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November 1998

BANKRUPTCY OF IMPERIALIST GLOBALIZATION AND URGENCY OF THE SOCIALIST CAUSE
By Jose Maria Sison

Speech at the Celebration of the 81st Anniversary of the Great October Socialist Revolution
Amsterdam, Netherlands

Introduction

I thank all the organizers for inviting me to speak in this celebration of the 81st anniversary of the Great October Socialist Revolution.

The broad range of organizers and mass participants in this occasion is admirable. We are all interested in the historic mission of the working class and in the pursuit of the objectives of the October Revolution. We gather at a time that the crisis of the world capitalist system is extremely grave and the urgency of the socialist cause presses upon the proletariat and people of the whole world.

The October Revolution of 1917 remains significant and relevant. It brought about the first socialist state and society. It demonstrated the capability of the working class, in unison with the peasantry, to take power and build socialism in response to imperialist crisis and war. Lenin addressed the working people with the stirring call to turn the imperialist war into a revolutionary civil war.

The Soviet Union of Lenin and Stalin scored great achievements in an all-round way and inspired the proletariat and the oppressed peoples and nations to wage revolution against imperialism and all reaction. But unfortunately, from 1956 onward, a long period of revisionist betrayal undermined and destroyed socialism. Bureaucrat monopoly capitalism took the place of socialism and ultimately brought about the complete destruction of the Soviet Union and the undisguised and unbridled privatization of public assets.

The imperialists headed by the US have gloatingly misrepresented the fall of the revisionist regimes in the Soviet-bloc countries as the permanent fall of socialism and have proclaimed that history cannot go beyond the stage of capitalism and liberal democracy. With overweening arrogance, they have trumpeted the dogma of "free market" as the essence of globalization and as the only way to economic growth and social progress.

However, in so short a time, the bankruptcy of imperialist globalization, is thoroughly exposed by the growing trend of global economic depression, social misery, political turmoil and wars. We witness today the massive destruction of productive forces in the entire world, in both the imperialist and dominated countries. The urgency of the socialist cause is clear.

Bankruptcy of Imperialist Globalization

The monstrous irrationality of imperialist globalization is that it has retrogressed to the most rapacious forms of capitalist appropriation, under the anachronistic slogan of the "free market", exactly when the social character of production has increased to an unprecedentedly high level through high technology.

Since the beginning, the policy shift from Keynesianism to neoliberalism has wrought havoc on the lives of the proletariat and the people in both imperialist and dominated countries. The main thrust of monopoly capitalism is to accelerate the concentration of capital and maximize profit through deregulation, privatization and liberalization of trade and investments.

In the name of promoting economic growth and preventing inflation, monopoly capitalism has used its imperialist state to trample upon the hard-won rights of the proletariat, bring down the wage and living conditions of the people, provide tax cuts to the monopoly firms but raise the tax on basic consumer goods and services and cut down government spending for social benefits and social services. It has done so to accelerate the accumulation of capital, maximize profits and counter the general tendency of profit and growth rates to fall in the imperialist countries.

The inevitable result is that monopoly capitalism itself shrinks its own market by disemploying large numbers of the working people and robbing them of their just wages and social benefits. The crisis of overproduction arises relative to the reduction of effective demand. Right now, amidst the shrinking market, overproduction is leading to production cutdowns, further mass layoffs and bankruptcies.

In all imperialist countries, the reality of mass unemployment is glossed over through sheer deception in official statistics. In certain imperialist countries, like the United States and the Netherlands, the illusion of employment is conjured through the generation of temporary part-time jobs in the service sector. In Japan and the whole of the European Union, monopoly capitalism is unable to conceal the chronic mass unemployment.

For some time, the illusion of growth has been conjured through the sheer abuse of finance capital. The most imaginative forms of making money on money have been devised. Real assets are overvalued through the securities market, through unbridled bank borrowings by corporations and hedge funds (speculative investment firms), through speculative mergers and through the practice of international usury at the expense of the dominated countries.

Every day, at electronic speed, trillions of dollars move around the world in financial transactions among multinational firms and banks. Central banks keep a blind eye to the private transactions until the financial collapse occurs and the IMF moves in to require the client states to assume responsibility for the private debts, raise interest rates and devalue the currency or until within the imperialist countries themselves public funds are used to bail out the private firms and banks.

Right now, the multinational firms and banks are hit hard by the economic collapses in East Asia, Russia and Latin America. Since last year, two big waves of stock market collapses have occurred on a global scale. From July to September this year, stock market collapses wiped out USD4.3 trillion. Investors shift to the bond market but yields are also falling here because of overcrowding and the pressures on the imperialist state to lower interest rates in a vain effort to stimulate production and market demand.

Under the neoliberal policy shift, the imperialist countries have dropped their pretense at aiding the economic development of the countries that they dominate. Since the 80s, they have selected only some ten countries to become the so-called emerging markets.

Some 80 percent of global direct investments flowed among the three global centers of capitalism, the United States, Japan and the European Union, chiefly to the US. Some 20 percent went to the "emerging markets", chiefly those in East Asia. Since the currency devaluations and stock market collapses in July 1997, the net flow of imperialist funds to East Asia has dropped by more than half, as capital flight has caused a deep recession.

Neoliberalism is so far the worst form of neocolonialism since the end of World War II. It freezes the "emerging markets" at their given levels of development and makes them dependent on exports, dumps on them speculative capital and surplus goods, further compradorizes them and destroys any self-reliant national industry. At the same time, the overwhelming majority of countries long depressed since the crisis of overproduction in raw materials in the late 70s are further deteriorating economically and socially.

The foreign debt burden of the third world and the former Soviet-bloc countries has shot past the USD 2.0 trillion mark. Under "free market" globalization, it has increased at a far higher rate than under the previous Keynesian policy. The funds, some USD 350 billion in the last ten years, flowed to the "emerging markets", in order to stimulate the high consumption of the exploiting classes by financing private construction booms and importation of cars and other consumption durables.

Until July last year, the multinational firms and banks extracted the highest rates of profit from the "emerging markets" in East Asia, which was being flattered as the fastest growing region in the world. Since then the force of several nuclear bombs has hit the region. Currency and stock market collapses have occurred. Foreign capital took flight as the foreign exchange holdings of these East Asian economies became depleted by the accumulation of foreign trade deficits and debt burden. There is no way for the export income to beat the import payments and debt service because of the global overproduction of the types of goods produced for export.

Among the imperialist countries, Japan has been the hardest hit, with the problem of bad loans arising from operations in Southeast Asia and South Korea coming on top of those of Japanese companies since the bursting of the Japanese economic bubble (overvalued real estate and stocks) in the early 90s. Like Japan, the US and the European Union are now increasingly hard hit by loan defaults and market contraction in East Asia.

Before July last year, more than 40 percent of the finance-capital flow to East Asia came from Japan, some 40 percent from several West European countries and only about 20 percent from the US. Forty percent of Japanese exports, 30 percent of US and some 20 percent of European went to East Asia.

Now, the imperialists speak of a contagion among the "emerging markets". They admit that a global recession is already in motion. The bankruptcies of Russia and several East European countries, Brazil and several Latin American countries, add to what is already a depression in East Asia. All major multinational banks have suffered severe losses and multinational firms have suffered big drops in sales and profit rates. Since then, there has been a sharp fall in stock markets all over the world. Values have been wiped out, ranging from 40 to 85 percent, in major multinational firms and banks in the period of July to September this year.

Under the neoliberal policy, specifically under the flexible labor policy, employment and income of the working people in the imperialist countries have been driven down, more so in the "emerging markets". Current global unemployment rate has gone beyond 40 percent and poverty afflicts 90 percent of the people of the world.

There is chronic global overproduction in all types of goods, whether these be industrial and agricultural products of the imperialist countries, the basic industrial and reassembly products of South Korea, Taiwan and Brazil, the labor-intensive consumer semimanufactures of Southeast Asia and China or the oil and gas of Russia.

The worsening chronic crisis of overproduction is leading further to the destruction of productive forces in the form of production cutdowns, mass layoffs and bankruptcies. The crisis in the real economy is also collapsing the paper pyramids of finance capital.

The IMF itself has gone bankrupt and is faced with increasing difficulties in raising bailout funds for the "emerging markets". It imposes austerity measures, high interest rates and devaluation on these economies and drive them to the ranks of the long-depressed countries of the third world.

At the same time, the US is pressing for the lowering of interest rates among the imperialist countries in order to revive their economies. But it does not want to lower its own interest rates to a level lower than those in other imperialist countries so that it can continue to attract investments from them. Interest rates in Japan and most of the EU are already much lower than those in the US.

Departing from the neoliberal norm of the US, Japan has engaged in Keynesian public deficit spending for public works since the bursting of the Japanese bubble but has failed to rise from stagnation since 1991. On the other hand, the European Union has curtailed public spending to 3 percent of its GNP in complying with requirements for the European monetary union as well as falling in line with the predominant neoliberal policy.

The Group of Seven (G7) and all their multilateral agencies, the IMF, World Bank and WTO are at a loss as to how to revive the world capitalist economy. They have contradictory proposals and they doubt the efficacy of their own proposals. They estimate that the ongoing mega-bust will continue to worsen before the economy improves within the next two to three years.

Current crisis conditions allow the imperialist countries in the OECD to push more effectively than ever before the Multilateral Agreement on Investments (MAI) on the dominated countries and trample on their economic sovereignty. But even among the imperialist countries, economic competition is sharpening in the face of the shrinking world market. The lesser imperialist powers are wary of the US breaking down the barriers to their own national economies and penalizing them for violating treaty obligations, such as national treatment to foreign investors.

In the absence of powerful revolutionary mass movements, monopoly capitalism can bounce back from a global recession and rise to a higher level of capital concentration at the expense of losing companies and the dominated countries. But an economic depression can be so severe as to lead to assertions of economic sovereignty, protectionism, higher levels of fiscal and monetary intervention by the bourgeois states, to the intensification of interimperialist contradictions and even wars, to the aggravation of social turmoil and to the rise of social revolutions, such as those that have occurred in the 20th century.

The Urgency of the Socialist Cause

The imperialists themselves and local reactionaries in the dominated countries, including their ideologues and propagandists, admit that the current conditions of global recession generate social unrest and political turmoil. The present crisis of the world capitalist system is the worst since the end of World War II and bears characteristics comparable to those that led to World War I and World War II. The severity of the crisis is such that the call for revolution and for socialism has become urgent.

The objective conditions of worsening socioeconomic and political crisis in the world capitalist system are favorable for the building or rebuilding of the Marxist-Leninist parties and revolutionary mass movements that aim for the realization of socialism.

All the basic contradictions in the world today are sharpening. These include those between the imperialist countries and the oppressed peoples and nations, among the imperialist countries and between the monopoly bourgeoisie and the proletariat.

The sharpest among these contradictions is that between the imperialists and the oppressed peoples and nations. The worst of oppression and exploitation by the imperialists and local reactionaries is unabated in Asia, Africa, Latin America and those former Soviet-bloc countries which have destroyed their industrial foundations and have retrograded into backward social and economic conditions.

In several countries, as in India, Nepal, Turkey, Peru and the Philippines, Marxist-Leninist parties are leading people’s wars. These are the advance posts of the world proletarian-socialist revolution because they answer the central question of revolution. They are committed to pursuing the new-democratic and socialist stages of the revolution. There are also other armed revolutionary movements as in Colombia, Mexico, Kurdistan, Eelam, East Timor, Burma, Cambodia, Sudan and the Congo.

However, in most of the countries of the oppressed peoples and nations, the imperialists and reactionaries are one-sidedly unleashing high levels of violence against the people. In many countries, especially in Africa, Central Asia and the Balkans, reactionary forces are engaged in internecine warfare. The widespread conditions of social and political disorder are auspicious for the proletarian revolutionaries to build parties and mass movements.

Remember that the Bolsheviks on their way to the October Revolution were able to rouse popular resistance to the violent character of the czarist rule and take advantage of its violent contradictions with the oppressed peoples in the Russian empire. So did the Chinese Communist Party avail of the united front against the northern warlords as well as the violent contradictions among the warlords.

The collapse of the "emerging markets" completely discredit not only the notion of the "free market" but also the entire world capitalist system in the same way that this system was previously discredited by the failure of the Keynesian notion of "development". In the currently sinking markets, contradictions between reactionary forces can also be utilized to generate broad anti-imperialist movements under the leadership of the proletarian revolutionary party.

In the whole of Southeast Asia, the conditions are again fertile for people’s war. In the key country of Indonesia, nationwide mass protests have forced the 32-year long Suharto dictatorship to give way to successors pretending to be more democratic. But the Indonesian people are not satisfied with anything less than the revolutionary solution to undo the military fascist dictatorship. The Filipino people and the Communist Party of the Philippines have demonstrated in the last 30 years that it is possible and necessary to wage a protracted people’s war against US imperialism and the local exploiting classes.

In Northeast Asia, the proletariat in South Korea are taking the forefront in waging general strikes and other militant forms of mass protests. Workers’ strikes and peasant resistance continue to crop up in China. Conditions exist for the development of a genuine communist party to oppose bureaucrat monopoly capitalism and the comprador big bourgeoisie and seize the initiative from the revisionists as well as the blatant anticommunist exponents of bourgeois liberalization of Chinese politics.

In many countries of Asia, Africa and Latin America, militant workers’ strikes and other forms of mass protests have broken out. Legal mass struggles can prepare for or be coordinated with the effective method of seizing political power. In these days, throughout the world, the proletariat and people of the world are standing up to celebrate the October Revolution, condemn the oppressors and exploiters and cry out for social revolution.

In most countries, republics and regions of the former Soviet bloc countries, there is the resurgence of parties that call themselves Marxist-Leninist amidst the social deterioration and disorder and the game of musical chairs of the revisionists and blatant anticommunists, social-democrats and revisionists. On October 7, in Russia, a gigantic wave of protest mass actions surged to shake the rule of the criminal new bourgeoisie. Again the people are mobilizing to celebrate the Great October Socialist Revolution.

Genuine Marxist-Leninists, grasping the revolutionary essence of the teachings of Lenin and Stalin, are bound to arise against the criminal new bourgeoisie and also the looming threat of military fascism in Russia. It is in this vast country, as in China, where the proletarian revolutionaries can draw from the history of successful socialist revolutions and strive to reestablish socialism on a large scale.

Several states retain a high measure of anti-imperialist policy. Some of them, like Cuba and North Korea, resolutely and militantly fight for national independence and socialist aspirations. The imperialists describe them all as rogue states and subject them to aggression, intervention, blockades and threats. By resisting imperialism, they contribute to the advance of the broad anti-imperialist movement.

At this very moment, the imperialist alliance headed by the US is still holding. The imperialist countries combine to oppress and exploit the proletariat and people of the world. But as the crisis of the world capitalist system worsens, their interimperialist contradictions sharpen. The imperialist powers have increasing policy differences over economic, financial, political and security matters.

The US has been quite adept at maintaining its chieftainship over the imperialist alliance and at getting the most out of such "free trade" arrangements as the WTO, APEC and NAFTA, expanding the NATO towards the borders of Russia and beefing up the US-Japan security partnership in East Asia, while decreasing US financial obligations and increasing the obligations of its allies.

The stage for interimperialist war is being laid. The NATO is provocatively expanding to the borders of Russia, stirring up complicated violent situations in the former Yugoslavia, in the entire Balkans and in Central Asia. The US is always stirring up troubles in different parts of the world and presenting itself as the final arbiter of "peace". In the process, it seizes all or most of the spoils of aggression and intervention as in the Middle East, East Asia, South Asia and elsewhere.

The class contradiction between the monopoly bourgeoisie and the proletariat is constant. It starts from the extraction of surplus value from labor power in the course of commodity production. As productivity rises, the relative rate of exploitation and mass unemployment also rises.

In the US, sustained workers’ strikes in major industries have broken out against downsizing and union-busting. In Western Europe, general strikes of unprecedented scale have emerged against chronically high rates of unemployment, the deterioration of wage and living conditions and the manifestations of racism and neofascism. In Japan, strikes and other forms of mass protest have burst out against the roots and results of the longrunning stagnation and the impositions of the US and US-Japan security partnership.

In this current period of unbridled neoliberal exploitation and unprecedented bust, the workers in the imperialist countries have all the ground for building Marxist-Leninist parties and launching general strikes and other protest movements. To advance on the road of proletarian revolution, they must fight the monopoly bourgeoisie frontally and seize the initiative from the labor aristocracy, the reformists and revisionists and cast away from the working class the spell of petty-bourgeois mentality.

It ought to be most advantageous and suitable for socialism to be built on the economic and technological foundations previously produced by the proletariat in the imperialist countries. But it is also here where the monopoly bourgeoisie is strongest in reacting to the workers’ movement and to the socialist cause.

Protracted legal struggle of the proletariat is necessary in the industrial capitalist countries. So far, the proletariat in such countries has seized power from the bourgeoisie in connection with interimperialist wars. But in the protracted class struggle of the proletariat and the bourgeoisie, any of the basic contradictions can push the rapid development of the other basic contradictions.

The revolutionary movement of the proletariat and people in the imperialist countries is more than ever dialectically interconnected with that in the dominated countries. This interconnection has a potential of spiraling in basic correspondence to the accelerated intensity and expansion of the world capitalist crisis induced by the use of ever higher technology for profit and the most avaricious methods of monopoly capitalist exploitation.

The urgency of the socialist cause is clear because of the tremendously higher social productivity fettered by monopoly capitalism and because of the bitter consequences of imperialist globalization now ravaging the entire world. The current crisis of monopoly capitalism is bound to persist with the chronic overproduction, chronic mass unemployment and chronic abuse of finance capital.

As the great Lenin has taught us, we are in the era of imperialism and proletarian revolution. This is the era of moribund capitalism and social revolution. We are in this era, especially so because revisionist betrayal of socialism and the aggravation of imperialist exploitation and oppression drive the proletariat and the people of the world to fight for socialism and to further develop the ways of staying firmly on the road of socialism.

The struggle for socialism takes a whole historical epoch. There are advances and retreats, twists and turns, in this struggle. Wherever the Red flag falls, the proletariat picks it up in order to advance. The chronic crisis of imperialism always generates the conditions for the subjective forces of the revolution to regain strength and surge forward.

The undeniable bankruptcy of "free market" globalization engenders excellent conditions for proletarian revolutionaries to carry forward the revolutionary cause of socialism. The ground is well laid out for the resurgence and advance of the world proletarian revolution and the broad anti-imperialist movement. #




 



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