else. At best they will create profits for a thin layer of the privileged classes if they are able to create a free enterprise zone and cut their own deals with transnational capital. For the masses they hold out the prospect only of ethnic bloodbaths and intensified exploitation. V. Promoting Quebois nationalism The next area where the SEP is condemned for failing to uphold the right of selfdetermination is Quebec. Here we are dealing with one of the advanced capitalist countries, where, as Lenin said even in 1913, the bourgeois national movements, and therefore the applicability of the right of self-determination, had come to an end "long ago." Nonetheless, new national separatist movements have emerged not only in Quebec, but in other parts of the advanced capitalist world: Scotland, Belgium, and Italy for example. Spartacist, like the rest of the petty-bourgeois left, has adapted itself to this development. What is the objective content of these movements, irrespective of the particular political views of their leaderships? Are they bound up with a struggle against imperialism, and do they embody the democratic aspirations of the masses to free themselves from oppression? The case of Quebec is representative. Quebec separatism arises out of the conflicting interests of different sections of the bourgeoisie under conditions of the continuing regional fracturing of Canada. Economic relations between separate Canadian regions and foreign markets, particularly the US, are today greater than between the regions themselves. Sections of the Quebec bourgeoisie see a more advantageous relation with US capitalism through separation. The demands of global economy come into sharp conflict with the outmoded nation-state form of Canada. The issue posed is whether this conflict will be resolved from above, through the bourgeoisie's fomenting of Anglo chauvinism on the one hand and Quebec separatism on the other, or from below by the united

struggle of the North American working class to put an end to capitalism? The Quebec nationalists are in no way opposed to imperialism. On the contrary, they have repeatedly offered guarantees that a separate Quebec would remain Washington's faithful junior partner in both the NATO and NAFTA treaties. In short, Quebec exercising its "self-determination" would mean the creation of a third imperialist state on the North American continent founded on national exclusivism. As for the social question, the Parti Quebois (PQ), the political instrument of national separatism, is a party of big business which has spearheaded the assault of the entire Canadian bourgeoisie on the jobs, wages and social conditions of the working class. In the 1995 referendum called by the PQ provincial government on Quebec secession, the party promoted separation on an openly capitalist basis, arguing that national independence would create better conditions for driving down production costs, increasing profits and gaining greater access to markets. The demands of the Quebec nationalists are anti-democratic in character. They seek not equality of language rights, but rather the creation of a unilingual French Quebec. What Spartacist means by "self-determination" found its clearest expression in this referendum in which it called for a "yes" vote, supporting the PQ's project of creating an independent Quebec. It is worth noting that the last time that the PQ had called such a referendum, Spartacist, together with the bulk of the middle class left, called for a boycott on the grounds that a "yes" vote would represent an impermissible vote of political confidence in this capitalist party. At the time, Quebec nationalism and even the PQ itself had a far more "left" face than it presents today. But while the PQ has moved drastically to the right, the petty-bourgeois ex-radicals have gone even further and faster, joining a political bloc with the Quebois bourgeoisie. What is the effect of such a policy? Within the working class it is utilized as a means of diverting workers from a class response to capitalist exploitation. It presents conditions created by capital in every area of the globe as the supposed result of national oppression, in this case of the Quebois by English-speaking Canada. Workers are told that they have more in common with French-speaking capitalists than with English-speaking workers in the rest of North America. Support for national separatism plays the same essential role in other advanced capitalist countries such as Britain (i.e., Scottish and Welsh nationalism) and Belgium. Not accidentally, the Quebec union bureaucracy constitutes one of the principal props of Quebois nationalism, just as its counterparts in English-speaking Canada constitute a bulwark of Canadian nationalism. Both line up behind their respective sections of the Canadian bourgeoisie in a dispute over privileges and profits which has nothing to do with the needs of working people. And Spartacist, which is

oriented to this bureaucracy and shares its opposition to any independent movement of the working class, lines up right behind them. VI. Sri Lanka and the Tamil question Finally, there is the question of Sri Lanka and the development of the Tamil national separatist movement under the leadership of the Liberation Tigers of Tamil Eelam (LTTE). Here the evolution of the national question is intimately bound up with the historical development of the Trotskyist movement itself. Today the Sri Lankan section of the International Committee of the Fourth International, the Socialist Equality Party of Sri Lanka, has the task of uniting the working class, both of the Tamil minority and the Sinhalese majority, in a common struggle for socialism. It is the only party in Sri Lanka which from its origins has waged an intransigent defense of the Tamil minority against national oppression and the racist war waged by the Sinhala bourgeoisie. The demand for an independent Tamil nation did not arise from some eternal desire of the Tamil people for separation and self-determination. It is the product of the imperialist settlement which granted formal independence to Sri Lanka and, most decisively, the adaptation of the leadership of the working class to that settlement. In the years immediately following independence, the fight against anti-Tamil discrimination was associated directly with the struggles of the working class and its leadership, the then-Trotskyist Lanka Sama Samaja Party (LSSP). The LSSP posed a proletarian internationalist and socialist alternative to the ethnic chauvinism whipped up by the Sinhala bourgeoisie in an attempt to solidify its position and divert the Sinhalese workers and oppressed. The nationalist degeneration of the LSSP fundamentally altered this relation between the Tamil question and the workers' movement. The LSSP adapted itself to the nationalist project of the Sinhala bourgeoisie and consequently to Sinhala chauvinism. This turn was consummated in the LSSP's entry into the bourgeois coalition government of 1964 and its support for a chauvinist constitution in 1972. Tamil national separatism and ultimately the armed struggle of the LTTE were the result. It was a movement of the Tamil petty bourgeoisie based on discouragement in the prospect of a united struggle of the workers and oppressed of Sri Lanka providing a solution to the problems of ethnic and language discrimination. The character of the Tamil separatist movement led by the LTTE has emerged clearly over the past decade. It is not a movement directed against imperialism, but rather -- as both its support for the Indian intervention in 1987 and its more recent appeals to the Clinton administration demonstrate -- it seeks imperialist intervention in order to further its own particularist demands. It is not a movement which embodies democratic goals, but is rather ethnic

exclusivist in its outlook, waging war on the Sinhalese and Moslem oppressed for the purpose of creating an ethnically homogeneous territory in the North and East of the island. Its terrorist actions in the South have been directed against the Sinhala working class, most notoriously in the 1996 bomb attack on the Central Bank building in Colombo. At the same time it uses armed violence and assassination to suppress any political opposition among the Tamils. To advance the slogan of "self-determination for the Tamil people" in Sri Lanka today has, from a practical political standpoint, only one meaning. It is to support the national separatist project of the LTTE and to tell the Tamil workers and oppressed that the creation of a state by this movement will somehow create more favorable conditions for the masses and for the development of the struggle for socialism in Sri Lanka. The International Committee and its Sri Lankan section categorically reject this perspective. It warns the Tamil people that the establishment of a Tamil Eelam state will not solve any of their problems. Any regime formed by the LTTE will be completely subordinate to imperialism and will impose dictatorial and exploitative conditions which are as bad, or worse, than what presently exists under the Sinhalese bourgeoisie. The realization of the LTTE's aims would represent not "independence" or "liberation" for the masses, but rather the carving out of a new free trade zone in the North to enrich transnational capital and a thin layer of the Tamil bourgeoisie. The Sri Lankan Socialist Equality Party maintains a standpoint of unconditional defeatism in relation to the war of the Sinhalese state against the Tamils. It has stood alone in opposing all use of military violence to maintain the authority of this regime in the North and East. The Sri Lankan Trotskyists, however, reject the attempt by middle class leftists to subordinate this struggle to support for the national separatist project of the LTTE. Instead it fights to unite the Sinhalese and Tamil workers and oppressed on a socialist and internationalist program. In opposition to both the Sri Lankan state and to the perspective of establishing a Tamil capitalist statelet in the North and East, it fights for a Socialist Republic of Sri Lanka and Tamil Eelam. The fundamental issue which arises in regard to the national question is this: on what basis will the great questions facing mankind -- oppression, social inequality, the threat of war -- be resolved? More than 80 years ago Trotsky warned that none of these problems could be solved within the national framework, or on the basis of carving out new national states. The First World War already demonstrated that the productive forces themselves were in irreconcilable conflict with that framework. How much more true is this warning today, with the advent of globally-coordinated production and the export of productive capital all over the world? Spartacist asserts that "Trotsky and the Fourth International he founded regarded

the struggle for national independence in backward countries as an integral and important component of the world socialist revolution. The Northites now maintain that in the supposedly new era of 'globalized' capitalist production, national independence has become impossible and, indeed, reactionary..."5 Trotsky was never, as Spartacist portrays him, an unwavering enthusiast of pettybourgeois national movements, nor an unconditional defender of national sovereignty. He rejected any fetishistic attitude toward national struggles, and insisted that "national independence" was a political chimera in the imperialist epoch. In the 1934 manifesto War and the Fourth International, he wrote: "It must be clearly understood beforehand that the belated revolutions in Asia and Africa are incapable of opening up a new epoch of renaissance for the national state. The liberation of the colonies will merely be a gigantic episode in the world socialist revolution, just as the belated democratic overturn in Russia, which was also a semi-colonial country, was only the introduction to the socialist revolution... The national problem merges everywhere with the social. Only the conquest of power by the world proletariat can assure a real and lasting freedom of development for all the nations of our planet."6 And, in 1940, while declaring its support for the struggles of India, China and the other colonial countries for independence, the Fourth International warned that in these oppressed countries: "belated national states can no longer count upon an independent democratic development. Surrounded by decaying capitalism and enmeshed in the imperialist contradictions, the independence of a backward state inevitably will be semi-fictitious and the political regime, under the influence of internal class contradictions and external pressure, will unavoidably fall into dictatorship against the people."7 In another statement Trotsky again stressed that there was no possibility for an end to imperialist domination outside of the world socialist revolution: "The hopes of liberation of the colonial peoples are therefore bound up even more decisively than before with the emancipation of the workers of the whole world. The colonies shall be freed politically, economically and culturally, only when the workers of the advanced countries put an end to capitalist rule and set out together with the backward peoples to reorganize world economy on a new level, gearing it to social needs and not monopoly profits."8 VII. The Mexican crisis: Marxism vs. petty-bourgeois nationalism The Spartacists directly oppose this perspective. Much of their attack on the Socialist Equality Party centers on the 1994-1995 crisis in Mexico and the refusal of the SEP to subordinate itself to petty-bourgeois nationalism in general and the Zapatista rebellion, led by Subcomandante Marcos, in particular. Thus, it attacks a statement published in The International Workers Bulletin which

declared: "The events in Mexico demonstrate once again that the only way forward for the working class in the oppressed countries is to unite with their class brothers and sisters in the imperialist centers in a common struggle for the overthrow of capitalist exploitation and the establishment of socialism."9 In reply Spartacist writes: "But what do the Northites tell the Mexican workers to do until the mass of workers in the US move to overthrow the capitalist system? The answer is effectively nothing. By counterposing an abstract conception of socialist internationalism to the actual struggles of the workers, rural toilers and oppressed peoples, the Northite tendency inexorably puts forward a defeatist line toward these struggles..."10 This line of argumentation is the hallmark of the middle class ex-radical opportunists. The working class is not immediately engaged in revolutionary struggle and therefore the perspective of socialist internationalism is "abstract" and unrealizable. A more "concrete" solution must be found in the "actual struggles" of other class forces. Of course, revolutionary struggles will unfold within different countries at different tempos and the revolutionary party must respond to them with concrete policies and programs. There is every potential for a socialist revolution developing in Mexico before it does in the US, though the reverse is also possible.The decisive question is how these developments are understood and on what basis the revolutionary party's response is elaborated. The class struggle in any country can only be understood to the extent that it is seen within an international context and approached on the basis of an international strategy, founded on the building of the world party of the working class. Spartacist begins exclusively from the confines of the national state framework, and consequently its political line invariably lines up with the class interests of the petty-bourgeoisie and the bourgeoisie. In the case of Mexico, the more "concrete" force discovered by Spartacist was the Zapatista Army of National Liberation (EZLN). That a petty-bourgeois nationalist tendency like Spartacist should line up with the Zapatistas is only natural. Workers Vanguard writes breathlessly about the events in Chiapas in 1994: "This unexpected leftist-led revolt gripped the world's attention. But not the Northites."11 The article makes no class characterization of this movement, nor does it review the record of similar movements throughout Latin America. The Latin American workers movement has gone through four decades of experience with guerrillaism. It has paid a terrible price for the perspective that the heroic actions of small groups of armed men, mobilizing sections of the peasantry behind them, can substitute for the conscious socialist struggle of the

working class. Whether it is Comandante Che or Subcomandante Marcos, the bankruptcy of guerrillaism has been well established. Scores of these guerrilla movements cropped up in Central and South America following the Cuban revolution. Regardless of the individual courage of those who join the guerrillas, these organizations do not express the revolutionary socialist struggle of the working class. On the contrary, they are founded on the explicit rejection of a proletarian perspective. The middle class left's enduring infatuation with this type of movement has a definite class basis. What they see in this form of struggle is the possibility of the petty-bourgeoisie dominating the working class and playing a seemingly independent role. The guerrillaist perspective denies the necessity of turning to the working class and waging the difficult and protracted struggle for the development of socialist consciousness against the existing bureaucracies. Rather, it maintains that petty bourgeois guerrillas can revolutionize society through their own spontaneous activity. The appeal of such an outlook to the former student radicals and middle class protesters in an organization like Spartacist is undeniable. Thousands of Latin American workers, youth and peasants lost their lives in suicidal adventures organized by these movements. Their principal political effect has been to divert any struggle to resolve the crisis of revolutionary leadership in the working class and thereby bolster the grip of the Stalinists and other bureaucratic leaderships that tied the workers movement to the state. Guerrillaism thereby played a key role in paving the way for the right-wing military dictatorships which dominated the continent for decades. In the more recent period, one after another of these movements has made its accommodation with imperialism. In Venezuela, the former leader of the guerrillas became the minister in charge of implementing IMF austerity policies. In Colombia, the M-19 group gave up the armed struggle in a settlement which provided its leaders with political posts and its members with small business loans. Others have continued an armed struggle driven neither by political program nor ideology, but financial motives, becoming bodyguards for drug traffickers and raising cash through kidnappings and extortion. In Central America all of the guerrilla organizations -- the Nicaraguan Sandinistas, El Salvador's FMLN and the URNG of Guatemala -- accepted settlements which abandoned the demands of the masses, protected the military and police assassins and provided parliamentary seats for the guerrilla leadership. A careful examination of the politics of such organizations always reveals, behind the scenes, the hand of one or another section of the national bourgeoisie, or even this or that imperialist power. Subcomandante Marcos bases himself not on the independent power of the working class, but on a section of the exploited peasantry. But even more significant is his ability to leverage his support among

sections of the bourgeoisie, both within Mexico and internationally. "Dialogue" between the EZLN and the Mexican state became institutionalized through the formation of definite state institutions. The vague demands of Marcos for democratization, decentralization and an end to corruption were embraced by the petty-bourgeois left, sections of the ruling PRI, and even the right-wing opposition party, the PAN. The "leftist-led revolt" in Chiapas, rather than providing a way forward for Mexico's workers and oppressed, became yet another instrument for settling accounts within the Mexican ruling class. A similar tendency was expressed in the seizure of the Japanese embassy in Lima by the MRTA guerrillas, an action which also elicited the enthusiastic praise of Spartacist. This action was not aimed at striking a revolutionary blow against capitalism in Peru, but rather at pressuring Japanese imperialism to use its influence with the Fujimori regime in order to soften its policies. It ended in an inevitable debacle. There has been far too much experience with guerrillaism, far too many defeats and betrayals organized on this basis, for the Marxist movement to take an indulgent attitude toward such organizations. The Trotskyist movement is not at all loath to tell the harsh truth about these types of petty-bourgeois movements. The answer to the problems of the Mexican people will not be found through armed struggles organized on the basis of the peasantry, but rather through the construction of an independent political movement of the working class. Mexico's entire history, including the original Zapatista rebellion of 1912-14, clearly demonstrates this. The movements led by Emiliano Zapata and Pancho Villa embraced masses of armed peasants. While they were able to conquer Mexico City, based as they were upon the parochial concerns of the peasantry, Zapata in the South and Villa in the North, they were incapable of providing an alternative to the existing state. In the end the revolution was suppressed and power consolidated in the hands of the national bourgeoisie. In terms of its political program and perspectives, Subcomandante Marcos' movement offers nothing new. Its evolution has only demonstrated once again, albeit on a far smaller scale, the inability of the petty bourgeoisie and the peasantry to play an independent revolutionary role. The task before the Mexican working class is the establishment of an independent political party capable of rallying the oppressed rural masses behind it in a socialist revolution. This party must be formed in alliance with and as part of the class movement of the North American and the entire Latin American working class. This requires the building of a section of the International Committee in Mexico. VIII. The perspective of permanent revolution

Spartacist writes: "In a sense, North & Co. have recreated and adopted the Stalinist caricature of Trotskyism, that international socialist revolution means simultaneous revolutions in all major capitalist countries, both advanced and backward." (emphasis in original).12 A simpler explanation is that Spartacist, in its defense of nationalism, has resurrected the same crude ideological methods employed by Stalinism in attacking Trotskyism and in particular the theory of permanent revolution. Trotsky developed this conception based on a profound analysis of capitalism's development in Russia and, above all, its relation with the world economy and the world class struggle. Inherent in the theory of permanent revolution was a dialectical understanding of the combined and uneven development of capitalism. Russia, the most backward of the capitalist countries had, because of its relation to the world market and the penetration of foreign capital, brought into itself the most advanced forms of production and all of the social contradictions of modern capitalism. Trotsky insisted that only the working class, leading the great mass of peasants and acting as the emancipator of this class, could carry out the tasks of the bourgeois revolution. Once victorious, the working class would have to establish its own dictatorship and embark on socialist measures which challenged the very foundations of bourgeois property. Against those who dismissed this prognosis on the grounds that such a socialist revolution was impossible within the framework of Russia's backwardness, Trotsky countered that taking isolated Russia as the framework was itself a fundamental error. The shape and fate of the Russian revolution would be determined above all by world conditions and the international class struggle. A victorious revolution in Russia, he predicted, would send shock waves throughout the world provoking revolutionary struggles by the working class in the advanced capitalist countries. While Russia's backwardness precluded the establishment of socialism within the confines of its isolated national economy, the objective conditions had emerged on a world scale for the liquidation of capitalism as a global system. The survival of the Russian revolution would depend upon its being answered by victorious proletarian revolutions beyond its borders. Only the socialist revolution in the West could ultimately protect Russia from the threat of capitalist restoration and provide the means for the realization of socialism. The power of Trotsky's perspective stemmed precisely from its international axis. It started not from the peculiarities of Russia. Rather it comprehended the coming Russian revolution as an original combination of the conditions and features of

capitalism as a world system. The organic incapacity of the Russian bourgeoisie to carry out its own revolution, to secure democracy, agrarian reform and economic development within Russia, was itself a particular expression of a more general phenomenon which remains the fundamental contradiction underlying the crisis of world capitalism today. The forces of production developed by capitalism had, even by the beginning of this century, outgrown the limits of the nation state. The national-state form had already become an intolerable impediment to economic development. Under these conditions it was impossible to resolve the historic problems of Russia, or indeed any area of the globe, on a national basis. Spartacist's explanation of permanent revolution begins from an entirely different standpoint. It presents this world revolutionary conception merely as a theory, developed by Trotsky in relation to Tsarist Russia and later applied to the "Third World," that revolutions could occur in the backward countries before they developed in the advanced ones. The conclusions which follow from this nationalist distortion of permanent revolution emerge quite clearly in what Spartacist writes about Mexico. Recalling Lenin's statement that Russia constituted the "weak link" in the imperialist chain, the Workers Vanguard article states that Mexico constitutes such a weak link in the present imperialist order. But while Lenin used this formulation to indicate that the Russian Revolution would be only the beginning of the world socialist revolution, Spartacist advances a very different prognosis: "A popular upheaval in Mexico, toppling the neocolonial PRI regime, would have a powerful radicalizing effect on the millions of Hispanic workers in the US, many of whom retain strong family ties to Mexico or Central America."13 They foresee not a socialist revolution by the Mexican working class, but rather a "popular upheaval" which would put an end to "the neocolonial PRI regime." The choice of words is not accidental. Lenin and Trotsky correctly predicted that a victorious revolution in Russia would spark revolutionary struggles by the international working class. Spartacist has a very different prediction as to the impact of a similar event in Mexico. It foresees not an international movement of the working class, but rather a radicalization of Hispanic workers in the US alone, by virtue of their "strong family ties" to the region. In other words, it welcomes the prospect that such a revolution would merely strengthen nationalist sentiment among this layer. Nation, race, ethnicity, these for Spartacist are the "concrete" determinants of political life. Internationalism and the independent struggle of the world working class are nothing more than abstractions.

Part Seven I. Spartacist and Stalinism The Workers Vanguard series contains a retrospective glorification of the Kremlin bureaucracy. The same nationalist outlook which characterizes all of Spartacist's conceptions underlies this organization's long-standing attraction to Stalinism. Following the collapse of the middle class protest movement of the 1960s and 70s, the Spartacist League turned sharply toward the Stalinist bureaucracy, promoting its supposed revolutionary potential and apologizing for its crimes. In 1979 Workers Vanguard praised the Soviet invasion of Afghanistan under the headline "Hail Red Army." With the confrontation between the Solidarity independent union movement and the Jaruzelski dictatorship in Poland it called for Moscow's military intervention, pledging in advance to defend whatever atrocities the Stalinists might commit against the Polish workers. And, in 1984, it marked the death of the former KGB and Soviet party chief Yuri Andropov with a black-bordered death notice on its front page. The collapse of the Stalinist regimes has by no means dampened Spartacist's adulation of Stalinism. In its attempt to deny the significance of the globalization of capitalist production, Spartacist maintains that the vast changes that have taken place in class relations on a world scale have their source, not in these economic processes, but rather, in the collapse of the Soviet Union. It declares enthusiastically that the Moscow bureaucracy developed "the secondstrongest state in the world" and functioned as a "counterweight" to the "global hegemony of American imperialism." The disappearance of this counterweight, Workers Vanguard argues, paved the way for the "triumph of capitalist 'globalization'", which Spartacist understands as merely an increase in capitalist investment in the former colonial countries. According to its thesis, the absence of Soviet support left the bourgeois nationalist regimes defenseless in the face of "the devastating power of the Pentagon war machine" and they therefore surrendered to the penetration of foreign capital. This changed relationship was supposedly signaled by the 1991 Persian Gulf War. As we have already seen, Spartacist's elevation of the role of armed force to the principal motor of history is a hallmark of its petty-bourgeois politics. In this case, to advance the Gulf War and the Soviet Union's dissolution as the catalysts for the changes in economic policy by the former colonial countries is patently absurd. In reality these changes were well under way during the period in which Workers Vanguard was hailing the Moscow bureaucracy's reactionary adventure in Afghanistan and clamoring for the massacre of Polish workers. The foreign debt crisis combined with the collapse in commodity prices beginning

in the early 1980s reconfirmed the overwhelming dominance of the world market over the backward economies of the former colonial countries. One regime after another abandoned national development schemes in order to comply with IMF and World Bank structural adjustment programs. It was not fear of US cruise missiles which motivated the economic changes introduced by the national bourgeoisie in these countries. Rather, the global integration of capitalist production had rendered the old nationalist policies unfeasible and an attempt to sustain them would have threatened the power and privileges of the national bourgeoisie itself. When the International Committee explained in 1992 that the Soviet Union had been liquidated and could no longer be considered even a "degenerated workers state" the Spartacists denounced this as a "betrayal". Now they have been forced to adapt themselves to the logic of the facts and refer to the "destruction of the Soviet bureaucratically degenerated workers' state" without ever explaining how this came about. While Spartacist makes the liquidation of the USSR the source of all of the changes in world economic and social relations, it offers no materialist explanation for this world historic event. The Workers Vanguard articles explicitly reject any attempt to trace the crisis of Stalinism to underlying economic and social contradictions. Instead, they insist, the Soviet Union's collapse is to be blamed on Gorbachev and... the Trotskyist parties of the International Committee of the Fourth International. The former for having organized "the retreat of Soviet global power" and the latter for "having done all within their power to promote counterrevolution in the Soviet Union and East Europe." Having placed the ICFI at the center of a conspiracy to bring down the USSR, Spartacist denounces it for having the gall to suggest that the restoration of capitalism there was "objectively determined." They quote a passage from the 1993 perspectives document of the Workers League, The Globalization of Capitalist Production and the International Tasks of the Working Class, which states the following: "The collapse of the Soviet Union was only the first major political convulsion produced by the transformation of the forms of production. The qualitative advances in the integration of world economy dealt the final blow to the autarchic national policies of the Stalinist regime." II. The USSR's dissolution and the crisis of capitalism In other words, the Soviet state, because of its prolonged economic isolation, was the first victim of global economic processes which had intensified the contradiction between the world economy and the nation-state system. These same processes, however, are preparing immense crises and revolutionary eruptions within the capitalist countries themselves. This was the essential

perspective developed by the International Committee. Spartacist's demoralized response to the Soviet Union's liquidation excluded any connection between it and a wider global crisis. Behind its radical rhetoric, it adapted itself to the "death of socialism" propaganda developed by the bourgeoisie. Workers Vanguard asserts that by pointing to the objective source of Stalinism's crisis, the International Committee had "effectively repudiated the program of proletarian political revolution against the Stalinist bureaucracy as even a historical possibility in this supposedly new era of 'globalized' capitalist production." They go on to assert that, for the IC, "the Soviet working class simply did not exist as a potential force in deciding the fate of the Soviet Union."1 This assertion is refuted by the documented record, which makes clear that the International Committee fought to arouse the Soviet and international working class to the dangers it confronted. Indeed, as Gorbachev was being lauded by the petty-bourgeois radicals around the world, and his program of glasnost and perestroika was being hailed as the political revolution, the International Committee alone warned that the bureaucracy's program was aimed at the restoration of capitalism. In the event, the working class was not able to overthrow the bureaucracy before the Stalinist regime carried through the restoration of capitalist relations and began to integrate itself within the structure of the world capitalist economy as a type of comprador bourgeoisie, organizing the plunder of the resources of the former Soviet economy. No amount of denunciations of the International Committee by the Spartacists can cover up the basic question, which the Spartacists dare not address: what were the objective causes for the collapse of the Soviet Union? In equating the attempt to uncover these causes with a renunciation of the perspective of political revolution against Stalinism, Spartacist only reveals the logic of its own position. Certainly the assessment that the crisis of the Soviet Union was bound up with international economic processes did not represent a recent theoretical innovation for Trotskyism. More than 70 years ago, Trotsky spelled out the profound contradiction between the global character of the productive forces built up under capitalism and the restricted national character of socialist construction in the USSR. It was this understanding which underlay his attack on the Stalinist theory of "socialism in one country." Both Lenin and Trotsky wrote repeatedly that the degeneration and destruction of the October Revolution were not only "objectively determined" but inevitable, in so far as the USSR remained isolated and encircled by a hostile capitalist world. They insisted, as opposed to the anti-Marxist conception of "socialism in one

country", that the Soviet Union could obtain the resources necessary to overcome the backwardness inherited from Tsarism and construct a socialist society only through the extention of the socialist revolution internationally. The contradiction between the world economy and the nationally-isolated workers' state could be resolved in only one of two ways: either on a socialist basis, through the working class taking power in the rest of the capitalist countries and establishing a world socialist republic; or by the bureaucracy restoring private property and reintegrating the USSR into the structure of world capitalism. The political revolution within the USSR was conceived within this international context. The International Committee, basing itself on the whole theoretical heritage of Trotsky, has explained that the liquidation of the USSR was rooted in the transformation in the forms of production, which rendered the nationalist methods of the Stalinist bureaucracy unviable. Trotsky had explained that, in the short term, military intervention by the imperialist powers posed an immediate danger to the Soviet Union. But in the longer term, the greatest danger was that the productivity of labor in the advanced capitalist countries remained, and would continue to remain, far higher than that attained in the Soviet Union. As Trotsky put it, an even greater danger than military intervention was the cheap goods in the baggage trains. The bankruptcy of the Spartacists' subjectivist method, and its glorification of the military apparatus, is revealed when some basic questions are posed. How was it that the Soviet Union was able to defeat the 14-nation imperialist intervention in the aftermath of the revolution, and 20 years later roll back the Nazi invasion, yet, collapsed in the 1980s? Today, the economy of the former Soviet Union operates under the dictates of the IMF and the World Bank, without a single shot having being fired. What neither the imperialist armies nor the Nazis could accomplish -the plundering of the resources of Russia and the other former Soviet republics -is now being carried out through the operations of the capitalist financial system. The history of Vietnam, likewise, demonstrates that it is far easier to defeat the armies of the imperialist powers than break the grip of the international financial system. The Vietnamese workers and peasants were able to militarily defeat the interventions by French and then United States imperialism in a 10,000-day war. But Vietnam today is even more firmly in the grip of international finance capital than it was in the days when it was occupied by the US armed forces. III. National state socialism In rejecting an objective source of Stalinism's crisis, the Spartacists are affirming their essential agreement with the Stalinist conception of socialism in one country. What they saw in Stalinism was the possibility of national-state socialism, a conception that has a definite appeal to the petty bourgeois radical. From Beatrice

and Sydney Webb in the 1930s, to James Robertson in the 1980s, this sociopolitical layer saw in the Stalinist bureaucracy a "strong state" which would play a mediating role between the excesses of capitalism and the danger of revolution. Spartacist's use of the phrase "political revolution" has nothing to do with the perspective elaborated by Trotsky. Rather than the independent mobilization of the Soviet workers to overthrow the bureaucratic dictatorship as part of the world socialist revolution, Spartacist adhered to the perspective of "socialism" imposed by the rifle and the tank. It looked to sections of the bureaucracy itself to prevent capitalist restoration. It directed its appeal not to the working class, but rather to the hard-line Stalinist factions and the repressive forces, urging them to undertake a renewed crackdown. Spartacist describes the Soviet Union as having been "the second strongest state in the world," as if this should be a source of great pride to Marxists, who, on the contrary, associate the realization of socialism not with powerful states, but rather with the progressive dismantling of the state itself. The Spartacists never explain that the main function of that powerful state was to repress the working class and exterminate its revolutionary leadership. It acted to insulate the workers within Russia from the international working class, to hermetically seal the borders of the USSR against the impact of cheap western commodities. Far from liberating the masses within its borders from the pressure of imperialism, the state within the Soviet Union and the semi-sealed character of those borders were the direct expression of the influence exerted by imperialism over the USSR. The growth of this state corresponded to the ever greater differentiation between the interests of the privileged bureaucracy that administered it and the Soviet working masses. At the same time, the more Soviet industry developed, due to the advantages of planning and the nationalized economy, the more it required the most advanced techniques and the more dependent it became on world trade. Where does the real blame for the collapse of the Soviet Union lie, in the view of Spartacist? In predicting the fate of the USSR, Trotsky gave a prognosis of an alternative character. He wrote prophetically that the issue would be decided according to whether or not the working class proved able to overthrow the bureaucracy before the bureaucracy devoured the workers state. As it happened, the bureaucracy was able to devour the workers state. The leading sections of the bureaucracy proceeded to restore private property and transform themselves into capitalist owners. But for Spartacist, this equation was reversed. It saw the working class as responsible for counterrevolution and looked to the bureaucracy to suppress it. The Workers Vanguard article states: "Widespread apathy and cynicism as well as, to a certain degree, illusions in Western-type bourgeois democracy among the

masses allowed the ascendancy of the counterrevolutionary forces centered around Boris Yeltsin in Russia and around anti-Soviet nationalists in the nonRussian republics." Spartacist continues: "...our tendency unambiguously and consistently called for unconditional military defense of the Soviet Union and the deformed workers states against imperialism and internal counterrevolution, as we do today in regard to the remaining deformed workers states -- Cuba, China, North Korea and Vietnam."2 This slogan of "unconditional military defense" was the brainchild of Spartacist. Trotsky and the Fourth International always saw the defense of the Soviet Union as a tactic, subordinate to and conditioned by the strategy of world socialist revolution, which encompassed as well the overthrow of the Kremlin bureaucracy. As was stated in the Manifesto of the Fourth International on the Imperialist War and the Proletarian World Revolution, drafted at the outbreak of the Second World War: "The Fourth International can defend the USSR only by methods of revolutionary class struggle."3 Spartacist's appeal for the use of "unconditional military" methods in defense of the Soviet Union and the other mentioned states was not directed to the working class, and this group certainly possessed no means of executing this tactic itself. Instead it amounted to an hysterical appeal to the Stalinist bureaucracy itself to pursue a more confrontational military stance abroad while using violent repression against its political opponents at home, principally the working class. IV. The Chinese "workers state" Spartacist today demands the defense, by "unconditional military" means, of the People's Republic of China. It asserts that this regime "...remains a bureaucratically deformed workers state," and therefore constitutes a great conquest of the working class. The International Committee categorically rejects this contention. The term "deformed workers state" was developed by the Trotskyist movement in the 1940s to define the new regimes that had been established by Stalinism in both China and Eastern Europe. It was used to describe states that were crippled from birth by the parasitic and totalitarian bureaucracy, and that would inevitably destroy the limited gains won by the working class unless it was overthrown. This highly conditional and somewhat makeshift definition was seized upon by organizations like Spartacist as some sort of stamp of approval. The emergence of these new state forms served to bolster their belief that socialism could be brought about without the mobilization of the working class in a conscious revolutionary struggle.

In the case of China, the Maoist regime was brought to power not by the working class, but by a peasant army, led by the Stalinist Communist Party, which took control of the cities and suppressed all independent organizations of the workers. For more than a quarter of a century the Stalinist regime has pursued an openly pro-imperialist policy on the world arena. From the late 1970s on, the Beijing regime has moved steadily to reintegrate China into the capitalist world market by throwing open the doors to foreign capitalist investment and privatizing stateowned industries. An article that appeared recently in Foreign Affairs gives a fairly graphic description of the state of the working class in this "bureaucratically deformed workers state." It cites a newspaper in Beijing, called Workers Daily, which reported on conditions in a capitalist joint venture called Zhao Zhi footwear in Guangdong province: "The company beats, abuses and humiliates workers at will. Everyday punishments include forcing workers to stand facing the wall or on a stool or outdoors in the sun. Contrary to law the employees are sometimes made to work all through the night to finish a rush order. They work under 24-hour watch of a hundred security guards." This is Spartacist's workers' state. The article reports that "some 17 million Chinese people work in coastal factories funded by foreign investors, largely from Taiwan, Hong Kong and South Korea. The workers, the great majority of them women from rural areas, make shoes, toys, garments and other products for export, all under sweatshop conditions. Low wages are not the worst of the workers' problems. The most repugnant abuse is physical punishment, including beatings inflicted by supervisors or private guards. Some carry electric batons. As a result even verbal threats are intimidating. In some cases the coercive regulations that management imposes on workers during and after working hours are unbelievably detailed: prohibitions on talking, even while eating; marked routes for walking within the factory-dormitory compound; bans on leaving the compound at any time without special permission; prohibitions against getting pregnant, married or even engaged. In one factory anyone using the toilet more than twice in a work day forfeits nearly a fifth of her monthly wages. There was a fire in November 1993 at a factory in Guangdong which killed 87 workers and injured more than 60. Once again, this tragedy was made even worse by the fact that escape was blocked by barred windows and locked doors." The article asks, "why does the Chinese government allow foreign companies to abuse its citizens so outrageously?" and they quote a Hong Kong executive who describes his discussions with the government. He said, "We told them this is toy biz. If you don't allow us to do things our way we will close down our Chinese factories and move to Thailand. Taiwanese businessmen there whom we recently interviewed talked about relocating to Vietnam where labor costs are even lower."4

Since Spartacist published its polemic against the International Committee, events have further exposed its claims that the Peoples Republic of China constitutes a "workers state" which must be defended "unconditionally." Less than two months after Workers Vanguard concluded its four-part attack on the International Committee, President Jiang Zemin announced that the ruling bureaucracy would carry out a massive privatization program, ending state ownership in all areas of the economy with the exception of strategic sectors like weapons production, chemicals and grain distribution. In the first half of 1997 alone, ten million workers lost their jobs at state-run enterprises. Mass demonstrations, strikes and clashes between security forces and workers protesting layoffs have become increasingly common in China. Meanwhile, the Beijing "workers state" has demonstrated its commitment to capitalism by intervening in the recent turmoil on the Asian financial markets, both to stabilize the Hong Kong stock exchange and to bail out the crisis-ridden economy overseen by the Indonesian military dictatorship.

Part Eight: I. Conclusion To fully comprehend Spartacist's defense of the nation state and its denial of the revolutionary implications of the globalization of production, one has to investigate the origins and development of this particular organization. In the evolution of political tendencies it sometimes takes decades for the logic of positions taken to ultimately work themselves out. In the case of the Spartacist League one is dealing with the finished form of a tendency that, from its inception, has been characterized by extreme subjectivism and American petty-bourgeois nationalism. The Spartacist League emerged out of the struggle that developed in the American Socialist Workers Party in the early 1960s over the planned reunification of the SWP with the International Secretariat of the Fourth International led by Michel Pablo and Ernest Mandel. In 1953, the SWP, under the leadership of James P. Cannon, issued an Open Letter to the World Trotskyist Movement calling for the removal of Pablo and his supporters from the leadership of the Fourth International. The subsequent split took place on the most basic issue of all: the role of the Fourth International. The essence of all the political positions of Pablo and Mandel was liquidation of the organized Trotskyist movement on the grounds that such was the crisis of imperialism that mass pressure would compel the Stalinist parties to "project a revolutionary orientation" and carry through the socialist overturn. In other words, there was no need for the Fourth International.

Notwithstanding the central role it had played in defending the Fourth International, the SWP was coming under the same pressures which gave rise to the Pabloite tendency. More than a decade of political isolation, the development of the post-war boom, and the spread of Cold War anti-communism had begun to produce the same liquidationist pressures inside the SWP. They manifested themselves in the form of adulation of Castro and Castroism and the declaration that Cuba was a workers' state. The struggle against the SWP leadership was led by the British Trotskyists of the Socialist Labour League who, in a series of documents and reports in the early 1960s, exposed the orientation of the SWP and deepened the struggle against the liquidationist outlook of Pabloism upon which it was based. Within the SWP a minority tendency arose that solidarized itself with the struggle led by the British SLL. But those within the leadership of the minority tendency who subsequently formed the Spartacist League, while claiming agreement with the perspectives of the SLL, refused to conduct their struggle inside the SWP as part of an international tendency. This led to a split within the minority between a genuinely internationalist tendency and the essentially nationalist Spartacist grouping. Despite their professed opposition to Pabloism, the Spartacist group did not vote against reunification with the Pablo-Mandel organization, but abstained. Thus, while they were prepared to subordinate themselves to the Pabloite leadership of the SWP, they would not function as part of international faction if that meant giving up what they considered to be their national prerogatives. By 1964, following the reunification in 1963, both tendencies, the Spartacists led by James Robertson and the American Committee for the Fourth International, led by Tim Wohlforth, had been expelled from the SWP. The ACFI had been expelled after demanding a discussion in the SWP on the entry of the LSSP, the Sri Lankan section of the Pabloite International, into the bourgeois government of Mrs. Bandaranaike in June 1964. With both opposition tendencies now outside the ranks of the SWP, the International Committee leadership sought to obtain a principled unification of the two groupings. It was on this basis that the Spartacist League sent a delegation, including its leader James Robertson, to the Third Congress of the International Committee held in London in April 1966. The central question before the congress was to make an assessment of the significance of the struggle against Pabloism. Robertson's contribution made it clear he had sharp differences with the line of the main report to the congress, but after making his presentation he refused to attend the subsequent discussion. The conference voted unanimously to demand his attendance and called on him to apologize to the conference for his failure to do so. Robertson refused to do so. He was then asked to leave the conference and was followed out by the rest of his

delegation. Contained in Robertson's final break from the International Committee was the nationalist outlook which had characterized the Spartacist organization from its origins. Robertson's refusal to recognize the authority of the Congress was not an accident -- the style was the man and the group -- but an expression of the politics of his organization. As his contribution to the Congress made clear, it was rooted in a deep-seated hostility to the programmatic foundations of the Fourth International and the struggle of the International Committee for the political independence of the working class. One of the key tasks of the Congress -- the first since the reunification of the SWP with the Pabloites -- was to make an assessment of the struggle against revisionism inside the Fourth International. Robertson addressed this question in his contribution. "Pabloism," he declared, "is a revisionist answer to new problems posed by the post-1943 Stalinist expansions. And Pabloism has been opposed within the movement by a bad 'orthodoxy' represented until the last few years by the example of Cannon... "The pressure which produced Pabloism began in 1943, following the failure of Leon Trotsky's perspective of the break-up of the Soviet bureaucracy and of new October revolutions in the aftermath of the war: this failure resulted from the inability to forge revolutionary parties. After 1950, Pabloism dominated the FI; only when the fruits of Pabloism were clear did a section of the FI pull back. In our opinion, the 'orthodox' movement has to still face up to the new theoretical problems which rendered it susceptible to Pabloism in 1943-50 and gave rise to a ragged partial split in 1952-54." The unmistakable implication of Robertson's thesis concerning the origins of Pabloism was that Trotsky, and the false perspective he advanced in the period prior to World War II, were to blame. Robertson was echoing the positions advanced by various skeptical tendencies which deserted the Fourth International after the war, arguing that Trotsky's "promises" of the collapse of the Stalinist bureaucracy and new October revolutions had failed to materialize. Trotsky had, of course, made no such promises. In fact, shortly before his death he had warned against just such a method. "Every historical prognosis is always conditional, and the more concrete the prognosis, the more conditional it is. A prognosis is not a promissory note which can be cashed in on a given date. Prognosis outlines only the definite trends of development." In some of his last writings Trotsky had sought to provide an historical assessment of the imperialist war and the struggle to resolve the crisis of proletarian

leadership: "The second imperialist war poses the unsolved task on a higher historical stage. It tests anew not only the stability of existing regimes but also the ability of the proletariat to replace them. The results of this test will undoubtedly have a decisive significance for our appraisal of the modern epoch as the epoch of proletarian revolution. If contrary to all probabilities the October Revolution fails during the course of the present war, or immediately thereafter, to find its continuation in any of the advanced countries; and if, on the contrary, the proletariat is thrown back everywhere and on all fronts -- then we should doubtless have to pose the question of revising our conception of the present epoch and its driving forces."1 The actual course of events turned out to be more complex than indicated by Trotsky's prognosis. The working class and oppressed masses moved forward in a series of revolutionary struggles, but due to the betrayals of the Stalinist leaderships -- whose political authority had been strengthened by the defeat of the fascist armies by the Soviet armies -- the overthrow of capitalism in the advanced countries of Western Europe was prevented. The proletariat did not achieve new October revolutions, but neither was it pushed back. In this complex situation the Stalinist bureaucracy not only managed to remain in the saddle but consolidated and extended its rule into Eastern Europe. The socialist revolution had not gone forward, but neither had the working class suffered a historical defeat. And contrary to all expectations, including its own, the bourgeoisie was able to set in place a series of political and economic arrangements that led to a new period of capitalist expansion. This complex and contradictory objective situation placed great pressures upon the Fourth International. These pressures found their political expression in the theories of Pablo and then Mandel, which began to attribute revolutionary capacities to the Stalinist bureaucracies. More than that, Pabloism sought to revise the entire Lenin-Trotsky theory of the party, which insisted upon the decisive role of conscious revolutionary leadership in the socialist transformation, and replace it with a perspective in which the overthrow of capitalism would be accomplished by the operation of objective processes working through whatever forces happened to dominate the working class. The Open Letter of 1953 drew the clearest division between Pabloism and the program of the Fourth International and insisted that "the lines of cleavage are so deep that no compromise is possible either politically or organizationally." It was this decisive struggle which Robertson, in what was to become the trademark of a series of opportunist tendencies eager to avoid the issues of principle, dismissed as the "ragged, partial split in 1952-54." The cynical attitude of all the middle class radical groups to the theoretical and

political struggles waged inside the revolutionary movement against opportunism was underscored by Robertson's assessment of the historical significance of the Fourth International itself. "We take issue with the notion," he declared, "that the present crisis of capitalism is so sharp and deep that Trotskyist revisionism is needed to tame the workers in a way comparable to the degeneration of the Second and Third Internationals. Such an erroneous estimation would have as its point of departure an enormous overestimation of our present significance, and would accordingly be disorienting." This was nothing less than a repudiation of the entire analysis which Trotsky had made of the significance of the founding of the Fourth International, and an embrace of the Pabloite perspective. Trotsky had insisted that outside of the cadres of the Fourth International, limited in number as they were, there was not a revolutionary tendency on the entire planet worthy of the name. The significance of the struggles waged inside the Fourth International lies in the fact that there is no other movement that represents the proletariat as a revolutionary class and in which the complex problems of freeing this class from the domination of the bureaucratic agencies of capitalism and realizing its historical task are consciously tackled. Robertson's comments, dismissing the crucial importance for imperialism of the development of opportunism in the Fourth International, were even more revealing given their immediate political context. Less than two years previously, in June 1964, the LSSP, hailed by Pablo and Mandel as the "largest Trotskyist party in the world," had entered the bourgeois coalition government of Mrs. Bandaranaike in order to head off a developing revolutionary situation. As the prime minister herself explained, the choice facing her regime was either to attempt to impose army rule on the working class or bring the workers' leaders into the government. There is no doubt that the LSSP's betrayal in Sri Lanka played a decisive role not only in rescuing the bourgeoisie in that country, but in stabilizing capitalist rule throughout the South-East Asian region and on the Indian subcontinent. The political crisis in Sri Lanka in 1964 expressed in the most concentrated manner the role of the Pabloite tendencies in the social and political convulsions that were to develop over the next decade. In France in 1968, the Pabloite organizations played a central role in blocking the development of a political struggle against the CP leadership which ensured the maintenance of the Gaullist regime and French capitalism. In the United States, the Socialist Workers Party, which had unified with the Pabloites in 1963, played the central role in ensuring that the upsurge of protest which developed over the civil rights movement and then against the Vietnam War did not turn in a revolutionary direction. The full story of the crimes of Pabloism in Latin America has yet to be written, but

it will reveal the role of the Pabloites in liquidating tens of thousands of youth into the dead end of guerrillaism in Chile, Argentina, Bolivia and elsewhere. Everywhere in the period of radicalization of the working class in 1968-75, the Pabloites played the key role in blocking the emergence of revolutionary tendencies from among the workers and youth looking for an alternative to the betrayals of social democracy and Stalinism. As the International Committee explained in its perspectives resolution published in 1988: "In the assistance it rendered to Stalinism, social democracy and bourgeois nationalism, the opportunism of the Pabloite centrists played a vital role in enabling imperialism to survive the crucial years between 1968 and 1975 when its world order was shaken by economic turmoil and an international upsurge of the working class and the oppressed masses in the backward countries. It verified Trotsky's assessment of centrism as a secondary agency of imperialism."2 The fundamental hostility of the Spartacists to the independence of the working class and the program of Marxism, through which the fight for that independence is waged by the revolutionary party, has never been more clearly defined than in Robertson's address to the 1966 IC Congress. While professing agreement with the main resolution, he criticized the leaders of the International Committee for their refusal to hail the petty-bourgeoisie and their leaderships as a revolutionary force capable of carrying out the socialist transformation. According to Robertson: "The Pabloites have been strengthened against us, in our opinion, by this simplistic reflex of the IC, which must deny the possibility of a social transformation led by the petty-bourgeoisie in order to defend the validity and necessity of the revolutionary Marxist movement." By the strengthening of the Pabloites Robertson meant that with the declamations that Cuba was a workers' state and Castro a "natural Marxist" they had been able to win a certain following among sections of the radical petty-bourgeoisie in the advanced capitalist countries. What he dismissed as a "simplistic reflex" on the part of the International Committee in fact embodies the historic struggle waged by Marxists to establish the political independence of the working class and realize its revolutionary role. To renounce this struggle is to renounce the whole of Marxism, for if the working class is not considered to be revolutionary then Marxism itself is nothing more than a "critique" of capitalism, along with others that have gone before it, in which the program of socialist revolution is replaced by a call for the establishment of a utopia. It was the discovery by Marx in the 1840s of the unique revolutionary role of the working class which marked the establishment of scientific socialism as opposed to the various forms of utopian socialism which had preceded it. Other social classes, the peasantry and the petty bourgeoisie in general, cannot play the same historical role as the working class, not because they are more or less oppressed by capital, but because they have a different relationship to the means of

production. Moreover, the working class is the revolutionary class not because it is exploited as such, but because it is the true creation of modern industry. The peasantry is the product of an earlier historical period, and is destined to be proletarianized with the advance of capitalist social relations. The petty-bourgeoisie as a whole cannot overturn capitalist property relations because its whole existence is bound up with their maintenance. What was at stake in the struggle against the SWP's position on Cuba was nothing less than the abandonment of Marxism and the liquidation of the revolutionary party. As the leadership of the SLL made clear in a document sent to the SWP in 1961, there was an inexorable logic to their stand on Cuba and the abandonment of the Marxist conception that "the emancipation of the working class is the task of the workers themselves." "If the petty-bourgeois leadership in Cuba has been forced by the objective logic of events to lead the proletariat to power (the SWP says Cuba is a 'workers' state,' which can only mean the dictatorship of the proletariat) then we must demand an analysis of the present world situation which shows how this type of event has become possible, so that the Leninist theory of the relations between class, party and power, must be discarded."3 The struggle of petty-bourgeois radicalism against Marxism, whether it is conducted under the banner of "combating sectarianism", the promotion of "flexibility" against "dogmatism," or the denunciation of vital theoretical principles as "simplistic reflexes", is aimed at the subordination of the working class to the existing leaderships and parties, and through them, to the bourgeoisie itself. The significance of the struggle waged by the International Committee against these tendencies -- the high point of which has been the fight against Pabloite opportunism -- can now be seen clearly. It has been the indispensable theoretical and political preparation for the revolutionary struggles which now confront the working class. The theories of opportunism rested on definite material foundations: the peculiar set of economic and social relations which characterized the post-war equilibrium of world capitalism. But now the foundations of that equilibrium -- and the political relations which arose upon it -- have literally been blasted away by the relentless expansionist drive of capitalism itself. This is the revolutionary significance of the development of globalized production. Petty-bourgeois radical tendencies like Spartacist, which grew under the post-war regime, now feel the ground being torn from under their feet. All their theories of the "progressive" role of Stalinism, the revolutionary capacities of Maoism, the dynamic of petty-bourgeois guerrillaism, and the possibilities of "revolutionizing"

the unions and their apparatuses lie in tatters. More than three decades have passed since the Spartacist tendency carried through an irrevocable break with the Trotskyist movement. Its evolution over the intervening years has been further and further along the lines of petty-bourgeois opportunism. As we have established, its politics are consistently characterized by nationalism and subjectivism. With the breakup of the post-World War II order and the deepening of the contradiction between world economy and the nationstate system, these tendencies are aligning this group ever closer with the politics of extreme right-wing forces. As the world they knew is blown apart -- a world in which the class struggle was suppressed by the domination of the labor bureaucracies -- the Spartacists furiously lash out at "globalization", denounce the International Committee, and frantically try to reassure themselves that despite everything, the old order remains. In vain. Their desperation is only the surest sign of the social and political convulsions ahead.

1 Preface to A Contribution to the Critique of Political Economy, Moscow, Progress, p. 21 back 2 Ibid, p. 21 back 3 The World Capitalist Crisis and the Tasks of the Fourth International, Detroit, Labor Publications, pp. 6-7 back

Part One
1 Workers Vanguard, February 7, 1997 back 2 Workers Vanguard, January 24, 1997 back 3 Workers Vanguard, February 21, 1997 back 4 International Monetary Fund Report, May 1997, pp. 112 -115 back 5 Marx, Grundrisse, Penguin, p. 159 back 6 Workers Vanguard, January 24, 1997 back 7 UNCTC World Investment Report, 1991 back 8 United Nations World Investment Report, 1992, p. 256 back 9 David North, Capital, Labor and the Nation-State,

Detroit, Labor Publications, p. 4 back 10 Workers Vanguard, January 24, 1997 back 11 Workers Vanguard, January 24, 1997 back 12 Workers Vanguard, January 24, 1997 back 13 Engels, "Decay of Feudalism and the Rise of National States" in The Peasant War in Germany, p. 178 back 14 Trotsky, The War and the International, p. vii back 15 Engels, Anti-Duhring, Moscow, Progress, p. 198 back 16 Workers Vanguard, February 21, 1997 back 17 Marx and Engels, Collected Works, Volume 6, Moscow, Progress, pp. 487-88 back 18 Workers Vanguard, February 21, 1997 p. 14 back 19 Marx, Capital, Volume I, "Results of the Immediate Process of Production," Penguin edition, p. 989 back 20 Hirst and Thompson, Globalization in Question, pp. 6-7 back 21 North, Capital, Labor and the Nation-State, p. 1 back 22 Workers Vanguard, February 21, 1997 back 23 Workers Vanguard, March 21, 1977 back 24 Trotsky, The Permanent Revolution, London, New Park, p. 22 back 25 Lenin, Collected Works, Moscow, Progess, Volume 22, p. 359 back

Part Two
1 Workers Vanguard, February 7, 1997 back 2 Marx and Engels, Selected Works, Volume 2, Moscow, Progress, pp. 73-74 back 3 Ibid, pp. 74-75 back 4 Ibid, p. 75 back 5 Workers Vanguard, January 24, 1997 back 6 Manuel Castells, The Rise of the Network Society, p. 239 back 7 Workers Vanguard, January 24, 1997 back 8 Trotsky, Whither France?, London, New Park, p. 53 back

9 Ibid, p.53 back 10 Ibid. back 11 The Death Agony of Capitalism and the Tasks of the Fourth International, London, New Park, pp.15-16 back 12 Workers Vanguard, January 24, 1997 back 13 Workers Vanguard, February 7, 1997 back 14 Workers Vanguard, February 7, 1997 back 15 Workers Vanguard, February 7, 1997 back 16 Workers Vanguard, February 7, 1997 back 17 Trotsky, The Third International After Lenin, London, New Park, p. 15, emphasis added back

Part Three
1 Workers Vanguard, February 21, 1997 back 2 Lenin, Collected Works, Volume 22, pp. 302-303 back 3 Marx, Capital, Volume III p. 427 back 4 Ibid, p. 429 back 5 Workers Vanguard, March 21, 1997 back 6 Lenin, Collected Works, Moscow, Progress, Volume 21 p. 301 back 7 Trotsky, The War and the International, p. vii back 8 See Lenin's Struggle for a Revolutionary International, John Riddell ed., p. 88 back 9 Kautsky, "Ultra Imperialism" in New Left Review, No. 59, January 1970 back 10 Cited in Lenin, The Collapse of the Second International, Collected Works, Volume 21, p. 223 back 11 Cited in Lenin, Collected Works, Volume 21, p. 224 back 12 Oppose Imperialist War and Colonialism, Detroit, Labor Publications, p. 4 back 13 Ibid, p. 11 back 14 Lenin, Collected Works, Volume 21, pp. 226-227 back 15 Lenin, Collected Works, Volume 22, p. 107

back 16 Ibid, p. 107 back 17 Lenin, Collected Works, Volume 22, p. 205 back

Part Four
1 Lenin, Collected Works, Volume 22, Moscow, Progress, p. 194 back 2 Workers Vanguard, January 24, 1997 back 3 Workers Vanguard, January 24, 1997 back 4 Cited in Marx and Engels on the Trade Unions, Kenneth Lapides, editor, New York, Praeger, p. 89 back 5 Ibid, p. 105 back 6 Luxemburg, Reform or Revolution, New York, Pathfinder, pp. 20-21 and 43 back 7 Workers Vanguard, January 24, 1997 back 8 Luxemburg, Reform or Revolution, New York, Pathfinder, p. 21 back 9 Cited in Marx and Engels on the Trade Unions, pp. 127-28 back 10 Ibid, p. 106 back 11 Ibid, p. 129 back 12 Ibid, p. 130 back 13 Ibid, p. 131 back 14 Ibid, p. 81 back 15 Ibid, p. 133 back 16 Ibid, p. 196 back 17 Ibid, p. 82 back 18 Luxemburg, Rosa Luxemburg Speaks, Mary-Alice Waters, editor, New York, Pathfinder, p. 208-209 back 19 Ibid, p. 215 back 20 Ibid, p. 216 back 21 Trotsky, The War and the International, Wellawatte, Wesley Press, p. 58 back 22 Trotsky, Writings 1937-38, New York, Pathfinder, p. 65 back

Part Five
1 Trotsky, Leon Trotsky on the Trade Unions, New York, Pathfinder, p. 73 back 2 Robert H. Zieger, The CIO: 1935-1955, Chapel Hill, University of North Carolina Press, p. 146 back 3 Workers Vanguard, January 24, 1997 back 4 Workers Vanguard, January 24, 1997 back 5 Workers Vanguard, January 24, 1997 back

Part Six
1 Workers Vanguard, March 21, 1997 back 2 V.I. Lenin, The Right of Nations to Self-Determination, Moscow, Progess Publishers, p.105 back 3 Ibid, p. 106 back 4 Ibid, p. 106 back 5 Workers Vanguard, March 21, 1997 back 6 Leon Trotsky, The Writings of Leon Trotsky 1934-35, New York, Pathfinder, p. 306 back 7 Leon Trotsky, The Writings of Leon Trotsky 1939-40, New York, Pathfinder, p. 202 back 8 Documents of the Fourth International: The Formative Years 1933-40, New York, Pathfinder, p. 394 back 9 The International Workers Bulletin, January 16, 1995 back 10 Workers Vanguard, March 21, 1997 back 11 Workers Vanguard, March 21, 1997 back 12 Workers Vanguard, March 21, 1997 back 13 Workers Vanguard, March 21, 1997 back

Part Seven
1 Workers Vanguard, February 21, 1997 back 2 Workers Vanguard, February 21, 1997 back 3 Leon Trotsky, Writings of Leon Trotsky 1939-40, New York, Pathfinder, p. 199

back 4 Foreign Affairs, Vol. 76, No. 2, March-April 1997, pp. 106-7 back

Part Eight
1 Trotsky, In Defense of Marxism, London, New Park, pp. 17-18 back 2 The World Capitalist Crisis and the Tasks of the Fourth International, Detroit, Labor Publications, pp. 17-18 back 3 Cited in David North, The Heritage We Defend, Detroit, Labor Publications, p. 381