The
Marxist
Volume: 15, No. 01
Jan-March 1999
Deepening World Economic Crisis And The Working Class Response
The capitalist triumphalism which flourished after the collapse of Soviet Union and the East European socialist countries could hardly have been more ill-timed. The few turbulent years since 1990-91 in the world arena have almost blown up the illusion and mirage conjured up by the protagonists of unfettered market forces for an irreversible triumph of international finance capital.
True,
the
decade
that
is
coming
to
an
end
witnessed
all
the
rivalry
and
jubilation
for
such
a
triumph,
but,
of
late,
things
have
started
a
different
face.
Asia,
whose
inter-regional
and
external
trade
makes
up
a
third
of
the
world
total,
has
entered
a
deep
slump,
which
is
now
remorselessly
spreading
around
the
world.
Shaken
by
these
ominous
developments,
one
of
the
biggest
of
the
world's
financies,
George
Soros,
warned
the
US
Congress
against
complacency
and
said
on
15
September
1998,
"the
global
capitalist
system
which
has
been
responsible
for
our
property
is
falling
apart
of
the
seams".
Some
bourgeois
economic
pundits
are
now
warning
of
a
world
depression.
Overall
deepening
True,
the
present
phase
of
capitalist
development
--
globalisation
and
the
triumph
of
finance
capital
have
opened
up
dazzling
new
opportunities
for
some
people.
It
has
shown
a
rise
of
the
corporate
power
immensely
expanding
the
wealth
and
power
of
a
few
hundred
global
corporations.
But
the
current
downturn
has
also
laid
bare
all
the
manifestations
of
unheard
of
deepening
crisis
of
the
system.
It
is
not
merely,
or
even
primarily,
a
financial
crisis.
It
is
a
deeply
rooted
crisis
of
capital
accumulation,
now
expressing
itself
as
a
crisis
of
production.
Apart
from
all
other
cause
of
the
crisis,
it
was
already
evident
that
in
East
Asia
there
was
serious
overcapacity,
especially
of
computers,
electrical
consumer
goods
and
motor
vehicles.
The
East
Asian
slump
almost
immediately
caused
a
sharp
fall
in
the
prices
of
oil
and
other
commodities
--
down
30
per
cent
at
the
end
of
last
year
to
a
twenty-year
low,
transmitting
the
crisis
to
mainly
commodity
exporting
economies.
As
is
well
known,
East
Asia,
in
any
case,
part
of
US,
Japanese
and
European
multinationals
global
production
complex.
With
the
deepening
and
spreading
of
the
crisis,
rising
unemployment
reduced
income
levels,
mounting
business
and
consumer
debt
defaults
and
government
cuts
will
further
reduce
demand
and
accentuate
over-production
on
a
world
basis.
Over-production
will
hit
the
advanced
capitalist
economies
too.
According
to
the
anarchic
logic
of
capitalism,
this
will
lead
to
a
massive
destruction
of
productive
capacity
and
higher
and
higher
levels
of
mass
unemployment.
On
the
other
side
of
the
globe,
after
the
shivering
Mexican
crisis,
it
is
now
Brazil
has
been
the
epicenter
of
economic
turmoil
and
its
shock
wave
is
bound
to
rock
the
entire
Latin
American
economies.
The
crisis
in
Russia
with
its
financial-economic
melt-down
also
represents
a
new
phase
in
the
world
economic
crisis
which
opened
with
the
East
Asian
currency
crisis
in
1997.
It
has
thoroughly
exposed
the
malignant
symptom
of
the
underlying
sickness
of
Russian
capitalism.
Far
from
being
a
dynamic
epicenter
of
global
growth,
as
many
capitalist
enthusiasts
in
tune
with
the
imperialists
claimed
until
recently,
the
Russian
economy
has
been
reduced
to
a
barbarous
jungle
dominated
by
predatory
financial
swindlers
propped
up
by
the
US
and
the
IMF-World
Bank
duo.
That
Russian
crisis
will
have
its
impact
on
Western
capitalism,
US
capitalism
in
particular,
is
also
acknowledged
by
some
western
economic
commentators.
Writing
in
Wall
Street
journal
of
17
August,
1998,
under
the
headline
`Russia's
Challenge
to
Capitalism',
Jacob
Schlesinger
comments,
"Russia's
travails
have
introduced
a
new
edginess
to
an
already
nervous
stock
market
and
were
blamed
for
atleast
some
of
the
Dow's
descent
last
week.
More
broadly,
Russia
risks
undermining
confidence
in
the
future
of
the
expanding
global
market
system
and
how
it
is
managed
--
an
optimum
that
has
given
a
huge
boost
in
recent
years
to
American
corporate
investment
plans
and
the
US
stock
markets's
rise".
The
collapse
of
the
Soviet
system
(for
whatsoever
reason)
was
taken
advantage
of
by
the
imperialist
circles
and
anti-socialist
propagandists
that
capitalism
is
a
successful
system.
Now
the
collapse
of
Russian
capitalism
is
a
loud
signal
to
cancel
this
out.
The
leaders
of
the
advanced
capitalist
countries
have
been
plunged
into
a
crisis
of
policy.
Buoyed
up
by
the
apparent
continuation
of
the
rising
`bull-market'
on
US
and
Eastern
stock
markets,
bourgeois
strategists
--
barring
a
few
like
George
Soros
--
were
resolutely
denying
the
seriousness
of
the
Asian
crisis
and
its
global
effects.
Right
from
Clinton,
Greenspan
(head
of
the
US
Central
Bank)
down
to
the
G-7
leaders
have
pooh-poohed
the
global
impact
of
these
crisis,
but
now
all
of
them
are
in
jitters.
Working
class
and
the
poor
The
global
economy
has
achieved
a
dynamic
in
which
competition
among
localities
has
become
as
real
as
competition
among
firms.
The
main
characteristics
of
this
capitalist
globalisation
may
be
summarised
as
below:
**
The
world's
money,
technology
and
markets
are
controlled
and
managed
by
gigantic
global
corporations;
**
A
common
consumer
culture
unifies
all
people
in
a
shared
quest
for
material
gratification;
**
There
is
a
perfect
global
competition
among
workers
and
localities
to
offer
their
service
to
investors
at
the
most
advantageous
terms;
**
Corporations
are
free
to
act
solely
on
the
basis
of
profitability
without
regard
to
national
and
local
consequences;
**
Relationships,
both
individual
and
corporate,
are
defined
entirely
by
the
market;
and
**
Loyalties
to
place
and
community
matter
little.
How
far
the
transnational
corporations'
loyalties
even
to
their
country
of
origin
and
their
own
communities
do
not
matter
are
amply
exemplified
by
the
constant
mobility
of
these
transnational
corporations
in
search
of
more
and
more
profits
across
the
national
horders
and
how
the
different
national
governments
compete
with
each
other
are
also
exemplified
by
the
reckless
competitive
bids
of
those
governments
ultimately
resulting
in
constantly
downward
pressure
on
the
wages
and
curtailment
of
the
trade
union
rights
of
the
workers.
As
an
ideal
case,
for
instance,
Moore
County,
South
Caralina,
won
a
competitive
bid
in
the
1960s
and
1970s
when
it
lured
a
number
of
large
manufacturers
from
the
industrial
regions
of
the
northeastern
United
States
with
promises
of
tax
breaks,
lax
environment
regulation,
and
compliant
labour.
Proctor
Silex
was
of
the
companies
attracted.
Later,
when
Proctor
Silex
expanded
its
local
plant,
Moore
County
floated
a
$5.5
million
municipal
bond
to
finance
necessary
sewer
and
water
hoock-ups
--
even
though
nearby
residents
were
living
without
running
water
and
other
basic
public
services.
Then
in
1990,
the
company
found
that
across
the
borders,
Mexico
offered
more
competitive
terms
and
then
decided
to
move
to
Mexico
leaving
at
lurch
the
Moore
County
which
had
incurred
public
debts
to
finance
infrastructural
facilities
for
the
company.
Not
simply
so,
the
company
left
behind
800
unemployed
workers
and
drums
of
buried
toxic
waste
in
the
Moore
County.
How
in
a
competitive
bid
to
lure
transnational
corporations,
the
national
governments
seek
to
divest
the
workers
of
their
elementary
rights
to
unionisation
becomes
clear
from
another
classic
example
again
involving
United
States
and
Mexico.
Americans
need
go
no
further
than
the
Mexican
border
to
get
an
idea
of
what
it
now
takes
to
be
globally
competitive.
The
maquiladoras
are
assembly
plants
in
the
free
trade
zone
on
the
Mexican
side
of
the
border
with
the
United
States.
Like
magnet,
this
zone
attracted
many
US
companies
including
General
electric,
Ford,
General
motors,
GTE,
Sylvania,
RCA,
Westing
house
and
Honey
Well
--
that
were
seeking
low-cost
locations
in
which
to
produce
for
the
US
market.
Growth
has
been
explosive
from
620
maquiladoras
plants
employing
1,19,550
workers
in
1980
to
2,200
factories
employing
more
than
5,00,000
Mexican
workers
in
1992.
Many
are
fitted
with
most
modern
high
productivity
equipment
and
technology.
But
the
most
revealing
feature
is
this
that
the
productivity
of
the
Mexican
workers
employed
in
these
modern
plants
is
comparable
to
that
of
US
workers,
average
hourly
wages
in
maquiladora
factions
are
just
$1.64,
compared
with
an
average
manufacturing
wage
of
$16.17
in
the
United
States.
Over
and
above,
to
maintain
the
kind
of
conditions,
transnational
corporation
prefer,
the
Mexican
government
has
denied
workers
the
right
to
form
independent
labour
union
and
has
held
wage
increases
far
below
productivity
increases.
In
the
summer
of
1992,
more
than
14,000
Mexican
workers
at
a
Volkswagen
plant
turned
down
a
contract
negotiated
by
their
government-dominated
labour
union.
The
company
fired
them
all,
and
a
Mexican
court
upheld
this
company's
action.
Earlier,
in
1987,
in
the
midst
of
a
bitter
two-month
long
strike
in
Mexico,
Ford
Motor
Company
tore
up
its
union
contract,
fired
3,400
workers,
and
cut
wages
by
45
per
cent.
When
the
workers
rallied
around
dissident
leaders,
being
disgusted
with
the
official
union,
gunmen
hired
by
that
official
government-dominated
union
shot
workers
at
random
in
the
factory.
Loose
enforcement
of
safety
and
environmental
regulations
is
another
attraction
for
the
US
investors.
An
investigation
team
from
the
US
General
Accounting
office
reported
to
US
Congress
how
all
six
newly
opened
US
plants
it
inspected
in
Mexico
were
operating
without
the
required
safety
measures
and
environmental
licences.
Investors
are
exempted
from
property
taxes
on
their
factories
and
public
infrastructure
--
road,
water,
housing
and
sewage
lines
with
the
workers
living
in
shanty
rooms
that
stretch
for
lines.
Thus,
the
workers
are
exposed
to
all
sorts
of
dangers
to
their
health
forcing
them
to
live
in
a
precarious
condition.
(For
more
details,
see
`When
Corporations
Rule
the
world',
David
E.
Korten,
USA,
chapter
8).
Mexican
workers,
including
children,
are
thus
heroes
of
the
new
economic
order
in
the
eyes
of
corporate
libertarians
--
sacrificing
their
health,
lives,
and
future
on
the
alter
of
global
competition
--
the
modus
operandi
of
the
present
phase
of
capitalist
globalisation.
These
are
just
typical
examples
only.
This
has
become
the
general
feature
of
the
global
competition
around
the
globe,
in
the
process
of
which
workers
are
being
sacrificed
at
the
alter
of
the
insatiable
greed
for
more
profit
and
more
profit
of
this
capitalist
globalisation.
And
the
national
governments
of
the
third
world
countries
are
becoming
wilful
collaborators
of
this
dehumanising
exploitation
of
their
workers
in
a
bid
to
lure
investment.
Globalisation
intensified
For
overwhelming
majority
people
of
the
world,
capitalist
globalisation
is
a
disaster.
While
mainstream
economists
and
the
protagonists
of
this
new
phase
of
capitalist
offensive
seek
to
belittle
or
even
ignore
the
disaster
that
is
being
spelled
out
by
the
globalisation,
the
agencies
like
United
Nations
Development
Programme
or
International
Labour
Office
or
even
World
Bank
or
the
OECD
Reports
could
not
hide
the
increasingly
darker
side
of
this
new
phase
of
capitalist
development
so
far
as
the
conditions
of
the
working
people
and
the
poorer
sections
are
concerned.
According
to
UNDP
Report
for
1998,
`Poverty
and
deprivation
are
not
only
a
problem
of
the
developing
countries'.
It
goes
on
to
record:
**
On
the
basis
of
an
income
poverty
line
of
50%
of
the
median
personal
disposable
income,
more
than
100
million
people
are
income-poor
in
OECD
countries.
**
At
least
37
million
people
are
without
jobs
in
OECD
countries,
often
deprived
of
inadequate
income
and
left
with
a
sense
of
social
exclusion
from
not
participating
in
the
life
of
their
communities.
**
Unemployment
among
youth
(age
15-24)
has
reached
staggering
heights,
with
32
per
cent
of
young
women
and
22
per
cent
of
young
men
in
France
unemployed,
39
per
cent
and
30
per
cent
in
Italy
and
49
per
cent
and
36
per
cent
in
Spain.
**
About
8
per
cent
of
the
children
in
OECD
countries
--
including
half
or
more
of
children
of
single
parents
in
Australia,
Canada,
the
United
Kingdom
and
the
United
States
--
live
below
the
income
poverty
line
of
50
per
cent
of
median
disposable
personal
income.
**
Nearly
200
million
people
are
not
expected
to
survive
to
age
sixty.
**
More
than
100
million
are
homeless,
a
shockingly
high
number
amid
affluence.
(UNDP
Report,
1998)
Obviously,
the
condition
of
the
developing
countries
is
much
more
worse.
The
Human
Poverty
Index
(HPI)
measures
the
extent
of
deprivation,
the
proportion
of
people
in
the
community
who
are
left
out
of
progress.
The
UNDP
Report
for
1998
worked
out
HPI
for
77
developing
countries
and
their
revelation
is
horrifying:
**
The
HPI
in
developing
countries
ranges
from
3
per
cent
in
Trinidad
and
Tobago
to
62
per
cent
in
Nigeria.
**
The
HPI
exceeds
50
per
cent
in
Mali,
Ethiopia,
Sierre-Leone,
Burkina
Faso
and
Nigeria.
**
Coming
to
the
subcontinent
--
for
India
HPI
is
as
high
as
35.9
per
cent,
for
Pakistan
46
per
cent
and
Bangladesh,
it
is
46.5
per
cent,
while
for
Sri
Lanka,
it
is
20.6
per
cent.
**
UNDP
estimates
HPI
for
China
with
a
different
economic
and
political
system
to
be
17.1
per
cent.
The
above
figures
calculated
by
the
UNDP
provides
a
fairly
clear
picture
of
the
condition
of
economic
development
in
the
third
world
countries
in
the
era
of
capitalist
globalisation.
The
Report
at
the
same
breath
pointedly
mentions,
"inequalities
in
consumption
are
stark.
Globally,
the
20
per
cent
of
the
world's
people
in
the
highest
income
countries
account
for
86
per
cent
of
total
private
consumption
expenditures
--
the
poorest
20
per
cent
minuscule
1.3
per
cent".
World
Employment
Report
1998-99
is
prepared
by
International
Labour
office.
In
this
new
phase
of
capitalism,
the
ILO
estimates
"that,
out
of
a
world
labour
force
of
3
billion
people,
25
to
30
per
cent
are
underemployed
and
about
140
million
workers
are
fully
unemployed.
Mainly
as
a
result
of
the
large-scale
displacement
of
workers
in
East
Asia
caused
by
the
economic
crisis",
the
ILO
extracts
"an
additional
10
million
workers
to
be
added
to
the
ranks
of
the
unemployed
by
the
end
of
1998,
inevitably
accompanied
by
a
significant
increase
in
poverty
and
underemployment
in
the
countries
directly
affected".
The
ILO
sums
up
the
employment
situation
in
the
world
as
`largely
grim'.
The
ILO
also
comes
to
the
conclusion
"rapid
globalisation
and
fast-paced
technological
progress
also
present
new
challenges
that
are
common
to
all
countries.
The
heightened
competition
and
economic
change
that
result
from
the
combined
forces
of
global
economic
integration
and
technological
advance
can
cause
instability
and
difficulties
in
maintaining
employability
of
large
segments
of
a
country's
labour
force".
The
net
effect
of
this
neo-liberal
globalisation
is
obviously
more
unemployment
and
more
misery
of
the
masses
which
is
corroborated
even
by
the
latest
UNDP
and
ILO
reports.
Only
ten
to
fifteen
per
cent
of
the
population
of
a
country
--
particularly
the
third
world
countries
are
the
beneficiaries
of
the
neo-liberal
capitalist
globalisation.
The
rest
are
ruined
by
unemployment
and
misery.
In
fact,
the
effect
of
globalisation
is
witnessing
a
come
back
of
Marx's
Theory
of
Immiseration
with
more
vangeance.
To
quote
Marx,
"The
greater
the
social
wealth,
the
functioning
capital
....
the
greater
is
the
industrial
reserve
army
....
the
greater
is
the
mass
of
consolidated
surplus-population,
whose
misery
is
in
inverse
proportion
to
the
torment
of
labour
....
The
more
extensive
in
the
industrial
reserve
army,
the
greater
is
official
pauperism.
This
is
the
general
law
of
capitalist
accumulation".
(Marx,
Capital,
Vol
I,
p.644).
But
in
this
phase
of
capitalist
globalisation,
capitalism
has
arrived
at
a
structural
crisis
resulting
in
just
not
`industrial
reserve
army'
but
a
horrifying
situation
of
structural
unemployment
which
can
be
remedied
only
by
destroying
the
structure
and
replacing
it
by
a
new
one
--
a
socialist
alternative
of
economic
and
political
structure.
Deepening
crisis
and
the
David
Rockefeller
so
fervently
hoped
twenty
five
years
ago
"free
market
forces"
are
indeed
"able
to
transcend
national
boundaries"
and
to
do
so
more
easily
than
at
any
time
in
history.
Thereby
Rockefeller
hoped
that
"broad
human
interest
....
being
served
best".
Quoting
Rockefeller's
comments,
Jeremy
Brecher
and
Tim
Costello
rightly
pointed
out
"Paradoxically,
globalisation
is
indeed
serving
`broad
human
interests'
but
in
a
very
different
way
than
David
Rockefeller
ever
imagined.
One
of
the
most
important
effects
of
globalisation
is
one
of
the
least
recognised.
Downward
levelling
is
creating
a
lose-lose,
negative
sum
game
for
the
majority
of
the
people
in
all
parts
of
the
world.
Far
from
winning,
in
a
race
to
the
bottom
nearly
all
lose.
As
a
result,
the
most
diverse
people
share
a
common
interest
in
halting
the
race
to
the
bottom".
(Global
Village
or
Global
Pillage,
South
End
Press,
p.33)
Hopefully,
clear
indications
are
visible
that
though
very
slow,
a
change
in
the
consciousness
of
the
working
class,
the
employees
and
other
sections
of
the
poor
is
taking
place
across
the
globe
realising
the
necessity
of
halting
this
`race
to
the
bottom'.
United
States
and
By
the
end
of
1998,
the
car
workers
have
one
of
the
most
militant
histories
of
struggle
because,
being
concentrated
at
the
sharp
end
of
the
production
system
in
their
thousands,
they
are
forced
to
act
collectively
to
protect
their
jobs
and
conditions.
The
world
car
industry
with
a
total
market
of
58
million
cars
had
a
capacity
of
79
million
last
year
with
an
excess
capacity
of
21
million
--
more
than
the
entire
productive
capacity
of
the
US
auto
industry.
By
the
year
2002,
this
will
be
the
equivalent
of
80
modern
assembly
plants
sitting
idle.
Now
the
world-wide
recession,
which
started
in
the
newly
industrialised
nation
of
South
East
Asia
is
putting
the
existing
auto
companies
under
tremendous
pressure.
Wage
rates
in
the
car
plant
of
Mexico,
for
example,
are
one
sixth
of
those
in
Europe.
On
average,
US
workers
have
only
just
returned
to
the
income
levels
of
the
1980s,
after
the
recession
of
the
early
1990s.
Now
households
are
generally
dependent
on
longer
hours,
several
jobs
and
more
members
of
the
family
working.
Any
increase
in
unemployment
and
return
to
a
squeeze
on
wages
will
have
a
devastating
effect
in
workers'
living
standards.
Sir
Alex
Trotman,
president
of
Fords,
said
recently
that
European
car
workers
will
have
to
take
cuts
because
"costs
are
too
high
in
Europe
including
the
social
overheads".
He
went
to
predict
that
of
the
40
car
companies
in
the
world
today,
no
more
than
six
would
be
left
in
the
next
few
years
--
two
in
the
USA,
two
in
Europe
and
two
in
Japan.
The
14,000
strong
Long
Bridge
Works
has
been
in
the
headlines
as
BMW,
the
German
owners
of
Rover,
threaten
to
shut
the
whole
plant
down
if
the
workers
don't
accept
management
imposed
working
conditions.
Though
the
trade
union
representatives
on
BMW's
European
Works
Council
(set
up
as
a
part
of
the
BC
social
chapter
regulations)
have
supported
the
company
plans,
it
is
the
rank
and
file
shop-floor
workers
have
been
defiant.
They
are
resisting
because
they
have
no
alternative.
In
Britain,
the
Liverpool
Dockers
remain
defiant
to
the
end.
Barely
in
the
history
of
the
British
trade
union
movement
a
struggle
have
caught
the
imagination
like
that
fought
by
the
sacked
Liverpool
Dockers.
Their
refusal
to
cross
a
picket
line
set
up
by
eighty
Torside
dockers
in
September
1995
was
to
unleash
a
bitter
battle
between
a
brutal
employer,
backed
by
the
police,
and
the
500
dockers
with
their
families
and
a
wide
layers
of
supporters
around
the
country
end
internationally.
This
determined
struggle
lasted
for
28
months
during
which,
almost
unprecedented
in
any
other
dispute,
only
30
of
500
dockers
never
participated
in
the
picket
line.
The
involvement
of
the
women
of
the
waterfront,
following
on
the
tradition
set
up
by
the
miners'
support
groups
in
the
1984/85
strike,
also
broke
through
new
barriers.
Liverpool
was
the
last
dock
to
return
to
work
in
the
national
dock
strike
of
1989.
The
strike
was
in
defence
of
the
dock
labour
registration
scheme
which
ultimately
confronted
the
Thatcherite
attack
designed
to
deregulation
of
labour
and
widespread
communalisation
and
temporary
contracts.
The
top
leadership
of
the
union
did
not
favour
the
strike,
but
the
rank
and
file
workers
carried
it
forward.
The
recent
struggle
of
the
Liverpool
dockers
was
a
part
of
the
global
protest
of
the
working
class
against
the
ill-effects
of
neo-liberal
globalisation.
In
Britain,
while
the
drastic
cuts
in
social
security
measures
in
the
areas
of
health
and
education
are
creating
discontent
among
the
public
service
workers,
the
British
economy
is
also
faced
with
first
signs
of
recession.
Her
`two-speed
economy'
Scotland,
the
North
and
the
Midlands
with
their
manufacturing
base,
have
been
hit
first
and
are
already
experiencing
the
first
effects
of
recession
with
job
losses.
As
a
minimum,
it
will
drop
by
1.5
per
cent
this
year
and
probably
by
a
lot
more
next
year.
Upto
1,70,000
jobs
in
the
engineering
industry
are
likely
to
disappear
by
the
end
of
the
next
year.
Moreover,
the
idea
that
Britain
was
insulated
from
the
Asian
`contagion'
has
now
been
shattered
by
the
revelation
that
UK
exports
to
Indonesia
and
Malaysia
have
plunged
by
50
per
cent,
South
Korea
by
55
per
cent,
and
those
to
Thailand
and
the
Philippines
down
by
60
per
cent.
The
crisis,
it
is
true,
has
not
yet
affected
all
parts
of
the
economy.
Before
the
full
effects
of
a
downturn
has
been
felt,
job
losses
have
spurted
in
the
banking
and
finance
sectors
of
London
with
redundancies
at
shell
and
Merril
Lynch
etc.
Jobs
in
the
city
of
London
account
for
one
fifth
of
all
jobs
in
Britain's
finance
and
banking
industry.
This
is
just
the
beginning,
as
50,000
workers
in
London
area
alone
are
threatened
with
redundancy.
Provided
a
militant
and
uncompromising
trade
union
leadership,
this
joblessness
looming
large
may
also
witness
a
spate
of
militant
trade
union
struggle
in
Britain
against
the
effects
of
the
deepening
crisis
of
capitalism.
With
the
victory
of
the
Left
and
rejection
of
the
right-wing
government
in
France
in
the
fresh
election
held
in
the
middle
of
1997,
hopes
were
raised
in
the
minds
of
the
working
people
for
an
economic
policy
quite
different
from
that
of
the
earlier
right-wing
government
during
which
the
French
working
class
fought
historic
battles
once
in
the
winter
of
1995
and
then
in
1996.
But
within
weeks
of
taking
office
in
June
11,
1997,
the
Socialist
Party
Prime
Minister
Jospin
allowed
the
Renault
Plant
at
Vilvorde
in
Belgium
to
close
and
signed
the
Stability
pact
in
Amsterdam
in
preparation
for
European
Economic
and
Monetary
Union.
In
September,
he
started
privatisation
by
offering
France
Telecom
and
Air
France
to
private
capital.
Other
policy
decisions
were,
however,
left-wing
measures.
Jospin
won
qualified
support
from
the
Left
by
taxing
some
profits,
but
overall
the
burden
of
meeting
the
Mastricht
criteria
for
EMU
still
falls
overwhelmingly
on
the
shoulders
of
the
working
people.
One
of
the
welcome
measure
was
the
law
on
the
35-hour
work
as
a
step
to
contain
joblessness.
But,
of
course,
there
is
dispute
as
to
what
extent
jobs
will
be
protected
or
new
jobs
will
be
created
by
this
new
law.
In
the
first
national
budget,
Jospin
promised
7,00,000
jobs
for
young
people
--
half
in
the
public
sector.
Some
of
these
jobs
have
actually
been
created
in
the
public
sector,
though
well
below
the
number
promised.
These
`youth
jobs'
really
mean
that
young
people
can
be
taken
on
for
low
wages,
without
the
condition
and
job
security
of
the
state
employees.
Nevertheless,
some
young
people
have
got
jobs
under
the
scheme
and
has
brought
down
the
unemployment
figure
slightly.
However,
unemployment
is
still
running
at
over
12
per
cent
and
one
of
the
major
developments
of
1998
winter
was
the
emergence
of
the
unemployed
youth's
movement
demanding
the
right
to
a
decent
income.
Occupation
and
demonstration
in
December
1997
or
January
1998
threw
the
Jospin
government
seriously
oft
balance
for
the
first
time.
The
French
Communist
Party
and
Green
MPs
though
there
were
also
in
the
government,
even
some
in
the
Socialist
Party
came
in
support
of
the
unemployed.
The
movement
of
the
unemployed
started
out
with
the
unemployed
committee
of
CGT
and
other
unemployed
action
groups
which
eventually
gathered
momentum.
Last
September
witnessed
strikes
and
demonstrations
in
the
educational
sector
by
the
teachers
as
well
as
the
students
supported
by
their
guardians
to
defend
the
education
system
and
to
repel
government
cutbacks.
One
of
the
signs
of
the
social
crisis
in
France
is
when
the
most
oppressed
sections
in
society
refuse
to
accept
their
fate
and
fight
back.
This
is
the
case
with
France's
unemployed
and
the
youth.
The
German
election
in
September
last
came
only
as
a
big
`No'
to
anti-working
class
and
neo-liberal
policies
of
Chancellor
Kohl.
He
had
to
go
and
Schroeder
of
the
SPD
because
the
new
Chancellor
with
the
incorporation
of
the
Greens
in
his
government.
The
background
of
the
defeat
of
Kohl
was
stormy
events
of
working-class
protests
against
his
government's
neo-liberal
policies.
It
was
the
final
point
of
a
development
which
began
with
mass
protests
against
the
government's
austerity
programme,
which
in
June
1996
brought
half
a
million
fighting
workers
to
Bonn
in
the
biggest
trade
union
actions
since
1945.
The
fight
was
against
government's
austerity
programme.
Since
then,
spontaneous
strike
actions
by
car
workers
against
the
reduction
of
sick
pay
in
autumn
1996
and
militant
mass
protests
by
miners,
building
workers
and
street
workers
against
unemployment
came
to
the
fore
in
spring
1997.
In
Germany,
unlike
France
after
the
success
of
Jospin,
there
may
not
immediately
develop
mass
workers'
protest
actions
to
put
the
new
government
under
pressure.
Sections
of
workers,
however,
may
take
the
opportunity
to
press
their
demands
and
it
is
also
time
that
nothing
will
change
if
the
working
class,
the
trade
unions,
the
youth
do
not
fight
for
changes
and
call
for
action
to
put
pressure
on
the
government
so
that
in
Schroeder
government
reverses
this
16
years
cuts
in
social
spending
that
it
could
tax
the
rich,
create
jobs
and
services.
But
Schroeder
is
unlikely
to
do
so
as
his
policies
are
based
on
the
acceptance
of
the
dictatorship
of
the
market,
just
as
Kohl's
policies
were.
Already
there
is
simmering
discontent
within
the
policy
markers
of
Schroeder's
government.
His
finance
minister
Oskar
Lafontaine,
of
late,
resigned
from
the
government
and
warned
Chancellor
Gerhard
Schroeder
not
to
steer
the
ruling
Social
Democratic
Party
too
far
to
the
Right,
saying
this
party
should
remember
"the
heart
lies
in
the
Left,
not
in
this
stock
market"!
Much
of
Germany's
turning
toward
Left
and
for
that
matter,
emergence
of
a
class-conscious
and
militant
trade
union
movement
depend
on
the
future
policy
of
the
Party
for
Democratic
Socialism,
the
transformed
East
German
Communist
Party
of
the
pre-1989
days.
This
is
the
main
Left-wing
party
of
Germany
winning
4,47,600
more
votes
during
the
September
election,
than
in
1994
with
92,000
votes
in
West
Germany.
Its
support
reflects
that
many
workers
and
youth,
especially
in
the
East
are
looking
for
an
alternative
to
the
Left
of
the
Red-Green
coalition.
Schroeder's
response
to
this
crisis
and
the
role
of
the
Left,
particularly
of
PDS
is
going
to
decide
the
future
developments
in
Germany.
The
SPD
accepts
the
Mastricht
criteria
and
the
EMU
and
if
simultaneously
the
general
slow
down
of
the
economy
continues,
the
government
will
be
forced
to
carry
through
harsher
attacks
on
the
working
class
in
the
event
of
which
the
perspective
of
a
militant
working
class
resistance
will
be
more
and
more
real.
Though
the
Asian
financial
meltdown
occupied
front
page
headlines
in
the
world
press,
only
in
the
middle
or
late
1997,
the
first
salvo
that
burst
the
bubble
of
this
`East
Asian
Model'
so
long
touted
by
the
World
Bank-IMF
and
the
array
of
mainstream
bourgeois
economists,
was
the
great
working
class
strike
and
upsurge
in
December
1996
in
South
Korea
joined
by
the
students,
teachers,
unemployed
youth
and
the
entire
public
service
workers.
Though
initially
denied,
the
shock-wave
of
East
Asian
financial
crisis
has
started
hitting
the
economies
world
over.
And
working
people's
militant
upsurge
in
Indonesia
reached
the
extent
of
throwing
out
the
dictator
Suharto
and
now
the
workers,
students,
youth
conduct
daily
strikes
and
demonstrations
demanding
jobs,
living
wage
and
freedom
to
organise.
The
earlier
outflawed
People's
Democratic
Party
(PRD)
which
has
strong
influence
amongst
the
working
class
is
preparing
for
a
bigger
offensive
against
the
present
regime
and
the
whole
rotten
system.
Workers'
wages
are
simply
too
low
to
live
on.
After
the
recent
rise
in
the
minimum
wage,
it
is
still
only
1,98,000
rupiahs
in
Jakarta
--
less
than
10
pound
and
1,22,000
rupiahs
in
Surabhaya.
Meanwhile,
the
government
has
introduced
laws
that
further
undermine
the
already
restricted
democratic
rights.
However,
people
are
in
a
mood
to
fight,
though
the
situation
is
to
a
certain
extent
confused.
Islamic
fundamentalists
are
also
in
the
rampage
much
to
the
help
of
the
present
regime.
But
Sukarnoputri
Megawati,
daughter
of
the
former
president
Suharto
is
the
well-known
bourgeois
politician
under
whose
leadership
struggle
for
democracy
continues.
The
PRD,
a
left
party,
is
operating
in
a
`grey
zone',
many
of
the
leaders
are
imprisoned,
but
the
party
is
not
illegal
any
more.
And,
there
has
been
a
marked
shift
in
the
mood
of
the
struggle
also
with
a
much
more
serious
attitude.
However,
the
workers
are
slowly
growing
class
conscious
and
self-confident
now
than
during
the
last
May
outburst
of
struggle
and
they
are
poised
for
gaining
more
support
than
before.
The
whirlwind
economic
crisis
sweeping
through
East
Asia
has
taken
its
toll
of
political
leaders.
With
mass
demonstration
calling
for
his
resignation,
it
seems,
it
is
now
the
turn
of
the
aging
Mohamad
Mahathir
who
ruled
Malaysia
almost
unchallenged
for
17
years.
In
September
last,
the
Queen
of
England
was
whisked
through
the
streets
of
Kulalampur
when
thousands
of
demonstrators
were
facing
the
batons
and
tear-gas
of
the
riot
police
in
protest
against
the
arrest
of
former
deputy
prime
minister
and
heir
apparent
to
Mahathir,
Anwar
Ibrahim.
The
arrest
and
the
follow-up
mass
demonstrations
indicate
the
crack
in
the
ruling
class
as
to
the
economic
policy
matter
particularly
after
the
ousting
of
president
Suharto
by
surging
tide
of
mass
struggle.
Anwar
charged
that
there
was
a
political
conspiracy
against
him
because
of
his
challenge
to
Mahathir's
cronyism
and
authoritarian
method.
Two
men
began
to
clash
seriously
over
what
kind
of
policy
Malaysia
needed
to
adopt
in
the
face
of
the
economic
hurricane
sweeping
through
East
Asia.
While
still
in
office,
as
finance
minister
as
well
as
deputy
prime
minister,
Anwar
pushed
through
a
harsh
IMF
type
austerity
package
in
December
of
1997.
As
the
country's
economy
failed
to
respond,
Mahathir
took
a
more
and
more
protectionist
approach,
denouncing
foreign
speculators,
a
`new
form
of
colonialism'
and
introducing
capital
contracts
which
upset
free
market
capitalists
at
home
and
abroad.
If
allowed
to
continue,
the
movement
against
corruption
and
nepotism
could
begin
to
involve
wider
layers
of
the
working
class.
Serious
splits
at
the
top
in
society,
in
the
face
of
social
crisis
possesses
the
potential
of
giving
rise
to
militant
mass
movement
as
witnessed
in
Indonesia
which
threw
out
Suharto.
Japan's
capitalism
is
sliding
into
a
slump
at
a
time
when
many
economic
pundits
were
still
dismissing
the
East
Asian
crisis
as
a
little
local
difficulty.
Even
the
president
of
the
giant
Japanese
electronic
group,
Sony,
Mr.
Norio
Ohga
warned
on
April
2,
1998:
"The
Japanese
economy
is
on
the
verge
of
collapsing.
If
the
economic
situation
continues
to
decline
--
this
will
no
doubt
have
a
damaging
effect
on
world
economy".
(Guardian,
April
4,
1998).
Corporate
profitability
is
plunging
(estimated
down
15
per
cent
over
1997),
and
so
it
is
not
surprising
that
big
manufacturers
are
cutting
back
capital
expenditure.
After
decades
of
urging
people
to
save
(at
miserably
low
interest
rates),
the
government
is
now
urging
them
to
spend,
more.
But
people
are
fearful
of
hard
times
to
come.
Unemployment
is
rising,
life-time
job
security
is
being
eroded
and
the
social
safety
net
is
minimal.
Zen-Roren,
the
Japan's
Left-wing
trade
union
at
the
national
level
is
already
in
the
midst
of
struggle
and
in
future
days
more
working
class
struggles
are
ahead.
Mexico,
Brazil
and
Beginning
with
the
Mexican
crisis,
the
so-called
`Asian
Tigers'
were
the
next
to
be
affected
by
the
modus
operandi
of
global
finance
capital.
Now
the
latest
one
is
Brazil
which
is
passing
through
a
severe
financial
crisis
under
the
rampage
of
the
same
global
finance
capital.
The
armed
peasant
rebellion
in
Chiapas
in
Mexico
led
by
the
peasant
organisation
Zapatistas
flared
up
under
the
unbearable
impact
of
this
crisis.
Not
simply
the
poor
Indian
peasants,
the
poor
and
the
labour
were
extremely
hard
hit
by
the
economic
collapse
in
Mexico.
A
study
conducted
by
EL
Financier
found
that
in
the
first
nine
months
of
the
Zedillo
administration,
2.193
million
people
fell
into
extreme
poverty
--
increasing
the
number
of
people
below
poverty
line
above
40
million.
The
deterioration
in
the
living
standards
of
the
poor
and
indigenous
people
has
led
to
increased
social
tensions
and
incidents
of
crime.
Apart
from
the
poor
people,
a
large
section
of
the
middle
class
has
also
been
affected
by
the
growing
unemployment.
Mexican
trade
unions'
growing
resistance
forced
the
Zedillo
government
to
announce
some
palliative
measures.
IMF
came
out
with
a
massive
bailout
programme,
but
questions
are
being
asked,
is
it
a
bail-out
programme
or
a
programme
for
putting
Mexico
on
sale
to
the
imperialists?
Now
the
financial
crisis
has
engulfed
Brazil,
a
country
which
accounts
for
45
per
cent
of
the
region's
output.
The
scale
of
its
calamity
and
its
impact
on
the
whole
region
can
not
be
underestimated.
Brazil
being
the
world's
eighth
largest
economy,
accounting
for
more
than
10
per
cent
of
the
regional
GDP.
The
crisis
will
provoke
further
shocks
throughout
the
world
economy,
while
for
a
decade
Latin
America
has
been
portrayed
as
the
success
story
for
the
application
of
neo-liberal
policies.
The
onset
of
the
crisis
for
the
Brazilian
currency,
the
real
and
the
rapid
flight
of
capital
signals
the
end
of
the
dream
of
the
Continent's
ruling
classes
that
a
new
dawn
of
stability
and
growth
had
begun.
The
impact
of
the
crisis
began
with
attack
on
the
workers.
For
2,800
Ford
workers
in
Sao
Paulo,
Christmas
of
1998
began
with
receipt
of
redundancy
notice
from
the
employers
on
24
December,
1998.
And
the
New
Year
began
with
all
the
sacked
workers
reporting
for
work
and
refusing
to
accept
the
layoff.
Two
demonstrations
of
more
than
10,000
workers
marched
in
support
of
them.
At
the
same
time,
the
state
of
Minas
Gerais
imposed
a
moratorium
on
debt
repayment
to
the
Federal
government
and
triggered
the
devaluation
of
the
real,
which
had
previously
been
pegged
to
the
US
dollar.
Since
then
the
real
has
plunged
by
approximately
50
per
cent.
And,
the
crisis
is
only
just
beginning
in
Brazil
and
in
the
rest
of
the
Continent.
In
Brazil,
more
than
50
per
cent
of
the
work
force
still
receive
less
than
US
$2
per
day
and
the
richest
10
per
cent
of
the
population
take
more
than
50
per
cent
of
the
total
income.
One
per
cent
of
the
land
owners
possesses
44
per
cent
of
the
productive
farm
land.
Less
than
3
per
cent
of
the
population
hold
nearly
two-thirds
of
Brazil's
half
billion
arable
hectors.
As
the
bottom
end
of
the
scale
53
per
cent
of
the
farmers
survive,
rather
than
live,
on
2.6
per
cent
of
the
land.
The
mass
of
the
Latin
American
population
has
gained
nothing
from
the
last
period
of
economic
growth.
Throughout
the
Continent,
an
estimated
65
per
cent
of
the
population
live
in
poverty.
This
average
figure
marks
the
desperate
situation
that
has
developed
in
some
of
the
poorest
countries
such
as
Bolivia,
Paraguay
and
Peru.
Bolivia
is
one
of
the
poorest
countries
in
the
world
where
70
per
cent
of
the
population
live
in
poverty
and
life
expectancy
has
fallen
to
less
than
60
years.
The
policy
of
massive
privatisation
in
the
Latin
American
countries
has
resulted
in
a
tightening
of
the
grip
by
the
imperialist
powers
throughout
the
region
as
foreign
multinationals
have
bought
the
privatised
sectors
of
the
economy.
Thus,
with
the
death
of
the
`Asian
Tiger'
model,
now
the
Latin
American
model
also
dies,
--
then
what
model
remains
for
the
global
finance
capital
--
that
is
the
moot
question.
When
the
East
Asian
financial
crisis
began,
first
in
Thailand,
then
engulfing
the
entire
region,
the
government
of
India
expressed
their
self-complacence
claiming
that
in
contrast
to
the
East-Asian
countries,
"India's
economic
fundamentals
are
reasonably
strong"
and
so
there
was
no
cause
for
fear.
This
was
stated
in
the
Government
of
India's
pre-budget
Economic
Survey
of
1997-98.
And
the
government
merrily
went
on
with
their
massive
privatisation
drive,
closure
of
sick
industrial
units,
forcing
workers
and
employees
to
accept
premature
retirement,
reducing
import
duty
and
offering
India
as
an
ideal
hunting
ground
for
the
foreign
multinational
companies.
But
just
one
year
after,
in
the
Economic
Survey
of
1998-99,
the
Government
of
India
offer
a
brief
mention
of
the
East
Asian
crisis,
the
financial
meltdown
in
Russia
and
the
onset
of
Brazilian
crisis,
is
compelled
to
admit
that
`India
was
not
wholly
immune
to
these
unfavourable
developments'.
But
they
refused
to
change
their
economic
policy.
Rather
their
neo-liberal
`reform
policy'
has
been
further
speeded
up
imposing
further
burdens
on
the
working
class,
peasants,
women,
youth
and
the
students.
Working
people
of
India
built
up
massive
resistance
since
1991,
the
year
of
beginning
of
their
IMF-World
Bank
dictated
new
economic
policies.
According
to
different
estimates
and
figure
available
at
least
one
million
workers
have
lost
jobs
during
this
decade.
More
are
threatened
with
loss
of
jobs
as
government
has
decided
massive
privatisation
and
closure
not
only
of
the
public
sector,
even
of
the
government
departments
alongwith
outright
closure
of
sick
units
list
in
the
public
and
private
sectors.
The
policy
of
non-recruitment
and
drastic
shrinkage
of
employment
opportunities
are
ominous
developments
for
the
working
people.
The
recently
passed
Insurance
Regulatory
Authority
Bill
and
the
Indian
Patents
Amendment
Bill
are
going
to
throw
India's
economy
in
the
clutches
of
the
multinational
capitals.
The
government
has
not
learned
any
lesson
as
to
what
hot
money
flows
mean
and
what
is
meant
when
portfolio
investment
overtakes
FDI.
The
lessons
of
East
Asia
and
Latin
America
did
not
teach
them
anything.
So,
the
Indian
working
class
has
no
option
but
put
up
a
massive
resistance.
The
last
11
December
nation-wide
strike
called
by
the
joint
platform
of
most
of
the
trade
unions
and
mass
organisations
amply
confirmed
that
all
efforts
put
together,
a
very
powerful
resistance
of
the
working
people
can
be
built
up
in
India.
And,
that
is
most
essential.
Capitalism's
economic
and
All
models
are
collapsing
one
after
another.
East-Asian
model
of
so-called
economic
development
crashed,
followed
by
Russia's
economic
collapse
in
last
August
and
then
the
onset
of
Latin
American
financial
crisis
with
Brazil
as
the
focal
point.
It
is
not
only
in
East
Asia,
Latin
America,
Russia
or
India,
the
entire
capitalist
world
is
engulfed
with
severe
crisis.
The
poor
and
the
common
masses
are
the
worst
victims
of
this
financial
crisis.
But
how
to
resist
it
effectively
and
globally?
Historically,
there
has
never
been
a
mechanical
link
between
economic
crisis
and
mass
political
movements.
The
forms
of
struggle,
especially
the
timing,
cannot
be
predicted
in
advance.
But
one
thing
is
certain.
A
deep
slump
will
shatter
the
illusions
of
capitalism
which
were
built
up
in
recent
years.
Consciousness
will
rapidly
catch
up
with
them,
not
automatically
but
with
the
conscious
efforts
on
the
part
of
the
Communists
and
other
Left
radicals
to
organise
the
toiling
people
and
built
up
massive
resistance.
The
present
stage
of
struggle
and
resistance
is
practically
a
struggle
against
the
manifestations
of
the
capitalist
economy's
malady,
its
deep
crisis.
What
is
needed
is
to
present
an
alternative
before
the
masses,
a
viable
socialist
alternative
and
create
the
necessary
confidence
and
consciousness
among
the
masses
to
translate
that
alternative
into
a
reality.
The
task
is
hard,
tortuous
and
lengthy.
But
it
has
to
be
undertaken
in
right
earnest
within
the
confines
of
national
boundaries
and
across
that
at
international
level
also.
To
fight
the
global
effects
of
capitalism,
a
new
sense
of
international
solidarity
and
unity
among
the
working
masses
is
an
urgent
task
today.